23 August 1996
Supreme Court


Bench: KIRPAL B.N. (J)
Case number: C.A. No.-004807-004807 / 1996
Diary number: 11088 / 1995






DATE OF JUDGMENT:       23/08/1996


CITATION:  JT 1996 (7)   366        1996 SCALE  (6)154



JUDGMENT:                       J U D G M E N T KIRPAL, J      This appeal  by special  leave arises form the judgment of the Orissa high Court which had allowed the writ petition filed by  23 workmen of the appellants, respondents 1 to 23, and while  striking down a paragraph of a circular according to which  their pay  was fixed,   a direction was issued for re-fixation of  the pay  in manner  indicated  by  the  High Court.      The respondents  1 to  23, prior  to 1st  January 1987, were employed  as workmen by the appellants. On 20th January 1982 a  seven years  stagnation scheme was introduced by the appellants whereunder its employees in the highest workman’s pay scale,  who had  been stagnating  for seven  years, were promoted to the lowest officer’s scale. These employees, who were  workmen  and  were  called  senior  operators,  senior technicians etc.  were, on  their placement  in  the  lowest officer’s scale,  designated as Assistant Foremen (AFM ’D’), Junior Officer  (JO ’D’)  etc.  On  such  placement  in  the officer’s grade  these erstwhile  workmen  were  treated  as officers and  they received all the facilities admissible as officers.      On 30th  October, 1983  a  draft  of  settlement  under Section 18  of the  Industrial Disputes Act, 1947 (for short ’the Act’)  for the  pay revision  was finalised between the management and  the workmen. Based on this on 25th February, 1984 a  further settlement  under Section  18 of the Act was entered into  between the  management   of the  FCI  Talchar unit, the appellants herein and its workmen. This settlement was, inter  alia, for  revision of  various pay  scales. The revised pay  scales so  fixed were  to be effective from 1st January 1983  to   31st December, 1986, the highest scale of workmen being    Rs.  915  -  1520.  The  agreement  further contemplated  that   the  next  ways  agreement  was  to  be effective from  1st January,  1987. It  also sought to touch upon some  of  the  anomalies  which  were  prevailing  with



respect to   the   implementation  of seven years stagnation scheme.   The   relevant   salient      features   of   this agreement/settlement were that with effect from 11th August, 1986  the    workmen  in  the  higher  scale  of  fulfilling eligibility conditions under the stagnation scheme were only to be placed (not promoted) from their existing scale of Rs. 915-1520 to   the lowest officer’s scale of Rs. 960-1610 and on such  placement they  were to be given the designation of Junior Foreman  9 (w).  On such  placement the  said persons were entitled  to D.A.  as   admissible to  officers but all other allowances,  benefits, union  membership  etc.,  which they had as workmen, were to remain unaltered.      As a  result of  the aforesaid  settlement  dated  11th August, 1986 there were, as on 31st December 1986, employers who had already undergone placement from the highest workers scale of  Rs. 915-1520  to the lowest officer’s scale of Rs. 960 -  1610 on  account of  the fact that they had fulfilled the eligibility  conditions under the seven years stagnation scheme on  some dates  before 31st  December, 1986. However, workmen like  the respondents  who  had  not  fulfilled  the aforesaid eligibility conditions under the stagnation scheme as  on  31st  December  1986  continued  to  remain  in  the workmen’s category,  as on that day, in the pay scale of Rs. 915-1520.      The earlier  agreement whereby  pay scales  were  fixed from 1st  January 1983 to 31st December, 1986 having come to end,  the  Government  of  India,  by  an  order  dated  4th February, 1987,  decided that negotiations should take place between the management and the companies so as to bring into existence the  new wage settlement to be made effective from 1st January,  1987. Pending fresh fixation of pay scales the workmen and  the officers with effect from 1st January, 1987 continued to  get their salaries in the existing pay scales, i.e. the  respondents 1  to 23 in the pay scales of Rs. 915- 1520 and  the persons  placed in the lowest pay scale of the officers category in the pay scale of Rs. 960-1610.      The said  respondents 1 to 23 fulfilled the eligibility conditions under  the seven  years stagnation  scheme on 1st September, 1987.  By office  memorandum dated  7th November, 1987 these respondents were placed in the officers pay scale of Rs. 960-1610 with effect from 1st September, 1987.      A draft  agreement dated 1st July, 1987 for the purpose of revising  the workmen’s pay scales from 1st January, 1987 was finalised  between the  management and  the  workmen  at their  inter   company’s  level.  The  Government  of  India approved the  aforesaid agreement  on   23rd March,  1990  a settlement under  Section 18  of the  Act was  entered  into between the  respondents. The  salient features  of the said settlement are as follows :      i) The  settlement i.e. the new pay      scales for  workmen were  effective      from 1.1.1987 to 31.12.1991.      ii) In  the case  of workmen placed      in the officers’ category of JFM(W)      on   any   date   after   1.1.1987,      fixation was  to  be  done  in  the      revised workmen’s  pay  scale  from      1.1.1987   upto   the   date   they      remained in the workmen category in      the pre-revised  scale of  915-1520      and the  arrears were  to  paid  to      them till  that date  in accordance      with the  revised  scale  of  1580-      2842. (However, such employees were      to continue to draw for future i.e.



    from the  date on  which they  were      placed in  the officers’  pay scale      the  same  pay  as  they  had  been      drawing after  that  date  in  that      scale, namely, 960-1610).      iii) The  workmen who  were already      enjoying the  officers’ grade under      stagnation scheme  before  1.1.1987      were to  continue in  their current      officers   scale   i.e.   960-1610;      however,  when   the  revised   pay      scales for  officers  would  become      available,  the  appropriate  scale      was to be made applicable to them."      Respondents 1   to 23 got the benefit of this agreement while those  employees who were in the officers’ grade prior to 1st  January, 1987  had to  wait till  their scales  were revised and,  till then, continued on the pre-revised scales of pay.      With regard  to the  officers’ category, the Government of  India   issued  a  communication  on  25th  March,  1991 approving the revision of their pay scales.      That   on    18.4.1991,   based    on   the   aforesaid communication/approval  of  the  Government  of  India,  the Central office  of  FCI  issued  an  office  memorandum  for revision of  pay scale  and fringe  benefits for officers in FCI. The  consequences of  the said  office  Memorandum  are summarized below :-      i) "the  revises scales of pay were      to remain  in operation with effect      from 1.1.1987  for a  period  of  5      years.      ii) the  officers’ scale   of  960-      1610  was   revised  to   2200-3600      inclusive of  fitment amount of Rs.      400/-,   the    new   scale   being      effective from 1.1.1987.      iii) the  officers  (including  JFM      (W) s) who were on the rolls of the      company on   1.1.1987  were  to  be      fitted   into   the   corresponding      revised  pay   scale  as   per  the      formula given  in  para  5.1  which      included a fitment amount also."      This para  5.1 of the said circular      is as follows :-      "    The Executives who were on the      rolls  of   the  company   on   1st      January, 1987  will be  fitted into      the corresponding revised scales of      pay as  per the  following  fitment      method :-      Basic pay  in the existing scale of      pay as on 1.1.1987                   plus      First  ad  hoc  relief  related  to      actual basic on 1.1.1987                   plus      Industrial DA  Rs. 838.35  at AICPI      685 as on 1.1.1987                   Plus      Fitment amount as applicable.      On the  aggregate arrived  at,  pay      will be  fixed in the revised scale      of pay,  where the  total does  not



    fit in a stage of the revised scale      of pay,  the pay  will be  fixed at      the next higher stage.      While fixing  pay as  per the above      method,  annual   increment/advance      increment falling  on  1.1.1987  in      the old  scale, if  any  should  be      excluded. Hence  the first  ad  hoc      relief should  be  related  to  the      Basic Pay  in the existing scale as      on 31.12.86.  In other  words,  the      annual   increment    falling    on      1.1.1987  will   be  given  in  the      revised pay scale.      iv) for the officers (including JFM      (w)s who  had  undergone  placement      only on  a date for after 1.1.1987,      a  different  fitment  formula  was      stipulated in para 5.3 and the same      did   not   include   any   fitment      amount." The said para 5.3 of the same circular is as follows :-      "    METHOD OF  FIXATION OF  PAY OF      SUCH OF THE EMPLOYEES WHO HAVE BEEN      PROMOTED FROM  THE HIGHEST CATEGORY      OF  WORKMEN   TO  THE  JUNIOR  MOST      CATEGORY OF  OFFICERS ON  OR  AFTER      1.1.1987.      The  pay   of  such   category   of      employees  will  be  fixed  in  the      revised pay  scale of Rs. 2200-100-      3600 as  per  procedure  elaborated      below :      5.3.1     Take basic pay of workmen      category in  the revised  pay scale      of  Rs.1580-2842  on  the  date  of      promotion.      5.3.2 Find  out the  quantum of  DA      i.e. fixed  DA +  VDA as admissible      to workmen  category on the date of      promotion.      5.3.3 Allow  one notional increment      in the  revised scale  of Rs. 1580-      2842  attached   to   the   workmen      category.      5.3.4 Add(i), (ii) & (iii) from the      aggregate  amount   thus   arrived,      deduct  revised  DA  applicable  to      officers category  as  on  date  of      promotion (Annexure-II).      5.3.5 On  the aggregate now arrived      at,  pay   will  be  fixed  in  the      revised pay  scale of Rs. 2200-100-      3600 attached  to the post of Asst.      Foreman/Jr.   Officer   equivalent.      Where the  total does  not fit in a      particular stage,  the pay  will be      fixed at  the next  higher stage in      the revised  scale of Rs. 2000-100-      3600."      That from  time to  time certain  ad hoc  advances were being  drawn   by  the   Junior  Foreman   (w)  under  adhoc arrangement  between   the  parties.   These  advances  were required to  be adjusted against future benefits on revision of pay scales etc. However, when the pay scales of  the said



respondents were  fitted  into  the  revised  pay  scale  of officers under the office Memorandum dated 18th April, 1991, such employees  started drawing  lower emoluments,  prior to the revision  of the  officers’ pay scales. On 31st October, 1991, as  a special gesture for them the differential amount was made  payable as  personal pay  to be  adjusted  against future  increments,  promotional  benefits  or  benefits  on revision  of  pay  scales,  whichever  came  earlier.  When, however,  the   personal  pay  started  being  adjusted  and recovered against the next increments due to such employees, they  demanded  that  adjustments  be  made  only  from  the benefits which  pay become  due on  promotion or revision of pay scales and not against increments.      The appellants  did not  accede to the aforesaid demand relating  to   the   adjustment.   Consequently   the   said respondents filed a writ petition being OJC No. 1742 of 1993 in the  Orissa High Court seeking a relief that the personal pay should  be adjusted  only against the benefits available on promotion  or revision  of pay scales and not against the next increment  due to  them. In the writ petition there was no prayer for quashing the fitment formula for post 1.1.1987 Junior Foreman(W)  should also  be awarded  to post 1.1.1987 Junior Foremen (W).      In the counter-affidavit the case of the appellants was that pre  1.1.1987 and post 1.1.1987 Junior Foreman (W) were two  different   classes  of  employees  and  there  was  no discrimination between  them in  the matter  of  fitment  or revision of  pay scales  having regard  to the  date of  1st January, 1987.  It was  also categorically  stated that post 1.1.1987 Junior  Foreman (W)  like the  respondents had been given the  benefit of  revised workmen’s  pay scales  of Rs. 1580-2842 for the period of 1st January, 1987 to the date of their placement,  which was 31st August, 1987 in the case of the respondents.      The High  Court,  while  allowing  the  writ  petition, observed that  there were  two questions  which  essentially arose for  its consideration.  The  first  was  whether  the fitment amount  indicated in  the circular  dealing with the revision   of pay  scales and fringe benefits of officers of the appellants  was a  part of  the pay  scale. The   second question was  whether the  impugned circular  as well as the method of fixation of pay of Junior Foremen, who were placed in the  officers grade  prior to 1st January, 1987 and those placed in  the officers  grade after  1st January, 1987, was hit by  the principle  of discrimination. The High Court did not address itself or decide the question with regard to the manner in which the adjustment of the personal pay was to be made. Presumable  this contention  was not urged at the time of arguments.      While considering  the aforesaid two questions the High Court observed  that the  counsel for  the appellants herein had conceded  that the  respondents/writ petitioners had not been paid  their arrears  on the  revision of  workmen’s pay scales from Rs. 915 - 1520 to Rs. 1580 - 2842 for the period of 1st  January, 1987  to 31st August, 1987. Having recorded this concession  the High  Court considered  that "  on  the aforesaid conceded  position, we  would now  examine the two questions posed by us answer the same."      In the  special leave  petition filed by the appellants it was  specifically stated that no such concession was made by the  counsel for the appellants before the High Court. In support thereof affidavit of Sh. B.S. Tripathi, Advocate who appeared for  the appellants before the High Court was filed in which it was, inter alia, stated that he had not made any



concession as recorded by the High Court. During the hearing of this appeal Sh. Tapas Ray, learned senior counsel for the respondents, very fairly stated that the said observation of the High  Court was  probably not  correct and  in fact  the respondents were paid their arrears on the revision of their pay scale from Rs. 915 - 1520 to Rs. 1580 - 2842 with effect from 1st January, 1987 to 31st August, 1987. Thereafter with effect from  1st September  1987, though they were initially placed in  the lowest  of the then prevailing officers grade of Rs.  960 -1610,  but on  retrospective revision  of  this scale they  were placed  in the  revised scale of Rs. 2200 - 3600.      The  High  Court  having  thus  proceeded  on  a  wrong assumption of  an essential  fact  has,  possibly  for  this reason, incorrectly  answered the  aforesaid  two  questions posed by  it. The  High Court  was wrong  in coming  to  the conclusion that  there has  been violation  of Article 14 of the Constitution   and  that in the method of fixing the pay of these  employees who  have been promoted from the highest category of  workers to the Junior most category of officers on or  after 1st  January, 1987  must be  held to  have been grossly discriminated.      From the  facts enumerated  hereinabove it    is  quite evident that  the question of discrimination or violation of Article 14 of the Constitution does not really arise in  the present case.  What has  happened is  that by  reason of two orders dated  23rd March,  1990 and  1st April, 1991 the pay scales of  the workmen and officers of the appellant company were revised.  The earlier  settlement of  fixation  of  pay between the  management and the employees was for the period of from 1st January, 1983 to 31st December, 1986. Therefore, with effect  from 1st  January, 1987 a new pay structure had to be  fixed.As normally  happens on  1st January,  1987, or prior  thereto,  nor  order  revising  the  pay  scales  was actually issued.  On 23rd  March, 1990 the pay scales of the workers were  first revised  and this  was followed by order dated 18th  April,  1991  whereby  the  pay  scales  of  the officers were  revised. Both  these orders  revised the  pay scales with  effect from  the date, i.e., 1st January, 1987. What is,  therefore, to  be seen  is  as  to  what  was  the position of  the respondents  1 to  23 as on that date, i.e. 1st January,  1987. From  the facts  stated  hereinabove  it cannot be  disputed that  respondents 1  to  23  as  on  1st January, 1987  had not  acquired the officers grade and were working as Assistant Foremen. On the other hand those of the workers who were in the highest grade and had been placed in the lowest  scale of the  officers grade had by 1st January, 1987  already   acquired  the   officers  grade.  These  two categories of  employees, keeping  in view their designation as well  as the  pay scales which they actually were drawing as on  1st January, 1987, were clearly in different classes. Employees like  respondents 1  to 23,   for  the period  1st January, 1987  to the date on  which they were placed in the officers pay  scale on  1st September,  1987, were given the benefit of  the  revised pay scale of Rs. 1580-2842 (instead of the  old scale  of Rs.  915 -  1520) and  were also  paid arrears for  the   said period on the revised basis. For the period subsequent  to the  date of  their placement  in  the officers scale  the said  respondents actually  continued in the officers  unrevised pay   scale  of Rs.  960 - 1580 till they were  given the benefit of the revised pay scale of Rs. 2200 - 3600 with effect from 1st September, 1987 as a result of the  aforesaid order dated 18th April, 1991. On the other hand pre  1st January,  1987 Junior  Foreman  (W)  who  were already in  the officers’ scale of Rs. 960 - 1610 as on 31st



December, 1986  continued to  really in the same scale as on 1st January,  1987. They  were not  given the  advantage and were only  placed in  the revised workmen’s pay scale of Rs. 1580 - 2842 which was made available to writ petitioners for the period  of  1st  January,  1987  to  31st  August  1987. However, when  the revised  pay scale  of Rs. 2200 -3600 for the officers  was made  available vide    order  dated  18th April, 1991,  the same  became applicable to them. It was in order to  off set  this disadvantage that by para 5.1 of the impugned circular  to such  pre  1st  January,  1987  Junior Foreman(W).      From the  aforesaid it is clear that the two categories of Junior Foreman (W) were dealt with by  two different sets of rules  because as  on 1st  January, 1987  they  were  not similarly  situate.  Whereas  the  respondents  herein  were Assistant Foremen,  those who  were placed  in the officers’ grade prior  to 1st January, 1987 were regarded as officers. There  could   thus  be  no  comparison  between  these  two categories of persons. These two categories were unequal and respondents  could  not,  in  law,  make  any  grievance  of different principles  were adopted  in the fixation of their respective pay scales.      The effect  of the  High Court  Judgment  is  that  the fixation of pay of post 1st January, 1987 Junior Foremen (W) like the  respondents in the revised officers pay scales has been done  on the basis of their revised grade of Rs. 1580 - 2842. On  the other  hand the  fixation of  pay of  pre  1st January, 1987  Junior Foreman (W) has been done on the basis of unrevised  officers grade  of Rs.  960 -1610 after giving them a  fitment of  Rs. 400/-.  The direction  to grant  the additional fitment  benefit of  Rs.400/- to  the post of 1st January, 1987  Junior Foremen (W) whose pay has been done on revised on  the basis of the grade of Rs. 1580 - 2842, would result in  an undue  and unjust  double advantage  would in, effect, be  a reverse  discrimination in  as much  as it the judgment of  the High  Court is  given effect  to  then  the respondents would get more emoluments than their seniors who were placed  in the  officers scale  prior to  1st  January, 1987. It  has  been  rightly  contended  on  behalf  of  the appellants that  the High  Court’s judgment   will result in the treatment  of the  unequals as equals, which was clearly not contemplated.      Apart from  the fact  that these   two  classes of  the employees are different and are governed by different rules, it is  open to   the  State or  appellants to  change    the conditions of service unilaterally. As observed in the State of West  Bengal and  Ors. Vs.  Ratan  Behari  Dey  and  Ors. [(1993)] 4  SCC 63]  at page  65  "  the  employer  has  the undoubted power to revise the salaries and/or the pay scales as also  terminal benefits/pensionary benefits. The power to specify a  date from  which the revision of pay scales of or terminal benefits/pensionary  benefits, as  the case may be, shall take  effect is  a concomitant  of the  said power. So long as such date is specified in a reasonable manner, i.e., without bringing  about a  discrimination between  similarly situated persons,  behalf." In  the present  case the  rules regarding fixation of pay of the officers and of the workers were  different.   With  effect   from   1st   January,1987, therefore, fresh  fixation had  to take  place. Workers  and officers belong  to two  different and distinct classes. The respondents who  were not  officers as  on 1st  January,1987 could not  claim parity  with the  persons who  were in  the category of  officers as  on that  date. This  being so  the appellants could  fix  the  pay  scale  of  workmen  on  his appointment after  1st January, 1987 in the officer class on



a principle different than one which was adopted in revising the pay  of an   officer who was adopted in revising the pay of an  officer who was  in position as on 1st January, 1987. Whereas with  regard to  the  respondents it would be a case of initial  fixation of their salaries on their placement in the officers  grade, in  the case  of pre  1st January, 1987 Junior Foremen  it would  be a  matter of  revision of their salaries in the same grade. It was open to the appellants to follow different principles in these two cases.      There is  also considerable  force in the contention of Sh.  V.R.   Reddy,  learned  Additional  Solicitor  General, appearing for  the appellants, that the High Court ought not have granted  relief to  the respondents which they  had not even prayed  for in as much as relief prayed for in the writ petition was   only  with    regard  to  adjustment  of  the personal pay  against the  incremental benefits.  But as the case had  been argued at length on the points decided by the High Court, we need not advert further on this aspect.      From the aforesaid discussion it  follows that para 5.3 of the  Office  Memorandum  dated  13th  April,  1991  which contained the  principle on  the basis  of which  pay of the respondents was  fixed in the  lowest scale of the  officers grade, is  not invalid  and the  High Court fell in error in striking it   down.  This appeal is accordingly allowed, the judgment of  the High Court is set aside the effect of which could be  that the  writ petition filed by respondents to 23 is dismissed. The parties will bear their own costs.