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PETITIONER: HINDUSTAN MACHINES TOOLS LTD. & ANR.

       Vs.

RESPONDENT: M.S. KANG/P.N. KASHYAP

DATE OF JUDGMENT:       27/01/1997

BENCH: K. RAMASWAMY, G.T. NANAVATI

ACT:

HEADNOTE:

JUDGMENT:                             WITH                 CIVIL APPEAL NO. 627 OF 1997          (Arising out of SLP (C) No. 20470 of 1996)                          O R D E R      Leave granted.      These appeals  by special leave arise from the judgment of the  High court of Punjab & Haryana, made on 19.4.1996 in LPA Nos.2 and 3 of 1996.      The  admitted   facts  are  that  the  appellants  have formulated  a   Scheme  for   voluntary  retirement  of  the employees who have completed 45 years of age, effective from April 1,  1989 for  a period  of three months subject to the conditions specified  in the  scheme.  The  respondents  had accepted the  scheme and  retired thereunder.  Thereafter by Office Order  No.45/90 dated  March 1,  1991 pay scales were revised in  respect of  existing  employees  and  those  who retired from  time to  time.  In  furtherance  thereof,  the respondents claimed  and revision  of the  scale of  pay was sought to  be given  effect by  the  office  but  the  audit objection to  the payment  thereof was raised. Consequently, the respondents  filed the  writ petitions in the High Court and the  learned single  Judge allowed the writ petition and appeals were  dismissed.  Thus,  these  appeals  by  special leave.      Shri V.  Reddy, learned  Additional Solicitor  General, contends that  the Scheme is a special scheme containing the mode of  payment of  compensation as  calculated in terms of the Scheme.  There is  a distinction between those employees who retired  voluntarily under  the Conduct  discipline  and Appeal Rules  and those  who retired  under the  Scheme. The revised scales  of pay  are applicable  to those persons who are  enumerated   in  Clause  2.2.2  of  the  office  orders providing for  Revision of  Pay  Scales.  Proceedings  dated march  1,   1991  refers   to  the  candidates  who  retired voluntarily. Under Rule 24.2. of the Conduct, Discipline and Appeal Rules,  the revision  of the  Provident Fund would be effected only  in respect  of those  employees  who  retired under the  special scheme; the scale and gratuity have to be revised in  terms of  the revised  scales of pay but not the payment of  the difference  of pay.  On the other hand, Shri

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Manoj Swarup,  learned counsel for the respondents, contends that no  distinction has been drawn in the proceedings dated March 1,  1991 between  the employees  who retired under the Conduct, Discipline  and Appeal  Rules or  under the Special Scheme and  those who  retired voluntarily  under the Scheme and are  entitled to the same benefit of the revision of the pay scales  as contemplated  under the  Officer Order  dated March 1,  1991.  He  also  contends  that  even  clause  2.3 negatively puts  that they  are disentitled  to the payment. The word ‘salary’ is linked to the other components, namely, additional dearness  allowance, ad  hoc pay,  additional pay etc. Therefore,  the word  ‘pay’ would  include revised pay. Thereby the  respondents are  entitled to the benefit of the revised pay scales.      In support  thereof, he placed reliance on the judgment of this  Court in Prantiya Vidhyut Mandal Mazdoor Federation & Ors.  vs. Rajasthan State Electricity Board & Ors. [(1992) 2 SCC  723]. Therein the dispute relating to the revision of the pay  was pending before the Industrial Tribunal. Pending dispute, the  wages were  revised. Consequently,  after  the award was  made, the revision of the wages was effected. The question was:  whether the  P.F.  was  required  to  be  re- calculated on  the basis  of the  revised scales? This Court had held that in view of the revision of the pay scales, the P.F. requires  to be  decided on  the basis  of the  revised wages payable  to the  employees as  was  recalculated.  The ratio therein  has no  application to  the  facts  in  these cases.      The question,  therefore, is:  whether the  respondents are entitled  to the  benefit of  the revised  scales of pay under the  Office Order  No.45/90 dated march 1, 1991? It is not in  dispute that  the respondents  have not completed 50 years of  age for  voluntary retirement  under clause (b) or clause  (c)   of  Rule   24.2  on   attaining  the   age  of superannuation. They contemplate thus:      "(b) An  employee may  at any  time      after  completing  the  age  of  50      years voluntarily  retire by giving      one month’s notice in writing."      (c)  The  Competent  Authority  may      also retire an employee at any time      after  he  completes  50  years  by      giving one  month’s notice  or  one      month’s salary/wages in lieu of the      notice, if  it is considered in the      interest of the Company."      Thus, an employee who is normally entitled to remain in service until  he reaches  the age  of superannuation  of 58 years, is  entitled to  retire either  voluntarily by giving one month’s  notice on attaining the age of 50 years and the Company may,  if it  considers it necessary, in the interest of the  Company, retire  an employee  by giving  one month’s notice or  one month’s  salary/wages in  lieu thereof. Thus, those who retired under the above Rule would be construed to have voluntarily  retired from  service. It  is seen  that a special voluntary  retirement scheme  had been introduced by the Company.  The  objective  of  the  Voluntary  Retirement Scheme is  to achieve the optimum level of manpower with the desirable average  age-mix as  par the changing needs of the Company. In  regard to  the respondents, they come under the Scheme ‘B’  which contains  that the scheme is applicable to all regular/permanent  employees of  the Company as notified from time  to time  who have  put in  15 years of service or more in  the Company  and who are of the age of 45 years and above as  on the  date of  the submission of the application

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for voluntary retirement.      It is,  thus, seen  that there is a distinction between the employees  who retire  under the Conduct, Discipline and Appeal Rules  on attaining  the age  of  50  years  and  the employees who  accept voluntary  retirement on completion of 15 years  of service  or more  in the Company and who are of the age  of 45  years and  above.  In  other  words,  before attaining the  age of  50 years  as contemplated  under  the Conduct,  Discipline   and  Appeal   Rules,   the   benefits enumerated for  such of  the employees who opt for and where option is  accepted by the Company, are postulated in Clause (b) of  Scheme ‘B’  which says  that the  eligible employees requesting for  voluntary retirement,  subject to acceptance of their  requests by the Company/Competent Authority, shall be entitled  to receive  benefits at the following rates for the remaining  period  of  service  prior  to  the  date  of retirement  on   superannuation  from  the  service  of  the Company. The  computation thereof has been anumerated in the scheme which reads as under:      "It has been decided to introduce a      Voluntary Retirement Scheme for the      employees of the Company as per the      enclosed copy  of comprising of two      parts viz.,  Scheme ‘A’  and Scheme      ‘B’.  The   scheme   will   be   in      operation  from   1.4.1989  for   a      period of  three months, subject to      the following further conditions:-      i)   Scheme A  shall be  applicable      only to the employees of Lamp Unit,      Hyderabad  in  WG  Cadre  with  the      terms and  Conditions specified  in      Scheme A  for  a  period  of  three      months from 1.4.1989.      ii)  Scheme B  shall be  applicable      to    all    the    Units/Divisions      (including  Lamp),  Business  Group      Directorates,  other   offices  and      Corporate Office with the terms and      conditions   specified    in    the      enclosed scheme,  for a  period  of      three months from 1.8.1989.      iii) The scheme does not confer any      right or  any employees to have his      request  for  voluntary  retirement      accepted by the competent authority      right  to   accept  or  reject  the      application      for      voluntary      retirement shall entirely vest with      the Company.      iv)  Acceptance of  application for      voluntary Retirement  shall  depend      inter alia availability of funds in      the                      respective      Units/Divisions/Business      Group      Directorates,  other   Offices  and      Corporate Officer.      v)   The     eligible     employees      requesting      for       voluntary      retirement, subject  to  acceptance      of their  requests by the competent      authority shall be entitled to such      benefits as  are specified  in  the      scheme.      Such employees  may be persuaded to

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    deposit the  benefits received,  in      the Company’s Fixed Deposit Scheme.      2.   The      existing      medical      retirement  Scheme   and  Voluntary      Retirement  Scheme  introduced  for      Hyderabad  based   Units   of   the      Company  shall  stand  discontinued      with the  introduction of the above      Voluntary Retirement Scheme.      3.   The Units and areas within the      Units, where  the Scheme  could  be      implemented  will   separately   be      intimated by the DPS.      4.   The progress of implementation      of the  Scheme with  regard to  the      number of  employees in  each cadre      and  the   total  amount   paid  on      account of  compensation  shall  be      reported to DPS every month."      For the  computation of the payment of the compensation in terms  of the calculation, the ‘Note’ postulates that the salary mentioned  under Scheme A and B shall mean basic pay, Dearness  Allowance,   Interim  Relief/ad   hoc  Relief  and Personal Pay,  if any,  and shall be calculated on the basis of a  calendar month.  In other  words,  this  contract  has expressly omitted  to mention  the revised scale of pay from time to  time. The  reason would be obvious. An employee who retires on completing the age of 50 years but before the age of 58  years, is  not entitled to the payment of any special component of  the salary  as indicated  hereinbefore. on the other hand, he will be entitled only to the retrial benefits as are  available under the normal Rules. If the company, in public interest,  instead of giving one month’s notice makes payment of  salary in  lieu thereof  then employee  would be entitled to  nothing more  except other retrial benefit like pension, gratuity  etc.  The  procedure  in  regard  to  the calculation of the payment of the compensation and method of computing the compensation has been provided in Para VI; the details whereof  are not  material for  the purpose of these cases.  Para  IX  of  the  Special  Scheme  postulates  that retirement on  medical grounds  in terms  of clause 24.1 and voluntary retirement  in terms  of clause 24.2(b) and (c) of the Conduct,  Discipline and  Appeal Rules  of  the  Company shall fall  outside the  purview of  the  scheme.  In  other words, the special scheme excluded such of the employees who voluntary retired  under Rule 24.1 or 24.2(b) and (c) of the Conduct, Discipline  and Appeal  Rules of  the Company. Para XII in this behalf is more relevant wherein it says that the chairman and  managing director  shall have  power to amend, modify, alter  or withdraw  the above Scheme either in whole or in  part, at  his directions,  if  the  circumstances  so warrant. In  other words, whatever components are enumerated thereunder  would  be  binding  on  the  parties  until  the Chairman and the Managing Director before acceptance amends, modified, alters or withdraws the above scheme.      It is  seen that  the Office Order No.45 dated March 1, 1991 provides that the revised pay scales shall be effective from 1.1.1987  and will  remain in  force for  the period of five years  upto 31.12.1991.  Clause 2.2.  provides that the revised pay  scales shall  also be  applicable on a pro-rata basis to those categories of employees who were on the rolls of the  company  as  on  31.12.1986  but  have  subsequently separated due  to superannuation  and  voluntary  retirement etc. Those  who retired  on attaining the age of 58 years or voluntarily retired under Rule 24.2. (b) or (c), as the case

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may be,  under the  Conduct,  Discipline  and  Appeal  Rules referred to  hereinbefore. The  benefits of  the revision of pay scales shall not be applicable to those persons who were on  the   rolls  of   the  Company   as  on  31.12.1986  but subsequently left the service of the company before the date of  issue   of  Office   Order  No.45/90   for  any  reason, whatsoever,  including    resignation  except  the  category mentioned  in  clause  2.2  above.  Thereby,  the  necessary implication is  that all  those who are covered and stand on the same  footing are  excluded  except  to  the  extent  of gratuity, revision  of the terminal benefits as mentioned in para 6.13  which postulates that gratuity paid or payable to employees covered  under Clause  2.2 will be recalculated on the revised  pay subject to the prescribed ceiling. Thus, it could be  seen that  the distinction  has been drawn between employees who  retired voluntarily  under Rule  24.2 of  the Conduct, Discipline  and Appeal  Rules or  the employees who retired under  the Special  Scheme operating  from  time  to time. The  respondents  having  retired  under  the  Special Scheme  are   not  employees  covered  under  the  voluntary retirement under  Rule 24.2  of the  Conduct, Discipline and Appeal Rules referred to hereinbefore. Accordingly, the High Court was  not  right  in  directing  recomputation  of  the compensation under Office Order No.45 dated March 1, 1991.      The appeals  are accordingly allowed. Consequently, the writ petitions stand dismissed. No costs.