HON’BLE THE CHIEF JUSTICE SRI G.S. SINGHVI AND HON’BLE Ms. JUSTICE G. ROHINI Writ Appeal Nos. 2342, 2343, 2344, 2345, 2346, 2347 and 2348 of 2003 and Writ Petition Nos. 7214 and 7215 of 2006 Writ Appeal No.2342 of 2003 Between: Visakhapatnam Port Trust, Visakhapatnam, rep., by its Deputy Secretary, Sri M. Sankar Babu, S/o. M. Ramana Rao, Aged 33 years, R/o. Visakhapatnam … Appellant And The Industrial Tribunal-cum-Labour Court, Visakhapatnam and another … Respondents Writ Appeal No.2343 of 2003 Between: Visakhapatnam Port Trust, Visakhapatnam, rep., by its Deputy Secretary, Sri M. Sankar Babu, S/o. M. Ramana Rao, Aged 33 years, R/o. Visakhapatnam … Appellant And The Industrial Tribunal-cum-Labour Court, Visakhapatnam and another … Respondents Writ Appeal No.2344 of 2003 Between: Visakhapatnam Port Trust, Visakhapatnam, rep., by its Deputy Secretary, Sri M. Sankar Babu, S/o. M. Ramana Rao, Aged 33 years, R/o. Visakhapatnam … Appellant And The Industrial Tribunal-cum-Labour Court, Visakhapatnam and another … Respondents Writ Appeal No.2345 of 2003 Between: Visakhapatnam Port Trust, Visakhapatnam, rep., by its Deputy Secretary, Sri M. Sankar Babu, S/o. M. Ramana Rao, Aged 33 years, R/o. Visakhapatnam … Appellant And The Industrial Tribunal-cum-Labour Court, Visakhapatnam and another … Respondents Writ Appeal No.2346 of 2003 Between: Visakhapatnam Port Trust, Visakhapatnam, rep., by its Deputy Secretary, Sri M. Sankar Babu, S/o. M. Ramana Rao, Aged 33 years, R/o. Visakhapatnam … Appellant And The Industrial Tribunal-cum-Labour Court, Visakhapatnam and another … Respondents Writ Appeal No.2347 of 2003 Between: Visakhapatnam Port Trust, Visakhapatnam, rep., by its Deputy Secretary, Sri M. Sankar Babu, S/o. M. Ramana Rao, Aged 33 years, R/o. Visakhapatnam … Appellant And The Industrial Tribunal-cum-Labour Court, Visakhapatnam and another … Respondents Writ Appeal No.2348 of 2003 Between: Visakhapatnam Port Trust, Visakhapatnam, rep., by its Deputy Secretary, Sri M. Sankar Babu, S/o. M. Ramana Rao, Aged 33 years, R/o. Visakhapatnam … Appellant And The Industrial Tribunal-cum-Labour Court, Visakhapatnam and another … Respondents Writ Petition No.7214 of 2006 Between: Visakhapatnam Port Trust, Visakhapatnam … Petitioner And The Industrial Tribunal-cum-Labour Court at Hyderabad and another … Respondents Writ Petition No.7215 of 2006 Between: Visakhapatnam Port Trust, Visakhapatnam … Petitioner And The Industrial Tribunal-cum-Labour Court at Hyderabad and three others … Respondents Counsel for the appellant : Shri P. Sri Raghu Ram (In all the appeals) Counsel for respondent No.2 : Smt. A. Padma (In all the appeals) Counsel for the petitioner : Shri P. Sri Raghu Ram (In both the writ petitions) Counsel for respondent No.2 : Smt. A. Padma (In W.P No. 7214 of 2006) Counsel for respondent Nos.2 to 4: Smt. A. Padma (In W.P. No. 7215 of 2006) ::JUDGMENT:: October 31, 2007 Per G.S. Singhvi, CJ Whether the employees of Visakhapatnam Port Trust (for short, ‘the Port Trust’), who applied for retirement in accordance with the Voluntary Retirement Scheme (short short, ‘VRS’) contained in letter No.LB-16016/7/88- L.II, dated 29-8-1991 sent by the Government of India to the Chairman of the Port Trust are entitled to three months’ notice pay in terms of para 2(c)(iv) thereof irrespective of the dates on which their applications were accepted and they were relieved is the question which arises for determination in these appeals and writ petitions filed against order dated 7-11-2003 passed by the learned Single Judge in Writ Petition No.15113 of 2003 and batch and orders dated 30-12-2005 passed by the Central Government Industrial Tribunal-cum- Labour Court, Hyderabad (hereinafter described as ‘the Labour Court). For the sake of convenience, we have taken the facts from the paper book of Writ Appeal No.2347 of 2003. Sri A. Chittibabu, who was employed in the services of the Port Trust, submitted application dated 8-5-1995 for voluntary retirement in accordance with the policy contained in letter dated 29-8-1991. The competent authority accepted his application on 28-11-1995 and he was relieved on 1-12-1995. Simultaneously, he was paid all terminal benefits specified in para 2(c) of the policy except three months’ notice pay envisaged in sub-clause (iv). After seven years, he filed an application under Section 33-C(2) of the Industrial Disputes Act, 1947 (for short, ‘the Act’) for payment of three months’ notice pay amounting to Rs.16,455/- with interest at the rate of 24% per annum. The same was registered as CMP.No.5 of 2002. He claimed that three months’ notice pay envisaged in para 2 (c)(iv) of the policy is an integral part of the monetary package payable to an employee seeking voluntary retirement and the management of the Port Trust cannot deny the same only on the ground that the application was accepted after three months of its submission. In the counter filed on behalf of the Port Trust, an objection was taken to the very maintainability of the application under Section 33-C(2) on the ground that there was serious dispute on the entitlement of the applicant to receive the amount of notice pay and that such dispute cannot be adjudicated/resolved under Section 33-C(2) of the Act, which confers powers on the Labour Court akin to those of the executing court. It was further averred that the notice pay was not admissible to the applicant because he had drawn full salary by having worked for more than three months after submitting application for voluntary retirement. By an order dated 6-6-2003, the Labour Court allowed the application. The learned Presiding Officer of the Labour Court referred to the judgment of the Supreme Court in Motilal v. Superintendent, Government Press, Jodhpur and others[1], on which reliance was placed by the counsel for the Port Trust, but distinguished the same and overruled the preliminary objection by recording the following reasons: “On the important aspect touching the very maintainability of this application, learned counsel for respondent submitted that the entitlement of the petitioner to the claim of notice pay is very much in dispute as such the present application under Sec.33-C(2) is not maintainable. He relied on a decision reported in 1996 (2) LLJ at page 234 between Motilal and Superintendent, Government Press, Jodhpur & Others. On facts that was a case where Motilal while working on daily wage basis in a Government printing press, was paid some additional amounts. Basing on an internal Audit report, it was directed to recover the excess amount paid to Mr.Motilal. Motilal contended the said amount was rightly paid and it cannot be recovered. But the amount was deducted from the salary of Motilal. Then he filed application U/s.33-C(2) of I.D.Act challenging the said recovery from his salary. The Labour Court dismissed the application observing Under Sec.33-C (2), the petition is not maintainable. It was held by Their Lordship, the procedure Under Sec.33-C (2) are in the nature of execution proceedings. Its object is to provide speedy and effective remedy for realization of the money or benefit due to a workman; in other words, to enforce and execution of existing rights. Where the claim is seriously and genuinely disputed and decision for ascertainment of the dispute is necessary, then such matters cannot be decided under Sec.33-C(2) unless the correctness and propriety of the order for recovery of the amount is adjudicated, the workman would not get the relief by means of an application under the above provision. In the case on hand, it is a fact there is no award deciding the entitlement of the petitioner. Yet, in my opinion, the present application is maintainable for the reason that the denial by respondent of the 3 months notice pay is not genuine. The respondent admitted in its counter that the respondent issued circular dated 4.3.99 to take necessary steps to release notice pay in the light of the judgment in O.S.No.1059/95 and O.S.1060/95 and in the appeals A.S.No.171/98 and A.S.No.172/98 on the file of District Court, Visakhapatnam and directed to comply the Court orders wherever necessary in case of all employees who retired under Voluntary Retirement Scheme in whose cases their earlier applications were rejected and accepted again without taking fresh applications.” The learned Presiding Officer then relied on the judgments of the civil courts in O.S.Nos.1059 and 1060 of 1995 and A.S.Nos.171 and 172 of 1998 and held that notwithstanding the fact that the applicant worked for more than three months after submitting the application for voluntary retirement and drawn salary, he is entitled to three months’ notice pay. Accordingly, he allowed the application with interest at the rate of 6%. Similar orders were passed in favour of other employees who filed C.M.P.Nos.75, 76, 77 and 78 of 2004. The appellant challenged the orders of the Labour Court in Writ Petition Nos.15113, 15114, 15115, 15116, 15117, 15118 and 15119 of 2003. By a common order dated 07-11-2003, the learned Single Judge dismissed all the writ petitions. He referred to the contents of the policy, the judgments of the Supreme Court in Vice-Chairman and Managing Director, APSIDC Ltd. V. R.Varaprasad[2] and of this Court in S. Nagabhushana Rao v. Hindustan Shipyard Ltd.[3] and held that the Labour Court did not commit any error by directing the Port Trust to give notice pay to the workmen. Paragraph 10 of the order of the learned Single Judge, which contains the rationale of his conclusion, reads as under: “10. From the above, it is clear that when once a cut off date has not been fixed under the Scheme, but a cut off date is fixed only while accepting the application of the employee, such date has to be taken into account not only for computing the terminal benefits under the Scheme but also the ‘notice pay’. Though the learned counsel for the petitioners relied upon a decision of the Apex Court, the Apex Court did not take into account the date of submission of application as the criteria for computing the period of ‘notice pay’. On the other hand, it is only the cut off date, which was fixed while accepting the application of the employees under the Scheme, which was taken into account and if any employee is continued after such cut off date for a period of three months or more, such employee was not entitled for the ‘notice pay’. Admittedly, in the present case, it is not the case of the writ petitioner that any of the employee was continued after the cut off date fixed while accepting the application under the Scheme. All the employees, whose applications were accepted, were relieved on the cut off date fixed by the employer and in such a case, the employees are entitled for the ‘notice pay’, as none of them worked with the employer and has not drawn any salary after the cut off date. Further, as rightly held by this Court, the acceptance of the application of the employee under the scheme amounts to termination of service of the employee by the employer and ‘notice pay’ is required only after the acceptance of the application. Therefore, the unofficial respondents are entitled for three months ‘notice pay’ from the cut off date fixed by the employer. Further, as the writ petitioner has already accepted the judgment of the civil court and implemented it by paying the ‘notice pay’ with reference to the similarly placed other employees, there is no justification to deny the same benefit to the unofficial respondents herein. The clarification relied upon was issued with reference to the 1988 Scheme and there is no material also showing the same was communicated to the unofficial respondents. Therefore, there is no merit in the said contention.” The aforementioned order is under challenge in Writ Appeal Nos.2342, 2343, 2344, 2345, 2346, 2347 and 2348 of 2003. In Writ Petition Nos.7214 and 7215 of 2006, the Port Trust has challenged orders dated 30-12-2005 passed by the Labour Court in C.M.P.Nos.75, 76, 77 and 78 of 2004 for grant of three months’ notice pay to four employees, who sought voluntary retirement. Sri P. Sri Raghu Ram, learned counsel for the Port Trust strongly relied on the judgment of the Supreme Court in Vice-Chairman and Managing Director, APSIDC Ltd. V. R.Varaprasad (supra) and argued that the reason assigned by the learned Single Judge for distinguishing the same is legally untenable. Learned counsel submitted that the object of giving one or three months’ notice pay in terms of para 2(c)(iv) of the policy framed by the Government of India is to provide a monetary cushion to the employee seeking voluntary retirement so that he may not face acute financial difficulty immediately on being relieved pursuant to the decision of the competent authority to accept the application for voluntary retirement, and argued that such of the employees who were allowed to continue in service for three months or more after submission of the applications for voluntary retirement are not entitled to receive an amount equivalent to three months notice pay and the learned Presiding Officer of the Labour Court committed a jurisdictional error by granting relief to the private respondents. In support of this argument, Sri P. Sri Raghu Ram relied on para 3 of the clarification circulated by the Government of India vide letter No.LB-16012/10/92- L.II, dated 29-10-1992. He further argued that the reason assigned by the Labour Court for rejecting the objection to the maintainability of the application under Section 33-C(2) is legally unsustainable and the orders which were subject matter of the writ petitions are liable to be set aside because the procedure contemplated in that section is in the nature of execution proceedings and the Labour Court cannot make an adjudication on the substantive right of the workman to receive the particular amount. Sri P. Sri Raghu Ram also distinguished the judgment of the learned Single Judge i n S. Nagabhushana Rao v. Hindustan Shipyard Ltd. (supra) by pointing out that the issue arising in these appeals and writ petitions was neither raised nor considered in that case. Smt. A. Padma, learned counsel for the private respondents supported the orders of the Labour Court and learned Single Judge and argued that the Port Trust is under an obligation to give three months notice pay to an employee seeking voluntary retirement irrespective of the date on which he is relieved. She emphasised that delay on the part of the competent authority in accepting the application for voluntary retirement cannot be made basis for denying the benefit of notice pay to the employee in terms of para 2(c)(iv) of the policy, else it would result in discrimination between similarly situated persons. She further argued that the applications filed by the private respondents under Section 33-C(2) of the Act were rightly entertained by the Labour Court because the objection raised by the Port Trust to the entitlement of the workmen to receive notice pay in terms of para 2(c)(iv) of the policy was illusory and wholly untenable. We have given serious thought to the entire matter. Letter dated 29-8-1991 of the Government of India, vide which the policy of voluntary retirement was circulated, reads as under: “Government of India Ministry of Surface Transport (Labour Division) No.LB-16016/7/88-L.II New Delhi, 29th August, 1991 To Shri P.V.R.K. Prasad, Chairman, Visakhapatnam Port Trust, Visakhapatnam-530 035. Subject: Voluntary Retirement Scheme for Port Trusts and Dock Labour Boards. * * * * * I am directed to say that the matter regarding introduction of a uniform Voluntary Retirement Scheme for officers, employees and workers of Port Trusts and Dock Labour Boards has been under consideration of the Government. After careful consideration it has been decided that Port Trusts and Dock Labour Boards can introduce Voluntary Retirement Scheme with a view to reducing surplus manpower subject to the following terms and conditions:- 2. (a) An employee who has completed 10 years of service or completed 40 years of age may seek voluntary retirement by a written request. (b) The Port Trusts and Dock Labour Boards will have the right not to grant voluntary retirement for reasons to be recorded in writing. (c) The terminal payments available to an employee who seeks voluntary retirement would be: (i) the balance in his Provident Fund Account payable as per the GPF/CPF regulations applicable to him; (ii) cash equivalent of accumulated earned leave as per the rules of the Port Trusts/Dock Labour Board; (iii) gratuity as per Gratuity Act or the gratuity scheme applicable to the employee; (iv) one month’s / three months’ notice pay (as per the conditions of service applicable to him). (v) Pension as per the rules of the Port Trust/Dock Labour Board. (d) In addition, an employee whose request for Voluntary Retirement is accepted would also be entitled to an ex-gratia payment equivalent to ½ months emoluments (pay plus Disciplinary Authority) for each completed year of service or the discounted value of the emoluments (at 12% rate of discount) that would have become payable for the balance months of service left, whichever is less. For example, an employee who has put in 24 years of service and has got only one year of service for normal retirement, he will get ex-gratia payment of only 12 months emoluments (pay plus Disciplinary Authority) discounted at 12% per annum and not 36 months’ emoluments. (e) In addition, the employee and his family would also be entitled to travel by the entitled class to the place where he intends settling down. 3. While introducing the voluntary retirement scheme, port trusts and Dock Labour Boards will make an assessment of surplus man-power taking into account the present and future operational requirements. While accepting the Voluntary Retirement of the employee, the port trust/dock labour board will also issue an order that the vacancy caused by the Voluntary Retirement would not be filled up and the post is abolished. 4. No claim of the dependents of the employees going on voluntary retirement for any compassionate appointment under the Port Trust/Dock Labour Board will be entertained. 5. The Voluntary Retirement Scheme would be financed by the Port Trusts/Dock Labour Boards from their own resources and no budgetary support in the form of loans will be granted by the Government. 6. Port Trusts and Dock Labour Boards can introduce a Voluntary Retirement Scheme on the above parameters, after seeking approval of the Ministry. Yours faithfully, Sd/- (P.K. MISHRA) Director.” Letter dated 29-10-1992 vide which the Government of India circulated clarification dated 29-5-1992 and para 3 thereof read as under: “No.LB-16012/10/92-L.II New Delhi, the 29th Oct.,1992 To The Chairman, Cochin Dock Labour Board, P.O.Box No.544, Willingdon Island, COCHIN-682 003. Sub:- Voluntary Retirement Scheme – clarification – reg. ******* Sir, I am directed to refer to your D.O. Letter No.SEC/473/92/1973 dated 22-8- 1992 on the above subject and to say that the matter has been examined in consultation with Finance Wing. Guidelines on VRS issued to Port Trusts and DLBs by this Ministry have been generally based on the guidelines of VRS issued by the Department of Public Enterprises for PSUs and, therefore, clarifications issued by DPE would be applicable to Port Trusts/Docks also. A copy of the clarification issued by the Department of Public Enterprises vide their O.M.No.2(36)/86- OPE(WC) dated 29-5-1992 is enclosed for necessary action. Yours faithfully, Sd/- (S.S. Bharaj) Desk Officer.” “Para-3 3) Should no at period pay be paid in all cases? 3) If an application of an employee for voluntary retirement is accepted instantaneously & payment is arranged by the management on the same day, the concerned individual would be entitled to payment of ex-gratia as per the norms given in sub- paragraph (d) of paragraph 1 of the OM dt.5.10.88 along with the notice period pay. It is, however, clarified that payment of ex-gratia for service rendered or left over service before superannuation as well as the amount payable for the notice period should not exceed the basic pay plus DA, that would have been paid to the employees w h o has opted for voluntary retirement till the date of his superannuation. For example, if an employee opts for the voluntary retirement a few months before the date of superannuation, say, at 57 years & 10 months the payment should be restricted to 2 months basic pay plus Dearness Allowance. In circumstances where the management takes time to take a decision about the accepted of an application submitted by the employee for voluntary retirement and allows the notice period to lapse or the individual concerned had drawn full salary during the notice period served by him, in these cases notices notice period pay would not be admissible as the individual has already drawn the salary during the notice period.” The details of the applications made by the employees for VRS and the dates of acceptance etc. are contained in a statement which is marked as Annexure-A to this judgment. A careful reading of the policy contained in letter dated 29-8-1991 makes it clear that an employee could seek voluntary retirement on completion of ten years service or 40 years age. On acceptance of the application by the competent authority, the employee became entitled to receive the monetary package specified in clauses (i) to (v) of para 2 (c). The purpose of giving one month or three months’ notice pay to an employee seeking voluntary retirement was nothing except to provide him cushion in the form of financial assistance or extra monetary benefit if he was asked to go immediately. The same purpose could be achieved if the concerned employee was allowed to continue in service after submission of the application for voluntary retirement. I n Vice-Chairman and Managing Director, APSIDC Ltd. V. R.Varaprasad (supra), the Supreme Court considered a question identical to the one raised in these appeals and writ petitions. The facts of that case were that APSIDC, which is a government company, floated VRS Phase I on 1-6-1995. After two years and about one month, the Corporation issued circular dated 4-7-1997 and invited applications from the employees who were eligible to seek retirement under the scheme. 416 employees gave their options for voluntary retirement. The Corporation accepted their options on 18-10-1997 treating 31-10-1997 as the cut-off date for the purpose of VRS. The employees were relieved from service on 15-11-1997. As per the scheme, the employees were entitled to three months’ pay in lieu of notice. Since the employees had worked for 15 days beyond the cut-off date and earned salary for that period, they were given two months and 15 days notice pay in addition to 15 days salary. On 1-10-1997, the State Government issued a clarification in the following terms: “in the circumstances where the management takes time to take a decision about the acceptance of the application of the employee and allows the notice period to lapse or the individual concerned has drawn all salary during the notice period, in these cases notice-period pay would not be admissible as the individual has already drawn salaries during the notice period”. After about two months, the Corporation issued VRS Phase-II. 212 employees including respondent Nos.1 to 32 in the appeal submitted their options for voluntary retirement. Their options were accepted fixing 28-2-1998 as the cut-off date for the purpose of calculating the VRS claims. The concerned employees were relieved from service on 31-7-1998. Since they were permitted to continue in service beyond the notice period of three months, they were given full salary and allowances up to 31-7-1998, but were not given notice pay. The employees challenged the decision of the management not to give them notice pay by filing writ petitions under Article 226 of the Constitution of India. Clauses (c), (d) and (i) of the scheme, which fell for consideration by the High Court were as under: “(c) For calculation of VRS ex gratia, as well as reckoning eligibility, the date of acceptance of the application will be taken into consideration. Any increase in the salary after the cut-off point/date cannot be taken into consideration. However, for calculating the compensation for ‘remaining period of service’ wherever applicable, no compensation shall be paid for the period for which the salary has already been drawn by the employee after submission of VRS application. (d) The VRS option exercised is final as far as employee is concerned. (e) There shall be no separate notice either for the