THE STATE OF BIHAR & ANR. versus DR. SACHINDRA NARAYAN & ORS.
[2019] 1 S.C.R. 748, Supreme Court of India, 2019
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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THE STATE OF BIHAR & ANR.
v.
DR. SACHINDRA NARAYAN & ORS.
(Civil Appeal No. 884 of 2019)
JANUARY 30, 2019
[DR. DHANANJAYA Y CHANDRACHUD
AND HEMANT GUPTA, JJ.]
Anugraha Narayan Sinha Institute of Social Studies Act,
1964:
ss. 6, 8, 9 and 10 – Payment of Pension – To the employees of
the Institute incorporated under the Act – Responsibility to pay –
Whether on State Government –  As per resolution dated 15.02.1985,
the Board of the institute implemented retiral benefits which were to
be paid by the Institute from its own resources – Pension was paid
to the employees after the resolution, but was stopped from January
2014 – Writ petition seeking direction for payment of pension and
arrears thereof – Petition dismissed by High Court holding that
State was not obliged to pay the pension in view of the resolution –
In intra-court appeal Division Bench of High Court held that the
State was obliged to pay the pension – On appeal, held: The
resolution of the Board of the Institute to implement the retirement
benefit scheme from its own resources will not bind the State
Government to pay the amount of pension – The provision of payment
of pension in the Budget of the State Government was a voluntary
act, and not enforceable by a Writ of Mandamus – Release of grant
is in the discretion of the grantor and cannot be forced by the grantee
– Obligation to bear the amount of pension by the State Government
is not mandated either by
s. 8 or s. 9 of the Act – Payment of pension
in the past, will not confer an enforceable right in favour of the
Institute or the employees.
Administrative Law:
Legitimate Expectation – Held: Legitimate expectation is one
of the grounds of judicial review, but unless a legal obligation exists,
there cannot be legitimate expectation – It is not a wish or a desire
or a hope and hence cannot be claimed as a right.
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Allowing the appeal, the Court
HELD: 1. 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. [Para 23][762-
E-F]
2. Section 6 of the Anugraha Narayan Sinha Institute of
Social Studies Act, 1964 empowers the Board 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.
[Para 15][758-A-D]
3. 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. [Para 16][758-E-F]
4. Sub-Section (1) of Section 8 of the Act mandates the State
Government to contribute a sum of rupees two lacs in each
financial year for the maintenance of the Institute, whereas, sub-
THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN
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Section (2) empowers the State Government to contribute from
time to time, such additional sums as it may deem fit for special
items of research or education work, publication, buildings and
for proper maintenance and development of the Institute.  Such
payment for the special projects, is in discretion of the State
Government in view of the object for which the grant is to be
disbursed, but sub-Section (2) does not include disbursement of
the amount of pension as the contribution is for limited purpose
which is not recurring in nature. [Para 17][758-F-H]
5. The money contributed to the Institute by the State
Government is one source of the fund of the Institute. 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. [Para 18][759-A-B]
6. It is not correct to say 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 expectation to receive the amount of pension. A pious
hope
even leading to moral obligation cannot amount to a
legitimate expectation.  The legitimacy of an expectation can be
inferred only if it is founded on the sanction of law or custom or
an established procedure followed in regular and natural
sequence. [Paras 19, 20][759-C-D]
Union of India & Ors. v. Hindustan Development
Corporation & Ors. (1993) 3 SCC 499 : [1993] 3 SCR
128; Ram Pravesh Singh and Others v. State of Bihar
and Others (2006) 8 SCC 381 : [2006] 6 Suppl. SCR
512 –  relied on.
Case Law Reference
[1993] 3 SCR 128
relied on
Para 20
[2006] 6 Suppl. SCR 512
relied on
Para 21
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 884 of
2019.
From the Judgment and Order dated 13.03.2018 of the  High
Court of Judicature at Patna in LPA No. 1018 of 2017.
Ms. Meenakshi Arora, V.N. Sinha, Sr. Advs., Ms. Abha R. Sharma,
D.S. Pramar, Ms. Sujeeta Srivastava, Saurabh Shandilya,
A. Lakshminarayanan, Kripa Shankar Prasad, Ms. J. Priyadarshini, Advs.
for the appearing parties.
The Judgment of the Court was delivered by
HEMANT GUPTA, J. 1. The present appeal is directed against
an order passed by the Division Bench of the High Court of Judicature
at Patna on 13.03.2018 whereby the Writ Petition was allowed directing
the appellant to provide financial assistance for payment of the arrears
as well as current pension to the employees of the Anugraha Narayan
Sinha Institute of Social Studies, Patna (Institute).
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
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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
as under:
“6. Functions 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, in particular-
(a) hold, 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.
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8. 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.
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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 be credited-
(a) the 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.
THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN
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(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.]
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12. 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 the State.”
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4. 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
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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
following resolution:
“The 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………….   “
7. 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
THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN
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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.
9. Learned Counsel for the appellant argued that the resolution of
Board was that the Retirement Benefit Scheme was to be operated
from the resources of the Institute and that “no separate grant would be
sought for it from the State Government”. Therefore, the financial burden
of the Retirement Benefit Scheme cannot be foisted upon the State.
The pension was resolved to be borne by the Institute from its own
funds. Still further, such resolution of the Board was not approved by the
State Government creating extra financial liability on the State.
10. It is argued that in terms of Section 8 of the Act, the State
Government is to contribute a sum of rupees two lacs in each financial
year or such other sums for research or education work, publication,
buildings and for proper maintenance and development of the Institute.
Such provision does not contemplate payment of recurring expenditure
of pension which is not contemplated by Section 8 of the Act.  The
money contributed by the State Government is one source of the Institute
funds. The Board has limited power to transfer funds from one item to
another item exceeding 20 per cent of the original grant under any item.
The accounts of the Institute are required to be audited.  Thus, it is
contended that though the officers of the State are members of the
Board and that such fact will make the Institute a “State” within the
meaning of Article 12 of the Constitution. But that fact will not make the
Institute as extension of the State Government, as the Institute is a
creation of a separate juristic entity under the State Statute.  The rules
framed in terms of Section 16 of the Act again do not provide for Provident
Fund/Gratuity and for pension. It is argued that the Board as an
independent juristic entity is empowered to prepare its budget but in
terms of the resolution of the Board, financial burden of the pension
scheme cannot be passed on to the State Government.
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11. It is further pointed out that the State Government has disbursed
grant from the year 2002-03 uptill 2010-11 which included the break up
of pension but it was a mistake, which was rectified from the year 2011-
12.  It is contended that the State Government can grant funds under the
heads (1) Grant-in-aid for Salary, (2) Grant-in-aid for creation of
infrastructure, (3) Grant-in-aid other than salary and infrastructure.
Therefore, some amount released towards pension in certain years
including in terms of an order of this Court will not create any right in
favour of the writ petitioners as the role of the State Government is to
give grants as provided in Section 6 of the Act but such grant cannot be
claimed as matter of right.
12. On the other hand, the learned counsel for the Institute-
respondent No. 28, submitted that the State Government has been releasing
Grant-in-aid including amount towards pension since the Board has
passed the resolution in the year 1985.  Reference was made to
communications dated 09.09.2010 and 29.03.2005.  It is also pointed out
that the Chief Minister of the State Government presided over the meeting
of the Board on 28.05.1985, wherein, the poor financial condition of the
Institute was discussed. It was resolved that the three alternative schemes
of retirement benefits, i.e. (i) Contributory Provident Fund; (ii)
Contributory Provident Fund-cum- Gratuity; (iii) General Provident Fund-
cum-Pension-cum-Gratuity including
benefit of commutation of pension
will at all times be the same as provided for in the statutes and Rules of
Patna University from time to time.
13.  It is contended that contribution towards the amount of pension
has created legitimate expectation of the employees of the Institute that
they are entitled to pension at par with the employees of Patna University.
Thus, the employees have legitimate expectations of receipt of pension
from the State Government.  Therefore, the order passed by the Division
Bench of the High Court does not call for any interference.
14. On the other hand, Mr. V. N. Sinha, learned senior counsel
appearing for the respondent Nos. 1 to 27 submitted that the State
Government is bound to disburse the amount necessary for payment of
pension as was being done from the date when the resolution was passed
in the year 1985.  Therefore, it is too late for the State to turn around to
take a plea that the responsibility of the pension amount is not of the
State Government.
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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.
17. Sub-Section (1) of Section 8 of the Act mandates the State
Government to contribute a sum of rupees two lacs in each financial
year for the maintenance of the Institute, whereas, sub-Section (2)
empowers the State Government to contribute from time to time, such
additional sums as it may deem fit for special items of research or
education work, publication, buildings and for proper maintenance and
development of the Institute.  Such payment for the special projects, is
in discretion of the State Government in view of the object for which the
grant is to be disbursed, but sub-Section (2) does not include disbursement
of the amount of pension as the contribution is for limited purpose which
is not recurring in nature.
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18. 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.
20. In the judgment reported as Union of India & Ors. v.
Hindustan Development Corporation & Ors.1, it was held that a pious
hope even leading to moral obligation cannot amount to a legitimate
expectation.  The legitimacy of an expectation can be inferred only if it
is founded on the sanction of law or custom or an established procedure
followed in regular and natural sequence.  It was held: -
“28. Time is a three-fold present: the present as we experience it,
the past as a present memory and future as a present expectation.
For legal purposes, the expectation cannot
be the same as
anticipation. It is different from a wish, a desire or a hope nor can
it amount to a claim or demand on the ground of a right. However
earnest and sincere a wish, a desire or a hope may be and however
confidently one may look to them to be fulfilled, they by themselves
cannot amount to an assertable expectation and a mere
disappointment does not attract legal consequences. A pious hope
even leading to a moral obligation cannot amount to a legitimate
expectation. The legitimacy of an expectation can be inferred
only if it is founded on the sanction of law or custom or an
established procedure followed in regular and natural sequence.
Again it is distinguishable from a genuine expectation. Such
expectation should be justifiably legitimate and protectable. Every
such legitimate expectation does not by itself fructify into a right
and therefore it does not amount to a right in the conventional
sense.
 1 (1993) 3 SCC 499
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33. On examination of some of these important decisions it is
generally agreed that legitimate expectation gives the applicant
sufficient locus standi for judicial review and that the doctrine of
legitimate expectation is to be confined mostly to right of a fair
hearing before a decision which results in negativing a promise or
withdrawing an undertaking is taken. The doctrine does not give
scope to claim relief straightaway from the 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 person’s 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…..
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35….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
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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: “To 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 Others2, 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
 2 (2006) 8 SCC 381
THE STATE OF BIHAR v. DR. SACHINDRA NARAYAN
[HEMANT GUPTA, J.]
A
B
C
D
E
F
G
H
762
SUPREME COURT REPORTS
[2019] 1 S.C.R.
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 Society’s 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.
Consequently, we find that the order of the Division Bench is not legally
sustainable.  Hence, we allow the appeal and dismiss the Writ Petition.
The pending applications, if any, shall stand disposed of.
Kalpana K. Tripathy
                  Appeal allowed.