In a judgment with wide-ranging ramifications, the Punjab and Haryana high court on Friday, after considering Punjab’s “grim financial health”, upheld the state government’s decision to grant upgraded pay scales — over and above the general pay conversion table — to its employees with effect from October 1, 2011, against the 5th Punjab pay commission’s recommendation of granting it with effect from January 1, 2006.
The judgment is a setback to lakhs of government employees, mainly of the education, police, health, agriculture and transport departments, who were hoping to get arrears from 2006 onwards, but it is a breather for the debt-ridden state government. The court headed by justice Tejinder Singh Dhindsa observed that the 5th Punjab pay commission had in its report submitted to the state government on April 20, 2009, recommended implementation of the revised pay scales with effect from January 1, 2006, on “broad and overly optimistic reasoning”.
“Be that as it may, the final obiter as regards the financial resources available and financial implications resulting upon acceptance and implementation of the recommendations of the commission would be the employer/state,” justice Dhindsa made it clear.
The court dismissed a bunch of 268 petitions filed by hundreds of employees challenging the state government’s circular issued on October 5, 2011, to the extent that the benefit of revised pay scales to staff of various departments had been granted with effect from October 1, 2011.
The state government had submitted before the court that it had constituted an implementation committee to consider and implement the commission’s recommendations and a conscious decision was taken to grant pay scales recommended as per the “general conversion table” with effect from January 1, 2006, vide a notification issued on May 27, 2009.
However, the pay scale recommended over and above the general conversion table in respect of certain categories of employees had been granted with effect from October 1, 2011.
Grim fiscal scenario
The court observed that in the report submitted by the commission, the latter itself had estimated that the arrears on account of salary increase for the period from January 1, 2006, to March 31, 2009, would be Rs 3,450 crore.
“This is a staggering and humongous amount,” justice Dhindsa remarked.
The court said that state government’s decision could not be said to be vitiated by any extraneous consideration or perverse appreciation of the financial circumstances prevailing and the court did not find any basis that would warrant interference in the state’s decision.
Justice Dhindsa also observed, “the commission, in spite of taking stock of the grim financial scenario of the state, still paints an optimistic picture… and exudes confidence as regards the government’s capacity to meet the additional liability…”
The court said the commission had itself noticed that Punjab had experienced an erosion in terms of per-capita income over the years and the state’s economy had been experiencing deceleration in its rate of growth.
The commission, in its report, had observed that Punjab’s high-profile sectors such as agriculture had been passing through a turbulent period and also the industrial sector had been stagnating.