S. Paul vs Engineers India Limited And Ors.
2013 Latest Caselaw 701 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         W.P.(C) No.821/1997

%                                                      February 13, 2013


S. PAUL                                       ..... Petitioner
                          Through:       Mr. Bhuvan Mishra, Advocate with
                                         Mr.    Samar       Singh Kachwaha,
                                         Advocate.


                          versus


ENGINEERS INDIA LIMITED AND ORS.              ..... Respondents

Through: Mr. Raj Birbal, Senior Advocate with Ms. Raavi Birbal, Advocate.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. By this writ petition filed under Articles 226 and 227 of

Constitution of India, the petitioner, an ex-employee of the respondent

No.1/Engineers India Limited, seeks terminal benefits pursuant to

resignation w.e.f. 31.1.1996 on the basis of taking the petitioner as having

migrated to Industrial Dearness Allowance (IDA) pattern from Central

Dearness Allowance (CDA) pattern of pay scale w.e.f. 1.7.1991. The sum

and substance of the case of the petitioner is that having applied for

resignation vide letter dated 1.1.1996 w.e.f. 31.1.1996, he had in the

meanwhile on 29.1.1996 applied pursuant to an extant scheme to convert his

DA benefit from CDA pattern to IDA pattern, and his resignation having

been accepted on 30.1.1996 without in any manner having rejected the

request to change to IDA pattern as for by the letter dated 29.1.1996, the

petitioner is entitled to pay scale w.e.f 1.7.1991 on IDA pattern.

2. The basic dispute which arises between the parties with respect

to petitioner claiming an IDA pattern instead of CDA is that if the petitioner

is treated to have resigned w.e.f. 31.1.1996 on IDA pattern then the

petitioner will get much larger emoluments, whereas if the petitioner is to

get terminal benefits on the basis of CDA pattern, then, the terminal benefits

will be lesser than as available in the IDA pattern. Also, this issue can be

understood in this manner that if the petitioner is allowed changing of DA

pattern from CDA to IDA as the same results in grant of higher pay scale,

would then the respondent No.1 be said to have accepted the resignation

consciously and deliberately taking the petitioner to be entitled to IDA

pattern instead of CDA pattern?

3. The undisputed facts of the present case are that the petitioner

was appointed by the respondent No.1 on 27.5.1977 as an Assistant

Engineer. Petitioner as on 1.1.1996 was holding the post of Senior Manager

in the respondent No.1. The respondent No.1 from time to time gave benefit

to its employees for change of CDA pattern to IDA pattern, and the last of

such circular is dated 29.1.1996. The employees of the respondent No.1 in

terms of this circular dated 29.1.1996 were asked to exercise their option on

or before 29.2.1996. The petitioner though had already applied for

resignation of the company vide application dated 1.1.1996 for resignation

w.e.f. 31.1.1996, on 29.1.1996 itself when the said circular 4 of 1996 dated

29.1.1996 for exercise of the option came into force, applied, although he

was going to resign within two days. Petitioner was communicated the

acceptance of his resignation vide letter dated 30.1.1996 of the respondent

No.1. Petitioner therefore was held to have ceased to be an employee of the

respondent No.1-compnay on account of his resignation w.e.f 31.1.1996.

Subsequently on 8.2.1996, the Senior Manager (Personnel) of the respondent

No.1 informed the petitioner that his request for changing of his DA pattern

from CDA to IDA was accepted. Thereafter, the respondent No.1, it seems

did not release the dues and deducted an amount of about Rs. 91,574/- from

the gratuity entitlement of the petitioner on account of house building

advance taken by the petitioner and the petitioner objected to this. The

petitioner was not paid his dues and ultimately the respondent No.1 vide its

letter dated 12.12.1996 informed the petitioner that the petitioner could not

be granted IDA pattern in terms of his request dated 29.1.1996 on the ground

that the benefit of circular 4 of 1996 dated 29.1.1996 would only apply to

the existing employees of the respondent No.1 and not for those employees

who had applied for ending of their services by resigning from the

respondent No.1-company. In sum and substance, by the letter dated

12.12.1996, the respondent No.1 pleaded that there was an administrative

error in issuing the letter dated 8.2.1996 to the petitioner conveying the

change from CDA pattern to IDA pattern and which communication it was

urged, is ex facie shown to be erroneously issued because the petitioner was

addressed as an existing employee of the respondent No.1 i.e as a Senior

Manager (Marketing).

4. The limited issue which therefore calls for decision in the

present case is whether the respondent No.1 had in fact consciously allowed

the petitioner to change his DA pattern from CDA to IDA before his

resignation came into effect w.e.f. 31.1.1996. Whereas the petitioner pleads

that inasmuch as before the letter dated 30.1.1996 was issued to the

petitioner communicating the acceptance of resignation, no communication

was addressed rejecting the request of the petitioner dated 29.1.1996 to

convert from CDA pattern to IDA pattern, thus he is entitled to IDA pattern

because if the refusal was given to the petitioner before 31.1.1996 then he

may not have resigned w.e.f. 31.1.1996. The respondent No.1 on the other

hand contends that the letter dated 8.2.1996 was issued by an administrative

error and therefore the petitioner cannot be given benefit of the conversion

from CDA pattern to IDA pattern.

The basic reason for the arising of the dispute is that if the

petitioner is held to be entitled to change to IDA pattern he will have a

higher pay scale w.e.f 1.7.1991 and thus much larger terminal benefits. If

pay scale is higher then the gratuity is higher because gratuity is linked to a

particular number of months of pay for each year of service rendered with

the employer/respondent No.1. If the petitioner therefore gets the IDA

pattern his scale of pay will be higher and therefore he becomes entitled to a

high gratuity amount, but if the petitioner is treated as having resigned

without the CDA having been accepted and petitioner being treated only on

IDA pattern, his scale of pay will be lesser/lower, and therefore his terminal

benefits including gratuity would be lesser/lower.

5. To determine this aspect, it would be necessary to refer to

relevant rules of the respondent No.1 which deals with the methodology and

control with respect to resignation cases. This methodology is provided in a

Manual of the respondent No.1 titled as "Procedure for Processing of

Separation Cases" and para 5 with its sub paras 5.1.1. to 5.1.13 are relevant

and the same read as under:-

     "5.0       METHODOLOGY AND CONTROLS
     5.1        METHODOLOGY                FOR        PROCESSING           OF
     RESIGNATION CASES

5.1.1. On receipt of registration letter submitted by an employee (to the HR dept), the dealing person checks whether the same is routed through Dept. Division & Directorate Head and date of receipt of resignation in the dept/division has been marked clearly. The date of receipt of the application is the date on which the employee's supervisor/senior endorses the application. 5.1.2 Dealing person fill the information in the window under resignation head in the separation admin portal. 5.1.3 The dealing person generates the IOM for stoppage of salary and sends it to F&A dept. and other concerned departments. The detail of outstanding and payable dues is sought from F&A dept in a format generated online alongwith above mentioned IOM. The resigning employee is advised to deposit the amount in lieu of shortfall in required notice period (if any) and produce the payment receipt of the same to HR dept.

5.1.4 Note for seeking Legal and vigilance clearance is generated through separation admin portal and sent to legal and vigilance department for obtaining clearance. 5.1.5 In case there are recoveries to be made, the employee is advised to clear the same. Alternatively, if employee so requests, the recoveries can be adjusted against his Gratuity entitlement or/and PF

accumulations. The employee is advised to fill the concerned withdrawal form as well as authority letter for deduction in advance. 5.1.6 The online system provides the convenient filling of all the information, settlement forms, clearance form and other feedback related forms through separation portal wherein separating employee is advised to login and fill all the concerned forms Employee takes the prints of these forms and formats for obtaining clearances and settlement of his dues.

5.1.7 On receipt of duly filled PF/Gratuity forms (all in duplicate) and DCS Scheme form (in triplicate) dealing person generates a note for acceptance of resignation mentioning all the relevant facts about (i) vigilance clearance, (ii) disciplinary action clearance, (iii) HBA, (iv) Other loans & advances, (v) shortfall in notice period (if any) (vi) PF, Gratuity, EL etc (vii) action on recoveries (if any). This note is reviewed by the supervisor (of dealing person) and put up to the Competent Authority for approval. 5.1.8 Dealing person gets exit interview conducted. 5.1.9 On receipt of the approval from Competent Authority dealing person communicates the acceptance of resignation to the separating employee through a letter which is generated online through separation admin portal.

5.1.10 The employee submits the departmental clearance certificate to the dealing HR person who then forwards the same to F & A dept alongwith gratuity forms and a copy of resignation acceptance letter. PF/DCS Scheme forms are forwarded to PF/DCS Trust. One copy of the acceptance letter and each of the documents is forwarded to PD section for retaining in Personal Dossier.

5.1.11 Every month the dealing person follows up with Accounts Department in respect of status of full and final settlement of separated employees in last 3 months.

Note: In case of employee posted at Site Offices/ROs/Inspection Offices etc, the resignation letter is forwarded to FPC through respective RCM/Head of Office etc for further action. 5.1.12 On receipt of the final settlement certification from F & A Department the dealing person issues the Service Certificate generated online.

5.1.13 The online package provides access to the supervisor of the dealing person to monitor the processing of the separation cases."

(emphasis is mine).

6. If we refer to the aforesaid relevant rules pertaining to

resignation cases, it becomes clear that the acceptance of resignation has to

be a conscious and deliberate act of the respondent No.1 and thus the

respondent No.1 is entitled even to refuse the resignation sought by an

employee. Sub paras 5.1.9 and 5.1.10 make it very clear that there is very

much required approval of the concerned authority with respect to

acceptance of resignation and this acceptance of resignation has to be

communicated to the concerned employee. Therefore acceptance being a

deliberate and conscious act, if the acceptance of resignation is given by the

respondent No.1 without being fully conscious and alive with respect to all

the facts, it cannot be said that the acceptance of resignation by the

respondent No.1 is final so far as the petitioner is concerned. What I mean

to say is that if acceptance of resignation is a conscious decision,

consciousness will only exist if the authority communicating the acceptance

of resignation (and more particularly the letter dated 8.2.1996 advising

change of pattern from CDA to IDA) is done being fully aware of all the

relevant facts of the case.

7. In my opinion, there are five crucial documents to decide this

aspect, and these are letters dated 29.1.1996 of the petitioner to respondent

No.1, letter dated 30.1.1996 of respondent No.1 to the petitioner, letter dated

8.2.1996 of the respondent No.1 to the petitioner, letter dated 7.6.1996 of the

respondent No.1 to the petitioner and finally the letter dated 12.12.1996 of

the respondent No.1 to the petitioner. These five communications read as

under:-

i) "Letter dated 29.1.1996

29 January 1996

Shri B.M.Prasad Sr. Manage (Personnel) EIL New Delhi

Sub Shifting from CDA to IDA.

Dear Sir,

This has reference to your circular No.770.208(4/96) dated 29.1.1996. As per the circular, I wish to exercise my option for shifting from CDA pattern of salary to IDA pattern w.e.f. 1.7.1991. Necessary adjustments I my salaries, other emoluments and perquisites may please, therefore, be made.

Thanking you,

Yours truly

S.Paul Sr. Manager (Mktg.)

Emp. No.3625.

   ii) Letter dated 30.1.1996

   No.740.3625                                   January 30, 1996

   Shri S.Paul (3625)
   Senior Manager (Marketing)
   Engineers India Limited
   New Delhi

   Dear Sir,

Please refer to your letter of resignation dated January 1, 1996, requesting for release on January 31, 1996.

As requested, your resignation from the post of Sr. Manager has been accepted by the competent authority w.e.f. the afternoon of January 31, 1996. You are required to settle your account and produce a clearance certificate from all concerned as per proforma already supplied to you.

We are advising Accounts Deptt. to settle your account for and upto January 31, 1996, subject to the aforesaid stipulations.

Service certificate shall be issued to you on your producing a final clearance from the Accounts Department.

                                     Very truly yours,

                                     (K.L.BHATT)
                                     Dy. Manager (Personnel)

   BCC:            - Shri A.K. Bangerjee, GM (marketing)

- Accounts, N. Delhi -Forwarded herewith are Gratuity Application Form & Gratuity Authorisation for necessary adjustment of Shri S Paul's account in EIL.

- Secretary, PF Trust - Necessary PF Authorisation and PF Settlement Form have been submitted by Shri S Paul for adjustment of his loan liabilities. These will be forwarded to your after two months as per your requirement.

- DGM (Admn)

- DGM (HR)

- S/Shri T C Arora/S K Chakraborty/M L Tanwar

- PD

- Diary

iii) Letter dated 8.2.1996

No.740.3625 Date: 8.2.96 Mr. S. Paul (3625) Sr. Manager - Marketing EIB - 11th Hr.

Subject: Exercise of option for shifting to IDA pattern of salary structure w.e.f. 1.7.1991 in terms of Circular No.26/92, 1/94 & 4/96

Dear Sir,

Kindly refer to your application on the above mentioned subject. Your pay as on 1.7.91 has been fixed at Rs.6150/- (Basic Pay) and Rs._____ (Personal Pay) in the pay scale of Rs.4600-6790. The Basic Pay beyond 1.7.91 shall be notified to you at a later stage since the scale of pay in IDA pattern is revised w.e.f. 1.1.92. Accounts Deptt. has been duly advised to regulate payment of your pay and allowance accordingly.

In case you are already in receipt of conveyance allowance on Car/Scooter etc the arrears of the same shall be payable to you on your furnishing the necessary certificate in the enclosed proforma indicating that you have been spending not less than the entitlement on maintenance of your vehicle.

In case you are already in receipt of the Children Education Allowance, the arrears of the same shall be payable to you on your furnishing the certificate attached.

                                                   Very truly yours,

                                                  (B.M. Prasad)
                                                  Sr. Manager (Pers.)

   Encl:            As above


   iv) Letter dated 7.6.1996

   No. EIL/AC/PR/96-97/3625/                             June 7, 1996

   Shri S. Paul,
   B-12-C, Gangotri Enclave,
   Alakhnanda.
   New Delhi-110019

   Subject: Payment of outstandings.

   Dear Sir,

Reference your resignation which has been accepted by the competent authority w.e.f. 31.1.96 (AN).

In this connection, you are informed that an amount of Rs. 91,574/- is still outstanding from you towards house building advance after adjustment of your leave encashment and other payments. You are requested to clear the outstanding so that your clearance certificate may be released at the earliest.

Thanking you,

Very truly yours,

(A. Dhingra) Manager (F &A)

v) Letter dated 12.12.1996

REGISTERED December 12, 1996 Shri S Paul, B-12C, Gangotri Enclave, Alaknanda-B, New Delhi.

--------

This has reference to the letter dated 22.11.1996 received from your Advocate. Our reply to the same is given below:

You gave your option for conversion to IDA pattern of pay scales on 29.1.1996 while you had already resigned on 1.1.1996 giving one month's notice and requested to be relieved from the service of the company on 31.1.1996. Your request was forwarded by the Director (P&A) to Personnel Department with his remarks. It may be noted that the management had given number of opportunities to the officers on Central Dearness Allowance (CDA) pattern of salary structure for conversion to Industrial Dearness Allowance (IDA) pattern of salary structure with the objective of having only one pattern of pay-scales to mitigate administrative problems in dealing with and separate systems of pay-scales and service conditions. Towards this end, final opportunity for such option was given vide Circular dated 29.1.1996. The option for conversion to IDA pattern from time to time as also dated 29.1.1996 was meant for the existing officers in order to have a uniform pay structure for officers and to mitigate day-to-day administrative problems in dealing with 2 separate systems of pay- scales and service conditions. Accordingly your option for conversion to IDA pattern was considered and it was decided by the Competent Authority i.e. Chairman and Managing Director that the option of conversion was for the continuing employees only and those who were serving on notice periods upon resignation were not to be allowed the option for change over. Accordingly, your request for change over has not been allowed.

As far letter No.740.3625 dated 8.2.1996 from Senior Manager (Personnel) to you conveying acceptance of conversion is concerned, it is regretted that, the same was written due to an administrative error.

The language of that letter in fact shows that the Senior Manager (Pers.) addressed it to you assuming you to be still in the service of the company which was not the case on 8.2.1996. Hence it proceeded on the basis of a mistake of fact.

As your option for shifting to IDA pattern w.e.f. 1.7.1991 was not accepted the Accounts Department settled your dues as admissible.

Very truly yours,

(Vijay K. Talwar) General Manager (Personnel)"

8. One thing becomes clear that petitioner's resignation was

communicated to him in terms of the letter dated 30.1.1996 whereby he was

treated as having resigned from 31.1.1996. Admittedly, there is no official

communication to the petitioner by that date that resignation is accepted by

taking his DA pattern as IDA and not CDA pattern inasmuch as the official

communication to the petitioner in this regard is much later i.e. on 8.2.1996.

Though counsel for the petitioner has sought to rely upon a hand written

endorsement appearing on the letter of the petitioner dated 29.1.1996, in my

opinion, such sort of hand written note would only be internal to the

respondent No.1 and such hand note unless officially communicated to the

petitioner by an official communication cannot give any legal right to the

petitioner. I may note that way back in the year 1963, the Supreme Court in

the case of Bachhittar Singh v. The State of Punjab, AIR 1963 SC 395 has

held that internal notings of a department cannot give any benefit to a person

unless such notings are officially communicated to the concerned person.

The fact that the letter dated 8.2.1996 has been sent under a

mistake, and without being consciously aware of the fact that petitioner

already stood resigned on 31.1.1996, (although the request dated 29.1.1996

to change from CDA to IDA pattern was pending) becomes clear when we

refer to the letter dated 8.2.1996 which refers to the petitioner as an existing

employee viz. Sr. Manager (Marketing) of the respondent No.1 and not as a

retired employee of the respondent No.1. Therefore, it is ex facie clear that

the communication dated 8.2.1996 has been issued by the signatory thereto

without being aware that the petitioner was no longer an employee of the

respondent No.1 because he had already resigned w.e.f. 31.1.1996.

Petitioner therefore in my opinion cannot take the benefit of this

communication dated 8.2.1996 because of the fact stated above that the

acceptance of resignation has to be a conscious and deliberate act, and at the

time of acceptance of the resignation of the petitioner w.e.f 31.1.1996 by the

letter of the respondent No.1 dated 30.1.1996 there is no existing official

communication to the petitioner of his resignation after acceptance of his

request for conversion of DA pattern from CDA to IDA.

9. In my opinion, the respondent No.1 is also justified in arguing

that respondent No.1 would not have accepted the resignation of the

petitioner by a deliberate and conscious act, if a higher amount of monetary

outgo was to take place, because the object of giving the IDA pattern instead

of CDA pattern is to give higher scale of pay to employees who would

continue to be employees of the respondent No.1. Surely, it could not have

been the intention, and as rightly argued by the respondent No.1, that,

although the employee will no longer be in service of the respondent No.1,

yet he consciously is still granted a higher scale of pay, that too

retrospectively for as many as five years or so before the date of acceptance

of his resignation. This argument is correct because surely the respondent

No.1 is not doing charity and is not handing out any donation to any person.

10. In view of the above, I am of the opinion that the petitioner is

not entitled to the reliefs claimed in the present petition. The petitioner is

very comfortably employed in Abu Dhabi and therefore his endeavour to

take benefit of a technical mistake of the respondent No.1 in having issued

the letter dated 8.2.1996, in my opinion cannot be allowed to help the

petitioner, more so in the exercise of extraordinary and discretionary

jurisdiction of the Court under Article 226 of the Constitution of India.

11. The writ petition is accordingly dismissed, leaving the parties to

bear their own costs.

VALMIKI J. MEHTA, J FEBRUARY 13, 2013 Ne