STATE OF ORISSA & ANR. versus ORISSA KHADI AND VILLAGE INDUSTRIES BOARD KARAMCHARI SANGH & ANR

Citation: [2023] 2 S.C.R. 1049 · Decided: 17-03-2023 · Supreme Court of India · Bench: DINESH MAHESHWARI · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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1049
STATE OF ORISSA & ANR.
v.
ORISSA KHADI AND VILLAGE INDUSTRIES BOARD
KARAMCHARI SANGH & ANR.
(Civil Appeal No. 6944 of 2015)
MARCH 17, 2023
[DINESH MAHESHWARI AND SANJAY KUMAR, JJ.]
Orissa Khadi and Village Industries Board Act,1955 – s.36 –
Orissa Khadi and Village Industries Board Regulations, 1960 –
Regulation 40 and 52 – State Government decided not to introduce
pension scheme for the employees of Orissa Khadi and Village
Industries Board due to the financial hardship – Respondents
challenged it before the High Court – The Single Judge issued
directions to the State Government to amend the Regulations of 1960
and to take appropriate steps to incorporate the pension scheme
for the Board’s employees at par with the State Government
employees – On appeal, the Division Bench of High Court dismissed
the appeal and held that the direction of the Single Judge was only
advisory in nature and the State Government shall honour the same
while keeping in view the interest of the retired employees – In appeal
before the Supreme Court, the State Government contended before
the Supreme Court that the High Court was not justified in issuing
such directions, which are contrary to the regulations that rule out
pensionary rights to Board employees – Held: Board has been
established under enactment of the State, it could be considered to
be an instrumentality of the State, its distinct characteristic of being
a Board established with particular aim and objective cannot be
ignored – The employees of the Board cannot be treated as State
Government employees in all respects just because the State has
established the Board – Regulation 40 starts with exception clause,
making that provision subject to other provisions of the Regulation
– Regulation 52 specifically provides that the employees of the Board
shall not be entitled to any pension – Further held, mandamus could
not have been issued to the State to carry out amendment – Under
Art. 142, the Supreme Court cannot issue directions in violation of
statutory provisions – Orders of High Court were set aside.
[2023] 2 S.C.R. 1049
1049
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SUPREME COURT REPORTS
[2023] 2 S.C.R.
Allowing the appeal, the Court
HELD: 1. The contentions urged on behalf of the
respondents, seeking to put the employees of the Board at par
with the employees of the State Government for all purposes,
carry their own shortcomings. Even if Orissa Khadi and Village
Industries Board has been established under an enactment of
the State and for several relevant factors, it could be considered
to be an instrumentality of the State, its distinct characteristic of
being a Board established with particular aim and objective cannot
be ignored altogether. The Board being a body corporate,
incorporated by its name, has been established to carry out the
purposes of the Act of 1955 and not beyond. In view of its
independent corporate entity and existence, the provisions have
been made in the Act of 1955 for making regulations by the Board
consistent with the Act of 1955 and rules made thereunder with
the previous sanction of the State Government, where the
Regulations could provide, inter alia, for remuneration,
allowances and other conditions of service of the staff of the Board
(vide Section 36 of the Act). The Regulations of 1960 were framed
accordingly. Therein, even while otherwise applying a substantial
part of the Rules in the Orissa Service Code mutatis mutandis to
the employees of the Board, Regulation 40 itself starts with a
clause of exception, making that provision subject to the other
provisions of the Regulations. Then, in Regulation 52 it has
specifically been provided that the employees of the Board shall
not be entitled to any pension except gratuity and CPF benefits;
and further provisions have been made for the purpose of
subscription/contribution to CPF. Thus, even when the State has
established the Board to carry out its obligations in terms of
Article 43 of the Constitution of India, it cannot follow as a
corollary that the employees of this body corporate have to be
treated as State Government employees in all respects. Such a
corollary proposition would practically amount to merging of the
Board with the State Government; rather making it as one of the
Departments of the Government. This, in the face of existing
statute, cannot be done. That being the position and when
Regulations in question specifically make a distinct provision as
regards retiral benefits, the same

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