Impossible To Pay Off KSRTC's Recurring Liabilities Unless All Stakeholders Act In Unison: Kerala High Court

The Kerala High Court on Tuesday, while hearing the plea moved by the KSRTC employees alleging that they were not being paid salary promptly, pulled up on the Employees Unions for continuing the strikes despite assuring the Court that the strikes would be called off. 

Justice Devan Ramachandran opined that unless KSRTC, Government and the employees act in unison, it would be impossible to find resources to pay off the recurring liabilities of the Corporation.

Unless the profitability of the KSRTC is increased, its future is bleak. Every stakeholder has to recognise this and accept this, including the management, employees and the government. The roles each has to play is vital, and a balance has to be drawn between the three. Unless all the said stakeholders act in unison, it would be impossible to find resources to pay off the recurring liabilities of the KSRTC. 

Special Government Pleader, Advocate Santosh Kumar, filed a counter affidavit on behalf of the third respondent, detailing the measures taken by the Government in revamping KSRTC. It was submitted that reorganising KSRTC to make them self-reliant is the top priority of the Government.

The Government further submitted that it has taken various measures to revamp the Corporation and for the modernisation of public transportation; however, due to apprehensions raised by multiple quarters among the Government other organizational issues, unfortunately, implementation of these reform measures were getting delayed. It is also submitted in the counter affidavit that Rs. 50 Crores has been allotted in the 2022-23 budget for fleet modernization and quality improvement and Rs. 814 Crores has been sanctioned under the KIIFB loan.

The Court pointed out that in their counter affidavit, the government had even gone to the extent of saying that unless productivity is improved and it becomes visible through the cooperation of the employees to reduce the losses, it is not in a position to give any assistance to the KSRTC. They also blamed the employees union for carrying on strikes in spite of the assurances made to the Court. 

However, it was observed that the component of the liability that concerns the Court is the money KSRTC owes to a consortium of banks and financial institutions, including KTDFC, as Rs 30 crores are being paid in a month as repayment of these loans.

Justice Ramachandran pointed out that in the affidavit, the Government does not specify how it plans to control this so as to Government liability so that the KSRTC can become at least a no-profit-no-loss entity. To this, the Special Government Pleader responded that the Government is in the process of evaluating this and that they will take a decision within a month's time.  

In addition to the ticket sale revenue of the KSRTC, as well as the non-ticket revenues also should have to increase if it wants to find any survival in future. 

Going by the records adduced by the KSRTC before the Court, the Court observed that the KSRTC has large areas under them on which several buildings, shopping complexes and offices have been constructed; however, it is not clear as to why these assets are not put to full use or profits are generated in the manner it should have been.

Therefore, the Court observed that it is necessary for the government to conduct a proper audit on all the construction made by KTDFC and verify where the issue is heading.

The Court also recorded the submissions made by Advocate Nandakumar that the Government owes a large amount of money to the KSRTC towards ticket concessions which was not mentioned in the counter affidavit. The Court demanded an answer from the State regarding this in due time.

The Court also reiterated that employees must be paid their salaries without delay and no later than at least the 5th of every month. Justice Ramachandran thereby ordered the KSRTC to ensure that the salaries to all the employees as per the previous orders of this court are paid by the 10th of this month, and the salary for the month of June 2022 has been paid substantially and will be completed within 5 th of this month.

The KSRTC still maintains that the salary for the month of July will be paid by the 10th of August as ordered by the Court.

In the meanwhile, the Court has granted the Government time to reflect upon the various issues, including considering an audit of the assets of KSRTC, the constructions made by KTDFC and the wiping of the liability towards the consortium of banks so that at least in the future the KSRTC will be able to operate without losses.

The matter has been posted for further consideration on 17th August. 

Case Title: R. Baji & Ors. v. KSRTC & Ors.

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