Delhi High Court

National Institute Of Public ... vs National Institute Of Public ... on 29 January, 2016

Author: Deepa Sharma

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                               Reserved on: 10.12.2015
%                            Decided on : 29.01.2016
+      LPA 783/2012 & C.M.No.5754/2015
       NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY
                                                      ..... Appellant
                    Through: Mr.Manoj Chatterjee, Ms.K.Iyer, and
                              Ms.Drishti Chatterjee, Advocates
                    versus

       NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY
       EMPLOYEES UNION                         ..... Respondent

Through: Mr.Abhishek Singh, Advocate CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA HON'BLE MS. JUSTICE DEEPA SHARMA (JUDGMENT)

1. In this appeal the appellant has impugned the order of the Single

Judge dated 01.08.2012.

2. The brief facts of the case are that the appellant is an autonomous

non-profit organization, registered with the Registrar of Societies on

05.04.1976 and was established with the joint initiative of Ministry of

Finance (hereinafter referred to as 'MOF') and Planning Commission to

carry out research and training activities in the areas of public finance and

policy, public expenditure, budgetry control etc. A Memo of Understanding

(MOU) dated 09.03.1988 was executed between MOF and the appellant.

Under the MOU, the Central Government was to be represented by the

Finance Secretary, Secretary (Revenue) and the Secretary, Planning

Commission. The Chief Economic Advisor, Ministry of Finance and the

Chairman, CBDT and the Chairman, CEBC were to be permanent invitees.

Under the MOU the appellant was required to follow the Central

Government's Rules relating to service conditions and pay and allowances

for its non-professional core-staff and no revision in the scales of pay and

allowances in respect of core staff was permissible except with the approval

of the Ministry of Finance.

3. At the time, when appellant society was formulated and registered, the

pay scale of Assistants and Stenographers was fixed at `450-800 although

the pay scale of Stenographer/Assistants of Central Secretariat Service

(CSS) was fixed at `425-800 after the 3rd Pay Commission Report. After

the 4th Pay Commission recommendations, the appellant adopted the scale of

CSS fixed at `1400-2600 for the Assistants and Stenographers with effect

from 01.01.1986. Subsequently, by OM 31.07.1990 the scale of

Stenographers/Assistants of CSS was increased to `1640-2900. In terms of

the MOU the appellant did not bring the scale of respondents at par with that

of Central Government employees. They consequently raised an industrial

dispute demanding the corresponding increase in their pay scale. A

reference was made to Industrial Tribunal by the appropriate government's

order dated 09.09.1997. The following were the terms of reference:

"Whether the Assistants and Stenographers of National Institute of Public Finance and Policy are entitled to fitment in the grade of Rs. 1640-2900 and revised D.A. and if so,what directions are necessary in this respect?"

4. The Tribunal passed an award dated 12.04.2002 whereby, based on

the statement of Mr.Naveen Bhalla, the appellants' AO granted the relief to

respondents. The relevant statement of Mr.Naveen Bhalla is reproduced:

"The Institute has already implemented the scale of pay in respect of Stenographers Gr.II of Rs.5000-150-8000 to Rs. 5500-175-9000 w.e.f. August 2, 1999 with the approval of governing body of the institute. In respect of payment of arrears to the affected staff members w.e.f. 1.1.1986, the same will be paid to the staff members within three months from today latest by 31.1.2002,towards full and final settlement of this case."

5. In the affidavit filed by appellant through Mr. Naveen Bhalla, the

respondents claim was also admitted. This award was impugned before the

Single Judge. The learned Single Judge after discussing the case laws i.e.

West Bengal Vs. Subhas Kumar Chatterjee and Ors. (2010) 11 SCC 694,

K.T. Veerappa and Ors. Vs. State of Karnataka and Ors. (2006) 9 SCC 406

and State of Haryana Vs. Haryana Civil Secretariat Personal Staff

Association AIR 2002 SC 2589 dealing with the power of judicial review

and relying on findings of the Supreme Court in Yogeshwar Prasad & Ors.

vs. National Inst., Edu.Planning & Admn. & Ors. Civil Appeal Nos.288-

289 of 2005 held as under:

12. However, in the present case there is a peculiar feature which would be evident from the chart below:

              Period               NIPFP     Pay     Central Govt.
                                   Scales            pay     scales
                                                     (CSS)
              1.1.1976        to   450-800           425-800
              1.1.1986 (prior to
              implementation of
              Report of the 4th
              Pay Commission)
              1.1.1986        to   1400-2600         1400-2600
              31.7.1990 (after
              coming into force
              of     4th    Pay
              Commission)
              31.7.1990      the   1400-2600         1640-2900. This
              Government                             revision     was
              issued      Office                     granted to the
              Memorandum                             CSSS staff with
              revising the pay                       effect      from
              scale           of                     1.1.1986     and
              Stenographers                          because of this
              Grade-II      and                      revision the pay
              Assistants      of                     scale of Rs.
              Central                                425- 800 (pre
              Secretariat                            4th Commission
              Services                               pay        scale)
                                                     which was post
                                                     4th          Pay
                                                     Commission
                                                     1400-2600 was
                                                     revised to Rs.
                                                     1640-2900.
              1.1.1996        to   5000-8000         5500-9000



               1.8.199
              2.8.1999-               5500-9000            5500-9000
              1.1.2006
              1.1.2006 till date      9300-34800           9300-34800

13. A perusal of the above chart shows that from 1.1.1976 to 1.1.1986 the members of the Respondent No.3 were getting a higher pay scale than the employees working in the same cadre in the Central Secretariat. The disparity arose because of the Office Memorandum dated 31st July, 1990 revising the pay scale of the Central Secretariat employees to 1640-2900 with retrospective effect from 1.1.1986 and from 1.1.1996 to 1.8.1999 when the Central Secretariat employees were getting Rs. 5500- 9000 as against the members of the Respondent No.3 getting scale of Rs. 5000-8000. Thereafter again the members of the Respondent No.3 and the Central Secretariat employees are getting the same pay scales. On the own showing of the Petitioner it is thus evident that the arguments that there is a difference in the work, recruitment rules, educational qualifications, duty hours, etc., as raised by the learned counsel for the Petitioner hold no merit because the Government itself has provided pay parity to the members of the Respondent No.3 with the Central Secretariat employees on number of occasions. Dealing with a similar issue, the Hon'ble Supreme Court in Yogeshwar Prasad and Ors. (supra) held:

"12. The short question which arises for consideration in these appeals is why the appellants should not be given the pay scale of Rs 1640-2900 from the date when their counterparts have been given that pay scale in the Central Government? Although the stand of the Institute has also been that the appellants are entitled for the pay scale of Rs 1640-2900 which is quite evident from the aforementioned letters sent by the respondent Institute to the Central Government. The Union of

India has now in the Vth and VIth Pay Commissions given that scale to the appellants.

13. In our considered view, the Division Bench was not justified in setting aside the judgment of the learned Single Judge. It may be pertinent to mention that the Division Bench did not consider the service regulations of the National Institute of Educational Planning and Administration. The case of Appellant 1 herein was not even discussed or considered in the impugned judgment.

14. Mr Amitesh Kumar, learned counsel appearing for Respondent no. 1 Institute tried to make out the case that duties, responsibilities and obligations of the appellants were different to their counterparts functioning in the Central Secretariat and they were justified in not giving the same pay scale. But we do not find any merit in the submission because the respondent Institute's stand all through was that the appellants be given the pay scale of Rs 1640-2900. At this stage, Respondent no.1 cannot be permitted to take a somersault in this manner. The Union of India accepted the recommendations of the Vth and VIth Pay Commissions and are giving the appellants the same pay scale which their counterparts in the Central Government are getting. It may be pertinent to observe that these appellants were getting the same pay scale as was given to the employees of their categories in the Central Government up to 1- 1-1986. The Union of India accepted the recommendation of the Vth and VIth Pay Commissions and are giving them same pay scale then how only during the IVth Pay Commission their pay scale could be different and how their duties, obligations and responsibilities became different only for a brief period?"

14. The law is thus settled that though the High Court in its power under Article 226 of the Constitution of India would not direct pay parity and leave the same to the

wisdom of the administrators, however, where the decision is unjust, arbitrary, prejudicial to a section of the employees and taken in ignorance of material and relevant facts, the Courts will interfere with the administrative decisions of fixation of pay scale. It would be thus seen that the Government of India has been treating the members of the Respondent No.3 either on higher side or at par with the Central Secretariat employees from 1st January, 1976 to 1st January, 1986 and from 2nd August, 1999 till date. There is no reason for basing the disparity in the period commencing from 1.1.1986. In the peculiar facts of the present case the Petitioner is directed to grant pay scale of Rs.1640-2900 and revised DA to the members of Respondent No.3 with effect from 1.1.1986 which is revised to Rs. 5500- 175- 9000 w.e.f. 2.8.1999. Arrears of pay be paid within four months.

6. The appellant challenges the impugned judgment on the ground that

the Assistants and the Group 'C' Stenographers of Central Secretariat

Stenographers Service (CSSS) and Central Secretariat Service (CSS) are not

comparable to the Assistants and Stenographers in its organization in terms

of the recruitment rules, educational qualification, method of recruitment,

duties, responsibilities, classification of posts etc. and that the designation

cannot be the sole determinant for purposes of pay scales. It is further

contended that the respondents are also not entitled to the pay parity for the

reason that the Department of Education by Office Memorandum dated

11.12.1990 had categorically instructed the Ministry/Departments to roll

back the extended pay scales to all the persons who do not belong to

CSS/CSSS. It is further submitted that even the 5th Pay Commission did not

recommend the pay parity for the respondents' staff with that of staff of the

CSS and CSSS since they were placed in the pay scale of `5000-8000. Also

that the wisdom of Pay Commission recommendations cannot be questioned

before the Court. It is further contended that this court lacks jurisdiction

under Article 226 of the Constitution of India to issue directions to the

Central Government to grant a particular pay scale to its employees.

7. It is submitted that learned Single Judge exceeded her jurisdiction and

failed to consider the various pronouncements wherein the claim for parity

with the staff of CSS and CSSS had been rejected. Reliance is placed on the

findings in the case of Union of India vs. Tarit Ranjan Das 2004 (2) ALT

48 SC, Chairman, National Productivity Council vs. Association of

Employees of National Productivity Council 2008 (150) DLT 618,

S.K.Sharma vs. National Council for Cement of Building Material and

Anr. 2013 (134) DRJ 397, Jagmohan Sharma & Ors. vs. NIPCCD & Ors.

W.P.(C) 7958/2011, APEDA Assistant and Stenographer - I Employees

Association vs. Union of India & Ors. LPA 635/2015.

8. The respondents on the other hand have relied upon on the findings in

the case of Yogeshwar Prasad's case (supra). The relevant para is

reproduced as under:

"It may be pertinent to observe that these appellants were getting the same pay scale as was given to the employees of their categories in the Central Government up to 1.1.1986. The Union of India accepted the recommendation of the Vth and VIth Pay Commissions and are giving them same pay scale then how only during the IIIrd Pay Commission their pay scale could be different? and how their duties, obligations and responsibilities became different only for a brief period?"

9. It is further argued that the case law relied upon by the appellant has

no application to facts of this case because in the present case the pay scale

of the Assistants and Stenographer of the appellant organization was fixed at

`450-800 with effect from 01.01.1976, whereas that of the Central

Government employees was fixed at `425-800 by the Third Pay

Commission. However, after the Fourth Pay Commission recommendation,

parity was granted and both were placed in the pay scale of `1400-2600/-

with effect from 01.01.1986. While by Office memorandum dated

31.07.1990 issued in terms of the order dated 23.05.1989 in OA

No.1538/1987 (of the Central Administrative Tribunal, Principal Bench,

Delhi) the pay scale of Stenographers Grade II and Assistants of CSS and

staff of CSSS was enhanced to `1640-2900 from `1400-2600, the appellant

did not correspondingly increase the scale of the respondent which it was

required to do under MOU which mandates that the appellant was to follow

Central Government rules regarding service conditions and pay and scale of

its non-professional staff.

10. It is further contended that with effect from 02.08.1999 the scale of

respondents was brought at par with that of Central Government employees

and their pay is now fixed in the scale of `5500-9000. It is further submitted

that this pay parity was also maintained in the Sixth Pay Commission and its

respondents were also given the same scale i.e. `9300-34800 at par with the

employees of CSS and CSSS. It is further submitted that the disparity

between the scales of the respondents and that of CSS and CSSS staff

remained only during the said short period between 01.01.1986 to

01.08.1999. It is submitted that the case law relied upon by the appellant

has no bearing to the facts of this case because the parity between the scales

of respondents and that of CSS and CSSS had never been disputed by the

appellants. It is submitted that the denial of pay parity during this period i.e.

01.01.1986 to 01.08.1999 is arbitrary, baseless and unfounded. It is further

contended that the learned Single Judge has considered all the materials on

the record and the impugned judgment does not suffer from any illegality

and therefore the present appeal is liable to be dismissed.

11. We carefully considered the rival contentions of the parties and

considered the record.

12. There is no dispute that the pay scale of respondents during the period

01.01.1976 to 01.01.1986 was higher than that of staff of the Central

Government; pursuant to the recommendations of the 4th Pay Commission

the Government had fixed the scale of both (the employees of the appellant

and that of CSS) in the same scale i.e. `1400-2600. It is also a fact that

subsequently by an office memorandum dated 31.07.1990, the government

revised the scale of employees of CSS and CSSS and placed them in the

scale of `1640-2900 while the respondents continued to be in the scale of

`1400-2600. It is also undisputed that as per the terms of MOU the

respondents were to be governed by Central Government rules and norms

relating to their service condition and pay and allowances. The appellant

however could not have revised the scale of pay and allowances of the

respondents without concurrence/approval of the Ministry of Finance, in

view of express prohibition under the MOU. Under the MOU, policy

decisions could be taken only by the governing body and the governing

body has not only the representatives of MOF and Ministry of Planning but

also economic advisor of MOF and Secretary of Revenue department of

Government of India besides other representatives. The relevant clause of

MOU is reproduced as under:

".... Under the Memorandum of Association and Rules of the Institute, all policy matters are to be decided by its Governing body on which the Central Government is represented by the Finance Secretary, Secretary (Revenue) and the Secretary, Planning Commission, while the Chief Economic Advisor, Ministry of Finance, Chairman, CBDT, and Chairman, CBEC are permanent invitees. Three among the members States are represented by their Finance Secretaries by rotation. The Governing Body also includes a few distinguished economists and heads of specified sister research institutions."

13. In terms of the MOU the Governing Body of the appellant, which has

the representatives of Central Government (Finance Secretary, Secretary

(Revenue) and the Chief Economic Advisor, Ministry of Finance and the

Chairman, CBDT and the Chairman, CEBC are the permanent invitees) is

competent to take a policy decision. If the Governing Body takes makes

certain policy decisions, it can reasonably be termed as a decision in

concurrence with the Central Government (which also includes MOF). It

is also a fact that before the Industrial Tribunal Mr.Naveen Bhalla, AO of

the appellant had made a statement wherein he had admitted that the

appellant, with the approval of the Governing Body had revised the scale of

pay of respondents from `5000-150-8000 to `5500-175-9000 with effect

from 02.08.1999 and also undertook to pay the arrears with effect from

01.01.1986 within three months. The abstract of the Minutes of Meeting of

the Governing Body held on 07.08.2000 regarding Item No.9 is reproduced

as under:

"ABSTRACT OF THE MINUTES OF THE GOVERNING BODY MEETING HELD ON AUGUST 7, 2000. REFER ITEM NO.9 Agenda Item 9:

Proposal to revise the scale of pay attached to the post of Stenographer Grade-II.

The Director informed the members that the Governing Body at its meeting held on July 31, 1999 approved the proposal for upgradation of the scale of pay attached to the post of Assistants to the Government of India. Accordingly, the pay scale attached to the post of Assistants was upgraded to Rs.5500-175-9000 with effect from August 2, 1999.

The Director Further informed that in the Central Government, Stenographer Grade-II a post equivalent to the post of Assistant, are also placed in the scale of pay of Rs.5500-175-9000, whereas the Stenographer Grade-II in the Institute are presently in the scale of pay of Rs.5000- 150-8000. In order to remove the anomaly, it is proposed that the scale of pay attached to the post of Stenographer Grade-II may also be revised to Rs.5500-175-9000 to bring them at par with the Assistants of the Institute, with effect from August 2, 1999.

After a brief discussion, the Governing Body approved the proposal to revise the scale of pay attached to the post of Stenographer Grade-II from Rs.5000-150-8000 to Rs.5500-175-9000, to bring them at par with the Assistants of the Institute, with effect from August 2, 1999."

14. The appellant had also filed an affidavit of Sh.Naveen Bhalla, AO

before the Industrial Tribunal wherein the respondents' claim was admitted.

The appellant's governing body had thus revised the pay scale of

respondents and brought it at par with that of CSS and CSSS with effect

from 02.08.1999 and subsequent to VIth Pay Commission recommendations

that parity was maintained. The matter thus relates to the grant of pay parity

during the period 01.01.1986 to 01.08.1999.

15. The appellants' contention that this court lacks jurisdiction under

Article 226 of the Constitution of India to direct pay parity and its reliance

on the case law cited in support of such contention has no relevance in the

peculiar facts of this case. Here at the time when appellant organization was

created way back in 1976, the respondents were placed in higher pay scale