THE STATE OF BIHAR & ANR.versusDR. SACHINDRA NARAYAN & ORS.

748                       [2019]REPORTS
                SUPREME COURT    1 S.C.R. 748                [2019] 1 S.C.R.


A                       THE STATE OF BIHAR & ANR.
                                         v.
                     DR. SACHINDRA NARAYAN & ORS.
                          (Civil Appeal No. 884 of 2019)
B                           JANUARY 30, 2019
                  [DR. DHANANJAYA Y CHANDRACHUD
                        AND HEMANT GUPTA, JJ.]
              Anugraha Narayan Sinha Institute of Social Studies Act,
      1964:
C
              ss. 6, 8, 9 and 10 – Payment of Pension – To the employees of
      the Institute incorporated under the Act – Responsibility to pay –
      Whether on State Government – As per resolution dated 15.02.1985,
      the Board of the institute implemented retiral benefits which were to
      be paid by the Institute from its own resources – Pension was paid
D     to the employees after the resolution, but was stopped from January
      2014 – Writ petition seeking direction for payment of pension and
      arrears thereof – Petition dismissed by High Court holding that
      State was not obliged to pay the pension in view of the resolution –
      In intra-court appeal Division Bench of High Court held that the
      State was obliged to pay the pension – On appeal, held: The
E
      resolution of the Board of the Institute to implement the retirement
      benefit scheme from its own resources will not bind the State
      Government to pay the amount of pension – The provision of payment
      of pension in the Budget of the State Government was a voluntary
      act, and not enforceable by a Writ of Mandamus – Release of grant
F     is in the discretion of the grantor and cannot be forced by the grantee
      – Obligation to bear the amount of pension by the State Government
      is not mandated either by s. 8 or s. 9 of the Act – Payment of pension
      in the past, will not confer an enforceable right in favour of the
      Institute or the employees.
G             Administrative Law:
             Legitimate Expectation – Held: Legitimate expectation is one
      of the grounds of judicial review, but unless a legal obligation exists,
      there cannot be legitimate expectation – It is not a wish or a desire
      or a hope and hence cannot be claimed as a right.
H
                                        748
    THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN                         749


      Allowing the appeal, the Court                                    A
      HELD: 1. The resolution of the Board of the Institute to
implement a retirement benefit scheme from its own resources
will not bind the State Government to pay the amount of pension
to the employees of the Institute. The employees of such
Institute cannot be treated at par with the employees of the State      B
Government nor the State can be burdened with the responsibility
to pay pension to the employees of the Institute. [Para 23][762-
E-F]
       2. Section 6 of the Anugraha Narayan Sinha Institute of
Social Studies Act, 1964 empowers the Board to create posts             C
and to hold, control and administer its property and the funds,
but the post carrying an emolument of rupees one thousand per
month or more cannot be created without the previous approval
of the State Government. Though the proviso to Section 6(2) of
the Act requires approval of the State Government in respect of
creation of post carrying pay of more than Rs.1000/-, but the           D
intention is that any financial expenditure of recurring nature
would require the approval of the State Government. Therefore,
if the amount of pension exceeds rupees one thousand per month,
the same could not be claimed from the State Government as a
right without approval. The State Government cannot be called           E
upon to bear the burden of the pension as such scheme was not
approved or even sought for. The provision of payment of pension
in the Budget of the State Government is a voluntary act not
enforceable by a writ of mandamus. The release of grant is in
discretion of the grantor and cannot be forced by the grantee.
[Para 15][758-A-D]                                                      F

       3. It is true that in certain financial years as per documents
on record, the amount of pension was specifically mentioned while
granting grant to the Institute, but such amount is in discretion
of the State and cannot be enforced by a writ of mandamus. There
is no obligation on the State to disburse the grant towards the         G
pension amount in terms of the Act or the Rules or even in terms
of the resolution of the Board. [Para 16][758-E-F]
      4. Sub-Section (1) of Section 8 of the Act mandates the State
Government to contribute a sum of rupees two lacs in each
financial year for the maintenance of the Institute, whereas, sub-      H
750            SUPREME COURT REPORTS                      [2019] 1 S.C.R.


A     Section (2) empowers the State Government to contribute from
      time to time, such additional sums as it may deem fit for special
      items of research or education work, publication, buildings and
      for proper maintenance and development of the Institute. Such
      payment for the special projects, is in discretion of the State
      Government in view of the object for which the grant is to be
B
      disbursed, but sub-Section (2) does not include disbursement of
      the amount of pension as the contribution is for limited purpose
      which is not recurring in nature. [Para 17][758-F-H]
            5. The money contributed to the Institute by the State
      Government is one source of the fund of the Institute. Section
C     9(3) of the Act provides that the funds shall be applied towards
      meeting the expenses of the Institute including expenses
      incurred in exercise of its powers and discharge of its functions
      under the Act. Therefore, the retirement pension scheme, at best
      can be treated to be a part of obligation of utilization of funds of
D     the Institute but such obligation to bear the amount of pension
      fund is not on State Government as it is not mandated either by
      Section 8 or Section 9 of the Act. [Para 18][759-A-B]
            6. It is not correct to say that the State Government has
      provided funds for payment of pension for the last many years,
E     therefore, the Institute and the employees of the Institute have
      legitimate expectation to receive the amount of pension. A pious
      hope even leading to moral obligation cannot amount to a
      legitimate expectation. The legitimacy of an expectation can be
      inferred only if it is founded on the sanction of law or custom or
      an established procedure followed in regular and natural
F     sequence. [Paras 19, 20][759-C-D]
            Union of India & Ors. v. Hindustan Development
            Corporation & Ors. (1993) 3 SCC 499 : [1993] 3 SCR
            128; Ram Pravesh Singh and Others v. State of Bihar
            and Others (2006) 8 SCC 381 : [2006] 6 Suppl. SCR
G           512 – relied on.
                             Case Law Reference
            [1993] 3 SCR 128                 relied on      Para 20
            [2006] 6 Suppl. SCR 512          relied on      Para 21
H
    THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN                               751


        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 884 of                 A
2019.
      From the Judgment and Order dated 13.03.2018 of the High
Court of Judicature at Patna in LPA No. 1018 of 2017.
       Ms. Meenakshi Arora, V.N. Sinha, Sr. Advs., Ms. Abha R. Sharma,
D.S. Pramar, Ms. Sujeeta Srivastava, Saurabh Shandilya,                       B
A. Lakshminarayanan, Kripa Shankar Prasad, Ms. J. Priyadarshini, Advs.
for the appearing parties.
        The Judgment of the Court was delivered by
       HEMANT GUPTA, J. 1. The present appeal is directed against             C
an order passed by the Division Bench of the High Court of Judicature
at Patna on 13.03.2018 whereby the Writ Petition was allowed directing
the appellant to provide financial assistance for payment of the arrears
as well as current pension to the employees of the Anugraha Narayan
Sinha Institute of Social Studies, Patna (Institute).
                                                                              D
       2. The Institute is incorporated by the Anugraha Narayan Sinha
Institute of Social Studies Act, 1964, (Act). The Institute has a perpetual
succession and a common seal. The Chairman of the Board of Control
is a nominee of the State Government. The State Government is also to
nominate two persons of eminence in consultation with the Chairman;
whereas, the others are ex-officio members such as Vice-Chancellor of         E
Patna University, another Vice-Chancellor to be nominated by the State
Government other than that of Patna University in rotation in alphabetical
order as per names of Universities; two representatives of the Indian
Council of Social Science Research, New Delhi; one representative of
the University Grants Commission; one faculty member not below the            F
rank of a Professor and a Secretary to the State Government in the
Department of Education and in the Department of Finance.
       3. In terms of Section 6 of the Act, the Board is the supreme
governing body of the Institute and is to exercise all the powers of the
Institute. Section 8 mandates the State Government to contribute a sum
                                                                              G
of rupees two lacs in each financial year for the maintenance of the
Institute and such other sums as it may deem fit for special items of
research or education work, publication, buildings and proper maintenance
and development of the Institute. Section 9 of the Act provides for
establishment of Institute Fund, whereas, Section 10 deals with the budget
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752            SUPREME COURT REPORTS                              [2019] 1 S.C.R.


A     of the Institute. Section 16 of the Act empowers the Board to make
      rules not inconsistent with the provisions of the Act, whereas, Section 17
      empowers the Board to make regulations consistent with the Act and
      the Rules framed thereunder. The relevant provisions of the Act read
      as under:
B           “6. Functions of the Board. – (1) The Board shall be the
            supreme governing body of the Institute and shall exercise all the
            powers of the Institute.
            (2) Subject to the provisions of this Act the Board shall, in particular-
            (a) hold, control and administer the property and the funds of the
C           Institute;
            (b) determine the form, provide for the custody and regulate the
            use of the common seal of the Institute;
            (c) determine and regulate all matter concerning the Institute;
D           (d) administer any funds placed at the disposal of the Board for
            specific purposes;
            (e) create posts and appoint officers and other employees of the
            Institute and define their duties and provide for the filling of
            temporary vacancies:
E
            Provided that no post the total emolument of which exceeds Rs.
            1,000 per month shall be created without the previous sanction of
            the State Government;
            (f) have power to accept transfers on behalf of the Institute of
            any movable or immovable property to and for the purposes of
F           the Institute.
                                xxx      xxx       xxx
            8. Payment to Institute. - (1) The State Government shall
            contribute to the institute a sum of two lakhs of rupees in each
G           financial year for the maintenance of the institute.
            (2) The State Government may contribute from time to time such
            additional sums to the Institute as it may deem fit for special items
            of research or educational work, publication, buildings and for the
            proper maintenance and development of the Institute.
H
THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN                             753
             [HEMANT GUPTA, J.]

 9. The Institute Fund. - (1) There shall be established a Fund         A
 to be called the Anugraha Narayan Sinha Institute Fund which
 shall be vested in the Institute to which shall be credited-
 (a) the balance, if any, standing to the credit of the Anugraha
 Narayan Sinha Institute of Social Studies, Patna, on the date of
 commencement of this Act;                                              B
 (b) all moneys contributed to the Institute by the State Government;
 (c) all moneys received by or on behalf of the Institute from the
 Central Government;
 (d) all moneys received by or on behalf of the Institute by way of     C
 grants, gifts, donations, benefactions, bequests or transfers;
 (e) all interests and profits arising from any transaction in
 connection with any money belonging to the Institute;
 (f) proceeds from the sale of the journals, pamphlets and books;
 and                                                                    D
 (g) all moneys received by the Institute in any other manner or
 from any other source.
 (2) All moneys credited to the Fund shall be deposited or invested
 in such manner as the Institute may, with the approval of the
 State Government, decide.                                              E

 (3) The Fund shall be applied towards meeting the expenses of
 the Institute including expenses incurred in the exercise of its
 powers and discharge of its functions under this Act.
 10. Budget. - (1) The Director shall, on or before the tenth day       F
 of August each year, cause to be prepared and laid before the
 Board, in such form as may be prescribed by the Board, the budget
 estimate of the income and expenditure of the Institute for the
 next financial year.
 (2) The Board shall, as soon as may be after the tenth day of          G
 August but not later than the first day of the following September,
 examine and approve the estimate with or without modification
 as it may deem fit and shall forthwith submit a copy thereof to the
 State Government.

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754            SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A           (3) The Board may from time to time during the financial year
            reduce the amount of any item of budget grant or transfer such
            amount or a portion thereof to any other item of budget grant:
            Provided that the Board shall have no power to transfer any non-
            recurring grant for recurring expenditure:
B           [Provided further that the Board shall have no power to transfer
            from one item to another item an amount exceeding 20 per cent
            of the original grant under any item.]
                               xxx      xxx     xxx

C           12. Accounts and audit. - (1) Subject to any rules made by the
            State Government in this behalf, the accounts of receipts and
            expenditure of the Institute shall be kept in such manner and in
            such form as the Board may from time to time prescribe.
            (2) The Board shall, as soon as may be after closing its annual
D           accounts, prepare an annual statement of accounts in such form
            as the State Government may from time to time prescribe and
            forward the same to the Accountant-General, Bihar, by such date
            as the State Government may, in consultation with the Accountant-
            General, Bihar, determine.
            (3) The accounts of the Institute shall be audited by the Accountant-
E
            General, Bihar, or some other officer appointed by him in this
            behalf and the Board shall take suitable action on the matters
            arising out of the audit report.
            (3A) The State Government may call upon the Institute to adopt
            concurrent audit by the Chief Controller of Accounts and Audit of
F
            the State Government.
            (4) The Board shall forward the annual accounts of the Institute
            together with the audit report thereon to the State Government
            and the State Government shall cause the same to be laid before
            the Legislature of the State.”
G
                               xxx      xxx     xxx
             4. In terms of Section 16 of the Act, the Anugraha Narayan Sinha
      Institute of Social Studies, Rules 1966 (Rules) were framed by the Board.
      “Pay” is defined in Rule 2(xii), whereas Rule 9 provides for maintenance
H
    THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN                                755
                 [HEMANT GUPTA, J.]

of Institute’s provident fund and Rule 19 provides for amendment of the        A
Rules at any time by 2/3 majority of the members at the meeting of the
Board.
       5. In terms of Section 17 of the Act, the Anugraha Narayan Sinha
Institute of Social Studies, Patna Regulation, 1966 (Regulations) have
been framed, which inter-alia empowers the Board to sanction Dearness          B
Allowance; House Rent Allowance and also the service conditions of
the employees of the Institute. Regulation 9 empowers the Board to
create such posts as may be necessary and may fix scale of pay and
allowances for posts subject to Section 6 of the Act. In terms of Clause
16 of the Regulations, Staff Service Condition Rules have been framed,
however, such Rules do not provide for payment of pension.                     C

      6. The Board in its meeting held on 15.02.1985 passed the
following resolution:
      “The Board accepted the recommendation of the Committee on
      Retirement Benefits dated 11.2.85 and decided that the scheme            D
      as prepared may be implemented, provided that the scheme as
      reported would be operated from Institute resources and that no
      separate grant would be sought for it from the
      Government…………. “
       7. In this factual background, 27 petitioners (respondents 1 to 27      E
herein), in the present appeal invoked the writ jurisdiction of the High
Court for a direction to the respondents (appellants herein) to pay the
arrears as well as current pension on the month to month basis which
has been stopped from the month of January 2014. The Writ Petition
was dismissed on 20.06.2017 holding that the resolution of the Board
dated 15.02.1985 was inconsistent with the Act and Rules, therefore,           F
the writ petitioners were not vested with any legal right. Correspondingly,
there is no legal obligation on the State to pay and that a writ of mandamus
cannot be issued to the authority of the State to act contrary to law. It
was also held that, the payment of pension/family pension by the State
for the last few years is an illegality, the same cannot be directed to be     G
perpetuated by an order of the Court.
       8. However, an intra Court appeal was allowed on 13.03.2018
noticing that the Government of Bihar has earmarked grants under the
pension head during 2004-05 to 2010-11. It was held that though the
recommendations of the Committee on retirement benefits may be
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756            SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A     implemented, provided that the scheme is operated from the Institute’s
      resources, but the fact remains that the liability on account of pension
      was duly mentioned in the annual budget of the State Government,
      therefore, such release of the funds by the State Government will be in
      the nature of grant as envisaged under Section 9(g) of the Act. The
      State Government would be estopped from saying that it never considered
B
      payment of pension as a responsibility after about 30 years. The
      Government approved the budget and provided additional funds to meet
      the liabilities, therefore, it would amount to consideration and acceptance
      of responsibility, may be in form of grants only.
             9. Learned Counsel for the appellant argued that the resolution of
C     Board was that the Retirement Benefit Scheme was to be operated
      from the resources of the Institute and that “no separate grant would be
      sought for it from the State Government”. Therefore, the financial burden
      of the Retirement Benefit Scheme cannot be foisted upon the State.
      The pension was resolved to be borne by the Institute from its own
D     funds. Still further, such resolution of the Board was not approved by the
      State Government creating extra financial liability on the State.
             10. It is argued that in terms of Section 8 of the Act, the State
      Government is to contribute a sum of rupees two lacs in each financial
      year or such other sums for research or education work, publication,
E     buildings and for proper maintenance and development of the Institute.
      Such provision does not contemplate payment of recurring expenditure
      of pension which is not contemplated by Section 8 of the Act. The
      money contributed by the State Government is one source of the Institute
      funds. The Board has limited power to transfer funds from one item to
      another item exceeding 20 per cent of the original grant under any item.
F     The accounts of the Institute are required to be audited. Thus, it is
      contended that though the officers of the State are members of the
      Board and that such fact will make the Institute a “State” within the
      meaning of Article 12 of the Constitution. But that fact will not make the
      Institute as extension of the State Government, as the Institute is a
G     creation of a separate juristic entity under the State Statute. The rules
      framed in terms of Section 16 of the Act again do not provide for Provident
      Fund/Gratuity and for pension. It is argued that the Board as an
      independent juristic entity is empowered to prepare its budget but in
      terms of the resolution of the Board, financial burden of the pension
      scheme cannot be passed on to the State Government.
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    THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN                                757
                 [HEMANT GUPTA, J.]

       11. It is further pointed out that the State Government has disbursed   A
grant from the year 2002-03 uptill 2010-11 which included the break up
of pension but it was a mistake, which was rectified from the year 2011-
12. It is contended that the State Government can grant funds under the
heads (1) Grant-in-aid for Salary, (2) Grant-in-aid for creation of
infrastructure, (3) Grant-in-aid other than salary and infrastructure.
                                                                               B
Therefore, some amount released towards pension in certain years
including in terms of an order of this Court will not create any right in
favour of the writ petitioners as the role of the State Government is to
give grants as provided in Section 6 of the Act but such grant cannot be
claimed as matter of right.
       12. On the other hand, the learned counsel for the Institute-           C
respondent No. 28, submitted that the State Government has been releasing
Grant-in-aid including amount towards pension since the Board has
passed the resolution in the year 1985. Reference was made to
communications dated 09.09.2010 and 29.03.2005. It is also pointed out
that the Chief Minister of the State Government presided over the meeting      D
of the Board on 28.05.1985, wherein, the poor financial condition of the
Institute was discussed. It was resolved that the three alternative schemes
of retirement benefits, i.e. (i) Contributory Provident Fund; (ii)
Contributory Provident Fund-cum- Gratuity; (iii) General Provident Fund-
cum-Pension-cum-Gratuity including benefit of commutation of pension
will at all times be the same as provided for in the statutes and Rules of     E
Patna University from time to time.
       13. It is contended that contribution towards the amount of pension
has created legitimate expectation of the employees of the Institute that
they are entitled to pension at par with the employees of Patna University.
Thus, the employees have legitimate expectations of receipt of pension         F
from the State Government. Therefore, the order passed by the Division
Bench of the High Court does not call for any interference.
       14. On the other hand, Mr. V. N. Sinha, learned senior counsel
appearing for the respondent Nos. 1 to 27 submitted that the State
Government is bound to disburse the amount necessary for payment of            G
pension as was being done from the date when the resolution was passed
in the year 1985. Therefore, it is too late for the State to turn around to
take a plea that the responsibility of the pension amount is not of the
State Government.
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758             SUPREME COURT REPORTS                            [2019] 1 S.C.R.


A            15. Section 6 of the Act empowers the Board to hold control and
      administer the property and the funds of the Institute. The Board is
      further empowered to create posts and appoint officers with a condition
      that a post of which emoluments exceed rupees one thousand per month
      shall not be created without the previous sanction of the State
      Government. Therefore, the Board has freedom to create posts and to
B
      hold, control and administer its property and the funds, but the post carrying
      an emolument of rupees one thousand per month or more cannot be
      created without the previous approval of the State Government. Though
      the proviso to Section 6(2) of the Act requires approval of the State
      Government in respect of creation of post carrying pay of more than
C     Rs.1000/-, but the intention is that any financial expenditure of recurring
      nature would require the approval of the State Government. Therefore,
      if the amount of pension exceeds rupees one thousand per month, the
      same could not be claimed from the State Government as a right without
      approval. The State Government cannot be called upon to bear the burden
      of the pension as such scheme was not approved or even sought for.
D
      The provision of payment of pension in the Budget of the State
      Government is a voluntary act not enforceable by a writ of mandamus.
      The release of grant is in discretion of the grantor and cannot be forced
      by the grantee.
             16. It is true that in certain financial years as per documents on
E     record, the amount of pension was specifically mentioned while granting
      grant to the Institute, but such amount is in discretion of the State and
      cannot be enforced by a writ of mandamus. There is no obligation on
      the State to disburse the grant towards the pension amount in terms of
      the Act or the Rules or even in terms of the resolution of the Board.
F             17. Sub-Section (1) of Section 8 of the Act mandates the State
      Government to contribute a sum of rupees two lacs in each financial
      year for the maintenance of the Institute, whereas, sub-Section (2)
      empowers the State Government to contribute from time to time, such
      additional sums as it may deem fit for special items of research or
G     education work, publication, buildings and for proper maintenance and
      development of the Institute. Such payment for the special projects, is
      in discretion of the State Government in view of the object for which the
      grant is to be disbursed, but sub-Section (2) does not include disbursement
      of the amount of pension as the contribution is for limited purpose which
      is not recurring in nature.
H
       THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN                             759
                    [HEMANT GUPTA, J.]

       18. The money contributed to the Institute by the State Government      A
is one source of the fund of the Institute fund. Section 9(3) of the Act
provides that the funds shall be applied towards meeting the expenses of
the Institute including expenses incurred in exercise of its powers and
discharge of its functions under the Act. Therefore, the retirement
pension scheme, at best can be treated to be a part of obligation of
                                                                               B
utilization of funds of the Institute but such obligation to bear the amount
of pension fund is not on State Government as it is not mandated either
by Section 8 or Section 9 of the Act.
       19. The argument of learned counsel for the Institute is that the
State Government has provided funds for payment of pension for the
last many years, therefore, the Institute and the employees of the Institute   C
have legitimate expectations to receive the amount of pension, is again
not tenable.
       20. In the judgment reported as Union of India & Ors. v.
Hindustan Development Corporation & Ors.1, it was held that a pious
hope even leading to moral obligation cannot amount to a legitimate            D
expectation. The legitimacy of an expectation can be inferred only if it
is founded on the sanction of law or custom or an established procedure
followed in regular and natural sequence. It was held: -
       “28. Time is a three-fold present: the present as we experience it,
       the past as a present memory and future as a present expectation.       E
       For legal purposes, the expectation cannot be the same as
       anticipation. It is different from a wish, a desire or a hope nor can
       it amount to a claim or demand on the ground of a right. However
       earnest and sincere a wish, a desire or a hope may be and however
       confidently one may look to them to be fulfilled, they by themselves
       cannot amount to an assertable expectation and a mere                   F
       disappointment does not attract legal consequences. A pious hope
       even leading to a moral obligation cannot amount to a legitimate
       expectation. The legitimacy of an expectation can be inferred
       only if it is founded on the sanction of law or custom or an
       established procedure followed in regular and natural sequence.
                                                                               G
       Again it is distinguishable from a genuine expectation. Such
       expectation should be justifiably legitimate and protectable. Every
       such legitimate expectation does not by itself fructify into a right
       and therefore it does not amount to a right in the conventional
       sense.
1
    (1993) 3 SCC 499                                                           H
760      SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A                        xxx      xxx     xxx
      33. On examination of some of these important decisions it is
      generally agreed that legitimate expectation gives the applicant
      sufficient locus standi for judicial review and that the doctrine of
      legitimate expectation is to be confined mostly to right of a fair
B     hearing before a decision which results in negativing a promise or
      withdrawing an undertaking is taken. The doctrine does not give
      scope to claim relief straightaway from the administrative
      authorities as no crystallised right as such is involved. The
      protection of such legitimate expectation does not require the
      fulfilment of the expectation where an overriding public interest
C     requires otherwise. In other words where a person’s legitimate
      expectation is not fulfilled by taking a particular decision then
      decision-maker should justify the denial of such expectation by
      showing some overriding public interest. Therefore even if
      substantive protection of such expectation is contemplated that
D     does not grant an absolute right to a particular person. It simply
      ensures the circumstances in which that expectation may be denied
      or restricted. A case of legitimate expectation would arise when a
      body by representation or by past practice aroused expectation
      which it would be within its powers to fulfil. The protection is
      limited to that extent and a judicial review can be within those
E     limits. But as discussed above a person who bases his claim on
      the doctrine of legitimate expectation, in the first instance, must
      satisfy that there is a foundation and thus has locus standi to make
      such a claim. In considering the same several factors which give
      rise to such legitimate expectation must be present. The decision
F     taken by the authority must be found to be arbitrary, unreasonable
      and not taken in public interest. If it is a question of policy, even
      by way of change of old policy, the courts cannot interfere with a
      decision…..
                         xxx      xxx     xxx
G     35….It can therefore be seen that legitimate expectation can at
      the most be one of the grounds which may give rise to judicial
      review but the granting of relief is very much limited. It would
      thus appear that there are stronger reasons as to why the legitimate
      expectation should not be substantively protected than the reasons
H     as to why it should be protected. In other words such a legal
       THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN                                761
                    [HEMANT GUPTA, J.]

         obligation exists whenever the case supporting the same in terms         A
         of legal principles of different sorts, is stronger than the case
         against it. As observed in Attorney General for New South Wales
         case: “To strike down the exercise of administrative power solely
         on the ground of avoiding the disappointment of the legitimate
         expectations of an individual would be to set the courts adrift on a
                                                                                  B
         featureless sea of pragmatism. Moreover, the notion of a legitimate
         expectation (falling short of a legal right) is too nebulous to form a
         basis for invalidating the exercise of a power when its exercise
         otherwise accords with law.” If a denial of legitimate expectation
         in a given case amounts to denial of right guaranteed or is arbitrary,
         discriminatory, unfair or biased, gross abuse of power or violation      C
         of principles of natural justice, the same can be questioned on the
         well-known grounds attracting Article 14 but a claim based on
         mere legitimate expectation without anything more cannot ipso
         facto give a right to invoke these principles. It can be one of the
         grounds to consider but the court must lift the veil and see whether
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         the decision is violative of these principles warranting
         interference…..”
       21. In a judgment reported as Ram Pravesh Singh and Others
v. State of Bihar and Others2, the Court was examining the decision of
the State Government that the assets and the liabilities of a Society should
be transferred to the State Electricity Board, but not the services of the        E
employees to the Board. It was the said decision of the State which
came up for consideration before this Court. It was held that the Board
never agreed nor decided to take services of any of the employees of
the Society. Therefore, it cannot be said that there was any regularity or
predictability or certainty in action which can lead to a legitimate              F
expectation. It was held:-
         “22. The Board had never agreed nor decided to take services of
         any of the employees of the Society. In fact, it is not even the
         case of the appellants that the Board had at any point of time held
         out any promise or assurance to absorb their services. When the          G
         licence of the Society was revoked, the State Government
         appointed a committee to examine the question whether the Board
         can take over the services of the employees of the Society. The
         Committee no doubt recommended that the services of eligible
2
    (2006) 8 SCC 381
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762             SUPREME COURT REPORTS                          [2019] 1 S.C.R.


A            and qualified employees should be taken over. But thereafter the
             State Government considered the recommendation and rejected
             the same, apparently due to the precarious condition of the Board
             which itself was in dire financial straits, and was contemplating
             retrenchment of its own employees. At all events, any decision by
             the State Government either to recommend or direct the absorption
B
             of the Society’s employees was not binding on the Board, as it
             was a matter where it could independently take a decision. It is
             also not in dispute that for more than two decades or more, before
             1995, the Board had not taken over the employees of any private
             licensee. There was no occasion for consideration of such a
C            course. Hence, it cannot be said that there was any regularity or
             predictability or certainty in action which can lead to a legitimate
             expectation.”
             22. In view of the above judgments, legitimate expectation is one
      of the grounds of judicial review but unless a legal obligation exists,
D     there cannot be any legitimate expectation. The legitimate expectation
      is not a wish or a desire or a hope, therefore, it cannot be claimed or
      demanded as a right. The payment of pension in the past will not confer
      an enforceable right in favour of the Institute or its employees.
             23. Thus, the resolution of the Board of the Institute to implement
E     a retirement benefit scheme from its own resources will not bind the
      State Government to pay the amount of pension to the employees of the
      Institute. The employees of such Institute cannot be treated at par with
      the employees of the State Government nor the State can be burdened
      with the responsibility to pay pension to the employees of the Institute.
      Consequently, we find that the order of the Division Bench is not legally
F     sustainable. Hence, we allow the appeal and dismiss the Writ Petition.
             The pending applications, if any, shall stand disposed of.


      Kalpana K. Tripathy                                           Appeal allowed.
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