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The Bombay High Court has asked the loss-making Maharashtra State Financial Corporation to implement the Sixth Pay Commission pay scales for its staff without waiting for the state government's approval.
Since the financial corporation is an autonomous body, having power to determine the conditions of appointment and services as also the remuneration which is payable to its employees, it is not necessary for the Board of Directors to obtain prior approval of the state government, said Justices M S Sonak and V M Kanade in a recent order.
The bench was hearing a petition of Bhartiya Kamgar Karmachari Mahasangh, claiming that MSFC was not implementing the pay scales of Sixth Pay Commission although its directors had approved the new wages at a meeting held in February 2012.
The petitioner said that in another meeting held later, the Board of Directors had reiterated their earlier decision and resolved that the corporation should wait for a month in order to get the approval of the state to pay new wages.
Petitioner's Counsel C G Gavanekar submitted that the approval of the state government was not necessary since MSFC was an autonomous body. He submitted that under Section 23 of the State Financial Corporations Act, 1951, MSFC has power and authority to lay down the service conditions of its employees including pay scales and remuneration payable to staff.
Government Pleader J S Saluja argued that MSFC had incurred losses to the tune of Rs 570 crores and the state had provided financial assistance of Rs 136.49 crores in March 2013 to the corporation. In view of the precarious financial condition of MSFC, the state has not granted approval so far.
Saying the plea was without substance, the court dismissed the government's contention that the MSFC would not be able to pay new wages in view of losses incurred by it.
The judges said that so far as conditions of service and remuneration of the employees of MSFC are concerned, these are matters for corporation to consider and, therefore, will not be dependent on the other factors. As such, the reasons given by the state government for not giving the approval cannot be accepted, said the judges.
MSFC need not wait till the approval is given by the state and shall implement the decision taken by its directors by giving the benefit of VIth Pay Commission to its employees, the Judges added.
