Hon'ble Ajai Kumar Srivastava-I,J.
These special appeals filed by the appellant-U.P. State Road Transport Corporation (hereinafter referred to as the Corporation) raise similar questions of law and facts and are therefore being decided by the common judgment, which follows as under :
Special Appeals No.177 of 2019 and 178 of 2019 assail the judgment and order dated 22.02.2019 passed by Hon'ble Single Judge whereby Writ Petition Nos.385 (SB) of 2014 and Writ Petition No.728 (SB) of 2014 were allowed, the orders dated 05.12.2013 and 19.02.2013 whereby the benefit of departmental pension to the petitioners of the said writ petition was denied, have been quashed and a portion of circular dated 25.10.2012 issued by the Corporation sofar as it excludes the employees getting the benefit of pension under the EPF Pension Scheme from being paid the departmental pension, has also been quashed. Learned Single Judge, accordingly, while allowing the writ petitions by the said judgment dated 22.02.2019 has further directed the Corporation to fix the pension of the petitioners and make payment thereof after adjusting the amount of employer's share in the EPF Pension Scheme which had been received by the petitioners. The learned Single Judge has further provided that neither the petitioners nor the Corporation shall claim any interest either on pension amount or on amount of employer's share in the EPF Pension Scheme.
In Special Appeal No.183 of 2019, the order under challenge has been passed by learned Single Judge, dated 22.02.2019 whereby the Writ Petition No.1530 (SS) of 2014 has been allowed and the benefits made available to the petitioners in Writ Petition No.385 (SB) of 2014 and 728 (SB) of 2014 vide judgment and order dated 22.02.2019 have been extended to the petitioner of Writ Petition No.1530 (SS) of 2014 as well.
We have heard Shri Ratnesh Chandra along with Shri Abhinav Singh, learned counsel representing the U.P. State Road Transport Corporation and Shri Gaus Beg, learned counsel representing the respondents (who shall hereinafter be referred to as the petitioners for convenience) in all the special appeals and have also perused the record available before us.
U.P. State Road Transport Corporation was established on 01.06.1972 under Section 3 of Road Transport Corporations Act, 1950 (hereinafter referred to as the 1950 Act) and has accordingly been incorporated as a body corporate having its own perpetual succession and a common seal. Prior to incorporation of the Corporation, in the State of U.P., Public Transport was being taken care of by a government department which was commonly known as U.P. Government Roadways Organization. On establishment and incorporation of the Corporation under Section 3 of the Act, 1950 in the State of Uttar Pradesh, under a government arrangement the assets, liabilities and even the employees working in the erstwhile Government Roadways Organization were transferred to the newly established Transport Corporation.
All the employees working in the Government Roadways Organization were required to submit their options, if they wanted their services to be transferred to and subsequently absorbed in the newly created Corporation. That is how initially the human resource in the newly established Corporation was inducted/created.
By means of a Government Order dated 05.07.1972, it was also provided that service conditions of the employees working in Government Roadways Organization, who gave their options for being absorbed in the services of the Corporation, would not in any manner be inferior to the service conditions, which they had enjoyed while working in the Government Roadways Organization. However, for governing the condition of service of the employees of the Corporation no service rules or regulations were framed prior to framing of the U.P. State Road Transport Corporation (Other than Officers) Service Regulations, 1981, which were notified on 19.06.1981. The concept of retirement benefits was accordingly introduced by promulgating the said 1981 regulations as Regulation 39 provided that an employee of the Corporation shall not be entitled to pension but he shall be entitled to retirement benefits mentioned in Sub-Regulation 2 of Regulation 39. Thus, the employees of the Corporation were not made available the benefit of pension ; rather certain retirement benefits provided in Regulation 39 were made available to them. However, the said provision carves an exception in respect of those employees who were earlier working with the State Government in the Government Roadways Organization and were subsequently absorbed in the services of the Corporation and such employees were, thus, made entitled to pension and other retirement benefits in terms of the Government Order dated 05.07.1972. This exception has a rationale as the Government Order dated 05.07.1972 specifically provided that those government employees who were to opt to be absorbed in the services of the Corporation shall not be given benefits, which may be inferior to the benefits they would have got had they continued to work and discharge their duties as government employees.
It has been stated at the Bar that prior to incorporation of the Corporation, in the Government Roadways Organization there were two categories of posts generally and the classification based on payment of pension did exist, according to which certain posts were pensionable and certain other posts were non-pensionable. On transfer/merger of assets and liabilities and other ancillary things which earlier belonged to U.P. Government Roadways Organization with the newly created Corporation, the posts of both these categories, namely, pensionable and non-pensionable got transferred to the Corporation as well. Accordingly, even after establishment of the Corporation appointments were made both against pensionable and non-pensionable posts.
All three petitioners in these matters were initially appointed in the Corporation against non-pensionable posts, however, they were subsequently promoted in pensionable posts. The details of service rendered by the petitioners are given below :
1.Subhash Chandra Gautam Srl. No. Date Appointed/Promoted Post Nature of Post
1. 18.07.1973 Appointed Assistant Mechanic Non-Pensionable
2. 26.07.1977 Promoted Mechanic Non-Pensionable
3. 14.08.1978 Promoted Junior Foreman Pensionable
4. 17.07.1984 Promoted Senior Foreman (Grade-II) Pensionable
5. 02.01.1992 Promoted Senior Foreman (Grade-I) Pensionable
6. 15.07.2007 Promoted Assistant Regional Manager (Technical) Pensionable Retired on 31.12.2007
2. Bhishma Deo Mishra Srl. No. Date Appointed/Promoted Post Nature of Post
1. 12.12.1975 Appointed Mechanic Non-Pensionable
2. 13.01.1979 Promoted Junior Foreman Pensionable
3. 22.03.1986 Promoted Senior Foreman (Grade-II) Pensionable
4. 02.11.1996 Promoted Senior Foreman (Grade-I) Pensionable
5. 22.12.2004 Promoted Assistant Regional Manager (Technical) Pensionable Retired on 31.08.2010
3. Gopi Shyam Pandey Srl. No. Date Appointed/Promoted Post Nature of Post
01. 23.12.1972 Appointed Cleaner Non-Pensionable
02. 23.10.1979 Promoted Office Assistant (Grade-II) Pensionable
03. 2004 Promoted Office Assistant (Grade-I) Pensionable Retired on 31.07.2007 It appears that on a proposal submitted by the Corporation, the State Government issued an order on 20.10.2004, which provides that the employees of the Corporation who were appointed between the period commencing on 01.06.1972 and ending on 19.06.1981 will also be entitled to grant of pension provided they were appointed on a pensionable posts. These two dates, namely, 01.06.1972 and 19.06.1981 have some significance. On 01.06.1972, the Corporation was established under Section 3 of the 1950 Act whereas on 19.06.1981, the Regulations of 1981 came into force which inter alia provide that the employees of the Corporation will not be paid pension rather they shall be entitled to certain retirement benefits with the exception that those who were appointed prior to 01.06.1972 with the State Government Roadways Organization and whose services were later on merged with the Corporation shall be entitled to pension. This was clearly in conformity with the earlier Government Order dated 05.07.1972 which in a manner made a representation or a promise to the employees of erstwhile State Government Roadways Organization that if they opted for absorption in the services of the Corporation the service benefits available to them would not be in any manner inferior.
Based on the said Government Order dated 20.10.2004, the UPSRTC issued a circular on 26.12.2005 which inter alia provided that since the Board of Directors of the Corporation has resolved in its 160th meeting to give effect to the Government Order dated 20.10.2004, as such, benefit of pension be made available to those employees who are covered by the Government Order dated 20.10.2004.
Thereafter in respect of the employees, who were appointed in the Corporation against non-pensionable posts and were, however, subsequently promoted on a pensionable post, the State Government issued another Government Order dated 10.10.2012 which provided that such employees shall also be eligible to pension in terms of the Government Order dated 20.10.2004. After issuance of the said Government Order dated 10.10.2012, the Managing Director of the Corporation issued a circular dated 25.10.2012 in pursuance of the said Government Order dated 10.10.2012. However, the circular provides that those retired employees who are getting pension/family pension from EPF Pension Scheme will not be eligible to the benefit of the pension in terms of Government Order dated 10.10.2012. It is this stipulation, which excludes the retired employees from the benefit of pension in terms of the Government Order dated 10.10.2012, that became subject matter of challenge in the writ petitions filed by the petitioners which have been decided by the learned Single Judge.
It is not in dispute that the petitioners herein were initially appointed against non-pensionable post, however, they were subsequently promoted against pensionable posts in the Corporation. It is also not in dispute that all the petitioners had retired from the service of the Corporation prior to issuance of the Government Order dated 10.10.2012 and issuance of the circular by the Corporation, dated 25.10.2012.
The only question which thus needs to be considered and answered by us is as to whether the exclusion from the benefit of departmental pension of such retired employees who were being benefited by the EPF related pension is vitiated and erroneous and such employees could or could not be excluded from the benefit emanating from the Government Order dated 10.10.2012.
Lengthy arguments have been made by learned counsel representing the respective parties and we have given our anxious consideration to the same.
Learned counsel appearing for the appellant-Corporation has argued that the circulars dated 25.10.2012 and 26.12.2005 only contained guidelines which in fact were policy decisions taken by the Corporation, as such, legally no interference in such policy decisions was permissible by learned Single Judge while the writ petitions filed by the petitioners were decided by the orders which are under appeal in this case.
It has further been argued by the learned counsel for the appellant that the Government Order dated 10.10.2012 has to be read in conjunction with Government Order dated 20.10.2004 which only provided no objection of the State Government for making available the benefit of pension to particular class of employees and in fact right to seek benefit of pension actually flows from the circular dated 25.10.2012 wherein considering the financial health of the Corporation, a conscious decision was taken not to make available the benefit of the departmental pension to those retired employee of the Corporation who were already getting pension under the EPF Scheme.
It has further been contended by learned counsel appearing for the appellant that in terms of the circular dated 25.10.2012, no option was ever exercised by the petitioners and as such in accordance with the stipulations available in the said circular dated 25.10.2012 itself, it would be deemed that the petitioners did not opt for the benefit of the pension on the basis of the Government Order dated 10.10.2012 and the circular dated 25.10.2012. Thus, the claim to the petitioner is barred by their non-exercise of the option as was required by the circular dated 25.10.2012.
It has further been argued that there exists a reasonable classification permissible under Article 14 of the Constitution of India between the retired employees who were getting pension under the EPF Pension Scheme and those who were not getting such benefit under the said EPF Pension Scheme and accordingly, since this classification has a rational basis, it is not open to the learned counsel for the petitioners to argue that the petitioners have been subjected to any kind of discrimination, much less any hostile discrimination.
Learned counsel for the appellant has further submitted that in fact the Government Order dated 10.10.2012 does not direct the Corporation to make payment of pension, rather it only expresses its no objection if pension is paid to the employees of the Corporation and, thus, it was well within the authority and jurisdiction of the Corporation to have framed the guidelines which are contained in the circular dated 25.10.2012 and exclude a particular category of employees from the benefit of the departmental pension.
Further submission is that intention of the State Government while issuing the Government Order dated 10.10.2012 was not to cover each and every employee of the Corporation with the benefit of the departmental pension, instead it was left open to the Corporation to take a decision, depending on the contingencies and exigencies of the Corporation, to cover or not to cover with the benefit of departmental pension scheme any set of employees or even to exclude them.
Certain other arguments have also been made by learned counsel for the appellant, who has attempted to point out certain flaws in the judgment under appeal.
On behalf of the appellant-Corporation heavy reliance has been placed on the judgment in the case of Krishena Kumar vs. Union of India and others reported in (1990) 4 SCC 207 wherein, according to the learned counsel for the appellant, the ratio laid down by Hon'ble the Supreme Court in the case of D. S. Nakara and others vs. Union of India reported in (1983) 1 SCC 305 has been diluted. It has been submitted that the facts of the present case are similar to the facts in the case of Krishena Kumar (supra) and in view of what has been decided by the Hon'ble Supreme Court in the aforesaid case of Krishena Kumar (supra) the writ petitions ought to have been dismissed and accordingly, this appeal deserves to be allowed.
On the other hand, Sri Gaus Beg, refuting the submissions made by learned counsel for the appellant, has argued that the Government Order dated 10.10.2012 is referable to Section 34 of the Act, 1950, which clearly provides that any such direction issued by the State Government shall be binding upon the Corporation. He has, thus, contended that in fact right of getting benefit of departmental pension flows from the Government Order dated 10.10.2012 which does not differentiate between two sets of employees, namely, the employees who were getting pension from the EPF Pension Scheme and those who were not getting such pension. He has further submitted that any deviation in the circular dated 25.10.2012 from the stipulations and prescriptions available in the Government Order dated 10.10.2012 would not be permissible in view of the mandate of Section 34 of the 1950 Act. The submission is that in fact the circular dated 25.10.2012 could not over ride the Government Order dated 10.10.2012 and thus exclusion of those employees from the benefit of departmental pension who were getting pension under the EPF Pension Scheme is absolutely arbitrary and has, thus, rightly been quashed by learned Single Judge while passing the judgment and order under appeal.
Having heard the learned counsel for the parties, what we notice is that there is no dispute between the parties that petitioners are those employees who were initially appointed in the Corporation against non-pensionable post, however, were subsequently promoted on pensionable posts in the Corporation. It is also not in dispute that at the time of initial appointment of the petitioners against non-pensionable post there were no statutory service rules or regulations governing the conditions of their service. It is only in the year 1981 that the service conditions of the employees of the Corporation were sought to be regulated by framing the service regulations in terms of the provision contained in Section 45 of 1950 Act. It is also not in dispute that all the petitioners retired before issuance of the Government Order dated 10.10.2012 followed by the circular of the Corporation, dated 25.10.2012. The parties also do not dispute the fact that while in service the employer's contribution to the EPF Pension Scheme was also made, however, the bone of contention between the parties is as to whether the exclusion of the petitioners and other similarly circumstanced employees from operation of the pension scheme introduced by the Government Order 10.10.2012 read with the circular dated 25.10.2012 is lawful.
As observed above, U.P. State Roadways Corporation has been established and incorporated under Sections 3 and 4 of the 1950 Act. It is, thus, a statutory Corporation having an entity distinct from that of a Government department. The affairs of the Corporation are, thus, to be governed by the scheme of the 1950 Act and the prescriptions available therein.
Section 44 of the 1950 Act empowers the State Government to make rules by way of a notification to be published in the official gazette, to give effect to the provisions of the said Act.
Section 45 empowers the Corporation to make regulations, of course, with the previous sanction of the State Government which may be not inconsistent with the provisions of 1950 Act and the rules made, if any, under Section 44.
Section 34 contains a provision which is very significant and relevant to decide the controversy which has arisen in this case. It empowers the State Government to give general instructions to the Corporation which are to be followed by the Corporation. Section 34 further provides that such directions can be issued after consultation with the Corporation and such instructions or directions relate to recruitment, condition of service and training of employees, wages to be paid and reserves to be maintained and further disposal of the profits and stocks of the Corporation. Section 34 of the 1950 Act is extracted herein below for ready reference :-
"Section 34. Directions by the State Government.--(1) The State Government may, after consultation with a Corporation established by such Government, give to the Corporation general instructions to be followed by the Corporation, and such instructions may include directions relating to the recruitment, conditions of service and training of its employees, wages to be paid to the employees, reserves to be maintained by it and disposal of its profits or stocks.
(2) In the exercise of its powers and performance of its duties under this Act, the Corporation shall not depart from any general instructions issued under sub-section (1) except with the previous permission of the State Government."
From a bare perusal of the above quoted provision contained in Section 34 of 1950 Act, it is abundantly clear that the State Government has been statutorily empowered to issue mandatory directions to the Corporation on certain subjects including the conditions of service. It is not in dispute that payment of pension forms a condition of service and, accordingly, there cannot be any doubt about the power of the State Government emanating from Section 34 of 1950 Act to issue instructions or give directions to the Corporation in respect of conditions of service of the employees of the Corporation.
So far as the petitioners in these matters are concerned, the Government Order dated 20.10.2004 and the related circular dated 26.12.2005 do not have any application, rather these petitioners would be governed by the Government Order dated 10.10.2012 and circular dated 25.10.2012. Thus we would discuss the nature of the directions issued in the Government Order dated 10.10.2012 and the prescriptions available in the circular dated 25.10.2012.
From a perusal of the Government Order dated 10.10.2012, it is clear that the same was issued in consultation with the Corporation as the said Government Order itself makes a reference of a letter of the Finance Controller of the Corporation. It appears that some proposal was made by the Finance Controller of the Corporation, on which the government issued the order dated 10.10.2012. The said government order, as observed above, provides that those employees of the Corporation who were initially appointed against non-pensionable post but were further promoted on a pensionable post between 01.06.1972 to 19.06.1981 shall be eligible for grant of pension and on this the State Government gives its no objection. The Government Order clearly states that further action may be taken by the Corporation according to the stipulation made in the Government Order dated 10.10.2012. Under the scheme of the 1950 Act, there is no other provision which empowers the State Government to give direction to the Corporation except Section 34 which empowers the State Government to give general instructions which are to be followed by the Corporation.
The language in which the provisions of Section 34 are couched does not leave any doubt in our mind that any such instruction referable to Section 34 of the 1950 Act are binding on the Corporation. In fact the Corporation does not have any escape of not following or not abiding by any instructions issued or directions given by the State Government to it under Section 34 of the Act, 1950.
Sub Section 2 of Section 34 mandatorily prohibits the Corporation from departing or deviating from instruction issued by the Government except with the previous permission of the State Government.
The submission of the learned counsel for the appellant that the Government Order dated 10.10.2012 only expresses its no objection for the reason that it is to be read along with the prescriptions available in the Government Order dated 20.10.2004, in our considered opinion, is highly misconceived for the reason that the Government Order dated 10.10.2012 clearly directs the Corporation to take further action in terms of the stipulations made therein. Further, learned counsel for the appellant has failed to show any provision to us which requires no objection of the State Government in case of any policy decision. If the Government Order dated 10.10.2012 was to be mandatorily followed as per the mandate of Section 34 of 1950 Act, it was not open to the Corporation to provide anything other than what is provided in the Government Order dated 10.10.2012. The Government Order dated 10.10.2012 does not differentiate between the employees who were getting pension under the EPF Pension Scheme and those who were not getting such benefit. However, contrary to the stipulation available in the Government Order dated 10.10.2012, the Corporation while issuing the circular dated 25.10.2012 has drawn such a distinction which in our considered opinion was legally impermissible for what has been provided under Section 34 of the 1950 Act.
It is worth noticing here that nothing has been shown to us from where we can infer that any permission by the State Government was ever accorded to the Corporation, as contemplated in Section 34 (2) of the Act. In absence of any such permission the Corporation could not have deviated in any manner from the stipulations available in the Government Order dated 10.10.2012.
What we have observed about the mandatory nature of Section 34 of 1950 Act is fortified by a decision of Hon'ble Supreme Court in the case of S. P. Dubey vs. Madhya Pradesh State Road Transport Corporation and another reported in 1991 Supp (1) SCC 426.
So far as the submission made by learned counsel for the appellant that the circular dated 25.10.2012 was a policy decision in the form of guidelines is concerned, we may state that even such guidelines or the policy decision could not go beyond the mandate of the State Government contained in the Government Order dated 10.10.2012. Any decision of any nature to be taken by the Corporation has to be subservient to the directions or instructions given or issued by the State Government which are referable to Section 34 of the 1950 Act. It is also noticeable at this juncture itself that circular dated 25.10.2012 clearly makes a mention of what has been provided for in the Government Order dated 10.10.2012. Hence, having noticed the stipulations and prescriptions available in the Government Order dated 10.10.2012, it was not open to the Corporation to have provided anything other than what has been provided by the Government Order dated 10.10.2012.
So far as the submission of learned counsel for the appellant that in absence of any option having been exercised by the petitioners pursuant to the circular dated 25.10.2012 it will be deemed that the petitioners were not covered by the said benefit, we may only notice that the circular dated 25.10.2012 was issued at a time when the petitioners had retired from the service of the Corporation. There is nothing on record to show that these petitioners were ever required by the Corporation by any written or even oral notice to them to exercise their options as per the stipulations made in the circular dated 25.10.2012. The submission by the learned counsel for the appellant that the circular was general in nature and it was not required to be served individually on each and every employee will have no application or bearing in this case for the reason that such a contention may be true (though even this is argueable) in respect of serving employees but for the employees who had retired from the service of Corporation, this refuge to the appellant is not available. This issue has, in fact, been elaborately dealt with by learned Single Judge in his judgment and order under appeal.
Drawing attention of the Court to a paragraph mentioned by Hon'ble Single Judge, it has been stated that it was never an admitted fact that the petitioners were entitled to get regular departmental pension. The said paragraph, we are afraid, has not been read by the appellant in conjunction with the discussions made in rest of the judgment and accordingly no flaw worth the name can be found therein.
The submission made by learned counsel for the appellant in this regard thus merits rejection, which is hereby rejected.
As regards the judgment relied upon by learned counsel for the appellant in the case of Krishena Kumar (supra) it is observed that there cannot be any dispute as regards the ratio laid down by the Hon'ble Apex Court in the said case that the dependent on the fact situation even pension retirees may not necessarily form a homogeneous class, however, the facts of the present case are that though the State Government while issuing the Government Order dated 10.10.2012 did not differentiate between two separate groups of employees but it is only the Corporation which created a separate class of employees who were paid pension form EPF Pension scheme. As already observed above, it was not open to the Corporation to have deviated from what has been provided by the State Government in its order dated 10.10.2012 and, thus, the reliance placed by learned counsel for the appellant on the case of Krishena Kumar (supra) does not come to the rescue of the appellant.
In view of the discussions made and the reasons given herein above, in our considered opinion, special appeals are highly misconceived, which are hereby dismissed.
However, we provide that benefit of the judgment and order passed by learned Single Judge, shall, thus now be made available within a period of two months from the date a certified copy of this order is presented before the authority concerned.
In the facts of the case, cost is made easy.
Order Date :- 26.8.2021 Mahesh