Telangana HC Directs Singareni Collieries to Apply 3rd PRC to Employees Promoted to Executive Grade in August 2016

Sixteen employees promoted from non-executive to E-1 grade in August 2016 were wrongly denied 3rd PRC benefits; the High Court orders pay re-fixation with 6% interest within four months.

The High Court for the State of Telangana has directed The Singareni Collieries Company Limited to re-fix the salaries of sixteen employees in the Executive E-1 grade by applying the 3rd Pay Revision Committee circular dated 25 October 2018, and to pay all arrears with interest at 6% per annum within four months. Justice T. Madhavi Devi, sitting singly, held that the employees, promoted from non-executive posts to E-1 grade in August 2016, were on the company's rolls as Executives on 31 December 2016, the eligibility cut-off date prescribed by the 3rd PRC circular itself, and were therefore entitled to the pay revision. The company's refusal to extend the 3rd PRC to them, while having already applied the X-National Coal Wage Agreement in their non-executive cadre, was found to be illegal and arbitrary.

How the Dispute Arose

The sixteen petitioners were employed in non-executive posts with Singareni Collieries and were drawing wages under the IX-Wage Board recommendations. In February 2016, the company issued a notification inviting internal candidates to apply for, among other posts, Junior Survey Officer (E-1 Grade) and Programmer Trainee (IT) (E-1 Grade). Petitioners 1 to 15 applied for the Junior Survey Officer post and petitioner 16 applied for the Programmer Trainee post. All sixteen were selected.

Provisional appointment orders were issued on 5 August 2016 for petitioners 1 to 15 and on 6 August 2016 for petitioner 16. Posting orders followed on 24 September 2016 for petitioners 1 to 15, directing them to report to various locations, while petitioner 16 was directed to report to the General Manager (IT) at Kothagudem. All sixteen reported for duty accordingly.

After completing three years of service in E-1 grade, all petitioners were promoted to E-2 grade, petitioners 1 to 15 as Survey Officers with effect from 1 September 2019, and petitioner 16 as Programmer (IT) with effect from 1 September 2020.

The pay-related grievance arose from two subsequent wage revision events. The X-National Coal Wage Agreement was signed on 13 November 2017 and made applicable with effect from 1 July 2016 to all employees on the company's rolls as on that date. Since the petitioners were in the non-executive cadre on 1 July 2016, the company did revise their non-executive wages under the X-NCWA. However, when fixing their E-1 executive pay, the company used the IX-Wage Board figures as the base rather than the X-NCWA-revised non-executive pay. Separately, the company issued the 3rd PRC circular on 25 October 2018, revising executive pay scales with effect from 1 January 2017, but applied it to the petitioners on the basis of the lower, pre-X-NCWA-revised pay that had been fixed at the time of their August 2016 appointment.

The petitioners submitted representations on 6 December 2017, 3 November 2019, 5 November 2019, 28 November 2019, and 19 March 2021. None were disposed of. They then filed Writ Petition No. 11766 of 2021 seeking a writ of mandamus to declare the company's inaction illegal and to direct proper implementation of both the X-NCWA in the non-executive cadre and the 3rd PRC in the E-1 executive cadre, with arrears.

The Company's Defence

The Standing Counsel for Singareni Collieries relied on the counter affidavit filed by the respondents. The company's position was that the tenure of pay revision for non-executives is five years and for executives it is ten years. The petitioners were non-executives when promoted to E-1 grade and their pay was therefore fixed under the IX-NCWA. After promotion, the 3rd PRC applicable to executives was applied to them from 1 January 2017.

The company argued that the petitioners were appointed to the executive cadre during the intervening period between the non-executive and executive revision cycles — specifically between 1 July 2016 and 31 December 2016. Granting them a fitment benefit based on the X-NCWA-revised non-executive pay and then applying the 3rd PRC on top of that would, according to the company, amount to a twofold increase that is not lawful.

The company also pointed to a structural difference between the two cadres: executives receive perks at 35% of pay, whereas non-executives have no such component. It further referred to a Coal India Limited order dated 31 May 2013, under which subordinate engineers in a comparable situation were given the option to revert to their substantive non-executive posts as a special case, but stated that no such guidelines had been issued by Singareni Collieries and therefore the petitioners had not made out a case for pay revision.

The Court's Reasoning

Justice T. Madhavi Devi identified the precise scope of the dispute at the outset: the petitioners' entitlement to X-NCWA revision in the non-executive cadre was not in dispute. The only question was whether the 3rd PRC applied to them in the executive cadre.

The court examined Clause (XV) of the 3rd PRC circular dated 25 October 2018, which is reproduced at pages 34 to 45 of the writ papers. That clause states that the revised pay scales are applicable to executives who were on the rolls of the company as on 31 December 2016 and continued thereafter, and that executives who joined on or after 1 January 2017 would be deemed to have been appointed in the revised scale.

The court read the clause plainly. The 3rd PRC does not require an executive to have completed ten years of service as an executive. The only condition is that the employee must have been on the rolls as an executive on 31 December 2016. The petitioners were promoted to E-1 grade in August 2016 and were therefore on the rolls on the prescribed date. The court held they were entitled to the 3rd PRC.

The court also noted that both the X-NCWA and the 3rd PRC were issued after the petitioners' promotion to E-1 grade. The X-NCWA was signed on 13 November 2017 and the 3rd PRC on 25 October 2018, both post-dating the August 2016 appointments. The petitioners were therefore eligible for both revisions with effect from the respective dates of appointment. The company had already implemented the X-NCWA in the non-executive cadre but had failed to give effect to the 3rd PRC in the E-1 cadre. That failure was characterised as illegal and arbitrary.

The court also recorded that the petitioners' representations, the earliest of which was filed in December 2017, had not been disposed of by the respondents even by the date of hearing.

Order

Justice T. Madhavi Devi disposed of Writ Petition No. 11766 of 2021 with the following directions:

• The respondents are directed to re-fix the salary of the petitioners by implementing the 3rd PRC in the E-1 cadre.
• The respondents shall pay arrears of pay and all consequential benefits with interest at 6% per annum.
• Payment must be made within four months from the date of receipt of a copy of the order.

There is no order as to costs. Miscellaneous petitions, if any, pending in the writ petition stand closed.