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.

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.