Full Judgment Text
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PETITIONER:
FERTILIZER CORPORATION OFINDIA LTD. AND ANR.
Vs.
RESPONDENT:
SARAT CHANDRA RATH AND ORS.
DATE OF JUDGMENT: 23/08/1996
BENCH:
KIRPAL B.N. (J)
BENCH:
KIRPAL B.N. (J)
VERMA, JAGDISH SARAN (J)
CITATION:
JT 1996 (7) 366 1996 SCALE (6)154
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
KIRPAL, J
This appeal by special leave arises form the judgment
of the Orissa high Court which had allowed the writ petition
filed by 23 workmen of the appellants, respondents 1 to 23,
and while striking down a paragraph of a circular according
to which their pay was fixed, a direction was issued for
re-fixation of the pay in manner indicated by the High
Court.
The respondents 1 to 23, prior to 1st January 1987,
were employed as workmen by the appellants. On 20th January
1982 a seven years stagnation scheme was introduced by the
appellants whereunder its employees in the highest workman’s
pay scale, who had been stagnating for seven years, were
promoted to the lowest officer’s scale. These employees, who
were workmen and were called senior operators, senior
technicians etc. were, on their placement in the lowest
officer’s scale, designated as Assistant Foremen (AFM ’D’),
Junior Officer (JO ’D’) etc. On such placement in the
officer’s grade these erstwhile workmen were treated as
officers and they received all the facilities admissible as
officers.
On 30th October, 1983 a draft of settlement under
Section 18 of the Industrial Disputes Act, 1947 (for short
’the Act’) for the pay revision was finalised between the
management and the workmen. Based on this on 25th February,
1984 a further settlement under Section 18 of the Act was
entered into between the management of the FCI Talchar
unit, the appellants herein and its workmen. This settlement
was, inter alia, for revision of various pay scales. The
revised pay scales so fixed were to be effective from 1st
January 1983 to 31st December, 1986, the highest scale of
workmen being Rs. 915 - 1520. The agreement further
contemplated that the next ways agreement was to be
effective from 1st January, 1987. It also sought to touch
upon some of the anomalies which were prevailing with
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respect to the implementation of seven years stagnation
scheme. The relevant salient features of this
agreement/settlement were that with effect from 11th August,
1986 the workmen in the higher scale of fulfilling
eligibility conditions under the stagnation scheme were only
to be placed (not promoted) from their existing scale of Rs.
915-1520 to the lowest officer’s scale of Rs. 960-1610 and
on such placement they were to be given the designation of
Junior Foreman 9 (w). On such placement the said persons
were entitled to D.A. as admissible to officers but all
other allowances, benefits, union membership etc., which
they had as workmen, were to remain unaltered.
As a result of the aforesaid settlement dated 11th
August, 1986 there were, as on 31st December 1986, employers
who had already undergone placement from the highest workers
scale of Rs. 915-1520 to the lowest officer’s scale of Rs.
960 - 1610 on account of the fact that they had fulfilled
the eligibility conditions under the seven years stagnation
scheme on some dates before 31st December, 1986. However,
workmen like the respondents who had not fulfilled the
aforesaid eligibility conditions under the stagnation scheme
as on 31st December 1986 continued to remain in the
workmen’s category, as on that day, in the pay scale of Rs.
915-1520.
The earlier agreement whereby pay scales were fixed
from 1st January 1983 to 31st December, 1986 having come to
end, the Government of India, by an order dated 4th
February, 1987, decided that negotiations should take place
between the management and the companies so as to bring into
existence the new wage settlement to be made effective from
1st January, 1987. Pending fresh fixation of pay scales the
workmen and the officers with effect from 1st January, 1987
continued to get their salaries in the existing pay scales,
i.e. the respondents 1 to 23 in the pay scales of Rs. 915-
1520 and the persons placed in the lowest pay scale of the
officers category in the pay scale of Rs. 960-1610.
The said respondents 1 to 23 fulfilled the eligibility
conditions under the seven years stagnation scheme on 1st
September, 1987. By office memorandum dated 7th November,
1987 these respondents were placed in the officers pay scale
of Rs. 960-1610 with effect from 1st September, 1987.
A draft agreement dated 1st July, 1987 for the purpose
of revising the workmen’s pay scales from 1st January, 1987
was finalised between the management and the workmen at
their inter company’s level. The Government of India
approved the aforesaid agreement on 23rd March, 1990 a
settlement under Section 18 of the Act was entered into
between the respondents. The salient features of the said
settlement are as follows :
i) The settlement i.e. the new pay
scales for workmen were effective
from 1.1.1987 to 31.12.1991.
ii) In the case of workmen placed
in the officers’ category of JFM(W)
on any date after 1.1.1987,
fixation was to be done in the
revised workmen’s pay scale from
1.1.1987 upto the date they
remained in the workmen category in
the pre-revised scale of 915-1520
and the arrears were to paid to
them till that date in accordance
with the revised scale of 1580-
2842. (However, such employees were
to continue to draw for future i.e.
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from the date on which they were
placed in the officers’ pay scale
the same pay as they had been
drawing after that date in that
scale, namely, 960-1610).
iii) The workmen who were already
enjoying the officers’ grade under
stagnation scheme before 1.1.1987
were to continue in their current
officers scale i.e. 960-1610;
however, when the revised pay
scales for officers would become
available, the appropriate scale
was to be made applicable to them."
Respondents 1 to 23 got the benefit of this agreement
while those employees who were in the officers’ grade prior
to 1st January, 1987 had to wait till their scales were
revised and, till then, continued on the pre-revised scales
of pay.
With regard to the officers’ category, the Government
of India issued a communication on 25th March, 1991
approving the revision of their pay scales.
That on 18.4.1991, based on the aforesaid
communication/approval of the Government of India, the
Central office of FCI issued an office memorandum for
revision of pay scale and fringe benefits for officers in
FCI. The consequences of the said office Memorandum are
summarized below :-
i) "the revises scales of pay were
to remain in operation with effect
from 1.1.1987 for a period of 5
years.
ii) the officers’ scale of 960-
1610 was revised to 2200-3600
inclusive of fitment amount of Rs.
400/-, the new scale being
effective from 1.1.1987.
iii) the officers (including JFM
(W) s) who were on the rolls of the
company on 1.1.1987 were to be
fitted into the corresponding
revised pay scale as per the
formula given in para 5.1 which
included a fitment amount also."
This para 5.1 of the said circular
is as follows :-
" The Executives who were on the
rolls of the company on 1st
January, 1987 will be fitted into
the corresponding revised scales of
pay as per the following fitment
method :-
Basic pay in the existing scale of
pay as on 1.1.1987
plus
First ad hoc relief related to
actual basic on 1.1.1987
plus
Industrial DA Rs. 838.35 at AICPI
685 as on 1.1.1987
Plus
Fitment amount as applicable.
On the aggregate arrived at, pay
will be fixed in the revised scale
of pay, where the total does not
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fit in a stage of the revised scale
of pay, the pay will be fixed at
the next higher stage.
While fixing pay as per the above
method, annual increment/advance
increment falling on 1.1.1987 in
the old scale, if any should be
excluded. Hence the first ad hoc
relief should be related to the
Basic Pay in the existing scale as
on 31.12.86. In other words, the
annual increment falling on
1.1.1987 will be given in the
revised pay scale.
iv) for the officers (including JFM
(w)s who had undergone placement
only on a date for after 1.1.1987,
a different fitment formula was
stipulated in para 5.3 and the same
did not include any fitment
amount."
The said para 5.3 of the same circular is as follows :-
" METHOD OF FIXATION OF PAY OF
SUCH OF THE EMPLOYEES WHO HAVE BEEN
PROMOTED FROM THE HIGHEST CATEGORY
OF WORKMEN TO THE JUNIOR MOST
CATEGORY OF OFFICERS ON OR AFTER
1.1.1987.
The pay of such category of
employees will be fixed in the
revised pay scale of Rs. 2200-100-
3600 as per procedure elaborated
below :
5.3.1 Take basic pay of workmen
category in the revised pay scale
of Rs.1580-2842 on the date of
promotion.
5.3.2 Find out the quantum of DA
i.e. fixed DA + VDA as admissible
to workmen category on the date of
promotion.
5.3.3 Allow one notional increment
in the revised scale of Rs. 1580-
2842 attached to the workmen
category.
5.3.4 Add(i), (ii) & (iii) from the
aggregate amount thus arrived,
deduct revised DA applicable to
officers category as on date of
promotion (Annexure-II).
5.3.5 On the aggregate now arrived
at, pay will be fixed in the
revised pay scale of Rs. 2200-100-
3600 attached to the post of Asst.
Foreman/Jr. Officer equivalent.
Where the total does not fit in a
particular stage, the pay will be
fixed at the next higher stage in
the revised scale of Rs. 2000-100-
3600."
That from time to time certain ad hoc advances were
being drawn by the Junior Foreman (w) under adhoc
arrangement between the parties. These advances were
required to be adjusted against future benefits on revision
of pay scales etc. However, when the pay scales of the said
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respondents were fitted into the revised pay scale of
officers under the office Memorandum dated 18th April, 1991,
such employees started drawing lower emoluments, prior to
the revision of the officers’ pay scales. On 31st October,
1991, as a special gesture for them the differential amount
was made payable as personal pay to be adjusted against
future increments, promotional benefits or benefits on
revision of pay scales, whichever came earlier. When,
however, the personal pay started being adjusted and
recovered against the next increments due to such employees,
they demanded that adjustments be made only from the
benefits which pay become due on promotion or revision of
pay scales and not against
increments.
The appellants did not accede to the aforesaid demand
relating to the adjustment. Consequently the said
respondents filed a writ petition being OJC No. 1742 of 1993
in the Orissa High Court seeking a relief that the personal
pay should be adjusted only against the benefits available
on promotion or revision of pay scales and not against the
next increment due to them. In the writ petition there was
no prayer for quashing the fitment formula for post 1.1.1987
Junior Foreman(W) should also be awarded to post 1.1.1987
Junior Foremen (W).
In the counter-affidavit the case of the appellants was
that pre 1.1.1987 and post 1.1.1987 Junior Foreman (W) were
two different classes of employees and there was no
discrimination between them in the matter of fitment or
revision of pay scales having regard to the date of 1st
January, 1987. It was also categorically stated that post
1.1.1987 Junior Foreman (W) like the respondents had been
given the benefit of revised workmen’s pay scales of Rs.
1580-2842 for the period of 1st January, 1987 to the date of
their placement, which was 31st August, 1987 in the case of
the respondents.
The High Court, while allowing the writ petition,
observed that there were two questions which essentially
arose for its consideration. The first was whether the
fitment amount indicated in the circular dealing with the
revision of pay scales and fringe benefits of officers of
the appellants was a part of the pay scale. The second
question was whether the impugned circular as well as the
method of fixation of pay of Junior Foremen, who were placed
in the officers grade prior to 1st January, 1987 and those
placed in the officers grade after 1st January, 1987, was
hit by the principle of discrimination. The High Court did
not address itself or decide the question with regard to the
manner in which the adjustment of the personal pay was to be
made. Presumable this contention was not urged at the time
of arguments.
While considering the aforesaid two questions the High
Court observed that the counsel for the appellants herein
had conceded that the respondents/writ petitioners had not
been paid their arrears on the revision of workmen’s pay
scales from Rs. 915 - 1520 to Rs. 1580 - 2842 for the period
of 1st January, 1987 to 31st August, 1987. Having recorded
this concession the High Court considered that " on the
aforesaid conceded position, we would now examine the two
questions posed by us answer the same."
In the special leave petition filed by the appellants
it was specifically stated that no such concession was made
by the counsel for the appellants before the High Court. In
support thereof affidavit of Sh. B.S. Tripathi, Advocate who
appeared for the appellants before the High Court was filed
in which it was, inter alia, stated that he had not made any
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concession as recorded by the High Court. During the hearing
of this appeal Sh. Tapas Ray, learned senior counsel for the
respondents, very fairly stated that the said observation of
the High Court was probably not correct and in fact the
respondents were paid their arrears on the revision of their
pay scale from Rs. 915 - 1520 to Rs. 1580 - 2842 with effect
from 1st January, 1987 to 31st August, 1987. Thereafter with
effect from 1st September 1987, though they were initially
placed in the lowest of the then prevailing officers grade
of Rs. 960 -1610, but on retrospective revision of this
scale they were placed in the revised scale of Rs. 2200 -
3600.
The High Court having thus proceeded on a wrong
assumption of an essential fact has, possibly for this
reason, incorrectly answered the aforesaid two questions
posed by it. The High Court was wrong in coming to the
conclusion that there has been violation of Article 14 of
the Constitution and that in the method of fixing the pay
of these employees who have been promoted from the highest
category of workers to the Junior most category of officers
on or after 1st January, 1987 must be held to have been
grossly discriminated.
From the facts enumerated hereinabove it is quite
evident that the question of discrimination or violation of
Article 14 of the Constitution does not really arise in the
present case. What has happened is that by reason of two
orders dated 23rd March, 1990 and 1st April, 1991 the pay
scales of the workmen and officers of the appellant company
were revised. The earlier settlement of fixation of pay
between the management and the employees was for the period
of from 1st January, 1983 to 31st December, 1986. Therefore,
with effect from 1st January, 1987 a new pay structure had
to be fixed.As normally happens on 1st January, 1987, or
prior thereto, nor order revising the pay scales was
actually issued. On 23rd March, 1990 the pay scales of the
workers were first revised and this was followed by order
dated 18th April, 1991 whereby the pay scales of the
officers were revised. Both these orders revised the pay
scales with effect from the date, i.e., 1st January, 1987.
What is, therefore, to be seen is as to what was the
position of the respondents 1 to 23 as on that date, i.e.
1st January, 1987. From the facts stated hereinabove it
cannot be disputed that respondents 1 to 23 as on 1st
January, 1987 had not acquired the officers grade and were
working as Assistant Foremen. On the other hand those of the
workers who were in the highest grade and had been placed in
the lowest scale of the officers grade had by 1st January,
1987 already acquired the officers grade. These two
categories of employees, keeping in view their designation
as well as the pay scales which they actually were drawing
as on 1st January, 1987, were clearly in different classes.
Employees like respondents 1 to 23, for the period 1st
January, 1987 to the date on which they were placed in the
officers pay scale on 1st September, 1987, were given the
benefit of the revised pay scale of Rs. 1580-2842 (instead
of the old scale of Rs. 915 - 1520) and were also paid
arrears for the said period on the revised basis. For the
period subsequent to the date of their placement in the
officers scale the said respondents actually continued in
the officers unrevised pay scale of Rs. 960 - 1580 till
they were given the benefit of the revised pay scale of Rs.
2200 - 3600 with effect from 1st September, 1987 as a result
of the aforesaid order dated 18th April, 1991. On the other
hand pre 1st January, 1987 Junior Foreman (W) who were
already in the officers’ scale of Rs. 960 - 1610 as on 31st
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December, 1986 continued to really in the same scale as on
1st January, 1987. They were not given the advantage and
were only placed in the revised workmen’s pay scale of Rs.
1580 - 2842 which was made available to writ petitioners for
the period of 1st January, 1987 to 31st August 1987.
However, when the revised pay scale of Rs. 2200 -3600 for
the officers was made available vide order dated 18th
April, 1991, the same became applicable to them. It was in
order to off set this disadvantage that by para 5.1 of the
impugned circular to such pre 1st January, 1987 Junior
Foreman(W).
From the aforesaid it is clear that the two categories
of Junior Foreman (W) were dealt with by two different sets
of rules because as on 1st January, 1987 they were not
similarly situate. Whereas the respondents herein were
Assistant Foremen, those who were placed in the officers’
grade prior to 1st January, 1987 were regarded as officers.
There could thus be no comparison between these two
categories of persons. These two categories were unequal and
respondents could not, in law, make any grievance of
different principles were adopted in the fixation of their
respective pay scales.
The effect of the High Court Judgment is that the
fixation of pay of post 1st January, 1987 Junior Foremen (W)
like the respondents in the revised officers pay scales has
been done on the basis of their revised grade of Rs. 1580 -
2842. On the other hand the fixation of pay of pre 1st
January, 1987 Junior Foreman (W) has been done on the basis
of unrevised officers grade of Rs. 960 -1610 after giving
them a fitment of Rs. 400/-. The direction to grant the
additional fitment benefit of Rs.400/- to the post of 1st
January, 1987 Junior Foremen (W) whose pay has been done on
revised on the basis of the grade of Rs. 1580 - 2842, would
result in an undue and unjust double advantage would in,
effect, be a reverse discrimination in as much as it the
judgment of the High Court is given effect to then the
respondents would get more emoluments than their seniors who
were placed in the officers scale prior to 1st January,
1987. It has been rightly contended on behalf of the
appellants that the High Court’s judgment will result in
the treatment of the unequals as equals, which was clearly
not contemplated.
Apart from the fact that these two classes of the
employees are different and are governed by different rules,
it is open to the State or appellants to change the
conditions of service unilaterally. As observed in the State
of West Bengal and Ors. Vs. Ratan Behari Dey and Ors.
[(1993)] 4 SCC 63] at page 65 " the employer has the
undoubted power to revise the salaries and/or the pay scales
as also terminal benefits/pensionary benefits. The power to
specify a date from which the revision of pay scales of or
terminal benefits/pensionary benefits, as the case may be,
shall take effect is a concomitant of the said power. So
long as such date is specified in a reasonable manner, i.e.,
without bringing about a discrimination between similarly
situated persons, behalf." In the present case the rules
regarding fixation of pay of the officers and of the workers
were different. With effect from 1st January,1987,
therefore, fresh fixation had to take place. Workers and
officers belong to two different and distinct classes. The
respondents who were not officers as on 1st January,1987
could not claim parity with the persons who were in the
category of officers as on that date. This being so the
appellants could fix the pay scale of workmen on his
appointment after 1st January, 1987 in the officer class on
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a principle different than one which was adopted in revising
the pay of an officer who was adopted in revising the pay
of an officer who was in position as on 1st January, 1987.
Whereas with regard to the respondents it would be a case
of initial fixation of their salaries on their placement in
the officers grade, in the case of pre 1st January, 1987
Junior Foremen it would be a matter of revision of their
salaries in the same grade. It was open to the appellants to
follow different principles in these two cases.
There is also considerable force in the contention of
Sh. V.R. Reddy, learned Additional Solicitor General,
appearing for the appellants, that the High Court ought not
have granted relief to the respondents which they had not
even prayed for in as much as relief prayed for in the writ
petition was only with regard to adjustment of the
personal pay against the incremental benefits. But as the
case had been argued at length on the points decided by the
High Court, we need not advert further on this aspect.
From the aforesaid discussion it follows that para 5.3
of the Office Memorandum dated 13th April, 1991 which
contained the principle on the basis of which pay of the
respondents was fixed in the lowest scale of the officers
grade, is not invalid and the High Court fell in error in
striking it down. This appeal is accordingly allowed, the
judgment of the High Court is set aside the effect of which
could be that the writ petition filed by respondents to 23
is dismissed. The parties will bear their own costs.