Full Judgment Text
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.
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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
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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
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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
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short ‘the new pension scheme’). On 16 May 1996, the State
Government accorded its consent to the new pension scheme
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2014 (15) SCC 774
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subject to the condition that the Board will not be entitled to
seek any financial assistance for the implementation of the new
pension scheme.
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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
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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
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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
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in the petition was initially confined to the challenge to the
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Government Order dated 14 September 1999. During the
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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
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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
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undertakings. On 13 September 2005, the State Government
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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
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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
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Board. The writ petition filed by Preetam Singh and others
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was amended and a challenge to the orders dated 13
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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
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memorandum dated 8 December 2008 for applying a revised
pension, gratuity/family pension, and commutation scheme
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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
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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
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retired before 1 January 2006. This order was made
applicable to the employees of Public Sector Enterprises who
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were already getting pension prior to 1 January 2006. A
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Division Bench of Allahabad High Court by the judgment and
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order dated 16 January 2009 allowed the writ petition filed by
. The High Court quashed the orders
Preetam Singh & others
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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
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scheme in terms of its Regulations framed on 5 November
1997.
5. In view of the decision of the High Court, a notification
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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
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force and will apply to those officers who retired on or after 1
January 1996. However, it was stated that the Newly Defined
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Contributory Pension Rules of the State Government will be
applicable to those employees of the Board who have joined the
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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
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this Court in Preetam Singh’s case was rendered. It was
observed in paragraph 21 of the final judgment of this Court
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that the interim order dated 7 August 2012 passed by this
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Court had the effect of staying the notification dated 19 May
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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.
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7. One of the main contentions canvassed by the State of
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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
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State Government was that the orders issued on 13 September
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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.
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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
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its employees does not constitute a function of the Board.
Therefore, this Court held that the State Government had no
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power to issue the directions contained in its orders dated 13
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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
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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
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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
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19 May 2009 within a period of three months. Paragraph 21
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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
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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)
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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
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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
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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
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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
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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
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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
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1 January 2006 in the pay band and grade pay as per the table
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annexed to the Government Order dated 16 October 2009. It
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provided that the actual benefit shall be provided with immediate
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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
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structure with effect from 1 January 2006. They were entitled to
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revised pay scales only on a notional basis from 1 January 2006
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and to the actual benefits only from 14 January 2010. Based on
the said communication, an Office Order was issued by the Board
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on 23 January 2010 for giving effect to the communication dated
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14 January 2010. In fact, another Government Order was issued
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on 15 September 2011 stating that in terms of the order dated
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14 January 2010, pay scales of the employees of the Board will
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be notionally revised with effect from 1 January 2006 but the
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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
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the period of 1 January 2006 to 13 January 2010.
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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
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Board in terms of the new pension scheme with retrospective
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effect from 1 January 2006. The decision of the State
Government, inter alia, provided that the employees who were
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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
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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
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Government Order of 05 May 2015, the Board issued Office
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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
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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
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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
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employees of the Board for challenging the order dated 05 May
2015 passed by the State Government and the consequential
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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
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U.P. Avas Evam Vikas Parishad Regulations
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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
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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:
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(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
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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
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the notification dated 19 May 2009 by which the Board applied
the new pension scheme to the employees who retired on or after
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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
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directions of the State Government impugned by the private
respondents cannot be faulted. After inviting our attention to the
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interim order dated 7 September 2012 passed by this Court, the
learned ASG submitted that those who have unconditionally
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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
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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.
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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
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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,
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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
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dated 19 May 2009. The learned counsel invited our attention to
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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
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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
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case of D.S. Nakara & Ors. v. Union of India as well as another
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decision in the case of V. Sukumaran v. State of Kerala & Anr. .
2
1983 (1) SCC 305
3
2020 (8) SCC 106
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He would, therefore, submit that reconsideration of the view
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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
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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.
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; v.
Ramdas Sriniwas Nayak & Anr. Dhananjaya Reddy etc.
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State of Karnataka ; and Gujarat Urja Vikas Nigam Ltd. v.
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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
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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
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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
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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
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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
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Commercial Tax Officer, Rajasthan v. Binani Cements Ltd. &
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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 any | Uttar | |||||||||||
| Pradesh Act | , excepting Universities governed by the | |||||||||||
| Uttar Pradesh State Universities Act, 1973, as re | ||||||||||||
| enacted and amended by the Uttar Pradesh University | ||||||||||||
| (reenactment and | Amendment 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