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Whether selection of a posterior date factored on financial position for implementing the pay scale revision in a sick company to be applicable to those employees who were on the roll of employment on such fixed date, to the exclusion of the segment of employees not in employment on that date having retired, stands valid on the touchstone of reasonableness and rationality, is the question arising to be analysed and answered in this appeal.

2. Preferred by original respondents, the challenge in the present appeal is addressed to judgment and order dated 4th July 2023 of learned Single Judge. Thereby, the petition filed by the petitioners-respondents herein came to be allowed by setting aside order dated 31st March 2014 issued by Union of India, Ministry of Heavy Industries- respondent No.1. The consequential order dated 10th June 2014 issued by appellant No.1-HMT Ltd. was also set aside. Appellant Nos.1 and 2-original Respondent Nos.2 and 3- HMT Machine Tools Ltd. and HMT Ltd. respectively, were directed to extend the benefit of the pay scale revision of 1997 with effect from 1st January 1997 with payment of consequential benefits and the arrears. 2.1 By aforementioned communication dated 31st March 2014, the Ministry of Heavy Industries and Public Enterprises intimated respondent No.2-HMT Ltd. that the Cabinet Committee on Economic Affairs in its meeting dated 28th February 2024 along with other clearances, had approved to implement 1997 pay revision from the date of approval, with one-time relaxation of the Department of Public Enterprises Guidelines (DPE Guidelines). It also contemplated enhancement of age of retirement. In other words, the decision was communicated that from the date of approval, that is 28th February 2014, the pay revision of 1997 would be implemented for the employees of Appellant No.1-HMT Machine Tools Ltd.

(iii) The resources for meeting the increased obligation for salary and wages were required to be internally generated to come from improved performance. HMT Machine Tools Ltd. however did not comply with the criteria for 1997 pay revision.

(iv) The Ministry of Heavy Industries issued direction dated 20th May 2014 directing appellant No.1 to implement 1997 pay scales from the date of approval, that is from 28th February 2014 in relaxation of DPE Guidelines, pursuant to which impugned order dated 10th June 2014 was issued.

(v) After the aforementioned orders, a settlement dated 2nd July 2014 had been arrived at between the Management and Workers' Union. As per clause 1:3:1, it was agreed that wage revision of 1997 would be implemented from 28th February 2014, in accordance with DPE Guidelines.

(vi) Since the said Company did not have the sufficient funds to clear the additional burden of 1997 pay revision, the Government of India provided budgetary support in the form of non-plan loan of Rs.61.04 crores at 7% interest spread over two years, for effecting pay revision from 28th February 2014.

were not eligible for pay revision of 1997 as per the DPE guidelines. However, with a view to boost the morale of employees and revive the Company's performance, the Government approved pay revision as per the BRPSE's recommendations.

Accordingly, the 1997 pay scales were implemented prospectively with effect from the date of approval of the proposal by the Government. No arrears were payable to the employees as the 1997 wage revision was implemented with prospective effect. In view of the above, payment of arrears of 1997 pay scales from 01-01-1997, the date from which it was applicable in the deserving profit making CPSEs and wage revision of 2007 as per DPE Guidelines is not admissible and practically infeasible in case of HMT Machine Tools Ltd."