Gujarat High Court
Chandrakant Dahyalal Shah & 3 vs Chairman - Gujarat State Handloom And ... on 25 February, 2016
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/SCA/12483/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 12483 of 2015
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CHANDRAKANT DAHYALAL SHAH & 30....Petitioner(s)
Versus
CHAIRMAN - GUJARAT STATE HANDLOOM AND HANDICRAFT
DEVELOPMENT CORPORATION LTD & 2....Respondent(s)
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Appearance:
MR AD OZA, ADVOCATE for the Petitioner(s) No. 1 - 31
MS. VACHA DESAI, ASST. GOVT. PLEADER for the Respondent(s) No. 3
MR HS MUNSHAW, ADVOCATE for the Respondent(s) No. 2
NOTICE SERVED BY DS for the Respondent(s) No. 1 , 3
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 25/02/2016
ORAL ORDER
1. By this writ application under Article 226 of the Constitution of India, the writ applicants who were served with the Handloom & Handicraft Development Corporation Ltd., have prayed for the following reliefs;
"(A) This Hon'ble Court may be pleased to admit and allow this petition.
(B) This Hon'ble Court may be pleased to issue writ of Certiorari any other appropriate writ, order or direction to quash and set aside the action of the respondents of not paying the salary, arrears (though the salary is fixed) by implementing the recommendations of 6th Pay Commission w.e.f 01.01.2006 by declaring same as illegal, arbitrary, improper and discriminatory.Page 1 of 25
HC-NIC Page 1 of 27 Created On Thu Apr 28 03:16:25 IST 2016 1 of 27 C/SCA/12483/2015 ORDER (C ) Be pleased to direct the respondents to implement the recommendations of 6th Pay Commission as per the clause 2 of the G.R. Dated 29.03.2010 produced at Annexure-B and Govt. Resolution dated 27.02.2009 produced at Annexure-C and further be pleased to direct the respondents to implement the 6th Pay Commission recommendations w.e.f 01.01.2006 by making actual payment from that date and as per that respondent be directed to pay the arrears with interest thereon at the rate of 12% per annum as the petitioners could not get the interest on the amount as applicable to the E.P.F Account.
(D) Pending admission, hearing and final disposal of this petition, this Hon'ble Court may be pleased to issue necessary direction to the respondents to calculate the arrears of the amount payable from 01.01.2006 as per the 6th Pay Commission and to deposit in the registry of the Hon'ble Court as the petitioners are retired senior citizens.
(E) Be pleased to award the cost of this petition looking to the facts and circumstances of case and more particularly the petitioners are senior citizens and deprived of their rights.
(F) This Hon'ble Court may be pleased to grant any other and further reliefs, as the nature and circumstances of the present case may require."
2. The facts of this case may be summarized as under;
2.1 The petitioners were appointed on the establishment of the Corporation on the different posts. The statement reflecting the personal details of each of the writ applicants is at page-20, Annexure-A. 2.2 The dispute is with regard to grant of the benefits of the 5th Pay Commission with effect from 01.01.2006. The State Government has decided to extend the benefit of the 6th Pay Commission to the writ applicants with effect from 01.04.2009.
Page 2 of 25HC-NIC Page 2 of 27 Created On Thu Apr 28 03:16:25 IST 2016 2 of 27 C/SCA/12483/2015 ORDER 2.3 Being dissatisfied, they have come with this writ application.
3. On 6th August, 2015, while issuing notice, the following order was passed;
"1. The petitioners herein are all retired employees of the 'Gujarat State Handloom and Handicraft Development Corporation Ltd.' They have been given the benefits of the 6th Pay Commission w.e.f.01.04.2009. It is the case of the petitioners that they should have been given the said benefits w.e.f.01.01.2006. It appears from the Government Order dated 29.03.2010 that the arrears towards the amount for the period between 01.01.2006 and 31.03.2009 was to be deposited in five equal installments in the E.P.F. Account of each of the petitioners for a lock in period of five years.
2. Mr. A.D. Oza, the learned counsel appearing for the petitioners submitted that atleast it was expected of the Government to deposit such amount in the E.P.F. Account of the petitioners according to the decision dated 29.03.2010.
3. Let Notice be issued to the respondents returnable on 27th August, 2015. Direct service is permitted."
4. Mr. Oza, the learned counsel appearing for the writ applicants vehemently submitted that his clients were given to understand that on account of financial crunch, they would not be paid the actual benefit for the period between 2006 and 2009. The arrears towards the amount for the said period would be deposited in five equal installments in the E.P.F Account of each of the writ applicants for a locking period of five years.
5. The stance of the Corporation, as on today, is that it is not possible to deposit the requisite amount towards the Page 3 of 25 HC-NIC Page 3 of 27 Created On Thu Apr 28 03:16:25 IST 2016 3 of 27 C/SCA/12483/2015 ORDER arrears in the five equal installments in the E.P.F Account of the writ applicants considering the financial position of the Corporation. On behalf of the Corporation, an affidavit-in-reply has been filed duly affirmed by the Deputy Manager (Administration), inter alia, stating as under;
"3. The Respondents No.1 & 2 most respectfullly submit that the present Special Civil Application is to be rejected on the ground of delay and latches alone as the recommendation of 6th Pay Commission are implemented by the Corporation with effect from 1.4.2009 after getting necessary approval from Government of Gujarat. It is stated that the benefits are conferred pursuant to orders dated 21.6.2011 issued by the Respondent Corporation and the petitioners have preferred present Special Civil Application after availing all the benefits including arrears with effect from 1.4.2009. It is stated that petitioners have also retired from the employment of Gujarat State Handloom & Handicrafts Corporation Limited on attaining the age of superanuation and now at a belated stage preferred present special civil application without assigning any cogent reason for the delay.
4. The Respondents No.1 & 2 most respectfully submit that so far no employee whether in service or retired has preferred any special civil application before this Hon'ble Court or initiated any proceedings before any forum against the implementation of recommendation of 6th Pay Commission with effect from 1.4.2009 and have accepted the said benefits and after more than four years present special civil application is preferred by the petitioners for the reasons best known to them.
5. The Respondents No.1 & 2 most respectfully submit that Gujarat State Handloom & Handicrafts Development Corporation Limited is registered under the provisions of Companies Act, 1956 and is a Government of Gujarat undertaking. The respondents Nos. 1 & 2 most respectfully submit that the Corporation acts as per the provisions of the Companies Act and employees of the corporation cannot be equated with the Government employees.Page 4 of 25
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6. The Respondents No.1 & 2 most respectfully submit that Government of Gujarat through Finance Department passed as Resolution dated 27.2.2009 on the issue of granting the benefit of recommendation of 6th Pay Commission to the employees of Government Undertaking, Boards/Corporations, which have already implemented the recommendation of 5th Pay Commission. The Resolution provided that appropriate resolution be passed by the concerned Board/ Corporation in the meeting of the Board of Directors and then a proposal be forwarded to the Finance Department through respective Administrative Department and a copy of the Resolution is Annexed herewith and marked as Annexure-A.
7. The Respondents No.1 & 2 most respectfully submit that a meeting of the Board of Directors of the Corporation was held on 16.3.2009 after an agenda was prepared on the issue of forwarding a proposal to the Government for implementation of the recommendation of 6th Pay Commission with effect from 1.4.2009. It is stated that considering the weak financial condition of the Corporation, it was categorically observed that it was not possible to pay the difference to the employees for a period commencing from 1.1.2006 to 31.3.2009 and a copy thereof is annexed herewith and marked as Annexure-B. The Respondents No. 1 & 2 most respectfully submit that thereafter in the meeting of the Board of Directors of the Corporation held on 16.3.2009 it was resolved to implement the recommendation of 6th Pay Commission with effect from 1.4.2009. It is stated that the Board of Directors specifically resolved that no difference would be paid for the said period commencing from 1.1.2006 to 31.3.2009 and a copy thereof is annexed herewith and marked as Annexure-C. The Respondents No.1 & 2 most respectfully submit that thereafter a proposal with the requisite data and resolution passed by Board of Directors of the corporation was forwarded to the Finance Department through the Administrative Department of the Corporation for decision on implementation of 6th Pay Commission to the employees of the Corporation and a copy thereof is annexed herewith and marked as Page 5 of 25 HC-NIC Page 5 of 27 Created On Thu Apr 28 03:16:25 IST 2016 5 of 27 C/SCA/12483/2015 ORDER Annexure-D.
8. The Respondents No. 1 & 2 most respectfully submit that thereafter the Government of Gujarat through its Industries & Mines Department issued a Resolution dated 29.3.2010 resolving to give benefits as per 6th Pay Commission with effect from 1.4.2009 with a number of terms & conditions and a copy of Resolution is annexed herewith and marked as Annexure-E.
9. The Respondents No.1 & 2 most respectfully submit that the Para No.2 & 3 of the said resolution of the Government dated 29.3.2010 are not to be read in isolation and they are linked with Para No.1 of the resolution. Para No.1 clearly mentions that it is not possible to pay the difference from 1.1.2006 to 31.3.2009 due to bad financial position of the Corporation. Para No.2 of this resolution is regarding deposition of difference in EPF which can be applicable only if as per Para No.1, after the Board of Directors take a decision, in future, to pay the difference from 1.1.2006 to 31.3.2009. No such decision has been taken by the Board of Directors to pay difference from 1.1.2006 to 31.3.2009 and therefore para no.2 is non applicable.
10. The Respondents No.1 & 2 most respectfully submit tht the petitioners therein are ex-employees of Responding Corporation and are entitled to various benefits including pay scales as per the policy as well as Rules & Regulations of Gujarat State Handloom & Handicrafts Development Corporation Ltd and not of the Government of Gujarat. The Respondent crave leave to annex herewith a copy of appointment order of one Mr. Chandrakanat D. Shah i.e. Petitioner No.1 duly issued on 19.2.1982 by the then Managing Director of the Corporation and marked as Annexure-F, which clearly shows that employees of the Corporation are governed by the rules and orders of the Corporation.
The Respondents No.1 & 2 most respectfully submit that the Petitioners herein are not the Government servants and therefore, it is not open to them to seek any monetary benefits beyond the policy as well as the Rules & Regulations of the Corporation and demand any benefits applicable to government servants.
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11. The Respondents No.1 & 2 most respectfully submit that sound financial condition of the Corporation to meet with the expenditure to be incurred on release of the benefits of 6th Pay commission is one of the most important criteria to sanction it . It is stated that the Respondent Corporation is incurring heavy loses year after year and details thereof are as under;
Year Loss Amount Rs.
2009-10 139.29 lacs
2010-11 315.77 lacs
2011-12 54.58 lacs
2012-13 205.70 lacs
2013-14 246.53 lacs (Provisional)
The Respondents No.1 & 2 most respectfully submit that the accumulated loss of the Corporation is Rs.5326.55 lacs as on 31.3.2013, which shows that financial condition of the corporation is very weak.
In view of this it is crystal clear that it is neither in the interest of Respondent Corporation to accept such a burdensum demand not it has capacity to bear such a huge burden. Furthermore, as mentioned in condition No.4 of said resolution, Government of Gujarat does not pay any amount to the employees of the Corporation, to be paid as the difference. That means all the payments on account of difference have to be made by the Corporation from its own funds, which cannot be done presently due to heavy loses of the Corporation as mentioned above.
12. The Respondents No.1 & 2 most respectfully submit that the financial condition of the Boards as well as Corporation are taken into consideration while taking appropriate decision on the issue of revision of pay in favour of the employees of such Organizations. The Respondents No.1 & 2 most respectfully submit that a high level committee constituted pursuant to a Resolution dated 28.9.2012 issued by the Government of Gujarat through its Finance Department pursuant to the orders of the Hon'ble High Court of Gujarat in Special Civil Application No.1723/2011 Ishwarbhai Chhotabhai & Ors. vs. State, submitted a report and a copy thereof is anenxed herewith and marked as Annexure-G. From kind Page 7 of 25 HC-NIC Page 7 of 27 Created On Thu Apr 28 03:16:25 IST 2016 7 of 27 C/SCA/12483/2015 ORDER perusal thereof it would be crystal clear that revision of pay is not automatically permitted to a number of Boards, Corporations & Organizations and different Boards/ Corporations have given 6th Pay Commission benefits with effect from different dates. Gujarat Housing Board- from 1.1.2009, Sheep & Wool Development Corporation- from 1.1.2009, Gujarat State Ware-Housing Corporation- from 1.1.2009 and Gujarat Water Resources Development Corporation- from 1.1.2009. As it is quite apparent, that all other Government Undertaking, Corporations/Boards have not given benefits of 6th Pay Commission with effect from 1.1.2006.
13. It is pertinent to note that Petitioner No.2 i.e. Mr.A.A. Dula was Company Secretary and Financial Controller of the Respondent Corporation at the relevant point of time and he himself prepared agenda and was present in the meeting of the Board of Directors of the Corporation in that capacity held on 16.3.2009, in which decision was taken to implement benefits of 6th Pay Commission with effect from 1.4.2009."
6. On behalf of the State Government, an affidavit-in-reply has been filed duly affirmed by the Deputy Secretary, inter alia stating, as under;
"5. I humbly say and submit that by way of this petition, the petitioner has prayed for a direction to quash and set aside the action of respondents of not payment the salary, arrears (though the salary is fixed) by implementing the recommendation of 6th pay commission w.e.f 1.1.2006. The procedure for granting 6th Pay Commission benefits in Corporation has correctly been implemented. Further, Para No.2 & 3 of the said resolution of the Government dated 29.3.2010, are not to be read in isolation an they are linked with Para No.1 of the resolution. Para No.1 clearly mentions tht it is not possible pay the difference from 1.1.2006 to 31.3.2009 due to bad financial position of the corporation. Para No.2 of this resolution is regarding depositin of difference in EPF which will be and can be applicable only if as para No.1 after the Board of Directors takes a decision, in future, to pay the difference from 1.1.2006 to 31.3.2009 Page 8 of 25 HC-NIC Page 8 of 27 Created On Thu Apr 28 03:16:25 IST 2016 8 of 27 C/SCA/12483/2015 ORDER and it is clearly mentioned in para No.1. No such decision has been taken by the board of Directors to pay difference of pay from 1.1.2006 to 31.3.2009 and therefore para No.2 becomes non applicable.
6. I respectfully submit that the identical matter this Hon'ble Court in SCA No.17742 of 2013; wherein the pettiioners of GWRDC have urged before the Hon'ble Court to grant the benefit of 6th Pay Commission w.e.f. 1.1.2006 instead of 1.4.2009. In the said matter, the hon'ble court (Coram: Hon'ble Mr. Justice J.B. Pardiwala) has concluded the hearing, and, reserved for pronouncement of judgment by this Hon'ble Court (Copy of the status is annexed herewith and marked as annexure-R-I.)
7. It is respectfully submitted that the corporation is an autonomous body. It is an undertaking registered under the Companies Act, 1956. Employee of the corporation cannot be equated on the same footing or pedestal of the employee of the Government.
8. By way of this petition, the petitioner has contended that the respondent are not granting the monetary benefit of 6th Pay Commission w.e.f. 1.1.2006 and discriminating treatment by granting the 6th Pay Commission w.e.f. 1.1.2006. The answering respondent respectfully submitted that the respondent no.2 (i.e. Corporation) made the recommendation by passing a resolution in the Board of Director (hereinafter, referred as BOD) meeting of the Corporation; the said proposal was finally affirmed by the Government of Gujarat. It was decided in the Board of Director meeting of the corporation to give the financial benefits of the 6 th Pay Commission w.e.f. 1.4.2009.
9. It is respectfully submitted that the Corporation (i.e. Respondent no.2) after carefully considering, its financial position, standing and strength decided to grant the benefit of 6th Pay Commission w.e.f. 1.4.2009. I say that the BOD, on 16.3.2009 passed its board resolution to grant the benefits of 6th Pay Commission from scale to scale basis w.e.f 1.4.2009. The Corporation, BOD, who are authorized by the Government to take various decisions after considering the financial stability and the financial strength as well as the profit and the Page 9 of 25 HC-NIC Page 9 of 27 Created On Thu Apr 28 03:16:25 IST 2016 9 of 27 C/SCA/12483/2015 ORDER expenditure to implement the 6th Pay Commission benefit. In the instant case, the BOD of the Corporation considered that the benefit 6th Pay Commission should be granted w.e.f. 1.4.2009. I say that the Corporation has decided in the Board Meeting No.165 which was held on 16th March, 2009, that due to "weak financial position and the loses faced by the Corporation," it is not possible to implement the 6th Pay Commission w.e.f. 1.1.2006. Wihal, it is respectfully submitted that the employee of the Corporation are not Government employees, and, the employee of the corporation cannot claim the parity with employee of the government, in consonance, claiming the benefits of 6th Pay Commission as a mater of legitimate or any type of crystalized right. Therefore, the contention of the petitioner is absolutely of wretched nature.
10. By way of this petition it is contended by the petitioner that it was resolved to implement the six pay commission from 1.1.2006 but reasons are not disclosed, the answering deponent, respectfully submits that it is not correct, the corporation is a undertaking of Govt of Gujarat, Corporations/Boards, of the State Government have implemented the benefits of 6th pay Commission w.e.f. 1.1.2009.
11. I say that in fact, pay scales are implemented by different Corporations/Boards as per their own financial condition, and, looking at, other aspects, therefore, it was resolved to implement the benefit from 1.4.2009. furthermore, that as per Profit and Loss accounts of the Corporation year wise loss incorporated by the Corporation is under:
Year Loss
2009-10 Rs.139.29 Lacs
2010-11 Rs.315.77 Lacs
2011-12 Rs.54.58 Lacs
2012-13 Rs.205.70 Lacs
2013-14 Rs.246.70 Lacs
As it is apparent from the above mentioned loses of the Corporation that it is not in a position to bear the burden of pay difference from 1.1.2006 to 31.3.2009 as it is already under tremendous loses. As per decision of Board of Directors taken in meeting held on dated 16.3.2009 Page 10 of 25 HC-NIC Page 10 of 27 Created On Thu Apr 28 03:16:25 IST 2016 10 of 27 C/SCA/12483/2015 ORDER (Annexure-B) and Para No.1 of the resolution dated 29.3.2010 of Industries & Mines Development, Government of Gujarat, the Board of Directors can consider for payment of such difference in future, if the financial position of the Corporation impooves but that is not the case as the Corporation is burdened with heavy loses as mentioned above.
12. I say that, also, as per condition No.2 of the said resolution, it has been clearly mentioned that before it is proposed in the meeting of the Board of Directors to pay difference of amount, Government of Gujarat's prior approval will be obtained. Thus Para No.2 & 3 have to be read with Para No.1 and various Condition of the said resolution and they cannot be read in isolation. Furthermore, as mentioned in condition no.4 of said resolution, Government of Gujarat does not pay any amount to the employees of the Corporation, to be paid as the difference. That means all the payments on account of difference have to be made by the Corporation from its own funds, which cannot be done presently due to heavy loses of the Corporation as mentioned above.
13. I say that as per the condition no.2 of the said resolution of the Govt. it has been clearly mentioned that before it is proposed in the meeting of the Board of Directors to pay difference of amount, Government of Gujarat's prior approval will be obtained. Paragraphs of the resolution is quoted herein under for ready reference of the Hon'ble Court.
[1] In the meeting of the Board of Directors held on 16.3.2009 it was resolved vide Resolution No.165(9) by the Board itself that as it was not feasible to implement Sixty Pay Commission with effect from 1.1.2006, the difference amount of period between 1.1.2006 to 31.3.2009 is not to be paid, but when in future the financial position of the corporation will improve, the situation prevailing at that time be considered and implement it from 1.1.2006 and pay difference amount, which was decided in the Board of Directors.
[2] The State Government employees have been given benefit of the Sixth Pay Commission recommendation with partial changes w.e.f. 1.9.2006, but payment of pay Page 11 of 25 HC-NIC Page 11 of 27 Created On Thu Apr 28 03:16:25 IST 2016 11 of 27 C/SCA/12483/2015 ORDER and allowances as per new pay is given w.e.f. 1.4.2009 and it has been decided that the amount pay difference from 1.1.2006 to 31.3.2009 shall be deposited in GPF account of the employee with five years Lock in Period, in time equal installment. This Condition accordingly will apply to the employees/officers of the corporation.
[3] As the Board of Directors of the Corporation has recommended to implement Pay Commission from 1.4.2009, the corporation's employees who have been given the benefit of fifth pay commission with the approval of the Finance Department, their employees are given benefit of scale to scale pay improvement as per the recommendation of the Sixth Pay Commission.
14. I say that, the above quoted para No.2 and 3 are to be read with Para No.1 and various condition of the said resolution and they cannot be read in isolation. Furthermore, as mentioned in condition no.4 of said resolution, Government of Gujarat does not pay any amount to the employees of the Corporation, to be paid as the difference. Meaning thereby, all the payments on account of difference have to be made by the Corporation from its own funds, which cannot be done presently due to heavy loses of the Corporation as mentioned above.
15. I say that, at this juncture, it is pertinent to refer to this Hon'ble High Court of Gujarat in case of Special Civil Application No.17237/2011 and allied matters, Isharbhai Chhotabhai & Others vs. State, directed to constituted a committee consisting of Principal Secretary (Economic Affairs) , Finance Department, Secretary (Personnel), General Administration Department & Special Secretary (Water Resources), Narmada, Water Resources, Water Supply and Kalpsar Department and as per the report of the Committee the Corporation/Boards have implement the benefits of the 6th Pay Commission from different dates. Gujarat Housing Board-from 1.1.2009, Gujarat Fisheries Central Co-operative Institute- from 1.4.2010, Sheep & Wool Development Corporation- from 1.1.2009, Gujarat State Ware-housing Corporation- from 1.1.2009 and Gujarat Water Resources Development Corporation- from 1.1.2009 (Copy of the report and order of this Hon'ble High Court is annexed herewith and marked as Page 12 of 25 HC-NIC Page 12 of 27 Created On Thu Apr 28 03:16:25 IST 2016 12 of 27 C/SCA/12483/2015 ORDER Annexure-R-II and R-III respectively).
16. By way of this petition, it is contended by the petitioner, that in past also "Pay Commissions" benefits are given it par with government employee, I obsequiously say that, it totally amiss contention, in fact, the 5th Pay Commission Benefits have also been given with effect from 1.1.1996 and they have been paid at a later stage as per the decision of the respective Corporations/Boards. As it is quite apparent, that all other Government Undertaking, Corporation/Boards have not given benefits of 6th Pay Commission with effect from 1.1.2006.
17. By way of this petition it is alleged and contended by the petitioner that arrears for the period between 1.1.2006 and 31.3.2009 is to deposited with interest, as well as in view the benefit of 6th Pay Commission as per the Class-II should be implemented. The answering respondents respectfully submitted that as per the GR dated 29.03.2010 the following Clause 1 and 2 are quoted herein below:-
1. In the meeting of the Board of Directors held on 16.03.2009 it was resolved vide Resolution No.165(9) (1) by the Board itself that as it was not feasible to implement 6th Pay Commission with effect from 1.1.2006 to 31.3.2009 is not to be paid, but when in future the financial position of the corporation will improve, the situation prevailing at that time be considered and implement it from 1.1.2006 and pay difference amount, which decided in the Board of Directors.
2. The State Government employee have been given benefit of the 6th Pay Commission recommendation with partial changes w.e.f. 1.4.2009 but payment of pay and allowances as per new pay is given we.f. 1.4.2009 and it has been decided that the amount pay difference from 1.1.2006 to 31.3.2009 shall be deposited in GPF accounts of the employees with five years lock in period, in time equal installment. This condition accordingly will apply to the employees/officers of the corporation."
As it is evident, from the aforesaid Clauses quoted herein above, that, it has been decided that the amount of pay difference from 1.1.2006 to 31.3.2009 shall be deposited Page 13 of 25 HC-NIC Page 13 of 27 Created On Thu Apr 28 03:16:25 IST 2016 13 of 27 C/SCA/12483/2015 ORDER in GPF account of the employees with 5 years lock in period. The condition accordingly will apply to the employees/officer of the Corporation.
18. It is respectfully submitted that this proposition is not feasible to implement the 6th pay Commission w.e.f. 1.1.2006 because the difference of amount of period between 1.1.2006 to 31.3.2009 due to weak financial position of the Corporation. The answering respondent respectfully submitted that for a government employee the benefit of 6th Pay Commission was implemented w.e.f. 1.1.2006 in the State of Gujarat. However, that was implemented w.e.f. 1.4.2009 so far as the arrears between 1.1.2006 to 31.3.2009 is concerned. It was decided that it shall be deposited in GPF account of the Government employee with 5 years lock in period.
19. I say that the arrears will be equal divided into 5 parts, and the same shall be deposited in the GPF account. For clear understanding in th first instalment, 20% of the arrears on the 1.4.2009, the second instalment of 20% of the arrears shall be deposited on 1.4.2010, the third instalment of 20% arrears shall be deposited on 1.4.2011 similarly, the 4th instalment of 20% arrears shall be deposited on 1.4.2012 and lastly the 5th instalment of 20% arrears shall be deposited on 1.4.2013, but, the government employee will only be entitled to withdraw the first arrears deposited in his account on 1.4.2014. To put it in simple terms, the first arrears of 20% which was deposited on 1.4.2009 the employee shall be entitled to withdraw the same on 1.4.2009 after completion of the 5 years. Aliter, in the instant case this not feasible because of the weak condition of the corporation.
20. I say that the procedure for granting 6th Pay commission benefits in Corporation has correctly been implemented. Further, Para No.2 & 3 of the said resolution of the Government dated 29.3.2010, are not to be read in isolation and they are linked with Para No.1 of the resolution. Para No.1 clearly mentions that it is no possible to pay the difference from 1.1.2006 to 31.3.2009 due to bad financial position of the Corporation. Para No.2 of this resolution is regarding deposition of difference in EPF which will be and can be applicable only if as per Para No.1 after the Board of Page 14 of 25 HC-NIC Page 14 of 27 Created On Thu Apr 28 03:16:25 IST 2016 14 of 27 C/SCA/12483/2015 ORDER Directors takes a decision, in future, to pay the difference from 1.1.2006 to 31.3.2009 and it is clearly mentioned in Para No.1. No such decision has been taken by the Board of Directors to pay difference of pay from 1.1.2006 to 31.3.2009 and therefore para no.2 becomes non applicable.
21. I say that due to weak financial condition it has been decided that the after regaining the financial strength the Board may reconsider the benefit of arrears.
22. It is respectfully submitted that the Corporation has submitted letter to the Government dated 1.4.2009 wherein it was stated that the respondent has generated the profit of 1.88 crores in the year 2009-10. On the contrary, their expenditure is 3.56 crores. Subsequently, the Government has sought their explanation with a letter dated 21.12.2009. Thereafter the Nigam (i.e. Corporation respondent no.2) a letter dated 3.12.2009 replied with another letter dated 16.3.2009 that the expenditure of the Nigam (i.e. the Corporation) in the year 2010-11 is 2.1 crores commission w.e.f. 1.4.2009 based on scale to scale basis. Therefore, the contentions raised by the petitioner to grant the benefit w.e.f. 1.1.2006 is not applicable, as well not feasible, looking to the weak financial position of the Corporation."
7. Thus, from the stance of the Corporation as well as of the State Government, it appears that the writ applicants are not given the benefits of the 6th Pay Commission with effect from 1.1.2006, but only with effect from 1.4.2009. The only reason put forward is the financial crunch. According to Mr. Munshaw, the learned counsel and Ms. Vacha Desai, the learned A.G.P appearing for the State Government, the corporation is a loss making one. Having regard to the financial condition, it is not possible even to comply with the second part of the understanding referred to above, i.e., deposit of the arrears in the E.P.F Account for the period between 2006 and 2009.
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8. This Court had an occasion to consider almost an identical issue in the case of Jagdip Parmanandbhai Raval & Ors. vs. State of Gujarat & Ors. in Special Civil Application No.4239 of 2012 and allied matters. In the said bunch of writ applications, the issue was as regards the payment of the benefits of the 6th Pay Commission with effect from 01.01.2009 instead of 01.01.2006. This Court, while rejecting the writ applications, observed as under;
"16 Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my consideration is whether the decision of the Government to give effect to the Sixth Pay Commission Recommendations from 01.01.2009 is, in any manner, illegal, unreasonable and arbitrary.
17 It is well settled principle of law that the recommendations of the Pay Commission are subject to the acceptance/rejection with modifications of the appropriate Government. It is also well settled principle of law that a policy decision of the Government can be reviewed/altered/modified by the executive instructions. It is in these circumstances that a policy decision cannot be challenged on the ground of estoppel.
(See : K.S. Krishnaswamy vs. Union of India and another, [AIR 2007 SC (Sup) 1756) 18 In the case of M Raja vs. Ceeri Educational Society Pilani [2006(12) SCC 636], the appellant had joined the services in the respondent - School on 30.04.1997. The Fifth Central Pay Commission revised the scale of pay with effect from 01.01.1996 pursuant whereto the appellant claimed that he was entitled to the scale of pay Rs.5500-9000, whereas he was put in the pay scale of Rs.5000-8000. The recommendations of the Fifty Central Pay Commission, however, were applied by the respondent with effect from 01.07.1999. The appellant moved the Rajasthan Non-Government Educational Institutions Tribunal, Jaipur, on the premise that the respondents were bound to protect his scale of Page 16 of 25 HC-NIC Page 16 of 27 Created On Thu Apr 28 03:16:25 IST 2016 16 of 27 C/SCA/12483/2015 ORDER pay as promised by the respondents. The Tribunal allowed the said application in part holding the appellant to be entitled to pay as per the recommendations of the Fifth Central Pay Commission with effect from the date of appointment and directing the respondents to calculate the amount of difference and pay the same to him within three months. A writ petition filed by the respondents thereagainst was dismissed by a learned Single Judge of the High Court. The respondents preferred an intra-court appeal and the Division Bench allowed the same. In such circumstances, the appellant had to move the Supreme Court.
18.1 In the aforesaid background, the Supreme Court made the following observations in para 14:
It may be true that even the respondents expected that the recommendations of the Pay Commission would be implemented from April, 1997, but if for one reason or the other, the same was given effect to from 1.07.1999, a promise cannot be said to have been made out that irrespective of the implementation of the report of the Pay Commission, the appellant would be given the benefit thereof.
19 It is equally well settled that the financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level.
20 In Union of India vs. P.N. Menon and others [1994 (4) SCC 68)], while implementing the recommendations of the Third Pay Commission with regard to the dearness pay linked to the average index level 272, which was to be counted as emoluments for pension and gratuity under the Central Civil Services (Pension) Rules, 1972, the Central Government had fixed a certain cut-off date and directed that only those officers retiring on or after the specified date were entitled to the benefits of the dearness pay being counted for the purpose of retirement benefits. This was challenged as arbitrary and violative of Article 14 of the Constitution. The Supreme Court turned down the challenge and observed: while implementing the recommendations of the Third Pay Commission with Page 17 of 25 HC-NIC Page 17 of 27 Created On Thu Apr 28 03:16:25 IST 2016 17 of 27 C/SCA/12483/2015 ORDER regard to dearness pay linked to average index level 272, which was to be counted as emoluments for pension and gratuity under Central Civil Services (Pension) Rules, 1972, the Central Government had fixed a certain cut-off date and directed that only officers retiring on or after the specified date were entitled to the benefits of the dearness pay being counted for the purpose of retirement benefits. This was challenged as arbitrary and violative of Article 14 of the Constitution. The Supreme Court turned down the challenge and observed:
"Not only in matters of revising the pensionary benefits, but even in respect of revision of scales of pay, a cut-off date on some rational or reasonable basis, has to be fixed for extending the benefits. This can be illustrated. The Government decides to revise the pay scale of its employees and fixes the 1st day of January of the next year for implementing the same or the 1st day of January of the last year. In either case, a big section of its employees are bound to miss the said revision of the scale of pay, having superannuated before that date. An employee, who has retired on 31st December of the year in question, will miss that pay scale only by a way, which may affect his pensionary benefits throughout his life. No scheme can be held to be foolproof, so as to cover and keep in view all persons who were at one time in active service. As such the concern of the court should only be, while examining any such grievance, to see, as to whether a particular date for extending a particular benefit or scheme, has been fixed, on objective and rational considerations."
21 In Action Committee South Eastern Railway Pensioners v. Union of India, [1991 Supp (2) SCC 544], it was held that, on merger of a part of dearness allowance as dearness pay on average price index level at 272 with reference to different pay ranges, fixing a cut-off date in such a manner was not arbitrary and the principle enunciated in D.S. Nakara vs. Union of India [(1983) 1 SCC 305] was not applicable. In this connection, the ratios in Krishena Kumar v. Union of India, [(1990) 4 SCC 207], Indian Ex-Services League v. Union of India, [[(1991) 2 SCC 104], State Government Pensioners' Association v. State Page 18 of 25 HC-NIC Page 18 of 27 Created On Thu Apr 28 03:16:25 IST 2016 18 of 27 C/SCA/12483/2015 ORDER of A.P., [(1986) 3 SCC 501], and All India Reserve Bank Retired Officers' Association v. Union of India [(1992) Supp (1) SCC 664] are apt. In all these cases, the prescription of a cut-off date for implementation of such benefits was held not to be arbitrary, irrational or violative of Article 14 of the Constitution.
22 The importance of considering financial implications, while providing benefits for employees, has been noted by the Supreme Court in numerous judgments. In State of Rajasthan and Anr. v. Amritlal Gandhi and Ors., [AIR 1997 SC 782], the Supreme Court went so as far as to note that:
"...Financial impact of making the Regulations retrospective can be the sole consideration while fixing a cut-off date. In our opinion, it cannot be said that this cut-off date was fixed arbitrarily or without any reason. The High Court was clearly in error in allowing the writ petitions and substituting the date of 1-1-1986 for 1-1-1990".
23 More recently, in T.N. Electricity Board v. R. Veerasamy and others [(1999) 3 SCC 414], the Supreme Court observed that, financial constraints could be a valid ground for introducing a cut-off date while implementing a pension scheme on a revised basis. In that case, the pension scheme applied differently to persons who had retired from service before 1-7-1986, and those who were in employment on the said date. It was held that they could not be treated alike as they did not belong to one class and they formed separate classes.
24 In State of Punjab and Ors. v. Boota Singh and Anr.,[(2000) 3 SCC 733], (Boota Singh"), after considering several judgments of the Supreme Court in D.S. Nakara (supra) to K.L. Rathee v. Union of India, [(1997) 6 SCC 7], it was held that D.S. Nakara (supra) should not be interpreted to mean that the emoluments of persons who retired after a notified date holding the same status, must be treated to be the same.
25 In State of Punjab and Another v. J.L. Gupta and Others, [(2000) 3 SCC 736], the views expressed in Page 19 of 25 HC-NIC Page 19 of 27 Created On Thu Apr 28 03:16:25 IST 2016 19 of 27 C/SCA/12483/2015 ORDER Boota Singh (supra) were reiterated, and it was held that for the grant of additional benefit, which had financial implications, the prescription of a specific future date for conferment of additional benefit, could not be considered arbitrary.
26 In Ramrao and Ors. v. All India Backward Class Bank Employees Welfare Association and Ors. [(2004) 2 SCC 76], a Division Bench of the Supreme Court said, even for the purpose of effecting promotion, the fixing of a cut-off date was neither arbitrary, unreasonable nor did it offend Article 14 of the Constitution. Moreover, the Supreme Court held that possible hardship to be endured by a person as a result did not make cut-off dates violative of Article 14.
27 In State of Bihar and others vs. Bihar Pensioners Samaj [AIR 2006 SC 2100], the Supreme Court observed in para 17 as under:
A supplementary affidavit filed on behalf of the State Government by Mukesh Nandan Prasad dated 9-9-2002 brings out in paragraph 8 that the total amount of financial burden, which would arise as a result of making effective the payments from 1-1- 1986 would be about 2,038.34 crores. In other words, the State Government declined to pay the arrears from 1-1-1986 on the ground of financial consideration, which, undoubtedly, is a very material consideration for any administration. In State of Punjab and others v. Amar Nath Goyal and others (2005) 6 SCC 754 this Court had occasion to consider the very same issue. After referring to a number of other authorities, it was held that financial constraints could be a valid ground for introducing a cut-off date while introducing a pension scheme on revised basis. Thus, refusal to make payments of arrears from 1-1-1986 to 28-2- 1989 on the ground of financial burden cannot be held to be an arbitrary ground or irrational consideration. Hence the argument based on Article 14 of the Constitution must fail.
28 In view of the above, it is not really necessary for me to go into the question as to whether the doctrine of Promissory Estoppel or legitimate expectation would Page 20 of 25 HC-NIC Page 20 of 27 Created On Thu Apr 28 03:16:25 IST 2016 20 of 27 C/SCA/12483/2015 ORDER apply in the facts of this case.
29 Having regard to the report of the specially constituted Committee, I find it difficult to dub the cut-off date fixed by the State Government for extending the benefits of the Sixth Pay Commission Recommendations to the petitioners, who are the employees of the Corporation as arbitrary. There is no mathematical or logical way of fixing a cut-off date precisely and the decision of the State Government must be accepted unless it can be said to be absolutely unreasonable. Even if no particular reason is forthcoming for the choice of a particular date, it should not be dubbed as arbitrary unless it is shown to be capricious or whimsical in the circumstances. "
9. The issue before me is whether I should direct the Government to deposit the arrears for the period between 2006 and 2009 in five equal installments in the E.P.F Account of the writ applicants.
10. Mr. Oza, the learned counsel appearing for the writ applicants vehemently submitted that the picture of vague financial condition projected, does not appear to be true and correct. According to Mr. Oza, the employees who served the Corporation for more than almost 30 years, should not be deprived of their legitimate claim of the benefits of the 6th Pay Commission from the date from 01.01.2006.
11. Mr. Oza has altogether a different picture to project so far as the financial condition of the Corporation is concerned. In this regard he has filed a further affidavit cum rejoinder, inter alia, stating as under;
"I further say that petitioners are getting meager amount towards pension from their Employees Provident Fund Account (EPF). Statement showing the amount of pension Page 21 of 25 HC-NIC Page 21 of 27 Created On Thu Apr 28 03:16:25 IST 2016 21 of 27 C/SCA/12483/2015 ORDER with respect to each of the employees is annexed herewith and marked as Annexure-III. I say that the difference of amount payable for the period between 1.1.2006 to 31.3.2009 to the petitioners is about 70-72 Lacs. I say that the respondent corporation has sent the proposal dated 26.3.2009 to the State Government and after considering all such facts, the Government has categorically stated in para 2 of the Government Resolution dated 29.3.2010 (annexure-B) to the effect that the employees of the Government have been granted the benefits as per the recommendation of the sixth pay commission w.e.f. 1.1.2006 and accordingly salary and allowances has been paid and the difference amount is for the period between 1.1.2006 to 31.3.2009 has to be deposited into EPF account by five installments. The Government further also resolved that accordingly the said condition will be applicable to the employees/officer of the corporation.
4. I further say that the resolution no.165(9)(1) was passed on 16.03.2009 and hence, same was passed considering the financial position up to the accounting year 2008-09 andin spite of that the officer Mr. A.M. Panchal who has affirmed the affidavit on 23.9.2015 (affidavit at page 69-75) has audacity to mention the loss for the year 2009-2010 to 2013-2014 in para 11 of the said affidavit. It is submitted that in the said resolution also, it has been stated that the respondent corporation is making operating profit since last two years. The State Government after considering the resolution and proposal, resolved that the benefit granted to the employees of the state Government is extended to the employee of the Corporation.
5. With reference to para 5 of the reply, I say that in view of the facts stated in para 3 of the petition, there is no substance in the averments made in para 5 of the reply.
6. With reference to para 6,7,8 and 9, I say that as stated hereinabove, the State Government had considered the proposal, resolution of the respondent Corporation and thereafter, issued Government Resolution dated 29.3.2010 whereby clearly stating that the same condition would apply in the case of the employees/officers of the respondent Corporation at par Page 22 of 25 HC-NIC Page 22 of 27 Created On Thu Apr 28 03:16:25 IST 2016 22 of 27 C/SCA/12483/2015 ORDER with the employees of the Government and therefore, there is no substance in the averments and submissions made in the said paragraphs.
In view of the above, there is no substance in the averments made in para 9 and 10 of the reply. The respondent corporation is duty bound to follow the instructions of the State Government, as all the appointments in the respondent corporation are approved by the State Government. It is also a matter of fact that all the policy decision has to be taken in consultation with the State Government. The State Government is giving sizeable grant for the projects and scheme of the respondent Corporation. It is submitted that the pay scales and allowances payable to the employee of the respondent corporation as per the recommendations, directions and the approvals of the Government. Under the circumstances, there is no substance whatsoever in the sub para of para 10 of the reply.
7. With reference to para 11, I say that I have already dealt with hereinabove. The respondent corporation cannot rely upon the so called figures of the loses after the resolution dated 16.3.2009 and the Government Resolution dated 29.3.2010.
8. With reference to para 12, I say that there is no substance in the averments made therein because, neither respondent corporation nor its employees were party to the proceedings of SCA 17237 of 2011. It is further submitted that in the case of the employees of the Corporation, the Government had already taken decision vide Government Resolution dated 29.3.2010 and therefore, the subsequent judgment is not applicable to the petitioners. In view of the facts stated hereinabove, the facts stated with respect to the other Board/Corporation in the said para have no application in whatsoever in the present case.
9. With reference to para 13, I say that the averments stated therein is nothing more than the non-application of mind, In view of the fact that the petitioner no.2 Mr. Dula was bound to follow the instructions of Chiarman/Managing Director of the respondent corporation. It is pertinent to point out that in spite of the Page 23 of 25 HC-NIC Page 23 of 27 Created On Thu Apr 28 03:16:25 IST 2016 23 of 27 C/SCA/12483/2015 ORDER agenda, resolution which was passed in the meeting held on 16.3.2009, the Government passed the resolution dated 29.3.2010."
12. Along with the further affidavit cum rejoinder, he has also placed reliance on few documents in the form of resolutions and identical grant of benefits to the employees of five different Corporations.
13. I am of the view that more particularly in view of the judgment and order of this Court dated 4.12.2015 in Special Civil Application No.4239 of 2012 and allied matters referred to above, no writ should be issued for sanctioning the benefits with effect from 01.01.2006. The Government has thought fit to fix a cut of date, which in my view, could not be termed as arbitrary or unreasonable. However, I expect the Government as well as the Corporation to look into the additional material which has been brought on record by the writ applicants by way of further affidavit cum rejoinder referred to above with a view to explore the possibility of adhering to their earlier commitment of depositing the arrears between 2006 and 2009 in five equal installments in the E.P.F Account of the petitioners for a locking period of five years.
14. Let the Government even look into the resolution dated 12th February, 2009, Annexure-C to this petition, page-29, more particularly, clause (ii) at page 31.
15. A fresh decision be taken in this regard within a period of three months from today. The writ applicants shall be informed about the same in writing.
16. Mr. Oza, the learned advocate, while trying to distinguish Page 24 of 25 HC-NIC Page 24 of 27 Created On Thu Apr 28 03:16:25 IST 2016 24 of 27 C/SCA/12483/2015 ORDER the judgment of this Court dated 4th December, 2015, relied on the Government Resolution dated 29th March, 2010 passed by the State Government specifically with respect to the employees of the Corporation. It is his submission that having issued such Government Resolution, it was expected of the Government to comply with the same.
17. With the above, this writ application is disposed of.
Direct service is permitted.
(J.B.PARDIWALA, J.) Vahid Page 25 of 25 HC-NIC Page 25 of 27 Created On Thu Apr 28 03:16:25 IST 2016 25 of 27 C/SCA/12483/2015 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 12483 of 2015 [On note for speaking to minutes of order dated 25/02/2016 in C/SCA/12483/2015 ] ========================================================== CHANDRAKANT DAHYALAL SHAH & 30....Petitioner(s) Versus CHAIRMAN - GUJARAT STATE HANDLOOM AND HANDICRAFT DEVELOPMENT CORPORATION LTD & 2....Respondent(s) ========================================================== Appearance:
MR AD OZA, ADVOCATE for the Petitioner(s) No. 1 - 31 ADVANCE COPY SERVED TO GP/PP for the Respondent(s) No. 3 MR HS MUNSHAW, ADVOCATE for the Respondent(s) No. 2 NOTICE SERVED BY DS for the Respondent(s) No. 1 , 3 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 27/04/2016 ORAL ORDER
1. By this note for speaking to minutes, it has been pointed out that inadvertently, in the order passed by this Court dated 25.2.2016 in Special Civil Application No.12483 of 2015, it has not been stated that in the event if the petitioners are dissatisfied with the decision that the Government may take as directed by this Court, then it would be open for them to challenge the same once again before this Court.
2. Let the following be added in the order dated 25.2.2016;
"In the event if the petitioners are dissatisfied, in any Page 1 of 2 HC-NIC Page 26 of 27 Created On Thu Apr 28 03:16:25 IST 2016
26 of 27 C/SCA/12483/2015 ORDER manner, by the decision that the Government may take, then it shall be open for them to challenge it before this Court in accordance with law."
3. The Registry shall effect the necessary addition, and issue a fresh writ of the order.
4. The note is, accordingly, disposed of.
(J.B.PARDIWALA, J.) Vahid Page 2 of 2 HC-NIC Page 27 of 27 Created On Thu Apr 28 03:16:25 IST 2016 27 of 27