Economic viability controls pay revision claims where a sick public sector undertaking cannot enforce Government-funded wage enhancement.

Employees of a sick public sector undertaking cannot claim, as of right, revision of pay scales or Government-funded salary enhancement when the employer lacks financial capacity and revival has failed. The SC treated the undertaking's economic viability, continuing losses, closure of major units, and the failure of statutory rehabilitation efforts as controlling factors in wage fixation. It held that employees of government companies are not Government servants and cannot compel the State to bear the additional wage burden. In this background, earlier directions on pay revision did not create an enforceable entitlement, and the claim for interim relief was rejected.

---

---

Issues: Whether employees of a sick public sector undertaking have a legal right to claim revision of pay scales and interim relief, and to compel the Government to meet the additional wage burden despite the company's continuing losses and failed revival efforts.

Analysis: The Court held that employees of government companies are not Government servants and cannot claim, as of right, that the Government must bear their salary or the additional burden arising from pay revision. It treated the employer's economic viability and financial capacity as material and controlling considerations in wage fixation. The record showed that the undertaking had been declared a sick industrial company, that revival efforts under the statutory rehabilitation process had failed, that production had stopped in major units, and that the company was deeply loss-making. In that background, the Court held that the earlier directions concerning pay revision did not compel revision where the unit could not be revived and where the employees had also opted for voluntary retirement.

Conclusion: The claim for pay revision and interim relief was rejected, and no enforceable legal right was found in favour of the employees to compel the Government or the company to grant the requested monetary benefits.

Ratio Decidendi: Employees of a sick public sector undertaking have no enforceable right to demand pay revision or Government-funded salary enhancement where the employer lacks financial capacity and revival of the unit has failed; economic viability is a relevant and determinative factor in wage fixation.

---