A.K. Chakravarty, J.@mdashThis writ application is directed against a decision of the Respondent Company to effect deduction of Rs. 250/- from the salary and wages of their workmen, represented the petitioners Trade Unions.
2. The facts of the case are as follows :--
Respondent No. 1 is a giant public sector undertaking, formed pursuant to the vesting in the Central Government the undertakings of two public limited companies, namely, Hind Cycle Ltd. and Sen Raleigh Ltd. under the provisions of Industries (Development and Regulation) Act, 1951 and thereafter by an Act of Parliament Hind Cycle Ltd. and Sen Raleigh Ltd. (Nationalisation) Act 1980. The total number of workers and staff employed in Respondent No. 1 Company is approximately 1,800 and all of them are members of either of the three Trade Unions, being the petitioner Nos. 1,2 and 3 which are all registered under the Trade Unions Act and recognised by the Management of Respondent No. 1. There is a joint consultative body called Calcutta Apex Body consisting of representatives of the Management as well as representatives of the Trade Unions. On Septembers, 1991 a meeting was held in the said Apex Body where it was resolved to make recommendation to the Management of Respondent No. 1 for granting an amount of Rs. 400/- to all the workers and staff of the Respondent No. 1 pending wage settlement. Respondent No. 1 however, only allowed ad hoc payment of Rs. 400/-to their employees at the Registered Head Office and denied the benefit to the workers and staff serving in their two factories. On October 25, 1991, the representation was made to the General Manager (Works) of the Respondent No. 1 that such benefits should also be extended to the employees of the two aforesaid factories. Thereafter Respondent No. 1 allowed ad hoc payment of Rs. 250/-only to the workers and staff serving in the two factories with effect from March, 1992 and the workers and staff continued to receive aforesaid ad hoc payment of Rs. 250/- uninterruptedly as ad hoc payment. With effect from April, 1994 the said ad hoc payment of Rs. 250/- was merged into the basic pay of the recipients thereof and treated as part of their basic pay. Such merger also led to other consequential benefits like increase in the House Rent Allowance and increase in the employees share as well as employer''s share in the Contributory Fund accounts. The employees who retired from services of Respondent No. 1 on superannuation had their retirement benefits calculated also on the basis of such merger. In course of collective bargaining a meeting was held on March 24, 1995 where it was decided that Rs. 250/ -shall be finally merged in the basic pay. On August 4, 1995, a circular notice was issued by the Deputy General Manager (Works) to all the Unions'' representatives intimating that a meeting was to be held. In the said meeting the representatives of the Unions were informed that at the Management level a decision has been taken to effect a deduction of Rs.250/- from the basic pay of the recipients thereof and such deduction would be effected from the emoluments for the month of August, 1995, payable in case of the members of the staff on and from September 1, 1995 and in case of factory workers on and from September 9/10, 1995. The communication of the decision having been made orally, Unions demanded a written notice but the Deputy General Manager (Works) having expressed his inability to do so protested against the proposed deduction of pay. He, however, expressed his inability to accede to the request of the Unions'' representatives and told them that he had firm instructions from the Chairman-Cum-Managing Director to make such deduction. On August 26, 1995 the petitioner received a notice signed by General Manager (Works) informing them that the merger of recoverable advance of Rs. 250/- in the basic pay of the employees/workmen without any valid sanction of the appropriate authority had been adversely commented upon in the Government audit. Hence the Government desired that the 6th Tripartite Engg. Wage Settlement should strictly be implemented immediately. If immediate compliance of the order of the Government was not made, it was apprehended that non-plan assistance for salary and wages of the employees would be withheld. As such it has been decided to start payment strictly as per this wage settlement from the pay of August 1995. The said order dated August 26, 1995 has been challenged in this writ application on the ground that any particular benefit is allowed by any industry to its workers such benefit being a part of their emoluments, such emoluments cannot be unilaterally reduced or curtailed merely on the ground that a particular Industry-wise wage settlement provides for a lesser benefit. It was also challenged as violative of Articles 14, 21 and 300-A of the Constitution of India. The petitioners have also challenged the said notice as violative of the principles of natural justice. It was also alleged that any deduction of basic emoluments shall have its impact on the house rent allowance and Contributory Provident Fund. It was further alleged that Respondent No. 1 being an instrumentality or agency of the State was obliged to act in fair and reasonable manner. It was alleged that the conduct of respondent is not only arbitrary but also is highly mala fide, confiscatory and expropriatory and amounts to colourable exercise of power. The petitioners have accordingly filed this writ application for a writ of mandamus for quashing the purported decision to effect deduction of Rs.250/- from the basic pay of the petitioners and resist the respondents from giving any effect to the minutes of the meeting dated August 4, 1995 and the purported notice dated October 26, 1995. Usual prayer for issuance of writs of certiorari and prohibition have also been made.
3. The Secretary of the Respondent No. 1 which is a Government Company, has filed an affidavit in-opposition alleging, inter alia, that Respondent No. 1 is now a sick Government undertaking having an accumulated loss of Rs. 255 crores. The matter was referred to the BIFR and it directed the winding up of the Company. The said winding up could not be enforced due to stay of proceedings of the matter before the BIFR in Court cases. Respondent No. 1 is entirely dependent on annual Government non-plan assistance in payment of the salary and wages of its employees. The staff and workers of Respondent No. 1 are entitled to salary and allowances at such rate as are applicable to the employees of public sector undertakings. Such salary and allowances are fixed and/or revised from time to time by a body known as Tripartite Engg. Wage Settlement. The staffs and workers of Respondent No. 1 are to get and are getting their wages and salary and other benefits as per public sector undertakings as revised from time to time by the Tripartite Engg. Wage Settlement. Tripartite Engg. Wage Settlement was constituted in 1991 for revising the pay structure of staffs and workers of all Government of India undertakings in West Bengal as the binding effect of previous Tripartite Engg. Settlement. Board had expired on February 3, 1988. After the binding effect of the salary and wages fixed by the previous Tripartite Engg. Settlement expired there was demand for increase in remuneration of staffs and workers of Respondent No. 1. On such demand having been made the respondent decided to pay a sum of Rs. 250/- per month during the period of pendency of the settlement before the Tripartite Engg. Wages Settlement. Such payment was made from 1991 to May 1994. Respondent No. 1 was entitled to adjust such ad hoc payment of the additional sum from the salary of the recipient in terms of the report of the Tripartite Engg. Wage Settlement. Upto May 1994 Respondent No. 1 did not adjust the said advance from salary due to resistance put forward by the employees. It, however, adjusted the entire amount paid in excess from the retirement benefits of those employees who retired from services in the meantime. Thereafter at the verbal instruction of the then Chairman and the Managing Director the said sum of Rs. 250/- which were paid as advance to the employees and workers of the Respondent No. 1 were shown as part of the original salary. The said advance having thus been shown as part of the salary on the oral instruction of the Chairman and Managing Director no adjustment was made of the said amount from the retirement benefits of the employees. The Respondent No.5 having taken serious exception to the action of the Respondent No. 1 informing them that any further payment of Rs. 250A on ad hoc basis may compel him to suspend the non-plan assistance, Respondent No. 1 decided to deduct the balance sum paid in excess from the salary and wages of the workers. It was also alleged that advance payment of Rs. 400/- for head office employees and Rs. 250/- for factory workers every month were decided to be paid on ad hoc basis and such payment was, always subject to the terms of the Tripartite Engg. Wage Settlement report. It was also alleged that showing such ad hoc payment as part of the basic pay was done without application of mind and without any valid executive instruction and that all consequential reliefs granted to the employees after treating such ad hoc payment as part of the basic pay are illegal and unlawful. It was further alleged that the Unions were unlawfully standing in the way of the adjustment of the ad hoc payment which has become necessary as Respondent No.5 was not inclined to allow Respondent No. 1 any further time for recovery of the unadjusted amount. It was also alleged that there was no illegality or arbitrariness in the decision for deduction from payment a sum of Rs. 97.50 from the salary of each staff and workers of the respondent and adjustment of the said amount against the excess sum advanced to the employees on ad hoc basis. Respondents also denied the other allegations of the petitioners. They accordingly prayed for dismissal of the application.
4. The petitioners filed-in-affidavit in reply denying the wretched financial condition of the company, as alleged in the affidavit-in-opposition. It was also denied that salary and allowances of the employees of Respondent No. 1 are fixed and or revised from time to time by a body known as Tripartite Engg. Wage Settlement. It was alleged that the recommendation of the Tripartite Wage Settlement does not authorise any particular industry to take away any greater benefit enjoyed by its workers. It is also alleged that recommendations of the Tripartite Engg.. Wage Settlement Board are merely recommendatory and such recommendations have got nothing to do with bipartite settlement in respect of wages. It is also alleged that Respondent No. 1 did not adjust any amount from the retirement benefits of any employee who retired from service. It is also denied that sum of Rs. 250/- as ad hoc payment was shown as part of original salary as per verbal instructions of the then CMD. Respondent No. 1 always treated the sum of Rs. 250/- as finally merged into the basic pay of the workers. Recommendation of the Tripartite Engg. Wages Settlement Board for payment of additional sum of Rs. 148/- does not entitle the Respondent No. 1 to deduct any amount or the sum of Rs. 250/- from the wages of the employees. Payment of Rs. 148/ - it is alleged, is in addition to the payment of Rs. 250/-. It was also denied that the decision to treat the ad hoc payment as part of the basic pay was made mistakenly. The possibility of stoppage of non-plan assistance was denied. It was further alleged that there was total denial of natural justice in unilateral deduction of Rs. 250/- without giving any right of hearing or making representation by the workmen.
5. The facts are more or less admitted in this case. The writ petitioners have challenged the decision of the first respondent to implement the Tripartite Wage Settlement for the workers of Public Sector (Govt. of India) Engineering Factories in West Bengal in respect of its Workmen which would have enhanced their pay by less Rs. 97A. The petitioners have alleged that their ad hoc enhanced pay of Rs. 250/- in October, 1991 having been subsequently merged with their basic pay in April, 1994. Respondent No. 1 acted illegally in issuing the impugned circular dated August 26, 1995 by which the petitioners were informed that the Company has decided to start payment strictly in terms of Wage Settlement from the pay of August 1995. The petitioners have relied on certain specimen pay slips of workmen at Kanyapur Factory for the month of January to March 1994 (Annexure "B") and specimen pay slips of April 1994 (Annexure "C"). Departmental Summary of employees of Raleigh Division of CCIL for the months of March and April, 1994 (Annexure "CL") has also been relied upon by the petitioners. From Annexure "D" it will appear that in a meeting held on March 24, 1995, the Union Representatives asserted at the meeting that Rs. 250/- has already been merged in the basic pay by the management and they want continuation of the same. It will further appear from the minutes of the said meeting that the management informed the Union''s Representatives that the matter was being pursued with the appropriate authority. Thereafter from the minutes of the meeting dated August 4, 1995 (Annexure "E") it will appear that the Management Representative insisted upon the Union Representatives that it was necessary to comply with the order of the Government regarding deduction of wages.
6. The petitioner''s case is that there was no compliance of the rules of natural justice as without giving the Unions any opportunity of making any representation Respondent No. 1 by its order dated August 26, 1995 (Annexure "G") decided to a pay-cut of Rs. 250/- from the workers'' wages unilaterally. Reference was made to the case of H.L, Trehan v. Union of India reported in (1994 III LLJ l113) where it was held that alteration of the condition of the service to the disadvantage of the workmen without giving to them any opportunity of being heard offends the principles of natural justice. My attention was also drawn to the Hind Cycles Ltd. and Sen Raleigh Ltd. (Nationalisation) Act, 1980 where in Section 13(1) it is laid down that "Every person who has been, immediately before the appointed day, employed in any undertaking of either of the two companies shall become-
(a) on and from the appointed day, an employee of the Central Government, and
(b) where the undertakings of the two companies are directed, under Sub-section (l) of Section 6 to vest in Government companies, an employee of the concerned Government company on and from the date of such vesting or transfer,
and shall hold office or service under the Central Government or the concerned Government company, as the case may be, with the same rights and privileges as to pension, gratuity and other matters as would have been admissible to him if there had been no such vesting and shall continue to do so unless and until his employment under the Central Government or the concerned Government company, as the case may be, is duly terminated or until his remuneration and other conditions of service are duty altered by the Central Government or the concerned Government company, as the case may be." In the decision referred to above it is also held that the word ''duly'' in the Section is very significant and it excludes any arbitrary exercise of power. It is, however, submitted on behalf of the respondents that the petitioners having been adequately informed about the action Respondent No. 1 was going to take in the case and reasons for taking such action having also been intimated to them as it will appear from Annexure "E" and "F" of the writ petition, that there was substantial compliance of the principles of natural justice. This contention does not seem acceptable to me in view of the fact that the basic pay having been admittedly enhanced that becomes a condition of the service of the workmen. Merely by holding meetings with the representatives of the union without any intimation to the concerned workmen, who are the actual recipients of the enhanced pay and who would actually suffer by such pay cut cannot be considered to be due compliance of the rules of natural justice.
7. Mr. Das, Ld. Counsel for Respondent No. 1 submitted that in the event of the Court''s finding that natural justice was not complied with the matter should be disposed of by the writ Court itself upon hearing the parties as all the materials are before the Court. He referred to the case of Olga Tellis v. Bombay Municipal Corporation reported in AIR 1986 SC 182 where at Para 51 at page 302 the following observation in S.L. Kapoor''s case was quoted,"........................ where on the admitted or indisputable facts only one conclusion is possible and under the law only one penalty is permissible, the Court may not issue its writ to compel the observance of natural justice, not because it is not necessary to observe natural justice but because the Courts do not issue futile writs".
8. I accordingly find nothing to disagree with the contention of Mr. Das that the matter should be decided by the Court on merit.
9. It is now necessary to examine the Respondent No. 1''s contention in justification of the reduction of the basic pay of Rs. 250/- from the wages of the workmen which admittedly took place in April 1994. It was firstly contended that the Respondent No. 1 is a sick company and it is funded from the non-plan expenditure of the Central Government. That cannot be any reason for deduction of the pay of its employees. The immediate reason for deduction of the pay of the employees is the report of the Tripartite Engg. Wage Settlement Board.
10. The salary and other emoluments of the workers of the Respondent No. 1 is guided by the Industry-wise salaries structure of the Public Sector Engg. units in West Bengal, which is arrived at by the said body. It is alleged that the effect of the last settlement having expired on February 3, 1988 and the Employees'' Unions of the Cycle Corporation of India having been agitating for revision of the pay structure of their workmen an ad hoc monthly payment of Rs. 250/- to the factory workers and Rs.400/- to the head office employees was made. The decision of making ad hoc payment of Rs. 250/-came into effect from March 1992. The recommendations of the Tripartite Wage Settlement was made effective from November 1, 1991. It is therefore clear that increase in the payment of ad hoc wages was made after recommendations of the Tripartite Wages Settlement came into effect. This settlement also does not prescribe that the existing benefits enjoyed by the employees are to be withdrawn. In this connection reference may be made to Clause 5.9 of the said settlement which runs as follows : "If the total of the existing emoluments consisting of basic wage and dearness allowances is found to be more favourable than the total emoluments comprising basic wage and dearness allowance specified in this agreement, the workmen shall have the option to retain their existing wages..........". It was also provided there that if any particular category or categories of workmen are already enjoying better terms and conditions of service than are envisaged in this agreement their cases will not be adversely affected". The Tripartite Wage Settlement accordingly cannot be set up as a ground for reduction of the wages of the workmen which they had already been receiving.
11. Mr. Das, Ld. Advocate appearing for the respondent, finally drew my attention to Clause 103(2) of the Articles of Association of Respondent No. 1 which is reproduced below :--
"103--Without prejudice to the general powers conferred by the last preceding Articles, and the other powers conferred by these Articles, and subject to the provisions of the Act, the Board of Directors shall have the following powers, that is to say, powers :
(1)...................................
(2) to approve revenue budgets of the company without prior approval of the President but President''s prior approval shall be necessary in cases where in the Company''s revenue budget there is an element of the deficit which is proposed to be met by obtaining funds from the Government of India .............................".
12. This is a peculiar case of reduction of wages where the company is assailing its own order as illegal and invalid on the basis of the terms of the Articles of Associations referred to above. The provision referred to above is in respect of approval of revenue budget of the company. Whether or not the increase in the pay structure has a deficit element in it shall be reflected in next year''s budget and the procedure prescribed in the said Article of Association shall have to be followed then. This provision in the Article cannot be used for holding that the enhancement order was illegal and invalid and passed without jurisdiction, firstly because the Articles of Associations being in respect of internal management of the company that cannot override the statutory right of the workmen of protection of their basic pay, which is a condition of their service in terms of Section 13 of the Hind Cycles Ltd. and Sen Raleigh Ltd. (Nationalisation) Act, 1980. Secondly ad-hoc payment having been allowed from March 1992 which was merged with basic pay from April 1995 it is no good saying that the amount was neither reflected in the budgets until successive years nor did such budgets obtained prior approval of the President. By the very nature of the Company''s financial position, that being always running at a deficit, President''s prior approval under Article 103 was always required before passing of each year''s budget. The order of enhancement of wages accordingly cannot be challenged on this ground.
13. Mr. Das, Ld. Advocate appearing for the respondent raised two preliminary points about maintainability of the writ application. In the first place, with reference to number of decisions, namely, Basant Kumar v. Eagle Rolling Mills reported in (1964-II-LLJ-105) (SC);
14. The other preliminary point urged by Mr. Das is that no public law element having been involved in this matter and that the rights which the petitioners seek to enforce being purely contractual in nature the writ petition is not maintainable. For this purpose he referred to several cases namely Anupam Ghosh v. Union of India reported in 1991(II) CHN 451,
15. Though not seriously still the petitioners also claimed that they have legitimate expectations to receive the enhanced pay. Number of decisions were cited by Mr. Das, namely.
16. Before parting with this case it must be mentioned that the unilateral action of the company for deduction of the pay affects the provisions of Article 21 of the Constitution. In Olga Tellis'' case (supra) it is held that right to life includes the right to livelihood. After giving the workmen to understand that their pay has been increased and they having been allowed to adjust their life styles and family needs in accordance with such increased pay, deduction of such amount shall put them to serious troubles and inconvenience.
17. So upon consideration of all the facts and circumstances of this case along with the positions of law, referred to above, 1 am of the opinion that the petitioner shall be entitled to the reliefs prayed for in this writ application. The Respondent Company is directed not to make any pay deduction from the basic pay of the petitioners or to take any steps for such deduction in any manner whatsoever and not to give any effect to the minutes of meetings dated August 4, 1995 and the notice dated August 26, 1995.
18. The writ petition is accordingly allowed without any order as to costs.
19. Stay of operation of this order, as prayed for by the Ld. Advocate for the Respondent No. 1, is granted for a period of three weeks from date. This order of stay shall, however, not affect the interim order already passed by this Court.
