Suresh Babu T. and Others vs The State of Kerala and Others

A. Muhamed Mustaque, J.

These writ petitions are filed by employees working under the Kerala State Financial Enterprises Ltd. (for short, "KSFE"). The issue in these writ petitions pertain to enhancement of retirement age of the employees of KSFE from 58 years to 60 years. They also challenge the decisions of the Government dated 22/07/2014 and 25/07/2014 (Exts.P7 and P8 produced in W.P. (C) No. 13748/2014) declining the above request. The above decision was rendered pursuant to the direction of this Court in W.P. (C) No. 20079/2013 and connected cases. It is stated in the impugned orders as follows:

(in Ext. P7 produced in W.P. (C) No. 13748/2014)

"2. The enhancement of retirement age of the employees of Public Sector Undertaking''s is to be decided by the Government as a matter of policy. Finance Department has taken a stand not to enhance the retirement age of employees of Public Sector Undertaking''s at this point of time and the position has been intimated to the Secretary Taxes Department through a DO letter."

(in Ext. P8 produced in W.P. (C) No. 13748/2014)

"Government have examined the matter in detail in the light of the judgment mentioned above. Enhancement of the retirement age of employees of Public Sector Undertaking is to be decided by the Government as a matter of policy. Finance Department in Government has already taken a stand not to enhance the retirement age of employees of Public Sector Undertakings at this point of time and communicated the matter to you."

It is submitted that KSFE is a company incorporated under the Companies Act. It is a Private Limited Company promoted and controlled by the State. The bye-laws of the company are framed by the Board of Directors of the company with the prior approval of the Governor.

The employees of KSFE made a representation before the Board to enhance the retirement age from 58 years to 60 years. In the memorandum of the writ petition it is pointed out that many State Level Public Enterprises has enhanced the retirement age to 60 years. The Board in its 460th meeting held on 25/06/2014 considered the request of the employees and as per Ext. P6 resolution No. 6590 (produced in W.P. (C) No. 13748/2014), resolved to recommend to the Government of Kerala the enhancement of retirement age of the KSFE employees from 58 years to 60 years. Since some of the employees are due to retire pending consideration of the decision of the Government, approached this Court in W.P. (C) No. 20079/2013 and connected matters. Therein this Court directed the Government to take a final decision in the matter and accordingly, the impugned decision was taken by the Government.

In the impugned decision the only reason stated for rejecting the claim for enhancement of retirement age is that the issue relating to the enhancement of retirement age is a policy decision to be taken by the Government and the Government had not taken a decision to enhance the retirement age of the Public Sector Undertakings at that point of time and therefore, the request of the petitioners cannot be considered.

The learned counsel for the petitioners challenged this decision of the Government on various grounds. Petitioners point out various instances wherein the Government allowed enhancement of age of retirement in various Corporations such as Kerala Artisans Development Corporation Limited, Kerala State Warehousing Corporation, Kerala State Information Technology Infrastructure Limited.

The Board of Directors of KSFE have decided to enhance the retirement age of KSFE employees from 58 years to 60 years. Accordingly, a resolution was submitted before the Government. The Board is required to have prior approval of the Government to amend the bye-laws for enhancing the retirement age of the employees. The reference in the Articles of Association of KSFE is to have the prior approval of the Governor. Under Article 166 of the Constitution of India, all executive action of the Government of a State shall be expressed to be taken in the name of the Governor. The question is whether there is any need to have a pre-existing policy of the Government to enhance retirement age.

The function of the Governor, in terms of the Articles of Association, is in relation to the company. This function is not an executive function as contemplated under the Constitution or under any Legislation. The "Governor" in this context is to be understood as an incorporation by reference to the executive function being exercised by the Government in the name of the Governor. The reference in the bye-law "to have a prior approval of the Governor", therefore, must be understood in regard to satisfaction by the Government on the viability of the company having enhanced age of retirement from 58 years to 60 years. This do not depend upon any policy of the Government. The policy of the Government being discharged through an executive function has nothing to do with the duty being discharged in terms of the Articles of Association of the Company. It is obvious that the matter of enhancement of age of retirement of the employees of KSFE is not placed before the Council of Ministers for their advice and views. The decision has to be taken by the Government with a specific reference to the Company in terms of the Memorandum of Association and Articles of Association of the Company.

As afore-noted, the decision of the Government for enhancement of the age of the employees of KSFE is not depend upon any policy of the Government. This decision has to be taken independent, based on the resolution passed by the Board of Directors of the Company. Accordingly, the impugned orders (Exts. P7 and P8 produced in W.P. (C) No. 13748/2014) are set aside. The writ petitions are disposed of with the following directions:

i. The Government shall take appropriate decision based on Ext. P6 resolution (produced in W.P. (C) No. 13748/2014), dated 25/06/2014, of the Board of Directors of the Company in its 460th meeting, within two months from the date of receipt of a copy of this judgment.

ii. The petitioners shall be permitted to continue till a decision is taken by the Government in this matter.

iii. If an adverse decision is taken not to enhance the age of retirement, the petitioners shall be permitted to continue for a further period of two weeks from the date of decision of the Government to enable them to work out alternative remedy.

iv. The payment of salary to the employees who are continuing based on the interim order would depend upon the outcome of the decision of the Government. All other issues in the writ petitions are left open. No costs.