TAMIL NADU KHADI AND VILLAGE INDUSTRIES BOARDversusM.S. KRISHNASWAMY AND ORS.

    TAMIL NADU KHADI AND VILLAGE INDUSTRIES BOARD                            A
                                    v.

c                M.S. KRISHNASWAMY AND ORS.

                           AUGUST 13, 2001

      [S. RAJENDRA BABU AND DORAISWAMY RAJU, JJ.]                            B

     Service Law :

     Tamil Nadu Khadi and Village Industries Board Act, 1959 :

     Transfer ofStaff-From one department to another-Seniority-Fixation
                                                                             c
of-Extension Officers (Khadi) transferred from Government Department to
Khadi Board-Held: Services rendered as Extension Officers (Khadi) should
be reckoned while fu:ing their seniority in the Khadi Board

     Constitution of India, 1950:                                            D
      Article 226-Writ petition-Equities-Adjustment of-Extension Officers
(Khadi) transferred from Government Department to Khadi Board-Services
reiiaered as Extension Officers (Khadi) counted towards seniority in Khadi
Board-Financial benefits-Entitlement to-Held: Khadi Board directed to
work out notional benefits-However, financial benefits to be limited to a    E
period of three years prior to the date of High Court's order.

      The respondents were Extension Officers (Khadi) in the Khadi
Department and Village Industries wing of the Department of Industries and
Commerce, which stood abolished, and the respondents were absorbed in the
Khadi & Village Industries Board constituted under the Tamil Nadu Khadl F
& Village Industries Board Act, 1959. The respondents made a representation
that their services under the government as Extension Officers (Khadl)
should be reckoned while fitting them in the seniority list of Upper Division
Clerks in the Khadl Board, which was accepted. Certain aggrieved persons
filed writ petitions before the High Court challenging the aforesaid order on G
the ground that they were senior to the respondents, which were dismissed.
Hence this appeal.

     Dismissing the appeal, the Court

     HELP : I. It is clear that the question was examined by the High Court H
                                     445
     446                     SUPREME COURT REPORTS [2001) SUPP. I S.C.R.

A on an earlier occasion, which was decided a fairly long time back and that
     decision was accepted by the Khadi Board itself. Having accepted that dec~on
     and the same had been acted upon and the benefit of seniority had been
     extended to others and that decision having become final, the High Court was
     justified in allowing the claim of the respondents. (448-G, H; 449-A)

B          2.1. In working out the various benefits arising to each one of the
     parties, the entire set up will have to be taken note of and not merely the
     three respondents as in one establishment there cannot be two classes of
     employees-those covered under the writ appeals and others who are not so
     covered. Such a result would lead to invidious situation, which should at all
C    cost be avoided. [449-E, F)

           2.2. The appellant Board is directed to give effect to the order made
    by the High Court by working out in such a way that the notional benefits
    arising by way of giving effect to the order made in the writ appeals by the
D   High Court shall be worked out. However, the financial benefits shall be
    limited to a period of three years prior to the date of the judgment of the High
    Court, i.e. from the last date of the financial year prior to the date of the
    order. (449-G, H)


         CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 6752-6754
E   of 1996.

         From the Judgment and Order dated 3 .2.1995 of the Madras High Court
    in Writ Appeal Nos. 210 and 769 of 1992 and W.P. No. 16190 of 199 l.

F        C.S. Vaidyanathan, K.V. Viswanathan, Atul Kumar Sinha, K.V.
    Venkataraman and Vijaynarayan for the Appellant.

        K. Madhava Reddy, T. Raja, Ms. T.S. Shanthi, A. Mariarputham and P.N.
    Ramalingam for the Respondents.

G
           The Judgment of the Court was delivered by

          RAJENDRA BABU, J. On the constitution of the Tamil Nadu Khadi &
    Village Industries Board [for short 'the Board') under the Tamil Nadu Khadi
    & Village Industries Board Act, 1959 [hereinafter referred to as 'the Act'], the
H   Khadi Department and Village Industries wing of the Department of the
    TN. KHADI AND VILLAGE INDUSTRIES BOARD" M.S. KRISHNASWAMY [RAJENDRA BABU. J.]   447

  Industries and Commerce stood abolished and those working either in the A
  Khadi Department or the Village Industries wing were absorbed in the services
  of the Board giving an option to such persons either to work under the Board
  without any lien in the Government or to accept the terminal benefits and put
  an end to 'the service. The Government by order made on 26.12.1961 requested
  the Board to absorb the Extension Officers and Spinning Organisers and to
. allot them to the offices of the District Khadi Offices, Central Khadi Offices, B
  Central Khadi & Regional Godowns and so on. Action was taken on the same. \
  A letter was issued on 8.9.1972 by the Government stating that the services
  rendered by Extension Officers (Khadi) prior to their appointment as Upper
  Division Clerks, Upper Division Accounts cannot be counted for the purpose
  of their services for regular appointment to higher grade.                      C
       The High Court allowed W.P.No. 1477 of 1980 filed by one Perumal
 Swami and directed to reckon his service under the Board as Extension Officer
 (Khadi) while computing the length of service as Extension Officer (Education)
 in the Department of Education. This order of the learned Single Judge was
 given effect to by the Board. On the basis of this judgment, one C. Subbayan             D
 represented that his service under the Government as Extension Officer (Khadi)
 should be reckoned while fitting him in the seniority list of Upper Division
 Clerics in the Board, though the Board had decided to the contrary in Board
 Proceedings No. 343 dated 12.6.1964.
                                                                                          E
       In the light of the judgment of the learned Single Judge of the High
 Court in WP No.1477/80, the matter was examined by the Government and
 directed to refix the seniority of the said Subbayan in the category of UDCs
 with effect from the date of his appointment as Extension Officers (Khadi)
 under the Board. The Board refixed the seniority of Subbayan by an order
 made on 20.11.1985 and the Chief Executive Officer of the Board also passed              F
 orders in other similar cases. Writ petitions were filed by R. Sivasubramaniam
 and S. Kulandhaivelu challenging the said orders on the ground that they
 were senior to the said Subbayan and certain others who had also been given
 the benefit of the judgment in Perumal Swami's case. The learned Single Judge
 quashed the said orders. Against that order, writ appeals were preferred. The            G
 Division Bench allowed the writ appeals. In doing so, the High Court took
 note of the decision in Peru ma/ Swami's case to the following effect:

         "This Government order also indicates that wherever absorption of
         staff of one department in another department is due to administrative
         reasons, their seniority is to be fixed not with reference to the date           H
     448                    SUPREME COURT REPORTS [2001] SUPP. 1 S.C.R.

A             of their absorption in the new department but with reference to the
              original appointment. The Government orders referred to above clearly
              show that the Government has always been anxious to protect the
              interests of those persons who were originally recruited by one
             department but were absorbed in another department for administrative
             reasons by providing for fixation of their seniority in the transferee
B            department, taking into account their original date of appointment and
             not the date of their absorption in the transferee department. There
             cannot be any doubt that the stand taken by the Government in those
             Government orders is just and reasonable for, if a person is appointed
             to Government service and for administrative reasons he is transferred
c            from one department to another, his seniority and chances of promotion
             should not stand affected by the transfer which is not his own
             making."

          On the ratio of the judgment in Perumal Swami's case, the High Court
    held that when the Board had itself acted and given effect to' the same, there
D   was no reason why similar benefits could not be extended to others. In those
    circumstances, the High Court also examined the powers of the Government
    to give directions under Section 13 of the Act and found that the direction
    issued by the Government was consistent with the decision of the High Court
    in Perumal Swami's case and the persons similarly placed were entitled to
E   claim that their past services in the Khadi Board as Extension Officers (Khadi)
    should be reckoned in fixation of their seniority.

           Sri C.S. Vaidyanathan, learned senior Advocate appearing for the Board,
    very vehemently contended that once the services of the employees in the
    Government came to an end and they had been given the terminal benefits,
F   the employees of the Government who were absorbed in the services of the
    Board cannot now claim the benefit of the past services in the Government.
    From the facts averred in the writ petitions or in the writ appeals or the
    Government orders produced before this Court, it is not clear as to how the
    terminal benefits had been adjusted in respect of the erstwhile Government
G   employees whose services stood absorbed in the Board. Be that, as it may,
    it is clear that the question was examined by the High Court on an earlier
    occasion in Perumal Swami's case which was decided fairly long time back
    and that decision was accepted by the Board itself. Having accepted that
    decision and the same had been acted upon and the benefit of seniority had
    been extended to others and that decision in Perumal Swami's case having
H   become final, we think that neither it is open to the Board to contend to the
   TJ'!. KHADI AND VILLAGE INDUSTRIES BOARD'· M.S. KRISHNASWAMY [RAJENDRA BABU. J.) 449

contrary now nor was the learned Single Judge justified in refusing to reckon             A
the claims of the petitioners in the writ petitions before him. Thus we find
merit in their contentions and the view taken by the High Court in allowing
the appeals is absolutely justified.

      In the above background, we asked the learned counsel on both sides
as to how the equities in this case will have to be adjusted because a large              B
number of employees would be covered by the said decision of the High
Court with the limited resources of the Board to meet the financial liabilities
that might arise by way of working out the consequential benefits arising from
the order made in the writ appeals which is in challenge before us.
                                                                                          c
      The learned counsel for the respondents very vehemently contended
that when the parties to this case have succeeded, full benefits flowing from
the order made by the High Court should be extended to them; that even on
the earlier occasion when Perumal Swami's case was decided they were not
aggrieved and it is only when their position was sought to be altered, they
had approached the court and obtained appropriate relief and in such                      D
circumstances it would not be equitabl,e to deny them the full monetary
benefits flowing from the order of the High Court.

      We do not think that the matter is as easy and simple as put forth by
the learned counsel for the respondents. In working out the various benefits              E
arising to each one of the parties, the entire set up will have to be taken note
of and not merely the three respondents as in one establishment there cannot
be two classes of employees - those covered under the writ appeals and
others who are not so covered. Such a result would lead to invidious situation,
which should at all cost be avoided.
                                                                                          F
       It is clear that the parties themselves were not very clear as to what their
 position was and that aspect was not agitated till Perumal Swami's case was
decided. Even thereafter, it is only a few employees who sought to take the
 benefit of that order and it could not be extended to all. In such circumstances,
we think the appropriate course to be followed is to direct the Board to give             G
effect to the order made by the High Court by working out in such a way that
the notional benefits arising by way of giving effect to the order made in the
writ appeals by the High Court shall be worked out. However, the financial
benefits sball be limited to a period of three years prior to the date of the
judgment of the High Court, i.e., from the last date of the financial year prior
to the date of the order, namely, 31.3.1992. Now the monetary benefits shall              H
    450                  SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A   be actually given [though notional benefits are worked out according to the
    order of the High Court] from 1st April 1992.

          Subject to the modification as directed aforesaid, the appeals shall
    stand dismissed. No costs.

B vss.                                                     Appeals dismissed.