IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.9446 of 2009 1. JAGDISH NARAIN SINHA, SON OF LATE KAMLA PRASAD, RESIDENT OF NEW COLONY, BALUGHAT, ROAD NO.1, MUZAFFARPUR, AT PRESENT POSTED AS AMIN IN INVESTIGATION AND PLANNING DIVISION, GANDAK COMMAND AREA DEVELOPMENT AGENCY(GADA), GOPALGANJ, P.S. GOPALGANJ, DISTRICT GOPALGANJ. 2. LALAN SINGH, SON OF LATE BANDAR SINGH, RESIDING AT MOHALLA RAJENDRA NAGAR, P.S. GOPALGANJ, DISTRICT GOPALGANJ AT PRESENT POSTED AS ACCOUNTS CLERK IN INVESTIGATINON AND PLANNING DIVISION, GANDAK COMMAND AREA DEVELOPMENT AGENCY(GADA), GOPALGANJ, P.S. GOPALGANJ, DISTRICT GOPALGANJ. 3. TALKESHWAR MISTRI, SON OF LATE RAM JANAM MISTRTI, RESIDENT OF VILLAGE SHERPUR P.O. KARPI, DISTRICT ARWAL, AT PRESENT POSTED AS SURVEYOR IN INVESTIGATION AND PLANNING DIVISION, GANDAK COMMAND AREA DEVELOPMENT AGENCY(GADA), GOPALGANJ, P.S. GOPALGANJ, DISTRICT GOPALGANJ. 4. UPENDRA PRASAD SAHA, SON OF LATE PRITHVI CHAND SAHA, RESIDENT OF VILLAGE SISIYA, P.O. JAGDISHPUR, DISTRICT KATIHAR, AT PRESENT POSTED AS AMIN IN INVESTIGATION AND PLANNING DIVISION, GANDAK COMMAND AREA DEVELOPMENT AGENCY(GADA), GOPALGANJ, P.S. GOPALGANJ, DISTRICT GOPALGANJ. 5. BHAGWAN DAS, SON OF SRI LANGTU CHOUDHARY, RESIDENT OF VILLAGE TEJPUR, VIA OBRA, P.O. AURANGABAD, DISTRICT AURANGABAD, AT PRESENT POSTED AS AMIN IN INVESTIGATION AND PLANNING DIVISION, GANDAK COMMAND AREA DEVELOPMENT AGENCY(GADA), GOPALGANJ, P.S. GOPALGANJ, DISTRICT GOPALGANJ. Versus 1. THE STATE OF BIHAR THROUGH ITS CHIEF SECRETRARY, OLD SECRETARIAT, BAILEY ROAD, PATNA. 2. PRINCIPAL SECRETARY, WATER RESOURCES DEPARTMENT, GOVERNMENT OF BIHAR, SINCHAI BHAWAN, PATNA. 3. SECRETARY, AGRICULTURE(SPECIAL PROGRAMME) DEPARTMENT, GOVERNMENT OF BIHAR, PATNA. 4. GANDAK COMMAND AREA DEVELOPMENT AGENCY, MUZAFFARPUR. 2 5. AREA DEVELOPMENT COMMISSIONER-CUM- CHAIRMAN, GANDAK COMMAND AREA DEVELOPMENT AGENCY, MUZAFFARPUR. 6. UNDER SECRETARY, COMMAND AREA, DEVELOPMENT DIRECTORATE, WATER RESOURCES DEPARTMENT, GOVERNMENT OF BIHAR, SINCHAI BHAWAN, PATNA. 7. SECRETARY, GANDAK COMMAND AREA DEVELOPMENT AGENCY, MUZAFFARPUR. 8. EXECUTIVE ENGINEER, INVESTIGATION AND PLANNING DIVISION, GANDAK COMMAND AREA DEVELOPMENT AGENCY, GOPALGANJ. With CWJC No.2016 of 2006 DEO NARAIN YADAV, SON OF LATE PALAKDHARI YADAV CARE OF TARA GENERAL STORES, RESIDENT OF NEW COLONY, BALOO GHAT, ROAD NO.1, MUZAFFARPUR TOWN AND P.S. MUZAFFARPUR, DISTRICT MUZAFFARPUR. Versus 1. GANDAK AREA DEVELOPMENT AGENCY, THROUGH REGIONAL DEVELOPMENT COMMISISIONER-CUM- CHAIRMAN, MUZAFFARPUR. 2. THE CHAIRMAN, GANDAK AREA DEVELOPMENT AGENCY, MUZAFFARPUR. 3. THE SUB-DIVISIONAL OFFICER, INVESTIGATION AND PLANNING SUBDIVISION GANDAK AREA DEVELOPMENT AGENCY, MUZAFFARPUR. 4. THE STATE OF BIHAR, THROUGH THE CHIEF SECRETARY, GOVT. OF BIHAR, OLD SECRETARIAT, PATNA. 5. THE DEVELOPMENT COMMISSIONER, GOVT. OF BIHAR, OLD SECRETARIAT, PATNA. 6. THE PRINCIPAL SECRETARY, WATER RESOURCES DEPTT. GOVT. OF BIHAR, PATNA. For the Petitioners : M/s. Umesh Pd. Singh, Sr. Adv., Uma Shankar Prasad, Sr. Adv., Rajeev Ranjan, Prasad, Amod Kumar, Bhuneshwar Pandey Kamla Kant Tiwary, For the State : Mr. Kumar Uday Bhanu Rai, GA-4, Mr. Manoj Kr., AC to GA-10. For the GADA : M/s Keshav Srivastava, Sr. Adv., Ishwari Singh, Advocates. ----------- 05. 20.05.2010 Heard learned counsel for the petitioners, the State and the counsel for the 3 Gandak Area Development Agency (hereinafter referred to as the Agency). 2. Petitioners in the two writ application are the employees of the Agency. They have filed the two writ application praying inter alia to direct the State respondents and its officers as also the Executive Committee of the Agency to enforce the service conditions in the matters of pay revision, leave encashment, group insurance and payment of gratuity in terms of the Payment of Gratuity Act, 1972 as is applicable to the employees of the State Government in the light of the decision of the Executive Committee of the Agency taken in its meeting held on 29.6.1999 vide agenda item No.13 and notified under office order No. 985 dated 10.8.1999, Annexure-3. 3. It is submitted on behalf of the petitioners that the State Government being conscious of the fact that Bihar is a State which is primarily dependent on agriculture and in order to improve and enhance the agricultural production it is necessary to modernize and develop the irrigation system to provide maximum irrigation facility to the lands falling within the span/command area of the three rivers, namely, Koshi ,Gandak, and Sone 4 resolved to constitute the three command area development authority for the better management of the three rivers under resolution of the State Government dated 20.10.1973. Perusal of the said notification indicates that Koshi Command Area Development Authority was constituted for the district(s) of Purnia, Katihar, Saharsa, Gandak Area Development Authority for the district(s) of East and West Champaran, Siwan, Saran, Gopalganj, Vaishali, Samastipur and Muzaffarpur and Sone Area Development Authority for the district(s) of Rohtas, Bhojpur, Patna, Aurangabad and Gaya . 4. It is further submitted that in the second meeting of the Sone Area Development Authority held on 7.2.1974 presided over by the Chief Secretary and other senior officers of the state it was resolved vide agenda item No.4 to apply to the employees of the Authority the Bihar Service Code, TA rules, GP fund Rules, Financial Rules, Treasury Rules, Treasury Code, Pension Rules , the Board Miscellaneous Rules, the proceeding dated 7.2.1974 has been annexed as Annexure-11 to I.A No. 8187 of 2009 filed in C.W.J.C No. 9466 of 2009. Later Bihar Agricultural and Rural Area Development Agency Ordinance, 1974 was promulgated, under Section-3 5 where of the State Government constituted Koshi Area Development Agency for the district(s) of Purnia, Katihar, Saharsa, Gandak Area Development Agency for the district(s) of East and West Champaran, Siwan, Saran, Gopalganj, Vaishali, Samastipur and Muzaffarpur and Sone Area Development Agency for the district(s) of Rohtas, Bhojpur, Patna, Aurangabad and Gaya. The ordinance was ultimately replaced by The Bihar Agricultural and Rural Area Development Agency, Act 1978 (hereinafter referred to as the Act), the three agency after coming into force of the Act are functioning and discharging their duties in terms of the provisions of the Act. 5. With reference to the provisions of the Act it is submitted by the counsel for the petitioners that the three agency having been constituted under Section-3 of the Act are body corporate having perpetual succession and common seal with powers to acquire, hold, dispose of property and to contract and it may sue or be sued in its own name and the Agency is discharging the responsibilities of the State as it is undertaking execution of the scheme for securing integrated rural and agricultural development of the area by modernizing the 6 irrigation and water drainage system so as to realize the maximum potentiality of the river waters of the three rivers for the benefit of the integrated development of the area falling within the area of operation of the three Agency. 6. With reference to Section-4 of the Act it is submitted that the administrative control of the Agency is vested in the Board constituted by the State Government. Under Sub-Sections-(2) and (3) of Section-4 of the Act the Chairman and the Managing Director as also the members of the Board are appointed by the State Government by publishing notification in the official gazette and the members of the Board excluding the ex officio hold office at the pleasure of the State Government and the State Government also prescribe their terms and conditions of service. The Board of the Agency constitute an executive committee as per the provisions of sub-Section-1 of Section-5 of the Act. The Chairman of the Board is the Chairman of the Executive Committee as well. The powers of the Chairman-cum-Managing Director of the Agency is enumerated under Sub-Section-(7) of Section-5 of the Act wherefrom it appears that the Chairman- cum-Managing Director shall not only preside over 7 the meeting of the Board and the Executive Committee but he is also the Chief Executive of the Agency and is responsible for executing the scheme and programme of the Agency. Section-8 of the Act provides that the Board may appoint officers and staff on such emoluments and such conditions of service as may be laid down in the regulation to be framed by the Agency with prior approval of the State Government. Powers and functions of the Agency has been provided in chapter-III of the Act. Sections-9 and 10 of the Act provides for functions and powers of the Agency, which is extracted below for ready reference:- (9) Functions of the Agency : The functions of the Agency shall be :- (i) The formulation of a plan or programme and scheme integrated rural and agricultural development of the territory within its area of operation. (ii) The implementation of such plan or programme and schemes as may be necessary for the development of the area. (iii) The promotion and operation of schemes or irrigation, drainage, flood control and water supply, rural electrification, land levelling and development of agricultural, animal husbandry, fisheries and forestry within its area of operation. Provided that in respect of major irrigation projects and state Government may entrust the maintenance and operation of the head works and main canal to the 8 State Irrigation River valley Project Department. (iv) Undertaking such other activity from time to time as may be deemed necessary, conductive, incidental or ancillary for the attainment of the aims and objects of this act. 10. Power of the Agency : The Agency shall have power to :- (a) take measures for promoting the utilization of available irrigation facilities : (b) take measures for facilitating or promoting rural electrification schemes : (c) take measures for land levelling and land development : (d) take measures for soil conservation and water management : (e) organise agricultural extension service and field research experimental stations and farms and farmers’ service societies etc. (f) Training farmers, artisans etc, (g) Take measure, including special measures, for promotion development of small farmers, marginal farmers, agricultural labourers and village artisans. (h) Take measures for facilitating or promoting agro service centre : (i) Take measures for the establishment of markets, construction of stores and godown : 7. From perusal of the functions and powers of the Agency it would appear that it has been constituted to formulate 9 plan/programme/scheme for integrated rural and agricultural development of the territory within its area of operation, for promotion and operation of schemes of irrigation, drainage, flood control and water supply, rural electrification, land levelling and development of agriculture, animal husbandry, fisheries, forestry including soil conservation and water management as also for organizing agricultural extension service and fuel research experimental satiations and to provide training to farmers, artisans etc. with emphasis on promotion and development of small farmers, marginal farmers, agricultural labourers and village artisans as also to take measures for establishing markets, construction of stores and godowns in the rural area so that producers of agriculture produce are relieved of the manoeuvres of the middlemen. The Agency is also empowered to aid in the establishment of cooperative societies including farmer services societies for better utilization of facilities made available by the Agency. It is thus evident that under the Act Agency has been constituted to discharge the function of the welfare state for improving the plight of the agriculturists/farmers/rural artisans. Under 10 Section-11 of the Act the Agency has also been authorized to prevent any person from doing such work as it may consider adversely affecting the execution of the plan formulated by the agency. Chapter-IV of the Act provides for the stage and manner in which the plan/programme/scheme for integrated rural and agricultural development of the territory within the area of operation of the Agency shall be formulated after publication of the draft special scheme and hearing of objections and the manner in which subsequent changes shall be made in the scheme. From perusal of Chapter-IV of the Act it is quite evident that the plan/programme/ scheme for development of the area is made by the agency after full interaction with the people of the area for whose benefit the plan/programme/scheme has been formulated. Under Sub-section-(2) of Section-17 of the Act the State Government has been authorized to make regulation for refraining persons from doing certain acts for successful execution of the scheme framed by the Agency. Chapter-V provides for execution of the plan/programme/scheme framed by the Agency as per mechanism provided in Sections-19 to 22 of the Act. Chapter-VIII of the Act provides for finance, 11 accounts and audit of the Agency. Section-24 provides for the fund of the Agency and all receipts of the Agency shall be credited in the fund of the Agency and payment shall be made therefrom. Sub- Section(2) of Section-24 provides that Agency may accept grants subvention, donations and gift from the Central or the State Government or a local authority or any individual or body whether incorporated or not for all or any of the purposes of this Act but the Agency shall not divert any grant or subvention received from the Central and the State Government or local authorities for expenditure and purposes other than for which grant or subvention were made. Section-25 of the Act provides that the Agency shall spend such sums as may be necessary for performing the functions and discharging the duties imposed under the Act subject to the budget provision or any other directions issued by the State Government. Section 27 of the Act provides that the Agency shall prepare its budget in respect of the financial year which shall be forwarded to the State Government for consideration and approval. Section 28 of the Act provides that Agency shall prepare its actual report giving true or full account of its activities during the previous financial year which 12 shall be sent to the State Government and the State Government shall cause the report to be placed in each house of the Legislature. Sub-Section-(2) of Section-29 of the Act provides that the accounts of the Agency shall be audited in consultation with the Comptroller and Auditor General of India or his representative the Accountant General, Bihar. Section-33 of the Act empowers the State Government to issue general or special direction to the Agency on matters of policy as it thinks fit and the Agency is bound to carry out such directions. In terms of Section-35 of the Act members officers and servants of the agency are public servants within the meaning of Section-21 of the Indian Penal Code. Under Section-38 of the Act the State Government is empowered to make rules not inconsistent with the Act for carrying out all or any of the purposes of the Act which has already been framed. Under Section- 39 of the Act the Board of the Agency with the previous approval of the State Government is to make regulations not inconsistent with the provisions of the Act or the Rules framed thereunder for carrying out its functions as detailed in various clauses of sub-Section-(2) of Section-39 of the Act. It is submitted with reference to Sub-Clause(c) of Sub- 13 Section-(2) of Section-39 of the Act that the Board of the Agency has not yet framed the service regulations but has adopted the conditions of service applicable to the employees of the State Government under office order No.985 dated 10.8.1999, Annexure-3 and in the light thereof petitioners are entitled for grant of same service conditions, which is applicable to the employees of the State Government. 8. Learned counsel for the petitioners with reference to the afore enumerated provisions of the Act submitted that Agency is the creation of the act of Legislature for discharging the welfare functions of the estate so as to augment agricultural production in the State for the betterment of the farmers artisans and labourers by executing schemes and programmers for agricultural, animal husbandry, fisheries, forestry development, which is the inherent function of the various government departments including the administrative department of the Agency i.e. Water Resources Department of the State and the employees serving the Agency should be allowed the same terms and conditions of service which is allowed to the employees serving the Administrative Department, 14 namely, the Water Resource Department of the Government in the light of the decision of the Board of the Agency contained in office order No.985 dated 10.8.1999, Annexure-3 as thereunder the Board of the Agency resolved to apply the service conditions applicable to the Government employees of the State to the employees of the Agency. 9. In support of the aforesaid submission learned counsel for the petitioners has relied upon the judgment of the Hon’ble Supreme Court in the Case of Som Prakash Rekhi Versus Union of India and Another, reported in (1981) 1 Supreme Court Cases 449 Paragraphs-31 and 32 and submitted that by depriving the employees of the Agency the same service conditions which is applicable to the employees of the Government Department the State Respondents are violating the fundamental rights of the petitioners enshrined in Chapter-III of the Constitution of India and this Court should intervene in the matter and direct the State Respondents to release such grant which is not only required for executing the various schemes formulated by the Agency but also to enable the Agency to meet its establishment expenditure. In this Connection reference is made to the provisions 15 contained in Sections-24, 25, 27 and 28 of the Act whereunder funds/budget of the Agency is required to be approved by the State Government on the basis of the actual report and audited account received from the Agency coupled with the fact that Agency is bound to accept and carry out all the directions of the State. Learned counsel next relied upon the Division Bench judgment of this Court in the case of Bihar Rajya Khadi Gram Udyog Board Karyakarta Sangh and Others Versus State of Bihar and Others, reported in 1996(1) BLJ 682, Paragraph-11 and 13 and submitted that from scheme of the Act and the express provision thereof it would appear that Agency is constituted by the State Government, its Chairman and Managing Director as also the members are appointed by the State Government and hold office during the pleasure of the state Government. The duties enjoined upon the Agency is performed by the Board/Executive Committee with the assistance of its officers and servants and express provision has been made for appointment of such officers and servants by the Agency on such emoluments and on such conditions as may be laid down in the regulation to be framed by the Board of the Agency 16 with the approval of the State Government. Similarly in the matter of allocation of funds the budget has to be prepared by the Agency and approved by the State Government, under Section-25 of the Act the direction issued by the State Government is binding on the Agency. According to the learned counsel for the petitioners aforesaid statutory provision lead to irresistible conclusion that the obligation to meet legitimate expenses of the Agency cannot be denied by the State. It is further submitted that in order to perform its statutory functions the Agency has to maintain the establishment and incur expenses if the objectives of the Act has to be performed by the Agency and that necessarily cast an obligation to pay the officers and servants of the Agency the emoluments prescribed. It is further submitted that the Agency does not carry on any commercial activity so as to make profit nor does it perform any other function which may enable it to generate funds to meet its obligation. The over all control of the Agency vested in the State Government carries with it the obligation to meet the legitimate expenses incurred by the Agency in the performance of statutory functions which is nothing but the welfare functions of the State. Learned counsel for the 17 petitioners with reference to the judgment of the Hon’ble Supreme Court in the case of Allahabad Bank and Another Versus All India Allahabad Bank Retired Employees Association, reported in (2010) 2 Supreme Court Cases 44 Paragraphs-36, 38 submitted that office of the Agency being an establishment under the Payment of Gratuity Act, 1972 unless exempted by the competent authority under the said Act has to pay gratuity to the employees of the Agency who are entitled for such payment in terms of the provisions of the Payment of Gratuity Act, 1972. In this connection, it is asserted by the learned counsel for the petitioners that the office of the Agency has not been exempted from payment of gratuity to its employees, it is the responsibility of the State Government to make available the necessary fund to the Agency for payment of gratuity amount to the retiring employees of the Agency. 10. State respondents have opposed the prayer made in the two writ application by filing counter and supplementary counter affidavit affirmed by the under Secretary serving in the Water Resources Department. In the counter affidavit it has been stated that the Agency has been 18 constituted under Section-3 of the Act and is a body corporate i.e. an autonomous institution, the Act does not impose any responsibility upon the State Government to pay the salary and allowance to the employees of the Agency and they are not entitled to claim parity of salary including revision of pay as is being allowed to the Government employees. With reference to the provisions contained in Sections-10 and 24 of the Act it has been submitted that the Agency is empowered to augment its own resources and if the Agency is able to generate its own resources it can allow pay revision and better service condition to its employees but the State Government is not obliged to release such grant which shall enable the Agency to meet its establishment expenditure as no special responsibility is cast under the Act on the State Government to meet the establishment and other expenditures of the Agency. Request of the Agency to release funds for granting pay revision benefit to the employees of the Agency was considered by the cabinet committee on economic affairs and coordination and the Committee having discussed the matter in its meeting held on 24.6.2003 rejected the request of the Agency for grant of revised scale 19 of pay to the employees of the Agency and the decision was communicated to the Chairman of the Agency under letter dated 25.7.2003, Annexure-B to the counter affidavit filed on behalf of respondent no.2. It is further submitted that the similar prayer made on behalf of the other employees serving the Agency was considered in batch of writ applications which was considered and disposed of under orders dated 3.5.2007 passed in C.W.J.C. No.11320 of 2002 and another single Judge of this Court rejected such prayer and this Court should also take the same view and dismiss the writ application. 11. The counsel for the Agency accepted the position that Agency is discharging the welfare functions of the state as it is executing schemes for augmenting agricultural production in the State by modernizing the irrigation system so as to enable the farmers, labourers and artisans living within the area of operation of the Agency to improve their financial, social and other conditions. It is also submitted by the Agency that in appreciation of the work and duties discharged by the employees of the agency the board of the agency in its meeting held on 29.6.1999 vide agenda item no.13 resolved to grant its employees the same service condition 20 which is being given to the employees of the State government and issued office order no 985 dated 10.8.1999 Annexure-3 but in the light thereof as the budget proposal submitted by it is not being approved and released by the state government the agency is not in a position to grant the benefit of the 5th pay revision and the pay parity to its employees with that of the employees of the State government. 12. Having regard to the scheme of the Act and the express provisions thereof it is held that the Agency has been constituted under Sections-3 and 4 of the Act to discharge the welfare function of the estate by formulating plan/programme/scheme for the integrated rural and agricultural development of the territory within the area of its operation as is envisaged under Sections- 9 and 10 of the Act. The Chairman and Managing Director as also the other members of the