Kandla Port Workers Union vs Fci

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

Versus

FCI & Ors. …. Respondent(s)

JUDGMENT

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

[1] 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

[2] 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)

[3] 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

[4] 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

[5] 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

[6] 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

[7] 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

[8] 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

[9] 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

[10] 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

[11] 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

[12] 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

[13] 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

[14] 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

[15] 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

[16] 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.

[17]