THE GOVERNMENT CANNOT REVISE VDA IN A MANNER THAT RESULTS IN NEUTRALISATION EXCEEDING 100% OF THE COST OF LIVING INDEX.

U.P.Singh, J.

1. Since common question of law are involved in both the writ applications, they have been heard together and are being disposed of by this common judgment.

2. The principal point is that the Government of Bihar in revising Variable Dearness Allowance (VDA) at 4 paise per point of increase in the cost of living index per day has exceeded its jurisdiction and authority. In C.W.J.C. No. 910 of 1981 (R), the Notification of the Government of Bihar dated 24th February 1981 (Annexure I) has been challenged, whereby it has revised the Variable Dearness Allowance (VDA) at 4 paise per point of increase in the cost of living index per day. Earlier VDA was fixed at 2 paise per point of increase in the cost of living index per day. As a result of the said revision of VDA, on the basis of the said notification, neutralisation will be more than 100% and, therefore, it is challenged that in revising VDA, the Government has exceeded its jurisdiction.

3. The effect of the said notification on the computation of VDA is explained on the basis of the figures disclosed by the Respondents in paragraph 7 of the counter affidavit. Hence the figures are not disputed. To take an illustration in the case of Road Construction and Building Operations (Annexure 1 of the rejoinder to the counter affidavit filed on behalf of the petitioner) it will appear that on the basis of the consumer price index of July-December, 1980, the cost of living index is 403 for April, 1981 (i.e. the period after 24th February 1981 being the date of notification). Compared to the cost of living index for the preceding period, the increase in cost of living index is 27 points (i.e. 403 on the basis of July-December, 1980 consumer price index minus 376 points on the basis of January to June, 1980 consumer price index). This increase of 27 points in the consumer price index is in terms of percentage 7.18% compared to the consumer price index of the earlier period, i.e. February 1981. If the VDA is to be fixed on the basis of the impugned notification, the said VDA will be 27 x 4 paise i.e. Rs. 1.08 P. per day. Thus, there has been an increase of VDA at 13.70% compared to the total wages of Rs. 7.68 P. for the just preceding period, i.e. February, 1981 (for which the consumer price index is the period January to June, 1980). Thus, while the increase in the consumer price index is 7.18% increase in the VDA is 13.70%, i.e. much more than 100% (i.e. 190.80%). Similarly, on the basis of the consumer price index for January to June, 1981, the cost of living Index is 425 and there has been an increase of 22 points compared to the cost of living index for the just preceding period. In terms of percentage, the cost of living index has been increased by 5.46%. If the VDA is to be fixed at 4 paise per point per day, it comes Rs. 0.88 per day and in terms of percentage, the increase in VDA is by 9.82%. Hence, while the cost of living index has increased by 5.46% the VDA has increased by 9.82%, i.e. 179.9% neutralisation. Similarly, on the basis of the consumer price index of July to December, 1981, there has been an increase of 32 points compared to the cost of living index for the just preceding period. In terms of percentage there has been an increase of 7.53% in the consumer price index. By fixing the VDA at 4 paise per point, the VDA comes to Rs. 1.28 P. per day. The increase in the VDA is, therefore, by 13.01%. Thus, while the consumer price index has increased by 7.53% the VDA has increased by 13.01% which is 172.8% neutralisation. Similarly, for the other periods also, the increase in the VDA exceeds 100% of the cost of living index.

4. For the loading and unloading (vide Annexure 1-A to the rejoinder filed by the petitioner to the counter affidavit dated 9th November 1984), the consumer price index of January to December, 1980 is 390. For the preceding period on the same basis, the consumer price index was 350. Hence there has been an increase of 40 points in th