S. Ranganathan and others v. Fertilisers and Chemicals Travancore Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE THE CHIEF JUSTICE MR.NAVANITI PRASAD SINGH & THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V** **WEDNESDAY, THE 26TH DAY OF JULY 2017/4TH SRAVANA, 1939 WA.No. 813 of 2017 () IN WP(C).9111/2011 ------------------------------------------** **AGAINST THE JUDGMENT IN WP(C) 9111/2011 of HIGH COURT OF KERALA DATED 11-01-2017** ## **APPELLANTS/PETITIONERS:** **------------------------** ## **1. S.RANGANATHAN** **AGED 53 YEARS, S/O. M.R. SHESHAN 15, SAI BHARADWAJ, MUKOOT TEMPLE ROAD, POONITHURA PO - 682 038.** ## **2. GANESH G.,** **S/O. G. GOPALAKRISHNAN, 49/1174 E, EDAPALLY RAGHAVAN PILLAI ROAD, EDAPALLY, KOCHI - 682 024.** ## **3. RAJEEV K.** **AAVANI,MANKUZHI ROAD, EDAPALLY TOLL, EDAPALLY P.O - 682 024.** **4. VENUGOPAL V.P, CHAITHANYA, SHADY LANE, THOTTAKKATTUKARA, ALUVA - 683 108** **5. GOPALAKRISHNAN K.N,** **PONNADIL HOUSE, CHUTTUPADIKARA, EDAPPALLY P.O, PIN - 682 024.** ## **6. AJITHA T.P,** **W/O. DR. K. MOHANKUMAR, 34/2501 A, SOPANAM, BEENA NAGAR, EDAPPALLY, KOCHI - 682 024.** **7. SOPNA T.R, 'ASWATHY, PLOT NO. 6, M K K NAYAR NAGAR,** **TRIPUNITHURA P.O.** **BY ADVS.SRI.P.SANTHALINGAM (SR.) SRI.KAYALATT KUTTYKRISHNAN** ## **RESPONDENTS/RESPONDENTS:** ## **--------------------------** - **1.THE FERTILISERS AND CHEMICALS TRAVANCORE LTD., UDYOGAMANDAL - 683 501, REP BY THE CHAIRMAN AND MANAGING DIRECTOR.** - **2.THE SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF CHEMICALS AND FERTILISERS, SHASTRI BHAVAN, NEW DELHI - 110 001** - **3.UNION OF INDIA, REP BY THE SECRETARY, MINISTRY OF INDUSTRIES, DEPARTMENT OF PUBLIC, ENTERPRISES, BLOCK - 14, CSD COMPLEX, LODI ROAD, NEW DELHI - 110 001.** **R2,R3 BY SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL R1 BY ADV. SRI.E.K.NANDAKUMAR (SR.) R1 BY ADV. SRI.P.GOPINATH R1 BY ADV. SRI.K.JOHN MATHAI** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 26-07-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **W.A. 813/2017** ## **APPENDIX** ## **PETITIONER'S ANNEXURES:** **ANNEXURE-I TRUE COPY OF THE LETTER NO.Corp.HR/27/2017 DATED 11/5/2017 FROM RASHTRIYA CHEMICALS & FERTILIZERS LIMITED, MUMBAI TO THE 1ST APPELLANT ANNEXURE-II TRUE COPY OF THE LETTER NO.FAGAMAIL/I(51)/ RTI/44/DATED 29/5/2017 FROM FCI ARAVALI GYPSUM AND MINERALS INDIA LTD., JODHPUR TO THE 1ST APPELLANT ANNEXURE-II(a) TRUE COPY OF THE TRANSLATION OF ANNEXURE II LETTER INTO ENGLISH LANGUAGE ANNEXURE-III TRUE COPY OF THE LETTER DATED 3/5/2017 FROM DEPUTY SECRETARY TO GOVERNMENT OF INDIA DEPARTMENT OF FERTILIZERS** ## **RESPONDENT'S ANNEXURES:** **ANNEXURE-R1(a) TRUE COPY OF THE CONCILIATION SETTLEMENT DATED 14.8.2010** **/TRUE COPY/** **VPS PS TO JUDGE** **“C.R.”** **NAVANITI PRASAD SINGH, C.J. & RAJA VIJAYARAGHAVAN V., J. -------------------------------------------------W.A. No.813 OF 2017** **--------------------------------------------------Dated this the 26[th] day of July, 2017** ## **JUDGMENT** **------------------** ## _**Navaniti Prasad Singh, C.J.**_ 1. The appellants are the unsuccessful writ petitioners. They were all managerial employees of the Fertilisers and Chemicals Travancore Limited (“FACT” for short). They all had resigned in between the second half of 2007 and first half of 2008. It appears that the management took a decision to enhance and or revise remunerations for its employees including the managerial staff with effect from 1.1.2007. These decisions were taken by Exhibit P7 order dated 14.8.2010. The management decided to give this benefit to the employees who were working as on the date of order, employees who had died in harness after 1.1.2007, employees who had superannuated after 1.1.2007 and to those employees who had sought voluntary retirement after 1.1.2007. However the employees W.A. 813/2017 2 who had resigned in between 2007 and 2010 were not conferred with the benefit of wage enhancement or other improvements in emoluments and their request for earned leave encashment and balance of gratuity was not acceded to. That is precisely the grievance of the employees who had resigned in between. 2. On their behalf, it is submitted that a reference to section 4 of the Payment of Gratuity Act, 1972 (“the Act” for short) would show that an employee upon retirement, resignation, removal, dismissal, are entitled to gratuity upon completion of 5 years of service. Submission being that though the Act treats all of them as one class, when the gratuity payable was enhanced retrospectively from 3.5 lakhs to 10 lakhs and the management decided to extend this benefit to others, as noted above, leaving out the appellants, who had resigned in that period, would be discriminatory. Similar is the submission with regard to earned leave encashment. 3. We have heard the parties at length and with their consent are disposing of this appeal at this stage itself. 4. On behalf of the appellants, it was submitted that their W.A. 813/2017 3 entitlement was consequent to the exercise conducted by the Central Government for the pay revision of public sector undertakings. The pay revision committee for the public sector undertakings submitted its report in the year 2008. It made certain recommendations which were to be effective from 1.1.2007. The recommendations inter alia were pay revision with effect from 1.1.2007 and enhancement of gratuity from Rs.3.5 lakhs to Rs.10 lakhs. The effect of pay revision/enhancement was that leave encashment would also now be quantified at the revised pay. This recommendation of the pay revision was then accepted and circulated to the Central Public Sector Enterprises (CPSE) including the 1[st] respondent. While doing so, it was directed that so far as retired employees are concerned, they would get the benefit but the payments would be deferred. Nothing was said with regard to employees who had resigned in the meantime. This acceptance was in the year 2010. 5. The other route for extending the same benefits was as a consequence of a trade union agreement, that was effected between the management of FACT and its employees. That also gave similar relief with effect from 1.1.2007. It also provided that the benefits W.A. 813/2017 4 would accrue only to employees on the roll of the company when the agreement was arrived at, employees who had died in harness, employees who superannuated and employees who took voluntary retirement. This was then notified and later, the management in the year 2010 itself took a decision to make it applicable to the managerial employees as well. 6. Whatever be the source, whether it be from one route or the other, one thing was clear. Those employees, who resigned and went in search of greener pastures in between 1.1.2007 and the date when the pay revision was accepted, either pursuant to the Central Government recommendation or as per the trade union agreement which was extended to managerial staff, were excluded from the benefit. In other words, employees whose tenure of service was cut short and were not there when the wage revision was ordered or accepted, were held to be dis-entitled. 7. On behalf of the appellants, it is submitted that this would amount to hostile discrimination. Section 4 of the Act treats all such employees i.e., employees who have voluntary resigned, employees W.A. 813/2017 5 who have been dismissed, employees who have superannuated and employees who have resigned, as one group and then treating the appellants differently for the purpose of entitling them to enhance gratuity, would not be fair. 8. On the other hand, the learned counsel for the company and the management submits that there is reasonable classification. The appellants are those employees who in search of greener pastures resigned from the company long back. They left the company on their own volition for better career prospects or some other reason. But the decision was purely theirs. So far as the other three categories are concerned i.e., in the case of the employees who had superannuated and voluntarily retired, they ceased to be employees by virtue of the service contract itself and the third by virtue of the occurrence of death. They are two different groups. They are two different classes; one like the appellants who walked away and the others who have been with the Enterprise till the end of their service. Thus, there is reasonable classification for extending the benefit of enhanced pay and gratuity to the employees who continued till the end. The classification so made for the purpose of wage revision is W.A. 813/2017 6 thus not violative of either Article 14 or 16 of the Constitution of India. 9. The first thing we have to note is that so far as the appellants are concerned, they had themselves voluntarily left the company and went elsewhere. They were not compelled by the company or the service rules to go. They chose to resign. When the wage revision, either pursuant to the decision of the Central Government or the trade union agreement, being extended to the managerial staff came into being, they had no association with the company. But so far as others are concerned, though they may be dead or superannuated or voluntarily retired, their association in the jural form continues, for they were to continue getting benefits, which the appellants were not entitled to. Therefore, conferring the benefit of wage revision to such employees cannot either be arbitrary or discriminatory in any manner. We may also note that Section 4 of the Act only classifies the classes of employees who would be entitled to gratuity and nothing more. Merely because they are clubbed together cannot mean that for all purposes they must be treated as belonging to the same class. Article 14, which is right against discrimination, contemplates that no unequal must be treated W.A. 813/2017 7 equally and equals treated unequally. This principle does not apply to the fact situation of the present case as we have pointed out that there is a class distinction between employees who had voluntarily resigned and people who took voluntary retirement or who retired or who died in harness. Thus, being different classes, if the management decided to treat them differently, no grievance can be raised. 10. We may refer to a Division Bench judgment of the Karnataka High Court in **R.Balaji Singh v. Hindustan Machine Tools Limited** (ILR 1999 KAR 3725 ) where the questions formulated for consideration is in paragraph 7 and quoted hereunder. “7. Two questions therefore arise for consideration (i) Whether the resignation by the appellant can be considered as voluntary retirement for the purpose of Clause 10.3 of the conciliation settlement dated 7.7.1989; (ii) Whether denial of the difference in salary on the basis of revised scales of pay, for the period 1- 1-1987 to date of resignation, while paying such difference to persons who were superannuated or who voluntarily retired, amounted to discrimination violative of Articles 14 and 16 of the Constitution.” 11. So far as question No.1 is concerned, Their Lordships W.A. 813/2017 8 clearly held that an employee who resigns cannot be equated with an employee who voluntarily resigns because inter alia voluntary retirement is pursuant to a scheme of the employer himself on completion of a fixed period of employment, whereas resignation is moving to a new and greener pastures. The two being different, different treatments could be given to them. The crucial would be the second question as framed, which has been answered in paragraph 14. “14. Persons who are in service, persons who have ceased to be in service either on account of superannuation or on account of voluntary retirement, with the consent of the employer, persons who died while in service, and persons who voluntarily leave the service by resignation, form four separate and distinct categories. There is nothing wrong in the employer extending the benefit of revised scales of pay with retrospective effect only to those who fall under the category of loyal and committed workers (persons in first three categories) and not extending it to those who left the service in search of greener pastures, ie., those who resign to better their employment prospects or for other personal reasons. The distinction made is reasonable. It has a rationale nexus to the object sought to be achieved, that is to reward and benefit those who are loyal to the employer and strive for the betterment of the company. On the other hand, persons who resign from the company, normally to take up more lucrative or advantageous employment or for other personal reasons, have virtually deserted W.A. 813/2017 9 the company and therefore the employer can say that they will not be entitled to any additional benefits, which are given to the others. Hence, the second question is also answered in the negative.” 12. We may point out here that in the case reported in **Manojbhai N.Shah and Others v. Union of India and Others** (2015 (4) SCC 482) the Apex Court had the occasion of considering a similar contention as raised by the employees who had sought voluntary retirement subsequent thereto pay revision was made. They then wanted the effect of retrospective pay revision to be given to their settlement under the VRS as well. The Apex Court negatived the same holding that when the decision to give revised pay was taken, they were nowhere in the scene. Having already taken voluntary retirement, they were a distinct class and if they were disentitled from the benefit, it could not be challenged. We, thus, find no merit in the submission made on behalf of the appellants. 13. In fairness to the learned counsel for the appellants, we must notice the decision in the case of **State of Jharkhand and Others v. Jitendra Kumar Srivastava and Another** (2013 (12) SCC 210) and in particular what was said in paragraph 16 W.A. 813/2017 10 ## thereof, as relied by the learned counsel for the appellants. “16. The fact remains that there is an imprimatur to the legal principle that the right to receive pension is recognized as a right in “property”. Article 300 A of the Constitution of India reads as under: “ _**300-A. Persons not to be deprived of property save by authority of law.**_ - No person shall be deprived of his property save by authority of law.” Once we proceed on that premise, the answer to the question posed by us in the beginning of this judgment becomes too obvious. A person cannot be deprived of his pension without the authority of law, which is the Constitutional mandate enshrined in Article 300 A of the Constitution. It follows that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced.” 14. In our view, the case is clearly distinguishable in as much as it dealt with a Government servant whose retiral dues were being withheld on account of departmental proceedings which continued after his superannuation. The Apex Court held that in the absence of any statutory rule authorising such stay, the retiral dues under the pension rules could not be withheld. This was said with reference to W.A. 813/2017 11 Article 300-A of the Constitution of India. It must be remembered that Government service are covered by statutory rules as framed with reference to Article 309 of the Constitution of India. That is wholly not applicable in so far as the present appellants are concerned, who are employees of a public sector undertaking. FACT, a body corporate though wholly owned by the State, is distinct from State. In the result, we are unable to interfere with the matter for we find no grounds for the same. This appeal is accordingly dismissed. **Sd/-** **Navaniti Prasad Singh,** **Chief Justice** **Sd/-** **Raja Vijayaraghavan V., Judge** vps 28/7