The Division Bench of the Supreme Court in the case of Chairman-cum-Managing Director Fertilizer Corporation of India Ltd. & Anr. vs Rajesh Chandra Shrivastava & Ors. consisting of Justices Hemant Gupta and V.Ramasubramanian observed that a party who is in enjoyment of an interim order, is bound to lose the benefit of such interim order when the ultimate outcome of the case goes against him.
Facts
The scales of pay of the employees of public sector undertakings were revised and when this benefit was not made available to the employees of Fertiliser Corporation of India Limited and Hindustan Fertiliser Corporation Limited, their employees moved writ petitions in various High Courts, in the year 1996, which were transferred to this Court.
Procedural History
By an interim order, this Court directed ad hoc monthly payments to four different categories of employees. In 2002, the Government ordered the closure of the fertiliser units and introduced a Voluntary Separation Scheme (“the Scheme”). 5675 out of 5712 employees of Fertiliser Corporation opted to go out under the same and the writ petitions were eventually dismissed by a final order, wherein this Court recorded that the interim relief was an ad hoc measure.
After this, the employees started filing applications before the Controlling Authority under the Act and included the ad hoc payment as part of the wages. The Controlling Authority started passing orders treating the ad hoc payment as part of the wages.
One of the orders so passed by the Controlling Authority was in respect of an employee by name Shri Kashi Prasad Tripathi. The orders being contrary to the interim orders as well as the final orders passed by this Court, the Management of these companies moved an application for modification of the same. But this Court observed that when the final order is passed, the interim order automatically comes to an end. Therefore, the Management filed writ petitions on the file of the High Court. As far as the Shri Kashi Prasad Tripathi case was concerned, the Management filed a writ petition which came to be allowed by a learned Single Judge of Allahabad High Court. He unsuccessfully challenged the orders before a Division Bench. Therefore, he filed a special leave petition which was allowed by this Court.
The Management filed a review petition which was dismissed, along with a curative petition. Following the order passed in the Shri Kashi Prasad Tripathi case, the Allahabad High Court dismissed all writ petitions filed in respect of the other employees. So, the Management of the Fertiliser Corporation came up with a batch of 98 appeals. The Hindustan Fertiliser Corporation came up with one appeal arising out of similar judgment of the Calcutta High Court.
Observations of the Court
The Bench observed that the question was whether the ad hoc monthly payment made by the Management was liable to be treated as part of the wages as given u/s 2(s) of the Payment of Gratuity Act, 1972 (“the Act”), especially in the light of the order passed by this Court in the case of Shri Kashi Prasad Tripathi.
Since the said order does not deal with this question, it was observed that the respondents, cannot take advantage of this order merely on the ground that the very same question of law was raised by the Management in the civil appeal and thereafter in the review petition and curative petition.
Regarding Section 2(s) of the Act, it was observed that “Irrespective of whether what was earned has been paid or remained payable, the same is included in the definition, provided it is in accordance with the terms and conditions of his employment.” Thus, it was clear that what was claimed in the first round of litigation was not what was payable in accordance with the terms and conditions of employment, as what was paid was only ad hoc. “It is a fundamental principle of law that a party who is in enjoyment of an interim order, is bound to lose the benefit of such interim order when the ultimate outcome of the case goes against him.”
Judgment
The orders holding that the ad hoc payment will form part of the wages were set aside. However, the Management was directed not to make any recovery, if payment was already made to any of the respondents or their families.
Case Name: Chairman-cum-Managing Director Fertilizer Corporation of India Ltd. & Anr. vs Rajesh Chandra Shrivastava & Ors.
Citation: CIVIL APPEAL NO.2260 OF 2022
Bench: Justice Hemant Gupta, Justice V.Ramasubramanian
Decided on: 7th April 2022
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