VICE CHAIRMAN AND MANAGING DIRECTOR A.P.S.L.D.C. LTD. AND ANR. v. R. V ARAPRASAD AND ORS

Citation: [2003] SUPP. 1 S.C.R. 226

Court: Supreme Court of India

Bench: SHIVARAJ V. PATIL, ARIJIT PASAYAT

Judgment text

VICE CHAIRMAN AND MANAGING DIRECTOR A. P. S. l. D. C. LTD. AND ANR. v. R. VARAPRASAD AND ORS. MAY 22, 2003 [SHIVARAJ V. PATIL AND ARIJIT PASAYAT, JJ. ] Service law: Voluntary Retirement Scheme: APS! DC Employees Voluntary Retirement Scheme 1995: VRS Ex-gratia and reckoning of eligibility-Cut off date-Calculation of-Held: Is the date feted for accepting application ofthe optee and not the actual date ofrelieving him from service. Notice pay of three months-Entitlement of-Held: Optees of scheme are entitled to notice pay-However, when they continue in service having drawn full salary and allowance beyond stipulated notice period they are not entitled to the notice pay. Voluntary retirement application-Acceptance of-Withdrawal- Maintainability of-Held: Once the application is accepted in terms ofscheme it cannot be withdrawn even if employees apply for withdrawal before they were relieved from services.

Appellant-Corporation issued Voluntary Retirement Scheme (YRS) Phase I for its employees. In terms of the scheme employees were entitled to three months' pay in lieu of notice and if the management took time in accepting the application of the employee and allowed the notice period to lapse or the individual concerned withdrew all salary during the notice period, the employees would not be entitled to the notice period pay as they drew salary during that period. As employees opting for YRS had worked 15 days beyond the cut off date and earned salary for the period, they were given two months and 15 days notice pay in addition to 15 days salary. Appellants issued another YRS (Phase II) and fixed 28. 1. 1998 as cut off date for calculating YRS claims of the employees. Respondent Nos. VICECHAIRMAN AND MANAGING DIR. A. P. S. ID. C LTD. r. R. VARAPRASAD 227 l to 32 and also other employees submitted their option for voluntary retirement which was accepted.

However, State Government took time to provide the funds to pay claims of employee as such the optees were relieved from service on 31. 7. 1998. They were given full salary and allowances up to the date they were relieved including period of notice pay beyond the cut off date but not the notice pay. Aggrieved respondent filed writ petition. High Court allowed the writ petition and directed the appellants to pay three months notice pay treating the date of relief from service as the cut off date and to calculate the terminal benefits of the optees as if they continued in service till 31. 7. 1998 notwithstanding the cut off date fixed. Division Bench upheld the order. Appellants issued VRS Phase III and 31. 10. 1998 was fixed as the cut off date. Respondents-employee W and A filed application seeking voluntary retirement. Appellants accepted the same and also the respondents acknowledged it. Thereafter respondents applied for withdrawal of option.

Respondents then filed writ petiiion seeking direction to continue in service till they attain superannuation. High Court passed an interim order and the respondents continued in service while they were to be relieved from service along with large number of other employees on 31. 7. 1999. High Court then allowed the writ petitions and directed the Corporation to continue their services till their attaining the age of superannuation. It held that these respondents had made the applications for withdrawal before the effective date and they having not accepted the monetary benefits under the VRS, could withdraw their applications opting for VRS. Hence the present appeals.

Appellants-Corporation contended that once the options seeking voluntary retirement were accepted with reference to a cut off date the p terminal benefits to which the employees were entitled could be calculated as on and up to the cut off date and not beyond that period as per the VRS; that the employees continued in service beyond the cut off date as they were not paid the amount due to them as per VRS; that they were paid salary and other allowances even after the cut off date till the date on which they were actually relieved from service; that the High Court was not right in holding that the employees were entitled to get notice pay even though they were continued in service having drawn full salary and allowances beyond the stipulated notice period; and that the High Court was also 11ot justified in directing the Corporation to treat two sets of optees of VRS-Phase I and Phase II, similarly when they were governed by distinct and different sets of guidelines and conditions.

Disposing of the appeals, the Court HELD: I. I. Clause (c) of the APSIDC Employees Voluntary Retirement Scheme, 1995 states that the date of acceptance of the applications of the employees seeking voluntary retirement under the Scheme shall be the date for calculation of VRS ex-gratia, as well as for reckoning eligibility. Clause (i) states that the payments that are due from the Corporation under the Scheme shall be released to the concerned on the date of relieving subject to receipt of funds from the Government. This clause has no bearing as far as the cut off or effective date is concerned for the purpose of calculating the terminal benefits including VRS exgratia and other benefits available under the VRS, to which an employee is entitled. Clauses (c) and (i) are meant to serve different purposes. One is for the purpose of calculation of the benefits in terms of money under the VRS and the other is to see that the employee is not sent out without such payment. [235-C-G) 1. 2.

The payments that are due to be made by the Corporation under the Scheme depends upon the release of the funds by the Government. All employees who accept VRS could be relieved at a time or batch by batch depending on availability of funds. If some time is taken in this process even after acceptance of the voluntary retirement application, an employe . , from 1. 10. 1997. In this appeal we are concerned with respondents 1to 32 falling under VRS phase II. In the light of the contentions urged two points arise for consideration - (I) whether the terminal benefits and financial package available under the Scheme are to be calculated up to the cut off da;e fixed for accepting the applications of the employees, who opted for voluntary retirement or they should be calculated up to the actual date of relieving them from service, and (2) whether the respondents were entitled for notice pay of three months.

In clause (c) of Annexure P-1, extracted above, it is expressly and clearly stated that the date of acceptance of the applications ofthe employees seeking voluntary retirement under the Scheme shall be the date for calculation of VRS ex-gratia, as well as for reckoning eligibility. Added to this it is also made clear that any increase in the salary after the cut off point/date cannot be taken into consideration. It is also stated that for calculating the compensation for "remaining period of service" wherever applicable no compensation shall be paid for the period for which the salary has already been drawn by the employees after submission of VRS applications. Clause (i) ofthe Annexure states that the payments that are due from the Corporation under the Scheme shall be released to the concerned on the date of relieving subject to receipt of funds from the Government.

This clause, in our view, has no bearing as far as the cut off or effective date is concerned for the purpose of calculating the terminal benefits including VRS ex-gratia and other benefits available under the VRS, to which an employee is entitled, particularly so, when in clause (c), I'S already stated above, it is mentioned that for calculation of VRS ex-gratia as well as reckoning its eligibility the date of acceptance of applications will be taken into consideration. Clauses (c) and (i) are meant to serve different purposes. One is for the purpose of calculation of the benefits in terms of money under the VRS and the other is to see that the employee is not sent out without such payment. If that happens it will lead to a great hardship to an employee without any financial support to carry on life. It is for that reason clause (i) appears to have been incorporated so that an employee is not rendered jobless.

The payments that are due to be made by the Corporation under the Scheme depended upon the release of the funds by the Government. If some time is taken in this process even after acceptance of the voluntary retirement application, an employee is not relieved from service, he is to be paid salary and allowances from the date of acceptance of voluntary retirement application/cut off date till he is actually relieved from the service. The employee may continue in service in the interregnum by virtue of clause (i) but that cannot alter the date on which the benefits that were due to an employee under the YRS to be calculated. Clause (c) itself indicates that any increase in salary aftrr the cut off point/ date cannot be taken into consideration for the purpose of calculation of payments to which an employee is entitled under the VRS.

It is further made clear that for remaining period of service, wherever applicable, no compensation shall be paid for the period for which the salary has already been drawn by the employee after submission of application for voluntary retirement. This being the position both learned single Judge and the Division Bench of the High Court were not right in taking a contrary view that the benefits available under the Scheme and terminal benefits should be reckoned and calculated as on the date ofactual relieving the employees notwithstanding the cut off date mentioned by the Corporation and accepted by the employees. An employee even after accepting his application c. ould not be relieved unless entire amount to which he was entitled under the Scheme was paid. Such payment depended on making funds available by the State Government. AU :~ employees who accepted VRS could be relieved at a time or batch by batch depending on availability of funds.

Further funds may be made available early or late. Ifthe argument of the respondents that relieving date should be taken as effective date for calculating terminal benefits and financial package under VRS, the dates may be fluctuating depending on availability of funds. Hence it is not possible to accept this argument. When the employet:s have opted for VRS on their own without any compulsion knowing fully wen about the Scheme, guidelines and circulars governing the same, it is not open to them to make any claim contrary to the terms accepted. It is matter of contract between the Corporation and the employees. It is not for the courts to re-write the terms of the contract, which were clear to the contracting parties, as indicated in the guidelines and circulars governing them under which Voluntary Retirement Schemes floated. Jn the circumstances we are of the view that the terminal benefits and finar.

cial package available under the Scheme are to be calculated up to the cut off date fixed for accepting the applications of the employees and not up to the date of their actual relieving from service. Hence the relevant date for the purpose of calculation of terminal benefits and benefits of VRS ~Jhe VICECHAIRMANAND MANAGING DIR A. P. S. l. D C. LTD. ''· R. VARAPRASAD (PATIL, l. ] 237 respondents was 28. 2. 1998 and not 31. 7. 1998. As per clause (e) of Annexure P-1 it is made abundantly clear that there shall be no separate notice either for the employee or Corporation in terms of service conditions mentioned in the offer of appointment/service rules/ S. R. S. As per Annexure P-3 Memo dated"i. 10. 1997 Government of Andhra Pradesh issued amendment to the Voluntary Retirement Scheme Guidelines contained in the Memo dated 23. 1. 1996 and this amendment came into force with immediate effect.

As per the amendment, extracted above, if an application of an employee opting for voluntary retirement is accepted instantaneously and the payment is arranged by the Management on the same day the concerned individual would be entitled to payment of ex-gratia alone with the notice period pay. It is also clarified that in the circumstances where the Management takes time to take a decision about the acceptance of an application submitted by the employee for the YRS and allows the notice period to lapse or the individual concerned has drawn full salary during the notice period served by him, notice period pay would not be admissible as the individual has drawn the salary during the notice period. In the present case admittedly the cut off date fixed was 28. 2. 1998, which is not disputed. The contention was that since the employees continued to be in service till 31. 7. 1998, they were entitled to the retiral benefits and the benefits available under the YRS as on 31. 7.

1998, the date on which they were actually relieved. While discussing first point we have clarified the position in this regard. As per clause (e) of Annexure P-1 no separate notice was required to be issued in terms of service conditions mentioned in the offer of appointment/service rules/S. R. S. But once a cut off date was fixed for the purpose of calculating the benefits under the YRS and thereafter an employee is continued in service to satisfy clause (i) of Annexure P-1 and if that period happens to be three months or more, that itself shall be treated as notice period. In that case he shall not be entitled for notice period pay again as is clear fro'm the Memo dated 1. 10. 1997 (Annexure P-3), on the ground that an employee having drawn full salary during the notice period although no separate notice was required to be given, would not be entitled for pay for the notice period.

Even while dealing with the cases of YRS Phase I, the employees were given notice pay for two months 15 days and salary for 15 days. In those cases the Corporation had treated the cut off date as 31. I0. 1997 but the employees were actually relieved from service on 15. 11. 1997, as the funds were not made available immediately. It clearly shows that for the period for which the employees even under YRS first phase worked for 15 days after the cut off date were not given notice pay for full three months. In the present case the cut off date was 28. 2. 1998 but the respondents were actually relieved from service on 31. 7. 1998. Thus they worked for a period of five months after the cut off date for which they had drawn salary. Out of these five months three months would be adjusted towards notice pay as in the YRS Phase I only 15 days were adjusted as notice pay as those employees had worked only for 15 days beyond the cut off date.

In the impugned judgment the Division Bench held that the Corporation could not discriminate between the employees of YRS Phase I and YRS Phase II. We fail to see how there was any discrimination. Unfortunately, the Division Bench of the High Court did not examine the issues that arose for consideration keeping in mind the relevant clauses, guidelines and specific terms contained in YRS including the amendment to the guidelines. Rights and benefits available to the employees under a particular YRS ought to be examined in the light of the specific terms and conditions governing them. Since this has not been done the Division Bench committed an error in recording its findings. On the other hand, there appears to have been consistency in the stand of the Corporation.

Added to this the amendment as per Annexure P-3, reference to which has already been made above, justifies the stand of the appellants for the reasons that no separate notice was required to be given and if an employee had drawn the salary during the notice period, he would not be entitled b claim pay for notice period again. In this view we answer the point No. 2 in the negative and against the respondents. In the light of what is stated above, we are ofthe view that the judgment and orders of the learned single Judge and of the Division Bench of the High Court cannot be sustained. Hence they are set aside and the appeal is allowed with no order as to costs. Civil Appeal Nos. 4067-4069 of 2001 and Civil Appeal Nos. 2159-2160 of 2001 In view of our conclusions arrived at in Civil Appeal No. 5638of1999, these appeals also are entitled to succeed. We may also mention that the respondent in Civil Appeal No.

4067 of 200 I is governed by YRS Phase II and the respondents In Civil Appeal Nos. 4068-4069 of2001and2159-2160 of2001 are governed by YRS Phase III. It may be added that the terms and conditions, which are applicable to YRS Phase II are similar to YRS Phase Ill also, as the matters are identical. In this view these appeals are also allowed. The impugned judgment and orders of the High Court are set aside. VICECHAIRMAN AND MANAGING DIR. AP. S. l. D. C. LTD. v. R. VARAPRASAD [PATIL,J] 239 No costs. CIVIL APPEAL NOS. 4658-4659 OF 2001 These appeals are directed against the common order made in W. P. l5703 of l999 and W. P. No. 15742 of l 999. Respondent No. l, Yijay Kumar, in C. A. No. 4658 of 2001 and respondent No. l, A. Simhadri, in C. A. No. 4659 of 2001 (hereinafter referred to as 'respondents'). filed writ petition Nos. 15701of1999 and 15742of1999 in the High Court seeking direction to the appellant-Corporation to continue them in service till they attain superannuation.

Both are covered by YRS Phase-III. The Corporation fixed 3J. 10. l 998 as cut off date for YRS Phase-Ill. Respondents Yijay Kumar and A. Simhadri filed applications seeking voluntary retirement under the said Scheme on 31. 10. l 998 and 10. 10. l 998 respectively. Corporation accepted their options on 24. 11. 1998 and 27. I0. 1998, which were also acknowledged b~ the respondents on 26. 1 l. 1998 and 2. l 1. 1998. Thereafter, they applied for w'ithdrawal of the option given for YRS on 8. 1. 1999 and 26. 2. 1999 respectively. These respondents could not be relieved from service along with large number of other employees who were relieved on 3l . 7. l 999 under . YRS Phase-III because of the interim order granted by the High Court in the writ petitions filed by them. The Division Bench of the High Court, by the impugned order, allowed the writ petitions and directed the Corporation to continue their services till their attaining the age of superannuation.

In doing so, the High Court followed the decisions of this Court in Bairam Gupta v. Union of India and Anr. , AIR (1987) SC 2354, JN. Srivastava v. Union of India and Anr. , AIR ( 1999) SC 157l and Shambhu Muarai Sinha v. Project & Development India and Anr. , [2000] 5 SCC 621. The High Court was of the view that the respondents had filed their withdrawal applications on 8. 1. 1999 and 26. 2. 1999 and had the benefit of interim directions to continue in service granted by the High Court on 30. 7. 1999 while they were to be relieved on 31. 7. 1999 and the result was that they were still in service on that date. The High Court further observed that these respondents had made the applications for withdrawal before the effective date i. e. 31. 7. 1999 and they having not accepted the monetary benefits under the YRS Scheme, could withdraw their applications opting for YRS. Jn this view, the writ petitions of these respondents were allowed.

Before us, the learned counsel on both sides relied on the decision of this Court in Bank ofIndia and Ors. v. ·o. P. Swarnakar and Ors. , [2003] 2 SCC 721] and few other decisions. The decisions cited on behalfofthe respondents do not help them.

Unlike in those decisions these respondents filed applications offering to take voluntary retirement under the Scheme; their applications were accepted by the Corporation which were acknowledged by these respondents; they made representations for withdrawal from the VRS Scheme several days after the Corporation accepted their applications made seeking voluntary retirement; merely because they could not be relieved in view of the interim order passed by the High Court in the writ petitions and that they could not be relieved immediately after the cut off date for want cf funds to be received from the Government by the Corporation, they could not take away the result or escape consequence of the acceptance of their voluntary retirement by the Corporation. In other words, question of withdrawal oftheir applications made for seeking voluntary retirement after their acceptance did not arise and they could not be permitted to do so in law.

It is fairly settled now that the voluntary retirement once accepted in terms of the Scheme or rules, as the case may be, cannot be withdrawn. In these appeals from the facts it is clear that the applications of the respondents opting for voluntary retirement under the Scheme were accepted and even the acceptance was communicated to them. Thereafter, they filed the writ petitions. Hence the High Court was not right in allowing the writ petitions holding that they applied for withdrawal before the effective date considering the date of relieving the employees as the effective date. In the light of the discussions made in Civil Appeal No. 5638 of I999 the High Court, in our view, was wrong in treating 31. 7. 1999 as an effective date. The decisions relied on by the respondents before the High Court or in this Court on facts do not help them.

Moreover, position is to be examined on the facts, terms ofthe VRS and circumstances governing a particular case of withdrawal offer made seeking voluntary retirement after its due acceptance. In view of this legal position, the impugned order cannot be sustained. We would have set aside the same but for the peculiar facts and circumstances of the case stated hereinafter. These respondents though sought for voluntary retirement under the Scheme could not be relieved even on 31. 7. 1999 alongwith large number of other employees because of the interim order passed by the High Court in the writ petitions filed by them. Consequently, they continued in service. Even in the SLPs filed by the Corporation, though leave was granted, interim order was specifically refused as is clear from the order dated 23. 7. 2001 passed by this Court in these appeals, which reads:- "Leave granted. Tag with C. A. Nos. 4067-4069/2001. No stay.

" It appears to us that the respondents have continued in service; may be they have attained superannuation by now or they are likely to attain VICECHAIRMAN ANDMANAGING DIR. A. P. S. l. D. C. LTD. v. R. VARAPRASAD [PATIL, J. ] 24 J superannuation in near future; at any rate, they having been continued for all A these years and taking note of the peculiar facts and circumstances of these cases, we do not think it is just and appropriate to disturb the impugned order under Article 136 of the Constitution of India in the light of what is stated above. Consequently, these appeals are disposed of accordingly but with no order as to costs. B N. J. Appeal disposed of.