Case: Tata Global Beverages Limited (Formerly Known As Tata Tea Limited) Vs. Tata Tea Employees Union A Trade Union &amp; Another

Following was the dispute referred to the Industrial Tribunal for adjudication.SCHEDULETo determine the propriety, validity and legality of the Companys circular dated 22nd May, 1974 intimating unilateral withdrawal of the Pension Scheme from 9th of May, 1974.The learned Industrial Tribunal rejected the Reference. In the writ petition, the learned Single Judge set aside the order passed by the Industrial Tribunal and held that the benefit which initially was extended unilaterally by the employer had metamorphosed into a privilege with the passage of time and the workers were entitled to receive pension as a matter of right. Aggrieved thereby, the employer has preferred the present appeal. For convenience, appellant is hereinafter referred to as Company and respondent No.1 as Union.2. The company had introduced a Pension Scheme for its clerical staff and had informed the employees about the said Scheme by a circular dated 2nd of March, 1948. The circular reads thus:TO ALL MEMBER OF THE INDIAN CLERICAL STAFF PENSIONThe Directors have agreed that, with effect from 1st January 1948 pensions on the following scale will be paid to employees retiring with the consent of the Company after 35 years service.50% of Salary drawn in last year of service less whatever sum the Companys contribution to the Provident Fund in respect of the employees and his share of the Capital Reserve Account will yield when invested at 4%For example:Assume 50% is Rs.100/and the Companys Contribution and share of Capital Reserve Account in Provident fund payable to retiring employee is Rs.The maximum pension payable will be Rs.100/ng interest of 4% p.a. on Rs.3000 or Rs.90/per month.For retirement with the consent of the company before 35 years service but not before 30 years service proportionate pension will be paid as follows:34 years47% of Salary less Provident Fund adjustmentas above.33 years31 yearsts under 30 years service to be considered on their merits and will receive the sympathetic consideration they have received in the past. The same applies to assistance to widows and dependents in the event of the premature decease of the employee. No fixed rules regarding these will be laid down.So long as a dearness allowance remains in force, a retiral dearness allowance equal to 50% of the minimum dearness allowance payable from time to time to employees will be paid to retiring employees eligible for pensions.It must be clearly understood that the above scheme is entirely discretionary on the part of the Directors and that they are at liberty to withdraw it any time and particularly if the legislature or any award made under legislation places the company in a position where the company is bound to pay any pension, gratuity or retiral or superannuation allowance.For Pro JAMES FINLAYles Forgan Worries.Bombay, 2nd March 19483. On 22nd of May, 1974, the company issued another circular informing thereby that the clerical staff shall not be entitled to pension since the Payment of Gratuity Act 1972 had come into force and withdrew the said Pension Scheme w.e.f. 9th of May, 1974. In the year 1983, an employee by name P.S.Manian, claimed the pension as per the Scheme introduced by the Company vide circular dated 2nd of March, 1948. After his request was rejected by the Company informing him that the said Pension Scheme was withdrawn by the Company after introduction of Payment of Gratuity Act, 1972, the Union raised a dispute about withdrawal of the said Pension Scheme and the Government, in exercise of the powers conferred byion (1) of Section 10 read with(5) of Section 12 of the Industrial Disputes Act, 1947 (hereinafter referred to as the ID Act) referred the said dispute for adjudication to the Industrial Tribunal.4. Before the Industrial Tribunal it was the stand of the Union that the Pension Scheme so volunteered by the Company vide circular dated 2nd of March, 1948, was in force for continuous period of more than 24 years and had thus become the condition of service which could not have been unilaterally withdrawn by the Company without giving notice of change as envisaged under Section 9A of the Industrial Dispute Act and on the ground that the Payment of Gratuity Act has come into force. As against it, it was the contention of the Company that the document of 2nd of March, 1948 was a settlement between the Company and the workmen containing a clause therein that the Pension Scheme so introduced was liable to be withdrawn at the total discretion of the Directors of the Company at any time and particularly if the Legislature or any award made under legislation places the Company in a position where the Company is bound to pay any pension, gratuity or retiral or superannuation allowance. According to the Company, on enactment of the Payment of Gratuity Act, 1972, since the gratuity thereunder was made compulsorily payable, there had remained no scope for any member of the clerical staff to opt for pension in lieu of gratuity and, as such, the company was constrained to withdraw the said Pension Scheme. It was also contended by the Company that since the Pension Scheme was withdrawn in accordance with the settlement, the Company was not required to issue notice of change under Section 9A of the ID Act before withdrawal of the said benefit. The dispute so referred was also resisted by the Company on the ground of delay.5. The learned Industrial Tribunal accepted the contentions raised on behalf of the Company and, resultantly, rejected the Reference. While rejecting the Reference, the Tribunal has recorded the following conclusions:(i) That the Dispute as raised by Second Party Union after 11 years seems to be not within reasonable time.(ii) That it was not necessary on the part of the Company to give notice of change under Section 9A of the Industrial Disputes Act before withdrawal of the Pension Scheme.The conclusion that notice under Section 9A was not required to be given by the Company is based on the following inferences drawn by the Tribunal.(a) That the withdrawal of the Pension Scheme is not covered under Schedule IV of the Industrial Disputes Act and more particularly is not covered under Entry No.2 and 8 of the said Schedule IV as was canvassed by the Union.(b) When there is no express provision and the benefits are extended, the said benefits can be termed as customary usage and the same cannot be withdrawn without giving notice under Section 9A of the ID Act; however, in the matter in hand, when the Pension Scheme was expressly provided vide the circular dated 2nd of March, 1948, wherein the provision of withdrawal of the said Scheme was also incorporated, the same cannot be held to be a customary usage, and as such, was liable to be withdrawn in terms of the said circular, without giving any notice under Section 9A of the ID Act.The learned Industrial Tribunal therefore, held that the Union had failed to justify its demand and also failed in proving that the circular dated 22nd of May, 1974, intimating unilateral withdrawal of the Pension Scheme from 9th of May, 1974 was improper, invalid and illegal. The Reference was, therefore, rejected by the Tribunal for the aforesaid reasons.6. In the Writ Petition filed by the Union, the learned Single Judge has set aside both the aforesaid findings recorded by the Tribunal; first, that there was inordinate delay in referring the dispute and other that the withdrawal of the Pension Scheme did not attract the provisions of Entry 2 or 8 of the 4th Schedule of the ID Act, thereby relieving the employer from compliance with the provisions envisaged under Section 9A of the ID Act. On the aspect of delay, the learned Single Judge has observed that there was no evidence on record to indicate that the Union or its members have, in fact, received the circular of 22nd of May, 1974. About the Pension Scheme, the learned Single Judge has observed that the unilateral grant of pension has fructified into a privilege over a period of 24 years which could not have been withdrawn without complying with the mandatory requirement of notice of change under Section 9A of the ID Act. The learned Single Judge has also observed that it was not open for the employer to contend that the workmen would be entitled to either gratuity or pension after the Payment of Gratuity Act has come into force and that the introduction of the Payment of Gratuity Act cannot in any manner fetter the right of the employees to receive pension under the Document of 1948.

Court's reasoning:
8. The observations made by the Tribunal reveal that it has held the document of 2nd March, 1948 to be a settlement relying upon the opening sentence used in the said Circular that The Directors have agreed, giving an interpretation to the same that there was a demand from the workmen for Pension Scheme and the same was agreed and accordingly, the Circular of 2nd March, 1948 was issued to that effect and benefits were extended, which the workers availed till its withdrawal i.e. upto May, 1974. Before the learned Single Judge similar submission was made that the words The Directors have agreed indicate that the Directors had agreed with the workers that from 1st January, 1948 pension would be payable to the retiring employees on certain terms and conditions. The learned Single Judge however, has rejected the contention so raised, observing that it would be a complete misreading of the document to interpret it to mean that the Directors had agreed with the Union, when there is no other corroborative evidence on record. It is further observed that there is no material on record to establish that the pensionary benefits payable under the said document were extended to the workers due to an agreement arrived at between the Union and the Directors of the company. It is further observed that the aforesaid words will have to be therefore, construed in the context that they appear, meaning thereby, that the Directors had agreed amongst themselves that pensionary benefits should be paid to the retiring employees. The learned Single Judge has therefore, held that the document of 1948, cannot be construed, as a settlement or as an agreement, but was a charter for payment of pension. The learned Single Judge has also observed that, had it been a bilateral document, there would be no room for such a clause in the said agreement, giving full discretion to the Directors to withdraw the said scheme. We do not see any infirmity in the finding recorded by the learned Single Judge.9. It was also sought to be canvassed by the learned Counsel for the company that the Bilgrami award had transformed the unilateral act of the company into an Award and when the company became statutorily liable to pay gratuity the company was entitled to withdraw the benefit of pension, without giving any notice of change in that regard in as much as the change was pursuant to anaforesaid observations were made by the learned Tribunal while dealing with demand No. 8(b), whereby it was demanded that an employee entitled to receive pension under the Companys Pension Scheme shall have the option to claim gratuity in lieu of pension. The demand was accepted by the Tribunal and the clerical staff entitled to pension on retirement was provided with an option to claim gratuity, in lieu of pension. It was contended by the learned Counsel for the company that the Pension Scheme introduced by the company vide circular dated 2nd March, 1948 was thus approved in the Bilgrami award as an Agreement between the company and its employees. The learned Counsel further contended that, the Bilgrami award has been referred in all subsequent settlements arrived at between the Company and its employees and in all those subsequent settlements, it has been clearly averred that the service conditions not expressly altered as laid down in the award of the Industrial Tribunal of Mr. Bilgrami dated 15th January, 1964, as amended by the Agreement dated 1st July, 1965, shall remain unaltered. According to the learned Counsel, the learned Industrial Tribunal was right in holding that the circular dated 2nd March 1948 had become an award or settlement and since the pension scheme was withdrawn by the Company, according to the agreed terms incorporated in the said circular, the company was not required to give notice under Section 9A of the Industrial Disputes Act.10. We are, however, unable to agree with the preposition so canvassed. Similar such argument was advanced before the learned Single Judge on behalf of the Company that, the proviso to Section 9A must be interpreted purposively and the word agreement should be read into the said proviso. It was further sought to be canvassed that as observed in the Bilgrami award the document of 1948 was bilateral document giving the Company the right to withdraw the benefit unilaterally and any bilateral document would attract the proviso of Section 9A. The learned Single Judge, however, rejected the said contention stating that, the Industrial Disputes Act recognizes only the term settlement which is defined in Section 2(p) of the Act. The learned Single Judge has further observed that the term Agreement which has not been defined cannot be read into the proviso to Section 9A, as the term Settlement has a different connotation under the Industrial Disputes Act. The learned Single Judge has further observed that, every agreement between the parties need not be a settlement. The legislature has therefore with some purpose excluded the word agreement from the proviso. The learned Single Judge has also said that to read into the proviso the word agreement would be doing violence to the proviso. The learned Single Judge has further in clear terms held that, the document of 1948 is neither a settlement nor an agreement, but is a charter of the Company, unilaterally extending the pensionary benefits to the workmen. We fully subscribe the observations made and the conclusions recorded by the learned Singlethe ratio laid down in the said judgment cannot be made applicable to the facts of the present case. In the said case, two workmen of the Tamilnadu Electricity Board were permitted to do trade union work on a full time basis and the said permission was subsequently withdrawn. A dispute was therefore raised claiming that, it was a privilege within the meaning of item 8 of Schedule 4 of the Industrial Disputes Act and could not have been withdrawn without following the procedure under Section 9A of the Act. Concession so granted in the said case cannot be in any way equated or compared with the Pension Scheme voluntarily introduced by the Company, which remained in force for long 24 years. As has been observed by the Madras High Court, the concession granted for a limited period and extended periodically cannot be claimed as of right. In the instant case, the well prepared Pension Scheme was offered to the employees and the same remained in force over the period of 24 years. The learned Single Judge, therefore held that the unilateral grant of pension had fructified into a privilege which could not have been withdrawn by the stroke of pen without following the mandatory requirement of notice of change under Section 9A.In our opinion, the aforesaid judgment does not have any application to the facts of the present case. Though it is true that the document of 1948 contains a clause permitting the withdrawal of the said benefit by the Directors of the company, at their discretion or on a contingency as mentioned therein, it is difficult to accept that the aforesaid clause was acquiesced by the union or workers. From the material on record, it is quite clear that there was no occasion in past for the Union to make any grievance in respect of the aforesaid provision. However, after the said clause was acted upon by the Company, the Union raised its objection. As against it, the benefit extended vide the said document was enjoyed by the employees over the period of 24 years and that was the reason that the learned Single Judge held that it had acquired the status of privilege enjoyed by the employees and consequently become the condition of service. We upheld the conclusion arrived at by the learned Single Judge.The fact apart that we have certain reservations as regards to the view taken by the Madras High Court, the endevour of the company to take support of the aforesaid judgment so as to hold its action of withdrawing Pension Scheme legal and valid must fail only on the count that in the said case the medical benefits scheme was not unilaterally withdrawn or it was not an unilateral change in conditions of service. The employer had issued notices consequent to the amendment of ESI notification before withdrawing the said scheme. Whereas in the instant matter the company without giving notice of change as envisaged under Section 9A of the I.D. Act, unilaterally withdrew the Pension Scheme. In the circumstances, the contention of the company that there was no illegality in its action has to be rejected.17. It was also sought to be canvassed by the learned counsel appearing for the company that the learned Single Judge assigned to itself the role of an Appellate Court and stepped into reappreciating and evaluating the evidence and substituted his own findings in place of those arrived at by the Industrial Tribunal. According to the learned counsel such course was not permissible in exercise of certiorari jurisdiction by the High Court. To buttress the said contention the learned counsel has relied upon the judgment of the Honble Supreme Court in case of Surya Deo Rai V/s Ram Chander Rai and ors., (2003)6 Supreme Court Cases 675 .18. We are however, not at all impressed with the submissions so made. The parameters for exercise of jurisdiction under Article 226 or 227 of the Constitution cannot be tied down in a straight jacket formula or rigid rules. The High Court may in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice, should occasion, can exercise its jurisdiction. In the instant case, it does not appear to us that the learned Single Judge has committed any error in exercising its jurisdiction to set aside the award passed by the Industrial Tribunal.19. In view of the foregoing discussion, we are of the clear opinion that the learned Single Judge has correctly held that the document of 1948 was neither a settlement nor an agreement. We also concur with the finding recorded by the learned Single Judge that the document of 1948, which originally was a voluntary benefit granted to the workers by the company had crystalized into privilege with the passage of time and the clause for withdrawal therein can not operate to the disadvantage of the workers, when the said benefit has become a privilege over the years. Apart from the justness in the action of the company to withdraw the Pension Scheme on the ground that payment of gratuity is made compulsorily payable, withdrawal of such privilege without a notice of change, in no case was permissible.20. In the Reference the Industrial Tribunal was to determine the `propriety, `validity and `legality of the companys circular dated 22nd May, 1974, whereby the company withdrew the Pension Scheme. In the award passed by the Tribunal it has not at all dealt with the aspect of propriety. The learned Single Judge, no doubt has held that, it was not open for the employer to contend that the workman would be entitled to only one benefit; either of gratuity or of pension on the ground that Payment of Gratuity has come into force. However, this issue has not been elaborated as it ought to have been. According to us, prime importance must have been given by the Tribunal to determine the Propriety of the circular dated 22nd May, 1974. However, it appears that legality and validity issues were focused more and propriety aspect lost sight of. The word Propriety is nowhere defined. It is capable of variety of meanings. In the context of the present matter the word `propriety would mean `Justness. The circular dated 22nd May, 1974 is to be thus tested on the anvil of justness and it has to be determined whether the action of the company to unilaterally withdraw the Pension Scheme, which was in existence for more than 24 years, can be held to be just on the ground that the payment of Gratuity Act had come intothe said matter also there was a private treaty between the parties i.e. employer and employee whereby the employees had agreed to deductions before coming into force of the beneficial enactment of Provident Fund and Gratuity. The Honble Apex Court in this context held that, even if it is assumed that by private treaty the parties have otherwise agreed to deductions before coming into force of these beneficial enactments they cannot now beTribunal held that, the Company could not have discontinued the existing pensionary benefits on the ground that payment of gratuity has been made compulsory by the Central Act. The Company challenged the award of the Central Tribunal before the Calcutta High Court. It was argued before the High Court on behalf of the Company that, under the settlement, payment of gratuity was alternative of pension. In other words, if an employee opted for pension, he was not entitled to gratuity. As gratuity was made compulsorily payable under the Central Act, according to the Company, it was justified in discontinuing the scheme for pension. The learned Single Judge of the High Court took a view that, on the basis of settlement, gratuity, although payable in a limited number of cases was clearly an alternative to pension. The learned Single Judge of the High Court, therefore, set aside the award of the Central Tribunal. The appeal was filed against the judgment of the learned Single Judge, which came to be allowed by the Division Bench. While allowing the appeal, the Division Bench has held that the employees of the respondent Company were entitled to the benefit of pension in accordance with the scheme for pension, besides the payment of gratuity which is compulsorily payable by virtue of Section 4 of the Payment of Gratuity Act, 1972. In the said case, it was argued on behalf of the employees that, as the employees were entitled to the benefit of the pension under the terms of settlement, the respondent Company cannot deprive them of the said benefit simply because the payment of gratuity has been made compulsory by Section 4 of the Central Act. Accepting the said argument it is observed by the Division Bench that, there is no provision in the payment of Gratuity Act divesting the employees of their vested right to get pension in terms of the agreement arrived at between the respondent Company and its employees. The Division Bench has further observed that, had it been the intention of the legislature to deprive the employees of the existing benefits of retirement, it would have made an express provision in that regard, at least, by necessary implication such intention could be gathered. It is further observed that, in a beneficial legislation, deprivation of an existing benefit cannot be inferred without a provision to that effect, either express or implied. The Division Bench has recorded a clear finding that, the employees of the respondent Company were entitled to the benefit of the pension in accordance with the scheme for pension, besides the payment of gratuity which is compulsorily payable by virtue of Section 4 of the Central Act.In view of the law laid down as above, the withdrawal of Pension Scheme by the company on the ground that the payment of gratuity is made compulsory after coming into force of the payment of Gratuity Act, in no case can be held to be just. Moreover, as has been observed by the learned Single Judge only those employees of the company, who were working in Mumbai were not being paid both the benefits, whereas the workmen in Calcutta were being paid gratuity, as per Gratuity Act and Pension under the 1948 document. The benefit of gratuity, which is payable statutorily does not substitute the benefits payable, as condition of service. In the circumstances, it has to be held that the act of the company of withdrawing the Pension Scheme after coming into force of the Payment of Gratuity Act wasto the Industrial Tribunal, the dispute raised by the Union after 11 years cannot be said to be within the reasonable time. Relying on the judgment in the case of Nedungadi Bank Limited Vs. K.P.Madhavantutty and ors., (2002) Supreme Court Cases 455 and the other in the case of Haryana StateLand Development Bank vs. Neelam, 2005 II CLR 45, it was vehemently argued by the learned Counsel for the company that the Industrial Tribunal was right in rejecting the Reference, holding the same to be not filed within the reasonable time. It was also argued that not raising of any dispute by the Union for the period of 10 years, though there was a cause of action for raising such dispute would lead to an inference that Union had accepted the decision of the company and it shall be held that the Union has acquiesced to the withdrawal of the Pension Scheme by its conduct of remaining silent on the issue for the period of 10 years.29. Our attention was invited by the learned counsel for the company to some of the observations made by the learned Single Judge in paragraph No.26 of the impugned order, to the effect that in thethe witness examined by the Union had stated that four employees from the Bombay office had received pensionary benefits upto 26th May, 1984. The learned Counsel took us through the evidence of the witnesses examined by the Union to show that none of the witnesses has stated any such fact. The learned counsel submitted that the finding recorded by the learned Single Judge on the basis of non existing evidence is unsustainable. The learned Counsel asserted that the Reference was liable to be rejected on the ground of limitation also.30. It is true that though the Pension Scheme was withdrawn by the company by a circular dated 22nd May, 1974, the dispute in that regard was raised in the year 1983. It is also true that in the period between 1974 to 1983 four employees got retired and none of them or the Union raised any dispute, though the benefit of pension was not extended to the said employees. Ostensibly, it may, therefore, appear that the dispute was raised after about 9 years which certainly cannot be said to be within reasonable time. However, it was rightly pointed out by the learned Counsel for the Union that though the circular, whereby the Pension Scheme was withdrawn, was issued on 22nd May, 1974, the first retirement thereafter took place in the year 1980, when an employee by name Shri J.R.Redkar got retired. The other three employees got retired thereafter in the year 1981 and in 1982. Thereafter, one Shri P.S.Manian was issued with the notice dated 29th February, 1983 informing him that he will be retiring on attaining the age of superannuation with effect from 29th February 1984. When the request of Shri P.S.Manian to process his case for pension was refused, the Union immediately raised the dispute. It, therefore, cannot be said that there was delay in raising the dispute by the Union. Even if it is assumed that the cause of action had arisen in 1980 when first retirement took place after issuance of the notice of 1974 and Pension Scheme was not made applicable to the retiring employee viz. Shri Redkar, the delay caused, at the most was of three years, which cannot be held to be inordinate or unreasonable and the dispute so raised cannot be held to be a stale or belated claim.We reiterate that the dispute raised by the union against withdrawal of the pension scheme cannot be said to have raised belatedly. The learned Industrial Tribunal was wrong in holding that the union did not raise the dispute within reasonable time. Though some of the observations made by the learned Single Judge are factually incorrect, we affirm the conclusion recorded by the learned Single Judge that the dispute so raised was not liable to be rejected on the point of limitation.