Decided on July 10,2013

Tikendra Singh And Others Appellant
Managing Director, Mecofed Respondents


T.Nandakumar Singh, J. - (1.) HEARD Mr. N. Khan, learned Counsel appearing for the petitioners and also Mr. N.D. Chullai, learned counsel assisted by Mr. R.B. Gurung, learned counsel appearing for respondent Nos. 3, 4, 5 and 6 and also Dr. O.D.V. Ladia, learned counsel appearing for respondent No. 1. The core question called for consideration in the present writ petition is as to whether "The Payment of Gratuity Act 1972" applies to the Society called "The Meghalaya State Co -operative Marketing & Consumer Federation Ltd., Shillong" or not? For deciding this core question in the present writ petition, it is not required to mention the facts in detail leading to the filing of the present writ petition. Only the fact sufficient for deciding the present writ petition is recapitulated.
(2.) THE Aims and Objectives of the Meghalaya State Co -operative Marketing & Consumer Federation Ltd., Shillong (for short MECOFED) are clearly mentioned in the Bye -laws of the MECOFED. It would be profitable to reproduce the relevant portions of the Aims and Objectives which read as follows: - - Objects 4. The MECOFED shall he an Apex Body and its objects are to organize, promote and develop marketing, processing, storage and sale of Agricultural. Mineral produce and produces and industrial products of the State by way of exports outside the State and Country and procure, distribute by sale of consumer goods, agricultural input Pharmaceuticals and to assist, aid, guide its affiliated member Societies in the State. In the furtherance of these objects, the MECOFED activities: - - i. To facilitate, co -ordinate and promote the marketing and trading activities of the co -operative institutions in agricultural produce and products, agricultural input, minerals products and produce, pharmaceuticals, industrial, products and consumers goods and act as an Apex body for the purpose mentioned in these Bye -laws. ii. To undertake or promote on its own or on behalf of its members Societies or the Government or Government Undertaking, Intrastate and international trade, and undertake marketing, purchase, sale and storage of agricultural produce and products. Industrial Products. Pharmaceuticals and consumers goods and to facilitate these activities to open branches, sub -branches, depots and appoint agents in any place within the country and abroad. iii. To serve as an Apex Body for marketing, and consumers in the State, procure the raw materials, consumers goods. Pharmaceuticals: etc. required by them and to act as a Central Marketing Agency for marketing of produce and products procured by the Societies as its agent, supervise and control the activities of these affiliated Societies, organize consultancy works in various fields and establish Technical and Promotional Cells undertake marketing research and dissemination of market intelligence; arrange training of employee of MECOFED and affiliated Societies in marketing, processing etc, undertake grading, packing and standardization agricultural produce and products, mineral produce and; industrial products for the benefit of Co -operative Institutions in general and for its members in particular; It is also stated in the writ petition that the Managing Director of the MECOFED is appointed directly by the Govt. of Meghalaya. The State Government has approximately 95% investment in the share capital of the MECOFED and also the MECOFED did not take any important decision without receiving prior approval of the Govt. of Meghalaya.
(3.) THE petitioners, 95 in numbers were employees of the MECOFED. It is stated that because of the heavy financial losses incurred by the MECOFED and other PSUs/PSEs, the Govt. of Meghalaya prepared the scheme, "Voluntary Retirement Scheme/Golden Handshake Scheme" for the employees of the said PSUs. The relevant portion of the said scheme Golden Handshake Scheme is quoted hereunder: GOVERNMENT OF MEGHALAYAPROGRAMME IMPLEMENTATIONDEPARTMENT CABINET MEMORANDUM (To be circulated under Rule No. 17 of the Rules of Executive Business) SUBJECT: VOLUNTARILY RETIREMENT SCHEME/GOLDEN HANDSHAKE SCHEME FOR EMPLOYEES OF STATE PUBLIC SECTOR ENTERPRISES. With the exception of the Mawmluh Cherra Cements Limited, the Meghalaya State Warehousing Corporation, the Meghalaya Co -operative Apex Bank Limited, the Meghalaya State Agricultural Marketing Board and the Meghalaya Industrial Development Corporation, all other Public Sector Enterprises and Departmental Undertakings/Boards in the State of Meghalaya are loss making and can be considered as sick PSUs/PSEs. They are in varying degrees of sickness. At the time when they were created; all of them were expected to be engines of growth in the State and to generate enough resources, which would at least help them to be self -sustaining in the long run. However, it is quite unfortunate that many of them have acted as a drain on the meager and precious resources of the State. Frankly and plainly speaking, most of the State PSUs can be said to have become white elephants, which the State Government call ill afford to keep. A number of factors are responsible for this story state of affairs. 02. In the Meghalaya Legislative Assembly debates on privatization/Disinvestment of sick Public Sector Enterprises/Undertakings during the last Budget Session (March -April 2001), while Members wanted to know the exact reasons for losses incurred by these PSUs/PSEs, the Hon'ble Minister. Programme Implementation Department, replied that one of the reasons was the uneconomic decisions taken by successive Chairmen and Vice -Chair -men of PSUs/PSEs especially in matters like employment without taking into consideration long -term repercussions of such decisions on the future economic health of the PSUs/PSEs they were heading. Most of the State PSUs/PSEs are overstaffed. Since this fact has been very clearly brought out in the proceedings of the Meghalaya Legislative Assembly, it is, therefore, high time that the employment profile of State PSUs/PSEs should be rationalized and that the surplus employees should be mopped out with a view to bringing about their much needed overall restructuring. A policy decision and action on these lines will go a long way towards partial if not full restoration of the financial health of the State PSUs/PSEs. In the present context of economic reforms, which is going on in the country, the process of downsizing of rightsizing of the State PSUs/PSEs can brook no further delay but the package of voluntary retirement benefits to be offered should appear to be fair and just if people are really to feel induced to accept the Government's offer to them. Initially, the possibility of retraining and redeployment needs also to be explored so that undue resistance to the Government's move, howsoever economically rational the Government's viewpoint may be, is minimized if not totally eliminated. 03. Keeping in view the pace of reforms that has been taking place in the Country today, the State Government would only be further compounding its own financial problems in the long run if it continues to downsizing or rightsizing of State PSUs/PSEs is concerned. Even till today many State PSus/PSEs are still heavily dependent on budgetary support from the State Government. This kind of thing has to come to an end sooner than later. It is part of the much needed fiscal reforms that all States in the Country have to implement. A firm policy decision has, therefore, to be taken at the earliest and the process has also to be initiated forthwith. This is an inescapable requirement of the reforms process underway. It is hoped that the saving that can be effected through this measure will improve the financial picture of both the State Government and that of its PSUs/PSEs. 04. In our State, some of the State PSUs/PSEs have already been more or less regular defaulters in matters of salary payments and it is well known to the employees that these PSUs/PSEs are deeply in the fed. It may be worthwhile for the State to examine the idea of voluntary retirement perhaps with the condition that all their dues would be paid in one lump sum amount within a few days of their relinquishing office, not piecemeal. If the State Government can ensure this there is high probability that the response to the scheme would be good. As far as other statutory, payments like Provident Fund gratuity, leave encashment etc. these also have to be paid within stipulated timeframe. Once the PSUs/PSEs have been downsized or right -sized, it is pretty certain that the average as well as the marginal productivity of the remaining employees will improve. The consequent reduction in the monthly salary bill will also improve to a certain extent the financial position of the PSUs/PSEs as already stated above.;

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