w w w . L a w y e r S e r v i c e s . i n

A.A. Abdul Rasheed & Others v/s Union of India, Represented by The Secretary to Govt. of India, Ministry of Communications, New Delhi & Others

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    OP (CAT). No. 63 of 2017 (Z)

    Decided On, 13 November 2019

    At, High Court of Kerala


    For the Petitioner: M.R. Hariraj, G. Bindu, P.A. Kumaran, Priyada R. Menon, K. Rajagopal, Advocates. For the Respondents: R1, Assistant Solicitor General, R1, T.V. Vinu, CGC., R1-R2, Johnson Gomez, SC.

Judgment Text

Vinod Chandran, J.

1. Conversion of a Government Department into a public sector undertaking, whether would disable the persons recruited prior to the actual date of conversion from being considered as Government employees for reason of their appointment being after the new undertaking came into existence; is the question arising in the above case.

2. The Tribunal before whom the petitioners had first agitated the cause found against them. It was held that the Bharath Sanchar Nigam Limited (hereinafter for brevity 'BSNL') and Department of Telecom (hereinafter for brevity 'DoT') having interpreted the terms and conditions of creation of BSNL, absorption of staff etc there can be no reliance placed on the Presidential orders which conferred such status to Government employees, on the petitioners. The Tribunal found that though they were recruited during the threshold of the conversion, they cannot be treated as DoT employees. Their appointment on completion of formalities and training was made after BSNL had come into existence. The applicants were found to be liable to concede to the position taken by the BSNL, in the matter of their status as government employees; which stood dis-allowed.

3. The learned Counsel for the petitioner Sri.M.R. Hariraj took us through the various documents which indicate that all of the applicants/petitioners were appointed under the compassionate scheme of appointment. They were issued with temporary appointment orders by DoT, subject only to their completion of training, for which they were deputed, also by DoT. While they were undergoing training, the conversion is said to have materialised on 01.10.2000. They completed the training and reported for duty with the new entity; the DoT having already been converted as BSNL. They were appointed under the BSNL just a few days after the crucial date of 01.10.2000. Only two of the petitioners were appointed after two months since their training commenced a little later. While they were so continuing, they were asked to exercise an option which is applicable to all the employees who were deputed from the DoT to the BSNL, as to whether they wish to continue in BSNL or seek repatriation back to DoT. All the petitioners exercised their option to continue in the BSNL based on which Presidential orders were issued allowing them to be continued in the BSNL. However, later these Presidential orders were interfered with by the Assistant General Manager of the BSNL which are produced as Annexure A9 and impugned in the original petition.

4. It is submitted that the applicants though only deputed for training were regularly recruited under the scheme and but for the unfortunate circumstance of the conversion to BSNL having intervened on 01.10.2000 they would have been treated as Central Government Employees. Other employees of the DoT, prior to the formation of BSNL, who were deputed and exercised options to be continued in the BSNL, when absorbed, their right to pension and their membership in the General Provident Fund were protected. The petitioners are also entitled to such protection but however, the same has been declined by cancellation of the Presidential orders which is challenged as without jurisdiction and issued in violation of the principles of natural justice.

5. The learned Standing Counsel appearing for the BSNL Sri Johnson Gomez would at the outset take us through Ext.R2(c) series of documents produced in the Original Petition which according to him is issued in cancellation of the Presidential orders by the Government of India itself. Rule 37-A of the Central Civil Services (Pension) Rules, 1972 (for brevity “CCS Pension Rules”) relied on by the petitioner is specifically read out to point out that in the case of petitioners there was no transfer as contemplated in sub-rule(1) nor do the petitioners enjoy the status of a Government Servant as on the previous day of 01.10.2009. The recruitment rules produced as Annexure R2(c) along with reply statement before the Tribunal is specifically referred, to contend that the training is before appointment and the rules specifically speak of an appointment after the training is successfully completed. The appointment of the petitioners having occurred only after conclusion of the training, which is after 01.10.2000, they can only be deemed to be appointed to the BSNL. No status accrues to them of government servants transferred from the DoT To BSNL. Reference is also made to Ext.P2, Offer of Temporary Appointment, issued by DoT to further canvass the position that the petitioners were never appointed under the DoT. An Office Memorandum referred to by the Jaipur Bench of the Central Administrative Tribunal, in the order produced as Annexure A17, is pointed out to contend that in a similar situation,the Government had come out with a specific scheme by which the persons who were send for training were deemed to be appointed to the Government prior to 01.01.2004. A similar decision having not been taken in the case of the petitioners, they cannot claim the status of a government servant, asserts the learned Standing Counsel.

6. The learned Counsel for the petitioners in reply pointed out that the order of the Jaipur Bench of the Tribunal produced as Annexure A17 relied on the Memorandum pointed out by the learned Standing Counsel to allow a similar claim. The said judgment was unsuccessfully challenged before the High Court of Rajasthan. The learned Standing Counsel for BSNL and the learned Central Government Standing Counsel informs us that the same has been stayed by the Hon'ble Supreme Court. Hence we will not look into the judgment of the Rajasthan High Court which in any event has only a persuasive effect on us. The OM protected persons who were recruited and send for induction training to the benefits due under the old pension rules which stood altered from 01.01.2004; after which date they were actually appointed. We cannot but observe that identical was their position with the petitioners here, with only the intervening circumstance being different. We'll not rely on that O.M alone because as pointed out, there is no identical protection specifically ordered in this case.

7. The admitted facts are that the petitioners were recruited under a compassionate scheme of appointment, for reason of they being dependents of employees of DoT who died in harness. The date of commencement of training with respect to petitioners 1 to 3, 5, 6 and 8 to 10 are similar, ie: 10.07.2000 and they joined BSNL on 10.10.2000. The petitioners 4 and 7 were deputed for training on 18.09.2000 and they joined in the BSNL on 18.12.2000. The training was for a period of three months. Annexure A1 series of documents are the communications issued to the petitioners offering them employment in relaxation of normal recruitment rules, on compassionate grounds. These also speak of verification of certificates of qualifications and request the petitioners to wait for further communication. After verification of such documents and certificates and also finding them to be eligible for appointment Annexure A2 series of communications were issued offering them temporary appointment and directing them to report for training. The regular appointment could only be after successful completion of training. All the petitioners completed the training successfully. However, by the time they completed the training and reverted to the employer, the BSNL came into existence and all of them joined as per Annexure A6 series of orders. Pertinent is the fact that only some of the activities of the DoT got converted and vested with the BSNL and the DoT remained as a department of the Union of India.

8. The petitioners continued on the basis of their appointment in BSNL and later were issued with option forms for absorption in BSNL or retention of Government Status, by repartriation. Annexure A7 series of documents are the options exercised, by which all the petitioners opted to remain in the BSNL. In accordance with that, Government of India (DoT) issued Annexure A8 orders which was under the order of President of India conveying the factum of acceptance of option and permanent absorption of the petitioners in BSNL; who were styled alternatively as permanent and temporary employees of the DoT. It is based on these orders they were continuing and it was while they were so continuing that out of the blue the petitioners were issued with Annexure A1 orders by various officers of the BSNL canceling the Presidential order. We have to immediately notice that no such cancellation could have been effected by the BSNL and the said ground has been accepted by the Official respondents insofar as the DoT, far later in the year 2017, issued Ext.R2 orders produced in the Original Petition again canceling the Presidential Orders accepting the fact that the earlier orders were incompetent. This was also much after the order of the Tribunal was passed, the sustainability of which we will look at a little later; on all aspects and not confined to this one ground.

9. The claim as to retention of government employee status is based on the benefit available to the DoT employees who were later absorbed in the BSNL, for pension from Government of India itself. Rule 37-A of the CCS Pension Rules as pointed out by the learned Counsel for the petitioners is very relevant. Sub-rule (1)speaks of enmasse transfer of government servants in a Department to a Public Sector Undertaking [PSU] or autonomous body on terms of foreign service without any deputation allowance, till they get absorbed to the said undertaking, on conversion of a Department into a PSU or an autonomous body. Sub-rule (2) and (3) speaks of an option available to a transferred government servant to revert back to the Government or seek permanent absorption in the new undertaking. As per sub-rule (4) the permanent absorption of the government servants as employees of the PSU takes effect only from the date on which their options are accepted by the Government. They cease to be government servants from the date of such acceptance and continue as employees of the PSU, but their right to pension as a government employee and the membership in the GPF remains protected.

10. Sub-rule (4) is very relevant insofar as the status of the government servant prior to the acceptance of an option exercised by such servant. As we noticed earlier, all the petitioners were deputed for training by the DoT and later when they joined for duty after successful completion of training the BSNL had been formed. The obligation to grant them appointment under the compassionate appointment scheme was of the Government under which the DoT was a department. They were also recruited by the DoT and the training too was conducted by the DoT. The BSNL was created, by virtue of the conversion of DoT, a Department of the Government, or certain activities being vested on the PSU. BSNL discharged the obligation of the Government of India in making appointments of these petitioners, recruited earlier by DoT. The BSNL could not have taken an independent decision regarding their appointment nor was there any question of verification of their eligibility or qualifications; it was automatic,being an imperative obligation and an imprimatur of the terms of conversion. It cannot hence be said that as on the date of formation of BSNL they were not government servants by reason of their appointments having not been made regularly.

11. We come back to the rule, to pertinently observe that sub-clause (4) of Rule 37-A makes it clear that till the option of the petitioners were accepted by the Government of India they continued as government servants. Hence on their appointment after successful training and continuance in the BSNL they retained their status of government servants. Fully recognising their status, the DoT issued them with the formats of application forms, for exercising option, either to be retained in the BSNL or to be reverted back to DoT. It is very clear that if they had exercised an option to be reverted back, they would have been taken back and accommodated in the DoT under the GoI itself; which then would have been irreversible at this distance of time. The vexing question is, if the exercise of one option was irreversible, would the exercise of the other, be open to reversal on administrative vagaries? This impossibility of reversal of acceptance of exercise of option, further validates their claim of having government servant status even when they joined the BSNL and continued there in the very same status; prior to acceptance of the option exercised by them for retention in the BSNL.

12. We also have to take note of the arguments of the learned Standing Counsel appearing for the BSNL, with reference to the recruitment rules. The rules produced as Ext.P5 speak specifically of the training and the bond to be executed, as per Rule 7. It is the mandate of Rule 7 that direct recruits and promotees, before appointment shall undergo training for a period of three months. These recruits shall also before proceeding for training execute a bond in the form specified in the appendix to the rules. During the period of training they are entitled to a training allowance as seen from Annexure A2 and not regular scales of pay. Annexure A2 also requires furnishing of a security of Rs.10,300/- for disbursement of training allowance. All these indicate that the DoT sent the selected candidates for training with the rigour of joining back for appointment, which appointment is only subject to the successful completion of training. The terms of appointment after completion of training are explicit in paragraph 3 of Annexure A2. Ann:A2, while making it clear that appointment is temporary and does not confer any title to permanent appointment, speaks in the same breath as to the permanent appointment being subject to availability of vacancies; which is the only impediment, if and when the recruit successfully completes the training. Paragraph 7 only speaks of the candidates name being removed from the list of approved candidates, if the acceptance of temporary appointment is not specifically communicated. This does not reduce the status of the candidate who reports for training, to merely an approved one. On successful completion of training subject to availability of vacancies there is a mandate on the DoT to give appointment and the BSNL which took over the DoT also appointed the petitioners on completion of training; discharging their obligation as per the terms of conversion thus fulfilling the promise of appointment held out by the DoT.

13. In this context, we also refer to the Fundamental Rules (FR) as pointed out by the learned Counsel appearing for the petitioners. 'Duty' as per the definition in sub-rule 6(a)(i) of FR9 includes service as a probationer or apprentice provided such service is followed by confirmation. Sub-rule 6(b) also enables a course of instruction or training in India to be treated as duty of a government servant. It is also pertinent that FR26 enables such period to be counted for other purposes; sub-clause (a) of which says “All duty in a post on a time-scale counts for increments in that time-scale”(sic). There can hence be no dispute that the service of the petitioners is deemed to have commenced from the date of joining for training for the purpose of pension and grant of increments.

14. The BSNL places heavy reliance on Annexure R2(a) series of documents, produced in the original petition, to assert that the Presidential orders have been canceled. It is reiterated that the purported cancellation is in the year 2017 when the OP was pending before this Court. The order is passed by the DoT, Government of India. It is specifically stated therein that the impugned orders in the OA, passed by the Officers under the BSNL cannot be sustained since they are not vested with the power to cancel a Presidential order. The first reference in Ext.R2(a) is the Presidential order issued to the petitioners accepting their exercise of option which is produced as Annexure A8, in the OA. The operative portion of Annexure R2(a) speaks of the cancellation having been issued by the Director, Establishment of Kerala, of the DoT by the power vested with him vide order under reference (2). That is also an order of the DoT dated 29.06.2017 which has not been produced before us, nor the Presidential sanction to cancel; in which event we are entitled to draw an adverse inference.

15. Be that as it may; even if we accept it, then the question is what is the effect of the cancellation; leaving aside, for the moment, our finding on the irreversibility of the acceptance of an option. In this context we note Annexure A8, the first order issued by the DoT, on sanction from the President, which is termed as the Presidential order. We extract the said order from one of those produced in Annexure A8 series.

No.27-1KRL/Chief Engineer (Civil)/247/2002 Dated 13.3.2002


Sub: Permanent absorption of Shri Prasobh J Nair, TOA(G)I, staff No.4040

in Bharat Sanchar Nigam Limited

1. Pursuant to letter No.BSNL/4/SR/2000 dated 2.1.2001 on the above subject, and in accordance with the provisions of Rule 37-A of CCS (Pension) Rules, as amended from time to time, sanction of the President is hereby conveyed to the permanent absorption of Sri. Prasobh J Nair, a permanent employee of the Department of Telecommunications, in BSNL, with effect from the date and under the terms and conditions as indicated below.

2. Date of effect:-The permanent absorption shall take effect from 01.10.2000, forenoon.

3. Pension/Gratuity:- Shri Prasobh J Nair shall be eligible for pensionary benefits including gratuity as per the provisions of Rule 37-A of the CCS(Pension) Rules, 1972, as amended from time to time.

4. Family Pension:- The family of Shri Prasobh J Nair shall be eligible for family pension as provisions of Rule 37-A read with Rule 54(13-B) of CCS(Pension) Rules, 1972, as amended from time to time.

5. Regulation of pay on absorption:-To be regulated in terms of para 4 of DOP & PW O.M. No4/18/87-P&PW(D) dated 5.7.1989

6. Leave:- The Earned Leave and Half Pay Leave at the credit of Shri Prasobh J Nair stands transferred to BSNL on the date of absorption as provided for under Sub-rule 24(b) of Rule 37-A of the CCS (Pension) Rules.

7. Provident Fund:- The amount of subscription together with interest there on standing to the credit of Shri Prasobh J Nair in the General Provident Fund account will be transferred to his new Provident Fund Account under the BSNL as provided for under Sub-rule 24(a) of Rule 37-A of the CCS (Pension) Rules, as amended from time to time.


DIRECTOR (Estt-Kerala)


16. The order is only insofar as the permanent absorption of the petitioners permanently in BSNL. They were alternatively described as permanent or temporary employees of the DoT in the order. They were also granted protection under Rule 37-A of the CCS (Pension) Rules. The cancellation of such an order would only result in their being reverted to Government servi

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ce under the DoT. The question would be as to whether after long years of such service in BSNL, they can be reverted back to the DoT. As we noticed earlier, the option exercised by the employees whether it to be reversion back to DoT or for permanent absorption in BSNL, when accepted by the Government of India is irreversible and there could be no cancellation effected thereat especially after long years. We also notice that cancellation has been effected subsequent to the acceptance of option, without notice to the parties and in contravention of the specific rules referred to by us herein above. 17. We do not hence find any reason for Union of India to take a view, in the case of the petitioners who were recruited and dispatched for induction training, from being considered differently from those positioned identically when there was a change effected in the pension rules with effect from 01.01.2004; as revealed from the O.M relied on by the Jaipur Bench of the Administrative Tribunal. 18. On the factual background and the legal reasoning as above we find it difficult to sustain the order of the Tribunal and set it aside declaring the petitioners to be Government Servants as employed under the DoT, who were transferred and later absorbed in the BSNL. The petitioners have lost their status of government servants only when their options for retention in BSNL were accepted by the Government by an order with sanction from the President of India, as is seen from Annexure A8 series. This cannot be easily meddled with, especially since the consequence will be a reversion to government service and is hence irreversible. What has been canceled even if we assume it to be with Presidential-sanction is the absorption in the BSNL, not the status accrued to the petitioners of government servants. The Original Petition (CAT) is allowed and so is the OA, declaring the petitioners, servants of Union Of India under the DoT, who on creation of BSNL, were transferred and permanently absorbed there under Rule 37-A, with all the protections available there under. We leave the parties to suffer their respective costs.