Tamizhaga Civil Supplies Corporation Thozhilalar Sangam v. The State of Tamil Nadu

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 4.8.2011CORAM: THE HONOURABLE MR.JUSTICE K.CHANDRUW.P.No.20390 of 2009Tamizhaga Civil Supplies CorporationThozhilalar Sangam, represented byits State General Secretary, A.K.ElumalaiNo.29/11, Kannagi StreetMGR Nagar, Chennai – 600 078... PetitionerVs.1. The State of Tamil Nadu rep. by the Principal Secretary to Government Department of Co-operation, Food and Consumer Protection, Fort St.George Chennai – 600 009.2. Tamilnadu Civil Supplies Corporation rep. by its Managing Director No.12, Thambusamy Road Kilpauk, Chennai – 600 010... Respondents (cause title amended as per order dated 22.9.2010 in M.P.No.2 of 2010)PRAYER: Petition under Article 226 of the Constitution of India forissue of writ of Certiorarified Mandamus to call for the records on thefile of the first respondent relating to the impugned order dated17.9.2009 bearing letter No.15898/A1/2009-2, quash the same andconsequently direct the respondents to grant pension to the employeesof the second respondent Corporation.For Petitioner:Mr.R.KrishnamurthySenior Counselfor M/s.Sai, Bharath & IlanFor Respondents :Mr.V.SubbiahSpl. Government Pleader for 1st respondentMr.V.Selvanayagamfor 2nd respondent ORDERThe petitioner is a trade union. In this writ petition, they have https://hcservices.ecourts.gov.in/hcservices/ come forward to challenge an order passed by the firstrespondent/State Government dated 17.9.2009. By the impugned order,the State Government declined to accept the demand of thepetitioner/Union for creating a pension scheme for the employeesworking in the second respondent/Tamil Nadu Civil SuppliesCorporation. Even that order came to be passed pursuant to theearlier direction given by this Court in W.P.No.11304 of 2009, dated24.6.2009, wherein and by which the representation of thepetitioner/Union was directed to be considered by the firstrespondent. 2. The writ petition, which originally came up for admission on8.10.2009, was adjourned several times and finally admitted on21.10.2009. On notice from this Court, the first respondent has fileda counter affidavit dated 22.7.2011 and the second respondent has alsofiled an affidavit dated 28.3.2011 Earlier, the petitioner filedM.P.No.3 of 2010 seeking permission to raise additional grounds andthat was also allowed by this Court on 22.9.2010. Thepetitioner/Union has also filed a reply dated (Nil) July, 2011. 3. Heard the arguments of Mr.R.Krishnamurthy, learned SeniorCounsel appearing for M/s.Sai, Bharath and Ilan, Mr.V.Subbiah, learnedSpecial Government Pleader appearing for the first respondent andMr.V.Selvanayagam, learned counsel for the second respondent.4.1. It is the case of the petitioner/Union that they are aregistered trade union. The second respondent/Civil SuppliesCorporation is in-charge of distribution and procurement of paddy.They are also procuring paddy directly from the farmers and afterhulling the same through private mills and also in the modern ricemills run by them, they are distributing those grains to all Talukgodowns, which in turn are supplied to the Civil Supplies Departmentand co-operative ration shops. The Corporation is playing a vital rolein various welfare schemes of the Government, including thedistribution of subsidized rice and essential commodities through fairprice shops. The employees of the Corporation are nowhere differentfrom the government servants and the duties and responsibilitiesentrusted to them are more than that of a government servant, but theservice conditions of the government servants are not extended tothem. While the government servants are enjoying the benefit of apension scheme, the same was not extended to the employees of thesecond respondent/Corporation. 4.2. It is also stated that ever since the second respondent/Corporation was formed in the year 1972, the employees were makingrequests for introduction of a pension scheme and during the year2011, the then Hon'ble Minister for Food made a statement on the floorof the Legislative Assembly that a pension proposal is beingconsidered, and once again a similar statement was made during April, https://hcservices.ecourts.gov.in/hcservices/ 2008 on the floor of the Assembly. The petitioner/Union sent arepresentation to the Chief Minister's Grievance Cell, for which areply was directed to be sent by the General Manager of the secondrespondent and accordingly, a reply was sent on 24.10.2008. 4.3. It is also the case of the petitioner/Union that, on makingenquiries and getting replies under the Right to Information Act, theyhave found out that the Chennai Metropolitan Water Supply and SewerageBoard is paying pension to its employees. Likewise, the Tamil NaduText Book Society and various Transport Corporations, Tamil Nadu SlumClearance Board, Tamil Nadu Water Supply and Drainage Board, TamilNadu Electricity Board, and Tamil Nadu Housing Board are payingpension to their employees and therefore, not only the Government, butalso the various public sector undertakings are paying pension andthere is no reason why the employees of the Civil Supplies Corporationstood excluded from such benefits. In essence, the respondents shouldnot adopt different yardstick and therefore, it was prayed that theyshould be given the benefit of pension.4.4. In the petition for additional grounds, they had stated thatthe second respondent, who was originally registered as a Companyunder the Companies Act, had changed its character and had sought forrecognition as a charitable organization under Section 25 of theCompanies Act and as the second respondent had become a body of thefirst respondent, the pension scheme as applicable to governmentservants should be made applicable. The contention that since they arenot a profit making organization they cannot give pension also cannotbe accepted, because by virtue of registration as charitableorganization under Section 25 of the Companies Act, they are notexpected to make profit.5.1. In response to these allegations, the first respondent hadstated that the petitioner/Union is a minority union having thefollowing of 2.27% in the election held during November, 2009 and itdoes not have any representative capacity to speak on behalf of allthe workers of the Corporation. The second respondent is a serviceoriented organization without any profit motive. While the Governmentis having its own pension scheme, the second respondent is covered bythe provisions of the Employees' Provident Funds and MiscellaneousProvisions Act, 1952 and as part of the provident fund, a pensionscheme has also been introduced with effect from 16.11.1995. 5.2. It is stated that the petitioner/Union cannot compel theGovernment to frame a pension scheme for the employees of the secondrespondent/Corporation in the absence of any statutory right. TheGovernment undertakings mentioned by the petitioner are not covered bythe Employees' Provident Funds and Miscellaneous Provisions Act,1952, as they themselves are having a general provident fund scheme.If the demand of the petitioner/Union was accepted, it will have a https://hcservices.ecourts.gov.in/hcservices/ cascading effect and the Government will have to cover 47 other publicsector undertakings and when a direction was given by this Court toconsider the petitioner's representation, after undertaking a study ofall relevant aspects, the Government has negatived the request of thepetitioner/ Union.5.3. It is also stated that from the year 2003, the governmentservants have been made ineligible for getting pension as a matter ofright. By G.O.No.259, Finance (Pension) Department, dated 6.8.2003,the Government has introduced a new Contributory Pension Scheme andmade it applicable to government servants, who are recruited on orafter 1.4.2003. 5.4. It is further stated that the second respondent does nothave sufficient funds to extend the benefits of pension and theexample referred to, viz., Tamil Nadu Electricity Board, isinappropriate and the Tamil Nadu Electricity Board is paying pensionout of its own funds. Even though the employees of the TransportCorporation got the benefit of pension, the Government is strugglingto get income tax clearance in respect of the said pension scheme.Further, the employees of the Corporation having been covered by theprovisions of the Employees' Provident Funds and MiscellaneousProvisions Act, 1952, are also drawing pension under the pensionscheme framed under the said Act.6. The second respondent, in their individual counter affidavit,had stated that the petitioner/Union, in the absence of any statutoryright, cannot seek for such direction and the Corporation does nothave sufficient funds to extend the benefit of pension to theemployees.7. In the reply affidavit filed by the petitioner/Union, it wasstated that the duties performed by the employees of the secondrespondent/ Corporation are commendable and all the welfare schemesare executed through the Corporation. While the Government wasproceeding to distribute free fan, mixie and grinder to the people andit is sought to be executed by the aegis of the Corporation, only onthe question of pension they are expressing financial difficulties.8. In the additional typed set filed by the petitioner, they alsoenclosed the schemes for pension applicable in other public sectorundertakings.9.1. Mr.R.Krishnamurthy, learned Senior Counsel referred to thejudgment of the Supreme Court in Randhir Singh v. Union of India andothers, [1982] 1 SCC 618 for the purpose of contending that theprinciple of equal pay for equal work is not an abstract doctrine, butone of substance and the cases of unequal scales of pay based on noclassification or irrational classification is a breach of such https://hcservices.ecourts.gov.in/hcservices/ principle. In that case, the Supreme Court directed that the payscales of the Driver-Constables of the Delhi Police Force should bemade on a par with the Drivers of the Railway Protection Force.9.2. The learned Senior Counsel also referred to the judgment ofthe Supreme Court in D.S.Nakara and others v. Union of India, [1983] 1SCC 305 for contending that pension is neither a bounty nor a matterof grace depending upon the sweet will of the employer, nor an exgratia payment and it is a payment for the past service rendered. Itis a social welfare measure rendering socio-economic justice to thosewho in the heyday of their life ceaselessly toiled for the employer onan assurance that in their old age they would not be left in lurch.Pension as a retirement benefit is in consonance with and infurtherance of the goals of the Constitution. It creates a vestedright and is governed by the statutory rules.9.3. He also referred to the judgment of the Supreme Court inJacob M.Puthuparambil and others v. Kerala Water Authority and others,[1991] 1 SCC 28 for contending that the preamble to the Constitutionpromises socio-economic justice and the Directive Principles fix thesocio-economic goals. The Directive Principles of State Policyreflect the hopes and aspirations of the people. Though the provisionsof Part IV of the Constitution of India are not enforceable by anycourt, the principles laid down therein are nevertheless fundamentalin the governance of the country and the State is under an obligationto apply them in making laws. Therefore, whenever the State isrequired to make laws it must do so consistently with these principleswith a view to securing social and economic freedom so essential forthe establishment of an egalitarian society.9.4. The learned Senior Counsel finally referred to the judgmentof the Supreme Court in State of Maharashtra v. Manubhai Pragaji Vashiand others, [1995] 5 SCC 730 for contending that the State mustdischarge the burden of proof for justifying the differentialtreatment between governmental agencies. It is stated that in thatcase the Supreme Court frowned upon the Government for continuing thedisparity between the government colleges and non-government collegesand it was held that singling out the non-teaching staff of the non-government colleges would amount to hostile treatment. In that case,the Supreme Court went to the extent of giving a direction even toenforce a right flowing from the Directive Principles of State Policyand held that when there is an inaction on the part of the Executive,the Judiciary must intervene and in a fit case, the Court can directthe Executive to carry out the Directive Principles of State Policy.It was further stated that the State cannot whittle down by pleadingpaucity of funds as a ground for denying the right of the employees.9.5. He also referred to an unreported judgment of this Court inTamilnadu Warehousing Corporation Employees Union and others v. The https://hcservices.ecourts.gov.in/hcservices/ State of Tamilnadu, rep. by Secretary to Government, Food and ConsumerProtection Department and others (W.P.Nos.28269 and 34640 of 2007 and24409 of 2008, dated 24.1.2011). In that case, when the employees ofthe Tamil Nadu Warehousing Corporation and their trade union sought adirection to implement a pension scheme, this Court directed therespondent to proceed with the scheme for pension, but it was madeclear that under the said scheme, the Government shall not befinancially made liable to bear the cost. It is not clear as to howthe said judgment has any relevance to the facts on hand.10. Per contra, the counsel for the first respondent/Stateproduced a copy of the government order in G.O.No.259, Finance(Pension) Department, dated 6.8.2003, wherein the Government hadintroduced a Contributory Pension Scheme and for that purpose, theTamil Nadu Pension Rules have also been amended. It was stated thatthe Government employees, who were recruited on or after 1.4.2003,should become members of the scheme and must pay 10% of basic pay anddearness allowance from the salary for the contributory pensionscheme.11. In the present case, the petitioner/Union by referring to theexistence of such scheme in other public sector undertakings cannotseek a writ in the nature of Mandamus for granting direction to theState Government to formulate a pension scheme for the employees ofthe Civil Supplies Corporation. As already pointed out by thepetitioner themselves, the second respondent is a Corporation with itsown name and seal and is an autonomous body and it has to decidewhether it has got the financial ability to introduce a pensionscheme. On the contrary, the second respondent has pleaded lack offinancial resources. They had also stated that the employees of theCorporation are already covered by the Employees' Provident Funds andMiscellaneous Provisions Act, 1952 and apart from the provident fund,they are also enjoying the pension scheme framed under the said Act.The State Government had also stated that they have got no power tofinance any such scheme and even for government employees they hadconverted the scheme to one of contributory pension scheme. It isin the light of this, the request of the petitioner will have to beconsidered.12. With reference to the first contention based upon RandhirSingh case, supra, it must be noted that the said judgment came to beconsidered subsequently and was distinguished by the Supreme Court.The Supreme Court in S.C.Chandra and others v. State of Jharkhand andothers, [2007] 8 SCC 279, in paragraphs [24] to [26], observed asfollows:"24. The principle of equal pay for equal work waspropounded by this Court in certain decisions in the https://hcservices.ecourts.gov.in/hcservices/ 1980s e.g. Dhirendra Chamoli v. State of U.P., [1986] 1SCC 637, Surinder Singh v. Engineer-in-Chief, CPWD,[1986] 1 SCC 639, Randhir Singh v. Union of India, [1982]1 SCC 618, etc. This was done by applying Articles 14 and39(d) of the Constitution. Thus, in Dhirendra Chamolicase this Court granted to the casual, daily-ratedemployees the same pay scale as regular employees.25. It appears that subsequently it was realised that theapplication of the principle of equal pay for equal workwas creating havoc. All over India different groups wereclaiming parity in pay with other groups e.g. governmentemployees of one State were claiming parity withgovernment employees of another State.26. Fixation of pay scale is a delicate mechanism whichrequires various considerations including financialcapacity, responsibility, educational qualification, modeof appointment, etc. and it has a cascading effect.Hence, in subsequent decisions of this Court theprinciple of equal pay for equal work has beenconsiderably watered down, and it has hardly ever beenapplied by this Court in recent years."In the same judgment, Markandey Katju,J., in his own supplementingopinion, held that the grant of pay scale is a purely executivefunction and the Court should not interfere with the same. He alsoreiterated the well known principle of separation of powers and inparagraphs [33] to [35], it was held as follows:"33. It may be mentioned that granting pay scales is apurely executive function and hence the court should notinterfere with the same. It may have a cascading effectcreating all kinds of problems for the Government andauthorities. Hence, the court should exercise judicialrestraint and not interfere in such executive functionvide Indian Drugs & Pharmaceuticals Ltd. v. Workmen,[2007] 1 SCC 408.34. There is broad separation of powers under theConstitution, and the judiciary should not ordinarilyencroach into the executive or legislative domain. Thetheory of separation of powers, first propounded by theFrench philosopher Montesquieu in his book The Spirit ofLaws still broadly holds the field in India today. Thus,in Asif Hameed v. State of J&K, 1989 Supp (2) SCC 364 athree-Judge Bench of this Court observed (vide paras 17to 19): (SCC pp. 373-74) https://hcservices.ecourts.gov.in/hcservices/ “17. Before adverting to the controversy directlyinvolved in these appeals we may have a fresh lookat the inter se functioning of the three organs ofdemocracy under our Constitution. Although thedoctrine of separation of powers has not beenrecognised under the Constitution in its absoluterigidity but the Constitution makers havemeticulously defined the functions of variousorgans of the State. Legislature, executive andjudiciary have to function within their ownspheres demarcated under the Constitution. Noorgan can usurp the functions assigned to another.The Constitution trusts to the judgment of theseorgans to function and exercise their discretionby strictly following the procedure prescribedtherein. The functioning of democracy depends uponthe strength and independence of each of itsorgans. Legislature and executive, the two facetsof people's will, they have all the powersincluding that of finance. Judiciary has no powerover sword or the purse nonetheless it has powerto ensure that the aforesaid two main organs ofState function within the constitutional limits.It is the sentinel of democracy. Judicial reviewis a powerful weapon to restrain unconstitutionalexercise of power by the legislature andexecutive. The expanding horizon of judicialreview has taken in its fold the concept of socialand economic justice. While exercise of powers bythe legislature and executive is subject tojudicial restraint, the only check on our ownexercise of power is the self-imposed disciplineof judicial restraint.18. Frankfurter, J. of the U.S. Supreme Courtdissenting in the controversial expatriation caseof Trop v. Dulles, 356 US 86 (1958) observed asunder: (US pp. 119-20)‘All power is, in Madison's phrase, “of anencroaching nature”. … Judicial power is notimmune against this human weakness. It alsomust be on guard against encroaching beyondits proper bounds, and not the less so sincethe only restraint upon it is self-restraint.…Rigorous observance of the difference between https://hcservices.ecourts.gov.in/hcservices/ limits of power and wise exercise of power—between questions of authority and questionsof prudence—requires the most alertappreciation of this decisive but subtlerelationship of two concepts that too easilycoalesce. No less does it require adisciplined will to adhere to the difference.It is not easy to stand aloof and allow wantof wisdom to prevail, to disregard one's ownstrongly held view of what is wise in theconduct of affairs. But it is not the businessof this Court to pronounce policy. It mustobserve a fastidious regard for limitations onits own power, and this precludes the Court'sgiving effect to its own notions of what iswise or politic. That self-restraint is of theessence in the observance of the judicialoath, for the Constitution has not authorisedthe judges to sit in judgment on the wisdom ofwhat Congress and the Executive Branch do.’19. When a State action is challenged, thefunction of the court is to examine the action inaccordance with law and to determine whether thelegislature or the executive has acted within thepowers and functions assigned under theConstitution and if not, the court must strikedown the action. While doing so the court mustremain within its self-imposed limits. The courtsits in judgment on the action of a coordinatebranch of the Government. While exercising powerof judicial review of administrative action, thecourt is not an appellate authority. TheConstitution does not permit the court to director advise the executive in matters of policy or tosermonise qua any matter which under theConstitution lies within the sphere of legislatureor executive, provided these authorities do nottransgress their constitutional limits orstatutory powers.”(emphasis supplied)35. In our opinion fixing pay scales by courts byapplying the principle of equal pay for equal work upsetsthe high constitutional principle of separation of powersbetween the three organs of the State. Realising this,this Court has in recent years avoided applying theprinciple of equal pay for equal work, unless there iscomplete and wholesale identity between the two groups https://hcservices.ecourts.gov.in/hcservices/ (and there too the matter should be sent for examinationby an Expert Committee appointed by the Governmentinstead of the court itself granting higher pay)."13. With reference to the second submission based upon D.S.Nakaracase, supra, it must be noted that D.S.Nakara case relates todiscrimination between class of pensioners. The ratio of the saidjudgment came to be considered subsequently by another ConstitutionalBench in Indian Ex-Services League v. Union of India, [1991] 2 SCC104. In paragraph [14], it was observed as follows:"14. D.S.Nakara and others v. Union of India, [1983] 1SCC 305 decision came up for consideration before anotherConstitution Bench recently in Krishena Kumar v. Union ofIndia, [1990] 4 SCC 207. The petitioners in that casewere retired Railway employees who were covered by oropted for the Railway Contributory Provident Fund Scheme.It was held that PF retirees and pension retireesconstitute different classes and it was never held inNakara case that pension retirees and PF retirees formeda homogeneous class, even though pension retirees alonedid constitute a homogeneous class within which anyfurther classification for the purpose of a liberalisedpension scheme was impermissible. It was pointed out thatin Nakara case, it was never required to be decided thatall the retirees for all purposes formed one class and nofurther classification was permissible. We have referredto this decision merely to indicate that anotherConstitution Bench of this Court also has read Nakaracase decision as one of limited application and there isno scope for enlarging the ambit of that decision tocover all claims made by the pension retirees or a demandfor an identical amount of pension to every retiree fromthe same rank irrespective of the date of retirement,even though the reckonable emoluments for the purpose ofcomputation of their pension be different."14. Merely because other public sector undertakings are extendingthe benefit cannot be itself a ground to consider the case of thepetitioner/Union. The petitioner, in the information obtained underthe Right to Information Act, found that for the year 2005-2006 out of48 public sector units, 32 units have made profits and 16 are lossmaking units. Significantly, it is found that the secondrespondent/Civil Supplies Corporation is one of the loss making units.15. Further, it has been stated that the petitioner/Union is anon-representative union, representing a very miniscule minority of https://hcservices.ecourts.gov.in/hcservices/ the employees of the second respondent/Corporation. Even if anyindustrial dispute is raised by the petitioner/Union with reference tothe demand for pension, they will have to establish theirrepresentative capacity before the appropriate Tribunal and only thenthe Tribunal can examine the case for any pensionary benefit beingextended to the workmen. Even in such a dispute the union will haveto establish that the Corporation has got the financial stability tointroduce a pension scheme and that such a scheme is available in thesame region and in similar industries.In view of the above, there is no case made out to entertain awrit petition. Hence, the writ petition stands dismissed. However,there will be no order as to cost. Sd/ Asst.Registrar /true copy/ Sub Asst.RegistrarsasiTo:1.The Principal Secretary to GovernmentDepartment of Co-operation, Food and Consumer Protection, State of Tamil NaduFort St.George, Chennai – 600 009.2. The Managing DirectorTamilnadu Civil Supplies Corporation No.12, Thambusamy Road Kilpauk, Chennai – 600 010.+1cc to Govt. Pleader Sr 48002+1cc to M/s. Sai, Bharath & Ilan, Advocate Sr 47841+1cc to M/s. V.Selvanaayagam, Advocate Sr 48040NR(CO)km/22.8.W.P.No.20390 of 2009