of Bihar Vs. S.A. Hassan & Anr  Insc 111 (5 March 2002)
Phukan & P. Venkatarama Reddi Phukan, J.
two appeals by special leave arise from the judgment dated 05-02-1999 of the Patna High Court, Ranchi Bench. Briefly
stated facts are as follows:- The MGM Medical College used to be run by a
private registered society. The respondents in these two appeals were employees
of the College.
Bihar Private Medical Colleges (Taking Over) Act, 1977 (for short 'the Act'),
the State Government by issuing a notification under sub-section (1) of Section
3 of the Act took over the management of the college on 22nd of January, 1979.
In terms of the provisions of the Act both the respondents continued as
employees of the college on an ad hoc basis and, thereafter, their services
were regularised in terms of Section 6 of the Act. They retired from the
service on attaining the age of superannuation and their pension and pensionary
benefits were granted counting the period of service from the date of taking
over of the college till the date of retirement. Both the respondents filed two
separate writ petitions before the High Court claiming that they are entitled
to get the benefit for the period of service from the initial appointment in
the college under the private management till their date of retirement. Both
the petitions were heard together and by the impugned judgment, writ petitions
were allowed and the benefits were directed to be given by the State
Government. Hence, the State is in appeal before this Court.
the impugned judgment we find that the matter came up before a learned Single
Judge of the High Court who after noticing two conflicting decisions on the
subject directed the matter to be placed before the Full Bench after obtaining
the order of the Hon'ble Chief Justice. In the impugned judgment, the Division
Bench was of the opinion that it was not a fit case that may be referred to a
Full Bench as the point involved was no longer res integra 'inasmuch as the
question has already been decided in several cases by the Division Bench of
this Court'. Reference was made by the Division Bench to some earlier judgments
of the court. Accordingly, by the impugned judgment, relief as prayed for was
granted by allowing both the writ petitions.
Mathur, learned counsel for the State of Bihar has drawn our attention to some other decisions of the High Court
wherein a contrary view was expressed. Therefore, Mr. Mathur has submitted that
these conflicting views have to be resolved by this Court so that similar
disputes which may come up in future may be decided in terms of law laid down
by this Court. The learned counsel has fairly stated that in case the impugned
judgment is set aside, State will not ask for refund of any pension or pensionary
benefits granted to the employees of the college. In regard to the present
appeals, the learned counsel has stated that as there was no stay order by this
Court of the impugned judgement, the benefits to both the respondents ought to
have been granted and if not granted it will be so done by the State Government
and the result of these appeals would not affect their cases.
have perused some of the judgments of the High Court, copies of which are on
record and we find that High Court has not assigned any reason for counting or
refusing to count the period of service for the purpose of pensionary benefit
while the employees were serving in the college before it was taken over. In
fact no reference was made by the High Court to the provisions of the Act, more
particularly Section 6. Therefore, we have to examine the present dispute with
reference to the relevant provisions of the Act.
6 of the Act deals with the determination of terms of teaching staff and other
employees of the medical colleges taken over by the State Government and as the
present controversy has turned almost entirely upon the meaning and effect of
the provisions of this section, it will be convenient to extract the said
Determination of terms of the teaching staff and other employees of college.-
from the date of the notified order, all the staff employed in the college
shall cease to be the employees of the College body.
that they shall continue to serve the College on an ad hoc basis till a
decision under sub-section (3) and (4) is taken by the State Government.
State Government will set up one or more Committees of experts and
knowledgeable persons which will examine the bio-data of each member of the
teaching staff and ascertain whether appointment, promotion or confirmation was
made in accordance with the University Regulations and in keeping with the
guidelines laid down by he Medical Council of India and take into consideration
all other relevant materials including length of service in the college, and
submit its report to the State Government.
State Government on receipt of the report of the Committee or Committees, as
the case may be, will decide in respect of each member of teaching staff on the
merits of each case, whether to absorb him in Government service or whether to
terminate his service or to allow him to continue on an ad hoc basis for a
fixed term or on contract and shall, where necessary, redetermine the rank,
pay, allowance and other conditions of service.
State Government shall similarly determine the term of appointment and other
conditions of service of other categories of staff of the college on the basis
of facts to be ascertained either by a Committee or by an officer entrusted
with the task and the provisions of sub- section (2) and (3) shall apply
mutatis mutandi to such case." Sub-section (1) of Section 6 of the Act
provides in clear and explicit terms that from the date of the notification
issued under sub-section (1) all members of the staff employed in the college
shall cease to be employees of the college body. The effect of this provision
is that the respondents ceased to be employees of the erstwhile management of
the college. At the same time, the proviso to the said sub-section (1) declares
that the staff employed in the college shall continue to serve in the college
on an ad hoc basis till a decision under sub- sections (3) and (4) is taken by
the State Government. Therefore, both the respondents continued to serve the
college on an ad hoc basis and as a result, whatever the contract of employment
which the employees had with the erstwhile Management, came to an end. Thus,
from the date of taking over the college, the respondents ceased to be
employees of the erstwhile management and they became employees of the State
Government on an ad hoc basis. This ad hoc appointment was subsequently regularised
and, therefore, they became permanent employees of the State Government. As on
the date of taking over the college, the terms of appointment between the erstwhile
management and the respondents ceased to exist and they became employees of the
State Government on an ad hoc basis, they cannot claim any benefit for the
service rendered by them in the college while it was under private management,
there being no specific provision to count the previous service to any extent.
Ramchandran, learned senior counsel appearing for the respondents has submitted
that the private management was liable to pay service benefits to the
respondents such as pension etc. and as the college was taken over by the State
Government, this liability has passed on to the State Government. In this
connection learned senior counsel has drawn our attention to sub-section (3) of
Section 3 of the Act. The said sub-section reads as follows:- "3.(3) All
the liabilities and obligations of the College under any agreement or contract
entered into bonafide before the date of taking over shall devolve and shall be
deemed to have devolved on the State Government." Sub-section (1) of
Section 3 of the Act provides for the taking over of a private medical colleges
by issuing a notification and according to sub- section (2) of the said section
whatever assets and properties the college had, these would vest in the State
Government and sub-section (3) provides for devolution of all the liabilities
and obligations of the College on the State Government. This sub-section (3)
would operate where the assets of the college were taken over by the State
Government in terms of sub-section(1). According to the learned senior counsel
for the respondents, these liabilities would also include pension and other pensionary
liabilities of the respondents while they were employees of the college before
it was taken over. But there is no material on record to show that the
erstwhile Management was liable for any pension or pensionary liabilities in
relation to its employees. Moreover, Section 6 which deals specifically with
the subject of determination of terms and conditions of the teaching staff and
other employees of the college, but it does not mention anything about giving weightage
of past service for any purpose. There is also no order of State Government in
this regard in terms of sub-section (3) of Section
therefore, do not find any force in the contention of Mr. Raju Ramachandran,
learned senior counsel for the respondents.
senior counsel for the respondents has submitted that the High Court by various
decisions has settled the position that the employees are entitled to get their
pension and other retiral benefits after counting their past service in the
College prior to its taking over by the Government and therefore on the
principle of stare decisis this court may not reinterpret the Act and upset the
settled position. This contention has no force inasmuch as from the judgments
made available to us and the judgment of the learned Single Judge we find that
there are conflicting decisions of the High Court as stated earlier and,
therefore, the present appeal has been filed.
senior counsel for respondents has submitted that as the Act is completely
silent on the question of counting the previous service towards pension and in
the absence of any specific provision, there is a legitimate expectation of
respondents to get their pension and other retiral benefits after counting the
past period of service in the college. There is neither factual nor legal basis
for such principle. The legislature in explicit and unambiguous terms has laid
down in Section 6 of the Act that after taking over of the college the
employees shall cease to be employees of the erstwhile management and they
shall continue as ad hoc employees of the Government till such time as they are
absorbed in accordance with the procedure laid down in the Act. Therefore, this
contention has no force.
counsel for the appellant has drawn our attention to the Bihar Pension Rules
more particularly Rule 58 and has submitted that a government employee can
claim pension only if he qualifies the conditions laid down in the rule. We may
extract below the relevant portions of Rule 58 of the said Rules:- "58.
The service of a Government servant does not qualify for pension unless it
conforms to the following three conditions:- First The service must be under
The employment must be substantive and permanent.
service must be paid by Government.
Rule 58 is clear that a Government servant does not qualify for pension unless
he conforms to three conditions viz.
service must be under Government,
employment must be substantive and permanent, and
service must be paid by the Government. In view of this Rule the respondents
cannot claim the period of their service before the college was taken over as
they were neither under the employment of the Government nor their salaries
were paid by the Government. Under the specific Rule 58 the past service
rendered by the respondents in the college while it was under the private
management cannot be counted.
are, therefore, of the opinion that the respondents are not entitled to claim
the benefit of the period of their service while they were under the employment
of the erstwhile management for the purpose of calculation of their pension and
pensionary liabilities. Consequently, we hold that the findings of the High
Court are not sustainable in law. Accordingly, appeals are allowed by setting
aside the impugned judgment. The judgment rendered by us will come into effect
prospectively i.e. apply to the cases of employees who retire on superannuation
after the date of this judgment. The State Government shall not be entitled to
claim refund of any pension or pensionary benefits already granted to any
employees and also to the respondents. We are giving this direction especially
for the reason that the State Government allowed a number of judgments in
adverse to it to become final and there was consequent uncertainty in legal
are allowed by setting aside the judgment. Parties to bear their own cost.