Supreme Court: On the issue as to whether the determination of service conditions of the employees and officers of the Board, under the Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965, is one of the statutory functions of the Board, the 3-judge bench of Sanjay Kishan Kaul, Abhay S. Oka* and Vikram Nath, JJ has upheld the decision in State of Uttar Pradesh v. Preetam Singh, 2014 (15) SCC 774 wherein it was held that fixing conditions of service of its employees does not constitute a function of the Board. The Court, however, modified the decision to an extent to hold 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.
Preetam Singh’s case trajectory
- In the case relating to a pension scheme, Preetam Singh and others, who were the employees of the Board, filed a writ petition in Allahabad High Court challenging the Government Order dated 14.09.1999 that directed 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. The same stand was reiterated on 07.05.2003.
- After the Board gave an option to its employees of either opting for the new pension scheme or continuing with the old pension scheme, 582 employees opted for the old pension scheme by filing necessary undertakings.
- On 13.09.2005, the State Government issued an order keeping its communication dated 07.05.2003 in abeyance on the ground that it was preparing comprehensive guidelines regarding the payment of pension to the employees of Public Sector Enterprises.
- On 12.07. 2007, it was communicated that 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 to include these two orders as well.
- During the pendency of the petition, the State Government issued an office memorandum dated 08.12.2008 for applying a revised pension, gratuity/family pension, and commutation scheme with effect from 01.01.2006 for the benefit of its employees, 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 08.12. 2008 for providing revised pensionary benefits to those Government servants who had retired before 01.01.2006. This order was made applicable to the employees of Public Sector Enterprises who were already getting pension prior to 01.01.2006.
- On 16.01.2009, the Allahabad High Court allowed the writ petition filed by Preetam Singh & others and quashed the orders dated 13.09.2005 and 12.07.2007 to the extent to which they related to the A writ of mandamus was issued directing the Board to implement the new pension scheme in terms of its Regulations framed on 05.11.1997.
- A notification dated 19.05.2009 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 01.01. 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 01.04.2005. 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.
- The matter eventually travelled to the Supreme Court and on 24.09.2014, while referring to Section 15 of the 1965 Act which exhaustively incorporates the functions of the Board, the Court concluded that fixing conditions of service of its employees does not constitute a function of the Board. Hence, the State Government had no power to issue the directions contained in its orders dated 13.09.2005 and 12.07.2007. It was 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 appeal preferred by the State Government, the Court directed that all the eligible employees of the Board will be governed by the notification dated 19.05.2009 and directed the Board to release pensionary benefits to retired employees governed within a period of three months.
The reference
On 10.02.2020, a division bench had come to the conclusion that the view taken by this Court in Preetam Singh’s case needs reconsideration after it 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. Hence, the matter was referred to a larger bench. [(2020) 5 SCC 209]
Outcome of the ruling the present case
- All the officers and employees of the Board who have not received the benefit of the old scheme till 07.09.2012 and have retired on or after 01.01.2006 shall be entitled to benefit of the new pension scheme as per the notification dated 19.05.2009 issued by the Board provided they are otherwise eligible. However, the officers and employees appointed on or after 01.01.2005 will be governed by the newly defined Contributory Pension Rules notified by the State Government;
- Those officers and employees of the Board who have retired on or after 01.01.2006 and who have not received benefits under the old scheme till date shall be entitled to interest as directed in Preetam Singh’s Even those officers and employees who are entitled to benefit of the new pension scheme in terms of the notification dated 19.05.2009 and who have taken benefits under the old scheme pursuant to the interim order dated 07.09.2012, will be entitled to interest on differential amounts, as directed in Preetam Singh’s case ;
- Those officers and employees of the Board who have accepted the benefit under the old scheme before 07.09.2012 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 19.05.2009;
- While calculating the pension amount payable to those who are entitled to the new pension scheme in terms of the notification dated 19.05.2009, the benefit of notional pay fixation in terms of the revised pay structure with effect from 01.01.2006 shall be provided; and
- 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 14.01.2010 shall be provided the said benefit within a period of three month, if not provided earlier. While extending the said benefit, their pay shall be notionally determined as per the revised pay structure with effect from 01.01.2006. 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 employees and officers who have already received the arrears, no recovery proceedings shall be initiated against them.
[State of UP v. Virendra Kumar, 2022 SCC OnLine SC 1628, decided on 25.11.2022]
*Judgment by: Justice Abhay S. Oka
For State: ASG Aishwarya Bhati
For respondents: Sr Adv Nidhesh Gupta
