Parmod Kumar Bhatia vs Power Finance Corporation Ltd.
1996 Latest Caselaw 911 Del

JUDGMENT

K.S. Gupta, J.

(1) This petition under Article 226 of the Constitution has been filed by Pramod Kumar Bhatia on the allegations that Power Finance Corporation Limited, respondent No.1, vide personal circular No.20/94 dated September 15, 1993 (annexure Al) circulated Service Rules (annexure A2) and Rule 25.3 thereof reads as under: "VOLUNTARY Retirement of Employees: 25.3.1 An employee, who has completed 18 years of continuous service or completed 40 years of age may seek voluntary retirement by a written request. 25.3.2 The management will have the right not to grant voluntary retirement for reasons to be recorded in writing. 25.3.3 The terminal payments available to an employee who seeks voluntary retirement would be: (i) the balance in the provident fund account payable as per PFC/EPF Rules; (ii) cash equivalent of accumulated earned leave and half pay leave as per Rules of the Company; (iii) gratuity as per scheme applicable to the employees under the PFC/EGF Rules for one month's/three months' notice pay; 25.3.4 In addition, an employee whose request for voluntary retirement is accepted would also be entitled to ex gratia payment equivalent to one and a half month's emoluments (pay plus DA) for each completed year of service or monthly emoluments at the time of retirement multiplied by the balance months of service left before normal date of retirement whichever is less."

(2) The petitioner pursuant to the rules, after 18 years of continuous service and having completed 40 years of age, served a notice (annexure B) on respondent No.l seeking voluntary retirement. Through letter No.47/94 dated December 20, 1994 (annexure D) respondent No.l acceded to the petitioner's request for voluntary retirement. The petitioner was to stand relieved of his duties with effect from December 31, 1994 subject to production of 'No Objection Certificates' from the concerned departments. By December 30, 1994 the petitioner obtained requisite 'No Demand Certificates'. On December 30, 1994 he sent representation to respondent No.l for clearing his terminal dues as per the practice prevalent in the organisation and also to enable him to clear small left over dues from his house building advance. In yet another repre- sentation dated January 6, 1995 petitioner again requested respondent No.l for settling his terminal dues, after deducting a sum of Ks.37,521/30P, being the left over from the house building advance. Alongwith subsequent letter dated January 11, 1995 addressed to respondent No.l, the petitioner enclosed two cheques for Rs.37,521/30P towards the balance of the house building advance and Rs.419.00 towards library dues. Again on January 13, 1995 the petitioner made representation to the Chairman-cum-Managing Director of respondent No. 1/Corporation for clearance of his terminal dues consequent upon the acceptance of his voluntary retirement with effect from December 31, 1994. Yet another representation was made by him in the matter on January 16, 1995. It is alleged that to the immense shock and dismay of the petitioner, he received from respondent No.l a telegram dated January 21, 1995, letter dated January 21, 1995 and a copy of the personal circular No-33/95 dated January 21, 1995, on January 24, 1995 conveying that said Rule 25.3 relating to voluntary retirement notified on September 15, 1994 has been rescinded with effect from September 15, 1994 itself and the petitioner's voluntary retirement allowed vide office order dated December 20, 1994 stood withdrawn and rescinded. Petitioner was asked to resume his duties failing which his absence was to be treated as unauthorised rendering action to be taken against him. It is stated that the petitioner sent a detailed communication to respondent No.l on February 1, 1995 bringing to its notice that the said office order No.33/95 dated January 21, 1995 did not apply to him as it was detrimental to his rights. Vide letter dated February 14, 1995 respondent No.l gave the petitioner final chance to resume duty forthwith failing which action, as may be deemed fit and proper in the circumstances of the case, was to be taken against him. Thereafter on February 2, 1995 petitioner sent a legal notice through his counsel calling upon respondent No.l to settle the petitioner's terminal dues aggregating Rs.8,68,159/06P (annexure Y) but respondent No.l failed to comply with that notice. Action of respondent No.l in passing the orders dated January 21, 1995 and February 14, 1995 asking the petitioner to resume duties, after he had already been granted voluntary retirement with effect from December 31, 1994, is under challenge as illegal, arbitrary and unconstitutional. It is prayed that a writ of certiorari or any other appropriate writ, order or direction may be issued against respondent No.l quashing the order No.33/95 dated January 21, 1995 and the letters Nos.4:3(0034):l dated January 21, 1995 and February 14, 1995. It is further prayed that by issue of a writ of mandamus or any other writ, order or direction respondent No.l may be directed to treat the petitioner as having voluntarily retired from service with effect from December 31, 1994 and to settle his terminal dues with interest since January 1, 1995 @ 18.75% per annum which the respondent No.1 charges from its clients for overdue payments.

(3) In response to the show cause notice respondent No,I has filed a reply on the affidavit of Madan Lal, Senior Manager(Personnel). It is admitted that the request of the petitioner to allow him to retire voluntarily was acceded to by respondent No.1 under Rule 25.3 of the Service Rules which were brought into effect with effect from September 15, 1994. It is stated that later on it was realised that the said Rules, in so far as they pertain to voluntary retirement did not meet the criteria as laid down in various office memoranda of the Department of Public Enterprises of the Government of India, issued on the subject from time to time and as envisaged in Rule 32.1 of the said Rules. Accordingly personal circular No.33/95 dated January 21, 1995 was issued vide which it was notified that in pursuance of the decision of the Board of Directors of the Corporation, Rule 25.3 pertaining to voluntary retirement was being withdrawn and rescinded with effect from the date of notification i.e. September 15, 1994. Petitioner was also informed vide letter dated September 21, 1995 of the decision taken by the Board of Directors and as a special case his absence from duty consequent to order dated December 20, 1994 was to be treated as 'on duty' and he was entitled to full salary and other benefits for the period till he received the said letter. He was further informed that all the amounts paid by him to the Corporation in pursuance of the order dated December 20, 1994 will be returned to him upon joining the duty. It is denied that petitioner was relieved of his duties with effect from December 31, 1994. It is stated that Rs.419.00 towards library dues and Rs.3752/30P towards house building advance were still pending against the petitioner as on December 31, 1994. It is emphatically denied that the petitioner is entitled to the reliefs claimed in the petition.

(4) It is admitted case of the parties that respondent No. 1 under personnel circular No.20/94 dated September 15, 1994 circulated Power Finance Corporation Ltd. Service Rules (annexure A2), which came into force with effect from the date of notification i.e. September 15, 1994 and the petitioner sought voluntary retirement under Rule 25.3 of the said Rules by duly serving notice dated December 12, 1994 (annexure B) on respondent No.l; that vide office order No.47/94 dated December. 20, 1994 (annexure D) the petitioner's request was accepted and he was allowed to voluntary retire from service by the competent authority under said Rule 25.3 with effect from December 31, 1994 and that vide letter dated January 21, 1995 (annexure'U) Rule 25.3 pertaining to voluntary retirement by the employees, as contained in annexure A2 was withdrawn and rescinded from the date of the notification of the Rules i.e. September 15, 1994 by respondent No.l, pursuant to the decision of the Board of Directors taken in the meeting held on January 21, 1995.

(5) In view of the aforementioned admitted facts, the only short point which arises for consideration before us is whether respondent No.l could legally withdraw and rescind voluntary retirement scheme as contained in Rule 25.3 of the said Rules on January 21, 1995 retrospectively w.e.f. September 15, 1994. Contention advanced by the learned counsel for the petitioner was that respondent No.1 could not. have legally withdrawn/rescinded the said rule pertaining to voluntary retirement .retrospectively as it affected the vested right of the petitioner who already stood retired with effect from December 31, 1994. Strong reliance was placed on the decision of T.R.Kapur Vs State of Haryana, . In that case one of the arguments advanced before the Apex Court was that it was not permissible for the State Government to amend Rule 6(b) of Class I Rules with retrospective effect under the proviso to Article 309 of the Constitution so as to render ineligible for promotion to the post of Executive Engineer in Class I Service, the members of Class Ii Service, who were diploma holders although they may satisfy the condition of eligibility of eight years experience in that Class of Service. It was urged that the unamended Rule 6(b) conferred a vested right on persons like the petitioners which could not be declined by way of retrospective amendment of Rule 6(b). While dealing with that argument, it was observed in para .16 of the report on page 422 as under: "IT is well settled that the power to frame rules to regulate the conditions of service under the proviso to Article 309 of the Constitution carries with it the power to amend or alter the rules with a retrospective effect: B.S.Vadhera v. Union of India, ,Raj Kumar v. Union of India, , K.Nagaraj v. State of A.P., and State off & K v. Triloki Nath Khosia, . It is equally well settled that any rule which affects the right of a person to be considered for promotion is a condition of service although mere chances of promotion may not be. It may further be stated that an authority competent to lay down qualifications for promotion, is also competent to change the qualifications. The rules defining qualifications and suitability for promotion are conditions of service and they can be changed retrospectively. This rule is, however, subject to a well recognised principle that the benefits acquired under the existing rules cannot be taken away by an amendment with retrospective effect, that is to say, there is no power to make such a rule under the proviso to Article 309 which affects or impairs vested rights. Therefore, unless it is specifically provided in the rules, the employees who are already promoted before the amendment of the rules cannot be reverted and their promotions cannot berecalled........"

(6) As respondent No.l-Corporation is only funded by the Union of India in the Ministry of Power as alleged in para 1 of the writ petition, in the matter of framing of Service Rules etc. by it Article 309 of the Constitution has no application. It is not in dispute that the petitioner was eligible for seeking voluntary retirement on the date he applied for it under the said Rule 25.3 and further that on December 31, 1994 when he was allowed to retire voluntarily by the competent authority of respondent No.l, scheme for voluntary retirement was also in force. That being so, a right had vested in the petitioner to claim terminal payments as notified in Rules 25.3.3, 25.3.4, 25.3.5 and on the analogy of the law laid down in T.R.Kapur's case (supra) that right could not have been taken away by respondent No. 1 by withdrawing/rescinding Rule 25.3 relating to voluntary retirement with retrospective effect from September 15, 1994 on January 21, 1995. Obviously, the action taken by respondent No.l in withdrawing/rescinding the said Rule in terms of 'the order/letter dated January 21, 1995 is arbitrary and illegal and is, thus, liable to be quashed and set aside.

(7) The petition is, therefore, allowed with costs and the impugned order No-33/95 dated January 21, 1995 and letters No.4:39034):l dated January 21, 1995 and February 14, 1995 are quashed and set aside. Respondent No.l is directed to settle the terminal dues of the petitioner treating him as having voluntarily retired from its service with effect from December 31, 1994, in terms of the order dated December 20, 1994, within a period of two months from today. Petitioner will also be entitled to interest @ 12% per annum on the amounts becoming due and payable to him from January 1, 1995 till the date of payment. Parties are left to bear their own costs.