HMT LTD. AND ANR. versus P. SUBBARAYUDU AND ORS .

Citation: [2003] SUPP. 2 S.C.R. 314 · Decided: 07-08-2003 · Supreme Court of India · Bench: K.G. BALAKRISHNAN · Disposal: Disposed off
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Judgment (excerpt)

A 
HMT LTD. AND ANR. 
v. 
P. SUBBARA YUDU AND ORS . 
. AUGUST 7, 2003 
B 
[K.G. BALAKRISHNAN AND B.N. SRIKRISHNA, JJ.] 
Service law: 
Voluntary Retirement Scheme-Settlement between Public Sector 
C Undertaking and employees on service con~itions and revision in wage~·
Revision in wages of the retiring employee for the effective period-Payment 
of arrears thereof-Improvement in the financial performances of the PSU 
vis-a-vis !iability to pay-Held: since as per settlement clause payment of 
arrears was subjeci to improvement in financia(performance, PSU was not 
D justified in refusing to make payment till losses are completely wiped out-
Since financial performance has not been improved to such extent that entire 
liability could be discharged at one go, PSU directed to make disbursement 
of arrears in 3 equal instalments in interval of one year-Directions issued-
Inierpretation of Statutes. 
E 
Practice and Procedure: 
F 
SLPs-Summary dismissal of SLPs on similar issue earlier-Relevant;y 
of-Held: Not.relevant, as they did not decide any principle/question of law-
Merely indicative of the disinclination of this Court to entertain the special 
leave petition. 
Appellant, a Public Sector Undertaking, had introduced voluntary 
retirement scheme in its establishments. A large number of its employees 
took advantage of the scheme. Later, employees and the PSU had 
negotiated for improvement in service conditions and _revision in wages 
G and arrived at a settlement. Both categories of employees, viz. those in 
service/ceased to be in service, had claimed for disbursement of arrears 
due to revision in their wages. Appellants refused to disburse the arrears 
as per clause 13 of the Settlement on the ground of having no 
improvements in their financial performance as they were continuously 
H 
incurring losses. Employees filed writ petitions in .various High Courts. 
314 
,. 
• 
HMT LTD. v. P. c;;UBBARA YUDU 
315 
The High Courts directed disbursement of the arrears. Hence, aggrieved A 
PSU filed the present appeals. It was contended for the appellants that as 
per clause 13 of the Settlement improvement in the financial performance 
of the company would be noticed on periodical review ti-en only PSU 
would be liable to pay such arrears; and that since there was no 
improvement in financial performance of the Company, there was no B 
liability. 
Disposing of the appeals, the Court 
HELD: 1.1. Clause 13 of the Settlement does not say that the 
disbursement of arrears would be made only after all acc<1mulated losses C 
are completely wiped out. It merely says that it would be done on 
periodical review of the improvement in the financial performance. 
Therefore, the appellant was not justified i11 taking the rigid stand of 
ref:Jsing to disburse any of the arrears on the ground that accumulated 
losses persisted. This was obviously an unreasonable stand and the High 
Courts were justified in exercising writ jurisdiction directing the appellant D 
to make the disbursements. However, they were not justified in directing 
full disbursement .of arrears at o~e go. [320-.C, D, E] 
1.2. No duubt there has been improvement in the fi~ancial 
performance, yet at the same tiine, the financial performance had not been 
improved to such an extent that the entire liability could be discharged at E 
one go. It would be necessary to give some more breathing time to the 
appellant to ensure that the trend of financial improvement does not get 
reversed. Hence, judgments of the High Courts are modified to the extent 
that there was some improvement in the financial performance of the 
appellant company subsequent to the settlement and its implementation; F 
that the appellant's obligation to discharge the liability towards arrears 
under Clause 13 of the settlement has partly arisen; that the appellant shall 
disburse 55% of the arrears payable during the period from 1.1.1992 to 
31.3.1995 to all eligible employees, to the extent of their eligibility, within 
a period of three months; and that the balance amount of the arrears shall 
be computed and disbursed to all eligible employees in three equal annual G 
instalments on or before 31st of March, 2005, 31st of March, 2006 and 
31st of March, 2007 respectively. [320-E-H; 321-A, BJ 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 6121-6158 
of 2003. 
H 
316 
SUPREME COURT REPORTS (2003) SUPP. 2 S.C.R. 
A 
From the Judgment and Order dated 8.4.2002/10.4.2002 and 18.4.2002 
B 
of the Andhra Pr
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