1 pps IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 3130 OF 1998 Avinash Trimbak Namjoshi Age 60, Occupation Retired, res. at 208, Shri Gopal Vihar, S.No.127/1-B, Kothrud, Off. Karve Road, Pune 411 029 ...Petitioner Versus 1. Indian Oil Corporation Ltd. A Public Sector Undertaking, having its registered and Head Office at G-9, Ali Yavar Jung Marg, Indian Oil Bhavan, Bandra (East), Mumbai 400 051. 2. Life Insurance Corporation of India, having its head office at “Yogakshema”, Jeevan Beema Marg, Mumbai 400 021. ...Respondents 2 Mr. Nitin P. Deshpande for the Petitioner. Mr. K.P.Anilkumar for the Respondent No.1 Ms. Paranjpe i/b. Negandhi Shah & Himayatullah for the Respondent No.2 CORAM:- A.M.KHANWILKAR & R.Y.GANOO, JJ. JUDGMENT RESERVED ON: 16th JUNE, 2011 PRONOUNCED ON:- 22nd JULY, 2011. JUDGMENT (PER R.Y.GANOO, J.) 1. By this petition under Article 226 of the Constitution of India, the petitioner has prayed that appropriate writ or direction be issued to the respondents to pay to the petitioner post retirement benefits as mentioned in Annexure I annexed to the memo of petition, along with interest at the rate of 18% on the delayed payments. This relief is sought in terms of prayer clause (a). By prayer clause (b), the petitioner has prayed for declaration that the action of the respondent no.2 refusing to modify the option no.8 under the post retirement benefit scheme available to the employees of the respondent no.1 is 3 arbitrary and illegal and hence violative of Article 14 of the Constitution of India. By prayer clause (c) the petitioner has prayed for direction to the respondent to make available to the petitioner option no.8 which was in vogue prior to 1.4.1995, out of the 8 options mentioned in the booklet Annexure C annexed to the memo of petition. By prayer clause (d) an alternate prayer is made so as to seek directions to the respondents to permit the petitioner to avail of option no.5 out of 8 options listed in the booklet i.e. Annexure C to the petition. 2. Few facts necessary for the disposal of this petition are as under: The petitioner joined the employment of the respondent no.1 on 22nd June, 1966, as Sales trainee and he ceased to be in service from 30th September, 1994 on account of he having opted for voluntary retirement. The respondent no.2, Life Insurance Corporation of India, operates scheme called as Super Annuation Benefit Fund Scheme., as and by way of post retirement benefit. The respondent no.1 had taken master policy from respondent no.2 for the benefit of its employees who would be retiring from time to time. As per the scheme, as and when the officer of Respondent no.1 is due to retire, 4 the respondent no.1 would buy annuity from respondent no.2 by making full payment for such annuity under the Master Policy and thereafter respondent no.2 would make monthly payment of annuity to the said employee for whose benefit the annuity has been purchased, like the petitioner. 3. The petitioner opted for voluntary retirement by his application dated 27th May. 1994. His request for voluntary retirement was granted on 5th September, 1994. The petitioner retired w.e.f 30th September, 1994. The notional date of retirement of the petitioner was 31st May, 1995. The petitioner had submitted his option for said annuity scheme on 30th September, 1994 and the due date of payment of first instalment under said annuity scheme was mentioned by the petitioner in the option form as 1st July, 1995. The petitioner had opted for option no.8. After the petitioner retired from service of respondent no.1, the petitioner started getting annuity at the rate of Rs.1343/- per month. 4. The petitioner, has by this petition raised demand in respect of his service dues and retirement benefits. It would be convenient to deal 5 with each demand separately. It has been the contention of the petitioner that the respondent no.1 has wrongly calculated his total length of service. According to the petitioner, he joined the services of respondent no.1 on 22nd February, 1966 and he retired w.e.f. 30th September, 1994 and that is how his total length of service was 28 years 7 months and 8 days for calculating the pension and that the said length of service should have been used for the purpose of calculation of amount due to him as per the annuity scheme. According to the petitioner, the respondent no.1 has not taken into consideration the period from 22nd February, 1996 till 22nd February, 1996 as part of his service and to that extent there has been an error on the part of the respondent no.1 in arriving at the total length of service. According to the petitioner this omission has caused financial loss to the petitioner. Learned Counsel Mr. Anilkumar appearing for respondent no.1 refuted this contention and submitted that the petitioner joined the services of the respondent no.1 as Sales trainee w.e.f. 22nd February, 1996 and he started working with respondent no.1 on regular basis on 22nd February, 1967. According to him, the period spent in training was rightly excluded while calculating length of service rendered by the petitioner. The 6 petitioner has mentioned in paragraph 12 of the petition that services rendered by one Mr. K.T.Karode for the first year was calculated for counting total length of service. According to the petitioner, the benefit extended to Mr. Karode should have been extended to the petitioner. The petitioner has quoted cases of Mr. Brahme and Mr.P.G.Joshi on the same point. 5. We have considered the rival submissions and we are inclined to reject the argument of the petitioner. The petitioner has, in paragraph 3 of the petition admitted that he was appointed as Sales Trainee w.e.f. 22nd February, 1966 and that he was confirmed in the service from 22nd February, 1967. The petitioner has not been able to place on record any documentary evidence to show that he was appointed with respondent no.1 on full fledged basis on 22nd February, 1966. The very fact that the petitioner has accepted that he was appointed as Sales trainee on 22nd February 1966, belies his claim that he joined respondent no.1 as regular employee w.e.f 22nd February, 1966. Surely, the period spent by the petitioner with respondent no.1 as trainee from 22.2.1966 to 22.2.1967 cannot be considered for the purpose of calculating the total length of service rendered by the 7 petitioner with respondent no.1. 6. The next point raised by the petitioner is as regards encashment of leave. It is common ground that at the time when petitioner retired , 154 days sick leave on half average pay was standing to his credit and as per the leave rules the petitioner was entitled to encashment of said leave. According to the petitioner, instead of allowing the petitioner to encash the leave on half pay, he has been granted encashment at one forth pay and to that extent the petitioner is deprived of Rs.19237/-. In support of this stand, the petitioner has relied upon the Leave Rules at Annexure I-1. As against this, learned Counsel appearing on behalf of the respondent no.1 placed before us Circular No.717 dated 4th April, 1995 and pointed out administrative instruction no.2 regarding the encashment of leave. He pointed out that petitioner had to his credit 154 days sick leave on half average pay. He submitted that it would mean that full pay sick leave would be 77 days. He submitted that the petitioner, as per the leave rules and the instructions contained in the circular No.717 dated 4th April, 1985 was entitled to encash 77 days of leave on half average pay basis. According to him, the petitioner has been paid monies on the 8 basis of 77 days half average page and that is how the petitioner’s dues as regards leave encashment have been rightly settled. 7. We have considered the rival submissions and we are inclined to accept the stand taken by the respondent no.1 as regards payment of encashment of leave. The leave rules relied upon by the petitoner at Exhibit I-1 and Circular No.717 dated 4th April, 1985 along with administrative instructions would clearly go to show that if an employee avails of one day sick leave, he would get half day’s salary. Hence the calculation arrived at by the respondent no.1 in terms of submissions mentioned by the learned Counsel for the respondent no. 1 will have to be accepted as after commuting the leave of 154 days leave, petitioner would have 77 days full pay leave and he was entitled to encash it on half pay basis. Hence the respondent no.1 has not committed any error in arriving at the calculation as regards payment of leave encashment. To that extent the claim of the petitioner will have to be rejected. 8. The petitioner has in paragraph 14 of the petition made a grievance that the amounts payable in regard to the items mentioned at nos.1 to 9 6 of paragraph 14 were settled and actual payment in respect of the said amounts were made belatedly. Annexure I to the petition is another table prepared by the petitioner showing the amounts paid to him belatedly. According to the petitioner, the respondent no.1 had assured to the petitioner that his post retirement benefits would be settled within two months from the date of his retirement. The petitioner has mentioned in the said paragraph as to when the particular benefit was payable to him and as when the amount covered by the said benefit was paid to him and the delay occasioned in making the payment. Learned Counsel Mr. Deshpande, appearing on behalf of the petitioner had drawn our attention to the judgment in the case of State of Kerala and Others vs. M. Padmanabhan Nair AIR 1985 (SC) 356, and had submitted that if there is delay in payment of retirement dues, the employee would be entitled to interest. 9. Learned Counsel Mr. Anil Kumar, appearing on behalf of the respondent no.1 had drawn our attention to Exhibit 2 to the affidavit in reply dated 12th June, 2006 filed by the respondent no.1. The said annexure is inter office memo dated 5th September, 1984 addressed to 10 the petitioner. By the said letter, the request of the petitioner to get relieved from the service of respondent no.1 w.e.f 30th September, 1994 was accepted and the petitioner was informed that he will be eligible for various benefits available to the officer/worker on normal retirement as contained in the annexure excepting the post retirement medical benefit and super annuation benefit will be allowed to him from the notional date of retirement. Learned Counsel Mr. Anil Kumar, appearing on behalf of the respondent no.1 had pointed out that though the petitioner was relieved from service w.e.f. 30th September, 1994, the notional date of retirement of the petitioner was on 31st May, 1995. He, therefore, submitted that the petitioner would be entitled to calculate the delay, if any, w.e.f. 31st May, 1995. He therefore submitted that the dates mentioned in the column “payable on” at para 14 of the petition cannot be accepted as it is. He submitted that the period from 30th September, 1994 upto 31st May, 1995 cannot be taken into account while considering the stand of the petitioner as regards delay in making the payment. He further submitted that the petitioner himself has stated in paragraph 14 that he was given to understand that the post retirement benefits would be settled within the period of two months from the date of retirement. 11 He submitted that this would mean that the dues could have been settled within two months from 31st May, 1995. He therefore submitted that, taking into consideration the relevant dates, the various payments made by the respondent no.1 to the petitioner were made within the permissible period, the stand of the petitioner that the delay has occasioned in making the payment cannot be accepted. 10.Learned Counsel Mr. Anil Kumar, appearing on behalf of the petitioner also took us through paragraph 16 of the affidavit in reply and pointed out that the petitioner was occupying the company quaters at Pune and he had not vacated the said quarters in time. He submitted that the respondent no.1 did not pay the dues to the petitioner till such time he vacated the quarters and according to the respondent no.1 soon after the petitioner vacated the quarters, the respondent no.1 has paid all the dues. Learned Counsel Mr. Anil Kumar, therefore submitted that the stand of the petitioner that there was delay in payment of retirement dues should not be accepted. He submitted that if this contention of Respondent no.1 accepted, the petitioner is not entitled to any interest. 12 11.The petitioner, has in paragraph 16 of the petition admitted that the dues were not paid to him till he vacated the quarters. According to the petitioner, the petitioner had mortgaged his flat at Kandivli valued at more than 10 lakhs to respondent no.1, which was released only on 10th October, 1995. According to the petitioner, the respondent no.1 had no business to retain the petitioners mortgaged flat for a period of one year or more and claim that there was a delay in payment of gratuity and other benefits to which the petitioner is not at fault. 12.We have considered the submissions. It is true that the petitioner was relieved from service w.e.f. 30th September, 1994. However, the notional date of retirement of the petitioner was 31st May, 1995 and the petitioner has not raised any dispute about this. On account of this, the argument advanced by the respondent no.1 that delay, if any, cannot be reckoned from 30th September, 1994 is required to be accepted. Even the petitioner has accepted that his dues ought to be settled within a period of two months from his date of retirement i.e. the respondent no.1 had to pay the dues two months from 31st May, 1995. It is noticed that the benefits such as gratuity and leave 13 encashment were paid on 16th March, 1995. Apart from the aforesaid point, it is seen that the petitioner did not vacate the quarters soon after his retirement and the petitioner held the said quarters for an unduly long time. The petitioner has not specifically stated as to when he vacated the quarters. The fact that the petitioner did not vacate the quarters within permissible period has gone unchallenged. As the petitioner did not vacate the quarters on the due date, the respondent no.1 were justified in withholding his retirement dues. The action of the respondent no.1 in withholding the retirement dues till the petitioner vacated the quarters cannot be faulted. We are not very much concerned with the transaction between the petitioner and the respondent no.1 as regards the flat of the petitioner and the relevant averments set out in paragraph 16. Fact remains that the petitioner did not surrender the quarters within due date and that is how the respondent no.1 did not pay the dues till he vacated the quarters. Consequently, petitioner’s claim as regards delay in paying retirement dues cannot be accepted. The claim of the petitioner for interest is also required to be rejected. 13.The petitioner, has in paragraph 15 claimed that on account of 14 memorandum of understanding arrived at between the Officer’s Association and the management of respondent no.1 revised pay scales of the employees were to be fixed on the basis of salary as on 1.1.1987. According to the petitioner, so far as he is concerned, his salary was fixed as of 31st December, 1986 resulting in reduced pay of Rs.150/- per month for four years. The petitioner has put up money claim on this basis. According to the petitioner, though representation was made to the respondent no.1 in terms of letter dated 13th October, 1997 the respondent no.1 did not care to reply. In so far as this aspect is concerned, we are inclined to observe that this claim of the petitioner is put up at belated stage. The petitioner ceased to be in service w.e.f. 30th September, 1994. It is difficult to accept that the petitioner was not aware of facts relating to fixation of salary with effect from 31.12.1986 till filing of this petition. Surely, the petitioner must be aware of his entitlement. If this be so, the petitioner ought to have made grievance by filing appropriate proceeding before the appropriate forum, if at all his salary was wrongly fixed. The petitioner even did not care to make representation to respondent no.1 immediately after fixation of his salary as set out in paragraph 15. The petitioner admits that he made 15 representation for the first time on 13th October, 1997. Suffice it to note that the grievance about pay fixation suffers from laches. Accordingly, the stand of the petitioner that there was an error in fixing his pay on the basis of memorandum of understanding cannot be entertained by this court. 14.Now, we come to the claim of the petitioner as regards Super Annuation Benefit Fund Scheme. The petitioner admits that he was governed by the said scheme and had exercised option no.8. According to the petitioner, he was told that out of options 1 to 8 if option no.8 was accepted it would be most beneficial option for him and on the basis of the said representation petitioner accepted option no.8. However, we find that there is no material before this court to support this stand. 15.According to the petitioner, as per the said scheme, he received a sum of Rs.1343/- per month. Whereas, he should have received Rs. 2272/- per month. The petitioner has contended that while calculating the annuity the respondent nos.1 and 2 no doubt calculated the annuity on the basis of option no.8, but it was to the disadvantage of 16 the petitioner and according to the petitioner if it was not represented to him that option no.8 would be more beneficial, he would have opted for option no.5. The petitioner claims that on account monetary loss suffered by him, he should now be permitted to modify his option no.8 and that the action of the respondent no.2 in refusing to modify the option no.8 should be declared as arbitrary and illegal. The petitioner has also contended that the petitioner should be paid annuity by applying option no.8 on the basis of calculations which were prevailing prior to 1.4.1985. The petitioner has also contended that now he should be permitted to avail of option no.5 instead of option no.8 and appropriate payments should be made. Learned Counsel for the petitioner had drawn our attention to the booklet relied upon by the petitioner at Annexure A. According to the petitioner, at the time when he exercised the option and filled in his option form, he was not given to understand that the calculation for his annuity would be as per the mode of calculation arrived at as of 1st April, 1995. According to the petitioner, the conduct of respondent nos.1 and 2 in the matter of applying the option, calculating the appropriate amount payable to the petitioner is incorrect and to that extent the petitioner is entitled to the benefits 17 sought in the petition. 16. It is noticed that Mrs. Sarita Garg, the Officer of respondent no.2 has filed an affidavit in reply. The said affidavit in reply indicates the details as regards the annuity scheme and it is contended that the first date of payment of annuity was set out by the petitioner in his handwriting as 1st July, 1995. Exhibit B is copy of the said form. Photostat copy of the same was made available to the court in the course of hearing. The petitioner has not raised dispute about this. According to the respondent no.2, though petitioner was relieved on 30.9.1994, the annuity was to be purchased by respondent no.1 with reference to the notional date of retirement i.e. 31st May, 1995 and as such the terms and conditions of the annuity and mode of calculation prevailing on 1.4.1995, was to be applied so far as petitioner. According to the respondent no.2, as per the option exercised by the petitioner and also the mode of calculation prevailing on 1..4.1995, the sum of Rs.1,45,398/- was fixed as the amount to be paid by the respondent no.1 to the respondent no.2 for purchase of annuity in the name of petitioner and accordingly, respondent no.1 purchased annuity by paying sum of Rs.1,45,398/- on 11.8.1995 and the 18 monthly annual instalment was fixed at Rs.1343/- and the annuity instalment due from July 1995 to November 1995 were paid by respondent no.2 and received by the petitioner on 23rd November, 1995. It is also stated in the said affidavit that interest for belated payment of instalments were paid at the rate of 9% per month. It has been the stand of the respondent no.2 in the said affidavit that revised formula as regarding arriving at the annuity was effected on 1st April, 1995 and that is how the annuity amount was fixed. It was contended by the learned Counsel for respondent no.2 that as the first instalment of annuity was payable on 1st July, 1995 the calculations which were arrived at on 1st April, 1995 were made applicable to the petitioner’s case and that is how the annuity amount has been fixed. Learned Counsel Ms. Paranjpe, appearing on behalf of respondent no.2 relied upon the judgment in case of Sasadhar Chakravarty & Anr. vs. Union of India & Ors. (1996) 11 SCC 1 to submit that the date on which the annuity is purchased is relevant. She drew our attention to paragraph 9 of the said judgment. Paragraph 9 reads as follows: “9. The petitioners contend that any improvements made in the existing pension scheme after the retirement of the employees should also be made 19 available to such retired employees who are the existing pensioners of the Fund. The denial of the benefits of such improvements in the pension schemes to the existing pensioners is ultra vires Articles 14, 19, 21, 31 and 300-A of the Constitution of India. This contention is based on a misunderstanding of the nature of the annuity which is purchased in respect of each employee as and when he retires. The right of an employee to receive the annuity and the quantum of this annuity gets determined at the time when the annuity is purchased. Any subsequent improvements in a given Pension Fund Scheme would not be available to those persons whose rights are already crystallised under the annuity scheme by which they are governed because the amounts contributed by the employer in respect of such persons are already withdrawn from the Pension Fund will benefit only those whose moneys form a part of the Pension Fund.” 17.She further submitted that the calculations arrived at by the respondent no.2 were right and the claim of the petitioner that he has suffered in terms of money so far as the question of exercise of option is concerned cannot be accepted. Learned Counsel appearing on behalf of respondent no.2 therefore submitted that once the option was exercised by the petitioner there was no question of changing the said option and there was no question of allowing the petitioner to enjoy the annuity on different formula. She therefore submitted that all the contentions of the petitioner as regards annuity scheme should be rejected. 20 18.Learned Counsel appearing on behalf of the respondent no.1 supported the stand of the respondent no.2. He submitted that the option exercised by the petitioner was taken note of. He pointed out that letter dated 9th July, 1996 (Annexure D to petition) was sent to the petitioner in reply to petitioner’s letter dated 19th June, 1996. He therefore submitted that the calculations arrived at, so far as the payment of annuity amount to the petitioner was right and the claims put by the petitioner is concerning the annuity on