High Court of KeralaSingle JudgeDisposed of

Chittor Sugars VRS (SSNP) Retirees Organization & Others v. State of Kerala & Co-Operative Sugars Ltd. & Public Sector Restructuring and Internal Audit Board (RIAB) & Malabar Distilleries Ltd.

Case / Petition Number:W.P(c).No.10304/2013

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • P.V.ASHA
Judgment Date
2019-03-08
Court Decision / Holding
Ext.P18 is set aside. The 1st respondent must consider the petitioners’ balance claims under Ext.P4 scheme in light of Ext.P6 Option 1, by facilitating negotiations between the company and the employees (respondents 2–4) after giving the petitioners a hearing. A decision conforming to Option 1 should be reached within two months from the copy of the judgment. Writ petition disposed accordingly.
Final Disposition
Disposed of

Parties to the Case

Appellants / Petitioners

  • Chittor Sugars VRS (SSNP) Retirees Organization
  • M. Gopinath
  • H. Abdul Kareem
  • M. Haridas

Respondents

  • State of Kerala
  • Co-Operative Sugars Ltd.
  • Public Sector Restructuring and Internal Audit Board (RIAB)
  • Malabar Distilleries Ltd.

Legal Representation & Advocates

Counsels for Petitioners

  • • S.R. Dayananda Prabhu

Counsels for Respondents

  • • K. Anand (Sr.)
  • • P. Benny Thomas
  • • Latha Anand
  • • K. John Mathai
  • • M. Gopakrishnan Nambiar
  • • P. Gopinath (Sr.)
  • • Sunil Kuriyako­se

Case Synopsis & Summary

A writ petition filed by an association of employees and three workers who had voluntarily retired under the Voluntary Retirement Scheme (VRS) from Co-operative Sugars Ltd., Chittoor, following the mill’s closure, seeking payment of 50% of wages for 2002–2005 during which the unit was non-functional. The Co-operative Sugars Ltd. (a sick public sector enterprise) faced financial distress after the distillery unit halted due to the 1996 arrack ban, leading to wage arrears and lay-off issues. The Government issued a Social Safety Net Programme (SSNP) scheme for restructuring state-level public enterprises, including two options for compensation: Option 1 (voluntary retirement ex-gratia, gratuity, PF, ESI with settlements of the balance by negotiations subject to resources) and Option 2 (ID Act-compliant severance with limited compensation). Petitioners opted for VRS under this framework and furnished undertakings to forgo further wage claims. The Government later rejected their balance-claims on undertakings alone and through Ext.P18. The Court held Ext.P18 illegal, directing the Government to consider the balance under Ext.P4/Ext.P6 Option 1 via a hearing, with a two-month timeframe for decision, noting the petitioners’ advanced age and the need for resource-based settlement. The petition was disposed of accordingly, with no counter-affidavits on record.

Provisions of Law Cited

Industrial Disputes Act, 1947, Section 25MIndustrial Disputes Act, 1947, Section 33C(2)Payment of Wages Act, 1936, Section 23Minimum Wages Act (as applicable)

Legal Doctrines & Maxims

  • Unfair labour practice (as under ID Act)
  • Natural justice
  • Public policy considerations in labour law

Submissions & Arguments

Contentions of Appellants / Petitioners

Petitioners argued that denying 50% wages for the period of non-functioning (2002–2005) violates the Social Safety Net Programme provisions and the Payment of Wages Act/Scheduled Minimum Wages, and that undertakings to forgo the balance were obtained in questionable circumstances. They relied on precedents addressing lay-off compensation and the right to pursue certain wage claims even after VRS, asserting that Option 1 of Ext.P4/Ext.P6 should permit settlement of the balance based on available resources and negotiations with the company. They sought a direction to pay the balance under the SSNP scheme, with hearing opportunities and relevant guidelines.

Contentions of Respondents

Respondents argued that due to severe financial distress post-1996 arrack ban and non-functioning status, wages could not be paid; the VRS package had been availed in reliance on SSNP, and petitioners signed undertakings not to claim further salaries. They contended that the Wage Acts do not apply once the employer–employee relationship ended and that the company’s restructuring funds would determine eligibility. They relied on Bank of India v. O.P. Swarnakar and HEC Voluntary Retd. Employees Welfare Society to justify limited post-cessation payment and emphasized the need to follow the VRS as per Ext.P4/Ext.P6.

Cited Precedents (6)

Case NameCitationTreatmentExplanation
District Transport Officer KSRTC v. S. Kunchan(2009) 3 KLT 891PositiveCited as authority for recognizing unfair labour practice under the ID Act and for support of the petitioners’ claim of wage-related rights.
Satyanarayana Reddy v. Presiding Officer(2008) 3 KLT 257 (SC)Mentioned OnlyCited to discuss lay-off compensation and maintainability of proceedings under Sec. 33C(2) of the ID Act, not treated as controlling precedent.
Union of India v. Natarajan(2010) 2 KLT 743 (SC)DistinguishedApex Court decision cited but stated not applicable to the factual circumstances of this case.
Central Inland Water Transport Corpn. v. Brojo Nath Ganguly(1986) 3 SCC 156PositiveUsed to illustrate issues related to undertakings and employee bargaining power, supporting the petitioners’ concerns about validity of undertakings.
Bank of India v. O.P. Swarnakar(2003) 2 SCC 721Mentioned OnlyCited by respondents to justify non-payment post-cessation under relevant cases; not adopted as controlling rule by the court.
HEC Voluntary Retd. Employees Welfare Society v. Heavy Engineering Corporation(2006) 3 SCC 708Mentioned OnlyCited in support of arguments related to post-retirement wage-related claims; not treated as binding in the present facts.

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Extracted Judgment Text

Exact text extracted from official judgment records.

W.P(c).No.10304/2013 1 **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **FRIDAY ,THE 08TH DAY OF MARCH 2019 / 17TH PHALGUNA, 1940** ## **WP(C).No. 10304 of 2013** ## **PETITIONERS:** |**1**||**CHITTOR SUGARS VRS (SSNP)**| |---|---|---| |||**RETIREES ORGANIZATION**| |||**REGISTERED CA NO. 332/06, REPRESENTED BY ITS**| |||**PRESIDENT K.N.CHAMY, MENONPARA, PALAKKAD-678556.**| |**2**||**M. GOPINATH**| |||**AGED 66 YEARS**| |||**S/O. LATE KUTTAN NAIR, RESIDING AT ASWATHY,**| |||**MELEVEEDU.P.O., MENONPARA, PALAKKAD-678556.**| |**3**||**H. ABDUL KAREEM**| |||**AGED 67 YEARS**| |||**S/O. HUSSAIN BAVA, RAWTHER, SHAHNAJ MANZIL,**| |||**ATHIKODE.P.O., PALAKKAD.**| |**4**||**M.HARIDAS**| |||**AGED 65 YEARS**| |||**S/O. LATE SEGHARAN NAIR, `BLESSED CHOTTAGE',**| |||**ELAPULLY, PALAKKAD.**| |||**BY ADV. SRI.S.R.DAYANANDA PRABHU**| |**RESPONDENTS**<br>**:**||| |**1**||**STATE OF KERALA**| |||**REPRESENTED BY ITS CHIEF SECRETARY, SECRETARIAT,**| |||**THIRUVANANTHAPURAM-695 001.**| |**2**||**CO-OPERATIVE SUGARS LTD.**| |||**REPRESENTED BY ITS MANAGING DIRECTOR,**| |||**MANONPARA, CHITTOOR, PALAKKAD-678556.**| |**3**||**PUBLIC SECTOR RESTRUCTURING AND INTERNAL AUDIT**| |||**BOARD (RIAB)**| |||**REPRESENTED BY ITS SECRETARY, 5TH FLOOR, CMB**| |||**BUILDING, C.V. RAMAN PILLAI ROAD, THYCAUD,**| |||**THIRUVANANTHAPURAM-695 014.**| W.P(c).No.10304/2013 2 **4 MALABAR DISTILLARIES LTD. REPRESENTED BY TIS MANAGING DIRECTOR, MENONPARA, CHITTOOR, PALAKKAD DISTRICT-678 556.** **BY ADVS. SRI.K.ANAND (SR.) SRI.P.BENNY THOMAS SMT.LATHA ANAND SRI.K.JOHN MATHAI SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH (SR.) GP SRI.SUNIL KURIAKOSE** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P(c).No.10304/2013 3 _**P.V.ASHA, J.**_ **--------------------------** W.P(C) No.10304 of 2013-K ------------------------------------------- _Dated this the 8[th] day of March, 2019_ ## _**JUDGMENT**_ An association of the employees, along with 3 workers, who voluntarily retired under the voluntary retirement Scheme from Co-operative Sugars Ltd., Chittoor, consequent to the closure of the mill, have filed this Writ Petition seeking directions for payment of 50% of the wages for the period from 2002 to 2005, when the company was not functioning. . 2. The Co-opertive Sugars Ltd., No.4322, Menonpara, Chittoor, Palakkad, was a Society constituted under the Multi State Co-operative Societies Act and working under the Industries Department as a State level Public Enterprise. The Society was established for the welfare of those engaged in sugar manufacturing out of sugarcane. It had a manufacturing unit and a distillery unit. The petitioners submit that there were seasonal employees, who were required to work only in the season of sugarcane crushing. On account of the arrack ban implemented by the Government in the year 1996, the distillery unit stopped functioning and the income of the sugar company was not sufficient to run the W.P(c).No.10304/2013 4 unit. It became a sick unit and the company sought permission to lay off 225 workmen for a period of six months, filing application under Section 25 M of Industries Dispute Act, 1947. However, the permission sought was refused in the year 2003 as per Ext.P1 order. The only income that could be procured was by growing sugarcane in and around the sugar factory. The society was unable to pay wages to the workers and they continued without work and wages on account of which several of the employees left the company. The petitioners submit that Ext.P1 order refusing permission for lay off was issued seeing that a revival package for VRS was under consideration of the management and 200 workers had already applied for VRS. It was found that the management had already laid off 168 workmen. It was found that financial difficulties by themselves cannot be a reason for granting permission for lay off. In Ext.P1 order, the trade union had opposed the application pointing out that the unit had become loss making from 1996 onwards. They demanded to hand over the unit to Kerala State Beverages Corporation or to allow the company to sell liquor. 3. As per Ext.P2 order dated 06.11.2004, the Government on the basis of decisions taken in a high level meeting convened by the Minister for Industries on 24.8.2004 ordered that a Voluntary Retirement Scheme would be floated for those employees, who are willing for the same in Chittoor Co-op. Sugars Ltd. (CHICOPS). The Minister for Finance and Excise was entrusted to take a decision as to whether the Beverages Corporation can take over the sugar factories at Chittoor and Thiruvalla after getting a study report through an agency. W.P(c).No.10304/2013 5 4. On 29.11.2004, the CHICOPS issued Ext.P3 notice calling for applications for voluntary retirement in tune with the Social Safety Net Programme floated by the Government in G.O(P) No.73/2003/ID dt.24.6.2003 for Public Sector Undertakings. As per G.O(Ms)130/2004/Ind. dt.6.11.2004 and the resolutions mentioned in circular 17.11.04 of the CHICOPS, it was decided to implement the scheme. All the employees were eligible to apply under the scheme. The proforma of applications was also made available from the CHICOPS. The last date fixed was 31.12.2004. As per the Social Safety Net Programme for the State Level Public Enterprises in Kerala issued as per G.O(P)73/2003/ID dt.24.6.2003, the Government had formulated and approved a scheme under the name “Social Safety Net Programme” making it applicable to all categories of employees. Originally it was applicable only to permanent employees who completed 10 years of service or 40 years of age. The scheme itself was floated in order to reduce the man power as part of rationalisation and at the same time to see that it does not result in serious distress to the employees and their family. As per the appendix to the scheme, all permanent/badly substitute/temporary employees, by whatever name called, appointed directly against the sanctioned strength and whose name appeared in the muster roll of the SLPE were eligible for inclusion under the scheme subject to the conditions mentioned therein. The financial compensation available under the scheme was given in para.1. Permanent employees, were eligible for an amount equal to one and a half months' emoluments (for each completed year of service) or monthly W.P(c).No.10304/2013 6 emoluments at the time of retirement multiplied by the balance years of service left before normal date of retirement, whichever is less. Those working on badly/substitute/temporary basis were eligible for ex-gratia payment equivalent to 45 days emoluments for every completed year, reckoning only the actual days of service rendered and reckoning basic pay plus D.A only as wages. In addition to that they were also eligible for the balance in the PF account payable as per Employees Provident Fund Act and Rules; cash equivalent of accumulated earned leave/privilege leave as per the rules of SLPE concerned; gratuity as per Payment of Gratuity Act or Gratuity Scheme if any adopted by the SLPE and notice or notice pay in lieu thereof. On the basis of the notice Ext.P3, persons like the petitioners submitted applications as contained in Ext.P5 opting for voluntary retirement. In this proforma the benefits under the scheme are also stated as “in addition to the usual terminal benefits like P.F, leave encashment, salary from August 2002 onwards, gratuity, etc. as per rules, get notice pay and an amount equal to one and a half months' emoluments for each completed year of service or the monthly emoluments at the time of retirement multiplied by the balance months of service left before normal date of retirement, whichever is left.” However, the scheme itself underwent a change as per G.O(MS) No.152/2005/ID dated 24.11.2005 - Ext.P6. The Government had constituted a cabinet sub committee for dealing with the problems of Public Sector Undertakings as per G.O(Ms) 134/2004/ID dt.26.11.2004. The cabinet sub committee for public structure restructuring made certain recommendations based on its decision in the W.P(c).No.10304/2013 7 meeting held on 9.8.2005. It was decided that notice pay will not be paid to the employees brought under the SSNP and funds would be released by the Government after a case by case scrutiny of related files and subject to availability of funds. The settlement of arrear salary of employees retired under SSNP since 2003 would be at 50% of the claims and the Government would consider payment of this amount on gratis. The date for ascertaining arrear salary or wages would be the date of stoppage of the company operation and the company has to ensure that the employee does not make any further claim, and benefit can be paid to them who gave such an undertaking. The PSUs were to get undertaking from the employees while receiving requests for VRS as provided therein. 2 options were provided therein. According to which, option No.1 was payment of VRS exgratia compensation, gratuity, PF dues and ESI contribution to the employees retired under SSNP by Government. Settlement of balance amount shall be only as per negotiations based on availability of resources. Under option 2, it is to be strictly under the provisions under the ID Act where 15 days compensation for every completed year of service only is admissible with no additional compensation either to employees handicapped during work or to those appointed on compassionate grounds and without enhanced VRS compensation. The PSUs were to be permitted to sell its unused assets ensuring a competitive price adopting a transparent procedure and raise resources for restructuring. It was ordered that seeking willingness will not amount to an offer and the PSU preserves the right not to give VRS. W.P(c).No.10304/2013 8 5. The members of the 1[st] petitioner union as well as other petitioners thereafter submitted a consent letter to the effect that they will not raise any claim for the balance 50% of the wages and acknowledging that the benefits due to the employee on voluntary retirement have been received with full satisfaction and the incumbents are agreed for the same wilfully without any coercion, as contained in Exts.P7 and P8. Petitioner union had submitted Ext.P11 representation stating that they were constrained to give undertaking on account of compelling circumstances because they were not getting any monetary benefit from the factory for about 3 ½ years. The General Secretary of the 1[st] petitioner submitted Ext.P9 representation on 11.3.09 before the Ministry of Labour and Excise requesting for payment of the 50% of arrears of pay and notice pay along with festival allowance for 2004-05 stating that they received 50% of the arrear amount on account of extreme necessities. According to them, their option was consequent to Ext.P4 scheme. The representation was rejected as per Ext.P10 letter dt.7.4.09 stating that the members of the organization had already furnished individual undertaking/consent letters that they would not raise any claim for the further claim of 50% and therefore their demand for the rest 50% due cannot be considered. The petitioner union thereafter addressed the Managing Director as well as the Secretary to Kerala State RIAB. 6. The petitioners thereafter approached this Court filing W.P. (c).No.26448/09 seeking directions to pay 50% of arrears of salary, notice pay, festival allowance for 2004-05, honorarium etc. The petitioners point out that W.P(c).No.10304/2013 9 proceedings were initiated during the pendency of that Writ Petition for public auction of the movable and immovable properties including the machinery of the 2[nd] respondent. Whileso, the said Writ Petition was disposed of as per judgment dt.5.11.2012 directing the 1[st] respondent to consdier their representation. Government rejected that representation as per Ext.P18 order on 14.3.2013 again stating that the company had been running at a loss since the declaration of arrack ban in the year 1996. The company had stopped functioning in the year 2002. The employees could not be paid wages due to acute financial crisis and they were allowed to take VRS under the SSNP scheme and they received the benefit under the scheme after furnishing specific undertaking not to pay any further amount. Therefore, they cannot be heard to raise any further claims. The Government found that the 50% of salary was already disbursed to the VRS holders in 2008 itself. It is stated that there was no agreement between the company and the employees to pay the balance wages. It was stated that further claims are not admissible after implementation of VRS in accordance with the scheme. The Writ Petition is filed challenging Ext.P18 order. 7. According to the petitioners, the denial of 50% wages to them is arbitrary. It amounts to violation of Section 23 of the Payment of Wages Act as well as Section 24 of the Minimus Wages Act. It also amounts to unfair labour practice as held by the Full Bench in the judgment in _**District Transport Officer, KSRTC, Tvm. & anr. v. S.Kunchan**_ [2009( 3) KHC 891]. The learned counsel for the petitioner relied on the judgment in _**Satyanarayana Reddy v. Presiding Officer**_ W.P(c).No.10304/2013 10 [2008 (3) KLT 257 (SC) para.14 and 17], _**Union of India v. Natarajan**_ [2010 (2) KLT 743 (SC)], etc. in support of his contention that denial of 50% wages is in violation of the provisions contained in the Minimum Wages Act and is against natural justice. Relying on _**Central Inland Water Transport Corpn. v. Brojo Nath Ganguly**_ [(1986) 3 SCC 156 paras.88, para.100- 112] it was argued that their willingness/undertakings were obtained in violation of Section 23 of the Indian Contract Act and the petitioners, who did not have any option, had to agree for whatever benefits were made available. On that ground, they cannot be denied wages. 8. On the other hand, the learned counsel for the 2[nd] respondent as well as the learned Government Pleader argued that the wages due to the workers could not be paid to them due to serious financial constraints which arose out of the arrack ban declared in the State in 1996 and consequential closure of distillery. It is stated that wages could not be paid to the workers during the period when it was not functioning. The petitioners have received benefit under a package of VRS in accordance with the terms and conditions therein and therefore they cannot raise any claim for the benefits once they had agreed for voluntary retirement and furnished undertaking that they will not raise any claim. It was also pointed out that as another company has been functioning in the place of the 2[nd] respondent, the petitioners themselves availed voluntary retirement on the basis of the offer tendered by the establishment. It is also pointed out that the wages for the workers in sugar mill are governed by the Wage Board for sugar mill workers and not by W.P(c).No.10304/2013 11 Payment of Wages Act or Minimum Wages Act. The learned Standing Counsel relied on the judgments of the Apex Court in _**Bank of India v. O.P. Swarnakar**_ **: (2003) 2 SCC 721** and _**HEC Voluntary Retd.Employees welfare Society v. Heavy Engineering Corporation**_ **:** (2006)3 SCC 708 and argued that after the employeremployee relationship severed, there cannot be any demand for any service benefit and the workers were bound by the terms of the VRS. 9. Having heard the contentions on either side the question to be examined is whether the employees can claim any further relief after availing the benefit of VR Scheme. Admittedly, the company was not functioning from 2003 onwards. They are claiming the wages for the period during which the company was not functioning. The petitioners have received the benefits as provided in package of VRS. Even though they submitted option in tune with Ext.P4 scheme, which was floated for various Public Sector Undertakings, that scheme itself had undergone a change subsequently and the petitioners have availed the benefits after furnishing undertaking not to raise any claim. They do not have any case that the provisions under the Scheme Ext.P6 were violated; on the other hand they enjoyed the entire benefits under the revised scheme. 10. It is true that workers like the petitioners did not have any other option but to accept the provisions under the VRS because in case they did not opt they would not have received any other benefits. 11. The judgment in _**Satyanarayana Reddy v. Presiding Officer**_ [2008 (3) KLT 257 (SC)] was in respect of a question whether an employee opting for VRS W.P(c).No.10304/2013 12 could claim payment of lay off compensation. In a case where it does not have any nexus with VRS it is possible to hold that a proceeding under S.33C(2) of the Industrial Disputes Act, 1947 could be maintainable. In that case the management had declared lay off. But lay off compensation was not denied to them except for two months; whereas their claim was for the period from August, 1995 to 6.9.2002. There the factory was sold to another factory when some of the workmen were absorbed by the transferee company and some of the absorbed employees were paid lay off compensation. However those employees lost the opportunity to continue in their employment as the factory was again shifted to another State. In that context, the Government of Andhra Pradesh floated a special package to those workmen who had not opted for employment by the new owner. Under the scheme, lay off compensation was not provided, after opting for voluntary retirement. Their Writ Petitions were disposed of observing that they can seek remedies before the appropriate forum. Thereupon, they filed applications under Section 33(C). They again approached the Apex Court when those petitions were rejected on the ground that it is not maintainable. It was held that a statutory right of opting for lay off compensation unless expressly waived may continue to remain within the realm of legal right, so as to enforce the same before a forum constituted under the Act. In that case the right of workmen to claim payment of lay off compensation was not denied or disputed. Para.25 of the judgment read as follows: > _“25. The right of the workman to claim payment of lay off compensation is not denied or disputed. If the said claim has no nexus with the Voluntary Retirement Scheme,_ W.P(c).No.10304/2013 13 _in our opinion, in a given case, like the present one, it is possible to hold that a proceeding under S.33C(2) of the Act would be maintainable. We are therefore, of the opinion that the question being one of some importance should be considered by the larger Bench as there exists an apparent conflict in the said decisions of National Buildings Construction Corporation (supra) and A.K.Bindal (supra).”_ In fact the question which arose for consideration in that case was whether a petition under Section 33 would lie before the Labour Court at the instance of a workman after cessation of his employment. 12. In the judgment in _**Union of India v. Natarajan**_ [2010 (2) KLT 743 (SC)], the Apex Court was considering the question of remission of retirement benefits to the employees to their disadvantage without giving them opportunity of hearing. In that case their pension was already fixed and they were being paid. On the basis of an audit objection, the Central Government decided that they were not entitled to dearness relief. Apart from that there was a bipartite agreement also arrived at between the union of employees and management with respect to the retirement benefits. The judgment therein could not apply in the factual circumstances of this case. 13. In _**District Transport Officer, KSRTC & anr. v. S.Kunchan**_ [2009 (3) KLT 891], the question was with respect to the reckoning of the service rendered by a driver in KSRTC on daily wages. It was found that after a regular process of selection and advice by the PSC it would be illegal on the part of the Corporation to appoint the employee on daily wages or as a casual employee and that it amounts to unfair labour practice under Section 25T of the ID Act. It was found that the acceptance of appointment under daily wages will not stand in the way of claiming the benefit. _**Central Inland Water Transport Corpn. v. Brojo Nath**_ W.P(c).No.10304/2013 14 _**Ganguly**_ [(1986) 3 SCC 156] was in respect of termination of service of permanent employees without assigning reason by tendering 3 months' notice, which was found to be unconscionable and contrary to the public policy pointing out the absence of bargaining power on the employees. 14. In _**HEC Voluntary Retd. Employees Welfare Society**_ **'s** case ( _supra_ ) relied on by the learned Counsel for the 2[nd] respondent the Apex Court was considering the claim raised for revision of wages after voluntary retirement, based on revision effected prior to the date of their retirement. The said judgment does not apply to the factual circumstances of the case, though petitioners' retirement was also under package based on financial assistance by the State Government as a part of restructuring for downsizing the employees. Judgment in _**O.P. Swarnakar**_ 's case, which relates to withdrawal after submitting application under VRS, the offer and acceptance, etc., also would not apply to the circumstances of this case. 15. In this case the Government introduced a Social Safety Net Programme as a part of restructuring of State Level Public Enterprises, in order to see that reduction in manpower does not result in serious distress to the employees and their families. Under this programme there should be a Financial Compensation Package and a Welfare sustainability Package. Ext.P4 Scheme was modified by Ext.P6 order on recommendations of the Cabinet Sub Committee, in which it was decided that the Government would release funds after case by case scrutiny subject to availability of funds. Government decided that notice pay would not be available under the scheme. It was also decided that the employees would be W.P(c).No.10304/2013 15 eligible for 50% towards arrears with reference to the date of stoppage of operation of the Company. It was also ordered that only those furnish urdertaking that they would not raise further claims on salary, shall be given the benefit. Petitioners, who had submitted their option pursuant to Ext P4, were asked to furnish undertakings for not claiming 50% salary. They furnished undertakings. 16. However it is pertinent to note that clause 4 of Ext.P6 order provided as follows: _“All PSUs will be directed to insist on one of the below stated options while receiving requests for VRS from employees and take a legally tenable undertaking to that effect. Payment of retirement compensation will only be based on this._ _Option 1_ _Payment of benefits viz. VRS exgratia compensation, gratuity, PF dues and ESI contribution to the employees retired under SSNP by the Government “on gratis” using scarce budgetary resources. Settlement of the balance amount shall be as per negotiations by the company with employee unions based on availability of resources in the company for meeting the expenditure and Governmental assistance, if possible, limiting to budgetary resources. G.O (P) No.73/2003/ID dated 24-06-2003 is to serve as a guideline to SLPEs for implementation of SSNP. The assistance by Government is not based on any legal provisions._ _x xxxx xxxx xxxx”_ Further in Clause 10 it was provided as follows : _“10. The assistance to PSUs for financial assistance `on gratis' for payment of retirement compensation, settlement of salary arrears and release of funds in various ailing PSUs will be decided by the Industries and Finance Departments as was done subsequent to the previous Cabinet Sub Committee meeting.”_ Clause 12 provided the following: _“12. The PSUs will be permitted to sell its unused assets ensuring a competitive price adopting a transparent procedure and raise resoures for restructuring. The units that have been closed down can do so to settle the dues to Government. Any such step will have to be after case by case analysis by the Finance Department.”_ 17. Petitioners' applications were based on Ext.P4 Scheme and it was granted as per Option 1. Under Option 1, Government ordered that the settlement of the balance amount would be as per negotiations by the company with the employees union subject to availability of resources for meeting the expenditure W.P(c).No.10304/2013 16 and Government assistance. That being so, the rejection of the request of the petitioners on the ground that they furnished undertaking not to claim 50% of the arrears of salary is illegal. The 1[st] respondent has not looked into the provsion under option 1 which provided for negotiations for settlement of balance benefits. According to the petitioners, there are sufficient resources from which the balance benefits can be disbursed to them as the assets of the 2[nd] respondent were put to sale as provided in Clause 12 of Ext.P6. But Government has not looked into this aspect while rejecting their claim. Even if the negotiation envisaged was between the company and the union, Government ought to have taken necessary steps to facilitate such negotiations. 18. It is pertinent to note that none of the respondents filed any counter affidavit. (No counter affidavit is available on record). The petitioners have stated that the assets of the 2[nd] respondent was auctioned for crores of rupees. It is also stated that the 4[th] respondent company has become the successor of the 2[nd] respondent. The 1[st] respondent ought to have directed respondents 2 to 4 to consider the claim of the petitioners in tune with the provision they themselves have provided in Option no.1 of Ext.P6 scheme. The undertaking furnished by them shall not stand in the way of such consideration. 19. Therefore, the claim of the petitioners for the balance benefits in accordance with Ext.P4 scheme based on which they submitted option are yet to be considered. Government ought to have facilitated such consideration through respondents 2 to 4, instead of rejecting their claim on the basis of undertaking. W.P(c).No.10304/2013 17 20. Therefore, Ext.P18 is set aside. There shall be a direction to the 1[st] respondent to see that claim of petitioners for the balance amounts due to them under Ext.P4 scheme is considered by respondents 2 to 4 after affording an opportunity of hearing to the 1[st] petitioner. As all the members of the 1[st] petitioner are of advanced age, a decision in tune with option no.1 in Ext.P6 and Ext.P4 shall be taken within a period of two months from the date of receipt of a copy of the judgment. The Writ Petition is disposed of accordingly. **==> picture [66 x 8] intentionally omitted <==** _**(P.V.ASHA, JUDGE)**_ _rtr/_ W.P(c).No.10304/2013 18 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE CPY OF ORDER DATED 21-6-2003 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P2 TRUE CPY OF THE ORDER DATED 6-11-2004 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P3 TRUE COPY OF THE NOTICE DATED 29-11-2004 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 24-6-2003 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P5 TRUE COPY OF APPLICATION FOR VRS DATED 205-2003 ISSUED BY 2ND RESPONDENT. EXHIBIT P6 TRUE COPY OF THE ORDER DATED 24-11-2005 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P7 TRUE COPY OF SPECIMEN NOTICE DATED 9-5-2003 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P8 TRUE COPY OF UNDERTAKING TO FORGO 50% OF SALRY ARREARS DATED 12-9-2005 SUBMITTED BY THE PRESIDENT OF THE 1ST PETITIONER TO THE 2ND RESPONDENT. EXHIBIT P9 EXT.P9 TRUE COPY OF THE REPRESENTATION DATED 11-3-2009 ISSUED BY THE 1ST PETITIONER. EXHIBIT P10 TRUE COPY OF THE ODER DATED 7-4-2009 REJECTING CLAIM OF THE PETITIONERS PASSED BY THE 1ST RESPONDENT. EXHIBIT P11 TRUE COPY OF LETTER DATED 19-6-2008 ISSUED BY THE 1ST PETITIONER TO THE 2ND RESPONDENT. EXHIBIT P12 TRUE COPY OF LETTER DATED 5-9-2008 ISSUED BY THE 1ST PETITIONER TO THE 3RD RESPONDENT. EXHIBIT P13 TRUE COPY OF THE ORDER DATED 27-3-2008 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P14 TRUE COPY OF REPORT DATED 7-8-2009 PUBLISHED IN MATHRUBHUMI.** |W.P(c).No.10304/2013|19| |---|---| |**EXHIBIT P15**|**TRUE COPY OF REPORT DATED 7-9-2009**| ||**PUBLISHED IN MATHRUBHUMI DAILY.**| |**EXHIBIT P16**|**TRUE COPY OF REPORT DATED 4-10-2010**| ||**PUBLISHED IN MALAYALA MANORAMA.**| |**EXHIBIT P17**|**TRUE COPY OF REPORT DATED 8-11-2010**| ||**PUBLISHED IN MALAYALA MANORAMA DAILY.**| |**EXHIBIT P18**|**IMPUGNED ORDER PASSED BY THE 1ST**| ||**RESPONDENT.**|