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2001 Supreme(Cal) 546
HIGH COURT OF CALCUTTA
Aloke Chakrabarti, J.
Tyre Corporation of India Officers' Association
vs.
Union of India & Ors.
W.P. No. 1557 of 2001
Decided On : August 28, 2001
The decision of a public sector undertaking to roll back the retirement age of its employees must be in accordance with the Government policy and guidelines, and the undertaking must meet the criteria of being a sick unit that requires Government support for meeting its wage bills.
Headnote:
TYRE CORPORATION OF INDIA LTD. - AGE OF RETIREMENT - OFFICE MEMORANDUM DATED MAY 9, 2000 AND OCTOBER 17, 2000 - COURT HELD THAT THE DECISION TO ROLL BACK THE RETIREMENT AGE OF THE EMPLOYEES OF THE CORPORATION WAS NOT IN ACCORDANCE WITH THE GOVERNMENT POLICY AND GUIDELINES, AS THE CORPORATION DID NOT MEET THE CRITERIA OF BEING A SICK UNIT THAT REQUIRED GOVERNMENT SUPPORT FOR MEETING WAGE BILLS.
Fact of the Case:
The Tyre Corporation of India Ltd. (TCIL) had three units, one at Kalyani, one known as IRP unit at Tangra, and the third at Kankinara. In 1998, the age of retirement for TCIL employees was increased from 58 years to 60 years. In 2000, the Government issued a policy for rolling back the age of retirement to 58 years for employees of sick public sector undertakings (PSUs) that were seeking Government support for meeting their wage bills. TCIL adopted a resolution to roll back the retirement age of its employees to 58 years, citing severe financial crunch and the need for Government support for payment of salaries and wages.
Finding of the Court:
The court found that TCIL was not a sick unit that required Government support for meeting its wage bills. The Government grants received by TCIL were primarily for the IRP unit at Tangra, which was scheduled to be closed. The Kankinara unit, which was the only unit remaining in operation, did not require Government support for payment of salaries and wages. Therefore, the court held that the decision to roll back the retirement age of TCIL employees was not in accordance with the Government policy and guidelines.
Issues: 1. Whether the decision of TCIL to roll back the retirement age of its employees was in accordance with the Government policy and guidelines. 2. Whether TCIL met the criteria of being a sick unit that required Government support for meeting its wage bills.
Ratio Decidendi: The court relied on the Government policy and guidelines issued in the office memorandums dated May 9, 2000, and October 17, 2000, which stated that the rolling back of the retirement age was only applicable to sick PSUs that were seeking Government support for meeting their wage bills. The court found that TCIL did not meet this criteria, as the Government grants received by TCIL were primarily for the IRP unit at Tangra, which was scheduled to be closed, and the Kankinara unit, which was the only unit remaining in operation, did not require Government support for payment of salaries and wages.
Final Decision: The court allowed the writ petition and quashed the impugned resolutions dated November 14, 2000, and March 14, 2001, by which TCIL had decided to roll back the retirement age of its employees. The court also quashed the notice dated May 7, 2001, issued by TCIL informing its employees about the rollback of the retirement age.
Aloke Chakraborti, J.: Heard Mr. Jayanta Mitra, learned counsel for the petitioner, Mr. Malay Basu, learned counsel of the Tyre Corporation of India Ltd. (hereinafter referred to as the 'said Corporation') and its authorities and Mr. Chowdhury, learned counsel for the respondent No.1, Union of India.
2. The subject matter of challenge in this writ petition is rolling back of age of retirement of the employees of the said corporation. Admittedly, in respect of employees of the said corporation age of retirement earlier was 58 years and it was increased to 60 years in the year 1998 following a Government policy. On May 9, 2000, further Government policy was declared for rolling back the age of retirement age in 58 years in respect of employees generally giving some guidelines. Following the same a further memorandum dated October 17, 2000 was issued. The Board of Directors of the said corporation adopted a resolution for rolling back the age of retirement of the employees of the corporation. Such resolution was dated November 14, 2000. While confirming the said resolution in the next meeting of the Board of Directors of the said corporation on March 14, 2001 some alterations were effected as regards discussion in the meeting before resolution was taken in its earlier meeting. The implementation of such decision and the said resolutions have been challenged by the petitioner association on the ground such decision was not in accordance with the guidelines given in the original policy of the Government and strong contention has been made that though policy of the Government is not being challenged but implementation of the said policy is being challenged on the ground that the same was not in accordance with the guidelines provided in the policy itself.
3. Mr. Mitra, appearing for the petitioner contended that the policy was on the proposal for rolling back the age of retirement in the case of "some sick unviable P.S.Us for which rehabilitation revival packages are under consideration. "The procedure for the same, as recorded in the said office memorandum dated May 9, 2000 was that "in such cases the board of the concerned company should review its decision on the rolling back of age of retirement and make suitable recommendations to the administrative ministry/department concerned for taking the approval of the cabinet." Admittedly the said policy decision was subsequently changed to the extent the approval was no more required from the cabinet but from the Hon'ble Minister concerned. It is the contention of the petitioner that the memorandum issued on October 17, 2000 on the basis of the aforesaid policy decision dated May 9, 2000, recorded a consideration that some public sector enterprises under the administrative control of deparment of heavy industry are unable to generate sufficient resources even for meeting expenditure on account of salary and wages of their employees and have to seek budgetery support on' this account and in this situation it was observed to be appropriate that such enterprises which are seeking Government support for meeting their wage bills resort to the measure of reduction of the retirement age of their employee to 58 years. It was categorically recorded therein that procedure laid down in the office memorandum dated May 9, 2000 is to be observed.
4. Relying on the resolution dated November 14, 2000 by the Board of Directors of the corporation, it has been argued by the learned counsel for the petitioner that no consideration was made therein as regards facts involved in respect of the said corporation and as to whether requirements of the Government policy as contained in the office memorandum dated May 9, 2000 and October 17, 2000 have at all been existing and therefore, the decision to roll back the retirement age so resolved in deviation of the requirements of the Government policy is liable to be quashed. The portion of the resolution relied on by the petitioner is as follows:-
"The Board wa
