CYCLE CORPORATION OF INDIA LTD Vs. CYCLE CORPORATION OF INDIA LTD
LAWS(CAL)-1996-8-2
HIGH COURT OF CALCUTTA
Decided on August 05,1996

CYCLE CORPORATION OF INDIA LTD. Appellant
VERSUS
CYCLE CORPORATION OF INDIA LTD. Respondents


Referred Judgements :-

ANUPAM GHOSH V. UNION OF INDIA [REFERRED TO]
H.L.TREHAN V. UNION OF INDIA [REFERRED TO]
SHREE NATHJEE INT. V. BHARAT ALUM [REFERRED TO]
RAM SARAN SHASTRY V. STATE OF W.B. [REFERRED TO]
CPA,EMPLOYEES V. CPA CONSULTANCY [REFERRED TO]
UNITED BANK OF INDIA V. HIRAK MUKHERJEE [REFERRED TO]
OLGA TELLIS V. BOMBAY MUNICIPAL CORPORATION [REFERRED TO]
THAKUR MAJHI V. EASTERN COALFIELDS [REFERRED TO]
VISWA BHARATI V. RAKHI DEBNATH [REFERRED TO]
KAVALAPPARA KOTTARATHIL KOCHUNNI ALIAS MOOPIL NAYAR RAVUNNIARATH UNNIMALU AMMA ALIAS DEVAKI AMMAL RAVUNNIARATH RAJAN MENON K C GOPALAN UNNI THATHUNNI NAIR P KOCHUNNI RAJA VS. STATE OF MADRAS [REFERRED TO]
BASANT KUMAR SARKAR JANKINATH BANERJEE SITARAM SHAW VS. EAGLE ROLLING MILLS LIMITED:KUMARDHUBI ENGINEERING WORKS LIMITED:KUMARDHUBI FIRE CLAY AND SILICA WORKS LIMITED [REFERRED TO]
L HIRDAY NARAIN VS. INCOME TAX OFFICER BAREILLY [REFERRED TO]
TITAGHUR PAPER MILLS COMPANY LIMITED VS. STATE OF ORISSA [REFERRED TO]
ASSISTANT COLLECTOR OF CENTRAL EXCISE CHANDAN NAGAR WEST BENGAL VS. DUNLOP INDIA LIMITED [REFERRED TO]
RAM AND SHYAM COMPANY VS. STATE OF HARYANA [REFERRED TO]
UNION OF INDIA BHILLAI ENGINEERING CORPORATION ANUP MALLEABLES BURN STANDARD CO TEXMACO CIMMCO TITAGARH STEELS VS. HINDUSTAN DEVELOPMENT CORPORATION:UNION OF INDIA [REFERRED TO]
GHAZIABAD DEVELOPMENT AUTHORITY STATE OF UTTAR PRADESH GHAZIABAD DEVELOPMENT AUTHORITY VS. DELHI AUTO AND GENERAL FINANCE PRIVATE LIMITED:DELHI AUTO AND GENERAL FINANCE PRIVATE LIMITED:MAHA MAYA GENERAL FINANCE COMPANY LIMITED [REFERRED TO]
MADRAS CITY WINE MERCHANTS ASSOCIATION A J JOY RAMANATHAPURAM MADURAI DISTT LIQUOR DEALERS ASSOCIATION VS. STATE OF TAMIL NADU [REFERRED TO]
RAJASTHAN STATE ROAD TRANSPORT CORPORATION VS. KRISHNA KANT [REFERRED TO]
TAPAN KUMAR JANA VS. GENERAL MANAGER CALCUTTA TELEPHONES [REFERRED TO]
STATE OF MADHYA PRADESH VS. RAM PRAKASH SHARMA [REFERRED TO]
UNION OF INDIA VS. BINANI CONSULTANTS P LTD [REFERRED TO]
C ROY CO VS. UNION OF INDIA [REFERRED TO]



Cited Judgements :-

MONOHAR KUMAR MITRA VS. STATE OF WEST BENGAL [LAWS(CAL)-2007-3-7] [REFERRED TO]


JUDGEMENT

A.K.Chakravarty, J. - (1.)This 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.
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