Summary
Employees of the Orissa Khadi and Village Industries Board, whose 1960 regulations apply the Orissa Service Code but by Regulation 52 expressly exclude pension, sought pension at par with State Government employees after decades of unsuccessful proposals to amend the regulation. A Single Judge of the Orissa High Court directed the State to amend the regulations and the Division Bench, calling the direction advisory, nonetheless said the State shall honour it. The Supreme Court allowed the State's appeal: the principles that pension is not a bounty and that financial constraints cannot defeat vested rights apply only where the right flows from the rules, Regulation 52 was never challenged or struck down, Board employees are not State employees for all purposes, no mandamus can issue to amend subordinate legislation, and Article 142 cannot be used contrary to statute.
Issues
- Whether a High Court can issue a mandamus directing the State Government to amend statutory regulations so as to extend pension to employees of a statutory Board whose regulations expressly exclude pension, where the regulation was neither challenged nor declared invalid.
- Whether denial of pension to Board employees who are otherwise governed by the Orissa Service Code amounts to hostile discrimination under Articles 14 and 16.
Provisions considered
- Sections 3 and 36, Orissa Khadi and Village Industries Board Act, 1955The Board is a body corporate with its own regulations on conditions of service made with the State's previous sanction; its distinct corporate existence means its employees cannot be equated with State Government employees in all respects, and whether to amend the regulations is for the State to decide. (¶¶ 3.1, 3.3, 16.1, 19)
- Regulations 40 and 52, Orissa Khadi and Village Industries Board Regulations, 1960Regulation 40 applies the Orissa Service Code mutatis mutandis but is expressly subject to the other regulations; Regulation 52 provides that employees are not entitled to any pension except gratuity and contributory provident fund, and a prayer for its amendment is not a challenge to its validity. (¶¶ 3.4, 15.2, 16.1, 16.1.1, 16.2)
- Articles 14 and 16, Constitution of IndiaArticle 14 forbids hostile discrimination but not reasonable classification; employees of a statutory Board with distinct regulations are not similarly situated with State Government employees, so the plea of discrimination following Air India v. Nergesh Meerza is baseless. (¶¶ 16, 16.1, 16.2)
- Article 142, Constitution of IndiaCannot be invoked to issue directions in violation of statutory provisions; sympathy alone is no ground for an order contrary to legal rights. (¶ 22)
Held
- The decisions in D.S. Nakara, Jitendra Kumar Srivastava, Haryana State Minor Irrigation Tubewells Corporation and Punjab State Cooperative Agricultural Development Bank, holding that pension is earned and that financial constraints cannot justify taking away vested rights, concern cases where the right to pension flowed from the applicable rules; they cannot be read as requiring pension where the service conditions expressly exclude it, and the State's refusal of a retrospective amendment from 1976 took away no vested or accrued right. (¶¶ 14, 15, 15.1, 15.2, 15.4)
- The Gujarat High Court decision concerning that State's Khadi Board is distinguishable because a pension scheme already existed there since 1973; the small number of beneficiaries is irrelevant to whether mandamus can issue; the State's objections to retrospective amendment and the administrative complications indicated were not a mere pretence; and the Division Bench, having rightly termed the Single Judge's direction advisory, impermissibly converted it into a mandate by directing that the State shall carry it out. (¶¶ 17, 17.1, 19, 21)
- Nothing in the judgment prevents the State Government from amending the regulations in the suggested or any modified form if it chooses to do so; the only question was whether a mandamus could compel it, and the answer is no. (¶¶ 19, 22)
Result
Appeal allowed; orders of the Orissa High Court dated 25.10.2010 and 20.12.2012 directing the State to amend the 1960 Regulations and extend pension to Board employees set aside; writ petition of the employees' association dismissed; State left free to amend the Regulations if it so chooses; no costs.