2003 INSC 0481 SUPREME COURT OF INDIA Vice Chairman And Managing Director A.P.S.I.D.C. Ltd. Vs. R. Varaprasad (S.V. Patil and Arijit Pasayat JJ.) 22.05.2003 JUDGMENT SHIVARAJ V. PATIL, J. Civil Appeal No. 5638 of 1999 1. The Andhra Pradesh State Irrigation Development Corporation Ltd. (for short 'Corporation') is aGovernment company, registered under the Companies Act,1956. Pursuant to the national policy, the State ofAndhra Pradesh issued instructions for floatingVoluntary Retirement Scheme (VRS) in the Governmentcompanies and corporations. The Corporation introducedthe VRS (Phase-I) on 1.6.1995. In the light of thesaid Scheme the Corporation issued a circular on4.7.1997 inviting applications from the employees, whowere eligible under the Scheme. In response to thesame 416 employees submitted their options seekingvoluntary retirement. The Corporation accepted theiroptions on 18.10.1997 treating 31.10.1997 as cut offdate for all purposes of VRS. The funds, for givingbenefits under the Scheme to the employees, were madeavailable to the Corporation by the State Governmentduring the first week of November, 1997. Theemployees, whose options had been accepted, wererelieved from service on 15.11.1997. As per the Schemeoffered, the employees were entitled to three monthspay in lie of notice. The cut off date was fixed as31.10.1997. The employees had worked 15 days beyondthe cut off date and earned salary for the period.Hence they were given two months and 15 days notice payin addition to the 15 days salary. On 1.10.1997 theState Government issued a clarification stating, "inthe circumstances where the management takes time totake a decision about the acceptance of the applicationof the employee and allow the notice period to lapseor the individual concerned has drawn all salary duringthe notice period, in these cases notice period paywould not be admissible as the individual has alreadydrawn salaries during the notice period." 2. The Corporation issued another VRS (Phase II) on12.12.1997 seeking options from the employees. 212employees, including respondents 1 to 32 in thisappeal, submitted their options for voluntaryretirement. The options were accepted fixing the cutoff date as 28.2.1998 for the purpose of calculatingthe VRS claims of the employees. Since the StateGovernment insisted for pre audit clearance by theDirector of Treasuries and Accounts to pay the claimsof the employees, it took some time and the funds wereprovided by the State Government only on 25.7.1998.The optees were relieved form service on 31.7.1998.They were permitted to continue in service beyond thenotice period of three months and they were given fullsalary and allowance up to 31.7.1998, i.e., for aperiod of five months (including period of notice pay)beyond the cut off date. They were not given noticepay while settling their claims under the Schemebecause 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 ofmandamus directing the Corporation to pay all servicebenefits as if they were in service up to 31.7.1998.The Corporation resisted the writ petition by filing adetailed counter affidavit contending, that the writpetitioners were not entitled for any relief. Thelearned single Judge of the High Court allowed the writpetition and directed the Corporation to pay threemonths notice pay treating the cut off date as31.7.1998 though specific prayer was not made in thewrit petition to this effect. The Corporation was alsodirected to calculate the terminal benefits of theoptees as if they were continued in service till31.7.1998 notwithstanding the cut off date fixed was28.2.1998. Aggrieved by this order of the learnedsingle Judge the appellants filed writ appeal No. 633of 1999 before the Division Bench of the High Court.The same was dismissed by the Division Bench holdingthat the action of the Corporation in not giving noticepay to the employees covered under the second phase ofVRS was discriminatory and violative of Article 14 ofthe Constitution of India as such benefit was given tothe employees covered under the first phase of the VRS.Under these circumstances the appellants have called inquestion the validity and correctness of the impugnedjudgment and order of the Division Bench of the HighCourt affirming the order of the learned single Judge. 4. Mr. L. Nageshwara Rao, learned senior counsel forthe appellants - Corporation, urged that the High Courtwas not right in holding that the employees wereentitled to get notice pay even though they werecontinued in service having drawn full salary andallowances beyond the stipulated notice period; theHigh Court was also not justified in directing theCorporation to treat two sets of optees of VRS PhaseI and Phase II, similarly when they were governed bydistinct and different sets of guidelines andconditions; that the terminal benefits to which theemployees were entitled could be calculated as on andup to the cut off date of 28.2.1998; once the optionseeking voluntary retirement were accepted withreference to a cut off date the employees were notentitled to claim terminal benefits beyond that date.According to the learned counsel the employees werecontinued in service beyond 28.2.1998 because of thecondition that they could not be relieved from serviceseven after the cut off date until they were paid theamount due to them as per VRS; they were paid salaryand other allowances even after the cut off date tillthe date on which they were actually relieved fromservice after making the payment; that period between1.3.1998 and 31.7.1998 could not be taken intoconsideration for the purpose of calculating theterminal benefits as per the VRS. 5. In opposition the learned counsel representing therespondents in their arguments supported the impugnedjudgment and order. They reiterated the submissionsthat were made before the High Court. 6. The learned counsel for the parties took usthrough the relevant portions of various documents onwhich they placed reliance. 7. To resolve the controversies that arise forconsideration in this appeal, it becomes necessary tolook at the guidelines, the VRS and circulars issued bythe Corporation seeking the options of the employeesfor voluntary retirement. The claims of the partiesare to be examined in the light of these documents asbetween them. Annexure P-1 dated 1.6.1995 is acircular issued by the Corporation in which it isstated that the Management is pleased to issue aVoluntary Retirement Scheme for employees of theCorporation and the Scheme will be known as "APSIDCEmployees Voluntary Retirement Scheme 1995". Therelevant clauses, which have bearing on thecontroversies to be resolved reads:- "c) For calculation of VRS Ex-gratia, as well as reckoning eligibility, the date of acceptance of theapplication will be taken intoconsideration. Any increase in thesalary after the cut-off point/datecannot be taken into consideration. However, for calculating thecompensation for "Remaining periodof service" wherever applicable, no compensation shall be paid forthe period for which the salary hasalready been drawn by the employeeafter submission of VRSapplication. d) The VRS option exercised is finalas far as employee is concerned. e) There shall be no separate noticeeither for the employee or theCorporation. In terms of serviceconditions mentioned in the offerof appointment/service rules/S.R.S. XXX XXX XXX (SIC) The payments that are due from theCorporation under the scheme shallbe released to the concerned on thedate of relief subject to receiptof funds from Government." Under the Scheme the Vice Chairman and ManagingDirector shall have power to amend, modify, alter orwithdraw or extend the period of operation of theScheme at any time either in whole or in part, at hisdiscretion, if the circumstances so warrant. 8. Annexure P-2 is circular dated 4.7.1997, issued bythe Corporation referring to Annexure P-1 dated1/6/1995 and other circulars inviting applications fromthe employees, who were eligible and willing to acceptVRS to apply in the prescribed form. By memo dated1.10.1997 (Annexure P-3) Government of Andhra Pradeshissued amendment to the Voluntary Retirement Schemeguidelines, issued in the memo No. 1038/PE.I/A2/94-4dated 23.1.1996. The amendment reads:- 1. (a) In the said Memo, for theexisting Clause 6(a)(iv) thefollowing shall be substituted,namely:- "IV one month's/three months'notice pay (as per the conditionsof service applicable) If an application of an employeeopting for Voluntary Retirement isaccepted instantaneously andpayment is arranged by themanagement on the same day, theconcerned individual would beentitled to payment of ex-gratiaalone wit the notice period pay.It is however clarified thatpayment of ex-gratia for servicerendered or left over service(whichever is less) as well as theamount payable for the noticeperiod should not exceed the basicpay plus D.A. that would have beenpaid to the employees who haveopted for Voluntary RetirementScheme till the date of thissuperannuation. In the circumstances where theManagement takes time to take adecision about the acceptance of anapplication submitted by theemployee for Voluntary RetirementScheme; and allows the noticeperiod to lapse or the individualconcerned has drawn full salaryduring the notice period served byhim, in these cases notice periodmay would not be admissible as theindividual has already drawn thesalary during the notice period." 9. This amendment came into force from the date of issueof memo itself, i.e., from 1.10.1997. In this appeal we are concerned with respondents 1to 32 falling under VRS phase III. 10. In the light of the contentions urged two pointsarise for consideration - (1) whether the terminalbenefits and financial package available under theScheme are to be calculated up to the cut off datefixed for accepting the applications of the employees,who opted for voluntary retirement or they should becalculated up to the actual date of relieving tem fromservice, and (2) whether the respondents were entitledfor notice pay of three months. 11. In Clause (c) of Annexure P-1, extracted above, itis expressly and clearly stated that the date ofacceptance of the applications of the employees seekingvoluntary retirement under the Scheme shall be the datefor calculation of VRS ex-gratia, as well as forreckoning eligibility. Added to this it is also madeclear that any increase in the salary after the cut offpoint/date cannot be taken into consideration. It isalso stated that for calculating the compensation for"remaining period of service" wherever applicable nocompensation shall be paid for the period for which thesalary has already been drawn by the employees aftersubmission of VRS applications. Clause (j) of theAnnexure states that the payments that are due from theCorporation under the Scheme shall be released to theconcerned on the date of relieving subject to receiptof funds from the Government. This clause, in ourview, has no bearing as far as the cut off or effectivedata is concerned for the purpose of calculating theterminal benefits including VRS ex-gratia and otherbenefits available under the VRS, to which an employeeis entitled, particularly so, when in Clause (c), asalready stated above, it is mentioned that forcalculation of VRS ex-gratia as well as reckoning itseligibility the date of acceptance of applications willbe taken into consideration. Clauses (c) and (i) aremeant to serve different purposes. One is for thepurpose of calculation of the benefits in terms ofmoney under the VRS and the other is to see that theemployee is not sent out without such payment. If thathappens it will lead to a great hardship to an employeewithout any financial support to carry on life. It isfor that reason Clause (i) appears to have beenincorporated so that an employee is not renderedjobless. The payments that are due to be made by theCorporation under the Scheme depended upon the releaseof the funds by the Government. If some time is takenin this process even after acceptance of the voluntaryretirement application, an employee is not relievedfrom service, he is to be paid salary and allowancesfrom the date of acceptance of voluntary retirementapplication/cut off date till he is actually relievedfrom the service. The employee may continue in servicein the interregnum by virtue of Clause (i) but thatcannot alter the date on which the benefits that weredue to an employee under the VRS to be calculated.Clause (c) itself indicates that any increase in salaryafter the cut off point/date cannot be taken intoconsideration for the purpose of calculation ofpayments to which an employee is entitled under theVRS. It is further made clear that for remainingperiod of service, wherever applicable, no compensationshall be paid for the period for which the salary hasalready been drawn by the employee after submission ofapplication for voluntary retirement. 12. This being the position both learned single Judgeand the Division Bench of the High Court were not rightin taking a contrary view that the benefits availableunder the Scheme and terminal benefits should bereckoned and calculated as on the date of actualrelieving the employee notwithstanding the cut offdate mentioned by the Corporation and accepted by theemployees. An employee even after accepting hisapplication could not be relieved unless entire amountto which he was entitled under the Scheme was paid.Such payment depended on making funds available by theState Government. All employees who accepted VRS couldbe relieved at a time or batch by batch depending onavailability of funds. Further funds may be madeavailable early or late. If the argument of therespondent that relieving date should be taken aseffective date for calculating terminal benefits andfinancial package under VRS, the dates may befluctuating depending on availability of funds. Henceit is not possible to accept this argument. When theemployees have opted for VRS on their own without anycompulsion knowing fully well about the Scheme, guidelines and circulars governing the same, it is notopen to them to make any claim contrary to the termsaccepted. It is matter of contract between theCorporation and the employees. It is not for thecourts to re-write the terms of the contract, whichwere clear to the contracting parties, as indicated inthe guidelines and circulars governing them under whichVoluntary Retirement Schemes floated. 13. In the circumstances we are of the view that theterminal benefits and financial package available underthe Scheme are to be calculated up to the cut off datefixed for accepting the application of the employeesand not up to the date of their actual relieving fromservice. Hence the relevant date for the purpose ofcalculating of terminal benefits and benefits of VRS tothe respondents was 28.2.1998 and not 31.7.1998. 14. As per Clause (e) of Annexure P-1 it is madeabundantly clear that there shall be no separate noticeeither for the employee or Corporation in terms ofservice conditions mentioned in the offer ofappointment/service rules/S.R.S. As per Annexure P-3Memo dated 1.10.1997 Government of Andhra Pradeshissued amendment to the Voluntary Retirement SchemeGuidelines contained in the Memo dated 23.1.1996 andthis amendment came into force with immediate effect.As per the amendment, extracted above, if anapplication of an employee opting for voluntaryretirement is accepted instantaneously and the paymentis arranged by the Management on the same day theconcerned individual would be entitled to payment ofex-gratia alone with the notice period pay. It is alsoclarified that in the circumstances where theManagement takes time to take a decision about theacceptance of an application submitted by the employeefor the VRS and allows the notice period to lapse orthe individual concerned has drawn full salary duringthe notice period served by him, notice period paywould not be admissible as the individual has drawn thesalary during the notice period. 15. In the present case admittedly the cut off datefixed was 28.2.1988, which is not disputed. Thecontention was that since the employees continued to bein service till 31.7.1998, they were entitled to theretrial benefits and the benefits available under theVRS as on 31.7.1998, the date on which they wereactually relieved. While discussing first point wehave clarified the position in this regard. As perClause (e) of Annexure P-1 no separate notice wasrequired to be issued in terms of service conditionsmentioned in the offer of appointment/servicerules/S.R.S. But once a cut off date was fixed for thepurpose of calculating the benefits under the VRS andthereafter an employee is continued in service tosatisfy Clause (i) of Annexure P-1 and if that periodhappens to be three months or more, that itself shallbe treated as notice period. in that case he shall notbe entitled for notice period pay again as is clearfrom the Memo dated 1.10.1997 (Annexure P-3), on theground that an employee having drawn full salary duringthe notice period although no separate notice wasrequired to be given, would not be entitled for pay forthe notice period. Even while dealing with the casesof VRS Phase I, the employees were given notice pay fortwo months 15 days and salary for 15 days. In thosecases the Corporation had treated the cut off date as31.10.1997 but the employees were actually relievedfrom service on 15.11.1997, as the funds were not madeavailable immediately. It clearly shows that for theperiod for which the employees even under VRS firstphase worked for 15 days after the cut off date werenot given notice pay for full three months. In thepresent case the cut off date was 28.2.1998 but therespondents were actually relieved from service on31.7.1998. Thus they worked for a period of fivemonths after the cut off date for which they had drawnsalary. Out of these five months three months would beadjusted towards notice pay as in the VRS Phase I only15 days were adjusted as notice pay as those employeeshad worked only for 15 days beyond the cut off date.In the impugned judgment the Division Bench held thatthe Corporation could not discriminate between theemployees of VRS Phase I and VRS Phase II. We fail tosee how there was any discrimination. Unfortunately, the Division Bench of the High Court did not examinethe issues that arose for consideration keeping in mindthe relevant clauses, guidelines and specific termscontained in VRS including the amendment to theguidelines. Rights and benefits available to theemployee under a particular VRS ought to be examinedin the light of the specific terms and conditionsgoverning them. Since this has not been done theDivision Bench committed an error in recording itsfindings. On the other hand, there appears to havebeen consistency in the stand of the Corporation.Added to this the amendment as per Annexure P-3, reference to which has already been made above, justified the stand of the appellants for the reasonsthat no separate notice was required to be given and ifan employee had drawn the salary during the noticeperiod, he would not be entitled to claim pay fornotice period again. In this view we answer the point No.2 in the negative and against the respondents. 16. In the light of what is stated above, we are ofthe view that the judgment and orders of the learnedsingle Judge and of the Division Bench of the High Courtcannot be sustained. Hence they are set asideand the appeal is allowed with no order as to costs. Civil Appeal Nos. 4067-4069 of 2001 and Civil AppealNos. 2159-2160 of 2001 17. In view of our conclusions arrived at in CivilAppeal No. 5638 of 1999, these appeals also areentitled to succeed. We may also mention that therespondent in Civil Appeal No. 4067 of 2001 is governedby VRS Phase II and the respondents In Civil AppealNos. 4068-4069 of 2001 and 2159-60 of 2001 aregoverned by VRS Phase III. It may be added that theterms and conditions, which are applicable to VRS PhaseII are similar to VRS Phase III also, as the mattersare identical. In this view these appeals are alsoallowed. The impugned judgment and orders of the HighCourt are set aside. No costs. CIVIL APPEAL NOS. 4658-4659 OF 2001 18. These appeals are directed against the commonorder made in W.P. 15703 of 1999 and W.P. No. 15742 of1999. Respondent No. 1, Vijay Kumar, in C.A. No. 4658of 2001 and respondent No. 1, A. Simhadri, in C.A. No.4659 of 2001 (hereinafter referred to as 'respondent')filed writ petition Nos. 15703 of 1999 and 15742 of1999 in the High Court seeking direction to theappellant-Corporation to continue them in service tillthey attain superannuation. Both are covered by VRSPhase-III. The Corporation fixed 31.10.1998 as cut offdate for VRS Phase-III. Respondent Vijay Kumar andA. Simhadri filed applications seeking voluntaryretirement under the said Scheme on 31.10.1998 and10.10.1998 respectively. Corporation accepted theiroptions on 24.11.1998 and 27.10.1988, which were alsoacknowledged by the respondents on 26.11.1998 and2.11.1998. Thereafter, they applied for withdrawal ofthe option given for VRS on 8.1.1999 and 26.2.1999respectively. These respondents could not be relievedfrom service along with large number of other employeeswho were relieved on 31.7.1999 under VRS Phase-IIIbecause of the interim order granted by the High Courtin the writ petitions filed by them. The DivisionBench of the High Court, by the impugned order, allowedthe writ petitions and directed the Corporation tocontinue their services till their attaining the age ofsuperannuation. In doing so, the High Court followedthe decisions of this Court in Balram Gupta v. Unionof India and Anr., , J.N. Srivastava v.Union of India and Anr. and ShambhuMuaraj Sinha v. Project & Development India and Anr., . The High Court was of the viewthat the respondents had filed their withdrawalapplications on 8.1.1999 and 26.2.1999 and had thebenefit of interim directions to continue in servicegranted by the High Court on 30.7.1999 while they wereto be relieved on 31.7.1999 and the result was thatthey were still in service on that date. The HighCourt further observed that these respondents had madethe applications for withdrawal before the effectivedate i.e. 31.7.1999 and they having not accepted themonetary benefits under the VRS Scheme, could withdrawtheir applications opting for VRS. In this view, thewrit petitions of these respondents were allowed.Before us, the learned counsel on both sides relied onthe decision of this Court in Bank of India and Ors. v.O.P. Swarnakar and Ors., and few otherdecisions. The decisions cited on behalf of therespondents do not help them. Unlike in those decisionsthese respondents filed application offering to takevoluntary retirement under the Scheme; theirapplications were accepted by the Corporation whichwere acknowledged by these respondents; they maderepresentations for withdrawal from the VRS Schemeseveral days after the Corporation accepted theirapplications made seeking voluntary retirement; merelybecause they could not be relieved in view of theinterim order passed by the High Court in the writpetitions and that they could not be relievedimmediately after the cut off date for want of funds tobe received from the Government by the Corporation,they could not take away the result or escapeconsequence of the acceptance of their voluntaryretirement by the Corporation. In other words,question of withdrawal of their applications made forseeking voluntary retirement after their acceptance didnot arise and they could not be permitted to do so inlaw. It is fairly settled now that the voluntaryretirement once accepted in terms of the Scheme orrules, as the case may be, cannot be withdrawn. Inthese appeals from the facts it is clear that theapplications of the respondents opting for voluntaryretirement under the Scheme were accepted and even theacceptance was communicated to them. Thereafter, theyfiled the writ petitions. Hence the High Court was notright in allowing the writ petitions holding that theyapplied for withdrawal before the effective dateconsidering the date of relieving the employees as theeffective date. In the light of the discussions madein Civil Appeal No. 5638 of 1999 the High Court, in ourview, was wrong in treating 31.7.1999 as an effectivedate. The decisions relied on by the respondentsbefore the High Court or in this Court on facts do nothelp them. Moreover, position is to be examined on thefacts, terms of the VRS and circumstances governing aparticular case of withdrawal offer made seekingvoluntary retirement after its due acceptance. 19. In view of this legal position, the impugned ordercannot be sustained. We would have set aside the samebut for the peculiar facts and circumstances of thecase stated hereinafter. These respondents thoughsought for voluntary retirement under the Scheme couldnot be relieved even on 31.7.1999 alongwith largenumber of other employees because of the interim orderpassed by the High Court in the writ petitions filed bythem. Consequently, they continued in service. Evenin the SLPs filed by the Corporation, though leave wasgranted, interim order was specifically refused as isclear from the order dated 23.7.2001 passed by thisCourt in these appeals, which reads:- "leave granted. Tag with C.A. Nos.4067-4069/2001. No stay." 20. It appears to us that the respondents havecontinued in service; may be they have attainedsuperannuation by now or they are likely to attainsuperannuation in near future; at any rate, they havingbeen continued for all these years and taking note ofthe peculiar facts and circumstances of these cases, wedo not think it is just and appropriate to disturb theimpugned order under Article 136 of the Constitution ofIndia in the light of what is stated above.Consequently, these appeals are disposed of accordinglybut with no order as to costs.