IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIFTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE G.CHANDRAIAH WRIT PETITION NO : 16296 of 1999 Between: P. Sambasiva Rao, S/o. P. Subba Rao, R/o. Plot No. 64 Sri Satya - Sai Colony, Malapur, Nacharam, Hyderabad. ..... PETITIONER AND 1 A.P. State Fderation of Co-Operative Spinning Mills Ltd., Thro its Chairman & Managing Director, 4th Floor, Posnett Bhavan, Ramkote, Hyderabad-500001. 2 Commissioner of Labour, Govt of A P., Anjayaiah Complex, RTC X Road, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to pleased to issue an order, direction or Writ, one in the nature of Writ of Certiorari calling for records from the 1st rRspondent in RC.No. 770 of 99/A and quash the same and pass such further or other order or orders that may deem ﬁt and proper under the circumstances of the case. Counsel for the Petitioner:MR.D.LINGA RAO Counsel for the Respondent : MRS.S.N.PADMINI FOR R The Court made the following : IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIFTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE G.CHANDRAIAH WRIT PETITION NO : 16297 of 1999 Between: M. Someswara Rao, s/o. Sri, M. Venkata Subbaiah, r/o. H.No. 3-28-18/106, Rajendra Nagar, Pattabhipuram Post, ..... PETITIONER AND 1 The A. P. State Federation of Cop. Spinning Mills Ltd., (A.P. SPINFED), 4th Floor, Post Neett Bhavan, Ramkote, Hyderabad, rep. by its Vive-Chairman & Managing Director. 2 The Commissioner of Labour . Govt, of A.P., Anjaiah Bhavan, RTC Cross, Road, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to pleased to issue an order, direction or writ, one in the nature of writ of Certiorari calling for records from the 1st respondent in Rc. No. 770/99/A and quash the same and pass. ] Counsel for the Petitioner:MR.S.RAVINDRANATH Counsel for the Respondent No.: MRS.S.N.PADMINI The Court made the following : IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIFTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE G. CHANDRAIAH WRIT PETITION NO : 16497 of 1999 Between: K. Ramamurthy, s/o. Late K. Dwaraka Krishnaiah, Door No. 4- 5-26/34, Navbharatnagar, 1st Lane Guntur. ..... PETITIONER AND 1 AP State Federation of Co - Operative Spinning Mills Ltd, 4th Floor, Pasnett Bhavan, Ramkote, Hyderabad, 500001 (thro its Chairman & Managing Director). 2 Commissioner of Labour Govt of AP, Anjaiah Complex RTC X Road, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to pleased to issue an order, direction or writ, onein the nature of writ of Certiorari calling for records from the 1st Respondent in RC. No. 770/99 -A and quash the same and pass. Counsel for the Petitioner:MR.S.RAVINDRANATH Counsel for the Respondent No.: GP FOR LABOUR The Court made the following : IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIFTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE G.CHANDRAIAH WRIT PETITION NO : 16498 of 1999 Between: K. Rama Rao, s/o. Sri Venkata Subbaiah, r/o. H.No. 2-1-118, Gandhinagar, Burripalam Road, Tenali. ..... PETITIONER AND 1 The AP State Federation of Co-operative Spinning Mills Ltd., 4th floor Posnett Bhwaan, Ramkote, Hyderabad, Hyderabad rep by its Vice Chairman & Managing Director. 2 The Commissioner of Labour , Govt of AP Anjaiah Bhavan, RTC X Road, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to pleased to issue an order, direction or writ, onein the nature of writ of Certiorari calling for records from the 1st respondent in RC 770/99-A and quash the same and pass. Counsel for the Petitioner:MR.S.RAVINDRANATH Counsel for the Respondent No.: GP FOR FINANCE & PLANNING The Court made the following : THE HONOURABLE SRI JUSTICE G. CHANDRAIAH W.P. Nos.16296, 16297, 16497 & 16498 of 1999 COMMON ORDER: Since cause of action and relief sought for are common, these writ petitions are being disposed of by this common order. All the above said writ petitions are ﬁled seeking to i s s u e Writ of Certiorari and call for the records in Rc.No.770/99/A, dated 30-07-1999 from the 1st respondent, A.P. State Federation of Co-operative Spinning Mills Limited, and quash the same and suspend the operation of the proceedings dated 30-07-1999 and allow the petitioners to discharge their duties of Spinning Masters. The case of the petitioners is that they were initially appointed as Supervisors vide diﬀerent proceedings of the Managing Director of Cooperative Spinning Mills Limited and thereafter they got promotions as Assistant Spinning Masters and Deputy Spinning Masters, from time to time. While so, in the year 1989 a notiﬁcation was issued by the A.P. State Federation of Co-operative Spinning Mills Limited (for short ‘the Federation’) for ﬁlling up of the post of Spinning Masters by way of direct recruitment and in service candidates at the ratio of 1:1 on contract basis. Pursuant to the said notiﬁcation, the petitioners have made their applications and after scrutinizing their applications and service put up by them, they have got selected by the Selection Committee as in- service candidates and they were asked to submit consent letters accepting the terms and conditions of the appointment on contract basis for a period of three years. Accordingly, the petitioners have submitted their consent letters accepting the terms and conditions of the contract appointment. Based on the above said consent letters, the Federation has issued proceedings appointing the petitioners as Spinning Masters contemplating the terms and conditions, which reads as under: “1. The appointment will be on contract for a period of three years commencing from the date of his joining the post, and subject to conﬁrmation after a period of trial under clause (2). 2. He shall be on trial for a period of six months from the date of his joining, provided that this period may be extended by the Management at any time for further period or periods up to an aggregate period of 18 months including the original period of six months. 3. On the expiry of the period of trial, the balance period of the contract may be conﬁrmed, if his performance and conduct are found to be satisfactory. Otherwise his services shall be terminated forthwith. 4. His appointment will be liable to be terminated at three months notice or on payment of pay and D.A., in lieu thereof, any time during the currency of the contract period. In case if he wants to leave the service he shall give three months notice or salary in lieu thereof and leave the service. 5. As indicated in Rule 2(b) of the service Rules of the Federation, the terms and conditions of service shall be as agreed upon between the Federation and the employee and the applicability of the said service rules shall be limited to where the present terms and conditions are silent and shall be subject to these terms and conditions. 6. His initial basic pay will be ﬁxed later per month in the scale of pay of Rs.1200-50- 1800-75-2400…. He will be entitled to such allowances at the rates determined by the Federation from time to time. 7. He is liable to be transferred to any other equivalent post in the oﬃce of the Federation or any of the member mills provided that his pay scale is protected. 8. No T.A/D.A. is admissible for joining service or on termination or while leaving service under clause (4) above. 9. He shall not engage or interest himself either directly or indirectly in any trace or besuiness or take-up any employment with any other Company, ﬁrm or individual concern or body, while he is in the service of this Federation. 10. He will be entitled to the beneﬁt of the contributory Provident Fund as per rules in force from time to time. 11. It is clariﬁed that a person already in service of the Federation/Member Mills in any category shall be eligible for appointment to the new post on the express understanding that he shall not retain any lien whatsoever on the earlier post or on the un-expired period of his contract as the case may be. 12. During his employment he will be governed by the service rules, conduct and discipline rules, the standing orders which are in force or as may be amended, altered from time to time and his acceptance of this oﬀer carried with his agreement to obey such rules, regulations and standing orders etc. 13. The balance cash security of Rs.5,000/- shall be deducted from his salary in 20 instalments as requested by him. 14. The Security Deposit of Rs.10,000/- furnished by him vide clause (13) shall be forfeited to the Federation in case he fails to serve in the Federation/Member Mills for the contracted period.” Though the petitioners were initially appointed for a period of three years on contract basis, later on, the period of contract was extended, from time to time till the proceedings of termination was issued on 30-07-1999 on the ground that the petitioners were found to be surplus. Proceedings of termination dated 30-07-1999, reads as under: “The A.P. State Federation of Cooperative Spinning Mills Ltd., Hyderabad has a common cadre consisting of certain categories of Supervisory Staﬀ required for the management of various Cooperative Spinning Mills in Andhra Pradesh. The “Spinning Master” is one of such category of personnel required for the management of Spinning Mills. As per the recruitment Rules of the Federation one of the methods of appointment of the Spinning Masters is through “contract appointment”. In accordance with the above position an oﬀer was made in the reference 1st cited above to Sri P. Sambasiva Rao to work as Spinning Master on contract basis subject to his acceptance of the terms and conditions of the contract indicated in the reference 1st cited. Sri P.Sambasiva Rao accepted the above mentioned oﬀer vide his communication dated 22-3-1989 and was accordingly taken on contract as Spinning Master for a period of 3 years. Subsequently his contract of service was extended based on mutual consent up to 31-7-97 as per reference 2nd cited. There were, in all, 11 Cooperative Spinning Mills under the control of the Federation. Out of which at present 3 mills namely those located at Edlapadu, Inkollu and Chirala only are functioning and the remaining mills have been closed permanently with a view to privatize or to liquidate since it had become economically unviable to run these mills on account of huge accumulated losses. In those 8 mills which have been closed and have also been scheduled for sale, all the employees are being retrenched. The workmen eligible for compensation under law are being given compensation under Voluntary Retirement Scheme or under Industrial Disputes Act. Sri P.Sambasiva Rao, Spinning Master has become surplus in the common cadre category of Spinning Masters due to closure of 8 mills. Hence he is hereby relieved from the post of Spinning Master. Even though his contract was not formally extended beyond 31-7-1997 but still since he was also not speciﬁcally relieved earlier, the same is being done now. Sri P.Sambasiva Rao, is further informed that as per the terms of his contract a Cheque for Rs.30,405 towards the notice period pay is enclosed herewith. He is deemed to have been relieved from the post of Spinning Master w.e.f. the afternoon of 31 st July, 1999. Sri P.Sambasiva Rao is also informed that he is not eligible for V.R.S. as he is not a regular employee and accordingly his application for V.R.S. has not been considered.” Questioning the termination proceedings dated 30-07-1999, the present writ petitions have been filed. On behalf of the respondents, counter has been ﬁled admitting the facts that the petitioners were initially appointed as Supervisors and thereafter they got promotions up to the rank of Deputy Spinning Masters. It is also admitted that subsequently the petitioners were selected as Spinning Masters by the Selection Committee and was appointed on contract basis initially for a period of three years. After expiry of three years their appointment of contract, was extended from time to time. The averment of the petitioners that they were conﬁrmed in the post of Spinning Master was denied, inter alia, among other denials. Learned counsel appearing for the petitioners submitted that the termination orders have been issued without following due process of law, without serving any notice. The petitioners have not been paid any of the beneﬁts , which they are entitled under the law namely Gratuity and Provident Fund. Since the Federation had introduced the Voluntary Retirement Scheme, the petitioners are also entitled to the beneﬁts of the said Voluntary Retirement Scheme. It is also submitted that since the Federation is governed under the A.P. Cooperative Societies Act, they are entitled to the beneﬁts as per the said Act and no beneﬁt is received by them, so far, under the said Act. In addition to the arguments advance by the learned counsel Sri S. Ravindranath, Sri P. Linga Rao submitted that in view of the long service put up by the petitioners who have been initially appointed in the Federation and later on appointed as Spinning Masters, their services have to be calculated for the purpose of computing the service beneﬁts and the petitioners are also entitled to the beneﬁt of Voluntary Retirement Scheme on par with the regular employees, treating them as regular employees. On the other hand, Sri A. Rajanna, learned counsel appearing on behalf of the 1st respondent-Federation submitted that the petitioners, no doubt, were initially appointed in the respondent Federation and they were promoted from time to time from the post of Supervisor to the post of Deputy Spinning Masters. Pursuant to the notiﬁcation issued by the Federation, the petitioners have made their applications seeking their appointment as Spinning Masters and on consideration, the petitioners were put to notice of terms and conditions of the contract appointment and they were asked to give consent letters accepting the terms and conditions of the contract appointment and they submitted their consent letters. Thereafter only, the orders of appointment, on contract, have been issued stipulating the terms and conditions of contract. Accordingly, following the terms and conditions of the contract, the impugned orders have been issued, terminating the petitioners, legally. Therefore, it cannot be said that the impugned orders were issued without following due process of law. It is also submitted that since the petitioners are questioning the validity of the impugned order of termination by way of issuing Writ of Certiorari, therefore, they have to conﬁne to the relief sought for in the writ petitions, whereby it is only the validity of the order of termination to be considered and they cannot seek a direction for moulding the prayer sought for in the writ petitions to suit their convenience. Since there is no claim before the Federation claiming beneﬁt under the payment of Gratuity Act or Shops and Establishments Act, question of considering their claim does not arise. It is also submitted that the Federation is went in liquidation. In fact, as the Federation ﬁnds diﬃcult to function, Voluntary Retirement Scheme was introduced as far as the regular employees are concerned. In respect of the employees appointed on contract basis, the impugned orders have been issued as they are found surplus. In support of his contention he placed reliance in the cases of RAM NAYAN SHUKLA v. DISTRICT BASIC EDUCATION OFFICER AND OTHERS[1] and A.P. STATE FEDERATION OF COOPERATIVE SPINNING MILLS LTD., & ANOTHER [2] and submitted that ﬁxed term of appointment, which was extended from time to time, stood lapsed, on expiry of last term, and no right accrues in favour of the petitioners to be continued beyond that. It is also submitted that in each extension order, it is categorically mentioned that the extension order is subject to the terms and conditions as laid down in the original proceedings. Therefore, the impugned order is in terms of the contract and in accordance with law and the writ petitions are liable to be dismissed. Admittedly, the petitioners were initially appointed in the Federation as Supervisors, as the case may be, and got promotions up to the rank of Deputy Spinning Masters and later on, they were appointed afresh as Spinning Masters on contract basis initially for a period of three years. Thereafter, the appointment of contract was extended, from time to time, till the impugned orders were issued terminating the services of the petitioners, on the ground that they found to be surplus. The main grievance of the petitioners is that the impugned orders are issued without following due process of law and without serving notice upon them and they are entitled to the beneﬁts as contended above, by the learned counsel for the petitioners. It is to be seen whether the impugned orders have been issued in accordance with law and the petitioners are entitled to the benefits as stated above. From a perusal of the impugned order it is obvious that there were 11 Co-operative Spinning Mills under the control of the Federation. Out of which, three mills are functioning and the remaining mills have been closed permanently with a view to privatise or to liquidate, since it had become economically unviable to run these mills on account of huge accumulated losses. In those eight mills, which have been closed and have also been scheduled for sale, all the employees are being retrenched. The workmen, who are eligible, are also given option to avail Voluntary Retirement Scheme and however, petitioners were found to be surplus. Further it is also evident from the impugned order that as per the terms of the contract, a Cheque towards the notice period is enclosed. It is also informed to the petitioners, that they are not eligible for Voluntary Retirement Scheme as they are not regular employees. Further, from a perusal of the terms and conditions of the appointment of the petitioners as Spinning Masters, it is apparent at clause 4 that the appointment will be liable to be terminated at three months notice or on payment of pay and D.A., in lieu thereof, any time during the currency of the contract period. In the extension orders it is speciﬁcally mentioned that the extension order is subject to the terms and conditions, as laid down in the original proceedings. At this juncture, it is necessary to note the excerpts of the judgment of the Apex Court at para 2 in RAM NAYAN SHUKLA (one supra) as under: “The learned counsel appearing for the appellant in this Court urged that since the posts were available and the appellant has been given appointment though on tenure basis for diﬀerent period right from 1974, the appellant should have been allowed to continue in the post. We are unable to persuade ourselves to accept this contention. In view of the ﬁxed tenure appointment of the appellant which stood lapsed on the last date of the tenure indicated in the letter of appointment, that is 30-06-1978 on the terms and conditions of the letter of appointment, no right accrues in favour of the appellant to be continued in service beyond 30-6-1978. The High Court was, therefore, fully justiﬁed in directing that the appellant would be entitled to salary from 31-5-1978 till 30-6- 1978. We see no inﬁrmity with the judgment of the High Court to be interfered with by us in this appeal. The appeal, accordingly, fails and is dismissed, but no costs.” The Apex Court in A.P. STATE FEDERATION OF COOPERATIVE SPINNING MILLS (two supra) held as under: “The period of appointment of the respondent being for a period of 3 years, it stood expired on 6.8.1994. The order of termination was passed on 10.6.1993. Notwithstanding the conclusion that the order of termination is vitiated, the respondent cannot seek enforcement of re- instatement by way of a Mandamus but all the same he would be entitled to all his beneﬁts ﬂowing from the terms of appointment for the period 10.6.1993 to 6.8.1994. The appellant Federation is therefore directed to pay the necessary pecuniary beneﬁts ﬂowing from this direction of ours to the respondent within a period of 3 months from today after deducting the wages for 3 months which had been paid to him while passing the order of termination in lieu of notice. The appeal is disposed of accordingly.” From the above, it is clear that the person who was employed on contract basis, in terms of the contract, does not accrue any right to continue in the service beyond the contract period and they are entitled only for pecuniary benefits. The respondent Federation, in its counter, agrees to pay the payment of gratuity for the service rendered by the petitioners up to the rank of Deputy Spinning Masters and for further gratuity for the period they worked in the cadre of Spinning Masters, if they have qualifying service beyond ﬁve years as per the provisions of payment of Gratuity Act and that the petitioners may ﬁle their claim for payment of gratuity, which will be considered by the respondent Federation as per law. Having regard to the facts and circumstances of the case and the submissions made by the learned counsel on either side and considering the statement made by the respondent in the counter aﬃdavit and as the petitioners have not received pecuniary beneﬁts under the provisions of Gratuity Act and P.F. Act etc., the petitioners are given liberty to make appropriate claim before the 1st respondent within a period of two weeks from the date of receipt of a copy of this order and thereafter within a period of one month from the date of making such claim petition, the 1st respondent is directed to pass appropriate orders, in accordance with law. Accordingly, with the above direction, the writ petitions are disposed of. There shall be no order as to costs. _________________________ JUSTICE G. CHANDRAIAH Date: 25-09-2008 LSK [1] 1999 SCC (L&S) 631 [2] Civil Appeal No.5037 of 1997 (Supreme Court)