ASSAM FINANCIAL CORPORATION EMPLOYEES UNION Vs. STATE OF ASSAM

JUDGEMENT

(1.) This writ petition under Article 226 of the Constitution has been filed by the Assam Financial Corporation Employees' Union, which is an association of employees of the Assam Financial Corporation registered under the Trade Union Act, 1926, for appropriate reliefs with regard to revision of scales of pay of some of the employees of the Assam Financial Corporation(for short the AFC).

(2.) The facts briefly are that the Assam Pay Commission, 1988, made some recommendations on revision of pay scales of the employees of the State Public Sector Units of the State of Assam. The said recommendations were accepted by the State Government and were circulated by letter dated 21.10.91 of the Government of Assam Finance (Pay Research Unit) Department to the different departments of Government of Assam for the purpose of implementation by the State Public Sector Units under their administrative control. The AFC implemented the said recommendations of the Assam Pay Commission,1988 and the employees of the AFC received revised pay as per the said recommendations of the Assam Pay Commission, 1988. But thereafter, the employees of the AFC submitted a representation that the employees of other Public Sector Undertakings of the State of Assam such as the Assam Industrial Development Corporation (for short the AIDC) performing identical nature of duties and work were getting higher scales of pay and that the scales of pay of the employees of the AFC may be increased accordingly. The Board of Directors of the AFC in its 246th meeting held on 3.2.92 considered the said representation and decided to form a Sub-committee to go into the details of the Pay Commission's Report vis-a-vis the representation. The Sub-committee submitted its report on 28.5.92 suggesting higher scales of pay of the employees belonging to the managerial cadres of the AFC. The recommendations of the Sub-committee were considered by the Board of Directors of the AFC in its 248th meeting held on 28.5.92. The Board of Directors approved the said recommendations and decided that steps should be taken to complete the necessary formalities to implement the recommendations. Thereafter, the Managing Director of the AFC wrote a letter dated 17.6.92 to the Financial Commissioner, Govt. of Assam, seeking approval of the proposal of the Board of Directors for increasing the scales of pay of the aforesaid employees as per the said recommendations but by letter dated 4.7.92 issued by the officer on Special Duty (Pay Research Unit), the Managing Director ,AFC, was informed that the Government in the Finance Department was of the opinion that the proposal for increase in the scales of pay in the letter dated 17.6.92 of the Managing Director is not tenable in view of its likely impact on the scales of pay of other State Government Corporations/Boards. Aggrieved, the petitioner has filed this writ petition with a prayer to quash the letter dated 4.7.92 of the Officer on Special Duty. Finance (Pay Research Unit) Department has prayed for a Mandamus directing the respondents-authorities to implement the recommendations of the said Sub-committee for revision of the scales of pay of different, categories of employees of the AFC.

(3.) At the hearing, Mr. R.Gogoi learned counsel for the petitioner, contended that under Section 23 of the State Financial Corporation's Act, 1951 (for short the SFC Act), the AFC has the power to fix the remuneration payable to its employees by regulation, and in exercise of the said powers, the AFC has made the Assam Financial Corporation Staff Regulations, 1957 (for short the Staff Regulations). Mr. Gogoi further pointed out that the Staff Regulations have been made with the previous sanction of the State Government of Assam as provided in Section 48 of the SFC Act. Regulation 65 of the Staff Regulations provided that except as provided in the Staff Regulations or as may be prescribed by the Board, the pay and allowances of the employees shaJl be regulated in accordance with the provisions of Appendices-1 and II to the Staff Regulations. Thus, normally the pay and allowances of an employee would be that as provided in the Appendices-I and II to the Staff Regulations but where the Board prescribed a different pay and allowances of any employees, the pay and allowances of such employee would be as prescribed by the Board. According to Mr Gogoi, therefore. Regulation 65 gives ample powers to the Board to determine the pay and allowances of an employee and where such power is exercised by the Board fixing pay and allowances of an employee, the pay and allowances as fixed in the Appendices-1 and II to the Staff Regulations will not apply to such ah employee. Therefore, no amendment to the Staff Regulations was necessary to implement the recommendations of the Sub-committee suggesting higher scales of pay for the employees of the AFC belonging to its managerial cadres and the decision of the Board of Directors of the AFC in its 248th meeting held on 28.5,92 approving the recommendations of the Sub-committee for increasing the scales of pay of its managerial cadres was sufficient compliance with the law. Mr. Gogoi further pointed out that in Section 39 of the SFC Act, it has been further provided that in the discharge of its functions, the Board shall be guided by such instructions on questions of policy as may be given to it by the State Government, but it has been held by a Division Bench of Rajasthan High Court (JaipurBench) in Civil Writ Petition No.669/88 that the word "policy" in Section 39 of the SFC Act does not include fixation of emoluments of the employees of a State Financial Corporation. Mr. Gogoi produced a copy of the said judgment of the Rajasthan High Court as well as a copy of the order dated 16.12.88 of the Supreme Court in SLP(C)No. 1560S/88 showing that the SLP against the said judgment of the Rajasthan High Court was dismissed by the Supreme Court. Mr. Gogoi, therefore, urged that it was not at all necessary on the part of the Managing Director, AFC to obtain approval of the State Government to the decision of the Board of the AFC to increase the scales of pay of its managerial cadres in accordance with the recommendations of the Sub-committee arid that a direction should be issued to the AFC to implement the said recommendations of the Sub-committee.