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PETITIONER: E.I.D. PARRY (INDIA) LTD.

       Vs.

RESPONDENT: THE PRESIDING OFFICER, SECOND ADDITIONAL LABOUR COURT,MADRAS

DATE OF JUDGMENT:       21/03/1997

BENCH: A.M. AHMADI, SUJATA V. MANOHAR, K. VENKATASWAMI

ACT:

HEADNOTE:

JUDGMENT: [With C.A. Nos. 2138-2140/1997 (Arising out of SLP (C) Nos.             20306-20307/96 and 20686 of 1996) ]                          O R D E R      Leave granted.      The appellant  in these  appeals, E.I.D.  Parry (India) Ltd., owns  factories and  commercial establishments. One of its factories  is at  Ranipet. Parry  and  Company  Ltd.,  a subsidiary of  the  appellant-company  has  only  commercial establishments. These  appeals arise  from  claims  made  by various categories  of employees of the appellant before the Labour  Court   under  Section  33-C(2)  of  the  Industrial Disputes  Act,  1947  seeking  to  recover,  inter  alia,  a retirement allowance and an annual review of this retirement allowance in  terms of  General Office  Order No.  26  dated 1.12.1943 and  the settlements  of 1956.  The Orders  of the Labour Court  in one  set of  applications  were  challenged before the  Madras High Court in various writ petitions from which appeals  were filed  before the  Division Bench of the High Court.  The Division  Bench by  its judgment  and order dated 25.6.1994  held that  in the  case of  workers in  the Ranipet factory, those workers who had availed of any of the Voluntary Retirement  Schemes framed  by the  appellant were not   entitled   to   a   retirement   allowance.   On   the interpretation of  G.O.O.No.26 the  Division  Bench  further said that  an annual  review of  retirement allowance  was a matter of  discretion for  the management. It also held that in respect  of those  workers who  had completed 20 years of service but  had not  completed 30  years of  service at the date of  superannuation, the payment of retirement allowance was a matter of discretion for the Board of Management under G.O.O. No. 26.      In another  set of applications filed by the workers in the commercial  establishment under  Section 33-C (2) of the Industrial Disputes  Act, the  orders given  by  the  Labour Court were  challenged in  writ petitions from which appeals were filed  before the  Division Bench  of the  Madras  High Court. These  came up  for hearing  before a  Division Bench different from  the one  which and  heard the  earlier  writ appeals. The  Division Bench by its judgment and order dated 17.8.1994  held   that  the   employees  in  the  commercial

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establishment retiring on superannuation after completing 30 years of  service were  entitled to  a retirement allowance. It, however,  held that  employees who had retired under any of the  Voluntary Retirement  Schemes were not entitled to a retirement  allowance.   In  respect   of  the  right  to  a retirement allowance of those employees who had completed 20 years of  service or  more on the date of superannuation but had not completed 30 years of service, it differred from the view taken  by the  earlier Division  Bench and referred the matter to a Full Bench.      In respect of the Division Bench judgment of 25.6.1994, special leave  petitions were  filed before  this  Court  in which ultimately, by an order dated 13th of September, 1995, this Court  directed all  the disputes  in both the impugned judgments of  the Division  Bench to  be decided  by a  Full Bench of the Madras High Court. The Full Bench of the Madras High Court  accordingly considered  and decided these issues by its  judgment and  order dated  5th of  August, 1993. The Full Bench  held that  every kind  of severance  of service, whether  it  was  by  way  of  superannuation  or  voluntary retirement or  retrenchment or  resignation  or  removal  or dismissal  from  service  or  compulsory  retirement,  would amount to  retirement entitling  the workman to a retirement allowance. It,  therefore, held  that even those workers who had retired  under any  of the  Voluntary Retirement Schemes would be  entitled to  a retirement  allowance. The  present appeals which are filed before us are from this judgment and order of the Full Bench of the Madras High Court.      The respondents  in appeal  arising from S.L.P. (C) No. 20686/96 are 85 former employees of the appellant at Ranipet factory. Some  of them  have retired on superannuation after 30 years’ service, some have retired on superannuation after more than  20 but  less than 30 years’ service, while others have taken voluntary retirement after 30 years’ or less than 30 but  more than  20 years’  service. Their claims were the subject  matter   of  the   Division  Bench  judgment  dated 25.6.1994 in  W.A. No.  332/94. Their  case  has  been  ably argued before  us by their union leader  R.C. Paul. Mr. R.K. Jain, learned  senior  advocate  and  Mrs.  Ramamurthy  made submissions before  us on behalf of the respondents in other appeals. In  the course  of arguments  before us we had felt that it  would be  more  beneficial  to  the  workmen  if  a suitable settlement could be arrived at between the parties. After the  completion of arguments the parties requested for time to  negotiate for  a  settlement.  Since  we  were  not informed  about   the  out   come  of   negotiations  for  a considerable time  we were  about to  place the  matter  for judgment when  the parties  filed the joint memorandum dated 11.3.1997 before us signed by advocates for the appellant as well as  respondents and  by Mr. R.C. Paul. The agreed terms of settlement  are annexed  to the joint memorandum. We have gone through  the terms and they appear to be reasonable and beneficial to the employees.      Mrs. Ramamurthy,  Ld. advocate  for the  respondents in all the S.L.Ps. except S.L.P. No. 20686/96 in which Mr. Paul appears has  signed  the  joint  memorandum.  She,  however, points  out   that  some   employees   of   the   commercial establishment are not satisfied with these terms. She relied upon the  decision of  this Court in General Manager, E.I.D. Parry (India)  Ltd. v.  Presiding  Officer,  2nd  Additional Labour Court,  Madras and  Ors. (1991  Supp (1) SCC 326) and submitted that  benefit given  under this  judgment  to  the workers in  the Ranipet  factory should  be extended  to the workers of  the commecial  establishment in identical terms. In the above case, however, this Court expressly limited the

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application of  that judgment  only to  the workers  in  the Ranipet factory.  It said,  (at page  329) "We would like to make it  clear that  we have gone into the question confined to the claim of the employees of the Ranipet factory and not the  liability  of  the  employer  generally.  Besides,  Mr. Narayanaswamy had also told us at the hearing that there are special features  in the  arrangement in regard to employees elsewhere."  In   respect  of   workers  in   the  commecial establishment there  are two  separate  settlements  between them and  the management dated 7.4.1978 and 17.5.1985. Under both these  settlements the  claim of  the  workers  in  the commercial establishment  for a  retiring allowance has been rejected. The  latter settlement  is under  Section 12(3) of the Industrial  Disputes Act, 1947 before the Special Deputy Commissioner  (Labour),  Madras.  The  common  understanding between both  these parties has been that the workers in the commercial  establishment   would  not   get  any   retiring allowance.  Under  the  proposed  settlement,  however,  the workers of  the commercial  establishment  will  be  getting substantial benefits  based  on  their  claim  for  retiring allowance computed  in accordance  with G.O.O.  No. 26.  The additional terms  which are  submitted  by  Mrs.  Ramamurthy relate, inter  alia, to certain interim payments made to the workers. These  payments which  are interim,  are subject to final adjustment  in their very nature. In our view, looking to all  the circumstances of the case the claim made by Mrs. Ramamurthy for  benefits being granted to the workers of the commecial establishment  in addition  to the  benefits which they would  be getting under the negotiated settlement, does not appear  to be  justified. The terms annexed to the joint memorandum of  11.3.1997 are  beneficial to  the workmen and are fair  and reasonable.  It is  also  desirable  that  the retired  employees  who  are  not  covered  by  the  earlier judgment of  this Court  in (1991  Supp 1  SCC 326)  receive comparable benefits.  Mrs.   Ramamurthy also stated that she would have  no objection  to an  order being passed by us in terms of the agreed terms annexed to the memorandum.      Joint memorandum  dated 11.3.1997  is, therefore, taken on  record.   The  terms   annexed  to  the  memorandum  are reproduced below for the sake of convenience:-      "1.  It  is   noted  that   General      Office order  No.26  which  is  the      bone  of   contention  between  the      parties has been scrapped in so far      as the  employee who are in service      are  concerned.   Settlements  have      been entered  into for  the payment      of pension.  Further, employees  in      service are  being  paid  provident      fund in accordance with the Payment      of Provident Fund and Miscelleneous      Act, 1952  and gratuity  as per The      payment of Gratuity Act, 1972.      2.   All  the   findings   in   the      impugned  judgement   of  the  Full      Bench  of  the  Madras  High  Court      dated 5.8.1995 and all Courts below      shall stand  vacated and  shall not      operate as a precedent or bending.      3.   Having regard to the facts and      circumstances of  the case  and its      chequered  history,   consideration      based on  equity will meet the ends      of justice.  In the  light  of  the      above, the following directions are

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    issued:      3(A) Claimants       who        are      superannuated or left service under      Voluntary   Retirement   or   Farly      Retirement Schemes  or  retired  on      Medical Grounds  after the  payment      of Gratuity  Act coming  into force      and  are  parties  to  the  present      proceeding in  these SLPs or claims      pending in  the  Labour  Courts  at      Madras,  Vellore,   Cuddalore   and      Guntur and High Court, Madras as on      1.3.1997 will  be  paid  a  lumpsum      amount  equal   to  the  amount  of      Retiring Allowance  computed as per      General Office  Order No.26 with no      annual  review   for   the   period      commencing from  three years  prior      to the date of filing of such claim      petitions till  31.12.1996 or  from      the date  of leaving  service  till      31.12.1996 whichever is less, after      deducting    therefrom     whatever      amounts that were paid by way of:      (i)  Compensation/Ex-gratia    paid      under  Voluntary   Retirement/Early      Retirement Schemes.  Ex-gratia paid      as per  conditions  of  service  on      Retirement is not reckoned.      (ii) Any Retiring Allowance Paid.      (iii)     Any  other  payment  made      pursuant to  orders of  the Courts.      For  the  purpose  of  this  clause      retiring    allowance    will    be      calculated on  the basis  of 10% on      the basic  wage drawn  in the  last      month of  employment and 50% of the      average monthly  D.A. drawn  in the      12 months  preceding  the  date  of      cessation  of  employment  and  the      graded bonus  as mentioned  in  the      General Office order No. 26.           However,   in    respect    of      claimants  eligible  as  above  who      were deceased,  the lumpsum  amount      equal  to   Retiring  Allowance  as      above will  be paid  up to the date      of death  prior to  31.12.1996  and      not upto  31.12.1996 and  the  same      will be  subject to  deductions  as      above.           Further  in   the  event   the      amounts  paid   by  the   appellant      companies   in   respect   of   any      claimant who  is  alive  is  higher      than the lumpsum payable as at para      3(A) the companies shall adjust the      amount  payable   by  the  claimant      either against  the lumpsum payable      as at  Para 3  (B) below  or adjust      against  amount  as  at  Para  3(D)      below.      3(B) Claimants referred  to in Para      3(A)  above  i.e.  those  who  left      under   superannuation,   voluntary

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    retirement      schemes,      early      retirement     schemes,     medical      retirement  after  The  Payment  of      Gratuity Act  coming into  force in      the  category   of   Non-covenanted      Staff  immediately   prior  to  the      cessation of employment and who are      parties to  the present  proceeding      in these  SLPs or to claims pending      in the  Labour  Courts  at  Madras,      Vellore,   Cuddalore and  Guntur as      on 1.3.1997  and who are alive will      be paid  a one time lumpsum payment      at the  rate of  Rs.  90,000/-  for      those who are with not less than 20      completed years  of service one the      date  of  cessation  of  employment      with an addition of Rs. 2,000/- for      every  completed   years;  provided      however, the  maximum amount  shall      not exceed  Rs. 1, 20, 000/- for 35      or more completed years of service.      As far as the lower grade employees      are concerned,  the lumpsum  amount      will be  Rs. 60,000/-  for not less      than 20  completed years of service      with an  addition of Rs. 2,00/- for      every  completed  year  of  service      over and  above 20 completed years;      provided   however,   the   maximum      amount   shall   not   exceed   Rs.      90,000/- for  35 or  more completed      years of service.      3(C) All other  claimants/employees      who ceased to be in service for any      reason   whatsoever    except    on      superannuation,           voluntary      retirement shall not be entitled to      any relief  as General Office Order      No. 26  did not cover them. Besides      employees who  have expressly given      up   their   claim   for   retiring      allowance when  they opted to leave      their   employment   either   under      voluntary    retirement    schemes,      separation scheme  or on  their own      through  settlements  or  otherwise      specifically  agreeing   that  they      would not  claim retiring allowance      are  also   not  eligible  for  any      relief in  terms of  this order  as      General Office  Order No.26 did not      cover them.      3(D) In view  of the  long  pending      litigation at  various  forums  and      the claimants/employees  having  to      wait without  any relief  as  being      provided to the existing employees,      and keeping in view the claims made      by  the   respondents  for   annual      review which is not available under      General Office  order No.  26 as  a      matter  of   right   but   at   the      discretion of  the Managements, the      appellant companies will disburse a

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    gesture payment  as detailed  below      only to  the employees  referred to      above in  Para 3 (B) i.e. those who      left service- under superannuation,      voluntary retirement schemes, early      retirement     schemes,     medical      retirements after  the  Payment  of      Gratuity Act  coming into force who      are   parties    to   the   present      proceeding  in  these  SLPs  or  to      claims pending in the Labour Courts      as above  as on  the  date  of  the      judgment  of   the  Full  Bench  of      Madras High Court and who are alive      as on 1.3.1997, Age as on 1.1.1997,                                 Non-cov. Staff  Lower Grade                                 Amount          Amount                                 (Rs.)           (Rs.) Below 65 Years  50, 000/-       40, 000/- 65 upto & including 70 years    45,000/-        35,000/- Above 70 upto & including 80 years                           40,000/-        30,000/- Above 80 years                  35,000/-        25,000/-      3(E) The appellant companies during      the proceedings  expressed time and      again their difficulty to discharge      the huge  financial commitments  if      any crystalised on them in disposal      of  this   matter.  The   appellant      companies  are   advised  to   make      arrangements  to  pay  the  amounts      referred to  in Para  3(A) and 3(D)      above within  six weeks  and in  so      far as the payment referred in Para      3(B) requiring  huge sums  of money      payable to  the respective  persons      who are  alive as  on 1.3.1997, the      appellant companies  either  retain      the amount  with  them  or  form  a      trust  and  pay  interest  on  such      amounts not  less than  the rate of      interest payable for Fixed Deposits      in  the   appellant  companies   as      applicable from time to time.      Such  payment   shall  however   be      regulated on  a quarterly basis for      the    period    commencing    from      1.1.1997.           On the death of such claimants      only, the  lumpsum amount  referred      to  above  shall  be  paid  to  the      nominee of such claimant.           All Payments  are  subject  to      eligibility  and   proof   of   the      claimant being alive and the amount      due  to   the  claimants   will  be      calculated and paid in terms of the      order of  this  court  within  four      weeks of  each claimant lodging his      claim  furnishing   the  proof   in      support of  his claim.  In case  of      deceased claimants the Payment will      be subject  to legal heir producing      the necessary  documents in support      of the claim.

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    4.   The appellant  companies  have      raised the  issue regarding amounts      deposited in  Courts consequent  to      interim  orders   passed   by   the      Courts. The  Courts are directed to      return   such   deposits   to   the      appellant   companies    within   a      month’s time  to facilitate  smooth      compliance of the above directions.      5.   Save to  the extent dealt with      above,  the   right  to  claim  for      Retiring Allowance  in  respect  of      any employee  on the  rolls of Non-      covenanted staff  and Lower  Grade,      who  was   in  service  during  the      period whin  General  Office  Order      NO.  26   was  in   operation,   is      available only  to those  who  have      retired  on  reaching  the  age  of      Superannuation and who were retired      on   the    ground   of    physical      incapacity or  medical grounds  and      who  have  put  in  the  qualifying      period of service.      6.   Any   claim    for    retiring      allowance  as  per  General  Office      Order No.26  shall be in accordance      with Clause 3(A).      General Office  Order No.26  is  no      longer binding on the appellants in      respect  of  any  employee  in  any      establishment.      7.   The order  of this Court dated      2.5.91  and   the  order   of   the      Division Bench  of the  Madras High      Court dated  19.10.78 in  W.P.  No.      4696/75 shall  be  binding  on  the      respective   parties    to    those      proceedings.      8.   The  above   directions  shall      completely  dispose   of  all   the      matters   of    this   long   drawn      litigation on the issue of retiring      allowance  under   General   Office      Order  No.26   in  various  forums.      Consequent to  this order  no claim      whatsoever         from         any      retiree/employee who  has ceased to      be in  service of  the company  for      retiring  allowance  under  General      Office Order  No.26  or  any  other      relief  shall   lie   against   the      appellant companies in future."      We pass  on order  accordingly in  terms of  the  above terms in  all the  appeals.  The  appeals  are  disposed  of accordingly. There will be no order as costs.