2015 (4) TMI 272 - HC - Indian Laws

Court rules employees' service conditions protected; CAG to maintain accounts, private trust quashed

The court emphasized that the service conditions of employees could not be altered to their detriment as per specific clauses in the notification ... Refusal of the Comptroller and Auditor General of India (CAG) to maintain the GPF accounts of the employees of the College - altering of service conditions - Held that:- the petitioners were employees of the Chandigarh Administration and as a sequitur the office of the CAG was duty-bound to maintain the accounts including the GPF accounts. The circumstances under which the College attained the status of a deemed University and thereafter its functioning was put under a registered society form a part of the notification dated 8.7.2004 from which we have extracted in extenso to the extent applicable to the issue in question. This notification sets out the terms and conditions qua the employees and the very essential substratum qua the employees is the continuation of their service conditions. Thus, it is really not in issue that the service conditions of the petitioners cannot be altered to their determent in view of the specific Clause-29 and other clauses. It is not as if it is for the first time that the audit is sought to be entrusted to the CAG’s office so as to invite Section 20 of the Comptroller and Auditor-General (Duties, Powers and Conditions of Service) Act, 1971, which has a proviso that such a request made qua a body which has not been entrusted to the CAG would be with the consultation of the CAG. The CAG has been carrying on the audit in the present case earlier and the conditions of the notification converting the College into a deemed University and thereafter entrusting its management to a Society registered for the said purpose itself require a continued role of the CAG. - order of the Accountant General (A&E), Punjab and Union Territory of Chandigarh conveyed under the cover of the letter of the PEC is quashed and a direction is issued that the GPF accounts of the employees of the PEC (now a deemed University) would be maintained by the office of the CAG. The respondents will take the consequent action qua transfer of funds from the private Trust to the CAG. - Decided in favour of Appellant. Issues:1. Interpretation of notification converting the college into a deemed University and vesting its administration in a society.2. Challenge to the refusal of the Comptroller and Auditor General of India (CAG) to maintain the General Provident Fund (GPF) accounts of the employees.3. Legality of creating a private trust to manage the GPF accounts.Issue 1: Interpretation of notification converting the college into a deemed University and vesting its administration in a society:The judgment dealt with employees of a college under the Chandigarh Administration who became part of a deemed University under the University Grants Commission Act, 1956. The notification converting the college into a deemed University and vesting its administration in a society contained clauses ensuring the protection of employees' service conditions. The Court emphasized that the service conditions of the employees could not be altered to their detriment as per specific clauses in the notification. The notification also mandated the audit of accounts, including GPF accounts, to be entrusted to the CAG since the society was fully funded by the Chandigarh Administration. The Court held that the CAG was duty-bound to maintain the accounts, rejecting contentions that the CAG could wash its hands off the issue.Issue 2: Challenge to the refusal of the CAG to maintain GPF accounts:The primary issue pressed before the Court was the refusal of the CAG to maintain the GPF accounts of the employees, which was considered detrimental to the employees. The CAG's decision was based on the premise that the employees were no longer Government servants after the college became a deemed University. However, the Court disagreed, emphasizing that the employees' service conditions could not be altered to their detriment, and the responsibility of the CAG to maintain the accounts remained, as the society was fully funded by the Chandigarh Administration.Issue 3: Legality of creating a private trust to manage the GPF accounts:The judgment addressed the legality of creating a private trust to manage the GPF accounts of the employees after the CAG refused to do so. The Court highlighted the adverse consequences of not maintaining the accounts by the CAG, including issues related to fund security, taxation implications, and pension fund management. The Court quashed the order creating the private trust and directed that the GPF accounts of the employees would be maintained by the office of the CAG, with instructions for the transfer of funds from the private trust to the CAG. The petitions were allowed, with each party bearing its own costs.