JUDGMENT :

DINESH MAHESHWARI, J.

1. This appeal is directed against the judgment and order dated 20.12.2012 in Writ Appeal No. 268 of 2011 whereby, the Division Bench of the High Court of Orissa has dismissed the intra-court appeal filed by the appellant State of Orissa and has affirmed the order dated 25.10.2010 in W.P. (C) No. 8438 of 2010, as passed by the learned Single Judge of the High Court, holding the employees of the Orissa Khadi and Village Industries Board¹[Hereinafter also referred to as ‘the Board’.] entitled to pension at par with the Government employees and also directing the State Government to amend the applicable regulations accordingly.

2. In this appeal, the appellant State of Orissa has essentially contended that the High Court was not justified in issuing directions contrary to the applicable regulations, which rule out pensionary rights to the employees of the Board in specific terms; and when the provisions contained in the regulations were neither under challenge nor were declared invalid.

3. While embarking upon the questions arising in this appeal, it shall be apposite to take note of the relevant statutory provisions at the outset.

3.1. The Orissa Khadi and Village Industries Board was established under the Orissa Khadi and Village Industries Board Act, 1955²[Hereinafter also referred to as ‘the Act of 1955’/’the Act’.] with the aim and objective to organize, promote, develop, and regulate Khadi and Village Industries throughout the State of Orissa.

3.2. Section 3 of the Act of 1955 reads as under: -

“3. Incorporation of the Board.-(1) The State Government with effect from such date as they may by notification appoint in this behalf, shall establish for the purpose of this Act a Board to be called the Orissa Khadi and Village Industries Board.

(2) The Board established under Sub-section (1) shall be a body corporate incorporated by its name with perpetual succession and common seal and may sue and be sued in its corporate name and shall be competent to acquire and hold and dispose of property both movable and immovable and to contract and do all things necessary for the purposes of this Act.”

3.3. Section 36 of the Act of 1955 stipulates that the Board may, with previous sanction of the State Government, make regulations consistent with the Act and the rules made thereunder to provide, inter alia, for the remuneration, allowances, and other conditions of service of the staff. It reads as under: -

“36. Regulations.- (1) Subject to the provisions of Section 12 the Board may, with the previous sanction of the State Government by notification, make regulations consistent with this Act and rules made thereunder.

(2) In particular and without prejudice to the generality of the foregoing power, the Board may make regulations providing for –

(a) the procedure and disposal of its business;

(b) remuneration, allowances and other conditions of service of the staff of the Board;

(c) functions and duties of the Staff of the Board;

(d) functions of Committees and the procedure to be followed, by such Committees in the discharge of their functions.”

3.4. In exercise of the powers so vested under Section 36 of the Act of 1955, the Board has made the Orissa Khadi and Village Industries Board Regulations, 1960³[Hereinafter also referred to as ‘the Regulations of 1960’/’the Regulations’.] providing for general conditions of service of its staff, remuneration, allowances, grant of leave, retirement benefits etc.

Regulation 40 of the Regulations of 1960 reads as under: -

“40. General conditions of service.- Unless otherwise provided in these regulations, the rules in the Orissa Service Code, Volume I with all its Appendices, except Appendices 1 to 4, 8 and 12, as amended from time to time by the Government shall apply to the employees of the Board mutatis mutandis. For this purpose, the words “Government”, “Government Servant” and “Head of Department” wherever they occur except in Chapter-I of the Code shall mean “the Board” “t