OFFICERS AND SUPERVISORS OF I.D.P.L. versus CHAIRMAN AND M.D.I.D.P.L. AND ORS.

Citation: [2003] SUPP. 1 S.C.R. 720 · Decided: 24-07-2003 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Dismissed

Judgment (excerpt)

A 
OFFICERS AND SUPERVISORS OF l.D.P.L. 
v. 
CHAIRMAN AND M.D. I.D.P.L. AND ORS. 
JULY 24, 2003 
B 
[M.B. SHAH AND DR. AR. LAKSHMANAN, JJ.] 
Service law: 
Revision of wages-Pay Commission revising pay-scale and allowances 
C of Central Government employees-Respondent being a public sector enterprise 
unable to revise pay and allowances to its employees due to financial crunch 
and declared sick unit by B!FR-Employees claiming revision-Justification 
of-Held: Employees of Government companies not Government servants-If 
their company is facing financial crunch they cannot ask for a direction to 
D the Central Government to meet the additional expenditure incurred on 
account of revision of pay-scales-Moreover, petitioners having applied for 
VRS, not entitled to pay revision. 
Government appointed Fifth Pay Commission to consider revision of pay-
scales and allowances of Central Government employees. During pendency, 
E the Commission granted three instalments of interim relief. Writ petitioners-
Officers and Supervisors employed in the public sector company were not 
given these benefits whereas employees of all other companies were granted 
installment of interim relief. This led to violation of dire~ns given by this 
Court in Jute Corporation of India Officers' Association case*. Petitioners 
filed contempt petition. Petition was dismissed as the company was undergoing 
F unprecedented financial crunch. Thereafter, Fifth Pay Commission 
recommended revision of scales of pay and allowances of the Central 
Government employees and the third respondent-Secretary, Ministry of 
Industry directed all the Public Enterprises to revise the pay-scales of the 
employees following C.D.A. pattern w.c.f. 01.01.1996. However, the first 
G respondent-Chairman and M.D. of the company did not take any action. Hence 
the present writ petition. 
H 
Writ petitioners contended that since the Government had revised the 
scales of its employees, the respondent-ID PL is bound to revise the pay-scales 
of the petitioners also; that the directions issued by the third respondent are 
720 
OFFICERSANDSUPERVISORSOFl.D.P.L.1·. CHAIRMAN AND M.D. l.D.P.L. 
72 \ 
binding on the first respondent which is one of the undertakings; that the A 
economic viability of the industrial unit or the financial capacity of the 
employer cannot be taken into consideration in the matter of revision of pay-
scales of the employees; that the entire expenditure on salaries payable to 
the employees of the first respondent is borne by the Government and, 
therefore, financial constraints cannot be pleaded as an excuse for not paying 
the instalments of interim relief and not revising the pay-scales; and that some B 
undertakings which have been incurring losses and which are before the 
Board for Industrial and Financial Reconstruction (BIFR) have also adopted 
the revised scales of pay recommended by the Pay Commission. 
Respondents contended that the payment of the interim relief which was C 
declared during the pendency of the Fifth Pay Commission from time to time 
was not released to the petitioners due to threat of industrial unrest; that 
IDPL became a sick industrial company and was declared as such by BIFR; 
that after protracted negotiations with the promoters, State Governments, 
banks and the employees an agreed revival package was formulated and 
approved by BIFR for implementation in the company; that the interim relief D 
was to be adjusted in the future wage revision by the Fifth Pay Commission 
in view of the express undertakings by the petitioners that they will not claim 
any wage revision for a period of four years from the date of implementation 
of agreed revival package; that the Gcvernment of India recommended that 
the modifications proposed by IDPL in the existing revival package be E 
examined by an operating agency; that consequently, BIFR declared that the 
agreed revival package has failed and appointed IDBI as an operating agency 
for suggesting measures for the revival of the respondent company; that the 
Government oflndia could not provide sufficient budgetary support to the IDPL 
and consequently the production activities had to be stopped in two major 
units; that the respondent company has no means of generation offunds and F 
the Government of India was continuing to give financial assistance for 
payment of salaries only and the decision for the revival of the respondent 
company is still pending before the Government of India an

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