THE STATE OF MAHARASHTRA & ANR. versus BHAGWAN & ORS. on 10 January 2022

[2022] 1 S.C.R. 129

THE STATE OF MAHARASHTRA & ANR.

v.

BHAGWAN & ORS.(Civil Appeal Nos. 7682-7684 of 2021)

JANUARY 10, 2022

[M. R. SHAH AND B. V. NAGARATHNA, JJ.]

Pension: Claim for pensionary benefits by employees ofautonomous body (WALMI) – WALMI is an independent autonomousbody and a society registered under the Societies Registration Act –The administration and management of the WALMI is through itsGoverning Council – WALMI has its own Rules, namely, WALMIEstablishment Rules, 1980, governing the service conditions andthe benefits available to its employees – The Rules, 1980 providefor the benefits of travelling allowance, daily allowance, medicalreimbursement, house rent allowance etc. however, do not providefor pension – The Governing Council of WALMI also adopted theMaharashtra Civil Services Rules except the Pension Rules – Thus,WALMI is an independent autonomous entity governed by their ownRules and Regulations and the administration and management ofWALMI is being run through/by its Governing Council – Even theState is not the Disciplinary Authority of the employees of WALMI –The Government by G.R. dated 08.11.2005 specifically took a policydecision that the employees of aided institutes, boards, corporations,are not entitled for grant of pensionary benefits and theMaharashtra Civil Services (Pension) Rules, 1982 shall not be madeapplicable to such institutions – Even the proposal made by thethen Director of WALMI to extend the pensionary benefits to theemployees of WALMI was rejected by the State Government – NeitherG.R. dated 08.11.2005 nor the decision of the State Governmentrefusing to extend the pensionary benefits to the employees of WALMIwas challenged – Therefore, as such a conscious policy decisionwas taken not to adopt the Pension Rules for the WALMI employeesapplicable to the State Government employees – In the said factsand circumstances, High Court was not justified in directing theState to extend the pensionary benefits to the employees of WALMI.

Pension: Claim for pensionary benefits by employees ofautonomous body – The employees of the autonomous bodies cannot

129

A

B

CDEFG

H

Aclaim, as a matter of right, the same service benefits on par with theGovernment employees – Merely because such autonomous bodiesmight have adopted the Government Service Rules and/or in theGoverning Council, there may be a representative of the Governmentand/or merely because such institution is funded by the State/CentralGovernment, the employees of such autonomous bodies cannot, asBa matter of right, claim parity with the State/Central Governmentemployees – This is more particularly, when the employees of suchautonomous bodies are governed by their own Service Rules andservice conditions – Pension.

Administrative law: Policy decision – Scope of interferenceCby courts – Held: Court should refrain from interfering with thepolicy decision, which might have a cascading effect and havefinancial implications – Whether to grant certain benefits to theemployees or not should be left to the expert body and theundertakings and the Court cannot interfere lightly – Granting ofDcertain benefits may result in a cascading effect having adversefinancial consequences.

Conclusion

Autonomous body – The observations made by the High Courtthat as the salary and allowances payable to the employees of WALMIare being paid out of the Consolidated Fund of the State and/orEthat the WALMI is getting grant from the Government, there is nojustification to treat the employees of WALMI differently than thatof the State Government – Further, observations made by the HighCourt that the amount available with WALMI and deposited withE.P.F. towards the employee’s contribution itself is sufficient to meetthe financial liability of the pensionary benefits to the employeesFand, therefore, there is no justification and/or reasonable basis forthe State Government to refuse to extend the benefit of pension tothe retired employees of WALMI – Held: These are all irrelevantconsiderations, so far as extending the pensionary benefits toemployees of WALMI is concerned – WALMI has to run itsadministration from its own financial resources – WALMI has noGfinancial powers of imposing any tax like a State and/or the CentralGovernment and WALMI has to depend upon the grants to be madeby the State Government – Further, merely because WALMI has afund with itself, it cannot be a ground to extend the pensionarybenefits – Grant of pensionary benefits is not a one-time payment –HIt is a recurring monthly expenditure and there is a continuous liability in future towards the pensionary benefits – Therefore, merelybecause at one point of time, WALMI might have certain funds doesnot mean that for all times to come, it can bear such burden ofpaying pension to all its employees – In any case, it is ultimately forthe State Government and WALMI to take their own policy decisionwhether to extend the pensionary benefits to its employees or not –The interference by the Judiciary in such a policy decision havingfinancial implications and/or having a cascading effect is not at allwarranted and justified.

Allowing the appeals, the Court

HELD: 1. As per the settled proposition of law, the Courtshould refrain from interfering with the policy decision, whichmight have a cascading effect and having financial implications.Whether to grant certain benefits to the employees or not shouldbe left to the expert body and undertakings and the Court cannotinterfere lightly. Granting of certain benefits may resultin a cascading effect having adverse financial consequences.[Para 10.4][145-G]

Secretary, Finance Department and others v. West BengalRegistration Service Association and others, 1993 Supp(1) SCC 153 : [1992] 1 SCR 897; State of Bihar andothers v. Bihar Secondary Teachers Struggle Committee,Munger and others, (2019) 18 SCC 301 : [2019] SCR738 – referred to.

2. In the present case, WALMI being an autonomous body,registered under the Societies Registration Act, the employeesof WALMI are governed by their own Service Rules andconditions, which specifically do not provide for any pensionarybenefits; the Governing Council of WALMI has adopted theMaharashtra Civil Services Rules except the Pension Rules.Therefore, as such a conscious policy decision has been takennot to adopt the Pension Rules applicable to the State Governmentemployees; that the State Government has taken such a policydecision in the year 2005 not to extend the pensionary benefitsto the employees of the aided institutes, boards, corporationsetc.; and the proposal of the then Director of WALMI to extend AB

C

D

E

F

G

H

AB

C

D

E

F

G

H

Athe pensionary benefits to the employees of WALMI has beenspecifically turned down by the State Government. Consideringthe aforesaid facts and circumstances, the High Court is notjustified in directing the State to extend the pensionary benefitsto the employees of WALMI, which is an independentautonomous entity. [Para 10.5][145-H; 146-A-C]B

3. The observations made by the High court that as thesalary and allowances payable to the employees of WALMI arebeing paid out of the Consolidated Fund of the State and/or thatthe WALMI is getting grant from the Government are allirrelevant considerations, so far as extending the pensionaryCbenefits to its employees is concerned. WALMI has to run itsadministration from its own financial resources. WALMI has nofinancial powers of imposing any tax like a State and/or the CentralGovernment and WALMI has to depend upon the grants to bemade by the State Government. [Para 10.6][146-D-E]

D

4. So far as the observations made by the High Court thatthe amount available with WALMI and deposited with E.P.F.towards the employee’s contribution itself is sufficient to meetthe financial liability of the pensionary benefits to the employeesand, therefore, there is no justification and/or reasonable basisEfor the State Government to refuse to extend the benefit ofpension to the retired employees of WALMI is concerned, merelybecause WALMI has a fund with itself, it cannot be a ground toextend the pensionary benefits. Grant of pensionary benefits isnot a one-time payment. Grant of pensionary benefits is arecurring monthly expenditure and there is a continuous liabilityFin future towards the pensionary benefits. Therefore, merelybecause at one point of time, WALMI might have certain fundsdoes not mean that for all times to come, it can bear such burdenof paying pension to all its employees. [Para 10.7][146-E-H]

Punjab State Cooperative Milk Producers FederationGLimited and Anr. v. Balbir Kumar Walia and Ors. (2021)8 SCC 784; T.M. Sampath and Ors. v. Secretary,Ministry of Water Resources and Ors., (2015) 5 SCC333 : [2015] 1 SCR 748 – relied on.

H

State of Kerala and Anr. v. Naveena Prabhu and Ors.(2009) 3 SCC 649 : [2009] 2 SCR 958; PurshottamLal and Ors. v. Union of India and Anr. (1973) 1 SCC651; Haryana State Minor Irrigation TubewellsCorporation and Ors. v. G.S. Uppal and Ors. (2008) 7SCC 375 : [2008] 6 SCR 662 – referred to.

A

B

Case Law Reference

D

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7682-7684 of 2021.

From the Judgment and Order dated 20.07.2018 of the High Courtof Judicature at Bombay, Bench at Aurangabad in Writ Petition No.748of 2014 and Order dated 05.09.2019 in Review Application (C) Nos.148and 191 of 2019 in Writ Petition No.748 of 2014.

E

With

Civil Appeal Nos. 7685-7687 and 7688-7690 of 2021.

F

Tushar Mehta, SG, Sachin Patil, Rahul Chitnis, Aaditya A. Pande,Geo Joseph, Ms. Shwetal Shepal, Advs. for the Appellants.

J. N. Singh, Saurabh Mishra, Ms. Sadhana Singh, YashodeepDeshmukh, Advs. for the Respondents.

The Judgment of the Court was delivered by G

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned commonjudgment and order passed by the High Court of Judicature at Bombaydated 20.07.2018 passed in Writ Petition No.748 of 2014 and other H

Aconnected writ petitions by which the High Court has allowed the saidwrit petitions and has directed the State Government to extend thepensionary benefits to the employees of Water and Land ManagementInstitute, the State of Maharashtra and another have preferred the presentappeals. The State preferred review applications which came to bedismissed.B

2. That Water and Land Management Institute (hereinafterreferred to as “WALMI”) is a society registered under the SocietiesRegistration Act, 1860, which has its own Memorandum of Association.WALMI is being administered by its Governing Council. WALMI is anautonomous institution governed by its own Rules and Regulations.CWALMI came into existence in the year 1980 under the World BankProject of the Irrigation Department. The funds and properties of theSociety and their entire management vests in the Governing Council.The main objects for which the Society has been formed are as under:- “(a)With a view to promoting advancement of science andDacquisition of scientific knowledge to provide instructionsand training in all branches of science both theoretical andapplied and in particular in Water Management and LandDevelopment for Irrigation and agriculture.

(b) To establish an institution for imparting instructions andEtraining and conducting research in Water Management andLand Development for irrigation and agriculture.

(c) To prescribe courses for instruction and training in WaterManagement and Land Development for irrigation andagriculture and hold examinations and grant certificates,Fdiplomas etc.

(d) To seek affiliation of the said institute with Universities andother appropriate academic bodies both in India and abroadand to obtain recognition of the said courses conducted atthe said institute and for the said examinations conductedGby the Institute and diplomas, certificates, etc., granted bythe Institute.

(e) To provide consultancy service to the Government LocalBodies and other organisations in water management andland development for irrigation and agriculture.H

(f) To undertake research and conduct experiments in variousaspects of water management and land development aridto collaborate with other similar organisations for researchand development.

(g) To send within the country and abroad for specialisedtraining in Water Management and Land Development forirrigation and agriculture person including members of staffof the said Institute and bear and pay the costs of suchtraining.

(h) To start, conduct, print, publish and exhibit any magazines,periodicals, newspapers, books, pamphlets or posters thatmay be considered desirable for the promotion of the objectsof the Society.

(i) To invest and deal with the funds of the Society.

(j) To make rules and bye-laws for the conduct of the affairsof the society and Institute and from time to time add, toamend, vary or rescind them.

(k) Make donations to such persons or institutions whether ofcash or any other assets, as may be, that are directly orindirectly conducive to any of the Society’s objects, orotherwise expedient and in particular, to remunerate anyperson or corporations introducing, or assisting the Society.

(l) establish and support or aid the establishment of, and supportassociations, institutions, societies, funds, trusts andconveniences for the benefit of the employees of ex-employees or persons having connections of such personand in particular friendly or other benefit of societies and togrant pension, allowances, gratuities, either by way of annualpayments, or by way of lump sum and to make paymentstowards insurance to form and contribute to provident andbenefit funds to or for such persons.

(m) Generally to do and execute all such other acts, mattersand things as are incidental or conductive to or necessaryfor attainment of the above objects or any of them.”

2.1 The Governing Council in its meeting held on 11.08.1980 framedthe WALMI Establishment Rules, 1980, which provided the service A

B

C

D

E

F

G

H

Aconditions including certain allowances to be paid to its employees. Itwas provided in the said Rules that the Service Rules made by theGovernment of Maharashtra for its employees (as may be amended/modified from time to time) shall apply to the employees of the Instituteunless they are repugnant to the Rules made or may be made by theInstitute. It is specifically provided that Government Rules for Pension,BProvident Fund and Gratuity shall not, however, apply. The GoverningCouncil in its 41[st] meeting held on 31.01.1995 reiterated that the GoverningCouncil has made the Establishment / Service Rules of the Governmentof Maharashtra applicable to WALMI except the Rules for Pension,Provident Fund and Gratuity. It was also mentioned that the ContributoryCProvident Fund Rules framed by WALMI have been made applicable.Grant of pensionary benefits to the employees of the Grant-in-aidInstitutes/Corporation etc. came to be discussed in the meeting of theCabinet Ministers held on 30.01.1997. After due deliberation, the Cabinetapproved the proposal to the effect that no pensionary benefits shouldbe granted to the employees working in the Institute receiving Grant-in-Daid, Corporations etc.

2.2 But thereafter, the Governing Council of WALMI in its 44[th]meeting held on 13.08.1997 resolved to send proposal to the Governmentto grant pensionary benefits to the employees of WALMI. The thenDirector General of WALMI issued a communication dated 12.10.2000Eto the Secretary, Irrigation Department and gave his opinion in affirmativefor grant of pensionary benefits to the employees of WALMI. But theGovernment of Maharashtra through its Finance Department issued aresolution dated 31.10.2005 and introduced a new Contributory PensionScheme for the Government servants who are recruited on or afterF01.11.2005 in the State Government service. On 08.11.2005, the StateGovernment through its Finance Department issued another resolutionand resolved that the employees serving in Grant-in-aid Institutes,Mandals, Corporations etc. are not entitled for grant of pensionary benefitsand the Pension Rules shall not be made applicable to them.

G2.3 Again, the Director General of WALMI issued a communicationdated 06.02.2008 to the Secretary, Irrigation Department and prayed forgrant of pensionary benefits to the employees of WALMI. Bycommunication dated 12.07.2012, the Finance Department of the StateGovernment again reiterated that the employees of WALMI are notentitled for pensionary benefits and the Contributory Provident FundHshall not be applicable to them.

2.4 Hence some of the employees of WALMI filed a Writ PetitionNo.1507 of 2012 before the High Court of Judicature at Bombay,Aurangabad Bench. The High Court directed the State to take a decisionon the proposal dated 06.02.2008 within a period of six months. Videcommunication dated 05.03.2013, the State Government informed thatthe request for grant of pensionary benefits to the employees of WALMIhas been rejected.

2.5 Feeling aggrieved and dissatisfied with the communicationdated 05.03.2013, rejecting the proposal/request for grant of pensionarybenefits to the employees of WALMI, the employees/ex-employees ofWALMI preferred the present writ petitions before the High Court andprayed to direct the State Government to grant pensionary benefits, whichare available to the State Government employees, also to the employeesof WALMI.

2.6 That by the impugned common judgment and order, the HighCourt has allowed the writ petitions and has quashed and set aside thecommunication dated 05.03.2013 of the State Government refusing toextend the pensionary benefits to the employees of WALMI andconsequently has directed to extend pensionary benefits to the employeesof WALMI, with arrears w.e.f. 06.05.2013. While allowing the writpetitions, the High Court has observed that the amount available withWALMI and deposited with E.P.F. towards the employee’s contributionitself is sufficient to meet the financial liability of the pensionary benefitsto employees and that there does not appear to be any reasonable basisfor the State Government to refuse to extend the benefit of pension tothe retired employees of WALMI. The High Court has also furtherobserved that as the WALMI institute essentially performs educationaland research activities and receives 100% grant from the StateGovernment, that the service conditions of employees are regulated byMaharashtra Civil Services Rules and that the employees have beenfrom time to time extended the benefits of wage, pay scale revision onpar with the Government employees. That the employees are being paidout of the Consolidated Fund of the State Government and hence thereis no justification to treat the employees of the WALMI differently thanthat of the State Government employees. Observing so, the High Courthas observed and held that the denial of pensionary benefits to theemployees of WALMI would be discriminatory and violative of theprinciple of equality guaranteed under Article 14 of the Constitution ofIndia.

A

B

C

D

E

F

G

H

A2.7 Feeling aggrieved and dissatisfied with the impugned commonjudgment and order passed by the High Court directing the State toextend the pensionary benefits to the employees of the WALMI, theState of Maharashtra through the Secretary, Irrigation Department andFinance Department have preferred the present appeals.B3. Shri Tushar Mehta, learned Solicitor General assisted by ShriSachin Patil has appeared on behalf of the appellants and Shri J.N. Singh,learned counsel has appeared on behalf of the respondents - originalwrit petitioners.

A

4. Shri Tushar Mehta, learned Solicitor General appearing onCbehalf of the State of Maharashtra has vehemently submitted that in thefacts and circumstances of the case, the High Court has committed agrave error in quashing and setting aside the conscious decision takenby the State Government not to extend the pensionary benefits to theemployees of WALMI. It is submitted that the High Court has failed toappreciate that the WALMI is an autonomous body and a SocietyDregistered under the provisions of the Societies Registration Act, 1860and is an independent entity governed by its own Rules and Regulations.It was therefore submitted that the employees of WALMI cannot be putto par with the State Government employees.

4.1 It was further submitted that under the Service Rules applicableEto the employees of WALMI, as such, there is no provision for pension/pensionary benefits. It was submitted that under the Rules and as perthe decision taken by the Governing Council, only Gratuity Rules applicableto the State Government employees are made applicable.

4.2 It was further submitted by Shri Mehta, learned Solicitor GeneralFappearing on behalf of the State that as such when a conscious decisionhad been taken by the State Government after due deliberations, it canbe said to be a policy decision and it was decided that the Pension Rulesapplicable to the State Government employees shall not be madeapplicable to the employees of WALMI and therefore they are not entitledGto the pensionary benefits, the High Court ought not to have interferedwith such a policy decision in exercise of powers under Article 226 ofthe Constitution of India.

4.3 It is further submitted by Shri Mehta, learned Solicitor Generalthat WALMI is an independent autonomous body, a Society registeredunder the Societies Registration Act and the administration andH

management vest with its Governing Council. It was submitted that theemployees of WALMI are governed by its own Service Rules, whichspecifically prohibits the pensionary benefits to its employees and onlyGratuity Rules are made applicable and, therefore, the employees of theWALMI cannot be put at par with the Government employees.

4.4 It is submitted that even otherwise, whether to grant and/orextend the pensionary benefits to the employees of the WALMI, whichis an autonomous body, is a policy decision, which was not required to beinterfered with by the High Court in exercise of powers under Article226 of the Constitution of India. It is submitted that to interfere withsuch a policy decision would not be permissible while exercising powersunder Article 226 of the Constitution of India. Heavy reliance was placedupon a decision of this Court in the case of T.M. Sampath and Ors.Vs. Secretary, Ministry of Water Resources and Ors., (2015) 5SCC 333. It was submitted that the above was a case with respect tothe employees of National Water Development Agency (NWDA), whichwas also established as a Society and which was an autonomous body.The employees of the NWDA claimed pensionary benefits on par withthe Central Government employees claiming parity between them. ThisCourt observed and held that the principle of parity shall be inapplicableto employees of NWDA since NWDA cannot be treated as aninstrumentality of the State under Article 12 of the Constitution of Indiamerely on the basis that its funds are granted by the Central Government.It was submitted that a claim for equality can be made when there isdiscrimination by the State between two similarly situated persons. Itwas further observed that discrimination cannot be invoked in caseswhere discrimination sought to be shown is between acts of two differentauthorities functioning as State under Article 12 of the Constitution.

4.5 Relying upon the decision of this Court in the case of State ofKerala and Anr. Vs. Naveena Prabhu and Ors., (2009) 3 SCC649, it was submitted by Shri Mehta, learned Solicitor General that infinancial matters Court would abstain from issuing directions havingfinancial implications. It was submitted that the Court would not generallyinterfere with a Government’s policy decision.

4.6 It was further urged that in the present case, the High Courthas not at all considered the financial implications on extending thepensionary benefits to the employees of WALMI. It is submitted thatthe High Court has not at all considered and appreciated the additional A

BC

D

E

F

G

H

Afinancial burden, which will be recurring, if the pensionary benefits areextended to the employees of the WALMI.

4.7 It was submitted by Shri Tushar Mehta, learned SolicitorGeneral of India that as held by this Court in a catena of decisions,whether to grant a particular service benefit like pension etc. should beBleft to the employer as it will have a financial implication. Reliance wasplaced on the decisions of this Court in the cases of Secretary, FinanceDepartment and others Vs. West Bengal Registration ServiceAssociation and others, 1993 Supp (1) SCC 153; State of Biharand others Vs. Bihar Secondary Teachers Struggle Committee,Munger and others, (2019) 18 SCC 301; and Punjab StateCCooperative Milk Producers Federation Limited and another Vs.Balbir Kumar Walia and others, (2021) 8 SCC 784.

4.8 Thus, making the above submissions and relying upon the abovedecisions, it was prayed to allow the present appeal.

D5. Learned counsel appearing on behalf of the respondents –original writ petitioners while opposing the present appeals vehementlysubmitted that in the facts and circumstances of the case, the High Courts,after having been satisfied that there was no valid justification not toextend the pensionary benefits to the employees of WALMI has rightlydirected the State to extend the pensionary benefits to the employees ofEWALMI.

D

5.1 It was submitted that WALMI, right from its inception is beingpaid funds from the Irrigation Department and WALMI receives Grant-in-aid from the Government. It was submitted that the object and purposeof WALMI is to impart training/education. Further that even the staffFwas allocated by the Irrigation Department of the State. It was furthersubmitted that even the posts, which are allotted to WALMI are includedin the 45,297 posts available and sanctioned for the Irrigation Department.That the posts meant for WALMI are posts on establishment of WaterResources Department of Government of Maharashtra and, thus,GWALMI can be said to be a part of establishment of Water ResourcesDepartment for all purposes and, therefore, the employees of the WALMIcannot be treated differently and cannot be extended a differentialtreatment in the matter of payment of pensionary benefits. It was urgedthat the High Court has rightly observed that denial of pensionary benefitsto the employees of WALMI is clearly discriminatory and violative ofHArticle 14 of the Constitution of India.

5.2 It was further submitted that the High Court has rightly observedthat as the WALMI has sufficient funds to meet the financial burden ofpensionary benefits, therefore, there is no justification to deny thepensionary benefits to the employees of WALMI, more particularly, whenWALMI is a Grant-in-aid Institute and is fully funded by the StateGovernment. It was contended that apart from the fact that WALMIreceives 100% grant from the State Government, the Service Conditionsof its employees are regulated by the Maharashtra Civil Services Rulesand even the employees of WALMI have been from time to time extendedthe benefits of wage, pay-scale revision, on par with the State Governmentemployees including the fixation of time bound pay scale and even theemployees are being paid out of the Consolidated Fund of the StateGovernment and, therefore, there is no justification at all to extend thedifferential treatment by the State Government to the employees ofWALMI by denying pensionary benefits to the employees of WALMI.

AB

C

5.3 Making the above submissions and relying upon the decisionsof this Court in the cases of Purshottam Lal and Ors. Vs. Union ofIndia and Anr., (1973) 1 SCC 651 and Haryana State MinorIrrigation Tubewells Corporation and Ors. Vs. G.S. Uppal andOrs., (2008) 7 SCC 375, it was prayed to dismiss the present appeals.

D

6. We have thus heard the learned counsel for the respectiveparties at length.

E

7. The short question, which is posed for consideration of thisCourt is “whether the employees of the WALMI are entitled to thepensionary benefits on par with the State Government employees?”

8. By the impugned common judgment and order, the High Courthas directed the State to extend the retirement benefits to the employeesof WALMI mainly on the following grounds:- F

(i) that the primary functions of WALMI are educational, thepurpose of establishing the Institute is to impart training toengineers and farmers of Maharashtra State and to provideexpert advice to the Water Resources Department,GGovernment of Maharashtra relating irrigation management;

(ii) that the Institute receives 100% grant from the Governmentsince 1993;

(iii) that the posts created on the establishment are computedamongst the sanctioned posts of the Water Resources H

142SUPREME COURT REPORTS

Department; the control in respect of the management andthe governance rest with high-ranking officers, i.e.,Secretaries of the Government Department; A

(iv) the Regulations applicable to the Government employeesrelating to disciplinary matters as well as withdrawal ofallowances like medical allowance, leave travel allowance,regulations relating to grant of leave so also regulationsrelating to disciplinary matters are uniform as in case ofGovernment employees; B

(v) the Maharashtra Civil Services Rules are applicable to theGovernment employees; C

(vi) that the employees of WALMI have been extended thebenefit of time bound promotional scale as in case ofGovernment employees;

(vii) that the employees of WALMI have also received theDbenefit of wage, pay scale revision made applicable to theGovernment employees;

(viii) that for all practicable purposes, the employees of WALMIare treated on par with the Government employees; thesalary and allowances payable to the employees of WALMIare being paid out of the Consolidated Fund of the State;and E

(ix) the amount available with WALMI and deposited with E.P.F.towards the employee’s contribution itself is sufficient tomeet the financial liability of the pensionary benefits toFemployees.

8.1On the aforesaid grounds, the High Court has ultimatelyobserved and held that there does not appear to be any reasonable basisfor the State to refuse to extend the benefit of pension to the retiredemployees of WALMI.

9. Having heard the learned counsel appearing for the respectiveparties, we are of the opinion that none of the aforesaid grounds justifyextension of the pensionary benefits to the employees of WALMI.

G

9.1 WALMI is an independent autonomous body and a Societyregistered under the Societies Registration Act, 1860. The administrationHand management of the WALMI is through its Governing Council. That

WALMI has its own Rules, namely, WALMI Establishment Rules, 1980,governing the service conditions and the benefits available to theemployees of WALMI. The WALMI Establishment Rules, 1980 providefor the benefits of travelling allowance, daily allowance, medicalreimbursement, house rent allowance etc. but however, do not providefor pension, provident fund. Thereafter the Governing Council of WALMIhas adopted the Maharashtra Civil Services Rules except Pension Rules.Thus, from the above, it can be seen that WALMI is an independentautonomous entity governed by their own Rules and Regulations and theadministration and management of WALMI is being run through/by itsGoverning Council. Even the State is not the Disciplinary Authority ofthe employees of WALMI. That in the G.R. dated 17.03.2006, it is statedthat in WALMI 170 posts are created on temporary establishment.However, it may be true that posts created in the WALMI are includedin the total sanctioned number of posts in the Water ResourcesDepartment. However, in the said G.R. it is specifically observed thatWALMI is an autonomous institution of the Government and 214 postsare sanctioned on fixed temporary establishment and 168 posts onconverted temporary establishment. It further provides that as the postsare person-wise on the converted temporary establishment, the postsshall be abolished automatically, if the person retires or resigns or becomesvacant in any other way. It further provides that WALMI is an autonomousinstitution, the staff of it cannot be transferred anywhere.

9.2 It is required to be noted that as such the Government videG.R. dated 08.11.2005 specifically took a policy decision that theemployees of aided institutes, boards, corporations, who are not governedby Maharashtra Civil Services (Pension) Rules, 1982, shall not be madeapplicable to such institutions. Even the proposal made by the thenDirector of WALMI to extend the pensionary benefits to the employeesof WALMI came to be rejected by the State Government. Neither theG.R. dated 08.11.2005 nor the decision of the State Government refusingto extend the pensionary benefits to the employees of WALMI arechallenged.

10. In view of the above factual scenario, the question posed is:

“whether the employees of WALMI, which is an independentautonomous entity registered under the Societies Registration Act,are entitled to the pensionary benefits on par with the StateGovernment employees?”

AB

C

DE

F

G

H

10.1 While answering the aforesaid question, few decisions ofthis Court on the inference of the Courts in the policy decision havingfinancial implications and whether the employees of the board/societies,who are autonomous bodies can claim parity in the pay-scale and/orother benefits which may be available to the Government employees,are required to be considered.

A

B

10.2 In the case of T.M. Sampath and Ors. Vs. Secretary,Ministry of Water Resources and Ors. (supra), the employees ofNational Water Development Agency (NWDA), an autonomous bodyunder the aegis and control of Ministry of Water Resources claimed thepensionary benefits on par with the Central Government employees.CRefusing to allow such pensionary benefits to the employees of NWDAon par with the Central Government employees, in paragraphs 16 and17, it was observed and held as under:-

“16. On the issue of parity between the employees of NWDAand Central Government employees, even if it is assumed that theD1982 Rules did not exist or were not applicable on the date of theOM i.e. 1-5-1987, the relevant date of parity, the principle of paritycannot be applicable to the employees of NWDA. NWDA cannotbe treated as an instrumentality of the State under Article 12 ofthe Constitution merely on the basis that its funds are granted byEthe Central Government. In Zee Telefilms Ltd. v. Union ofIndia [(2005) 4 SCC 649], it was held by this Court that theautonomous bodies having some nexus with the Government byitself would not bring them within the sweep of the expression“State” and each case must be determined on its own merits.Thus, the plea of the employees of NWDA to be treated on a parFwith their counterparts in the Central Government under sub-rule(6)(iv) of Rule 209 of the General Financial Rules, merely on thebasis of funding is not applicable.

17. Even if it is presumed that NWDA is “State” under Article 12of the Constitution, the appellants have failed to prove that theyare on a par with their counterparts, with whom they claim parity.As held by this Court in UT, Chandigarh v. KrishanBhandari [(1996) 11 SCC 348], the claim to equality can beclaimed when there is discrimination by the State between twopersons who are similarly situated. The said discrimination cannotbe invoked in cases where discrimination sought to be shown is G

H

between acts of two different authorities functioning as State underArticle 12. Thus, the employees of NWDA cannot be said to be“Central Government employees” as stated in the OM for itsapplicability.”

As per the law laid down by this Court in a catena of decisions,the employees of the autonomous bodies cannot claim, as a matter ofright, the same service benefits on par with the Government employees.Merely because such autonomous bodies might have adopted theGovernment Service Rules and/or in the Governing Council there maybe a representative of the Government and/or merely because suchinstitution is funded by the State/Central Government, employees of suchautonomous bodies cannot, as a matter of right, claim parity with theState/Central Government employees. This is more particularly, whenthe employees of such autonomous bodies are governed by their ownService Rules and service conditions. The State Government and theAutonomous Board/Body cannot be put on par.

10.3 In the case of Punjab State Cooperative Milk ProducersFederation Limited and Anr. Vs. Balbir Kumar Walia and Ors.,(2021) 8 SCC 784, in paragraph 32, it is observed as under:- “32. The Central or State Government is empowered to levy taxesto meet out the expenses of the State. It is always a consciousdecision of the Government as to how much taxes have to belevied so as to not cause excessive burden on the citizens. But theBoards and Corporations have to depend on either their ownresources or seek grant from the Central/ State Government, asthe case may be, for their expenditures. Therefore, the grant ofbenefits of higher pay scale to the Central/State Governmentemployees stand on different footing than grant of pay scale byan instrumentality of the State.”

10.4 As per the settled proposition of law, the Court should refrainfrom interfering with the policy decision, which might have a cascadingeffect and having financial implications. Whether to grant certain benefitsto the employees or not should be left to the expert body and undertakingsand the Court cannot interfere lightly. Granting of certain benefits mayresult in a cascading effect having adverse financial consequences.

10.5 In the present case, WALMI being an autonomous body,registered under the Societies Registration Act, the employees of WALMI

A

B

C

D

E

F

G

H

Aare governed by their own Service Rules and conditions, which specificallydo not provide for any pensionary benefits; the Governing Council ofWALMI has adopted the Maharashtra Civil Services Rules except thePension Rules. Therefore, as such a conscious policy decision has beentaken not to adopt the Pension Rules applicable to the State Governmentemployees; that the State Government has taken such a policy decisionBin the year 2005 not to extend the pensionary benefits to the employeesof the aided institutes, boards, corporations etc.; and the proposal of thethen Director of WALMI to extend the pensionary benefits to theemployees of WALMI has been specifically turned down by the StateGovernment. Considering the aforesaid facts and circumstances, theCHigh Court is not justified in directing the State to extend the pensionarybenefits to the employees of WALMI, which is an independentautonomous entity.

10.6 The observations made by the High court that as the salaryand allowances payable to the employees of WALMI are being paid outDof the Consolidated Fund of the State and/or that the WALMI is gettinggrant from the Government are all irrelevant considerations, so far asextending the pensionary benefits to its employees is concerned. WALMIhas to run its administration from its own financial resources. WALMIhas no financial powers of imposing any tax like a State and/or the CentralGovernment and WALMI has to depend upon the grants to be made byEthe State Government.

10.7 Now, so far as the observations made by the High Court thatthe amount available with WALMI and deposited with E.P.F. towardsthe employee’s contribution itself is sufficient to meet the financial liabilityof the pensionary benefits to the employees and, therefore, there is noFjustification and/or reasonable basis for the State Government to refuseto extend the benefit of pension to the retired employees of WALMI isconcerned, it is to be noted that merely because WALMI has a fundwith itself, it cannot be a ground to extend the pensionary benefits. Grantof pensionary benefits is not a one-time payment. Grant of pensionaryGbenefits is a recurring monthly expenditure and there is a continuousliability in future towards the pensionary benefits. Therefore, merelybecause at one point of time, WALMI might have certain funds does notmean that for all times to come, it can bear such burden of paying pensionto all its employees. In any case, it is ultimately for the State Governmentand the Society (WALMI) to take their own policy decision whether toH

extend the pensionary benefits to its employees or not. The interferenceby the Judiciary in such a policy decision having financial implicationsand/or having a cascading effect is not at all warranted and justified.

11. In view of the above discussion and for the reasons stated, theimpugned common judgment and order passed by the High Court directingthe State to extend the pensionary benefits to the employees of WALMIis unsustainable, both in law and on facts. Accordingly, the impugnedcommon judgment and order passed by the High Court deserves to bequashed and set aside and is accordingly quashed and set aside. It isheld that the employees of WALMI, which is an independent autonomousbody registered under the Societies Act are not entitled to the pensionarybenefits.