CAUSE TITLE:
Maharashtra State Financial v/s The State Of Maharashtra
DATE OF ORDER:
02nd FEBRUARY 2023
JUDGE(S):
HONOURABLE MR. JUSTICE S. RAVINDRA BHAT, J
PARTIES:
Appellant: MAHARASHTRA STATE FINANCIAL CORPORATION EX-EMPLOYEES ASSOCIATION & ORS
Respondent: STATE OF MAHARASHTRA & ORS.
SUBJECT:
The Hon’ble Supreme Court (hereinafter referred to as ‘Supreme Court’ or ‘the Court’), has stated that the Voluntary Retirement Scheme (VRS) personnel are not entitled to parity with those who retired after reaching the age of superannuation for salary revision objects, because doing so would be unfair and discriminatory.
IMPORTANT PROVISIONS:
Constitution of India 1949
- Article 14 – states that within the boundaries of India, the State must not deny anyone's right to equal treatment under the law or to prosecutorial immunity of individual under the laws. Also states the restriction of discrimination based on a person's birthplace, race, caste, religion, or sexual orientation
- Article 43 – states the living wages and other benefits under legislations for the labour.
The State Financial Corporations Act, 1951
- Section 39 – states that the financial corporations can be given instructions with regards to the questions of policy.
BRIEF FACTS:
- The ruling prevented the Fifth Pay Commission's recommendation to revise pay scales for workers of the Maharashtra State Financial Corporation (MSFC) who retired or passed away between January 1, 2006, and March 29, 2010 in effect. In accordance with the State decision, the Fifth Pay Commission Report's pay scale modification became applicable to 115 MSFC workers who were employed as of March 29, 2010. However, the modification became effective on January 1, 2006.
- By the contested ruling, the High Court dismissed the arguments made by the appellant group and agreed with MSFC and the State that pecuniary factors should be taken into account when deciding whether to give or deny financial assistance.
- Bombay High Court’s decision was challenged by the financial corporation on the bases that it was arbitrary and discriminatory.
QUESTIONS ROSE:
Whether to what extent the revise pay are under the scope of executive policy making?
ARGUMENTS ADVANCED BY THE APPELLANT
- It has been contented by the council that The Appellants were all in continuous employment and had even benefited from interim modification while waiting for the Pay Commission Report's pay scales to be finalised.
- Those still working on March 29, 2010, and those who kept working after January 1, 2006, but left their jobs before March 29, 2010, came under the same classification. The length of service was the sole distinction between individuals in service before and after the latter date.
- The date when the wage revision took effect, or 1.01.2006, was the important one for granting it. The refusal of the wage revision, which was admittedly for the time they actually served, constituted to hostile discrimination because all of the appellants were employed as of that date. Not only that but also the denial of pay revision incentives that were genuinely and legally available to them.
- That the MSFC's entire obligation to former employees—including individuals who had retired, requested VRS, or had passed away before the wage modification took effect, does not exceed 32 crores.
ARGUMENTS ADVANCED BY THE RESPONDENT
- It was argued by the council that the State Financial Company Act was used to create the MSFC, making it an independent corporation. It is not required to adhere to the rules and regulations that apply to workers of the Maharashtra Government. In reality, it is required to independently earn its money utilizing its own assets to cover any extra cost or obligation brought on by higher compensation or higher salaries for its employees.
- Since MSFC is not required under Section 39 of the State Financial Corporations Act of 1951 to execute the judgements of the Fourth, Fifth, and Sixth Pay Commissions for its workers, MSFC must seek the advice and instructions of the State Government in questions of policy.
- Because without MSFC's ability to shoulder the responsibility of such pay rise, workers of the Corporation are not entitled to any benefits of pay revision.
- Determining the cut-off date is a subject of policy, particularly with regard to changes to salary, grants, and other advantages provided to workers of a State Corporation. These rely on a variety of factors, such as budgetary limitations and the quantity of personnel involved.
ANALYSIS BY THE COURT:
- The court set aside the order of the High Court and ruled that the appeal is allowed.
- The appeal is therefore granted inasmuch as people who left MSFC's employ between January 1, 2006, and March 29, 2010, as well as the descendants or representatives of individuals who passed away during that time, are eligible to overdue based on salary revisions that have been approved by the Corporation.
- The Corporation is required to pay interest on such delays at a rate of 8% per year from April 1, 2010, to the date of this decision. During eight weeks from now, these sums must be computed and distributed to those people. In the manner stated above. There won't be a cost order.
CONCLUSION
In the present case it can be seen that the VRS personnel cannot make a parity claim with those who retired after reaching superannuation age. Those who stopped working due to termination, dismissal, or other reasons would also not be eligible for the benefit of wage revision.
Applying the ratio to the judgements made above, it is evident that there is no difference between those who resigned (or passed away in employment) before March 29, 2010, and those who remained in service and received the wage rise. A further distinction could not be seen between individuals who worked from 01.01.2006 to 29.03.2010 and those who remained beyond that date.
These personnel adhered to the same class as those who benefited from the pay adjustments, as evidenced by the MSFC's failure to collect any temporary relief or ad-hoc funds that were paid between 18.9.1996 and 31.12.2005 (towards recommendations of the 5th Pay Commission).
Article 14 of the Indian Constitution is violated by the removal of retired personnel who retired between January 1, 2006, and March 29, 2010 after reaching their date of retirement.
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