LPA No. 44 of 2006 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH L.P.A. No. 44 of 2006 DATE OF DECISION: March 24, 2009 State of Punjab and others …Appellants Versus Subhash Chander Chadha and another …Respondents CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE H.S. BHALLA Present: Mr. Chetan Mittal, Addl. AG, Punjab, for the appellants. Mr. Madan Pal, Advocate, for respondent No. 1. 1. Whether Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporters or not? Yes 3. Whether the judgment should be reported in the Digest? Yes M.M. KUMAR, J. The instant appeal is directed against the judgment dated 15.9.2005, passed by the learned Single Judge in C.W.P. No. 9251 of 2002, allowing the petition filed by the petitioner-respondent No. 1 by quashing order dated 13.3.2002 (P-21). A direction has been issued to the appellants to count the entire period of service of the petitioner-respondent No. 1 including the service rendered by him in the Punjab State Handloom and Textiles Development Corporation Limited (for brevity, ‘PUNTEX’) for the purposes of computing pension and other post retiral benefits. LPA No. 44 of 2006 2 Brief facts of the case are that the petitioner-respondent No. 1 was working as Manager (Projects) in the PUNTEX w.e.f. 11.7.1983. On 26.11.1991 the State of Punjab decided to wind up the PUNTEX. On 3.1.1992, the Chairman-cum-Managing Director, PUNTEX, addressed a letter to the petitioner-respondent No. 1 seeking his option whether he wants to opt for the ‘Golden Hand Shake’, whereunder he would have to leave the job by getting six months salary with three months notice or salary or part thereof plus retrenchment compensation, gratuity and arrears of pay on account of implementation of the recommendations of 3rd Pay Commission, as per rules (P-1). At that point of time, the petitioner-respondent No. 1 was on deputation with the Punjab State Hoisery and Knitwear Development Corporation Ltd. Few days later on 31.1.1992, an alternate offer of job/employment in other Government Departments/Corporations was made to him by the Chairman-cum-Managing Director, PUNTEX (P-3), which reads thus:- “ As you are aware after considering the status and working of Punjab State Handloom and Textile Development Corporation Ltd. (PUNTEX), the State Government has decided to wind it up. Three months notice as per the ‘Terms and Conditions’ of your appointment that your services are no more required by the Corporation has already been served upon you. State Government is making efforts to offer alternative job/employment in other Government Departments/Corporations. Hence in case you are willing to accept alternative job/employment in other Government LPA No. 44 of 2006 3 Departments/Corporation on the condition that you will not claim any “Retrenchment Benefits” and Seniority in service, you may give your option within a period of one month from the date of issue of this letter. This is also made clear that though the job/employment so offered may be of equal or lower status, but your pay would be protected. You may also note that in case your option is not received within specified period, you will not be considered for absorption/employment in other Government Departments/Corporations.” On 6.2.1992, a meeting under the Chairmanship of Shri T.S. Broca, the then Adviser (B), Government of Punjab, was held to discuss the follow up action regarding decision of the Governor-in-Council to wind up PUNTEX. Besides other officers the said meeting was also attended by the Principal Secretary to Government of Punjab, Department of Finance and Secretary to Government Punjab, Department of Personnel and General Administration. A perusal of para 2 of the minutes of the meeting dated 6.2.1992 (P-3), shows that the Principal Secretary Finance had made a suggestion that in case the employees of PUNTEX covered under the provisions of Contributory Provident Fund (CPF) were absorbed in the Government departments and if they opt for counting of their service towards pension, then those employees were required to refund the Employees share of CPF. The said suggestion was accepted in principle as is evident from para 3 of the decisions taken in the said meeting. For a ready reference the aforementioned paras 2 and 3 reads thus:- “2. Principal Secretary Finance suggested that in case the employees of PUNTEX who are at preset covered under the LPA No. 44 of 2006 4 provision of Contributory Provident Fund (CPF) are absorbed in the Government departments and if they want to have their service counted towards pension, then these employees will have to refund the “Employee’s share of CPF.” “3. The suggestion of Principal Secretary, Finance that those employees who are absorbed in Government Departments and who want their service counted for pension will have to refund the Employer’s share of C.P.F was accepted in principle. It was decided that employees will have to refund the amount with in sixty (60) days of into receipt from Provident Fund Commissioner and any further delay in doing so would attract a liability of interest @ 12% Administrative Department after examining the proposal of CMD, PUNTEX on the above lines would further submit the case to the Department of Finance for issuance/relaxation of Rules/Instructions.” The petitioner-respondent No. 1 has claimed that on 10.2.1992, the Department of Personnel and Administrative Reforms (PP-2 Branch), Chandigarh, circulated a list of employees of the PUNTEX for their absorption in other Government Departments. On 12.2.1992, the aforementioned decision dated 6.2.1992 was circulated by the Chairman- cum-Managing Director, PUNTEX, vide Circular No. PUNTEX:ADMN:92:4666 and copies whereof were also sent to be placed on the Notice Board, All Sectional Heads and Incharges of showrooms/centers (P-4). The petitioner-respondent No. 1 opted for absorption in the State Government Department, vide request letter dated LPA No. 44 of 2006 5 14.2.1992 (P-5). On 19.1.1993, the petitioner-respondent No. 1 was issued offer of appointment as Treasury Officer in the pay scale of Rs. 2000-3000 in the Department of Finance (Treasuries and Accounts Branch), Government of Punjab (P-6). The petitioner joined as Treasury Officer on 26.7.1993 after he was relieved from the Punjab State Hoisery and Knitwear Development Corporation Ltd., where he was working as Manager (Projects) on deputation. On 5.11.1993 (P-7), the petitioner-respondent No. 1 made a request for allowing him to deposit the employer’s share of provident fund in the Government Treasury in terms of the decision dated 6.2.1992 (P-2). He made a series of representations for the said purpose but the same did not bear any fruits (P-8, P-9, P-11, P-12, P-14, P-15, P-18 and P-20). On 16.10.1995 (P-10), the Under Secretary, Industries Department, Punjab, issued the following instructions to all concerned on the subject of giving pensionary benefits to the employees of the PUNTEX who have been adjusted in the departments/Corporations:- “The matter regarding the employees of the PUNTEX who have been adjusted in the Departments/corporation has been considered with the Finance Department for giving them pensionary benefits by counting their service rendered by them in the PUNTEX. Finance Department has advised vide its letter no. I.D.P. No. 6/4/95/5 FB.3/ dated 12.9.95 that the service books of those employees with complete information may be sent to this office who were serving in the corporation and had applied for counting of their services rendered in the corporations for the grant of pensionary benefits. You are LPA No. 44 of 2006 6 requested to take necessary steps in accordance with the above said advice and also inform to this department.” On 7.9.1998, the Additional Director (Treasury and Accounts) informed the petitioner that his requests for deposit of the employer’s share of the contributory fund into the treasury and for counting the past service for pensionary benefits were not acceptable because they were not covered under the rules (P-13). On 8.4.1999 (P-16), the Regional Provident Fund Commissioner, informed the petitioner that the amount of employer’s share of provident fund account alongwith interest deposited by his previous employer as on 31.3.1999 (for the period 11.7.1983 to 29.7.1993) was Rs. 1,34,805/-. The petitioner has also cited the example of one Shri Ajmer Singh Bath, Senior Development Officer, in whose case Government of Punjab has accorded sanction for counting of previous service for the purposes of pension. On 1.10.2001, the District Treasury Officer, Patiala, wrote a letter to the petitioner that his date of retirement was 30.6.2002 and he was asked to submit an application for grant of pension, gratuity and last payment of G.P.F. alongwith all other necessary papers for further necessary action (P-19). On 15.1.2002, the petitioner again sent a request for allowing him to deposit the employer’s share of CPF alongwith upto date interest into the Government Treasury and for counting the service rendered by him in PUNTEX for the purpose of pensionary benefits (P-20). However, the request of the petitioner was again rejected vide order dated 13.3.2002 (P- 21), which was subject matter of C.W.P. No. 9251 of 2002 filed by the petitioner. The respondent-appellants denied the claim of the petitioner- respondent No. 1 regarding counting of past service on the ground that he LPA No. 44 of 2006 7 was given a fresh appointment in the Government department and prior thereto he was not a subscriber or a member of either the General Provident Fund or the Contributory Provident Fund. It was, thus, claimed that the request of the petitioner has been rightly rejected by the competent authority being not covered under the rules. The aforementioned stand taken by the respondent-appellant did not find favour with the learned Single Judge, who came to the conclusion that a conscious decision was taken by the Government on 26.11.1991 to redeploy surplus staff of PUNTEX in other departments of the State Government and accordingly instructions were issued on 10.2.1992 by the Department of Personnel and Administrative Reforms, Government of Punjab to absorb the surplus staff of PUNTEX. Learned Single Judge also referred to the instructions dated 5.1.1993 (P-24) whereby the surplus employees of PUNTEX were not to appear before Departmental Selection Committees for their re-employment and absorption. Moreover, the petitioner was absorbed at the age of 48 years. The learned Single Judge also recorded a finding that the stand of the respondent-appellant was unsustainable because for fresh appointment the maximum age prescribed by the respondent-appellant is 35 years whereas the petitioner-respondent was 48 years of age and therefore he concluded that petitioner-respondent was absorbed in Government service. Accordingly, the learned Single Judge has concluded that by no stretch of imagination it could be opined that the petitioner was a fresh appointee. In this view of the matter, learned Single Judge has allowed the writ petition filed by the petitioner-respondent No. 1, vide judgment dated 15.9.2005. The learned Single Judge also reached the conclusion that a LPA No. 44 of 2006 8 conscious decision was taken to re-employ the surplus staff of the PUNTEX on account of its winding up by absorption in the Government Departments. It was in pursuance to the aforesaid conscious decision that the petitioner- respondent had exercised option on 14.2.1992 (Annexure P-2) and was led to believe that he would be absorbed in Government service with protection of pay. Thereafter he was allowed to continue till superannuation on 30.6.2002 and therefore, the respondent-appellant could not take a summer sault by depriving the petitioner pensionary benefits which would accrue to him as an ordinary Government servant. Mr. Chetan Mittal, learned Additional Advocate General has argued that no final decision with regard to the grant of pensionary benefits was taken and only a suggestion was made by the Principal Secretary, Finance to explore the possibility of granting them pension and pensionary benefits by asking them to refund the Employer's share of Contributory Provident Fund. In that regard, he has drawn our attention to the minutes of the meeting held on 6.2.1992 (Annexure P-3). By placing reliance on para 3 of the aforesaid meeting, it was suggested that the Finance Department merely made a suggestion and did not ever approve the proposal made. In order to find out the correctness of this argument at one stage we had also sent for the original file which could not be produced. Eventually, an affidavit was filed that the Government never allowed any such benefit to any employee of the Corporation. The Minutes of the meeting held on 18.2.2009 (Annexure P-29) have been placed on record alongwith Annexures showing the number of employees of PUNTEX absorbed in the Government service. The total number appears to be 77 on various posts. It was on the basis of the aforesaid material that the learned State counsel has LPA No. 44 of 2006 9 emphasized that in the absence of any decision of the Government granting benefit of pension and allied incentives no pension etc. could be paid and the direction issued by the learned Single Judge are liable to be set aside. Mr. Madan Pal, learned counsel for the petitioner-respondent has supported the view taken by the learned Single Judge and has placed firm reliance on the minutes of the meeting held on 6.2.1992 (Annexure P- 3). According to the learned counsel on 26.11.1991 the Governor-in- council of Punjab State had decided to wind up PUNTEX and to re-deploy its staff in Government Departments/Boards/Corporations. The Advisor to Government was authorised to decide the modalities for winding up of the PUNTEX in consultation with the Principal Secretary Industries & Secretary Department of Personnel & Administration Department. Thereafter, on 3.1.1992 the Chairman-cum-Managing Director PUNTEX issued a letter mentioning that the Government had taken a decision with regard to golden handshake. Thereafter, a meeting was held on 28.1.1992 under the Chairmanship of the Advisor to discuss the follow-up action concerning winding up of PUNTEX. A copy of the minutes of the aforesaid meeting are Annexure P-28. A decision was taken for granting pay protection to the erstwhile employees of the PUNTEX without granting them seniority. The petitioner-respondent no.1 did not opt for absorption. However, in the meeting dated 6.2.1992 (Annexure P-3) chaired by the Advisor it was decided to grant pensionary benefits on surrendering of employer's share of CPF. The aforesaid decision was put on the notice board of PUNTEX by the Chairman-cum-Managing Director and the petitioner-respondent no.1 exercised option for absorption on 14.2.1992 (Annexure P-5). Therefore, it cannot now be argued that the subsequent LPA No. 44 of 2006 10 decision dated 18.2.2009 is correct and the earlier decision was never taken. In support of these arguments, he has placed reliance on Rule 6.6 of Punjab Civil Services Rules (Vol.I Part 1). He claims that the respondents- appellants are bound by the aforesaid rule and cannot deprive the petitioner-respondent any vested right to which he is entitled to. Having heard learned counsel, we are of the considered opinion that the view taken by the learned Single Judge does not suffer from any legal infirmity. It is not possible to ignore the minutes of meeting dated 6.2.1992 (Annexure P-3). In order to put the controversy beyond any doubt, it would be profitable to read in extenso the minutes of meeting dated 6.2.1992 which are as under:- “The follow up action regarding the decision taken in the previous meeting was reviewed and it was noted that: 1. A total of 24 employees has given their options for retrenchment/terminal in this behalf as informed by CMD, PUNTEX, CMD PUNTEX further indicated that more employees might like to give their options for retrenchment/terminal benefit in case the date is further extended till 15th February Union of employees of PUNTEX has also represented for extension of date. 2. Principal Secretary Finance suggested that in case of employees of PUNTEX who are at present covered under the provision of contributory Provident Fund (CPF) are absorbed in the Government departments and if they want to have their service counted towards pension, then these employees will have to refund the “Employer's share of CPF.” LPA No. 44 of 2006 11 3. CMD, PUNTEX submitted that Employees of PUNTEX should be paid their salary in the revised pay scales w.e.f. January 1992. After discussing the further follow up action the following decisions were taken:- 1. The last date for the options for Retrenchment/Terminal be extended upto 15th February, 1992 as suggested by CMD, PUNTEX and also as represented by union of Employees of PUNTEX. 2. All the Employees who have given their options for retrenchment/terminal benefits and also those who would be giving the options before 15th February, 1992 will be paid their dues immediately. Finance Department may be requested to provide the requisite funds immediately on demand from CMD PUNTEX/Department of Industries. 3. The suggestion of principal Secretary, Finance that those employees who are absorbed in Government Departments and who want their service counted for pension will have to refund the Employer's share of CPF was accepted in Principle. It was decided that employees will have to refund the amount within sixty (60) days of its receipt form Provident Fund Commissioner and any further delay in doing so would attract a liability of interest @ 12% Administrative Department after examining the proposal of CMD, PUNTEX on the above lines would further submit the case to the Department of Finance for Issuance/relaxation of Rules/ LPA No. 44 of 2006 12 Instructions. 4. It was decided that employees of PUNTEX should be paid their salary in the revised pay scales w.e.f. January 1992. However, the arrears pertaining to the period prior to January 1992 be paid to only those employees who opt for retrenchment/terminal benefits. 5. It was decided that exercise of matching the employees of PUNTEX to see their suitability for existing vacancies in the various Govt. Department may be started immediately and Principal Secretary Industries may hold periodical meeting with Secretary Incharge of the concerned departments and also with Principal Secretary, Finance to review the progress regarding absorption of employees of PUNTEX. 6. Principal Secretary Industries may hold the next meeting for this purpose before 15/2/1992 and report the progress to adviser (B) on 17/2/1992.” In pursuance of the aforesaid decision dated 6.2.1992, the Chairman-cum-Managing Director issued a circular on 12.2.1992 titled as absorption of PUNTEX employees in Government Departments/Boards/Government Undertakings (Annexure P-4). According to the aforesaid circular, the matter concerning absorption had been discussed on 6.2.1992. Those employees who are covered by provisions of Contributory Provident Fund were to be absorbed in the Government Departments and if they wanted their services to be counted for pension then they were required to refund the employer's share of Contributory Provident Fund within a period of 60 days of its receipt from Provident LPA No. 44 of 2006 13 Fund Commissioner. The delay was to attract payment of interest at the rate of 12%. The circular was put on the notice board and was sent to all concerned. It is after noticing the aforesaid circular that the petitioner exercises option on 14.2.1992 for absorption in the State Government Department (Annexure P-5). The option exercised by the petitioner- respondent was accepted and he was appointed as Treasury Officer on 19.1.1993 by issuing an appointment letter (Annexure P-6). He superannuated on 30.6.2002 however his request for refunding the employer's share of Contributory Provident Fund to satisfy the condition of availing pension and pensionary benefits was rejected. Accordingly, he challenged the rejection order dated 13.3.2002 (Annexure P-21). We are of the view that the findings recorded by the learned Single Judge do not provide any exception to accept the appeal. Accordingly, we agree that the view taken by the learned Single Judge that the petitioner could not be treated to have joined the Government Service after absorption as a fresh recruit because for fresh recruitment the maximum age was 35 years whereas the petitioner-respondent was 48 years. There is nothing on record to show that for making fresh recruitment the criteria of age was relaxed. Therefore, the learned Single Judge is correct in his conclusion that the petitioner-respondent was absorbed instead of making appointment afresh. The view of the learned Single Judge that the petitioner was directed to exercise option after the decision taken in meeting dated 6.2.1992 (Annexure P-3) and circular issued on 12.2.1992 by Managing Director of PUNTEX (Annexure P-4). Accordingly, he exercised his option for absorption on 14.2.1992 (Annexure P-5) and was issued appointment letter on 19.1.1993 (Annexure P-6). In the aforesaid situation, LPA No. 44 of 2006 14 the respondent-appellant cannot take a summer sault and put the rights of the petitioner-respondent in a quandary. The argument of the learned State counsel seeking to interpret the minutes of meeting dated 6.2.1992 (Annexure P-3) that only suggestion was made and no decision for refunding the employer's share of Contributory Provident Fund and to grant pension to the petitioner- respondent was taken cannot be accepted, such an argument would not be available because it was on the basis of the aforesaid decision that circular dated 12.2.1992 (Annexure P-4) was issued and the petitioner-respondent had exercised option on 14.2.1992 (Annexure P-5). The matter does not end here because the respondent-appellant had issued him appointment letter dated 19.1.1993 (Annexure P-6) in pursuance of the option exercised by petitioner-respondent. If the decision of the committee dated 18.2.2009 (Annexure P-29) is considered in the light of the aforesaid facts it cannot be supported by any stretch of imagination. It may be true that the original file concerning the aforesaid decision was not traceable as per the preliminary inquiry conducted by the Special Secretary, Finance vide its report dated 20.1.2009, but it would not necessarily mean that such a decision was not taken. Accordingly, we find that the argument now raised on the basis of the report dated 18.2.2009 (Annexure P-29) is unsustainable in the eyes of law. For the reasons afore-mentioned this appeal fails and the same is dismissed. (M.M.Kumar) Judge March 24, 2009 (H.S. Bhalla) Pkapoor/rekha Judge