Uttarakhand High Court
Thdc Diploma Engineers Association And ... vs Union Of India And Another on 22 July, 2016
Bench: K.M. Joseph, V.K. Bist
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
WRIT PETITION (SB) No. 11 of 2014
THDC Diploma Engineers Association and others. ......Petitioners
Versus
Union of India and others. ......Respondents.
Mr. B.D. Upadhyay, Senior Advocate assisted by Mr. Naveen Tiwari, Advocate for the petitioners.
Mr. Rakesh Thapliyal, Assistant Solicitor General for Union of India / respondent no. 1.
Mr. Shobhit Saharia, Advocate for THDC / respondent no. 2.
Dated: 22.07.2016
Coram: Hon'ble K.M. Joseph, C.J.
Hon'ble V.K. Bist, J.
K.M. Joseph, C.J. (Oral) Prayers in the writ petition, as amended, are as follows:
"1. to issue a writ, order or direction in the nature of certiorari to call for the record of the case and quash the order dated 27-12-2013 passed by the respondent No. 1, contained in Annexure 1 to the writ petition.
2. to issue a writ, order or direction in the nature of mandamus directing the respondent No. 1 to reconsider the matter in accordance with law and remove the anomaly in pay scales of the Executive Category E-1 in the Respondent - Corporation and thereafter revise their salary w.e.f. 1.1.2007.
2-A. to issue a writ, order or direction in the nature of certiorari to call for the record of the case and quash the order dated 15-6-2006 passed by the respondent contained in annexure 16 to the writ petition. 2-B. to issue a writ, order or direction in the nature of mandamus directing the respondents to grant the same pay scale to the petitioner as it is being given to the employees of the NTPC in the corresponding category with effect category from 1-1-97 and thereafter revise the salary of the petitioners with effect from 1-1-2007."
2. The first petitioner is an Association of Diploma Engineers of the Tehri Hydro Development Corporation Limited (hereinafter referred to as the Corporation). Second petitioner is the President of the said Association and the third petitioner is the 2 Secretary of the said Association. The complaint substantially involved in this case relates to the pay-scales to be paid to the employees of the respondent Corporation, who are working in E-1 Category / Grade. In short, their complaint is that they are being paid amounts, which are below the category of S-4 (Supervisory Category), which is the category, from which persons are promoted to E-1 category and that their counterparts in NTPC are drawing higher amounts, which is despite the fact that the respondent Corporation has taken a stand that they are entitled to be paid amounts, which are higher than the amounts paid to those in the feeder category and also that they should be paid at par with the amounts being paid to their counterparts in NTPC. To resolve the controversy, it is necessary to set out certain facts:
Including the respondent Corporation, there are seven Central Public Sector Units coming under the Ministry of Power. They include NTPC and the Power Grid Corporation. The pay scale for the employees are governed by the guidelines issued by the Department of Public Enterprises (hereinafter referred to as DPE) from time to time. In regard to the employees of Board level posts and below the Board level posts (we are concerned with the latter category), it was contained in DPEOM dated 25.06.1999, which is produced as Annexure-8 along with the writ petition. In the said OM, it was, inter alia, provided as follows:
"PROCEDURE FOR APPROVAL AND ADOPTION OF NEW SCALES OF PAY ON IDA PATTERN BY PSEs
(a) PSEs which have been making profit consistently for the last 3 years viz. 1996-97, 1997-98 and 1998-99 would be allowed to adopt the scales of pay for the executives holding posts at and below the Board level and non-unionised supervisors strictly in accordance with these guidelines.
(b) PSEs which did not make profit during the last 3 years viz. 1996-97, 1997-98 and 1998-99 or had incurred net loss during any of these financial years would also be allowed to adopt these scales of pay of their executives holding posts at and below the Board level and non-3
unionised superviors with the approval of the Government i.e. the administrative Ministry acting in consultation with the DPE, provided they give an estimate as to how resources would be generated by them to meet the extra expenditure.
(c) In respect of sick enterprises referred to BIFR, revision of pay scales for all employees following IDA pattern would be strictly in accordance with the rehabilitation packages approved or to be approved by the BIFR and after providing for the additional expenditure on account of pay revision in these packages.
(d) PSEs under construction or new PSEs should submit their proposals for adoption of revised scales of pay and DA pattern for their executives holding posts at the Board level, below Board level and non-unionised supervisors, to their administrative Ministries for appropriate approval in consultation with the DPE, giving details of their likely date of going on commercial production, etc.
(e) The conditions prescribed for Sixth Wage Negotiations of unionized workers in DPE's OM No. 2(11)/96-DPE(WC) dated 14.1.1999 shall be applicable for the above pay revision.
(f) DPE will issue detailed instructions, wherever necessary regarding the matters dealt with in the Note."
3. The case of the respondent Corporation, as revealed from its Affidavits, appears to be, in short, as follows:
From its inception (1989) till 1997, it had followed and adopted the pay-scales of NTPC for all its employees; this decision had the approval of the Board of Directors and also the Ministry of Power, it is alleged. It is their case that the revision of pay-scales in THDCIL with effect from 1987 as well as from 01.01.1992 was duly approved by the Ministry of Power, Government of India, on NTPC pattern. Taking note of the revision of scales of pay in NTPC in July, 2000, the Board, in its 74th meeting held on 21.08.2000, approved the scales of pay in THDCIL on NTPC lines and authorised Chief Managing Director to forward the proposal to MOP for its approval. The same was forwarded by letter dated 25.8.2000 giving the reasons. It is pointed out that the pay scales proposed in the above proposal for E-1 Grade in THDCIL was ` 10750-16750, which was at par with NTPC pay scales. There was constant request for implementation of 4 the pay-scales. Accordingly, at the 77th meeting took place on 05.10.2000, it decided to approve provisional payment of arrears calculated for the period from 01.01.1997 to 30.09.2000 to Executives equal to 90 per cent of the actual on the basis of pay-scales as approved by the Board in their 74th meeting (on NTPC line) or 100 per cent of the actual arrears as an ad hoc advance based on DPE pay-
scales, whichever is lower. Following the demand of the Association, in its 96th meeting held on 27.05.2003, the Board considered revision of scales in respect of Executives and decided to provisionally implement DPE scales of pay, pending approval of Government. The pay scale of E-1 category in DPE scales of pay is `8600-250-14600. It is thereafter that Annexure-16 dated 15.06.2006 was issued by the Government of India, which reads as follows:
"New Delhi, dated 13/15 June 2006 To, CMD, THDC, Rishikesh Sub: Revision of pay scale of employees in Supervisory category w.e.f. 01.01.1997.
Sir, I am directed to refer to your letter no. THDC / CP /103 / 709 dated 03-06-2006 on the above subject and to say that the proposal for revision of pay scales of Executive below Board level and Supervisors in THDC has to be in lines with the guidelines issued by the Department of Public Enterprises vide their O.M. No. 2 (49)/98 DPE (WC) dated 25-06-1999 based on recommendation of Justice Mohan Committee.
It is, therefore, requested that the proposal for revision of pay scales of Executive below Board level w.e.f. 01.01.1997 be formulated on the lines of NHPC and sent to this Ministry with the approval of the Board of Directors certifying that it does not come in conflict with the above DPE's guidelines so that a compassionate view could be taken.
Thanking you.
Your faithfully (Meher Chand Jhamb) Under Secretary to the Govt. of India"5
4. It is in response to the same that Annexure-17 dated 04.08.2006 was sent by the respondent Corporation. It reads as follows:
"Tehri Hydro Development Corporation Ltd.
(A Joint Venture of Govt. of India & Govt. of U.P.) No.THDC/CP/Policy /103 /1184 Dated: 04.08.2006 Shri M.C. Jhamb Under Secretary to the Govt. of India, Ministry of Power, Shram Shakti Bhawan, NEW DELHI.
Subject: Revision of Scales of Pay w.e.f.
01.01.1997 in respect of Supervisors and Executives of THDC.
Sir, The Board of Directors in their 74th Meeting had approved adoption of the revised Scales of Pay of Executives (below Board level) w.e.f. 01.01.1997. Accordingly, the proposal was forwarded to MOP vide our letter No. THDC / P (1)-326 /517 dated 25.08.2000 (copy enclosed for ready reference). Vide MOP letter dated 28.02.2006, it was desired to certify that there is no conflict in the wage revision of Officers and non- Unionized Supervisors. Kind reference is also invited to letter dated 15th June, 2006 on the above subject suggesting that the proposal of revision of Pay Scales of Executives (below Board Level) w.e.f. 01.01.1997 be formulated on the lines of NHPC and sent to the Ministry after approval of the Board of Directors certifying that the scales so proposed do not come in conflict with the DPE Guidelines. In this context, the following is submitted:-
1. Pending revision of Scales of Pay with effect from 01.01.1997, Supervisors and below Board level Executives in THDC are being paid provisionally as under:-
a. Supervisors Scales
Grade Scales of Pay w.e.f. 01.01.1997 as Remarks
approved by BOD and forwarded
to MOP
S-1 Rs. 7300-3.5%-12660 At present
Supervisors are
S-2 Rs.7900-3.5%-13700
provisionally being
6
S-3 Rs. 8600-3.5%-14920 paid 90% of the
scales approved by
S-4 Rs. 9300-3.5%-15590
BOD.
b. Provisional Scales of Executives
Grade Provisional Scales of Pay w.e.f. 01.01.1997, approved
by BOD in its 96th Meeting
E-1 Rs. 8600-250-14600
E-2 Rs. 10750-300-16750
E-3 Rs. 13750-350-18650
E-4 Rs. 16000-400-20800
E-5 Rs. 17500-400-22300
E-6 Rs. 18500-450-23900
E-7 Rs. 19000-450-24400
E-7A Rs. 19500-475-25200
E-8 20500-500-26500
E-9 21500-550-27000
2. The pay Scales of Supervisors effective from 01.01.1997 as adopted by NHPC is given below:
Grade NHPC Scales of Pay w.e.f. 01.01.1997 S-1 Rs. 7900-3.5% -13700 S-2 Rs. 8600-3.5%-14920 S-3 Rs. 9300-3.5%-15590 Selection Rs. 10000-4%-16000 Gade The revised Scales of Pay of below Board level Executives, as approved by Ministry of Power vide letter dt. 04.04.2006 and implemented by NHPC is given below:-
Grade Modified Pay scales of NHPC w.e.f. 01.01.1997 as contained in their Office Order dated 09.05.2006 E-1 8000-290-300-330(2)-350-360-370-410-420-440-460- 470-480-13400 E-2 8600-330(2)-350-370-380-400-420-430-450-470-490- 7 510-530-540-14600 E-2A 10750-420-430-450-470-490(2)-530-540(3)-550(2)-
16750
E-3 13750-550-575-600-610-620-625-685(2)-18700
E-4 16000-660-685(4)-700(2)-20800
E-5 17500-630-685(2)-700(4)-22300
E-6 18500-700(2)-730-750-780-850-890-23900
E-7 19500-750-810-845-880-910-945-960-25600
E-8 20500-670(2)-850-900-950-980(2)-26500
E-9 23750-900-950-980(2)-990-28550
3. As suggested by MOP, for formulating the Pay Scales of below Board Level Executives on the lines of NHPC, following anomalies are foreseen:
i) It may be observed from the above that the Pay Scales of Supervisors in the level of S2 grade is higher than the Scales of Pay of Executives in E1 grade.
It is an accepted principle and practice to place a person on promotion to a grade higher than that in which he was working prior to his promotion, it may not be justified to promote a person and place him in a grade of pay which is lower than what he was enjoying before promotion.
A situation which will arise by adopting the above Scales in THDC.
ii) Having followed the NTPC structure of pay for below Board Level Executives in THDC from its date of incorporation and the revision of 01.01.1992 pay scales on NTPC lines (with the approval of Government of India), i.e. in the previous two wage revisions, three always existed certain irreconcilable differences between the pay structures of THDC with that of NHPC. For example, from E-1 to E-3 grades, NHPC maintains 04 grades viz. E-1, E-2, E-2A and E-3, whereas in THDC there are only 03 grades i.e. E1, E2(E2A of NHPC) and E3, in NHPC an executive in the E-6 grade is promoted to E-7 grade which is equivalent to E-7A grade in THDC, whereas in THDC there is regular grade of E-7 (Deputy General Manager) between E-6 and E-7A, which is in vogue since inception of the Corporation.
Because of these structural differences in pay scales, the provisional scale of pay effective from 01.01.1997 adopted by THDC was different from those adopted by NHPC so far as E-1, E-2, E-7A and E-9 grades are concerned. For instance NHPC provisionally 8 revised their E-1 scale of pay of 3700-175-7025 to 8000- 225-13400 whereas THDC revised it to 8600-250-14600. Incidentally, it may be stated that neither the pre-revised scale of 3700-175-7025 nor the revised scale of 8000- 225-13400 as prevailing in NHPC was provided in DPE's Guidelines for revision of pay scales effective from 01.01.1992 and 01.01.1997 respectively. Again, the Scale of Pay of E-9 grade in NHPC is higher than the scale of pay of Functional Directors in THDC.
iii) At this stage it is felt that several anomalies as above would emerge incase it is decided to implement the scale of pay of Executives of NHPC in THDC.
The pay revision has been kept in abeyance since a long time and the employees have been venting their anxiety in various communications.
The above may please be considered and we be advised accordingly.
Thanking you.
Yours faithfully (Chetan Sharma) Sr. Manager (Personnel)"
5. There were repeated requests and correspondence, but there was no response by the Ministry of Power. In the light of this, the Board, in its 129th Meeting held on 29.03.2007, approved the revision of scales of pay of Executives in the lines of NHPC and forwarded the same to MOP on 31.03.2007 vide Annexure No. SA-6.
6. While so, it is the further case of the respondent Corporation that it had submitted two proposals for wage revision; one covered by the 74th Meeting of the Board of Directors and the another was covered by the 129th Meeting held on 29.03.2007. It is also the case that finally in 136th Meeting held on 12.03.2008, provisional implementation of the revised scales of pay in respect of Executives on NHPC pattern was approved. Finally, by Annexure-1 dated 27.12.2013, Ministry of Power, Government of India has passed the following order:
"IMMEDIATE NO. 11/17/2009-NHPC/Vol.III 9 Government of India Ministry of Power Shram Shakti Bhawan, Rafi Marg, New Delhi, 27.12.2013
1. Chairman & Managing 2. Chairman & Managing Director, NHPC Limited, Sector- Director SJVN Ltd., HIMFED 33, Faridabad Building, NEW SHIMLA-171009
3. Chairman & Managing 4. Chairman & Managing Director Tehri Hydro Director NEEPCO Ltd. Development Corpn. Ltd. Brookland Compound, Lower Pragatipuram, Bypass Road, New Colony, Shillong-793003 Rishikesh (Uttarakhand)-249201
5. Chairman & Managing Director, Rural Electrification Corporation, CGO Complex, New Delhi Sub: Pay Scales of below Board Level Executives in Rural Electrification Corporation Ltd., NHPC, North East Electric Power Corporation, THDC India Ltd. and SJVN Ltd. w.e.f. 01.01.1997 Sir, I am directed to state that regularization of deviated pay scales adopted in respect of below Board Level Executives in Rural Electrification Corporation Ltd., NHPC Ltd., North East Electric Power Corporation, THDC India Ltd and SJVN Ltd. w.e.f. 01.01.1997 has been under consideration of the Government. The Competent Authority, after consideration of the matter, has approved the following:-
(i) The deviant pay scales fixed w.e.f. 01.01.1997 shall not be regularized.
(ii) However, no recovery shall be made for the excess pay drawn from 01.01.1997 onwards considering the difficulties in effecting recovery and also considering that such a recovery may deviate the staff.
(iii) The pay scales shall be fitted w.e.f. 01.01.2007 after correcting the aberration in pay scales fixed w.e.f. 01.01.1997.
2. The aforesaid CPSUs are accordingly directed to ensure implementation of the above decisions including revision of pay scales etc. w.e.f. 01.01.2007 as per the guidelines laid down by Department of Public Enterprise.
Yours faithfully (S.S. Rawat) Under Secretary to the Government of India 10 e-mail: [email protected]"
7. Annexure-1 dated 27.12.2013 and Annexure -16 dated 15.06.2006 are challenged by the petitioners. Petitioners also seek a direction that they be paid with effect from 01.01.1997, at the rate, as is being paid to their counterparts in NTPC. They also seek still further consequential revision of their pay scales from 01.01.2007 on the aforesaid basis.
8. Sri B.D. Upadhyay, learned Senior Counsel for the petitioners would address us primarily on the basis that there is a clear violation of Article 14 of the Constitution of India. He would point to Annexure No. 9; Annexure No. 9 relates to the pay-scales of employees working in S-4 category (supervisory category). There, he contrasts the pay-scale of E-1 category, which is evident from Annexure No. 10 and he would point out that contrary to the principle of Service Jurisprudence, a person, who is promoted, should be paid higher than the person, who is working in the lower category. Persons, who are working in S-4 category are getting higher amounts than the persons in E-1 category, from which latter category, the complaint arises in this writ petition. There is also reference to Annexure No. 13; Annexure -13 is an order dated 05.04.2011, by which the respondent Corporation has revised the pay scale of Executive Category (E-1) with effect from 01.01.2007 from `8000 -13400 to Rs. 16400-40500. The scales of pay, which are ordered in favour of the persons working in NTPC, are contrasted with the employees with the respondent Corporation, and it is complained that there is a lot of difference in the pay scales. In paragraph 26 of the writ petition, it is specifically averred as follows :-
"26. That the work, duties and responsibilities of the employees of E-1 category working in the Respondent- Corporation as well as employees working under category E-1 in the NTPC is same, as such, even under Article 39(d) of the Constitution of India, the employees under E-1 category of the Respondent Corporation are entitled for the same pay scales as 11 it is being given to the employees of NTPC and other Corporations."
9. Learned Senior Counsel, in this context, drew our attention to the judgment of the Hon'ble Apex Court in Employees of Tannery & Footwear Corporation of India Ltd. and another vs. Union of India and others reported in AIR 1991 SC 1367. Therein, the Hon'ble Apex Court was dealing with the case of discrimination alleged between the two Corporations coming under the Government of India in the matter of their pay scales for four categories of workmen. The Court took the view that it is undisputable that at one stage in 1970, the pay scales of the employees in the above four categories in the respondent Corporation therein as well as the Cotton Corporation were identical. Thereafter, the Court proceeded to hold as follows:
"14. It has been urged on behalf of the respondents that respondent-corporation and the Cotton Corporation of India are distinct legal entities carrying on different trading activities and the petitioners cannot claim parity in pay-scales with the employees in the Cotton Corporation of India and that the principal of equal pay for equal work cannot be invoked. It is no doubt true that the respondent-corporation and the Cotton Corporation of India, are distinct legal entities. But at the same time it cannot be ignored that both are instrumentalities of the Government of India who is bound by the directives contained in Para IV of the Constitution."
10. The Court noted that over a period of time, the employees of the Cotton Corporation came to get more than their counterparts working in the petitioner Corporation. The Court proceeded to finally hold as follows:
"16. State of U.P. v. J.P. Chaurasia (AIR 1989 SC 19) (supra) on which reliance has been placed by Shri Mahajan deals with the question as to equation of duties and responsibilities for applying the principle of 'equal pay for equal work'. Therein this Court has held that the matter of equation of posts for the purpose of equation of pay must be left to the executives and must be determined by expert bodies like Pay Commission and that if there is such a determination by a Commission or 12 Committee the Court should normally accept it. The principle laid down in the said decision was reiterated in the other decisions relied upon by Shri Mahajan. Here we are not concerned with equation of posts because the posts falling in the abovementioned four categories of employees in the respondent-corporation as well as the Cotton Corporation of India are of the same level and employees working on these posts were having the same pay-scales in 1970. There is nothing on record to show that after 1970 there has been any change in the duties and functions of the persons holding these posts in the two corporations which may justify fixation of different pay-scales for these posts in the two corporations. The pay-scales of the petitioners as revised by order dated April 25, 1986, cannot, therefore, be upheld. The respondents Nos. 1 and 3 should so revise the pay-scales enjoyed by the employees falling in the same category in the Cotton Corporation of India on the date from which the said revised pay-scales are to be applied. Under order dated April 25, 1986, the revision of the pay-scales of the petitioners has been made with effect from August 1, 1983 and is valid up to July 31,1987. The revision in the pay-scales of the petitioners should be made keeping in view the pay-scales and allowances enjoyed by the employees falling in the same category in the Cotton Corporation of India on August 1, 1983 and such revision may be made operative up to July 31, 1987, as provided in the order date April 25, 1986.
17. In the result, the writ petitions are allowed to the extent that respondents Nos. 1 and 3 are directed to suitably modify the order dated April 25, 1986 with regard to revision of the pay-scales and allowances of the employees in the unionized cadre in the respondent-
corporation in a way that the revised pay-scales and allowances of the four categories of the employees in the said cadres are at par with the pay-scales and allowances of such staff employed with the Cotton Corporation of India on August 1, 1983. The said revision should be made within a period of three months and the arrears found payable as a result of such revision be paid to the employees within three months of such revision. The parties are left to bear their own costs in these writ petitions."
11. Learned Senior Counsel also drew our attention to a Draft Note, which is prepared by the Ministry of Law & Justice, which came to notice the inequality produced and the discrimination, which is practised. The same is as under:
13"FTS No.3639/Adv.B Ministry of Law & Justice Department of Legal Affairs.FTS No. 3639/2012
Ministry of Power has forwarded a draft Note for the Cabinet on the proposal for regularization of pay scales of below Board Level Executives in Rural Electrification Corporation Ltd. (REC), NHPC Ltd., North Eastern Electric Power Corporation (NEEPCO), THDC India Ltd. and SJVN Ltd. w.e.f. 1.1.1997 for examination from legal and constitutional angles.
2. Brief facts of the case are that there are 7 Central Public Sector Enterprises (CPSEs) under the administrative control of the Ministry of Power. The pay scales of the CPSEs are governed by guidelines from time to time by the Department of Public Enterprises (DPE). The guidelines for the Board level posts and below Board level posts are contained in the DPE's O.M. dated 25.6.1999. Perusal of the Note further reveals that after revision made on 1.1.1992, the next pay revision fell due on 1.1.1997. Based on Justice S. Mohan, Supreme Court Judge (Retired)'s recommendations, the Government revised the pay-scales w.e.f. 1.1.1997.
3. Perusal of the Note further reveals that the pay scales of the three CPSEs viz. NTPC, PFC and PGCIL were allowed to be in deviation of the DPE pay scales.
The remaining 5 CPSEs moved from time to time the Ministry of Power and DPE but the Government (Ministry of Power) did not upgrade their pay-scales to bring the same at par with those of the aforementioned three CPSEs on the ground that the pay-scales proposed by these three CPSEs were at variance from those prescribed by the DPE. Perusal, further, reveals that these 5 CPSEs also revised their pay-scales in respect of the below board level executives (vide comparative statement at Annexure - II).
4. Subsequently the Government of India vide O.M. dated 26.11.2008 issued guidelines for revision of pay- scales for executives in CPSEs w.e.f. 1.11.2007. Presidential directives to all CPSEs were also issued on 30.4.2009, inter alia, with directive that it must be ensured that there is no aberration from the DPE guidelines during the implementation of the present pay revision. Since the pay-scales implemented by these CPSEs (5 Nos.) w.e.f. 1.1.1997 have not been regularized, these CPSEs faced difficulty in implementing the new 14 pay-scales w.e.f. 1.1.2007. On the issue of regularization/removal of aberrations so that the pay- scales of all the CPSEs are made at par, references were made to the DPE etc. but the same were not agreed upon as the proposal was in deviation of the standard DPE scales.
5. Perusal further reveals that the matter was also taken up to the Cabinet and the Cabinet deferred the matter. Perusal of the Note and the necessary papers made available reveals that at no stage advice of the Department of Legal Affairs was obtained. It has also been mentioned that the Cabinet Secretariat instead of listing the matter before the Cabinet directed that the matter may be considered by the Committee of Secretaries. It appears that a Committee of officers held its meeting on 14.2.2012 and recommended that (i) It may not be possible to regularize the deviant pay-scales fixed w.e.f. 01.01.1997; (ii) however, no recovery may be made for the excess pay drawn; and (iii) pay-scales may be fitted w.e.f. from 01.01.2007 after correcting the aberration in pay scales. It may be mentioned that it is not Committee of Secretaries as reflected in the Note for the Cabinet and the Committee of Secretaries has not considered the proposal.
6. Accordingly, it is proposed in the Note that the pay scales in respect of below board level executives adopted in REC, NHPC, SJVNL, THDC & NEEPCO w.e.f.
01.01.1997 may be regularized.
7. The Admn. Ministry vide their note at P. 2-3/N ante have clarified that there is no classification with regard to the pay-scales recommended by the Mohan Committee based on Schedule 'A', 'B', 'C' and 'D' or Navratna/Mini Ratna status given to the CPSEs.
8. We have examined the Note for Cabinet in the light of the facts and circumstances as explained therein and DPE guidelines. The Department of Expenditure and the DPE have not supported the proposal on the ground that the proposed regularization of pay-scales is in contravention of the DPE guidelines. Under the same Administrative Ministry there are two different pay- scales for 'similarly placed persons' i.e. for NTPC, PFC and PGCIL, the scales are allowed to be higher in contravention of the DPE guidelines. On the other hand, the afore-mentioned 5 CPSEs are prevented to bring the pay scales of their Executives at par with their counter- parts in the 3 CPSEs on the ground that the same are in deviation of the DPE guidelines. It violates provisions of 15 Art. 14 and 16 of the Constitution as there is no reasonable classification between the two categories nor there any rational nexus to be achieved by such classification. We feel that equality must be established either by bringing down the scales of the Executives of the three CPSEs or by regularizing the pay-scales of these 5 CPSEs so as to make their pay scales at par with those of the NTPC and others.
9. Subject to above, we may have no objection to the proposal as it relates to the policy of the Government.
(Suresh Chandra) Joint Secretary & Legal Adviser 24.12.2012"
Law Secretary
12. Therefore, he would contend that this a clear cut case, where there is discrimination and which has resulted in employees working in the Executive Category below Board Level getting pay below the persons working below them (S-4 category), the anomaly, which has been noticed by the respondent Corporation itself. This is a case, where the amounts were treated to have been patterned on what is being paid to employees of NTPC. The employees in NTPC in similar category are being paid much more, therefore, this discrimination is unjustifiable and the Court may, therefore, pass orders rectifying this injustice. It is also stated that the petitioners have also submitted Annexure 5, 6 and 7 representations.
13. Per contra, Mr. Rakesh Thapliyal, Assistant Solicitor General of India would point out the terms of the Office Memorandum dated 25.06.1999. Therein, as we have already noted, the Government of India has prescribed the manner in which the pay scales are to be implemented in the Public Sector Units. From the same, he would contend that Companies making profits, companies, which are not making profits or loss and companies, which are loss making are divided into three categories. He would point out that Annexure-17 dated 04.08.2006, which is sent by the respondent Corporation, does not give details, which are required to be given in terms of OM dated 25.06.1999. In other words, the Corporation has 16 not indicated as to how it would generate funds to defray the expenditure, which would follow the implementation of the pay scales. If the respondent Corporation was not making profit during the three years or it was making loss in any one year, it would fall in Paragraph 2 of what we have extracted and it would require the approval of Government of India also, after it gives details how it intends to generate funds for paying the amount. The same not having been complied with by the respondent Corporation, no blame will lie at the doorstep of the Government of India. In regard to the payment being made on a discriminatory basis qua the employees of NTPC, the learned Assistant Solicitor General of India would submit in one word that it is a 'Navratna company'.
14. As far as the learned counsel for the respondent Corporation is concerned, he would, in fact, submit today that there were Communications dated 11.09.2000, 16.08.2001 and 30.08.2001 addressed, which deal with the financial complications. We must notice that there is no such case set up in the Counter Affidavit or Supplementary Counter Affidavit. Of course, he would seek to justify non-inclusion of information with reference to the set of pleadings in the counter affidavit of the Government of India. The stand of the respondent Corporation would appear to be right throughout that they have adopted the pay-scales being paid to the employees in NTPC. The case set up in the Supplementary Counter Affidavit would also include that this was done to attract the employees to the Corporation.
15. As already noticed, by the Ministry of Law & Justice in the Draft Note, which we have adverted to, there are seven Public Sector Units dealing in the power sector coming under the Ministry of Power. The respondent Corporation is one of them. NTPC is the other. There is a definite case for the petitioner that they are doing the same work, with which we are concerned, as is being done by their counterparts in NTPC, but they are being paid differently. As already noted, the stand appears to have been that NTPC and two other Companies have been allowed to deviate from the guidelines being issued by the Department of Public Enterprises historically and they 17 have been paying more that what is provided by the department. The other units apparently were either falling in line or they have also been, as in the case of the respondent Corporation, adopting similar pay scale as was being paid by NTPC. Following the resolution passed by the Board of Directors in its 74th Meeting, the proposal was mooted and sent to the Department of Power for allowing payments to be made in lines of the amount being paid to the employees of NTPC. Thereafter, they were served with Annexure No. 16, which we have extracted by which respondent Corporation was asked to fall in line with the payments being made to NHPC. Apparently, the Board, which according to the learned counsel for the respondent Corporation is bound to follow the guidelines being issued, passed a resolution in the 129th Meeting of the Board dated 31.03.2007 and it decided also to implement the pay scales being paid in NHPC provisionally. So, according to the respondent Corporation, there are two proposals, which are actually pending.
16. The curtain has been wrung down on this controversy, as it were, by issuance of Annexure No. 1 dated 27.12.2013, by which the payments, which were made in deviation, were directed not to be recovered, but at the same time, the claim for regularization was turned down.
17. We have noticed the anomaly, which is prevalent in the respondent Corporation, pointedly with reference to the employees forming part of the Executives below the Board of Directors, namely, E-1 category. They are, in fact, being paid less than what the persons in the supervisory category (S-4) are getting. The promotions are being effected from S-4 to E-1. This indeed appears to us to be an anomalous position producing heartburn and injustice. It is apparently to rectify the same that the Board was laboring to pay E-1 pay scale, which is being paid to their counterparts in NTPC. There were two aspects to the case of the petitioner. On the one hand, DPE has issued the Guidelines dated 25.06.1999 providing for certain pay-scales; those making profits for years in question, they were free to adopt 18 these pay scale; whereas Corporations coming under the second category have to get approval of the Government of India and also to give reasons.
18. The other aspect is that NTPC is paying to its employees in excess of the amount which is stipulated by the Department of the Public Enterprises. The result of both is that the employees in E-1 category end up getting less than the employees in S-4 category. Both NTPC and the respondent Corporation are operating under the aegis of Ministry of Power, namely, the Administrative Ministry. Equals must be treated equally, as much as unequals must not be treated equally. This great mandate of the Constitution of India, which is recognized as the basic feature of the Constitution, would lose all its meaning if indeed the claim of the petitioners is that they are doing similar work as their counterparts in NTPC are doing and are treated differently. No doubt, the argument, which is raised by the learned Asst. Solicitor General, centers around the word 'Navratna', an adjective added to NTPC. According to Mr. Shobhit Saharia, the respondent Corporation is a Mini Ratna and is making profits now.
19. In fact, Mr. Shobhit Saharia would mention that there are four categories mentioned in DPE's OM dated 25.06.1999, and as far as the respondent Corporation is concerned, it was actually falling under Clause D as it was under construction during the period, which is mentioned therein.
20. In Annexure no. 17, the respondent Corporation has highlighted the problems even though in that it may not have laid out the plans as to how it will generate funds for paying employees.
21. The aspect relating to the capacity to pay, whether they are discharging identical functions, the historical perspective of the employees in E-1 category being paid over the years at par with their counterparts in NTPC; the aspect of the persons in the lower category getting higher pay than those working in the promoted category are all aspects which do not find any reflection in the impugned order (Annexure 1). Bereft of any reason, the order, in our view does not commend itself to us as one, which would have passed muster 19 particularly, when there is a serious challenge raised against it being in violation of Article 14 of the Constitution of India. Even proceeding on the basis of the materials in the case, as pleaded, and proceeding on the basis that the respondent Corporation did not furnish information in terms of the order dated 25.06.1999, the contention remains that in comparison with employees of NTPC, the employees, whose cause is espoused by the petitioners, are being discriminated against, does not appear to have engaged the attention of the Government of India, when it passed Annexure No. 1. In this regard, we notice the Note prepared by the Ministry of Law & Justice under the very same Government, which is to the effect and substance that the inequality must be eliminated either by reducing the pay scales being paid to those working in NTPC or that the employees working in the other Corporation must receive higher pay. We would, therefore, think that the interest of justice clearly requires that the matter must be reconsidered by the Government of India. Accordingly, the writ petition is allowed in the following manner :-
Annexure No. 1 will stand quashed insofar as it relates to the respondent Corporation. In order to enable it to properly consider the matter taking into consideration all relevant aspects, Annexure-16 will also stand quashed and a decision will be taken within a period of three months from the date of production of a certified copy of this judgment.
22. We make it abundantly clear that the first respondent may call for any information, which is relevant, from the second respondent and the second respondent will certainly supply such information.
(V.K. Bist, J.) (K.M. Joseph, C.J.)
22.07.2016 22.07.2016
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