State Government can Exercise Powers for Determining Conditions of Service of Officers other than Housing Commissioner and Employees of Board: Supreme Court

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The Supreme Court ruled that the state government can exercise the powers for determining conditions of service of officers other than the housing commissioner and employees of the Board.


On 10th February 2020, for the reasons recorded, a Bench of two judges of the Court came to the conclusion that the view taken by the Court in the case ofState of Uttar Pradesh v. Preetam Singh & Ors. (Preetam Singh’s case) needs reconsideration. 

Under Section 3 of theUttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965, Uttar Pradesh Avas Evam Vikas Parishad was established. 

The basic object of the establishment of the Board was 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.


Aishwarya Bhati, the Additional Solicitor General appearing for the State Government urged that the 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.

She 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.

Counsel for the respondent submitted 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. 


The three judges bench of Justice Sanjay Kishan Kaul, Justice Abhay S. Oka and Justice Vikram Nath noted that the new pension scheme was retrospectively brought into force from 1stJanuary 1996 and was made applicable to the employees and officers of the Board who retired on or after that date.

The court observed that those officers and employees of the Board who opted to take benefits under the old scheme after 07thSeptember 2012 will be entitled to benefit of the direction issued by the Court in paragraph 21 of the decision in Preetam Singh’scase regarding the payment of pension under the new pension scheme and the payment of interest on the differential amount.

It was further observed that the officers and employees of the Board who were the beneficiaries under the notification were bound by the first Memorandum and the orders passed from time to time by the State Government with regard to pension and family pension. 

It was stated by the court that interest in terms of the decision of the Court will be payable on differential amounts, to those who have taken benefits under the old scheme after 07thSeptember 2012.

The court upheld the decision of the Court in Preetam Singh’s case 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 sub section (1) of Section 95 which are repugnant to the Rules, shall be void.

The bench ordered that all the officers and employees of the Board who have not received the benefit of the old scheme till 07th September 2012 and have retired on or after 1st January 2006 shall be entitled to benefit of the new pension scheme as per the notification dated 19th May 2009 issued by the Board provided they are otherwise eligible.

Case title: State of U.P. & Ors. v/s Virendra Kumar & Ors.

Citation: Civil appeal nos.6622-­6623 of 2022 

Date: 25.11.2022

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