Differential treatment in employee benefits based on classification does not violate Article 14 of the Constitution if reasonable discrimination is applied.

JUDGMENT :

VIBHU BAKHRU, CJ.

1. The appellant has filed the present appeal impugning an order dated 28.06.2024 passed by the learned Single Judge in Writ Petition No.60148 of 2014 whereby the said petition was dismissed.

2. The appellants (writ petitioners) had filed the aforementioned petition impugning a Circular dated 04.06.2010 issued by the respondent. Additionally, the appellants had also prayed that the Memorandum of Understanding dated 10.09.2009, which pertained to the revision of fringe benefit of the appellants for the period 01.09.2009 till 31.12.2011, be declared as void ab initio.

3. Petitioners have also sought for grant of fringe benefits at the rate of 40% of their basic pay for the period 26.11.2008 to 31.12.2011, as has been granted to Group A and B officers.

4. The appellants are employees of the respondent falling in the category of C and D employees. In terms of the instructions issued by the Central Government, the respondent entered into negotiations with Group C and D employees for revision of their pay, with effect from 01.01.1997 till 2006. The remuneration payable to the said employees included fringe benefits, which were payable to the appellants on absolute rupee terms and not ad valorem of their basic salary.

5. The appellants state that the Department of Public Enterprises issued an Office Memorandum dated 09.11.2006 directing all Central Public Sector Enterprises to initiate negotiations with Employee Associations or Associations of group C and D employees for revision of pay scales with effect from 01.01.2007.

5. In terms of the said Office Memorandum, the respondent entered into negotiations with the Association of the group C and D employees. The negotiations fructified in an agreement which was recorded in the Memorandum of Understanding dated 10.09.2009, whereby the pay scales were revised. The appellants were also granted fringe benefits in absolute rupee terms. It is the appellants case that at the material time they were not aware of the revision of pay scales of group A and B officers. Their pay scales were also revised, but they were granted fringe benefits on ad valorem basis to the extent of 40% to their basic pay. The appellants are essentially aggrieved by the different methods of granting fringe benefits.

6. It is contended on behalf of the appellants that the different basis, i.e. the 40% ad valorem of basic pay for group A and B employees and in rupee terms to group C and D employees is discriminatory and falls foul of Article 14 of the Constitution of India.

7. It is also contended the fact that the perquisites to group A and B officers would be granted at the rate of 40% of their basic pay was not disclosed to the Association of C and D employees. Therefore, they had negotiated for revision of pay scales being unaware of the basis on which fringe benefits were granted to group A and B employees. The appellants claim that this is a fraud played upon their Association and therefore the Memorandum of Understanding dated 10.09.2009 entered into with the Association is liable to be declared as void.

8. We find no merit in the aforesaid contentions. It is well settled that Article 14 of the Constitution of India admits reasonable classification. For the purposes of duties, emoluments, grades and rank, employees have been categorized in separate categories. The emoluments paid to group A and B officers are not required to be equivalent to the emoluments paid to group C and D employees. Therefore, we are unable to accept that granting fringe benefits to group C and D employees on rupee terms and granting perquisites to group A and B officers as 40% of their basic pay constitutes conflicts with the equal protecti