Court Supports Retired Employee’s Claim for Financial Benefits After Voluntary Retirement
A division bench of the Delhi High Court, consisting of Justice C. Hari Shankar and Justice Sudhir Kumar Jain, ruled on an appeal by BSES Rajdhani Power Ltd. The court supported a previous decision in favor of D.P. Sharma, a former employee. BSES had claimed that Sharma lost his right to contest disciplinary actions after choosing to take part in a Special Voluntary Retirement Scheme (SVRS). However, the court affirmed that Sharma could still seek certain financial benefits, including pay revisions.
Background
D.P. Sharma worked for the Delhi Electric Supply Undertaking (DESU), which was later taken over by BSES Rajdhani Power Ltd. He faced disciplinary action in 1990 for alleged misconduct dating back to 1980 and 1982. Although the Inquiry Officer cleared him in 1997, the Disciplinary Authority (DA) disagreed and imposed a penalty, initially reducing his pay scale by three stages. This penalty was later softened to a two-stage reduction by DESU’s Chairman in 1999. Unsatisfied with this outcome, Sharma filed a writ petition in the Delhi High Court in 1999.
In 2003, Sharma chose to retire voluntarily under BSES’s SVRS, agreeing that his reduced salary would be used to calculate his retirement benefits. However, in 2015, the Disciplinary Authority confirmed the original punishment, prompting Sharma to file another writ petition against this decision.
In 2019, a Single Judge of the Delhi High Court canceled the disciplinary proceedings and upheld Sharma’s challenge, even though BSES argued that his application for SVRS prevented any further claims. BSES Rajdhani then appealed this ruling.
Arguments
BSES Rajdhani, represented by Mr. Sandeep Prabhakar, contended that by accepting the SVRS, Sharma had given up all previous claims against the company, including claims for increased financial benefits like pay scale revisions. They pointed to specific clauses in the SVRS and Sharma’s signed agreement, asserting that these indicated a complete end to the employer-employee relationship. Citing the case A.K. Bindal v. Union of India, BSES argued that once an employee opts for voluntary retirement, they cannot reopen any financial claims arising after that point.
In response, Mr. Anuj Aggarwal, Sharma’s lawyer, argued that the benefits he was claiming were not included in the SVRS package. He referenced a Supreme Court ruling in A. Satyanarayana Reddy v. Labour Court, which clarified that only claims explicitly covered by the SVRS are extinguished when an employee opts for voluntary retirement. He maintained that Sharma’s case involved entitlements not covered in the SVRS, allowing him to pursue these benefits even after retirement.
Court’s Reasoning
The court first examined the SVRS and Sharma’s agreement. It recognized that while Sharma accepted the scheme based on his reduced salary, the benefits he was claiming were not part of the retirement package.
Next, the court assessed BSES’s reliance on the A.K. Bindal judgment. In that case, the Supreme Court ruled that employees who take voluntary retirement cannot later claim financial benefits like pay revisions. However, the court pointed out that A.K. Bindal involved pay revisions directly tied to retirement packages, while Sharma’s claim stemmed from a disciplinary action unrelated to the SVRS package. The court also referenced A. Satyanarayana Reddy, which permitted employees to claim certain financial benefits post-retirement if those claims weren’t explicitly covered under the SVRS. It found that Sharma’s pay revision related to the penalty reduction was a separate matter, not part of the SVRS retirement benefits.
The court further clarified that choosing voluntary retirement under SVRS does not mean giving up all financial claims unless explicitly stated in the scheme. Although Sharma retired with a reduced pay scale, he still had the right to challenge the disciplinary proceedings and seek a reversal of the punishment affecting his pay. The court noted that accepting BSES’s argument would undermine the purpose of judicial oversight in such cases. Finally, the court addressed BSES’s timing in raising their SVRS defense, stating that legal defenses based on established laws can be brought up at any stage if they are valid.
