Thursday, January 31, 2019

There Cannot Be Any Legitimate Expectation Unless A Legal Obligation Exists: SC

Unless a legal obligation exists, there cannot be any legitimate expectation, the Supreme Court has held.

The bench comprising Justice Dhananjay Y Chandrachud and Justice Hemant Gupta, in State of Bihar vs. Dr. Sachindra Narayan, were considering a contention raise that, since the State Government had provided funds for payment of pension for the last many years, the Institute and the employees of the Institute have legitimate expectations to receive the amount of pension.

Read Full Judgment

The bench observed that 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 said that payment of pension in the past will not confer an enforceable right in favour of the Institute or its employees.
The court reiterated that a pious hope even leading to moral obligation cannot amount to a legitimate expectation. "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 bench said.
The court allowed state's appeal against the judgment of the division bench of Patna high court which directed it 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..
The bench said: "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."
The court said that, in this case there was 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 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.", the bench said setting aside the division bench order.

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