Is extension of Government Pay Commission benefits to employees of co-operative sugar mills automatic?

(Judgment of the Court was delivered by S.M.Subramaniam J.) Under assail is the writ order dated 09.12.2025, passed in WP.No.6506 of 2024. Tamil Nadu Sugar Mills Agricultural Graduate Association is the appellant herein.

The writ petition was filed to assail the reply given by the respondents vide proceedings dated 07.12.2023 and to direct the respondents to implement the recommendations of the 7th Pay Commission for common cadre employees working in Co-operative Sugar Mills and further direct the respondents to disburse and pay the remaining 3% of Special Grade and 3% of Selection Grade in accordance with G.O.Ms.No.237, Finance (Pay Cell) Department, dated 22.07.2013 with effect from 01.04.2013.

Admittedly, the members of the appellant Association are the employees working in various Sugar Mills across the State of Tamil Nadu. As per the appellant, they are falling under common cadre services as contemplated under Section 75 of the Tamil Nadu Co-operative Societies Act. It is not in dispute that Co-operative Sugar Mills have been registered under the provisions of Tamil Nadu Co-operative Societies Act, 1983. The service conditions of the employees working in Sugar Mills are governed under the said Act, Rules framed thereunder and the special bye-laws approved by the Registrar. It is under the provisions of the Act even the common cadre service employees are to be construed as the employees of the Co-operative Sugar Mills concerned. However, the competent authorities appointed under Section 75 will exercise powers under Section 75 to deal with the employees of the Sugar Mills. Service conditions of the employees of the Co-operative Society are governed under Rule 149 of the Tamil Nadu Co-operative Societies Rules. Conditions of service of the paid officers and servants of the Societies shall, taking into account its nature of business, volume of transaction and financial position, adopt with prior approval of the Registrar, a special bye-law governing the service conditions of its employees. The special bye-law shall inter alia prescribe the following: (i)Cadre strength and classification of various categories of posts and the qualifications required thereof for each such post. (ii)The method of recruitment for each such post. (iii)The scale of pay and allowances for each such post. (iv)Conditions of probation for each such post. (v)Duties and responsibilities for each such post. (vi)Leave of various kinds admissible and the conditions thereto for each such post. (vii)The penalties that may be imposed upon, the procedure for taking disciplinary action and inflicting various kinds of punishments on an employee holding each such post and the authority competent to entertain and dispose of appeals made against an order of punishment imposed by the competent authority on a disciplinary proceedings. (viii)Conditions relating to acquisition and disposal of movable and immovable property. Provided that a minimum period of three years of satisfactory service shall-be prescribed for eligibility for promotion from one category to the immediate next higher category of post. Provided further that the co-operative training at the appropriate level may be prescribed as a necessary qualification for specific categories of non technical posts.

Rule 149 (iii) denotes the scale of pay and allowances for each such post constituted and sanctioned for a Co-operative Society. However, on constitution of common cadre of service, Section 75 stipulates that salary (including allowances) of any such employees shall not be varied to his disadvantage. Thus, conjoint reading of Section 75, i.e., constitution of common cadres of service and the service conditions under Rule 149 of the Tamil Nadu Co-operative Societies Rules made it clear that if a particular cadre or post, if brought under the common cadre of services, then the salary they have received in the said Sugar Mills should be protected, i.e., it should not be varied to the disadvantage of the employees. The purpose of the provision is to ensure that the salary being received by an employee shall not be reduced to his or her disadvantage.

In the context of the above provisions, question arises whether the Government Pay Commission Mutatis Mutandis to be applied to the employees of the Co-operative Sugar Mills registered under the Tamil Nadu Co-operative Societies Act. The Government Pay Commission or the orders implementing the Pay Commission cannot be directly applied to the employees unless an administrative decision has been taken by the Government to implement the Pay Commission to the common cadre employees of the Co-operative Society. Thus, the relief sought for to implement G.O.Ms.No.237, dated 22.07.2013 is untenable. G.O.Ms.No. 237 applies to the Government employees. G.O.Ms.No. 237 is all about grant of one additional increment of 3% basic pay to the Government servants under the Tamil Nadu Revised Scales of Pay Rules, 2009. The said Government Order would apply only to the Government servants working in the Government department. An independent decision has to be taken by the Government and the Commissioner of Sugars to extend the benefits given to the Government employees. The learned counsel for the appellant would submit that the benefits had already been extended to all the employees of the Sugar Mills by taking an independent decision.

The grievance of the appellant is that 7th Pay Commission benefits are to be extended to the employees of the Co-operative Sugar Mills. The learned counsel for the appellant would submit that a Committee has been constituted to examine implementation of 7th Pay Commission by analyzing the cadres and posts, etc. It is brought to the notice of this Court that on account of the interim stay granted in a writ petition, the Pay Commission has not been implemented. However, the learned Additional Government Pleader would submit that even the One Man Committee has not submitted its report for further consideration of the Government. The Government has to take an independent decision for implementation of Pay Commission scale of pay to the employees of the Co-operative Sugar Mills.

In the context of the above facts, it is clear that a Committee has been constituted to analyze the cadres, scale of pay etc., for revision of pay to the employees of the Co-operative Sugar Mills. The Committee constituted is in the process of considering these issues. Report is yet to be submitted. This being the factual position, no cause of action has arisen to the writ petitioner Association to approach the High Court under Article 226 of the Constitution of India.

Implementation of Government Pay Commission to the employees of the Co-operative Sugar Mills are not automatic. The Government has to take a policy decision to extend the benefit of Pay Commission to the Government undertakings, Corporations, Companies, Co-operative Sugar Mills registered under the Tamil Nadu Co-operative Societies Act etc. Co-operative Sugar Mill is an independent entity and a Society registered under the Co-operative Societies Act. That being the factum, there is no automatic extension of Government Pay Commission to the employees of the Co-operative Sugar Mills. The Committee constituted has to submit a report. The report has to be examined by the Government and thereafter, the Government has to take an administrative decision considering various factors for implementation of Pay Commission. Such an exercise is in progress and therefore, the writ petition filed by the Association per se is not maintainable, pre-mature since no cause of action has arisen.

Therefore, the observations made by the Writ Court is unnecessary. Even the 3% increment was granted pursuant to the writ order impugned to the employees. Therefore, all further benefits if any to be granted, the Government has to take a decision and High Court in exercise of the powers of judicial review cannot issue a direction to implement Pay Commission to the common cadre employees of the Co-operative Sugar Mills which would fall beyond the powers of the judicial review.

Accordingly, the Writ Appeal stands dismissed. No costs. (S.M.S.,J.) (K.G.R.,J.)