In CIVIL APPEAL NO.2858 OF 2022-SC- Voluntary Retirement Scheme benefit is entitlement which assumes character of property to employee when his application for VRS is accepted: SC Justices D.Y. Chandrachud & Aniruddha Bose [20-04-2022]

Read Order: SHANKAR LAL Vs. HINDUSTAN CORPORATION LTD. & ORS 

Mansimran Kaur

New Delhi, April 25, 2022: The Supreme Court has held that VRS benefit is an entitlement and assumes the character of property to the employee concerned once his application for VRS is accepted. It is the right of a person under Article 300A of the Constitution of India to have the VRS benefit to be given on accurate assessment thereof, the employer here being a public sector unit.

A Division Bench comprising Justice Dhananjay Y.  Chandrachud and Justice Aniruddha Bose allowed the present appeal by observing that the employer in the instant case was the sole custodian of the records and therefore, the appellant should receive the benefits under the VRS Scheme keeping in view the correct date of birth of the appellant.

The appellant in the present case was questioning the validity of an order of the employer. The first respondent in the instant case treated the date of birth  of the appellant as September 21, 1945.  However the case of the appellant was that his date of birth was September 21, 1949. The date of birth herein held relevance as the same was the basis for computation of his benefits arising from the Voluntary Retirement Scheme. 

Brief facts of the case were that the appellant was seeking benefits from the first respondent and under the Voluntary Retirement Scheme, he was awarded the same. However, the benefits were calculated keeping in view the date of birth of the appellant as September 21, 1945.  Consequently, the appellant  claimed his date of birth to be September 21, 1949 and stated that he was entitled to higher financial benefits and a longer tenure of service.  The order of the first respondent was assailed before the High Court of Rajasthan by way of a writ petition, however,the same was rejected by the Single Judge and later, by the Division Bench.  

In the present appeal, the Court ignored all the variations in the dates claimed by the appellant in several documents and stated that for adjudication of the present appeal, the Court would consider the date to be September 21, 1949 as the date claimed by the petitioner. 

The impugned order of the Division Bench of the High Court dated December 8, 2016 was assailed by the appellant wherein the Division Bench refused to entertain the appellant’s plea against the order of dismissal of the Single Judge of the High Court. 

The appellant’s prime contention was that his date of birth in the service book was September 21, 1949. The Counsel for the appellant further relied on a Life Insurance Policy wherein the same date of birth was mentioned. Further, the pay slips were put on record for the months August 1994 to August 2001 and both the pay slips had messages wishing him birthday on the same date, as claimed by the petitioner. 

The Court took into consideration various documents maintained by the employer themselves wherein his date was shown as September 21, 1949.  Indeed, in the computation sheet of his estimated VR benefit, the same date was reflected. The Court noted that the appellant was not apprised of the fact that his date of birth was changed and came to know about the same after he was relieved from his service. The date of September 21, 1945 for the first time was found in the records in a form that was issued by the employer March 22, 2003. In his service certificate issued on October 29, 2002, his date of birth was mentioned as September 21, 1945.

The Counsel for the respondents submitted that the appellant challenged the same, after receiving all the VRS benefits which were computed in accordance with his date of birth as September 21, 1945. 

The Court was of the view that the plea of the petitioner was not entertained as there was no record found to justify the fact that his date of birth was September 21, 1949 and the Form B was taken into consideration stating his birth date as otherwise. The  Court further took into consideration the stand of the employer saying that there was an error in recording the age of the appellant as 26 years in 1975 and thus no reliance could be placed on such a record. The Court asserted that the authorities proceeded in this matter in a rather mechanical manner and embarked on a unilateral exercise of correcting the age entry in the service book on their perception that an error was being corrected. This exercise was conducted without giving any opportunity of hearing to the appellant and at the fag end of his service tenure. Otherwise, various documents including the L.I.C. policy consistently reflected September 21,1949 to be the appellant’s birthdate, added the Bench.

It was further observed that though Form B possessed high probative value, however the same did not hold conclusive proof of what was contained therein. The competent authority proceeded on the basis that since the appellant did not question the entry in Form B, he ought not to be permitted to question the same at the time of his voluntary retirement.

The Court further observed that this was not a case where a workman was seeking to change his date of birth to his benefit at the end of his career. This was a case where the employer was altering the records at the end of the career of the workman to his detriment on taking unilateral decision that the date of birth specified in the appellant’s service book was erroneous, relying on a date disclosed in a statutory form. 

The Top Court said, “VRS benefit is an entitlement and assumes the character of property to the employee concerned once his application for VRS is accepted. It is the right of a person under Article 300A of the Constitution of India to have the VRS benefit to be given on accurate assessment thereof, the employer here being a public sector unit. If at the time of quantifying the VRS benefit after accepting an employees application for voluntary retirement, the employer take any step that would reduce such benefit in monetary terms, such step shall have to be taken under the authority of law.”

The employer had taken a stand that the date of birth recorded of the appellant in the service book was an act by mistake.  The Top Court observed that the same was a weak explanation. It was further observed that ample steps were taken by the employer in relation to the appellant’s employment on the basis of the entry in his service book.  Additionally it was stated that the employer is the custodian of the records. They acted all along on the basis of the service entries till the appellant took VRS.

It had been pleaded by the appellant that at the time of his appointment, the office of the respondent company had entered his date of birth as September 21, 1949 in all their records . In the light of these facts, the Court refused to accept the version of the employer that service book record  was a mistake. The employer, a public sector unit in this case, was expected to act with a certain element of responsibility in maintaining the service records of their workmen and ensure that there was uniformity in particulars concerning individual employees, the Court remarked. Lastly, it was observed that the principle of estoppel cannot be implied in the present case to restrict the appellant from claiming the benefit in a proper manner. 

Accordingly, the appeal was allowed, and directions were issued to the respondents to grant him the benefits under the VRS scheme in accordance with the date of birth as September 21, 1949.  As a result, the impugned judgment of the Division Bench was set aside.