THE STATE OF BIHAR & ANR. versus DR. SACHINDRA NARAYAN & ORS. on 30 January 2019

[2019] 1 S.C.R. 748

SUPREME COURT REPORTS

[2019] 1 S.C.R.

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THE STATE OF BIHAR & ANR.

v.

DR. SACHINDRA NARAYAN & ORS.

(Civil Appeal No. 884 of 2019)

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JANUARY 30, 2019

[DR. DHANANJAYA Y CHANDRACHUDAND HEMANT GUPTA, JJ.]

Anugraha Narayan Sinha Institute of Social Studies Act,1964:

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ss. 6, 8, 9 and 10 – Payment of Pension – To the employees ofthe Institute incorporated under the Act – Responsibility to pay –Whether on State Government – As per resolution dated 15.02.1985,the Board of the institute implemented retiral benefits which were tobe paid by the Institute from its own resources – Pension was paidDto the employees after the resolution, but was stopped from January2014 – Writ petition seeking direction for payment of pension andarrears thereof – Petition dismissed by High Court holding thatState was not obliged to pay the pension in view of the resolution –In intra-court appeal Division Bench of High Court held that theState was obliged to pay the pension – On appeal, held: TheEresolution of the Board of the Institute to implement the retirementbenefit scheme from its own resources will not bind the StateGovernment to pay the amount of pension – The provision of paymentof pension in the Budget of the State Government was a voluntaryact, and not enforceable by a Writ of Mandamus – Release of grantFis in the discretion of the grantor and cannot be forced by the grantee– Obligation to bear the amount of pension by the State Governmentis not mandated either by s. 8 or s. 9 of the Act – Payment of pensionin the past, will not confer an enforceable right in favour of theInstitute or the employees.

GAdministrative Law:

Legitimate Expectation – Held: Legitimate expectation is oneof the grounds of judicial review, but unless a legal obligation exists,there cannot be legitimate expectation – It is not a wish or a desireor a hope and hence cannot be claimed as a right.

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Allowing the appeal, the Court

HELD: 1. The resolution of the Board of the Institute toimplement a retirement benefit scheme from its own resourceswill not bind the State Government to pay the amount of pensionto the employees of the Institute. The employees of suchInstitute cannot be treated at par with the employees of the StateGovernment nor the State can be burdened with the responsibilityto pay pension to the employees of the Institute. [Para 23][762-E-F]

2. Section 6 of the Anugraha Narayan Sinha Institute ofSocial Studies Act, 1964 empowers the Board to create postsand to hold, control and administer its property and the funds,but the post carrying an emolument of rupees one thousand permonth or more cannot be created without the previous approvalof the State Government. Though the proviso to Section 6(2) ofthe Act requires approval of the State Government in respect ofcreation of post carrying pay of more than Rs.1000/-, but theintention is that any financial expenditure of recurring naturewould require the approval of the State Government. Therefore,if the amount of pension exceeds rupees one thousand per month,the same could not be claimed from the State Government as aright without approval. The State Government cannot be calledupon to bear the burden of the pension as such scheme was notapproved or even sought for. The provision of payment of pensionin the Budget of the State Government is a voluntary act notenforceable by a writ of mandamus. The release of grant is indiscretion of the grantor and cannot be forced by the grantee.[Para 15][758-A-D]

3. It is true that in certain financial years as per documentson record, the amount of pension was specifically mentioned whilegranting grant to the Institute, but such amount is in discretionof the State and cannot be enforced by a writ of mandamus. Thereis no obligation on the State to disburse the grant towards thepension amount in terms of the Act or the Rules or even in termsof the resolution of the Board. [Para 16][758-E-F]

4. Sub-Section (1) of Section 8 of the Act mandates the StateGovernment to contribute a sum of rupees two lacs in eachfinancial year for the maintenance of the Institute, whereas, sub- A

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ASection (2) empowers the State Government to contribute fromtime to time, such additional sums as it may deem fit for specialitems of research or education work, publication, buildings andfor proper maintenance and development of the Institute. Suchpayment for the special projects, is in discretion of the StateGovernment in view of the object for which the grant is to beBdisbursed, but sub-Section (2) does not include disbursement ofthe amount of pension as the contribution is for limited purposewhich is not recurring in nature. [Para 17][758-F-H]

5. The money contributed to the Institute by the StateGovernment is one source of the fund of the Institute. SectionC9(3) of the Act provides that the funds shall be applied towardsmeeting the expenses of the Institute including expensesincurred in exercise of its powers and discharge of its functionsunder the Act. Therefore, the retirement pension scheme, at bestcan be treated to be a part of obligation of utilization of funds ofDthe Institute but such obligation to bear the amount of pensionfund is not on State Government as it is not mandated either bySection 8 or Section 9 of the Act. [Para 18][759-A-B]

6. It is not correct to say that the State Government hasprovided funds for payment of pension for the last many years,Etherefore, the Institute and the employees of the Institute havelegitimate expectation to receive the amount of pension. A pioushope even leading to moral obligation cannot amount to alegitimate expectation. The legitimacy of an expectation can beinferred only if it is founded on the sanction of law or custom oran established procedure followed in regular and naturalFsequence. [Paras 19, 20][759-C-D]

Union of India & Ors. v. Hindustan DevelopmentCorporation & Ors. (1993) 3 SCC 499 : [1993] 3 SCR128; Ram Pravesh Singh and Others v. State of Biharand Others (2006) 8 SCC 381 : [2006] 6 Suppl. SCRG512 – relied on.

Case Law Reference

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 884 of2019.

From the Judgment and Order dated 13.03.2018 of the HighCourt of Judicature at Patna in LPA No. 1018 of 2017.

Ms. Meenakshi Arora, V.N. Sinha, Sr. Advs., Ms. Abha R. Sharma,D.S. Pramar, Ms. Sujeeta Srivastava, Saurabh Shandilya,A. Lakshminarayanan, Kripa Shankar Prasad, Ms. J. Priyadarshini, Advs.for the appearing parties.

The Judgment of the Court was delivered by HEMANT GUPTA, J. 1. The present appeal is directed againstan order passed by the Division Bench of the High Court of Judicatureat Patna on 13.03.2018 whereby the Writ Petition was allowed directingthe appellant to provide financial assistance for payment of the arrearsas well as current pension to the employees of the Anugraha NarayanSinha Institute of Social Studies, Patna (Institute).

2. The Institute is incorporated by the Anugraha Narayan SinhaInstitute of Social Studies Act, 1964, (Act). The Institute has a perpetualsuccession and a common seal. The Chairman of the Board of Controlis a nominee of the State Government. The State Government is also tonominate two persons of eminence in consultation with the Chairman;whereas, the others are ex-officio members such as Vice-Chancellor ofPatna University, another Vice-Chancellor to be nominated by the StateGovernment other than that of Patna University in rotation in alphabeticalorder as per names of Universities; two representatives of the IndianCouncil of Social Science Research, New Delhi; one representative ofthe University Grants Commission; one faculty member not below therank of a Professor and a Secretary to the State Government in theDepartment of Education and in the Department of Finance.

3. In terms of Section 6 of the Act, the Board is the supremegoverning body of the Institute and is to exercise all the powers of theInstitute. Section 8 mandates the State Government to contribute a sumof rupees two lacs in each financial year for the maintenance of theInstitute and such other sums as it may deem fit for special items ofresearch or education work, publication, buildings and proper maintenanceand development of the Institute. Section 9 of the Act provides forestablishment of Institute Fund, whereas, Section 10 deals with the budget A

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Aof the Institute. Section 16 of the Act empowers the Board to makerules not inconsistent with the provisions of the Act, whereas, Section 17empowers the Board to make regulations consistent with the Act andthe Rules framed thereunder. The relevant provisions of the Act readas under:

B“6. Functions of the Board. – (1) The Board shall be thesupreme governing body of the Institute and shall exercise all thepowers of the Institute.

(2) Subject to the provisions of this Act the Board shall, in particular-(a) hold, control and administer the property and the funds of theCInstitute; (b) determine the form, provide for the custody and regulate theuse of the common seal of the Institute;

(c) determine and regulate all matter concerning the Institute; D(d) administer any funds placed at the disposal of the Board forspecific purposes; (e) create posts and appoint officers and other employees of theInstitute and define their duties and provide for the filling oftemporary vacancies:

EProvided that no post the total emolument of which exceeds Rs.1,000 per month shall be created without the previous sanction ofthe State Government; (f) have power to accept transfers on behalf of the Institute ofany movable or immovable property to and for the purposes ofFthe Institute.

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8. Payment to Institute. - (1) The State Government shallcontribute to the institute a sum of two lakhs of rupees in eachfinancial year for the maintenance of the institute.

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(2) The State Government may contribute from time to time suchadditional sums to the Institute as it may deem fit for special itemsof research or educational work, publication, buildings and for theproper maintenance and development of the Institute.

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9. The Institute Fund. - (1) There shall be established a Fundto be called the Anugraha Narayan Sinha Institute Fund whichshall be vested in the Institute to which shall be credited- (a) the balance, if any, standing to the credit of the AnugrahaNarayan Sinha Institute of Social Studies, Patna, on the date ofcommencement of this Act; (b) all moneys contributed to the Institute by the State Government;

(c) all moneys received by or on behalf of the Institute from theCentral Government; (d) all moneys received by or on behalf of the Institute by way ofgrants, gifts, donations, benefactions, bequests or transfers; (e) all interests and profits arising from any transaction inconnection with any money belonging to the Institute; (f) proceeds from the sale of the journals, pamphlets and books;and (g) all moneys received by the Institute in any other manner orfrom any other source.

(2) All moneys credited to the Fund shall be deposited or investedin such manner as the Institute may, with the approval of theState Government, decide.

(3) The Fund shall be applied towards meeting the expenses ofthe Institute including expenses incurred in the exercise of itspowers and discharge of its functions under this Act.

10. Budget. - (1) The Director shall, on or before the tenth dayof August each year, cause to be prepared and laid before theBoard, in such form as may be prescribed by the Board, the budgetestimate of the income and expenditure of the Institute for thenext financial year.

(2) The Board shall, as soon as may be after the tenth day ofAugust but not later than the first day of the following September,examine and approve the estimate with or without modificationas it may deem fit and shall forthwith submit a copy thereof to theState Government.

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A(3) The Board may from time to time during the financial yearreduce the amount of any item of budget grant or transfer suchamount or a portion thereof to any other item of budget grant:

Provided that the Board shall have no power to transfer any non-recurring grant for recurring expenditure:

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[Provided further that the Board shall have no power to transferfrom one item to another item an amount exceeding 20 per centof the original grant under any item.]

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C12. Accounts and audit. - (1) Subject to any rules made by theState Government in this behalf, the accounts of receipts andexpenditure of the Institute shall be kept in such manner and insuch form as the Board may from time to time prescribe.

(2) The Board shall, as soon as may be after closing its annualDaccounts, prepare an annual statement of accounts in such formas the State Government may from time to time prescribe andforward the same to the Accountant-General, Bihar, by such dateas the State Government may, in consultation with the Accountant-General, Bihar, determine.

(3) The accounts of the Institute shall be audited by the Accountant-EGeneral, Bihar, or some other officer appointed by him in thisbehalf and the Board shall take suitable action on the mattersarising out of the audit report.

(3A) The State Government may call upon the Institute to adoptconcurrent audit by the Chief Controller of Accounts and Audit ofFthe State Government.

(4) The Board shall forward the annual accounts of the Institutetogether with the audit report thereon to the State Governmentand the State Government shall cause the same to be laid beforethe Legislature of the State.”

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4. In terms of Section 16 of the Act, the Anugraha Narayan SinhaInstitute of Social Studies, Rules 1966 (Rules) were framed by the Board.“Pay” is defined in Rule 2(xii), whereas Rule 9 provides for maintenance H

of Institute’s provident fund and Rule 19 provides for amendment of theRules at any time by 2/3 majority of the members at the meeting of theBoard.

5. In terms of Section 17 of the Act, the Anugraha Narayan SinhaInstitute of Social Studies, Patna Regulation, 1966 (Regulations) havebeen framed, which inter-alia empowers the Board to sanction DearnessAllowance; House Rent Allowance and also the service conditions ofthe employees of the Institute. Regulation 9 empowers the Board tocreate such posts as may be necessary and may fix scale of pay andallowances for posts subject to Section 6 of the Act. In terms of Clause16 of the Regulations, Staff Service Condition Rules have been framed,however, such Rules do not provide for payment of pension.

6. The Board in its meeting held on 15.02.1985 passed thefollowing resolution:

“The Board accepted the recommendation of the Committee onRetirement Benefits dated 11.2.85 and decided that the schemeas prepared may be implemented, provided that the scheme asreported would be operated from Institute resources and that noseparate grant would be sought for it from theGovernment…………. “

7. In this factual background, 27 petitioners (respondents 1 to 27herein), in the present appeal invoked the writ jurisdiction of the HighCourt for a direction to the respondents (appellants herein) to pay thearrears as well as current pension on the month to month basis whichhas been stopped from the month of January 2014. The Writ Petitionwas dismissed on 20.06.2017 holding that the resolution of the Boarddated 15.02.1985 was inconsistent with the Act and Rules, therefore,the writ petitioners were not vested with any legal right. Correspondingly,there is no legal obligation on the State to pay and that a writ of mandamuscannot be issued to the authority of the State to act contrary to law. Itwas also held that, the payment of pension/family pension by the Statefor the last few years is an illegality, the same cannot be directed to beperpetuated by an order of the Court.

8. However, an intra Court appeal was allowed on 13.03.2018noticing that the Government of Bihar has earmarked grants under thepension head during 2004-05 to 2010-11. It was held that though therecommendations of the Committee on retirement benefits may be A

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Aimplemented, provided that the scheme is operated from the Institute’sresources, but the fact remains that the liability on account of pensionwas duly mentioned in the annual budget of the State Government,therefore, such release of the funds by the State Government will be inthe nature of grant as envisaged under Section 9(g) of the Act. TheState Government would be estopped from saying that it never consideredBpayment of pension as a responsibility after about 30 years. TheGovernment approved the budget and provided additional funds to meetthe liabilities, therefore, it would amount to consideration and acceptanceof responsibility, may be in form of grants only.

9. Learned Counsel for the appellant argued that the resolution ofCBoard was that the Retirement Benefit Scheme was to be operatedfrom the resources of the Institute and that “no separate grant would besought for it from the State Government”. Therefore, the financial burdenof the Retirement Benefit Scheme cannot be foisted upon the State.The pension was resolved to be borne by the Institute from its ownDfunds. Still further, such resolution of the Board was not approved by theState Government creating extra financial liability on the State.

10. It is argued that in terms of Section 8 of the Act, the StateGovernment is to contribute a sum of rupees two lacs in each financialyear or such other sums for research or education work, publication,Ebuildings and for proper maintenance and development of the Institute.Such provision does not contemplate payment of recurring expenditureof pension which is not contemplated by Section 8 of the Act. Themoney contributed by the State Government is one source of the Institutefunds. The Board has limited power to transfer funds from one item toanother item exceeding 20 per cent of the original grant under any item.FThe accounts of the Institute are required to be audited. Thus, it iscontended that though the officers of the State are members of theBoard and that such fact will make the Institute a “State” within themeaning of Article 12 of the Constitution. But that fact will not make theInstitute as extension of the State Government, as the Institute is aGcreation of a separate juristic entity under the State Statute. The rulesframed in terms of Section 16 of the Act again do not provide for ProvidentFund/Gratuity and for pension. It is argued that the Board as anindependent juristic entity is empowered to prepare its budget but interms of the resolution of the Board, financial burden of the pensionscheme cannot be passed on to the State Government.H

11. It is further pointed out that the State Government has disbursedgrant from the year 2002-03 uptill 2010-11 which included the break upof pension but it was a mistake, which was rectified from the year 2011-12. It is contended that the State Government can grant funds under theheads (1) Grant-in-aid for Salary, (2) Grant-in-aid for creation ofinfrastructure, (3) Grant-in-aid other than salary and infrastructure.Therefore, some amount released towards pension in certain yearsincluding in terms of an order of this Court will not create any right infavour of the writ petitioners as the role of the State Government is togive grants as provided in Section 6 of the Act but such grant cannot beclaimed as matter of right.

12. On the other hand, the learned counsel for the Institute-respondent No. 28, submitted that the State Government has been releasingGrant-in-aid including amount towards pension since the Board haspassed the resolution in the year 1985. Reference was made tocommunications dated 09.09.2010 and 29.03.2005. It is also pointed outthat the Chief Minister of the State Government presided over the meetingof the Board on 28.05.1985, wherein, the poor financial condition of theInstitute was discussed. It was resolved that the three alternative schemesof retirement benefits, i.e. (i) Contributory Provident Fund; (ii)Contributory Provident Fund-cum- Gratuity; (iii) General Provident Fund-cum-Pension-cum-Gratuity including benefit of commutation of pensionwill at all times be the same as provided for in the statutes and Rules ofPatna University from time to time.

13. It is contended that contribution towards the amount of pensionhas created legitimate expectation of the employees of the Institute thatthey are entitled to pension at par with the employees of Patna University.Thus, the employees have legitimate expectations of receipt of pensionfrom the State Government. Therefore, the order passed by the DivisionBench of the High Court does not call for any interference.

14. On the other hand, Mr. V. N. Sinha, learned senior counselappearing for the respondent Nos. 1 to 27 submitted that the StateGovernment is bound to disburse the amount necessary for payment ofpension as was being done from the date when the resolution was passedin the year 1985. Therefore, it is too late for the State to turn around totake a plea that the responsibility of the pension amount is not of theState Government.

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SUPREME COURT REPORTS

A15. Section 6 of the Act empowers the Board to hold control andadminister the property and the funds of the Institute. The Board isfurther empowered to create posts and appoint officers with a conditionthat a post of which emoluments exceed rupees one thousand per monthshall not be created without the previous sanction of the StateGovernment. Therefore, the Board has freedom to create posts and toBhold, control and administer its property and the funds, but the post carryingan emolument of rupees one thousand per month or more cannot becreated without the previous approval of the State Government. Thoughthe proviso to Section 6(2) of the Act requires approval of the StateGovernment in respect of creation of post carrying pay of more thanCRs.1000/-, but the intention is that any financial expenditure of recurringnature would require the approval of the State Government. Therefore,if the amount of pension exceeds rupees one thousand per month, thesame could not be claimed from the State Government as a right withoutapproval. The State Government cannot be called upon to bear the burdenof the pension as such scheme was not approved or even sought for.DThe provision of payment of pension in the Budget of the StateGovernment is a voluntary act not enforceable by a writ of mandamus.The release of grant is in discretion of the grantor and cannot be forcedby the grantee.

16. It is true that in certain financial years as per documents onErecord, the amount of pension was specifically mentioned while grantinggrant to the Institute, but such amount is in discretion of the State andcannot be enforced by a writ of mandamus. There is no obligation onthe State to disburse the grant towards the pension amount in terms ofthe Act or the Rules or even in terms of the resolution of the Board.F

17. Sub-Section (1) of Section 8 of the Act mandates the StateGovernment to contribute a sum of rupees two lacs in each financialyear for the maintenance of the Institute, whereas, sub-Section (2)empowers the State Government to contribute from time to time, suchadditional sums as it may deem fit for special items of research orGeducation work, publication, buildings and for proper maintenance anddevelopment of the Institute. Such payment for the special projects, isin discretion of the State Government in view of the object for which thegrant is to be disbursed, but sub-Section (2) does not include disbursementof the amount of pension as the contribution is for limited purpose whichis not recurring in nature.H

18. The money contributed to the Institute by the State Governmentis one source of the fund of the Institute fund. Section 9(3) of the Actprovides that the funds shall be applied towards meeting the expenses ofthe Institute including expenses incurred in exercise of its powers anddischarge of its functions under the Act. Therefore, the retirementpension scheme, at best can be treated to be a part of obligation ofutilization of funds of the Institute but such obligation to bear the amountof pension fund is not on State Government as it is not mandated eitherby Section 8 or Section 9 of the Act.

19. The argument of learned counsel for the Institute is that theState Government has provided funds for payment of pension for thelast many years, therefore, the Institute and the employees of the Institutehave legitimate expectations to receive the amount of pension, is againnot tenable.

20. In the judgment reported as Union of India & Ors. v.Hindustan Development Corporation & Ors.[1], it was held that a pioushope even leading to moral obligation cannot amount to a legitimateexpectation. The legitimacy of an expectation can be inferred only if itis founded on the sanction of law or custom or an established procedurefollowed in regular and natural sequence. It was held: - “28. Time is a three-fold present: the present as we experience it,the past as a present memory and future as a present expectation.For legal purposes, the expectation cannot be the same asanticipation. It is different from a wish, a desire or a hope nor canit amount to a claim or demand on the ground of a right. Howeverearnest and sincere a wish, a desire or a hope may be and howeverconfidently one may look to them to be fulfilled, they by themselvescannot amount to an assertable expectation and a meredisappointment does not attract legal consequences. A pious hopeeven leading to a moral obligation cannot amount to a legitimateexpectation. The legitimacy of an expectation can be inferredonly if it is founded on the sanction of law or custom or anestablished procedure followed in regular and natural sequence.Again it is distinguishable from a genuine expectation. Suchexpectation should be justifiably legitimate and protectable. Everysuch legitimate expectation does not by itself fructify into a rightand therefore it does not amount to a right in the conventionalsense.

1 (1993) 3 SCC 499

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33. On examination of some of these important decisions it isgenerally agreed that legitimate expectation gives the applicantsufficient locus standi for judicial review and that the doctrine oflegitimate expectation is to be confined mostly to right of a fairhearing before a decision which results in negativing a promise orwithdrawing an undertaking is taken. The doctrine does not givescope to claim relief straightaway from the administrativeauthorities as no crystallised right as such is involved. Theprotection of such legitimate expectation does not require thefulfilment of the expectation where an overriding public interestrequires otherwise. In other words where a person’s legitimateexpectation is not fulfilled by taking a particular decision thendecision-maker should justify the denial of such expectation byshowing some overriding public interest. Therefore even ifsubstantive protection of such expectation is contemplated thatdoes not grant an absolute right to a particular person. It simplyensures the circumstances in which that expectation may be deniedor restricted. A case of legitimate expectation would arise when abody by representation or by past practice aroused expectationwhich it would be within its powers to fulfil. The protection islimited to that extent and a judicial review can be within thoselimits. But as discussed above a person who bases his claim onthe doctrine of legitimate expectation, in the first instance, mustsatisfy that there is a foundation and thus has locus standi to makesuch a claim. In considering the same several factors which giverise to such legitimate expectation must be present. The decisiontaken by the authority must be found to be arbitrary, unreasonableand not taken in public interest. If it is a question of policy, evenby way of change of old policy, the courts cannot interfere with adecision…..

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35….It can therefore be seen that legitimate expectation can atthe most be one of the grounds which may give rise to judicialreview but the granting of relief is very much limited. It wouldthus appear that there are stronger reasons as to why the legitimateexpectation should not be substantively protected than the reasonsas to why it should be protected. In other words such a legal obligation exists whenever the case supporting the same in termsof legal principles of different sorts, is stronger than the caseagainst it. As observed in Attorney General for New South Walescase: “To strike down the exercise of administrative power solelyon the ground of avoiding the disappointment of the legitimateexpectations of an individual would be to set the courts adrift on afeatureless sea of pragmatism. Moreover, the notion of a legitimateexpectation (falling short of a legal right) is too nebulous to form abasis for invalidating the exercise of a power when its exerciseotherwise accords with law.” If a denial of legitimate expectationin a given case amounts to denial of right guaranteed or is arbitrary,discriminatory, unfair or biased, gross abuse of power or violationof principles of natural justice, the same can be questioned on thewell-known grounds attracting Article 14 but a claim based onmere legitimate expectation without anything more cannot ipsofacto give a right to invoke these principles. It can be one of thegrounds to consider but the court must lift the veil and see whetherthe decision is violative of these principles warrantinginterference…..”

21. In a judgment reported as Ram Pravesh Singh and Othersv. State of Bihar and Others[2], the Court was examining the decision ofthe State Government that the assets and the liabilities of a Society shouldbe transferred to the State Electricity Board, but not the services of theemployees to the Board. It was the said decision of the State whichcame up for consideration before this Court. It was held that the Boardnever agreed nor decided to take services of any of the employees ofthe Society. Therefore, it cannot be said that there was any regularity orpredictability or certainty in action which can lead to a legitimateexpectation. It was held:- “22. The Board had never agreed nor decided to take services ofany of the employees of the Society. In fact, it is not even thecase of the appellants that the Board had at any point of time heldout any promise or assurance to absorb their services. When thelicence of the Society was revoked, the State Governmentappointed a committee to examine the question whether the Boardcan take over the services of the employees of the Society. TheCommittee no doubt recommended that the services of eligible 2 (2006) 8 SCC 381

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Aand qualified employees should be taken over. But thereafter theState Government considered the recommendation and rejectedthe same, apparently due to the precarious condition of the Boardwhich itself was in dire financial straits, and was contemplatingretrenchment of its own employees. At all events, any decision bythe State Government either to recommend or direct the absorptionBof the Society’s employees was not binding on the Board, as itwas a matter where it could independently take a decision. It isalso not in dispute that for more than two decades or more, before1995, the Board had not taken over the employees of any privatelicensee. There was no occasion for consideration of such aCcourse. Hence, it cannot be said that there was any regularity orpredictability or certainty in action which can lead to a legitimateexpectation.”

22. In view of the above judgments, legitimate expectation is oneof the grounds of judicial review but unless a legal obligation exists,Dthere cannot be any legitimate expectation. The legitimate expectationis not a wish or a desire or a hope, therefore, it cannot be claimed ordemanded as a right. The payment of pension in the past will not conferan enforceable right in favour of the Institute or its employees.

23. Thus, the resolution of the Board of the Institute to implementEa retirement benefit scheme from its own resources will not bind theState Government to pay the amount of pension to the employees of theInstitute. The employees of such Institute cannot be treated at par withthe employees of the State Government nor the State can be burdenedwith the responsibility to pay pension to the employees of the Institute.Consequently, we find that the order of the Division Bench is not legallyFsustainable. Hence, we allow the appeal and dismiss the Writ Petition.

The pending applications, if any, shall stand disposed of.

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Kalpana K. Tripathy

Appeal allowed.

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