Gujarat High Court
Ramesh Chandra Gupta vs Union Of India (Uoi) And Anr. on 31 October, 1985
Equivalent citations: (1986)1GLR485
JUDGMENT R.C. Mankad, J.
1. Petitioner, a retired Chief Commissioner of Income-tax, has filed this petition, challenging the constitutional validity of Office Memoranda 'O.M.' for short collectively marked Annexure 'B' to the petition to the extent to which eligibility for liberalised pension scheme is made applicable only to those government servants who retired on or after March 31, 1985. The contention of the petitioner is that the eligibility criterion for liberalised pension scheme the government servant should have retired on or after March 31, 1985 in the memoranda Annexure 'B' violates Article 14 and is unconstitutional and consequently the words "who retired on or after 31 st March 1985" used in the said O.M. should be struck down.
2. Petitioner who retired as Chief Commissioner of Income-tax (Administration) and Commissioner of Income-tax Gujarat-I on September 30, 1984 was a Central Government Servant and Central Civil Services (Pension) Rules, 1972 (hereinafter referred to as the Rules") were applicable to him. When petitioner retired from service, the total emoluments of the petitioner were as under:
Basic pay: Rs.2,750/-
Special pay: Rs.250/-
Interim Relief by Pay Commission: Rs. 100/-
Deamess Allowance Rs.1,650/-
Additional Dearness Allowance: Rs.600/-
City Compensatory Allowance: Rs.75/-
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Total... Rs. 5,425/-
Rule 3(1)(c) defines "emoluments" to mean emoluments as defined in Rule 33. Defining "emoluments" Rule 33 lays down as follows:
Expression 'emoluments' means pay as defined in Rule 9(2) of the Fundamental Rules including Dearness Pay as determined by the order of the Government issued from time to time), which a government servant was receiving immediately before his retirement on the date of his death.
It is also important to refer to Sub-rule (1) of Rule 5 on which reliance was placed on behalf of the respondents and it reads as under:
Any claim to pension or family pension shall be regulated by the provisions of these rules in force at the time when a government servant retires or is retired or is discharged or is allowed to resign from service or dies as the case may be.
It is the contention of the respondents that Rule 33 has to be read with Rule 5, and, therefore, for the purpose of determining the pension and gratuity payable to the government servant on his retirement, the relevant emoluments are the emoluments drawn by him on the date of retirement.
3. Under the pension formula in force at the time of retirement of the petitioner on September 30, 1984, part of Dearness Allowance ('D.A.' for short) was to be treated as pay or Dearness Pay ('D.P.' for short) for the purpose of calculation of pension. For the purpose of pension, petitioners emoluments were worked out as follows:
Basic Pay: Rs.2,750/-
Special Pay: Rs.250/-
Interim relief Rs.100/-
Part of D.A. Rs.370/-
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Total...Rs.3,470/-
Pension payable to the petitioner under the pension formula in force at the time of retirement, worked out to Rs. 1513/-per month. However, in the pension formula there was a ceiling of Rs. 1500/-per month in regard to pension payable to a government servant. Therefore, petitioner was entitled to pension of Rs. 1500/- per month. Out of this pension payable to him, petitioner was entitled to commute one third of the value of the pension that is Rs. 500/- per month. Petitioner took benefit of commutation of Rs. 500/- per month out of his pension of Rs. 1500/- per month and consequently after commutation, the pension payable to him was Rs. 1000/-per month.
4. By O.M. No. F. 1 (12)-EV/84, dated April 30, 1985, pension scheme was liberalised and it was decided that the entire Additional D.A. and ad hoc D.A. sanctioned in the Finance Ministrie's O.M. No. 1301771/85. E. II (B) dated January 19, 1985 (linked to average index level 568) should be treated as deamess pay in addition to the D.P. treated as part of pay vide Finance Ministrie's O.M. dated May 25, 1979 amended vide O.M. dated December 30, 1981 for the purpose of retirement benefits in respect of government servants who retire, on or after March 31, 1985 to the extent specified in the O.M. Para 3(i) of the O.M. laid down that D.P. indicated above shall count as emoluments for pension and gratuity in terms of Rule 33 of the Rules. Para 3(ii) of the O.M. laid down that except as stated in the subsequent provisions, the average emoluments under Rule 34 of the Rules shall be determined on the above basis. Para 3(iii) is not relevant for our purpose and it is not disputed that the provisions contained therein have been subsequently deleted. Government servant was given option to opt for pension payable under the old scheme or the pension payable under the new liberalised scheme. However, para 5 of the O.M. made it clear that ceiling on maximum amount of gratuity raised from Rs. 36,000/to Rs. 50.000/- vide Finance Ministrie's O.M. No. F. 1 (12)-E.V./84 dated April 29, 1985 shall be applicable to both who opt for merger of D.P. or not in terms of paragraph 4 of the O.M. which provided for exercise of option as indicated above. Para 8 of the O.M. provided that there would be no ceiling on the amount of monthly pension for government servants retiring on or after March 31, 1985. In other words, ceiling of Rs. 1500/- per month on the pension payable to government servants was lifted. By O.M. No. 27/5/84-Pension Unit dated June 21, 1985, the Government of India decided that for the purpose of average emoluments under Rule 34 of the Rules, the D.A, Additional D.A. and ad hoc D.A. upto average index level 568, shall be treated as D.P. with effect from the dates from which these were sanctioned. Petitioner's grievance is that he has not been given the benefit of the aforesaid Memoranda by which pension scheme was liberalised. Petitioner has not been given the benefit of the liberalised pension scheme because according to the respondents this scheme is applicable only to those government servants who retired on or after March 31, 1985. As already observed above, petitioner's contention is that liberalised pension scheme to the extent to which it is made applicable to only government servants who retired on or after March 31, 1985, is violative of Article 14 of the Constitution.
5. As already observed above, the contention of the respondents is that according to the piovisions of Sub-rule (1) of Rule 5 of the Rules, any claim to pension of family pension shall be regulated by the provisions of the rules in force at the time when the Government servant retires or is retired or is discharged or is allowed to resign from service or dies as the case may be. At the time of retirement of the petitioner from service that is on September 30, 1984, there was no provision in the rules for treating D.A., Additional D.A., Ad hoc. D.A. upto-the average index level 568, as D.P. for calculation of the average employments for the purpose of pension. He is, therefore not governed by the provisions contained in the 0.M. collectively marked Annexure 'B'. It is in the backdrop of the facts stated above and the contention raised on behalf of the respondents that the question arises whether the words 'who retired on or after 31st March 1985' used in the O.M. dated April 30, 1985 are violative of Article 14 of the Constitution.
6. Identical question with reference to O.M. No. F-I9(3)-EV-79 dated May 25, 1979 had come up for consideration before the Supreme Court in D.S. Nakara v. Union of India . In that case, petitioner No. 1 had been a civil servant and petitioner No. 2 was a member of Services Personnel of armed forces. Third petitioner was a society sponsoring the cause of the petitioners. Government of India, Ministry of Finance issued O.M. dated May 25, 1979, whereby formula for computation of pension was liberalised. It made it applicable to government servants who were in service on March 31, 1979 and retired from service on or after that date. By Memorandum of Ministry of Finance dated September 28, 1979, the liberalised pension formula introduced for the government servants governed by the Rules was extended to the armed forces personnel with a condition that the new rules of pension would be effective from April 1, 1979 to those service officers only who become ineffective on or after that date. Petitioners contended that the differential treatment for those retiring prior to a certain date and those retiring subsequently, the choice of the date being wholly arbitrary would be according differential treatment to pensioners who form a class irrespective of the date of retirement and, therefore, would be violative of Article 14 of the Constitution. It was also contended that classifications based on fortuitous circumstance of retirement before on subsequent to a date fixing of which is not shown to be related to any rational principle would be equally violative of Article 14. Desai J. speaking for the Constitution Bench of the Supreme Court observed that the burden lay upon the State to affirmatively establish that the twin tests are satisfied namely that the classification is founded on intelligible different in which distinguishes persons grouped together from those that are left out of the group and that the different in has a rational nexus to the object sought to be achieved by the statutory provision in question. The petitioners for the purpose of pension benefits, it was held, form a class. Therefore, the classification drawn was devoid of rational principle and arbitrary. It was observed:
It is 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 arbitrary 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 object 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 those benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior to that date. If the liberalization was considered necessary for augmenting social security in old age to Government servants then those who retired earlier cannot be worst off then 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 some thing 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/- pa. and average emolument to be worked out of 36 months salary while the other will have a ceiling of Rs. 12,000/- pa. 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 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 Article 14 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 computation of pension. A 48 hours difference is matter of retirement would have a traumatic effect. Division is thus both arbitrary and unprincipled. Therefore, the classification does not stand the test of Article 14.
7. Their Lordships of the Supreme Court further affirmed that there is nothing immutable about the choosing of an event as an eligibility criteria subsequent to a specified date 'if the event is certain but its occurrence at a point of time is considered wholly irrelevant and arbitrarily selected having no rationale for selecting it and having an undesirable effect of dividing homogeneous class and of introducing the discrimination, the same can be easily severed and set aside.' It is well settled that a statute is not retroactive because a part of the requisites for its action is drawn from a time antecedent to its passing. The principle of reading down the enactment was adopted and the contention for the Union of India that principle of severability could not be applied to augment the class was repelled pointing.
We are not sure whether there is any principle which inhibits the Court from striking down an unconstitutional part of a legislative action which may have the tendency to enlarge the width and coverage of the measure. Whenever classification is held to be impermissible and the measure can be retained by removing the unconstitutional portion of classification, by striking down words of limitation, the resultant effect may be enlarging the class. In such a situation, the Court can strike down the measure. We know of no principle that 'severance' limits the scope of legislation and can never enlarge it.
Accordingly both the impugned memoranda were read down for implementation on severing the provision contained in them that they applied to Government servants/service officers retiring/becoming effective on or after March 31, 1979. The date mentioned in the memoranda was found relevant as being one from which the liberalised pension scheme became operative to all pensioners governed by the Rules irrespective of the date of retirement. It was, however, clarified that arrears of pension prior to the specified date as per computation was not admissible. Omitting the unconstitutional part it was declared that all pensioners governed by the Rules and Army Pension Regulations shall be entitled to pension as computed under the liberalised pension scheme from the specified date, irrespective of the date of retirement.
8. Viewed in the light of the law laid down by the Supreme Court in the case of D.S. Nakara (supra), which clearly covers the dispute, it may be observed that except for the fact that petitioner retired from service prior to March 31, 1985, there is no other basis for denial to him of the liberalised pension scheme under two O.M. Annexure 'B' referred to above. The learned Standing Counsel for the respondents was not able to point out any relevant or valid consideration for selection of eligibility criteria laid down in the two O.M. The only contention which is raised on behalf of the respondents, as pointed out above is that having regard to the provisions contained in Rule 5(1) of the Rules, petitioner would be governed by the rules as they were in force on the date of his retirement that is September 30, 1984 and, therefore, he was not entitled to the benefit of liberalised pension scheme in the two O.M. It was submitted that Rules 5 and 33 have to be read together to find out whether petitioner would be entitled to liberalised pension scheme under the two impugned O.M., and if they are so read, it was obvious that he was not entitled to this benefit. It was urged that Rules 5 and 33 have not been considered by the Supreme Court in D.S. Nakara's case and, therefore, it was open to this Court to take a different view from the one taken by the Supreme Court having regard to the provisions contained in those rules. The argument advanced on behalf of the respondents is devoid of any substance. The rules were before the Supreme Court and it would not be open to the respondents to urge that Rules 5 and 33 of the Rules on which reliance is placed by them were not considered by the Supreme Court. In any case, it is not open to this Court to say that since no reference is made to Rules 5 and 33 as urged on behalf of the respondents, the decision of the Supreme Court in D.S. Nakara's case is not binding on this Court, in my opinion, the present case will be governed by the decision of the Supreme Court in D.S. Nakara's case and if is not open to this Court to take a view different from the one taken by the Supreme Court.
9. As discussed above, there is no legitimate basis for discriminating against those whose retirement had taken place before March 31, 1985. In the absence of valid reasons, the criteria for eligibility for reaping the benefit of liberalised pension scheme prescribed by the two impugned O.M. must be held to be arbitrary and irrelevant. The amelioration in the pensionary benefit must extend to all covered under the class of retired Government Servants without regard to the question whether the Government Servant had retired from service before or after March 31, 1985. The division or criterion prescribed by the impugned O.M. is unsupportable being devoid of rational principle; the object being evidently to give something more in the form of additional pesionery benefit to persons otherwise equally placed the line drawn at the said date is clearly discriminatory. I consequently hold that the eligibility for liberalised pension of having retired on or after March 31, 1985 under the two impugned O.M. violates Article-14 and it is unconstitutional. As held by the Supreme Court in D.S. Nakara's case, eligibility for liberalised pension scheme that Government Servant should have retired on or after March 31, 1985 is liable to be struck down. This arbitrary and discriminatory portion in the O.M. can be easily severed and both the Memoranda can be enforced and implemented after severance of unconstitutional part. Accordingly, the petitioner a pensioner governed by the rules shall be entitled to pension as computed under the liberalised pension scheme from March 31, 1985 in respect of his date of retirement. Petitioner is, therefore, entitled to the benefit of liberalised pension scheme as contained in the two O.M. collectively marked Annexure-B. Consequently his pension shall have to be refixed on the basis of the said two Memoranda and he shall also be entitled to the benefit of commutation of one third of his pension on the basis of refixed pension. This petition must, therefore, succeed.
10. In the result, this petition is allowed. The liberalised pension scheme as contained in Office Memoranda collectively marked Annexure 'B' is held to be illegal and unconstitutional violative of Article 14 of the Constitution, to the extent that the benefit of the liberalised pension scheme is extended only to those Government Servants who retire on or after March 31, 1985. Petitioner who is governed by the Central Civil Services (Pension) Rules, 1972, shall be entitled to pension as computed under the liberalised pension scheme under the said two impugned Office Memoranda Annexure 'B' from March 31, 1985, irrespective of the date of retirement. There will be no ceiling of Rs. 1500/- per month in fixing the pension. Petitioners pension shall be redetermined under Office Memorandum dated April 30, 1985, and for that purpose, average emoluments under Rule 34 of the Central Civil Services (Pension) Rules, 1972, Dearness Allowance, Additional Dearness Allowance and Ad hoc Dearness Allowance linked upto the average index level 568 shall be treated as Dearness Pay with effect from the dates from which these were sanctioned. Petitioner shall also be entitled to commute one third of the pension so determined as per the rules. Petitioner shall also be entitled to death-cum-retirement gratuity as per liberalised pension scheme under which the limit of gratuity is raised from Rs. 36,000/- to Rs. 50,000/-. Respondents are directed to refix the pension, pay arrears of difference in pension as a result of such refixation, additional commuted value of pension and additional gratuity as stated above within two months from the date of receipt of the writ of this Court.
11. Rule made absolute accordingly with no order as to costs. Writ to be seat down forthwith.