LexM.D., M/S. T. NADU MAGNESITE LTD. versus S. MANICKAM & ORS.
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A B [201 O] 3 S.C.R. 1106 M.D., M/S. T. NADU MAGNESITE LTD. v. S. MANICKAM & ORS. (Civil Appeal No. 2808 of 2010) MARCH 29, 2010 [B. SUDERSHAN REDDY AND SURINDER SINGH NIJJAR, JJ.) Service law - Re-absorption/re-transfer - Selection/ C appointment of employees by Government Company - State Government implementing a project in joint venture with K company - Government Company transferred its permanent employees to joint venture company without any monetary loss and alteration of service conditions - Subsequent closure D of JVC - Employees seeking reversion back to Government ' Company - Dismissal of writ petition - Direction by Division - Bench of High Court to Government Company to absorb the employees with continuity of service on basis of promissory estoppel - Correctness of - Held: Division Bench erred in E issuing such direction - Claim of employees not covered by · the principle of promissory/equitable estoppel - No finding recorded by Division Bench as to infringement of legal or fundamental right of employees ,_ After permanent transfer, , fresh letter of appointment was served upon the employees F - Services of employees having been terminated, their lien in Government Company also stood terminated - Hence, order of Division Bench set aside - Service Rules of the Tamil Nadu Magnesite Limited. Doctrines - Doctrine of promissory equitable estoppel - G Applicability of. H The appellant-company 'TANMAG' fully owned by the State Government, selected and appointed the respondents to various posts. The State Government 1106 M.D., M/S. T. NADU MAGNESITE LTD. v. S. 1107 MANICKAM & ORS. implemented a Project in joint venture with K Company. A The appellant transferred the respondents to the Joint Venture Company-JVC, without any monetary loss and alteration of service conditions with seniority and other benefits. After 7 years, the Government decided to close JVC. The respondents sought reversion back to the B appellant-Company but the same was rejected. Aggrieved, respondents filed writ petition. The Single Judge of High Court dismissed the same. The Division BenGh of High Court on basis of the doctrine of promissory estoppel, directed the appellant to absorb the c respondents with continuity of service and other benefits without back wages. Hence, the present appeals. Allowing the appeals, the Court HELD: 1.1. The request of the respondents to be sent on deputation was not accepted by the appellants. D By letter dated 11.5.1991, the respondents were informed that it is not possible to depute them to JVC as per Clause 2.17 of the Service Roles of the Tamil Nadu Magnesite Limited. The respondents were permanently transferred to the JVC by letter dated 20.6.1991. They were also E informed that the date of joining in service in TANMAG shall be deemed to be the date of joining at the JVC for reckoning the length of service for all purposes including the payment of gratuity. Therefore, it becomes quite evident that the appellant as well as the respondents F were well aware about the nature of terms and conditions which were protected. After the permanent transfer fresh letter of appointment dated 25.7.1991 was served upon the respondents. Therefore, it is clear that the services of the respondents having been terminated, their lien in G TANMAG, also stood terminated. (Para 16] (1115-E-H; 1116-A-C] 1.2. There was no representation made to respondent no. 1 that he would be ensured employment till the age of superannuation with the JVC. The other two H 1108 SUPREME COURT REPORTS [2010) 3 S.C.R. A respondents have also not referred to any document which would indicate that any promise of future continuous employment was held out to them by TANMAG. In fact they had been earlier categorically informed that their services were liable to be terminated B as they had become surplus. They were offered an alternative to be transferred to the JVC. Therefore, with their eyes open, the respondents had accepted the job in JVC. Their request for deputation, as provided under Clause 2.17 of the Service Rules, had been specifically c rejected. They were in danger of losing their jobs under Clause 2.14 which enables the company to terminate services of the employees by giving three months' notice or salary in lieu thereof. They, therefore, accepted the alternative of a job with JVC. A job in JVC was better than 0 r10 job at all. The Division
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