Non-Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

 Civil Appeal Nos. 9217- 9218 of 2019

Kandla Port Workers Union  .... Appellant(s)

Versus

FCI & Ors.            …. Respondent(s)

J U D G M E N T

L. NAGESWARA RAO, J.

1. By  an  order  dated  09.05.1996,  the  Central

Government  transferred  15  employees  who  were

working  in  the  Vacuvator  Division  of  the  Kandla  Port

Trust (for short, ‘KPT’) to the Food Corporation of India

(for short, ‘FCI’) with effect from 01.01.1973.  Aggrieved

by the benefit not being extended to the remaining 306

employees of the KPT who were transferred to FCI, the

Appellant-Union filed Special  Civil  Application No.6891

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of 1996 in the High Court of Gujarat.   The application

was allowed by a learned Single Judge and a direction

was issued to the FCI, Respondent No.1-herein to issue

an  appropriate  order  clarifying  that  all  the  321

employees who were working in the Vacuvator Division

of the KPT should be treated to have been transferred

under Section 12A of the Food Corporation of India Act,

1964 (“the FCI Act, 1964” for short)  w.e.f. 01.01.1973.

Respondent No.1 appealed to the Division Bench of the

High Court.  The judgment of the learned Single Judge

was set aside and it was held by the Division Bench, by

order  dated  09.05.1996,  that  306  members  of  the

Appellant-Union  were  not  entitled  to  the  benefits

granted  to  15  employees.   The  correctness  of  the

judgment  of  the  Division  Bench  is  challenged  by  the

Appellant by way of filing the above Appeals.   

2. An  agreement  was  entered  into  between  the

Government  of  India  and  the  Trustees  of  the  Port  of

Kandla (KPT) on 08.04.1965 by which the KPT accepted

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to act as an agent of the Government for the purpose of

assembly,  operation  and  maintenance  of  wheat

discharging machines on behalf of the Government of

India in connection with discharge of food grains from

tankers/ vessels arriving at Kandla as and when required

by  the  Government  of  India.   According  to  the

Agreement, the KPT was responsible for the operation

and maintenance of the machines with a view to obtain

the best possible performance  therefrom and for the

said purpose, KPT shall ensure adequate staff at various

stages of  operation and maintenance.   It  was further

agreed that the Government shall, on conclusion of the

Agreement, take over the staff engaged by the KPT.   

3. An  order  was  passed  by  the  FCI  on  18.09.1973

taking over the staff of the Vacuvator Division of the KPT

w.e.f. 01.01.1973.   By  the  said  order,  the  regular

employees of KPT were taken over as confirmed in the

appropriate posts and they would be governed by the

service  conditions  prescribed  in  the  FCI  (Staff)

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Regulations,  1971  (“the  Regulations”  for  short).   The

work  charge  employees  were  taken  over  as  regular

employees  w.e.f.  01.01.1973  and  they  would  be

governed by the service conditions in respect of leave,

probation,  disciplinary  action,  etc.,  according  to  the

Regulations.  The employees were made eligible to the

pay as fixed and indicated in the Annexure to the said

order  w.e.f. 01.01.1973 in the FCI’s scale of pay.  The

employees who were taken over would be governed by

the Food Corporation of India CPF Regulations.  All the

employees who worked in the Vacuvator Division of KPT

joined and continued to work in the FCI.  

4. In the meanwhile, an industrial dispute was raised

which was referred to the Industrial Tribunal.  The terms

of reference are as follows:

“1. Whether the action of the management of

FCT,  Adipur  in  not  extending  the  Option  to

elect  revised  pay  scales  to  15  workmen  of

Vacuvator Division Switched over from Kandla

port  Trust  to  FCT,  Adipur  with  effect  from

1.1.1973  or  from  the  subsequent  date  after

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drawing increments etc., is justified?  If not, to

what relief these workmen are entitled to and

from what date?

2. Whether the action of the management of

Food  Corporation  of  India  Adipur  in  not

regularizing  the  CPF/  GRP  subscription  and

contribution  from  1965  to  March,  1973  in

respect  of  the  workmen  switched  over  from

Kandla Port Trust to Food Corporation of India,

Adipur from CPF to CPP scheme is justified if

not, to what relief the concerned workmen are

entitled and from which date?”

5. The reference  was allowed and Respondent  No.1

was directed to give an option to the 15 persons whose

names were mentioned in the award as per Para 3 of

the  Circular  dated  01.05.1976  and  fix  their  pay  and

increments accordingly.  The said workmen were held to

be entitled to exercise option under Section 12A (4) of

the  FCI  Act,  1964  on  their  transfer  to  the  FCI  w.e.f.

01.01.1973.  Respondent No.1 was unsuccessful in the

challenge made to the award before the learned Single

Judge of the High Court.  In a reference made by the

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Government  of  India  under  Section  10(2)  of  the

Industrial Disputes Act, 1947, the Central Government

Industrial Tribunal directed seniority to the employees of

the FCI in the Vacuvator Division from the dates of their

initial appointment in KPT.

6. In exercise of the powers conferred by Section 12A

of  the  FCI  Act,  1964,  the  Central  Government

transferred 15 employees to the FCI  w.e.f.  01.01.1973

by  an  order  dated  09.05.1996.   The  Appellant-Union

filed  Special  Civil  Application  No.6891  of  1996

questioning  the  grant  of  transfer  to  the  FCI  w.e.f.

01.01.1973 only to 15 employees and not the remaining

306  employees.   It  was  contended  by  the  Appellant-

Union in the said application that there were two terms

of  reference  which  were  answered  in  favour  of  the

employees.     Though  the  operative  portion  was

confined  to  15  employees,  the  Industrial  Tribunal

directed  that  all  the  employees  who  worked  in  the

Vacuvator Division shall  be entitled to exercise option

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under Section 12A (4) of the FCI Act.   The Appellant-

Union averred in the Special Civil Application that all the

employees were similarly situated and the restriction of

the  benefit  of  transfer  w.e.f. 01.01.1973  only  to  15

employees  resulted  in  hostile  discrimination.   The

application was allowed by a learned Single Judge,  in

which  it  was held that  the benefit  granted to  the 15

employees  should  be  extended  to  all  the  other

employees  who  were  taken  over  by  the  FCI  on

01.01.1973.  The award of the Industrial Tribunal dated

18.05.1987 was interpreted by the learned Single Judge

as covering all the 321 employees.  On such basis, the

learned Single Judge directed Respondent No.1 to issue

an  appropriate  order  clarifying  that  all  the  321

employees shall be deemed to have been transferred to

the  FCI  under  Section  12A  of  the  FCI  Act  w.e.f.

01.01.1973.        

7. The  Division  Bench  allowed  the  Appeal  filed  by

Respondent  No.1  by  holding  that  the  transfer  of

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employees who worked in the Vacuvator Division of the

KPT should be done by the Central Government.  Only

permanent employees of the KPT were granted benefit

of transfer w.e.f. 01.01.1973.  However, the work charge

employees were taken over as regular employees w.e.f.

01.01.1973 and were also given the benefits of leave,

probation,  disciplinary  action,  etc.  in  accordance  with

the  provisions  of  the  FCI  Regulations.   As  per  the

Agreement  dated  08.04.1965,  the  work  charge

employees  of  the  KPT  have  been  taken  over  by

Respondent No.1- FCI.  The Division Bench of the High

Court held that in case the work charge employees did

not take up their  option of  takeover by the FCI,  they

would have faced retrenchment from the service of the

KPT.  The submission of the Appellant-Union that Section

12A of the FCI Act is applicable to the members of the

Appellant-Union was rejected by the Division Bench of

the  High  Court  and  it  was  held  that  the  provision  is

applicable to the Central Government employees only.

Moreover, the work charge employees signed General

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Conditions of Employment with their erstwhile employer

i.e. KPT that they would not claim pension or gratuity

which  are  extended  to  the  Central  Government

employees.  The Office Order dated 18.09.1973, which

was issued pursuant to an agreement, provided that the

employees  taken  over  by  Respondent  No.1  shall  be

governed by the FCI CPF Regulations.  The conclusion

reached by  the learned Single  Judge that  the benefit

conferred  on  the  15  regular  employees  of  the  KPT

should have been given to the others was not approved

by the Division Bench and it observed that the operative

portion of the award conferred benefit only to 15 regular

employees of the KPT and not to the other work charge

employees.   The  Division  Bench  of  the  High  Court

highlighted  the  latches  on  the  part  of  the  Appellant-

Union in filing the Special Civil Application in the year

1996 for  a  relief  that  they  were  claiming  from 1973.

However, the Division Bench directed Respondent No.1

to make payment of gratuity for the service rendered by

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the work charge employees prior  to 1973,  while they

were employed with the KPT.     

8. Mr. Nikhil Goel, learned counsel appearing for the

Appellant-Union  referred  to  the  Agreement  dated

08.04.1965 to contend that the Government shall take

over the staff engaged by the KPT on conclusion of the

Agreement.            Mr. Goel relied upon the award of the

Industrial Tribunal dated 05.08.1991 to submit that the

relief  sought  for  by  the  work  charge  employees  in

relation to regularization of CPF/ GRF subscription and

contribution from 1965 to 1973 was answered in their

favour.   He  contended  that  though  demand  No.1

pertains to the 15 workmen, demand No.2 relates to the

work charge employees as well, and this demand was

allowed by the Industrial Tribunal.  He took us through

the award to submit that the Tribunal held that Section

12A  of  the  FCI  Act  is  applicable  to  the  work  charge

employees.                He argued that the cause of action

for filing the Special Civil  Application on behalf of the

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work charge employees arose only after the order dated

09.05.1996 was passed by the Government of India by

which  benefit  of  the  award  dated  05.08.1991  of  the

Industrial Tribunal was given only to 15 employees.  He

submitted that learned Single Judge is right in allowing

the  Writ  Petition  by  holding  that  the  work  charge

employees cannot be discriminated in the grant of the

benefit extended to only 15 regular  employees.    Mr.

Goel  supported  the  conclusion  of  the  learned  Single

Judge  that  the  Tribunal  was  right  in  holding  that  the

work  charge  employees  have  to  be  treated  to  be  in

service  prior  to  01.01.1973.   Mr.  Goel  criticized  the

judgment of the Division Bench by arguing that reliance

could not have been placed on the operative portion of

the award of the Industrial Tribunal which was restricted

only to 15 employees.  

9. Mr. N.K. Kaul, learned Senior Counsel appearing for

Respondent  No.1  submitted  that  the  work  charge

employees were appointed in the FCI  w.e.f. 01.01.1973

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and  were  governed  by  the  FCI  Regulations.   No

grievance was raised by them till the year 1996 when

the  benefit  of  the  award  dated  05.08.1991  of  the

Industrial  Tribunal  was  granted  to  the  regular

employees.  He submitted that no parity can be claimed

by  the  work  charge  employees  and  they  should  not

have complained as they could have been retrenched in

1973  itself.   They  agreed  to  be  bound  by  the  FCI

Regulations and all  of them have retired from the FCI

after working continuously from 01.01.1973.  The Office

Order  dated  18.09.1973  clearly  mentions  that  the

employees  would  be  governed  by  the  FCI  CPF

Regulations.  He commended for our consideration the

approval of the judgment of the Division Bench.   

10. The  nub  of  the  dispute  revolves  around  the

entitlement of the work charge employees to the relief

that  was  granted  to  the  15  regular  employees.   The

Office Order  of  the  FCI  dated  18.09.1973 was  issued

under Clause XIX of  the Agreement dated 08.04.1965

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entered  into  between  the  President  of  India  and  the

Trustees of the Port of Kandla.  A clear distinction was

made in  the Office Order  between regular  employees

and work  charge employees.   The regular  employees

were taken over as confirmed in their appropriate posts

and they would be subject to the FCI (Staff) Regulations,

1971  regarding  service  conditions.   According  to  the

said agreement, the work charge employees were also

taken over as regular employees from 01.01.1973 and

would be bound by the FCI  (Staff) Regulations,  1971.

The award dated 05.08.1991 of the Industrial  Tribunal

requires  to  be considered in  a  detailed manner.   The

reference  pertains  to  the  demand  regarding  the

extension of option to select revised pay scales to the

15 workmen of the Vacuvator Division of KPT who were

taken over by the FCI.   

11. As  noted  above,  the  first  question  before  the

Tribunal  pertained  to  the  dispute  regarding  the  pay

scales of 15 workmen of Vacuvator Division who were

switched over from KPT to FCI  w.e.f. 01.01.1973.  The

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second question related to the regularization of the CPF/

GRP subscription and contribution from 1965 to March,

1973 in respect of the workmen switched over from KPT

to  FCI  from  CPF  to  CPP  scheme.   While  answering

question  No.2,  the  Tribunal  held  that  the  pensionery

liability and CPF liability of the staff taken over by the

FCI would commence from 01.03.1965 and the service

of  the  members  of  the  staff  shall  be  treated  as

continuous from 01.03.1965.  The Tribunal held that the

members of the staff had subscribed to the GRP scheme

and they were entitled to the pensionery benefits.  The

unilateral action on the part of the FCI in shifting them

from GPF to CPF was found fault with by the Tribunal.

Admittedly, the work charge employees were governed

by the GPF scheme prior  to  their  joining the FCI  and

they were switched over to the CPF scheme, which was

held to be arbitrary by the Tribunal.  The Tribunal further

held that the transfer must necessarily be governed by

Section 12A of the FCI Act. On the basis of the above

findings, the Tribunal was of the opinion that there was

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substance in the demand made by the Appellant-Union.

However,  the operative portion of  the award pertains

only to the grant of the relief that was claimed by the 15

workmen.  

12. The  order  dated  09.05.1996  was  passed  by  the

Government of India granting the relief of transfer of the

15 employees to the FCI w.e.f. 01.01.1973.  This was in

compliance with the direction issued by the Industrial

Tribunal by its award dated 05.08.1991.  

 13. The distinction between a regular employee and a

work  charge  employee  cannot  be  ignored.   The

questions raised in the reference before the Industrial

Tribunal also deals with the regular employees and work

charge employees separately.  The ultimate relief that

was granted by the Tribunal is also restricted to the 15

workmen  who  were  regular  employees.   There  is  no

doubt  that  the  findings  recorded  by  the  Industrial

Tribunal pertaining to the arbitrary or unilateral change

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of Respondent No.1 from GPF to CPF are  qua the work

charge employees.     

14. The Office Order dated 18.09.1973 by which all the

employees who were working in the Vacuvator Division

of the KPT were employed in the FCI also shows that

regular  employees  and  work  charge  employees  were

treated differently.  Even assuming that the work charge

employees also had a right to be appointed in the FCI,

they  cannot  claim parity  with  the  regular  employees,

that  too  in  1996.   After  having  accepted  the

appointment  in  FCI  as  per  the  Office  Order  dated

18.09.1973, it is not open to the Appellant-Union to take

up the cause of the work charge employees and claim

on their behalf benefits similar to those granted to the

regular employees.  

15. The Division Bench of the High Court directed that

Respondent No.1-FCI shall make payment of gratuity to

those  employees  who  shall  give  details,  such  as  the

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dates of their joining in the KPT, by treating them as

employees of the FCI.

16. Though,  we  are  not  in  agreement  with  the

judgment of the Division Bench that the award of the

Industrial Tribunal did not deal with question No.2 in the

reference made to it,      for the reasons recorded above

we hold that the Appellants are not entitled to the relief

claimed by them.  Therefore, the Appeals are dismissed.

             ..…………….........................J.

                                     [L. NAGESWARA RAO]

                                     .…………..……...................J.                                                 [HEMANT GUPTA]

New Delhi, December 06, 2019.

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