Case Note & Summary
The petitioner, Ms. Sonali Rambhau Gedam, was employed as an Accounts Officer with Nagpur Smart and Sustainable City Development Corporation (NSSCDCL), respondent no.3. She was recruited under a certain HR policy which governed her service conditions, including her salary. Subsequently, the respondent no.3 unilaterally modified the HR policy and reduced her salary from Rs. 86,165/- per month (as drawn in March 2023) to a lower amount from April 2023 onwards. The petitioner challenged this reduction by filing a writ petition before the Bombay High Court at Nagpur, seeking a declaration that the original HR policy at the time of her recruitment should govern her service conditions, and that the reduction of salary was arbitrary and illegal. She also sought a mandamus to restore her salary to the pre-reduction level and to continue paying the same with annual increments. The court heard the matter at the admission stage with consent of all parties. The petitioner argued that she had a vested right to the service conditions existing at the time of her recruitment and that the unilateral modification of the HR policy to her detriment was arbitrary and without authority of law. The respondents, including the Union of India, State of Maharashtra, and NSSCDCL, were represented by counsel. The court, after considering the submissions, held that the service conditions as contained in the HR policy in force at the time of initial recruitment would apply to the petitioner, and that the subsequent unilateral change in the HR policy could not govern her services. The court further declared that the reduction of salary was wholly arbitrary, unjustifiable, and without any authority of law, and thus null and void ab initio. The court allowed the writ petition and directed the respondents, particularly respondent no.3, to restore the salary as drawn in March 2023 and to continue paying the same with annual increments as and when due. The court also directed payment of arrears from April 2023 onwards.
Headnote
A) Service Law - Unilateral Modification of Service Conditions - Vesting of Rights - HR Policy - The service conditions as contained in the HR policy which was holding the field at the time of initial recruitment of the petitioner will be applicable and her services will not be governed by subsequent change in the HR policy, subsequent to her appointment. Held that an employee acquires a vested right to the service conditions existing at the time of recruitment, and any unilateral alteration to the detriment of the employee without consent is arbitrary and unenforceable. (Paras 1-4) B) Constitutional Law - Article 14 - Arbitrariness - Reduction of Salary - The impugned action and decision initiated executed and acted upon by respondent no.3 as regards reduction of her salary is wholly arbitrary, unjustifiable and without any authority of law and hence null and void ab-initio. Held that unilateral reduction of salary without any authority of law violates the principle of non-arbitrariness under Article 14 of the Constitution of India. (Paras 2-4)
Issue of Consideration
Whether the service conditions of an employee are governed by the HR policy in force at the time of recruitment or by a subsequent unilateral modification of that policy, and whether the reduction of salary based on such modification is arbitrary and illegal.
Final Decision
The court allowed the writ petition. It held and declared that the service conditions as contained in the HR policy which was holding the field at the time of initial recruitment of the petitioner will be applicable and her services will not be governed by subsequent change in the HR policy. It further declared that the impugned action and decision regarding reduction of her salary is wholly arbitrary, unjustifiable and without any authority of law and hence null and void ab initio. The court issued a writ of mandamus directing respondent no.3 to restore the salary as was drawn in March, 2023 and grant the said salary from April, 2023 and pay the arrears. It also directed the respondents to continue to release the salary of Rs. 86,165/- with annual increments as and when due.
Law Points
- Service conditions cannot be unilaterally altered to the detriment of an employee after recruitment
- HR policy in force at time of recruitment governs
- unilateral reduction of salary is arbitrary and violative of Article 14 of the Constitution of India
