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Judgment
Meenakshi Madan Rai, J—Aggrieved by the action of the Respondents No. 1, 2 and 2A in not giving the Petitioners, former employees of the now defunct Sikkim Time Corporation Limited (hereinafter "SITCO"), Deorali, Gangtok, severance package on a par with similarly placed local employees of the Corporation, the Petitioners inter alia seek a Writ or an Order or Direction directing the Respondents to treat them equally with the local employees on grounds that the unequal severance package is illegal, arbitrary, mala-fide, biased and violates the provisions of Article 14, 16, 21, 300A of the Constitution. That, the Petitioners No. 2 and 4 also be paid their salary arrears and all the Petitioners be paid Dearness Pay @50% of their Basic Pay, as granted to other employees, from the time of their entitlement. Compensation for harassment caused while obtaining information under the Right to Information Act, 2005 be granted and the decision of the Board of Directors in the 48th Meeting of SITCO dated 31.05.2004 be struck down, the same being arbitrary and illegal.
The Petitioners case is that the SITCO, a Limited Company having its registered office at Gangtok, is a State within the meaning of Article 12 of the Constitution being a Government of Sikkim undertaking, fully financed by the State Government which had deep and pervasive control in its management, finance and administration. The Establishment had no service rules of its own and in principle followed the Sikkim Government Service Rules.
The Petitioners hailing from outside Sikkim were employed in the marketing sector in various posts under the SITCO between 1996 to 1997 for sales, service, payment collection and they were regular employees under the Respondent No. 1 but were posted in Delhi, Lucknow and Siliguri.
On account of the losses faced by the Company, on 30.04.2011 the Board of Directors of the Respondent No. 1, pursuant to a decision of the State Government declared closure of the SITCO and severance package being a ''Golden Handshake'' was disbursed to its employees numbering 103, including the Petitioners. Petitioner No. 1, at the relevant time was posted in New Delhi, Petitioners No. 2 & 4 were posted in the Lucknow Office and the Petitioner No. 3 was posted at Siliguri Office.
That, five other employees then working in the Assembly Unit posted in the Head Office and designated as Group Leaders were in the same pay scale as the Petitioners No. 1, 2 and 3, being Rs. 2000-80-2600/-. Thus, for purposes of the severance package, the Petitioners were entitled to similar benefits vis-�-vis the said employees. That apart, the Basic Pay of the Respondent No. 3 at the relevant time was fixed at Rs. 2800/- but he received a severance package much less than what was drawn by Group Leaders, then placed in the Pay Scale as reflected above.
That, so far as the Petitioner No. 4 was concerned, he was drawing a Basic Pay of Rs. 3350/- in the Pay Scale of Rs. 3050-100-4550/- similar to three other employees, working as Assistant Supervisors and one as a Supervisor and was therefore entitled to an equal severance package as them.
That, there is considerable disparity in the severance package between the Petitioners, who had no adverse remarks during their service, compared to other employees in the same scale of pay, in as much as the Petitioners received amounts ranging from Rs. 1,48,023/- (Rupees one lakh forty eight thousand and twenty three) only, to Rs. 2,11,888/- (Rupees two lakhs eleven thousand eight hundred and eighty eight) only, while the other employees similarly situated were given severance packages ranging from about Rs. 10,00,000/- (Rupees ten lakhs) only, to Rs. 15,00,000/- (Rupees fifteen lakhs) only.
This disparity came to the knowledge of the Petitioner No. 1 in August 2011 from his colleagues who had worked in the Assembly Section of SITCO and had received higher severance package as compared to the Petitioners by taking into account Basic Pay, Dearness Pay @50% of Basic Pay, Dearness Allowance @41%, Leave Encashment and Additional Ex-gratia Payment. The Petitioners per contra had also been deprived of Dearness Pay since their appointment.
It is contended by Mr. A. Moulik, Learned Senior Counsel for the Petitioners that after coming to learn of such discrimination, the Petitioner No. 1 informed the other Petitioners who requested him to enquire into the matter. That, the Petitioner No. 1 sought details from all relevant authorities under the Right to Information Act, 2005 however, despite concerted efforts to obtain information either no information or incomplete information was furnished.
Ultimately in response to an application, the State Public Information Officer (SPIO) of the Office of Respondent No. 3, vide letter dated 7.12.2012 forwarded some information in which it was inter alia informed that there was no disparity in the disbursement of "Golden Handshake" packages between the staff at Gangtok and the Petitioners, which had been calculated as per the Voluntary Retirement Scheme (VRS) rules of the Government of Sikkim for each employee, taking into consideration the employee''s Basic Scale plus Dearness Allowance at the time of closure of SITCO, the number of years of regular service the employee had put in and the age of the employee at the time of regularisation in service. Vide letter dated 23.01.2013, the pay scale structures of the regular employees of SITCO were also provided by the SPIO of the Respondent No. 3, wherein it transpired that the Group Leaders in the Head Office were in the same Pay Scale of Rs. 2000-80-2600 like Petitioners No. 1, 2 and 3 and the Assistant Supervisor was in the same Pay Scale as Petitioner No. 4 being Rs. 3050-1000-4550.
Being dissatisfied with this information, the Petitioner No. 1 inter alia wrote a letter again on 07.05.2013 to the Sikkim Information Commissioner. Consequently, vide letter dated 07.06.2013, details of severance package paid to the regular staff of SITCO was made over to the Petitioner No. 1 by the SPIO of the Respondent No. 3, which indicated vast disparities between the severance package handed out to the Petitioners in comparison with the local employees.
The argument advanced by the Learned Senior Counsel for the Petitioners was that the Petitioners were deprived of the 3rd and 4th Pay Revision benefits and the decision of the Board, so depriving them, is violative of the provisions of Article 14 and 16 of the Constitution. The Petitioners deny any delay in filing the Petition, as the stand taken by them is that they learnt of the disparity in severance packages only in August, 2011 pursuant to which they took steps to obtain information under the Right to Information Act, 2005 and filed representations before various authorities till June 2013. Efforts on the same lines continued till August 2013 in vain. Their grievances remained unaddressed till finally on 30.01.2014, a Lawyer''s notice was issued by them to the Respondents. It is further contended that the severance package was released only after an undertaking was obtained from the Petitioners that they would have no further claims against SITCO. According to Learned Senior Counsel for the Petitioners, the Petitioner No. 1 is now entitled to Rs. 12,96,353/-, Petitioner No. 2 is entitled to Rs. 14,79,516/-, Petitioner No. 3 is entitled to Rs. 13,63,939/- and Petitioner No. 4 to Rs. 17,75,022/-.
Only the State Respondent No. 3, filed an affidavit in opposition, Mr. S.K. Chettri, Assistant Government Advocate having submitted that he had no Counter Affidavit to file on behalf of Respondents No. 1, 2 & 2A.
While denying and disputing the allegations on behalf of Respondent No. 3, the learned Additional Advocate General, Mr. J.B. Pradhan submitted that the SITCO although wholly owned by the Government was a purely commercial organization engaged in the business of assembling and marketing of watches. For the purpose of appointing marketing personnel, a decision was taken in the 35th Meeting of the Board of Directors dated 04.02.1995, laying out details pertaining to requirements and salaries thereof were recommended. The duties and functions of the Petitioners entailed marketing, sales and services of SITCO watches outside Sikkim, while the employees at Gangtok were primarily engaged in assembling watches and allied functions in the production line. The pay structure of employees of SITCO posted at Gangtok prior to 2004 varied from that of the Petitioners when they were initially appointed at SITCO under different marketing posts when it opened marketing divisions in various cities of India. That, the recruitment of the Petitioners was on the basis of their qualification, years of work in the field of marketing sales and services of watches and therefore, they cannot claim parity on the basis of similarity in the scale of pay when they belong to a different category altogether. Their salaries were upwardly revised depending on their performance while no such revision was afforded to staff posted in Gangtok. Their severance package was thus based on their nature of work/responsibilities which was evaluated by the Management and that Courts usually refrain from interfering in such matters.
The pivot on which the argument of the Learned Additional Advocate General revolves is the Minutes of the 48th Board Meeting of the Board of Directors of the SITCO held on 31.05.2004, to which the attention of this Court was incessantly drawn. It was put forth that the Board while discussing the pay revision inter alia adopted the proposal made by the Managing Director to revise the pay structure of regular employees but no revision for the marketing employees was proposed as their pay had been fixed on individual basis depending on their work experience, qualification and place of posting.
It was also submitted that the decision of the Board dated 31.05.2004, pertaining to revision in the Pay Scales of the regular employees of SITCO could not be acted upon by the Management due to extreme financial constraints at that point of time and was kept in abeyance and worked out only at the time of calculation of severance package on the basis of the pay structure of the Government of Sikkim then in use. The severance package for the Petitioners was however worked out on the basis of their existing pay at the time of closure, based on the VRS Notification No. (95) 107/GEN/DOP dated 25.01.2013. That, the Board had clearly stated that only regular employees of SITCO were entitled to the Government Pay Scales and structure, this categorically excluded the Petitioners. That, they are also not entitled to 50% of Dearness pay as evident from the letter dated 23.01.2013 of the SPIO, Commerce and Industries Department. Besides which, at the time of disbursement of severance packages, the Petitioners came to Gangtok and the details of calculation of severance package were explained to them in depth which was accepted along with an undertaking. Hence, the claim of the Petitioners that there is pending salary or other dues is false and misleading. Mr. J.B. Pradhan submitted that he did not press the submissions with regard to poor performance in the services of any of the Petitioners as the main concern was with regard to the severance package.
In Rejoinder, it was inter alia agitated that for the purposes of terminal benefits only the status of an employee cannot be taken into consideration but the similarity of Pay Scales with the Marketing Staff at the Head Office is also to be weighed. That, the Respondent No. 3 has not pointed out any rule in terms of which the terminal benefits paid to the Petitioner should be different from the amount paid to employees similarly placed in the Head Office.
The submissions put forth by Learned Counsels on opposite sides were heard at length by me and the documents relied on by them were also perused.
The question that falls for consideration before this Court is whether there is a rational basis for the classification made by the Respondents No. 1, 2 and 2A when the severance package was calculated differently for employees at the Head Office and the Petitioners, when both were allegedly similarly situated.
In the first instance, it is the contention of the Petitioners that the Petitioners No. 1, 2 & 3 were in the Pay Scale of Rs. 2000-80-2600 on a par with five employees designated as Group Leaders posted in the Head Office, while the Petitioner No. 4 was on an equivalent Pay Scale of Rs. 3050-100-4550 with employees designated as Assistant Supervisors. The severance packages offered to the Petitioners do not match with the employees drawing salary in the same scale of pay.
In the backdrop of the above arguments, it is worthwhile examining the letters of appointment of the Petitioners.
The appointment letter of the Petitioner No. 1 dated 31.3.1997 informs that he has been selected as a Service Mechanic and his emoluments detailed therein. Thereafter, on completion of one year of service, the SITCO regularised his services as a Mechanic in the Pay Scale of Rs. 750-75-1500-2250 w.e.f. 1.5.1998.
Similarly, for the Petitioner No. 2 vide letter dated 11.3.1998, on consideration of his satisfactory performance during his temporary service, he was appointed as an Office Assistant w.e.f. 1.1.1998 in the Pay Scale of Rs. 750-75-1500-150-2250.
In regard to the Petitioner No. 3, he was selected as Office Assistant vide a letter dated 2.4.1996 and his emoluments per month were Rs. 1230/-. Vide letter dated 19.11.1997, his service was confirmed and he was placed in the Pay Scale of Rs. 750-75-1500-150-2250.
For the Petitioner No. 4, he was informed that he was recruited as a Marketing Executive w.e.f. 03.06.1998 vide a letter dated 30.06.1998 and his total emoluments have been detailed in Annexure P-4. Subsequently, on 23.10.2000 his service as a Marketing Executive was confirmed and he was granted two increments w.e.f. 01.10.2000 to his existing pay and allowances. It emerges that when the Petitioners were initially appointed, there was no Pay Scales existing for the employees of SITCO at the Head Office similar to that of the Petitioners, as per the Chart pertaining to scales of pay furnished by the Respondent No. 3 in its Counter Affidavit.
However, it has been admitted by the Respondent No. 3, that, subsequently vide various Office Orders of the SITCO, the Petitioners No. 1, 2 and 3 were placed in Pay Scales that were equivalent to employees of the SITCO posted as Group Leaders in the Head Office with effect from 1.1.2003. While, the Petitioner No. 4 was placed in the pay scale equivalent to that of an Assistant Supervisor.
For a clearer understanding of the matter and in view of its relevance, the position pertaining to Pay Scales of the Petitioners as admitted by the Respondent No. 3, is reflected hereinbelow:-
Thus, in my opinion the argument advanced by Learned Senior Counsel for the Petitioners that the Petitioners No. 1, 2 and 3 were in the same Pay Scale as Group Leaders and Petitioner No. 4, as Assistant Supervisor has substance, in view of the unambiguous admission made by the Respondent No. 3. Although, on a comparison of the Chart of Scale of Pay of the SITCO and Annexure P-5, it appears and is admitted that there are some differences in the D.A. and H.R.A. allowed to the Petitioners which are higher than that of the employees at the Head Office, no explanation as to the basis for the differences is forthcoming from the Respondent No. 3. In fact, the Respondent No. 3 has deemed it fit to term the equal scales of pay as a "mere coincidence" without touching upon the differences in allowances. Suffice it to say that such a difference does not indicate that the Petitioners scales of pay were different from other similarly situated employees, in the absence of logical explanation.
On this aspect, while referring to Annexure P-5 furnished vide letter dated 23.01.2013 of the SPIO of Respondent No. 3 and on comparing it with the Chart of Scales of Pay also furnished by the Respondent No. 3 but in its Counter Affidavit, there are differences in the components of the salaries of the employees of SITCO, in as much Annexure P-5 reflects the components of the salary of the employees as comprising of Basic Pay, D.P. @ 50%, D.A. @ 41%, H.R.A. @ 15% and Special Border Compensatory Allowance (SBCA) @10%. On the other hand, the Chart furnished by the Respondent No. 3 in its Counter Affidavit reflects the components of the salary of employees as Basic Pay, D.A. @ 59%, H.R.A. @ 15% and Special Border Compensatory Allowance (SBCA) @10%. Dearness Pay (D.P.) finds no place in the Chart. In other words, although the details of salary emanate from the same authority i.e. Respondent No. 3, there are differences therein as pointed out supra which to say the least, is perplexing.
Then comes the salary components of the Petitioners, which despite being revised as per orders already discussed, comprises only of Basic Pay, D.A. @ 40%, H.R.A. @ 20% and City Compensatory Allowance @10%. Conveyance Allowance is granted only to the Petitioner No. 4. There is no explanation as to why Dearness Pay was not paid to the Petitioners. Merely taking the stand that the Petitioners were in a different category of employees does not assist the case of the Respondent No. 3, when it is devoid of any explanation. However, to be fair to the Respondent No. 3, although it was contended by the Petitioners that while working out the severance package, Dearness Pay was also calculated, this is belied by the contents of Annexure A-1, which discloses no entry of Dearness Pay while the calculation of severance package was made.
Although, it is the vehement contention of Mr. J.B. Pradhan, that the functions of the Petitioners differed from that of the employees posted in the Head Office, if the Respondents No. 1 and 2 at the relevant time were seized of the fact that the functions of the Petitioners were different from other employees, they ought to have classified the Petitioners as temporary employees on consolidated salary instead of regularizing their services and placing them on pay scales on a par with other employees. Once this step has been taken there cannot be micro classification on irrational grounds.
Infact, while going through Annexure A-1, it is clear that although one Tenzing Jamgon was designated as a Sales Representative like Petitioner No. 2, his services being regularized only on 13.1.2003 thus later than Petitioner No. 2, but, his severance package amounts to Rs. 10,23,661/- (Rupees ten lakhs twenty three thousand six hundred and sixty one) only, and there is no rational explanation forthcoming on the disparity, save the submission by Mr. J.B. Pradhan, that, if any payment has been wrongfully made the same shall be examined and withdrawn, if necessary.
That having been said, while coming to the common Minutes of the Meeting pertaining to the 27th Annual General Meeting and the 48th Meeting of the Board of Directors of SITCO held on 31.05.2004, it appears to be fraught with anomalies. On this count, while revisiting the arguments of the Learned Additional Advocate General for the Respondent No. 3, it was submitted that the Petitioners were excluded from the ambit of the revised Pay Scales as the terms of their employment were completely different from that of the employees in the Head Office, their pay having been allegedly fixed on individual basis depending on their work experience, qualification and place of posting, resultant their salary not only differed from each other but also from other staff at Gangtok. Firstly, it would be useful to point out that no such terms and conditions have been communicated to the Petitioners when they were employed nor have they been apprised that they were not regular employees. Neither their appointment orders or for that matter letters regularizing their services not reflect these conditions, nor have documents been furnished before this Court to substantiate this submission.
Further, at the Meeting under discussion, in the Minutes under the heading ... ... (iii) PAY REVISION, it was inter alia held that "With the VRS Scheme the regular work force of SITCO will be reduced to 71 Nos. to have retained (sic) for the Speaker Unit, Analog Watch Unit and the Administration Section (excluding 31 marketing employees). The total strength of SITCO now stands at 143 employees including muster roll and marketing employees... .". On careful perusal of Annexure A-1, besides one Tenzing Jamgon, who has been designated as a Sales Representative, one Man Maya Rai and Dawa Doma Sherpa as Sales Assistant, and the four Petitioners, no other persons appear to be engaged in sales. The Minutes of the assailed Meeting which details that "excluding 31 marketing employees" is therefore inchoate as the Board appears to be unaware of the number of marketing employees, the numbers failing to match the employees in marketing. Mr. J.B. Pradhan could shed no light with regard to the above confusion.
The Minutes extracted above reflects that there were 143 employees, including "muster roll" and "marketing employees". It does not mention that "marketing employees" were on muster roll or on different Pay Scales than the other "regular employees". The Petitioners, as can be culled out from the arguments were neither Muster Roll employees nor ad hoc employees or employees on contract. They were without a doubt "regular employees" as manifest from their appointment orders.
It would be pertinent to extract another portion of the Minutes of the Meeting for a clearer understanding of the matter "He therefore proposed for revision the pay structure (sic) of these 71 regular employees at SITCO H.O. as per details submitted and that any revision in the pay scale and pay structure of the Govt. be applicable to SITCO in order to ensure no disparity in future. The training allowance of Helper and Operator trainees was also proposed for revision from the existing Rs. 350/450 and Rs. 450/550 to Rs. 600/800 and Rs. 800/1000 respectively. No revision was proposed for the marketing employees as their pay has been fixed on individual basis depending on their work experience, qualification and place of posting."
If no revision, (as proposed by the Managing Director, SITCO and accepted by the Board) was to be given to marketing employees then all 31 employees said to be marketing employees ought to have been deprived of the revised Pay Scales, but only the Petitioners have been left out of the umbrella of the Pay Revision. Besides, the revision of the pay structure was for "71 regular employees" on this aspect it is worth emphasising that the appointment orders of the Petitioners designate them as "regular employees". That apart, Annexure A-1 which contains the calculations of severance Package reads as "CALCULATION OF SEVERANCE PACKAGE FOR REGULAR EMPLOYEES (Revised Scale)" and includes the names of the Petitioners in that category. Hence, the argument that no revision was proposed for marketing employees, insinuating thereby that only the four Petitioners were excluded, as their pay had allegedly been fixed on individual basis depending on their work experience, qualification and place of posting appears to be bereft of any rationale and is infact incendiary.
It was vehemently argued by the Respondent No. 3, that the grievance of the Petitioners now is marred by delay and laches, apart from the submission that the recommendation made by the Management was based on the job evaluation and Courts do not sit on appeal over the decisions and orders of administrative authority. The counter argument of Learned Senior Counsel for the Petitioners was that it is a continuing wrong besides the details of the Board Meetings were never communicated to the employees and the Meetings being of a high level and confidential, they were not aware of what transpired therein.
I find substance in the argument put forth by Mr. Moulik, as it is apparent that the Petitioners had no inkling of the proceedings in the Board Meetings to enable them to take steps. The Respondent No. 3, has not been able to substantiate that the Petitioners were aware of the fate as regards their salaries in terms of the decision of the Board Meeting, neither is there proof of communication of the decision to the Petitioners.
With regard to the argument pertaining to non interference by Courts in administrative matters, as raised by Mr. J.B. Pradhan, it is undoubtedly true that Courts do not normally interfere in executive decisions as Government action is presumed to be reasonable and in public interest. At the same time, it may be pointed out that there has to be a justification for any decision adopted by the Government in as much as such decision should be shorn of any irrationality, as its validity has to be tested on the touchstone of equality. It is understood that Courts while reviewing any administrative action will not endeavour to substitute its own views but whether the equality clause of Article 14 has been violated or not has to be closely examined.
It was also put forth by the Learned Additional Advocate General that each of the Petitioners have given receipts stating therein that there are no pending claims whatsoever for the Petitioners from SITCO. However, on this count it has to be remarked that injustice cannot be perpetuated merely because of such an undertaking which as per the Petitioners were taken from them under duress and appears to be arm twisting tactics adopted by the concerned authorities at the relevant time.
Learned Senior Counsel for the Petitioners in support of his contention that the classification made by the SITCO is arbitrary, placed reliance on the decision of the Hon''ble Apex Court in Union of India (UOI) Vs. Atul Shukla , wherein it is held that "Classification of employees based on the method of their recruitment has long since been declared impermissible by this Court... ... ... ... ... The underlying principle is that so long as the officers are a part of the cadre, their birth-marks based on how they joined the cadre is not relevant. They must be treated equal in all respects-salary, other benefits and the age of superannuation included." In the light of the above Judgment, it is clear that the Petitioners No. 1, 2 and 3 having been placed in the same Pay Scale as Group Leaders and the Petitioner No. 4, in that of the Assistant Supervisors, their method of recruitment is not relevant and they cannot be differentiated merely on the ground that their recruitment was made on different considerations, the rationale of which of course has remained unsubstantiated and unexplained.
One cannot overlook the fact that equal protection means the right to equal treatment in similar circumstances and therefore in view of the facts and circumstances discussed hereinabove, when the severance package was being calculated the Petitioners ought to have been placed on an equal footing with employees in the same Pay Scale and not short changed as evident from the packages that were handed over to them in comparison to the other employees of the Corporation.
It was argued by the Learned Additional Advocate General that the classification made by the SITCO was justified as the Petitioners were a separate category of employees deputed for sales works outside Sikkim. He has placed reliance on Raojibhai Jivabhai Patel and Others Vs. State of Gujarat and Others, (1989) 4 JT 505 : (1989) 2 SCALE 1297 : (1989) 2 SCC 744 Supp : (1989) 2 SCR 406 Supp , wherein it was held that "It is obvious that a valid classification of persons and things for purposes of imposing any obligation on them would not be violative of Article 14 provided the classification is a reasonable one. It is well settled that a classification to be valid has to satisfy two conditions:-
(1) that there is an intelligible differentia between those who are included in the class which is affected by any law and rule and those who was placed outside the said rule; and
(2) that there is a reasonable nexus between the classification and the object to be achieved by the rule or law in question."
In the said matter, the Hon''ble Apex Court has held that there must be an intelligible differentia when any classification is made. Mr. J.B. Pradhan has not been able to convince this Court that the classification made in the instant matter satisfied the condition of intelligible differentia or that there was a reasonable nexus between the classification and the object to be achieved by it.
The facts and circumstances as discussed supra indicate that the Petitioners were in a homogenous class with other employees of SITCO being regular employees and placed in similar pay scales as employees of the SITCO posted in the Headquarters notwithstanding their nature of work.
In the end result, I find that the differentia made by the Respondents No. 1, 2 and 2A amongst employees similarly situated for the purposes of working out a severance package as discussed in detail above is pernicious, mala fide and bereft of any rationale, thereby being violative of Article 14 and 16 of the Constitution.
Consequently, the decision of the assailed Meeting of the Board of Directors of SITCO dated 31.05.2004, so far as it relates to the Petitioners is struck down being arbitrary and malafide.
It is hereby ordered that the Petitioners be placed on an equal footing with the other employees of the now defunct SITCO, for the purposes of calculation of their respective severance packages apart from any amount due to them on account of Dearness Pay.
Respondent No. 3 shall take steps to comply with the above Order.
The claim for salary arrears made by Petitioners No. 2 and 4, is however dismissed not being substantiated.
In the facts and circumstances, the Writ is allowed to the above extent.
No order as to costs.