"KSRTC in the red:" Kerala High Court orders State carrier to pay salary to employees before settling other debts

"The KSRTC (Kerala State Road Transport Corporation), like its colour, is in the red! not merely red, but deep red," the Kerala High Court observed on Tuesday while ordering the State owned carrier to pay its employees their salaries by the 5th of every month [R Baji v Kerala State Road Transport Corporation & Ors.].Justice Devan Ramachandran opined that the KSRTC's practice of using the income of the present months to pay off the salary and arrears of the previous month, cannot continue, and that the salary of the staff must take precedence above all."Therefore, the income generated by the KSRTC should be used first for the purpose of settling their salary and only later for other purposes, including the interest repayment and such other. Otherwise, certainly those who toil for long hours, operating the various schedules, would feel erbittered and cheated. The KSRTC is not in the red in the recent past, but has been for the last several years, if not decades. Therefore, I do not think that the Government can now take things lying ground and allow the imbroglio to be resolved on its own; but must act proactively," the Court said in its interim order. .The Court passed the order on two petitions which highlighted the pendency and delay in payment of salaries to the employees of the KSRTC, which has been the cause of several trade union protests across the State in the recent past.Noting that drivers, conductors, ministerial staff, mechanical staff, and store staff are more affected by shocks to their expected monthly income, the Court had previously directed the KSRTC to pay such vulnerable staff their salaries before paying the supervisory officers..At today's hearing, standing counsel for the KSRTC, advocate Deepu Thankan, placed on record an affidavit regarding its assets and liability."Obviously, the KSRTC is going through an overdraft; and to make matters worse, they avail temporary loans from Banks, which are then repaid the next month, using the income. To cap it all, the KSRTC has nearly ₹3500 crores of liability from banks and its consortium, the servicing of interest of which eats into their income substantially," the Court noted from the affidavit..The Court also found that the KSRTC may not be capable of paying the salary for June by the 5th of July, because of the losses and overdraft liabilities that have accrued over time. Strong intervention and deliberation would be required by the Government to address the issue, the Court opined. .In this regard, Special Government Pleader Santhosh Kumar submitted that a high level meeting would soon be convened under the aegis of the Chief Minister.The Court stressed that the government must take emergent decisions with the target of achieving the ability to pay the salary by the 5th of next month.It further opined that the high level committee must decide how the KSRTC can generate revenue from their non-operational sources as well..The matter will be taken up next on July 1. .[Read Order]