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After 26 years, HC grants relief to retrenched Punjab leather corporation staff

Unlike others, the petitioners were not absorbed in other departments after the state wound up the corporation

The petitioners were employees of the corporation, which had been suffering losses since inception. (File photo)

Ending a legal battle that spanned over 26 years, the Punjab and Haryana High Court on Tuesday directed the Punjab government to extend to former employees of the defunct Punjab State Leather Development Corporation the same benefits granted under its April 20, 1992 policy for absorption of surplus staff, holding that their “rightful claim cannot be denied” by a later amendment in 1995.

Justice Harpreet Singh Brar, allowing a writ petition filed in 1999 by T S Saini and others, said: “There is no doubt that at the time of retrenchment of the petitioners, policy contained in the letter dated 20.04.1992 was operative. As such, rightful claim of the petitioners cannot be denied by amending the policy… in the year 1995, as their case would be covered under the policy of the year 1992, when the decision of retrenchment was taken.”

The petitioners were employees of the corporation, which had been suffering losses since inception. On June 13, 1992, the state decided to wind it up in phases. While most employees, including juniors, were adjusted in other government departments, boards and corporations under the 1992 policy, the petitioners, though retained for winding-up work, were left out.

They sought absorption with continuity of service, pointing to a July 20, 1998 High Court ruling in Avtar Singh and others vs State of Punjab, where similarly placed employees had been granted relief. On March 9, 1999, the court had allowed them to accept Golden Handshake compensation “without prejudice” to their rights in the writ petition.

Counsel for the corporation argued that the petitioners had since reached superannuation and, having received compensation, could not now be absorbed. The state maintained that a March 13, 1995 amendment to the 1992 policy limited it to government department employees, excluding those from boards and corporations. It also contended that Avtar Singh did not apply because those petitioners were already retrenched, while the present petitioners had continued in service until opting for the Golden Handshake.

Justice Brar rejected these arguments, noting that the Coordinate Bench in Avtar Singh had already held that the unamended 1992 policy applied to those declared surplus before 1995. Quoting the earlier decision, he said:

“When other employees like the petitioners have been absorbed, there is no reason why the petitioners should have been left out.”

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He observed that “out of 209 retrenched employees, except 17, all had been adjusted” and that the 1995 policy amendment could not take away rights that had accrued under the 1992 policy.

Directions

The court directed the state to “give notional benefits of the policy… to the petitioners at par with their respective juniors” and adjust the Golden Handshake amount against these benefits. The petitioners undertook not to claim interest on delayed payment, and the state will not seek interest on the compensation already paid.

Compliance must be completed within three months of receiving the certified order.

With these directions, the petition, pending since 1999, was disposed of with no order as to costs.

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