Union of India Vs Hindustan Photo Films Workers Welfare Centre (CITU) & Ors. Etc. (Supreme Court of India)
The proceedings arose from litigation concerning the Voluntary Retirement Scheme (VRS) implemented for employees of Hindustan Photo Films Manufacturing Company Limited, a Public Sector Undertaking declared a Sick Industrial Company. The Board for Industrial and Financial Reconstruction (BIFR), by order dated 30 January 2003, recommended winding up of the company, and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) confirmed that recommendation on 7 June 2005. Subsequently, the Ministry of Heavy Industries and Public Enterprises, by letter dated 20 March 2014, approved a VRS package for the employees, following which the company issued a circular dated 21 March 2014 for its implementation. The employees’ union challenged both the Government’s letter and the company’s circular through writ petitions, seeking, among other reliefs, 72 months’ salary on the 2007 pay scales, arrears of pay on the 2007 pay scales, non-deduction of specified recoverable advances and allowances, and permission to continue occupying staff quarters until 1 May 2016.
Read HC Judgment in this case: VRS Scheme Appeals Dismissed; Single Judge Order Modified on Company Liability: Madras HC
The learned Single Judge rejected the employees’ challenge to the validity of the Government proceedings dated 20 March 2014 and the company’s circular dated 21 March 2014, but directed implementation of the severance package within one month. The employees, after receiving the severance package, were directed to vacate and hand over possession of the staff quarters within one month. The learned Single Judge also held that no income tax was recoverable from the severance package. These directions gave rise to writ appeals filed by the management and by the Government of India.
