Bihar State Construction Corp. vs Uday Kumar & Anr on 22 July, 2011

[Cites 7, Cited by 1]

Patna High Court - Orders

Bihar State Construction Corp. vs Uday Kumar & Anr on 22 July, 2011

2. The common issue falling for determination in all these appeals is whether on account of resolution of the Board of Directors dated 24.8.1976 against agenda item no.2 relating to service conditions of the regular staff of -3- the appellant, Bihar State Construction Corporation, its regular staff such as the writ petitioners would superannuate at the age of 58 or at the age of 60 years.

3. At the instance of individual employees, the writ petitioners, the Writ Courts have held that on account of the amendment of Rule 73 of the Bihar Service Code some time in the year 2005, the age of superannuation of the employees of the State Government was extended from 58 years to 60 years and as a result, since the regular staff of the Corporation were to be governed in accordance with government rules in respect of service conditions, they also got the benefit of such amendment and extension of age of superannuation by two years. The Writ Courts have mainly placed reliance upon a Division Bench judgment of this Court in the case of Lala Nand Kumar V. Bihar State Food and Civil Supplies Corporation Limited, 2008(1) PLJR 579. That Division Bench judgment considered the exact wordings of a resolution of the Board of Directors of that Corporation dated 21.5.1973 and as discussed in paragraph 8 of that judgment, a conclusion was reached that according to the resolution the future changes in the -4- Bihar Service Code were also applicable to the employees of the Corporation. The resolution extracted in paragraph 5 of that judgment led to the conclusion by the Division Bench that until the relevant rules are framed by the Corporation, provisions in the Bihar Service Code as applicable to the State Government employees stood adopted for the employees of the Corporation. The wordings permitted such interpretation in favour of the employees and the Division Bench followed judgment of the Supreme Court in the case of Harwindra Kumar v. Chief Engineer, Karmik, AIR 2006 SC 365. In that case there was a clear scope to hold that whatever be the rules in the Bihar Service Code including amendments applicable to the State Government employees, the same would be applicable to the employees of that Corporation until the Corporation framed its own service rules.

4. In our view, the resolution adopted by the Board of Directors of Bihar State Food and Civil Supplies Corporation cannot be of any help in deciding a similar issue in the context of the appellant Corporation i.e. Bihar State Construction Corporation. For a proper and -5- just decision it is incumbent to look to the admitted resolution of the Board of Directors dated 24.8.1976 against agenda item no.2 relating to service conditions of the regular staff of the Corporation which runs as follows:

" The Board resolved that the employees of the Corporation who have been appointed directly will be governed in accordance with Government rules till 31.1.77 as preparation of rules regarding service conditions is likely to take time ".

5. The aforesaid resolution is available in the record of CWJC No.11376 of 2009 as Annexure-1. Arguments have been advanced by the parties on the basis of said resolution that the same shall govern the rights of the writ petitioners because no rules regarding service conditions of the regular staff of the Corporation could ever be framed by the Corporation. It is also admitted that no other resolution was adopted by the Board of Directors either to continue the effect of aforesaid resolution dated 24.8.1976 or to provide otherwise. According to learned counsel for the Corporation, the said resolution is capable of only one meaning that the government rules as they existed till 31.1.77 alone shall -6- be applicable for determining service conditions of the regular staff of the Corporation. According to him, subsequent amendments including that of 2005 enhancing age of superannuation from 58 to 60 years will not be applicable to the staff of the Corporation. On the other hand, on behalf of the writ petitioners it has been submitted that the date 31.1.77 limits only the period till which the government rules were to govern the service conditions of the employees of the Corporation because the rules of the Corporation were expected to be ready by that time. But it was the intention of the Board of Directors that till the Corporation prepares its own rules, the employees of the Corporation would be governed in accordance with government rules. According to learned counsel for the writ petitioners, there was definitely no vacuum and the date 31.1.77 de facto would stand extended and in fact till date the staff of the Corporation is governed by the government rules and hence, the term "till 31.1.77" is of no consequence and the employees of the Corporation must be given the benefit of government rules as amended in the year 2005.

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6. Learned counsel for the appellant Corporation has placed reliance upon a Division Bench judgment in the case of State of Bihar V. Braj Mohan Prasad, 2010 (1) PLJR 707. In that case a similar claim on behalf of the employees of Bihar State Ware Housing Corporation was negatived by the Court after noticing the role of the State Government in the matters relating to the said Corporation in Sections 42 and 43 of the Warehousing Corporations Act and express provision in regulation 13 of that Corporation whereunder 58 was the age fixed for superannuation of the employees and the proviso enabled the Corporation to engage any person above the age of 58 years only on contract. In such factual and legal situation, the Division Bench in that case held that even if the retirement age of employees in other public sector undertakings of the Bihar government had been increased on the basis of notification of the State Government dated 24.3.2005 the age of the retirement of the employees of Bihar State Ware Housing Corporation would remain as 58 years as determined by the Regulation.

7. Learned counsel for the writ petitioners has -8- placed reliance upon a judgment and order passed by one of us (Shiva Kirti Singh, J.) dated 18.3.2008 in CWJC No.16333 of 2006 (Md. Nijam v. the State of Bihar & ors.) to submit that in one of the paragraphs, reliance was placed upon the judgment of this Court in the case of Lala Nand Kumar (supra) in the context of Bihar State Industrial Development Corporation, the appellant and it was observed that as per decision of the Corporation, the writ petitioner would be entitled to the same service conditions as are available to government employees and, therefore, his age of superannuation would also stand extended to 60 years in the light of principle laid down by the Division Bench in the case of Lala Nand Kumar. In reply, learned counsel for the appellants has rightly submitted that the said judgment was in the context of validity of an order repatriating the writ petitioner to the Corporation and the issues did not involve examining the relevant resolution of the Board of Directors dated 24.8.1976. According to him, the observation was a casual observation without going into relevant materials and in fact, the said judgment was challenged through LPA No.556 of 2008 preferred by -9- the State of Bihar leading to judgment and order of the Division Bench dated 7.9.2009. That judgment also governed a related LPA No.492 of 2008 (Md. Nijam v. State of Bihar). The LPA Bench held that the order of repatriation should not have been quashed but since the employee was to superannuate from government department within few months, it would not interfere in the matter. It was also clarified that the order in that case shall not be treated as a precedent.

8. What flows from the judgment cited by the rival parties is that rights of the employees of the Corporation would depend upon the intention of the Board of Directors flowing from the resolution governing their service conditions or from the service rules or regulations, if any. In the present case, admittedly there are no rules or regulations and the relevant resolution of the Board of Directors has already been noticed above. The intention of the Board of Directors in the present case was not to grant parity for all times to come between the employees of the Corporation and those of State government in the matters of service conditions including age of superannuation. The expressions

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required to convey such parity are available in the case of Lala Nand Kumar (supra) which related to Bihar State Food and Civil Supplies Corporation Limited and in the case of Harwindra Kumar (supra) which related to U.P. Jal Nigam. In the present case, the Board of Directors indicated no intention of granting absolute parity but provided for an interim arrangement till a particular date i.e. 31.1.77 for application of government rules to the employees of the Corporation. This can, at best, imply adoption of service condition rules as applicable till 31.1.77. The fact that no rules of the Corporation were prepared cannot have any relevant bearing to the intention of the Board of Directors on 24.8.1976 that they wanted and hence provided that the government rules will govern the employees of the Corporation till 31.1.77. In view of such phraseology used by the Board of Directors, amendments in the government rules till 31.1.77 will apply to the employees of the Corporation but subsequent amendments including those of 2005 whereby the age of superannuation was enhanced from 58 to 60 years for the government employees cannot apply to the employees of the Corporation. In that view

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of the matter, the judgments and orders passed by the Writ Courts which are under appeal in the present Letters Patent Appeals have to be set aside. We order accordingly.

9. In support of our aforesaid view, it will be useful to refer to and rely upon another Division Bench judgment of this Court in the case of Rajdeo Paswan v. State of Bihar, 2009 (1) PLJR 150 wherein it was held that in absence of any resolution by the competent authority, employees of other legal bodies cannot get the benefit of increase in the retirement age of employees of Bihar Government.

10. It may also be useful to refer here a letter of the Finance Department dated 21.11.2009 and to another letter of the parent department i.e. Water Resources Department dated 18.8.2009 contained in Annexures 1 and 2 to the memorandum of appeal. These letters show that the State Government which is the master of public enterprises like the appellant Corporation had taken a policy decision that extension in the retirement age of employees of public corporations and enterprises shall be granted only for such corporations and enterprises which

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are running in profit regularly since five years and have overcome their accumulated losses. In that light, by order dated 18.8.2009 the Managing Director of the appellant Corporation was informed that no extension in the retirement age could be given to the employees of the appellant Corporation which according to uncontroverted averments is in losses for last so many years and practically non- functional.

11. In the result, the writ petitions are dismissed and all the appeals are allowed. There shall be no order as to costs.

(Shiva Kirti Singh, J.) (Shivaji Pandey, J.) sk

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Patna High Court - Orders