IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC THURSDAY, THE 12TH NOVEMBER 2009 / 21ST KARTHIKA 1931 WP(C).No. 22839 of 2009(Y) -------------------------- PETITIONER(S): --------------- SOMASUNDARAM K.S., S/O.SIVARAMAN ACHARY AGED 55 YEARS, `SOORYASOMA', MANKUZHY ROAD, EDAPPALLY TOLL, KOCHI-682 024, ERNAKULAM DISTRICT. BY ADV. SRI.ANTONY M. AMBAT RESPONDENT(S): --------------- 1. HMT LTD., REPRESENTED BY ITS CHAIRMAN & MANAGING DIRECTOR HMT BHAVAN, 59, BELLARY ROAD, BANGALORE-560 032. 2. THE GENERAL MANAGER, HMT MACHINE TOOLS LTD., HMT COLONY P.O., KALAMASSERY-683 503. 3. UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF INDUSTRY, DEPARTMENT OF PUBLIC ENTERPRISES (WC) 14, CGO COMPLEX, LODI ROAD, NEW DELHI-110 003. ADV. SRI.M.PATHROSE MATTHAI, SENIOR ADVOCATE FOR R2 SRI.SAJI VARGHESE FOR R2 SMT.MARIAM MATHAI FOR R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX Ext.P1. True copy of the Office Order No.27/06 dated 22.5.2006 issued by the respondent company. Ext.P2. True copy of the agreement dated 31.7.2006. Ext.P3. True copy of the application dated 31.7.2006 submitted by the petitioner. Ext.P4. True copy of the acceptance letter MTK/HRM/SLS/3887 dated 23.8.2006. Ext.P5. True copy of the relieving order MTK/HRM/3887 dated 26.8.2006. Ext.P6. True copy of the agreement dated 27.8.2006 entered into with the new employer. Ext.P7. True copy of the letter dated 20.7.2009 submitted by the petitioner. Ext.P8. True copy of the letter dated 25.7.2009 requesting to rejoin duty on 26.8.2009. Ext.P9. True copy of the letter dated 6.8.2009 directing the petitioner to rejoin duty. Ext.P10. True copy of the application for voluntary retirement dated 15.10.2007. // true copy// P.A to Judge. ANTONY DOMINIC, J. -------------------------------------------------- W.P.(C) NO.22839 OF 2009 (Y) -------------------------------------------------- Dated this the 12th day of November, 2009 J U D G M E N T Petitioner joined first respondent company on 7.7.1978 and is presently a Senior Engineer in the CNC Assembly (Progress) Department. 2. The first respondent, a Government company, is a sick industrial company, as defined under the Sick Industrial Companies (Special Provisions)Act, 1985 and a revival scheme approved by the BIFR is under implementation. During 2006, apparently in view of the excess manpower and to reduce financial burden, the company introduced Ext.P1, a Special Lien Scheme, permitting its employees to seek career outside the company, subject to the conditions mentioned therein. The scheme provided that during the period of their employment outside, they will retain lien in the company and an employee on rejoining duty after the expiry of lien period shall be paid the basic pay with notional increments, which he would have otherwise drawn during the period of lien, in the same grade as on the date of commencement of the lien. The minimum period WPC.No.22839 /09 :2 : specified was 3 years, which was extendable up to 5 years. Clause (viii) provides that the post of the employee who proceed under the Special Lien Scheme should not be filled even by a Contract/Casual/Temporary Labour. 3. Petitioner applied for the benefit of Ext.P1 scheme and Ext.P2 is an agreement executed between the petitioner and the company, where also provisions of Ext.P1 are incorporated. By this agreement, the company agreed to grant lien for a period of 3 years, making it clear that its duration shall not exceed a maximum period of 5 years. Ext.P4 is the communication issued by the company informing the petitioners about the acceptance of his application made for the benefit of Ext.P1 scheme and by Ext.P5 order, he was relieved from service of the company with effect from 26.8.2006. 4. It is stated that after availing of the benefit of Ext.P1, petitioner accepted employment in M/s. Electronic Controls And Discharge Systems Private Limited, Cochin and Ext.P6 is stated to be the agreement between the petitioner and his new employer. Though the lien period allowed was only three years in Ext.P6, petitioner agreed to serve his new employer for a period of 5 years WPC.No.22839 /09 :3 : and it also provides that in the event of his failure to serve for the minimum period of 5 years, petitioner will pay compensation of Rs.5 lakhs to his new employer. According to the petitioner, as the 3 year lien period was expiring, he submitted Ext.P7 application to the company requesting for extending the period, by a further period of 2 years. Thereafter he submitted Ext.P8 requesting the company to allow him to rejoin duty. Although, it is the case of the petitioner that he was forced to give such a request, this allegation is denied by the respondents. Having regard to the facts of the case and the nature of the controversy involved, I do not think that resolution of that factual controversy is necessary for the disposal of this writ petition. Be that as it may, by Ext.P9 the petitioner was finally informed of the decision of the competent authority of the company not to grant extension of the lien period beyond 3 years for all employees who have availed of the benefit of Ext.P1 scheme. It is on receipt of Ext.P9, the writ petition has been filed by the petitioner. 5. Counsel for the petitioner argued that under Ext.P1 scheme, and in the agreement between the parties, though the minimum duration of the lien period is 3 years, the period was WPC.No.22839 /09 :4 : extendable up to to 5 years. It is stated that acting upon this provision of the scheme and the agreement, petitioner entered into an agreement with his new employer, specifying a period of 5 years with a penalty clause. It is stated that the petitioner was under the legitimate expectation of being allowed lien period of 5 years and he having acted upon such a promise and expectation, there is no reason for the company to deny extension of the lien period as sought for by him. It is also his case that even now the company is sick and there is excess manpower in the company and hence, the decision of the company not to extend the lien period is absolutely unreasonable and arbitrary. 6. Yet another contention raised by the counsel for the petitioner is that in Ext.P10, an application made by the petitioner for availing of the benefit of a voluntary retirement scheme announced by the Company, the company had recommended his application agreeing to surrender the post held by him. On this basis it is contended that even if extension is granted, that will not affect the company in any manner. Lastly, it is contended that consequence of the impugned decision of the company is a loss of Rs.5 lakhs to the petitioner and that for that reason as well, WPC.No.22839 /09 :5 : extension of lien period should have been allowed. 7. Counter affidavit has been filed by respondents 1 and 2. The fact that the company is a sick industrial undertaking and that a revival scheme approved by the BIFR constituted under the provisions of Sick Industrial Companies(Special Provisions)Act, 1985 is under implementation are not in dispute. It is stated that at the time when the petitioner was granted the benefit of Ext.P1 scheme, there was excess manpower in the technical side including the area where the petitioner was working. It is stated that by now the situation in the company has changed and that there is acute scarcity of qualified and experienced hands in the technical side even to meet the immediate requirements of the company. According to the respondents, petitioner is a diploma holder in Mechanical Engineering. The company requires 130 diploma holders to meet its minimum requirements and that at present, there are only 117 diploma holders in the company including the petitioner. It is stated that while there is shortage of technical hands, since the petitioner is continuing on the rolls of the company, in view of the provisions of Ext.P1, it is not possible for the company to fill up the post in any manner. It is also the case WPC.No.22839 /09 :6 : of the company that out of the 8 employees who had opted to avail of the benefit of Ext.P1 scheme, five of them have completed the 3 year period and all except the petitioner have rejoined the company and that request for extension has not been allowed to anyone. 8. It is therefore submitted that there is dearth of experienced technical hands and in such circumstances it is not possible for the company to extend the lien period any further. Proceeding further it is also stated that last year company had to recruit 38 new employees to make up the shortage. 9. In so far as the alleged recommendation made on the application submitted by the petitioner for VRS is concerned, it is stated that the alleged recommendation was made by a Section Head while processing the application and that the Section Head is not the authority to decide on the request for VRS. It is stated that the application was to be considered by a committee constituted for that purpose and that the application made by the petitioner was finally rejected. 10. I have considered the submissions made. WPC.No.22839 /09 :7 : 11. A reading of Ext.P1 scheme and Ext.P2 agreement shows that the duration of lien provided is 3 years, which could be extended up to 5 years. It was in pursuance to this provision in the Scheme that the petitioner was granted 3 years lien period. Although, 3 years lien period was extendable, any such extension has to be by a decision of the company taking into account its requirements as well. This provision conferring a discretion on the company to grant extension of lien period does not create any vested interest in any employee who has availed of the benefit of Ext.P1 to demand that the lien period should be extended ignoring the manpower requirements of the company. The counter affidavit filed by the respondent company shows that there is an acute dearth of technical personnel. Provisions of Ext.P1 scheme also provides that when a person has availed of the benefit of Ext.P1, the company not fill up that post even temporarily. Thus this is a case where the petitioner wants to remain in the employment of the company and does not want to discharge his duties and at the same time, the company need such personnel and is unable to fill up the post, either temporarily or otherwise. In such circumstances having regard to its requirements,if the company has WPC.No.22839 /09 :8 : decided not to extend the lien period, such a decision cannot be faulted. 12. As already noticed, the further plea of the petitioner that having regard to the fact that the post has been agreed to be surrendered, when Ext.P10 application made by him for voluntary retirement, the company cannot now insist that he should join back, also does not deserve acceptance. As stated by the Company in the counter affidavit that was a recommendation made by the Section Head while processing the application, which was not binding on the company and it was therefore that the company has rejected the petitioner's application for voluntary retirement. Further the agreed lien period was for 3 years, the petitioner accepted employment for 5 years. Having regard to the fact that, extension of lien period was subject to the requirements of the company, I do not find any merit in the contention that the company has done anything to give rise to a case of promissory estoppal or legitimate expectation. Therefore if for committing breach of his agreement with his new employer, any damages becomes payable, the respondent company cannot be held responsible. WPC.No.22839 /09 :9 : 13. Having regard to the shortage of technical manpower now felt by the company and as disclosed in the counter affidavit, which fact is not proved to be incorrect by filing a reply affidavit or other materials. I cannot say that the decision of the company not to extend the lien period is an arbitrary one warranting interference at the hands of this court, exercising the powers under Art.226 of the Constitution of India. It cannot also be said that the decision of the company is a discriminatory in as much as the pleadings show that all employees whose lien period expired has been called back and that except the petitioner all have rejoined the company. Writ petition fails and is dismissed. (ANTONY DOMINIC) JUDGE vi/