# STATE OF U.P. & ORS v. VIRENDRA KUMAR & ORS

- **Citation:** [2022] 14 S.C.R. 638
- **Court:** Supreme Court of India
- **Decided:** 2022-11-25
- **Case number:** Civil Appeal Nos.6622-6623 of 2022
- **Bench:** Sanjay Kishan Kaul, Abhay S. Oka, Vikram Nath
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-u-p-ors-v-virendra-kumar-ors-35746
- **Pages:** 41

## Headnote

Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 -
s.3, 7, 8, 15, 92, 94(2)(nn) and 95(1)(f) - On 10.02.2020, a Bench
of two judges made reference to a larger Bench to reconsider the
Preetam Singh's case - 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 - Held: The power to determine
the conditions of service of officers and servants of the Board vests
with the Board and, said power can be exercised only by framing
regulations under clause (f) of sub-section (1) of section 95 - Clause
(nn) of sub-section (2) of section 94 confers power of the State
Government to frame Rules in respect of any matter for which
regulations can be framed by the Board - The decision of the Supreme
Court in Preetam Singh's case is upheld with a modification that
State Government can always exercise the powers under clause (nn)
of sub-section (1) Section 94 of the 1965 Act for determining the
conditions of service of the officers (other than the Housing
Commissioner) and employees of the Board - If such power is
exercised, those provisions of the Regulations framed under clause
(f) of sub-section (1) of Section 95 which are repugnant to the Rules,
shall be void - U.P. State Control Over Public Corporations Act,
1975 - s.2.
Disposing of the appeals, the Court
HELD:1. Sub-section (1) of Section 8 of Uttar Pradesh Avas
Evam Vikas Parishad Adhiniyam, 1965 does not provide that the
State Government shall have the power to determine the
conditions of service of officers and employees of the Board. The
power to control the appointment and the power to put restrictions
are distinct and different from the power to determine the service
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conditions of the officers and servants of the Board. The control
of the State Government and the power to impose restrictions as
provided in sub-section (1) of Section 8 will extend to the creation
of posts of officers and servants of the Board. The control can be
exercised by directing the creation of different categories of posts.
The control can be also exercised by determining the number of
posts of different categories. In this context, Sections 94 and 95
of the 1965 Act are also relevant. Under sub-section (1) of Section
94, the State Government retains the general Rule making power
of framing Rules for carrying out the purposes of the Act. Without
prejudice to the generality of the power under sub-section (1),
sub-section (2) of Section 95 lays down the topics and subjects
on which Rule-making power can be exercised. One of the specific
powers conferred by clause (b) of sub-section (2) of Section 94
on the State Government, is of framing Rules for laying down
conditions of service of the Housing Commissioner. Thus, clause
(nn) of sub-section (2) of Section 94 confers power on the State
Government to frame Rules in respect of any matter for which
regulations can be framed by the Board . Clause (f) of sub-section
(1) of Section 95 specifically empowers the Board to frame
Regulations governing conditions of service of officers and
servants of the Board. Under clause (b) of sub-section (2) of
Section 94, the State Government has a power to determine the
conditions of service of the Housing Commissioner. Thus, the
Legislature has specifically incorporated in Section 7 that the
State Government shall have the power to determine the
conditions of service of the Housing Commissioner. However,
such a provision is conspicuously absent in Section 8 dealing with
the appointment of servants and officers of the Board. The reason
is that the power to determine the service conditions of the other
officers and servants has been conferred on the Board which can
be exercised by making Regulations. [Para 26][659-C-G; 660-BH; 661-A-B]
2. In view of sub-section (2) of Section 95 read with clause
(nn) of sub-section (2) of Section 94, Regulations, if any, fram

## Text

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SUPREME COURT REPORTS
[2022] 14 S.C.R.
 [2022] 14 S.C.R. 638
638
STATE OF U.P. & ORS.
v.
VIRENDRA KUMAR & ORS.
(Civil Appeal Nos.6622-6623 of 2022)
NOVEMBER 25, 2022
[SANJAY KISHAN KAUL, ABHAY S. OKA AND
 VIKRAM NATH, JJ.]
Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 -
s.3, 7, 8, 15, 92, 94(2)(nn) and 95(1)(f) - On 10.02.2020, a Bench
of two judges made reference to a larger Bench to reconsider the
Preetam Singh's case - 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 - Held: The power to determine
the conditions of service of officers and servants of the Board vests
with the Board and, said power can be exercised only by framing
regulations under clause (f) of sub-section (1) of section 95 - Clause
(nn) of sub-section (2) of section 94 confers power of the State
Government to frame Rules in respect of any matter for which
regulations can be framed by the Board - The decision of the Supreme
Court in Preetam Singh's case is upheld with a modification that
State Government can always exercise the powers under clause (nn)
of sub-section (1) Section 94 of the 1965 Act for determining the
conditions of service of the officers (other than the Housing
Commissioner) and employees of the Board - If such power is
exercised, those provisions of the Regulations framed under clause
(f) of sub-section (1) of Section 95 which are repugnant to the Rules,
shall be void - U.P. State Control Over Public Corporations Act,
1975 - s.2.
Disposing of the appeals, the Court
HELD:1. Sub-section (1) of Section 8 of Uttar Pradesh Avas
Evam Vikas Parishad Adhiniyam, 1965 does not provide that the
State Government shall have the power to determine the
conditions of service of officers and employees of the Board. The
power to control the appointment and the power to put restrictions
are distinct and different from the power to determine the service
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conditions of the officers and servants of the Board. The control
of the State Government and the power to impose restrictions as
provided in sub-section (1) of Section 8 will extend to the creation
of posts of officers and servants of the Board. The control can be
exercised by directing the creation of different categories of posts.
The control can be also exercised by determining the number of
posts of different categories. In this context, Sections 94 and 95
of the 1965 Act are also relevant. Under sub-section (1) of Section
94, the State Government retains the general Rule making power
of framing Rules for carrying out the purposes of the Act. Without
prejudice to the generality of the power under sub-section (1),
sub-section (2) of Section 95 lays down the topics and subjects
on which Rule-making power can be exercised. One of the specific
powers conferred by clause (b) of sub-section (2) of Section 94
on the State Government, is of framing Rules for laying down
conditions of service of the Housing Commissioner. Thus, clause
(nn) of sub-section (2) of Section 94 confers power on the State
Government to frame Rules in respect of any matter for which
regulations can be framed by the Board . Clause (f) of sub-section
(1) of Section 95 specifically empowers the Board to frame
Regulations governing conditions of service of officers and
servants of the Board. Under clause (b) of sub-section (2) of
Section 94, the State Government has a power to determine the
conditions of service of the Housing Commissioner. Thus, the
Legislature has specifically incorporated in Section 7 that the
State Government shall have the power to determine the
conditions of service of the Housing Commissioner. However,
such a provision is conspicuously absent in Section 8 dealing with
the appointment of servants and officers of the Board. The reason
is that the power to determine the service conditions of the other
officers and servants has been conferred on the Board which can
be exercised by making Regulations. [Para 26][659-C-G; 660-BH; 661-A-B]
2. In view of sub-section (2) of Section 95 read with clause
(nn) of sub-section (2) of Section 94, Regulations, if any, framed
by the Board for determining the conditions of services of its
officers and servants are always subject to the Rules which may
be framed by the State Government by exercising the power
under clause (nn) of sub-section (1) of Section 94. Whenever
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS.
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there is any inconsistency between the Regulations framed under
clause (f) of sub-section (1) of Section 95 and the Rules framed
under clause (nn) of subsection (1) of Section 94, the Rules will
prevail and to that extent, the provisions of the Regulations which
are repugnant to the Rules shall be void. To put it differently, the
power to determine the conditions of service of the officers
(except the Housing Commissioner) and servants of the Board
vests in the Board, and the said power can be exercised only by
framing Regulations under clause (f) of sub-section (1) of Section
95. So long as Rules are not framed by the State Government
under clause (nn) of subsection (1) of Section 95 for overriding
the provisions of the Regulations framed by the Board for
prescribing the service conditions, the provisions of Regulations
shall always govern the field. Except for the exercise of the Rule
making power under clause (nn) of sub-section (1) of Section 94,
there is no specific power conferred under the 1965 Act, or for
that matter under the 1975 Act, on the State Government to nullify
or to override the conditions of service of its officers and servants
determined by the Board by the Regulations framed in the
exercise of powers under clause (f) of sub-section (1) of Section
95. [Para 27][661-C-F]
3. This Court concurred with the view taken by this Court
in Preetam Singh's case and answered as follows:
Q.1 Whether the judgment of this Court in Preetam Singh's
case laying down that conditions of service of officers and
employees do not constitute the functions of the U.P. Avas Evam
Vikas Parishad lays down the correct law more so when the
judgment does not refer to provisions of Sections 8, 92,
94(2)(nn)of the 1965 Act ?
A: The decision lays down the correct proposition of law.
Q.2 Whether the view expressed in Preetam Singh's
judgment that functions of the U.P. Avas Evam Vikas Parishad
are only the specific functions enumerated in Section 15 of 1965
Act which does not include the service conditions of employees
of the Board lays down the correct law ? Whereas the functions
of the Board referred to in other provisions of Act, Rules and
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Regulations as has been expressly provided in Section 15(1) by
use of the expression "subject to the provisions of this Act and
the Rules and Regulations" shall also be functions of the Board
which induces service conditions of officers and employees as
per Section 95(1)(f) of the 1965 Act.
A: The first part of the question is answered in the
affirmative. The functions of the Board are as specified in Section
15 and other relevant sections in Chapter III of the 1965 Act.
The second part is answered in the negative.
Q.3 Whether the State Government had no jurisdiction to
issue directions regarding service conditions of officers and
employees of the U.P. Avas Evam Vikas Parishad under the
provisions of the 1965 Act and 1975 Act and all other enabling
powers with the State Government?
A: Answered in affirmative. But the State Government can
always frame Rules in the exercise of powers under clause (nn)
of sub-section (1) of Section 94 of the 1965 Act for determining
the conditions of service of the servants and officers of the Board.
Whenever there is any inconsistency between Regulations framed
under clause (f) of sub-section (1) of Section 95 and the Rules
framed under clause (nn) of sub-section (1) of Section 94, the
Rules will prevail and to that extent, the provisions of the
Regulations which are repugnant to the Rules shall be void. [Para
34][668-A-H]
4. This Court concluded as under :
(i) This Court upheld the decision of this Court in Preetam
Singh's case with a modification that the State Government can
always exercise the powers under clause (nn) of sub-section (1)
Section 94 of the 1965 Act for determining the conditions of
service of the officers (other than the Housing Commissioner)
and employees of the Board. If such power is exercised, those
provisions of the Regulations framed under clause (f) of
sub-section (1) of Section 95 which are repugnant to the Rules,
shall be void;
(ii) All the officers and employees of the Board who have
not received the benefit of the old scheme till 07th September
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS.
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2012 and have retired on or after 1st January 2006 shall be entitled
to benefit of the new pension scheme as per the notification dated
19th May 2009 issued by the Board provided they are otherwise
eligible. However, the officers and employees appointed on or
after 1st April 2005 will be governed by the newly defined
Contributory Pension Rules notified by the State Government;
(iii) Those officers and employees of the Board who have
retired on or after 1st January 2006 and who have not received
benefits under the old scheme till date shall be entitled to interest
as directed by this Court in paragraph 21 of the decision in Preetam
Singh's case. Even those officers and employees who are entitled
to benefit of the new pension scheme in terms of the notification
dated 19th May 2009 and who have taken benefits under the old
scheme pursuant to the interim order dated 07th September 2012,
will be entitled to interest on differential amounts, as directed in
terms of paragraph 21 of the decision of this Court in Preetam
Singh's case;
(iv) Those officers and employees of the Board who have
accepted the benefit under the old scheme before 7th September
2012 after giving an undertaking in terms of the Office Order
dated 16th January 2004 shall not be entitled to the benefit of the
new pension scheme made applicable as per the notification dated
19th May 2009;
(v) While calculating the pension amount payable to those
who are entitled to the new pension scheme in terms of the
notification dated 19th May 2009, the benefit of notional pay
fixation in terms of the revised pay structure with effect from 1st
January 2006 shall be provided; and
(vi) All the officers and employees of the Board who are
entitled to benefit of the revised pay structure in terms of the
Government Order dated 14th January 2010 shall be provided
the said benefit within a period of three months from today, if not
provided earlier. While extending the said benefit, their pay shall
be notionally determined as per the revised pay structure with
effect from 1st January 2006. However, they shall not be entitled
to arrears of salary as per the revised pay structure from 1st
January 2006 till 14th January 2010. However, in the cases of the
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employees and officers who have already received the arrears,
no recovery proceedings shall be initiated against them. [Para
45][677-D-H; 678-A-G]
State of Uttar Pradesh v. Preetam Singh & Ors. (2014)
15 SCC 774 : [2014] 10 SCR 910; D.S. Nakara & Ors.
v. Union of India (1983) 1 SCC 305 : [1983] 2 SCR
165 V. Sukumaran v. State of Kerala & Anr. (2020) (8)
SCC 106 : [2020] 6 SCR 991; A.R. Antulay v. Ramdas
Sriniwas Nayak & Anr. (1984) 2 SCC 500 : [1984] 2
SCR 914; Dhananjaya Reddy etc. v. State of Karnataka
(2001) 4 SCC 9 : [2001] 2 SCR 399; Gujarat Urja
Vikas Nigam Ltd. v. Essar Power Ltd. (2008) 4 SCC
755 : [2008] 4 SCR 822; DLF Qutab Enclave Complex
Educational Charitable Trust v. State of Haryana (2003)
5 SCC 622 : [2003] 2 SCR 1; Commercial Tax Officer,
Rajasthan v. Binani Cements Ltd. & Anr. (2014) 8 SCC
319 : [2014] 3 SCR 1; Harwindra Kumar v. Chief
Engineer, Karmik & Ors. (2005) 13 SCC 300 : [2005]
5 Suppl. SCR 317; Institute of Chartered Accountants
of India v. Price Waterhouse & Anr. (1997) 6 SCC 312
: [1997] 2 Suppl. SCR 267; State of Rajasthan & Anr.
v. Prem Raj (1997) 10 SCC 317 : [1997] 2 SCR 60;
Nazir Ahmed v. The King Emperor (1936) SCC OnLine
PC 41 - referred to.
Case Law Reference
[2014] 10 SCR 910
referred to
Para 1
[1983] 2 SCR 165
referred to
Para 15
[2020] 6 SCR991
referred to
Para 15
[1984] 2 SCR 914
referred to
Para 16
[2001] 2 SCR 399
referred to
Para 16
[2008] 4 SCR 822
referred to
Para 16
[2003] 2 SCR 1
referred to
Para 18
[2014] 3 SCR 1
referred to
Para 20
[2005] 5 Suppl. SCR 317
referred to
Para 21
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS.
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[1997] 2 Suppl. SCR 267
referred to
Para 21
[1997] 2 SCR 60
referred to
Para 22
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.66226623 of 2022.
From the Judgment and Order dated 16.03.2018 of the High Court
of Judicature at Allahabad, Lucknow Bench in Writ Petition No.12645
(S/B) of 2016 and Writ Petition No.10355 (S/B) of 2017.
With
Civil Appeal Nos.6626 And 6627 of 2022.
Ms. Aishwarya Bhati, ASG, P. N. Misra, Vishwajit Singh, V. K.
Shukla, Jitendra Mohan Sharma, Nidhesh Gupta, Sr. Advs., Abhishek
Kumar Singh, Pankaj Singh, Ms. Ridhima Singh, Ms. Pallavi Baghel,
Ms. Anamika Yadav, Ms. B. L. N. Shivani, Nithin Choudary Pavuluri,
Rajeev Kumar Dubey, Kamlendra Mishra, Mrs. Swarupama
Chaturvedi,Sourabh Jain, P. K. Jain, Abhinav Kr. Shrivastav, Amrit
Pradhan, S. P. Singh Rathore, P. K. Goswami, Sanpreet Singh Ajmani,
Nikhil Majithia, Ms. Japneet Kaur, Ms. Vriti Gujral, Advs. for the
appearing parties.
The Judgment of the Court was delivered by
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.1 (Preetam Singh's case)needs reconsideration. Under
Section 3 of the Uttar Pradesh Avas Evam Vikas ParishadAdhiniyam,
1965 (for short 'the 1965 Act'), Uttar Pradesh Avas EvamVikas 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/
1 2014 (15) SCC 774
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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
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS.
[ABHAY S. OKA, J.]
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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, the employees of local bodies and public
enterprises were specifically excluded from the applicability of the said
office memorandum. Another office memorandum was issued on 8th
December 2008 by the State Government for providing revised pensionary
benefits to those Government servants who had retired before 1st January
2006. This order was made applicable to the employees of Public Sector
Enterprises who were already getting pension prior to 1st January 2006.
A Division Bench of Allahabad High Court by the judgment and order
dated 16th January 2009 allowed the writ petition filed by Preetam Singh
& others. The High Court quashed the orders dated 13th September
2005 and 12th July 2007 to the extent to which they related to the Board.
A writ of mandamus was issued directing the Board to implement the
new pension scheme in terms of its Regulations framed on 5th November
1997.
5. In view of the decision of the High Court, a notification dated
19th May 2009 was issued by the Board in the exercise of powers under
clause (f) of sub-section (1) of Section 95 of the 1965 Act. The notification
recorded that the Board had decided to implement the new pension
scheme as admissible to the officers and employees of the State
Government in terms of the Rules and Regulations set out in the said
notification. The Board directed that the new pension scheme shall come
into force and will apply to those officers who retired on or after 1st
January 1996. However, it was stated that the Newly Defined
Contributory Pension Rules of the State Government will be applicable
to those employees of the Board who have joined the employment on or
after 1st April 2005. The notification also provided that the orders issued
from time to time by the State Government with respect to pension/
family pension/ gratuity shall be applicable to the officers and employees
of the Board.
6. The decision of the High Court was challenged by the State
Government before this Court in which the decision of this Court in
Preetam Singh's case1 was rendered. It was observed in paragraph
21 of the final judgment of this Court that the interim order dated 7th
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August 2012 passed by this Court had the effect of staying the notification
dated 19th May 2009. By the interim order of this Court dated 7th
September 2012, the employees of the Board were permitted to claim
benefits under the old pension scheme. However, it was observed that
the interim order will not come in the way of the said employees agitating
their claim and also supporting the relief granted by the High Court.
7. One of the main contentions canvassed by the State of Uttar
Pradesh before this Court in Preetam Singh's case1 was based on
provisions of sub-section (1) of Section 2 of the U.P. State Control Over
Public Corporations Act, 1975 (for short 'the 1975 Act'). Section 2(1) of
the 1975 Act provides that every statutory body established or constituted
under any Uttar Pradesh Act shall in the discharge of its functions be
guided by such directions on questions of policies as may be issued to it
by the State Government notwithstanding that no such power has been
expressly conferred by the statute establishing such a statutory body on
the State Government. The contention of the State Government was
that the orders issued on 13th September 2005 and 12th July 2007 must
be deemed to have been issued in the exercise of powers under Section
2(1) of the 1975 Act.
8. While deciding Preetam Singh's case1 on 24th September
2014, this Court referred to Section 15 of the 1965 Act which exhaustively
incorporates the functions of the Board. This Court came to the conclusion
that fixing conditions of service of its employees does not constitute a
function of the Board. Therefore, this Court held that the State
Government had no power to issue the directions contained in its orders
dated 13th September 2005 and 12th July 2007. This Court also held that
clause (f) of sub-section (1) of Section 95 of the 1965 Act vests a power
in the Board to make Regulations for determining conditions of service
of its officers and servants. It was held that the new pension scheme
has been framed by the Board in the exercise of power under clause (f)
of sub-section (1) of Section 95. While dismissing the Special Leave
Petition filed by the State Government, this Court referred to the
notification dated 19th May 2009 of the Board issued in the exercise of
power under clause (f) of sub-section (1) of Section 95 of the 1965 Act.
This Court while dismissing the appeal preferred by the State Government
directed that all the eligible employees of the Board will be governed by
the said notification dated 19th May 2009. This Court directed the Board
to release pensionary benefits to retired employees governed by the
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS.
[ABHAY S. OKA, J.]
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notification dated 19th May 2009 within a period of three months.
Paragraph 21 of the decision containing the directions issued by this
Court is reproduced below:-
"21. It is also necessary for us to determine the consequence of
the State of Uttar Pradesh, having approached this Court, to assail
the impugned judgment dated 16-1-2009 [Preetam Singh v. State
of U.P., 2009 SCC OnLine All 33 : (2009) 2 All LJ 702] . This
Court having entertained the petition filed by the appellant,
passed interim directions on 7-8-2012 [State of
U.P. v. Preetam Singh, IA No. 7 in Civil Appeal No. 6307 of
2010, order dated 7-8-2012 (SC), wherein it was
directed:"Taken on board. There shall be stay of the order
passed in Writ Petition No. 1433 of 2011 dated 24-7-2012.
IA No. 7 is disposed of. Registry is directed to list IA No. 4
on 27-8-2012, if it is in order."] , which had the effect of
staying the implementation of the directions issued by the
High Court, namely, of staying the implementation of the
Notification dated 19-5-2009. As a result, the employees
governed by the Notification dated 19-5-2009, were paid their
retiral dues under the Contributory Provident Fund Scheme. Since
we have now affirmed the impugned judgment of the High Court,
dated 16-1-2009 [Preetam Singh v. State of U.P., 2009 SCC
OnLine All 33 : (2009) 2 All LJ 702] , it is apparent that all the
eligible employees of the Vikas Parishad will be governed by the
Notification dated 19-5-2009. They will therefore be entitled to
the pensionary benefits from the date of their retirement.
Undoubtedly, they have been denied the said retiral
benefits, consequent upon the interim orders passed by
this Court, at the behest of the State of Uttar Pradesh. In
the above view of the matter, we direct the Vikas Parishad
to release the pensionary benefits to the retired employees
governed by the Notification dated 19-5-2009, within three
months from today. While determining the pensionary
benefits payable to the eligible retired employees up to date,
if it is found that any of the retired employees is entitled to
financial dues in excess of those already paid under the
Contributory Provident Fund Scheme, the said employee(s)
will be paid interest on the said amount @ 9% p.a. The
burden of the aforesaid interest component on the differential
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amount will be discharged by the Vikas Parishad in the first
instance. The same shall, however, be recovered from the State
of Uttar Pradesh, who is solely responsible for the interest ordered
to be paid to the employees concerned."
(emphasis added)
9. On 16th October 2009, the State Government issued an order
sanctioning revised pay structure, pay band, and grade pay to different
categories of employees working in public enterprises/ corporations. The
revised pay structure was incorporated in the annexure to the said order.
The Government Order stated that necessary action shall be taken by
the public enterprises/ corporations in consultation with the Public
Enterprises Department/ Finance Department. It is also provided in the
Government Order that the execution of the Government Order shall be
made only after a proposal to that effect is approved by the Board of
Directors of the Public Sector Enterprises. On 30th November 2009, the
Housing Commissioner of the Board addressed a letter to the State
Government for communicating the proposal of the Board to apply the
revised pay structure to its employees. In response, on 14th January
2010, the State Government issued a communication permitting the Board
to grant the revised pay structure according to the recommendations of
the 7th Report of the U.P Pay Committee, 2008 to its employees. The
State Government permitted the Board to grant the revised pay structure
to its employees as provided in the aforesaid Government Order dated
16th October 2009. The said order was issued on the basis of the
recommendations of the Empowered Committee. However, it was stated
in that communication that the benefit shall be calculated on a notional
basis with effect from 1st January 2006 in the pay band and grade pay as
per the table annexed to the Government Order dated 16th October 2009.
It provided that the actual benefit shall be provided with immediate effect
i.e. from 14th January 2010. In short, the employees of the Board were
not entitled to arrears of pay as per the revised pay structure with effect
from 1st January 2006. They were entitled to revised pay scales only on
a notional basis from 1st January 2006 and to the actual benefits only
from 14th January 2010. Based on the said communication, an Office
Order was issued by the Board on 23rd January 2010 for giving effect to
the communication dated 14th January 2010. In fact, another Government
Order was issued on 15th September 2011 stating that in terms of the
order dated 14th January 2010, pay scales of the employees of the Board
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS.
[ABHAY S. OKA, J.]
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will be notionally revised with effect from 1st January 2006 but the actual
benefits shall be extended only from 14th January 2010. The said
Government Order reiterates that the employees of the Board will not
be entitled to benefit of the revised pay structure for the period of 1st
January 2006 to 13th January 2010.
10. The State Government issued another order dated 05th May
2015 to the Board communicating the decision of the Hon'ble Governor
to grant pensionary benefits to the employees of the Board in terms of
the new pension scheme with retrospective effect from 1st January 2006.
The decision of the State Government, inter alia, provided that the
employees who were employed on or before 31st March 2005 and who
had not retired till date shall be granted pension. It further provided that
the employees who had already retired and had taken benefits under the
old pension scheme will not be entitled to get a pension under the new
pension scheme. The Government directed that the employees of the
Board who have been employed on or after 1st April 2005 will not be
entitled to grant of pension. In terms of the Government Order of 05th
May 2015, the Board issued Office Order dated 13th May 2015.
11. There were two sets of writ petitions filed before the Allahabad
High Court. The first one was Writ Petition No.12645 of 2016 filed by
certain employees of the Board. The following prayers were made in
the petition :
"(i) to issue a writ, order or direction in the nature of Mandamus
commanding the respondents to re-determine the salary of the
petitioners till their retirement and thereafter their pensionary
benefits on the basis of Sixth Pay Commission Recommendation
w.e.f.1.1.2006.
(ii) to issue a writ, order or direction in the nature of Mandamus
commanding the respondents to apply the provisions of the
Government Order No.1508 dated 8.12.2008 on the officers of
the Parishad, while suitably reading down the restrictive provisions
about its non-application on the employees of the U.P. Awas Evam
Vikas Parishad in view of the Pension Regulations dated 19.5.2009
read with judgment and order of the Hon'ble Apex Court dated
23.9.2014.
(iii) to issue a writ, order or direction in the nature of mandamus
commanding the respondents to re-determine/re-fix the salary of
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the petitioners in terms of Sixth Pay Commission Recommendation
w.e.f. 1.1.2006 till their retirement and thereafter re-determine
their pensionary benefits as per revised last pay drawn and pay
arrears of salary and revised pensionary benefits from the date of
their retirement till date, in accordance with G.O. dated 8.12.2008,
after deducting the amounts already paid towards pensionary
benefits of the petitioners, within a period of 2 months.
(iv) to issue a writ, order or direction in the nature of Mandamus
commanding the respondents to grant the benefit of maximum
gratuity of Rs.10 lac to the petitioners as per Government Order
dated 8.12.2008.
(v) to issue a writ, order or direction in the nature of Mandamus
commanding the respondents to pay arrears of salary & pensionary
benefits calculated in terms of the Sixth Pay Commission
Recommendation, including enhanced gratuity of Rs.10 lac, along
with payment of interest at the prevailing Bank rates, within a
period of 2 months.
(vi) to issue an ad-interim mandamus to the respondent authorities
to pay the current pension of the petitioners in terms of Sixth Pay
Commission Recommendation."
Writ Petition No.10355 of 2017 was filed by another set of
employees of the Board for challenging the order dated 05th May 2015
passed by the State Government and the consequential order dated 13th
May 2015 passed by the Board.
12. By the impugned judgment, the aforesaid two petitions were
disposed of. While disposing of the petitions, in paragraph 41, the following
directions were issued :
"41. Accordingly, both the writ petitions are allowed and the
impugned orders dated 05.05.2015 and 13.05.2015 contained in
Annexure No.1 and 2 to the Writ Petition o.126345 (S/B) of 2017
are quashed to the extent they are contrary to the judgment passed
by the Hon'ble Apex Court in the case of State of U.P. vs. Preetam
Singh and others : Civil Appeal No.6307 of 2010. A mandamus
is issued to the respondents to grant benefit of arrears of
salary payable to the employees of Parishad w.e.f. 1.1.2006
to 13.01.2010 and to fix their pension/ family pension and
also release gratuity in accordance with the provisions of
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS.
[ABHAY S. OKA, J.]
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U.P. Avas Evam Vikas Parishad Regulations notified on 19th
May, 2009, and in the light of the orders of the Hon'ble
Supreme Court in Civil Appeal No.6307 of 2010 from the
date of their entitlement alongwith interest @ 9% per
annum within a period of two months from the date of
production of certified copy of this order, failing which the
petitioners shall be entitled and paid interest at the rate of
12% per annum."
(emphasis added)
THE ORDER OF REFERENCE TO A LARGER BENCH
13. Now, we come to the order dated 10th February 2020 passed
by this Court. A Bench of two Hon'ble Judges of this Court prima facie
found that the functions of the Board contemplated under Section 15 of
the 1965 Act were wide enough even to cover the act of fixing service
conditions of its employees. In paragraph 43, this Court framed three
questions for consideration of a larger Bench. Paragraph 43 of the said
order reads thus:
"43. Due to the above reasons we are of the view that with regard
to three aspects i.e. (1), (2) and (3) as 42 noted above, the judgment
in Preetam Singh's case needs reconsideration. We formulate
following questions to be considered by a larger Bench:
(1) Whether the judgment of this Court in Preetam Singh's case
laying down that conditions of service of officers and employees
do not constitute the functions of the U.P. Avas Evam Vikas
Parishad lays down the correct law more so when the judgment
does not refer to provisions of Sections 8, 92, 94(2)(nn)of the
1965 Act ?
(2) Whether the view expressed in Preetam Singh's judgment
that functions of the U.P. Avas Evam Vikas Parishad are only the
specific functions enumerated in Section 15 of 1965 Act which
does not include the service conditions of employees of the Board
lays down the correct law ? Whereas the functions of the Board
referred to in other provisions of Act, Rules and Regulations as
has been expressly provided in Section 15(1) by use of expression
"subject to the provisions of this Act and the Rules and Regulations"
shall also be functions of the Board which induces service
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conditions of officers and employees as per Section 95(1)(f) of
the 1965 Act.
(3) Whether the State Government had no jurisdiction to issue
directions regarding service conditions of officers and employees
of the U.P. Avas Evam Vikas Parishad under the provisions of
the 1965 Act and 1975 Act and all other enabling powers with the
State Government?
SUBMISSIONS OF THE STATE GOVERNMENT AND
THE BOARD
14. Ms. Aishwarya Bhati, the learned Additional Solicitor General
appearing for the State Government urged that the statutory functions
of the Board include the function of fixing terms and conditions of the
employment of its employees. She placed reliance on Section 92 of the
1965 Act which confers a power on the State Government to issue
directions to the Board for carrying out the purposes of the 1965 Act.
She urged that it is the duty of the Board to comply with the directions
issued by the State Government. It was further submitted that apart
from Section 2(1) of the 1975 Act, there was sufficient power vesting in
the State Government under Section 8 of the Section 1965 Act to control
and put restrictions on the powers of the Board to appoint officers and
employees. The learned ASG invited our attention to the notification
dated 19th May 2009 by which the Board applied the new pension scheme
to the employees who retired on or after 1st January 1996. She pointed
out that in the said notification, it is specifically directed that the orders
with respect to pension/family pension/gratuity issued by the State
Government from time to time shall also be applicable to the officers
and employees of the Board. She pointed out that the said notification
was never challenged. She would, therefore, submit that the directions
of the State Government impugned by the private respondents cannot
be faulted. After inviting our attention to the interim order dated 7th
September 2012 passed by this Court, the learned ASG submitted that
those who have unconditionally opted for the old pension scheme prior
to 7th September 2012 have no subsisting right to claim the pension in
terms of the new pension scheme. She submitted that the employees
are not entitled to salary as per the revised pay structure for the period
between 1st January 2006 to 13th January 2010 as per the binding directions
of the State Government. The learned senior counsel representing the
Board also made similar submissions.
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS.
[ABHAY S. OKA, J.]
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THE SUBMISSIONS OF THE PRIVATE RESPONDENTS
15. The learned counsel appearing for the respondents in Civil
Appeal Nos.6624 and 6625 of 2022 also made legal submissions. We
may note here that while reserving the judgment on 15th September 2022,
we had detagged the said appeals. Nevertheless, we are also considering
the submissions made by the respondents in the detagged appeals as
regards the three questions of law that are required to be decided. The
submission of the learned counsel is that as several employees were
facing financial hardships after their retirement, they had no option but
to give the undertakings to accept the old pension scheme and not opt
for the new pension scheme. Considering this situation, this Court by an
interim order passed in Preetam Singh's case1had directed that even
if employees have taken benefit of the old pension scheme by giving an
undertaking, they will be entitled to the benefit of the new pension scheme
in terms of the notification dated 19th May 2009. The learned counsel
invited our attention to the subsequent order dated 5th May 2015 passed
by the State Government by which the benefit of the new pension scheme
was denied to those who opted to join the employment of the Board on
or after 1st April 2005. His submission is that this direction is discriminatory
which creates two classes of pensioners without any rational basis. He
relied upon a decision of this Court in the case of D.S. Nakara & Ors.
v. Union of India2 as well as another decision in the case of V.
Sukumaran v. State of Kerala & Anr.3. He would, therefore, submit
that reconsideration of the view taken in Preetam Singh's case1 is not
at all warranted.
16. Shri Nidhesh Gupta, the learned senior counsel stated that he
represents only those respondents who had never opted for the old pension
scheme and had not received any amount under the old scheme. He
submitted that under clause (f) of sub-section (1) of Section 95 of the
1965 Act, the Board has a power to make Regulations providing for
conditions of service of officers and servants of the Board. Inviting our
attention to sub-section (2) of Section 95 of the 1965 Act, Shri Gupta
would submit that only when any Regulation framed by the Board is
repugnant to the Rules framed by the State in the exercise of powers
under Section 94, the Rules will prevail. He submitted that admittedly
the State Government has not exercised the Rule making power under
2 1983 (1) SCC 305
3 2020 (8) SCC 106
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Section 94. He urged that under clause (nn) of sub-section (2) of Section
94, the State Government has a power to frame Rules concerning any
matter for which Regulations can be framed under Section 95. He
submitted that it is well settled that when an enactment requires that a
certain thing should be done in a certain way, the thing must be done in
that way or not at all.