Judicial Interference In Policy Decisions Having Financial Implication Or Cascading Effect Is Unwarranted: Supreme Court

The Supreme Court observed that that interference by the Judiciary in a policy decision having financial implications and/or having a cascading effect is not at all warranted and justified.

In this case, allowing the writ petitions filed by some employees, the Bombay High Court directed the State Government to extend the pensionary benefits to the employees of Water and Land Management Institute (WALMI). The State of Maharashtra and another have preferred the present appeals. The State filed appeal before the Apex Court mainly contending that as per the Service Rules applicable to the employees of WALMI, there is no provision for pension/pensionary benefits. It was further contended that the Pension Rules applicable to the State Government employees shall not be made applicable to the employees of WALMI and therefore they are not entitled to the pensionary benefits.

Therefore, the issue considered in this case was whether the employees of WALMI, which is an independent autonomous entity registered under the Societies Registration Act, are entitled to the pensionary benefits on par with the State Government employees?

It was contended that when a conscious decision had been taken by the State Government after due deliberations, it can be said to be a policy decision and it was decided that the Pension Rules applicable to the State Government employees shall not be made applicable to the employees of WALMI and therefore they are not entitled to the pensionary benefits, the High Court ought not to have interfered with such a policy decision in exercise of powers under Article 226 of the Constitution of India.

Agreeing with this contention, the bench comprising Justices MR Shah and BV Nagarathna (also referring to Punjab State Cooperative Milk Producers Federation Limited and Anr. Vs. Balbir Kumar Walia and Ors., (2021) 8 SCC 784 ) observed:

"As per the settled proposition of law, the Court should refrain from interfering with the policy decision, which might have a cascading effect and having financial implications. Whether to grant certain benefits to the employees or not should be left to the expert body and undertakings and the Court cannot interfere lightly. Granting of certain benefits may result in a cascading effect having adverse financial consequences."

The court noted that a conscious policy decision was taken not to adopt the Pension Rules applicable to the State Government employees in this case. While setting aside the High Court judgment, the bench held that the employees of WALMI are not entitled to the pensionary benefits.:

Grant of pensionary benefits is not a one-time payment. Grant of pensionary benefits is a recurring monthly expenditure and there is a continuous liability in future towards the pensionary benefits. Therefore, merely because at one point of time, WALMI might have certain funds does not mean that for all times to come, it can bear such burden of paying pension to all its employees. In any case, it is ultimately for the State Government and the Society (WALMI) to take their own policy decision whether to extend the pensionary benefits to its employees or not. The interference by the Judiciary in such a policy decision having financial implications and/or having a cascading effect is not at all warranted and justified.

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