IMPORTANT POINT
Retirement benefits of employees of Takeover Private Medical College have to be examined in the light of relevant provisions of the Takeover Act. Under Section 6 of Bihar Private Medical College (Takeover) Act, 1977. The respondents are not entitled to claim the benefit of the period of their service while they were under the employment of erstwhile management for the purpose of calculation of their pension and pensionary liabilities.

Headnote:Bihar Private Medical College (Takeover) Act, 1977-Section 6-Determination of terms of the teaching staff and other employees of the college-Respondents retiring after taking over of the college-Retirement benefits given for the period of service from the date of takingover of the college till the date of retirement-Filed petitions claiming benefits from the initial appointment in the college under private management till the date of retirement-High Court allowed following its earlier judgments-Appeal to Supreme Court-Whether High Court should have examined the present dispute with reference to the relevant provisions of the Takeover Act? (Yes)-Whether respondents can claim the benefit of the period of their service while they were under private management? (No)-Whether this judgment will affect the respondents? (No, it will apply prospectively)-No refund will be claimed for any benefit already granted-Appeal allowed accordingly.
       Held : Sub-section (1) of Section 6 of the Act provides in clear and explicit terms that from the date of the notification issued under sub-section (1) all members of the staff employed in the college shall cease to be employees of the college body. The effect of this provision is that the respondents ceased to be employees of the erstwhile management of the college. At the same time, the proviso to the said sub-section (1) declares that the staff employed in the college shall continue to serve in the college on an ad hoc basis till a decision under sub-sections (3) and (4) is taken by the State Government. Therefore, both the respondents continued to serve the college on an ad hoc basis and as a result, whatever the contract of employment which the employees had with the erstwhile Management, came to an end. Thus, from the date of taking over the college, the respondents ceased to be employees of the erstwhile management and they became employees of the State Government on an ad hoc basis. This ad hoc appointment was subsequently regularised and, therefore, they became permanent employees of the State Government. As on the date of taking over the college, the terms of appointment between the erstwhile management and the respondents ceased to exist and they became employees of the State Government on an ad hoc basis, they cannot claim any benefit for the service rendered by them in the college while it was under private management, there being no specific provision to count the previous service to any extent. (Para 7)
       We are, therefore, of the opinion that the respondents are not entitled to claim the benefit of the period of their service while they were under the employment of the erstwhile management for the purpose of calculation of their pension and pensionary liabilities. Consequently, we hold that the findings of the High Court are not sustainable in law. Accordingly, appeals are allowed by setting aside the impugned judgment. The judgment rendered by us will come into effect prospectively i.e. apply to the cases of employees who retire on superannuation after the date of this judgment. The State Government shall not be entitled to claim refund of any pension or pensionary benefits already granted to any employees and also to the respondents. We are giving this direction especially for the reason that the State Government allowed a number of judgments adverse to it to become final and there was consequent uncertainty in legal position. Appeals are allowed by setting aside the judgment. Parties to bear their own cost. (Paras 13 & 14)

JUDGMENT

Phukan, J.-These two appeals by special leave arise from the judgment dated 05-02-1999 of the Patna High Court, Ranchi Bench. Briefly stated facts are as follows:-

2. The MGM Medical College used to be run by a private registered society. The respondents in these two appeals ware employees of the College. By Bihar Private Medical Colleges (Taking Over) Act, 1977 (for short the Act ), the State Government by issuing a notification under sub-section (1) of Section 3 of the Act took over the management of the college on 22nd of January, 1979. In terms of the provisions of the Act both the respondents continued as employees of the college on an ad hoc basis and, thereafter, their services were regularised in terms of Section 6 of the Act. They retired from the service on attaining the age of superannuation and their pension and pensionary benefits were granted, counting the period of service from the date of taking over of the college till the date of retirement. Both the respondents filed two separate writ petitions before the High Court claiming that they are entitled to get the benefit for the period of service from the initial appointment in the college under the private management till their date of retirement. Both the petitions were heard together and by the impugned judgment, writ petitions were allowed and the benefits were directed to be given by the State Government. Hence, the State is in appeal before this Court.

3. From the impugned judgment we find that the matter came up before a learned Single Judge of the High Court who after noticing two conflicting decisions on the subject directed the matter to be placed before the Full Bench after obtaining the order of the Hon ble Chief Justice. In the impugned judgment, the Division Bench was of the opinion that it was not a fit case that may be referred to a Full Bench as the point involved was no longer res integra inasmuch as the question has already been decided in several cases by the Division Bench of this Court. Reference was made by the Division Bench to some earlier judgments of the court. Accordingly, by the impugned judgment, relief as prayed for was granted by allowing both the writ petitions.

4. Mr. Ashok Mathur, learned counsel for the State of Bihar has drawn our attention to some other decisions of the High Court wherein a contrary view was expressed. Therefore, Mr. Mathur has submitted that these conflicting views have to be resolved by this Court so that similar disputes which may come up in future may be decided in terms of law laid down by this Court. The learned counsel has fairly stated that in case the impugned judgment is set aside, State will not ask for refund of any pension or pensionary benefits granted to the employees of the college. In regard to the present appeals, the learned counsel has stated that as there was no stay order by this Court of the impugned judgment, the benefits to both the respondents ought to have been granted and if not granted it will be so done by the State Government and the result of these appeals would not affect their cases

5. We have perused some of the judgments of the High Court, copies of which are on record and we find that High Court has not assigned any reason for counting or refusing to count the period of service for the purpose of pensionary benefit while the employees were serving in the college before it was taken over. In fact no reference was made by the High Court to the provisions of the Act, more particularly Section 6. Therefore, we have to examine the present dispute with reference to the relevant provisions of the Act.

6. Section 6 of the Act deals with the determination of terms of teaching staff and other employees of the medical colleges taken over by the State Government and as the present controversy has turned almost entirely upon the meaning and effect of the provisions of this section, it will be convenient to extract the said section.

"6. Determination of terms of the teaching staff

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