Gujarat High Court Upholds Order Denying Reinstatement Of 448 Employees On Ground Of Not Withdrawing Voluntary Retirement In Time

The Gujarat High Court dismissed a batch of appeals challenging an order refusing to grant 448 individuals reinstatement with Indian Petrochemicals Corporation Ltd. on the ground that they had opted for voluntary retirement and did not withdraw from the concerned scheme within the validity period. 

The court observed that the employees had admitted that they filed applications for withdrawal from the scheme after the 20.03.2007 the date on which the validity ended. It also rejected the employees contention that that they had a "vested right" to withdraw the application before being relieved from service. 

Referring to the deposition of Power of Attorney holder of the employees a division bench of Justice AS Supehia and Justice RT Vachchani in its order said:

"Thus, from the evidences, it is established that all the employee were aware of the last date of the Scheme. Though, the POA has contended that the employees had filed the withdrawal application on 20.03.2007, there is not a single application of withdrawal of such date, which is either placed before the Labour Court or before this Court. Some of the applications, which are produced are between 21.03.2007 till 23.03.2007. The employees in their evidence have accepted that they have filed such application after 20.03.2007, between these dates. All employees were relieved in the first week of April, 2007. On 03.04.2007, they were handed over cheques for the amount of gratuity, which they deposited in their bank accounts". 

The court thus said that the employees had failed to prove that they had filed the application for withdrawal from VSS on or before 20.03.2007, and all the applications are subsequent to the closure of the Scheme.

Referring to Supreme Court judgments the court said that Apex Court has summarized that in cases where the scheme is contractual in nature and not a statutory in character, the provisions of the Indian Contract Act, 1872 would apply.

"A VRS / VSS scheme floated by the employer would be treated as an “invitation to offer” and the application submitted by an employee pursuant thereto would constitute an “offer”. Such an offer does not amount to resignation in praesenti, and it can be withdrawn during the validity period of the scheme," the bench noted.

The high court observed that in the present case, the appellants did not filed the withdrawal applications during the validity of scheme, but had filed it subsequently, that too when the Company passed an office order in the night hours of 20.03.2007, which was placed by way of Circular dated 21.03.2007.

The court said that the employees have no case since they filed the withdrawal after the validity of the scheme.

"...it is an admitted fact that all the appellant–employees submitted their withdrawal applications between 21.03.2007 and 23.03.2007. The VSS is not statutory in nature. The Labour Court and the learned Single Judge have disbelieved that the appellant employees went in the night hours on 20.03.2007 to submit their applications for withdrawal. We also do not find any cogent evidence in this regard. The applications, which are on record do not bear any date of 20.03.2007, but are subsequent. The last date of validity of the scheme was 20.03.2007. Had the appellant- employees submitted their withdrawal applications during the validity period, they would have had an indefeasible right to withdraw from the VSS. It is an admitted fact that 19 applications made by other employees before the expiry of the scheme are accepted by the Company. Once the scheme got closed on 20.03.2007,  the Company was not under an obligation to pass orders either accepting or rejecting the withdrawal applications submitted thereafter...we find no merit in the submissions of the appellant–employees that they had the vested right to withdraw the application before their relieving from service on the ground that their jural relationship continued with the Company". 

The court said that the jural relationship having being continued until the first week of April 2007 or till one months' notice period, and the appellants' right to withdraw from the VSS during this period pales into insignificance in view of the fact that the appellants have not submitted their applications during the validity of the Scheme.

The court also said that the existence of office order nor the manner in which it has been issued can be doubted, as 1422 employees have taken the benefit of the scheme which emanates from the office order. 

The court said that none of these employees have raised any doubt about the existence of the Office Order dated 20.03.2007, and communication of the same vide Circular dated 21.03.2007. 

"It was placed at the conspicuous place i.e. on the Notice Board. From documents on record, we find that mode of placing of the instructions on the Notice Board is accepted by the employees of the Company, which included 1422 employees. Hence, the existence and validity of the Office Order dated 20.03.2007 and the Circular dated 21.03.2007 does not get obliterated on the testimony of this witness," the court said. 

Background

The appellants had challenged a Single Judge's 2022 order rejecting their pleas against awards passed in the Labour Court. Labour Court had dismissing 462 reference proceedings and refusing to grant the relief of reinstatement with back wages to the appellants.

The controversy pertains to the withdrawal of applications filed by the appellant–employees seeking voluntary retirement under the Voluntary Separation Scheme (VSS) / Special Separation Scheme (SSS) introduced by the respondent–Indian Petrochemicals Corporation Ltd. vide Circular dated 06.03.2007, which has remained in operation from 06.03.2007 to 20.03.2007.

2,400 employees, including the present appellants, applied to avail the benefits under the said Scheme.On 21.03.2007, a Circular was pasted on the Notice Board of the Company, indicating the acceptance of the applications vide Office Order dated 20.03.2007

It is the case of the appellants that, they went in the late-night hours of 20.3.2007, and orally made their request for withdrawal from the VSS; however this was rejected. 

Between 21.03.2007 and 22.03.2007, the employees submitted formal applications for withdrawal. The appellants claimed that as on 20.03.2007, when the order purporting to accept all 2,400 applications was shown to have been passed, such an order was, in fact, not in existence, and that it was subsequently prepared and backdated with a view to deny the requests of the appellant-employees for withdrawal of their applications. 

It is further alleged by the employees that their signatures were obtained on blank forms attached to the applications for availing benefits under the VSS / SSS, and that the corresponding amounts were directly deposited into their bank accounts.

When the matter went to the labour court, it rejected the pleas against which the appellants approached the single judge first. Facing dismissal they approached the division bench in appeal. 

Case title: PUNAMBHAI ASHABHAI WAGHELA v/s INDIAN PETROCHEMICALS CORPORATION LTD. & ANR.

R/LPA NO. 84 of 2024 In R/SCA/13803/2021 AND Batch

Click Here To Read/Download Order 

Citation: 2025 LiveLaw (Guj) 140