Central Administrative Tribunal - Delhi
Opto Electronics Factory vs Union Of India on 12 November, 2025
OPEN COURT
CENTRAL ADMINISTRATIVE TRIBUNAL
NAINITAL CIRCUIT BENCH, NEW DELHI.
(This the 12th day of November, 2025)
Original Application No.1948/2025
Hon'ble Mr. M. Swaminathan, Member (Judicial)
Hon'ble Mr. Anjani Nandan Sharan, Member (Administrative)
1. Employees Union Opto Electronic Factory, Raipur,
Dehradun (Uttarakhand)- through its President Vinay Mittal, aged
about 57 years, S/o Late Shri Ram Prasad posted as MCM
(Personal No.500856), R/o House No. 1/1, Ganesh Lok Colony,
Ladpur, Raipur Road, Dehradun (Uttarakhand).
2. Vijay Singh Rana, aged about 58 years, S/o Ajmer Singh
Rana, Posted as MCM (Personal No.500813), R/o Vivekanand
Gram Joggiwala, Dehradun (Uttarakhand).
.....Applicants
By Advocate: Shri Ashok Kumar Singh
Ms. Rekha Singh
VERSUS
1. Union of India through Secretary, Department of Defence
Production, Ministry of Defence, Government of India, New Delhi-
110001.
2. The General Manager, Opto Electronics Factory, Raipur,
Dehradun-248008. (Uttarakhand).
3. The Chief Managing Director, India Optel Limited,
Registered and Corporate Office C/o Opto Electronic Factory,
Raipur, District Dehradun-248008, Uttarakhand (India).
4. Directorate of Ordnance (Co-ordination & Services) through
it's Director General, 10-A, Shaheed Khudiram Bose Road,
Kolkata-700001.
. . .Respondents
By Advocate: Shri T. C. Aggarwal
2
ORDER
By Hon'ble Mr. M. Swaminathan, Member (Judicial) Heard Shri Kishore Rai, learned counsel for the applicant and Shri T. C. Aggarwal, learned counsel for the respondents.
2. This Original Application u/s 19 of the Administrative Tribunal Act, 1985 has been filed seeking following relief:-
... "1. To quash the vide impugned order dated 23.12.2023 issued by 2nd Respondent
2.Leave may be granted to applicants to file this Original Application jointly under Rule 4(5)(b) of Central Administrative Tribunal (Procedure) Rules, 1987 as because the concerned union is making this Original Application and their members are employees of concerned ordnance factory. Therefore under Rules, Application is permissible. said 1987, current Original
3.To pass an appropriate order directing upon the Respondents to extend the benefit of inclusion of various allowances i.e. HRA, TA & SFA etc. while calculating OTA, provisionally to the applicants with (Annexure-A-4 to retrospective effect i.e. w.e.f. 01.01.2006 in terms of directions given by Hon'ble Madras High Court in Order dated 30.11.2011 Compilation No.II to O.A.) in terms of direction given by Hon'ble Central Administrative Tribunal (PB) New Delhi in order dated 25.4.2018 (Annexure-A-6 to Compilation No.II to O.A.).
4.To pass order for any relief to applicants which this Hon'ble Tribunal may deem fit and proper in the present facts and circumstances of this Original Application.
5.Award the cost of the petition (Original Application).
3. The facts of the case, as submitted by the applicants, are that the Applicants (Union and an individual employee) are members of a registered employees' union of the second Respondent, a Government of India factory, and seek the same relief for all 879- odd members of their union. They state that they have always received overtime allowance when detained beyond the normal Page 2 of 10 3 weekly working hours (48 hours) and that this overtime was calculated by including allowances such as HRA, TA, City Compensatory, Small Family Allowance, etc., consistent with Factories Act, 1948 (Section 59(2)). However, after the implementation of the 6th Pay Commission recommendations on 14.08.2008, the first Respondent issued an Office Memorandum dated 26.6.2009 excluding those allowances from the computation of overtime pay. Various unions (including in the Madras Bench of the Central Administrative Tribunal) challenged that memo; the Hon'ble Madras High Court allowed a writ petition on 30.11.2011 finding the exclusion impermissible, and the matter went up to the Hon'ble Supreme Court of India by special leave petitions, which are pending and have not stayed the Hon'ble High Court's decision. Meanwhile, a similar case (O.A. No. 650 of 2016) before the CAT, New Delhi succeeded on 25.4.2018 for employees of another Ordnance Factory, and that benefit has been extended to some 693 employees by Factory Order of 13.2.2019, but the Applicants state that they have been denied the same benefit by the second Respondent, despite being similarly situated under Section 59. They allege discrimination under Articles 14 and 16 of the Constitution, because the statutory expression "ordinary rate of wages" under Section 59(2) of the Factories Act includes allowances (other than bonus and overtime wages) and thus the exclusion by memo is unlawful. Feeling aggrieved by the actions of the respondents, the applicants have filed the present original application.
4. The main contention of the learned counsel for the applicant is that section 59 (2) of the Act 1948, specifically excludes only two items viz 'Bonus and Wages for overtime work', hence exclusion of admissible allowance like HRA, TA & SFA etc., by the 1st Page 3 of 10 4 respondent is impermissible in law as laid down by the Hon'ble Madras High Court in WP No.609/2011 & Batch of cases in its order dated 30.11.2011.
5. He further submitted that impugned order dated 23.12.2023, passed by the 2nd respondent is ex-facie, illegal, arbitrary unjustified not sustainable in the eyes of law as settled by the Hon'ble High Court of Madras and various bench of this Tribunal and the applicant are legally entitled for the benefits prayed from 01.01.2006. He relied on the Judgement of Hon'ble Madras High Court in WP No.609/2011, order dated 30.11.2011. Judgement of the CAT, Hyderabad bench in OA No.1372/2012, order dated 04.04.2014. Judgement of the CAT, Principal bench in OA No.650/2016, order dated 25.04.2018. Therefore, he prayed for the relief sought in the present OA.
6. Per contra the learned counsel for the respondent vehemently opposed the submission of the applicant and relied on the reply statement filed by him. He contended that the Hon'ble Madras High Court by its order dated 30.11.2011, failed to appreciate that the compensatory allowance including transport allowance, house rent allowance, conveyance allowance, clothing allowance, washing allowance etc., would not fall within the meaning of expression "ordinary rate of wages" for the purpose of entitlement to 'extra wages for over time' as mandated under section 59 (1) of the Factories Act 1948.
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7. He further submitted that compensatory allowance may not be indicated in wages for the purpose of calculation of 'overtime allowance' under section 59(2) of the Act which defines the 'ordinary rate of wages' means the basic wage plus such allowances, including the cash equivalent of food grains and other articles, as the worker is for the time being entitled to but does not include a bonus and wages for overtime work. He further submitted that the Judgement of the Hon'ble Madras has not reached finality and the same is pending before the Hon'ble Supreme Court in SLP No.12845-12822 of 2012. Therefore, he prayed for the dismissal of the OA.
8. The learned counsel for the applicant has filed Rejoinder reiterating the contentions raised in the original application.
9. We have heard both the parties at length, perused the pleadings and materials on record including the citations cited by the respective parties.
10. The issue involved in the present OA is that "whether while calculating Overtime Allowance, the following allowances such as HRA, TA, & SFA can be included or not"
11. As rightly contended by the learned counsel for the applicants, as per the definition of Sub Section(2) of Section 59 of Page 5 of 10 6 the Factories Act, calculating the 'ordinary rate of wages means, basic wages plus such allowances including the cash equivalent of the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is tor the time being entitled to, but does not include a bonus and wages for overtime work. In the absence of any rules governing the subject with regard to the exclusion of the abovesaid allowances, from the definition of ordinary rate of wages, as per Sub Section 2 of Section 59 of the Factories Act and when the applicants are catering the same all along, taking a decision by the 2nd respondent, which is contrary to the definition as contained in Sub Section 2 of Section 59 of the Factories Act, is unsustainable in law
12. We also find that the issue no more res integra and the Hon'ble Madras High Court has dealt the matter elaborately in Writ Petion No.609/2011 & Batch of cases, by order dated 30.11.2011 and the relevant portion of the judgement is extracted below:
" 14.We have gone through the entire materials placed on record. It is seen from the perusal of the records that aggrieved of the order passed by the Tribunal, wherein original applications were filed by the employees working in the third respondent factory challenging the order, dated 26.06.2009, issued by the first respondent, wherein House Rent Allowance, Travelling Allowance, Small Family Allowance were excluded from the overtime allowance for the purpose of computation of the same, the present writ petitions have been filed.
15. It is an admitted case that the third respondent factory is governed by the provisions ot the Factories Act. It is also the case of the employees that they are enjoying the overtime allowances all along and suddenly, a decision was taken to discontinue the payment of the aforesaid allowances by relying Page 6 of 10 7 on Section 59(2) of the Factories Act, wherein Wages and Allowances were defined, to the effect that 'ordinary rate of wages' means the basic wages plus such allowances, including the cash equivalent to the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work'. When the definition of the term, 'wages' specifically excludes bonus and overtime wages to calculate the overtime work and the aforesaid allowances were excluded only on the basis ot the opinion given by the legal advisor of the Ministry of Law and not in consultation with the Ministry of Law (Department of Legal Affairs), as requested by the Ministry of Labour, based on which, the Tribunal has dismissed the original applications by a common order dated 24.12.2010, which, in our considered opinion, is illegal.
1 6. As rightly contended by the learned counsel for the petitioners, as per the definition of Sub Section(2) of Section 59 of the Factories Act, calculating the 'ordinary rate of wages means, basic wages plus such allowances including the cash equivalent of the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work. In the absence of any rules governing the subject with regard to the exclusion of the above said allowances, from the definition of ordinary rate of wages, as per Sub Section 2 of Section 59 of the Factories Act and when the petitioners are catering the same all along, taking a decision, which is contrary to the definition as contained in Sub Section 2 of Section 59 of the Factories Act, is unsustainable in law 1 7. It is also seen from the perusal of the records that when the Ministry of Finance, through their official memorandum, dated 14.11.2002, has requested the Ministry of Labour to reconsider the matter in consultation with the Ministry of Law (Department of Legal Affairs), but after consulting with the legal advisor of the Ministry, the Ministry of Labour and Employment has issued the above memorandum, which in our considered opinion, is not legal, since consulting the Ministry of Law is different from consulting the legal advisor of the Ministry. We are unable to understand as to what is the legal sanctity attached to the advise given by the legal advisor of the Ministry to exclude the abovesaid allowances to calculate the basic rate of wages. In the absence of any rule to exclude the aforesaid allowances from the definition of the basic wage, when the Section excludes only two items, viz., bonus and wages tor overtime work, the action ot the first respondent in excluding the said allowances without any authority, but only based on the opinion expressed by the legal advisor of the concerned Department, which cannot be considered to be the power given to exclude those allowances, and also the order passed by the Tribunal in rejecting the claim made by the petitioners based on the aforesaid memorandum, are considered to be illegal and unsustainable in law.Page 7 of 10 8
18. For the foregoing reasons, the order passed by the Tribunal is liable to be set aside and it is, accordingly, set aside. The writ petitions are allowed. Connected M.Ps. are closed. However, there will be no order as to costs."
13. After the judgement of the Hon'ble Madras High Court, various CAT benches have allowed the appeal of those applicants and granted the relief. The CAT, Hyderabad Bench of the Tribunal has also passed a similar order dated 04.04.2014 in OA No.1372/2012 and the relevant portion of the order is extracted below:
"3. Having heard the applicant, party-in-person and the learned Additional Standing Counsel tor the Respondents and since the impugned order ot Respondent No.2 dated 26.6.2000 has already been quashed by the Hon' ble High Court of Madras though the Department preferred SLPs before the Hon' ble Apex Court, no stay was granted in the SLPs, we are of the considered view that the applicant is entitled to get the relief as prayed in the application.
4. Accordingly, the Respondents are directed to include all allowances such as HRA, TA and SFA in calculation of Over Time Allowance from .1 .2006.
5. In the result, the OA is allowed. No order as to costs."
14. Similar view was taken by the CAT, Principal Bench in OA No.650/2016, order dated 25.04.2018, and the relevant portion of the order is extracted below:
"Sub: Contempt Petition (Civil), No. 021 /002512015 arising out of OA No. 1372 of 2012 Ordnance Factory Civilian Employees Union Anr. V. LIOI &Ors.
Ref: GM/OF Medak DO No. 15/101 1 /VLC/LEGAL/2015 dated 29.04.2015.
Contents of the DO dated 29.04.2015 addressed to Member/Per on the subject has been examined and considered. It has been decided that O F Medak may provisionally implement CAT Hyderabad order dated 04.04.2014, subject to outcome of Writ Petition tiled Page 8 of 10 9 before the Hon'ble High Court and SLPs pending before the Hon 'ble Supreme Court."
"3. Having heard the applicant, party in-person and the learned Additional Standing Counsel for the Respondents and since the impugned order of Respondent No.2 dated 26.6.2009 has already been quashed by the Hon'ble High Court of Madras though the Department preferred SLPs before the Hon 'ble Apex Court, no stay was granted in SLPs, we are of the considered view that the applicant is entitled to get the relief as prayed in the application
4. Accordingly, the Respondents are directed to include all allowances such as HRA, TA and SFA in calculation ot Over Time Allowance from I .1 .2006.
5. In the result, the OA is allowed. No order as to costs."
In view of the aforementioned facts, I am of the considered view that the applicants are also entitled for similar consideration by the respondents as prayed for in the OA. The relief may be granted to them provisionally subject to the final outcome of the decision of the Hon' Apex Court in SLP Nos. 12845-12852/2012.
Accordingly, the O.A., as prayed for, is allowed. No costs.
15. In the said circumstance, we are of the considered opinion that the applicants have made out a case and in view of the same we set aside the impugned order dated 23.12.2023 issued by the 2 nd respondents. We also find that the applicants are similarly placed persons like the applicants in WP No.609/2011 (Hon'ble Madras High Court), OA No.1372/2012 (CAT- Hyderabad Bench) & in OA No.650/2016 (CAT, Principal Bench) and the applicants are entitled for similar relief as prayed for the in the present OA.
16. In the said scenario the relief sought by the applicants is granted to the applicants on submitting an undertaking to the Page 9 of 10 10 respondents, subject to the final outcome of the decision of the Hon'ble Apex Court in SLP Nos.12845 - 12852/2012.
17. In the result the OA is allowed as prayed for on the above terms. Parties to bear the costs.
NEELAM
KUMARI SINGH
(Anjani Nandan Sharan) (M. Swaminathan)
Member-A Member-J
/Neelam/
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