2023 Supreme(Cal) 785

IN THE HIGH COURT AT CALCUTTA
LAPITA BANERJI, J.
Pulak Baran Chakraborty – Appellant
Versus
The Union of India & Ors. –Respondents
W.P.A. 22675 of 2022
Decided on : 10-08-2023

A subordinate legislation, such as a CIL Circular, must be interpreted in consonance with the statutory Rules governing the same issue, and that the statutory Rules would have precedence.

Headnote:

PUBLIC SECTOR UNDERTAKINGS - PAY ANOMALY - REMOVAL - CONDITIONS - INTERPRETATION - FR 22 & FR 23 - CIL CIRCULAR DATED SEPTEMBER 6, 2011 - SCOPE AND APPLICABILITY - DISCRIMINATION - ARTICLE 14 - VIOLATION.

Fact of the Case:

The petitioner, a former employee of Eastern Coalfields Limited (ECL), retired in 2012. Pursuant to an office memorandum dated May 02/07, 2009, CIL revised the pay of Board Level and below Board Level Executives, including the petitioner. The petitioner received a fitment benefit but noticed a pay anomaly where some of his juniors were receiving higher Basic Pay. Despite representations, the anomaly was not rectified, leading to the filing of several applications under the Right To Information Act, 2005.

Finding of the Court:

1. The CIL Anomaly Committee held a meeting on August 11, 2011, to address pay anomalies. It followed the basic principles of FR 22 & FR 23 for stepping up the pay of senior officers compared to juniors. 2. The office order dated September 6, 2011, issued by the General Manager (Personnel), laid down conditions for removing pay anomalies. These conditions were to be strictly adhered to. 3. The petitioner's case was rejected by the Internal Anomaly Committee for not strictly fulfilling the conditions laid down in the office order. 4. The court found that the interpretation of the conditions by the Pay Anomaly Committee was unreasonable and perverse, as it led to a situation where a promoted senior employee could not seek rectification of pay anomaly, while a non-promoted senior employee could. 5. The court held that a subordinate legislation, such as the CIL Circular, must be interpreted in consonance with the statutory Rules governing the same issue, and that the statutory Rules would have precedence. 6. The court found that the Impugned Order failed to consider the provisions of the Fundamental Rules issued by Notification dated June 16, 1989, which were prior to the CIL Circular dated September 6, 2011. 7. The court held that a PSU, being a "State" within the meaning of Article 12 of the Constitution of India, has to act fairly, reasonably, and in a manner that is not arbitrary or discriminatory. 8. The court found that the ECL management adopted a back-door policy for rectifying the Basic Pay of some executives, which was violative of Article 14 of the Constitution of India. 9. The court relied on several precedents to establish that a mere circular cannot prevail over statutory Rules, and that where there is a conflict between a Statute and an Executive Instruction, the former will prevail.

Issues: 1. Whether the conditions laid down in the CIL Circular dated September 6, 2011, for removing pay anomalies were interpreted correctly by the Pay Anomaly Committee. 2. Whether the Impugned Order failed to consider the provisions of the Fundamental Rules issued by Notification dated June 16, 1989. 3. Whether the ECL management adopted a back-door policy for rectifying the Basic Pay of some executives, which was violative of Article 14 of the Constitution of India.

Ratio Decidendi: 1. The conditions laid down in the CIL Circular dated September 6, 2011, for removing pay anomalies were not interpreted correctly by the Pay Anomaly Committee. The interpretation led to an unreasonable and perverse situation where a promoted senior employee could not seek rectification of pay anomaly, while a non-promoted senior employee could. 2. The Impugned Order failed to consider the provisions of the Fundamental Rules issued by Notification dated June 16, 1989, which were prior to the CIL Circular dated September 6, 2011. The Fundamental Rules should have been considered in conjunction with the Circular to ensure a harmonious interpretation. 3. The ECL management adopted a back-door policy for rectifying the Basic Pay of some executives, which was violative of Article 14 of the Constitution of India. The petitioner was discriminated against vis-à-vis other employees of the company, without any justifiable reason.

Final Decision: 1. The Impugned Order dated July 27, 2022, was set aside and/or quashed. 2. The court directed the fixation of the petitioner's pay in accordance with the principles laid down in FR 22 and FR 23 as embedded in Circular dated September 6, 2011. 3. The benefits given to the employee Shekhar Saran were to be kept in mind while fixing the pay of the petitioner. 4. The pay anomaly in the petitioner's Basic pay was directed to be removed by the Pay Anomaly Committee by stepping up the same to the pay of said Manoj Kumar, from the date he was paid Rs.25,100/- as compared to Rs.25,000/- paid to the petitioner, if the petitioner is otherwise entitled to the same. 5. The Committee was directed to compute the arrears of pay payable to the petitioner and disburse the same within a month of computation, with an interest of 6 percent per annum from the date when the anomaly was rectified for the employee Shekhar Saran till the date of actual disbursal of the amount.