University Must Collect Funds From Alternative Sources To Discharge Pensionary Benefits Under Previous Revised Pay Commission: Bombay High Court

It held that notwithstanding the absence of grants, the institution bears the responsibility to explore innovative avenues for fundraising to meet its obligations concerning payment under the revised pay commission.

Brief Facts:

The Petitioners are retired employees of Shreemati Nathibai Damodar Thackersey (SNDT) Women's University. They filed writ petitions in the Bombay High Court (“High Court”) and argued they were not paid retirement benefits as per the 7th Pay Commission applicable to the University and also that they were not paid correct and admissible dearness allowance.

There were two undisputed facts: firstly, that the 7th pay commission was applicable to the University, and secondly, that pensionary benefits as per the 7th pay commission were not being provided to the Petitioners. The current pensionary benefits, as per the 6th pay commission, were being paid. The Petitioners argued that the Dearness Allowance, which is enhanced for other employees, was not being enhanced for them. They claimed that there was a substantial difference between the pension provided under the 6th and 7th pay commissions, causing them serious hardship. The Petitioners highlighted that while the Dearness Allowance for existing employees stands at 164% of the basic pay, theirs remained at 142%.

The University stated that it will pay pension as per the 7th pay commission once a sufficient corpus is generated, which it anticipates by June 2025. Despite requests for a reasonable installment plan, the University did not provide a concrete solution.

The Petitioners' counsel emphasized that all Petitioners were senior citizens, some of whom have passed away, leaving their claims to be pursued by their heirs.

Observations by the High Court:

The High Court referred to the Maharashtra Public Universities Act 2016 ("the Act of 2016") in the context of ensuring the welfare of the employees, particularly regarding the implementation of the 7th pay commission recommendations. It held that the University, being a statutory body under this Act, is obligated to uphold certain standards of education and academic excellence, which inherently rely on the participation and welfare of its teaching and non-teaching staff. The Act of 2016 includes provisions for funds, accounts, and audits, with a specific focus on the Shreemati Nathibai Damodar Thackersey Women's University under Chapter 13.

The High Court held that the University's obligations towards its employees should not be reactive but proactive. The implementation of the 7th Pay Commission recommendations necessitates financial preparedness and allocation, which should have been initiated when the commission's decisions were announced. The High Court underscored that waiting until a petition is filed before taking action on this matter is untenable. Even when prompted by the High Court to provide a timeline for action, the University failed to demonstrate tangible efforts toward securing funds.

The High Court referred to the decision of the Supreme Court in Mahatma Gandhi Mission and Anr. v. Bhartiya Kamgar Sena and Ors., and emphasized the institution's responsibility to explore innovative means of raising funds to meet its financial obligations, even in the absence of received grants. The High Court held the University's stance of refusing to consider payment until June 2025 unacceptable, particularly concerning its own employees.

Consequently, the High Court issued an interim order directing the University to commence payment of pensionary benefits, including dearness allowance, to the Petitioners as per the 7th pay commission recommendations from July 1, 2024, onwards. Furthermore, regarding arrears, the High Court stated a structured installment plan to ensure timely and phased payments.

Case Title: Mrs. Prachi P. Kulkarni vs State of Maharashtra and Ors. and Connected Matters

Case Number: (907) WRIT PETITION (L) NO. 3980 OF 2022 and Connected Matters

Advocate for the Petitioner: Mr. Ajit Kenjale i/b. Mr. Sai Rajendra Kadam for the Petitioners in WPL/3980/2022, WPL/4069/2022, WPL/3987/2022, WPL/3991/2022. Mr. Ajit Kenjale a/w. Mr. Sai Rajendra Kadam for the Petitioners WP/12161/2021,

Advocate for the Respondent: Ms. Disha Vardhan for Respondent Nos. 2 and 3 in all Petitions. Mr. Milind More, Addl. GP for the Respondent No. 1 in WPL/12161/2024. Ms Najia Sheikh, AGP for the Respondent No. 1 in WPL/4069/2022 and WPL/15683/2024. Mr. Himanshu Takke, AGP for the Respondent-State in WPL/3987/2022. Mr. Swaraj Gupte, AGP for Respondent-State in WPL/3991/2022 Mr. Manish Upadhye, AGP for Respondent/State in WPL/3980/2022.

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