Supreme Court Upholds Uniform Retirement Age for UP Jal Nigam Employees: State of Uttar Pradesh vs. Dayanand Chakrawarty (2013)

Case Background

The Public Health Engineering Department (PHED) handled public health engineering tasks during the British era. Before independence, the State of United Province established the Local Self Government Engineering Department (LSGED), which was converted from PHED. The LSGED was responsible for all engineering works of the Local Self Government.

On June 18, 1975, the Uttar Pradesh Jal Nigam (Nigam) was formed under Section 3 of the Uttar Pradesh Water Supply and Sewerage Act, 1975. Section 37(1) of the Act stated that employees of the LSGED would be transferred to the Nigam with the same service terms and conditions that they had before, until new rules were made.

In a meeting on April 4, 1977, the Nigam decided that all rules applicable to government servants would also apply to its employees, unless the Nigam made a specific order. The Nigam created the Uttar Pradesh Service of Engineers (Public Health Branch) Regulations, 1977, and later, the Uttar Pradesh Jal Nigam Services of Engineers (Public Health Branch) Regulations, 1978. These regulations governed the recruitment and service conditions of engineers in the Nigam.

Regulation 31 of the 1978 Regulations stated that the service conditions of Nigam employees would be the same as those for government employees.

Initially, the retirement age for state government employees was 58 years, as per Rule 56(a) of the Uttar Pradesh Fundamental Rules. However, this was amended in 2002, increasing the retirement age to 60 years.

Timeline

Legal Framework

The case revolves around the interpretation of the Uttar Pradesh Water Supply and Sewerage Act, 1975, and the regulations framed under it. Key provisions include:

• Section 3 of the Uttar Pradesh Water Supply and Sewerage Act, 1975: This section empowers the State Government to constitute the Uttar Pradesh Jal Nigam.
• Section 37(1) of the Uttar Pradesh Water Supply and Sewerage Act, 1975: This section deals with the transfer of employees from the Local Self-Government Engineering Department to the newly formed Nigam. It states that the employees would continue on the same terms and conditions of service until altered by rules or regulations.
  “the services of the employees and engineers of the Local Self­Government Engineering Department (LSGED) will be transferred and merged into the newly created Nigam on the same terms and conditions, which were governing their services prior to such absorption, till the said service conditions are altered/changed by the Rules or Regulations framed in accordance with law.”
• Section 97 of the Uttar Pradesh Water Supply and Sewerage Act, 1975: This section grants the Nigam the power to make regulations regarding recruitment and service conditions, with the prior approval of the State Government.
• Regulation 31 of the Uttar Pradesh Jal Nigam Services of Engineers (Public Health Branch) Regulations, 1978: This regulation states that the service conditions of Nigam employees, including pay, allowances, pension, and leave, would be governed by the rules applicable to government servants.
  “Except as provided in these regulations the pay, allowance, pension, leave, imposition of penalties and other conditions of service of the members of the service shall be regulated by rules, regulations or orders applicable generally to the Government Service in connection with the affairs of the state.”
• Rule 56(a) of the Uttar Pradesh Fundamental Rules: This rule initially set the retirement age for government servants at 58 years, but was later amended to 60 years.
  “Rule 56(a).Except as otherwise provided in other clauses of this rule every Government servant shall retire from service on the afternoon of the last day of the month in which he attains the age of fifty­eight years. He may be retained in service after the date of retirement on superannuation with the sanction of the government on public grounds which must be recorded in writing but he must not be retained after the age of sixty years except in very special circumstances.”
  
  (Amended)
  
  “Rule 56(a).Except as otherwise provided in this rule, every government servant shall retire from service on the afternoon of the last day of the month in which he attains the age of sixty years.”
• Uttar Pradesh Jal Nigam Employees (Retirement on the age of Superannuation) Regulations, 2005: These regulations prescribed different retirement ages for different categories of employees. Regulation 3 set the retirement age at 60 for those who were previously employed in LSGED and transferred to the Nigam, while Regulation 4 set the retirement age at 58 for all other employees directly appointed in the Nigam.
  “3. Age of superannuation of every employee who was employed in the Engineering Department of the Local Self Government under Section 37(1) of the Act, and has been transferred to the Corporation and is employed in the Corporation, will be 60 years.
  4. The age of superannuation of the employees different from those under Rule 3 above, will be 58 years. But the age of superannuation of the Group ‘D’ employee who have been employed prior to 5.11.1985, will be 60 years.”

Arguments

The State of Uttar Pradesh and the Nigam argued that:

• The High Court cannot equate employees of public undertakings with state government employees for retirement age.
• The High Court cannot prevent the Nigam from using its powers under Section 97 of the Uttar Pradesh Water Supply and Sewerage Act, 1975 to determine retirement age.
• The classification between employees of the LSGED and those directly recruited by the Nigam is valid and reasonable.
• The High Court should not have set aside the 2005 Regulations without a challenge to the Nigam’s power to frame them.
• Section 37(1) of the Act protects the service conditions of employees transferred from the LSGED.
• Retirement age is a policy matter that the High Court cannot decide under Article 226 of the Constitution of India.

The employees of the Nigam contended that:

• The 2005 Regulations are discriminatory and violate Article 14 of the Constitution of India by creating two classes of employees with different retirement ages.
• Regulation 31 of the 1978 Regulations makes the retirement age of 60 years applicable to all employees of the Nigam.
• The Nigam cannot make an administrative decision that goes against the rules and regulations framed by it.
• The State Government cannot issue a policy direction under Section 89 of the Act to deny the benefit of enhanced retirement age to the employees of the Nigam.

The key point of contention was whether the Nigam could create two different retirement ages based on the source of entry into service.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court framed the following issues:

1. Whether two different ages of superannuation (58 and 60 years) can be prescribed for similarly situated employees, including members of the same service, solely based on their source of entry into service.
2. Whether the Uttar Pradesh Jal Nigam (Retirement on attaining age of Superannuation) Regulations, 2005, fixing two different ages of superannuation for similarly situated employees of Jal Nigam, are discriminatory and ultra vires under Article 14 of the Constitution of India.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Court’s view on the authorities is as follows:

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle of equality enshrined in Article 14 of the Constitution of India. The Court emphasized that employees of the same service cannot be discriminated against based solely on their source of entry. The Court also gave importance to the fact that Regulation 31 of the 1978 Regulations made the service conditions of government employees applicable to Nigam employees. The Court found that the 2005 Regulations, which created two different retirement ages, were discriminatory and lacked a valid rationale. The Court also noted that the State Government’s order prescribing a uniform retirement age of 58 years for all government companies and corporations could not override the statutory regulations framed by the Nigam.

Sentiment Analysis of Reasons

Fact:Law Ratio

Logical Reasoning

Final Order

The Supreme Court upheld the judgment of the Allahabad High Court, with a modification regarding back wages. The Court directed that:

• The Uttar Pradesh Jal Nigam Employees (Retirement on the age of Superannuation) Regulations, 2005, are declared unconstitutional and are set aside.
• All employees of the Nigam, regardless of their source of entry, are entitled to a uniform retirement age of 60 years.
• The benefit of back wages was limited to the employees who had approached the court and not extended to those who did not.

Dissenting Opinion

There was no dissenting opinion in this case. The judgment was delivered by a two-judge bench, and both judges agreed on the final order.

Implications

The judgment has significant implications for employee rights and the principle of equality:

• It reinforces the principle that employees of the same service cannot be discriminated against based on their source of entry.
• It clarifies that statutory regulations cannot be overridden by administrative decisions or government orders.
• It upholds the importance of Article 14 of the Constitution of India, ensuring equal treatment under the law.
• It provides a clear precedent for cases involving similar issues of retirement age and discrimination in public sector undertakings.
• It ensures uniform retirement age for all employees of Uttar Pradesh Jal Nigam.

Critical Analysis

The Supreme Court’s judgment in State of Uttar Pradesh vs. Dayanand Chakrawarty is a landmark decision that reinforces the principles of equality and non-discrimination in employment. The Court’s emphasis on the applicability of government service rules to Nigam employees through Regulation 31 is a crucial aspect of the judgment. By striking down the 2005 Regulations, the Court ensured that employees of the same service are treated equally, regardless of their source of entry. The Court’s decision to limit back wages to those who had approached the court is understandable, given the financial implications for the Nigam.

However, the judgment could have provided more clarity on the scope of the Nigam’s power to frame regulations under Section 97 of the Act. While the Court acknowledged the Nigam’s power, it did not elaborate on the extent to which the Nigam could deviate from government service rules. Additionally, the judgment could have explored the financial implications of the decision on the Nigam in greater detail.

Conclusion

The Supreme Court’s decision in State of Uttar Pradesh vs. Dayanand Chakrawarty is a significant judgment that upholds the principle of equality in service matters. The Court correctly identified that the Uttar Pradesh Jal Nigam Employees (Retirement on the age of Superannuation) Regulations, 2005 were discriminatory and violated Article 14 of the Constitution of India. The Court’s decision to uphold the High Court’s judgment and direct a uniform retirement age of 60 years for all employees of the Nigam has far-reaching implications for employee rights and the administration of public sector undertakings. This judgment serves as a reminder that statutory regulations must be consistent with constitutional principles and that employees should not be discriminated against based on their source of entry.