State of Chhattisgarh and Another vs Babu Abraham and Another

Abhay Manohar Sapre, J.—The decision rendered in this appeal shall also govern disposal of Writ Appeal Nos. 419/2011, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 29, 30, 31, 32, 34, 42, 47, 48, 49, 50, 51, 52, 71, 72, 73, 74, 75, 351, 352, 353, 355, 356, 357, 358, 359, 360, 361, 362, 363, 364, 365, 366, 367, 368, 369, 370, 371, 372, 373, 374, 375, 376, 377, 378, 379, 380, 381, 382, 383, 384, 385, 386, 387, 388, 389, 390, 391, 392, 393, 394, 395, 396, 397, 398, 399, 400, 401, 402, 403, 404, 405, 406, 407, 408, 409, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 420, 421, 422, 423, 424, 425, 426, 427, 428, 429, 430, 431, 432, 433, 434, 435, 436, 437, 438, 439, 440, 441, 442 and 443 of 2012 (total 127 cases), because all these appeals involve common question of facts and law and arise out of the same impugned order dated 4th July, 2011, passed in W.P.(S) No. 6510 of 2009 and other connected matters. This is an appeal filed by the respondents No. 1 and 2 of W.P.(S) No. 6510/2009, u/s 2(1) of the Chhattisgarh (Appeal to Division Bench) Act, 2006 read with Rule 158(1)) of the Chhattisgarh High Court Rules, 2007, against the order dated 4th July, 2011 passed by the learned Single Judge in W.P.(S) No. 6510/2009 and other connected matters.

By the impugned common order dated 4th July, 2011, the learned Single Judge (writ court) allowed the writ petition filed by the writ petitioner (respondent No. 1 herein) in part and in consequence thereof issued writ of mandamus against the appellants for its compliance.

So the question that arises for our consideration in this appeal is, Whether learned Single Judge was justified in allowing the writ petition in part as against the appellants and if not then, what orders need be passed in this appeal?

In order to appreciate the controversy involved in the writ petition and now in this appeal, it is necessary to state few relevant facts.

The respondent No. 1 (writ petitioner) and all respondent No. 1 of other connected appeals, were at all relevant time the employees of the respondent No. 2, known as Madhya Pradesh State Road Transport Corporation (for short hereinafter called "MPSRTC"), formed by the State of M.P.

In the year 1985-86, the MPSRTC introduced one Scheme called "Employees Deposit Fund Scheme "(for short hereinafter called "EDF") for the benefit of their employees. (Annexure-P-2). This Scheme was essentially a statutory Scheme, framed in exercise of the powers conferred u/s 45 of the Road Transport Corporation Act 1950. In terms of this Scheme, every employee of the MPSRTC who had either received or was to receive in his service tenure from his employer (MPSRTC) any money towards either arrears of his pay, or revision of pay, or Dearness allowance, or additional Dearness allowance, then he was required to deposit 50% of such arrears in EDF Scheme with the employer (MPSRTC), who in turn were to pay interest on such deposit as per method prescribed in the Scheme to such employee. It is not necessary to mention other salient features of this Scheme because they are not material for this appeal. This Scheme was in force till 31.3.3002.

On 1.11.2000, the State of Chattisgarh was formed out of the then existing State of M.P. by virtue of the provisions of the M. P. Reorganization Act, 2000 (for short "The Reorganization Act"). The Central Government then on 27.12.2002 passed an order u/s 58(3) of the Reorganization Act and dissolved the MPSRTC with effect from 31.12.2002 and apportioned the assets and liabilities between MPSRTC and the newly formed Corporation called "Chattisgarh Infrastructure Development Corporation" (for short hereinafter called the -"CIDC") for the State of Chhattisgarh. In this way, the then MPSRTC was dissolved with effect from 31.3.2002 and restarted functioning in the State of M.P. with the assets and liabilities apportioned and given to them by the Central Government by order/Notification dt 27.12.2002, so was CIDC in the State of Chhattisgarh with the assets and liabilities given to them.

It is with this back ground, the respondent No. 1 (writ petitioner) filed a writ petition against the MPSRTC, State of Chattisgarh, and CIDC, out of which this appeal arises, claiming interest on the deposit of his money which he had deposited being an employee of the MPSRTC in EDF Scheme. He claimed that since he had deposited money pursuant to the EDF Scheme, while the Scheme was in force which was much prior to 31.12.2002 and despite the interest amount accruing on the deposit, the same was not being paid to him though constantly demanded by him from time and again from the MPSRTC and hence he was constrained to file the writ petition under Article 226/227 of the Constitution of India against all the three stakeholders named above, out of which this appeal arises. He claimed that he was entitled in law to receive the interest accrued on his deposit in terms of the provisions of the EDF Scheme jointly and severally from the respondents. In other words, his grievance was that he was entitled to be paid the interest accrued on his deposit pursuant to the EDF Scheme irrespective of the fact as to who pays to him viz. respondents No. 1 or 2 or 3 and whether jointly or severally.

The appellants and the respondent No. 2 (who were arrayed as respondents in the writ petition) contested the writ petition. They, however, did not dispute the right of the writ petitioner (employee) to receive such interest on his deposit. All that was being principally debated by them in the writ petition was, as to who was liable to incur this liability amongst the three? In other words, if the MPSRTC was contending that the liability to pay such interest should be incurred by the State of Chattisgarh and CIDC either jointly and severally in terms of the provisions of the Reorganization Act and to the exclusion of MPSRTC, the State of Chattisgarh and CIDC were contending that MPSRTC alone should be made to incur this liability in the light of the order/Notification of the Central Government. The MPSRTC, however, also raised some legal objections, such as, that the writ petitioner has an alternative remedy to raise his grievance either before any Tribunal or fact finding adjudicating body because it involves disputed questions of facts which require factual inquiry and such issue can not be tried in the writ petition. They also raised a plea that the Central Government was also a necessary party to the writ petition in case if writ petition is held entertainable on merits.

The writ court by impugned order allowed the writ petition in part. It was held that so far as the liability of payment of interest on the deposit of writ petitioner made pursuant to the EDF Scheme is concerned, it solely lies on the State of Chattisgarh and CIDC and hence they have to pay the amount of interest within 6 months to the writ petitioner. In other words, the writ court held that the MPSRTC is not responsible to incur the liability of the writ petitioner in relation to payment of interest in question but it is the State of Chattisgarh and CIDC who have to discharge this liability by paying the money to the writ petitioner. It is against this order; the State of Chattisgarh and CIDC have felt aggrieved and filed these appeals. So far as the writ petitioner is concerned, he is satisfied with the impugned writ issued by the writ court because he has not filed any appeal against any part of the impugned order.

It is with this undisputed factual back ground of the case, the question which arises for consideration in this appeal is, whether the writ court was justified in holding that the liability to pay interest accrued on the deposit made by the employee of the then MPSRTC lies on the State of Chattisgarh or/and CIDC or on MPSRTC? In other words, the question which arises for consideration in this appeal is, who, out of three respondents named above, is liable to incur the liability of payment of interest on the amount deposited in EDF Scheme by the writ petitioner?

Having heard the learned counsel for the parties and on perusal of the record of the case, we are inclined to allow the appeal and modify the impugned order as indicated infra.

In order to answer the aforesaid questions, it is necessary to refer to the provisions of Section 58 of the Reorganization Act and the order/Notification dated 27th December, 2002, passed by the Central Government u/s 58(3) ibid.

(1) Section 58 of the M. P. Reorganization Act, 2000.

Provisions as to Madhya Pradesh Electricity Board, State Road Transport Corporation and State Warehousing Corporation, etc-

(1) The following bodies corporate constituted for the existing State of Madhya Pradesh, namely:-

(a) the State Electricity Board constituted under the Electricity Supply Act, 1948 (54 of 1948);

(b) the State Road Transport Corporation established under the Road Transport Corporations Act, 1950 (64 of 1950); and

(c) the State Warehousing Corporation established under the Warehousing Corporations Act, 1962 (58 of 1962), shall, on and from the appointed day, continue to function in those areas in respect of which they were functioning immediately before that day, subject to the provisions of this section and arrangements for the functioning of such body corporate as may be mutually agreed upon between the successor States failing which to such directions as may, from time to time, be issued by the Central Government.

(2) Any directions issued by the Central Government under sub-section (1) in respect of the Board or the Corporation shall include a direction that the Act under which the Board or the Corporation was constituted shall, in its application to that Board or the Corporation, have effect subject to such exceptions and modifications as the Central Government thinks fit.

(3) The Board or the Corporation referred to in sub-section (1) shall cease to function as from, and shall be deemed to be dissolved on such date as the Central Government may, by order, appoint; and upon such dissolution, its assets, rights and liabilities shall be apportioned between the successor States of Madhya Pradesh and Chhattisgarh in such manner as may be agreed upon between them within one year of the dissolution of the Board or the Corporation, as the case may be, or if no agreement is reached, in such manner as the Central Government may, by order, determine:

Provided that any liabilities of the said Board relating to the unpaid dues of the coal supplied to the Board by any public sector coal company shall be provisionally apportioned between the successor organisations constituted respectively in the successor States of the existing State of Madhya Pradesh or after the date appointed for the dissolution of the Board under this sub-section in such manner as may be agreed upon between the Governments of the successor States within one month of such dissolution or if no agreement is reached, in such manner as the Central Government may, by order, determine subject to reconciliation and Finalisation of the liabilities which shall be completed within three months from the date of such dissolution by the mutual agreement between the successor States or failing such agreement by the direction of the Central Government:

Provided further that an interest at the rate of two per cent, higher than the Cash Credit interest shall be paid on outstanding unpaid dues of the coal supplied to the Board by the public sector coal company till the liquidation of such dues by the concerned successor organisations constituted in the successor States on or after the date appointed for the dissolution of the Board under this sub-section.

(4) Nothing in the preceding provisions of this section shall be construed as preventing the Government of the State of Madhya Pradesh or, as the case may be, the Government of the State of Chhattisgarh from constituting, at any time on or after the appointed day, a State Electricity Board or a State Road Transport Corporation or a State Warehousing Corporation for the State under the provisions of the Act relating to such Board or Corporation; and if such a Board or Corporation is so constituted in either of the States before the dissolution of the Board or the Corporation referred to in sub-section (1),-

(a) provision may be made by order of the Central Government enabling the new Board or the new Corporation to take over from the existing Board or Corporation all or any of its undertakings, assets, rights and liabilities in that State, and

(b) upon the dissolution of existing Board or Corporation, -

(i) any assets, rights and liabilities which would otherwise have passed to that State by or under the provisions of sub-section (3) shall pass to the new Board or the new Corporation instead of to that State;

(ii) any employee who would otherwise have been transferred to or reemployed by that State under sub-section (3), read with clause (i) of sub-section (5), shall be transferred to or re-employed by the new Board or the new Corporation instead of to or by that State.

(5) An agreement entered into between the successor States under subsection (3) and an order made by the Central Government under that sub-section or under clause (a) of sub-section (4) may provide for the transfer or re-employment of any employee of the Board or the Corporation referred to in sub-section (1),-

(i) to or by the successor States, in the case of an agreement under sub-section (4) or an order made under that sub-section;

(ii) to or by the new Board or the new Corporation constituted under sub-section (4), in the case of an order made under clause (a) of that sub-section, and, subject to the provisions of section 64, also for the terms and conditions of service applicable to such employees after such transfer or re-employment.

(2) Order/Notification dated 27th December, 2002 of the Central Government. Order/Notification dated 27th December, 2002 of the Central Government.

MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

New Delhi, the 27th December 2002

S.O. 1373 (E)-Whereas by the notification of the Government of India in the Ministry of Road Transport and Highways Number S.O. 1365 (E) dated 26-12-2002 published in the Gazette of India, Extraordinary Part II Section 3. Sub-section (ii) dated 26th December, 2002 issued under sub-section (3) of Section 58 of the Madhya Pradesh Reorganisation Act, 2000 (28 of 2000), the Central Govt. has appointed the 31st day of December, 2002 as the date on which the Madhya Pradesh State Road Transport Corporation shall cease to function and shall stand dissolved,

And whereas no agreement between the successor States of Madhya Pradesh and Chhattisgarh has been reached for apportionment of assets, rights and liabilities of the said Corporation.

Now, therefore, in exercise of powers conferred by sub-section (3) of Section 58 of the Madhya Pradesh Reorganisation Act, 2000, the Central Govt. hereby makes the following manners for the apportionment of the assets, rights and liability of the Madhya Pradesh State Road Transport Corporation between the States of Madhya Pradesh and Chhattisgarh Namely:-

(1) The field staff, buses and stores of the Madhya Pradesh State Road Corporation shall be divided on the basis of as is where is as on 1st November, 2000. The head office staff shall be shared by the ratio of 18:82 between Chhattisgarh and Madhya Pradesh. The respective States shall be responsible for their share of staff from the date of dissolution.

(2) The sharing of current assets (excluding buses and stores) and liabilities including loans, advances, etc. shall be made by arriving at the formula midway between the formulae suggested by Government of Madhya Pradesh and Chhattisgarh, i.e. between 18:82 suggested by Chhattisgarh and 26.49:73.51 suggested by Madhya Pradesh.

(3) One representative of Government of Chhattisgarh shall be taken on the Board of the Madhya Pradesh State Road Transport Corporation for the transitional period till division is complete.

(4) Salary of staff including Voluntary Retirement Scheme till the date. of dissolution shall be paid by the existing undivided Corporation.

F. No. RT-17020/14/2002-T Alok Rawat, Jt. Secy.

If we examine the issue, keeping in view the object of Section 58 of the Reorganization Act read with the clauses of the order/Notification dated 27th December, 2002 then four major consequences clearly emerge out of the order/Notification of the Central Government First, the MPSRTC as it existed till 31.12.2002 with their all assets and liability stands dissolved and cease to function on and after 31.12.2002; Second, all the assets and liability of the MPSRTC which they owned as on 31.12.2002 stands apportioned between the MPSRTC and CIDC in the manner contained in clause (1) to clause (4) of the order/Notification: Third, so far as liability relating to loans and advances of MPSRTC is concerned, it has to be calculated for being apportioned between MPSRTC and CIDC in terms of the formula specified in clause 2 and Fourth, so far the liability relating to payment of the salary of the staff of the MPSRTC, including any payment of Voluntary Retirement Scheme (VRS) till the date of dissolution is concerned, the same has to be paid only by the MPSRTC in terms of Clause 4.

One can not perhaps dispute, that when any payment is made by any employer to an employee towards his arrears of pay, or on account of his revision of pay or towards his claim of dearness allowance/additional dearness allowance then it would be safely regarded as a payment having been made towards "his salary". In other words, such payment when made has to be regarded as the payment having been made towards "arrears of salary".

It is not in dispute that the EDF Scheme was enacted by MPSRTC in the year 1985-86 for the benefit of their employees and it was in operation till 31.3.2002. In this Scheme all employees of the MPSRTC had deposited their arrears of salary which they had received due to wage revision and dearness allowance etc. Obviously, therefore, the liability of payment of interest on such deposit of arrears of salary and additional dearness allowance made by the employee in terms of this Scheme would be in the nature of "salary" as defined in Clause 4 and this was liable to be payable by the MPSRTC to their employees. It was also for the reason that all such liability accrued prior to 31.12.2002.

In the light of the above discussion, we have no hesitation in holding that the claim of the writ petitioner towards interest on such deposit had to be satisfied by the MPSRTC alone as provided by clause 4 of the order/Notification. Indeed, as observed supra, it being of the period prior to the date of dissolution 31.12.2002, the same had to be incurred only by the MPSRTC and by no other stake holders much less by the appellants herein.

Coming now to the submissions urged by the learned counsel for the MPSRTC that writ petition out of which this appeal arise was not maintainable, also has no merit for more than one reason. First, this issue was not raised by the MPSRTC before the writ court and now being raised for the first time in this appeal. In this view of the matter, it cannot be now allowed to be raised in appeal and that too in an appeal filed by one of the respondent of the writ petition against other respondents of the writ petition. Second, the issue involved in the case essentially relates to interpretation of the statutory provisions of the Act. and the order passed by the Central Government pursuant to those provisions. It is permissible in the writ petition and lastly, it does not involve any disputed questions of facts which may require any factual inquiry-

So far as the other objection raised by learned counsel for the MPSRTC regarding impleading of the Central Government in the writ petition is concerned, the same also has no merit for more than one reason firstly, even this objection was not taken by the MPSRTC before the writ court; secondly, MPSRTC being also one of the respondent has no right to raise such objection in the appeal filed by the co-respondent intersee and lastly, in any event in our view Central Government is neither a necessary and nor a proper party in the writ petition. It is for the reason that once the order is passed by the Central Government u/s 58(3) ibid then the parties to such order have to work out their rights intersee accordingly as provided in such order/Notification. It is only when the order/Notification of the Central Government is assailed by any of the Stake holders then it might be necessary to implead the Central Government as party respondent for defending such order. Such is not the case here.

Learned counsel for the MPSRTC then urged that since in terms of the EDF Scheme, the amount was being deducted at every division level and hence the liability has to be shared by the appellants in terms of Clause 2 of the order/Notification because the amount deducted remained in the division which has now allocated to the State of Chhattisgarh. We do not agree to the submissions.

As stated supra, the liability in question falls in clause 4 because it relates to payment of salary up to the date of dissolution, whereas so far as other liabilities, such as loan and advances are concerned, it falls in clause 2 of the order/Notification. It is thus clean that a distinction is made between the liabilities relating to payment of salary and the liabilities other than the salary. Since this case relates to liability pertaining to salary and hence it would be governed by clause 4 and not fall in clause 2. Moreover, as rightly pointed out by the learned counsel for the appellants from the scheme that the entire money after deduction by all division head offices used to be sent to Bhopal head office in M.P. as provided in EDF Scheme and therefore the amount always remained with the MPSRTC at Bhopal in their head office and not at divisional head. It is for all these reasons, both factually and legally, the submission has no force and is accordingly rejected.

In the light of the foregoing discussion, we can not uphold the reasoning and the conclusion arrived at by the writ court, which is in contravention of clause 4 of the order/Notification and hence deserve to be set aside. It is accordingly set aside.

As a result of the aforesaid discussion, all the apnea''s succeed and are allowed in part. The impugned common order dated 4th July, 2011 is accordingly modified to the extent by declaring that the appellants i.e. ''State of Chattisgarh'' and ''CIDC are not liable to incur and pay the interest liability as demanded by the writ petitioner pursuant to the EDF Scheme and instead, it is declared and directed that the'' MPSRTC (respondent No. 2) is and would continue to be liable to incur and pay the interest liability accrued on the deposit made by the writ petitioner pursuant to the EDF Scheme to the writ petitioner, including all kinds of liabilities arising out of the EDF Scheme.

The MPSRTC is directed to verify the claims of each writ petitioners and after making proper verification of deposit made by the writ petitioners would calculate the interest as per the method prescribed in the EDF Scheme and then pay to each writ petitioner the amount so worked out and found payable.

Let this exercise be done as early as possible, preferably within a period of 6 months from the date of this order and payment be accordingly made to the each writ petitioner. No order as to costs.