2003 (4) TMI 406 - SC - Indian Laws

Whether the employees of Public Sector Enterprises have any legal right to claim that though the industrial undertakings or the companies in which they are working did not have the financial capacity to grant revision in pay scale, yet the Government should give financial support to meet the additional expenditure incurred in that regard? Held that - The contention that the employees opted for VRS under any kind of compulsion is notworthy of acceptance. The petitioners are officers of the two companies and are mature enough to weigh the pros and cons of the options which were available to them. They could have waited and pursued their claim for revision of pay scale without opting for VRS. However they, in their wisdom thought that in the fact situation VRS was a better option available and chose the same. After having applied for VRS and taken the money it is not open to them to contend that they exercised the option under any kind of compulsion. In view of the fact that nearly ninety nine per cent of employees have availed of the VRS Scheme and have left the companies (FCI HFC), the writ petition no longer survives and has become infructuous.

Issues Involved:
1. Revision of pay scale for officers of Fertilizer Corporation of India (FCI) and Hindustan Fertilizer Corporation (HFC).
2. Discrimination based on profit-making and loss-making status of companies.
3. Legal right to claim Government financial support for salary revision.
4. Violation of fundamental rights under Articles 14 and 21 of the Constitution.
5. Validity of Office Memorandums dated 12-4-1993 and 19-7-1995.
6. Alleged compromise or settlement regarding pay revision.
7. Impact of Voluntary Retirement Scheme (VRS) on the claims for pay revision.

Detailed Analysis:

1. Revision of Pay Scale for Officers of FCI and HFC:
The petitioners sought the revision of pay scales for officers of FCI and HFC, which had been pending since 1992. They argued that the Government had not taken steps for the revision, leading to discrimination against officers in loss-making companies compared to those in profit-making companies.

2. Discrimination Based on Profit-Making and Loss-Making Status:
The petitioners contended that the policy of differentiating between profit-making and loss-making companies for pay revision was unfair and discriminatory. They argued that officers in loss-making companies should not be denied pay revision solely based on the financial status of their employers.

3. Legal Right to Claim Government Financial Support for Salary Revision:
The Court examined whether employees of public sector enterprises have a legal right to claim that the Government should provide financial support for salary revisions. It was held that employees of Government companies are not civil servants and do not have a legal right to demand that the Government meet additional expenditure incurred due to salary revisions.

4. Violation of Fundamental Rights under Articles 14 and 21:
The petitioners argued that the non-revision of pay scales violated their fundamental rights under Articles 14 and 21 of the Constitution. The Court rejected this argument, stating that non-revision of pay scales does not amount to a violation of the right to life under Article 21. The Court emphasized that economic viability and the financial capacity of the employer are important factors in determining wage structures.

5. Validity of Office Memorandums Dated 12-4-1993 and 19-7-1995:
The Office Memorandums issued by the Department of Public Enterprises stated that no budgetary support would be provided for wage increases, and public sector enterprises must generate their own resources. The Court upheld the validity of these memorandums, stating that they do not suffer from any legal or constitutional infirmity.

6. Alleged Compromise or Settlement Regarding Pay Revision:
The petitioners claimed that there was a compromise or settlement for pay revision from 1-1-1996, which was recorded in the Delhi High Court's order dated 10-11-1997. The Court found no evidence of a binding compromise or settlement on behalf of the Union of India. The orders passed by the Court on 19-4-2000 and 18-8-2000 were ad hoc measures and did not constitute a final settlement.

7. Impact of Voluntary Retirement Scheme (VRS) on the Claims for Pay Revision:
The majority of employees of FCI and HFC opted for the VRS, which included enhanced ex gratia payments. The Court held that after accepting the VRS, employees cannot raise grievances regarding past pay revisions. The VRS was a package deal intended to end the employer-employee relationship, and claims for retrospective pay revisions would frustrate the purpose of the scheme.

Conclusion:
The Supreme Court dismissed the petitions, holding that there was no legal or constitutional infirmity in the Office Memorandums, and the petitioners had no legal right to demand Government financial support for pay revisions. The Court also found that the claims based on alleged compromise or settlement were without merit and that the VRS rendered the petitions infructuous.

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