Orissa Khadi and Village Industries Board Act,1955 – s.36 – Orissa Khadi and Village Industries Board Regulations, 1960 – Regulation 40 and 52 – State Government decided not to introduce pension scheme for the employees of Orissa Khadi and Village Industries Board due to the financial hardship – Respondents challenged it before the High Court – The Single Judge issued directions to the State Government to amend the Regulations of 1960 and to take appropriate steps to incorporate the pension scheme for the Board’s employees at par with the State Government employees – On appeal, the Division Bench of High Court dismissed the appeal and held that the direction of the Single Judge was only advisory in nature and the State Government shall honour the same while keeping in view the interest of the retired employees – In appeal before the Supreme Court, the State Government contended before the Supreme Court that the High Court was not justified in issuing such directions, which are contrary to the regulations that rule out pensionary rights to Board employees – Held: Board has been established under enactment of the State, it could be considered to be an instrumentality of the State, its distinct characteristic of being a Board established with particular aim and objective cannot be ignored – The employees of the Board cannot be treated as State Government employees in all respects just because the State has established the Board – Regulation 40 starts with exception clause, making that provision subject to other provisions of the Regulation – Regulation 52 specifically provides that the employees of the Board shall not be entitled to any pension – Further held, mandamus could not have been issued to the State to carry out amendment – Under Art. 142, the Supreme Court cannot issue directions in violation of statutory provisions – Orders of High Court were set aside. Allowing the appeal, the Court
HELD: 1. The contentions urged on behalf of the respondents, seeking to put the employees of the Board at par with the employees of the State Government for all purposes, carry their own shortcomings. Even if Orissa Khadi and Village Industries Board has been established under an enactment of the State and for several relevant factors, it could be considered to be an instrumentality of the State, its distinct characteristic of being a Board established with particular aim and objective cannot be ignored altogether. The Board being a body corporate, incorporated by its name, has been established to carry out the purposes of the Act of 1955 and not beyond. In view of its independent corporate entity and existence, the provisions have been made in the Act of 1955 for making regulations by the Board consistent with the Act of 1955 and rules made thereunder with the previous sanction of the State Government, where the Regulations could provide, inter alia, for remuneration, allowances and other conditions of service of the staff of the Board (vide Section 36 of the Act). The Regulations of 1960 were framed accordingly. Therein, even while otherwise applying a substantial part of the Rules in the Orissa Service Code mutatis mutandis to the employees of the Board, Regulation 40 itself starts with a clause of exception, making that provision subject to the other provisions of the Regulations. Then, in Regulation 52 it has specifically been provided that the employees of the Board shall not be entitled to any pension except gratuity and CPF benefits; and further provisions have been made for the purpose of subscription/contribution to CPF. Thus, even when the State has established the Board to carry out its obligations in terms of Article 43 of the Constitution of India, it cannot follow as a corollary that the employees of this body corporate have to be treated as State Government employees in all respects. Such a corollary proposition would practically amount to merging of the Board with the State Government; rather making it as one of the Departments of the Government. This, in the face of existing statute, cannot be done. That being the position and when Regulations in question specifically make a distinct provision as regards retiral benefits, the same cannot be ignored by any stretch of arguments. [Para 16.1][1076-C-H; 1077-A-B]
2. Putting it differently, even if development of khadi and cottage industry is a Directive Principle of State Policy, it does not follow as a corollary that if the State establishes a Board or any organisation to carry out the obligations under such Directive Principles, it cannot make separate arrangements as regards the service conditions of the employees of such a Board or organisation. Significantly, Regulation 40 of the Regulations of 1960 starts with an exception clause and while general conditions of service of the Board’s employees have been provided in terms of the service conditions of the employees of the State Government, the provision is subject to the other provisions of the Regulations. Hence, the other provision, that is the one contained in Regulation 52, cannot be ignored. [Para 16.1.1] [1077-B-D]
2. In regard to the submissions made on behalf of the State that the aforesaid existing Regulation 52 had neither been challenged nor declared invalid, it has been suggested on behalf of the respondents that when the employees had regularly been raising the demand for pension by way of representations and had taken up litigation too, challenge to the contrary provisions is inherent in their demands/prayers. These submissions have only been noted to be rejected for more than one reason. First, that merely making a prayer contrary to the existing provision in the statute does not carry in itself a challenge to the provision. Secondly, for challenging a particular provision, specific case is required to be made out of either want of statutory powers or of violation of any constitutional mandate. Neither any such ground of challenge had been urged nor could be assumed. Thirdly, it is ex facie evident that all through the prayer had been for amendment of Regulation 52 and not of declaring the same in its existing frame as being invalid. A prayer for amendment of the Regulation cannot be equated with a prayer to declare the same as invalid. As noticed hereinbefore, the State Government’s denial of the proposed alteration was essentially based on its disagreement to alter the service conditions with effect from 01.04.1976. Viewed from any angle, invocation of the principles forbidding hostile discrimination remains baseless and the contentions urged on that basis are required to be rejected. [Para 16.2][1077-D-H; 1078-A]
3. The other factor indicated on behalf of the respondents that a small number of affected employees may not bring about much financial burden on the State hardly make out a case for issuing a mandamus to the State to amend the Regulations. Whether to amend the Regulations or not, in the scheme of Act of 1955 as also the Regulations of 1960, is required to be left to the State and for that matter, the number of employees to be affected/benefitted is not of much relevance. In this regard too, as noticed hereinbefore, apparently the objections of the State were against retrospective amendment of the Regulations and thereby allowing pension with effect from 01.04.1976. Moreover, the indications in the referred communications that such a prescription is likely to bring about a huge amount of administrative trouble to the Government cannot be dubbed as mere pretence or a bogus alibi. This Court would hasten to observe that irrespective of these observations and irrespective of the result of this litigation, nothing would prevent the State Government to carry out the amendment in the form suggested or in any other modified form, if the State Government would be willing to do so. The only question in the present appeal is as to whether a mandamus could have been issued to the State to carry out amendment. As noticed, the answer could only be in the negative. [Para 19][1079-D-H]
4. For what has been discussed hereinabove, this Court is clearly of the view that the direction issued in the impugned order dated 25.10.2010 by the Single Judge could not have been approved. The Division Bench of the High Court was conscious of the fact that such a mandamus cannot be issued so as to direct the State Government to carry out a particular amendment and, therefore, in the impugned judgment and order dated 20.12.2012, termed such a direction as being “advisory” in nature. However, the Division Bench went miles ahead in the very next proposition while observing that the State Government “shall” carry out this direction. Converting an advice to the State Government into a mandate in this manner, with great respect, is neither permissible nor countenanced by law. [Para 21][1080-B-D]
5. Under Article 142 of the Constitution of India, this Court cannot issue directions in violation of the statutory provisions; and sympathy or sentiment, by itself, cannot be a ground for passing an order beyond and contrary to the legal rights. [Para 22][1080-F]
D. S. Nakara and Ors. v. Union of India (1983) 1 SCC
305 : [1983] 2 SCR 165; State of Jharkhand and Ors. v. Jitendra Kumar Srivastava and Anr. (2013) 12 SCC
210 : [2013] 8 SCR 177; Deokinandan Prasad v. State of Bihar (1971) 2 SCC 330 : [1971] Suppl. SCR 634; Haryana State Minor Irrigation Tubewells Corporation and Ors. v. G. S. Uppal and Ors. (2008) 7 SCC 375 : [2008] 6 SCR 662; Punjab State Cooperative
Agricultural Development Bank Ltd. v. Registrar, Cooperative Societies and Ors. (2022) 4 SCC 363 – held inapplicable.
Air India v. Nergesh Meerza and Ors. (1981) 4 SCC
335 : [1982] 1 SCR 438; Gujarat State Khadi
Gramodyog Board v. Gujarat State Khadi Gramodyog Pensioners Association 2004 SCC OnLine Guj 105; University of Delhi v. Shashi Kiran and Ors. 2022 SCC OnLine SC 594 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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