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Judgment
M.M. Singh Bedi, J.—The petitioners are working as Senior Accounts Officers or Accounts Officers with Uttar Haryana Bijli Vitran Nigam
Limited which is a Company registered under the Companies Act, 1956. The members of the Board of Directors of said Company are appointed
by the Government of Haryana and Government has got pervasive control making the said Company a State within the meaning of Article 12 of
the Constitution of India. Through the instant writ petition, the petitioners seek a writ in the nature of certiorari quashing order Annexure P8 dated
2.12.2012 passed by the State of Haryana rejecting the proposal of the Standing Committee on Public Enterprises being without jurisdiction. The
petitioners further seek a direction to the Board of Directors, the competent authority to revise the pay scales and issue directions to implement the
decision taken by the Board of Directors dated 27.11.2009 circulated vide letter dated 4.12.2009 Annexure P4 and for all consequential benefits
admissible to the petitioners as per the decision of the competent authority i.e., the Board of Directors.
Briefly stated, the facts of the case of the petitioners are that the Board of Directors had constituted a Coordination Committee of all the
Managing Directors of Haryana Power Corporations for considering the proposal of pay revision of its employees in which following directions
were issued on the representation of the employees:--
The recommendations of the Committee were put up before the Board of Directors. The Board of Directors had taken a conscious decision
after considering various guiding factors. The agenda Annexure P3 was considered by the Board of Directors in its meeting dated 27.11.2009 and
it was approved. A copy of the decision of the Board of Directors dated 27.11.2009 circulated vide letter dated 4.12.2009 is Annexure P4. The
relevant portion of Annexure P4 reads as follow:--
Following are the extracts of Minutes of Meeting of the Board of Directors held on 27.11.2009 on the above cited subject:
The proposal as contained in the memorandum was considered and approved by the Board of Directors. It was decided that the benefits to be
given shall be from prospective as has been decided in DHBVN.
As per the Articles of Association the Board of Directors was a competent authority to revise the pay scales of its employees and once the
Board of Directors has taken a conscious decision, it was required to be implemented but instead it was sent to the Government and Bureau of
Public Enterprises but the Government vide letter dated 14.12.2010, has sent the case back to the Company with an advise to consider the
financial position of the power companies. A copy of the letter has been appended as Annexure P5. The Managing Director, justified the decision
taken by the Board of Directors in its meeting held on 27.11.2009 and resubmitted the case vide Annexure P6, and the Government vide letter
dated 2.5.2011 directed the Company to send the proposal again. The Company sent proposal vide letter dated 16.5.2011 Annexure P7, but the
Government vide letter dated 2.12.2012, Annexure P8 declined the said proposal.
The order Annexure P8 has been challenged on the ground that as per the Articles of Association it is the Board of Directors which is a
competent authority to revise the pay scales of its employees and that the order Annexure P8 is without jurisdiction and is liable to be ignored. On
earlier occasions many decisions taken by the Board of Directors which is the competent authority regarding the revision of pay scales were
implemented without the approval of the Government/Bureau of Public Enterprises.
Respondent Nos. 1to 4 filed written statement admitting that Uttar Haryana Bijli Vitran Nigam Limited is a Company registered under the
Companies Act, 1956 and that the Board of Directors of said company are appointed by the Government of Haryana. The claim of the petitioners
has been contested on the ground that the approval of the recommendations of the Coordination Committee by the Board of Directors is further
subject to approval of the State Government in Haryana Bureau of Public Enterprises as per notification dated 20.10.1989 of Finance
Department, Corrigendum dated 18.9.1990, letters dated 15.12.2000 and 22.8.2005. Copies of the said notifications have been placed on record
as Annexures R1 to R4. It is claimed that the matter is placed before the Board of Directors for the consideration and approval of the
Coordination Committee of the Managing Directors subject to the approval of the State Government in Haryana Bureau of Public Enterprises. The
decision in the meeting dated 27.11.2009 was subject to approval of the State Government in Haryana Bureau of Public Enterprises. It has been
submitted that the Finance Department has constituted a Standing Committee. A strong reliance has been placed on letter dated 22.8.2005
Annexure R-IV issued by the Haryana Bureau of Public Enterprises to the Managing Directors/Chief Administrators, Finance Department adopted
by the Nigam vide memo dated 15.9.2005 Annexure R-V wherein the procedure for sending the proposals to the Haryana Bureau of Public
Enterprises for placing before the Standing Committee of Public Enterprises was emphasised which is as follows:--
The procedure for sending proposals to the HBPE for placing before the Standing Committee on Public Enterprises was detailed in the
instructions issued by this office letter of even No. dated 15.12.2000. The matter has been reconsidered and in order to avoid repetition and
streamline the process, it has been decided that henceforth the procedure for sending proposals by State Public Enterprises for consideration of the
Standing Committee on Public Enterprises will be as under:--
(i) The concerned State Public Enterprises should get its proposal pertaining to creation/upgradation of posts, revision of pay scales etc. approved
from its Board of Directors. Subsequently, the Administrative Department should take approval of the competent authority as per the Standing
Order of the Department. In case the Chief Minister is the Minister-In-Charge of a Department, approval of the Administrative Secretary may only
be taken. Thereafter, such proposals should be forwarded for the approval of the Standing Committee.
(ii) The Member Secretary, Haryana Bureau of Public Enterprises will directly put up the decision(s) of the Standing Committee for approval of the
Chief Minister. HBPE will thereafter convey the decision to the concerned quarters for implementation.
These instructions will supersede the earlier instructions issued vide letter of even No. dated 15.12.2000.
The claim of the respondents is that after adopting the above said procedure the proposal was sent to Haryana Bureau of Public Enterprises but
the same was declined for the reasons that no time scales are allowed for the post of Accounts Officer in the said Company as well as Public
Enterprises. The pay scale of Accounts Officers in Nigam is Rs. 15600-39100 (PB-3) + 5900 Grade pay which is already higher than the
Accounts Officers of the State Government i.e., Rs. 9300-34800 (PB-2) + 5400 Grade pay and even more than Assistant Engineers of the
Nigam. It was advised to consider the financial position of power companies before sending any proposal vide memo Annexure P5 dated
14.12.2010. In the written statement, it has been averred that the Financial Commissioner and Principal Secretary to Government of Haryana vide
memo dated 25.1.2011 Annexure P6 was requested that the position explained in Annexure P6 should be sent to the Haryana Bureau of Public
Enterprises for consideration of the case by the Standing Committee as the Company made recommendations not merely on the ground of parity
of pay scales with the technical cadre posts but there were several other guiding factors which were considered and found in favour of the posts of
Senior Accounts Officers. The Financial Commissioner and Principal Secretary to Government of Haryana, Power Department vide letter dated
2.5.2011 advised the Nigam to send the proposals regarding grant of pay scales of Rs. 37400-67000 (PB-4) + Grade pay of Rs. 8800/- for the
post of Senior Accounts Officer in Uttar Haryana Bijle Vitran Nigam Limited in form of agenda notes for consideration of the Government. The
Standing Committee of Public Enterprises held a meeting on 6.9.2011 and declined the same as it was found to be without any justification.
Mr. R.K. Malik, learned senior counsel for the petitioners has contended that as per Section 291 of the Companies Act, 1956, the Board of
Directors have to exercise the powers as per the Articles of Association. The Board of Directors have got powers to fix salaries, emoluments and
remuneration of the employees. Learned counsel has placed reliance on the judgment in case Deva Singh, Law Officer, Haryana Financial
Corporation v. The State of Haryana, CWP No. 5993 of 1990 decided on 26.11.2010 and Surjit Singh Ahuja Manager and others v. Haryana
State Industrial Development Corporation Ltd., CWP No. 5271 of 1986 decided on 26.7.1991. In case of Deva Singh (supra), the Haryana
Financial Corporation had taken a decision to grant pay scales to the Assistant District Attorneys at par with that of Assistant District Attorneys in
Haryana Government, taking into consideration the qualifications, duties and responsibilities of the Law Officers serving in the Corporation and the
Assistant District Attorneys in Haryana Government and subsequent revision of the pay scales by the Haryana Government. The Board of
Directors approved the revision of pay scales of Legal Assistants and Law Officers at par with the revised pay scales fixed by the Government of
Haryana. The decision of the Board was communicated to the Government for necessary approval but the State government rejected the
recommendations submitted by the Haryana Financial Corporation. Taking into consideration the decision of the Board of Directors and the
provisions of Financial Corporation Act, 1951, it was held that the Corporation was the sole authority to take decision regarding the revision of
pay of its employees. In the guise of instructions with regard to the policy decision the State could not issue instructions with regard to the pay
scales of the employees and the revision of pay scales of the employees of the Corporation. The Corporation was respondent No. 3 whereas the
State was respondent No. 1. Taking into consideration the power of the Board regarding revision of pay scales of its employees following order
was passed:--
""It is held that the 3rd respondent is the sole authority to take a decision as to the revision of pay of its employees. In the guise of an instruction
with respect to the policy decision, the 1st respondent cannot issue an instruction with respect to the pay scales of the employees or the revision of
pay scales of the employees of 3rd respondent-Corporation. The instructions, issued by the 1st respondent in the above facts and circumstances of
this case would not bind the 3rd respondent-Corporation. The 3rd respondent has virtually surrendered its powers with respect to the revision of
pay scales of its employees to the State Government which has no say in the matter. As the State Government has no authority to interfere with the
revision of pay scales of the employees of the 3rd respondent-Corporation, the impugned order passed by -the 2nd respondent has no legal
sanctity. Therefore, the impugned order passed by the 2nd respondent is liable to be quashed.
Accordingly, the impugned orders passed by the 2nd respondent and communicated by the 3rd respondent stand quashed. As his Board has
already taken a decision to revise the pay scales of the petitioners, it shall implement its decision within a period of two months from the date of
receipt of a copy of this order.
The writ petition is ordered accordingly. There is no order as to costs.
Similarly in CWP No. 5271 of 1986, a decision taken by Haryana State Industrial Development Corporation Ltd., to revise the pay scales of its
Junior Engineers and Sub Divisional Engineers at par with that of Haryana Government and taking into consideration the Articles of Association of
the Corporation, it was held that the Corporation was entitled to implement the resolution regarding the grant of pay scales to the
Manager/Assistant Managers without waiting for the decision of the State Government as the same was not required in view of the articles of
Association which provide that in case the Governments views were not received within a period of two months the Directors shall be entitled to
act in accordance with the proposal or decision without further reference to the Government.
In the present case as per Article 43 of the Articles of Association the Board of Directors is competent to revise the pay scales of its
employees.
Clause 43 of the Articles of Association reads as follow:--
Power of Directors
Without prejudice to the general powers conferred by the last preceding Article and so as not in any way to limit or restrict those powers, and
without prejudice to the other subject to the restrictions contained in the last preceding Articles, it is hereby declared that the Directors shall have
the following powers, that is to say, power:--
To appoint, and at their discretion remove or suspend such General Managers, manager, Secretaries, Assistants, Supervisors, Scientists,
Technicians, Engineers, Consultants, Legal, Medical or Economic Advisers, Research Workers, Labourers, Clerks, agents and Servants for
payment, temporary or special services as they may from time to time think fit, and to determine their powers and duties and fix their salaries, or
emoluments or remuneration''s and to acquire security in such instances and to such amounts as they may think fit.
The Board of Directors in view of above said article is competent to fix the salaries or emoluments or remuneration of its employees. Following
the judgment in cases of Deva Singh (supra) and Surjit Singh (supra), I am of the considered opinion that the Board of Directors can take decision
for grant of higher pay scales to the petitioners as mentioned in Annexure P8. It is also not out of place to observe here that pay scales had earlier
been enhanced by the Board of Directors without the approval of Haryana Bureau of Public Enterprises in the case of other employees which is
apparent from the following instances:-
(i) UHBVNL enhanced the pay scale of Rs. 5000-8000 to Rs. 5450-8000 vide order No. 7/Finance Dated 20.2.2004, without seeking approval
of the HBPE.
(ii) UHBVNL revised the ACP pay scales of its employees for all the categories vide office Order No. 8/Finance Dated 20.2.2004. These ACP
pay scales were higher than that of the State Govt. employees. The approval of HBPE was not sought.
(iii) The UHBVNL revised the pay scale for the post of Private Secretary in UHBVN and circulated vide O/O No. 74/Finance/UH-111 dated
18.3.2008 without the approval of the HBPE.
(iv) Erstwhile HSEB was granting local outdoor duty allowance/transport allowance to its employees @ Rs. 150/- and Rs. 400/-. After formation
of UHBVNL the rate has been enhanced/doubled vide office order No. 22/Finance Dated 6.7.2006. No approval of HBPE was sought. The
information was also supplied under the RTI Act that no approval of HBPE was taken before granting the said benefit.
(v) UHBVNL granted Time Scale to the post of Company Secretary vide office Order No. 178/UH/GA-382 dated 16.6.2005 without seeking
approval of the HBPE and the said decision has already been implemented since June 2005.
(vi) UHBVNL has granted time scale to the post of System Analyst vide order No. 11/FA/Hq/F&B/UH dated 9.4.2013. No time scale for the
post of System Analyst is there in the State Govt. No approval of HBPE was sought for granting time scale for the post of System Analyst in
UHBVNL.
(vii) HPGCL issued orders for grant of entry level pay to the Engineers in spite of the rejection of the proposal by the HBPE.
In view of above said circumstances, present writ petition is allowed and the order Annexure P8 dated 2.12.2012 declining the proposal of the
Board of Directors by the Standing Committee of Bureau of Public Enterprises communicated through the Superintendent Power for Financial
Commissioner and Principal Secretary to the Government of Haryana, Power Department, is hereby set aside. It will be open to the petitioners to
seek implementation of the order of the Board of Directors and consequential reliefs in accordance with law as the financial burden is to be borne
by none else but the Corporation itself. It is left open to the Board of Directors to implement its decision with effect from any date decided by the
Board.