1. Dispute concerning the implementation of a new pension scheme and revised pay structure for employees of a statutory board under the Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 )
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2022 Supreme(SC) 1196
SUPREME COURT OF INDIA
SANJAY KISHAN KAUL, ABHAY S. OKA, VIKRAM NATH, JJ.
State of U.P. & Ors. - Appellants
Versus
Virendra Kumar & Ors. - Respondents
Civil Appeal Nos.6622-6623 of 2022
Decided on : 25-11-2022
Important Points
IMPORTANT POINT
Power to control appointment and power to put restrictions are distinct and different from power to determine service conditions of officers and servants of Board.
Power to control appointment and power to put restrictions are distinct and different from power to determine service conditions of officers and servants of Board.
Subject
Judgement - SERVICE CONDITIONS
Act Referred
SERVICE LAW: .
Headnote
Service Law – Service Conditions – Determination of – Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 – Section 7 – Power to control appointment and power to put restrictions are distinct and different from power to determine service conditions of officers and servants of Board – Control of State Government and power to impose restrictions as provided in sub-section (1) of Section 8 will extend to creation of posts of officers and servants of Board – Control can be exercised by directing creation of different categories of posts – Control can be also exercised by determining number of posts of different categories – Power to issue directions vested in State Government can be exercised only for issuing directions confined to questions of policies – Directions can be issued confined to policies concerning discharge of functions of Statutory Body – Directions issued by State Government on questions of policies guide every statutory body in discharge of its functions. (Paras 26, 33 and 45)
Result : Reference answered.
Legal Category Hierarchy
- administrative law
- labor and employment law
Advocates appeared:
For the Appellant(s) :Ms. Aishwarya Bhati, Ld. ASG Mr. V.K. Shukla, Sr. Adv. Ms. Nithin Pavuluri, Adv. Ms. B.L.N. Shivani, Adv. Mr. Rajeev Kumar Dubey, Adv. Mr. Kamlendra Mishra, AOR Mr. Vishwajit Singh, Sr. Adv. Mr. Abhishek Kumar Singh, AOR Ms. Pallavi Baghel, Adv. Ms. Anamika Yadav, Adv. Mr. Pankaj Singh, Adv. For Respondent(s) Mr. Nidhesh Gupta, Sr. Adv. Mr. Nikhil Majithia, AOR Ms. Japneet Kaur, Adv. Ms. Vriti Gujral, Adv. Mr. P. K. Jain, AOR Mr. Saurabh Jain, Adv. Mr. P.K. Goswami, Adv. Mr. S.P. Singh Rathore, Adv. Mr. Vishwajit Singh, Sr. Adv. Mrs. Veera Kaul Singh, Adv. Mr. Pankaj Singh, Adv. Mr. Abhishek Kumar Singh, AOR Ms. Ridhima Singh, Adv.
For the Appellant(s) :Ms. Aishwarya Bhati, Ld. ASG Mr. V.K. Shukla, Sr. Adv. Ms. Nithin Pavuluri, Adv. Ms. B.L.N. Shivani, Adv. Mr. Rajeev Kumar Dubey, Adv. Mr. Kamlendra Mishra, AOR Mr. Vishwajit Singh, Sr. Adv. Mr. Abhishek Kumar Singh, AOR Ms. Pallavi Baghel, Adv. Ms. Anamika Yadav, Adv. Mr. Pankaj Singh, Adv. For Respondent(s) Mr. Nidhesh Gupta, Sr. Adv. Mr. Nikhil Majithia, AOR Ms. Japneet Kaur, Adv. Ms. Vriti Gujral, Adv. Mr. P. K. Jain, AOR Mr. Saurabh Jain, Adv. Mr. P.K. Goswami, Adv. Mr. S.P. Singh Rathore, Adv. Mr. Vishwajit Singh, Sr. Adv. Mrs. Veera Kaul Singh, Adv. Mr. Pankaj Singh, Adv. Mr. Abhishek Kumar Singh, AOR Ms. Ridhima Singh, Adv.
Table of Contents
2. State claims authority to issue directions on service conditions under the 1975 Act and Section 92; employees contend that statutory regulations prevail unless overridden by formal Rules. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 )
3. The court distinguished between statutory functions and administrative powers, noting that service conditions are not functions under Section 15 and cannot be altered by executive directions. (Para 24 , 25 , 26 , 28 , 29 , 30 , 32 )
4. Statutory regulations on service conditions cannot be overridden by executive directions; they can only be nullified by the State Government through the formal Rule-making process under Section 94. (Para 27 , 31 , 33 )
5. Upheld pension eligibility under the 2009 notification; denied arrears of pay for 2006-2010; clarified the State's power to determine service conditions via Rule-making under Section 94. (Para 45 , 46 )
6. Are service conditions of employees considered 'functions' of the Board under Section 15 of the 1965 Act?
No. The court held that while appointments and service conditions are necessary for the efficient performance of functions, they do not constitute the specific statutory functions enumerated in Section 15. (Para 28 , 29 , 30 )
7. Can the State Government override the Board's service condition regulations using directions under Section 92 of the 1965 Act or the 1975 Act?
No. Executive directions under Section 92 or Section 2(1) of the 1975 Act cannot nullify statutory regulations. Such regulations can only be overridden by framing formal Rules under Section 94(2)(nn). (Para 31 , 33 )
8. What is the legal effect of an inconsistency between the Board's Regulations and the State Government's Rules under Section 94?
Rules framed by the State Government under Section 94(2)(nn) prevail over Regulations framed by the Board under Section 95(1)(f). Any provisions of the Regulations repugnant to the Rules are void. (Para 27 , 34 )
JUDGMENT :
ABHAY S. OKA, J.
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., 2014 (15) SCC 774 (Preetam Singh’s case) needs reconsideration. Under Section 3 of the Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 (for short ‘the 1965 Act’), Uttar Pradesh Avas Evam Vikas Parishad (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 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/family pension/gratuity scheme (for short ‘the new pension scheme’). 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 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 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.
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 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 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 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 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, t
