Holding

The Court ordered implementation of the High Power Pay Committee's recommendations with specified effective dates, distinguishing between employees appointed before and after 1 January 1989, linking future pay revisions to Central Government changes, and permitting voluntary switch to the IDA pattern.

Summary

The Supreme Court was approached by officers of public sector enterprises seeking implementation of the High Power Pay Committee's recommendations on pay scales, dearness allowance and other benefits for Class I and II officers. The Court had earlier ordered interim reliefs and the constitution of the Committee, whose report was submitted on 2 November 1988 but not acted upon promptly by the Central Government. The petitioners contested the Government's proposed implementation dates, especially for House Rent Allowance, insisting on a 1 January 1986 commencement. The Court directed that the recommended pay scales and dearness allowance be extended to employees appointed with Central DA terms, while those appointed on or after 1 January 1989 would be governed by future government discretion. It clarified that pay revisions would align with changes for Central Government employees and that employees could voluntarily switch to the IDA pattern. Specific implementation dates for revised pay scales, interim relief installments, CCA, HRA, medical facilities, and other allowances were enumerated, and arrears were to be adjusted against ad‑hoc payments. All the pending petitions were disposed of with no costs, and the judgment was made applicable to all related cases.

Issues considered

Whether the Central Government must implement the High Power Pay Committee's recommendations for Class I and II officers of public sector enterprises.
What should be the effective dates for implementation of revised pay scales, dearness allowance, House Rent Allowance and other benefits.
Whether employees appointed before and after 1 January 1989 are to be governed by different pay and allowance regimes.
Whether pay revisions for these employees should be linked to revisions for Central Government employees.
Whether employees may voluntarily switch from the Central DA pattern to the IDA pattern.

Legislation cited

Constitution of Indias. Article 32

Subjects

High Power Pay Committeepublic sector enterprisespay scalesdearness allowanceHouse Rent Allowanceinterim reliefequal pay for equal workArticle 32writ petitionimplementation

Judgment

A JUTE CORPORATION OF INDIA OFFICERS'
ASSOCIATION ETC.
v.
JUTE CORPORATION OF INDIA LTD. AND ANR. ETC.

MAY 3, 1990
B
[RANGANA1H MISRA, P.B. SAWANT AND
K. RAMASWAMY, JJ.]
,..
Labour and Services: Public Sector Enterprises-Class I & II
Officers-High Power Pay Committee recommendations-implemen-
C tation of

The High Power Pay Committee appointed under the directions
of this Court In respect of the emoluments to be paid to the officers
belonging to Class I and Class II Service employed in different public }
sector enterprises governed by the Central Government pattern of pay
D scales and dearness aUowance, submitted its report on November 2,
1988. When the Central Government did not act expeditiously on that
report the petitioners rited writs for a direction to Implement the
recommendations.

Disposing of the writ petilions, the Court directed:
E '
1. The scales of pay and dearness aUowance as recommended in ~
the report would he extended to those employees who' have been
appointed with specific terms and conditions fOr grant of Central D.A.

F
and those who were already being paid Central dearnes'i allowance. [1009G]

2. The employees appointed on or after January 1, 1989 would be
-
governed by such pay-scales and aUowances as might be decided by the -W
Government In its discretion. Those appointed earlier with IDA pattern ) •
would continue to be governed in accordance with the terms and condi·
tions of their appointment. !too9Hi

G 3. The pay re.vision for those employees in respect of whom the
recommendations were being directed to be implemented would take
place only as and when similar changes were affected for the Central
Government employees. These emp:oyees would, however, continue to
enjoy the option to switch over to the IDA pattern of the scales of pay --J...
etc. on a voluntary basis. hot OBJ ·
H

1006
J.C.I. OFFICERS' ASSCN. v. JUTE CORPN. (SAWANT, J.] 1007

4. The various recommendations made In the report wonld he
A
implemented with effect from the dates indicated. [1010C]

5. The arrears arising on account of pay, DA and other
allowances etc .• would be adjustable against ad hoc payments made
from time to time. [lOUC] ·
B
ORIGINAL JURISDICTION: Civil Miscellaneous Petition
No. 10864 of 1989.

IN

Writ Petition No. 13044 of 1984 Etc. Etc.
c
.{ (Under Article 32 of the Constitution of India).

Kapil Sibal, Additional Solicitor General, Dr. L.M. Singhvi,
Gobinda Mukhoty, K.K. Venugopal, Ms.·Mridula Ray, C.V. Subba
Rao, P.R. Seetharaman, Ranjit Kumar, Asru Bose, Guiab Chandra, D
Sarva Mitter, R. Venkataramani, C. &.mesh, Ms. Urmila Sirur, M.N.
Krishnamani, Sunder Rao, K.R. Nagaraja, V.N. Ganpule, J.D. Jain
and Chandran-Petitioner in person for the appearing parties.
( The Judgment of the Court was delivered by
E
SAW ANT, J. In all these cases the relief claimed is the
implementation of the recommendations of the High Power Pay Com·
mittee in respect of the emoluments to be paid to the officers belong·
ing to Class-I and Class-II service employed in different public sector
enterprises.
F
2. Earlier, these employees had approached various High
Courts and this Court against the decision of the Central Government
to switch them over to the Industrial Dearness Allowance pattern and
the incidental steps taken to enforce the said decision. The main
reliefs claimed in those petitions were that (i) the employees should be
permitted to continue to draw the salary in the scales of pay applicable G
to them along with the Central Dearness Allowance, (ii) they should
/-. be granted all the benefits of pay revision and revision of other allo-
wances which may be announced from time to time by the Central
Governmerif for its employees, and (iii) there should be. no discrimina-
tion between them and those directly· employed by the Central
Q()_vc::ml?ent and that they should get the same scales of pay and' H
1008 SUPREME COURT REPORTS [1990] 2 S.C.R.

A allowances for the same types of jobs in accordance with the principle
of "equal pay for equal work". )L--
\
During the course of the hearing, on August 24, 1984, this Court
ordered the payment of three additional dearness allowance instal-
ments from August 1, 1983, October 1, 1983 and November 1, 1983 to
B those employees who were on Central pattern of pay-scales and dear-
ness allowance subject to an individual undertaking by each employee ~
that in case such payment resulted in the employee receiving an
excess, such excess would be recovered from him from future pay-
ments, if the petitions failed.

On February 19, 1986, the Court further ordered that all
c employees of public sector enterprises following the Central dearness
allowance pattern and drawing a basic pay of Rs.1000 or less, will be
entitled to interim reliefs on the same basis and scale as the Govern-
ment of India employees w.e.f. January 1, 1986 .. This was also allowed
subject to similar undertaking given by each employee.
D
When the matters were posted for hearing on March 14, 1986,
the Central Government expressed its willingness to refer to High
Power Pay Committee the question regarding the revision of pay-
scales, additional dearness allowance, compensatory and other allo- )
wances and such other incidental aspects relating to the employees
E governed by the Central pattern of pay-scales and dearness allowance.
Accordingly, the Court directed the Central Government to constitute
a High Power Pay Committee to go into various aspects relating to
pay-scales and other incidental matters including interim relief to the
said employees, viz., the employees governed by the Central Gove~n
~
-
ment pattern of pay-scales and dearness allowance. The terms of refe-
F rence of the High Power Pay Committee were as follows: )
"I. To examine the present structure of emoluments and
conditions of service taking into account the total packet of
benefits in cash and kind, available to the workers, clerical
staff, supervisors and officers,. below the Board level
G following the Central DA pattern and to suggest changes
which may be desirable and feasible.

II. To examine the variety of allowances and benefits in
kind that are presently available to the above noted
employees in addition to pay and DA and suggest rationali-
H sation, simplification thereof with a. view to promoting
efficiency.
I
J.C.!. OFFICERS' ASSCN. v. JUTE CORPN. [SAWANT, J.] 1009

III. To examine matters relating to grant of interim relief
A
to tl\e employees of all such public entrprises (belonging to
the Government of India and following the Central DA
pattern) who are drawing basic pay above Rs.1000 per
month and grant necessary relief to them, if called for.

IV. While making recommendations on the above points, B
the Committee would keep in view other relatecnactors
such as scales of pay, DA and allowances prevailing in
other public sector undertakings on Industrial DA formula,
economic conditions in the country, resources available at
the disposal of these public enterprises".

3. The Committee submitted its recommendations by its Final c
~ Report of November 2, 1988. However, the Central Government did
· not act on the s.iid report expeditiously and hence the present writ
petitions were filed on various dates praying for relief in the form of a
direction to the Central Government to implement the recommenda-
tions made in the Report. The Government took several adjournments D
to disclose its stand on the Report and has now ultimately come out
with proposals which are incorporated in the additional affidavit dated
17th April, 1990, filed on behalf of the Union of India by Shri Suresh
. Kumar, Additional Secretary in the Ministry of Industry, Bureau of
( Public Enterprises. The affidavit is taken on record.
E
We heard the parties on the proposals contained in the affidavit
and found that there was not much controversy over the proposals
except in regard to the date of the implementation of the House Rent
Allowance. The employees insisted that the said allowance should be
given from 1.1.1986 whereas the Government contended that it can
properly be implemented only w.e.f. January J, 1989, since the Report · F
was of 2nd November, 1988. We, however, direct as follows:

(i) The scales of pay and dearness allowance as recommended in
the Report will be extended to those employees who have been
appointed with specific terms and conditions for grant of Central •
D.A. This will be equally applicable to the employees who by G
rules laid down by the public sector enterprises are being paid
Central dearness allowance.

(ii) The employees appointed on or after January 1, 1989, will be
governed by such pay-scales and allowances as may be decided
by the Government in its discretion. Those appointed earlier H
1010 SUPREME COURT REPORTS 119901 2 S.C.R.

A with IDA pattern will continue to be governed in accordance
with the terms and conditions of their appointment. \ .
L_.

(iii) The pay revision for those employees in respect of whom
the recommendations are hereby being directed to be imple-
mented hereafter, will take place only as and when similar
B
changes are effected for the Central Government employees.
These employees will, however, continue to enjoy the option to
switch over to the IDA pattern of the scales of pay etc. on a
...
voluntary basis.

(iv) The various recommendations made in the Report will be
c implemented with effect from the dates as follows. These dates ~-
are broadly in conformity with those specified in the Report:
~
Item To be implemented w.e.f.
D 1. Revised pay-scales and 1.1.1986 (Para 16.1)
revised D.A. formula

2. First instalment of Interim 1.6.1983 (Para 16.3)
-. Relief

E - J. Second instalment of 1.3.1985 (Para 16.3)
Interim Relief

4. CCA as per revised slabs
(para 11.6 of Chapter 11
of the Report)
1.1.1989
(From 1.1.1986 to 31.12.1988 CCA
will be paid at the existing rate at
-
.-
F notional pay in the revised pay-scales I

(para 11.7 of the Report) )

5. House Rent Allowance Ceiling on payment of HRA without
Percentage rates as per _ proquction of rent receipt to be
•G SPE's OM NO. 1(3)/83- revised from 1.12.1988. The existing
BPE (WC) dated 1.7.83, HRA structure to be reviewed by
subject to overall ceiling BPE and revised norms and rates
of Rs. 1250, 1000, 680, fixed from a prospective date
340 and 310 fpr Delhi/ (Ref. Para 11.15) ·"'-
Bombay, A, B1 and B2, C
iind unclassified cities
H
respectivey
J.C.!. OFFICERS' ASSCN. v. JUTE CORPN. [SAWANT. J.J 1011

Medical facilities in From prospective date to be A
terms of para 11.21 of decided'by the Management of
the Report the PSBs '

7. Leave Travel Concession -do-

8. Other Allowances and per-Tlle quantum of benefits to be B
quisites as per recommen- decided by the Management of PSEs
dations contained in Chap- should be given effect to pros-
ters 12 & 13 of the Report pectively in terms of para
!IL 7 Part III of the Report

(v) The arrears..arising on account of pay, DA and other allo- c
wances etc., would be adjustable against ad hoc.payments made
.( from time to time.

4. This judgment will govern all the petitions. The peti-
tions, transferred cases and all iinterlocutory applications, civil
miscellaneous petitions and contempt petition are disposed of D
accordingly with no costs.

P.S.S. Petitions disposed of.
(

-
t