Bela Bhardwaj and Others vs The State of Punjab and Others

Rakesh Kumar Jain, J.—By way of this common order, we shall be disposing of CWP No. 14756 of 1993 and COCP No. 606 of 2004, ordered to be heard along with the writ petition. In the writ petition, the petitioner has challenged the amended Rules 2.5 and 3.2 of the Punjab State Co-operative Sugar Mills Service (Common Cadre) Rules, 1980 (for short ''the Rules of 1980'') approved by the Registrar Co-operative Societies, Punjab (respondent No. 4) vide his letter dated 7.11.1990 and sent by respondent No. 2/Punjab State Federation of Co-operative Sugar Mills Limited (for short ''SUGARFED'') to respondent No. 4 vide letter dated 16.1.1991, for quashing of the orders dated 7.9.1993 and 07.10.1993 and for issuance of a writ of mandamus to direct respondents to protect the seniority of the petitioners in the Head Office of the SUGARFED as proposed in letter dated 3.10.1990 and approved by respondent No. 4 vide letter dated 11.1.1991.

Briefly stated, the Punjab Khand Udyog Limited (for short ''the PKUL''), a registered company was running two sugar mills, namely, Gurdaspur Co-operative Sugar Mills Limited, Gurdaspur and the Zira Co-operative Sugar Mills Limited, Zira. It was a public sector undertaking with 100% shares held by the Punjab State Industrial Development Corporation (for short ''PSIDC''). There were two cadres in the PKUL, known as, common cadre and corporate cadre. The employees of common cadre were used to be posted in the field i.e. in the Mills and the employees of corporate cadre were posted in the Head Office at Chandigarh. The services of the employees of the corporate cadre were transferable to the field office. It is alleged that seniority of both the cadres were maintained separately and in the month of September 1989, it was decided by the Project Approval Board of Punjab Government to disinvest the holding of shares by PSIDC in PKUL. The said decision of the Project Approval Board was implemented in the form of an agreement dated 27.7.1988 entered into between PSIDC as seller and the Gurdaspur Sugar Mills Limited, Gurdaspur and Zira Co-operative Sugar Mills Limited, Zira, both controlled by the SUGARFED as purchaser.

According to Clause 7 of the said agreement, the purchaser took the responsibility to offer employment to all the employees of the PKUL. It is also alleged that similar to the PKUL, the SUGARFED had also two cadres of employees of common cadre and Head Office cadre. Both the cadres had their separate seniority list and the service conditions of the employees of the SUGARFED is governed by the Rules of 1980 framed under the Punjab State Co-operative Societies Act, 1961 (for short ''the Act''). It is further, alleged that the Board of Directors of the PKUL, in their meeting dated 31.3.1989, decided that insofar as the employees of common cadre are concerned, they shall be employees of the respective mills i.e. Gurdaspur and Zira Mills and those who fall under the managerial cadre would be considered for absorption as common cadre employees of SUGARFED. So far as the staff corporate cadre is concerned, since the staffing pattern was to be approved by the Registrar, Co-operative Societies Punjab, in order to accommodate all the staff of the corporate office, it was decided that for the time being all the existing posts created in the PKUL alongwith the approved emoluments and benefits should be created in the SUGARFED, on temporary basis, till such time the final staff pattern is approved by the Registrar of Cooperative Societies. The Directors approved the same and desired that the Registered Cooperative Societies should be approached for finalization of the staff pattern. The said resolution dated 31.3.1989 was placed before the Supervisory Officer (RCS, Punjab) for approval of the aforesaid scheme wherein it was decided that the corporate staff should be absorbed in the SUGARFED i.e. in the Head office of SUGARFED, who shall be governed by the Act, Bye-Laws and service Rules of 1980 and their pay scales shall be as per the decision of the SUGARFED. The Managing Director of the SUGARFED sought approval of the above amendment in the Service Rules of SUGARFED vide letter dated 7.7.1989 which was accorded by the Registrar, Co-operative Societies on 02.01.1990. Vide letter dated 18.07.1990, the Additional Registrar, Cooperative Societies (Civil), acting on behalf of the Registrar, Co-operative Societies, Punjab, decided that the staff/employees of the corporate office of PKUL may be transferred/absorbed in the respective SUGARFED at Zira and Gurdaspur mills after obtaining their options. On 07.11.1990, the proposed amendment with modification in Rules 2.5 and 3.2 of the Rules of 1980 was approved by the Registrar, Co-operative Societies. It was desired by the Managing Director of the SUGARFED that the original proposal with regard to amendment be approved in toto, but the Registrar, Co-operative Societies, vide his letter dated 11.01.1991, observed that "approval is hereby accorded to the creation of the posts in the Chemical and Commercial Division of SUGARFED as per your original proposal contained in letter No. PSF.90:8538 dated 3.10.1990. It is requested that these amendments may be incorporated in the service rules of SUGARFED. This super cedes our earlier letter No. RCS: SM/3-36/5721 dated 07.11.1990". It is alleged that in view of the amended provisions of Rules 2.5 and 3.5 of the Rules of 1980, one Sanjeev Soni was given the benefit of his past service on equal post held by him in PKUL and on that basis, he was placed in the pay scale of Junior Assistant. Aggrieved against this action, as many as 7 persons who were working as Senior Clerk/Clerk in the office of SUGARFED, approached this Court by way of CWP No. 11219 of 1992 in which they had prayed that the seniority of employees of erstwhile PKUL should be fixed from the date they joined the SUGARFED and they should not get the benefit of their past service. The said writ petition was disposed of on 02.08.1993 by the Division Bench holding that "there is no manner of doubt that according to the Rules, as amended, so far the employees of erstwhile PKUL cannot be given benefit of their previous service rendered before absorption under the previous employer. It was further held that "we have not chosen to go into the allied question, namely, whether under the general law, the employees about whom there is a decision to absorb in SUGARFED are entitled to the benefit of the service rendered under their previous employer. In view of the conclusion reached by us, it is impermissible to give benefit of service rendered before absorption in SUGARFED to the employment of erstwhile PKUL. SUGARFED respondent No. 2 will, therefore, take suitable corrective action according to law in the light of the above judgment".

At this stage, it would be relevant to mention that another order was passed on 01.11.2000 by the Division Bench of this Court in CWP No. 1250 of 1999 titled as Ravi Kant Bhalla v. State of Punjab and others in which the petitioner was working in the SUGARFED and his next post of promotion was Senior Assistant in terms of the Rules of 1980. In the said writ petition, it was held that "accordingly, the Clerks who were absorbed would stand adjusted against the increased strength of posts and they need not have been asked to work against the posts of Senior Assistants. Technically the posts of Senior Assistant would remain vacant. In that eventuality, the case of the petitioner would have to be considered as Senior Assistant along with the other eligible persons against the vacancies of Senior Assistants, which were lying vacant prior to the amendment of the Rules in 1999, in accordance with law. In other words whenever the vacancies were available, the rules then existing would be applied for the purpose of consideration for promotion.

COCP No. 606 of 2004 was filed by Smt. Pavitar Kaur, Senior Clerk, in the office of the SUGARFED, for non-compliance of the orders passed in CWP No. 11219 of 1992 and CWP No. 1250 of 1999. In the said contempt petition, an order was passed by this Court on 17.05.2007, which reads as under:--

The petitioner has invoked the jurisdiction of this Court under the Contempt of Courts Act, 1971, alleging that the respondents have intentionally violated the order passed by this Court on 02.08.1993, Annexure P-1, and 01.11.2000, Annexure P-5.

In Annexure P-1, it was held that it is impermissible to give the benefit of service rendered by the erstwhile employees of Punjab Khand Udyog Limited before their absorption in SUGARFED. Vide order Annexure P-5, the claim of the petitioner for promotion to the post of Senior Assistant was required to be considered after holding that erstwhile employees of the Punjab Khand Udyog Limited would be deemed to be absorbed in different ranks by increase in the cadre strength.

It is also pointed out by the learned counsel for the petitioner that Civil Writ Petition No. 14756 of 1993 filed by the erstwhile employees of Punjab Khand Udyog Limited challenging the Rules is pending consideration before this Court.

Since the contempt petition essentially raises the question of interpretation of Rules in respect of claim of seniority based on absorption of erstwhile employees of Punjab Khand Udyog Limited, it is deemed appropriate that the present contempt petition be also heard along with CWP No. 14756 of 1993.

Notice.

To be heard along with CWP No. 14756 of 1993.

It is because of the aforesaid order, both writ petition and the contempt petition are being disposed of together by this common order.

Basically, the dispute in this case is with regard to applicability of Rules 2.5 and 3.2 of the Rules of 1980 to all the employees of the PKUL who have been absorbed in SUGARFED but before that has to be considered, it would be relevant to refer the un-amended and amended Rules 2.5 and 3.2 of the Rules of 1980:--

Un-amended and amended Rule 2.1(b) of the Rules of 1980 is also reproduced as under:--

Since the method of recruitment, as provided under Rule 2.1(b)(c), is also by way of absorption of a person already in the service of a public sector or statutory undertaking of the Government of Punjab, the petitioners, who have been absorbed in SUGARFED, have not been granted the benefit of counting of their past service rendered in the PKUL for the purpose of determination of their seniority as against the employees of the SUGARFED. In the letter dated 11.01.1991, approval has been granted by the Registrar, Co-operative Societies, Punjab, in respect of the posts in the Chemical and Commercial Division of SUGARED and not in other services and that order has been upheld by the Division Bench of this Court in CWP No. 11219 of 1992.

The petitioners have, thus, challenged the validity of amended Rules 2.5 and 3.2 of the Rules of 1980 by way of present writ petition on the ground of discrimination and arbitrariness. It is submitted by the learned counsel for the petitioners that there is no reasonable nexus to be achieved in giving the benefit of past service only to one Section of the employees and not to the others.

On the other hand, learned counsel for the respondents has submitted that although the petitioners have no right to be absorbed but once they have been absorbed, the Absorbing Authority can certainly lay down its own terms and conditions. In this regard, he has referred two decisions of the Supreme Court in the cases of Indu Shekhar Singh and Others Vs. State of U.P. and Others, and V.K. Dubey and Others Vs. Union of India (UOI) and Others,

We have heard learned counsel for the parties and perused the record.

The facts are not much in dispute. The petitioners in this case are Stenographers, Steno-Typists and Peons, who are similarly placed with the petitioners in CWP No. 11219 of 1992 which was filed by the Senior Clerks/Clerks in which Rules 2.5 and 3.2 of the Rules of 1980 were in question and it has been categorically held that since the approval has been granted by the Registrar, Co-operative Societies, Punjab, giving benefit of previous service rendered before absorption under the previous employer, i.e. PKUL, only to the employees in the Chemical and Commercial Divisions, therefore, the other employees were not entitled to the said benefit and the question as to whether they are entitled to this benefit under the General Law was kept open. It is also not in dispute that the petitioners had given option before their absorption without any objection.

In Indu Shekhar Singh and Others Vs. State of U.P. and Others, he Apex Court has held as under:--

The State was making an offer to the respondents not in terms of any specific power under the Rules, but in exercise of its residuary power (assuming that the same was available). The State, therefore, was within its right to impose conditions. The respondents exercised their right of election. They could have accepted the said offer or rejected the same. While making the said offer, the State categorically stated that for the purpose of fixation of seniority, they would not be obtaining the benefits of services rendered in the U.P. Jal Nigam and would be placed below in the cadre till the date of absorption. The submission of Mr. Verma that the period for which they were with the Authority by way of deputation, should have been considered towards seniority cannot be accepted simply for the reason that till they were absorbed, they continued to be in the employment of the Jal Nigam. Furthermore, the said condition imposed is backed by another condition that the deputed employee who is seeking for absorption shall be placed below the officers appointed in the cadre till the date of absorption. Respondents 2 to 4 accepted the said offer without any demur on 03.09.1987, 28.11.1991 and 06.04.1987 respectively.

They, therefore, exercised their right of option. Once they obtained entry on the basis of election, they cannot be allowed to turn round and contend that the conditions are illegal. Furthermore, there is no fundamental right in regard to the counting of the services rendered in an autonomous body. The past services can be taken into consideration only when the Rules permit the same or where a special situation exists, which would entitle the employee to obtain such benefit of past service.

In V.K. Dubey and others'' case (supra), it was held that where the surplus staff was re-deployed, the benefit of their service rendered in previous cadre can be denied. In the said case, the staff working on diesel side of Railways absorbed on electrical side, on introduction of electrical engines. Their seniority on electrical side was held to be fixed from the date of deployment on that side without granting benefit service rendered on diesel side because absorption saved them from retrenchment and it was held that the seniority of deployed staff could not be fixed above the staff already working on electrical side.

In view of the facts and circumstances, if the approval has been given by the Registrar, Co-operative Societies, Punjab, vide its letter dated 11.01.1991, only for the Chemical and Commercial Divisions and the surplus staff in PKUL has joined the SUGARFED by giving their own option, the condition can be imposed for regulating their services and in that matter, there is no question of discrimination.

In view of the aforesaid discussion, we do not find any merit in the present writ petition and, thus, the same is hereby dismissed. Since the result of the contempt petition hinges upon the success of the writ petition, which has failed, therefore, the Rule issued in the Contempt Petition is hereby discharged.