C.K. Thakker, C.J.
1. Both the above petitions have been filedby the petitioner for an appropriate writ,direction or order challenging the action of therespondents, adversely affecting the serviceconditions of the petitioners.
2. So far as the first petition, i.e., WritPetition No. 5373 of 2002, is concerned, adeclaration is sought that as there was breach ofterms and conditions of absorption by Government ofIndia because of disinvestment of its equity stakein Videsh Sanchar Nigam Ltd. (VSNL, for short)in favour of a private company, the petitioners andall similarly situated persons are entitled to re-opt to receive Government Pensionary benefits byrefunding the amounts received by them as pro-ratapension/lumpsum payment at the time of theirabsorption with VSNL. It was also prayed that theGovernment of India is liable to pay to thepetitions and all similarly situated employeesPensionary benefits as per Government Rules ontheir re-opting for Government Pensionary benefits.Consequential reliefs were also sought.
3. In the second petition, i.e., WritPetition No. 5374 of 2002, a prayer is made fordeclaring that the action of the respondent in notgiving the petitioners and similarly situatedemployees, who had not completed ten years ofservice with the Government of India, the right toexercise option for retaining Government Pensionarybenefits on their absorption with VSNL isarbitrary, discriminatory and violative of Articles14 and 16 of the Constitution. It was, therefore,prayed that appropriate direction be issued to theGovernment of India that the Petitioners andsimilarly situated employees, who had not completed ten years of service on their date of absorption inVSNL, are entitled to exercise option for retainingGovernment Pensionary benefits by counting theirservice in Government of India along with theirservice with VSNL for such benefits.
4. The case of the petitioners is that in1986, the Government of India created VSNL byconverting VSNL as a wholly-owned GovernmentPublic Sector Company. Several employees wereworking with VSNL at that time. On December 11,1989, notices were given to the employees workingin VSNL on deputation asking them to exerciseoption either to be absorbed in the regular serviceof VSNL with effect from January, 1990 or to retainGovernment benefits in respect of pension and otherbenefits. According to the petitions, employees,who had not completed ten years in Governmentservice, were not entitled to Pensionary benefits,and hence, no option was given to them. VSNL hasgiven certain terms and conditions in respect ofPensionary benefits after exercising the option bythe employees to be absorbed with it. It wasmentioned that the permanent Government employeescould give an option to retain Pensionary benefitsavailable to them in accordance with the GovernmentRules or they could opt for being governed by rulesof VSNL. Such option was also made available toquasi-permanent as well as temporary employees. Acopy of the memorandum is annexed to the petition.It is stated by the petitioners that severalemployees in various non-executive cadres opted forabsorption with VSNL and to receive pro-ratapension/lumpsum amount.
5. The petitioners, however, stated that in2000-01, the Government of India took a policydecision of disinvestment of VSNL shares,Petitioner No. 3, Federation of the Videsh SancharNigam Employees Union, therefore, wrote a letter tothe Hon'ble Minister for Communications, Governmentof India, on December 12, 2000, requesting him thatsale of VSNL shares must ensure safeguards andguarantees for the employees of VSNL, including jobsecurity, proper employees of VSNL, including jobsecurity, proper emoluments, Pensionary benefits,etc. Such letter was also written in January,2001, reiterating what was stated in the earlierletter. The attention of the Minister was alsoinvited to Sub-rules (25) and (26) of Rule 37-A ofthe Central Civil Services (Pension) Rules, whichwas introduced by amendment of 2000, which providedthat the Government of India disinvesting itsshares in any public sector undertaking to theextent of 50% or more must provide adequatesafeguards for protecting interest of absorbedemployees with such public sector undertaking.Such letters were addressed to the Hon'ble thePrime Minister also. They have been annexed to thepetition. A request was also made to the ManagingDirector of VSNL, respondent No. 3 herein, so thatthe interest of the employees, who had beenabsorbed in VSNL, may not be prejudiciallyaffected. It was stated that by the action ofdisinvestment by the Government of India, theemployees would lose their status as GovernmentEmployees, and they would be put in precariousposition. A subsequent step taken by theGovernment of India was, therefore, illegal andimproper, and it was incumbent on the respondentsto ensure the benefits, which otherwise thepetitioners and similarly situated employees wouldhave received.
6. The petitions stated that the thirdrespondent, by his letter dated November 1, 2001 torespondent No. 1, stated that the options wereexercised by the employees in 1989, and there wasno question of giving re-option to those employeeswho had opted for the pro-rata pension/lumpsumamount, which was accepted by VSNL. Regarding Rule37-A of the Rules, the petitions were notentitled to such benefits. It was, however, statedthat the issue should be referred to the Ministryof Personnel, Public Grievances & Pension,respondent No. 2 herein, as to whether it would befeasible to provide re-option to such employees.According to the petitioners, no decision had beencommunicated by respondent Nos. 1 and 2 on thequestion of re-option, and hence, they wereconstrained to approach this Court. It was,therefore, submitted that a preliminary directionmay be issued to the respondents to afford anopportunity of re-option to the petitions andsimilarly situated employees, who were working withthe Government and absorbed with VSNL, and to allowPensionary and other benefits as if they wereGovernment Employees.
7. An affidavit-in-reply is filed by VSNL,respondent No.3 herein. A preliminary objectionhas been raised in the counter-affidavit that thethird respondent could not be said to be'authority' within the meaning of Article 12 of theConstitution, and hence, it is not subject to thejurisdiction of this Court under Article 226 of theConstitution. It was stated that respondent No.3no longer remained a Government Company, and thecontrol and supervision of the Company was not withGovernment of India. The Government of India washolding 52.97% of the shares of the thirdrespondent, but was divested of 25% of theshareholding to Tata Group of Companies by sale ofsuch shares on February 6, 2002 in furtherance ofits policy of disinvestment. It was, therefore,privatised, and the Government of India handed overmanagement of VSNL to the Tata Group. At present,the Government of India is having only 26.12% ofthe shareholding, and the Tata Group owns nearly45% of the shares of the third respondent. VSNLis, therefore, not amenable to Writ Jurisdiction ofthis Court.
8. It was also stated that the thirdrespondent was set up as a wholly-owned GovernmentPublic Sector Company in 1986; but in 1989,options were offered to the petitions andsimilarly situated employees whether they wereinterested in getting themselves absorbed with thethird respondent or would get themselvestransferred to the Surplus Staff Cell fordeployment against possible vacancies available inother Government Offices. The petitions andseveral other employees exercised the option forabsorption with VSNL, and they cannot makegrievance against such an action. They werethereafter governed by the terms and conditions ofthe option and absorption with VSNL. When it isnot the case of the petitioners that there was anybreach by the third respondent so far as the termsand conditions of the absorption are concerned, noprayer can be granted in their favour.
9. Referring to the decision of the SupremeCourt in the affidavit-in-reply in Balco EmployeesUnion (Regd.) v. Union of India and Ors., : (2002)ILLJ550SC , it was submitted that when persons seekand get employment with a company registered underthe Companies Act, it should be presumed that theyaccept the right of the Directors and Shareholdersto conduct the company in accordance with law; andsuch employees have no vested right in theemployer-company continuing to be a GovernmentCompany or 'other authority' for the purpose ofArticle 12 of the constitution.
10. The deponent has also stated;
'In any event the retirement benefits inVSNL remain the same after privatisationas they were before privatisation.'
11. It was, therefore, submitted that thepetitioners have no case; there was no right intheir favour to seek re-option; nor there wascorresponding duty on the third respondent to offersuch re-option; and the petitions were liable tobe dismissed.
12. An affidavit-in-reply is also filed by theAssistant General Manager (Legal) of respondentNos. 1 and 2, wherein the facts stated andcontentions raised on behalf of respondent No. 3have been reiterated. It was stated that optionswere offered to the employees, who were taken ondeemed deputation with VSNL, and such options wereexercised by the employees. The terms andconditions of the options were also disclosed.They were also informed that if they would notfavour absorption with VSNL, their names would betransferred to the Surplus Staff Cell fordeployment against possible vacancies available inother Government Offices. It was expresslystated that option, once exercised, shall befinal'. The employees exercised their option to beabsorbed by VSNL and for receiving retirementbenefits available under VSNL. They also got pro-rataretirement benefits for services renderedunder the Government in the form of being able todraw pro-rata monthly pension or a lumpsum amountin lieu of 100% pro-rata pension paid in 1995.
13. The deponent then stated that thepetitioners and other employees are now seeking tocontend that at the time of exercising theiroption, they were not aware that the Governmentwould disinvest its shareholding of respondent No. 3or respondent No. 3 would be privatised; and,therefore, they should be allowed to re-opt forreceiving Government Pensionary benefits. When apolicy decision has been taken by the Government,and the rights of the petitioners remainedunaffected after exercise of option, they cannotcontend that the action of the Government isillegal or contrary to law. Respondent Nos. 1 and 2also placed reliance on Balco Employees' Union(Regd.). Regarding Rule 37-A, it was the case ofthe first and second respondents that thepetitioners and other similarly situated employeesare not entitled to the said benefit by going backon their options which were exercised in 1989,particularly when it was specifically stated thatexercise of the option was final. The petitioners,in fact, wanted to approbate and reprobate, whichcould not be allowed. It was, therefore, prayedthat the petitions be dismissed.
14. In affidavits-in-rejoinder, thepetitioners have reiterated what was stated in thepetitions and controverted all the facts stated andcontentions raised in the affidavit-in-reply.
15. We have heard the learned counsel for the parties.
16. So far as the preliminary contentionregarding maintainability of the petitions isconcerned, the learned counsel for the thirdrespondent drew our attention to an order passed bya Division Bench of this Court in Writ PetitionNo. 5233 of 2002 decided on October 22, 2002,wherein it was observed by the Division Bench thatVSNL is no longer a Government Company; and thecontrol and management of the company is not withthe Government of India. 'It is doubtful whether awrit petition would lie against VSNL.'
17. The leaned counsel for the petitionersmay be right in submitting that what was observedin the above order was that it is 'doubtful'whether a writ petition against VSNL would lie. Itis, however, not finally concluded by a judgmentthat such a petition would not be maintainable.But from the facts, and particularly from theaffidavit-in-reply of respondent No. 3, it is clearthat the Tata Group owns nearly 45% of theshareholding of VSNL, and the Government owns only26.12% of the shareholding. In the facts andcircumstances, therefore, it cannot be said thatthe contention raised by the learned counsel forthe respondents has no force.
18. But even otherwise, in our opinion, thepetitioners are not entitled to any relief, andhence, without expressing final opinion as tomaintainability or otherwise of the petitions, wehave considered the case on merits.
19. It is undisputed fact that VSNL was awholly-owned Government Company at one time. It isalso not in dispute that the petitioners andsimilarly situated persons were working with VSNL.
20. On July 5, 1989, the Ministry ofPersonnel, Public Grievances & Pension, Departmentof Pension & Pensionarys Welfare, Government ofIndia, issued an office memorandum, which dealtwith settlement of Pensionary terms, etc., inrespect of Government Employees transferred enmasse to Central Public Sector Undertakings/CentralAutonomous Bodies on the terms and conditionsmentioned in the said memorandum. It dealt withPermanent Government Servants, who had opted toretain Pensionary benefits available to them underthe Government Rules or to be governed by rules ofPublic Sector Undertakings/Autonomous Bodies. Itwas also provided that the said option would beavailable to quasi-permanent and temporaryemployees after they would be confirmed in PublicSector Undertakings / Autonomous Bodies. Itcovered those Permanent Central GovernmentServants, who had completed ten years or more ofservice and opted for retirement benefits of PublicSector Undertakings / Autonomous Bodies. It dealtwith those Permanent Government Servants with lessthan ten years of service, quasi-permanent andtemporary employees, who opted for the Rules ofPublic Sector Undertakings / Autonomous Bodies.Thus, detailed provisions were made by theGovernment of India with regard to permanentGovernment Servants, who had completed ten years ormore of service with the Government and opted forretirement benefits of Public SectorUndertakings / Autonomous Bodies. Similarly,provisions were made for Permanent GovernmentServants with less than ten years of services,quasi-permanent employees and temporary employeeswho have opted for rules of Public SectorUndertakings / Autonomous Bodies.
21. Similarly, a memorandum had been issued byVSNL on December 11, 1989, giving notice to theemployees working with VSNL on deputation callingfor their options to be absorbed with VSNL or toremain with the Government. Such options were tobe exercised on or before December 27, 1989. Theterms and conditions of options were annexed to thememorandum. It was clarified that any employee whowould not opt for absorption or would not intimatehis or her intention of not becoming a regularemployees of VSNL would be 'deemed to have beenabsorbed' in VSNL with effect from January 1, 1990.The name of the person who would not opt in favourof absorption would be transferred to the SurplusStaff Cell for deployment against possiblevacancies available in other Government Offices.
22. Clause 4 of the memorandum then stated-
'Option once exercised shall be final.'
23. The terms and conditions of suchabsorption have been mentioned in Annexure-I,Clause 2 dealt with 'Pensionary Benefits', and itprovided that the permanent Government servantswould have an option to retain Pensionary benefitsavailable to them under the Government rules or tobe governed by the rules of VSNL. Such optionwould also be available to quasi-permanent ortemporary employees after they would be confirmedin VSNL. It was also stated that permanentGovernment servants with less than ten years ofservice, quasi-permanent employees and temporaryemployees, who had opted for the rules of VSNL,would be entitled to certain benefits and permanentGovernment servants, who had completed ten years ormore of service, and who would opt for retirementbenefits of VSNL, would receive pro-rata retirementbenefits for the service rendered under theGovernment.
24. From the above discussion, it is amplyclear to us that in 1989, a policy decision wastaken by the Central Government with regard toconferment of benefits to those employees who wereworking with the Government and who were en massetransferred to Central Public Sector Undertakings /Central Autonomous Bodies. They were asked toexercise their option by giving an opportunity forsuch benefits. It is also on record that a similarmemorandum was issued by VSNL in December, 1989 tothe employees who were working with the Governmentand en masse transferred to respondent No. 3.Regarding terms and conditions of retiral benefits,detailed provisions have been made in the annexure,which was supplied with the option form. Theemployees were expressly told that they wererequired to exercise such option within astipulated period. Finally, they were informedthat an option, once exercised, would be final. Itis not even the case of the petitioners thatoptions were not exercised by them.
25. In our opinion, the contention raised onbehalf of the respondents is well-founded and mustbe upheld that once the option was exercised in1989, and as per the terms and conditions of theoption, such exercise of option was to be treatedas final, it would be too late, after more than tenyears, to contend that they would not be bound byexercise of option or that re-option should beallowed to them. That contention, therefore,cannot be upheld, and is hereby rejected.
26. Regarding the contention that employees,who had not completed ten years, were not allowedto exercise the option with regard to Pensionarybenefits, it may be stated that even when they werein the Government service, when VSNL was aGovernment Company, they were not entitled to suchbenefits. Reading the memorandum also, itbecomes abundantly clear that the persons, who hadnot completed ten years of service with theGovernment, were not entitled to Pensionarybenefits. The option, which was allowed by theGovernment, and to be exercised by the employees,was in respect of those employees who had completedten years or more of service and quasi-permanentemployees and temporary employees, who would beentitled to such benefits after they would beconfirmed in the Public Sector or AutonomousBodies. Since the petitioners and similarlysituated persons, who had not completed ten yearsof service, were not entitled to such benefits evenunder the Government they cannot make grievancefor Pensionary benefits. Moreover, as observedhereinabove, the third respondent has specificallystated in the affidavit-in-reply that retirementbenefits in VSNL would remain the same afterprivatisation as they were before privatisation.Hence, even on that ground, the grievance of thepetitioners is ill-founded and cannot be upheld.
27. Third ground, which was pressed in servicein the petitions as well as at the time of hearing,was that when the options were sought from thepetitioners and other similarly situated employeesin 1989, they were of the view that the status ofVSNL would remain the same. It was at a subsequentstage that the Government of India disinvested apart of share capital in VSNL in favour of aprivate party (the Tata Group), which affectedseveral employees, and hence, the petitioners areentitled to re-opt Government benefits by refundingthe amount received by them from the Government.It is also contended that the Government has nottaken sufficient care to safeguard and protectinterest of the employees, which would be contraryto Rule 37-A of the Rules.
28. In this connection, in our view, therespondents were right in relying upon BalcoEmployees' Union (Regd.). Almost in similarcircumstances, the Court held that in economicpolicy mattes, it is for the State to takeappropriate decision, and the Court would notembark upon wisdom or otherwise of such policy. Inthat case, too, almost similar safeguards have beenprovided, and the Apex Court upheld the action ofthe authorities.
29. In paragraph 47, 48 and 49, the Court observed:-
'47. Process of disinvestment is a policydecision involving complex economicfactors. The courts haveconsistently refrained frominterfering with economic decisionsas it has been recognised thateconomic expediencies lackadjudicative disposition and unlessthe economic decision, based oneconomic expediencies, isdemonstrated to be so violative ofconstitutional or legal limits onpower or so abhorrent to reason, thatthe courts would decline tointerfere. In matters relating toeconomic issues, the Government has,while taking a decision, right to'trial and error' as long as bothtrial and error are bona fide andwithin limits of authority. There isno case made out by the petitionerthat the decision to disinvest inBALCO is in any way capricious,arbitrary, illegal or uninformed.Even though the workers may haveinterest in the manner in which theCompany is conducting its business,inasmuch as its policy decision mayhave an impact on the workersrights, nevertheless it is anincidence of service for an employeeto accept a decision of the employerwhich has been honestly taken andwhich is not contrary to law. Even agovernment servant, having theprotection of not only Articles 14 and 16 of the Constitution but alsoof Article 311, has no absolute rightto remain in service. For example,apart from cases of disciplinaryaction, the services of governmentservants can be terminated if postsare abolished. If such employeecannot make a grievance based on PartIII of the Constitution or Article311 then it cannot stand to reasonthat like the petitioners, non-governmentemployees working in acompany which by reason of judicialpronouncement may be regarded as aState for the purpose of Part III ofthe Constitution, can claim asuperior or a better right than agovernment servant and impugn itschange of status. In taking of apolicy decision in economic mattersat length, the principles of naturaljustice have no role to play. Whileit is expected of a responsibleemployer to take all aspects intoconsideration including welfare ofthe labour before taking any policydecision that, by itself, will notentitle the employees to demand aright of hearing or consultationprior to the taking of the decision.
'48. Merely because the workmen may haveprotection of Articles 14 and 16 ofthe Constitution, by regarding BALCOas a State, it does not mean that theerstwhile sole shareholder viz.Government had to give the workersprior notice of hearing beforedeciding to disinvest. There is noprinciple of natural justice whichrequires prior notice and hearing topersons who are generally affected asa class by an economic policydecision of the Government. If theabolition of a post pursuant to apolicy decision does not attract theprovisions of Article 311 of theConstitution as held in State ofHaryana v. Des Raj Sangar, : (1976)ILLJ301SC on thesame parity of reasoning, the policyof disinvestment cannot be faulted ifas a result thereof the employeeslose their rights or protection underArticles 14 and 16 of theConstitution. In other words, theexistence of rights of protectionunder Articles 14 and 16 of theConstitution cannot possibly have theeffect of vetoing the Government'sright to disinvest. Nor can theemployees claim a right of continuousconsultation at different stages ofthe disinvestment process. If thedisinvestment process is gone throughwithout contravening any law, thenthe normal consequences as a resultof disinvestment must follow.
'49. The Government could have run theindustry departmentally or in anyother form. When it chooses to runan industry by forming a company andit becomes its shareholder ten underthe provisions of the Companies Actas a shareholder, it would have aright to transfer its shares. Whenpersons seek and get employment withsuch a company registered under theCompanies Act, it must be presumedtat they accept the right of theDirectors and the shareholders toconduct the affairs of the company inaccordance with law and at the sametime they can exercise the right tosell their shares.'
30. In our view, the cases on hand are similarto employees of Balco, and as held by the SupremeCourt, such a decision cannot be said to beillegal, unlawful or otherwise unreasonable. Sincethe employees were allowed to exercise option in1989, they exercised such option, which was to betreated as final, and as more than ten years havepassed, they cannot ask for re-option on the groundthat in 1989-90, they were under the impressionthat the status of VSNL would continue to remain asGovernment company; and as there was change at asubsequent stage, the petitioners would be entitledto re-option. As the action, which was takenbefore more than a decide, was legal and valid, nofault can be found, and the petitioners have noright to make grievance.
31. For the foregoing reasons, in our opinion,both the petitions deserve to be dismissed, and areaccordingly dismissed. In the facts andcircumstances, however, there shall be no order asto costs.
32. The learned counsel for the petitioners prayed that the Judgment and Order passed by us may be kept in abeyance so as to enable the petitionerto approach the Supreme Court. The Prayer has been strongly objected by the learned counsel for the respondents. In our opinion, no such prayercan be granted. Hence, prayer is rejected.