IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI TUESDAY, THE 29TH JANUARY 2008 / 9TH MAGHA 1929 OP.No. 34502 of 2001(G) ----------------------- PETITIONER: ------------ M.YATHINDRA DAS, JAYATHI, NEDUNGADI GARDENS, KOZHIKODE 673 011 BY ADV. SRI.SHAJI P.CHALY RESPONDENTS: ------------- ENGINEERS INDIA LTD., REP. BY ITS CHAIRMAN AND MANAGING DIRECTOR, ENGINEERS INDIA BHAVAN, 1, BHIKAIJI CAMA PLACE, NEW DELHI 110066 BY ADV. SRI.ANTONY DOMINIC SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SMT.PRIYA MAHESH SMT.PRIYA MANJOORAN THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 29/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP.No. 34502 of 2001 APPENDIX EXHIBITS EXT.P1- TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT TO THE PETITIONER DATED 20.4.00 EXT.P2- TRUE COPY OF THE LETTER SENT BY THE PETITIONER TO THE RESPONDENT DATED 20.4.00 EXT.P3- TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT TO THE PETTIONER DATED 25.4.00 EXT.P4- TRUE COPY OF THE LETTER SENT BY THE PETITIONER TO THE RESPONDENT DATED 27.4.00 EXT.P5- TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT TO THE PETITIONER DATED 28.4.00 EXT.P6- TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT TO THE PETITIONER DATED 14.7.00 EXT.P7- TRUE COPY OF THE LETTER ISSUED BY THE RESPNDENT TO THE PETITIONER DATED 25.5.00 EXT.P8- TRUE COPY OF THE LETTERE ISSUED BY THE RESPONDENT TO THE PETITIONER DATED 17.11.00 ALONG WITH INTER-OFFICE MEMORANDUM EXT.P9- TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT TO THE PETITIONER DATED AUGUST 13,01 EXT.P10- TRUE COPY OF THE REPRESENTATION FILED BY THE PETITOINER TO THE RESPONDENT DATED 21.8.01 EXT.P11- TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT TO THE PETITIONER DATED SEPTEMBER 21, 01 EXT.R1(a)- TRUE COPY OF THE CIRCULAR NO.9/00, THE COMPANY INTRODUCED SCHEME CALLED EARLY SEPARATION UNDER THE SCHEME OF VOLUNTARY RETIREMENT EXT.R1(b)- TRUE COPY OF THE CIRCULAR CIRCULAR NO.17/00 DATED 28.4.00 ALONG WITH ITS ANNEXURES. (TRUE COPY) P.A TO JUDGE V.GIRI, J ------------------- O.P. 34502/2001 -------------------- Dated this the 29th day of January, 2008 JUDGMENT Petitioner, who joined service in the respondent company, on 9.8.1973 retired as Assistant General Manager on 30.4.2000 on him opting for voluntary retirement. The dispute in this case centers around the commutation of VRS benefits due and admissible to the petitioner. Apparently when petitioner was in service on 29.10.1999, he filed an application for pre-mature retirement on medical grounds. Though the petitioner’s application for pre-mature retirement on medical grounds was processed, ultimately what was approved was the petitioner’s request for voluntary retirement. This was conveyed under Ext.P5 and the petitioner was informed that he would be entitled to avail medical coverage facility under the Company’s Post Retirement Medical Coverage Scheme for himself and spouse, if a contribution is paid in advance. This was done. O.P.34502/2001 2 Pay scale applicable to the petitioner was revised on 1.1.1997 itself as per Circular No.17/2000 dated 28.4.2000 which was indicated in Ext.P7. One aspect dealt with in the Circular relates to the protected personal pay. As per Circular No.9/2000, Ext.R1(a), the benefits that an employee whose application for earlier separation was accepted is entitled to, is provided under clause 6 thereof. Note under clause 6(1)(e) reads as follows:- Monthly emoluments means Basic Pay (including Personal Pay, etc.) plus Dearness Allowance as admissible immediately preceding the date of separation from the service under this scheme.” Though basic pay is indicated as including personal pay etc, clause 5(3) of R1(b) Circular, which is referred to in Ext.P7, (which deals with the revision of scales of pay of Officers in the organisation with effect from O.P.34502/2001 3 1.1.1997) provides that the amount of protected pay shall remain frozen and treated as lump sum amount personal to the individual officer without any consequentials being admissible/payable thereon. The protected pay shall however, be reckoned only for the purpose of determining payment of employer’s and employee’s contributions towards Provident Fund, Gratuity and Superannuation Benefit. It seems that distinction has been drawn up in this regard between the personal pay and protected personal pay. Protected personal pay, as contemplated by Ext.R1(b) Circular does not become part of the pay scale which is applicable to the post in question. Clause 3.1 of Ext.R1 (b) Circular provides for the manner in which basic pay as on 1.1.1997 for the officers on the rolls of the Company was to be arrived at. The relevant portion of the same reads as follows:- In order to arrive at the Basic Pay as on 1.1.1997 from existing to the corresponding revised scale of pay in respect of officers on the rolls of the O.P.34502/2001 4 Company as on 1.1.1997, the fitment methodology as given hereunder will be followed- Basic Pay (BP) as on 31.12.1996 and Personal Pay (PP) as on 1.1.1992. PLUS Corresponding DA at AICPI of 1708 as on 1.1.1997. PLUS Fitment benefit of 20% (on basic pay as on 31.12.1996 and PP as on 1.1.1992). The basic pay for an officer of the company as on 1.1.1997 was inter alia to be the aggregate of the basic pay as on 31.12.1996 and personal pay as on 1.1.1992. In other words, the revision of scales as on 1.1.1997 would reflect not only basic pay as on 31.12.1996 but also the personal pay which the officer draws as on 1.1.1997. But since the revision of the scales of pay was enforced only with effect from 1.1.1997, the amount became payable by way of personal pay in relation to the O.P.34502/2001 5 period from 1.1.1992 to 31.12.1996. Apparently, this difference which was consequential upon a revision with reference to prior date was decided to be given not in a lump but by spacing it out with effect from 1.1.1997. Thus, along with the revised pay that was made available to the officer on 1.1.1997, he was also given monthly emoluments, described as a protected personal pay. The payment was being effected, not in relation to the pay scale fixed on 1.1.1997 but payment of an amount which was consequential upon the revised pay brought about in Ext.R1(b). It so happened, VRS benefit due to the petitioner came to be calculated by taking into account the protected personal pay, that was made available to the petitioner as per Ext.P8. Apparently this was inconsistent with clause 5.4 of Ext.R1(b) Circular which provides that the protected pay shall be reckoned only for the purpose of determining payment of employees contribution towards Provident Fund, Gratuity and superannuation benefit. Since VRS benefit shall be O.P.34502/2001 6 calculated on the basis of Ext.R1(b), respondents apparently committed a mistake in calculating the said amount by taking into account the protected personal pay of the petitioner. When this was realised, the petitioner was asked to re-fund the same vide Ext.P11, which has been challenged in this Writ Petition. Counter affidavit has been filed by the respondents supporting Exts.P8 and P9. I heard the learned counsel for the petitioner Mr.Shaji.P.Chaly and the learned counsel for the respondents Mr.A.K.Jayasankar Nambiar. Quantification of the amount due to the employee caused by the voluntary retirement in terms of Exts.R1 (b) and R1(a) has been outlined by me elaborately as above. The stand taken by the respondents therein that VRS benefits due and admissible to the petitioner was wrongly calculated by taking note of the protected personal pay being drawn by him on the date of acceptance of his option, (which is obviously on O.P.34502/2001 7 1.1.1997) seems to be tenable and reasonable. The basis for calculation of VRS benefits would be loss of salary and since, stricto sensu protected personal pay was not part of the emoluments that the petitioner was entitled to in relation to the period subsequent to 1.1.997, but was actually a stagerred payment of amount attributable to the service from 1.1.1992 to 1.1.1997, respondents were justified in demanding the petitioner to re-fund the excess amount. I do not find any error or illegality in Ext.P11 issued by the respondents. Learned counsel for the petitioner submits that the demand for the amount which is close to One Lakh rupees from a retired employee would be harsh and therefore, it would be necessary to extend the facility of instalments. In my view this is a reasonable request. In the result, writ petition is disposed of upholding Ext.P11. Enforcement of Ext.P11 in so far as the directions to the petitioner to re-fund an amount of O.P.34502/2001 8 Rs.98,910/- shall be kept in abeyance for a period of one year from today, provided the petitioner pays the said amount either in lump or in instalments within the aforementioned period. But it is made clear that the medical benefits that the petitioner and his spouse are entitled to, along with other benefits under the scheme shall continue to be made available. It is open to the respondents to take further steps to recover the amount demanded under Ext.P11, if there is default on the part of the petitioner in paying the amount as permitted above. Writ Petition is disposed of as above. V.GIRI, Judge mrcs O.P.34502/2001 9