Civil
Writ Petition No. 13491 of 2009
DATE
OF DECISION : JULY 10, 2014
Union of India and others
.......
PETITIONER
VERSUS
All India Postal ED Employees Union (Punjab Circle), Amritsar
and others
.....
RESPONDENTS
CORAM : HON'BLE MR.
JUSTICE SANJAY KISHAN KAUL, CHIEF JUSTICE
HON'BLE MR. JUSTICE AJAY TEWARI
PRESENT: Mr. Namit
Kumar, Advocate, for the petitioners.
Mr. Madan Mohan, Advocate, for respondents No.1 to 4.
Respondent No.5 formal party.
...
SANJAY KISHAN KAUL, CJ. (Oral)
The controversy
in the present case relates to the emoluments of the Extra Departmental Agents
(EDAs) and Branch Post Masters under the Posts and Telegraphs Extra Departmental
Agents (Conduct and Service) Rules, 1964, subsequently replaced by the
Department of Posts, Gramin Dak Sewaks (Conduct and Employment) Rules, 2001. It
is the case of the Gramin Dak Sewaks (hereinafter referred to as 'GDS') that they
are entitled to a productivity linked bonus at par with other employees of the
Postal Department and there cannot be a different ceiling limit for them.
In order to
appreciate the controversy, we would first like to examine the status of the GDS. Fortunately, we can be conveniently guided by a
judgment of the Hon'ble Supreme Court in Chet
Ram vs. Jit Singh and a connected matter, 2009(1) RSJ 11. In the facts
of that case, the controversy was whether such GDS were Government servants
and, thus, disqualified from contesting the elections of the Nagar Panchayat.
The plea of the GDS that they were not Government employees, having been
working on a part time basis and were, thus, not disqualified in terms of
Section 11(g) of the Punjab State Election Commission Act, 1994, was negatived.
The rationale for the same was based on the terms and conditions of the GDS, the
Rules having been framed in terms of proviso to Article 309 of the Constitution
of India which, undisputedly, governs only the Government employees. The
Supreme Court referred to its earlier views expressed in Union of India and others vs. Kameshwar Prasad, 1997(11) Supreme
Court Cases 650, quoting the relevant paragraphs dealing with the status of
the GDS. We find it convenient to reproduce the observations of Kameshwar Prasad's case (supra),
as under:-
“2.
The Extra Departmental Agents system in the Department of Posts and Telegraphs
is in voguesince 1854. The object underlying it is to cater to postal needs of the
rural communities dispersed in remote areas. The system avails of the services
of schoolmasters, shopkeepers, landlords and such other persons in a village
who have the faculty of reasonable standard of literacy and adequate means of
livelihood and who, therefore, in their leisure can Civil Writ Petition No.
13491 of 2009 3 assist the Department by way of gainful avocation and social
service in ministering to the rural communities in their postal needs, through maintenance
of simple accounts and adherence to minimum procedural formalities, as
prescribed by the Department for the purpose. [See: Swamy’s Compilation of
Service Rules for Extra Departmental Staff in Postal Department p. 1.]
3.
The Extra Departmental Agents are government servants holding a civil post and
are entitled to the protection of Article 311(2) of the Constitution (See: Supdt.
of Post Offices v. P.K. Rajamma). They are governed by separate set of rules,
viz., the Posts and Telegraphs Extra Departmental Agents (Conduct and Service)
Rules, 1964 (hereinafter referred to as “the Rules”). The Central Civil
Services (Classification, Control and Appeal) Rules are not applicable to this
category of employees in view of the notification dated 28-2-1957 issued by the
Government of India under Rule 3(3) of the said Rules.”
In the context of
the aforesaid observations, the Hon'ble Supreme Court in Chet Ram's case (supra) concluded that there was a
disqualification incurred on account of the GDS, being a Government employee.
Now, turning to
the provisions of the Payment of Bonus Act, 1965 (for short 'the Act'), an
employee is defined under clause (13) of Section 2, being the definition
clause, as under:-
“(13)
"employee" means any person (other than an apprentice) employed on a
salary or wage not exceeding ten thousand rupees per mensem in any industry to
do any skilled or unskilled manual, supervisory, managerial, administrative,
technical or Civil Writ Petition No. 13491 of 2009 4 clerical
work for hire or reward, whether the terms of employment be express or
implied;”
The aforesaid definition
has to be examined in the context of the Statements and Objects for the said
Act, which shows that a Tripartite Commission was set up by the Government of
India by their resolution dated 6.12.1961, to consider in a comprehensive
manner, the question of payment of bonus based on profits to employees employed
in establishments and to make the recommendations to the Government. The
practice of paying bonus in India is stated to have originated during the First
World War when certain textile mills granted 10% of wages as war bonus to their
workers in 1917. Thus, the Act was enacted to provide for payment of bonus to
persons in certain establishments on the basis of profits or on the basis of
production or productivity and for matters connected therewith. Insofar as the
aspect of ceiling limit is concerned, it is useful to reproduce Section 12 of
the Act, which reads as under:-
“12.
Calculation of bonus with respect to certain employees.- Where the salary or
wage of anemployee exceeds three thousand and five hundred rupees per mensem,
the bonus payable to such employee under section 10 or, as the case may be, under
section 11, shall be calculated as if his salary or wage were three thousand
and five hundred rupees per mensem.”
We
may note that the ceiling limit was increased from Rs. 2,500/- to Rs. 3,500/-, as per Amending Act No.45 of 2007.
The
said Act also introduced the concept of bonus Civil Writ Petition No. 13491 of
2009 5
linked with production or productivity by Amending Act No.23 of 1976. Thus, a
concept of bonus based originally on profit alone was expanded by the said
Amending Act, which also amended the recital to the said Act. Section 31A reads
as under:-
“31A.
Special provision with respect to payment of bonus linked with production or
productivity.- Notwithstanding anything contained in this Act,-
(i) where an agreement or a settlement has been entered into by the
employees with their employer before the commencement of the
Payment of Bonus (Amendment) Act, 1976 (23 of 1976), or
(ii) where the employees
enter into any agreement or settlement with their employer after such
commencement, for payment of an annual bonus linked with production or
productivity in lieu of bonus based on profits payable under this Act, then,
such employees shall be entitled to receive bonus due to them under such
agreement or settlement, as the case may be:
Provided
that any such agreement or settlement whereby the employees relinquish their right
to receive the minimum bonus under section 10 shall be null and void in so far
as it purports to deprive them of such right:
Provided
further that such employees shall not be entitled to be paid such bonus in
excess of twenty per cent. of the salary or wage earned by them during the
relevant accounting year.”
The Ministry of
Finance, Department of Expenditure, Government of India, issued an Office
Memorandum dated 20.9.1995 qua grant of Productivity Linked Bonus and ad hoc Bonus
to Central Government employees specifying the revision Civil Writ Petition No.
13491 of 2009 6
of eligibility and calculation ceilings, revising the ceiling from ` 1,600/- to
` 2,500/-. Thereafter, by another Office Memorandum dated 10.10.2008 qua the
same subject matter, it was revised from ` 2,500/- to ` 3,500/-. The
applicability of this Office Memorandum to the Postal Department is not in
question.
It is from the
very inception i.e. 1979-80 that payments were made to GDS on parity with regular
employees of the productivity linked bonus. However, when the Office Memorandum
of 10.10.2008 was issued, the Ministry of Communications and IT, Department of
Posts, Government of India issued a communication dated 15.10.2008 stating that
the ceiling for calculation of productivity linked bonus has been raised to `
3,500/- from ` 2,500/- for regular Central Government employees only with
effect from 1.4.2006. Thus, the situation which operated in the past was sought
to be altered by not giving the benefit of the increase in the ceiling limit to
the GDS on the specious plea that they were not "regular" Central
Government employees, while no such phraseology was used in the Office
Memorandum of the Ministry of Finance dated 10.10.2008.
It is the
aforesaid which gave a cause of action to the private respondents before us to
prefer an application before the Central Administrative Tribunal, Chandigarh
Bench, which allowed the Original Application vide the impugned order dated 8.5.2009
holding that the private respondents before us are entitled to grant of ad hoc
bonus at the revised calculation ceiling mentioned in the Office Memorandum
dated 10.10.2008.
The fundamental
plea of the learned counsel for the petitioners, initially, was that the nature
of employment of the private respondents before us was different as they were
not regular Government employees and they were not even paid bonus. He pleaded
that there could not be parity with the regular Government employees. However,
he could not dispute the position that in view of the pronouncement in Chet Ram's case (supra), these
GDS had already been held to be Government employees.
The second limb
of the submission of the learned counsel for the petitioners, based on the
distinction of the private respondents not being "regular" Government
employees, was that what was being paid to them was ad hoc payment on analogy
of productivity linked bonus and not a productivity linked bonus. In this
context, our attention has been invited to Swamy’s Compilation of Service Rules for
Extra Departmental Staff, the relevant portion whereof is being extracted
below:-
“(14)
Ad hoc payment on the analogy of Productivity-Linked Bonus. - Consequent on the
introduction of a scheme for the grant of Productivity-Linked Bonus to the
regular P & T employees, the question of giving some incentive to the
Extra-Departmental employees for increasing the productivity has been under
consideration by the Government.
2. The Government have since decided that incentive
to the Extra-Departmental employees shall be made subject to the following
conditions:-
(1) The Scheme will be
applicable to the ED Civil Writ Petition No. 13491 of 2009 8 Agents
during the years when regular employees in the P & T Department become entitled
to bonus on the basis of productivity achieved during any particular year.
(2) A flat rate
monthly wage of Rs.75 will be assumed for all ED Agents irrespective of their
actual employment and the quantum of ad hoc payment for each year will be based
on wages for the same number of days as announced for regular employees during
that year. If the regular departmental employees are entitled for 25 days'
wages, the ED Agents will earn ad hoc payment of Rs. [75 x 25] / 30 = Rs.62.50.
(3) The formula for
determining the number of days' wages with reference to the productivity
achieved will be same as for regular departmental employees.
(4) The Scheme for
making ex gratia payment shall commence with reference to the performance in
the financial year 1979-80 and will be reviewed after observing its working for
three years as in the case of regular employees. [D.G., P & T, Letter
No.37-1/79-PAP (i), dated the 17th March, 1980]”
It is, thus, his
contention that the Office Memorandum dated 10.10.2008 will not ipso facto
apply to the private respondents as it relates to the calculation of ceiling
for payment of productivity linked bonus and ad hoc bonus to Central Government
employees while what was being paid to the private respondents was an ex-gratia
payment which was neither a productivity linked bonus nor an ad hoc bonus . It
is, Civil Writ Petition No. 13491 of 2009 9 however, not disputed that this ex-gratia payment was at parity
with the productivity linked bonus from 1988-89 to 20.5.2006. The dispute is
relatable to the years 2006-07 and 2007-08.
We also posed a query to the learned counsel
for the petitioners as to how were the provisions of the said Act excluded from
application to the GDS keeping in mind the expansive definition of an employee
which clearly covers them. We, once again, do not have a satisfactory answer
but, on the other hand, on perusal of the written statement, we find an admission
of the respondents before the Tribunal (petitioners herein) in para-1, on
merits, to the effect that "They are paid bonus in the shape of
Ex-gratia". Thus, it is quite clear to us that the petitioners themselves
perceive that what is being paid to the GDS is actually bonus but under the
nomenclature of exgratia.
Learned counsel
for the petitioners submits that the matter in issue, really, does not pertain
only to the private respondents before us but would affect about 3,50,000 such GDS
all over the country and separate petitions have been filed. It is, however,
quite plausible that a number of them may not be covered under the Scheme. We
do not have the exact number of people who will be covered under the Scheme.
In the conspectus
of the aforesaid legal position, the only question to be examined will be as to
what is the meaning and interpretation of the Office Memorandum dated
10.10.2008 of the Ministry of Finance which appears to be a consequence of the
amendments carried out to the said Act while increasing the Civil Writ Petition
No. 13491 of 2009 10 ceiling under Section 12 of that Act from ` 2,500/- to `
3,500/- per mensem. This is in the context of the earlier Office Memorandum
dated 20.9.1995 when the ceiling limit was raised from ` 1,600/- to ` 2,500/-
per mensem. We may also note that the Office Memorandum dated 10.10.2008 itself
states that it is being issued consequent upon recent amendments to Section 2 (13)
and Section 12 of the said Act enhancing the calculation ceiling effective from
1.4.2006.
We, thus, call
upon the Department of Expenditure, Ministry of Finance, to clarify the
aforesaid aspect arising from the Office Memorandum dated 10.10.2008 qua its
applicability to the GDS who are being paid "bonus in the shape of
ex-gratia payment". This is so as the phraseology used in that Circular is
of productivity linked bonus and ad hoc bonus. Once such a clarification is
issued, naturally, the Postal Department will be bound by the same and the fate
of its stand qua the amount payable to the GDS would, thus, depend on the
clarification to be made by the Ministry of Finance.
In the end, we
must clarify that the petitioners not only sought to deprive the GDS of the
benefits but also sought to make recovery for the payments already made in two Divisions
in the Punjab Circle for the two years in question i.e. 2006-07 and 2007-08.
The amount having been paid by the petitioners themselves and not based on any
misrepresentation by the private respondents, in our opinion, is not
recoverable in view of the pronouncement of the Hon'ble Supreme Court in Chandi Prasad Uniyal and others vs.
State of Uttrakhand and sothers, (2012) 8 Supreme Court Cases 417.
The exercise be
carried out by the Ministry of Finance within a maximum period of two months
from the receipt of this order.
The petition is,
accordingly, disposed of in terms of our above directions, leaving the parties
to bear their own costs.
( SANJAY KISHAN KAUL )
CHIEF
JUSTICE
July 10, 2014
Kang
( AJAY TEWARI )
JUDGE
