*THE HON’BLE SRI JUSTICE N.V. RAMANA +Writ Petition Nos. 4718 of 2001, 15638, 15813, 16069, 16081, 16094 and 16206 of 2003 and C.C. No. 1415 of 2003 % Dated: 28.04.2006 W.P. No. 4718 of 2001 # D. Prabhakar Reddy, S/o D. Venkat Reddy, aged about 58 years, Occ: Senior Master Technician, R/o H.No.6-60, Sangeethnagar, Kukatpally, Hyderabad and others. ..... PETITIONERS VERSUS $ The Union of India, Ministry of Chemicals and Fertilizers Department of Chemicals and Petrochemicals, New Delhi and others. .....RESPONDENTS ! Counsel for the Petitioners: Mrs. P.A. Kamaleswari ^ Counsel for Respondents: Sri K. Sreenivasa Murthy, Standing Counsel for IDPL < GIST: > HEAD NOTE: ? Cases referred: 1. AIR 1986 SC 210 2. (2003) 5 SCC 437 3. 2004 (2) Supreme 589 4. (1998) 4 SCC 117 5. (2003) 6 SCC 490 THE HON’BLE SRI JUSTICE N.V. RAMANA W.P. Nos. 4718 of 2001, 15638, 15813, 16069, 16081, 16094 and 16206 of 2003 and C.C. No. 1415 of 2003 Common judgment: As all the writ petitions raise common question of law and fact, and since the contempt case arises out of an interim order passed in one of the writ petitions, they were heard together and are being disposed of by this common judgment. The petitioners in all these writ petitions are employees of Indian Drugs and Pharmaceuticals Limited (hereinafter referred to as “IDPL”) - The IDPL Officers Association, IDPL (Hyderabad) Supervisors’ Association and IDPL (Hyderabad) Workers Union, and others in their individual capacity, have filed writ petition in W.P. No. 4718 of 2001 assailing the order dated 26.02.2001, issued by respondent No.1, namely Government of India, rolling back the age of retirement from 60 to 58 years in respect of employees of IDPL, serving below the Board level, as illegal and arbitrary. While some of the employees filed writ petitions in W.P. Nos. 15638, 15813, 16069, 16081, 16094 and 16206 of 2003, assailing their respective relieving orders, issued to them by IDPL through their Personnel Department, relieving them from their duties from the dates mentioned therein, as being illegal and arbitrary. On the submission made by the learned Standing Counsel for IDPL that in pursuance of the status quo order dated 30.03.2001, passed by this Court in W.P.M.P. No. 7342 of 2001 in W.P. No. 4718 of 2001, they continued the petitioners in service upto the age of 60 years and retired, this Court vide order dated 07.08.2002 passed in W.V.M.P. No. 914 of 2001, filed by IDPL to vacate the status quo order, directed the listing of the writ petition itself for final hearing. While so, the petitioners alleging that IDPL despite passing of status quo order by this Court, in violation thereof, did not continue them in service upto the age of 60 years, and retired them at the age of 58 years, and that IDPL having retired them at the age of 58 years, made a misrepresentation before this Court that they continued the petitioners upto the age of 60 years, filed contempt case in C.C. No. 1415 of 2003, seeking to punish the respondents for contempt of the orders of the Court. FACTS LEADING TO THE FILING OF THE WRIT PETITIONS To wit, the facts necessary for the disposal of this batch of writ petitions, may briefly be noted, and they run thus: Indian Drugs and Pharmaceuticals Limited (IDPL) is Government of India Undertaking. It was established in 1961 with the primary objective of creating self-sufficiency in essential life-saving drugs and medicines. IDPL having become economically unviable, was declared as a sick industry by BIFR vide its orders dated 12.08.1992. In 1994, BIFR worked out a revival package for reviving IDPL in a period spread over 10 years. While so, in 1998, the Director, MGT, Public Enterprises Bhavan, Ministry of Industry, Department of Public Enterprises, vide Office Memorandum, dated 19.05.1998, communicated the decision of the Government of India, to enhance the age of retirement of below Board level employees of Central Public Sector Enterprises in the manner provided thereunder i.e. from 58 to 60 years. The Board of Directors of IDPL, in their 220th meeting held on 29.05.1998, resolved to adopt and implement the decision of the Government of India to increase the retirement age of their employees below Board level from 58 to 60 years, and accordingly IDPL, issued Circular dated 26.06.1998, increasing the age of retirement of their employees below Board level from 58 to 60 years. As the matters stood thus, the Director (M) in the Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises, Government of India, issued Office Memorandum, dated 09.05.2000, conveying the proposal for rolling back the retirement age of employees below Board level from 60 to 58 years in the case of sick/unviable Public Sector Undertakings for which rehabilitation/revival packages were under consideration. By letter dated 28.06.2000, IDPL informed the Ministry, that they do not intend to recommend roll back of retirement age of employees below Board level from 60 to 58 years for the reasons mentioned therein, which inter alia includes employees opposition. However, pursuant to the letter dated 02.08.2000 of the Joint Secretary, Department of Chemicals and Petrochemicals, Government of India, it appears that IDPL placed the matter before their Board of Directors, who in their 229th meeting held on 28.08.2000, having taken note of the problems being faced by the company in payment of retirement dues, resolved to adopt the decision of the Government of India, to roll back the retirement age of its employees below Board level from 60 to 58 years subject to Government of India, making a commitment for financial support. The decision taken by its Board of Directors, was communicated by IDPL to the Deputy Secretary, Department of Chemicals and Petrochemicals, Government of India, vide letter dated 23.10.2000. Thereafter, the Director (M) in the Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises, Government of India, issued Office Memorandum, dated 01.01.2001, informing all concerned that if the proposal for rolling back the retirement age of employees below Board level from 60 to 58 years is approved by the Board of Directors of the companies as well as the Minister in-charge of the Department, then the matter need not be placed before the Cabinet for its approval. The Desk Officer in the Ministry of Chemicals and Fertilizers, Government of India, vide letter dated 26.02.2001, communicated the approval of the Government of India, to the decision taken by the Board of Directors of IDPL to roll back the age of retirement of its employees below Board level from 60 to 58 years. In pursuance of the said orders, IDPL issued office orders retiring the employees who attained the age of 58 years or have already crossed the age of 58 years. Assailing the order dated 26.02.2001, issued by the Government of India, approving the decision of the Board of Directors of IDPL to reduce the retirement age of its employees below Board level from 58 to 60 years, as being illegal and arbitrary, IDPL Officers Association, IDPL (Hyderabad) Supervisors’ Association and IDPL (Hyderabad) Workers Association and other employees in their individual capacity filed writ petition in W.P. No. 4718 of 2001. When IDPL in pursuance of the orders dated 26.02.2001 of the Government of India, sought to retire the petitioners on attaining the age of 58 years by issuing relieving orders, they filed the other writ petitions contending the same to be illegal and arbitrary. SUBMISSIONS MADE ON BEHALF OF PETITIONERS The learned counsel for the petitioners submitted that IDPL is in the red, and this is evident from the fact that IDPL was declared as a sick industry by BIFR in 1992, and although BIFR worked out a package for its revival, in a period spread over 10 years, nothing positive had taken place. They submitted that in 1998, the Government of India, has given option to the Board of Directors of IDPL whether or not they would like to increase the retirement age of its employees below Board level from 58 to 60 years. At that period of time, even though the financial position of IDPL was bad, yet their Board of Directors, resolved to adopt the decision of the Government of India, to increase the age of retirement of its employees below the Board level from 58 to 60 years. They submitted that even though the same financial position of the company as prevailed in 1998, prevailed in 2001, yet the Board of Directors, for the reasons best known to them, contrary to the conditions of the revival package, wherein it was envisaged that employees below Board level would be continued upto 60 years, have taken a decision to adopt and implement the decision of the Government of India, to reduce the retirement age of its employees below Board level from 60 to 58 years, which is illegal and arbitrary, and more so when it did not receive the approval of the Cabinet. They submitted that the resolution passed by the Board of Directors of IDPL, resolving to adopt the decision taken by the Government of India, vide orders dated 26.02.2001, to reduce the retirement age of employees below Board from 60 to 58 years, suffers from the vice of violation of principles of natural justice, for no notice was issued either by the Government of India or by the Board, before seeking to implement the decision. They submitted that the decision taken by the respondents to reduce the retirement age of their employees below Board level from 60 to 58 years, is a short-sighted decision, in that it did not take into consideration the fact that IDPL has not paid terminal benefits to its retired employees, and it does not make any provision for payment of retrial benefits to those who would be retired upon attaining the age of 58 years or have crossed the age of 58 years, and by such short-sighted decision, the petitioners have been deprived of a decent living. In support of this submission, they relied upon the decision of the Supreme Court in B. Prabhakar Rao v. State of A.P.[1]. They submitted that even assuming that the decision of the respondents to reduce the retirement age from 60 to 58 years is a policy decision, yet such policy decision should satisfy the test of reasonableness, and if the same is found to be unreasonable, unfair, arbitrary and violative of the equality clause enshrined in Article 14 of the Constitution of India, then certainly this Court in exercise of its power of judicial review under Article 226 of the Constitution of India, can interfere with such a policy decision, and in support of this submission, they relied upon the decision of the apex Court in Union of India v. International Trading Co.[2]. SUBMISSIONS MADE ON BEHALF OF THE RESPONDENTS Per contra, the learned Standing Counsel for IDPL submitted that IDPL has become a sick industry, and the production in its units has come to a standstill, and there is no production for the past more than four years. She submitted that it is within the power of the company to either reduce or increase the retirement age of its employees, and no employee, as a matter of right can claim that he should be continued in service beyond the period fixed for superannuation of the employees. In support of this submission, she placed reliance on the judgment of the apex Court in Sureshchandra Singh v. Fertilizer Corpn. of India[3]. She submitted that having regard to their financial position, many Public Sector Undertakings in the country, have taken a decision to roll back the retirement age of their employees below Board level from 60 to 58 years, and no exception can be taken to the resolution passed by the Board of Directors of IDPL, resolving to roll back the age of retirement of their employees below Board level from 60 to 58 years, and the consequential action taken by the respondents in retiring the employees who have attained the age of 58 years or have crossed the said age, which obviously is in accordance with the policy of the Government of India. She submitted that the company can change or modify its policy from time to time keeping in view the changing circumstances, and such change or modification of policy, cannot be called in question. In support of this contention, she placed reliance on the judgment of the apex Court in State of Punjab v. Ram Lubhaya Bagga[4]. She submitted that there is no production in the company, the financial position of the company is becoming weak day by day, it is unable to mobilize resources, it is depending upon financial assistance from the Government of Indian, and under such adverse circumstances, the resolution passed by the Board of Directors of IDPL, resolving to reduce the retirement age of its employees below Board level from 60 to 58 years, which is in tune with the policy decision of the Government of India, cannot be faulted. In support of this argument, she placed reliance on the judgment of the apex Court in Officers & Supervisors of IDPL v. Chairman & M.D., IDPL[5]. POINTS FOR CONSIDERATION In the light of the submissions advanced on behalf of the petitioners and the respondents-IDPL, as noted above, the following points arise for consideration: 1. Whether the petitioners were entitled to be issued notice before the Board of Directors of IDPL passed a resolution adopting the policy decision taken by the Government of India, to reduce the age of superannuation of its employees below Board level from 60 to 58 years? 2. Whether the policy decision taken by the Government of India, to reduce the age of superannuation of employees below Board level from 60 to 58 years, which the Board of Directors of IDPL, resolved to adopt, suffers from any unreasonableness? And, 3. Whether the action of the respondents in retiring the employees who attained the age of 58 years or have crossed the age of 58 years, in pursuance of the resolution passed by the Board of Directors of IDPL in tune with the policy decision of the Government of India, to reduce the employees below Board level from 60 to 58 years, is illegal and arbitrary? Before proceeding to consider the above points, a brief reference may be made to the events that led to the passing of the resolution by the Board of Directors of IDPL, adopting the policy decision taken by the Government of India, to reduce the age of superannuation of employees below Board level from 60 to 58 years, which the petitioners do not dispute, but admit in their entirety. The petitioners did not dispute the fact that IDPL, in which they were working, is in the red, and it was declared as a sick industry by BIFR in 1992. According to the own admission of the petitioners, though BIFR has worked out a package for revival of IDPL, the same did not materialize for one or the other reason, and the matter is still pending before BIFR and the authorities concerned. The fact that IDPL has become sick, is itself is an indicia that it has become economically unviable. Be that as it may, whether IDPL should be revived or not, is a matter for the authorities to ponder, and this Court in the present case, cannot give any directions, either for its revival or closure. In 1998, the Government of India, in their wisdom, proposed to increase the retirement age of employees of Central Public Sector Undertakings below the Board level from 58 years to 60 years. This decision of the Government of India, was communicated by the Director (MGT) in the Ministry of Industry, Department of Public Enterprises, Government of India, vide Office Memorandum, dated 19.05.1998, to the Secretaries of all Administrative Ministries/Department, that the Government of India, have taken a decision to enhance the age of retirement of the employees below Board level in the Central Public Sector Enterprises, from 58 years to 60 years. There is no dispute about the fact that the Board of Directors of IDPL in their 220th meeting held on 29.05.1998, passed a resolution adopting the Office Memorandum, dated 19.05.1998, of the Government of India, increasing the age of retirement of employees below Board level from 58 to 60 years. In terms of the said resolution of the Board of Directors, IDPL issued Circular dated 26.06.1998 raising the age of retirement for below Board level from 58 to 60 years. In pursuance of the said Circular, all the employees below the Board level, were continued in service till they attained the age of 60 years. While so, the Director (M) in the Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises, Government of India, issued Office Memorandum, dated 09.05, 2000, informing all the Secretaries of all Administrative Ministries/Departments that there is a proposal for rolling back the age of retirement in the case of some sick/unviable Public Sector Undertakings for which rehabilitation/revival packages are under consideration, and required the company concerned to review its decision as to the raising of age of retirement and make suitable recommendations to the administrative Ministry/Department, for taking approval of the Cabinet. All the employees Associations/Unions, opposed the move of the Government of India, to reduce the retirement age of employees below Board level from 60 to 58 years. This is evident from the letter dated 28.06.2000 of IDPL to the Deputy Secretary, Department of Chemicals and Petrochemicals, Government of India, wherein it was informed that IDPL do not recommend the roll back of retirement age to 58 years for the following reasons: (a) Employees opposition on the ground that it is discriminatory. The Government must come up with an all embracing policy on the issue. (b) We have not been able to pay the dues of superannuated/deceased employees, and reduction of retirement age from 60 to 58 years will further add to the financial burden. (c) In the revival package for IDPL, retirement age has been kept at 60 years. In response to the above letter of IDPL, the Joint Secretary (P1), Department of Chemicals and Petrochemicals, Government of India, vide his letter dated 02.08.2000, requested to place the matter before the Board of Directors of IDPL, to consider the question of rolling back of retirement age of employees below Board level from 60 to 58 years, indicating the details and the implications, namely the number of employees to be affected category-wise, financial implications and the source of funding to meet the financial implications. As advised by the Joint Secretary (PT), Department of Chemicals and Petrochemicals, Government of India, IDPL placed the matter before the Board of Directors of IDPL, who having discussed the matter on 28.08.2000 in the background of the facts and figures placed before them, passed a resolution on 25.09.2000, resolving as follows: RESOLVED that Board takes note of the problem being faced by the company in payment of retirement dues and that the retirement age of below Board level employees be reduced from 60 years at present to 58 years subject to the Government making a commitment for financial support for the payment of retirement age. The passing of the above resolution by the Board of Directors, was communicated by IDPL to the Deputy Secretary, Department of Chemicals and Petrochemicals, Government of India, vide letter dated 23.10.2000. Though, as per the Office Memorandum, dated 09.05.2000, the matter was required to be placed before the Cabinet, for approval, the fact remains, the Director (M) in the Ministry of Heavy Industries and Public Enterprises, Government of India, has issued Office Memorandum, dated 01.01.2001, stating the proposals for roll back of the age of retirement from 60 to 58 years, which stood approved by the Board of Directors and the Minister in-charge of the administrative Ministry, need not be brought before the Cabinet. Though the respondents did not place matter before the Cabinet, the fact remains, the matter was placed before the Minister-in-charge of the administrative Ministry, and having regard to Office Memorandum, dated 01.01.2001, which did not require placing of the matter before the Cabinet, for the decision of the Government to reduce the age of retirement of employees below Board level, no exception can be taken to the action of the respondents in not placing the matter before the Cabinet, and more so when the decision was not only approved by the Board of Directors of IDPL, by way of passing resolution, but was also approved by the Minister in-charge of the administrative Ministry, as required by the Office Memorandum dated 01.01.2001. It is only after getting the approval of the Minister-in-charge, was the approval of the Government of India to roll back the retirement age of employees below Board level from 60 to 58 years, was communicated by the Desk Officer in the Ministry of Chemicals and Fertilizers, vide letter dated 26.02.2001 to IDPL. In re point No. 1: Though the petitioners contend that no notice was issued before reducing the age of retirement from 60 to 58 years, the fact remains, a reading of the letter dated 28.06.2000, addressed by IDPL to the Deputy Secretary, Department of Chemicals and Petrochemicals, Government of India, would disclose that the Government of India, have taken note of the employees opposition to the decision of the Government of India to reduce the age of retirement from 60 to 58 years on the ground that it was discriminatory. The fact that the petitioners have opposed the decision of the Government of India to reduce the age of retirement from 60 to 58 years, is evident from their letter dated 11.08.2000 addressed to the Minister of Chemicals and Fertilizers, wherein they have conveyed their resentment to the roll back. Inasmuch as the petitioners have opposed the decision of the Government to reduce the age of retirement from 60 to 58 years, which was taken note of by the Deputy Secretary, Department of Chemicals and Petrochemicals, Government of India, as indicated in his letter dated 28.06.2000, the petitioners cannot be allowed to contend that that they were not put on notice, before the impugned decision to reduce the age of retirement from 60 to 58 years was taken by the Government of India, as approved by the Board of Directors of IDPL, by passing the resolution. The petitioners having already indicated their resentment to the decision of the Government, through their respective Associations, to reduce the age of retirement from 60 to 58 years, cannot contend that they were not issued notice before the impugned decision was taken and in the non-issuance of notice, the principles of natural justice were violated. In re point No.2: Framing of a policy, which is the function of the executive, depends on various factors, including financial constraints. The petitioners, cannot dispute the fact that the company can change or modify its economic policy from time to time according to changing circumstances and financial constraints. While the discretion to change the policy in exercise of executive power is wide enough, but exercise of such power must be reasonable, fair and should not give an impression that it was exercised in an arbitrary manner for ulterior motives, and it should satisfy the test of Article 14 of the Constitution of India. Keeping these principles in view, it may be noticed whether the policy decision taken by the respondents to reduce the age of retirement of employees below Board level from 60 to 58 years, suffers from any unreasonableness, warranting interference by this Court in exercise of its power of judicial review under Article 226 of the Constitution of India. Though the petitioners contend that the Office Memorandum dated 09.05.2000, issued by the Government of India, gives broad discretion to the company either to implement or not to implement the reduction of age of retirement of employees below Board level from 60 to 58 years, the fact remains, IDPL has been declared a sick industry in 1992 itself, and since then, it