Case: Hindustan Machines Tools Ltd Vs. P.N. Kashyap etc

computation thereof has been enumerated in the scheme which reads as under: "It has been decided to introduce a Voluntary Retirement Scheme for the employees of the Company as per the enclosed copy comprising of two parts viz., Scheme `A and Scheme `B. The scheme will be in operation from 1.4.1989 for a period of three months, subject to the following further conditions:i) Scheme A shall be applicable only to the employees of Lamp Unit, Hyderabad in WG Cadre with the terms and conditions specified in Scheme A for a period of three months from 1.4.1989.ii) Scheme B shall be applicable to all the Units/Divisions (including Lamp), Business Group Directorates, other offices and Corporate Office with the terms and conditions specified in the enclosed scheme, for a period of three months from 1.8.1989.iii) The scheme does not confer any right on any employee to have his request for voluntary retirement accepted by the competent authority. Right to accept or reject the application for voluntary retirement shall entirely vest with the Company.iv) Acceptance of application for Voluntary Retirement shall depend inter alia on availability of funds in the respective Units/Divisions/Business Group Directorates, other Offices and Corporate Office.v) The eligible employees requesting for voluntary retirement, subject to acceptance of their requests by the competent authority shall be entitled to such benefits as are specified in the scheme.Such employees may be persuaded to deposit the benefits received, in the Companys Fixed Deposit Scheme.2. The existing Medical Retirement Scheme and Voluntary Retirement Scheme introduced for Hyderabad based Units of the Company shall stand discontinued with the introduction of the above Voluntary Retirement Scheme.3. The Units and areas within the Units, where the Scheme could be implemented will separately be intimated by the DPS.4. The progress of implementation of the Scheme with regard to the number of employees in each cadre and the total amount paid on account of compensation shall be reported to DPS every month." 9. For the computation of the payment of the compensation in terms of the calculation, the `Note postulates that the salary mentioned under Scheme A and B shall mean basic pay, Dearness Allowance, Interim Relief/ad hoc Relief and Personal Pay, if any, and shall be calculated on the basis of a calendar month. In other words, this contract has expressly omitted to mention the revised scale of pay from time to time. The reason would be obvious. An employee who retires on completing the age of 50 years but before the age of 58 years, is not entitled to the payment of any special component of the salary as indicated hereinbefore. On the other hand, he will be entitled only to the retiral benefits as are available under the normal Rules. If the company, in public interest, instead of giving one months notice makes payment of salary in lieu thereof then employee would be entitled to nothing more except other retiral benefits like pension, gratuity etc. The procedure in regard to the calculation of the payment of the compensation and method of computing the compensation has been provided in Para Vl; the details whereof are not material for the purpose of these cases. Para IX of the Special Scheme postulates that retirement on medical grounds in terms of clause 24.1 and voluntarily retirement in terms of clause 24.2(b) and (c) of the Conduct, Discipline and Appeal Rules of the Company shall fall outside the purview of the scheme. In other words, the special scheme excluded such of the employees who voluntarily retired under Rule 24.1 or 24.2(b) and (c) of the Conduct, Discipline and Appeal Rules of the Company. Para Xll in this behalf is more relevant wherein it says that the Chairman and Managing Director shall have power to amend, modify, alter or withdraw the above Scheme either in whole or in part, at his directions, if the circumstances so warrant. In other words, whatever components are enumerated thereunder would be binding on the parties until the Chairman and the Managing Director before acceptance amends, modifies, alters or withdraws the above scheme. 10. It is seen that the Office Order No. 45 dated March 1, 1991 provides that the revised pay scales shall be effective from 1.1.1987 and will remain in force for the period of five years upto 31.12.1991. Clause 2.2 provides that the revised pay scales shall also be applicable on a pro rata basis to those categories of employees who were on the rolls of the company as on 31. 12.1986 but have subsequently separated due to superannuation and voluntary retirement etc. Those who retired on attaining the age of 58 years or voluntarily retired under Rule 24.2(b) or (c), as the case may be, under the Conduct, Discipline and Appeal Rules referred to hereinbefore. The benefits of the revision of pay scales shall not be applicable to those persons who were on the rolls of the Company as on 31.12.1986 but subsequently left the service of the company before the date of issue of Office Order No. 45/90 for any reason, whatsoever, including resignation except the category mentioned in clause 2.2 above. Thereby, the necessary implication is that all those who are covered and stand on the same footing are excluded except to the extent of gratuity, revision of the terminal benefits as mentioned in para 6.13 which postulates that gratuity paid or payable to employees covered under Clause 2.2 will be recalculated on the revised pay subject to the prescribed ceiling. Thus, it could be seen that the distinction has been drawn between employees who retired voluntarily under Rule 24.2 of the Conduct, Discipline and Appeal Rules or the employees who retired under the Special Scheme operating from time to time. The respondents having retired under the Special Scheme are not employees covered under the voluntary retirement under Rule 24.2 of the Conduct, Discipline and Appeal Rules referred to hereinbefore. Accordingly, the High Court was not right in directing recomputation of the compensation under Office Order No. 45 dated March 1, 1991.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. It is seen that the Office Order No. 45 dated March 1, 1991 provides that the revised pay scales shall be effective from 1.1.1987 and will remain in force for the period of five years upto 31.12.1991. Clause 2.2 provides that the revised pay scales shall also be applicable on a pro rata basis to those categories of employees who were on the rolls of the company as on 31. 12.1986 but have subsequently separated due to superannuation and voluntary retirement etc. Those who retired on attaining the age of 58 years or voluntarily retired under Rule 24.2(b) or (c), as the case may be, under the Conduct, Discipline and Appeal Rules referred to hereinbefore. The benefits of the revision of pay scales shall not be applicable to those persons who were on the rolls of the Company as on 31.12.1986 but subsequently left the service of the company before the date of issue of Office Order No. 45/90 for any reason, whatsoever, including resignation except the category mentioned in clause 2.2 above. Thereby, the necessary implication is that all those who are covered and stand on the same footing are excluded except to the extent of gratuity, revision of the terminal benefits as mentioned in para 6.13 which postulates that gratuity paid or payable to employees covered under Clause 2.2 will be recalculated on the revised pay subject to the prescribed ceiling. Thus, it could be seen that the distinction has been drawn between employees who retired voluntarily under Rule 24.2 of the Conduct, Discipline and Appeal Rules or the employees who retired under the Special Scheme operating from time to time. The respondents having retired under the Special Scheme are not employees covered under the voluntary retirement under Rule 24.2 of the Conduct, Discipline and Appeal Rules referred to hereinbefore. Accordingly, the High Court was not right in directing recomputation of the compensation under Office Order No. 45 dated March 1, 1991.