The Madras High Court has ruled that High Courts, in exercising writ jurisdiction, cannot delve into enquiries on pay parity between public sector undertaking (PSU) employees and state government staff. A division bench of Justices SM Subramaniam and C Kumarappan set aside a single judge’s order granting wage equalization to Arasu Rubber Corporation workers, emphasizing that government directives mandating prior approval for pay upgrades prevail over internal rules.

The case arose from a 2023 single judge directive that corporation linemen deserved pay parity with Tamil Nadu government linemen, relying on Rule 34 of the Arasu Rubber Corporation Service Rules. This provision stipulates that corporation employees’ pay and allowances mirror those of state government counterparts from time to time.

Appealing, the State of Tamil Nadu argued that while Rule 34 envisions parity, it is subject to explicit government sanction under Government Order (G.O.) Ms. No. 81 dated July 28, 1995. The G.O. mandates prior approval for extending state employee benefits to PSUs or statutory boards, barring explicitly notified exceptions. No such approval was sought or granted for the corporation’s wage revision, rendering the single judge’s order untenable.

The employees countered that Rule 34’s clear language obviates any approval, automatically entitling them to equivalent scales without further hurdles.

The bench disagreed, invoking Rule 7 of the corporation’s rules, which subordinates internal regulations to state directives. It observed: “Since the directives of the Government will prevail over and Government has not granted any approval in the present case, the benefit cannot be extended in a routine manner. High Court in exercise of powers of judicial review cannot conduct an enquiry in respect of pay parity.”

Further, the Court clarified that the “equal pay for equal work” principle under Article 39(d) does not apply here, as PSU employees are not identically situated to direct government hires—differing in recruitment, funding, and accountability. Judicial review is confined to Wednesbury unreasonableness, not fact-finding on parity claims.

Allowing the writ appeal, the bench quashed the single judge’s order, restoring the status quo pending government approval. This decision reinforces fiscal oversight in PSUs, curbing routine judicial overrides of executive policy.

Counsel for Appellant: Mr. P. Muthukumar, AAG (assisted by Mr. R. Mugunthan)
Counsel for Respondent: Mr. M. Ravi

Case Title: State of Tamil Nadu and Another v. V. Shunmugam | W.A. No. 1722 of 2026