K.P. Agarwal and Ors. v. Chairman-cum-Managing Director, Cement Corporation of India Ltd.

1. No one appears for the petitioner although it is 3.00 P.M. No one even appeared earlier on behalf of petitioner on 5.4.2012. I have therefore perused the record and am proceeding to decide the matter.

2. Petitioners were employees of the respondent/Cement Corporation of India who took voluntary retirement on 30.4.1992 (petitioner no.1), 3.8.1993 (petitioner no.2) and 29.5.1992 (petitioner no.3). Petitioners claimed that subsequently pay scales and DA had been revised w.e.f 1.1.1992, however, as per that O.M. dated 17.4.1996 cases of ex-gratia 2013:DHC:5208 against VRS settled during period from 1.1.1992 to the date of implementation on 17.4.1996 was not to be reopened hence petitioners are denied the benefits of higher ex-gratia amounts.

3. Petitioners impugn the O.M. dated 17.4.1996 which denies the petitioners ex-gratia payment of difference of pay on account of revision of pay scales. Impugned O.M. issued after petitioners taking VRS is pleaded as being arbitrary.

4. The Supreme Court in the case of A.K.Bindal Vs. Union of India (2003) 5 SCC 163 has held that once a person takes VRS, the relationship of employer and employee snaps and such employee cannot claim any monetary benefits on account of his past services with the employer. Supreme Court has held that VRS is a golden handshake and on receiving of ex-gratia payment an employee ceases to be an employee and can claim no other benefits of past services rendered with the employer. Para 34 of the judgment in the case of A.K. Bindal (supra) is relevant and the same reads as under:- “34. This shows that a considerable amount is to be paid to an employee ex-gratia besides the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and foregoing all his claims or rights in the same. It is a package deal of give and take. That is why in business world it is known as 'Golden Handshake'. The main purpose of paying this amount is to bring about a compete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights, with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing the Scheme would be totally frustrated.” (underlining added)

5. It may be noted that the respondent in the counter-affidavit has stated that there was a specific reason for not reopening the cases prior to 17.4.1996 as funds available from the National Renewal Fund (NRF) had already been exhausted by allowing VRS to a number of employees and therefore while implementing revision of IDA scales of pay it was decided not to reopen the VRS cases as it could not have been possible for the respondent-corporation to arrange funds for payment of difference in the emoluments of ex-gratia amounts which were initially paid from NRF.

6. It is therefore clear that petitioners have no legal right to file this writ petition in view of categorical ratio in the case of A.K. Bindal (supra) which holds that an employee after taking VRS which is a golden handshake cannot agitate any claim against his employer for past services rendered with the employer.

7. In view of the above, there is no merit in the writ petition, and the same is therefore dismissed, leaving the parties to bear their own costs.

OCTOBER 08, 2013 VALMIKI J. MEHTA, J. Ne