IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Special Appeal No. 229 of 2009 U.P. Cooperative Federation Ltd. and another……… Appellants. Versus Uttaranchal State Cooperative Marketing Federation Ltd and others .……. Respondents. Mr. Paresh Tripathi, Advocate with Mr. Ashish Joshi, Advocate for the appellants. Mr. Subhash Upadhyaya, Advocate for respondent No. 1. None for respondent No. 2. Mr. J.C. Belwal, Advocate for respondent No. 3. Date of decision: 14.05.2010 JUDGMENT Coram: Hon’ble J.S. Khehar, C.J. Hon’ble V.K. Bist, J. J.S. KHEHAR, C. J. (Oral) Respondent No. 3 was inducted as a Salesman in the District Office of the Uttar Pradesh Cooperative Federation Ltd., Lucknow (hereinafter referred to as the “U.P. Federation”). Subsequently, respondent No. 3 was absorbed in the appellant Federation against the post of Assistant on 01.11.1975. 2. The composite State of Uttar Pradesh was re-organized w.e.f. 09.11.2000, leading to the creation of the successor State of Uttar Pradesh, as also the successor State of Uttarakhand. Despite the aforesaid reorganization, respondent No. 3 even after 09.11.2000 continued to remain in the U.P. Federation. 3. With effect from 01.01.2005 an independent Cooperative Federation came into existence in the State of Uttarakhand, i.e. Uttaranchal State Cooperative Marketing Federation Ltd. (hereinafter referred to as the “U.K. Federation”). The services of respondent No. 3 were allocated to the U.K. Federation w.e.f. 01.01.2005. 2 4. A Memorandum of Understanding was entered into between the U.P. Federation and the U.K. Federation, so as to determine the distribution of assets and liabilities, as also the employees of the U.P. Federation prior to 01.01.2005. The aforesaid Memorandum of Understanding dated 06.11.2004 was appended to the counter affidavit filed on behalf of the appellants herein as Annexure C.A.-11. Although on the issue of assets and liabilities paragraphs 1, 5 and 7 are relevant, but the same need not be extracted hereunder as they have no nexus to the controversy raised by the appellants before this Court. In so far as the aforesaid Memorandum of Understanding dated 06.11.2004 is concerned, learned counsel for the appellants have placed reliance on paragraphs 2 and 3 thereof, which are being extracted hereunder: “2- fnukad 15-12-2004 ls ifjlEifRr;ksa ,oa deZpkfj;ksa ds gLrkUrj.k dh izfdz;k izkjEHk dj fnukad 31-12-2004 rd iw.kZ dj yh tk;sxhA fnukad 01-01-2005 ls mRrjkapy ,oa mRrj izns’k ds e?; gq, le>kSrs ds vk/kkj ij] ih0lh0,Q0 ds mRrjkapy jkT; esa dk;Zjr deZpkjh] mRrjkapy jkT; ds ekus tk;saxsA 3- deZpkfj;ksa dh ih0lh0,Q0 esa lsok vof/k dh Hkfo"; fuf/k] xzsT;wVh] vftZr vodk’k] tekur jkf’k ,oa vU; ns;ksa dk Hkqxrku ih0lh0,Q0 }kjk 'kklu dh uhfr ds vuq:i fd;k tk;sxkA” The English translation of paragraph 2 (extracted hereinabove) reveals, that option would be sought from the existing employees of the U.P. Federation w.e.f. 15.12.2004. Thereafter, the process of transfer of employees between the two Federations would be completed by 31.12.2004. Paragraph 2 expressly also provided, that employees working in the State of Uttarakhand would become the employees of the U.K. Federation. In so far as paragraph 3 of the Memorandum of Understanding dated 06.11.2004 is concerned, its English translation would reveal, that for the disbursement of Provident Fund, Gratuity, Earned Leave, Security and other dues, for the period employees had rendered service under the U.P. Federation, the U.P. Federation would be responsible to shoulder the liabilities. 5. Respondent No. 3 retired on attaining the age of superannuation on 31.10.2008. After his superannuation, he claimed his retiral benefits. By an order dated 22.10.2008, retiral benefits payable by the U.K. Federation, i.e. for service rendered after 01.01.2005 upto the date of retirement on 3 attaining the age of superannuation, was sanctioned by the U.K. Federation, and also released to respondent No. 3. Dues payable to respondent No. 3 prior to 01.01.2005 were, however, not released to him. 6. Another employee of the U.K. Federation, namely, Anand Swarup, approached this Court, seeking retiral benefits for the period prior to 01.01.2005 by filing Writ Petition (S/S) No. 1176 of 2005. The aforesaid writ petition was allowed by a learned Single Judge of this Court on 20.11.2006. Dissatisfied with the order rendered by the learned Single Judge, the appellants herein preferred Special Appeal No. 176 of 2006, which was dismissed by a Division Bench of this Court on 15.06.2007. We have now been informed, that a petition for Special Leave to Appeal was preferred by the appellants herein before the Supreme Court, so as to assail the orders passed by this Court in Writ Petition (S/S) No. 1176 of 2005 and Special Appeal No. 176 of 2006. However, the aforesaid petition for Special Leave to Appeal was also dismissed by the Supreme Court. 7. Based on the determination rendered by this Court, which had attained finality, respondent No. 3 herein, also approached this Court by filing Writ Petition (S/S) No. 541 of 2009. In fact, respondent No. 3 was persuaded to file the aforesaid writ petition, whereas ordinarily the appellants should have accepted judicial verdict, which had attained finality. And the Uttar Pradesh Federation should have released the retiral benefits payable to respondent No. 3 for the service rendered by him prior to 01.01.2005 unilaterally. Be that as it may, Writ Petition (S/S) No. 541 of 2009 was strongly contested. The aforesaid writ petition alongwith a number of other writ petitions were allowed by a learned Single Judge of this Court by an order dated 12.11.2009. 8. The order dated 12.11.2009 rendered by the learned Single Judge, allowing Writ Petition (S/S) No. 541 of 2009 is subject matter of challenge at the hands of the appellants through the instant Special Appeal. 4 9. The solitary contention advanced by the learned counsel for the appellants is based on paragraph 2 of the Memorandum of Understanding dated 06.11.2004 (extracted in paragraph 4 hereinabove). The contention of the learned counsel for the appellants is, that the disbursement of Provident Fund, Gratuity, Earned Leave, Security and other dues mentioned in paragraph 3 of the Memorandum of Understanding dated 06.11.2004 had necessarily to be in conformity with the policy of the Government. It is the submission of the learned counsel for the appellants, that in the absence of any policy, either at the time of the execution of the Memorandum of Understanding dated 06.11.2004 or at any juncture thereafter till the date, it is not open to any party to claim any dues in the nature of Provident Fund, Gratuity, Earned Leave, Security and other dues for services rendered with the U.P. Federation prior to 01.01.2005. 10. In so far as the aforesaid contention is concerned, learned counsel for the appellants has invited our attention to the counter affidavit filed by the appellants in Writ Petition (S/S) No. 1176 of 2005, wherein in paragraph 4 it was asserted as under: “4. That the UP PCF Respondent No. 1 and Respondent No. 4 i.e. UCMF both institutions agreed vide MOU dated 6.11.04 that they will accept and follow the government policy regarding the payment of retiral benefits. The Respondent No. 2 sent several letters to Govt. lastly on 13.1.2006 for this purpose. The Respondent no. 1 and 2 are awaiting the guide lines of the Govt. A part from above fax it is reiterated that the Respondent no. 1 and 2 had handed over properties worth of crores to the UCMF, therefore logically and financially UCMF Respondent no. 4 is liable for payment of post retiral benefits etc. A photo copy of letter dt. 13.1.2006 is being annexed as Annexure No. CA-2.” Learned counsel for the appellants thereafter invited our attention to the Judgment rendered by the learned Single Judge in Writ Petition (S/S) No. 1176 of 2005, wherein in paragraph 8, the contention advanced by the counsel representing respondent No. 3, i.e. the State of Uttar Pradesh, was noticed to the effect, that some time to take a policy decision to provide guidelines in the matter, should be afforded. It is pointed out, that despite the aforesaid factual position having been noticed, no decision was recorded thereon. It is the submission of the learned counsel for the 5 appellants, that the plea presently being raised at the hands of the appellants was also raised in Special Appeal No. 176 of 2006, which was preferred against the order passed by the learned Single Judge, rendered in Writ Petition (S/S) No. 1176 of 2005. In this behalf, our attention has been invited to paragraph 13 of the grounds of appeal. Paragraph 13 is also being extracted hereunder: “13. Because the learned single judge has also failed to appreciate that the minutes of the meeting dated 6.11.2004 being relied by the learned single judge so as to fix the liability of the appellants was of no avail as it referred to the policy being decided by the State Government.” 11. We have considered the material produced by the learned counsel for the appellants, both from Writ Petition (S/S) No. 1176 of 2005, as also from Special Appeal No. 176 of 2006. It is, however, not possible for us to arrive at the conclusion, that the appellants herein ever assailed the claim made by Anand Swarup before this Court on the basis of the contemplated policy determination at the hands of the State of Uttar Pradesh. We shall now advert to the pleadings of the case of respondent No. 3 himself, when he approached this Court by filing Writ Petition (S/S) No. 541 of 2009. It is not disputed at the hands of the learned counsel for the appellants, that even in the instant appeal the same pleas, as were raised while opposing Writ Petition (S/S) No. 1176 of 2005, were noticed in the counter affidavit filed by the appellants. 12. In so far as the instant Special Appeal is concerned, there can be no doubt, whatsoever, that the solitary plea raised at the hands of learned counsel for the appellants has been incorporated in the grounds of appeal. The first two grounds of appeal, wherein the instant matter has been raised, are being extracted hereunder: “a) Because the learned Single Judge has failed to appreciate that the MOU dated 6/11/2004 has to be read as a whole and in its entirety and in the absence of any policy except the Govt. Order dt. 6/9/2006 no liability can be fastened on the appellant. b) Because the learned Single Judge has failed to appreciate that except the MOU dated 6/11/2004 there was no provision for laying down a policy by the Government in the matter pertaining to PCF, hence, the policy was to be enunciated and circulated by the State Government, as per the said MOU, and only 6 after the said policy, framed by the State Government, the matter regarding the payment of dues could have been fastened.” 13. Even though the writ petition filed by respondent No. 3 was not contested on the plea now being raised, since the plea has been raised in the grounds of appeal is styled as a pure question of law, we shall examine the same on merits. In our considered view, the right of an employee to claim Provident Fund, Gratuity, Earned Leave, Security and other dues flows from his conditions of service. The aforesaid conditions of service may be regulated by statutory rules, regulations or executive orders. Neither of these rights accrue or flow on the basis of policy decisions. Therefore, the contention of the learned counsel for the appellants to the effect, that disbursement of Provident Fund, Gratuity, Earned Leave, Security and other dues could not be made till the State of Uttar Pradesh finalized the matter through a policy decision, is clearly unacceptable in law. The instant contention advanced by the learned counsel for the appellants, in our considered view, is without any legal justification, and in fact, is perverse. It is unthinkable, that the State Government, which was obliged to determine a policy when U.K. Federation came into existence as far back as on 01.01.2005, has failed to do so in spite of the lapse of five years. As per the contention of the learned counsel for the appellants himself, no policy decision had been taken by the State of Uttar Pradesh on the date of the creation of the U.K. Federation, nor has any policy decision been taken by the said State thereafter till date. The claim of respondent No. 3 was based on the conditions of his service while he was an employee of the U.P. Federation. And he was well within his rights to claim the same from the U.P. Federation, for the period preceding 01.01.2005 from the U.P. Federation, under the Memorandum of Understanding dated 06.11.2004. We are, therefore, satisfied, that the instant contention advanced by the learned counsel for the appellants deserves to be rejected. The same is accordingly rejected. 14. After concluding his aforesaid submission, learned counsel for the appellants pressed one further submission. It is the contention of the 7 learned counsel for the appellants, that rather than approaching this Court in exercise of writ jurisdiction under Article 226 of the Constitution of India, respondent No. 3 should have approached the authorities under the U.P. Cooperative Societies Act, 1965. In this behalf, it is pointed out, that a remedy was available to respondent No. 3 under section 70 of the U.P. Cooperative Societies Act, 1965, and as such, the instant writ petition should not have been entertained by this Court. 15. We have considered the second contention advanced by the learned counsel for the appellants (as has been noticed in the foregoing paragraph). A Judgment rendered by this Court was also brought to our notice. However, we do not consider it appropriate even to make a reference to the same. It is too late in the day for the appellants to raise such a plea before this Court. In fact, the action of the State authorities in this behalf needs to be seriously deprecated. The points, which have arisen for consideration before this Court, came to be examined in the first instance by a learned Single Judge of this Court, who allowed Writ Petition (S/S) No. 1176 of 2005 on 20.11.2006. Dissatisfied with the aforesaid order, the appellants preferred Special Appeal No. 176 of 2006. The aforesaid special appeal affirmed the order passed in Writ Petition (S/S) No. 1176 of 2005 by an order dated 15.06.2007. Again dissatisfied with the aforesaid order, the appellants approached the Supreme Court, where admittedly the petition for Special Leave to Appeal, preferred by the appellants, was dismissed. The matter having attained finality, the appellants should have unilaterally disbursed all monetary benefits that had accrued to its erstwhile employees in terms of the directions issued on the judicial side. Respondent No. 3 herein approached this Court after the first set of litigation was over, i.e. after the issue was adjudicated in favour of an employee similarly situated as respondent No. 3 herein. The matter was again contested vigorously. While disposing of Writ Petition (S/S) No. 541 of 2009 filed by respondent No. 3, this Court reiterated the earlier position. Still the appellants have chosen to prefer the instant Special Appeal. Herein also, the matter has been agitated tooth and nail. The first contention advanced by the learned counsel for the appellants was without any legal justification and, to our mind, perverse. The second contention 8 advanced by the learned counsel for the appellants (as has been noticed in the foregoing paragraph) also demonstrates the determination of the appellants not to allow justified claims of its employees to flow to them. A frivolous plea of an existence of alternative remedy raised at this juncture, calls for exemplary costs. 16. For the reasons recorded hereinabove, the instant appeal is dismissed. The appellants shall calculate all the retiral benefits under the due payable to respondent No. 3 within one week from today and disburse the entire amount due to respondent No. 3 within a further period of one week. Respondent No. 3 besides being paid the dues, shall be paid interest @ 8% from the date the amount become due till the same is paid. 17. Although we have noticed hereinabove, that exemplary costs deserve to be imposed on the appellants in raising frivolous pleas before this Court, on a second thought, after sentimental pleas were raised by the learned counsel for the appellants, that he will henceforth be careful, and shall never repeat this performance, we refrain ourselves from imposing any costs. (V.K. Bist, J.) (J.S. Khehar, C. J.) 14.05.2010 14.05.2010 Amit