Calcutta High Court: In a writ petitions involving ex-employees of the West Bengal Housing Board (the Board) seeking reliefs related to their retirement benefits and service conditions, a single-judge bench comprising of Hiranmay Bhattacharyya,* J., held that the State Government did not have the authority to issue directions on service conditions. The Court set aside the orders and directions issued by the Finance Department and Housing Department and instructed the authorities to recalculate the retiral benefits of the petitioners based on the last pay structure, including MCAS benefits.
Factual Matrix
The petitioners in these cases are former employees of the Board. The Board adopted the Career Advancement Scheme (CAS) of the State Government in a special meeting in 1995 and extended its benefits to its employees. Subsequently, the CAS was modified, leading to the introduction of the modified Career Advancement Scheme, 2001 (MCAS). In a meeting in 2001, the Board decided to implement MCAS for its employees, which led to the revision of their salaries.
However, in 2017, the Finance Department of the Government of West Bengal opined that MCAS had not been allowed to any other undertaking or autonomous body and suggested that it should not be extended to the Board’s employees. Based on this opinion, the Housing Department directed the Board to recast the pay of its employees by withdrawing the benefits of MCAS.
Aggrieved by the impugned orders, separate groups of ex-employees filed writ petition 1 (WP-1) and writ petition 2 (WP-2) seeking mandamus orders directing the respondents to allow the petitioners to receive retiral benefits based on the last drawn pay structure at the time of their retirement, specifically upon the implementation of the Career Advancement Scheme, 1990, and the modified Career Advancement Scheme, 2001, while the petitioners in writ petition 3 (WP-3) sought mandamus order to release their leave salary along with interest for delayed payment, as well as interest on gratuity due to delayed payment. As the issues in these writ petitions are similar, they were heard together and decided in a single order.
Legal Issues:
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Does the State Government have jurisdiction to issue directions regarding the fixation of conditions of service of the officers and employees of the West Bengal Housing Board under the provisions of the West Bengal Housing Board Act, 1972 (the Act)?
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Can the amount drawn by the employees in terms of the decision of the West Bengal Housing Board for the extension of the benefits of MCAS be recovered from the petitioners’ retirement benefits?
Parties’ Contentions
The petitioners contended that the State Government cannot unilaterally impose service conditions on the Board’s employees as the Board has the authority to appoint and frame regulations for its employees’ service conditions. It was claimed that the State Government’s long acquiescence in providing MCAS benefits barred it from withdrawing these benefits. Iy was also contended that no opportunity for a hearing was granted before withdrawing the MCAS benefits.
The State contended that Section 50 of the Act empowers the State Government to issue directions regarding the Board’s functions, including service conditions. It was asserted that the Board had initially extended MCAS benefits without proper approval. The State further contended that excess payments could be recovered from employees, relying on the precedent set in the case of Chandi Prasad Uniyal and others vs. State of Uttarakhand and others.
Court’s Assessment
The Court examined the provisions of the Act, and considered whether the State Government had the authority to issue directions regarding the conditions of service of the Board’s employees. The Court referred to relevant sections of the Act, including Section 50, which empowers the State Government to give directions to the Board. However, the Court concluded that the primary purpose of the Act was to constitute a Board for executing housing schemes and not to determine the conditions of service of its officers and employees.
The Court observed that Section 43(2)(d) of the Act grants the Board the authority to frame regulations regarding the conditions of service of employees who are not appointed under Section 13(1) of the Act. Since the petitioners were not employees appointed under Section 13(1), the Board had the exclusive jurisdiction to frame regulations and make policy decisions regarding their service conditions.
The Court cited State of U.P. v. Preetam Singh, (2014) 15 SCC 774, and held that the State Government did not have the right to issue directions on the conditions of service of the Board’s employees. The Court also mentioned that the matter had been referred to a larger bench for reconsideration, but it adhered to the view expressed in Preetam Singh (Supra).
Consequently, the Court ruled in favor of the petitioners, stating that the State Government did not have jurisdiction to issue directions regarding the service conditions of the Board’s employees. Therefore, the orders of the Finance Department and the Housing Department withdrawing the benefits of MCAS were not valid.
The Court also discussed the recovery of excess payments, relying on the Chandi Prasad Uniyal v. State of Uttarakhand, (2012) 8 SCC 417, to support the State’s argument that such recovery was permissible. However, it emphasized that the recovery must be lawful and not in violation of any statutory rights, i.e., the excess payments made to the employees due to the incorrect pay fixation could not be recovered from their retirement benefits.
The Court rejected the contention that the State Government was unaware of the Board’s extension of benefits, specifically MCAS, to its officers and employees since 2001. The composition of the Board, which includes Secretaries of the Housing and Finance departments and appointments by the State Government, suggests that the State Government was well aware of these decisions. Consequently, the Court held that the policy decision of the Board made in 2001 could not be revoked after more than 17 years.
The Court addressed WP-3, which sought the release of leave salary along with interest and a direction to pay interest on delayed gratuity and found that the relief regarding interest on delayed gratuity was not pressed.
The Court emphasized that the Board should recalculate the retiral benefits of the petitioners, including leave encashment, by including the benefits arising from MCAS. The Board was directed to pay any differential amount to the petitioners within a specified time.
The Court held that the Board should not be held liable to pay interest on leave encashment, as the legal issue regarding the State Government’s competence to issue directions was pending consideration since 2018.
Court’s Decision
The Court held that the orders issued by the Finance Department and the Housing Department of the Government of West Bengal, dated 17.10.2017 and the directions contained in a communication dated 28.11.2017, were without jurisdiction. These orders and directions were set aside and quashed. Furthermore, all consequential actions taken by the Board based on these orders were also set aside and quashed.
The Court ordered that the specified exercises and payments should be completed expeditiously within eight weeks of receiving the server copy of the order.
[Sital Kumar Biswas v. State of W.B., 2023 SCC OnLine Cal 3057, order dated 25-09-2023]
*Judgment by Justice Hiranmay Bhattacharyya
Advocates who appeared in this case :
Mr. Soumya Majumder and Mr. Victor Chatterjee, Counsel for the Petitioners in WPA 18121 of 2019
Mr. Arup Kumar Lahiri and Mr. Udayan Dutta, Counsel for the Petitioners in WPA 4256 of 2018 and WPA 4257 of 2018
Mr. Tapan Kumar Mukherjee, Sr. Advocate, Mr. Pinaki Dhole and Ms. Debdooti Dutta, Counsel for the State
Mr. Amitava Mitra and Mr. Subhadip Banerjee, Counsel for the Housing Board
Mr. Susanta Pal and Mr. Prabir Kumar Ray, Counsel for the Housing Dept.
