Jammu & Kashmir High Court - Srinagar Bench
State Of J&K And Ors vs . Hamidullah Andrabi And Ors on 11 November, 2021
h475
HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT
SRINAGAR
Reserved on: 01.10.2021
Pronounced on:11.11.2021.
LPASW No. 10/2019 [LPA No. 14/2019]
CM No. 514/2019
State of J&K and Ors. V. Khursheed Ahmad Mir and Ors
LPASW No. 11/2019
CM No. 506/2019
State of J&K and ors vs. Hamidullah Andrabi and Ors
LPASW No. 13/2019
J&K Industrial Dev. Corpn. vs. Hamidullah Andrabi and Ors
LPASW No. 03/2019
State of J&K and Ors vs All J&K Forest Corpn.Employees
LPASW No. 147/2018
IA No. 01/2018
State of J&K and Ors vs. Ghulam Mohammad Mir & Ors
LPASW 195/2018,
CM 1828/0019
State of J&K and Ors vs. J&K Forest Corpn.Employees
Appellants:
Through:- Mr. D.C.Raina, Advocate General,
with M/S. Ajaz
Lone Dy.AG and Sajad Ashraf G A.
Mr. B.A.Dar Sr. AAG.
Ms.Asifa Padroo AAG.
Respondent(s)
Through:- Mr. Z.A Shah Sr. Advocate with
M/S. A Hanan & Vipin Gandotra Advocates.
Mr. M.Y.Bhat Sr. Advocate with
Mr. Prince Hamza Advocate
Mr. Mohsin Qadri Sr. Advocate with
Mr. M.Tahseen Advocate.
Mr. B.A.Misri Advocate.
2
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Coram: HON'BLE MR. JUSTICE SANJEEV KUMAR, JUDGE
HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE
JUDGMENT
Sanjeev Kumar-J
LPASW No. 11/2019 &
LPASW No. 13/2019
1. These two appeals filed under Clause 12 of the Letters Patent of
this Court; one filed by the State of J&K and the other by the Jammu and
Kashmir State Industrial Development Corporation ( 'SIDCO' hereafter), are
directed against the judgment dated 09.10.2018 passed by the learned Single
Judge ( the Writ Court) in SWP No. 775/2017 titled Hamidullah Andrabi
and ors v. State of J&K and others, whereby the Writ Court has allowed the
writ petition of the respondents and directed the appellants herein to pay and
grant pensionary benefits to the respondents in accordance with their
entitlement as per Rules governing the government servants, as were
available to them before issuance of SRO 400 of 2019 dated 24.12.2009.
2. The writ petitioners, the respondents herein, are retired
employees of SIDCO, who were not paid any retirement pension at the time
of their superannuation. They claim to have made some representations to
the appellants for release of pensionary benefits but could not persuade the
appellants for grant of retirement pension.
3. The litigation initiated by the respondents by way of SWP No.
775/2017 was triggered by the decision of this Court in the case of
employees of the Jammu and Kashmir Industries Limited ( JKI), who, after
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a long battle in this Court, ultimately succeeded in getting the pensionary
benefits on par with the government employees.
4. The case set up by the respondents in their writ petition was
modelled primarily on the writ petition SWP No. 1250/2002 filed by the
employees of JKI and their writ petition too has been decided by the learned
Writ Court, primarily on the analogy of SWP No. 1250/2002.
5. The facts are not much in dispute. The respondents do not claim
to be the employees of the Government but claim that, being the employees
of SIDCO, they are similarly placed with the employees appointed to JKI
who were held by this Court entitled to pension on par with government
employees.
6. Before we proceed to appreciate the grounds of challenge urged
by Mr. B. A. Dar, learned Sr. AAG appearing for the appellants, it is
necessary to first have a glance on the litigation that was initiated by the
employees of JKI.
7. Prior to the year 1963, various Industrial Units were being run
by the Department of Industries of the Government of Jammu and Kashmir.
However, in the year 1963, the then Governor of the State of Jammu and
Kashmir by order No. 189-C of 1963 dated 10.08.1963 constituted a Board
of Directors for the administration of these Industrial Units. On 03.10.1963,
a Private Limited Company under the name of J&K Industries Limited (JKI)
was incorporated under the Companies Act 1956, primarily with the object
to run, manage and administer such Industrial undertakings, as may be
notified by the Governor in the manner as would ensure their economic
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working. Subsequently, pursuant to instructions issued by the Governor on
08.10.1963, some Industrial undertakings of the State government were
notified to be industrial units of JKI and some of the employees who were
working in these industrial units of the Department of Industries of the
government also came to be shifted to JKI. While the employees of erstwhile
Industrial Units of the Government were performing their duties in the JKI,
the JKI, with a view to regulate the service conditions of its employees,
promulgated the Jammu and Kashmir Industries Service Regulations.
Notwithstanding the framing of Industries Service Regulations, the
employees of the erstwhile Industrial Units of the Government continued to
avail the benefit of revision of pay scales and DA etc. as were being paid to
other government servants of the State. In the year 1979, the State of Jammu
and Kashmir set up Rajan Committee to examine the wage structure of
Public Sector Undertakings. The Rajan Committee submitted its final report
which was accepted by a decision of the Cabinet on 22.04.1980. On the
basis of this Cabinet decision, the Governor issued an order on 26.04.1980.
In compliance thereto, the JKI issued two orders on 08.05.1980; one relating
to Cost of Living Allowance and the second related to fixation of wages.
Another order was issued by JKI on 10.11.1980, laying down that the leave
to the regular employees of the JKI would be allowed as per the Factory Act
and not as per the leave rules, as were applicable to them in the past. All
these three orders passed by the JKI were viewed by the employees of the
JKI as an onslaught on the parity of their service conditions with the
government servants.
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8. Feeling aggrieved, two writ petitions came to be filed in this
Court; one by the employees of the erstwhile Industrial Units of the
Government, who, on the incorporation of the JKI had been shifted to it and
the second by the employees who were subsequently appointed in JKI i.e.
Corporation employees. Both the writ petitions, i.e. SWP No. 236/1982
(Jawahar lal Sazawal and ors v. State of J&K and Others) filed by the
employees of the erstwhile Government Industrial Units and SWP No.
287/1982 ( Tej Krishan Kachroo and ors v. State of J&K and others) filed by
the Corporation employees came to be dismissed by a Division Bench of this
Court on 02.05.1998. One set of employees led by Jawahar Lal Sazawal , i.e.
employees of erstwhile Industrial Units of Department of Industries of
Government of J&K, preferred an SLP before Hon'ble the Supreme Court
whereas the other set of employees led by Tej Krishan Kachroo felt satisfied
with the judgment of the Division Bench and did not approach the Apex
Court. Hon'ble the Supreme Court accepted the appeal filed by Jawahar Lal
Sazawal and set aside the judgment of the Division Bench of this Court and
granted the relief to M/S Jawahar Lal Sazawal and others, as prayed for in
their writ petition. The appeal was allowed by Hon'ble the Supreme Court,
primarily, on the ground that there was no material on record to demonstrate
that the employees of erstwhile Industrial Units of the Government of
Jammu and Kashmir, who were later shifted to JKI, ever ceased to be
government employees and became the employees of the JKI. It was thus
held by the Apex Court that, notwithstanding the incorporation of JKI and
entrustment of services of employees of the Industrial Units of the State
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Government to JKI, the status of such employees remained unchanged and
being government servants, they were entitled to all the benefits on par with
the other government employees of the State. In compliance to the judgment
of Hon'ble Supreme Court passed in the case of Jawahar Lal Sazawal
(supra), the appellants vide Government Order No. 219-Ind of 2002 dated
08.08.2002 granted pensionary and other retiral benefits in favour of 169
employees indicated in the Annexure 'A' to the said order. These were the
employees who had been appointed prior to 03.10.1963 in the Industrial
Units run by the Industries Department and later transferred to JKI Limited
after its establishment. With the implementation of the judgment of Hon'ble
the Supreme Court and issuance of Government order supra, the controversy
ought to have received a quietus, but the other set of employees led by Tej
Krishan Kachroo, who had failed before the Division Bench and which
judgment of the Division Bench had attained finality, still refused to relent.
They made another attempt to persuade this Court to grant them pensionary
benefits on par with M/S Jawahar Lal Sazawal and others. This is why
Government Order No. 219-Ind of 2002 dated 08.08.2002 came to be
assailed by the Corporation employees in SWP No. 1250/2002 along with
other similar writ petitions filed by some of the employees separately. All
these writ petitions were clubbed and a Single Bench of this Court vide
judgment dated 12.03.2009 allowed all these petitions and held the
employees of the Corporation also entitled to the pensionary benefits on par
with the government employees. The judgment of the learned Single Judge
was premised on following two grounds:-
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(i) That, with the Supreme Court allowing the appeal of
Jawahar Lal Sazawal and others and setting aside the
judgment of the Division Bench, the three orders passed by
the JKI pursuant to the order of the Government, stood
quashed and, therefore, the position, as it was existing and
prevalent upto the year 1979, shall revert. The Bench further
observed that if the position is relegated to the year 1979, the
Corporation employees too would become entitled to all
service benefits as were available to the Government
employees. It was, thus, held that Corporation borne
employees, both retired and in service, shall be entitled to
service and other benefits in accordance with the system as
was prevalent in the year 1979, for, all the three orders issued
by the JKI, which had altered the position, had ceased to be
in existence after having been quashed by Hon'ble the
Supreme Court in the appeal preferred by M/S Jawahar Lal
Sazawal and others.
(ii) That the Board of Directors of JKI, in its decision taken
on 06.12.2004, had approved the adoption of J&K Civil
Service Regulations by the JKI in case wherever its Rules
were silent. The learned Single Judge, after referring to
Article 89 of the Articles of Association of JKI and couple of
other provisions concluded that the Regulations of the JKI
were silent with regard to grant of pensionary benefits to its
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employees and, therefore, in the light of the decision of the
Board of Directors dated 06.12.2004, the J&K Civil Service
Regulations were applicable and, therefore, the other set of
employees i.e. Corporation borne employees too were
entitled to the pensionary benefits.
9. This judgment became subject matter of challenge before the
Division Bench and a Division Bench of this Court vide its judgment dated
08.06.2011 dismissed all the appeals and upheld the judgment of the Writ
Court. The State filed an SLP before the Supreme Court but the same was
later on withdrawn with liberty to file a review petition before the High
Court. Consequently, the review petition of the State also met the same fate.
The judgment of the learned Single Bench dated 12.03.2009 became final.
The Government, left with no option, implemented the same and granted the
pensionary benefits to all the employees of the JKI alongwith Government
Handloom and Silk Weaving Factory. This triggered an expectation in the
minds of the employees of other Corporations including SIDCO and this is
how writ petitions came to be filed by the employees of SIDCO, J&K
Handloom Development Corporation and the State Forest Corporation. They
all claimed parity with the employees of JKI, and, to substantiate their claim
placed total reliance on the judgment of JKI dated 12.03.2009, which had
since attained finality and stood implemented by the JKI and the
Government.
10. The writ petition was contested by the appellant SIDCO by
filing its written objections. It was the stand of the appellant that it was a
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Company incorporated under the Companies Act, 1956 and was thus
governed by its Service Regulations and the Articles of Association. The
Corporation, it was pleaded, had its separate Service Regulations which did
not provide for payment of pension to its retiring employees. It was thus the
stand of the SIDCO that its employees were not similarly situated with the
employees of the JKI and, therefore, respondents were not entitled to draw
any analogy with the judgment that was passed in favour of the employees
of JKI. Reliance was placed on various clauses of Memorandum of
Association and Articles of Association to submit that the Corporation had
specifically and by necessary implication made no provision for payment of
pension to its employees and, therefore, there was no justification to claim
pension by aid of J&K Civil Service Regulations,1956 ( 'JKCSR' for short).
The Writ petition was considered by the Writ Court and vide judgment
impugned dated 09.10.2018, same was allowed, primarily, on the ground
that the case of the respondents was identical to the case of the employees of
JKI and, therefore, on the analogy of judgment dated 12.03.2009 passed in
SWP No. 1250/2002, the respondents (writ petitioners) were also entitled to
the pensionary benefits as per the Rules of pension governing the
government servants. It is this judgment of the learned Single Judge which is
assailed before us by the State as well as SIDCO by filing two separate
appeals.
11. Having heard learned counsel for the parties and perused the
material on record, we are of the view that the decision of these appeals
would turn on the determination of following questions:-
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(1) Whether right to retirement pension is a fundamental right
available to an employee of the Government or Public Sector
Undertaking in the sense that it is constitutionally obligatory for
employer to make provision for payment of retirement pension, and
that an employee, as a matter of right is entitled to pension after
putting in specified number of years of service before superannuation?
(2) Whether the rules and Regulations of SIDCO are silent and no
inference can be clearly made out with regard to grant or otherwise of
pension to the retiring employees and, therefore, by reason of
residuary Regulation 68-A of the Jammu and Kashmir Industries
Development Corporation Service Regulations, the retirement pension
is payable to the employees under JKCSR, which makes such
provision for Government employees?
(3) What is the exact ratio decidendi of the judgment dated
12.03.2009 passed in SWP No. 1250/2002 titled "J&K Industries
Employees Association vs State and ors, and whether the case of the
respondents, the retired employees of SIDCO, is identical to the
employees of JK Industries and, therefore, covered by judgment dated
12.03.2009 (supra).
12. Learned counsel for the appellant, placing reliance on Article
78 clauses (XVI) and (XVII) of Articles of Association of SIDCO, would
argue that having regard to specific provisions made in the Articles of
Association, the Directors of SIDCO have been conferred the discretion to
constitute a fund to provide for pension, gratuity or compensation or to
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create any provident or benefit fund by setting aside a portion of the profits
of the Company and this should be done subject to the approval of the
Government. He would, therefore, submit that occasion to set apart portion
of funds of the Company for constituting such funds never arose, in that, the
SIDCO, right from its very inception, has not made any profits and there was
no occasion for declaring any dividend or constituting any fund for pension
etc.. He would further submit that the appellant-Corporation despite having
been in losses ever since has made provision for payment of gratuity and the
Employees Provident Fund ( 'EPF' for short) by making requite
contributions. He would further submit that in the face of given position
emanating from the rules and regulations of the Corporation, it would be
without any logic to claim and assert that the rules of the Corporation are
silent with regard to grant of pension and, therefore, by the aid of regulations
68-A, relied upon by the learned Single Judge in the impugned judgment,
the respondents would be entitled to pension under the JKCSR, on par with
the Government Employees.
13. Mr. B.A.Dar, learned Sr. AAG would also raise the issue of
delay and laches in approaching this Court. He would submit that
respondents retired from the Corporation one or two decades back and
approached this Court only in the year 2017 after having accepted all the
post retiral dues to which they were entitled to under the rules and
regulations of the Corporation.
14. Per contra, Mr. Z.A.Shah, learned senior counsel representing
the respondents would contend that the case of the respondents is similar
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with and identical to the case of the employees of JKI and, therefore, the
benefit of pension, which has been granted in favour of the employees of
JKI, cannot be denied to the respondents. He would take all pains to
compare different clauses of Articles of Association/ Memorandum of
Association and Service Regulations of both the Corporations i.e JKI and
SIDCO and submit that there is absolutely no distinction between the rules
of the two and, therefore, what was said by this Court in the case of JKI
would apply on all fours to the case of the respondents. The Writ Court has,
thus, correctly held the respondents entitled to pension on par with the
Government Employees. He would make strenuous effort to persuade this
Court to follow the judgment in the case of JKI as upheld by the Division
Bench of this Court and dismiss the appeals of the appellants. He also placed
reliance on the judgments of the Supreme Court in L. Hriday Narain vs
Income Tax Officer, Bareilly, 1970 (2) SCC 355 and Narinder Singh and
ors vs. State of Punjab and another, 2014 (6) SCC 466. Reliance is also
placed by Mr. Shah on a Full Bench Judgment of Karnataka High Court in
the case of Basanagouda vs. The Land Tribunal, 2004 (4) KantLJ 193.
15. Having given our anxious consideration to the rival contentions,
we, at the threshold, would like to reiterate and restate otherwise well settled
legal position.
16. Right to pension is not a fundamental right guaranteed by any
Article of Part III of the Constitution of India. It is a mere condition of
service. Whether or not an employee of the Government or a Statutory
Corporation is entitled to pension, is determined by the terms and conditions
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of his employment. These terms and conditions may be contractual or
statutory in nature. No employee of the Government or of any Public or
Private Corporation can claim retirement pension de hors the rules and
regulations governing conditions of his service. True it is that under the J&K
Civil Service Regulations, a Government employee, who was in position till
issuance of SRO 400 dated 04.04.2010, was entitled to retirement pension in
addition to retirement gratuity and other post retiral benefits. Even the
Government employees who have been recruited/appointed after cut off date
mentioned in SRO 400 of 2010 are not entitled to pension which clearly
means that even the Government employees who are appointed after a
particular date are now not entitled to pension. It is true that pension is paid
to a retiring employee in recognition of his long services rendered to the
employer as also to take care of his post retirement needs. Such assistance to
retiring employee could be in different forms. Some employers make
provisions for payment of annuity, some for monthly payment in the shape
of pension and some by payment of a lump sum amount. Such amount could
be in the shape of accumulated employees provident fund or retirement
gratuity or some other form of ex gratia payments. It is thus not mandatory
for an employer to necessarily make a provision for payment of monthly
amount by way of pension to its retiring employees, for, no such right
inheres in an employee. The post retirement payments to an employee, as
already stated, would be governed by the terms and conditions of his service.
In this regard, reference can be made with some advantage to the case of All
India Reserve Bank retired Officers Association vs Union of India, 1992
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Supp. (1) SCC 664 and Pepsu Road Transport Corporation vs. Mangal
Singh and ors, 2011 (11) SCC 702. In the case of All India Reserve Bank
Retired Officers Association (supra), Hon'ble the Supreme Court has
drawn distinction between a pension scheme and CPF Scheme. The issue
had come up before Hon'ble the Supreme Court for consideration., though
not in a similar context, but, what was observed by the Supreme Court in
paragraph No. 8 and 9 is noteworthy and is reproduced herein under:
"8 From what we have stated above it becomes clear that the
demand of Bank employees for introduction of a pension scheme
as a third retiral benefit as recommended by the Study Group in its
report submitted in 1981 was rejected by the Central Government
some time in 1982. Thereafter a fresh demand was made for the
introduction of a pension scheme in substitution of the CPF
scheme on the pattern of the pension scheme admissible to Central
Government employees. This proposal met with the approval of
the Central Government and accordingly the Bank introduced the
Regulations incorporating the same. Under the Regulations new
entrants joining on and after 1st November, 1990 automatically
become governed by the pension scheme; for them the CPF
scheme has no existence. Those employees who were in the
employment of the Bank prior to 1st November, 1990 were given
an option to switch over to the pension scheme subject to the
conditions stated earlier. An option was also given to those
employees who had retired between 1st January, 1986 and coming
into force of the Regulations to come over to the pension scheme,
provided they were willing to refund the employer's contribution
under their CPF scheme with interest thereon and with further
interest at 6 percent per annum from the date of receipt of the
provident fund amount till the date of repayment. It will thus be
seen that the pension scheme introduced under the Regulations is
patterned on the pension scheme governing the Central
Government employees which was brought into effect from 1st
January, 1986 on the recommendations of the Fourth Central Pay
Commission found in Chapter X of the report, vide paragraph
10.19 of that chapter. There is, however, no doubt that by fixing
the cut-off date Bank employees who superannuated on or before
31st December, 1985 are denied the benefit of the pension scheme.
The contention of the petitioners that both the groups, namely,
those who retired on or before 31st December, 1985 and those who
retired between 1st January, 198.6 and 31st October, 1990 belong
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to the same group of CPF retirees and yet the Regulations seek to
divide them by placing an artificial cut-off date under Regulations
3(3) and 31 of the Regulations. It is, therefore, contended that this
artificial division of a homogeneous group not based on any logic
or rational and having no nexus to the object to be achieved clearly
offends the equality clause contained in Article 14. There is no
doubt that whenever any rule or regulation having statutory flavour
is made by an authority which is a State within the meaning
of Article 12 of the Constitution, the choice of the cut-off date
which has necessarily to be introduced to effectuate such benefits
is open to scrutiny by the court and must be supported tin the
touch-stone of Article 14. If the choice of the date results in
classification or division of members of a homogeneous group it
would be open to the Court to insist that it be shown that the
classification is based on an intelligible differentia and on rational
consideration which bears a nexus to the purpose and object
thereof. The differential treatment accorded to those who retired
prior to the specified date and those who retired subsequent thereto
must be justified on the touchstone of Article 14, for otherwise it
would be offensive to the philosophy of equality enshrined in the
Constitution. This is quite clear from the ratio of Nakara's
judgment as the decision of this Court in B. Prabhakar Rao and
Ors. v. State of Andhra Pradesh [1985] Supp. 2 SCR 573. We
have, therefore, to consider the limited question whether the
classification introduced by Clauses 3(3) and 31 of the Regulations
is inconsistent with Article 14 of the Constitution as alleged by the
petitioners.
9. The scheme introduced by the Regulations is a totally new one.
It was not in existence prior to its introduction with effect from 1st
November, 1990. The employees of the Reserve Bank who had
retired prior to that date were admittedly governed by the CPF
scheme. They had received the benefit of employer's contribution
under that scheme and on superannuation the amount to their
account was disbursed to them and they had put it to use also.
There can, therefore, be no doubt that the retiral benefits
admissible to them under the extant Rules of the Bank had been
paid to them. That was the social security plan available to them at
the date of their retirement. The Bank employees were, however,
clamouring for a pension scheme, firstly on a restricted basis as a
third retiral benefit and later in lieu of the CPF scheme. The
Central Government had not approved of a pension scheme, as a
third retiral benefit. After that proposal was spurned it appears that
the employees of the Bank demanded a pension scheme on the
pattern of the scheme available to Central Government employees
in lieu of the CPF Scheme. This was approved by the Central
Government and consequently it was introduced with effect from
1st November, 1990 under the Regulations. There can, therefore,
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be no doubt that if the CPF retirees were not admitted to this new
scheme they could not make any grievance in that behalf. They had
no right to claim coverage under the new pension scheme since
they had already retired and had collected their retiral benefits
from the employer. But the moot question is whether it was open
to the employer to grant the benefit of the pension scheme to one
group of CPF retirees who had retired from Bank service on or
after 1st January, 1986 and deny the same to all those who had
retired on or before 31st December, 1985. Is this division of CPF
retirees discriminatory and violative of Article 14 of the
Constitution? "
Similarly, in the case of Mangal Singh (supra), some observations
about the two Schemes i.e, CPF Scheme and the Pension Scheme were yet
again made by the Supreme Court. Paragraphs 34 and 35 of the Judgement
are relevant in the context of controversy raised in this appeal and are,
therefore, reproduced hereunder:
34) Pension is a retirement benefit partaking of the character of
regular payment to a person in consideration of the past services
rendered by him. We hasten to add that although pension is not a
bounty but is claimable as a matter of right, yet the right is not
absolute or unconditional. The person claiming pension must
establish his entitlement to such pension in law. The entitlement
might be dependent upon various considerations or conditions. In a
given case, the retired employee is entitled to pension or not
depend on the provisions and interpretation of Rules and
Regulations. The Contributory Provident Fund appears to be simple
mechanism where an employee is paid the total amount which he
has contributed along with the equal contribution made by the
employer ordinarily at the time of retirement of an employee. In
short, we quote what was repeatedly said by this Court that
"pension is payable periodically as long as the pensioner is alive
whereas C.P.F. is paid only once on retirement". Therefore,
conceptually, pension and C.P.F. are separate and distinct.
35) Now we will try to explain the essential distinction between
these two retirement benefits that an employee may derive at the
time of his retirement from service. The C.P.F. was introduced with
the object of providing social security to the employees working in
factories and other establishments, after their retirement. The
C.P.F. was instituted as a Compulsorily Contributory Provident
Fund by the enactment of the Employees' Provident Funds
and Miscellaneous Provisions Act, 1952 (hereinafter referred to as
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"the Provident Fund Act"). The employee registered under
the Provident Fund Act shall be entitled to claim all benefits
available under the C.P.F. Scheme framed under the Act. This CPF
Scheme requires opening of the account for the employee by the
employer. The Government/employer is under the continuous
obligation to deposit equal or matching contribution made by the
employee in his account till he retires. Once the employee is
retired, then his rights qua Government/employer's contribution
into his C.P.F. account finally crystallizes. After retirement, this
entire C.P.F. amount is paid to the employee as a retrial benefit. On
the receipt of C.P.F. amount, the relationship between employee
and employer ceases to exist without leaving any further legal right
or obligation qua each other."
In another Constitution Bench judgment of Hon'ble the Supreme
Court in the case of Committee for Protection of Rights of ONGC
Employees vs Oil And Natural Gas Commission, 1990 (2) SCC 472, in
para 10, 11, 12 and 13, Hon'ble the Supreme Court has discussed elaborately
the scheme of contributory provident fund and held thus:
"10. Shri Ramamurthi, has next contended that in view of Section -
12 of Provident Fund Act, the right of the peti- tioners to pension
has been preserved and the introduction of the Contributory
Provident Fund under the provisions of the Provident Fund Act and
the Provident Fund Scheme does not disentitle the petitioners from
claiming pension to which they were entitled before the
introduction of the Contributory Provident Fund in the
Commission. In support of the aforesaid submission, Shri
Ramamurthi has placed reli- ance on the decision of this Court in
Sorn Prakash Rekhi v. Union of India & Another,
11. Section 12 of the Provident Fund Act, provides as under: "No
employer in relation to an establishment to which any Scheme or
the Insurance Scheme applies shall, by reason only of his liability
for the payment of any contribution to the Fund or the Insurance
Fund or any charges under this Act or the Scheme or the Insurance
Scheme reduce, whether directly or indirectly, the wages of any
employee to whom the Scheme or the Insurance Scheme applies or
the total quantum of benefits in the nature of old age pension,
gratuity, Provi- dent Fund or life insurance to which the employee
is enti- tled under the terms of his employment, express or
implied."
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12.The said provision in our view is not applicable in the present
case. The Provident Fund Act has been enacted with the object of
providing social security to the employees in factories and other
establishments covered by the said Act, after their retirement. In the
Statement of Objects and Reasons for the said enactment it was
mentioned as under: "The question of making some provision for
the future of the industrial worker after he retires, or for his
dependents in case of his early death, has been under consideration
for some years. The ideal way would have been provisions through
old age and survivors' pensions as has been done in the industrially
advanced countries. But in the prevailing conditions in India. the
institution of a pension scheme cannot be visualised in the near
future. Another alternative may be for provision of gratuities after a
prescribed period of service. The main defect of a gratuity scheme,
however, is that amount paid to a worker or his dependents would
be small, as the worker would not himself be making any contri-
bution to the fund. Taking into account the various diffi- culties,
financial and administrative, the most appropriate course appears to
be the institution, compulsorily, of Contributory Provident Fund in
which both the worker and the employer would contribute. Apart
from other advantages, there is the obvious one of cultivating
among the workers a spirit of saving something regularly."
13.This indicates that the scheme of Contributory Provident Fund,
by way of retiral benefit, envisaged by the Provident Fund Act, is
in the nature of a substitute for old age pension because it was felt
that in the prevailing condi- tions in India, the institution of a
pension scheme could not be visualised in the near future. It was
not the inten- tion of Parliament that Provident Fund benefit
envisaged by the said Act would be in addition to pensionary
benefits. Section 12 of the Provident Fund Act seeks to protect the
wages of an employee to whom the scheme framed under the said
Act ap- plies as well as the total quantum of certain specified
benefits to which he is entitled under the terms of his employment.
With that end in view, Section 12 prohibits an employer from
reducing, whether directly or indirectly, the wages of an employee
to whom the Scheme applies or the total quantum of benefits in the
nature of old age pension, gratuity, Provident Fund or life insurance
to which the employee is entitled under the terms of his
employment express or implied. The said Section proceeds on the
basis that if an employee is entitled to any benefit in the nature of
old age pension under the terms of his employment the said benefit
would not be denied to him on the application of the Scheme. It is
not the case of the petitioners that on June 30, 1961, when the
Provident Fund Scheme was made applicable to the Commission,
the petitioners had become permanent and were entitled to pension.
It cannot, therefore, be said that on the date of the application of the
Provident Fund Scheme to the Commissioner, the petitioners were
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entitled to pension under the terms of their employment. They
cannot, therefore, invoke the provisions of Section 12 of the
Provident Fund Act." (emphasis supplied)
17. Viewed thus, we are of the considered opinion that the
respondents herein are governed by EPF Scheme which is also a post retiral
benefit usually paid in lieu of pension. That apart, as we will discuss herein
below, we have found no material on record which could persuade us to
agree with the learned senior counsel that Rules and Regulations of SIDCO
are silent on the payment of pension to its employees and therefore, by aid of
J&K CSR, they are entitled to pension.
18. We, therefore, conclude that no employee, as a matter of right,
is entitled to claim retirement pension in addition to other post retiral
benefits unless there is a specific provision in this regard made in the terms
and conditions of his service. When we view and analyse the case of the
respondents in the light of terms and conditions governing their service, we
find no such provision made in this regard either in the memorandum of
Association or Articles of Association or the SIDCO Service Regulations.
This is our answer, plain and simple, to the question No.1.
QUESTION No.2
19. With a view to determining question No.2, we may have to
make reference to the relevant Articles and Clauses of the Articles of
Association (AoA) and the SIDCO Regulations. Two clauses of Article 78
i.e. clause (XVI) and (XVII) are relevant in the context of controversy and
are therefore reproduced herein below:
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"XVI. To give, award or allow any bonus, pension,
gratuity or compensation to any employee, of the
Company or his widow, children or dependents, that may
appear to the Directors just or proper, whether such
employee, his widow, children or dependents, have or
have not a legal claim upon the company.
XVII. Before declaring any dividend and subject to the
approval of the Government, to set aside such portion of
the profits of the Company as they may think fit; to form
a fund to provide for such pensions, gratitude or
compensation or to create any provident or benefit fund
in such manner as the Directors may deem fit".
20. From reading of these clauses of Article 78 of Articles of
Association, we find that what Article 78 enumerates are the powers vested
in the Directors of SIDCO to take several decisions, which, inter alia,
include a decision to give, award, or allow any bonus, pension, gratuity or
compensation to any employee of the Corporation or his widow, children or
dependents, that may appear to the Directors just and proper. (Refer clause
XVI). It also provides that the Directors of the Company, if they deem so fit,
may also set aside a portion of the profits of the Company to form a fund to
provide for such pension, gratuity or compensation to its employees, his
widow or children of dependents. It may also create any provident or other
benefit fund for the welfare of its employees. (Refer clause XVII).
21. By a conjoint reading of clause (XVI) and (XVII) of Article 78
reproduced hereinabove, it is abundantly clear to us that there was no
obligation put on the Board of Directors of SIDO to necessarily make a
provision for payment of pension. It is, however, left to the discretion of the
Directors of the Board to constitute a fund for making such provision, that
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too, in favour of an employee or his widow, children or dependents that may
appear to the Directors just and proper. The creation of such fund for
pension or other funds for the employees of the Company is subject to two
conditions; one that the company makes profit and; two, that before
constituting or forming such fund, approval of the Government is obtained.
It would, thus, appear to us that there is enough provision in the Articles of
Association of appellant-Corporation to provide for pension and, therefore, it
would be far cry to say that the Rules and Regulations of the Corporation are
silent with regard to grant or otherwise of pension. A holistic reading of the
twin clauses above, would make it abundantly clear that the Directors of the
Company are empowered to form a fund to provide for pension, gratuity or
other compensation subject to the condition that the Company/Corporation
makes profit and the Government grants requisite approval.
22. The plea of Mr. Shah, leaned senior counsel that the aforesaid
twin clauses of Article 78 of the Articles of Associations place a mandatory
duty on the Directors of SIDCO to make provision for pension and their
inaction in this regard would be tantamount to their silence on the issue,
does not appeal to logic and, therefore, cannot be accepted. The language of
the two clauses reproduced above is clear and unequivocal and if that be the
position, we see no point or justification to seek internal or external aid or
resort to various principles of statutory interpretations to give meaning to
such provisions which are otherwise unequivocal, clear and unambiguous.
By interpretative process, we cannot add or subtract anything to such clear
and unambiguous provision.
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23. Article 15 of the Articles of Association which deals with the
power reserved in the Government to issue such directions or instructions as
it may think fit for conduct of business and affairs of SIDCO or its Board,
may not be relevant to the determination of issue raised in these appeals. The
SIDCO being a Public Sector Undertaking, in the wellbeing whereof, the
Government may be vitally interested and, therefore, has, with a view to
exercise requisite control, reserved the power to regulate the business affairs
of SIDCO and its Board. However, no less important is reference to the
SIDCO Service Regulations which lay down matters with regard to
recruitment and conditions of service of the employees of SIDCO. The
regulations, it may be pointed out, do not contain any specific provision for
payment of pension, but instead provides for creation of contributory
provident fund. Regulation 14 A, which deals with contributory provident
fund, deserves to be reproduced hereunder:
"14-A
Every employee shall on being appointed
substantively be liable to subscribe to the contributory
provident fund in accordance with the Rules of that
fund so long as the Rules in question of the
Corporation are framed he will be governed by the
Said Contributory Fund Rules. 8 ¼% instead of 6 ¼
%."
24. Regulation 68-A, which appears to have been subsequently
inserted between Regulation 68 and 69, on which, Mr. Shah learned senior
counsel has placed strong reliance, reads thus:
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"Wherever the Corporation Rules are silent or inference
cannot clearly be made out, the J&K CSR shall apply".
25. It is on the basis of this regulation, Mr. Shah would contend
that since the Service Regulations as also the Articles of Association of
SIDCO are silent on the issue of pension, as such, the provisions of J&K
CSR would apply and the respondents would be entitled to pension on par
with the Government employees.
26. We have already analysed the Articles of Association and also
the J&K SIDCO Regulations hereinabove and we find that the Rules and
Regulations of SIDCO are not silent on the issue of pension. Articles of
Association confer upon the Directors of SIDCO powers to constitute to
such fund as they may deem fit for providing pension to its employees,
widow of such employees or children and dependents, provided the twin
conditions are satisfied; one that the Corporation makes profit and the
second, that the Government grants requisite approval.
27. Admittedly, the Corporation has been running in losses for
decades and is dependent on the aid of the Government even for
disbursement of salaries of its employees. The stage where the Directors
may take a decision of constituting a fund for payment of retirement pension
to its employees has, thus, not reached. There is, thus, a provision for
making payment of retirement pension but that provision is conditional and
contingent upon two events. It would, therefore, be not correct to say that
the Rules and Regulations of the Corporation are silent on the issue and that
no necessary inference can be drawn from the Corporation Rules. It may
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not be appropriate to contend that unless there is a specific denial by the
Corporation to grant pension to its employees, the payment of retirement
pension in favour of the employees of the Corporation has to be necessarily
inferred, for, pension is not a matter of right but is regulated and governed
by the terms and conditions of the employment. The provision of CPF made
in the Regulations i.e., Regulation 14 would make the things further clear
that the SIDCO never intended to grant retirement pension to its employees
and therefore, made it compulsory for them to subscribe to the employees
provident fund scheme made under the Jammu and Kashmir Employees'
Provident Funds and Miscellaneous Provisions Act, 1961. ("the Act of
1961" for short). The definition of the term 'employee' given in Section 2
(d) of the Act of 1961 makes it crystal clear that the Act of 1961 applies only
to such employee whose services are non-pensionable. Rule 2 (d) of the Act
of 1961, which has assumed great importance in the context of controversy
raised herein, is also reproduced hereunder:
"Employee" means any persons whose services are
non-pensionable and who is employed for wages in
any kind of work, manual or otherwise in or in
connection with the work of an establishment and
who gets his wages directly or indirectly from the
employer and includes any person employed by or
through a contractor in or in connection with the work
of establishment;"
28. From a reading of Rule 14-A in the light of definition of
'employee' given in the Act of 1961, the only inescapable conclusion that
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can be drawn is that the appellants by engrafting Rule 14-A and making
provision for CPF by necessary implication ruled out grant of pension in
favour of the employees of the SIDCO. The reliance placed by learned
senior counsel on Section 12 of the Act of 1961 is totally misplaced, in that,
Section 12 only provides that no employer covered by the Act of 1961, shall
by reason of his liability for making contribution to the EPF under the Act or
the Scheme, reduce, whether directly or indirectly, the wages of an
employee or the total quantum of benefits that may be available to such
employee in the shape of old age pension, gratuity or other provident fund to
which the employee may be entitled to under the terms of his employment.
Reference to old age pension in Section 12 is to a payment, which may be
available to such an employee in terms of his employment and such
payment, shall not be reduced only for the reason that in relation of such
employee the employer is obliged to make contribution of provident fund
under the Act of 1961. Section 12 of the Act of 1961 is, therefore of no help
to the respondents [see para 13 of ONGC (supra)].
QUESTION No.3
29. The JKI case has been decided by this Court on its own facts
and by reference to the material that was placed before this Court in the
aforesaid proceedings. The judgment does not lay down a proposition as is
understood by the learned Single Judge who has decided the writ petition of
the respondents in terms of the impugned judgment. It is not the ratio of the
judgment of JKI that wherever the rules of the Corporation are silent, the
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JKCSR would automatically apply to the employees of the Corporation and,
therefore, pension would become payable.
30. Having regard to the controversy that had arisen before this
Court in the case of JKI, it cannot be said that this Court in the case of JKI
has laid down any proposition of law having universal application
irrespective of the facts and circumstances of the case. It is true that various
provisions of Articles of Association and other Rules and Regulations of JKI
and SIDCO are similar and identical but the fact remains that there has been
no evaluation or analysis of different Articles of Associations and the
Service Regulations in the light of settled legal position and the provisions
of Act of 1961. The issues, which were raised by the parties before us, were
perhaps not the issues before the Court deciding JKI's case. We are
surprised to note that the writ petition filed by the JKI borne employees was
entertained and the relief granted by the learned Single Judge of this Court
notwithstanding that writ petition for similar relief claimed earlier had been
dismissed by a Division Bench of this Court and which judgment of the
Division Bench had attained finality. How the earlier judgment of the
Division Bench in the case of Tej Kishan Kachroo (supra) came to be
ignored by the learned Single Judge is not forthcoming from the judgment of
JKI. The Division Bench, which had the occasion to consider the matter
twice, first time in appeal and thereafter in review, also appears to have
ignored to notice the dismissal of the earlier writ petition. We may not go
into that aspect for the simple reason that, on facts, we find the plea of the
respondents to claim pension in addition to EPF not maintainable for the
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reasons stated above. We reiterate that we would not agree with the learned
senior counsel that the Rules of the Corporation are silent on the point of
pension or that no inference can be clearly drawn on the matter of pension
and therefore, the provisions of JKCSR would be attracted.
31. From a reading of Articles of Association and the SIDCO
Regulations, we are clearly of the view that the issue of pension to the
employees of the Corporation is clearly dealt with and necessary power is
conferred on the Directors to take appropriate decision in this regard keeping
in view the financial health of the Corporation and after obtaining proper
approval from the Government. The Corporation has advisedly not made any
provision for grant of pension to the retiring employees of the Corporation
having regard to the fact that the Corporation had been continuously and
consistently making losses and is dependent on the Government for its
survival. The pension, not being a fundamental right, cannot be claimed by
an employee de hors the terms and conditions governing his employment
and conditions of service. The judgments relied upon by Mr. Shah learned
senior counsel to which he has made reference hereinabove are besides the
point and are, therefore, not applicable in the given facts and circumstances
of the instant case as also for the reasoning we have adopted to allow these
appeals.
32. Delay is equally an important factor which cannot be ignored.
The respondents knew full well that Rules and Regulations of the SIDCO
did not envisage payment of pension and that they being on non-pensionable
establishment, were obliged to subscribe to EPF. They not only made
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contributions to EPF but at superannuation they also accepted the
accumulated sum in their accounts which include matching contribution
made by SIDCO, without any protest or demure. Filing petitions in the year
2017, that too after the implementation of judgment in JKI case, is hit by
delay and laches. Hon'ble the Supreme Court in Narayan Singh Solanki v.
Union of India, (2000) 9 SCC 321, in para 3 held thus:-
"3. Learned Counsel for the Appellant reiterated the
argument urged before the Tribunal. His case is that the
case of the Appellant is covered by Rule 102 of the Rules.
We are not inclined to go into the merits of the matter as
we are of the view that the Appellant having resigned from
the service and accepted his Provident Fund in the year
1963 and thereafter remained silent for nearly 28 years, and
therefore, demand for change in option in the year 1992 did
not deserve to have entertained. In fact the Appellant was
guilty of latches and, therefore, not entitled to change his
option for pension. On this short question we dismiss this
appeal. .............."
33. Accordingly, we allow these appeals and set aside the judgment
of the learned Single Judge. Resultantly, the writ petition (SWP 775/2017)
shall stand dismissed.
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34. This appeal by the State of Jammu and Kashmir through
Commissioner/Secretary to Government, J&K Industries and the Managing
Director, Handloom Development Corporation is directed against judgment
dated 10.10.2018 passed by the learned Single Judge in SWP No. 1598/2017
titled Khursheed Ahmed Mir and ors vs. State of J&K and ors, whereby the
writ petition of the respondents, the employees of Handloom Development
Corporation Ltd., too has been allowed and the employees of the
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Corporation have been held entitled to pensionary benefits on the ground
that they are similarly situated with the employees of JK Industries who
were writ petitioners in SWP No. 1250/2002 and were granted the similar
relief by this Court.
35. The issues raised in this appeal are identical to those raised in
LPASW Nos. 11 and 13 of 2019 decided hereinabove and which we have
elaborately discussed and dealt with. Whatever is said while disposing of
LPASW Nos. 11 of 2019 and 13 of 2019 shall apply on all fours to this
appeal as well.
36. The respondents herein, who were writ petitioners in SWP
No. 1598/2017 decided by the Writ Court vide judgment impugned, were
employees of State Handloom Development Corporation (Corporation borne
employees). In the year 1975, under 20 Point Economic Programme of the
then Prime Minister of India, a project by the name of Intensive Handloom
Development Project ['IHDP'] for handlooms was sanctioned for Pampore
for a period of five years. Subsequently, the project was ordered to be
headed by its Chairman, the Director, Industries and Commerce on
01.07.1977. The implementation of the said project was transferred to
Jammu & Kashmir Small Scale Industrial Development Corporation
['SICOP'] and there was a separate handloom wing functioning in SICOP at
that point of time. It may be noted that the employees of SICOP are not
entitled to and are, thus, not provided with any retirement pension. In the
year 1981, the Government established the J&K Handloom Development
Corporation Limited ["the Corporation"] with the object to run, manage and
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administer all Handloom projects in the State. This was done vide
Government Order No.85-HL of 1981 dated 24.02.1981 and the Intensive
Handloom Development Projects of Pampore, Samba, Bandipora/Sopore,
Doda/Udhampur, which were working under the auspices of SICOP were
transferred to the Corporation along with all assets and liabilities. The
respondents herein, who were working in these projects, also came to be
transferred to the Corporation. The Corporation was registered as a
company under the Companies Act, 1956 by the Registrar of Companies
vide his order dated 29.06.1981 and being a company, is governed by its
Memorandum of Association (MoA) and Articles of Association (AoA), as
per the provisions of Companies Act, 1956. It is, therefore, not in dispute
that the Intensive Handloom Development Projects, which were for a fixed
period and working under SICOP became part of the Corporation after their
formal transfer in the year 1981. The employees working in these projects
were neither the government employees before the incorporation of the
Handloom Development Corporation nor did they acquire such status
anytime thereafter. It has further come on record that the respondents, who
were engaged in Intensive Handloom Development Project, Pampore had
been representing to the Government for extension of pay and other service
benefits as were admissible to other State Government employees.
Accordingly, the representations were examined by the Department of
Industries and Commerce in the light of the opinion given by the
Department of Law, Justice and Parliamentary Affairs. The decision so
taken was conveyed by the Administrative Department of the Industries and
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Commerce to the Managing Director, Handloom Development Corporation
vide communication No.IND/HTC/02/2017 dated 15.05.2017. The request
of the respondents for payment of pensionary benefits was, thus, not
conceded to. It is this communication which was assailed by the respondents
in SWP No.1598/2017. The respondents also claimed the relief of payment
of pension on par with government employees.
37. The writ petition was contested by the appellants, who in their
objections denied the entitlement of the respondents to the pensionary
benefits on the ground that the respondents never ever were government
employees and being corporation borne employees, they were entitled to
such post retiral benefits as were admissible to them under the Rules and
Regulations of the Corporation. The writ Court without going much into the
claims and the counter claims of the parties, disposed of the writ petition
finding it, on facts and law, identical to SWP No.1250/2002 wherein the
employees of JK Industries had been held entitled to pension on par with the
government employees by this Court.
38. Having heard learned counsel for the parties and perused the
material on record, we are of the view that most of the issues raised in this
appeal have already been determined and decided in LPASW No.11 and 13
of 2019 herein above and, therefore, it would be sheer wastage of time to
repeat the same.
39. Admittedly, the respondents were appointed in the Intensive
Handloom Development Project, Pampore. This project was sanctioned by
the Government of India under 20-Point Economic Programme announced
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by the then Prime Minister of India and the life of the project was initially
for a period of five years. Similar projects also came to be established in
Bandopore, Sopore, Doda and Udhampur. Initially, these projects were
being run by a Board headed by Director, Industries and Commerce but later
on in the year 1977 they were shifted to SICOP. It was with the
incorporation of J&K Handloom Development Corporation in the year 1981,
these projects were severed from SICOP and made part of the Corporation.
The employees working in these projects, thus, became employees of the
Corporation. The respondents, who were employees of Intensive Handloom
Development Project, Pampore also became the employees of the
Corporation, which position was never disputed by them. The Corporation
did not formulate its own and separate Regulations but rather in its 26th
Meeting of the Board of Directors held on 18.06.2009 decided to adopt the
service Rules of SICOP. The Service Rules adopted by the Corporation
nowhere provide for grant of pensionary benefits to its employees. So far as
Articles of Association of the Corporation are concerned, by Article 78
(XVI), the Board of Directors of the Corporation is empowered to make
provision for pension before declaring any dividend and subject to approval
of the Government, set aside such portion of the profit of the Corporation as
they may deem fit to constitute a fund to provide such pension, gratuity or
compensation. This clause is followed by clause (XVII). It may be noted that
Clauses (XVI) and (XVII) of the Articles of Association of the Corporation
are identically worded as the Article 78 of the Articles of Association of
SIDCO. The aforesaid twin clauses of Article 78 of Articles of Association
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of SIDCO have already been elaborately discussed herein above and,
therefore, reiteration of the same is avoided.
40. Now coming to the J&K SICOP Service Condition Rules of
1977, it may be pointed out that the Corporation does not have any service
rules and has adopted the SICOP Staff Service Rules, 1977 for regulating the
recruitment and conditions of service of its employees. In terms of Note to
Chapter I (Rule 3), the Government Rules are to be adopted by the
Corporation where the Service Rules are silent. As has been elaborately
discussed in the judgment rendered in the case of SIDCO employees, we are
of the considered view that even in the case of employees of the
Corporation, it is hard to say that the Rules of the Corporation insofar as
pensionary benefits to its employees are concerned, are silent. The Articles
of Association do empower the Board of Directors of the Corporation to
constitute a fund for payment of bonus, pension and other benefits for the
employees provided the Corporation makes profit and there is formal
approval by the Government. The appellants have placed enough material on
record to show that the Corporation, like many other Public Sector
Undertakings of the State, has been running in losses for the last several
years and there had never been any occasion for payment of dividend. In the
absence of Corporation making profits, there was no occasion for the Board
of Directors to form a fund for payment of pension or some other benefit
fund for the welfare of its employees. Nonetheless with a view to provide
sustenance and life with dignity to its employees, there is a provision of
constituting employees' provident fund. The respondents have subscribed to
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the EPF Scheme framed under the Act of 1961 and each months portion of
their salary is deducted towards such fund with matching contribution made
by the Corporation. This EPF becomes payable in favour of the employees
of the corporation at the time of retirement. In essence, the provision of EPF
is in lieu of pension in so far as the employees of the Corporation are
concerned. That apart, the employees of the Corporation are also entitled to
death-cum-retirement gratuity and leave encashment. It is not, thus, the case
of the respondents that there is no provision for payment of post retirement
benefits made by the Corporation in their favour and therefore, they are
deprived of their right to life with dignity post retirement.
41. We have elaborately discussed the nature of pensionary benefits
particularly the pension that is paid to an employee on superannuation and at
the cost of reiteration we say that pension or post retiral benefits are
regulated by the terms and conditions of appointment. The Articles of
Association of the Corporation and also the SICOP Staff Services Rules
1977, which are applicable to the employees of the Corporation as well, do
not provide for payment of pension to the retired employees of the
Corporation and instead provision for other post retiral benefits like, EPF,
Gratuity and leave encashment etc., has been made for the benefit of its
employees. In short, the case of the respondents is identical to and not better
than the employees of SIDCO and therefore, whatever is said while
disposing of LPASW No. 11/2019 and 13/2019 shall apply to the instant
appeal as well.
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42. Accordingly, we allow this appeal and set aside the impugned
judgment dated 10.10.2018. Resultantly, the writ petition (SWP No.
1598/2017) shall stand dismissed.
LPASW No. 3/2019 & LPASW No. 195/2018
43. These two intra Court appeals are directed against judgment dated
31.07.2018 passed in SWP No. 1269/2016 titled "All J&K State Forest
Corporation Employees Union v. State of J&K" and SWP No. 469/2018
titled "J&K State Forest Corporation Employees Union Chenab Valley
v. State of J&K and ors. In terms of the impugned judgment dated
31.07.2018, both the writ petitions have been allowed on the analogy of
SWP No. 1250/2002 titled JK Industries Employees Association v. State and
ors and the writ petitioners have been held entitled to pensionary benefits on
par with Government employees.
44. With a view to appreciate the challenge of the appellants to the
impugned judgment, it is necessary to briefly understand the case that was
set up before the learned Single Judge by the respondents (hereinafter
referred to as the 'writ petitioners')
45. As is apparent from the title of the writ petitions, these petitions
were filed by the employees of the State Forest Corporation [SFC for short]
through their registered trade unions and the relief claimed in both these writ
petitions is for grant of pensionary benefits on par with Government
employees of the Forest Department of the State. The writ petitioners have
urged several grounds in the writ petitions in support of their claim but the
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writ Court, as is evident from the impugned judgment, has not gone into any
of these grounds but has rested its judgment on the earlier decision of this
Court dated 12.03.2009 in the case of Employees of JK Industries passed in
SWP No. 1250/2002. The events leading to the judgment dated 12.03.2009
in the case of JK Industries have already been elaborated in some detail in
the judgment passed in LPASW No. 11/2019 and 13/2019 hereinabove. To
avoid unnecessary repetition, we are not reiterating what we have already
said hereinabove, but the question that we are called upon to determine in
these appeals is, as to whether the ratio of the judgment dated 12.03.2009
applies to the employees of the SFC as well. Additionally, the arguments
made by Mr. M.Y.Bhat, learned senior counsel, which admittedly were not
deliberated by the writ Court also deserve to be given respect and considered
being pure questions of law.
46. Indisputably, the respondents-Union represents the employees
appointed to JK SFC and for convenience we will refer them as
"Corporation employees". The SFC was constituted in the year 1978 by the
Act of State Legislature known as "J&K State Forest Corporation Act,
1978" ["the Act of 1978" for short]. The SFC actually came into existence in
the year 1979 and started functioning with effect from 01.07.1979 (reference
is made to SRO No. 359 dated 30.06.1979 and SRO No. 361 dated
01.07.1979). Section 34 of the Act of 1978 empowers the SFC, with the
previous approval of the Government, to make regulations not inconsistence
with the Act and Rules made thereunder for the administration of the
Corporation. Such regulations may inter alia provide for the matters,
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namely, salary and allowances and conditions of service of employees of the
Corporation. Sub Section (3) of Section 34 further provides that until any
regulations are made by the Corporation, under Sub Section (1) of Section
34, any regulation which may be so made by the Corporation, may be made
by the Government and any regulations so made by the Government, may be
altered or rescinded by the Corporation in exercise of its powers under Sub-
Section (1). In the exercise of powers under Section 34 of the Act of 1978,
the SFC, with the prior approval of the Government, has framed the J&K
State Forest Corporation Employees Service Regulations 1981 ('the
Regulations' for short). The pay and allowances of SFC employees have
been regulated as per Government Order No. 19-GR of 1980 dated
26.04.1980 issued pursuant to Cabinet Decision No. 197 dated 22.04.1980
which provides that pay scales of Public Sector Undertakings are to be fixed
by the Wage Committee. The writ petitioners, being admittedly Corporation
borne employees, were well aware right from their inception of service that
they were not entitled to any pension. They knew full well that the
Regulations of 1981 do not contain any provision for pension rather the
employees of the Corporation were made to compulsorily subscribe to the
Employees Provident Fund Scheme framed under the Act of 1961. It may be
noted that the Act of 1961 is applicable to every establishment which is a
factory engaged in any industries specified in Scheduled I and in which five
or more persons are employed at any time. This was later amended to apply
to establishments applying ten or more persons. Indisputably, the SFC is an
establishment within the meaning of Act of 1961 and therefore, for this
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reason, the writ petitioners are members of EPF Scheme and have
contributed their share with matching contribution made by the SFC. The
cumulative amount standing in their account has been released with interest
at the time of their retirement from SFC. The ratio of contribution was
extended to 8.33% of the basic pay which has now been increased to 12% by
subsequent amendment made in the Act of 1961 in the year 2012. The writ
petitioners were, thus, aware that the Corporation does not have any pension
scheme for its employees but instead has EPF scheme to provide for
substantial sum as post retirement benefit along with gratuity and leave
encashment etc. This aspect has not been considered by the learned Single
Judge. As a matter of fact, there is no parity between the case of the writ
petitioners and the case of the employees of JK Industries who were writ
petitioners in SWP No. 1250/2002 decided on 12.03.2009.
47. Insofar as position obtaining from the Regulations of 1981 is
concerned, Regulation No. 22-B, which was introduced/inserted in the year
2010, the pensionary benefits have been provided to be paid to the erstwhile
Government Lumbering Undertaking (GLU) employees only and the
employees appointed in the Corporation after 30.06.1979 and borne on its
establishment, have been held entitled to service benefits as laid down in JK
SFC Service Regulations 1981. For facility of reference, Regulation 22-B is
reproduced hereunder:
"22-B. Pensionary Benefits: The pensionary benefit
claims shall be settled as under:
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(i) The erstwhile GLU Employees who had
exercised their option to serve the Corporation under its
rules and regulations and have put in 5 years or more
services as on 31.03.1983* (the cut of date fixed by the
Government) shall get pension as per decision of the
Government.
(ii) Such of the erstwhile GLU borne who had
exercised their option but have not completed five years
or more services as on 30.06.1984 i.i. the cut of date,
shall be paid service benefits for the spell of services
rendered by them in the erstwhile GLU upto 30.06.1979
as per the decision of the Government and the period of
service rendered in J&K SFC after 30.06.1979 shall be
paid as per the provisions laid down in the J&K SFC
Service Regulations of 1881.
(iii) The employees appointed in the Corporation
after 30.06.1979 and borne on the establishment of the
Corporation shall be paid service benefits as laid down in
the J&K SFC Service Regulations, 1981."
48. True it is that Regulation 7 deals with residuary matters. The
same reads thus:
"7 RESIDUARY MATTERS:
In respect of matters of procedure or any other issue, not
expressly provided herein, the provisions of these rules
and the procedure applicable generally to the State
Government employees in such matters shall always be
deemed applicable to the employees of the Corporation.
Provided that where application of any such rule (s)
confer a benefit on the employee of the Corporation
involving financial and/or administrative implications the
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extension of the same shall be decided by the Corporation
with the prior approval of the Government."
49. From a perusal of Regulations 7 and 22 together, it becomes
abundantly clear that the employees of the Corporation having been made to
compulsorily subscribed to EPF under the Act of 1961 have not been given
the benefit of pension, though the employees of erstwhile GLU which was a
Department of the Government, have been allowed the pensionary benefits
on par with other Government employees. It is, thus, not correct to say that
the Regulations of 1981 are silent with regard to grant of pension and,
therefore, by aid of residuary regulation, the J&K CSR and other Rules and
procedures applicable generally to the State Government employees would
become applicable. The proviso appended to Regulation 7 would make
things further clear that even applicability of the procedure applicable
generally to Government Employees involving financial and administrative
implications is subject to the Corporation (SFC) taking a decision with the
prior approval of the Government. It is, thus, explicit that under Clause '7'
(Residuary Matters), only procedural rules applicable generally to
Government employees or applicable in respect of matters not provided for
in the Regulations and their applicability is subject to SFC taking a specific
decision in this regard, that too, with prior approval of Government. The
provision is substantially different from the decision of Board of Directors of
JKI with regard to applicability of Rules of Government Servants to the
employees of JKI wherever Rules and Regulations of said Corporation were
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silent. This vital distinction has not been noticed by the learned Single
Judge.
50. The plea of Mr. M.Y. Bhat learned senior counsel that, since
the regulations are silent about payment of retirement pension to the
employees of the Corporation and, therefore, by doctrine of legislation 'by
incorporation', the pension rules incorporated in Part IV of CSR should be
deemed to have become part of Regulations of 1981, is without any
substance and cannot be accepted. We do not find any ambiguity in the
Regulations and, therefore, resort to Rules of Statutory interpretations
invoked by Mr. Bhat is not called for. We will go by the primary Rule also
known as literal Rule that the plain language of the provision must provide
the first and foremost guidance. The phrases and sentences are to be
construed according to Rules of grammar and given the ordinary meaning. It
must also to be kept in mind that statutory language is not to be read in
isolation but always in its context. It is true that though dictionary meaning
may provide assistance to find out ordinary sense of the words, yet we
cannot always consider individual words in isolation and divorced from the
context they have occurred in. When we interpret Regulation 7 and
Regulation 22, the view which we have taken is inescapable and is only
possible view (See para 49 of R.S.Nayak v. A.R.Antulay (1984) 2 SCC
183, a judgment by Constitution Bench of Supreme Court).
51. An argument was raised by Mr. Bhat that the employees of
SFC, which is an arm of the Government and performing Governmental
function, cannot be discriminated vis-a-vis their counterparts serving in the
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Forest Department. Mr. Bhat took us through different provisions of the Act
of 1979 to make good his point that insofar as the duties of the employees of
SFC are concerned, they are in no manner different form the similar duties
performed by the employees of the Forest Department of the Government.
Invoking the doctrine of "equal pay for equal work", Mr. Bhat submits that
all service benefits which are being paid by the Government to its employees
should also be granted to the employees of the Corporation. He took us
through the history and development of the Corporation culture in India.
52. We have given thoughtful consideration to the argument
addressed by Mr. Bhat, but we regret our inability to agree with him for the
reason that for invoking of doctrine of "equal pay for equal work", a specific
case is required to be set up. It is not only the similarities of duties
performed by two sets of employees working in two different
Departments/Organizations that alone will suffice invocation of the doctrine
of equal pay for equal work, there are other relevant factors which must be
shown to be existing for invoking doctrine viz. the two sets of employees
seeking parity in their service conditions/wages should be under the same
employer; the mode and manner of recruitment should be identical and the
qualification for the post should be same. In short, a specific case needs to
set up for claiming parity in claiming wages. It is not the grievance of the
writ petitioners that in the matter of payment of salary, they are being
discriminated vis a vis their counterparts serving in the Government
Departments, in particular the Department of Forest, but their plea is that
Government employees are being paid pension as a post retiral benefits,
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whereas the writ petitioners are being paid EPF as part of post retirement
benefit and, therefore, the discrimination.
53. It would be apt to take note of what was said by Hon'ble
Supreme Court in T.M. Sampat and others v. Secretary, Ministry of
Water Resources, (2015) 5 SCC 333. Paras 15 to 18 are noteworthy and,
therefore, set out below:-
"15. In light of the facts and circumstances of this case and the
submissions made by the learned counsel on both sides, it can be
concluded that NWDA had framed its regulation: the CPF Rules,
1982 and they were duly approved by the Governing Body of
NWDA. As NWDA is an autonomous body under the Ministry of
Water Resources, it has framed its own bye-laws governing the
employees. It has been time and again reiterated that the Court
must adopt an attitude of total non-interference or minimal
interference in the matter of interpretation of rules framed by
autonomous institutions. In Kerala SRTC vs. K.O. Varghese and
Others, (2007) 8 SCC 231, this Court held:
"18.......KSRTC is an autonomous corporation established
under the Road Transport Corporation Act, 1950. It can
regulate the service of its employees by making appropriate
regulations it that behalf.
* * *
21. The High Court..... is not correct in thinking that there
is any compulsion on KSRTC on the mere adoption of Part
III of KSR to automatically give all enhancements in
pension and other benefits given by the State Government
to its employees."
Thus, as the appellants are governed by the CPF Rules, 1982, the
O.M. applicable to Central Government employees is not
applicable to them.
16. On the issue of parity between the employees of NWDA and
Central Government employees, even if it is assumed that the 1982
Rules did not exist or were not applicable on the date of the O.M.
i.e. 1-05-1987, the relevant date of parity, the principle of parity
cannot be applicable to the employees of NWDA. NWDA cannot
be treated as an instrumentality of the State under Article 12 of the
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Constitution merely on the basis that its funds are granted by the
Central Government. In Zee Telefilms Ltd. v. Union of India &
Ors., (2005) 4 SCC 649, it was held by this Court that the
autonomous bodies having some nexus with the Government by
itself would not bring them within the sweep of the expression
'State' and each case must be determined on its own merits. Thus,
the plea of the employees of NWDA to be treated at par with their
counterparts in Central Government under sub rule (6)(iv) of Rule
2009 of General Financial Rules, merely on the basis of funding is
not applicable.
17. Even if it is presumed that NWDA is "State" under Article
12 of the Constitution, the appellants have failed to prove that they
are at par with their counterparts, with whom they claim parity. As
held by this Court in Union Territory, Chandigarh v. Krishan
Bhandari, (1996) 11 SCC 348, the claim to equality can be claimed
when there is discrimination by the State between two persons who
are similarly situated. The said discrimination cannot be invoked in
cases where discrimination sought to be shown is between acts of
two different authorities functioning as State under Article
12. Thus, the employees of NWDA cannot be said to be 'Central
Government Employees' as stated in the O.M. for its applicability.
18. Thus, by reason that the employees are governed by
NWDA CPF Rules, 1982, the O.M. dated 01.05.1987 is not
applicable to the appellant-employees. Further, as they have not
established that they are Central Government employees, at par
with their counterparts, their claim of parity with Central
Government Employees is also defeated."
Following this, a Division Bench of Delhi High Court in Union of
India v. Association of Employees of Indian Institute of Mass
Communication (2020) 1 AD (Delhi) 23, in paragraph nos. 3, 34 and 35
has summed up the law on the same point. We see it worthwhile to
reproduce these paragraphs herein below:-
"3. The main issue flagged by the present Petitioners is with
respect to the applicability of the Central Civil Services (Pension)
Rules, 1972 ('Pension Rules') to Autonomous Bodies ('ABs'). The
case of the Petitioners is that these ABs are established by the
Government to discharge activities related to governmental
functions, but they are given the autonomy to do so in accordance
with their own set of Memorandum of Associations/Rules, etc. The
said ABs are either registered under the Indian Societies
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Registration Act, 1860 or created by an Act of Parliament. The said
ABs have specific objectives and they are governed by their own
bye-laws/statutes. The employees of ABs are not Central
Government servants.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
34. The ratio of the decision in T.M. Sampath's case is fully
applicable to the case in hand. The members of the Respondent No.
1 Association are claiming parity with the Central Government
employees on the ground that the Respondent No.3 organisation is
fully funded by the Central Government. The said ground has been
negated by the Hon'ble Supreme Court to claim parity. The
Ministry of Finance has reiterated in its counter affidavit filed
before CAT that it had never agreed for introduction of the pension
scheme in IIMC on the lines of the pension being provided to the
Central Government employees. So, this Court cannot force the
Petitioner No.2 to give its concurrence for introduction of the
pension scheme under CCS Pension Rules for the employees of
Respondent No. 3 organisation.
35. The Respondent No. 3 had its own CPF based scheme for its
employees. So, the benefit granted to Central Government
employees for shifting from CPF to the pension scheme cannot be
extended automatically to the employees or Respondent No.3
organisation on the basis of OM dated 1st May, 1987 as Clause 7.2
of the said OM makes it very clear that the Administrative
Ministries were advised to issue similar orders but no such order
was issued by Petitioner No. 1, i.e. the Controlling Ministry of
IIMC after consultation with the Petitioner No. 2. So, the benefit of
the CCS (Pension) Rules, 1972 cannot be extended to the
employees of Respondent No. 3."
54. The ratio of aforementioned judgments is fully applicable to the
case on hand. The writ petitioners are claiming parity with the U.T.
Government employees on the ground that SFC is fully funded and
controlled by Government and is performing governmental functions. Said
ground has been negated by Apex Court in T.M.Sampat's case (supra). At
this juncture, we would like to notice the observations made , though in
slightly different context by the Hon'ble Supreme Court in A.K.Bindal and
anothers v. Union of India and others (2003) 5 SCC 163. Paragraph
Nos.17, 18, 27 and 28 go as under:-
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17. The legal position is that identity of the Government Company
remains distinct from the government. The Government Company
is not identified with the Union but has been placed under a special
system of control and conferred certain privileges by virtue of the
provisions contained in Sections 619 and 620 of the Companies
Act. Merely because the entire share holding is owned by the
Central Government will not make the incorporated company as
Central Government. It is also equally well settled that the
employees of the Government Company are not civil servants and
so are not entitled to the protection afforded by Article 311 of the
Constitution (Pyare Lal Sharma v. Managing Director AIR 1989
SC 1854). Since employees of Government Companies are not
government servants they have absolutely no legal right to claim
that government should pay their salary or that the additional
expenditure incurred on account of revision of their pay scale
should be met by the government. Being employees of the
companies it is the responsibility of the companies to pay them
salary and if the company is sustaining losses continuously over a
period and does not have the financial capacity to revise or enhance
the pay scale, the petitioners cannot claim any legal right to ask for
a direction to the Central Government to meet the additional
expenditure which may be incurred on account of revision of pay
scales. It appears that prior to issuance of the Office Memorandum
dated 12.4.1993 the Government had been providing the necessary
funds for the management of Public Sector Enterprises which had
been incurring losses. After the change in economic policy
introduced in early nineties, Government took a decision that the
Public Sector Undertakings will have to generate their own
resources to meet the additional expenditure incurred on account of
increase in wages and that the government will not provide any
funds for the same. Such of the Public Sector Enterprises
(Government Companies) which had become sick and had been
referred to BIFR, were obviously running on huge losses and did
not have their own resources to meet the financial liability which
would have been incurred by revision of pay scales. By the Office
Memorandum dated 19.7.1995 the Government merely reiterated
its earlier stand and issued a caution that till a decision was taken to
revive the undertakings no revision in pay scale should be allowed.
We, therefore do not find any infirmity legal or constitutional in the
two Office Memorandums which have been challenged in the writ
petitions.
18. We are unable to accept the contention of Shri Venkataramani
that on account of non-revision of pay scales of the petitioners in
the year 1992, there has been any violation of their fundamental
rights guaranteed under Article 21 of the Constitution. Article
21 provides that no person shall be deprived of his life or personal
liberty except according to procedure established by law. The
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scope and content of this Article has been expanded by judicial
decisions. Right to life enshrined in this Article means something
more than survival or animal existence. It would include the right
to live with human dignity. Payment of very small subsistence
allowance to an employee under suspension which would be
wholly insufficient to sustain his living, was held to be violative
of Article 21 of the Constitution in State of Maharashtra v.
Chandrabhan AIR 1983 SC 803. Similarly, unfair conditions of
labour in People's Union for Civil Liberties v. Union of India AIR
1982 SC 1473. It has been held to embrace within its field the right
to livelihood by means which are not illegal, immoral or opposed
to public policy in Olga Tellis v. Bombay Municipal
Corporation AIR 1987 SC 108. But to hold that mere non-revision
of pay scale would also amount to a violation of the fundamental
right guaranteed under Article 21 would be stretching it too far and
cannot be countenanced. Even under the Industrial law, the view is
that the workmen should get a minimum wage or a fair wage but
not that his wages must be revised and enhanced periodically. It is
true that on account of inflation there has been a general price rise
but by that fact alone it is not possible to draw an inference that the
salary currently being paid to them is wholly inadequate to lead a
life with human dignity. What should be the salary structure to lead
a "life with human dignity" is a difficult exercise and cannot be
measured in absolute terms. It will depend upon nature of duty and
responsibility of the post, the requisite qualification and
experience, working condition and a host of other factors. The
salary structure of similarly placed persons working in other Public
Sector Undertakings may also be relevant. The petitioners have not
placed any material on record to show that the salary which is
currently being paid to them is so low that they are not able to
maintain their living having regard to the post which they are
holding. The observations made in paragraphs 276 and 277
in Delhi Transport Corporation v. D.T.C. Mazdoor
Congress (supra), strongly relied upon by learned counsel for the
petitioners, should not be read out of its context. In the said case
the Court was called upon to consider the constitutional validity of
Regulation 9 of Delhi Road Transport Authority (Conditions of
Appointment and Service) Regulations, 1952, which gave power to
terminate the services of an employee after giving one month's
notice or pay in lieu thereof. The termination of services of some of
the employees on the ground that they were inefficient in their
work by giving one month's notice was set aside by the High Court
as in its opinion Regulation 9(b) gave absolute unbridled and
arbitrary powers to the management to terminate the service of any
permanent or temporary employee and, therefore, the same was
violative of Article 14 of the Constitution. It was in this context
that the aforesaid observations were made by one Hon'ble Judge in
his separate opinion. The issue involved was not of revision of pay
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scale but that of termination of service which has an altogether
different impact on an employee.
xxxxxxxxxxxxxxx
27. Apart from what we have discussed earlier, it is necessary to
take note of a subsequent development which has a serious impact
on the relief claimed by the petitioners. The respondents have filed
an affidavit on 15.2.2003 sworn by Shri Pawan Wadhwa, Deputy
Secretary, Department of Fertilizers, Ministry of Chemicals and
Fertilizers. It is averred in the said affidavit that the accumulated
losses as on 31.1.2003 of HFC have been Rs.7421.52 crores and
that of FCI have been Rs.8874.00 crores. To meet the expenditure
towards salary, wages as well as other administrative expenses in
these units including preservation cost of the plants, total plan and
non-plan budgetary assistance to the tune of Rs.2,227.00 crores has
been extended by the Government of India till 31.1.2003. The
commercial production in some of the units of both the companies
never commenced and the remaining units suspended operations
one by one as viability/economics of production of urea in these
plants had become extremely unfavourable. The revival packages
of these companies could not be taken up for want of funding tie up
with the Financial Institutions on account of their reservation about
the techno-economic viability of the proposals. The revival
package based on unit-wise techno-economic viability were
considered by the competent authority in the Government from
time to time culminating in Government's decision on 18.7.2002
and 5.9.2002 for closure of majority of the units of both FCI and
HFC along with supporting establishments. The Government had
incurred an expenditure for Rs.72.96 lakhs per month in respect of
HFC and Rs.69 lakhs per month in respect of FCI in implementing
the orders of this Court dated 19.4.2000 and 18.8.2000. The
accumulated expenditure which had been borne by the Government
of India through non-plan budgetary support till date as on this
account adds up to Rs.16.56 crores in respect of FCI and Rs. 21.56
crores in respect of HFC. 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. This
scheme was liberalised 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 liberalised 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). The exact figures regarding implementation of the
Scheme as on 24.3.2003 is given below:
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PSU-WISE DETAILS OF IMPLEMENTATION OF VRS
____________________________________________________
S.No Item HFC FCI
____________________________________________________
1. Total employees as on 20.9.2002 4881 5712
2. Employees opted for VRS 4781 5675
3. Employees released 4325 5097
4. Funds released by DOF (Rs. In Crores) 174.50 253.50
5. Funds actually utilized by the company 154.10 237.30
6. Balance funds with the Company 20.50 16.20
28. Shri Mukul Rohtagi, learned Additional Solicitor General has
submitted that while framing the Voluntary Retirement Scheme the
grievance of the petitioners regarding non-revision of their pay
scale has been taken into consideration and it was for this reason
that in the second Voluntary Retirement Scheme announced on
6.11.2001 ex-gratia payment in respect of employees on pay scales
at 1.1.1987 level has been increased by 100 per cent and for
employees on pay scales at 1.1.1992 level, it has been increased by
50 per cent So far as HFC is concerned 4781 out of 4881
employees had opted for VRS and only 100 remained. Similarly for
FCI out of 5712 employees 5675 had opted for VRS and only 37
remained. The majority of left over number of employees in both
the companies is proposed to be retained for assisting in
completion of the formalities entailing the closure process. The
Government of India had released an amount of Rs.154 crores to
HFC and Rs.237.50 crores to FCI for disbursal of VRS benefits to
these employees. Learned counsel has submitted that the
employees of both the Companies having taken advantage of VRS
and having taken the amount without any demur, the relationship of
employer and employee had ceased to exist. They cannot therefore
raise any grievance regarding the non revision of pay scale at this
stage and consequently the Writ Petitions have become infructuous.
Even Shri A.K. Bindal who filed the writ petition in his capacity as
President of Federation of Officers Association had also taken
voluntary retirement and after acceptance of the amount had left
the company and had gone out."
55. Insofar as parity with statutory bodes like JDA, SDA,
Municipal Corporations etc. Is concerned, it may be pointed out that these
bodies have either provided specifically for retirement pension or have
adopted State Pension Rules (CSR). Being different employees covered by
different rules are, thus, class apart and no parity can be claimed by the
respondents with the employees of these bodies ( see T. M. Sampat (supra).
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56. It may be pointed out that what post retirement benefits would
be available to employees of a Department/ Organization or Corporation
would depend on the terms and conditions of their service. There may be
provisions in some PSUs also providing gratuity, EPF and also pension as
part of post retirement benefits. If that is done, it is perfectly legal but there
could be some Departments/Organizations which may provide for payment
of EPF in lieu of pension along with gratuity and other terminal benefits. It
is equally legally perfect. It depends upon many factors including the
financial health of such Department/Organization or the Corporation as the
case may be. All employees, when recruited, are aware and at least are ought
to be aware of the terms and conditions of their service. In the instant case,
the writ petitioners knew well in advance that the terms and conditions of
their employment do not provide for pension rather make them to
compulsorily subscribe to EPF under the Act of 1961 as also under Chapter
XI of the Regulations of 1981. As we have noted in the judgment passed in
the case of SIDCO employees, the very fact that the Corporation is an
establishment for the purposes of Act of 1961 and its employees are required
to contribute to EPF with matching contribution by the employer, goes a
long way to say that the Corporation never ever intended to grant pensionary
benefits to its employees, rather provided them the benefit of EPF scheme so
as to ensure that its employees, on superannuation, receive a substantial
amount sufficient enough to cater their future needs. The object which is
sought to be achieved by pension is well achieved by making the payment
from EPF. We have already discussed at some length the distinction between
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the two and we refrain ourselves in entering that debate yet again. To be fair
to the learned Advocate General, we may point out that there has been
substantial delay by the writ petitioners in approaching this Court with the
grievance. Their plea that they had been representing their case for the last
several years with some positive response from their immediate employer is
of no consequence.
57. It is well settled that making repeated representations over a
period of time running in decades is no explanation for delay and laches in
approaching the Constitutional Court. As we have already noted
hereinabove, the writ petitioners were persuaded to file the writ petitioners
only after the employees of JK Industries succeeded in getting relief from
this Court in the year 2009 and the said judgment was implemented. The
writ petitioners even waited for eight years after the decision of the aforesaid
case. There is, thus, unexplained delay in filing the writ petitions. It is a
different matter that the aforesaid issue has not been considered by the writ
Court and probably, it may not have been pressed by the appellants.
58. We have carefully gone through the judgment of the writ Court,
but could not find as to how the writ petitioners were found to be similarly
placed with the employees of JK Industries by the Writ Court. In the absence
of any comparison between the two having been done by the writ Court or
otherwise existing, it was not permissible to dispose of the writ petitions on
the analogy of the decision in the case of employees of JK Industries.
59. In view of the foregoing discussions and adopting the reasoning
given in support of our judgment rendered in the case of employees of
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SIDCO, we find merit in these appeals, the same are, accordingly, allowed
and the impugned judgment is set aside. As a result, the writ petitions stand
dismissed.
LPASW No. 147/2018
60. This intra Court appeal by the State of J&K and the Managing
Director of J&K SFC is directed against the judgment dated 15.12.2017
passed in SWP No. 2786/2011 titled Gh. Mohd Mir and ors vs. State and ors
whereby the respondents herein (hereinafter referred as the 'writ petitioners'
for short) have been held entitled to pensionary benefits on par with the
employees of GLU, who had been granted the said benefit in terms of
provisions contained in J&K CSR. The writ petitioners are employees, who
were appointed in the JKSFC during the period from 01.07.1979 to
31.03.1980. It needs to be noticed that erstwhile Government Lumbering
Project was a wing of the J&K Forest Department which was later on
converted into Government Lumbering Undertaking. This undertaking too
continued to be an integral part of the Forest Department of the Government.
The employees of GLU were governed by a separate set of Recruitment
Rules. The JK SFC came to be incorporated by the Act of Legislature known
by the name of J&K State Forest Corporation Act, 1978 (the Act of 1978)
vide Government Order dated 30.06.1979. GLU became part of the SFC
which came into existence on 01.07.1979. The JK SFC framed its own
Service Regulations in the year 1981. The employees of GLU appointed
before 30.06.1979 were admittedly Government employees and were treated
as such by the appellants. With the creation of JK SFC, the employees of
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GLU were asked to give their option as to whether they would like to serve
the SFC or face termination. This option was given to the employees of
GLU in terms of Government Order No.138-FST of 1980 dated 30.10.1980.
It was ordered that the services which the employees of GLU had rendered
in the undertaking would be given due credit and they would be entitled to
pensionary benefits if they completed ten years service. It is claimed by the
writ petitioners that, though they were not the employees of GLU and were
appointed after its conversion into the Corporation, yet their recruitment and
appointment was made in terms of GLU Rules. It is the grievance of the writ
petitioners that GLU employees appointed up to 30.06.1979 gave option to
serve the Corporation and with the coming into force of the SFC Rules and
Regulations, they were given all benefits as were admissible to the SFC
employees. Even the services of temporary employees of GLU were
declared quasi permanent who had completed three years as on 01.07.1979.
By a subsequent order, even those employees who had completed five years
as on 31.03.1980 were also declared quasi permanent. The writ petitioners
put up a claim before the respondents that they having been appointed
between 01.07.1979 to 31.03.1980, were also entitled to be treated on par
with GLU temporary employees, who were subsequently treated as quasi
permanent and given the benefit of pensionary benefits. They appear to have
represented to the Government for according them such treatment, but
appellant No.1 vide its communication dated 27.09.2011 conveyed its
decision in the light of the opinion already tendered by the Finance
Department vide its communication dated 27.01.2011 to the extent that
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reopening of the case after considerable period of 26 years for extending the
pensionary benefits, has not been found justified. It is this communication
and the opinion of the Finance Department reproduced wherein which was
challenged by the writ petitioners in the writ petition, disposed of by the
Writ Court in terms of the judgment impugned in this appeal.
61. The writ petition was contested by the appellants. Apart from
taking the preliminary objection of non-maintainability of writ petition on
account of delay and laches, the writ petition was sought to be met on merits
also. It was the stand of the appellants (the respondents in the writ petition)
that the writ petitioners were the employees of the Corporation and therefore
were entitled to only such service benefits as were envisaged in the Rules
and Regulations of the Corporation. It was submitted that the writ petitioners
cannot claim parity with the employees of GLU which was a Government
Department and the employees appointed therein were government servants
governed by J&K Civil Service Regulations. It was also pleaded by the
respondents that SFC was an establishment as defined in the Act of 1961
and, therefore, the employees of the Corporation were governed by the CPF
Scheme framed under the Act. This is so specifically provided in the 1981
Regulations also.
62. The matter was considered by the Writ Court . The Writ Court
did not agree with the stand of the appellants herein and concluded that the
writ petitioners though appointed in JKSFC between 01.07.1979 to
31.03.1980, too had completed four years service in the Corporation as on
31.03.1980 and, therefore, ought to have been treated on a par with GLU
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employees. Reference is also made by the Writ Court to the
recommendations made by the Managing Director of the SFC vide its
communication dated 14.03.2008 to come to the rescue of the writ
petitioners. The Writ Court accepted the writ petition, quashed the impugned
communication and directed the appellants herein to treat the writ petitioners
on par with the employees of GLU and grant them the benefit of pension.
The other issues raised by the appellants like delay and laches and the
availability of EPF Scheme for the benefit of retiring employees of the
Corporation specifically raised by the appellants in their objections were,
however, not addressed.
63. Having heard learned counsel for the parties and perused the
record, we are of the view that the writ petition besides being hit by huge
delay and laches was not maintainable even on merits. Admittedly, the
benefit of treating the services of GLU employees as quasi permanent who
had completed three years service in the erstwhile GLU was given vide
Forest Order No. 57 of 1994 dated 28.04.1994. Subsequently, another order
was passed by the Government on 22.10.2003 where-under cut off date was
extended up to 31.03.1980 instead of 30.06.1979. The grievance of the writ
petitioners that they too were entitled to be treated on par with the aforesaid
employees of GLU, arose latest by 22.10.2003, whereas they woke up from
slumber and filed the writ petitions only in the year 2011. There was, thus,
huge delay in approaching the Court and this alone could have been
sufficient ground to dismiss the writ petition.
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64. Be that as it may, the fact remains that the writ petition was
entertained and allowed by the writ Court, though on the totally erroneous
premise that the writ petitioners were similarly placed with the employees of
GLU, who after completion of five years service on the cut off date, were
declared as quasi permanent and ultimately held entitled to pensionary
benefits. The mere fact that writ petitioners were Corporation borne
employees having been appointed after coming into existence of JKSFC,
were not similarly situated with the temporary or permanent employees of
GLU, was a factor good enough to non-suit the writ petitioners. GLU, as
noted above, was a Government Department and the employees working
therein were per-se the government employees. Even the temporary
employees working in GLU, a Government Department, were entitled under
the J&K Civil Service (Temporary Service) Rules 1985, to be declared as
quasi permanent after completion of three years service as temporary
employees. It is in keeping with the rule position, the appellants passed
orders in the year 1979 and 1983 to declare them as quasi-permanent.
Admittedly, the writ petitioners were not the employees of GLU, temporary
or permanent and, therefore, a class apart. The decision of the government
not to grant them the said benefit and treat them as quasi-permanent
employees of GLU, therefore, cannot be found fault with.
65. Having held so, we are of the view that the writ petitioners are
similarly situated with the employees of J&K SFC and, therefore, rightly
held not entitled to pension. With regard to the employees of State Forest
Corporation, we have already rendered a decision in LPASW Nos.195/2018
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and 3/2019 and what is stated therein, on facts and law, would apply on all
fours to the instant appeal as well.
66. For the foregoing reasons, the appeal is allowed. The impugned
judgment is set aside and the writ petition dismissed.
(Rajnesh Oswal) (Sanjeev Kumar)
Judge Judge
Srinagar.
11. 11.2021
Sanjeev, PS
Whether the order is speaking : Yes
Whether the order is reportable: Yes
