Transfer of Employees to FCI: Supreme Court Judgement

A significant legal case has been resolved by the Supreme Court regarding the transfer of employees to FCI. The case involved a dispute over the extension of benefits to certain employees taken over by FCI from the Vacuvator Division of KPT. The Supreme Court’s judgement has far-reaching implications for employee rights and entitlements, setting a precedent for similar cases in the future.


  • An industrial dispute was raised regarding the extension of option to select revised pay scales to 15 workmen of the Vacuvator Division of KPT who were taken over by FCI.
  • The Central Government transferred 15 employees to FCI with effect from 01.01.1973.
  • The Industrial Tribunal directed all employees of the Vacuvator Division to be entitled to exercise the option under Section 12A (4) of the FCI Act.
  • Appellant-Union filed Special Civil Application questioning the transfer granted to only 15 employees and not the remaining 306 employees.
  • The employees were supposed to be governed by FCI CPF Regulations after transfer.
  • The Appellant argued that all employees were similarly situated and limiting the benefit to 15 employees caused discrimination.
  • The Division Bench of the High Court held in favor of the Appellant, ordering all 321 employees to be treated as transferred to FCI from 01.01.1973.
  • Employees were made eligible for pay as per FCI’s pay scale from 01.01.1973.
  • The work charge employees who were taken over as regular employees from 01.01.1973 would be bound by FCI (Staff) Regulations, 1971.
  • The Division Bench of the High Court directed the FCI to pay gratuity to employees who provide details of their joining dates in KPT.
  • The work charge employees were switched over to the CPF scheme, which was deemed arbitrary by the Tribunal.
  • The Tribunal held that the transfer must be governed by Section 12A of the FCI Act.
  • The members of the staff were found to be entitled to pensionary benefits under the GRP scheme.
  • The Industrial Tribunal’s award was interpreted to cover all 321 employees.
  • The Division Bench directed that all 321 employees were to be deemed transferred to the FCI under Section 12A of the FCI Act from 01.01.1973.
  • The transfer of employees working in the Vacuvator Division of KPT was to be done by the Central Government according to the High Court’s decision.
  • Only permanent employees of KPT were granted the transfer benefits from 01.01.1973.
  • Work charge employees were taken over as regular employees from 01.01.1973 with benefits like leave, probation, and disciplinary actions as per FCI Regulations.
  • The work charge employees, as per an agreement, were taken over by FCI from KPT.
  • The High Court Division Bench highlighted delays in the Appellant-Union’s filing for relief, noting the Special Civil Application was filed in 1996 for claims dating back to 1973.
  • The work charge employees had signed conditions with KPT that they would not claim pension or gratuity like Central Government employees.
  • An Office Order from 1973 stated that FCI employees taken over shall be governed by FCI CPF Regulations.
  • The Division Bench disagreed with the Single Judge’s decision to extend benefits to all employees taken over by FCI and stated that only 15 regular KPT employees were to receive the benefits.
  • A learned Single Judge’s decision allowed extending benefits to all employees taken over by FCI on 01.01.1973, following a unilateral shift from GPF to CPF faulted by the Tribunal.
  • The Tribunal held pensionary and CPF liabilities for staff taken over by FCI would start from 01.03.1965, considering their service as continuous from that date.

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  • Mr. Goel relied on the award of the Industrial Tribunal dated 05.08.1991 which favored the work charge employees regarding regularization of CPF/ GRF subscription and contribution from 1965 to 1973.
  • The cause of action for filing the Special Civil Application for the work charge employees arose after the order dated 09.05.1996 by the Government of India, which limited the benefit of the Tribunal’s award to only 15 employees.
  • Although demand No.1 was for the 15 workmen, demand No.2 also related to work charge employees and was allowed by the Industrial Tribunal.
  • Mr. Goel argued that Section 12A of the FCI Act applies to the work charge employees based on the Tribunal’s award.
  • He referred to the Agreement dated 08.04.1965 stating that the Government would take over the staff engaged by the KPT upon conclusion of the Agreement.
  • Work charge employees appointed in FCI from 01.01.1973 were governed by FCI Regulations.
  • No grievance was raised by work charge employees until 1996 when regular employees received a benefit.
  • Dispute is about whether work charge employees are entitled to benefits granted to 15 regular employees.
  • Office Order of FCI in 1973 distinguished between regular and work charge employees.
  • Argument that work charge employees should not be discriminated in benefits granted to regular employees.
  • The Single Judge’s decision to allow the Writ Petition was supported by Mr. Goel.
  • Mr. Goel critiqued the Division Bench’s judgement for relying on the Industrial Tribunal award limited to 15 employees.

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  • The order dated 09.05.1996 granted transfer relief to 15 employees to FCI.
  • Findings by the Industrial Tribunal regarding the change of GPF to CPF are specific to work charge employees.
  • Office Order dated 18.09.1973 employed all Vacuvator Division employees to FCI.
  • Regular employees and work charge employees were treated differently in terms of benefits.
  • Operative part of the award only pertains to the relief claimed by the 15 workmen.
  • Regularization of CPF/GRP subscription was related to the workmen switched from KPT to FCI.
  • The tribunal’s relief was restricted to the 15 regular employees of Vacuvator Division.
  • The distinction between regular and work charge employees is crucial in this case.
  • The Division Bench judged that the Industrial Tribunal’s award did not address question No.2 in the reference.
  • However, the court disagrees with this judgement and states that the relief claimed by the Appellants is not justified.
  • The reasons for denying the relief are based on the court’s analysis and interpretation of the case.

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  • The Appeals were dismissed by the court.
  • The decision was made based on the relevant provisions of the RPC.
  • The reasons for the dismissal were explained in detail.
  • The court found that the Appeals did not have merit.


Case Number: C.A. No.-009217-009218 / 2019

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