Ifci Ltd. vs Sanjay Behari

1. The celebration of independence of our country also came with many challenges, including in the financial sector. The Industrial Finance Corporation of India Ltd. (for short ‘IFCI’) was the first financial corporation set up soon thereafter, in 1948, with the object of providing Digitally signed by ANITA MALHOTRA Date: 2019.09.17 for the industrial and infrastructural needs of the new born India and to 17:40:47 IST Reason: enable the growth of the economy through medium and long term 1 finance. Passage of time and financial & infrastructural changes resulted in the transformation of IFCI from a statutory corporation to a company under the Indian Companies Act, 1956, in the year 1993. The status of this institution, at present, is of a Government of India Undertaking and a Non-Banking Financial Company, primarily engaged in corporate lending.

2. Changing needs found the IFCI with having, possibly, an excess number of employees at various levels. In order to shed the flab, there have been voluntary retirement schemes introduced, from time to time. The present dispute pertains to the Voluntary Retirement Scheme (for short ‘VRS’) of 2008. The contesting respondents in the present case are thirty-one (31) employees of IFCI who availed of the VRS-2008 on 1.2.2008, and were accordingly relieved from duty on 25.2.2008. There is no dispute that all the benefits under the VRS-2008 were made available to these employees.

3. The issue before us is limited in its character as it arises from a claim by these employees that they would be entitled to an enhanced pension on the basis of subsequent revision of pay-scales, which was 2 given retrospective effect, with effect from the time period when the respondents were still employees of the IFCI.

4. In the context of the aforesaid nature of dispute, it would be relevant to note that the IFCI notified a pension scheme in the year 1993 for its employees, under the Industrial Finance Corporation of India Limited Pension Regulations, 1993 (hereinafter referred to as the ‘said Regulations’). The said Regulations came into effect from 1.11.1993. It would be appropriate to refer to some of the clauses of the said Regulations, which are germane for the determination of the controversy before us.

12. In the next endeavour of such VRS, the VRS-2008 was floated vide H.R. Circular No.1 of 2008, on 1.2.2008 with the avowed object of achieving “optimum manpower utilization in the IFCI and overall reduction in the existing strength of the employees.” The eligibility, as per clause 5 required completion of ten (10) years of service in the IFCI 7 or 40 years of age. The benefits under the Scheme were set out in clause 7 of the Scheme, while the general conditions were set out in clause 9. The relevant clauses are reproduced hereinunder:

16. Insofar as that one employee was concerned, Ms. Sweety Bhalla, she is stated to be a visually challenged employee, and her request was based on the fact that the CTC would not be beneficial to her. We may note that as per the IFCI, as set out in the rejoinder affidavit, there was really no option but to move to CTC, but an exception was made in her case on account of her being visually challenged. Thus, in her case, the revised RBI pay-scales, w.e.f. 1.11.2007, were made available on 23.9.2011, along with arrears. We may note another litigation, which was initiated by Mr. P.P. Vaidya and others, who had similarly retired under the VRS-2008. They filed a writ petition, being WP(C) No.1319/2011, before the Delhi High Court, claiming certain benefits and incentives. This writ petition was dismissed on 18.7.2013. The Letters Patent Appeal was dismissed on 6.5.2014 and the Special Leave Petition was dismissed on 26.9.20141. All these decisions were predicated on the 1SLP(C) No.16364/2014 (P.P. Vaidya & Ors. v. IFCI Ltd. &Ors.) 12 ground that there could not be any other benefits or incentives sought to be derived by them in view of the clear provisions of the VRS-2008.

“7.5 Voluntary retirement amount equivalent to two months’ salary for each completed year of service rendered or the monthly salary at the time of relieving on voluntary retirement multiplied by the balance complete calendar months of service left or Rs.15 lakhs whichever is less. Service rendered by an employee prior to joining the service of the IFCI shall not be reckoned for the purpose of calculating the voluntary retirement amount (Fraction of service of six months and above will be reckoned as one year and fraction of service of less than six months will be 8 ignored for the purpose of calculating years of service rendered in IFCI).” …. …. …. …. ….

29. No doubt the Pension Regulations referred to aforesaid were 21 specifically included as a benefit under VRS-2008. However, the Pension Regulations and the VRS have to be read harmoniously and, in the context of its inclusion, along with the other terms of the VRS. If we refer to the Pension Regulations, no doubt the date of retirement includes the date on which the employee voluntarily retires, but that would mean that the concerned employee would be deemed to have retired on the date he terminates his relationship with the IFCI. As to how emoluments have to be calculated, it is the average emoluments of the last ten (10) months of his service. This would naturally mean the emoluments received just prior to the termination of the relationship of employment. If we turn to the IFCI Regulations, 1974, more specifically Regulation 33, in the context of retirement under the said Regulations taking their meaning from the 1974 Regulations, it refers to an option with an employee, on attaining 50 years of age, to retire any time by giving the Corporation three months’ notice in writing.

33. We may also deal with the inappropriate comparison with Ms. Sweety Bhalla, who was the serving employee, and opted for continuation of RBI pay-scales, in view of her special position, being visually challenged. She was the sole person in this category and thus, benefits were given retrospectively to her. She was not an optee of the VRS.

37. We are firmly of the view that the present endeavour by the private respondents is a misadventure and has to be rejected without any hesitation. The impugned order of the Division Bench of the High Court 26 is, thus, set aside.

38. The appeal is accordingly allowed.

39. We would have been inclined to impose costs but for the fact that the private respondents would be mostly pensioners by now.

September 17, 2019.