STATE OF MAHARASHTRA VS. BHAGWAN [JANUARY 10,2022]

Citated Judgement	ARCHANA D/O BALAJI BIRADAR VS. STATE OFMAHARASHTRA [LAWS(BOM)-2022-7-122]
Date of Judgement	10 January, 2022
Court	Supreme Court of India
Case Type	Civil
Appellant	The State of Maharashtra & Anr.
Respondent	Bhagwan & Ors.
Bench	Mr. Shah, Sanjiv Khanna
Referred Judgements	Purshottam Lal Vs. Union of IndiaHaryana State Minor Irrigation Tubewells Corporation Vs. GS Uppal

FACTS OF THE CASE

In the case discussed, The High Court of Judicature in Bombay has directed the State Government to extend pensionary benefits to employees of the Water and Land Management Institute (WALMI), a society registered under the Societies Registration Act, 1860. The institute was established in 1980 under the World Bank Project of the Irrigation Department.

The society aims to promote scientific advancement, provide instruction and training in various branches, and conduct research in water management and land development for irrigation and agriculture. WALMI prescribes courses, holds examinations, and grants certificates and diplomas. It seeks affiliation with universities and other academic bodies, provides consultancy services to government local bodies, undertakes research and experiments, and collaborates with similar organizations. 

The institute also sends specialized training to individuals and staff, and invests and manages its funds. The society also makes rules and by-laws for its affairs and makes donations to individuals or institutions that are conducive to its objectives. The State of Maharashtra and another have preferred the present appeals, which were dismissed. The Water and Land Management Institute’s funds and management are held in the Governing Council. The WALMI Establishment Rules, 1980, provided service conditions and allowances for employees, with the Service Rules of the Government of Maharashtra applying to the institute unless they disagreed with the rules. 

However, the Government Rules for Pension, Provident Fund, and Gratuity were excluded. The Governing Council made the Establishment/Service Rules of the Government of Maharashtra applicable to WALMI, except for the Rules (SC) 28 for Pension, Provident Fund, and Gratuity. The Governing Council of WALMI proposed that no pensionary benefits should be granted to employees working in Grant-in-aid Institutes/Corporations. However, the Government of Maharashtra introduced a new Contributory Pension Scheme for government servants recruited on or after 01.11.2005 in the State Government service.

On 08.11.2005, the State Government resolved that employee serving in Grant-in-aid Institutes, Mandals, Corporations, etc. were not entitled to pensionary benefits and the Pension Rules would not be made applicable to them. The Director General of WALMI contacted the Irrigation Department for pensionary benefits in 2008 but the Finance Department later clarified that WALMI employees are not entitled to such benefits. As a result, some employees filed petition before the High Court of Judicature, which directed the State to make a decision within six months. The State Government later confirmed that the request for pensionary benefits was rejected in 2013. The employees of WALMI, who were dissatisfied with a communication dated 05.03.2013, filed writ petitions before the High Court, requesting the State Government to grant pensionary benefits to the employees. 

The High Court allowed the petitions and quashed the communication, directing the State to extend pensionary benefits to WALMI employees. The court argued that the amount available with WALMI and deposited with E.P.F. is sufficient to meet the financial liability of pensionary benefits to employees. The court also noted that WALMI performs educational and research activities and receives 100% grant from the State Government, and the service conditions of employees are regulated by Maharashtra Civil Services Rules. The employees are paid out of the Consolidated Fund of the State Government, and there is no justification to treat them differently than State Government employees. The denial of pensionary benefits would be discriminatory and violate the principle of equality guaranteed under Article 14 of the Constitution of India. The State of Maharashtra, through the Secretary, Irrigation Department, and Finance Department, preferred the appeals. 

ISSUES

Whether the WALMI employees are entitled to the same pensionary benefits as State Government employees?

ARGUMENTS

In this case, the arguments presented revolved around whether employees of WALMI should be entitled to the same pension benefits as state employees. The main arguments can be summarized as follows:

Petitioner’s side: – Petitioner argued that WALMI is entitled for the pensionary benefits and treating them unequally is in violation of right to equality under Article14. They mentioned that the organization receives 100% grant from the state government. They also claimed that the services and conditions of the organization is regulated under Maharashtra civil services rules and thus they are entitled for the pensionary benefits as received by other government employees.

Respondent side: – Respondent side argued that WALMI is an independent autonomous body and that the Service Rules applicable to WALMI employees do not provide provisions for pension or pensionary benefits, and only Gratuity Rules applicable to State Government employees are made applicable. Thus, state is not entitled to provide pensionary benefits to WALMI

These were the main arguments presented in the case. The court carefully considered these arguments and ultimately rendered its judgement based on the specific legal framework and principles applicable to autonomous bodies.

JUDGEMENT

As a result, it is appropriate to annul and set aside the contested common decision and order that was issued by the High Court. It is decided that WALMI personnel do not qualify for pension benefits because WALMI, an autonomous body registered under the Societies Registration Act, has its own Service Rules and conditions that do not provide pensionary benefits. 

The Governing Council has adopted Maharashtra Civil Services Rules, except for the Pension Rules. The State Government has not extended pensionary benefits to employees of aided institutes, boards, and corporations since 2005. The High Court is not justified in directing the State to extend pensionary benefits to WALMI, as it is an independent autonomous entity. 

The court argues that WALMI has to run its administration from its own financial resources and has no financial powers to impose taxes like a State or Central Government. WALMI must depend on grants made by the State Government. The High Court ruled that the amount available with WALMI and deposited with E.P.F. is sufficient to cover the financial liability of pensionary benefits to employees. 

There is no justification for the State Government to refuse to extend pension benefits to retired employees of WALMI. The court noted that merely because WALMI has a fund does not justify extending pensionary benefits. Granting pensionary benefits is a recurring monthly expenditure, and there is a continuous liability in the future. Therefore, merely having certain funds at one point does not mean that WALMI can bear the burden of paying pension to all employees in the future.

 The State Government and WALMI should make their own policy decisions on pensionary benefits, and the Judiciary’s interference in such a policy decision is not warranted or justified. All these appeals are accordingly allowed. However, in the facts and circumstances of the case, there shall be no order as to costs.

REFERENCES

https://indiankanoon.org/doc/32325764/

https://www.the-laws.com/Encyclopedia/browse/Case?Caseld-002202520000&Title-STATE- www.livelaw.in was first indexed by Google in March 2013

This article is written by Taniya Porwal of Lloyd School of Law, Intern at Legal Vidhiya.

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