W.P. No. 985 (W) of 2007. Case: Amar Kumar Barik and Others Vs National Instruments Limited and Others. High Court of Calcutta (India)
| Case Number | W.P. No. 985 (W) of 2007 |
| Judges | S. P. Talukdar, J. |
| Issue | Sick Industrial Companies (Special Provisions) Act, 1985 - Section 15; Constitution of India, 1950 - Articles 14, 21, 226, 311; Companies Act, 1956 - Sections 619, 620 |
| Judgement Date | October 30, 2009 |
| Court | High Court of Calcutta (India) |
Judgment:
S. P. Talukdar, J.
The employees of certain Public Sector Enterprises filed several writ petitions with regard to pay revision of the Central Public Sector Employees following Central Dearness Allowance (hereinafter referred to as 'CDA') pattern in 69 Public Sector Enterprises of the Government of India. In pursuance of the directives given by the Hon'ble Supreme Court on 14th March, 1986 in connection with those writ petitions, the Government of India appointed a High Power Pay Committee on 7th April, 1986 under the Chairmanship of the Hon'ble Mr. Justice R. B. Misra (as His Lordship then was), which gave its final report to the Government of India on 24th November, 1988 recommending Central Government pay structure for all the 69 Public Sector Enterprises including National Instruments Limited, being respondent No. 1 herein. By judgment: dated 3rd May, 1990, the Apex Court directed implementation of the recommendation of the High Power Pay Committee Report. Ministry of Programme Implementation, Department of Public Enterprises, Government of India issued an office Memorandum No. 2(43)/90-DPE(WC) dated 12th June, 1990 regarding implementation of the recommendations of the said High Power Pay Committee.
Para 3(iii) of the office Memorandum dated 12th June, 1990 provides that all employees following 3rd Central Pay Commission Dearness Allowance pattern appointed on or after 1st January, 1986 but before 31st December, 1988 would be deemed to have been appointed in the revised scales. In para 11 of the Memorandum dated 12th June, 1990 which dealt with 'next pay revision', it was stated that 'the employees in respect of whom he recommendations of the HPPC are now being implemented under orders of the Supreme Court dated 3.5.1990 would get pay revision only as and when similar changes are effected for the Central Government employees (Supreme Court judgment: dated 3.5.1990).'
The National Instruments Limited was, however, declared a Sick Industrial Company on a reference to the Board for Industrial and Financial Reconstruction (hereinafter referred to as 'BIFR') under Section XV of the Sick Industrial Companies (Special Provisions) Act, 1985. The Government of India, Ministry of Industry, Department of Public Enterprises issued one office memo No. 2(42)/97-DPE(WC) dated 24th October, 1997 in the matter of pay revision of the Central Public Sector employees following CDA pattern in 69 Public Sector Enterprises including the NIL. It was stated that the pay scales in respect of all the Public Sector Enterprises would be revised w.e.f. 1st January, 1996 as per judgment: of the Hon'ble Supreme Court dated 3rd May, 1990 on the recommendations of the High Power Pay Committee. There was a Memorandum of Settlement arrived at 6th October, 1997 after protracted negotiation between the management of NIL and the Unions for rehabilitation. The employees in the best interest of revival of the NIL agreed that the status quo in respect of existing pay scales would be maintained for a period of at least three years. On expiry of the stipulated period of three years, the rights and privileges, so far sacrificed may revive, as if the same have never happened. It was further agreed that the arrears accruing out of the arrangement as mentioned in clause 7.5.2 would be sacrificed by the employees. The management was to revive the position at the end of each financial year.
Regarding treatment of Sick Enterprises, the Pay Revision Committee made the following observation:
6.11.1 - A basic question, which concerns the working of public sector undertakings and emoluments of their employees, is the manner in which sick and loss making undertakings are treated. Today, these public sector undertakings fall under three categories.
6.11.2 - The first category is public sector enterprises that follow the Central Dearness Allowance pattern. Irrespective of their financial position these companies have got the benefit of the recommendations of the 5th Central Pay Commission. This is as per the orders of the Supreme Court. In respect of these companies, the Committee recommends that, so long as the Court decision remains, emoluments have to be paid as per the Court orders.
Respondent No. 1/NIL following the said CDA pattern for the petitioners comes within the first category of Public Sector Enterprises. According to the report dated 30th October, 1998 and so long as the order of the Hon'ble Supreme Court subsists, emoluments have to be paid to the petitioners following the recommendation of the 5th Central Pay Commission irrespective of the financial position of the NIL. The NIL has been issuing salary bills showing the payment of emoluments according to the 4th Pay Commission Recommendations and accrual of emoluments according to the 5th Pay Commission Recommendations. On 12th November, 2002, the BIFR by an order concluded that the NIL was not likely to become viable on a long term basis and it be wound up.
In such changed circumstances, arising out of the order of the BIFR dated 12th November, 2002, the bipartite settlement dated 6th October, 1997 had lost its force. The appeal was, however, preferred against the order of the BIFR before the Appellate Authority for Industrial and Financial Reconstruction, in short 'AAIFR' and the same is still pending. The two leading Universities of West Bengal, namely, Calcutta University and Jadavpur University, submitted their individual proposals to the Department of Heavy Industry expressing their desire to take over the assets and liabilities of NIL along with the responsibilities of the existing man power. Meeting was convened on 24th June, 2005 regarding such taking over the assets and liabilities by either of the said two Universities. In the said meeting, Department of Heavy Industries, Government of India had agreed to take the responsibilities of all the dues pertaining to the employees of NIL up to the last date.
The petitioners along with others submitted a representation dated 6th July, 2006 to the Chairman and Managing Director of NIL requesting the said authority to disburse the salaries of the CDA pattern employees as per High Power Pay Committee Recommendations (5th Pay Commission) w.e.f. 1st January, 1996. This was done by the NIL in respect of the CDA pattern employees as per officer Memorandum dated 24th October, 1997. But such revised pay scales as per 5th Pay Commission Recommendation could not be implemented to the existing employees due to non-availability of financial resources and considering the pendency of the revival package of the NIL. But the amount was accumulated as arrear in the name of each individual employee. The extent of financial involvement of the arrears was communicated to the Ministry for release of fund from time to time. In the representation dated 6th July, 2006, it was pointed out that those employees of NIL who had retired/resigned/separated under Voluntary Retirement Scheme had been given their dues in the revised pay scales as per 5th Pay Commission Recommendations along with arrear salaries. 11 employees of NIL who retired between 31st January, 1996 and 28th February, 2006 had been given the benefits of 5th Pay Commission (High Power Pay Committee Scales of Pay) w.e.f. 1st January, 1996. Two employees who retired on 19th July, 1996 and 23rd June, 1999 had been given similar benefits. One Edward Lapcha, since deceased, who was upper division clerk of NIL, was also given such benefits w.e.f. 1st January, 1996 after his death on 17th October, 1998.
A list of 79 employees who were released under Voluntary Retirement Scheme on 28th August, 2002 and a list of 102 employees released under Voluntary Retirement Scheme as on 4th February, 2003 as also a list of 212 employees released under the Voluntary Retirement Scheme on 31st March, 2003 circulated under inter office memoranda dated 28th May, 2001 and 3rd February, 2003 show that in case of employees under CDA Scale, calculations of the service benefits were made as per High Power Pay Committee Pay Scales according to 5th Pay Commission Recommendations. The Department of Heavy...
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