The matter ultimately was heard and decided by the Supreme Court in State of U.P. & Ors. Vs. Putti Lal [(2002) 2 UPLBEC 1595, wherein the Hon'ble Supreme Court, in paragraph 5, had observed as under:-
7. Consequently, the appeal is allowed, in terms of judgment dated 23.07.2010 rendered in Special Appeal No.64 of 2006 titled 'State of U.P. & Ors. vs. Prabhu Narain Sharma and Ors.', relevant portion whereof has been extracted above.
The principle, therefore, is well settled that the State need not, in exercise of its executive power or otherwise, treat all employees alike merely because they are in its employment. The State can classify the employees, based on the nature of employment, and pay them differently. If so done, it can not be said to be arbitrary. In the case in hand, after going into the issue, the State Government fixed a consolidated pay for work charged employees. This, therefore, cannot be said to be arbitrary. This principle has also been referred to in a Constitution Bench judgment of the Supreme Court in Secretary, State of Karnataka & Ors. Vs. Uma Devi (3) & Ors., (2006) 4 SCC 1.