THE PUNJAB FINANCIAL CORPORATION EMPLOYEES WELFARE ASSOCIATION AND ANR. Vs. PUNJAB FINANCIAL CORPORATION AND ORS.

JUDGEMENT

(1.) THIS order will dispose of the Civil Writ Petitions No. 9500 of 2002 and 10743 of 2001 as the claims and the questions of law involved are the same. The facts are, however, taken from CWP No. 9500 of 2002.

(2.) THE Punjab Financial Corporation Employees Welfare Association, and the Officers Association have filed this petition for quashing the directives dated 10.5.2002 (Annexure -P10) and 22.5.2002 (Annexure P -11) issued by the respondent No. 3 State of Punjab and also for quashing decision dated 29.5.2002 (Annexure P15) of the Board of Directors of the Punjab Financial Corporation. The effect of which are that the employees of the Punjab Financial Corporation, (Corporation - for short) who were getting house rent allowance to the extent of 25% of their basic pay was reduced to 15%. The conveyance re -imbursement implemented by the Corporation was discontinued w.e.f. 1.6.2002. In respect of the medical reimbursement the Corporation was to follow State Government rules for outdoor treatment and indoor treatment as per norms fixed by AIIMS and PGI w.e.f. 1.6.2002. Besides, Travelling Allowance/Dearness Allowance was also to be as per rules followed by the State Government. The decision of the Board of Directors of the Corporation was taken on the directives of the State Government.

(3.) THE employees/officers of the Corporation were being paid house rent allowance @ 25% of their respective pay since the year 1978. Besides, conveyance allowance since the year 1984 and the medical reimbursement in full as per the Punjab Financial Corporation (Staff) Regulations 1961 (hereinafter referred to as the 1961 - Regulations), as amended from time to time and the instructions of the Corporation. The grievance of the petitioner is against the said allowances being brought at par with the State Government employees in terms of the Demi Official letter dated 10.5.2002 (Annexure P10) from the Chief Secretary to the Principal Secretary to Government of Punjab. Department of Industries and Commerce, Chandigarh (respondent No. 3). In the said letter a reference has been made to the meeting of the Cabinet Sub -Committee on Fiscal Management, held on 24.4.2002, in which various decisions were taken to effect economy in pay and allowances. It was observed that some of the PSUs were paying pay scales and allowances to their employees at rates higher than the Government employees and were also extending perquisites to the employees which were not available to their counter parts in Government service. A decision was taken by the Sub -Committee that pay, allowances and perquisites of employees of Public Sector Undertakings, Local Bodies, Corporations and other Public and quasi Public institutions shall not be higher than their counterparts in the Government service. It was, therefore, requested to immediately order alignment of pay scales and allowances and perquisites of the employees of the institutions with that of the Government employees of the equivalent category with immediate effect. The responsibility for non -implementation of the above decision of the Cabinet Sub -Committee was to be that of the Administrative Secretary and the Managing Director of the PSU concerned. Compliance report in that behalf was indicated to be sent by 21.5.2002, with a copy to the Principal Secretary, Government of Punjab Department of Finance. It was also indicated that the Cabinet Sub Committee on Fiscal Management is an Empowered Sub -Committee of the Council of Ministers and, therefore, its decision were the decisions of the Council of Ministers for all intents and purposes. In furtherance to the Demi Official letter dated 10.5.2002 (Annexure P10), the Industries Department of the Punjab Government issued a memo dated 22.5.2002 (Annexure P11) with regard to the parity of pay, allowances and perquisites of employees of PSUs with that of Government Employees. It was requested by the said memo which was addressed to various Corporations including the Managing Director of the Respondent -Corporation that by taking immediate action on the Demi Official letter dated 10.5.1992 (Annexure P10), the Corporation should send a copy of the action report taken to the Department while sending the same to the Chief Secretary/Principal Secretary Finance. This was asked to be finalised on priority basis. Thereafter, vide memo dated 26.5.2002 (Annexure P12) on the subject of strict observance of economy and austerity measures to be implemented in all the PSUs by making a reference to the Demi Official Letter dated 10.5.2002 (Annexure P10) and memo dated 22.5.2001 (Annexure P11), the Managing Director of the Corporation recorded that the Corporation is governed by the Act and Section 39 provides that the Board shall be guided by such instructions on the question of policy as may be given by the State Government and that 'Policy' does not include the fixation of emoluments. The State Government it was stated has limited powers only in matters pertaining to the running of the business of the Corporation and to decide the fixation of grades, creation of posts and matters relating to emoluments, pension, gratuity etc. cannot be said to be policy matters. The Managing Director concluded that if a wider interpretation is given to the word 'policy' as used in Section 39, of the Act, the Corporation would become a part of the State Government and cannot work as an autonomous body. The case was placed before the Board of Directors for advice and appropriate decision in the matter.