Case: A.K. Bindal &amp; Another Vs. Union of India &amp; Others

the total compensation amount has to be calculated on the basis of existing pay scale and as there was no revision of pay scales since 1972, the petitioners have got a very small amount. Learned counsel has further submitted that there can be no waiver of fundamental rights and even if an employee has opted for VRS and has taken the amount and left the company it would not mean that he has foregone his right to claim the salary which he was entitled to get during the period when he was an employee of the company. 30. The material on record shows that both FCI and HFC had suffered continuous losses. The Financial status of the companies as on 31.3.1996 was as under: 31. In the year 1996-97 FCI and HFC projected net losses of Rs. 562.51 crores and Rs. 438.99 crores respectively. The total loss suffered by these companies as on 31.1.2003 was Rs. 8874.00 crores and 7421.52 crores respectively. The Government extended non-plan budgetary assistance of Rs. 2369.00 crores to FCI and Rs. 2227.00 crores to HFC upto 31.1.2003. 32. The units of the companies have already suspended their operations quite some time back and as on date no unit is functioning nor any production is being made. There is also no denial of the fact that the companies have suffered huge losses and salaries of the employees who were practically doing no work has been paid by the Government for a considerable long period. The employees accepted VRS with their eyes open without making any kind of protest regarding their past rights based upon revision of pay scale from 1.1.1992. 33. The Voluntary Retirement Scheme (VRS) which is some times called Voluntary Separation Scheme (VSS) is introduced by companies and industrial establishments in order to reduce the surplus staff and to bring in financial efficiency. The Office Memorandum dated 5.5.2000 issued by Government of India provided that for sick and unviable units, the VRS package of Department of Heavy Industry will be adopted. Under this Scheme an employee is entitled to an ex-gratia payment equivalent to 45 days emoluments (pay + D.A.) for each completed year of service or the monthly emoluments at the time of retirement multiplied by the balance months of service left before the normal date of retirement, whichever is less. This is in addition to terminal benefits. The Government was conscious about the fact that the pay scales of some of the PSUs had not been revised with effect from 1.1.1992 and therefore it has provided adequate compensation in that regard in the second VRS which was announced for all Central Public Sector Undertakings on 6.11.2001. Clause (a) of the scheme reads as under: a) Ex-gratia payment in respect of employees on pay scales at 1.1.87 and 1.1.92 levels, computed on their existing pay scales in accordance with the extant scheme, shall be increased by 100% and 50% respectively. 34. This shows that a considerable amount is to be paid to an employee ex-gratia besides the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and forgoing all his claims or rights in the same. It is a package deal of give and take. That is why in business world it is known as Golden Handshake. The main purpose of paying this amount is to bring about a complete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights, with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing the scheme would be totally frustrated. 35. The contention that the employees opted for VRS under any kind of compulsion is not worthy of acceptance. The petitioners are officers of the two companies and are mature enough to weigh the pros and cons of the options which were available to them. They could have waited and pursued their claim for revision of pay scale without opting for VRS. However, they, in their wisdom thought that in the fact situation VRS was a better option available and those the same. After having applied for VRS and taken the money it is not open to them to contend that they exercised the option under any kind of compulsion. In view of the fact that nearly ninety nine per cent of employees have availed of the VRS Scheme and have left the companies (FCI & HFC), the writ petition no longer survives and has become infructuous.36. Shri Nageshwar Rao, learned senior counsel appearing in Transferred Case No. 35 of 2000 (Writ Petition filed by employees of HFC in Calcutta High Court) apart from challenging the validity of the Office Memorandum on the same grounds also urged that the price of urea was fixed by the Government under Fertilizer Control Order which was wholly unremunerative and, therefore, the employees cannot in any way be held responsible for the losses suffered by the Units and consequently they should not be made to suffer on that account. We are unable to entertain this submission as the factual foundation for such a plea has not been laid in the pleadings. That apart, learned counsel for the respondents has made a statement that the Government had reimbursed the Units in that regard. 37. For the reasons discussed above,

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

Explanation:
0[ds]considerable amount is to be paid to an employee ex-gratia besides the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and forgoing all his claims or rights in the same. It is a package deal of give and take. That is why in business world it is known as Golden Handshake. The main purpose of paying this amount is to bring about a complete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights, with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing the scheme would be totallypetitioners are officers of the two companies and are mature enough to weigh the pros and cons of the options which were available to them. They could have waited and pursued their claim for revision of pay scale without opting for VRS. However, they, in their wisdom thought that in the fact situation VRS was a better option available and those the same. After having applied for VRS and taken the money it is not open to them to contend that they exercised the option under any kind of compulsion. In view of the fact that nearly ninety nine per cent of employees have availed of the VRS Scheme and have left the companies (FCI & HFC), the writ petition no longer survives and has become infructuous.