Holding

The Court held that the Preetam Singh judgment requires reconsideration and referred the questions to a larger bench for determination.

Summary

The Supreme Court considered Special Leave Petitions filed by the State of Uttar Pradesh and the Uttar Pradesh Avas Evam Vikas Parishad challenging High Court orders that applied the 6th Pay Commission benefits to the Parishad’s employees. The core dispute revolved around the earlier judgment in State of U.P. v. Preetam Singh, which held that conditions of service of the Parishad’s employees are not among its statutory functions and therefore the State could not issue directives on pension, family pension and gratuity schemes. The Court examined the statutory provisions of the 1965 Act (sections 8, 15, 92, 94, 95) and the 1975 Act, as well as Article 162 of the Constitution, concluding that the Preetam Singh decision may have erred by not considering these provisions. Consequently, the Court formulated three specific questions for a larger bench and referred the matter to the Chief Justice for constituting such a bench. The petition was therefore not disposed on merits but sent for further consideration.

Issues considered

Whether the judgment in State of U.P. v. Preetam Singh, which held that conditions of service are not functions of the Uttar Pradesh Avas Evam Vikas Parishad, is correct in view of sections 8, 92 and 94(2)(nn) of the 1965 Act.
Whether the functions of the Parishad are limited solely to those enumerated in section 15 of the 1965 Act, thereby excluding service‑condition matters.
Whether the State Government has jurisdiction to issue directions regarding service conditions of the Parishad’s officers and servants under the 1965 Act, the 1975 Act and the executive power under Article 162 of the Constitution.

Legislation cited

Constitution of Indias. Article 162, s. Entry 41 List 5 of the Seventh Schedule
Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965s. 15, s. 8, s. 92, s. 94(2)(nn), s. 95
Uttar Pradesh State Control Over Public Corporation Act, 1975s. 2

Subjects

service conditionsstatutory bodyjurisdictionArticle 162Uttar Pradesh Avas Evam Vikas ParishadPreetam Singh caselarger benchpension scheme6th Pay Commissionpublic corporation

Judgment

[2020] 2 S.C.R. 699 699

STATE OF U.P. & ORS. A
v.
VIRENDRA KUMAR & ORS.
(Special Leave Petition (C) Nos. 4802-4803 of 2019)
B
FEBRUARY 10, 2020
[ASHOK BHUSHAN AND M.R. SHAH, JJ.]
Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 –
ss.8, 15, 92, 94(2)(nn), 95(1)(f), 95(2) – Appellant decided to C
implement 6th Pay Commission Report w.e.f. 01.01.2006 and issued
order dated 08.12.2008 – Said order excluded its applicability to
the employees of local bodies and public enterprises – Regulation
framed by U.P. Awas Evam Vikas Parishad (the Board) regarding
pension/family pension & gratuity scheme – Appellant issued order
approving pay band, grade pay etc. in the revised pay structure to D
the Board’s employees – Another order clarified that arrears of
revised pay from 01.01.2006 to 13.01.2010 shall not be admissible
to them – Appellant issued letter dated 05.05.2015 regarding
pensionary benefits to Board’s employees in compliance of order
passed by Supreme Court in Preetam Singh’s case – Board issued E
consequential order dated 05.05.2015 – Writ petitions filed inter
alia for quashing order dated 05.05.2015 – Allowed vide order dated
16.03.2018 inter alia holding that Government Order dated
08.12.2008 would apply in its entirety to the Board’s employees –
In another writ petition, mandamus was issued inter alia to grant
benefit of arrears of salary payable to Board’s employees from F
01.01.2006 to 13.01.2010 – Special Appeal dismissed on 26.11.2018
– Present SLPs filed against orders dtd. 16.03.2018 and 26.11.2018
– Submissions made only on the question as to whether judgment in
Preetam Singh’s case reported as [2014] 10 SCR 910 requires
reference to larger Bench or not – Held: Main issue considered in G
Preetam Singh’s case was as to whether the State Govt. has
jurisdiction to issue direction for non-implementing pension/family
pension & gratuity scheme on the employees of the Board – It was
held that it is open to the State Govt. to issue directions on question
of policy to all the Public Corporations in State of U.P but only in
respect of questions of policy having a nexus to the “discharge of H
699
700 SUPREME COURT REPORTS [2020] 2 S.C.R.

A its functions” – It was also held that Board’s functions are relatable
only to the functions stipulated in s.15 and that “the conditions of
service of employees do not constitute the functions of the Vikas
Parishad” – s.15 does not include conditions of the service of the
employees as one of Board’s functions but s.15(1) begins with words
“subject to the provisions of this Act and the rules and regulations”
B
– Preetam Singh did not consider other provisions of ss.8, 92,
95(1)(f) and the expression “subject to the provisions of the Act,
rules and regulations” which was expression of extreme importance
and intended to amplify and add other functions to the Board as
provided in the Act, rules and regulations – s.95 (Power to make
C regulations) has to be read in functions of the Board as contemplated
by s.15 – Bench in Preetam Singh erred in laying down that
conditions of service of the employees do not constitute the functions
of the Vikas Parishad– It cannot be said that State Govt. had no
jurisdiction to issue directions regarding service conditions of the
employees – State can exercise its jurisdiction u/Art.162 to issue
D
executive orders regulating the conditions of service of the officers
and servants employed in the affairs of the State – Judgment in
Preetam Singh needs reconsideration – Questions formulated – To
be considered by larger Bench – U.P. State Control Over Public
Corporation Act, 1975 – Constitution of India – Art.162; VIIth
E Schedule- Entry 41 List 5.
Directing the papers of the present cases to be placed
before the Hon’ble Chief Justice for constituting a larger Bench,
the Court

F HELD: 1.1 Chapter III of the Uttar Pradesh Avas Evam
Vikas Parishad Adhiniyam, 1965 deals with the functions and
powers of the Board. 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 regulations”, thus, functions of the
G 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
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STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 701

servants. Section 8 indicates that appointment of officers and A
servants is also one of the functions of the Board. Supposing
Board does not 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
B
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, C
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
D
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. 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 E
are not alien to the functions of the Board. 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
F
subject is also a function of the Board. Section 95, thus, has 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 G
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 opinion expressed by the
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702 SUPREME COURT REPORTS [2020] 2 S.C.R.

A Bench in Preetam Singh’s case is without referring to Section 8,
Section 95(1)(f). [Paras 29-32][720-C-E, G-H; 721-A-H; 722-A-
B]
1.2 Section 92 deals with control of the State Government
over the Board and other local authorities. Section 92(2) has its
B 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. The Bench in
C 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
D 15(1). 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 restrictions by the
State Government are expressly provided in Section 8(1) when
E 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
F been given express rule making power with regard to all subject
where regulations may be made by the Board under Section 95.
[Paras 33-35][722-B-H]
1.3 By virtue of Section 95(2) rules by the State has
overriding effect. Section 95(2) is also indicative that there is no
G 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

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STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 703

State, thus, can exercise its jurisdiction under Article 162 to issue A
executive orders regulating the conditions of service of the
officers and servants employed in the affairs of the State. 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
B
gratuity scheme as admissible to officers and servants of the
Government shall also apply to Board. 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 C
orders pertaining to pension/family pension and gratuity. [Paras
36, 37 and 42][723-D-F; 725-A-D]
1.5 The judgment in Preetam Singh’s case needs
reconsideration. Questions to be considered by a larger Bench:
(1) Whether the judgment of Supreme Court in Preetam D
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? E
(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 F
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 conditions of officers and employees as per
Section 95(1)(f) of the 1965 Act. G
(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

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704 SUPREME COURT REPORTS [2020] 2 S.C.R.

A provisions of the 1965 Act and 1975 Act and all other enabling
powers with the State Government? [Para 43][725 D-H; 726-A]
Rai Sahib Ram Jawaya Kapur and Others v. The State
of Punjab AIR 1955 SC 549 : [1955] SCR 225 –
followed.
B A.B. Krishna and Others v. State of Karnataka and
Others (1998) 3 SCC 495 : [1998] 1 SCR 157 – relied
on.
State of U.P v. Preetam Singh (2014) 15 SCC 774 :
[2014] 10 SCR 910 – referred to.
C
Case Law Reference
[2014] 10 SCR 910 referred to Para 2
[1955] SCR 225 followed Para 38
[1998] 1 SCR 157 relied on Para 40
D
CIVIL APPELLATE JURISDICTION: Special Leave Petition
(Civil) Nos. 4802-4803 of 2019.
From the Judgment and Order dated 16.03.2018 of the High Court
of Judicature at Allahabad (Lucknow Bench) in Writ Petition Nos. 12645
E (S/B) of 2016 and 10355 (S/B) of 2017.
With
Special Leave Petition (C) Nos. 4815, 4804, 373, 386 of 2019.
Raghvendra Singh, Ms. Aishwarya Bhati, Sr. Advs., Vishwajit
F Singh, Pankaj Singh, Ms. Ridhima Singh, Ms. Vijaya Singh, Sushmit
Chauhan, Vignesh Singh, Mrs. Swarupama Chaturvedi, Ms. Preetika
Dwivedi, Ms. Sukriti Bhatnagar, Rajeev Kumar Dubey, Abhishek Singh
Tomar, A. Mishra, Kamlendra Mishra, Nikhil Majithia, P. K. Jain, Saurabh
Jain, P.K. Goswami, S.P. Singh Rathore, Ashok K. Sharma, Uday Prakash
Yadav, Ms. Anuradha Soni Verma, Shryansh Aggarwal, Rajesh Goyal,
G H. Arjun, Mehul Sharma, Sarvjeet Kumar, Lalit Chaudhary, Gulshan
Babbar, Advs. for the appearing parties.

H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 705

The Judgment of the Court was delivered by A
ASHOK BHUSHAN, J.
1. 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
B
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. C
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
the facts and issues which have arisen in these Special Leave Petitions.
Preetam Singh’s case D
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 E
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 F
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 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 G
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

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706 SUPREME COURT REPORTS [2020] 2 S.C.R.

A 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
B 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
C 12.07.2007, another order was passed to the 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
D 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:
E
“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
F 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.”

G 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
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 707
[ASHOK BHUSHAN, J.]

employees do not constitute functions of the Board and as such the A
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
B
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 paid under the Contributory
Provident Fund Scheme, the said employee(s) will be paid interest on
the said amount @ 9% p.a. C
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 D
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 E
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 F
the Hon’ble 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. G
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/
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708 SUPREME COURT REPORTS [2020] 2 S.C.R.

A 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.
B
11. On 14.01.2010, the State Government has issued an order
approving the pay band and grade pay and other allowances in the revised
pay structure to the employees of Board, according to the decision taken
on the recommendations of 7 th U.P. Pay Committee 2008 to the
employees of Public Sector/Corporations. In consequences to the
C 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
D 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/
E B) of 2017 (Virendra Kumar and others vs. State of U.P. and others)
filed by another set of Officers and employees of the Board. In Writ
Petition No.12645(S/S) of 2016 following prayers have been made:
“PRAYER

F 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
G 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
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STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 709
[ASHOK BHUSHAN, J.]

about its non-application on the employees of U.P. Awas Evam A
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 B
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 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 C
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. D

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 E
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.
F
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 G
made:
“PRAYER
Wherefore, it is most respectfully prayed that this Hon’ble Court
may graciously be pleased to :
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710 SUPREME COURT REPORTS [2020] 2 S.C.R.

A (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 (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
(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
D 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
E of the case may also be passed; and
(e) allow the writ petition with costs.”
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
F 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
G 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
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 711
[ASHOK BHUSHAN, J.]

were allowed, operative portion is contained in paragraph 41 which is to A
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 B
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 C
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 D
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 E
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 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.
F
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 G
pensionary benefits on the basis of 6 th 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 H
712 SUPREME COURT REPORTS [2020] 2 S.C.R.

A 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 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
B
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.
C 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
D 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
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
E 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
F 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
G 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
H to in the absence of an express approval by the State Government.
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 713
[ASHOK BHUSHAN, J.]

Insofar as the instant contention is concerned, the learned counsel A
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 B
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 C
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)
D
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 E
learned counsel, were binding on the Vikas Parishad.”
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 F
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 G
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
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714 SUPREME COURT REPORTS [2020] 2 S.C.R.

A 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.
B 15. Section 15 aforementioned is being reproduced hereunder:
“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
C 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;

D (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
(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 (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
G to the U.P. Industrial Housing Act, 1955 (U.P. Act 23 of 1955);
(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
H
it;
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 715
[ASHOK BHUSHAN, J.]

(k) to acquire movable and immovable properties for any A
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 B
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; C
(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 D
for the discharge of the functions before mentioned.
(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 E
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; F

(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 G
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;

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716 SUPREME COURT REPORTS [2020] 2 S.C.R.

A (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 the 1965 Act. The conditions
B 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
C 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
D 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
E 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
implementation of the directions issued by the High Court, namely,
F 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
G 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
H view of the matter, we direct the Vikas Parishad to release the
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 717
[ASHOK BHUSHAN, J.]

pensionary benefits to the retired employees governed by the A
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
B
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.” C
20. Learned Advocate-General submitted that the view as
expressed by this Court in paragraph 16 that 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 D
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 E
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 F
for which regulation may be made by the Board under Section 95. Thus,
the State Government had power to 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 G
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 H
718 SUPREME COURT REPORTS [2020] 2 S.C.R.

A 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.
B 21. He further submits that functions of the Board as contemplated
under Section 15 are vide enough and 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
C 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
D 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.
E 23. Shri Nikhil Majithia learned counsel appearing for the
respondents submits that the question as to 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
F 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
G 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
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 719
[ASHOK BHUSHAN, J.]

Section 15 which does not include any direction pertaining to conditions A
of 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
B
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 C
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 ago but their pensions have not yet been paid causing D
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 E
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 F
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.
G
(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
pension/family pension and gratuity of the employees of
the Parishad.
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720 SUPREME COURT REPORTS [2020] 2 S.C.R.

A 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.
B
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.
C
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 regulations”, thus, functions of the Board as enumerated in
D 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
E 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
F 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.”
G 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 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
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 721
[ASHOK BHUSHAN, J.]

service is implicit in it. In case where there are no rules or regulations A
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
B
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. C
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: D
“Power to make regulations.- (1) The Board may, by
notification in the Gazette, make regulations providing for –
(a)………………………
……………………… E
(f) the conditions of service of officers and
servants of the Board;
(g)……………………
……………………” F
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, G
has 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
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722 SUPREME COURT REPORTS [2020] 2 S.C.R.

A 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).
B
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
C contemplated 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.
D 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,
E 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
F the Board with regard to appointment of officers and servants of the
Board, the control and 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
G 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:

H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 723
[ASHOK BHUSHAN, J.]

“94. Power to make Rules.- (1) The State Government A
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)………… B

…………
(nn) any matter for which regulation may be made by the
Board under Section 95;
…………………” C
36. As noted above, the Board has power to frame regulations
regarding conditions of service of officers and servants of the Board,
the State 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: D
“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 E
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 F
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 of the Constitution. Following was laid
G
down in paragraph 7:
“(7)………Article 162, with which we are directly
concerned in this case, lays down :

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724 SUPREME COURT REPORTS [2020] 2 S.C.R.

A “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,
B 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
C 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:
D “(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 the executive which
our Constitution has set up. Our Constitution, though federal in its
structure, is modelled on the British Parliamentary system where
E 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
F 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
G
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.
H
STATE OF U.P. & ORS. v. VIRENDRA KUMAR & ORS. 725
[ASHOK BHUSHAN, J.]

41. When the power to make law regulating the recruitment and A
conditions of service of persons is vested in the State Legislature it has
ample 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 B
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”. C
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.
D
43. Due to the above reasons we are of the view that with regard
to three aspects i.e. (1), (2) and (3) as 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 E
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 ?
F
(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 G
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
conditions of officers and employees as per Section 95(1)(f) of
the 1965 Act. H
726 SUPREME COURT REPORTS [2020] 2 S.C.R.

A (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 ?
B 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.
C

Divya Pandey Referred to larger Bench.

D

E

F

G

H