Case: Eastern Coalfields Ltd. and Ors Vs. Prativa Biswas and Ors

6. It is apparent from the aforesaid fixation that the basic salary had been reduced to Rs. 1834.00 as on 1.1.1987, whereas, the basic salary was Rs. 1950/- as on 31.12.86; it was by way of adding the dearness allowance and bonus, that the total emoluments added up to be Rs. 2236.63, whereas, the earlier drawn salary inclusive of dearness allowance was Rs. 2028/-; but the fact remains, that basic salary had been fixed on a lower side. It was clearly in contravention of the order passed by the Single Bench, in the previous Writ Application, on 29.8.2002.Thereafter, the Respondents had preferred fresh writ petition, and the Single Bench dismissed the same. However, the Division Bench has allowed the appeal preferred by the employees, and hence passed the following order:The Respondent authorities failed to appreciate that the optees including the Appellants/writ Petitioners herein did not exercise option of absorption in the Coal companies notwithstanding the fact that their existing service benefits including the pensionary benefits might be affected ultimately. The Respondent authorities herein all through represented before the optees that they will not suffer any prejudice with regard to their service benefits. Therefore, by reducing the basic pay of the optees, namely the Appellants herein, the Respondent authorities have acted in breach of the specific assurance given to the optees before exercising option.For the aforementioned reasons, we cannot approve the decisions of the learned Single Judge by affirming the judgment and order under appeal and the same are, therefore, set aside.The Respondent authorities herein are directed to refix the scale of pay of the writ Petitioners/Appellants without reducing the basic pay with retrospective effect from the date of their joining the Coal companies after exercising option and also pay the admissible financial benefits including the arrears. The aforesaid exercise should be done by the concerned Respondents at an early date but positively within a period of four weeks from the date of communication of this order.With the aforesaid directions, this appeal stands allowed.

Court's reasoning:
10. It was clearly indicated that CIL would ensure, that the fitment that was offered would not entail any drop in employees total emoluments. Emoluments are different than the basic salary. Fitment in the pay scale was not to entail any drop in total emoluments on absorption. Protection of basic pay is different connotation than the other emoluments that are paid. Even the emoluments were to be protected as decided in the aforesaid meeting.11. Coming to the option form in which options were invited on 24.12.1986 which gave two options; the first option was an option to be absorbed in the companys pay scales and terms and conditions, and Anr. option was to be absorbed in the company but retention of the government pay scales and revision in the ongoing pay scales and service conditions including pensionary benefits12. It is apparent from the option No. 1 that the employees who opt for the companys pay scales, terms and conditions, will continue to draw the same pay and allowance as admissible to them under the 3rd Pay Commission till 31.12.1985 and thereafter the 4th Pay Commission till 31st December, 1986 or subsequent date from which the revision of pay scales for the Coal Mining Industry takes place. Mention of a subsequent date for revision of pay scales for the Coal Mining Industry clearly indicates that even when the option was exercised to be absorbed in the companys pay scales, the pay which was drawn earlier was required to be protected till revision. However, the basic pay was to be protected in the revised pay scales from 1.1.1987 or from the subsequent date from which general revision takes place for the coal-mining workers. We are concerned in the instant case with the fitment on absorption. As per option No. 1 Clause (b), the basic salary that was being drawn clearly had to be protected, when the option for absorption in companys pay scales had been applied for. When we consider the emolument part also, a separate protection was given in the Option No. 1 itself, in clause(e), i.e. that the total emoluments which were being drawn by such incumbents, as on 31.12.1986 would, in any case, be protected, and that they would be placed in the companys appropriate pay scales/grades. So, there was a dual protection, one for the basic salary, and Anr. for the emoluments. The ECL has wrongly confused both the issues by overall taking the fixation by the inclusion of the emoluments. Salary was required to be protected, as well as the total emoluments that were being drawn; both could not have been reduced than what was being drawn as on 31.12.1986. Though we are not concerned with Option No. 2, such protection was available on continuance in the government pay scale.13. The Office Order dated 9.1.1987 has also been referred to on behalf the employer with respect to the terms and conditions of service in the subsidiaries of CIL in regard to the replacement of existing terms & conditions of services of Coal Mines Welfare Organisation. There was a clarification made with respect to Option No. 2 with that we are not concerned. Thus, wrong reliance placed on Option No. 2 resulted in the observation made by the single Bench that protection was only provided for the total emoluments of the employees and that shall be protected at the time of the re-fixation of the pay in the revised corresponding pay under NCWA-IV with effect from 1.1.1987. As already mentioned that Option No. 1 had been exercised in the instant case. Even in Option No. 2 basic pay as well as the emoluments continued to be as drawn.14. As a matter of fact, in the instant case, we need not have dilated on various issues as the matter stood concluded by the judgment and order passed by the single Bench in the previous round of litigation. The Single Bench vide order dated 26.08.2002 clearly ordered that the pay could not have been reduced as pay protection was assured to them and shortfall be made good if needed by way of personal adjustment.15. When the pay scales were converted to and paid in the Coal India Limited, Respondents pay drawn could not have been reduced, inasmuch as pay protection had been assured to them and in view of aforesaid order that attained finality and pay fixation was to be made in the manner that total emoluments drawn were not less. After fitment, if it was found that lesser amount was to be received as salary on or after 1.1.1987, it was required that the shortfall was made good by way of personal adjustment(s). Accordingly, protection was to be made on the fitment by grant of personal pay meaning thereby the pay could not have been reduced on the fitment in the ECL pay scales. The order 26.8.2002 was to be complied with in pith and substance; rather it was violated by the aforesaid method of fixation. As apparent from the aforesaid figure of fitment, pertaining to Prathiva Biswas, Senior Staff Nurse, Central Hospital, Kalla. The fitment that was made on 20/21 May 2003 was clearly in violation of the order as well as the provisions of option form and even subject to conditions on which the absorption had been made. Thus, in our opinion, the Division Bench has rightly set aside the order passed by the Single Bench by the order impugned; it was not the total emoluments that matters. Salary protection was to be ensured, it could not have been reduced apart from emoluments. There was dual protection; that was unfortunately ignored and overlooked by the ECL in spite of the clear and categorical order passed by the Single Bench in the writ application of 1993, which order had attained finality, and had not been questioned by any of the parties.17. Shri Kalyan Bandopadhyay, learned senior Counsel for the Appellant, has relied upon the decision of this Court in State Bank of India and Ors. v. K.P. Subbaiah and Ors.It is apparent from the aforesaid decision that this Court has considered the facts of the particular case before it, and culled out that there was no intention to protect a particular scale of pay. The scale of pay was not a determinative factor. This Court, in the aforesaid context, observed, that while re-fixing the pay and dearness allowance, the direction that the total pay fixed, at the time when the Petitioner entered into the service be protected with the corresponding scale of pay, could not be maintained. There is no dispute with the proposition, however, in the instant case, the pay scales, as they prevailed in the ECL, had been opted; but the dispute arose about the fixation of the pay in that scale. Pay was fixed lower than what had been drawn earlier, i.e. the one which had prevailed in the erstwhile employment. In the instant case, option clearly intended that the pay was to be protected; and the emoluments as well. Thus, the intention in the instant case was otherwise and fitment has not been done correctly, as such, basic pay have to be revised.18. Reliance has also been placed by the Appellants on a decision of High Court Employees Welfare Association v. State of West Bengal 2007 (3) SCC 637 Therefore, a formula or principle of fitment is provided either in the pay revision Rules or by a separate order. Such a formula or principle for fitment is not required in the case of new recruits as they start at the lowest stage of the applicable pay scale or at such stage as stated in the terms of appointment. Rule 7 of the State Pay Rules relating to fixation of initial pay in the revised scale of pay thus applies only to existing employees who have been extended the benefit of a revised pay scale. The words fixation of initial pay in Rule 7 of State Pay Rules, refers to the first pay fixed in the revised scale, on fitment. Therefore the contention of the Petitioner that Rule 7 of State Pay Rules is intended to apply only to new recruits and the sole purpose of paras 9 and 10 of Minutes is to apply the principle of Rule 7 of State Pay Rules to existing employees is untenable.The decision does not espouse the cause of the Appellants, as this Court has considered in the aforesaid dictum the fitment when the revised pay scale is made applicable and when a new entrant comes, new entrant starts at the lowest stage of the applicable pay scale and gets the benefit of the pay scale. This Court has observed that the employees who are receiving under the old pay scale, fitment in the revised pay scale has to be made in the manner so that total emolument was not reduced in the revised pay scale. In our opinion that would not mean the pay can be reduced. This Court considered by said decision only the question to provide the protection to emoluments.19. Thus, the reduction of basic pay drawn in the pay scale was wholly arbitrary and violates the order of the Single Bench dated 26.08.2002