2005(2) ALL MR 54
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

H.L. GOKHALE AND N.N. MHATRE, JJ.

Full Time Medical Teachers' Association, Kalwa-Thane & Ors.Vs.The Commissioner, Thane Municipal Corporation & Anr.

Writ Petition No.1187 of 2002,Writ Petition No.864 of 2004

22nd September, 2004

Petitioner Counsel: Mr. RAHUL G. WALIA
Respondent Counsel: Mr. R. S. APTE,Mr. A. P. VANARSE

Constitution of India, Art.226 - Medical College run by Municipal Corporation - Teaching staff - Entitled to revision of pay scale as per 5th Pay Commission - Corporation bound by its own resolution.

At the time of establishment of a Medical College by a Municipal Corporation, it passed a resolution in the year 1992 that pay scales of the employees in the Medical Colleges will be as per with the rules framed by the State Government and University of Mumbai. Accordingly right from the beginning when the College started, the employees of the College were being paid the pay scales as per the pay scales of the Government Medical Colleges and they were being given the salaries as per the 4th Pay Commission. In the advertisement inviting applications for the posts of Lecturers it was clearly stated that the salaries will be as per the Government rules. It is also material to note that all the teachers are full time teachers with good qualifications and not entitled to any non-practising allowance. As of now, as far as the existing panel of teachers is concerned, the Corporation has not withdrawn the resolution that it had passed earlier in May, 1992. That resolution still continues to hold the field. There are certain obligations under that resolution of 1992 and the assurances contained in the resolution in the form of salaries on par which obviously created a legitimate expectation in the mind of the teachers who continued to be paid the salaries on par all these years until the revision was brought about by 5th Pay Commission. Thus the full time medical teachers of the Medical College run by the Municipal Corporation are entitled to revised pay scales as per the 5th Pay Commission. [Para 16,17,19]

The financial crunch by the Municipal Corporation cannot be permitted as an argument to deny the wages which are already accepted in a resolution of 1992 which is holding the field. So long as such a resolution is holding the field, the Corporation cannot go back and resile from the responsibility under the Corporation resolution. That the decisions of the State Government do not bind the Corporation ipso facto is of no avail as the Corporation itself has passed a resolution stating that it will follow the decisions of the State Government. Having accepted on its own the responsibility to pay the wages and salaries on par the Corporation is bound to fulfil its obligation under its own decision. [Para 17,18,19]

Cases Cited:
All India Judges' Association Vs. Union of India, 2002 SCC (L & S) 508 [Para 11]
State of U.P. Vs. U. P. Polytechnic Diploma Shikshak Sangh, JT 2000(10) SC 469 [Para 14]
Sunanda Pandharinath Adhav Vs. State of Maharashtra, 2001(1) Mh.L.J. 167 [Para 15]
Swaminarayan Education Trust Vs. State of Gujarat, 1994 Lab.I.C. 1389 [Para 15]


JUDGMENT

H. L. GOKHALE, J.:- Writ Petition No.1187 of 2002 is filed by an Association of Full Time Teachers working in the Rajiv Gandhi Medical College run by Thane Municipal Corporation and two of its office bearers to seek implementation of Resolution No.42 passed by the said Municipal Corporation on 18th May, 1992 and to grant the full time medical teachers the revised pay scales and allowances on par with the medical teachers employed by the State of Maharashtra. The Commissioner of the Municipal Corporation of Thane is the first Respondent and the State of Maharashtra is the second Respondent.

2. The Petition points out that when this Medical College was established by the Thane Municipal Corporation (hereinafter referred to as "the Corporation") the General Body of the Corporation passed a resolution being Resolution No.42 on 12th May, 1992 for that purpose. In that resolution it is recorded that the Corporation had passed an earlier resolution to set up the Medical College on 7th August, 1991. In accordance with this earlier resolution, a technical report was prepared for the approval of the State Government and of the University of Mumbai as also for incurring the expected expenditure. In Resolution No.42 it is further stated that from the report of the administration it is seen that the permission of the State Government as well as the affiliation to the University of Mumbai was shortly expected. After considering the proposal put up by the administration the General Body passed this Resolution No.42 to set up the Medical College.

3. The resolution further states that the college will admit 100 students to begin with in the first year. It thereafter stated that some 25% of the seats (though on merit) be reserved for the students residing in the Thane Municipal area and such recommendation be made to the State Government. Thereafter in paragraph 3 it is stated as follows :

"The students' tuition fees and the pay scale of the college employees will be both in accordance with the rules framed by the Government of Maharashtra and the Mumbai University and whenever there will be any changes therein with the approval of the State Government the same shall be applicable to the medical college being set up by the Municipal Corporation."

4. The Writ Petition points out that after this resolution was passed, the college was set up in due course and the teachers were engaged on full time basis in various categories such as Demonstrators, Lecturers, Associate Professors, Professors, Dean, Librarian, etc. They were given the scales which were then prevalent in the Government Medical Colleges. They were paid salaries as per the scales prescribed under Government Resolution dated 27th March, 1989 which was based on the 4th Pay Commission recommendations and which were effective from 1st January, 1986. The fact that the Medical Teachers in this College were paid the salaries as per the 4th Pay Commission is not in dispute and is not denied by the Corporation in its reply.

5. The grievances of the Medical Teachers started when the recommendations of the 5th Pay Commission were accepted and extended by the State Government to the teachers and employees in the Government Medical Colleges. The Government of Maharashtra passed a resolution on 27th January, 2000 granting a revision of pay scales to the teachers in the Government Medical, Dental, Ayurvedic Colleges. This resolution passed by the State Government referred to the recommendations of the 5th Pay Commission, thereafter the report made by the Rastogi Committee appointed by the University Grants Commission and its report. Thereafter it stated in the first paragraph of the resolution as follows :-

"After examination of this report, Government of India evolved the scheme of pay revision of the University and College teachers and other measurers for improvement of standards in higher education by their order dated 27th July, 1998 and subsequent letter dated 22nd September, 1998 and 6th November, 1998. Government of India accepted and approved the recommendations of the UGC to Central Universities and Colleges thereunder. Similarly, the Government of India recommended to the State Government to implement this scheme in the State University and affiliated colleges."

Thereafter the resolution states that the question of implementation of Government of India scheme was under consideration of the State Government and after careful consideration the State Government had decided to extend the package/scheme of 1996 for maintenance of standard of higher education in the State of Maharashtra. In clause No.2 of this resolution, it was stated that the revised pay scales will be implemented with effect from 1st January, 1996. The pay scales were given in Appendix-I to this resolution. A certain mechanism to pay the arrears was also provided in paragraph 8 of this resolution.

6. The Petition states that since the Petitioners were not given the pay scales as per this resolution, they represented from time to time. It is stated in paragraph 10(e) of the Petition that when it came to the other employees of the Thane Municipal Corporation, their pay scales were revised. That was of course because most of the other employees are unionised employees and were represented by their Unions/Associations and therefore their pay scales came to be revised in accordance with the awards/agreements entered by them with the Thane Municipal Corporation. However fact remains and it is averred in this sub-paragraph that the pay scales of the Petitioners were not revised for almost 15 years. It is ultimately after waiting for sufficient time that this Petition was affirmed on 8th November, 2001. It however appears that it came to be numbered in March, 2002.

7. This Petition came up for consideration before another Division Bench on 19th September, 2002. An affidavit-in-reply was affirmed by one Vishwanath Purushottam Kelkar on behalf of Respondent No.1 on 12th July, 2002. The Division Bench which heard the matter on 19th September, 2002 admitted the Petition. It referred to the resolution passed by the State Government on 27th January, 2000 which enhanced pay scales of the Medical Teachers from 1st January, 1996. It also recorded that the Medical Colleges of the Mumbai Municipal Corporation were also getting benefit of this resolution. The Court therefore passed the following interim order :

"Respondent Corporation is directed to pay to the teachers in their Medical College the pay scale as prescribed in the Government Resolution dated 27th January, 2000 with effect from the date of filing of the Petition i.e. March, 2002. Arrears to be paid within three months."

8. The Corporation challenged this order by filing Special Leave Petition. The said petition for Special Leave to Appeal No.1199 of 2003 came up for consideration before the Apex Court on 4th August, 2003. The Special Leave Petition was dismissed by passing the following order :-

"The impugned order merely gives effect to a resolution passed by the Government. We thus see no reason to interfere. The Special Leave Petition is accordingly dismissed.

We, however, clarify that whatever amounts are paid will be subject to the result of the pending writ petition. In case the petitioner (herein) succeeds, they will be entitled to adjust what has been paid against future salaries or to claim recovery. Earlier interim orders shall stand vacated. It is clarified that parties will be at liberty to urge all contentions and any observations made herein or in the impugned order will not be taken into consideration at the stage of final hearing."

It is material to note that the order passed by the Apex Court also refers to the fact that the impugned order was giving effect to the resolution passed by the Government. It however clarified that whatever amounts were paid were to be subject to the result of the Petition.

9. The above-referred affidavit-in-reply filed by Mr. Kelkar on behalf of the Corporation stated in paragraph 3 thereof that at the time of establishment of the College in 1992 the Petitioners as well as other employees were given pay scales on par with the Medical Teachers working under the Government of Maharashtra. Thereafter it is stated as follows :

"I further say that due to absence of adequate sources of revenue, Petitioners as well as other teachers of Rajiv Gandhi Medical College cannot be given revised scales."

In paragraph 4 of the reply it is stated that if the Respondent is forced to apply revised pay scale, it would have to spend approximately additional amount exceeding Rupees Seven Lakhs per month and Rupees One Crore per year and that the arrears from 1st January, 1996 will be exceeding Rupees Seven Crores. In paragraph 6 it is submitted that the orders issued by the Government do not automatically apply to the Corporation and hence the Corporation has partly modified the scheme proposed in the said Government Resolution and has proposed a scheme for teaching staff to be appointed in Rajiv Gandhi Medical College henceforth. Thereafter a particular scheme is reproduced in this affidavit. Inasmuch as no date of this scheme is given in the affidavit. We asked Mr. Apte, learned Counsel for the Corporation, as to what was this proposal and he placed on record a Resolution dated 19th June, 2002 passed by the Corporation. This Resolution contains some sort of a contract system and the payments to be made to the various categories of teachers from time to time. It is however stated in this Resolution that this proposal is meant for the teachers to be newly appointed. In the affidavit affirmed by Mr. Kelkar also it is stated in paragraph 8 that above pay scale are proposed presently only for the newly appointed teaching staff and negotiations will be continued with existing teachers and separate decision/further action will be suggested as per the decision of the Hon'ble High Court. Therefore it becomes clear that as on the date of filing of the affidavit there was no particular scheme or any change contrary to the Resolution of 1992 relied upon by the Petitioners and which Resolution had been passed by the Corporation accepting the liability to pay the teachers the salaries on par with the State Government.

10. Thus as seen from the reply, the defence of the Corporation is that they do not have adequate sources of revenue which is what is stated in paragraph 3, secondly that Government's orders do not automatically apply to the Corporation which is what is stated in paragraph 6 and thirdly some proposed scheme is prepared but it is supposed to apply to the teachers to be newly appointed.

11. As far as the above referred first submission namely that of inadequacy of the funds and sources is concerned, Mr. Walia submitted that this statement is not supported by any document. On the contrary, he referred to the book containing Budget of the Thane Municipal Corporation for the year 2004-2005 which also contains the revised budget for the year 2003-2004. He took us to page Nos.213 and 214 of this book. At Item No.6 on these pages, Rajiv Gandhi Medical College is mentioned. He points out that for the years 2000-2001, 2001-2002 and 2002-2003 the expenditure on establishment was Rs.2.53 crores, Rs.2.39 crores and Rs.2.83 crores respectively. On this background, a provision was made for Rs.5 crores for the year 2003-2004. The actual expenditure for this year came to Rs.4.21 crores. Thus he submitted that there was a surplus of Rs.69 lakhs in this year. For the year 2004-2005, the Corporation had made a budget provision of Rs.5.91 crores. He therefore submitted that there is no substance in the submission that there is any problem of finance. Alternatively however he submits that if there is any such crunch, that cannot be a ground to deny the legitimate expectations of the College teachers. He relied upon the observations of the Apex Court in the case of All India Judges' Association and Ors. Vs. Union of India and Ors. reported in 2002 SCC (L & S) 508. The observations there were in the context of the recommendations of Justice Shetty Commission and the financial difficulties which will be faced by the States in meeting the enhanced salaries of the Judges. The submission on account of financial difficulties has not found favour with the Supreme Court which expected the States to mobilise their resources. Mr. Walia then submitted that if this was the difficulty, still the order passed by this Court while admitting the Petition has been implemented by the Respondents after its confirmation by the Supreme Court and they have been paying the monthly salaries of the teachers as per the revision from March, 2002. Even when it comes to the arrears they are also being paid and as of now some eight instalments of the arrears under the order passed by the High Court while admitting the Petition remain to be paid. He submitted that it is not pointed out as to what difficulties arose in arranging the funds and therefore there is no substance in the argument raised on this count by the Corporation and it is for the Corporation to raise the necessary sources if required.

12. With respect to the second submission that the orders of the State Government do not bind the Corporation, Mr. Walia submitted that when the College was set up it was clearly known to the Corporation that the expectations of the State Government while setting up such Colleges will have to be honoured. He referred to the Resolution dated 9th June, 1992 passed by the State Government while permitting this College to be set up. He referred to sub-clauses (c) and (d) of Clause 5 thereof which state that the Rules framed with respect to education and the further rules in that behalf will have to be implemented by the College and that the Corporation will not make any demand with respect to the finances to the State Government. The submission of Mr. Walia was that this position was clearly known to the Municipal Corporation. It is therefore that they had passed the Resolution on 18th May, 1992 earlier wherein they had taken up the responsibility to make the payments on par with the State Government and as per the rules applicable to the Mumbai University. This was to persuade the State Government to grant the permission which it granted under the above Government Resolution of 9th June, 1992. In his submission it was thus legitimate expectation of the teachers that the Corporation will honour its decision. The teachers joined thereafter and those decisions were implemented for substantial period. Now with a further pay revision it was not permissible to the Corporation to back out and say that hereafter it will not pay the revised salaries as expected by the State Government. In his submission this was a fit case therefore where a Mandamus ought to be issued directing the Respondents to make the payments as directed by the State Government in its Government Resolution dated 27th January, 2000.

13. Mr. Apte, learned Counsel appearing for the Corporation, submitted that the Municipal Corporation was a body corporate and was an independent entity. In his submission the Resolutions passed by the State Government will not bind ipso facto the Municipal Corporation and it was open to the Corporation to have its own formula with respect to the salaries and it can decide the revision of pay depending upon its financial position. On a query from the Court as to whether any other employees of the Corporation were being given the salary as per the 5th Pay Commission, Mr. Apte informed that the Municipal Commissioner and some such officers of the State Government on deputation were being given the salaries as per the 5th Pay Commission. As far as the other employees are concerned, their salaries were revised under the agreements entered into by the Union/Association with the Corporation and/or Awards.

14. With respect to this submission that the decisions of the State Government and the date of implementation laid down by the State Government will not bind the Corporation, Mr. Apte relied upon a few authorities. Firstly, he referred to and relied upon a judgment and order of the Apex Court in the case of State of U.P. and another Vs. U. P. Polytechnic Diploma Shikshak Sangh and Anr. reported in JT 2000(10) SC 469. That was a case wherein the Assistant Lecturers in the Polytechnics aided by the State Government had demanded the same pay scales as given to the Assistant Lecturers in the Government Polytechnics. In the order passed by the Apex Court, it holds that the Assistant Lecturers in the aided Polytechnics will be entitled to the same scales as granted to the Assistant Lecturers in the Government Polytechnics. In that matter the High Court had granted the relief with effect from the date when the Assistant Lecturers in the Government Polytechnics were given the selection grade. The Apex Court modified that order. It directed that this scale and selection grade will be granted to the Writ Petitioners not from the date as directed by the High Court but from the date on which the Writ Petition was filed by them before the High Court.

15. The second judgment relied upon by Mr. Apte was in the case of Sunanda Pandharinath Adhav & Ors. Vs. State of Maharashtra & Ors. reported in 2001(1) Mh.L.J. 167. That was a case where the teachers in the private unaided schools had sought parity of pay scales on par with the aided schools who were being given the enhanced pay scales as per the 5th Pay Commission. Division Bench of this Court which heard this matter at Aurangabad noted that the managements of these private unaided schools do not have the freedom to increase the fees. It further noted that even if the fees are allowed to be increased by the State Government, there is no possibility that its retrospective effect would be entertained. The Division Bench therefore upheld the claim for parity but directed the benefit to be given not from 1st January, 1996 as claimed by the Petitioners but from 1st May, 1999. This was because the State Government had passed the Resolutions extending the benefit on 13th May, 1999 though making it applicable to the employees and the teachers in the private schools from 1st January, 1996. The Division Bench referred to a judgment of a Division Bench of the Gujarat High Court in Swaminarayan Education Trust & Ors. Vs. State of Gujarat & Ors. reported in 1994 Lab.I.C. 1389, wherein the Gujarat Division Bench had held that such resolutions regarding revision of pay scales could not be made applicable retrospectively to unaided private schools. The Division Bench of this Court referred to paragraph 23-A of the Gujarat High Court judgment which recorded the fact that such schools do not have the opportunity to get the amount recovered by raising tuition fees. It is this factor which had weighed on the Division Bench of Gujarat High Court and it was accepted by the Division Bench of this Court sitting at Aurangabad as a valid argument on behalf of the school management not to give retrospective effect. Mr. Apte submitted that the affidavit of Mr. Kelkar had pointed out the financial difficulties of the Corporation as also as to what would be the burden. He submitted that it is because of this that a changed formula was placed before the Municipal Corporation to be applied to the newly appointed teachers. He submitted that considering these aspects, no retrospective revision be granted to the Petitioners from 1st January, 1996 as directed by the State Government. At the most if the Court is so inclined the revision may be granted from the date of the filing of the Petition by the Petitioners if not from the date of the Resolution passed by the State Government.

16. We have noted the submission made by both the Counsel for the Petitioners as well as the Respondents. As noted above, in the facts of the present case, when the Municipal Corporation started the Medical College, it was given to understand by the State Government that it will have to meet all the expectations with respect to education and that there will not be any financial expectation. It is at that time itself that in May, 1992 the Municipal Corporation passed the resolution taking the responsibility on itself and in the resolution it accepted that pay scales of the employees in the Medical Colleges will be as per with (sic) the rules framed by the State Government and University of Mumbai. The fact also remains that right from the beginning when the College started, the employees of this College were being paid the pay scales as per the pay scales of the Government Medical Colleges and they were being given the salaries as per the 4th Pay Commission. As noted above, the problem has come up only when the 5th Pay Commission recommendations were approved by the State Government in 2000 to be made effective from 1st January, 1996. In this connection it will also be useful to refer to the advertisement which the Thane Municipal Corporation has given when Lecturers were appointed. In the advertisement it was clearly stated that the salaries will be as per the Government rules. It is also material to note that all the teachers are full time teachers with good qualifications and not entitled to any non-practising allowance.

17. As we have noted above, now the Corporation has proposed to the General Body and then the General Body has passed a resolution to introduce some kind of a contract system. That is the resolution of 19th June, 2002 and this resolution also makes it clear that it will be concerning the teachers to be newly appointed. It is material to note that this resolution is passed when the Petition was already pending in this High Court. The representations made by the first Petitioner Association on behalf of the teachers were also pending with the Municipal Corporation. As of now, as far as the existing panel of teachers is concerned, the Corporation has not withdrawn the resolution that it had passed in May, 1992. That resolution still continues to hold the field. There are certain obligations earlier under that resolution and the assurances contained in the resolution in the form of salaries on par which obviously created a legitimate expectation in the mind of the teachers who continued to be paid the salaries on par all these years until the revision was brought about by 5th Pay Commission. In our view, the reference to the unaided schools and colleges made by Mr. Apte is of no use for the benefit of the Corporation. The unaided schools and colleges undoubtedly do not have their own sources. The Municipal Corporation certainly has wider methods of collecting its revenue and it cannot be compared with a school or college which is not run by such an authority. The financial crunch by the Municipal Corporation cannot be permitted as an argument to deny the wages which are already accepted in a resolution which is holding the field. So long as such a resolution is holding the field, the Corporation cannot go back and resile from the responsibility under the Corporation resolution. The judgments relied on by Mr. Apte therefore will not help him inasmuch as the propositions laid down therein are clearly in cases of unaided colleges which are on a different footing. All those matters were decided on the facts of those cases as against which in the present case we have a solemn resolution of the Corporation which still holds the field and which cannot be permitted to be departed by the Corporation as rightly contended by the Petitioners.

18. The submission of Mr. Apte that the decisions of the State Government do not bind the Corporation ipso facto will not help carry his argument in the present case. As stated above, as far as the present case is concerned, the Corporation itself has passed a resolution stating that it will follow the decisions of the State Government. Besides Mr. Walia has also pointed out that the pay scales which the State Government had adopted were as per the expectations laid down by the University Grants Commission. That is also reflected in the resolution passed by the State Government. He has drawn our attention to the booklet of Notifications published by University Grants Commission. In Appendix-I, clause (v) it is stated that the revised scale of pay as contained in the Annexures will be effective from 1st January, 1996. The pay scales given in the Annexures are the same as directed by the State Government in its resolution of 2000. Those pay scales are being given by the Colleges run by the State Government as also by the Mumbai Municipal Corporation. Mr. Walia has drawn our attention to the resolution passed by the Mumbai Municipal Corporation in this behalf which also accepts the parity and also the responsibility to pay the wages from 1st January, 1996. In our view, the position of Thane Municipal Corporation is not much different from the Mumbai Municipal Corporation. If at all there are financial difficulties they are there for both the Municipal Corporations and if there is a possibility to raise the revenue it is available again to both the Municipal Corporations. That apart, having accepted on its own the responsibility to pay the wages and salaries on par, in our view the Corporation is bound to fulfil its obligation under its own decision.

19. In these circumstances, we make Rule in Writ Petition No.1187 of 2002 absolute in terms of prayer clause (a) as well as prayer clause (b) excepting the prayer for interest about which we will be giving directions hereafter.

20. As we have noted earlier, the teachers of this College are already being paid salaries as per the 5th Pay Commission. The arrears from March, 2002 are also in the stage of being cleared, though we are told that some eight instalments are yet to be cleared and they are expected to be paid in next eight months. We have asked Mr. Apte as to how much time Respondent Corporation will require to clear the arrears from 1st January, 1996 to end of February, 2002. He has left it to the Court to give sufficient time to the Corporation to clear the arrears. In our view, the eight months period within which the Corporation is going to clear the remaining instalments should be sufficient period for the Corporation to clear the arrears due to the employees for the period 1st January, 1996 to end of February, 2002. We direct the Corporation to clear the arrears of this period along with those remaining eight instalments i.e. by the end of May, 2005. We further add that in the event the arrears are not cleared by end of May, 2005, the Corporation shall pay the remaining amount of arrears at the rate of 6% per annum until the arrears are paid.

21. Mr. Apte applies for stay of this judgment. Mr Walia opposes this request. The judgment and order will remain stayed for a period of eight weeks.

22. In view of Rule being made absolute in Writ Petition No.1187 of 2002, Writ Petition No.864 of 2004 filed by the Corporation stands dismissed. It seeks to challenge the application of State Government Resolution dated 27th January, 2000 to the Corporation and the challenge is repelled for the reasons stated above.

23. Parties to act on an authenticated copy of this judgment.

Order accordingly.