Bharat Bhushan Jha vs Union Of India (Uoi) And Anr.
2002 Latest Caselaw 896 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1. The petitioner, an employee of respondent No. 2, is aggrieved by the withdrawal of earlier acceptance of the petitioner's application under Voluntary Separation Scheme (VSS).

2. On 6.11.2000 the Government of India advised respondent No. 2 that it does not consider it feasible to attempt revival/rehabilitation of respondent No. 2 and have recommended its closure to the BIFR. It thus proposed to offer a VSS to all employees of respondent No. 2 broadly on the same terms as offered in the voluntary retirement scheme in operation. The VSS was to be kept open for three months with effect from the date of notification and the employees would have to opt for VSS within three months from the date of offer failing which they would be eligible only for retrenchment compensation under the provisions of ID Act/terms of appointment as may be applicable to them.

3. The Officers Association filed a CW No. 275/2001 in view of the proposed closure of respondent No. 2 and VSS scheme and in terms of the order dated 12.1.2001 the petitioners therein were permitted to exercise their option in terms of letter dated 6.11.2000 without prejudice to their rights and contentions in the writ petition. The petitioner who joined respondent No. 2 corporation on 18.10.1983, applied for the VSS on 6.2.2001. The application of the petitioner was accepted on 23.2.2001 and the petitioner was relieved from the corporation with effect from 28.2.2001. The letter was to the following effect:

"I am directed to invite a reference to your letter dated 6.2.2001 seeking voluntary separation under the Voluntary Separation Scheme notified by Hindustan Vegetable Oils Corporation Ltd., vide their letter dated November 9, 2000 and communicate the approval of the Competent Authority to the acceptance of your request under the said scheme without any conditions. Your dues and benefits would be calculated under the aforesaid scheme. This would, however, be subject to the final outcome of the Court case, if any, filed by you.

2. You stand relieved from the Corporation with effect from February 28, 2001 (afternoon).

3. You may collect your dues from the Accounts Division on producing the 'No Dues' certificate from all concerned."

4. The aforesaid letter was followed up by the payment of Rs. 35,000/- as an ad hoc amount and this is apparent from the letter dated 2/5.3.2001. The cheque in favor of petitioner is dated 5.3.2001.

5. The petitioner was however surprised to receive another letter dated 28.2.2001 stating that on reconsideration the acceptance of the VSS communicated to the petitioner earlier stood withdrawn with immediate effect. It is not disputed that this letter was dispatched on 5.3.2001 and the said fact is re-enforced by copy of the dispatched register. The scheme came to an end on 28.2.2001.

6. Mr. Lalit Bhasin, learned Counsel for the petitioner has assailed the letter dated 28.2.2001 in terms whereof the acceptance of the VSS communicated to the petitioner earlier was withdrawn. Learned Counsel for the petitioner contends that the matter in issue stood concluded and the impugned letter dated 28.2.2001 could not have been issued. Learned Counsel refers to the letter dated 23.2.2001 and submits that the letter stipulated that the petitioner stood relieved from the corporation with effect from 28.2.2001 (afternoon). Since the letter dated 28.2.2001 has admittedly been dispatched on 5.3.2001, there was no question of the applicability of the said letter to the petitioner or withdrawal of the acceptance of VSS which had already taken place in the afternoon of 28.2.2001.

7. Learned Counsel for the petitioner submits that the only reason for withdrawal of the VSS granted to the petitioner is stated to be some disciplinary proceedings contemplated against the petitioner. This is apparent from the counter affidavit filed by the respondents. The disciplinary proceedings in question arises from a deal for sale of cotton seeds Oil in Amritsar Vanaspati Unit finalised in April 1998 and the petitioner was one of the members of the Tender Negotiating Committee. It is stated that the disciplinary proceedings were first contemplated against the petitioner by a note dated 5.7.2000 and since as on 23.2.2001 disciplinary proceedings were contemplated against the petitioner, it is stated that VSS should not have been granted to the petitioner. A reference has been made in this behalf to the office memorandum dated 3.5.2001 issued by the Government of India, Department of Public Enterprises. In terms of the office memorandum VSS is to be acceded to in all cases except the following:

"(i) Departmental proceedings have been initiated or are contemplated and the disciplinary authority is of the view that the case may end in the imposition of penalty of removal or dismissal; or

(ii) Prosecution is either contemplated or has actually been launched against the PSU employee concerned."

8. Learned Counsel for the petitioner submits that the office memorandum dated 3.5.2001 cannot have retrospective effect and thus it would not apply to the case of the petitioner. In the alternative the submission of the learned Counsel for the petitioner is that in order for the office memorandum to apply, two requirements are mandatory--(1) that the departmental proceedings have to be initiated or are contemplated, and (2) that the disciplinary authority is of the view that the case may end in the imposition of penalty of removal or dismissal. It is thus contended that since no disciplinary proceedings were pending, assuming that departmental proceedings were contemplated, there was no opinion formed by the disciplinary authority to the effect that it may result in imposition of penalty of removal or dismissal.

9. Learned Counsel for the petitioner further submits that it is not a case of a mistake where the petitioner's name has been slipped through but a conscious decision was taken by the Board after due consideration and referred to the notice of corporate office of respondent No. 2 dated 20.2.2001 where the decision was taken to accept the request for VSS of all the employees as per the list except Shri S.C. Gupta and make arrangements for relieving of staff as per Board decision. A reference has also been made to the letter dated 27.2.2001 relating to the note on the subject of pending vigilance cases along with list of officers. The name of the petitioner appears in the list under the Heading of "Disciplinary action suggested by the Ministry". The note dated 26.2.2001 records that Board of Directors in their meeting held on 20.2.2001 had decided to accept the request of VSS of all employee's who had applied except three persons named therein irrespective of condition/vigilance clearance. This decision of the Board was communicated to the CVO in writing. It is, however, recorded in the note that the Board had taken the decision without consulting the Vigilance Division on the basis of the status of the vigilance cases given by the CVO on 19.12.2000 and subsequent developments were discussed on 8.1.2001 and letter was issued on 15.2.2001.

10. Learned Counsel for the petitioner contends that the aforesaid note further fortified his submission that the conscious decision was taken by the Board after examining the case of the petitioner and in fact a general decision has been taken to give VSS to all employees irrespective of the condition/ vigilance clearance except the three employees mentioned in the said note.

11. Learned Counsel for the petitioner has further referred to the letter dated 15.2.2001 of the Government of India dealing with the transaction in question and suggesting certain departmental proceedings, which is stated in the note dated 26.2.2001 to have been ignored, to submit that all aspects were considered before the conscious decision to grant VSS to the petitioner was taken.

12. Learned Counsel for the petitioner has also drawn attention to the advice of the CVC quoted in the counter affidavit in the following terms:

"As regards Sri B.B. Jha, Manager, it is observed that he was also one of the members of the negotiating committee for sale of cotton seed oil in Amritsar Vanaspati Unit, HVOC. As the irregularities committed are serious, the commission in agreement with the recommendation of CMD, HVOC would advise that request of VSS by Sri B.B. Jha may be permitted only if the officers do not get any extra benefit under VS scheme of HVOC, then there would have got on superannuation."

13. Learned Counsel submits that even the CVC has no objection to the grant of VSS to the petitioner so long as the petitioner did not get any extra benefit under the VSS than he would have got on superannuation. It is thus contended that the matter in controversy is not one of any disciplinary action but only of the amount which would flow to the petitioner.

14. Learned Counsel for the respondents on the other hand submit that it is apparent from the letter dated 27.2.2001 which enclosed the list of officers and the note dated 26.2.2001 that the Board had reconsidered the question and taken a conscious decision to initiate disciplinary proceedings against the petitioner. It is further submitted that the decision was in fact taken and was sought to be communicated on 28.2.2001 itself but the petitioner evaded the service of the letter and that is why the same had to be sent by post. Thus it is contended that the decision to proceed against the petitioner was taken prior to the final relationship between the petitioner and respondent No. 2 coming to an end.

15. Learned Counsel for the respondents further submit that the issuance of letter of acceptance of VSS to the petitioner was a mistake and a mistake cannot create a vested right and can always be corrected. It is further submitted that if the VSS is given it will not be in terms of what even the CVO has suggested since the benefits which will flow to the petitioner would be far in excess compared to the position if the petitioner had superannuated.

16. Learned Counsel for the respondents have also referred to the VSS and submit that there is right to refuse the VSS to any employee at its discretion as contained in para (1)(c) of the scheme which is as under:

"1. Title, commencement, jurisdiction and duration--

(c) The HVOC shall have be right to refuse the voluntary separation to any employee or group of employees at its discretion".

17. A reference has also been made to para '7' of the scheme dealing with the procedure more specifically para 7(iv) where the authority has been empowered to accept or reject an application within a period of three months at the discretion of the competent authority. The said para is as under:

"7. Procedure--

(iv) The competent authority, within a period of three months from the date of the receipt of the said application, shall take a decision to accept or reject the said application and shall communicate the decision to the official concerned."

18. It is thus submitted that the respondents were well within the rights to take the action of withdrawing the letter issued earlier accepting the VSS in the case of the petitioner.

19. Learned Counsel for the respondents have referred to the judgment of the Supreme Court in Power Finance Corporation Ltd. v. Pramod Kumar Bhatia, (1997) 4 Supreme Court Cases 280. The Counsel for the employer in the said case had advanced submissions that the acceptance of voluntary retirement of the respondent was conditional and unless the employee was relieved of his duty after payment of outstanding dues, the voluntary retirement does not become effective. In the said case the scheme was itself withdrawn in view of the fact that corporation came to the conclusion that there was no surplus staff. The Supreme Court accepted the said submission since the order was conditional order that until the dues are paid the order does not become effective. The employee therein had in fact made a request as under:

"In once again request you that the formal relieving order relieving me from PFC w.e.f. 31.12.1994 be handed over to me immediately. My service period for which ex gratia is payable be informed to me and my dues be paid immediately."

20. The Supreme Court held that the employee himself had admitted that outstanding dues could be adjusted from the amount payable to him and admittedly no such adjustments had been made. Thus the Supreme Court concluded that the employee rightly understood that unless he is relieved of the duties of the post, after the payment of the outstanding dues, the order of acceptance his voluntary retirement does not become effective. The Supreme Court further observed as under:

"7. It is now settled legal position that unless the employee is relieved of the duty, after acceptance of the offer of voluntary retirement or resignation, jural relationship of the employee and the employer does not come to an end. Since the order accepting the voluntary retirement was a conditional one, the condition ought to have been complied with. Before the conditions could be complied with, the appellant withdrew the scheme. Consequently the order accepting voluntary retirement did not become effective. Thereby no vested right has been created in favor of the respondent. The High Court, therefore, was not right in holding that the respondent has acquired a vested right and, therefore, the appellant has no right to withdraw the scheme subsequently."

21. Learned Counsel also referred to the judgment of the Supreme Court in Ram Chandra Tripathi v. U.P. Public Services Tribunal IV and Ors., (1994) 5 Supreme Court Cases 180, where it was held that principles of natural justice in administrative law would not apply where there is revocation of any order with a view to rectify the mistake.

22. Learned Counsel for the petitioner in rejoinder has referred to the fact that the first entry in the dispatch register itself is dated 5.3.2001 and thus there is no question of any attempt to serve the petitioner earlier. It is further submitted that even the note dated 26.2.2001 was signed only on 27.2.2001 and the letter dated 23.2.2001 had stated that the petitioner would "stand relieved" on 28.2.2001. The letter did not use the expression that the petitioner "will be relieved" and in view thereof the factum of relieving of the petitioner automatically came into operation on 28.2.2001 in terms of the letter dated 23.2.2001.

23. Learned Counsel for the petitioner has referred to the judgment of the learned Single Judge of this Court in Kul Bhushan Chopra v. The Punjab National Bank, 1979b(1) SLR 436 at 439, to contend that in the case of the petitioner it cannot be stated that there were any disciplinary proceedings under contemplation. The learned Single Judge observed as under:

"Until the investigation of preliminary inquiry of confidential inquiry concludes, there can be no application of mind by the competent authority if the case was fit one for initiation of disciplinary proceedings and until such application of mind, it could not be said that the proceedings, are contemplated. The mere possibility of disciplinary proceedings is outside the expression 'contemplated'."

24. Learned Counsel for the petitioner thus contend that the mere possibility of disciplinary proceedings as set out above cannot be said to be disciplinary proceedings in contemplation.

25. Learned Counsel for the petitioner also referred to the judgment of the Supreme Court in Shambhu Murari v. Project & Development India Ltd. and Anr., JT 2002 (3) SC 37, which dealt with the issue as to when an application for voluntary retirement can be withdrawn. The Supreme Court held that an employee had locus poenitentiae to withdraw his proposal for voluntary retirement before the relationship of employer and employee came to an end and thus the refusal to accept the employee's withdrawal by the employer was held to be bad in law. Learned Counsel for the petitioner submits that the same principles would apply insofar as the employer was concerned and once there is acceptance of the application of the petitioner unconditionally and it is stated that the petitioner shall stand relieved on a particular date, the petitioner stood relieved on that date i.e. 28.2.2001. No decision was communicated to the petitioner till that date and in fact it is only on 5.3.2001 that for the first time a letter purportedly issued on 28.2.2001 is stated to have been dispatched.

26. I have heard the learned Counsel for the parties.

27. The aforesaid factual matrix would show that the matter relating to the petitioner was considered as far as back 5th July, 2000 irrespective of the transaction in question over which respondent No. 2 authorities had some doubt. Respondent No. 2 despite this fact took a conscious decision on 20.2.2001 to grant VRS to all cases irrespective of the condition/vigilance clearance. Thus while the VSS of Shri S.C. Gupta was not accepted, the decision was taken to accept the application of the petitioner. This decision was taken by the competent authority of respondent No. 2. In my considered view it is thus not open for respondent No. 2 to submit that it was a mistake under which the petitioner's application of VSS was accepted.

28. Insofar as the applicability of the memorandum dated 3.5.2001 is concerned, there is force in the contention of the learned Counsel for the petitioner that the same cannot be applicable retrospectively. Learned Counsel for respondent No. 1 further submits that there were similar earlier office memorandums which have not been placed on record. However, the reading of the office memorandum dated 3.5.2001 would also show that a twin requirement has been prescribed for applicability of the office memorandum and it has not been shown that both the conditions are met i.e. of departmental proceedings being contemplated and the view of disciplinary authority that the case may end in imposition of penalty of removal or dismissal. Thus even if the office memorandum was to apply, in my considered view the case of the petitioner would not be covered by the same.

29. There is also force in the submission of learned Counsel for the petitioner that the letter dated 23.2.2001 was not conditional letter but automatically came into play on 28.2.2001. The expression used was that the petitioner "already stand relieved from the corporation w.e.f. February 28, 2001 (afternoon)". Thus nothing more was required to be done for relieving the petitioner other than the fact that the date of 28.2.2001 should arrive. The collection of the dues of the petitioner was not made a condition precedent. This letter was also followed up by payment of Rs. 35,000/- as an ad hoc amount to the petitioner. In view of this position, the case of the petitioner would be different from the one in Power Finance Corporation Ltd. case (supra) where the relieving order was conditional. If the test laid down in the said judgment is applied to the facts of the present case it would show that a jural relationship of employer and employee came to an end on 28.2.2001.

30. There is of course a dispute about the letter dated 28.2.2001. Though the said letter is dated 28.2.2001, admittedly, it was not served on 28.2.2001. It has not been shown that as to what attempts have been made to serve the petitioner with the said letter and no explanation has been forthcoming for the delay in the dispatch of the letter by almost five days. The letter was dispatched on 5.3.2001. If the contention of the learned Counsel for the respondents is assumed to be correct that efforts were made to serve the petitioner on 28.2.2001 it cannot be appreciated as to why immediate steps were not taken to issue the letter by other modes. The copy of the dispatch register also shows that it is only on 5.3.2001 that for the first time there is an entry of the letter in the dispatch register. Even if the letter had to be served by hand, it would have been entered in the dispatch register on that date.

31. It is also to be noted that the payment of the ad hoc amount of Rs. 35000/- was made vide a cheque dated 5.3.2001. If a conscious decision has been taken to withdrew the acceptance of the application on 28.2.2001, there would have been no occasion to make the payment of Rs. 35,000/- on 5.3.2001.

32. The note dated 26.2.2001 stated to be accompanied the letter dated 27.2.2001 has in fact also been signed only on 27.2.2001. The said note also shows that the Board had earlier accepted the request of all the employees except those whose names were mentioned in the note. Thus the case of the petitioner under the VSS was also accepted by the Board. It is only subsequently that some rethinking process started in view of the communications of the CVO. However by the time the action has been initiated, the jural relationship of employer and employee between the petitioner and respondent No. 2 had come to an end.

33. Insofar as the reference to the scheme is concerned, it cannot be said that there is any absolute right in the respondents to reject or accept the application. The exercise of such right has to be within the four corners of reasonbleness and fair play.

34. The Supreme Court in B.J. Shelat v. State of Gujarat and Ors., (1978) 2 Supreme Court Cases 202, has observed as under while dealing with a similar situation:

"Thus the permission to retire can be withheld by the appointing authority either when the Government servant is under suspension or against whom departmental proceedings are pending or contemplated".

35. In any event in the present case the petitioner's application had already been accepted by respondent No. 2 by a conscious decision and the issue is whether the same can subsequently withdrawn and not whether the same should have been initially accepted or rejected.

36. There is force in the submission of the learned Counsel for the petitioner that the principles in such cases would be the same whether it is the employer or employee and thus the ratio of the judgment in Shambu Murari Sinha's case (supra) would squarely applies to the facts of the present case. There cannot be any withdrawal after the acceptance and the withdrawal has to be prior to the acceptance. In the present case there was final acceptance and event the date when the petitioner had to stand relieved was notified as 28.2.2001 vide letter dated 23.2.2001. In fact in terms of the ratio of the judgment of the learned Single Judge in Kul Bhushan Chopra's case (supra) there was no contemplation of disciplinary proceedings since it was held that mere possibility of disciplinary proceedings was outside the expression "contemplated". The CVO advice also shows that there seems to be no objection to relieving the petitioner but only about the entitlement of the emolument of the petitioner since the petitioner gets a higher amount under VSS than if he had superannuated.

37. In view of the aforesaid decisions, I am of the considered view that it is not open to the respondents to have withdrawn the acceptance of the VSS in terms of the impugned letter dated 28.2.2001 and the said letter is quashed. The petitioner shall be entitled to the benefits under the VSS scheme which should be remitted to the petitioner by the respondents within a period of one month from today.

38. It is not disputed that even till date no disciplinary proceedings have started against the petitioner but the learned Counsel for the respondents submit that the matter is still under investigation. Learned Counsel for the petitioner fairly states that he has no objection to the disciplinary proceedings commencing in case the matter in issue is finalised within a period of one year from today.

39. The said statement of learned Counsel for the petitioner is taken on record and thus the respondents are granted permission to initiate disciplinary proceedings and conclude the same, provided that the needful is done within a period of one year from today. Needless to say that in such eventuality the petitioner will cooperate in the disciplinary proceedings.

40. The writ petition is allowed in the aforesaid terms leaving the parties to bear their own costs.