India News

PSCMPF employees not entitled to pay scale equal to that of Punjab Government employees

New Delhi, July 11

The Punjab State Cooperative Milk Producers Federation (PSCMPF) employees are not entitled to benefits of pay scale equal to those of Punjab Government employees, the Supreme Court has ruled.

Allowing the federation’s appeal against a Punjab and Haryana High Court’s verdict, a Bench headed by Justice Sanjay Kishan Kaul said: “The grant of benefits of the higher pay scale to the Central/State Government employees stand on a different footing than the grant of pay scale by an instrumentality of the State”.

The federation’s employees Balbir Kumar Walia and others had moved the Supreme Court in 2011 challenging the high court’s March 19, 2009 order that ruled the federation was a “State” within the meaning of Article 12 of the Constitution. The high court had said the employees of the federation were entitled to pay scale equivalent to their counterparts in the State of Punjab from January 1, 1986, though the revised pay scale was allowed by the federation with effect from January 1, 1994.

However, the Supreme Court distinguished between the government and federation, saying: “The Central or State Government is empowered to levy taxes to meet the expenses of the state. It is always a conscious decision of the government as to how much taxes have to be levied so as to not cause excessive burden on the citizens. But the Boards and Corporations have to depend on either their own resources or seek grants from the Central/ State Government, as the case may be, for their expenditures”.

Rejecting the employees’ claim for equal pay, it said: “We do not find any merit in the argument claiming equal pay for the alleged equal work”.


In its July 9 verdict, the top court said: “The income generated by the Federation is not to be expanded only on payment of salary but is also required for upgradation of technology, renovation and expansion of plants etc. Therefore, the entire profit is not to be appropriated towards the wages of the employees alone”.

It said the profits had to be shared by the members of the Co-operative Society, but the employees of the Federation were not its members.


”We find that the decision that the Federation was in financial difficulties is based upon relevant material before the Federation. The process to arrive at such a decision can be said to be flawed only on the permissible grounds of illegality, irrationality and procedural impropriety…neither the decision-making process, nor the decision itself suffers from any such vice.

“We find that the order of the High Court is unjustified and in excess of the power of judicial review conferred on the High Court,” the SC further said, allowing the federation’s appeal.