Sonamuthu Vellammal vs Chief General Manager And Others

Samapti Chatterjee, J

The appellants have assailed the present appeal against the judgment and order dated 6th February, 2019 passed in W.P.

No.037/2016. The appellants filed the said writ petition praying interalia the following reliefs:-

“A. A writ in the nature of mandamus commanding the respondent authorities to release the benefits and or difference of salary and other

allowances in terms of the recommendation of the Sixth Central Pay Commission forthwith and without any delay and to release the same w.e.f

01.01.1996 i.e. on which the Sixth Central Pay Commission has come into force.

B. A writ in the nature of mandamus directing the respondent authorities to release interim relief in favour of the writ petitioners’ pending final

disposal of the instant writ application.

C. A writ in the nature of mandamus directing the respondent authorities to contribute towards the Employees Provident Fund of the petitioners being

the contribution of the employers part for the period from 01.01.2006 till the date of the retirement of the writ petitioners or to release the same in

favour of the writ petitioners.

D. Any other order and or orders as this Hon’ble Court may deem fit and proper.â€​

The petitioners’ case in a nutshell is as follows:-

Petitioners No.1 to 14 are retired employees of Andaman and Nicobar Islands Forest and Plantation Development Corporation and after retirement

have been residing in different part of these Islands.

That the respondents No.1 to 7 are “State†within the meaning and ambit of Article 12 of the Constitution of India and as such amenable to the

writ jurisdiction before this Hon’ble Court That A & N Islands Forest & Plantation Development Corporation Ltd., is a Govt. of India undertaking

and was recognized as ""Mini Ratnaâ€​ having regard, to its activities and the commercial orientation of the organization.

That during the year 1984 a dispute rose cropped up as regards, the determination of salary and other allowances of the employees of the Corporation.

The case of the employees was that since, the Corporation is a Central Govt. undertaking therefore, the salary and allowances of the employees of

the corportion should be at par with that of the Central Govt. Employees. The case of the employees was that the recommendation of the Central Pay

Commission as applicable to the Central Govt. Employees should be made applicable to the employees of the Corporation.

That during the year 1983 an office memorandum was issued by the Govt. of India, Ministry of Finance whereby an interim relief was granted

pending acceptance of the demand of the employees of public sector organizations.

Mr. Binnu Kumar learned Advocate appearing for the petitioners stoutly contended that the petitioners are entitled to enjoy the said benefit as per the

Hon’ble Apex Court order therefore, Mr. Binnu Kumar strongly submitted that the Court should quash the impugned order thereby allowing the

writ petition.

Per contra, Mr. Tulsi Lall, learned Advocate appearing for the respondents vehemently contended that the corporation is running in lose since 2001.

After the Supreme Court orders dated 10th October, 2001 and 7th May, 2002 in IA No.502 WP ( C ) No.202/1995 through which timber harvesting

by Corporation has been stopped, thereby leading to reduction of revenue by 75%. As a result thereof the salary and wages of the employees and

workers are being paid by interest bearing loans received from Government of India/ A & N Administration. In this upshot the Corporation is in

financial difficulty to even pay the present salary and wages to the employees and workers.

It was further contended by Mr. Lall that on 31st March, 2016 a sum of rupees 315.41 crores (Rs. 162.83 crores loan + Rs. 152.58 crores

interest) has been provided to the ANIFPDCL in the form of interest bearing loan to pay salary and wages to the employees and workers.

It is also strongly submitted by Mr. Lall that the Government of India, Department of Public Enterprises had issued extensive guidelines on the pay

revision of employees/workers of Public Sector Undertaking vide OM No.2(7)/2005-DPE-(WC)GL-III dated 26th February, 2008 wherein inter alia

the Department of Public Enterprises had clarified that the merger of 50% DA and revision of scale of pay shall be allowed to the employees of those

CPSEs which are not loss making and are in a position to absorb additional expenditure without any budgetary support from the Government of India.

It was also clarified that no budgetary support for wages increase shall be provided by the Government under any circumstances as the ANIFPDCL

is a loan making CPSE since 2001, its employees drawing IDA pattern of pay scale were not entitled for the benefit of pay revision.

It is further strongly argued by Mr. Lall that the Department of Public Enterprises vide OM No.F2(54)/2008-DPE(WC)-GL-II/08 dated 14th October,

2008 has also inter alia reiterated that on the recommendations of the High Power Pay Committee and Supreme Court judgment dated 3rd May, 1990

in CMP No.10864/1989, DPE had issued OM No.2(43)/90-DPE(WC) dated 12th June, 1990 implementing the Central Government pay scale to the

employees of the CPSEs following CDA in 69 CPSEs as indicated in Annexure-IV of the OM dated 12th June, 1990. The DPE vide OM dated 24th

October, 1997 further revised pay and allowances of said CPSEs following CDA pattern. Consequent to the issue of notification dated 29th August,

2008 by the Department of expenditure, Ministry of Finance on the revision of pay scale of the Central Government employees with effect from 1st

January, 2006. The pay scale in respect of public sector employees following CDA pattern of pay in 69 public sector enterprises would also be revised

with effect from 1st January, 2006 as per the judgment of Hon’ble Supreme Court on recommendation of HPPC dated 3rd May, 1990.

Therefore, it is submitted that the benefit of pay revision may be allowed only to the employees of those CPSEs which are not loss making and are in

a position to absorb the additional expenditure on account of the pay revision from their own resources without any budgetary support from the

Government. As the ANIFPDCL is a loss making CPSE since 2001 therefore, as per above referred M.O they are not entitled to enjoy that benefit.

Furthermore, its employees are drawing CDA pattern of pay scale therefore they are not under the purview to enjoy that benefit of pay revision.

Accordingly it is explained by Mr. Lall that guidelines issued by the department of public enterprises New Delhi, clearly stipulates that the benefit of

pay revision etc shall be allowed to the employees of those CPSEs those are not loss making and are in a position to control the additional expenditure

without any budgetary support of the Government of India.

It is also vehemently submitted by Mr. Lall that closure/revival proposal received from ANIFPDCL has been examined in the Ministry in the series of

the meeting held at various levels and still is under consideration. As such the subject writ petition is a premature one therefore liable to be set-aside.

Consequent to OM dated 01.03.2004 of Dept. of Expenditure, Ministry of Finance on Merger of 50% of Dearness Allowance/Dearness Relief with

basic pay to the Central Government employees with effect from 01.04.2004 the Government of India, Ministry of Heavy Industries, Department of

Public Enterprises issued by following directions on wage policies & related matters vide OM No.2(42)/97-DPE(WC) dated 07.04.2005 and OM

No.2(6)/2004-DPE(WC)-GL-VI dated 24th May, 2005 With effect from 01.04.2004, portion of DA equal to 50% of the existing basic pay in respect

of employees in CPSEs following CDA pattern of pay scales shall be merged with the basic pay of the employees and shown distinctly as Dearness

Pay (DP) which would be counted for purposes like payment of allowances, transfer grant, retirement benefits, contribution to GPF/CPF, License

Fee, various advances etc.

(1) The merger of DA equal to 50% of the existing basic pay as mentioned above shall be allowed to employees of those CPSEs that are not loss

making and are in a position to absorb the additional expenditure on account of merger of DA with basic pay from their own resources of the CPSEs

without any budgetary support from the Government and also to employees in the CDA pattern pay scales.

(2) The entitlement for LTC, TA/DA while on tour and transfer and accommodation shall, however, continue to be governed on the basic pay alone

without taking into account DP.

(3) Portion of DA converted into DP as above would be deducted from the existing rate of DA while computing quantum of DA.

It is also contended by Mr. Lall that the Department of public enterprises issued instructions vide OM No.2(7)/2006-DPE(WC)-GL-XIV dated 9th

November, 2006 on the pay revisions/HPPC Recommendations in the matter of wage/pay negotiation and finalization will be subject of the following

conditions:-

(1). The managements of the CPSEs would be free to negotiable the wage structure, for the unionized workmen keeping in view and consistent with

the generation of the resources/profits by the concerned enterprises.

(2) No budgetary support for the wage increase shall be provided by the Government under any circumstances. The resources for meeting the

increased obligation for implementation of wage revision must be internally generated and must come from improved performance in terms of

productivity and profitability and not from Government subvention.

(3) The validity period of wage settlement would be for ten years with 100% DA neutralization w.e.f 1.1.2007. The revision shall be subject to the

condition that there shall be no increase in labour cost per physical an unit of output. There may be rare exceptions, where unit would already be

working at optimum capacity considering industry-wide norms. In such cases the administrative Department may consult this Department.

(4) In case of sick/incipient sick CPSEs referred to Board for Reconstruction of Public Sector Enterprises (BRPSE), the wage revision would be

considered on the basis of final decision on the recommendations of BRPSE.

(5) The CPSEs may implement the negotiated wages after confirming to their administrative Ministry and the Department of Public Enterprises that

the revisions are within this approved parameter, and that it has been ensured that such negotiated wages would not come in conflict with the pay

revision of officers and non-unionized supervisors of the respective CPSEs.

Before parting with his argument Mr. Lall strongly submitted that petitioners are not entitled to get the benefit of salary and other allowances in terms

of the recommendation of 6th Central Pay Commission with effect from 1.1.1996 as they prayed for. It is further submitted by Mr. Lall that there is

no infirmity or ambiguities in the impugned order which deserve interference by the Hon’ble Appeal Court therefore the Court should dismiss the

appeal.

Considering the submissions advanced by the learned Advocates and after perusing the record we find that the Government of India Department of

public sector enterprises had issued an extensive guideline on pay revision of employees /workers public sector undertakings vide OM No.2(7)/2005-

DPE-(WC)GL-III dated 26th February, 2008 wherein inter alia the Department of Public Enterprises had clarified that the merger of 50% DA and

revision of scale of pay shall be allowed to the employees of those CPSEs which are not loss making and are in a position to handle additional

expenditure without any budgetary support from the Government of India.

It was also clarified that no budgetary support for wage increases shall be provided by the Government under any circumstances as the ANIFPDCL

is a loss making CPSE since 2001, its employees drawing IDA pattern of pay scale therefore they are not entitled to enjoy the said benefit of pay

revision.

It is also not out of place to mention that Department of Public Enterprises vide OM No.F2(54)/2008-DPE(WC)-GL-II/08 dated t1h4 October, 2008

has also inter alia reiterated that on the recommendations of the High Power Pay Committee and Hon’ble Supreme Court judgment dated 3rd

May, 1990 in CMP No.10864/1989, DPE had issued OM No.2(43)/90-DPE(WC) dated 12th June, 1990 implementing the Central Government pay

scale to the employees of the CPSEs following CDA in 69 CPSEs as indicated in Annexure-IV of the OM dated 12th June, 1990. But the benefit of

revision only could be allowed to the employees of those CPSEs which are not loss making and are in a position to handle the additional expenditure on

account of the pay revision from their own resources without any budgetary support from the Government but as the ANIFPDCL is a loss making

CPSE since 2001, its employees are drawing CDA pattern of pay scale therefore, are not entitled to enjoy the said benefit.

Accordingly, in our considered view the petitioners are not entitled to get the relief as sought for.

Resultantly, the appeal being M.A.T. No.035 of 2019 is hereby dismissed without any order as to costs.

Urgent photostat certified copy of this order if applied for, be supplied to the parties on priority basis.