Bihar State Financial Corporation Karamchari Federation Vs. Bihar State Financial Corporation and ors. - Court Judgment

Excerpt:
state finance corporation act, 1951, section 23-salary revision-litigation very old without any finality-a statutory body whether empowered to revise salary scale-whether can stay an increase in pay scales-earlier revisions not implemented-earliest revision effected two deceases back-rebuttal-state financial corporation employees received two revisional during pendency of dispute-5th and 6th pay commissions benefitted them-no revision due-joint meeting proper process to sort out variance-held, scope and powers of executive and legislative powers to deal with main issue-court directs to pay earlier revised scales-arrears claimable by employees-corporation to oblige them accordingly-letter denying claim quashed-application allowed. - - bihar state financial corporation as well as..... a.k. tripathi, j.1. heard learned counsel for the petitioner, learned counsel for the respondents. bihar state financial corporation as well as learned counsel for the state.2. decision to revise salary of its employees taken by the board of directors of bihar state financial corporation, a statutory body created under state finance corporation act, 1951 led to litigations and has lasted 17 years. there has been various bouts of litigations before this court but none of them culminated into a final adjudication.3. the issue is a limited one. the question is whether the corporation has due statutory authority to effect wage revisions of its employees? and whether the state government has due powers to stay the same?4. exercise for revision of pay scale was taken by the corporation earlier.....

Judgment:

A.K. Tripathi, J.

1. Heard learned Counsel for the petitioner, learned Counsel for the respondents. Bihar State Financial Corporation as well as learned Counsel for the State.

2. Decision to revise salary of its employees taken by the Board of Directors of Bihar State Financial Corporation, a statutory body created under State Finance Corporation Act, 1951 led to litigations and has lasted 17 years. There has been various bouts of litigations before this Court but none of them culminated into a final adjudication.

3. The issue is a limited one. The question is whether the Corporation has due statutory authority to effect wage revisions of its employees? And whether the State Government has due powers to stay the same?

4. Exercise for revision of pay scale was taken by the Corporation earlier in the year, 1990 itself but due to intervention at the level of the State Government the same was not implemented. The Board of Directors in its meeting held on 6.5.1991 considered and decided to revise the pay scale but even this notification contained in annexure-5-A could not be implemented. A High Court order forced the hands of the Corporation to offer revised pay scales to the employees of the Corporation vide a notification dated 6.1.1992 i.e. Annexure-9 to the writ application. Employees of the Corporation are drawing their pay based on Standing Order No. 8/91-92 dated 6.1.1992. In terms of this notification the revised scale was made effective from 1.1.1986 but the cash benefit was admissible from 1.3.1989. Decision of the Corporation to revise the pay scale of its employees was imminent since revision in wages of State Government and other statutory bodies had been brought about from 1.1.1986.

5. Thing would have rested at that but it seems that the Board of Directors had been a bit indiscreat while offering revised pay scales to its employees. Some of the scales offered turned out to be higher then State Government employees. Their decision caused heart burning in the State Government. Respondent Corporation have tried to explain the situation by stating that the posts and the duty which the employees of Corporation carried out there was no comparative post or pay scale available in the State Government by which the Corporation could have been guided. In this background the State Government and the Bureau of Public Enterprises, the so called body, which is supposed to exercise some kind of control over state Corporations issued directions not to implement the new pay scales. This directive came to be challenged by filing writ applications. However the sum and substance of this dispute was that the employees of the Corporation were sort to be denied revised pay scale. The battle carried on. The matter did not rest in the files of the State Government and because of the same the matter came to be challenged before High Court. On the order of this Court passed in C.W.J.C.No. 3925 of 1992 and C.W.J.C.No. 2744 of 1992 dated 25.11.1992 the Corporation was given liberty to pay salary etc. on the Standing Order 8/91-92 dated 6.1.1992.

6. In usual course this should have been the end of dispute but the controversy continued and the series of correspondences have been brought on record between Managing Director of the Corporation, the State Government, Bureau of Public Enterprises and the Department of Industries.

7. The present writ application came to be filed by Employees Federation of the Corporation because the Managing Director of the Corporation on the directive of the Bureau of Public Enterprises Bureau issued a letter dated 3.7.2003 (Annexure-1). This is the impugned annexure initially in the present writ application. The Managing Director directed respective Branch Managers not to pay increment to the employees which had been stopped on the directive of the State Government by virtue of letter dated 12.2.1999.

As the hearing of this writ application progressed a basic question with regard to the right of the Corporation and its employees to get the revised pay scale in terms of the Board of Directors' decision contained in annexure-9 and the power of the State Government to stay the same became the issue to be decided by this Court.

8. This Court categorically records that the State Government's employees have received two pay revisions during the pendency of this dispute. First one was from the 1.1.86 which was known as 5th Pay Revision and the second revision came to be made effective from 1.1.96 under the recommendation of 6th Pay Revision Committee. We are in the year 2007. Two things emerge from the above facts. When the rest of the employees of the State Government and other agencies of the Government have had the benefit of revision in pay scale twice over whereas the employees of the Corporation are still litigating to hang on to the benefit which was given to them in the year, 1992. The debate can carry on but sum and substance of the present dispute, as of today is, that the pay scale which is being paid to the employees of the Corporation in terms of annexure-9 is far below the employees working under the State Government. The question therefore arises whether the dispute is any longer an issue in the year 2007? The answer is a categorical no in view of two revised pay scales which have been made available to the State employees in years 1986 and 1996.

9. In fact time for further revision may have also arisen but that is an issue which has to be worked out by the Corporation in consultation with the State Government to avoid more litigations.

10. Since the filing of the writ in 2003 the matter kept getting adjourned for one reason or the other. But from perusal of the ordersheet of this case the whole argument verred around the issue whether the revised pay scale requires approval at the level of Bureau of Public Enterprises and hence the Government. Reflection of the same is there in the order dated 22.2.2005. The case thereafter came to be taken up on 2.2.2007. On that date this Court directed the respondent State Government and the Bureau of Public Enterprises to take a decision one way or the other so that the outcome of their decision would for the base for further decision or adjudication of the present writ application. Six weeks time was therefore given to the Chairman of Bureau Public Enterprises as well as the State Government. Petitioners thereafter have brought on record the order dated 16.3.2007 i.e. annexure-25 by filing a supplementary affidavit. This is the order passed by the Chairman of the Bureau of Public Enterprises whereby he has rejected the issue of enhancement of pay scale of the employees of the Corporation. Annexure-25 too has been challenged as one of the impugned orders.

11. When the matter was referred to the Chairman, Bureau of Public Enterprises it was hoped and expected that by virtue of the position which the Bureau of Public Enterprises occupies the matter would be examined with due dispassion and objectively but it seems the order in question was passed only to meet the dead line fixed by this Court. Perusal of the order dated 16.3.2007 shows total lack of application of mind on behalf of the Chairman. The order has only taken note of historical background under which the revision in pay scales were made from time to time by the Corporation and also as to why the State Government kept intervening in the same. The matter was not referred to the Chairman to enlighten this Court on the background of the litigation but to take a considered decision whether the decision of the Board of Directors to revise pay scale of the employees of the Corporation was in any manner conflict with the powers they have under the statute and also whether the revision of the pay scale was actually so obnoxious that the Government had to intervene decisively in the matter.

12. In the opinion of this Court what the Chairman of the Bureau of Public Enterprises ought to have considered is whether the pay scale revised by the Corporation in the year, 1992 continues to be on the higher side vis-a-vis the State Government employees? and whether the said revision had any meaning left at this point of time? But then the Bureau has gone on a tangent and the reason given that the status of the Corporation is so bad that in his view of the matter they cannot be permitted to effect pay revision of its employees is quite misplaced.

13. Submissions have been made on behalf of the petitioners that the Corporation being a statutory body has absolute right as well as independence to take decision in matters of grant of pay scale and other benefits to its employees. These are powers which the Corporation enjoys by virtue of Section 23 of the State Financial Corporation Act and according to the petitioner the State Government in the garb of policy decisions cannot interfere in day to day work of the Corporation.

14. Learned Counsel for the petitioner in support of these submissions have brought to my notice a Division Bench decision of this Court rendered in the case of Association of Selected Candidates v. State of Bihar and Ors. reported in 1990 (2) PLJR 748 and couple of unreported decisions of other High Courts in support of their argument. Petitioner could be correct in their stand because the above decisions have held in favour of Finance Corporation and the autonomy they enjoy under the law.

15. Learned Counsel for the Corporation on the other hand submits that though they do enjoy certain autonomy by virtue of the legislation but it is also a fact that the Corporation was promoted as well as capital for the same has been provided by the State. In fact the very creation of the Corporation is by contribution which the State Government had to make in terms of Section 3 of the Act. He also brings to my notice Section 4 which talks about the share capital and share holding of the Corporation. Contention of the Corporation therefore is that under the statute even though the power is there the Corporation cannot ignore directions of the State Government. Payment of revised pay if it happened to be on a higher side which caused disharmony amongst other employees of State Government then the Government may as a policy decision, issue directives to remove the irritants. It may fall within the category of policy decision of Section 39 of the Act and it cannot be said to be a case falling totally within the domain of Section 23 of the Act.

16. Learned Counsel for the State has also taken a similar stand as the Corporation and they have stated that the intervention of the State Government as well as the intervention of Public Bureau Enterprises was required at the relevant time in the given facts. They assert that they have the requisite authority to issue directions to the Corporation when the State Government feels that they have transgressed the limits of autonomy which has been granted to them under the statute.

17. The above legal debate has been left open by this Court in view of the fact that the same would be an acedemic exercise now. This Court feels that the present dispute should be brought to rest by allowing the Corporation to pay the earlier revised scale which was granted to their employees by virtue of annexure-9 in the year, 1992. Any direction either by the State Government or Bureau of Public Enterprises will not in any manner affect the right of the employees to receive such revised pay scale as indicated above. If any arrears will accrue to these employees it will be open to them to claim the same from the Corporation and the Corporation shall take such efforts as is required to meet its obligation.

18. This Court has left the question about the power which the State Government enjoys in such matters to be decided in an appropriate case when the occasion for the same would arise. In so far as the present dispute is concerned, the same is being brought to rest on the directive which this Court has issued in this case.

19. Accordingly the order dated 3.7.2007 contained in annexure 1, the order dated 16.3.2007 contained in annexure 25 are hereby quashed.

20. This writ application stand allowed to the extent indicated above.