*THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY + Writ Petition Nos.4139 & 28722 of 2010 COMMON JUDGMENT: %02-09-2011 # P.Rama Rao & others ..petitioners And $ State of A.P., rep. by its Principal Secretary, Woman Development, Child Welfare & Disabled Welfare Department, Secretariat, Hyderabad & others ..Respondents !Counsel for the petitioners : Sri V. Sudhakar Reddy, Sri Subba Rao Korrapati ^Counsel for respondents : learned Advocate-General < Gist: > Head Note: Citations: THE HON’BLE MR JUSTICE L. NARASIMHA REDDY Writ Petition Nos.4139 & 28722 of 2010 COMMON JUDGMENT: The A.P. Vikalangula Co-operative Corporation, the 4th respondent herein was established by the Government of Andhra Pradesh, for the welfare and development of Physically Handicapped persons in the State. Units of different categories were established in several parts of the State for the purpose of imparting training or to undertake production, with the participation of physically handicapped persons. The petitioners herein are employees in the institutions, and they are working since last several decades. It is pertinent to mention that the petitioners or most of them, claim to be physically handicapped, in one form or the other. The Government of A.P., in its Women Development, Child Welfare and Disabled Welfare Department, the 1st respondent herein, has the over all control upon the functioning of the 4th respondent. The staff pattern, emoluments of employees are required to be sanctioned or approved by the 1st respondent. The appointment of the employees in the units of the 4th respondent was on consolidated pay. The Government issued G.O.Ms.No.172, Social Welfare (G1) Department, dated 07-07-1987, extending the benefit of Government pay scales to the employees of the 4th respondent. An attempt made by the Government to reorganize the cadre of the 4th respondent, has led to filing of Writ Petitions. As of now, Writ Appeal No.2040 of 2004 is pending before this Court, in relation thereto. The Government revised the pay scales from time to time, i.e. in the years 1993, 1998 and 2003. The benefit thereof was not extended to the petitioners. Several representations were made and writ petitions were also filed before this Court, seeking extension of benefit of revised pay scales. The 4th respondent also submitted proposals in this regard. Ultimately, the 1st respondent issued G.O.Ms.No.24, dated 11-07-2008, directing that the employees of the 4th respondent shall be entitled to the benefit of the pay scales of 1993, 1998 and 2003. A condition was imposed to the effect that the payment of arrears would depend upon the availability of funds with the 4th respondent, and rationalization of the staff, if necessary, by deputing them to other organizations. The 4th respondent, in turn, issued consequential proceedings dated 17-09-2008 for implementation of the orders of the Government, in G.O.Ms.No.24. The petitioners state that though the G.O.Ms.No.24 was issued by the 1st respondent and consequential proceedings were issued, by the 4th respondent, the benefit thereof was not extended to them, at all. It is alleged that, when a demand was made for implementation of the orders, the 4th respondent stopped the payment of salaries from June 2009 onwards, and that on repeated representations, the salaries, without the revision of pay scales, are being paid from November 2009 onwards. The 1st respondent issued a memo dated 12-01-2010 observing that the G.O.Ms.No.24 was issued on the basis of the facts and figures submitted by the then Chairman and Managing Director of the 4th respondent, but it emerged that the ground situation was different, and that it is not possible to extend the benefit of G.O.Ms.No.24, dated 11-07-2008 to the petitioners. This was followed by G.O.Rt.No.204, dated 27-05-2010, through which, the 1st respondent constituted a Committee to conduct a detailed study and to submit a report relating to the staff pattern and pay scales of the employees of the 4th respondent. On the next day, i.e. 28-05-2010, the 1st respondent issued G.O.Rt.No.206, directing that G.O.Ms.No.24 dated 11-07-2008 be kept in abeyance. The petitioners feel aggrieved by the said G.O. The petitioners contend that the 1st respondent has developed a negative attitude towards the employees of the 4th respondent-Corporation in the recent past, and subjected the petitioners to untold hardship. According to them, G.O.Ms.No.24 was issued after prolonged correspondence spread over many years and with the approval of the Finance Department. They plead that the reasons mentioned in the memo dated 12-01-2010 and the impugned G.O.Rt.No.206 are totally untenable and that they are invented to deny the petitioners, of the benefit under G.O.Ms.No.24. It is also stated that the impugned G.O.Rt.No.206, dated 28-05-2010, suffers from procedural infirmities. Separate counter-affidavits are filed on behalf of the respondents 1 to 3, on the one hand, and respondent No.4, on the other hand. The 1st respondent pleads that the financial condition of the 4th respondent is not sound, and that G.O.Ms.No.24 was issued on the basis of a recommendation made by the then Chairman and Managing Director of the 4th respondent Corporation. It is stated that on further verification, it emerged that there did not exist any financial foundation for revision of pay scales, with heavy burden upon the 4th respondent, and accordingly the impugned proceedings or orders were issued. It is also stated that a well-informed decision would be taken after the committee, constituted by the Government, submits its report. The 4th respondent stated in its counter-affidavit that it had no freedom in the matter, and that it has to just implement the decisions, that are taken by the Government from time to time. The learned counsel for the petitioners, learned Advocate- General for respondents 1 to 3 and learned counsel for the 4th respondent have advanced extensive arguments in the lines, referred to above. The 4th respondent is a Corporation, established by the State of Andhra Pradesh for the benefit and welfare of physically handicapped persons. Schemes are framed by it in such a way, that, even to impart training to the physically handicapped persons in various States, the employees, who themselves are physically handicapped, are appointed, to the extent possible. Though the staffing pattern was approved by the Government, its structure was not clear and definite. It appears that appointments are made from time to time, on contractual basis or on consolidated pay. The petitioners were making representations from time to time, seeking extension of the benefit of the pay scales. It was in the year 1987, that the Government issued G.O.Ms.No.172, extending the benefit of pay scales to the petitioners. Three revisions of pay scales took place thereafter, in the years 1993, 1998 and 2003. The benefit thereof was not extended to the petitioners. Several demands were made in this regard. That ultimately resulted in issuance of G.O.Ms.No.24, dated 11-07-2008, wherein the 1st respondent directed that the employees of the 4th respondent- Corporation including the petitioners, are entitled to the benefit of revision of pay scales. As regards the arrears, it was clearly stated that they would be paid, if only there is improvement in the financial condition of the 4th respondent, in the ensuing years. Consequential proceedings were also issued by the 4th respondent, but they were not implemented. A demand made by the petitioners for the benefit under G.O.Ms.No.24, led to the stoppage of salaries in June 2009. The payment of salaries, however, resumed in November 2009. In case the 1st respondent wanted to reverse its decision, contained in G.O.Ms.No.24, it was under obligation to issue notice to the effected parties, and to follow the Business Rules. Government Order in the form of G.O.Ms., is general in its application and would reflect the policy decision. It can be nullified or modified through similar exercise. In the instant case, the 1st respondent issued a memo, indicating that orders in G.O.Ms.No.24 cannot be implemented. It is just ununderstandable as to how a full-fledged government order can be nullified by a memo. Thereafter, the impugned Government Order, which is G.O.Rt.No.206, dated 28-05-2010, as distinguished from G.O.Ms., was issued, keeping the G.O.Ms.No.24, dated 11-07-2008 in abeyance, on the pretext that a Committee was constituted to study the various aspects of the staffing pattern and pay scales in the 4th respondent. The whole exercise reflected a panic reaction from the 1st respondent, for the demand made by the petitioners, for implementation of its earlier decision. In the process, the principles of natural justices were violated and rights, that have accrued to the petitioners, have been trampled in utter violation of the known principles of law. The excuse pleaded in the impugned G.O., is that the financial condition of the 4th respondent, was not properly presented by the then Chairman and Managing Director. If that is the only reason, it would reflect upon the gullibility of the 1st respondent. Prolonged correspondence ensued before the G.O. came to be issued. Further, the 1st respondent itself understood from the representation of the 4th respondent, that the budget allocation made at the relevant point of time would be sufficient to meet the additional burden on account of revision of pay scales, prospectively. Mention of the profits and mobilization of funds by the 4th respondent was made, in the context of payment of arrears. The relevant portion of the G.O. reads: “In the letter 7th read above, the Managing Director, APVCC, Hyderabad, has requested the Govt. through the Director, Disabled Welfare, Hyderabad, stating that if the Revised Pay Scales 1993 is extended to the employees declared surplus and the Revised Pay Scales 1998 & 2003 to all the employees of APVCC are extended, the Corporation could meet the expenditure within its own budget. However, arrears, arising out of the above fixation, the issue would be considered as and when necessary budgetary support is received from the Government or by meeting the expenditure from the savings made by the Corporation”. The dispute was not about payment of arrears, but as to the very implementation of the pay scales. It is rather unfortunate that the 1st respondent proceeded as though the 4th respondent has represented to it, that the burden that arises on account of revision of pay scales would be met through the profits and funds that can be mobilized by the 4th respondent. The second aspect of the matter is that it is not a case where the 4th respondent has taken a decision and the 1st respondent is reviewing it, or that the 1st respondent has taken a decision, without reference to other important departments. A perusal of G.O.Ms.No.24, dated 11-07-2008 discloses that it was issued after thorough verification of the case and with the concurrence of the Finance Department. It is just unthinkable that the Finance Department had accorded its approval without being sure about the financial implications or the burden upon the Government. In case any contingency or incongruity has arisen as to the financial implications, on account of the implementation of G.O.Ms.No.24, it is only the Finance Department, that ought to have raised objection. The record does not disclose that any objection has come from the Finance Department. The 1st respondent felt it free to reverse its own decision, as it liked, without reference to an important department, like, the Finance Department, of State Government. Further, it ought to have heard the immediately effected persons before changing its decision. No such steps were taken. The whole exercise is untenable in law. It is violative of principles of natural justice. It also reflects arbitrary approach, and deviation from the Business Rules of the Government. Though no objection can be raised for appointment of a Committee through G.O.Rt.No.206, dated 28-05-2010, the decision to keep the G.O.Ms.No.24, dated 11-07-2008, in abeyance, cannot be sustained in law. Therefore, the writ petitions are allowed, and a) G.O.Rt.No.206 dated 28-05-2010 is set aside; b) respondents 1 and 4 shall be under obligation to implement G.O.Ms.No.24, dated 11-07-2008, with effect from October, 2011; c) the issue relating to payment of arrears from the date of the G.O., till October, 2011, shall be decided by the 1st respondent after the report is submitted by the Committee, constituted under G.O.Rt.No.204, dated 27-05-2010; and d) the exercise under clause (c) shall be completed within a period of three months from the date of receipt of a copy of this judgment. There shall be no order as to costs. _______________________ L. NARASIMHA REDDY, J. Dt.02-09-2011. Note: L.R. copy to be marked. (B/O) KO