Orissa High Court
Orissa Khadi And Village Industries ... vs State Of Orissa Rep Its Principal Secy To ... on 9 February, 2018
HIGH COURT OF ORISSA:CUTTACK
W.P. (C) No.4802 of 2011
In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950.
-------
Orissa Khadi and Village Industries
Board Karmachari Sangha, represented
through its General Secretary ......... Petitioner
Versus
State of Orissa, represented through
its Principal Secretary to Industries Department
and others ......... Opposite Parties
For Petitioner : Mr.B.Routray, Sr. Advocate
Mr.S.Das and S.D.Routray
For Opp. Parties : Mr.Bibekananda Bhuyan
Additional Government Advocate
(For O.Ps.1 and 2)
Mr.S.B.Jena and A.Mishra
(For O.P.3)
.........
PRESENT:
THE HON'LE DR. JUSTICE D.P.CHOUDHURY
---------------------------------------------------------------------------------
Date of argument:28.11.2017 Date of judgment:09.02.2018
---------------------------------------------------------------------------------
Dr. D.P.Choudhury, J. The petitioner assails the inaction of the opposite
parties in not giving the arrear salary and D.A. with effect from
01.01.1996as per the Orissa Revised Scales of Pay Rules, 1998 (hereinafter called as "the Rules, 1998) and arrear salary and other consequential benefits with effect from 01.01.2006 as per the Orissa Revised Scales of Pay Rules, 2008 (hereinafter called as "the Rules, 2008) at par with the Government employees and counterpart employees as per the statutory provisions.
-2-
2. FACTS The unshorn details leading to the case of the writ petition is that the petitioner is a registered organization, namely, Orissa Khadi and Village Industries Board Karmachari Sangha and it looks after the common interest of the existing employees of the Orissa Khadi and Village Industries Board (in short "the Board"). The Board was created under the vision of Mahatma Gandhi to strengthen the economic condition of rural poor involving weaker section by the State Legislature under the statute known as Orissa Khadi and Village Industries Board Act, 1955 (hereinafter called "the Act, 1955") and under the said Act, 1955, Orissa Khadi & Village Industries Board Rules, 1956 (in short "the Rules, 1956") and the Orissa Khadi & Village Industries Board Regulations, 1960 (in short "the Regulations, 1960") have been framed. The Board is a statutory body established with the avowed object of organizing, developing and regulating Khadi and Village Industries throughout the State of Orissa. The State Government in Industries Department is the Administrative Department. Under the Act, 1955, the Board was constituted. Khadi Village Industries Commission is a Statutory Body created by the Government of India which provides fund to the respective Board of the States. The Board receives the fund from Khadi and Village Commission in shape of loan and grant as per mandate of the Act in each financial year and the said loan and grant are disbursed to the people of Orissa.
-3-
3. In order to implement the Scheme throughout the State, opposite parties 1 and 2 created the Board and sanctioned different posts with regular scale of pay at par with the posts available in Government having similar scale and status as applicable to the Government employees from time to time. Wherever the Regulation of the Board is silent with regard to the service of the employees of the Board, the rules of Orissa Service Code are mutatis-mutandis applicable to them under Regulations, 1960. Like the Government employees, posts are created, service books are maintained, Government Servant Conduct Rules and other relevant rule as applicable to the Government employees are also applicable to the employees of the Board.
4. It is also alleged inter alia that under the provisions of the Act, 1955, the entire establishment expenditure of the Board is met out of the Grant-in-Aid sanctioned by the opposite parties 1 and 2. Under the provisions of the said Act, the State Government shall provide fund for the maintenance of the staff sanctioned by the State Government.
5. Be it stated that the opposite parties 1 and 2 have been providing 100% Grant-in-Aid to opposite party no.3 towards salary of the employees of the Board since inception and have implemented ORSP Rules of 1974, 1981, 1985 and 1989 at par with the Government employees as per sanctioned post under Section 26 of the Act, 1955. The Government of Orissa implemented ORSP Rules, 1998 with effect from 01.01.1996 in favour of its employees. The Secretary of the Board has also intimated the opposite party no.1 vide his letter dated -4- 22.06.1999 for implementation of the ORSP Rules, 1998 but the opposite party no.1, vide his letter dated 17.07.1999, replied that the sanction of DA and revised pay as applicable to the State Government employees do not apply to the employees of the Corporation/State Government undertakings/Cooperative Societies and further asked the Board to calculate the revised pay and DA under ORSP Rules, 1998 to accommodate the Grant-in-Aid without asking for Government help. The Secretary of the Board, vide letter dated 24.07.1999, replied the opposite party no.1 that the employees of the Board are entitled for ORSP Rules, 1998 and the revised pay and DA can be accommodated within the Grant-in-Aid ceiling already provided to the Board for the year 1999-2000. But in spite of that, opposite party no.1 did not implement ORSP Rules, 1998. However, with much reluctance, opposite party no1 vide letter dated 30.03.2001 allowed for payment of salary to the employees of the Board during implementation of ORSP Rules, 1998 but did not release the arrear salary with effect from 1.1.1996 to 31.3.2000 and also the DA with effect from 01.07.2000 to 31.12.2005. Not only this but also the opposite parties 1 and 2 issued an arbitrary order imposing condition for release of the DA to the effect that said amount should be made by generation of fund by Board. The opposite parties have created classification between two groups of similar employees contrary to service rules.
6. Similarly, the State Government implemented the recommendation of the 6th Pay Commission in the year 2008 giving -5- effect from 01.01.2006. The then Secretaries of the Board, being Officers of the Orissa Administrative Service, have requested opposite party no.1 vide letters dated 09.01.2009, 18.03.2009, 08.06.2009, 17.11.2009, 03.05.2010 and 14.07.2010 to implement the ORSP Rules, 2008 with effect from 01.01.2006. But the opposite party no.1 has considered the proposal by allowing the same with effect from 01.04.2010. The Government Officials are the members of the Board and in spite of the request made by the Secretary of the Board and the President of the petitioner-union to the State Government, the arrear salary and DA as per ORSP Rules, 1998 and 2008 were not considered.
7. Since the employees of the Board are at par with the Government employees as per the Act, 1955, the financial benefits are to be paid at par with the Government employees. The inaction of the opposite parties is discriminatory between similar nature of employees of the State Government. So, the inaction of the opposite parties 1 and 2 is violative of Articles 14 and 16 of the Constitution.
8. Similar nature of employees of the other Boards in Jammu and Kashmir, Sikkim, Goa and other States are getting the salary and arrear DA at par with the State Government employees. The Patna High Court in the case of Bihar Rajya Khadi Gram Udyog Board Karyakarta Sangh -V- State of Bihar and others; AIR 1997 Patna 51 have passed an order on 18.01.1996 directing the State of Bihar to provide funds towards establishment expenses of the employees of the Board. Apart from this, the employees of the present Board through the -6- Union have filed W.P.(C) No.8438 of 2010 before this Court claiming pensionary benefit at par with the State Government employees as they have allowed the same to other organizations. Other employees of the similar organizations like Shree Jagannath Temple Administration, all Universities and other Public Sector Undertakings of the State have been allowed the revision of pay in accordance with the pay rules framed for payment of arrears with effect from 01.01.1996. Thus, the writ petition is filed praying for a direction to the opposite parties 1 and 2 for payment of arrear salary and DA in accordance with the ORSP Rules, 1998 and 2008 with effect from 01.01.1996 and 01.01.2006 respectively at par with the State Government employees. Also consequently prayed for quashing of the order dated 30.03.2001 vide Annexure-14 and order dated 06.01.2011 vide Annexure-25 and to issue modified order accordingly.
9. SUBMISSIONS Mr.B.Routray, learned Senior Advocate for the petitioner submitted that Sub-section-2(c) of Section-4 of Chapter-II of the Act, 1955 clearly envisages that all rights, obligations and liabilities (including any liabilities under any contract) of the Board shall become the rights, obligations and liabilities of the State Government. So, it is the Government who plays vital role in formation and dissolution of the Board and nomination of the President and Members of the Board. According to him, the Government Officers are deputed to the Board to work as Secretary.
-7-
10. Mr.Routray, learned Senior Advocate for the petitioner further submitted that the budget is prepared by the Board and sent to the State Government as per Section 26 of the Act, 1955 for the next financial year. There is also proviso to that section stating that if the State Government's sanction is not received for the same, the budget shall be deemed to have been so sanctioned by the State Government. Likewise, Section 28 of the Act 1955 also allows for supplementary budget like that of the State Government. Under Section 36 of the said Act, Regulations, 1960 has been framed which states about payment of remuneration, allowances and other conditions of service of the staff of the Board. Clause 40 of Regulations, 1960 clearly shows that the rules in the Orissa Service Code, Volume I with all its appendices, except appendices 1 to 4, 8 and 12, as amended from time to time by the Government shall apply to the employees of the Board mutatis mutandis. According to this Regulation, the "Superior Service" refers to Classes I, II and III under the Orissa Service Code and "Inferior Service"
shall mean posts in Class-IV under said Code.
11. Mr.Routray, learned Senior Advocate for the petitioner further submitted that by operation of Clause 40 of Regulations, 1960 read with Sections 4(2-c) and 26 of the Act, 1955, the employees of the Board are entitled to all service benefits including DA as is due and admissible to the respective posts of State Government DA. So, the revised scale of pay admissible in ORSP Rules, 1998 and ORSP Rules, -8- 2008 to the Government employees should be made available to the employees of the Board.
12. Mr.Routray, leaned Senior Counsel for the petitioner further submitted that with the above analogy, the State Government has allowed ORSP Rules, 1974, 1981, 1985 and 1989 at par with the Government employees. There is no reason with the State Government to deny the same benefit as available to them in subsequent revision of scale of pay. The employees of Mahila Vikas Samabaya Nigam, State Social Welfare Board, State Haj Committee, State Wakf Board, Shri Jagannath Temple Administration, Utkal University, Orissa University of Agriculture and Technology and Odisha Water Supply and Sewerage Board are all receiving the Government salary as per ORSP Rules, 1998 and 2008 but the employees of the Board being discriminated are not extended with such benefit for which there is violation of Articles 14 and 16 of the Indian Constitution.
13. Mr.Routray, learned Senior Advocate for the petitioner further submitted that the contents of the minutes of the Chief Secretary to the Court do not convey correct law as it has denied justice to employees of the Board. So, he prayed to allow arrear salary benefit to the employees of the Board at par with the employees of the State Government.
14. Mr.Bhuyan, learned Additional Government Advocate, relying upon the counter affidavit of opposite parties 1 and 2, submitted that the employees of the Board cannot be construed as Government -9- employees because the employees are governed by the Act, 1955 and they are being paid their salary from their own fund. He further submitted that conditions of service, which have not been specifically prescribed in the regulation, are to be adopted in accordance with the Orissa Service Code but same is not construed that the employees of the Board are to be treated as Government employee so as to apply all provisions of the Orissa Service Code in certain contingencies. As the Board has no any income, its employees cannot expect the financial assistance from the State Government. So, the writ petition requiring the Government to pay the salary and other claims of the employees of the Board at par with the State Government employees is not tenable.
15. Mr.Bhuyan, learned Additional Government Advocate further submitted that the Board is established under the Orissa Act 3 of 1956 for organizing, developing and regulating the Khadi and Village Industries in the State of Orissa and it is a body corporate and has got right to raise income. So, the argument of the petitioner that the employees of the Board are at par with the Government employees is misnomer. The Finance Department decides in every financial year as to whether the revision of scale of pay is permissible for the Board or any other like institutions. Revision of scale of pay of Government employees is not directly applicable to the employees of the Board. The employees of other autonomous institutions cannot be made at par with the employees of the Board because there is reasonable classification between the employees of one institution and another institution.
- 10 -
16. Mr.Bhuyan, learned Additional Government Advocate also cited the decision of the Hon'ble Supreme Court in the case of State of Assam -V- Barak Upatyaka D. U. Karmachari Sanstha; (2009) 5 SCC 694 where Their Lordships have held that while discharging public functions and duties, the Government companies/corporations/societies which are instrumentalities or agencies of the Government must be subjected to the same limitations in the field of public law, constitutional or administrative law as the Government itself does not lead to the inference that they become agents of the Central Government and State Government for all purposes so as to bind such Government for all their acts, liabilities and obligations under various Central and State Acts and under private law. So, the Board being a separate entity cannot claim the benefit of Government servant as applicable to them. According to him, the decision of this Court in Shree Jagannath Temple Employees Association -V- State of Orissa and others (OJC No.3299 of 1988) is not applicable. At the same time, he submitted that the opposite parties 1 and 2 have already implemented ORSP Rules 1998 and 2008 in favour of the employees of the Board with effect from the cut off date. As per Section 25 of the Act, 1955, the Government have got right to put some terms and conditions while considering the revision of scale of pay of its employees which have been allowed to them despite of the financial implication. At last, Mr.Bhuyan, learned Additional Government Advocate submitted that the writ petition is not maintainable and the same should be rejected.
- 11 -
17. POINTS FOR DETERMINATION The main points for consideration are as under:
(I) Whether the employees of the Board are at par with the State Government employees and are entitled to the benefits so far as the revision of scale of pay and other allowances available to the Government employees?
(II) Whether the employees of the Board are entitled to revision of scale of pay and DA in terms of ORSP Rules, 1998 and 2008 with effect from 01.01.1996 and 01.01.2006 respectively and release of arrear of salary and allowances from such date respectively?
18. DISCUSSIONS POINT No.(I) It is admitted fact that the employees of the Board are governed under the Act, 1955. It is not in dispute that the said Act has also got regulation which takes care of the service conditions of the employees working in the Board and these service conditions including the salary, allowances and other benefits. It is also admitted fact that the Grant-in-Aid is made available to the Board from the State Government and accordingly, the salaries and other allowances are made from such Grant-in-Aid.
19. Before proceeding further, it is necessary to capitulate the provisions of the Act, 1955. The Board was established for the purpose of organizing, developing and regulating the Khadi and Village Industries in the State of Orissa. We may remind the dream of Mahatma Gandhi,
- 12 -
the Father of the Nation who have said the following few lines for the people of India:
"If we want the millions to earn a few paises by doing honest and honourable work, the only possible instrument to present them with, in our country, is the gentle and graceful spinning wheel."
He further said that:
"to produce cloth, which is our basic need, in mills is an economic blunder of the first magnitude just as it would be to supply cheap bread through huge bakeries established in big cities and to destroy the family stove."
The above words of our Father of the Nation without whom our nation could not see the light of the day has very much put emphasis on Khadi products. "Khadi" means any handloom cloth from yarn hand-spoon in our nation. This is absolutely a great project for the upliftment of the rural and poor. Today's handicraft has also got limbs of Khadi. Be that as it may, Khadi cloth even after death of our Father of the Nation has remained in the past, present and for future. So, the importance of Khadi, being felt, the Act has been enacted.
20. Under Section-4(2) of the Act, 1955, the President, Secretary and other members of the Board shall be nominated by the State Government. Section-4(2-c) provides all rights, obligations and liabilities (including any liabilities under any contract) of the Board shall become rights, obligations and liabilities of the State Government. The said provisions of the Act, 1955 clearly shows that the Board is under the control of the State Government.
21. Sections 23, 25, 26, 27 and 28 of the Act, 1955 are reproduced below for appreciation:
- 13 -
"23.Funds of Board (1) The Board shall have a Fund of its own style after its name and all receipts of the Board shall be credited thereto and payments by the Board shall be met therefrom.
(2) The Board may accept grants, subventions, donations and gifts and receive loans from the Government or any local authority or anybody or association, whether incorporated or not, or an individual for all or any of the purposes of this Act.
(3) All money belonging to the Fund of the Board shall be deposited in such manner as the State Government may, from time to time by a special or general order, directs.
(4) The accounts of the Board shall be operated upon by such officers jointly or individually as may be authorised by the Board.
Xx xx xx
25. Subventions and grants to the Board (1) The State Government may, from time to time, make subventions and grants to the Board for the purposes of this Act on such terms and conditions as the State Government may determine in each case.
(2) The Board may, from time to time, with the previous sanction of the State Government and subject to the provisions of this Act and such conditions as the State Government may impose; borrow any sum required for the purposes of this Act.
26.Budget The Board shall, on such date as may be fixed by the State Government, prepare and submit to the State Government the budget for the next financial year showing estimated receipts and expenditure on capital and revenue accounts according to the programme and the schedule of the staff sanctioned by the State Government;
Provided that if within a period of sixty days from the date of submission of the budget, the State Government's sanction is not received for the same, the budget shall be deemed to have been so sanctioned by the said Government.
27.Sanction of budget (1) The State Government may sanction the budget submitted to them with such modifications as they deem proper. (2) The Board shall be competent to re-appropriate such amounts as may be necessary from one scheme to another and within sub-head and minor heads subject to the condition that the cost of any scheme as originally sanctioned shall not exceed by more than 25 per cent.
28.Supplementary budget The Board may submit supplementary budget for the sanction of the State Government in such form and before such date or dates as the State Government may prescribe and the provisions of Section 26 shall apply to such supplementary budget."
- 14 -
The aforesaid provisions clearly state that the Board shall be operated under the instruction of the State Government and the Board will accept the loans and any other gift or donation from the Government. At the same time, the State Government will make subventions and grant to the Board for the purposes of the Act on such terms and conditions as the State Government may determine in each case. Not only this but also the Board will prepare the budget and submit it to the State Government to meet the expenses on capital and revenue accounts according to the programme and the schedule of the staff sanctioned by the State Government.
22. The State Government has got duty to sanction the budget. The Board has also got the power to submit the supplementary budget to the State Government for its sanction. Moreover, under Section 35 of the Act, 1955, the State Government have been empowered to make rules for the Board and the same have also been framed in 1956. In Rule 7 of the Rules, 1956, it is clearly mentioned that the budget after being prepared in Form No.III would be forwarded to the State Government by 31st December in the year in which it is prepared and the supplementary budget in Form No.IV would be submitted to the State Government in the first week of January in that year. These materials clearly disclose that the main budget or supplementary budget are all similar to the budget manual for the State Government and under Section 36 of the Act, 1955, the Board has been empowered with the previous sanction of the State Government to make regulation.
- 15 -
23. The Regulation prepared by the Board in 1960 clearly shows that it is schematic one. This regulation has been made to regulate the service conditions including salary etc of employees of the Board. Clause Nos.8 and 40 of the Regulations, 1960 states as follows:
"8.Classification of employment:-
(1) The employees of the Board shall fall under two categories, namely, (1) regular establishment and (2) schematic establishment.
(2) All posts under the Board shall be classified by the Board into Class I, Class II, Class III and Class IV as specified in Schedule I hereto annexed.
Provided that at the time of creation of a new post not mentioned in Schedule I, the Board will specify the class under which the post will be included."
"40. General conditions of service:-
Unless otherwise provided in these regulations, the rules in the Orissa Service Code, Volume I with all its Appendices, except Appendices 1 to 4, 8 and 12, as amended from time to time by the Government shall apply to the employees of the Board mutatis mutandis. For this purpose, the words "Government", "Government Servant" and "Head of Department" wherever they occur except in Chapter-I of the Code shall mean "the Board" "the employees of the Board" and "the President"
respectively. "Superior Service" referred to in the Orissa Service Code shall mean posts in Classes I, II and III and "Inferior Service" shall mean posts in Class IV." From the aforesaid provisions, it is clear that the staff of the Board is to be accepted as Government servants according to the Orissa Service Code. Besides, the entire Regulation shows that the disciplinary proceedings for staff are pari materia to the provisions of Orissa Civil Services (Classification, Control and Appeal) Rules, 1962. Similarly, Clause-41 of the Regulations, 1960 shows that the Orissa Travelling Allowance Rule, as amended from time to time by Government, shall be applicable to the employees of the Board accepting them as Government servant and under Clause-42 of the said Regulations, the employees of
- 16 -
the Board shall be governed by the Orissa Leave Rules, 1939. The employees of the Board under Clause-70 of the Regulations, 1960 shall be subject to the same rules of conduct as are applicable to Government servants. All these provisions of the Act, 1955, Rules, 1956 and Regulations, 1960 only show that the employees of the Board are absolutely controlled by the conditions of service as applicable to the State Government employees including the pay, allowances, leaves, proceedings and other ancillary matters.
24. It is admitted fact that the employees of the Board have been already paid the pay and allowances as per the ORSP Rules made from time to time. Not only this but also the opposite parties have also admitted at paragraph-25 of their counter affidavit that they have already implemented ORSP Rules, 1998 and 2008 in favour of the employees of the Board. If it is admitted that they have implemented ORSP Rules, 1998 and 2008 as it is implemented to the employees of the State Government, the question of not making the employees of the Board at par with the State Government employees is a misnomer on the part of the learned Additional Government Advocate. On the other hand, the contention of Mr.Routray, learned Senior Advocate for the petitioner deserves approval.
25. In terms of the above discussion, the Court is of the view that the employees of the Board being at par with the employees of the State Government, they are entitled to the benefits under respective
- 17 -
ORSP Rules, 1998 and ORSP Rules, 2008 as accrued to the employees of the State Government. Point No.(I) is answered accordingly.
26. POINT No.(II) It is the contention of Mr.Routray, learned Senior Advocate for the petitioner that under Right to Information Act, 2005, they have collected information to the effect that the State Government has allowed the other statutory bodies, namely, Mahila Vikas Samabaya Nigam, State Social Welfare Board, State Haj Committee, State Wakf Board, Shri Jagannath Temple Administration, Utkal University, Orissa University of Agriculture and Technology and Odisha Water Supply and Sewerage Board to have been extended with the service benefits at par with the State Government employees and they have been given the benefit of ORSP Rules, 1998 and 2008 from the date these rules are applicable and the employees of the Board should not be discriminated. On the other hand, the opposite parties, in the Counter affidavit, have admitted to have allowed the benefit of ORSP Rules, 1998 and 2008 to the employees of the Board.
27. Learned Additional Government Advocate also brought the affidavit of the Chief Secretary of the State to the notice of the Court. This Court, on 26.07.2017, passed an order requesting the Chief Secretary of the State to convene a meeting of the concerned Secretary including the Finance Secretary and take a decision for payment of arrear salary of the employees of the Board, who are governed under the Act, 1955 and Regulations, 1960 at par with the State Government
- 18 -
employees. However, the Chief Secretary of the State held a meeting on 04.10.2017. Minutes of such meeting is available at Flag-J and on going through the same, it appears that the Government has already made its contribution in terms of the Grant-in-Aid for payment of enhanced salary to its employees under ORSP Rules, 1998 and 2008 with financial benefits with effect from 01.04.2000 and 01.04.2010 respectively. But at the same time, it is maintained that the condition of service which has not been prescribed in the service regulation are to be adopted from the Orissa Service Code with necessary changes which give inference that the employees of the Board are the Government employees of subordinate office having all benefits at par with the Government employees. Thus, the employees of the Board are to avail the service benefits mutatis mutandis to the employees of the State Government as and when the later avail the same.
28. Besides, the minutes of the meeting dated 04.10.2017 of Chief Secretary have got following observations, which are very important and the same are being reproduced in the following manner:
"xx xx xx xx V.There are other Boards/Organizations/Bodies & agencies which are similarly placed, where the grant-in-aid for salary or other purposes is provided as a supplement to their own resources, and which are guided by their own Rules/regulations. The employees of such grantee organizations cannot claim the status of Government employees nor can they claim grant-in-aid as a matter of right or in any particular manner. It will defeat the very purpose of creating such business organizations at arm's length from the Government with the power granted to Board of Management to manage their affairs, resources and funds.
Sd/-Chief Secretary, Odisha"
- 19 -
Aforesaid observation of Chief Secretary shows that the Grant-in-Aid for salary and other purpose of the employees of the Board cannot give a status of Government employee. In this regard, learned Senior Counsel for the petitioner submitted that the stand taken by the opposite parties was not same when the State Government extended the benefit of ORSP Rules, 1998 and 2008. Apart from this, the contention of the learned Senior Counsel for the petitioner that the benefit asked for has already been extended to other organizations specifically named has not been denied by the opposite parties. Of course, the aforesaid paragraph is not clear to show as to which organization being similarly placed has been asked to be maintained by Grant-in-Aid or any other sources, they have to find out. It is true that the organization has to make contribution from their income but the present question with regard to employees of the organization because the Act, 1955 itself is crystal clear to show that the contribution from the Board would be made available for the development of cottage industry and promoting Khadi Industry. But when there is specific Regulation giving power to the State Government to manage the employees of the Board of course with the approval of the Board, the question of payment of pay and other allowances of the employees from other income of the Board does not arise. Learned Additional Government Advocate submitted that it is the prerogative of the Government to decide from which date the Government would implement the Pay Commission recommendation. Apart from this, when
- 20 -
it is specifically admitted by the opposite parties that they have already allowed the benefit of ORSP Rules, 1998 and 2008 to the employees of the Board, the question arises as to whether they can be extended from the date 01.01.1996 and 01.01.2006 respectively or not.
29. Mr.Bhuyan, learned Additional Government Advocate, for the above submission, has relied upon the decision of the Hon'ble Supreme Court in the case of Union of India -V- Arjun Jyoti Kundu and others; (2007) 7 SCC 472 wherein at paragraph-19, it has been observed in the following manner:
"19.We are afraid that the tribunal has exceeded its jurisdiction in issuing the direction, it has issued. The fact that notwithstanding the Fifth Pay Commission not recommending, particularly, the payment of higher scale to two sets of typists, typists in English language and typists in Hindi language, the Government chose to give them relief with effect from 31.1.2000 would not justify an inference of discrimination or a finding that the authority has acted arbitrarily or unreasonably. As this Court has clarified in the decisions adverted to, it is for the Government to act on the report of the Pay Commission or either to accept or not to accept its recommendation. Once the recommendations of the pay commission are accepted, in full, it could also give effect to it from the date recommended in that behalf. But when admittedly no provision was made in respect of the English and Hindi typists and they pointed to the anomalies and the Government on the basis of the recommendation of the Anomalies Committees decided to give them the scale with effect from 31.1.2000, it could not be held to be discriminatory or to be beyond the power of the Government."
With due regard to the aforesaid decision, it appears that in that particular case, the Pay Commission has not made provisions for English and Hindi Typist for which the Anomaly Committee has to opine about benefit of Pay Commission to particular class of Government servant but at the same time Their Lordships have made it clear that once the recommendations of the Pay Commission are accepted in full, it could also give effect to it from the date recommended in that behalf.
- 21 -
Therefore, in the instant case, since the employees of the Board are treated at par with the employees of the Government and no Anomaly Committee has ever considered the case of the petitioner-Sangha, the observation of the Hon'ble Supreme Court in the case of Union of India
-V- Arjun Jyoti Kundu and others (Supra), that respective Pay Revision Rules would apply from the date the Pay Commission recommended and the opposite parties admitted about applicability of said ORSP Rules, 1998 and ORSP Rules, 2008 to the employees of the Board, the same have to be extended from the date of implementation to the employees of the Board qua the Government employees.
30. Moreover, whether the cut-off date would be required or not has already been decided by this Court on 30.08.2017 in a batch of cases, i.e., Mahendra Kumar Mohanty and State of Orissa and others (W.P.(C) No.20784 of 2014 and four other writ petitions) and paragraphs-18, 19 and 20 of that judgment is placed below in the following manner:
"18.The ORSP Rules, 1998 vide said Finance Department Resolution of 1998 was issued by the Government of Orissa in Finance Department on 03.06.1998 after being framed under Article 309 of the Constitution of India. When the Rules are framed under legislative process with effect from 01.01.1996, the Office Order dated 18.02.2009 vide Annexure-2 showing to be effective from 16.02.2009 by contradicting Clause-12 of the ORSP Rules, 1998 cannot stand in the eye of law because the Office Order cannot be inconsistent with the Rules framed by the Government. Moreover, ORSP Rules, 1998 is effective from 1.1.1996 although such Rule is framed in 1998.When ORSP Rules, 1998 is adopted by the Corporation in 2009, the ORSP Rules, 1998 would apply entirely to the employees of the Corporation. Any restriction by the Corporation by issuing Office Order dated 18.2.2009 inconsistent to ORSP Rules, 1998 would be de hors the law. It is trite in law that Office Order is not law whereas Rule framed is law as per Article 13(3)(a) of the Constitution of India.On the other hand, ORSP Rules, 1998 must be implemented from 01.01.1996 to the petitioners- employees of the Corporation but not prospectively.
- 22 -
19. The Hon'ble Supreme Court in the case of Vinod Kumar Koul -V-State of Jammu and Kashmir and others; AIR 2012 SC 3149, at paragraphs-10 and 12 have observed in the following manner:
"10.There is nothing in the language of Rule 13(i) or any other Rule from which it can be inferred that for the District cadre post only a permanent resident of the particular district can apply. Rather, Rule 13(i) postulates inviting of applications from the permanent residents of Jammu and Kashmir and not any particular district. Only in terms of clause (ii) of Rule 13 the candidature of a person who applies for more than one district can be considered for the district in which he is ordinarily residing. In our view, in the absence of any statutory stipulation in that regard, it cannot be said that a candidate who is a permanent resident of the State of Jammu and Kashmir is not eligible to be considered for a District cadre post merely because he is not a permanent resident of the particular District for which the post has been advertised.12.In our view, the administrative decision of the Board, which is ex facie inconsistent with the plain language of Rule 13(i), could not have been relied upon for determining eligibility of the appellant for appointment as Laboratory Assistant in District Udhampur...
Xx xx xx"
With due respect to the above decision, it appears that no administrative decision can override the statute and in the instant cases, the Office Order dated 18.02.2009 of the opposite party- Corporation cannot override the statutory Rules, i.e, ORSP Rules, 1998 by making such Rule prospective for the employees of the Corporation and restricting payment of arrear salary and other allowances
20.If the matter is analyzed in another angle, it must be placed on record that the ORSP Rules, 1998 has stated about revision of pay as available to the employees with effect from 1.1.1996. The Office Order dated 18.02.2009 although adopts the fitment of the scale of pay as per such ORSP Rules, 1998, but denies to give allowance on the pay and arrear salary which are not Tenets of such ORSP Rules, 1998.Thus, it fails to the logic to accept the contention of the opposite party-Corporation that the pay available in 2009 would not relate back to 1.1.1996. So, the Office Order dated 18.02.2009 issued by the Corporation is not only contrary to the Rules framed under the power conferred under the Constitution but also it is self contradictory and otiose one. On the other hand, ORSP Rules, 1998 as per its entire provisions being applicable to the employees of the Corporation including the petitioners would be effective from 01.01.1996. It is also revealed that the petitioners are all retired regular employees of the Corporation. Since they were working as on 1.1.1996 and ORSP Rules, 1998 even if adopted later on, on 16.2.2009 by the Corporation
- 23 -
would be effective from 01.01.1996, the petitioners are entitled to the benefit of ORSP Rules, 1998 from 1.1.1996 till their retirement."
The aforesaid decision of this Court, after analysis, made it clear in consonance with the principle of the Hon'ble Supreme Court in the above judgment that the Rules being framed by the State Legislature has to override any Government instruction in regard to fix up cut-off date for applicability of said ORSP Rules.
31. Learned Additional Government Advocate further submitted that the financial condition of the State must be taken into consideration to allow payment of arrear salary to the employees of the Board. But, in this regard, learned Senior Counsel for the petitioner, relying upon the decision of the Hon'ble Supreme Court in the case of Haryana State Minor Irrigation Tubewells Corporation and others -V- G.S. Uppal and others; (2008) 7 SCC 375, submitted that the financial crunch of the State Government cannot be taken into consideration to extend the benefit under ORSP Rules, 1998 and 2008. Their Lordships at paragraphs-33 and 34 of the said judgment have observed in the following manner:
"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 Corporation is running into losses, measures of economy, avoidance of frequent writing off of dues, reduction of posts or repatriating deputationists may provide the possible solution to the problem. Be that as it may, such a contention may not be available to the appellants in the light of the principle enunciated by this Court in M.M.R. Khan v. Union of India [1990 Supp. SCC 191] and Indian Overseas Bank v. I.O.B. Staff Canteen Workers' Union (2000) 4 SCC 245. However, so long as the posts do exist and are manned, there
- 24 -
appears to be no justification for granting the respondents a scale of pay lower than that sanctioned for those employees who are brought on deputation. In fact, the sequence of events, discussed above, clearly shows that the employees of the Corporation have been treated on a par with those in Government at the time of revision of scales of pay on every occasion.
34.It is an admitted position that the scales of pay were initially revised w.e.f. 01.04.1979 and thereafter on January 1, 1986. On both these occasions, the pay scales of the employees of the Corporation were treated and equated on a par with those in Government. It is thus an established fact that both were similarly situated. Thereafter, nothing appears to have happened which may justify the differential treatment. Thus, the Corporation cannot put forth financial loss as a ground only with regard to a limited category of employees. It cannot be said that the Corporation is financially sound insofar granting of revised pay scales to other employees is concerned, but finds financial constraints only when it comes to dealing with the respondents, who are similarly placed in the same category. Having regard to the well reasoned judgment of the Division Bench upholding the judgment and order of the learned Single Judge, we are of the view that the impugned judgment warrants no interference inasmuch as no illegality, infirmity or error of jurisdiction could be shown before us."
With due regard to the aforesaid decision, it is clear that financial inability or ability of the Government or Board cannot be a ground to deny the entitlement of the employees of the Board. Here, learned Additional Government Advocate for the State has not substantiated as to how the State is facing financial crunch to meet the payment of arrear salary, allowances and DA of the employees of the Board. So, the bald assertion by the State cannot be a ground to deny the right of the employees of the Board. He cited the decisions of the Hon'ble Supreme Court in the case of State of Assam -V- Barak Upatyaka D.U. Karmachari Sanstha; (2009) 5 SCC 694 and A.K. Bindal and another -V- Union of India and others; (2003) 5 SCC 163 and submitted that the Government would not be liable for
- 25 -
payment of salary and other dues of the employees of the Public Sector Undertakings.
32. Both the above referred cases are under the Industrial Disputes Act, 1947 and they are controlled by Company Law and Industrial Disputes Act, 1947 but in the instant case, the employees of the Board are sub-ordinate office of the State Government. So, the principles, as enunciated in those cases, are not applicable to the facts and circumstances of the case in hand.
33. It is reported in Bihar Rajya Khadi Gram Udyog Board Karyakarta Sangh and others -V- State of Bihar and others; AIR 1997 Patna 51 wherein Their Lordships of Patna High Court at Paragraphs 11 and 13 have observed in the following manner:
"11. Having regard to the scheme of the Act and the express provisions thereof, we are of the considered opinion that the State Government is obligated to meet the establishment expenses incurred by the Board in the performance of statutory functions. As we have observed earlier, the Board is constituted by the State Government, its members are appointed by the State Government who can be removed by the State Government. Similarly the Board can be dissolved by the State Government. After all, the duties enjoined upon the Board are performed by it with the assistance of its officers and servants, and express provisions have been made for the appointment of such officers and servants by the Board, but not without the approval of the State Government. Similarly in the matter of allocation of funds, a budget has to be prepared by the Board and approved by the State Government. All these lead to the irresistible conclusion that the obligation to meet the legitimate expenses of the Board cannot be denied by the State. It cannot be disputed that in the performance of its statutory functions; the Board has to maintain an establishment and necessarily incur expenses. If the objectives of the Act have to be achieved, such establishment has to be maintained by the Board and that necessarily implies an obligation to pay to the officers and servants of the Board the emoluments prescribed. Since the Board does not carry on any commercial activity so as to make a profit, nor does it perform any other function which may enable is to generate funds to meet its obligations, the overall control which is complete and is vested in the State Government, carries with it the obligations to meet the legitimate expenses incurred by the Board in the performance
- 26 -
of its statutory functions. Even the learned Advocate General could not contend otherwise, because admittedly the State has been allotting funds to the Board. The grievance of the petitioners is that the allocations so made are wholly insufficient to meet the obligations and the liabilities of the Board. The result is that its employees have to got without salary for months together.
xx xx xx xx
13. We, therefore, hold that where the State by enacted legislation creates an agency with enumerated functions, with the avowed purpose of achieving the declared objectives, the obligations that arise from the creating and maintenance of such an agency are implicitly the obligations of the State, more so when the provisions of the Act make explicit what is otherwise implicitly the obligation of the State. The obligation to maintain such an agency in the manner best suited to achieve the objectives, includes the liability which such agency is reasonably expected to incur in the normal discharge of its functions. If the agency is required to maintain an establishment to carry out its statutory functions, the expenses incurred in maintaining such establishment, by necessary implication, must be the liability of the State, unless the statute provides otherwise............"
With due regard to the aforesaid authority, it is made clear that for the employees of the Board, the State Government has got sole responsibility to maintain the same and to release the fund for the salary, allowances and DA for the staff of the Board. Applying the said principle to this case, the Court is of the view that the State Government has got responsibility and duty for payment of arrear salary, differential arrear salary along with other allowances and DA of the employees of the Board.
The aforesaid judgment of the Patna High Court was challenged before the Hon'ble Supreme Court by the State of Bihar vide Special Leave Petition (Civil) No.12348 of 1996 and the same was dismissed vide order dated 10.07.1996.
34. In terms of the above discussion, the Court is of the view that ORSP Rules, 1998 and 2008 being applicable to the Board, they are
- 27 -
applicable with effect from 01.01.1996 and 01.01.2006 as recommended under the said Rules itself and payment of arrear salary and allowances from such date. Point No.(II) is answered accordingly.
35. CONCLUSION It is prayed by the petitioner to direct the opposite parties to pay the arrear salary, DA and other consequential service benefits with effect from 01.01.1996 as per the ORSP Rules, 1998 and from 01.01.2006 as per the ORSP Rules, 2008 at par with the Government employees. At the same time, it has been prayed to direct for modification of the impugned orders dated 30.03.2001 and 06.01.2011 vide Annexures-14 and 25 respectively. In the aforesaid paragraphs, it has been held that the employees of the Board are to be extended the benefit of Government employees so far as pay, allowances and revision of scale of pay are concerned. It has also been observed that the employees of the Board are entitled to receive their revision of scale of pay as per the ORSP Rules, 1998 with effect from 01.01.1996 and as per the ORSP Rules, 2008 with effect from 01.01.2006. Annexures-14 and 25 issued by the opposite parties do not deny such entitlement.
36. Annexure-14 refers to the resolution of the State Government in Industries Department dated 30.03.2001 wherein the Government has extended the benefit of ORSP Rules, 1998 but it has been observed at paragraph-8 of the said resolution in the following manner:
"8. Even though revised scales of pay will be given effect to from 1.1.1996 for the purpose of pay fixation, the arrear from 1.1.1996 to 31.3.2003 shall not be paid. The differential
- 28 -
Revised pay will be paid only from 1.4.2000. The payment of arrear will be decided in consultation with Finance Department only when the financial condition of the O.K. & V.I. Board improves. But in no case Government shall provide any additional budgetary support to meet the additional expenditure liability on account of revision of scales of pay for the period from 1.1996 to 31.3.2000 or thereafter.
This has been concurred in by Finance Department vide their U.O.R. No.1486 dated 26.3.2001.
ORDER: Ordered that the Resolution be published in the Orissa Gazette for general information and copies be sent all Departments of Government/All Heads of Department/Secretary, O.K & V.I. Board."
Aforesaid Government order shows that differential arrear salary is to be paid from 01.04.2000 but not prior to that date.
Annexure-25 is the Office Order dated 06.01.2011 issued by the Government of Orissa in Industries Department, which is reproduced below:
"GOVERNMENT OF ORISSA INDUSTRIES DEPARTMENT ...
OFFICE ORDER No.IV-HCI-2/11-326/I, Bhubaneswar, dated 6th January, 2011.
Consequent upon revision of pay of the State Government employees as per Finance Department Resolution No.54080 dated 16.12.2008, the extension of revised scale of pay to the employees of the Orissa Khadi & Village Industries Board was under consideration of the State Government.
After careful consideration, Government have been pleased to revise the scale of pay of the employees of the OK & VI Board with effect from 01.04.2010 under the ambit of ORSP Rules, 2008.
The expenditure on revised scale of pay of employees of the OK & VI Board will be met out of the grant-in-aid sanctioned to the Board from time to time.
Before extension of the revised scale of pay to the employees of OK & VI Board, 15 Nos. Of existing base level vacant posts shall be abolished.
This has been concurred in by the Finance Department vide their UOR No.6239 dated 25.11.2010.
Sd/-T.Ramachandru Principal Secretary to Government"
Aforesaid Office Order dated 6.1.2011 vide Annexure-25 passed by the Government of Orissa in Industries Department refers to revision of scale of pay of the employees of the Board with effect from
- 29 -
01.01.2006 but differential arrear salary is to be paid from 01.04.2010 under the ambit of the ORSP Rules, 2008.
37. The aforesaid resolution and office order never made itself with regard to the payment of actual financial benefit from the date the ORSP Rules, 1998 and the ORSP Rules, 2008 direct. As directed hereinabove, the employees of the Board being entitled to the revision of scale of pay with effect from 01.01.1996 under the ORSP Rules, 1998 and with effect from 01.01.2006 under the ORSP Rules, 2008, they are entitled to actual arrear salary/differential arrear salary and allowances with effect from 01.01.1996 and 01.01.2006 respectively and Court also direct so. Thus, this Court further direct as hereunder:
(A) Annexures-14 and 25 be issued afresh by opposite parties by modifying paragraph-8 and paragraph-2 respectively therein to the effect that the employees of the Board, represented through its Sangha (Petitioner) are entitled to arrear salary or differential arrear salary with effect from 01.01.1996 and 01.01.2006 respectively;
(B) After necessary issuance of modified order, opposite parties are directed to release arrear salary/differential arrear salary, allowances including DA as prevalent under the respective ORSP Rules, 1998 and ORSP Rules, 2008 to the employees of the Board; and
- 30 -
(C) Entire exercise, as directed above, be
completed within a period of four months from
today.
The writ petition is disposed of accordingly.
...................................
Dr.D.P.Choudhury,J.
Orissa High Court, Cuttack Dated the 9th Feb,2018/B.Nayak