IFCI LTD versus SANJAY BEHARI & ORS.

IFCI LTD

SANJAY BEHARI & ORS.(Civil Appeal No. 6995 of 2019)

SEPTEMBER 17, 2019

[SANJAY KISHAN KAUL AND K. M. JOSEPH, JJ.]

Service law: Voluntary Retirement Scheme – Benefit of – Onfacts, few employees of IFCI availed the benefit under the VRS-2008 – Said ex-employees seeking entitlement to enhanced pensionon the basis of subsequent revision of pay-scales, which was givenfrom the time period when they were still employees of the IFCI –Writ petition by ex-employee dismissed by the Single Judge of theHigh Court – However, said order set aside by the Division Bench –On appeal, held: Any scheme for voluntary retirement is packageby itself – One cannot, look to other voluntary retirement schemes,or other rules and regulations for the said purpose – If the RBIpay-scales had been adopted by IFCI with retrospective effect, theex-employees could never have had claim as their chapter wasclosed – Merely because, for existing employees, RBI pay-scaleshad been applied, albeit retrospectively, without past benefits, thatcannot be ground to start getting pension on the basis of acalculation based on those revised pay-scales – Seeking benefitsother than the VRS scheme is misadventure and thus, is rejected –IFCI Staff Regulations, 1974 – Regulation 33.

Allowing the appeal, the Court

HELD: 1.1 reading of the clauses of the VoluntaryRetirementScheme 2008 shows that the Scheme envisaged afull and final settlement of all claims, making it clear that benefitsunder earlier Schemes would not be applicable. However, pensionunder IFCI Pension Regulations was to be applicable. It has beenspecifically provided in clause 9.12 that there would be no revisionin the voluntary retirement amount on account of pay revision orany other account in future. This clause was specifically absent inthe 2001 Scheme, but pay revision was subsequently made

Aapplicable vide Circular dated 4.1.2001. The endeavour to applythat Circular in the 2003-2004 VRS was not successful. It appearsthat in order to avoid any further ambiguity on this account, thisclause was inserted. [Para 13] [579-G-H; 580-A-B]

1.2 Any scheme for voluntary retirement is package byBitself. One cannot, thus, look to other voluntary retirementschemes, or other rules and regulations for the said purpose.There can be no quibble with this fundamental principle. It is notappropriate to add or subtract from the Scheme, nor can anyconcessions be given contrary to the Scheme, or if they are notprovided for under the Scheme. What is to be seen are the clausesCof the scheme under which voluntary retirement has been takenand the terms of the scheme must be strictly followed. [Para 21,22][582-G-H; 583-A-B]

National Insurance Special Voluntary Retired/RetiredEmployees Association & Anr. v. United India InsuranceDCo. Ltd. & Anr.(2018) 18 SCC 186 – relied on.1.3 The very rationale of introducing scheme for voluntaryretirement, i.e., to reduce surplus staff and to bring in financialefficiency. It is referred to as the ‘Golden Handshake’. Ex gratiaamounts are paid, not for doing any work or rendering any service,Ebut in lieu of employees leaving services of the company andforegoing any further claims or rights in the same. It is optional,not compulsory. It is take it or leave it situation. Thus, anyoneavailing of VRS does so with his eyes wide open. On havingavailed of the benefits under the scheme, if there are futureFchanges, which may give any of the monetary benefits, the samecannot be read into the scheme. This would defeat the verypurpose of having VRS, i.e., to bring in financial efficiency, as itwould not be possible that despite having paid the amounts, theorganization can be lumped with further financial liability arisingfrom re-thoughts by such persons, who have already availed ofGthe VRS. The VRS cannot be frustrated in this manner. [Para 24][584-B-E]

A.K. Bindal v. Union of India(2003) 5 SCC 163 : [2003]3 SCR 928 – relied on.

1.4 The benefits under VRS-2008 are many, in terms of thefinancial package. Pension is only one of the items of that package,while calculating the amounts as per clause 7.2 of the Scheme.There is no ambiguity left by the propounders of the Schemewhile setting out the prohibitive clause against any furthercompensation, in clause 9.4, or while stating that no revision shallbe made in the voluntary retirement amount on account of payrevision, as per clause 9.12. The latter leaves no manner of doubt.The plea of the private respondents that there were certainaspects on which the Scheme was nebulous and, thus, the benefitson those accounts must be available to the respondents is, hence,without any basis. [Para 25] [584-E-G]

1.5 The complete substratum of the reasoning of theimpugned order, and for that matter, the arguments of the counselfor the private respondents, supporting the reasoning, is basedon the presumption that VRS-2001 (in operation from 14.12.2000to 15.1.2001) was an open ended scheme in character. This is afallacious approach for the reason that every scheme for voluntaryretirement really has time frame. Not only that, VRS-2001 wasfollowed by fresh Scheme in 2003-2004, and thereafter in 2008.The terms of the Schemes were different. While the 2001 schemeinitially, in clause 8.7, provided for full and final settlement ofclaims, it is as per clarification issued on 4.1.2001 that the benefitwas extended, to provide for future pay revisions. This was sofar as the 2001 Scheme is concerned. Even the 2003-2004 Schemedid not provide such clarification, and the endeavour to take upthis issue, through the resolution of the Rajya Sabha Committeewas not successful as the IFCI stuck by its original plan. VRS-2008 left no manner of doubt, and possibly, the IFCI was morecautious to, again and again, emphasise through different clausesthat it would not be called upon to incur any other financial liability.[Para 28] [585-E-G; 586-A]

1.6 No doubt the Pension Regulations were specificallyincluded as benefit under VRS-2008. However, the PensionRegulations and the VRS have to be read harmoniously and, inthe context of its inclusion, along with the other terms of the

AVRS. In the Pension Regulations, no doubt the date of retirementincludes the date on which the employee voluntarily retires, butthat would mean that the concerned employee would be deemedto have retired on the date he terminates his relationship withthe IFCI. As to how emoluments have to be calculated, it is the

average emoluments of the last ten (10) months of his service.BThis would naturally mean the emoluments received just prior tothe termination of the relationship of employment. As regardsIFCI Regulations, 1974, more specifically Regulation 33, in thecontext of retirement under the said Regulations taking theirmeaning from the 1974 Regulations, it refers to an option with anCemployee, on attaining 50 years of age, to retire any time by givingthe Corporation three months’ notice in writing. [Para 29][586-B-D]

1.7 Private respondents cannot claim parity with such peoplewho had retired after full length of service and did not terminateDtheir relationship. As regards the position qua persons who mayhave retired on the same date, on attaining the age ofsuperannuation, as the persons who sought termination ofrelationship under VRS-2008 with all the benefits, such personshave not been paid the benefit of revised pension for the pastperiod. [Para 31] [586-F-G]

1.8 Pension is for past services. However, it was not thefull tenure, but the tenure was terminated by mutual consent,before it would have reached the end, on superannuation. To grantthe private respondents the benefit of pay revision,retrospectively, and that to be taken into account for grant ofFfuture pension would be bounty which cannot be given to theseprivate respondents. The benefit is meant for persons who areactually in service, i.e., serving employees. The submission ofthe respondents that the CTC structure was, in fact, morebeneficial and, thus, the benefits were not given retrospectively,Gof the RBI 2007 pay-scales, made applicable from 1.11.2013,would be of not much use for the reason that even the CTCstructure was introduced after the termination of relationshipbetween IFCI and the private respondent. [Para 32] [586-G-H;587-A-B]

1.9 There was an inappropriate comparison with SB, whowas the serving employee, and opted for continuation of RBIpay-scales, in view of her special position, being visuallychallenged. She was the sole person in this category and thus,benefits were given retrospectively to her. She was not an opteeof the VRS. [Para 33] [587-C]

1.10 The employees who opt for voluntary retirement makea planning for future and take into consideration all itsimplications. At the time of giving the option, they know wherethey stand and they cannot get additional benefits other thanmentioned in the Scheme. They prepare themselves to contractout of the jural relationship and are bound by their own acts.”[Para 34] [587-E]

1.11 The plea of delay is second battle which has beenwaged against the IFCI, claiming to be on different cause ofaction. The principle as to why no other benefit, other than underthe VRS-2008 should be made available, remains the same. Evenif it is accepted that their knowledge was derived only in 2014,when for the first time they raised the issue, the same was rejectedpromptly by the appellant within few days. Continuingrepresentation on the same issue is really not of much use. Thereis gap of one and half years between the last representationand the sending of legal notice. This, by itself, could have beenfatal, but the private respondents must fail on multifariousgrounds. [Para 35] [587-F-G; 588-A]

1.12 If the RBI pay-scales had been adopted by IFCI withretrospective effect, the private respondents could never havehad claim as their chapter was closed. Merely because, forexisting employees, RBI pay-scales had been applied, albeitretrospectively, without past benefits, that cannot be ground tostart getting pension on the basis of calculation based on thoserevised pay-scales, on the reasoning that pension is continuingright for past services rendered. The very cut-off date forcalculation of pension, for the private respondents, was the dateof their termination of relationship, and the calculation of pensionunder the Pension Regulations also proceeds on the basis of the

Alast ten (10) months’ salary prior to that date. Thus, the endeavourby the private respondents is misadventure and has to berejected. The order of the Division Bench of the High Court isset aside. [Para 36, 37] [588-B-D]

P.P. Vaidya & Ors. v. IFCI Ltd. & Ors. SLP(C) No.B16364/2014;Bank of India v. K. Mohandas & Ors.(2009) 4 SCALE 576 ;D.S. Nakara v. Union of India(1983) 1 SCC 305 : [1983] 2 SCR 165 – referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6995Dof 2019.

From the Judgment and Order dated 17.01.2019 of the High Courtof Delhi at New Delhi in LPA No. 300 of 2017.

P. S. Narasimha, Sr. Adv.. P. B. A. Srinivasan, Avinash Mohapatra,ERahul G. Tanwani, Ms. Sindoora VNL, Parth Tandon, Ms. Aditi Tripathi,Amit K. Nain, Advs. for the Appellant.

Desh Ratan Nigam, Awanish Sinha, Advs. for the Respondents.

The Judgment of the Court was delivered by

FSANJAY KISHAN KAUL, J.

1. The celebration of independence of our country also came withmany challenges, including in the financial sector. The Industrial FinanceCorporation of India Ltd. (for short ‘IFCI’) was the first financialcorporation set up soon thereafter, in 1948, with the object of providingfor the industrial and infrastructural needs of the new born India and toGenable the growth of the economy through medium and long term finance.Passage of time and financial & infrastructural changes resulted in thetransformation of IFCI from statutory corporation to company underthe Indian Companies Act, 1956, in the year 1993. The status of this

institution, at present, is of Government of India Undertaking and aNon-Banking Financial Company, primarily engaged in corporate lending.

2. Changing needs found the IFCI with having, possibly, an excessnumber of employees at various levels. In order to shed the flab, therehave been voluntary retirement schemes introduced, from time to time.The present dispute pertains to the Voluntary Retirement Scheme (forshort ‘VRS’) of 2008. The contesting respondents in the present caseare thirty-one (31) employees of IFCI who availed of the VRS-2008 on1.2.2008, and were accordingly relieved from duty on 25.2.2008. Thereis no dispute that all the benefits under the VRS-2008 were made availableto these employees.

3. The issue before us is limited in its character as it arises from aclaim by these employees that they would be entitled to an enhancedpension on the basis of subsequent revision of pay-scales, which wasgiven retrospective effect, with effect from the time period when therespondents were still employees of the IFCI.

4. In the context of the aforesaid nature of dispute, it would berelevant to note that the IFCI notified pension scheme in the year 1993for its employees, under the Industrial Finance Corporation of IndiaLimited Pension Regulations, 1993 (hereinafter referred to as the ‘saidRegulations’). The said Regulations came into effect from 1.11.1993.It would be appropriate to refer to some of the clauses of the saidRegulations, which are germane for the determination of the controversybefore us.

5. Regulation 2 is the Definition clause. In terms of sub-clause(6) ‘date of retirement’ is defined while ‘retirement’ is defined underclause (11). These clauses read as under:

“2. Definitions

In these Regulations, unless the context otherwise requires:

(6) ‘Date of retirement’ means the date on which an employeeattains the age of superannuation or he is retired by the Corporationor the date on which the employee voluntarily retires;”

576SUPREME COURT REPORTS

[2019] 12 S.C.R.

A“(11) ‘Retirement’ means retirement in terms of Regulation 33 ofthe Staff Regulations and other instructions issued by theCorporation under settlement/award;”

6. What is relevant to note is that voluntary retirement is includedin the definition of the ‘date of retirement’ and ‘retirement’, which inBturn is defined with reference to Regulation 33 of the IFCI StaffRegulations, 1974 (hereinafter referred to as the ‘Staff Regulations’)and other instructions issued by the IFCI. Thus, turning to the StaffRegulations, Regulation 33 deals with superannuation and retirement.Regulation 33(2) was inserted by Administrative Circular No.16 of 1992dated 14.8.1992, w.e.f. 20.6.1992. The relevant portion of clause (2) ofCRegulation 33 of IFCI Staff Regulations is extracted as under:

“33. Superannuation and Retirement

….….….….….

(2) (i) an employee who has attained the age of 50 years shallDhave an option to retire anytime thereafter by giving to theCorporation three months notice in writing.

xxxxxxxxxxxxxxxxxxxx”

“(ii) “Without prejudice to sub-Regulation (2)(i), an employeegoverned by the IFCI Pension Regulations, 1993, may voluntarilyEretire at any time after he has completed 20 years of qualifyingservice in the Corporation as defined in the IFCI PensionRegulations, 1993 (even though he has not attained the age of 50years), after giving to the Competent Authority three months’ noticein writing.

Fxxxxxxxxxxxxxxxxxxxx”

7. It is an admitted position that the private respondents, whowere the employees, had completed 20 years of service, before seekingvoluntary retirement under the VRS-2008. They were, thus, entitled toseek voluntary retirement under the aforesaid Regulations. However,Gthese private respondents actually availed of the VRS-2008, which gavethem many more benefits and thus, the said Regulations would have tobe read in the context of the terms of the Scheme itself.

8. In view of the support sought to be derived by the privaterespondents from the earlier VRS-2001, it becomes necessary to dealH

with the relevant clauses of the said Scheme insofar as relied upon bythe private respondents. Clause 8.7 of the said Scheme reads as under:

“8.7 The benefits payable under this Scheme shall be in full andfinal settlement of all claims of whatsoever nature, whether arisingunder the Scheme or otherwise to the officer (or to his nominee incase of death). An officer who voluntarily retired under thisScheme will not have any claim against the IFCI of whatsoevernature and no demand or dispute will be raised by him or on hisbehalf, whether for re-employment or compensation or backwages.”

9. The aforesaid clause, thus, puts an embargo on any furtherclaim being raised against the IFCI. However, vide clarification dated4.1.2001, the benefit of future pay revisions was made available to theemployees who availed of the Scheme. The said clarification has clause2(i), which reads as under:

“2. Certain queries have been received relating to the said Scheme.Accordingly, the following clarifications are issued for informationof all concerned:-

(i) In regard to para 8.7 of the Scheme, it is clarified that theofficers, opting for voluntary retirement under the above Scheme,will be entitled to receive the benefit of revision in pay scales inrespect of arrears of pay and allowances, gratuity, leaveencashment, pension/Provident Fund, pursuant to pay revision.However, there will be no change in the voluntary retirementamount, in terms of para 7.5 of the Scheme.

xxxxxxxxxxxxxxxxxxxx”

10. As factual narrative, it may be noted that there was also aVRS-2003-2004. There was no such clarification making applicable payrevisions, as was done for the VRS-2001. It appears that the retireesapproached the issue through political representations, and the matterwas taken up by the Rajya Sabha Committee, which referred to theCircular dated 4.1.2001 issued qua pay revisions in the context of theVRS-2001, and the Committee recommended the Ministry of Financemay impress upon IFCI, through its nominees in its Board of Directors,for revisions of pay-scales similarly. However, this was not acceptedand no such pay revision took place.

A11. The respondents, along with other employees, prior to theirseeking VRS, got the benefit of the revised pay-scales of 2002 of theReserve Bank of India (for short ‘RBI’), when these scales wereimplemented w.e.f. 1.4.2006 on 22.11.2006. The benefit of even theserevised pay-scales, thus, was not made available to the persons whoavailed of the VRS implemented in the year 2003-2004. In November,B2007, the RBI formulated another new set of pay-scales which were,however, not immediately implemented by the IFCI.

12. In the next endeavour of such VRS, the VRS-2008 was floatedvide H.R. Circular No.1 of 2008, on 1.2.2008 with the avowed object ofachieving “optimum manpower utilization in the IFCI and overall reductionCin the existing strength of the employees.” The eligibility, as per clause5 required completion of ten (10) years of service in the IFCI or 40years of age. The benefits under the Scheme were set out in clause 7 ofthe Scheme, while the general conditions were set out in clause 9. Therelevant clauses are reproduced hereinunder:D“7. BENEFITS UNDER THE SCHEME

An employee whose application for voluntary retirement isaccepted, shall be entitled to the following:-

7.1 The balance in Provident Fund Account of the employee,payable as per the IFCI Employees’ Provident Fund Regulations.

7.2 (i) Pension as per the IFCI Pension Regulations to thoseemployees who have already opted for pension.

(ii) Pension as per the IFCI Pension Regulations to employees (incase they are not pension optees) who opt for VRS and seekFpensionary benefits in lieu of contributory Provident Fund.”

“7.5 Voluntary retirement amount equivalent to two months’ salaryfor each completed year of service rendered or the monthly salaryat the time of relieving on voluntary retirement multiplied by thebalance complete calendar months of service left or Rs.15 lakhswhichever is less. Service rendered by an employee prior to joiningthe service of the IFCI shall not be reckoned for the purpose ofcalculating the voluntary retirement amount (Fraction of serviceof six months and above will be reckoned as one year and fraction

of service of less than six months will be ignored for the purposeof calculating years of service rendered in IFCI).”

“9. GENERAL CONDITIONS”

….….….….….

“9.4 The benefits payable under the Scheme shall be in full andfinal settlement of all claims whatsoever, whether arising underthe Scheme or otherwise to the employee (or to his nominee incase of death). An employee, who is voluntarily retired under theScheme, will not have any claim against the IFCI whatsoever andno demand or dispute will be raised by him or on his behalf whetherfor re-employment or compensation or back wages.

9.5 The Scheme shall not be construed as revision of any of theprevious retirement schemes of the IFCI and as such no claimfrom an employee who availed of the Voluntary Retirement underany of the earlier Voluntary Retirement Schemes shall beentertained.”

“9.11 An employee, availing voluntary retirement under the Scheme,and if entitled to pension under the IFCI Pension Regulations willbe eligible for pension from the day next to the date of his relievingfrom the service of IFCI. However, the benefit of increase inqualifying service by period not exceeding five years as providedin Regulation 25(2) of the Pension Regulations, will not be availableto such an employee.

9.12 There will be no revision in the Voluntary Retirement amounton account of pay revision or any other account in future.”

13. reading of the aforesaid clauses shows that the Schemeenvisaged full and final settlement of all claims, making it clear thatbenefits under earlier Schemes would not be applicable. However,pension under IFCI Pension Regulations was to be applicable. It hasbeen specifically provided in clause 9.12 that there would be no revisionin the voluntary retirement amount on account of pay revision or any

Aother account in future. This clause was specifically absent in the 2001Scheme, but pay revision was subsequently made applicable vide Circulardated 4.1.2001. The endeavour to apply that Circular in the 2003-2004VRS was not successful. It appears that in order to avoid any furtherambiguity on this account, this clause was inserted. Since the controversyrelates to the total benefits under VRS-2008, it would also be relevant toBreproduce sub-clause 3.4 (clause 3 being the ‘Definition’ clause), whichdefines “salary”, as this terminology has been used in clause 7. Sub-clause 3.4 reads as under:

“3. DEFINITIONS

CIn this scheme, unless the context otherwise requires:-

3.4 “Salary” shall mean Basic Pay + Stagnation Increments +Special Pay + Post Scale Special Pay + Personal Pay + AdditionalSpecial Pay + Dearness Allowance, as on the date of relieving ofDemployee.”

14. The private respondents who availed of the VRS-2008 alsosigned an undertaking, agreeing that they would not have further claimsor rights against the IFCI, except for payment of benefits under theScheme. Since all the employees were governed by the RBI pay-scalesErevised up to 1.11.2002 (applied to IFCI w.e.f. 1.4.2006), IFCIcommenced payment of pension to the private respondents,commensurate to the RBI pay-scales applicable to them. Needless toadd, all other retirement dues were also settled.

15. Soon thereafter, in August, 2008 itself, with the object ofFpromoting performance culture by linking rewards to the performanceof employees, IFCI introduced Cost to Company (for short ‘CTC’)pay structure by way of HR Circular No.9/2008. All the existingemployees were given an option to continue being governed by the RBIpay-scales, or opt for the more lucrative CTC structure, which was tobe made effective from 18.8.2008. non-response was to be treatedGas an affirmative one, to be governed by the new pay structureautomatically. This structure was possibly more lucrative as, except forone employee, all others opted for the CTC pay structure.

16. Insofar as that one employee was concerned, Ms. SweetyBhalla, she is stated to be visually challenged employee, and her requestH

was based on the fact that the CTC would not be beneficial to her. Wemay note that as per the IFCI, as set out in the rejoinder affidavit, therewas really no option but to move to CTC, but an exception was made inher case on account of her being visually challenged. Thus, in her case,the revised RBI pay-scales, w.e.f. 1.11.2007, were made available on23.9.2011, along with arrears. We may note another litigation, whichwas initiated by Mr. P.P. Vaidya and others, who had similarly retiredunder the VRS-2008. They filed writ petition, being WP(C) No.1319/2011, before the Delhi High Court, claiming certain benefits andincentives. This writ petition was dismissed on 18.7.2013. The LettersPatent Appeal was dismissed on 6.5.2014 and the Special Leave Petitionwas dismissed on 26.9.2014[1]. All these decisions were predicated onthe ground that there could not be any other benefits or incentives soughtto be derived by them in view of the clear provisions of the VRS-2008.

17. In November, 2013, IFCI came under the active control of theGovernment of India and, thus, sought to align its policies in accordancewith the practices in Public Sector Undertakings. Thus, IFCI, on13.7.2013, again modified its pay structure and decided to follow theRBI structure (as revised from 1.11.2007) in the matter of pay-scalesfor serving employees of the IFCI, thus, abandoning the CTC paystructure. This revised pay structure was made applicable videMemorandum dated 16.7.2013, and was implemented w.e.f. 1.11.2013.The IFCI has categorically affirmed that though this scale had comeinto being in the RBI in 2007, its benefits were available only prospectively,from 1.11.2013, and there were no arrears paid to the existing employees.We may add here itself that according to the private respondents thiswas so, as the CTC scales were more beneficial to the employees.

18. The beginning of the dispute is the respondents’ claim thatthey became aware of this change in pay-scale only in July, 2014, whenthey sent letter to the CEO of IFCI (the appellant herein), requestingfor the benefit of such pay revisions. This representation was promptlyrejected on 28.7.2014, by relying on clauses 9.4 and 9.12 of the VRS-2008. The respondents did not take any legal recourse, but sent anotherrepresentation in September, 2014, which was again responded to on17.11.2014, clarifying that the CTC structure was adopted from August,2008 to October, 2013, and thereafter due to policy change in 2013, the2007 RBI pay-scales were made applicable, but w.e.f. 1.11.2013, and

1 SLP(C) No.16364/2014 (P.P. Vaidya & Ors. v. IFCI Ltd. &Ors.)

Athat too for serving employees. There was pregnant silence for aboutone and half years, when legal notice was served by the privaterespondents, on 31.5.2016. This was, once again, refuted on 13.7.2017by IFCI, and it is soon thereafter that writ petition was filed before theDelhi High Court, seeking revision of the pay-scales, claiming similarbeneficial interpretation as provided to retirees under the VRS-2001,Band parity with Ms. Sweety Bhalla, who was still in employment as onthat date. The case of the appellant, however, was predicated on thebasis that VRS-2001 was an open ended Scheme, in light of clause 8.7read with the clarification dated 4.1.2001, while VRS-2008 was not anopen ended Scheme.C19. The claim of the private respondents did not find favour in thewrit proceedings, when the learned Single Judge dismissed the writpetition on 20.2.2017. The private respondent, aggrieved by the order ofdismissal, filed Letters Patent Appeal, which was allowed vide impugnedorder dated 17.1.2019. The impugned order seeks to draw comparisonsDwith the 2001 Scheme, the case of Ms. Sweety Bhalla, and the fact thatsince the revised pay-scales were made applicable from 2007, when theprivate respondents were still in service, the same ought to be applied tothem. The impugned order has relied on the principle that pension is abenefit of past services and thus, is continuing cause, and since, interms of the VRS-2008, the Pension Regulations had been specificallyEmade applicable, any revision of pay-scale, which has consequence onthe pension of existing employees should equally apply to employees likethe private respondents, who had taken the benefit of the VRS. Thefactum that all other benefits had been made available to them, or thatthe endeavour to get certain other benefits and incentives had failed in

Fthe earlier legal proceedings was distinguished on the basis that pensionhad to be considered under different parameter, and that the VRS-2001, insofar as pension was concerned, was an open ended Scheme.20. We have examined the submissions of the rival counsel forthe parties.G21. The principle ground for assailing the impugned order is thatany scheme for voluntary retirement is package by itself. One cannot,thus, look to other voluntary retirement schemes, or other rules andregulations for the said purpose.

22. In our view, there can be no quibble with this fundamentalHprinciple. In fact, we had the occasion to recently propound the legal

position in this behalf, in National Insurance Special Voluntary Retired/Retired Employees Association & Anr. v. United India InsuranceCo. Ltd. & Anr[2]. The view taken is that it is not appropriate to add orsubtract from the Scheme, nor can any concessions be given contrary tothe Scheme, or if they are not provided for under the Scheme. What isto be seen are the clauses of the scheme under which voluntary retirementhas been taken and the terms of the scheme must be strictly followed.This Court has observed as under:

“19. We have, thus, no hesitation in coming to the conclusion thatstatutory or contractual, such voluntary retirement schemes asthe SVRS-2004 Scheme have to be strictly adhered to, and thevery objective of having such schemes would be defeated, if partsof other schemes are sought to be imported into such voluntaryretirement schemes. What is offered by the employer is packageas contained in the schemes of voluntary retirement, and that alonewould be admissible.

20. The issue which arose in Manojbhai N. Shah [Manojbhai N.Shah v. Union of India, (2015) 4 SCC 482 : (2015) 2 SCC (L&S)55] was qua the revision of pay, with retrospective effect. Thatwas the only issue. That issue was decided against thebeneficiaries of the SVRS-2004 Scheme. If there are certainobservations made by that Bench while deciding so, qua aspectswhich are not forming the subject-matter of that dispute, the samecannot be read to amount to grant of relief/benefits, contrary tothe terms of the Scheme, and that too, in the absence of anyspecific directions.

22. It is, thus, abundantly clear that nothing more would be giventhan what is stated in the scheme, and for that matter, nothingless. If the employees avail of the benefit of such scheme withtheir eyes open, they cannot look here and there, under differentschemes, to see what other benefits can be achieved by them, byseeking to take advantage of the more beneficial schemes, whilesimultaneously enjoying the more beneficial aspects of the SVRS-2004 Scheme.”

A23. In the present case, VRS-2008 has received considerationright till the Supreme Court and attained finality on the issue of benefitsand incentives sought to be claimed beyond the Scheme, in P.P. Vaidya& Ors.[3]case. Interestingly, some of the respondents, apparently, arecommon between that case and the present case. Thus, not havingsucceeded on one aspect, another aspect is now sought to be agitated.B

24. We may usefully refer to the judgment in A.K. Bindal v. Unionof India[4], which set forth the very rationale of introducing scheme forvoluntary retirement, i.e., to reduce surplus staff and to bring in financialefficiency. It is in this context that it is referred to as the ‘GoldenHandshake’. Ex gratia amounts are paid, not for doing any work orCrendering any service, but in lieu of employees leaving services of thecompany and foregoing any further claims or rights in the same. It isoptional, not compulsory. It is take it or leave it situation. Thus, anyoneavailing of VRS does so with his eyes wide open. On having availedof the benefits under the scheme, if there are future changes, whichDmay give any of the monetary benefits, the same cannot be read into thescheme. This would defeat the very purpose of having VRS, i.e., tobring in financial efficiency, as it would not be possible that despite havingpaid the amounts, the organization can be lumped with further financialliability arising from re-thoughts by such persons, who have alreadyavailed of the VRS. The VRS cannot be frustrated in this manner.

25. We have already discussed the terms of the Scheme, whichare quite clear. The benefits under VRS-2008 are many, in terms of thefinancial package. Pension is only one of the items of that package,while calculating the amounts as per clause 7.2 of the Scheme. There isno ambiguity left by the propounders of the Scheme while setting out theFprohibitive clause against any further compensation, in clause 9.4, orwhile stating that no revision shall be made in the voluntary retirementamount on account of pay revision, as per clause 9.12. The latter, in ourmind, leaves no manner of doubt. The plea of the private respondentsthat there were certain aspects on which the Scheme was nebulous and,Gthus, the benefits on those accounts must be available to the respondents(Bank of India v. K. Mohandas & Ors.[5]) is, hence, without any basis.

3 (supra)

4 (2003) 5 SCC 163

5 (2009) 4 SCALE 576 (para 39)H

26. Learned counsel for the private respondents did endeavour toemphasise the nature of the pension by referring to the constitution Benchjudgment in D.S. Nakara v. Union of India[6], in para 46, which readsas under:

“46…Recall at this stage the method adopted when pay scalesare revised. Revised pay scales are introduced from certaindate. All existing employees are brought on to the revised scalesby adopting theory of fitments and increments for past service.In other words, benefit of revised scale is not limited to those whoenter service subsequent to the date fixed for introducing revisedscales but the benefit is extended to all those in service prior tothat date. This is just and fair. Now if pension as we view it, issome kind of retirement wages for past service, can it be deniedto those who retired earlier, revised retirement benefits beingavailable to future retirees only. Therefore, there is no substancein the contention that the court by its approach would be makingthe scheme retroactive, because it is implicit in theory of wages.”

27. It is trite to say that the aforesaid principle really applies to aretiree, and not to one who terminates his relationship with the employerearlier, often for greener pastures, and takes complete package ofvarious financial benefits, pension being only one of them.

28. The complete substratum of the reasoning of the impugnedorder, and for that matter, the arguments of the learned counsel for theprivate respondents, supporting the reasoning, is based on the presumptionthat VRS-2001 (in operation from 14.12.2000 to 15.1.2001) was an openended scheme in character. This, in our view, is fallacious approachfor the reason that every scheme for voluntary retirement really has atime frame. Not only that, VRS-2001 was followed by fresh Schemein 2003-2004, and thereafter in 2008. The terms of the Schemes weredifferent. While the 2001 scheme initially, in clause 8.7, provided for afull and final settlement of claims, it is as per clarification issued on4.1.2001 that the benefit was extended, to provide for future pay revisions.This was so far as the 2001 Scheme is concerned. Even the 2003-2004Scheme did not provide such clarification, and the endeavour to take upthis issue, through the resolution of the Rajya Sabha Committee was notsuccessful as the IFCI stuck by its original plan. VRS-2008 left no

Amanner of doubt, and possibly, the IFCI was more cautious to, again andagain, emphasise through different clauses that it would not be calledupon to incur any other financial liability.

29. No doubt the Pension Regulations referred to aforesaid werespecifically included as benefit under VRS-2008. However, the PensionBRegulations and the VRS have to be read harmoniously and, in the contextof its inclusion, along with the other terms of the VRS. If we refer to thePension Regulations, no doubt the date of retirement includes the dateon which the employee voluntarily retires, but that would mean that theconcerned employee would be deemed to have retired on the date heterminates his relationship with the IFCI. As to how emoluments haveCto be calculated, it is the average emoluments of the last ten (10) monthsof his service. This would naturally mean the emoluments received justprior to the termination of the relationship of employment. If we turn tothe IFCI Regulations, 1974, more specifically Regulation 33, in the contextof retirement under the said Regulations taking their meaning from theD1974 Regulations, it refers to an option with an employee, on attaining 50years of age, to retire any time by giving the Corporation three months’notice in writing.30. It is not as if pension is being paid to the private respondentscontrary to the terms of VRS-2008. The only thing is that, based on theEcalculation of average emoluments for period of ten (10) months priorto that date when their relationship stood terminated, the pension hasbeen calculated.

31. The private respondents cannot claim parity with such peoplewho had retired after full length of service and did not terminate theirFrelationship. We had specifically put question to the learned counselfor the appellant, as to what would be the position qua persons who mayhave retired on the same date, on attaining the age of superannuation, asthe persons who sought termination of relationship under VRS-2008 withall the benefits. The answer is categorical that such persons have notbeen paid the benefit of revised pension for the past period.G

32. We must keep in mind that pension is for past services, aselucidated. However, it was not the full tenure, but the tenure wasterminated by mutual consent, before it would have reached the end, onsuperannuation. To grant the private respondents the benefit of payrevision, retrospectively, and that to be taken into account for grant ofH

future pension would be bounty which cannot be given to these privaterespondents. The benefit is meant for persons who are actually in service,i.e., serving employees. The endeavour of learned counsel for therespondents to plead that the CTC structure was, in fact, more beneficialand, thus, the benefits were not given retrospectively, of the RBI 2007pay-scales, made applicable from 1.11.2013, would be of not much usefor the reason that even the CTC structure was introduced after thetermination of relationship between IFCI and the private respondents.

33. We may also deal with the inappropriate comparison with Ms.Sweety Bhalla, who was the serving employee, and opted for continuationof RBI pay-scales, in view of her special position, being visuallychallenged. She was the sole person in this category and thus, benefitswere given retrospectively to her. She was not an optee of the VRS.

34. We may also elucidate further, with reference to the P.P.Vaidya & Ors.[7]case, that it was the case of the same parties and someother similarly placed employees, albeit with respect to special benefitsand incentives. It, once again, talked about the aspect of ‘GoldenHandshake’ and the delay in approaching the Court from the time whenthe cause of action really arose. In that context, it was observed that“the employees who opt for voluntary retirement make planning forfuture and take into consideration all its implications. At the time of givingthe option, they know where they stand and they cannot get additionalbenefits other than mentioned in the Scheme. They prepare themselvesto contract out of the jural relationship and are bound by their own acts.”

35. We may also note one last aspect, which is the plea of delay.This is coupled with the commonality of some of the respondents in theP.P. Vaidya & Ors.[8]case and the present case. In their context, moreso, this is second battle which has been waged against the IFCI, claimingto be on different cause of action. The principle as to why no otherbenefit, other than under the VRS-2008 should be made available, remainsthe same. Even if we accept that their knowledge was derived only in2014, when for the first time they raised the issue, the same was rejectedpromptly by the appellant within few days. Continuing representationon the same issue is really not of much use. As observed earlier, thereis gap of one and half years between the last representation and thesending of legal notice. This, by itself, could have been fatal, but the7 (supra)

8 (supra)

Aprivate respondents must fail on multifarious grounds, discussed aforesaidand this aspect has been discussed only in the context of the plea beingraised by IFCI/appellant.

36. If the RBI pay-scales had been adopted by IFCI withretrospective effect, the private respondents could never have had aBclaim as their chapter was closed. Merely because, for existingemployees, RBI pay-scales had been applied, albeit retrospectively,without past benefits, that cannot be ground to start getting pension onthe basis of calculation based on those revised pay-scales, on thereasoning that pension is continuing right for past services rendered.The very cut-off date for calculation of pension, for the privateCrespondents, was the date of their termination of relationship, and thecalculation of pension under the Pension Regulations also proceeds onthe basis of the last ten (10) months’ salary prior to that date.

37. We are firmly of the view that the present endeavour by theprivate respondents is misadventure and has to be rejected withoutDany hesitation. The impugned order of the Division Bench of the HighCourt is, thus, set aside.

38. The appeal is accordingly allowed.

39. We would have been inclined to impose costs but for the factEthat the private respondents would be mostly pensioners by now.

Nidhi Jain

Appeal allowed.