- (1.) DELAY condoned in S.L.P.(C)..CC No. 6523 of 2009.
(2.) LEAVE granted in the above special leave petitions.
(3.) WHETHER the retiral benefits payable to the Respondents in terms of the option exercised by them under Section 12A(4)(a) and (b) read with Section 12A(4C) of the Food Corporation of India Act, 1964 (for short "the Act") as inserted and amended by Act Nos. 57/1968 and 12/1977 could be revised and reduced by the Appellants pursuant to the audit objection raised after 4 to 7 years of the grant of such benefits is the question which arises for determination in these appeals preferred by the Union of India and Anr. against the orders passed by the learned Single Judge and the Division Bench of Kerala High Court. The Food Corporation of India (for short "the Corporation") was established under Section 3 of the Act. The services of the private Respondents, who were then working under the Ministry of Food, Government of India were placed at the disposal of the Corporation. Section 12A was inserted in the Act by Amending Act No. 57/1968 to facilitate transfer of the Government employees to the Corporation. Simultaneously, an opportunity was given to every transferred employee to opt for the scale of pay applicable to the post held by him under the Government immediately before the date of transfer or the scale of pay applicable to the post under the Corporation to which he is transferred as also leave, provident fund, retirement or other terminal benefits admissible to the employees of the Central Government in accordance with the rules and orders of the Central Government, as amended from time to time, or the leave, provident fund or other terminal benefits admissible to the employees of the Corporation. For the sake of convenient reference, Section 12A(1), (2), (4) and (4C) are reproduced below: 12A. Special provisions for transfer of Government employees to the Corporation in certain cases. - -(1) Where the Central Government has ceased or ceases to perform any functions which under Section 13 are functions of the Corporation, it shall be lawful for the Central Government to transfer, by order and with effect from such date or dates (which may be either retrospective to any date not earlier than the 1st January, 1965, or prospective) as may be specified in the order, to the corporation any of the officers or employees serving in the Department of the Central Government dealing with food or any of its subordinate or attached offices and engaged in the performance of those functions: Provided that no order under this Sub -section shall be made in relation to any officer or employee in such Department or office who has, in respect of the proposal of the Central Government to transfer such officer or employee to the Corporation, intimated within such time as may be specified in this behalf by that Government, his intention of not becoming an employee of the Corporation. (2) In making an order under Sub -section (1), the Central Government shall, as far as may be, take into consideration the functions which the Central Government has ceased or ceases to perform and the areas in which such functions have been or are performed. (4) Every officer or other employee transferred by an order made under Sub -section (1) shall, within six months from the date of transfer, exercise his option in writing to be governed, - - (a) by the scale of pay applicable to the post held by him under the Government immediately before the date of transfer or by the scale of pay applicable to the post under the Corporation to which he is transferred, (b) by the leave, provident fund, retirement or other terminal benefits admissible to employees of the Central Government as amended from time to time or the leave, provident fund or other terminal benefits admissible to the employees of the Corporation under the regulations made by the Corporation under this act, and such option once exercised shall be final: Provided that the option exercised under Clause (a) shall be applicable only in respect of the post to which such officer or employee is transferred to the Corporation and on appointment to a higher post under the Corporation, he shall be eligible only for the scale of pay applicable to such higher post: Provided further that if immediately before the date of his transfer any such officer or employee is officiating in a higher post under the Government either in a leave vacancy or in any other vacancy of a specified duration, his pay, on transfer, shall be protected for the unexpired period of such vacancy and thereafter he shall be entitled to the scale of pay applicable to the post Under the Government to which he would have reverted or to the scale of pay applicable to the post under the Corporation to which he is transferred, whichever he may opt: Provided also that when an officer or other employee serving in the Department of the Ministry of the Central Government dealing with food or in any of its attached or subordinate offices is promoted to officiate in a higher post in the Department or office subsequent to the transfer to the Corporation or any other officer or employee senior to him in that Department or office before such transfer, the officer or other employee who is promoted to officiate in such higher post shall, on transfer to the Corporation, be entitled only to the scale of pay applicable to the post he would have held but for such promotion or the scale of pay applicable to the post under the Corporation to which he is transferred, whichever he may opt. (4C) Where an officer or other employee has exercised an option under Sub -section (4), or exercise, or is deemed to have exercised, an option under that sub -section, read with Sub -section (4A) or Sub -section (4B), to be governed by the leave, provident fund, retirement or other terminal benefits admissible to the employees of the Central Government, such benefits shall be calculated on the basis of the pay and allowances drawn by him in the Corporation. ;