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CASE NO.: Appeal (civil)  14572 of 1996

PETITIONER: Chairman-cum-Managing Director, National Textiles Corporation Ltd. & Ors.                      

RESPONDENT: N.T.C. (WBAB & O) Ltd.Employees Union & Ors.     

DATE OF JUDGMENT: 14/10/2003

BENCH: Brijesh Kumar & Arun Kumar.

JUDGMENT: JUDGMENT

WITH

W.P(C)No.34/1988, W.P.(C) No.1073/1989, W.P.(C) No.1074/1989,  T.P.(C) No.289/1988, W.P.(C) No.152/1988, W.P.(C) No.214/1989,  W.P.(C) No.218/1988, W.P.(C) No.44/1988, W.P.(C) No.134/1988,  W.P.(C) No.211/1988, W.P.(C) No.161/1987, W.P.(C) No.579/1989,  T.P.(C) No.290/1988.

ARUN KUMAR, J.

       Various textile mills in the country came to be vested in the  Central Government by virtue of the provisions under Section 3 (1) of  the Sick Textile Undertakings (Nationalization) Act, 1974.    The  Central Government transferred all such mills to the National Textile  Corporation Ltd. (hereinafter referred to as ’NTC’) which was brought  into existence for this purpose.  Under Section 5 of the said Act the  liability towards wages, salaries and other dues of workers of such  mills after the takeover of management by the Central Government, is  that of the Central Government.

The issue involved in these cases is regarding the claim of the  staff/sub staff engaged by the various textile mills under the NTC for  ’equal pay for equal work’.  The staff working in the mills is claiming  pay equal to or in parity with the pay scales prevailing for the staff  working in the corporate offices of the mills.  It is not in dispute that  the office staff/sub staff is on the Central Dearness Allowance pattern  (for short CDA) while the staff/sub staff working in the mills is on the  variable Industrial Dearness Allowance pattern (for short IDA)  governed by region: cum : Industry awards.  It is to be noted that  there has never been any parity in the pay scales between the staff  working in the corporate offices of the NTC and its subsidiaries and  the staff working in the mills.  However, over the years the disparity  between the pay scales of the staff working in the corporate offices  and staff working in the mills has become highly disproportionate.  It  has been noticed by the Sathyam Committee, to which reference will  be made in detail subsequently, that as against 159% increase in the  emoluments of the staff working in the corporate offices over the staff  working in the mills in the year 1987, the proportion has increased by  the year 2000 to 642%.  It is this disproportion between the pay  scales of the staff working in the corporate offices and the staff  working in the mills which has  led to tremendous discontent amongst  the staff working in the mills and it is this discontentment which is the  root cause of this entire litigation.  The problem is further aggravated  by the fact that the NTC as well as most of its subsidiaries have been  constantly incurring losses and majority of them are sick companies  facing proceeding under the Sick Industrial Companies (Special

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Provision) Act, 1985 (in short ’SICA’).

       In support of their plea of "equal pay for equal work" the staff  working in the mills claimed that the nature of work performed by  them is the same as the staff working in the corporate offices.  They  have gone to the extent of saying that there is interchangeability  between the staff working at the two places.  The subsidiaries of the  NTC are spread over in different parts of the country.  The staff  working in some of the subsidiaries through their associations  approached the respective High Courts in the country for relief  regarding revision of pay scales raising the plea of "equal pay for  equal work".  Ultimately these cases stood transferred to this Court  and were bunched together.  The matter has been pending in this  Court for quite some time.  The effort of the Court has been to find an  amicable settlement of the problem.  In fact, by an order dated 29th  September, 1989, by consent of all the counsel appearing for the  parties, reference was made to the National Industrial Tribunal in a  bid to resolve the controversy.  The Tribunal deliberated on the  issues involved over a long period of time.  It ultimately submitted its  report on 17th July, 1996.  This report did not succeed in resolving the  issues.  The report found that the "workmen in the mills are getting  lesser emoluments than those comparable categories of employees  serving in the corporate offices.  The workmen have succeeded in  showing that there are some similarities in the work done by two sets  of employees but they have failed to show satisfactorily that  employees working in the mills discharge similar functions when  judged on the yardstick of reliability, quality, responsibility,  confidentiality etc."  The finding of the Tribunal regarding absence of  equality or parity on working between the staff working in the  corporate offices and the other working in the mills has an important  bearing on the claim of the staff working in the mills.  The long time  that elapsed during the pendency of the matter in this Court and  before the National Industrial Tribunal resulted in further prejudice to  the claim of the staff in the mills because the management refused to  entertain any request for pay revision during this period on the plea of  matter being subjudice.  While the claim for revision of the pay scale  for the staff working in the mills remained pending, the pay scales of  the staff working in the corporate offices continued to be revised from  time to time which resulted in the situation as noticed earlier that is,  from a disparity in pay scales of the two categories being 159% in the  year 1987, it became 642% in the year 2000.

       The fond hope of this Court that the matter will be settled  equitably before the National Industrial Tribunal did not fructify.  This  Court continued its effort to see that some amicable settlement to the  issue is found.  The Central Government was persuaded to make  positive efforts in this direction.  As a result by a notification dated  27th October, 1999 the Government of India appointed a one man  Committee of Shri S.R. Sathyam, a retired IAS officer and a former  Secretary in the Ministry of Textile to look into the grievances of the  staff and sub staff of the NTC mills regarding their pay structure.  As  per the notification the findings of the Committee were to be of a  recommendatory nature.  The Committee was expected to keep in  view: I.      The capacity of NTC to pay wages and salaries; II.     The pay structure of other employees in the mills; III.    The pay structure of NTC Headquarters; IV.     The pay structure of similarly placed private mills; V.      The observations of the National Industrial Tribunal and of  this Court.

The Sathyam Committee gave its report on 31st October, 2000.   The Committee found that the different identity of workers working in  the corporate offices and workers working in the mills has always  been maintained.  The pay structures in the two cadres had been

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different.  The pay scales for the staff in the corporate offices were  substantially better as compared to the pay scales of the staff working  in the mills.  Most importantly the Sathyam Committee endorsed the  finding of the National Industrial Tribunal that the two categories of  employees were not performing equal work.  When there was no  equal work, there was no question of equal pay.  However, the  Committee found that the staff working in the mills cannot be  legitimately denied some relief on account of delay in settlement of  the dispute.  Some of the recommendations of the Committee are as  under:  

"23.10  The relief to be provided can be called ’special relief’.  It  must count for all pay-related benefits although it can  formally be merged with pay only at the time of the next  pay revision [Paragraph 15.4]

23.11   The ’special relief’ must also count for VRS.  The  Guidelines issued by the DPE for implementation of the  VRS may be amended to accommodate this provision  [Paragraph 16.1]

23.12   The VRS itself will have to be implemented in a time- bound manner.  Otherwise, the purpose of counting the  ’special relief’ for VRS so as to make it more attractive  may not be (fully) realized.[Paragraph 16.2.1]

23.13   For purposes of computation of VRS benefits, the  Gujarat model may be adopted. [Paragraph 16.2.2.]

23.14   In the context of voluntary retirements, it will be a  thoughtful gesture to allow some flelxibility regarding  transfer of Staff/sub-Staff between ’closure’ and ’revival’  mills. [Paragraph 16.2.3.]

23.15   For the purpose of providing ’special relief’, the mills of  the NTC may be divided into two categories:

(i)     ’Revival Mills’ i.e., sick mills identified by the BIFR to be  revivable.

(ii)    ’Closure Mills’ i.e., sick mills ordered by the BIFR to be  closed. [Paragraph 17.1]

23.16   The approach towards providing ’special relief’ in respect  of these three categories can be as follows:

(i)     For ’Good Mill’, payment shall made with immediate  effect with reference to a ’cut-off date’

(ii)    (a). For ’Revival Mills’, the benefit of the ’special relief’  shall be available immediately for purposes of VRS.

(b)     If the Staff/sub-Staff chooses to stay with the Mill,  then, the ’special relief’ will be available with effect  from the ’cut-off date’, but only after the Mill is  revived.

(c)     In case, the rehabilitation plan fails and the Mill  cannot be revived, the staff/sub-staff can, at that  stage, opt for VRS and claim the benefit of the  special relief.  Only, there can not be any claim for  arrears.

(iii)   For ’Closure Mills’, the benefit of the ’special relief’ shall

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be available immediately to staff/sub-staff opting for  VRS.  The benefit shall not be available to staff not  proceeding on VRS. [Paragraph 17.2]

23.17   It will be necessary to define the ’cut-off date’ without  any ambiguity.  It will be reasonable to identify the date  of the meeting in the Ministry of Textiles in which an      ad hoc relief was proposed as the ’cut-off date’.  [Paragraph 18.1. and 18.2]

23.18   It will be more convenient to exclude the retired  employees from the scope of the benefit  proposed.[Paragraph 19.1]

23.19   The ’benefit order’ must incorporate revised work norms.  [Paragraph 19.2]

23.20   The ’special relief’ to be given can only partially  neutralize the gap in emoluments.[Paragraph 20.1]

23.21   The prescription of partial neutralization need not  necessarily apply equally at all levels.  It will be more  equitable to apply the ’special relief’ in a graded manner.   Towards this end, the staff/sub-staff in Mills can be  divided into four categories. [Paragraphs 20.2.1., 20.2.2,  and 20.2.3.]

23.22   The graded relief to be provided can be as follows:

(i)     Rs.1,500/- per month for category (i); (ii)    Rs.1,250/- per month for category (ii); (iii)   Rs.1,000/- per month for category (iii); and (iv)    Rs.750/- per month for category (v). [Paragraph 20.2.4.]"

       The learned counsel for the Union of India submitted that the  recommendations of the Sathyam Committee have been  implemented and nothing further survives.  The learned counsel  appearing for the Union of India further pointed out that various sick  mills were declared as sick under the SICA and proceedings before  the Board of Industrial and Financial Reconstruction (hereinafter  referred to as ’BIFR’) for rehabilitation of the concerned mills are  pending.  In fact, it appears that the BIFR has already formulated and  sanctioned schemes in relation to some of the sick mills and the  sanctioned schemes are being implemented.  In view of this, the  submission is that any financial burden placed on the management  by virtue of any financial relief granted to the workers at this stage  would upset the rehabilitation scheme.  Further financial burden  which is not under consideration of the rehabilitation package cannot  be foisted on the mills.  Such a burden would result in, the entire  scheme falling through.  For this reason it is contended that this Court  should not grant any  relief to the workers.

       The plea of discrimination in the matter of revision of pay scales  between staff working in the corporate offices/headquarters and the  staff working in the Mills is sought to be met by contending that office  staff is governed by the CDA pattern while Mills staff is governed by  the IDA pattern.

       On the other hand, the argument on behalf of the staff/sub staff  of the Mills is that great injustice has been done to the workers  working in the Mills. While their counterparts working in the corporate  offices have been getting pay revisions in normal course as and when  it is allowed to other Government servants, the staff working in the

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mills has been deprived of the said benefit.  As a result of this, it is  submitted that during the last two decades while the cost of living has  gone up several times the salary and allowances of the workers  working in the Mills have remained constant.  The emphasis on  behalf of the workers has been that there is equality and parity in the  work and working conditions of the workers of the corporate offices  and the workers working in the Mills. Therefore, it is a case for equal  pay.  On this aspect however, as noticed earlier, the National  Industrial Tribunal found against staff of the Mills.  The finding of the  Tribunal was endorsed by the Sathyam Committee.  In the face of the  findings of the two fact finding bodies we find ourselves unable to  take a different view on this issue.  Neither necessary facts have  been placed before us nor we would like to go into such a question of  fact.  We have no reason to differ with the finding of fact on this issue  arrived at by the two independent bodies.  So far as the claim of the  staff based on the principle of equal pay for equal work is concerned,  it is therefore, not tenable.  When the work is not equal, the question  of equal pay does not arise.  But we cannot ignore the fact that the  staff/sub staff working in the Mills has unfortunately received a step  motherly treatment.  They have not had a pay revision for years.  The  litigation has been pending for more than a decade.  They have been  told that the matter is subjudice.  The Sathyam Committee noticed  this sorry plight of the workers.  The Committee gave some ad hoc  relief to the workers.  But that is not enough.  The Sathyam  Committee noticed disparity in the pay scales of the two categories of  workers which was 159% in 1987 and had risen to 642% in the year  2000.  This is highly unjust and unfair.  So far as the staff working in  the mills is concerned we are told that all the mills are incurring  losses and that does not justify any increase in the pay package of  the workers.  But the staff working in the corporate offices of the Mills  is also staff of the parent body.  If the mill is incurring losses the  impact has to be on everyone connected with the mill, in whatever  capacity.  You cannot have double standards.  When you give  revised pay scales to office staff is there no financial burden?

In view of the fact that the nature of duties of the staff in the two  categories has been found to be not at par, parity in pay scales may  not be possible.  Yet there can be no case for total denial of revision  of pay to the staff/sub staff working in the mills.

Discrimination between the two categories of staff cannot be  justified on the basis of applicability of the CDA pattern and the IDA  pattern to the respective categories of staff.  The IDA pattern cannot  be taken to debar any revision of pay scales.  The Central  Government has to act as a model employer and such specious  pleas on its part are highly improper and unjustified.

In our view, a case for relief to the staff/sub staff working in the  Mills is definitely made out.  The workers deserve some relief though  not parity of pay scales with staff/sub-staff working in corporate  offices, but certainly on account of revision of pay scales/increase of  D.A. or emoluments from time to time as and when fell due during  period of nearly three decades since when, no revision of their pay  scale has been made.         Relief to what extent is the next question?  Nothing has been  placed before us nor has been brought to our notice which may  enable us to spell out the extent of relief.  Even on behalf of the  workers the emphasis has been on the fact that they are entitled to  revision of pay scales as in the case of staff in the headquarters or  corporate offices.  Nothing more has been urged.  Even otherwise we  feel we are ill-equipped to work out the extent of relief which can be  granted to the workers in the mills.  Therefore, we direct the Central  Government to take appropriate steps which if so required may  include appointment of an expert to work out the extent of relief which  ought to be granted to the workers in the mills.  Some consideration

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may be had about the financial constraints, if any, but it cannot be to  the extent of virtual denial of any benefit.  Before taking a final  decision in the matter, an opportunity of hearing be allowed to the  management as well as to the workers to enable them to place their  respective stands before the decision making authority.  The decision  should be taken within four months from the date of this judgment  and the same should be implemented within two months thereafter.

       The learned counsel for the Union of India relied on a recent  judgment of this Court in A.K. Bindal and another vs. Union of  India [(2003) 5 SCC 163] in support of his contention that pay  revision should not be allowed.  This was a case of public sector  company employees seeking revision of their pay scales.  It was held  that employees could not claim such a right and such additional  financial burden could not be placed on the Government in the  absence of material placed before Court justifying the same.  This  case pertains to public sector undertaking namely Fertilizer  Corporation of India.  This case is not attracted in the facts of the  present case.  First, here the Government has a statutory liability for  the wages, salaries and dues of the workers.  Second, pay revision  was being allowed in case of one category of workers within the  same organisation, while it was being denied to another category of  workers, giving rise to discrimination.  Therefore, Bindal’s case has  no relevance so far as the present case is concerned.

       So far as the argument regarding no relief being admissible to  the workers in the Mills in view of rehabilitation schemes being  worked out before the BIFR, we have to note that the proceedings  have been pending since 1993, i.e. for more than ten years. The  management was all along fully aware of the demand of the workers  of the Mills in this behalf.  Their cases have been pending in courts  since much before the rehabilitation schemes were conceived of.   How long shall the concerned workers be continued to be denied  their legitimate claims?  In the various deliberations with the workers  it has been noted that rehabilitation schemes are independent of any  orders that may be passed by this Court.  Therefore, pendency of the  rehabilitation schemes before the BIFR is not a sufficient ground for  us to deny relief to the staff/sub staff working in the Mills.  As per the  provisions of Section 5 (2) (c) of the Sick Textile Undertakings  (Nationalisaion) Act, 1974, the wages, salaries and other dues of the  employees of the sick textile undertakings after the takeover of their  managements by the Central Government  are the responsibility of  the Central Government.  The Central Government has failed to  discharge its responsibility for all these years by raising such  specious pleas.  The Central Government has to discharge its  responsibility de hors the BIFR schemes.  The argument therefore, is  rejected.

The appeal as well as the various writ petitions and transfer  petitions are disposed of in above terms.