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Judgment
K.L. Manjunath, J.—These appeals are filed by the ITI Limited which was the respondent 1 before the learned Single Judge in the writ petitions filed by the employees who had opted for voluntary retirement pursuant to the scheme evolved by the ITI.
These appeals are filed by the appellant, aggrieved by the order of the learned Single Judge, granting relief in favour of the officers of ITI who had opted for Voluntary Retirement Scheme (hereinafter referred to as ''VRS'' or VR Scheme''). The said scheme was introduced by the appellant to reduce the surplus manpower and bring down the strength of employees to optimum levels. In pursuance of it, different public sector companies formulated different VRS to encourage employees to retire from services. As per the scheme introduced by the appellant, certain benefits were conferred on the persons who opted for VR. The benefits under the scheme are as hereunder:
"Benefits under the scheme:
4.1 An employee whose request for Voluntary Retirement is accepted will be entitled to the following normal terminal benefits:
(a) Gratuity;
(b) Provident Fund;
(c) Encashment of admissible privilege leave, if any, at credit;
(d) Payment of TA/DA to the employee and his family members to move to the employee''s hometown as per TA Rules.
4.2 In addition to the normal terminal benefits, they will be entitled to ex gratia payment equivalent to:
1.5 months'' emoluments (Basic Pay plus DA) for each completed year of service;
OR
the Monthly emoluments (Basic Pay plus DA) at the time of retirement multiplied by the balance Months of service left before normal date of retirement, whichever is less".
Pursuant to this scheme, officers as well as workmen of the ITI, opted for VRS. Accordingly, the ITI settled the amount payable to the persons who opted for VR and their resignations were also accepted. Thereafter, as per Annexure-F to the writ petition, the Ministry of Industries, Department of Public Enterprises, New Delhi, by its order dated 19th July, 1995, revised the scales of pay of the executives holding posts below the Board level and non-unionized supervisors with effect from 1-1-1992. As per the orders of the Government of India, the Government decided that the pay scales of the above two categories would stand revised with effect from 1-1-1992 and directed all the public sector companies to give effect to the office memorandum dated 19th July, 1995. Pursuant to the said office memorandum, the appellant-ITI revised the pay scales and allowances of executives in Grades I to X as per the Office Circular No. 409, dated 6-9-1995. As per this office circular, the revision of pay scale was given with effect from 1-1-1992, certain rider has been introduced by the appellant-company as hereunder:
"Calculations relating to compensation paid under Voluntary Retirement Scheme, incentive for not availing house building advance/interest subsidy for housing loan and/or vehicle advance, shall not be reopened".
Being aggrieved by this rider, the respondents who are the executives between Grades I to X of the appellant-company, approached this Court by filing several writ petitions seeking the following reliefs:
(a) directing the respondents to pay incentive given to other staff members for not availing House Building Advance and Vehicle Advance in accordance with incentive scheme framed by respondents;
(b) directing the respondents to pay difference in HRA, fixed DA, variable DA, managerial incentive and other benefits to the employees who have retired from service under the VR Scheme and those who retired on superannuation;
(c) and grant such other and further relief as may deem fit in the circumstances of the case.
Along with the officers, some of the workmen of the ITI have also joined in the aforesaid writ petitions. However, the learned Single Judge has granted relief only in favour of the officers pursuant to Annexure-F to the writ petition and rejected the claim of the workmen. Aggrieved by the said order of the learned Single Judge, the appellant is before us challenging the relief granted to the officers of the ITI who opted for VR. The workmen whose prayer was rejected by the learned Single Judge, have filed separate writ appeals and those writ appeals will be considered by us separately. Therefore, we now, confine to the writ appeals filed by the Management allowing the writ petitions partly granting relief in favour of the officers.
Before the learned Single Judge, the following reliefs were sought by the writ petitioners who were the officers as well as the workmen:
"(a) a direction to respondents to recalculate the ex gratia amount on the basis of revised emoluments (on account of the revision of pay scales, fixed DA and variable DA, with retrospective effect from 1-1-1992) and pay the difference to the petitioners who have retired under the VR Scheme between 1992 and 1994;
(b) a direction to respondents to pay to the petitioners who retired under VR Schemes, the incentives payable under Circular Nos. 3813 and 3814, dated 28-5-1994 for not availing house building advance and vehicle advance".
The said writ petition was resisted by the ITI on the ground that the officers who have retired from the services, are not eligible to claim the difference amount for the purpose of calculation to extend the benefit under the VRS on the ground that in the office order dated 6-9-1995 as per Annexure-R1, the ITI has extended certain benefits to the retired employees on humanitarian grounds and that the ex gratia payable under the scheme cannot be recalculated in view of the rider in Annexure-R1. It is also contended by the appellant before the learned Single Judge that the benefits payable to the writ petitioners have been settled strictly in accordance with the scheme and that the writ petitioners were entitled for the benefit as per Clause 4 of the scheme and that the ITI has calculated the terminal benefits in addition to the normal retire- ment benefits and calculated the same based on the basic pay plus DA as on the date of retirement. Therefore, it was contended by the ITI that these officers were not entitled for the recalculation of ex gratia payment based on the revision of pay scale. The ITI also relied upon the judgment of the Supreme Court in Hindustan Machines Tools Ltd. and Another Vs. M.S. Kang/P.N. Kashyap, . The learned Single Judge, after hearing the parties, has formulated two questions for consideration in the aforesaid writ petitions:
(a) Whether the employees who have voluntarily retired under the scheme dated 21-5-1992, 5-6-1993 and 9-4-1994 will be entitled to the benefit of revision of pay scales with retrospective effect and the petitioners who retired under the VR Scheme will be entitled for the ex gratia payment?
(b) Whether the employees were entitled to incentives under the Circular dated 28-5-1994?
After considering the case of both the parties, the learned Single Judge held that the persons who were officers and who retired under the VRS dated 21-5-1992, 5-6-1993, 9-4-1994, 20-6-1994 and 7-7-1994 are entitled to payment of additional ex gratia amount by recalculating the ex gratia amount on the basis of the revised pay plus allowances, on account of revision of pay and allowances with retrospective effect from 1-1-1992 and also declared that the petitioners in all the writ petitions, were entitled to benefit of incentives under the Circulars dated 28-5-1994 wherever applicable even though they have retired under the VRS. These two directions are now under challenge. In regard to the second direction issued by the learned Single Judge to pay the incentives to the employees who have retired under the voluntary retirement scheme as per the Circular dated 28-5-1994 is concerned, the said order was challenged by the ITI in other matters. The Division Bench of this Court in Writ Appeal No. 7616 of 1999, DD: 3-8-2001, has dismissed the writ appeal of ITI, following the order passed by the very same Bench in connected Writ Petition No. 12938 of 1995 and other connected matters. Therefore, in regard to the incentive payable to the-officers of ITI is concerned, in view of the order passed by the Division Bench of this Court in the aforesaid writ appeal, the contention of the appellant that the employees were not entitled for the benefit of incentives under the Circular dated 20-6-1994, cannot be accepted and therefore, the said ground is answered against the management.
Then, the next question that arises for our consideration in these appeals is, whether the respondent-officers who have retired under the VRS are entitled to payment of additional ex gratia payment by recalculating the ex gratia amount on the basis of the revised basic pay plus allowances on account of revision of pay and allowances with retrospective effect from 1-1-1992.
The ITI has introduced VR Schemes on five occasions under five different dates. But the benefit extended to the officers in all the schemes is incorporated in Clause 4 of each scheme. As per Clause 4.2, the officials who opted for VR, are entitled to the following additional benefit in addition to the normal terminal benefit, namely, ex gratia payment equivalent to 1.5 months'' emoluments (Basic Pay plus DA) for each completed year of service or monthly emoluments (Basic Pay plus DA) at the time of retirement multiplied by the balance months of service left before normal date of retirement, whichever is less. Therefore, what is to be considered by this Court is, whether the ex gratia, has to be calculated based on the Basic Pay plus DA as on the date of settlement without considering the revision of pay scale as per Annexure-R1 and whether the employees/officers who have been benefited partly as per Annexure-R1 can challenge the rider introduced in Annexure-R1 by the appellant Management.
The learned Counsel for the appellant strongly relied upon the judgment in Hindustan Machine Tools Limited''s case referred to supra, contends that the facts involved in the above case and the facts involved in the present appeals are one and the same. According to him, in Hindustan Machine Tools Limited''s case, supra, also, the VRS was introduced with effect from 1-4-1989 and that the employees who have retired from the services thereafter, by office order dated 1-3-1991, pay scales were revised in respect of existing employees and those who retired from time to time. In the said case, due to audit objections, though HMT was prepared to pay the revised scale of pay to the retired employees and all other benefits to them, the same was not paid to them. Therefore, the retired employees of HMT had filed a writ petition before the High Court seeking a direction to the HMT to settle the dues payable to them pursuant to the order of revision of pay scale. The writ petition was allowed and the writ appeals filed by the HMT was dismissed by the High Court. However, the Supreme Court reversed the finding of the learned Single Judge as well as the order passed in the writ appeal. Therefore, strongly relying upon the said judgment, Mr. Udaya Holla contends that in view of the rider introduced to Annexure-R1, though the pay scale has been revised with effect from 1-1-1992, the respondents/officers are not entitled for the recalculation of VR benefit.
Per contra, learned Counsel Mr. Harikrishna Holla relying upon the judgment of the Supreme Court in Prantiya Vidhyut Mandal Mazdoor Federation Vs. Rajasthan State Electricity Board and others etc. etc., , contends that the facts and circumstances involved in Hindustan Machine Tools Limited''s case, supra, are entirely different from the facts and circumstances involved in the present case. He further contends that in the office order of the Hindustan Machine Tools Limited''s case, supra, a note was put up and such a note is not available in the present case. He contends that the words used in Annexure-B, namely, ''Clause 4.2 of the scheme'' is altogether different from the note that was added in Hindustan Machine Tools Limited''s case, supra. In this case, according to him the ex gratia has to be calculated based on the monthly emoluments on the date of retirement. According to him, the words ''on the date of retirement'' were not there in the case of Hindustan Machine Tools Limited, supra. In Clause 4.2 of the VRS dated 12-8-1991, it is clearly stated that the ex gratia has to be calculated, namely, basic pay plus DA as on the date of retirement. It is not in dispute that ITI, pursuant to Annexure-R1, has revised the scale of pay even to the retired employees and the same has been recalculated and settled in favour of the officers who have opted for VRS. Considering the very fact that the salary has been revised and has been paid to such employees, we have to hold that the Basic Pay plus DA as on the date of retirement has to be considered for the purpose of calculation of ex gratia payment. Though ITI has introduced five different VRS, the benefit covered in favour of the employees under the Scheme is stated in Clause 4 of the said Scheme. Clause 4.2 is similar in all the five schemes introduced by the ITI. Therefore, the question before us is, what was the Basic Pay plus DA on the date of retirement of each employee. It is not the case of the ITI that for the purpose of calculation of ex gratia payment, this Basic Pay plus DA has to be calculated on the date of retirement excluding the revision of pay scale. Such a clause has not been introduced by the ITI while framing these five schemes. In the absence of it, when the employees have been paid revised scale of pay with retrospective effect, it goes without saying that at the same rate, the ITI has to recalculate the amount and settle the same in favour of the officers for the purpose of ex gratia.
The learned Single Judge, in para 9.2 of his judgment, has distinguished the case of Hindustan Machine Tools Limited, referred to supra and accepted the case of the officers by strongly relying upon Prantiya Vidhyut Mandal Mazdoor Federation''s case referred to supra. The Supreme Court, while dealing with the question of wages, has held as hereunder:
"When an award gives revised pay scales the employees become entitled to the revised emoluments and where the said revision is with retrospective effect, the arrears paid to the employees, as a consequence, are the emoluments earned by them while on duty".
In the instant case also the pay was revised with retrospective effect pursuant to the orders of the Government of India with effect from 1-1-1992. The Government of India has directed all the public sector companies to give effect to the Office Memorandum dated 19-7-1995. Therefore, with retrospective effect revision of pay scale has been effected. In view of the judgment of the Supreme Court in Prantiya Vidhyut Mandal Mazdoor Federation''s case, supra, we have to hold that the respondent-officers are entitled to the emoluments earned by them while on duty. As per Clause 4.2 of the VR Scheme introduced by the ITI the officers are entitled for an ex gratia payment equivalent to one and half months'' emoluments Basic Pay + DA at the time of retirement. When they have used the words ''Basic Pay + DA as on the date of retirement''. what is to be considered by us is that what was the Basic Pay + DA as on the date of their retirement. When the pay scale has been revised with effect from 1-1-1992 and when they have retired on 1-10-1992, each of these officers are entitled for the benefit of ex gratia based on the revised pay scale and according to us, ex gratia has to be calculated based on the revised pay scale as the same has been given effect with retrospective effect. In the circumstances, we hold that the learned Single Judge has rightly held that the officers are eligible to claim ex gratia based on the revised pay scale. In the circumstances, we are of the opinion that the learned Single Judge has not committed any error or illegality and similarly we cannot hold that the order of the learned Single Judge as perverse. Therefore, we see no reason to interfere with the findings of the learned Single Judge.
Accordingly, these appeals are dismissed.