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

2. The Institute is incorporated by the Anugraha Narayan Sinha Institute of Social Studies Act, 1964, (Act). The Institute has a perpetual succession and a common seal. The Chairman of the Board of Control is a nominee of the State Government. The State Government is also to nominate two persons of eminence in consultation with the Chairman; whereas, the others are ex-officio members such as Vice-Chancellor of Patna University, another Vice-Chancellor to be nominated by the State Government other than that of Patna University in rotation in alphabetical order as per names of Universities; two representatives of the Indian Council of Social Science Research, New Delhi; one representative of the University Grants Commission; one faculty member not below the rank of a Professor and a Secretary to the State Government in the Department of Education and in the Department of Finance.3. In terms of Section 6 of the Act, the Board is the supreme governing body of the Institute and is to exercise all the powers of the Institute. Section 8 mandates the State Government to contribute a sum of rupees two lacs in each financial year for the maintenance of the Institute and such other sums as it may deem fit for special items of research or education work, publication, buildings and proper maintenance and development of the Institute. Section 9 of the Act provides for establishment of Institute Fund, whereas, Section 10 deals with the budget of the Institute. Section 16 of the Act empowers the Board to make rules not inconsistent with the provisions of the Act, whereas, Section 17 empowers the Board to make regulations consistent with the Act and the Rules framed thereunder. The relevant provisions of the Act read asFunctions of the Board. – (1) The Board shall be the supreme governing body of the Institute and shall exercise all the powers of the Institute.(2) Subject to the provisions of this Act the Board shall, inhold, control and administer the property and the funds of the Institute;(b) determine the form, provide for the custody and regulate the use of the common seal of the Institute;(c) determine and regulate all matter concerning the Institute;(d) administer any funds placed at the disposal of the Board for specific purposes;(e) create posts and appoint officers and other employees of the Institute and define their duties and provide for the filling of temporary vacancies:Provided that no post the total emolument of which exceeds Rs. 1,000 per month shall be created without the previous sanction of the State Government;(f) have power to accept transfers on behalf of the Institute of any movable or immovable property to and for the purposes of the Institute.xxx xxx xxx8. Payment to Institute. - (1) The State Government shall contribute to the institute a sum of two lakhs of rupees in each financial year for the maintenance of the institute.(2) The State Government may contribute from time to time such additional sums to the Institute as it may deem fit for special items of research or educational work, publication, buildings and for the proper maintenance and development of the Institute.9. The Institute Fund. - (1) There shall be established a Fund to be called the Anugraha Narayan Sinha Institute Fund which shall be vested in the Institute to which shall bethe balance, if any, standing to the credit of the Anugraha Narayan Sinha Institute of Social Studies, Patna, on the date of commencement of this Act;(b) all moneys contributed to the Institute by the State Government;(c) all moneys received by or on behalf of the Institute from the Central Government;(d) all moneys received by or on behalf of the Institute by way of grants, gifts, donations, benefactions, bequests or transfers;(e) all interests and profits arising from any transaction in connection with any money belonging to the Institute;(f) proceeds from the sale of the journals, pamphlets and books; and(g) all moneys received by the Institute in any other manner or from any other source.(2) All moneys credited to the Fund shall be deposited or invested in such manner as the Institute may, with the approval of the State Government, decide.(3) The Fund shall be applied towards meeting the expenses of the Institute including expenses incurred in the exercise of its powers and discharge of its functions under this Act.10. Budget. - (1) The Director shall, on or before the tenth day of August each year, cause to be prepared and laid before the Board, in such form as may be prescribed by the Board, the budget estimate of the income and expenditure of the Institute for the next financial year.(2) The Board shall, as soon as may be after the tenth day of August but not later than the first day of the following September, examine and approve the estimate with or without modification as it may deem fit and shall forthwith submit a copy thereof to the State Government.(3) The Board may from time to time during the financial year reduce the amount of any item of budget grant or transfer such amount or a portion thereof to any other item of budget grant:Provided that the Board shall have no power to transfer any non-recurring grant for recurring expenditure:[Provided further that the Board shall have no power to transfer from one item to another item an amount exceeding 20 per cent of the original grant under any item.]xxx xxx xxx12. Accounts and audit. - (1) Subject to any rules made by the State Government in this behalf, the accounts of receipts and expenditure of the Institute shall be kept in such manner and in such form as the Board may from time to time prescribe.(2) The Board shall, as soon as may be after closing its annual accounts, prepare an annual statement of accounts in such form as the State Government may from time to time prescribe and forward the same to the Accountant-General, Bihar, by such date as the State Government may, in consultation with the Accountant-General, Bihar, determine.(3) The accounts of the Institute shall be audited by the Accountant-General, Bihar, or some other officer appointed by him in this behalf and the Board shall take suitable action on the matters arising out of the audit report.(3A) The State Government may call upon the Institute to adopt concurrent audit by the Chief Controller of Accounts and Audit of the State Government.(4) The Board shall forward the annual accounts of the Institute together with the audit report thereon to the State Government and the State Government shall cause the same to be laid before the Legislature of the4. In terms of Section 16 of the Act, the Anugraha Narayan Sinha Institute of Social Studies, Rules 1966 (Rules) were framed by the Board. ?Pay? is defined in Rule 2(xii), whereas Rule 9 provides for maintenance of Institute?s provident fund and Rule 19 provides for amendment of the Rules at any time by 2/3 majority of the members at the meeting of the Board.5. In terms of Section 17 of the Act, the Anugraha Narayan Sinha Institute of Social Studies, Patna Regulation, 1966 (Regulations) have been framed, which inter-alia empowers the Board to sanction Dearness Allowance; House Rent Allowance and also the service conditions of the employees of the Institute. Regulation 9 empowers the Board to create such posts as may be necessary and may fix scale of pay and allowances for posts subject to Section 6 of the Act. In terms of Clause 16 of the Regulations, Staff Service Condition Rules have been framed, however, such Rules do not provide for payment of pension.6. The Board in its meeting held on 15.02.1985 passed the followingThe Board accepted the recommendation of the Committee on Retirement Benefits dated 11.2.85 and decided that the scheme as prepared may be implemented, provided that the scheme as reported would be operated from Institute resources and that no separate grant would be sought for it from the Government………….In this factual background, 27 petitioners (respondents 1 to 27 herein), in the present appeal invoked the writ jurisdiction of the High Court for a direction to the respondents (appellants herein) to pay the arrears as well as current pension on the month to month basis which has been stopped from the month of January 2014. The Writ Petition was dismissed on 20.06.2017 holding that the resolution of the Board dated 15.02.1985 was inconsistent with the Act and Rules, therefore, the writ petitioners were not vested with any legal right. Correspondingly, there is no legal obligation on the State to pay and that a writ of mandamus cannot be issued to the authority of the State to act contrary to law. It was also held that, the payment of pension/family pension by the State for the last few years is an illegality, the same cannot be directed to be perpetuated by an order of the Court.8. However, an intra Court appeal was allowed on 13.03.2018 noticing that the Government of Bihar has earmarked grants under the pension head during 2004-05 to 2010-11. It was held that though the recommendations of the Committee on retirement benefits may be implemented, provided that the scheme is operated from the Institute?s resources, but the fact remains that the liability on account of pension was duly mentioned in the annual budget of the State Government, therefore, such release of the funds by the State Government will be in the nature of grant as envisaged under Section 9(g) of the Act. The State Government would be estopped from saying that it never considered payment of pension as a responsibility after about 30 years. The Government approved the budget and provided additional funds to meet the liabilities, therefore, it would amount to consideration and acceptance of responsibility, may be in form of grants only.

Reasoning:
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.