-1- IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO. 301 OF 2001 Shri Shrikant Vishnu Gaonker, major, resident of House No.79, Haturly, Mayem, Bicholim, Goa. …... Petitioner. V e r s u s 1. Goa Meat Complex Ltd., (A Public Sector Undertaking), a Company incorporated under the provisions of the Companies Act, 1956, with its registered office at 1st floor, Vishal building, Dr. Braganza Pereira Rd., St. Inez, Panaji, Goa. 2. Chairman, Goa Meat Complex Ltd. 1st Floor, Vishal Bldg., Dr. B. P. Road, St. Inez, Panaji Goa. 3. Dr. H. K. Malviya, Managing Director, Goa Meat Complex Ltd. 1st Floor, Vishal Bldg., Dr. B. P. Road, St. Inez, Panaji Goa. 4. State of Goa, Through the Chief Secretary, having its office at the Secretariat, Panaji, Goa. …... Respondents Mr. V. A. Lawande, Advocate for the Petitioner. Mr. S. S. Kantak, Advocate General, with Mr. P. Talaulikar, Advocate for the Respondents. -2- Coram :- A. S. OKA F. M. REIS, JJ. Judgment Reserved on : 18 th August, 2010. Judgment Pronounced on : 30 th September, 2010. JUDGMENT : (Per F. M. Reis, J.) The above Petition has been filed by the Petitioner seeking an appropriate direction directing the Respondent nos. 1, 2 and 3 to pay the retirement benefits due to the Petitioner under the Voluntarily Retirement Scheme 2000 with reasonable interest and also to remove the disparity in the pay structure and revise the pay of the Petitioner and pay to the Petitioner the arrears of salary/retirement dues thereof with reasonable interest and for the other reliefs as stated in the above Petition. 2. It is the case of the Petitioner that he is a retired employee of the Goa Meat Complex Limited, a Government Company within the meaning of Section 617 of the Companies Act, 1956 and that the Respondent no.1 acting through Respondent no.3, by letter dated 30th September, 1996, conveyed to the Petitioner that on the recommendation of the Selection Committee, the Petitioner was offered an appointment to the post of Company Secretary-cum-Manager (Administrative) on certain terms and conditions which, inter alia, stated that (1) the post is permanent; (2) the appointment is temporary and on probation of one year and (3) other conditions of service will be governed by the relevant Rules and Orders of the Government followed by the Undertaking. It is further his contention that after he was relieved by the Addl. Commissioner of Customs and Central Excise, Panaji, -3- on 31st December, 1996, the Petitioner joined the duties as Company Secretary at the registered office of the Respondent no.1 on 31st December, 1996 and the letter to that effect was issued to the Petitioner dated 31st December, 1996. After successfully completing the probation period of one year, the Petitioner stood absorbed in the services of Respondent no.1 w.e.f. 31st December, 1997. A letter to that effect was addressed to the Assistant Commissioner of Customs and Central Excise, Panaji, by the Respondent no.1 acting through the Respondent no.3 on 1st December, 1998. The Assistant Commissioner vide letter dated 21st April, 1999, conveyed the sanction of the President to the permanent absorption of the Petitioner in Respondent-company. The Petitioner further states that vide letter dated 31st May, 2000, by the Respondent no.1, he was informed that the Board of Directors of the Respondent-company in its 100th meeting held on 21st March, 2000, decided to count the past services of the Petitioner under the Central Government from 24th July, 1985 to 31st December, 1996, for the purpose of service and retirement benefits subject to the condition that the Petitioner shall credit the amounts of service gratuity and leave encashment received from the Central Government to the account of the Respondent-company. The Petitioner was also called upon to deposit specific amounts received by him on account of service gratuity and leave encashment whereupon the Petitioner would be entitled for all service and retirement benefits under the Respondent no.1. The amounts claimed by the Respondents were accordingly remitted by the Petitioner by his letter dated 7th June, 2000. The Petitioner was accordingly informed thereafter that his past services from 24th July, 1985 to 31st December, 1996, are to be counted for the purpose of all service retirement benefits and, accordingly, his leave account was credited with 52 days earned leave and 80 days half pay leave which was to his -4- credit as on 31st December, 1996. The Petitioner further states that the Respondent no.1 introduced the Voluntary Retirement Scheme 2000 under the Office Memorandum dated 29th November, 2000. As per the said Voluntary Retirement Scheme of the employees completing ten years of service as on 31st December, 2000, were eligible to apply for the Voluntary Retirement Scheme 2000, which was extended upto 15.01.2001. The Petitioner further states that he opted for the said Voluntary Retirement Scheme 2000 vide his application dated 15th January, 2001. The application of the Petitioner was accepted by the Respondent no.1 vide letter dated 21st January, 2001, as per the provisions of the said Scheme. The Petitioner was informed that he shall stand retired from the services of the company in the afternoon of 31st January, 2001, and that the retirement benefits as admissible to the Petitioner under the said Scheme would be paid to the Petition upon fulfilling the conditions as laid down therein. The Petitioner was accordingly called upon to handover the charge to the Respondent no.3. In view of the said Orders dated 24th January, 2001, the Petitioner handed over complete charge in the afternoon of 31st January, 2001 and the Respondent no. 3 was informed accordingly. Despite of receiving the said application of the Petitioner, it is further his contention that the Respondent no.3 did not settle the retirement dues to the Petitioner and, accordingly, a letter dated 16th February, 2001, was addressed to the Respondent no.3 calling upon the Respondent no.3 to settle his retirement dues at the earliest. The Petitioner states that the retirement dues of the Petitioner were to be effected immediately after handing over of the charge but, however, by letter dated 14th February, 2001, the Respondent no.3 called for an explanation from the Petitioner within eight days as under what rules and conditions the past services of the Petitioner were counted in the Respondent no.1-Company. The -5- Petitioner replied to the said letter and, inter alia, informed that no master and servant relationship subsisted between the Petitioner and Respondent no.3 and, as such, such explanation was uncalled for. Despite of the fact that 45 days had lapsed since his retirement, the dues of the Petitioner were not settled by the Respondent no.3. Thereafter, the Respondent no.3 by letter dated 15th March, 2001, informed the Petitioner that the Petitioner is responsible for his good conduct even after retirement and could be taken to task for any misconduct. The Petitioner further states that he was not remunerated for the additional duties performed by him as Financial Advisor cum Chief Accounts Officer by the Respondent no.1 though he had requested to be relieved of such additional duties from time to time. The Petitioner further states that by letter dated 29th August, 2000, he was informed that the Board of Directors had accorded additional remuneration to the Petitioner equivalent to 10 percent of his pay w.e.f. 1st November, 1998, until further orders. The Petitioner by letter dated 10th November, 2000, informed the Respondent no.1 that such additional remuneration was not in consonance with the nature of duties and responsibilities of the post of Financial Advisor cum Chief Accountant. The Petitioner further states that there exists a remuneration/disparity in the pay scales of the Officers and the Petitioner had called upon the Respondents to remove the disparity in such pay scales but, however, the Respondent nos. 1 and 3 failed to accede to such requests. The Petitioner states that by letter dated 21st March, 2001, a cheque was sought to be remitted to the Petitioners by the Respondent no.3 after deducting an alleged offer payment on account of 10% pay for additional charge besides deductions on account of income tax. A detailed reply was sent on 2nd April, 2001, informing the Respondent no.3 that such deductions were incorrect and called upon the Respondents to settle his retirement dues. As the -6- Respondents failed to accede to the requests of the Petitioner, a legal notice dated 8th May, 2001, was addressed to the Respondent nos. 1, 2 and 3 calling upon them to settle the retirement dues of the Petitioner within 14 days. By their reply dated 16th May, 2001, the Respondent no.1, inter alia, informed the Petitioner that he had served for less than five years and, therefore, was not entitled for the service gratuity benefits and that the Board of Directors had decided to reverse the earlier decision to count the past services of the Petitioner under the Central Government. A reply to the said letter was sent by the Petitioner on 18th June, 2001. It is further the contention of the Petitioners that the said resolution dated 8th May, 2001, reversing the decision of the Voluntarily Retirement acceptance is arbitrary, unfair and bad in law as the Respondent no.1 is estopped from taking such contrary stand. It is further the contention of the Petitioner that after having accepted the application of the Petitioners under the said Scheme, the Respondents were not entitled to reverse their said decision. The Petitioner further states that in any way, if the decision was reversed, the Petitioner should have been allowed to join the services of the Respondents. Accordingly, the above Petition has been preferred by the Petitioner seeking reliefs as stated above. 3. An affidavit has been filed by the Respondent no.1 and it is contended therein that the Petitioner has suppressed material facts to the effect that the Petitioner was already drawing pension in the Department of Customs and Central Excise. It is further his contention in the affidavit that in the offer of appointment or in the absorption order, it was not stated that his past services in the office of the Commissioner of Customs and Central Excise would be counted for the purpose of retirement in the Goa Meat Complex Limited. It is further the contention of the -7- Respondent in the said affidavit that the Petitioner had used the advantage of his holding of his additional charge during the relevant period to address a letter dated 16th July, 1999 to the Managing Director of the Goa Meat Complex Limited for counting past services in the office of Commissioner of Customs and Central Excise. It is further his case that the Petitioner did not inform the Commissioner of Customs and Central Excise that he had already exercised his option and as such he should have requested to stop pensionary benefits. It is further stated that the Petitioner did not inform the Board that he was already collecting pensionary benefits. It is further his case that the Petitioner misused his position to get the Voluntary Retirement Scheme extended. He further stated that the employees union were agitating against the Petitioner as he was not entitled for counting his past services. It is further contended that in view of the legal opinion at the 106th meeting of the Board of Directors held on 8th May, 2001, they examined the matter and came to the conclusion that the Petitioner has misled the Board and had not disclosed the amount of pension that he was drawing from the Commissioner of Customs and Central Excise and, as such, resolved that the Petitioner was not entitled for the Voluntary Retirement Scheme. It is further his contention that the petitioner is not entitled for the Voluntary Retirement Scheme as he has worked only for four years and one month with the Respondent no.1. Accordingly, it is his contention that the Petitioner is not entitled for any reliefs in the above Petition. 4. A rejoinder to the said affidavit was filed by the Petitioner disputing the contentions in the affidavit of the Respondents. An additional affidavit was also filed meeting the contentions raised by the Petitioner in the amendment carried out to the Petition challenging the decision of the Board dated 8th May, 2001. It is -8- further his contention in the additional affidavit that the Petitioner had already opted for the said scheme and, as such, the Respondent no.1 was not required to call upon the Petitioner to join the services of the Respondent no.1. 5. The Petitioner also filed an additional affidavit and produced some correspondence. 6. The learned Counsel appearing for the Petitioner has submitted that the conduct of the Respondent was arbitrary and illegal inasmuch as the Respondents themselves had accepted the application under the Voluntary Retirement Scheme 2000 after being satisfied that the Petitioner was entitled for such scheme. He further submitted that the Respondents themselves had offered the post to the petitioner and thereafter accepted that the services rendered by the Petitioner in the former post in the office of the Commissioner of Customs and Central Excise would be counted for the services rendered with the Respondent no.1. He further submitted that having accepted the continuity of such services, the Respondents were not entitled to rescind from such stand by a capricious and arbitrary manner. The learned Counsel has further assailed the decision dated 8th May, 2001, passed by the Board of Directors of the Respondent no.1 reversing the earlier decision of accepting the application of the Petitioner as no cogent reasons have been given to that effect nor the Petitioner was given an opportunity of being heard in the matter. He further submitted that the said Order is in breach of the principles of natural justice and the same cannot be sustained in the Court of law. He further submitted that even assuming the application of the Petitioner under the Voluntary Retirement Scheme was not accepted by the Petitioner, in such an -9- event, the Petitioner should have been allowed to continue his services with the Respondent no.1. The learned Counsel submitted that in view of the arbitrary action of the Respondents a situation has arisen whereby the Petitioner has been deprived of the benefits of the Voluntary Retirement Scheme 2000 as well as his services with the Respondent no.1 for no fault committed by the Petitioners. The learned Counsel as such submits that the Respondents should be directed to apply the Voluntary Retirement Scheme to the Petitioners. He further submitted that there was disparity in computing the pay of the Petitioner which will also have to be considered by the Respondents. 7. On the other hand, the learned Advocate General, appearing for the Respondents has submitted that the Petitioner misled the Board of Directors by suppressing the material facts about the receipt of pension benefits from the Central Government whilst requesting for seeking continuity of services rendered by the Petitioner with the Commissioner of Customs and Central Excise. He further submitted that the Petitioner has misused his office as he was holding additional charge during the relevant period by misleading the Board of Directors of the correct facts. He further submitted that the Petitioner is not entitled for the reliefs in the present Petition. 8. Having hearing the learned Counsel, we find that the Petitioner had applied for continuing his services under the Central Government by his letter dated 4th February, 2000 and prayed that his past services from 24th July, 1985 to 31st December, 1996, rendered under the Central Government be counted for the purpose of retirement benefits admissible to the employees of the Company. The -10- Managing Director vide letter dated 31st May, 2000, informed the Petitioner that the Board of Directors of the Company at its 100th meeting held on 21st March, 2000, had decided to count his past services under the Central Government for the period from 24th July, 1985 to 31st December, 1996 for the purpose of all service retirement benefits subject to the condition that he would credit the amount of service gratuity and the leave encashment received from the Central Government to the account of the Company. An Order was also passed on 22nd November, 2000, informing the Petitioner that his leave account has been credited with 52 days of Earned leave and 80 days of Half Pay Leave which was to his credit as on 31st December, 1996. By letter dated 15th January, 2001, the Petitioner exercised the option under the Voluntarily Retirement Scheme introduced by the company. By letter dated 21st January, 2001, the Managing Director of the Respondent no.1, informed the Petitioner that his application dated 15th January, 2001 for voluntary retirement was accepted by the company as from the afternoon of 31st January, 2001. The Petitioner was also informed that the retirement benefits under the said office memorandum would be paid upon fulfilling the conditions as laid down in the said scheme. There is no dispute that pursuant to the said letter, the Petitioner handed over the charge as directed by the Respondent no.3. 9. Having accepted the application of the Petitioner, there is no justification for the Respondents to now contend that the Petitioner could not take the benefits of the said Voluntary Retirement Scheme. Prior to the said acceptance, the Respondent ought to have taken necessary precautions to ascertain as to whether the Petitioner was qualified to seek such benefits. The action of accepting the voluntary retirement of the Petitioner proceeds on the -11- footing that the earlier resolution granting continuity of service is legal and valid. The effect of such resolution could not be withdrawn without the Petitioner being given an adequate opportunity of being heard. As such, the subsequent resolution of the Board of Directors at its meeting dated 8th May, 2001, is totally arbitrary and in breach of the principles of natural justice. The Petitioner was also not even given an adequate opportunity to defend himself about the withdrawal of the continuity of services which was also resolved to be given to the Petitioner at the earlier 100th meeting of the Board held on 21st March, 2000. The action of the Petitioner in refusing the benefits of the Voluntary Retirement Scheme are arbitrary and illegal which cannot be sustained. In case the Petitioner could not take the benefits of such Voluntary Retirement Scheme, naturally the Petitioner should have been offered to continue in the service of Respondent no.1. This action of the Respondents in refusing to grant the benefits of the Voluntary Retirement Scheme as well as not offering the Petitioner to join the Respondent no.1, cannot be legally accepted. 10. As far as the claim of the Petitioner with regard to the disparity in the pay scales, the Respondent no.1 shall have to look into such disparity, if any, in accordance with the rules governing the services of the Petitioner. 11. In view of the above, we find that the Petitioner is entitled to be paid the retirement benefits dues under the Voluntary Retirement Scheme, 2000, in accordance with law. 12. In view of the above, we pass the following : -12- ORDER (i) The Petition partly succeeds. (ii) The Rule is made absolute in terms of prayer clause (a). (iii) The Petition stands disposed of accordingly with no orders as to costs. A. S. OKA, J. F. M. REIS, J. arp/*