Back
PATNA HIGH COURT
S.N.Jha and M.Y.Eqbal JJ.
I.T.C Limited
Versus
State Of Bihar
Letter Patent Appeal No. 1200 of 1995 ;
Decided On : APRIL 22, 1997
PENSION - Introduction of new scheme - Cut off date - Whether arbitrary - Applicability of Nakara's case (D.S. Nakara V/s. Union of India) - Held, Nakara's case is not applicable - New scheme introduced - Cut off date not arbitrary - Workman not entitled to pensionary benefits under new scheme.
Fact of the Case:
The workman, S.S. Prasad, retired from service on July 15, 1982, under the Voluntary Retirement Scheme. He was allowed pension @ Rs. 167 as per the Memorandum of Settlement dated August 17, 1981. In 1986, the company completed 75 years of its existence and created a Platinum Jubilee Pension Fund under Trust Deed dated May 27, 1987, to provide pension to the workmen who were entitled to pension benefits in accordance with the provisions of the rules of the Fund appended to the Trust Deed. On January 30, 1988, the management entered into a fresh bi-partite settlement with the employees at Patna represented by the Indian Tobacco Company Limited Employees Union. As per the terms of the Settlement dated January 30, 1988, which superseded the previous settlement of August 17, 1981, the terms and conditions of workmen, who were on the permanent rolls of the Patna Branch of the Company as on January 29, 1988 would be revised, as per provisions of the Settlement, for the purpose only of computing the gratuity and leave encashment, on their voluntary retirement from the service of the company. As regards pension, however, the settlement provided that the Pension Scheme envisaged under Platinum Jubilee Pension Fund Rules shall be applicable to all workmen on the rolls of the company as on August 24, 1986. The respondent workman raised a demand that his pension be revised in terms of the 1988 Settlement.
Finding of the Court:
The Court held that the present case is not covered by the ratio of Nakara's case (D.S. Nakara V/s. Union of India). The present case is not one of liberalisation of the existing pension scheme but one of introduction of a new scheme. The old scheme, effective from April 1, 1981, was applicable to workmen retiring from the service of the Company on reaching the age of superannuation legal heir of the workmen dying in harness and workmen opting for voluntary retirement or resigning from service on grounds of ill-health/accident and consequent incapacity to work, having put in 25 years of completed continuous service. The new scheme is applicable to only such workmen who are admitted to the ITC Platinum Jubilee Pension Fund in accordance with the Fund Rules. While the old scheme was completely financed and administered by the Company the new scheme is to be administered by trustees, and provides for a fund, being a trust property, consisting of the accumulations of the contributions from the Company as well as securities and other investments, interest and accretion arising thereform. There are several other features which make the two schemes distinct and separate. For instance there was a commutation clause, which is not found in the new scheme.
Issues: Whether the respondent workman was entitled to the benefit of the new scheme without being a member of the Fund.
Ratio Decidendi: The Court held that the respondent workman was/is not entitled to the benefits of the new pension scheme. It should also be kept in mind that introduction of the new scheme was not the unilateral act of the management, it was the re-suit of a bipartite settlement between the Management and the Workmens Representative, which provides that the terms and conditions of only such workmen who were on the rolls of the Company as on August 24,1986 will be eligible to become members of the ITC Platinum Jubilee Pension Fund and to receive the benefits in accordance with Trust Deed and Rules, and those who were on the rolls of the Company prior to the said date and were in receipt of pension under the old scheme, will continue to be governed by the old scheme. The new scheme will not be applicable to them.
Final Decision: The appeal was allowed. The judgment and order of the learned Single Judge in CWJC No. 10387 of 1994 were set aside. The award of the Labour Court, Patna, in Reference case No. 17 of 1991 was also set aside. The writ petition preferred by the appellant consequently stands allowed.
S.N.Jha, J.
1. This appeal under Clause 10 of the Letters Patent of the Patna High Court from the judgment of a learned Single Judge of this Court arises out of an award of the Labour Court. The appellant challenged the award by way of writ petition. Having lost before the Single Judge, it has come in letters patent appeal. The facts of the case, shortly stated, are as follows.
2. The workman, namely, S.S. Prasad, who is respondent No. 3 in this appeal, was one of the employees of the appellant company. He opted for voluntary retirement under the Voluntary Retirement Scheme in May 1982. His resignation was accepted by the management with effect from July 15, 1982. He was allowed pension @ Rs. 167 as per the Memorandum of Settlement dated August 17, 1981. Earlier, a; pension scheme had been introduced by the management in terms of agreement dated June 27, 1977 in terms of which pension was payable for a period of ten years to such workmen, who retired on or after June 1, 1977. On August: 17, 1981, the management entered into another agreement with the Indian Tobacco Companys Employees Union representing the workmen at Patna effective from May 1981. While the period of pension continued to be ten years, the amount of pension was slightly increased. Certain other modifications in the pension scheme were also made with which we are not concerned in this case. It may only be stated that as per the scheme, pension was payable for a period of ten years from the date of cessation of service and the amount was to be determined by multiplying the basic wage with the number of completed years of service and by dividing the product by 200. The minimum and maximum limits of pension were fixed at Rs. 40.00 and Rs. 225.00 per month. The respondent workman upon his retirement with effect from July 15, 1982 was accordingly allowed monthly pension of Rs. 167.00 for a period of ten years from July 16, 1982.
3. In the year 1986. to be precise, on August 24, 1986. the company completed 75 years of its existence. The occasion was celebrated as Platinum Jubilee. As a part of the Platinum Jubilee Celebration the management created a Platinum Jubilee Pension Fund under Trust Deed dated May 27, 1987, to provide pension to the workmen who were entitled to pension benefits in accordance with the provisions of the rules of the Fund appended to the Trust Deed. Though the Trust Deed was executed on May 27, 1987, the Scheme was made operative from August 24, 1986, that is, the date when the company completed 75 years, of its existence. Later, on January 30, 1988, the management entered into a fresh bi-partite settlement with the employees at Patna represented by the Indian Tobacco Company Limited Employees Union (It appears that some workmen had sought voluntary retirement from the service of the company and they had made a request for revision of the retirement benefits for the workmen proceeding on voluntary retirement). As per the terms of the Settlement dated January 30, 1988, which superseded the previous settlement of August 17, 1981, the terms and conditions of workmen, who were on the permanent rolls of the Patna Branch of the Company as on January 29, 1988 would be revised, as per provisions of the Settlement, for the purpose only of computing the gratuity and leave encashment, on their voluntary retirement from the service of the company. As regards pension, however, the settlement provided that the pension Scheme envisaged under Platinum Jubilee Pension Fund Rules shall be applicable to all workmen on the rolls of the company as on August 24, 1986. As regards workmen, who had retired prior to August 24, 1986 and were getting their pension under the 1981 Settlement, it was clarified that they would be governed by the previous settlement and the provisions of the Platinum Jubilee Pension Fund Rules would not be applicable to them. It may be mentioned here that in terms of the Platinum Jubilee Pension Fund Rules the pension was payable for li
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
