{"id":201464,"date":"2006-09-06T00:00:00","date_gmt":"2006-09-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/board-of-trustees-visakhapatnam-vs-t-s-n-raju-another-on-6-september-2006"},"modified":"2017-06-19T17:39:29","modified_gmt":"2017-06-19T12:09:29","slug":"board-of-trustees-visakhapatnam-vs-t-s-n-raju-another-on-6-september-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/board-of-trustees-visakhapatnam-vs-t-s-n-raju-another-on-6-september-2006","title":{"rendered":"Board Of Trustees, Visakhapatnam … vs T.S.N. Raju & Another on 6 September, 2006"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Board Of Trustees, Visakhapatnam … vs T.S.N. Raju & Another on 6 September, 2006<\/div>\n
Author: . A Lakshmanan<\/div>\n
Bench: Dr. Ar. Lakshmanan, Tarun Chatterjee<\/div>\n
           CASE NO.:\nAppeal (civil)  3957 of 2006\n\nPETITIONER:\nBoard of Trustees, Visakhapatnam Port Trust & Others\n\nRESPONDENT:\nT.S.N. Raju & Another\n\nDATE OF JUDGMENT: 06\/09\/2006\n\nBENCH:\nDr. AR. Lakshmanan & Tarun Chatterjee\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T
\n(Arising out of SLP (C) Nos. 26322-26323\/2005)<\/p>\n
Dr. AR. Lakshmanan, J.\n<\/p>\n
Leave granted.\n<\/p>\n
The Board of Trustees, Visakhapatnam Port Trust and
\nothers are the appellants before us and the respondents are
\nemployees of the said Port Trust.\n<\/p>\n
The matter arises out of an insistence of two employees of
\nthe Visakhapatnam Port Trust (in short ‘the VPT’) to seek
\nretirement under a voluntary retirement scheme, even though,
\naccording to the employer Port Trust they are not entitled to
\navail the benefit of the scheme because they have attained the
\ncut off age of 58 years before their cases could be considered.
\nThe learned single Judge allowed the writ petition filed by
\nthe respondents and directed the Port Trust to consider and
\naccept the voluntary retirement scheme (hereinafter called
\n‘VRS’) of the respondents as on their date of application and
\npass appropriate orders and pay all the benefits thereunder.
\nHowever, the learned single Judge held that the respondents
\nare not entitled for pension on the ground that they have
\nretired on attaining the age of superannuation at the age of 60
\nyears and they shall be entitled for pension as per the date of
\nretirement under the VRS to be extended to the respondents.
\nThe learned Single Judge further held that the salaries
\nreceived by the respondents till their age of superannuation
\nshall not be recovered if paid as they have worked.  The
\nlearned Judges of the Division Bench, by their order dated
\n21.11.2005 dismissed the appeal filed by the VPT and directed
\nthe VPT to pass orders on the applications of the respondents
\nfor voluntary retirement within a period of one month from the
\ndate of judgment.\n<\/p>\n
According to the VPT, both the learned single Judge and
\nthe Judges of the Division Bench of the High Court have mis-
\nread the applicability of the Scheme and directed the VPT to
\nconsider and accept the case of the respondents and that such
\na direction is unsustainable in law and is likely to have a
\ncascading effect.  Therefore, the VPT have come before this
\nCourt through the above civil appeals arising out of Special
\nLeave Petition Nos. 26322-26323 of 2005.
\nThe short facts relevant to the issue in dispute are as
\nfollows:\n<\/p>\n
With a view to reduce surplus manpower, the Union
\nMinistry of Surface Transport (now called the Ministry of
\nShipping, Road Transport and Highways – Department of
\nShipping) came out with a scheme of voluntary retirement.
\nThis was made applicable to all the Ports.  The scheme of
\nvoluntary retirement was introduced in the appellant-VPT
\npursuant to the direction of the Ministry of Surface Transport
\ncontained in its letter No. LB-16016\/7\/88-L.II dated
\n29.08.1991.  The said scheme is annexed as Annexure-P1
\nwhich reads as under:\n<\/p>\n
“GOVERNMENT OF INDIA
\nMINISTRY OF SURFACE TRANSPORT
\n(LABOUR DIVISION)<\/p>\n
No. LB-16016\/7\/88-L.II    New Delhi, 29th August, 1991<\/p>\n
To<\/p>\n
Shri P.V.R.K. Prasad
\nChairman,
\nVishakhapatnam Port Trust,
\nVishakhapatnam-530035<\/p>\n
Subject:-\tVoluntary Retirement Scheme for Port Trusts
\nand Dock Labour Boards<\/p>\n
Sir,
\nI am directed to say that the matter regarding
\nintroduction of a uniform Voluntary Retirement Scheme
\nfor officers, employees and workers of Port Trusts and
\nDock Labour Board has been under consideration of the
\nGovernment. After careful consideration it has been
\ndecided that Port Trusts and Dock Labour Boards can
\nintroduce Voluntary Retirement Scheme with a view to
\nreducing surplus manpower subject to the following
\nterms and conditions:-\n<\/p>\n
2. (a) An employee who has completed 10 years’ of
\nservices or completed 40 years’ of age may seek
\nvoluntary retirement by a written request.\n<\/p>\n
(b) The Port Trust and Dock Labour Board will have the
\nright not to grant voluntary retirement for reasons to be
\nrecorded in writing.\n<\/p>\n
(c) The terminal payments available to an employee who
\nseeks voluntary retirement would be:-\n<\/p>\n
i.\tthe balance in his Provident Fund Account
\npayable as per the GPF\/CPF regulations
\napplicable to him;\n<\/p>\n
ii.\tcash equivalent of accumulated earned leave as
\nper the       rules of the Port Trust\/Dock Labour
\nBoard;\n<\/p>\n
iii.\tgratuity as per Gratuity Act or the Gratuity
\nScheme applicable to the employees;\n<\/p>\n
iv.\tone month’s\/three month’s notice pay (as per the
\nconditions of service applicable to him).
\nv.\tpension as per the rule Port Trust\/Dock Labour
\nBoard.\n<\/p>\n
(d) In addition, an employee whose request for
\nVoluntary Retirements is accepted would also be
\nentitled to an ex-gratia payment equivalent to 1=
\nmonths emoluments (Pay+ D.A) for each completed year
\nof service or the discounted value of the emoluments (at
\n12% rate of discount) that would have become payable
\nfor the balance months of service left, whichever is less.
\nFor example, an employee who has put in 24 years of
\nservice and has got only one year of service for normal
\nretirement, he will get ex-gratia payment of only 12
\nmonths emoluments (pay+DA) discounted at 12% per
\nannum and not 36 months emoluments.\n<\/p>\n
(e) In addition, the employee and his family would also
\nbe entitled to travel by entitled class to the place where
\nhe intends settling down.\n<\/p>\n
3.\tWhile introducing the voluntary retirement
\nscheme, Port Trusts and Dock Labour Boards will make
\nan assessment of surplus man-power taking into
\naccount the present and future operational
\nrequirements. While accepting the Voluntary Retirement
\nof the employee, the Port Trust\/Dock Labour Board will
\nalso issue an order to the vacancy caused by the
\nVoluntary retirement would not be filled up and the post
\nis abolished.\n<\/p>\n
4.\tNo claim of the dependents of the employees going
\non voluntary retirements for any compassionate
\nappointment under the Port Trust\/Dock Labour Board
\nwill be entertained.\n<\/p>\n
5.\tThe Voluntary Retirement Scheme would be
\nfinanced by the Port Trusts\/ Dock Labour Boards from
\ntheir own resources and no budgetary support in the
\nform of loans will be granted by the Government, after
\nseeking approval of the Ministry.\n<\/p>\n
6.\tPort Trusts and Dock Labour Boards can
\nintroduce an Voluntary Retirement Scheme on the
\nabove parameters, after seeking approval of the
\nMinistry.\n<\/p>\n
Yours faithfully
\nSd\/-\n<\/p>\n
(P.K.MISHRA)
\nDirector”\n<\/p>\n
On 30.10.1991, the approval of the Board of Trustees of
\nthe appellant was sought for introducing the scheme of
\nvoluntary retirement.  The terms and conditions of the scheme
\nand its applicability were detailed therein.  The scheme is
\nannexed along with this appeal and marked as Annexure-P2
\nwhich is reproduced hereunder:\n<\/p>\n
“VISHAKHAPATNAM PORT TRUST<\/p>\n
MEETING NO.4 OF 1991-92 OF THE BOARD OF
\nTRUSTEES TO BE HELD
\nON 30.10.1991<\/p>\n
AGENDA ITEM NO. 36<\/span><\/p>\n
Sub:\tVoluntary Retirement Scheme for the Port Trusts
\nand Dock Labour Boards.\n<\/p>\n
The Ministry has decided that Port Trusts and
\nDock Labour Boards can introduce Voluntary
\nRetirement Scheme for its officers, Employees and
\nWorkers with a view to reduce the surplus manpower
\nsubject to following terms and conditions:\n<\/p>\n
(a)\tAn employee who has completed 10 years of
\nservice or completed 40 years of age may seek
\nVoluntary Retirement by a written request.\n<\/p>\n
(b)\tThe Port Trust and Dock Labour Boards will have
\nthe right not to grant Voluntary Retirement for
\nreasons to be recorded in writing.\n<\/p>\n
(c)\tThe terminal payments available to an employee
\nwho seeks Voluntary Retirement would be:-\n<\/p>\n
(i)\tThe balance in his Provident Fund Account
\npayable as per the GPF\/CPF Regulations
\napplicable to him;\n<\/p>\n
(ii) \tCash equivalent of accumulated earned leave
\nas per the rules of the Port Trust\/Dock
\nLabour Board;\n<\/p>\n
(iii)\tGratuity as per Gratuity Act or the Gratuity
\nScheme applicable to the employee;\n<\/p>\n
(iv) \tOne month’s\/ Three month’s Notice Pay (as
\nper the conditions of service applicable to
\nhim);\n<\/p>\n
(v)\tPension as per the rules of the Port Trust\/
\nDock Labour Board.\n<\/p>\n
(d)\tIn addition, an employee whose request for
\nVoluntary Retirement is accepted would also be
\nentitled to an ex-gratia payment equivalent to 1=
\nmonths emoluments (Pay + D.A) for each
\ncompleted year of service or the discounted value
\nof the emoluments (at 12% rate of discount) that
\nwould have become payable for the balance
\nmonths of service left, whichever is less.\n<\/p>\n
(e) \tIn addition, the employee and his family would
\nalso be entitled to travel by the entitled class to
\nthe place where he intends setting down.\n<\/p>\n
Under the above scheme while accepting the
\nVoluntary Retirement of the employee, the Port
\nTrust\/Dock Labour Board will also issue an order that
\nthe vacancy caused by the Voluntary Retirement would
\nnot be filled up and the post is abolished and also that
\nno claim of the dependents of the employee going on
\nVoluntary Retirement for any compassionate
\nappointments under the Port Trust and Dock Labour
\nBoards will be entertained. The above scheme has to be
\nfinanced by the Port Trust\/ Dock Labour Board from
\ntheir own resources and no budgetary support would be
\ngranted by the Government.\n<\/p>\n
The Ministry while communicating the above
\nscheme, has stated that the Port Trust and Dock Labour
\nBoards can introduce a voluntary Retirement Scheme
\non the above parameters, after making an assessment of
\nsurplus man power taking into account the present and
\nfuture operational requirement, subject to approval of
\nthe Government.\n<\/p>\n
A copy of the Ministry’s letter No. LB-16016\/7\/88-
\nL.II, dt. 29.08.1991 on the above subject is enclosed for
\nreference.\n<\/p>\n
In view of the Ministry’s instructions, it is
\nproposed to introduce a Voluntary Retirement Scheme
\non the above parameters, in our Port also.\n<\/p>\n
Board’s approval is, therefore, requested to
\nintroduce a Voluntary Retirement Scheme in our Port
\non the parameters prescribed by the Ministry of Surface
\nTransport in its letter No. LB;16016\/7\/88-L.II,
\ndt.29.08.1991 subject to approval of the Ministry.\n<\/p>\n
Encl.: As above.”\n<\/p>\n
Respondent No.1 T.S.N. Raju applied for voluntary
\nretirement on 16.08.1999 but withdrew his application for
\nVRS on 06.04.2000.  He again applied for VRS on 27.04.2000.
\nHe averred in his writ petition that the application was made
\non the basis that Port has informally alerted that Management
\nis serious about considering the request of the employees
\nseeking VRS.  In the counter affidavit filed by the VPT, it was
\ncategorically stated that the Management had issued no letter
\nor circular to such effect.  On 26.07.2000, respondent No.1
\nwas promoted as Assistant Engineer (Civil) on ad hoc basis but
\nhe did not renew his application.\n<\/p>\n
Respondent No.2 – R. Rama Rao applied for VRS on
\n28.04.2000.  In a meeting of the Heads of Department of the
\nVPT, the concern expressed by the Secretary, Department of
\nShipping, Ministry of Surface Transport about the VRS was
\ndiscussed.  It was decided by the Chairman that the VRS
\nshould be considered in the cases of those employees who are
\nbelow the age of 58 years.  The said decision is annexed along
\nwith the appeal as Annexure-P3 which reads as under:\n<\/p>\n
“VISHAKHAPATNAM PORT TRUST<\/p>\n
ADMINISTRATION DEPARTMENT<\/p>\n
No. ADMN\/VRS\/2000
\nDate: 23.08.2000
\nC.E.\/C.M.E.\/D.C.\/T.M.\/F.A.&C.A.O<\/p>\n
C.M.O\/C.M.M.\/DIRECTOR (R&P)<\/p>\n
MANAGER (OP)<\/p>\n
ORDER<\/p>\n
Sub:\tGrant of Voluntary Retirement under V.R. Scheme
\nto the employees- M.O.S.T. Letter No. LB-
\n16016\/7\/94-L-II, dt.29.08.1991-Reg.\n<\/p>\n
During the daily HODs Meeting held on
\n23.08.2000, keeping in view the concern expressed by
\nthe Secretary (Dept. of Shipping), M.O.S.T, Govt of
\nIndia, a review has been made by the Chairman on the
\nimplementation of voluntary retirement under the
\nscheme to the employees of V.P.T. and it has been
\ndecided that the Voluntary Retirement Scheme should
\nbe considered in the case of those employees who are
\nbelow the age of 58 years.\n<\/p>\n
All the HODs are, therefore, requested to forward
\nthe V.R.S. cases of only those employees who have not
\nattained the age of 58 years.\n<\/p>\n
This issues with the approval of the Chairman.\n<\/p>\n
SECRETARY<\/p>\n
VISHAKHAPATNAM PORT TRUST”\n<\/p>\n
On 29.08.2000, respondent No.1 made a representation
\nto the Chairman of the VPT to consider his application dated
\n27.04.2000 which he had made before being promoted as
\nAssistant Engineer.  However, his case could not be
\nconsidered for VRS because there were several applications
\npending and he was very junior in rank of A.E.(C).  By the time
\nthe application of senior A.E.s were processed, the required
\nnumber had already been arrived at and the case of
\nrespondent No.1 could not be considered.
\nBeing aggrieved by non-consideration of his case,
\nrespondent No.1 filed Writ Petition No. 17697 of 2000 before
\nthe High Court of Andhra Pradesh on 03.09.2000 with the
\nfollowing prayers:\n<\/p>\n
“For the reasons and in the circumstances stated in the
\naccompanying affidavit, the petitioners herein pray that
\nthis Hon’ble Court in the interest of justice be pleased to
\nissue a writ or direction more particularly one in the
\nnature of writ of Mandamus<\/p>\n
i.\tdeclaring the action of the respondents in not
\naccepting the offer of the writ petitioner to retire
\nfrom the service of the Vishakhapatnam Port Trust
\non Voluntary retirement basis as unjust and
\nillegal; and<\/p>\n
ii.\tconsequently direct the respondents to treat the
\nwrit petitioner to have retired from its service on
\nvoluntary retirement basis with immediate effect
\nby extending all the terminal benefits that flow
\nthere from and pass such order or further order or
\norders as are deemed fit and proper in the
\ncircumstances of the case.”\n<\/p>\n
Being aggrieved by non-consideration of his case,
\nrespondent No.2 Rama Rao filed Writ Petition No. 23543 of
\n2000 before the High Court on 18.09.2000 with the following
\nprayers:\n<\/p>\n
(i)\tdeclaring the action of the respondents in not
\naccepting the offer of the writ petitioner to retire from
\nthe service of the Vishakhapatnam Port Trust on
\nVoluntary retirement basis as unjust and illegal; and<\/p>\n
(ii)\tconsequently direct the respondents to treat the
\nwrit petitioner to have retired from its service on
\nvoluntary retirement basis with immediate effect by
\nextending all the terminal benefits that flow there from
\nand pass such order or further order or orders as are
\ndeemed fit and proper in the circumstances of the case.”\n<\/p>\n
Both these writ petitions were heard together.  The VPT
\nfiled a detailed counter affidavit denying the allegations of the
\nrespondents that cases of others similarly situate had been
\nconsidered and they had been discriminated against by the
\nVPT.\n<\/p>\n
The retirement age of the employees of the VPT was rolled
\nback from 60 years to 58 years.  Respondent No. 1 (Born on
\n01.08.1942) and Respondent No. 2 (Born on 23.09.1941) were
\nsuperannuated from service on 30.11.2000.  The learned
\nsingle Judge passed a common judgment and allowed both the
\nwrit petitions and directed the VPT to consider and accept the
\nVRS of the respondents herein with certain other directions.
\nBeing aggrieved, the VPT preferred two separate Letter Patent
\nAppeals being Writ Appeal Nos. 2105 and 1558 of 2005.  By
\nthe impugned common final judgment, both the appeals had
\nbeen dismissed with a direction to the VPT to pass orders on
\nthe applications of the respondents within a period of one
\nmonth.  Aggrieved by the above common judgment, the VPT
\nhas come before us by filing the above civil appeals.
\nWe heard Mr. Kailash Vasudev, learned senior counsel
\nassisted by Mr. Gopal Singh, learned counsel for the
\nappellants and Mr. L.N. Rao, learned senior counsel assisted
\nby Mr. G.Ramakrishna  Prasad, learned counsel for the
\nrespondents.\n<\/p>\n
Mr. Kailash Vasudev, learned senior counsel has
\nsubmitted that the Division Bench has not appreciated the
\ncontentions of the VPT against the order of the learned single
\nJudge.  According to him, it was specifically argued that
\nundeniably it is not mandatory for any organization to accept
\nevery application that is received from the employees seeking
\nvoluntary retirement and that the VPT was authorized to take
\na decision on 23.08.2000 to consider applications of only
\nthose employees who have not crossed 58 years of age.  It is
\nfurther submitted that the learned single Judge and of the
\nDivision Bench of the High Court have failed to appreciate that
\nthe scheme clearly stipulates of basic condition that voluntary
\nretirement under a scheme cannot be sought for as a matter of
\nright.  The factual position with regard to the other employees
\nwhose cases for voluntary retirement were considered had
\nbeen placed by filing a counter affidavit but has been
\noverlooked by the High Court.  Learned senior counsel further
\nsubmits that the High Court has erred in directing that even
\nthough the writ petitioners had continued in service beyond 58
\nyears till their superannuation and had received salary they
\nwould not be required to refund the excess amount received
\nand that they shall be extended benefits under the VRS as on
\nthe date of their applications.  It is further urged that a person
\nwho has crossed the age of 58 years is not eligible to be
\nconsidered for retirement under the VRS.  Respondent No.2
\nhad in fact completed the age of 58 years by 23.09.1999.
\nTherefore, learned senior counsel would submit that the
\norders of the learned single Judge as well as the Division
\nBench are arbitrary and have been passed without taking into
\nconsideration these vital facts.\n<\/p>\n
Learned senior counsel appearing for the
\nrespondents\/writ petitioners submitted that the Port Trust
\nhas no discretion to refuse the offer to go on retirement under
\nthe voluntary retirement scheme except in cases of the
\nexigencies of service or the compelling necessity or the
\nindispensability of the employees concerned.
\nThe Port Trust having accepted the offer of similarly
\nplaced employees who have also completed 57 years of age and
\nalso 58 years of age to go on voluntary basis, declining to
\npermit the respondents to retire on voluntary retirement basis
\nis clearly discriminatory.\n<\/p>\n
The Port Trust has committed illegality in not passing
\nany orders on the application dated 13.9.2000 to retire from
\nits service on voluntary retirement basis though the
\napplication has been forwarded for acceptance by the Head of
\nthe Department, Financial Advisor & Chief Accounts Officer
\nand the Vigilance Department.  It is, therefore, contended that
\nthe Port Trust has not acted fairly and justly in the case of
\nrespondent  Sri Rama Rao.\n<\/p>\n
In Bank of India & Ors. Vs. O.P. Swarnakar & Ors.,
\n(2003) 2 SCC 721, the moot question posed and answered by
\nthis judgment was whether the VRS is an offer\/proposal  or
\nmerely an invitation to offer.  The question was whether the
\nBanks intended to make an offer or merely issued an
\ninvitation to treat is essentially a question of fact.  In
\nparagraph 49, this Court held as under:\n<\/p>\n
“49. An offer indisputably can be made to a group of persons
\ncollectively which is capable of being accepted individually
\nbut the question which has to be posed and answered is as
\nto whether having regard to the service jurisprudence: the
\nprinciples of Indian Contract Act would be applicable in the
\ninstant case. It is the specific case of the “Banks” that the
\nschemes had been floated by way of contract. It does not
\nhave any statutory flavour. Reference to the pension scheme
\nframed under the regulations was made for computation of
\nthe pension.”\n<\/p>\n
The learned Judges of the Bench have also elaborately
\ndiscussed the use of the term “offer” or “proposal” and held in
\nparagraphs 59, 60, 61, 62 and 74 as under:
\n“59. The request of employees seeking voluntary retirement
\nwas not to take effect until and unless it was accepted in
\nwriting by the competent authority. The Competent
\nAuthority had the absolute discretion whether to accept or
\nreject the request of the employee seeking voluntary
\nretirement under the scheme. A procedure has been laid
\ndown for considering the provisions of the said scheme to the
\neffect that an employee who intends to seek voluntary
\nretirement would submit duly completed application in
\nduplicate in the prescribed form marked “offer to seek
\nvoluntary retirement” and the application so received would
\nbe considered by the competent authority on first come first
\nserve basis. The procedure laid down therefor suggests that
\nthe applications of the employee would be an offer which
\ncould be considered by the bank in terms of the procedure
\nlaid down therefor. There is no assurance that such an
\napplication would be accepted without any consideration.”
\n“60. Acceptance or otherwise of the request of an employee
\nseeking voluntary retirement is required to be communicated
\nto him in writing. This clause is crucial in view of the fact
\nthat therein the acceptance or rejection of such request has
\nbeen provided. The decision of the authority rejecting the
\nrequest is applicable to the Appellate authority. The
\napplication made by an employee as an offer as well as the
\ndecision of the bank thereupon would be communicated to
\nthe respective General Managers. The decisions making
\nprocess shall take place at various levels of the banks.”
\n“61. The following, therefore, can be deduced:\n<\/p>\n
(i) The banks treated the application from the employees as
\nan offer which could be accepted or rejected.\n<\/p>\n
(ii) Acceptance of such an offer is required to be
\ncommunicated in writing.\n<\/p>\n
(iii) The decision making process involved application of
\nmind on the part of several authorities.\n<\/p>\n
(iv) Decision making process was to be formed at various
\nlevels.\n<\/p>\n
(v) The process of acceptance of an offer made by an
\nemployee was in the discretion of competent authority.\n<\/p>\n
(vi) The request of voluntary retirement would not take effect
\nin praesenti but in future.\n<\/p>\n
(vii) The Bank reserved its right to alter\/rescind the
\nconditions of the scheme.”\n<\/p>\n
“62. From what has been noticed before, it is apparent that
\nthe Nationalized banks in terms of the scheme had secured
\nfor themselves an unfettered and unguided right to deal with
\nthe jural relationship between themselves and their
\nemployees”\n<\/p>\n
“74. We, therefore, have no hesitation in coming to the
\nconclusion that the voluntary scheme was not a proposal or
\nan offer but merely an invitation to treat and the
\napplications filed by the employees constituted an ‘offer’.”\n<\/p>\n
In HEC Voluntary Retd. Employees Welfare Society &
\nanr. Vs. Heavy Engineering Corpn. Ltd. & Ors., (2006) 3
\nSCC 708, this Court in paragraph 11 held as under:
\n“11.An offer for voluntary retirement in terms of a scheme,
\nwhen accepted, leads to a concluded contract between the
\nemployer and the employee. In terms of such a scheme, an
\nemployee has an option either to accept or not to opt
\ntherefor.  The scheme is purely voluntary, in terms whereof
\nthe tenure of service is curtailed, which is permissible in law.
\nSuch a scheme is ordinarily floated with a purpose of
\ndownsizing the employees.  It is beneficial both to the
\nemployees as well as to the employer. Such a scheme is
\nissued for effective functioning of the industrial
\nundertakings. Although the Company is “State” within the
\nmeaning of Article 12 of the Constitution, the terms and
\nconditions of service would be governed by the contract are
\nemployment. Thus, unless the terms and conditions of such
\na contract are governed by a statute or statutory rules, the
\nprovisions of the Contract Act would be applicable both at
\nthe formulation of the contract as also the determination
\nthereof. By reason of such a scheme only is an invitation of
\noffer floated. When pursuant to or in furtherance of such a
\nVoluntary Retirement Scheme an employee opts therefore, he
\nmakes an offer which upon acceptance by the employer gives
\nrise to a contract. Thus, as the matter relating to voluntary
\nretirement is not governed by any statute, the provisions of
\nthe Contract Act, 1872, therefore, would be applicable too.
\n(See Bank of India v. O.P.Swarnakar<\/a> (2003) 2 SCC 721.)”\n<\/p>\n
We have carefully considered the rival submissions made
\nby the respective parties.  We have also perused the pleadings,
\njudgments delivered by the learned single Judge and the
\nDivision Bench, voluntary retirement scheme, annexures and
\ndocuments.\n<\/p>\n
In our opinion, under the Scheme, the Chairman of the
\nPort Trust has an absolute right either to accept or not to
\naccept the applications filed by the employees for retirement
\nunder the voluntary retirement scheme.  We have already
\nreproduced the entire scheme dated 29.8.1991 of the
\nGovernment of India, Ministry of Surface Transport.  The
\nGovernment of India has decided that Port Trust and Dock
\nLabour Board can introduce voluntary retirement scheme with
\na view to reduce surplus manpower subject to the terms and
\nconditions set out in the voluntary retirement scheme.
\nClauses 2(a) and 2(b) of the Scheme are very relevant for the
\npresent purpose.  Clause 2(a) clearly stipulates that an
\nemployee who has completed ten years of service or completed
\n40 years of age may seek voluntary retirement by a written
\nrequest.  Clause 2(b) clearly stipulates that the Port Trust and
\nDock Labour Board will have a right not to grant voluntary
\nretirement for reasons to be recorded in writing.  Clause 6 of
\nthe said Scheme provides that the Port Trust and Dock Labour
\nBoard can introduce a voluntary retirement scheme on the
\nparameters mentioned in the scheme framed by the
\nGovernment of India after seeking approval of the Ministry.
\nA meeting of the Board of Trustees of the VPT was held
\non 30.10.1991.  In the said meeting, the Trustees considered
\nthe VRS formulated by the Government of India and decided to
\nintroduce the voluntary retirement scheme on the parameters
\nsuggested by the Government of India in VPT also.  Board’s
\napproval was, therefore, sought to introduce the VRS in the
\nVPT on the parameters prescribed by the Ministry of Surface
\nTransport in its letter No. LB-16016\/7\/88-L.II, dated
\n29.8.1991 subject to approval of the Ministry.
\nAnnexure P-3 is relevant to be considered in the present
\ncontext.  By the said order, VPT, Administration Department,
\npassed an order stating that a review has been made by the
\nChairman on the implementation of voluntary retirement
\nunder the scheme to the employees of VPT and that it has
\nbeen decided that the voluntary retirement scheme should be
\nconsidered in the cases of those employees who are below the
\nage of 58 years.  In view of the said decision, the Heads of the
\nDepartment were requested to forward the voluntary
\nretirement scheme cases of only those employees who have not
\nattained the age of 58 years.  Though it is contended that the
\nPort Trust had no authority to modify the voluntary retirement
\nscheme, we are unable to accept the said submission made by
\nthe respondent in view of clause 2(b) of the Scheme which
\nenable the Port Trust and Dock Labour Board to alter the
\nscheme and also have a right not to grant voluntary retirement
\nfor the reasons to be recorded in writing.
\nWe have perused the order passed by the learned single
\nJudge.  In our view, the order of the learned single Judge is
\nwithout jurisdiction and beset with material irregularities.  The
\nlearned single Judge ought to have seen that under the
\nscheme the Chairman of VPT has absolute right either to
\naccept or not to accept the applications filed by the employees
\nfor retirement under the voluntary retirement scheme.  The
\nlearned single Judge also did not mention how there was
\ndiscrimination between those who have been granted
\nvoluntary retirement and those who have not.  The learned
\nsingle Judge in the case of Sri Rama Rao (respondent No.2
\nherein) has not noticed that he had made a representation on
\n29.8.2000 addresssed to the Chairman while he was in the
\ncategory of CTOW and his application was not considered as
\nhe was the junior most Assistant Engineer.  The learned single
\nJudge ought to have considered his application dated
\n27.4.2000 by which he applied while he was in the cadre of
\nC.T.O.W. (Class-III) to go on voluntary retirement.  But by this
\ntime, the applications of other A.Es who are senior in the order
\nof receiving, were considered and therefore, his application at
\nthis stage could not be considered as Sri Rama Rao being the
\njunior most A.E. among the V.R.S. applied A.Es and his
\napplication dated 29.8.2000 is least in the order of seniority of
\napplication received for V.R.S.  In any event, the learned single
\nJudge ought not to have issued the direction to the
\nDepartment to accept the voluntary retirement of the
\nrespondent as on the date of their application and pass
\nappropriate order.  The learned Judge at any rate can only
\ndirect the Port Trust to consider their applications for
\nvoluntary retirement and pass appropriate orders.  The order
\npassed by the learned single Judge is, therefore, beyond the
\njurisdiction of the Court in issuing such direction.  Likewise,
\nthe Division Bench also committed the same error in issuing
\nthe directions.\n<\/p>\n
Respondent No.1 T.S.N. Raju applied for voluntary
\nretirement on 16.08.1999 but withdrew his application for
\nVRS on 06.04.2000.  He again applied for VRS on 27.04.2000.
\nHe averred in his writ petition that the application was made
\non the basis that Port has informally alerted that Management
\nis serious about considering the request of the employees
\nseeking VRS.  In the counter affidavit filed by the VPT, it was
\ncategorically stated that the Management had issued no letter
\nor circular to such effect.  On 26.07.2000, respondent No.1
\nwas promoted as Assistant Engineer (Civil) on ad hoc basis but
\nhe did not renew his application.\n<\/p>\n
On 29.8.2000, respondent No.1 made a representation to
\nthe Chairman of the VPT to consider his application dated
\n27.4.2000 which he had made before being promoted as A.E.
\nHowever, his case could not be considered for VRS because
\nseveral applications were pending and he was very junior in
\nthe rank of A.E.  By the time, the application of senior A.Es
\nwere processed, the required number had already been arrived
\nat and the case of respondent No.1 could not be considered.
\n  As already noticed, Sri Rama Rao (respondent No.2) was
\nappointed as sub-overseer on 2.1.1969 in the Civil
\nEngineering Department of VPT and completed about 31 years
\nof service as on date of his retirement on superannuation by
\n30.11.2000 A\/N.  He has been promoted as Assistant
\nEngineer initially on ad hoc basis and subsequently
\nregularized as A.E. w.e.f. 17.1.2000.  The Scheme of VRS has
\nbeen introduced in VPT as per Ministry of Surface and
\nTransport (Labour Division) letter No. L.B. 16016\/7\/88-L.II
\ndated 29.08.1991 with a view to reduce surplus manpower
\nsubject to sustain condition specified therein.
\nIt is true that Sri Rama Rao (respondent No.2 herein) has
\napplied for retirement under the voluntary retirement scheme
\nvide his application dated 28.4.2000 seeking retirement w.e.f.
\n30.11.2000.  Sri Rama Rao was posted as A.E. for the
\nmaintenance section of C.I.S.F. residential colony consisting
\nmaintenance repairs, drains etc., including water supply to
\nentire colony, thus his services are very much essential to the
\ndepartment, therefore, his application dated 28.4.2000 has
\nnot been considered favourable keeping in view the exigencies
\nof work essentially of cadre, feasibility of surrendering the post
\netc., since as per Government guidelines V.P.T. has to show
\nappropriate surplus in the manpower in the cadre without
\ncausing hindrance to the normal operations of the
\ndepartment. Further as per the above circular while accepting
\nV.R.S., the Port Trust has to ensure to surrender the vacancy
\ncaused due to retirement of the incumbent on V.R.S.
\nThis apart, the V.R.S. accepted by the Chairman, VPT to
\nsome of the employees of the VPT who have completed 58
\nyears of age is only prior to 23.8.2000 by which time the
\nretirement age limit of 60 years was in force and the same is
\nnot relevant to the case on hand as in the case of the
\nrespondent, he was holding important works under his control
\nand his continuance was considered necessary in VPT service
\nand thereby VRS was not granted to him.  In the respondent’s
\ncase, no such decision has been taken even on his application
\ndated 13.9.2000 addressed by him direct to Deputy Chairman.
\nThe Circular dated 29.8.2000 that the employee who was
\ndesirous to apply for retirement under voluntary retirement
\nscheme may apply direct to Dy. Chairman was only to
\nconsolidate such applications at administrative level before
\narriving at a decision, but it does not ensure ready acceptance
\nas alleged by the respondents.  We have already reproduced
\nthe prayers made in the writ petition of both the respondents.
\nThe prayer was to declare the inaction on the part of the Port
\nTrust in not accepting the offer of the respondents to retire
\nfrom service of the Port Trust on voluntary retirement basis as
\nunjust and illegal.  A further prayer was also made to direct
\nthe Port Trust to treat the respondent to have retired from its
\nservice on voluntary retirement basis with immediate effect by
\nextending all the terminal benefits that flow therefrom and
\npass such other or further order or orders as are deemed fit
\nand proper in the circumstances of the case.
\nThe respondents have not questioned the validity and
\ncorrectness of the voluntary retirement scheme introduced by
\nthe Government of India and the decision taken by the Port
\nTrust in its meeting of the Board of Trustees held on
\n30.10.1991 pursuant to the decision of the Ministry in terms
\nof which Port Trust and Dock Labour Board are not to grant
\nvoluntary retirement to everyone.  It is not in dispute that
\nbeneficial scheme was introduced with a view to reduction of
\nsurplus manpower.\n<\/p>\n
The High Court, in our opinion, could not entertain
\ngrievance of the respondents even on their own showing.  It
\nwas based merely on a presumption that applications for VRS,
\nif filed before April, 2000, would be considered by July, 2000
\nwhen no such circular or letter had been issued by the Port
\nTrust.  The Scheme also provides that the Port Trust and Dock
\nLabour Board will have a right not to grant voluntary
\nretirement for the reasons recorded in writing.  Such a right
\ngiven to the Port Trust was not questioned in the writ petition.
\nIn our opinion, the Chairman is competent to frame the
\nScheme having regard to the exigencies of work and no one
\ncan claim voluntary retirement as of right.  The learned
\nJudges of the High Court have also not seen that the
\nrespondent’s application for voluntary retirement cannot be
\nconsidered in view of the seniority of service of the employees
\nconcerned.\n<\/p>\n
In our opinion, the request of the employees seeking
\nvoluntary retirement was not to take effect until and unless it
\nwas accepted in writing by the Port Trust Authorities.  The
\nPort Trust Authorities had the absolute discretion whether to
\naccept or reject the request of the employee seeking voluntary
\nretirement under the scheme.  There is no assurance that
\nsuch an application would be accepted without any
\nconsideration.  The process of acceptance of an offer made by
\nan employee was in the discretion of the Port Trust.  We,
\ntherefore, have no hesitation in coming to the conclusion that
\nthe VRS was not a proposal or an offer but merely an
\ninvitation to treat and the applications filed by the employees
\nconstituted an offer.\n<\/p>\n
The reasons assigned by the learned single Judge and
\nthe learned Judges of the Division Bench in the orders are
\nerroneous and unsound and, therefore, they are set aside.
\nFor the foregoing reasons, we allow the appeals and set
\naside the order passed by the Division Bench affirming the
\norder of the learned single Judge.  However, there shall be no
\norder as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Board Of Trustees, Visakhapatnam … vs T.S.N. Raju & Another on 6 September, 2006 Author: . A Lakshmanan Bench: Dr. Ar. Lakshmanan, Tarun Chatterjee CASE NO.: Appeal (civil) 3957 of 2006 PETITIONER: Board of Trustees, Visakhapatnam Port Trust & Others RESPONDENT: T.S.N. Raju & Another DATE OF JUDGMENT: 06\/09\/2006 BENCH: Dr. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-201464","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nBoard Of Trustees, Visakhapatnam ... vs T.S.N. 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