IMPORTANT POINT
The court established that financial constraints can justify the selection of a cut-off date for pay revisions in sick companies, provided the classification is rational.

JUDGMENT :

(N.V. Anjaria, CJ.) :

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.

2. Preferred by original respondents, the challenge in the present appeal is addressed to judgment and order dated 4th July 2023 of learned Single Judge. Thereby, the petition filed by the petitioners-respondents herein came to be allowed by setting aside order dated 31st March 2014 issued by Union of India, Ministry of Heavy Industries- respondent No.1. The consequential order dated 10th June 2014 issued by appellant No.1-HMT Ltd. was also set aside. Appellant Nos.1 and 2-original Respondent Nos.2 and 3- HMT Machine Tools Ltd. and HMT Ltd. respectively, were directed to extend the benefit of the pay scale revision of 1997 with effect from 1st January 1997 with payment of consequential benefits and the arrears.

2.1 By aforementioned communication dated 31st March 2014, the Ministry of Heavy Industries and Public Enterprises intimated respondent No.2-HMT Ltd. that 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 (DPE Guidelines). It also contemplated enhancement of age of retirement. In other words, the decision was communicated that from the date of approval, that is 28th February 2014, the pay revision of 1997 would be implemented for the employees of Appellant No.1-HMT Machine Tools Ltd.

2.2 Appellant No.1-HMT Machine Tools Ltd. is 100% subsidiary company of appellant No.2-HMT Ltd. It is a loss making Central Public Sector Enterprise, which was referred to the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1995.

2.3 In response and pursuance to the aforesaid communication, HMT Machine Tools Ltd. revised the pay scales and dearness allowances with effect from 28th February 2014, for the Officers on the roll of HMT Machine Tools Ltd. on the said date, who had been holding the post below the Board level. Those who were not continuing on the roll of employment of appellant No.1 were not given the benefit.

2.4 During the pendency of the present appeal in which the respondent-original petitioners filed an application for correction of the order of learned Single Judge under challenge dated 4th July 2023, the application came to be allowed by learned Single Judge and the appellant Nos.1 and 2 were directed to extend the benefits of 2007 pay scale revision with effect from 1st January 2007 by his order dated 5th December 2023. In this appeal, it is contended that the said order dated 5th December 2023 rectifying and inserting 2007 pay scale revision with effect from 1st January 2007 in the judgment and order dated 4th July 2023 was also bad in law.

3. It was to challenge the aforesaid decision, that the petition came to be filed by the petitioners who are the retired employees in the office cadre of respondent No.2- HMT Ltd. and who were superannuated from respondent No.3 subsidiary Company. Petitioner No.1 was earlier working as Assistant Manager and retired on 31st October 2013. Similarly, the other petitioners previously held the post of Deputy Manager, HRD, Deputy General Manager (M), Deputy General Manager (SR), etc. and retired on different dates. It was stated that the respondent No.2- HMT Ltd. was incorporated in the year 1953, which was initially profit making Company, but subsequently declined into incurring of losses.

3.1 It was stated that the Central Government introduced in the year 1992,