Reserved On: 26.07.2024 vs Himachal Pradesh State Handicrafts And ...
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Himachal Pradesh High Court

Reserved On: 26.07.2024 vs Himachal Pradesh State Handicrafts And ... on 2 August, 2024

2024:HHC:6236

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

CWPOA No.3711 of 2019 Reserved on: 26.07.2024 Decided on: 02.08.2024 __________________________________________________________

.

    Dr. D.K. Gupta                                 ...Petitioner





                              Versus

Himachal Pradesh State Handicrafts and Handloom Corporation

Ltd. and others. ...Respondents

__________________________________________________________ Coram

The Hon'ble Mr. Justice Satyen Vaidya, Judge 1 Whether approved for reporting? Yes

______________________________________________________ For the petitioner : Mr. Tara Singh Chauhan, r Advocate.

For the respondents: Mr. Nitin Thakur, Advocate, for respondent No.1.

Mr. Pranay Pratap Singh, Additional

Advocate General, for respondents No. 2 and 3/State.

Satyen Vaidya, Judge

By way of instant petition, the petitioner has

prayed for following substantive reliefs:

i) That the respondents may kindly be directed to release the following payments already fallen due to the petitioner, because of pay revision as per the newly framed Himachal Pradesh Civil Services (Revised Pay) Rules, 2009 as contained in Notification

Whether reporters of Local Papers may be allowed to see the judgment?

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No. Fin-(PR)B(7)/2009 dated 26th August, 2009 in a time bound manner:-

a) Arrears on account of revised calculations as per new pay grades in respect of Voluntary Retirement Benefits = Rs.7,85,172.00

.

b) Arrears on account of revision in pay grade of the petitioner as per new pay grades w.e.f. 1/1/2006

to 6/9/2008. = Rs.5,14,392.00 Total: Rs.12,99,564.00

ii) That the respondents be directed to release all the dues as mentioned in para (i) above along with

interest @ 18% from the date of the notification of the Government in the matter.

2. The petitioner while working as General Manager

in respondent No.1-Corporation, sought Voluntary

Retirement on 30.06.2008 in terms of Voluntary Retirement

Scheme (for short, "VRS") floated by the Government of

India on 05.10.1988 and adopted by the Government of

Himachal Pradesh w.e.f. 11.01.1993. The competent

authority accepted the request of the petitioner vide letter

dated 03.07.2008.

3. The petitioner became entitled to the monetary

benefits in terms of the VRS dated 05.10.1988, however, the

respondents opted to grant the petitioner benefits as per a

subsequent VRS dated 02.09.2008. Such decision of the

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respondents was challenged by the petitioner before this

Court by way of CWP No. 1947 of 2008. The petition filed by

the petitioner was allowed vide judgment dated 21.04.2009.

.

The petitioner was held entitled to financial package as per

the VRS dated 05.10.1988 and the respondents were

directed to pay the balance amount to the petitioner with

interest @ 9% per annum.

4. The Government of Himachal Pradesh vide

Notification dated 26.08.2009 allowed the revised pay

grades w.e.f. 01.01.2006 to its employees as per the

recommendation of the 5th Pay Commission. In terms of the

Employees Service Bye-laws of respondent No.1-

Corporation, the employees of the said Corporation also

became entitled to the revision of pay scales in terms of

Notification dated 26.08.2009.

5. The petitioner submitted his claim for grant of

revised voluntary retirement benefits on the basis of new

pay grades besides the amount having become due to him

on account of revision in pay grades w.e.f. 01.01.2006 to

06.09.2008. Having failed to get his due from the

respondents, the petitioner has filed the instant petition.

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6. The petitioner has claimed a sum of

Rs.7,85,172/- on account of balance after re-calculation of

VRS dues and a sum of Rs.5,14,392/- as arrears of revised

.

pay scales w.e.f. 01.01.2006 to 06.09.2008 i.e. the date of

retirement of the petitioner.

7. Respondent No.1 in its reply has pleaded its

helplessness in making the payment of arrears on account

of revision of pay scales on the ground of its adverse

financial health. As regards the revised voluntary retirement

benefits, it has been submitted that respondent No.1 had

referred the matter to the State Government in July, 2010,

however, the Finance Department had expressed its

inability to grant such benefit to the petitioner.

8. Respondent No.3 filed its separate reply and in

respect of balance on account of revision of voluntary

retirement scheme dues, the stand of respondent No.3 is

that after examination of the issue the petitioner was not

held entitled to such benefits as the VRS dated 05.10.1988

was silent on this aspect. As regards the revised pay scale

arrears admissible to the petitioner, the responsibility was

shifted on the employer i.e. respondent No.1.

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9. During the pendency of the petition, petitioner

has been paid a sum of Rs.5,14,392/- as arrears on

account of revision in pay grades w.e.f. 01.01.2006 to

.

06.09.2008. Therefore, the subsisting claim of the petitioner

pertains to sum of Rs.7,85,172/- on account of revised

calculations on the basis of new pay grades in respect of

voluntary retirement benefits.

10. I have heard learned counsel for the parties and

have also gone through the records of the case carefully.

11. The reason discernible for refusal of revised

voluntary retirement benefits to petitioner is the absence of

any provision to that effect in the VRS dated 05.10.1988.

The basis for the defence of respondent No.3 to above effect

appears to be a decision taken by the Principal Secretary

(Finance), Government of Himachal Pradesh on 04.01.2011

in the case of petitioner to the following effect, which finds

mention in the office note dated 04.01.2011 placed at page-

255 of the paper book:

"May also see noting at N-20 to N-28. Sh. Gupta had earlier gone to the Court and obtained substantial relief. As per N-27, in addition to Rs.19.97 lakh under

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VRS, he was also paid Rs.5.26 lakh + interest @ 9% p.a. The 1988 policy of GOI, adopted by the State Government in 1993, is silent on the issue of whether

.

the retiral benefits are to be re-calculated on the basis

of revised pay scale. However, to settle the issue, the State Govt. has issued clarificatory instructions in

June 2009 that in future a certificate be taken from the concerned employee that offered amount is being accepted on voluntary basis as full and final

settlement under VRS.

In view of the substantial benefits already availed by Sh. Gupta, his request for releasing further

amounts may not be acceded to."

12. Clause (d) of VRS dated 05.10.1988 reads as

under:

"(d). In addition, an employee whose request for Voluntary Retirement is accepted would also be

entitled to an ex-gratia payment equivalent to 1½ months' emoluments (pay + DA) for each completed

year of service on the monthly emolument at the time of retirement multiplied by the balance months of

service left before normal date of retirement, whichever is less. For example, an employee, who has put in 24 years of service and has got only one year of service for normal retirement will get ex-gratia payment of only 12 months' emoluments and not 36 months' emoluments."

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13. The above clause makes the employee seeking

voluntary retirement entitled to an ex-gratia payment

calculated by multiplying the emoluments i.e. pay + DA for

.

each completed year of service or the monthly emoluments

payable at the time of retirement multiplied by the balance

months of service left before normal date of retirement,

whichever is less. Thus, the basis for calculation is the

emoluments i.e. pay + DA. In this context, the pay and DA

cannot be other than the one payable to the employee under

the relevant service rules.

14. It is not in dispute that the employees of

respondent No.1-Corporation were made entitled to the

revision of pay scale in terms of Notification dated

26.08.2009. By holding the petitioner also entitled to the

revision of pay scales w.e.f. 01.01.206 till the date of his

retirement, respondents have already paid him a sum of

Rs.5,14,392/-. In this view of the matter, it is not

understandable as to how the ex-gratia payment under

Clause (d) of VRS dated 05.10.1988 can be calculated on

the basis of pre-revised pay scales only.

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15. The reason for denying the benefit of the revised

pay scales to the petitioner for calculating his voluntary

retirement benefits, as noticed above, is not tenable. There

.

is no provision in the VRS dated 05.10.1988 whereby the

person having voluntary retired under the said Scheme was

disentitled from getting the voluntary retirement benefits on

pay scales revised for the period during which he/she had

served.

16. rThe respondents have not been able to place on

record an undertaking of the petitioner whereby he may

have fortified his right to claim revised voluntary retirement

benefits, therefore, no estoppel can be applied against the

petitioner.

17. Learned Additional Advocate General placed

reliance on a judgment passed by Hon'ble Supreme Court in

Maharashtra State Financial Corporation Ex-

Employees Association and others vs. State of

Maharashtra and others (2023) 11 SCC 186 to contend

that petitioner once having accepted the voluntary

retirement benefits was not entitled for revision thereof.

Para 40 of the judgment reads as under:

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"40. However, in the opinion of this Court, employees who secured VRS benefits and left the service of MSFC voluntarily during this period, stand on a different footing. They cannot claim parity with those who worked continuously, discharged their functions, and thereafter superannuated. VRS employees chose to opt

.

and leave the service of the Corporation; they found

the VRS offer beneficial to them. Apart from the normal terminal benefits they were entitled to, the additional amount each of them was given - was an ex gratia

amount, equal to a month's salary for each completed year of service. Other retired employees were never given such amounts. This has been emphasized in A.K. Bindal vs. Union of India, (2003) 5 SCC 163 (SCC pp. 186-87, paras 33-34)

"33. 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 rand to bring in financial efficiency. The office memorandum dated 5-5-2000 issued by the

Government of India provided that for sick and unviable units, the VRS package of the 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 1-1-1987 and 1-1-1992 levels, computed on their existing pay scales in accordance with the extant Scheme, shall be increased by 100% and 50% respectively.

34. This shows that a considerable amount is to be paid to an employee ex gratia besides the terminal

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benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and foregoing all his claims or rights in

.

the same. It is a package deal of give and take. That

is why in the business world it is known as "golden handshake". 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 of pay scale from a retrospective date, even after he has opted for r Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing

the Scheme would be totally frustrated."

18. After going through the aforesaid judgment, it is

found that the Hon'ble Supreme Court in that case had

considered the terms of a policy of the Government

prohibiting benefits of revised pay scales to certain category

of employees and it was in that context that though the

terms of the Scheme under consideration were held to be

discriminatory, observations were made with respect to

employees having secured VRS. In the instant case, it is not

the case of the respondents that the petitioner has been

denied the benefit on the basis of any policy formulated by

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the Government. Thus, the aforesaid judgment cannot help

the cause of the respondents.

19. In light of above discussion, the petition is

.

allowed. Respondents are directed to pay a sum of

Rs.7,85,172/- to the petitioner alongwith interest @ 6% per

annum w.e.f.23.06.2010 when the petitioner had raised the

claim with the respondents for the first time. The

respondents are also burdened with costs of Rs.25,000/-.

20. The petition stands disposed of in the aforesaid

terms, so also the pending miscellaneous application(s), if

any.

    2nd August, 2024                                  (Satyen Vaidya)
          (GR)                                             Judge