Jharkhand High Court Mandates 6th Pay Revision for Bihar State Financial Corporation Employees

News Citation : 2026 LN (HC) 227 | 2026:JHHC:9265-DB

In a significant ruling for public sector employees, the Jharkhand High Court has dismissed an appeal by the Bihar State Financial Corporation (BSFC), effectively mandating the implementation of the 6th Pay Revision Commission (PRC) recommendations for its staff. The Division Bench, comprising Chief Justice M.S. Sonak and Justice Rajesh Shankar, affirmed that the Corporation is an autonomous body with the independent authority to determine the remuneration of its employees, regardless of the State Government’s stance.

The legal battle began when the BSFC Board of Directors initially resolved in June 2019 to revise pay scales for its employees, effective notionally from January 2006 and financially from April 2007. However, the Corporation later attempted to backtrack, citing a cumulative loss of over ₹506 crore in the 2020-21 financial year and claiming the previous decision was based on an erroneous calculation of operational profit. The Bihar State Government also declined to grant administrative approval, citing these financial constraints.

The High Court rejected these arguments, noting that the Corporation had previously filed an affidavit in a writ proceeding stating it possessed adequate funds and had recorded an operational profit of ₹18.58 crore during the 2019-20 fiscal year. The Bench characterized the BSFC’s sudden change in stance as “highly unjustified” and lacking in bona fides, suggesting the reversal may have been the result of undue pressure from the Department of Industries.

Central to the court’s decision was the interpretation of the State Finance Corporation Act, 1951. The court highlighted that an amendment in 2000 deleted a proviso that previously required State Government consultation for salary matters, thereby granting the Corporation “absolute power” over its internal service conditions. The judges ruled that the State of Bihar had no jurisdiction to block the pay revision and that the BSFC was bound by its original resolution.

The court also dismissed a separate appeal concerning a review petition, clarifying that under the Code of Civil Procedure, a party cannot appeal a court’s refusal to review its own judgment. This ruling clears the way for BSFC employees to finally receive the benefits of the 6th PRC, marking a major victory for administrative autonomy and employee rights in the region.

Case Reference : L.P.A. No. 709 of 2023 with L.P.A. No. 18 of 2024, The Bihar State Financial Corporation & Anr. vs. Rajnikant & Ors.; Counsels: Mr. Indrajeet Sinha, Mr. Deepak Kumar Dubey, Ms. Rashi Sharma, Ms. Ruhi Dubey (for Appellants); Mr. Krishna Murari, Mr. Raj Vardhan, Mr. Ritesh Kumar Pathak (for Res. 1-7); Mr. S.P. Roy (for Res. 8); Mr. Yogesh Modi, Ms. Ruchi Mukhi (for Res. 9).