Libertatem Magazine

Supreme Court Says That the Legality of the Government’s Economic Policies Is Not Subject to Legal Inquiry Unless They Are In Violation of the Statute or the Constitution.

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The petitioner filed this appeal against an order of the High Court of Punjab and Haryana’s Division Bench in Chandigarh. The court dismissed the writ petitions, ruling that the Punjab State Co-operative Milk Producers Federation Ltd. is a state under Article 12 of the Indian Constitution. From 1.1.1986 onwards, the employees are entitled to a pay scale comparable to their counterparts in the state of Punjab, according to the court though the revised pay scale was allowed by the Federation with effect from 1.1.1994.


Facts of the case:

Milk farmers in the state formed Primary Milk Producers Cooperative Societies at the village level. Primary Milk Producers Cooperative Societies belong to the District Cooperative Milk Producers Union, which in turn belongs to the Federation. Employees have claimed pay scale as of January 1, 1986, as reviewed by the Punjab Government Anomaly Committee. The federation, on the other hand, argued that it is not a state as defined by Article 12 of the Constitution. Because the Federation was facing severe financial constraints at the time, updated pay scales were given on January 1, 1994.

The report was implemented on 2.6.1989 by the Registrar (Cooperative Societies). According to the Pay Commission’s report, the Federation granted amended pay scales and allowances with effect from January 1, 1986.


Petitioner’s Argument:

The Federation’s lawyer argued that the High Court made a legal error in concluding that the date of implementation for the revised pay scales was unfairly set at 1.1.1994 by the High Court. The inability to modify pay scales from 1.1.1986 was not due to financial constraints.


Respondent’s Argument:

The respondent’s counsel maintained that, as of 1.1.1994, the Federation’s employees were not entitled to the same benefits as the rest of the Federation’s employees. He further claimed that the refusal to grant the new pay scale effective January 1, 1994, was arbitrary and discriminatory. The federation has claimed losses for several years, yet data released under the Right to Information Act on 22.7.2011 shows the Federation has been profitable from 1996-1997. He went on to say that classifying Milk Procurement Assistants as Grades I and II is illegal and that they should be paid equally under the principle of equal pay for equal work.


Court’s Observation:

The court observed that the two positions have different educational requirements and responsibilities. As a result, because Grade I is a higher job with larger obligations and responsibilities than Grade II, the concept of equal compensation for equal labor would not apply to them.

The court observed Crown Aluminium Works v. Workmen, in which it was found that there is no strict and inexorable convention that the wage structure once determined by Industrial Tribunals can never be modified to the detriment of workers. The wisdom and advisability of the government’s economic policies are not subject to judicial review unless it can be proven that they violate any statute or the Constitution.

It went on to say that the employees had not filed an appeal against the High Court’s decision. Different pay scales might be assigned based on educational qualifications, experience, and the nature of the job. As a result, the court determined that the employees do not have the right to the pay scale asserted in the writ suit.


Court’s Decision:

The court decided that the High Court’s order is unreasonable and goes against the High Court’s judicial review authority. As a result, the court granted the appeal and overturned the High Court’s instructions.

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