ORDER

1. Delay in filing the application for substitution is condoned, substitution is allowed and abatement is set aside.

2. Heard learned counsel for the parties. These appeals have been filed against the impugned judgment of the Karnataka High Court at Bangalore dated 13-9-2001.

3. The facts of the case in detail have been set out in the impugned order and hence we are not repeating the same here.

4. The short question involved in these appeals is "whether after an employee has accepted the VRS Scheme and received payment under it, can he subsequently claim a higher amount because of subsequent wage revision a with retrospective effect by the employer".

5. This Court in HEC Voluntary Retd. Employees Welfare Society v. Heavy Engg. Corpn. Ltd., vide paras 11 and 12, observed as under at p. 248 of LLJ: (SCC p. 715, paras 11-12)

"11. An offer for voluntary retirement in terms of a scheme, when accepted, leads to a concluded contract between the employer and the b employee. In terms of such a scheme, an employee has an option either to accept or not to opt there for. The scheme is purely voluntary, in terms whereof the tenure of service is curtailed, which is permissible in law.

Such a scheme is ordinarily floated with a purpose of downsizing the employees. It is beneficial both to the employees as well as to the employer. Such a scheme is issued for effective functioning of the C industrial undertakings. Although the Company is 'State' within the meaning of Article 12 of the Constitution, the terms and conditions of service would be governed by the contract of employment. Thus, unless the terms and conditions of such a contract are governed by a statute or statutory rules, the provisions of the Contract Act would be applicable both at the formulation of the contract as also the determination thereof. d By reason of such a scheme only is an invitation of offer floated. When pursuant to or in furtherance of such a Voluntary Retirement Scheme an employee opts there for, he makes an offer which upon acceptance by the employer gives rise to a contract. Thus, as the matter relating to voluntary retirement is not governed by any statute, the provisions of the Contract Act, 1872, therefore, would be applicable too. (See Bank of e India v. D.P. Swarnakar.)

12. It is also common knowledge that a scheme of voluntary retirement is preceded by financial planning. Finances for such purpose, either in full or in part, might have been provided for by the Central Government. Thus financial implications arising out of implementation of a scheme must have been borne in mind by the Company, particularly when it is a sick industrial undertaking. Offers of such number of employees for voluntary retirement, in that view of the matter, were to be accepted by the Company only to the extent of finances available there for."

6. Learned counsel for the appellant hence, submitted that the High Court was in error in granting the amounts over and above the amounts which were 9 paid to the employee under the VRS Scheme.

7. Learned counsel for the respondents, however, relied on Circular No.409 dated 6-9-1995, a copy of which is annexed as Annexure P-2 to these appeals. The relevant Clause 1.2 reads as under:

“1.2. Officers who have ceased to be in service on or after 1-1-1992 due to resignation, superannuation, voluntary retirement or death, will be eligible to arrears on a pro-rata basis wherever due."

8. Per contra, learned counsel for the appellant has invited our attention to another clause of the same circular viz. Clause 23.1 which states as follows:

"23.1. ... Calculations related to compensation paid under the Voluntary Retirement Scheme, incentive for not availing house building advance/interest subsidy for housing loan and/or vehicle advance shall not be reopened."

9. On a plain reading of both the clauses together, quoted above, it is evident that the expression "voluntary retirement" in Clause 1.2 of the said circular does not refer to voluntary retiremen