Punjab Power Corporation Is Statutory Body, Can Prescribe Cut-Off Date For Implementation Of 5th Pay Commission: P&H High Court

The Punjab and Haryana High Court has held that the Punjab State Power Corporation Limited (PSPCL), being a statutory body, is well within its rights to prescribe a cut-off date for the implementation of the 5th Pay Commission recommendations.

Justice Harpreet Singh Brar said, "The PSPCL being a statutory corporation is entitled to prescribe a cut-off date for implementation of the recommendations of the Fifth Pay Commission, in view of its financial health. The inability of the Corporation to extend benefits of enhanced pensionary benefits has been demonstrated by relying on cogent material and as such, is not arbitrary in nature."

The Court was hearing a batch of petitions with similar issue, that can PSPCL deviate from the recommendations of the Fifth Pay Commission and set its own cut-off date based on its financial health.

Counsel for the employees-petitioner contended that vide its order dated 06.01.2015, the respondent-State arbitrarily fixed the cut-off date as 01.12.2011, which is discriminatory against persons who retired from service before the said date.

The respondents have arrived at this decision in a mechanical manner, without attempting to present an intelligible differentia, which is violative of the fundamental rights of the petitioners, as enshrined in Articles 14, 16 and 21 of the Constitution, it added.

After hearing the submissions, the Court noted that the PSEB is a statutory body that was formed on 01.2.1959, under the Electricity Supply Act, 1948. 

Vide Notification, dated 16.04.2010, the Government of Punjab unbundled the PSEB into two companies- Punjab State Power Corporation Ltd. and Punjab State Transmission Corporation Ltd. Thus, admittedly, the respondent-Corporation is a statutory body, it added further.

Reliance was placed on Chairman & MD, Kerala SRTC vs. K.O. Varghese and others (2007) 8 SCC 231, wherein Apex Court, categorically held that an autonomous instrumentality of the State, capable of framing its own rules and regulations, is entitled to decide the matter of implementation of policies that would impact its financial health.

Justice Brar highlighted that in the present case, sufficient material has been placed on record to show that the financial health of the Corporation is not sound enough to extend the enhanced pensionary benefits to those who retired prior to 01.12.2011.

Further, it is no longer res integra that fiscal health is a relevant consideration for a Corporation to decide the commencement date of enhanced pensionary benefits, added the Court.

"Therefore, in the absence of any specific arguments on part of the learned counsel for the petitioner indicating that the said cut-off date has led to a blatantly capricious or outrageous result," the Court opined that respondents were justified in deciding to implement the recommendations of the Fifth Pay Commission with effect from 01.12.2011 and this exercise is not tainted by arbitrariness.

In the light of the above, the plea was dismissed.

Title: Tejinder Singh Bhathal and others v. State of Punjab and another

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