Case: Vice Chairman &amp; M.D.,A.P.S.I.D.C.Ltd&amp;Anr Vs. R.Varaprasad

The Andhra Pradesh State Irrigation Development Corporation Ltd. (for short Corporation) is a Government company, registered under the Companies Act, 1956. Pursuant to the national policy, the State of Andhra Pradesh issued instructions for floating Voluntary Retirement Scheme (VRS) in the Government companies and corporations. The Corporation introduced the VRS (Phase-I ) on 1.6.1995. In the light of the said Scheme the Corporation issued a circular on 4.7.1997 inviting applications from the employees, who were eligible under the Scheme. In response to the same 416 employees submitted their options seeking voluntary retirement. The Corporation accepted their options on 18.10.1997 treating 31.10.1997 as cut off date for all purposes of VRS. The funds, for giving benefits under the Scheme to the employees, were made available to the Corporation by the State Government during the first week of November, 1997. The employees, whose options had been accepted, were relieved from service on 15.11.1997. As per the Scheme offered, the employees were entitled to three months pay in lieu of notice. The cut off date was fixed as 31.10.1997. The employees had worked 15 days beyond the cut off date and earned salary for the period. Hence they were given two months and 15 days notice pay in addition to the 15 days salary. On 1.10.1997 the State Government issued a clarification stating, "in the circumstances where the management takes time to take a decision about the acceptance of the application of the employee and allows the notice period to lapse or the individual concerned has drawn all salary during the notice period, in these cases notice period pay would not be admissible as the individual has already drawn salaries during the notice period."2. The Corporation issued another VRS (Phase II) on 12.12.1997 seeking options from the employees. 212 employees, including respondents 1 to 32 in this appeal, submitted their options for voluntary retirement. The options were accepted fixing the cut off date as 28.2.1998 for the purpose of calculating the VRs claims of the employees. Since the State Government insisted for pre audit clearance by the Director of Treasuries and Accounts to pay the claims of the employees, it took some time and the funds were provided by the State Government only on 25.7.1998. The optees were relieved from service on 31.7.1998. They were permitted to continue in service beyond the notice period of three months and they were given full salary and allowances up to 31.7.1998, i.e. for a period of five months (including period of notice pay) beyond the cut off date. They were not given notice pay while settling their claims under the Scheme because they had also drawn salary during that period.3. The respondents 1 to 32 filed writ petition No. 21901 of 1998 in the High Court seeking a writ of mandamus directing the Corporation to pay all service benefits as if they were in service up to 31.7.1998. The Corporation resisted the writ petition by filing a detailed counter affidavit contending that the writ petitioners were not entitled for any relief. The learned single Judge of the High Court allowed the writ petition and directed the Corporation to pay three months notice pay treating the cut off date as 31.7.1998 though specific prayer was not made in the writ petition to this effect. The Corporation was also directed to calculate the terminal benefits of the optees as if they were continued in service till 31.7.1998 notwithstanding the cut off date fixed was 28.2.1998. Aggrieved by this order of the learned single Judge the appellants filed writ appeal No. 633 of 1999 before the Division Bench of the High Court. The same was dismissed by the Division Bench holding that the action of the Corporation in not giving notice pay to the employees covered under the second phase of VRS was discriminatory and violative of Article 14 of the Constitution of India as such benefit was given to the employees covered under the first phase of the VRS. Under these circumstances the appellants have called in question of the validity and correctness of the impugned judgment and order of the Division Bench of the High Court affirming the order of the learned singleAppeal Nos. 4658-4659 ofThese appeals are directed against the common order made in W.P. 15703 of 1999 and W.P. No. 15742 of 1999. Respondent No.1, Vijay Kumar, in C.A. No. 4658 of 2001 and respondent No.1, A. Simhadri, in C.A. No. 4659 of 2001 (hereinafter referred to as respondents) filed writ petition Nos. 15703 of 1999 and 15742 of 1999 in the High Court seeking direction to the appellant-Corporation to continue them in service till they attain superannuation. Both are covered by VRS Phase-III. The Corporation fixed 31.10.1998 as cut off date for VRS Phase-III. Respondents Vijay Kumar and A. Simhadri filed applications seeking voluntary retirement under the said Scheme on 31.10.1998 and 10.10.1998 respectively. Corporation accepted their options on 24.11.1998 and 27.10.1998, which were also acknowledged by the respondents on 26.11.1998 and 2.11.1998. Thereafter, they applied for withdrawal of the option given for VRS on 8.1.1999 and 26.2.1999 respectively. These respondents could not be relieved from service along with large number of other employees who were relieved on 31.7.1999 under VRS Phase-III because of the interim order granted by the High Court in the writ petitions filed by them. The Division Bench of the High Court, by the impugned order, allowed the writ petitions and directed the Corporation to continue their services till their attaining the age of superannuation. In doing so, the High Court followed the decisions of this Court in Balram Gupta vs. Union of India and Another (AIR 1987 SC 2354 ), J.N. Srivastava vs. Union of India and Another (AIR 1999 SC 1571 ) and Shambhu Muarai Sinha and Project & Development India and Anr. (2000 (5) SCC 621 ). The High Court was of the view that the respondents had filed their withdrawal applications on 8.1.1999 and 26.2.1999 and had the benefit of interim directions to continue in service granted by the High Court on 30.7.1999 while they were to be relieved on 31.7.1999 and the result was that they were still in service on that date. The High Court further observed that these respondents had made the applications for withdrawal before the effective date i.e. 31.7.1999 and they having not accepted the monetary benefits under this VRS Scheme, could withdraw their applications opting for VRS. In this view, the writ petitions of these respondents were allowed.

Court's reasoning:
15. In the present case admittedly the cut off date fixed was 28.2.1998, which is not disputed. The contention was that since the employees continued to be in service till 31.7.1998, they were entitled to the retrial benefits and the benefits available under the VRS as on 31.7.1998, the date on which they were actually relieved. While discussing first point we have clarified the position in this regard. As per clause (e) of Annexure P-1 no separate notice was required to be issued in terms of service conditions mentioned in the offer of appointment/service rules/S.R.S. But once a cut off date was fixed for the purpose of calculating the benefits under the VRS and thereafter an employee is continued in service to satisfy clause (i) of Annexure P-1 and if that period happens to be three months or more, that itself shall be treated as notice period. In that case he shall not be entitled for notice period pay again as is clear from the Memo dated 1.10.1997 (Annexure P-3), on the ground that an employee having drawn full salary during the notice period although no separate notice was required to be given, would not be entitled for pay for the notice period. Even while dealing with the cases of VRS Phase I, the employees were given notice pay fort wo months 15 days and salary for 15 days. In those cases the Corporation had treated the cut off date as 31.10.1997 but the employees were actually relieved from service on 15.11.1997, as the funds were not made available immediately. It clearly shows that for the period for which the employees even under VRS first phase worked for 15 days after the cut off date were not given notice pay for full three months. In the present case the cut off date was 28.2.1998 but the respondents were actually relieved from service on 31.7.1998. Thus they worked for a period of five months after the cut off date for which they had drawn salary. Out of these five months three months would be adjusted towards notice pay as in the VRS Phase I only 15 days were adjusted as notice pay as those employees had worked only for 15 days beyond the cut off date. In the impugned judgment the Division Bench held that the Corporation could not discriminate between the employees of VRS Phase I and VRS Phase II. We fail to see how there was any discrimination. Unfortunately, the Division Bench of the High Court did not examine the issues that arose for consideration keeping in mind the relevant clauses, guidelines and specific terms containing in VRS including the amendment to the guidelines. Rights and benefits available to the employees under a particular VRS ought to be examined in the light of the specific terms and conditions governing them. Since this has not been done the Division Bench committed an error in recording its findings. On the other hand, there appears to have been consistency in the stand of the Corporation. Added to this the amendment as per Annexure P-3, reference to which has already been made above, justifies the stand of the appellants for the reasons that no separate notice was required to be given and if an employee had drawn the salary during the notice period, he would not be entitled to claim pay for notice period again. In this view we answer the point No.2 in the negative and against the respondents.16. In the light of what is stated above, we are of the view that the judgment and orders of the learned single Judge and of the Division Bench of the High Court cannot be sustained. Hence they are set aside and the appeal is allowed with no order as toAppeal Nos. 4067-4069 of 2001 and 2159-2160 ofIn view of our conclusions arrived at in Civil Appeal No. 5638 of 1999, these appeals also are entitled to succeed. We may also mention that the respondent in Civil Appeal No. 6047 of 2001 is governed by VRS Phase II and the respondents in Civil Appeal Nos. 4068-4069 of 2001 and 2159-2160 of 2001 are governed by VRS Phase III. It may be added that the terms and conditions, which are applicable to VRS Phase II are similar to VRS Phase III also, as the matters are identical. In this view these appeals are also allowed.Appeal Nos. 4658-4659 ofHence the High Court was not right in allowing the writ petitions holding that they applied for withdrawal before the effective date considering the date of relieving the employees as the effective date. In the light of the discussions made in Civil Appeal No. 5638 of 1999 the High Court, in our view, was wrong in treating 31.7.1999 as an effective date. The decisions relied on by the respondents before the High Court or in this Court on facts do not help them. Moreover, position is to be examined on the facts, terms of the VRS and circumstances governing a particular case of withdrawal offer made seeking voluntary retirement after its due acceptance.19. In view of this legal position, the impugned order cannot be sustained. We would have set aside the same but for the peculiar facts and circumstances of the case stated hereinafter. These respondents though sought for voluntary retirement under the Scheme could not be relieved even on 31.7.1999 alongwith large number of other employees because of the interim order passed by the High Court in the writ petitions filed by them. Consequently, they continued in service. Even in the SLPs filed by the Corporation, though leave was granted, interim order was specifically refused as is clear from the order dated 23.7.2001 passed by this Court in these appeals, which readsgranted. Tag with C.A. Nos. 4067-4069 of 2001. No stay.It appears to us that the respondents have continued in service; may be they have attained superannuation by now or they are likely to attain superannuation in near future; at any rate, they having been continued for all these years and taking note of the peculiar facts and circumstances of these cases, we do not think it is just and appropriate to disturb the impugned order under Article 136 of the Constitution of India in the light of what is stated