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2024 Supreme(Online)(NCDRC) 1658
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
RAM SURAT RAM MAURYA, PRESIDING MEMBER, MR. BHARATKUMAR PANDYA, MEMBER
BRIGADIER VIJAY RAHEJA – Appellant
Versus
BTVL EMPLOYEES WELFARE TRUST – Respondent
CONSUMER CASE NO. 76 OF 2006 | CONSUMER CASE NO. 25 OF 2008
For the Complainants:MR. ASHISH DOLAKIA, SR. ADVOCATE, MR. AVIJEET BHUJABAL, ADVOCATE
For the Opp. Party:MR. ADITYA NARAIN, ADVOCATE, MR. MISHRA RAJ SHEKHAR, ADVOCATE, MR. ARNAV NARAIN, ADVOCATE
Employee Stock Option Plans rights persist beyond superannuation if the vesting date is post-retirement, reaffirming consumer rights in employment law.
Headnote:(A) Consumer Protection Act, 1986 - Sections 2(1)(d) and 2(1)(o) - Employee Stock Option Plans (ESOP) - Complainants sought allotment and compensation - Contentions considered regarding entitlement to ESOPs post superannuation - The rights to ESOPs are contingent on continuing employment, but once allotted, rights persist beyond superannuation - Complaints allowed with costs. (Paras 21 and 3)
(B) Jurisdiction and Limitation - Complaints were not found time-barred as the cause of action was established and delays in communication did not preclude the complainants’ rights. (Paras 8 and 6)
Facts of the case:
Complainants, retired military personnel, sought allotment of ESOPs and compensation claiming negligence from the company regarding acknowledgment of their requests prior to the complaints being filed in Consumer Commission.
Findings of Court:
It was found that complainants were entitled to compensation and allotment of ESOPs, with a declared amount of remaining shares to be processed within one month without further delay.
Issues: The core issue addressed was whether complainants retained rights to ESOPs post-superannuation under the relevant scheme clauses.
Ratio Decidendi: The court underscored that ESOPs, once granted, would retain rights for the complainants despite changing employment status as long as vesting dates were compliant with conditions outlined. This reinforced employee rights concerning corporate governance and employment terms.
Result: Complaints allowed.
| Table of Content |
|---|
| 1. introduction of the parties and overview of the complaints. (Para 1 , 2) |
| 2. details on the context and claims made by the complainants regarding esops. (Para 3 , 4) |
| 3. responses from the company outlining defenses concerning the complaints. (Para 5 , 6) |
| 4. court observations regarding the relevance of employment status and esop vesting implications. (Para 8 , 9 , 10 , 13 , 14) |
| 5. court's final ruling on the esops relating to complainants' superannuation and definitional concerns. (Para 21) |
ORDER
1. Heard Mr. Ashish Dolakia, Sr. Advocate, assisted by Mr. Avijeet Bhujabal, Advocate, for the complainants, Mr. Aditya Narain, Advocate, for the opposite parties.
It may be mentioned the Bharti Telesonic Limited was merged with Bharti Telenet Limited on 10.09.2003. Bharti Telenet Limited was merged with Bharti Tele-Ventures Limited on 21.05.2005, whose name was changed as Bharti Airtel Limited on 24.04.2006. Bharti Enterprises is a group of company of Bharti Airtel Limited. The name of Bharti Tele-Ventures Employees Welfare Trust has been changed as Bharti Airtel Employees Welfare Trust.
2. Brigadier Vijay Raheja has filed CC/76/2006, for directing the opposite parties to (i) allot 39637 Employee Stock Option Plans after taking its price; (ii) pay Rs.150000/-, as compensation for mental agony and harassment; (iii) pay Rs.50000/- as litigation costs; and (iv) any other relief which is deemed fit and proper in the facts of the case.
3. Brigadier Vijay Raheja stated that he was a commissioned officer in Indian Army and had distinguished and meritorious service record. The complainant took premature retirement from the post of Brigadier in Indian Army and was employed in Bharti Airtel Group of Companies (the company) and was posted as Chief Operating Officer, Indore Region, Madhya Pradesh as a part of Bharti Telenet Limited from 01.08.1997 to 30.09.2000. Thereafter, he was transferred to Bharti Telesonic Limited as Vice President (Projects) and served there from 01.10.2000 till his superannuation on 30.06.2003. The company issued “Employees Stock Option Plan” (ESOP) and created Bharti Airtel Employees Welfare Trust (opposite party-1). In consideration of meritorious performance, length of service and noteworthy contributions of the complainant, the company granted 56623 ESOPs amounting to Rs.2548018/- on a discounted price of 50% to him on 01.10.2000. The company vide letter dated 05.03.2001, intimated the complainant the date of vesting as 10% ESOPs on 01.10.2001, 20% ESOPs on 01.10.2002, 30% ESOPs on 01.10.2003 and 40% ESOPs on 01.10.2004 and on exercise of option, the complainant had to pay its 50% value of ESOPs on being communicated by the company to him. The complainant had to give ‘option of acceptance’ on or after the applicable vesting dates but before expiry of seven years from the date of grant of options. The complainant, vide letter dated 05.03.2001, gave his ‘option of acceptance’ to the company. The company, vide letter dated 25.09.2002, revised vesting schedule as 15% ESOPs on 01.04.2002, 15% ESOPs on 01.10.2002, 30% ESOPs on 01.10.2003 and 40% ESOPs on 01.10.2004. The revised schedule of vesting was confirmed again vide letter dated 25.09.2002 and it has been clarified that option can be exercised at any time after the vesting date but before 01.04.2008. The complainant was informed about value of 30% ESOPs, which was paid by him through cheque No.107950 dated 18.07.2003. Date of vesting of next 30% ESOPs was 01.10.2003 and 40% ESOPs was 01.10.2004. Although the complainant had already exercised his option but he was not asked to deposit its value. The complainant wrote letters dated 18.02.2005, 21.04.2005 and 02.06.2005 to the company that he may be permitted to deposit value of 70% ESOPs but the company did not respond. The complainant made online complaint to Consumer Online Resource & Empowerment Centre, Noida, who also gave letters dated 28.11.2005, 15.12.2005 and 03.01.2006 to the company in respect of the
