# Smt. Dulari Devi & Ors v. Union of India & Ors

- **Citation:** (2020) 1 ILRA 1845
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-11-14
- **Case number:** Writ-A No. 21944 of 2003
- **Bench:** Sudhir Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/smt-dulari-devi-ors-v-union-of-india-ors-45073
- **Pages:** 24

## Headnote

Sri A.N. Roy, A.S.G.I., Sri Arun Kumar, Sri
Arvind Srivastava, Sri Ashok Singh, Sri
B.N. Singh, Sri K.C. Shukla, Sri K.C. Sinha,
Sri K.C. Srivastava, Sri K.K. Shukla, Sri
R.S. Mishra, S.S.C.

A. Service - Retrenchment - Industrial
Disputes Act, 1947: Section 25-L(b)(ii),
25-K, 25-N, 25-N(1)(a), 25-N(2), 25N(3), 25-N(9), 25-S; Industrial Disputes
Rules, 1957: Rule 76-A; Constitution of
India: Art. 77; Companies Act, 1956:
Section
619,
620;
Sick
Industrial
Companies
(Special
Provisions)
Act,
1985: Section 3(1)(o);

VSS is a well-recognized mode of "Golden
Handshake"
principle
known
in
the
business
world
-
Circular
dated
16.09.2002 circulating VSS was not found
illegal and arbitrary - Facts demonstrate the
genuineness of claim of respondent-Employer
that it had sustained losses, became sick to the
extent of incapable of revival/ rehabilitation,
hence, its closure was found appropriate.
Petitioners could not demonstrate any of the
terms and conditions, to be unreasonable,
illegal or against public policy so as to justify
interference by this Court. Opting of VSS by all
employees
i.e.
5712
(except-11
i.e.
petitioners), also shows that terms and
conditions of VSS are reasonable and almost all
employees were satisfied with them. (Para 47,
50 to 53)

B. Every individual company incorporated
and
registered
is
a
separate
and
independent entity and employees of
such company, as a matter of right,
cannot claim employment in another
company since every company has its own
right in its individual employer and has its own
authority and power to make appointment of
its employees. Promotor of FCIL is GOI, as it
holds 100% shares of FCIL. But it still is an
independent and separate legal entity, different
from its Promotor. Employees of such company
cannot be said to be employees of Central
Government or Promoters of Company.

Petitioners could not show any legal or
otherwise right to claim that FCIL has
obligation
to
ensure
their
absorption/rehabilitation or re-employment or
continued
employment
in
any
other
company/department of Central Government.
No appointment in any manner can be made
on any post in the department of Government
contrary to statutory provisions made for such
recruitments and appointments. (Page 55, 56,
73 & 74)

C. Sufficient compliance with procedure
prescribed - Facts indicate that workmen
concerned have been given notice in writing as
required u/s 25-N(1)(a). A copy of application
was sent by speed post as required u/s 25N(2). Petitioners also availed opportunity of
hearing given by the Government Department.
After
receiving
approval
from
GOI,
retrenchment orders along with retrenchment
compensation were sent to petitioners by
registered post, which they refused to receive.
Therefore,
there
is
no
illegality
in
retrenchment/termination. (Para 82 to 90)
1 All. Smt. Dulari Devi & Ors. Union of India & Ors.
1847
Writ Petition dismissed. (E-4)

Precedent followed: -

## Text

_Characters 0–39,966 of 76,363. This is a partial read: ask again with offset=39966 for what follows._

1846 INDIAN LAW REPORTS ALLAHABAD SERIES
26.11.1996 are hereby quashed and the
orders
dated
07.01.2004
whereby
representation
of
petitioner
in
Writ
Petition No. 21669 of 2004 and Writ
Petition No. 21210 of 2004 have been
rejected are also set aside.
----------
(2020)1ILR 1845

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 14.11.2019

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Writ-A No. 21944 of 2003

Smt. Dulari Devi & Ors. ...Petitioners
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioners:
Sri M.D. Mishra, Sri J.H. Khan, Sri N.H.
Khan, Sri W.H. Khan, Sri Ramanuj Pandey,
Sri Awadhesh Kumar

Counsel for the Respondents:
Sri A.N. Roy, A.S.G.I., Sri Arun Kumar, Sri
Arvind Srivastava, Sri Ashok Singh, Sri
B.N. Singh, Sri K.C. Shukla, Sri K.C. Sinha,
Sri K.C. Srivastava, Sri K.K. Shukla, Sri
R.S. Mishra, S.S.C.

A. Service - Retrenchment - Industrial
Disputes Act, 1947: Section 25-L(b)(ii),
25-K, 25-N, 25-N(1)(a), 25-N(2), 25N(3), 25-N(9), 25-S; Industrial Disputes
Rules, 1957: Rule 76-A; Constitution of
India: Art. 77; Companies Act, 1956:
Section
619,
620;
Sick
Industrial
Companies
(Special
Provisions)
Act,
1985: Section 3(1)(o);

VSS is a well-recognized mode of "Golden
Handshake"
principle
known
in
the
business
world
-
Circular
dated
16.09.2002 circulating VSS was not found
illegal and arbitrary - Facts demonstrate the
genuineness of claim of respondent-Employer
that it had sustained losses, became sick to the
extent of incapable of revival/ rehabilitation,
hence, its closure was found appropriate.
Petitioners could not demonstrate any of the
terms and conditions, to be unreasonable,
illegal or against public policy so as to justify
interference by this Court. Opting of VSS by all
employees
i.e.
5712
(except-11
i.e.
petitioners), also shows that terms and
conditions of VSS are reasonable and almost all
employees were satisfied with them. (Para 47,
50 to 53)

B. Every individual company incorporated
and
registered
is
a
separate
and
independent entity and employees of
such company, as a matter of right,
cannot claim employment in another
company since every company has its own
right in its individual employer and has its own
authority and power to make appointment of
its employees. Promotor of FCIL is GOI, as it
holds 100% shares of FCIL. But it still is an
independent and separate legal entity, different
from its Promotor. Employees of such company
cannot be said to be employees of Central
Government or Promoters of Company.

Petitioners could not show any legal or
otherwise right to claim that FCIL has
obligation
to
ensure
their
absorption/rehabilitation or re-employment or
continued
employment
in
any
other
company/department of Central Government.
No appointment in any manner can be made
on any post in the department of Government
contrary to statutory provisions made for such
recruitments and appointments. (Page 55, 56,
73 & 74)

C. Sufficient compliance with procedure
prescribed - Facts indicate that workmen
concerned have been given notice in writing as
required u/s 25-N(1)(a). A copy of application
was sent by speed post as required u/s 25N(2). Petitioners also availed opportunity of
hearing given by the Government Department.
After
receiving
approval
from
GOI,
retrenchment orders along with retrenchment
compensation were sent to petitioners by
registered post, which they refused to receive.
Therefore,
there
is
no
illegality
in
retrenchment/termination. (Para 82 to 90)
1 All. Smt. Dulari Devi & Ors. Union of India & Ors.
1847
Writ Petition dismissed. (E-4)

Precedent followed: -

1. A.K. Bindal and another Vs. Union of India
and others, JT 2003 (4) SC 328 (Para 34, 41,
53, 58 & 59)

2. Officers and Supervisors of IDPL Vs.
Chairman and M.D. IDPL and others, JT 2003
(6) SC 68 (Para 34, 57, 59)

3. State of U.P. and another Vs. UPTRON
Employees Union, CMD and others, AIR 2006
SC 2081 (Para 60)

4. Heavy Engineering Mazdoor Union Vs. State of
Bihar and others, (1969) 1 SCC 765 (Para 61)

5. Steel Authority of India and others Vs.
National Union Water Front Workers and
others, (2001) 7 SCC 1 (Para 62)

6. Kanpur Jal Sansthan and another Vs. Bapu
Construction, (2015) 5 SCC 267 (Para 63)

7. State of Punjab and others Vs. Raja Ram
and others, (1981) 2 SCC 66 (Para 64)

8. Ramana Dayaram Shetty Vs. International
Airport Authority of India and others, (1979) 3
SCC 489 (Para 64)

9. Food Corporation of India Vs. Municipal
Committee, Jalalabad, AIR 1999 SC 2573 (Para
65)

10. M/s Electronics Corporation of India Ltd
etc.
Vs.
Secretary
Revenue
Department,
Government of Andhra Pradesh, AIR 1999 SC
1734 (Para 65)

11. Pradeep Kumar Biswas Vs. Indian Institute
of Chemical Biology and others, 2002 (5) SCC
111 (Para 66)

12. National Textile Corporation Ltd Vs. Naresh
kumar Badri Kumar Jagad and others, AIR
2012 SC 264 (Para 67)

13. Satinder Singh Arora Vs. State Bank of
Patiala and others, 1992 Supp (2) SCC 224
(Para 68)
14. State Bank of India Vs. S. Vijaya Kumar,
(1990) 4 SCC 481 (Para 69)

15.
Rajasthan
State
Road
Transport
Corporation Ltd. and others Vs. Gurudas Singh,
(2004) 13 SCC 418 (Para 70)

16. Ajit Kumar Nag Vs. General Manager (PJ),
Indian Oil Corporation Ltd. Haldia and others,
(2005) 7 SCC 764 (Para 71)

17. S.L. Agarwal (Dr.) Vs. G.M. Hindustan Steel
Ltd., (1970) 1 SCC 177 (Para 71)

18. State of Uttar Pradesh Through the
Principal Secretary and others Vs. Kalpana
Verma and another, (2019) 1 UPLBEC 659
(Para 72)

Precedent distinguished: -

1. Workmen of Meenakshi Mills Ltd. Vs.
Meenakshi Mills Ltd. and another, AIR (1994)
SC 2697 (Para 28(vi), 89)

Precedent cited: -

1. Shiv Kumar and others Vs. State of Haryana
and others, (1994) 4 SCC 445 (Para 28(iii))

2. Om Prakash and another Vs. Union of India
and another, JT 2010 (2) SC 91 (Para 28(iv))

3. Jaipur Development Authority and others Vs.
Vijay Kumar Data and others, (2011) 12 SCC
94 (Para 28(vi))

4. Anoop Sharma Vs. Executive Engineer,
Public Health Division No. 1 Panipat (Haryana),
JT 2010 (4) SC 229 (Para 28(viii))

5. M/s Orissa Textiles and Steel Ltd. Vs. State
of Orissa and others, AIR 2002 SC 708 (Para
35)

6. State of Rajasthan and another Vs. Sripal
Jain, AIR 1963 SC 1323 (Para 35)

7. Major E.G. Barsay Vs. State of Bombay, AIR
1961 SC 1762 (Para 35)

8. State of Maharashtra and others Vs. Basanti
Lal and another, AIR 2003 SC 4688 (Para 36)
1848 INDIAN LAW REPORTS ALLAHABAD SERIES
9. Air India Cabin Crew Association Vs. Yeshawinee
Merchant and others, AIR 2004 SC 187 (Para 36)

Petition
challenges
Circular
dated
16.09.2002,
circulating
"Voluntary
Separation
Scheme",
letter
dated
28.04.2003, sent by Chairman/Managing
Director, FCIL to GOI, Ministry of Labour,
order dated 09.07.2003, issued by Deputy
Director, GOI, Ministry of Labour.

(Delivered by Hon'ble Sudhir Agarwal, J.)

1. Heard Sri W.H. Khan, learned
Senior Advocate assisted by Sri J.H. Khan,
learned counsel for petitioners; and, Sri
Arun Kumar, learned counsel appearing
for respondents-2, 3 and 4, Sri Arvind
Srivastava, learned counsel for proposed
respondent-6 and Sri A.N. Roy, learned
counsel for Union of India.

2. This writ petition under Article 226
of Constitution of India has been filed by nine
petitioners namely, Smt. Dulari Devi, Ram
Darash, Jagan Nath, Dina Nath Sonkar,
Dwigendra Kumar Singh, Mahabal Prasad,
Harendra
Kumar
Singh,
Murari
and
Bhawnath, all employed and working on
different posts like Counter Clerk, Personal
Assistant,
Junior
Stenographer,
Senior
Accounts Assistant, Technician Grade-I and
Grade-II, Gang Man and Pump Operator
Grade-2 in Fertilizer Corporation of India
Limited (hereinafter referred to as "FCIL")
Unit, Gorakhpur. They have prayed for issue
of a writ of certiorari to quash Circular dated
16.09.2002 (Annexure-4 to the writ petition)
circulating "Voluntary Separation Scheme"
(hereinafter referred to as "VSS") due to
closure of FCIL and notice dated 28.04.2003
sent by Chairman/Managing Director, FCIL
addressed to Government of India, Ministry
of Labour seeking permission for proposed
retrenchment of above nine workmen i.e.
petitioners, with effect from 30.06.2003.

3.

Subsequently,
by
way
of
amendment,
petitioners
have
also
challenged
order
dated
09.07.2003
(Annexure-8 to the writ petition) issued by
Deputy Director, Government of India,
Ministry of Labour granting approval for
retrenchment
of
nine
workmen
i.e.
petitioners;
Memorandum
dated
11.07.2003 (Annexure-9 to the writ
petition) which are nine in number issued
to
all
petitioners,
separately,
giving
another opportunity to them to opt for VSS
by 31.07.2003 failing which they shall be
retrenched;
and
Memorandum
dated
01.08.2009
issued
to
all
petitioners
(collectively filed as Annexure-10 to the
writ petition), issued by General Manager,
FCIL retrenching all petitioners with effect
from 01.08.2003 since they did not opt for
VSS.

4. Petitioners have also prayed for
issue of a writ of mandamus commanding
respondents to absorb petitioners in any
other unit of Government of India i.e.
Jodhpur
Mining
Organization
or
Hindustan Fertilizers Corporation, Nampur
or any other Government of India
Undertaking, including Central Schools,
being run in the premises of FCIL Unit at
Gorakhpur. A further direction has been
sought to respondents to make payment
under VSS/retrenchment compensation at
the rate of 90 days per year for the balance
service of all petitioners as has been given
to the employees who have opted for VSS.

5. Facts in brief, as stated in the writ
petition, are that FCIL (a Government of
India undertaking under the Ministry of
Chemicals and Fertilizer, Department of
Fertilizers), is a Company whereof 100 %
shares are held by Government of India. It
was incorporated as a Central Government
Company
under
the
provisions
of
1 All. Smt. Dulari Devi & Ors. Union of India & Ors.
1849
Companies Act, 1956 (hereinafter referred
to as "Act, 1956"), on 01.01.1961. With
the passage of time, FCIL sets up units at
Sindri
(District
Dhanbad,
State
of
Jharkhand); Ramagundam; Talcher and
Gorakhpur. At Jodhpur, it had set up
Jodhpur Mining Organization where it was
mining and marketing Gypsum.

6. Petitioners were appointed on
various dates, between 1981-87, on
different posts, as given in the form of
chart, as under:-

S.
No.
Name
of
Petiti
oner
Date
of
Appoi
ntmen
t
Post/ Designation
1
Smt.
Dulari
Devi
13.12.
1986
Counter Clerk
2
Ram
Daras
h
-
Personal Assistant
3
Jagan
Nath
15.2.1
983
Junior
Stenographer
4
Dina
Nath
Sonka
r
3.9.19
81
Senior Accounts
Assistant
5
Dwige
ndra
Kuma
r
Singh
12.12.
1986
Technician Grade-I
6
Maha
bal
Prasad
15.5.1
981
Technician Grade-I
7
Haren
dra
1.1.19
82
Technician GradeII
Kuma
r
Singh
8
Murar
i
1.1.19
87
Gangman
9
Bhaw
nath
4.4.19
84
Pump
Operator
Grade-II

7. FCIL sustained heavy losses
resulting in suspension of production of
fertilizer i.e. urea, in Gorakhpur unit, on
01.06.1990. In Talchar and Ramagundam
Unit, production of urea was suspended with
effect from 01.04.1999, while Sindri unit also
stopped
production
with
effect
from
16.03.2002 and another unit at Korba,
proposed by FCIL, was not set up at all.

8. FCIL was declared sick by Board for
Industrial
and
Financial
Reconstructions
(hereinafter referred to as "BIFR") on
06.11.1992 under the provisions of Sick
Industrial Companies (Special Provisions) Act,
1985 (hereinafter referred to as "Act, 1985").
BIFR, vide order dated 02.11.2001 formed an
opinion that revival of FCIL is not possible,
therefore, recommended winding up and
forwarded to Delhi High Court since registered
office of FCIL is at Nehru Place, New Delhi.

9. Against order dated 02.11.2001 of
BIFR, Department of Fertilizer, FCIL as well
as workers' union filed five appeals before
Appellate Authority of Industrial & Financial
Reconstruction (hereinafter referred to as
"AAIFR") but vide order dated 16.04.2002,
AAIFR also confirmed order of BIFR for
winding up, and dismissed appeals.

10. It is said that some writ petitions
were filed in Delhi High Court against
order of AAIFR i.e. Writ Petition No.
4310 of 2002 and 4430 of 2002 etc.
1850 INDIAN LAW REPORTS ALLAHABAD SERIES

11. Delhi High Court decided writ
petitions
vide
judgement
dated
26.11.2002. It took the view that since
Government of India was not ready to
infuse funds for revival of company and
no viable proposal was submitted by
Government of India, FCIL and operating
agency for revival of company for more
than a decade, BIFR and AAIFR were
right in holding that it was not possible to
revive the company.

12. The above view, therefore, was
affirmed.
However,
taking
into
consideration, a new development which
was noted by Delhi High Court in the light
of Chairman and Managing Director,
FCIL's letter dated 10.09.2001, it required
BIFR to consider certain aspect of the
matter again. Vide letter dated 10.09.2001,
approval was conveyed by Chairman and
Managing Director, FCIL in respect of
part of revival package of FCIL as under:-

"i) Closure of FCIL and hiving
off the Jodhpur Mining Organization
(JMO) into a separate entity;

ii) Disposal of the assets of the
company (excluding JMO) in accordance
with the procedure prescribed under SICA
and other applicable laws;

iii) Extension of VSS benefits to
all the employees of the company.

iv) Permission to extend VSS
benefits to employees of all the units and
offices of FCI approved for closure pending
final permission for closure by the competent
authority;
and
grant
of
retrenchment
compensation under ID Act to employees not
availing of this offer within three months, after
obtaining the required permission from the
competent authority."

13. The package was in respect of
closure of FCIL but hive off Jodhpur
Mining Organization into a separate entity.
Delhi High Court, therefore, found that
question relating to hiving off Jodhpur
Mining Organization into a separate entity
has to be considered by BIFR at the first
instance and for this purpose, it remitted
the matter to BIFR. It also observed the
stand taken by parties that they were not
asking for revival of company and
clarified as under :-

"At this stage, learned counsel
for parties in order to clarify the stand of
the parties state that their clients are not
asking for the revival of the company.
They, however, submit that it should be
open to the BIFR to consider the proposals
for hiving off other units of the FCIL as
separate entities. We do not see any harm
in leaving the door open for the BIFR to
consider the question of hiving off other
units of the FCI in case proposals in this
regard are received by it within a
reasonable period of time.

The
writ
petitions
are
accordingly disposed of. The order of the
BIFR is modified to the extent indicated
above."

14. In this backdrop, FCIL came up
with Circular dated 16.09.2002 conveying
decision of Government of India to close
FCIL in respect of all units except Jodhpur
Mining Organization which was proposed
to be separated as a separate entity, and to
extend VSS benefit to all the employees of
FCIL
(except
Jodhpur
Mining
Organization) who would opt for the same.
Aforesaid scheme was in operation for a
period of three months with effect from
21.09.2002 to 20.12.2002. Employees of
FCIL were required to submit their options
for claiming benefit under VSS. Circular
dated 16.09.2002 further said that those
employees who would not opt for VSS
1 All. Smt. Dulari Devi & Ors. Union of India & Ors.
1851
during the period scheme remain in
operation, their matter shall be dealt by the
provisions
relating
to
"retrenchment"
under Industrial Disputes Act, 1947
(hereinafter reffered to as "Act, 1947").

15. Petitioners did not opt for VSS
but made representation (Annexure-5 to
the writ petition) that they should be
accommodated
in
some
other
unit/department. It is also pointed out that
instead of retrenchment or termination,
some
persons
were
absorbed/accommodated at other places
and
one
such
memorandum
dated
26.03.2003 has been placed on record
showing that one Sri S.K. Jain, Assistant
Plant Manager was transferred to BVFCI,
Namrup (District Dibrugarh, State of
Assam) and absorbed permanently therein.

16. FCIL officials did not consider
request of petitioners for their absorption
in some other undertaking. Instead FCIL
proceeded to retrench petitioners and sent
letter dated 28.04.2003 to Government of
India,
Ministry
of
Labour,
seeking
approval for retrenchment of petitioners in
purported compliance of Section 25-N(3)
of
Act,
1947.
Notices
proposing
retrenchment were also served upon
petitioners.

17. At this stage, present writ petition
was filed by petitioners challenging
Circular dated 16.09.2002 (Annexure-4 to
the
writ
petition)
and
letter
dated
28.04.2003 sent by FCIL to Government
of India seeking approval in compliance of
Section 25-N(3) of Act, 1947.

18. During pendency of this petition,
some further developments took place
which have been brought on record by
way of amendment.

19. Government of India granted
approval for retrenchment of petitioners
vide
letter
dated
09.07.2003.
Consequently, respondent-3 sent notices
dated 11.07.2003 to petitioners giving
fresh opportunity to apply for VSS by
31.07.2003 failing which they shall be
retrenched. Since petitioners did not
submit any option, retrenchment orders
were passed on 01.08.2003.

20. It is said that several employees
were absorbed/adjusted in Jodhpur Mining
Organization,
Bramhaputra
Valley
Fertilizer Limited but petitioners have
been discriminated. Retrenchments have
been challenged on the ground of noncompliance of Section-25-N and that
retrenchment
compensation
as
contemplated under Statute was not paid,
therefore, it is bad in law..

21. Petitioners were also occupying
official occupations in the premises of
FCIL, therefore, initially, they prayed for
protection against eviction from official
accommodations.

22. On 23.04.2003, this Court by
way of interim order directed that
respondents
shall
not
insist
upon
petitioners to vacate quarters allotted to
them. This protection was given upto
31.12.2003. Subsequently, interim order
was
extended
from
time
to
time.
Respondents came up with a complaint
that petitioners were not paying rent,
therefore, on 20.05.2004, interim order
was modified and this Court said:

"Meanwhile, it is provided that
till 15.07.2004 the petitioners shall be
permitted to continue to stay in the
quarters
allotted
to
them
by
the
respondent-Corporation
provided
that
1852 INDIAN LAW REPORTS ALLAHABAD SERIES
petitioners pay the entire dues of the
monthly rent and the current rent at the
rate at which they were paying earlier."

23. On 24.02.2006, when matter
came up before this Court, Respondents
complained that petitioners were not
paying rent for several years and illegally
occupying official accommodations. This
Court, therefore, passed order directing
petitioners to deposit entire arrears of rent
before the next date and also file receipt on
that date. Subject to this condition, their
eviction was stayed and the case was
directed to be listed on 21.03.2006.

24. On 21.03.2006, this Court passed
following order:-

"The following order was passed
on 24.02.2006.

"Learned
counsel
for
the
petitions states that he is being evicted
from the service quarter, which he has
occupying. Sri R.S. Mishra, learned
counsel for the respondents states that the
petitioners are not paying the rent for the
last several years and are illegally
occupying the quarter.

The petitioners shall deposit the
entire arrears of rent before the next date
fixed and shall file its receipt on that
date. Subject to this condition they will not
be evicted till that date. Subject to this
condition they will not be evicted till that
date.

Learned counsel for the Union of
India prays for and is granted ten days
time to file a reply to the supplementary
affidavit.

List on 21.03.2006."

However,
no
compliance
affidavit has been filed but it is stated that
the rent has been paid together with its
arrear upto February, 2006. The counsel
for the respondents states that the
electricity dues and water tax have yet not
been paid. The same should be paid
before the next date and on the next date
compliance affidavit should be filed on
behalf of the petitioners.

List on 29.03.2006. The interim
order shall continue till then."

(Emphasis added)

25.

The
complaint
of
noncompliance with regard to payment of rent
was again made by respondents on
10.09.2008 whereafter this Court passed
following order:-

"List is being revised.

No one is present on behalf of
the petitioners.

The government accommodations
were allotted to the petitioners, while they were
in service, but after their retrenchment, they
did not vacate the official accommodation and
as such a notice was issued to the petitioners
requiring
them
to
vacate
the
official
accommodation. Against the retrenchment of
the petitioners, the instant writ petition has
been filed and this Hon'ble Court by means of
the order dated 24.02.2006 has directed that in
case the petitioners deposit the rent as well as
other dues such as electricity dues and water
tax etc. which are payable by the occupants of
the
government
accommodations,
the
petitioners may not be ordered for ejectment.

Counsel for the respondents
submits that the petitioners, after passing
of the aforesaid interim order, are neither
paying any rent for the government
accommodation
which
they
are
occupying, though not entitled for after
retrenchment, nor any other dues such as
electricity charges and water tax etc.

In view of the above, it is
provided that in case the petitioners did
1 All. Smt. Dulari Devi & Ors. Union of India & Ors.
1853
not pay the arrears of rent including
taxes such as electricity charges and
water charges etc. within three months
from today, the benefit of the interim
order with regard to their retention of the
official
accommodation
shall
stand
vacated and if they continue to pay the
monthly rent as and when demanded by
the respondents and the electricity and
water charges etc., they shall be permitted
to retain the official accommodation.

The
interim
order
dated
24.02.2006 stands modified accordingly."

(Emphasis added)

26. In regard to compliance of this
order, I find nothing on record. Learned
counsel for parties also could not inform
as to whether aforesaid order was
complied with and petitioners are still
occupying official accommodations or
have been ejected or voluntary vacated.

27. On the contrary, this Court has
been addressed on merits of the matter,
therefore, I proceed to hear the matter on
merits and decide accordingly.

28. Sri W.H. Khan, learned Senior
Counsel appearing for petitioners has
contended that retrenchment of petitioners
is illegal and void. He urged:

(i) Government of India decided
to absorb employees of FCIL in various
other Central Public Sector Companies
and a number of employees were so
absorbed
but
petitioners
have
been
discriminated by not extending said
benefit.

(ii) Three months' notice as
contemplated under Section 25-N(1)(a) of
Act, 1947 was not
 served upon petitioners. Thus, there is non
compliance of Section 25-N of Act, 1947.

(iii) Section 25-N of Act, 1947
read with Rule 76-A of Industrial Disputes
Rules, 1957 (hereinafter referred to as
Rules,
1957")
contemplates
that
application submitted by Employer to
Government of India shall be in-triplicate
and copy thereof shall also be supplied to
workmen concerned but no such copy was
supplied to workmen concerned and,
therefore, there is non-compliance of Rule
76-A and retrenchment is illegal in view of
law laid down in Shiv Kumar and Others
vs. State of Haryana and others 1994 (4)
SCC 445.

(iv) On the question of approval,
Sri J.P. Pati, Joint Secretary, Government
of India heard the matter on 24.06.2003
but order conveying approval has been
issued by Smt. Chandani Raina, Deputy
Director on 09.07.2013, meaning thereby
hearing has been conducted by one officer
while order has been passed by another
officer and it is in violation of principles of
natural justice as held in Om Prakash and
Another vs. Union of India and Another
JT (2010) 2 (SC) 91 (paras 100 and 101).

(v)
Order
passed
by
Smt.
Chandani Raina, Deputy Director is
without jurisdiction as she was not
competent either to hear the matter or pass
order as no such authority was conferred
upon her by Government of India and
despite direction of this Court, no such
order of authority given to Smt. Chandani
Raina, has been placed on record.

(vi) The defence of Government
that under the Rules of business, decision
was taken by Government and Smt.
Chandani Raina has only communicated is
not correct, inasmuch as, order under
Section 25-N(3) is a quasi judicial order
and has to be passed after making enquiry
1854 INDIAN LAW REPORTS ALLAHABAD SERIES
considering various relevant factors and by
giving reasons. Moreover, Smt. Chandani
Raina was not authorized to communicate
decision of Government of India even
under the Rules of business. There is a
total non-compliance of Article 77 of
Constitution of India. In this regard, Sri
Khan placed reliance on Supreme Court's
decision in Workmen of Meenakshi
Mills Ltd. etc. Vs. Meenakshi Mills Ltd.
and Another AIR (1994) SC 2697 and
Jaipur Development Authority and
Others Vs. Vijay Kumar Data and
Others 2011 (12) SCC 94.

(vii) No enquiry was conducted
before granting approval by Government
of India though it was mandatory and,
therefore, there is non-compliance of
Section 25-N of Act, 1947.

(viii)
Retrenchment
compensation has not been paid along with
order of retrenchment though it has to be
simultaneous and this is again another
non-compliance
of Section
25-N
in
particular
sub-section
(9),
hence,
retrenchment is illegal. Reliance is placed
on Supreme Court's decision in Anoop
Sharma Vs. Executive Engineer, Public
Health
Division
No.
1
Panipat
(Haryana) JT 2010 (4) SC 229.

29. Contesting petitioners' claim, on
behalf of respondents- 2, 3 and 4, Sri Arun
Kumar, learned counsel stated, that FCIL
is admittedly a Central Government
Company within the meaning of Section
619 of Act, 1956. it had set up four
fertilizer units at Gorakhpur, Talcher,
Ramagundam and Sindri and a small
Gypsum mining set up i.e. Jodhpur Mining
Organization. Starting from 1979, FCIL
suffered colossal losses which increased
every year, compelling Management to
close unit at Gorakhpur on 10.06.1990;
Talchar and Ramagundam on 31.03.1999
and Sindri on 16.03.2002. By amendment
made in 1991, Government Companies
were also brought within the purview of
Act, 1985. Since FCIL had eroded its
entire net worth and became chronically
sick, it was referred to BIFR on
20.04.1992. After initial scrutiny BIFR
declared FCIL sick vide order dated
06.11.1992 in terms of Section 3(1)(o) of
Act,
1985.
After
finding
revival
improbable, BIFR took a decision for
winding up of FCIL and passed order on
02.11.2001 referring the matter to Delhi
High Court for winding up. AAIFR
confirmed the order of BFIR by dismissing
appeal. The orders of BIFR and AAIFR
were challenged by various units in Delhi
High Court in Writ Petitions No. 3298 of
2002, 4310 of 2002, 4060 of 2002 and
4061 of 2002. When the matter was
pending in Delhi High Court, Government
of India, Ministry of Chemical and
Fertilizer, Department of Fertilizers vide
letter dated 30.07.2002 and 10.09.2002
conveyed approval of revival package of
FCIL by providing as under:-

"i) Closure of FCIL and hiving
off the Jodhpur Mining Organization
(JMO) into a separate entity;

ii) Disposal of the assets of the
company (excluding JMO) in accordance
with the procedure prescribed under SICA
and other applicable laws;

iii) Extension of VSS benefits to
all the employees of the company.

iv) Permission to extend VSS
benefits to employees of all the units and
offices of FCI approved for closure
pending final permission for closure by the
competent
authority;
and
grant
of
retrenchment compensation under ID Act
to employees not availing of this offer
within three months, after obtaining the
required permission from the competent
1 All. Smt. Dulari Devi & Ors. Union of India & Ors.
1855
authority."

(Emphasis added)

30. Further vide Government Order
dated 15.11.2002, Government of India
stopped all financial support to FCIL.

31. When revival package of FCIL
was submitted to Delhi High Court, it
referred the matter to BIFR to re-consider
the matter in the light of revival package.
Matter was again considered by BIFR and
vide order dated 02.04.2004/ 17.05.2004 it
again recommended winding up of FCIL
and approved hiving off of Jodhpur
Mining Organization, a small unit of
Gypsum in the State of Rajasthan in
Fertilizer Unit of FCIL.

32. In the meantime, since VSS was
also offered to employees of FCIL, vide
Government of India's circular dated
16.09.2002, almost all the employees i.e.
5701 out of the total 5712 as on
20.09.2002 (i.e. except petitioners) opted
for VSS. Two employees who did not
avail VSS, were terminated in terms of
Circular dated 16.09.2002.

33. With respect to petitioners, FCIL
sought approval for retrenchment from
Ministry of Labour which was granted.
Claim of petitioners for seeking absorption
in other companies of Government of
India is impermissible, inasmuch as, all the
Companies are independent units and
FCIL has no control over them. Petitioners
were given another opportunity of option
for VSS as per the terms of approval
granted by Ministry of Labour but they
failed to avail the same, hence retrenched
after following the procedure under
Section 25 of Act, 1947. Government of
India also requested other Fertilizer
Companies to absorb employees of FCIL
having more than 10 years of service, but
all the companies have refused on the
ground that they are already over staffed
and
have
no
vacancy
for
further
employment. Not a single person of FCIL
has been re-employed in other Companies.

34. It is also said that so far as VSS
contained in Circular dated 16.09.2002 is
concerned, its validity was challenged and
upheld in A.K. Bindal and Another Vs.
Union of India and Others JT 2003 (4)
SC 328; Employees of a Government
Company are not Government employees;
they cannot claim absorption in other
departments
of
Government
or
independent Government Companies since
each and every company is a separate and
individual entity. Therefore, claim of
petitioners for absorption in other Public
Sector Enterprises is misconceived. He
placed reliance on Supreme Court's
judgement in A.K. Bindal (supra) and
Officers and Supervisors of IDPL Vs.
Chairman and M.D. IDPL and Others
JT 2003 (6) SC 68. Copy of application
sent
to
Ministry
of
Labour
dated
28.04.2003 was also sent to petitioners
through speed post on 29.04.2003. Letters
sent subsequently in reply to queries made
by Ministry of Labour are not required to
be served upon petitioners and non serving
of such letters, cannot be said to be
violation of procedure of retrenchment.
Cheques of retrenchment compensation
were sent to petitioners through registered
post but they refused to receive the same,
therefore, it cannot be said that there is
non-compliance of Section 25-N with
regard
to
payment
of
retrenchment
compensation.

35. With regard to alleged enquiry
which may be conducted by Central
Government before granting permission
1856 INDIAN LAW REPORTS ALLAHABAD SERIES
under Section 25-N, it is urged that neither
Employer nor Employee are required to be
heard and such enquiry is at the discretion
of Government as held in M/s Orissa
Textiles and Steel Limited Vs. State of
Orissa and Others AIR 2002 SC 708.
Merely for the reason that an order is not
referred to, being in the name of President,
it will not be bad, since provisions of
Article 77 are directory and in this regard,
reliance is placed on Constitution Bench
Judgement in State of Rajasthan and
Another Vs. Sripal Jain AIR 1963 SC
1323 and an earlier judgement in Major
E.G. Barsay Vs. State of Bombay AIR
1961 SC 1762.

36. It is further said that on the one
hand, petitioners claim that order of
approval is quasi judicial order but on the
contrary they are challenging the same as
an executive order not in compliance of
Article 77 and both the contentions are
mutually destructive. Once an order is
quasi judicial, the manner in which
executive order is to be authenticated and
issued as provided under Articles 77 and
166 is not applicable. It is said that
statutory order need not be issued in the
name of President or Governor, as the case
may be. Here reliance is placed on
Supreme Court's Judgement in State of
Maharashtra and Others Vs. Basanti
Lal and Another AIR 2003 SC 4688; Air
India Cabin Crew Association Vs.
Yeshawinee Merchant and Others AIR
2004 SC 187.

37. Sri A.N. Roy, Advocate who has
put
in
appearance
on
behalf
of
Government of India has also advanced his
submissions which are similar to that
advanced on behalf of respondents- 2, 3
and 4, therefore, I am not repeating the
same.

38.

In
addition
to
the
oral
submissions,
petitioners
as
well
as
respondents- 1 to 4 have also submitted
their written arguments which are broadly
the same as the oral arguments which I
have already noticed above.

39. The rival submissions noticed
above would require this Court to answer
the following issues:-

(i)
Whether
Circular
dated
16.09.2002 (Annexure-4 to the writ
petition) circulating VSS is arbitrary and
illegal.

(ii)
Whether
termination
of
petitioners amounts to retrenchment and
has been made in compliance of Section
25-N of Act, 1947.

(iii) Whether petitioners are
entitled to be considered for absorption in
other Public Sector Enterprises, Central
Government Companies or Departments of
Central Government.

40. Coming to first question as to
whether
Circular
dated
16.09.2002
circulating VSS is per se illegal and
arbitrary and this facts in the backdrop of
said Circular, has to be examined.

41. The history of coming up of
FCIL in existence, and, its development,
has been stated in detail in A.K. Bindal
(supra) and therefrom, I find that in 1961,
there were two Fertilizer companies
namely, Sindri Fertilizers and Chemicals
Limited (hereinafter referred to as "Sindri
FCL") and Hindustan Fertilizers and
Chemicals Limited (hereinafter referred to
as
"Hindustan
FCL").
Both
these
Companies were Central Government
Companies. In January, 1961, Sindri FCL
and Hindustan FCL were merged together
giving rise to a new company, namely,
1 All. Smt. Dulari Devi & Ors. Union of India & Ors.
1857
FCIL. Between 1961 and 1977, FCIL sought
to set up 17 fertilizer units, 7 whereof came in
operation while remaining 10 were at various
stages
of
implementation.
In
1978,
Government of India set up a Committee to
work out modalities for reorganization of
Fertilizer Industry. A recommendation was
made by Committee which was approved by
Government
of
India
bifurcating
or
reorganizing FCIL and to constitute another
unit, namely, National Fertilizer Limited
(hereinafter referred to as "NFL"). NFL
became
an
independent
and
separate
undertaking and allocated various units to the
newly created undertakings which were five in
number. A new company, namely, Hindustan
Fertilizer Corporation Limited (hereinafter
referred to as "HFCL") was also incorporation
and thereunder units set up at Namrup, Haldia,
Barauni
and
Durgapur
were
allocated.
Fertilizer Units set up at Sindri, Gorakhpur,
Ramagundam, Talchar and Korba along with
Jodhpur Mining Organization were retained
with FCIL. Remaining units were allocated to
another newly created entity i.e. Rashtriya
Chemicals and Fertilizers Limited (hereinafter
referred to as "RCFL") and NFL. There was a
fifth company known as Project and
Development (India) Limited which was left
with the work of planning and development.

42. FCIL under the reorganized
system with its allocated units, however,
could not function well and started
sustaining losses since 1979 and onwards.
The year-wise losses sustained by FCIL
from 1979 to 1990 have been given in the
supplementary counter affidavit dated
09.10.2006 filed on behalf of respondents-
2, 3 and 4 and reads as under:-

Year
Loss (in
crores)
Year
Loss
(in
crores)
1979
21.83
1985
45.15
1980
48.63
1986
127.21
1981
100.80
1987
105.91
1982
126.78
1988
115.42
1983
80.68
1989
160.89
1984
80.59
1990
163.90

43. In the light of continuous and
sustained heavy losses, production of fertilizer
in Gorakhpur Unit of FCIL was suspended on
01.06.1990. It is not the case that in respect of
other units, position became any better. Instead
heavy losses continued resulting in suspension
of production in Talchar and Ramagundam Unit
with effect from 01.04.1999 while Sindri unit
also stopped production with effect from
16.03.2002.

44. In the supplementary counter
affidavit
dated
09.10.2006,
losses
sustained by FCIL from 1991 to 2002 have
also been given and as under:-

Year
Loss (in
crores)
Year
Loss
(in
crores)
1991
167.88
1997
538.00
1992
226.52
1998
735.69
1993
245.48
1999
838.29
1994
272.60
2000
865.29
1995
336.13
2001
856.68
1996
449.71
2002
951.36

45. It is also on record that BIFR
examined the matter and found FCIL
incapable of survival and, therefore,
passed order on 02.11.2001 for its winding
up which was confirmed initially in appeal
by AAIFR while dismissing the same on
09.04.2002.
1858 INDIAN LAW REPORTS ALLAHABAD SERIES

46. Thereafter, when matter was
taken in Delhi High Court, it appears that
Government of India made an attempt by
giving a revival package and in the light of
revival package offered by Government of
India, Delhi High Court set aside orders of
BIFR and AAIFR and remanded the
matter to BIFR to re-examine whether
FCIL could have been rehabilitated or not.
That was also not found sustainable and
BIFR passed another order for winding up
on 02.04.2004/ 17.05.2004.

47. These facts at least demonstrate
the genuineness of claim of respondentEmployer that it had sustained losses,
eroded its entire net worth and became
sick to the extent of incapable of revival/
rehabilitation, hence, its closure was found
appropriate.

48. VSS was brought by respondents
in
this
backdrop.
Circular
dated
16.09.2002 was issued when on the first
occasion
BIFR
had
passed
order
recommending winding up on 02.11.2001
which
was
confirmed
by
AAIFR
dismissing appeal on 09.04.2002. The
bonafide on the part of Government of
India as also that of Employer (FCIL) of
petitioners cannot be doubted for the
reason that when matter was taken in
Delhi High Court, a revival package was
offered
by
Government
of
India
whereupon Delhi High Court sent the
matter to BIFR for re-examination but
ultimately BIFR could not found any
scope of rehabilitation/ revival.

49. Copy of judgement of Delhi High
Court
has
been
filed
along
with
supplementary counter affidavit dated
29.02.2012 which shows that it upheld the
decision of BIFR and AAIFR holding that
it is not possible to revive Company but
thereafter it found decision of Government
of India communicated vide letter dated
10.09.2001 about closure of FCIL and
hiving off Jodhpur Mining Organization
into a separate entity and offered VSS to
all employees. For the purpose of this
"hiving off Jodhpur Mining Organization",
Delhi High Court observed that this aspect
ought to have been considered at the first
instance, hence, it remanded the matter to
BIFR for considering proposal of hiving
off of Jodhpur Mining Organization into a
separate entity. In that context, Delhi High
Court also left open to BIFR to consider
the question of hiving off other units of
FCIL in case proposal in this regard are
received. The relevant observations of
Delhi High Court's judgement read as
under:-