State Of U.P. vs Virendra Kumar on 10 February, 2020
Supreme Court of India
State Of U.P. vs Virendra Kumar on 10 February, 2020
Author: Ashok Bhushan
Bench: M Shah, A Bhushan
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION(C)NOS.4802-4803 OF 2019
STATE OF U.P. & ORS. …… PETITIONERS
VERSUS
VIRENDRA KUMAR & ORS. …… RESPONDENTS
WITH
SPECIAL LEAVE PETITION(C)NO.4815 OF 2019
U.P. AVAS EVAM VIKAS PARISHAD & ANR. …… PETITIONERS
VERSUS
VIRENDRA KUMAR & ORS. …… RESPONDENTS
WITH
SPECIAL LEAVE PETITION(C)NO.4804 OF 2019
U.P. AVAS EVAM VIKAS PARISHAD & ANR. …… PETITIONERS
VERSUS
CHANDRA PAL SINGH & ORS. …… RESPONDENTS
WITH
SPECIAL LEAVE PETITION(C)NO.373 OF 2019
U.P. AVAS EVAM VIKAS PARISHAD & ANR. …… PETITIONERS
VERSUS
Signature Not Verified
SHIVASHRAY RAI & ORS.
Digitally signed by
…… RESPONDENTS
MEENAKSHI KOHLI
Date: 2020.02.10
15:40:44 IST
Reason:
WITH
2
SPECIAL LEAVE PETITION(C)NO.386 OF 2019
STATE OF U.P. …… PETITIONERS
VERSUS
SHIVASHRAY RAI & ORS. …… RESPONDENTS
J U D G M E N T
ASHOK BHUSHAN, J.
We have heard Shri Raghvendra Singh, learned
Advocate-General of State of U.P. for State of U.P.
Shri Nikhil Majithia, learned counsel has appeared
for respondent Nos.1 to 4. Shri P.K. Jain, learned
counsel has also appeared for respondents.
2. Learned counsel for the parties have addressed
their submissions only on the question as to whether
judgment of this Court in State of U.P. vs. Preetam
Singh, (2014)15 SCC 774, requires reference to a
larger Bench or not.
3. Before we consider the submissions of respective
parties, it is necessary to notice the subject matter
of the dispute which was decided by this Court in
Preetam Singh’s case (supra). We also need to notice
3
the facts and issues which have arisen in these
Special Leave Petitions.
Preetam Singh’s case
4. The State Legislature passed an Act to provide
for the establishment, incorporation and functioning
of a housing and development board in Uttar Pradesh,
namely, the Uttar Pradesh Avas Evam Vikas Parishad
Adhiniyam, 1965. (hereinafter referred to as the
“1965 Act”). Section 3 provides that the State
Government shall by notification in the Gazette
establish a Board to be called the Uttar Pradesh Avas
Evam Vikas Parishad (hereinafter referred to as “the
Board or Parishad”). The Board was contemplated to be
a body corporate.
5. The Board in the year 1973 has framed Regulations
for providing contributory provident fund to its
employees. On 21.02.1995, the Board proposed a
pension/family pension and gratuity scheme in place
of the contributory provident fund scheme for its
employees. The State Government sent a reply to the
proposal on 16.05.1996 that the State Government has
no objection in implementing the pension/family
4
pension and gratuity scheme for its employees,
however, it will not extend any financial assistance
to the Board for the scheme. The Board on 05.11.1997
framed Regulations under Section 95 of the Act, 1965
for pension/family pension and gratuity for its
employees in place of earlier contributory provident
fund scheme. The State Government vide letter dated
26.11.1997 directed for staying the implementation of
pension scheme. The State vide letter dated
26.11.1997 directed for staying the implementation of
pension scheme.
6. The State issued an order dated 14.04.1999 for
implementation of pension/family pension and gratuity
scheme in place of contributory provident fund scheme
in Board with several conditions enumerated therein.
On 13.09.2005 the State Government again issued an
order intimating the Board that it has been decided
to stay the State Government’s earlier order dated
07.05.2003 which was issued for implementation of the
pension/family pension and gratuity scheme in place
of contributory provident fund scheme in the Board.
Again on 12.07.2007, another order was passed to the
5
effect that there is no need to apply
pension/provident fund scheme to those personnel of
the Public enterprises/Corporations who are covered
by Employees Provident Fund & Miscellaneous
Provisions Act, 1952 of the Central Government and/or
those to whom different Contributory Provident Fund
Schemes are already applicable. The Writ Petition
No.582(S/B) of 2000 (Preetam Singh and others vs.
State of U.P. and others) was filed in the High Court
of Judicature at Allahabad, Lucknow Bench challenging
order dated 14.09.1999, 13.09.2005 and 12.07.2007.
The writ petition was contested by the State of U.P.
The High Court vide its judgment 16.01.2009 allowed
the writ petition by the following order:
“For the foregoing reasons, the writ
petition succeeds and is hereby allowed.
The impugned orders dated 13.09.2005 copy
of which is Annexure – 14 and the order
dated 12.07.2007, copy of which is Annexure
– 18 on the record, are hereby quashed, so
far as they relate to U.P. Evam Avas Vikas
Parishad. A writ in the nature of mandamus
is issued directing the U.P. Avas Evam
Vikas Parishad to implement its
pension/family pension and gratuity scheme
in accordance with its regulations framed
on 05.11.1997.
Under the circumstances, there shall be no
order as to costs.”
6
7. Aggrieved against the judgment dated 16.01.2009
of the High Court the State of U.P. filed an SLP
(C.A.No. 6307 of 2010- State of Uttar Pradesh vs.
Preetam Singh and others). This Court on 07.08.2012
stayed the order of the High Court but ultimately the
civil appeal was dismissed by this Court on
23.09.2014 which judgment is reported in (2014) 15
SCC 774. This Court held that conditions of service
of the employees do not constitute functions of the
Board and as such the State has no jurisdiction to
issue directions dated 13.09.2005 and 12.07.2007
regarding pension/family pension and gratuity scheme.
This Court also noticed the Regulations framed by the
Board under Section 95(1)(f), namely, pension/family
pension and gratuity scheme dated 19.05.2009. This
Court while dismissing the writ petition directed the
Board to release the pensionary benefits to the
retired employees governed by the notification dated
19.05.2009, within three months. It was further held
that in event any of the retired employees is
entitled to financial dues in excess of those already
7
paid under the Contributory Provident Fund Scheme,
the said employee(s) will be paid interest on the
said amount @ 9% p.a.
8. The State of U.P. by order dated 13.05.2015
issued directions to extend the pensionary benefits
to the employees of the Board in compliance of the
judgment of this Court dated 23.09.2014 in Preetam
Singh’s case (supra) under certain conditions
mentioned therein.
Civil Appeal No.4802-4803 of 2019 (State of U.P. &
others vs. Virendra Kumar & others etc.etc.)
9. On the basis of recommendations of the U.P. Pay
Committee 2008, the State Government decided to
implement 6th Pay Commission Report w.e.f. 01.01.2006.
The State Government issued an order No. General-3-
1508/X-2008-308-97 dated 08.12.2008 on the subject:
“The Revision of Pension, Gratuity/Family Pension and
commutation of retired/dead personals with effect
from 01.01.2006 on the basis of the recommendations
of the U.P. Pay Committee 2008.” The Government order
in the last of paragraph 2 directed:
“But the aforesaid orders shall not be
applicable to the judges of the Hon’ble
8High Court, Chairman and Members of the
U.P. Public Service Commission, Teachers
and Staff of added no Government Schools,
Employees of Local bodies and public
enterprises.”
10. Thus, the above Government order excluded the
applicability of the said order to the employees of
local bodies and public enterprises. Another
Government order No.General-3-1515/X-2008-308-97
dated 08.12.2008 was also issued for employees who
had retired prior to 01.01.2006. The said order was
also not made applicable to local bodies and public
enterprises. On 19.05.2009 the Regulation was framed
by the Board, namely, U.P. Avas Evam Vikas Parishad
Employees Pension/Family Pension and Gratuity
Regulation. By the Government order dated 16.10.2009,
the State Government sanctioned revised pay
structure, pay band and grade pay and other
allowances to the employees of different categories
of Public Enterprises/Corporations in accordance with
the decision taken on the recommendations of the
Report as submitted by 7th U.P. Pay Committee 2008.
11. On 14.01.2010, the State Government has issued an
order approving the pay band and grade pay and other
9
allowances in the revised pay structure to the
employees of Board, according to the decision taken
on the recommendations of 7th U.P. Pay Committee 2008
to the employees of Public Sector/Corporations. In
consequences to the Government order dated
14.01.2010, the Housing Commissioner issued the
consequential order dated 23.01.2010. In the
subsequent Government order dated 15.09.2011 it was
clarified that arrears of revised pay for the period
from 01.01.2006 to 13.01.2010 shall not be admissible
to the Board employees. The State Government issued
another letter dated 05.05.2015 regarding pensionary
benefits to the employees of the Board in compliance
of the order dated 23.09.2014 passed by this Court in
Preetam Singh’s case. The Board issued a
consequential order dated 05.05.2015. The Writ
Petition No.12645(S/S) of 2016 (Chandra Pal Singh and
others vs. State of U.P. and others) filed by the
retired Junior Engineers and retired Class I and II
Officers of the Board. Writ Petition No.10355(S/B) of
2017 (Virendra Kumar and others vs. State of U.P. and
others) filed by another set of Officers and
10
employees of the Board. In Writ Petition
No.12645(S/S) of 2016 following prayers have been
made:
“PRAYER
WHEREFORE, it is most respectfully
prayed that this Hon’ble Court may
graciously be pleased: –
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 on the
basis of Sixth Pay
Commission Recommendation w.e.f.
01.01.2006.
ii. to issue a writ, order or direction in
nature of Mandamus commanding the
respondents to apply the provisions of the
Government Order No.1508 dated 08.12.2008
on the officers of the Parishad, while
suitably reading down the restrictive
provisions about its non-application on the
employees of U.P. Awas Evam Vikas Parishad
in view of the Pension Regulations dated
15.05.2009 read with judgment and order of
the Hon’ble Apex Court dated 23.09.2014.
iii. to issue a writ, order or direction in
the nature of Mandamus commanding the
respondents to re-determine/re-fix the
salary of the petitioners in terms of Sixth
Pay Commission Recommendation w.e.f.
01.01.2006 till their retirement and
thereafter re-determine their pensionary
benefits as per revised last pay drawn and
pay arrears of salary and revised
pensionary
11benefits from the date of their retirement
till date, in accordance with G.O. dated
08.12.2008, 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 08.12.2008.
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 lacs,
along with payment of interest at the
prevailing Bank rates, within a period of 2
months.
vi. to issue an ad-interim mandamus to the
respondent authorities to pay the current
pension of the petitioners in terms of
Sixth Pay Commission Recommendation.
vii. to pass such other order of direction,
which this Hon’ble court deems fit and
proper in the circumstances of the case.
viii. to allow the writ petition with costs
in favour of the petitioners.”
12. In Writ Petition (S/B)No. 10355 of 2017 (Virendra
Kumar and others vs. State of U.P. and others)
following prayers have been made:
“PRAYER
12Wherefore, it is most respectfully prayed
that this Hon’ble Court may graciously be
pleased to :
(a) issue a writ of Certiorari or a writ, order
or direction in the nature of Certiorari
quashing the impugned order dated
05.05.2015 passed by the State Govt., and
the consequential order dated 13.05.2015
passed by the Housing Commissioner,
Parishad as contained in Annexure No.1 and
2 to the writ petition.
(b) Issue a writ of mandamus or a writ, order
or direction in the nature of mandamus
commanding the respondents not to give
effect to the impugned order dated
05.05.2015 passed by the State Govt., and
the consequential order dated 13.05.2015
passed by the Housing Commissioner,
parishad as contained in Annexure No.1 and
2 to the writ petition.
(c) issue a writ of mandamus or a writ, order
or direction in the nature of mandamus
commanding the respondents to implement the
Family Pension and gratuity Scheme in
accordance with the notification dated
19.05.2009 issued by the Awas Evam Vikas
Parishad contained in Annexure No.5 to the
writ petition and to give the benefit
thereof to the petitioners in deference to
the judgment and order dated 23.09.2014
passed by the Hon’ble Apex Court in Civil
Appeal no.6307 of 2010.
(d)issue any other appropriate writ, order or
direction which this Hon’ble court may deem
just and necessary in the circumstances of
the case may also be passed; and
(e) allow the writ petition with costs.”
13
13. Both the writ petitions were contested by the
State of U.P. The Division Bench of the High Court
vide its judgment dated 16.03.2018 allowed both the
writ petitions. The Division Bench took the view that
the Government Order No.1058 dated 08.12.2008 would
apply in its entirety to the employees of the
Parishad by virtue of statutory Regulations, dated
19.05.2009. The Division Bench held that the
exclusionary part under the Government Order dated
08.12.2008 insofar as it exempts its applicability
upon the employees of Public Enterprises and local
bodies, would have to be read down and held to be
inapplicable, so far as employees of the public
corporations are concerned. It held that the
employees of the Parishad would have to be treated at
par with the employees of the State Government and
the Government orders issued for the employees of
Government Corporations etc. by bureau of Public
Enterprises would have no applicability. Both the
writ petitions were allowed, operative portion is
14
contained in paragraph 41 which is to the following
effect:
“41. Accordingly, both 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
No.12645(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 U.P. Avas Evam Vikas Parishad
th
Regulations dated 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.”
14. These SLPs have been filed challenging the
Division Bench judgment dated 16.03.2018. Apart from
State of U.P., U.P. Avas Evam Vikas Parishad has also
filed SLP(C)Nos.4804 and 4815 of 2019. Other SLPs,
SLP(C)No.386 of 2019 (State of U.P. and Shivashray
Rai and others) and SLP(C)No.373 of 2019 (U.P. Avas
Evam Vikas Parishad and another vs. Shivashray Rai
15
and others) have been filed against the judgment
dated 26.11.2018 passed by the Division Bench of the
Allahabad High, Lucknow Bench in Special Appeal
No.610 of 2018.
15. Special Appeal No.610 of 2018 was filed by the
State of U.P. challenging the judgment of learned
Single Judge dated 16.08.2017 passed in Writ Petition
No.9033(S/S) of 2016. Writ petition was filed by the
employees of the U.P. Awas Evam Vikas Parishad
seeking 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 on the basis of
6th Pay Commission Recommendations w.e.f. 01.01.2006.
A mandamus was sought to apply the provisions of the
Government Order No.1508 dated 08.12.2008 on the
employers and officers of the Parishad while suitably
reading down the restrictive provisions about its
application on the employees of the Board. The writ
petition was allowed by the learned Single Judge. A
mandamus was issued to the respondents to grant
benefit of arrears of salary payable to the employees
16
of the Board w.e.f. 01.01.2006 to 13.01.2010, and to
fix their pension/family pension, and also release
gratuity in accordance with the provisions of
Regulations dated 19.05.2009. Special Appeal filed
against the said judgment has been dismissed by the
Division Bench on 26.11.2018.
16. The issues raised in these SLPs filed against the
judgment dated 26.11.2018 are almost similar as have
been raised in SLP filed against the Division Bench
judgment dated 16.03.2018.
17. The facts of the Preetam Singh’s case as noticed
above indicate that the main issue which came to be
considered by this Court in Preetam Singh’s case was
as to whether the State Government has any
jurisdiction to issue direction for non-implementing
pension/family pension and gratuity scheme on the
employees of the Board. The High Court in writ
petition of Preetam Singh’s case has set aside the
orders of the State Government. The orders of the
State Government dated 13.09.2005 and 12.07.2007 were
quashed and mandamus was issued directing the Board
to implement its pension/family pension and gratuity
17
scheme in accordance with its Regulations framed on
05.11.1997. This Court in Preetam Singh’s case
dismissed the appeal of the State of U.P. affirming
the judgment of the High Court, the effect of which
judgment is that pension/family pension and gratuity
scheme as framed by the Board is to be implemented.
One of the submissions which was raised in Preetam
Singh’s case on behalf of the State of U.P. is that
State Government had jurisdiction to issue direction
as contained in the Government order dated 13.09.2005
and 12.07.2007 to the Parishad to not to implement
pension/family pension and gratuity scheme which
direction could have been issued under a statutory
provision, namely, Uttar Pradesh State Control Over
Public Corporation Act, 1975. The provision of
Section 2 of the aforesaid Act has been noticed in
paragraph 13 of the judgment in Preetam Singh’s case.
Paragraph 13 of the judgment is as follows:
“13. In raising a challenge to the
impugned judgment rendered by the High
Court on 16-1-20091, it was the vehement
contention of the learned counsel for the
State of Uttar Pradesh, that the scheme
could not have been formulated, and given
effect to in the absence of an express
18approval by the State Government. Insofar
as the instant contention is concerned, the
learned counsel for the appellant placed
reliance on the Uttar Pradesh State Control
Over Public Corporation Act, 1975. Our
pointed attention was invited to Section
2(1) thereof, which is being extracted
hereunder:
“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 (Re-enactment 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 supplied)
Based on the aforesaid provisions, it was
the submission of the learned counsel for
the appellant, that the State of Uttar
Pradesh, through its Communications dated
13-9-2005 and 12-7-2007, must be deemed to
have issued directions to the Vikas
Parishad, restraining it from implementing
the Pension/Family Pension and Gratuity
Scheme. The aforesaid directions, according
to the learned counsel, were binding on the
Vikas Parishad.”
19
18. This Court in Preetam Singh held that it is open
to the State Government to issue directions on
question of policy to all the Public Corporations in
the State of Uttar Pradesh but the directions could
only be issued in respect of questions of policy
having a nexus to the “discharge of its functions”.
This Court held that functions of the Board are
relatable only to the functions stipulated in Section
15 of the 1965 Act. Paragraphs 14 to 16 are as
follows:
“14. We have given our thoughtful
consideration to the first contention
advanced at the hands of the learned
counsel for the appellant. There can be no
doubt that it is open to the State
Government to issue directions on questions
of policy to all the Public Corporations in
the State of Uttar Pradesh, in furtherance
of the mandate contained in Section 2(1) of
the 1975 Act. It would however be pertinent
to mention that the above directions could
be issued only in respect of questions of
policy having a nexus to the “discharge of
its functions”. Insofar as the Vikas
Parishad is concerned, we are of the view
that the functions of the Vikas Parishad
are relatable only to the functions
stipulated in Section 15 of the 1965 Act.
15. Section 15 aforementioned is being
reproduced hereunder:
20
“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 23
of 1955);
21
(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;
(l) to raise loans from the market, to
obtain grants and loans from the State
Government, the Central Government, local
authority 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.
22
(2) Subject to the provisions of this Act
and the rules and regulations, the 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 productions of building
materials and to encourage and organise
the prefabrication and mass reduction of
structural components;
(e) with a view to facilitating the
movement of the population in and around
any city, municipality, 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.”
16. In our view, the State of Uttar
Pradesh, had the right to issue directions
only in respect of the functions assigned
to the Vikas Parishad under Section 15 of
23
the 1965 Act. The conditions of service of
employees, in our considered view, do not
constitute the functions of the Vikas
Parishad, and as such, we are satisfied
that the directions contemplated under
Section 2(1) of the 1975 Act, do not extend
to the directions issued by the State of
Uttar Pradesh in the impugned Orders dated
13-9-2005 and 12-7-2007. We therefore find
no merit in the first contention advanced
by the learned counsel for the appellant.”
19. In paragraph 16 of the judgment as extracted
above this Court held that “the conditions of service
of employees, in our considered view, do not
constitute the functions of the Vikas Parishad”. This
Court also considered Sections 93 and 95 of the 1965
Act. This Court held that the Vikas Parishad is
vested with the right to make regulations, so as to
extend to its employees a scheme in the nature of
pension/family pension and gratuity scheme. Ultimate
directions were issued in paragraph 21 to the
following effect:
“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 16-1-2009. This Court having
entertained the petition filed by the
appellant, passed interim directions on 7-
8-2012, which had the effect of staying the
24implementation of the directions issued by
the High Court, namely, of staying the
implementation of the Notification dated
19-5-2009. As a result, the employees
governed by the Notification dated 19-5-
2009, were paid their retiral dues under
the Contributory Provident Fund Scheme.
Since we have now affirmed the impugned
judgment of the High Court, dated 16-1-
2009, it is apparent that all the eligible
employees of the Vikas Parishad will be
governed by the Notification dated 19-5-
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 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 19-5-2009, 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 interest on the said amount @
9% p.a. The 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.”
20. Learned Advocate-General submitted that the view
as expressed by this Court in paragraph 16 that
25
conditions of service employees do not constitute the
functions of the Vikas Parishad and directions issued
on 13.09.2005 and 12.07.2007 could not have been
issued by the State Government are the views
expressed by this Court without considering the
relevant statutory provisions of 1965 Act. Under
Section 8 of 1965 Act, the Board may appoint officers
and servants of the Board subject to such control and
restrictions as may from time to time be imposed by
the State Government, by special or general orders.
Thus, the appointments are to be made under the
control of the State Government which clearly
indicate that State can issue special or general
orders with regard to appointments which can very
well include conditions of service of the employees
to be appointed. He submits that Section 92 of the
Act occurring in Chapter X provides for control of
State Government on Board and other local authority.
It is further submitted that Section 94(2)(nn)
empowers the State to make rules on any matter for
which regulation may be made by the Board under
Section 95. Thus, the State Government had power to
26
make rules when the Board can make regulation with
regard conditions of service of the officers and
servants of the Board, the power has clearly been
conceded to State Government to make rules with
regard to conditions of service of officers and
servants of the Board. It is submitted that in
Preetam Singh’s case the attention of the Bench is
not invited to Sections 8, 92 and 94(2)(nn) nor the
aforesaid provisions have been considered in the
judgment and had the Court adverted to the aforesaid
provisions it could not have held that conditions of
service of the employees do not constitute the
functions of the Vikas Parishad. He further submits
that Entry 41 of List II of the VIIth Schedule of the
Constitution empowers the State Legislature to frame
law on public services and State has also executive
power on all subjects where it has legislative power,
thus, the State can exercise its executive power with
regard to public services which include service
conditions of the employees.
21. He further submits that functions of the Board as
contemplated under Section 15 are vide enough and
27
there are other functions entrusted to the Board in
the provisions of the Act and when the Board is
empowered to make regulations it is also one of its
functions. It is submitted that the view expressed in
the Preetam Singh’s case in paragraph 16 is per
incuriam as it has been expressed without considering
relevant statutory provisions of Section 1965 Act as
noticed above. It is further submitted that the
direction issued by the State Government would
prevail over Pension Regulations framed by the Board
on 19.05.2009.
22. It is further submitted that the State while
implementing 6th Pay Commission’s Report had
implemented with regard to the employees of Board by
giving actual benefits w.e.f. 21.01.2010. He submits
that the State Government has ample jurisdiction to
issue directions with regard to the service
conditions of the employees, officers of the Board
and contrary view in Preetam Singh’s case needs to be
re-considered.
23. Shri Nikhil Majithia learned counsel appearing
for the respondents submits that the question as to
28
whether the State Government has power to issue
directions to Parishad with regard to the service
conditions of its employees has been correctly
answered by this Court in Preetam Singh’s case. He
submits that there is no error in the judgment of
this Court requiring any reconsideration. It is
submitted that none of the conditions for making
reference to a larger Bench is satisfied in the facts
of the present case. Mere non-consideration of any
statutory provision is no ground to refer the
question to a larger Bench. The central question in
the Preetam Singh’s case was that powers of the State
to issue directions with regard to service conditions
of the employees of the Board which has been
discussed elaborately and answered. Non-
consideration of a limb of argument which could have
been raised before the Court and has not been raised
and decided is not a ground for making reference.
Referring to Section 92 of the Act he submits that
direction under Section 92 shall relate to functions
of the Board as enumerated in Section 15 which does
not include any direction pertaining to conditions of
29
service of officers and servants of the Board. In
Civil
Appeal of Preetam Singh the State in its pleading has
referred to Section 94(2)(nn) of 1965 Act. It is
further submitted that issue of validity and legality
of Government Orders dated 13.09.2005 and 12.07.2007
attained finality by the order of this Court in
Preetam Singh’s case judgment and their validity
cannot be gone into in these proceedings. This Court
is not exercising any review jurisdiction as far as
Preetam Singh’s case judgment is concerned and
therefore the question of determining the validity
and legality of the Government Orders dated
13.09.2005 and 12.07.2007 is not available to this
Court in the present proceedings.
24. Shri P.K. Jain, learned counsel appearing for the
respondents submitted that the State has the right to
issue directions only in respect of the functions
assigned to the Board under Section 15 of the 1965
Act and the conditions of service of the employees do
not constitute the functions of the Vikas Parishad.
He submits that all the respondents have retired long
30
ago but their pensions have not yet been paid causing
great prejudice to them. The State has the right to
issue directions only to the Vikas Parishad under
Section 15 of the 1965 Act. The conditions of service
of the employees do not constitute the functions of
the Vikas Parishad.
25. We have considered the submissions of the parties
and perused the records.
26. This Court in the judgment in Preetam Singh after
considering the provisions of U.P. State Control Over
Public Corporation Act, 1975 and some provisions of
the 1965 Act laid down following:
(1) The conditions of service of the employees
do not constitute the functions of the Vikas
Parishad.
(2) The State Government can issue directions on
question of policy only with regard to the
specified functions as contemplated by
Section 15 of the 1965 Act.
(3) The conditions of the service of employees
not being functions of Board under Section
15 of the Act, the State Government has no
jurisdiction to issue directions regarding
31pension/family pension and gratuity of the
employees of the Parishad.
27. It has been submitted by the learned Advocate-
General that the above proposition does not lay down
the correct law. The Bench hearing Preetam Singh’s
case has not considered other relevant provisions of
the 1965 Act and has fell in error in holding that
the conditions of service of the employees is neither
the function of the Parishad nor the function of the
State Government.
28. In Preetam Singh’s case, this Court has extracted
Section 15 of the 1965 Act and held that the
conditions of the service of the employees is not the
function of the Parishad. We may first consider as to
whether the above view taken in the Preetam Singh’s
case is correct or not.
29. Chapter III of the 1965 Act deals with the
functions and powers of the Board. It is true that
Section 15 does not include conditions of the service
of the employees as one of the functions of the Board
but Section 15(1) begins with words “subject to the
provisions of this Act and the rules and
32
regulations”, thus, functions of the Board as
enumerated in Section 15 are subject to the
provisions of 1965 Act. Thus, functions of the Board
as enumerated in Section 15 are not exhaustive and
have to be read along with functions of the Board as
per other provisions of the Act, rules and
regulations. Section 8 of the Act is an appropriate
illustration for the present purpose. Section 8
provides for appointment of officers and servants.
Section 8 of the Act is as follows:
“8. Appointment of officers and servants.-
(1)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.”
30. Section 8 as extracted above indicates that
appointment of officers and servants is also one of
the functions of the Board. Supposing Board does not
33
appoint any officer and servant can it carry out
functions as entrusted by the Act on it, answer is
obviously no. Thus, appointment of officers and
servants is one of the functions of the Board and
when power of appointment is given, power of laying
down the conditions of service is implicit in it. In
case where there are no rules or regulations for
laying down terms and conditions of officers and
employees of the Board, the Board can regulate the
terms and conditions even by the executive orders. In
Preetam Singh’s case attention of this Court was not
drawn on the expression “subject to the provisions of
the Act, rules and regulations” which was expression
of extreme importance and clearly intended to amplify
and add other functions to the Board as provided in
the Act, rules and regulations. Provisions of Section
8(2) of 1965 Act indicates that the Board with the
previous approval of the State Government appoint a
servant of the Central or the State Government or of
a local authority or any of the posts under it on
such terms and conditions as may be agreed upon.
34
31. Thus, in case of appointment under Section 8(2)
terms and conditions of appointment has to be laid
down although with the agreement as agreed upon.
Section 8(2) is clearly indicative that terms and
conditions of the appointment are not alien to the
functions of the Board. Section 95(1) which empowers
the Board to frame regulations is as follows:
“Power to make regulations.- (1) The
Board may, by notification in the Gazette,
make regulations providing for –
(a)………………………
………………………
(f) the conditions of service of officers and
servants of the Board;
(g)……………………
……………………”
32. As noted above Section 15(1) begins with the
words “subject to the provisions of this Act and the
rules and regulations”, thus, when Section 95(1)(f)
provides making regulations by the Board for
providing the conditions of officers and servants of
the Board, making regulations on the above subject is
also a function of the Board. Section 95, thus, has
35
to be read in functions of the Board as contemplated
by Section 15. The function contemplated by
regulations has also to be added which is simple and
plain meaning of the provision. The Bench deciding
Preetam Sigh’s case did not refer to Section 8,
Section 95(1)(f) and without adverting to the
relevant provisions which clearly indicate that
conditions of service of the employees is also a
function of the Board, the Bench deciding Preetam
Singh’s case fell in error in holding that conditions
of service do not constitute functions of the Board
which opinion is not as per the provisions of the
1965 Act. Thus, the above opinion expressed by the
Bench in Preetam Singh’s case is without referring to
Section 8, Section 95(1)(f).
33. We may also refer to Section 92 which deals with
control of the State Government over the Board and
other local authorities. Section 92(2) is relevant
for the present case. Section 92 of the Act has also
not been referred. It was contended before us that
the directions of the State Government pertaining to
service conditions of employees are not contemplated
36
by Section 92(2). Section 92(2) has its operation for
carrying out the purpose of this Act. The words
“purpose of this Act” are vide enough which encompass
in itself the appointment of officers and staff of
the Board. Hence, the State Government can as well
issue directions under Section 95(2) regarding
appointment of officers and servants. Section 92 has
also not been considered in Preetam Singh’s case.
34. In view of the above, we are of the considered
opinion that the Bench in Preetam Singh’s judgment in
laying down that conditions of service of the
employees do not constitute the functions of the
Vikas Parishad erred, it having not considered other
provisions of Sections 8, 92, 95(1)(f) and the
expression subject to the provisions of this Act,
rules and regulations as occurring in Section 15(1).
35. In event the functions of the Board includes
conditions of the service of the employees of the
Board the State Government shall have jurisdiction
under 1975 Act as well under 1965 Act to issue
directions to the Board with regard to appointment of
officers and servants of the Board, the control and
37
restrictions by the State Government are expressly
provided in Section 8(1) when the appointment of
officers and servants by the Board is expressly
subject to control and restrictions as may from time
to time be imposed by the State Government, it cannot
be said that the State Government had no jurisdiction
to issue directions regarding service conditions of
the employees. The State Government has been given
express rule making power with regard to all subject
where regulations may be made by the Board under
Section 95. Section 94(1) and (2)(nn) provides as
follows:
“94.Power to make Rules.- (1) The State
Government may, by notification in
the Gazette, make rules for carrying out
the purposes of this Act.
(2) In particular and without prejudice
to the generality of the foregoing power,
such rules may provide for –
(a)…………
…………
(nn) any matter for which regulation
may be made by the Board under Section 95;
…………………”
36. As noted above, the Board has power to frame
regulations regarding conditions of service of
officers and servants of the Board, the State
38Government shall have power to make rules on the
above subject. Further, by virtue of Section 95(2)
rules by the State has overriding effect. Section
95(2) is as follows:
“Section 95(2) If any regulation is
repugnant to any rule than the rule whether
made before or after the regulation shall
prevail and the regulation shall to the
extent of the repugnancy be void.”
37. The above section is also indicative that there
is no lack of jurisdiction in the State regarding
service conditions of the officers and the servants
of the Board. The State Legislature have
legislative competence under Entry 41 List 5 of the
VIIth Schedule of the Constitution, it has also the
executive power to issue orders by virtue of Article
162 of the Constitution. The State, thus, can
exercise its jurisdiction under Article 162 to issue
executive orders regulating the conditions of service
of the officers and servants employed in the affairs
of the State.
38. A Constitution Bench of this Court in Rai Sahib
Ram Jawaya Kapur and others vs. The State of Punjab,
AIR 1955 SC 549, had occasion to examine Article 162
39
of the Constitution. Following was laid down in
paragraph 7:
“(7)………Article 162, with which we are
directly concerned in this case, lays
down :
“Subject to the provisions of this
Constitution, the executive power of a
State shall extend to the matters with
respect to which the Legislature of the
State has power to make laws :
Provided that in any matter with
respect to which the Legislature of a
State and Parliament have power to make
laws, the executive power of the State
shall be subject to, and limited by, the
executive power expressly conferred by
this Constitution or by any law made by
Parliament upon the Union or authorities
thereof.”
Thus under this article the executive
authority of the State is executive in
respect to matters enumerated in List II of
Seventh Schedule………”
39. The Constitution Bench further held that
executive function comprises both the determination
of the policy as well as carrying it into execution.
In paragraph 13 the Constitution Bench laid down:
“(13) The limits within which the executive
Government can function under the Indian
Constitution can be ascertained without
much difficulty by reference to the form of
40the executive which our Constitution has
set up.
Our Constitution, though federal in its
structure, is modelled on the British
Parliamentary system where the executive is
deemed to have the primary responsibility
for the formulation of governmental policy
and its transmission into law though the
condition precedent to the exercise of this
responsibility is its retaining the
confidence of the legislative branch of the
State.
The executive function comprises both
the determination of the policy as well as
carrying it into execution. This evidently
includes the initiation of legislation, the
maintenance of order, the promotion of
social and economic welfare, the direction
of foreign policy, in fact the carrying on
or supervision of the general
administration of the State.”
40. This Court in A.B. Krishna and others vs. State
of Karnataka and others, (1998) 3 SCC 495, had laid
down that it is the primarily the legislature,
namely, Parliament or the State Legislature Assembly,
in whom power to make law regulating the recruitment
and conditions of service of persons appointed to
public services and posts, in connection with the
affairs of the Union or the State, is vested.
41. When the power to make law regulating the
recruitment and conditions of service of persons is
vested in the State Legislature it has ample
41
jurisdiction to exercise executive power by issuing
orders under Article 162.
42. The regulations dated 19.05.2005 regarding
pension/family pension and gratuity scheme which have
been relied in the Preetam Singh’s case itself
contemplates that pension/family pension and gratuity
scheme as admissible to officers and servants of the
Government shall also apply to Board. The regulations
clearly mention that the Government orders shall also
be admissible to the officers and employees of the
Board and at serial No.5 following was included “all
orders of financial department of U.P. as relief to
pension/family pension and gratuity”. When the
Regulations 2009 itself contemplates issuance of
Government order regulating pension/family pension
and gratuity which was to be made applicable to the
officers and servants of the Board, it does not
appeal to reason that the State Government has no
power to issue orders pertaining to pension/family
pension and gratuity.
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:
(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 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
expression “subject to the provisions of this Act
and the Rules and Regulations” shall also be
functions of the Board which induces service
43
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 ?
44. Let the papers of these cases be placed before
the Hon’ble the Chief Justice for constituting a
larger Bench. We also request the Hon’ble Chief
Justice to constitute the larger Bench on an earlier
date looking into the fact that issues which are to
be answered in the present SLPs are the issues
pertaining to mostly retired employees whose payment
of arrears of pension/family pension and gratuity are
involved.
………………….J.
( ASHOK BHUSHAN )
………………….J.
( M.R. SHAH )
New Delhi,
February 10, 2020.