Food Corporation Of India & Ors vs Bhartiya K. Nigam Karmchari Sangh & Anr

FOOD CORPORATION OF INDIA & ORS. -- APPELLANTS

VERSUS

BHARTIYA KHADYA NIGAM KARMCHARI -- RESPONDENTS

SANGH & ANR.

WITH

CIVIL APPEAL NO. 6878 OF 2003

JUDGMENT

D.K. JAIN, J.:

1. Challenge in these appeals is to the judgment dated 23rd May, 2002,

rendered by a Division Bench of the High Court of Jammu and

Kashmir at Jammu in S.W.P No. 1470 of 1994. By the impugned

judgment, while declaring Circular No.40 of 1985, dated 29th July,

1985, which accorded monetary incentives to in-service employees

of the Food Corporation of India (for short "the FCI") for acquiring

higher qualifications, as discriminatory, the High Court has directed

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that if any benefit under the said Circular has been given to any

employee, it shall be withdrawn.

2. Since both the appeals, one by the FCI and the other by the Bhartiya

Khadya Nigam Karamchari Sangh (for short "the Karamchari Sangh"),

arise out of the same judgment, the same are being disposed of by

this common judgment. We may however, note that the FCI is

aggrieved by the impugned judgment as a whole, whereas the

Karamchari Sangh impugns the direction relating to the denial of the

incentives to other employees, possessing same qualifications.

3. The material facts, giving rise to the appeal are as follows:-

The FCI was set up with the objective of safeguarding the interest

of the farmers, distribution of food grains throughout the country and to

maintain a satisfactory level of food grain stocks to ensure national food

security. The Food Corporation of India Act, 1964, became effective

w.e.f. 17th December 1964. Section 45 of the said Act empowers the FCI

to make regulations for regulating the appointment, conditions of

service and scales of pay of its officers and employees. Resultantly, the

Food Corporation of India (Staff) Regulations, 1971, were made and

came into effect from the year 1971.

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4. With a view to ensure a desired degree of efficiency and mobility in

the administration and management of its affairs, the FCI, vide

Circular No.40 of 1985, dated 29th July, 1985, introduced a scheme

providing for incentives to its employees on acquiring additional

qualifications during their service in the FCI. The Circular provided

for grant of two increments to employees in their respective pay

scales on acquiring such professional degrees and diplomas as were

mentioned in the Circular. Subsequently, another Circular No. 72 of

1986, dated 14th November, 1986, was issued, extending the benefit

of one special increment to in-service employees who acquire one

year diploma course in any professional subject as mentioned in the

Circular.

5. The afore-mentioned Circulars were complimented by Circular No.

58 of 1987, dated 24th August, 1987, which clarified that the

increments shall only be in the form of a personal pay to an official till

his promotion to the next higher grade, which shall be subsequently

absorbed in the basic pay at the time of pay fixation for the promoted

post.

6. The Circular of 1985 was challenged by one Shri. V.K. Tandon, vide

S.W.P. No. 1146 of 1986, on the ground that it resulted in

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discrimination between in-service employees acquiring additional

qualification and the persons recruited by the FCI already possessing

the prescribed additional qualification. The High Court of Jammu and

Kashmir, vide order, dated, 13th October, 1992, while allowing the

intervention application of the Karamchari Sangh, allowed the

petition and directed that the writ petitioner be granted two

additional increments under the said Circular. Letters Patent Appeal

against the said judgment came to be dismissed on the ground of

delay. Nonetheless, the Zonal Office of the FCI, vide letter dated 19th

May, 1994, notified that the aforesaid judgment was a judgment in

personam.

7. Probably, the said clarification prompted the Karamchari Sangh to

file the writ petition (W.P. No.1470 of 1994) in which the impugned

judgment has been delivered. As aforestated, the High Court has

held that, the said Circular is discriminatory and violative of Article

14 of the Constitution of India, 1950 (for short "the Constitution") and

has directed the FCI not to give effect to the Circular and to withdraw

any incentives, if already given to the employees in furtherance of

the said Circular. Hence, the appeal by the FCI. The nub of the

grievance of the Karamchari Sangh in their appeal (C.A.

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No.6878/2003) is that having held the said Circular to be

discriminatory, the High Court ought to have directed grant of similar

incentives to other employees as well.

8. Mr. Ajit Pudussery, learned counsel appearing on behalf of the FCI,

vehemently urged that the said Circular was constitutionally valid

and in consonance with the established principles of law, inasmuch

as the employees already working in the FCI, with lower professional

qualifications as compared to those who already had higher

qualification at the time of initial recruitment are a class by

themselves and therefore, there was no question of any

discrimination between the two differently placed set of employees.

It was submitted that the objective sought to be achieved by

providing incentive to the already recruited employees with lower

qualifications was to motivate them to acquire higher qualifications

in various fields while in service, which would not only benefit the

employee concerned but also the FCI in the long run. It was thus,

stressed that the classification adopted by the FCI had a rational

nexus with the objective sought to be achieved and therefore, was

not discriminatory, offending Article 14 of the Constitution. In support

of the proposition that the beneficiaries of the said incentive being a

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class by themselves; there being no parity between grant of

incentives to in-service employees, who acquire the prescribed

qualifications and denial of the same to the employees recruited with

higher qualification; the Circular does not result in discrimination,

the learned counsel placed reliance on the decisions of this Court in

State of M.P. and Anr. Vs. Shakri Khan1; United Bank of India Vs.

Meenakshi Sundaram and Ors.2, and H.P. Gupta and Anr. Vs. Union

of India and Ors3.

9. Per Contra, Mr. Ashok Mathur, learned Counsel appearing on behalf

of the respondents, argued that the said Circular was clearly

discriminatory, inasmuch as the incentive under the said Circular

was denied to one set of employees and granted to another set of

employees, governed by the same service conditions and possessing

such prescribed additional qualifications. Commending us to the

decisions of this Court in Food Corporation of India & Ors. Vs. Ashis

Kumar Ganguly & Ors.4 and B. Manmad Reddy & Ors. Vs. Chandra

Prakash Reddy & Ors.5, learned counsel urged that, irrespective of

the educational qualifications, all employees in a particular grade got

1 (1996) 8 SCC 648

2 (1998) 2 SCC 609

3 (2002) 10 SCC 658

4 (2009) 7 SCC 734

5 (2010) 3 SCC 314

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integrated into one class and therefore, there could be no

discrimination amongst them in the matter of grant of incentives.

10. The short question that falls for consideration is, whether grant of

incentives only to the in-service employees of the FCI, who acquire

professional qualifications after entering in service and denial of the

same to those who had acquired the same professional qualifications

before entering the service is invalid in law, being violative of

Articles 14 and 16 of the Constitution?

11. It is trite law that Article 14 of the Constitution, which enshrines the

principle of equality, is of wide import. It guarantees equality before

the law and equal protection of the laws within the territory of India. It

implies right to equal treatment in similar circumstances, except in

cases where the two persons form a separate and distinct class and

such classification is a reasonable one based on intelligible

differentia having nexus with the object sought to be achieved. (See:

State of West Bengal Vs. Anwar Ali Sarkar6 and John Vallamattom &

Anr. Vs. Union of India7).

12. Before examining the issue at hand on the touchstone of the

aforesaid principle envisaged in Article 14 of the Constitution, it

6 (1952) SCR 284

7 (2003) 6 SCC 611

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would be apposite to refer to the relevant portions of the Circular

dated 29th July, 1985. These read as follows:

"The Food Corporation of India, since its inception, has been

pursuing the policy of Management Development by

providing suitable training facilities both within the

Corporation as well as by nominating its employees to short-

term professional courses, work-shops, seminars,

conferences etc. organized by leading management

institutions in India and abroad.

2. These efforts can get an uplift and possibly be

supplemented to a great extent by the involvement of its

employees in acquiring professional management

qualifications on their own. In order, therefore, to fill the basic

gaps to acquire knowledge, the matter has been under

consideration for introducing suitable incentive scheme for

motivating the employees of the Corporation to encourage

them to acquire professional qualifications for rapid career

advancement and enabling the Corporation to build a reserve

of qualified professionals from within to back up key positions

and to improve the overall performance and efficiency of the

organization. This will further create an atmosphere of

"professionalism" in the working of the Corporation. With this

end in view it has been decided with the approval of the

Board of Directors to introduce the following incentive

scheme with effect from 1st April, 1984.

3. The following courses of study have been approved for

grant of the two increments as indicated in subsequent pages.

(A) ......... ......... ......... .........

(B) High professional qualifications viz. MBA,

ACA, AMIE, LLB, BL, ACS etc. All the

above courses (Diplomas/Degrees) should

be at least of two years duration.

4. The following are the details of the scheme for grant of

incentive:-

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ELIGIBILITY:

All regular employees of the Corporation would be eligible

for benefit under the Scheme subject to the following terms

and conditions:-

(i) The scheme would apply to all regular employees of the

Corporation except deputationists/those employed

on contract basis/ casual or on tenure basis.

(ii) Employees covered under (i) above should have

acquired or may acquire higher professional

qualifications from recognised

institutions/Universities during the course of their

service in the FCI with prior permission from the

competent authority of the Corporation. The

acquisition of said qualification should be useful to

the Corporation in its operations.

(iii) ......... ......... ......... .........

(iv) ......... ......... ......... .........

(v) ......... ......... ......... .........

(vi) ......... ......... ......... .........

(vii) ......... ......... ......... .........

(viii) ......... ......... ......... .........

(ix) In cases where the employees, who join the higher

post under direct recruitment and where for such

higher post the prescribed minimum qualification is

the same as acquired by the employee while in the

lower post, the incentive already granted to him/her

in the lower post would not be allowed to continue on

his/her appointment to the higher post.

INCENTIVE ADMISSIBLE:

Employees fulfilling the eligibility conditions referred to

above would only be entitled to the benefits under the

scheme. The incentives offered under this Scheme would be

in the form of two special increments as `personal pay', to be

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merged in pay at the time of promotion to the next higher

grade. This incentive would be admissible only on written

orders by the competent authority on merit of each case. The

incentive in the form of two increments would be granted

starting from first day of the following month when the

employee concerned has been declared to have passed the

listed Courses or the date of enforcement of this scheme

whichever is later.

ENTITLEMENT :

In order to overcome the administrative difficulties and

financial implications in implementation of the Scheme with

retrospective effect covering all the cases of eligible

employees who might have acquired such higher

management or professional qualifications prescribed in this

Scheme once or more than once in the past and might be

holding higher post on promotion or direct recruitment within

the Corporation, the employees would be entitled to the

incentive under this scheme with effect from 1.4.1984 only.

Eligible employees would be entitled to draw incentive

increments at the rates applicable to their present pay scales.

Arrears of incentive increments shall be payable.

In the case of past cases, eligible employees should apply

within six months from the date of the Scheme is circulated. In

case of employees who may acquire any of the above

qualifications hereafter, they may apply as and when they

acquire the higher qualifications in the prescribed Proforma

enclosed.

......... ......... ......... ........."

13. It is manifest from a bare reading of the above-mentioned portions

of Circular that the fundamental objective of the Circular is to

provide an incentive to the in-service employees in order to motivate

and encourage them to acquire professional qualifications in various

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courses, spelt out in the Circular, for their career progression and at

the same time enable the FCI to build a reserve of qualified

professionals from within the organisation to back up key positions.

Evidently, the incentive will not only improve their overall

performance and efficiency in the organisation, but also, in the final

analysis would strengthen the management with the advent of an

atmosphere of professionalism in the FCI.

14. Our attention was also drawn to Circular No. 27 of 2000, dated 11th

September, 2000, empowering the competent authorities to grant

higher start/advance increments to newly recruited employees at

par with the pay drawn in their previous employment before joining

the FCI. It is therefore, plain that the provision to grant extra benefit

to a new recruit possessing higher qualifications was already in

existence. It is also pertinent to note that the said Circular and the

benefit which is sought to be given under any of the Circulars,

referred to above, is not assailed by the respondents. Their only

grievance is that there is no justification in depriving the persons,

who already possess the higher qualifications from the benefit of

extra incentives, which are being granted to the in-house employees.

1 15. We are of the opinion that bearing in mind the aforesaid fact

situation and the objective sought to be achieved by issuance of the

said Circular, there is substantial merit in the stand of the FCI. The

classification adopted by the FCI is between an employee obtaining

a higher qualification after joining service and an employee who

already possessed such qualification before joining the service. As

aforesaid, the main purpose of this classification is to grant an

incentive to the employees already in service in the FCI to motivate

them to acquire higher qualifications for their own benefit as well as

of their employer viz. the FCI. We are convinced that the

classification sought to be made by the FCI between the two sets of

employees bears a just and rational nexus to the object sought to be

achieved by introducing the said incentive scheme. Judged from this

point of view, in our opinion, grant of the incentive in relation to the

in-service employees, in no way amounts to discrimination between

the in-service employees and the employees recruited with higher

qualification, offending either Articles 14 or 16 of the Constitution,

particularly when the incentive is in the form of a special increment

as `personal pay' to be merged in pay at the time of promotion to the

next higher grade and thus, having no bearing on the inter-se

seniority and/or to the future promotion to the next higher grade.

1 16. The decisions of this Court in B. Manmad Reddy & Ors. Vs.

Chandra Prakash Reddy & Ors. (supra) and Food Corporation of

India & Ors. Vs. Ashis Kumar Ganguly & Ors. (supra), on which

reliance was placed by learned counsel for respondents are clearly

distinguishable on facts inasmuch as these decisions deal with cases

relating to employees being classified into separate categories for

the purpose of promotion on the basis of the source from which they

were drawn and increments being given only to the Central

Government employees on being absorbed into the corporation

respectively, which is not the case here. However, it is important to

note that in both these cases, it was observed that the doctrine of

equal pay for equal work is not an abstract doctrine. Article 14 of the

Constitution permits reasonable classification based on qualities or

characteristics of persons recruited and grouped together, as against

those who are left out. Courts should interfere with the administrative

decisions pertaining to pay fixation and pay parity only when they

find such a decision to be unreasonable, unjust and prejudicial to a

section of employees and taken in ignorance of material and relevant

factors.

1 17. At this juncture, it would be profitable to refer to the decision of

this Court in H.P. Gupta and Anr. (supra), which is on all fours to the

fact situation in the present appeal. In the said case, grant of two

advance increments to Telecom Officers who acquired Engineering

degree while in service and not to those who possessed such degree

at the time of joining the service was held to be constitutionally valid.

Dealing with a similar controversy, the Court observed as follows:

"The object of giving two advance increments to

those officials who did not possess degree in

Engineering before joining the service, is only to

encourage them to get such a degree so that they

could improve themselves while in service. When

that object is satisfied, the contentions that there

should be equality in the matter of payment of

salary or other emoluments or that there should

be parity in the matter of giving increments,

cannot be accepted. It is true that in such a

situation, certain anomalies may arise in specific

cases when the official who has acquired degree

in Engineering subsequent to joining of service

may get higher salary though junior to those who

possessed the qualification of degree in

Engineering even at the time of joining the

service. There cannot be perfect equality in any

matter on an absolute scientific basis and there

may be certain inequities here and there. If the

classification is correct and serves a particular

purpose, the same is not to be judicially

interfered with."

We deferentially concur with the observations in the afore-extracted

passage.

1 18. For the view we have taken above, we deem it unnecessary

to deal with the contentions urged on behalf of the

parties in C.A. No. 6878 of 2003, praying for extension of the said

incentive to the employees recruited with higher qualifications.

19. In view of the foregoing discussion, the decision of the High

Court, holding the said Circular to be discriminatory and in

violation of Articles 14 and 16 of the Constitution cannot be

sustained. Consequently, C.A. No. 7268 of 2002, filed by the

FCI is allowed and C.A. No.6878 of 2003 preferred by the

Karamchari Sangh is dismissed. However, in the facts and

circumstances of the case, we leave the parties to bear their own

costs throughout.

...........................................

(D.K. JAIN, J.)

............................................

(ANIL R. DAVE, J.)

NEW DELHI;

JANUARY 13, 2012.

RS

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