Calcutta High Court Slams NJMC for ‘Arbitrary Denial of Promotion,’ Orders Compliance: ‘Justice Cannot Be Withheld on Grounds of Financial Constraints’
Sanchayita Lahkar
The Calcutta High Court, in a Single Bench judgement delivered by Justice Shampa Dutt (Paul), has directed the National Jute Manufacturers Corporation Ltd. (NJMC) to grant promotions to its employees as per the provisions of the Memorandum of Settlement. The decision comes in response to three writ petitions filed by employees who alleged arbitrary denial of promotion despite being entitled to the same under existing policies. The court dismissed the employer’s plea of financial constraints, asserting that similar benefits had already been extended to a previous group of employees following an earlier High Court directive.
The petitioners in this case were employees of NJMC, engaged with the corporation since the 1980s. They contended that the promotions granted to their juniors violated the established norms and policies of NJMC. The primary argument cantered on the NJMC Service Rules & Regulations, 1982, which laid down specific guidelines for career progression and promotion. The employees, categorized into managerial, supervisory, and non-supervisory roles, were assigned different codes ranging from 1 to 15. The petitioners, working in Non-Supervisory Selection Grade (Code 12 SG(A)), asserted that they were eligible for promotion to Code 11 in the Executive Cadre based on the rules.
A significant component of the dispute stemmed from two Memoranda of Settlement—one dated May 19, 1989, and another dated September 29, 1997. These settlements were agreements between NJMC and various labour unions, outlining promotional policies and benefits to be extended to employees. The petitioners contended that while the policies mandated fair and structured career advancement, their promotions were wrongfully denied, whereas five junior employees were promoted between August 2001 and September 2002.
Further legal contention arose due to a prior judgement in WPA 19179(W) of 2003, in which the Calcutta High Court had explicitly directed NJMC to implement promotions in accordance with the settlement agreements. The court had noted instances of discrimination in promotion practices and ordered compliance with the agreed-upon terms. In that case, NJMC had eventually complied, granting promotions to 21 employees. However, the petitioners in the present matter were not included in that promotion list, leading them to file the current petitions.
The respondents, including NJMC, countered the claims by stating the introduction of a Voluntary Retirement Scheme (VRS) in 2005. They argued that many petitioners had voluntarily retired under this scheme and, as such, forfeited any claims to further employment benefits, including promotion. Additionally, NJMC asserted that its precarious financial condition made it impractical to extend further promotions.
The petitioners disputed this argument, stating that NJMC had the resources to implement the 1997 pay scales for officers and executives from April 1, 2010, proving that financial distress was not a barrier to promotions. They further contended that NJMC had, on prior occasions, promoted employees despite citing financial constraints.
Justice Shampa Dutt (Paul) examined the facts in light of previous legal precedents and the settlement agreements. The court observed that the petitioners had a legitimate claim, particularly since a prior High Court judgement had resulted in similar promotions being granted to another set of employees.
The court noted that NJMC had indeed prepared an internal note sheet, which the Assistant General Manager (Personnel) had signed, recommending the promotion of 41 employees based on seniority and entitlement. However, NJMC had selectively promoted only a few employees, leaving out the petitioners. The judgment explicitly stated:
“It appears that in spite of a note sheet placed by the Assistant General Manager (Personnel), it was not acted upon. The 21 employees who were party to the other writ application were given the benefit, but not on seniority.”
The court also dismissed NJMC’s argument that financial distress prevented the extension of promotions, citing its previous order in WPA 19179(W) of 2003, where financial hardship was considered and rejected as an acceptable justification.
On the issue of the 1997 Memorandum of Settlement, the court acknowledged that it provided for the implementation of Dearness Allowance for non-supervisory personnel if the same was applied to officers. Since NJMC had already extended such benefits to officers from April 1, 2010, the court held that there was no justification to withhold similar benefits from the petitioners.
The judgment further stated:
“The petitioners herein have not rested their case solely on the basis of the Note-Sheet as mentioned above, but have challenged the very arbitrary action of the Respondent in the matter of giving promotion.”
Justice Dutt (Paul) stated that NJMC’s actions amounted to unfair labor practice and that its refusal to promote eligible employees despite earlier High Court directives and existing settlement agreements was arbitrary and legally unsustainable.
The court ordered NJMC to grant promotions to all eligible petitioners as per the promotional policy outlined in the Memorandum of Settlement. The directive reads:
“The Respondents shall grant promotion to all the petitioners herein who qualify as per rules, in accordance with the promotional policy contained in the Memorandum of Settlement arrived at by and between the parties, within a period of 3 (three) months from the date of communication of this order.”
Additionally, the court clarified that the benefits extended to the 21 employees in WPA 19179(W) of 2003 and the officers and executives from April 1, 2010, should also be applicable to the petitioners in the present case.
Advocates Representing the Parties
For the Petitioners: Mr. N.C. Bihani, Senior Advocate, Ms. P.B. Bihani, Mr. Soumya Mukherjee
For the Union of India: Mr. Dibashis Basu, Mr. Arun Bandyopadhyay
For NJMC Ltd.: Mr. Jaydip Banerjee, Mr. Rahul Karmakar, Mr. Surya Prasad Chattopadhyay
For the Added Parties: Mr. Soumya Majumder, Senior Advocate
Case Title: Tapan Kumar Bose & Ors. vs. National Jute Manufacturers Corporation Ltd. & Ors.
Case Numbers: WPA 28921 of 2008, WPA 8178 of 2009, WPA 1944 of 2011
Bench: Justice Shampa Dutt (Paul)
[Read/Download order]
