Supreme Court of India
STATE OF U.P. & ORS.versusVIRENDRA KUMAR & ORS.
- Citation
- 2022 INSC 1232
- Decided
- 25 November 2022
- Disposal
- Disposed off
- Bench
- SANJAY KISHAN KAUL
Holding
The Court upheld the Preetam Singh decision, adding that the State may frame Rules under Section 94(nn) to determine service conditions, and such Rules prevail over any Board regulations that are repugnant.
Summary
The Supreme Court examined whether determining the conditions of service of officers and employees of the Uttar Pradesh Avas Evam Vikas Parishad (the Board) is a statutory function of the Board under the 1965 Act. It held that the power to fix service conditions vests in the Board and can be exercised only by regulations under Section 95(f), while the State Government may frame overriding rules under Section 94(nn). The Court affirmed the earlier Preetam Singh judgment but modified it to recognise the State's limited rule‑making power, stating that any Board regulation repugnant to a State rule is void. It clarified the Board's functions under Section 15 and distinguished them from service‑condition matters. Consequently, the Court ordered that eligible officers and employees receive benefits under the new pension scheme, with interest where appropriate, and that the revised pay structure be applied notionally from 1 January 2006 but without arrears for the period up to 14 January 2010.
Issues considered
- Whether the judgment in State of U.P. v. Preetam Singh correctly held that conditions of service are not functions of the Board, especially in light of Sections 8, 92 and 94(2)(nn) of the 1965 Act.
- Whether the functions of the Board are limited to those enumerated in Section 15 of the 1965 Act and exclude the power to determine service conditions of its officers and employees.
- Whether the State Government has jurisdiction to issue directions regarding service conditions of the Board’s officers and employees under the 1965 Act and the 1975 Act.
Legislation cited
- U.P. State Control Over Public Corporations Act, 1975s. 2
- Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965s. 15, s. 3, s. 7, s. 8, s. 92, s. 94(2)(nn), s. 95(1)(f)
Subjects
service conditionsstatutory boardrule makingregulationspension schemeUttar Pradesh Avas Evam Vikas ParishadState Government powerstatutory interpretation
Judgment
638 [2022]
SUPREME COURT 14 S.C.R. 638
REPORTS [2022] 14 S.C.R.
A STATE OF U.P. & ORS.
v.
VIRENDRA KUMAR & ORS.
(Civil Appeal Nos.6622-6623 of 2022)
B NOVEMBER 25, 2022
[SANJAY KISHAN KAUL, ABHAY S. OKA AND
VIKRAM NATH, JJ.]
Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 –
s.3, 7, 8, 15, 92, 94(2)(nn) and 95(1)(f) – On 10.02.2020, a Bench
C of two judges made reference to a larger Bench to reconsider the
Preetam Singh’s case – The core issue on which the reference is
made to a larger Bench is whether the act of determining service
conditions of the employees and officers of the Board is one of the
statutory functions of the Board – Held: The power to determine
D the conditions of service of officers and servants of the Board vests
with the Board and, said power can be exercised only by framing
regulations under clause (f) of sub-section (1) of section 95 – Clause
(nn) of sub-section (2) of section 94 confers power of the State
Government to frame Rules in respect of any matter for which
regulations can be framed by the Board – The decision of the Supreme
E Court in Preetam Singh’s case is upheld with a modification that
State Government can always exercise the powers under clause (nn)
of sub-section (1) Section 94 of the 1965 Act for determining the
conditions of service of the officers (other than the Housing
Commissioner) and employees of the Board – If such power is
F exercised, those provisions of the Regulations framed under clause
(f) of sub-section (1) of Section 95 which are repugnant to the Rules,
shall be void – U.P. State Control Over Public Corporations Act,
1975 – s.2.
Disposing of the appeals, the Court
G HELD:1. Sub-section (1) of Section 8 of Uttar Pradesh Avas
Evam Vikas Parishad Adhiniyam, 1965 does not provide that the
State Government shall have the power to determine the
conditions of service of officers and employees of the Board. The
power to control the appointment and the power to put restrictions
are distinct and different from the power to determine the service
H
638
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 639
conditions of the officers and servants of the Board. The control A
of the State Government and the power to impose restrictions as
provided in sub-section (1) of Section 8 will extend to the creation
of posts of officers and servants of the Board. The control can be
exercised by directing the creation of different categories of posts.
The control can be also exercised by determining the number of
B
posts of different categories. In this context, Sections 94 and 95
of the 1965 Act are also relevant. Under sub-section (1) of Section
94, the State Government retains the general Rule making power
of framing Rules for carrying out the purposes of the Act. Without
prejudice to the generality of the power under sub-section (1),
sub-section (2) of Section 95 lays down the topics and subjects C
on which Rule-making power can be exercised. One of the specific
powers conferred by clause (b) of sub-section (2) of Section 94
on the State Government, is of framing Rules for laying down
conditions of service of the Housing Commissioner. Thus, clause
(nn) of sub-section (2) of Section 94 confers power on the State
D
Government to frame Rules in respect of any matter for which
regulations can be framed by the Board . Clause (f) of sub-section
(1) of Section 95 specifically empowers the Board to frame
Regulations governing conditions of service of officers and
servants of the Board. Under clause (b) of sub-section (2) of
Section 94, the State Government has a power to determine the E
conditions of service of the Housing Commissioner. Thus, the
Legislature has specifically incorporated in Section 7 that the
State Government shall have the power to determine the
conditions of service of the Housing Commissioner. However,
such a provision is conspicuously absent in Section 8 dealing with
F
the appointment of servants and officers of the Board. The reason
is that the power to determine the service conditions of the other
officers and servants has been conferred on the Board which can
be exercised by making Regulations. [Para 26][659-C-G; 660-B-
H; 661-A-B]
2. In view of sub-section (2) of Section 95 read with clause G
(nn) of sub-section (2) of Section 94, Regulations, if any, framed
by the Board for determining the conditions of services of its
officers and servants are always subject to the Rules which may
be framed by the State Government by exercising the power
under clause (nn) of sub-section (1) of Section 94. Whenever H
640 SUPREME COURT REPORTS [2022] 14 S.C.R.
A there is any inconsistency between the Regulations framed under
clause (f) of sub-section (1) of Section 95 and the Rules framed
under clause (nn) of subsection (1) of Section 94, the Rules will
prevail and to that extent, the provisions of the Regulations which
are repugnant to the Rules shall be void. To put it differently, the
power to determine the conditions of service of the officers
B
(except the Housing Commissioner) and servants of the Board
vests in the Board, and the said power can be exercised only by
framing Regulations under clause (f) of sub-section (1) of Section
95. So long as Rules are not framed by the State Government
under clause (nn) of subsection (1) of Section 95 for overriding
C the provisions of the Regulations framed by the Board for
prescribing the service conditions, the provisions of Regulations
shall always govern the field. Except for the exercise of the Rule
making power under clause (nn) of sub-section (1) of Section 94,
there is no specific power conferred under the 1965 Act, or for
that matter under the 1975 Act, on the State Government to nullify
D
or to override the conditions of service of its officers and servants
determined by the Board by the Regulations framed in the
exercise of powers under clause (f) of sub-section (1) of Section
95. [Para 27][661-C-F]
3. This Court concurred with the view taken by this Court
E in Preetam Singh’s case and answered as follows:
Q.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
F judgment does not refer to provisions of Sections 8, 92,
94(2)(nn)of the 1965 Act ?
A: The decision lays down the correct proposition of law.
Q.2 Whether the view expressed in Preetam Singh’s
G 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
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 641
Regulations as has been expressly provided in Section 15(1) by A
use of the expression “subject to the provisions of this Act and
the Rules and Regulations” shall also be functions of the Board
which induces service conditions of officers and employees as
per Section 95(1)(f) of the 1965 Act.
A: The first part of the question is answered in the B
affirmative. The functions of the Board are as specified in Section
15 and other relevant sections in Chapter III of the 1965 Act.
The second part is answered in the negative.
Q.3 Whether the State Government had no jurisdiction to
issue directions regarding service conditions of officers and C
employees of the U.P. Avas Evam Vikas Parishad under the
provisions of the 1965 Act and 1975 Act and all other enabling
powers with the State Government?
A: Answered in affirmative. But the State Government can
always frame Rules in the exercise of powers under clause (nn) D
of sub-section (1) of Section 94 of the 1965 Act for determining
the conditions of service of the servants and officers of the Board.
Whenever there is any inconsistency between Regulations framed
under clause (f) of sub-section (1) of Section 95 and the Rules
framed under clause (nn) of sub-section (1) of Section 94, the
Rules will prevail and to that extent, the provisions of the E
Regulations which are repugnant to the Rules shall be void. [Para
34][668-A-H]
4. This Court concluded as under :
(i) This Court upheld the decision of this Court in Preetam F
Singh’s case with a modification that the State Government can
always exercise the powers under clause (nn) of sub-section (1)
Section 94 of the 1965 Act for determining the conditions of
service of the officers (other than the Housing Commissioner)
and employees of the Board. If such power is exercised, those
provisions of the Regulations framed under clause (f) of G
sub-section (1) of Section 95 which are repugnant to the Rules,
shall be void;
(ii) All the officers and employees of the Board who have
not received the benefit of the old scheme till 07th September
H
642 SUPREME COURT REPORTS [2022] 14 S.C.R.
A 2012 and have retired on or after 1st January 2006 shall be entitled
to benefit of the new pension scheme as per the notification dated
19th May 2009 issued by the Board provided they are otherwise
eligible. However, the officers and employees appointed on or
after 1 st April 2005 will be governed by the newly defined
Contributory Pension Rules notified by the State Government;
B
(iii) Those officers and employees of the Board who have
retired on or after 1st January 2006 and who have not received
benefits under the old scheme till date shall be entitled to interest
as directed by this Court in paragraph 21 of the decision in Preetam
Singh’s case. Even those officers and employees who are entitled
C to benefit of the new pension scheme in terms of the notification
dated 19th May 2009 and who have taken benefits under the old
scheme pursuant to the interim order dated 07th September 2012,
will be entitled to interest on differential amounts, as directed in
terms of paragraph 21 of the decision of this Court in Preetam
D Singh’s case;
(iv) Those officers and employees of the Board who have
accepted the benefit under the old scheme before 7th September
2012 after giving an undertaking in terms of the Office Order
dated 16th January 2004 shall not be entitled to the benefit of the
E new pension scheme made applicable as per the notification dated
19th May 2009;
(v) While calculating the pension amount payable to those
who are entitled to the new pension scheme in terms of the
notification dated 19th May 2009, the benefit of notional pay
F fixation in terms of the revised pay structure with effect from 1st
January 2006 shall be provided; and
(vi) All the officers and employees of the Board who are
entitled to benefit of the revised pay structure in terms of the
Government Order dated 14th January 2010 shall be provided
G the said benefit within a period of three months from today, if not
provided earlier. While extending the said benefit, their pay shall
be notionally determined as per the revised pay structure with
effect from 1st January 2006. However, they shall not be entitled
to arrears of salary as per the revised pay structure from 1st
January 2006 till 14th January 2010. However, in the cases of the
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 643
employees and officers who have already received the arrears, A
no recovery proceedings shall be initiated against them. [Para
45][677-D-H; 678-A-G]
State of Uttar Pradesh v. Preetam Singh & Ors. (2014)
15 SCC 774 : [2014] 10 SCR 910; D.S. Nakara & Ors.
v. Union of India (1983) 1 SCC 305 : [1983] 2 SCR B
165 V. Sukumaran v. State of Kerala & Anr. (2020) (8)
SCC 106 : [2020] 6 SCR 991; A.R. Antulay v. Ramdas
Sriniwas Nayak & Anr. (1984) 2 SCC 500 : [1984] 2
SCR 914; Dhananjaya Reddy etc. v. State of Karnataka
(2001) 4 SCC 9 : [2001] 2 SCR 399; Gujarat Urja
Vikas Nigam Ltd. v. Essar Power Ltd. (2008) 4 SCC C
755 : [2008] 4 SCR 822; DLF Qutab Enclave Complex
Educational Charitable Trust v. State of Haryana (2003)
5 SCC 622 : [2003] 2 SCR 1; Commercial Tax Officer,
Rajasthan v. Binani Cements Ltd. & Anr. (2014) 8 SCC
319 : [2014] 3 SCR 1; Harwindra Kumar v. Chief D
Engineer, Karmik & Ors. (2005) 13 SCC 300 : [2005]
5 Suppl. SCR 317; Institute of Chartered Accountants
of India v. Price Waterhouse & Anr. (1997) 6 SCC 312
: [1997] 2 Suppl. SCR 267; State of Rajasthan & Anr.
v. Prem Raj (1997) 10 SCC 317 : [1997] 2 SCR 60;
Nazir Ahmed v. The King Emperor (1936) SCC OnLine E
PC 41 – referred to.
Case Law Reference
[2014] 10 SCR 910 referred to Para 1
[1983] 2 SCR 165 referred to Para 15 F
[2020] 6 SCR991 referred to Para 15
[1984] 2 SCR 914 referred to Para 16
[2001] 2 SCR 399 referred to Para 16
[2008] 4 SCR 822 referred to Para 16 G
[2003] 2 SCR 1 referred to Para 18
[2014] 3 SCR 1 referred to Para 20
[2005] 5 Suppl. SCR 317 referred to Para 21
H
644 SUPREME COURT REPORTS [2022] 14 S.C.R.
A [1997] 2 Suppl. SCR 267 referred to Para 21
[1997] 2 SCR 60 referred to Para 22
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.6622-
6623 of 2022.
From the Judgment and Order dated 16.03.2018 of the High Court
B of Judicature at Allahabad, Lucknow Bench in Writ Petition No.12645
(S/B) of 2016 and Writ Petition No.10355 (S/B) of 2017.
With
Civil Appeal Nos.6626 And 6627 of 2022.
Ms. Aishwarya Bhati, ASG, P. N. Misra, Vishwajit Singh, V. K.
C Shukla, Jitendra Mohan Sharma, Nidhesh Gupta, Sr. Advs., Abhishek
Kumar Singh, Pankaj Singh, Ms. Ridhima Singh, Ms. Pallavi Baghel,
Ms. Anamika Yadav, Ms. B. L. N. Shivani, Nithin Choudary Pavuluri,
Rajeev Kumar Dubey, Kamlendra Mishra, Mrs. Swarupama
Chaturvedi,Sourabh Jain, P. K. Jain, Abhinav Kr. Shrivastav, Amrit
D Pradhan, S. P. Singh Rathore, P. K. Goswami, Sanpreet Singh Ajmani,
Nikhil Majithia, Ms. Japneet Kaur, Ms. Vriti Gujral, Advs. for the
appearing parties.
The Judgment of the Court was delivered by
ABHAY S. OKA, J.
E 1. On 10th February 2020, for the reasons recorded, a Bench of
two Hon’ble judges of this Court came to the conclusion that the view
taken by this Court in the case of State of Uttar Pradesh v. Preetam
Singh & Ors.1 (Preetam Singh’s case)needs reconsideration. Under
Section 3 of the Uttar Pradesh Avas Evam Vikas ParishadAdhiniyam,
1965 (for short ‘the 1965 Act’), Uttar Pradesh Avas EvamVikas Parishad
F (for short ‘the Board’) was established. The basic object of the
establishment of the Board was of framing and executing housing and
improvement schemes in the State of Uttar Pradesh. The core issue on
which the reference is made to a larger Bench is whether the act of
determining service conditions of the employees and officers of the Board
G is one of the statutory functions of the Board.
FACTUAL ASPECTS
2. On 21st February 1995, the Board resolved to extend the
pensionary benefits to its employees by replacing the existing Contributory
Pension Scheme (for short ‘the old pension scheme’) with a pension/
1
H 2014 (15) SCC 774
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 645
[ABHAY S. OKA, J.]
family pension/gratuity scheme (for short ‘the new pension scheme’). A
On 16th May 1996, the State Government accorded its consent to the
new pension scheme subject to the condition that the Board will not be
entitled to seek any financial assistance for the implementation of the
new pension scheme.
3. By a Resolution dated 5th November 1997, the Board approved B
the new pension scheme. The new pension scheme was based on the
pension scheme of the State Government applicable to civil servants.
On 26th November 1997, State Government passed an order staying the
implementation of the new pension scheme. It appears that the State
Government appointed a committee of experts to examine the new
pension scheme of the Board. After considering the report of the C
committee of experts, the State Government vide order dated 14th
September 1999 vacated the stay granted earlier by imposing a condition
that the scheme shall be funded from the contribution to provident fund
made by the Board and that neither the State Government nor the Board
shall incur financial liability by implementing the new pension scheme. D
4. Preetam Singh and others who were the employees of the
Board, filed a writ petition in Allahabad High Court. The prayer in the
petition was initially confined to the challenge to the Government Order
dated 14th September 1999. During the pendency of the said petition, on
7th May 2003, the State Government reiterated its earlier stand of granting E
no objection to the new pension scheme subject to the condition that no
financial assistance shall be provided to the Board for implementing the
said scheme. On 16th January 2004, the Board by an office order gave
an option to its employees of either opting for the new pension scheme
or continuing with the old pension scheme. In terms of the option given
by the Board, according to the case of the State Government, 582 F
employees opted for the old pension scheme by filing necessary
undertakings. On 13th September 2005, the State Government issued an
order keeping its communication dated 7th May 2003 in abeyance on the
ground that it was preparing comprehensive guidelines regarding the
payment of pension to the employees of Public Sector Enterprises. By a G
communication dated 12th July 2007, the State Government purported to
withdraw the approval granted earlier to the new pension scheme of the
Board. The writ petition filed by Preetam Singh and others was
amended and a challenge to the orders dated 13th September 2005 and
12th July 2007 was incorporated in the petition. During the pendency of
H
646 SUPREME COURT REPORTS [2022] 14 S.C.R.
A the petition filed by Preetam Singh and others, the State Government
issued an office memorandum dated 8th December 2008 for applying a
revised pension, gratuity/family pension, and commutation scheme with
effect from 1st January 2006 for the benefit of its employees. The said
memorandum was issued in terms of the recommendations of the U.P
Pay Committee, 2008. However, the employees of local bodies and public
B
enterprises were specifically excluded from the applicability of the said
office memorandum. Another office memorandum was issued on 8th
December 2008 by the State Government for providing revised pensionary
benefits to those Government servants who had retired before 1st January
2006. This order was made applicable to the employees of Public Sector
C Enterprises who were already getting pension prior to 1st January 2006.
A Division Bench of Allahabad High Court by the judgment and order
dated 16th January 2009 allowed the writ petition filed by Preetam Singh
& others. The High Court quashed the orders dated 13th September
2005 and 12th July 2007 to the extent to which they related to the Board.
A writ of mandamus was issued directing the Board to implement the
D
new pension scheme in terms of its Regulations framed on 5th November
1997.
5. In view of the decision of the High Court, a notification dated
19th May 2009 was issued by the Board in the exercise of powers under
clause (f) of sub-section (1) of Section 95 of the 1965 Act. The notification
E recorded that the Board had decided to implement the new pension
scheme as admissible to the officers and employees of the State
Government in terms of the Rules and Regulations set out in the said
notification. The Board directed that the new pension scheme shall come
into force and will apply to those officers who retired on or after 1st
F January 1996. However, it was stated that the Newly Defined
Contributory Pension Rules of the State Government will be applicable
to those employees of the Board who have joined the employment on or
after 1st April 2005. The notification also provided that the orders issued
from time to time by the State Government with respect to pension/
family pension/ gratuity shall be applicable to the officers and employees
G of the Board.
6. The decision of the High Court was challenged by the State
Government before this Court in which the decision of this Court in
Preetam Singh’s case1 was rendered. It was observed in paragraph
21 of the final judgment of this Court that the interim order dated 7th
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 647
[ABHAY S. OKA, J.]
August 2012 passed by this Court had the effect of staying the notification A
dated 19th May 2009. By the interim order of this Court dated 7th
September 2012, the employees of the Board were permitted to claim
benefits under the old pension scheme. However, it was observed that
the interim order will not come in the way of the said employees agitating
their claim and also supporting the relief granted by the High Court.
B
7. One of the main contentions canvassed by the State of Uttar
Pradesh before this Court in Preetam Singh’s case1 was based on
provisions of sub-section (1) of Section 2 of the U.P. State Control Over
Public Corporations Act, 1975 (for short ‘the 1975 Act’). Section 2(1) of
the 1975 Act provides that every statutory body established or constituted
under any Uttar Pradesh Act shall in the discharge of its functions be C
guided by such directions on questions of policies as may be issued to it
by the State Government notwithstanding that no such power has been
expressly conferred by the statute establishing such a statutory body on
the State Government. The contention of the State Government was
that the orders issued on 13th September 2005 and 12th July 2007 must D
be deemed to have been issued in the exercise of powers under Section
2(1) of the 1975 Act.
8. While deciding Preetam Singh’s case1 on 24th September
2014, this Court referred to Section 15 of the 1965 Act which exhaustively
incorporates the functions of the Board. This Court came to the conclusion E
that fixing conditions of service of its employees does not constitute a
function of the Board. Therefore, this Court held that the State
Government had no power to issue the directions contained in its orders
dated 13th September 2005 and 12th July 2007. This Court also held that
clause (f) of sub-section (1) of Section 95 of the 1965 Act vests a power
in the Board to make Regulations for determining conditions of service F
of its officers and servants. It was held that the new pension scheme
has been framed by the Board in the exercise of power under clause (f)
of sub-section (1) of Section 95. While dismissing the Special Leave
Petition filed by the State Government, this Court referred to the
notification dated 19th May 2009 of the Board issued in the exercise of G
power under clause (f) of sub-section (1) of Section 95 of the 1965 Act.
This Court while dismissing the appeal preferred by the State Government
directed that all the eligible employees of the Board will be governed by
the said notification dated 19th May 2009. This Court directed the Board
to release pensionary benefits to retired employees governed by the
H
648 SUPREME COURT REPORTS [2022] 14 S.C.R.
A notification dated 19th May 2009 within a period of three months.
Paragraph 21 of the decision containing the directions issued by this
Court is reproduced below:-
“21. It is also necessary for us to determine the consequence of
the State of Uttar Pradesh, having approached this Court, to assail
B the impugned judgment dated 16-1-2009 [Preetam Singh v. State
of U.P., 2009 SCC OnLine All 33 : (2009) 2 All LJ 702] . This
Court having entertained the petition filed by the appellant,
passed interim directions on 7-8-2012 [State of
U.P. v. Preetam Singh, IA No. 7 in Civil Appeal No. 6307 of
2010, order dated 7-8-2012 (SC), wherein it was
C directed:”Taken on board. There shall be stay of the order
passed in Writ Petition No. 1433 of 2011 dated 24-7-2012.
IA No. 7 is disposed of. Registry is directed to list IA No. 4
on 27-8-2012, if it is in order.”] , which had the effect of
staying the implementation of the directions issued by the
D 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 [Preetam Singh v. State of U.P., 2009 SCC
E OnLine All 33 : (2009) 2 All LJ 702] , it is apparent that all the
eligible employees of the Vikas Parishad will be governed by the
Notification dated 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
F 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
G 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
H burden of the aforesaid interest component on the differential
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 649
[ABHAY S. OKA, J.]
amount will be discharged by the Vikas Parishad in the first A
instance. The same shall, however, be recovered from the State
of Uttar Pradesh, who is solely responsible for the interest ordered
to be paid to the employees concerned.”
(emphasis added)
9. On 16th October 2009, the State Government issued an order B
sanctioning revised pay structure, pay band, and grade pay to different
categories of employees working in public enterprises/ corporations. The
revised pay structure was incorporated in the annexure to the said order.
The Government Order stated that necessary action shall be taken by
the public enterprises/ corporations in consultation with the Public C
Enterprises Department/ Finance Department. It is also provided in the
Government Order that the execution of the Government Order shall be
made only after a proposal to that effect is approved by the Board of
Directors of the Public Sector Enterprises. On 30th November 2009, the
Housing Commissioner of the Board addressed a letter to the State
Government for communicating the proposal of the Board to apply the D
revised pay structure to its employees. In response, on 14th January
2010, the State Government issued a communication permitting the Board
to grant the revised pay structure according to the recommendations of
the 7th Report of the U.P Pay Committee, 2008 to its employees. The
State Government permitted the Board to grant the revised pay structure E
to its employees as provided in the aforesaid Government Order dated
16th October 2009. The said order was issued on the basis of the
recommendations of the Empowered Committee. However, it was stated
in that communication that the benefit shall be calculated on a notional
basis with effect from 1st January 2006 in the pay band and grade pay as
per the table annexed to the Government Order dated 16th October 2009. F
It provided that the actual benefit shall be provided with immediate effect
i.e. from 14th January 2010. In short, the employees of the Board were
not entitled to arrears of pay as per the revised pay structure with effect
from 1st January 2006. They were entitled to revised pay scales only on
a notional basis from 1st January 2006 and to the actual benefits only G
from 14th January 2010. Based on the said communication, an Office
Order was issued by the Board on 23rd January 2010 for giving effect to
the communication dated 14th January 2010. In fact, another Government
Order was issued on 15th September 2011 stating that in terms of the
order dated 14th January 2010, pay scales of the employees of the Board
H
650 SUPREME COURT REPORTS [2022] 14 S.C.R.
A will be notionally revised with effect from 1st January 2006 but the actual
benefits shall be extended only from 14th January 2010. The said
Government Order reiterates that the employees of the Board will not
be entitled to benefit of the revised pay structure for the period of 1st
January 2006 to 13th January 2010.
B 10. The State Government issued another order dated 05th May
2015 to the Board communicating the decision of the Hon’ble Governor
to grant pensionary benefits to the employees of the Board in terms of
the new pension scheme with retrospective effect from 1st January 2006.
The decision of the State Government, inter alia, provided that the
employees who were employed on or before 31st March 2005 and who
C had not retired till date shall be granted pension. It further provided that
the employees who had already retired and had taken benefits under the
old pension scheme will not be entitled to get a pension under the new
pension scheme. The Government directed that the employees of the
Board who have been employed on or after 1st April 2005 will not be
D entitled to grant of pension. In terms of the Government Order of 05th
May 2015, the Board issued Office Order dated 13th May 2015.
11. There were two sets of writ petitions filed before the Allahabad
High Court. The first one was Writ Petition No.12645 of 2016 filed by
certain employees of the Board. The following prayers were made in
E the petition :
“(i) to issue a writ, order or direction in the nature of Mandamus
commanding the respondents to re-determine the salary of the
petitioners till their retirement and thereafter their pensionary
benefits on the basis of Sixth Pay Commission Recommendation
F w.e.f.1.1.2006.
(ii) to issue a writ, order or direction in the nature of Mandamus
commanding the respondents to apply the provisions of the
Government Order No.1508 dated 8.12.2008 on the officers of
the Parishad, while suitably reading down the restrictive provisions
G about its non-application on the employees of the U.P. Awas Evam
Vikas Parishad in view of the Pension Regulations dated 19.5.2009
read with judgment and order of the Hon’ble Apex Court dated
23.9.2014.
(iii) to issue a writ, order or direction in the nature of mandamus
commanding the respondents to re-determine/re-fix the salary of
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 651
[ABHAY S. OKA, J.]
the petitioners in terms of Sixth Pay Commission Recommendation A
w.e.f. 1.1.2006 till their retirement and thereafter re-determine
their pensionary benefits as per revised last pay drawn and pay
arrears of salary and revised pensionary benefits from the date of
their retirement till date, in accordance with G.O. dated 8.12.2008,
after deducting the amounts already paid towards pensionary
B
benefits of the petitioners, within a period of 2 months.
(iv) to issue a writ, order or direction in the nature of Mandamus
commanding the respondents to grant the benefit of maximum
gratuity of Rs.10 lac to the petitioners as per Government Order
dated 8.12.2008.
C
(v) to issue a writ, order or direction in the nature of Mandamus
commanding the respondents to pay arrears of salary & pensionary
benefits calculated in terms of the Sixth Pay Commission
Recommendation, including enhanced gratuity of Rs.10 lac, along
with payment of interest at the prevailing Bank rates, within a
period of 2 months. D
(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.”
Writ Petition No.10355 of 2017 was filed by another set of E
employees of the Board for challenging the order dated 05th May 2015
passed by the State Government and the consequential order dated 13th
May 2015 passed by the Board.
12. By the impugned judgment, the aforesaid two petitions were
disposed of. While disposing of the petitions, in paragraph 41, the following F
directions were issued :
“41. Accordingly, both the writ petitions are allowed and the
impugned orders dated 05.05.2015 and 13.05.2015 contained in
Annexure No.1 and 2 to the Writ Petition o.126345 (S/B) of 2017
are quashed to the extent they are contrary to the judgment passed
G
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 H
652 SUPREME COURT REPORTS [2022] 14 S.C.R.
A U.P. Avas Evam Vikas Parishad Regulations notified on 19th
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
B
petitioners shall be entitled and paid interest at the rate of
12% per annum.”
(emphasis added)
THE ORDER OF REFERENCE TO A LARGER BENCH
C 13. Now, we come to the order dated 10th February 2020 passed
by this Court. A Bench of two Hon’ble Judges of this Court prima facie
found that the functions of the Board contemplated under Section 15 of
the 1965 Act were wide enough even to cover the act of fixing service
conditions of its employees. In paragraph 43, this Court framed three
D questions for consideration of a larger Bench. Paragraph 43 of the said
order reads thus:
“43. Due to the above reasons we are of the view that with regard
to three aspects i.e. (1), (2) and (3) as 42 noted above, the judgment
in Preetam Singh’s case needs reconsideration. We formulate
E 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
F 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
G
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
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 653
[ABHAY S. OKA, J.]
conditions of officers and employees as per Section 95(1)(f) of A
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 B
State Government?
SUBMISSIONS OF THE STATE GOVERNMENT AND
THE BOARD
14. Ms. Aishwarya Bhati, the learned Additional Solicitor General
appearing for the State Government urged that the statutory functions C
of the Board include the function of fixing terms and conditions of the
employment of its employees. She placed reliance on Section 92 of the
1965 Act which confers a power on the State Government to issue
directions to the Board for carrying out the purposes of the 1965 Act.
She urged that it is the duty of the Board to comply with the directions D
issued by the State Government. It was further submitted that apart
from Section 2(1) of the 1975 Act, there was sufficient power vesting in
the State Government under Section 8 of the Section 1965 Act to control
and put restrictions on the powers of the Board to appoint officers and
employees. The learned ASG invited our attention to the notification
dated 19th May 2009 by which the Board applied the new pension scheme E
to the employees who retired on or after 1st January 1996. She pointed
out that in the said notification, it is specifically directed that the orders
with respect to pension/family pension/gratuity issued by the State
Government from time to time shall also be applicable to the officers
and employees of the Board. She pointed out that the said notification F
was never challenged. She would, therefore, submit that the directions
of the State Government impugned by the private respondents cannot
be faulted. After inviting our attention to the interim order dated 7th
September 2012 passed by this Court, the learned ASG submitted that
those who have unconditionally opted for the old pension scheme prior
to 7th September 2012 have no subsisting right to claim the pension in G
terms of the new pension scheme. She submitted that the employees
are not entitled to salary as per the revised pay structure for the period
between 1st January 2006 to 13th January 2010 as per the binding directions
of the State Government. The learned senior counsel representing the
Board also made similar submissions. H
654 SUPREME COURT REPORTS [2022] 14 S.C.R.
A THE SUBMISSIONS OF THE PRIVATE RESPONDENTS
15. The learned counsel appearing for the respondents in Civil
Appeal Nos.6624 and 6625 of 2022 also made legal submissions. We
may note here that while reserving the judgment on 15th September 2022,
we had detagged the said appeals. Nevertheless, we are also considering
B the submissions made by the respondents in the detagged appeals as
regards the three questions of law that are required to be decided. The
submission of the learned counsel is that as several employees were
facing financial hardships after their retirement, they had no option but
to give the undertakings to accept the old pension scheme and not opt
for the new pension scheme. Considering this situation, this Court by an
C interim order passed in Preetam Singh’s case1had directed that even
if employees have taken benefit of the old pension scheme by giving an
undertaking, they will be entitled to the benefit of the new pension scheme
in terms of the notification dated 19th May 2009. The learned counsel
invited our attention to the subsequent order dated 5th May 2015 passed
D by the State Government by which the benefit of the new pension scheme
was denied to those who opted to join the employment of the Board on
or after 1st April 2005. His submission is that this direction is discriminatory
which creates two classes of pensioners without any rational basis. He
relied upon a decision of this Court in the case of D.S. Nakara & Ors.
v. Union of India2 as well as another decision in the case of V.
E Sukumaran v. State of Kerala & Anr.3. He would, therefore, submit
that reconsideration of the view taken in Preetam Singh’s case1 is not
at all warranted.
16. Shri Nidhesh Gupta, the learned senior counsel stated that he
represents only those respondents who had never opted for the old pension
F scheme and had not received any amount under the old scheme. He
submitted that under clause (f) of sub-section (1) of Section 95 of the
1965 Act, the Board has a power to make Regulations providing for
conditions of service of officers and servants of the Board. Inviting our
attention to sub-section (2) of Section 95 of the 1965 Act, Shri Gupta
G would submit that only when any Regulation framed by the Board is
repugnant to the Rules framed by the State in the exercise of powers
under Section 94, the Rules will prevail. He submitted that admittedly
the State Government has not exercised the Rule making power under
2
1983 (1) SCC 305
3
H 2020 (8) SCC 106
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 655
[ABHAY S. OKA, J.]
Section 94. He urged that under clause (nn) of sub-section (2) of Section A
94, the State Government has a power to frame Rules concerning any
matter for which Regulations can be framed under Section 95. He
submitted that it is well settled that when an enactment requires that a
certain thing should be done in a certain way, the thing must be done in
that way or not at all. He relied upon various decisions in this behalf, viz.,
B
A.R. Antulay v. Ramdas Sriniwas Nayak & Anr.4; Dhananjaya
Reddy etc. v. State of Karnataka5; and Gujarat Urja Vikas Nigam
Ltd. v. Essar Power Ltd.6.
17. Inviting our attention to Section 2(1) of the 1975 Act, he
submitted that the power conferred by the said provision on the State
Government to issue directions is a general power. This power is confined C
to issuing directions on questions of policies. He submitted that the said
power can be exercised in relation to the discharge of functions of the
Board. He urged that Section 15 of Chapter III of the 1965 Act lays
down the functions of the Board. He pointed out that Chapter III requires
the Board to frame various schemes. He urged that none of the clauses D
(a) to (p) of Section 15 lays down that the appointment of employees
and fixing their service conditions is a function of the Board under the
1965 Act. He urged that in the exercise of power under Section 2(1) of
the 1975 Act, directions cannot be issued regarding the service conditions
of officers and employees of the Board.
E
18. By referring to Section 7 of the 1965 Act, he submitted that
sub-section (2) thereof clearly provides that the conditions of service of
the Housing Commissioner shall be such as may be prescribed. Relying
upon the definition of the word ‘prescribed’ in clause (n) of Section 2, he
submitted that the conditions of service of the Housing Commissioner
have to be prescribed by the State Government by exercising the Rule F
making power. However, Section 8 which provides for the appointment
of officers and servants of the Board does not contain such a provision.
He submitted that the special or general orders of the State Government
contemplated by sub-section (1) of Section 8 can be issued only regarding
the mode and manner of appointment of the officers and servants of the G
Board and the same have nothing to do with service conditions. The
power of the State Government to issue general or special orders is only
for the purpose of imposing control and restrictions on the appointment
4
(1984) 2 SCC 500
5
(2001) 4 SCC 9
6
(2008) 4 SCC 755 H
656 SUPREME COURT REPORTS [2022] 14 S.C.R.
A of the officers and servants of the Board. Therefore, sub-section (1) of
Section 8 cannot be construed to mean that by issuing general or special
orders, the State Government can determine the conditions of service of
the officers and servants of the Board. He submitted that as two different
expressions have been used in Sections 7 and 8 of the 1965 Act, different
meanings will have to be assigned to the said different expressions. On
B
this issue, he relied upon a decision of this Court in the case of DLF
Qutab Enclave Complex Educational Charitable Trust v. State of
Haryana7.
19. He urged that the power under sub-section (2) of Section 92
can be exercised by the State Government by issuing directions that are
C necessary for carrying out the purposes of the 1965 Act. He submitted
that in any event, in the present case, statutory Regulations have been
framed by the Board dealing with the grant of pensionary benefits.
20. He submitted that the power to issue directions under Section
2(1) of the 1975 Act is a general power and the power under Sections 8
D and 92 of the 1965 Act is a specific or special power. Relying upon a
decision of this Court in the case of Commercial Tax Officer, Rajasthan
v. Binani Cements Ltd. & Anr.8, he urged that the specific provisions
under the 1965 Act will prevail over the general provision under Section
2(1) of the 1975 Act.
E 21. He relied upon a decision of this Court in the case of Harwindra
Kumar v. Chief Engineer, Karmik & Ors.9. He submitted that
executive order cannot override the exercise of power made by the
Board by framing Regulations concerning the new Pension Scheme. He
submitted that if the submission of the State Government that by issuing
executive orders it can override the provisions of the Regulations framed
F under Section 95 of the 1965 Act is accepted, the entire scheme of
Sections 94 and 95 of the 1965 Act will be rendered completely redundant.
Relying upon a decision of this Court in the case of Institute of
Chartered Accountants of India v. Price Waterhouse & Anr.10, he
would submit that such an interpretation cannot be accepted.
G 22. He pointed out that if the pension is not granted on the basis of
revised pay scales, the very purpose of the grant of pension will be
defeated. He submitted that employees cannot be divided into two
7
(2003) 5 SCC 622
8
(2014) 8 SCC 319
9
(2005) 13 SCC 300
H 10
(1997) 6 SCC 312
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 657
[ABHAY S. OKA, J.]
classes – one of those who retired pre-1996 and others of who retired A
post-1996. He submitted that there was no justification for the Bureau
of Public Enterprises for writing a letter dated 14th January 2010 conferring
the benefit of the revised pension not from 1st January 2006 but from
14th January 2010. He submitted that no explanation has been offered
either before the High Court or this Court for fixing the date of 14th
B
January 2010. He relied upon a decision of this Court in the case of
State of Rajasthan & Anr. v. Prem Raj11.
23. He pointed out that the benefit of the revised pension was
given by the State Government to the employees of U.P Power
Corporation with effect from 1st January 2006. To the employees of U.P
Jal Nigam, the benefit of the revised pension was given only from 12th C
April 2010. The employees of Jal Nigam filed a writ petition before the
High Court which was allowed by holding that the employees were entitled
to get the benefit of the revised pension from 1st January 2006. The said
decision has become final as a Special Leave Petition filed by the State
Government against the said order has been dismissed on 20th May 2022. D
He submitted that the Board has adequate resources to bear the burden
of payment of revised pension from 1st January 2006. His submission is
that the law laid down by this Court in the case of Preetam Singh’s
case1 does not call for any reconsideration at all.
CONSIDERATION OF THE QUESTIONS FRAMED
E
24. The three questions framed under Order dated 10th February
2020 are inter-connected. For deciding these three questions, we will
have to decide the core issues whether the functions of the Board are
confined to those which are set out in Section 15 of the 1965 Act and
whether the appointment of officers and employees of the Board and
the determination of their conditions of service constitute the functions F
of the Board. Another question that will have to be addressed is as
regards the power, if any, of the State Government to issue directions to
the Board concerning the determination of the conditions of service of
its officers and servants.
POWER TO DETERMINE THE CONDITIONS OF G
SERVICE OF THE OFFICERS AND SERVANTS OF THE
BOARD
25. We have perused the provisions of the 1965 Act. Chapter II
thereof has the heading, “Establishment and conduct of business of the
11
(1997) 10 SCC 317 H
658 SUPREME COURT REPORTS [2022] 14 S.C.R.
A Board”. Chapter II consists of Sections 3 to 14. Section 3 provides for
the constitution of the Board. Section 7 provides for the appointment of
a Housing Commissioner. Section 7 reads thus :
“7. Provisions relating to Housing Commissioner.-(1) There
shall be a Housing Commissioner appointed by the State
B Government for the purposes of this Act.
(2) The conditions of service of the Housing Commissioner
shall be such as may be prescribed. He shall be remunerated
from the Board’s fund.
(3) The State Government may, if it is of opinion that special
C circumstances so require, appoint the Housing Commissioner to
be the Adhyaksh in addition to his own duties.
(4) The State Government may also appoint the Housing
Commissioner as an authority under any other law for the time
being in force.”
D
(emphasis added)
Section 8 deals with “Appointment of Officers and Servants”.
Section 8 reads thus :
“8. Appointment of officers and servants.-(1) Subject to such
E 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.
F (2) the Board may, with the previous approval of the State
Government appoint a servant of the Central or the State
Government or of a local authority on any of the posts under it on
such terms and conditions as may be agreed upon.”
(emphasis added)
G As provided in sub-section (1) of Section 7, the Housing
Commissioner has to be appointed by the State Government. Sub-section
(2) of Section 7 provides that the conditions of service of the Housing
Commissioner must be prescribed by the Rules. Rule-making power
under Section 94 vests with the State Government. Clause (b) of sub-
section (2) of Section 94 empowers the State Government to frame
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 659
[ABHAY S. OKA, J.]
Rules determining the conditions of service of the Housing Commissioner. A
The obvious reason for conferring the power to determine service
conditions of the Housing Commissioner on the State Government appears
to be that the State Government is the appointing authority.
26. In contrast, sub-section (1) of Section 8 provides that subject
to control and restrictions imposed from time to time by the State B
Government by special or general orders, the Board may appoint such
officers and servants as it considers necessary for the efficient
performance of its functions. There is a marked distinction between the
language used by sub-section (2) of Section 7 and sub-section (1) of
Section 8 though both provisions deal with the power to appoint officers
of the Board. Thus, two different expressions or terminologies have C
been used in Sections 7 and 8. Therefore, the legislature intended to
convey different meanings. Sub-section (1) of Section 8 does not provide
that the State Government shall have the power to determine the conditions
of service of officers and employees of the Board. The power to control
the appointment and the power to put restrictions are distinct and different D
from the power to determine the service conditions of the officers and
servants of the Board. The control of the State Government and the
power to impose restrictions as provided in sub-section (1) of Section 8
will extend to the creation of posts of officers and servants of the Board.
The control can be exercised by directing the creation of different
categories of posts. The control can be also exercised by determining E
the number of posts of different categories. In this context, Sections 94
and 95 of the 1965 Act are also relevant. Under sub-section (1) of Section
94, the State Government retains the general Rule making power of
framing Rules for carrying out the purposes of the Act. Without prejudice
to the generality of the power under sub-section (1), sub-section (2) of F
Section 95 lays down the topics and subjects on which Rule-making
power can be exercised. One of the specific powers conferred by clause
(b) of sub-section (2) of Section 94 on the State Government, as pointed
out earlier, is of framing Rules for laying down conditions of service of
the Housing Commissioner. Clause (nn) of sub-section (2) of Section 94
reads thus : G
“94. Power to make Rules.- (1) … … … …
(2) In particular and without prejudice to the generality of the
foregoing power, such rules may provide for-
………… H
660 SUPREME COURT REPORTS [2022] 14 S.C.R.
A …………
(nn) any matter for which regulation may be made by the Board
under Section 95;
… … … …”
B Thus, clause (nn) of sub-section (2) of Section 94 confers power
on the State Government to frame Rules in respect of any matter for
which regulations can be framed by the Board. Section 95 which confers
the powers on the Board to frame Regulations reads thus :
“95. Power to make regulations.-(1) The Board may, by
C notification in the Gazette, make regulations providing for –
(a) ……………………………………………………;
(b) ……………………………………………………;
(c) ……………………………………………………;
D (d) ……………………………………………………;
(e) the duties of officers and servants of the Board;
(f) the conditions of service of officers and servants of
the Board;
E (g) …………………………………………………….;
(h) …………………………………………………….;
(i) …………………………………………………….;
(j) …………………………………………………….;
F (k) ……………………………………………………;
(l) ……………………………………………………;
(m) ……………………………………………………;
(n) any other matter which is to be or may be provided for by
G regulations under this Act or the rules.”
(emphasis added)
Clause (f) of sub-section (1) of Section 95 specifically empowers
the Board to frame Regulations governing conditions of service of officers
and servants of the Board. Under clause (b) of sub-section (2) of Section
H 94, the State Government has a power to determine the conditions of
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 661
[ABHAY S. OKA, J.]
service of the Housing Commissioner. Thus, the Legislature has A
specifically incorporated in Section 7 that the State Government shall
have the power to determine the conditions of service of the Housing
Commissioner. However, such a provision is conspicuously absent in
Section 8 dealing with the appointment of servants and officers of the
Board. The reason is that the power to determine the service conditions
B
of the other officers and servants has been conferred on the Board
which can be exercised by making Regulations.
27. In view of sub-section (2) of Section 95 read with clause (nn)
of sub-section (2) of Section 94, Regulations, if any, framed by the Board
for determining the conditions of services of its officers and servants
are always subject to the Rules which may be framed by the State C
Government by exercising the power under clause (nn) of sub-section
(1) of Section 94. Whenever there is any inconsistency between the
Regulations framed under clause (f) of sub-section (1) of Section 95
and the Rules framed under clause (nn) of sub-section (1) of Section 94,
the Rules will prevail and to that extent, the provisions of the Regulations D
which are repugnant to the Rules shall be void. To put it differently, the
power to determine the conditions of service of the officers (except the
Housing Commissioner) and servants of the Board vests in the Board,
and the said power can be exercised only by framing Regulations under
clause (f) of sub-section (1) of Section 95. So long as Rules are not
framed by the State Government under clause (nn) of sub-section (1) of E
Section 95 for overriding the provisions of the Regulations framed by
the Board for prescribing the service conditions, the provisions of
Regulations shall always govern the field. Except for the exercise of the
Rule making power under clause (nn) of sub-section (1) of Section 94,
there is no specific power conferred under the 1965 Act, or for that F
matter under the 1975 Act, on the State Government to nullify or to
override the conditions of service of its officers and servants determined
by the Board by the Regulations framed in the exercise of powers under
clause (f) of sub-section (1) of Section 95.
FUNCTIONS OF THE BOARD G
28. Now coming to the issue of the functions of the Board, we
may note that Chapter III of the 1965 Act has the heading “Functions
and Powers of the Board”. As noted earlier, specific provisions regarding
the appointment of the Housing Commissioner, officers and servants of
the Board find a place in Chapter II and not in Chapter III. As specifically H
662 SUPREME COURT REPORTS [2022] 14 S.C.R.
A provided in clause (1) of Section 8, the Board is empowered to appoint
such officers and servants as it considers necessary for the efficient
performance of its functions. This is one factor that suggests that the
appointment of officers and servants is not a function of the Board but
their appointments are required to be made for the efficient performance
of its functions.
B
29. Chapter III dealing with “Functions and Powers of the Board”
comprises of Sections 15 to 49. Section 15 has the heading “Functions
of the Board” which reads thus :
“15. Functions of the Board.-(1) Subject to the provisions of
C 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 co-ordinate various housing activities in the
D 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
E 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;
F
(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
G manufacture and stock-piling 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,
H 1955 (U.P. Act No.XXIII of 1955);
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 663
[ABHAY S. OKA, J.]
(h) to regulate building operations; A
(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;
B
(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 authorities and other public corporations, and to C
give grants and loans to local authorities, other public
corporations, housing co-operative 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 D
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 E
(p) to do all such other acts and things as may be necessary
for the discharge of the functions before mentioned.
(2) Subject to the provisions of this Act and the rules and
regulations, Board may undertake, where it deems necessary, any
of the following functions, namely- F
(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, G
and departments of the Central Government and the State
Government;
(c) to supply and sell building materials;
(d) to co-ordinate, simplify and standardise the production
of building materials and to encourage and organise the H
664 SUPREME COURT REPORTS [2022] 14 S.C.R.
A prefabrication and mass production 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
B 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.”
C As the appointments of officers and servants of the Board are
dealt with by Sections 7 and 8 in Chapter II, the same do not find a place
in the functions of the Board set out either in Section 15 or in any other
Section in Chapter III. There are provisions incorporated in Chapter III
dealing with various schemes and the powers of the Board which can
D be exercised for the implementing the schemes.
30. Chapter V of the 1965 Act provides for the Board of acquiring
and disposing of land for the purposes of the Act. Under Section 59, the
Board is empowered to issue debentures. Under Section 58(3), the Board
is entitled to raise loans for the purposes of the Act. Obviously, acquiring
E and selling the property, issuing debentures, and raising loans cannot be
the functions of the Board. These powers have been conferred by Chapter
V to enable the Board to effectively discharge its functions and to exercise
its powers specified in Chapter III. The nature of the functions of a
statutory body like the Board will always depend on the object of
establishing such a body. The appointment of officers and servants needs
F to be made for the efficient performance of the specific functions of the
Board. The exercise of power to appoint servants and officers of the
Board and determination of their service conditions cannot constitute
the functions of the Board. The powers under Chapter V and the power
of appointing officers and servants under Sections 7 and 8 of Chapter II
G need to be exercised for ensuring proper discharge of the functions of
the Board as well as for the exercise of the powers set out in Chapter
III. We are, therefore, of the considered view that the appointment of
officers and servants and determination of their service conditions cannot
constitute functions of the Board.
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 665
[ABHAY S. OKA, J.]
POWER OF THE STATE GOVERNMENT TO ISSUE A
DIRECTIONS TO THE BOARD REGARDING THE
DETERMINATION OF THE SERVICE CONDITIONS OF
THE BOARD
31. Section 92 which provides for Control of the State Government
over the Board is a part of Chapter X under the heading “External B
Control”. Section 92 reads thus :
“92. Control of the State Government over the Board and
other local authorities.-(1) The Board shall-
(a) submit to the State Government such reports and returns in
such forms and at such intervals as may be prescribed; C
(b) furnish to the State Government such documents, returns,
statements, estimates or other information regarding any matter
under the control of the Board as may be directed by the State
Government.
D
(2) The State Government may give the Board such
directions as in its opinion are necessary or expedient for
carrying out the purposes of this Act, and it shall thereupon
be the duty of the Board to comply with such directions.
(3) Without prejudice to other provisions of this Act, and
E
notwithstanding anything contained in any other law for the time
being in force, the State Government may give any local authority
such directions as in its opinion are necessary or expedient for
enabling the Board to carry out the purposes of this Act; and
thereupon it shall be the duty of the local authority to comply with
such directions.” F
(emphasis added)
The power under sub-section (2) of section 92 is to be exercised
for issuing directions for carrying out the purposes of the 1965 Act. The
issue is whether the State Government can exercise the power under
sub-section (2) of Section 92 to override statutory Regulations framed G
by the Board in the exercise of powers under clause (f) of sub-section
(1) of Section 95. If the State Government desires to override or nullify
such Regulations, there is a specific provision under the said Act of 1965
which enables the State Government to do so. On a conjoint reading of
clause (nn) of sub-section (1) of Section 94 and sub-section (2) of Section H
666 SUPREME COURT REPORTS [2022] 14 S.C.R.
A 95, the State Government has the power to frame Rules determining the
service conditions of the officers and servants of the Board and once
the Rules are framed by the State Government in this behalf, the provisions
of the Regulations framed by the Board will apply only to the extent to
which they are not repugnant to the Rules. Service conditions will
necessarily include salary, perquisites, allowances, retirement benefits
B
such as pension, etc. The Regulations framed by the Board under clause
(f) of sub-section (2) of Section 95 have a force of law. On a plain
reading of sub-section (2) of Section 92, by no stretch of the imagination,
by issuing directions, the State Government can nullify the statutory
Regulations framed under Section 95. More so, when the 1965 Act itself
C specifically enables the State Government to nullify the Regulations by
exercising the Rule making power. As the scheme of the 1965 Act
specifically provides that Regulations framed under Section 94 can be
overridden by framing Rules in accordance with clause (nn) of sub-
section (1) of Section 94, the act of overriding the Regulations must be
done only by framing the Rules and not in any other manner. This view
D
is supported by a series of decisions of this Court taking a consistent
view that where an enactment requires to do a certain thing in a certain
way, the thing must be done in that way and in no other manner. There
are several decisions taking that view ending with the decision of this
Court in the case of Gujarat Urja Vikas Nigam6. However, the locus
E classicus on this point is the well-known decision of the Privy Council in
the case of Nazir Ahmed v. The King Emperor12. It was held by
Privy Council that
“where a power is given to do certain things in a certain way, the
things must be done in that way and not at all. Other methods of
F performance are certainly forbidden”.
The upshot of the aforesaid discussion is that the State Government
has no power to issue directions under sub-section (2) of Section 92 to
nullify or override the Regulations framed by the Board in the exercise
of powers under clause (f) of sub-section (1) of Section 95.
G 32. Another argument of the State Government is based on sub-
section (1) of Section 15 which opens with an expression “subject to the
provisions of this Act and the rules and regulations”. By use of the said
expression, the exercise of the power to frame Regulations for
determining the conditions of service of officers and servants does not
12
H 1936 SCC OnLine PC 41
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 667
[ABHAY S. OKA, J.]
become a function of the Board. The meaning of the opening part of A
sub-section (1) of Section 15 is that the functions of the Board must be
discharged subject to the constraints of the Rules and Regulations framed
under the 1965 Act.
33. Next limb of the argument of the State Government is based
on Section 2(1) of 1975 Act. Section 2(1) reads thus : B
“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- C
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.” D
(emphasis added)
On a plain reading of the aforesaid provision, the power to issue
directions vested in the State Government can be exercised only for
issuing directions confined to questions of policies. The directions can E
be issued confined to policies concerning the discharge of the functions
of the Statutory Body. The directions issued by the State Government
on the questions of policies guide every statutory body in the discharge
of its functions. For the reasons we have already recorded while dealing
with sub-section (2) of Section 92 of the 1965 Act, even the power
under Section 2(1) of the 1975 Act cannot be invoked to nullify the F
statutory Regulations framed by the Board which have a force of law.
That can be done only by exercising the Rule making power under clause
(nn) of sub-section (1) of Section 94 of the 1965 Act. The power under
Section 2(1) of the 1975 Act is the general power that must yield to the
special powers conferred by the 1965 Act. The power under sub-section G
(1) of Section 2 is different and distinct from the power to frame statutory
Rules.
CONCLUSIONS ON THE THREE QUESTIONS
34. The aforesaid discussion is sufficient to answer the three
questions framed. Subject to what we have held above, we concur with H
668 SUPREME COURT REPORTS [2022] 14 S.C.R.
A the view taken by this Court in Preetam Singh’s case1. Our answers
to the three questions are as under :
Q.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
B 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 ?
A: The decision lays down the correct proposition of law.
Q.2 Whether the view expressed in Preetam Singh’s judgment
C that functions of the U.P. Avas Evam Vikas Parishad are only the
specific functions enumerated in Section 15 of 1965 Act which
does not include the service conditions of employees of the Board
lays down the correct law ? Whereas the functions of the Board
referred to in other provisions of Act, Rules and Regulations as
has been expressly provided in Section 15(1) by use of the
D expression “subject to the provisions of this Act and the Rules
and Regulations” shall also be functions of the Board which induces
service conditions of officers and employees as per Section
95(1)(f) of the 1965 Act.
A: The first part of the question is answered in the affirmative.
E The functions of the Board are as specified in Section 15 and
other relevant sections in Chapter III of the 1965 Act. The second
part is answered in the negative.
Q.3 Whether the State Government had no jurisdiction to issue
directions regarding service conditions of officers and employees
of the U.P. Avas Evam Vikas Parishad under the provisions of
F
the 1965 Act and 1975 Act and all other enabling powers with the
State Government?
A: Answered in affirmative. But the State Government can always
frame Rules in the exercise of powers under clause (nn) of sub-
section (1) of Section 94 of the 1965 Act for determining the
G conditions of service of the servants and officers of the Board.
Whenever there is any inconsistency between Regulations framed
under clause (f) of sub-section (1) of Section 95 and the Rules
framed under clause (nn) of sub-section (1) of Section 94, the
Rules will prevail and to that extent, the provisions of the
H Regulations which are repugnant to the Rules shall be void.
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 669
[ABHAY S. OKA, J.]
CONSIDERATION OF THE ANCILLARY ISSUES A
CONCERNING THE RELIEFS GRANTED UNDER THE
IMPUGNED JUDGMENT
35. After having decided the questions, we are of the view that
Civil Appeals can be decided in terms of our findings instead of sending
them back to the Bench of two Hon’ble Judges. B
PENSION
36. Now, we proceed to deal with the ancillary issues. Now coming
to the new pension scheme, an Office Order was issued on 16th January
2004 by the Board recording that a proposal for framing a scheme of
pension was under consideration. The Office Order dated 16th January C
2004 provided that those employees who were not interested in opting
for the new pension scheme must file an affidavit on stamp paper of
Rs.10/-. In the said affidavit, it must be clearly and specifically asserted
that the beneficiary was not interested in the new pension scheme and
the entire amount deposited by him as his share along with Board’s D
share should be paid to the beneficiary. It was also provided that the
affidavit must state that in the future, the beneficiary will not claim
pensionary benefits before any authority or the Court. According to the
stand taken by the State Government, total of 582 employees/officers
opted for the old scheme by filing affidavits/undertakings. The State
Government has placed on record a copy of the affidavit of respondent E
no.1 – Virendra Kumar in one of the appeals. It is not disputed that all
the affidavits of the employees who decided not to opt for the new
pension scheme are in the same format. In the affidavit, it was
incorporated that the employee was not interested at all in the pension
scheme and he was interested in taking payments under the old scheme. F
It is specifically stated that he will not make any claim in respect of the
new pension scheme.
37. After the State Government accorded its approval, on 05th
November 1997 the Board passed a Resolution approving the new pension
Scheme. The High Court while allowing the petitions filed by Preetam G
Singh and others, directed the Board to implement the new pension
scheme in terms of its decision dated 05th November 1997. High Court
allowed the petition on 16th January 2009. For giving effect to the decision,
on 19th May 2009, the Board issued a notification recording that in the
exercise of the powers under clauses (f) and (n) of sub-section (1) of
H
670 SUPREME COURT REPORTS [2022] 14 S.C.R.
A Section 95 of the 1965 Act, it has decided that the pension scheme and
gratuity admissible to the officers and servants of the State Government
shall be admissible to the employees of the Board. The relevant part of
the said notification reads thus :
“…. …. ….
B Now therefore, the U.P. Avas Evam Vikas Parishad, in exercise
of the power under clause (f)(i) & (n) of sub-section (1) of Section
95 of U.P. Avas Evam Vikas Parishad Adhiniyam, 1965 (U.P. Act
1 of 1966) has decided that the Pension/Family Pension and
Gratuity admissible to the officers and employees of State
C Government, which is governed by the following rules, schemes
and Government orders shall also be admissible (excluding Pension
commutation) to the officer and employees of the U.P. Avas Evam
Vikas Parishad :
1. Civil Service Regulations as applicable in UP.
D As amended
2. Uttar Pradesh Liberalized Pension Rules, 1961 do
3. U.P. Retirement Benefit Rules, 1961 do
4. New Family Pension Scheme, 1965 do
E 5. All orders of finance department of U.P.
Government as related to pension/
family pension/Gratuity do
6. Newly defined Contributory Pension rules
F According to notification no.Sa-3-379/
Das-2005-301(9)/2003, dated March 28,
2005 applicable to officers and employees
of State Govt., who joined services on
G April 01, 2005 on onwards do
The orders with respect to the Pension/Family Pension/
Gratuity issued time to time by the State Govt. shall also
be applicable to the officers and employees of U.P. Avas
Evam Vikas Parishad.
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 671
[ABHAY S. OKA, J.]
It has also been decided by the Parishad that General Provident A
Funds Rules, 1985, shall be applicable to the officer and employees
of U.P. Avas Evam Vikas Parishad instead of Contributory
Provident Fund (CPF) Regulations, 1973.
In GPF Rules and Govt. Rules/Orders issued in this regard,
‘Govt.’ means the ‘U.P. Avas Evam Vikas Parishad’, ‘Accountant B
General’ means ‘finance Controller of U.P. Avas Evam Vikas
Parishad’ & ‘Head of Department’ means ‘Housing
Commissioner’.
The State Government shall not provide any financial assistance
for the implementation of the said Pension Scheme. C
Contents of the notification shall come into force w.e.f.
January 1, 1996 and such officers and employees of Avas
Evam Vikas Parishad who have retired on or after the said
date shall be benefited with the said decision.
Newly defined Contributory Pension Rules notified by D
the State Government shall be applicable to those
employees who have joined Parishad services on April 01,
2005 or onwards.”
(emphasis added)
E
Thus, the new pension scheme was retrospectively brought into
force from 1st January 1996 and was made applicable to the employees
and officers of the Board who retired on or after that date. It is also
recorded therein that the newly defined Contributory Pension Rules
notified by the State Government shall be applicable to those employees
of the Board who have joined the employment from 1st April 2005 F
onwards. Thus, the applicability of the new pension scheme was confined
to the officers and employees who retired on or after 1st January 1996.
The officers and employees appointed on or after 1st April 2005 were
excluded from the applicability of the new pension scheme. We must
note here that the notification dated 19th May 2009 has become final and
G
in none of the petitions which are the subject matter of these appeals,
the same was challenged. In fact, in Writ Petition No.10355 of 2017,
there was a prayer to issue a mandamus to implement the notification.
Moreover, in paragraph 21 of the decision of this Court in Preetam
Singh’s case 1,this Court issued a mandate to act upon the said
notification. The notification dated 19th May 2009 specifically states that H
672 SUPREME COURT REPORTS [2022] 14 S.C.R.
A the orders with respect to the pension/ family pension/ gratuity issued
from time to time by the State Government shall be applicable to the
officers and servants of the Board. Thus, only those employees of the
Board who have retired on or after 1st January 2006 will be entitled to
the benefit of the new pension scheme and those who are appointed on
or after 1st April 2005 will be governed by another set of Rules as
B
mentioned in the notification dated 19th May 2009.
38. In the Special Leave Petition filed by the State Government
against the judgment of the Allahabad High Court in the case of Preetam
Singh and others, an interim order was passed by this Court on 7th August
2012 which had the effect of staying the judgment of the High Court and
C the notification dated 19th May 2009. The further interim order dated 7th
September 2012 recorded that if the employees of the Board, who have
retired from service, claim Contributory Provident Fund and other retiral
benefits (as per the old scheme), the Board shall pass appropriate orders
granting the benefit under the old scheme. However, it was clarified that
D the said interim order will not come in the way of the respondents before
this Court agitating their claim and supporting the reliefs granted by the
Allahabad High Court. Paragraph 21 of the judgment records that by
the interim order, the notification dated 19th May 2009 was stayed, and
therefore, no one could get pension under the new scheme. Therefore,
the interim order was passed which enabled the employees who had not
E received benefits either under the old scheme or the new pension scheme,
to take benefits under the old scheme. This interim order was made as
no one could get the benefit of the old scheme as a result of the stay
granted to the notification dated 19th May 2009. The interim order dated
7th September was thus applicable only to those employees who had not
F taken benefits under the old scheme till 7th September 2012. Obviously,
those officers and employees of the Board who opted for the old scheme
by filing affidavits in terms of the Office Order dated 16th January 2004
and received the benefits under the old scheme before the interim order
dated 07th September 2012 was passed, are disentitled to claim pension
under the new pension scheme. Those officers and employees of the
G Board who opted to take benefits under the old scheme after 07th
September 2012 will be entitled to benefit of the direction issued by this
Court in paragraph 21 of the decision in Preetam Singh’s case1 regarding
the payment of pension under the new pension scheme and the payment
of interest on the differential amount.
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 673
[ABHAY S. OKA, J.]
39. The State Government issued two Office Memoranda on 08th A
December 2008. The first was regarding the revision of pension/ gratuity/
family pension and commutation with effect from 1st January 2006 on
the basis of recommendations of the U.P. Pay Committee, 2008. The
said order specifically recorded that it will not apply to local bodies and
public enterprises. The second Office Memorandum dated 08th December
B
2008 was issued for applying revision of pension and family pension in
respect of the employees who have retired prior to 1st January 2006.
Obviously, the second Office Memorandum is not relevant as the new
pension scheme of the Board was made applicable to those who retired
on or after 1st January 2006 as provided in the notification dated 19th
May 2009. The first Office Memorandum dated 08th December 2008 C
which excluded the officers and employees of the Board was challenged
belatedly for the first time in 2016 in Writ Petition No.126445 of 2016.
We may note here that the Board’s notification dated 19th May 2009
was issued in the exercise of Regulation making power under clause (f)
of sub-section (1) of Section 95 of the 1965 Act which provided that
D
orders issued by the State Government from time to time with respect to
pension/ family pension/ gratuity shall be applicable to the officers and
employees of the Board. No part of the regulations framed by the Board
on 19th May 2009 was ever challenged. Therefore, the officers and
employees of the Board who were the beneficiaries under the notification
dated 19th May 2009 were bound by the first Memorandum dated 08th E
December 2008 and the orders passed from time to time by the State
Government with regard to pension and family pension. Moreover, revised
pension was granted to the State Government employees as the
recommendations of U.P Pay Committee, 2008 were made applicable
to them. The said recommendations were applied to the employees of
F
the Board on 14th January 2010. We may note here that the Allahabad
High Court, by the impugned judgment, has not set aside or modified the
Office Memorandum dated 08th December 2008.
40. On 16th October 2009, the State Government issued an order
making applicable revised pay structure in terms of the report of the 7th
U.P. Pay Committee, 2008 to the public enterprises and corporations G
subject to the terms and conditions incorporated therein. The Board, by
a letter dated 30th November 2009, informed the State Government of
its decision to apply the revised pay structure. It was sought to be argued
by some of the respondents that the order dated 14th January 2010 relates
to pension. In fact, it only deals with the applicability of the revised pay H
674 SUPREME COURT REPORTS [2022] 14 S.C.R.
A structure to the employees and officers of the Board. By the order dated
14th January 2010, the State Government communicated its decision to
allow the Board to apply the revised pay structure on a notional basis
with effect from 1st January 2006 in the pay band and grade pay in the
revised pay structure as per the table enclosed to the Government Order
dated 16th October 2009. The said order recorded that the benefit of pay
B
structure shall be granted with immediate effect to the officers and
employees of the Board by calculating the benefit on a notional basis
with effect from 1st January 2006. The Office Order was issued by the
Board on 23rd January 2010 for implementation of the aforesaid order
dated 14th January 2010. The meaning of the order dated 16th January
C 2010 was that the actual benefit of the revised pay structure will be
available immediately from that date by calculating the pay on a notional
basis in terms of the revised pay structure with effect from 1st January
2006. In other words, the order dated 14th January 2010 made it clear
that the officers and employees of the Board will not be entitled to revised
pay from 1st January 2006 till 14th January 2010 and that they will get the
D
benefit of revised pay only from 14th January 2010. But, while calculating
the revised pay with effect from 14th January 2010, the benefit of the
revised pay structure was to be notionally provided from 1st January
2006. Thus, the pay fixation as of 14th January 2010 must be made by
notionally granting the benefit of the new pay structure with effect from
E 1st January 2006. The communication dated 15th January 2011 of the
State Government addressed to the Housing Commissioner of the Board
records that the officers and employees of the Board will not be entitled
to arrears of revised pay for the period from 1st January 2006 to 13th
January 2010. None of these orders of 16th October 2009, 14th January
2010, and 15th January 2011 were concerning pension. These orders
F
deal only with the grant of a revised pay structure. But, the computation
of pension has to be made on the basis of the applicable pay structure.
Hence, those who retired on or after 1st January 2006 and those who
were entitled to benefit of the new pension scheme under the notification
dated 19th May 2009 will be benefitted from the revised pay structure to
G the extent that their pension will have to be calculated on the basis of
revision of pay structure on notional basis from 1st January 2006.
41. On 05th May 2015, the State Government issued another order
regarding pensionary benefits to the officers and employees of the Board
in terms of which Office Order dated 13th May 2015 was issued. The
H gist of the said order dated 05th May 2015 is as under :
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 675
[ABHAY S. OKA, J.]
(i) Such staff of U.P. Avas and Vikas Parishad whose A
recruitment was done on or before 31 March 2005 and
who have not retired till date, will be entitled to pension;
(ii) Such staff of U.P. Avas and Vikas Parishad who had retired
and had taken all the benefits under the C.P.F. Scheme
after getting retired, will not be entitled to pension; B
(iii) Such staff of U.P. State Avas and Vikas Parishad whose
recruitment was done on or after 1st April 2005 will not be
entitled get the pension; and
(iv) In the light of the order of this Court in Preetam Singh’s
case, the 9% interest is not payable to any retired staff in C
C.P.F. Scheme. In future, if the question of paying interest
to any staff member arises, then the Board will bear the
said expense by itself and no claim can be made from the
government.
The directions in the above terms were incorporated in the D
consequential order issued by the Board on 13th May 2015. Notification
dated 19th May 2009 issued by the Board clearly provides that all the
officers and employees who retired on or after 1st January 2006 will be
entitled to benefit of the new pension scheme but those who were
employed on or after 1st April 2005 will be entitled to benefits under the
E
newly defined Contributory Pension Rules of the State Government. To
that extent, clause (i) of the Government Order dated 5th May 2015 will
require modification. Even clause (ii) will require clarification in terms
of this Judgment. Those officers and employees who have already taken
benefit of the old scheme before 07th September 2012 by giving
undertakings will not get the benefit of the new pension scheme but F
those who have taken the benefit of the old scheme after the date of the
interim order dated 7th September 2012 will be entitled to take benefit of
the new pension scheme. Clause (iii) of the order means that in view of
the notification dated 19th May 2009, those who are appointed on or
after 1st April 2005 will not get the benefit of the new pension scheme
G
under the said notification. As regards clause (iv), interest will be payable
in terms of the decision of this Court in Preetam Singh’s case1, only to
those employees and officers who had not taken benefit of the old scheme
before the interim order dated 07th September 2012 was passed by this
Court. Interest in terms of the decision of this Court will be payable on
differential amounts, to those who have taken benefits under the old H
676 SUPREME COURT REPORTS [2022] 14 S.C.R.
A scheme after 07th September 2012. To the above extent, the directions
of this Court issued in Preetam Singh’s case1 will have to be clarified.
ARREARS OF PAY IN TERMS OF REVISED PAY
STRUCTURE
42. Now, the other issue which survives is whether the officers
B and employees are entitled to arrears of pay as per the revised pay
structure for the period between 1st January 2006 to 13th January 2010.
The impugned judgment proceeds on the footing that the order of the
State Government directing that the officers and employees of the Board
will get the benefit of the new pay structure notionally from 1st January
2006 and actually from 14th January 2010 is issued in the exercise of
C power under Section 2(1) of 1975 Act and Section 92(2) of the 1965
Act. Therefore, the High Court held that the State Government could
not have issued the said direction regarding the determination of conditions
of service as the determination of the conditions of service was not a
function of the Board.
D 43. As far as the applicability of the pay structure to the employees
and officers of the Board is concerned, there is no material placed on
record to show that the Regulation making power under Section 95 was
at all exercised by the Board regarding applying revised pay structure
applicable to the State Government employees to its own employees. All
E that the Board did was to implement the order of the State Government
dated 14th January 2010 by granting a revised pay structure to its
employees. The said order is based on the order of the State Government
issued on 16th October 2009 by which a decision was taken to apply the
revised pay structure applicable to the State Government employees to
the employees of public sector enterprises on the terms and conditions
F incorporated therein. As noted earlier, by exercising the Rule making
power under clause (nn) of sub-section 2 of Section 94 of the 1965 Act,
the State Government could have always determined the pay scales of
the officers and employees of the Board. If it is held that the State
Government had no power to issue the orders dated 16th October 2009
and 14th January 2010, the employees of the Board will not get the benefit
G
of the revised pay structure made applicable to the Government
employees as the Board has not framed the Regulations under clause
(f) of sub-section (1) of Section 95 of the 1965 Act providing for the
grant of revised pay structure to the employees. Surprisingly, in paragraph
22 of the impugned judgment, the High Court has held that the orders
H dated 16th October 2009 and 14th January 2010 would have no applicability
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 677
[ABHAY S. OKA, J.]
in the matter of laying down the conditions of service of the employees A
of the Board. If this finding is upheld, the employees of the Board will be
completely deprived of the benefit of the revised pay structure as there
is no Regulation made by the Board operating in the field. Hence, the
employees of the Board will be entitled to the revised pay structure in
terms of the said orders as clarified by the further order dated 15th
B
September 2011.
44. The grant of arrears from 1st January 2006 till 14th January
2010 will involve huge financial implications for the Board. Financial
constraint is a valid ground for denying arrears as per the revised pay
structure. The decision to provide the benefit of a higher pay structure
to the officers and employees of the Board was taken by the State C
Government subject to the condition of not paying arrears for the period
between 1st January 2006 and 14th January 2010. Therefore, we cannot
approve the direction issued by the High Court under the impugned
judgment to pay arrears of wages as per the new pay structure for the
period from 1st January 2006 to 14th January 2010. D
45. Hence, our conclusions are as under :
(i) We uphold the decision of this Court in Preetam Singh’s
case1 with a modification that the State Government can
always exercise the powers under clause (nn) of sub-section
(1) Section 94 of the 1965 Act for determining the conditions E
of service of the officers (other than the Housing
Commissioner) and employees of the Board. If such power
is exercised, those provisions of the Regulations framed
under clause (f) of sub-section (1) of Section 95 which are
repugnant to the Rules, shall be void;
(ii) All the officers and employees of the Board who have not F
received the benefit of the old scheme till 07th September
2012 and have retired on or after 1st January 2006 shall be
entitled to benefit of the new pension scheme as per the
notification dated 19th May 2009 issued by the Board
provided they are otherwise eligible. However, the officers G
and employees appointed on or after 1st April 2005 will be
governed by the newly defined Contributory Pension Rules
notified by the State Government;
(iii) Those officers and employees of the Board who have retired
on or after 1st January 2006 and who have not received
H
678 SUPREME COURT REPORTS [2022] 14 S.C.R.
A benefits under the old scheme till date shall be entitled to
interest as directed by this Court in paragraph 21 of the
decision in Preetam Singh’s case1. Even those officers
and employees who are entitled to benefit of the new pension
scheme in terms of the notification dated 19th May 2009
and who have taken benefits under the old scheme pursuant
B
to the interim order dated 07th September 2012, will be
entitled to interest on differential amounts, as directed in
terms of paragraph 21 of the decision of this Court in
Preetam Singh’s case1;
(iv) Those officers and employees of the Board who have
C accepted the benefit under the old scheme before 7th
September 2012 after giving an undertaking in terms of the
Office Order dated 16th January 2004 shall not be entitled
to the benefit of the new pension scheme made applicable
as per the notification dated 19th May 2009;
D (v) While calculating the pension amount payable to those who
are entitled to the new pension scheme in terms of the
notification dated 19th May 2009, the benefit of notional
pay fixation in terms of the revised pay structure with effect
from 1st January 2006 shall be provided; and
E (vi) All the officers and employees of the Board who are entitled
to benefit of the revised pay structure in terms of the
Government Order dated 14th January 2010 shall be provided
the said benefit within a period of three months from today,
if not provided earlier. While extending the said benefit,
their pay shall be notionally determined as per the revised
F pay structure with effect from 1st January 2006. However,
they shall not be entitled to arrears of salary as per the
revised pay structure from 1st January 2006 till 14th January
2010. However, in the cases of the employees and officers
who have already received the arrears, no recovery
proceedings shall be initiated against them.
G
The impugned judgment and order stands modified in terms of the
above conclusions. The civil appeals are disposed of accordingly with
no order as to costs.
Ankit Gyan Appeals disposed of.
(Assisted by : Aarsh Choudhary, LCRA)
H
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