NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY & ANR. versus B D SINGHAL & ORS. on 15 July 2021

978

SUPREME COURT REPORTS

[2021] 6 S.C.R.

NEW OKHLA INDUSTRIAL DEVELOPMENTAUTHORITY & ANR.

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v.

B D SINGHAL & ORS.

(Civil Appeal No. 2310 of 2021)

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JULY 15, 2021

[DR. DHANANJAYA Y CHANDRACHUD ANDM. R. SHAH, JJ.]

Service Law – Superannuation – Enhancement ofCSuperannuation age – New Okhla Industrial Development Authority(NOIDA) constituted under provisions of the Act of 1976 – On 30September 2012, Government of Uttar Pradesh acceded to aproposal of the Appellant-NOIDA to enhance the age ofsuperannuation of its employees from fifty-eight to sixty years,Dprospectively – High Court set aside the decision of the Stategovernment to give prospective effect and in exercise of its powerof judicial review u/Art.226 of the Constitution directed thatretrospective effect be given to the Government Order from 29September 2002 – Whether High Court transcended the limits of itspower of judicial review – Held: High Court trenched upon theErealm of policy making and assumed to itself, jurisdiction over amatter which lies in the domain of the executive – Whether the ageof superannuation should be increased and if so, the date fromwhich this should be effected is a matter of policy into which theHigh Court ought not to have entered – Whether the decision toFincrease the age of superannuation should date back to theresolution passed by NOIDA or should be made effective from thedate of the approval by the State government was a matter for theState government to decide – Ultimately, in drawing every cut-off,some employees would stand on one side of the line while the otherswould be positioned otherwise – This element of hardship cannotGbe a ground for the High Court to hold that the decision wasarbitrary – The proposal of NOIDA could not have given rise to alegitimate expectation since it was a mere recommendation whichwas subject to the approval of the State Government – Respondent-employees could not have claimed a vested right that theHenhancement in the age of retirement should be made effective from the date on which NOIDA had resolved to submit a proposal for theapproval of the government – U.P. Industrial Area DevelopmentAct, 1976 – s.19 – New Okhla Industrial Development AuthorityService Regulations, 1981 – Regn.25 – Doctrine of legitimateexpectation – Inapplicability of – Constitution of India – Art.226 –Judicial Review.

Doctrines/Principles: Principle of promissory estoppel – Whenapplicable and when not applicable – Held: For the principle ofpromissory estoppel to apply, one party must have made anunequivocal promise, intending to create or affect a legal relationshipbetween the parties – The principle of promissory estoppel will notapply if the communication issued was either a proposal or arecommendation.

Doctrines/Principles: Doctrine of legitimate expectation –Held: The doctrine of legitimate expectation is grounded in fairnessand reasonableness – There is a legitimate expectation that theactions of the State are fair and reasonable.

Government Orders/Notifications/Circulars: Governmentorder – When retrospectively applicable – Held: Government ordercan be given retrospective application only if expressly stated orinferred through necessary implication.

Allowing the appeals, the Court

Conclusion

HELD: 1. Whether the age of superannuation should beenhanced is a matter of policy. If a decision has been taken toenhance the age of superannuation, the date with effect from whichthe enhancement should be made falls within the realm of policy.The High Court in ordering that the decision of the Stategovernment to accept the proposal to enhance the age ofsuperannuation must date back to 29 June 2002 evidently lostsight of the factual background, more specifically (i) the rejectionof the original proposal on 22 September 2009; and (ii) thejudgment of the Division Bench of the High Court dated 17January 2012 refusing to set aside the order rejecting the proposalon 22 September 2009 which has attained finality. But there is amore fundamental objection to the basis of the decision of theHigh Court. The infirmity in the judgment lies in the fact that the A

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AHigh Court has trenched upon the realm of policy making andhas assumed to itself, jurisdiction over a matter which lies in thedomain of the executive. Whether the age of superannuationshould be increased and if so, the date from which this should beeffected is a matter of policy into which the High Court ought notto have entered. [Para 19][995-B-D]B

2. The factual reasons which the High Court has indicatedare specious. The High Court has termed the decision to giveprospective effect to the enhancement of the age ofsuperannuation from 30 September 2012 as arbitrary on theground that the government should have “acted instantly” whenCthe resolution was received from NOIDA, and that there was nojustification not to grant retrospective effect when the resolutionhad been received “more than three years back”. Both thesefactors are erroneous. As a matter of fact, the resolution of theBoard of NOIDA dated 9 July 2012 (at its 176[th] meeting) wasDforwarded to the State government on 17 July 2012 and a decisionwas taken in about two months from the date of receipt of theproposal. The High Court’s observation on the delay of threeyears in taking a decision on the resolution of NOIDA is inreference to the 2005 resolution, which was rejected on 22September 2009. The Government resolution of 2012 wasEimpugned before the High Court, and the 2009 rejection orderhad attained finality in view of the judgment of the division benchof the High Court on 17 January 2012 which was not challengedbefore this court. [Para 20][995-E-H]

3. Whether the decision to increase the age ofFsuperannuation should date back to the resolution passed byNOIDA or should be made effective from the date of the approvalby the State government was a matter for the State governmentto decide. Ultimately, in drawing every cut-off, some employeeswould stand on one side of the line while the others would beGpositioned otherwise. This element of hardship cannot be a groundfor the High Court to hold that the decision was arbitrary. Whenthe State government originally decided to increase the age ofsuperannuation of its own employees from fifty-eight to sixty yearson 28 November 2001, it had left the public sector corporations H

to take a decision based on the financial impact which would resultif they were to increase the age of superannuation for their ownemployees. [Para 21][996-A-C]

4. From time to time the authorities of the State took adecision bearing upon the exigencies of service prevailing in eachorganisation. Different corporations of the State are governed bytheir service rules and regulations, and by the exigencies ofservice. The State government had evidently determined that itwas for each organisation to consider and determine the impactof the financial burden, and based on that the organisation wasto submit a proposal for the approval of the government.[Para 22][996-C, E-F]

5. The High Court’s observation that the Government orderon 30 September 2012 increasing the age of superannuationprospectively is arbitrary seems to be based on the premise thatthe respondent-employees have a vested right to the increase inthe age of retirement on the passage of the resolution by NOIDA.However, Section 19 of the UP Industrial Area Development Act1976 stipulates that regulations – which would includeamendments as in this case – will require the previous approvalof the State Government. The employees will have a vested rightto the increased age of superannuation only after the serviceregulations are modified upon approval of the State Government,and from such date as maybe prescribed by the Government.Para 1(ii) of the government order issued on 30 September 2012clearly and in unambiguous terms states that the order shall comeinto force prospectively. The government order can be givenretrospective application only if expressly stated or inferredthrough necessary implication. Therefore, the respondent-employees could not have claimed a vested right that theenhancement in the age of retirement should be made effectivefrom the date on which NOIDA had resolved to submit a proposalfor the approval of the government. [Para 23][996-G-H;997-A-B]

6. The argument of the respondents that the appellant-authority is estopped from claiming that the government orderissued on 30 September 2012 cannot be given retrospectiveeffect from 9 July 2012 since the Board resolution proposed an ABC

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Aincrease in the retirement age of its employees with ‘immediateeffect’ is unsustainable. For the principle of promissory estoppelto apply, one party must have made an unequivocal promise,intending to create or affect a legal relationship between theparties. The recommendation of NOIDA cannot create or alterthe legal relationship since it is subject to the approval of theBgovernment. The principle of promissory estoppel will not applyif the communication issued was either a proposal or arecommendation. Since the enhancement of the age ofsuperannuation is a ‘public function’ channelised by theprovisions of the statute and the service regulations, the doctrineCof promissory estoppel cannot be used. Though NOIDA soughtthe approval of the State government for the enhancement with‘immediate effect’, it never intended or portrayed to haveintended to give retrospective effect to the prospectivelyapplicable Government order. The representation of NOIDAcould not have given rise to a legitimate expectation since it wasDa mere recommendation which was subject to the approval of theState Government. Hence, the doctrine of legitimate expectationalso finds no application to the facts of the present case.[Para 24][997-C-E; 998-C-D]

7. The argument of the employees that since they hadEmoved the Chief Minister with a representation in August 2012before their date of superannuation which was to fall at the end ofthe month and that they should have the benefit of theenhancement in the age of superannuation has no substance. On31 August 2012, the respondents moved the High Court but noFinterim relief was granted to them and they attained the age ofsuperannuation. They have not worked in service thereafter.Since the High Court‘s judgment dismissing the challenge to thegovernment order dated 30 September 2012 has attained finality,the submission cannot be accepted. [Para 26][999-F-G]

GState of Uttar Pradesh v. Dayayanand Chakrawarthy(2013) 7 SCC 595 – distinguished.

Monnet Ispat and Energy Ltd. v. Union of India (2012)11 SCC 1:[2012] 7 SCR 644 and State of Jharkhand v.

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Brahmputra Metallics Ltd., Ranchi, [Decision ofSupreme Court in Civil Appeal No. 3860-62 of 2020]– relied on.

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P.Mahendran v. State of Karnataka (1990) 1 SCC 411:[1989] 2 Suppl. SCR 385; C.Gupta v. Glaxo-SmithklinePharmaceuticals Ltd. (2007) 7 SCC 171: [2007] 7 SCR800; Harwinder Kumar v. Chief Engineer,Karmik (2005)13 SCC 300: [2005] 5 Suppl. SCR 317; U.P Jal Nigamv. Jaswant Singh (2006) 11 SCC 464: [2006] 8 Suppl.SCR 916; and U.P Jal Nigam v. Radhey Shyam Gautam(2007) 11 SCC 507: [2007] 4 SCR 583 – referred to.

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Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2310of 2021.

From the Judgment and Order dated 25.01.2018 of the High Courtof Judicature at Allahabad in Writ C-No. 43780 of 2012.

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Civil Appeal No. 2311 of 2021.

Vinod Diwakar, AAG, Ravindra Kumar, Anuvrat Sharma, AntarikshSingh, Ms. Alka Sinha, Ms. Tanya Shree, Ejaz Maqbool, Ms. AkritiChaubey, Advs. for the appearing parties.

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The Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, J.

1. On 30 September 2012, the Government of Uttar Pradeshacceded to a proposal of the Appellant to enhance the age of H

Asuperannuation of its employees from fifty-eight to sixty years,prospectively. A Division Bench of the High Court of Judicature atAllahabad set aside the decision of the State government to giveprospective effect to the enhancement in the age of superannuation andin the exercise of its power of judicial review under Article 226 of theConstitution directed that retrospective effect be given to the GovernmentBOrder from 29 September 2002. The appeals by New Okhla IndustrialDevelopment Authority[1] and the State of Uttar Pradesh question thecorrectness of this determination. Simply put, the appeals raise the issueas to whether the High Court has transcended the limits of its power ofjudicial review.CI The Facts

2. The New Okhla Industrial Development Authority is constitutedunder the provisions of the UP Industrial Area Development Act 1976[2].The object was to constitute an authority for the development of certainareas of the Statenotified under Section 3 of the Act, into industrial andDurban townships. The legislation provides for the constitution of theauthority, its functions, powers, and for the appointment of the staffmembers. While the administrative head is appointed by the Stategovernment, Section 5 of the Act provides for the appointment of thestaff:E“5. Staff of the Authority. - (1) Subject to such control andrestrictions as may be determined by general or special orders ofthe State Government, the Authority may appoint such number ofofficers and employees, as may be necessary for the performanceof its functions, and may determine their grades and designations.

F(2) Subject as aforesaid the officers and other employees of theAuthority shall be entitled to receive from the funds of the Authority,such salaries and allowances and shall be governed by such otherconditions of service as may be agreed upon with the Authority.”

Section 19 enables the authority, with the previous approval of theGState government to frame regulations for the administration of the affairsof the authority. Section 19 reads as follows:

“19. Power to make regulations. - (1) The Authority may, withthe previous approval of the State Government, make regulation1 “NOIDA”.H2 “the Act”.

not inconsistent with the provisions of this Act or the rules madethereunder for the administration of the affairs of the Authority.

(2) In particular, and without prejudice to the generality of theforegoing power, such regulation may provide for all or any of thefollowing matters, namely,- (a) the summoning and holding of meetings of the Authority, thetime and place where such meetings are to be held, the conductof business at such meetings, and the number of membersnecessary to form a quorum thereat; (b) the powers and duties of the Chief Executive Officer;

(c) the form of register of application for permission to erect abuilding; (d) the management of properties of the Authority ; (e) fees to be levied in the discharge of its functions; (f) such other matters as are to be provided for in regulation.”

In pursuance of its power under Section 9 of the Act, the Authorityframed the New Okhla Industrial Development Authority ServiceRegulations, 1981[3] governing recruitment, appointment, pay, and otherservice conditions of the staff. Regulation 25 of the Noida Regulations,1981 states that the age of superannuation of the employees is fiftyeight. It reads as follows:

“Retirement 25. An employee shall retire at the age of fifty-eightyears.”

3. On 28 November 2001, the State government issued anotification[4 ]enhancing the age of retirement of‘Government servants’from fifty-eight to sixty years. Pursuant to this, Fundamental Rule 56Awas amended on 27 June 2002 enhancing the age of superannuation ofgovernment servants to sixty years with effect from 28 November 2001.

4. On 29 June 2002, the Board of NOIDA resolved to recommendthat the age of superannuation of its employees should be increasedfrom fifty-eight to sixty years. A recommendation to that effect wassubmitted to the State government on 22 March 2005, since anamendment of the NOIDA regulations,1981 would require the previousapproval of the State government in terms of Section 19 of the Act.

3 “NOIDA Regulations, 1981".

4 No. 1098/Pers-1/2001

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A5. On 2 September 2005, the State government informed NOIDAthat the decision on its proposal was deferred. Eventually, on 22September 2009, the State government rejected the proposal to enhancethe age of retirement of NOIDA employees. Challenging the decision ofthe State government, proceedings were initiated under Article 226 ofthe Constitution before the High Court of Judicature at Allahabad[5] byBcertain employees seeking:

(i) A Writ of certiorari to quash the government order dated22 September 2009; and

(ii) A Writ directing the respondents to those proceedings notto retire the employees at the age of fifty-eight and to allowCthem to continue till they attain the age of sixty years.

6. A Division Bench of the High Court rendered judgment in thewrit proceeding on 17 January 2012 by which it directed NOIDA toconsider the issue in its next Board meeting after taking into account thefinancial burden that may be occasioned to the authority by an increaseDin the age of retirement. The High Court specifically left it open to thegovernment to consider whether to give effect to the increase in the ageof retirement from the date on which NOIDA resolved to bear thefinancial burden or from such other date as the government may findexpedient. As para 13 of the operative directions indicates:

E“13. Having regard to facts and circumstances, we dispose of thewrit petition with directions that NOIDA may consider the matterin its next Board meeting, taking into account its earlier resolutionmade in the year 2002, to bear the financial burden, after financialassessment of such burden, and the effect of increase of retirementage on other employees. It may thereafter refer the matter to theFconcerned Administrative Department of the State Governmentfor its evaluation and recommendation, and for forwarding thesame to the State Government for its approval. We also directthat if such a decision is taken by the State Government, it will beopen to the State Government to consider to give effect to· theGincrease in the age of retirement with effect from the date whenthe NOIDA had resolved to bear the financial burden, or fromany such date, which the State Government may find it expedient.”7. On 9 July 2012, the Board of NOIDA at its 176[th] meetingresolved to recommend to the State government to increase the age of H5 Writ Petition No. 48162/2010.

retirement for its employees from fifty-eight to sixty years “with immediateeffect”. The resolution was communicated to the State government bya letter dated 17 July 2012 which, in its material segment reads as follows:

“…the Board in its 176th Meeting held on 9.7.2012 has passed aresolution proposing to increase the age of superannuation from58 to 60 years (attested copies of the agenda and the Minutes ofthe Board resolution are enclosed), wherein it is clearly statedthat the financial burden on account of increasing the age ofretirement from 58 to 60 years would be borne by the Authorityfrom its own resources and no financial aid of any kind would betaken from the State Government either at present or in the future.Therefore, it is requested that the increase in the age of retirementof the officers I employees of the Authority be increased from 58to 60 years with immediate effect.”

8. On 27 August 2012, a writ petition was instituted by the firstand second respondents to (i) challenge the order of the State governmentdated 22 September 2009 rejecting the original proposal for enhancementof the age of retirement; and (ii) for a direction not to retire the first andsecond respondents at the age of fifty-eight and to allow them to continueuntil the age of sixty. Now, at this stage it is material to take note ofcertain facts pertaining to the first and second respondents. The secondrespondent was appointed in service on 21 March 1977 (his date of birthbeing 18 August 1954). The first respondent was appointed on 6 March1980 (his date of birth being 15 August 1954). Both the employees weredue to retire on 31 August 2012 on attaining the then prevailing age ofsuperannuation. On 31 August 2012, notice was issued on the writ petitionbut no interim order was passed resulting in both of them superannuatingon 31 August 2012.

9. On 30 September 2012, the Government of Uttar Pradeshacceded to NOIDA’s proposal for enhancing the age of retirement tosixty years. However, this was expressly made prospective in terms ofthe paragraph 1 (ii), which reads as follows:

“(ii) This provision shall come into force in the NOIDA withimmediate effect (from the date of issue of this Govt. order) andthere shall not for any retrospective effect.”

10. The petition before the High Court was amended to incorporatea relief seeking to quash paragraph 1(ii) of the order of the Stategovernment dated 30 September 2012. A Division Bench of the High A

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ACourt at Lucknow allowed the writ petition and struck down the provisionsof para 1(ii). While doing so the High Court directed that the increase inthe age of superannuation to sixty years shall have retrospective effectfrom 29 June 2002, and the first and second respondents would bedeemed to have worked until the extended age of retirement. Theirbenefits were directed to be computed accordingly. This led to the filingBof Special Leave Petitions before this court under Article 136. Assailingthe judgment of the High Court, a companion petition has been filed bythe Government of Uttar Pradesh. While issuing notice on 19 November2018 on NOIDA’s Special Leave Petition, this Court granted an adinterim stay of the judgment of the High Court.CII The Contentions11. Challenging the judgment of the High Court, Mr RavindraKumar, learned Counsel appearing on behalf of NOIDA has urged thefollowing submissions:

(i) The Service Regulations and consequently amendments toDthem are in the nature of subordinate legislation. No part ofthe amended Regulations could have been struck down –para 1(ii) in this case – unless they were declared to beultra vires the provisions of the Constitution or the parentStatute. There is no such declaration by the High CourtEwhile delivering the impugned judgement;

(ii) The High Court has committed a manifest error whiledirecting that the revision in the age of the retirement shallapply retrospectively with effect from the date of theResolution dated 29 June 2002. While issuing such aFdirection, the High Court failed to consider the following:

(a) The Government Order dated 30 September 2012was issued approving the recommendation of NOIDAdated 17 July 2012 and not in the context of the earlierrecommendation dated 29 June 2002; (b)The earlier recommendation dated 29 June 2002 hadbeen rejected by the State Government on 22September 2009. The Writ Petition[6] which had beenfiled challenging the State government’s rejectionorder dated 22 September 2009 was decided on 17

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January 2012, much before the filing of the writpetition by first and second respondents on 27 August2012 in which the impugned judgment was delivered; A

(c) In the above Writ Petition though a prayer was madeto quash the Government Order dated 22 September2009, yet no such relief as prayed was granted. OnBthe contrary, the only direction was that NOIDA mayconsider the matter again in its next Board Meetingand thereafter refer the matter to the Stategovernment for its approval. It was observed in thejudgement dated 17 January 2012 that if any decisionCapproving the recommendation is taken by the StateGovernment, it will be open to it to decide the datefrom which it may find it expedient to increase theage of retirement; and (d)After the judgement dated 17 January 2012, NOIDAsent a fresh recommendation to the StateGovernment on 17 July 2012. This recommendationwas ultimately accepted by the State Governmentanda Government Order dated 30 September 2012was issued by it. This Government Order directs thatthe increase in the age of retirement from fifty-eightto sixty years “shall come into force with immediateeffect (from the date of issue of this GovernmentOrder) and there shall not be any retrospectiveeffect”.

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(iii) When the order directing increase in the age of retirementis clear, namely that it shall come into force with immediateeffect coupled with the words that the increase shall nothave any retrospective effect, then the intention of themaker of the subordinate legislation categorical obviatesany possible interpretation giving it retrospective effect. Inthese circumstances, the Court cannot issue directions givingretrospective effect to the amendment. The golden rule ofstatutory interpretation is that in the absence of an expressprovision or a necessary intendment providingretrospectivity, the interpretation must only be prospective.An exception to this rule is only available in matters of F

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Aprocedure. (P. Mahendran v. State of Karnataka[7];C.Gupta v. Glaxo-Smithkline Pharmaceuticals Ltd.[8]);

(iv) The observation of the High Court that the Governmentshould have acted instantly “when the resolution wasreceived by it more than 3 years back” is factually incorrect.BThe Government Order dated 30 September 2012 itselfrecites that it is issued in reference to the recommendationdated 17 July 2012. Therefore, there was no delay of 3years in the issuance of the Government Order. TheGovernment Order was issued in a little more than 2 months.The High Court has erred in directing that the writ petitionersCshall be deemed to have worked with NOIDA till the ageof sixty years and they be paid salary and other benefits fortwo years during which they never worked. The first andsecond respondents were due for retirement with effectfrom 31 August 2012. They filed the writ petition on orDabout 27 August 2012, praying that they be permitted tocontinue on their posts till they attain the age of sixty yearsand salary be paid to them accordingly. However, whileissuing notice on the writ petition or at any time thereafterno interim order was granted by the High Court. When thefirst and second respondents performed no work, they areEnot entitled to receive salary for such period. The principleof ‘no work no pay’ will applicable in such a situation.Theinability of the writ petitioners to persuade the High Courtto grant interim orders cannot act to the advantage of therespondents. This is not a case of termination of servicesFwhich is later set aside by an order of the court therebydirecting payment of salary as arrears;

(v) The High Court has granted relief which was not prayed.It has ordered that the increase in the age of retirementwould be effective from 29 June 2002. The first and secondrespondents in their counter affidavit (at page 146 and 155),Ghave admitted that relief was prayed with effect from 9July 2012. Thus, the direction contained in the impugnedjudgment that the increase in the age of retirement wouldbe effective from 29 June 2002 is unsustainable; 7 (1990) 1 SCC 411.H8 (2007) 7 SCC 171.

(vi) The effect of the impugned judgment runs contrary to theearlier Division Bench’s judgment dated 17 January 2012,and is beyond the prayers made in the writ petition. It hasresulted in demands from dozens of employees of NOIDA,who had retired decades ago. For example, in September,2004, employees made demands seeking arrears of pay andallowances considering the retirement age as sixty yearsfor them as well. The interpretation / direction given in theimpugned judgment has a cascading effect and isunsustainable in law; and

(vii) The High Court was under the wrong impression thatNOIDA, the authority that is to bear the financial burdenconsequent to the increase in the age of retirement supportedthe case of the Respondents/employees that theGovernment Order issued on 20 September 2012 must haveretrospective effect.

12. Mr Vinod Diwakar, learned AAG for the State of Uttar Pradeshhas adopted the submission of Mr Ravindra Kumar, learned Counsel forNOIDA.

13. Ms Tanya Shree, learned Counsel has appeared on behalf ofthe respondents to oppose the submissions in the appeals. Beforeelucidating the submissions, it would be necessary to extract a submissionfrom the counter affidavit which has been filed by the respondents inresponse to the present proceedings. Paragraph 6 of the counter affidavitreads as follows:

“Further, it is submitted that the Answering Respondents hereindid not seek the benefit of enhancement of age of retirement ofthe employees of the Petitioner-Authority from the date of itsearlier resolution dated June 29, 2002. In fact it was the case ofthe Answering Respondents before the Hon’ble High Court inWrit Petition being Writ-A No. 43780 of 2012 that the age ofretirement of the Answering Respondents be enhanced w.e.f thedate of resolution dated July 9, 2012 of the Petitioner-Authorityand the Answering Respondents are only claiming a limited reliefof enhancing the age of retirement of the Answering respondentsw.e.f. the date of Resolution of the Petitioner-Authority i.e July 9,2012.”

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AThe above extract from the counter affidavit has clarified that therelief which the respondents – employees sought is the enhancement ofthe age of retirement with effect from 19 July 2012 which is the date onwhich the Board of NOIDA resolved to increase the age of retirement.In this backdrop, Ms Tanya Shree submitted as follows:

B(i)The decision of the State government dated 20 September2011 to enhance the age of superannuation for its employeeswas circulated inter alia to public sector undertakings andcorporations enabling them to determine whether they werein a position to bear the financial burden attendant upon anincrease in the age of retirement. Upon examination of theCfinancial impact, if each corporation resolved to accept thefinancial burden, it could then seek the approval of the Stategovernment. All such decisions were to be implementedonly after the approval of the State government, though itwas made clear that no financial grants would be providedDto meet the additional cost outlay;

(ii) In the case of several other public sector corporations, theState government resolved to increase the age of retirement.In certain cases it resolved to give retrospective effect; forinstance in the case of the Uttar Pradesh State HandicraftsECorporation Ltd., the government by its decision dated 17April 2012 resolved to increase the age of retirement witheffect from 20 December 2011;

(iii) On 16 August 2012, a letter was addressed by therespondents to the Chief Minister requesting for anFenhancement in the age of retirement since NOIDA hadagreed to bear the financial burden by its resolution dated 9July 2012 and adverting to the fact that several employeeswould be retiring by the end of August 2012;

(iv) The State government did not provide any reasons why itGdid not make its decision operative with effect from 9 July2012, the date when the resolution was passed by the Boardof NOIDA to enhance the age of retirement;

(v) Though, the respondents had approached the governmentof Uttar Pradesh with a representation seeking permissionto allow them to work till the age of 60 years, theH

representation was not allowed.As a consequence of thisthey are entitled to the payment of their salary and all otherconsequential benefits occasioned by the extension in theage of retirement since it was the appellant authority thatdid not permit the respondents to continue in service thoughthey were willing to work. In State of Uttar Pradesh v.Dayayanand Chakrawarthy[9] it was held that if theemployer prevents the employee from performing his duties,the employee cannot be blamed for his absence from dutyand the principle of ‘no pay no work’ shall not be applicableto such an employee; and

(vi) The Board resolution of 9 July 2012 proposed to increasethe age of retirement of the employees with immediateeffect. The authority is now estopped from going back onits own resolution and denying the benefit of theenhancement of age from the date of the resolution.

III The Analysis

14. The High Court while striking down para 1(ii) of theGovernment Orderdated 30 September 2012 to enhance the age ofretirement with prospective effect (para 1(ii) of the government ordermakes this position clear) has directed that the enhancement of the ageof retirement must date back to 29 June 2002. This direction givingretrospective effect to the enhancement in the age of retirement seemsto be based on the fact that the original resolution of the Board of NOIDAto enhance the age of retirement wasissued on 29 June 2002. In grantingthis relief, the High Court has formulated two reasons in its judgment:firstly, the government order dated 30 September 2012 is arbitrary forhaving increased the age of retirement with effect from the date of theorder without giving the benefit to employees who had retired prior tothat date ;and secondly, there was no reason to refuse the benefit of anextension of the age of superannuation retrospectively when the resolutionwas received by the State government “more than three years back”.

15. The reasons which have weighed with the High Court arebased on factually incorrect premises and are founded on amisunderstanding of the legal position. After the Board of NOIDAresolved on 29 June 2002 to enhance the age of superannuation from 9 (2013) 7 SCC 595.

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Afifty-eight to sixty years, its recommendation was forwarded to the Stategovernment on 22 March 2005. On 2 September 2005, the Stategovernment deferred a decision on the recommendation. Subsequently,the proposal was rejected on 22 September 2009.

16. The order of rejection was challenged in writ proceedings[10]Bwhich culminated in the judgment of the Division Bench rendered on 17January 2012. The Division Bench refused to quash the order of rejection.Evidently, at that stage, the basic issue was in regard to whether thefinancial burden could be borne by an authority such as NOIDA. This isevident from the fact that the High Court while deciding upon the meritsof the proceedings under Article 226 held that it was for the Board ofCNOIDA to consider whether it could bear the financial burden occasionedby an increase in the age of retirement, and to thereafter move the Stategovernment for its approval. While disposing of the Writ Petition, theHigh Court specifically observed that “it will be open to the Stategovernment to consider to give effect to the increase in the age ofDretirement with effect from the date when NOIDA has resolved to bearthe financial burden, or from any such date, which the State Governmentmay find it expedient.”This order has attained finality since it was notchallenged before this Court.

17. It was in terms of the order of the High Court that the BoardEof NOIDA resolved on 9 July 2012 to recommend to the Stategovernment that the age of superannuation of its employees should beenhanced with immediate effect, and the additional financial outlay wouldbe met from the resources of the authority without any claim for grantsbeing made to the State government. The State government respondedto this proposal by acceding to the request to enhance the age ofFsuperannuation, though prospectively from 30 September 2012.

18. NOIDA, as an authority, constituted by the UP Industrial AreaDevelopment Act 1976 is bound by the rigour and discipline of the statute.The power to appoint officers and employees is conferred upon theauthority by Section 5(i) “subject to such control and restrictions as mayGbe determined by general or special orders of the State government”.Section 19 requires the prior approval of the State government to theregulations framed by the authority. The regulations governing theconditions of service were notified on 14 January 1981with the previousapproval of the State government. Under Regulation 25 of the NOIDA

H10 W.P No. 48162/2010.

Regulations 1981, the age of superannuation was fixed at fifty-eightyears. Consequently, any enhancement of the age of superannuationwould require an amendment of the service regulations necessitating, interms of Section 19, the prior approval of the State government.

19. Whether the age of superannuation should be enhanced is amatter of policy. If a decision has been taken to enhance the age ofsuperannuation, the date with effect from which the enhancement shouldbe made falls within the realm of policy. The High Court in ordering thatthe decision of the State government to accept the proposal to enhancethe age of superannuation must date back to 29 June 2002 has evidentlylost sight of the above factual background, more specifically (i) therejection of the original proposal on 22 September 2009; and (ii) thejudgment of the Division Bench dated 17 January 2012 refusing to setaside the order rejecting the proposal on 22 September 2009 whichhasattained finality. But there is a more fundamental objection to thebasis of the decision of the High Court. The infirmity in the judgment liesin the fact that the High Court has trenched upon therealm of policymaking and has assumed to itself, jurisdiction over a matter which lies inthe domain of the executive. Whether the age of superannuation shouldbe increased and if so, the date from which this should be effected is amatter of policy into which the High Court ought not to have entered.

20. The factual reasons which the High Court has indicated arespecious. The High Court has termed the decision to give prospectiveeffect to the enhancement of the age of superannuation from 30September 2012 as arbitrary on the ground that the government shouldhave “acted instantly” when the resolution was received from NOIDA,and that there was no justification not to grant retrospective effect whenthe resolution had been received “more than three years back”.Boththese factors are erroneous. As a matter of fact, the resolution of theBoard of NOIDA dated 9 July 2012 (at its 176[th] meeting) was forwardedto the State government on 17 July 2012 and a decision was taken inabout two months from the date of receipt of the proposal. The HighCourt’s observation on the delay of three years in taking a decision onthe resolution of NOIDA is in reference to the 2005 resolution, whichwas rejected on 22 September 2009. As stated above, the Governmentresolution of 2012 was impugned before the High Court, and the 2009rejection order had attained finality in view of the judgment of the divisionbench of the High Court on 17 January 2012 which was not challengedbefore this court.

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A21. Whether the decision to increase the age of superannuationshould date back to the resolution passed by NOIDA or should be madeeffective from the date of the approval by the State government was amatter for the State government to decide.Ultimately, in drawing everycut-off, some employees would stand on one side of the line while theothers would be positioned otherwise. This element of hardship cannotBbe a ground for the High Court to hold that the decision was arbitrary.When the State government originally decided to increase the age ofsuperannuation of its own employees from fifty-eight to sixty years on28 November 2001, it had left the public sector corporations to take adecision based on the financial impact which would result if they wereCto increase the age of superannuation for their own employees.

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22. From time to time the authorities of the State took a decisionbearing upon the exigencies of service prevailing in each organisation.By an OM dated 16 May 2005, the age of retirement of employees ofthe Agricultural Produce and Marketing Committee (APMC) wasDenhanced with immediate effect, without giving retrospectiveoperation.Similarly, on 15 December 2006 the age of retirement ofemployees of the UP Power Corporation was enhanced withoutconferring retrospective effect. On 17 April 2012, the age ofsuperannuation of the employees of UP State Handicrafts CorporationLimited was enhanced with effect from 20 December 2011. On 22 MayE2012, the age of superannuation of the employees of the UP State IndustrialDevelopment Corporation Limited was enhanced “with immediateeffect”. Different corporations of the State are governed by their servicerules and regulations, and by the exigencies of service. The Stategovernment had evidently determined that it was for each organisationFto consider and determine the impact of the financial burden, and basedon that the organisation was to submit a proposal for the approval of thegovernment.

23. The High Court’s observation that the Government order on30 September 2012 increasing the age of superannuation prospectivelyis arbitrary seems to be based on the premise that the respondent-Gemployees have a vested right to the increase in the age of retirementon the passage of the resolution by NOIDA. However, Section 19 of theAct stipulates that regulations – which would include amendments as inthis case – will require the previous approval of the State Government.The employees will have a vested right to the increased age ofHsuperannuation only after the service regulations are modified upon approval of the State Government, and from such date as maybeprescribed by the Government. Para 1(ii) of the government order issuedon 30 September 2012 clearly and in unambiguous terms states that theorder shall come into force prospectively. The government order can begiven retrospective application only if expressly stated or inferred throughnecessary implication. Therefore, the respondent-employees could nothave claimed a vested right that the enhancement in the age of retirementshould be made effective from the date on which NOIDA had resolvedto submit a proposal for the approval of the government.

24. The argument of the respondents that the appellant-authorityis estopped from claiming that the government order issued on 30September 2012 cannot be given retrospective effect from 9 July 2012since the Board resolution proposed an increase in the retirement age ofits employees with ‘immediate effect’ is unsustainable. For the principleof promissory estoppel to apply, one party must have made anunequivocal promise, intending to create or affect a legal relationshipbetween the parties.[11] The recommendation of NOIDA cannot createor alter the legal relationship since it is subject to the approval of thegovernment. Justice H L Gokhale in a concurring opinion in MonnetIspat and Energy Ltd. v. Union of India[12 ]clarified that the principleof promissory estoppel will not apply if the communication issued waseither a proposal or a recommendation. The learned judge observed:

“289. As we have seen earlier, for invoking the principle ofpromissory estoppel there has to be a promise, and on that basisthe party concerned must have acted to its prejudice. In the instantcase it was only a proposal, and it was very much made clear thatit was to be approved by the Central Government, prior wheretoit could not be construed as containing a promise. Besides, equitycannot be used against a statutory provision or notification.”

(emphasis supplied)

In State of Jharkhand v. Brahmputra Metallics Ltd., Ranchi[13],this court speaking through of one us (DY Chandrachud J) elaboratedon the doctrine of legitimate expectation, which is grounded in fairnessand reasonableness.Explaining that there is a legitimate expectation thatthe actions of the State are fair and reasonable, it was observed:

11 Monnet Ispat & Energy Limited v. Union of India & Ors., (2012) 11 SCC 1.12 (2012) 11 SCC 1.

13 Civil Appeal No. 3860-62 of 2020.

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A“45. …The state must discard the colonial notion that it is asovereign handing out doles at its will. Its policies give rise tolegitimate expectations that the state will act according to what itputs forth in the public realm. In all its actions, the State is boundto act fairly, in a transparent manner. This is an elementaryrequirement of the guarantee against arbitrary state action whichBArticle 14 of the Constitution adopts.”

(emphasis supplied)

Since the enhancement of the age of superannuation is a ‘publicfunction’channelised by the provisions of the statute and the serviceCregulations, the doctrine of promissory estoppel cannot be used tochallenge the action of NOIDA. Though NOIDA sought the approvalof the State government for the enhancement with ‘immediate effect’, itnever intended or portrayed to have intended to give retrospective effectto the prospectively applicable Government order. The representation ofDNOIDA could not have given rise to a legitimate expectation since itwas a mere recommendation which was subject to the approval of theState Government.Hence, the doctrine of legitimate expectation alsofinds no application to the facts of the present case.

25. The reliance placed by the respondents on DayanandEChakrawarthy (supra) to argue that they were willing to work till theyattained the age of sixty years but were not permitted to, and thus theprinciple of ‘no work no pay’ would not be applicable is misplaced. InDayanand Chakrawarthy, the issue before the two judge Bench of thiscourt was whether prescription of different ages of retirement based onthe mode of recruitment under the UP Jal Nigam (Retirement on attainingFage of superannuation) Regulations, 2005 was unconstitutional forviolating Article 14 of the Constitution. This court held that the differentialsuperannuating agewas discriminatory. However, by virtue of Regulation31 of the UP Jal Nigam Services of Engineers (Public Health Branch)Regulations, 1978 the service conditions of State government employeesGis applicable to the UP Jal Nigam employees. Therefore when the JalNigam through an Office memorandum had resolved that the age ofretirement for its employees shall be fifty eight years, though it was sixtyyears for State government employees, it was set aside by this court inHarwinder Kumar v. Chief Engineer, Karmik[14]. In Harwinder Kumar and the subsequent cases (U.P Jal Nigam v. Jaswant Singh[15];U.P Jal Nigam v. Radhey Shyam Gautam[16]) involving the age ofretirement of the UP Jal Nigam employees, this court had held thatemployees who had approached the courts shall be entitled to full salaryuntil the age of sixty years. It was in this context that a two judge benchof this court speaking through Mukhopadhaya J made the followingobservation in Dayanand Chakrawarthy:

“48. …We observe that the principle of “no pay no work” is notapplicable to the employees who were guided by specific ruleslike Leave Rules, etc. relating to absence from duty. Such principlecan be applied to only those employees who were not guided byany specific rule relating to absence from duty. If an employee isprevented by the employer from performing his duties, theemployee cannot be blamed for having not worked, and the principleof “no pay no work” shall not be applicable to such employee.”

In Dayanand Chakrawarthy the court directed payment ofarrears deeming the employees to have worked till sixty years inspite ofno interim order being issued in that regard because (i) the OfficeMemorandum was held ultra vires ; (ii) Harwinder Kumar, JaswantSingh,and Radhey Shyam Gautam had already held that the age ofretirement of the Jal Nigam employees shall be 60 years unless aregulation prescribing a lower retirement age is issued in terms ofRegulation 31, and had extended this benefit to all the parties who hadfiled writ petitions. Therefore, the above observation must be read in thecontext of the distinct factual situation in the case.

26. The argument of the employees that since they had movedthe Chief Minister with a representation in August 2012 before theirdate of superannuation which was to fall at the end of the month andthat they should have the benefit of the enhancement in the age ofsuperannuation has no substance. On 31 August 2012, the respondentsmoved the High Court but no interim relief was granted to them andthey attained the age of superannuation. They have not worked in servicethereafter. Since the High Court‘s judgment dismissing the challenge tothe government order dated 30 September 2012 has attained finality, thesubmission cannot be accepted.

15 (2006) 11 SCC 464.

16 (2007) 11 SCC 507.

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A27. For the above reasons, we allow the appeals and set aside theimpugned judgment and order of the Division Bench at Lucknow of theHigh Court of Judicature at Allahabad dated 25 January 2018 in WA No43780 of 2012. The Writ Petition shall in consequence stand dismissed.There shall be no order as to costs.

B28. Pending application(s), if any, stands disposed of.

Devika Gujral

Appeals allowed.

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