D.T.C. RETIRED EMPLOYEES' ASSOCIATION AND ORS. ETC. ETC. v. DELHI TRANSPORT CORPORATION, ETC

Citation: [2001] 3 S.C.R. 559

Court: Supreme Court of India

Bench: S. RAJENDRA BABU, K.G. BALAKRISHNAN

Judgment text

D. T. C. RETIRED EMPLOYEES' ASSOCIATION - AND ORS. ETC. ETC. ~ v. DELHI TRANSPORT CORPORATION, ETC. MAY 8, 2001 [S. RAJENDRA BABU AND K. G. BALAKRISHNAN, JJ. ] ,,/.. Service Law : Delhi Transport Corporation. Pension Scheme, 1992 Clause 6-Pension Scheme-Applicability of-Retired Employees- ... Already availed of benefit of Provident Fund Scheme-Option for Pension Scheme-Provision requiring refund of employers share of Provident Fund and Gratuity with interest-Held, valid-Payment of Gratuity Act, 1972. Clause 9-Pension Scheme-Employees retiring on or after 3. 8. 1981 but before 27. 11. 1992-0J- tion not exercised within the stipulated period- Effect of-Held, not entitled to benefit ofPension Scheme. Respondent-Transport Corporation introduced a pension Scheme on 27. 11. 1992 for its retired employees stipulating that all employees of the Corporation retiring on or after 3. 8. 1981 were to be covered for the purpose of pensionary benefit after exercising their option.

It further provided that the retired employees opting for pension scheme had to refund the employer's share of provident fund and gratuity with interest. Those employees who joined the service of the Corporation with effect from 27. 11. 1992 and thereafter had no option but to be compulsorily covered under the pension scheme. However, due to some financial difficulties, the pension scheme could not be implemented in time. Thus, several writ petitions were filed in the High Court by employees' Association for implementation of the scheme. Writ Petition filed by retired employees challenging the requirement of refund _.. of employer's share of provident fund with interest and refund of gratuity were dismissed by High Court.

Some of the retired employees of the Corporation who had not exercised their option \\ithin the stipulated period filed writ petitions contending that in view of clause 9 of the scheme even if they had not exercised their option they would be deemed to have exercised their option and thus entitled to get pension. The said writ petitions were 560 SUPREME COURT REPORTS [2001] 3 S. C. R. allowed by Single Judge of High Court. However, on appeal, Division Bench ... of High Court held that the employees who retired between 3. 8. 1981 and --I-- 27. 11. 1992 and had not exercised their option within the stipulated period were not entitled to pension under the scheme. Hence the present appeals. On behalf of the appellants it was contended that in view of Clause 9 of the Pension Scheme all the employees of the Corporation who retired on or after 3. 8.

1981 were entitled to get pension under the scheme whether they had exercised their option or not; that the Corporation was not entitled to charge interest on the employer's share of provident fund which was required ~ to be refunded by employees who subsequently wanted to opt for the pension scheme; that the High Court's directio~ to refund the gratuity paid to the employees who had opted for pension scheme is illegal in view of section 4(5) of Payment of Gratuity Act, 1972. ·- Dismissing the appeals, the Court HELD : 1. 1. The Division Bench of the High Court was perfectly justified in holding that the employees who retired on or after 3. 8. 1981 but before 27. 11. 1992 and had not exercised their option within the stipulated period ) ... (a) on his superannuation, or (5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or ) contract with the employer.

" It was argued that in view of sub-clause (5) of Section 4, the employees can receive better terms of gratuity under any award or agreement or contract with the employer and as the provisions contained in the Payment of Gratuity Act itself contemplate better terms of gratuity or other payment than what is -1r permissible under the Act, the present Pension Scheme could only be construed as an award or agreement for better terms. It was argued that in view of that circumstance, the appellants are not liable to refund the gratuity. The argument advanced on behalf of the appellants is without any merit. Sub-clause (5) of Section 4 is an exception to the main section under which gratuity is payble to the employee. In all welfare legislations, the amount payable to the employees or labourers is fixed at the minimum rate \ ~ and there will not be any prohibition for the employer to give b. etter perquisites or amounts than what is fixed under law.

The employer, who is more concerned with industrial peace and better employer-employee relations, can always give benefit to the employees irrespective of any statutory minimum prescribed under law in respect of such reliefs. Therefore, the provision contained in Sub-clause (5) of Section 4 is of no assistance to the appellants. The appellants contended that gratuity is an amount earned by the employee after long service. Therefore, the direction to refund the same is illegal. ~ A gratuity is essentially a retiring benefit payable to a workman which -as per the Statute has been made payable on voluntary resignation as well. Gratuity is a reward for good, efficient and faithful service rendered for a considerable period. A workman gains experience during his tenure of : employment. An experienced workman is capable of securing· another employment with better emoluments. He can also be tempted by other employers with more lucrative salary.

The exit ofan experienced workman would surely r" be a loss for his employer. In British Paints (India) Ltd. v. Workmen, AIR (1966) SC 732, it was held that "a longer minimum in the case of voluntary retirement or resignation makes it probable that the workmen would stick to the company where they are working. That is why gratuity schemes usually provide for a longer minimum in the case of voluntary retirement or resignation. " In Ahmedabad Municipal Corporation Workmen v. Ahmedabad Municipal Corporation, (1955) LAC 155, it was held as under: ( "The fundamental principle in allowing gratuity is that it is a retirement ).. t, benefit for long services, a provision for old age and the trend of the recent authorities as borne out from various awards as well as the decisions of this Tribunal is in favour of double benefit.. ... We are, .

, therefore, of the considered opinion that Provident Fund provides a certain measure of relief only and a portion of that consists of the -t employee's wages, that he or his family would ultimately receive, and that this provision in the present day conditions is wholly insufficient relief and two retirement benefits when the finances of the concern permit ought to be allowed. " The appellants were paid gratuity for their long service, but at the time of receipt of this amount, they were not entitled to get Pension. Now the appellants have opted for Pension. That is a similar relief given to them for _) the longer service rendered by them. The appellants cannot have the benefit ofboth the Pension and Gratuity. The appellants relied on a decision reported in State Govt. Pensioners' Association & Ors. v.

State ofAndhra Pradesh, [1986] 3 SCR 383 and contended for the position that the gratuity is a onetime payment and once it has been paid the transaction is completed and closed and the same cannot be reopened at a later date. It was argued that in view of that decision, the appellants cannot be asked tc refund the same. That is a case where the appellants therein were Govt. employees who retired before April 1, 1978. They contended that Gratuity is a part and parcel of the pension and the same cannot be looked separately from other pensionary x reliefs and therefore they are entitled to the benefit of Gratuity "retrospectively" . at the enhanced rate, as they had been paid Gratuity at the time of retirement at the then prevailing rate. This plea was not accepted and it was held that upward revision of Gratuity takes effect from the specified date with "prospective" effect only. This decision also is of no assistance to the appellants.

Yet another decision relied on by the appellants is Janpad Panchayat & Zila Panchayat Karamchari Sangh & Ors. v. State ofMP. & Ors. , [1998) 8 SCC 568. This decision, though apparently seems to support the appellants' case, does not really do so. In this case, the question arose whether the employees of Panchayat and Zila Pa:ishad were entitled to pension and gratuity. While interpreting the Madhya Pradesh Panchayat Act, 1962, it was observed that Section 75, 147 and 189 of that Act enabled the employees to get gratuity and pension subject to the previous approval of the competent authority. These observations were made in view of the specific provisions contained in the relevant Statutes. Whereas in the present case the appellants ·""'- received gratuity at the time of their exit from the service, subsequently they opted for pension which had never been a part of their service conditions.

It is a condition precedent that in order to get the benefit of the Pension 570 SUPREME COURT RJ}PORTS [2001] 3 S. C. R. Scheme, they have to refund the gratuity received by them. It is neither illegal nor unjust. Learned counsel for the petitioners in the writ petition No. 499 of 2000 contended that the petitioners had initially opted for the Pension Scheme in 1992, but as they were apprehensive regarding DTC's abilitiy to implement the Pension Scheme, they were compelled to opt out of the Pension Scheme. It is submitted that in 1995 only under the threat of contempt notice from this Court, the OTC came forward to implement the Pension Sheme, but no fresh option was given to the employees. It is also argued that OTC had not communicated to all its employees that they were going to implement the Scheme. It is also submitted that Pension is neither a bounty nor a charity. Therefore, all the retired employees should have been given the benefit of the Pension Scheme.

It is true that there was some delay in implementing the Scheme, but all the retired employees were given sufficient opportunity to exercise their option. In paragraph 9 of the counter affidavit filed on behalf of OTC it is stated that as far as the time to fill up pension option form is concerned, the letter dated 23. 11. 1992 conveyed by the Govt. of India, Ministry of Surface Transport, contained that the DTC shall obtain option from its employees x within 30 days from the date of issue of circular. However, the DTC, in fact, extended the time twice, namely, firstly upto 15th January, 1993, and secondly upto 1st Feburary, 1993. Therefore, the retired employees had, in fact, more than. one month's time to exercise their option. We do not think that sufficient time was not given to the employees to exercise their option for the Pension Scheme.

Those employees who had received the benefit of employer's provident fund scheme failed to exercise their option and thus disentitled themselves from getting the Pension benefit. The Pension Scheme was implemented on the basis of certain guidelines; it is not for the Court to interfere with the same. The Division Bench has rightly taken the view that those who had not exercised their option are not entitled to get Pension. The appe~ls and the writ petition are without any merit and these are dismissed without, however, any order as to costs. S. VK. Appeals and Petition dismissed. --