C.A.Nos.6622-6623 of 2022 etc. REPORTABLE  IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION  CIVIL APPEAL NOS.6622­6623 OF 2022 State of U.P. & Ors.                                 … Appellants Versus Virendra Kumar & Ors.                           ... Respondents WITH CIVIL APPEAL NO. 6626 OF 2022 AND CIVIL APPEAL NO. 6627 OF 2022 J U D G M E N T ABHAY S. OKA, J. 1. On 10 th  February 2020, for the reasons recorded, a Bench of two Hon’ble judges of this Court came to the conclusion that the   view   taken   by   this   Court   in   the   case   of   State   of   Uttar 1 C.A.Nos.6622-6623 of 2022 etc. Pradesh   v.   Preetam   Singh   &   Ors. 1   (Preetam   Singh’s   case) needs   reconsideration.   Under   Section   3   of   the   Uttar   Pradesh Avas   Evam   Vikas   Parishad   Adhiniyam,   1965   (for   short   ‘the 1965 Act’), Uttar Pradesh Avas Evam   Vikas Parishad (for short ‘the   Board’)   was   established.   The   basic   object   of   the establishment   of   the   Board   was   of   framing   and   executing housing   and   improvement   schemes   in   the   State   of   Uttar Pradesh.   The   core   issue   on   which   the   reference   is   made   to   a larger   Bench   is   whether   the   act   of   determining   service conditions of the employees and officers of the  Board is one of the statutory functions of the Board. FACTUAL ASPECTS 2. On   21 st   February   1995,   the   Board   resolved   to   extend   the pensionary   benefits   to   its   employees   by   replacing   the   existing Contributory   Pension   Scheme   (for   short   ‘the   old   pension scheme’)   with   a   pension/family   pension/gratuity   scheme   (for short   ‘the   new   pension   scheme’).   On   16 th   May   1996,   the   State Government   accorded   its   consent   to   the   new   pension   scheme 1 2014 (15) SCC 774 2 C.A.Nos.6622-6623 of 2022 etc. subject   to   the   condition   that   the   Board   will   not   be   entitled   to seek any financial assistance for the implementation of the new pension scheme.   3. By   a   Resolution   dated   5 th   November   1997,   the   Board approved   the   new   pension   scheme.   The   new   pension   scheme was   based   on   the   pension   scheme   of   the   State   Government applicable   to   civil   servants.   On   26 th   November   1997,   State Government passed an order staying the implementation of the new   pension   scheme.   It   appears   that   the   State   Government appointed   a   committee   of   experts   to   examine   the   new   pension scheme   of   the   Board.   After   considering   the   report   of   the committee   of   experts,   the   State   Government   vide   order   dated 14 th   September   1999   vacated   the   stay   granted   earlier   by imposing a condition that the scheme shall be funded from the contribution   to   provident   fund   made   by   the   Board   and   that neither   the   State   Government   nor   the   Board   shall   incur financial liability by implementing the new pension scheme. 4. Preetam Singh and others  who were the employees of the Board, filed a writ petition in Allahabad High Court. The prayer 3 C.A.Nos.6622-6623 of 2022 etc. in   the   petition   was   initially   confined   to   the   challenge   to   the Government   Order   dated   14 th   September   1999.   During   the pendency   of   the   said   petition,   on   7 th   May   2003,   the   State Government reiterated its earlier stand of granting no objection to   the   new   pension   scheme   subject   to   the   condition   that   no financial   assistance   shall   be   provided   to   the   Board   for implementing   the   said   scheme.   On   16 th   January   2004,   the Board   by   an   office   order   gave   an   option   to   its   employees   of either opting for the new pension scheme or continuing with the old pension scheme. In terms of the option given by the Board, according   to  the case of  the  State  Government,  582 employees opted   for   the   old   pension   scheme   by   filing   necessary undertakings.   On   13 th   September   2005,   the   State   Government issued an order keeping its communication dated 7 th  May 2003 in abeyance on the ground that it was preparing comprehensive guidelines   regarding   the   payment   of   pension   to   the   employees of   Public   Sector   Enterprises.   By   a   communication   dated   12 th July   2007,   the   State   Government   purported   to   withdraw   the approval   granted   earlier   to   the   new   pension   scheme   of   the 4 C.A.Nos.6622-6623 of 2022 etc. Board.   The   writ   petition   filed   by   Preetam   Singh   and   others was   amended   and   a   challenge   to   the   orders   dated   13 th September   2005   and   12 th   July   2007   was   incorporated   in   the petition.   During   the   pendency   of   the   petition   filed   by   Preetam Singh   and   others,   the   State   Government   issued   an   office memorandum   dated   8 th   December   2008   for   applying   a   revised pension,   gratuity/family   pension,   and   commutation   scheme with   effect   from   1 st   January   2006   for   the   benefit   of   its employees.   The   said   memorandum   was   issued   in   terms   of   the recommendations   of   the   U.P   Pay   Committee,   2008.   However, the   employees   of   local   bodies   and   public   enterprises   were specifically   excluded   from   the   applicability   of   the   said   office memorandum.   Another  office memorandum  was issued on 8 th December  2008  by   the   State   Government   for   providing   revised pensionary   benefits   to   those   Government   servants   who   had retired   before   1 st   January   2006.     This   order   was   made applicable   to   the   employees   of   Public   Sector   Enterprises   who were   already   getting   pension   prior   to   1 st   January   2006.     A 5 C.A.Nos.6622-6623 of 2022 etc. Division   Bench   of   Allahabad   High   Court   by   the   judgment   and order dated 16 th  January 2009 allowed the writ petition filed by Preetam   Singh   &   others .  The   High   Court  quashed  the   orders dated 13 th   September 2005 and 12 th   July 2007 to the extent to which   they   related   to   the   Board.   A   writ   of   mandamus   was issued   directing   the   Board   to   implement   the   new   pension scheme   in   terms   of   its   Regulations   framed   on   5 th   November 1997.  5. In   view   of   the   decision   of   the   High   Court,   a   notification dated 19 th  May 2009 was issued by the Board in the exercise of powers   under   clause   (f)   of   sub­section   (1)   of   Section   95   of   the 1965 Act. The notification recorded that the Board had decided to   implement   the   new   pension   scheme   as   admissible   to   the officers and employees of the State Government in terms of the Rules   and   Regulations   set   out   in   the   said   notification.   The Board   directed   that   the   new   pension   scheme   shall   come   into force and will apply to those officers who retired on or after 1 st January   1996.   However,   it   was   stated   that   the   Newly   Defined 6 C.A.Nos.6622-6623 of 2022 etc. Contributory   Pension   Rules   of   the   State   Government   will   be applicable to those employees of the Board who have joined the employment   on   or   after   1 st   April   2005.     The   notification   also provided that  the orders issued from  time to time by  the State Government   with   respect   to   pension/   family   pension/   gratuity shall be applicable to the officers and employees of the Board. 6. The   decision   of   the   High   Court   was   challenged   by   the State   Government   before   this   Court   in   which   the   decision   of this   Court   in   Preetam   Singh’s   case 1   was   rendered.     It   was observed   in   paragraph   21   of   the   final   judgment   of   this   Court that   the   interim   order   dated   7 th   August   2012   passed   by   this Court   had   the   effect   of   staying   the   notification   dated   19 th   May 2009.   By   the   interim   order   of   this   Court   dated   7 th   September 2012,   the   employees   of   the   Board   were   permitted   to   claim benefits   under   the   old   pension   scheme.   However,   it   was observed that the interim order will not come in the way of the said   employees   agitating   their   claim   and   also   supporting   the relief granted by the High Court. 7 C.A.Nos.6622-6623 of 2022 etc. 7. One   of   the   main   contentions   canvassed   by   the   State   of Uttar Pradesh before this Court in   Preetam Singh’s case 1   was based   on   provisions   of   sub­section   (1)   of   Section   2   of   the   U.P. State Control Over Public Corporations Act, 1975 (for short ‘the 1975   Act’).   Section   2(1)   of   the   1975   Act   provides   that   every statutory   body   established   or   constituted   under   any   Uttar Pradesh Act shall in the discharge of its functions be guided by such directions  on questions of policies as may  be issued to it by   the   State   Government   notwithstanding   that   no   such   power has been expressly conferred by the statute establishing such a statutory body on the State Government. The contention of the State Government was that the orders issued on 13 th  September 2005 and 12 th   July 2007 must be deemed to have been issued in the exercise of powers under Section 2(1) of the 1975 Act.  8. While deciding   Preetam Singh’s case 1   on 24 th   September 2014,   this   Court   referred   to   Section   15   of   the   1965   Act   which exhaustively   incorporates   the   functions   of   the   Board.   This Court came to the conclusion that fixing conditions of service of 8 C.A.Nos.6622-6623 of 2022 etc. its   employees   does   not   constitute   a   function   of   the   Board. Therefore,   this   Court   held   that   the   State   Government   had   no power to issue the directions contained in its orders dated 13 th September 2005 and 12 th   July 2007. This Court also held that clause (f) of sub­section (1) of Section 95 of the 1965 Act vests a power   in   the   Board   to   make   Regulations   for   determining conditions   of   service   of   its   officers   and   servants.   It   was   held that the new pension scheme has been framed by the Board in the   exercise   of   power   under   clause   (f)   of   sub­section   (1)   of Section 95. While dismissing the Special Leave Petition filed by the   State   Government,   this   Court   referred   to   the   notification dated   19 th   May   2009   of   the   Board   issued   in   the   exercise   of power   under   clause   (f)   of   sub­section   (1)   of   Section   95   of   the 1965   Act.   This   Court   while   dismissing   the   appeal   preferred   by the State Government directed that all the eligible employees of the   Board   will   be   governed   by   the   said   notification   dated   19 th May 2009. This Court directed the Board to release pensionary benefits to retired employees governed by the notification dated 19 th   May  2009 within a period of three months.   Paragraph 21 9 C.A.Nos.6622-6623 of 2022 etc. of the decision containing the directions issued by this Court is reproduced below:­  “ 21.   It   is   also   necessary   for   us   to   determine   the consequence   of   the   State   of   Uttar   Pradesh,   having approached   this   Court,   to   assail   the   impugned judgment   dated   16­1­2009   [ Preetam   Singh   v.   State of   U.P. ,   2009   SCC   OnLine   All   33   :   (2009)   2   All   LJ 702]   .   This   Court   having   entertained   the petition   filed   by   the   appellant,   passed   interim directions on 7­8­2012 [ State of U.P.   v.   Preetam Singh ,   IA   No.   7   in   Civil   Appeal   No.   6307   of 2010, order dated 7­8­2012 (SC), wherein it was directed:“Taken on board. There shall be stay of the   order   passed   in   Writ   Petition   No.   1433   of 2011   dated   24­7­2012.   IA   No.   7   is   disposed   of. Registry   is   directed   to   list   IA   No.   4   on   27­8­ 2012, if it is in order.”] , which had the effect of staying   the   implementation   of   the   directions issued   by   the   High   Court,   namely,   of   staying the   implementation   of   the   Notification   dated 19­5­2009. As a result, the employees governed by   the   Notification   dated   19­5­2009 ,   were   paid their retiral dues under the Contributory Provident Fund   Scheme.   Since   we   have   now   affirmed   the impugned judgment of the High Court, dated 16­1­ 2009   [ Preetam   Singh   v.   State   of   U.P. ,   2009   SCC OnLine All 33 : (2009) 2 All LJ 702] , it is apparent that all the eligible employees of the Vikas Parishad will   be   governed   by   the   Notification   dated   19­5­ 2009.   They   will   therefore   be   entitled   to   the pensionary   benefits   from   the   date   of   their retirement.   Undoubtedly,   they   have   been   denied the   said   retiral   benefits,   consequent   upon   the interim   orders   passed   by   this   Court,   at   the 10 C.A.Nos.6622-6623 of 2022 etc. behest   of   the   State   of   Uttar   Pradesh.   In   the above   view   of   the   matter,   we   direct   the   Vikas Parishad   to   release   the   pensionary   benefits   to the   retired   employees   governed   by   the Notification   dated   19­5­2009,   within   three months   from   today.   While   determining   the pensionary   benefits   payable   to   the   eligible retired employees up to date, if it is found that any   of   the   retired   employees   is   entitled   to financial   dues   in   excess   of   those   already   paid under   the   Contributory   Provident   Fund Scheme,   the   said   employee(s)   will   be   paid interest   on   the   said   amount   @   9%   p.a.     The burden  of the  aforesaid interest component  on  the differential amount will be discharged by the Vikas Parishad   in   the   first   instance.   The   same   shall, however,   be   recovered   from   the   State   of   Uttar Pradesh,   who   is   solely   responsible   for   the   interest ordered to be paid to the employees concerned.” (emphasis added)      9. On 16 th  October 2009, the State Government issued an order sanctioning   revised   pay   structure,   pay   band,   and   grade   pay   to different   categories   of   employees   working   in   public   enterprises/ corporations.     The   revised   pay   structure   was   incorporated   in   the annexure   to   the   said   order.     The   Government   Order   stated   that necessary   action   shall   be   taken   by   the   public   enterprises/ corporations   in   consultation   with   the   Public   Enterprises 11 C.A.Nos.6622-6623 of 2022 etc. Department/   Finance   Department.     It   is   also   provided   in   the Government   Order   that   the   execution   of   the   Government   Order shall   be   made   only   after   a   proposal   to   that   effect   is   approved   by the   Board   of   Directors   of   the   Public   Sector   Enterprises.     On   30 th November   2009,   the   Housing   Commissioner   of   the   Board addressed a letter to the State Government for communicating the proposal   of   the   Board   to   apply   the   revised   pay   structure   to   its employees.   In   response,   on   14 th   Janua ry   2010,   the   State Government   issued   a   communication   permitting   the   Board   to grant the revised pay structure according to the recommendations of the 7 th  Report of the U.P Pay Committee, 2008 to its employees. The   State   Government   permitted   the   Board   to   grant   the   revised pay   structure   to   its   employees   as   provided   in   the   aforesaid Government   Order   dated   16 th   October   2009.     The   said   order   was issued   on   the   basis   of   the   recommendations   of   the   Empowered Committee.     However,   it   was   stated   in   that   communication   that the benefit shall be calculated on a notional basis with effect from 1 st   January 2006 in the pay band and grade pay  as per  the table annexed   to   the   Government   Order   dated   16 th   October   2009.   It 12 C.A.Nos.6622-6623 of 2022 etc. provided that the actual benefit shall be provided with immediate effect i.e. from 14 th   January 2010.   In short, the employees of the Board   were   not   entitled   to   arrears   of   pay   as   per   the   revised   pay structure with effect from 1 st  January 2006.  They were entitled to revised pay scales only on a notional basis from 1 st   January 2006 and to the actual benefits only from 14 th  January 2010.  Based on the said communication, an Office Order was issued by the Board on 23 rd  January 2010 for giving effect to the communication dated 14 th  January 2010.  In fact, another Government Order was issued on   15 th   September   2011   stating   that   in   terms   of   the   order   dated 14 th   January   2010,   pay   scales   of  the   employees   of   the   Board   will be   notionally   revised   with   effect   from   1 st   January   2006   but   the actual   benefits   shall   be   extended   only   from   14 th   January   2010. The   said   Government   Order   reiterates   that   the   employees   of   the Board will not be entitled to benefit of the revised pay structure for the period of 1 st  January 2006 to 13 th  January 2010.   10. The State Government issued another  order  dated 05 th   May 2015   to   the   Board   communicating   the   decision   of   the   Hon’ble Governor   to   grant   pensionary   benefits   to   the   employees   of   the 13 C.A.Nos.6622-6623 of 2022 etc. Board   in   terms   of   the   new   pension   scheme   with   retrospective effect   from   1 st   January   2006.   The   decision   of   the   State Government,   inter   alia,   provided   that   the   employees   who   were employed on  or   before 31 st   March  2005 and who  had not  retired till   date   shall   be   granted   pension.     It   further   provided   that   the employees who had already retired and had taken benefits under the old pension scheme will not be entitled to get a pension under the   new   pension   scheme.     The   Government   directed   that   the employees   of   the   Board   who   have   been   employed   on   or   after   1 st April 2005 will not be entitled to grant of pension.  In terms of the Government   Order   of   05 th   May   2015,   the   Board   issued   Office Order dated 13 th  May 2015. 11. There   were   two   sets   of   writ   petitions   filed   before   the Allahabad High Court.   The first one was Writ Petition No.12645 of   2016   filed   by   certain   employees   of   the   Board.     The   following prayers were made in the petition : “(i) to issue a writ, order or direction in the nature of Mandamus   commanding   the   respondents   to   re­ determine   the   salary   of   the   petitioners   till   their retirement   and   thereafter   their   pensionary   benefits 14 C.A.Nos.6622-6623 of 2022 etc. on   the   basis   of   Sixth   Pay   Commission Recommendation w.e.f.1.1.2006. (ii) to issue a writ, order or direction in the nature of Mandamus   commanding   the   respondents   to   apply the   provisions   of   the   Government   Order   No.1508 dated 8.12.2008 on the officers of the Parishad, while suitably   reading   down   the   restrictive   provisions about   its   non­application   on   the   employees   of   the U.P.   Awas   Evam   Vikas   Parishad   in   view   of   the Pension   Regulations   dated   19.5.2009   read   with judgment and order of the Hon’ble Apex Court dated 23.9.2014. (iii) to issue a writ, order or direction in the nature of mandamus   commanding   the   respondents   to   re­ determine/re­fix the salary of the petitioners in terms of   Sixth   Pay   Commission   Recommendation   w.e.f. 1.1.2006   till   their   retirement   and   thereafter   re­ determine   their   pensionary   benefits   as   per   revised last pay drawn and pay arrears of salary and revised pensionary benefits from the date of their retirement till   date,   in   accordance   with   G.O.   dated   8.12.2008, after   deducting   the   amounts   already   paid   towards pensionary benefits of the petitioners, within a period of 2 months.  (iv) to issue a writ, order or direction in the nature of Mandamus   commanding   the   respondents   to   grant the   benefit   of   maximum   gratuity   of   Rs.10   lac   to   the petitioners   as   per   Government   Order   dated 8.12.2008. (v) to issue a writ, order or direction in the nature of Mandamus   commanding   the   respondents   to   pay arrears of  salary   & pensionary  benefits calculated  in terms of the Sixth Pay Commission Recommendation, including  enhanced  gratuity  of  Rs.10  lac,  along  with 15 C.A.Nos.6622-6623 of 2022 etc. payment   of   interest   at   the   prevailing   Bank   rates, within a period of 2 months. (vi) to   issue   an   ad­interim   mandamus   to   the respondent authorities to pay the current pension of the   petitioners   in   terms   of   Sixth   Pay   Commission Recommendation.”   Writ   Petition   No.10355   of   2017   was   filed   by   another   set   of employees  of  the  Board  for   challenging   the   order   dated  05 th   May 2015   passed   by   the   State   Government   and   the   consequential order dated 13 th  May 2015 passed by the Board. 12. By the impugned judgment, the aforesaid two petitions were disposed   of.     While   disposing   of   the   petitions,   in   paragraph   41, the following directions were issued : “41.   Accordingly,   both   the   writ   petitions   are allowed   and   the   impugned   orders   dated 05.05.2015   and   13.05.2015   contained   in Annexure   No.1   and   2   to   the   Writ   Petition o.126345   (S/B)   of   2017   are   quashed   to   the extent  they  are  contrary  to   the  judgment  passed by the Hon’ble Apex Court in the case of State of U.P. vs. Preetam Singh and others : Civil Appeal No.6307 of 2010.   A mandamus is issued to the respondents   to   grant   benefit   of   arrears   of salary   payable   to   the   employees   of   Parishad w.e.f. 1.1.2006 to 13.01.2010 and to fix their pension/   family   pension   and   also   release gratuity   in   accordance   with   the   provisions   of 16 C.A.Nos.6622-6623 of 2022 etc. U.P.   Avas   Evam   Vikas   Parishad   Regulations notified on 19 th  May, 2009, and in the light of the   orders   of   the   Hon’ble   Supreme   Court   in Civil Appeal No.6307 of 2010 from the date of their entitlement alongwith interest @ 9% per annum   within   a   period   of   two   months   from the date of production of certified copy of this order,   failing   which   the   petitioners   shall   be entitled   and   paid   interest   at   the   rate   of   12% per annum. ” (emphasis added) THE ORDER OF REFERENCE TO A LARGER BENCH 13. Now, we come to the order dated 10 th  February 2020 passed by this Court.  A Bench of two Hon’ble Judges of this Court  prima facie   found   that   the   functions   of   the   Board   contemplated   under Section 15 of the 1965 Act were wide enough even to cover the act of fixing service conditions of its employees. In paragraph 43, this Court framed three questions for consideration of a larger Bench. Paragraph 43 of the said order reads thus: “43. Due to the above reasons we are of the view that  with  regard to  three aspects i.e.  (1),  (2) and (3) as 42 noted above,  the judgment  in   Preetam Singh’s   case   needs   reconsideration.   We formulate following questions to be considered by a larger Bench:  17 C.A.Nos.6622-6623 of 2022 etc. (1)   Whether   the   judgment   of   this   Court   in Preetam   Singh’s   case   laying   down   that conditions of service of officers and employees do not   constitute   the   functions   of   the   U.P.   Avas Evam   Vikas   Parishad   lays   down   the   correct   law more   so   when   the   judgment   does   not   refer   to provisions of Sections 8, 92, 94(2)(nn)of the 1965 Act ?  (2)   Whether   the   view   expressed   in   Preetam Singh’s  judgment that functions of the U.P. Avas Evam   Vikas   Parishad   are   only   the   specific functions   enumerated   in   Section   15   of   1965   Act which   does   not   include   the   service   conditions   of employees of the Board lays down the correct law ? Whereas the functions of the Board referred to in other provisions of Act, Rules and Regulations as   has   been   expressly   provided   in   Section   15(1) by use of expression “subject to the provisions of this   Act   and   the   Rules   and   Regulations”   shall also   be   functions   of   the   Board   which   induces service   conditions   of   officers   and   employees   as per Section 95(1)(f) of the 1965 Act.  (3)   Whether   the   State   Government   had   no jurisdiction   to   issue   directions   regarding   service conditions   of   officers   and   employees   of   the   U.P. Avas   Evam   Vikas   Parishad   under   the   provisions of   the   1965   Act   and   1975   Act   and   all   other enabling powers with the State Government? SUBMISSIONS OF THE STATE  GOVERNMENT AND THE BOARD 14. Ms.   Aishwarya   Bhati,   the   learned   Additional   Solicitor General   appearing   for   the   State   Government   urged   that   the 18 C.A.Nos.6622-6623 of 2022 etc. statutory   functions   of   the   Board   include   the   function   of   fixing terms   and   conditions   of   the   employment   of   its   employees.   She placed   reliance   on   Section   92   of   the   1965   Act   which   confers   a power   on   the   State   Government   to   issue   directions   to   the   Board for carrying out the purposes of the 1965 Act.   She urged that it is  the   duty   of  the   Board  to   comply   with   the  directions   issued  by the   State   Government.   It   was   further   submitted   that   apart   from Section 2(1) of the 1975 Act, there was sufficient power vesting in the State Government under Section 8 of the Section 1965 Act to control and put restrictions on the powers of the Board to appoint officers and employees. The learned ASG invited our attention to the notification dated 19 th   May 2009 by which the Board applied the new pension scheme to the employees who retired on or after 1 st   January 1996. She pointed out that in the said notification, it is   specifically   directed   that   the   orders   with   respect   to pension/family pension/gratuity issued by the State Government from   time   to   time   shall   also   be   applicable   to   the   officers   and employees of the Board. She pointed out that the said notification was   never   challenged.   She   would,   therefore,   submit   that   the 19 C.A.Nos.6622-6623 of 2022 etc. directions   of   the   State   Government   impugned   by   the   private respondents cannot be faulted. After inviting our attention to the interim order dated 7 th  September 2012 passed by this Court, the learned   ASG   submitted   that   those   who   have   unconditionally opted   for   the   old   pension   scheme   prior   to   7 th   September   2012 have no subsisting right to claim the pension in terms of the new pension   scheme.   She   submitted   that   the   employees   are   not entitled   to   salary   as   per   the   revised   pay   structure   for   the   period between   1 st   January   2006   to   13 th   January   2010   as   per   the binding   directions   of   the   State   Government.     The   learned   senior counsel representing the Board also made similar submissions.  THE SUBMISSIONS OF THE PRIVATE RESPONDENTS 15. The   learned   counsel   appearing   for   the   respondents   in   Civil Appeal Nos.6624 and 6625 of 2022 also made legal submissions. We   may   note   here   that   while   reserving   the   judgment   on   15 th September 2022, we had detagged the said appeals. Nevertheless, we   are   also   considering   the   submissions   made   by   the respondents   in   the   detagged   appeals   as   regards   the   three questions of law that are required to be decided. The submission 20 C.A.Nos.6622-6623 of 2022 etc. of   the   learned   counsel   is   that   as   several   employees   were   facing financial hardships after their retirement, they had no option but to   give   the   undertakings   to   accept   the   old   pension   scheme   and not   opt   for   the   new   pension   scheme.   Considering   this   situation, this Court by an interim order passed in   Preetam Singh’s case 1 had directed that even if employees have taken benefit of the old pension scheme by giving an undertaking, they will be entitled to the benefit of the new pension scheme in terms of the notification dated 19 th  May 2009. The learned counsel invited our attention to the   subsequent   order   dated   5 th   May   2015   passed   by   the   State Government by which the benefit of the new pension scheme was denied to those who opted to join the employment of the Board on or   after   1 st   April   2005.   His   submission   is   that   this   direction   is discriminatory   which   creates   two   classes   of   pensioners   without any rational basis. He relied upon a decision of this Court in the case of  D.S. Nakara & Ors. v. Union of India 2  as well as another decision in the case of  V. Sukumaran v. State of Kerala & Anr. 3 . 2 1983 (1) SCC 305 3 2020 (8) SCC 106 21 C.A.Nos.6622-6623 of 2022 etc. He   would,   therefore,   submit   that   reconsideration   of   the   view taken in  Preetam Singh’s case 1  is not at all warranted. 16. Shri   Nidhesh   Gupta,   the   learned   senior   counsel   stated   that he represents only those respondents who had never opted for the old   pension   scheme   and   had   not   received   any   amount   under   the old scheme. He submitted  that  under  clause (f)  of sub­section  (1) of   Section   95   of   the   1965   Act,   the   Board   has   a   power   to   make Regulations   providing   for   conditions   of   service   of   officers   and servants of the Board.   Inviting our attention to sub­section (2) of Section   95   of   the   1965   Act,   Shri   Gupta   would   submit   that   only when   any   Regulation   framed   by   the   Board   is   repugnant   to   the Rules framed by the State in the exercise of powers under Section 94, the Rules will prevail. He submitted that admittedly the State Government   has   not   exercised   the   Rule   making   power   under Section   94.   He   urged   that   under   clause   (nn)   of   sub­section   (2)   of Section   94,   the   State   Government   has   a   power   to   frame   Rules concerning any matter for which Regulations can be framed under Section   95.     He   submitted   that   it   is   well   settled   that   when   an enactment   requires   that   a   certain   thing   should   be   done   in   a 22 C.A.Nos.6622-6623 of 2022 etc. certain way, the thing must be done in that way or not at all.   He relied upon various  decisions  in  this  behalf,  viz.,   A.R.   Antulay   v. Ramdas   Sriniwas   Nayak   &   Anr. 4 ;   Dhananjaya   Reddy   etc.   v. State   of   Karnataka 5 ;   and   Gujarat   Urja   Vikas   Nigam   Ltd.   v. Essar Power Ltd. 6 . 17. Inviting   our   attention   to   Section   2(1)   of   the   1975   Act,   he submitted   that   the   power   conferred   by   the   said   provision   on   the State   Government   to   issue   directions   is   a   general   power.   This power is confined to issuing directions on questions of policies. He submitted  that  the  said  power  can  be  exercised in  relation  to  the discharge of functions of the Board.   He urged that  Section 15 of Chapter III of the 1965 Act lays down the functions of the Board. He   pointed   out   that   Chapter   III   requires   the   Board   to   frame various   schemes.     He   urged   that   none   of   the   clauses   (a)   to   (p)   of Section   15   lays   down   that   the   appointment   of   employees   and fixing their service conditions is a function of the Board under the 1965   Act.     He   urged   that   in   the   exercise   of   power   under   Section 4 (1984) 2 SCC 500 5 (2001) 4 SCC 9 6 (2008) 4 SCC 755 23 C.A.Nos.6622-6623 of 2022 etc. 2(1)   of   the   1975   Act,   directions   cannot   be   issued   regarding   the service conditions of officers and employees of the Board. 18. By referring to Section 7 of the 1965 Act, he submitted that sub­section   (2)   thereof   clearly   provides   that   the   conditions   of service   of   the   Housing   Commissioner   shall   be   such   as   may   be prescribed.  Relying upon the definition of the word ‘prescribed’ in clause (n) of Section 2, he submitted that the conditions of service of   the   Housing   Commissioner   have   to   be   prescribed   by   the   State Government   by   exercising   the   Rule   making   power.     However, Section   8   which   provides   for   the   appointment   of   officers   and servants   of   the   Board   does   not   contain   such   a   provision.     He submitted   that   the   special   or   general   orders   of   the   State Government   contemplated   by   sub­section   (1)   of   Section   8   can   be issued only regarding the mode and manner of appointment of the officers   and   servants   of   the   Board   and   the   same   have   nothing   to do with service conditions.  The power of the State Government to issue general or special orders is only for the purpose of imposing control   and   restrictions   on   the   appointment   of   the   officers   and servants   of   the   Board.     Therefore,   sub­section   (1)   of   Section   8 24 C.A.Nos.6622-6623 of 2022 etc. cannot   be   construed   to   mean   that   by   issuing   general   or   special orders,   the   State   Government   can   determine   the   conditions   of service   of   the   officers   and   servants   of   the   Board.     He   submitted that as two different expressions have been used in Sections 7 and 8   of   the   1965   Act,   different   meanings   will   have   to   be   assigned   to the   said   different   expressions.   On   this   issue,   he   relied   upon   a decision of this Court in the case of  DLF Qutab Enclave Complex Educational Charitable Trust  v.  State of Haryana 7 . 19. He urged that the power under sub­section (2) of Section 92 can   be   exercised   by   the   State   Government   by   issuing   directions that are necessary for  carrying  out the purposes of the 1965 Act. He   submitted   that   in   any   event,   in   the   present   case,   statutory Regulations have been framed by the Board dealing with the grant of pensionary benefits. 20. He   submitted   that   the   power   to   issue   directions   under Section   2(1)   of   the   1975   Act   is   a   general   power   and   the   power under   Sections   8   and   92   of   the   1965   Act   is   a   specific   or   special power.     Relying   upon   a   decision   of   this   Court   in   the   case   of 7 (2003) 5 SCC 622 25 C.A.Nos.6622-6623 of 2022 etc. Commercial   Tax   Officer,   Rajasthan   v.   Binani   Cements   Ltd.   & Anr. 8 ,   he   urged   that   the   specific   provisions   under   the   1965   Act will   prevail   over   the   general   provision   under   Section   2(1)   of   the 1975 Act.   21. He   relied   upon   a   decision   of   this   Court   in   the   case   of Harwindra   Kumar   v.   Chief   Engineer,   Karmik   &   Ors. 9 .     He submitted   that   executive   order   cannot   override   the   exercise   of power   made   by  the  Board  by   framing  Regulations   concerning   the new  Pension   Scheme.  He  submitted  that  if  the  submission   of  the State Government that by issuing executive orders it can override the   provisions   of   the   Regulations   framed   under   Section   95   of   the 1965 Act is accepted, the entire scheme of Sections 94 and 95 of the 1965 Act will be rendered completely redundant. Relying upon a   decision   of   this   Court   in   the   case   of   Institute   of   Chartered Accountants   of   India   v.   Price   Waterhouse   &   Anr. 10 ,   he   would submit that such an interpretation cannot be accepted. 22. He pointed out that if the pension is not granted on the basis of revised pay scales, the very purpose of the grant of pension will 8 (2014) 8 SCC 319 9 (2005) 13 SCC 300 10 (1997) 6 SCC 312 26 C.A.Nos.6622-6623 of 2022 etc. be defeated.   He submitted that employees cannot be divided into two classes – one of those who retired pre­1996 and others of who retired post­1996.  He submitted that there was no justification for the   Bureau   of   Public   Enterprises   for   writing   a   letter   dated   14 th January   2010   conferring   the   benefit   of   the   revised   pension   not from 1 st  January 2006 but from 14 th  January 2010.  He submitted that no explanation has been offered either before the High Court or   this   Court   for   fixing   the   date   of   14 th   January   2010.     He   relied upon a decision of this Court in the case of  State of Rajasthan & Anr.  v.  Prem Raj 11 . 23. He   pointed   out   that   the   benefit   of   the   revised   pension   was given   by   the   State   Government   to   the   employees   of   U.P   Power Corporation with effect from  1 st   January  2006.   To the employees of U.P Jal Nigam, the benefit of the revised pension was given only from   12 th   April   2010.     The   employees   of   Jal   Nigam   filed   a   writ petition before the High Court which was allowed by holding  that the   employees   were   entitled   to   get   the   benefit   of   the   revised pension   from   1 st   January   2006.     The   said   decision   has   become 11 (1997) 10 SCC 317 27 C.A.Nos.6622-6623 of 2022 etc. final   as   a   Special   Leave   Petition   filed   by   the   State   Government against the said order has been dismissed on 20 th   May 2022.   He submitted   that   the   Board   has   adequate   resources   to   bear   the burden of payment of revised pension from 1 st  January 2006.  His submission is that the law laid down by this Court in the case of Preetam Singh’s case 1  does not call for any reconsideration at all. CONSIDERATION OF THE QUESTIONS FRAMED 24. The three questions framed under Order dated 10 th  February 2020   are   inter­connected.   For   deciding   these   three   questions,   we will   have   to   decide   the   core   issues   whether   the   functions   of   the Board are confined to those which are set out in Section 15 of the 1965 Act  and  whether  the appointment of  officers and employees of   the   Board   and   the   determination   of   their   conditions   of   service constitute  the functions of the Board.   Another  question that  will have to be addressed is as regards the power, if any, of the State Government   to   issue   directions   to   the   Board   concerning   the determination   of   the   conditions   of   service   of   its   officers   and servants.  28 C.A.Nos.6622-6623 of 2022 etc. POWER   TO   DETERMINE   THE CONDITIONS   OF   SERVICE   OF   THE OFFICERS   AND   SERVANTS   OF   THE BOARD 25. We have perused the provisions of the 1965 Act.   Chapter II thereof has the heading, “Establishment and conduct of business of the Board”.   Chapter II consists of Sections 3 to 14.   Section 3 provides for the constitution of the Board.   Section 7 provides for the   appointment   of   a   Housing   Commissioner.     Section   7   reads thus : “ 7. Provisions relating to Housing Commissioner. ­ (1) There shall be a Housing Commissioner appointed by the State Government for the purposes of this Act. (2)   The   conditions   of   service   of   the   Housing Commissioner shall be such as may be prescribed. He shall be remunerated from the Board’s fund. (3) The State Government may, if it is of opinion that special   circumstances   so   require,   appoint   the Housing   Commissioner   to   be   the   Adhyaksh   in addition to his own duties. (4)   The   State   Government   may   also   appoint   the Housing   Commissioner   as   an   authority   under   any other law for the time being in force.”                           (emphasis added) 29 C.A.Nos.6622-6623 of 2022 etc. Section   8   deals   with   “Appointment   of   Officers   and   Servants”. Section 8 reads thus : “ 8.   Appointment   of   officers   and   servants. ­(1) Subject   to   such   control   and   restrictions   as   may from   time   to   time   be   imposed   by   the   State Government,   by   special   or   general   orders,   the Board   may   appoint   such   officers   and   servants   as it   considers   necessary   for   the   efficient performance of its functions. (2) the Board may, with the previous approval of the State Government appoint a servant of the Central or the   State   Government   or   of   a   local   authority   on   any of the posts under it on such terms and conditions as may be agreed upon.”                          (emphasis added) As   provided   in   sub­section   (1)   of   Section   7,   the   Housing Commissioner has to be appointed by the State Government. Sub­ section   (2)   of   Section   7   provides   that   the   conditions   of   service   of the   Housing   Commissioner   must   be   prescribed   by   the   Rules. Rule­making   power   under   Section   94   vests   with   the   State Government.  Clause (b) of sub­section (2) of Section 94 empowers the   State   Government   to   frame   Rules   determining   the   conditions of   service   of   the   Housing   Commissioner.     The   obvious   reason   for conferring   the   power   to   determine   service   conditions   of   the 30 C.A.Nos.6622-6623 of 2022 etc. Housing   Commissioner   on   the   State   Government   appears   to   be that the State Government is the appointing authority. 26.   In   contrast,   sub­section   (1)   of   Section   8   provides   that subject   to   control   and   restrictions   imposed   from   time   to   time   by the State Government by special or general orders, the Board may appoint   such   officers   and   servants   as   it   considers   necessary   for the   efficient   performance   of   its   functions.   There   is   a   marked distinction   between   the   language   used   by   sub­section   (2)   of Section 7 and sub­section (1) of Section 8 though both provisions deal   with   the   power   to   appoint   officers   of   the   Board.   Thus,   two different expressions  or  terminologies have been used in  Sections 7   and   8.   Therefore,   the   legislature   intended   to   convey   different meanings.   Sub­section   (1)   of   Section   8   does   not   provide   that   the State   Government   shall   have   the   power   to   determine   the conditions   of   service   of   officers   and   employees   of   the   Board.   The power to control the appointment and the power to put restrictions are distinct and different from the power to determine the service conditions of the officers and servants of the Board.  The control of the   State   Government   and   the   power   to   impose   restrictions   as 31 C.A.Nos.6622-6623 of 2022 etc. provided in sub­section (1) of Section 8 will extend to the creation of posts of officers and servants  of the Board. The control  can be exercised by directing the creation of different categories of posts. The   control   can   be   also   exercised   by   determining   the   number   of posts of different categories.  In this context, Sections 94 and 95 of the   1965   Act   are   also   relevant.     Under   sub­section   (1)   of   Section 94,  the State Government  retains the  general  Rule making   power of framing Rules for carrying out the purposes of the Act.  Without prejudice to the generality of the power under sub­section (1), sub­ section   (2)   of   Section   95   lays   down   the   topics   and   subjects   on which   Rule­making   power   can   be   exercised.     One   of   the   specific powers conferred by clause (b) of sub­section (2) of Section 94 on the   State   Government,  as   pointed   out   earlier,   is  of   framing   Rules for   laying   down   conditions   of   service   of   the   Housing Commissioner.   Clause (nn) of sub­section (2) of Section 94 reads thus : “94. Power to make Rules.­ (1) … … … … (2)   In   particular   and   without   prejudice   to   the generality   of   the   foregoing   power,   such   rules   may provide for­  … … … …  32 C.A.Nos.6622-6623 of 2022 etc. … … … … (nn) any matter for which regulation may be made by the Board under Section 95; … … … …” Thus, clause (nn) of sub­section (2) of Section 94 confers power on the State Government to frame Rules in respect of any matter for which regulations can be framed by the Board.   Section 95 which confers the powers on the Board to frame Regulations reads thus : “ 95. Power to make regulations.­ (1) The Board may, by   notification   in   the   Gazette ,   make   regulations providing for –  (a) ……………………………………………………; (b) ……………………………………………………; (c) ……………………………………………………; (d) ……………………………………………………; (e) the duties of officers and servants of the Board; (f) the   conditions   of   service   of   officers   and servants of the Board; (g) …………………………………………………….; (h) …………………………………………………….; (i) …………………………………………………….; (j) …………………………………………………….; (k) ……………………………………………………; (l) ……………………………………………………; (m) ……………………………………………………; (n) any   other   matter   which   is   to   be   or   may   be provided for by regulations under this Act or the rules.”                      (emphasis added) 33 C.A.Nos.6622-6623 of 2022 etc. Clause   (f)   of   sub­section   (1)   of   Section   95   specifically   empowers the  Board to frame  Regulations governing  conditions  of  service  of officers and servants of the Board. Under clause (b) of sub­section (2) of Section 94, the State Government has a power to determine the conditions of service of the Housing Commissioner.  Thus, the Legislature   has   specifically   incorporated   in   Section   7   that   the State   Government   shall   have   the   power   to   determine   the conditions of service of the Housing Commissioner. However, such a provision  is conspicuously   absent in  Section  8  dealing  with  the appointment   of   servants   and   officers   of   the   Board.   The   reason   is that   the   power   to   determine   the   service   conditions   of   the   other officers and servants has been conferred on the Board which can be exercised by making Regulations. 27. In view of sub­section (2) of Section 95 read with clause (nn) of sub­section (2) of Section 94, Regulations, if any, framed by the Board for determining the conditions of services of its officers and servants are always subject to the Rules which may be framed by the State Government by exercising the power under clause (nn) of sub­section (1) of Section 94. Whenever there is any inconsistency 34 C.A.Nos.6622-6623 of 2022 etc. between the Regulations framed under clause (f) of sub­section (1) of   Section   95   and   the   Rules   framed   under   clause   (nn)   of   sub­ section (1) of Section 94, the Rules will prevail and to that extent, the provisions of the Regulations which are repugnant to the Rules shall   be   void.     To   put   it   differently,   the   power   to   determine   the conditions   of   service   of   the   officers   (except   the   Housing Commissioner) and servants of the Board vests in the Board, and the   said   power   can   be   exercised   only   by   framing   Regulations under clause (f) of sub­section (1) of Section 95.  So long as Rules are not framed by the State Government under clause (nn) of sub­ section   (1)   of   Section   95   for   overriding   the   provisions   of   the Regulations   framed   by   the   Board   for   prescribing   the   service conditions,   the   provisions   of   Regulations   shall   always   govern   the field.     Except   for   the   exercise   of   the   Rule   making   power   under clause   (nn)   of   sub­section   (1)   of   Section   94,   there   is   no   specific power conferred under the 1965 Act, or for that matter under the 1975   Act,   on   the   State   Government   to   nullify   or   to   override   the conditions of service of its officers and servants determined by the 35 C.A.Nos.6622-6623 of 2022 etc. Board  by  the Regulations  framed in  the  exercise of  powers  under clause (f) of sub­section (1) of Section 95. FUNCTIONS OF THE BOARD 28. Now   coming   to   the   issue   of   the   functions   of   the   Board,   we may   note   that   Chapter   III   of   the   1965   Act   has   the   heading “Functions   and   Powers   of   the   Board”.     As   noted   earlier,   specific provisions   regarding   the   appointment   of   the   Housing Commissioner,   officers   and   servants   of   the   Board   find   a   place   in Chapter   II   and   not   in   Chapter   III.     As   specifically   provided   in clause   (1)   of   Section   8,   the   Board   is   empowered   to   appoint   such officers   and   servants   as   it   considers   necessary   for   the   efficient performance of its functions. This is one factor that suggests that the   appointment   of   officers   and   servants   is   not   a   function   of   the Board   but   their   appointments   are   required   to   be   made   for   the efficient performance of its functions.  29. Chapter III dealing with “Functions and Powers of the Board” comprises   of   Sections   15   to   49.     Section   15   has   the   heading “Functions of the Board” which reads thus : 36 C.A.Nos.6622-6623 of 2022 etc. “ 15.   Functions   of   the   Board. ­(1)   Subject   to   the provisions of this Act and the rules and regulations, the functions of the Board shall be­  (a) to   frame   and   execute   housing   and   improvement schemes and other projects; (b) to plan and co­ordinate various housing activities in   the   State   and   to   ensure   expeditious   and efficient   implementation   of   housing   and improvement schemes in the State; (c) to   provide   technical   advice   for   and   scrutinise various projects under housing and improvement schemes   sponsored   or   assisted   by   Central Government or the State Government; (d) to   assume   management   of   such   immovable properties  belonging  to  the  State  Government  as may   be   transferred   or   entrusted   to   it   for   this purpose; (e) to   maintain,   use,   allot,   lease,   or   otherwise transfer   plots,   buildings   and   other   properties   of the   Board   or   of   the   State   Government   placed under the control and management of the Board; (f) to organise and run workshops and stores for the manufacture   and   stock­piling   of   building materials; (g) on  such  terms  and  conditions  as  may  be  agreed upon   between   the   Board   and   the   State Government, to declare houses constructed by it in execution of any scheme to be houses subject to the U.P. Industrial Housing Act, 1955 (U.P. Act No.XXIII of 1955); (h) to regulate building operations; (i) to improve and clear slums; (j) to   provide   roads,   electricity,   sanitation,   water­ supply   and   other   civic   amenities   and   essential services in areas developed by it; (k) to acquire movable and immovable properties for any of the purposes before mentioned; 37 C.A.Nos.6622-6623 of 2022 etc. (l) to   raise   loans   from   the   market,   to   obtain   grants and   loans   from   the   State   Government,   the Central   Government,   local   authorities   and   other public corporations, and to give grants and loans to   local   authorities,   other   public   corporations, housing co­operative societies and other persons for any of the purposes before mentioned; (m) to   make   investigation,   examination   or   survey   of any   property   or   contribute   towards   the   cost   of any   such   investigation,   examination   or   survey made   by   any   local   authority   or   the   State Government; (n) to levy betterment fees; (o) to fulfil any other obligation imposed by or under this   Act   or   any   other   law   for   the   time   being   in force; and (p) to   do   all   such   other   acts   and   things   as   may   be necessary   for   the   discharge   of   the   functions before mentioned. (2)   Subject   to   the   provisions   of   this   Act   and   the   rules and regulations, Board may undertake, where it deems necessary, any of the following functions, namely­ (a) to   promote   research   for   the   purpose   of expediting   the   construction   of   and   reducing   the cost of buildings;  (b) to execute works in the State on behalf of public institutions   local   authorities   and   other   public corporations,   and   departments   of   the   Central Government and the State Government; (c) to supply and sell building materials; (d) to   co­ordinate,   simplify   and   standardise   the production   of   building   materials   and   to encourage   and   organise   the   prefabrication   and mass production of structural components; (e) with   a   view   to   facilitating   the   movement   of   the population in and around any city, municipality, 38 C.A.Nos.6622-6623 of 2022 etc. town area or notified area to establish, maintain and operate any  transport service; to  construct, widen   strengthen   or   otherwise   improve   roads and   bridges   and   to   give   financial   help   to   others for such purposes; (f) to   do   all   such   other   acts   and   things   as   may   be necessary   for   the   discharge   of   the   functions before mentioned.” As the appointments of officers and servants of the Board are dealt with   by   Sections   7   and   8   in   Chapter   II,   the   same   do   not   find   a place in the functions of the Board set out either in Section 15 or in   any   other   Section   in   Chapter   III.   There   are   provisions incorporated in Chapter  III  dealing  with various schemes and the powers of the Board which can be exercised for the implementing the schemes. 30. Chapter V of the 1965 Act provides for the Board of acquiring and disposing of land for the purposes of the Act.   Under Section 59,   the   Board   is   empowered   to   issue   debentures.   Under   Section 58(3),   the   Board   is   entitled   to   raise   loans   for   the   purposes   of   the Act.   Obviously,   acquiring   and   selling   the   property,   issuing debentures,   and   raising   loans   cannot   be   the   functions   of   the Board. These powers have been conferred by Chapter V to enable 39 C.A.Nos.6622-6623 of 2022 etc. the Board to effectively  discharge its functions and to exercise its powers   specified   in   Chapter   III.   The   nature   of   the   functions   of   a statutory  body  like the Board will always depend on  the  object of establishing   such   a   body.   The   appointment   of   officers   and servants   needs   to   be   made   for   the   efficient   performance   of   the specific functions of the Board.     The exercise of power to appoint servants   and   officers   of   the   Board   and   determination   of   their service   conditions   cannot   constitute   the   functions   of   the   Board. The powers under Chapter V and the power of appointing officers and   servants   under   Sections   7   and   8   of   Chapter   II   need   to   be exercised   for   ensuring   proper   discharge   of   the   functions   of   the Board as well as for the exercise of the powers set out in Chapter III.  We are, therefore, of the considered view that the appointment of   officers   and   servants   and   determination   of   their   service conditions cannot constitute functions of the Board. POWER   OF   THE   STATE   GOVERNMENT TO   ISSUE   DIRECTIONS   TO   THE   BOARD REGARDING   THE   DETERMINATION   OF THE   SERVICE   CONDITIONS   OF   THE BOARD 40 C.A.Nos.6622-6623 of 2022 etc. 31. Section   92   which   provides   for   Control   of   the   State Government   over   the   Board   is   a   part   of   Chapter   X   under   the heading “External Control”.  Section 92 reads thus : “ 92.   Control   of   the   State   Government   over   the Board   and   other   local   authorities. ­(1)   The   Board shall­ (a) submit   to   the   State  Government  such  reports   and returns in such forms and at such intervals as may be prescribed; (b) furnish to the  State Government such documents, returns,   statements,   estimates   or   other   information regarding any matter under the control of the Board as may be directed by the State Government. (2)   The  State Government  may  give  the  Board   such directions   as   in   its   opinion   are   necessary   or expedient for carrying out the purposes of this Act, and   it   shall   thereupon   be   the   duty   of   the   Board   to comply with such directions. (3)   Without   prejudice   to   other   provisions   of   this   Act, and   notwithstanding   anything   contained   in   any   other law   for   the   time   being   in   force,   the   State   Government may   give   any   local   authority   such   directions   as   in   its opinion   are   necessary   or   expedient   for   enabling   the Board   to   carry   out   the   purposes   of   this   Act;   and thereupon it shall be the duty  of the local authority  to comply with such directions.”                                 (emphasis added) 41 C.A.Nos.6622-6623 of 2022 etc. The power under sub­section (2) of section 92 is to be exercised for issuing   directions   for   carrying   out   the   purposes   of   the   1965   Act. The issue is whether the State Government can exercise the power under   sub­section   (2)   of   Section   92   to   override   statutory Regulations  framed  by  the Board in  the  exercise of  powers  under clause (f) of sub­section (1) of Section 95.  If the State Government desires  to   override   or  nullify   such   Regulations,  there   is   a   specific provision   under   the   said   Act   of   1965   which   enables   the   State Government to do so.  On a conjoint reading of clause (nn) of sub­ section   (1)   of   Section   94   and   sub­section   (2)   of   Section   95,   the State   Government   has   the   power   to   frame   Rules   determining   the service   conditions   of   the   officers   and   servants   of   the   Board   and once the Rules are framed by the State Government in this behalf, the   provisions   of   the   Regulations   framed   by   the   Board   will   apply only   to   the   extent   to   which   they   are   not   repugnant   to   the   Rules. Service   conditions   will   necessarily   include   salary,   perquisites, allowances,   retirement   benefits   such   as   pension,   etc.   The Regulations   framed   by   the   Board   under   clause   (f)   of   sub­section (2)  of   Section   95  have   a  force  of  law.     On   a   plain   reading   of   sub­ 42 C.A.Nos.6622-6623 of 2022 etc. section   (2)   of   Section   92,   by   no   stretch   of   the   imagination,   by issuing directions, the State Government can nullify the statutory Regulations   framed   under   Section   95.     More   so,   when   the   1965 Act   itself   specifically   enables   the   State   Government   to   nullify   the Regulations by exercising the Rule making power.   As the scheme of   the   1965   Act   specifically   provides   that   Regulations   framed under   Section   94   can   be   overridden   by   framing   Rules   in accordance   with   clause   (nn)   of   sub­section   (1)   of   Section   94,   the act of overriding the Regulations must be done only by framing the Rules and not in any other  manner.   This view is supported by  a series   of   decisions   of   this   Court   taking   a   consistent   view   that where   an   enactment   requires   to   do   a   certain   thing   in   a   certain way, the thing must be done in that way and in no other manner. There   are   several   decisions   taking   that   view   ending   with   the decision   of   this   Court   in   the   case   of   Gujarat   Urja   Vikas   Nigam 6 . However,   the   locus   classicus   on   this   point   is   the   well­known decision   of   the   Privy   Council   in   the   case   of   Nazir   Ahmed   v.   The King Emperor 12 .   It was held by Privy Council that  12 1936 SCC OnLine PC 41 43 C.A.Nos.6622-6623 of 2022 etc.                 “where a power is given to do certain things in a certain way,   the   things   must   be   done   in   that   way   and   not   at   all.   Other methods of performance are certainly forbidden”.   The   upshot   of   the   aforesaid   discussion   is   that   the   State Government   has   no   power   to   issue   directions   under   sub­section (2)   of   Section   92   to   nullify   or   override   the   Regulations   framed   by the Board in the exercise of powers under clause (f) of sub­section (1) of Section 95.   32. Another argument of the State Government is based on sub­ section (1) of Section 15 which opens with an expression “subject to   the   provisions   of   this   Act   and   the   rules   and   regulations”.     By use   of   the   said   expression,   the   exercise   of   the   power   to   frame Regulations   for   determining   the   conditions   of   service   of   officers and   servants   does   not   become   a   function   of   the   Board.     The meaning of the opening part of sub­section (1) of Section 15 is that the   functions   of   the   Board   must   be   discharged   subject   to   the constraints   of   the   Rules   and   Regulations   framed   under   the   1965 Act. 44 C.A.Nos.6622-6623 of 2022 etc. 33. Next limb of the argument of the State Government is based on Section 2(1) of 1975 Act.  Section 2(1) reads thus : " 2.   (1)   Power   to   issue   directions   to   statutory bodies .­Every   statutory   body   (by   whatever   name called),   established   or   constituted   under   any   Uttar Pradesh   Act ,   excepting   Universities   governed   by   the Uttar   Pradesh   State   Universities   Act,   1973,   as   re­ enacted   and  amended  by   the   Uttar  Pradesh   University (re­enactment   and   Amendment   Act),   1974,   shall,   in the   discharge   of   its   functions,   be   guided   by   such directions on questions of policies, as may be given to   it   by   the   State   Government,   notwithstanding that no such power has expressly been conferred on the State Government under the law establishing or constituting such statutory body ."   (emphasis added) On   a   plain   reading   of   the   aforesaid   provision,   the   power   to   issue directions   vested   in   the   State   Government   can   be   exercised   only for   issuing   directions   confined   to   questions   of   policies.   The directions   can   be   issued   confined   to   policies   concerning   the discharge   of   the   functions   of   the   Statutory   Body.     The   directions issued by the State Government on the questions of policies guide every   statutory   body   in   the   discharge   of   its   functions.     For   the reasons   we   have   already   recorded   while   dealing   with   sub­section 45 C.A.Nos.6622-6623 of 2022 etc. (2)   of   Section   92   of   the   1965   Act,   even   the   power   under   Section 2(1)   of   the   1975   Act   cannot   be   invoked   to   nullify   the   statutory Regulations framed by the Board which have a force of law.   That can   be   done   only   by   exercising   the   Rule   making   power   under clause   (nn)   of   sub­section   (1)   of   Section   94   of   the   1965   Act.   The power under Section 2(1) of the 1975 Act is the general power that must  yield to  the  special  powers  conferred  by  the  1965  Act.   The power   under   sub­section   (1)   of   Section   2   is   different   and   distinct from the power to frame statutory Rules.  CONCLUSIONS ON THE THREE QUESTIONS 34. The   aforesaid   discussion   is   sufficient   to   answer   the   three questions framed. Subject to what we have held above, we concur with the view taken by this Court in  Preetam Singh’s case 1 .  Our answers to the three questions are as under : Q. 1   Whether   the   judgment   of   this   Court   in   Preetam Singh’s   case   laying   down   that   conditions   of   service   of officers   and   employees   do   not   constitute   the   functions   of the   U.P.   Avas   Evam   Vikas   Parishad   lays   down   the   correct 46 C.A.Nos.6622-6623 of 2022 etc. law more so when the judgment does not refer to provisions of Sections 8, 92, 94(2)(nn)of the 1965 Act ?  A:  The decision lays down the correct proposition of law. Q.2   Whether   the   view   expressed   in   Preetam   Singh’s judgment   that   functions   of   the   U.P.   Avas   Evam   Vikas Parishad   are   only   the   specific   functions   enumerated   in Section   15   of  1965  Act  which   does  not   include   the  service conditions of employees of the Board lays down the correct law   ?   Whereas   the   functions   of   the   Board   referred   to   in other provisions of Act, Rules and Regulations as has been expressly provided in Section 15(1) by use of the expression “subject   to   the   provisions   of   this   Act   and   the   Rules   and Regulations”   shall   also   be   functions   of   the   Board   which induces service conditions of officers and employees as per Section 95(1)(f) of the 1965 Act.  A:     The   first   part   of   the   question   is   answered   in   the affirmative.   The functions  of the Board are as specified in Section 15 and other relevant sections in Chapter III of the 1965 Act.  The second part is answered in the negative.  47 C.A.Nos.6622-6623 of 2022 etc. Q.3   Whether   the   State   Government   had   no   jurisdiction   to issue directions regarding service conditions of officers and employees of the U.P. Avas Evam Vikas Parishad under the provisions   of   the   1965   Act   and   1975   Act   and   all   other enabling powers with the State Government? A:   Answered  in  affirmative.  But  the  State  Government  can always frame Rules in the exercise of powers under  clause (nn)   of   sub­section   (1)   of   Section   94   of   the   1965   Act   for determining   the   conditions   of   service   of   the   servants   and officers   of   the   Board.   Whenever   there   is   any   inconsistency between Regulations framed under clause (f) of sub­section (1) of Section 95 and the Rules framed under clause (nn) of sub­section  (1)   of   Section   94,  the   Rules   will   prevail   and   to that   extent,   the   provisions   of   the   Regulations   which   are repugnant to the Rules shall be void.   CONSIDERATION OF THE ANCILLARY  ISSUES CONCERNING THE RELIEFS  GRANTED UNDER THE IMPUGNED  JUDGMENT 48 C.A.Nos.6622-6623 of 2022 etc. 35. After   having   decided   the   questions,   we   are   of   the   view   that Civil   Appeals   can   be   decided   in   terms   of   our   findings   instead   of sending them back to the Bench of two Hon’ble Judges. PENSION 36. Now,   we   proceed   to   deal   with   the   ancillary   issues.     Now coming to the new pension scheme, an Office Order was issued on 16 th   January   2004   by   the   Board   recording   that   a   proposal   for framing a scheme of pension was under consideration.  The Office Order dated 16 th  January 2004 provided that those employees who were not interested in opting for the new pension scheme must file an   affidavit   on   stamp   paper   of   Rs.10/­.     In   the   said   affidavit,   it must  be  clearly   and  specifically   asserted that  the  beneficiary  was not  interested in  the new  pension  scheme and  the entire  amount deposited by him as his share along with Board’s share should be paid to the beneficiary. It was also provided that the affidavit must state  that   in  the   future,  the   beneficiary   will  not   claim   pensionary benefits before any authority or the Court.  According to the stand taken   by   the   State   Government,   total   of   582   employees/officers opted   for   the   old   scheme   by   filing   affidavits/undertakings.   The 49 C.A.Nos.6622-6623 of 2022 etc. State   Government   has   placed   on   record   a   copy   of   the   affidavit   of respondent no.1 – Virendra Kumar in one of the appeals. It is not disputed that all the affidavits of the employees who decided not to opt   for   the   new   pension   scheme   are   in   the   same   format.   In   the affidavit, it was incorporated that the employee was not interested at   all   in   the   pension   scheme   and   he   was   interested   in   taking payments   under   the   old   scheme.   It   is   specifically   stated   that   he will not make any claim in respect of the new pension scheme.  37. After   the   State   Government   accorded   its   approval,   on   05 th November 1997 the Board passed a Resolution approving the new pension Scheme.  The High Court while allowing the petitions filed by Preetam Singh and others, directed the Board to implement the new pension scheme in terms of its decision dated 05 th   November 1997.  High Court allowed the petition on 16 th  January 2009.  For giving effect to the decision, on 19 th  May 2009, the Board issued a notification   recording   that   in   the   exercise   of   the   powers   under clauses (f) and (n) of sub­section (1) of Section 95 of the 1965 Act, it has decided that the pension scheme and gratuity admissible to the   officers   and   servants   of   the   State   Government   shall   be 50 C.A.Nos.6622-6623 of 2022 etc. admissible to the employees of the Board.  The relevant part of the said notification reads thus : “…. …. …. Now therefore, the U.P. Avas Evam Vikas Parishad, in   exercise   of   the   power   under   clause   (f)(i)   &   (n)   of sub­section (1) of Section 95 of U.P. Avas Evam Vikas Parishad   Adhiniyam,   1965   (U.P.   Act   1   of   1966)   has decided   that   the   Pension/Family   Pension   and Gratuity admissible to the officers and employees   of State Government, which is governed by the following rules, schemes and Government orders shall also be admissible   (excluding   Pension   commutation)   to   the officer   and   employees   of   the   U.P.   Avas   Evam   Vikas Parishad : 1. Civil Service Regulations as applicable  in UP.               As amended 2. Uttar Pradesh Liberalized Pension Rules, 1961 do 3. U.P. Retirement Benefit Rules, 1961 do 4. New Family Pension Scheme, 1965 do 5. All orders of finance department of U.P.  Government as related to pension/      family pension/Gratuity do 6. Newly defined Contributory Pension rules According to notification no.Sa­3­379/  Das­2005­301(9)/2003, dated March 28,  2005 applicable to officers and employees  of State Govt., who joined services on  April 01, 2005 on onwards do The   orders   with   respect   to   the   Pension/Family Pension/Gratuity issued time to time by the State Govt.   shall   also   be   applicable   to   the   officers   and employees of U.P. Avas Evam Vikas Parishad. 51 C.A.Nos.6622-6623 of 2022 etc. It   has   also   been   decided   by   the   Parishad   that General   Provident   Funds   Rules,   1985,   shall   be applicable   to   the   officer   and   employees   of   U.P.   Avas Evam   Vikas   Parishad   instead   of   Contributory Provident Fund (CPF) Regulations, 1973. In   GPF   Rules   and   Govt.   Rules/Orders   issued   in this regard, ‘Govt.’ means the ‘U.P. Avas Evam Vikas Parishad’,   ‘Accountant   General’   means   ‘finance Controller of U.P. Avas Evam Vikas Parishad’ & ‘Head of Department’ means ‘Housing Commissioner’. The   State   Government   shall   not   provide   any financial   assistance   for   the   implementation   of   the said Pension Scheme. Contents   of   the   notification   shall   come   into force w.e.f. January 1, 1996 and such officers and employees of Avas Evam Vikas Parishad who have retired on or after the said date shall be benefited with the said decision. Newly   defined   Contributory   Pension   Rules notified   by   the   State   Government   shall   be applicable   to   those   employees   who   have   joined Parishad services on April 01, 2005 or onwards.”                                       (emphasis added) Thus,   the   new   pension   scheme   was   retrospectively   brought   into force   from   1 st   January   1996   and   was   made   applicable   to   the employees   and   officers   of   the   Board   who   retired   on   or   after   that date.     It   is   also   recorded   therein   that   the   newly   defined 52 C.A.Nos.6622-6623 of 2022 etc. Contributory Pension Rules notified by the State Government shall be applicable to those employees of the Board who have joined the employment from 1 st   April 2005 onwards.   Thus, the applicability of   the   new   pension   scheme   was   confined   to   the   officers   and employees who  retired  on   or  after   1 st   January  1996.    The  officers and employees appointed on or after 1 st   April 2005 were excluded from  the applicability  of the new pension  scheme.   We must note here   that   the   notification   dated   19 th   May   2009   has   become   final and in none of the petitions which are the subject matter of these appeals,   the   same   was   challenged.   In   fact,   in   Writ   Petition No.10355   of   2017,   there   was   a   prayer   to   issue   a   mandamus   to implement   the   notification.     Moreover,   in   paragraph   21   of   the decision of this Court in  Preetam Singh’s case 1 ,   this Court issued a   mandate   to   act   upon   the   said   notification.     The   notification dated   19 th   May   2009   specifically   states   that   the   orders   with respect to the pension/ family pension/ gratuity issued from time to time by the State Government shall be applicable to the officers and   servants   of   the   Board.     Thus,   only   those   employees   of   the Board   who   have   retired   on   or   after   1 st   January   2006   will   be 53 C.A.Nos.6622-6623 of 2022 etc. entitled   to   the   benefit   of   the   new   pension   scheme   and   those   who are   appointed   on   or   after   1 st   April   2005   will   be   governed   by another   set   of   Rules   as   mentioned   in   the   notification   dated   19 th May 2009. 38. In   the   Special   Leave   Petition   filed   by   the   State   Government against   the   judgment   of   the   Allahabad   High   Court   in   the   case   of Preetam   Singh   and   others,   an   interim   order   was   passed   by   this Court   on   7 th   August   2012   which   had   the   effect   of   staying   the judgment   of   the   High   Court   and   the   notification   dated   19 th   May 2009.   The   further   interim   order   dated   7 th   September   2012 recorded that if the employees of the Board, who have retired from service,   claim   Contributory   Provident   Fund   and   other   retiral benefits (as per the old scheme), the Board shall pass appropriate orders granting the benefit under the old scheme.  However, it was clarified that the said interim order will not come in the way of the respondents before this Court agitating their claim and supporting the  reliefs  granted  by  the  Allahabad  High  Court.  Paragraph  21 of the   judgment   records   that   by   the   interim   order,   the   notification dated 19 th   May   2009 was  stayed, and  therefore,  no  one  could get 54 C.A.Nos.6622-6623 of 2022 etc. pension   under   the   new   scheme.   Therefore,   the   interim   order   was passed   which   enabled   the   employees   who   had   not   received benefits either under the old scheme or the new pension scheme, to   take   benefits   under   the   old   scheme.   This   interim   order   was made as no one could get the benefit of the old scheme as a result of   the   stay   granted   to   the   notification   dated   19 th   May   2009.   The interim   order   dated   7 th   September   was   thus   applicable   only   to those employees who had not taken benefits under the old scheme till 7 th  September 2012. Obviously, those officers and employees of the   Board   who   opted   for   the   old   scheme   by   filing   affidavits   in terms   of   the   Office   Order   dated   16 th   January   2004   and   received the   benefits   under   the   old  scheme   before  the  interim   order   dated 07 th   September 2012 was passed, are disentitled to claim pension under   the   new  pension   scheme.   Those  officers   and  employees  of the   Board  who   opted   to   take  benefits   under   the   old   scheme   after 07 th   September   2012   will   be   entitled   to   benefit   of   the   direction issued   by  this   Court  in   paragraph   21   of  the   decision   in   Preetam Singh’s   case 1   regarding   the   payment   of   pension   under   the   new 55 C.A.Nos.6622-6623 of 2022 etc. pension   scheme   and   the   payment   of   interest   on   the   differential amount. 39. The State Government issued two Office Memoranda on 08 th December 2008.   The first was regarding the revision of pension/ gratuity/   family   pension   and   commutation   with   effect   from   1 st January   2006   on   the   basis   of   recommendations   of   the   U.P.   Pay Committee, 2008.   The said order specifically recorded that it will not apply to local bodies and public enterprises. The second Office Memorandum   dated   08 th   December   2008  was  issued  for  applying revision of pension and family pension in respect of the employees who have retired prior to 1 st   January 2006. Obviously, the second Office Memorandum is not relevant as the new pension scheme of the Board was made applicable to those who retired on or after 1 st January 2006 as provided in the notification dated 19 th  May 2009. The   first   Office   Memorandum   dated   08 th   December   2008   which excluded   the   officers   and   employees   of   the   Board   was   challenged belatedly   for   the   first   time   in   2016   in   Writ   Petition   No.126445   of 2016.     We   may   note   here   that   the   Board’s   notification   dated   19 th May 2009 was issued in the exercise of Regulation making power 56 C.A.Nos.6622-6623 of 2022 etc. under   clause   (f)   of   sub­section   (1)   of   Section   95   of   the   1965   Act which   provided  that   orders  issued  by   the  State   Government   from time   to   time   with   respect   to   pension/   family   pension/   gratuity shall be applicable to the officers and employees of the Board.  No part of the regulations framed by the Board on 19 th  May 2009 was ever challenged. Therefore, the officers and employees of the Board who   were   the   beneficiaries   under   the   notification   dated   19 th   May 2009  were  bound  by   the   first  Memorandum   dated  08 th   December 2008   and   the   orders   passed   from   time   to   time   by   the   State Government with regard to pension and family pension.  Moreover, revised   pension   was   granted   to   the   State   Government   employees as   the   recommendations   of   U.P   Pay   Committee,   2008   were   made applicable   to   them.     The   said   recommendations   were   applied   to the   employees   of  the   Board  on   14 th   January   2010.   We   may   note here   that   the   Allahabad   High   Court,   by   the   impugned   judgment, has   not   set   aside   or   modified   the   Office   Memorandum   dated   08 th December 2008. 40. On 16 th  October 2009, the State Government issued an order making   applicable   revised   pay   structure   in   terms   of   the   report   of 57 C.A.Nos.6622-6623 of 2022 etc. the   7 th   U.P.   Pay   Committee,   2008   to   the   public   enterprises   and corporations   subject   to   the   terms   and   conditions   incorporated therein.     The   Board,   by   a   letter   dated   30 th   November   2009, informed the State Government of its decision to apply the revised pay   structure.     It   was   sought   to   be   argued   by   some   of   the respondents   that   the   order   dated   14 th   January   2010   relates   to pension.   In fact, it only deals with the applicability of the revised pay  structure to the employees and officers of the Board.   By the order   dated   14 th   January   2010,   the   State   Government communicated its decision to allow the Board to apply the revised pay   structure   on   a   notional   basis   with   effect   from   1 st   January 2006 in the pay  band and grade pay in the revised pay  structure as   per   the   table   enclosed   to   the   Government   Order   dated   16 th October   2009.     The   said   order   recorded   that   the   benefit   of   pay structure shall be granted with immediate effect to the officers and employees   of   the   Board   by   calculating   the   benefit   on   a   notional basis   with   effect   from   1 st   January   2006.     The   Office   Order   was issued   by   the   Board   on   23 rd   January   2010   for   implementation   of the aforesaid order dated 14 th   January 2010.   The meaning of the 58 C.A.Nos.6622-6623 of 2022 etc. order   dated   16 th   January   2010   was   that   the   actual   benefit   of   the revised pay structure will be available immediately from that date by  calculating  the pay  on a notional basis in terms of the revised pay   structure with effect from  1 st   January   2006.   In  other  words, the   order   dated  14 th   January   2010   made  it   clear   that   the   officers and employees of the Board will not be entitled to revised pay from 1 st   January 2006 till 14 th   January 2010 and that they will get the benefit   of   revised   pay   only   from   14 th   January   2010.     But,   while calculating the revised pay with effect from 14 th  January 2010, the benefit  of  the revised pay  structure was  to be notionally  provided from 1 st   January 2006.   Thus, the pay fixation as of 14 th   January 2010 must be made by notionally granting the benefit of the new pay   structure   with   effect   from   1 st   January   2006.     The communication dated 15 th   January 2011 of the State Government addressed to the Housing Commissioner of the Board records that the   officers   and   employees   of   the   Board   will   not   be   entitled   to arrears of revised pay for the period from 1 st  January 2006 to 13 th January   2010.     None   of   these   orders   of   16 th   October   2009,   14 th January   2010,   and   15 th   January   2011   were   concerning   pension. 59 C.A.Nos.6622-6623 of 2022 etc. These   orders   deal   only   with   the   grant   of   a   revised   pay   structure. But,   the   computation   of   pension   has   to   be   made   on   the   basis   of the applicable pay structure.  Hence, those who retired on or after 1 st  January 2006 and those who were entitled to benefit of the new pension scheme under the notification dated 19 th  May 2009 will be benefitted   from   the   revised   pay   structure   to   the   extent   that   their pension  will  have  to   be  calculated   on   the   basis   of   revision  of   pay structure on notional basis from 1 st  January 2006.   41. On   05 th   May   2015,   the   State   Government   issued   another order  regarding  pensionary   benefits  to  the officers and  employees of  the  Board  in  terms  of  which  Office  Order  dated  13 th   May   2015 was issued.   The gist of the said order  dated 05 th   May  2015 is as under : (i) Such   staff   of   U.P.   Avas   and   Vikas   Parishad   whose recruitment was done on or before 31 March 2005 and who   have   not   retired   till   date,   will   be   entitled   to pension; (ii) Such   staff   of   U.P.   Avas   and   Vikas   Parishad   who   had retired and had taken all the benefits under the C.P.F. Scheme   after   getting   retired,   will   not   be   entitled   to pension; 60 C.A.Nos.6622-6623 of 2022 etc. (iii) Such staff of U.P. State Avas and Vikas Parishad whose recruitment was done on or after 1 st  April 2005 will not be entitled get the pension; and (iv) In   the   light   of   the   order   of   this   Court   in   Preetam Singh’s   case,   the   9%   interest   is   not   payable   to   any retired staff in C.P.F. Scheme.  In future, if the question of paying interest to any  staff member arises, then the Board will bear the said expense by itself and no claim can be made from the government. The   directions   in   the   above   terms   were   incorporated   in   the consequential   order   issued   by   the   Board   on   13 th   May   2015. Notification   dated   19 th   May   2009   issued   by   the   Board   clearly provides that all the officers and employees who retired on or after 1 st   January   2006   will   be   entitled   to   benefit   of   the   new   pension scheme   but   those   who   were   employed   on   or   after   1 st   April   2005 will   be   entitled   to   benefits   under   the   newly   defined   Contributory Pension Rules of the State Government.   To that extent, clause (i) of   the   Government   Order   dated   5 th   May   2015   will   require modification.   Even clause (ii) will require clarification in terms of this   Judgment.     Those   officers   and   employees   who   have   already taken   benefit   of   the   old   scheme   before   07 th   September   2012   by 61 C.A.Nos.6622-6623 of 2022 etc. giving   undertakings   will   not   get   the   benefit   of   the   new   pension scheme   but   those   who   have   taken   the   benefit   of   the   old   scheme after   the   date   of   the   interim   order   dated   7 th   September   2012   will be entitled to take benefit of the new pension scheme.  Clause (iii) of the order means that in view of the notification dated 19 th   May 2009,   those   who   are   appointed   on   or  after   1 st   April   2005   will   not get   the   benefit   of   the   new   pension   scheme   under   the   said notification.     As   regards   clause   (iv),   interest   will   be   payable   in terms of the decision of this Court in  Preetam Singh’s case 1 , only to   those   employees   and   officers   who  had   not  taken   benefit  of   the old   scheme   before   the   interim   order   dated   07 th   September   2012 was passed by this Court.  Interest in terms of the decision of this Court   will   be   payable   on   differential   amounts,   to   those   who   have taken   benefits   under   the   old   scheme   after   07 th   September   2012. To   the   above   extent,   the   directions   of   this   Court   issued   in Preetam Singh’s case 1  will have to be clarified. ARREARS OF PAY IN TERMS OF REVISED PAY STRUCTURE 62 C.A.Nos.6622-6623 of 2022 etc. 42.   Now,  the   other   issue  which   survives   is   whether   the   officers and employees are entitled to arrears of pay as per the revised pay structure for the period between 1 st  January 2006 to 13 th  January 2010.     The   impugned   judgment   proceeds   on   the   footing   that   the order   of   the   State   Government   directing   that   the   officers   and employees   of   the   Board   will   get   the   benefit   of   the   new   pay structure notionally from 1 st   January 2006 and actually from 14 th January 2010 is issued in the exercise of power under Section 2(1) of 1975 Act and Section 92(2) of the 1965 Act. Therefore, the High Court   held   that   the   State   Government   could   not   have   issued   the said direction regarding the determination of conditions of service as   the   determination   of   the   conditions   of   service   was   not   a function of the Board. 43. As   far   as   the   applicability   of   the   pay   structure   to   the employees   and   officers   of   the   Board   is   concerned,   there   is   no material   placed   on   record   to   show   that   the   Regulation   making power   under   Section   95   was   at   all   exercised   by   the   Board regarding   applying   revised   pay   structure   applicable   to   the   State Government   employees   to   its   own   employees.     All   that   the   Board 63 C.A.Nos.6622-6623 of 2022 etc. did was to implement the order of the State Government dated 14 th January   2010   by   granting   a   revised   pay   structure   to   its employees.     The   said   order   is   based   on   the   order   of   the   State Government issued on 16 th  October 2009 by which a decision was taken   to   apply   the   revised   pay   structure   applicable   to   the   State Government   employees   to   the   employees   of   public   sector enterprises on the terms and conditions incorporated therein.   As noted   earlier,   by   exercising   the   Rule   making   power   under   clause (nn)   of   sub­section   2   of   Section   94   of   the   1965   Act,   the   State Government   could   have   always   determined   the   pay   scales   of   the officers   and   employees   of   the   Board.   If   it   is   held   that   the   State Government  had no  power  to  issue the  orders dated 16 th   October 2009 and 14 th   January 2010, the employees of the Board will not get the benefit of the revised pay structure made applicable to the Government   employees   as   the   Board   has   not   framed   the Regulations under clause (f) of sub­section (1) of Section 95 of the 1965   Act   providing   for   the   grant   of   revised   pay   structure   to   the employees.     Surprisingly,   in   paragraph   22   of   the   impugned judgment,   the   High   Court   has   held   that   the   orders   dated   16 th 64 C.A.Nos.6622-6623 of 2022 etc. October  2009 and 14 th   January  2010 would have no applicability in   the   matter   of   laying   down   the   conditions   of   service   of   the employees of the Board.  If this finding is upheld, the employees of the Board will be completely deprived of the benefit of the revised pay   structure   as   there   is   no   Regulation   made   by   the   Board operating  in  the  field.    Hence,  the employees  of the  Board  will be entitled to the revised pay structure in terms of the said orders as clarified by the further order dated 15 th  September 2011. 44. The grant  of  arrears from  1 st   January  2006 till 14 th   January 2010   will   involve   huge   financial   implications   for   the   Board. Financial   constraint   is   a   valid   ground   for   denying   arrears   as   per the revised pay structure. The decision to provide the benefit of a higher   pay   structure   to   the   officers   and   employees   of   the   Board was taken by the State Government subject to the condition of not paying   arrears   for   the   period   between   1 st   January   2006   and   14 th January   2010.  Therefore,  we cannot   approve  the  direction  issued by the High Court under the impugned judgment to pay arrears of wages as per the new pay structure for the period from 1 st  January 2006 to 14 th  January 2010. 65 C.A.Nos.6622-6623 of 2022 etc. 45. Hence, our conclusions are as under : (i) We   uphold   the   decision   of   this   Court   in   Preetam Singh’s   case 1   with   a   modification   that   the   State Government   can   always   exercise   the   powers   under clause (nn) of sub­section (1) Section 94 of the 1965 Act for   determining   the   conditions   of   service   of   the   officers (other   than   the   Housing   Commissioner)   and   employees of   the   Board.     If   such   power   is   exercised,   those provisions of the Regulations framed under clause (f) of sub­section (1) of Section 95 which are repugnant to the Rules, shall be void; (ii) All   the   officers   and   employees   of   the   Board   who   have not   received   the   benefit   of   the   old   scheme   till   07 th September   2012   and   have   retired   on   or   after   1 st January   2006   shall   be   entitled   to   benefit   of   the   new pension   scheme   as   per   the   notification   dated   19 th   May 2009   issued   by   the   Board   provided   they   are   otherwise eligible.   However, the officers and employees appointed on or after 1 st   April 2005 will be governed by the newly 66 C.A.Nos.6622-6623 of 2022 etc. defined Contributory Pension Rules notified by the State Government; (iii) Those   officers   and   employees   of   the   Board   who   have retired   on   or   after   1 st   January   2006   and   who   have   not received benefits under the old scheme till date shall be entitled   to   interest   as   directed   by   this   Court   in paragraph 21 of the decision in  Preetam Singh’s case 1 . Even   those   officers   and   employees   who   are   entitled   to benefit   of   the   new   pension   scheme   in   terms   of   the notification   dated   19 th   May   2009   and   who   have   taken benefits   under   the   old   scheme   pursuant   to   the   interim order   dated   07 th   September   2012,   will   be   entitled   to interest on differential amounts, as directed in terms of paragraph   21   of   the   decision   of   this   Court   in   Preetam Singh’s case 1 ; (iv) Those   officers   and   employees   of   the   Board   who   have accepted   the   benefit   under   the   old   scheme   before   7 th September 2012 after giving an undertaking in terms of the   Office   Order   dated   16 th   January   2004   shall   not   be 67 C.A.Nos.6622-6623 of 2022 etc. entitled to the benefit of the new pension scheme made applicable as per the notification dated 19 th  May 2009; (v) While  calculating  the pension  amount  payable to  those who are entitled to the new pension scheme in terms of the   notification   dated   19 th   May   2009,   the   benefit   of notional   pay   fixation   in   terms   of   the   revised   pay structure   with   effect   from   1 st   January   2006   shall   be provided; and (vi) All   the   officers   and   employees   of   the   Board   who   are entitled to benefit of the revised pay structure in terms of the Government Order dated 14 th  January 2010 shall be   provided   the   said   benefit   within   a   period   of   three months   from   today,   if   not   provided   earlier.     While extending the said benefit, their pay shall be notionally determined  as per  the  revised  pay   structure  with  effect from   1 st   January   2006.   However,   they   shall   not   be entitled   to   arrears   of   salary   as   per   the   revised   pay structure from 1 st   January 2006 till 14 th   January 2010. However, in the cases of the employees and officers who 68 C.A.Nos.6622-6623 of 2022 etc. have   already   received   the   arrears,   no   recovery proceedings shall be initiated against them. 46. The impugned judgment and order stands modified in terms of   the   above   conclusions.     The   civil   appeals   are   disposed   of accordingly with no order as to costs. .…....…………………J. [Sanjay Kishan Kaul] …….…………………J. [Abhay S. Oka] …….…………………J. [Vikram Nath] New Delhi; November  25 , 2022. 69