WP/10180/2005 of G. Krishna, Vs M/s. Sri Vijayarama Gajapathi Co-operative Sugars Limited, on 28 December 2007

ORDER:

This Writ Petition is filed seeking a Mandamus declaring theletter (notice) No.VRS/2004-2005, dated 1-3-2005 and theconsequential acceptance letter vide Rc.No.Nil/VS/Estt/2005/VRS,dated 21-4-2005 issued by the 1[st] respondent as arbitrary, illegal andwithout jurisdiction and consequently to direct the 1[st] respondent tocontinue the petitioners in service till they attain the age ofsuperannuation and grant all consequential benefits.

According to the petitioners, they joined the service of the 1[st]respondent-sugar factory in the years 1976 and 1977. Subsequently,their services were regularized as per their eligibility during the year1982. Recently, the Central Committee of National Federation ofCooperative Sugar Factory (NFCSF) inspected the 1[st] respondent-factory and recommended for restructuring of the staffing pattern. Onthe recommendations of the committee, 4[th] respondent issuedG.O.Ms.No.263, dated 5-11-2004 for constitution of a committee foreach cooperative sugar factory for restructuring and down sizing theemployees/work force. As per the said G.O., a committee wasconstituted consisting of 2[nd] respondent as Chairman, DistrictCooperative Officer, Vizianagaram as member and the 1[st] respondentas member-convener. The committee is supposed to hold detaileddiscussions with the trade union representatives of workers and consultants/advisors and reduce the employees/work force as perneed and recommendations given by the central committee of NFCSFand those who are found surplus according to the report, shall bedischarged through Voluntary Retirement Scheme (VRS). Animpression was created in the minds of the employees by respondents1 and 2 that aged persons, irregular employees and sick persons, whoare interested to go on VRS i.e. 141 employees, out of which 64regular and 77 seasonal, were likely to be declared as surplus and 1[st]respondent would take necessary steps as per the terms ofG.O.Ms.No.16, dated 23-3-2001. But, surprisingly, 1[st] respondentwithout waiting till the committee’s declaration as to surplusemployees issued notice Rc.No.VRS/2004-05, dated 1-3-2005 statingthat as prescribed in G.O.Ms.No.263, dated 5-11-2004 forimplementation of VRS in the factory in consultation with all tradeunion office bearers only, acceptance time was fixed as 15-3-2005 (5p.m.). Further, it was stated that the VRS applications were availablewith the time-keeper. All the workmen, who are regular and seasonal,were asked to fill up applications and hand them over to the time-keeper on or before 5.00 p.m. on 15-3-2005. But, if anybody does notopt for VRS, he will be removed from service as per law. In pursuanceof the said notice, it appears, petitioners filed applications on 20-3-2005 seeking voluntary retirement and the same were accepted on 1-4-2005 and communicated to them on 27-4-2005 while they werecontemplating to withdraw the same. In fact, petitioners filed letters on28-4-2005 seeking to withdraw the applications made on 20-3-2005. Without considering the same, on 30-4-2005, they were relieved of theduties. According to the petitioners, they had submitted applicationsfor VRS since it was stated that those who do not opt for VRS wouldbe removed from service. They have withdrawn the VRS applications

before they could be given effect to from 30-4-2005. Therefore, theychallenged the very notice of offer under the scheme dated 1-3-2005. Neither it is the intention of the committee that all the employees wouldbe retired from service or all of them are sick and aged and, therefore,their withdrawal letters would be accepted and as such, the very noticedated 1-3-2005 and the consequential letters of acceptance ofresignation on 21-4-2005 are liable to be declared as arbitrary, illegaland without jurisdiction. Even otherwise, the withdrawal letters werefiled before the VRS was given effect to and as such, it must bedeemed that the acceptance of voluntary retirement applications wasillegal.

A detailed counter affidavit has been filed on behalf of the 1[st]respondent denying the allegations made by the petitioner. It isasserted that the principle laid down by the Supreme Court in the caseof resignation, has no application to the cases of retrenchment ofpersonnel under VRS. Further, the allegation that the petitioners wererelived forcibly under the scheme and that options were obtained byplaying fraud is totally baseless and devoid of any truth. The factorywas running under heavy losses and was unable to meet even theelectricity charges and telephone bills. In fact, the factory was totallyclosed during the seasons 2003 and 2004. In order to revivecooperative sugar factories, Government of Andhra Pradeshconstituted a committee with technical advisors, which had submitted areport with certain remedial measures to revive the unit. In the report, itwas pointed out that the sickness of the factory was due to certainfactors including abnormally high incidence of wages due to heavystaffing pattern and, therefore, suggested to prune staffing pattern to itsoptimum level by implementing voluntary retirement/compulsoryretirement schemes for which the State Government would provide financial assistance. To achieve higher growth of production, certainminimum measures were suggested. One of the measures is toreduce the permanent employees to 144 as against the existingstrength of 208, seasonal employees to 177 as against 255 and furtherdirected to avoid NMRs totally. The committee also prescribed thestaffing pattern. As per the guidelines and scheme evolved by theGovernment and after deliberations with the unions, a procedure wasadopted and a decision was taken by the committee in consultationwith the union to implement the VRS. All the employees were directedto exercise options and as per the guidelines, steps were taken toretire employees under the scheme, as per the present staffing patternas suggested in the report submitted by the Technical Advisors. Theposts held by the petitioners were directed to be abolished in order toretain the minimum strength. The applications of all the employeeswere screened by the committee taking into consideration theperformance, ability etc., and accordingly, petitioners and others,totaling to 175, were retired from service. Except petitioners, all othersaccepted and left the service with Golden Shake Hand. Petitionershave to be blamed for themselves for not receiving the benefit offeredunder the scheme. As per the guidelines issued by the Governmentfor implementation of the scheme in Paragraph 8(vii) ofG.O.Ms.No.16, dated 20-3-2001, it is stipulated that once options forVRS are accepted, the related posts should be simultaneouslyabolished and not held in abeyance. In fact, the posts held by thepetitioners were declared as surplus and were simultaneouslyabolished, after accepting VRS applications submitted by them. Therefore, the question of reconsideration of their claim forreinstatement does not arise. There is no necessity for the factory torevive the said posts. The allegation that the 1[st] respondent is taking

Arguments

service of some employees from other factories/sources is absolutelyincorrect. The Government vide Proceedings Rc.No.6981/05/G1,dated 15-7-2005 permitted the factory to take services of certaintechnical personnel as directed in the order to complete theoverhauling works by constituting a committee with the Head ofDepartments of the Society under the Chairmanship of Person-Incharge purely on contract basis and on consolidated salary for thecrushing season 2005-2006. Under the said proceedings, 11 postswere identified. The Commissioner of Cane and Director of Sugars inhis letter dated 4-11-2006 informed that the Finance Department haddesired to indicate clearly the posts required to be filled on contractbasis. The committee had identified surplus staff in accordance withthe guidelines prescribed in the G.O., i.e., sincerity, skill and abilitywith the assistance of departmental heads and thereafter, optionsexercised by the employees were accepted. Absolutely, the procedurefollowed for finalization of VRS under the guidance of the Chairmanhas got appreciation by one and all. By the time they have submittedtheir letters withdrawing resignations, resignations were alreadyaccepted. In any event, the committee has a right to considerindividual cases, independent with that of options exercised by theindividuals. Petitioners’ cases were considered on merits and theywere relieved from service under the scheme. Therefore, the order ofretirement does not call for interference.

Respondents 3 and 4 filed a separate counter alleging that thecommittee has directed all the employees to exercise options for VRSto facilitate it to finalize the same. After due consideration of theoptions exercised by the employees, the cases of 175 employees wereaccepted on 24-4-2005 and they were relieved on 30-4-2005. Accordingly, the Managing Director of the 1[st] respondent-sugar factory forwarded the VRS claims of the 175 employees for necessarysanction. After due verification of the proposals, Government, videG.O.Ms.No.7, Public Enterprises Department, dated 24-6-2005, havesanctioned and released an amount of Rs.3,46,91,180/- to the Societyfor settlement of VRS benefits to its 175 employees. Further, thecontention of the petitioners that the rule of reservation was notfollowed is not correct, since the Society called for applications fromthe employees, who were willing to go on VRS and accepted theoptions exercised and relieved them after cut-off date i.e. 30-4-2005. Itis the discretion of the Society either to accept or reject the optionsexercised by the employees/workers. Therefore, petitioners have notmade out any case seeking for interference of this Court.

Learned counsel for the petitioners strenuously contended that itis not a voluntary retirement scheme, but it is a compulsory retirementscheme introduced by the respondents and there was no option for thepetitioner, but to submit applications seeking voluntary retirement. Though the petitioners opted to retire voluntarily as per thescheme dated 1-3-2005, on 20-3-2005, which was accepted on21-4-2005, since petitioners have submitted withdrawal letters on 28-4-2005, it must be deemed that there was no application submitted bythem seeking voluntary retirement. Therefore, relieving the petitionerson 30-4-2005 is arbitrary and illegal. In support of his contentions,learned counsel relied upon the decisions in POWER FINANCECORPORATION LTD. v. PRAMOD KUMAR BHATIA[[1]],J.N.SRIVASTAVA v. UNION OF INDIA[[2]],SAMBHU MURARI SINHA v.PROJECT & DEVELOPMENT INDIA & ANOTHER[[3]],SAMBHUMURARI SINHA v. PROJECT & DEVELOPMENT INDIA[[4]],BANKOF INDIA v. O.P. SWARNAKAR[[5]],PUNJAB NATIONAL BANK v.

VIRENDER KUMAR GOEL[[6]],SRIKANTHA S.M. v. BHARATHEARTH MOVERS LTD.[[7]]

VIRENDER KUMAR GOEL[[6]],SRIKANTHA S.M. v. BHARATHEARTH MOVERS LTD.[[7]]

Whereas, Sri P.R. Prasad, learned counsel appearing for the 1[st]respondent submitted that in view of the financial doldrums of therespondent-factory and on recommendations of the committee set-upby the Government, the entire situation was reviewed and for thepurpose of revival of the unit the committee, after consultation with theoffice bearers of trade unions, has evolved a scheme and as per thescheme, willingness was called for and the petitioners offered theirwillingness and, therefore, their applications were accepted. Further,the acceptance letters dated 21-4-2005 were communicated to thepetitioners on 27-4-2005 and on 28-4-2005 petitioners have filedwithdrawal letters. In fact, they were relieved on 30-4-2005. Therefore, the contention of the petitioners that before the voluntaryretirement applications could be given effect to, though they areaccepted, petitioners have withdrawn the applications and as such, theacceptance letters dated 21-4-2005 are no more in existence cannotbe countenanced. The Writ Petition is devoid of merits and is liable tobe dismissed.

I have given my earnest considerations to the respectivesubmissions made by the learned counsel on either side and perusedthe impugned Proceedings and other material made available onrecord.

At the outset, it may be necessary to notice that during the courseof arguments, it is submitted by the learned counsel on either side thatout of 9 petitioners, petitioners 3 and 6 had withdrawn the Writ Petition;therefore, the same stood dismissed as against them. Insofar aspetitioners 7,8 and 9 are concerned, their posts were altogetherabolished before the VRS was introduced and thus, now we are concerned with petitioners 1,2,4 and 5.

The facts, as noticed above, would indicate that on 1-3-2005, anoffer was made by the 1[st] respondent-sugar factory invitingapplications for voluntary retirement. Petitioners submitted theirapplications on 20-3-2005 willing to retire under the scheme. Their applications were accepted on 21-4-2005 and the same wascommunicated to them on 27-4-2005. Immediately thereafter on28-4-2005, petitioners filed applications seeking to withdraw theapplications filed by them expressing willingness to avail VRS on 20-3-2005. They had withdrawn their applications only on 28-4-2005 i.e.after acceptance of their resignations. Therefore, petitioners wererelieved from service on 30-4-2005 as per the acceptance letters dated21-4-2005. It also appears that certain posts were abolished and thestrength was to be reduced in the interest of the factory. Afterconsulting the trade unions and the other concerned, decision wastaken to take voluntary retirement letter from each and every employeeand to accept them only on the basis of merit seniority, sicknessposition etc., of each individual. Therefore, the contention of thepetitioners that they were forced to file applications to go on VRScannot be said to be true and correct. Only to enable the managementto have persons with some production ability had evolved a scheme,after consulting the unions, seeking voluntary retirement applicationsfrom each and every employee. Even otherwise, it appears, the postsheld by the petitioners had fallen in the abolished scheme whilerestructuring the staffing pattern of the factory. As such, it cannot besaid that the scheme evolved is arbitrary and capricious. Further, asstated above, applications filed by the petitioners on 20-3-2005 wereaccepted on 21-4-2005 and they were served on the petitioners on 27-4-2005. Thereafter, the withdrawal letters were filed on 28-4-2005.

Conclusion

However, petitioners were relieved from their duties on 30-4-2005. Assuch, it must be deemed that the resignations of the petitioners wereaccepted in consonance with the guidelines evolved by theGovernment under its G.O. as per the recommendations of thecommittee. In the peculiar facts and circumstances of the case, it mustbe deemed that the resignations, which were accepted, were final andthey cannot be withdrawn. In this case, even otherwise, theapplications for voluntary retirement were accepted on 21-4-2005 andthe same was communicated to the petitioners on 27-4-2005;therefore, the question of withdrawing such an option exercised by thepetitioners on 20-3-2005 on 28-4-2005 does not arise. Further,petitioners stood relieved from duty with effect from 30-4-2005. In all175 employees were relieved under VRS except the petitioners. Infact, after identifying surplus posts only, the VRS was offered to thepetitioners.

In PRAMOD KUMAR BHATIA’s case (1 supra), it was held bythe Apex Court that unless the employee is relieved of the duty, afteracceptance of the offer of voluntary retirement or resignation, juralrelationship of the employee and the employer does not come to anend. To the same effect is the judgment in SHAMBHU MURARISINHA’s case (3 supra).

In J.N. SRIVASTAVA’s case (2 supra), it was held by theSupreme Court that even if the voluntary retirement notice is moved byan employee and gets accepted by the authority within the time fixed,before the date of retirement is reached, the employee has locuspoenitentiae to withdraw the proposal for voluntary retirement.

In SAMBHU MURARI SINHA’s case (4 supra), relevant schemedid not stipulate that an employee opting for voluntary retirement wouldbe disentitled to withdraw from voluntary retirement. Under suchcircumstances, the apex Court, following the cases referred to above, held that even after the acceptance of application for voluntaryretirement, but before the date of actual release from service, theemployee did have locus poenitentiae to withdraw his proposal forvoluntary retirement.

In O.P. SWARNAKAR’s case (5 supra), after surveying theentire case law regarding ‘voluntary retirement scheme’ observed thatthe Scheme is contractual in nature and, therefore, the right derived bythe employees concerned, could be waived. The employeesconcerned having accepted a part of the benefit could not be permittedto approbate and reprobate nor can they be permitted to resile fromtheir earlier stand.

In VIRENDER KUMAR GOEL’s case (6 supra), it was held by the Supreme Court as under:

“16. We make it clear that the sentence, "accepted a part ofbenefit under the Scheme" appeared in our direction as noticedabove, would include the withdrawal of the benefit and utilisationthereof. By no stretch of imagination, unilateral deposit of a part ofbenefit under the Scheme into the Bank account, that too afterwithdrawal of the application, would construe as to have accepted thepart of the benefit under the scheme, when the same was neitherwithdrawn nor utilised by the employee concerned.

17. In view of the discussion aforesaid. I.A. Nos. 1, 2 and 3are allowed. The applicants shall be reinstated into their posts withcontinuity in service, back wages and all consequential benefits asare entitled to them under the Law. They shall, however, refund theentire amount deposited into their Bank accounts with interestaccrued, if any, to the Bank. Full refund of the amount by theapplicants would be the condition precedent for reinstatement. Mr.Mukul Rohtagi learned ASG submits that applying the principle of 'NoWork No Pay', back wages should not be allowed to them on theirreinstatement. We are unable to accept this contention. Theapplicants were out of their jobs for no fault of theirs. Even otherwise,party in breach of contract can hardly seek for any equitable relief.”

I n SRIKANTHA’s case (7 supra), it was observed by the Supreme Court as under:

Arguments

I n SRIKANTHA’s case (7 supra), it was observed by the Supreme Court as under:

“26.On the basis of the above decisions, in our opinion, thelearned counsel for the appellant is right in contending that though the respondent-company had accepted the resignation of the appellanton January 4,1993 and was ordered to be relieved on that day, by asubsequent letter, he was granted casual leave from January 4,1993to January 13,1993. Moreover, he was informed that he would berelieved after office hours on January,1993. The vinculum juristherefore, in our considered opinion, continued and the relationship ofemployer and employee did not come to an end on January 4,1993. The relieving order and payment of salary also make it abundantlyclear that he was continued in service of the Company upto January15,1993.”

Learned counsel for the 1[st] respondent relied upon the decisionin N.RAMANATHAv. STATE OF KERALA[[8]]wherein it was held bythe Supreme Court that the power to create, continue and abolish anycivil post is inherent in every sovereign Government. It is a policydecision exercised by the executive and is dependent on exigencies ofcircumstances and administrative necessity. The abolition of post mayhave the consequence of termination of service; but such terminationis not dismissal or removal within the meaning of Article 311. Further,the exigencies of administration may require alterations in theestablishment and creation of a new department. This is agovernmental function and a policy decision.

Learned counsel for the 1[st] respondent further relied upon adecision of the Apex Court in NOTIFIED AREA COUNCIL, PIPILI v.

GAHAR MOHAMMAD[[9]]wherein it was held that continuance orabolition of posts is within the power of an employer and decision inthat regard cannot be interfered with by the courts unless it is arbitraryo r mala fide. Learned counsel also relied upon the decision inMOHD.ANWAR ALI v. A.P. COOPERATIVE OIL SEEDS GROWERSFEDERATION LTD.[[10]]wherein it was held that it is well settled lawthat a Government servant, on abolition of the post, is required to beeither dismissed from service due to non-availability of post or may be dealt with according to the policy. In the said case, on a detailed studyby the expert committee, it was determined that certain posts are notrequired and, therefore, the said posts were abolished pursuant to thepolicy decision to implement the Voluntary Retirement Scheme formaking the business of the organization viable. Under thosecircumstances, it was held that the policy decision cannot be said to beeither illegal or unsustainable. This case is cited to show thatvoluntary retirement scheme can be introduced after abolition ofcertain posts.

Learned counsel for the 1[st] respondent also placed reliance onthe judgment in S. CHALAPATHI v. VICE CHAIRMAN-CUM-MANAGING DIRECTOR, APSIDCL[[11]]whereinthe petitioner gavean option for voluntary retirement. Subsequently he withdrew thesame. But, by that time, the option was accepted and communicatedto the petitioner. Therefore, it was held that the petitioner thereincannot claim withdrawal of his earlier offer and the acceptance of offeris not liable to be questioned on the ground that the funds were notreleased to be paid to the petitioner as per the scheme. Further, in RAJENDRA v. STATE OF RAJASTHAN[[12]]a claim was made bythe employees working under certain schemes founded by the StateGovernment and the posts were created for fulfilling needs of aparticular project. Thereafter, the posts were abolished for want offunds. It was held that the decision to abolish the posts was taken,based on administrative and financial consideration and as such, theemployer cannot be directed to continue the displaced persons.

From the above decisions, it is clear that the employer has got aright to take a decision for restructuring the staffing pattern/reducing thestrength of the staff in view of economic constraints and keeping in

view, the viability of the organization. In this case, admittedly, acommittee was constituted with the technical advisors. The committeesubmitted a report with certain remedial measures to revive the unit. One such remedial measure was restructuring of the staffingpattern/introduction of Voluntary Retirement Scheme whilerecommending for abolition of certain posts. Thus, the posts held bythe petitioners were directed to be abolished in order to retain theminimum strength. The applications of all the employees werescreened taking into consideration the performance, ability etc., by thecommittee and accordingly, petitioners and others totaling to 175 wereretired from service. Thus, it is clear that the petitioners opted to retireunder voluntary retirement scheme.

Then, the question remains as to whether the petitioners havingopted to retire voluntary, could have withdrawn their options andwhether, in the facts and circumstances of the case, they are entitledfor reinstatement into service. The fact that the posts held by thepetitioners were abolished is not in dispute. It is also not in disputethat before taking such a decision, various factors were considered bythe committee, which recommended for restructuring of the staffingpattern in consultation with the employees’ unions of the organization. Further, in the very scheme it was made clear that once the requestunder VRS has been accepted by the organization and communicatedto the employees in writing, it shall not be open to the employees towithdraw the request. Even otherwise, since the posts held by thepetitioners were abolished, the question of withdrawing the optionsexercised by them does not arise. Instead of dispensing with theservices of the petitioners by way of termination etc., the organizationhas introduced VRS, which is more beneficial than that of terminationetc. Further, pursuant to the Voluntary Retirement Scheme dated 1-3- 2005, the petitioners gave their option on 20-3-2005. The optionswere accepted on 21-4-2005 and they were served on the petitionerson 27-4-2005. On the next day i.e. on 28-4-2005, petitionersfiled letters seeking withdrawal of the options exercised under theVRS. Pursuant to the options exercised on 20-3-2005,petitioners were relieved on 30-4-2005. Even if the acceptance letterswere not communicated to the petitioners, that itself does not vitiate theVoluntary Retirement Scheme and permit the petitioners to join dutyagain. In the peculiar facts and circumstances of this case, thequestion of permitting the petitioners to withdraw the options exercisedby them does not arise. Further, clause (4) of the guidelines framedunder G.O.Ms.No.16, dated 22-3-2001 regarding Voluntary RetirementScheme reads as under:

“4. ELIGIBILITY

An employee, who has been identified by themanagement to be brought under the VRS can opt for thescheme within the prescribed time. If any employee, who hasbeen identified by the management to be brought under VRSdoes not opt for VRS, he/she will be retrenched under theStaff Regulations/I.D.Act.”

This is not a case where the petitioners sought voluntary retirementeither as per the provisions of the Service Rules governing them orotherwise. They sought voluntary retirement under a scheme framedparticularly on the recommendations of the committee for reducing asmany as 175 posts, which were abolished. Firstly, petitioners have nooption except to opt for voluntary retirement in view of the policydecision taken by the organization for reducing its strength, which isalways available for the employer. Secondly, the VRS was introducedfor the benefit of the employees whose posts were sought to beabolished. Thirdly, the withdrawal letters were received on 28-4-2005,after the service of acceptance letters on 27-4-2005. Therefore, the contention that so long as the voluntary retirement was not given effectto (till 30-4-2005), petitioners are entitled to withdraw the optionsexercised by them on 20-3-2005 cannot be accepted in thepeculiar facts and circumstances of this case.

For all the above reasons, the Writ Petition is devoid of any meritand is liable to be dismissed. Accordingly, the Writ Petition isdismissed. No order as to costs.

prk

28-12-2007

[1]1997(4) SCC 280[2]1998(9) SCC 559[3]2000(5) SCC 621[4]2002(3) SCC 437[5]2003(2) SCC 721[6]2004(2) SCC 193[7]2006(1) ALD 98 (SC)[8]AIR 1973 SC 2641[9]2003(11) SCC 784[10]2003(6) ALD 400[11]2003(2) ALD 591 (DB)[12]AIR 1999 SC 923