T. I. JOSE AND ORS.versusMANAGING DIRECTOR, KERALA WATER AUTHORITY AND ANR.

610                       [2019]
               SUPREME COURT     4 S.C.R. 610
                              REPORTS                     [2019] 4 S.C.R.


A                            T. I. JOSE AND ORS.
                                       v.
                 MANAGING DIRECTOR, KERALA WATER
                       AUTHORITY AND ANR.
B                    (Civil Appeal No. 4676 of 2012)
                             FEBRUARY 13, 2019
              [DR. DHANANJAYA Y. CHANDRACHUD AND
                       HEMANT GUPTA, JJ.]
            Service Law:
C
            Pay scale – Of the post of Head Operators in the respondent
      department – In the line of promotional posts viz. ‘Operator’, ‘Head
      Operator’ and ‘Mechanical Superintendent’, a post of ‘Senior
      Operator’ was inserted between the posts of ‘Operator’ and ‘Head
      Operator’ by an administrative order – Decision of creation of the
D
      intermediate post was set aside by High Court – Pursuant to the
      order of High Court, State deleted the post of ‘Senior Operator’
      and refixed the scales of pay corresponding to the existing pre-
      revised scales of pay – Review petition by the respondent-Authority
      dismissed – Writ appeals allowed by Division Bench of High Court
E     – In review High Court held that there shall be no recovery of
      amounts already disbursed to the employees or pensioners of the
      respondent- Authority – On appeal, held: The higher pay scale which
      was given to Head Operators was occasioned by creation of an
      intermediate post of Senior Operators – Once the intermediate post
      was abolished since it was found to be ultra vires by the High Court,
F
      the pay scale of Head Operators was restored to the exactly
      corresponding pay scale under the revised scales of pay – This
      action was consistent with law.
            Dismissing the appeal, the Court
G           HELD: On the analysis of the pay revision, it has emerged
      before the Court that Head Operators were drawing a pre-revised
      scale of Rs 1455-2440. The equivalent revised scale of pay under
      the third pay revision was Rs 4710-7710. Since an intermediate
      post of Senior Operator was created by an administrative decision,
      the scale of pay for that post was fixed at the pay scale allowable
H
                                     610
      T. I. JOSE v. MANAGING DIRECTOR, KERALA WATER                      611
                         AUTHORITY

to the next higher post of Head Operator. Consequently, the pay          A
scale for the post of Head Operator was made equivalent to that
which was drawn in the next higher post of Mechanical
Superintendent. The High Court held that an intermediate post
could not have been created by an administrative order and would
require an amendment to the statutory rules. Following this, the
                                                                         B
State Government in its GO dated 18 March 2004 abolished the
intermediate post. Upon the abolition of the intermediate post,
all that was done by the GO dated 18 March 2004 was to clarify
that Operators, Head Operators and Mechanical Superintendents
would be entitled to draw equivalent revised scales of pay
corresponding to their pre-revised pay scales. The higher pay            C
scale which was given to Head Operators under note 13 was
occasioned by the creation of an intermediate post of Senior
Operators. Once the intermediate post was abolished since it
was found to be ultra vires by the High Court, the pay scale of
Head Operators was restored to the exactly corresponding pay
                                                                         D
scale under the revised scales of pay. This action was consistent
with law. The High Court has fairly issued a direction that no
recoveries shall be made. [Paras 13,14,15] [615-C-H; 616-C]
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4676
of 2012.
                                                                         E
       From the Judgment and Order dated 16.11.2004 of the High Court
of Kerala at Ernakulam in W.A. No. 1465 of 2004 and dated 15.12.2005
in R.P. No. 200 of 2005.
          A. Raghunath, Adv. for the Appellants.
      Nishe Rajen Shonker, Anu K. Joy, Alim Anvar, P. S. Sudheer,        F
Jogy Scaria,, Advs. for the Respondents.
          The Judgment of the Court was delivered by
          DR DHANANJAYA Y CHANDRACHUD, J.
     1. This appeal arises from a judgment of a Division Bench of the    G
High Court of Kerala dated 16 November 2004.
     2. The appellants were working at the material time as Head
Operators and Operators under the Kerala Water Authority1, a statutory

1
    KWA                                                                  H
612            SUPREME COURT REPORTS                           [2019] 4 S.C.R.


A     body established by the State of Kerala on 1 April 1984. KWA
      implemented three pay revisions:
            (i) The first pay revision was on 13 February 1990, with effect
      from 1 July 1988;
            (ii) The second pay revision was on and with effect from 24 April
B     1995; and
            (iii) The third pay revision was on 19 August 1999, with effect
      from 1 March 1997.
            3. Qualified operators were entitled to three grade promotions on
C     the completion of 10, 18 and 25 years of service. Under the pay revision
      of 1999, the period of service for the third grade promotion was reduced
      from 25 to 23 years.
            4. Prior to the third pay revision, there was a post of Operator.
      The next higher post was of Head Operator. The next available
D     promotional post was that of Mechanical Superintendent. Their pre-
      revised scales of pay were:
              (i)    Operators: Rs 1090-1695;
              (ii)   Head Operators: Rs 1455-2440; and
              (iii) Mechanical Superintendents: Rs 1760-3050.
E
             5. During the course of the third pay revision, an intermediate
      post of Senior Operator was created. Note 13 in Annexure 2 provided
      as follows:
            “Note.13: The post of Senior Operator/Head Operator having the
F           same scale of pay will be separate as the Senior Operator and the
            Head Operator with two different scales of pay. The post of the
            Senior Operator will be the ratio promotion post for all the
            Operators. The ratio between the Operator and the Senior
            Operator will be 5:1. The Senior Operator will be allowed the
            scale of pay equal to the existing scale of pay of Senior Operator/
G           Head Operator. The post of the Head Operator will be the
            promotion post from the post of the Senior Operators who have
            the requisite qualifications for the post of Mechanical
            Superintendent. The ratio between the Senior Operator and the
            Head Operator will also be 5:1. The Head Operator will be allowed
H           the scale of pay equal to the existing scale of pay of the Mechanical
      T. I. JOSE v. MANAGING DIRECTOR, KERALA WATER                           613
      AUTHORITY [DR DHANANJAYA Y CHANDRACHUD, J.]

          Superintendent (Existing scale Rs.1760-3050 and the revised scale   A
          Rs.5635-9135). However, total of the existing strength of
          Operators/Senior Operators/Head Operators should not exceed
          on this account. These modifications will take effect from
          1-3-1997.”
        6. The above note indicates that as a result of the creation of the   B
intermediate post of Senior Operators, that post would be allowed a
scale of pay equal to the existing scale of pay of Head Operators.
Consequently, Head Operators would be allowed a scale of pay equivalent
to that of a Mechanical Superintendents. The above note also prescribes
the ratios to be maintained. In consequence, the following revised scales
of pay were given:                                                            C

           (i)         Operators: Rs 3440-5385;
           (ii)        Senior Operators: Rs 4710-7710
                       (equivalent to the revised pay scale for
                       Head Operators); and                                   D
           (iii)       Head Operators: Rs 5635-9135
                      (equivalent to the revised pay scale of
                      Mechanical Superintendents).
       7. The decision of the State Goverment to create an intermediate
post was challenged in a Writ Petition2 before the Kerala High Court.         E
By a judgment dated 12 April 2002, a Single Judge of the High Court
came to the conclusion that the introduction of an intermediate post could
have only been carried out by means of an amendment to the Special
Rules and not by an administrative order. Consequently, the Single Judge
held that the notification introducing the post of Senior Operator between
Operators and Head Operators shall not work against the appellants            F
and their normal chance of getting grade pay in accordance with the
prevailing orders and according to the Special Rules. The Court held
that, while the appellants could not be prevented from availing of the
benefit of the pay revision, the existing benefit under statutory rules
could not be taken away without amending the Rules.                           G
       8. On 12 March 2003, the Single Judge granted revised pay scales
to the petitioners in OP 4490 of 2000 with effect from 1 March 1997.
The order was followed on 3 September 2003 in OP 22119 of 2003.

2
    OP 6961 of 2000                                                           H
614                SUPREME COURT REPORTS                            [2019] 4 S.C.R.


A           9. Following the above decisions of the High Court, a Government
      Order3 was issued by the State Government on 18 March 2004. By the
      GO, the post of Senior Operator was deleted and the scales of pay were
      refixed corresponding to the existing pre-revised scales of pay. The
      tabulated chart contained in the GO is as follows:
B          Sl.No. Category                                 Scales of Pay
                                              Existing (Rs.)       Revised (Rs.)
           1.       Operator                  3440-5385            No change
           2.       Senior Operator           4710-7710            Deleted

C          3.       Head Operator             5635-9135            4710-7710
           4.       Mechanical Superintendent 6935-11460           5635-9135
           5.       Mechanical Superintendent -                    6935-11460
                    (Higher Grade)
                Paragraph 8 of the GO reads as follows:
D               “The issues raised by the petitioners in Ext.p7 representation dated
                16.11.01 O.P.No.19752/02 is disposed of on the above basis.
                These orders are issued without prejudice to the directions/orders
                already issued by the Hon’ble High Court in the other related
                O.Ps and subject to the orders of the Hon’ble Court in the O.Ps
E               pending in the matter.”
             10. Review Petitions were filed by KWA before the High Court
      against the orders dated 12 March 2003 and 3 September 2003 on the
      ground that the scale of pay drawn by the appellants will be lowered in
      light of the GO. The Review Petitions were dismissed on 8 July 2004 by
F     the High Court on the ground that the GO cannot affect the right of the
      appellants flowing from the judgment.
             11. The State and KWA preferred Writ Appeals against the original
      judgments of the learned Single Judges as well as the decision in review.
      The Division Bench allowed the Writ Appeals. In review, the High Court
G     held that there shall be no recovery of amounts already disbursed to the
      employees or the pensioners of the KWA on the basis of the pay revision
      order, which would not have been payable on account of
      GO(P) No.18/04/WRD, but which was disbursed on or before the date
      on which the judgment sought to be reviewed was passed.

H     3
          GO(P) No.18/04/WRD
   T. I. JOSE v. MANAGING DIRECTOR, KERALA WATER                            615
   AUTHORITY [DR DHANANJAYA Y CHANDRACHUD, J.]

       12. The grievance which has been urged on behalf of the appellants   A
by Mr. C.S. Rajan, learned senior counsel, is that as a result of the GO
dated 18 March 2004 the pay scales of Head Operators were reduced
from Rs 5635-9135 to Rs 4710-7710. Learned senior counsel submitted
that the State Government, in the process of complying with the judgment
of the learned Single Judge holding that an intermediate post could not
                                                                            B
have been created by an administrative circular, not only deleted the
post, but reduced the pay scale which was being drawn by the Head
Operators. This, it has been submitted, was an arbitrary exercise of
power.

        13. On a careful analysis of the pay revision, it has emerged       C
before the Court that Head Operators were drawing a pre-revised scale
of Rs 1455-2440. The equivalent revised scale of pay under the third
pay revision was Rs 4710-7710. Since an intermediate post of Senior
Operator was created by an administrative decision, the scale of pay for
that post was fixed at the pay scale allowable to the next higher post of
Head Operator. Consequently, the pay scale for the post of Head             D
Operator was made equivalent to that which was drawn in the next
higher post of Mechanical Superintendent. The High Court held that an
intermediate post could not have been created by an administrative order
and would require an amendment to the statutory rules. Following this,
the State Government in its GO dated 18 March 2004 abolished the            E
intermediate post. Upon the abolition of the intermediate post, all that
was done by the GO dated 18 March 2004 was to clarify that Operators,
Head Operators and Mechanical Superintendents would be entitled to
draw equivalent revised scales of pay corresponding to their pre-revised
pay scales.
                                                                            F
        14. We are in agreement with the view of the High Court that
the higher pay scale which was given to Head Operators under note 13
was occasioned by the creation of an intermediate post of Senior
Operators. Once the intermediate post was abolished since it was found
to be ultra vires by the High Court, the pay scale of Head Operators
                                                                            G
was restored to the exactly corresponding pay scale under the revised
scales of pay. This is clear from the following pre-revised scales of pay
and the equivalent revised pay scales which have been granted to the
above categories
      :
                                                                            H
616              SUPREME COURT REPORTS                         [2019] 4 S.C.R.


A
         S.No.              Existing Scales of Pay   Revis ed Scales of Pay
         S5                 1090-35-1230-45-1500- 3440-80-3600-85-3940-
                            65-1695               90-4210-100-5010-125-
                                                  5385
B        S10                1455-45-1500-65-1760- 4710-100-5010-125-
                            85-2440               5635-150-6235-175-
                                                  7110-200-7710
         S14                1760-85-2440-90-2710- 5635-150-6235-175-
                            105-2920-130-3050     7110-200-7710-225-
C                                                 8385-250-9135

            This action was consistent with law. The High Court has fairly
      issued a direction that no recoveries shall be made.
            In consequence, we see no merit in the appeal. The appeal is
D     accordingly dismissed. No costs.


      Kalpana K. Tripathy                                         Appeal dismissed.



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