Holding

The petitioners are entitled to the benefits of the revised IDA pay scales, and the scheme sanctioned by the BIFR must be implemented for them.

Summary

The petitioners, representing employees of British India Corporation Ltd. and its two units—sick public sector undertakings registered with the BIFR—sought the application of the revised IDA pay scales under the Government Order of 19 July 1995, which had been denied by the Central Government. They relied on an earlier Supreme Court interim order (7 May 1999) and a subsequent order (27 September 2002) that granted the same benefits to employees of National Textile Corporation (NTC) and its subsidiaries. The respondents argued that the NTC order was purely ad‑hoc, limited to that case, and that BIC was undergoing winding‑up, making it ineligible for the revised pay scales. The Court examined whether the BIFR‑approved revival scheme under Section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985, extended the same entitlement to the petitioners. Finding that the revival proposal had been approved by the BIFR, the Court held that the petitioners were entitled to the same benefits as NTC employees and directed implementation of the BIFR‑sanctioned scheme for them. The writ petition was consequently disposed of in favour of the petitioners.

Issues considered

Whether the benefits of the revised IDA pay scales under the 19 July 1995 Government Order extend to employees of British India Corporation and its units, which are sick undertakings registered with the BIFR.
Whether the Supreme Court's interim order in NTC (IDA) Employees Association v. Union of India was limited to that case or has a broader application to similar sick undertakings.
Whether approval of a revival scheme by the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985, triggers entitlement to the revised pay scales.

Legislation cited

Sick Industrial Companies (Special Provisions) Act, 1985s. 17(3), s. 18, s. 19(1), s. 19(2)

Subjects

Article 32revised IDA pay scalesBIFRrevival schemesick public sector undertakingequal treatmentpay fixation

Judgment

NATIONAL CONFEDERATION OF OFFICERS ASSON. OF A
CENTRAL PUBLIC SECTOR UNDERTAKING AND ORS.
v.
UNION OF INDIA AND ORS.

NOVEMBER 30, 2004 B
[ASHOK BHAN AND DR. AR. LAKSHMANAN, JJ.]

Sick Industrial Companies Special Provisions Act, 1985 :

S. 18-Sick Public Undertakings-Registered with BIFR- C
Implementation of revised IDA pay scales under O.M dated 19. 7. 1995-
Held, since revival proposal has been approved by BlFR, petitioners would
be entitled to same benefits as given in NTC (IDA) Employees Association's
case-Constitution of India-Article 32-Labour law-Revised IDA pay
sca/8. D
The Central Government denied the benefits of revised IDA pay
scales under O.M. dated 19.7.1995 to those sick public undertaking~
which were registered with the BIFR. Employees of British India
Corporation, a Government Undertaking and its two units, represented
by petitioner No. I -Association - all the three being sick undertakings E
and registered with the BIFR- filed the present writ petition contending
that in Special Leave Petition No. 16732/97 in the case of National
Textile Corporation and its subsidiaries, which were also sick
undertakings, the Court by an interim order dated 7.5.1999 granted tile
benefits ofO.M. dated 19.7.1995 with effect from 1.1.99 and, therefore, F
the petitioners were also entitled to similar relief. The stand of the
respondents was that the interim order dated 7.5.99 was purely on ad
hoc basis subject to ultimate decision and confined to the said case and
therefore, the petitioner in the instant case were not entitled to the
revised IDA pay scales.
G
In the National Textile Corporation's* case, while disposing of the
special leave petition, the Court on 27.9.2002, observed that the BIFR
had formulated schemes which stood approved by all concerned. The
Court directed that the Scheme as sanctioned by the BIFR be
implemented. In the instant case also, the government oflndia had given H
489
490 SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R.

A approval for the revival proposal. The BIFR also approved the scheme
to be circulated .11s sanctioned Scheme under Section 18 of the Sick
Industrial Compal}ies Special Provisions Act, 1985 and has approved
the revival proposal.

Disposing of the writ petition, the Court
B
HELD : In view of the fact that the revival proposal in the instant
case has been approved by the BIFR, the petitioners would also be
entitled for the same benefits as given to the N. T.C. employees Association
in SLP (C) No. 16732 of 1997 by order dated 27.9.2002. It has been
C brought on record that the Scheme sanctioned by BIFR would be
completed by March 2005 and further talks regarding fixation of pay
would be held thereafter. In the circumstances, it is directed that the
Scheme as sanctioned by BIFR be implemented so far as the petitioners
are concerned. [495-D-F]
D
*N T.C. (IDA) Emp. Association v. Union of India and Ors.; SLP (C)
No. 16732/97 decided by Supreme Court on 27.2.2002, relied on.

CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 427 of
1999.
E
Under Article 32 of the Constitution of India.

Sanjiv Sen and B.S. Banthia for the Petitioners.

F N.N Goswami, Mrs. B. Sunita Rao, Sushi! Kr .. Pathak, Ms. Varuna
Bhandari Gugnani and D.S. Mahra for the Respondents.

The Judgment of the Court was delivered by

DR. AR. LAKSHMANAN, J. : The present writ petition under Article
G 32 of the Constitution oflndia is concerning release ofrevised IDA pay scale
in respect of the British India Corporation (a Government Undertaking) and
its two units situated at Cawnpore Woollen Mills, Kanpur and New Egerton
Woollen Mills, Dhariwal (Punja~). The employees of the Cawnpore Woollen ·
Mills, Kanpur and New Egerton Woollen Mills, Dha~iwal have authorised
H the National Confederation of Officers' Association of the Central Public
NATIONAL CONFEDERATION OF OFFICERS ASSN. OF C.P.S.U. v. U.0.1. [LAKSHMANAN, J.) 491

-· Sector Undertaking to submit this petition on their behalf in mis Court and, A
therefore, the petitioners are jointly submitting this petition.

The brief controversy involved in this matter is that by order dated
19. 7 .1995, the Central Government has denied the benefit of revised IDA
pay scale to those sick public sector undertakings which are registered with B
the BIFR. This Court on dated 7.5.1999 in S.L.P.(C) No. 16732/1997
ordered that the National Textile Corporation and its subsidiaries be given
benefits under O.M. dated 19.7.1995, at least from 1.1.1999. The said order
reads thus:

"S.L.P.(C)No.16732 of 1997 & I.A. Nos.1-9 in S.L.P.(C) C
No.16732 of 1997

We heard learned counsel for the parties. In our view till these
matters are finally decided, interest of justice requires that the
officers/employees of the N.T.C. and its subsidiaries whose cases D
have been cleared by the Board for Industrial and Financial
Reconstruction by order dated 21/28th April, 1998 and which
would cover 518 employees of the I.D.A. Pattern working in N. T.C.
and its subsidiaries should be given without prejudice to the rights
and contentions of all the contesting parties in these proceedings,
and purely on ad hoc basis benefits under O.M. dated 19th July, E
1995 at least from Ist January, 1999.

All arrears on the basis of that O.M. will be worked out and
paid over to the aforesaid employees only w.e.f. 1st January, 1999
and in future during the pendency of these proceedings the monthly F
payments will also be continued to be made on the enhanced rate
till the final disposal of these proceedings.

The aforesaid arrears shall be computed and paid w.e.f. 1st
January, 1999 within eight weeks from today.
G
It is made clear that the aforesaid order is passed subject to
the ultimate decision in these proceedings and subject to the
adjustment, if any, as directed by this Court ultimately and all such
employees shall have no objection to such adjustment to be made
from their future salaries or other retrial benefits, if any. H
492 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A For compliance of the aforesaid order, the Central Government
will make available necessary funds to the N.T.C., if required.

The S.L.P. along with the other matters will stand over to 17th
August, 1999. In the meantime, counter affidavit and the rejoinder
affidavit, if any, are to be filed by the concerned parties are permitted
B
to be filed."

The above order was passed in the petition filed by the N.T.C. (IDA)
Employees Association.

C According to the petitioners, the British India Corporation and its two
units referred to above are also sick undertakings and they are also entitled
to the release of revised IDA pay pattern in compliance of the order dated
19.7.1995 and the benefits given by this Court in order dated 7.5.1999 in
S.L.P.(C) 1673211997 should also be given to the petitioners and the
D employees of Cawnpore Woollen Mills and New Egerton Woollen Mills,
Dhariwal and the employees of the British India Corporation. Thus petitioner
Nos. I & 2 have submitted this writ petition in representative capacity for
looking after the employees of the said units.

Mr. Sanjiv Sen, learned counsel appearing for the petitioners, submitted
E that the revision of pay scales of IDA pattern to the petitioners is a clear
violation of Art. 14 of the Constitution of India as the employees of other
public sector undertakings including employees of British India Corporation
should have been given the benefit of revised pay scales on IDA pattern,
but the petitioners were denied. After the order dated 7.5.1999 passed by
F this Court in S.L.P.(C) No. 16732 of 1997, the petitioners submitted a
representation through their President on 31.5. t 999 which is marked as
Annexure P-4 in this writ petition on which the Chairman of British India
Corporation Ltd. (respondent No.3 ). Suggested by letter dated 2.6.1999
marked as Annexure P-5 in this writ petition, to the Central government for
granting the benefit of IDA pay pattern to the employees of British India
G Corporation Ltd. (respondent No.3) also but the Central Government has not
accepted the representation of the petitioners and neither any reply has been
given nor granted any relief to the petitioners. It is important to note that
the Company was nationalised for securing proper management and for
development of production, modernization of plant and machinery and to f
H protect thousands of employees for their employment. The company is at
NATIONAL CONFEDERATION OF OFFICERS ASSN. OF C.P.S.U. 1•. U.O.l [LAKSHMANAN, J.] 493

present under the control of the Ministry of Textiles and is an undertaking A
of the Central Government and that the Company is a Government Company
under the Companies Act. Since in an identical matter, this Court by order
dated 7.5. 1999, passed in S.L.P.(C) No. 16732of1997 (NTC (IDA) Employees
Association vs. Union of India), granted the benefit of revised pay scale to
the N.T.C. and its subsidiaries, the p~titioners are also claiming the same B
relief for the employees of the British India Corporation and for its employees
working in the Cawnpore Woollen Mills and New Egerton Woollen Mills,

.. Dhariwal.

It is pertinent to notice that in an identical matter when the employees
of NTC (IDA pattern) Employees' Association, submitted a writ petition c
before the High Court of Bombay, registered as W.P.No. 43 of 1997, the
High Court dismissed the petition observing that ifthe directions issued by
this Court have not been complied with, remedy does not lie before the High
Court. Aggrieved by that order, the said Association filed S.L.P.(C) No.
16732 of 1997 before this Court.
D
This Court by order dated 27.9.2002 passed the following order:

"Petition for Special Leave to appeal (Civil) No. 16732/1997 (From
the judgment & order dated 24/06/1997 in WP 43/97 of the High
Court of Bombay)
E
N.T.C. (IDA) Emp. Association ....... Petitioner
v.
U.0.1. & Ors.
With T.P.(C) No. 409/1997, T.P.(C) No.490/1997

Date : 27/09/2002 These petitions were called on for
F
hearing today

CORAM:
Hon'ble Mr. Justice U.C. Banerjee
Hon'ble Mr. Justice B.N. Agrawal G
UPON hearing counsel the Court made the following

ORDER

Intervention application is dismissed. H
494 SUPREME COURT REPORTS [2004) SUPP. 6 S.C.R.

·A We have been informed that BIFR has already formulated eight
schemes which stand approved by all concerned and agencies. Let the
scheme as sanctioned by BIFR be implemented. The special leave petition
and the transfer petitions stand disposed of accordingly."

B The respective respondents filed their counter affidavits. According
to them, the Department of Public Enterprises has, vide its order No. 2(50)/
86-DPE(WC) dated 19. 7.1995 denied the benefit ofrevised IDA pay scales
to those Public Sector Undertakings, which are referred to BIFR. It was
submitted that the British India Corporation Limited and its two units is
a sick public sector undertaking and had been referred to BIFR and BIFR
C had issued winding-up of these units vide its order dated 31. l 0.1994. The
appeal preferred by the Company in AAIFR was also dismissed and the
AAIFR confirmed the order of winding-up of these units. It was, therefore,
submitted that as per the Department of Public Enterprises order dated
19. 7 .1995, the petitioners are not entitled to the benefit of revised pay scales
D w.e.f. 1.1.1992.

It was further argued that an interim order dated 7.5.1999 in S.L.P.(C)
No. 16732 of 1997 was passed directing that the eight sick subsidiary
Corporation ofNational Textile Corporation Ltd. be given the benefits under
revised pay scales w.e.f. 1.1.1999, purely on ad hoc basis, subject to
E ultimate decision and adjustment, if any, as directed by the Court ultimately
and all such employees shall have no objection to such adjustment to be
made from their future salaries or other retrial benefits and this decision of
the Court was applicable to only these eight subsidiary Corporations ofNTC
and not to British India Corporation, especially because British India
F Corporation was ordered to be wound up and its case was pending before
the High Court of Allahabad for liquidation. At present, the case of British
India Corporation has been remanded to BIFR for consideration of revival
package, which also does not include any revision of pay scales. Hence,
no revision of IDA pay scales is possible or admissible.

G We heard Mr. Sanjiv Sen, learned counsel appearing for the petitioners
and Mr. N.N. Goswami, learned senior counsel appearing forthe respondents.
At the time of hearing, our attention was drawn to the order passed by the
BIFR in Reconstruction Case No. 518/92 Re : British India Corporation Ltd.
dated 18.6.2002. It is seen from the said order that the British India
H Corporation filed application with BIFR on January 24,2001 along with
NATIONAL CONFEDERATION OF OFFICERS ASSN. OF C.P.S.U. v. U.0.1. [LAKSHMANAN, J.] 495

revival proposal and Techno-Economic viability Plan of 1998. BIFR at its A
hearing held on 13.6.2001 appointed IDBI as the operating agency under
Section 17(3) of the Act and directed the Company to submit a revival
proposal within one month. The revival proposal was submitted by the
BICL in July, 2001. The proposal envisaging onetime settlement of dues
of institutions and SBI was discussed at a joint meeting of involved agencies
B
on January 4, 2002. On 15.2.2002, IDBI (OA) submitted its final report
.along with rehabilitation scheme conveying consensus of all present in the
joint meeting. On the basis of the aforesaid report received from the
operating agency, a Draft Revival Scheme of the Company was circulated
to all concerned for getting consent as required under Section 19(2) read
with Section 19(1) of the Sick Industrial Companies (Special Provisions) c
Act, 1985. The matter was adjourned for hearing objections/suggestions at
the subsequent hearing.

It is seen from the above proceedings that the Government oflndia had
given approval for the revival proposal. After considering the representation D
of all concerned and the suggestions made in the Draft Revised Proposal,
the BIFR approved the Scheme to be circulated as sanctioned Scheme under
Section 18 of the Act. Now that the revival proposal has been approved
by the BIFR, the petitioners in the pr~sent writ petition, in our opinion,
would also be entitled for the same benefits as given to the N.T.C. (IDA)
employees Association in S.L.P.(C) No.16732 of 1997 dated 27.9.2002. E

We, therefore, dispose of the writ petition by directing the
implementation of the Scheme as sanctioned Scheme by the BIFR in so far
as the petitioners are concerned. We place on record the statement made
by the respondents in their counter affidavits and the submission made by F
Mr. N.N. Goswami, learned senior counsel appearing for the respondents,
that the scheme sanctioned by BIFR would be completed by March, 2005
and further talks regarding fixation of pay would be held thereafter. There
shall be no order as to costs.

R.P. Writ petition disposed of. G
t