// Use PDO . It is the simplest answer I found after two days of struggling for using complex UNION in Laravel

 $PDO = DB::connection('mysql')->getPdo();

 $billingStmt = $PDO->prepare("

 select * from (SELECT   * 
 FROM     t_statements 
 WHERE    reference_id = $user_id 
 AND      service_provider='FOLDER' 
 AND      bill_name IS NOT NULL 
 ORDER BY bill_name ASC ) AS a 

 UNION ALL 

 SELECT * 
 FROM   ( 
 SELECT   * 
 FROM     t_statements 
 WHERE    reference_id = $user_id 
 AND      service_provider !='FOLDER' 
 AND      bill_name IS NOT NULL 
 ORDER BY (CASE WHEN is_paid = 0 THEN due_date ELSE is_paid END) DESC) b
 
     ");



        $billingStmt->execute();
        $usersBills = $billingStmt->fetchAll((\PDO::FETCH_ASSOC));
        header('Content-Type: application/json');
        $androidUserBills = json_encode($usersBills); // return results as json 

    return response($androidUserBills);

// JSON response

       [
             {
                  "id": "247",
              	  "created_at": "2016-02-23 10:44:33",
		          "updated_at": "2016-02-23 16:58:57",
		          "t_user_account_id": "245",
		          "statement_date": null,
		          "due_date": "0000-00-00 00:00:00",
		          "amount": "0",
		          "is_paid": "0",
		          "is_reminded": "1",
			      "overdue": null,
	              "current_amount": null,
		          "bill_total": "88.5",
		          "bill_id": "zd91NwGU",
                  "bill_name": "Utility",
                  "predecessor": null,
                  "reference_id": "120",
                  "service_provider": "FOLDER",
                  "sp_id": null
                   },
                 
             {
                  "id": "252",
                  "created_at": "2016-02-23 16:29:50",
                  "updated_at": "2016-02-23 16:58:25",
                  "t_user_account_id": "250",
                  "statement_date": null,
                  "due_date": "2016-03-04 17:52:34",
                  "amount": "0",
                  "is_paid": "0",
                  "is_reminded": "1",
                  "overdue": null,
                  "current_amount": null,
                  "bill_total": "88.5",
                  "bill_id": "Lojnc",
                  "bill_name": "Water bill",
                  "predecessor": null,
                  "reference_id": "120",
                  "service_provider": "IWK",
                  "sp_id": "7"
                    }

                    ]