IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 20.7.2011 CORAM: THE HONOURABLE MR.JUSTICE ELIPE DHARMA RAO AND THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN Writ Appeal No.1431 of 2006 The Workmen represented by The Secretary, Southern Structurals Staff Union, Pattabiram, Chennai-600072. ... Appellant Vs. 1.The Management of Southern Structurals Limited, rep.by its Managing Director, M.T.H.Road, Pattabiram, Chennai-600072. 2.The Presiding Officer, Industrial Tribunal, Chennai. 3.The State of Tamil Nadu, rep.by its Secretary, Industries Department, Fort St.George, Chennai-600009. ... Respondents * * * Writ Appeal preferred under clause 15 of the Letters Patent, as against the order of the learned single Judge of this Court dated 27.9.2006, made in W.P.No.17055 of 1997. The Writ Petition presented under Article 226 of the constitution of India for the issuance of writ of Certiorari calling for the records of the 1st respondent in ID No.50 of 1993 and quash the award passed by the respondent on 25.2.1997 as illegal and invalid. https://hcservices.ecourts.gov.in/hcservices/ * * * For appellant : Mr.N.G.R.Prasad for M/s.Row & Reddy For R.1 Mrs.C.K.Vishnu Priya, AGP For R.3 : Mrs.Malarvizhi Udayakumar, Spl.G.P. * * * JUDGMENT ELIPE DHARMA RAO, J. Appellants are the workmen of the first respondent, which is a Government Company. The appellants have raised an Industrial Dispute before the Industrial Tribunal claiming parity in pay and other benefits, with other State Government Undertakings and Government servants, with effect from 1.6.1988. 2. Their contention was that when compared with similar type of undertakings of the State of Tamil Nadu, prevailing wage scale in the appellant company was the lowest and the Board of Directors of the appellant company passed an order on 28.10.1992 to the effect that their workmen will be entitled to the benefits of V Pay Commission on and from 1.1.1991 instead of paying arrears from 1.6.1988, which they are bound to pay automatically; that the workers have been paid the ad hoc payments periodically; that though the Management has agreed to meet the additional financial burden, the same has not been implemented and therefore, they have requested to implement the V Pay Commission Recommendations from 1.6.1988. This has been objected to by the Management by filing a counter to the effect that it is a sick Government company and requested to dismiss the claim of the workmen. 3. The Industrial Tribunal favoured the workmen partly, passing an Award to the effect that the demand of the workmen for revision of pay, Dearness Allowance, House Rent Allowance and City Compensatory Allowance w.e.f. 1.1.1991 is justified and that their demand for the implementation of the pay revision w.e.f. 1.6.1988 on par with other State Government Undertakings is not justified. 4. Aggrieved by the said Award of the Tribunal, the Management has filed W.P.No.17055 of 1997 and a learned single Judge of this Court, relying on the judgments of the Honourable Apex Court to the effect that the employees of the 'Government Company' are not 'Government Servants' and cannot claim any equality with the Government servants, has set aside the Award of the Tribunal. This order of the learned single Judge is under challenge in this Writ Appeal at the instance of the Workmen. https://hcservices.ecourts.gov.in/hcservices/ 5. It has been contended on behalf of the appellant that the Management, having agreed under clause (1) of the settlement dated 22.2.1995, under Section 18(1) of the Industrial Disputes Act, to implement the Award of the Tribunal, in case it went in favour of the workmen, was not justified in challenging the award. It has also been their contention that the other Public Sector Units have extended the benefits to their workers and the respondent Management had already granted the pay benefits to their officers from 1.9.1992 though all of them were not Government servants. 6. On behalf of the Management, it has been reiterated that it is a 'sick company' and that all the aspects have been properly analysed by the learned single Judge and therefore, no interference into the same by this Court is necessary and would pray to dismiss this writ appeal. 7. On a perusal of the entire materials placed, the undisputed fact is that the first respondent/Management is a 'Government Company' and such a Government Company remains distinct from the Government and the materials on record would show that the financial position of the Management company was going from bad to worse and all the measures taken by the company, did not bear any fruitful result. The Management has been running in huge losses for many years. During the period 9.7.1992 and 27.1.1998, the first respondent Management was the subject matter of the proceedings before the Board for Industrial and Financial Reconstruction (BIFR) and a Rehabilitation Scheme was framed on 27.1.1998, but, however, on 23.2.2002, BIFR declared the said rehabilitation scheme as 'failed' and now it has been declared a 'sick company' and has also been wound up. In these circumstances, there is every justification in the contention of the respondent Management that it can, no longer, bear any more abrasion to their financial condition. 8. In A.K.BINDAL AND ANOTHER vs. UNION OF INDIA AND OTHERS [(2003) 5 SCC 163], the Honourable Apex Court has categorically held that 'the Government company are not civil servants and so are not entitled to the protection afforded by Article 311 of the Constitution'. It has also been observed in this judgment that 'being employees of the companies, it is the responsibility of the companies to pay them salary and if the company is sustaining losses continuously over a period and does not have the financial capacity to revise or enhance the pay scale, the petitioners cannot claim any legal right to ask for a direction to the Central Government to meet the additional expenditure which may be incurred on account of revision of pay scales.' This position has been reiterated by the Honourable Apex Court in STATE OF U.P. vs. UPTRON EMPLOYEES' UNION, CMD [(2006) 5 SCC 319], by holding that 'in respect of a sick industrial company, even if it be a subsidiary of a government company, there is no legal obligation cast upon the State Government to https://hcservices.ecourts.gov.in/hcservices/ pay the wages due to the workmen.' 9. In G.O.Ms.No.200, Finance (BPE) Department, dated 6.5.1998, the Government has framed guidelines, while issuing orders regarding applicability of the V Central Pay Commission recommendations to the Sate owned Corporations/Boards. In these guidelines, it has been clearly mentioned that pay revision to be effected only after giving due care and caution to the financial condition of the Corporation/Board and the concerned Board of Directors have to analyse the financial implications with reference to the ability of the Public Sector Undertakings/Boards. 10. With regard to the contention of the appellant/workmen that the Management, having agreed under clause (1) of the settlement dated 22.2.1995, under Section 18(1) of the Industrial Disputes Act, to implement the Award of the Tribunal, in case it went in favour of the workmen, was not justified in challenging the award of the Tribunal, we feel it appropriate to extract the said clause of the Settlement, which reads as under: "The employer and Union have mutually agreed for increase in salary and other benefits for a period of six years (01.04.1990 to 31.03.1996) without prejudice to the Industrial Dispute pending before Industrial Tribunal being ID 50/93 irrespective of the outcome of the Industrial Dispute which is now pending before Industrial Tribunal at a later date. In case the finality of the award in the pending dispute is passed granting over and above this settlement the same as a court order will be implemented; but in the event the award being less favourable than what is paid upon by the employer, still, the benefits extended herein will be continued as per the terms of this settlement...." 11. A reading of this clause of the settlement leave no doubt in anybody's mind that what has been agreed by the Management, to implement, is the 'finality of the award' and not mere 'award' of the Tribunal. Therefore, without going into the point as to whether the terms of any agreement could be against the legal rights and remedies of the parties, enshrined under law of the land, we have no hesitation to hold that the Management has not committed any breach of terms of the settlement, as has been tried to be impressed on us by the appellant/workmen. 12. The other factor to be pointed out by us is that even in the above extracted settlement, the Management is gracious enough to agree that 'in case the finality of the award in the pending dispute is passed granting over and above this settlement the same as a court order will be implemented; but in the event the award being less favourable than what https://hcservices.ecourts.gov.in/hcservices/ is paid upon by the employer, still, the benefits extended herein will be continued as per the terms of this settlement'. The interest of the workers has very well been protected by the Management by the above extracted settlement, which shows the genuineness of the Management and no ill-motives can be attributed to the Management in not heeding to the request of the workmen to grant the benefits of the V Pay Commission. 13. Even with regard to the contention of the appellants that the Management has already extended the benefits to their Officers, we find no merit in view of the explanation offered on the part of the Management that the officers of the Management were granted an increase in pay in the year 1983 and the next and the only increase was granted to them in the year 1992, but the workmen and the staff of the Management were granted increase in wages by bilateral settlements in the years 1984, 1987, 1990, 1993 and 1996 respectively. 14. The learned single Judge has properly analysed the facts and circumstances of the case in their proper perspective and we find no reason to interfere with the same. Accordingly, this writ appeal is dismissed. No costs. Sd/ Deputy Registrar /true copy/ Sub Asst.Registrar Rao To 1.The Presiding Officer, Industrial Tribunal, Chennai. 2.The Secretary,State of Tamil Nadu, Industries Department, Fort St.George, Chennai-600009 +1cc to M/s. Row & Reddy,Advocates Sr 44342 +1cc to Govt. Pleader Sr 44423 RS(CO) km/29.7. W.A.No.1431/2006 https://hcservices.ecourts.gov.in/hcservices/