9911796707
TMI Blog2021 (7) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... e to depend on either their own resources or seek grant from the Central/State Government, as the case may be, for their expenditures. Therefore, the grant of benefits of higher pay scale to the Central/State Government employees stand on different footing than grant of pay scale by an instrumentality of the State. The judgment in Purshottam Lal [ 1973 (2) TMI 135 - SUPREME COURT ] is a case where reference was made to the Pay Commission to consider the pay revision of all Central Government employees paid out of the Consolidated Fund of India. The recommendation of the Pay Commission was accepted but the benefit of revised pay scale was not given to the employees of the Forest Research Institute and College, Dehradun. An argument was raised that the report of the Pay Commission did not deal with the case of the Petitioners. The said argument was negated for the reason that once the Government has accepted the recommendation of the Pay Commission, which included all Central Government employees, the benefit of revised pay scale cannot be denied to the Petitioners. In K.T. Veerappa and Ors. v. State of Karnataka and Ors. [ 2006 (4) TMI 576 - SUPREME COURT ], the Court upheld the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Wadia, AOR, Mr. Karan Bharihoke, AOR, Ms. Siddhant Sharma, Adv. JUDGMENT Hemant Gupta, J. CIVIL APPEAL No. 7427 OF 2011. CIVIL APPEAL No. 7429 OF 2011. CIVIL APPEAL No. 7430 OF 2011. CIVIL APPEAL No. 7431 OF 2011. CIVIL APPEAL No. 7433 OF 2011 AND CIVIL APPEAL No. 7435 OF 2011 1. The present appeals are directed against an order passed by the Division Bench of the High Court of Punjab & Haryana at Chandigarh on 19.3.2009 whereby the writ petitions filed by the Respondents Hereinafter referred to as the 'employees' herein were allowed holding that the Punjab State Co-operative Milk Producers Federation Ltd. For short, the 'Federation' is a State within the meaning of Article 12 of the Constitution of India and that the employees are therefore entitled to pay scale equivalent to their counterparts in the State of Punjab from 1.1.1986, though the revised pay scale was allowed by the Federation w.e.f. 1.1.1994. 2. The milk producers in the State launched the setting up of Cooperative Societies at village level which are known as Primary Milk Producers Cooperative Societies. Such Primary Milk Producers Cooperative Societies are in turn members of The District Coop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ederation are governed by the Punjab State Co-operative Milk Producers Federation Services (Common Cadre) Rules, 1980 Hereinafter referred to as the 'Common Cadre Rules'. The Common Cadre Rules were resolved to be amended on 10.8.1990 by the Board of Directors of the Federation. The same were approved by the Registrar (Co-operative Societies) on 30.10.1990. It is thereafter that the Federation issued a notice Under Section 9-A of the Industrial Disputes Act, 1947 on 12.11.1990 (Annexure P-12) to all the employees on the ground of financial stringency showing its intention to effect the changes specified in the annexure annexed with the said notice. 7. The employees of the Federation raised protest; therefore, a committee was constituted on 6.12.1994 to examine the following issues: (i) Whether the upward revision should be adopted for the employees of Milkfed and Milk Unions? (ii) Whether the revision is to be given with effect from 1.1.1986 or any subsequent date by giving the benefit of notional fixation? (iii) Whether the upward should confine only to the categories covered in the report of Government Anomaly Committee or categories enjoying identical scales (unim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... better pay scale and getting benefit which might accrue as a result next revision of pay scale likely to be made w.e.f. 1.1.1994 on Punjab Government pattern. 9. The report of the Committee was considered and the grant of revised pay scale w.e.f. 1.1.1994 was approved by the Board of Directors of the Federation. The minutes of the meeting of the Board of Directors of Federation held on 30.8.1996 read as under: After discussion, it is unanimously resolved that in view of the recommendations of the Departmental Committee, constituted by the Milkfed on 6.12.1994, contained in the report enclosed at Annexure-3, approval is granted to the implementation of the revised pay scales and Master Pay Scale to the concerned employees of the Milkfed and the Milk Unions in accordance with the report of the Anomaly Committee constituted under the Third Pay Commission by the Punjab Government, with effect from 1.1.1994. Its approval may also be obtained from the Registrar, Cooperative Societies, Punjab. 10. The decision of the Board was approved by the Registrar (Cooperative Societies) on 29.4.1997. Thus, subsequently, revised scales with effect from 1.1.1994 were granted to the employees. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uraged and Governments revision is not justifiable pretext to consider similar increase in the Public Sector Undertakings should see their financial condition, rising cost in relation to productivity and the fact that Governments is not going to support the Public Sector Undertakings financially. 13. The High Court allowed the writ petitions filed by the employees holding that the financial stringency was no longer an excuse to not revise the pay scales and thus held that the date of implementation to grant revised pay scales as 1.1.1994 was absolutely unfair. The Federation is in appeal herein against such order. This Court had stayed the recovery pending further orders on 6.11.2009. 14. Mr. Patwalia, learned Counsel for the Federation, submitted that the High Court erred in law in holding that the date of implementation to grant revised pay scales as 1.1.1994 was absolutely unfair and that financial stringency was not an excuse for refusing to revise the pay scales from 1.1.1986. It was contended that the judgments M.M.R. Khan and Ors. v. Union of India and Ors., 1990 (Supp.) SCC 191; Haryana State Minor Irrigation Tubewells Corporation and Ors. v. G.S. Uppal and Ors., (2008) 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the writ Petitioners are the employees of the Federation who have no work of the post to which they were appointed. Instead of abolishing the post to which the writ Petitioners were appointed, the Committee had nevertheless dealt with the grant of revised pay scales to them in the following manner: Sr. No Name of the Categories Unrevise d Pay scale before 1.1.86 Already RPS w.r.f. 1.1.86 Pay scale now revised by Govt. Remarks Recommendations of the Committee for improvement from 1.1.94 xxx 15 Head Draftsman 700-1200 1640-2925 2200-3500 There is only one Head Draftsman, for whom the deptt. has no work has been put on alternate job in a Milk Union. There is also no likelihood of new civil works to be undertaken. So the pay scale of 1800-3200 is recommended for this post. No financial burden. 16 Draftsman 570-1080 1500-2640 1800-3200 Jr. Draftsman shall be eligible for promotion as draftsman in the scale of ₹ 1800-3200 after a minimum period of 12 years. There are 3 draftsmen. The civil works have almost been completed and there is no likelihood of new civil works to be undertaken. Two of them have been put on alternate jobs, as they are surplus. So the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Tribunal may also enquire whether the financial difficulties facing the employer are likely to be of a short duration or are going to face the employer for a fairly long time. It is not necessary, and would indeed be very difficult, to state exhaustively all considerations which may be relevant in a given case. It would, however, be enough to observe that, after considering all the relevant facts, if the Tribunal is satisfied that a case for reduction in the wage structure has been established then it would be open to the Tribunal to accede to the request of the employer to make appropriate reduction in the wage structure, subject to such conditions as to time or otherwise that the tribunal may deem fit or expedient to impose.... 21. In respect of Industrial workers, this Court, while dealing with wage structure in a judgment reported as Standard Vacuum Refining Co. of India v. Workmen and Anr. AIR 1961 SC 895, held that it is usual to divide wages into three broad categories: the basic minimum wage which is the bare subsistence wage, above it is the fair wage, and beyond the fair wage is the living wage. The said three categories of wages are described as the poverty level, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, some of which are economic and some spring from social philosophy give rise to conflicting considerations that have to be borne in mind and that such factors are not static in nature. The financial position of the employer, state of national economy, and the requirements of a workman living in a civilized and progressive society also are to be recognized. This Court held as under: 5. The fixation of wage structure is among the most difficult tasks that industrial adjudication has to tackle. On the one hand not only the demands of social justice but also the claims of national economy require that attempts should be made to secure to workmen a fair share of the national income which they help to produce, on the other hand, care has to be taken that the attempt at a fair distribution does not tend to dry up the source of the national income itself On the one hand, better living conditions for workmen that can only be possible by giving them a "living wage" will tend to increase the nation's wealth and income on the other hand, unreasonable inroads on the profits of the capitalists might have a tendency to drive capital away from fruitful employment and even to aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the live-fibre of our society today. Keeping in view the socio-economic aspect of the wage structure, we are of the view that it is necessary to add the following additional component as a guide for fixing the minimum wage in the industry: (vi) children's education, medical requirement minimum recreation including festivals/ceremonies and provision for old age marriages etc. should further constitute 25 per cent of the total minimum wage. 13. The wage structure which approximately answers the above six components is nothing more than a minimum wage at subsistence level. The employees are entitled to the minimum wage at all times and under all circumstances. An employer who cannot pay the minimum wage has no right to engage labour and no justification to run the industry. 24. Now, in respect of the establishments which meet the parameters of being a State within the meaning of Article 12, this Court considered the question of financial stringency in A.K. Bindal. This Court in the said case was examining the claim of revision of pay of the employees of a public sector enterprise. The employers placed reliance upon the Office Memoranda of the Government of India that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o far and cannot be countenanced. Even under the industrial law, the view is that the workmen should get a minimum wage or a fair wage but not that their wages must be revised and enhanced periodically. It is true that on account of inflation there has been a general price rise but by that fact alone it is not possible to draw an inference that the salary currently being paid to them is wholly inadequate to lead a life with human dignity. What should be the salary structure to lead a "life with human dignity" is a difficult exercise and cannot be measured in absolute terms.... 25. This Court also considered two earlier judgments South Malabar Gramin Bank v. Coordination Committee of South Malabar Gramin Bank Employees' Union., (2001) 4 SCC 101 and Associate Bank Officers' Association v. State Bank of India and Ors., (1998) 1 SCC 428 that the financial capacity of the employer cannot be held to be a germane consideration for determination of the wage structure of the employees, therefore, it must be confined to the facts of the aforesaid case. It was held that economic viability or the financial capacity of the employer is an important factor which cannot be ignor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees cannot legitimately claim that their pay-scales should necessarily be revised and enhanced when the organization in which they are working are making continuous losses and are deeply in the red. It was held as under: 11. In our view, the economic capability of the employer also plays a crucial part in it, as also its capacity to expand business or earn more profits. The contention of Mr. Sanghi, if accepted, that granting higher remuneration and emoluments and revision of pay to workers in other governmental undertakings and, therefore, the Petitioners are also entitled for the grant of pay revision may, in our opinion, only lead to undesirable results. Enough material was placed on record before us by the Respondents which clearly show that the first Respondent had been suffering heavy losses for the last many years. In such a situation the Petitioners, in our opinion, cannot legitimately claim that their pay-scales should necessarily be revised and enhanced even though the organisation in which they are working are making continuous losses and are deeply in the red. As could be seen from the counter affidavit, the first Respondent company which is engaged in the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the financial constraints faced by the Appellant. 30. In the third category of cases, in respect of Central or State Government, the factor of financial constraints has been found to be relevant when the liberalized benefits were granted from a particular date. In Amar Nath Goyal, the question examined was whether limiting of benefits only to the employees who retired or died on or after 1.4.1995 after calculating the financial implications was irrational or arbitrary, the Court held as under: 26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1-4-1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level. 31. In State of Haryana v. Shri Des Raj Sangar and Anr. (1976) 2 SCC 844, the post of the Panchayati Raj Election Officer was abolished in view of the extreme financial stringency. This Court held as under: 8...... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izens. But the Boards and Corporations have to depend on either their own resources or seek grant from the Central/State Government, as the case may be, for their expenditures. Therefore, the grant of benefits of higher pay scale to the Central/State Government employees stand on different footing than grant of pay scale by an instrumentality of the State. 33. The judgment in Purshottam Lal is a case where reference was made to the Pay Commission to consider the pay revision of all Central Government employees paid out of the Consolidated Fund of India. The recommendation of the Pay Commission was accepted but the benefit of revised pay scale was not given to the employees of the Forest Research Institute and College, Dehradun. An argument was raised that the report of the Pay Commission did not deal with the case of the Petitioners. The said argument was negated for the reason that once the Government has accepted the recommendation of the Pay Commission, which included all Central Government employees, the benefit of revised pay scale cannot be denied to the Petitioners. This Court has held as under: 15. Mr. Dhebar contends that it was for the Government to accept the recommen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment employees. This Court held that pay scales of the employees in the unionised cadre falling in four categories in the Respondent corporation should be revised in a way that the same are at par with the pay scales of such employees employed with the Cotton Corporation of India. 37. In G.S. Uppal, the Sub-Divisional Officer (SDO), Sub-Divisional Engineer (SDE) and Assistant Engineer (AE) on deputation from the Irrigation Department were granted revised pay scale but the SDO, SDE and AE appointed in the Appellant corporation were denied the same benefit. An argument was raised that the Appellant was running in losses and thus cannot meet the financial burden on account of revision of pay scales. The Court while rejecting such argument held as under: 33. The plea of the Appellants that the Corporation is running under losses and it cannot meet the financial burden on account of revision of scales of pay has been rejected by the High Court and, in our view, rightly so. Whatever may be the factual position, there appears to be no basis for the action of the Appellants in denying the claim of revision of pay scales to the Respondents. If the Government feels that the Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f pay and parity in duties is the function of the executive and financial capacity of the Government and the priority given to different types of posts under the prevailing policies of the Government are also relevant factors. In support of this contention, he has placed reliance on State of Haryana v. Haryana Civil Secretariat Personal Staff Assn. [(2002) 6 SCC 72 : 2002 SCC (L&S) 822] and Union of India v. S.B. Vohra [(2004) 2 SCC 150 : 2004 SCC (L&S) 363]. There is no dispute nor can there be any to the principle as settled in State of Haryana v. Haryana Civil Secretariat Personal Staff Assn. [(2002) 6 SCC 72 : 2002 SCC (L&S) 822] that fixation of pay and determination of parity in duties is the function of the executive and the scope of judicial review of administrative decision in this regard is very limited. However, it is also equally well settled that the courts should interfere with administrative decisions pertaining to pay fixation and pay parity when they find such a decision to be unreasonable, unjust and prejudicial to a Section of employees and taken in ignorance of material and relevant factors. (Emphasis supplied) 41. In the present case, it is contended that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under: (i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesbury unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not Rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind [(1991) 1 AC 696], Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention". xx xx xx 94. The principles deducible from the above are: (1) The modern trend points to judicial restraint i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change cannot per se be interfered with by the court. 93. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the appropriate forum is Parliament and not the courts. Here the policy was tested and the motion defeated in the Lok Sabha on 1-3-2001. XX XX XX 98. In the case of a policy decision on economic matters, the courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the court is satisfied that there is illegality in the decision itself. 45. This Court in a judgment reported as Jagdish Mandal v. State of Orissa and Ors. (2007) 14 SCC 517 examined the scope of judicial review in the matter of award of a contract. The Court held as under: 22. Judicial review of administrative action is intended to preven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... require a higher degree of fairness in action." 46. In a recent judgment reported as West Bengal Central School Service Commission and Ors. v. Abdul Halim and Ors. (2019) 18 SCC 39, this Court was examining the candidature of a candidate for appointment in pursuance of advertisement advertised by West Bengal Central School Service Commission. One of the essential qualifications was Bengali as a subject either at the Secondary level or at the Higher Secondary level or at the graduation or postgraduation level. The candidature of selected candidate was not interfered with by the Division Bench of the High Court although such candidate was not possessing Bengali as a language. The Court held as under: 27. It is well settled that the High Court in exercise of jurisdiction Under Article 226 of the Constitution of India does not sit in appeal over an administrative decision. The Court might only examine the decision-making process to ascertain whether there was such infirmity in the decision-making process, which vitiates the decision and calls for intervention Under Article 226 of the Constitution of India. 28. In any case, the High Court exercises its extraordinary jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy of the grounds in support of a decision to examine the merits of the decision, sitting as if in appeal over the decision. The test is not what the Court considers reasonable or unreasonable but a decision which the Court thinks that no reasonable person could have taken, which has led to manifest injustice. The writ court does not interfere, because a decision is not perfect. 33. In entertaining and allowing the writ petition, the High Court has lost sight of the limits of its extraordinary power of judicial review and has in fact sat in appeal over the decision of Respondent 2. 47. Later, a three-Judge Bench in a judgment reported as Municipal Council, Neemuch v. Mahadeo Real Estate and Ors. (2019) 10 SCC 738 followed the aforesaid judgment and held as under: 16. It could thus be seen that an interference by the High Court would be warranted only when the decision impugned is vitiated by an apparent error of law i.e. when the error is apparent on the face of the record and is self-evident. The High Court would be empowered to exercise the powers when it finds that the decision impugned is so arbitrary and capricious that no reasonable person would have ever arrived at. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant material before the Federation. The process to arrive at such decision can be said to be flawed only on the permissible grounds of illegality, irrationality and procedural impropriety. We find that neither the decision-making process, nor the decision itself suffers from any such vice. 50. Learned Counsel for the writ Petitioners have referred to the information received under the Right to Information Act to show that the Federation was in profit in the year 1996-1997. We do not find that such information is relevant to determine the financial condition for the period from 1.1.1986 to 1.1.1994. The Federation has categorically stated that because of the remedial steps taken by the Federation, there was turn around only after 1994. Still further, we find that the profits in the balance sheet are not meant to be appropriated towards wages of the employees alone. Though the profits had to be shared by the members of the Co-operative Society, but the employees of the Federation are not its members. The income generated by the Federation is not to be expanded only on payment of salary but is also required for upgradation of technology, renovation and expansion of plants etc. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Federation to claim equal pay for equal work. The employees are not aggrieved against the judgment of the High Court. Therefore, the employees cannot raise an argument which was not raised before the High Court. 55. But still, we have examined the argument raised. It was argued that the claim of the employees is not of revised pay scale from 1.1.1986 but that the categorization of Milk Procurement Assistants as Grade-I & II is unconstitutional and they would be entitled to the same pay as is being paid to Milk Procurement Assistants Grade-I on the principle of equal pay for equal work. 56. The said contention of the employees is controverted by the Federation, inter alia, on the ground that the Milk Procurement Assistants are not the employees of the Apex Society i.e. Punjab State Co-operative Milk Producers Federation but they are employees of the District Co-operative Milk Producers Union which is a separate entity. The staffing pattern for District Co-operative Milk Producers Union, as approved by the Registrar (Co-operative Societies), shows that different educational qualifications and experience is prescribed for appointment to Milk Procurement Assistants Grade-I & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees claiming equal pay for equal work was not examined by the High Court. 61. The Respondent Nos. 1 to 4 are Milk Procurement Assistants Grade-I in the pay scale of ₹ 700-1200 whereas Respondent No. 5 is Animal Husbandry Assistant in the same pay scale of ₹ 700-1200 w.e.f. 1.8.1980. Such employees are claiming parity in the matter of pay with the Area Officers including Deputy Manager (Procurement) and Dairy Extension Officer in the pay scale of ₹ 850-1700. The employees have pleaded that w.e.f. 2.2.1987, the designation of Milk Procurement Assistants Grade-I has been changed to Milk Procurement Supervisor and now the workload has increased inasmuch as fifty societies are to be supervised as against eight societies which were supervised, without any increase in the pay scale. It was argued that the duties and functions of the employees and the other Area Officers including Deputy Manager (Procurement) and Dairy Extension Officer are the same as such posts are interchangeable. 62. In the written statement filed before the High Court, the stand of the Federation was that the employees have since long been permanently transferred to the Milk Union, Ludhiana. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
