High Court
Legal Reasoning
WP 2682 05.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO. 2682 OF 20051)Jijasaheb Sonaji Bhosale,Age 50 years, Occ. Agriculture,R/o. 14/162, Mhada Colony,Opp. Baba Patrol Pump, Aurangabad,Chairman of Subsidiaries of M.D.C.Employees Association.2)Sadashiv Bhaurao Patil,Secretary, M.D.C. & Subsidiaries CompaniesEmployees Association,Age 66 years, Occ. Retired,R/o. N-7, C-2, 114, CIDCO,Aurangabad.…PetitionersVERSUS1)Chief Secretary,Industries Energy and Labour,Department, MantralayaMumbai-32.2)Secretary Finance,Mantyralaya, Mumbai-32.3)Managing Director,Marathwada Development Corporation,Vikas Bhavan,Dr. Rajendra Prasad Road,Aurangabad.4)Shri. B.V. Rathod,Director of All Subsidiary Companies,of M.D.C., Vikas Bhavan,Dr. Rajendra Prasad Road,Aurangabad.…Respondents …Advocate for Petitioners : Mr. F.R. Tandale.A.G.P. for Respondent nos. 1 and 2 : Ms. S.S. Joshi.Advocate for Respondent no. 3 & 4 : Ms. Charuta S.Deshmukh1/9 WP 2682 05.odtCORAM: MANGESH S. PATIL & PRAFULLA S. KHUBALKAR , JJ.DATE: 05.02.2025JUDGMENT : ( MANGESH S. PATIL, J.)We have heard the learned advocate Mr. Tandale for the petitioners,learned A.G.P. Ms. Joshi for respondent nos. 1 and 2 and learned advocateMs. Deshmukh for respondent nos. 3 and 4.2.The petitioners are claiming following reliefs:“B)The directions to respondent nos. 1 to 4 be given tomake the payment of 1st, 2nd and 3rd I.R. to the employees towhom while relieving, the payment of 1st, 2nd and 3rd I.R. wasnot given and to make the payment of 3rd I.R. on the similar lineof Ist and IInd I.R., to whom the payment of 1st and 2nd I.R. wastaken into account while relieving them under V.R.S. scheme,also the direction be given to the respondents to give the D.A.which was due from 1st August, 2004, as per GovernmentResolution No. Mabhava/1104/Pra.Kra.5/Seva-9 dated 19th July,2004, and take the above two factors in to account whilemaking the calculation of V.R.S. and release the arrears ariseddue to inclusion of I.R. and D.A. to the eligible employees, byissue of Writ of mandamus or any other writ or directions in thelike nature.C)The respondent no. 1 to 4 be directed, to pay an interest onarrears amount arised from the due date, in the event, theHon’ble Court consider the prayer clause ‘B’.C1)The respondent nos. 3 and 4 be directed not to soldthe property of M.D.C. & subsidiaries, till the final disposal ofthis writ petition by this Hon’ble Court.ORThe respondent no. 1 and 2 are to be directed to giveundertaking that, in case W.P. is allowed and relief sought isgranted, Govt. shall bear the liability arised from this writpetition.” 3.This is a petition in the nature of representative petition beingespoused by the association of employees of Marathwada Development2/9
Decision
WP 2682 05.odtCorporation (MDC), which was a Government enterprise and which alongwith three other subsidiary enterprises were defunct. Under Section 13(2)(i)of the Maharashtra State Enterprises (Restructuring and Other SpecialProvisions) Act, 2000 (hereinafter the ‘MSES Act’) for winding up the publicenterprises, a reference was made to the board constituted thereunder(MBRSE). By its report dated 19.07.2003, it disposed of the references withcertain directions. The directions contained in paragraph no. 15, which arerelevant and on which the petitioners’ claim rests read as under:“15.Based on the above conclusions, at the end of thehearing, the Board pointed out that within the frame workof the MBRSE Act revival of Ellora Milk Products Ltd.,Aurangabad, Parbhani Krishi Gosamvardhan Ltd., Parbhaniand Marathwada Ceramics Complex Ltd., Aurangabad isnot possible. Considering the fact that in these companiesthere is no production activity for number of years and theinability of the Companies to pay even monthly salariesand statutory dues, the employees should address thequestion of what could be done by the State Government toimprove their VRS package. A suggestion was made aboutimproving the VRS on the basis of notional basis pay as ifFifth Pay Commission Report is implemented. The Boardnoted that in a disinvestment proposal, the approach of theState Government has always been to secure a better VRSpackage for the employees from the new owner andtherefore in case of closure of a company, the StateGovernment ought to go beyond the usual VRS schemewith a view to meet at least some of the concern of theemployees. Having endorsed the proposal of the StateGovernment for closure of the companies, the Boardrecommends that the management of these threecompanies and the Industries Department of the StateGovernment should give a hearing to the employees of allthe three companies with a view to understand specificsuggestions, if any, in respect of VRS package and explorethe possibility of framing a revised VRS and report back tothe Board within four weeks from the date of this Order.”3/9 WP 2682 05.odt4.The submission of Mr. Tandale for the petitioners placing emphasis onthese directions that no opportunity of hearing was ever extended to thepetitioners’ members. They were threatened and were compelled to acceptthe ‘voluntary retirement scheme’ (VRS package), which they did underprotest. He would submit that by virtue of Staff Rule 103 of MDC, theemployees were entitled to claim dearness allowance in accordance with therules applicable to the State Government employees. By virtue of Rule 108,the Maharashtra Civil Services Rules were made applicable in respect ofconditions of service, fixation of pay, joining time etc. In spite of persistentdemand starting from a communication dated 17.04.2000, the respondentsfailed to apply uniform policy in the matter of payment of three interimreliefs (IR) declared in the year 1994, 1995 and 1996, till implementation ofthe Central 5th Pay Finance Commission Recommendations, which wereotherwise extended to the State Government employees. Even the dearnessallowance with effect from 01.08.2004 declared and paid to the StateGovernment employees was not given to the petitioners’ members.5.Mr. Tandale submits that while indulging in calculations for extendingthe benefit pursuant to the VRS opted by the employees before 30.11.2003,these three interim reliefs were not taken into consideration. It is only aftersome persuasion, the employees who took VRS on or after 30.11.2003, theI and II interim reliefs were taken into consideration, but even they were notextended the benefit of the III interim relief. It is thus his stand that theemployees, who had obtained VRS prior to 30.11.2003 were excluded fromthe benefit of I and II interim relief, whereas the employees, who took theVRS thereafter were extended that benefit and thus there was adiscrimination and violation of Article 14 of the Constitution.6.Mr. Tandale would further submit that the respondents had takendecision to merge 50% of the dearness allowance into the basic pay in theyear 2004 in respect of its employees. But the petitioners’ members were notextended that benefit. On repeated representations, petitioners’ request on4/9 WP 2682 05.odtbehalf of employees was not considered and discriminatory treatment wasextended to the employees of these State enterprises.7.Mr. Tandale would also place reliance on the decision in the matter ofD.S. Nakara and others Vs. Union of India; AIR 1983 Supreme Court, 130.He would submit that the classification treating the employees of the Stateenterprises differently from the State Government employees is not based onany intelligible differentia. There was no rationale. He would repeatdifferential treatment was given to such of the employees who retiredvoluntarily prior to 2003 from those who resorted to it thereafter. 8.Per contra, the learned A.G.P. and Mrs. Deshmukh learned advocate forrespondent nos. 3 and 4 would refer to the affidavits in reply and wouldsubmit that the stand of the petitioners and the submission of their learnedadvocate that by virtue of the Staff Rules 103 and 108 applicable to thepetitioners’ members to make it mandatory to apply all the Governmentresolutions covering the State Government employees to be applicable tothem automatically.9.They submit that the Board of Directors of the State Public Enterprisesprepared VRS scheme. It was submitted to the State Government. Aftersome modification it was approved and was implemented. They deny aboutthe employees having been compelled and coerced to receive the VRSpackage. They submit that nobody had raised any grievance. It was amatter of financial implication. As it is, the enterprises were defunct and theVRS package was evolved to meet the contingency.10.They further submit that the interim reliefs extended to the StateGovernment employees against proposed 5th Pay Revision were not ipso factoapplicable to the employees of respondent nos. 3 and 4. They specificallydenied to have indulged in any discrimination. Whatever was applicable tothe employees was a part of the VRS calculations. It was uniformly followed.No one was treated discriminately. The employees, who accepted the VRS5/9 WP 2682 05.odtprior to 30.11.2003 had done it voluntarily and are estopped from allegingany discriminatory treatment.11.They would further submit that since recommendations of the 5th PayCommission was never made applicable to the employees of respondent nos.3 and 4, there was no question of merging the interim reliefs into the basicpay.12.They would further submit that even the dearness allowance declaredby the State Government to its employees was not automatically applicable.The respondent nos. 3 and 4 were not under any statutory obligation toextend that benefit under the Government resolution dated 09.07.2004. Itwas a matter of finance. The State Enterprises-respondent nos. 3 and 4 wererunning into huge losses for more than 15 years and the decision to closethem down was taken way back in the year 1992.13.The learned A.G.P. and Mrs. Deshmukh would further submit that noparticulars have been given to demonstrate any discrimination or differentialtreatment. The allegations are vague. The VRS scheme was acceptedunconditionally. The request of the employees was accepted and they weredisbursed the benefit and the petition may be dismissed.14.We have considered the rival submissions and perused the papers.15.There is no dispute about the fact that the petitioners’ members werethe employees of the State enterprises which had become defunct afterrunning into losses and steps were being taken to close them down under theMSEC Act. Though these were the State enterprises, they were supposed tobe run independently. Their employees cannot be expected to be treated,and the State was not under any obligation to extend all the benefitsextended to its employees, neither were the enterprises under any obligation.It would be a matter of financial condition. There is nothing to point out thatthe interim reliefs extended to the State Government employees and benefit6/9 WP 2682 05.odtof dearness allowance declared by the State Government was applicable tothe employees of these enterprises ipso facto. Consequently, it cannot besaid that there is any error much less discrimination by making comparisonwith the employees of the respondent nos. 3 and 4 enterprises and the StateGovernment employees.16.If it was merely a matter of resorting to VRS package to the employeesof these State enterprises, in the light of their poor financial condition andthey were to be wound up, it was imperative for the petitioners to objectivelydemonstrate as to how different employees of these enterprises were treatedunequally. There is a specific reference in the additional affidavit in replyfiled by the Joint Director of Industries adverting to the Governmentresolution dated 26.07.2005 that 50% dearness allowance was to be mergedwith the basic only in respect of the employees of such public undertakingsto whom the 5th Pay Commission was applicable. Admittedly, the benefit of5th Pay Commission was never applied to the employees of respondent nos 3and 4-enterprises, prior to 30.11.2003. Admittedly, it is in the wake ofproposed 5th Pay Commission, as an interim measure, some installmentswere paid in the form of I to III interim reliefs. It has also been mentionedthat by the State Government resolution dated 04.10.1996, it was expresslymentioned that the III interim relief should not be considered whilecalculating interim relief, pensionary benefits. Consequently, this III interimrelief was not considered while undertaking calculation for VRS packages.17.It will have to be understood that in the matter of implementation ofany voluntary retirement scheme, it is the option of an individual employeeto accept the package as it is. Assuming for the sake of arguments that theemployees who had opted for VRS prior to 30.11.2003 were excluded fromthe I and II interim relief, it cannot be said that they were treateddiscriminately. It would be a matter of applicability of a particular decisionto extend the benefits to its employees. If the employees, who had opted forVRS prior to 30.11.2003 had accepted it willingly, demanding some benefit7/9 WP 2682 05.odtextended to the employees subsequently would be clearly an after thought.It cannot be said that it is a matter of discrimination.18.If the petitioners are claiming that there was a discrimination, it wasfor them to have objectively demonstrated as to how in spite of entitlement,some one was excluded. It is not a matter of discrimination. The benefits aswere available to be extended when the employees who had opted for VRSwere extended to them. If the employees who opted for VRS after that datecould derive the benefit of some subsequent package, it would not be amatter of discrimination.19.In the absence of concrete material demonstrating discriminationwhen it is a matter of VRS policy and the employees opting therefor prior to30.11.2003 would stand on a different footing and cannot claim parity withthe employees, who opted for VRS according to the extant policy in future.20. Reference to D.S. Nakara (supra), in our considered view ismisplaced. It is not a matter of payment of arrears of pension but a matter ofa scheme for VRS which comes with a package and an employee is aware asto what actually he would get. Case of employees opting for VRS cannot beequated with the persons who stand superannuated. By accepting the VRSand the package available, it would be in the nature of a contractualobligation and the respective rights and liabilities will have to be consideredfrom that angle. In the matter of employees, who superannuated, they stillwould be entitled to claim if something was declared subsequently by theemployers. It is in light of such essential difference that the decision in D.S.Nakara (supra) will have to be understood. That was a case of meetingdifferential treatment, in the matter of pension when a liberalized pensionscheme was made effective from a specific date and its benefit was notextended to such of the retirees who had retired before the cut off date.21.Therefore, the petitioners are not entitled to claim and allege anydifferential treatment in respect of its members, who opted for VRS by8/9 WP 2682 05.odtmaking comparison with the employees who opted for VRS at a later point oftime and were extended the benefit in accordance with the extant policy.22.There is no merit in the petition. It is dismissed.23.Rule is discharged. ( PRAFULLA S. KHUBALKAR J.) (MANGESH S. PATIL, J.)mkd/-9/9