STATE OF U.P. vs. VIRENDRA KUMAR

Case Type: Civil Appeal

Date of Judgment: 25-11-2022

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C.A.Nos.6622-6623 of 2022 etc. REPORTABLE  IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION  CIVIL APPEAL NOS.6622­6623 OF 2022 State of U.P. & Ors.                               … Appellants Versus Virendra Kumar & Ors.                           ... Respondents WITH CIVIL APPEAL NO. 6626 OF 2022 AND CIVIL APPEAL NO. 6627 OF 2022 J U D G M E N T ABHAY S. OKA, J. th 1. On 10  February 2020, for the reasons recorded, a Bench of two Hon’ble judges of this Court came to the conclusion that Signature Not Verified Digitally signed by ASHA SUNDRIYAL Date: 2022.11.25 16:48:45 IST Reason: the view taken by this Court in the case of   State of Uttar 1 C.A.Nos.6622-6623 of 2022 etc. 1 Pradesh   v.   Preetam   Singh   &   Ors.   (Preetam   Singh’s   case) needs reconsideration. Under Section 3 of the   Uttar Pradesh Avas   Evam   Vikas   Parishad   Adhiniyam,   1965   (for   short   ‘the 1965 Act’), Uttar Pradesh Avas Evam   Vikas Parishad (for short ‘the   Board’)   was   established.   The   basic   object   of   the establishment   of   the   Board   was   of   framing   and   executing housing   and   improvement   schemes   in   the   State   of   Uttar Pradesh. The core issue on which the reference is made to a larger   Bench   is   whether   the   act   of   determining   service conditions of the employees and officers of the Board is one of the statutory functions of the Board. FACTUAL ASPECTS st 2. On 21  February 1995, the Board resolved to extend the pensionary benefits to its employees by replacing the existing Contributory   Pension   Scheme   (for   short   ‘the   old   pension scheme’) with a pension/family pension/gratuity scheme (for th short ‘the new pension scheme’). On 16  May 1996, the State Government accorded its consent to the new pension scheme 1 2014 (15) SCC 774 2 C.A.Nos.6622-6623 of 2022 etc. subject to the condition that the Board will not be entitled to seek any financial assistance for the implementation of the new pension scheme.   th 3. By   a   Resolution   dated   5   November   1997,   the   Board approved the new pension scheme. The new pension scheme was based on the pension scheme of the State Government th applicable   to   civil   servants.   On   26   November   1997,   State Government passed an order staying the implementation of the new pension  scheme.  It appears  that the  State  Government appointed a committee of experts to examine the new pension scheme   of   the   Board.   After   considering   the   report   of   the committee of experts, the State Government vide order dated th 14   September   1999   vacated   the   stay   granted   earlier   by imposing a condition that the scheme shall be funded from the contribution to provident fund made by the Board and that neither   the   State   Government   nor   the   Board   shall   incur financial liability by implementing the new pension scheme. 4. Preetam Singh and others  who were the employees of the Board, filed a writ petition in Allahabad High Court. The prayer 3 C.A.Nos.6622-6623 of 2022 etc. in the petition was initially confined to the challenge to the th Government   Order   dated   14   September   1999.   During   the th pendency   of   the   said   petition,   on   7   May   2003,   the   State Government reiterated its earlier stand of granting no objection to the new pension scheme subject to the condition that no financial   assistance   shall   be   provided   to   the   Board   for th implementing   the   said   scheme.   On   16   January   2004,   the Board by an office order gave an option to its employees of either opting for the new pension scheme or continuing with the old pension scheme. In terms of the option given by the Board, according to the case of the State Government, 582 employees opted   for   the   old   pension   scheme   by   filing   necessary th undertakings. On 13  September 2005, the State Government th issued an order keeping its communication dated 7  May 2003 in abeyance on the ground that it was preparing comprehensive guidelines regarding the payment of pension to the employees th of Public Sector Enterprises. By a communication dated 12 July 2007, the State Government purported to withdraw the approval   granted   earlier   to   the   new   pension   scheme   of   the 4 C.A.Nos.6622-6623 of 2022 etc. Board. The writ petition filed by   Preetam Singh and others th was   amended   and   a   challenge   to   the   orders   dated   13 th September 2005 and 12   July 2007 was incorporated in the petition. During the pendency of the petition filed by  Preetam Singh   and   others,   the   State   Government   issued   an   office th memorandum dated 8  December 2008 for applying a revised pension,   gratuity/family   pension,   and   commutation   scheme st with   effect   from   1   January   2006   for   the   benefit   of   its employees. The said memorandum was issued in terms of the recommendations of the U.P Pay Committee, 2008. However, the   employees   of   local   bodies   and   public   enterprises   were specifically excluded  from  the  applicability  of  the  said  office th memorandum.  Another office memorandum was issued on 8 December 2008 by the State Government for providing revised pensionary   benefits   to   those   Government   servants   who   had st retired   before   1   January   2006.     This   order   was   made applicable to the employees of Public Sector Enterprises who st were   already   getting   pension   prior   to   1   January   2006.     A 5 C.A.Nos.6622-6623 of 2022 etc. Division Bench of Allahabad High Court by the judgment and th order dated 16  January 2009 allowed the writ petition filed by . The High Court quashed the orders Preetam Singh & others th th dated 13  September 2005 and 12  July 2007 to the extent to which   they   related   to   the   Board.   A   writ   of   mandamus   was issued   directing   the   Board   to   implement   the   new   pension th scheme in terms of its Regulations framed on 5   November 1997.  5. In view of the decision of the High Court, a notification th dated 19  May 2009 was issued by the Board in the exercise of powers under clause (f) of sub­section (1) of Section 95 of the 1965 Act. The notification recorded that the Board had decided to implement the new pension scheme as admissible to the officers and employees of the State Government in terms of the Rules   and   Regulations   set   out   in   the   said   notification.   The Board directed that the new pension scheme shall come into st force and will apply to those officers who retired on or after 1 January 1996. However, it was stated that the Newly Defined 6 C.A.Nos.6622-6623 of 2022 etc. Contributory Pension Rules of the State Government will be applicable to those employees of the Board who have joined the st employment on or after 1   April 2005.   The notification also provided that the orders issued from time to time by the State Government with respect to pension/ family pension/ gratuity shall be applicable to the officers and employees of the Board. 6. The   decision   of   the   High   Court  was   challenged   by   the State Government before this Court in which the decision of 1 this Court in   Preetam Singh’s case   was rendered.   It was observed in paragraph 21 of the final judgment of this Court th that the interim order dated 7   August 2012 passed by this th Court had the effect of staying the notification dated 19  May th 2009. By the interim order of this Court dated 7   September 2012,   the   employees   of   the   Board   were   permitted   to   claim benefits   under   the   old   pension   scheme.   However,   it   was observed that the interim order will not come in the way of the said employees agitating their claim and also supporting the relief granted by the High Court. 7 C.A.Nos.6622-6623 of 2022 etc. 7. One of the main contentions canvassed by the State of 1   Uttar Pradesh before this Court in  Preetam Singh’s case was based on provisions of sub­section (1) of Section 2 of the U.P. State Control Over Public Corporations Act, 1975 (for short ‘the 1975 Act’). Section 2(1) of the 1975 Act provides that every statutory   body   established   or   constituted   under   any   Uttar Pradesh Act shall in the discharge of its functions be guided by such directions on questions of policies as may be issued to it by the State Government notwithstanding that no such power has been expressly conferred by the statute establishing such a statutory body on the State Government. The contention of the th State Government was that the orders issued on 13  September th 2005 and 12  July 2007 must be deemed to have been issued in the exercise of powers under Section 2(1) of the 1975 Act.  1 th 8. While deciding  Preetam Singh’s case  on 24  September 2014, this Court referred to Section 15 of the 1965 Act which exhaustively   incorporates   the   functions   of   the   Board.   This Court came to the conclusion that fixing conditions of service of 8 C.A.Nos.6622-6623 of 2022 etc. its   employees   does   not   constitute   a   function   of   the   Board. Therefore, this Court held that the State Government had no th power to issue the directions contained in its orders dated 13 th September 2005 and 12  July 2007. This Court also held that clause (f) of sub­section (1) of Section 95 of the 1965 Act vests a power   in   the   Board   to   make   Regulations   for   determining conditions of service of its officers and servants. It was held that the new pension scheme has been framed by the Board in the   exercise   of   power   under   clause   (f)   of   sub­section   (1)   of Section 95. While dismissing the Special Leave Petition filed by the State Government, this Court referred to the notification th dated 19   May 2009 of the Board issued in the exercise of power under clause (f) of sub­section (1) of Section 95 of the 1965 Act. This Court while dismissing the appeal preferred by the State Government directed that all the eligible employees of th the Board will be governed by the said notification dated 19 May 2009. This Court directed the Board to release pensionary benefits to retired employees governed by the notification dated th 19  May 2009 within a period of three months.  Paragraph 21 9 C.A.Nos.6622-6623 of 2022 etc. of the decision containing the directions issued by this Court is reproduced below:­  “ 21.  It is also necessary for us to determine the consequence of the State of Uttar Pradesh, having approached   this   Court,   to   assail   the   impugned judgment dated 16­1­2009 [ Preetam Singh  v.  State of U.P. , 2009 SCC OnLine All 33 : (2009) 2 All LJ 702]   .   This   Court   having   entertained   the petition filed by the appellant, passed interim directions on 7­8­2012 [ State of U.P.  v.  Preetam Singh ,   IA   No.   7   in   Civil   Appeal   No.   6307   of 2010, order dated 7­8­2012 (SC), wherein it was directed:“Taken on board. There shall be stay of the order passed in Writ Petition No. 1433 of 2011 dated 24­7­2012. IA No. 7 is disposed of. Registry is directed to list IA No. 4 on 27­8­ 2012, if it is in order.”] , which had the effect of staying   the   implementation   of   the   directions issued  by  the High  Court, namely, of staying the   implementation   of   the   Notification   dated 19­5­2009. As a result, the employees governed , were paid by the Notification dated 19­5­2009 their retiral dues under the Contributory Provident Fund   Scheme.   Since   we   have   now   affirmed   the impugned judgment of the High Court, dated 16­1­ 2009   [ Preetam   Singh  v.  State   of   U.P. ,   2009   SCC OnLine All 33 : (2009) 2 All LJ 702] , it is apparent that all the eligible employees of the Vikas Parishad will  be   governed   by   the   Notification   dated   19­5­ 2009.   They   will   therefore   be   entitled   to   the pensionary   benefits   from   the   date   of   their retirement.  Undoubtedly, they have been denied the said retiral benefits, consequent upon the interim   orders   passed   by   this   Court,   at   the 10 C.A.Nos.6622-6623 of 2022 etc. behest   of   the   State   of   Uttar   Pradesh.   In   the above view of the matter, we direct the Vikas Parishad to release the pensionary benefits to the   retired   employees   governed   by   the Notification   dated   19­5­2009,   within   three months   from   today.   While   determining   the pensionary   benefits   payable   to   the   eligible retired employees up to date, if it is found that any   of   the   retired   employees   is   entitled   to financial dues in excess of those already paid under   the   Contributory   Provident   Fund Scheme,   the   said   employee(s)   will   be   paid     The interest   on   the   said   amount   @   9%   p.a. burden of the aforesaid interest component on the differential amount will be discharged by the Vikas Parishad   in   the   first   instance.   The   same   shall, however,   be   recovered   from   the   State   of   Uttar Pradesh, who is solely responsible for the interest ordered to be paid to the employees concerned.” (emphasis added)      th 9. On 16  October 2009, the State Government issued an order sanctioning revised pay structure, pay band, and grade pay to different categories of employees working in public enterprises/ corporations.  The revised pay structure was incorporated in the annexure to the said order.   The Government Order stated that necessary   action   shall   be   taken   by   the   public   enterprises/ corporations   in   consultation   with   the   Public   Enterprises 11 C.A.Nos.6622-6623 of 2022 etc. Department/   Finance   Department.     It   is   also   provided   in   the Government Order that the execution of the Government Order shall be made only after a proposal to that effect is approved by th the Board of Directors of the Public Sector Enterprises.  On 30 November   2009,   the   Housing   Commissioner   of   the   Board addressed a letter to the State Government for communicating the proposal of the Board to apply the revised pay structure to its th employees.   In   response,   on   14   Janua ry   2010,   the   State Government   issued   a   communication   permitting   the   Board   to grant the revised pay structure according to the recommendations th of the 7  Report of the U.P Pay Committee, 2008 to its employees. The State Government permitted the Board to grant the revised pay   structure   to   its   employees   as   provided   in   the   aforesaid th Government Order dated 16  October 2009.  The said order was issued on the basis of the recommendations of the Empowered Committee.   However, it was stated in that communication that the benefit shall be calculated on a notional basis with effect from st 1  January 2006 in the pay band and grade pay as per the table th annexed to the Government Order dated 16   October 2009. It 12 C.A.Nos.6622-6623 of 2022 etc. provided that the actual benefit shall be provided with immediate th effect i.e. from 14  January 2010.  In short, the employees of the Board were not entitled to arrears of pay as per the revised pay st structure with effect from 1  January 2006.  They were entitled to st revised pay scales only on a notional basis from 1  January 2006 th and to the actual benefits only from 14  January 2010.  Based on the said communication, an Office Order was issued by the Board rd on 23  January 2010 for giving effect to the communication dated th 14  January 2010.  In fact, another Government Order was issued th on 15   September 2011 stating that in terms of the order dated th 14  January 2010, pay scales of the employees of the Board will st be notionally revised with effect from 1   January 2006 but the th actual benefits shall be extended only from 14   January 2010. The said Government Order reiterates that the employees of the Board will not be entitled to benefit of the revised pay structure for st th the period of 1  January 2006 to 13  January 2010.   th 10. The State Government issued another order dated 05  May 2015 to the Board communicating the decision of the Hon’ble Governor to grant pensionary benefits to the employees of the 13 C.A.Nos.6622-6623 of 2022 etc. Board in terms of the new pension scheme with retrospective st effect   from   1   January   2006.   The   decision   of   the   State Government, inter alia, provided that the employees who were st employed on or before 31  March 2005 and who had not retired till date shall be granted pension.   It further provided that the employees who had already retired and had taken benefits under the old pension scheme will not be entitled to get a pension under the   new   pension   scheme.     The   Government   directed   that   the st employees of the Board who have been employed on or after 1 April 2005 will not be entitled to grant of pension.  In terms of the th Government  Order  of   05   May   2015,  the   Board   issued   Office th Order dated 13  May 2015. 11. There   were   two   sets   of   writ   petitions   filed   before   the Allahabad High Court.  The first one was Writ Petition No.12645 of 2016 filed by certain employees of the Board.   The following prayers were made in the petition : “(i) to issue a writ, order or direction in the nature of Mandamus   commanding   the   respondents   to   re­ determine   the   salary   of   the   petitioners   till   their retirement and  thereafter  their pensionary benefits 14 C.A.Nos.6622-6623 of 2022 etc. on   the   basis   of   Sixth   Pay   Commission Recommendation w.e.f.1.1.2006. (ii) to issue a writ, order or direction in the nature of Mandamus   commanding   the   respondents   to   apply the   provisions   of   the   Government   Order   No.1508 dated 8.12.2008 on the officers of the Parishad, while suitably   reading   down   the   restrictive   provisions about  its   non­application   on  the   employees   of   the U.P.   Awas   Evam   Vikas   Parishad   in   view   of   the Pension   Regulations   dated   19.5.2009   read   with judgment and order of the Hon’ble Apex Court dated 23.9.2014. (iii) to issue a writ, order or direction in the nature of mandamus   commanding   the   respondents   to   re­ determine/re­fix the salary of the petitioners in terms of   Sixth   Pay   Commission   Recommendation   w.e.f. 1.1.2006   till   their   retirement   and   thereafter   re­ determine   their   pensionary   benefits   as   per   revised last pay drawn and pay arrears of salary and revised pensionary benefits from the date of their retirement till date, in accordance with G.O. dated 8.12.2008, after   deducting   the   amounts   already   paid   towards pensionary benefits of the petitioners, within a period of 2 months.  (iv) to issue a writ, order or direction in the nature of Mandamus   commanding   the   respondents   to   grant the benefit of maximum gratuity of Rs.10 lac to the petitioners   as   per   Government   Order   dated 8.12.2008. (v) to issue a writ, order or direction in the nature of Mandamus   commanding   the   respondents   to   pay arrears of salary & pensionary benefits calculated in terms of the Sixth Pay Commission Recommendation, including enhanced gratuity of Rs.10 lac, along with 15 C.A.Nos.6622-6623 of 2022 etc. payment   of   interest   at   the   prevailing   Bank   rates, within a period of 2 months. (vi) to   issue   an   ad­interim   mandamus   to   the respondent authorities to pay the current pension of the   petitioners   in   terms   of   Sixth   Pay   Commission Recommendation.”   Writ   Petition   No.10355   of   2017   was   filed   by   another   set   of th employees of the Board for challenging the order dated 05  May 2015   passed   by   the   State   Government   and   the   consequential th order dated 13  May 2015 passed by the Board. 12. By the impugned judgment, the aforesaid two petitions were disposed of.   While disposing of the petitions, in paragraph 41, the following directions were issued : “41.   Accordingly,   both   the   writ   petitions   are allowed   and   the   impugned   orders   dated 05.05.2015   and   13.05.2015   contained   in Annexure   No.1   and   2   to   the   Writ   Petition o.126345   (S/B)   of   2017   are   quashed   to   the extent they are contrary to the judgment passed by the Hon’ble Apex Court in the case of State of U.P. vs. Preetam Singh and others : Civil Appeal No.6307 of 2010.   A mandamus is issued to the respondents   to   grant   benefit   of   arrears   of salary payable to the employees of Parishad w.e.f. 1.1.2006 to 13.01.2010 and to fix their pension/   family   pension   and   also   release gratuity in accordance with the provisions of 16 C.A.Nos.6622-6623 of 2022 etc. U.P.   Avas   Evam   Vikas   Parishad   Regulations th notified on 19  May, 2009, and in the light of the orders of the Hon’ble Supreme Court in Civil Appeal No.6307 of 2010 from the date of their entitlement alongwith interest @ 9% per annum within a period of two months from the date of production of certified copy of this order, failing which the petitioners shall be entitled and paid interest at the rate of 12% per annum. ” (emphasis added) THE ORDER OF REFERENCE TO A LARGER BENCH th 13. Now, we come to the order dated 10  February 2020 passed by this Court.  A Bench of two Hon’ble Judges of this Court  prima facie  found that the functions of the Board contemplated under Section 15 of the 1965 Act were wide enough even to cover the act of fixing service conditions of its employees. In paragraph 43, this Court framed three questions for consideration of a larger Bench. Paragraph 43 of the said order reads thus: “43. Due to the above reasons we are of the view that with regard to three aspects i.e. (1), (2) and (3) as 42 noted above, the judgment in  Preetam Singh’s   case   needs   reconsideration.   We formulate following questions to be considered by a larger Bench:  17 C.A.Nos.6622-6623 of 2022 etc. (1)   Whether   the   judgment   of   this   Court   in Preetam   Singh’s   case   laying   down   that conditions of service of officers and employees do not   constitute   the   functions   of   the   U.P.   Avas Evam Vikas Parishad lays down the correct law more   so  when  the   judgment  does  not  refer   to provisions of Sections 8, 92, 94(2)(nn)of the 1965 Act ?  (2)   Whether   the   view   expressed   in   Preetam  judgment that functions of the U.P. Avas Singh’s Evam   Vikas   Parishad   are   only   the   specific functions enumerated in Section 15 of 1965 Act which does not include the service conditions of employees of the Board lays down the correct law ? Whereas the functions of the Board referred to in other provisions of Act, Rules and Regulations as has been expressly provided in Section 15(1) by use of expression “subject to the provisions of this   Act  and   the   Rules   and  Regulations”  shall also   be   functions   of   the   Board   which   induces service conditions of officers and employees as per Section 95(1)(f) of the 1965 Act.  (3)   Whether   the   State   Government   had   no jurisdiction to issue directions regarding service conditions of officers and employees of the U.P. Avas Evam Vikas Parishad under the provisions of   the   1965   Act   and   1975   Act   and   all   other enabling powers with the State Government? SUBMISSIONS OF THE STATE  GOVERNMENT AND THE BOARD 14. Ms.   Aishwarya   Bhati,   the   learned   Additional   Solicitor General   appearing   for   the   State   Government   urged   that   the 18 C.A.Nos.6622-6623 of 2022 etc. statutory functions of the Board include the function of fixing terms and conditions of the employment of its employees. She placed reliance on Section 92 of the 1965 Act which confers a power on the State Government to issue directions to the Board for carrying out the purposes of the 1965 Act.  She urged that it is the duty of the Board to comply with the directions issued by the State Government. It was further submitted that apart from Section 2(1) of the 1975 Act, there was sufficient power vesting in the State Government under Section 8 of the Section 1965 Act to control and put restrictions on the powers of the Board to appoint officers and employees. The learned ASG invited our attention to th the notification dated 19  May 2009 by which the Board applied the new pension scheme to the employees who retired on or after st 1  January 1996. She pointed out that in the said notification, it is   specifically   directed   that   the   orders   with   respect   to pension/family pension/gratuity issued by the State Government from time to time shall also be applicable to the officers and employees of the Board. She pointed out that the said notification was   never   challenged.   She   would,   therefore,   submit   that   the 19 C.A.Nos.6622-6623 of 2022 etc. directions   of   the   State   Government   impugned   by   the   private respondents cannot be faulted. After inviting our attention to the th interim order dated 7  September 2012 passed by this Court, the learned   ASG   submitted   that   those   who   have   unconditionally th opted for the old pension scheme prior to 7   September 2012 have no subsisting right to claim the pension in terms of the new pension   scheme.   She   submitted   that   the   employees   are   not entitled to salary as per the revised pay structure for the period st th between   1   January   2006   to   13   January   2010   as   per   the binding directions of the State Government.  The learned senior counsel representing the Board also made similar submissions.  THE SUBMISSIONS OF THE PRIVATE RESPONDENTS 15. The learned counsel appearing for the respondents in Civil Appeal Nos.6624 and 6625 of 2022 also made legal submissions. th We  may   note   here   that   while   reserving   the   judgment   on   15 September 2022, we had detagged the said appeals. Nevertheless, we   are   also   considering   the   submissions   made   by   the respondents   in   the   detagged   appeals   as   regards   the   three questions of law that are required to be decided. The submission 20 C.A.Nos.6622-6623 of 2022 etc. of the learned counsel is that as several employees were facing financial hardships after their retirement, they had no option but to give the undertakings to accept the old pension scheme and not opt for the new pension scheme. Considering this situation, 1 this Court by an interim order passed in  Preetam Singh’s case had directed that even if employees have taken benefit of the old pension scheme by giving an undertaking, they will be entitled to the benefit of the new pension scheme in terms of the notification th dated 19  May 2009. The learned counsel invited our attention to th the subsequent order dated 5   May 2015 passed by the State Government by which the benefit of the new pension scheme was denied to those who opted to join the employment of the Board on st or after 1   April 2005. His submission is that this direction is discriminatory which creates two classes of pensioners without any rational basis. He relied upon a decision of this Court in the 2 case of  D.S. Nakara & Ors. v. Union of India  as well as another 3 decision in the case of  V. Sukumaran v. State of Kerala & Anr. . 2 1983 (1) SCC 305 3 2020 (8) SCC 106 21 C.A.Nos.6622-6623 of 2022 etc. He   would,   therefore,   submit   that   reconsideration   of   the   view 1 taken in  Preetam Singh’s case  is not at all warranted. Shri Nidhesh Gupta, the learned senior counsel stated that 16. he represents only those respondents who had never opted for the old pension scheme and had not received any amount under the old scheme. He submitted that under clause (f) of sub­section (1) of Section 95 of the 1965 Act, the Board has a power to make Regulations   providing   for   conditions   of   service   of   officers   and servants of the Board.  Inviting our attention to sub­section (2) of Section 95 of the 1965 Act, Shri Gupta would submit that only when any Regulation framed by the Board is repugnant to the Rules framed by the State in the exercise of powers under Section 94, the Rules will prevail. He submitted that admittedly the State Government   has   not   exercised   the   Rule   making   power   under Section 94. He urged that under clause (nn) of sub­section (2) of Section 94, the State Government has a power to frame Rules concerning any matter for which Regulations can be framed under Section 95.   He submitted that it is well settled that when an enactment   requires   that   a   certain   thing   should   be   done   in   a 22 C.A.Nos.6622-6623 of 2022 etc. certain way, the thing must be done in that way or not at all.  He relied upon various decisions in this behalf, viz.,  A.R. Antulay  v. 4 ;     v. Ramdas   Sriniwas   Nayak   &   Anr. Dhananjaya   Reddy   etc. 5 State   of   Karnataka ;   and   Gujarat   Urja   Vikas   Nigam   Ltd.   v. 6 Essar Power Ltd. . Inviting our attention to Section 2(1) of the 1975 Act, he 17. submitted that the power conferred by the said provision on the State   Government   to   issue   directions   is   a  general   power.   This power is confined to issuing directions on questions of policies. He submitted that the said power can be exercised in relation to the discharge of functions of the Board.  He urged that Section 15 of Chapter III of the 1965 Act lays down the functions of the Board. He   pointed   out   that   Chapter   III   requires   the   Board   to   frame various schemes.  He urged that none of the clauses (a) to (p) of Section   15   lays   down   that   the   appointment   of   employees   and fixing their service conditions is a function of the Board under the 1965 Act.  He urged that in the exercise of power under Section 4 (1984) 2 SCC 500 5 (2001) 4 SCC 9 6 (2008) 4 SCC 755 23 C.A.Nos.6622-6623 of 2022 etc. 2(1) of the 1975 Act, directions cannot be issued regarding the service conditions of officers and employees of the Board. By referring to Section 7 of the 1965 Act, he submitted that 18. sub­section   (2)   thereof   clearly   provides   that   the   conditions   of service of the Housing Commissioner shall be such as may be prescribed.  Relying upon the definition of the word ‘prescribed’ in clause (n) of Section 2, he submitted that the conditions of service of the Housing Commissioner have to be prescribed by the State Government   by   exercising   the   Rule   making   power.     However, Section   8   which   provides   for   the   appointment   of   officers   and servants of  the  Board does not contain such a provision.   He submitted   that   the   special   or   general   orders   of   the   State Government contemplated by sub­section (1) of Section 8 can be issued only regarding the mode and manner of appointment of the officers and servants of the Board and the same have nothing to do with service conditions.  The power of the State Government to issue general or special orders is only for the purpose of imposing control and restrictions on the appointment of the officers and servants of the Board.   Therefore, sub­section (1) of Section 8 24 C.A.Nos.6622-6623 of 2022 etc. cannot be construed to mean that by issuing general or special orders,   the   State   Government   can   determine   the   conditions   of service of the officers and servants of the Board.   He submitted that as two different expressions have been used in Sections 7 and 8 of the 1965 Act, different meanings will have to be assigned to the said different expressions. On this issue, he relied upon a decision of this Court in the case of  DLF Qutab Enclave Complex 7 Educational Charitable Trust  v.  State of Haryana . 19. He urged that the power under sub­section (2) of Section 92 can be exercised by the State Government by issuing directions that are necessary for carrying out the purposes of the 1965 Act. He submitted that in any event, in the present case, statutory Regulations have been framed by the Board dealing with the grant of pensionary benefits. 20. He   submitted   that   the   power   to   issue   directions   under Section 2(1) of the 1975 Act is a general power and the power under Sections 8 and 92 of the 1965 Act is a specific or special power.     Relying   upon   a   decision   of   this   Court   in   the   case   of 7 (2003) 5 SCC 622 25 C.A.Nos.6622-6623 of 2022 etc. Commercial Tax Officer, Rajasthan   v.   Binani Cements Ltd. & 8 Anr. , he urged that the specific provisions under the 1965 Act will prevail over the general provision under Section 2(1) of the 1975 Act.   21. He   relied   upon   a   decision   of   this   Court   in   the   case   of 9   v.   .     He Harwindra   Kumar Chief   Engineer,   Karmik   &   Ors. submitted   that   executive   order   cannot   override   the   exercise   of power made by the Board by framing Regulations concerning the new Pension Scheme. He submitted that if the submission of the State Government that by issuing executive orders it can override the provisions of the Regulations framed under Section 95 of the 1965 Act is accepted, the entire scheme of Sections 94 and 95 of the 1965 Act will be rendered completely redundant. Relying upon a decision of this Court in the case of   Institute of Chartered 10 Accountants of India   v.   Price Waterhouse & Anr. ,   he would submit that such an interpretation cannot be accepted. He pointed out that if the pension is not granted on the basis 22. of revised pay scales, the very purpose of the grant of pension will 8 (2014) 8 SCC 319 9 (2005) 13 SCC 300 10 (1997) 6 SCC 312 26 C.A.Nos.6622-6623 of 2022 etc. be defeated.  He submitted that employees cannot be divided into two classes – one of those who retired pre­1996 and others of who retired post­1996.  He submitted that there was no justification for th the Bureau of Public Enterprises for writing a letter dated 14 January 2010 conferring the benefit of the revised pension not st th from 1  January 2006 but from 14  January 2010.  He submitted that no explanation has been offered either before the High Court th or this Court for fixing the date of 14  January 2010.  He relied upon a decision of this Court in the case of  State of Rajasthan & 11  v.  . Anr. Prem Raj 23. He pointed out that the benefit of the revised pension was given by the State Government to the employees of U.P Power st Corporation with effect from 1  January 2006.  To the employees of U.P Jal Nigam, the benefit of the revised pension was given only th from 12   April 2010.   The employees of Jal Nigam filed a writ petition before the High Court which was allowed by holding that the   employees   were   entitled   to   get   the   benefit   of   the   revised st pension from 1   January 2006.   The said decision has become 11 (1997) 10 SCC 317 27 C.A.Nos.6622-6623 of 2022 etc. final as a Special Leave Petition filed by the State Government th against the said order has been dismissed on 20  May 2022.  He submitted   that   the   Board   has   adequate   resources   to   bear   the st burden of payment of revised pension from 1  January 2006.  His submission is that the law laid down by this Court in the case of 1 Preetam Singh’s case  does not call for any reconsideration at all. CONSIDERATION OF THE QUESTIONS FRAMED th 24. The three questions framed under Order dated 10  February 2020 are inter­connected. For deciding these three questions, we will have to decide the core issues whether the functions of the Board are confined to those which are set out in Section 15 of the 1965 Act and whether the appointment of officers and employees of the Board and the determination of their conditions of service constitute the functions of the Board.  Another question that will have to be addressed is as regards the power, if any, of the State Government   to   issue   directions   to   the   Board   concerning   the determination   of   the   conditions   of   service   of   its   officers   and servants.  28 C.A.Nos.6622-6623 of 2022 etc. POWER   TO   DETERMINE   THE CONDITIONS   OF   SERVICE   OF   THE OFFICERS   AND   SERVANTS   OF   THE BOARD We have perused the provisions of the 1965 Act.  Chapter II 25. thereof has the heading, “Establishment and conduct of business of the Board”.  Chapter II consists of Sections 3 to 14.  Section 3 provides for the constitution of the Board.  Section 7 provides for the appointment of a Housing Commissioner.   Section 7 reads thus : “ 7. Provisions relating to Housing Commissioner. ­ (1) There shall be a Housing Commissioner appointed by the State Government for the purposes of this Act. (2)   The   conditions   of   service   of   the   Housing Commissioner shall be such as may be prescribed. He shall be remunerated from the Board’s fund. (3) The State Government may, if it is of opinion that special   circumstances   so   require,   appoint   the Housing   Commissioner   to   be   the   Adhyaksh   in addition to his own duties. (4)   The   State   Government   may   also   appoint   the Housing   Commissioner  as  an  authority  under  any other law for the time being in force.”                           (emphasis added) 29 C.A.Nos.6622-6623 of 2022 etc. Section   8   deals   with   “Appointment   of   Officers   and   Servants”. Section 8 reads thus : “ ­(1) 8.   Appointment   of   officers   and   servants. Subject to such control and restrictions as may from   time   to   time   be   imposed   by   the   State Government,   by   special   or   general   orders,   the Board may appoint such officers and servants as it   considers   necessary   for   the   efficient performance of its functions. (2) the Board may, with the previous approval of the State Government appoint a servant of the Central or the State Government or of a local authority on any of the posts under it on such terms and conditions as may be agreed upon.”                          (emphasis added) As   provided   in   sub­section   (1)   of   Section   7,   the   Housing Commissioner has to be appointed by the State Government. Sub­ section (2) of Section 7 provides that the conditions of service of the   Housing   Commissioner   must   be   prescribed   by   the   Rules. Rule­making   power   under   Section   94   vests   with   the   State Government.  Clause (b) of sub­section (2) of Section 94 empowers the State Government to frame Rules determining the conditions of service of the Housing Commissioner.  The obvious reason for conferring   the   power   to   determine   service   conditions   of   the 30 C.A.Nos.6622-6623 of 2022 etc. Housing Commissioner on the State Government appears to be that the State Government is the appointing authority.   In   contrast,   sub­section   (1)   of   Section   8   provides   that 26. subject to control and restrictions imposed from time to time by the State Government by special or general orders, the Board may appoint such officers and servants as it considers necessary for the   efficient   performance   of   its   functions.   There   is   a   marked distinction   between   the   language   used   by   sub­section   (2)   of Section 7 and sub­section (1) of Section 8 though both provisions deal with the power to appoint officers of the Board. Thus, two different expressions or terminologies have been used in Sections 7 and 8. Therefore, the legislature intended to convey different meanings. Sub­section (1) of Section 8 does not provide that the State   Government   shall   have   the   power   to   determine   the conditions of service of officers and employees of the Board. The power to control the appointment and the power to put restrictions are distinct and different from the power to determine the service conditions of the officers and servants of the Board.  The control of the State Government and the power to impose restrictions as 31 C.A.Nos.6622-6623 of 2022 etc. provided in sub­section (1) of Section 8 will extend to the creation of posts of officers and servants of the Board. The control can be exercised by directing the creation of different categories of posts. The control can be also exercised by determining the number of posts of different categories.  In this context, Sections 94 and 95 of the 1965 Act are also relevant.  Under sub­section (1) of Section 94, the State Government retains the general Rule making power of framing Rules for carrying out the purposes of the Act.  Without prejudice to the generality of the power under sub­section (1), sub­ section (2) of Section 95 lays down the topics and subjects on which Rule­making power can be exercised.   One of the specific powers conferred by clause (b) of sub­section (2) of Section 94 on the State Government, as pointed out earlier, is of framing Rules for   laying   down   conditions   of   service   of   the   Housing Commissioner.  Clause (nn) of sub­section (2) of Section 94 reads thus : “94. Power to make Rules.­ (1) … … … … (2)   In   particular   and   without   prejudice   to   the generality   of   the   foregoing   power,   such   rules   may provide for­  … … … …  32 C.A.Nos.6622-6623 of 2022 etc. … … … … (nn) any matter for which regulation may be made by the Board under Section 95; … … … …” Thus, clause (nn) of sub­section (2) of Section 94 confers power on the State Government to frame Rules in respect of any matter for which regulations can be framed by the Board.  Section 95 which confers the powers on the Board to frame Regulations reads thus : “ 95. Power to make regulations.­ (1) The Board may, by   notification   in   the   ,   make   regulations Gazette providing for –  (a) ……………………………………………………; (b) ……………………………………………………; (c) ……………………………………………………; (d) ……………………………………………………; (e) the duties of officers and servants of the Board; (f) the   conditions   of   service   of   officers   and servants of the Board; (g) …………………………………………………….; (h) …………………………………………………….; (i) …………………………………………………….; (j) …………………………………………………….; (k) ……………………………………………………; (l) ……………………………………………………; (m) ……………………………………………………; (n) any   other   matter   which   is   to   be   or   may   be provided for by regulations under this Act or the rules.”                      (emphasis added) 33 C.A.Nos.6622-6623 of 2022 etc. Clause (f) of sub­section (1) of Section 95 specifically empowers the Board to frame Regulations governing conditions of service of officers and servants of the Board. Under clause (b) of sub­section (2) of Section 94, the State Government has a power to determine the conditions of service of the Housing Commissioner.  Thus, the Legislature   has   specifically   incorporated   in   Section   7   that   the State   Government   shall   have   the   power   to   determine   the conditions of service of the Housing Commissioner. However, such a provision is conspicuously absent in Section 8 dealing with the appointment of servants and officers of the Board. The reason is that the power to determine the service conditions of the other officers and servants has been conferred on the Board which can be exercised by making Regulations. In view of sub­section (2) of Section 95 read with clause (nn) 27. of sub­section (2) of Section 94, Regulations, if any, framed by the Board for determining the conditions of services of its officers and servants are always subject to the Rules which may be framed by the State Government by exercising the power under clause (nn) of sub­section (1) of Section 94. Whenever there is any inconsistency 34 C.A.Nos.6622-6623 of 2022 etc. between the Regulations framed under clause (f) of sub­section (1) of Section 95 and the Rules framed under clause (nn) of sub­ section (1) of Section 94, the Rules will prevail and to that extent, the provisions of the Regulations which are repugnant to the Rules shall be void.   To put it differently, the power to determine the conditions   of   service   of   the   officers   (except   the   Housing Commissioner) and servants of the Board vests in the Board, and the   said   power   can   be   exercised   only   by   framing   Regulations under clause (f) of sub­section (1) of Section 95.  So long as Rules are not framed by the State Government under clause (nn) of sub­ section   (1)   of   Section   95   for   overriding   the   provisions   of   the Regulations   framed   by   the   Board   for   prescribing   the   service conditions, the provisions of Regulations shall always govern the field.   Except for the exercise of the Rule making power under clause (nn) of sub­section (1) of Section 94, there is no specific power conferred under the 1965 Act, or for that matter under the 1975 Act, on the State Government to nullify or to override the conditions of service of its officers and servants determined by the 35 C.A.Nos.6622-6623 of 2022 etc. Board by the Regulations framed in the exercise of powers under clause (f) of sub­section (1) of Section 95. FUNCTIONS OF THE BOARD 28. Now coming to the issue of the functions of the Board, we may   note   that   Chapter   III   of   the   1965   Act   has   the   heading “Functions and Powers of the Board”.   As noted earlier, specific provisions   regarding   the   appointment   of   the   Housing Commissioner, officers and servants of the Board find a place in Chapter  II and  not in  Chapter  III.   As  specifically  provided in clause (1) of Section 8, the Board is empowered to appoint such officers and servants as it considers necessary for the efficient performance of its functions. This is one factor that suggests that the appointment of officers and servants is not a function of the Board but their appointments are required to be made for the efficient performance of its functions.  29. Chapter III dealing with “Functions and Powers of the Board” comprises   of   Sections   15   to   49.     Section   15   has   the   heading “Functions of the Board” which reads thus : 36 C.A.Nos.6622-6623 of 2022 etc. “ 15.   Functions   of   the   Board. ­(1)   Subject   to   the provisions of this Act and the rules and regulations, the functions of the Board shall be­  (a) to frame and execute housing and improvement schemes and other projects; (b) to plan and co­ordinate various housing activities in   the   State   and   to   ensure   expeditious   and efficient   implementation   of   housing   and improvement schemes in the State; (c) to   provide   technical   advice   for   and   scrutinise various projects under housing and improvement schemes   sponsored   or   assisted   by   Central Government or the State Government; (d) to   assume   management   of   such   immovable properties belonging to the State Government as may   be   transferred   or   entrusted   to   it   for   this purpose; (e) to   maintain,   use,   allot,   lease,   or   otherwise transfer plots, buildings and other properties of the   Board   or   of   the   State   Government   placed under the control and management of the Board; (f) to organise and run workshops and stores for the manufacture   and   stock­piling   of   building materials; (g) on such terms and conditions as may be agreed upon   between   the   Board   and   the   State Government, to declare houses constructed by it in execution of any scheme to be houses subject to the U.P. Industrial Housing Act, 1955 (U.P. Act No.XXIII of 1955); (h) to regulate building operations; (i) to improve and clear slums; (j) to   provide   roads,   electricity,   sanitation,   water­ supply and other civic amenities and essential services in areas developed by it; (k) to acquire movable and immovable properties for any of the purposes before mentioned; 37 C.A.Nos.6622-6623 of 2022 etc. (l) to raise loans from the market, to obtain grants and   loans   from   the   State   Government,   the Central Government, local authorities and other public corporations, and to give grants and loans to   local   authorities,   other   public   corporations, housing co­operative societies and other persons for any of the purposes before mentioned; (m) to make investigation, examination or survey of any property or contribute towards the cost of any   such   investigation,   examination   or   survey made   by   any   local   authority   or   the   State Government; (n) to levy betterment fees; (o) to fulfil any other obligation imposed by or under this Act or any other law for the time being in force; and (p) to do all such other acts and things as may be necessary   for   the   discharge   of   the   functions before mentioned. (2) Subject to the provisions of this Act and the rules and regulations, Board may undertake, where it deems necessary, any of the following functions, namely­ (a) to   promote   research   for   the   purpose   of expediting the construction of and reducing the cost of buildings;  (b) to execute works in the State on behalf of public institutions   local   authorities   and   other   public corporations,   and   departments   of   the   Central Government and the State Government; (c) to supply and sell building materials; (d) to   co­ordinate,   simplify   and   standardise   the production   of   building   materials   and   to encourage and organise the prefabrication and mass production of structural components; (e) with a view to facilitating the movement of the population in and around any city, municipality, 38 C.A.Nos.6622-6623 of 2022 etc. town area or notified area to establish, maintain and operate any transport service; to construct, widen   strengthen   or   otherwise   improve   roads and bridges and to give financial help to others for such purposes; (f) to do all such other acts and things as may be necessary   for   the   discharge   of   the   functions before mentioned.” As the appointments of officers and servants of the Board are dealt with by Sections 7 and 8 in Chapter II, the same do not find a place in the functions of the Board set out either in Section 15 or in   any   other   Section   in   Chapter   III.   There   are   provisions incorporated in Chapter III dealing with various schemes and the powers of the Board which can be exercised for the implementing the schemes. 30. Chapter V of the 1965 Act provides for the Board of acquiring and disposing of land for the purposes of the Act.  Under Section 59, the Board is empowered to issue debentures. Under Section 58(3), the Board is entitled to raise loans for the purposes of the Act.   Obviously,   acquiring   and   selling   the   property,   issuing debentures,   and   raising   loans   cannot   be   the   functions   of   the Board. These powers have been conferred by Chapter V to enable 39 C.A.Nos.6622-6623 of 2022 etc. the Board to effectively discharge its functions and to exercise its powers specified in Chapter III. The nature of the functions of a statutory body like the Board will always depend on the object of establishing   such   a   body.   The   appointment   of   officers   and servants needs to be made for the efficient performance of the specific functions of the Board.   The exercise of power to appoint servants   and   officers   of   the   Board   and   determination   of   their service conditions cannot constitute the functions of the Board. The powers under Chapter V and the power of appointing officers and servants under Sections 7 and 8 of Chapter II need to be exercised for ensuring proper discharge of the functions of the Board as well as for the exercise of the powers set out in Chapter III.  We are, therefore, of the considered view that the appointment of   officers   and   servants   and   determination   of   their   service conditions cannot constitute functions of the Board. POWER OF THE STATE GOVERNMENT TO ISSUE DIRECTIONS TO THE BOARD REGARDING THE   DETERMINATION   OF THE   SERVICE   CONDITIONS   OF   THE BOARD 40 C.A.Nos.6622-6623 of 2022 etc. 31. Section   92   which   provides   for   Control   of   the   State Government  over  the   Board  is  a  part  of  Chapter  X  under  the heading “External Control”.  Section 92 reads thus : “ 92.   Control   of   the   State   Government   over   the ­(1)   The   Board Board   and   other   local   authorities. shall­ (a) submit to the State Government such reports and returns in such forms and at such intervals as may be prescribed; (b) furnish to the State Government such documents, returns,   statements,   estimates   or   other   information regarding any matter under the control of the Board as may be directed by the State Government. (2)  The State Government may give the Board such directions   as   in   its   opinion   are   necessary   or expedient for carrying out the purposes of this Act, and it shall thereupon be the duty of the Board to comply with such directions. (3) Without prejudice to other provisions of this Act, and notwithstanding anything contained in any other law for the time being in force, the State Government may give any local authority such directions as in its opinion   are   necessary   or   expedient   for   enabling   the Board   to   carry   out   the   purposes   of   this   Act;   and thereupon it shall be the duty of the local authority to comply with such directions.”                                 (emphasis added) 41 C.A.Nos.6622-6623 of 2022 etc. The power under sub­section (2) of section 92 is to be exercised for issuing directions for carrying out the purposes of the 1965 Act. The issue is whether the State Government can exercise the power under   sub­section   (2)   of   Section   92   to   override   statutory Regulations framed by the Board in the exercise of powers under clause (f) of sub­section (1) of Section 95.  If the State Government desires to override or nullify such Regulations, there is a specific provision under  the said  Act of  1965 which enables  the State Government to do so.  On a conjoint reading of clause (nn) of sub­ section (1) of Section 94 and sub­section (2) of Section 95, the State Government has the power to frame Rules determining the service conditions of the officers and servants of the Board and once the Rules are framed by the State Government in this behalf, the provisions of the Regulations framed by the Board will apply only to the extent to which they are not repugnant to the Rules. Service   conditions   will   necessarily   include   salary,   perquisites, allowances,   retirement   benefits   such   as   pension,   etc.   The Regulations framed by the Board under clause (f) of sub­section (2) of Section 95 have a force of law.  On a plain reading of sub­ 42 C.A.Nos.6622-6623 of 2022 etc. section (2) of Section 92, by no stretch of the imagination, by issuing directions, the State Government can nullify the statutory Regulations framed under Section 95.   More so, when the 1965 Act itself specifically enables the State Government to nullify the Regulations by exercising the Rule making power.  As the scheme of   the   1965   Act   specifically   provides   that   Regulations   framed under   Section   94   can   be   overridden   by   framing   Rules   in accordance with clause (nn) of sub­section (1) of Section 94, the act of overriding the Regulations must be done only by framing the Rules and not in any other manner.  This view is supported by a series  of   decisions  of   this   Court  taking   a  consistent  view that where an enactment requires to do a certain thing in a certain way, the thing must be done in that way and in no other manner. There   are   several   decisions   taking   that   view   ending   with   the 6 decision of this Court in the case of  Gujarat Urja Vikas Nigam . However,   the   locus   classicus   on   this   point   is   the   well­known decision of the Privy Council in the case of  Nazir Ahmed  v.  The 12 King Emperor .   It was held by Privy Council that  12 1936 SCC OnLine PC 41 43 C.A.Nos.6622-6623 of 2022 etc.                 “where a power is given to do certain things in a certain way, the things must be done in that way and not at all. Other methods of performance are certainly forbidden”.   The   upshot   of   the   aforesaid   discussion   is   that   the   State Government has no power to issue directions under sub­section (2) of Section 92 to nullify or override the Regulations framed by the Board in the exercise of powers under clause (f) of sub­section (1) of Section 95.   Another argument of the State Government is based on sub­ 32. section (1) of Section 15 which opens with an expression “subject to the provisions of this Act and the rules and regulations”.   By use of the said expression, the exercise of the power to frame Regulations for determining the conditions of service of officers and   servants   does   not   become   a   function   of   the   Board.     The meaning of the opening part of sub­section (1) of Section 15 is that the functions   of   the   Board   must  be   discharged   subject  to  the constraints of the Rules and Regulations framed under the 1965 Act. 44 C.A.Nos.6622-6623 of 2022 etc. 33. Next limb of the argument of the State Government is based on Section 2(1) of 1975 Act.  Section 2(1) reads thus :
"2. (1)Power to issue directions to statutory
bodies.­Every statutory body (by whatever name
called), established or constituted under anyUttar
Pradesh Act, excepting Universities governed by the
Uttar Pradesh State Universities Act, 1973, as re­
enacted and amended by the Uttar Pradesh University
(re­enactment andAmendment Act), 1974,shall, in
the discharge of its functions, be guided by such
directions on questions of policies, as may be given
to it by the State Government, notwithstanding
that no such power has expressly been conferred on
the State Government under the law establishing or
constituting such statutory body."
(emphasis added) On a plain reading of the aforesaid provision, the power to issue directions vested in the State Government can be exercised only for   issuing   directions   confined   to   questions   of   policies.   The directions   can   be   issued   confined   to   policies   concerning   the discharge of the functions of the Statutory Body.  The directions issued by the State Government on the questions of policies guide every statutory body in the discharge of its functions.   For the reasons we have already recorded while dealing with sub­section 45 C.A.Nos.6622-6623 of 2022 etc. (2) of Section 92 of the 1965 Act, even the power under Section 2(1) of the 1975 Act cannot be invoked to nullify the statutory Regulations framed by the Board which have a force of law.  That can be  done  only  by exercising  the  Rule making  power  under clause (nn) of sub­section (1) of Section 94 of the 1965 Act. The power under Section 2(1) of the 1975 Act is the general power that must yield to the special powers conferred by the 1965 Act.  The power under sub­section (1) of Section 2 is different and distinct from the power to frame statutory Rules.  CONCLUSIONS ON THE THREE QUESTIONS 34. The aforesaid discussion  is sufficient to answer the  three questions framed. Subject to what we have held above, we concur 1 with the view taken by this Court in  Preetam Singh’s case .  Our answers to the three questions are as under : Q. 1   Whether   the   judgment   of   this   Court   in   Preetam   laying   down   that   conditions   of   service   of Singh’s   case officers and employees do not constitute the functions of the U.P. Avas Evam Vikas Parishad lays down the correct 46 C.A.Nos.6622-6623 of 2022 etc. law more so when the judgment does not refer to provisions of Sections 8, 92, 94(2)(nn)of the 1965 Act ?  The decision lays down the correct proposition of law. A:  Q.2   Whether   the   view   expressed   in   Preetam   Singh’s judgment   that   functions   of   the   U.P.   Avas   Evam   Vikas Parishad   are   only   the   specific   functions   enumerated   in Section 15 of 1965 Act which does not include the service conditions of employees of the Board lays down the correct law ? Whereas the functions of the Board referred to in other provisions of Act, Rules and Regulations as has been expressly provided in Section 15(1) by use of the expression “subject to the provisions of this Act and the Rules and Regulations” shall also be functions of the Board which induces service conditions of officers and employees as per Section 95(1)(f) of the 1965 Act.  A:     The   first   part   of   the   question   is   answered   in   the affirmative.  The functions of the Board are as specified in Section 15 and other relevant sections in Chapter III of the 1965 Act.  The second part is answered in the negative.  47 C.A.Nos.6622-6623 of 2022 etc. Q.3  Whether the State Government had no jurisdiction to issue directions regarding service conditions of officers and employees of the U.P. Avas Evam Vikas Parishad under the provisions   of   the   1965   Act   and   1975   Act   and   all   other enabling powers with the State Government? A:  Answered in affirmative. But the State Government can always frame Rules in the exercise of powers under clause (nn) of sub­section (1) of Section 94 of the 1965 Act for determining the conditions of service of the servants and officers of the Board. Whenever there is any inconsistency between Regulations framed under clause (f) of sub­section (1) of Section 95 and the Rules framed under clause (nn) of sub­section (1) of Section 94, the Rules will prevail and to that extent, the provisions of the Regulations which are repugnant to the Rules shall be void.  CONSIDERATION OF THE ANCILLARY  ISSUES CONCERNING THE RELIEFS  GRANTED UNDER THE IMPUGNED  JUDGMENT 48 C.A.Nos.6622-6623 of 2022 etc. 35. After having decided the questions, we are of the view that Civil Appeals can be decided in terms of our findings instead of sending them back to the Bench of two Hon’ble Judges. PENSION 36. Now,   we   proceed   to   deal   with   the   ancillary   issues.     Now coming to the new pension scheme, an Office Order was issued on th 16   January 2004 by the Board recording that a proposal for framing a scheme of pension was under consideration.  The Office th Order dated 16  January 2004 provided that those employees who were not interested in opting for the new pension scheme must file an affidavit on stamp paper of Rs.10/­.   In the said affidavit, it must be clearly and specifically asserted that the beneficiary was not interested in the new pension scheme and the entire amount deposited by him as his share along with Board’s share should be paid to the beneficiary. It was also provided that the affidavit must state that in the future, the beneficiary will not claim pensionary benefits before any authority or the Court.  According to the stand taken by the State Government, total of 582 employees/officers opted for the old scheme by filing affidavits/undertakings. The 49 C.A.Nos.6622-6623 of 2022 etc. State Government has placed on record a copy of the affidavit of respondent no.1 – Virendra Kumar in one of the appeals. It is not disputed that all the affidavits of the employees who decided not to opt for the new pension scheme are in the same format. In the affidavit, it was incorporated that the employee was not interested at all in the  pension scheme  and  he   was  interested  in taking payments under the old scheme. It is specifically stated that he will not make any claim in respect of the new pension scheme.  th After the State Government accorded its approval, on 05 37. November 1997 the Board passed a Resolution approving the new pension Scheme.  The High Court while allowing the petitions filed by Preetam Singh and others, directed the Board to implement the th new pension scheme in terms of its decision dated 05  November th 1997.  High Court allowed the petition on 16  January 2009.  For th giving effect to the decision, on 19  May 2009, the Board issued a notification recording that in the exercise of the powers under clauses (f) and (n) of sub­section (1) of Section 95 of the 1965 Act, it has decided that the pension scheme and gratuity admissible to the   officers   and   servants   of   the   State   Government   shall   be 50 C.A.Nos.6622-6623 of 2022 etc. admissible to the employees of the Board.  The relevant part of the said notification reads thus : “…. …. …. Now therefore, the U.P. Avas Evam Vikas Parishad, in exercise of the power under clause (f)(i) & (n) of sub­section (1) of Section 95 of U.P. Avas Evam Vikas Parishad Adhiniyam, 1965 (U.P. Act 1 of 1966) has decided   that   the   Pension/Family   Pension   and Gratuity admissible to the officers and employees  of State Government, which is governed by the following rules, schemes and Government orders shall also be admissible (excluding Pension commutation) to the officer and employees of the U.P. Avas Evam Vikas Parishad : 1. Civil Service Regulations as applicable  in UP.               As amended 2. Uttar Pradesh Liberalized Pension Rules, 1961 do 3. U.P. Retirement Benefit Rules, 1961 do 4. New Family Pension Scheme, 1965 do 5. All orders of finance department of U.P.  Government as related to pension/      family pension/Gratuity do 6. Newly defined Contributory Pension rules According to notification no.Sa­3­379/  Das­2005­301(9)/2003, dated March 28,  2005 applicable to officers and employees  of State Govt., who joined services on  April 01, 2005 on onwards do The orders with respect to the Pension/Family Pension/Gratuity issued time to time by the State Govt. shall also be applicable to the officers and employees of U.P. Avas Evam Vikas Parishad. 51 C.A.Nos.6622-6623 of 2022 etc. It   has   also   been   decided   by   the   Parishad   that General   Provident   Funds   Rules,   1985,   shall   be applicable to the officer and employees of U.P. Avas Evam   Vikas   Parishad   instead   of   Contributory Provident Fund (CPF) Regulations, 1973. In GPF Rules and Govt. Rules/Orders issued in this regard, ‘Govt.’ means the ‘U.P. Avas Evam Vikas Parishad’,   ‘Accountant   General’   means   ‘finance Controller of U.P. Avas Evam Vikas Parishad’ & ‘Head of Department’ means ‘Housing Commissioner’. The   State   Government   shall   not   provide   any financial   assistance   for   the   implementation   of   the said Pension Scheme. Contents   of   the   notification   shall   come   into force w.e.f. January 1, 1996 and such officers and employees of Avas Evam Vikas Parishad who have retired on or after the said date shall be benefited with the said decision. Newly   defined   Contributory   Pension   Rules notified   by   the   State   Government   shall   be applicable   to   those   employees   who   have   joined Parishad services on April 01, 2005 or onwards.”                                       (emphasis added) Thus, the new pension scheme was retrospectively brought into st force   from   1   January   1996   and   was   made   applicable   to   the employees and officers of the Board who retired on or after that date.     It   is   also   recorded   therein   that   the   newly   defined 52 C.A.Nos.6622-6623 of 2022 etc. Contributory Pension Rules notified by the State Government shall be applicable to those employees of the Board who have joined the st employment from 1  April 2005 onwards.  Thus, the applicability of   the   new   pension   scheme   was   confined   to   the   officers   and st employees who retired on or after 1  January 1996.  The officers st and employees appointed on or after 1  April 2005 were excluded from the applicability of the new pension scheme.  We must note th here that the notification dated 19   May 2009 has become final and in none of the petitions which are the subject matter of these appeals,   the   same   was   challenged.   In   fact,   in   Writ   Petition No.10355 of 2017, there was a prayer to issue a mandamus to implement   the   notification.     Moreover,   in   paragraph   21   of   the 1 decision of this Court in  Preetam Singh’s case ,   this Court issued a mandate   to  act  upon  the   said   notification.     The   notification th dated   19   May   2009   specifically   states   that   the   orders   with respect to the pension/ family pension/ gratuity issued from time to time by the State Government shall be applicable to the officers and servants of the Board.   Thus, only those employees of the st Board   who   have   retired   on   or   after   1   January   2006   will   be 53 C.A.Nos.6622-6623 of 2022 etc. entitled to the benefit of the new pension scheme and those who st are   appointed   on   or   after   1   April   2005   will   be   governed   by th another set of Rules as mentioned in the notification dated 19 May 2009. 38. In the Special Leave Petition filed by the State Government against the judgment of the Allahabad High Court in the case of Preetam Singh and others, an interim order was passed by this th Court on 7   August 2012 which had  the effect of staying the th judgment of the High Court and the notification dated 19   May th 2009.   The   further   interim   order   dated   7   September   2012 recorded that if the employees of the Board, who have retired from service,   claim   Contributory   Provident   Fund   and   other   retiral benefits (as per the old scheme), the Board shall pass appropriate orders granting the benefit under the old scheme.  However, it was clarified that the said interim order will not come in the way of the respondents before this Court agitating their claim and supporting the reliefs granted by the Allahabad High Court. Paragraph 21 of the judgment records that by the interim order, the notification th dated 19  May 2009 was stayed, and therefore, no one could get 54 C.A.Nos.6622-6623 of 2022 etc. pension under the new scheme. Therefore, the interim order was passed   which   enabled   the   employees   who   had   not   received benefits either under the old scheme or the new pension scheme, to take benefits under the old scheme. This interim order was made as no one could get the benefit of the old scheme as a result th of the stay granted to the notification dated 19   May 2009. The th interim order dated 7   September was thus applicable only to those employees who had not taken benefits under the old scheme th till 7  September 2012. Obviously, those officers and employees of the Board who opted for the old scheme by filing affidavits in th terms of the Office Order dated 16   January 2004 and received the benefits under the old scheme before the interim order dated th 07  September 2012 was passed, are disentitled to claim pension under the new pension scheme.  Those officers and employees of the Board who opted to take benefits under the old scheme after th 07   September 2012 will be entitled to benefit of the direction issued by this Court in paragraph 21 of the decision in  Preetam 1 Singh’s case   regarding the payment of pension under the new 55 C.A.Nos.6622-6623 of 2022 etc. pension scheme and the payment of interest on the differential amount. th The State Government issued two Office Memoranda on 08 39. December 2008.  The first was regarding the revision of pension/ st gratuity/   family   pension   and   commutation   with   effect   from   1 January 2006 on the basis of recommendations of the U.P. Pay Committee, 2008.  The said order specifically recorded that it will not apply to local bodies and public enterprises. The second Office th Memorandum dated 08  December 2008 was issued for applying revision of pension and family pension in respect of the employees st who have retired prior to 1  January 2006. Obviously, the second Office Memorandum is not relevant as the new pension scheme of st the Board was made applicable to those who retired on or after 1 th January 2006 as provided in the notification dated 19  May 2009. th The first Office Memorandum dated 08   December 2008 which excluded the officers and employees of the Board was challenged belatedly for the first time in 2016 in Writ Petition No.126445 of th 2016.  We may note here that the Board’s notification dated 19 May 2009 was issued in the exercise of Regulation making power 56 C.A.Nos.6622-6623 of 2022 etc. under clause (f) of sub­section (1) of Section 95 of the 1965 Act which provided that orders issued by the State Government from time to time with respect to pension/ family pension/ gratuity shall be applicable to the officers and employees of the Board.  No th part of the regulations framed by the Board on 19  May 2009 was ever challenged. Therefore, the officers and employees of the Board th who were the beneficiaries under the notification dated 19  May th 2009 were bound by the first Memorandum dated 08  December 2008   and   the   orders   passed   from   time   to   time   by   the   State Government with regard to pension and family pension.  Moreover, revised pension was granted to the State Government employees as the recommendations of U.P Pay Committee, 2008 were made applicable to them.   The said recommendations were applied to th the employees of the Board on 14  January 2010.  We may note here that the Allahabad High Court, by the impugned judgment, th has not set aside or modified the Office Memorandum dated 08 December 2008. th 40. On 16  October 2009, the State Government issued an order making applicable revised pay structure in terms of the report of 57 C.A.Nos.6622-6623 of 2022 etc. th the 7   U.P. Pay Committee, 2008 to the public enterprises and corporations   subject   to   the   terms   and   conditions   incorporated th therein.     The   Board,   by   a   letter   dated   30   November   2009, informed the State Government of its decision to apply the revised pay   structure.     It   was   sought   to   be   argued   by   some   of   the th respondents that the order dated 14   January 2010 relates to pension.  In fact, it only deals with the applicability of the revised pay structure to the employees and officers of the Board.  By the th order   dated   14   January   2010,   the   State   Government communicated its decision to allow the Board to apply the revised st pay structure on a notional basis with effect from 1   January 2006 in the pay band and grade pay in the revised pay structure th as per the table enclosed to the Government Order dated 16 October 2009.   The said order recorded that the benefit of pay structure shall be granted with immediate effect to the officers and employees of the Board by calculating the benefit on a notional st basis with effect from 1   January 2006.   The Office Order was rd issued by the Board on 23  January 2010 for implementation of th the aforesaid order dated 14  January 2010.  The meaning of the 58 C.A.Nos.6622-6623 of 2022 etc. th order dated 16  January 2010 was that the actual benefit of the revised pay structure will be available immediately from that date by calculating the pay on a notional basis in terms of the revised st pay structure with effect from 1  January 2006.  In other words, th the order dated 14  January 2010 made it clear that the officers and employees of the Board will not be entitled to revised pay from st th 1  January 2006 till 14  January 2010 and that they will get the th benefit of revised pay only from 14   January 2010.   But, while th calculating the revised pay with effect from 14  January 2010, the benefit of the revised pay structure was to be notionally provided st th from 1  January 2006.  Thus, the pay fixation as of 14  January 2010 must be made by notionally granting the benefit of the new st pay   structure   with   effect   from   1   January   2006.     The th communication dated 15  January 2011 of the State Government addressed to the Housing Commissioner of the Board records that the officers and employees of the Board will not be entitled to st th arrears of revised pay for the period from 1  January 2006 to 13 th th January 2010.   None of these orders of 16   October 2009, 14 th January 2010, and 15   January 2011 were concerning pension. 59 C.A.Nos.6622-6623 of 2022 etc. These orders deal only with the grant of a revised pay structure. But, the computation of pension has to be made on the basis of the applicable pay structure.  Hence, those who retired on or after st 1  January 2006 and those who were entitled to benefit of the new th pension scheme under the notification dated 19  May 2009 will be benefitted from the revised pay structure to the extent that their pension will have to be calculated on the basis of revision of pay st structure on notional basis from 1  January 2006.   th On  05   May   2015,   the   State   Government  issued   another 41. order regarding pensionary benefits to the officers and employees th of the Board in terms of which Office Order dated 13  May 2015 th was issued.  The gist of the said order dated 05  May 2015 is as under : (i) Such   staff   of   U.P.   Avas   and   Vikas   Parishad   whose recruitment was done on or before 31 March 2005 and who   have   not   retired   till   date,   will   be   entitled   to pension; (ii) Such staff of U.P. Avas and Vikas Parishad who had retired and had taken all the benefits under the C.P.F. Scheme   after   getting   retired,   will   not   be   entitled   to pension; 60 C.A.Nos.6622-6623 of 2022 etc. (iii) Such staff of U.P. State Avas and Vikas Parishad whose st recruitment was done on or after 1  April 2005 will not be entitled get the pension; and (iv) In   the   light   of   the   order   of   this   Court   in   Preetam Singh’s   case,   the   9%  interest  is   not   payable   to  any retired staff in C.P.F. Scheme.  In future, if the question of paying interest to any staff member arises, then the Board will bear the said expense by itself and no claim can be made from the government. The   directions   in   the   above   terms   were   incorporated   in   the th consequential   order   issued   by   the   Board   on   13   May   2015. th Notification   dated   19   May   2009   issued   by   the   Board   clearly provides that all the officers and employees who retired on or after st 1   January 2006 will be entitled to benefit of the new pension st scheme but those who were employed on or after 1   April 2005 will be entitled to benefits under the newly defined Contributory Pension Rules of the State Government.  To that extent, clause (i) th of   the   Government   Order   dated   5   May   2015   will   require modification.  Even clause (ii) will require clarification in terms of this Judgment.   Those officers and employees who have already th taken benefit of the old scheme before 07   September 2012 by 61 C.A.Nos.6622-6623 of 2022 etc. giving undertakings will not get the benefit of the new pension scheme but those who have taken the benefit of the old scheme th after the date of the interim order dated 7  September 2012 will be entitled to take benefit of the new pension scheme.  Clause (iii) th of the order means that in view of the notification dated 19  May st 2009, those who are appointed on or after 1  April 2005 will not get   the   benefit   of   the   new   pension   scheme   under   the   said notification.   As regards clause (iv), interest will be payable in 1 terms of the decision of this Court in  Preetam Singh’s case , only to those employees and officers who had not taken benefit of the th old scheme before the interim order dated 07   September 2012 was passed by this Court.  Interest in terms of the decision of this Court will be payable on differential amounts, to those who have th taken benefits under the old scheme after 07   September 2012. To   the   above   extent,   the   directions   of   this   Court   issued   in 1 Preetam Singh’s case  will have to be clarified. ARREARS OF PAY IN TERMS OF REVISED PAY STRUCTURE 62 C.A.Nos.6622-6623 of 2022 etc. 42.  Now, the other issue which survives is whether the officers and employees are entitled to arrears of pay as per the revised pay st th structure for the period between 1  January 2006 to 13  January 2010.  The impugned judgment proceeds on the footing that the order   of   the   State   Government   directing   that   the   officers   and employees   of   the   Board   will   get   the   benefit   of   the   new   pay st th structure notionally from 1  January 2006 and actually from 14 January 2010 is issued in the exercise of power under Section 2(1) of 1975 Act and Section 92(2) of the 1965 Act. Therefore, the High Court held that the State Government could not have issued the said direction regarding the determination of conditions of service as   the   determination   of   the   conditions   of   service   was   not   a function of the Board. As   far   as   the   applicability   of   the   pay   structure   to   the 43. employees   and   officers   of   the   Board   is   concerned,   there   is no material placed on record to show that the Regulation making power   under   Section   95   was   at   all   exercised   by   the   Board regarding applying revised pay structure applicable to the State Government employees to its own employees.  All that the Board 63 C.A.Nos.6622-6623 of 2022 etc. th did was to implement the order of the State Government dated 14 January   2010   by   granting   a   revised   pay   structure   to   its employees.   The said order is based on the order of the State th Government issued on 16  October 2009 by which a decision was taken to apply the revised pay structure applicable to the State Government   employees   to   the   employees   of   public   sector enterprises on the terms and conditions incorporated therein.  As noted earlier, by exercising the Rule making power under clause (nn) of sub­section 2 of Section 94 of the 1965 Act, the State Government could have always determined the pay scales of the officers and employees of the Board. If it is held that the State th Government had no power to issue the orders dated 16  October th 2009 and 14  January 2010, the employees of the Board will not get the benefit of the revised pay structure made applicable to the Government   employees   as   the   Board   has   not   framed   the Regulations under clause (f) of sub­section (1) of Section 95 of the 1965 Act providing for the grant of revised pay structure to the employees.     Surprisingly,   in   paragraph   22   of   the   impugned th judgment, the High Court has held that the orders dated 16 64 C.A.Nos.6622-6623 of 2022 etc. th October 2009 and 14  January 2010 would have no applicability in   the   matter   of   laying   down   the   conditions   of   service   of   the employees of the Board.  If this finding is upheld, the employees of the Board will be completely deprived of the benefit of the revised pay   structure   as   there   is   no   Regulation   made   by   the   Board operating in the field.  Hence, the employees of the Board will be entitled to the revised pay structure in terms of the said orders as th clarified by the further order dated 15  September 2011. st th The grant of arrears from 1  January 2006 till 14  January 44. 2010   will   involve   huge   financial   implications   for   the   Board. Financial constraint is a valid ground for denying arrears as per the revised pay structure. The decision to provide the benefit of a higher pay structure to the officers and employees of the Board was taken by the State Government subject to the condition of not st th paying arrears for the period between 1  January 2006 and 14 January 2010. Therefore, we cannot approve the direction issued by the High Court under the impugned judgment to pay arrears of st wages as per the new pay structure for the period from 1  January th 2006 to 14  January 2010. 65 C.A.Nos.6622-6623 of 2022 etc. 45. Hence, our conclusions are as under : (i) We   uphold   the   decision   of   this   Court   in   Preetam 1 Singh’s   case   with   a   modification   that   the   State Government   can   always   exercise   the   powers   under clause (nn) of sub­section (1) Section 94 of the 1965 Act for determining the conditions of service of the officers (other than the Housing Commissioner) and employees of   the   Board.     If   such   power   is   exercised,   those provisions of the Regulations framed under clause (f) of sub­section (1) of Section 95 which are repugnant to the Rules, shall be void; (ii) All the officers and employees of the Board who have th not   received   the   benefit   of   the   old   scheme   till   07 st September   2012   and   have   retired   on   or   after   1 January 2006 shall be entitled to benefit of the new th pension scheme as per the notification dated 19  May 2009 issued by the Board provided they are otherwise eligible.  However, the officers and employees appointed st on or after 1  April 2005 will be governed by the newly 66 C.A.Nos.6622-6623 of 2022 etc. defined Contributory Pension Rules notified by the State Government; (iii) Those officers and employees of the Board who have st retired on or after 1  January 2006 and who have not received benefits under the old scheme till date shall be entitled   to   interest   as   directed   by   this   Court   in 1 paragraph 21 of the decision in  . Preetam Singh’s case Even those officers and employees who are entitled to benefit   of   the   new   pension   scheme   in   terms   of   the th notification dated 19   May 2009 and who have taken benefits under the old scheme pursuant to the interim th order   dated   07   September   2012,   will   be   entitled to interest on differential amounts, as directed in terms of paragraph 21 of the decision of this Court in  Preetam 1 Singh’s case ; (iv) Those officers and employees of the Board who have th accepted the benefit under the old scheme before 7 September 2012 after giving an undertaking in terms of th the Office Order dated 16   January 2004 shall not be 67 C.A.Nos.6622-6623 of 2022 etc. entitled to the benefit of the new pension scheme made th applicable as per the notification dated 19  May 2009; (v) While calculating the pension amount payable to those who are entitled to the new pension scheme in terms of th the   notification   dated   19   May   2009,   the   benefit   of notional   pay   fixation   in   terms   of   the   revised   pay st structure with  effect from 1   January 2006  shall be provided; and (vi) All the officers and employees of the Board who are entitled to benefit of the revised pay structure in terms th of the Government Order dated 14  January 2010 shall be provided the said benefit within a period of three months   from   today,   if   not   provided   earlier.     While extending the said benefit, their pay shall be notionally determined as per the revised pay structure with effect st from   1   January   2006.   However,   they   shall   not   be entitled   to   arrears   of   salary   as   per   the   revised   pay st th structure from 1  January 2006 till 14  January 2010. However, in the cases of the employees and officers who 68 C.A.Nos.6622-6623 of 2022 etc. have   already   received   the   arrears,   no   recovery proceedings shall be initiated against them. The impugned judgment and order stands modified in terms 46. of   the   above   conclusions.     The   civil   appeals   are   disposed   of accordingly with no order as to costs. .…....…………………J. [Sanjay Kishan Kaul] …….…………………J. [Abhay S. Oka] …….…………………J. [Vikram Nath] New Delhi; November 25, 2022. 69