The Mineral Exploration Corpn. ... vs N.S.N. Prasad
2022 Latest Caselaw 1029 Tel

THE HON'BLE THE CHIEF JUSTICE SATISH CHANDRA SHARMA
                                  AND
    THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI



      WRIT APPEAL Nos.999, 1030, 1017 of 2007
                       and 1843 of 2008

COMMON JUDGMENT:       (Per the Hon'ble the Chief Justice Satish Chandra Sharma)


     Regard being had to the controversy involved in the

aforesaid cases, they were heard together and are being

decided by a common judgment.

     The facts of W.A.No.999 of 2007 are reproduced as

under:

     The present writ appeal is arising out of an order

dated 01.10.2007 passed by the learned Single Judge in

Review W.P.M.P.No.27079 of 2007 in W.P.No.9810 of 1998.

     The facts of the case reveal that the respondent No.1

herein/writ petitioner (hereinafter referred to as, the

employee), who was serving the Mineral Exploration

Corporation Limited, was paid salary as per the Central

Dearness Allowance (CDA) pattern until he retired from

service voluntarily. The employee, in the light of the

instructions issued by the Management dated 21.10.1995

has accepted the voluntary retirement with effect from

31.07.1997. The employee received all the benefits under

the said voluntary retirement scheme. In spite of the

same, the employee filed the writ petition seeking arrears of

wages under the V Pay Revision Commission

Recommendations. The said writ petition has been

disposed of directing the respondents in the writ petition to

fix the pay of the employee notionally with effect from

01.01.1997 till the date of his voluntary retirement i.e.,

31.07.1997 and a direction has also been issued for

payment of all arrears of retiral benefits to the employee.

The Mineral Exploration Corporation Limited and another

(hereinafter referred to as, the employer) has filed the

review petition challenging the aforesaid order. The said

review petition was dismissed, against which the present

writ appeal has been preferred by the employer.

Learned counsel for the employer has drawn the

attention of this Court towards the decision of the Hon'ble

Supreme Court in the case of Mineral Exploration

Corporation Limited v. Arvind Kumar Dixit and

another1. The dispute therein was in respect of wage

revision and the writ petitions preferred by the employees

were transferred to the Central Administrative Tribunal,

Mumbai, and the Central Administrative Tribunal has held

that the employees who retired on or before 01.04.2003

would be given similar treatment by revision in notional

pay (with actual pensionary benefits). Challenging the said

order, the Mineral Exploration Corporation Limited has

approached the Bombay High Court by filing writ petitions

which were dismissed. The matter was then carried to the

Hon'ble Supreme Court and the Hon'ble Supreme Court

has allowed the appeals by setting aside the judgment of

the Bombay High Court and the Central Administrative

Tribunal.

Learned counsel for the employee in the present case

has argued before this Court that the employee was

seeking wage revision with effect from 01.01.1997.

The issue of wage revision from 01.01.1997 has also

been looked into by the Hon'ble Supreme Court and the

fact reveals that the employer has issued an order dated

1 (2015) 2 SCC 535

25.08.2006 stating thereunder that even though wage

revision was due from 01.01.1997, the wage revision was

to be implemented with effect from 01.04.2006 allowing the

employees who were superannuated/voluntarily retired

with effect from 01.04.2003.

The relevant portion of the judgment delivered by the

Hon'ble Supreme Court in the case of Mineral Exploration

Corporation Limited (supra) is reproduced as under:-

"11. From the above Letter dated 8-8-2006, it is clear that wage revision of the employees, effective only from 1-4-2003, was to be implemented w.e.f. 1-4-2006. In this connection, when the clarification is sought by the appellant Corporation, the Government of India vide Letter dated 17- 8-2006 (Annexure P-13), clarified its stand on the recommendations of the Board for Reconstruction of Public Sector Enterprises (BRPSE). Accordingly, Office Order dated 25-8-2006 was issued by the appellant Corporation allowing wage revision to those who were on employment roll on 1-4- 2003. The conjoint reading of the letters issued by the Government of India makes it amply clear that the wage revision was to be implemented with effect from 1-4-2006 allowing the employees who were superannuated/voluntarily retired with effect from 1-4- 2003. As such, we find no difficulty in accepting the argument advanced on behalf of the appellant that only those employees are entitled to the wage revision who were on roll as on 1-4-2003 as mentioned in the Office Order dated 25-8-2006 (Annexure P-14).

12. On behalf of the contesting respondents it is contended that the respondents are not claiming the actual benefits but only notional wage revision for the period between 1-1-1997 till their date of superannuation/voluntary retirement (prior to 1-4-2003); as such the Tribunal and the High Court have committed no error of law in allowing the same.

13. Mr. Gourab Banerji, learned Senior Counsel for the appellant, responded to the above contention stating that if such notional wage revision is permitted prior to 1-4-2003, the actual difference in computation of pension would practically take back the appellant Corporation to the position where it was continuously running into huge losses. It is vehemently argued that if the wage revision office order is interpreted to include all the employees who were superannuated/voluntarily retired between 1-4-1997 to 1-4-2003, it would frustrate the measures taken, including the voluntary retirement scheme, to improve the condition of public sector undertaking.

14. We have considered the rival submissions of the parties. It is relevant to discuss here what is the law laid down by this Court in such matters. In A.K. Bindal v. Union of India [(2003) 5 SCC 163 : 2003 SCC (L&S) 620], this Court has observed as under: (SCC pp. 175-76, para

17)

"17. The legal position is that identity of the government company remains distinct from the Government. The government company is not identified with the Union but has been placed under a special system of control and conferred certain privileges by virtue of the provisions contained in Sections 619 and 620 of the Companies Act. Merely because the entire shareholding is owned by the Central Government will not make the incorporated company as Central Government. It is also equally well settled that the employees of the government company are not civil servants and

so are not entitled to the protection afforded by Article 311 of the Constitution (Pyare Lal Sharma v. J&K Industries Ltd. [(1989) 3 SCC 448 : 1989 SCC (L&S) 484] ). Since 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 scale 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 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. It appears that prior to issuance of the office memorandum dated 12-4-1993 the Government had been providing the necessary funds for the management of public sector enterprises which had been incurring losses. After the change in economic policy introduced in the early nineties, the Government took a decision that the public sector undertakings will have to generate their own resources to meet the additional expenditure incurred on account of increase in wages and that the Government will not provide any funds for the same. Such of the public sector enterprises (government companies) which had become sick and had been referred to BIFR, were obviously running on huge losses and did not have their own resources to meet the financial liability which would have been incurred by revision of pay scales. By the office memorandum dated 19-7- 1995 the Government merely reiterated its earlier stand and issued a caution that till a decision was taken to revive the undertakings, no revision in pay scale should be allowed. We, therefore, do not find any infirmity, legal or constitutional in the two office memorandums which have been challenged in the writ petitions."

15. In Officers & Supervisors of I.D.P.L. v. I.D.P.L. [(2003) 6 SCC 490 : 2003 SCC (L&S) 916] , this Court has held as under: (SCC p. 497, para 11)

"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 to 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 shows 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 organisation in which they are working are making continuous losses and are deeply in the red."

16. The abovementioned cases, in our opinion, substantiate the argument of the appellant. Therefore, we are of the view that the Central Administrative Tribunal and the High Court have erred in law in allowing the wage revision benefits to the employees, who were not covered either under communication dated 8-8-2006 issued by the Government of India or the consequential Office Order dated 25-8-2006 whereby the wage revision is implemented.

17. It is also contended on behalf of the respondents that the cut-off date i.e. 1-4-2003 fixed in the above orders is arbitrary and irrational. As to the cut-off date fixed for the purposes of pensionary benefits to the employees, who have retired or died, in State of Punjab v. Amar Nath Goyal [(2005) 6 SCC 754 : 2005 SCC (L&S) 910] , paras 26 and 37 read as under: (SCC pp. 763 & 766)

"26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1-4-1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level.

***

37. In the instant case before us, the cut-off date has been fixed as 1-4-1995 on a very valid ground, namely, that of financial constraints. Consequently, we reject the contention that fixing of the cut-off date was arbitrary, irrational or had no rational basis or that it offends Article

14."

18. In Sudhir Kumar Consul v. Allahabad Bank [(2011) 3 SCC 486 : (2011) 1 SCC (L&S) 538] , which also pertains to the question of fixing of cut-off date for granting retirement benefits, this Court has laid down, in para 18, as under: (SCC p. 491)

"18. Moreover, the fixing of the cut-off date for granting retirement benefits such as gratuity or pension under the different schemes incorporated in the subordinate legislation, thereby, creating two distinct and separate classes of employees is well within the ambit of Article 14 of the Constitution. The differential treatment of two sets of officers appointed prior to the notified date would not offend Article 14 of the Constitution. The cut-off date may be justified on the ground that additional outlay as involved or the fact that under the terms of appointment, the employee was not entitled to the benefit of pension or retirement."

19. In view of the above law laid down by this Court, we do not find that the cut-off date i.e. 1-4-2003 for granting wage revision, in the facts and circumstances of the present case, is arbitrary nor do we find it violative of Article 14 of the Constitution.

20. For the reasons, as discussed above, we hold that the employees, who were superannuated or voluntarily retired prior to 1-4-2003 from the appellant Corporation, are not entitled to notional wage revision as directed by the Central Administrative Tribunal, and the High Court. Therefore, we allow these appeals, and the impugned judgment [Mineral Exploration Corpn. Ltd. v. Arvind Kumar Dixit, WP No. 3116 of 2011, decided on 30-3-2012 (Bom)] of the High Court and that of the Central Administrative

Tribunal are hereby set aside. There shall be no order as to costs."

In the light of the aforesaid, as the controversy in the

present case has already been concluded, the writ appeals

deserve to be allowed in terms of the aforesaid judgment

delivered by the Hon'ble Supreme Court and the impugned

orders passed by the learned Single Judge are set aside.

Resultantly, all the writ appeals are accordingly

allowed.

The miscellaneous applications pending, if any, shall

stand closed. There shall be no order as to costs.

______________________________________ SATISH CHANDRA SHARMA, CJ

______________________________________ ABHINAND KUMAR SHAVILI, J

04.03.2022 vs