In State of Maharashtra v Bhagwan, the Supreme Court held that state governments and autonomous boards and bodies were not on a par, and employees of the latter were governed by their own service rules and conditions. The court held that the employees of autonomous bodies could not claim, as a matter of right, the same service benefits as enjoyed by government employees.
The court further observed that interference by the judiciary in a policy decision having financial implications, or a cascading effect, was not warranted and could not be justified.
The issue arose in an appeal by Maharashtra state challenging the judgment of the Bombay High Court, which directed the state government to extend pension benefits to the employees of the Water and Land Management Institute (WALMI).
Maharashtra contended that under the service rules applicable to employees of the WALMI, there was no provision for pension benefits. The pension rules applicable to the state government employees should not apply to the employees of the WALMI, and therefore they were not entitled to pension benefits.
The issue in this case was whether the employees of the WALMI, an independent autonomous entity registered under the Societies Registration Act, 1860 were entitled to the pension benefits on a par with state government employees.
Citing T.M. Sampath and Ors v Secretary, Ministry of Water Resources and Ors, the bench held that:
“As per the law laid down by this court in a catena of decisions, the employees of the autonomous bodies cannot claim, as a matter of right, the same service benefits on par with the government employees. Merely because such autonomous bodies might have adopted the Government Service Rules and/or in the Governing Council there may be a representative of the government and/or merely because such institution is funded by the state/central government, employees of such autonomous bodies cannot, as a matter of right, claim parity with the state/central government employees. This is more, particularly, when the employees of such autonomous bodies are governed by their own service rules and service conditions. The state government and the autonomous board/body cannot be put on par.”
In setting aside the high court judgment, the Supreme Court held that the grant of pension benefits was not a one-time payment. The grant of such benefits was a recurring monthly expenditure and there was a continuous liability in the future. Merely because at one point of time, the WALMI might achieve a certain level of funding did not mean that for all time to come, it could bear the burden of paying pensions to all its employees.
In any event, it was ultimately for the state government and the WALMI to take their own policy decisions to extend pension benefits to their employees or not. Interference by the judiciary in such policy decisions that had financial implications or a cascading effect was not warranted and could not be justified.
The dispute digest is compiled by Numen Law Offices, a multidisciplinary law firm based in New Delhi & Mumbai. The authors can be contacted at email@example.com. Readers should not act on the basis of this information without seeking professional legal advice.