Article 14 Does Not Envisage Negative Equality; State Can't Be Forced To Perpetuate Same Mistake Committed With Respect To Others : Supreme Court

The Supreme Court has observed that daily rated employees cannot as a matter of right claim the parity of pay scales with the Government employees.

The bench of Justices DY Chandrachud and MR Shah was considering an appeal against the order passed by the Gujarat High Court in which the High Court had held that the daily rated employees of the Gujarat Water Supply & Sewerage Board ("Board") were not entitled to any benefit from the modified Government Resolutions dated May 1, 1991 and February 15, 1992 since the same were not adopted by the Board.

The issues that arose for consideration were:

• Whether the original writ petitioners – daily rated employees working with the Respondent - Board are entitled to the benefits flowing from subsequent Resolutions dated 01.05.1991 and 15.02.1992?
• Whether the principle of negative equality shall be applicable in a case where the other employees were wrongly granted the benefits and/or the employees who are claiming the parity shall have to establish their rights independently to get the particular benefits?

While dismissing the appeal, the bench in Rajesh Pravinchandra Rajyaguru v. Gujarat Water Supply & Sewerage Board and Ors. observed that,

"As per the settled proposition of law, the equation of posts and salary is a complex matter which should be left to the expert body and undertakings and the court cannot interfere lightly. Granting of pay parity by the court may result in a cascading effect having adverse consequences. There are limitations or qualifications to the applicability of the doctrine of 'equal pay for equal work'. Being daily rated employees of the Respondent – Board, they cannot claim as of right similar treatment as Government employees. The Respondent – Board is an independent entity and it might have its own financial capacity and therefore its employees cannot claim parity with the employees of the State Government."

Factual Background

Gujarat Water Supply & Sewerage Board was formed under Gujarat Water Supply and Sewerage Board Act, 1978 for rapid development and proper regulation of the water supply and sewerage activities in the State of Gujarat. Till the Board framed its own Rules and Regulations, it for better administration decided through a Resolution dated August 6, 1980 to follow the Rules, Regulations, Circulars, Policies, Instructions and all Schemes of the State Government from the date of formation of the Board.

Since there were many daily wagers working under various departments of the State Government, to resolve the issue relating to service condition of daily wagers engaged in maintenance and repairing work a committee called 'Shri Daulatbhai Parmar Committee' under the Chairmanship of the then Minister of Roads and Building Department – Shri Daulatbhai Parmar was constituted.

Based on the recommendations of the Committee, the Gujarat Government passed a Resolution dated October 17, 1988 ("parent resolution") wherein it decided to give certain benefits to the skilled daily wage workmen depending upon the period of services undergone, i.e. less than 5, 5 or more or 10 years.

The Board adopted the resolution dated October 17, 1988 and thus granted benefits of the pay scales of Rs.750 and other benefits upon their completion of 5 years service and placed them at the basic pay of Rs.2550. Board also granted benefits under the parent Resolution to all daily rated employees working with the Board including the writ petitioners upon their completion of 10 years and placed them in the pay scale of Rs.2550-55-2600-60-3200.

However, some of the zonal offices of the Board erroneously and inadvertently extended the benefit of the modified Resolutions dated May 1, 1991 and February 15, 1992 to unskilled daily wagers. When it came to the notice of the Board's Head Office, it instructed to not grant benefits and thus withdrew the benefit of pay scale of Rs.950-1500 granted inadvertently applying the modified Resolutions and even started recovery.

The petitioners sent various representations to the Board for placing them in the pay scale of Rs.950-1500 as per the Resolutions dated May 1, 1991 and February 15, 1992 and further revision of pay to the extent of Rs.3050-4590. They thus approached the High Court for granting them the benefits of pay scale under the modified resolutions and putting them in the pay scale of Rs.950-1500.

The Single Judge on October 15, 2019 directed the Board to grant benefits of pay scale of Rs.950-1500 to the original writ petitioners – daily rated employees with all consequential benefits upon completion of 10 years of service and revised their pay scales as per 5th, 6th and 7th Pay Commission scales on such basis. Directions were also issued to pay them arrears.

Aggrieved, the Board approached the Division Bench by way of Letters Patent Appeal. The Division Bench while allowing the same quashed and set aside the Single Judge's judgement and held that the subsequent modified Government Resolutions dated 01.05.1991 and 15.02.1992 were not adopted by the Board, the daily rated employees of the Board were not entitled to any benefit flowing from modified Government Resolutions dated 01.05.1991 and 15.02.1992.

Assailing the High Court's judgement, the petitioners approached the Top Court.

Submission Of Counsels

Appearing for the petitioners, Senior Advocate Sanjay Parikh submitted that once the Board adopted the parent Resolution, all successive amended resolutions shall be applicable and shall have to be implemented by the Board. It was also his contention that the Board being a statutory body had to adopt all subsequent policy decisions/resolutions in the same manner in which the parent Resolution was adopted.

Relying on State of Gujarat and Others versus PWD Employees Union and others, (2013) 12 SCC 417, Senior Counsel contended that when the Board was the creation of the statute and is undertaking the activities which earlier were carried out by the State Government and the same was funded by the State Government, the daily rated employees of the Board like the original writ petitioners were entitled to the same benefits which are available to the daily rated employees of the other departments of the State Government.

Appearing for the Board Advocate Aastha Mehta submitted that the subsequent modified Resolutions of 1991 and 1992 were never adopted by the Board and therefore the daily rated employees working with the Board like the original writ petitioners were not entitled to any benefit flowing from the Resolutions of 1991 and 1992. It was also counsel's contention that there could not be any automatic application of subsequent resolutions by the Board and since the Board was an autonomous and statutory body, it was free to take its own decision in regard to pay scales.

Ms Mehta further contended that being the daily rated employees of the Board, they were not entitled to the benefits which were given to the State Government employees automatically unless it is adopted by the Board.

Relying on the decisions in Secretary, Finance Department and Others versus West Bengal Registration Service Association & Others, 1993 Supp (1) SCC 153; State of Bihar and Others versus Bihar Secondary Teachers Struggle Committee, Munger and Others, (2019) 18 SCC 301 and Punjab State Cooperative Milk Producers Federation Limited and Another versus Balbir Kumar Walia and Others, (2021) 8 SCC 784, counsel contended that issues of revision of pay scales and determination of pay scales/post should be dealt with by the employer, which depend upon the employers' financial capacity.

Supreme Court's Analysis

The bench in the judgement authored by Justice MR Shah opined that since the board was an autonomous body created under the Act, it was ultimately for it to take a conscious decision which could be termed as a policy decision on the pay scales to be adopted and/or certain benefits which would have financial implications.

"Everything depends upon its economic viability or financial capacity. As per the settled proposition of law the economic viability or the financial capacity of the employer is an important factor while fixing the wage structure, otherwise the unit itself may not be able to function and may have to close down inevitably and have disastrous consequences for the employees themselves. As per the settled proposition of law the employees cannot legitimately claim that their pay-scales should necessarily be revised and/or they must be granted certain additional benefits/benefits," the bench further observed in this regard.

The Court further added that the petitioners could not invoke Article 14 of the Constitution to claim benefit on the ground of parity if they otherwise were not entitled to such benefit.

"As per the settled proposition of law Article 14 of the Constitution embodies the concept of positive equality alone and not negative equality. It cannot be relied upon to perpetuate illegality and irregularity," Court said.

Case Title: Rajesh Pravinchandra Rajyaguru v. Gujarat Water Supply & Sewerage Board and Ors. | Civil Appeal No. 7578 Of 2021 & Radhakrishnan Ayyappan Ezhuva & Ors. v. Gujarat Water Supply & Sewerage & Ors.| Civil Appeal No.7579 Of 2021

Coram: Justices DY Chandrachud and MR Shah

Citation : LL 2021 SC 759

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