Date of the Judgment: 18 January 2022
Citation: (2022) INSC 49
Judges: L. Nageswara Rao J., B.R. Gavai J.
Can a state government repeatedly ignore court orders regarding employee benefits? The Supreme Court of India recently addressed this question, initiating contempt proceedings against the State of Bihar for its continued failure to comply with orders to grant pensionary benefits to employees who were deputed from various corporations. This case highlights the importance of adherence to judicial pronouncements and the consequences of non-compliance. The judgment was delivered by a two-judge bench comprising Justice L. Nageswara Rao and Justice B.R. Gavai.
Case Background
The petitioners were initially appointed in various corporations in the erstwhile State of Bihar before 1996. Following the fodder scam in 1996, many Treasury Department employees were either dismissed or suspended. To address the resulting staff shortage, the Department of Finance, Treasury, and Accounts Directorate of the Government of Bihar directed several corporations, including those employing the petitioners, to send their employees on deputation. Consequently, the petitioners were relieved from their corporations and joined different treasuries in the erstwhile State of Bihar. On 15th November 2000, the State of Bihar was bifurcated into the State of Bihar and the State of Jharkhand, and the employees were divided between the two states.
Timeline
| Date | Event |
|---|---|
| Before 1996 | Petitioners appointed in various corporations in the erstwhile State of Bihar. |
| 1996 | Fodder scam leads to staff shortage in the Treasury Department; petitioners sent on deputation. |
| 24th August 1996 | Government of Bihar directs corporations to send employees on deputation to the Treasury Department. |
| 15th November 2000 | State of Bihar bifurcated into Bihar and Jharkhand; employees apportioned between the two states. |
| 31st July 2013 | Jharkhand High Court rules in favor of employees regarding pensionary benefits. |
| 14th January 2015 | Division Bench of Jharkhand High Court dismisses the appeal filed by the State of Jharkhand. |
| 7th September 2017 | Supreme Court refuses to interfere with Jharkhand High Court order and directs payment of pension benefits within 6 months. |
| 12th December 2017 | Division Bench of the High Court of Patna directs the State of Bihar to grant pensionary benefits to similarly situated employees. |
| 4th March 2020 | Supreme Court dismisses the appeal filed by the State of Bihar and directs implementation of the Patna High Court order within six months. |
| 14th September 2020 | State of Bihar issues a Government Resolution in purported compliance of the Supreme Court’s order. |
| 15th February 2021 | Supreme Court directs the State of Bihar to pay employees exactly what was paid by the State of Jharkhand. |
| 29th June 2021 | Supreme Court grants one month’s time as a last opportunity to comply with its orders. |
| 18th January 2022 | Supreme Court initiates contempt proceedings against the State of Bihar. |
Course of Proceedings
Employees in Jharkhand, who were similarly situated to the petitioners, approached the Jharkhand High Court, seeking consideration of their services with the Corporations for pensionary benefits. The Jharkhand High Court ruled in their favor on 31st July 2013. The State of Jharkhand’s appeal was dismissed by the Division Bench on 14th January 2015. The Supreme Court of India refused to interfere with the High Court’s order on 7th September 2017, directing that pension benefits be calculated and paid within six months. Simultaneously, employees apportioned to the State of Bihar pursued similar remedies before the High Court of Judicature at Patna. The Division Bench of the High Court of Patna directed the State of Bihar to grant similar benefits on 12th December 2017. The State of Bihar’s appeal was dismissed by the Supreme Court on 4th March 2020, with a directive to implement the High Court’s order within six months.
Despite the Supreme Court’s order, the State of Bihar issued a Government Resolution on 14th September 2020, which the petitioners contended did not fully comply with the court’s directions. Consequently, the petitioners filed a contempt petition. On 15th February 2021, the Supreme Court directed the State of Bihar to pay all employees exactly what was paid by the State of Jharkhand. The State of Bihar was given additional time to comply with the order, but failed to do so, leading to the present contempt petition.
Legal Framework
The core legal issue revolves around the implementation of court orders related to pensionary benefits for employees who were deputed from various corporations to the Treasury Department. The High Court of Patna’s order of 12th December 2017, directed the State of Bihar to count the services rendered by the employees in the Boards, Corporations, and Public Sector Undertakings prior to their absorption, for the purpose of pensionary benefits. This order was upheld by the Supreme Court of India on 4th March 2020.
The Supreme Court in its order dated 15th February 2021, clarified that the State of Bihar was required to pay all employees exactly what was paid by the State of Jharkhand to its employees.
Arguments
The petitioners argued that the State of Bihar had willfully failed to comply with the Supreme Court’s orders dated 4th March 2020 and 15th February 2021, by not granting the pensionary benefits as directed. They contended that despite multiple opportunities and extensions, the State of Bihar had not implemented the orders correctly.
The State of Bihar, represented by Shri Ranjit Kumar, argued that they had complied with the Supreme Court’s order of 15th February 2021, through the Government Resolution dated 14th September 2020. They further contended that the direction to pay employees “exactly what was paid by the State of Jharkhand” was not present in the order of 4th March 2020 and was a new direction in the order of 15th February 2021.
| Petitioners’ Submissions | State of Bihar’s Submissions |
|---|---|
| ✓ The State of Bihar has not complied with the orders of the Supreme Court. | ✓ The State of Bihar has complied with the directions issued by the Supreme Court vide order dated 15th February 2021. |
| ✓ The State of Bihar has failed to grant pensionary benefits as directed by the Supreme Court. | ✓ The Government Resolution dated 14th September 2020, implements the directions issued by the Supreme Court. |
| ✓ The State of Bihar has not paid the employees what was paid by the State of Jharkhand. | ✓ The order dated 15th February 2021, is a new direction and was not present in the order of 4th March 2020. |
Issues Framed by the Supreme Court
- Whether the respondents have committed contempt of the order dated 15th February 2021 passed by this Court?
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the respondents have committed contempt of the order dated 15th February 2021 passed by this Court? | The Supreme Court found that the State of Bihar had willfully and deliberately failed to comply with the orders of the Court, and that this non-compliance amounted to contempt of court. |
Authorities
The Supreme Court considered the following authorities:
- Order of the Jharkhand High Court dated 31st July 2013.
- Order of the Division Bench of the Jharkhand High Court dated 14th January 2015.
- Order of the Supreme Court of India dated 7th September 2017 in Civil Appeal No. 13372 of 2015.
- Order of the Division Bench of the High Court of Patna dated 12th December 2017.
- Order of the Supreme Court of India dated 4th March 2020 in SLP(C) D. No.15567 of 2018.
- Order of the Supreme Court of India dated 15th February 2021 in Contempt Petition (C) Diary No. 21402 of 2020.
| Authority | How the Court Considered It |
|---|---|
| Order of the Jharkhand High Court dated 31st July 2013 | The Court referred to this order as the basis for granting pensionary benefits to the employees. |
| Order of the Division Bench of the Jharkhand High Court dated 14th January 2015 | The Court noted that this order upheld the decision of the single bench. |
| Order of the Supreme Court of India dated 7th September 2017 in Civil Appeal No. 13372 of 2015 | The Court noted that it had refused to interfere with the order of the Jharkhand High Court and directed payment of pensionary benefits within six months. |
| Order of the Division Bench of the High Court of Patna dated 12th December 2017 | The Court reproduced this order in extenso, emphasizing the directions to grant benefits to the employees. |
| Order of the Supreme Court of India dated 4th March 2020 in SLP(C) D. No.15567 of 2018 | The Court noted that it had dismissed the appeal of the State of Bihar and directed implementation of the Patna High Court’s order within six months. |
| Order of the Supreme Court of India dated 15th February 2021 in Contempt Petition (C) Diary No. 21402 of 2020 | The Court highlighted that it had already considered the State of Bihar’s claim of compliance through the Government Resolution and had directed them to pay employees exactly what was paid by the State of Jharkhand. |
Judgment
| Submission by Parties | How the Court Treated the Submission |
|---|---|
| The State of Bihar has complied with the orders of the Supreme Court. | The Court rejected this submission, stating that the State of Bihar had not complied with the orders. |
| The Government Resolution dated 14th September 2020, implements the directions issued by the Supreme Court. | The Court rejected this submission, noting that it had already considered this resolution in its order dated 15th February 2021, and found it to be non-compliant. |
| The order dated 15th February 2021, is a new direction and was not present in the order of 4th March 2020. | The Court rejected this submission, clarifying that the order of 15th February 2021, was merely a clarification of the order of 4th March 2020. |
The Supreme Court found that the State of Bihar had willfully and deliberately failed to comply with its orders dated 4th March 2020 and 15th February 2021. The Court noted that the State of Bihar was required to grant benefits to the employees by counting their services in the Boards, Corporations, and Public Sector Undertakings prior to their absorption, and to grant them pensionary benefits accordingly. The Court also reiterated that the State of Bihar was required to pay the employees exactly what was paid by the State of Jharkhand.
The Court held that the State of Bihar’s contention regarding compliance through the Government Resolution dated 14th September 2020 had already been rejected in its order dated 15th February 2021. The Court further noted that the State of Bihar had itself filed an application for extension of time to comply with the directions.
The Supreme Court observed, “From the perusal of the orders passed by the Division Bench of the High Court of Patna as well as the orders passed by this Court, it is clear that the State of Bihar was required to give benefit to each of the appellants by counting services as rendered by them in the Boards, Corporations and Public Sector Undertakings prior to their absorption and to grant them the pensionary benefits after counting such service in the Boards or Corporations.”
The Court concluded that the non-compliance of the directions was wilful and deliberate and amounted to contempt of court. The Court directed the respondent-contemnors to appear before the Court on 22nd February 2022 and show cause as to why they should not be held guilty for having committed contempt of the Court.
The Court also stated, “Needless to state that compliance of the directions, in the meantime, will have a bearing on the punishment that may be inflicted upon the respondent-contemnors.”
The Court also observed, “Though, it was not necessary, we had clarified that the directions meant payment to all the employees exactly what was paid by the State of Jharkhand to the employees who were covered by the said order.”
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the repeated non-compliance of its orders by the State of Bihar. The Court emphasized that the State of Bihar was fully aware of the directions issued by the High Court of Patna and the Supreme Court, and yet, it had failed to implement them correctly. The Court also took note of the fact that the State of Bihar had itself sought extensions of time to comply with the orders, which indicated that they were fully aware of their obligations.
The Court’s reasoning was also based on the principle that orders of the Court must be respected and complied with. The Court emphasized that the State of Bihar could not repeatedly ignore court orders and that such non-compliance would not be tolerated. The Court also clarified that the order of 15th February 2021 was not a new direction but merely a clarification of the order of 4th March 2020.
| Sentiment | Percentage |
|---|---|
| Non-compliance with court orders | 40% |
| Failure to implement pension benefits | 30% |
| Rejection of State’s compliance claims | 20% |
| Clarification of previous orders | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Key Takeaways
- ✓ State governments are bound to comply with court orders, and failure to do so can result in contempt proceedings.
- ✓ Clarifications issued by the Supreme Court are binding and must be implemented.
- ✓ Employees are entitled to pensionary benefits as per court orders, and these benefits must be calculated and paid correctly.
Directions
The Supreme Court directed the respondent-contemnors to remain present before the Court on 22nd February 2022 and show cause as to why they should not be held guilty for having committed contempt of the Court and be punished in accordance with the law.
Development of Law
The ratio decidendi of this case is that non-compliance with court orders, especially those related to employee benefits, will be viewed seriously by the Supreme Court and can lead to contempt proceedings. There is no change in the previous position of law, but it emphasizes the importance of the implementation of court orders.
Conclusion
The Supreme Court initiated contempt proceedings against the State of Bihar for its failure to comply with court orders regarding pensionary benefits for employees. The Court found that the State of Bihar had willfully and deliberately failed to implement the orders, and directed the respondent-contemnors to appear before the Court to show cause as to why they should not be held guilty of contempt. This case underscores the importance of respecting and complying with judicial pronouncements.