1999 (8) TMI 808 - SC - Companies Law

Whether the persons appointed by the Official Liquidator/Court Liquidator under the orders of respective High Court under Rules 308/309 of the Companies (Court) Rules 1959 are entitled to equal pay and regularisation as the employees appointed by the Central Government in the office of the official liquidator? Held that - In view of the peculiar facts of these cases and the positive findings of the High Courts with which we concur we are unable to agree with the contention of the learned Senior Counsel for the appellants that the Company Paid Staff cannot be absorbed/regularised as they were not employed by the Government in accordance with the rules; that they knew their appointments were only temporary and that their pay was not from the consolidated fund.

Summary

Issues Involved:
1. Disparity in pay-scales and deprivation of allowances and retiral benefits for employees of the court liquidator.
2. Regularisation and absorption of Company Paid Staff.
3. Application of the principle of 'equal pay for equal work'.
4. Legal validity of the classification between employees of the Court Liquidator and the Official Liquidator.
5. Implementation of a scheme for the absorption of Company Paid Staff.

Issue-wise Detailed Analysis:

1. Disparity in Pay-Scales and Deprivation of Allowances and Retiral Benefits:
The respondents, employees in the office of the court liquidator in the Calcutta High Court, moved Matter No. 756 of 1991, claiming they must be treated as Central Government employees with full status, regular pay-scales, avenues for promotion, pension, provident fund, and other service benefits. The Single Judge ruled in their favor, granting them the status of permanent Central Government employees after 360 days of service, with arrears restricted to three years prior to the judgment. The Division Bench upheld this, noting the respondents had been working for 20-25 years without regularisation or appropriate pay-scales.

2. Regularisation and Absorption of Company Paid Staff:
In Civil Appeal No. 5677 of 1994, the Kerala High Court addressed the continuous employment of Company Paid Staff in the Office of the Official Liquidator. The High Court found these employees, appointed under rules 308 and 309 of the Companies (Court) Rules, 1959, were discharging identical duties to those of Central Government staff and had been in service for years without regularisation. The Court directed their absorption as regular Lower Division Clerks with benefits of pay fixation and allowances.

3. Application of the Principle of 'Equal Pay for Equal Work':
The Kerala High Court applied the principle of 'equal pay for equal work', finding no reasonable basis for differentiating between Company Paid Staff and regular employees in the office of the Official Liquidator. The Court noted the precedent of absorption in 1978 and observed the lack of justification for denying similar treatment to the current Company Paid Staff.

4. Legal Validity of Classification Between Employees of the Court Liquidator and the Official Liquidator:
The Division Bench of the Calcutta High Court found no rational basis for the classification between employees of the Court Liquidator and the Official Liquidator, as both performed similar work. The Court held that the respondents could not be denied the benefits and status enjoyed by their counterparts in the Official Liquidator's office, dismissing the appeal by the appellants.

5. Implementation of a Scheme for Absorption of Company Paid Staff:
The Supreme Court, recognizing the human problem involved, suggested the Central Government consider a practical solution. The Government proposed three options: repeating the 1978 absorption scheme, continuing the current arrangement with revised salaries, or granting age relaxation for open competitive exams. The Court dismissed the appeals and allowed the writ petition, directing the appellants to frame a scheme modeled on the 1978 Scheme within six months to absorb the Company Paid Staff, failing which the High Court judgments would be confirmed.

Conclusion:
The Supreme Court dismissed the appeals, upheld the High Court judgments, and directed the Central Government to frame a scheme for the absorption of Company Paid Staff within six months. The Court emphasized the need for equal treatment and regularisation of employees who had been working for extended periods without proper benefits.