Legitimate Expectation can be Inferred from Sanction of Law or Custom- Supreme Court

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February 01, 2019

In this recent case, the Two-Judge Bench of the Supreme Court delved into the analysis of the Doctrine of Legitimate Expectation and held that pious hope even leading to moral obligation cannot amount to a legitimate expectation. The 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.

Case name: The State of Bihar & Anr. v. Dr. Sachindra Narayan & ors.

In the present case, the State has assailed the High Court of Patna’s order, whereby the Court directed the appellant to provide financial assistance for payment of the arrears as well as current pension to the Respondents i.e. employees of the Anugraha Narayan Sinha Institute of Social Studies, Patna.

The Appellants have averred that the resolution of Board of the Institute was that the Retirement Benefit Scheme was to be operated from the resources of the Institute and that “no separate grant would be sought for it from the State Government”. Therefore, the financial burden of the Retirement Benefit Scheme cannot be foisted upon the State.

On the other hand the Respondent argued that the State Government’s earlier contribution towards the amount of pension has created legitimate expectation of the employees of the Institute that they are entitled to pension at par with the employees of Patna University.

Bench’s Verdict

The Two-Judge Bench of the Supreme Court allowed the appeal and made the following observations in the case:

  • That State’s contribution towards the amount of pension was in discretion of the State and cannot be enforced by a writ of mandamus. There is 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.
  • That in terms of the Act and Rules governing the functioning of Institute, 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 by the Act.
  • Doctrine of Legitimate Expectation- In order to explain the case at hand, the Apex Court also made reference to it’s verdict in the case of Union of India & Ors. v. Hindustan Development Corporation & Ors., wherein it was held that a pious hope even leading to moral obligation cannot amount to a legitimate expectation. The 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.

Thus, the Court remarked that 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 payment of pension in the past will not confer an enforceable right in favour of the Institute or its employees.

The entire case can be accessed here.