Case: State Of Tamil Nadu  Vs. V.S. Balakrishnan

options to be absorbed as permanent employees of the Federation. He has further argued that the options given by the employees in the year 1975 were linked with GO No. 378 and as such, the terminal benefits offered in the said government order have to be given to the respondents. Mr. Kapil Sibal, learned Senior Counsel, on the other hand has contended that 762 posts - including 513 with incumbents - were transferred to the Corporation by the State Government in the year 1972/74. According to him the government department was convened into a Corporation for the purpose of achieving better results in the field concerned. It was fully known to all the employees that they were going to be absorbed permanently in the service of the Corporation. Mr. V. R. Reddy, learned Additional Solicitor General, appearing for the State of Tamil Nadu has vehemently contended that the respondents left the government service as back as 1972/74 and have, in fact, been serving the Corporation and thereafter the Federation. According to him, the Government could not issue formal order absorbing the respondents permanently in the service of the Federation because stay orders by the courts have been operating throughout. The operation of GO No. 1921 remain stayed throughout the proceedings 11. We agree with Mr. Chidambram that a government servant cannot be deprived of his status as a "civil servant" without his consent. This proposition of law is unexceptionable. But at the same time the facts and circumstances of this case leave no manner of doubt that the only course left for the respondent-employees is to accept the service under the Federation as permanent employees. The Corporation was created in the year 1972 and 762 posts were transferred to the Corporation by the State Government. Obviously, all these posts constituted the Dairy Development Department of the Government. There may not be as many posts left in the Dairy Development Department to accommodate those employees who decline to opt for permanent absorption in the service of the Federation. Therefore, the only practical way to solve the problem at this point of time and in the special facts and circumstances of this case, would be to hold that all the employees shall be deemed to have opted to join the service of the Federation. We are, however, inclined to examine the question as to whether the terminal benefits offered in GO No. 1921 are reasonable or are arbitrary in any respect 12. We have given our thoughtful consideration to the contention raised by Mr. Chidambram that the employees are entitled to the terminal benefits as provided in GO No. 378. We are not inclined to agree with him. It is no doubt correct that some sort of options were given to the employees in the year 1975 but the same were not acted upon for the reason that the operation of GO No. 378 was put in abeyance and later on it was substituted by GO No. 284. Apart from that a decision was taken to wind up the Corporation and in its place constitute a Cooperative Federation. In this view of the matter, we find no fault with the stand of the State Government that the action in respect of the options was dropped. We, therefore, see no force in the contention that the respondents are entitled to the terminal benefits as provided in GO No. 378 13. The judgment of the Madras High Court in S. Ananda case (supra) is of no assistance to the respondents. In that case the options given to the employees of the Industries Corporation were directly linked with GO No. 731. They were specifically asked to give their options on the basis of the terminal benefits detailed in GO No. 731. They accepted the terminal benefits and opted to join the service of the Industries Corporation. The Government also accepted the offers given by the employees. The whole circle, based on the terminal benefits contained in GO No. 731 was completed. The High Court, under the circumstances, came to the conclusion that the Government was bound by the principle of equitable estoppel and could not back out from its commitments under GO No. 731 14. We may now examine the terminal benefits offered in GO No. 1921. we have already enumerated in detail the said benefits in earlier part of the judgment. We are of the view that except the provisions regarding family pension and application of Future Liberalised Pension Rules [Item 3(c) and 3(f) of GO No. 1921] all other provisions of the said GO are reasonable and no fault can be found therewith. We are of the view that once an optee for permanent absorption in the Federation is entitled to pro rata pension in respect of the period of service rendered by him under the Government, he is also entitled to the benefit of the family pension. We, therefore, strike down para 3(c) of the GO and direct that the respondents shall be entitled to the benefit of family pension on the basis of pro rata pension given to them. Similarly, we see no justification why the employees, after their permanent absorption in the service of the Federation, be not given the benefit of further liberalisation of pension rules, if any, in respect of the pension which they are already drawing from the Government. This provision is also on the face of it arbitrary. We, therefore, strike down para 3(f) of the said GO and hold that the employees after their permanent absorption with the Federation shall be entitled to the benefit of the liberalised pension rules, if any, in future. All other provisions of GO No. 1921 are reasonable and as such we uphold the same15. We make it clear that all those employees who have retired after 1-2-1983 they shall be deemed to have opted to join the service of the Federation permanently and, as such. they would be entitled to the terminal benefits in terms of GO No. 1921

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

Explanation:
1[ds]11. We agree with Mr. Chidambram that a government servant cannot be deprived of his status as a "civil servant" without his consent. This proposition of law is unexceptionable. But at the same time the facts and circumstances of this case leave no manner of doubt that the only course left for theis to accept the service under the Federation as permanent employees. The Corporation was created in the year 1972 and 762 posts were transferred to the Corporation by the State Government. Obviously, all these posts constituted the Dairy Development Department of the Government. There may not be as many posts left in the Dairy Development Department to accommodate those employees who decline to opt for permanent absorption in the service of the Federation. Therefore, the only practical way to solve the problem at this point of time and in the special facts and circumstances of this case, would be to hold that all the employees shall be deemed to have opted to join the service of the Federation. Weare, however, inclined to examine the question as to whether the terminal benefits offered in GO No. 1921 are reasonable or are arbitrary in anyWe have given our thoughtful consideration to the contention raised by Mr. Chidambram that the employees are entitled to the terminal benefits as provided in GO No. 378. We are not inclined to agree with him. It is no doubt correct that some sort of options were given to the employees in the year 1975 but the same were not acted upon for the reason that the operation of GO No. 378 was put in abeyance and later on it was substituted by GO No. 284. Apart from that a decision was taken to wind up the Corporation and in its place constitute a Cooperative Federation. In this view of the matter, we find no fault with the stand of the State Government that the action in respect of the options was dropped. We, therefore, see no force in the contention that the respondents are entitled to the terminal benefits as provided in GO No.are of the view that once an optee for permanent absorption in the Federation is entitled to pro rata pension in respect of the period of service rendered by him under the Government, he is also entitled to the benefit of the family pension. We, therefore, strike down para 3(c) of the GO and direct that the respondents shall be entitled to the benefit of family pension on the basis of pro rata pension given to them. Similarly, we see no justification why the employees, after their permanent absorption in the service of the Federation, be not given the benefit of further liberalisation of pension rules, if any, in respect of the pension which they are already drawing from the Government. This provision is also on the face of it arbitrary. We, therefore, strike down para 3(f) of the said GO and hold that the employees after their permanent absorption with the Federation shall be entitled to the benefit of the liberalised pension rules, if any, in future. All other provisions of GO No. 1921 are reasonable and as such we uphold the same15. We make it clear that all those employees who have retired afterthey shall be deemed to have opted to join the service of the Federation permanently and, as such. they would be entitled to the terminal benefits in terms of GO No. 1921