IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP (T) No. 13858/2008 alongwith CWP (T) Nos. 13977, 14083 and 15032 of 2008 Decided on:5.7. 2010 _____________________________________________ 1. CWP (T) No. 13858/2008 L.R. Verma. …Petitioner. Versus State of Himachal Pradesh and others. …Respondents. 2. CWP (T) No. 13977/2008 Chaman Lal. …Petitioner. Versus State of Himachal Pradesh and others. …Respondents. 3. CWP (T) No. 14083/2008 Kuldeep Kumar. …Petitioner. Versus State of Himachal Pradesh and others. …Respondents. 4. CWP (T) No. 15032/2008 Raj Kumar Thakur. …Petitioner. Versus State of Himachal Pradesh and others. …Respondents. ________________________________________________________ Coram: Hon’ble Mr. Justice Rajiv Sharma, Judge. Whether approved for reporting?1 Yes For the petitioner(s) : Mr. S.D. Gill, Advocate. (in all the petitions). For the Respondents: Mr. P.M. Negi, Dy. Advocate General. (in all the petitions). 1 Whether reporters of the local papers may be allowed to see the judgment? yes 2 _____________________________________________________ Justice Rajiv Sharma, Judge (oral). Since common questions of law and facts are involved in all these petitions, the same are taken up together for hearing and are being disposed of by a common judgment. 2. Material facts necessary for the adjudication of these petitions are that the petitioners are working as Instructors in Industrial Training Institutes in the State of Himachal Pradesh. The pay scales of Instructors were revised on 20.10.1976 and they were placed in the pay scale of Rs. 225-500 with effect from 6.4.1976. On the basis of Second Pay Commission Report, petitioners were placed in the pay scale of Rs. 620-1200 with effect from 1.1.1978. The Third Pay Commission was implemented by the State of Punjab as well as by the State of Himachal Pradesh and the petitioners were granted the pay scale of Rs. 1500-2640. The Instructors serving in the State of Punjab made representations seeking higher pay scale vis-à-vis Junior Engineers serving in the State of Punjab. The State of Punjab granted the pay scale of Rs. 1800-3200 to 50% of the cadre strength of Instructors in the Industrial Training Institutes with effect from 1.1.1986. State of Himachal Pradesh also granted the pay scale of Rs. 1800-3200 to 50% of the cadre strength, however, the petitioners were not granted the pay scale of Rs. 1800-3200. The incumbents serving as Instructors in the State of Punjab challenged the decision of the State of Punjab in the Punjab and Haryana High Court by way of CWP No. 1748/1993, Gurdev Singh versus State 3 of Punjab and others. The CWP No. 1748/1993 was allowed by the Punjab and Haryana High Court on 28.11.1995. The operative portion of the judgment reads thus: “25. In view of the above facts, we allow this writ petition and quash Annexure P-9 and Annexure P-11 qua the petitioners and direct the respondents to pay the petitioners the pay in the pay scale of Rs. 1800-3200 with effect from 1.1.1986.” State of Punjab preferred an SLP against the judgment dated 28.11.1995. The same was dismissed by the Hon’ble Supreme Court on 14.3.1997. Thereafter Punjab Government released pay scale of Rs. 1800-3200 to all the Instructors. Petitioners’ Association also made a representation to the Chief Secretary to the Government of Himachal Pradesh seeking pay scale of Rs. 1800-3200 at par with the State of Punjab with effect from 1.1.1996 on 6.6.1998. The Director Technical Education called upon the Commissioner-cum-Secretary (Technical Education) to issue notification for the grant of pay scale of Rs. 1800-3200 in favour of Craft Instructors at the earliest. The case of the petitioners was again taken up by the Director Technical Education with the Principal Secretary (Technical Education) on 6.4.2004. The Association of the Craft Instructors approached the erstwhile Himachal Pradesh Administrative Tribunal by way of OA No.1688/1999 titled Raj Kumar Thakur versus State of Himachal Pradesh and others for the redressal of the grievance of the members of the Association. The same was decided by the Tribunal on 14.9.2000 and the respondents were directed to decide 4 the issue on or before 31.12.2000. Thereafter the petitioners filed contempt petition. The stand of the respondents in the contempt petition was that the State was not bound to follow the pay scales granted in Punjab. The contempt petition was disposed of by the Tribunal on 15.10.2001. Thereafter Craft Instructors filed another original application No. 3081/2001 titled L.R. Verma versus State of Himachal Pradesh and others. The matter was also placed before the Council of Ministers and after taking into consideration various facts of the case, including huge financial implications, the following was approved: “Approved grant of pay scale with effect from 1.4.2005 subject to the condition that the Craft Instructors Association shall give in writing that they shall forego any arrears on this account. They shall also withdraw the petition filed by them in the SAT. AD shall issue notification/order only thereafter.” In these circumstances OA No.3081/2001 was withdrawn on 5.7.2005. Thereafter the Law Department prepared copy of draft affidavit and the same was supplied to the Director Technical Education, Sundernagar for necessary action on 17.5.2006. Director Technical Education circulated the same amongst all the concerned vide letter dated 28.5.2006. Mr. S.D. Gill has strenuously argued that his clients are entitled to pay scale of Rs. 1800-3200 with effect from 1.1.1996 on the basis of judgment rendered by the Punjab and Haryana High Court in CWP No. 1748/1993 decided on 28.11.1995. He then contended that despite the State Government agreeing to grant the pay scale of Rs. 1800-3200, as approved by the Cabinet, the pay 5 scale of Rs. 1800-3200 has not been released in favour of his clients till date. Mr. P.M. Negi has vehemently argued that State Government though has taken a decision but the petitioners have not furnished the necessary affidavits foregoing their arrears. He also contended that the pay scales cannot be granted to the employees of the State of Himachal Pradesh on the basis of the judgment rendered by the Punjab and Haryana High Court. 4. I have heard the learned counsel for the parties and have perused the pleadings carefully. Petitioners were granted the pay scale of Rs. 620-1200 with effect from 1.1.1978. The same was revised to Rs. 1500-2640 with effect from 1.1.1986. Their counterparts in the State of Punjab were paid pay scale of Rs. 1500-2640 with effect from 1.1.1986, however, they made representation seeking higher pay scale. State of Punjab took a conscious decision to grant pay scale of Rs. 1800- 3200. However, it was restricted to 50% of the cadre strength. Pay scale of Rs. 1800-3200 was also released by the State of Himachal Pradesh, however, it was restricted to 50% of the cadre strength. Petitioners were left out. The Instructors working in various Industrial Training Institutes in the Punjab State assailed the Government decision by filing CWP No. 1748/1993. The CWP No. 1748/1993 was allowed by the Punjab and Haryana High Court on 28.11.1995. State of Punjab preferred an SLP against the judgment dated 28.11.1995, which was dismissed by the Hon’ble Supreme Court on 14.3.1997. Thereafter Punjab Government 6 decided to grant pay scale of Rs. 1800-3200 to all the Instructors. The Director Technical Education recommended the case of the petitioners on 20.10.2000, which was followed by another letter dated 6.4.2004. In the meantime, the members of the Association also filed OA No. 1688/1999. The Tribunal directed the respondents to decide the issue on or before 31.12.2000. The decision was not taken by the respondent-State which led to filing of the contempt petition No. 9/2001, which was also disposed of on 15.10.2001. When no decision was taken by the State Government, one of the petitioners, namely, Sh. L.R. Verma filed OA No. 3081/2001 before the erstwhile Tribunal. The matter was placed before the Cabinet for releasing pay scale of Rs. 1800-3200 to the petitioners. However, a rider was put while granting the approval by the Cabinet that the petitioners will forego arrears and they shall withdraw the petition filed by them before the Tribunal. In sequel thereto, OA No. 3081/2001 was withdrawn on 5.7.2001 with liberty to file fresh application on the same cause of action. Case of the respondent-State is that Raj Kumar Thakur and Raj Kumar Verma, President and Secretary of the Industrial Training Institutes employees furnished affidavit on behalf of the members of the Association. The affidavit was got examined from the Law Department. The Law Department advised the Department to procure individual affidavits of the employees. Thereafter the Law Department vetted the affidavit and sent the copy of the same to the Department on 17.5.2006. Thereafter the Director circulated the same amongst all the concerned on 27.5.2006, however, the 7 fact of the matter is that till date the pay scale of Rs. 1800-3200 has not been released to the petitioners. Mr. P.M. Negi has argued that the State is not bound to release the pay scales on the basis of the judgment rendered by the Punjab and Haryana High Court. It is not in dispute that the State of Himachal Pradesh follows Punjab pattern as far as releasing of higher pay scale is concerned. In the instant case, the State of Punjab has granted pay scale of Rs. 1800-3200 to its employees initially by restricting it to 50% of the cadre strength. The decision was assailed before the Punjab and Haryana High Court. Punjab and Haryana High Court while rendering the judgment in CWP No. 1748/1993 came to the conclusion that the petitioners were entitled to pay scale of Rs. 1800-3200. The SLP preferred by the State of Punjab stood dismissed on 14.3.1997. Thereafter pay scale of Rs. 1800-3200 was granted to all the Instructors serving in the Industrial Training Institutes throughout the State of Punjab. Once the decision has been taken by the Punjab Government to grant pay scale of Rs. 1800-3200 to all the Instructors serving in the State of Punjab, the same was bound to be followed by the respondent-State. In other words, once the Punjab and Haryana High Court had allowed the pay scale of Rs. 1800-3200 to all the Instructors and was sanctioned by the State of Punjab, the same stood automatically applicable to the employees serving in the State of Himachal Pradesh. This question is no more res integra as per the judgment rendered by a Division Bench of this Court in Rattan Lal and 8 others versus The State of Himachal Pradesh and others, CWP No. 151/2004 decided on 17.11.2008. The Division Bench has held as under: “4. In their reply filed to the original application, copy whereof is Annexure P-15, respondents categorically stated in para 3 that since Punjab Government had not taken any policy decision to grant the further revised pay scale w.e.f. 1.1.1986, the petitioners were not entitled to the said pay scale w.e.f. 1.1.1986. This reply on behalf of the respondents is indicative of the fact that had the Punjab Government taken a decision to give the further revised pay scale w.e.f. 1.1.1986, the respondents would have also granted the same scale to its employees, i.e. the petitioners. No doubt, the Punjab Government took the decision to give this further revised pay scale to its employees w.e.f. 3.11.1989 and so the respondents also released this scale in favour of the petitioners and made it effective only from 3.11.1989 following the Punjab Government Notification, but what the learned tribunal has omitted to take notice is the decision of the Punjab Government which was challenged by the employees of Punjab Roadways by filing a writ petition in the High Court and the High Court directed vide Annexure P-6 that the further revised pay scale be given w.e.f. 1.1.1986, the date from which the Pay Commission’s recommendations had been made applicable in respect of the other employees of the State Government. That means the decision of the Punjab Government stood modified by the judgment of the Punjab and Haryana High Court, copy Annexure P-6, at least in respect of those employees of the Punjab Roadways who had filed the writ petition in which the said judgment was rendered. Therefore, the petitioners, on the basis of the aforesaid judgment of the Punjab and Haryana High Court, which had the effect of modifying the Punjab Government decision, ought to have been allowed further revised pay scale w.e.f. 1.1.1986 by the State Administrative Tribunal. The learned Tribunal’s order is thus contrary to factual and legal 9 position and is liable to be set aside. Consequently, the writ petition is allowed, impugned order of the learned tribunal is set aside and respondents No. 2 & 3 are ordered to give the further revised pay scale of Rs. 950-1800 with initial start of Rs.1,000/- to the petitioners w.e.f. 1.1.1986. Six months’ time is given to respondents No. 2 and 3 to implement this direction. No order as to costs.” It is evident from Annexures A-15, A-16, A-17, A-18, A-19 and A-20 that similar situate employees have been given the benefits of revised pay scales. The present case is required to be considered from another angle. State Government has already taken a decision to grant pay scale of Rs. 1800-3200 to the petitioners and similarly situate persons on the basis of approval granted by the Cabinet. However, the State Government had insisted that the incumbents are required to forego the arrears. It was on that basis OA No. 3081/2001 was withdrawn on 5.7.2005. The President of the Association, Sh. Raj Kumar has undertaken on behalf of the members of the Association to forego the arrears with effect from 1.1.1986, if the State Government grants pay scale of Rs. 1800- 3200 and Rs. 5800-9200 to the Craft Instructors working in the Technical Education Department. The affidavit was sworn on 8.7.2005, however, this affidavit was not approved by the Law Department and new affidavit was vetted. The Director Technical Education circulated form of affidavit to be filled in by all the members of the Association seeking revised pay scale on Punjab pattern with undertaking to forego the arrears on this count and thereafter the Director Technical Education on 27.12.2005 sought 10 further information from the President and Secretary of the Association. The Court is of the considered view that once a conscious decision had been taken by the State Government to release pay scale of Rs. 1800-3200 to the petitioners and similarly situate persons, no pre-condition was to be imposed by insisting that the members of the petitioners’ association were to forego their arrears. The petitioners have legal right to get pay scale of Rs. 1800-3200 on Punjab Pattern. State Government was required to follow the decision of the Punjab Government on the basis of judgment of the Punjab and Haryana High Court dated 28.11.1995. Earlier recommendations made by the Punjab Government to restrict pay scale of Rs. 1800-3200 to 50% of the cadre strength stood automatically adopted and was made applicable to the members of the petitioners Association. Respondent-State has tried to take advantage of its superior bargaining position vis-à-vis the petitioners. Petitioners and similarly situate persons are being coerced to file affidavit to forego their arrears in case they wanted pay scale of Rs. 1800-3200 with effect from 1.1.1986 and Rs. 5800-9200 with effect from 1.1.1996. The question whether the State Government could enforce the employees to furnish affidavit foregoing their arrears of salary or other monetary benefits has been gone into by this Court in Suresh Rana and others versus State of Himachal and others, CWP (T) No. 14084/2008 decided on 20.4.2010. This Court has 11 taken into consideration the following judgments rendered by the Hon’ble Supreme Court: Their Lordships of the Hon’ble Supreme Court in Nar Singh Pal versus Union of India and others, (2000) 3 Supreme Court Cases 588 have held as under: “13. The Tribunal as also the High Court, both appear to have been moved by the fact that the appellant had encashed the cheque through which retrenchment compensation was paid to him. They intended to say that once retrenchment compensation was accepted by the appellant, the chapter stands closed and it is no longer open to the appellant to challenge his retrenchment. Thus, we are constrained to observe, was wholly erroneous and was not the correct approach. The appellant was a casual labour who had attained the 'temporary' status after having put in ten years' of service. Like any other employee, he had to sustain himself, or may be, his family members on the wages he got. On the termination of his services, there was no hope left for payment of salary in future. The retrenchment compensation paid to him, which was only a meagre amount of Rs.6,350/-. was utilised by him to sustain himself. This does not mean that he had surrendered all his constitutional rights in favour of the respondents. Fundamental Rights under the Constitution cannot be bartered away. They cannot be compromised nor can there be any esstoppel against the exercise of Fundamntal Rights available under the Constitution. As pointed out earlier, the termination of the appellant from service was punitive in nature and was in violation of the principles of natural justice and his constitutional rights. Such an order cannot be sustained.” The Apex Court in Central Inland Water Transport Corporation Limited and another versus Brojo Nath Ganguly and another, (1986) 3 SCC 156 have held that concepts which are 12 unconscionable, arbitrary and opposed to public policy are void. Their Lordships have further held that such like agreements would be violative of Articles 14, 16, 38, 39 and 49 of the Constitution of India. Their Lordships have further held that unconscionable bargain or contract is one which is irreconcilable with what is right or reasonable or the terms of which are so unfair and unreasonable that they shock the conscience of the Court. Their Lordships have held as under: “76. Under which head would an unconscionable bargain fall? If it falls under the head of undue influence, it would be voidable but if it falls under the head of being opposed to public policy, it would be void. No case of the type before us appears to have fallen for decision under the law of contracts before any court in India nor has any case on all fours of a Court in any other country been pointed out to us. The word "unconscionable" is defined in the Shorter Oxford English Dictionary, Third Edition, Volume II, page 2288, when used with reference to actions. etc. as "showing no regard for conscience; irreconcilable with what is right or reasonable". An unconscionable bargain would, therefore, be one which is irreconcilable with what is right or reasonable. 77. Although certain types of contracts were illegal or void, as the case may be, at Common Law, for instance, those contrary to public policy or to commit a legal wrong such as a crime or a tort, the general rule was of freedom of contract. This rule was given full play in the nineteenth century on the ground that the parties were the best judges of their own interests, and if they freely and voluntarily entered into a contract, the only function of the Court was to enforce it. It was considered immaterial that one party was economically in a stronger bargaining position than the other; and if such a party introduced qualifications and exceptions to his liability in clauses which are today known as "exemption clauses" and the other party accepted them, then full effect would be 13 given to what the parties agreed. Equity, however, interfered in many cases of harsh or unconscionable bargains, such as, in the law relating to penalties, forfeitures and mortgages. It also interfered to set aside harsh or unconscionable contracts for salvage services rendered to a vessel in distress, or unconscionable contracts with expectant heirs in which a person, usually a money-lender. gave ready cash to the heir in return for the property which he expects to inherit and thus to get such property at a gross undervalue. It also interfered with harsh or unconscionable contracts entered into with poor and ignorant persons who had not received independent advice (See Chitty on Contracts, Twenty-fifth Edition, Volume I, paragraphs 4 and 516). 78. Legislation has also interfered in many cases to prevent one party to a contract from taking undue or unfair advantage of the other. Instances of this type of legislation are usury laws, debt relief laws and laws regulating the hours of work and conditions of service of workmen and their unfair discharge from service, and control orders directing a party to sell a particular essential commodity to another. 79. In this connection. it is useful to note what Chitty has to say about the old ideas of freedom of contract in modern times. The relevant passages are to be found in Chitty on Contracts, Twenty-fifth Edition, Volume I, in paragraph 4, and are as follows : "These ideas have to a large extent lost their appeal today. 'Freedom of contract,' it has been said, 'is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the economic interests of the community at large.' Freedom of contract is of little value when one party has no alternative between accepting a set of terms proposed by the other or doing without the goods or services offered. Many contracts entered into by public utility undertakings and others take the form of a set of terms fixed in advance by one party and not open to discussion by the, other. These are called contracts adhesion' by French lawyers. Traders frequently contract, not on individually negotiated terms, but 14 on those contained in a standard form of contract settled by a trade association. And the terms of an employee's contract of employment may be determined by agreement between his trade union and his employer, or by a statutory scheme of employment. Such transactions are nevertheless contracts notwithstanding that freedom of contract is to a great extent lacking. Where freedom of contract is absent, the disadvantages to consumers or members of the public have to some extent been offset by administrative procedures for consultation, and by legislation. Many statutes introduce terms into contracts which the parties are forbidden to exclude, or declare that certain provisions in a contract shall be void. And the Courts have developed a number of devices for refusing to implement exemption clauses imposed by the economically stronger party on the weaker, although they have not recognised in themselves any general power (except by statute) to declare broadly that an exemption clause will not be enforced unless it is reasonable. Again, more recently, certain of the judges appear to have recognised the possibility of relief from contractual obligations on the ground of 'inequality of bargaining power." What the French call "contracts dadhesion", the American call "adhesion contracts" or "contracts of adhesion". An "adhesion contract" is defined in Black's Law Dictionary, Fifth Edition, at page 38 as follows: 'Adhesion contract'. Standardized contract form offered to consumers of goods and services on essentially 'take it or leave it' basis without affording consumer realistic opportunity to bargain and under such conditions that consumer cannot obtain desired product' or services except by acquiescing in form contract. Distinctive feature of adhesion contract, is that weaker party has no realistic choice as to its terms. Not every such contract is unconscionable." 81. The position under the American Law is stated in "Reinstatement of the Law Second" as adopted and promulgated by the American Law Institute, Volume II which 15 deals with the law of contracts, in section 208 at page 107, as follows: "§ 208. Unconscionable Contract or Term If a contract or term thereof is unconscionable at the time the contract is made a Court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result." In the-Comments given under that section it is stated at page 107: "Like the obligation of good faith