Delhi High Court
P.K. Mohandas & Ors vs Union Of India & Anr. on 20 May, 2015
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) No. 5751/2002
% 20th May, 2015
P.K. MOHANDAS & ORS ..... Petitioners
Through: Mr. Harish Sharma and Mr.
B.K.Saini, Advocates.
versus
UNION OF INDIA & ANR. ..... Respondents
Through: Mr. Kirtiman Singh, CGSC with Mr.
Waize Ali Noor and Ms. Prerna Shah
Deo, Advocates for R-1.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This writ petition is filed under Article 226 of the Constitution
of India by the erstwhile employees of the respondent no.2/Company, and
which petitioners have already retired after taking the Voluntary Separation
Scheme (VSS) benefits.
2. A similar petition claiming similar reliefs was W.P.(C) No.
705/1998 and this writ petition was dismissed by this Court on 2.7.2013.
WP(C) 5751/2002 Page 1 of 8
Even the review petition filed being Review Petition No. 436/2013 was
dismissed on 6.9.2013. These judgments dated 2.7.2013 and 6.9.2013 read
as under:-
" Judgment dated 2.7.2013:-
1. No one is present on behalf of the parties although it is
3.15 P.M. This matter is effective Item No. 5 on the Regular
Board of this Court. I have therefore perused the record and
am proceeding to decide the matter.
2. By this writ petition, the petitioner, which is an
association of employees of the respondent No. 3/employer,
seeks fixation of particular pay scales. The relief clauses of
the writ petition read as under:
"A. Quashing the circular or direction of the first
respondent expressed in letter annexed at Annexure P-4,
and direct the Union of India to implement the new pay
scales to all public Sector Enterprises uniformly, and in
particular, to the respondent no. 3.
B. Directing the respondents no. 1 and 2 to treat the
respondent no. 3 in parity with all other Public Sector
Enterprises, and to give a rational and upgraded pay
scales to the employees of the respondent no. 3, in
accordance with the prevailing pay scales in other
Public Sector Enterprises.
C. Directing respondents 1 and 2 to grant the new
pay scales to the petitioner's members with effect from
1 January, 1992.
D. Any other order that may be deemed fit in the
circumstances may also be passed."
WP(C) 5751/2002 Page 2 of 8
3. In the counter affidavits filed by the respondents, it is
stated that respondent No. 3 does not have the necessary
financial resources to grant the higher scales of pay. In the
counter affidavits, it is averred that the respondent No. 3 has
been making losses and cannot generate the funds for higher
scales of pay.
4. The Supreme Court in its recent judgment in the case of
Indian Drugs & Pharmaceuticals Ltd. Vs. Workmen, Indian
Drugs & Pharmaceuticals Ltd., (2007) 1 SCC 408 held that
Courts cannot step in and fix salaries of employees of an
organisation because the employer knows best its financial
conditions and other circumstances for deciding about what
should be the payments made to its employees. The Supreme
Court has cautioned against taking over of executive functions
because courts are ill-equipped to do so. The Supreme Court
further observed that certain decisions are best left with the
executive and the administration. The relevant observations of
the Supreme Court are contained in paragraphs 16, 18, 37 and
40 and which read as under:
" 16.We are afraid that the Labour Court and the High Court
have passed their orders on the basis of emotions and
sympathies, but cases in court have to be decided on legal
principles and not on the basis of emotions and sympathies.
18.In State of M.P. v. Yogesh Chandra Dubey this Court held
that a post must be created and/or sanctioned before filling it
up. If an employee is not appointed against a sanctioned post
he is not entitled to any scale of pay. In our opinion, the ratio
of the aforesaid decision squarely applies to the facts of the
present case also.
37.Creation and abolition of posts and regularisation are
purely executive functions vide P.U. Joshi v. Accountant
General. Hence, the court cannot create a post where none
exists. Also, we cannot issue any direction to absorb the
respondents or continue them in service, or pay them salaries
of regular employees, as these are purely executive functions.
This Court cannot arrogate to itself the powers of the
executive or legislature. There is broad separation of powers
under the Constitution, and the judiciary, to, must know its
limits.
WP(C) 5751/2002 Page 3 of 8
40. The Courts must, therefore, exercise judicial restraint,
and not encroach into the executive or legislative domain.
Orders for creation of posts, appointment or these posts,
regularisation, fixing pay scales, continuation in service,
promotions, etc. are all executive or legislative functions, and
it is highly improver for Judges to step into this sphere,
except in a rare and exceptional cases. The relevant case-law
and philosophy of judicial restraint has been laid down by the
Madras High Court in great detail in Rama
Muthuramalingam v. Dy. Supdt. Of Police and we fully agree
with the views expressed therein."
5. Accordingly, the prayers asked for in the writ petition
cannot be granted as it would violate the categorical ratio laid
down by the Supreme Court in the case of Indian Drugs &
Pharmaceuticals Ltd. (supra).
6. The writ petition is accordingly dismissed, leaving the
parties to bear their own costs.
Review Petition order dated 6.9.2013:-
C.M. No.12444/2013 (exemption)
Exemption allowed subject to just exceptions.
C.M. stands disposed of.
Review Petition No.436/2013
1. This is a petition for review of the judgment dated
2.7.2013. No one appeared for the petitioner when the judgment was
passed on 2.7.2013. No one appears for the petitioner today. There is
no error apparent on the face of the record as stated in the application
because the judgment in the case of Indian Drugs & Pharmaceuticals
Ltd. Vs. Workmen, Indian Drugs & Pharmaceuticals Ltd., (2007) 1
SCC 408 has been rightly applied. In fact, in another case of Officers
WP(C) 5751/2002 Page 4 of 8
& Supervisors of I.D.P.L Vs. Chairman & M. D. IDPL(2003) 6 SCC
490 it has been held by the Supreme Court 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 and Anr. v. Union of India
and Ors. 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 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.
............
13. We have already reproduced the directions passed by this Court in Jute
Corporation of India Officers' Association (supra). However, after the said
judgment in which conditional directions were issued, as is apparent, the
Central Government vide its O.M. 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 No. (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 No. (i) cannot be implemented."
(underlining added).
2. Therefore, Courts cannot issue directions much less to
sick companies to grant monetary benefits to its employees when the
effect of grant of monetary benefits would be to put unnecessary
financial burden on the institution. Aspect of monetary burden is best
decided by the institution itself and not the Courts.
3. Dismissed."
3. Clearly therefore petitioners have no case not only because of
the ratio of the judgment of the Supreme Court in the case of A.K. Bindal
and Another Vs. Union of India and Others, (2003) 5 SCC 163 which
holds that employees who have taken VRS/VSS after taking VRS/VSS
cannot seek monetary benefits inasmuch as on taking VSS the umbilical
cord of the relationship of employer and employee snaps. Also the Supreme
Court has held in the case of Indian Drugs & Pharmaceuticals Ltd. Vs.
Workmen, Indian Drugs & Pharmaceuticals Ltd. (2007) 1 SCC 408 that
courts cannot fix the pay-scales of employees, and the relevant observations
in this regard of the Supreme Court have been reproduced in para 4 of the
judgment dated 2.7.2013.
4. It is also required to be noted that respondent no.2 was a sick
company and ordered to be wound up and therefore the ratio 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 applies and which
is quoted in the review petition order dated 6.9.2013. The ratio of I.D.P.L.'s
case (supra) will squarely apply because employees of a sick company
cannot insist and get particular pay-scales, and this is all the more so with
respect to the petitioners who have already taken VSS and therefore cannot
approach the court in view of the ratio of A.K. Bindal's case (supra).
5. Dismissed.
MAY 20, 2015 VALMIKI J. MEHTA, J.
ib
