2005 (11) TMI 506 - SC - Indian Laws

Enhancement of age of superannuation - Whether amendment made in Rule 56(a) of Uttar Pradesh Fundamental Rules ('the Rules') by Notification dated June 27, 2002 enhancing age of superannuation of government servants from 58 years to 60 years would be applicable to the employees of Uttar Pradesh Jal Nigam ('the Nigam') - HELD THAT - In the present case, as Regulations have been framed by the Nigam specifically enumerating in Regulation 31 thereof that the Rules governing the service conditions of government servants shall equally apply to the employees of the Nigam, it was not possible for the Nigam to take an administrative decision acting u/s 15(1) of the Act pursuant to direction of the State Government in the matter of policy issued u/s 89 of the Act and directing that the enhanced age of superannuation of 60 years applicable to the government servants shall not apply to the employees of the Nigam. In our view, the only option for the Nigam was to make suitable amendment in Regulation 31 with the previous approval of the State Government providing thereunder age of superannuation of its employees to be 58 years, in case, it intended that 60 years which was the enhanced age of superannuation of the State Government employees should not be made applicable to employees of the Nigam. It was also not possible for the State Government to give a direction purporting to Act u/s 89 of the Act to the effect that the enhanced age of 60 years would not be applicable to the employees of the Nigam treating the same to be a matter of policy nor it was permissible for the Nigam on the basis of such a direction of the State Government in policy matter of the Nigam to take an administrative decision acting u/s 15(1) of the Act as the same would be inconsistent with Regulation 31 which was framed by the Nigam in the exercise of powers conferred upon it u/s 97(2)(c) of the Act. Thus, we are of the view that so long Regulation 31 of the Regulations is not amended, 60 years which is the age of superannuation of government servants employed under the State of Uttar Pradesh shall be applicable to the employees of the Nigam. However, it would be open to the Nigam with the previous approval of the State Government to make suitable amendment in Regulation 31 and alter service conditions of employees of the Nigam, including their age of superannuation. It is needless to say that if it is so done, the same shall be prospective. Hence, the appeals as well as writ petitions are allowed, orders passed by the High Court dismissing the writ petitions as well as those by the Nigam directing that the appellants of the Civil Appeals and petitioners of the Writ Petitions would superannuate upon completion of the age of 58 years are set aside and it is directed that in case the employees have been allowed to continue up to the age of 60 years by virtue of some interim order, no recovery shall be made from them but in case, however, they have not been allowed to continue after completing the age of 58 years by virtue of erroneous decision taken by the Nigam for no fault of theirs, they would be entitled to payment of salary for the remaining period up to the age of 60 years which must be paid to them within a period of three months from the date of receipt of copy of this order by the Nigam.

Summary

Issues Involved:
1. Applicability of the amendment in Rule 56(a) of the Uttar Pradesh Fundamental Rules to the employees of Uttar Pradesh Jal Nigam.
2. Interpretation of Section 37 of the Uttar Pradesh Water Supply & Sewerage Act, 1975.
3. Validity of administrative decisions versus regulatory amendments.

Issue-Wise Detailed Analysis:

1. Applicability of the Amendment in Rule 56(a) to the Employees of Uttar Pradesh Jal Nigam:
The primary issue was whether the amendment made in Rule 56(a) of the Uttar Pradesh Fundamental Rules, which enhanced the age of superannuation from 58 to 60 years, applied to the employees of the Uttar Pradesh Jal Nigam (Nigam). The court examined the provisions of Section 37 of the Uttar Pradesh Water Supply & Sewerage Act, 1975, and Regulation 31 of the Uttar Pradesh Jal Nigam Engineers (Public Health Branch) Service Regulations, 1978. It was determined that the service conditions of the Nigam employees should be the same as those applicable to state government employees unless altered by the Nigam through proper regulatory amendments. Since Regulation 31 stipulated that the rules governing state government employees would apply to Nigam employees, the enhanced retirement age of 60 years should equally apply to Nigam employees.

2. Interpretation of Section 37 of the Uttar Pradesh Water Supply & Sewerage Act, 1975:
Section 37 of the Act specifies that employees transferred to the Nigam would retain the same service conditions as they had in the Local Self Government Engineering Department until altered by the Nigam. The court interpreted this to mean that any changes in the service conditions of state government employees, including the retirement age, would automatically apply to Nigam employees unless the Nigam made specific amendments to its regulations. The court emphasized that the service conditions include any amendments made to the rules applicable to state government employees.

3. Validity of Administrative Decisions Versus Regulatory Amendments:
The court addressed the validity of the Nigam's administrative decision not to extend the retirement age to 60 years based on directions from the State Government. The court held that administrative decisions cannot override existing regulations. The Nigam had framed regulations under Section 97 of the Act, and any change in service conditions required an amendment to these regulations with the prior approval of the State Government. The court cited the precedent set in V.T. Khanzode v. Reserve Bank of India, emphasizing that statutory corporations must adhere to their regulatory framework and cannot rely solely on administrative decisions to alter service conditions.

Conclusion:
The court concluded that the enhanced retirement age of 60 years for state government employees should apply to Nigam employees unless Regulation 31 was amended. The Nigam's administrative decision, based on directions from the State Government, was insufficient to alter the service conditions. The court directed that employees who were not allowed to continue up to 60 years due to the erroneous decision should be compensated with salary for the period they were denied work. The appeals and writ petitions were allowed, setting aside the orders of the High Court and the Nigam, and there was no order as to costs.