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CASE NO.: Appeal (civil)  717-719 of 1999 Writ Petition (civil)  133 of 200

PETITIONER: Sureshchandra Singh & Ors.            

RESPONDENT: Fertilizer Corpn. Of India Ltd. & Ors.                                  

DATE OF JUDGMENT: 16/12/2003

BENCH: S. RAJENDRA BABU & RUMA PAL.

JUDGMENT: J U D G M E N T

RAJENDRA BABU, J. :

Pursuant to the recommendations of the Fifth  Central Pay Commission, Government of India  issued an Office Memorandum (OM) No. 25012/2/87  \026 Col (A) dated 13th May, 1998 enhancing  the  retirement age of Central Government Employees to  sixty  years from fifty-eight years. It was also  provided that OM would come into force with effect  from the date of Notification of amendment to the  relevant rules and regulations. To a similar effect  Department of Public Enterprises, Ministry of  Industry, Government of India issued another OM  No. 18(6)/98-GM-GL-002 dated 19th May, 1998  making it clear that such increase in age of  retirement would come into force from the date the  relevant rules and regulations of the PSEs concerned  are amended by the concerned Public Sector  Enterprises. As per this OM the Board of Directors of  the Fertilizer Corporation of India Ltd  (FCIL)  considered the matter and passed a resolution on  6th July 1998. Relevant portion of which reads:

"\005The Board noted that FCIL was  referred to BFIR in April 1992 and  declared sick in November 1992. No  revival package has been approved  by BFIR so far. Gorakpur Unit is  closed since June 1990 carrying  surplus of 1322 men as on 1-7-1998  and Korba, which was wound up, is  carrying surplus of 54 men. Besides,  FCIL is carrying surpluses in the  Corporation all over for which a  voluntary retirement scheme  providing special financial incentive  to induce employees to seek early  retirement is in operation since 1998  and so far 1524 persons have availed  the benefit under the scheme as on  30-6-1998. FCIL is totally dependent  on Govt. support for critical capital  expenditure, working capital and to  meet the huge operating losses by  its units. Wages of the employees  have not been revised; as a result

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there has been a flight of talent. The  only little incentive was promotion  which will also be blocked in case  age of retirement is enhanced from  58 years to 60. Enhancing the age of  retirement involves financial  implications, which will further  jeopardize the revival proposal of the  Corporation before the BIFR.  In view of the above the Board  unanimously decided not to raise the  age of retirement from 58 to 60  years\005"

This decision was communicated to the concerned  Ministry on 21st August 1998 and the Department of  Fertilizers, Ministry of Chemicals and Fertilizers,  Government of India granted exemption vide its  letter dated 30th December 1999 from increasing the  age of retirement from 58 to 60 years.   

In the meanwhile the appellants herein   superannuated on their attaining the age of 58  years as per the terms of the service contract.  Appellants herein moved the High Court for a  direction to the Respondents herein not to retire  them from services before they attained the age of  sixty years and till such time not to interfere with  the functioning and discharge of their duties. The  High Court dismissed the petition and hence this  appeal by special leave.  

It is urged on behalf of appellants that the OM  dated 13th May 1998 by itself increased the  retirement age and the policy set out therein is   mandatory and binding on FCIL to enhance the  retirement age.  This OM is applicable only to  employees in Government Civil Services and not to  employees in the Public Sector Enterprises.  Hence  by reason of this OM, the appellants cannot contend  that they are entitled to continue in service till they  attain the age of 60 years.  It is only by OM issued  by the Department of Public Enterprises dated 19th  May 1998 the said policy was made applicable to be  effective from the date of modification of relevant  Rules regarding the same.

By OMs dated 25th January 1991 and 08th April  1991, the Ministry of Program Implementation and  Department of Public Enterprises  made  it clear that  all instructions/guidelines issued by the Government  of India  would be of two kinds \026 a)  Directives  issued in the name of President of India and b).  Guidelines.  Directives would be issued by the  Administrative Ministry in the name of the President  while all other instructions issued by the  Department of Public Enterprise or by the  Administrative Ministry are only advisory which the  Board of Directors of the concerned Public Sector  Undertakings may in their discretion adopt or not for  reasons to be recorded in writing.  

Here the Government of India took a policy  decision to increase the retirement of Central  Government employees. Application of that decision

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in respect of employees of Public Sector Enterprises  is dependent upon so many factors that are to be  taken into account in the light of the peculiar  characteristics of each company or corporation or  department. So the first OM itself provides that the  order will come into force only with effect from the  date of Notification of amendment to the relevant  rules and regulations. So it is for the concerned  authority to make necessary changes in the rules  and regulations after taking into account of all the  relevant aspects. Immediately after the first OM  dated 13 May 1998 the Department of Public  Enterprises, Ministry of Industry, Government of  India issued OM dated 19th May 1998 wherein the  modalities of the implementation of first OM in this  department was detailed. Here it is pertinent to note  that the OM dated 19th May 1998 is not an  instruction issued in the name of the President. On  the other hand, it was issued by the Department of  Public Enterprise, which is advisory in nature. It  accorded a broad discretion to the corporations or  companies for the implementation of the enhanced  retirement age after taking into account  all the  relevant factors. Pursuant to this direction the Board  of Directors of FCIL took the decision not to increase  the retirement age of its employees. The relevant  factors that prevailed upon the Board of Directors  are fully sset out in its resolution and they are: that  the company is one of the highest loss making  company in the country; that the accumulated loss  till the relevant date was to the tune of 5049 crores;  that the company is incurring financial losses of  roughly Rupees 2.35 crores everyday; that the  company has no capacity to pay salaries to its  employees; that the company was referred to BIFR  and was declared as sick in 6/11/1992; that as on  the relevant date the company has the negative net  worth to the tune of Rupees 4316.21 crores and;  that the company has surplus manpower;  that it is  not taking any new employees  but on the contrary  it is making conscious efforts to reduce the surplus  manpower.  

It is also to be noted that the OM dated 19th  May 1998 itself does not raise the retirement age to  sixty years. It is only an administrative direction and  Court cannot issue a writ to enforce such  administrative instructions that is not having the  force of law.  The Appellants do not have any  right  to continue in service till the age of sixty years. The  decision of the Board of Directors is not arbitrary or  unreasonable or unrelated to the question of  enhancement in age of retirement.  Hence the first  contention stands rejected.

The Appellants assail the decision of the Board  on the ground of violation of principles of equality.   It is alleged that the Board level employees were  allowed to continue in service till the age of sixty  and the employees like appellants who were below  the Board level were forced to retire at the age of  fifty-eight. In reply respondents submitted that  board level employees could not be equated and  compared with the other employees.  Whole time  directors, who are two in numbers, are directly

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appointed by the President of India for a fixed term  of five years that could be reviewed even earlier;  and that other members of the board are  government servants and are nominees or  representatives from various ministries and are  appointed by the President of India for a term of  three years. In these circumstances we find that  board of directors themselves form a different class  and cannot be compared with other employees in  regard to conditions of service applicable to them.   Allegation of discrimination is also raised by the  Appellants vis-‘-vis employees of other  corporations. Each Public Sector Undertaking is an  independent body/entity and is free to have its own  service conditions as per law.  However, all  employees in the FCIL who are working in its  various Units and Divisions retire at the age of fifty- eight as per the relevant rules; and that even the  future employees will retire at the age of fifty-eight.  We also find that since the employees of different  corporations could not be treated alike since every  corporation will have to take into account its  separate circumstances so as to formulate its policy  and consequently the argument that there is  discrimination of Appellants vis-‘-vis employees of  other corporation also cannot be accepted. Thus,  appellants have failed on all  grounds.  The Appeals  stand dismissed.  

A writ petition was also filed with the prayer to  issue appropriate writ or order or direction \026 (a) to  implement OM dated 19/05/1998 and 21/08/1998  and (b) for quashing the order dated 30/12/1999 of  the department of Fertilizers on identical grounds  considered by us in the appeals.  For the very reasons stated therein this petition  also stands dismissed. Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###                                                                    Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh  

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#2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh  

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#2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh   #2003-11-25#25622#4051#P. VENKATARAMA REDDI#Dr. AR. LAKSHMANAN. ###Appeal (crl.)#Appeal (crl.)  104-106 of 2003#2003#Bikau Pandey andS Appeal (civil)#Appeal (civil)  4051 of 1996#1996#M/s Pepsi Foods Limited                              #Collector of Central Excise, Chandigarh  

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