Delhi High Court
Iisco Officers??? Association vs Steel Authority Of India Ltd. & ... on 18 March, 2015
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) No.4212/2001
% 18th March, 2015
IISCO OFFICERS' ASSOCIATION ..... Petitioner
Through: None.
versus
STEEL AUTHORITY OF INDIA LTD. & ORS. ..... Respondents
Through: None.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. By this writ petition filed under Article 226 of the Constitution of
India, the petitioner, which is an association of the employees of the
respondent no.2/company/Indian Iron and Steel Co. Ltd. (IISCO), seeks the
relief of same monetary emoluments which are being granted by the
respondent no.1/Steel Authority of India Ltd. (SAIL) to its employees. The
reliefs claimed by the petitioner for being granted at par monetary
emoluments being granted to the employees of the respondent no.1 are on
the basis that the respondent no.2/company is a subsidiary company of the
respondent no.1 and hence there should be parity of pay-scales.
WP(C) 4212/2001 Page 1 of 5
2. The counter-affidavit filed by the respondents no.3 and 4 shows that
the respondent no. 2/company has been referred to BIFR as a sick company.
3. It is now settled law in view of the judgment of the Supreme Court in
the case of Officers & Supervisors of I.D.P.L. Vs. Chairman & M.D.
I.D.P.L. and Ors., 2003 (6) SCC 490 that there is no legal right of
employees of a sick government company to claim that they are entitled to
particular higher monetary benefits and perks. The Supreme Court in this
judgment has held that pay-scales have to be fixed by the competent
authority and such decisions have to be taken in terms of the financial
position of the company. The relevant paragraphs of the judgment in the
case of Officers & Supervisors of I.D.P.L. (supra) read as under:-
"7. In the above background, the question which arises for
consideration is whether the employees of public sector enterprises
have any legal right to claim revision of wages that though the
industrial undertakings or the companies in which they are working
did not have the financial capacity to grant revision in pay scale, yet
the Government should give financial support to meet the additional
expenditure incurred in that regard.
8. We have carefully gone through the pleadings, the Annexures filed
by both sides and the orders passed by the BIFR and the judgments
cited by the counsel appearing on either side. Learned counsel for the
contesting respondent drew our attention to a recent judgment of this
Court in A.K. Bindal v. Union of India: (2003) 5 SCC 163 in support
of her contention. We have perused the said judgment. In our opinion,
since the employees of government companies are not government
servants, they have absolutely no legal right to claim that the
Government should pay their salary or that the additional expenditure
incurred on account of revision of their pay scales should be met by
WP(C) 4212/2001 Page 2 of 5
the Government. Being employees of the companies, it is the
responsibility of the companies to pay them salary and if the company
is sustaining losses continuously over a period and does not have the
financial capacity to revise or enhance the pay scale, the petitioners, in
our view, cannot claim any legal right to ask for a direction to the
Central Government to meet the additional expenditure which may be
incurred on account of revision of pay scales. We are unable to
countenance the submission made by Mr Sanghi that economic
viability of the industrial unit or the financial capacity of the employer
cannot be taken into consideration in the matter of revision of pay-
scales of the employees.
............
11. In our view, the economic capability of the employer also plays a
crucial part in it; as also its capacity to expand business or earn more
profits. The contention of Mr Sanghi, if accepted, that granting higher
remuneration and emoluments and revision of pay to workers in other
governmental undertakings and, therefore, the petitioners are also
entitled for the grant of pay revision may, in our opinion, only lead to
undesirable results. Enough material was placed on record before us
by the respondents which clearly show that the first respondent had
been suffering heavy losses for the last many years. In such a situation
the petitioners, in our opinion, cannot legitimately claim that their pay
scales should necessarily be revised and enhanced even though the
organization in which they are working are making continuous losses
and are deeply in the red. As could be seen from the counter affidavit,
the first respondent company which is engaged in the manufacture of
medicines became sick industrial company for various reasons and
was declared as such by the BIFR and the revival package which was
formulated and later approved by the BIFR for implementation could
not also be given effect to and that the modifications recommended by
the Government of India to the BIFR in the existing revival package
was ordered to be examined by an operating agency and, in fact, IDBI
was appointed as an operating agency under Section 17(3) of SICA. It
is also not in dispute that the production activities had to be stopped in
the major two units of the company at Rishikesh and Hyderabad w.e.f.
October, 1996 and the losses and liabilities are increasing every month
and that the payment of three installments of interim relief could not
also be made due to the threat of industrial unrest and the wage
revision in respect of other employees is also due w.e.f. 1992 which
has also not been sanctioned by the Government of India.
............
WP(C) 4212/2001 Page 3 of 5
13. We have already reproduced the directions passed by this Court in
Jute Corpn. of India Officers' Assn. v. Jute Corpn. Of India Ltd.:
(1990) 3 SCC 436. However, after the said judgment in which
conditional directions were issued, as is apparent, the Central
Government vide its OM dated 19-07-1995 decided as follows:-
"13. For SICK, PSC registered with the BIFR pay revision and
grant of other benefits will be allowed only if it is decided to
revive the unit. The revival package should include the enhanced
liability on this account. The benefit of pay revision etc. shall be
extended to IISCO and financial liability thereof shall be met by
SAIL."
.............
17. In A.K. Bindal (supra), this Court specifically held that the
economic viability or the financial capacity of the employer is an
important factor which cannot be ignored while fixing the wage
structure, otherwise the unit itself may not be able to function and may
have to close down which will inevitably have disastrous
consequences for the employees themselves. The Court also negatived
other contentions raised by the employees and referred to and relied
upon the fact that the Company was a sick unit. Facts in the present
case are similar.
18. Further, directions issued in Jute Corporation of India Officers'
Association (supra) would have no bearing in the present case as the
Scheme under the SICA has failed to revive the Company. When the
Company cannot be revived because of large losses, there is no
question of enhancing scales of pay and dearness allowances.
Direction (ii) issued in that case indicates that the employees appointed
on or after January 1, 1989 will be governed by such pay scales and
allowances as may be decided by the Government in its discretion. If
the company itself is dying, the Government has discretion not to grant
enhanced pay scales or dearness allowances and for the same reason
Direction (i) cannot be implemented." (underlining added).
WP(C) 4212/2001 Page 4 of 5
4. In view of the above, petitioner cannot claim parity for
monetary emoluments of employees of respondent no.2 with the monetary
emoluments being paid to the employees of respondent no.1.
5. Dismissed.
MARCH 18, 2015 VALMIKI J. MEHTA, J.
ib
