Sarabjit Singh Vs. Ex. Major B.D. Gupta and Others - Court Judgment

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service - promotion - issue related to promotion of petitioner - departmental promotion committee (dpc) first called for files of first five candidates and also called for files of next three candidates - dpc able to select three candidates out of first five - procedure followed by dpc consistent with guidelines dated under which for three posts five names to be considered - guidelines of state referred to central guidelines only to extent of need to have periodical dpcs in time - no need for considering name of writ petitioner who was sixth candidate - petitioner's case rightly not considered for promotion. - subordinate/delegated legislation:[d.k. jain & r.m. lodha, jj] banks -voluntary retirement scheme, 2000 (vrs 2000) - held, the amendment in regulation 28, as is reflected from communication dated 5.9.2000, was intended to cover employees who had rendered 15 years service but not completed 20 years service. it was not intended to cover optees who had already completed 20 years service as the provisions contained in regulation 29 met that contingency. even if it be assumed that by insertion of proviso in regulation 28 (in the year 2002 with retrospective effect from 1.9.2000), all classes of employees under vrs 2000 were intended to be covered, such amendment in regulation 28, needs to be harmonised with regulation 29, particularly regulation 29(5) which provides for addition of qualifying service by five years. this would be in tune and consonance with the explanatory note appended to the amendment in regulation 28 wherein it is stated that the amendment with retrospective effect would not adversely affect any employee or officer of the respondent bank. that would also meet the test of fairness. weightage of five years under regulation 29(5) is applicable to the optees having service of 20 years or more. merely because the employees who have completed 15 years of service but not completed 20 years of service are not entitled to weightage of five years for qualifying service under regulation 29(5), the employees who have completed 20 years of service or more cannot be denied such benefit. it is also not correct to say that by taking recourse to regulation 29, the amendment to regulation 28 is rendered otiose. labour & services pension: [d.k. jain & r.m. lodha, jj] banks -employees pension regulations, 1995-regulations 29(5) and 28 proviso (added in 2002 retrospectively from 1.9.2000) - benefit of five years additional qualifying service under regulation 29(5) - availability of benefit to employees taking retirement under voluntary retirement scheme, 2000 (vrs 2000) on completion of 20 years service - held, the benefit is available notwithstanding that such employees had received ex gratia payments under vrs 2000. further regulation 28 which was amended subsequently by adding a proviso retrospectively, could not be applied to such employees. pension: [d.k. jain & r.m. lodha,jj] bona fide delay in payment - inadmissibility of interest - delay due to litigation wherein genuine issue of law needed to be resolved in view of difference of opinion between high courts. besides, stand taken by appellant banks was also not frivolous though ultimately rejected by supreme court. grant of interest, under these circumstances is not warranted. pension: [d.k. jain & r.m. lodha,jj] scope, object and applicability of banks employees pension regulations, 1995- regulation 28, proviso (added in 2002 retrospectively from 1.9.2000) and regulation 29(5) - held, the purpose of the proviso is to confer benefit of pension to those employees who sought voluntary retirement after completion of 15 years but before completion of 20 years of service. proviso cannot be interpreted to deprive benefit of five years additional qualifying service to those employees who took retirement after 20 years of service under vrs 2000. labour & services voluntary retirement scheme: [d.k. jain & r.m. lodha,jj] banks -voluntary retirement scheme, 2000 (vrs 2000) - the appellant public sector banks framed a scheme known as voluntary retirement scheme, 2000 (vrs 2000) under which all permanent employees of bank who had put in minimum 15 years of service or completed 40 years of age were eligible to seek voluntary retirement. the scheme was framed for optimizing the staff strength by shedding excess employees. vrs 2000 provided that an employee whose application for voluntary retirement was accepted, would inter alia be entitled to pension in terms of the employees pension regulations, 1995, in case of those who have opted for pension and have put in 20 completed years of service in the bank. besides, there was also a parallel provision in regulation 29 of the pension regulations, under which an employee with 20 years qualifying service could take voluntary retirement. such an employee was entitled to benefit of five years additional qualifying service under regulation 29(5). the issue involved was, whether an employee with 20 years service, who had taken retirement under vrs 2000 (and not under regulation 29) was entitled to benefit of five years additional qualifying service as provided in regulation 29(5) of the pension regulations. contention of appellant banks was that benefit of five years additional qualifying service was admissible only to an employee who took voluntary retirement under regulation 29, and not to an employee who took retirement under vrs 2000. the employees however relied on ministry of finance communication dated 5.9.2000 (reproduced in para 38 of the judgment) to support their contention that proviso was added to regulation 28 for the purpose that an employee who takes vrs on completing 15 years of service but before 20 years service, also gets pension. held, the employees who had completed 20 years of service and offered voluntary retirement under vrs 2000 are entitled to addition of five years of notional service in calculating the length of service for the purposes of that scheme as per regulation 29(5) of the pension regulations. if the intention was not to give pension as provided in regulation 29 and particularly sub-regulation (5) thereof, the banks could have said so in the scheme itself. much though had gone into formulation of vrs 2000 and it came to be framed after great deliberations. the only provision that could have been in the mind while providing for pension as per the pension regulations was regulation 29. the employees too had the benefit of regulation 29(5) in mind when they offered for voluntary retirement as regulation 28, as was existing at that time, was not applicable at all. vrs 2000 was an attractive package for the employees as they were getting special benefits in the form of ex gratia payments and in addition thereto, inter alia, pension under the pension regulations which also provided for weightage of five years of qualifying service for the purposes of pension to the employees who had completed 20 years service. it would be unreasonable if amended regulation 28 is made applicable, which had not seen the light of the day and which was not the intention of the banks when the scheme was framed. the banks are public sector banks and are state within the meaning of article 12 of the constitution. their action even in contractual matters has to be reasonable, lest, it must attract the wrath or article 14 of the constitution. any interpretation of the terms of vrs 2000, although contractual in nature, must meet the test of fairness. it has to be construed in a manner that avoids arbitrariness and unreasonableness on the part of public sector banks which brought out vrs 2000 with an objective of rightsizing their manpower. the scheme was oriented to lure the employees to go in for voluntary retirement. in this background, the consideration that was to pass between the parties assumes significance and a harmonious construction to the scheme and the pension regulations, therefore, has to be given. contention of the appellant banks were rejected and it was declared that the employees who took retirement under the vrs 2000 are entitled to benefit of five years additional qualifying service under regulation 29(5). voluntary retirement scheme: [d.k. jain & r.m. lodha,jj] banks-voluntary retirement scheme, 2000 (vrs 2000) - effect of employees pension regulations, 1995 having been made part of vrs 2000 held, the precise effect of pension regulations, for the purposes of pension, having been made part f the scheme, is that the pension regulations, to the extent, these are applicable, must be read into the scheme. interpretation clause of vrs 2000 states that the words and expressions used in the scheme but not defined, and defined in the rules/regulations shall have the same meaning respectively assigned to them under the rules/regulations. the scheme does not define the expression retirement or voluntary retirement. therefore the definition of retirement given in regulation 2(y) whereunder voluntary retirement under regulation 29 is considered to be retirement, has to be taken into consideration. regulation 29 uses the expression, voluntary retirement under these regulations. for the purposes of the scheme, it has to be understood to mean with necessary changes in points of details section 23 of the contract act, 1872 has no application to the present fact situation. it cannot be accepted that vrs 2000 did not envisage grant of pension benefits under regulation 29(5) to the optees of 20 years service along with payment of ex-gratia. indian evidence act, 1872 section 115; [d.k. jain & r.m. lodha, jj] estoppel - held, bank employees who had taken retirement under the voluntary retirement scheme, 2000 (vrs 2000) and claimed benefit of additional qualifying service under employees pension regulations, 1995, were not resiling from vrs 2000, rather were enforcing the scheme. question of estoppel therefore does not arise. - further under the central guidelines, as adopted by the state on 1.10.99, candidates had to get the grading of 'very good' while under the earlier state guidelines, good' was sufficient. rao contended that the high court failed to notice that the dpc had met on 16.4.99 by which date the circular of the punjab government dated 1.10.99 adopting the central government's guidelines had not come into being. the selection of the appellant and two others (respondents 2 to 4 in the cwp) was perfectly in order. se lection for every vacancy has, therefore, to be made from the slab of 3 officers/ officials who are considered fit for promotion and unless a junior among them happens to be of exceptional merit and suitability the senior-most will be selected. it recommended the appellant mr.m. jagannadha rao, j.1. leave granted.2. the appellant mr. sarabjit singh (2nd respondent in the writ petition) is aggrieved by the judgment of the division bench of high court of punjab & haryana dated 7.6.2000 in cwp no. 13240/99 allowing the same in favour of the 1st respondent-writ petitioner, ex. major b.d. gupta. the high court accepted the contention of the 1st respondent that the departmental promotion committee of the 3. guidelines issued by the central government which were adopted by the state on 1.10.1999 and held that if those guidelines were applied, the dpc would have had to consider eight superintending engineers for promotion to the post of chief engineer and not merely five as done in this case, and if that had been done, the writ petitioner, ex. major b.d. gupta would have come within the said zone of consideration and he could not have been omitted from consideration as was done by the dpc. further under the central guidelines, as adopted by the state on 1.10.99, candidates had to get the grading of 'very good' while under the earlier state guidelines, 'good' was sufficient. hence the selection of respondents 2 to 4 in cwp, namely mr. sarabjit singh (appellant), mr. b.k. thapar and mr. d.p. bajaj as chief engineers was liable to set aside. the high court directed a fresh dpc to be conducted in accordance with the state government's circular dated 1.10.1999 where the state had adopted the central guidelines. that is how this appeal came to be filed by sri sarabjit singh. before the matter was listed in this court, the appellant was reverted back as superintending engineer and a fresh date was fixed for the meeting of the dpc to consider eight names, including that of the respondent- writ petitioner and others. this court stayed the fresh meeting of the dpc.3. in this appeal, learned senior counsel for the appellant sri p.p. rao contended that the high court failed to notice that the dpc had met on 16.4.99 by which date the circular of the punjab government dated 1.10.99 adopting the central government's guidelines had not come into being. the other circular dated 25.11.95 of the state government referred to the central government's guidelines only to the limited extent that the dpc must meet periodically. counsel contended that the earlier punjab guidelines 28.6.61 applied and the dpc which met on 16.4.99 rightly followed the said guidelines of 28.6.61 under which, on the facts of the case, it was sufficient to consider the cases of five superintending engineers and inasmuch as the writ petitioner (ex. major b.d. gupta) fell beyond five in the seniority (being sixth), the dpc was not obliged to consider his case. the selection of the appellant and two others (respondents 2 to 4 in the cwp) was perfectly in order.4. in this appeal, so far as the state of punjab is concerned, the learned counsel sri rajiv dutta submitted that the state had filed a brief counter affidavit here without supporting either side while, no doubt, the state had filed a counter-affidavit in the high court supporting the appellant.5. the contesting respondent in this appeal is the writ petitioner (ex. major b.d. gupta) and he filed a separate counter-affidavit and appeared in person. he contended that he had a fundamental right to be considered for promotion. of course, he agreed that in respect of a dpc dated 16.4.99 the punjab circular dated 1.10.99 could not have been applied and the high court was wrong in applying the said circular. he, however, referred to the punjab guidelines dated 17.6.60 and contended that they applied to the dpc and that for each post to be filled, at least three officers had to be considered. in this case, for two posts,six names should have been considered and he (mr. b.d. gupta) was the sixth person in the list. in fact, here three persons were ultimately selected, as one was on deputation.6. adverting to the above contention of the respondent-writ petitioner, sri p.p. rao learned senior counsel for the appellant replied that the guidelines of 17.6.60 were not applicable and were replaced by fresh guidelines in punjab government circular letter 4044- 5gs-61/23179 dated 28.6.61 which read as follows:in this connection, it is also made clear that, in fact, in the first instance, a list of eligible officers/officials who fulfil the prescribed experience, etc, for promotion is to be drawn up in accordance with the sub-paras (i) and (ii) above, then out of this list, such officers/officials as are considered unsuitable for promotion are to be weeded out and a list of only those who are suitable for promotion has to be drawn up. selection thereafter is to be confined to the 3 suitable officers/officials of the latter list if there is one post, 4 if there are two posts, and 5 if there are three posts and so on. unsuitable officers/officials are those who, on the basis of their service record, general reputation etc., are definitely not considered fit for promotion by the department. se lection for every vacancy has, therefore, to be made from the slab of 3 officers/ officials who are considered fit for promotion and unless a junior among them happens to be of exceptional merit and suitability the senior-most will be selected.7. the points for consideration are:(1) whether the high court was right in applying the punjab guidelines dated 1.10.99 which adopted the central government's guidelines for dpc?(2) whether, in case the state guidelines dated 1.10.99 did not apply, the 17.6.60 guidelines of the state relied upon by the respondent applied or the 28.6.61 guidelines relied upon for the appellant applied?(3) if the 28.6.61 guidelines applied, whether the decision of the dpc dated 16.4.99 was not liable to be set aside on the ground that the writ petitioner's name was not considered?8. point 1:it was practically conceded before us by all the parties that for the dpc dated 16.4.99, the punjab circular dated 1.10.99 which adopted the central government's guidelines for the dpc did not apply. the dpc would not have obviously applied guidelines which were formulated much later. therefore, the view of the high court that as per the central guidelines dated 1.10.99 adopted by the punjab government, eight candidates had to be considered could not be accepted. the entire reasoning of the high court based on the 1.10.99 guidelines would fall to the ground. point 1 is decided in favour of the appellant.9. points 2 and 3:in our view, the respondent-writ petitioner is no doubt right in contending that he has a fundamental right to be considered for promotion but this is available only if the 1st respondent falls within the prescribed zone of consideration. that question depends again on the relevant guidelines in punjab as applicable on the date the dpc met, i.e. 16.4.99.10. the respondent is not right in re lying upon the state guidelines dated 17.6.60 which no doubt require at least three names to be considered for each post. but, in our view, those guidelines are no longer applicable once the 28.6.61 guidelines, extracted above, have come into being. there fore, it is these guidelines dated 28.6.61 that are applicable and have been rightly applied by the dpc. we have already extracted the guidelines of 28.6.61.11. now, it appears that by the date of the dpc meeting on 16.4.99, the position was that the seniority list of superintending engineers was as follows: (i) mr. k.k. vasisht (2 mr. subhash malhotra (3) mr. sarabjit singh (appellant) (4) mr. d.p. bajaj (5) mr. b.k. thapar (6) mr. b.d. gupta (respondent-writ petitioner) (7) mr. gurdip singh and (8) mr. gurbax singh.12. admittedly, the dpc first called for the files of the first five and later, it also called for the files of the next three, - in all eight. at the time of calling for the files, it was not in a position to say whether it could select three candidates for the post of chief engineer from the first five. (mr.bajaj was already on deputation).13. but, ultimately, the dpc was able to select three from the first five, the procedure followed by the dpc, in our view, is consistent with the guidelines dated 28.6.61, under which for three posts, five names had to be considered. the dpc said that having regard to certain adverse remarks/departmental inquiries, it did not find no. 1 and 2 in seniority mr. k.k. vasisht and mr. subhash malhotra suitable for promotion. it recommended the appellant mr. sarabjit singh and the two others, mr. dp. bajaj and mr. b.k. thapar. in other words, the dpc was able to select three out of the first five names as explained earlier and this was permissible under the guidelines of 28.6.61. so far as 25.11.95 guidelines of the state were concerned, they referred to the central guidelines only to the extent of the need to have periodical dpcs in time.14. there was, therefore, no need for considering the name of the writ petitioner, who was the sixth candidate. therefore, the writ petitioner's case was rightly not considered for promotion. the high court erred in applying the wrong guidelines and in thinking that eight names ought to have been considered (including the name of the writ petitioner) and in directing fresh dpc on that ground.15. the judgment of the high court is set aside and the recommendation of the dpc dated 16.4.99 and the consequential promotions of the respondents 2, 3,4 in wp 13240/99 (including that of the appellant) are upheld. there will be no order as to costs.