Gujarat High Court
N K Shah & 4 vs Physical Research Laboratory & on 10 February, 2015
Author: Akil Kureshi
Bench: Akil Kureshi
C/SCA/15472/2010 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No. 15472 of 2010
With
SPECIAL CIVIL APPLICATION No. 15507 of 2010
FOR APPROVAL AND SIGNATURE:
HONOURABLE Mr. JUSTICE AKIL KURESHI
and
HONOURABLE Ms. JUSTICE SONIA GOKANI
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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N K SHAH & 40....Petitioner(s)
Versus
PHYSICAL RESEARCH LABORATORY & 1....Respondent(s)
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Appearance:
(MR MUKUL SINHA), ADVOCATE for the Petitioner(s) No. 17 , 26 - 27 ,
36
MR KB PUJARA, ADVOCATE for the Petitioner(s) No. 1-16 , 18-25, 28-
35, 37-41
MR DILIP L KANOJIYA, ADVOCATE for the Respondent(s) No. 2
MR RS SANJANWALA, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 2
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CORAM: HONOURABLE Mr. JUSTICE AKIL
KURESHI
Page 1 of 32
C/SCA/15472/2010 JUDGMENT
and
HONOURABLE Ms. JUSTICE SONIA
GOKANI 10th February 2015
ORAL JUDGMENT (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI)
These petitions arise out of common background. They have been heard together and would be disposed of by this common judgment.
The petitioners are existing and retired employees of the respondent no. 1-Physical Research Laboratory ["PRL" for short]. They belong to the administrative staff. They are clamoring for their pensionery benefits, which according to them were denied to them by the illegal and discriminatory action on the part of PRL. In these petitions, they have challenged the common judgment of the Central Administrative Tribunal, Ahmedabad in Transfer Application No. 3 of 2009 and connected proceedings. Brief facts are as under :
All the petitioners are employees of PRL. Few of them are still in active service. Rest have retired during the pendency of these proceedings. They belong to administrative staff of the PRL. They were governed by certain set of service conditions, particularly pertaining to their pay and allowances and post retiral benefits. Page 2 of 32
C/SCA/15472/2010 JUDGMENT On 6th February 1986, PRL circulated a notice to its staff members stating that the Government of India had decided that the autonomous bodies which are financed by the Government of India should not have terms and conditions of service at variance with those of the Central Government employees; except House Rent Allowance. Under the circumstances, in order to bring the PRL employees at par with the Central Government employees in the Department of Space, they would be offered a new set of benefits, which would be known as Package-II, likely to be effective from 1st April 1986. The existing employees would have an option to retain the benefits of the present set of conditions, which would be referred to as Package-I. Along with such circular, the set of service conditions in the form of Package-I & II were also circulated. Pursuant to such general notice, PRL issued a notice dated 8 th May 1986 to all its regular employees reiterating that they would have an option to be governed by the set of conditions similar to those available to the Central Government employees in the Department of Space, unless they chose to continue to be governed by existing Page 3 of 32 C/SCA/15472/2010 JUDGMENT conditions as in Package I. All employees appointed after 1st July 1986 will automatically be covered by Package-II. Package-II itself contained an option either to opt for Contributory Provident Fund ["CPF" for short] or to opt for General Provident Fund ["GPF" for short] with pension. It was clarified that if no option is received before 15 th June 1986, the concerned employees would be deemed to have opted for Package-II. On 6th June 1986, PRL issued a corrigendum providing that if no option is exercised by 30th June 1986, the employee concerned would be governed by Package-I. On 16th June 1987, PRL circulated a notice providing that those of the employees, who had opted for Package-I, would have an option to switch over to Package-II. Two things may be noticed from this circular. Firstly, it was common to all employees of PRL without any distinction whether the employee concerned belonged to administrative or scientific/technical establishment. Secondly, that though not specified in Package-II itself, there was an inbuilt option to either opt for CPF or Pension Scheme. It was provided that choice once Page 4 of 32 C/SCA/15472/2010 JUDGMENT exercised would be final and further that this was the last chance being given to the employees to move over to the Government benefits [Package-II].
After implementation of the recommendations of Fourth Central Pay Commission, Government of India issued Office Memorandum dated 21 st October 1987 covering scientific organizations under the Department of Space and provided that all existing administrative staff in DOS/ISRO who were governed by CPF scheme and who were in service as on 1st January 1986 and are still in service would be deemed to have come over to the Pension Scheme. The administrative staff however would have an option to continue to be governed by the CPF scheme. Such option would have to be exercised latest by 31st December 1987. If no option is received, the concerned employee would be deemed to have switched over to the pension scheme. It was provided that separate orders would be issued regarding scientific/technical staff in that regard. Pursuant to such directives, PRL issued a memorandum dated 13th November 1987 adopting and implementing the orders contained in the said Page 5 of 32 C/SCA/15472/2010 JUDGMENT Government of India's Office Memorandum dated 1st May 1987. In such decision dated 13th November 1987, it was provided that all existing administrative staff members of PRL, who have opted for CPF scheme under Package-II would have an option to switch over to pension scheme and if no option is exercised by 31 st December 1987, it would be deemed to have been exercised in favour of the pension scheme.
Since scientific and technical staff members were not covered under such scheme, the Government of India issued Office Memorandum dated 26 th October 1990 giving such staff members of the scientific organizations an option to switch over to pension scheme by 31 st December 1990. It was provided that if no option is received by such date, the employee concerned would be governed by the CPF scheme. An option once exercised would be final. Pursuant to such Government of India Office Memorandum dated 26th October 1990, PRL issued an order dated 16th November 1990 giving option to the scientific/technical staff members who had opted for Package-II to switch-over to pension scheme by 31 st Page 6 of 32 C/SCA/15472/2010 JUDGMENT December 1990.
Despite such option once being made available to the administrative and thereafter to the scientific/technical staff to switch over from CPF to Pension scheme, there were large number of employees in PRL who had missed out exercising such option. About 200 such employees from both the streams combined together submitted a representation to the management on 17 th November 1992 requesting for fresh option to switch over to the pension scheme. This representation did not received any response from the employer. However, Government of India wrote a letter to the Director of PRL that it had decided to give another option to the scientific/technical personnels employed in PRL covered under Package-II to switch over to pension scheme. It was clarified that this decision would not apply to the administrative staff members and to the scientific and technical employees who were governed by Package-I. Pursuant to such decision, PRL issued a notice dated 4 th June 1993 giving option to the scientific/technical staff members who were governed by Package-II to switch over to the pension Page 7 of 32 C/SCA/15472/2010 JUDGMENT scheme by exercising an option latest by 30th June 1993 failing which they will continue to be governed by CPF scheme. As many as 59 scientific/technical staff members opted to switch over to the pension scheme, pursuant to such circular. Additionally as per the petitioners, on 30 th August 1993, nine more employees of PRL - six from administrative staff and three from scientific/technical side were granted such change-over to pension scheme. The precise reason why such benefit was given to selective employees is not known.
On 30th May 1997, once again, Government of India issued an O.M giving one more option to the scientific/technical staff to switch over to CPF scheme by exercising option latest by 30 th October 1997, while clarifying that such option would not be available to the administrative staff. Pursuant to such decision of Government of India, PRL invited option from interested scientific/technical personnels to exercise fresh option under its Circular dated 24th June 1997. Since the administrative staff was left out from such consideration, a representation dated 14th September 1988 came to be Page 8 of 32 C/SCA/15472/2010 JUDGMENT made by them seeking one more option to select the pension scheme. Several representations followed from time to time, however, without any response from the PRL; except that on 28 th June 2002, it appears that PRL forwarded one such representation to the Ministry alongwith favourable recommendation by the Director.
On 6th March 2008, PRL extended one more option to the scientific/technical personnels to switch over to the pension scheme. This was pursuant to O.M dated 19 th April 2006 issued by the Government of India. Even at that time, the administrative staff did not get a fresh option to switch over to the pension scheme. Several petitions were filed before the High Court - first of them being Special Civil Application No. 12988 of 1994 by one Shri Vinodchandra Nagindas Chudgar. Several petitions followed thereafter in the year 2003 seeking the same relief of a fresh option to the existing administrative staff, who were already in Package II to switch over to pension scheme. All these petitions were transfers to Central Administrative Tribunal, Ahmedabad by virtue of issuance of a notification under section 14 (2) of the Administrative Page 9 of 32 C/SCA/15472/2010 JUDGMENT Tribunals Act covering PRL as one of the organizations against whom petitions would lie before the Tribunal. All these petitions were bunched together and disposed of by the common impugned judgment by the Tribunal.
Before the Tribunal, the petitioners canvassed the main ground of discrimination in the treatment between administrative and scientific/technical staff members of PRL. The Tribunal, however, did not accept such a contention. It was held that two streams of employees belonged to separate categories. When the administrative staff members were granted such an option, consideration for scientific/technical staff was deferred. When, at a later point of time, the scientific and technical staff members received such an option, the employees of the other stream cannot complain about the discrimination. It was further observed that some of the employees had filed petitions, when they were on the verge of retirement and during pendency of the proceedings had also withdrawn the retiral benefits without any objection. It was held that for a reasonable classification under Article 14, it is not necessary that classification must be mathematically Page 10 of 32 C/SCA/15472/2010 JUDGMENT accurate. It is this judgment, which the petitioners have challenged in these petitions.
Learned advocate Shri Pujara for the petitioners raised following contentions - [1] the scientific and technical staff members were given multiple options, even though such staff members were also governed by the very first option given under Notice dated 8 th May 1986. These options were granted in the years 1990; 1993; 1997 and during the pendency of these proceedings in the year 2008. None of these options were made available to the administrative staff members. This was thus a clear case of hostile discrimination. [2] Counsel submitted that the administrative staff and scientific/technical staff members cannot be differentiated for the purpose of post retiral benefits. The action of the respondents in confining the options to one stream of employees was thus violative of Articles 14 & 16 of the Constitution of India. [3] Even though the two streams may form distinguishable class, there is no rational why for the purpose of pensionery benefits, the two streams were treated separately. In other words, for drawing a distinction between Page 11 of 32 C/SCA/15472/2010 JUDGMENT administrative staff on one hand and scientific/technical staff on the other, there is no justification provided by the respondents. Mere assertion that in order to provide greater flexibility required for mobility and to ensure retention of scientific/technical staff, such distinction was made, would not be sufficient in absence of any material on record.
On the other hand, learned counsel Shri Sanjanwala for PRL opposed the petitions contending that two streams of employees are separate and distinct. The administrative staff was granted such an option, when the scientific/technical staff members were not covered. When later-on therefore, option was made available to such employees, the administrative staff members cannot insist on a fresh option. He pointed out that in the option made available to the petitioners, it was clarified that option once exercised would be final. Counsel further submitted that the PRL was merely implementing the policy decisions of the Government of India. Since the fresh options were confined only to the scientific and technical staff members of PRL, as provided by the Government of Page 12 of 32 C/SCA/15472/2010 JUDGMENT India, no such options were made available to the administrative staff members.
Having heard learned counsel for the parties and having perused the documents on record, a short and very interesting question that arise for consideration is whether the action of the respondents in limiting the option for switching over to the pension scheme circulated in the years 1990; 1993; 1997 and 2008 only to scientific and technical staff members was an act of hostile discrimination, or whether for the purpose of such benefits, the administrative staff and scientific/ technical staff members form a distinct and separate class and that the differentiation was otherwise reasonable. Before examining the legal parameters of such a decision, let us re-visit the salient features of the scheme briefly.
As noted earlier, on 8th May 1986, PRL granted option to all its existing employees - be it from administrative side or scientific/ technical side - to switch over to Package II, which would include the pay and other allowances at part with the Government of India employees in the Department of Space. Such package Page 13 of 32 C/SCA/15472/2010 JUDGMENT itself had an internal option; either to be governed by CPF scheme or Pension Scheme. Those who want to continue to be governed by the earlier pay structure, could decline to switch over to Package-II and would be governed by Package-I. This option was general in two aspects viz., firstly, it covered all its employees without any distinction. Secondly, Package-II contained two options - Option number one was to be governed by the CPF scheme and Option number two for Pension scheme. On 13 th November 1987, PRL issued a circular pursuant to Office Memorandum of the Government of India dated 21 st October 1987 and granted afresh pension option to those members of the administrative staff who had opted for Package-II. The Government of India decision clarified that separate orders would be issued regarding scientific/technical staff members. Thus, clearly this option was exclusively available to the administrative staff who were in service and those who had opted for Package-II. The Government of India also had contemplated giving a separate similar option to scientific and technical staff members in due course. Consequently therefore, on 26 th Page 14 of 32 C/SCA/15472/2010 JUDGMENT October 1990, the Government of India required the PRL to grant such an option to scientific/technical staff, pursuant to which PRL issued notification dated 16 th November 1990. This was the first option to scientific and technical staff members who had opted for Package II, but for option of CPF scheme to switch over to pension scheme, the administrative staff could not have raised any dispute or objection about their exclusion, since they had already to the exclusion of the scientific and technical staff got such an option in past.
Had the sequence of options stopped at this stage, the petitioners undoubtedly had no legal basis to raise any grievance. However, three more options were granted by the PRL to its scientific and technical staff members to switch over to pension scheme. First such option was granted under notice dated 4th June 1993. This was preceded by a common representation by the staff members from both the streams on 17 th November 1992 requesting for a fresh option for pension scheme. However, in the notice dated 4 th June 1993, the option was confined only to scientific and technical personnels. Yet Page 15 of 32 C/SCA/15472/2010 JUDGMENT another option was granted to such employees, pursuant to G.O.M dated 30th May 1997 by the PRL by issuance of notice dated 24th June 1997. Even after series of representations which were made by the administrative staff, their exclusion from the pension option continued when on 6th March 2008, the PRL granted pension option to the scientific and technical staff members, purportedly pursuant to G.O.M dated 19th April 2006 and the letter of Government of India dated 19 th February 2008. These two letters are not on record. However, we are prepared to proceed on the basis that this latest decision of PRL dated 6th March 2008 was not its own and was prompted by the Government of India directives. However, the fact remains that three additional pension options flowed in favour of scientific and technical staff of PRL between 1993 and 2008, without the administrative staff even once being included for such consideration.
Thus, over and above the first pension option to the scientific/technical staff granted by PRL under the Circular dated 16th November 1990, such staff members received three additional pension options in the years 1993; 1998 Page 16 of 32 C/SCA/15472/2010 JUDGMENT and 2008. All such pension options; including the pension option of 1990, came with a specific narration that the option once exercised would be final. Thus, such condition contained in the first pension option offered to scientific and technical staff did not prevent the Government of India and PRL from introducing subsequent multiple options enabling such staff members to switch over to the pension scheme as late as in the year 2008.
Article 14 of the Constitution provides for equality clause. Article 16 is a spicee of Article 14 and provides that there shall be no discrimination in the matters of public employment. By virtue of Articles 14 and 16 of the Constitution, the Government of India would be precluded from creating a hostile discrimination between similarly situated citizens or employees. It is undoubtedly true that neither Article 14 nor Article 16 prohibit reasonable classification and what is frawned upon is hostile discrimination or unreasonable classification. Right from the days of judgment of Constitution Bench of the Supreme Court in case of Budhan Chaudhari, reported in AIR 1955 SC 191, it is well established that Article 14 Page 17 of 32 C/SCA/15472/2010 JUDGMENT forbids class legislation but not reasonable classification. In order, however, to pass the test of permissible classification, two conditions must be fulfilled namely {i} that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and {ii} that the differentia must have a rational to the object sought to be achieved by the statute in question. Only if these two twin conditions are satisfied, the classification would pass test of being reasonable.
In case of Mohammad Shujat Ali & Ors. v. Union of India & Ors., AIR 1974 SC 1631, the Supreme Court while recognizing the constitutional code of equality and equal opportunity under Articles 14 and 16 of the Constitution held that equal opportunity does not mean that the same laws must be applicable to all persons. While recognizing the doctrine of reasonable classification, it was cautioned that the fundamental guarantee is of equal protection of the laws and the doctrine of classification is only a subsidiary rule evolved by the Courts to give a practical content to that guarantee by Page 18 of 32 C/SCA/15472/2010 JUDGMENT accommodating it with the practical needs of the society and it should not be allowed to submerge and drown the previous guarantee of equality. The doctrine of classification should not be carried to a point where instead of being a useful servant, it becomes a dangerous master.
In case of E.P Royappa v. State of Tamil Nadu & Anr., AIR 1974 SC 555, the Supreme Court observed as under :-
"85. The last two grounds of challenge may be taken up together for consideration. Though we have formulated the third ground of challenge as a distinct and separate ground, it is really in substance and effect merely an aspect of the second ground based on violation of 14 and 16. Art. 16 embodies the fundamental guarantee that Arts. 14 as there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. Though enacted as a distinct and independent fundamental right because of its great importance as a principle ensuring equality of opportunity in public employment which is so vital to the building up of the new classless egalitarian society envisaged in the Constitution, Art. 16 is only an instance of the application of the concept of equality enshrined in Art. 14. In other words, Art. 14 is the genus while Art 16 is a species, Art. 16 gives effect to the doctrine of equality in all matters relating to public employment. The basic principle which, therefore, informs both Arts. 14 and 16 is equality and inhibition against discrimination. Now, what is the Page 19 of 32 C/SCA/15472/2010 JUDGMENT content and reach of this great equalising principle ? It is a founding faith, to use the words of Bose J., "a way of life", and it must not be subjected to a narrow pedantic or lexicographic approach. We cannot countenance any attempt to truncate its all- embracing scope and meaning, for to do so Would be to violate its activist magnitude.
Equality is dynamic concept with many aspects and dimensions and it cannot be "cribbed cabined and confined" within traditional and doctrinaire limits. From a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Art. 14, and if it affects any matter relating to public employment, it is also violative of Art. 16. Arts. 14 and 16 strike at arbitrariness in State action an (ensure fairness and equality of treatment. They require that State action must be based on valent relevant principles applicable alike to all similarly situate and it must not be guided by any extraneous or irrelevant considerations because that would be denial of equality. Where the operative reason for State action, as distinguished from motive inducing from the antechamber of the mind, is not legitimate and relevant but is extraneous and outside the area of permissible considerations, it would :amount to mala fide exercise of power and that is hit by Arts.14 and 16. Mala fide exercise of Power and arbitrariness are different lethal radiations emanating from the same vice : in fact the matter comprehends the former. Both are inhibited by Arts. 14 and 16."
The fact that the administrative staff members form Page 20 of 32 C/SCA/15472/2010 JUDGMENT a stream which is well defined and distinct from the scientific/technical staff members of PRL is not in dispute. The question is does this distinction satisfy the second test namely it is relatable to the object sought to be achieved. In other words, would it be possible for the employer to differentiate between the two streams of employees for offering a fresh pension option.
In this contest, the respondents have not thrown any light why two sets of employees were separately treated. Only justification that we find from the affidavit-in-reply filed by PRL is that, "... as regards pension, scientific and technical staff and administrative and auxiliary staff in DOS are governed separately as per the policy of the Government of India with a view to provide the necessary flexibility required for mobility and to ensure retention as well as to attract highly qualified scientific and technical personnel. This facility is not available to the administrative staff who remain under CPF scheme by exercising option under terms of OM of Department of Pension dated May 1, 1987. The option once exercised is final and the administrative staff are aware of this rule." Page 21 of 32
C/SCA/15472/2010 JUDGMENT Both these points of distinction sought to be drawn through the above noted narration in the affidavit-in-reply, in our opinion, are not valid. Firstly, the declaration that option once exercised is final, contained in the pension option applicable to the administrative staff was also made in every option made available to the scientific and technical staff. This, however, did not prevent the Government of India from offering series of subsequent options to such staff members, each containing such a finality clause. Regarding the requirement of granting flexibility and mobility to ensure retention of highly qualified scientific and technical personnels, the same is also wholly baseless. No material is brought on the record to suggest that but for such pension option, there was any real danger of mass exodus of highly qualified, trained and experienced scientists from scientific organizations such as PRL & ISRO. In terms of service conditions, promotional avenues, pay and allowances, increments and pay-scales; if the employer were to treat the scientific/technical staff on a different footing from the administrative staff, surely there could be no question of Page 22 of 32 C/SCA/15472/2010 JUDGMENT discrimination. If the expert bodies, such as pay commission or even the employer were to offer a range of different may even by superior terms and conditions to the scientific/technical staff for attracting and drawing the brighter, young and more qualified personnels to join such organizations in research wings, surely there can hardly be any quarrel about such an approach. However, when it comes to the question of giving pension option, we see no distinction between the administrative staff and scientific/ technical staff which would enable the Government of India to exclude one stream of employees from being granted such an option. As noted earlier, pension option given to scientific and technical staff in the year 1990 was first such exclusive option for them; they were not included in the earlier option given to administrative staff. If after 1990 no fresh option was made available to any stream of employees, the petitioners could certainly have not raised any grievance. It was entirely upon the Government of India, looking to the range of factors including the monetary consideration whether those set of employees who had already opted out of the pension Page 23 of 32 C/SCA/15472/2010 JUDGMENT scheme should get a fresh option to switch over or not. However, for its own reasons whatever that may be, if the Government of India decided to offer such option to a class of employees, the same could not have been done without including all similarly situated employees of the same organization for the same treatment. In other words, unless and until a clear distinction is pointed out for treating two streams of employees for different consideration in terms of pension option, it was simply not open for the Government of India to make such option available to one stream of employees to the total exclusion of the other, which would be a clear case of hostile discrimination. Whether to retire in CPF scheme or to receive pension after retirement were considerations conveyed to both sets of employees. Merely because one group belonged to administrative side and the other to scientific/technical side was an artificial distinction for the purpose of pension option. These employees in the context of pension option formed a homogeneous class and could not be differentiated without the risk of hostile discrimination.
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C/SCA/15472/2010 JUDGMENT The issue can be looked from a slightly different angle. It is a known fact of which we can take judicial notice that with the passage of time and implementation of successive pay commission recommendations, the yawning gap between the CPF benefits and the pension benefits increased to a greater proportion. Under the circumstances, not only the number of times a class of employees received such a pension option but at which point of time, they received such an option would be crucial. The parameters for opting for or against the pension scheme in the year 1986 and thereabout completely changed later on over a passage of time by the time, the scientific and technical staff received their last such option in the year 2008. All the petitioners have been clamoring for want of additional pension option right from the year 1992 and thereabouts. The scientific and technical staff members received three additional options thereafter to the total exclusion of the administrative staff members.
In the Constitution Bench judgment of the Supreme Court in case of D.S Nakara & Ors. v. Union of India, Page 25 of 32 C/SCA/15472/2010 JUDGMENT AIR 1983 SC 130, while reiterating the twin conditions required to be satisfied for a classification to be reasonable, the Court posed a question to itself as to on whom the burden lies to affirmatively establish the rational principle on which classification is founded but corelated to the objects sought to be achieved. Referring to the obligation of the welfare State for affirmative action, it was observed that the State would have to affirmatively satisfy the Court that the twin tests have been satisfied. It can only be satisfied when the State establishes not only the rational principle on which the classification is founded but corelates it to the object sought to be achieved. In the said decision, the Supreme Court was testing the introduction of cut-off date for applicability of a liberalized pension scheme. It was observed that the principle adopted is that where all relevant considerations are the same, persons holding identical posts may not be treated differently in the matter of their pay merely because they belong to different departments. If that cannot be done when they are in service, can that be done during their retirement. It Page 26 of 32 C/SCA/15472/2010 JUDGMENT was held that different computation cannot be applied solely on the ground that some persons retired earlier than the others. The contention of the State that if the scheme is discriminatory, the whole scheme itself must be quashed was rejected by holding that the scheme can be read down by severing objectionable portion, namely the arbitrarily selected cut-off date. The Court held and observed as under :-
"42. If it appears to be undisputable, as it does to us that the pensioners for the purpose of pension benefits form a class, would its upward revision permit a homogeneous class to be divided by arbitrarily fixing an eligibility criteria unrelated to purpose of revision, and would such classification be founded on some rational Principle ? The classification has to be based, as is well settled, on some rational principle and the rational principle must have nexus to the objects sought to be achieved. We have set out the objects underlying the payment of pension. If the State considered it necessary to liberalise the pension scheme, we find no rational principle behind it for granting these benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior tothat date. If the Page 27 of 32 C/SCA/15472/2010 JUDGMENT liberalisation was considered necessary for augmenting social security in old age to government servants then those who retired earlier cannot be worst off than those who retire later. Therefore, this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory. To illustrate, take two persons, one retired just a day prior and another a day just succeeding the specified date. Both were in the same pay bracket, the average emolument was the same and both had put in equal number of years of service. How does a fortuitous circumstance of retiring a day earlier or a day later will permit totally unequal treatment in the matter of pension ? One retiring a day earlier will have to be subject to ceiling of Rs. 8,100 p a. and average emolument to be worked out on 36 months' salary while the other will have a ceiling of Rs. 12,000 p.a. and average emolument will be computed on the basis of last ten months average. The artificial division stares into face and is unrelated to any principle and whatever principle, if there be any, has absolutely no nexus to the objects sought to be achieved by liberalising the pension scheme. In fact this arbitrary division Page 28 of 32 C/SCA/15472/2010 JUDGMENT has not only no nexus to the liberalised pension scheme but it is counter productive and runs counter to the whole gamut of pension scheme. The equal treatment guaranteed in Art. 14 is wholly violated inasmuch as the pension rules being statutory in character, since the specified date, the rules accord differential and discriminatory treatment to equals in the matter of commutation of pension. A 48 hours difference in matter of retirement would have a traumatic effect. Division is thus both arbitrary and unprincipled.
Therefore the classification does not stand the test of Art. 14."
We are conscious that in the later decisions; including in cases of Krishena Kumar v. Union of India, AIR 1990 SC 1782; All India Reserve Bank Retired Officers Association & Ors. v. Union of India & Ors., AIR 1992 SC 767, the Supreme Court has drawn a distinction in other set of facts particularly where a pension scheme was being introduced by the employer for the first time. However, in case of Subrata Sen & Ors. v. Union of India & Ors., AIR 2001 SC 3634, the Supreme Court struck down the cut off date filed in revised pension Page 29 of 32 C/SCA/15472/2010 JUDGMENT scheme classifying retirees who had retired prior to December 1994 and entitling the retirees from December 1994 to have pension.
Looked from any angle, the distinction sought to be drawn by the respondents while giving successive fresh pension options to scientific and technical staff to the total exclusion of the administrative staff on as many as three occasions is simply not sustainable in law. We, therefore, hold that the administrative staff members also would be entitled to such pension options. However, we cannot lose sight of the fact that many of the administrative staff members retired from active service long many years back and accepted their provident fund and other dues without protest or murmur. They have never claimed pension option. It would be wholly impermissible and inequitable to grant them fresh option at this stage in some cases, nearly twenty years after their retirement. The benefit of the pension option would therefore be confined to the present petitioners who have during their active service agitated their exclusion from such pension option and have also taken active steps before the Courts Page 30 of 32 C/SCA/15472/2010 JUDGMENT of law. While they would get such option, the employer's contribution towards CPF which they have already received would have to be adjusted against the pension payable to them. This would be done with simple interest @ 9 per cent per annum from the date it is actually paid till it is adjusted or refunded; as the case may be. Likewise, the pension payable to the petitioners would be computed with similar interest from the date it felt due till paid or adjusted. Since this exercise would entail element of adjustment in some cases by refund of CPF, all petitioners would have to exercise such option and declare that they agree to adjustment of CPF as provided above. This shall be done latest by 31 st March 2015. All such concerned employees would give an undertaking that they would be willing for adjustment of CPF amount which they have received alongwith interest; as mentioned above. The respondents shall start paying pension to all optees after adjustment of CPF. These directions shall be complied by 30th June 2015.
In the result, writ petitions are allowed and disposed of. Impugned common judgment of the Central Page 31 of 32 C/SCA/15472/2010 JUDGMENT Administrative Tribunal, Ahmedabad dated 8 th September 2009 is reversed. The action of the respondents in not covering the administrative staff members under the said options of switching over to pension scheme of 1993; 1998 and 2008 is declared as illegal and discriminatory. Rule made absolute accordingly.
Learned advocate Shri Sanjanwala at this stage requested for stay of this judgment. Ordinarily, we would have readily granted such a request. In the present case, however, all the beneficiaries of the judgment have to exercise their option by 31st March 2015, which would automatically give sufficient time to the employer to take further legal option.
{Akil Kureshi, J.} {Ms. Sonia Gokani, J.} Prakash* Page 32 of 32