Unable to repay KSRTC’s recurring debts unless all stakeholders act in unison: Kerala High Court

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On Tuesday, the Kerala High Court, while hearing pleas from KSRTC employees alleging they were not receiving their wages promptly, blamed employee unions for continuing strikes despite assurances to the court that the strikes would be cancelled.

Judge Devan Ramachandran felt that unless KSRTC, government and employees act in unison, it would be impossible to find resources to pay off the Corporation’s recurring debts.

Unless KSRTC’s profitability is increased, its future is bleak. Every stakeholder must recognize and accept this, including management, employees and government. The roles that each must play are essential and a balance must be found between the three. Unless all these stakeholders act in unison, it would be impossible to find resources to repay KSRTC’s recurring debts.

Government Special Advocate, Lawyer Santosh Kumar, filed a counter affidavit on behalf of the third defendant, detailing the steps taken by the government to reorganize the KSRTC. It has been argued that reorganizing the KSRTC to make it autonomous is the government’s top priority.

The government further argued that it has taken various measures to reorganize the Corporation and to modernize public transport; however, due to the apprehensions raised by several quarters within the government, other organizational problems have unfortunately delayed the implementation of these reform measures. It is also submitted in the counter affidavit that Rs. 50 Crores was allocated in the 2022-23 budget for fleet modernization and quality improvement and Rs. 814 Crores was sanctioned under the KIIFB loan .

The Court pointed out that in its counter-affidavit, the government even went so far as to say that unless productivity improves and becomes visible through the cooperation of employees to reduce losses, it is unable to provide assistance to the KSRTC. They also accused the employees’ union of having carried out strikes despite the assurances given to the Court.

However, it has been observed that the component of liability which concerns the Court is the money which KSRTC owes to a consortium of banks and financial institutions including KTDFC as Rs 30 crore is paid in a month in reimbursement of these loans.

Justice Ramachandran pointed out that in the affidavit the government does not specify how it plans to control this so that the accountability of the government so that the KSRTC can become at least a no-profit-no-loss entity. To this, the Government’s Special Advocacy replied that the Government is evaluating this and will make a decision within a month.

In addition to KSRTC’s ticket sales revenue, as well as non-ticket revenue should also increase if it is to find survival in the future.

Based on the documents presented by the KSRTC before the Court, the Court observed that the KSRTC has large areas under it on which several buildings, commercial complexes and offices have been constructed; however, it is unclear why these assets are not fully utilized or profits are generated as it should have been.

Therefore, the Court observed that it is necessary for the government to carry out a proper audit of all the constructions carried out by KTDFC and verify where the problem is heading.

The Court also recorded the observations made by Lawyer Nandakumar that the government owes the KSRTC a large sum of money for the ticket concessions, which was not mentioned in the counter affidavit. The Court demanded a timely response from the State on this matter.

The Court also recalled that employees must be paid without delay and no later than the 5th of each month at least. Judge Ramachandran thus ordered the KSRTC to ensure that the salaries of all employees in accordance with the previous orders of this court are paid by the 10th of this month, and the salary for the month of June 2022 has been paid in large part and will be finished in 5 of this month.

The KSRTC still maintains that the salary for the month of July will be paid by August 10, as ordered by the Court.

In the meantime, the Court gave the government time to consider the various issues, including reviewing an audit of KSRTC’s assets, the constructions made by KTDFC and the erasure of liability to the consortium of banks in order to that at least in the future the KSRTC will be able to operate without losses.

The issue was posted for further review on August 17.

Case Title: R. Baji & Ors. vs. KSRTC & Ors.

Click here to read/download the order

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