2024 INSC 524 Page 1 of 33

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No. ______ / 2024

(Arising out of Special Leave to Appeal (C.) No. 7130 / 2024)

State of Uttar Pradesh and Anr. ….Appellant(s)

versus

Virendra Bahadur Katheria and Ors. ….Respondent(s)

JUDGEMENT

SURYA KANT, J.

Leave granted.

2. This Civil Appeal is directed against the order dated 06.04.2023

passed by a Division Bench of the High Court of Judicature at Allahabad

(hereinafter, ‘High Court’), whereby an intra-court appeal preferred by

the State of Uttar Pradesh (hereinafter, ‘State’) challenging the Single

Judge’s judgement dated 02.02.2018 was dismissed on the ground of

delay. Consequently, the judgment of the Single Judge, which effectively

directed to grant the pay scale of 7500-12000 to Sub-Deputy Inspectors

of Schools/ Assistant Basic Shiksha Adhikaris (hereinafter,

‘SDI/ABSA’) and the Deputy Basic Shiksha Adhikaris (hereinafter,

‘DBSA’), with effect from the year 2001, stood affirmed.

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3. Since the instant appeal arises out of a long-drawn saga, where

multiple rounds of litigation occurred inter-se the parties before various

fora, including this Court, it would be appropriate to narrate the factual

events before delving into the legal issues raised before us concerning

the law of precedents, the doctrine of merger and the principle of res

judicata.

FACTS

4. The controversy centers around the alleged discrepancy in the pay

scales of SDI/ABSA and DBSA of the Basic Education Department,

State of Uttar Pradesh vis-à-vis the Headmasters of Junior High Schools

(hereinafter, ‘Headmaster’). The genesis of this disparity can be traced

back to the Government Order dated 20.07.2001 (hereinafter, ‘2001

Order’), issued on the basis of the recommendations of the Fifth Central

Pay Commission, pursuant to which the pay scales of State Government

teachers, including Headmasters, were brought on par with Central

Government teachers, with effect from 01.07.2001.

5. The effect of the 2001 Order, in essence, was that the basic pay

scale of Headmasters stood revised from 4625-125-7000 to 6500-200-

10500, with a further revision of their Selection Grade from 4800-150-

7650 to 7500-250-12000. There was, however, no alteration in the pay

scales of SDI/ABSA and DBSA and resultantly, their pay scales became

lesser than those granted to the Headmasters.

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6. In order to gain a comprehensive understanding of this issue, it is

essential to take into account the revision in pay scales across various

posts over time.

7. The pay scale granted for the post of Sub-Deputy Inspector of

Schools (SDI) since the year 1945, with consequent revisions, is

depicted in a tabular format hereinbelow:

Pay Scale with Effect From Pay Scale Granted to Sub -

Deputy Inspector of Schools

(Rupees)

1945 120-200

1955 120-300

1965 150-350

1972 325-575

01.07.1979 540-910

01.01.1986 1400-2300

01.01.1996 4500-7000

01.07.2001 Not Revised

The position of the ABSA, being equivalent to that of SDI, likewise bore

the same pay scale of 4500-7000, with effect from 01.01.1996.

8. The pay scale assigned for the post of DBSA since 1945, with

subsequent revisions, is outlined in the table below:

Pay Scale with Effect From Pay Scale Granted to Deputy

Basic Shiksha Adhikari

(Rupees)

1945 200-250

1955 250-250

1965 250-600

1972 450-950

01.07.1979 770-1600

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01.01.1986 2000-3500

01.01.1996 6500-10500

01.07.2001 Not Revised

9. Lastly, the pay scale apportioned for the post of Headmaster since

1945, with subsequent revisions, is detailed in the table below:

Pay Scale with Effect From Pay Scale Granted to the

Headmaster, Junior High

Schools (Rupees)

1945 75-175

1955 100-200

1965 100-125

1972 240-390

01.07.1979 490-860

01.01.1986 1450-2300

01.01.1996 4625-7000

(4800-7650)*

01.07.2001 6500-10500

(7500-12000)*

*Selection Grade Pay Scale

10. It may be seen from the above table that the post of Headmaster

was placed in the pay scale of 4625-7000 w.e.f. 01.01.1996. Thereafter,

the said pay scale was revised to 6500-10500 w.e.f. 01.07.2001, and in

addition, the Selection Grade of Rs. 7500-250-12000 was also granted

through the 2001 Order. Additionally, Headmasters also got a

promotion grade pay scale of 8000 -13500 vide a subsequent

government order dated 03.09.2001. No corresponding revision in the

pay scales of SDI/ABSA and DBSA was, however, made w.e.f.

01.07.2001.

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11. The perceived anomaly in pay scales being the hallmark of

disputation, it may be useful to reflect the differentiation in pay scales,

which have been granted to SDI/ABSA, DBSA and Headmasters since

1945, along with subsequent revisions , by way of the following

comparative tabulation:

Pay Scale with

Effect From

Pay Scale Granted

to SDI/ABSA

(Rupees)

Pay Scale

Granted to DBSA

(Rupees)

Pay Scale Granted

to the Headmaster

(Rupees)

1945 120-200 200-250 75-175

1955 120-300 250-250 100-200

1965 150-350 250-600 100-125

1972 325-575 450-950 240-390

01.07.1979 540-910 770-1600 490-860

01.01.1986 1400-2300 2000-3500 1450-2300

01.01.1996 4500-7000 6500-10500 4625-7000

(4800-7650)*

01.07.2001 Not revised Not revised 6500-10500

(7500-12000)*

*Selection Grade Pay Scale

12. The recruitment to the posts of SDI/ABSA is governed by the Uttar

Pradesh Subordinate Educational (Sub Deputy Inspector of Schools)

Service Rules, 1992 (hereinafter, ‘Rules’). As per the Rules, 80% of the

posts of SDI/ABSA are mandated to be filled by direct recruitment

through the Public Service Commission, 10% of the posts are to be filled

up through selection from amongst the Headmasters of Junior High

Schools and the remaining 10% of the posts are filled through the

promotion of Extension Teachers and Craft Teachers working in the CT

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Grade, who were appointed before 21.04.1996 under the Redeployment

Scheme. On the other hand, mode of appointment to the post of

Headmasters is by way of promotion from among the Assistant Teachers

of Junior High Schools. Furthermore, it seems that at one point of time,

the SDI/ABSA and DBSA used to exercise supervisory and

administrative control over Headmasters and Teachers of Junior High

Schools.

13. That being said, in order to fully comprehend the origin of this

strife and the parallel, as well as the subsequent legal proceedings

leading to the current appeal, it would be beneficial to examine the

entire set of events hereafter from the vantage point of two rounds of

litigation.

THE FIRST ROUND OF LITIGA TION

14. The Uttar Pradesh Vidhyalay Nirikshak Sangh (hereinafter,

‘Caveator’), along with the Respondents, filed WP No. 675/2002 before

the High Court, alleging discrepancies and seeking the grant of pay

scale of 7500-12000 to SDI/ABSA and corresponding higher pay scale

to DBSA, on identical terms as per the 2001 Order. A Division Bench of

the High Court, through its judgment dated 06.05.2002, allowed the

writ petition after observing that the SDI/ABSA and DBSA were

supervising the work of Headmasters and were previously receiving

higher pay scales before further the revision w.e.f. 01.07.2001. The High

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Court viewed that when the pay scale of Headmasters was revised on

20.07.2001, the pay scales of SDI/ABSA and DBSA also ought to have

been simultaneously revised. Consequently, the High Court directed the

State to grant the pay scale of 7500-12000 with effect from 01.07.2001

to SDI/ABSA and corresponding higher pay scale (8000-13500) with

effect from 01.07.2001 to the DBSA. The High Court further directed

the State to consider granting the writ-petitioners therein pay scales

higher than that of Headmasters on the premise that they had been

enjoying a better pay scale prior to 20.07.2001.

15. The aggrieved State challenged the High Court’s order through

Civil Appeal No. 8869/2003 (arising out of SLP(C) No. 900/2003) before

this Court. During the pendency of that Appeal, the State held

discussions with the Caveator and referred the matter to the Chief

Secretary’s Committee (hereinafter, ‘Rizvi Committee’). The Rizvi

Committee made a proposal dated 12.01.2010 (hereinafter, ‘Proposed

Policy’), to grant the pay scale of 7500-12000 for the post of Assistant

Basic Education Block Officer, which was essentially created by

merging the posts of SDI/ABSA and DBSA , thereby creating a singular

cadre of 1031 posts. As per the Proposed Policy, the pay scale of 7500-

12000 to the newly designated post of Block Education Officer would be

notionally effective from 01.01.2006, with actual monetary benefits

being given with effect from 01.12.2008. The restructuring, as

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proposed, would make available one Officer at the Tahsil / Block level

to assist Basic Education Officers and District Inspector of Schools in

carrying out their administrative and supervisory duties. Further, the

Proposed Policy was made subject to the filing of an application and

affidavit based on mutual consent of the parties. The High Court’s order

dated 06.05.2002 was to be accordingly modified to the above extent

pursuant to a joint application of the parties in the pending appeal.

16. This Court, after noticing the cause of pay anomaly that occurred

in the year 2001, referred to and relied upon the proposed Policy dated

12.01.2010 and eventually found no reason to interfere with the High

Court’s judgement dated 06.05.2002 and dismissed the appeals vide

the order dated 08.12.2010, on the ground that the State itself had

taken an appropriate decision to rectify the pay discrepancies and

hence, no further cause as such survive d requiring any further

adjudication. This Court also noted the fact that no joint application

based on mutual consent of the parties had been filed. This Court, in

no uncertain terms, further directed that…. “the Government having

taken appropriate decision cannot go back from implementing the

same”. The operative part of the order dated 08.12.2010 reads as

follows:-

“We do not find any error to have been committed by the High Court

in issuing the impugned directions. However, there is no need to

further dilate on this issue since the Government itself appears

to have realised the anomaly in fixation of the pay scales as

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is evident from the proceedings dated 12th May, 2010

emanating from Secretary, Finance Department, Govt. of

Uttar Pradesh and addressed to the Secretary, Basi c

Education Department, Govt. of Uttar Pradesh. The

proceedings disclose that an appropriate decision has been

taken to rectify the pay discrepancies in respect of the post

of Deputy Inspector of Schools/Deputy Basic Education

Officer of the Department of Education on the

recommendations of the Pay Committee (2008) . The operative

portion of the said proceedings reads as under:-

"According to the above as a result of cadre constitution getting

sanctioned imaginary the pay scale of Rs. 7500-12000/- from

01.01.2006 for the post of Block Education Officer, the real

benefit be given from 01.12.2008."

By the same proceedings, a decision was taken to file the same into

this Court together with application supported by an affidavit in as

much as such decision was taken with mutual consent of the parties.

But for whatever reason, the same has not been filed into the Court.

Since the Government itself has taken appropriate decision

in the matter as is evident from the proceedings referred to

hereinabove, no further cause as such survives requiring any

further adjudication of this appeal and the Government

having taken appropriate decision cannot go back from

implementing the same.

In the circumstances, the Civil Appeals are accordingly dismissed.”

[Emphasis supplied]

17. Subsequently, an application seeking clarification of the above

order was also filed before this Court, which was dismissed as

withdrawn for being not maintainable vide order dated 08.07.2011. We

may, however, clarify that the details of such an application are neither

part of the record of this appeal nor a copy of it was tendered by learned

counsel for the parties.

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18. Nevertheless, and in compliance to this Court’s order dated

08.12.2010, the Appellant-State issued Government Order dated

14.07.2011 (modified on 15.07.2011) (hereinafter, ‘2011 Order’),

whereby 1031 posts of ‘Block Education Officer’ were created by

merging 1360 posts of SDI/ABSA and 157 posts of DBSA, with the

sanctioned pay scale of 7500-12000, to be given with effect from

01.01.2006 notionally, with actual benefits accruing from 01.12.2008.

THE SECOND ROUND OF LITIG ATION

19. It is pertinent at this stage to provide some insight into the

background in which the Respondents instituted parallel proceedings

before the High Court during the pendency of the First Round of

Litigation. In order to avoid repetition and for the purposes of the

present proceedings, we propose to refer the factual matrix pertaining

to Respondent No. 1 only since Respondent Nos. 2 and 3 are similarly

placed.

20. Respondent No. 1 was initially appointed to the post of Assistant

Teacher in a Primary School on 16.11.1971. He was subsequently

promoted to Assistant Teacher, Junior High School on 12.01.1977 and

thereafter as Headmaster, Junior High School on 05.07.1982.

Subsequently, Respondent No. 1 was appointed as the Sub -Deputy

Inspector of Schools within the aforementioned 10% promotion quota

through selection from the post of Headmaster in accordance with the

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1992 Rules, vide the order dated 19.03.1997. Consequently, he was

placed in the pay scale of 4800-7650 and was receiving a monthly salary

of Rs. 6000/-. However, with the revision of the pay scale of

Headmasters to 7500-12000 with effect from 01.07.2001, Respondent

No. 1 was inadvertently placed in the revised higher pay scale instead

of what he was entitled to for the post of SDI/ABSA. Respondent No.1

eventually retired as a Sub-Deputy Inspector on 31.07.2004 upon

reaching the age of superannuation.

21. Though Respondent No. 1, after his retirement, was paid his

provident fund dues, his pension and gratuity amounts were withheld

on the premise that while working as a Sub-Deputy Inspector, he was

erroneously paid salary in a higher pay scale sanctioned for the post of

Headmaster of Junior High School. This was followed by recovery orders

dated 07.12.2005 and 26.06.2007, directing to adjust the excess

amount paid to Respondent No. 1 from his retiral dues. He was further

directed to deposit the excess amount within one week, failing which

the same would be adjusted from his retiral dues. Respondent No. 1

preferred Writ-A No. 35611/2007 (hereinafter, ‘2007 Writ’) before the

High Court, seeking quashing of the abovementioned recovery orders

and further sought a direction to the State to pay the entire pension

along with arrears calculated at the last pay drawn by him along with

24% interest on the delayed payment, and also to release the remaining

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10% of the gratuity amount along with interest from the date it became

due.

22. The High Court, vide an interim order dated 03.08.2007, directed

the State to pay forthwith the retiral dues admissible to Respondent No.

1, excepting the amount which was paid in excess to him. It is the

specific case of the State that this order was duly complied with.

23. The High Court kept the above stated 2007 writ petition pending

so as to await the outcome of the first round of litigation. Meanwhile,

when the State issued the 2011 Order, the Respondents once again

approached the High Court vide Writ A No. 44344/2011 (hereinafter,

‘2011 Writ’), challenging the 2011 Order while also seeking directions

for the grant of pay scale of 7500-12000 with effect from 01.01.1996

and consequential payment of arrears. The High Court then clubbed

together the Writ Petitions of 2007 and 2011.

24. A Learned Single Judge of the High Court vide judgement dated

02.02.2018 allowed both the writ petitions, quashed the 2011 Order

and directed the State to pass appropriate orders within a period of

three months (hereinafter, ‘Single Judge Judgement’). The Learned

Single Judge was of the view that the State had wrongfully made

misrepresentations to this Court with an intent to nullify the benefits

otherwise accrued in favour of the Respondents.

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25. The State Government, who until then was so vigorously pursuing

the lis, for reasons which are still unbeknownst to us, went into a state

of slumber. Neither did the State challenge the Single Judge’s dictum

through an intra-court appeal within a reasonable time, nor did it take

any conscious decision to honour and implement the said Judgement.

26. The State authorities, therefore, invited the initiation of contempt

proceedings, which the Respondents filed alleging willful disobedience

of the Single Judge Judgement , referred to above. Thereafter, on

23.05.2019, the State authorities woke up and filed an inordinately

delayed Special Appeal Defective No. 532/2019 before the Division

Bench of the High Court, challenging the Single Judge Judgement.

27. The High Court, first in its order dated 10.01.2023 in Contempt

proceedings directed the compliance of the Single Judge’s Judgement

within 15 days. The Principal Secretary, Department of Basic

Education was further show caused to file an affidavit disclosing as to

how many contempt proceedings had been initiated against him for

non-compliance of the orders passed by the High Court and their

outcome, the number of pending contempt proceedings and as to why

cost of pending litigation be not recovered from him. After such requisite

affidavit having been filed, the High Court passed an order on

07.02.2023 initiating proceedings for criminal contempt against the

Principal Secretary, Department of Basic Education and further

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directed the personal presence of the Chief Secretary and the Additional

Chief Secretary (Finance), on the next date of hearing – 14.02.2023.

28. The State then approached this Court against the High Court’s

orders dated 10.01.2023 and 07.02.2023. This Court, vide the order

dated 13.02.2023, stayed the effect of the abovementioned orders ,

keeping in abeyance the contempt proceedings until further orders. It

was, however, clarified that the pendency of Special Leave Petitions

would not pose an impediment to the Division Bench of the High Court

in deciding the State’s intra-court appeal expeditiously.

29. In the midst of all of these proceedings and in light of this Court’s

order dated 13.02.2023, the High Court passed the Impugned Order

dated 06.04.2023 dismissing the application for condonation of delay of

428 days filed by the Appellant-State. Consequently, the State’s intra-

court appeal stood rejected, giving rise to the instant proceedings.

30. The sole issue that arises for our consideration, thus, is whether

the SDI/ABSA and DBSA are entitled to the higher pay scale of 7500-

12000 with effect from 01.07.2001 or whether it has been appropriately

granted to them from 01.12.2008 onwards?

CONTENTIONS OF THE PARTIES

31. Learned Additional Solicitor General of India and Learned

Additional Advocate General, while arguing for the State of Uttar

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Pradesh, urged that the consequence of the directions issued by the

Learned Single Judge is that the earlier Division Bench judgement of

the HC dated 06.05.2002 stands restored even though the said

judgement was no longer in existence as it stood merged in the self-

speaking order dated 08.12.2010 passed by this Court in Civil Appeal

No. 8869/2003, which was directed against the said judgement of the

High Court. They pointed out that the financial implications of the

directions issued by the Single Judge of the High Court are enormous,

as an additional burden of approximately Rupees 1500 Crores shall be

fastened on the state exchequer.

32. They fervently submitted that regardless of the negligence of some

officers who failed to file the intra-court appeal promptly and did not

render any satisfactory explanation for the inordinate delay, the

Division Bench of the HC ought to have appreciated the impersonal

character of the State and condoned the delay so that the intra court

appeal could be heard on merits. It was emphasized that in deference

to the order dated 08.12.2010 of this Court, which explicitly approved

the proposed settlement between the parties, the State Government

issued the 2011 Order whereby substantial relief with actual arrears of

pay with effect from 01.12.2008 had been already granted to the

Respondents and other similarly placed employees of their cadre. The

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2011 Order, it was urged on behalf of the Appellant State, was in

conformity with the final order passed by this Court.

33. The Learned ASG relied upon the often quoted three-judge bench

decision of this Court in Kunhayammed v. State of Ker ala

1 to

reiterate that once this Court had granted leave against the High Court

judgement dated 06.05.2002, the doctrine of merger would apply and it

stood merged with the reasoned order dated 08.12.2010, which was

eventually passed by this Court. The Appellant-State was thus obligated

to give effect to the order passed by this Court. According to Learned

ASG, this Court vide the order dated 08.12.2010 dismissed the appeals

after noticing the subsequent events that unfolded and held that ‘no

further cause as such survives requiring any further adjudication of this

appeal’. Further, this Court also pointed out that no application based

on mutual consent of the parties was moved. In other words, the

Learned ASG urged, that this Court rendered the matter infructuous,

leaving nothing to be adjudicated even though no formal application

based on mutual consent was moved. It was then contended that the

2011 Order was issued in a bona fide manner to give effect to the

directions mandating that the State would not go back f rom

implementing the proposal approved by this Court.

1

(2000) 6 SCC 359.

Page 17 of 33

34. Per contra, Mr. Dushyant Dave, Learned Senior Counsel

representing the Respondents and learned counsel for the Caveator, Ms.

Shubhangi Tuli, vehemently opposed the claim put forth on behalf of

the State. They argued that the Respondents, who are retired senior

citizens, have been dragged by the State in avoidable litigation for the

last twenty-two years, despite this being a simpliciter case of

acknowledgement and removal of the pay anomaly. They contended that

the Appellants have consistently defied the Court’s orders and, being in

contempt, are making flimsy and false excuses to overreach the judicial

system. They urged that firstly, the State’s plea regarding the financial

burden of approximately Rupees 1500 Crores is unsubstantiated and

has no factual foundation. Secondly, the mere consequence of financial

burden is not a valid ground to denounce a judicial dictum.

ANALYSIS

35. We have considered the rival submissions in the backdrop of the

protracted litigation between the parties, which has led to the passing

of multiple orders by this Court and the High Court, a brief reference to

which has already been made. The relevant records have also been

perused.

36. It may be seen that the instant round of litigation is triggered by

the Single Judge’s Judgement against which the highly belated intra-

court appeal has been summarily dismissed by the Division Bench of

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the High Court. We are thus required to scrutinize the Single Judge’s

Judgement to determine whether the consequential directions issued

therein are justified and in tune with the previous rounds of litigation.

37. We are constrained to observe at the outset that the judgment of

the Learned Single Judge appears to be wholly misconceived, on several

parameters, in light of the bizarre observations made with reference to

the decision of this Court dated 08.12.2010. Learned Single Judge

seems to have been swayed by a hypothetical reason that the intricacies

of the Hindi language employed in the proposed Policy were beyond the

comprehension of the Hon’ble Judges of the Supreme Court, who were

misled to believe as if it was more than just a mere proposal. The

Learned Single Judge observed that the State capitalized on this

misrepresentation before this Court and, consequently, issued the 2011

Order. It has been further observed that on the basis of such distortion

and in blatant contravention of the High Court’s previous judgment

dated 06.05.2022, the State finagled to release a higher pay scale to

SDI/ABSA, aligning it with that of Headmasters, on a notional basis

from 01.01.2006 thereby restricting the actual monetary benefits from

01.12.2008 only.

38. In our considered opinion there is nothing in the order dated

08.12.2010 of this Court on the basis of which the Learned Single Judge

of the High Court could draw such sweeping inferences. All that this

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Court unequivocally said was that in light of the Proposed Policy

decision taken by the State Government to rectify the pay discrepancies

and to grant certain reliefs to the Respondents or their cadre mates, no

issue survived for adjudication. To elucidate more simply, this Court

was satisfied that the Proposed Policy was fair enough to close the

pending lis. As a follow up, the State was obligated to formalize and give

effect to the said proposal, which the Appellants eventually did through

the 2011 Order.

39. However, the Learned Single Judge, while relying on this Court’s

decision in Supreme Court Employees ’ Welfare Association v. Union

of India and another,

2 made two pertinent observations, which we

propose to analyse in the present context, i.e. — (i) since the Supreme

Court in its order dated 08.12.2010 dismissed Civil Appeal No.

8869/2003 and did not discern any error of fact or law in the decision

of the High Court dated 06.05.2022, the latter would consequently

operate as res judicata inter se the parties; and (ii) it is impermissible

for the State Government to overreach and render nugatory a judgement

of the High Court, once it has attained finality.

40. In this regard, it seems to us that the High Court has construed

narrowly the ratio of the decision of this Court in Supreme Court

Employees’ (supra) which encapsulated that when a Special Leave

2

1989 (4) SCC 187.

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Petition is dismissed in limine, there is no law laid down under the aegis

of Article 141 of the Constitution. Hence, the judgement against which

such petition was preferred becomes final and conclusive so as to

operate as res judicata between the parties thereto. In stark contrast,

the dismissal of Civil Appeal No. 8869/2003 by this Court vide order

dated 08.12.2010 was not a dismissal simpliciter or in limine. Instead,

the appeal was dismissed after taking into consideration the root-cause

and consequential steps taken by the State towards rectifying the

anomaly in the grant of revised pay scales. To say it differently, the Civil

Appeal was not dismissed on the premise that the judgement of the High

Court dated 06.05.2002 was a correct statement of law. This Court in

fact found that no issue survived for adjudication, for the obvious

reason that the State Government had volunteered to redress the

grievance of the Respondents and other similarly placed employees

through the proposed Policy. It is true that the Proposed Policy did not

enure a decision binding on both sides for want of mutual consent.

However, leaving aside a microscopic evaluation, this Court expressly

approved the said Proposed Policy. The observation that nothing

survived in the appeal for adjudication leaves no room to doubt that not

only was this Court satisfied with the proposal mooted before it, it also

bound down the State and commanded it to implement the same.

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41. Equally pertinent to note here is that this Court had granted leave

and thereafter dismissed the Civil Appeal by way of a brief reasoned

order. Consequently, the High Court Judgment dated 06.05.2002 stood

merged with the order dated 08.12.2010 of this Court. In legal parlance,

the High Court Judgment lost its entity and was subsumed in the order

passed by this Court.

42. The doctrine of merger although has its roots in common law

principles, but has been deeply interspersed in Indian jurisprudence,

through a series of decisions. This Court in Kunhayammed (supra)

elucidated this doctrine which has been further affirmed and reiterated

in Khoday Distilleries Ltd. (now known as Khoday India Ltd.) &

Ors. v. Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd.,

Kollegal (Under Liquidation) represented by the Liquidator .

3 In

Kunhayammed (supra), this Court has expressly laid down as follows:

“ 42. “To merge” means to sink or disappear in something else; to

become absorbed or extinguished; to be combined or be swallowed up.

Merger in law is defined as the absorption of a thing of lesser importance

by a greater, whereby the lesser ceases to exist, but the greater is not

increased; an absorption or swallowing up so as to involve a loss of

identity and individuality. (See Corpus Juris Secundum, Vol. LVII, pp.

1067-68.)

44. To sum up our conclusions are:

(i) Where an appeal or revision is provided against an order

passed by a court, tribunal or any other authority before

superior forum and such superior forum modifies, reverses o r

affirms the decision put in issue before it, the decision by the

subordinate forum merges in the decision by the superior

3

(2019) 4 SCC 376

Page 22 of 33

forum and it is the latter which subsists, remains operative

and is capable of enforcement in the eye of law.

(ii) The jurisdiction conferred by Article 136 of the Constitution is

divisible into two stages. First stage is up to the disposal of prayer

for special leave to file an appeal. The second stage commences if

and when the leave to appeal is granted and special leave petition

is converted into an appeal.

(iii) Doctrine of merger is not a doctrine of universal or unlimited

application. It will depend on the nature of jurisdiction exercised by

the superior forum and the content or subject-matter of challenge laid

or capable of being laid shall be determinative of the applicability of

merger. The superior jurisdiction should be capable of reversing,

modifying or affirming the order put in issue before it. Under Article

136 of the Constitution the Supreme Court may reverse,

modify or affirm the judgment-decree or order appealed

against while exercising its appellate jurisdiction and not

while exercising the discretionary jurisdiction disposing of

petition for special leave to appeal. The doctrine of merger

can therefore be applied to the former and not to the latter.

(iv) An order refusing special leave to appeal may be a non- speaking

order or a speaking one. In either case it does not attract the doctrine

of merger. An order refusing special leave to appeal does not stand

substituted in place of the order under challenge. All that it means is

that the Court was not inclined to exercise its discretion so as to

allow the appeal being filed.

(v) If the order refusing leave to appeal is a speaking order, i.e. gives

reasons for refusing the grant of leave, then the order has two

implications. Firstly, the statement of law contained in the order is a

declaration of law by the Supreme Court within the meaning of

Article 141 of the Constitution. Secondly, other than the declaration

of law, whatever is stated in the order are the findings recorded by

the Supreme Court which would bind the parties thereto and also

the court, tribunal or authority in any proceedings subsequent

thereto by way of judicial discipline, the Supreme Court being the

apex court of the country. But, this does not amount to saying that

the order of the court, tribunal or authority below has stood merged

in the order of the Supreme Court rejecting special leave petition or

that the order of the Supreme Court is the only order binding as res

judicata in subsequent proceedings between the parties.

(vi) Once leave to appeal has been granted and appellate

jurisdiction of Supreme Court has been invoked the order

passed in appeal would attract the doctrine of merger; the

order may be of reversal, modification or merely affirmation.

(vii) On an appeal having been preferred or a petition seeking leave to

appeal having been converted into an appeal before Supreme Court

the jurisdiction of High Court to entertain a review petition is lost

Page 23 of 33

thereafter as provided by sub-rule (1) of Rule (1) of Order 47 of the

C.P.C.”

[Emphasis supplied]

43. These decisions indubitably hold that if Special Leave was not

granted and the petition was dismissed by a reasoned or unreasoned

order, the order against which such Special Leave Petition is filed would

not merge with the order of dismissal. However, once leave has been

granted in a Special Leave Petition, regardless of whether such appeal

is subsequently dismissed with or without reasons, the doctrine of

merger comes into play resulting in merger of the order under challenge

with that of the appellate forum, and only the latter would hold the field.

Consequently, it is the decision of the superior court which remains

effective, enforceable, and binding in the eyes of the law, whether the

appeal is dismissed by a speaking order or not.

4

44. The High Court therefore fell in error on assuming that its

previous decision dated 06.05.2002 was intact and enforceable ,

independent of the order passed by this Court in the Civil Appeal arising

therefrom. On the same analogy, the High Court’s holding that its

previous decision dated 06.05.2002 would operate as res-judicata, also

cannot sustain being erroneous in law. We say so for the reason that

4

Pernod Ricard India Private Limited v. Commissioner of Customs, 2010 (8) SCC 313.

Page 24 of 33

the final and binding order between the parties is the one dated

08.12.2010, passed by this Court.

45. We may now advert to the observations made by the High Court

regarding the State allegedly rendering its order dated 06.05.2002

nugatory through its executive actions. The High Court, as a matter of

principle, has rightly held that the State has no authority whatsoever to

annul a Court decision through its administrative fiat. Even legislative

power cannot be resorted to, to overrule a binding judicial dictum,

except that the legislature can remove the basis on which such

judgment is founded upon. However, these settled principles may not

be attracted to the facts and circumstances of the instant case.

46. It goes without saying that the 2011 Order was issued by the State

after this Court’s acknowledgement of the Proposed Policy initiated to

rectify the pay scale anomaly. This Court, upon review, did not find fault

with the proposed measures and instead, deemed them appropriate for

addressing the prevailing pay discrepancy. Thus, the measures taken

by the State were in deference to and not in defiance of this Court’s

orders. To the extent above, the view taken by the High Court is legally

and factually incorrect.

47. Regardless to what has been held above, we are in agreement with

the Learned Single Judge that the pay benefits which had been released

to the writ petitioners arrayed before it, and who had meanwhile retired

Page 25 of 33

from service, ought not to have been withdrawn and that too with the

added measure of recovery orders being fastened upon them. Such a

recourse to effect recovery initiated by the State is contrary to the

principles evolved by this Court in State of Punjab v Rafique Masih

(White Washer) and others,

5 wherein recovery from retired employees

or employees who are due to retire within one year of the order of such

recovery, did not get the seal of approval. Thus, to this limited context,

the Single Judge’s direction deserves to be upheld. Ordered accordingly.

48. Turning to the impugned order passed by the Division Bench of

the High Court and as already recounted in the facts, the State’s intra-

court appeal has been dismissed on account of the inordinate delay of

428 days in filing. The Division Bench observed that the plea taken by

the State regarding movement of the file from one desk to another,

particularly in the backdrop of the undertaking provided during the

contempt proceedings, did not constitute sufficient ground(s) to

condone the delay. The Division Bench accordingly rejected the

application for condonation of delay and consequently dismissed the

appeal.

49. It is an admitted fact that the State authorities failed to avail their

remedy of intra-court appeal within a reasonable time. It was only when

contempt proceedings were slapped on them that the authorities woke

5

2015 (4) SCC 334.

Page 26 of 33

up and filed the appeal, which, by that time, was highly belated. This

Court has in a catena of decisions elaborated the parameters and carved

out such exceptional circumstances which may constitute a valid

ground to condone the delay in the interest of justice. These principles

include the recent approach that no undue leverage can be extended to

the State or its entities in condonation of delay and that no special

privilege can be extended to the State or its instrumentalities.

6

50. Nevertheless, the Courts have been cognizant of the fact that as a

custodian of public interest, the affairs of the State are run and

controlled by human beings. Various factors, including the bona fide

formation of erroneous opinion, negligence, lack of initiative, lack of

fortitude, collusion or connivance, red tapism, blurred legal advice etc.,

sway the action or inaction of these functionaries. While waiving the

public interest vis-à-vis an individual’s interest who claims to have

meanwhile acquired a vested right on the expiry of the limitation period,

the courts invariably tilt towards the public interest, keeping in view the

irreversible loss likely to be suffered by the public at large.

7 Even in the

case of private litigants, where the appellate court finds that the

opposite party can be suitably compensated with cost measures, a

6

State of Madhya Pradesh & Ors v. Bherulal (2020) 10 SCC 654.

7

State of Nagaland v. Lipok AO, (2005) 3 SCC 752; Executive Officer, Antiyur Town Panchayat

v. G. Arumugam (Dead) by Legal Representatives, (2015) 3 SCC 569.

Page 27 of 33

lenient and liberal approach is followed in terms of condonation of

delay.

51. We may, however, hasten to add that whether a just and valid

ground for condonation of delay is made out or not, largely depends on

the facts and circumstances of each case and no one size fits all formula

can be applied in this regard. It is, however, not necessary for us to

further delve into this issue and/or determine whether the Appellant-

State has made out a case for condonation of delay in filing their intra-

court appeal before the High Court. We rather proceed on the premise

that even if it was a fit case for condonation of delay, will it serve the

cause of justice to set aside the impugned order of the Division Bench

and remit the intra-court appeal for a fresh adjudication on merits?

52. We cannot be oblivious of the fact that the parties started litigating

in the year 2002. The dispute had engendered out of a perceived pay

anomaly. The State itself acknowledged that there was some disparity

in the pay scales that needed to be rectified. Hence, it constituted the

Rizvi Committee. That Committee made recommendations , which were

broadly fair and just, as various means and measures were

recommended to redress the grievances of employees like th e

Respondents. These measures included the merger of cadres,

redesignation and upgradation of posts, the introduction of new pay

scales, with an assurance that the redesignated posts would be on a

Page 28 of 33

pay scale higher than that of the feeder cadre. Even if these measures

were not to the entire satisfaction of the Respondents, the fact remains

that the anomalies stood removed.

53. It needs no emphasis that prescription of pay scale for a post

entails Policy decision based upon the recommendations of an expert

body like Pay Commission. All that the State is obligated to ensure is

that the pay structure of a promotional or higher post is not lower than

the feeder cadre. Similarly, pay parity cannot be claimed as an

indefeasible enforceable right save and except where the Competent

Authority has taken a conscious decision to equate two posts

notwithstanding their different nomenclature or distinct qualifications.

Incidental grant of same pay scale to two or more posts, without any

express equation amongst such posts, cannot be termed as an anomaly

in a pay scale of a nature which can be said to have infringed the right

to equality under Article 16 of our Constitution.

54. Equally well settled is that the creation, merger, de-merger or

amalgamation of cadres within a service to bring efficacy or in the

administrative exigencies, is the State’s prerogative. The Court in

exercise of its power of judicial review would sparingly interfere in such

a policy decision, unless it is found to have brazenly offended Articles

14 and 16 of the Constitution.

Page 29 of 33

55. There was no pay parity in the instant case between Headmasters

on one hand or the SDI/ABSA etc. on the other. It was a mere co-

incidence that the group of these posts carried the same pay scale for a

long time, till the State Government decided to grant a higher revised

pay scale to the Headmasters. This led to an anomalous situation as

the Headmasters were amongst the feeder cadre categories for

appointment by selection against 10% posts of SDI/ABSA. Such an

incongruent situation could be averted by amending the Rules and

deleting Headmasters from the zone of consideration from 10% posts.

In that case, the State would have faced no financial burden which has

fallen upon it as a consequence to the implementation of the Rizvi

Committee recommendations. In other words, the aforesaid disparity

could be removed without legitimizing the claim of the Respondents for

grant of a pay scale higher or equal to that of Headmasters.

56. Be that as it may, the Appellant-State on being directed by the

High Court, agreed to recalibrate and recompense the employees like

Respondents and put up a proposal before this Court in the previous

round of litigation. That proposal was indeed approved by this Court.

The State in furtherance thereto issued the necessary orders granting

restructured benefits to the employees like the Respondents. Still

further, the Respondents also got monetary benefits over and above the

State’s proposal, in furtherance of the High Court decisions dated

Page 30 of 33

06.05.2002 and dated 02.02.2018. Most of them have retired from

service long back and are now senior citizens. The monetary benefits

have already been utilised by them on their personal needs.

57. That being the state of affairs, it seems to us that remittance of

the case to the High Court is not likely to bring quietus to the endless

litigation. The party who gets aggrieved by the judgement of the Division

Bench owing to the previous record will most likely approach this Court

again. The litigation has taken its toll on the financial and health

conditions of the private Respondents, in their old age. We are,

therefore, of the considered view that as long as the Respondents can

be suitably compensated without subjecting them to any recovery and

in such a manner that the relief so granted does not become a precedent

for one and all to open a Pandora’s box and drag the State into a flood

of litigation, it would be in the interests of one and all that such like

litigation which has the potentiality of multiplying in the future, should

be brought to an end without any delay.

58. We, therefore, find it a fit case to invoke the extraordinary powers

held by this Court under Article 142 of the Constitution. It is well settled

that Article 142 empowers this Court to pass orders in the ‘larger

interest of the administration of justice’ and ‘preventing manifest

injustice’.

8 This is more so in cases involving protracted litigation and

8

Nidhi Kaim v. State of Madhya Pradesh, (2017) 4 SCC 1.

Page 31 of 33

delay,

9 such as in the present case. It is a matter of common knowledge

that the cases entailing discord over pay parity, are frequently subjected

to prolonged litigation. These squabbles often lead to parties enduring

significant challenges and hardships over extended periods as they

await adjudication. Regrettably, the delay in resolving such matters

usually renders them infructuous by the time a decision is reached.

59. Thus, in light of the long pending litigation between the parties,

the rights of the parties involved, and to give quietus to the issue, we

deem it appropriate to pass orders towards doing substantial justice.

CONCLUSION AND DIRECTIONS

60. We, therefore, allow this appeal in part and issue the following

directions and conclusions by invoking our powers under Article 142 of

the Constitution, for the removal of discrepancy in the pay scales

prescribed for the posts of SDI/ ABSA and DBSA:

i. The appeal is allowed in part. The Impugned Judgement of the

Division Bench in its entirety and that of the Single Judge of the

High Court in part, are set aside.

ii. The 2011 Order is approved in its entirety.

iii. The private Respondents and their colleagues in the same cadre

(before and after the redesignation of their posts) are held entitled

to the pay scale, strictly in accordance with the 2011 Order. The

9

Abbobaker v. Mahalakshmi Trading Co., (1998) 2 SCC 753.

Page 32 of 33

Respondents and other members of their cadre and all members of

the Caveator-organization shall be entitled to the pay scale granted

by the said Government Order, notionally from 01.01.2006 and

actually from 01.12.2008.

iv. However, any payment made to the Respondents more than what

they are entitled to with effect from 01.12.2008, towards pay or

retiral benefits shall not be recovered from them. The judgement of

the Single Judge dated 02.02.2018, which set aside such recovery,

is accordingly affirmed.

v. The arrears of pay or pension, if not already paid, shall be paid to

the Respondents or their colleagues in the same cadres within a

period of four months along with interest @ 7% per annum.

vi. Those who have retired from service, their pension and other retiral

benefits shall be re-fixed accordingly, along with arrears with effect

from 01.12.2008, to be paid within four months along with interest

@ 7% per annum.

vii. The 2011 Order is meant only for the officials belonging to the

State’s Education Department, namely the Respondents and their

colleagues of the same cadre. Employees of other Government

Departments shall not be entitled to take benefit thereof as a matter

of right. The benefits flowing from this order are also restricted to

the employees like Respondents of the State Education Department

Page 33 of 33

and only to those who fall in the category of the posts that were the

subject matter of consideration before the Rizvi Committee.

viii. This order shall not be taken as a precedent by employees of other

departments to claim revised or higher pay scales.

61. The present appeal is disposed of in the above terms. Accordingly,

pending applications are also disposed of.

……………………………… J.

(Surya Kant)

……………………………… J.

(K.V. Viswanathan)

New Delhi

15.07.2024