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2019 DIGILAW 966 (CAL)

Manik Chakraborty v. Union of India

2019-12-10

ARIJIT BANERJEE

body2019
Judgment : 1. These ten writ petitions have been taken up for hearing and disposal together as they involve similar questions of facts and law. 2. The total number of writ petitioners in the ten writ petitions is 234. They are all ex-employees of Central Inland Water Transport Corporation Ltd. (in short 'CIWTC'). They have either superannuated in the usual course or released under Voluntary Retirement Scheme (in short 'VRS') (Old) or under Improved Voluntary Retirement Scheme (in short 'IVRS') in 2015. 3. The petitioners in the following cases are superannuated employees under the Central Dearness Allowance (in short 'CDA') pay pattern:- (i) WP No. 7262 (W) of 2017 (Sunil Naskar-Vs.-Union of India & Ors.) (ii) WP No. 8354 (W) of 2016 (Matilal Deb & Ors.-vs.-Union of India & Ors.) (iii) WP No. 7306 (W) of 2017 (Asok Kumar Mukhopadhyay & Ors.-vs.- Union of India & Ors.) (iv) WP No. 16128 (W) of 2017 (Pranab Kumar Das & Ors.-vs.-Union of India & Ors.) 4. The writ petitioners in the following cases were released under IVRS 2015 under CDA pay pattern:- (i) WP No. 14427 (W) of 2017 (Sankar Chandra Bachar & Ors.-vs.-Union of India & Ors.) (ii) WP No. 14629 (W) of 2017 (Tapas Naskar & Ors.-vs.-Union of India & Ors.) The writ petitioners in WP 7335 (W) of 2017 (Arup Kumar Ghosh & Ors.-vs.-Union of India & Ors.) were released under the VRS (Old) in CDA pay pattern. (iii) The writ petitioners in WP 30774 (W) of 2017 (Manik Chakraborty & Ors.-vs.-Union of India & Ors.) were governed by tripartite Engineering Wage Settlement of West Bengal executed in the year 1992 and they were born in the Industrial Dearness Allowance (IDA) pay pattern. (iv) The writ petitioners in WP 25465 (W) of 2017 (Sumit Ghoshal & Ors.-vs.-Union of India & Ors.) were governed by bipartite settlement executed in 1992 and were covered under the IDA pay pattern pay scale. (v) The writ petitioners in WP 15504 (W) of 2017 (Alok Kumar Majumdar & Ors.-vs.-Union of India & Ors.) were covered by a settlement executed in 1997 in the IDA pay pattern. 5. The relief sought in all the writ petitions is for arrears of 2006-07 pay revision in CDA pay pattern and IDA pay pattern respectively. (v) The writ petitioners in WP 15504 (W) of 2017 (Alok Kumar Majumdar & Ors.-vs.-Union of India & Ors.) were covered by a settlement executed in 1997 in the IDA pay pattern. 5. The relief sought in all the writ petitions is for arrears of 2006-07 pay revision in CDA pay pattern and IDA pay pattern respectively. The claim is based essentially on the judgment dated 3 May, 1990 passed by the Apex Court in the case of Jute Corporation of India Officers' Association - vs. - Jute Corporation of India Ltd. & Anr., (1990) 3 SCC 436 , which pertained to pay revision of employees in 69 Central Public Sector Units (CPSUs) including CIWTC. Learned Counsel for the petitioners submitted that the Sixth Central Pay Commission (CPC) recommendation in CDA pay pattern was to be implemented with effect from 1 January, 2006 and for the IDA pay pattern the implementing date was to be 1 January, 2007. It was submitted that the writ petitioners received the benefit of the 4th and 5th CPC recommendation, irrespective of CIWTC's financial position. 6. Mr. Majumder, learned Counsel for the petitioners submitted that the Wage Policy of the Central Government and Cabinet approval in 2005-06 to handover certain assets of CIWTC to other entities do not reject the Ministry's approval for implementation of the Sixth CPC recommendation. In this connection, learned Counsel referred to pages 25-36 of the affidavit- in-opposition filed by CIWTC in Tapas Naskar's case (WP 14629 (W) of 2017) which are copies of the Wage Policy and note for the Cabinet prepared by the Ministry of Shipping, Road Transport and Highway. 7. Learned Counsel submitted that the writ petitioners, whether superannuated or voluntarily retired under the Old VRS or the IVRS had no occasion to know that there was no rejection of the proposal to implement the Sixth CPC recommendation. Rather, the Central Government had promised budgetary support for payment of wages to CIWTC employees way back in 2005. In support of this, learned Counsel referred to the note for the Cabinet prepared by the Ministry of Shipping which was adverted to hereinabove. 8. Learned Counsel then submitted that in 2014, a proposal was mooted to introduce VRS at 2006/2007 pay scales for CDA and IDA patterned employees. The Cabinet approved such proposal. In support of this, learned Counsel referred to the note for the Cabinet prepared by the Ministry of Shipping which was adverted to hereinabove. 8. Learned Counsel then submitted that in 2014, a proposal was mooted to introduce VRS at 2006/2007 pay scales for CDA and IDA patterned employees. The Cabinet approved such proposal. In this connection, reference was made to a communication dated 8 January, 2015 issued by the Ministry of Shipping to the Chairman-cum-Managing Director of CIWTC. 9. Learned Counsel then referred to a notice dated 14 September 2016 issued by the Chairman-cum-Managing Director of CIWTC wherein it was stated, inter alia, that the IVRS would be in accordance with 2006 CDA for the employees entitled to CDA pay scale and 2007 IDA linked pay scale for the employees entitled to other pay scales. 10. It was then submitted that apart from budgetary support having been promised by the Central Government for payment of salary of CIWTC employees, the company has substantial assets and properties as also sufficient funds from which the dues of the petitioners can be paid. In this connection reference was made to the 49th Annual Report (2015-16) of CIWTC. 11. Learned Counsel submitted that for the purpose of pay revision with effect from 1 January, 2006 (CDA) and 1 January 2007 (IDA), all employees of CIWTC including the petitioners who either superannuated or were released under VRS/IVRS, formed a homogeneous class. Making an artificial classification amongst the employees as on the implementable date of Pay Revision which the Government had promised to effect, is arbitrary. The employees retiring under the IVRS 2015 got notional benefit of the Sixth CPC. Now, they claim actual benefit. The other petitioners, who were on the role of CIWTC on 1 January, 2006 and 1 January, 2007 should also get the same benefit. All employees as on the aforesaid two implementing dates are to be treated alike. Just because some of the employees severed their relationship with CIWTC only under the IVRS 2015 and not earlier would not mean that only they would be entitled to implementation of the Sixth CPC recommendation. 12. It was submitted that as on the date of pay revision i.e., 1 January, 2006 for CDA and 1 January, 2007 for IDA, all employees of CIWTC were similarly placed and no classification rule could have been applied. 12. It was submitted that as on the date of pay revision i.e., 1 January, 2006 for CDA and 1 January, 2007 for IDA, all employees of CIWTC were similarly placed and no classification rule could have been applied. There could not have been any rational basis for differential treatment vis-a-vis the IVRS 2015 optees. Once there was formation of a homogeneous class, creating a class within a class was not permissible. In this connection, reference was made to the decision of the Hon'ble Apex Court in the case of State of Jammu and Kashmir-vs.-Shri Triloki Nath Khosa & Ors., AIR 1974 SC 1 . 13. Mr. Majumder submitted that the instant case is one of clear discrimination and violation of Art. 14 of the Constitution of India since the employees of CIWTC as on 1 January, 2006 and thereafter till their separation from the company, formed a homogeneous class for the purpose of pay revision implementable with effect from 1 January, 2006 for CDA pay pattern employees and with effect from 1 January, 2007 for IDA pay pattern employees. 14. It was submitted that revision of pay encompasses protection of human rights guaranteed under Art. 21 of the Constitution of India. The enforceable legal right of the petitioners flows from the Apex Court's judgment dated 3 May, 1990 in the case of Jute Corporation of India Officers' Association - vs. - Jute Corporation of India Ltd. & Anr. (supra), which mandates pay revision of employees of CPSUs as and when the pay of the Central Government employees would be revised. Any Wage Policy of the Central Government which would cause fetter on the Apex Court's judgment has to be treated as opposed to the doctrine of public trust and rule of law. He then referred to the decision of the Apex Court in the case of Kapila Hingorani - vs. - State of Bihar, (2003) 6 SCC 1 , in support of his submission that in respect of employees of PSUs, the Government cannot shut its eyes to the human rights even though the Government did not have liability to pay them salaries. 15. Appearing for CIWTC, Mr. Jena, Learned Advocate submitted that CIWTC is a public sector undertaking guided by the Ministry of Shipping, Government of India and is bound by the directives of the Ministry of Heavy Industries, Department of Public Enterprises (DPE). 15. Appearing for CIWTC, Mr. Jena, Learned Advocate submitted that CIWTC is a public sector undertaking guided by the Ministry of Shipping, Government of India and is bound by the directives of the Ministry of Heavy Industries, Department of Public Enterprises (DPE). As per the Wage Policy guideline, the benefit of pay revision may be allowed only to the employees of those CPSEs which are not loss making and are in a position to absorb the additional expenditure on account of pay revision from their own resources without any budgetary support from the Government. CIWTC has been a loss making company since inception, yet the 4th CPC and 5th CPC recommendations were implemented in CIWTC. However, no order was issued by the Ministry and the DPE for implementation of Sixth CPC recommendation. Hence, CIWTC did not implement such recommendation in respect of employees who retired on superannuation or obtained Old VRS in or after 2006. They were paid as per the 5th Pay Commission recommendation. 16. It was submitted that in respect of the employees who separated under IVRS 2015, there was notional implementation of the Sixth CPC recommendation with effect from 1.1.2006 but the same has not been implemented for those who separated prior to IVRS 2015. 17. It was further submitted that the petitioners who retired on superannuation accepted their retiral benefit as per the 5th Pay Commission recommendation without raising any objection as regards non- implementation of the Sixth CPC recommendation. Similar is the case with the employees who retired under Old VRS. After such retirement on superannuation or acceptance of VRS, the employer-employee relationship has ceased. Hence, the petitioners have no right to claim implementation of the Sixth CPC recommendation. Furthermore, CIWTC could not have paid the arrears of salary on the basis of Sixth CPC recommendation because of lack of the Ministry's approval. 18. Learned Counsel appearing for the Union of India submitted firstly, that CIWTC did not send any proposal to the Ministry for approving implementation of the Sixth CPC recommendation. Hence, the question of implementing the same could not and did not arise. Secondly, since CIWTC, at all material times and from the very inception, was a loss making company, the Ministry could not have approved the implementation of the Sixth CPC recommendation. Hence, the question of implementing the same could not and did not arise. Secondly, since CIWTC, at all material times and from the very inception, was a loss making company, the Ministry could not have approved the implementation of the Sixth CPC recommendation. However, if CIWTC has adequate funds, it may entertain the claim of the petitioners by giving effect to the Sixth CPC recommendation. Thirdly, it was submitted that the Sixth Central Pay Commission recommendations were implemented for employees covered under the CDA pay scale who accepted the IVRS. However, such implementation was notional only for the purpose of computation of basic pay and dearness allowance. In this connection reference was made to the Memo dated 12th January, 2015 issued by the Chairman-cum-Managing Director of CIWTC limited. It was further submitted that pay revision under IDA pattern was not permissible from 1st January, 1997 for IDA category of employees since as per Department of Public Enterprise guidelines employees in a loss making company are not entitled to pay revision. Learned Counsel prayed for dismissal of the writ petitions. Court's view: 19. I have noted the arguments advanced by learned Counsel for the respective parties and I have given my anxious consideration to the same. 20. The essential claim of the petitioners is for actual implementation of the Sixth CPC recommendation and payment of the arrear salary to them on such basis. It is not in dispute that the petitioners were all employees of CIWTC and have all superannuated under various schemes mentioned in Paragraph 3 of this judgment. Some were released under the old VRS in CDA pay pattern. Some were released under IVRS, 2015 under CDA pattern, some under bipartite or tripartite settlements, so on and so forth. It is also not in dispute that the petitioners have received their full retiral benefits under the respective schemes. However, they stake their claim to arrears of salary to be computed on the basis of actual implementation of the Sixth CPC recommendation. The fulcrum of their claim is the judgment and the order of the Hon'ble Supreme Court in the case of Jute Corporation of India Officers' Association - vs. - Jute Corporation of India Ltd. & Anr, (supra). However, they stake their claim to arrears of salary to be computed on the basis of actual implementation of the Sixth CPC recommendation. The fulcrum of their claim is the judgment and the order of the Hon'ble Supreme Court in the case of Jute Corporation of India Officers' Association - vs. - Jute Corporation of India Ltd. & Anr, (supra). In that case the Hon'ble Supreme Court was considering the question of implementation of the recommendations of the High Power Pay Committee in respect of the emoluments to be paid to the officers belonging to Class - I and Class - II employees in Central Public Sector Enterprises (CPSE). The relevant paragraph of the judgment relied upon by the petitioners reads as follows: "The pay revision for those employees in respect of whom the recommendations are hereby being directed to be implemented hereafter, will take place only as and when similar changes are effected for the Central government employees. These employees will, however, continue to enjoy the option to switch over to the IDA pattern of the scales of pay etc. on a voluntary basis." 21. The petitioners who opted for the IVRS, 2015 and got notional benefit of the Sixth CPC recommendation contended that by withholding the actual benefit of the Sixth CPC recommendation in the form of arrear salary, they are being discriminated against vis-a-vis other CPSE employees. This is violation of Article 14 of the Constitution of India. The other petitioners, who retired under the different schemes prior to the 2015 IVRS being introduced, contended that they are not only being discriminated against vis-a-vis the employees of CIWTC who retired under the 2015 IVRS but also vis-a-vis employees of other CPSEs. Learned Counsel for the petitioners has referred to three Apex Court judgments noted above. 22. I am unable to agree with the contentions of the petitioners. The petitioners who retired under the 2015 IVRS were conscious or deemed to have been conscious of the Circular dated 12th January, 2015 issued by the Chairman-cum-Managing Director of CIWTC which stated, inter alia, as follows:- "The improved Voluntary Retirement Scheme, 2015 would be in terms of the Department of Public Enterprise guidelines for methodology of calculating improved Voluntary Retirement Scheme package. Improved Voluntary Retirement Scheme, 2015 would be in accordance with 6th Central Pay Commission's recommendation equivalent of pay scale of Central Govt. Improved Voluntary Retirement Scheme, 2015 would be in accordance with 6th Central Pay Commission's recommendation equivalent of pay scale of Central Govt. employees w.e.f 01.01.2006 CDA Pay Scale and Industrial Dearness Allowance (IDA) pattern of pay scale w.e.f. 01.01.2007 for the employees covered under IDA and other pay scales i.e. Bipartite Settlement for floating Staff (Crews) and Tripartite Engg. Wage Settlement covered under TWES. The improved Voluntary Retirement Scheme, 2015 would be in respect of fitment of Basic Pay and Dearness Allowance. No arrear would be paid for the consideration of CDA pay scale of 2006 and IDA pay scale of 2007 in the way of improved Voluntary Retirement Scheme, 2015." The aforesaid circular made it clear that the Sixth CPC recommendation would be only notionally implemented for calculating the basic pay scale and dearness allowance and no arrears would be payable. Hence, those petitioners cannot make a legitimate grievance regarding non- payment of arrear salary to them on the basis of actual implementation of the Sixth CPC recommendation. The other petitioners who retired prior to introduction of the 2015 IVRS complained that the Sixth CPC recommendation was not even notionally implemented in their cases. However, they did not raise such grievance while availing of the benefits under the various superannuation schemes or bipartite/tripartite agreements. They received such benefits without any protest, demur or reservation. By doing so, they severed the employer/employee relationship with CIWTC. In my opinion, it would not be proper to permit them to raise the issue of implementation of the Sixth CPC recommendation after having availed of the benefits under the respective schemes with open eyes. They were all Class - I/Class - II officers and it is not that they did not understand what they were doing. 23. There is yet another hurdle to the claim of the petitioners succeeding. It is the specific case of CIWTC that as per Department of Public Enterprise guidelines contained in Memo dated 14th August, 2008, the pay scales of only the employees of the 69 CPSEs following CDA pattern was revisable with effect from 01.01.2006. 23. There is yet another hurdle to the claim of the petitioners succeeding. It is the specific case of CIWTC that as per Department of Public Enterprise guidelines contained in Memo dated 14th August, 2008, the pay scales of only the employees of the 69 CPSEs following CDA pattern was revisable with effect from 01.01.2006. However, in Paragraph - 3 of the said Memo it was stated as follows:- "The benefit of pay revision may be allowed only to employees of those CPSEs that are not loss making and are in a position to absorb the additional expenditure on account of pay revision from their own resources without any budgetary support from the Government. The Board of Directors would consider the proposal of pay revision of all the employees in the CPSE, keeping in mind the affordability and capacity of the CPSE to pay and submit a proposal to its Administrative Ministry/Department, which will approve the proposal with the concurrence of its Financial Advisor. In respect of Food Corporation of India, the concurrence of Department of Expenditure would also be required." 24. It was submitted by Learned Counsel for Union of India and also CIWTC that since its inception CIWTC has been a loss making company. The salary and operational costs were met substantially out of government grants. CIWTC being a CPSE, it is bound by the Department of Public Enterprise guidelines. Hence, the Sixth CPC recommendation could not be implemented for CIWTC employees. 25. I find substantial force in this submission of learned Counsel for the respondents. The Department of Public Enterprise Memo/Circular dated 14th October, 2008 was not there when the Hon'ble Supreme Court passed its judgment in the case of Jute Corporation of India Officers' Association - vs. - Jute Corporation of India Ltd. & Anr. (supra). It is pursuant to a policy decision that the said Department of Public Enterprise guidelines were issued. It is well established that in matters of policy, the Courts are slow to interfere. Matters of governance, especially those having considerable financial implications, are best left to the government. Unless a policy is found to be palpably perverse or arbitrary, the Courts will not interfere. It is well established that in matters of policy, the Courts are slow to interfere. Matters of governance, especially those having considerable financial implications, are best left to the government. Unless a policy is found to be palpably perverse or arbitrary, the Courts will not interfere. I do not find that the Department of Public Enterprise guideline to the effect that the Sixth CPC recommendation and the benefit of pay revision there under may be allowed only to employees of those CPSEs that are not loss making and are in a position to absorb the additional expenditure on account of pay revision from their own resources without central government support, is arbitrary or perverse. It surely has a rationale. The resources at the disposal of the government are limited. It is for the government to decide how to utilize or allocate such resources in the best public interest. Putting excessive burden on the government in the form of bailing out loss making enterprises by diverting funds from other projects, may well be counterproductive. These things are not for the courts to decide. These are matters to be left to the wisdom of the government and unless the Court finds blatant perversity or clear arbitrariness or complete irrationality in the decision of the government, in my opinion, the courts should refrain from interfering. I do not find any infraction of Article 14 of the Constitution of India in the facts of this case. 26. It was also contended on behalf of the petitioners that the Central Government had promised budgetary support for bailing out CIWTC which has been recommended for dissolution as also for meeting the additional salary bill upon actual implementation of the Sixth CPC recommendations. It was submitted that since CIWTC is a Central Public Sector Enterprise, it is the duty of the government to ensure that the employees of CIWTC receive the benefit of revised pay scale under the Sixth CPC recommendation. 27. The Central Government is morally responsible for payment of salaries of a Central Government company, submitted learned Counsel. I am unable to accept this contention. A company may be under the control of the Central Government. However, in law, it is a separate legal entity. The age old principle of law laid down in Saloman - vs. - Saloman, (1897) AC 22, still holds fort. I am unable to accept this contention. A company may be under the control of the Central Government. However, in law, it is a separate legal entity. The age old principle of law laid down in Saloman - vs. - Saloman, (1897) AC 22, still holds fort. A limited company has an independent personality in the eye of law and has an identity separate from its shareholders or Board of Directors. Even a wholly held subsidiary of a company is an independent entity separate from that of the holding company. The Central Government may be the only or single largest shareholder of a limited company, but still the company is a distinct entity and its rights and liabilities cannot be attributed to the Central Government. Government companies do not become agents of the Government so as to bind the Government for their acts, liabilities and obligations, as has been held by the Hon'ble Apex Court in the case of Steel Authority of India Ltd. vs. - National Union Water Front Workers, AIR 2001 SC 3527 . In M/s Electronics Corporation of India Ltd. - vs. - Secretary, Revenue Department, Govt. of A.P., AIR 1999 SC 1734 , the Apex Court emphasised the clear distinction between a company and its shareholders even though the shareholder may be only one i.e. the Central Government or the State Government. In the case of State of Assam - vs. Barak Upatyaka D.U. Karmachari Sanstha, 2009 (5) SCC 694 , the Supreme Court observed that a trade union representing the employees of a cooperative society cannot, by filing a writ petition, require the Government to bear and pay the salaries of the employees of the cooperative society, however pervasive the control of the State Government over such society. 28. The position in law is thus settled. Even if the Government is the sole shareholder of a company, the liabilities of the company cannot be said to be the liability of the Government. No doubt, the principle of 'lifting of corporate veil' has made an inroad into the concept of distinct legal entity of a limited company or corporation. However, the circumstances in which the corporate veil of a limited company is pierced are still very limited and the present case definitely does not warrant application of the principle of lifting the corporate veil. However, the circumstances in which the corporate veil of a limited company is pierced are still very limited and the present case definitely does not warrant application of the principle of lifting the corporate veil. It is true that in the case of Kapila Hingorani (supra), the Supreme Court had directed the State Government to make payment of the salary of the workmen since the Government undertaking had no financial means for the same. However, as has been held by the Apex Court in the case of State of U.P. & Anr. - vs. Uptron Employees' Union CMD, 2006 (5) SCC 319 , the judgment and order in Kapila Hingorani's case (supra) was passed in the peculiar facts of that case and cannot be read as laying down any law to the effect that the Government is liable to discharge the financial obligations of a Government company or a Government undertaking. 29. It was finally submitted on behalf of the petitioners that CIWTC has sufficient surplus funds from which the claims of the petitioners can be met. However, it was submitted by Learned Counsel for the Union of India by referring to Paragraph 34 of its affidavit-in-opposition filed in WP No.15504 (W) of 2017 (Alok Kumar Majumdar & Ors. - vs. - Union of India & Ors.) that the funds of the company deposited in escrow fund Fixed Deposit are proceeds of disposal of surplus assets and properties of the company and are parked in fixed deposit as per direction of the Union Cabinet communicated through the Ministry of Shipping, Government of India. These assets and properties had been acquired by CIWTC not with operational surplus but with plan fund sanctioned by the then Planning Commission on the recommendation of Ministry of Shipping. Ex-employees cannot have any claim in respect of such fund. This contention could not be controverted to any extent by learned Counsel for the petitioners. Hence, I am unable to pass any direction for payment of the claims of the petitioners from the aforesaid funds. 30. In view of the aforesaid, I am unable to pass any mandatory order directing the respondents to implement the Sixth CPC recommendations in respect of the petitioners and pay them the arrear salary on the basis thereof. The writ petitions are accordingly dismissed. The interim orders that were passed on the writ petitions stand vacated. 30. In view of the aforesaid, I am unable to pass any mandatory order directing the respondents to implement the Sixth CPC recommendations in respect of the petitioners and pay them the arrear salary on the basis thereof. The writ petitions are accordingly dismissed. The interim orders that were passed on the writ petitions stand vacated. It is however clarified that this judgment shall not stand in the way of the respondents implementing the Sixth CPC recommendations in respect of the petitioners and paying them the arrear salary on the basis thereof, if the respondents so decide as a matter of policy. There will be no order as to costs. 31. Urgent Photostat certified copy of this judgment shall be given to the parties, if applied for, upon compliance with requisite formalities.