Case: N.P. Verma Vs. Union of India

In these writ peti tions, the petitioners are former officers and employees of the Caltex Oil Refining (India) Ltd., which has since been amalgamated with the Hindustan Petroleum Corporation Limited. The complaint of the petitioners is with regard to the inter se fitment of the officers and employees of the Caltex Oil Refining (India) Ltd. and the other two Companies which have also been amalgamated with Hindustan Petroleum Corporation Ltd., namely, ESSO Standard Refining Company of India Ltd. and Lube India1974, the Undertakings in India of ESSO Eastern Inc. that is, ESSO Standard Refining Company of India Ltd. (for short ESSO) and Lube India Ltd. (for short LIL) were acquired bythe ESSO (Acquisition of Undertakings in India) Act, 1974 and vested in Hindustan Petroleum Corporation Ltd. (for short HPCL), a Government Company. In 1977, the shares of Caltex Oil Refining (India) Ltd. and Undertakings in India of Caltex (India) Ltd. were acquired by the Caltex (Ac quisition of Shares of Caltex Oil Refining (India) Ltd. and the Undertakings in India of Caltex (India) Ltd. Act, 1977 and vested in Caltex Oil Refining (India) Ltd. (for short CORIL), a Government Company. On May 5, 1978, by the order of the C ompany Law Board, CORIL was amalgamated withan order dated June 17, 1978, the Central Government appointed a one-man Committee of Mr. B.B. Tandon, IAS (Retd.), for the purpose of examining the problems arising out the the integrati on of the management staff of CORIL and HPCL. The said Committee was to make recommendation inter alia on thefitment in equivalent Groups;(ii) criteria to be adopted for determination of seniori- ty and fixation of inter se seniority ; and(iii) placement in appropriateSeptember, 1970, the Tandon Committee submitted a report to the Central Government recommending that for equating positions in the two companies and fitting them in equivalent groups, the f ollowing two principles should be followed:1. The principle of functional similarity.2. The principle of co-equalshall have occasion to refer to the report of the Tandon Committee later in this judgment, for much relian ce has been placed by the petitioners on the report. While the report of the Tandon Committee was under the consideration of the Central Government, HPCL appointed two functional directors for the purpose of formulating a rationalisation scheme. In this connection, we may refer to a letter dated July 28, 1979 of the Central Government whereby it advised HPCL that the pay-scales and perquisites of management and employees in the nationalised oil companies should be ratio- nalised and fitted into the pay-scales of the Indian Oil Corporation, hereinafter referred to as IOC, a public sector Company. Further, it was stated in the said letter that the guiding principle to be adopted for the purpose was to find out the equivalence, that is to say, the equality of duty and also the equality ofJuly 7, 1980, a circular letter was issued by HPCLannexing thereto a rationalisation scheme consisting of two pans. In the first part, the past service benefits that would be admissible to each employee of CORIL on the basis of existing pay-scales and in the second pan, details were given of the rationalised conditions of service, payscales, perquisites and retirement benefits. In the circular it was stated as frelation to your fitment or fixation of salary in the proposed rationa- lised scales, should you have any grievance you will be at liberty to represent your case to a Grievance Committee, which has been specially constituted for the purpose.I am directed to request you to signify your acceptance of this offer within 30 days from the date of receipt of this letter by returning the duplicate copy of this letter duly signed by you. On receipt of your acceptance, consequent letters will bethe scheme the pay-scales of ESSO, LIL and CORIL sought to be equated with the pay-scales of HPCL are as follows:From ESSO To: HPCL HPCL Salary Group Salary Group Salary Scale RS. E-7, E-8 A 750-40-1150-50-1550 E-6 B 1050-50-1450-60-1750 367 E-5, E-5A C 1450-60-1690-65-1950 E-4 D 1600-65-2120 E - 3 E 1850-100-2350 E-2 F 2000-100-2500 O &E-1 &Unclassified G 2250-100-2750 General Manager H 2500-100-3000 From: LIL To: HPCL HPCL Salary Group Salary Group Salary Scale L-7 A 750-40-1150-50-1550 L-6 B 1050-50-1450-60-1750 L-5 C 1450-60-1690-65-1950 L-4 D 1600-65-2120 L -3 E 1850-100-2350 L -2 F 2000-100-2350 L- 1 G 2250-100-2750 General Manager H 2500-100-3000 From CORIL To: HPCL HPCL Salary Group Salary Group Salary Scale R-6 A, R-6 B A 759-4 0-1150-50-1550 R-7 A, R-7 B B 1050-50-1450-60-1750 R-8 C 1450-60-1690-65-1950 R-9 D 1600-65 -2 120 R- 10 E 1850-100-2350 R- 11 F 2000-100-2500 R- 12 G 2250-100-2750 General Manager Hfar as CORIL is concerned, it appears that it has 10 grades, while HPCL has 8 Grades. For, the purpose of equa- tion of these 10 grades of CORIL with 8 Grades of HPCL, some compression has been made in the lower Grades, namely, R6 A and R6 B have been clubbed together and equated with Grade A of HPCL. Again Grades R7 A and R7 B of CORIL have been clubbed together and equat ed with Grade B of HPCL. In ESSO, .the Grades E-7 and E-8 have been clubbed together and equated with Grade A of HPCL. In the Salary Group of ESSO, the Grades E-5 and E-SA have been shown to be two different Grades, but it is not disputed before u s that these two Grades are really onepetitioners approached the Grievance Committee, but the Grievance Committee did not consider the objections of the petitioners to the said scheme. In our opinion, there is much substance in the contention made on behalf of HPCL that it was not the business of the Grievance Committee to con- sider the propriety or otherwise of the rationalisation scheme, but if any officer has not been placed in the proper grade, the Grievance Committee may place such of ficer in the proper grade in accordance with the rationalisation scheme.

Court's reasoning:
Admittedly, no application was made to this Court by the officers of CORIL praying for stay of the rationalisation scheme within a period of three weeks. Relying on the said order of this Court and also on the fact that no application for stay was made to this Court within the period allowed, it is submitted on behalf of HPCL that the petitioners accepted the rationalisation scheme which is also evidenced by their written acceptance. If they had any objection to the scheme, they would have surely made a representation to this Court in the said Civil Appeal No. 3214 of 1979 which was thenthe writ petition, the petitioners have emphatically denied the allegation of HPCL that discussions were made with individuals and groups of Management Staff of CORIL with regard to the rationalisation scheme. As to the accept- ance of the rationalisation scheme, the case of the peti- tioners is that on July 12, 1980 a news item appeared in the Bombay edition of the Times of India to the effect that under the scheme of rationalisation, the services of nearly 950 officers of HPCL would be terminated, and that suchofficers would simultaneously be re appointed on the basis of public sector salary. In view of the said news, the peti- tioners filed an application in this Court in the said Civil Appeals praying for stay or suspension of the operation of the said offer letter dated July 7, 1980 and fo r restraining HPCL from terminating the services of the Management Staff of CORIL pending the disposal of the Civil Appeals. HPCL filed an affidavit in opposition to the said application of the petitioners to the effect that no decision had bee n taken by HPCL to terminate the services of the officers of CORIL. Accordingly, this Court disposed of the said applica- tion recording that in view of the said affidavit of HPCL, no order was needed to be passed. Further, the case of the petitioner s is that in spite of the said order of this Court, the petitioners still apprehended that HPCL would terminate the services of the petitioners in the event of their refusal to accept the said scheme and, as such, the petitioners under dur ess were forced to signify their con- sent to the saidhave considered the explanation of the petitioner justifying the acceptance of the said offer letter dated July 7, 1988 and the rationalisation scheme sent therewith and also the contention of HPCL in that regard. In our opinion, the apprehension of the petitioners that in the event of their refusal to accept the scheme, their services will be terminated cannot be rejected on the face of it. It may be that there was no reasonable basis for such apprehen- sion, but the plea that because of such apprehension the petitioners had no other alternative than to accept the scheme, cannot be disbelieved. At the same time, we do not also put any blame on HPCL fo r implementing the said scheme which was accepted by the petitioners and other officers of CORIL. Instead of disposing of these writ petitions on this technical grounds, we may proceed to consider the respective contentions of the parties onis the 372 positive case of the petitioners that no such equation has been made and the fitment of the officers of CORIL and those of ESSO/LIL in the IOC/HPCL scales of pay have been made without the equation of posts, which is a sine qua non for integration of officers coming from different sources. The petitioners have mainly relied upon the recommendation of the Tandon Committee that General Sales Representative of ESSO has been equated with the post of Retail Development Supervisor of CORIL. In the scheme prepared by HPCL, thepost of General Sales Representative of ESSO and that of Depot Superintendent have been placed in the Salary Group B of HPCL, while the post of Retail Development Supervisor and Depot Superintendent/Relief Depot Superintendent of CORIL have been placed in the Salary Grou p A ofthat as it may, in the view which we take, namely, that there has been no equation of posts, the rationalisa- tion scheme cannot be accepted in full. The prayer of the petitioners in the writ petition is for a declaration that the said scheme is violative of Articles 14 and 16 of the Constitution of India and for a writ, order or direction in the nature of mandamus directing HPCL to remove the discrim- ination aga inst the petitioners in regard to the impugned rationalisationthese eight years, by virtue of implementation of the scheme, many changes have taken place with regard to the positions and ranks of the officers of HPCL including the petitioners and to set aside the whole scheme at this stage would surely affect the service structure of HPCL. We are also not obliv- ious of the order of this Court dated July 20, 1984 record- ing the statement made in the affidavit of HPCL that if this Court would ultimately decide the matter in favour of the petitioners, HPCL would accord to them all the benefits which they would be en titled to. That is an undertaking given by HPCL, but we should also look to the interest of several officers of HPCL who would be affected, if the scheme is set aside.