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CASE NO.: Appeal (civil)  3957 of 2006

PETITIONER: Board of Trustees, Visakhapatnam Port Trust & Others

RESPONDENT: T.S.N. Raju & Another

DATE OF JUDGMENT: 06/09/2006

BENCH: Dr. AR. Lakshmanan & Tarun Chatterjee

JUDGMENT: J U D G M E N T (Arising out of SLP (C) Nos. 26322-26323/2005)

Dr. AR. Lakshmanan, J.

Leave granted.

The Board of Trustees, Visakhapatnam Port Trust and  others are the appellants before us and the respondents are  employees of the said Port Trust.  The matter arises out of an insistence of two employees of  the Visakhapatnam Port Trust (in short ’the VPT’) to seek  retirement under a voluntary retirement scheme, even though,  according to the employer Port Trust they are not entitled to  avail the benefit of the scheme because they have attained the  cut off age of 58 years before their cases could be considered.  The learned single Judge allowed the writ petition filed by  the respondents and directed the Port Trust to consider and  accept the voluntary retirement scheme (hereinafter called  ’VRS’) of the respondents as on their date of application and  pass appropriate orders and pay all the benefits thereunder.   However, the learned single Judge held that the respondents  are not entitled for pension on the ground that they have  retired on attaining the age of superannuation at the age of 60  years and they shall be entitled for pension as per the date of  retirement under the VRS to be extended to the respondents.   The learned Single Judge further held that the salaries  received by the respondents till their age of superannuation  shall not be recovered if paid as they have worked.  The  learned Judges of the Division Bench, by their order dated  21.11.2005 dismissed the appeal filed by the VPT and directed  the VPT to pass orders on the applications of the respondents  for voluntary retirement within a period of one month from the  date of judgment.  According to the VPT, both the learned single Judge and  the Judges of the Division Bench of the High Court have mis- read the applicability of the Scheme and directed the VPT to  consider and accept the case of the respondents and that such  a direction is unsustainable in law and is likely to have a  cascading effect.  Therefore, the VPT have come before this  Court through the above civil appeals arising out of Special  Leave Petition Nos. 26322-26323 of 2005.  The short facts relevant to the issue in dispute are as  follows: With a view to reduce surplus manpower, the Union  Ministry of Surface Transport (now called the Ministry of  Shipping, Road Transport and Highways - Department of

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Shipping) came out with a scheme of voluntary retirement.   This was made applicable to all the Ports.  The scheme of  voluntary retirement was introduced in the appellant-VPT  pursuant to the direction of the Ministry of Surface Transport  contained in its letter No. LB-16016/7/88-L.II dated  29.08.1991.  The said scheme is annexed as Annexure-P1  which reads as under: "GOVERNMENT OF INDIA MINISTRY OF SURFACE TRANSPORT (LABOUR DIVISION)

No. LB-16016/7/88-L.II    New Delhi, 29th August, 1991

To

Shri P.V.R.K. Prasad Chairman, Vishakhapatnam Port Trust, Vishakhapatnam-530035

Subject:-       Voluntary Retirement Scheme for Port Trusts  and Dock Labour Boards

Sir, I am directed to say that the matter regarding  introduction of a uniform Voluntary Retirement Scheme  for officers, employees and workers of Port Trusts and  Dock Labour Board has been under consideration of the  Government. After careful consideration it has been  decided that Port Trusts and Dock Labour Boards can  introduce Voluntary Retirement Scheme with a view to  reducing surplus manpower subject to the following  terms and conditions:-

2. (a) An employee who has completed 10 years’ of  services or completed 40 years’ of age may seek  voluntary retirement by a written request.

(b) The Port Trust and Dock Labour Board will have the  right not to grant voluntary retirement for reasons to be  recorded in writing.

(c) The terminal payments available to an employee who  seeks voluntary retirement would be:-  

i.      the balance in his Provident Fund Account  payable as per the GPF/CPF regulations  applicable to him; ii.     cash equivalent of accumulated earned leave as  per the       rules of the Port Trust/Dock Labour  Board; iii.    gratuity as per Gratuity Act or the Gratuity  Scheme applicable to the employees; iv.     one month’s/three month’s notice pay (as per the  conditions of service applicable to him). v.      pension as per the rule Port Trust/Dock Labour  Board.

(d) In addition, an employee whose request for  Voluntary Retirements is accepted would also be  entitled to an ex-gratia payment equivalent to 1=  months emoluments (Pay+ D.A) for each completed year  of service or the discounted value of the emoluments (at  12% rate of discount) that would have become payable  for the balance months of service left, whichever is less.

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For example, an employee who has put in 24 years of  service and has got only one year of service for normal  retirement, he will get ex-gratia payment of only 12  months emoluments (pay+DA) discounted at 12% per  annum and not 36 months emoluments.

(e) In addition, the employee and his family would also  be entitled to travel by entitled class to the place where  he intends settling down.

3.      While introducing the voluntary retirement  scheme, Port Trusts and Dock Labour Boards will make  an assessment of surplus man-power taking into  account the present and future operational  requirements. While accepting the Voluntary Retirement  of the employee, the Port Trust/Dock Labour Board will  also issue an order to the vacancy caused by the  Voluntary retirement would not be filled up and the post  is abolished.

4.      No claim of the dependents of the employees going  on voluntary retirements for any compassionate  appointment under the Port Trust/Dock Labour Board  will be entertained. 5.      The Voluntary Retirement Scheme would be  financed by the Port Trusts/ Dock Labour Boards from  their own resources and no budgetary support in the  form of loans will be granted by the Government, after  seeking approval of the Ministry.

6.      Port Trusts and Dock Labour Boards can  introduce an Voluntary Retirement Scheme on the  above parameters, after seeking approval of the  Ministry.        

Yours faithfully Sd/- (P.K.MISHRA) Director"

On 30.10.1991, the approval of the Board of Trustees of  the appellant was sought for introducing the scheme of  voluntary retirement.  The terms and conditions of the scheme  and its applicability were detailed therein.  The scheme is  annexed along with this appeal and marked as Annexure-P2  which is reproduced hereunder: "VISHAKHAPATNAM PORT TRUST

MEETING NO.4 OF 1991-92 OF THE BOARD OF  TRUSTEES TO BE HELD  ON 30.10.1991

AGENDA ITEM NO. 36

Sub:    Voluntary Retirement Scheme for the Port Trusts  and Dock Labour Boards.          The Ministry has decided that Port Trusts and  Dock Labour Boards can introduce Voluntary  Retirement Scheme for its officers, Employees and  Workers with a view to reduce the surplus manpower  subject to following terms and conditions:

(a)     An employee who has completed 10 years of  service or completed 40 years of age may seek

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Voluntary Retirement by a written request.

(b)     The Port Trust and Dock Labour Boards will have  the right not to grant Voluntary Retirement for  reasons to be recorded in writing.

(c)     The terminal payments available to an employee  who seeks Voluntary Retirement would be:- (i)     The balance in his Provident Fund Account  payable as per the GPF/CPF Regulations  applicable to him; (ii)    Cash equivalent of accumulated earned leave  as per the rules of the Port Trust/Dock  Labour Board; (iii)   Gratuity as per Gratuity Act or the Gratuity  Scheme applicable to the employee; (iv)    One month’s/ Three month’s Notice Pay (as  per the conditions of service applicable to  him); (v)     Pension as per the rules of the Port Trust/  Dock Labour Board.

(d)     In addition, an employee whose request for  Voluntary Retirement is accepted would also be  entitled to an ex-gratia payment equivalent to 1=  months emoluments (Pay + D.A) for each  completed year of service or the discounted value  of the emoluments (at 12% rate of discount) that  would have become payable for the balance  months of service left, whichever is less.

(e)     In addition, the employee and his family would  also be entitled to travel by the entitled class to  the place where he intends setting down.

Under the above scheme while accepting the  Voluntary Retirement of the employee, the Port  Trust/Dock Labour Board will also issue an order that  the vacancy caused by the Voluntary Retirement would  not be filled up and the post is abolished and also that  no claim of the dependents of the employee going on  Voluntary Retirement for any compassionate  appointments under the Port Trust and Dock Labour  Boards will be entertained. The above scheme has to be  financed by the Port Trust/ Dock Labour Board from  their own resources and no budgetary support would be  granted by the Government.

The Ministry while communicating the above  scheme, has stated that the Port Trust and Dock Labour  Boards can introduce a voluntary Retirement Scheme  on the above parameters, after making an assessment of  surplus man power taking into account the present and  future operational requirement, subject to approval of  the Government.

A copy of the Ministry’s letter No. LB-16016/7/88- L.II, dt. 29.08.1991 on the above subject is enclosed for  reference.

In view of the Ministry’s instructions, it is  proposed to introduce a Voluntary Retirement Scheme  on the above parameters, in our Port also.

Board’s approval is, therefore, requested to

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introduce a Voluntary Retirement Scheme in our Port  on the parameters prescribed by the Ministry of Surface  Transport in its letter No. LB;16016/7/88-L.II,  dt.29.08.1991 subject to approval of the Ministry.

Encl.: As above."          

Respondent No.1 T.S.N. Raju applied for voluntary  retirement on 16.08.1999 but withdrew his application for  VRS on 06.04.2000.  He again applied for VRS on 27.04.2000.   He averred in his writ petition that the application was made  on the basis that Port has informally alerted that Management  is serious about considering the request of the employees  seeking VRS.  In the counter affidavit filed by the VPT, it was  categorically stated that the Management had issued no letter  or circular to such effect.  On 26.07.2000, respondent No.1  was promoted as Assistant Engineer (Civil) on ad hoc basis but  he did not renew his application. Respondent No.2 - R. Rama Rao applied for VRS on  28.04.2000.  In a meeting of the Heads of Department of the  VPT, the concern expressed by the Secretary, Department of  Shipping, Ministry of Surface Transport about the VRS was  discussed.  It was decided by the Chairman that the VRS  should be considered in the cases of those employees who are  below the age of 58 years.  The said decision is annexed along  with the appeal as Annexure-P3 which reads as under:  

"VISHAKHAPATNAM PORT TRUST

ADMINISTRATION DEPARTMENT

No. ADMN/VRS/2000 Date: 23.08.2000 C.E./C.M.E./D.C./T.M./F.A.&C.A.O

C.M.O/C.M.M./DIRECTOR (R&P)

MANAGER (OP)

ORDER

Sub:    Grant of Voluntary Retirement under V.R. Scheme  to the employees- M.O.S.T. Letter No. LB- 16016/7/94-L-II, dt.29.08.1991-Reg.

During the daily HODs Meeting held on  23.08.2000, keeping in view the concern expressed by  the Secretary (Dept. of Shipping), M.O.S.T, Govt of  India, a review has been made by the Chairman on the  implementation of voluntary retirement under the  scheme to the employees of V.P.T. and it has been  decided that the Voluntary Retirement Scheme should  be considered in the case of those employees who are  below the age of 58 years.

All the HODs are, therefore, requested to forward  the V.R.S. cases of only those employees who have not  attained the age of 58 years.

This issues with the approval of the Chairman.

SECRETARY

VISHAKHAPATNAM PORT TRUST"

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On 29.08.2000, respondent No.1 made a representation  to the Chairman of the VPT to consider his application dated  27.04.2000 which he had made before being promoted as  Assistant Engineer.  However, his case could not be  considered for VRS because there were several applications  pending and he was very junior in rank of A.E.(C).  By the time  the application of senior A.E.s were processed, the required  number had already been arrived at and the case of  respondent No.1 could not be considered.   Being aggrieved by non-consideration of his case,  respondent No.1 filed Writ Petition No. 17697 of 2000 before  the High Court of Andhra Pradesh on 03.09.2000 with the  following prayers: "For the reasons and in the circumstances stated in the  accompanying affidavit, the petitioners herein pray that  this Hon’ble Court in the interest of justice be pleased to  issue a writ or direction more particularly one in the  nature of writ of Mandamus

i.      declaring the action of the respondents in not  accepting the offer of the writ petitioner to retire  from the service of the Vishakhapatnam Port Trust  on Voluntary retirement basis as unjust and  illegal; and

ii.     consequently direct the respondents to treat the  writ petitioner to have retired from its service on  voluntary retirement basis with immediate effect  by extending all the terminal benefits that flow  there from and pass such order or further order or  orders as are deemed fit and proper in the  circumstances of the case."

Being aggrieved by non-consideration of his case,  respondent No.2 Rama Rao filed Writ Petition No. 23543 of  2000 before the High Court on 18.09.2000 with the following  prayers:

(i)     declaring the action of the respondents in not  accepting the offer of the writ petitioner to retire from  the service of the Vishakhapatnam Port Trust on  Voluntary retirement basis as unjust and illegal; and

(ii)    consequently direct the respondents to treat the  writ petitioner to have retired from its service on  voluntary retirement basis with immediate effect by  extending all the terminal benefits that flow there from  and pass such order or further order or orders as are  deemed fit and proper in the circumstances of the case."

Both these writ petitions were heard together.  The VPT  filed a detailed counter affidavit denying the allegations of the  respondents that cases of others similarly situate had been  considered and they had been discriminated against by the  VPT.  The retirement age of the employees of the VPT was rolled  back from 60 years to 58 years.  Respondent No. 1 (Born on  01.08.1942) and Respondent No. 2 (Born on 23.09.1941) were  superannuated from service on 30.11.2000.  The learned  single Judge passed a common judgment and allowed both the  writ petitions and directed the VPT to consider and accept the  VRS of the respondents herein with certain other directions.   Being aggrieved, the VPT preferred two separate Letter Patent  Appeals being Writ Appeal Nos. 2105 and 1558 of 2005.  By

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the impugned common final judgment, both the appeals had  been dismissed with a direction to the VPT to pass orders on  the applications of the respondents within a period of one  month.  Aggrieved by the above common judgment, the VPT  has come before us by filing the above civil appeals. We heard Mr. Kailash Vasudev, learned senior counsel  assisted by Mr. Gopal Singh, learned counsel for the  appellants and Mr. L.N. Rao, learned senior counsel assisted  by Mr. G.Ramakrishna  Prasad, learned counsel for the  respondents.  Mr. Kailash Vasudev, learned senior counsel has  submitted that the Division Bench has not appreciated the  contentions of the VPT against the order of the learned single  Judge.  According to him, it was specifically argued that  undeniably it is not mandatory for any organization to accept  every application that is received from the employees seeking  voluntary retirement and that the VPT was authorized to take  a decision on 23.08.2000 to consider applications of only  those employees who have not crossed 58 years of age.  It is  further submitted that the learned single Judge and of the  Division Bench of the High Court have failed to appreciate that  the scheme clearly stipulates of basic condition that voluntary  retirement under a scheme cannot be sought for as a matter of  right.  The factual position with regard to the other employees  whose cases for voluntary retirement were considered had  been placed by filing a counter affidavit but has been  overlooked by the High Court.  Learned senior counsel further  submits that the High Court has erred in directing that even  though the writ petitioners had continued in service beyond 58  years till their superannuation and had received salary they  would not be required to refund the excess amount received  and that they shall be extended benefits under the VRS as on  the date of their applications.  It is further urged that a person  who has crossed the age of 58 years is not eligible to be  considered for retirement under the VRS.  Respondent No.2  had in fact completed the age of 58 years by 23.09.1999.   Therefore, learned senior counsel would submit that the  orders of the learned single Judge as well as the Division  Bench are arbitrary and have been passed without taking into  consideration these vital facts.   Learned senior counsel appearing for the  respondents/writ petitioners submitted that the Port Trust  has no discretion to refuse the offer to go on retirement under  the voluntary retirement scheme except in cases of the  exigencies of service or the compelling necessity or the  indispensability of the employees concerned.   The Port Trust having accepted the offer of similarly  placed employees who have also completed 57 years of age and  also 58 years of age to go on voluntary basis, declining to  permit the respondents to retire on voluntary retirement basis  is clearly discriminatory.   The Port Trust has committed illegality in not passing  any orders on the application dated 13.9.2000 to retire from  its service on voluntary retirement basis though the  application has been forwarded for acceptance by the Head of  the Department, Financial Advisor & Chief Accounts Officer  and the Vigilance Department.  It is, therefore, contended that  the Port Trust has not acted fairly and justly in the case of  respondent \026 Sri Rama Rao.  In Bank of India & Ors. Vs. O.P. Swarnakar & Ors.,  (2003) 2 SCC 721, the moot question posed and answered by  this judgment was whether the VRS is an offer/proposal  or  merely an invitation to offer.  The question was whether the  Banks intended to make an offer or merely issued an  invitation to treat is essentially a question of fact.  In

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paragraph 49, this Court held as under: "49. An offer indisputably can be made to a group of persons  collectively which is capable of being accepted individually  but the question which has to be posed and answered is as  to whether having regard to the service jurisprudence: the  principles of Indian Contract Act would be applicable in the  instant case. It is the specific case of the "Banks" that the  schemes had been floated by way of contract. It does not  have any statutory flavour. Reference to the pension scheme  framed under the regulations was made for computation of  the pension."

The learned Judges of the Bench have also elaborately  discussed the use of the term "offer" or "proposal" and held in  paragraphs 59, 60, 61, 62 and 74 as under: "59. The request of employees seeking voluntary retirement  was not to take effect until and unless it was accepted in  writing by the competent authority. The Competent  Authority had the absolute discretion whether to accept or  reject the request of the employee seeking voluntary  retirement under the scheme. A procedure has been laid  down for considering the provisions of the said scheme to the  effect that an employee who intends to seek voluntary  retirement would submit duly completed application in  duplicate in the prescribed form marked "offer to seek  voluntary retirement" and the application so received would  be considered by the competent authority on first come first  serve basis. The procedure laid down therefor suggests that  the applications of the employee would be an offer which  could be considered by the bank in terms of the procedure  laid down therefor. There is no assurance that such an  application would be accepted without any consideration." "60. Acceptance or otherwise of the request of an employee  seeking voluntary retirement is required to be communicated  to him in writing. This clause is crucial in view of the fact  that therein the acceptance or rejection of such request has  been provided. The decision of the authority rejecting the  request is applicable to the Appellate authority. The  application made by an employee as an offer as well as the  decision of the bank thereupon would be communicated to  the respective General Managers. The decisions making  process shall take place at various levels of the banks." "61. The following, therefore, can be deduced: (i) The banks treated the application from the employees as  an offer which could be accepted or rejected. (ii) Acceptance of such an offer is required to be  communicated in writing. (iii) The decision making process involved application of  mind on the part of several authorities. (iv) Decision making process was to be formed at various  levels. (v) The process of acceptance of an offer made by an  employee was in the discretion of competent authority. (vi) The request of voluntary retirement would not take effect  in praesenti but in future. (vii) The Bank reserved its right to alter/rescind the  conditions of the scheme." "62. From what has been noticed before, it is apparent that  the Nationalized banks in terms of the scheme had secured  for themselves an unfettered and unguided right to deal with  the jural relationship between themselves and their  employees" "74. We, therefore, have no hesitation in coming to the  conclusion that the voluntary scheme was not a proposal or  an offer but merely an invitation to treat and the

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applications filed by the employees constituted an ’offer’."

In HEC Voluntary Retd. Employees Welfare Society &  anr. Vs. Heavy Engineering Corpn. Ltd. & Ors., (2006) 3  SCC 708, this Court in paragraph 11 held as under: "11.An offer for voluntary retirement in terms of a scheme,  when accepted, leads to a concluded contract between the  employer and the employee. In terms of such a scheme, an  employee has an option either to accept or not to opt  therefor.  The scheme is purely voluntary, in terms whereof  the tenure of service is curtailed, which is permissible in law.  Such a scheme is ordinarily floated with a purpose of  downsizing the employees.  It is beneficial both to the  employees as well as to the employer. Such a scheme is  issued for effective functioning of the industrial  undertakings. Although the Company is "State" within the  meaning of Article 12 of the Constitution, the terms and  conditions of service would be governed by the contract are  employment. Thus, unless the terms and conditions of such  a contract are governed by a statute or statutory rules, the  provisions of the Contract Act would be applicable both at  the formulation of the contract as also the determination  thereof. By reason of such a scheme only is an invitation of  offer floated. When pursuant to or in furtherance of such a  Voluntary Retirement Scheme an employee opts therefore, he  makes an offer which upon acceptance by the employer gives  rise to a contract. Thus, as the matter relating to voluntary  retirement is not governed by any statute, the provisions of  the Contract Act, 1872, therefore, would be applicable too.  (See Bank of India v. O.P.Swarnakar (2003) 2 SCC 721.)"

We have carefully considered the rival submissions made  by the respective parties.  We have also perused the pleadings,  judgments delivered by the learned single Judge and the  Division Bench, voluntary retirement scheme, annexures and  documents.   In our opinion, under the Scheme, the Chairman of the  Port Trust has an absolute right either to accept or not to  accept the applications filed by the employees for retirement  under the voluntary retirement scheme.  We have already  reproduced the entire scheme dated 29.8.1991 of the  Government of India, Ministry of Surface Transport.  The  Government of India has decided that Port Trust and Dock  Labour Board can introduce voluntary retirement scheme with  a view to reduce surplus manpower subject to the terms and  conditions set out in the voluntary retirement scheme.   Clauses 2(a) and 2(b) of the Scheme are very relevant for the  present purpose.  Clause 2(a) clearly stipulates that an  employee who has completed ten years of service or completed  40 years of age may seek voluntary retirement by a written  request.  Clause 2(b) clearly stipulates that the Port Trust and  Dock Labour Board will have a right not to grant voluntary  retirement for reasons to be recorded in writing.  Clause 6 of  the said Scheme provides that the Port Trust and Dock Labour  Board can introduce a voluntary retirement scheme on the  parameters mentioned in the scheme framed by the  Government of India after seeking approval of the Ministry. A meeting of the Board of Trustees of the VPT was held  on 30.10.1991.  In the said meeting, the Trustees considered  the VRS formulated by the Government of India and decided to  introduce the voluntary retirement scheme on the parameters  suggested by the Government of India in VPT also.  Board’s  approval was, therefore, sought to introduce the VRS in the  VPT on the parameters prescribed by the Ministry of Surface  Transport in its letter No. LB-16016/7/88-L.II, dated

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29.8.1991 subject to approval of the Ministry.   Annexure P-3 is relevant to be considered in the present  context.  By the said order, VPT, Administration Department,  passed an order stating that a review has been made by the  Chairman on the implementation of voluntary retirement  under the scheme to the employees of VPT and that it has  been decided that the voluntary retirement scheme should be  considered in the cases of those employees who are below the  age of 58 years.  In view of the said decision, the Heads of the  Department were requested to forward the voluntary  retirement scheme cases of only those employees who have not  attained the age of 58 years.  Though it is contended that the  Port Trust had no authority to modify the voluntary retirement  scheme, we are unable to accept the said submission made by  the respondent in view of clause 2(b) of the Scheme which  enable the Port Trust and Dock Labour Board to alter the  scheme and also have a right not to grant voluntary retirement  for the reasons to be recorded in writing. We have perused the order passed by the learned single  Judge.  In our view, the order of the learned single Judge is  without jurisdiction and beset with material irregularities.  The  learned single Judge ought to have seen that under the  scheme the Chairman of VPT has absolute right either to  accept or not to accept the applications filed by the employees  for retirement under the voluntary retirement scheme.  The  learned single Judge also did not mention how there was  discrimination between those who have been granted  voluntary retirement and those who have not.  The learned  single Judge in the case of Sri Rama Rao (respondent No.2  herein) has not noticed that he had made a representation on  29.8.2000 addresssed to the Chairman while he was in the  category of CTOW and his application was not considered as  he was the junior most Assistant Engineer.  The learned single  Judge ought to have considered his application dated  27.4.2000 by which he applied while he was in the cadre of  C.T.O.W. (Class-III) to go on voluntary retirement.  But by this  time, the applications of other A.Es who are senior in the order  of receiving, were considered and therefore, his application at  this stage could not be considered as Sri Rama Rao being the  junior most A.E. among the V.R.S. applied A.Es and his  application dated 29.8.2000 is least in the order of seniority of  application received for V.R.S.  In any event, the learned single  Judge ought not to have issued the direction to the  Department to accept the voluntary retirement of the  respondent as on the date of their application and pass  appropriate order.  The learned Judge at any rate can only  direct the Port Trust to consider their applications for  voluntary retirement and pass appropriate orders.  The order  passed by the learned single Judge is, therefore, beyond the  jurisdiction of the Court in issuing such direction.  Likewise,  the Division Bench also committed the same error in issuing  the directions. Respondent No.1 T.S.N. Raju applied for voluntary  retirement on 16.08.1999 but withdrew his application for  VRS on 06.04.2000.  He again applied for VRS on 27.04.2000.   He averred in his writ petition that the application was made  on the basis that Port has informally alerted that Management  is serious about considering the request of the employees  seeking VRS.  In the counter affidavit filed by the VPT, it was  categorically stated that the Management had issued no letter  or circular to such effect.  On 26.07.2000, respondent No.1  was promoted as Assistant Engineer (Civil) on ad hoc basis but  he did not renew his application. On 29.8.2000, respondent No.1 made a representation to  the Chairman of the VPT to consider his application dated

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27.4.2000 which he had made before being promoted as A.E.   However, his case could not be considered for VRS because  several applications were pending and he was very junior in  the rank of A.E.  By the time, the application of senior A.Es  were processed, the required number had already been arrived  at and the case of respondent No.1 could not be considered.   As already noticed, Sri Rama Rao (respondent No.2) was  appointed as sub-overseer on 2.1.1969 in the Civil  Engineering Department of VPT and completed about 31 years  of service as on date of his retirement on superannuation by  30.11.2000 A/N.  He has been promoted as Assistant  Engineer initially on ad hoc basis and subsequently  regularized as A.E. w.e.f. 17.1.2000.  The Scheme of VRS has  been introduced in VPT as per Ministry of Surface and  Transport (Labour Division) letter No. L.B. 16016/7/88-L.II  dated 29.08.1991 with a view to reduce surplus manpower  subject to sustain condition specified therein.         It is true that Sri Rama Rao (respondent No.2 herein) has  applied for retirement under the voluntary retirement scheme  vide his application dated 28.4.2000 seeking retirement w.e.f.  30.11.2000.  Sri Rama Rao was posted as A.E. for the  maintenance section of C.I.S.F. residential colony consisting  maintenance repairs, drains etc., including water supply to  entire colony, thus his services are very much essential to the  department, therefore, his application dated 28.4.2000 has  not been considered favourable keeping in view the exigencies  of work essentially of cadre, feasibility of surrendering the post  etc., since as per Government guidelines V.P.T. has to show  appropriate surplus in the manpower in the cadre without  causing hindrance to the normal operations of the  department. Further as per the above circular while accepting  V.R.S., the Port Trust has to ensure to surrender the vacancy  caused due to retirement of the incumbent on V.R.S.   This apart, the V.R.S. accepted by the Chairman, VPT to  some of the employees of the VPT who have completed 58  years of age is only prior to 23.8.2000 by which time the  retirement age limit of 60 years was in force and the same is  not relevant to the case on hand as in the case of the  respondent, he was holding important works under his control  and his continuance was considered necessary in VPT service  and thereby VRS was not granted to him.  In the respondent’s  case, no such decision has been taken even on his application  dated 13.9.2000 addressed by him direct to Deputy Chairman.   The Circular dated 29.8.2000 that the employee who was  desirous to apply for retirement under voluntary retirement  scheme may apply direct to Dy. Chairman was only to  consolidate such applications at administrative level before  arriving at a decision, but it does not ensure ready acceptance  as alleged by the respondents.  We have already reproduced  the prayers made in the writ petition of both the respondents.   The prayer was to declare the inaction on the part of the Port   Trust in not accepting the offer of the respondents to retire  from service of the Port Trust on voluntary retirement basis as  unjust and illegal.  A further prayer was also made to direct  the Port Trust to treat the respondent to have retired from its  service on voluntary retirement basis with immediate effect by  extending all the terminal benefits that flow therefrom and  pass such other or further order or orders as are deemed fit  and proper in the circumstances of the case.   The respondents have not questioned the validity and  correctness of the voluntary retirement scheme introduced by  the Government of India and the decision taken by the Port  Trust in its meeting of the Board of Trustees held on  30.10.1991 pursuant to the decision of the Ministry in terms  of which Port Trust and Dock Labour Board are not to grant

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voluntary retirement to everyone.  It is not in dispute that  beneficial scheme was introduced with a view to reduction of  surplus manpower.   The High Court, in our opinion, could not entertain  grievance of the respondents even on their own showing.  It  was based merely on a presumption that applications for VRS,  if filed before April, 2000, would be considered by July, 2000  when no such circular or letter had been issued by the Port  Trust.  The Scheme also provides that the Port Trust and Dock  Labour Board will have a right not to grant voluntary  retirement for the reasons recorded in writing.  Such a right  given to the Port Trust was not questioned in the writ petition.   In our opinion, the Chairman is competent to frame the  Scheme having regard to the exigencies of work and no one  can claim voluntary retirement as of right.  The learned  Judges of the High Court have also not seen that the  respondent’s application for voluntary retirement cannot be  considered in view of the seniority of service of the employees  concerned.   In our opinion, the request of the employees seeking  voluntary retirement was not to take effect until and unless it  was accepted in writing by the Port Trust Authorities.  The  Port Trust Authorities had the absolute discretion whether to  accept or reject the request of the employee seeking voluntary  retirement under the scheme.  There is no assurance that  such an application would be accepted without any  consideration.  The process of acceptance of an offer made by  an employee was in the discretion of the Port Trust.  We,  therefore, have no hesitation in coming to the conclusion that  the VRS was not a proposal or an offer but merely an  invitation to treat and the applications filed by the employees  constituted an offer. The reasons assigned by the learned single Judge and  the learned Judges of the Division Bench in the orders are  erroneous and unsound and, therefore, they are set aside. For the foregoing reasons, we allow the appeals and set  aside the order passed by the Division Bench affirming the  order of the learned single Judge.  However, there shall be no  order as to costs.