Civil Appeal Nos
1450 1458 of 1990
From the Judgment and Order dated 21111988 of the Madras High Court in WA Nos 864 to 870 of 1988 and WP Nos 1600 and 1601 of 1986
Narayanswamy N Balasubramaniam and ATM Sampath for the Appellant
M Ramamurthy Mrs C Ramamurthy MA Krishnamoorthy 639 for the Respondents
RC Paul appeared in person
These are appeals by special leave and are directed against a common judgment of the Madras High Court delivered in a group of writ appeals and a writ petition
EID Parry India Ltd hereinafter referred to as the employer  has one of its units located at Ranipet in Tamil Nadu State where sanitary ware super phosphate and insecticides are manufactured
Some of its retiring employees filed applications under section 33 C2 of the 1947 Act  for short before the Labour Court at Madras claiming pension by alleging that payability of pension was a condition of service and the employer had stopped it without any justification and without giving notice under section 9 A of the 
The President Officer of the 2nd Additional Labour Court Madras allowed the same by his order dated 30th May 1983 after computing the amounts
The employer preferred six writ petitions
In the meantime the same dispute had been referred to the Industrial Tribunal and it answered the reference against the employees by award dated 13th February 1985
The award was assailed before the High Court by the Union by filing of the seventh writ petition
All the seven writ petitions were heard by a learned Single Judge who allowed the writ petitions of the management against the order of the Labour Court and dismissed the writ petition preferred by the labour union challenging the award of the Industrial Tribunal
Writ appeals were carried against the Single Judge s decision
The main controversy before the Division Bench was as to whether pension or as is referred to by the parties retiring allowance was payable to the employees
This dispute has a historical backdrop to which we may now advert
Under General Office Order No 26 dated Ist December 1943 retiring allowances were provided for
The Office Order provided that normally only employees with thirty years  service or more would be eligible to receive Retiring Allowance
The Board reserved the right to alter the scale of retiring allowance
either generally or in respect of individual employees and had the authority to sanction retiring allowance  when first granted and subsequent payment became a routine matter subject to annual review
640 Gratuities were also provided under the Office Order by saying that all permanent employees other than workers who qualify for gratuities as per Factory Certified Standing Order who were in the Company s service prior to 111947 and who do not qualify for Retiring Allowance on retirement will be eligible for gratuity on finally leaving the Company s service subject to one or other of the prescribed conditions being fulfilled
In all four alternatives were provided
Clause 4 indicated that employees recruited on or after 111947 would not be entitled to any gratuity
There was a Memorandum of Settlement between the parties which may be referred to as the settlement of 1956
Clause 6 thereof related to gratuity and provided Gratuity shall in future be payable by the company in accordance with the following rules ai Where irrespective of the length of his past service an employee dies in service or is retired on a medical certificate acceptable to the company or is retired by the company on reaching the age of superannuation he shall be entitled to gratuity calculated at the rate of one month s basic salary for each completed year of service and pro rata for any partly completed year of his service subject to a maximum of 15 months  basic salary if his service is less than 30 years together with half of one month s basic salary for each completed year of service in excess of 30 years and pro rata for any partly completed year of service in excess of 30 years   d Employees in service prior to Ist January 1947 may opt at the time of leaving service either for i Gratuity calculated in accordance with these rules or in accordance with the current provisions of General Office Order No 26 whichever he prefers or ii in lieu of gratuity a retiring allowance calculated in accordance with the current provisions of General Office Order No 26
 This settlement as a fact incorporated the relevant part of the Office Order
641 The came into force with effect from September 1972 and payment of gratuity became statutory
When that Act came into force the Employer and the Employees  Union jointly applied to the Government for exemption from the provisions of the statute
The exemption was however not granted
Payability of gratuity is no longer in dispute
What is challenged is the claim of the workmen to retiring allowance pension under Office order No 26
The stand of the employees has been that the retiring allowance under General Office Order No 26 has not been substituted by the 1956 settlement and they are subject to being qualified entitled to the benefit of pension and the statutory advantage of gratuity
It is a fact that the settlement does not provide for payment of pension except to pre 1947 employees and making the benefit liable to exercise of option under clause 6d above
It is not in dispute that the retiral benefit pension was payable to all qualified employees as a matter of practice
If under the settlement that was not done away with the benefit arising out of General Office Order No 26 would still be available and gratuity contemplated under the settlement would not be a substitute of the retiral benefit of pension
The Appellate Bench of the High Court has found that gratuity provided under the settlement was not a substitute of pension
Mr Narayanaswamy learned senior counsel appearing in support of the appeals took us through the various documents and placed the matter at considerable length and with lucidity
He even relied on what he described as the prevailing practice between 1956 and 1972 the settlement and the Gratuity Act when no retiral benefit was either claimed or paid
We have however not been able to see any defect in the reasoning of the Division Bench decision of the High Court where it has ultimately come to the conclusion that the settlement had not substituted gratuity for pension
We find that by way of an interim measure this Court by an order dated 5th May 1989 had directed the employer to pay the pension to the employees in accordance with the order of the High Court with effect from Ist May 1989 and that from the record appears to have been paid
A petition had been filed in this Court on 23rd April 1990 by the employer for modification of the condition indicated in the order granting special leave and we had heard counsel for both the sides on the said petition
We had made it clear at the hearing of the petition for modification of the order granting special leave that the question as to payability of retirement benefit after the 1956 settlement would be examined
The total number of employees involved in this dispute was 642 about 347
Many of them had not only retired but had also died and in respect of those who were dead it would be a question of the benefits up to the date of death of the respective employees to be paid to their legal representatives
Mr Narayanaswamy had emphatically contended that what was being decided was not a claim of 347 employees but it had its repercussion on the industrial peace between the employer and the employee at other places
We would like to make it clear that we have gone into the question confined to the claim to 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
We are satisfied that the Appellate Bench of the High Court was right in holding that the entitlement to pension had not been substituted by the settlement of 1956 and therefore the claim to pension subject to qualification being satisfied was available to be maintained notwithstanding the settlement of 1956 The High Court rightly came to the conclusion that the Labour Court had justifiably worked out the dues and the claim petitions under section 33 C2 of the 
We uphold the judgment of the High Court and dismiss these appeals
The employees had asked for award of interest on their dues
The challenge of the employer was not groundless and we do not think in the facts of these cases the employees or their legal representatives would be entitled to interest
We hope and trust that the employer would not liquidate its liability without delay by satisfying the orders of the Labour Court and the claims of the workmen or their legal representatives as and when made
A sum of Rs 10000 had been given by the employer to Sri Pant for the Union to contest these matters and he has been paid the amount under this Court s order
No order for further courts
TNA Appeals dismissed


Summary:
The appellant a Government servant was charged with having contrary to the rules governing the conditions of his service accepted private employment without sanction of Government while he was still in Government service
The Officer who held an enquiry against him found the charge to be true and submitted a report
On April 14 1954 a notice was issued to the appellant asking him to show cause in accordance with the provisions of article 3II2 of the Constitution in the following terms  
On a careful consideration of the report and in particular of the conclusions reached by the Enquiring Officer in respect of the charges framed against you the President is provisionally of opinion that a major penalty viz dismissal removal or reduction should be enforced on you
Before he takes that action he desires to give you an opportunity of showing cause against the action proposed to be taken 
The appellant then showed cause and on October 1 1954 the President passed an order removing the appellant from service with effect from that date
It was contended for the appellant inter alia that the show cause notice dated April 14 1954 stated all the three punishments mentioned in article 3112 and that inasmuch as it did not particularise the actual or exact punishment proposed to be imposed on the appellant the notice did not comply with the essential requirements of article 3112 and therefore the final order of removal passed on October 1954 was not a valid order
Held that the show cause notice dated April 14 1954 did not contravene the provisions of article 3112 of the Constitution
There is nothing wrong in principle in the punishing authority tentatively forming the opinion that the charges proved merit any one of the three major penalties and on that footing asking the Government servant concerned to show cause against the punishment proposed to be taken in the alternative in regard to him because it gives the Government servant better opportunity to show cause against each of those punishments being inflicted on him which he would not have had if only the severest punishment had been mentioned and a lesser punishment not mentioned in the notice had been inflicted on him
893 High Commissioner for India and High Commissioner for Pakistan vs I M Lall 1948 LR 75 IA 225 and Khem Chand vs Union of India   explained
Jatindra Nath Biswas vs R Gupta  Dayanidhi Rath vs B section Mohanty AIR 1955 Orissa 33 and Lakshmi Narain Gupta vs A N Puri AIR 1954 Cal
335 distinguished