This writ petition under Article 226 of the Constitution has been filed by the Assam Financial Corporation Employees Union, which is an association of employees of the Assam Financial Corporation registered under the Trade Union Act, 1926, for appropriate reliefs with regard to revision of scales of pay of some of the employees of the Assam Financial Corporation (for short the AFC). 2. The facts briefly are that the Assam Pay Commission, 1988, made some recommendations on revision of pay scales of the employees of the State Public Sector Units of the State of Assam. The said recommendation were accepted by the State Govt and were circulated by letter dated 21.10.91 of the Govt of Assam Finance (Pay Research Unit) Department to the different departments of Govt of Assam for the purpose of implementation by the State Public Sector Units under their administrative control. The AFC implemented the said recommendations of Assam Pay Commission, 1988 and the employees of the AFC received revised 'pay as per the said recommendations of the Assam Pay Commission, 1988. But thereafter, the employees of the AFC submitted a representation that the employees of other Public Sector Undertakings of the State of Assam such as the Assam Industrial Development Corporation (for short the AIDC) performing identical nature of duties and work were getting higher scales of pay and that the scales of pay of the employees of the AFC may be increased aecordingly. The Board of Directors of the AFC in its 246th meeting held on 3.2.92 considered the said representation and decided to form a Sub Committee to go into the details of the Pay Commission's Report vis-a-vis the representation. The Sub Committee submitted its report on 28.5.92 suggesting higher scales of pay of the employees belonging to the managerial cadres of the AFC. The recommendations of the Sub Committee were considered by the Board of Directors of the AFC in its 248th meeting held on 28.5.92. The Board of Directors approved the said recommendations and decided that steps should be taken to complete the necessary formalities to implement the recommendations. The recommendations of the Sub Committee were considered by the Board of Directors of the AFC in its 248th meeting held on 28.5.92. The Board of Directors approved the said recommendations and decided that steps should be taken to complete the necessary formalities to implement the recommendations. Thereafter, the Managing Director of the AFC wrote a letter dated 176.92 to the Financial Commissioner, Govt of Assam, seeking approval of the proposal of the Board of Directors for increasing the scales, of pay of the aforesaid employees as per the said recommendations but by letter dated 4.7.92 issued by the Officer on Special Duty (Pay Research Unit), the Managing Director, AFC, was informed that the Govt in the Finance Department was of the opinion that the proposal for increase in the scales of pay in the letter dated 17.6.92 of the Managing Director is not tenable in view of its likely impact on the scales of pay of other State Govt Corporations/Boards. Aggrieved, the petitioner has filed this writ petition with a prayer to quash the letter dated 4.7.95 of the Officer on Special Duty. Finance (Pay Research Unit) Department has prayed for a Mandamus directing the respondents-authorities to implement the recommendations of the said Sub Committee for revision of the scales of pay of different categories of employees of the AFC. 3. At the hearing, Mr. R. C|ogpi, learned counsel foijthe petitioner, contended that under section 23 of the State Financial Corporation's Act, 1951 (for short the SFC Act), the AFC has the power to fix the remuneration payable to its employees by regulation and in exercise of the said powers, the AFC has made the Assam Financial Corporation Staff Regulations., 1957 (for short the Staff Regulations) Mr. Gogoi further pointed out that the Staff Regulations have been made with the previous sanction of the State Govt of Assam as provided in section 48 of the SFC Act. Regulation 65 of the Staff Regulations provided that except as provided in the Staff Regulations or as may be prescribed by the Board, the pay and allowances of the employees shall be regulated in accordance with the provisions of Appendices I and II to the Staff Regulations. Regulation 65 of the Staff Regulations provided that except as provided in the Staff Regulations or as may be prescribed by the Board, the pay and allowances of the employees shall be regulated in accordance with the provisions of Appendices I and II to the Staff Regulations. Thus, normally the pay and allowances of an employee would be that as provided in the Appendices I and II to the Staff Regulations but where the Board prescribed a different pay and allowances of any employees, the pay and allowances of such employee would be as prescribed by the Board. According to Mr. Gogoi, therefore, Regulation 65 gives ample powers to the Board to determine the pay and allowances of an employee and where such power is exercised by the Board fixing pay and allowances of an employee, the pay and allowances as fixed in the Appendices I and II to the Staff Regulations will not apply to such an employee. Therefore, no amendment to the Staff Regulations was necessary to implement the recommendations of the Sub Committee suggesting higher scales of pay for the employees of the AFC belonging to its managerial cadres and the decision of Board of Directors of the AFC in its 248th meeting held on 28.5.92 approving the recommendations of Sub Committee for increasing the scales of pay of its managerial cadres was sufficient compliance with the law. Mr. Gogoi further pointed out that in section 39 of the SFC Act, it has been further provided that in the discharge of its functions, the Board shall be guided by such instructions on question of policy as may be given to it by the State Govt, but it has been held by a Division Bench of Rajasthan High Court (Jaipur Bench) in Civil Writ Petition No. 669 of 1988 that the word 'policy' in section 39 of the SFC Act does not include fixation of emoluments of the employees of a State Financial Corporation. Mr. Gogoi produced a copy of the said judgment of the Rajasthan High Court as well as a copy of the order dated 16.12.88 of the Supreme Court in SLP (C) No. 15605/88 showing that the SLP against the said judgment of the Rajasthan High Court was dismissed by the Supreme Court. Mr. Mr. Gogoi produced a copy of the said judgment of the Rajasthan High Court as well as a copy of the order dated 16.12.88 of the Supreme Court in SLP (C) No. 15605/88 showing that the SLP against the said judgment of the Rajasthan High Court was dismissed by the Supreme Court. Mr. Gogoi, therefore, urged that it was not at all necessary on the part of the Managing Director, AFC to obtain approval of the State Govt to the decision of the Board of the AFC to increase the scales of pay of its managerial cadres in accordance with the recommendations of the Sub Committee and that a direction should be issued to the AFC to implement the said recommendations of the Sub Committee. 4. Mr. SS Dey, learned Addl Senior Govt Advocate, on the other hand, contended that it is clear from the provisions of sections 23 and 48 of the SFC Act as well as Regulation 4 of the Staff Regulations that no amendment of the Staff Regulations can be made without the previous sanction of the State Govt. He contended that since the pay and allowances of the managerial cadres of the employees of the AFC had been fixed in the Staff Regulations, the pay and allowances of the said managerial cadres of employees could only be increased by an amendment made to the Staff Regulations with the previous sanction of the State Govt. He further contended that increase in the scales of pay of the employees of the AFC is a question of policy and the AFC was bound by the instructions of the State Govt under section 39 of the SFC Act not to increase the scales of pay as contained in its letted dated 4,7.92. 5. Mr. BK Goswami appearing for the AFC also contended that since the pay and allowances of all category of employees of the AFC including its managerial cadres are fixed in Appendices I and II to the Staff Regulations!, unless the said Appendices I and II are amended, the recommendations of the Sub Committee for increase of the pay and allowances of the managerial cadres of the Corporation cannot be given effect to. Mr. Mr. Goswami further contended that it c r was for this reason that even though the Board of Directors of the AFC decided to implement the recommendations of the Sub Committee for increase of pay and allowances of the managerial padres of the AFC, approval was sought for from the State Govt by the Managing Director of the AFC in his letted dated 17.6.92. 6. The first question, therefore, that has to be decided is as to whether the pay and allowances of any of the employees and particularly the managerial cadres belonging to the AFC as fixed in Appendices I and II to the Staff Regulations could be increased by the Board of Directors of AFC without amending the said Appendices I and II with the previous sanction of the State Govt. Sections 23 and 48 (1) of the SFC Act and Regulation 65 of the Staff Regulations on which reliance has been palced by Mr. Gogoi are quoted hereinbelow : "23. Officers and other employees of the Corporation - The Financial Corporation may appoint such officers, advisers and employees as it considers necessary for the efficient performance of its functions, and determine by regulations, their conditions of appointment and service and the remuneration payable to them : Provided that the State Govt may in consultation with and after obtaining the advice of the (Development Bank), specify the class or categories of posts in respect of which appointments may be made by the Board on such remuneration and other conditions of service as the Board may determine, and no regulation made under the Act shall apply to such posts in respect of matters so determined by the Board. 48 .Power of Board to make regulations - (1) The Board may, after consultation with the (Development Bank) and with the previous sanction of the State Govt, make regulations not inconsistent with this Act and the-rules made thereunder to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act. 65. 65. Application of Appendices I and II of AFC Staff Regulations, 1957 - Except as otherwise provided in these Regulations or as may be prescribed by the Board, the pay and allowances of an employees shall be regulated in accordance with the provisions of Appendices I and II." A reading of section 23 of the SFC Act quoted above would show that it was only by regulations that the Financial Corporation can determine the conditions of appointment and service and the remunerations payable to. its officers, advisers and employees. The proviso, however, makes it clear that in respect of some class or category of posts as the State Govt may specify in consultation with the Development Bank, the Board of the Financial Corporation may determine the remuneration and other conditions of service and no regulations made under the SFC Act would apply to such posts in respect of matters sought to be determined by the Board. No case has been made out in this writ petition that the posts belonging to the managerial cadres of the AFC, namely the posts of General Manager, Secretary/Deputy General Manager, Manager (Regional Manager), Assistant Manager, IO/BM/PRO/RO and SO in respect of who recommendations have been made by the Sub Committee for increase of pay scales have been specified by the State Govt in accordance with the said proviso to section 23 of the SFC Act. Hence, the remuneration payable to employees of the AFC. belonging to its managerial cadres "Will have to be determined by AFC by Regulations as provided in the main provisions of section 23 of the SFC Act and not by the Board under the proviso to section 23 of the SFC Act. Regulation 65 of the Staff Regulations has to be interpreted consistent with the aforesaid provisions of section 23 of thfe SFC Act and so interpreted it would mean that the remuneration payable to all category of officers, advisers and employees other than those class or categories of posts which are specified by the State Govt under the proviso to section 23 of the SFC Act will have to be provided in the Staff Regulations. But remuneration payable to persons holding the class or category of posts specified by the State Govt in consultation with and after obtaining advice of the Development Bank under the proviso to section 23 of the SFC Act, will have to be prescribed by the Board of Directors of the AFC as the Staff Regulations will have no application to such employees. The contention of Mr. Gogoi, therefore, that the pay and allowances of the employees of managerial cadres of the AFC could be increased by the Board of Directors under Regulations 65 of the Staff Regulations without amending Appendices I and II to the Staff Regulations with the prior approval of the State Govt, therefore, has no force. In the decision of the Rajasthan High Court cited by Mr. Gogoi this question as to whether pay scales of the employees of the Financial Corporation as fixed by the Regulations made under sections 23 and 48 of the SFC Act could be increased by the Board of the Directors without air*:. ;ing the regulations with the previous sanction of the State Govt was not decided and it was only held by the Court that fixation of emoluments did not come within the meaning of the word 'policy' in section 39 of the SFC Act. 7. It was next contended by Mr. Gogoi that a reading of the impugned letter dated 4.7.92 of the Officer-on-Special Duty, Finance (Pay Research Unit) Department would show that the Govt has not examined the proposal of the Board of Directors of AFC to increase the scales of pay of its managerial cadres on its merits and has rejected the said proposal only on the ground that it is likely to have an impact on the pay scales of other State Govt Corporations/Boards. Mr. Gogoi submitted that in paragraph 3 of the letter dated 21.8.91 of the Finance Department to the Commissioners/Secretaries to the Govt of Assam under which the recommendations of the Assam Pay Commission, 1988 on the revision of pay scales of employees of State Public Sector Units were circulated, it was clearly stated that the public Sector Units shall adopt revised pay scales and allowances as per their respective financial capabilities with any modification subject to clearance of the Board of Directors/Board of Management of Public Sector Units and the Administrative Department concerned. Accordingly, the BoarcLof Directors of AFC in its 246th meeting held on 3.2.92 formed a Sub Committee to scrutinise the recommendations of the Assam Pay Commission, 1988 on the revision of pay scales of the employees of the AFC and the said Sub Committee after making an indepth study of the said recommendations as well as the pay structures of the employees of the AFC and the AIDC, recommended higher scales of pay for the managerial cadres of AFC and the said recommendations of the Sub Committee were accepted by its Board of Directors and it was only thereafter that the proposal was sent for increase of scales of pay of the managerial cadres of AFC by the Managing Director in his letter dated 17.6.92 to the Financial Commissioner, Govt of Assam. According to Mr. Gogoi, the State Govt in the Finance Department should have applied its mind to the said recommendations of the Sub Committee and if it found that the recommendations were justified on merits, the State Govt could not have rejected the proposal. Mr. Gogoi cited the judgment of the Supreme Court in the case of Garhwal Jal Sansthan Karmachari Union & another vs. State of Uttar Pradesh & others, (1997) 4 SCC 24 , wherein the legality and correctness of the communication/order dated 5.3.84 passed by the State Govt of Uttar Pradesh in not according permission to implement the resolution dated 4.6.83 passed by the Garhwal Jal Sansthan, Dehradun approving the pay parity of its employees with that of the employees of Jal Nigam was challenged and the Supreme Court held that the State Govt in exercise of its supervisory powers under the UP Water Supply and Sewerage Act, 1975 found that the claims of the employees based on the principle of equal pay for equal work was unsustainable and hence the said decision of the State Govt communicated in the order dated 5.3.84 was not arbitrary. But so far as the facts of the present case are concerned, Mr. But so far as the facts of the present case are concerned, Mr. Gogoi contended that the State Govt had not considered the question as to whether the claim of the employees of the AFC belonging to the managerial cadres for equal pay for equal work compared to that of the employees of the other State Govt units such as the AIDC was sustainable or and therefore the decision of the State Govt in refusing to sanction the proposal of the AFC to increase the scales of pay of its managerial cadres was arbitrary particularly when the AFC had made it clear that it had sufficient resources of its own to pay the higher scales of pay and had made budgetary provisions for the same. 8. Mr. SS Dey, Addl Senior Govt Advocate, Assam, however, contended that the petitioner has not been able to show in this writ petition that the employees of the AFC belonging to the managerial cadres were discharging the same duties and functions as their counter parts in the AIDC and thus no relief can be granted by the Court to the said employees of the AFC on the principlele of equal pay for equal work. He cited the judgment of the Supreme Court in the case of Union of India vs. PB Hariharan & another, (1997) 3 SCC 568 , in which it has been held that unless a clear case of discrimination is made out, there should be no judicial interference with the pay scales fixed by the Govt on the recommendation of the Pay Commission. 9. It is true that the Assam Pay Commission, 1988 made recommedations with regard to revision of pay scales of employees of different Public Sector Units of the State Govt of Assam and the said recommendations were circulated by letter dated 21.8.91 of the Govt of Assam, Finance (Pay Research Unit) Department to all Commissioner/Secretaries of the Govt of Assam, but in paragraph 3 of the said letter it was clearly stated that the Public Sector Units may adopt revised pay scales and allowances as per their respective financial capabilities either into to or with any modification subject to clearance by their Board of Directors/Board of Management and Administrative Department concerned. In view of the representation filed by the employees of the AFC claiming pay parity with the employees of the AIDC, the Board of Directors of AFC in its 246th meeting held on 3.2.92 appointed a Sub Committee and the said Sub Committee made the following recommendations : "After having scrutinised all relevant factors in depth, the Sub Committee is of the opinion that in view of the identical nature of activities., levels of responsibility and performance criteria, there should be some sort of parity in the pay structure of the comparable post in the managerial cadres of the AFC and the AIDC. The Sub-Committee is inclined to think, that such a fitment will be logical and will restore the desired relativities. Consequently the Sub-Committee recommends the following fitment for the posts of managerial cadres : Post Revised scale of comparable post of AIDC. 4200-6300 (GM) No comparable post. Scale suggested Scale suggested by Pay Commission suggested by Sub General Manager Secretary/Dy GM Manager/ RM's C0B«nittee 3825-5900 3375-5200 3825^5900 2975-4750 Asstt Manger 2275-4450 IOS/BMS/ 1805-4342 FRO/RO Officer Staff Officers 1785-4200 3275-5050 2I75-47S0 3825-5900 Manager (Tech) & Financial Controller. 3375-5200 (Addl Manager) 2975-4750 (Dy Manager, A/Cs. 2555-4600 (Personal Officer, Sr Tech On a reading of the aforesaid recommendations, it is clear that the Sub Committee after making an indepth scrutiny of the relevant facts and after considering the identical nature of activities, level of responsibility and performance criteria was of the opinion that there should be spine sort or parity in the different pay structures of the comparable posts and managerial cadres of the AFC and the AIDC and suggested increase of pay scales as indicated above. Thereafter, the Board of Directors of the AFC accepted the said recommendations of the Sub Committee and the Managing Director of the AFC in his letter dated 17.6.92 sought approval of the State Govt. In the said letter dated 17.6.92, the Managing Director of the AFC made it clear that the AFC had adequate funds to pay the recommended revised scales of pay and has already made budgetary provisions for the purpose in the current year. Along with the said letter dated 17.6.92 copies of the resolution and report of the Sub Committee were also sent to the Financial Commissioner, the Govt of Assam. 10. In the case of Garhwal Jal Sansthan Karmachari Association vs. State of UP (supra) cited by Mr. Along with the said letter dated 17.6.92 copies of the resolution and report of the Sub Committee were also sent to the Financial Commissioner, the Govt of Assam. 10. In the case of Garhwal Jal Sansthan Karmachari Association vs. State of UP (supra) cited by Mr. Gogoi, the Supreme Court has observed in paragraph 12 of the judgment that the State Govt could not have been justified in refusing sanction to the resolution dated 4.6.83 passed by the Jal Sansthan, Dehradun approving pay parity with the Jal Nigam when no financial assistance was asked for from the State Govt if the State Govt had found the claims of the employees based on equal pay for equal work as sustainable. But in the present case, neither the records of the State Govt produced before this Court by Mr. Dey nor the affidavit, filed on behalf of the State Govt indicated that the State Govt ever examined the proposal in the letter dated 17.6.92 of the Managing Director of the AFC for granting to the managerial cadres of the AFC pay parity with the managerial cadres of AIDC and the State Govt appears to have rejected the proposal of the AFC for increasing pay scales of its managerial cadres only on the ground that it is likely to have impact on the pay scales of other State Govt Corporation/Boards. As I have held above, any increase in the pay scales of the managerial cadres of the AFC can only be done by amending the Staff Regulations of the AFC in accordance with section 23 and 48 of the SFC Act with the previous sanction of the State Govt, but the said statutory power of the State Govt to grant or withheld sanction will have to be exercised consistent with its constitutional obligations and where the State Govt finds that the proposal for increase of pay scales of some of the categories of employees of the AFC is justified on the principle of equal pay for equal work enshrined in the Constitution and the AFC has the financial resources to meet the additional burden on account of the increase in the pay scales and has in fact made budgetary provision for meeting the burden, it cannot refuse sanction merely on the ground that the proposal if sanctioned would have a likely impact on the pay scales in other Public Sector Units. This is not to say that the State Govt will not at all take into account the impact that the increase in the pay scales in the AFC will have in other Public Sector Units, but then the State Govt in its affidavit has not shown the exact impact that the proposed will have in other Public Sector Units and has only rejected the proposal on the vague ground that it is 'likely' to have an impact on the pay scales of other Public Sector Units. 11. For the reasons stated above, the impugned letter dated 4.7.92 of the Govt of Assam, Finance Research Unit (Pay) Department (Annexure D) is quashed and the State Govt in the Finance Department is directed to examine the proposal for increase of the pay scales of different managerial cadres of the AFC contained in letter dated 17.6.92 of the Managing Director of the AFC afresh on its merits in the light of the observations made in this judgment and to communicate its decision to the Managing Director of the AFC within a period of three months from today. In case the State Govt decides to sanction the increase of the pay scales of managerial cadres, it will also decide the date with effect from which the pay scales would be increased after taking into account all relevant factors. With the aforesaid observations and directions the writ petition is allowed. But considering the entire facts and circumstances of the case, the parties shall bear their own costs.