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Judgment
K.V. Eapen, Member A
This O.A has been filed by a Junior Telecom Officer (JTO) of the BSNL who had resigned from his post for joining another job. He is aggrieved by a letter issued by the 3rd respondent Chief General Manager, BSNL I.T. Project Circle (ITPC), Pune, produced at Annexure A12 through which he has been informed about some additional dues from him after his resignation. These dues, as per the letter at Annexure A12, amount to Rs. 3,51,732/-which also includes one month's salary for August 2007 of Rs. 21,254/- and have been arrived at after adjusting earned leave salary encashment and arrears' payment of the 2nd PRC. After adjusting other recoveries already taken from him, it is stated in the letter that a balance sum of Rs. 2,67,444/- is to be recovered. The impugned letter has been addressed to the 4th respondent, the Senior General Manager, IT Project Circle (ITPC), Hyderabad from the 3rd respondent, with a copy to the applicant.
The applicant was first recruited to the post of Junior Technical Officer in BSNL Kerala Circle against the vacancies of the year 2001. He submits that, as a part of the pre-training and appointment formalities, he had executed a Service Bond Agreement between himself and the 1st respondent (CMD, BSNL) agreeing to satisfy the conditions therein. As per clause 1 of the Agreement, which has been produced at Annexure A1 in the O.A, the applicant had furnished a sum of Rs. 5,000/- as interest free security for fulfilment of conditions of the agreement. Further, by clause 3, he had agreed to serve the company for a period at least five years after completion of training. As per clause 4, the applicant had also executed a bond to the extent of Rs. 85,000/- for indemnifying the company against losses or damages which the company may suffer by reason of breach of the terms of the agreement. It was also agreed in clause 6 that BSNL will have full powers to forfeit the amount of security deposit without any notice. Further, he agreed to refund to BSNL the amount of Rs. 85,000/- along with all amount paid to him as stipend during the period of his training together with training expenses incurred on him by the company, which in his case shall be Rs. 4,550/- + Dearness Allowance per month and Rs. 1,800/- per month respectively, along with interest @18% p.a along with losses/damages which BSNL may suffer by reason of the breach of the conditions of Agreement. Further it was agreed that upon the remit of such payment, the written bond would be void and of no effect, otherwise it would remain in full force.
After he signed the Service Bond Agreement, the applicant underwent 14 weeks' training at the Telecom Training Centre, Thiruvananthapuram. After completion of training he was appointed as JTO under the Principal General Manager, Thiruvananthapuram as per order of the 2nd respondent (CGM Telecom, BSNL, Kerala Circle). While working as JTO in the Thiruvananthapuram Telecom District, he volunteered for deputation as a JTO under the Information Technology Project Circle (ITPC), Pune (represented in the O.A by the 3rd and 4th respondents). He then continued his service as JTO, Thiruvananthapuram under the ITPC Pune till 2007, when he got another job offer and decided to resign. He submitted notice for resignation on 17.08.2007 to the 2nd respondent (CGM, BSNL, Kerala Circle). He indicated in the resignation letter produced at Annexure A4 that he may be permitted to get himself relieved with effect from 05.09.2007, pending receipt of formal acceptance letter by the appointing authority, in case any delay takes place in getting the same within that date. He also asked for a relieving order after acceptance of his resignation and on completion of required formalities. The applicant submits that he had thus given 20 days' prior notice before resignation, as his resignation letter was dated 17.08.2007. Further, at the time of resignation on 05.09.2007 he had completed 4 years and 4 months service in BSNL, out of the stipulated bond of service of 5 years.
It appears that after this, there was not much movement on either side, coincidentally for almost another period of 4 years and 4 months, until the 2nd respondent sent a letter addressed to the 4th respondent (produced at Annexure A5) stating that an amount of Rs. 1,47,763/- was to be recovered from the applicant for breach of conditions of bond agreement. It was also stated in the letter that one month's salary also to be recovered, since the officer had not given one month's prior notice before his resignation. The recovery of Rs. 1,47,763/- was estimated based on the bond amount, stipend, training expenses etc. + interest @ 18% p.a. In this connection, it is submitted by the applicant that there is no provision in the Service Bond Agreement which states that if the trainee failed to give one month's notice to BSNL on quitting the service prior to completion of 5 years, he would have to pay one month's salary against the same. He, therefore, submits that the said one month's salary is being recovered by the respondents over and above forfeiting the security deposit, recovery of bond amount of 85,000/-, recovery of stipend paid etc, and the 18% interest per annum. The amount of salary to be recovered was estimated by the BSNL at Rs. 21,254/- for the month of August 2007 and this was added to the 1,47,763/- already calculated for recovery from him. The applicant was therefore asked to remit a total amount of Rs. 1,69,017/- in the Annexure A6 letter by BSNL, a copy of which was marked to him. However, since there were also some payments from the respondents due to the applicant, by way of earned leave encashment (Rs.38,042/-) and arrears of 2nd PRC pay fixation (Rs.46,246/-), these were adjusted against the Rs.1,69,017/-. It was indicated that a sum of Rs. 84,729/- was to be recovered from the applicant as balance dues as per the letter produced at Annexure A9 dated 20.03.2013. This letter was issued by the 3rd respondent (CGM, IT Project Circle, Pune) to the Senior General Manager, ITPC Hyderabad (4th respondent), with copy to the applicant through his control unit.
It is submitted by the applicant that he then then remitted the amount of Rs. 84,729/- through a demand draft dated 18.04.2013 drawn on the Axis Bank, Thiruvananthapuram, in favour of of Accounts Officer (Cash), BSNL, ITPC, Pune. A copy of the demand draft has been produced at Annexure A11. It is further submitted by the applicant that, though this amount was arrived at including the monthly salary for August 2007 which he claims was an irregular and illegal recovery, he decided to pay the amount in full. However, after the due amount calculated by the respondents themselves was paid, by another letter dated 04.12.2013, produced as impugned order at Annexure A12, was issued by the CGM, ITPC, Pune, the 3rd respondent, almost 8 months after the demand draft was submitted. This letter addressed to the 4th respondent with a copy to him stated that the dues in the case of the applicant had been revised, and a sum of Rs. 3,30,478/- had to be recovered from him for breaching conditions of the bond agreement. Further to this amount, one month's salary was also to be recovered, as one month prior notice was not given, which came to a total sum of Rs.3,51,732/-, including the one month salary of Rs.21,254/-. After adjusting the dues to be paid by BSNL to him like 2nd PRC arrears and encashment of Earned Leave, the amount was reduced to Rs. 2,67,444/-. Since, he had already paid Rs.84,729/-, the balance amount of Rs. 1,82,715/- was to be paid. This was conveyed to the applicant by the impugned letter (at Annexure A15) addressed to him by the 2nd respondent (CGM BSNL, Thiruvananthapuram). In the said letter it was also stated, in response to his query to the BSNL authorities as to why he has been asked to pay this amount as he had already paid all the dues of Rs. 84,729/- (letter at Annexure A13), that it had been clarified by the Corporate Office, New Delhi that “interest payment would come into effect from the date of joining of training till the date of relieving or realization of bond money whichever is later”. This clarification letter has also been produced (at Annexure A16). The letter has been issued by the Corporate Office fo the BSNL to the Chief General Manager BSNL, Ahmedabad, with copies to all circle heads.
The applicant submits that the issuance of Annexure A12 communication letter after he had made the full remittance of amount worked out by the respondents is arbitrary and illegal. It is submitted that the Service Bond Agreement did not say anything about the period for which 18% interest will be imposed. Hence, it was natural to conclude that the interest rate would commence from the date of commencement of the service as per the Service Bond Agreement and would close on the date of relief from service, without completing the prescribed period of service. However, the new communication at Annexure A12 is based on the Corporate Office decision that the penal interest would commence from the date of joining the training till the date of relieving or realization of the bond money, whichever is later. Further the applicant submits that the respondents had intimated the details of the amount to be remitted by him to BSNL only on 20.03.2013 (vide letter at Annexure A9), whereas he had resigned much earlier on 05.09.2007. He had submitted resignation notice on 17.08.2007, 20 days prior to it taking effect from 05.09.2007. However, the first communication regarding the remittance of dues for violation of bond service agreement was received by him only on 28.01.2012 as per Annexure A6, i.e., after a lapse of 4 years and 4 months after the resignation became effective.
It is submitted that the imposition of a penal interest for a period during which the respondents did not take any action on the notice of resignation is unjust and is against the principles of natural justice. In addition he submits that inclusion of his salary amount of Rs. 21,254/- for August 2007 as dues is also arbitrary and illegal. He submits that the condition of notice pay is applicable in cases of resignation from regular service but not for resignation during the bond period of service, wherein penalties are imposed only as per the bond service agreement. Thus, the recovery of one month's salary over and above the bond agreement amount is arbitrary. Whatever be the case, he had returned Rs. 84,729/- on 18.04.2013 to the BSNL, in spite of the fact that he had not agreed with the recovery of salary for August 2007. He also points out that the payments which were due to him like the pay fixation arrears and earned leave encashment were given much after the said period without any interest, whereas interest is being charged for the period of dues from him, which is discriminatory.
The applicant has brought to notice that there had been a similar matter his, which was heard by the Madras Bench of this Tribunal. In that matter too a BSNL official had quit service before completing his 5 years as per the bond agreement. The CAT Madras Bench, in Para 12 of its order dated 2nd September 2014 in O.A No. 850/13, held that addition of the stipend paid for the 14 weeks' training expenses and interest @18% p.a along with the bond amount of Rs.85,000/- was unreasonable. The Tribunal felt it appropriate that only the bond amount of Rs. 85,000/- should be remitted by the applicant on his resignation in that O.A. A copy of the Order has been produced by the applicant at Annexure A17.
The respondents in their reply statement have at the outset sought to establish that the issue being raised in the O.A regarding enforcement of the terms and conditions of Bond executed by the applicant is basically of a civil nature and should not have come within the jurisdiction of the Tribunal. It is contended that the Tribunal had occasion to consider the said issue in a number of cases and it had held that such issues cannot be agitated before it. This position has also been upheld by the Hon'ble High Court of Kerala in OP(CAT) No. 209/2016 and connected cases. It was held therein that it was not the job of the Tribunal to substitute the contract or rewrite the contract. A copy of the judgment of the Hon'ble High Court of Kerala in OP(CAT) No. 209/2016 dated 29.08.2016 in Bharat Sanchar Nigam Limited and Ors. v Abdul Rahiman Pulikkathumbayil and Ors., has been produced at Annexure R2A. The case was disposed of by a Division Bench of the Hon'ble High Court of Kerala directing as follows in paragraphs 7 and 8:
“7. After hearing both the sides and after going through the nature of contentions raised from both the sides, the court is of the view that, it is not the job of the Court or Tribunal to substitute the terms of contract or re-write the contract. It cannot but be said that the Department has to spend huge amount so as to impart training to the candidates selected as Junior Telecom Officers, to make them properly equipped with the requisite level of understanding, skill and credentials. It was to meet the organizational requirement to this extent, that a minimum service of 'five years' was stipulated as per the Bond. Admittedly, since the party respondents/applicants have left the service of BSNL on their own, pursuant to the better offer under some other Employer, the Bond amount has to be satisfied. The liability in this regard has been upheld by the Tribunal as well, but for changing the 'rate of interest' and also the 'period' for which interest is payable.
After considering the facts and circumstances, we find it appropriate to hold that, though there is a stipulation in the 'Bond' for satisfying the due amount with interest at the rate of 18%, the finding rendered by the Tribunal that it be reduced to '9%' requires no intereference. This is for the reason that the petitioner/BSNL is a fully owned Government of India undertaking and as such, it is supposed to act as a Model Employer. Stipulation of interest at the rate of 18% cannot mean to make an unlawful gain and considering the nature of engagement as well as the nature and extent of loss resulted to the petitioner/BSNL, satisfaction of the Bond amount with interest at the rate of '9%' from the date of resignation, till satisfaction, will be appropriate and we order the same accordingly, thus modifying he verdict passed by the Tribunal in the concerned O.As.”
The Hon'ble High Court thus upheld the findings rendered by the Tribunal that the interest rate @18% should be reduced to 9%. However, it was also mentioned that this amount of 9% may be charged 'from the date of resignation till the satisfaction', modifying the verdict passed by the Tribunal.
The respondents further submit in the reply statement that the applicant had submitted his resignation letter on 17.08.2007, tendering his resignation with effect from 05.09.2007, and stating that he may be permitted to get himself relieved from that day. It is submitted by the respondents that the resignation notice period is 30 days and not 20 days as given by the applicant in his resignation letter. During the pre-recruitment formalities, the applicant had signed a declaration, produced at Annexure R2B, stating that he agreed that if he wishes to resign his employment, he shall give notice in writing 30 days in advance or in default pay the BSNL such amount as the appointing authority may fix. Thus, even if this 30 days' period is not part of the Service Bond Agreement, it is in the declaration that he has signed and given to the BSNL. If he does not give this 30 days' notice period, he has to pay one month's salary. This apart even after completing 30 days' notice period the applicant or any employee cannot simply get himself relieved from the organization, but should have waited for completing all formalities before leaving. He should have remitted the bond amount as per the agreement he executed at the time of appointment. It is only if he had remitted the bond amount that the competent authority could accept his resignation and relieve him.
It is therefore submitted that by simply dropping a letter of resignation the applicant cannot assume that he has resigned and left the organization. This is not valid till he has been formally relieved by the competent authority. This cannot be termed as double punishment but is only as per the guidelines on the subject. It is clarified that the BSNL does not bar employees from joining whatever service they like. However, the applicant should have got himself discharged from the bond obligation before joining the company. The BSNL had incurred a lot of expenses on him for pre-appointment training, selection, etc., including on stipend and allowances. The Bond is signed to cover all these losses in case the employee leaves the organization without serving at least five years. Further, the Bond has also indicated that BSNL has full powers to forfeit the amount of security deposit without any notice along with all amounts paid to him as stipend during his training, together with training expenses incurred on him, etc. Since there was no specific direction for calculating the interest bearing period of the bond initially, the same was calculated for the period from the date of joining up to the date of resignation that he had indicated. That amount had come to Rs.1,69,017/- as worked out in Annexure A6. This amount was reduced to Rs.84,729/- after deducting the amount due as leave encashment and 2nd pay revision arrears. Meanwhile, the BSNL Corporate office had given clarification dated 22.01.2013 regarding the interest bearing period for bond payment. It was clarified that the interest payment would come into effect from the date of joining of training till the date of relieving or realization of bond money whichever was later. As per this clarification recalculation of interest was necessitated and hence the revised amount was worked out which has to be remitted by the applicant.
We have heard Adv. Mr. B. Unnikrishna Kaimal, learned counsel for the applicant and Adv. Mr. T. C. Krishna, learned counsel for the respondents. We have also perused the documents and orders/judgements produced by both sides. In a rejoinder filed, the applicant submits that the orders of the Hon'ble High Court of Kerala in OP(CAT) 209/2016 (at para 7 of the judgment produced at Annexure R2A), that it is not the job of the Court or Tribunal to substitute the terms of contract or re-write the contract is not relevant in this matter. He submits that his prayer in the O.A was only to enforce the terms of bond agreement and not to re-write the agreement by adding any clause which was not in the original agreement. He submits that the challenge in the O.A referred to in the R2A judgment of the Hon'ble High Court of Kerala was against the terms of the bond agreement itself and his O.A does not falls under that category as is being contended by the respondents. He submits that he had already remitted the due amount worked out by the BSNL as per Annexure A9 communication in full settlement of all his dues in connection with his resignation. This was done on 18.04.2013 by way of a demand draft. Later, the respondents have worked out additional dues to be paid by him through their communication at Annexure A12 dated 04.12.2013. He had given various representations against this but he was informed that the fresh demand is as per the new clarification from the corporate office. Further, relating to the issue of getting himself relieved without orders on 05.09.2007, he submits that he had mentioned in the resignation letter that he should be favoured with necessary relieving order pending a formal acceptance letter from the appointing authority. In spite of this the only communication he received after he sent resignation letter dated 17.08.2007 was on 28.01.2012, that is, after a period of 4 years and 4 months after submitting the resignation letter. Since no communication had been received in the intervening period, he submits that he had taken it for granted that his request for being relieved on 05.09.2007 had been accepted by the authorities concerned and he was thus only waiting further communication for remittance of the bond amount. He had given a proper resignation notice and did not desert his job in BSNL, though, admittedly it was short of 10 days as notice period. This was because he had to join the new service; otherwise he could have lost his opportunity in the new company. As soon as the communication regarding his liabilities was received, he remitted the asked for amount on 18.04.2013. It is submitted by him that the respondents are silent about why they made inordinate delay in communicating the liability amount due from him, but are now insisting on the interest of 18% till realization of the bond money. It is also pointed out by him that, as per Annexure R2A judgment of the Hon'ble High Court of Kerala produced by the respondents, BSNL being a fully owned Government of India undertaking is supposed to act as model employer and that satisfaction of the bond amount with interest @9% from date or resignation till satisfaction will be appropriate.
We have carefully considered the above contentions and find that the respondents' position as outlined in their reply statement, has a lot of unexplained gaps and is not comprehensive. At the same time we also have to keep the Observations of the Hon'ble High Court in mind that this Tribunal cannot substitute the terms of contract/agreement. We have only to consider whether there has been some inequity caused resulting in the applicant being deprived of natural justice. Therefore, in light of the above contentions and considerations, as well as the orders of the Hon'ble High Court of Kerala relating to the rate of interest to be charged as well as taking into consideration the delay by the respondents in issuance of the notice of recovery to the applicant, we would hold that the amount paid by the applicant on 18.04.2013 by way of demand draft for Rs. 84,729/- should be taken to be in almost full compliance of his dues to the BSNL. However, we have some further directions on this which we shall outline subsequently. We are not in agreement with the applicant (as asked for in his relief array) that he is only entitled to pay back only the bond money of Rs.85,000/-. We have noted that other elements such as payment towards stipend, training expenses, etc., also form part of the Bond Service Agreement which he had signed. The respondents should have however taken steps to realise the amount of Rs.1,69,017/-, which had been worked out at Annexure A9, soon after the notice of resignation which was given by the applicant in August/September was received by them in 2007. There is no explanation given regarding the reasons why they waited uptil 2013 before taking steps to realise the amount. However, the amount of Rs.21,254/- charged as one month's salary over and above the bond amount to be paid as Rs.1,47,763/- by the BSNL is found to be justified in the case, owing to the declaration signed by him as a pre-recruitment formality produced at Annexure R2B.
Drawing from these considerations the next point is regarding the interest charged @18%. This was found by the Hon'ble High Court of Kerala as excessive in the O.P.(CAT) No.209/2016. The Hon'ble High Court returned a finding that the interest rate should be @9%. It was also found in the OP(CAT) No. 209/2016 and connected cases that the rate of interest should be from the date of resignation till satisfaction. Thus, in this case, drawing from these orders, we would confine our directions to the respondents to charge interest @9% from the date of joining of the applicant till the date they have issued the Annexure A-12 letter, wherein they had re-worked out the dues on the basis of the clarification of the Corporate Office, with a copy to the applicant. Hence the O.A is disposed of with these directions to the respondents to re-work the dues from the applicant on this basis. It may well happen as a result of working out of these dues that the applicant may not have to pay anything in addition to the amount already paid by him or even perhaps there could be requirement of some refund by the BSNL to him as he had been charged interest at the rate of 18% earlier. However, we find that only such a direction will be in consonance with the spirit of orders of the Hon'ble High Court in O.P.(CAT) No.209/2016.
The O.A is disposed of with the above directions. No order as to costs.