R.D. Gupta v. Delhi Transport Corporation

1. Applicability: The scheme will be applicable to all regular employees of the corporation i.e. workers and executives who are appointed against regular vacancies in the corporation.

2. Eligibility: An employee must have completed ten years of service in this corporation or completed 40 years of age to qualify for consideration under the Scheme. For this purpose, period of deputation/retention of lien in the parent office in lieu of deputation prior to absorption in the regular service of the Corporation will be excluded.

3. Conditions covering voluntary retirement. (a) Voluntary retirement will be normally allowed only in cases of incumbents of the posts which have been declared surplus or redundant. However, voluntary retirement Scheme could also be allowed in other cases depending on the merits of each case and in the interest of the corporation. (b) Voluntary retirement cannot be claimed by any employee as a matter of right. The corporation will have the right not to grant Voluntary Retirement for reasons to be recorded in writing. Under no reasons will the relief under this scheme be allowed from a date earlier than the date of passing the orders.

(c) An employee in whose case any disciplinary case is pending will not be considered under this scheme until the disposal of the same.

4. An employee who had taken voluntary retirement will be eligible to the following refunds/payments: (a) Balance in his PF Account as per rules of provident fund applicable to him. (b) Encashment of refused leave and accumulated earned leave as per rules of the corporation applicable to him as if he retires under the normal rules of retirement.

(c) Gratuity as per payment of gratuity act and gratuity Rules of the corporation applicable to him.

(d) Three month notice pay as is applicable in the individual case as per the terms of him/her employment. (e) An Ex-Gratia payment equivalent to 1-1/2 month's basic pay plus DA for such completed year of service limited to one month pay multiplied by the number of whose month of service left before normal date of retirement. (f) Expenses for travelling for the entitled class for the employee and his/her family comprising his/her spouse and dependent members from the place of his/her posting to the place where he/she intends to settle down in India. (g) Pensionary benefits as per office order No. 16 dt.27.11.92. All amounts due to the Corporation will be adjusted against the payments under (d) & (e) above and the employee concerned should clear any outstanding dues/advances taken before the date of effect of voluntary retirement. Employees working on the post of Conductor in the Corporation are proposed to be covered under the Voluntary Retirement Scheme in the first instance. Such Conductors who are desirous of seeking voluntary retirement in the proposed Scheme may give their option in the prescribed Performa through proper channel within 15 days to be concerned Unit Officer who will forward the same to the Secretary, DTC Board. This issue with the approval of competent authority.”

5. As the factual matrix would further undrape, the DTC introduced two more VRSs in the years 1994 and 1995. In the VRS 1994, it was expressly postulated as under: “It is also notified for information of all such employees who opt for VRS that they would not be entitled to join Pension Scheme if they are allowed retirement under VRS. Other salient features of the proposed VRS will remain the same as announced earlier vide this officer circular dated 03.03.1993.” Be it noted, the VRS which was floated in the year 1995 did incorporate a similar stipulation.

6. On a studied scrutiny of the aforesaid schemes, it is clear as noon day that the clauses relating to the pension eligibility were different. The VRS 1993 had stipulated that the pensionary benefits would be payable as per the office order No. 16 dated 27.11.1992. In the VRSs that were floated in 1994 and 1995, there was express stipulation that the employees who opt for voluntary retirement would not be entitled to join the pension scheme.

7. The present intra-Court appeal is concerned with the VRS 1993 and not with the VRSs 1994 and 1995 and, therefore, we shall restrict our advertence to the VRS 1993. As noticed, Clause 4(g) of the VRS 1993 had stipulated that the pensionary benefits as per the Office Order No.16 dated 27th November, 1992 would apply. There was a stipulation that all amounts due to the Corporation would be adjusted against the payments under subclause (d) & (e) of the Clause 4 and the employee concerned should clear any outstanding dues / advances taken before the date of effect of voluntary retirement. If the said clause is appositely understood in the context of the Office Order dated 27th November, 1992 which we have reproduced hereinbefore, it would convey that the employees who had opted for VRS under the 1993 scheme would be entitled to pension benefits except in cases where an employee had specifically opted under the office order dated 27th November, 1992 to remain outside the pension scheme. However, another aspect which luminously arises to the forefront requiring consideration is that the said scheme became operational only in 1995. The appellants in the present appeal, as the factual matrix would reveal, were offered retirement with effect from 31st May, 1993. They were not paid any pensionary benefits as the pension scheme had not become operational till 1995 and was in an inchoate stage. The appellants were paid retiral benefits under the Contributory Provident Fund Scheme. It needs special emphasis to state that the retirement benefits included higher amount of gratuity, payment made ex-gratia and the employer‟s share of provident fund. Be it noted, even after 1995, the appellants were not extended the benefit of pension.

8. It has been propounded that as the appellants had opted for the pension scheme, they are entitled to pension. The said contention has been pyramided on the bedrock of Clause 9 of the Order dated 27th November, 1992 read with Clause 4(g) of the VRS 1993. It has been canvassed that merely because they had been paid the retiral benefits because the pension scheme had not become operational and could become effective in 1995 only, the same would not make an iota of difference. This is a factor in favour of the appellants. The said submission is further edificed and reinforced on the basis of the decision rendered in Kishan Lal Sehgal and Ors. (supra).

9. To appreciate the controversy in totality, we think it apposite to reproduce what exactly has been held in Kishan Lal Sehgal and Ors. (supra):

10. The learned counsel for the DTC has drawn inspiration from the decision in Madhu Bhushan Anand (supra) and has assiduously urged that the said decision lays down the law correctly and the same is applicable to the facts of the case. It is apt to note that in the case of Madhu Bhushan Anand (supra), the employees who had opted for voluntary retirement under VRS 1993 had written letters that they had opted out of the pension scheme and be retained as members under the Contributory Provident Fund Scheme. The Division Bench, while dealing with the controversy, has held thus:

11. In the said case, the Division Bench adverted to the cases of the employees who were granted voluntary retirement under 1993 VRS but not paid pension benefits and who were covered by Clause 9 of the Office Order dated 27th November, 1992 or had opted for the pension scheme despite that they had not been paid pensionary benefits but only paid higher ex-gratia amount and the employer‟s share of provident fund. The Division Bench expressed the view that they were not entitled to pension by ascribing the following reasons:

12. In the said case, a contention was propounded to the effect that those who had opted under the VRS 1993 was due to compulsion and coercion as it was uncertain when the pension scheme would come into effect. The Division Bench, repelling the said contention, stated as follows:

13. It is worth noting the decision rendered in Madhu Bhushan Anand (supra) and other connected matters were assailed in SLP(C) No.31241/2010 by one of the employees and their Lordships on 3.12.2010 have passed the following order: “No ground is made out for our interference with the impugned judgment. The special leave petitions are dismissed.”

14. The question that emanates for consideration is when an employee receives payments including higher ex-gratia amount and the employer‟s share of provident fund and had applied and opted for a voluntary retirement under VRS 1993, whether he would be entitled to get pension as per the Office Order dated 27th November, 1992, when he had “opted” for pension specifically or by default. As has been held in the case of Kishan Lal Sehgal and Ors. (supra), the Division Bench had placed reliance on the decision in DTC v. Vir Bhan decided on 24th May, 2007 in LPA No.359/2007 wherein it had been held that the employee was entitled to pension. Thus, the decision rendered in Kishan Lal Sehgal and Ors. (supra) is based on Vir Bhan (supra). In the case of Vir Bhan (supra), the Division Bench referred to the Voluntary Retirement Scheme specially Clause 3 and Clause 9 and thereafter proceeded to state as follows:

15. In this regard, reference to the decision in LPA No.330/2002 decided on 17.4.2002, DTC Retired Employees Association v. DTC, is worth noting: “It is not disputed that the members of the first petitioner association and second and third petitioners had exercised their option to withdraw from the pension scheme pursuant to the Circular of the Delhi Transport Corporation dated 10th February, 1994 and the same was accepted by the respondent. Once the members of the petitioner association and second and third petitioners opted for Contributory Fund Scheme, they have no right to switch back to the pension scheme, especially when the petitioners have availed of the benefits under the Contributory Provident Fund Scheme after opting out of the pension scheme.” [Emphasis supplied]

16. The aforesaid order was assailed before the Apex Court in SLP(C) No.16135/2002 and their Lordships declined to interfere and dismissed the special leave petition

17. In Delhi Transport Corporation v. Mool Chand, (2009) 1 SCC 255, it has been held thus: “It appears that there was a voluntary retirement scheme (for short “VRS”) in Delhi Transport Corporation, hereinafter referred to as “the Corporation, in 1993 which contained a provision for pension. The respondent herein did not apply under that VRS scheme. Subsequently, the Corporation framed a new scheme dated 13.12.1995 in which it was specifically stated that those employees who opt for VRS under the new scheme will not get pension. The respondent, admittedly, applied under this scheme.

2. Since there was a specific provision in VRS scheme dated 13.12.1995, we fail to see how the High Court has held that the respondent will get pension in addition to VRS benefits. In view of above, we find that the impugned judgment of the High Court is erroneous and it is hereby set aside. The appeal is allowed accordingly. No order as to costs.”

18. From the aforesaid pronouncement of law in the field by various Division Benches, it is noticed that the decision rendered in Kishan Lal Sehgal and Ors. (supra) did not take note of the earlier decision rendered in DTC Retired Employees Association (supra). The said decision was rendered prior in point of time. It is well settled principle of law that earlier Division Bench decision is a binding precedent on the later Division Bench. As is evincible, the decisions rendered in Kishan Lal Sehgal and Ors. (supra) and Vir Bhan (supra) have laid emphasis on Clause 9 of the Office Order dated 27th November, 1992. The concept of „deemed to have opted the pension scheme benefits‟ has been accepted on the foundation that the same is binding on the DTC. If the language of Clause 9 is appositely understood, it would convey that if an employee does not exercise any option or quits service or dies without exercising an option or whose option is incomplete or conditional or ambiguous, he shall be deemed to have opted the pension scheme benefits. It does not lay down that if an employee deliberately applies for getting the benefit under the Contributory Provident Fund scheme and avails the benefits, then it would come under the realm of opting out of the pension scheme. It is an affirmative act to opt for the Contributory Provident Fund Scheme and to avail other benefits attached to it. The said benefits are higher ex gratia amount and the employer‟s provident fund contribution. There is subtle distinction between deemed inclusion to be under the pension benefit scheme but it would be an anathema to hold that even if an employee has voluntarily opted out and availed the benefits still he can take a somersault and claim to be brought within the pension scheme. As has been in the case of Madhu Bhushan Anand (supra) the same amounts to novation of contract of volition. To hold that who had applied and opted for the voluntary retirement under VRS 1993 and received all payments would still be entitled to pension regard being had to Clause 9 of the Office Order dated 27.11.1992 would result in placing a farfetched interpretation on Clause 9. In the case of DTC Retired Employees Association (supra) the Division Bench has clearly opined that such employees have no right to switch back to the pension scheme after they have opted out of the pension scheme. As we have indicated earlier, the decision in Madhu Bhushan Anand (supra) and DTC Retired Employees Association (supra) have not been interfered with by their Lordships of the Apex Court. In our considered opinion, Clause 9 of the scheme cannot be carried so far as to have an absurd impact on the scheme. Once the said benefits are availed of, the principle of opting out has to be made applicable. The concept of switch on and switch off has to be ostracized. When an employee accepts the benefits out of his own volition without any coercion, he cannot take a somersault and claim to have the benefits taking recourse to Clause 9 that he is deemed to be within the pension scheme. Thus analyzed, we are of the considered opinion that the decision in Madhu Bhushan Anand (supra) lays down the law correctly. The law laid down in Kishan Lal Sehgal and Ors. (supra) and Vir Bhan (supra) is not correct and, accordingly, the said decisions and the decisions on the said lines are overruled.

17. The reference is answered accordingly. The matter be placed before the appropriate Division Bench.

CHIEF JUSTICE SANJIV KHANNA, J. SEPTEMBER 20, 2011 RAJIV SAHAI ENDLAW, J. dk/pk