IMPORTANT POINT
Once a cut off date is fixed for the purpose of calculating the benefits under the Voluntary Retirement Scheme and thereafter an employee is continued in service and if that period happens to be three months or more, that itself shall be treated as notice period and the employee shall not be entitled for notice period pay again.

Headnote:Service Law-Voluntary Retirement Scheme in Government Companies and Corporations-Entitlement to get notice pay even though employees were continued in service-Claim of-Options for voluntary retirement accepted fixing cut off date on 28.2.1998 for purpose of calculating VRS claims of employees-Funds provided by State Government only on 25.7.1998-Optees relieved from service on 31.7.1998-They were permitted to continue in service beyond the notice period of three months-They were given full salary and allowances upto 31.7.1998 -Refusal to give notice pay while settling their claims under the scheme-Challenged as arbitrary-Whether employees having drawn, full salary during the notice period would be entitled for pay for the notice period-(No).
       Held : When the employees have opted for VRS on their own without any compulsion knowing fully well about the Scheme, guidelines and circulars governing the same, it is not open to them to make any claim contrary to the terms accepted. It is matter of contract between the Corporation and the employees. It is not for the courts to re-write the terms of the contract, which were clear to the contracting parties, as indicated in the guidelines and circulars governing them under which Voluntary Retirement Schemes floated. In the circumstances we are of the view that the terminal benefits and financial package available under the Scheme are to be calculated up to the cut off date fixed for accepting the applications of the employees and not up to the date of their actual relieving from service. Hence the relevant date for the purpose of calculation of terminal benefits and benefits of VRS to the respondents was 28.2.1998 and not 31.7.1998. (Paras 12 and 13)
       It is also clarified that in the circumstances where the Management takes time to take a decision about the acceptance of an application submitted by the employee for the VRS and allows the notice period to lapse or the individual concerned has drawn full salary during the notice period served by him, notice period pay would not be admissible as the individual has drawn the salary during the notice period. In the present case admittedly the cut off date fixed was 28.2.1998, which is not disputed. The contention was that since the employees continued to be in service till 31.7.1998, they were entitled to the retrial benefits and the benefits available under the VRS as on 31.7.1998, the date on which they were actually relieved. While discussing first point we have clarified the position in this regard. As per clause (e) of Annexure P-1 no separate notice was required to be issued in terms of service conditions mentioned in the offer of appointment/service rules/S.R.S. But once a cut off date was fixed for the purpose of calculating the benefits under the VRS and thereafter an employee is continued in service to satisfy clause (i) of Annexure P-1 and if that period happens to be three months or more, that itself shall be treated as notice period. In that case he shall not be entitled for notice period pay again as is clear from the Memo dated 1.10.1997 (Annexure P-3), on the ground that an employee having drawn full salary during the notice period although no separate notice was required to be given, would not be entitled for pay for the notice period. (Paras 14 and 15)

JUDGMENT

Shivaraj V. Patil, J.-Civil Appeal No. 5638 of 1999

The Andhra Pradesh State Irrigation Development Corporation Ltd. (for short Corporation ) is a Government company, registered under the Companies Act, 1956. Pursuant to the national policy, the State of Andhra Pradesh issued instructions for floating Voluntary Retirement Scheme (VRS) in the Government companies and corporations. The Corporation introduced the VRS (Phase-I) on 1.6.1995. In the light of the said Scheme the Corporation issued a circular on 4.7.1997 inviting applications from the employees, who were eligible under the Scheme. In response to the same 416 employees submitted their options seeking voluntary retirement. The Corporation accepted their options on 18.10.1997 treating 31.10.1997 as cut off date for all purposes of VRS. The funds, for giving benefits under the Scheme to the employees, were made available to the Corporation by the State Government during the first week of November, 1997. The employees, whose options had been accepted, were relieved from service on 15.11.1997. As per the Scheme offered, the employees were entitled to three months pay in lieu of notice. The cut off date was fixed as 31.10.1997. The employees had worked 15 days beyond the cut off date and earned salary for the period. Hence they were given two months and 15 days notice pay in addition to the 15 days salary. On 1.10.1997 the State Government issued a clarification stating, "in the circumstances where the management takes time to take a decision about the acceptance of the application of the employee and allows the notice period to lapse or the individual concerned has drawn all salary during the notice period, in these cases notice period pay would not be admissible as the individual has already drawn salaries during the notice period."

2. The Corporation issued another VRS (Phase II) on 12.12.1997 seeking options from the employees, 212 employees, including respondents 1 to 32 in this appeal, submitted their options for voluntary retirement. The options were accepted fixing the cut off date as 28.2.1998 for the purpose of calculating the VRS claims of the employees. Since the State Government insisted for pre audit clearance by the Director of Treasuries and Accounts to pay the claims of the employees, it took some time and the funds were provided by the State Government only on 25.7.1998. The optees were relieved from service on 31.7.1998. They were permitted to continue in service beyond the notice period of three months and they were given full salary and allowances up to 31.7.1998, i.e., for a period of five months (including period of notice pay) beyond the cut off date. They were not given notice pay while settling their claims under the Scheme because they had also drawn salary during that period.

3. The respondents 1 to 32 filed writ petition No. 21901 of 1998 in the High Court seeking a writ of mandamus directing the Corporation to pay all service benefits as if they were in service up to 31.7.1998. The Corporation resisted the writ petition by filing a detailed counter affidavit contending that the writ petitioners were not entitled for any relief. The learned single Judge of the High Court allowed the writ petition and directed the Corporation to pay three months notice pay treating the cut off date as 31.7.1998 though specific prayer was not made in the writ petition to this effect. The Corporation was also directed to calculate the terminal benefits of the optees as if they were continued in service till 31.7.1998 notwithstanding the cut off date fixed was 28.2.1998. Aggrieved by this order of the learned single Judge the appellants filed writ appeal No. 633 of 1999 before the Division Bench of the High Court. The same was dismissed by the Division Bench holding that the action of the Corporation in not giving notice pay to the employees covered under the second phase of VRS was discriminatory and violative of Article 14 of the Constitution of India as such

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2003 Supreme(SC) 583

Cases Referred (3)