Gauhati High Court
Page No.# 1/14 vs The State Of Assam And 6 Ors on 12 June, 2025
Author: Soumitra Saikia
Bench: Soumitra Saikia
Page No.# 1/14
GAHC010067562022
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/2479/2022
KHADI BOARD KARMI SANGHA AND ANR
HAVING ITS OFFICE AT NIZARAPAR, CHANDMARI, GUWAHATI-781003,
ASSAM AND BEING REP.BY ITS SECRETARY SRI BIRENDRA BARUAH, S/O.
LT. G. BARUAH, R/O. LAKHIMI NAGAR, HATIGAON, GUWAHATI-781038,
ASSAM.
2: BIRENDRA BARUAH
S/O. LT. G. BARUAH
R/O. LAKHIMI NAGAR
HATIGAON
GUWAHATI-781038
ASSAM
VERSUS
THE STATE OF ASSAM AND 6 ORS
REP. BY THECHIEF SECRETARY, DISPUR, GUWAHATI-781006, ASSAM.
2:THE PRINCIPAL SECRETARY
FINANCE DEPTT.
GOVT. OF ASSAM
DISPUR
GUWAHATI-781006
ASSAM.
3:THE ADDL. CHIEF SECRETARY
HANDLOOM TEXTILE AND SERICULTURE DEPTT.
GOVT. OF ASSAM
DISPUR
GUWAHATI-781006
ASSAM.
Page No.# 2/14
4:THE SPECIAL COMMISSIONER AND SECRETARY
HANDLOOM TEXTILE AND SERICULTURE DEPTT.
GOVT. OF ASSAM
DISPUR
GUWAHATI-781006
ASSAM.
5:THE CHAIRMAN
ASSAM KHADI AND VILLAGE INDUSTRIES BOARD
MANIRAM DEWAN ROAD
CHANDMARI
GUWAHATI-781003
ASSAM.
6:THE CHIEF EXECUTIVE OFFICER
ASSAM KHADI AND VILLAGE INDUSTRIES BOARD
MANIRAM DEWAN ROAD
CHANDMARI
GUWAHATI-781003
ASSAM.
7:THE ACCOUNTANT GENERAL (AUDIT)
MAIDAMGAON
BELTOLA
GUWAHATI-781029
ASSAM
Advocate for the Petitioner : MR B D DAS, MR J LOTHA,MRS R DEKA,MR H K SARMA,MR
B D DAS,MR D DAS
Advocate for the Respondent : GA, ASSAM, SC, ASSAM KHADI AND VILLAGE INDUSTRIES
BOARD,SC, HANDLOOM AND TEXTILE,SC, AG,SC, FINANCE
BEFORE
HONOURABLE MR. JUSTICE SOUMITRA SAIKIA
ORDER
12.06.2025 Heard Mr. BD Das, learned Senior Counsel assisted by Mr. HK Sharma, Page No.# 3/14 learned counsel for the petitioners. Also heard Mr. R Dhar, learned Standing Counsel, Handloom and Textile, Ms. U. Sharma, learned State Counsel, Assam and Mr. B. Srhama, learned Standing Counsel, Accountant General.
2. The petitioner no.1, namely, Khadi Board Karmi Sangha is an Association representing the employees of the Khadi & Village Industries Board and is a registered trade union with the Office of the Registrar of Trade Unions, Assam. The petitioner no.1 is represented by the petitioner no. 2 i.e. the Secretary, namely, Shri Birendra Baruah. All the members of the petitioner's Association including the petitioner no.2 are citizens of India and are therefore entitled to all rights, protections and privileges guaranteed to the citizens of India.
3. The issue urged before this Court through the present proceedings is that the employees of the Khadi & Village Industries Board are entitled to revised pay under the Assam Services (Revision of Pay) Rules, 2017 and a direction be issued to the respondents to release all benefits as well as the arrears under the Assam Services (Revision of Pay) Rules, 2017. Mr. BD Das, learned Senior Counsel for the petitioners has urged before the Court that the Khadi Board was set up under the Assam Khadi and Village Industries Board Act 1955, inter alia, to promote Khadi and village Industries and to encourage trade, business, establish cooperative societies and impart training to people to equip them with Page No.# 4/14 necessary knowledge to start or carry on Khadi and Village Industries. Mr. BD Das, learned Senior Counsel for the petitioners refers to a Memo dated 13.10.1961 issued by the Planning Commission, Government of India requesting all State Governments to make State Khadi and Village Industries Boards a part of the administrative machinery of the State and to treat their expenditure involved in the maintenance of the staff of such Boards as a part of their non- plan expenditure or committed expenditure. It is submitted that the expenditure for maintenance of staff of the Assam Khadi and Village Industries was met from the normal budget of State and was not from the plan funds. As such, the expenditure incurred by the Board for payment of salaries of the staff on the Board has been met by the Government of Assam through the Grants-in-aid. By a communication dated 26.06.2002 issued by the Deputy Secretary to the Government of Assam, the Board was informed that the Public Enterprise Department is of the view that since Assam Khadi and Village Industries Board has predominantly a developmental and promotional role, the enterprise has been delisted from the list of public enterprises in Assam. It is the submission of learned Senior Counsel for the petitioners that the effect of this communication dated 26.06.2002 is that the Board has been always treated to be a part of the Government as a Government Department. It is submitted that in the year 2012, the Government of Assam, Department of Handloom, Textile and Page No.# 5/14 Sericulture had communicated a decision of the Government to allow implementation of the revised pay structure as per the Assam Services (Revision of Pay) Rules, 2010 to the employees of the Board. Since then the petitioner's association and its employees have been given the benefit of revised scale of pay under the Assam Services (Revision of Pay) Rules, 2010. For the year 2017- 18, a proposal for revised scale of pay for the employees of the petitioners' association was submitted. This was followed by a meeting of the Departmental officers and the representatives of the Government at the highest level. In the said meeting, the issue of grant of revised pay to the employees as per the 7 th Pay Commission was also a subject matter of the discussion. In the said meeting the Board was advised to submit proposal to the Secretariat Administration Department. Thereafter, the proposals were submitted but the benefit of revised scale of pay for the year in terms of the Assam Services (Revision of Pay) Rules, 2010 has not been issued. Being aggrieved, the petitioners approached this Court by filing WP(C) No. 1264 of 2019. This writ petition came to be disposed of by order dated 25.02.2019, whereby the respondent authorities were directed to examine the claim of the petitioner in the light of the decision taken by the authorities in the meeting held on 21.08.2018 and such a decision was directed to be taken within 2 (two) months from the date of the order. Subsequently, thereafter, by the impugned order Page No.# 6/14 dated 24.01.2022, the respondent authorities held that the Finance Department has no objection to the Cabinet Memorandum for revision of pay scales to the employees of the Board as proposed by the Department, subject to the conditions, inter alia, that the Board will bear the entire financial liabilities arising out of the revision of pay out of their own budget and no financial assistance will be given by the State Government for this purpose. In the said order it was also reflected that the accounts of the Board were not duly audited since the past 12 years with effect from 2006 and 2007 onwards. Learned Senior Counsel for the petitioners submits that this finding is incorrect on facts and the accounts of the Boards were duly audited and were up to date. Pursuant to the impugned order dated 24.01.2022, the Communications were also addressed to the Department of Handloom, Textile and Sericulture Department giving full details of the queries raised and with a request to accord government approval towards grant or revised pay scale as per the Assam Services (Revision of Pay) Rules, 2017. Since no such orders were forthcoming, the petitioners have approached this Court seeking a direction to the respondent authorities for implementation of the Assam Services (Revision of Pay) Rules, 2017.
4. In support of his contentions learned Senior Counsel for the petitioners has referred to the judgment of the Orissa High Court rendered in Orissa Khadi Page No.# 7/14 and Village Industries Board Karmachari Sangha vs. State of Orissa and Others [WP(C) no.4802/2011] by order dated 09.02.2018.
5. Mr. R. Dhar, learned Government Advocate for the Handloom, Textile and Sericulture Department submits that the claim of the petitioners is not maintainable as no Cabinet approval has been received and the Finance Department has indicated that the benefits of the Assam Services (Revision of Pay) Rules, 2017 may be granted to the petitioners subject to the same being met from the proceeds from the Corporation/ the Board. Mr. Dhar further submits that the employees of the Board are not Government employees and therefore, the benefit of revised scale of pay is not available to them. It is submitted that further as on date there is no Cabinet decision allowing the claim of the petitioner for grant of revised scale of pay. Mr. R. Dhar further submits that the claim of the petitioners that they are delisted from the list of public enterprises will not ipso facto confers upon the employees of the Board the status of the government servants. There is no dispute that these employees were directly recruited by the Board and/or were there initially appointed on deputation and who had subsequently opted to be absorbed in the Board. Consequently, they cannot claim the status of government servants and automatically demand release of revised scale of pay under the Assam Services (Revision of Pay) Rules, 2017. Mr. R. Dhar has referred to the judgment of State Page No.# 8/14 of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha reported in (2009) 5 SCC 694 in support of his contention that the Government is not liable for payment of salaries and other dues of employees of public sector undertakings. Hence, such contentions raised by the petitioners cannot be accepted.
6. Mr. R. Borpujari, learned Standing Counsel for the Finance Department submits that the petitioners cannot claim to be a part of the government servants as they were not appointed by the Government and consequently, they do not have the status of government employees. They were appointed by the Board and notwithstanding, the fact that the Board receives regular grants in aid from the Government that by itself will not confer upon the employees of the Board the status of government employees. The question of similarity of services rendered and parity of pay is a very complex issue and the same will have to be undertaken at the appropriate level by the experts and which exercise has neither been sought for by the Board nor directed to be carried out by the Government. In support of his contentions he has relied upon the judgments rendered in Rajesh Pravinchandra Rajyaguru vs. Gujarat Water Supply and Sewerage Board and Others reported in (2021) 19 SCC 128 and Meghalaya Wine Dealers Association and Another vs. State of Meghalaya and Others reported in 2010 (2) GLT 673.
Page No.# 9/14
7. Learned counsel for the parties have been heard and the pleadings available on record have been carefully perused.
8. There is no dispute that for the revised scale of pay under the Assam Services (Revision of Pay) Rules, 2010 the employees of the Board were granted the benefits by a Cabinet decision. Subsequently, the same benefit for the revised scale of pay in the Assam Services (Revision of Pay) Rules, 2017 no cabinet decision has been taken as on date and pursuant to the orders passed by this Court, the respondent authority has in principle accorded the approval subject to the conditions mentioned therein, including the condition that the benefits should be borne out of the proceeds of the Board. There is, however, no dispute on facts that the Board is in receipt of grants in aid from the Government on a regular basis. The impugned order dated 24.01.2022 which is challenged in the present proceedings was issued pursuant to the directions contained in the order dated 25.02.2019 passed in WP(C) No. 1264 of 2019. The said impugned order dated 24.01.2022 is reproduced below for convenience:
"Finance (PRU) Department have no objection to the Cabinet Memorandum for revision of pay scales to the employees of Assam Khadi and Village Industries Board as proposed by the Department, subject to the condition that :-
The Administrative Department ensures that conditions laid down in Notification No. FPC.23/2016/17, dtd. 17/01/2018 is followed.
2) No post would be newly created in Assam Khadi and village Industries Board without prior Page No.# 10/14 approval of Finance Department.
3) Assam Khadi and Village Industries Board will bear the entire finance liabilities arising out of the revision of pay out of their own budget and no financial assistance will be given by the State Government for this purpose."
The above decision of the Finance Department were communicated to the AKVIB vide Government letter No. HTS.163/2017/118, dated 06.04.2018. Subsequently on AKVIB's request and Hon'ble Gauhati High Court's order, dated 25/02/2019 in WP(C) No. 1264/2019, the matter was again taken up on 03.05.2019 by this Department with the Finance (PRU) Department to which Finance (PRU) Department replied vide their endorsement Dated 09.07.2019 as follows -
"As per report of the Accountant General, Assam the accounts of the Assam Khadi & Village Industries Board was not duly audited by the competent authority since 12 years w.e.f 2006- 2007 onwards, copy of which is enclosed herewith at Flag- A. As such, the present financial condition of Assam Khadi & Village Industries Board is not known and on how the Board is able to propose the revised pay scale as per 7 APPC recommendation to the officers and staff from their own source. Handloom Textiles Department is therefore requested to consult with the Government Advocate and submit an Affidavit in the Court that before giving revised pay as per the 7 APPC recommendation, the accounts of the Board should be examined by the competent authority on an urgent basis and after that the authority may decide on granting the revised pay scale".
The reply of the Finance (PRU) Department was communicated to AKVIB. However on request of AKVIB the matter was again taken up with of Finance (PRU) Department on 07.02.2020. The Finance (PRU) Department however re-iterated its earlier views vide their endorsement Dated 23.03.2020. It may be mentioned that subsequent to this also the Handloom Textile & Sericulture Department on two more times have taken up the issue with the Finance (PRU) Department. Their latest endorsement dated 03.01.2022 as follows:
"It has been further learnt that up to date audit has not been conducted as yet by the competent authority. In the absence of up to date audit report, it will not be possible to gauge the financial condition my of Assam Khadi and Village Industries Board as to whether the Board will be able to pay the revised pay scale as per (ROP) Rules 2017 to their officers and staff from their own source. Until and unless the financial condition of the Board is strong, only then the Board will be able to meet the additional expenditure arising out of the pay revision".
In view of the above it is amply clear that the matter has been duly considered many times by the competent Department i.e. Finance Department Government of Assam on the request of AKVIB and also subsequently as per order of the Hon'ble Gauhati High Court orders dated 25/02/2019 in WP(C) No. 1264/2019. The considered decision and views of the Finance Department have been communicated to AKVIB in the past by the Handloom Textile Page No.# 11/14 and Sericulture Department. You are therefore requested to kindly comply with the Directions of Finance (PRU) Department. After fulfilling the conditions stipulated by the Finance Department you may submit the proposal for revised pay scales for consideration by the Finance Department.
In view of the above the claim of the writ petitioner in WP(C) No. 1264/2019 and proposal of revision of Pay scale of AKVIB stands disposed off in accordance with the decision of Finance (PRU) Department in the matter.
This issue with the approval of Additional Chief Secretary, Handloom Textile and Sericulture Department."
9. Perusal of the impugned order dated 24.01.2022 reflects that the Finance (PRU) Department had made the endorsement that the Administrative Department will ensure the conditions laid down in the notification dated 17.01.2018. It is also provided in the endorsement that no new post would be created in the Board without prior approval of the Finance Department. Further, the Board will bear the entire finance liabilities arising out of revision of pay out of their own budget and no financial assistance will be given by the State Government for this purpose.
10. These conditions appear to have been insisted upon by the Finance Department as the report of the Accountant General, Assam reflected that the accounts of the Board were not duly audited by the competent authorities since 12 years with effect from 2006-07 onwards. As such, the financial condition of the Board was not known and there as to how the Board proposes to implement the recommendations of the 7th APPC recommendation to the officers and staff Page No.# 12/14 from their own sources. Also, there is no dispute on facts that the Cabinet had earlier recommended for grant of the Assam Services (Revision of Pay) Rules, 2010 and the same has already been released to the members of the Petitioners' Association. At present the Board is in receipt of Grants in aid which covers the salaries, pay and emoluments of the employees of the Board. Since the State by Cabinet decision had earlier granted the benefit of the revised scale of pay of the Assam Services (Revision of Pay) Rules, 2010, it is clear that similar benefits are required to be considered for release of such benefits by the State. Whether the matter is to be placed before the State Cabinet is for the State authorities to decide. If steps have been taken to place the matter before the State Cabinet, the materials before the Court do not reveal the current status. It is also seen that the views of the Finance Department with regard to the accounts of the Board not being audited for the past 12 years is also disputed. It is reiterated on behalf of the Finance Department that audited accounts, if any, were never placed before the Finance Department at the time when the impugned order dated 24.01.2022 was passed. That apart, by a communication dated 26.06.2002, the Board had been delisted from Public Enterprise in the State of Assam and this communication is also not stated to have been withdrawn as on date. As such, the yardstick applicable for Public Enterprises will not be applicable to the Board in view of this communication Page No.# 13/14 that it has been delisted as a Public Enterprise. Therefore, the question which is to be decided by the Court at this stage is whether the State, upon due consideration of the matter, was justified in rejecting the claims of the petitioner for grant of benefit of revised scale of pay. However, as discussed above, this decision in the earlier occasion was taken at the highest level of the State, namely, the State Cabinet. Consequently, it is evident that decisions of such nature are required to be examined and evaluated and appropriate decisions are required to be taken at the highest level if required by the State Cabinet. It has not been explained in the present proceedings by the respondents as to why such a step was not resorted to and if it was resorted to, then the outcome thereof. The impugned order dated 24.01.2022 does not reflect anywhere that the views of the Finance Department have been placed or considered by the State Cabinet and/or have been endorsed.
11. Under such circumstances, this Court is of the view that the matter will require reconsideration in the hands of the State authorities by taking all steps necessary to place the baton at the highest level, if required, before the State Cabinet, along with all necessary proposals, documents, audited, reports of the accounts etc. This exercise in the present proceeding appears to have not been done in spite of the directions contained in the order dated 25.02.2019 passed in WP(C) No. 1264 of 2019. Accordingly, the matter stands remanded to the Page No.# 14/14 State Department to revisit the proposals and the claims of the writ petitioners towards the benefit of Revised scale of pay of the Assam Services (Revision of Pay) Rules, 2017. The impugned order dated 24.01.2022 therefore is set aside and the authorities concerned will undertake the entire exercise afresh by taking into consideration the earlier precedence by the State in this regard and grant the benefits of the revised scale of pay as per the procedure prescribed. This entire exercise be undertaken within a period of 90 (ninety) days from the date of receipt of a certified copy of this order. In view of the discussions and the directions above the question whether the employees of the Board, for all practical purposes, can be treated to be State Government employees is left open to be decided in an appropriate proceedings.
13. In view of the discussed above, the judgments cited at the Bar are not required to be discussed.
14. Writ Petition accordingly stands disposed of in terms of the above.
JUDGE Comparing Assistant