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Supreme Court of India

HARWINDRA KUMARversusCHIEF ENGINEER, KARMIK AND ORS.

Citation
2005 INSC 575
Decided
18 November 2005
Disposal
Appeal(s) allowed

Holding

The amendment to Rule 56(a) raising the superannuation age to 60 years applies to Uttar Pradesh Jal Nigam employees unless Regulation 31 is amended, so the employees are entitled to retire at 60.

Summary

The petitioners, former employees of the Uttar Pradesh Local Self‑Government Engineering Department who became employees of Uttar Pradesh Jal Nigam under the 1975 Water Supply and Sewerage Act, challenged the Nigam’s order that they retire at 58 years despite a 2002 amendment to Rule 56(a) of the Uttar Pradesh Fundamental Rules raising the superannuation age to 60. The Court examined Section 37 of the Act and Regulation 31 of the Jal Nigam Engineers (Public Health Branch) Service Regulations, which state that the service conditions of Nigam employees are governed by the same rules, regulations and orders applicable to other state government servants unless the Nigam amends its own regulations. Since Regulation 31 was not amended, the Court held that the amendment to Rule 56(a) automatically applies to Nigam employees, and the Nigam could not rely on a policy direction under Section 89 or an administrative decision under Section 15 to exclude them. Consequently, the orders forcing retirement at 58 were set aside and the petitioners were entitled to salary up to the age of 60. The Court also clarified that the Nigam may amend Regulation 31, with State Government approval, to alter the superannuation age prospectively.

Issues considered

  • Whether the amendment to Rule 56(a) of the Uttar Pradesh Fundamental Rules, increasing the superannuation age from 58 to 60 years, is applicable to employees of Uttar Pradesh Jal Nigam.
  • Whether Regulation 31 of the Uttar Pradesh Jal Nigam Engineers (Public Health Branch) Service Regulations binds the Nigam to follow such amendments without a separate amendment to the regulation.
  • Whether the State Government can issue a direction under Section 89 of the Uttar Pradesh Water Supply and Sewerage Act to exclude the Nigam from the amendment, or the Nigam can take an administrative decision under Section 15 to that effect.

Legislation cited

Subjects

service lawsuperannuationage of retirementstatutory corporationregulation applicabilitypublic sector undertakingemployee rights

Judgment

                      HARWINDRA KUMAR                                        A
                              v.
               CHIEF ENGINEER, KARMIK AND ORS.

                        NOVEMBER 18, 2005

          [Y.K. SABHARWAL, CJ. AND B.N. AGRAWAL, J.]                         B


     Service Law:

      Uttar Pradesh Water Supply and Sewerage Act, 1975-Sections 37 and
97-Uttar Pradesh Fundamental Rules-Rule 56(a)(as amended by Uttar C
Padesh Fundamental (Amendment) Rules, 2002)-Uttar Pradesh Jal Niga'!'
Engineers (Public Health Branch) Service Regulations-Regulation 31-
Superannuation age-Enhancement by the Rule-For employees of State
Government-Applicability ofto the employees ofJal Nigam-By the provisions
of the Act and Regulations, service conditions of the employees of the State D
Government made applicable to the employees of the Nigam-Held: In view
of the provisions of the Act and the Regulations, enhancement in the age of
superannuation would be applicable to the employees of the Nigam, so long
the Regulation is not amended altering the service conditions of the employees
of the Nigam.
                                                                             E
      Appellants/writ petitioners were employees in Local Self Government
Department of the Government of Uttar Pradesh. By Uttar Pradesh Water
Supply and Sewerage Act, 1975, Jal Nigam was constituted. Under Section
37 of the Act, the employees of the Local Self Government Department of
the State Government became employees of the Nigam. Their service
conditions were to be the same as applicable to the employees of the State   F
Government under the Rules, Regulations and Orders applicable to therq
so long the same were not altered by the Nigam. By virtue of powers
conferred u/s 97 of the Act, Uttar Pradesh Jal Nigam Engineers (Public
Health Branch) Service Regulations, 1978 were framed. Regulation 31
thereof also provided that service conditions of the employees would b~      G
governed by the Rules, Regulations and Orders applicable to employees
of State Government. Rule 56(a) of Uttar Pradesh Fundamental Rule~
were amended by Uttar Pradesh Fundamental (Amendment) Rules, 2002
enhancing the age of superannuation from 58 years to 60 years.

                                   317                                       H
    318                    SUPREME COURT REPORTS (2005) SUPP. 5 S.C.R.

A Enhancement of the age of superannuation was not made applicable to
    the employees of the Nigam. Appellants filed Writ Petition, challenging
    the order not making the amendment applicable to them and the same
    was dismissed by High Court. Hence the present appeals. Writ Petitions
    were also filed in this Court challenging the same.

B        The question for consideration in this case was whether amendment
    made in Rule 56(a) of Uttar Pradesh Fundamental Rules enhancing age
    of superannuation from 58 years to 60 years would be applicable to the
    employees of Uttar Pradesh Jal Nigam.

          Allowing the appeals and the petitions, the Court
c
        HELD: 1. From a bare reading of Section 37 of Uttar Pradesh Water
  supply and Sewarage Act, 1975 and Regulation 31 of Uttar Pradesh Jal
   Nigam Engineers (Public Health Branch) Service Regulations, it would be
  clear that the service conditions of the employees of the Nigam would be
D the same as are applicable to the employees of the State Government under
   the Rules, Regulations and Orders applicable to such government servants
  so long the same are not altered by the Nigam in accordance with the
   provisions of the Act. If Regulations would not have been framed, the
   Nigam had residuary power under Section 15(1) of the Act whereby under
   general power it could change the service conditions and the same could
E remain operative so long regulattons were not framed but in the present
  case, regulations were already framed in the year 1978 specifically
   providing in Regulation 31 that the conditions of service of the employees
  of the Nigam shall be governed by the Rules, Regulations and Orders
  governing the conditions of service of Government servants which would
F not only mean then in existence but any amendment made therein, as
  neither in ,.Section 37 nor in Regulation 31, it has been mentioned that the
  Rules then in existence shall only apply. After the amendment made in
  Rule 56(a) of Uttar Pradesh Fundamental Rules by the State Government
  and thereby enhancing the age of superannuation of Government servants
  from 58 years to 60 years, the same would equally apply to the employees
G of the Nigam and in case the State Government as well as the Nigam
  intended that the same would not be applicable, the only option with it
  was to make suitable amendment in Regulation 31 of the Regulations after
  taking previous approval of the State Government and by simply issuing
  direction by the State Government purporting to act under Section 89 of
H the Act and thereupon taking administrative decision by the Nigam under
                       HARWINDRA KUMAR v. CHIEF ENGINEER, KARMJK             319
-(     Section 15 of the Act in relation to age of the employees would not           A
       tantamount to amending Regulation 31 of the Regulations.
-.                                              (325-G, H; 326-A, B, C, DE)

            V. T. Khanzode and Ors. v. Reserve Bank of India and Anr., AIR (1982)
       SC 917, relied on.
                                                                                     B
             2. In the present case, as Regulations hav~ been framed by the Nigam
       specifically enumerating in Regulation 31 thereof that the Rules governing
       the service conditions of Government servants shall equally apply to the
"",.
       employees of the Nigam, it was not possible for the Nigam to take an
       administrative decision acting under Section 15(1) of the Act pursuant to     c
       direction of the State Government in th~ matter of policy issued under
       Section 89 of the Act and· directing that the enhanced age of
       superannuation of 60 years applicable to the Government servants shall
       not apply to the employees of the Nigam. The only option for the Nigam
1      was to make suitable amendment in Regulation 31 with the previous
       approval of the State Government providing thereunder age of                  D
       superannuation of its employees to be 58 years, in case, it intended that
       60 years which was the enhanced age of superannuation of the State
       Government employees should not be made applicable to employees of the
       Nigam. It was also not possible for the State Government to give a


-      direction purporting to Act under Section 89 of the Act to the effect that
       the enhanced age of 60 years would not be applicable to the employees of
       the Nigam treating the same to be a matter of policy nor it was permissible
       for the Nigam on the basis of such a direction of the State Government in
                                                                                     E



       policy matter of the Nigam to take an administrative decision acting under
       Section 15(1) of the Act as the same would be inconsistent with Regulation
       31 which was framed by the Nigam in the exercise of powers conferred
                                                                                     F
       upon it under Section 97(2)(c) of the Act. (327-B, C, D, E, F]

             3. So long Regulation 31 of the Regulations is not amended, 60 years
       which is the age o{ superannuation of government servants employed
       under the State of Uttar Pradesh shall be applicable to the empoyees of       G
       the Nigam. However, it would be open to the Nigam with the previous
       approval of the State Government to make suitable amendment in
       Regulation 31 and alter service conditions of employees of the Nigam,
---'   including their age of superannuation. (327-GJ

            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7840 of2002.              H
    320                     SUPREME COURT REPORTS [2005]. SUPP. 5 S.C.R.

A        From the Judgment and Order dated 20.3.2002 of the Allahabad High
    Court in C.M.W.P. No. 3449 of 2002.                                    ,•
         W.P.(C) Nos. 377, 435, 441, 576 and 681 of 2002, C.A. Nos. 7841,
    7842, 7843, 7844, 7845, 7846, 7847, 7848, 7849, 7855, 7857 and 7858 of
B   2002, C.A. No. 6268 of 2003 and C.A. No. 6906 of 2005.

          Ms. Rachna Gupta, Dr. Indra Pratap Singh, A.S. Pundir, P.K. Jain,
    Shrish Kumar Misra and Jitendra Mohan Sharma for the Appellants/Petitioners.

         Rakesh Dwivedi, Vishwajit Singh, Abhishek Chowdhary, Gaurav Bhatia,
C   Gaurav Dhama, Gaurav Liberhan, Adarsh Upadhyay, Saad Sherwani and
    Piyush Kumar for the Respondents.

          The Judgment of the Court was delivered by

          B.N. AGRAWAL, J. Leave granted.
D        Question that arises in these batch of cases is as to whether amendment
    made in Rule 56(a) ofUttar Pradesh Fundamental Rules (in short 'the Rules')
    by Notification dated June 27, 2002 enhancing age of superannuation of
    government servants from 58 years to 60·years would be applicable to the
    employees ofUttar Pradesh Jal Nigam (hereinafter referred to as 'the Nigam').
E
           Appellants .of these appeals as well as petitioners in the Writ Petitions
    were employed in the Local Self Government Engineering Department of the
    Government of Uttar Pradesh. In the year 1975, the State Legislature
     promulgated an Act, viz., Uttar Pradesh Water Supply & Sewerage Act, 1975
    (hereinafter referred to as 'the Act'), under Section 3 whereof, the State
F   Government was empowered to issue notification to constitute a corporation
     by the name of the Uttar Pradesh Jal Nigam pursuant to which a notification
     was issued establishing the same with effect from 18th June, 1975. From the
    date of the establishment of the Nigam; which is the appointed date as
    enumerated in Section 31 of the Act, all properties and assets which
G   immediately before the appointed date were vested in the State Government
    for the purposes of Local Self Government Engineering Department shall
    vest in and stand transferred to the Nigam and. all rights, liabilities and
    obligations of the State Government pertaining to the said Department shall
    be the rights, liabilities and obligations of the Nigam. Under Section 37 of
H   the Act, every person who was employed in the Local Self Government
         HARWINDRA KUMAR v. CHIEF ENGINEER, KARMIK[B.N. AGRAWAL, J.]       321

Engineering Department of the State of Uttar Pradesh shall on and from the A
appointed date, i.e., 18th June, 1975 would become employee of the Nigam
and shall hold his office or service therein by the same tenure, at the same
remuneration and upon same other terms and conditions and with the same
rights and privileges as to pension, gratuity and other matters as he would
have held the same on the appointed date if this Act had not come into force
and shall continue to do so until his remuneration or other terms and conditions B
of service are revised or altered by the Nigam under or in pursuance of any
law or in accordance with any provision which for the time being governed
his service. Before the appointed date, i.e., 18th June, 1975, the age of
superannuation of these employees under Rule 56(a) of the Rules was 58
years which could be extended in exceptional circumstances up to the age of C
60 years. Thereafter, the State Government issued order to the Nigam under
its letter dated October 31, 1975 wherein it was clearly stated that in accordance
with Section 37 of the Act the service conditions of such employees of the
Nigam would continue to remain the same so long the same are not altered
by the Nigam in accordance with law. Thereupon, Nigam took a decision on
4th April, 1977 in conformity with the provisions of Section 37 of the Act D
wherein specifically it was mentioned that the rights and responsibilities as
were enjoyed by the officers of the then Local Self Government Engineering
Department under the Financial Hand Book, PWD Manuals, Manual of
Government Orders, Civil Services Regulations, Government Conduct Rules
and other Manuals of Government Orders that have been passed or shall be E
passed by the Government from time to time shall be deemed to be applicable
to the officers of the Nigam provided any other order in this regard is not
passed by the Nigam.

       Section 97(2)(c) confers power upon the Nigam to make regulations
with the previous approval of the State Government on matters, inter alia, the    F
salaries and allowances and other conditions of service of employees of the
Nigam. In exercise of the aforesaid powers under Section 97 of the Act,
regulations were framed by the Nigam on 1st September, 1978 as Uttar Pradesh
Jal Nigam Engineers (Public Health Branch) Service Regulations, 1978
(hereinafter referred to as 'the Regulations') which came into force with
immediate effect and Regulation 31 thereof laid down that the pay, allowances,    G
pension, leave, imposition of penalty and other terms and conditions of service
of the employees of the Nigam shall be governed by such rules, regulations
and orders which are equally applicable to other serving government servants
functioning in the State. On 17th July, 1985, the State Government issued a
general order under its Memo No. 665/44-1/85 directing thereunder that the        H
    322                      SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.

A public sector undertakings should not give the benefit of extension of age as·
    provided to the government servants under Rule 56(a) of the Rules without
    the permission of the State Government. On 28th November, 200 I, the State
    Government issued a notification notifying thereunder approval of the
    Governor for increasing the age of superannuation of government servants
    from 58 years to 60 years in public interest and steps were required to be
B   taken for making suitable amendment in Rule 56(a) of the Rules, pursuant to
    which Rules were amended by Uttar Pradesh Fundamental (Amendment)
    Rules, 2002 by notification dated 27th June, 2002 which came into force
    with effect from 28th November, 2001 and thereunder the age of retirement
    of government servants was enhanced from 58 years to 60 years. In the
C   meantime, after the issuance of notification dated 28th November, 2001, on
    behalf of Nigam a letter was writt.en to the State Government on 31st
    December, 2001 making inquiry thereunder as to whether enhancement in
    the' age of superannuation from 58 years to 60 years would be applicable to
    the employees ofNigam and in reply thereto, on 22nd January, 2002, Special
    Secretary to the Government in the Department of Local Self Government
D   communicated that the employees of the Nigam shall not be entitled to
    enhancement of superannuation age from 58 years to 60 years as the same
    would be applicable only to the government servants. On receipt of the said
    order, the Nigam resolved on 11th July, 2002 that enhancement in the age of
    superannuation from 58 years to 60 years would not be applicable to the
E   employees of the Nigam. Thereupon orders were issued to the appellants in
    the Civil Appeals as well as petitioners in the Writ Petitions to the effect that
    they would retire upon completing the age of 58 years.

          The appellants of these Civil Appeals challenged the orders by filing
    separate writ applications before the High Court which have been dismissed
F   on the ground that 60 years which is enhanced age of superannuation would
    not apply to the employees of the Nigam but the same would apply only to
    the government servants which gave rise to the present appeals by special
    leave. In the meantime, the writ petitioners instead of moving the High Court
    have directly filed writ petitions before this Court challenging the orders
G   issued by the Nigam against them to the effect that they would superannuate
    upon completion of the age of 58 years.

        · Learned counsel in support of the appeals as well as writ petitions
    submitted that in view of the provisions of Section 37 of the Act and Regulation
    31 of the Regulations framed under Section 97(2)(c) thereof, the age of
H   superannuation of the government servants, as amended from time to time,
              HARWINDRA KUMAR v. CHIEF ENGINEER, KARMIK [B.N.AGRAWAL, J.]        323

     would apply to the employees of the Nigam as the same has not been altered         A ··
     by the Nigam by making amendment in Regulation 31 of the Regulations. On
     the other hand, learned counsel appearing on behalf of the Nigam submitted
,-
     that 60 years which is the enhanced age of superannuation of the government
     servants would not be applicable to the employees of the Nigam.

           To appreciate the point in issue, it would be necessary to refer to the      B
     relevant provisions of Sections 15, 31(1), 37, 89 and 97 of the Act and
     Regulation 31 of the Regulations which read thus:-

            "15. Powers of the Jal Nigam.-(1) The Nigam shall, subject to the
            provisions of this Act- have power to do anything which may be
            necessary or expedient for carrying out its functions under this Act.       C
            (2) Without prejudice to the generality of the foregoing provision,
            such power shall include the power -

            (i)   to inspect all water supply and sewerage facilities in the State by
                  whomsoever they are operated;                                         D
            (ii) to obtain such periodic or specific information from any local
                 body and operating'agency as it may deem necessary;
            (iii) to provide training for its own personnel as well as employees of
                  the local bodies;
                                                                                        E
            (iv) to prepare and carry out schemes for water supply and sewerage;
            (v) to lay down the schedule of fees for all services rendered by the
                Nigam to the State Government, local bodies, institutions or
                individuals;

            (vi) to enter into contract or agreement with any person, firm or           F
                 institution, as the Nigam may deem necessary, for performing its
                 functions under this Act;

            (vii) to adopt its own budget annually;

            (viii)to approve tariffs for water supply and sewerage services             G
                  applicable to respective local areas comprised within the
                  jurisdiction of Jal Sansthans and such local bodies as have entered
                   into an agreement with the Nigam under Section 46;
            (ix) to borrow money, issue debentures to obtain subventions and
                 grants and manage its own funds;
                                                                                        H
    324                    SUPREME COURT REPORTS (2005] SUPP. 5 S.C.R.

A         (x) to disburse loans to local bodies for their water supply and
              sewerage schemes;
          (xi) to incur expenditure and to grant loans and advances to such
               persons or authorities as the Nigam may deem necessary for
               performing the functions under this Act.
B         31. Vesting and transfer of property to Nigam.-{l) As from June,
          18, 1975, the date of establishment of the Nigam hereinafter in this
          Chapter referred to as "the appointed date", -

          (a) all properties and assets (including waterworks, buildings,
              laboratories, stores, vehicles, furnitures and other furnishing)
c             which immediately before the appointed date were vested in the
              State Government for the purposes of the Local Self Government
              Engineering Department shall vest in and stand transferred to the
              Nigam; and
          (b) all the rights, liabilities and obligations of the State Government
D              whether arising out of any contract or otherwise pertaining to th~
               said departments shall be the rights, liabilities and obligations of
             , the''Nigam.

          37. Transfer ofemployees to Nigam.-(1) Save as otherwise provided
          in this section every person, who was employed in the Local Self
E         Government Engineering Department of the State Government shall
          on and from the appointed date become employee of the Nigam and
          shall hold his office or service therein by the same tenure, at the same
          remuneration and upon same other terms and conditions, and with the
          same rights and privileges as to pension, gratuity and other matters
F         as he would have held the same on the appointed date if this Act has
          not come into force, and shall continue to do so until his employment
          in the Nigam is terminated or until his remuneration or other terms
          and conditions of services are revised or altered by the Nigam under
          or in pursu.ance of any law or in accordance with any provision
          which for the time being governs his service.
G
          89. Directions to the Nigam on questions of policy.-(1) In the
          discharge of its functions, the Nigam shall be guided by such directions
          on questions of policy as may be given to it by the State Government.

              (2) If any question arises whether any matter is or is not a matter
H         as respects which the State Government may issue a direction under
        HARWINDRA KUMAR v. CHIEF ENGINEER, KARMIK [B.N.AGRAWAL, J.]      325
        sub-section (1), the decision of the State Government shall be final.   A
       97. Regulations.-{1) The Nigam and a Jal Sansthan may, with the
       previous approval of the State Government, make regulations, not
       inconsistent with this Act and the rules made thereunder, for the
       administration of the affairs of the Nigam or a Jal Sansthan.
                                                                                B
           (2) In particular, and without prejudice to the· generality of the
       foregoing power, such regulations may provide for all or any of the
       following matters, namely

       (a) xxxxxxx xxxxxxxxxx xxxxxxxx xxxxxx
       (b) xxxxxxx xxxxxxxxxx xxxxxxxx xxxxxx                                   c
       (c) the salaries and allowances and Qther conditions of service of
           employees of the Nigam or a Jal Sansthan other than employees
           employed on contract basis.

       Regulation 3 /-Besides the provt~on made under these regulations,        D
       the pay and allowances, pensio_n, leave, imposition of penalty and
       other terms and conditions of service shall be governed by such rules,
       regulations and orders which are equally applicable to other serving
       government -servants concerned functioning in the State."

      From the aforesaid provisions, it would be clear that the appointed date E
for the purposes of the Act was 18th June, 1975 when the Nigam was
established and under Section 37 of the Act, conditions of service of the
appellants/petitioners who were employed in the Local Self Engineering
Department of the Government of Uttar Pradesh before the appointed date,
were continued to remain the same as they were before the appointed date
unless and until the same are altered by the Nigam under the provisions of, F
the Act. Section 97 confers power upon the Nigam with the previous approval
of the State Government to frame Regulations in relation to service conditions
of employees of the Nigam and acting thereunder, Regulations were framed
by the Nigam in the year 1978, Regulation·31 whereof provides that _service
conditions of the employees of the Nigam shall be governed by such rules, G
regulations and orders which are applicable to other serving government
servants functionjng in the State of Uttar Pradesh. Thus, from a bare reading
of Section 37 and Regulation 31, it would be clear that the service conditions
of the employees of the Nigam would be the same as are applicable to the
employees of the State Government under the Rules, Regulations and Orders
applicable to such government servants so long the same are not altered by      H
    326                      SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A   the Nigam in accordance with the provisions of the Act. If Regulations would
    not have been framed, the Nigam had residuary power under Section 15(1)
    of the Act whereby under general power it could change the service conditions
    and the same could remain operative so long regulations were not framed but
    in the present case, regulations -were already framed in the year 1978
B   specifically providing in Regulation 31 that the conditions of service of the
    employees of the Nigam shall be governed by the Rules, Regulations and
    Orders governing the conditions of service of government servants which
    would not only mean then in existence but any amendment made therein as
    neither in Section 37 nor in Regulation 31, it has been mentioned that the
    Rules then in ~xistence shall only apply. After the amendment made in Rule
C   56(a) of the Rules by the State Government and thereby enhancing the age
    of superannuation of government servants from 58 years to 60 years, the
    same would equally apply to the employees of the Nigam and in case the
    State Government as well as the Nigam intended that the same Would not be: · ·
    applicable, the_ '1nly option with it was to make suitable amendment in
    Regulation 31 6'rfhe Regulations a~er <taking previous approval of the State
D   Government and :by ~iitipiy' i'ssui~~ ~lrection by the State Government
    purporting to act under Section 89 of the Act and thereupon taking
    administrative decision by the Nigam under Section 15 of the Act in relation
    to age of the employees would not tantamount to amending Regulation 31 of
    the Regulations.
E
           Reference in this connection may be made to a decision of this Court
    in the case of VT Khanzode and Ors. v. Reserve Bank of India and Anr.,
    AIR (1982) SUPREME COURT 917. In that case, under Section 58(1) of the
    Reserve Bank of India Act, powers were conferred upon the Central Board
    of Directors of the Bank to make regulations in order to provide for all
F   matters for which provision was necessary or convenient for the purpose of
    giving effect to the provisions of the Act which section in the opinion of their
    Lordships included the power to frame regulation in relation to service
    conditions of the bank staff. In that case, instead of framing regulations, the
    bank issued administrative circulars in relation to service conditions of the
G   staff acting under Section 7(2) of the _Reserve Bank of India Act which was
    a general power conferred upon the bank like Section 15(1) of the present
    Act. It was laid down that "there is no doubt that a statutory corporation can
    do only such acts as are authorized by the statute creating it and that, the
    powers of such a corporation cannot extend beyond what the statute provides
    expressly or by necessary implication." It was further laid down that "so long
H   as staff regulations are not framed under Section 58(1), it is open to the
         HARWINDRA KUMAR v. CHIEF ENGINEER, KARMIK [BN. AGRAWAL, J.]        327

Central Board to issue administrative circulars regulating the service conditions   A
of the staff, in the exercise of power conferred by Section 7(2) of the Act."
As in the said case, no regulation was at all framed under Section 58 of the
Reserve Bank of India Act, as such, the administrative circulars issued by the
Central Board of Directors of the Bank under Section 7(2) of the Reserve
Bank of India Act in relation to service conditions were held to be in              B
consonance with law and not invalid.

       In the present case, as Regulations have been framed by the Nigam
specifically enumerating in Regulation 31 thereof that the Rules governing
the service conditions of government servants shall equally apply to the
employees of the Nigam, it was not possible for the Nigam to take an                C
administrative decision acting under Section 15(1) of the Act pursuant to
direction of the State Government in the matter of policy issued under Section
89 of the Act and directing that the enhanced age of superannuation of 60
years applicable to the government servants shall not apply to the employees
of the Nigam. In our view, the only option for the Nigam was to make
suitable amendment in Regulation 31 with the previous approval of the State         D
Government providing thereunder age of superannuation of its employees to
be 58 years, in case, it intended that 60 years which was the enhanced age
of superannuation of the State Government employees should not be made
applicable to employees of the Nigam. It was also not possible for the State
Government to give a direction purporting to Act under Section 89 of the Act        E
to the effect that the enhanced age of 60 years would not be applicable to the
employees of the Nigam treating the same to be a matter of policy nor it was
permissible for the Nigam on the basis of such a direction of the State
Government in policy matter of the Nigam to take an administrative decision
acting under Section 15(1) of the Act as the same would be inconsistent with
Regulation 31 which was framed by the Nigam in the exercise of powers               F
conferred upon it under Section 97(2)(c) of the Act.

       For the foregoing reasons, we are of the view that so long Regulation
31 of the Regulations is not amended, 60 years which is the age of
superannuation of government servants employed under the State of Uttar             G
Pradesh shall be applicable to the employees of the Nigam. However, it
would be open to the Nigam with the previous approval of the State
Government to make suitable amendment in Regulation 31 and alter service
conditions of employees of the Nigam, including their age of superannuation.
It is needless to say that if it is so done, the same shall be prospective.
                                                                                    H
    328                     SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.

A          For the foregoing reasons, the appeals as well as writ petitions are
    allowed, orders passed by the High Court dismissing the writ petitions as
    well as those by the Nigam directing that the appellarits of the Civil Appeals
    and petitioners of the Writ Petitions would superannuate upon completion of
    the age of 58 years are set aside and it is directed that in case the employees
B   have been allowed to continue up to the age· of 60 years by virtue of some
    interim order, no recovery shall be made from them but in case, however,
    they have not been allowed to continue after completing the age of 58 years
    by virtue of erroneous decision taken by the Nigam for no fault of theirs,
    they would be entitled to payment of salary for the remaining period up to
    the age of 60 years which must be paid to them within a period of three
C   months from the date of receipt of copy of this order by the Nigam. There
    shall be no order as to costs.

    K.K.T.                                        Appeals and petitions allowed.


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For a digitally signed copy suitable for filing, refer to the court's own website. Only the court can issue one.