TMI Blog2001 (9) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... athi Reddy, R. Santhana Krishnan, Shambhunath Singh, D. Mahesh Babu and Sunil Kumar for the Respondent. JUDGMENT Rajendra Babu, J. When certain proceedings were pending before the Board for Industrial and Financial Reconstruction (BIFR), a settlement was reached between the employees of the Bus Body Division and 1,537 employees of Hyderabad Allwyn Ltd. ( HAL ) and their management under section 12 of the Industrial Disputes Act, 1947 ( the Act ). Memorandum of Understanding (MoU) was also reached on 28-3-1993 with Voltas Ltd., Government of Andhra Pradesh and HAL. In that MoU, one of the clauses provided as follows : "As regards employees numbering 1,486, HAL will enter into satisfactory arrangements with the Government of Andhra Pradesh for their deployment elsewhere." 2. The Government of Andhra Pradesh thereafter considered the modalities of placement of 1,486 employees of the company and a Cabinet Sub-Committee was constituted which considered the recommendations made by a High Power Committee and the operating agency appointed by BIFR. The Managing Director, HAL, was asked to identify the 1,486 employees and allot them to the various heads of the departments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ateral induction of employees of public sector undertakings was bound to lead to endless litigation. The Committee recommended to the Government to take a decision not to absorb or induct surplus staff of public sector undertakings into Government service in future. The Government approved the recommendations of the High Power Committee. On 1-10-1996, the Government issued a notification mentioning the difficulties in the matter of regularisation of the surplus workers and the decision to abolish all the supernumerary posts with effect from 30-11-1996 and to provide for payment of an amount for rehabilitation equal to 1 month s pay including dearness allowance for every year of completed service subject to a minimum amount of Rs. 30,000 for each employee in addition to other statutory dues. 5. An Ordinance was promulgated which came into effect from 30-11-1996 prohibiting absorption of employees of State public sector undertakings in the Government service and cancelling all orders of the Government appointing any employee of the State public sector undertakings to any post in a public service on the ground that the undertaking had become sick or was likely to become sick or w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been relieved and given benefits under the voluntary retirement scheme and the remaining 12 employees had been retained for winding up operations. The said employees are all stated to be senior to the workmen who are the respondents in the present batch of cases and that scheme was challenged before this Court in Dayakar Reddy v. Managing Director, Allwyn Auto Ltd. [2000] 9 SCC 247, and this Court upheld the scheme implemented by the State Government in respect of the employees of the erstwhile Allwyn Auto Ltd., a company formed by way of implementation of this very BIFR scheme and issued appropriate directions to the company with regard to extension of the benefits of the voluntary retirement scheme to workmen, who had not opted for the same. 9. Shri P.P. Rao, the learned senior advocate, appearing for the appellants, contended as follows : 1. Section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the SICA ) cannot override the provisions of the A.P. Prohibition of Absorption of Employees of State Government Public Sector Undertakings into Public Service Act, 1997, which, in pith and substance, is a law falling with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he BIFR scheme is binding on the Government notwithstanding the Andhra Pradesh Act No. 14 of 1997, the BIFR ought to have allowed the State Government s request to modify the scheme so as to facilitate a golden handshake in terms of G.O. Ms. No. 192 dated 1-10-1996. The reasons given by the BIFR for rejecting the Government s request are unsustainable. 10. In support of the aforesaid propositions, Shri P.P. Rao relied upon the decisions of this Court in Prafulla Kumar Mukherjee v. Bank of Commerce LR 74 IA 23; A.S. Krishna v. State of Madras [1957] SCR 399; State of Rajasthan v. G. Chawla [1959] Supp. 1 SCR 904; State of Andhra Pradesh v. McDowell Co. [1996] 3 SCC 709; P.N. Krishna Lal v. Government of Kerala [1995] Supp. 2 SCC 187; Management of Dandakaranya Project v. Workmen [1997] 2 SCC 296; N. Ramanatha Pillai v. State of Kerala [1974] 1 SCR 515; K. Rajendran v. State of Tamil Nadu [1982] 3 SCR 628; Union of India v. Godfrey Philips [1985] Supp. 3 SCR 123; Kasinka Trading v. Union of India [1995] 1 SCC 274; Excise Commissioner, U.P. v. Ram Kumar [1976] Supp. SCR 532. 11. Shri M.N. Rao the learned senior advocate, appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid would be completed before the sanction of the scheme. The scheme having been already sanctioned by the BIFR, it must be taken that the employees in different establishments have been identified and their placement in the various Government departments and the public sector undertakings is complete. It is not necessary to look into any other document. The reports of the various Committees and the Government orders issued thereon will have no relevance at all. When the necessary material had been placed before the BIFR and the BIFR had gone into the same and thereafter sanctioned the scheme in the manner stated above, we think the finding recorded by the High Court that the surplus employees of HAL have been absorbed in the services of the Government and they are employees of the State is justified. 14. The sequiter is that when the Act was made effective from 26-11-1996, the Act cannot have any application to the present employees at all. It may be for the purpose of convenience or for other reasons, the Government may have placed them in supernumerary post or other kinds of posts, but it was publicly declared before a competent statutory forum that the modalities for plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim the benefits arising under such VRS. But this factor does not have any bearing on the present case because even in certain flourishing and prosperous companies, many of the employees volunteer to retire on account of their personal reasons depending upon whether benefits arising therein would be advantageous to them. If such attractive schemes are offered to the employees in the present case also, as to what the employees would do, is not for us to predict. Particularly, when the employees have been held to be workmen and we have left open the question as to whether they can invoke the provisions of the Industrial Disputes Act, it is for them to decide as to whether action should be taken or not. Therefore, the fact that the Voluntary Retirement Scheme being applied in Allwyn Watches Ltd. would not influence us to deviate from the approach made by us in the matter. 19. Whether absorption of the employees by the Government would be a drain on the public exchequer was a matter certainly present in the mind of the Government before taking various steps culminating in the scheme sanctioned by the BIFR. In trying to solve various problems, the Government has to balance seve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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