1. The petitioners’ case is that they are Class I Officers of Kolkata Port Trust presently Syama Prasad Mookerjee Port, Kolkata. They are all superior to the Class III and Class IV workmen categories of employees in the Port.
2. Mr. Majumder, learned senior counsel for the petitioner submits that by reason of the pay revision of the Officers in SMPK after every ten (10) years, the workmen category of employees have surpassed the pay scales and pay of their superiors in office, that is the Class-I Officers, since the workmen category of employees in Port gets their pay revised after every five years on the basis of tripartite industrial settlements arrived at in the office of the Conciliation Officers under the Industrial Disputes Act, 1947. Resultantly, superior officers get lesser pay and also lesser pension than their subordinates.
3. This anomaly had led to wide scale dissatisfaction amongst the Officers of the Port. To address such anomaly, an Anomaly Committee was constituted in 2014. The one-man Anomaly Committee recommended merger of 50% of Dearness Allowance with the Basic Pay of the Officers with effect from 1st January, 2012. Implementation of such recommendation of 50% DA merger would bring the Basic Pay of the Officers at a higher pay point/stage in the pay scale.
4. The recommendation of the Anomaly Committee came at a stage when the Officers were in the pay revision period of 1st January, 2007 to 31st December, 2016. The next pay revision was due from 1st January, 2017 to 31st December, 2026.
5. Since 1st January, 2017, the workmen categories have received two wage revision by reason of two industrial settlements arrived at - one in 2017, and the other in 2022. Naturally the rate of growth or pay revision of the workmen is faster than the Officers and the pay scales of workman have become higher than that of the officers Class-I.
6. Mr. Majumder further states that in respect of the pay revision of Officers commencing from 1st January, 2017, the disparity was sought to be redressed by granting 17.5% of Basic as 'Special Pay' with effect from 1st January, 2012. This would fix the pay of the respective Officers at a higher stage on 1st January, 2012 with a consequential pay fixation at a higher stage of the pay scale operative during the said period.
7. The Ministry of Finance by order dated 10th July, 2017 approved the Special Pay for the 'affected' Officers subject to a monthly ceiling of Rs.6,890/-.
8. Additionally, the Department of Expenditure, before implementing the pay revision effective from 1st January, 2017 had commented that withdrawal of Special Pay would restore the anomaly to the adverse affectation of the concerned Officers.
9. Thus, there was a conscious decision taken by the Ministry of Shipping and approved by the Ministry of Finance to grant 17.5% Special Pay to be merged with basic of Class I and Class II Officers with effect from 1st January, 2012, which decision was taken in 2017.
10. The implementation of grant of “Special Pay” was made on July, 2017, a stage when the Pay Revision Committee's recommendation was still not finalized for the operative period from 1st January, 2017 to 31st December, 2026. The petitioners received this benefit from July, 2017 till 05.02.2020 (Pay Revision implementation date).
11. The pay revision was implemented on 5th February, 2020 with effect from 1st January, 2017. However, at para 2.3 of the Pay Revision Order, the Special pay was directed to be “subsumed” in the pay revision.
12. Mr. Majumder, argues that the objective criterion for merging 17.5% Special Pay with basic was to preserve the mark of distinction between the superiors and the subordinates. A withdrawal would restore the anomaly where a subordinate would again get higher pay than his superior. This will lead to administrative anarchy.
13. However, while implementing the pay revision with effect from 1st January, 2017 vide order of 5th February, 2020, such 17.5% Special Pay was withdrawn from the Basic Pay of Class I and Class II Officers by purportedly referring to the word "subsumed". This has restored the anomaly which was sought to be redressed.
14. It is submitted that pay revision entails an upward revision of the pay scale as a whole with determination of the method of pay fixation. A pay revision exercise applies en masse to all persons involved in the pay revision, whereas pay fixation or pay fitment is personal to an employee. There is thus a marked difference between pay revision and fitment of pay.
15. If as a result of pay revision of 2020 effective from 1st January, 2017, the pay scales of Officers had been revised upwardly that would not mean that Officers borne in the respective scales of pay would get higher pay than their subordinates, but again by reason of two successive tripartite wage negotiation settlements for the workmen, their pay scales have become higher than those of the Class I and Class II Officers.
16. An illustration by the petitioners is given below:-
| Class I Officer | Class III workmen |
| 1st January, 2017 Rs. 50,000-1,60,000 (Lowest) | 1st January, 2017 Rs. 36,500-88,700 (Highest) |
| 1st January, 2022 Rs 50,000-1,60,000 | 1st January, 2022 Rs. 51,500-1,28,400 |
18. Mr. Majumder further argues that, successive Anomaly Committees have held in favour of continuance of such 17.5% Special Pay to be merged with basic for the Officers of Port. Such committees have been constituted in 2022 and 2024. This itself shows that the grievance and disparity continue to exist.
19. Thus it is submitted that, the withdrawal of Special Pay from the Basic of the Officers while implementing pay revision from 1st January, 2017 is illegal and arbitrary for the following reasons:-
(a) Pay scales of subordinates can never be higher than superiors. Paritosh Paruk & Ors. vs. State of West Bengal & Ors. reported in 87 C.W.N. 747 (paras 12 and 13).
(b) The conscious and rational decision taken by Expert Bodies for a specific purpose, that is, to preserve the mark of distinction between the superiors and the subordinates, has been overridden by an unreasoned decision.
(c) An unreasoned decision is arbitrary and violative of natural justice.
(d) As per the Government of India (Transaction of Business) Rules, 1961 published by the Cabinet Secretariat, no Department, shall, without the previous concurrence of the Ministry of Finance, issue any order which may relate to the pay or allowances of government servants or to any other conditions of their service having financial implications. Since Ministry of Finance had itself granted this Special Pay and objected to by the department of expenditure for withdrawal of the same, the impugned action taken is violative of such Administrative Rules of the Government of India.
(e) The word "subsume" used in Para 2.3 of Pay Revision order dated 05.02.2020 in its dictionary sense would mean absorption and not exclusion. Therefore, ignoring “Special Pay” for the purpose of pay revision and fitment thereof in respect of Class I Officers is on a mutually inconsistent stand of the Central Government. Once a figure is “subsumed” in basic pay, the same cannot be ignored for the purpose of pay fixation.
20. Mr. Majumder refers to the meaning of the word "subsumed" in the Shorter Oxford English Dictionary, Websters Dictionary and Black's Law Dictionary to explain it’s proper meaning and thus it’s implication.
21. It is thus submitted that the writ petition be allowed and 17.5% Special Pay be merged with Basic Pay with effect from 1st January, 2012 with adequate fitment (including being considered for the purpose of Pay Revision w.e.f. 01.01.2017) and payment of arrears thereupon. The withdrawal of Special Pay be revived from 05.02.2020, subject to monthly ceiling of Rs.6890/- and all arrears be paid from 05.02.2020, Furthermore, the current basis of the Class-I officers be fixed by adding this 17.5% Special Pay as part of basic.
22. That apart, the relevant provision for withdrawal of Special Pay incorporated in the Pay Revision Order dated 05.02.2020 may also be directed to be rescinded.
23. The following judgments are relied upon by the petitioners:-
i) Paritosh Paruk & Ors. vs. State of West Bengal & Ors. reported in 87 C.W.N. 747 (paras 12 and 13);
ii) Lalit Mohan Deb & Ors. vs. Union of India & Ors. reported in (1973) 3 SCC 862 (para 5, 6 & 7);
24. On the other hand, Mr. Mitra, learned senior counsel for the Kolkata Port Trust being the respondent no.1 herein, submits that KoPT now SMPK, is an implementing organization of any decision taken by the Ministry of Shipping in concurrence with the Ministry of Finance and, therefore, is under obligation to implement the revised formula as and is directed and cannot act contrary to the direction of the Government of India.
25. Learned Advocate for the respondent no.2 states that the anomaly that had occurred upon the wage revision of Group C and Group D employees of the Port Trust employees with effect from 01.01.2012, has been resolved.
26. The Special Pay of 17.5% of mean pay grades, which had been granted to Class I & II Port officers affected by pay anomaly, was subsumed in the pay revision effective from 01.01.2017. However, it was claimed by Officers' Associations that after subsumation of the special pay, many officers are again suffering from pay anomaly wherein they are getting less pay than some Class III & IV employees.
27. This issue was raised in the second meeting of the Anomaly Committee, which was held on 03.10.2022. The Anomaly Committee recommended that a separate committee may be constituted in order to study this matter in depth along with probable financial implications and other modalities. The composition of such committee was to be suggested by Indian Ports Association (IPA).
28. The minutes of the meeting were conveyed to all members of the Anomaly Committee, including MD, IPA vide communication dated 06.10.2022.
29. Vide letter dated 11.11.2022, a committee was constituted by IPA under the chairmanship of Dy. Chairman, Mormugao Port Authority (MoPA) to look into the request of Officers Associations for revision of fitment formula revised pay, by adding the component of special pay @ 17.5% of mean basic pay that was withdrawn after the Pay Revision. IPA was requested to expedite the matter and provide the final report. The matter was further referred by IPA to a resource person for giving his expert views. Vide letters dated 17.01.2024, IPA informed that it has engaged 2 members retired from Department of Personnel & Training to examine the matter.
30. The matter was later referred by IPA to a committee constituted under the Chairmanship of Dy. Chairperson, NMPA vide OM dated 18.09.2024. However, final recommendations of these committees were not officially forwarded by IPA to this Ministry.
31. Subsequently, a committee under the Chairmanship of Chairperson, COPA, Shri Kasiviswanathan was constituted by IPA vide Order dated 13.02.2025 to examine pay anomaly issues of Class I & II Officers of Major Ports and to submit report. The Report of the Kasiviswanathan committee has been forwarded by IPA to the Ministry on 23.06.2025. The Report is being examined and a clarifications pertaining to recommendations made by the committee have been sought from IPA vide letter dated 04.07.2025. Since then it is submitted that no further instructions have been received.
32. On hearing the learned counsels for the parties and considering the materials on record, it appears that:-
i. Admittedly there was a pay anomaly between the class I officers and class III & IV employees.
ii. Special pay of 17.5% of basic was granted from January, 2012 to remove such disparity and this was implemented from July, 2017.
iii. Pay revision was implemented on 5th February, 2020, w.e.f. January, 2017 and in para 2.3 therein the special pay of ‘subsumed’ that is treated as ‘absorbed’.
iv. But after the pay revision, since 1st January, 2017, the workmen categories have received two wage revision by reason of two industrial settlements arrived at - one in 2017, and the other in 2022, and the same is revised every five years and once again the pay of class III & IV employees have become higher than the class I officers as no such enhancement or revision was done in respect of the said officers and thus the said anomaly was revived to the position prior to January, 2012.
v. Thus it appears that the special pay was not ‘subsumed’ but was actually “withdrawn” which thus gave rise to the said anomaly.
33. It is the petitioners’ case that if the conscious decision taken by the Ministry of Shipping and approved by the Ministry of Finance to grant 17.5% Special Pay to be merged with basic of Class I and Class II Officers with effect from 1st January, 2012, which decision was taken in 2017, was implemented, the anomaly would not remain, but the same being withdrawn, has caused this anomaly and thus serious prejudice to the petitioners, in spite of the fact that the Ministry of Finance by an order dated 10th July, 2017 approved the Special Pay for the 'affected' Officers.
Additionally, the Department of Expenditure, before implementing the pay revision effective from 1st January, 2017 had commented that withdrawal of Special Pay would restore the anomaly to the adverse affectation of the concerned Officers.
34. The special pay was approved by the Ministry of Finance by an order dated 10th July, 2017.
35. The Department of Expenditure before the pay revision on 1st January, 2017 was made effective, had commented that withdrawal of special pay would restore the anomaly to the adverse affectation of the concerned officers.
36. Thus it appears that if the special pay would be permitted to remain, then there would not be any anomaly of wages, that is the salary of the class I officers being less than the wages of class III & IV employees.
37. The word ‘subsumed’ applies in this case, only at the stage, when the pay revision was implemented, when initially there is no anomaly. Later on, the same being withdrawn, the anomaly of wages once again surfaced/revived.
38. This it appears was done without the consent or order of the ministry of finance and or the department of expenditure, even when the same (special pay) had been implemented with their permission and has financial implication.
39. The Government of India (Transaction of Business) Rules, 1961, do not directly apply to statutory bodies. Instead, these rules apply strictly to Central Government ministries and departments. However, the administrative ministries that oversee these statutory bodies are bound by them when processing approvals or service conditions.
40. Para 4 of the said rules of 1961 provides the Inter-Department Consultations:-
Clause (2)(c) therein relates to the number or grade of posts, or to the strength of a service, or to the pay or allowances of Government servants or to any other conditions of their service having financial implications;
41. The Delegation of Financial Powers Rules (DFPR). 2024 apply directly to all Central Government Ministries, attached, and subordinate bodies, and the core principles and limits outlined in the DFPR and General Financial Rules (GFR) act as the governing baseline and as such the financial procedures established by the Ministry of Finance are deemed applicable also to statutory authorities.
42. In the present case no such permission seems to be present, which prima facie thus makes the “withdrawal” of the “special pay” an act without authority and thus liable to be quashed and set aside. Clause 2.3 of the PRC order dated 05.02.2020 which is as follows:-
“2.3 Special Pay of 17.5% which was granted to officers affected by Pay Anomaly vide this Ministry's Order No. 29018/13/2013-PE-1 dated 20.07.2017, is to be subsumed in this Pay Revision. Accordingly, while working out the fitment benefit w.e.f. 01.01.2017, the element of Special Pay of 17.5% is to be ignored. A uniform fitment benefit @ 15% on the Basic Pay + DA as on 01.01.2017 would be provided to all Officers." is thus quashed and set aside.
43. The writ petition is thus allowed.
44. The “special pay” approval given by the Ministry of Finance vide order dated 10th July, 2017, effective from January, 2012, and supported by the Department of Expenditure, shall continue to remain in force. The respondent authorities shall appropriately refix the “pay” on addition of the “special pay” w.e.f. the date it was “withdrawn” in respect of the petitioners herein, within three months from the date of this order, along with arrears which also be disbursed within three months from the date of this order, along consequential benefits (if any).
45. Interim order, if any, stands vacated.
46. Connected applications, if any, also stands disposed of.
47. Urgent certified website copy of this judgment, if applied for, be supplied expeditiously after complying with all, necessary legal formalities.