Dharam Pal Dhall v. Union of India and Ors.

II. Oil & Natural Gas Commission versus Utpal Kumar

III. Ramana Dayaram Shetty versus The International

15. On the other hand on behalf of the respondent No.2, it is contended that payment of ex gratia is discretionary and there is no legal right to claim it. Ex Gratia Scheme is not part of the employment, thus, the same cannot be claimed as a matter of right.

16. It is further submitted that the Scheme was to be extended to any ex-employee subject to fulfilment of the conditions therein. In the absence of fulfilling the conditions as envisaged in the Scheme, the petitioner cannot compel respondent No.2 to extend the benefit of Ex Gratia Scheme to him.

17. It is further submitted that the present writ petition is not maintainable as no legal right of the petitioner has been infringed. Since the Scheme introduced by respondent No.2 was purely an Ex Gratia Scheme, the payment to be made under the said Scheme is not a matter of right or entitlement by the petitioner.

18. It is further submitted on behalf of respondent No.2 that the writ petition is liable to be dismissed on account of lack of territorial jurisdiction. It is submitted that no part of cause of action has arisen within the jurisdiction of this Court. The memo of parties mentions the address of the petitioner as Noida, Uttar Pradesh. The address of respondent No.2 has also been shown at Noida, Uttar Pradesh. The Ex Gratia Scheme was also floated by the Noida Office of respondent No.2. The application form for availing the Scheme was also signed at Noida by the petitioner. Merely because respondent No.2 has a branch office at Delhi, the same does not confer jurisdiction on this Court. Further, Union of India is impleaded as respondent No.1, but no relief is sought against respondent No.1.

19. It is further submitted that the said Scheme is an ex gratia Scheme which was introduced voluntarily by the respondent No.2. The argument of the petitioner that the Scheme is in restraint of legal proceeding, is erroneous. The Scheme does not prevent or prohibit any person from pursuing any legal proceedings. There is no bar or initiation of any legal proceedings under the Scheme. In such circumstances, the petitioner cannot be permitted to plead the bar of Section 28 of the Contract Act.

20. It is further submitted that the petitioner in his application form undertaking has given a wrong undertaking that the petitioner does not have any litigation individually or collectively or any other service related matter before any court of law. The undertaking given by the petitioner was wrong as he had filed a Civil Suit against respondent No.2. Thus, it is prayed that present writ petition be dismissed.

21. In support of his submissions, ld. Counsel for the respondent No.2 has relied upon the following judgments: i. Kusum Ingots & Alloys Ltd. Vs. Union of India reported in (2004) 6 SCC 254 ii. Oil and Natural Gas Commission Vs. Utpal Kumar Basu and Ors. reported in 1994 (4) SCC 711 iii. Sterling Agro Industries Ltd. Vs. Union of India reported in AIR 2011 Del 174 iv. Manohar Lal Vs. Union of India and Ors. reported in (2005) 116 DLT 469 (DB) v. Kensoft Infotech Ltd. Vs. R.S. Krishnaswami and Ors. reported in (2008) 146 DLT 657 vi. Jaspal Singh Sahni Vs. Kuwait International Finance Co. S.A.K. reported in (1998) 71 DLT 740 vii. Ghaziabad Zila Sahkari Bank Ltd. Vs. Addl. Labour Commissioner reported in (2007) 11 SCC 756 viii. DFC Staff Association Vs. BIFR And Anr., reported in 2009 SCC OnLine Del 1885 ix. Coffee Board Employees Association Vs. A.C. Shiva Gowda reported (1992) 1 SCC 500 x. State of M.P. Vs. Mandawar reported in (1955) 1 SCR xi. Union of India and Ors. Vs. C. Krishna Reddy reported in (2003) 12 SCC 627 xii. Union of India Vs. Parma Nanda reported in (1989) 2 SCC 17

22. In rejoinder, ld. Counsel for the petitioner has contended that this Court has territorial jurisdiction to hear the present matter. It is submitted that at the time of his superannuation, the petitioner was posted on deputation with respondent No.1, i.e., Ministry of Petroleum and Natural Gas, Government of India. It is further submitted that all his salaries and other emoluments including retiral benefits were released by respondents from their office situated in Delhi. It is further submitted that respondent No.1 is the overall in-charge of the functioning of works under the respondent No.2.

23. I have heard ld. Counsels for the parties and have perused the record.

24. Respondent No.2 introduced Ex Gratia Scheme with a view to extend monthly benefit to its ex-employees who had completed minimum 15 years of continuous service with the respondent No.2. The said Scheme stipulated that the same shall be available to the exemployees as well as their spouse, subject to their fulfilling the laid down criteria and complying with the terms and conditions of the Scheme.

25. Accordingly, upon his superannuation the petitioner also applied under the said Scheme for release of the ex gratia amount to him. However, since the petitioner after his superannuation on 30.04.2005 had filed a suit bearing Suit No.247/2005 on 18.10.2005 against the respondent No.2 herein seeking damages, the said benefit of ex gratia amounts was denied to him. The relevant portions of the Scheme are reproduced herein below: “3.NON-APPLICABILITY OF ‘MEGS’ A) The scheme shall not apply to ex-employees who: (i)......... (ii)......... (iii)......... (iv)......... (v)......... (vi)......... (vii).........

(viii) had/have entered into any litigation for

Pension or Superannuation Scheme individually or collectively against the Company/Corporation before any Court of Law/ Forum/ authority and such case(s) is still pending. This clause is also applicable to spouse of such ex-employee. B) The scheme shall not apply to employees who joined/ will join Corporation on or after 1/4/2008.

4. AMOUNT OF MONTHLY EX-GRATIA: Category-wise rates of Ex-Gratia payment which is effective from 1.4.2008 are as under: Category of Employee Ex-Gratia Amount per month Non-Management Staff Rs.3,000/- Management Staff Rs.3,500/- The above payment will be a lump sum payment and will not attract any consequential benefits either by way of Dearness Allowance relief or any periodic time-scale revision. All the eligible ex-employees separated on or before 31/3/2008, will be eligible for payment under the Scheme from 1/4/2008 and arrears as applicable will be paid along with the first disbursal. In case of deceased ex-employee, his/her spouse will be paid Ex-Gratia as applicable to ex-employee. … … ….

5. HOW TO APPLY: a. … … … b. … … … c. … … … d. The ex-employees/surviving spouse, who are eligible for Ex-Gratia shall be required to execute an undertaking as per Annexure V to the effect that

(i) this benefit is being given not because of any right or entitlement, but entirely as an Ex-Gratia;

(ii) he/she will not enter into any litigation individually/collectively in this regard and/or any other service related matters before any Court of Law/Forum/Authority; (iii) if any case pertaining to Burmah Shell pension Scheme and/ or Superannuation Scheme/ any service related matter is pending before any Court of Law/Forum/Authority, if he/she was a party to any such case shall withdraw the same forthwith. The eligibility of such applicant shall be verified and application will be processed only after withdrawal of such case/petition or litigation before any Court of Law/Forum/Authority where the applicant is a sole/joint petitioner.

6) GENERAL:

(i) Payment under the Scheme is subject to the Exemployee’s (including spouse) withdrawing all litigations pending before any Court of law/Forum/authority. … … … ”

26. Perusal of the aforesaid Scheme shows that such Scheme shall be applicable to all the ex-employees who joined on or before 31.03.2008, and fixed amount was payable as ex gratia amount to Non-Management Staff as well as Management Staff, as per the rate as mentioned in the Scheme.

27. The aforesaid Ex Gratia Scheme of respondent No.2 stipulates in clear terms that the Scheme shall not apply to ex-employees who had/have entered into any litigation against respondent No.2 before any court of law. Further, the Scheme stipulates that the payment under the said Scheme is subject to the ex-employee, including the spouse, withdrawing all litigations against respondent No.2 pending before any court of law/forum/authority.

28. The aforesaid conditions, as imposed by respondent No.2 before payment under the Ex Gratia Scheme was to be released, clearly restrict and impose restraints on the employees to enforce their rights before a court of law.

29. The aforesaid stipulation is not only arbitrary and perverse, but also contrary to the settled principles of law and the fundamental rights as enshrined in the Constitution of India. By virtue of the said condition, respondent No.2 has literally scuttled the legal rights of its employees, who would be forced not to initiate any legal proceedings for enforcement of their legal rights in a court of law, if they were to obtain the benefit under the Ex Gratia Scheme. The condition that an ex-employee shall be entitled to payment under the said Scheme, subject to withdrawing all litigation, clearly restricts and impedes the right of such ex-employee to pursue his/her legal rights in proceedings before a court of law. Such conditions as imposed by respondent No.2 are clearly unlawful, unfair and against the law.

30. It may be noted herein that respondent No.2 is a company incorporated under The Companies Act, 2013. It is Government of India Undertaking under the aegis of the Ministry of Petroleum and Natural Gas, Government of India, respondent No.1. Thus, respondent No.2 is an instrumentality of the State, as the same works under the control and supervision of respondent No.1.

31. Restrictions which are sought to be imposed by the respondent No.2 in the said Scheme, are unjustifiable and inconsistent with the Rule of Law, wherein full opportunity is available to every citizen of the country to enforce his or her legal rights in a court of law. Thus, the said conditions enjoining an ex-employee to withdraw the litigation before considering his case for payment under the Ex Gratia Scheme, is clearly illegal and unacceptable.

32. Section 28 of the Indian Contract Act, 1872 clearly stipulates that any agreement by which any party is restricted absolutely from enforcing his rights by usual legal proceedings or extinguishes the rights of any party thereto, would be void to that extent. Thus, Section 28 of the Indian Contract Act, 1872 reads as under:

33. Respondent No.2 being a Government of India Undertaking is expected to act in a fair, reasonable and impartial manner. The act of respondent No.2 in denying the benefit of the Ex Gratia Scheme solely on the ground of the pending litigation initiated on behalf of the petitioner, is totally unjust and arbitrary. The respondent No.2 being an instrumentality of the State cannot be allowed to act in such highhanded manner and impose conditions that restrain the exercise of legal rights and recourse to legal remedies by the petitioner. Such restrictions as imposed by respondent No.2 in its Scheme, are clearly in violation of Principles of Reasonableness, Justness, Fairness and Equity, which ought to govern the actions of the State or any of its instrumentality. Thus, Clauses 3(vii), 5(d) and 6(i) of the Ex Gratia Scheme of respondent No.2, i.e., “Bharat Petroleum Corporation Limited Monthly Ex Gratia Scheme”, are liable to be struck down. The same are in violation and in restriction of the rights conferred upon the petitioner by the Constitution of India. Existence of such conditions would severely prejudice the cause of justice and cannot be sustained in law.

34. Supreme Court in the case of Comptroller and Auditor- General of India, Gian Prakash, New Delhi and Another Vs. K.S. Jagannathan And Another[1], has held that High Courts in India while exercising their jurisdiction under Article 226 of the Constitution of India have the power to give directions, where the discretion exercised under a policy decision of the Government or its instrumentalities, are based on irrelevant considerations, or exercised in a manner so as to frustrate the object of conferring such discretion. Thus, it has been held as follows:

35. Likewise, Supreme Court in the case of Brij Mohan Lal Vs. Union of India and Others[2], has held that when the actions pertaining to the matters relating to general policy decision of the State, are arbitrary, mala fide or contrary to the law of the land, then the courts will step in to interfere with such policy decision. Thus, it has been held as follows:

36. In view of the aforesaid, this Court certainly has the power to interfere with the policy decision of respondent No.2, when the same has been found to be arbitrary, unreasonable and contrary to the law of the land.

37. As regards the contention on behalf of respondent No.2 that payment of ex gratia is discretionary and there is no legal right to claim it, there is no quarrel with the said proposition. Indeed ex gratia payments cannot be claimed as a matter of right, being a matter of grace. However, where a Scheme of ex gratia has been introduced by an employer and an employee is covered by such Scheme, but for the arbitrary and unreasonable conditions imposed therein, then the court can certainly adjudicate upon the rights of such an employee under the ex gratia Scheme of the employer, especially when such employee has been denied the benefits in an unreasonable and arbitrary manner.

38. Undoubtedly, payment of ex gratia is discretionary, however, discretion vested in the Government has to be exercised in consonance with principles of reasonableness, fairness and for the public good. Thus, Supreme Court in the case of Ramana Dayaram Shetty Vs. International Airport Authority of India and Others[3], held as follows:

39. As regards the objection of respondent No.2 with respect to territorial jurisdiction of this Court, the same is found without any merits. The petitioner superannuated on 30.04.2005. At the time of his superannuation, the petitioner was posted with the respondent No.1 and was attached to the Ministry of Petroleum and Natural Gas, Government of India, at its New Delhi office. As per the pleadings on record, all his salaries and other emoluments including retiral benefits of the petitioner were released by the respondent from their office situated in Delhi. It is also pertinent to note that the litigation on the basis of which the petitioner was denied the benefits under the Ex Gratia Scheme, is also qua residence provided to the petitioner by respondents at Delhi and the said litigation is also pending in Delhi. Therefore, it is clear that part of the cause of action arose in Delhi.

40. With regard to territorial jurisdiction, Supreme Court in the case of Oil and Natural Gas Commission vs. Utpal Kumar Basu and Others[4], held as follows:

41. Supreme Court has laid down that the question whether or not, cause of action wholly or in part for filing a writ petition has arisen within the territorial limits of any High Court, has to be decided in the light of nature and character of the proceedings under Article 226 of the Constitution. Thus, in the case of Om Prakash Srivastava Vs. Union of India and Another[5], Supreme Court has held as follows: “7. The question whether or not cause of action wholly 2006 SCC OnLine SC 758 or in part for filing a writ petition has arisen within the territorial limits of any High Court has to be decided in the light of the nature and character of the proceedings under Article 226 of the Constitution. In order to maintain a writ petition, a writ petitioner has to establish that a legal right claimed by him has prima facie either been infringed or is threatened to be infringed by the respondent within the territorial limits of the Court's jurisdiction and such infringement may take place by causing him actual injury or threat thereof.

8. Two clauses of Article 226 of the Constitution on plain reading give clear indication that the High Court can exercise power to issue direction, order or writs for the enforcement of any of the fundamental rights conferred by Part III of the Constitution or for any other purpose if the cause of action wholly or in part had arisen within the territories in relation to which it exercises jurisdiction notwithstanding that the seat of the Government or authority or the residence of the person against whom the direction, order or writ is issued is not within the said territories. (See ONGC v. Utpal Kumar Basu [(1994) 4 SCC 711].)

9. By “cause of action” it is meant every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, a bundle of facts, which it is necessary for the plaintiff to prove in order to succeed in the suit. (See Bloom Dekor Ltd. v. Subhash Himatlal Desai [(1994) 6 SCC 322].)

10. In a generic and wide sense (as in Section 20 of the Civil Procedure Code, 1908) “cause of action” means every fact, which it is necessary to establish to support a right to obtain a judgment. (See Sadanandan Bhadran v. Madhavan Sunil Kumar [(1998) 6 SCC 514: 1998 SCC (Cri) 1471].)

11. It is settled law that “cause of action” consists of a bundle of facts, which give cause to enforce the legal inquiry for redress in a court of law. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the plaintiff a right to claim relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action would possibly accrue or would arise. [See South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises (P) Ltd. [(1996) 3 SCC 443] ]

12. The expression “cause of action” has acquired a judicially settled meaning. In the restricted sense “cause of action” means the circumstances forming the infraction of the right or the immediate occasion for the reaction. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but also the infraction coupled with the right itself. Compendiously, as noted above, the expression means every fact, which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Every fact, which is necessary to be proved, as distinguished from every piece of evidence, which is necessary to prove each fact, comprises in “cause of action”. (See Rajasthan High Court Advocates' Assn. v. Union of India [(2001) 2 SCC 294].) xxx xxx xxx”

42. When a part of the cause of action arises within one or the other High Court, it will be for the petitioner to choose his forum, (Kusum Ingots & Alloys Ltd. Vs. Union of India and Another; 2004 (6) SCC 254).

43. In view of the aforesaid, it is held that this Court has the territorial jurisdiction to hear the present matter.

44. Considering the detailed discussion herein above, it is held that the petitioner, and after his demise, his wife, is entitled to receipt of benefits under the Ex Gratia Scheme as formulated by respondent No.2. Thus, respondent No.2 is directed to release the amounts under its scheme, “Bharat Petroleum Corporation Limited Monthly Ex Gratia Scheme” to the wife of the deceased petitioner forthwith, payable w.e.f. 01.04.2008 in terms of the Scheme. The amount of ex gratia payable to the petitioner w.e.f. 01.04.2008 along with interest calculated @6% per annum from 01.04.2008 till the date of payment, shall be released to the wife of the deceased petitioner forthwith. It is further directed that respondent No.2 shall continue to release monthly amounts under the Ex Gratia Scheme to the wife of the deceased petitioner till her lifetime in terms of the said Scheme, during the continuance of the said Scheme.

45. The present writ petition is allowed in the aforesaid terms.

JUDGE JULY 10, 2023