High Court · 2007

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 13.6.2007CORAM:THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLAANDTHE HONOURABLE MR.JUSTICE S.TAMILVANANW.P.No.11305 of 1999S.N.Rajan .. Petitioner vs.1. The State of Tamil Nadu, rep. by its Secretary to Government, Industries Department, Fort St.George, Chennai-600 009.2. The Commissioner and Director of Industries and Commerce, Chepauk, Chennai-5.3. The Managing Director, Tamil Nadu Co-operative Milk Producers Federation Limited, Aavin Illam, Milk Colony, Chennai-600 051.4. The Tamil Nadu Administrative Tribunal, rep. by its Registrar, High Court, Chennai-104. .. RespondentsWrit Petition filed under Article 226 of the Constitution of India,praying for issuance of a Writ of Certiorarified Mandamus, calling for therecords of the orders of Tamil Nadu Administrative Tribunal in O.A.No.4381of 1997, dated 4.11.1998 and quash the same and direct the respondents totreat the petitioner as Government Employee and pay him all attendantbenefits due to him. For petitioner : M/s.A.Arulmozhi For respondents 1 & 2: Mr.M.Dhandapani,Spl.G.P For respondent-3 : Mr.R.Madanagopal https://hcservices.ecourts.gov.in/hcservices/ ORDER(The Order of the Court was made by F.M.Ibrahim Kalifulla,J)The petitioner seeks to challenge the order of the Tamil NaduAdministrative Tribunal, dated 4.11.1998 in O.A.No.4381 of 1997, in and bywhich the Tribunal dismissed the petitioner's Original Application.2. Brief facts which are required to be stated are that thepetitioner joined the services of the State Government as Junior Assistantin the Department of Industries and Commerce in the year 1960 and wassubsequently promoted as Assistant in the year 1963 and further promotedas Commercial Accountant in the year 1984.3. In the year 1977, he was selected for appointment asSuperintendent in the foreign service in the Tamil Nadu Dairy DevelopmentCorporation (hereinafter referred to as 'the Corporation') and thepetitioner joined the Corporation on 17.11.1977 as Commercial AssistantGrade-II which was equivalent to the post of Superintendent. TheCorporation, by its letter dated 7.7.1979, called upon the petitioner tofurnish his option to continue in the services of the Corporation. Thepetitioner exercised his option on 16.7.1979 for permanent absorption inthe Corporation, subject to the condition that his pay should be re-fixedon par with the similarly placed persons. The said option was withdrawn byhim since there was a move for converting the Corporation into a Co-operative Federation. His request for reverting him back to the parentDepartment was not considered on the ground that there was no vacancy atthat point of time. The deputation of the petitioner was periodicallyextended upto 1983.4. In G.O.Ms.No.555, Agriculture Department, dated 31.3.1980, theformation of the third respondent came to be made. The Corporationresolved to transfer all its activities from Corporation to Federationwith all its assets and liabilities with effect from 1.2.1981. InG.O.Ms.1000, Agriculture Department, dated 2.6.1978. all the employees ofthe Corporation including the deputationist were transferred to the thirdrespondent-Federation on and from 1.2.1981 in the same cadre which theywere holding in the Corporation. Subsequently, in G.O.Ms.No.1921,Agriculture (MP-I) Department, dated 8.11.1983, the first respondent-StateGovernment, after examining the request of the third respondent-Federation, formulated a Scheme and directed the terminal benefits to begiven to the Government employees who opted for permanent absorption inthe third respondent-Federation. Paragraphs 5,6 and 7 of G.O.Ms.No.1921,dated 8.11.1983 are relevant for our purpose, which read as under:"5. Options will be obtained from Governmentservants working in Tamilnadu Cooperative Milk Prods.Fedn. on the basis of this Govt. Order. The TamilnaduCoop. Milk Prods. Fedn. is requested to decideabsorption of Govt. servant on the basis of the https://hcservices.ecourts.gov.in/hcservices/ terminal benefits indicated in this Government Order.As at present, the employees cannot claim absorption inTamilnadu Coop. Milk Producers' Fedn. as a matter ofright; the Tamilnadu Coop. Milk Producers' Federationhas the right to accept or reject the options. Theproposal to absorb persons in Tamilnadu Coop. MilkProducers' Fedn. Ltd. may be placed before the Board ofManagement indicating details of persons who have optedfor service in the Tamilnadu Coop. Milk Producers'Fedn. Ltd., persons, whom the Tamilnadu Coop. MilkProducers' Federation has decided to absorb, andpersons, whom the Tamilnadu Coop. Milk Prods.Federation has decided not to absorb and revert totheir parent departments. The Tamilnadu Coop. MilkProducers' Federation is requested to finalise theabsorption on the basis of the decision of the Board ofDirectors and get the prior concurrence of Head of theDepartment or (where the appointing authority isGovernment) the Government.6. Once a Government employee opts for absorptionin Tamilnadu Cooperative Milk Prods. Fedn., and hisoption is accepted by the Tamilnadu Coop. Milk Prods.Fedn. and agreed to by Head of theDepartment/Government, the authority competent tosanction pension will arrange to settle the terminalbenefits of the absorbed employee. The gratuity andpension will be settled in the usual manner in whichthese claims are settled to retired Governmentemployees and debited to the relevant head, subject,however, to the condition that the employee option forTamilnadu Coop. Milk Producers' Fedn.'s service underthis Govt. Order will get the pension/commuted value ofpension only after the employee retires from theservice of the Tamilnadu Cooperative Milk Producers'Federation.7. Secretaries to Government/Heads of Depts. arerequested to review the progress of absorption ofpersons in Tamilnadu Coop. Milk Producers' Fedn. andthe settlement of their terminal benefits periodicallyand see that speedy action is taken at all levels." 5. Closely followed by that, there was a communication from thesecond respondent to the third respondent-Federation, dated 28.12.1985,which refers to G.O.Ms.No.1921, dated 8.11.1983 and the othercorrespondence between the first respondent and the third respondent,wherein, the second respondent expressed no objection for the permanentabsorption of the petitioner and one other employee who were then ondeputation with the third respondent-Federation with effect from 1.2.1981. https://hcservices.ecourts.gov.in/hcservices/ In the said communication dated 28.12.1985, in paragraph 2, the secondrespondent has mentioned the status of the petitioner and other employeevis-a-vis the first respondent-State Government as under:"2. They cease to be Government servant severingall connection (including their lien) in the Departmentof Industries and Commerce with effect from the datenoted against them in Column 4 above."Again in paragraph 4 of the communication dated 28.12.1985, it has beenstated to the effect that, "The Managing Director, Tamilnadu CooperativeMilk Producers Federation Ltd Madras is requested to issue necessaryorders absorbing the above individuals permanent in their Federation witheffect from the dates noted against each and send a copy of the orders tothis Department for reference at an early date."6. Thereafter, the third respondent issued a circular dated 12.6.1986which mentions the names of the Government employees who were on foreignservice/deputationist with the third respondent-Federation, whom exercisedtheir option to become regular employees of the third respondent-Federation. In the very same communication, the third respondent, afterreproducing the terminal benefits which are applicable to them as perG.O.Ms.No.1921, dated 8.11.1983, made it clear that subsequent to the dateof their absorption in the third respondent-Federation, necessary actionhad to be taken to enroll them in the E.P.F. Account of the thirdrespondent-Federation with effect from 1.6.1986 onwards. All the Unitofficers were requested to take immediate action to implement the schemementioned therein.7. Subsequently, the third respondent-Federation issued yet anothercommunication dated 29.12.1987 to all its Unit officers as well as theFunds Section, Head Office, stating that the option exercised by thepersons listed out in the said communication for absorption not havingbeen finalised by the third respondent, the instruction issued in thecircular dated 12.6.1986 was cancelled for administrative reasons andreversed forthwith in order to restore the status-quo-ante in regard tothose Government servants.8. Be that as it may, the petitioner continued to serve the thirdrespondent-Federation though at frequent intervals, from the year 1991,the petitioner was expressing his desire to go back to his parentDepartment. The petitioner reached the age of superannuation on 30.6.1997.Prior to that, on 20.3.1997, the petitioner gave one other representationfor restoration of his status as Government servant. The saidrepresentation of the petitioner was not acceded to either by the thirdrespondent-Federation or by the first and second respondents. Instead, bycommunication dated 14.5.1997, the second respondent intimated to thethird respondent that after the absorption of the petitioner in theservices of the third respondent, he ceased to be the Government servantsevering all his connections with the second respondent and therefore, itis for the third respondent-Federation to issue orders for permanent https://hcservices.ecourts.gov.in/hcservices/ absorption and for settlement of his terminal benefits.9. It is in the above stated background, the petitioner approachedthe Tribunal by filing the present Original Application No.4381 of 1997with a prayer to direct the second respondent herein to call him back tohis parent Department and permit him to retire in his parent Departmentwith all consequential benefits.10. One other relevant factor to be mentioned is that after theformation of the third respondent-Federation, such of those Governmentservants who did not opt for permanent absorption in the third respondent-Federation, made a challenge to G.O.Ms.No.1921, dated 8.11.1983, beforethe Tribunal. The Tribunal upheld the challenge and allowed theapplication of those employees in its order dated 26.6.1992 passed inT.A.No.704 of 1991, etc.11. The State Government preferred an appeal as against the saidorder of the Tribunal in Civil Appeal No.1387 to 1395 of 1993 and CivilAppeal No.1396 to 1404 of 1993. In the said Civil Appeals, the SupremeCourt took the view that a Government servant cannot be deprived of hisstatus as civil servant without his consent, but in the facts andcircumstances of the case in which those employees were placed at therelevant point of time, the Supreme Court felt that the only course leftopen for the employees was to accept the service under the Federation aspermanent employees and that would be the practical way to solve theproblem by holding that all the employees deemed to have opted to join theservices of the Federation. The Supreme Court thereafter considered thequestion as to whether the terminal benefits offered in G.O.Ms.No.1921,dated 8.11.1983 was reasonable or arbitrary in any respect and ultimatelyupheld that Government Order except striking down paragraph 3(f) byholding that the employees, after their permanent absorption to theFederation, were entitled to the benefit of liberalised pension rules ifany, in future. 12. In the above stated background, when the petitioner preferred thepresent Original Application, the Tribunal, by taking note of thecommunication of the second respondent dated 14.5.1997, took the viewthat the said communication snapped the lien of the petitioner with theparent Department retrospectively from 1.2.1981, that having regard to theviews expressed by the Supreme Court, the petitioner should also be deemedto have opted to join the Federation and on that basis, rejected thepetitioner's Original Application in O.A.No.4381 of 1997.13. Ms.A.Arul Mozhi, learned counsel appearing for the petitioner,while assailing the impugned order of the Tribunal, brought to our noticeG.O.Ms.No.126, Animal Husbandry and Fisheries Department, dated 4.8.2000and G.O.Ms.No.66, Labour and Employment Department, dated 24.3.2004, inwhich three other employees, namely Dr.P.Subramanian, Dr.H.Sankaran andone Thiru.K.Sivagaminathan, who were also covered by the absorption orderdated 12.6.1986, were permitted to retire as Government servants by https://hcservices.ecourts.gov.in/hcservices/ restoring their lien as Government servants, and contended that thepetitioner alone was discriminated against. The learned counsel alsostated that apart from those three persons, some other employees who werealso covered by the order of absorption dated 12.6.1986, were alsopermitted to get their status restored as Government employees and wereallowed to retire as Government servants in order to gain the benefit ofgetting terminal benefits as Government servants. According to the learnedcounsel, though by the circular of absorption dated 12.6.1986, thepetitioner and other employees were absorbed into the services of thethird respondent-Federation, since the said order of absorption waswithdrawn by the subsequent order dated 29.12.1987, the claim of thepetitioner for restoration of his status as Government servant ought tohave been accepted and he should be permitted to retire as Governmentservant and not as an employee of the Federation. The learned counsel alsocontended that the belated communication of the second respondent dated14.5.1997, which came to be issued one-and-a-half month prior to the dateof the retirement of the petitioner on 30.6.1997, cannot alter the rightof the petitioner to retire as a Government servant, since the earlierorder of the third respondent dated 29.12.1987 in cancelling the order ofabsorption dated 12.6.1986, not having been cancelled by the firstrespondent-Government, the petitioner had every right to insist that hisstatus as Government servant continued to exist till the date of hissuperannuation, namely on 30.6.1997.14. As against the above submissions, the learned Special GovernmentPleader appearing for the first and second respondents, contended thatneither G.O.Ms.No.126, dated 4.8.2000 nor G.O.Ms.No.66, dated 24.3.2004,can be relied upon as the said Government Orders being not in accordancewith the Fundamental Rules relating to the lien of a Government servant,as is stipulated in Fundament Rule 14-A, cannot be quoted as a precedentby the petitioner. According to the learned Special Government Pleader,one illegality cannot enure to the benefit of the petitioner forcommitting another illegality.15. The learned Special Government Pleader also would contend thatafter the issuance of G.O.Ms.No.1921, dated 8.11.1983, the secondrespondent issued letter dated 28.12.1985, making it clear that thepetitioner and one other employee ceased to be Government servants andsevered all their connections including their lien with the secondrespondent with effect from 1.2.1981, which was acted upon by the thirdrespondent-Federation in its order of absorption dated 12.6.1986 of thepetitioner along with 26 other employees. The learned Special GovernmentPleader would therefore contend that when once the lien of the petitionerwith the State Government got snapped, there was no question of restoringthe same either at the instance of the third respondent-Federation or atthe instance of anybody else. https://hcservices.ecourts.gov.in/hcservices/

16. Learned Standing Counsel appearing for the third respondent-Federation adopted the arguments of the learned Special Government Pleaderand contended that by the issuance of the Federation's circular dated12.6.1986, the petitioner became an employee of the third respondent-Federation, that he was granted subsequent promotions, that the petitionerwho at the time of his superannuation was working as Assistant Manager,having retired as such, it is too late in the day for the petitioner nowto claim for the restoration of his status as Government servant. Thelearned Standing Counsel therefore contended that the impugned order ofthe Tribunal does not call for any interference.17. Having heard the learned counsel for the petitioner, learnedSpecial Government Pleader appearing for respondents 1 and 2 and learnedStanding Counsel appearing for third respondent, we are convinced that theimpugned order of the Tribunal is fully justified and the same does notcall for any interference. 18. At the outset, we want to state that the status of a Governmentservant and his lien on his appointment to the post of Government servantis governed by Fundamental Rule 14-A and that the petitioner would standor fall by the said provision (i.e. F.R.14-A) vis-a-vis the proceedingsissued by the respondents 1 to 3.19. F.R.14-A reads as under:"14-A. (a) Except as provided in clauses (c) and(d) of this rule a Government servant's lien on a postmay, in no circumstances be terminated, even with hisconsent, if the result will be to leave him without alien or a suspended lien upon a permanent post.(b) Deleted.(c) Notwithstanding the provisions of Rule 14(a),the lien of a Government servant holding substantivelya permanent post shall be terminated while on refusedleave granted after the date of retirement under Rule86 or corresponding other rules. Vide G.O.829,Personnel and Administrative Reforms Department, dated26.8.1985.(d) A Government servant's lien on a post shallstand terminated on his acquiring a lien on a permanentpost (whether under the Government or the CentralGovernment or any other State Governments) outside thecadre on which he is borne."Ruling"The provision of Fundamental Rule 14-A apply onlyso long as a Government servant remains in Governmentservice. In cases where permanent Government servantsare permitted to be permanently absorbed in non-Government service in the public interest it should beincumbent on the foreign employer to consult the parent https://hcservices.ecourts.gov.in/hcservices/ employer before issuing orders absorbing the Governmentservant permanently in his service. The lien of theGovernment servant in the permanent post underGovernment stands automatically terminated with thecessation of Government service, that is, from the dateof permanent absorption.The Government servants absorbed permanently underthe autonomous Corporations or Undertakings owned byState or Central Government need not be asked to tendera formal resignation of their post under the StateGovernment as the issue of orders of absorption andacceptance of the same by the Government servant wouldbe construed as surrender of their rights as Governmentservants. From the date of such absorption; payment ofpension and leave salary contribution shall be stopped,as he will cease to be a Government servant.Such termination of lien in the Government servicewill be without prejudice to his entitlement toretirement benefits admissible under G.O.Ms.No.569,Finance, dated the 28th April 1961 as amendedsubsequently." (G.O.Ms.No.907, Finance (F.R.1), Finance, dated13th August, 1976.)The amendment hereby made shall be deemed to havecome into force on the 9th July 1974."20. A reading of Rule 14-A(a) makes it clear that under nocircumstance, the lien of a Government servant can be terminated even withhis consent except subject of course to the provisions contained in Clause(c) and Clause (d) of F.R.14-A. Sub-clause (c) is not applicable to thecase of the petitioner. The petitioner however is governed by theprovisions contained in sub-clause (d) to F.R.14-A. A reading of sub-clause (d) to F.R.14-A makes it clear that in the event of a Governmentservant acquiring a lien on a permanent post outside the cadre borne byhim, then his lien on the post held by him in the Government, would standautomatically terminated on such acquisition. In other words, thepetitioner acquired his permanent status in the third respondent-Federation by virtue of the option exercised by him pursuant toG.O.Ms.No.1921, dated 8.11.1983 and by the acceptance of the said optionby the third respondent by issuance of the circular dated 12.6.1986, hislien on the post held by him in the second respondent stood automaticallyterminated. To put it differently, the operation of sub-clause (d) ofF.R.14-A would create a fiction by which the happening of an event ofacquisition of lien on a permanent post in some other Department outsidethe Government, would automatically snap the status of the petitioner as aGovernment servant from the moment such acquisition in the Departmentoutside the service of the Government. https://hcservices.ecourts.gov.in/hcservices/

21. Therefore, when after the issuance of G.O.Ms.No.1921, dated8.11.1983, the second respondent in the communication dated 28.12.1985expressed concurrence for acceptance of the option of permanentabsorption of the petitioner in the third respondent-Federation and alsomaking it clear that all his connections in the second respondent-Department including his lien of service with it, got severed once and forall and the said concurrence was acted upon by the third respondent-Federation in its circular dated 12.6.1986, by absorbing the petitioneralong with 26 other employees that had put an end to the status of thepetitioner as a Government servant on and from 1.2.1981. When once thestatus of the petitioner as a Government servant got snapped by virtue ofoperation of F.R.14-A, there was no question of the third respondent-Federation passing any orders, much less the order dated 29.12.1987 forcancelling the earlier order of absorption dated 12.6.1986 or forrestoring the status-quo-ante of the petitioner as a Government servant.22. The said proceedings of the third respondent dated 29.12.1987has no legs to stand and the said proceedings having been issued inviolation of F.R.14-A, cannot be relied upon by the petitioner forclaiming any relief in the Original Application as well as in this WritPetition.23. When the status of the Government servant and the lien of such aGovernment servant is governed by F.R.14-A, we are constrained to holdthat the status of such other employees who were granted any benefit underG.O.Ms.No.126, dated 4.8.2000 and G.O.Ms.No.66, dated 24.3.2004, cannotbe held to have been issued in accordance with the statutory Rulesgoverning the status of a Government servant. When that is the legalstatus of those Government Orders, no reliance can be placed upon thoseGovernment Orders for extending any such benefit granted under thoseorders to the petitioner. Therefore, we are not in a position to considerthe claim of the petitioner by relying upon those Government Orders and asrightly conceded by the learned Special Government Pleader, such illegalorders cannot enure to the benefit of the petitioner for committinganother illegality. Therefore, we are unable to accede to the submissionsof the petitioner for granting any relief by relying upon those GovernmentOrders.24. As far as the communication dated 14.5.1997 of the secondrespondent, in the light of the earliest communication dated 28.12.1995issued by the second respondent, expressing concurrence for absorption ofthe petitioner along with one other employee in the service of the thirdrespondent-Federation, making it clear that the petitioner's lien on theGovernment post had come to an end with effect from 1.2.1981, it cannot beheld that the second respondent gave concurrence for the absorption of thepetitioner only in the subsequent communication dated 14.5.1997. In otherwords, the second respondent expressed concurrence for absorption of thepetitioner as early as on 28.12.1985 and the said concurrence was alsoacted upon by the third respondent-Federation when it issued the circular https://hcservices.ecourts.gov.in/hcservices/ of absorption dated 12.6.1986. Therefore, the petitioner cannot be heardto say that the second respondent expressed concurrence only in thecommunication dated 14.5.1997. The communication dated 14.5.1997 has onlyreiterated its earlier stand expressed in the communication dated28.12.1985. Therefore, the said submission of the petitioner cannot alsobe accepted. 25. In the light of our above conclusions, we do not find any meritin this Writ Petition in challenging the impugned order of the Tribunal.The Writ Petition therefore deserves to be dismissed.26. During the pendency of the Writ Petition, as per the interimorder of this Court, the petitioner was paid gratuity, pay commissionarrears and encashment of leave. In all, a sum of Rs.1,48,744.75, was paidas per the Federation Rules applicable. Inasmuch as we have held that thepetitioner became permanent employee of the third respondent-Federation,the third respondent is bound to settle all the other terminal benefits aswell, including the pension of the petitioner as per the Federation Rulesbased on the superannuation of the petitioner on and from 30.6.1997. Thethird respondent-Federation is therefore directed to settle all the otherterminal benefits to the petitioner within one month from the date ofreceipt of a copy of this order.27.Inspite of our above conclusions, learned counsel for thepetitioner still contended that the petitioner should be given liberty toapproach the Government and seek for restoration of his status as aGovernment servant as was granted to other persons in G.O.Ms.No.126, dated4.8.2000 and G.O.Ms.No.66, dated 24.3.2004. It is open for the petitionerto work out his remedy if he is so advised by approaching the StateGovernment, which shall be considered by the State Government on its ownmerits and in accordance with law.28. With the above observations and the directions, the Writ Petitionis dismissed. No costs. csSd/-Asst.Registrar/true copy/ Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The Secretary, State of Tamil Nadu, Industries Department, Fort St.George, Chennai-600 009.2. The Commissioner and Director of Industries and Commerce, Chepauk, Chennai-5.3. The Managing Director, Tamil Nadu Co-operative Milk Producers Federation Limited, Aavin Illam, Milk Colony, Chennai-600 051.4. The Registrar, The Tamil Nadu Administrative Tribunal, High Court, Chennai-104.+1 cc to Ms.A.Arul Mozhi, Advocate Sr.No.34575.+1 cc to Mr.R.Madanagopal, Advocate Sr.No.34441.TS(CO)dcp/2.7.07W.P.No.11305 of 1999