IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 14TH OCTOBER 2011 / 22ND ASWINA 1933 OP.No. 16143 of 1999(V) ----------------------- PETITIONER(S): --------------- 1. K.G. GOPINATHAN, ASSISTANT EXECUTIVE ENGINEER, KERALA AGRI INDUSTRIES CORPORATION LTD. THIRUVANANTHAPURAM. 2. P.V. CHANDRASEKHARAN, DEVELOPMENT ENGINEER, -DO-, -DO- 3. P.C. JOHN, ASSISTANT EXECUTIVE ENGINEER, -DO-, -DO- 4. K. SADASIVAN ENGINEER (OPERATIONS), -DO-. -DO- 5. P.G. PURUSHOTHAMAN, SUPERINTENDENT, -DO-, -DO- 6. V.V.PONNAPPAN, ASSISTANT ADMINISTRATIVE OFFICER, -DO-, -DO- 7. MOHAN MICHAEL, REGIONAL ENGINEER, KERALA AGRO INDUSTRIES CORPORATION LTD., PALAKKAD. BY ADV. SRI.B.RAGUNATHAN SRI.V.V.MATHEW SRI.G.GOPALAKRISHNA PILLAI RESPONDENT(S): --------------- 1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM 695 001. 2. KERALA AGRO INDUSTRIES CORPORATION LTD., REPRESENTED BY THE MANAGING DIRECTOR, KERALA AGRO INDUSTRIES CORPORATION LTD., THIRUVANANTHAPURAM 695 023. ADV. SRI.A.M.SHAFFIQUE, SENIOR ADVOCATE ADV. SRI. E.K. NANDAKUMAR FOR R2 GOVERNMENT PLEADER SMT. P. MAYA FOR R1 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 14/10/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP NO. 16143/1999 APPENDIX PETITIONERS' EXHIBITS EXHIBIT P1 : TRUE COPY OF NOTICE DATED 22.08.1997 ALONG WITH ANNEXURE ISSUED TO THE FIRST PETITIONER BY SECOND RESPONDENT. EXHIBIT P2 : TRUE COPY OF REPRESENTATION DATED 29.08.1997 OF OF FIRST PETITIONER TO THE SECOND RESPONDENT. EXHIBIT P3 : TRUE COPY OF REPLY LETTER NO.A1/447 DATED 10.09.1997 OF SECOND RESPONDENT TO EXT.P2 REPRESENTATION. EXHIBIT P4 : TRUE COPY OF LETTER NO. 43758/PU3/95/AD DATED 21.11.1998 OF THE FIRST RESPONDENT TO THE SECOND RESPONDENT. EXHIBIT P5 : TRUE COPY OF NOTE TO THE BOARD OF SECOND RESPONDENT - ITEM NO. 9 (II) THE AGENDA FOR THE BOARD MEETING ON 06.05.1999. EXHIBIT P6 : TRUE COPY OF ORDER NO. 8/99 DATED 07.06.1999 OF SECOND RESPONDENT. EXHIBIT P7 : TRUE COPY OF SERVICE ORDER NO. A1/447 DATED 17.06.1999 OF SECOND RESPONDENT ALONG WITH STATEMENT OF FIXATION OF PAY ISSUED TO THE FIRST PETITIONER. EXHIBIT P8 : TRUE COPY OF ORDER G.O.(P) 445/94/FIN. DATED 26.07.1994 OF FIRST RESPONDENT. RESPONDENTS' EXHIBITS EXHIBIT R2(a) : TRUE COPY OF THE DIRECTION ISSUED BY THE GOVERNMENT VIDE LETTER DATED 04.04.1990. EXHIBIT R2(b) : TRUE COPY OF THE GOVERNMENT LETTER DATED 01.04.1997. EXHIBIT R2(c) : TRUE COPY OF THE SETTLEMENT DATED 14.05.1986. /TRUE COPY/ P.A. TO JUDGE. P.R.RAMACHANDRA MENON, J ----------------------------------------- OP NO. 16143 OF 1999 ------------------------------------ Dated this the 14th day of October, 2011. JUDGMENT The petitioners have approached this Court being aggrieved of the action taken by the respondents, whereby the stagnation increments ordered have been unilaterally withdrawn at the instance of the first respondent, in spite of the strong recommendation by the second respondent. Sequence of events is as follows: 2. Petitioners 1 to 4 and 7 joined the service of the second respondent in different categories of posts during the years from 1969 to 1971. Petitioners 1 to 4 and 7 were working as Assistant Executive Engineers, while the petitioners 5 and 6 were working as Superintendent and Administrative officer respectively. All the petitioners on attaining the age of superannuation, came out of the service a decade back. Based on the settlements in view of the lack of sufficient chance for promotion, the Board of Directors of the second respondent decided to grant stagnation increments to the petitioners and other similarly situated persons. Pursuant 2 OP No. 16143/1999 to the above decision taken by the Board, stagnation increments were granted to the employees like the petitioners as per bilateral agreement dated 04.08.1978 with effect from 01.07.1978 and they were enjoying the benefit accordingly. 3. In the settlement there was a provision enabling the employees to draw annual increments beyond the maximum of the scales of pay at the rates last drawn by them till further revision of the scales of pay. The employees were enjoying the said benefit. As per the award in I.D. 12 of 1984, of the Industrial Tribunal, Kollam, and decision of the Board of Directors of the 2nd respondent Corporation, the drawal of increments beyond the maximum of scales of pay in cases of stagnation was limited to three increments to all the employees including officers. On the basis of the conciliation settlement on 14.05.1986, the employees were allowed the drawal of stagnation increments beyond maximum of scales of pay limited to three from 05.07.1985 onwards. 4. By a memorandum of settlement dated 14.03.1989, revision of the scales of pay to the employees of the 2nd respondent - Corporation was given with effect from 01.07.1983, 3 OP No. 16143/1999 with monetary benefit prospectively from 06.07.1985. This settlement also did not take away the benefit of increments already enjoyed by the employees. In pursuance of the settlement, the Board of Directors of 2nd respondent - Corporation at its meeting held on 23.06.1989, by resolution No. 1547, decided that the employees who had reached the maximum of the revised scales of pay should be allowed to draw stagnation increments limited to three. The employees were allowed to draw the three increments accordingly. 5. While so, the first respondent issued Ext.R2(a) order dated 04.04.1990, expressing that the course pursued by the second respondent company, which is owned by the first respondent was not correct and directed the second respondent to stop paying stagnation increments for the reasons stated therein. However, there was no stipulation in the said order to have the amount already paid to the employees recovered. In the course of subsequent developments, the Government issued Ext.P4 letter dated 21.11.1998, whereby the second respondent was required to recover the entire amount paid to the petitioner and others concerned by way of stagnation increments. This 4 OP No. 16143/1999 made the second respondent to take a decision and to pass Ext.P6 order dated 07.06.1999, ordering recovery of the amounts paid by way of stagnation increment from the salary, by way of equal monthly instalments as specified. This was followed by the order dated 17.06.1999. The petitioners are challenging the correctness and sustainability of the said proceedings. 6. Heard the learned counsel for the petitioner and the learned standing counsel for the second respondent as well as the learned Government Pleader for the first respondent at length. 7. It is contended on behalf of the petitioners that, the course followed by the respondents is quite arbitrary in nature; more so, in connection with the recovery of the amounts paid years back. The factual position is that the petitioners and other similarly situated persons were stagnated in the scale for quite long; which position stands conceded in view of the fact that it was considering the said fact, that the decision was taken by the second respondent to provide stagnation increments. It is also brought out that there is no contribution from the part of the petitioner or any foul-play in the matter of drawing or obtaining 5 OP No. 16143/1999 the stagnation increments which in fact was ordered to be paid by the second respondent based on the Board decision in this regard. 8. The learned counsel for the petitioners submits that all the petitioners have already left the service after attaining the age of superannuation and that the grievance of the petitioners stands confined to the challenge in respect of the recovery of amounts already paid towards stagnation increments. 9. Admittedly, in the instant case, the petitioners cannot be blamed under any circumstances for the reason that the necessity to pay the said benefit was felt and decision was taken based on the settlement executed between the Management of the second respondent and the work force. The first respondent also, while issuing Ext.R2 (a) had not ordered any recovery; which however was changed subsequently, when Ext.P4 was issued nearly after 8 years, insisting for the recovery, followed by Exts.P6 and P7 issued by the second respondent. 10. The Apex Court had occasion to consider the sustainability of recovery in such circumstances and has held in Union of India Vs. Indian Railway SAS Staff Association 6 OP No. 16143/1999 and others [1995 Suppl (3) SCC 600] and Bharath K Gupta Vs. Arum Kumar and another [(2000) 10 SCC 658] that no such step for recovery could be pursued and the law stands settled in favour of the petitioners. In the said circumstances, this Court finds that the respondents are not justified in proceeding with the steps for recovery of the amounts already paid to the petitioners and similarly situated persons towards the stagnation increments years/decade back, based on Award/settlements/ Board decisions. The orders impugned in the Writ Petition, to the said extent, are set aside. The Original Petition is allowed to the above extent. No cost. P.R.RAMACHANDRA MENON JUDGE dnc