1. Dispute over entitlement of statutory Board employees to pensionary benefits despite specific regulatory exclusions and the legality of directing the State to amend such regulations. (Para 1 )
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2023 Supreme(SC) 242
SUPREME COURT OF INDIA
Dinesh Maheshwari, Sanjay Kumar, JJ.
STATE OF ORISSA & ANR. - APPELLANT(S)
VERSUS
ORISSA KHADI AND VILLAGE INDUSTRIES BOARD KARMACHARI SANGH & ANR. - RESPONDENT(S)
CIVIL APPEAL NO. 6944 OF 2015
Decided On : 17-03-2023
Important Points
A writ of mandamus cannot be issued to compel the State to amend statutory regulations to grant pensionary benefits where existing service rules explicitly deny them. Pension is a right only when provided by rules; it cannot be claimed as a right in the absence of such provisions.
Subject
Service Law - Pension
Act Referred
Headnote
PENSION - EMPLOYEES OF ORISSA KHADI AND VILLAGE INDUSTRIES BOARD - ENTITLEMENT - SERVICE CONDITIONS GOVERNED BY REGULATIONS FRAMED UNDER ORISSA KHADI AND VILLAGE INDUSTRIES BOARD ACT, 1955 - REGULATION 52 SPECIFICALLY PROVIDING FOR NO PENSION - EMPLOYEES NOT ENTITLED TO PENSION - DIRECTIONS ISSUED BY HIGH COURT TO STATE GOVERNMENT TO AMEND REGULATION 52 AND EXTEND PENSIONARY BENEFITS TO EMPLOYEES OF BOARD - NOT SUSTAINABLE - IMPUGNED ORDERS SET ASIDE.
Fact of the Case:
Orissa Khadi and Village Industries Board established under Orissa Khadi and Village Industries Board Act, 1955 - Board's employees' service conditions governed by Regulations framed under Act - Regulation 52 specifically providing for no pension - Employees not entitled to pension - High Court directed State Government to amend Regulation 52 and extend pensionary benefits to employees of Board - State Government challenged High Court's order.
Finding of the Court:
High Court's direction to State Government to amend Regulation 52 and extend pensionary benefits to employees of Board not sustainable - Regulation 52 specifically providing for no pension - Employees not entitled to pension - High Court erred in issuing directions contrary to Regulation 52 - Impugned orders set aside.
Issues: Whether employees of Orissa Khadi and Village Industries Board entitled to pension - Whether High Court erred in directing State Government to amend Regulation 52 and extend pensionary benefits to employees of Board.
Ratio Decidendi: Employees of Orissa Khadi and Village Industries Board not entitled to pension - Regulation 52 of Regulations framed under Orissa Khadi and Village Industries Board Act, 1955 specifically providing for no pension - High Court erred in issuing directions contrary to Regulation 52 - Impugned orders set aside.
Final Decision: Appeal allowed - Impugned orders set aside - Writ petition filed by employees of Board dismissed.
Legal Category Hierarchy
- constitutional law
- administrative law
- labour and employment law
Advocates appeared:
For the Appellant(s) : Mr. Shibashish Misra, AOR
For the Respondent(s): Ms. Filza Moonis, AOR Mr. A.K. Behra, Sr. Adv. Mr. Vijay K Verma, Adv. Mr. Rajat Srivastava, Adv. Mr. V. K. Verma, AOR
For the Appellant(s) : Mr. Shibashish Misra, AOR
For the Respondent(s): Ms. Filza Moonis, AOR Mr. A.K. Behra, Sr. Adv. Mr. Vijay K Verma, Adv. Mr. Rajat Srivastava, Adv. Mr. V. K. Verma, AOR
Table of Contents
2. Whether pension is a claimable right regardless of regulatory prohibitions and if the High Court can issue mandamus to amend statutory regulations based on parity with government employees. (Para 2 )
3. The Board is a distinct corporate entity; regulatory exclusions of pension are binding unless declared invalid; mandamus cannot compel the State to amend statutory regulations. (Para 14 , 15 , 16 , 17 , 19 , 21 , 22 )
4. A writ of mandamus cannot be issued to direct the State to amend statutory regulations to grant benefits specifically excluded by those regulations. (Para 19 , 21 )
5. Appeal allowed; High Court orders set aside; writ petition dismissed. (Para 23 )
6. Is pension considered a bounty or a legal right?
Pension is not a bounty or a matter of grace but a hard-earned benefit and a right to property. However, this right must flow from the applicable rules and service conditions; it cannot be claimed as a right if the rules specifically exclude it. (Para 14 )
7. Can a court issue a writ of mandamus to compel the State to amend statutory regulations?
No, a writ of mandamus cannot be issued to direct the State Government to carry out a particular amendment to statutory regulations to grant benefits, as this enters the arena of policy decisions and legislative functions. (Para 19 , 21 )
8. Does being an instrumentality of the State automatically entitle employees to the same benefits as government servants?
No. A statutory Board, as a separate corporate entity, can have distinct service conditions. Even if it is an instrumentality of the State, it does not merge with the government, and its specific regulations governing retiral benefits must be upheld. (Para 16 )
9. Can the Supreme Court use Article 142 to grant benefits that violate statutory provisions?
No. Extraordinary powers under Article 142 of the Constitution cannot be exercised to issue directions that violate existing statutory provisions, as sympathy or sentiment cannot override legal rights. (Para 22 )
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
