Summary
The Electricity Board’s employees could not demand dearness allowance at Central Government rates and dates when their settlement, read with the implementing Board proceedings and consistent practice, linked revision to the State Government’s rates and dates. Financial constraints also supported the chosen effective dates. Earlier rulings about paying sanctioned arrears in cash rather than crediting them to provident fund did not determine this dispute. The High Court’s directions for the disputed differential allowance were set aside.
Issues
- Whether the Board had to pay enhanced dearness allowance from Central Government effective dates despite the State-linked settlement and its financial position.
Provisions considered
- Clause 5, read with Board Proceedings BP (FB) No.58 dated 18 July 1998, Part III(a), Memorandum of Settlement dated 8 July 1998The agreed State Government formula and implementing provision for the same rates and dates were read harmoniously with the established practice. (¶¶ 13–20, 28–30)
Held
- The settlement and implementing Board proceedings governed the employees’ entitlement. The Board consistently followed State Government rates and dates, and the later settlement reiterated that practice. The unions could not insist on higher Central Government rates or treat the implementing provision as a unilateral alteration while accepting the remaining terms and leaving that provision unchallenged. (¶¶ 13–20, 28–30)
- The employer’s capacity to bear the additional burden and the State’s severe financial difficulties were relevant. On these facts, adopting 49% from 1 October 2002 and 52% from 1 July 2003 in line with the State Government was neither arbitrary nor contrary to the settlement. (¶¶ 21–28, 31)
- Earlier writ decisions concerned the mode of paying already sanctioned arrears, particularly their compulsory credit to provident fund. They did not resolve entitlement to the higher rates and earlier dates claimed here. (¶ 32–35)
Result
Appeals allowed; the impugned High Court judgments directing payment of the differential dearness allowance were set aside. No costs.