New Okhla Industrial Development Authority & Anr. vs B D Singhal & Ors.

Doctrines/Principles: Principle of promissory estoppel – When applicable and when not applicable – Held: For the principle of promissory estoppel to apply, one party must have made an unequivocal promise, intending to create or affect a legal relationship between the parties – The principle of promissory estoppel will not apply if the communication issued was either a proposal or a recommendation.

Doctrines/Principles: Doctrine of legitimate expectation – Held: The doctrine of legitimate expectation is grounded in fairness and reasonableness – There is a legitimate expectation that the actions of the State are fair and reasonable. Government Orders/Notifications/Circulars: Government order – When retrospectively applicable – Held: Government order can be given retrospective application only if expressly stated or inferred through necessary implication.

Allowing the appeals, the Court

HELD: 1. Whether the age of superannuation should be enhanced is a matter of policy. If a decision has been taken to enhance the age of superannuation, the date with effect from which the enhancement should be made falls within the realm of policy. The High Court in ordering that the decision of the State government to accept the proposal to enhance the age of superannuation must date back to 29 June 2002 evidently lost sight of the factual background, more specifically (i) the rejection of the original proposal on 22 September 2009; and (ii) the judgment of the Division Bench of the High Court dated 17 January 2012 refusing to set aside the order rejecting the proposal on 22 September 2009 which has attained finality. But there is a more fundamental objection to the basis of the decision of the High Court. The infirmity in the judgment lies in the fact that the High Court has trenched upon the realm of policy making and has assumed to itself, jurisdiction over a matter which lies in the domain of the executive. Whether the age of superannuation should be increased and if so, the date from which this should be effected is a matter of policy into which the High Court ought not to have entered. [Para 19][995-B-D]

2. The factual reasons which the High Court has indicated are specious. The High Court has termed the decision to give prospective effect to the enhancement of the age of superannuation from 30 September 2012 as arbitrary on the ground that the government should have “acted instantly” when the resolution was received from NOIDA, and that there was no justification not to grant retrospective effect when the resolution had been received “more than three years back”. Both these factors are erroneous. As a matter of fact, the resolution of the Board of NOIDA dated 9 July 2012 (at its 176 th meeting) was forwarded to the State government on 17 July 2012 and a decision was taken in about two months from the date of receipt of the proposal. The High Court’s observation on the delay of three years in taking a decision on the resolution of NOIDA is in reference to the 2005 resolution, which was rejected on 22 September 2009. The Government resolution of 2012 was impugned before the High Court, and the 2009 rejection order had attained finality in view of the judgment of the division bench of the High Court on 17 January 2012 which was not challenged before this court. [Para 20][995-E-H]

3. Whether the decision to increase the age of superannuation should date back to the resolution passed by NOIDA or should be made effective from the date of the approval by the State government was a matter for the State government to decide. Ultimately, in drawing every cut-off, some employees would stand on one side of the line while the others would be positioned otherwise. This element of hardship cannot be a ground for the High Court to hold that the decision was arbitrary. When the State government originally decided to increase the age of superannuation of its own employees from fifty-eight to sixty years on 28 November 2001, it had left the public sector corporations to take a decision based on the financial impact which would result if they were to increase the age of superannuation for their own employees. [Para 21][996-A-C]

4. From time to time the authorities of the State took a decision bearing upon the exigencies of service prevailing in each organisation. Different corporations of the State are governed by their service rules and regulations, and by the exigencies of service. The State government had evidently determined that it was for each organisation to consider and determine the impact of the financial burden, and based on that the organisation was to submit a proposal for the approval of the government. [Para 22][996-C, E-F]

5. The High Court’s observation that the Government order on 30 September 2012 increasing the age of superannuation prospectively is arbitrary seems to be based on the premise that the respondent-employees have a vested right to the increase in the age of retirement on the passage of the resolution by NOIDA. However, Section 19 of the UP Industrial Area Development Act 1976 stipulates that regulations – which would include amendments as in this case – will require the previous approval of the State Government. The employees will have a vested right to the increased age of superannuation only after the service regulations are modified upon approval of the State Government, and from such date as maybe prescribed by the Government. Para 1(ii) of the government order issued on 30 September 2012 clearly and in unambiguous terms states that the order shall come into force prospectively. The government order can be given retrospective application only if expressly stated or inferred through necessary implication. Therefore, the respondentemployees could not have claimed a vested right that the enhancement in the age of retirement should be made effective from the date on which NOIDA had resolved to submit a proposal for the approval of the government. [Para 23][996-G-H; 997-A-B]

6. The argument of the respondents that the appellantauthority is estopped from claiming that the government order issued on 30 September 2012 cannot be given retrospective effect from 9 July 2012 since the Board resolution proposed an increase in the retirement age of its employees with ‘immediate effect’ is unsustainable. For the principle of promissory estoppel to apply, one party must have made an unequivocal promise, intending to create or affect a legal relationship between the parties. The recommendation of NOIDA cannot create or alter the legal relationship since it is subject to the approval of the government. The principle of promissory estoppel will not apply if the communication issued was either a proposal or a recommendation. Since the enhancement of the age of superannuation is a ‘public function’ channelised by the provisions of the statute and the service regulations, the doctrine of promissory estoppel cannot be used. Though NOIDA sought the approval of the State government for the enhancement with ‘immediate effect’, it never intended or portrayed to have intended to give retrospective effect to the prospectively applicable Government order. The representation of NOIDA could not have given rise to a legitimate expectation since it was a mere recommendation which was subject to the approval of the State Government. Hence, the doctrine of legitimate expectation also finds no application to the facts of the present case. [Para 24][997-C-E; 998-C-D]

7. The argument of the employees that since they had moved the Chief Minister with a representation in August 2012 before their date of superannuation which was to fall at the end of the month and that they should have the benefit of the enhancement in the age of superannuation has no substance. On

31 August 2012, the respondents moved the High Court but no interim relief was granted to them and they attained the age of superannuation. They have not worked in service thereafter. Since the High Court‘s judgment dismissing the challenge to the government order dated 30 September 2012 has attained finality, the submission cannot be accepted. [Para 26][999-F-G] State of Uttar Pradesh v. Dayayanand Chakrawarthy (2013) 7 SCC 595 – distinguished.

Monnet Ispat and Energy Ltd. v. Union of India (2012)

11 SCC 1:[2012] 7 SCR 644 and State of Jharkhand v. Brahmputra Metallics Ltd., Ranchi, [Decision of Supreme Court in Civil Appeal No. 3860-62 of 2020] – relied on.

P.Mahendran v. State of Karnataka (1990) 1 SCC 411: [1989] 2 Suppl. SCR 385; C.Gupta v. Glaxo-Smithkline Pharmaceuticals Ltd. (2007) 7 SCC 171: [2007] 7 SCR 800; Harwinder Kumar v. Chief Engineer,Karmik (2005)

13 SCC 300: [2005] 5 Suppl. SCR 317; U.P Jal Nigam v. Jaswant Singh (2006) 11 SCC 464: [2006] 8 Suppl. SCR 916; and U.P Jal Nigam v. Radhey Shyam Gautam (2007) 11 SCC 507: [2007] 4 SCR 583 – referred to.