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TMI Blog2006 (10) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... t non-implementation of voluntary retirement scheme in respect of the employees of the Hotel Agra Ashok is totally discriminatory, arbitrary, unjust and without any rhyme or reason. It is further submitted that because the Government of India introduced a disinvestments plan with the object to sell the hotel to a private party which is liable to affect the employees very seriously including their service conditions. 2. The Government of India issued a press communique in the month of January, 2001 proposing to sell Hotel Agra Ashok for a sum of ₹ 2.36 crores which is wholly inadequate and amounts to a totally distress sale. The Government has devised a scheme of creating an artificial company i.e. Hotel Yamuna View Private Limited - 4th respondent herein and the said company has been incorporated only for the purpose of selling the said hotel after the hotel is transferred to it. The employees have come to understand through press reports that the hotel is being sold out to one M/s Mohan Singh - respondent No. 5 and his bid was accepted by the Central Government in pursuance to the advertisement. It is further submitted that the entire Hotel Agra Ashok is being sold out on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable during the pendency of the above matters and that the employees do not challenge the policy of Disinvestment as such. However, their service rights are to be protected since there is no difference in service conditions between the employees of Hotel Manali Ashok and Hotel Agra Ashok, both are similar and equal and the discrimination between the two sets of employees is violative of Article 14 of the Constitution of India and, therefore, both are to be treated similarly. T.C. No. 76 of 2002 (Arising out of T.P.(C) No. 948 of 2001) 4. Civil Writ Petition No. 7195 of 2001 was filed by one K.K.Gautham and 7 Ors. in the High Court of Delhi against ITDC, New Delhi and Hotel Yamuna View Pvt. Ltd. through its Director Mr. Arvind Mehta, New Delhi. In the above writ petition, the petitioners sought to challenge the proposed action of respondent No. 1 of transferring out the services of the petitioners, who are officers of respondent No. 1 to respondent No. 3, a newly incorporated company. It is stated that the petitioners are presently posted in Hotel Agra Ashok in pursuance of their policy of Disinvestment and ITDC have proposed to sell the said Hotel to a private bidder. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invested Unit - Hotel Agra Ashok is absolutely untenable because after the Disinvestment, it is for the buyer to float the scheme of VRS in terms of the transferred documents. In view of the above, it is submitted that the apprehension of the petitioners is baseless and liable to be rejected. 6. The Union of India filed its affidavit in reply through its Under Secretary and submitted that successive governments, both at the center and the States have been following the economic policy of Disinvestment in Public Sector Enterprises due to various reasons and in August, 1996, the Central Government set up a Public Sector Disinvestment Commission to make recommendations on the identified Central Public Sector Undertakings which may be disinvested. It was further submitted that ITDC is a Government Company as defined under Section 617 of the Companies Act, set up in 1966 and at the relevant time the Government of India was holding about 89.97% shares in ITDC, which was running 33 hotels in all and that ITDC was running heavy losses and its occupancy rates were far below the market average despite the fact that its room rents were lower than other five star hotels. The Disinvestmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use 8 of the said circular regarding introduction of VRS, it is clearly stated that the schemes does not confer any right whatsoever on any employee to have his request for voluntary retirement accepted. Two rejoinders were filed on behalf of the workers' union to the reply filed by respondent Nos. 3, 4 and 5. 8. We heard Mr. M.L. Bhat, learned senior counsel assisted by Ms. Purnima Bhat, learned Counsel in T.C. No. 73 of 2002 and Mr. Jayant Nath, learned senior counsel assisted by Mr. Suresh Tripathy, learned Counsel in T.C. No. 76 of 2002 for the respective petitioners and Mr. Rakesh Dwivedi, learned senior counsel, Mr. Ashok Bhan and Mr. Gaurav Agarwal and Mr. Praveen Jain, learned Counsel for the respective respondents. We have carefully perused the averments made in the affidavit and the reply filed by the respective respondents and the rejoinder by the petitioners. Our attention was also drawn to the scheme of arrangement (de-merger) between ITDC Ltd. and Hotel Yamuna View Private Limited, report of the Disinvestment Commission and other relevant records and annexures filed in both the writ petitions. 9. Mr. M.L. Bhat, learned senior counsel reiterated the submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be statutorily given to an employee under applicable law. (v) the Company will only undertake dismissal or termination of the services of the employees on account of disciplinary action in accordance with the applicable staff regulations. (vi) in respect of contract employees the terms and conditions of the relevant contracts shall be fully observed by the Company and the Purchaser shall keep Government and ITDC indemnified against damages, losses or claims resulting on account of the Company failing to observe any of the terms and conditions of such contracts. Our attention was also drawn to the order dated 01.02.2002 and, in particular, last para of page 3 of the said order referring to the status quo order passed by the High Court regarding service conditions of Class III and IV employees of the Hotel. Our attention was also invited to Clause 3.3(d) and 3.5. 10. Learned senior counsel submitted that the employees consent is necessary before transfer and cited Jawaharlal Nehru University v. Dr. K.S. Jawatkar and Ors. (1989)IILLJ586SC . In this case, the Jawaharlal Nehru University, under Section 5(2) of the Jawaharlal Nehru University Act, 1966, established a center ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of this Court, in JNU in para 8 it has been observed that at worst this would not impinge upon the validity of the de-merger scheme. The effect of that would be that the employee would be deemed to have retrenched and would be entitled to compensation as such in accordance with law. In the instant case, the employees never claimed that they may be considered as retrenched. Even if it is the claim of the petitioners that they have been retrenched, the writ petition is not the appropriate proceedings and the petitioners were required to institute appropriate proceedings as per the industrial/labour laws. 12. Mr. M.L. Bhat, learned senior counsel also cited Nokes v. Doncaster Amalgamated Collieries Ltd. (1941) 11 Comp Cas 83 House of Lords for the proposition that a free citizen in exercise of his freedom is entitled to chose the employer whom he promises to serve, so that the right to his services cannot be transferred from one employer to another without his consent. The Court was considering the whole question, however, as to whether Section 154 of the Companies Act, 1929 provides a statutory exception to that principle. The Lord Chancellor came to the conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, 21 and 311 of the Constitution of India and that the Government can abolish the post itself. In the present case, the petitioners are not government servants and are merely employees of a public sector undertaking. This apart, the service conditions of the petitioners are being protected under the new management on the Disinvestment of the Hotel and the fact that other hotels are also in an advanced stage of Disinvestment in pursuance of the policy decision taken by the Government of India for Disinvestment of the hotel units. We see no reason to interfere with the aforesaid decision. In case ultimately the petitioners are aggrieved by any aspect of terms of reference and formalization of agreement and completion of Disinvestment it is always open to the petitioners to approach the courts for redressal of their grievances. 15. We have already extracted Clause 9.4 of the share purchase agreement dated 07.02.2002 in paragraphs supra. In our view, the decision of the Government of India to divest the property was a policy decision which was not in any manner contrary to the law of the land. Similar policy decision of the Government of India to disinvest 51% of this share holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act do not have any vested right to continue to enjoy the status of the employee of an instrumentality of the State. 18. In the instant case, with the intention to promote the scheme of Disinvestment, the Government issued an advertisement to outright sale of 6 hotels and long term lease for 2 hotels. The property of respondent No. 1 was emerged in the name of the new company with the approval of the Company Law Board. We have perused the order approving the scheme of arrangement as annexed and marked as Annexure-C(a)/2. All the employees after the creation of the new company were shifted to the new company which was also a subsidiary company of ITDC. Respondent No. 1 invited tenders for sale of the Hotel. The offer made by Respondent Nos. 4 and 5 was accepted by respondent No. 1 as successful bidder and accordingly, the shares of Hotel Yamuna View Private Limited were transferred under share purchase agreement dated 07.02.2002. It is pertinent to notice that at the time of inviting bid, no such liabilities of VRS to the employees were shown against Hotel Agra Ashok. All the liabilities were mentioned in the balance sheet of the company including property tax and water tax to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olicy for VRS regarding Hotel Agra Ashok. Also under Clause 8 of the said circular regarding introduction of VRS, it is clearly stated that the scheme does not confer any right whatsoever on any employee to have their request for voluntary retirement accepted. The respondent has also no such obligation under para 94 (IV). 20. This Court in a recent judgment in the case of Board of Trustees, Visakhapatnam Port Trust and Ors. v. T.S.N. Raju and Anr. (2006)7SCC664 (Dr. AR. Lakshmanan and Tarun Chatterjee, JJ) while considering the scheme of voluntary retirement applicable to Port Trusts considered the scope of entitlement to avail the benefit of the scheme. This Court held that the Chairman of the Port Trust has absolute right either to accept or not to accept the applications filed by the employees for retirement and the request of employees seeking voluntary retirement was not to take effect until and unless it was accepted in writing by the Port Trust Authorities. This Court held in para 35 as under: In our opinion, the request of the employees seeking voluntary retirement was not to take effect until and unless it was accepted in writing by the Port Trust Authorities. The Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a decision bringing about change cannot per se be interfered with by the Court. 93. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the Courts to consider relative merits of different economic polices and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the appropriate forum is Parliament and not the Courts…. 98. In the case of a policy decision on economic matters, the courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in the decision itself. 22. In the instant case, the Government has acted on advice of experts before taking a decision to disinvest its shares in ITDC Limited. Even thereafter, through a fair and transparent process as detailed in the reply affidavit of the Union of India, the Government has ensured that it has got the best price for its shares. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or a better right than a government servant and impugn it's change of status.... 48. ...If the abolition of a post pursuant to a policy decision does not attract the provisions of Article 311 of the Constitution as held in State of Haryana v. Des Raj Sangar and Anr. on the same parity of reasoning, the policy of Disinvestment cannot be faulted if as a result thereof the employees lose their rights or protection under Articles 14 and 16 of the Constitution. In other words, the existence of rights of protection under Articles 14 and 16 of the Constitution cannot possibly have the effect of vetoing the Government's right to disinvest. Nor can the employees claim a right of continuous consultation at different stages of the Disinvestment process. If the Disinvestment process is gone through without contravening any law, then the normal consequences as a result of Disinvestment must follow. 49. The Government could have run the industry departmentally or in any other form. When it chooses to run an industry by forming a company and it becomes its shareholder then under the provisions of the Companies Act as a shareholder, it would have a right to transfer its shares. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions thereto can only be made in accordance with law. Further as per the Demurer Scheme, all the liabilities relating to the transferred undertaking upto the date of transfer were taken over and were to be discharged by the transferee. Thus, the transferee is liable to pay all the liabilities and dues (including gratuity) to the employees on the same terms and conditions of service which were applicable to the employees in the hotel, including the benefits related to the tenure of service in the hotel upto the date of transfer. As far as the provident fund of the employees is concerned, the PF accounts of the employees of the hotel in ITDC PF Trust were transferred by the trust to the new accounts of the concerned employees in the Regional Provident Fund Commissioner after the completion of formalities under the provisions of Employees Provident Fund and Miscellaneous Provisions Act,1952. The Demurer of the hotel union from ITDC was a considered decision taken by the Cabinet Committee on Disinvestment and had the approval of the Department of Company Affairs in terms of the Companies Act, 1956. The reasons for creating a separate companies has been given in the reply affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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