Case Note & Summary
The appeal arises from a judgment of a learned Single Judge who allowed a writ petition filed by retired employees of HMT, a sick Central Public Sector Enterprise. The petitioners, who had superannuated from service, sought the benefit of the 1997 pay scale revision which was implemented by the government from 28.02.2014, the date of approval, but only for employees on the rolls as of that date. The Single Judge set aside the government order dated 31.03.2014 and the consequential order dated 10.06.2014, and directed the appellants to extend the benefit of 1997 pay revision with effect from 01.01.1997, along with arrears. Subsequently, on 05.12.2023, the Single Judge rectified the order to also cover the 2007 pay revision from 01.01.2007. The appellants, comprising HMT Machine Tools Ltd., HMT Ltd., and the Union of India, challenged both orders in this writ appeal. The central legal question is whether the fixation of a cut-off date based on the company’s financial position, excluding employees who had retired prior to that date, can withstand the test of reasonableness and rationality. The case also involves the application of DPE guidelines insofar as they condition pay revision on the enterprise’s capacity to pay and on government approval, especially for sick companies referred to BIFR.
Headnote
A) Service Law - Pay Revision - Exclusion of Retired Employees - Reasonableness of Cut-off Date - Sick Industrial Companies (Special Provisions) Act, 1995; Department of Public Enterprises Guidelines - The core issue is whether implementing 1997 pay revision from a posterior date, thereby excluding employees who retired before that date, is valid. The court is examining the rationality of such classification. (Paras 1-3)
B) Procedural Law - Rectification of Judgment - Power of Single Judge to Alter Judgment After Delivery - Karnataka High Court Act, 1961, Section 4 - The appeal also challenges the order dated 05.12.2023 where the Single Judge rectified the judgment to include 2007 pay revision, raising questions of jurisdiction and validity of such post-judgment correction. (Para 2.4)
Issue of Consideration
Whether selection of a posterior date factored on financial position for implementing the pay scale revision in a sick company to be applicable to those employees who were on the roll of employment on such fixed date, to the exclusion of the segment of employees not in employment on that date having retired, stands valid on the touchstone of reasonableness and rationality
Law Points
- Pay revision implementation
- cut-off date classification
- reasonableness and rationality
- sick industrial companies
- public sector undertaking guidelines
- DPE guidelines
- BIFR
- equal treatment of employees
- post-judgment rectification
Case Details
2024 LawText (KAR) (06) 21
WRIT APPEAL NO. 955 OF 2023 (S-RES)
N.V. Anjaria, Chief Justice, Krishna S Dixit, Justice
For appellants 1 & 2: Ganapati Narayan Hegde, Senior Advocate along with Rayappa Y. Hadagali, Advocate; for appellant 3: P. Chidananda, CGC; for respondents: Dhananjay V. Joshi, Senior Advocate along with Ms. Shreya Mathew, Advocate for Smt. Kavita Damodaran, Advocate for C/R-1
M/s HMT Machine Tools Limited, HMT Ltd., Union of India (Ministry of Heavy Industries and Public Enterprises, Department of Heavy Industry)
Mr. Jayaram V.L., Mr. H. Ravindra, Mr. M.R. Viswanath, Mr. Pillappa N, Mr. Thyagaraju M, Mr. Prakash M, Mr. Madhava R, Mr. B Sudhakar, Mr. Muniyappa
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Nature of Litigation
Writ appeal against single judge order allowing writ petition by retired employees seeking benefit of 1997 pay revision
Remedy Sought
Appellants seek to set aside the orders of the single judge dated 04.07.2023 and 05.12.2023 and dismiss the writ petition
Filing Reason
Single judge set aside government order dated 31.03.2014 and consequential order dated 10.06.2014, directing extension of 1997 pay revision benefits to retired employees; subsequently rectified to include 2007 pay revision
Previous Decisions
W.P. No. 2175/2022 allowed on 04.07.2023; orders dated 31.03.2014 and 10.06.2014 set aside; rectification order dated 05.12.2023 inserted 2007 pay revision
Issues
Whether the selection of a posterior date for implementing pay scale revision in a sick company, excluding employees who retired before that date, is valid on the touchstone of reasonableness and rationality
Whether the Single Judge’s rectification order dated 05.12.2023 inserting 2007 pay revision is legally sustainable
Judgment Excerpts
Whether selection of a posterior date factored on financial position for implementing the pay scale revision in a sick company to be applicable to those employees who were on the roll of employment on such fixed date, to the exclusion of the segment of employees not in employment on that date having retired, stands valid on the touchstone of reasonableness and rationality, is the question arising to be analysed and answered in this appeal.
The consequential order dated 10th June 2014 issued by appellant No.1-HMT Ltd. was also set aside.
The Cabinet Committee on Economic Affairs in its meeting dated 28th February 2024 along with other clearances, had approved to implement 1997 pay revision from the date of approval, with one-time relaxation of the Department of Public Enterprises Guidelines.
Procedural History
Single Judge allowed W.P. No. 2175/2022 on 04.07.2023 setting aside government and consequential orders; directed extension of 1997 pay revision from 01.01.1997. On 05.12.2023, single judge rectified judgment to include 2007 pay revision with effect from 01.01.2007. Present writ appeal filed under Section 4 of Karnataka High Court Act challenges both orders. Heard and reserved for judgment.
Acts & Sections
- Sick Industrial Companies (Special Provisions) Act, 1995:
- Karnataka High Court Act, 1961: Section 4
