'Enhancement Of Superannuation Age A Policy Matter' : Supreme Court Sets Aside Allahabad HC Direction On Retirement Age In NOIDA

The Supreme Court has set aside a judgment of the Allahabad High Court which directed that retrospective effect from September 2002 should be given to the decision taken by the New Okhla Industrial Development Authority (NOIDA) in September 2012 to enhance the retirement age of its employees from 58 to 60.

Allowing an appeal filed by the NOIDA against the judgment, a bench comprising Justices DY Chandrachud and MR Shah observed that the High Court trenched upon a domain of executive policy regarding retirement age.

The Supreme Court observed in its judgment :

"Whether the age of superannuation should be enhanced is a matter of policy. If a decision has been taken to enhance the age of superannuation, the date with effect from which the enhancement should be made falls within the realm of policy...

The infirmity in the judgment lies in the fact that the High Court has trenched upon the realm of policy making and has assumed to itself, jurisdiction over a matter which lies in the domain of the executive. Whether the age of superannuation should be increased and if so, the date from which this should be effected is a matter of policy into which the High Court ought not to have entered".

The High Court passed the judgment in a writ petition filed be certain employees of NOIDA who were aggrieved with the fact that only prospective effect was given to the enhancement of retirement age. The High Court took the view that not giving the benefit of increase in the age of superannuation to those employees who had retired before September 30, 2012 was arbitrary.

Disagreeing with this view of the High Court, the Supreme Court observed :

"Whether the decision to increase the age of superannuation should date back to the resolution passed by NOIDA or should be made effective from the date of the approval by the State government was a matter for the State government to decide. Ultimately, in drawing every cut-off, some employees would stand on one side of the line while the others would be positioned otherwise. This element of hardship cannot be a ground for the High Court to hold that the decision was arbitrary. When the State government originally decided to increase the age of superannuation of its own employees from fifty-eight to sixty years on 28 November 2001, it had left the public sector corporations to take a decision based on the financial impact which would result if they were to increase the age of superannuation for their own employees"

'Promissory Estoppel' and 'Doctrine of Legitimate Expectation' not applicable

Some of the respondents placed reliance on the principles of promissory estoppel and legitimate expectation on the basis of an earlier representation made by the NOIDA to the Uttar Pradesh Government in 2009 to increase the retirement age.

However, the Supreme Court refused to accept these arguments.

The judgment authored by Justice DY Chandrachud stated :

"Since the enhancement of the age of superannuation is a 'public function' channelised by the provisions of the statute and the service regulations, the doctrine of promissory estoppel cannot be used to challenge the action of NOIDA.  Though NOIDA sought the approval of the State government for the enhancement with 'immediate effect', it never intended or portrayed to have intended to give retrospective effect to the prospectively applicable Government order. The representation of NOIDA could not have given rise to a legitimate expectation since it was a mere recommendation which was subject to the approval of the State Government. Hence, the doctrine of legitimate expectation also finds no application to the facts of the present case".

Case Details

Title : New Okhla Industrial Development Authority and others vs BD Singhal and others

Bench : Justices DY Chandrachud and MR Shah

Appearances : Advocate Ravindra Kumar for NOIDA; Vinod Diwakar, Additional Advocate General for  Uttar Pradesh; Advocate Tanya Shree for respondents.

Citation : LL 2021 SC 297

Click here to read/download the judgment