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CASE NO.: Appeal (civil) 3715-3716  of  2001 Appeal (civil)  3717     of  2001 Appeal (civil)  3718     of  2001 Writ Petition (civil)   499      of  2000

PETITIONER: DTC RETIRED EMPLOYEES’ ASSOCIATION & ORS., ETC.ETC.   ..

       Vs.

RESPONDENT: DELHI TRANSPORT CORPORATION, ETC                                   ..    RESPONDENTS

DATE OF JUDGMENT:       08/05/2001

BENCH: S. Rajendra Babu & K.G. Balakrishnan

JUDGMENT:

K.G. BALAKRISHNAN, J.

       Leave granted.

L...I...T.......T.......T.......T.......T.......T.......T..J

   In all these appeals, the judgment of the Division Bench of  the Delhi High Court passed on 16.3.2000 in L.P.A.  Nos. 294/97,  297/97  and  13/99, is challenged  by  DTC  Retired Employees’  Association and others.  Writ petition No.499 of 2000  is  filed by a separate group of retired employees  of the Delhi Transport Corporation.

   The  Delhi  Transport  Corporation  (for  short,  "DTC") introduced  a  Pension Scheme on 27.11.1992 for its  retired employees.  The Central Govt.  sanctioned this scheme and it was  to  be  operated by the Life Insurance  Corporation  of India on behalf of DTC.  As per the scheme, all employees of DTC retiring on or after 3.8.1981 were to be covered for the purpose  of  pension  benefit.  The existing  employees  and those who retired on or after 3.8.1981 had to exercise their option for the Pension scheme.  The retired employees opting for the Pension Scheme had to refund the employer’s share of provident   fund  received  by   them  under  the  Employees Provident  Fund Act with interest thereon.  Those employees, who  joined  the service of DTC with effect from  27.11.1992 and thereafter, had no option but to be compulsorily covered under the Pension Scheme.

   It seems that because of certain financial difficulties, the  Pension  Scheme could not be implemented in time.   The various  employees associations filed writ petitions  before the  Delhi High Court seeking implementation of the  Pension scheme.  In addition, some retired employees of the DTC also filed  writ  petitions before the Delhi High  Court  praying that  the Pension Scheme should be made applicable to  those employees   also  who  had   retired  under  the   Voluntary Retirement  Sheme.   The High Court accepted that  plea  and

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held  that  the  Pension  Scheme be extended  to  them  also provided  they refund the employer’s share of provident fund received  by  them  under  the E.P.F.  Act at  the  time  of retirement,  with  interest thereon.  A yet another  set  of employees  also filed a writ petition contending that  while exercising  their  option,  they  were  not  liable  to  pay interest  on  the employer’s share of provident fund.   This writ peition was dismissed by the High Court.

   L.P.A.   No.  33 of 1998 was an appeal filed before  the Delhi  High  Court by DTC.  Along with all  other  connected matters,  the  said L.P.A.  was heard and a common  judgment was  passed on 16.3.2000 in all the matters, including those giving  rise  to the present appeals.  Before  the  Division Bench  of  the High Court, various questions were raised  by the   parties.   The  DTC   Retired  Employees   Association contended  that  DTC was not entitled to charge interest  on the  amount  of employer’s share of provident fund which  is required  to  be  refunded by the  retired  employees  while exercising   option  to  avail   the  Pension  Scheme.   The Employees  Association also conteded that the excess  amount of  gratuity received by them was not liable to be  returned and  even  if it is to be returned, they were not liable  to pay  interest  on  such gratuity.  Some of the  retired  DTC employees   had  not  exercised   their  option  within  the stipulated  period.  They contended that in view of Clause 9 of  the Scheme even if they had not exercised their  option, they  would  be  deemed to have exercised  their  option  in favour  of  the  Scheme and thus they are  entitled  to  get pension.

   In  the  writ  petition filed by the  retired  employees under  Article  32 of the Constitution, it is  alleged  that even  though  the  Central Govt.  had approved  the  Pension Scheme, no steps were taken by DTC to implement the same and the  DTC  Workers Union had to file a writ  petition  before this Court seeking implementation of the Scheme and pursuant to  the  orders  passed  by   this  Court,  the  scheme  was initiated,  but the DTC later failed to implement the Scheme and  the  Life  Insurance   Corporation  also  withdrew  its co-operation  in implementing the Scheme.  The employees who had  retired  and opted for pension had not collected  their share  of  employer’s provident fund and other benefits  and were forced to back out and change their options for pension and  later  took their share of provident fund and  gratuity because  of the financial difficulties faced by them.  It is alleged  by  them  that  though they had opted  out  of  the Pension  Scheme, they are also entitled to Pension.  In  the writ  petition,  it  is prayed that the respondents  may  be directed  to  extend  the  benefit of Pension  to  the  writ petitioners  and  other  emplyees irrespective of  the  fact whether  they  had  opted for or opted out  of  the  Pension Scheme,  on  the  same  terms and  conditions  as  contained therein  and  to  direct the respondents to pay  arrears  of pension.

   In  the counter affidavit filed on behalf of DTC, it  is alleged  that  the  employees  of DTC  who  were  originally governed  by the Contributory Provident Fund scheme, filed a writ  petition  before  this Court  seeking  directions  for introduction  of  Pension  Scheme for its employees  and  an assurance  was  given  to this Court for introduction  of  a scheme.   It is stated that pursuant to the said  assurance, the  Pension  Scheme  was introduced on 27.11.1992,  and  an option  was  given  to the employees to switch over  to  the

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Pension  Scheme.   The  Scheme was approved by  the  Central Govt.   but  as  the  same could  not  be  implemented,  the employees initiated proceedings under the Contempt of Courts Act.   It is stated that meanwhile on 3.3.1993, a  Voluntary Retirement Scheme was also notified.  Certain writ petitions were filed by the employees before the Delhi High Court.  In some  of  the writ petitions, the question was  whether  the employees having less than 20 years of service but more than 10  years  of  service were entitled to Pension.   The  High Court  held that those who had less than 20 years of service but  more  than 10 years of service would be enitled to  get pro  rata pension.  In another writ petition, it was held by the  High  Court that those employees, who opted  to  retire under  the Voluntary Retirement Scheme would be entitled  to get  pension,  provided they refund the employer’s share  of provident  fund and gratuity with interest thereon.  In writ petition  No.  1469 of 1996, the Delhi High Court held  that DTC was not entitled to charge interest on the excess amount of  gratuity  to be refunded by the employees, but  the  DTC would  be  entitled  to  charge interest on  the  amount  of employer’s  share  of  provident   fund.   In  another  writ petition,  a learned Single Judge of the High Court directed DTC to pay pension not only to those who had exercised their option  within the stipulated period or within the  extended period,  but  also  to all other employees  who  would  come forward  to claim pension on the basis of their service with DTC.   In  writ petition No.  1292 of 1990, the  High  Court directed  the DTC to pay pension to the writ petitioners who had not exercised their option within the prescribed period. It  is  further stated that DTC filed a writ appeal  against these  judgments  and  the  Division  Bench  held  that  the employees  who  retired between 3.8.1981 and 27.11.1992  and had not exercised their option were not entitled to pension. However,  it was held that the retired employees having less than 20 years qualifying service but more than 10 years were entitled  to  pension, even if they had opted for  voluntary retirement.  It was held that DTC was not entitled to charge interest  on the excess amount of gratuity, though  interest could  be  charged  on  the amount of  employer’s  share  of provident  fund  received by the retired  employees.   Those employees  who  resigned from service after  completing  the qualifying  period of service would also be entitled to  get pension.   It  was  held that those who  had  retired  after 3.8.1981  but before 27.11.1992, and had not exercised their option  were not entitled to get pension.  Therefore, it  is contended that the prayer in the writ petition to extend the benefit  of  pension  to the petitioners therein  and  other employees   irrespective  of  the   fact  whether  they  had exercised their option initially on the terms and conditions as contained therein, is without any basis.

   We  heard the learned counsel for the appellants and the writ   petitioners   as  also   learned  counsel   for   the respondents.  Mainly two contentions have been raised by the counsel  for  the appellants.  The first contention  of  the counsel  for the appellants is that the employees of DTC who retired  on  or after 3.8.1981 are entitled to  get  pension under  the Scheme irrespective of the fact whether they  had exercised  their  option  or not.  It was argued  by  senior counsel,  Shri  P.P.  Rao that by virtue of Clause 9 of  the Pension  Scheme  notified on 27.11.1992, those who have  not exercised  their  option  in favour of the Scheme  would  be deemed  to  have opted for the Pension Scheme  benefits  and therefore they are entitled to get pension.

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   The  main  features of the Pension Scheme as is  evident from  the  office  order  No.  16 dated  27.11.1992  are  as follows.

   Even   though   the  Scheme   itself  was  launched   on 27.11.1992, it would take effect from 3.8.1981.  By Clause 3 of  the  Scheme all existing employees as on 27.11.1992  and the  employees who retired with effect from 3.8.1981 onwards have  to  exercise  option  for the Pension  Scheme  or  the Employees  Contributory Provident Fund within 30 days of the date of issue of G.O.  By Clause 4, the Pension Scheme would be  compulsory  for all the new employees joining  DTC  with effect from 23.11.1992.  Clause 5 says that the Scheme would be operated by LIC on behalf of DTC.

   Clause  6 says that the employees who have retired on or after 3.8.1981 and the existing employees who have drawn the employer’s  share  under E.P.F.  Act partly or wholly  shall refund  the same with interest in case they opt for  Pension Scheme.

   Clause  8  says  that a statement would be  prepared  in respect  of retired employees opting for Pension Scheme  and the  amount  to be paid/refunded would be worked out by  the concerned unit wherefrom the employees retired from service.

Clause 9 on which the appellants  rely  reads as follows :

   "If any of the employee of DTC who does not exercise any option  within  the  prescribed period of 30 days  or  quits service or dies without exercising an option or whose option is  incomplete  or  conditional or ambiguous,  he  shall  be deemed to have opted for the Pension Scheme benefits."

   Based   on  the  above  clause,   it  is  contended   by appellants’  counsel that those employees who retired  after 3.8.1981  shall be deemed to have exercised their option for the Scheme and the DTC should direct these retired employees to  return  the  employer’s  share of  provident  fund  with interest  and  that  they should be brought on the  roll  of pensioners.   Counsel for DTC, on the other hand,  contended that  Clause  9 has no application to the employees who  had retired  on  or  after  3.8.1981, but  it  is  intended  for employees  who  were on the rolls as on 27.11.1992 and  were later  retired or who quit the service without exercising an option.

   It is to be noted that those who had retired by the time the  Pension  Scheme  was introduced  must  have  definitely availed  of the benefit under the Provident Fund Scheme  and as  per  the Pension Scheme they were liable to  refund  the employer’s share of provident fund with interest thereon, if they wanted to opt for the Pension Scheme.  On the contrary, some  such retired employees might not have been  interested in  refunding the money received by them and having utilised such  amount would also find it difficult to raise the funds for  repayment.  It cannot be assumed that they are bound by the  Scheme and would automatically come under its  purview. The Pension Scheme cannot be thrust upon such employees even if  it may, prima facie, be beneficial to them.  As  regards the  existing employees as on 27.11.1992, the employer could always ask them to exercise their option within a stipulated period  and  if  they failed to exercise their  option,  the deeming  provision can be invoked and it could be said  that they  are  covered by the Scheme.  It is also  important  to

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note that as per Clause 4 of the Scheme, those employees who joined  DTC  with  effect from 23.11.1992  are  compulsorily covered  by  the Scheme.  Therefore, the Division  Bench  is perfectly  justified  in  holding  that  the  employees  who retired  on or after 3.8.1981 but before 27.11.1992 and  had not  exercised their option within the stipulated period  or within  the  extended  period, are not entilted  to  pension under the Scheme.

   The  next contention urged by the appellants’ counsel is that  DTC was not entitled to charge interest on  employer’s share  of  provident  fund  received  by  the  employees  on retirement.  Prior to the Pension Scheme, the employees were entitled  to get benefit of the Contributory Provident Fund. These  employees on retirement accepted the employer’s share of  provident  fund.  The Scheme specifically provided  that those  who  wanted  to  opt for Pension  should  return  the employer’s  share of provident fund with interest.  However, the  retired  employees had utilised the money  received  to their  advantage.   Therefore, they are bound to return  the same  along  with  interest;  otherwise, a  section  of  the employees   would  be  unduly   benefited  vis-Ã -vis   other employees.  Therefore, we do not think that such a clause in the  Scheme  is irrational or illegal.  We do not  find  any infirmity in the findings recorded by the High Court.

   The learned counsel for the appellants further contended that  the  direction  to  refund the gratuity  paid  to  the employees  who  had opted for Pension Scheme is illegal  and even  if  they had opted for Pension they are not liable  to refund  the gratuity already received by them.  Reliance was placed  on  Section 4 of the Payment of Gratuity Act,  1972, relevant portion of which is to the following effect :

   "4.  Payment of gratuity - (1) Gratuity shall be payable to an employee on the termination of his employment after he has  rendered  continuous  service for not  less  than  five years.

(a)  on his superannuation, or ......... .........

   (5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.

..........."

   It  was argued that in view of sub-clause (5) of Section 4,  the employees can receive better terms of gratuity under any  award or agreement or contract with the employer and as the  provisions  contained  in the Payment of  Gratuity  Act itself contemplate better terms of gratuity or other payment than  what is permissible under the Act, the present Pension Scheme  could only be construed as an award or agreement for better   terms.   It  was  argued   that  in  view  of  that circumstance,  the  appellants are not liable to refund  the gratuity.

   The  argument  advanced on behalf of the  appellants  is without  any  merit.   Sub-clause  (5) of Section  4  is  an exception to the main section under which gratuity is payble to  the  employee.  In all welfare legislations, the  amount

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payable  to  the  employees  or labourers is  fixed  at  the minimum  rate and there will not be any prohibition for  the employer  to give better perquisites or amounts than what is fixed  under law.  The employer, who is more concerned  with industrial peace and better employer-employee relations, can always  give  benefit to the employees irrespective  of  any statutory  minimum  prescribed under law in respect of  such reliefs.   Therefore, the provision contained in  Sub-clause (5) of Section 4 is of no assistance to the appellants.

   The  appellants  contended  that gratuity is  an  amount earned  by the employee after long service.  Therefore,  the direction to refund the same is illegal.

   A  gratuity is essentially a retiring benefit payable to a  workman which as per the Statute has been made payable on voluntary  resignation  as well.  Gratuity is a  reward  for good,   efficient  and  faithful   service  rendered  for  a considerable  period.  A workman gains experience during his tenure  of employment.  An experienced workman is capable of securing  another employment with better emoluments.  He can also  be  tempted  by other employers  with  more  lucrative salary.   The exit of an experienced workman would surely be a  loss  for his employer.  In British Paints  (India)  Ltd. vs.   Workmen  AIR 1966 SC 732, it was held that  "a  longer minimum  in the case of voluntary retirement or  resignation makes  it  probable  that  the workmen would  stick  to  the company  where  they  are  working.  That  is  why  gratuity schemes  usually provide for a longer minimum in the case of voluntary retirement or resignation."

   In   Ahmedabad   Municipal   Corporation   Workmen   vs. Ahmedabad  Municipal Corporation, 1955 LAC 155, it was  held as under :

   "The  fundamental principle in allowing gratuity is that it  is  a retirement benefit for long services, a  provision for old age and the trend of the recent authorities as borne out  from  various awards as well as the decisions  of  this Tribunal   is  in  favour  of  double  benefit.....We   are, therefore,  of  the considered opinion that  Provident  Fund provides  a certain measure of relief only and a portion  of that consists of the employee’s wages, that he or his family would  ultimately  receive, and that this provision  in  the present day conditions is wholly insufficient relief and two retirement  benefits when the finances of the concern permit ought to be allowed."

   The  appellants  were  paid   gratuity  for  their  long service,  but  at the time of receipt of this  amount,  they were  not entitled to get Pension.  Now the appellants  have opted  for Pension.  That is a similar relief given to  them for  the  longer service rendered by them.   The  appellants cannot  have  the benefit of both the Pension and  Gratuity. The  appellants relied on a decision reported in State Govt. Pensioners’ Association & Ors.  vs.  State of Andhra Pradesh 1986  (3)  SCR 383 and contended for the position  that  the gratuity is a one-time payment and once it has been paid the transaction  is completed and closed and the same cannot  be reopened  at  a later date.  It was argued that in  view  of that  decision, the appellants cannot be asked to refund the same.   That  is  a case where the appellants  therein  were Govt.   employees  who retired before April 1,  1978.   They contended  that Gratuity is a part and parcel of the pension and  the  same  cannot  be   looked  separately  from  other

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pensionary  reliefs  and therefore they are entitled to  the benefit  of Gratuity "retrospectively" at the enhanced rate, as  they had been paid Gratuity at the time of retirement at the then prevailing rate.  This plea was not accepted and it was  held that upward revision of Gratuity takes effect from the  specified  date with "prospective" effect  only.   This decision also is of no assistance to the appellants.

   Yet  another  decision  relied on by the  appellants  is Janpad  Panchayat  & Zila Panchayat Karamchari Sangh &  Ors. vs.  State of M.P.  & Ors.  1998(8) SCC 568.  This decision, though  apparently  seems to support the  appellants’  case, does  not  really do so.  In this case, the  question  arose whether  the  employees of Panchayat and Zila Parishad  were entitled  to  pension and gratuity.  While interpreting  the Madhya  Pradesh  Panchayat Act, 1962, it was  observed  that Section 75, 147 and 189 of that Act enabled the employees to get gratuity and pension subject to the previous approval of the  competent  authority.  These observations were made  in view  of  the specific provisions contained in the  relevant Statutes.   Whereas  in  the  present  case  the  appellants received  gratuity  at  the  time of  their  exit  from  the service, subsequently they opted for pension which had never been  a part of their service conditions.  It is a condition precedent  that  in order to get the benefit of the  Pension Scheme,  they have to refund the gratuity received by  them. It is neither illegal nor unjust.

   Learned counsel for the petitioners in the writ petition No.   499  of  2000  contended   that  the  petitioners  had initially  opted for the Pension Scheme in 1992, but as they were  apprehensive regarding DTC’s abilitiy to implement the Pension  Scheme,  they  were  compelled to opt  out  of  the Pension Scheme.  It is submitted that in 1995 only under the threat  of  contempt  notice from this Court, the  DTC  came forward  to implement the Pension Sheme, but no fresh option was  given to the employees.  It is also argued that DTC had not  communicated to all its employees that they were  going to  implement the Scheme.  It is also submitted that Pension is  neither  a  bounty nor a charity.   Therefore,  all  the retired  employees should have been given the benefit of the Pension Scheme.

   It is true that there was some delay in implementing the Scheme,  but all the retired employees were given sufficient opporrtunity  to  exercise their option.  In paragraph 9  of the  counter  affidavit filed on behalf of DTC it is  stated that  as  far as the time to fill up pension option form  is concerned, the letter dated 23.11.1992 conveyed by the Govt. of  India, Ministry of Surface Transport, contained that the DTC  shall  obtain option from its employees within 30  days from  the  date of issue of circular.  However, the DTC,  in fact,  extended  the time twice, namely, firstly  upto  15th January,  1993,  and  secondly   upto  1st  Feburary,  1993. Therefore, the retired employees had, in fact, more than one month’s time to exercise their option.  We do not think that sufficient  time was not given to the employees to  exercise their  option  for the Pension Scheme.  Those employees  who had received the benefit of employer’s provident fund scheme failed  to  exercise  their   option  and  thus  disentitled themselves  from  getting the Pension benefit.  The  Pension Scheme  was implemented on the basis of certain  guidelines; it  is  not for the Court to interfere with the  same.   The Division Bench has rightly taken the view that those who had not  exercised their option are not entitled to get Pension.

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The  appeals and the writ petition are without any merit and these are dismissed without, however, any order as to costs.