Case Note & Summary
The petitioner, Bhartiya Kamgar Karmachari Mahasangh, a registered trade union and recognized union of the Maharashtra State Financial Corporation (Respondent No.1), filed a writ petition seeking implementation of revised pay scales for employees as per the VIth Pay Commission. The Board of Directors of the Corporation had passed a resolution on 1.2.2012 approving the revised pay scales and reiterated the decision in a subsequent meeting, but implementation was withheld pending approval from the State of Maharashtra (Respondent No.2). The petitioner argued that Respondent No.1 is an autonomous statutory corporation under the State Financial Corporations Act, 1951, and under Section 23 of the Act, the Corporation has the power to lay down service conditions including pay scales. The petitioner further contended that the proviso to Section 23, which required state government approval, was omitted by Amendment Act 39 of 2000 with effect from 5.9.2000, and thus no approval was necessary. Respondent No.1 admitted the resolution but stated that implementation awaited state approval. The State argued that the Corporation had incurred revenue losses. The court examined Section 23 of the Act and noted that the proviso requiring state approval was omitted. The court held that the Corporation, being an autonomous body, has the power to determine service conditions of its employees without state approval. The court directed Respondent No.1 to implement the revised pay scales within four weeks from the date of the order, rejecting the State's objection regarding revenue losses as irrelevant. The petition was allowed with no order as to costs.
Headnote
A) Labour Law - Pay Revision - Autonomous Corporation - Section 23, State Financial Corporations Act, 1951 - The petitioner trade union sought implementation of revised pay scales as per VIth Pay Commission approved by Board of Directors - The court held that after the omission of the proviso to Section 23 by Amendment Act 39 of 2000, the approval of the State Government is no longer necessary - The Corporation being an autonomous body has power to determine service conditions of its employees - The Board resolution was valid and binding - The court directed implementation within four weeks (Paras 1-8).
Issue of Consideration
Whether the approval of the State Government is necessary for the implementation of revised pay scales by an autonomous State Financial Corporation under the State Financial Corporations Act, 1951, after the omission of the proviso to Section 23.
Final Decision
The petition is allowed. Respondent No.1 is directed to implement the revised pay scales as per the resolution of the Board of Directors within four weeks from the date of the order. Rule is made absolute. No order as to costs.
Law Points
- Autonomous statutory corporation can determine service conditions without state approval after omission of proviso to Section 23 of SFC Act
- 1951
