New Okhla Industrial Development … vs B.D. Singhal on 15 July, 2021


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Supreme Court of India

New Okhla Industrial Development … vs B.D. Singhal on 15 July, 2021

Author: Hon’Ble Dr. Chandrachud

Bench: Hon’Ble Dr. Chandrachud, M.R. Shah

                                                                                       Reportable


                                      IN THE SUPREME COURT OF INDIA
                                       CIVIL APPELLATE JURISDICTION


                                          Civil Appeal No. 2310 of 2021
                                    (Arising out of SLP(C) No 11793 of 2018)


          New Okhla Industrial Development Authority & Anr.                       …Appellants

                                                     Versus
          B D Singhal & Ors.                                                     …Respondents


                                                      WITH
                                           Civil Appeal No. 2311 of 2021
                                      (Arising out of SLP (C) No.3861 of 2020)




                                                JUDGMENT

Dr Dhananjaya Y Chandrachud, J

1 On 30 September 2012, the Government of Uttar Pradesh acceded to a

proposal of the Appellant to enhance the age of superannuation of its employees

from fifty-eight to sixty years, prospectively. A Division Bench of the High Court of

Judicature at Allahabad set aside the decision of the State government to give

prospective effect to the enhancement in the age of superannuation and in the

exercise of its power of judicial review under Article 226 of the Constitution
Signature Not Verified

Digitally signed by

directed that retrospective effect be given to the Government Order from 29
Sanjay Kumar
Date: 2021.07.15
13:55:52 IST
Reason:

1
September 2002. The appeals by New Okhla Industrial Development Authority1

and the State of Uttar Pradesh question the correctness of this determination.

Simply put, the appeals raise the issue as to whether the High Court has

transcended the limits of its power of judicial review.

I           The Facts


2           The New Okhla Industrial Development Authority is constituted under the

provisions of the UP Industrial Area Development Act 19762. The object was to

constitute an authority for the development of certain areas of the State notified

under Section 3 of the Act, into industrial and urban townships. The legislation

provides for the constitution of the authority, its functions, powers, and for the

appointment of the staff members. While the administrative head is appointed by

the State government, Section 5 of the Act provides for the appointment of the

staff:

“5. Staff of the Authority. – (1) Subject to such control and
restrictions as may be determined by general or special
orders of the State Government, the Authority may appoint
such number of officers and employees, as may be
necessary for the performance of its functions, and may
determine their grades and designations.

(2) Subject as aforesaid the officers and other employees of
the Authority shall be entitled to receive from the funds of the
Authority, such salaries and allowances and shall be
governed by such other conditions of service as may be
agreed upon with the Authority.”

1
“NOIDA”.

2

“the Act”.

2

Section 19 enables the authority, with the previous approval of the State

government to frame regulations for the administration of the affairs of the

authority. Section 19 reads as follows:

“19. Power to make regulations. – (1) The Authority may,
with the previous approval of the State Government, make
regulation not inconsistent with the provisions of this Act or
the rules made thereunder for the administration of the affairs
of the Authority.

(2) In particular, and without prejudice to the generality of the
foregoing power, such regulation may provide for all or any of
the following matters, namely,-

(a) the summoning and holding of meetings of the Authority,
the time and place where such meetings are to be held, the
conduct of business at such meetings, and the number of
members necessary to form a quorum thereat;

(b) the powers and duties of the Chief Executive Officer;

(c) the form of register of application for permission to erect a
building;

(d) the management of properties of the Authority ;

(e) fees to be levied in the discharge of its functions;

(f) such other matters as are to be provided for in regulation.”

In pursuance of its power under Section 9 of the Act, the Authority framed the

New Okhla Industrial Development Authority Service Regulations, 1981 3

governing recruitment, appointment, pay, and other service conditions of the

staff. Regulation 25 of the Noida Regulations, 1981 states that the age of

superannuation of the employees is fifty eight. It reads as follows:

“Retirement 25. An employee shall retire at the age of fifty-
eight years.”

3
“NOIDA Regulations, 1981”.

3

3 On 28 November 2001, the State government issued a notification 4

enhancing the age of retirement of ‘Government servants’ from fifty-eight to sixty

years. Pursuant to this, Fundamental Rule 56A was amended on 27 June 2002

enhancing the age of superannuation of government servants to sixty years with

effect from 28 November 2001.

4 On 29 June 2002, the Board of NOIDA resolved to recommend that the

age of superannuation of its employees should be increased from fifty-eight to

sixty years. A recommendation to that effect was submitted to the State

government on 22 March 2005, since an amendment of the NOIDA

regulations,1981 would require the previous approval of the State government in

terms of Section 19 of the Act.

5 On 2 September 2005, the State government informed NOIDA that the

decision on its proposal was deferred. Eventually, on 22 September 2009, the

State government rejected the proposal to enhance the age of retirement of

NOIDA employees. Challenging the decision of the State government,

proceedings were initiated under Article 226 of the Constitution before the High

Court of Judicature at Allahabad 5 by certain employees seeking:

(i) A Writ of certiorari to quash the government order dated 22 September

2009; and

(ii) A Writ directing the respondents to those proceedings not to retire the

employees at the age of fifty-eight and to allow them to continue till they

attain the age of sixty years.

4
No. 1098/Pers-1/2001
5
Writ Petition No. 48162/2010.

4
6 A Division Bench of the High Court rendered judgment in the writ

proceeding on 17 January 2012 by which it directed NOIDA to consider the issue

in its next Board meeting after taking into account the financial burden that may

be occasioned to the authority by an increase in the age of retirement. The High

Court specifically left it open to the government to consider whether to give effect

to the increase in the age of retirement from the date on which NOIDA resolved

to bear the financial burden or from such other date as the government may find

expedient. As para 13 of the operative directions indicates:

“13. Having regard to facts and circumstances, we dispose of
the writ petition with directions that NOIDA may consider the
matter in its next Board meeting, taking into account its earlier
resolution made in the year 2002, to bear the financial
burden, after financial assessment of such burden, and the
effect of increase of retirement age on other employees. It
may thereafter refer the matter to the concerned
Administrative Department of the State Government for its
evaluation and recommendation, and for forwarding the same
to the State Government for its approval. We also direct that if
such a decision is taken by the State Government, it will be
open to the State Government to consider to give effect to·
the increase in the age of retirement with effect from the date
when the NOIDA had resolved to bear the financial burden, or
from any such date, which the State Government may find it
expedient.”

7 On 9 July 2012, the Board of NOIDA at its 176th meeting resolved to

recommend to the State government to increase the age of retirement for its

employees from fifty-eight to sixty years “with immediate effect”. The resolution

was communicated to the State government by a letter dated 17 July 2012 which,

in its material segment reads as follows:

“…the Board in its 176th Meeting held on 9.7.2012 has
passed a resolution proposing to increase the age of
superannuation from 58 to 60 years (attested copies of the

5
agenda and the Minutes of the Board resolution are
enclosed), wherein it is clearly stated that the financial burden
on account of increasing the age of retirement from 58 to 60
years would be borne by the Authority from its own resources
and no financial aid of any kind would be taken from the State
Government either at present or in the future. Therefore, it is
requested that the increase in the age of retirement of the
officers I employees of the Authority be increased from 58 to
60 years with immediate effect.”

8 On 27 August 2012, a writ petition was instituted by the first and second

respondents to (i) challenge the order of the State government dated 22

September 2009 rejecting the original proposal for enhancement of the age of

retirement; and (ii) for a direction not to retire the first and second respondents at

the age of fifty-eight and to allow them to continue until the age of sixty. Now, at

this stage it is material to take note of certain facts pertaining to the first and

second respondents. The second respondent was appointed in service on 21

March 1977 (his date of birth being 18 August 1954). The first respondent was

appointed on 6 March 1980 (his date of birth being 15 August 1954). Both the

employees were due to retire on 31 August 2012 on attaining the then prevailing

age of superannuation. On 31 August 2012, notice was issued on the writ petition

but no interim order was passed resulting in both of them superannuating on 31

August 2012.

9 On 30 September 2012, the Government of Uttar Pradesh acceded to

NOIDA’s proposal for enhancing the age of retirement to sixty years. However,

this was expressly made prospective in terms of the paragraph 1 (ii), which reads

as follows:

6

“(ii) This provision shall come into force in the NOIDA with
immediate effect (from the date of issue of this Govt. order)
and there shall not for any retrospective effect.”

10 The petition before the High Court was amended to incorporate a relief

seeking to quash paragraph 1(ii) of the order of the State government dated 30

September 2012. A Division Bench of the High Court at Lucknow allowed the writ

petition and struck down the provisions of para 1(ii). While doing so the High

Court directed that the increase in the age of superannuation to sixty years shall

have retrospective effect from 29 June 2002, and the first and second

respondents would be deemed to have worked until the extended age of

retirement. Their benefits were directed to be computed accordingly. This led to

the filing of Special Leave Petitions before this court under Article 136. Assailing

the judgment of the High Court, a companion petition has been filed by the

Government of Uttar Pradesh. While issuing notice on 19 November 2018 on

NOIDA’s Special Leave Petition, this Court granted an ad interim stay of the

judgment of the High Court.

II    The Contentions


11    Challenging the judgment of the High Court, Mr Ravindra Kumar, learned

Counsel appearing on behalf of NOIDA has urged the following submissions:

(i) The Service Regulations and consequently amendments to them are in

the nature of subordinate legislation. No part of the amended Regulations

could have been struck down –para 1(ii) in this case – unless they were

declared to be ultra vires the provisions of the Constitution or the parent

7
Statute. There is no such declaration by the High Court while delivering the

impugned judgement;

(ii) The High Court has committed a manifest error while directing that the

revision in the age of the retirement shall apply retrospectively with effect

from the date of the Resolution dated 29 June 2002. While issuing such a

direction, the High Court failed to consider the following:

(a) The Government Order dated 30 September 2012 was issued

approving the recommendation of NOIDA dated 17 July 2012

and not in the context of the earlier recommendation dated 29

June 2002;

(b) The earlier recommendation dated 29 June 2002 had been

rejected by the State Government on 22 September 2009.

The Writ Petition 6 which had been filed challenging the State

government’s rejection order dated 22 September 2009 was

decided on 17 January 2012, much before the filing of the writ

petition by first and second respondents on 27 August 2012 in

which the impugned judgment was delivered;

(c) In the above Writ Petition though a prayer was made to quash

the Government Order dated 22 September 2009, yet no

such relief as prayed was granted. On the contrary, the only

direction was that NOIDA may consider the matter again in its

next Board Meeting and thereafter refer the matter to the

State government for its approval. It was observed in the

6
WP No. 48162 of 2010.

8
judgement dated 17 January 2012 that if any decision

approving the recommendation is taken by the State

Government, it will be open to it to decide the date from

which it may find it expedient to increase the age of

retirement; and

(d) After the judgement dated 17 January 2012, NOIDA sent a

fresh recommendation to the State Government on 17 July

2012. This recommendation was ultimately accepted by the

State Government and a Government Order dated 30

September 2012 was issued by it. This Government Order

directs that the increase in the age of retirement from fifty-

eight to sixty years “shall come into force with immediate

effect (from the date of issue of this Government Order) and

there shall not be any retrospective effect”.

(iii) When the order directing increase in the age of retirement is clear, namely

that it shall come into force with immediate effect coupled with the words

that the increase shall not have any retrospective effect, then the intention

of the maker of the subordinate legislation categorical obviates any

possible interpretation giving it retrospective effect. In these

circumstances, the Court cannot issue directions giving retrospective effect

to the amendment. The golden rule of statutory interpretation is that in the

absence of an express provision or a necessary intendment providing

retrospectivity, the interpretation must only be prospective. An exception to

9
this rule is only available in matters of procedure. (P. Mahendran v. State

of Karnataka7; C.Gupta v. Glaxo-Smithkline Pharmaceuticals Ltd.8);

(iv) The observation of the High Court that the Government should have acted

instantly “when the resolution was received by it more than 3 years back”

is factually incorrect. The Government Order dated 30 September 2012

itself recites that it is issued in reference to the recommendation dated 17

July 2012. Therefore, there was no delay of 3 years in the issuance of the

Government Order. The Government Order was issued in a little more

than 2 months. The High Court has erred in directing that the writ

petitioners shall be deemed to have worked with NOIDA till the age of sixty

years and they be paid salary and other benefits for two years during

which they never worked. The first and second respondents were due for

retirement with effect from 31 August 2012. They filed the writ petition on

or about 27 August 2012, praying that they be permitted to continue on

their posts till they attain the age of sixty years and salary be paid to them

accordingly. However, while issuing notice on the writ petition or at any

time thereafter no interim order was granted by the High Court. When the

first and second respondents performed no work, they are not entitled to

receive salary for such period. The principle of ‘no work no pay’ will

applicable in such a situation. The inability of the writ petitioners to

persuade the High Court to grant interim orders cannot act to the

advantage of the respondents. This is not a case of termination of services

7
(1990) 1 SCC 411.

8

(2007) 7 SCC 171.

10
which is later set aside by an order of the court thereby directing payment

of salary as arrears;

(v) The High Court has granted relief which was not prayed. It has ordered

that the increase in the age of retirement would be effective from 29 June

2002. The first and second respondents in their counter affidavit (at page

146 and 155), have admitted that relief was prayed with effect from 9 July

2012. Thus, the direction contained in the impugned judgment that the

increase in the age of retirement would be effective from 29 June 2002 is

unsustainable;

(vi) The effect of the impugned judgment runs contrary to the earlier Division

Bench’s judgment dated 17 January 2012, and is beyond the prayers

made in the writ petition. It has resulted in demands from dozens of

employees of NOIDA, who had retired decades ago. For example, in

September, 2004, employees made demands seeking arrears of pay and

allowances considering the retirement age as sixty years for them as well.

The interpretation / direction given in the impugned judgment has a

cascading effect and is unsustainable in law; and

(vii) The High Court was under the wrong impression that NOIDA, the authority

that is to bear the financial burden consequent to the increase in the age of

retirement supported the case of the Respondents/employees that the

Government Order issued on 20 September 2012 must have retrospective

effect.

11
12 Mr Vinod Diwakar, learned AAG for the State of Uttar Pradesh has

adopted the submission of Mr Ravindra Kumar, learned Counsel for NOIDA.

13 Ms Tanya Shree, learned Counsel has appeared on behalf of the

respondents to oppose the submissions in the appeals. Before elucidating the

submissions, it would be necessary to extract a submission from the counter

affidavit which has been filed by the respondents in response to the present

proceedings. Paragraph 6 of the counter affidavit reads as follows:

“Further, it is submitted that the Answering Respondents
herein did not seek the benefit of enhancement of age of
retirement of the employees of the Petitioner-Authority from
the date of its earlier resolution dated June 29, 2002. In fact it
was the case of the Answering Respondents before the
Hon’ble High Court in Writ Petition being Writ-A No. 43780 of
2012 that the age of retirement of the Answering
Respondents be enhanced w.e.f the date of resolution dated
July 9, 2012 of the Petitioner-Authority and the Answering
Respondents are only claiming a limited relief of enhancing
the age of retirement of the Answering respondents w.e.f. the
date of Resolution of the Petitioner-Authority i.e July 9,
2012.”

The above extract from the counter affidavit has clarified that the relief which the

respondents – employees sought is the enhancement of the age of retirement

with effect from 19 July 2012 which is the date on which the Board of NOIDA

resolved to increase the age of retirement. In this backdrop, Ms Tanya Shree

submitted as follows:

(i) The decision of the State government dated 20 September 2011 to

enhance the age of superannuation for its employees was circulated inter

alia to public sector undertakings and corporations enabling them to

determine whether they were in a position to bear the financial burden

12
attendant upon an increase in the age of retirement. Upon examination of

the financial impact, if each corporation resolved to accept the financial

burden, it could then seek the approval of the State government. All such

decisions were to be implemented only after the approval of the State

government, though it was made clear that no financial grants would be

provided to meet the additional cost outlay;

(ii) In the case of several other public sector corporations, the State

government resolved to increase the age of retirement. In certain cases it

resolved to give retrospective effect; for instance in the case of the Uttar

Pradesh State Handicrafts Corporation Ltd., the government by its decision

dated 17 April 2012 resolved to increase the age of retirement with effect

from 20 December 2011;

(iii) On 16 August 2012, a letter was addressed by the respondents to the

Chief Minister requesting for an enhancement in the age of retirement

since NOIDA had agreed to bear the financial burden by its resolution

dated 9 July 2012 and adverting to the fact that several employees would

be retiring by the end of August 2012;

(iv) The State government did not provide any reasons why it did not make its

decision operative with effect from 9 July 2012, the date when the

resolution was passed by the Board of NOIDA to enhance the age of

retirement;

(v) Though, the respondents had approached the government of Uttar

Pradesh with a representation seeking permission to allow them to work

13
till the age of 60 years, the representation was not allowed. As a

consequence of this they are entitled to the payment of their salary and all

other consequential benefits occasioned by the extension in the age of

retirement since it was the appellant authority that did not permit the

respondents to continue in service though they were willing to work. In

State of Uttar Pradesh v. Dayayanand Chakrawarthy9 it was held that if

the employer prevents the employee from performing his duties, the

employee cannot be blamed for his absence from duty and the principle of

‘no pay no work’ shall not be applicable to such an employee; and

(vi) The Board resolution of 9 July 2012 proposed to increase the age of

retirement of the employees with immediate effect. The authority is now

estopped from going back on its own resolution and denying the benefit of

the enhancement of age from the date of the resolution.

III        The Analysis


14         The High Court while striking down para 1(ii) of the Government Order

dated 30 September 2012 to enhance the age of retirement with prospective

effect (para 1(ii) of the government order makes this position clear) has directed

that the enhancement of the age of retirement must date back to 29 June 2002.

This direction giving retrospective effect to the enhancement in the age of

retirement seems to be based on the fact that the original resolution of the Board

of NOIDA to enhance the age of retirement was issued on 29 June 2002. In

granting this relief, the High Court has formulated two reasons in its judgment:

9

(2013) 7 SCC 595.

14
firstly, the government order dated 30 September 2012 is arbitrary for having

increased the age of retirement with effect from the date of the order without

giving the benefit to employees who had retired prior to that date ;and secondly,

there was no reason to refuse the benefit of an extension of the age of

superannuation retrospectively when the resolution was received by the State

government “more than three years back”.

15 The reasons which have weighed with the High Court are based on

factually incorrect premises and are founded on a misunderstanding of the legal

position. After the Board of NOIDA resolved on 29 June 2002 to enhance the age

of superannuation from fifty-eight to sixty years, its recommendation was

forwarded to the State government on 22 March 2005. On 2 September 2005, the

State government deferred a decision on the recommendation. Subsequently,

the proposal was rejected on 22 September 2009.

16 The order of rejection was challenged in writ proceedings 10 which

culminated in the judgment of the Division Bench rendered on 17 January 2012.

The Division Bench refused to quash the order of rejection. Evidently, at that

stage, the basic issue was in regard to whether the financial burden could be

borne by an authority such as NOIDA. This is evident from the fact that the High

Court while deciding upon the merits of the proceedings under Article 226 held

that it was for the Board of NOIDA to consider whether it could bear the financial

burden occasioned by an increase in the age of retirement, and to thereafter

move the State government for its approval. While disposing of the Writ Petition,

the High Court specifically observed that “it will be open to the State government

10
W.P No. 48162/2010.

15
to consider to give effect to the increase in the age of retirement with effect from

the date when NOIDA has resolved to bear the financial burden, or from any such

date, which the State Government may find it expedient.” This order has attained

finality since it was not challenged before this Court.

17 It was in terms of the order of the High Court that the Board of NOIDA

resolved on 9 July 2012 to recommend to the State government that the age of

superannuation of its employees should be enhanced with immediate effect, and

the additional financial outlay would be met from the resources of the authority

without any claim for grants being made to the State government. The State

government responded to this proposal by acceding to the request to enhance

the age of superannuation, though prospectively from 30 September 2012.

18 NOIDA, as an authority, constituted by the UP Industrial Area

Development Act 1976 is bound by the rigour and discipline of the statute. The

power to appoint officers and employees is conferred upon the authority by

Section 5(i) “subject to such control and restrictions as may be determined by

general or special orders of the State government”. Section 19 requires the prior

approval of the State government to the regulations framed by the authority. The

regulations governing the conditions of service were notified on 14 January 1981

with the previous approval of the State government. Under Regulation 25 of the

NOIDA Regulations 1981, the age of superannuation was fixed at fifty-eight

years. Consequently, any enhancement of the age of superannuation would

require an amendment of the service regulations necessitating, in terms of

Section 19, the prior approval of the State government.

16
19 Whether the age of superannuation should be enhanced is a matter of

policy. If a decision has been taken to enhance the age of superannuation, the

date with effect from which the enhancement should be made falls within the

realm of policy. The High Court in ordering that the decision of the State

government to accept the proposal to enhance the age of superannuation must

date back to 29 June 2002 has evidently lost sight of the above factual

background, more specifically (i) the rejection of the original proposal on 22

September 2009; and (ii) the judgment of the Division Bench dated 17 January

2012 refusing to set aside the order rejecting the proposal on 22 September 2009

which has attained finality. But there is a more fundamental objection to the basis

of the decision of the High Court. The infirmity in the judgment lies in the fact that

the High Court has trenched upon the realm of policy making and has assumed

to itself, jurisdiction over a matter which lies in the domain of the executive.

Whether the age of superannuation should be increased and if so, the date from

which this should be effected is a matter of policy into which the High Court ought

not to have entered.

20 The factual reasons which the High Court has indicated are specious. The

High Court has termed the decision to give prospective effect to the

enhancement of the age of superannuation from 30 September 2012 as arbitrary

on the ground that the government should have “acted instantly” when the

resolution was received from NOIDA, and that there was no justification not to

grant retrospective effect when the resolution had been received “more than

three years back”. Both these factors are erroneous. As a matter of fact, the

resolution of the Board of NOIDA dated 9 July 2012 (at its 176th meeting) was

17
forwarded to the State government on 17 July 2012 and a decision was taken in

about two months from the date of receipt of the proposal. The High Court’s

observation on the delay of three years in taking a decision on the resolution of

NOIDA is in reference to the 2005 resolution, which was rejected on 22

September 2009. As stated above, the Government resolution of 2012 was

impugned before the High Court, and the 2009 rejection order had attained

finality in view of the judgment of the division bench of the High Court on 17

January 2012 which was not challenged before this court.

21 Whether the decision to increase the age of superannuation should date

back to the resolution passed by NOIDA or should be made effective from the

date of the approval by the State government was a matter for the State

government to decide. Ultimately, in drawing every cut-off, some employees

would stand on one side of the line while the others would be positioned

otherwise. This element of hardship cannot be a ground for the High Court to

hold that the decision was arbitrary. When the State government originally

decided to increase the age of superannuation of its own employees from fifty-

eight to sixty years on 28 November 2001, it had left the public sector

corporations to take a decision based on the financial impact which would result if

they were to increase the age of superannuation for their own employees.

22 From time to time the authorities of the State took a decision bearing upon

the exigencies of service prevailing in each organisation. By an OM dated 16 May

2005, the age of retirement of employees of the Agricultural Produce and

Marketing Committee (APMC) was enhanced with immediate effect, without

giving retrospective operation. Similarly, on 15 December 2006 the age of
18
retirement of employees of the UP Power Corporation was enhanced without

conferring retrospective effect. On 17 April 2012, the age of superannuation of

the employees of UP State Handicrafts Corporation Limited was enhanced with

effect from 20 December 2011. On 22 May 2012, the age of superannuation of

the employees of the UP State Industrial Development Corporation Limited was

enhanced “with immediate effect”. Different corporations of the State are

governed by their service rules and regulations, and by the exigencies of service.

The State government had evidently determined that it was for each organisation

to consider and determine the impact of the financial burden, and based on that

the organisation was to submit a proposal for the approval of the government.

23 The High Court’s observation that the Government order on 30 September

2012 increasing the age of superannuation prospectively is arbitrary seems to be

based on the premise that the respondent-employees have a vested right to the

increase in the age of retirement on the passage of the resolution by NOIDA.

However, Section 19 of the Act stipulates that regulations – which would include

amendments as in this case – will require the previous approval of the State

Government. The employees will have a vested right to the increased age of

superannuation only after the service regulations are modified upon approval of

the State Government, and from such date as maybe prescribed by the

Government. Para 1(ii) of the government order issued on 30 September 2012

clearly and in unambiguous terms states that the order shall come into force

prospectively. The government order can be given retrospective application only

if expressly stated or inferred through necessary implication. Therefore, the

respondent-employees could not have claimed a vested right that the

19
enhancement in the age of retirement should be made effective from the date on

which NOIDA had resolved to submit a proposal for the approval of the

government.

24 The argument of the respondents that the appellant-authority is estopped

from claiming that the government order issued on 30 September 2012 cannot be

given retrospective effect from 9 July 2012 since the Board resolution proposed

an increase in the retirement age of its employees with ‘immediate effect’ is

unsustainable. For the principle of promissory estoppel to apply, one party must

have made an unequivocal promise, intending to create or affect a legal

relationship between the parties.11 The recommendation of NOIDA cannot create

or alter the legal relationship since it is subject to the approval of the government.

Justice H L Gokhale in a concurring opinion in Monnet Ispat and Energy Ltd. v.

Union of India 12 clarified that the principle of promissory estoppel will not apply if

the communication issued was either a proposal or a recommendation. The

learned judge observed:

“289. As we have seen earlier, for invoking the principle of
promissory estoppel there has to be a promise, and on that
basis the party concerned must have acted to its prejudice. In
the instant case it was only a proposal, and it was very much
made clear that it was to be approved by the Central
Government, prior whereto it could not be construed as
containing a promise. Besides, equity cannot be used against
a statutory provision or notification.”

(emphasis supplied)

11
Monnet Ispat & Energy Limited v. Union of India & Ors., (2012) 11 SCC 1.

12

(2012) 11 SCC 1.

20

In State of Jharkhand v. Brahmputra Metallics Ltd., Ranchi13, this court

speaking through of one us (D Y Chandrachud J) elaborated on the doctrine of

legitimate expectation, which is grounded in fairness and reasonableness.

Explaining that there is a legitimate expectation that the actions of the State are

fair and reasonable, it was observed:

“45. …The state must discard the colonial notion that it is a
sovereign handing out doles at its will. Its policies give rise to
legitimate expectations that the state will act according to what it
puts forth in the public realm. In all its actions, the State is bound
to act fairly, in a transparent manner. This is an elementary
requirement of the guarantee against arbitrary state action which
Article 14 of the Constitution adopts.”

(emphasis supplied)

Since the enhancement of the age of superannuation is a ‘public function’

channelised by the provisions of the statute and the service regulations, the

doctrine of promissory estoppel cannot be used to challenge the action of

NOIDA. Though NOIDA sought the approval of the State government for the

enhancement with ‘immediate effect’, it never intended or portrayed to have

intended to give retrospective effect to the prospectively applicable Government

order. The representation of NOIDA could not have given rise to a legitimate

expectation since it was a mere recommendation which was subject to the

approval of the State Government. Hence, the doctrine of legitimate expectation

also finds no application to the facts of the present case.

25 The reliance placed by the respondents on Dayanand Chakrawarthy

(supra) to argue that they were willing to work till they attained the age of sixty

years but were not permitted to, and thus the principle of ‘no work no pay’ would

not be applicable is misplaced. In Dayanand Chakrawarthy, the issue before

13
Civil Appeal No. 3860-62 of 2020.

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the two judge Bench of this court was whether prescription of different ages of

retirement based on the mode of recruitment under the UP Jal Nigam

(Retirement on attaining age of superannuation) Regulations, 2005 was

unconstitutional for violating Article 14 of the Constitution. This court held that the

differential superannuating age was discriminatory. However, by virtue of

Regulation 31 of the UP Jal Nigam Services of Engineers (Public Health Branch)

Regulations, 1978 the service conditions of State government employees is

applicable to the UP Jal Nigam employees. Therefore when the Jal Nigam

through an Office memorandum had resolved that the age of retirement for its

employees shall be fifty eight years, though it was sixty years for State

government employees, it was set aside by this court in Harwinder Kumar v.

Chief Engineer, Karmik 14. In Harwinder Kumar and the subsequent cases (U.P

Jal Nigam v. Jaswant Singh 15 ; U.P Jal Nigam v. Radhey Shyam Gautam 16)

involving the age of retirement of the UP Jal Nigam employees, this court had

held that employees who had approached the courts shall be entitled to full salary

until the age of sixty years. It was in this context that a two judge bench of this

court speaking through Mukhopadhaya J made the following observation in

Dayanand Chakrawarthy:

“48. …We observe that the principle of “no pay no work” is not
applicable to the employees who were guided by specific rules
like Leave Rules, etc. relating to absence from duty. Such
principle can be applied to only those employees who were not
guided by any specific rule relating to absence from duty. If an
employee is prevented by the employer from performing his
duties, the employee cannot be blamed for having not worked,
and the principle of “no pay no work” shall not be applicable to
such employee.”

14
(2005) 13 SCC 300.

15

(2006) 11 SCC 464.

16

(2007) 11 SCC 507.

22
In Dayanand Chakrawarthy the court directed payment of arrears deeming the

employees to have worked till sixty years in spite of no interim order being issued

in that regard because (i) the Office Memorandum was held ultra vires ; (ii)

Harwinder Kumar, Jaswant Singh, and Radhey Shyam Gautam had already

held that the age of retirement of the Jal Nigam employees shall be 60 years

unless a regulation prescribing a lower retirement age is issued in terms of

Regulation 31, and had extended this benefit to all the parties who had filed writ

petitions. Therefore, the above observation must be read in the context of the

distinct factual situation in the case.

26 The argument of the employees that since they had moved the Chief

Minister with a representation in August 2012 before their date of

superannuation which was to fall at the end of the month and that they should

have the benefit of the enhancement in the age of superannuation has no

substance. On 31 August 2012, the respondents moved the High Court but no

interim relief was granted to them and they attained the age of superannuation.

They have not worked in service thereafter. Since the High Court‘s judgment

dismissing the challenge to the government order dated 30 September 2012 has

attained finality, the submission cannot be accepted.

27 For the above reasons, we allow the appeals and set aside the impugned

judgment and order of the Division Bench at Lucknow of the High Court of

Judicature at Allahabad dated 25 January 2018 in WA No 43780 of 2012. The

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Writ Petition shall in consequence stand dismissed. There shall be no order as to

costs.

28 Pending application(s), if any, stands disposed of.

………………………….……………………..J.

[Dr Dhananjaya Y Chandrachud]

…..…..…….………..……………….………..J.

[MR Shah]

New Delhi;

July 15, 2021.

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