Case: THE STATE OF BIHAR Vs. DR. SACHINDRA NARAYAN

administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words where a persons legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest. Therefore even if substantive protection of such expectation is contemplated that does not grant an absolute right to a particular person. It simply ensures the circumstances in which that expectation may be denied or restricted. A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil. The protection is limited to that extent and a judicial review can be within those limits. But as discussed above a person who bases his claim on the doctrine of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim. In considering the same several factors which give rise to such legitimate expectation must be present. The decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest. If it is a question of policy, even by way of change of old policy, the courts cannot interfere with a decision…..xxx xxx xxx35….It can therefore be seen that legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited. It would thus appear that there are stronger reasons as to why the legitimate expectation should not be substantively protected than the reasons as to why it should be protected. In other words such a legal obligation exists whenever the case supporting the same in terms of legal principles of different sorts, is stronger than the case against it. As observed in Attorney General for New South Wales case: ?T o strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adrift on a featureless sea of pragmatism. Moreover, the notion of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law.? If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference…..?21. In a judgment reported as Ram Pravesh Singh and Others v. State of Bihar and Others (2006) 8 SCC 381 , the Court was examining the decision of the State Government that the assets and the liabilities of a Society should be transferred to the State Electricity Board, but not the services of the employees to the Board. It was the said decision of the State which came up for consideration before this Court. It was held that the Board never agreed nor decided to take services of any of the employees of the Society. Therefore, it cannot be said that there was any regularity or predictability or certainty in action which can lead to a legitimate expectation. It was held:-?22. The Board had never agreed nor decided to take services of any of the employees of the Society. In fact, it is not even the case of the appellants that the Board had at any point of time held out any promise or assurance to absorb their services. When the licence of the Society was revoked, the State Government appointed a committee to examine the question whether the Board can take over the services of the employees of the Society. The Committee no doubt recommended that the services of eligible and qualified employees should be taken over. But thereafter the State Government considered the recommendation and rejected the same, apparently due to the precarious condition of the Board which itself was in dire financial straits, and was contemplating retrenchment of its own employees. At all events, any decision by the State Government either to recommend or direct the absorption of the Societys employees was not binding on the Board, as it was a matter where it could independently take a decision. It is also not in dispute that for more than two decades or more, before 1995, the Board had not taken over the employees of any private licensee. There was no occasion for consideration of such a course. Hence, it cannot be said that there was any regularity or predictability or certainty in action which can lead to a legitimate expectation.?22. In view of the above judgments, legitimate expectation is one of the grounds of judicial review but unless a legal obligation exists, there cannot be any legitimate expectation. The legitimate expectation is not a wish or a desire or a hope, therefore, it cannot be claimed or demanded as a right. The payment of pension in the past will not confer an enforceable right in favour of the Institute or its employees.23. Thus, the resolution of the Board of the Institute to implement a retirement benefit scheme from its own resources will not bind the State Government to pay the amount of pension to the employees of the Institute. The employees of such Institute cannot be treated at par with the employees of the State Government nor the State can be burdened with the responsibility to pay pension to the employees of the Institute.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. Section 6 of the Act empowers the Board to hold control and administer the property and the funds of the Institute. The Board is further empowered to create posts and appoint officers with a condition that a post of which emoluments exceed rupees one thousand per month shall not be created without the previous sanction of the State Government. Therefore, the Board has freedom to create posts and to hold, control and administer its property and the funds, but the post carrying an emolument of rupees one thousand per month or more cannot be created without the previous approval of the State Government. Though the proviso to Section 6(2) of the Act requires approval of the State Government in respect of creation of post carrying pay of more than Rs.1000/-, but the intention is that any financial expenditure of recurring nature would require the approval of the State Government. Therefore, if the amount of pension exceeds rupees one thousand per month, the same could not be claimed from the State Government as a right without approval. The State Government cannot be called upon to bear the burden of the pension as such scheme was not approved or even sought for. The provision of payment of pension in the Budget of the State Government is a voluntary act not enforceable by a writ of mandamus. The release of grant is in discretion of the grantor and cannot be forced by the grantee.16. It is true that in certain financial years as per documents on record, the amount of pension was specifically mentioned while granting grant to the Institute, but such amount is in discretion of the State and cannot be enforced by a writ of mandamus. There is no obligation on the State to disburse the grant towards the pension amount in terms of the Act or the Rules or even in terms of the resolution of the Board.The money contributed to the Institute by the State Government is one source of the fund of the Institute fund. Section 9(3) of the Act provides that the funds shall be applied towards meeting the expenses of the Institute including expenses incurred in exercise of its powers and discharge of its functions under the Act. Therefore, the retirement pension scheme, at best can be treated to be a part of obligation of utilization of funds of the Institute but such obligation to bear the amount of pension fund is not on State Government as it is not mandated either by Section 8 or Section 9 of the Act.19. The argument of learned counsel for the Institute is that the State Government has provided funds for payment of pension for the last many years, therefore, the Institute and the employees of the Institute have legitimate expectations to receive the amount of pension, is again not tenable.In view of the above judgments, legitimate expectation is one of the grounds of judicial review but unless a legal obligation exists, there cannot be any legitimate expectation. The legitimate expectation is not a wish or a desire or a hope, therefore, it cannot be claimed or demanded as a right. The payment of pension in the past will not confer an enforceable right in favour of the Institute or its employees.23. Thus, the resolution of the Board of the Institute to implement a retirement benefit scheme from its own resources will not bind the State Government to pay the amount of pension to the employees of the Institute. The employees of such Institute cannot be treated at par with the employees of the State Government nor the State can be burdened with the responsibility to pay pension to the employees of the Institute.