Allowed

V.Ranganadham, v. Visakhapatnam Dock Labour Board

Telangana HC21 Sept 2011WP/21146/2001

Case brief

AI extract

What is this about?

A writ petition challenging the non-payment of pensionary benefits to teachers who opted for voluntary retirement. The court held that the employer introducing the scheme is liable for payment, not the State Government. The petition was allowed, directing payment of benefits within two months of submitting forms, but denying a claim for interest due to prior sub-judice status.

What did the court decide?

Directing respondents to pay pensionary benefits within two months of receipt of necessary forms; denying claim for interest on delayed payment.

V.Ranganadham, Vs Visakhapatnam Dock… — Pension and Retirement Benefits | Telangana HC (2011)

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

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WEDNESDAY, THE TWENTY FIRST DAY OF SEPTEMBER TWO THOUSAND AND ELVEN

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PRESENT

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THE HONOURABLE SRI JUSTICE G.CHANDRAIAH

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W.P. No.21146 of 2001

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Between:

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V. Ranganadham and others. … Petitioners and Cargo Handling Division, Represented by its Traffic Manager, Visakhapatnam and others. … Respondents

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THE HONOURABLE SRI JUSTICE G.CHANDRAIAH

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W.P. No.21146 of 2001

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ORDER:

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This writ petition has been filed seeking for issuance of

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Writ of Mandamus declaring the action of the 1^st respondent in not paying the amounts due to the petitioners on account of their voluntary retirement from the service of the Schools run by the

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1^st respondent, as arbitrary, illegal and unconstitutional and to issue a consequential direction to the 1^st respondent to pay all the benefits due to them under the voluntary retirement scheme along with interest from 01.04.2001.

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The case of the petitioners, in brief, is that the

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1^st respondent, Cargo Handling Division, is a statutory body and the 2^nd respondent, Superintendent, Visakhapatnam Dock Labour Board High School and Primary School, is the Correspondent of the Schools run by the 1^st respondent. The 1^st respondent runs educational institutions for the purpose of imparting education to the children of its employees and workers and these schools also provide admission even for the outsiders also. The State Government recognized these schools and Grant-in-Aid is also sanctioned for several posts. These schools are running in accordance with the rules framed by the State Government, and the 3^rd respondent, District Educational Officer, is the authority of the Education Department.

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All the petitioners have been working on permanent basis as Teachers in the schools run by the 1^st respondent since a long time. Except one of the petitioners, Mr.S.Jaya Rao, the other petitioners have been working since 1970s and they were parties to W.P. No.65 of 1985, which was filed when the 1^st respondent denied the benefit of Contributory Provident Fund to the Teaching Staff and tried to bring them over to the pension benefit compulsorily and the said writ petition was allowed on 29.09.1989 and thereafter, an appeal in W.A. No.316 of 1990 was preferred by the 1^st respondent was dismissed by the Division Bench of this Court on 21.11.1992.

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The 1^st respondent introduced a Scheme of Voluntary Retirement in its Organisation vide Circular dated 13.09.2000 and invited applications from the eligible employees. The scheme provided for payment of 45 days salary for each completed year of service to the optees of the voluntary retirement in addition to the normal benefit like payment of Provident Fund, payment of accumulated Earned Leave, payment of Gratuity, payment of Notice Pay and Pension. 14 Teachers, including the petitioners, working in the schools of the 1^st respondent have applied for the voluntary retirement and the 1^st respondent issued orders on 31.03.2001, accepting their applications with immediate effect and they were relieved from the service on the same day and thereafter, the posts were abolished by the 1^st respondent. All the petitioners were working in the aided posts, prior to their voluntary retirement, and the other three teachers were working in un-aided posts.

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The 1^st respondent has to release the monitory benefits, payable under the Voluntary Retirement Scheme, but the same have not been released to the petitioners even after six months from the date of their retirement. Therefore, the petitioners and the Trade Union,

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representing them, have made representations to the 1^st respondent seeking payment of the benefits to them but the 1^st respondent took a strange stand vide its letter dated 08.09.2001 that the retirement benefits to the aided teachers have to be paid by the State Government. In this connection,

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it is submitted that the 3^rd respondent has already addressed a letter dated 15.09.2001 to the 2^nd respondent stating that the Management of the Schools may release the pensionary benefits to the retired employees. It is further stated that the other benefits admissible as per the rules also may be released since the Dock Labour Board has already accepted the voluntary retirement of the Teachers.

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It is further submitted that the petitioners are the employees of the 1^st respondent and are employed in the schools run by the 1^st respondent. The Grant-in-Aid is released by the State Government only to meet the recurring expenditure like salaries of the Teachers but it does not mean that the particular benefits like ex gratia payable under the Voluntary Retirement Scheme has to be met by the State Government. It is the scheme framed by the 1^st respondent in accordance with the directions given by the Government of India and under that Scheme, the petitioners have opted for voluntary retirement and they are entitled for the benefits payable under the said scheme. It is an inconsistent stand taken by the 1^st respondent in accepting the retirement of the petitioners under the scheme framed by it on one hand and saying that the benefits under that scheme are to be paid by the State Government to the petitioners on the other hand. There is no employer and employee relationship between the petitioners and the State Government at any point of time and they are always the employees of the 1^st respondent. The benefit of Grant-in-Aid is only to reimburse the salary amounts to the Management of the private schools in order to strengthen the educational institutions and there is

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no other object behind it. Therefore, the action of the 1^st respondent, in not paying the ex gratia and other benefits payable under the Voluntary Retirement Scheme to the petitioners, even after six months, from the date of the acceptance of their voluntary retirement, is arbitrary, unreasonable and violative of Article 16 of the Constitution of India.

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Finally, it is submitted that the 1^st respondent is liable to pay interest also on the outstanding amounts due to the petitioners as the 1^st respondent ought to have settled the accounts of the petitioners on 31.03.2000 itself. The other three un-aided Teachers as well as the other employees of the Dock Labour Board are already paid with the benefits under the Voluntary Retirement Scheme but the petitioners are not paid

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so far. Hence, the petitioners filed the present writ petition.

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On behalf of the respondents 1 and 2, detailed counter affidavit has been filed stating, inter alia, that since the State Government has been sanctioning Grant-in-Aid to the teachers,

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it is obligatory on the part of the State Government to pay all retirement benefits to the retired aided teachers. Further, it is also submitted that the question falls for consideration before this Court is only that the petitioners are entitled to claim the pension but from whom the petitioners have to claim when they are working in aided posts.

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The learned counsel for the petitioners would submit that the petitioners were working against the aided posts in the 2^nd respondent school run by the 1^st respondent.

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The 1^st respondent having introduced the Voluntary Retirement Scheme, the petitioners have opted for the same. The Voluntary Retirement Scheme provided with certain benefits and payment of pension is also one of the benefits is to be paid by the

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1^st respondent. Therefore, as the petitioners are entitled to the benefits provided under the Voluntary Retirement Scheme, even after acceptance of the voluntary retirement of the petitioners, the petitioners were not paid pensionary benefits but paid certain benefits. Further, it is also submitted that the 2^nd respondent’s institution is registered and run by a Society under the control of the 1^st respondent and the said Society is running for the welfare and to impart education to the children of the employees working in the 1^st respondent’s organization. As the scheme introduced by the 1^st respondent therefore, the State Government has nothing to do with the scheme.

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He further submitted that this Court, with regard to benefits under the scheme, adjudicated the similar matter in W.P. No.850 of 1999 filed by the petitioners therein seeking to declare the proceedings dated 07.12.1998 of the 1^st respondent therein as illegal and arbitrary and contrary to the judgment dated 21.11.1992 passed by this Court in W.A. No.316 of 1990 and also sought a consequential direction to the respondents therein to continue to pay pension to the petitioners therein notwithstanding the receipt of contributory provident fund by them from the

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4^th respondent therein at the time of their retirement. Therefore, he submits that the present case is covered by the judgment passed in W.P. No.850 of 1999. He distinguished the present case with that of the case of W.P. No.850 of 1999 that in the instant case the petitioners were retired under voluntary retirement scheme and the petitioners in the W.P. No.850 of 1999 were retired on attaining the age of superannuation. Till last minute,

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the petitioners therein were working against the Grant-in-Aid post. Therefore, he submitted that the 1^st respondent alone is liable for payment of pension.

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On the other hand, the learned counsel appearing for the

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respondents 1 and 2 would submit that as the petitioners were working against the posts of Grant-in-Aid, the State Government alone has to release the funds towards payment of pension to the petitioners.

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The learned Government Pleader appearing for the 3^rd respondent would submit that the Voluntary Retirement Scheme is introduced by the 1^st respondent and as per the said scheme under Sub-Clause v of Clause 4 of the Visakhapatnam Dock Labour Board Voluntary Retirement Scheme for Officers, Employees and Workers, 1991, the Board itself has to pay pension as per the rules of the Dock Labour Board and therefore, the State Government has nothing to do with the same.

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Heard the learned counsel for the petitioners, learned counsel appearing for the respondent 1 and 2 and also the learned Government Pleader appearing for the 3^rd respondent and perused the material on record.

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There is no dispute with regard to entitlement of pension to the petitioners under the said scheme. The only dispute is that who has to pay the pension to the petitioners.

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It is also not in dispute that the scheme known as “VISAKHAPATNAM DOCK LABOUR BOARD VOLUNTARY RETIREMENT SCHEME FOR OFFICERS, EMPLOYEES AND WORKERS, 1991” was introduced by the 1^st respondent and the Clause 4 reads as under:

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“4) Benefits under the Scheme:-

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a) The terminal payments available to an officer/employee/worker who seeks voluntary retirement would be…

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i) the balance in his provident fund account payable as per the GPF/CPF regulations applicable to him;

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ii) cash equivalent of accumulated earned leave as per the rules.

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iii) Gratuity as per Gratuity Act or the Gratuity Scheme applicable to the officer/employee/worker;

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iv) One month’s/three months’ notice pay (as per the conditions of service applicable to him);

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v) Pension as per the rules of the Dock Labour Board;

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b) In addition, an employee whose requese for voluntary retirement is accepted would also be entitled to an ex-gratia payment equivalent to 1½ months’ emoluments (Pay + DA) for each completed year of service or the discounted value of the emoluments ( at 12% rate of discount) that would have become payable for the balance months of service left, whichever is less. For example, an employee who has put in 24 years of service and has got only one year of service for normal retirement, he will get ex-gratial payment of only 12 months emoluments (Pay + DA) discounted as 12% per annum and not 36 months’ emoluments. c) In addition, the officer/employee/worker and his family would also be entitled to travel by the entitled class to the place where he intends settling down.”

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As could be seen from the above, Sub-clause v of Clause 4 deals with the aspect of pension. The learned counsel for the petitioners submitted that there are service rules framed by the Dock Board but those rules are prior to introduction of the said scheme. Therefore, there is no pension scheme was available, but by virtue of the said scheme, the employees, officers and workers became entitle to benefit of the pension. Therefore, as per the order dated 10.12.2009, passed in W.P. No.850 of 1999 by this Court,

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the petitioners are entitled to receipt of pension and the relevant portion of the said order reads as under:

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“Hence the payment of benefits under the contributory provident fund scheme introduced by the Dock Labour Board in the year 1962 has no connection whatsoever with the obligations cast upon

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the state government by its undertaking to pay pensionary benefits to the teaching and non-teaching staff in aided educational institutions. It is purely incidental that the school where the petitioners worked was established by the Dock labour Board and that Dock Labour Board was under an obligation to pay the benefits under the Contributory Provident Fund scheme.

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The Commissioner and Director of School Education should have carefully studied and assessed properly the implications before unilaterally ordering for stoppage of payment of pension. Before such orders are passed great care, caution and thought process ought to have been spared. Stoppage of payment of pension, in certain cases may bring about disastrous or even irreversible consequences. Therefore, orders of the nature passed by the Commissioner and Director of School Education as was done in the instant case on 7.12.1998, could not have been passed without complying with the principles of natural justice of providing an opportunity of hearing to the person who is likely to be impacted by any such decision. An opportunity of hearing will bring to light all facets concerning the issue and would ultimately help in a well informed decision to emerge in the matter. It is therefore salutary that before orders for stoppage of pension are passed, the Commissioner and Director of School Education would do well to comply with the principles of natural justice and pass a reasoned order indicating the factors that weighed in the decision.

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Fortunately, pursuant to an interim order passed by this court on 22.1.1999, the writ petitioners must have been continuously in receipt of pension. Respondents 1 to 4 will ensure that the writ petitioners as well as other similarly placed employees who worked against teaching and nonteaching posts in the two schools established by the Dock Labour Board, at Visakhapatnam, which were admitted to grant-in-aid by the state government, are paid their monthly pension without any hitch or

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hindrance, notwithstanding the fact that they have received the benefits under the “contributory provident fund scheme” of the Dock Labour Board.

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The writ petition is allowed and the impugned orders are set aside. Costs easy.”

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In the instant case, the petitioners have retired under the Voluntary Retirement Scheme, introduced by the 1^st respondent. The 1^st respondent alone has taken the responsibility of payment of pension by contemplating the Clause 4 under Visakhapatnam Dock Labour Board Voluntary Retirement Scheme for Officers, Employees and Workers, 1991. Therefore, the respondents

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1 and 2 cannot disown their responsibility of paying the benefits under the said scheme. Therefore, this Court is of the view that the action of the respondents 1 and 2 in not paying the pension to the petitioners is illegal and arbitrary.

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Under those circumstances, having regard to the facts and circumstances of the case and the submissions made by the learned counsel, this writ petition is allowed directing the respondents 1 and 2 to pay the pensionary benefits to the petitioners as per Sub-clause v of Clause 4 of the Visakhapatnam Dock Labour Board Voluntary Retirement Scheme for Officers, Employees and Workers, 1991. Further, the petitioners shall submit the necessary forms, if so demanded by the respondents 1 and 2, and on receipt of such necessary forms, the respondents 1 and 2 are directed to pay the pensionary benefits, within a period of two months, from the date of receipt of necessary forms.

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However, the learned counsel for the petitioners also submitted that they are suppose to pay all the benefits under the scheme, within a period of six months, from the date of accepting their voluntary retirement and it is now 8½ years have been elapsed and the

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petitioners could not receive any amounts towards the pension. Therefore, he submits that the petitioners also entitled to interest on the late payments to be made by the respondents 1 and 2.

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On the other hand, the learned counsel for the respondents 1 and 2 submitted that it is not the respondents 1 and 2 delayed in making the payments but the delay caused as to the matter has become subjudice before this Court with regard to responsibility of payment of pension to the petitioners, who retired under the Voluntary Retirement Scheme. He further submitted that except the pension, the petitioners were already paid all the benefits under the said scheme. Therefore, he submitted that the interest may not be granted.

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Keeping in view of all the facts and circumstances of the case, this Court is of the view that the petitioners are not entitled to any interest on the pension payments to be made by the respondents 1 and 2.

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In the result, this writ petition is allowed. There shall be no order as to costs.

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_________________________ JUSTICE G.CHANDRAIAH

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Date: 21.09.2011 LSK

V.Ranganadham, v. Visakhapatnam Dock Labour Board

Case brief

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V.Ranganadham, v. Visakhapatnam Dock Labour Board

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