A corporation cannot deny equivalent grade pay to similarly classified employees without rational justification.

The petitioners were Class-III employees of the respondent-Corporation in various posts.

Certain categories, including those of the petitioners, had been classified as Class-III and were receiving the pay scale of Rs. 3120–5160; however, they received grade pay of Rs. 1900, while certain other Corporation employees received grade pay of Rs. 3200.

The petitioners sought the higher grade pay from the date of the State Government’s notification dated 27 September 2012.

The Corporation opposed the claim, contending that the notification did not list the petitioners’ categories, did not automatically apply to the Corporation, and that the Corporation’s Board had extended revised grade pay only to specified categories.

The petition was instituted before the Administrative Tribunal on 29 December 2016.

Whether the Corporation’s denial of grade pay of Rs. 3200 to the petitioners’ categories, despite their Class-III classification and the Corporation’s grant of that grade pay to certain other categories, was arbitrary and discriminatory under Article 14.

Whether delay in bringing the claim barred relief, and, if not, from what date arrears could be granted.

Article 14 prohibits arbitrary and discriminatory treatment by the State and its instrumentalities.

Although pay fixation and post-equivalence are generally matters for the executive and expert bodies, judicial review is available where differential treatment is irrational, arbitrary, or unsupported by relevant considerations; the court may intervene where employees are unjustly treated.

The Court also relied on Haryana State Minor Irrigation Tubewells Corporation v. G.S. Uppal, which permits review of pay decisions that are unreasonable, unjust, and prejudicial to a section of employees.

Union of India v. D.G.O.F. Employees Association, which allows correction where entitlement is denied on irrational consideration without proper application of mind.

Under Union of India v. Tarsem Singh, a recurring pay-related wrong may be considered despite delay, but arrears are normally restricted to three years before the filing of the claim.

The Court found that the Corporation had classified the petitioners’ categories as Class-III and that the petitioners’ categories received the same pay scale as categories to which the Corporation had granted grade pay of Rs. 3200.

The Corporation’s sole reason for withholding the benefit—that the petitioners’ categories were not listed in the State Government notification—was insufficient to justify the differential treatment, particularly when the Corporation had extended the revised grade pay to other categories and offered no cogent justification for excluding the petitioners.

The Court therefore treated the continuing monthly shortfall as a recurring wrong, but applied Tarsem Singh to limit arrears to three years before the petition was instituted.

It directed the Corporation to grant that grade pay with effect from 1 January 2014, within six months.

If the arrears were not paid within that period, the Corporation was directed to pay interest at 6% per annum from 1 January 2014 until payment.

No order as to costs.