2003 Supreme(SC) 509

2003(3) Supreme 669
Supreme Court of India
S. Rajendra Babu and G.P. Mathur, JJ.
A.K. Bindal & Anr. —Petitioners
versus
Union of India & Ors. —Respondents
Transfered Case (C) No. 8 of 2000
With
T.C. (C) Nos. 2, 4, 3, 9, 10, 11, 12, 13, 15, 35 of 2000 and T.P. (C) No. 326 of 2002)
Decided on 25-4-2003
Counsel for the Parties :
For the Appearing Parties : Mukul Rohatgi, Additional Solicitor General, R. Venkataramani, L. Nageswara Rao, N.N. Goswami, Sr. Advocates, A. Bhattacharya, Sanjoy Kr. Ghosh, Vivek Singh, Vani Singh, Ms. Vimla Sinha, Yunus Malik, L.R. Singh, R. Krishnamorthi, Ambhoj Kumar Sinha, Ms. Mridula Ray Bhardwaj, Dr. Sumant Bhardwaj, Ms. Mona Rajvanshi, Raj Kumar Gupta, Sheo Kumar Gupta, A.N. Bardiyar, Prshant Chaudhary, G.S. Chatterjee, Raja Chatterjee, Punit Dutt Tyagi, Ms. Kirti Renu Mishra, S. Wasim A. Qadri, B.V. Balram Das, T.A. Khan, R.N. Poddar, Mrs. Anil Katiyar, Deba Prasad Mukherjee, Annam D.N. Rao, Niraj Gupta, Ms. Meera Mathur, Shambhu Prasad Singh, Ms. Manjula Gupta, Ms. Sushama Suri, M/s. Dadachanji & Co. Advocates (NP), Ghanshyam Joshi P. Addy, S. Saxena, R.C. Verma, Mukesh Verma, Manish Srivastava, Mrs. Rakha Palli, Shreekant N. Terdol, Jagat Arora, Rajat Arora, Rajiv Nanda, Pratap Venugopal, P.S. Sudhir, K.J. John & Co., Ajay Kumar Jain, Ms. Nitika Pal, Ms. Suruchii Agarwal, Advocates.

Important Point
Employees of Government companies being not Government servants, they have absolutely no legal rights to claim that Government should pay their salary or that the additional expenditure incurred on account of revision of their pay scale should be met by the Government.

Headnote:(i) Service and Labour Law—Public Sector Enterprises—Wage increase, claim of—Fertilizer Corporation of India and Hindustan Fertilizer Corporation are Government Companies—Employees of such companies are not civil servants—They have no legal right to claim that Government should pay their salary or that the additional expenditure incurred on account of revision of their pay scale should be met by the Government—Company sustaining losses having no financial capacity to revise or enhance pay scale—Whether employees of such companies can claim any right to ask for direction to Central Government to meet additional expenditure which may be incurred on account of revision of pay scales?—(No)—Two Office Memorandums stating that Government would not provide any budgetary support for wage increase, held sustainable.

       Held : The change in policy effected by these Memorandums was that the Government would not provide any budgetary support for the wage increase and the undertakings, themselves will have to generate the resources to meet the additional expenditure, which will be incurred on account of increase in wages. So far as sick enterprises which were registered with BIFR it was directed that the revision in pay scale and other benefits would be allowed only if it was actually decided to revive the industrial unit. The question which arises for consideration is whether the employees of Public Sector Enterprises have any legal right to claim that though the industrial undertakings or the companies in which they are working did not have the financial capacity to grant revision in pay scale, yet the Government should give financial support to meet the additional expenditure incurred in that regard. (Para 13)

       Since employees of Government Companies are not government servants they have absolutely no legal right to claim that government should pay their salary or that the additional expenditure incurred on account of revision of their pay scale should be met by the government. Being employees of the companies it is the responsibility of the companies to pay them salary and if the company is sustaining losses continuously over a period and does not have the financial capacity to revise or enhance the pay scale, the petitioners cannot claim any legal right to ask for a direction to the Central Government to meet the additional expenditure which may be incurred on account of revision of pay scales. It appears that prior to issuance of the Office Memorandum dated 12.4.1993 the Government had been providing the necessary funds for the management of Public Sector Enterprises which had been incurring losses. After the change in economic policy introduced in early nineties, Government took a decision that the Public Sector Undertakings will have to generate their own resources to meet the additional expenditure incurred on account of increase in wages and that the government will not provide any funds for the same. Such of the Public Sector Enterprises (Government Companies) which had become sick and had been referred to BIFR, were obviously running on huge losses and did not have their own resources to meet the financial liability which would have been incurred by revision of pay scales. By the Office Memorandum dated 19.7.1995 the Government merely reiterated its earlier stand and issued a caution that till a decision was taken to revive the undertakings no revision in pay scale should be allowed. We, therefore do not find any infirmity legal or constitutional in the two Office Memorandums which have been challenged in the writ petitions. (Para 17)

       (ii) Constitution of India—Article 21—Right to life—Scope and content—Non revision of pay scales of employees of Government companies—Whether amounts to violation of fundamental rights guaranteed under Article 21—(No).

       Held : Article 21 provides that no person shall be deprived of his life or personal liberty except according to procedure established by law. The scope and content of this Article has been expanded by judicial decisions. Right to life enshrined in this Article means something more than survival or animal existence. It would include the right to live with human dignity. Payment of very small subsistence allowance to an employee under suspension which would be wholly insufficient to sustain his living, was held to be violative of Article 21 of the Constitution in State of Maharashtra v. Chandrabhan AIR 1983 SC 803. Similarly, unfair conditions of labour in People s Union for Civil Liberties v. Union of India AIR 1982 SC 1473. It has been held to embrace within its field the right to livelihood by means which are not illegal, immoral or opposed to public policy in Olga Tellis v. Bombay Municipal Corporation AIR 1987 SC 108. But to hold that mere non-revision of pay scale would also amount to a violation of the fundamental right guaranteed under Article 21 would be stretching it too far and cannot be countenanced. Even under the Industrial law, the view is that the workmen should get a minimum wage or a fair wage but not that his wages must be revised and enhanced periodically. It is true that on account of inflation there has been a general price rise but by that fact alone it is not possible to draw an inference that the salary currently being paid to them is wholly inadequate to lead a life with human dignity. What should be the salary structure to lead a "life with human dignity" is a difficult exercise and cannot be measured in absolute terms. It will depend upon nature of duty and responsibility of the post, the requisite qualification and experience, working condition and a host of other factors. The salary structure of similarly placed persons working in other Public Sector Undertakings may also be relevant. The petitioners have not placed any material on record to show that the salary which is currently being paid to them is so low that they are not able to maintain their living having regard to the post which they are holding. (Para 18)

       (iii) Service Law—Pay scales, revision of—Economic viability of industrial unit or financial capacity of employer—Whether can be taken into consideration in matter of revision of pay scales of employees—(Yes).

       Held : It appears to be the consistent view of this Court that the economic viability or the financial capacity of the employer is an important factor which cannot be ignored while fixing the wage structure, otherwise the unit itself may not be able to function and may have to close down which will inevitably have disastrous consequences for the employees themselves. The material on record clearly shows that both FCI and HFC had been suffering heavy losses for the last many years and the Government had been giving considerable amount for meeting the expenses of the organisation. In such a situation, the employees cannot legitimately claim that their pay scales should necessarily be revised and enhanced even though the organisations in which they are working are making continuous losses and are deeply in red. (Para 22)

       (iv) Service and Labour Law—­Revision of wage structure—Employees of Fertilizer Corporation of India and Hindustan Fertilizer Corporation—Companies sustaining losses—Commercial production in some of units of both the companies never commenced—Government decision of closure of majority of units of both FCI and HFC—Scheme for Voluntary Retirement—Employees having taken advantage of VRS and having taken the amount, cannot raise any grievance regarding non revision of pay scale—Writ petitions dismissed as infructuous. (Paras 27 & 28)