Karnataka High Court
The Bharat Gold Mines Ltd vs Bharat Gold Mines Ltd on 9 May, 2024
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF MAY, 2024
BEFORE
THE HON'BLE MR. JUSTICE C.M. POONACHA
COMPANY APPLICATION No.229 OF 2020
IN
COMPANY PETITION No.180 OF 2000
C/W
WRIT PETITION No.973 OF 2007 (L-RES)
IN CA No.229/2020
BETWEEN
1 . THE BHARAT GOLD MINES LTD.
EX.EMPLOYEES' ASSOCIATION
REPRESENTED BY ITS PRESIDENT
DR B RAJENDRA KUMAR
S/O DR KRISHNA ACHARYA
AGE - 64 YEARS
NO.C.57, GIFFORDS ROAD
CHAMPION REEF POST
KOLAR GOLD FIELDS-563 117
2 . C KRISHNAPPA
S/O LATE CHIKKAVEERAIAH
AGED ABOUT 72 YEARS
EX-MANAGER (I.A) BGM LTD.
RESIDING AT NO.C-070 (W)
COOKS ROAD
KOLAR GOLD FIELDS-563 120
3 . R MURTHY
S/O LATE VENU
AGED ABOUT 62 YEARS
EX-EMPLOYEE, N D MINE BGM LTD.
RESIDING AT NO.5
NEW MODEL HOUSE
COROMANDAL POST
2
KOLAR GOLD FIELDS-563 118
4 . C VIJAYARAGAVAN
S/O LATE CHINNIAN
AGED ABOUT 69 YEARS
EX-EMPLOYEE
N D WORKSHOP BGM LTD.
RESIDING AT NO.80
2 POST OFFICE BLOCK
MARI KUPPAM POST
KOLAR GOLD FIELDS-563 119
5 . G Y MILLER
S/O YESUDAS
AGED ABOUT 52 YEARS
EX-EMPLOYEE,
BGML AFFORISTATION DEPT.
NO.33, BANDLINE
OORGAM POST
KOLAR GOLD FIELDS-563 120
6 . T SABASTIN
S/O LATE THANGARAJ
AGED ABOUT 60 YEARS
EX-EMPLOYEE, CR WORKSHOP,
BGML, HOUSE NO.44, MRE QUARTERS
CORAMANDALA POST
KOLAR GOLD FIELDS PIN-563 118
7 . J ISAAC
S/O LATE S JYOTHI
AGED ABOUT 67 YEARS
EX-ASST. PERSONNEL MANAGER
BGM LTD, HOUSE NO.18
CHAMPION REEF POST
KOLAR GOLD FIELDS-563 117
...APPLICANTS
(BY SRI H SANNA MALIGAI, ADVOCATE)
AND
1. BHARAT GOLD MINES LTD.
GOVERNMENT OF INDIA UNDERTAKING
3
SUVARNA BHAVAN
OORGAM POST
KOLAR GOLD FIELDS-563 120
REPRESENTED BY ITS MANAGING DIRECTOR
2. THE SECRETARY TO GOVERNMENT OF INDIA
DEPARTMENT OF MINES
MINISTRY OF MINES
SHASTRI BHAVAN
NEW DELHI-110 001
...RESPONDENTS
(BY SRI CLIFTON D ROZARIO AS AMICUS CURIAE
SRI MADHUKAR DESHPANDE, ADVCOATE FOR CGSC R2
SRI T RAJARAM, ADVOCATE FOR R1)
THIS COMPANY APPLICATION IS FILED UNDER RULE 9 OF THE
COMPANIES COURT RULE 1959 AND SECTION 151 OF THE CODE OF
CIVIL PROCEDURES 1908 PRAYING FOR PAYMENT OF DIFFERENCE OF
EX-GRATIA INCREASED BY 100% COMPUTED ON THE EXISTING PAY-
SCALE OF THE EMPLOYEES UNDER MODIFIED / REVISED VOLUNTARY
RETIREMENT SCHEME, NOTIFIED BY THE GOVERNMENT OF INDIA,
DEPARTMENT OF PUBLIC ENTERPRISES, VIDE OFFICE MEMORANDUM
NO. 2(32)/ 97-DPE (WC) / GL-L IV DATED 06-11-2001 (ANNEXURE-A)
IN RESPECT OF OFFICERS / EXECUTIVES COVERED UNDER CENTRAL
GOVERNMENT PAY-SCALE AT 01-01-1986 LEVEL AND OFFICERS/
EMPLOYEES COVERED UNDER INDUSTRIAL PAY-SCALE AT 01-01-1989
LEVEL WHICH FALLS NEARER TO 01-01-1987 LEVEL, WHO ARE ON THE
ROLLS OF THE COMPANY AS ON 28-02-2001 AND PAID SPECIAL
TERMINAL BENEFIT PACKAGE AFTER CLOSURE OF
B.G.M.L. UNDERTAKING WITH EFFECT FROM 01-03-2001.
IN WP No.973/2007
BETWEEN
BHARAT GOLD MINES UNITED
EMPLOYEES ASSOCIATION
(A REGISTERED TRADE UNION REGISTERED
UNDER THE INDIAN TRADE UNIONS ACT)
REPRESENTED BY ITS PRESIDENT
NO.L-46, N.T. BLOCK,
ELECTRICALQUARTERS,
4
OORGAUM POST,
KOLAR GOLDFIELDS 563120
KOLAR DISTRICT
...PETITIONER
(BY SRI M SUBRAMANYA BHAT, ADVOCATE)
AND
1 . THE UNION OF INDIA
REPRESENTED BY THE SECRETARY TO
GOVERNMENT MINISTRY OF MINES
SHASTRI BHAVAN
NEW DELHI
2 . BHARAT GOLD MINES LIMITED
REPRESENTED BY THE CHAIRMAN AND
MANAGING DIRECTOR
SWARNA BHAVAN
OORGAUM POST 563120
KOLAR DISTRICT
3 M/S BHARAT GOLD MINES
ALL EMPLOYEES INDUSTRIAL
CO-OPERATIVE SOIETY LTD
HAVING ITS OFFICE AT NO.1,
KGF CLUB, ANNEX, OORGAUM POST,
KGF KOLAR
REP BY ITS PRESIDENT
SRI K M DIVAKARAN
....RESPONDENTS
(BY SRI MADHUKAR DESHPANDE, CGSC FOR R1
SRI T RAJARAM, ADVOCATE FOR R2
SRI ASWIN PRABHU, ADVOCATE FOR R3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THAT PORTION OF
THE ORDER DT. 7/8.8.2006 ISSUED BY THE GOVERNMENT OF INDIA,
MINISTRY OF MINES, A TRUE COPY OF WHICH HAS BEEN PRODUCED
AS ANNEXURE-L MENTIONED IN CLAUSE (b) OF PARA 2(iii) STATING
THAT "THE FORUM WILL BE ASKED TO PAY THE AMOUNT SO
DETERMINED TO THE GOVERNMENT OF INDIA BEFORE THE ASSETS
CAN BE TRANSFERRED TO THEM. IN RETURN FOR THE ABOVE
5
MENTIONED PURCHASE PREFERENCE, THE SOCIETY/ITS COMPANY
WILL, FIRSTLY, UNDERTAKE TO PAY TO THE EMPLOYEES, IN ADDITION
TO THE SALE VALUE PAID TO THE GOVERNMENT, THE DIFFERENCE
BETWEEN THE STBP AND THE VRS OF 6.11.2001", AS THE SAID
CLAUSE IS ARBITRARY, CAPRICIOUS, IRRATIONAL AND UNJUST AND
HENCE, VIOLATIVE OF ARTICLES 14, 16 AND 21 OF THE
CONSTITUTION OF INDIA AND THE BASIC PRINCIPLES OF
JURISPURDENCE PERTAINING TO MASTER AND SERVANT AND ALSO
VIOLATIVE OF CHAPTER V B OF THE INDUSTRIAL DISPUTES ACT 1947
AND ETC.
THIS COMPANY APPLICATION AND PETITION HAVING BEEN
HEARD AND RESERVED FOR ORDERS ON 21.02.2024 AND COMING ON
FOR 'PRONOUNCEMENT OF ORDER' THIS DAY, THE COURT MADE THE
FOLLOWING:-
ORDER
The relief sought for in C.A. No.229/2020 is as under:
"WHEREFORE, for all the reasons stated above among
other things and in the peculiar facts and circumstances of
the case, the applicants pending decision on revival of the
Company, pray, this Hon'ble Court be pleased to pass an
order/direction to the respondents herein:
(a) for payment of difference of Ex-gratia increased by
100% computed on the existing pay-scale of the
employees under modified / revised Voluntary Retirement
Scheme, notified by the Government of India, Department
of Public Enterprises, vide OFFICE MEMORANDUM No.
2(32)/ 97-DPE (WC) / GL-L iv dated 06-11-2001
(ANNEXURE-A) in respect of officers / executives covered
under Central Government pay-scale at 01-01-1986 level
and officers/ employees covered under Industrial Pay-scale
at 01-01-1989 level which falls nearer to 01-01-1987 level,
who are on the rolls of the company as on 28-02-2001 and
paid special terminal benefit package after closure of
B.G.M.L. undertaking with effect from 01-03-2001.
(b) To pass such other order/s as deemed fit by this
Hon'ble Court in the interest of justice and equity."
2. The relief sought for in W.P. No.973/2007 is as under:
"WHEREFORE, the Petitioner respectfully prays that this
Hon'ble Court may be pleased to call for the entire records
of the case which culminated in the issue of the
Government Order dated 7/8.8.2006 produced as
ANNEXURE 'L' and grant the Petitioner the following reliefs:
(a) Issue a writ of certiorari or any other appropriate writ
or order quashing that portion of the order bearing
No.10(16)/2002-Met.II(G) dated 7/8.8.2006 issued by the
Government of India, Ministry of Mines, a true copy of
which has been produced as ANNEXURE 'L' mentioned in
clause (b) of para 2(iii) stating that "the Forum will be
asked to pay the amount so determined to the Government
of India before the assets can be transferred to them. In
return for the above mentioned purchase preference, the
society/its company will, firstly, undertake to pay to the
employees, in addition to the sale value paid to the
Government, the difference between the STBP and the VRS
of 6.11.2001", as the said clause is arbitrary, capricious,
irrational and unjust and, hence, violative of Articles 14, 16
and 21 of the Constitution of India and the basic principles
of jurisprudence pertaining to "master and servant" and
also violative of chapter V B of the Industrial disputes Act
1947."
(b) Issue a writ of mandamus or any other appropriate writ
or order directing the Government of India to pay to the
workmen/employees of BGML the benefits of Revised VRS
to which they are entitled as per the Official Memorandum
bearing No.2(32)/97- DPF(EC)/GL-LVI dated 6.11.2001
issued by the Government of India, Ministry of Heavy
Industries and Public Enterprise, Department of Public
Enterprises, a true copy of which is produced as ANNEXURE
'J' with interest at 12% per annum and other statutory
benefits to which they are entitled;
(c) Direct the contesting Respondents to pay the Petitioner
costs of these proceedings, and
(d) Pass such other order or orders as this Hon'ble Court
may be pleased to pass in the circumstances of the case to
meet the ends of justice."
3. The first applicant in Company Application is the
association of ex-employees of Bharat Gold Mines Ltd.,1 and the
other applicants in the application are the former employees of
BGML - Company. The Petitioner in Writ Petition No.973/2007 is
the registered Trade Union of Employees of BGML.
4. The relief sought for in both the said proceedings is for
a direction to the Union of India2 to make payment towards the
difference amount between the Special Terminal Benefit Package3
and the Revised Voluntary Retirement Scheme4 in terms of the
Office Memorandum5 dated 06.11.2001.
5. The factual backdrop leading to the present
application and petition are that the gold mining activities at Kolar
Gold Fields were initially started by the private British Mining
Companies and continued till 1956 when the then Government of
Mysuru promulgated the Gold Mines Acquisition Act and acquired
the gold mines from the said private British Mining Companies.
That in 1962, the mines were transferred to the Central
Government for operations as a department undertaking under
Hereinafter referred to as 'BGML/Company
Hereinafter referred to as 'UOI/GOI'
Hereinafter referred to as 'STBP'
Hereinafter referred to as 'VRS'
Hereinafter referred to as 'OM'
the Ministry of Finance. The BGML was incorporated in the year
1972 under the administrative control of the Department of Mines,
UOI. BGML was engaged in mining and production of Gold mainly
in Kolar Gold Field. BGML was declared as a 'sick' industry under
the provisions of The Sick Industrial Companies (Special
Provisions) Act, 19856 by the Board for Industrial and Financial
Reconstruction7 vide order dated 12.06.2000 and the same was
referred to this Court under Section 22A of the SIC Act. The said
order was upheld by the Appellate Authority under Section 22 of
the SIC Act and the reference made to this Court was registered
as C.A. No.180/2000. The GOI on 01.03.2001 issued an order
under Section 25-O of the Industrial Disputes Act, 19478 and
ordered for closure of BGML, which order was challenged before
this Court in W.P. No.154/2001 and connected matters.
6. This Court, vide order dated 16.03.2001 allowed the
Writ Petitions, quashed the closure order dated 01.03.2001 and
remanded the matter to the BIFR to workout means of revival of
BGML. The said order dated 16.3.2001 was the subject matter of
challenge in WA Nos.1747-1757/2001. A Division Bench of this
Hereinafter referred to as ' SIC Act'
Hereinafter referred to as 'BIFR'
Hereinafter referred to as I.D. Act
Court by judgment dated 26.09.2003 passed in W.A. Nos.1747-
57/2001 set aside the order of the learned Single Judge, upheld
the opinion of the BIFR as well as the order dated 01.03.2001
passed under Section 25-O of the ID Act and recommended
certain relief measures to the employees.
7. In the meanwhile, the GOI issued OM dated
06.11.2001 offering modified/revised VRS.
8. The employees of the company were issued
termination orders which was the subject matter of challenge in
various writ petitions. A learned Single Judge vide order dated
17.08.2001 quashed the orders of termination issued by the
company. Being aggrieved, the company preferred Writ Appeal
Nos.5621-5719/2001. A Division Bench of this Court allowed the
writ appeals, set aside the order dated 17.08.2001 passed by the
learned Single Judge and dismissed the writ petitions. However, it
was also held by the Division Bench that the observations made
by another Division Bench in W.A. Nos.1747-1757/2001 should
be treated as directions.
9. Thereafter, consequent deliberations with the
workmen's representative, the management of the company,
Government of Karnataka9 and UOI regarding revival of the
company, a communication dated 07/08.08.2006 was issued by
the GOI, Ministry of Mines to the Managing Director of the
Company, wherein it was communicated that a decision to revive
the company had been taken and a certain course of action was
decided with respect to the company.
10. C.A. No.993/2006 was filed by the Company seeking
permission of this Court to implement the proposal of the GOI in
terms of the communication dated 7/8.8.2006. This Court vide
order dated 15.12.2006 directed the company to make payment
of the STBP to the employees within a certain time frame.
Thereafter, this Court vide order dated 03.07.2009, disposed of
the said application by issuing certain directions. The said order
dated 03.07.2009 was the subject matter of challenge in OSA
No.32/2009 and other connected matters. A Division Bench of this
Court vide order dated 01.02.2010 allowed the said appeal and
set aside the order dated 3.7.2009 passed in C.A. No.993/2006.
The judgment dated 01.02.2010, passed by the Division Bench
was the subject matter of challenge in SLP (Civil) No.10023/2011.
The Hon'ble Supreme Court by its order dated 09.07.2013
Hereinafter referred to as 'GOK'
disposed of the special leave petition by permitting the UOI to
proceed with the global tender in accordance with the
communication dated 7/8.8.2006 which was said to have been
taken pursuant to a decision of the Union Cabinet.
11. WP.No.973/2007 is filed by the association of
workmen/employees of BGML which is a registered Trade Union
challenging the communication dated 7/8.8.2006 and for a
direction to the GOI to pay the workmen/employees of BGML the
benefits of the revised VRS in terms of the OM dated 6.11.2001
and for other reliefs. C.A. No.276/2016 is filed by the employees
Association of the company for payment of the revised VRS
amount in terms of the OM dated 6.11.2001 and for other reliefs.
Subsequently, C.A. No.229/2020 has been filed by the association
of ex-employees of the company. That by order dated 12.8.2001
passed in COP.No.180/2000 c/w WP No.973/2007, it was ordered
that WP No.973/2007 and CA No.229/2020 are to be disposed of
together.
12. The submissions of Sri Sanna Maligai, learned counsel
for the applicant in C.A.No.229/2020, Sri Subramanya Bhat,
learned counsel for the petitioner in WP No.973/2007, Sri
T.Rajaram, learned counsel for the company, Sri Madhukar
Deshpande, learned counsel for the Union of India and Sri Clifton
D Rozario, learned Amicus Curiae, have been heard in detail.
Learned counsel for the parties have also filed their synopsis of
submissions.
13. Learned counsels appearing for the he applicant in the
company application and the petitioner in the writ petition have
contended that the employees of the company are entitled to the
revised VRS in terms of the OM dated 6.11.2001 having regard to
the direction issued by the Division Bench of this Court. Hence,
they seek for allowing of the application and the writ petition and
granting of the reliefs sought for.
14. Per contra, learned counsel for the company and the
UOI would contend that having regard to the fact that the order
under Section 25-O of the ID Act was passed on 01.03.2001 and
the revised VRS has been ordered vide OM dated 06.11.2001,
which is subsequent to the closure of the company, the employees
of the company are not entitled to the revised VRS in terms of the
OM dated 6.11.2001. It is further submitted by the UOI that it
has taken all possible steps including transferring of land at a
nominal cost as well as payment of the STBP and hence, any
further payment should await further action in terms of the
decision of the Union Cabinet to float a global tender with regard
to the assets of the company.
15. Learned Amicus Curiae has placed on record the
relevant material.
16. Before the contentions of the learned counsel for the
parties are considered, it is relevant to specifically note certain
aspects leading up to the present proceedings.
17. After the company was declared as a sick industry by
the BIFR vide its order dated 12.6.2000 and the same was
referred to this Court which was registered as CA No.180/2000,
the GOI issued the order dated 29.1.2001 for closure of the
company under Section 25-O of the ID Act. The relevant portions
of the said order dated 29.1.2001 are extracted hereinbelow for
ready reference:
"Among the reasons given by the management for
closure of these mines, were high cost of mining as a
result of the depth of these mines, high tariff rates of
electricity, depletion of economic ore reserves, outdated
machinery, reduction in gold prices (both domestic and
overseas) and liberal import policy for gold. The
management also, mentioned that efforts were made to
revive the mines by inviting joint venture partners/co-
promoters. However, for technical and financial reasons,
rehabilitation was not possible. The workers are being
given the option of the Voluntary Separation Scheme
(VSS). These not opting for this scheme would be
retrenched under the Industrial Disputes Act, 1947.
The representatives of workers, on the other hand, were
of the opinion that BGML should be closed down as it
was the only Company mining gold in the country.
According to them operations at the mines have become
uneconomical because market price has not been paid
to the company for producing gold and adequate finance
had not been provided for revival/modernization of
these mines. They were of the view that the prospect of
opening shallow mines in the area had not been fully
explored and that there was scope of recovering gold
from tailings. They informed that the VSS package is
not attractive since wages have not been revised since
1992. The workmen and their families would, therefore,
be severely affected due to joblessness as a result of
closure of the company.
Taking into account the submissions made by both the
management as well as the representatives of union, it
appears that continuation of operations in the BGML
mines is not viable and would only add to the financial
burden of the Government. The mines have not been
producing any gold since 1st April 2000 and around
4000 workers are being paid idle wages. The possibility
of resuming operations is minimal given the high cost of
mining. The option of mining gold from shallow depths
at lower costs has also been explored by experts but no
domestic or foreign partners are willing to make
requisite investments for development of these mines .
Having regard to the genuineness and adequacy of
reasons stated by the company and also keeping in view
the interest of the general public and all other relevant
factors, permission is hereby granted for closure of
BGML w.e.f. 01.03.2001. The VSS scheme would be
operated in accordance with the directions of the
Court."
(emphasis supplied)
18. It is necessary to note that vide OM dated 5.5.2000
the GOI introduced a revised VRS. The relevant portions of the
same are extracted herein below for ready reference:
"The Government had announced a Voluntary
Retirement Scheme (VRS) vide OM No. 2(36)/86-
BPE(WC) dated 5th October, 1988. Government have
revised the scheme to make it more efficacious having
regard to both, the interests of the employees and the
need to enable Public Sector Enterprises (PSEs) to
rationalize their surplus manpower.
2. Enterprises which are financially sound and can
sustain a scheme of VRS on their own surplus resources
may devise and implement variants of the existing VRS
cited in para 1 above. However, in no case shall the
compensation exceed 60 days salary for each completed
year of service or the salary for the number of months
service left, whichever is less. Salary for the purpose of
VRS shall consist of basic pay and DA only and no other
element.
3. Enterprises that make marginal profits or loss-making
enterprises may adopt the revised scheme of VRS which
is modelled on the Scheme that exists in the State of
Gujarat. ......
4........
5. For sick and unviable units, the VSS package of
Department of Heavy Industry will be adopted. As a
corollary, the VSS scheme may be modelled on Gujarat
pattern and be made applicable as in para 3 above.
However, employees would have to opt for VSS within 3
months from the date of offer failing which they would
be eligible only for retrenchment compensation. .....
6.The compensation under VRS/VSS will be in addition
to terminal benefits.
7.Employees of industrial cooperatives with Government
equity participation and who are not members of the
cooperative will also be covered under the VRS.
8. Budgetary support will be provided to the marginally
profit or loss making enterprises and to the sick
enterprises for implementing VRS only in case bank
credit is not available. The funds would normally be
made available at the beginning of the financial year.
However, before seeking budgetary support in cases of
unviable/sick PSUs other sources of funding should be
fully explored such as asset securitisation and bank
loans against Government guarantee for funding
VRS/VSS."
(emphasis supplied)
19. The company issued a Circular dated 8.12.2000
introducing a Voluntary Separation Scheme10 in the company.
The relevant portion of the said Circular is extracted herein below
for ready reference:
"As per the directives of the GOI vide letter no.
6(1)/97- met II (G) dated 31.12.99, the Company
earlier, introduced Voluntary Retirement Scheme to all
the employees of the Company, vide Ref no.
PD:/OE/VRS/99-2000/12 dated 6.1.2000 as per the
VRS Package approved for Public Sector Units of heavy
industry which was in force upto 31.3.2000.
The Department of Public Enterprise have issued an
OM No. 2(32) /97-DPE (WC) dated the 5th May, 2000
in which it has been stipulated that for sick and
unviable units, the Voluntary Separation Scheme
(VSS) Package of Department of Heavy Industry
(Heavy Industry Package) will be adopted. As a
corollary, the VSS Scheme may be modeled on the
scheme that exist in the State of Gujarat (Gujarat
Package).
In accordance with the above, now the Government of
India, Ministry of Mines, vide letter no. 6(7)/ 2000-
met. II (G) dated 27.11.2000 have decided that
Voluntary Separation Scheme, may be offered to all
the employees of B.G.M.L., excluding the cases of
those employees who have already opted for VRS
under the earlier Scheme (S), which will be in force for
a period of one month only from the date of offer.
Under this scheme employees are given option of the
Hereinafter referred to as the 'VSS'
Heavy Industry Package or the Gujarat package with
the rider that no change in choice once exercised will
be permitted. ....."
(emphasis supplied)
19.1. The details of the Heavy Industry Package and
Gujarat package have been incorporated in the said circular and
thereafter, it is stated as follows:
"Note:
1. The compensation under the Voluntary
Separation Scheme will be in addition to terminal
benefits.
2) Voluntary Separation Scheme will be
applicable to the permanent employees, Badli
workers, Work charged established and
Temporary workers but not to the casual workers.
This scheme will be in force from 11.12.2000 to
10.1.2001 only.
The employees may avail the benefit offered now
by the Government of India on or before
10.1.2001 under the said Scheme. The prescribed
application form for opting Voluntary Separation
Scheme is available with the respective Heads of
Departments. "
(emphasis supplied)
20. The GOI, vide its OM dated 6.11.2001 issued a
modification in the revised VRS. The same is extracted
hereinbelow for ready reference:
"The Government have decided further to modify,
with immediate effect, the Revised voluntary
Retirement Scheme for Central PSUs introduced
vide this Department's O.M. of even number
dated 5th May, 2000 as under:-
a) Ex-gratia payment in respect of employees on
pay scales at 1.1.87 and 1.1.92 levels, computed
on their existing pay scales in accordance with
the extant scheme, shall be increased by 100%
and 50% respectively.
b) The option of the Gujarat or the DHI pattern
shall be available to the employees of marginally
profit/loss making, as well as sick and unviable
units.
c) Under the Gujarat pattern, the salary for
VRS/VSS shall be calculated on the basis of 30
days in a month and not 26 days. Consequently,
the method of calculation of ex-gratia for VRS
and VSS shall be similar.
d) Once an employee avails himself of voluntary
retirement from a PSU, he shall not be allowed to
take up employment in another PSU. If he desires
to do so, he shall have to return the VRS
compensation received by him to the PSU
concerned. Where the compensation was paid out
of a Government grant, the PSU concerned shall
remit the refunded amount to the Government.
In case the PSU is already closed/merged, the
VRS compensation shall be returned directly to
the Government.
2. All other provisions of the DPE guidelines dated
5.5.2000 are to continue.
3. The clarifications given in the DPE's O.M. of
even number dated 8th December, 2000 stand
modified in consequence of the foregoing.
4. The employees, who have already been
released by the PSUs before the date of issue of
this O.M., shall not be covered under the modified
scheme.
5. The administrative Ministries/Departments are
required to bring the modified VRS/VSS to the
notice of the public enterprises under their
administrative control and ensure strict
compliance with the provisions of the scheme."
(emphasis supplied)
21. A Division Bench of this Court in WA Nos.1747-
1757/2001 while considering a challenge made to the order dated
16.3.2001 passed under Section 25-O of the ID Act by the UOI,
held that the order of the BIFR and the appellate authority
declaring that the company as sick was just and proper and also
held that the order dated 29.1.2001 passed by the GOI under
Section 25-O of the ID Act is just and proper. Further, the
Division Bench noticed that the proposals for settlement were
given by the association and the employees of the company and
the same were considered by the GOI, which had made certain
offers as noticed in para 41 of the said order dated 26.9.2003.
Thereafter, the submissions were made by the employees
association with regard to the VRS package offered vide the OM
dated 6.11.2001 as well as the stand of the UOI that the OM
dated 6.11.2001 is not intended to apply to the employees of the
company. The Division Bench has considered the same and has
recorded a finding that the OM dated 6.11.2001 applies to the
employees of the company. The said aspect of the matter is
forthcoming from paras 42 to 45 of the said order dated
26.9.2003 which are extracted hereinbelow for ready reference:
"42. Learned counsel for the Employees unions
were not agreeable for the said proposals. They
pointed out that the Central Government had
brought up a modified VRS package on 6-11-
2001 and what was offered to the workers of
BGML was far less than what was contained in OM
dated 6-11-2001. They submitted that they are
still getting the pay of 1987 pay scales and they
did not have the benefit of any revision of pay
scales after 1987. They, therefore, submitted that
the government should at least extend the
minimum benefits as per the VRS package
contained in Official Memorandum dated 6-11-
2001 instead of pre-6-11-2001 package and also
convey title to their houses in their occupation at
a concessional rate of about Rs. 1,000/- per
house and corresponding higher price to officers.
43. Learned Additional Solicitor General
submitted that the offer made was on the basis of
the cabinet decision, after taking note of all
relevant aspects. He however submitted that he
would put forth the request of the employees
unions to the Central Government again. He also
submitted that OM dated 6-11-2001 was not
intended to apply to employees of BGML and that
it does not contemplate giving away houses at a
concessional rate or free of cost. When the
matter came up subsequently on 5-9-2002,
learned Additional Solicitor General submitted
that the matter was reconsidered by the Cabinet
and decided not to give any further concession. It
is thereafter, the matter was heard on merits.
44. ........ But what is relevant is the OM dated
6-11-2001, which modified the VRS scheme for
Central Public Sector undertakings, which in far
more advantageous to employees. It
contemplates 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.
45. A careful reading of the said official
memorandum dated 6-11-2001 shows that the
same is applicable to all central public sector
undertakings. The said official memorandum does
not appear to restrict the applicability thereof to
any particular PSU. Having regard to the peculiar
facts and circumstances of this case, we do not
see why the central government should not
extend the benefit of the modified scheme
contained in OM dated 6-11-2001 to the
employees of the BGML, who have not received
any revision in the pay since 1987. Their future is
bleak. Their proposals for revival/rehabilitation of
the company have been rejected."
(emphasis supplied)
21.1. Thereafter, the Division Bench ordered has
follows:
"46. On the peculiar facts and circumstances of
the case, we commend to the Central
Government the following measures:
(i) To extend to the employees of BGML, the
benefit of VRS as already offered with the further
modification contained in the Official
Memorandum dated 6-11-2001.
(ii) To transfer/convey the Quarters/houses which
have been allotted to the employees of BGML at a
concessional price, say at the rate of Rs.10/- per
sq.ft. where the site area of which is below 1000
sq.ft, Rs.20/- per sq.ft where the sital area is
more than 1000 sq.ft but less than 3000 sq.ft.
and Rs 30/- per square foot were sital area is
more than 3000 sqft., Having regard to the fact
that the structures are very old and most of them
in a dilapidated condition and having regard to
the fact that the houses are being offered under a
retirement package at a concessional rate nothing
may be charged towards the value of structures.
The benefit of transferring houses should be
extended also to those who have already
accepted the VRS.
(iii) To take appropriate steps to enable such of
the employees who have accepted VRS scheme to
form an Employees co-operative by providing
them appropriate land and such machinery and
equipment as it can spare so that they can take
up projects wing their specialised knowledge and
experience.
(iv) To allot the excess lands held by BGML needy
ex-employees at reasonable rates to help them
rehabilitate themselves.
(v) To give the employees another interim relief
of ` 5,000/- to each employee within two months
to tide over their difficulties.
47. We have made the above only as
recommendations and not as directions. When
virtually a town is closed as a result of closure of
BGML, special provisions, are necessary and we
do not hope that the Central Government will do
justice to the poor and suffering employees, as
expeditiously as possible. We make it clear that
Central Government may at its discretion modify
the recommendations. The Central Government
may also consider any fresh proposals for revival
if it so deems fit. Be that as it may."
(emphasis supplied)
22. Another Division Bench of this Court, vide judgment
19.7.2004 passed in WA Nos.5621-5719/2001 while considering a
challenge to the termination orders issued to the employees of the
company, which was quashed by the learned Single Judge, has
upheld the orders of termination. However, it was observed as
under:
"16.......Apart from this, we are now told that after
certain recommendations were made by the
Division Bench of this Court in Writ Appeal Nos.
1747 to 1757/2001 there has been some
consideration at the appropriate stage to grant
certain benefits to the employees and Officers
which will certainly take care of their interest.
17. Therefore, having given our anxious
consideration to the entire matter in issue, we
find that the impugned order made by the
learned Single Judge cannot be sustained in law.
But, at the same time, having regard to the
facts and circumstances of this case we are
persuaded to make certain observations. We are
inclined to observe that notwithstanding the order
of termination having been upheld by this Court
in the Appeals, the respondents herein would be
entitled to opt VRS/VSS schemes or any other
schemes that may be sponsored by the Central
Government keeping in view the interest of the
employees and Officers. The said observations,
we have been persuaded to make in the light of
the order passed by another division bench of this
Court in Writ Appeal Nos.1747 to 1757/2002. In
our view, the said observations which should be
treated as directions by the concerned authorities
would sufficiently protect the interest of the
respondents/Officers and employees.
18. In the result, therefore, all these Writ Appeals
filed by the Appellants are hereby allowed. The
impugned order of the learned Single Judge dated
17-8-2001 in Writ Petition Nos. 3596/3690/2001
C/w 2005-07/2001 is hereby set aside and the
said Writ Petitions are dismissed but, without any
order as to costs. It is however made clear that in
view of our observations in the body of the
Judgment, notwithstanding the present order, the
respondents herein would be entitled to opt for
the VRS/VSS schemes or any other scheme that
may be announced by the Central Government
which are beneficial in the interest of the
employees and Officers. With these observations
and directions these Writ Appeals succeed. "
(emphasis supplied)
23. The GOI, vide its communication dated 7/8.8.2006
addressed to the company has communicated as follows:
"2. In this regard I am directed to state that the
Government has considered the above
recommendations of the Hon'ble High Court and
proposes, inter-alia the following course of action
in respect of BGML:-
(i) To reopen the STBP, already approved by the
cabinet earlier, to the employees of BGML for
another period, of one month from the date a
opening, involving an expenditure of Rs.72.45
crores.
(ii) To sell houses of various categories to the ex-
employees at the rate suggested by the Hon'ble
High Court.
(iii) To act upon the proposal received by
Government from the Bharat Gold Mines
Employees' Supervisors' and Officers' United
Forum (hereafter referred to as "the Forum") as
detailed below;
(a) Main features of Proposal;
The Forum proposes to establish, in the
first instance, a cooperative society of the
employees, supervisors and officers of BGML. The
society in turn will float a company in association
with a technical and financial collaborator. This
company will acquire the assets of BGML and
operate the mines. The Forum has desired that
the Government should sell assets of BGML to the
said company of the said society for a sum of
Rs.150 crores.
(b) The Government has considered the proposal
of the Forum and is of the view that the proposal
of the Employees Forum for the transfer of assets
of BGML to the society/society's company can
only be considered on the basis of the market
value of such assets. An internal assessment of
the value of assets has been made but the said
valuation is only indicative in nature and does not
bring out the market value. Therefore, the
Government proposes to invite global bids for the
assets of the company and make a counter offer
to the society/society's company which will either
be the highest bid received or the value
assessment made by the in-house committee (to
be re-assessed again at the time of transfer),
whichever is higher. The Forum will be asked to
pay the amount so determined to the
Government of India before the assets can be
transferred to them. In return for the above
mentioned purchase preference, the society/its
company will, firstly, undertake to pay to the
employees, in addition to the sale value paid to
the Government, the difference between the
STBP and the VRS of 6.11.2001; and secondly,
employ on priority the erstwhile employees of
BGML.
(c) The following procedure will be followed.
The Ministry of Mines /BGML will engage a
consultant - adviser after following due
procedure. An Inter Ministerial Group
(IMG), under the Chairmanship of
Secretary(Mines) will be set up to oversee
the tendering process and obtain technical,
financial and legal advice whenever
necessary.
The IMG will determine the highest bid and
make the counter offer as mentioned
above. In case, the Forum's
society/company accepts the offer of the
Government to purchase the assets as
proposed above the assets will be sold to
them after getting all the requisite
approvals as mentioned below. If not, then
the assets will be sold to the highest bidder
after getting similar approvals. The IMG
will make its recommendation to a
Committee of Secretaries on the above
lines. Thereafter, the matter will be
submitted to the Cabinet with the
recommendations of the committee of
Secretaries for approval of the final
disposal of the assets."
(emphasis supplied)
24. CA No.993/2006 has been filed by the company to
permit the applicant to implement the proposal of the GOI dated
6/7.8.2006. This Court, vide order dated 15.12.2006 passed in CA
No.993/2006 has held as follows:
"1. This application is filed by the Bharath Gold Mines
Limited seeking permission of the Court to implement
the special Terminal Benefit package evolved by the
Govt. of India, to settle the claim of the employees of
the BGML, in lieu of the voluntary retirement scheme
earlier offered by the Govt. of India.
....
12. Considering the grievance of the employees of
BGML, since the last payment made to them in October
2003, as the Government of India is willing to settle the
claim of the employees under Special Terminal Benefit
Package and a sum of Rs.72.45 Crores would be paid to
them on or before 31st March 2007, to see that these
employees shall live till they receive the voluntarily
retirement benefit, the Additional Solicitor General, shall
make his submission on the next date of hearing
whether Govt. of India can make interim payment of a
substantial amount to each of the employees subject to
final adjustment.
13. In the circumstances, C.A. is disposed of granting
permission for the Govt. of India to invite global tender
to ascertain the actual market value of the assets of the
BGML in order to consider the revival of the BGML either
by the Forum or by any other authority and Govt. of
India shall make its submissions in regard to the
amount payable to each of the employees as an Interim
measure subject to final accounts."
24.1. It is further relevant to note that this Court, vide order
dated 12.1.2007 while considering CA No.993/2006 ordered as
follows:
"7. Learned counsel appearing for the respondents
submitted that many of the employees are not willing to
opt for STBP since the same is not in terms of the order
passed by this Court in Writ Appeal Nos. 1747-
1757/2001. According to him, the Scheme offered by
the Government of India is not beneficial to these
employees. If the employees are not willing to opt for
STBP, this Court cannot consider the request of the
Government of India to make payment in lumpsum.
8. According to Sri. Mohan Parasaran, Additional
Solicitor General, the Government of India has already
received many applications from the employees of BGML
to opt for STBP. Therefore, this Court is of the opinion
that it is for the employees to opt STBP or not.
9. On the last date of hearing, this Court had directed
the Government of India to consider to make an adhoc
payment by way of interim measure, subject to final
adjustments since these employees are without any
employment and having no income of their own for their
livelihood. This Court, on 26.9.2003 while disposing of
the Writ Appeal Nos. 1747-1757/2001 had directed the
Government of India to make an adhoc payment of
Rs.5,000/- by way of an interim relief within two
months from the date of the order to tide over the
difficulties from 2003 onwards, but thereafter the
employees have not received any payment from the
Government of India towards settlement of their claim.
In the circumstances, this Court is of the opinion that in
order to tide over the difficulties of the
employees, Government of India should be directed to
make payment in a sum of Rs.15,000/- (Rupees fifteen
thousand only) to each of the employees within four
weeks from today and such payment shall be subject to
the final adjustment. "
24.2. This Court, vide order dated 15.2.2007 passed in
CA No.993/2006 has ordered as follows:-
"The Government of India is also willing to settle
the terminal benefits to the persons who have applied
under the scheme evolved by the Government of India as
STBP on or before 30.4.2007. In the circumstances, the
matter is adjourned to 26.6.2007 to submit the status
report. At this stage, Sri Subba Rao, learned senior
counsel submits that any amount that may be received by
the employees under the STBP shall be without prejudice
to their rights since a portion of the Special Terminal
Benefit Package is questioned by the employees by filing
a separate writ petition. It is also brought to my notice
that an interim order has been passed in the aforesaid
writ petition that the terminal benefits payable by the
Government of India would be without prejudice to the
rights of the petitioners or the ex-employees of the BGML.
Therefore there is no necessity for this Court to pass any
order on the submissions of Mr. Subba Rao. "
24.3. Thereafter, this Court considering CA No.993/2006
with regard to the various aspects, inter alia, regarding the future
of the company, vide order dated 3.7.2009 has noted as follows:
"In this application the applicant-BGML has sought
permission to implement the proposal of the Union of
India dated 7.8.2006, pursuant to the Division Bench
judgment in W.A.No.1747-1757/2001 dated 26.9.2003
and particularly the documents pertaining to global bid
which have been filed in two volumes."
24.4. Further, this Court while considering the contentions
of the company that the Company Court did not have jurisdiction
to deal with the aspect of revival of the company during the
course of winding up proceedings held that it is the Company
Court that has jurisdiction to consider the question of revival in
the context of reference made by the BIFR for winding up of a sick
industrial unit. The Court further considered the approval to be
granted to the document submitted by the company calling for
global tenders and issued various directions by considering the bid
documents. This Court also suggested certain
amendments/changes to the bid documents.
25. The order dated 3.7.2009 passed in CA No.993/2006
was challenged before the Division Bench of this Court in OSA
Nos.32, 34, 39 and 40 of 2009. The Division Bench, vide its
judgment dated 1.2.2010 allowed the said appeals and set aside
the order passed in CA No.993/2006. The order of the Division
Bench was challenged by the UOI in SLP (C) No.10023/2011. The
Hon'ble Supreme Court by its order dated 9.7.2013 disposed of
the said petitions and passed the following orders:
"8. During the hearing of these matters, submissions
were made on behalf of the Union of India, as well as on
behalf of the workmen represented by different
associations and organisations and also on behalf of the
BEML. While all the parties were agreeable to an order
that a global tender should be conducted, BEML
represented by Mr. Shekhar, learned senior advocate,
also had no objection to the same being allowed,
subject, however, to the Cabinet decision regarding the
portion which had been sub-let to BEML being included
in the tender documents.
9. Having regard to the above, we dispose of all these
Special Leave Petitions, by setting aside the order of the
Division Bench of the High Court impugned in the
Special Leave Petitions and permit the Union of India to
proceed with the global tender in accordance with the
decision taken by the Cabinet, as extracted hereinabove
and indicating the fact that a lease had been granted in
favour of BGML, who had in turn sub-let a portion of the
demised plot to BEML, which sub-lease is coming to an
end on 28th April, 2014.
10. we make it clear that we have not gone into the
merits of such questions in these matters and the
Special Leave Petitions are disposed of, accordingly."
26. It is forthcoming from the aforementioned that a VRS
scheme was initially introduced by the OM dated 5.5.2000 for
workmen of all PSUs. Thereafter, by a Circular dated 8.12.2000,
the VSS scheme was introduced in respect of the workmen and
employees of the company. The OM dated 6.11.2001 is in
modification of the OM dated 5.5.2000. The VSS scheme in terms
of the Circular dated 8.12.2000 is also known as STBP. In the
order dated 29.1.2001, passed under Section 25-O of the ID Act,
it is specifically stipulated that the VSS scheme would be operated
in accordance with the directions of the Court.
27. It is relevant to state here that it was the stand of the
employees that the STBP in terms of the VSS that was offered to
the employees of the company in terms of the circular dated
8.12.2000 was far less than the modified VRS in terms of the OM
dated 6.11.2001 as they did not have the benefit of any revision
of pay scales after 1987. The said contention was considered by
the Division Bench while passing the order dated 26.9.2003 in
WA.Nos.1747-1757/2001.
28. The recommendations made in the order of the
Division Bench dated 26.9.2003 passed in WA Nos.1747-
1757/2001 have been ordered to be treated as directions by the
Division Bench vide its order dated 19.7.2004 passed in WA
Nos.5621-5719/2001. Thereafter, the GOI vide its
communication dated 7/8.8.2006 has proposed a course of action,
wherein various measures have been stipulated, inter alia:
i) to re-open the STBP for another period of one month
(which the GOI estimated the expenditure as being
`72.45 crores);
ii) to sell the houses to various categories of employees;
iii) to act on the proposal received from the Bharat Gold
Mines Employees' Supervisors' and Officers' United
Forum11.
29. In the said communication dated 7/8.8.2006, while
mentioning regarding the proposal received from the Forum, it
was stipulated that the Government would invite global bids for
the assets of the company and make a counter offer and the
Forum will be asked to pay the amounts so determined by the
Government before the assets could be transferred. With regard
to the payment to be made to the employees, it was specifically
stipulated that the purchasers of the assets of the company will be
directed to undertake to pay the employees the difference
between the STBP and the VRS scheme of 6.11.2001.
30. From the aforementioned communication dated
7/8.8.2006, it is clear that the aspect regarding the entitlement of
the employees of the company to the revised VRS as stipulated in
the OM dated 6.11.2001 was accepted by the GOI and the
stipulation regarding payment of the same to be made by the
purchasers of the assets of the company was merely a mode
regarding the manner in which said payment was required to be
made.
31. A coordinate Bench of this Court, while considering CA
No.993/2006 filed by the company regarding implementation of
the proposal made in the communication dated 7/8.8.2006, vide
its order dated 15.12.2006 had considered the willingness of the
GOI and directed that the payment under the STBP package would
be made on or before 31.3.2007. Subsequently, CA No.993/2006
has been disposed of vide order dated 3.7.2009 which has
culminated in the order dated 9.7.2013 passed by the Hon'ble
Supreme Court, wherein it has been directed that a global tender
will have to be floated for sale of the assets of the company.
32. While M/s Bharat Gold Mines all Employees Industrial
Co-Operative Society, who is the applicant in CA No.275/2016 has
specifically contended that it is entitled to participate and also is
entitled to participate in the global tender with regard to the sale
of assets of the company. However, the decision in the present
Hereinafter referred to as 'Forum'
CA No.229/2020 and WP No.973/2007 is only with regard to the
payment of the benefits to the employees in terms of the revised
VRS scheme as per OM dated 6.11.2001.
33. While it is the vehement contention of the learned
counsel for the UOI that the UOI has taken all possible
steps/measures to eliminate the hardship of the employees of the
company and as also sold houses in which they were residing as
well as paid the STBP which involved an expenditure of `72.45
crores, with regard to the entitlement of the employees to the
revised VRS in terms of the OM dated 6.11.2001, it is contended
that the said aspect has to be considered along with the sale of
the assets of the company, which is required to be done by the
UOI as has been noticed in the order of the Hon'ble Supreme
Court dated 9.7.2013. It is relevant to note that the decision of
the UOI with regard to the calling for global tenders in respect of
the assets of the company is forthcoming from the communication
dated 7/8.8.2006. The Hon'ble Supreme Court has, vide its order
dated 9.7.2013 has directed that the said course of action be
proceed with. However, despite a passage of more than a
decade, little progress has been achieved on the said front.
34. As noticed above, the entitlement of the workmen for
payment of the revised VRS in terms of the OM dated 6.7.2001
has attained finality, inasmuch as the recommendations made by
the Division Bench of this Court in the judgment dated 26.9.2003
passed in WA Nos.1747-1757/2001 has been ordered to be
treated as directions by another Division Bench vide its judgment
dated 19.7.2004 passed in WA Nos.5621-5719/2001. The
communication dated 7/8.8.2006 issued by the GOI also
recommends the said aspect of the matter as has already been
noticed hereinabove. It is further relevant to note that in the
closure order dated 29.1.2001 it is specifically stipulated that the
VSS scheme would be operated in accordance with the directions
of the Court.
35. Although, it is the vehement contention on behalf of
the company and the UOI that there exists no jural relationship
between the employee/workmen and the company and the
decision regarding payment is a policy decision and this Court
cannot exercise equity jurisdiction while adjudicating the present
proceedings, the said contentions are ex facie untenable having
regard to the specific directions of the Division Bench of this Court
as noticed above as well as the admitted position that the revised
VRS in terms of the OM dated 6.11.2001 is required to be paid.
36. While it is the contention of the UOI that the holder of
the assets of the company will be liable to settle all the money
and no further liability could be saddled on the UOI, it is
necessary to note that the company being a Government
undertaking, the decision with regard to the assets of the
company is required to be implemented in terms of the decision of
the UOI. However, pending implementation of the decision of the
UOI, it is expedient that the benefits payable to the employees of
the company with regard to the revised VRS in terms of the OM
dated 6.11.2001 be paid by the UOI with liberty to the UOI to
factor the recovery of the said amounts when the process
regarding the global tender with regard to the assets of the
company is taken in terms of the decision of the Union Cabinet or
any other mode that is decided to be undertaken.
37. Having regard to the discussion made above, CA
No.229/2020 and WP.No.973/2007 are required to be favourabley
considered and are accordingly allowed. The said revised VRS in
terms of the OM dated 6.11.2001 shall be paid by the GOI/UOI to
the workmen/employees of the company, who are on the rolls of
the company immediately prior to the issuance of the closure
order under Section 25-O of the ID Act i.e., as on 28.2.2001. The
said payment will be required to be made either to the workmen
or their legal representatives after due identification. The
amount/s paid towards STBP be deducted from the amounts that
become payable towards VRS in terms of the OM dated
6.11.2001.
38. Having regard to the inordinate delay in payment of
the VRS, the said amount shall be payable together with interest
at 6% pa., from 6.11.2001 up to the date of payment.
Ordered accordingly.
Sd/-
JUDGE
Bs/nd/-
