2003 (4) TMI 592 - SC - Companies Law

Summary

Issues Involved:
1. Entitlement to receive pension and dearness relief at enhanced rates.
2. Power of the Corporation to fix a cut-off date for enhanced pension and dearness relief.
3. Financial stringency as a factor for fixing the cut-off date.
4. Applicability of Kerala Service Rules (KSR) to the Corporation's employees.
5. Recovery of amounts allegedly paid in excess to employees.

Detailed Analysis:

1. Entitlement to Receive Pension and Dearness Relief at Enhanced Rates:
Several writ petitions were filed by the respondents before the Kerala High Court seeking a declaration of their entitlement to receive pension and dearness relief at enhanced rates, similar to State Government employees. The High Court allowed the respondents' appeals and dismissed those filed by the Corporation, noting that the employees transferred from the State Transport Department to the Corporation were entitled to the same benefits as government employees from the date the government servants received them. The High Court observed that the Corporation had been paying pension without any difference in dates until 1991 and that there was no rational basis for fixing a cut-off date for enhanced pension and dearness reliefs.

2. Power of the Corporation to Fix a Cut-off Date for Enhanced Pension and Dearness Relief:
The Corporation argued that it had the authority to fix the cut-off date for enhanced pension and dearness reliefs due to financial constraints. The High Court, however, proceeded on the basis that there was no question of fixing a different cut-off date since Part III of the KSR had been adopted by the Corporation. The Supreme Court noted that the High Court did not properly consider whether the letter (Ex.P-1) from the Government constituted a direction under Section 34 of the Road Transport Corporation Act, 1950, and whether the Corporation had the power to fix a different date without any special direction from the Government.

3. Financial Stringency as a Factor for Fixing the Cut-off Date:
The Corporation cited financial stringency as a reason for deferring the payment of enhanced pension and dearness reliefs. The High Court, however, did not accept this justification, emphasizing that the pensioners should not be deprived of their legitimate entitlements due to the Corporation's financial difficulties. The Supreme Court highlighted that financial conditions could justify fixing a cut-off date when a new pension scheme is introduced, but this aspect needed further examination by the High Court.

4. Applicability of Kerala Service Rules (KSR) to the Corporation's Employees:
The High Court held that since Part III of the KSR had been adopted by the Corporation, there was no rational basis for fixing a cut-off date for enhanced pension and dearness reliefs. The Supreme Court noted that the High Court did not adequately consider whether the adoption of the KSR was by incorporation or by reference, which could impact the Corporation's authority to fix a cut-off date. The distinction between incorporation and reference needed further examination to determine the applicability of amendments to the KSR.

5. Recovery of Amounts Allegedly Paid in Excess to Employees:
In one of the appeals (C.A. No. 6655 of 2000), the Corporation sought to recover amounts allegedly paid in excess to the employees due to wrong fixation of pay. The High Court held that recovery was inequitable since the pay was fixed in 1974, and the employees were not responsible for any wrong fixation. The Supreme Court upheld the High Court's decision not to recover the amounts, noting the peculiar circumstances of the case.

Conclusion:
The Supreme Court remitted the matter back to the High Court for fresh consideration, directing it to deal with the respective stands of the parties and allowing them to place additional materials in support of their positions. The High Court was instructed to decide the matter de novo, considering the issues related to the power of the Corporation to fix a cut-off date, the applicability of KSR, and the financial constraints cited by the Corporation. The appeals were disposed of with no order as to costs.