Reportable

IN THE SUPREME COURT OF INDIA

CIVILAPPELLATE JURISDICTION

CIVIL APPEAL NO.6995 OF 2019

IFCI LTD. ….Appellant

VERSUS

SANJAY BEHARI & ORS. ….Respondents

J U D G M E N T

SANJAY KISHAN KAUL, J.

1. The celebration of  independence of  our country also came with

many  challenges,  including  in  the  financial  sector.   The  Industrial

Finance Corporation of India Ltd. (for short ‘IFCI’) was the first financial

corporation set up soon thereafter, in 1948, with the object of providing

for the industrial and infrastructural needs of the new born India and to

enable  the  growth  of  the  economy  through  medium  and  long  term

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finance.  Passage of time and financial & infrastructural changes resulted

in the transformation of IFCI from a statutory corporation to a company

under the Indian Companies Act, 1956, in the year 1993.  The status of

this institution, at present, is of a Government of India Undertaking and a

Non-Banking  Financial  Company,  primarily  engaged  in  corporate

lending.

2. Changing needs found the IFCI with having, possibly, an excess

number of employees at various levels.  In order to shed the flab, there

have been voluntary retirement schemes introduced, from time to time.

The present  dispute  pertains to  the Voluntary Retirement  Scheme (for

short ‘VRS’) of 2008.  The contesting respondents in the present case are

thirty-one  (31)  employees  of  IFCI  who  availed  of  the  VRS-2008  on

1.2.2008, and were accordingly relieved from duty on 25.2.2008.  There

is  no  dispute  that  all  the  benefits  under  the  VRS-2008  were  made

available to these employees.

3. The issue before us is limited in its character as it arises from a

claim by these employees that  they would be entitled to an enhanced

pension on the basis  of  subsequent  revision of  pay-scales,  which was

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given  retrospective  effect,  with  effect  from the  time period  when the

respondents were still employees of the IFCI.

4. In  the  context  of  the  aforesaid  nature  of  dispute,  it  would  be

relevant to note that the IFCI notified a pension scheme in the year 1993

for  its  employees,  under  the  Industrial  Finance  Corporation  of  India

Limited Pension Regulations, 1993 (hereinafter referred to as the ‘said

Regulations’).  The said Regulations came into effect from 1.11.1993.  It

would  be  appropriate  to  refer  to  some  of  the  clauses  of  the  said

Regulations, which are germane for the determination of the controversy

before us.

5. Regulation 2 is the Definition clause.  In terms of sub-clause (6)

‘date of retirement’ is defined while ‘retirement’ is defined under clause

(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 employee attains the age of superannuation or he is retired by  the  Corporation  or  the  date  on  which  the  employee voluntarily retires;”

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…. …. …. …. …. “(11) ‘Retirement’ means retirement in terms of Regulation 33 of the Staff Regulations and other instructions issued by the Corporation under settlement/award;”

6. What is relevant to note is that voluntary retirement is included in

the definition of the ‘date of retirement’ and ‘retirement’, which in turn is

defined with reference to Regulation 33 of the IFCI Staff Regulations,

1974  (hereinafter  referred  to  as  the  ‘Staff  Regulations’)  and  other

instructions issued by the IFCI.  Thus, turning to the Staff Regulations,

Regulation  33  deals  with  superannuation  and  retirement.   Regulation

33(2)  was  inserted  by  Administrative  Circular  No.16  of  1992  dated

14.8.1992,  w.e.f.  20.6.1992.   The  relevant  portion  of  clause  (2)  of

Regulation 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 shall have an option to retire anytime thereafter by giving to the Corporation three months notice in writing.

xxxx xxxx xxxx xxxx xxxx”

“(ii)  “Without  prejudice  to  sub-Regulation  (2)(i),  an employee governed by the IFCI Pension Regulations, 1993, may voluntarily retire at any time after he has completed 20 years of qualifying service in the Corporation as defined in the IFCI Pension Regulations, 1993 (even though he has not

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attained the age of 50 years), after giving to the Competent Authority three months’ notice in writing. xxxx xxxx xxxx xxxx xxxx”

7. It is an admitted position that the private respondents, who were

the  employees,  had  completed  20  years  of  service,  before  seeking

voluntary retirement under the VRS-2008.  They were, thus, entitled to

seek  voluntary  retirement  under  the  aforesaid  Regulations.   However,

these private respondents actually availed of the VRS-2008, which gave

them many more benefits and thus, the said Regulations would have to be

read in the context of the terms of the Scheme itself.

8. In  view  of  the  support  sought  to  be  derived  by  the  private

respondents  from the  earlier  VRS-2001,  it  becomes  necessary  to  deal

with the relevant clauses of the said Scheme insofar as relied upon by the

private respondents.  Clause 8.7 of the said Scheme reads as under:

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

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9. The aforesaid clause, thus, puts an embargo on any further claim

being  raised  against  the  IFCI.   However,  vide  clarification  dated

4.1.2001, the benefit of future pay revisions was made available to the

employees who availed of the Scheme.  The said clarification has clause

2(i), which reads as under:

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

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

xxxx xxxx xxxx xxxx xxxx”

10. As a factual narrative, it may be noted that there was also a VRS-

2003-2004.   There  was  no  such  clarification  making  applicable  pay

revisions,  as was done for the VRS-2001.  It  appears that  the retirees

approached the issue through political representations, and the matter was

taken up by the Rajya Sabha Committee, which referred to the Circular

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dated 4.1.2001 issued qua pay revisions in the context of the VRS-2001,

and the Committee recommended the Ministry of Finance may impress

upon IFCI, through its nominees in its Board of Directors, for revisions

of pay-scales similarly.  However, this was not accepted and no such pay

revision took place.

11. The  respondents,  along  with  other  employees,  prior  to  their

seeking VRS, got the benefit  of the revised pay-scales of 2002 of the

Reserve  Bank  of  India  (for  short  ‘RBI’),  when  these  scales  were

implemented w.e.f. 1.4.2006 on 22.11.2006.  The benefit of even these

revised  pay-scales,  thus,  was  not  made  available  to  the  persons  who

availed of the VRS implemented in the year 2003-2004.  In November,

2007,  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 floated

vide H.R. Circular No.1 of 2008, on 1.2.2008 with the avowed object of

achieving  “optimum  manpower  utilization  in  the  IFCI  and  overall

reduction in the existing strength of the employees.”  The eligibility, as

per clause 5 required completion of ten (10) years of service in the IFCI

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or 40 years of age.  The benefits under the Scheme were set out in clause

7 of the Scheme, while the general conditions were set out in clause 9.

The relevant clauses are reproduced hereinunder:

“7. BENEFITS UNDER THE SCHEME

An employee whose application for voluntary retirement is accepted, 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 those employees who have already opted for pension.

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

“7.5 Voluntary retirement amount equivalent to two months’ salary for  each completed year of  service rendered or  the monthly  salary  at  the  time  of  relieving  on  voluntary retirement  multiplied  by  the  balance  complete  calendar months  of  service  left  or  Rs.15  lakhs  whichever  is  less. Service rendered by an employee prior to joining the service of  the  IFCI  shall  not  be  reckoned  for  the  purpose  of calculating  the  voluntary  retirement  amount  (Fraction  of service of  six  months and above will  be reckoned as one year and fraction of service of less than six months will be

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ignored  for  the  purpose  of  calculating  years  of  service rendered in IFCI).”

…. …. …. …. ….

“9. GENERAL CONDITIONS” …. …. …. …. ….

“9.4 The benefits payable under the Scheme shall be in full and  final  settlement  of  all  claims  whatsoever,  whether arising under the Scheme or otherwise to the employee (or to  his  nominee  in  case  of  death).   An  employee,  who  is voluntarily  retired  under  the  Scheme,  will  not  have  any claim against the IFCI whatsoever and no demand or dispute will  be  raised  by  him  or  on  his  behalf  whether  for  re- employment or compensation or back wages.

9.5 The Scheme shall not be construed as a revision of any of the previous retirement schemes of the IFCI and as such no claim from an employee who availed of the Voluntary Retirement  under  any  of  the  earlier  Voluntary  Retirement Schemes shall be entertained.”

…. …. …. …. ….

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

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

13. A  reading  of  the  aforesaid  clauses  shows  that  the  Scheme

envisaged a full and final settlement of all claims, making it clear that

benefits  under  earlier  Schemes  would  not  be  applicable.   However,

pension under IFCI Pension Regulations was to be applicable.   It  has

been specifically provided in clause 9.12 that there would be no revision

in the voluntary retirement amount on account of  pay revision or  any

other account in future.  This clause was specifically absent in the 2001

Scheme,  but  pay  revision  was  subsequently  made  applicable  vide

Circular  dated  4.1.2001.  The  endeavour  to  apply  that  Circular  in  the

2003-2004 VRS was not successful.  It appears that in order to avoid any

further ambiguity on this account, this clause was inserted.  Since the

controversy relates to the total benefits under VRS-2008, it would also be

relevant  to  reproduce  sub-clause  3.4  (clause  3  being  the  ‘Definition’

clause),  which defines  “salary”,  as  this  terminology has  been used in

clause 7.  Sub-clause 3.4 reads as under:

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“3. DEFINITIONS

In this scheme, unless the context otherwise requires:- …. …. …. …. ….

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

14. The private respondents who availed of the VRS-2008 also signed

an undertaking, agreeing that they would not have further claims or rights

against the IFCI, except for payment of benefits under the Scheme.  Since

all  the employees were governed by the RBI pay-scales revised up to

1.11.2002 (applied to IFCI w.e.f. 1.4.2006), IFCI commenced payment of

pension to the private respondents, commensurate to the RBI pay-scales

applicable to them.  Needless to add, all other retirement dues were also

settled.

15. Soon  thereafter,  in  August,  2008  itself,  with  the  object  of

promoting performance culture by linking rewards to the performance of

employees, IFCI introduced a Cost to Company (for short ‘CTC’) pay

structure by way of HR Circular No.9/2008.  All the existing employees

were given an option to continue being governed by the RBI pay-scales,

or  opt  for  the  more  lucrative  CTC  structure,  which  was  to  be  made

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effective  from  18.8.2008.   A non-response  was  to  be  treated  as  an

affirmative one, to be governed by the new pay structure automatically.

This structure was possibly more lucrative as, except for one employee,

all others opted for the CTC pay structure.

16. Insofar as that one employee was concerned, Ms. Sweety Bhalla,

she is stated to be a visually challenged employee, and her request was

based on the fact that the CTC would not be beneficial to her.  We may

note that as per the IFCI, as set out in the rejoinder affidavit, there was

really no option but to move to CTC, but an exception was made in her

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  on

23.9.2011, along with arrears.  We may note another litigation, which was

initiated by Mr. P.P. Vaidya and others, who had similarly retired under

the VRS-2008.  They filed a writ petition, being WP(C) No.1319/2011,

before the Delhi High Court,  claiming certain benefits and incentives.

This  writ  petition  was  dismissed  on  18.7.2013.   The  Letters  Patent

Appeal was dismissed on 6.5.2014 and the Special Leave Petition was

dismissed  on  26.9.20141.   All  these  decisions  were  predicated  on the

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

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ground that there could not be any other benefits or incentives sought to

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  the

Government of India and, thus, sought to align its policies in accordance

with  the  practices  in  Public  Sector  Undertakings.   Thus,  IFCI,  on

13.7.2013, again modified its pay structure and decided to follow the RBI

structure  (as  revised  from  1.11.2007)  in  the  matter  of  pay-scales  for

serving employees of the IFCI, thus, abandoning the CTC pay structure.

This revised pay structure was made applicable vide Memorandum dated

16.7.2013,  and  was  implemented  w.e.f.  1.11.2013.   The  IFCI  has

categorically affirmed that though this scale had come into 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 this was so,

as the CTC scales were more beneficial to the employees.

18. The beginning of the dispute is the respondents’ claim that they

became aware of this change in pay-scale only in July, 2014, when they

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sent a letter to the CEO of IFCI (the appellant herein), requesting for the

benefit of such pay revisions.  This representation was promptly rejected

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  another

representation  in  September,  2014,  which  was  again  responded  to  on

17.11.2014, clarifying that the CTC structure was adopted from August,

2008 to October, 2013, and thereafter due to policy change in 2013, the

2007 RBI pay-scales were made applicable, but w.e.f. 1.11.2013, and that

too for serving employees.  There was a pregnant silence for about one

and  a  half  years,  when  a  legal  notice  was  served  by  the  private

respondents, on 31.5.2016.  This was, once again, refuted on 13.7.2017

by IFCI, and it is soon thereafter that a writ petition was filed before the

Delhi High Court, seeking revision of the pay-scales, claiming a similar

beneficial interpretation as provided to retirees under the VRS-2001, and

parity with Ms. Sweety Bhalla, who was still in employment as on that

date.  The case of the appellant, however, was predicated on the basis that

VRS-2001 was an open ended Scheme, in light of clause 8.7 read with

the clarification dated 4.1.2001, while VRS-2008 was not an open ended

Scheme.

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19. The claim of the private respondents did not find favour in the writ

proceedings, when the learned Single Judge dismissed the writ petition

on  20.2.2017.   The  private  respondent,  aggrieved  by  the  order  of

dismissal,  filed  a  Letters  Patent  Appeal,  which  was  allowed  vide

impugned order dated 17.1.2019.  The impugned order  seeks to draw

comparisons with the 2001 Scheme, the case of Ms. Sweety Bhalla, and

the  fact  that  since  the  revised  pay-scales  were  made  applicable  from

2007, when the private respondents were still in service, the same ought

to be applied to them.  The impugned order has relied on the principle

that pension is a benefit of past services and thus, is a continuing cause,

and since, in terms of the VRS-2008, the Pension Regulations had been

specifically  made  applicable,  any  revision  of  pay-scale,  which  has  a

consequence on the pension of existing employees should equally apply

to employees like the private respondents, who had taken the benefit of

the VRS.  The factum that all other benefits had been made available to

them, or that the endeavour to get certain other benefits and incentives

had failed in the earlier legal proceedings was distinguished on the basis

that pension had to be considered under a different parameter, and that

the VRS-2001, insofar  as pension was concerned,  was an open ended

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Scheme.

20. We have examined the submissions of  the rival  counsel  for  the

parties.

21. The principle ground for assailing the impugned order is that any

scheme for voluntary retirement is a package by itself.  One cannot, thus,

look to other voluntary retirement schemes, or other rules and regulations

for the said purpose.

22. In  our  view,  there  can  be  no  quibble  with  this  fundamental

principle.  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

Insurance Co. Ltd. & Anr2.  The view taken is that it is not appropriate to

add  or  subtract  from the  Scheme,  nor  can  any  concessions  be  given

contrary to the Scheme, or if they are not provided for under the Scheme.

What is to be seen are the clauses of the scheme under which voluntary

retirement has been taken and the terms of the scheme must be strictly

2(2018) 18 SCC 186

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followed.  This Court has observed as under:

“19.  We  have,  thus,  no  hesitation  in  coming  to  the conclusion  that  statutory  or  contractual,  such  voluntary retirement schemes as the SVRS-2004 Scheme have to be strictly adhered to,  and the very objective of  having such schemes would be defeated,  if  parts of  other  schemes are sought  to  be  imported  into  such  voluntary  retirement schemes. What is offered by the employer is a package as contained in the schemes of voluntary retirement, and that alone would 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. That was the only issue. That issue was decided against the beneficiaries of the SVRS-2004 Scheme. If there are certain observations made by that Bench while deciding so, qua aspects which are not forming the subject- matter of that dispute, the same cannot be read to amount to grant of relief/benefits, contrary to the terms of the Scheme, and that too, in the absence of any specific directions.

…. …. …. …. ….

22. It is, thus, abundantly clear that nothing more would be given than what is stated in the scheme, and for that matter, nothing less. If the employees avail of the benefit of such a scheme  with  their  eyes  open,  they  cannot  look  here  and there,  under  different  schemes,  to  see what  other  benefits can be achieved by them, by seeking to take advantage of the more beneficial schemes, while simultaneously enjoying the more beneficial aspects of the SVRS-2004 Scheme.”

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23. In the present case, VRS-2008 has received consideration right till

the  Supreme  Court  and  attained  finality  on  the  issue  of  benefits  and

incentives sought to be claimed beyond the Scheme, in  P.P.  Vaidya &

Ors.3 case.   Interestingly,  some  of  the  respondents,  apparently,  are

common  between  that  case  and  the  present  case.   Thus,  not  having

succeeded on one aspect, another aspect is now sought to be agitated.

24. We may usefully refer to the judgment in A.K. Bindal v. Union of

India4,  which set  forth the very rationale of introducing a scheme for

voluntary retirement, i.e., to reduce surplus staff and to bring in financial

efficiency.   It  is  in  this  context  that  it  is  referred  to  as  the  ‘Golden

Handshake’.   Ex gratia amounts are  paid,  not  for  doing any work or

rendering any service, but in lieu of employees leaving services of the

company and foregoing any further claims or rights in the same.  It is

optional,  not  compulsory.   It  is  a  take it  or  leave  it  situation.   Thus,

anyone availing of a VRS does so with his eyes wide open.  On having

availed  of  the  benefits  under  the  scheme,  if  there  are  future changes,

which may give any of the monetary benefits, the same cannot be read

3 (supra) 4(2003) 5 SCC 163

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into the scheme.  This would defeat the very purpose of having a VRS,

i.e.,  to  bring  in  financial  efficiency,  as  it  would  not  be  possible  that

despite having paid the amounts, the organization can be lumped with

further financial liability arising from re-thoughts by such persons, who

have already availed of the VRS.  The VRS cannot be frustrated in this

manner.

25. We have already discussed the terms of  the Scheme,  which are

quite  clear.   The  benefits  under  VRS-2008 are  many,  in  terms of  the

financial  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 Scheme while setting out the

prohibitive  clause  against  any further  compensation,  in  clause  9.4,  or

while stating that no revision shall be made in the voluntary retirement

amount on account of pay revision, as per clause 9.12.  The latter, in our

mind, leaves no manner of doubt.  The plea of the private respondents

that there were certain aspects on which the Scheme was nebulous and,

thus, the benefits on those accounts must be available to the respondents

(Bank of India v. K. Mohandas & Ors.5) is, hence, without any basis.

5(2009) 4 SCALE 576 (para 39)

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26. Learned  counsel  for  the  private  respondents  did  endeavour  to

emphasise  the  nature  of  the  pension  by  referring  to  the  constitution

Bench judgment in  D.S. Nakara v. Union of India6, in para 46, which

reads as under:

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

27. It  is  trite  to  say  that  the  aforesaid  principle  really  applies  to  a

retiree, and not to one who terminates his relationship with the employer

earlier,  often  for  greener  pastures,  and  takes  a  complete  package  of

various financial benefits, pension being only one of them.

6(1983) 1 SCC 305

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28. The complete substratum of the reasoning of the impugned order,

and for that matter, the arguments of the learned counsel for the private

respondents, supporting the reasoning, is based on the presumption that

VRS-2001  (in  operation  from 14.12.2000  to  15.1.2001)  was  an  open

ended scheme in character.  This, in our view, is a fallacious approach for

the reason that every scheme for voluntary retirement really has a time

frame.  Not only that,  VRS-2001 was followed by a fresh Scheme in

2003-2004,  and  thereafter  in  2008.   The  terms  of  the  Schemes  were

different.  While the 2001 scheme initially, in clause 8.7, provided for a

full and final settlement of claims, it is as per a clarification issued on

4.1.2001  that  the  benefit  was  extended,  to  provide  for  future  pay

revisions.  This was so far as the 2001 Scheme is concerned.  Even the

2003-2004 Scheme did not provide such clarification, and the endeavour

to  take  up  this  issue,  through  the  resolution  of  the  Rajya  Sabha

Committee  was not  successful  as  the  IFCI stuck by its  original  plan.

VRS-2008 left  no manner  of  doubt,  and possibly,  the IFCI was more

cautious to, again and again, emphasise through different clauses that it

would not be called upon to incur any other financial liability.

29. No  doubt  the  Pension  Regulations  referred  to  aforesaid  were

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specifically  included  as  a  benefit  under  VRS-2008.   However,  the

Pension Regulations and the VRS have to be read harmoniously and, in

the context of its inclusion, along with the other terms of the VRS.  If we

refer to the Pension Regulations, no doubt the date of retirement includes

the date on which the employee voluntarily retires, but that would mean

that the concerned employee would be deemed to have retired on the date

he terminates his relationship with the IFCI.  As to how emoluments have

to be calculated, it is the average emoluments of the last ten (10) months

of his service.  This would naturally mean the emoluments received just

prior to the termination of the relationship of employment.  If we turn to

the  IFCI  Regulations,  1974,  more  specifically  Regulation  33,  in  the

context  of  retirement  under the said Regulations taking their  meaning

from the 1974 Regulations, it refers to an option with an employee, on

attaining 50 years 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  respondents

contrary to the terms of VRS-2008.  The only thing is that, based on the

calculation of average emoluments for a period of ten (10) months prior

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to  that  date  when their  relationship  stood terminated,  the  pension has

been calculated.

31. The private respondents cannot claim parity with such people who

had  retired  after  full  length  of  service  and  did  not  terminate  their

relationship.  We had specifically put a question to the learned counsel

for the appellant, as to what would be the position qua persons who may

have retired on the same date, on attaining the age of superannuation, as

the persons who sought termination of relationship under VRS-2008 with

all the benefits.   The answer is categorical that such persons have not

been paid the benefit of revised pension for the past period.

32. We  must  keep  in  mind  that  pension  is  for  past  services,  as

elucidated.   However,  it  was  not  the  full  tenure,  but  the  tenure  was

terminated by mutual consent, before it would have reached the end, on

superannuation.   To  grant  the  private  respondents  the  benefit  of  pay

revision, retrospectively, and that to be taken into account for grant of

future pension would be a bounty which cannot be given to these private

respondents.   The  benefit  is  meant  for  persons  who  are  actually  in

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service, i.e., serving employees.  The endeavour of learned counsel for

the  respondents  to  plead  that  the  CTC  structure  was,  in  fact,  more

beneficial and, thus, the benefits were not given retrospectively, of the

RBI 2007 pay-scales, made applicable from 1.11.2013, would be of not

much use for the reason that even the CTC structure was introduced after

the termination 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

continuation of  RBI pay-scales,  in view of her  special  position,  being

visually challenged.  She was the sole person in this category and thus,

benefits were 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  some  other

similarly placed employees,  albeit  with respect  to special  benefits and

incentives.   It,  once  again,  talked  about  the  aspect  of  a  ‘Golden

Handshake’ and the delay in approaching the Court from the time when

7 (supra)

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the cause of action really arose.  In that context, it was observed that “the

employees who opt for voluntary retirement make a planning for future

and take into consideration all its implications. At the time of giving the

option,  they  know  where  they  stand  and  they  cannot  get  additional

benefits other than mentioned in the Scheme. They prepare themselves to

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 the P.P.

Vaidya & Ors.8 case and the present case.  In their context, more so, this

is a second battle which has been waged against the IFCI, claiming to be

on a different cause of action.  The principle as to why no other benefit,

other than under the VRS-2008 should be made available, remains the

same.  Even if we accept that their knowledge was derived only in 2014,

when  for  the  first  time  they  raised  the  issue,  the  same  was  rejected

promptly by the appellant within a few days.  Continuing representation

on the same issue is really not of much use.  As observed earlier, there is

a gap of  one and a half  years between the last  representation and the

sending of a legal notice.  This, by itself, could have been fatal, but the

8 (supra)

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private  respondents  must  fail  on  multifarious  grounds,  discussed

aforesaid and this aspect has been discussed only in the context of the

plea being raised by IFCI/appellant.

36. If the RBI pay-scales had been adopted by IFCI with retrospective

effect,  the  private  respondents  could  never  have  had  a  claim as  their

chapter was closed.  Merely because, for existing employees, RBI pay-

scales had been applied, albeit retrospectively, without past benefits, that

cannot be a ground to start getting pension on the basis of a calculation

based on those  revised  pay-scales,  on  the  reasoning that  pension is  a

continuing right  for  past  services rendered.   The very cut-off  date for

calculation of pension, for the private respondents, was the date of their

termination  of  relationship,  and  the  calculation  of  pension  under  the

Pension  Regulations  also  proceeds  on  the  basis  of  the  last  ten  (10)

months’ salary prior to that date.

37. We are firmly of the view that the present endeavour by the private

respondents  is  a  misadventure  and  has  to  be  rejected  without  any

hesitation.  The impugned order of the Division Bench of the High Court

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is, thus, set aside.

38. The appeal is accordingly allowed.

39. We would have been inclined to impose costs but for the fact that

the private respondents would be mostly pensioners by now.

...……………………………J. [Sanjay Kishan Kaul]

...……………………………J. [K.M. Joseph]

New Delhi. September 17, 2019.

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