TaxTMI 
TaxTMI 
TaxTMI 
2003 (7) TMI 733
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee installments of interim relief. According to the petitioners, the benefit was extended to the employees of all 68 Public Enterprises. The grievance of the petitioners was that they were not given any installment of interim relief and as there was no response from the Chairman and Managing Director of the IDPL, they filed contempt petition No. 490 of 1996 for violation of directions given by this Court's order dated 03.05.1990. The contempt petition was dismissed as there was unprecedented financial crunch. On 24.10.1997, the Fifth Pay Commission recommended revision of scales of pay and allowances of the Central Government employees and the third respondent herein directed 69 Public Enterprises to revise the pay-scales of the employees following C.D.A. pattern w.e.f. 01.01.1996. As the first respondent did not take any action, the present writ petition No. 222 of the 1998 was filed in this Court. 2 . Mr. G.L. Sanghi, learned senior counsel, appearing for the petitioners placed strong reliance on a judgment of this Court dated 03.05.1990 in Jute Corporation of India Officers' Association v. Jute Corporation of India Ltd. and Anr. [1990]2SCR1006 . He invited our attention....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from a prospective date (Ref. Para 11. 15) 6. Medical facilities in terra of Para 11 21 of the Report From a prospective date to be decided by the management of the PSEs 7. Leave Travel Concession -do- 8. Other allowance and perquisites as per recommendations contained in Chapters 12 and 13 of the Report The quantum of benefits to be decided by the management of PSEs should be given effect to prospectively in terms of Para III. 7 Part III of the Report (v) The arrears arising on account of pay, DA and other allowances etc. would be adjustable against ad hoc payments made from time to time." 3. However, the petitioners were not given any of these monetary benefits whereas the employees of other public sector undertakings received all installments of interim relief. Finally, the petitioners issued a legal notice dated 05.08.1996 calling upon the management of the IDPL to release installments of the interim relief and dearness allowance as already stated. The petitioners did not receive any reply to the said notice, therefore, they filed Contempt Petition No. 4490 of 1996 for violation of this Court's judgment dated 03.05.1990. When the contempt petition was listed on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and, therefore, financial constraints cannot be pleaded as an excuse for not paying the installments of interim relief and not revising the payscales. Placing reliance on the Clause (iii) of the directions issued by this Court, which has been extracted above in Jute Corporation of India Officers' Association (supra), Mr. Sanghi submitted that since the Government had revised the scales of its employees, the respondent - IDPL is bound to revise the pay-scales of the petitioners also. 4. With the above contentions, the petitioner filed the above writ petition with the following prayers:- (a) direct the respondents to revise scales of pay of the petitioners w.e.f.01.014.1996 and pay the arrears immediately; (b) direct the respondents to pay three installments of interim relief w.e.f.the dates the payment become due. 5 . Separate counter affidavits were filed by the IDPL - respondent No. 1 and respondent Nos. 2, 3 and 4 respectively. The first respondent submitted that for various reasons the IDPL became a sick industrial company and was declared as such by the BIFR vide its order dated 12.08.1992 in BIFR case No. 503 of 1992 under Section 3(1)(O) of SICA and that after protr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....titioners who are officers and supervisors constitute only 5 per cent of the total strength of the employees of the respondent company and that the wage revision in respect of other employees has not been sanctioned by the Government of India so far. 6. Mr. P.P. Malhotra, learned senior counsel appearing for respondent Nos. 2, 3 and 4, after inviting our attention to the submissions made in the counter affidavit submitted that for various reasons the IDPL became a sick industrial company and was declared as such by the BIFR and that the first respondent company has no means of generation of funds and the Government of India is continuing to give financial assistance for the payment of salaries only and the decisions for the respondent company is still pending before the Government of India and the BIFR. He would further submit that it does not stand to the reason that a company which is already dependent upon the Central Government for the wage bill even at the existing rate may further increase its liabilities by granting the revised pay-scales and that the public sector undertakings making losses cannot be put at par with the undertakings making profits in extending the pay bene....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mployer is bound to pay the same irrespective of such capacity; (2) that the capacity of the industry to pay is to be considered on an industry-cum-region basis after taking a fair cross-section of the industry; and (3) that the proper measure for gauging the capacity of the industry to payshould take into account the elasticity of demand for the product the possibility of tightening up the organisation so that the industry could pay higher wages without difficulty and the possibility of increase in the efficiency of the lowest-paid workers resulting in increase in production considered in conjunction with the elasticity of demand for the product - no doubt against the ultimate background that the burden of the increased rate should not be such as to drive the employer out of business." 10. The same question was again examined in Hindustan Times ltd., New Delhi v. Their Workmen (1963)ILLJ108SC and this Court gave the following reasons. "7. While industrial adjudication will be happy to fix a wage structure which would give the workmen generally a living wage, economic considerations make that only dream for the future. That is why the Industrial Tribunals in this country gen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as on date no unit is functioning. It is also observed in the dated 23.01.1996 that the company's sales were of the order of Rs. 215 crore against the projected sales of Rs. 305.65 crore for the year ended 31.03.1995 and the company incurred a net loss of Rs. 69.80 crore against the projected profit of Rs. 0.08 crore. The major reasons for the poor performance of the company was stated to be constrained in working capital, power supply problems, reduction of custom tariff on import on bulk drugs, highly competitive marketing in formulation and high wage bills besides withdrawal of price preference. The progress period ended on 30.09.1995 and as per the company's balance sheet were Rs. 77 crore against the envisaged sales of Rs. 177.47 crores for the period ended 30.09.1995 and the company incurred a net loss of Rs. 47 crores against the projected net profit of Rs. 7.69 crores. The accumulated loss stood at Rs. 577.10 crores against the projected accumulated loss of Rs. 499.30 crores as on 31.03.1995 and Rs. 624.10 crores against Rs. 478.66 crores as on 30.09.1995. 13 . We have already reproduced the directions passed by this Court in Jute Corporation of India Officers'....