A K BINDAL Vs. UNION OF INDIA

JUDGEMENT

(1.) THE issue raised in these transfer petitions is regarding revision of pay scale of officers of Fertilizer Corporation of India and Hindustan Fertilizer Corporation and, therefore, they are being disposed of by a common order. For the sake of convenience, we will refer to the pleadings in transfer case no. 8 of 2000 whereby writ petition no. 2108 of 1996 which was filed in Delhi High Court was transferred to this Court. A.K. Bindal, President, Federation of Officers' Association of Fertilizer Corporation of India (for short 'FCI') and Dr. K.P. Sinha, authorised representative of Federation of Officers' Associations of Hindustan Fertilizer Corporation Ltd. (for short 'HFC') filed writ petition no. 2018 of 1996 in Delhi High Court praying that Clauses 11,12 and 13 of the Memorandum dated 19.7.1995 issued by Government of India, Ministry of Industry, Department of Public Enterprises and connected clauses of Annexure V of the said Memorandum be quashed and consequently the practice of uniform treatment of the officers in the profit and loss making companies in the FCI/HFC be revived. THE other prayer made is that the respondents be directed to pay to the petitioners by way of interim relief at least 60% of the benefit of the revision of pay and perks which their counterparts have been given, pending final decision of the Writ Petition. THE respondents arrayed in the Writ Petition are (1) THE Union of India through the Secretary, Department of Fertilizers, in the Ministry of Chemicals and Fertilizers; (2) THE Secretary, Department of Public Enterprises, Ministry of Industry, Government of India; (3) THE Fertilizer Corporation of India Ltd.; and (4) Hindustan Fertilizers Corporation of India Ltd. THE pleadings of the parties are fairly long and the documents filed are bulky but we will refer only to basic facts which are necessary for the decision of the controversy.

(2.) IN January, 1961 two Fertilizer companies, namely Sindri Fertilizers and Chemicals Ltd. and Hindustan Fertilizer and Chemicals Ltd. were merged and a new company named as Fertilizer Corporation of INdia Ltd. (for short 'FCI') was created. Between 1961 and 1977, FCI, came to have 17 Fertilizer Units, 7 of which were in operation while remaining 10 were at various stages of implementation. IN 1978 the Government of INdia set up a Committee to work out the modalities for reorganisation of its Fertilizer INdustry. On the basis of the recommendation of the Committee, the Government of INdia approved the bifurcation and reorganization of FCI and National Fertilizer Ltd. (for short 'NFL') which was an independent and separate undertaking at that time and allocated the various units to the newly created undertakings which were five in number. Namrup, Haldia, Barauni and Durgapur units were allocated to the newly formed Hindustan Fertilizer Corporation Ltd. (for short 'HFC') and Sindri, Gorakhpur, Ramagundam, Talcher, Korba and Jodhpur Mining Organization were retained with FCI. The other units were allocated to newly created Rashtriya Chemicals and Fertilizers Ltd. and National Fertilizers Ltd. while a fifth company dealing exclusively with planning and development was created which was known as Project and Development (INdia) Ltd. After reorganization, the industrial pattern of pay and DA was introduced and it was made effective from 1.9.1977. The Department of Chemicals and Fertilizers, Government of INdia issued a circular on 3.9.1979 which provided that revision of pay scales and fringe benefits of the officers of the entire FCI/NFL would be the same and consequently all the officers in the five companies were treated alike with reference to revision of their pay scales and fringe benefits etc. The revision of pay scales of officers which was due from 1.8.1986 could not be given as the Government did not take steps in that regard. However a decision was taken by the Government to give ad hoc relief to all the officers working in the Public Enterprises, following the INdustrial DA pattern and related scales of pay and accordingly ad hoc relief was paid to all the officers of FCI and HFC with effect from 1.1.1986 at uniform rate. Since the government did not take any decision regarding the revision of pay scales and perks of the officers of the entire public sector in the country, the Bureau of Public Enterprises (for short 'BPE') which is a policy making division of the Government of INdia, recommended for payment of second relief to the officers of Public Enterprises following the industrial DA pattern on 13.1.1990. Consequently FCI/NFL issued circulars on 24.1.1990 for giving ad hoc relief to the officers. During this period the Government of INdia and also the Management of FCI and HFC made no distinction on the basis of "loss making" or "profit making" companies in the matter of revision of pay scale and fringe benefits to the officers of the companies and they were treated alike irrespective of the fact that the companies in which they were working had been making losses. The period of validity of the revised pay scales made applicable from 1.1.1987 was for five years and thereafter the next revision of pay scales became due from 1.1.1992 but the same was not done for the officers employed in FCI and HFC on the ground that the two companies were incurring losses. However, the other companies in erstwhile FCI/NFL group of companies were given revised pay scale and fringe benefits with effect from 1.1.1992. According to the petitioners an unfair and unjust policy of discrimination in the matter of revision of pay scales based upon profits and losses of the company commenced at this stage. Thereafter the Department of Public Enterprises, Ministry of INdustry, Government of INdia issued an Office Memorandum on 12.4.1993 on Wage Policy for the fifth round of wage negotiations in Public Sector Enterprises (for short 'PSEs') whereby the ban imposed by D.O. No.2(3)/91-DPE (WC) dated 17.10.1991 was withdrawn and it was directed that the management of PSEs may commence their wage negotiations with the Trade Unions/Associations. It further provided that under the new Wage Policy the Managements were free to negotiate the wage structure keeping in view and consistent with the generation of resources/ profits by the individual enterprises/units but the government will not provide any budgetary support for the wage increase and the respective managements will have to find the requisite resources from within their own internal generation. Para 5 of this Office Memorandum specifically said that the wage settlement should be negotiated by the PSEs in accordance with the above parameters. This was followed by the impugned Office Memorandum dated 19.7.1995 issued by the Department of Public Enterprises on the subject of revision of scales of pay of the Executives holding post below the Board level and non-unionised supervisors with effect from 1.1.1992. The petitioners are basically aggrieved by para 13 of this Office Memorandum which provides that for sick PSEs registered with the Board for INdustrial and Financial Reconstruction (for short 'BIFR'), pay revision and grant of other benefits will be allowed only if it is decided to revive the unit and the revival package should include the enhanced liability on this account.

(3.) IT is also pleaded in the counter affidavit that the Government guidelines do not prohibit BIFR referred companies from revising their pay scales and other benefits with effect from 1.1.1992 but has linked it with the basic issue of revival packages of such companies. This revival package is to be approved by the BIFR after it is agreed to by the Operating Agency and funding institutions. IT has thus been submitted that no decision could be taken on revision of pay scales of the employees of FCI and HFC as it is linked to the revival packages being formulated for these companies for approval of BIFR. The Office Memorandum dated 19.7.1995 has been issued with the approval of the Cabinet Committee on Economic Affairs. The basic thrust of the policy as contained in office memorandum dated 12.4.1993 is that PSUs should generate their own resources for meeting the enhanced liability on account of pay revision and no budgetary support shall be extended to them by the Government.