Sunit Kumar Singh vs Hotel Corporation Of India Ltd.
2010 Latest Caselaw 2016 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI
                W.P. (C ) No. 11887/2009

                    Judgment reserved on : 22.01.2010
                    Judgment pronounced on : 19.04.2010
Sunit Kumar Singh                                      ......Petitioner
                         Through: Mr. N. Safaya, Advocate

                         Versus

Hotel Corporation of India Ltd.                  ..... Respondent

                         Through: Ms. Padma Priya, Advocate.
CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR,

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                           Yes

2. To be referred to Reporter or not?                        Yes

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

KAILASH GAMBHIR, J.

*

1. By this petition filed under Article 226 of the Constitution

of India, the petitioner seeks quashing of the order dated 04.09.2009

passed by the respondent No.1 Hotel Corporation of India Ltd.

thereby relieving the petitioner from his services under the VRS

Scheme and order dated 14.09.2009 whereby the representation of

the petitioner was rejected. The petitioner also seeks a declaration to

declare the VRS Scheme of the respondent Corporation having

become defunct or lapsed in absence of further disinvestment of the

respondent's assets of the remaining units.

2. A conspectus of facts of the case relevant for deciding the

present petition are that the petitioner is employed as a Senior Sous

Chef in the respondent Corporation and is presently posted at a Unit

of the respondent No.1 known as Chefair Flight Catering Delhi at IGI

Airport, New Delhi. Vide office order dated 08.07.2002, the

respondent No.1 Corporation invited options from its employees to

opt for voluntary retirement scheme and in response to the said

scheme many employees of the respondent No.1 opted for their

voluntary retirement, including the petitioner, who gave his option

vide application dated 06.08.2002. Along with the said office order,

the respondent No.1 also circulated the guidelines governing the said

scheme. It will be relevant to reproduce the said office order and also

some of the relevant terms and conditions of the scheme as under:-

"OFFICE ORDER

Options for accepting Voluntary Retirement Scheme are hereby invited from all employees of Centaur Hotel Delhi Airport including Chefair, Delhi, Chefair, Mumbai including Dining Facilities Centre and also the employees of Head Office who had opted for Centaur Hotel Delhi and Chefair, Mumbai, as the case may be. On acceptance of the Voluntary Retirement by the Company, the Scheme would be operative only in the eventuality of disinvestment on completion of the transaction of the respective business to which the employees belong. A copy of the Scheme is enclosed for perusal, information and sake of clarity. The employees are advised, if they are interested, that they may submit their applications in the prescribed format enclosed with the Scheme referred herein above latest by 7th August, 2002, which on receipt will be processed and details thereto would be provided to the prospective bidders with the list of employees whose Voluntary Retirement options have been accepted by the HCI and they would be accordingly asked to make upfront payment of the requisite amount. The upfront amount so received would be disbursed to the employees of the respective units on the date of transfer of business and simultaneously their claim for terminal benefits would also be processed and settled by the HCI itself.

All HODs are advised to kingly bring out the contents of the above Office Order to the knowledge of each employee and may arrange to have their application collected so as to reach the undersigned on or before 7th August, 2002. "

             "VOLUNTARY         RETIREMENT        SCHEME      FOR
    INVITING OPTIONS"
               1.    APPLICABILITY:

The Scheme shall apply to all regular executives and non- executives of Centaur Hotel, IGI Airport, Delhi including Chefair Flight Catering Delhi and Chefair Flight Catering Mumbai including Dining Facilities Centre, the employees of Head Office who had opted for Centaur Hotel Delhi/Chefair Flight Catering Mumbai as the case may be. It shall not apply to temporary casual, daily wagers/contractual employees and employees who are not on the permanent rolls.

1.1. This Scheme shall be made applicable only in the eventuality of disinvestment of Centaur Hotel Delhi and/or Chefair Flight Catering Mumbai on successful completion of transaction in respect of the business to which the employees belong.

6. TENURE:

6.1 The Scheme would be kept operative for a period of 30 days effective 9th July, 2002. The Management will convey their acceptance to the Voluntary Retirement Scheme application of the employee within 90 days of the closure date indicated for the Voluntary Retirement Scheme.

6.2 The Company reserves the right to extend or reduce the period of the operation of the Scheme or to withdraw the Scheme, suspend operation of the Scheme without any notice or without assigning any reasons therefore and/or to modify, alter, amend or vary the Scheme in any manner without any notice and without assigning any reasons therefore.

11. The employees whose request for voluntary retirement is accepted by the Competent Authority would be released on the transfer date i.e. the date on which business will be transferred to the party buying the business of the respective Unit. The final settlement of their accounts with the Company will also be processed simultaneously.

NOTE:

( a ) The options being invited by the Company would be processed and a list of the employees whose Voluntary Retirement has been accepted by the Company would be drawn and the bidders would be accordingly asked to make upfront payment of the requisite amount. In this regard it is clarified that Voluntary Retirement would only be given on successful completion of transaction in respect of the business to which the employees belong. The upfront payment towards VRS would be obtained from the prospective purchasers, which will be kept with the Company with the stipulation that the said amount would be used only towards disbursing VRS payment to the employees of the respective units. "

3. Consequently, vide letter dated 09.11.2002 the

respondent No.1 Corporation intimated the petitioner that his name

stood included amongst the employees who had opted for Voluntary

Retirement Scheme and that the same has also been intimated to the

Global Advisors for the purpose of disinvestment of the property of

Chef Air Flight Catering, Delhi. It was also intimated to the petitioner

that the VRS compensation would be released to the petitioner on the

transfer date i.e. the date on which the business would be transferred

to the succeeding party and that before the actual disbursement, due

notice shall be given to the petitioner. In this communication, the

respondent No.1 corporation reiterated that the entire scheme of VRS

is subject to the Unit being disinvested. Relevant para of the said

letter is reproduced as under:-

"The entire scheme is subject to the Unit being disinvested, to which you belong i.e. Chef Air Flight Catering, Delhi, as and when decided by the Government and your claim would be settled appropriately subject to the fulfillment of the conditions mentioned in para 3 of Staff Notice No. CFCD/PER/02.18(3)/1008 dated 16.08.2002."

5. Thereafter, the said voluntary scheme was amended by

the respondent No.1 as there was some delay in the disinvestment

process and through the amended scheme, an option was given to the

employees who had earlier applied and whose applications were

already accepted that they can withdraw their application from VRS,

if they so desire, within 30 days from the issue of the said notice of

amendment. The staff notice Amendment dated 28/29.03.2003

introducing the said amendment is reproduced as under:-

"STAFF NOTICE Voluntary Retirement Scheme - Amendment Vide our Office Order No. MD/HCI/DEL/OR-VRS/04 dated July 08, 2002, displayed on the notice Board of the Company in each of the Units, we had also displayed the Voluntary Retirement Scheme (VRS) as formulated by the Company. In response to this Notice/Voluntary Retirement Scheme number of applications were received from the employees. Subsequently, Management had displayed names of the employees whose applications for VRS was accepted and also individual letters of accepting the application for VRS were issued to the eligible employees. This Voluntary Retirement Scheme was subject to the concerned unit being disinvested.

2 . Since there has been some delay, in order to facilitate the employees who had applied for the Voluntary Retirement Scheme, Management has decided to proceed with the Voluntary Retirement Scheme. Consequent to this decision of the Management, following amendments are notified in the VRS Scheme announced earlier. a ) In view of the modified VRS Scheme now offered under this Staff Notice, it will not be obligatory on the part of the purchasers(s) to offer any further VRS at the time of disinvestment.

( b ) The employees whose applications for VRS is accepted, will be relieved on the date(s) decided by the Managing Director, taking into account the exigencies of work. ( c ) The employees who had not applied for VRS earlier, can now apply for VRS within 30 days from the date of issue of this notice.

( d ) The employees who had applied earlier and whose applications were already accepted, can withdraw their application from VRS, if they so desire, within 30 days from the issue of this notice.

( e ) The applications already accepted and not withdrawn after the issue of this Notice and fresh applications approved by Managing Director, stand accepted. 3 . The amended copy of the Voluntary Retirement Scheme is also displayed alongwith this Notice for information, perusal and further action of the employees of these Units. "

6. However, the petitioner did not exercise his option to

withdraw from the said scheme after the introduction of the said

amendment in the said scheme. Vide letter dated

26.04.2006/2.05.2006 the petitioner was informed that his request for

VRS is accepted and since the Board of the respondent No.1

Corporation, as per the directions of the Ministry of Civil Aviation,

has taken a decision to outsource the Management of the remaining

Units of respondent No.1, therefore the decision to relieve the

petitioner under the VRS will be taken after the finalization of the

Management Contract. In the meanwhile some of the Units of the

respondent No.1 corporation were sold under the investment plan of

the Government of India i.e. the Centaur Hotel Bombay and another

hotel in Rajgir in Bihar, but the Centaur Hotel IGI Airport and its unit

Chefair Flight Catering Delhi, where the petitioner was employed,

neither disinvested nor outsourced and the same continued to

function under the management and control of the respondent No.1

Corporation. The petitioner who had given his option in the year

2002 also continued in service as he was not relieved from his

services due to the said Unit of the petitioner not being disinvested or

outsourced. However, vide letter dated 04.09.2009 the petitioner was

intimated that he will be relieved from the service of the Corporation

on 03.10.2009. Feeling agitated with the said communication, the

petitioner made a representation with a request to allow him to

continue in service but the said representation of the petitioner was

rejected by the respondent No.1 Corporation vide their

communication dated 14.09.2009. Aggrieved with the said rejection

order, the petitioner has approached this court challenging the said

decision of the respondent No.1 Corporation being arbitrary, illegal

and unwarranted.

7. Mr. N. Safaya, counsel for the petitioner strenuously contended

that the option exercised by the petitioner for the VRS Scheme was

subject to the disinvestment of the Centaur Hotel IGI Airport, Delhi

including the Chefair Flight Catering, Delhi and once the

disinvestment of the said unit has not taken place, the option given by

the petitioner could not have been accepted by the respondent No.1

Corporation. The contention of the counsel for the petitioner was that

the petitioner had agreed to opt for the VRS Scheme only because of

the fact that the respondent had announced disinvestment of the said

Unit where the petitioner was working and once no such

disinvestment has taken place, the respondent Corporation had no

right to accept the said option of the petitioner. He further submitted

that the entire VRS as announced by the respondent was linked with

the disinvestment of various Units of the Corporation and even the

VRS compensation was to be paid by the respondent Corporation on

the date when the business of the Unit was to be transferred to the

succeeding party. Counsel further submitted that even in the

amended scheme, notified through Staff Notice dated 28/29.03.2003,

it was clearly stipulated that the Voluntary retirement scheme was

subject to the concerned Unit being disinvested. Counsel on behalf of

the petitioner thus urged that once the said representation of

disinvestment was made by the respondent No.1 and under the garb

of the same if the offer has been accepted by the employees and in

case no disinvestment takes place, then it can be clearly inferred that

there was a misrepresentation made by the respondent No.1 to its

employees and any offer made by the petitioner on such

misrepresentation will get nullified under the provisions of the

Contract Act.

8. Refuting the said submissions of the counsel for the

petitioner, Ms. Padma Priya, counsel for the respondent vehemently

contended the stand of the respondent that he accepted the said VRS,

for which the offer through his application was made knowing fully

well the terms and conditions of the said Scheme. Counsel also

submitted that because of the delay in the disinvestment process, the

said VRS Scheme was amended and a fresh opportunity was given by

the Corporation to its employees to withdraw from the said scheme if

they so desire within a period of 30 days from the date of issue of

notice but since no such request was made by the petitioner therefore

he cannot now turn around and challenge the said VRS Scheme of

respondent No.1. Counsel for the respondent further placed reliance

on the judgment of this court in the case of Suresh Kumar Rana and

Ors. Vs. The Managing Director, Centaur Hotel Corporation of

India Ltd. 2008 (100) DRJ 17, which decision as per counsel for

the respondent deals with all the issues that have been raised by the

petitioner in the present petition.

9. I have heard counsel for the parties at considerable

length.

10. Through the office order dated 08.07.2002, the

respondent Corporation had announced Voluntary Retirement Scheme

and in the said office order itself the respondent made it quite clear

that the Scheme would be operative only in the eventuality of

disinvestment on completion of the transaction of the respective

business to which the employees belong. Even in the guidelines

formulated by the Corporation for inviting options for VRS, it was

made clear that the scheme of the VRS shall be made applicable in the

said eventuality of disinvestment of Centaur Hotel, Delhi Airport,

(including Chef Air Flight Catering, Delhi) and/or Chef Air Flight

Catering, Mumbai on successful completion of transaction in respect

of the business to which the particular employees belong. In clause

11 of the guidelines, it was also notified that the employees whose

request for voluntary retirement was accepted by the competent

authority, would be relieved on the transfer date i.e. the date on

which the business will be transferred to the party buying business of

the respective units. Even in the Note appended to the said

guidelines, it was clarified that voluntary retirement scheme would

only be given on successful completion of transaction in respect of the

business to which the employees belong. Even in the amended

scheme it was again reiterated by the Corporation that the Voluntary

Retirement Scheme was subject to the concerned Unit being

disinvested. Although the option was given to the employees to

withdraw their applications from the VRS within a period of 30 days

from the date of the notice of the amended scheme, yet it is quite

clear that nowhere did the Corporation indicate that the said VRS

Scheme had no link with the disinvestment of the concerned unit. It

is not in dispute between the parties that so far the Unit i.e. Chefair

Flight Catering attached to Centaur Hotel, Delhi is concerned, it has

not been disinvested and the same has been outsourced and therefore

the entire premise on which the said VRS Scheme was announced, so

far the said unit is concerned, vanishes. Undeniably, the petitioner

continues to work in the said Unit even after the acceptance of his

application as long back in the year 2000 itself but he was never

relieved from his duties and rather vide communication dated

26.04.2006/02.05.2006, the petitioner was intimated that the decision

to relieve the petitioner under the VRS Scheme will be taken after

finalization of the said Management Contract to outsource the

management of the said Unit. No where in the relieving letter dated

4.9.2009, the respondent Corporation has referred to the

disinvestment of the Unit where the petitioner was employed or the

finalization of the Management contract for outsourcing the

management of the Unit of the petitioner. Here, it would be

worthwhile to refer to the recent judgment of the Supreme Court in

the case of Bank of India vs. K. Mohandas (2009)5 SCC 313

wherein it dealing with the contract of VRS observed as follows:

" 28. The true construction of a contract must depend upon the import of the words used and not upon what the parties choose to say afterwards. Nor does subsequent conduct of the parties in the performance of the contract affect the

true effect of the clear and unambiguous words used in the contract. The intention of the parties must be ascertained from the language they have used, considered in the light of the surrounding circumstances and the object of the contract. The nature and purpose of the contract is an important guide in ascertaining the intention of the parties.

29. In Ottoman Bank of Nicosia v. Ohanes Chakarian AIR 1938 PC 26, Lord Wright made these weighty observations:

---that if the contract is clear and unambiguous, its true effect cannot be changed merely by the course of conduct adopted by the parties in acting under it.

30. In Ganga Saran v. Firm Ram Charan Ram Gopal : AIR1952SC9 , a four Judge bench of this Court stated:

Since the true construction of an agreement must depend upon the import of the words used and not upon what the parties choose to say afterwards, it is unnecessary to refer to what the parties have said about it.

31. It is also a well-recognized principle of construction of a contract that it must be read as a whole in order to ascertain the true meaning of its several clauses and the words of each clause should be interpreted so as to bring them into harmony with the other provisions if that interpretation does no violence to the meaning of which they are naturally susceptible. [(The North Eastern Railway Company v. L. Hastings) 1900 AC 260].

32. The fundamental position is that it is the banks who were responsible for formulation of the terms in the contractual Scheme that the optees of voluntary retirement under that Scheme will be eligible to pension under Pension Regulations, 1995, and, therefore, they bear the risk of lack of clarity, if any. It is a well-known principle of construction of contract that if the terms applied by one party are unclear, an interpretation against that party is preferred. [Verba Chartarum Fortius Accipiuntur Contra Proferentum].

11. Hence, in the light of the aforesaid, it is thus quite evident that

so far the petitioner is concerned, the respondent Corporation has

gone back from its declared stand announced in the office order of

VRS and the Amendment Notice wherein it clearly declared that the

VRS of the employees, including the petitioner, was linked with the

disinvestment of the Units of the Corporation and was not

independent of it.

12. The judgment in the case of Suresh Kumar Rana

(Supra) on which strong reliance was placed by the counsel for the

respondent although relates to some of the employees of the

Corporation itself but the ratio of the said judgment would not be

applicable to the instant case as in that case the petitioners after

being relieved from their services, had accepted the entire money

package as received by them under the VRS Scheme and had

approached the court after almost two-and-a-half years to challenge

the said scheme and in the background of the aforesaid facts the case

of those petitioners was found to be devoid of any merit. However, in

the present case, it is an admitted position between the parties that

the petitioner not only continued to remain in the service throughout,

even after the acceptance of his offer of VRS, but he never received

the benefits as were offered to him under the said VRS and has

therefore preferred to challenge the said decision of the respondent

Corporation before this court on the aforesaid grounds.

13. When a scheme is floated for voluntary retirement, it constitutes

an offer to treat. It is not an offer stricto sensu. Only when pursuant

to the said invitation to treat, an employee opts for such a scheme, it

constitutes an offer. When such an offer is made, it is required to be

accepted. The matter relating to implementation of the said offer

would indisputably be governed by the terms and conditions of the

scheme as were offered to the petitioner. The VRS scheme was

launched with the disinvestment of various units of the respondent

Corporation and clearly the VRS Scheme was linked with the

disinvestment of the Units of the Corporation and perhaps many of

the employees of the Corporation would not have given their offer for

VRS, had there been no such announcement of disinvestment of the

concerned units of the Corporation. The respondent Corporation

being a public sector undertaking should have placed the correct facts

before its employees and if no disinvestment was taking place then

the Corporation should have further amended its scheme to inform all

its employees that even without outsourcing the unit or without

disinvestment the employees could maintain their offer of VRS or to

withdraw from the same. But no such step was taken by the

respondent Corporation, whereas at the same time, it illegally

relieved the petitioner from his assigned post without implementing

the disinvestment plan of the Unit where the petitioner was working.

In such a scenario, the respondent has flouted the terms of the

contract and therefore the offer made by the petitioner cannot be held

to be binding on him with the change of the said essential terms of

the contract.

14. In the light of the above discussion, I find merit in the present

petition and consequently set aside the relieving order dated

04.09.2009.

15. The petition is accordingly allowed.

April 19, 2010                           KAILASH GAMBHIR,J