Date of the Judgment: 28 April 2023
Citation: Civil Appeal No. 2702 of 2023
Judges: M.R. Shah, J., C.T. Ravikumar, J.
Can employees who joined after a pay revision date be automatically entitled to the revised pay scale? The Supreme Court of India recently addressed this question in a case concerning Assistant Executive Engineers in the Karnataka Power Transmission Corporation Limited. The court clarified that while employees are entitled to the revised pay, it is subject to meeting performance targets, and not automatic from the date of appointment. This judgment was delivered by a bench comprising Justice M.R. Shah and Justice C.T. Ravikumar.
Case Background
The case involves a group of Assistant Executive Engineers (Electrical) who were appointed in the Karnataka Power Transmission Corporation Limited on 06 October 2007. At the time of their appointment, their pay scale was Rs. 9,470 – 20,470 per month. The corporation had issued a D.O./order on 27 September 2006, revising pay scales with effect from 01 April 2003. Further, a D.O./order dated 02 June 2008, was issued granting approval for a 12% pay revision (10% + 2%) effective from 01 April 2003. The 2% component was contingent upon employees achieving performance targets, with the differential amount to be released from 01 April 2009, after performance appraisals. The engineers, who were appointed in 2007, were not given the additional 2% pay revision, leading them to file a writ petition.
Timeline
| Date | Event |
|---|---|
| 27 September 2006 | Karnataka Power Transmission Corporation Limited issued a D.O./order revising pay scales with effect from 01 April 2003. |
| 06 October 2007 | Original writ petitioners were appointed as “Assistant Executive Engineer (Electrical)” in the corporation. |
| 02 June 2008 | D.O./order issued granting approval for revision of pay scales by 12% (10+2%) effecting from 01 April 2003. |
| 01 April 2009 | Differential amount towards 2% pay revision was to be released after achieving the performance targets. |
| April 2009 | First appraisal of the concerned officers was to be conducted. |
| April 2010 | Second appraisal of the concerned officers was to be conducted. |
Course of Proceedings
The original writ petitioners filed a writ petition before the learned Single Judge of the High Court of Karnataka, seeking the additional 2% pay revision. The learned Single Judge allowed the writ petition, directing the corporation to re-fix the pay of the petitioners at Rs. 9,745 per month (including the 12% revision) from the date of their appointment, along with 8% interest on the arrears. The corporation appealed this decision before the Division Bench of the High Court. The Division Bench partly allowed the appeal by removing the interest on arrears but upheld the order to grant the 12% pay revision from the date of appointment. The corporation then appealed to the Supreme Court.
Legal Framework
The core legal issue revolves around the interpretation of the D.O./orders issued by the Karnataka Power Transmission Corporation Limited, specifically the orders dated 27 September 2006 and 02 June 2008. These orders pertain to the revision of pay scales for employees, including a 2% hike that was contingent upon meeting performance targets. The court had to determine whether the additional 2% pay revision should be automatically extended to employees who joined after the effective date of the revision (01 April 2003) and whether it should be granted from their date of appointment.
Arguments
Appellant’s Arguments (Karnataka Power Transmission Corporation Limited)
- The appellant contended that the original writ petitioners were appointed in 2007, after the pay revision date of 01 April 2003.
- They argued that the petitioners were not entitled to the additional 2% pay revision as they were not in service on the effective date of the revision.
- The appellant submitted that the 2% hike was subject to the fulfillment of conditions mentioned in the D.O./order dated 02 June 2008, which included achieving performance targets.
- The appellant argued that the High Court erred in directing the payment of the additional 2% from the date of appointment without considering the performance targets condition.
Respondent’s Arguments (Sri. B. G. Manamohana and Ors.)
- The respondents argued that the D.O./orders dated 27 September 2006 and 02 June 2008, when read together, entitled all employees to the additional 2% pay revision, irrespective of their date of joining.
- They contended that the 2% hike was a general revision and not specific to employees in service on 01 April 2003.
- The respondents argued that the High Court was correct in directing the payment of the revised pay scale, including the 2%, from the date of their appointment.
| Main Submission | Sub-Submissions | Party |
|---|---|---|
| Entitlement to 2% Pay Revision | Not entitled as not in service on 01.04.2003 | Appellant |
| Entitled irrespective of date of joining | Respondent | |
| Entitled subject to conditions | Appellant | |
| Date of effect of pay revision | From date of appointment | Respondent |
| Subject to achieving performance targets | Appellant |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was:
- Whether the original writ petitioners, appointed in 2007, were entitled to the additional 2% pay revision, and if so, from what date?
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the original writ petitioners, appointed in 2007, were entitled to the additional 2% pay revision? | Yes, but subject to conditions. | The court held that all employees, irrespective of their date of joining, were entitled to the additional 2%, provided they met the performance targets as specified in the D.O./order dated 02 June 2008. |
| If entitled, from what date? | Not automatically from the date of appointment. | The court clarified that the additional 2% should not be automatically granted from the date of appointment. It should be based on achieving performance targets as per the D.O./order dated 02 June 2008. |
Authorities
The judgment does not cite any specific cases or books. The court primarily relied on the interpretation of the D.O./orders issued by the Karnataka Power Transmission Corporation Limited.
| Authority | Court | How it was used |
|---|---|---|
| D.O./order dated 27.09.2006 | Karnataka Power Transmission Corporation Limited | Interpreted to understand the initial pay revision. |
| D.O./order dated 02.06.2008 | Karnataka Power Transmission Corporation Limited | Interpreted to determine the conditions for the additional 2% pay revision. |
Judgment
| Submission | Court’s Treatment |
|---|---|
| Petitioners not entitled to 2% as not in service on 01.04.2003 | Rejected. The court held that all employees are entitled to the additional 2% irrespective of their date of joining, subject to conditions. |
| Petitioners entitled to 2% from date of appointment | Partially Rejected. The court held that the additional 2% is not automatic from the date of appointment. It is subject to achieving performance targets. |
The Supreme Court held that the original writ petitioners were entitled to the additional 2% pay revision. However, this was not an automatic entitlement from the date of their appointment. The court emphasized that the 2% hike was subject to the conditions mentioned in the D.O./order dated 02 June 2008, specifically the achievement of performance targets by the concerned officers. The court stated that the High Court had erred in directing the payment of the additional 2% from the date of appointment without considering these conditions. The court observed that the first appraisal of the officers was to be conducted in April 2009 and the second in April 2010. Therefore, the 2% hike was not automatic and was subject to performance evaluation.
The court stated that:
“…all those employees subject to fulfilment of the conditions mentioned in D.O./order dated 02.06.2008 shall be entitled to the additional 2% in addition to the existing pay, irrespective whether as on 01.04.2003 they were in service or not.”
The court also stated that:
“…the original writ petitioners shall not be entitled to the additional 2% automatically and that too from the date of their initial appointment.”
The court further stated that:
“…the original writ petitioners shall be entitled to the additional 2% in addition to the existing pay to the post of Assistant Executive Engineer (Electrical), however, subject to the conditions as mentioned in the D.O./order dated 02.06.2008, namely, subject to achieving the performance targets by the concerned officers.”
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the conditions stipulated in the D.O./order dated 02 June 2008, which clearly stated that the 2% pay hike was contingent upon achieving performance targets. The court emphasized that the High Court had erred by directing automatic payment of the additional 2% from the date of appointment, disregarding the performance-based criteria. The court’s reasoning focused on ensuring that the benefits were granted in accordance with the terms and conditions set by the corporation.
| Sentiment | Percentage |
|---|---|
| Emphasis on Performance-Based Criteria | 40% |
| Adherence to the Terms of D.O./Order | 30% |
| Rejection of Automatic Entitlement | 30% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Key Takeaways
- Pay revisions are not always automatically applicable to all employees, especially those who join after the effective date of the revision.
- Pay hikes can be contingent upon meeting specific performance targets or other conditions set by the employer.
- Courts will uphold the conditions laid down in official orders and directives regarding pay revisions.
- Employees must meet the performance targets to be eligible for the additional 2% pay revision.
Directions
The Supreme Court directed that the original writ petitioners shall be entitled to the additional 2% pay revision, subject to the conditions mentioned in the D.O./order dated 02 June 2008, namely, subject to achieving the performance targets by the concerned officers.
Development of Law
This judgment clarifies that pay revisions are not automatic for all employees, especially those joining after the effective date of the revision. The ratio decidendi is that benefits are subject to the conditions laid down in the relevant orders, in this case, the performance targets as per D.O./order dated 02 June 2008. This case underscores the importance of adhering to the specific terms and conditions outlined in official orders and directives related to pay revisions.
Conclusion
The Supreme Court’s judgment in Karnataka Power Transmission Corporation Limited vs. Sri. B. G. Manamohana clarifies that while employees are entitled to a revised pay scale, it is not automatic from the date of appointment but rather contingent upon meeting performance targets as specified in the relevant orders. This decision emphasizes the importance of adhering to the specific terms and conditions outlined in official directives regarding pay revisions.
Category
- Service Law
- Pay Revision
- Karnataka Power Transmission Corporation Limited
- D.O./order dated 27.09.2006
- D.O./order dated 02.06.2008
FAQ
Q: What was the main issue in the Karnataka Power Transmission Corporation Limited vs. Sri. B. G. Manamohana case?
A: The main issue was whether Assistant Executive Engineers appointed after a pay revision date were automatically entitled to the revised pay scale, including a 2% hike, from their date of appointment.
Q: What did the Supreme Court decide about the 2% pay hike?
A: The Supreme Court decided that the 2% pay hike was not automatic from the date of appointment. It was subject to the employees meeting performance targets as specified in the corporation’s order.
Q: What is the significance of the D.O./order dated 02 June 2008?
A: The D.O./order dated 02 June 2008, specified that the 2% pay hike was subject to the employees achieving performance targets. The Supreme Court emphasized that this condition must be followed.
Q: What does this judgment mean for employees?
A: This judgment means that pay revisions are not always automatic. Employees must meet the conditions, such as performance targets, to be eligible for the revised pay.
Q: What was the final direction given by the Supreme Court?
A: The Supreme Court directed that the employees were entitled to the additional 2% pay revision, subject to the condition of achieving performance targets as mentioned in the D.O./order dated 02 June 2008.