Om Prakash & Ors vs Union Of India & Ors
2010 Latest Caselaw 1867 Del

                 *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              WP(C) No.3425/1998

%                                             Date of decision: 9th April, 2010

OM PRAKASH & ORS                                          ..... PETITIONERS
                               Through:      Mr. A.P. Dhamija, Advocate.

                                        Versus
UNION OF INDIA & ORS                                       ..... RESPONDENTS
                   Through:                  Mr. Sachin Datta with Ms. Poorva
                                             Nanawati, Advocates for R-1&2.
                                             Mr. Paritosh Budhiraja, Advocate for
                                             R-3.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.        Whether reporters of Local papers may
          be allowed to see the judgment?                 Yes

2.        To be referred to the reporter or not?                 Yes

3.        Whether the judgment should be reported                Yes
          in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The three petitioners having taken voluntary retirement on 29th August,

1997, 31st July, 1997 & 11th July, 1997 respectively from the respondent no.3

National Project Construction Corporation (NPCC), a Government of India

Enterprise, seek a writ of mandamus directing the respondent no.3 NPCC to

grant to them the benefit of the increase in the maximum gratuity payable from

Rs.1,00,000/- to Rs.2,50,000/-. Rule was issued in the petition on 16th August,

2000. The respondent no.3 NPCC has filed a counter affidavit and to which a

rejoinder has been filed by the petitioners. The counsel for the respondents no.1

& 2 Union of India, without filing any counter affidavit has made submissions

opposing the writ petition.

2. It is the case of the petitioners that the 5th Pay Commission in its interim

report recommended inter alia the raising of ceiling on the amount of retirement

/ death gratuity from Rs.1,00,000/- to Rs.2,50,000/-; that the respondent Union of

India issued an office memorandum dated 14th July, 1995 conveying its decision,

to in accordance with the said recommendation, enhance the maximum amount

of gratuity payable under the Central Civil Services (Pension) Rules 1972 in the

case of Central government employees to Rs.2,50,000/- with effect from 1st

April, 1995; however, the ordinance amending the provisions of the Gratuity Act

to enhance the ceiling of gratuity therein from Rs.1,00,000/- to Rs.2,50,000/- was

brought belatedly in the year 1997 only, with effect from 24th September, 1997;

that the respondent no.3 NPCC on the basis of the said ordinance issued a

circular dated 15th October, 1997 raising the ceiling of gratuity from

Rs.1,00,000/- to Rs.2,50,000/- effective from 24th September, 1997. The

petitioners, who as aforesaid took voluntary retirement before 24th September,

1997, thus did not get the benefit of the enhanced gratuity.

3. It is the case of the petitioners that pursuant to the recommendations of the

4th Pay Commission in the year 1984 also, though the pay scales of the central

government employees were enhanced but the pay scales of the employees of the

various public sector undertakings were not increased; the associations of

employees of various public sector undertakings had filed writ petitions in the

various High Courts and also in the Supreme Court in this regard; that ultimately

the Government of India vide letter dated 7th April, 1986 informed the Supreme

Court that the question with regard to the revision of pay structure and other

emoluments and conditions of service in respect of public sector employees shall

be referred to a high powered committee; the said high powered committee

submitted its report to the Supreme Court and the Supreme Court vide its

judgment dated 3rd May, 1990 in Writ Petition No.13044/1984 and other

connected writ petitions inter alia directed that the pay revision in respect of the

public sector employees in respect of whom the recommendations were then

being directed to be implemented, shall thereafter take place as and when similar

changes are effected for the Central government employees. The petitioners thus

contend that in accordance with the said direction of the Supreme Court, the

petitioners being the employees of a public sector undertaking as the respondent

no.3 NPCC is, also became entitled to enhanced gratuity w.e.f. 1st April, 1995 in

accordance with the office memorandum dated 14th July, 1995 (supra) of the

Government of India. The petitioners on the said basis claim that on the date of

their voluntary retirement in the year 1997, even though prior to the amendment

in the Gratuity Act, they became entitled to payment of enhanced gratuity.

4. The petitioners in the writ petition have also averred that they cannot be

discriminated against vis-à-vis the employees of the Government of India in the

matter of payment of gratuity and claim that the ordinance amending the Gratuity

Act w.e.f. 24th September, 1997 instead of w.e.f. 1st April, 1995 (w.e.f. which

date enhanced gratuity became payable under the CCS (Pension) Rules to the

Central government employees to be discriminatory and violative of Article 14

of the Constitution of India. It is pleaded that there is no reasonableness or

justification in classifying the cut-off date as 1st April, 1995 in respect of Central

government employees as against the cut-off date of 24th September, 1997 in

respect of the other public sector employees. It is pleaded that the Gratuity Act

being a social legislation, the two different dates for Central government

employees and the public sector employees have no nexus with the object sought

to be achieved.

5. The respondent no.3 NPCC in its counter affidavit has inter alia pleaded

that the petitioners as public sector employees were governed by the provisions

of the Gratuity Act and in accordance therewith gratuity was released to them;

per contra the central government employees are governed by their own rules and

regulations and the gratuity paid by Union of India to its employees is governed

by the CCS (Pension) Rules and the central government employees are not

covered by the Gratuity Act. It is thus averred that no case for discrimination is

made out. With respect to the directions in the judgment dated 3rd May, 1990

(supra) of the Supreme Court, it is stated that the same is not applicable to

payment of gratuity which is payable to the employees of the respondent no.3

NPCC under the Gratuity Act.

6. The counsel for the respondents Union of India has urged that the

Supreme Court in A.K. Bindal Vs. Union of India 2003 (5) SCC 163, in para 34,

has held that under the voluntary retirement schemes (VRS) a considerable

amount is paid to an employee ex-gratia besides the terminal benefits and what is

known in the business world as 'Golden Handshake'; that after the amount is paid

and the employee ceases to be under the employment, 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. It was held that if the employee is

still permitted to raise a grievance regarding enhancement of pay scale from a

retrospective date, even after he has opted for the VRS and has accepted the

amount paid to him, the whole purpose of introducing the Scheme would be

totally frustrated. The counsel for the respondents Union of India contends that

the petitioners are not entitled to any relief on this ground alone. It is contended

that the office memorandum dated 14th July, 1995 was in existence at the time

when the petitioners took voluntary retirement and if they intended to make a

claim for enhanced gratuity on the basis thereof, they should have made the

claim then and cannot be permitted to raise it after having availed of the benefit

of VRS.

7. The counsel for the respondents Union of India also contends that there

always has to be a cut-off date and no argument of discrimination on the basis

thereof can be raised. Reliance in this regard is placed on State of Bihar Vs.

Bihar Pensioners Samaj 2006 (5) SCC 65 reiterating that fixing of a cut-off date

for granting of benefits is well within the powers of the government as long as

the reasons therefor are not arbitrary and are based on some rational

consideration. It is contended that the cut-off date of 24th September, 1997 of

amendment of the provisions of the Gratuity Act cannot be challenged. The

counsel for the petitioner has only responded by urging that the judgment in A.K.

Bindal (supra) is being re-considered by the Supreme Court. It is also contended

that the petitioners are not asking for any revision and claiming only the

enhanced gratuity to which they were entitled as aforesaid on taking VRS.

8. Though neither counsel has cited but I find that recently another Single

Judge of this Court in SAIL Ex-Employees Association Vs. Steel Authority of

India Ltd. MANU/DE/1649/2009 dismissed the identical claim as made in the

present petition. However, I choose not to dispose of this petition merely on this

basis for the reason that the petitioners in SAIL Ex-Employees Association

(supra) were unrepresented and also because it is observed in the said judgment

that the petitioners therein had not placed before the Court any basis for their

claim. In the present case as aforesaid, the petitioners have relied upon the

direction in the earlier judgment dated 3rd May, 1990 of the Supreme Court and

have also urged the plea of discrimination.

9. As far as the argument of discrimination is concerned, I find that a five

judge bench of the Supreme Court in Hindustan Antibiotics Ltd. Vs. The

Workmen AIR 1967 SC 948 had held that though in fixing the pay structure of

the public corporations, due regard should be had to the pay structure in the civil

services, the same was only advisory in nature and did not mean that the wage

structure of the public corporations should be of the same pattern obtaining in

departments of the Government. It was further held that the service conditions of

employees in public sector undertakings are not analogous to those of the

Government employees; there is no security of service; the fundamental rules do

not apply to them; there is no constitutional protection; there is no pension; they

are covered by service standing orders; their service conditions are more similar

to those of employees in the private sector than those in Government

departments. The said judgment of the five judge bench of the Supreme Court

was recently discussed by another five judge bench of the Supreme Court in

Kishan Prakash Sharma Vs. Union of India AIR 2001 SC 1493 and was not

dissented from.

10. That being the position, the question of violation of Article 14 of the

Constitution of India does not arise. That arises only if the persons are similarly

placed. Article 14 does not apply in a vacuum. The equality clause contained in

Article 14 will have no application where the persons are not similarly situated or

when there is a valid classification based on a reasonable differentia. Reference

in this regard may be made to Government of West Bengal Vs. Tarun K. Roy

2004 (1) SCC 347.

11. The Supreme Court having held that the employees of Central government

and of the public sector enterprises are not equally placed, the argument of

discrimination cannot be accepted.

12. As far as the claim of the petitioners on the basis of the order dated 3rd

May, 1990 (supra) of the Supreme Court is concerned, it merely provides that the

pay revision for those employees of public sector undertakings, in respect of

whom the recommendations were being directed therein to be implemented, will

thereafter also take place as and when similar changes are effected for the central

government employees. The revision in gratuity cannot be said to be a pay

revision. Gratuity is admittedly payable to the employees of the respondent no.3

NPCC under the provisions of the Gratuity Act and enhancement in gratuity

would become payable only on an amendment to the Gratuity Act and not by

virtue of the office memorandum pertaining to the central government

employees. Thus the petitioners have no claim on the basis of the said direction

in the order dated 3rd May, 1990 of the Supreme Court, either. The Supreme

Court then was not concerned with the date from which the employees of the

public sector would become entitled to the benefits of revisions effected by the

Central Government. If some step is required to be taken, as of amendment of

the Gratuity Act, then the said judgment of the Supreme Court cannot be read as

laying down that the public sector employees will become entitled to such benefit

even without such step being taken. In fact there is no mention of gratuity in the

said judgment.

13. There is merit also in the contention of the counsel for the Union of India

that the petitioners having settled their claims under the VRS, and after having

received benefits therein, are now not entitled to make the present claim. The

counsel for the petitioners has been unable to show anything contrary to the

judgment in A.K. Bindal.

14. The counsel for the petitioner has post hearing filed written submissions

in which mention is made of office order dated 29th May, 1998 of ONGC,

another public sector undertaking enhancing the ceiling of gratuity to Rs. 2.5 lacs

retrospectively w.e.f. 1st April, 1995 and typed copy of which office order was

filed by the petitioners with their rejoinder. Firstly, the respondents have had no

occasion to meet the said plea, neither in pleadings nor during the arguments.

Secondly merely because another public sector undertaking chose to, even

without amendment to the Gratuity Act, enhance the ceiling on gratuity, cannot

compel the respondent No.2 to follow suit. Section 4(5) of the payment of

Gratuity Act, 1972 itself provides for rights of employee to receive better terms

of gratuity under any award or contract with the employer. Though the Supreme

Court in Kishan Prakash Sharma (supra) directed parity in nationalized

insurance companies, but for the reason of being in the same sector. ONGC and

NPCC are not in the same sector and no foundation has been laid by the

petitioners for parity in gratuity in the said two public sector undertakings.

15. The petition thus fails and is dismissed. However, no order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) 9th April, 2010 gsr