Murlidhar Datta vs Mecon Limited
2023 Latest Caselaw 1828 Jhar

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                 IN THE HIGH COURT OF JHARKHAND AT RANCHI
                                    W.P.(S) No. 82 of 2014

         1.   Murlidhar Datta
         2.   Soumendra Chandra Roy
         3.   Anil Kumar Singh
         4.   Murel Kerketta
         5.   Sheo Prasad Rai
         6.   Mahendra Pratap Singh
         7.   Jaideo Sharma
         8.   Samuel Dang
         9.   Jhirga Oraon
         10.  M.K. Das Mohapatra
         11.  Abhay Nath Bhattacharya
         12.  Kalyan Kumar Samanta
         13.  Siva Prasad Das
         14.  Purnesh Chandra Bhattacharjee
         15.  V.D. Paul                             ... ... ... Petitioners
                                          VERSUS
         1. MECON Limited, A Government of India Undertaking, having its
            registered office at Doranda, Ranchi
         2. Chairman-cu,-Managing Director, MECON Limited, Doranda, Ranchi
         3. Director (Engineering), MECON Limited, Doranda, Ranchi
         4. Director, Commercial, MECON Limited, Doranda, Ranchi
         5. The General Manager (M.S.), MECON Limited, Doranda, Ranchi
                                                                      ... ... ... Respondents

CORAM : HON'BLE DR JUSTICE S.N. PATHAK For the Petitioner - Mr. Sanjeev Thakur, Advocate For the Respondents - Mr. Amitabh, Advocate

19/01.05.2023 Heard.

Petitioners have approached this Court with a prayer for a direction upon the respondents to make payment of left over post retiral benefits viz. leave salary/ leave encashment (Earned Leave as well as half pay leave) arising out of pay revision for the periods from 01.01.1997 to December, 2006, along with 18% interest.

Petitioners had earlier approached this Court in W.P.(S) No. 6964 of 2011 which was disposed of vide order dated 06.08.2013 directing the respondents to consider their representation. Thereafter, in view of direction of this Court, petitioners moved before the Management vide their representation dated 20.08.2013 however the same was rejected vide order

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dated 02.12.2013, issued by General Manager, MECON with the following observations:

"Having noted the foregoing, CMD, MECON, therefore hold that the company has been following consistently the policy of dealing separately the issues of statutory and incidental payments to employees, including that on pay scale revision. The revised pay scale w.e.f. from 01.01.1997 had been decided at the relevant time to apply for all statutory payments to employees, while the incidental entitlements, including leave encashment, were made available only from prospective dates as and when the respective decisions were taken by the company, in respect of its current and/or ex-regular employees. It is therefore, consistent with the policy of the company that while revised pay has been considered for the period 01.01.1997 to 31.12.2000 for the statutory payments, no such decision was made applicable to the other incidental payments. Accordingly, payment of leave salary on retirement during the said period of 01.01.1997 to 31.12.2000 in the pre-revised scale and not in the scale revised w.e.f. 01.01.1997 is consistent with the aforesaid policy of the company in the matter."

Aggrieved by the said decision of the Company, petitioners have been constrained to knock door of this Court.

Mr. Sanjeev Thakur, learned counsel vociferously argues that the petitioners are eligible for the benefits of pay revision in respect of the leave encashment amount and accordingly they approached the authorities but illegally and arbitrarily without assigning valid and cogent reasons their claims have been rejected. Learned counsel further submits that on various occasions different stand was taken by the respondents. Learned counsel further argues that the respondents have shown discrimination by not making payment as even the retired employees have not been paid the same though the petitioners have voluntarily retired between the years January, 1997 to December, 2000. Right has accrued for getting payment towards the leave encashment and the same cannot be snatched away arbitrarily which is constitutional right of the petitioners. Learned counsel further argues that a direction be given to the respondents to pay entire amount with interest since petitioners are out of service since long after taking voluntary retirement.

Mr. Amitabh, learned counsel representing MECON vehemently opposes contention of learned counsel for the petitioners and further submits

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that the petitioners are not entitled for any amount in the head of leave encashment. Learned counsel further submits that since they have taken voluntary retirement with all benefits, no right has accrued to them to ask for further amount in the head of leave encashment. Learned counsel further submits that in view of Clause 2.1 of the office order dated August 27, 20002 (Annexure-E to the counter affidavit), petitioners are not entitled to the benefits claimed for by them since they have taken voluntary retirement prior to the year 2001. Clause-2.1 reads as under:

"2.1 For the purpose of pay fixation in the revised scale of pay, the same would be notionally from 1.1.1997 and the actual payment would be from 1.1.2001. The revised scale of pay shall be operative till 31.12.2006."

To strengthen his arguments, learned counsel places heavy reliance on the Judgment of Hon'ble Apex Court in the case of Heavy Engineering Corporation Employees reported in 2006(3) SCC 708 as also in the case of A.K. Bindal reported in 2003 (5) SCC 163. The Hon'ble Apex Court has clearly held that the parties are bound by the terms of contract of voluntary retirement.

Having gone through rival submissions of the parties, this Court is of the considered view that no case is made out for any interference for the following facts and reasons:

(i) Earlier the petitioners had moved this Court in W.P.(S) No. 6964 of 2011 which was disposed of vide order dated 06.08.2013 directing the respondents to consider their representation. The respondents have come out with a reasoned order rejecting their claim as the same are not found entitled for. Petitioners have again approached this Court with the same prayer challenging the order of the authorities. From perusal of Clause 2.1 of the office order dated 27.08.2002 (Annexure-E to the counter affidavit), it is crystal clear that for the purpose of pay fixation in the revised scale of pay, the same would be notionally from 1.1.1997 and the actual payment would be from 1.1.2001. The revised scale of pay shall be operative till 31.12.2006.

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(ii) It is an admitted fact that the petitioners had taken voluntary retirement and have accepted the same with all the benefits and terms and conditions mentioned therein. Since the Rule itself clarifies that the actual payment would be from 01.01.2001 and petitioners had already taken VRS prior to the cut-off date i.e. 01.01.2001, no benefits can be claimed by them.

(iii) The issue fell for consideration regarding voluntary retirement in the case of similarly situated employees of Heavy Engineering Corporation and the Hon'ble Apex Court has held that the employees who opted for voluntary retirement, making a planning for the future, they are bound by their own act and terms of contract of voluntary retirement. Such employees prepared themselves to contract out of the jural relationship by resorting to golden handshake and as such, after the announcements of benefits of revision in scale of pay, they cannot claim the same.

(iv) Similar view has been reiterated in the case reported in (2020) 18 SCC 511 in which case the Judgment rendered in (2003) 5 SCC 163 has been reiterated.

(v) Recently in the case of Maharashtra State Financial Corporation Ex-Employees Association and others Vs. State of Maharashtra and others in Civil Appeal Case No. 778 of 2023, the Hon'ble Apex Court while holding that the VRS employees cannot claim parity with others who retired upon attaining the age of superannuation has held in para-38 and 39 as under: "38. However, in the opinion of this court, employees who secured VRS benefits and left the service of MSFC voluntarily during this period, stand on a different footing. They cannot claim parity with those who worked continuously, discharged their functions, and thereafter superannuated. VRS employees chose to opt and leave the service of the corporation; they found the VRS offer beneficial to them. Apart from the normal terminal benefits they were entitled to, the additional amount each of them was given - was an ex-gratia amount, equal to a month's salary for each completed year of service. Other retired employees were never given such amounts. This has been emphasized in A.K. Bindal v. Union of India

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"The Voluntary Retirement Scheme (VRS) which is sometimes called Voluntary Separation Scheme (VSS) is introduced by companies and industrial establishments in order to reduce the surplus staff and to bring in financial efficiency. The office memorandum dated 5.5.2000 issued by the Government of India provided that for sick and unviable units, the VRS package of the Department of Heavy Industry will be adopted. Under this Scheme an employee is entitled to an ex-gratia payment equivalent to 45 days' emoluments (pay+DA) for each completed year of service or the monthly emoluments at the time of retirement multiplied by the balance months of service left before the normal date of retirement, whichever is less. This is in addition to terminal benefits. The Government was conscious about the fact that the pay scales of some of the PSUs had not been revised with effect from 1.1.1992 and therefore it has provided adequate compensation in that regard in the second VRS which was announced for all Central Public Sector Undertakings on 6.11.2001. Clause (a) of the scheme reads as under:

(a) Ex gratia payment in respect of employees on pay scales at 1.1.1987 and 1.1.1992 levels, computed on their existing pay scales in accordance with the extant Scheme, shall be increased by 100% and 50% respectively.

This shows that a considerable amount is to be paid to an employee ex-gratia besides the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and foregoing all his claims or rights in the same. It is a package deal of give and take. That is why in the business world it is known as "golden handshake". The main purpose of paying this amount is to bring about a complete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the

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amount paid to him, the whole purpose of introducing the Scheme would be totally frustrate."

39. For the above reasons, it is held that VRS employees cannot claim parity with others who retired upon achieving the age of superannuation. Likewise, those who ceased to be in employment, for the reason of termination, or their dismissal, etc., would not be entitled to the benefits of pay revision."

In view of aforesaid legal proposition and judicial pronouncements very comfortably it can be inferred that the petitioners, who opted for the VRS, are not entitled for any further payment in view of policy decision of the MECON and also in view of the fact that they themselves opted for the benefits of Voluntary Retirement Scheme.

As a sequitur to the aforesaid rules, guidelines, judicial pronouncements as well as facts and circumstances of the instant case, no interference is warranted. The writ petition is devoid of any merits and the same is hereby dismissed.

(Dr. S.N. Pathak, J.)

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