V.K. Sodhi And Ors. vs Lt. Governor And Ors.
2002 Latest Caselaw 815 Del

JUDGMENT

S.B. SINHA, C.J.

1. Whether amended Regulation 67 of SCERT Rules and Regulations is applicable in the case of the petitioners, in the question involved in this writ petition.

2. The State Council of Educational Research and Training (SCERT for short) was created in the year 1986 with an objection to provide better opportunities and facilities in all spheres and at all stages the best education in the schools and colleges administered by the Delhi Administration. It is a society registered under the Societies Registration ACt. It is an autonomous body which came into being w.e.f. 27th May 1998. Its objectives are said to be similar to those of National Council of Educational Research and Training (NCERT). SCERT framed its rules and regulations dealing with the terms and conditions of the academic staff working with it which reads thus:

"67. Terms and Tenure of Service of Academic Staff.

The terms and tenure of service of the academic staff at the Council shall remain the same as available for the academic staff of the National Council of Education Research and Training."

3. The petitioners herein who are 11 in number were appointed on different dates from 1989 to 1996. The offer of appointment inter alia contains the following terms:

5. Retirement and : As and when the post is made other benefits permanent and the incumbent working against the said post is absorbed, he/she will be entitled to pensionary, Death-cum-Retirement Gratuity and General Provident Fund benefits as per rules applicable to Delhi Adm. Employees, subject to approval of the SCERT rules and pension fund etc. by the Competent Authority.

4. Allegedly, the Executive Committee of the SCERT adopted the following Regulation on 4th March 1992:

"The matter regarding introduction of GPF, Gratuity and Pension Scheme in SCERT was placed before the Committee with the prior permission of the Chairperson. The Committee resolved that the scheme of GPF, Gratuity and Pension may also be introduced in SCERT and modalities for the same be worked out in consultation with the Finance Department of Delhi Admn."

5. However, the said Resolution was not implemented.

6. It also framed Advanced Career Promotion Scheme on 8th August 1997. It is stated that even the said scheme has not been implemented. Writ petitions appear to have been filed before this court by Dr. T.C. Sharma and Dr. D.K. Roy wherein this Court holding the SCERT not to be an instrumentality of the State within the meaning of Article 12 of the Constitution of India, observed:

"It is also free to utilize its income and property in any manner it likes for achieving these objects. Therefore, it cannot be said that since SCERT is funded by the Administration of Delhi beside generating from its own sources hence NCT of Delhi has all pervasive control over it, not it can be said that it is department of NCT of Delhi. After it was created as a Society and registered under the Societies Registration Act it required autonomous status. Its functions are performed by its Executive Committee which is free to enter any arrangement wit Government, public or private organization, individuals etc."

7. This Court, thus, held that the respondent is free to take its decision in the matter of utilization of its funds.

8. In these writ petitions, a question arose as to whether the retirement age of the teachers is 60 or 62 years. This court held that having regard to the phraseology used in Article 226 of the Constitution of India, this court could issue writ against SCERT and directed that the petitioners therein shall retire at the age of 62 years like their counter-parts in NCERT. The SLPs preferred thereagainst were also dismissed.

9. However, Regulation 67 afore-mentioned was amended by notification dated 7th December 1999 which is as under:

"The terms and tenure of service of Academic and other staff of the Council should remain the same as available for the Academic and other staff of the Directorate of Education, GNCT of Delhi with such modifications that may be specifically adopted by the Executive Committee from time to time."

10. The respondents, however, in their counter-affidavit inter alia stated that it cannot be compared with NCERT. It was contended that with the passage of time it was felt that Regulation 67 required to be reviewed wherefor a Committee was constituted in August 1998 and ultimately the said Regulation had been amended.

11. The respondent have contended that the petitioner have derived no legal right pursuant to or in furtherance of the un-amended Regulation 67.

12. The petitioners having regard to the afore-mentioned contention of the respondents filed an application for amendment of the writ petition impleading the Secretary (Finance) and Secretary (Education) which was allowed by this court's order dated 9th July 1999.

13. Mr. Sarvesh, Bisaria, the learned counsel appearing on behalf of the petitioners would submit that having regard to the fact that the Executive Committee of the Society is a supreme body, it was entitled as of right to take its policy decision, the logical corollary whereof would be that it is bound to implement the same.

14. The learned counsel appearing on behalf of the respondents, however, submitted that the Government of NCT of Delhi had been approached for providing adequate finance.

15. According to the learned counsel, SCERT is fully financed by the Government and unless approval of its beneficial scheme is received by the Lt. Governor of Delhi, its decision cannot be implemented.

16. Mr. Shali, learned counsel for the NCT of Delhi, on the other hand, would contend that the NCERT and SCERT are separate organizations, the former being financed by the Government of India and is working on a national level and latter is working at the State level only.

17. It has been contended that only because the nature of the job is similar, the doctrine of 'equal pay for equal work' cannot be applicable in the present case in view of the decisions of the Apex Court in Garhwal Jal Sansthan Karmchari Union v. State of UP, , wherein it has been held that the principle of equal pay for equal work would not be applicable where qualitative difference in functions and responsibilities is apparent. The quality of work varies from post to post, institution to institution.

18. It is stated that the matter is pending consideration at the Central level as the State Government is not capable to grant to employees of autonomous bodies any service benefits without consulting the Central Government.

19. A contention has also been raised that SCERT not being a State within the meaning of Article 12 of the Constitution of India, the writ petition is not maintainable.

20. It is accepted that the third respondent was formed basically on the same lines as NCERT.

21. The Apex Court in Chander Mohan Khanna v. The National Council of Educational Research & Training and Ors., has noticed the objects of the Council which are:

"To assist and advise the Administration of Delhi in the implementation of its policies and programmes for human resources development especially in the field of education, woman and child development, national integration and other related affairs."

22. It was further noticed that its main functions are to assist and advise the Ministry of Education and Social welfare in the implementation of its policies and major programmes. By Clause 3.2, the Council is empowered for the realization of he said objectives to undertake several kinds of programmes and activities which include coordination of research, extension services and training, dissemination of improved educational techniques and practices. etc. The income and property of the Council is required to be applied towards the promotion of the objectives thereof as set forth in the Memorandum of Association. In terms of Clause 5, the income and property of the NCERT was to be applied towards the promotion of its object and could not be dispensed with by way of dividends, bonus etc. and the Council was free to apply the income and property towards this objective in such as manner as it thinks fit. It was further noticed that the Administration of Delhi can appoint one or more persons to review the work and progress of the Council and to hold enquiries into the affairs thereof and to report thereon in such a manner as it may stipulate and upon receipt of such report, the Administration of Delhi may take such action and issue such directions as it may consider necessary and such directions would be binding upon the Council. The Administration of Delhi has also the power to issue directions by the Council on important matters of policy and programmes. In terms of Clause 6, the Government in relation to NCERT could review the work the progress and to take appropriate action to give effect to the reports received on enquiries. The Memorandum had also one of its objects namely, to establish linkage with NCERT of various Departments of Universities of Delhi and Union Territory of Delhi, Department of Education, other educational institutions of Central Government and Delhi Administration.

23. Despite the same, it was held that as the NCERT does not perform any sovereign function and as its activities are not related to the governmental function and governmental control being confined to proper utilization of Government plan, it was not a State. It held that the decision of the Constitution Bench of the Apex Court in Sabhajit Tewari v. Union of India , has been distinguished and watered down in the subsequent decisions particularly Ajay Hasia v. Khalid Mujib Sehravardhi, and P.K. Ramchandra Iyer v. Union of India , . The Apex Court further distinguished the latter decision on the ground the ICAR was originally an attached office of the Government of India and its position was not altered when it was registered as a society.

24. The correctness or otherwise of the decision of   Sabhajit Tewari    (supra) came up for consideration before a seven-Judge Bench of the apex court in   Pradeep Kumar Biswas v. Indian Institute of Chemical  
 

Biology and Ors., Civil Appeal No. 992/2002. Ruma Pal, J. speaking for majority, surveyed the earlier decisions of the Apex Court and held:
  "Perhaps this rather over-enthusiastic application of the broad limits set by   Ajay Hasia may have persuaded this Court to curb the tendency in   Chander in Chander Mohan Khanna v. National Council of Educational Research and Training and Ors.      . The Court referred to the tests formulated in   Sukhdev Singh, Ramana, Ajay Hasia, and Som Prakash Rekhi  but striking a note of caution said that "these are merely indicative indicia and are by no means conclusive or clinching in any case". In that case, the question arose whether the National Council of Educational Research (NCERT) was a 'State' as defined under Article 12 of the Constitution. The NCERT is a society registered under the Societies Registration Act. After considering the provisions of its Memorandum of Association as well as the rules of NCERT, this Court came to the conclusion that since NCERT was largely an autonomous body and the activities of the NCERT were not wholly related to governmental functions and that the Government control was confined only to the proper utilization of the grant and since its funding was not entirely from Government resources, the case did not satisfy the requirements of the State under Article 12 of the Constitution." 
 

25. The learned Judge noticing a recent decision in Mysore Paper Mills Ltd. v. The Mysore Paper Mills Officers Association, wherein the decision of the Apex court in Rajasthan Electricity Board v. Mohan Lal, was followed and concluded in the following terms:

"The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case would be - whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State."

26. Having regard to the objects and purpose for which CSIR was constituted, it was held to be a State saying:

"These objects which have been incorporated in the Memorandum of Association of CSIR manifestly demonstrate that CSIR was set up in the national interest to further the economic welfare of the society by fostering planned industrial development in the country. That such a function is fundamental to the governance of the country has already been held by a Constitution Bench of this Court as far back as in 1967 in Rajasthan Electricity Board v. Mohan Lal (Supra) where it was said:

"The State, as defined in Article 12, is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people".

We are in respectful agreement with this statement of the law. The observations to the contrary in Chander Mohan Khanna v. NCERT (Supra) relied on by the Learned Attorney General in this context, do not represent the correct legal position."

27. In this view of the matter, there cannot be any doubt whatsoever that the third respondent which has been created to promote the educational interest of the people is a 'State' within the meaning of Article 12 of the Constitution of India.

28. Once the third respondent is held to be a State within the meaning of Article 12 of the Constitution of India, there cannot be any doubt whatsoever that it must give effect to its own policy decision. Any deviation or departure from its own policy decision would attract the wrath of Article 14 of the Constitution of India. The benefits of pension-cum-gratuity or provident fund or making a provision for Advance Career Promotion Scheme being the part of welfare activities of a State, the third respondent or for that matter the other respondents cannot deny to their employees the same particularly when there existed a rule.

29. In no uncertain terms the rules provided that the terms and tenure of service of the academic staff of the Council would remain the same as for the academic staff of NCERT. Whatever benefits are, therefore, available to the employees of the NCERT were available at the relevant time, the employees of the SCERT were entitled thereto by reason of the provisions of Regulation 67, as noticed hereinbefore.

30. It is not in dispute that the third respondent has the rule making power. But it cannot make any rule with retrospective effect. It is accepted that broadly the aims and objects of the NCERT and the SCERT are identical. By reason of the said Regulation 67, the petitioner had derived a right which could not be taken away except in accordance with law. By amending Regulation 67, a retrospective effect thereto cannot be given nor thereby the vested right of the petitioners could be taken away.

31. Such amended regulations would apply only in relation to the employees who would join the service of the third respondent thereafter.

32. The expressions vested rights or accrued rights "are used in the context of a right flowing under the statute or a statutory rule or instrument" which is sought to be altered w.e.f. anterior date as a result whereof the benefits available under the Rules in force at the relevant point of time are sought to be taken away. Giving it a retrospective effect which takes away the vested right, would be violative of Article 14 and 16 of the Constitution of India.

33. In D. Srinivasan v. Commissioner and Ors. , , it was held that the vested rights under a repealed statute are not to be interfered with by the repealing statute unless there exists any express provision in this regard.

34. In Shyam Sunder and Ors. v. Ram Kumar and Anr. , it was held that a presumption can be raised that the Statute would not have any retrospective effect.

35. In K. Kuppuswamy and Anr. v. State of T.N. and Ors. , it was observed:

3. "...Till the rule is amended, the rule applies. Even today the amendment has not been effected. As and when it is effected ordinarily it would be prospective in nature unless expressly or by necessary implication found to be retrospective. The Tribunal was, therefore, wrong in ignoring the rule."

36. Yet again in Chairman, Railway Board and Ors. v. C.R. Rangadhamiah and Ors. , , the apex court observed that pension is no longer treated as bounty. It made a distinction between an accrued right and vested right in the following terms:

"20. It can, therefore, be said that a rule which operates in future so as to govern future rights of those already in service cannot be assailed on the ground of retroactivity as being violative of Article 14 and 16 of the Constitution, but a rule which seeks to reverse from an anterior date a benefit which has been granted or availed of, e.g., promotion or pay scale, can be assailed as being violative of Article 14 and 16 of the Constitution to the extent it operates retrospectively."

37. In any event, such a vested right could not have been taken away without complying with the principles of natural justice. In a situation of this nature, the doctrine of promissory estoppel would also apply. In Sharma Transport v. Government of A.P. and Ors. , , it has been held:

"14. Doctrine of "promissory estoppel" has been evolved by the courts, on the principles of equity, to avoid injustice.

17. These definitions in Black's Law Dictionary which are based on decided case, indicate that before the rule of "promissory estoppel" can be invoked, it has to be shown that there was a declaration or promise made which induced the party to whom the promise was made to alter its position to its disadvantage."

38. Referring to M/S Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and Ors. , , it was observed:

23. ".....If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the court would not raise an equity in favor of the promiseand enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such a case, because on the facts, equity would not require that the Government should be held bound by the promise made by it. But the Government must be able to show that in view of the fact as has been transpired, public interest would not be prejudiced. Where the Government is required to carry out the promise the court would have to balance the public interest in the Government's carrying out the promise made to the cities, which helps citizens to act upon and alter their position and the public interest likely to suffer if the promises were required to be carried out by the Government and determine which way the equity lies. It would not be enough just to say that the public interest requires that the Government would not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it. In order to resist its liability the Government would disclose to the court the various events insisting its claim to the exempt from liability and it would be for the court to decide whether those events are such as to render it inequitable to enforce the liability against the Government."

39. The Government has not raised any such plea.

40. In Tandon Brothers v. State of W.B. and Ors. , , if was held:

29. "...The doctrine of estoppel is a doctrine of prudence - -it is a doctrine of ethics, justice and equity: in this context reference may be made to a recent decision of this court in Tata Iron & Steel Co. Ltd. v. Union of India (2001) 2 SCC 41 wherein this Court upon reliance on Phipson on Evidence (14th Edn.) has the following to state as regards estoppels by conduct: (SCC p. 52, para 21)

In modern times the doctrine has been extended so as to embrace practically any act or statement by a party which it would be unconscionable to permit him to deny.

30. Since there are existing no justifiable reasons for change of quantum of land as mentioned in Section 6(3) notice, the State Government cannot but be said to be bound by its own notice: the doctrine of estoppel has its fullest play in the contextual facts."

41. Yet again in H.C. Venkataswamy and Ors. v. Bangalore Development Authority and Ors. , , it was held on facts that it would not be fair for Development Authority to go back on decision regarding reconveying land to acquirees keeping in view the provisions of promissory estoppel.

42. For the reasons afore-mentioned, we are of the opinion that the respondents are bound to implement its policy decision as reflected in Regulation 67 as also Advance Career Promotion Scheme.

43. However, we may hasten to add that those who are only on deputation and have not been absorbed, the benefit of this decision cannot be given unless they are absorbed permanently.

44. The writ petition is allowed in the above terms with Advocate's fee assessed at Rs. 5000/-.