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Supreme Court of India
New Okhla Industrial Development … vs B.D. Singhal on 15 July, 2021Author: Hon’Ble Dr. Chandrachud
Bench: Hon’Ble Dr. Chandrachud, M.R. Shah
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 2310 of 2021
(Arising out of SLP(C) No 11793 of 2018)
New Okhla Industrial Development Authority & Anr. …Appellants
Versus
B D Singhal & Ors. …Respondents
WITH
Civil Appeal No. 2311 of 2021
(Arising out of SLP (C) No.3861 of 2020)
JUDGMENT
Dr Dhananjaya Y Chandrachud, J
1 On 30 September 2012, the Government of Uttar Pradesh acceded to a
proposal of the Appellant to enhance the age of superannuation of its employees
from fifty-eight to sixty years, prospectively. A Division Bench of the High Court of
Judicature at Allahabad set aside the decision of the State government to give
prospective effect to the enhancement in the age of superannuation and in the
exercise of its power of judicial review under Article 226 of the Constitution
Signature Not Verified
Digitally signed by
directed that retrospective effect be given to the Government Order from 29
Sanjay Kumar
Date: 2021.07.15
13:55:52 IST
Reason:
1
September 2002. The appeals by New Okhla Industrial Development Authority1
and the State of Uttar Pradesh question the correctness of this determination.
Simply put, the appeals raise the issue as to whether the High Court has
transcended the limits of its power of judicial review.
I The Facts
2 The New Okhla Industrial Development Authority is constituted under the
provisions of the UP Industrial Area Development Act 19762. The object was to
constitute an authority for the development of certain areas of the State notified
under Section 3 of the Act, into industrial and urban townships. The legislation
provides for the constitution of the authority, its functions, powers, and for the
appointment of the staff members. While the administrative head is appointed by
the State government, Section 5 of the Act provides for the appointment of the
staff:
“5. Staff of the Authority. – (1) Subject to such control and
restrictions as may be determined by general or special
orders of the State Government, the Authority may appoint
such number of officers and employees, as may be
necessary for the performance of its functions, and may
determine their grades and designations.
(2) Subject as aforesaid the officers and other employees of
the Authority shall be entitled to receive from the funds of the
Authority, such salaries and allowances and shall be
governed by such other conditions of service as may be
agreed upon with the Authority.”
1
“NOIDA”.
2
“the Act”.
2
Section 19 enables the authority, with the previous approval of the State
government to frame regulations for the administration of the affairs of the
authority. Section 19 reads as follows:
“19. Power to make regulations. – (1) The Authority may,
with the previous approval of the State Government, make
regulation not inconsistent with the provisions of this Act or
the rules made thereunder for the administration of the affairs
of the Authority.
(2) In particular, and without prejudice to the generality of the
foregoing power, such regulation may provide for all or any of
the following matters, namely,-
(a) the summoning and holding of meetings of the Authority,
the time and place where such meetings are to be held, the
conduct of business at such meetings, and the number of
members necessary to form a quorum thereat;
(b) the powers and duties of the Chief Executive Officer;
(c) the form of register of application for permission to erect a
building;
(d) the management of properties of the Authority ;
(e) fees to be levied in the discharge of its functions;
(f) such other matters as are to be provided for in regulation.”
In pursuance of its power under Section 9 of the Act, the Authority framed the
New Okhla Industrial Development Authority Service Regulations, 1981 3
governing recruitment, appointment, pay, and other service conditions of the
staff. Regulation 25 of the Noida Regulations, 1981 states that the age of
superannuation of the employees is fifty eight. It reads as follows:
“Retirement 25. An employee shall retire at the age of fifty-
eight years.”
3
“NOIDA Regulations, 1981”.
3
3 On 28 November 2001, the State government issued a notification 4
enhancing the age of retirement of ‘Government servants’ from fifty-eight to sixty
years. Pursuant to this, Fundamental Rule 56A was amended on 27 June 2002
enhancing the age of superannuation of government servants to sixty years with
effect from 28 November 2001.
4 On 29 June 2002, the Board of NOIDA resolved to recommend that the
age of superannuation of its employees should be increased from fifty-eight to
sixty years. A recommendation to that effect was submitted to the State
government on 22 March 2005, since an amendment of the NOIDA
regulations,1981 would require the previous approval of the State government in
terms of Section 19 of the Act.
5 On 2 September 2005, the State government informed NOIDA that the
decision on its proposal was deferred. Eventually, on 22 September 2009, the
State government rejected the proposal to enhance the age of retirement of
NOIDA employees. Challenging the decision of the State government,
proceedings were initiated under Article 226 of the Constitution before the High
Court of Judicature at Allahabad 5 by certain employees seeking:
(i) A Writ of certiorari to quash the government order dated 22 September
2009; and
(ii) A Writ directing the respondents to those proceedings not to retire the
employees at the age of fifty-eight and to allow them to continue till they
attain the age of sixty years.
4
No. 1098/Pers-1/2001
5
Writ Petition No. 48162/2010.
4
6 A Division Bench of the High Court rendered judgment in the writ
proceeding on 17 January 2012 by which it directed NOIDA to consider the issue
in its next Board meeting after taking into account the financial burden that may
be occasioned to the authority by an increase in the age of retirement. The High
Court specifically left it open to the government to consider whether to give effect
to the increase in the age of retirement from the date on which NOIDA resolved
to bear the financial burden or from such other date as the government may find
expedient. As para 13 of the operative directions indicates:
“13. Having regard to facts and circumstances, we dispose of
the writ petition with directions that NOIDA may consider the
matter in its next Board meeting, taking into account its earlier
resolution made in the year 2002, to bear the financial
burden, after financial assessment of such burden, and the
effect of increase of retirement age on other employees. It
may thereafter refer the matter to the concerned
Administrative Department of the State Government for its
evaluation and recommendation, and for forwarding the same
to the State Government for its approval. We also direct that if
such a decision is taken by the State Government, it will be
open to the State Government to consider to give effect to·
the increase in the age of retirement with effect from the date
when the NOIDA had resolved to bear the financial burden, or
from any such date, which the State Government may find it
expedient.”
7 On 9 July 2012, the Board of NOIDA at its 176th meeting resolved to
recommend to the State government to increase the age of retirement for its
employees from fifty-eight to sixty years “with immediate effect”. The resolution
was communicated to the State government by a letter dated 17 July 2012 which,
in its material segment reads as follows:
“…the Board in its 176th Meeting held on 9.7.2012 has
passed a resolution proposing to increase the age of
superannuation from 58 to 60 years (attested copies of the
5
agenda and the Minutes of the Board resolution are
enclosed), wherein it is clearly stated that the financial burden
on account of increasing the age of retirement from 58 to 60
years would be borne by the Authority from its own resources
and no financial aid of any kind would be taken from the State
Government either at present or in the future. Therefore, it is
requested that the increase in the age of retirement of the
officers I employees of the Authority be increased from 58 to
60 years with immediate effect.”
8 On 27 August 2012, a writ petition was instituted by the first and second
respondents to (i) challenge the order of the State government dated 22
September 2009 rejecting the original proposal for enhancement of the age of
retirement; and (ii) for a direction not to retire the first and second respondents at
the age of fifty-eight and to allow them to continue until the age of sixty. Now, at
this stage it is material to take note of certain facts pertaining to the first and
second respondents. The second respondent was appointed in service on 21
March 1977 (his date of birth being 18 August 1954). The first respondent was
appointed on 6 March 1980 (his date of birth being 15 August 1954). Both the
employees were due to retire on 31 August 2012 on attaining the then prevailing
age of superannuation. On 31 August 2012, notice was issued on the writ petition
but no interim order was passed resulting in both of them superannuating on 31
August 2012.
9 On 30 September 2012, the Government of Uttar Pradesh acceded to
NOIDA’s proposal for enhancing the age of retirement to sixty years. However,
this was expressly made prospective in terms of the paragraph 1 (ii), which reads
as follows:
6
“(ii) This provision shall come into force in the NOIDA with
immediate effect (from the date of issue of this Govt. order)
and there shall not for any retrospective effect.”
10 The petition before the High Court was amended to incorporate a relief
seeking to quash paragraph 1(ii) of the order of the State government dated 30
September 2012. A Division Bench of the High Court at Lucknow allowed the writ
petition and struck down the provisions of para 1(ii). While doing so the High
Court directed that the increase in the age of superannuation to sixty years shall
have retrospective effect from 29 June 2002, and the first and second
respondents would be deemed to have worked until the extended age of
retirement. Their benefits were directed to be computed accordingly. This led to
the filing of Special Leave Petitions before this court under Article 136. Assailing
the judgment of the High Court, a companion petition has been filed by the
Government of Uttar Pradesh. While issuing notice on 19 November 2018 on
NOIDA’s Special Leave Petition, this Court granted an ad interim stay of the
judgment of the High Court.
II The Contentions
11 Challenging the judgment of the High Court, Mr Ravindra Kumar, learned
Counsel appearing on behalf of NOIDA has urged the following submissions:
(i) The Service Regulations and consequently amendments to them are in
the nature of subordinate legislation. No part of the amended Regulations
could have been struck down –para 1(ii) in this case – unless they were
declared to be ultra vires the provisions of the Constitution or the parent
7
Statute. There is no such declaration by the High Court while delivering the
impugned judgement;
(ii) The High Court has committed a manifest error while directing that the
revision in the age of the retirement shall apply retrospectively with effect
from the date of the Resolution dated 29 June 2002. While issuing such a
direction, the High Court failed to consider the following:
(a) The Government Order dated 30 September 2012 was issued
approving the recommendation of NOIDA dated 17 July 2012
and not in the context of the earlier recommendation dated 29
June 2002;
(b) The earlier recommendation dated 29 June 2002 had been
rejected by the State Government on 22 September 2009.
The Writ Petition 6 which had been filed challenging the State
government’s rejection order dated 22 September 2009 was
decided on 17 January 2012, much before the filing of the writ
petition by first and second respondents on 27 August 2012 in
which the impugned judgment was delivered;
(c) In the above Writ Petition though a prayer was made to quash
the Government Order dated 22 September 2009, yet no
such relief as prayed was granted. On the contrary, the only
direction was that NOIDA may consider the matter again in its
next Board Meeting and thereafter refer the matter to the
State government for its approval. It was observed in the
6
WP No. 48162 of 2010.
8
judgement dated 17 January 2012 that if any decision
approving the recommendation is taken by the State
Government, it will be open to it to decide the date from
which it may find it expedient to increase the age of
retirement; and
(d) After the judgement dated 17 January 2012, NOIDA sent a
fresh recommendation to the State Government on 17 July
2012. This recommendation was ultimately accepted by the
State Government and a Government Order dated 30
September 2012 was issued by it. This Government Order
directs that the increase in the age of retirement from fifty-
eight to sixty years “shall come into force with immediate
effect (from the date of issue of this Government Order) and
there shall not be any retrospective effect”.
(iii) When the order directing increase in the age of retirement is clear, namely
that it shall come into force with immediate effect coupled with the words
that the increase shall not have any retrospective effect, then the intention
of the maker of the subordinate legislation categorical obviates any
possible interpretation giving it retrospective effect. In these
circumstances, the Court cannot issue directions giving retrospective effect
to the amendment. The golden rule of statutory interpretation is that in the
absence of an express provision or a necessary intendment providing
retrospectivity, the interpretation must only be prospective. An exception to
9
this rule is only available in matters of procedure. (P. Mahendran v. State
of Karnataka7; C.Gupta v. Glaxo-Smithkline Pharmaceuticals Ltd.8);
(iv) The observation of the High Court that the Government should have acted
instantly “when the resolution was received by it more than 3 years back”
is factually incorrect. The Government Order dated 30 September 2012
itself recites that it is issued in reference to the recommendation dated 17
July 2012. Therefore, there was no delay of 3 years in the issuance of the
Government Order. The Government Order was issued in a little more
than 2 months. The High Court has erred in directing that the writ
petitioners shall be deemed to have worked with NOIDA till the age of sixty
years and they be paid salary and other benefits for two years during
which they never worked. The first and second respondents were due for
retirement with effect from 31 August 2012. They filed the writ petition on
or about 27 August 2012, praying that they be permitted to continue on
their posts till they attain the age of sixty years and salary be paid to them
accordingly. However, while issuing notice on the writ petition or at any
time thereafter no interim order was granted by the High Court. When the
first and second respondents performed no work, they are not entitled to
receive salary for such period. The principle of ‘no work no pay’ will
applicable in such a situation. The inability of the writ petitioners to
persuade the High Court to grant interim orders cannot act to the
advantage of the respondents. This is not a case of termination of services
7
(1990) 1 SCC 411.
8
(2007) 7 SCC 171.
10
which is later set aside by an order of the court thereby directing payment
of salary as arrears;
(v) The High Court has granted relief which was not prayed. It has ordered
that the increase in the age of retirement would be effective from 29 June
2002. The first and second respondents in their counter affidavit (at page
146 and 155), have admitted that relief was prayed with effect from 9 July
2012. Thus, the direction contained in the impugned judgment that the
increase in the age of retirement would be effective from 29 June 2002 is
unsustainable;
(vi) The effect of the impugned judgment runs contrary to the earlier Division
Bench’s judgment dated 17 January 2012, and is beyond the prayers
made in the writ petition. It has resulted in demands from dozens of
employees of NOIDA, who had retired decades ago. For example, in
September, 2004, employees made demands seeking arrears of pay and
allowances considering the retirement age as sixty years for them as well.
The interpretation / direction given in the impugned judgment has a
cascading effect and is unsustainable in law; and
(vii) The High Court was under the wrong impression that NOIDA, the authority
that is to bear the financial burden consequent to the increase in the age of
retirement supported the case of the Respondents/employees that the
Government Order issued on 20 September 2012 must have retrospective
effect.
11
12 Mr Vinod Diwakar, learned AAG for the State of Uttar Pradesh has
adopted the submission of Mr Ravindra Kumar, learned Counsel for NOIDA.
13 Ms Tanya Shree, learned Counsel has appeared on behalf of the
respondents to oppose the submissions in the appeals. Before elucidating the
submissions, it would be necessary to extract a submission from the counter
affidavit which has been filed by the respondents in response to the present
proceedings. Paragraph 6 of the counter affidavit reads as follows:
“Further, it is submitted that the Answering Respondents
herein did not seek the benefit of enhancement of age of
retirement of the employees of the Petitioner-Authority from
the date of its earlier resolution dated June 29, 2002. In fact it
was the case of the Answering Respondents before the
Hon’ble High Court in Writ Petition being Writ-A No. 43780 of
2012 that the age of retirement of the Answering
Respondents be enhanced w.e.f the date of resolution dated
July 9, 2012 of the Petitioner-Authority and the Answering
Respondents are only claiming a limited relief of enhancing
the age of retirement of the Answering respondents w.e.f. the
date of Resolution of the Petitioner-Authority i.e July 9,
2012.”
The above extract from the counter affidavit has clarified that the relief which the
respondents – employees sought is the enhancement of the age of retirement
with effect from 19 July 2012 which is the date on which the Board of NOIDA
resolved to increase the age of retirement. In this backdrop, Ms Tanya Shree
submitted as follows:
(i) The decision of the State government dated 20 September 2011 to
enhance the age of superannuation for its employees was circulated inter
alia to public sector undertakings and corporations enabling them to
determine whether they were in a position to bear the financial burden
12
attendant upon an increase in the age of retirement. Upon examination of
the financial impact, if each corporation resolved to accept the financial
burden, it could then seek the approval of the State government. All such
decisions were to be implemented only after the approval of the State
government, though it was made clear that no financial grants would be
provided to meet the additional cost outlay;
(ii) In the case of several other public sector corporations, the State
government resolved to increase the age of retirement. In certain cases it
resolved to give retrospective effect; for instance in the case of the Uttar
Pradesh State Handicrafts Corporation Ltd., the government by its decision
dated 17 April 2012 resolved to increase the age of retirement with effect
from 20 December 2011;
(iii) On 16 August 2012, a letter was addressed by the respondents to the
Chief Minister requesting for an enhancement in the age of retirement
since NOIDA had agreed to bear the financial burden by its resolution
dated 9 July 2012 and adverting to the fact that several employees would
be retiring by the end of August 2012;
(iv) The State government did not provide any reasons why it did not make its
decision operative with effect from 9 July 2012, the date when the
resolution was passed by the Board of NOIDA to enhance the age of
retirement;
(v) Though, the respondents had approached the government of Uttar
Pradesh with a representation seeking permission to allow them to work
13
till the age of 60 years, the representation was not allowed. As a
consequence of this they are entitled to the payment of their salary and all
other consequential benefits occasioned by the extension in the age of
retirement since it was the appellant authority that did not permit the
respondents to continue in service though they were willing to work. In
State of Uttar Pradesh v. Dayayanand Chakrawarthy9 it was held that if
the employer prevents the employee from performing his duties, the
employee cannot be blamed for his absence from duty and the principle of
‘no pay no work’ shall not be applicable to such an employee; and
(vi) The Board resolution of 9 July 2012 proposed to increase the age of
retirement of the employees with immediate effect. The authority is now
estopped from going back on its own resolution and denying the benefit of
the enhancement of age from the date of the resolution.
III The Analysis
14 The High Court while striking down para 1(ii) of the Government Order
dated 30 September 2012 to enhance the age of retirement with prospective
effect (para 1(ii) of the government order makes this position clear) has directed
that the enhancement of the age of retirement must date back to 29 June 2002.
This direction giving retrospective effect to the enhancement in the age of
retirement seems to be based on the fact that the original resolution of the Board
of NOIDA to enhance the age of retirement was issued on 29 June 2002. In
granting this relief, the High Court has formulated two reasons in its judgment:
9
(2013) 7 SCC 595.
14
firstly, the government order dated 30 September 2012 is arbitrary for having
increased the age of retirement with effect from the date of the order without
giving the benefit to employees who had retired prior to that date ;and secondly,
there was no reason to refuse the benefit of an extension of the age of
superannuation retrospectively when the resolution was received by the State
government “more than three years back”.
15 The reasons which have weighed with the High Court are based on
factually incorrect premises and are founded on a misunderstanding of the legal
position. After the Board of NOIDA resolved on 29 June 2002 to enhance the age
of superannuation from fifty-eight to sixty years, its recommendation was
forwarded to the State government on 22 March 2005. On 2 September 2005, the
State government deferred a decision on the recommendation. Subsequently,
the proposal was rejected on 22 September 2009.
16 The order of rejection was challenged in writ proceedings 10 which
culminated in the judgment of the Division Bench rendered on 17 January 2012.
The Division Bench refused to quash the order of rejection. Evidently, at that
stage, the basic issue was in regard to whether the financial burden could be
borne by an authority such as NOIDA. This is evident from the fact that the High
Court while deciding upon the merits of the proceedings under Article 226 held
that it was for the Board of NOIDA to consider whether it could bear the financial
burden occasioned by an increase in the age of retirement, and to thereafter
move the State government for its approval. While disposing of the Writ Petition,
the High Court specifically observed that “it will be open to the State government
10
W.P No. 48162/2010.
15
to consider to give effect to the increase in the age of retirement with effect from
the date when NOIDA has resolved to bear the financial burden, or from any such
date, which the State Government may find it expedient.” This order has attained
finality since it was not challenged before this Court.
17 It was in terms of the order of the High Court that the Board of NOIDA
resolved on 9 July 2012 to recommend to the State government that the age of
superannuation of its employees should be enhanced with immediate effect, and
the additional financial outlay would be met from the resources of the authority
without any claim for grants being made to the State government. The State
government responded to this proposal by acceding to the request to enhance
the age of superannuation, though prospectively from 30 September 2012.
18 NOIDA, as an authority, constituted by the UP Industrial Area
Development Act 1976 is bound by the rigour and discipline of the statute. The
power to appoint officers and employees is conferred upon the authority by
Section 5(i) “subject to such control and restrictions as may be determined by
general or special orders of the State government”. Section 19 requires the prior
approval of the State government to the regulations framed by the authority. The
regulations governing the conditions of service were notified on 14 January 1981
with the previous approval of the State government. Under Regulation 25 of the
NOIDA Regulations 1981, the age of superannuation was fixed at fifty-eight
years. Consequently, any enhancement of the age of superannuation would
require an amendment of the service regulations necessitating, in terms of
Section 19, the prior approval of the State government.
16
19 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 has evidently lost sight of the above factual
background, more specifically (i) the rejection of the original proposal on 22
September 2009; and (ii) the judgment of the Division Bench 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.
20 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 176th meeting) was
17
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. As stated above, 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.
21 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.
22 From time to time the authorities of the State took a decision bearing upon
the exigencies of service prevailing in each organisation. By an OM dated 16 May
2005, the age of retirement of employees of the Agricultural Produce and
Marketing Committee (APMC) was enhanced with immediate effect, without
giving retrospective operation. Similarly, on 15 December 2006 the age of
18
retirement of employees of the UP Power Corporation was enhanced without
conferring retrospective effect. On 17 April 2012, the age of superannuation of
the employees of UP State Handicrafts Corporation Limited was enhanced with
effect from 20 December 2011. On 22 May 2012, the age of superannuation of
the employees of the UP State Industrial Development Corporation Limited was
enhanced “with immediate effect”. 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.
23 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 Act 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
respondent-employees could not have claimed a vested right that the
19
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.
24 The argument of the respondents that the appellant-authority 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.11 The recommendation of NOIDA cannot create
or alter the legal relationship since it is subject to the approval of the government.
Justice H L Gokhale in a concurring opinion in Monnet Ispat and Energy Ltd. v.
Union of India 12 clarified that the principle of promissory estoppel will not apply if
the communication issued was either a proposal or a recommendation. The
learned judge observed:
“289. As we have seen earlier, for invoking the principle of
promissory estoppel there has to be a promise, and on that
basis the party concerned must have acted to its prejudice. In
the instant case it was only a proposal, and it was very much
made clear that it was to be approved by the Central
Government, prior whereto it could not be construed as
containing a promise. Besides, equity cannot be used against
a statutory provision or notification.”
(emphasis supplied)
11
Monnet Ispat & Energy Limited v. Union of India & Ors., (2012) 11 SCC 1.
12
(2012) 11 SCC 1.
20
In State of Jharkhand v. Brahmputra Metallics Ltd., Ranchi13, this court
speaking through of one us (D Y Chandrachud J) elaborated on the doctrine of
legitimate expectation, which is grounded in fairness and reasonableness.
Explaining that there is a legitimate expectation that the actions of the State are
fair and reasonable, it was observed:
“45. …The state must discard the colonial notion that it is a
sovereign handing out doles at its will. Its policies give rise to
legitimate expectations that the state will act according to what it
puts forth in the public realm. In all its actions, the State is bound
to act fairly, in a transparent manner. This is an elementary
requirement of the guarantee against arbitrary state action which
Article 14 of the Constitution adopts.”
(emphasis supplied)
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 to challenge the action of
NOIDA. 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.
25 The reliance placed by the respondents on Dayanand Chakrawarthy
(supra) to argue that they were willing to work till they attained the age of sixty
years but were not permitted to, and thus the principle of ‘no work no pay’ would
not be applicable is misplaced. In Dayanand Chakrawarthy, the issue before
13
Civil Appeal No. 3860-62 of 2020.
21
the two judge Bench of this court was whether prescription of different ages of
retirement based on the mode of recruitment under the UP Jal Nigam
(Retirement on attaining age of superannuation) Regulations, 2005 was
unconstitutional for violating Article 14 of the Constitution. This court held that the
differential superannuating age was discriminatory. However, by virtue of
Regulation 31 of the UP Jal Nigam Services of Engineers (Public Health Branch)
Regulations, 1978 the service conditions of State government employees is
applicable to the UP Jal Nigam employees. Therefore when the Jal Nigam
through an Office memorandum had resolved that the age of retirement for its
employees shall be fifty eight years, though it was sixty years for State
government employees, it was set aside by this court in Harwinder Kumar v.
Chief Engineer, Karmik 14. In Harwinder Kumar and the subsequent cases (U.P
Jal Nigam v. Jaswant Singh 15 ; U.P Jal Nigam v. Radhey Shyam Gautam 16)
involving the age of retirement of the UP Jal Nigam employees, this court had
held that employees who had approached the courts shall be entitled to full salary
until the age of sixty years. It was in this context that a two judge bench of this
court speaking through Mukhopadhaya J made the following observation in
Dayanand Chakrawarthy:
“48. …We observe that the principle of “no pay no work” is not
applicable to the employees who were guided by specific rules
like Leave Rules, etc. relating to absence from duty. Such
principle can be applied to only those employees who were not
guided by any specific rule relating to absence from duty. If an
employee is prevented by the employer from performing his
duties, the employee cannot be blamed for having not worked,
and the principle of “no pay no work” shall not be applicable to
such employee.”
14
(2005) 13 SCC 300.
15
(2006) 11 SCC 464.
16
(2007) 11 SCC 507.
22
In Dayanand Chakrawarthy the court directed payment of arrears deeming the
employees to have worked till sixty years in spite of no interim order being issued
in that regard because (i) the Office Memorandum was held ultra vires ; (ii)
Harwinder Kumar, Jaswant Singh, and Radhey Shyam Gautam had already
held that the age of retirement of the Jal Nigam employees shall be 60 years
unless a regulation prescribing a lower retirement age is issued in terms of
Regulation 31, and had extended this benefit to all the parties who had filed writ
petitions. Therefore, the above observation must be read in the context of the
distinct factual situation in the case.
26 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.
27 For the above reasons, we allow the appeals and set aside the impugned
judgment and order of the Division Bench at Lucknow of the High Court of
Judicature at Allahabad dated 25 January 2018 in WA No 43780 of 2012. The
23
Writ Petition shall in consequence stand dismissed. There shall be no order as to
costs.
28 Pending application(s), if any, stands disposed of.
………………………….……………………..J.
[Dr Dhananjaya Y Chandrachud]
…..…..…….………..……………….………..J.
[MR Shah]
New Delhi;
July 15, 2021.
24
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