STATE OF UTTAR PRADESHversusPREETAM SINGH AND OTHERS

                       [2014] 10 S.C.R. 910


A                  STATE OF UTTAR PRADESH
                                 v.
                 PREETAM SINGH AND OTHERS
                  (Civil Appeal No. 6307 of 2010)
                      SEPTEMBER 23, 2014
B
     [JAGDISH SINGH KHEHAR AND ARLIN MISHRA, JJ.]

        Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam,
    1965:
c
       s.95(1) - Power of Vikas Parishad to make Regulations
  - Implementation of Pension/Family Pension and Gratuity
  Scheme by Vikas Parishad for its employees - Vikas
  Parishad is vested with the right to make regulations so as to
D extend to its employees such a scheme.
         Uttar Pradesh State Control Over Public Corporations
    Act, 1975:

         s.2(1) - Directions by State Government in regard to
E   'questions of policies' of Vikas Parishad having regard to
    "discharge of its functions" - Conditions of service of
    employees do not constitute the functions of Vikas Parishad,
    and directions contemplated u/s 2(1) do not extend to the
    directions issued by State Government restraining the Vikas
F   Parishad from implementing the Pension/Family Pension and
    Gratuity Scheme.

      The instant appeal arose out of the order of the High
  Court quashing the orders of the State Government
  withdrawing- the permission granted to the U.P. Avas
G Evam Vikas Parishad to implement the Pension/Family
  Pension and Gratuity Scheme.

        Dismissing the appeal, the Court

H                               910
 STATE OF UTIAR PRADESH v. PREETAM SINGH                   911

     HELD: 1.1. The directions by the State Government as          A
contemplated u/s 2(1) of the Uttar Pradesh State Control
Over Public Corporations Act, 1975 could be issued to the
Vikas Parishad only in respect of questions of policy
having a nexus to the "discharge of its functions", as
stipulated in s.15 of the Uttar Pradesh Avas Evam Vikas            B
Parishad Adhiniyam, 1965. [para 12] [920-F, G]
     1.2. The State of Uttar Pradesh had the right to issue
directions only in respect of the functions assigned to the
Vikas Parishad u/s 15 of the 1965 Act. The conditions of
service of employees, in the considered view of this C
Court, do not constitute the functions of the Vikas
Parishad, and as such, the directions contemplated u/s
2(1) of the 1975 Act, do not extend to the directions issued
by the State of Uttar Pradesh in the impugned orders
dated 13.9.2005 and 12.7.2007. [para 12] [927-D-E]           D
     1.3. Under clause (d) of s. 93(1 ), the financial liability
transferable to the State Government in the event of
dissolution of the Board, is limited of the fund and
properties of the Board vested in it. Thus, the State of
Uttar Pradesh in case of dissolution of the Board, would           E
only bear the responsibility of discharging the liabilities,
to the extent of the properties of the Board which stand
transferred to it. Therefore, no financial liability would
stand transferred to the State Government, even in the
event of the dissolution of the Vikas Parishad. [para 13]          F
[925-D-F]
     1.4. In view of clause (f) of s.95 (1) read with clause
(I) of s.95(1), the Vikas Parishad is vested with the right
to make regulations, so as to extend to its employees a
scheme in the nature of Pension/Family Pension and                 G
Gratuity Scheme i.e., a scheme similar to the one framed
by the Vikas Parishad on 19.5.2009. [para 14] [927-C]
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6307 of 2010.                                                      H
    912      SUPREME COURT REPORTS               [2014] 10 S.C.R.


A        From the Judgment and Order dated 16.01.2009 in
    Respondent/employee's Writ Petition No. 582 (S/B) of 2000
    of the High Court of Judicature at Allahabad, Lucknow Bench.

        P.N. Misra, Abhisth Kumar, Som Raj Choudhury for the
B   Appellant.

        Rakesh Dwivedi, Jaideep Gupta, Vishwajit Singh, Pankaj
    Singh, Abhindra Maheshwari, Ajit Sharma, Upander Mishra,
    Temple Law Firm for the Respondents.

c         The Judgment of the Court was delivered by

         JAGDISH SINGH KHEHAR, J. 1. The Uttar Pradesh
    Avas Evam Vikas Parishad (hereinafter referred to as the
    'Vikas Parishad') is a corporate body. It came into existence,
    consequent upon the promulgation of the Uttar Pradesh Avas
0
    Evam Vikas Parishad Adhiniyam, 1965 (hereinafter referred to       .
    as the '1965 Act'). The employees of the VikaS"Parishad were
    members of a Contributory Provident Fund Scheme. The Vikas
    Parishad desired to grant its employees better retiral benefits.
E   A proposal was made, to extend pensionery benefits to the
    employees of the Vikas Parishad, in place of the existing
    Contributory Provident Fund Scheme. In furtherance of the
    aforesaid objective, a resolution dated 21.2.1995 was passed,.
    proposing to replace the existing Contributory Provident Fund
    Scheme, to the Pension/Family Pension and Gratuity Scheme.
F
    Before implementation of the resolution dated 21.2.1995, the
    Vikas Parishad considered it expedient to consult the State
    Government. In response to the afore-mentioned consultation,
    the State Government through a communication dated
G   16.5.1996 approved the afore-stated substitution conditionally.
    The conditions depicted in the aforesaid approval dated
    16.5.1996, are being extracted hereunder:

          "Kindly refer to your letter no. 213/P-1 dated
          24.4.1995 on the aforesaid subject. In this regard, !
H
 STATE OF UTTAR PRADESH v. PREETAM SINGH                  913
         [JAGDISH SINGH KHEHAR, J.]
    have been directed to say that State Government has           A
    no objection to the proposal of implementing
    Pension/Family Pension & Gratuity Scheme in place
    of C.P.F. Scheme in Uttar Pradesh Avas Evam Vikas
    Parishad. But subject to condition that no financial
    assistance will be given by the State Government for          B
    implementation of this Scheme and this Scheme will
    be run by the Board itself from the revolving funds
    created by it. "

                                         (emphasis is ours)
                                                                  c
     2. Consequent upon the receipt of the aforesaid approval
from the State Government, the Vikas Parishad circulated a
letter dated 9.7.1996 requiring its employees to submit their
options, as to whether they were desirous of shifting to the
Pension/Family Pension and Gratuity Scheme, in place of the       D
existing Contribution Provident Fund Scheme.

     3. At the instant juncture, a very vital letter came to be
issued by the State Government on 30.09.1997. Relevant
extract of the aforesaid letter is being reproduced hereunder:    E

    "I have been directed to say that in order to
    implement the subject scheme, it is not necessary to
    initiate any proceedings required under Clause (c) of
    the Employees Provident Fund & Miscellaneous
    Provisions Act, 1952 of the Central Government.               F
    Because Avas Evam Vikas Parishad is governed by
    the provisions of Uttar Pradesh Avas Evam Vikas
    Parishad Act, 1965 and specific provisions to this
    effect have been laid down in Section 95 of the said
    Act. 1965 according to which necessary proceedings            G
    are to be initiated for obtaining option from the
    employees for accepting and/or not accepting the
    proposed Pension Scheme."

                                          (emphasis is ours)      H
    914      SUPREME COURT REPORTS                [2014] 10 S.C.R.


A   A perusal of the aforesaid letter reveals, that even though the
    State Government had granted conditional approval to the
    Pension/Family Pension and Gratuity Scheme, through its
    communication dated 16.5.1996, the State government
    expressed the opinion, that the Vikas Parishad did not need
B   the approval of the State Government for the implementation
    of the Pension/Family Pension and Gratuity Scheme. Insofar
    as the instant aspect of the matter is concerned, the State
    Government in its letter dated 30.09.1997 clearly informed the
    Vikas Parishad, that it had the power to deal with the above
C   issue of its own, under Section 95 of the 1965 Act.

         4. Based on the conditional approval granted by the State
    Government through its communication dated 16.5.1996, and
    also the clarificatory letter issued by the State Government on
    30.09.1997, the Vikas Parishad passed a resolution on
D   5.11.1997 approving the Pension/Family Pension and Gratuity
    Scheme. In granting the aforesaid approval, the Vikas Parishad
    followed the pensionery scheme applicable to civil servants of
    the State of Uttar Pradesh.

E         5. Before the resolution dated 5.11.1997 could be
    implemented, the Director General of Bureau of Public
    Enterprises addressed a communication dated 19.11.1997 to
    the State Government, informing it, that the Vikas Parishad had
    not sought its approval before the implementation of the
F   Pension/Family Pension and Gratuity Scheme. In sum and
    substance, the Director General of Bureau of Public Enterprises
    informed the State Government, that the action taken by the
    Vikas Parishad in implementing the above scheme without its
    approval, was not in consonance with law. On the receipt of the
G   letter from the Director General of Bureau of Public Enterprises,
    the State Government by its order dated 26.11.1997 stayed the
    implementation of the Pension/Family Pension and Gratuity
    Scheme. Whilst taking the above action, the State Government
    constituted a Sub-Committee to examine the varicity and
H   viabili~y of the conversion of the Contributory Provideot Fund
 STATE OF UTTAR PRADESH v. PREETAM SINGH                     915
         [JAGDISH SINGH KHEHAR, J.]
Scheme to the Pension/Family Pension and Gratuity Scheme,            A
not only with reference to employees of the Vikas Parishad, but
with reference to employees of other Statutory Corporations,
Development Authorities and Nigams in the State of Uttar
Pradesh. The aforesaid Sub-Committee, under the
Chairmanship of the Chief Secretary of the State, held a             B
meeting on 3.10.1998. In the above meeting, Sub-Committee
arrived at the conclusion, that there was no justification for the
implementation of the Pension Scheme in any Statutory
Corporations, Development Authorities or Nigams in the State
of Uttar Pradesh. It was also the view of the Sub-Committee          c
that the existing Contributory Provident Fund Scheme, should
be continued for all the employees, for the time being.

     6. Even though the above recommendation was made by
the Sub-Committee, yet the Sub-Committee on 2.2.1999                 D
expressed the view, that the aforesaid general determination
recorded in its meeting dated 3.10.1998, should not be made
applicable to the Vikas Parishad. Taking into consideration the
excellent financial condition of the Vikas Parishad, the Sub-
committee observed that the Vikas Parishad should be
permitted to take steps to introduce the Pension/Family              E
Pension and Gratuity Scheme. It was however clearly indicated,
that the Pension/Family Pension and Gratuity Scheme if
introduced, for employees of the Vikas Parishad, the same
would not create any financial liability on the State Government.
                                                                     F
      7. Based on the recommendations of the sub-Committee
(in its meeting dated 2.2.1999), the State Government passed
an order dated 14.9.1999, withdrawing its ban/restriction on the
implementation of the Pension/Family Pension and Gratuity
Scheme. Relevant extract of the letter dated 14.9.1999 is being      G
reproduced below:

     "In this regard. I have been directed to say that government
     after due consideration in the matter has decided to
     withdraw its bar/restriction imposed on the implement?tion      H
    916       SUPREME COURT REPORTS                  [2014] 10 S.C.R.


A         of the subject Pension Scheme for the employees of the
          Board. subject to following conditions -

          (1) Implementation of the Pension Scheme in the Board
          will be completely different from the pension being given
          to the employees of the State Government and this
B
          Scheme will be developed in the form of a distincU
          separate trust based on C.P.F. and such a trust will be run
          and operated by a Third Party Pension Fund Manager.
          This Pension Scheme shall not have any connection/
          relation with the Pension Scheme of the government
c         servants in any manner whatsoever. This pension scheme
          will be completely autonomous and will depend on the
          financial condition of the Pension funds;

          (2) Money which will be deposited on this head/count, will
D         not be spend for any other counUhead meaning thereby
          that money so deposited on this count will be irreversible
          for any other purposes and it will be operated by the Trust;

          (3) Pension Scheme will be maintained financially on the
E         basis of contributions made by the Board towards C.P.F.
          and no money. apart from above. will be paid either by the
          Board or by the State Government. Please note that if this
          Scheme closes down due to any reason or due to non-
          availability of pension funds. then in that eventuality neither
F         the Government nor the Board will be responsible for such
          a closure;

          (4) Trust will be fully responsible for all the financial and
          economical aspects of the funds of this Scheme, based
          upon arrangements made with the Third Party Pension
G         Fund Manager and Government/Board will not be
          responsible for any loss whatsoever;

          (5) Representatives nominated by the Secretary, Housing
          and Secretary, Finance, will be amongst members of the
H
 STATE OF UTIAR PRADESH v. PREETAM SINGH                   917
         [JAGDISH SINGH KHEHAR, J.]
    Trust which will be created for the implementation of the      A
    Pension Scheme of the Board;

    (6) Commissioner, Housing and Financial Controller of the
    Board will be personally responsiblefor ensuring strict
    compliance of the aforesaid conditions; and
                                                                   B
    (7) These orders are being issued on the basis of consent
    accorded by the Finance Department vide its D.O. No.140/
    99-C-Ten (1) dated 9.8.199."

    (emphasis is ours)                                             c
      8. The aforesaid position was sought to be endorsed by
the State Government on 7.5.2003, wherein the State
Government reiterate? the position, that no financial assistance
will be provided by the State Government to the Vikas Parishad     D
for implementation of the Pension/Family Pension and Gratuity
Scheme.

     9. All of a sudden, the State Government issued yet
another letter dated 13.9.2005 staying the earlier Government
order dated 7.5.2003 (relevant extracts wherefrom have been        E
reproduced hereinabov~). Thereupon, through a further
communication dated 12.7.2007, the State government
withdrew its approval altogether. Through the above letter dated
12.7.2007, the $tate Government clearly informed the Vikas
                             1
Parishad, that it could not implement the Pension/Family           F
Pension and Gratuity Scheme. It further informed the Vikas
Parisilad, that employees of Public Enterprises, Statutory
Corporations, Development Authorities and Nigams, who are
covered by the Employees Provident Fund and Miscellaneous
Pensions Act, 1952 of the Central Government, and those to         G
whom different Contributory Provident Fund Schemes were
already applicable, were liable to be governed by the· said
provisions and schemes.

                                                                   H
    918       SUPREME COURT REPORTS               (2014] 10 S.C.R.


A         10. The denial of permission by the State Government, as
    also, the incorporations of the conditions mentioned above,
    was sought to be assailed by the employees of the Vikas
    Parishad, before the High Court of Judicature at Allahabad
    (Lucknow Bench)(hereinafter referred to as the 'High Court'),
B   by filing Writ Petition No. 582(SB) of 2000. The aforesaid writ
    petition was allowed by the impugned judgment dated
    16.1.2009. The orders issued by the State Government dated
    13.9.2005 and 12.7.2007 were expressly quashed. A writ in the
    nature of mandamus was issued by the High Court to the Vikas
c   Parishad, requiring it to implement the Pension/Family Pension
    and Gratuity Scheme. In compliance with the aforesaid direction,
    the Vikas Parishad implemented the Pension/Family Pension
    and Gratuity Scheme, through a notification dated 19.5.2009.
    Relevant extract of the aforesaid notification is being
o   reproduced hereunder:

          "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 1996) has
E         decided that the Pension/Family Pension and Gratuity
          admissible to the officers and employees of State
          Government, which is governed by the following rules,
          schemes and Government orders shall also be admissible
          (excluding Pension commutation) to the officers and
F         employees of the U.P. Avas Evam Vikas Parishad :

     1.    Civil Service Regulations as applicable   As amended
           in U.P.

     2.    Uttar Pradesh Liberalized Pension           -do-
G
           Rules, 1961.

     3.    U.P. Retirement Benefit Rules, 1961        -do-

     4.    New Family Pension Scheme, 1965            -do-
H
 STATE OF UTTAR PRADESH v. PREETAM SINGH                      919
         [JAGDISH SINGH KHEHAR, J.]
 5.    All orders of finance department of U.P.                       A
       Government asr elated to Pension/Family
       Pension/Gratuity                         -do-

 6.    Newly defined Contribtory rules according-do-
       to notification no. Sa-3-379/das-2005-301 (9)/2003 dated       B
       March 28, 2005 applicable to officers and employees of
       State Govt., who have joined services on April 01, 2005
       or onwards

      The orders with respect to the Pension/Family Pension/          C
      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."

It would be pertinent to mention, that the aforesaid notification
was expressly extended to such employees of the Vikas                 D
Parishad, who were in service on 1.1.1996. The Pension/
Family Pension and Gratuity Scheme in terms of the aforesaid
notification, would be applicable only till the introduction of the
newly defined Contributory Fund Rules framed by the State
Government, as were applicable to employees of the Vikas              E
Parishad who had entered its service w.e.f. 1.4.2005.

     11. In raising a challenge to the impugned judgment
rendered by the High Court on 16.1.2009, it was the vehement
contention of the learned counsel for the State of Uttar Pradesh,
                                                                      F
that the scheme could not have been formulated, and given
effect to in the absence of an express approval by the State
Government. Insofar as the instant contention is concerned,
learned counsel for the appellant placed reliance on the Uttar
Pradesh State Control Over Public Corporations Act, 1975. Our
pointed attention was invited to Section 2(1) thereof, which is       G
being extracted hereunder:

      "2(1) Every statutory body (by whatever name called),
      established or constituted under any Uttar Pradesh Act.
                                                                      H
    920       SUPREME COURT REPORTS                [2014] 10 S.C.R.


A         excepting Universities governed by the Uttar Pradesh
          State Universities Act, 1973, as re-enacted and emaneded
          by the Uttar Pradesh University (Re-enactment and
          Amendemnt) Act, 1974, shall. in the discharge of its
          functions. be guided by such directions on questions of
B         policies. as may be given to it by the State Government.
          notwithstanding that no such power has expressly been
          conferred on the State Government under the law
          establishing or constituting such statutory body."

                                                  (emphasis is ours)
c
  Based on the aforesaid provisions, it was the submission of
  the learned counsel for the appellant, that the State of Uttar
  Pradesh, through its communications dated 13.9.2005 and
  12.7.2007, must be deemed to have issued directions to the
D Vikas Parishad, restraining it from implementing the Pension/
  Family Pension and Gratuity Scheme. The aforesaid directions,
  according to the learned counsel, were binding on the Vikas
  Parishad.

E      12. We have given our thoughtful consideration to the first
  contention advanced at the hands of the learned counsel for the
  appellant. There can be no doubt that it is open to the State
  Government to issue directions of questions of policy to all
  Public Corporations in the State of Uttar Pradesh, in furtherance
F of the mandate contained in Section 2(1) of the 1975 Act. It
  would however be pertinent to mention that the above directions
  could be issued only in respect of questions of policy having a
  nexus to the "discharge of its functions". Insofar as the Vikas
  Parishad is concerned, we are of the view that the functions of
G the Vikas parishad are relatable only to the functions stipulated
  in Section 15 of the 1965 Act. Section 15 afore-mentioned is
  being reproduced hereunder:

          "15. Functions of the Board. - (1) Subject to the provisions
          of this Act and the rules and regulations, the functions of
H         the B9ard shall be -
STATE OF UTTAR PRADESH v. PREETAM SINGH                      921
        [JAGDISH SINGH KHEHAR, J.]
  (a) to frame and execute housing and improvement                   A
  schemes and other projects.

  (b) to plan and co-ordinate various housing activities in the
  State and to ensure expeditious and efficient
  implementation of housing and improvement schemes in               B
  the State;

  (c) to provide technical advice for and scrutinise various
  projects under housing and improvement schemes
  sponsored or assisted by Central Government or the State
  G~rn~~                                                             C

  (d) to assume management of such immovable properties
  belonging to the State Government as may be transferred
  or entrusted to it for this purpose;
                                                                     D
  (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 w0rkshops and stores for the               E
  manufacture and stockpiling of building materials;

  (g) on such terms and conditions as may be agreed upon
  between the Board and the State Government, to declare
  houses constructed by it in execution of any scheme to be          F
  houses subject to the U.P. Industrial Housing Act, 1955
  (U.P. Act No.XXlll of 1955);

  (h) to regulate building operations;

  (i) to improve and clear slums;                                    G

  0) to provide roads, electricity, sanitation, water supply and
  other civic amenities and essential services in areas
  developed by it;
                                                                     H
    922       SUPREME COURT REPORTS                 [2014] 10 S.C.R.


A         (k) to acquire movable and immovable properties for any
          of the purposes before mentioned;

          (I) to raise loans from the market, to obtain grants and
          loans from the State Government, the Central Government,
B         local authorities and other public corporations, and to 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
c         property or contribute towards the cost of any such
          investigation, examination or survey made by any local
          authority or the State Government;

          (N) to levy betterment fees ;
D
          (o) to fulfill any other obligation imposed by or under this .
          Act or any other law for the time being in force ; and

          (p) to do all such other acts and things as may be
          necessary for the discharge of the functions before
E         mentioned.

          (2) Subject to the provisions of this Act and the rules and
          regulations, the Board may undertake, where it deems
          necessary, any of the following functions, namely -
F
          (a) to promote research for the purpose of expendinting
          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;

H         (d) to co-ordinate, simplify and standardise the production
                           .
 STATE OF UTTAR PRADESH v. PREETAM SINGH                      923
         [JAGDISH SINGH KHEHAR, J.]
    of building materials and to encourage and organise the           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       B
    area, to establish, maintain and operate any transport
    service,, to construct, widen, strengthen or otherwise
    improve roads and bridges and to give financial help to
    others for such purposes;

    (f) to do all such other acts and things as may be necessary C
    for the discharge of the functions before mentioned."

In our view, the State of Uttar Pradesh, had the right to issue
directions only in respect of the functions assigned to the Vikas
Parishad under Section 15 of the 1965 Act.The conditions of D
service of employees, in our considered view, do not constitute
the functions of the Vikas Parishad, and as such, we are
satisfied that the directions contemplated under Section 2(1)
of the 1975 Act, do not extend to the directions issued by the
State of Uttar Pradesh in the impugned orders dated 13.9.2005 E
and 12.7.2007. We therefore find no merit in the first contention
advanced by the learned counsel for the appellant.

      13. Insofar as the second contention is concerned, it was
the vehement contention of the learned counsel for the appellant,     F
that the State of Uttar Pradesh is to shoulder the financial
liabilities of the Vikas Parishad, in the event of its dissolution.
Insofar as the instant aspect of the matter is concerned, learned
counsel for the appellant placed reliance on Section 93 of the
1965 Act. The said provision is being extracted hereunder:
                                                                      G
     93. Dissolution of the Board.-(1) If the State Government
     is of opinion that the Boards has failed to carry out its
     functions under this Act or that for any other reason, it is
     not necessary to continue the Board, it may, by notification
                                                                      H
    924       SUPREME COURT REPORTS                  [2014] 10 S.C.R.


A         in the Gazette, dissolve the Board from such date as may
          be specified in the notification.

          (1) Upon the publication of a notification under sub-section
          (1) dissolving the Board-
B         (a) the Adhyaksh, the Housing Commissioner and all
          members of the Board shall, as from the date of
          dissolution, vacate their offices;

          (b) all the powers and functions which may, by or under this
c         Act, be exercised and performed by or on behalf of ~he
          Board or the Housing Commissioner shall, as from the
          date of dissolution, be exercised and performed by, and
          all subsisting contracts, agreements and other instruments
          to which the Board or the Housing Commissioner is a party
D         or which are in favour of the Board or the Housing
          Co111missioner may be enforced or acted upon, and all
          suits, appeals and other legal proceedings pending by or
          against the Board or the Housing Commissioner rnay be
          contined, prosecuted or enforced, by or against the State
E         Government or such authority or person as it may appoint
          in this behalf;

          (c) the fund of and other properties vested in the Board
          shall vest in the State Government; and
F         (d) all liabilities, legally subsisting and enforceable against
          the Board, shall be enforceable against the State
          Government to the extent of the fund and properties of the
          Board vested in it.

G         (3) Nothing in this section shall affect the liability of the
          State Government in respect of debentures guaranteed by
          it under sub-section (2) of Section 59.

          (4) Notwithstanding anything contained in the foregoing
          provisions of this Action, the State Government may at any
H
 STATE OF UTTAR PRADESH v. PREETAM SINGH                      925
         [JAGDISH SINGH KHEHAR, J.]
    time again establish a Board under Section 3 and appoint          A
    a Housing Commissio11er under Section 7, and thereupon-

    (a) the powers and function as well as the rights and
    liabilities in relation to contracts, agreements and other
    instruments, and suits, appeals and other legal                   B
    proceedings referred to in clause (b) of sub-section (2)
    shall re-vest in the Board or the Housing Commissioner,
    as the case may be ;

    {b) the fund and other properties referred to in clause (c)
    of sub-section (2) remaining with the State Government            C
    after meeting any liabiliti~s referred to in clause (d) thereof
    shall re-vest in the Board."

Having perused Section 93 of the 1965 Act, we are satisfied,
that under clause (d) of Section 93(1 ), the financial liability      o
transferable to the State Government in the event of dissolution
of the Board, is limited of the fund and properties of the Board
vested in it. In other words, the State of Uttar Pradesh in case
of dissolution of the Board, would only bear the responsibility
of discharging the liabilities, to the extent of the properties of    E
the Board which stand transferred to it. Thus viewed, we are
of the opinion that no financial liability would stand transferred
to the State Government, even in the event of the dissolution
of the Vikas Parishad. Accordingly, we find no merit even in
the second contention advanced at the hands of the learned
                                                                      F
counsel for the appellant.

      14. Despite the objections raised by the learned counsel
for the appellant, we shall also venture to determine, whether
the Vikas Parishad was competent to frame regulations,
whereby it could extend the Pension/Family Pension and                G
Gratuity Scheme to its employees. In this behalf, it is relevant
to examine Section 95 of the 1965 Act. The aforesaid provision
is being produced hereunder:

     "Section 95. Power to make regulations.-(1 )The Board            H
    926       SUPREME COURT REPORTS                  [2014] 10 S.C.R.


A         may, by notification in the Gazette, make regulation
          providing for-

          (a) the time and place of, and the manner of convening,
          the meeting of the Board and its committees and Avas
          Samitis and their postponement and adjournment;
B
          (b) the procedure and the conduct of business at meetings
          of the Board and of its committees and Avas Samitis;

          ( c) the appointment, constitution and procedure of
C         committees;

          (d) the delegation of powers by the Housing Commissioner
          and officers of the Board;

          (e) the duties of officers and servants of the Board;
D
          (f) the conditions of services of officers and servants of the
          Board;

          (g) the preparation of plans and estimates for works;
E         (h) the preparation of budgets and estimates;

          (i) the authority on which moneys may be paid from the
          Board's fund;

F         0) the manner of publication of public notices;

          (k) the stamping of facsimile of signatures of the Housing
          Commissioner and officers of the Board on notices, bills
          and other documents;

G         (I) the fees payable for copies of documents, estimates
          and plans issued by the Board;

          (m) the management, use and allotment of buildings
          constructed under any housing or improvement scheme;
H
 STATE OF UTTAR PRADESH v. PREETAM SINGH                    927
         [JAGDISH SINGH KHEHAR, J.]
    (n) any other matter which is to be or may be provided for      A
    by regulations under this Act or the rules.

    (2) If any regulations is repugnant to any rule then the rule
    whether made before or after the regulations shall prevail
    and the regulation shall to the extent of the repugnancy be
                                                                    8
    void."

A perusal of clause (f) of Section 95(1 ), with clause (I) of
Section 95(1) would reveal, that the Vikas Parishad is vested
with the right to make regulations, so as to extend to its
employees a scheme in the nature of Pension/Family Pension          C
and Gratuity Scheme i.e., a scheme similar to the one framed
by the Vikas Parishad on 19.5.2009.

    15. For the reasons recorded hereinabove, we find no
merit in this appeal, and the same is accordingly dismissed.        0
      16. It is also necessary for us to determine the
consequence of the State of Uttar Pradesh, having approached
this Court, to assail the impugned judgment dated 16.1.2009.
This Court having entertained the petition filed by the appellant,
passed interim directions on 7.8.2012, which had the effect of E
staying the implementation of the directions issued by the High
Court, namely, of staying the implementation of the notification
dated 19.5.2009. As a result, employees governed by the· ·
notification dated 19.5.2009, were paid their retiral dues under
the Contributory Provident Fund Scheme. Since we have now F
affirmed the impugned judgment of the High Court, dated
16.1.2009, it is apparent that all the eligible employees of the
Vikas Parishad will be governed by the notification dated
19.5.2009. They will therefore be entitled to pensionery benefits
from the date of their retirement. Undoubtedly, they have been G
denied the said retiral benefits, consequent upon the interim
orders passed by this Court, at the behest of the State of Uttar
Pradesh. In the above view of the matter, we direct the Vikas
Parishad to release the pensionery benefits to the retired
                                                                    H
    928      SUPREME COURT REPORTS               [2014] 10 S.C.R.
                                                                       ..
A   employees governed by the notification dated 19.5.2009, with;..,
    three months from today. While determining the pensionery
    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
B   Contributory Provident Fund Scheme, the said employee($) will
    be paid interest on the said amount at the rate of 9% per
    annum. The burden of the aforesaid interest component on the
    differential amount, will be discharged by the Vikas Parishad,
    in the first instance. The same shall, however, be recovered
c   from the State of Uttar Pradesh, who is solely responsible for
    the interest ordered to be paid to the concerned employees.

    Rajendra Prasad                                Appeal dismissed.