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REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION(C)NOS.4802-4803 OF 2019

STATE OF U.P. & ORS. …… PETITIONERS

VERSUS

VIRENDRA KUMAR & ORS. …… RESPONDENTS

WITH

SPECIAL LEAVE PETITION(C)NO.4815 OF 2019

U.P. AVAS EVAM VIKAS PARISHAD & ANR. …… PETITIONERS

VERSUS

VIRENDRA KUMAR & ORS. …… RESPONDENTS

WITH

SPECIAL LEAVE PETITION(C)NO.4804 OF 2019

U.P. AVAS EVAM VIKAS PARISHAD & ANR. …… PETITIONERS

VERSUS

CHANDRA PAL SINGH & ORS. …… RESPONDENTS

WITH

SPECIAL LEAVE PETITION(C)NO.373 OF 2019

U.P. AVAS EVAM VIKAS PARISHAD & ANR. …… PETITIONERS

VERSUS

SHIVASHRAY RAI & ORS. …… RESPONDENTS

WITH

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SPECIAL LEAVE PETITION(C)NO.386 OF 2019

STATE OF U.P. …… PETITIONERS

VERSUS

SHIVASHRAY RAI & ORS. …… RESPONDENTS

J U D G M E N T

ASHOK BHUSHAN, J.

We  have  heard  Shri  Raghvendra  Singh,  learned

Advocate-General of State of U.P. for State of U.P.

Shri  Nikhil  Majithia,  learned  counsel  has  appeared

for respondent Nos.1 to 4. Shri P.K. Jain, learned

counsel has also appeared for respondents.

2. Learned counsel for the parties have addressed

their submissions only on the question as to whether

judgment of this Court in  State of U.P. vs. Preetam

Singh,  (2014)15  SCC  774,  requires  reference  to  a

larger Bench or not.  

3. Before we consider the submissions of respective

parties, it is necessary to notice the subject matter

of the dispute which was decided by this Court in

Preetam Singh’s case (supra). We also need to notice

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the  facts  and  issues  which  have  arisen  in  these

Special Leave Petitions.  

Preetam Singh’s case

4. The State Legislature passed an Act to provide

for the establishment, incorporation and functioning

of a housing and development board in Uttar Pradesh,

namely, the Uttar Pradesh Avas Evam Vikas Parishad

Adhiniyam,  1965.  (hereinafter  referred  to  as  the

“1965  Act”).  Section  3  provides  that  the  State

Government  shall  by  notification  in  the  Gazette

establish a Board to be called the Uttar Pradesh Avas

Evam Vikas Parishad (hereinafter referred to as “the

Board or Parishad”). The Board was contemplated to be

a body corporate.  

5. The Board in the year 1973 has framed Regulations

for  providing  contributory  provident  fund  to  its

employees.  On  21.02.1995,  the  Board  proposed  a

pension/family pension and gratuity scheme in place

of  the  contributory  provident  fund  scheme  for  its

employees. The State Government sent a reply to the

proposal on 16.05.1996 that the State Government has

no  objection  in  implementing  the  pension/family

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pension  and  gratuity  scheme  for  its  employees,

however, it will not extend any financial assistance

to the Board for the scheme. The Board on 05.11.1997

framed Regulations under Section 95 of the Act, 1965

for  pension/family  pension  and  gratuity  for  its

employees in place of earlier contributory provident

fund scheme.  The State Government vide letter dated

26.11.1997 directed for staying the implementation of

pension  scheme.  The  State  vide  letter  dated

26.11.1997 directed for staying the implementation of

pension scheme.  

6. The State issued an order dated 14.04.1999 for

implementation of pension/family pension and gratuity

scheme in place of contributory provident fund scheme

in Board with several conditions enumerated therein.

On 13.09.2005 the State Government again issued an

order intimating the Board that it has been decided

to stay the State Government’s earlier order dated

07.05.2003 which was issued for implementation of the

pension/family pension and gratuity scheme in place

of contributory provident fund scheme in the Board.

Again on 12.07.2007, another order was passed to the

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effect  that  there  is  no  need  to  apply

pension/provident fund scheme to those personnel of

the Public enterprises/Corporations who are covered

by  Employees  Provident  Fund  &  Miscellaneous

Provisions Act, 1952 of the Central Government and/or

those to whom different Contributory Provident Fund

Schemes  are  already  applicable.  The  Writ  Petition

No.582(S/B)  of  2000  (Preetam  Singh  and  others  vs.

State of U.P. and others) was filed in the High Court

of Judicature at Allahabad, Lucknow Bench challenging

order  dated  14.09.1999,  13.09.2005  and  12.07.2007.

The writ petition was contested by the State of U.P.

The High Court vide its judgment 16.01.2009 allowed

the writ petition by the following order:

“For  the  foregoing  reasons,  the  writ petition  succeeds  and  is  hereby  allowed. The impugned orders dated 13.09.2005 copy of which is Annexure – 14 and the order dated 12.07.2007, copy of which is Annexure – 18 on the record, are hereby quashed, so far as they relate to U.P. Evam Avas Vikas Parishad. A writ in the nature of mandamus is  issued  directing  the  U.P.  Avas  Evam Vikas  Parishad  to  implement  its pension/family pension and gratuity scheme in accordance with its regulations framed on 05.11.1997.  

Under the circumstances, there shall be no order as to costs.”

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7. Aggrieved against the judgment dated 16.01.2009

of the High Court the State of U.P. filed an SLP

(C.A.No. 6307 of 2010- State of Uttar Pradesh vs.

Preetam Singh and others). This Court on 07.08.2012

stayed the order of the High Court but ultimately the

civil  appeal  was  dismissed  by  this  Court  on

23.09.2014 which judgment is reported in (2014) 15

SCC 774. This Court held that conditions of service

of the employees do not constitute functions of the

Board and as such the State has no jurisdiction to

issue  directions  dated  13.09.2005  and  12.07.2007

regarding pension/family pension and gratuity scheme.

This Court also noticed the Regulations framed by the

Board under Section 95(1)(f), namely, pension/family

pension  and  gratuity  scheme  dated  19.05.2009.  This

Court while dismissing the writ petition directed the

Board  to  release  the  pensionary  benefits  to  the

retired employees governed by the notification dated

19.05.2009, within three months. It was further held

that  in  event  any  of  the  retired  employees  is

entitled to financial dues in excess of those already

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paid  under  the  Contributory  Provident  Fund  Scheme,

the said employee(s) will be paid interest on the

said amount @ 9% p.a.

8. The  State  of  U.P.  by  order  dated  13.05.2015

issued directions to extend the pensionary benefits

to the employees of the Board in compliance of the

judgment of this Court dated 23.09.2014 in  Preetam

Singh’s  case  (supra) under  certain  conditions

mentioned therein.  

Civil Appeal No.4802-4803 of 2019 (State of U.P. & others vs. Virendra Kumar & others etc.etc.)

9. On the basis of recommendations of the U.P. Pay

Committee  2008,  the  State  Government  decided  to

implement 6th Pay Commission Report w.e.f. 01.01.2006.

The State Government issued an order No. General-3-

1508/X-2008-308-97 dated 08.12.2008 on the subject:

“The Revision of Pension, Gratuity/Family Pension and

commutation  of  retired/dead  personals  with  effect

from 01.01.2006 on the basis of the recommendations

of the U.P. Pay Committee 2008.” The Government order

in the last of paragraph 2 directed:  

“But  the  aforesaid  orders  shall  not  be applicable  to  the  judges  of  the  Hon’ble

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High  Court,  Chairman  and  Members  of  the U.P.  Public  Service  Commission,  Teachers and Staff of added no Government Schools, Employees  of  Local  bodies  and  public enterprises.”

10. Thus,  the  above  Government  order  excluded  the

applicability of the said order to the employees of

local  bodies  and  public  enterprises.  Another

Government  order  No.General-3-1515/X-2008-308-97

dated 08.12.2008 was also issued for employees who

had retired prior to 01.01.2006. The said order was

also not made applicable to local bodies and public

enterprises. On 19.05.2009 the Regulation was framed

by the Board, namely, U.P. Avas Evam Vikas Parishad

Employees  Pension/Family  Pension  and  Gratuity

Regulation. By the Government order dated 16.10.2009,

the  State  Government  sanctioned  revised  pay

structure,  pay  band  and  grade  pay  and  other

allowances to the employees of different categories

of Public Enterprises/Corporations in accordance with

the  decision  taken  on  the  recommendations  of  the

Report as submitted by 7th U.P. Pay Committee 2008.

11. On 14.01.2010, the State Government has issued an

order approving the pay band and grade pay and other

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allowances  in  the  revised  pay  structure  to  the

employees of Board, according to the decision taken

on the recommendations of 7th U.P. Pay Committee 2008

to  the  employees  of  Public  Sector/Corporations.  In

consequences  to  the  Government  order  dated

14.01.2010,  the  Housing  Commissioner  issued  the

consequential  order  dated  23.01.2010.  In  the

subsequent Government order dated 15.09.2011 it was

clarified that arrears of revised pay for the period

from 01.01.2006 to 13.01.2010 shall not be admissible

to the Board employees. The State Government issued

another letter dated 05.05.2015 regarding pensionary

benefits to the employees of the Board in compliance

of the order dated 23.09.2014 passed by this Court in

Preetam  Singh’s  case.  The  Board  issued  a

consequential  order  dated  05.05.2015.  The  Writ

Petition No.12645(S/S) of 2016 (Chandra Pal Singh and

others vs. State of U.P. and others) filed by the

retired Junior Engineers and retired Class I and II

Officers of the Board. Writ Petition No.10355(S/B) of

2017 (Virendra Kumar and others vs. State of U.P. and

others)  filed  by  another  set  of  Officers  and

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employees  of  the  Board.  In  Writ  Petition

No.12645(S/S)  of  2016  following  prayers  have  been

made:  

“PRAYER

WHEREFORE,  it  is  most  respectfully prayed  that  this  Hon'ble  Court  may graciously be pleased: -

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. 01.01.2006.

ii. to issue a writ, order or direction in nature  of  Mandamus  commanding  the respondents to apply the provisions of the Government  Order  No.1508  dated  08.12.2008 on  the  officers  of  the  Parishad,  while suitably  reading  down  the  restrictive provisions about its non-application on the employees of U.P. Awas Evam Vikas Parishad in  view  of  the  Pension  Regulations  dated 15.05.2009 read with judgment and order of the Hon'ble Apex Court dated 23.09.2014.

iii. to issue a writ, order or direction in the  nature  of  Mandamus  commanding  the respondents  to  re-determine/re-fix  the salary of the petitioners in terms of Sixth Pay  Commission  Recommendation  w.e.f. 01.01.2006  till  their  retirement  and thereafter  re-determine  their  pensionary benefits as per revised last pay drawn and pay  arrears  of  salary  and  revised pensionary

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benefits from the date of their retirement till  date,  in  accordance  with  G.O.  dated 08.12.2008,  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 08.12.2008.

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 lacs, 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.

vii. to pass such other order of direction, which  this  Hon'ble  court  deems  fit  and proper in the circumstances of the case.

viii. to allow the writ petition with costs in favour of the petitioners.”

12. In Writ Petition (S/B)No. 10355 of 2017 (Virendra

Kumar  and  others  vs.  State  of  U.P.  and  others)

following prayers have been made:

“PRAYER

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Wherefore, it is most respectfully prayed that this Hon'ble Court may graciously be pleased to :

(a) issue a writ of Certiorari or a writ, order or  direction  in  the  nature  of  Certiorari quashing  the  impugned  order  dated 05.05.2015 passed by the State Govt., and the  consequential  order  dated  13.05.2015 passed  by  the  Housing  Commissioner, Parishad as contained in Annexure No.1 and 2 to the writ petition.

(b) Issue a writ of mandamus or a writ, order or  direction  in  the  nature  of  mandamus commanding  the  respondents  not  to  give effect  to  the  impugned  order  dated 05.05.2015 passed by the State Govt., and the  consequential  order  dated  13.05.2015 passed  by  the  Housing  Commissioner, parishad as contained in Annexure No.1 and 2 to the writ petition.

(c) issue a writ of mandamus or a writ, order or  direction  in  the  nature  of  mandamus commanding the respondents to implement the Family  Pension  and  gratuity  Scheme  in accordance  with  the  notification  dated 19.05.2009  issued  by  the  Awas  Evam  Vikas Parishad contained in Annexure No.5 to the writ  petition  and  to  give  the  benefit thereof to the petitioners in deference to the  judgment  and  order  dated  23.09.2014 passed by the Hon'ble Apex Court in Civil Appeal no.6307 of 2010.

(d)issue any other appropriate writ, order or direction which this Hon'ble court may deem just and necessary in the circumstances of the case may also be passed; and

(e) allow the writ petition with costs.”

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13. Both  the  writ  petitions  were  contested  by  the

State of U.P. The Division Bench of the High Court

vide its judgment dated 16.03.2018 allowed both the

writ petitions. The Division Bench took the view that

the Government Order No.1058 dated 08.12.2008 would

apply  in  its  entirety  to  the  employees  of  the

Parishad  by  virtue  of  statutory  Regulations,  dated

19.05.2009.  The  Division  Bench  held  that  the

exclusionary  part  under  the  Government  Order  dated

08.12.2008  insofar  as  it  exempts  its  applicability

upon the employees of Public Enterprises and local

bodies, would have to be read down and held to be

inapplicable,  so  far  as  employees  of  the  public

corporations  are  concerned.  It  held  that  the

employees of the Parishad would have to be treated at

par with the employees of the State Government and

the  Government  orders  issued  for  the  employees  of

Government  Corporations  etc.  by  bureau  of  Public

Enterprises  would  have  no  applicability.  Both  the

writ  petitions  were  allowed,  operative  portion  is

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contained in paragraph 41 which is to the following

effect:

“41. Accordingly, both 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 No.12645(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  U.P.  Avas  Evam  Vikas  Parishad Regulations dated 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.”  

14. These  SLPs  have  been  filed  challenging  the

Division Bench judgment dated 16.03.2018. Apart from

State of U.P., U.P. Avas Evam Vikas Parishad has also

filed SLP(C)Nos.4804 and 4815 of 2019. Other SLPs,

SLP(C)No.386 of 2019 (State of U.P. and Shivashray

Rai and others) and SLP(C)No.373 of 2019 (U.P. Avas

Evam Vikas Parishad and another vs. Shivashray Rai

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and  others)  have  been  filed  against  the  judgment

dated 26.11.2018 passed by the Division Bench of the

Allahabad  High,  Lucknow  Bench  in  Special  Appeal

No.610 of 2018.

15. Special Appeal No.610 of 2018 was filed by the

State  of  U.P.  challenging  the  judgment  of  learned

Single Judge dated 16.08.2017 passed in Writ Petition

No.9033(S/S) of 2016. Writ petition was filed by the

employees  of  the  U.P.  Awas  Evam  Vikas  Parishad

seeking  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

6th Pay Commission Recommendations w.e.f. 01.01.2006.

A mandamus was sought to apply the provisions of the

Government  Order  No.1508  dated  08.12.2008  on  the

employers and officers of the Parishad while suitably

reading  down  the  restrictive  provisions  about  its

application on the employees of the Board. The writ

petition was allowed by the learned Single Judge. A

mandamus  was  issued  to  the  respondents  to  grant

benefit of arrears of salary payable to the employees

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of the Board w.e.f. 01.01.2006 to 13.01.2010, and to

fix  their  pension/family  pension,  and  also  release

gratuity  in  accordance  with  the  provisions  of

Regulations  dated  19.05.2009.  Special  Appeal  filed

against the said judgment has been dismissed by the

Division Bench on 26.11.2018.

16. The issues raised in these SLPs filed against the

judgment dated 26.11.2018 are almost similar as have

been raised in SLP filed against the Division Bench

judgment dated 16.03.2018.

17. The facts of the Preetam Singh’s case as noticed

above indicate that the main issue which came to be

considered by this Court in Preetam Singh’s case was

as  to  whether  the  State  Government  has  any

jurisdiction to issue direction for non-implementing

pension/family  pension  and  gratuity  scheme  on  the

employees  of  the  Board.  The  High  Court  in  writ

petition of  Preetam Singh’s case has set aside the

orders of the State Government.  The orders of the

State Government dated 13.09.2005 and 12.07.2007 were

quashed and mandamus was issued directing the Board

to implement its pension/family pension and gratuity

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scheme in accordance with its Regulations framed on

05.11.1997.  This  Court  in  Preetam  Singh’s  case

dismissed the appeal of the State of U.P. affirming

the judgment of the High Court, the effect of which

judgment is that pension/family pension and gratuity

scheme as framed by the Board is to be implemented.

One of the submissions which was raised in  Preetam

Singh’s case on behalf of the State of U.P. is that

State Government had jurisdiction to issue direction

as contained in the Government order dated 13.09.2005

and 12.07.2007 to the Parishad to not to implement

pension/family  pension  and  gratuity  scheme  which

direction could have been issued under a statutory

provision, namely, Uttar Pradesh State Control Over

Public  Corporation  Act,  1975.  The  provision  of

Section 2 of the aforesaid Act has been noticed in

paragraph 13 of the judgment in Preetam Singh’s case.

Paragraph 13 of the judgment is as follows:

“13. In  raising  a  challenge  to  the impugned  judgment  rendered  by  the  High Court  on  16-1-20091,  it  was  the  vehement contention of the learned counsel for the State  of  Uttar  Pradesh,  that  the  scheme could not have been formulated, and given effect  to  in  the  absence  of  an  express

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approval by the State Government. Insofar as the instant contention is concerned, the learned  counsel  for  the  appellant  placed reliance on the Uttar Pradesh State Control Over  Public  Corporation  Act,  1975.  Our pointed  attention  was  invited  to  Section 2(1)  thereof,  which  is  being  extracted hereunder:

“2.  (1) Power  to  issue  directions  to statutory bodies.—Every statutory body (by whatever  name  called),  established  or constituted under any Uttar Pradesh Act, excepting  Universities  governed  by  the Uttar Pradesh State Universities Act, 1973 as  re-enacted  and  amended  by  the  Uttar Pradesh  University  (Re-enactment  and Amendment)  Act,  1974,  shall,  in  the discharge of its functions, be guided by such directions on questions of policies, as  may  be  given  to  it  by  the  State Government, notwithstanding that no such power has expressly been conferred on the State  Government  under  the  law establishing  or  constituting  such statutory body.”

(emphasis supplied)

Based on the aforesaid provisions, it was the submission of the learned counsel for the  appellant,  that  the  State  of  Uttar Pradesh,  through  its  Communications  dated 13-9-2005 and 12-7-2007, must be deemed to have  issued  directions  to  the  Vikas Parishad, restraining it from implementing the  Pension/Family  Pension  and  Gratuity Scheme. The aforesaid directions, according to the learned counsel, were binding on the Vikas Parishad.”

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18. This Court in Preetam Singh held that it is open

to  the  State  Government  to  issue  directions  on

question of policy to all the Public Corporations in

the State of Uttar Pradesh but the directions could

only  be  issued  in  respect  of  questions  of  policy

having a nexus to the “discharge of its functions”.

This  Court  held  that  functions  of  the  Board  are

relatable only to the functions stipulated in Section

15  of  the  1965  Act.  Paragraphs  14  to  16  are  as

follows:

“14. We  have  given  our  thoughtful consideration  to  the  first  contention advanced  at  the  hands  of  the  learned counsel for the appellant. There can be no doubt  that  it  is  open  to  the  State Government to issue directions on questions of policy to all the Public Corporations in the State of Uttar Pradesh, in furtherance of the mandate contained in Section 2(1) of the 1975 Act. It would however be pertinent to mention that the above directions could be issued only in respect of questions of policy having a nexus to the “discharge of its  functions”.  Insofar  as  the  Vikas Parishad is concerned, we are of the view that  the  functions  of  the  Vikas  Parishad are  relatable  only  to  the  functions stipulated in Section 15 of the 1965 Act.

15. Section  15  aforementioned  is  being reproduced hereunder:

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“15. Functions of the Board.—(1) Subject to the provisions of this Act and the rules and regulations, the functions of the Board shall be—

(a)  to  frame  and  execute  housing  and improvement schemes and other projects;

(b)  to  plan  and  coordinate  various housing  activities  in  the  State  and  to ensure  expeditious  and  efficient implementation of housing and improvement schemes in the State;

(c) to provide technical advice for and scrutinise various projects under housing and  improvement  schemes  sponsored  or assisted  by  Central  Government  or  the State Government;

(d)  to  assume  management  of  such immovable  properties  belonging  to  the State Government as may be transferred or entrusted to it for this purpose;

(e) to maintain, use, allot, lease, or otherwise  transfer  plots,  buildings  and other properties of the Board or of the State Government placed under the control and management of the Board;

(f) to organise and run workshops and stores for the manufacture and stockpiling of building materials;

(g) on such terms and conditions as may be agreed upon between the Board and the State  Government,  to  declare  houses constructed  by  it  in  execution  of  any scheme to be houses subject to the U.P. Industrial Housing Act, 1955 (U.P. Act 23 of 1955);

21

(h) to regulate building operations;

(i) to improve and clear slums;

(j)  to  provide  roads,  electricity, sanitation, water-supply and other civic amenities and essential services in areas developed by it;

(k)  to  acquire  movable  and  immovable properties for any of the purposes before mentioned;

(l) to raise loans from the market, to obtain  grants  and  loans  from  the  State Government, the Central Government, local authority and other public corporations, and  to  give  grants  and  loans  to  local authorities,  other  public  corporations, housing  cooperative  societies  and  other persons  for  any  of  the  purposes  before mentioned;

(m) to make investigation, examination or survey of any property or contribute towards  the  cost  of  any  such investigation, examination or survey made by  any  local  authority  or  the  State Government;

(n) to levy betterment fees;

(o)  to  fulfil  any  other  obligation imposed by or under this Act or any other law for the time being in force; and

(p) to do all such other acts and things as may be necessary for the discharge of the functions before mentioned.

22

(2) Subject to the provisions of this Act and  the  rules  and  regulations,  the  Board may  undertake,  where  it  deems  necessary, any of the following functions, namely—

(a) to promote research for the purpose of  expediting  the  construction  of  and reducing the cost of buildings;

(b) to execute works in the State on behalf  of  public  institutions,  local authorities and other public corporations, and departments of the Central Government and the State Government;

(c)  to  supply  and  sell  building materials;

(d)  to  coordinate,  simplify  and standardise  the  productions  of  building materials  and  to  encourage  and  organise the prefabrication and mass reduction of structural components;

(e)  with  a  view  to  facilitating  the movement of the population in and around any  city,  municipality,  town  area  or notified area, to establish, maintain and operate  any  transport  service,  to construct, widen, strengthen or otherwise improve  roads  and  bridges  and  to  give financial  help  to  others  for  such purposes;

(f) to do all such other acts and things as may be necessary for the discharge of the functions before mentioned.”

16. In  our  view,  the  State  of  Uttar Pradesh, had the right to issue directions only in respect of the functions assigned to the Vikas Parishad under Section 15 of

23

the 1965 Act. The conditions of service of employees, in our considered view, do not constitute  the  functions  of  the  Vikas Parishad,  and  as  such,  we  are  satisfied that  the  directions  contemplated  under Section 2(1) of the 1975 Act, do not extend to the directions issued by the State of Uttar Pradesh in the impugned Orders dated 13-9-2005 and 12-7-2007. We therefore find no merit in the first contention advanced by the learned counsel for the appellant.”

19. In  paragraph  16  of  the  judgment  as  extracted

above this Court held that “the conditions of service

of  employees,  in  our  considered  view,  do  not

constitute the functions of the Vikas Parishad”. This

Court also considered Sections 93 and 95 of the 1965

Act.  This  Court  held  that  the  Vikas  Parishad  is

vested with the right to make regulations, so as to

extend to its employees a scheme in the nature of

pension/family pension and gratuity scheme. Ultimate

directions  were  issued  in  paragraph  21  to  the

following effect:

“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.  This  Court  having entertained  the  petition  filed  by  the appellant, passed interim directions on 7- 8-2012, which had the effect of staying the

24

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, 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 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.”

20. Learned Advocate-General submitted that the view

as  expressed  by  this  Court  in  paragraph  16  that

25

conditions of service employees do not constitute the

functions of the Vikas Parishad and directions issued

on  13.09.2005  and  12.07.2007  could  not  have  been

issued  by  the  State  Government  are  the  views

expressed  by  this  Court  without  considering  the

relevant  statutory  provisions  of  1965  Act.  Under

Section 8 of 1965 Act, the Board may appoint officers

and servants of the Board subject to such control and

restrictions as may from time to time be imposed by

the State Government, by special or general orders.

Thus,  the  appointments  are  to  be  made  under  the

control  of  the  State  Government  which  clearly

indicate  that  State  can  issue  special  or  general

orders  with  regard  to  appointments  which  can  very

well include conditions of service of the employees

to be appointed. He submits that Section 92 of the

Act occurring in Chapter X provides for control of

State Government on Board and other local authority.

It  is  further  submitted  that  Section  94(2)(nn)

empowers the State to make rules on any matter for

which  regulation  may  be  made  by  the  Board  under

Section 95. Thus, the State Government had power to

26

make rules when the Board can make regulation with

regard  conditions  of  service  of  the  officers  and

servants of the Board, the power has clearly been

conceded  to  State  Government  to  make  rules  with

regard  to  conditions  of  service  of  officers  and

servants  of  the  Board.  It  is  submitted  that  in

Preetam Singh’s case the attention of the Bench is

not invited to Sections 8, 92 and 94(2)(nn) nor the

aforesaid  provisions  have  been  considered  in  the

judgment and had the Court adverted to the aforesaid

provisions it could not have held that conditions of

service  of  the  employees  do  not  constitute  the

functions of the Vikas Parishad. He further submits

that Entry 41 of List II of the VIIth Schedule of the

Constitution empowers the State Legislature to frame

law on public services and State has also executive

power on all subjects where it has legislative power,

thus, the State can exercise its executive power with

regard  to  public  services  which  include  service

conditions of the employees.  

21. He further submits that functions of the Board as

contemplated  under  Section  15  are  vide  enough  and

27

there are other functions entrusted to the Board in

the  provisions  of  the  Act  and  when  the  Board  is

empowered to make regulations it is also one of its

functions. It is submitted that the view expressed in

the  Preetam  Singh’s  case  in  paragraph  16  is  per

incuriam as it has been expressed without considering

relevant statutory provisions of Section 1965 Act as

noticed  above.  It  is  further  submitted  that  the

direction  issued  by  the  State  Government  would

prevail over Pension Regulations framed by the Board

on 19.05.2009.  

22. It  is  further  submitted  that  the  State  while

implementing  6th Pay  Commission’s  Report  had

implemented with regard to the employees of Board by

giving actual benefits w.e.f. 21.01.2010. He submits

that the State Government has ample jurisdiction to

issue  directions  with  regard  to  the  service

conditions of the employees, officers of the Board

and contrary view in Preetam Singh’s case needs to be

re-considered.

23. Shri  Nikhil  Majithia  learned  counsel  appearing

for the respondents submits that the question as to

28

whether  the  State  Government  has  power  to  issue

directions  to  Parishad  with  regard  to  the  service

conditions  of  its  employees  has  been  correctly

answered by this Court in  Preetam Singh’s case. He

submits that there is no error in the judgment of

this  Court  requiring  any  reconsideration.  It  is

submitted  that  none  of  the  conditions  for  making

reference to a larger Bench is satisfied in the facts

of the present case. Mere non-consideration of any

statutory  provision  is  no  ground  to  refer  the

question to a larger Bench. The central question in

the Preetam Singh’s case was that powers of the State

to issue directions with regard to service conditions

of  the  employees  of  the  Board  which  has  been

discussed  elaborately  and  answered.   Non-

consideration of a limb of argument which could have

been raised before the Court and has not been raised

and decided is not a ground for making reference.

Referring to Section 92 of the Act he submits that

direction under Section 92 shall relate to functions

of the Board as enumerated in Section 15 which does

not include any direction pertaining to conditions of

29

service of officers and servants of the Board. In

Civil  

Appeal of Preetam Singh the State in its pleading has

referred  to  Section  94(2)(nn)  of  1965  Act.  It  is

further submitted that issue of validity and legality

of Government Orders dated 13.09.2005 and 12.07.2007

attained  finality  by  the  order  of  this  Court  in

Preetam  Singh’s  case  judgment  and  their  validity

cannot be gone into in these proceedings. This Court

is not exercising any review jurisdiction as far as

Preetam  Singh’s  case judgment  is  concerned  and

therefore  the  question  of  determining  the  validity

and  legality  of  the  Government  Orders  dated

13.09.2005 and 12.07.2007 is not available to this

Court in the present proceedings.

24. Shri P.K. Jain, learned counsel appearing for the

respondents submitted that the State has the right to

issue  directions  only  in  respect  of  the  functions

assigned to the Board under Section 15 of the 1965

Act and the conditions of service of the employees do

not constitute the functions of the Vikas Parishad.

He submits that all the respondents have retired long

30

ago but their pensions have not yet been paid causing

great prejudice to them. The State has the right to

issue  directions  only  to  the  Vikas  Parishad  under

Section 15 of the 1965 Act. The conditions of service

of the employees do not constitute the functions of

the Vikas Parishad.  

25. We have considered the submissions of the parties

and perused the records.

26. This Court in the judgment in Preetam Singh after

considering the provisions of U.P. State Control Over

Public Corporation Act, 1975 and some provisions of

the 1965 Act laid down following:

(1) The conditions of service of the employees

do not constitute the functions of the Vikas

Parishad.

(2) The State Government can issue directions on

question of policy only with regard to the

specified  functions  as  contemplated  by

Section 15 of the 1965 Act.  

(3) The conditions of the service of employees

not being functions of Board under Section

15 of the Act, the State Government has no

jurisdiction to issue directions regarding

31

pension/family pension and gratuity of the

employees of the Parishad.  

27. It has been submitted by the learned Advocate-

General that the above proposition does not lay down

the correct law. The Bench hearing  Preetam Singh’s

case has not considered other relevant provisions of

the 1965 Act and has fell in error in holding that

the conditions of service of the employees is neither

the function of the Parishad nor the function of the

State Government.  

28. In Preetam Singh’s case, this Court has extracted

Section  15  of  the  1965  Act  and  held  that  the

conditions of the service of the employees is not the

function of the Parishad. We may first consider as to

whether the above view taken in the  Preetam Singh’s

case is correct or not.

29. Chapter  III  of  the  1965  Act  deals  with  the

functions and powers of the Board. It is true that

Section 15 does not include conditions of the service

of the employees as one of the functions of the Board

but Section 15(1) begins with words “subject to the

provisions  of  this  Act  and  the  rules  and

32

regulations”,  thus,  functions  of  the  Board  as

enumerated  in  Section  15  are  subject  to  the

provisions of 1965 Act. Thus, functions of the Board

as enumerated in Section 15 are not exhaustive and

have to be read along with functions of the Board as

per  other  provisions  of  the  Act,  rules  and

regulations. Section 8 of the Act is an appropriate

illustration  for  the  present  purpose.  Section  8

provides  for  appointment  of  officers  and  servants.

Section 8 of the Act is as follows:

“8.  Appointment of officers and servants.- (1)Subject to such control and restrictions as may from time to time be imposed by the State  Government,  by  special  or  general orders, the Board may appoint such officers and servants as it considers. necessary for the efficient performance of its functions.

(2)  The  Board  may,  with  the  previous approval of the State Government, appoint a servant  of  the  Central  or  the  State Government or of a local authority on any of the posts under it on such terms and conditions as may be agreed upon.”

30. Section  8  as  extracted  above  indicates  that

appointment of officers and servants is also one of

the functions of the Board. Supposing Board does not

33

appoint  any  officer  and  servant  can  it  carry  out

functions as entrusted by the Act on it, answer is

obviously  no.  Thus,  appointment  of  officers  and

servants is one of the functions of the Board and

when power of appointment is given, power of laying

down the conditions of service is implicit in it. In

case  where  there  are  no  rules  or  regulations  for

laying  down  terms  and  conditions  of  officers  and

employees of the Board, the Board can regulate the

terms and conditions even by the executive orders. In

Preetam Singh’s case attention of this Court was not

drawn on the expression “subject to the provisions of

the Act, rules and regulations” which was expression

of extreme importance and clearly intended to amplify

and add other functions to the Board as provided in

the Act, rules and regulations. Provisions of Section

8(2) of 1965 Act indicates that the Board with the

previous approval of the State Government appoint a

servant of the Central or the State Government or of

a local authority or any of the posts under it on

such terms and conditions as may be agreed upon.

34

31. Thus, in case of appointment under Section 8(2)

terms and conditions of appointment has to be laid

down  although  with  the  agreement  as  agreed  upon.

Section  8(2)  is  clearly  indicative  that  terms  and

conditions of the appointment are not alien to the

functions of the Board. Section 95(1) which empowers

the Board to frame regulations is as follows:

“Power  to  make  regulations.-  (1)  The Board may, by notification in the Gazette, make regulations providing for –

(a)………………………

………………………

(f) the conditions of service of officers and servants of the Board;

(g)……………………

……………………”

32. As  noted  above  Section  15(1)  begins  with  the

words “subject to the provisions of this Act and the

rules and regulations”, thus, when Section 95(1)(f)

provides   making  regulations  by  the  Board  for

providing the conditions of officers and servants of

the Board, making regulations on the above subject is

also a function of the Board. Section 95, thus, has

35

to be read in functions of the Board as contemplated

by  Section  15.  The  function  contemplated  by

regulations has also to be added which is simple and

plain meaning of the provision. The Bench deciding

Preetam  Sigh’s  case did  not  refer  to  Section  8,

Section  95(1)(f)  and  without  adverting  to  the

relevant  provisions  which  clearly  indicate  that

conditions  of  service  of  the  employees  is  also  a

function  of  the  Board,  the  Bench  deciding  Preetam

Singh’s case fell in error in holding that conditions

of service do not constitute functions of the Board

which opinion is not as per the provisions of the

1965 Act. Thus, the above opinion expressed by the

Bench in Preetam Singh’s case is without referring to

Section 8, Section 95(1)(f).  

33. We may also refer to Section 92 which deals with

control of the State Government over the Board and

other  local  authorities.  Section  92(2)  is  relevant

for the present case. Section 92 of the Act has also

not been referred. It was contended before us that

the directions of the State Government pertaining to

service conditions of employees are not contemplated

36

by Section 92(2). Section 92(2) has its operation for

carrying  out  the  purpose  of  this  Act.  The  words

“purpose of this Act” are vide enough which encompass

in itself the appointment of officers and staff of

the Board. Hence, the State Government can as well

issue  directions  under  Section  95(2)  regarding

appointment of officers and servants. Section 92 has

also not been considered in Preetam Singh’s case.   

34. In view of the above, we are of the considered

opinion that the Bench in Preetam Singh’s judgment in

laying  down  that  conditions  of  service  of  the

employees  do  not  constitute  the  functions  of  the

Vikas Parishad erred, it having not considered other

provisions  of  Sections  8,  92,  95(1)(f)  and  the

expression  subject  to  the  provisions  of  this  Act,

rules and regulations as occurring in Section 15(1).  

35. In  event  the  functions  of  the  Board  includes

conditions of the service of the employees of the

Board  the  State  Government  shall  have  jurisdiction

under  1975  Act  as  well  under  1965  Act  to  issue

directions to the Board with regard to appointment of

officers and servants of the Board, the control and

37

restrictions  by  the  State  Government  are  expressly

provided  in  Section  8(1)  when  the  appointment  of

officers  and  servants  by  the  Board  is  expressly

subject to control and restrictions as may from time

to time be imposed by the State Government, it cannot

be said that the State Government had no jurisdiction

to issue directions regarding service conditions of

the employees. The State Government has been given

express rule making power with regard to all subject

where  regulations  may  be  made  by  the  Board  under

Section  95.  Section  94(1)  and  (2)(nn)  provides  as

follows:

“94.Power to make Rules.- (1) The State Government  may,  by  notification  in the Gazette, make  rules  for  carrying  out the purposes of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for –

(a)…………    ………… (nn)  any  matter  for  which  regulation

may be made by the Board under Section 95;  …………………”

36. As  noted  above,  the  Board  has  power  to  frame

regulations  regarding  conditions  of  service  of

officers  and  servants  of  the  Board,  the  State

38

Government  shall  have  power  to  make  rules  on  the

above subject. Further, by virtue of Section 95(2)

rules  by  the  State  has  overriding  effect.  Section

95(2) is as follows:

“Section  95(2)  If  any  regulation  is repugnant to any rule than the rule whether made before or after the regulation shall prevail  and  the  regulation  shall  to  the extent of the repugnancy be void.”

37. The above section is also indicative that there

is no lack of jurisdiction in the State regarding

service conditions of the officers and the servants

of the Board. The  State  Legislature  have

legislative competence under Entry 41 List 5 of the

VIIth Schedule of the Constitution, it has also the

executive power to issue orders by virtue of Article

162  of  the  Constitution.  The  State,  thus,  can

exercise its jurisdiction under Article 162 to issue

executive orders regulating the conditions of service

of the officers and servants employed in the affairs

of the State.  

38. A Constitution Bench of this Court in  Rai Sahib

Ram Jawaya Kapur and others vs. The State of Punjab,

AIR 1955 SC 549, had occasion to examine Article 162

39

of  the  Constitution.  Following  was  laid  down  in

paragraph 7:

“(7)………Article 162, with which we are directly  concerned  in  this  case,  lays down :

"Subject  to  the  provisions  of  this Constitution,  the  executive  power  of  a State  shall  extend  to  the  matters  with respect to which the Legislature of the State has power to make laws :

Provided  that  in  any  matter  with respect  to  which  the  Legislature  of  a State and Parliament have power to make laws,  the  executive  power  of  the  State shall be subject to, and limited by, the executive  power  expressly  conferred  by this Constitution or by any law made by Parliament upon the Union or authorities thereof."

Thus under this article the executive authority  of  the  State  is  executive  in respect to matters enumerated in List II of Seventh Schedule………”

39.  The  Constitution  Bench  further  held  that

executive function comprises both the determination

of the policy as well as carrying it into execution.

In paragraph 13 the Constitution Bench laid down:

“(13) The limits within which the executive Government  can  function  under  the  Indian Constitution  can  be  ascertained  without much difficulty by reference to the form of

40

the  executive  which  our  Constitution  has set up. Our  Constitution,  though  federal  in  its structure,  is  modelled  on  the  British Parliamentary system where the executive is deemed to have the primary responsibility for the formulation of governmental policy and  its  transmission  into  law  though  the condition precedent to the exercise of this responsibility  is  its  retaining  the confidence of the legislative branch of the State.

The  executive  function  comprises  both the determination of the policy as well as carrying it into execution. This evidently includes the initiation of legislation, the maintenance  of  order,  the  promotion  of social and economic welfare, the direction of foreign policy, in fact the carrying on or  supervision  of  the  general administration of the State.”

40. This Court in  A.B. Krishna and others vs. State

of Karnataka and others, (1998) 3 SCC 495, had laid

down  that  it  is  the  primarily  the  legislature,

namely, Parliament or the State Legislature Assembly,

in whom power to make law regulating the recruitment

and  conditions  of  service  of  persons  appointed  to

public  services  and  posts,  in  connection  with  the

affairs of the Union or the State, is vested.  

41. When  the  power  to  make  law  regulating  the

recruitment and conditions of service of persons is

vested  in  the  State  Legislature  it  has  ample

41

jurisdiction to exercise executive power by issuing

orders under Article 162.

42. The  regulations  dated  19.05.2005  regarding

pension/family pension and gratuity scheme which have

been  relied  in  the  Preetam  Singh’s  case itself

contemplates that pension/family pension and gratuity

scheme as admissible to officers and servants of the

Government shall also apply to Board. The regulations

clearly mention that the Government orders shall also

be admissible to the officers and employees of the

Board and at serial No.5 following was included “all

orders of financial department of U.P. as relief to

pension/family  pension  and  gratuity”.   When  the

Regulations  2009  itself  contemplates  issuance  of

Government  order  regulating  pension/family  pension

and gratuity which was to be made applicable to the

officers  and  servants  of  the  Board,  it  does  not

appeal to reason that the State Government has no

power  to  issue  orders  pertaining  to  pension/family

pension and gratuity.  

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

43

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 ?

44. Let the papers of these cases be placed before

the  Hon’ble  the  Chief  Justice  for  constituting  a

larger  Bench.   We  also  request  the  Hon’ble  Chief

Justice to constitute the larger Bench on an earlier

date looking into the fact that issues which are to

be  answered  in  the  present  SLPs  are  the  issues

pertaining to mostly retired employees whose payment

of arrears of pension/family pension and gratuity are

involved.

......................J.                                   ( ASHOK BHUSHAN )

......................J.                                   ( M.R. SHAH ) New Delhi, February 10, 2020.