Case: Officers &amp; Supervisors of I.D.P.L Vs. Chairman &amp; M.D., I.D.P.L. &amp; Others

The petitioners are officers and supervisors employed in the Indian Drugs and Pharmaceuticals Ltd. (hereinafter referred to as "the IDPL"). They filed writ petition No. 678 of 1985 in this Court challenging the directions given by the Secretary, Ministry of Industry (the third respondent herein). This Court passed an order to comply with the orders passed by this Court. Thereupon the Government appointed Fifth Pay Commission in 1993 to consider revision of pay and allowances of the Central Government employees and pending final report, the Pay Commission granted three instalments of interim relief. According to the petitioners, the benefit was extended to the employees of all 69 Public Enterprises. The grievance of the petitioners was that they were not given any instalment of interim relief and as there was no response from the Chairman and Managing Director of the IDPL, they filed contempt petition no. 490 of 1996 for violation of directions given by this Courts order dated 3.5.1990. The contempt petition was dismissed as there was unprecedented financial crunch. On 24.10.1997, the Fifth Pay Commission recommended revision of scales of pay and allowances of the Central Government employees and the third respondent herein directed 69 Public Enterprises to revise theof the employees following C.D.A. pattern w.e.f. 1.1.1996. As the first respondent did not take any action, the present writ petition No. 222 of 1998 was filed in this Court.

Court's reasoning:
11. In our view the economic capability of the employer also plays a crucial part in it; as also its capacity to expand business or earn more profits. The contention of Mr. Sanghi, if accepted, that granting higher remuneration and emoluments and revision of pay to workers in other governmental undertakings and, therefore, the petitioners are also entitled for the grant of pay revision may, in our opinion, only lead to undesirable results. Enough material was placed on record before us by the respondents which clearly show that the first respondent had been suffering heavy losses for the last many years. In such a situation the petitioners, in our opinion, cannot legitimately claim that theirshould necessarily be revised and enhanced even though the organization in which they are working are making continuous losses and are deeply in the red. As could be seen from the counter affidavit, the first respondent company which is engaged in the manufacture of medicines became sick industrial company for various reasons and was declared as such by the BIFR and the revival package which was formulated and later approved by the BIFR for implementation could not also be given effect to and that the modifications recommended by the Government of India to the BIFR in the existing revival package was ordered to be examined by an operating agency and, in fact, IDBI was appointed as an operating agency under Section 17(3) of SICA. It is also not in dispute that the production activities had to be stopped in the major two units of the company at Rishikesh and Hyderabad w.e.f. October, 1996 and the losses and liabilities are increasing every month and that the payment of three instalments of interim relief could not also be made due to the threat of industrial unrest and the wage revision in respect of other employees is also due w.e.f. 1992 which has also not been sanctioned by the Government of India.12. In the instant case, it is also not in dispute that the units of the companies have already suspended their operations and as on date no unit is functioning. It is also observed in the order dated 23.01.1996 that the companys sales were of the order of Rs. 215 crore against the projected sales of Rs. 305.65 crore for the year ended 31.03.1995 and the company incurred a net loss of Rs. 69.80 crore against the projected profit of Rs. 0.08 crore. The major reasons for the poor performance of the company was stated to be constrained in working capital, power supply problems, reduction of custom tariff on import on bulk drugs, highly competitive marketing in formulation and high wage bills besides withdrawal of price preference. The progress period ended on 30.09.1995 and as per the companys balance sheet were Rs. 77 crore against the envisaged sales of Rs. 177.47 crores for the period ended 30.09.1995 and th company incurred a net loss of Rs. 47 crores against the projected net loss of Rs. 47 crores against the projected net profit of Rs. 7.69 crores. The accumulated loss stood at Rs. 577.10 crores against the projected accumulated loss of Rs. 499.30 crores as on 31.03.1995 and Rs. 624.10 crores against Rs. 478.66 crores as on