National Bicycle Karamchari ... vs Union Of India & Ors.
2009 Latest Caselaw 2289 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                        W.P.(C) NO. 5910/2000

                                     Date of Decision: 27th May, 2009
%
NATIONAL BICYCLE KARAMCHARI                 .... Petitioners
SANGH & ANR.
                 Through Dr.Ashwani Bhardwaj, Adv

                                Versus

UNION OF INDIA & ORS.                                 .... Respondents

                     Through Mr.Sanjay Katyal with Mr.Saurabh,
                             Advs. for the respondent nos.1 & 3.
                             Mr.K.    Venkatraman,      Adv.   for
                             respondent no.2.


CORAM:
HON'BLE MR. JUSTICE V.K. SHALI

1.    Whether reporters of Local papers may be
      allowed to see the judgment?                           YES
2.    To be referred to the reporter or not?                 NO
3.    Whether the judgment should be reported in
      the Digest?                                            NO


V. K. SHALI, J. (Oral)

1. Rule with the consent of the parties the matter is taken up for

final disposal.

2. This is a writ petition filed by the petitioners wherein following

two prayers have been made:

"A. That this Hon'ble Court may be pleased to strike down the Memo No.2(50)/86-DPC(W.C.) dated 19th July 1995 issued by the Department of Public Enterprises, Ministry of Industry, Govt. of India.

B. That this Hon'ble Court may be pleased to direct the Respondents to revise the pay scales of the employees of Respondent No.2 in line with the revision of pay scales and perks granted to the employees in the other Govt. Companies, with effect from 1.1.92 and grant the next revision of pay scales and perks w.e.f. 1.1.97."

3. Briefly stated the facts are that the petition has been filed by the

two unions namely National Bicycle Karamchari Sangh and National

Bicycle Employees Union through its respective General Secretary. A

list of members of the petitioner's union was given at page 58 which is

numbering around 147. It has been stated in the writ petition that the

petitioners have not been given the revision of their pay scales and

perks as have been granted to the employees of the other government

companies w.e.f. 1.1.1992 and further they have prayed for grant of

revision of their pay scales and perks w.e.f. 1.1.1997 also. One of the

prayer is also for striking down the memo dated 19.7.1995 issued by

the Department of Public Enterprises, Ministry of Industry, Govt. of

India under which the Bureau of Public Enterprises had directed

revision of pay scales of executives holding the post below the board

level and non-unionised supervisors w.e.f. 1.1.1992.

4. The respondent nos.1 and 3 had filed their counter affidavit and

challenged the prayer made by the petitioners. The main ground on

which the prayer of the petitioners has been challenged is that the

respondent company is sick and it was directed to be wound up by the

BIFR which order was upheld by the AAIFR also. Further it is stated

that the organization was suffering losses continuously starting from

the year 1996-1997. Instructions were issued by the Bureau of Public

Enterprises that in sick public enterprises which are registered with

BIFR, no pay revision etc. should be allowed to the employees and if

possible VRS/VSS scheme should be floated for golden hand shake of

the employees. Pursuant to this OM of the Government of India, VRS

scheme was floated on the basis of which the members of the

petitioner's union had taken voluntary retirement in the year 2000.

This petition was filed for the aforesaid two prayers in the year 2000

while as during the pendency, the voluntary retirement was obtained by

the members of the petitioner Union and thus there being cessation of

relationship of employee and employer the members of the petitioner

Union are not entitled to any revision.

5. I have heard the learned counsel for the parties and perused the

record.

6. So far as the challenge to the OM dated 19.7.1995 issued by the

Department of Public Enterprises, Ministry of Industry, Government of

India is concerned, the validity of the said OM has been upheld by the

Supreme Court in A.K. Bindal & Anr. Vs. Union of India & Ors., JT

2003 (4) SC 328.

7. The second prayer of the petitioners for revision of their pay

scales and perks, so as to bring it at par with the employees of the other

public undertakings and Government companies from 1.1.1992 is

concerned, it is stated that even the Bindal's case(supra) covers the

case of the petitioners in this regard also. Two aspects have been laid

down in Bindal's case, firstly, that in case an employee has obtained

voluntary retirement from the organization and there is cessation of an

employer and employee relationship between the parties then such an

employee cannot seek revision of his pay scale. Secondly, it has also

been laid down that while granting VSS/VRS scheme and the

consequent pay revision to the employees of a Government company or

a public sector undertaking the financial health of the organization

must be seen. The relevant passage is in the aforesaid paragraph needs

to be quoted here:

Para 21 "Therefore, it appears to be the consistent view of this Court that the economic viability of the financial capacity of the employer is an important factor which cannot be ignored while fixing the wage structure, otherwise the unit itself may not be able to function and may have to close down which will inevitably have disastrous consequences for the employees themselves. The material on record clearly show that both FCI and HFC had been suffering heavy losses for the last many years and the government had been giving considerable amount for meeting the expenses of the organization. In such a situation, the employees cannot legitimately claim that their pay scales should necessarily be revised and enhanced even though the organizations in which they are working are making continuous losses and are deeply in red."

Para 26 "It is further averred that in October 1998 the government announced a scheme for Voluntary Retirement for the employees of the Central Public Sector Undertakings. The scheme was liberalized and another scheme was announced on 5.5.2000 in order to give benefit to the employees of the Enterprises in which pay revision with effect from 1.1.1992 and 1.1.1997 had not been affected. The Government announced further liberalized scheme on 6.11.2001 under which the Voluntary Retirement compensation on the basis of

their existing pay (basic + DA) was increased by 100 per cent and 50 per cent respectively. According to the respondents almost 99 per cent of employees of FCI and HFC had opted for the Voluntary Retirement Scheme (for short VRS)."

Para 32 "The Voluntary Retirement Scheme (VRS) which is sometimes called Voluntary Separation Scheme (VSS) is introduced by companies and industrial establishments in order to reduce the surplus staff and to bring in financial efficiency. The Office Memorandum dated 5.5.2000 issued by Government of India provided that for sick and unviable units, the VRS package of Department of Heavy industry will be adopted. Under this Scheme an employee is entitled to an ex-gratia payment equivalent to 45 days emoluments (pay+DA) for each completed year of service or the monthly emoluments at the time of retirement multiplied by the balance months of service left before the normal date of retirement, whichever is less. This is in addition to terminal benefits. The Government was conscious about the fact that the pay scales of some of the PSUs had not been revised with effect from 1.1.1992 and therefore it has provided adequate compensation in that regard in the second VRS which was announced for all Central Public Sector Undertakings on 6.11.2001. Clause (a) of the scheme reads as under:

(a) Ex-gratia payment in respect of employees on pay scales at 1.1.87 and 1.1.92 levels, computed on their exiting pay scales in accordance with the extant scheme, shall be increased by 100% and 50% respectively."

Para 33 "The main purpose of paying this amount is to bring about a complete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights, with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance regarding enhancement to pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the

amount paid to him, the whole purpose of introducing the Scheme would be totally frustrated."

8. Admittedly, in the instant case the learned counsel for the

petitioner has admitted that after filing of the petition the members of

the petitioner's union have obtained voluntary retirement. Though it

has been urged that the said voluntary retirement has been obtained

under protest but nothing has been placed on record to show that such

voluntary retirement has been obtained under protest. Therefore, on

both these counts, so far as the petitioner union is concerned, it cannot

claim revision of pay scales in respect of its members who have

obtained voluntary retirement. As regards the second aspect also, the

respondents in their counter affidavits have given the details of the

cumulative losses suffered by the respondent organization from 1996-

1997. Admittedly the organization has been directed to be wound up by

the BIFR and the validity of the said order has been upheld by the

AAIFR. Notwithstanding the fact that the order of the appellate

authority, it shows the poor financial health of the organization. In

such an eventuality, merely on account of the fact that some other

public sector undertakings or government companies have granted the

revision of pay scales to their employees would not be a ground for

granting revision of pay scales to the members of the petitioner's union

so far as the respondent is concerned. There is no case of

discrimination to be made out with regard to two different organizations

where the financial health of two different organizations may not be at

all comparable. On this count also, the petition of the petitioner's must

fail.

9. Learned counsel for the petitioner has drawn my attention to the

averments made in the rejoinder affidavit stating that the respondent

organization is getting a substantial amount of money by way of rentals

of their property which fact is admitted by the respondent in its

additional affidavit. On the basis of the same, it was urged that even

from that additional income which has been received by the respondent

company from rentals they can be granted revision of pay scales. As

against this, the learned counsel for the respondent had urged that the

said amount which has been received by the organization from rentals

of its properties cannot be utilized for revising the pay scales as the

same is being used for the purpose for meeting the other liabilities of

the organization.

10. I feel that there is some merit in the submission made by the

learned counsel for the respondent that the rentals cannot be permitted

or utilized for the purpose of revising the pay scales of the employees of

the respondent organization especially in the light of the disabilities

which the petitioner's union suffers which has been detailed herein

above.

11. In addition to this, if one has a look at the OM dated 19.7.1995

that itself directs the revision of the pay scales w.e.f. 1.1.1992. Since

the validity of the said OM itself was challenged in the instant writ

petition and that prayer does not survive on account of the fact that the

validity was upheld in Bindal's case (supra). The second relief which

the petitioners are praying for grant of revision of pay scales w.e.f.

1.1.1992 also pales into significance.

12. For the reasons mentioned above, I am of the considered opinion

that the writ petition is without any merit and accordingly the same is

dismissed.

V.K. SHALI, J.

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