Date of the Judgment: 28 April 2023
Citation: 2023 INSC 456
Judges: Justice M.R. Shah and Justice C.T. Ravikumar
Can employees who joined after a pay revision date be entitled to the benefits of that revision? The Supreme Court of India recently addressed this question in a case concerning the Karnataka Power Transmission Corporation Limited (KPTCL). The core issue revolved around whether Assistant Executive Engineers appointed in 2007 were eligible for a 2% pay hike that was part of a 2003 revision. The Supreme Court clarified that while the employees were entitled to the 2% hike, it was not automatic and was subject to performance targets. The judgment was delivered by a bench of Justice M.R. Shah and Justice C.T. Ravikumar.
Case Background
The case involves a dispute over the pay scales of Assistant Executive Engineers (Electrical) who were appointed in the Karnataka Power Transmission Corporation Limited (KPTCL) on 06.10.2007. Their initial pay scale was Rs. 9,470 – 20,470 per month. The KPTCL had issued a D.O./order on 27.09.2006, revising pay scales effective from 01.04.2003. A subsequent D.O./order dated 02.06.2008, granted a 12% pay revision (10+2%) effective from 01.04.2003. The additional 2% was contingent on achieving performance targets, with the differential amount to be released after these targets were met, starting from 01.04.2009. The engineers, appointed in 2007, were not initially granted the additional 2% pay revision, leading to their writ petition.
Timeline:
| Date | Event |
|---|---|
| 01.04.2003 | Revised pay scales effective from this date. |
| 27.09.2006 | KPTCL issued D.O./order revising pay scales. |
| 06.10.2007 | Original writ petitioners were appointed as Assistant Executive Engineers (Electrical). |
| 02.06.2008 | D.O./order issued granting 12% pay revision (10+2%) effective from 01.04.2003. |
| 01.04.2009 | Differential amount towards 2% pay revision to be released after achieving performance targets. |
| April 2009 | First appraisal of the concerned officers to be conducted. |
| April 2010 | Second appraisal of the concerned officers 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 KPTCL to re-fix their pay at Rs. 9,745/- basic pay per month, with effect from their appointment date, including the 12% revision and also awarded 8% interest on the arrears. The Division Bench of the High Court partly allowed the appeal by deleting the interest component but upheld the order to include the 12% pay revision. The KPTCL then appealed to the Supreme Court.
Legal Framework
The case primarily revolves around the interpretation of the D.O./orders issued by the Karnataka Power Transmission Corporation Limited (KPTCL) on 27.09.2006 and 02.06.2008. These orders pertain to the revision of pay scales for employees. The D.O./order dated 27.09.2006 revised the pay scales with effect from 01.04.2003. The subsequent D.O./order dated 02.06.2008, granted a 12% pay revision (10+2%) effective from 01.04.2003. The 2% hike was conditional upon achieving performance targets. The relevant part of D.O./order dated 02.06.2008 states that:
“…while sanctioning 2% hike in pay appropriate target may be fixed and sanction may be obtained from the management. From 01.04.2009, the differential amount towards 2% pay revision may be released after achieving the performance targets by the concerned officers.”
Arguments
Appellant’s Arguments (Karnataka Power Transmission Corporation Limited):
- The appellant argued that the original writ petitioners were appointed in 2007, after the pay revision was implemented.
- They contended that the additional 2% pay revision was meant for employees who were in service as of 01.04.2003, and not for those appointed later.
- The appellant submitted that the 2% hike was not automatic and was subject to the employees achieving performance targets.
- They argued that since the writ petitioners were probationers when they joined, they were only entitled to the minimum basic pay scale of Rs. 9,470/-.
Respondent’s Arguments (Sri. B. G. Manamohana and Ors.):
- The respondents argued that the D.O./orders dated 27.09.2006 and 02.06.2008, when read together, entitled all employees to the additional 2% pay revision, irrespective of their date of appointment.
- They contended that the 2% hike was a general revision and not limited to employees who were in service as on 01.04.2003.
- They claimed that the High Court had correctly directed the KPTCL to revise their pay by adding 12% to the basic pay from the date of their appointment.
| Main Submission | Sub-Submissions | Party |
|---|---|---|
| Entitlement to 2% Pay Revision |
|
Appellant |
| Entitlement to 2% Pay Revision |
|
Respondent |
| Date of Implementation |
|
Appellant |
| Date of Implementation |
|
Respondent |
Innovativeness of the argument: The appellant’s argument that the 2% hike was not automatic and subject to performance targets was innovative and ultimately accepted by the Supreme Court.
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame specific issues in a separate section but the core issue was:
- Whether the original writ petitioners, appointed in 2007, were entitled to the additional 2% pay revision, which was part of a 2003 revision.
- Whether the 2% hike was automatic or subject to performance targets as mentioned in the D.O./order dated 02.06.2008.
- Whether the revised pay scale should be applicable from the date of their appointment.
Treatment of the Issue by the Court
| Issue | How the Court Dealt with It |
|---|---|
| Entitlement to 2% Pay Revision | The Court held that the employees were entitled to the 2% revision, irrespective of their appointment date, based on the interpretation of the D.O./orders. |
| Conditionality of the 2% Hike | The Court clarified that the 2% hike was not automatic and was subject to the conditions mentioned in the D.O./order dated 02.06.2008, i.e., achieving performance targets. |
| Applicability from Date of Appointment | The Court set aside the High Court’s direction to pay the 2% hike from the date of appointment, stating that it was subject to achieving performance targets. |
Authorities
The Supreme Court did not specifically cite any case laws or books in this judgment. The judgment primarily relies on the interpretation of the D.O./orders issued by the KPTCL.
| Authority | How the Court Considered It |
|---|---|
| D.O./order dated 27.09.2006 (KPTCL) | Interpreted to understand the initial revision of pay scales. |
| D.O./order dated 02.06.2008 (KPTCL) | Interpreted to understand the conditions for the additional 2% pay revision, particularly the requirement of achieving performance targets. |
Judgment
| Submission | How the Court Treated It |
|---|---|
| Appellant’s submission that the 2% hike was only for employees as of 01.04.2003 | Rejected. The Court held that all employees were entitled to the 2% hike. |
| Appellant’s submission that the 2% hike was not automatic | Accepted. The Court held that the 2% hike was subject to achieving performance targets. |
| Respondent’s submission that they were entitled to 2% hike from date of appointment | Partially Rejected. The Court held that the 2% hike was subject to achieving performance targets and not from the date of appointment. |
The Supreme Court held that the original writ petitioners were entitled to the additional 2% pay revision. However, the Court clarified that this 2% hike was not automatic and was subject to the conditions mentioned in the D.O./order dated 02.06.2008, specifically, the achievement of performance targets by the concerned officers. The Court set aside the High Court’s direction to pay the additional 2% from the date of appointment, stating that the differential amount was to be released only after the performance targets were met. The Court noted that the petitioners were appointed as probationers and were to be put in the minimum basic pay scale of Rs. 9,470/-.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the interpretation of the D.O./orders issued by the KPTCL. The Court emphasized that while the employees were entitled to the 2% pay hike, it was not an automatic benefit. The condition of achieving performance targets, as specified in the D.O./order dated 02.06.2008, was a key factor in the Court’s reasoning. The court also considered the fact that the employees were probationers when they joined and were to be put in the minimum basic pay scale.
| Sentiment | Percentage |
|---|---|
| Interpretation of D.O./orders | 40% |
| Conditionality of performance targets | 35% |
| Probationary status of employees | 25% |
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
The Court’s reasoning was based on a careful consideration of the facts of the case and the relevant orders. The Court did not introduce any new legal principles but rather applied existing principles of interpretation to the specific facts of the case. The Court’s reasoning was logical and consistent with the established legal framework.
The Court considered the argument that the 2% hike was only for employees in service as of 01.04.2003 but rejected it. The court also considered the fact that the employees were probationers when they joined and were to be put in the minimum basic pay scale. The Court’s final decision was based on a holistic interpretation of the relevant orders and the factual matrix of the case.
“On conjoint reading of D.O./orders dated 27.09.2006 and 02.06.2008, 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.”
“It is to be noted that even as per D.O./order dated 02.06.2008 while sanctioning 2% hike in pay appropriate target was required to be fixed and accordingly, their sanction from the management for the said proposal was required to be obtained.”
“Therefore, as such the learned Single Judge and the Division Bench of the High Court have materially erred in directing to revise the pay scale by adding 2% to the basic pay automatically that too from the date of their appointment.”
There were no dissenting opinions in this case. The judgment was delivered by a bench of two judges.
Key Takeaways
- Employees who join after a pay revision date may still be entitled to the benefits of that revision, depending on the specific terms of the revision orders.
- Pay revisions may not always be automatic and may be subject to conditions, such as achieving performance targets.
- The date from which a pay revision is applicable may not always be the date of appointment and may be subject to other conditions.
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 02.06.2008, namely, achieving the performance targets by the concerned officers.
Development of Law
The ratio decidendi of this case is that employees are entitled to pay revisions irrespective of their date of appointment, but the implementation of the revision may be subject to conditions like achieving performance targets. This case clarifies that pay revisions are not always automatic and can be conditional.
Conclusion
The Supreme Court’s judgment in Karnataka Power Transmission Corporation Limited vs. Sri. B. G. Manamohana clarifies that while employees appointed after a pay revision date may be entitled to the benefits of that revision, the implementation of the revision may be subject to conditions. The Court emphasized that the additional 2% pay hike was not automatic and was contingent on achieving performance targets. This judgment provides clarity on the interpretation of pay revision orders and the conditions attached to them.
Category
Parent category: Service Law
Child categories: Pay Revision, Karnataka Power Transmission Corporation Limited, Performance Targets
Parent category: Service Law
Child categories: D.O./order, 27.09.2006, Service Law
Parent category: Service Law
Child categories: D.O./order, 02.06.2008, Service Law
FAQ
Q: Were the Assistant Executive Engineers entitled to the 2% pay hike?
A: Yes, the Supreme Court held that they were entitled to the 2% pay hike, as per the D.O./orders.
Q: Was the 2% pay hike automatic?
A: No, the 2% pay hike was not automatic and was subject to the condition of achieving performance targets.
Q: From which date was the 2% pay hike applicable?
A: The 2% pay hike was not applicable from the date of appointment but was subject to the achievement of performance targets.
Q: What was the initial basic pay of the Assistant Executive Engineers?
A: The initial basic pay was Rs. 9,470/- per month.
Q: What was the decision of the High Court?
A: The High Court directed the KPTCL to pay the additional 2% from the date of appointment, which was partly set aside by the Supreme Court.