Kerala High Court
Kerala State Ware Housing Corporation ... vs State Of Kerala on 30 June, 2006
Equivalent citations: 2006(3)KLT772
Author: K. Thankappan
Bench: K. Thankappan
JUDGMENT K. Thankappan, J.
1. Aggrieved by condition Nos. 3,4,6,7 and 8 in Ext.P12 order, by which the Government gave sanction for introducing Pension Scheme to the employees in the Kerala State Warehousing Corporation who retired from the service of the Corporation before 1-2-1996, the petitioner association has approached this Court.
2. The 2nd respondent Corporation had passed Ext.P2 resolution to introduce the Pension Scheme to the employees of the Corporation in lieu of contributory Provident Fund with the approval of the Government. While the matter was pending consideration with the Government a Co-ordination Committee of the employees of the Corporation and one of the employees had approached this Court by filing O.P.No. 5579/92 for granting pension to the employees of the Corporation.O.P.No. 5579/92 was disposed of by this Court directing the Government to consider the recommendation of the 2nd respondent Corporation and take a decision in the matter. The Government issued Ext.P6 Government Order approving the proposal for introduction of the Pension Scheme in the Corporation with effect from 1-2-1996. Consequently, the 1st respondent by Ext.P7 letter requested the Government to extend the above benefit to pre 1996 retirees. In the meanwhile, the 1st respondent furnished a draft regulation governing introduction of Pension Scheme to the employees in the Corporation with effect from 1-2-1996 and also a draft amendment notification to amend the Kerala State Warehousing Corporation Staff Regulations, 1963 to incorporate necessary provisions in the Regulations for the payment of pension as per the Pension Regulations to be framed thereunder vide letter dated 18-5-1996. The Government, after examining the matter, approved the draft regulations governing the introduction of the Pension Scheme to the employees of the Corporation by G.O.(MS) No. 286/98/AD dated 22-12-1998. The 2nd respondent reported the Government the actual valuations of the Scheme comprehending the pre-1996 retirees along with those in active service as on 1-2-1996. The Government by Ext.P 12 order extended the benefit of Pension Scheme to the pre 1996 retirees in the Corporation subject to the specified conditions therein.
3. The question to be decided in this Original Petition is whether the conditions imposed in Ext. P12 are arbitrary or not?
4. Learned counsel for the petitioner submits that the conditions contained in Ext.P12 order are arbitrary and totally inconsistent with the basic principles under which the Pension Scheme is introduced to the employees of the Corporation. Learned counsel also submits that the Pension Scheme sanctioned by the Government vide Ext.P6 order may be made applicable from 4-1-1986, namely the date of Ext.P2 board resolution. Learned counsel for the 2nd respondent Corporation contends that Ext. P12 Government Order was issued by the Government introducing Pension Scheme to the eligible employees in the 2nd respondent Corporation who retired from service before 1-2-1996 after considering Ext.P7 recommendation of the 2nd respondent Corporation and the pension fund of the employees who retired after 1996 are constituted with accumulated amount of the employees contribution and interest thereon in the credit of the employees who retired after 1-2-1996 as well as the existing employees. It is also contended that it is not feasible to extend the benefit of the Pension Scheme to the pre-1996 retirees, as by the lapse of time the entire financial structure and stability of the pension fund is in a vulnerable position. It is further contended that the employees who had declined the offer, when it was made, were estopped from contending that the benefit should be extended to pre 1996 retirees.
5. In the counter affidavit filed by the 1st respondent it is stated that the Government had imposed the conditions to ensure that the existing pension fund constituted exclusively with the contribution and accrued interest thereon should not be disturbed in any way and the pre-retired 1996 employees who had already received the amounts due to them are entitled to the benefit only on refunding the contribution already received is perfectly legal and valid.
6. It has come out in evidence that the pre-retired 1996 employees had already received the amounts due to them years back. Ext.P12 was issued by the Government introducing pension scheme to the employees in the 2nd respondent Corporation who retired from service before 1-2-1996 after considering Ext.P7 recommendation of the 2nd respondent. Fixing of cut-off date for granting benefits is within the powers of the Government and it cannot be stated as arbitrary. In this context, a decision of this Court reported in Government of Kerala v. M.K. Thulaseedharan and Ors. 1992(2) KLJ 591 is very relevant. In the above decision a similar question was considered by this Court and summarized the following principles:
1. Whenever a benefit or liability is created for the first time and is referrable in a cut off date and the same is attacked as discriminatory, though the initial burden under Article 14 is on the person contending that there is discrimination, the burden shifts to the State or authority concerned inasmuch as the facts upon which the discrimination is based are within the special knowledge of the State or authority which has fixed such a cutoff-date.
2. In the case of pension, once a pension scheme is applied to a homogeneous group of persons, the subsequent division thereof for purposes of grant of benefit or computation with respect to a cut-off-date will not ordinarily be valid unless it can be justified in rational grounds connected with the object intended to be achieved.
3. The position is, however, different in the case of a new scheme based on a cut-off-date, for the date there could be justified on the basis of financial burden, non-availability of old records, feasibility of extending the benefit to all retirees etc.
4. Cases of pay-revision, gratuity and provident fund, however, stand on a special footing. Here a person who has retired cannot claim the benefit of a pay-revision which comes into effect from a date after his retirement (unless it is retrospective) on the plea of discrimination. Similarly, a person who has retired, and whose rights have crystalized and who has collected his gratuity or cannot claim the benefit of any new scheme introduced with reference to a cut-off date falling after his retirement.
A decision of the Apex Court reported in Sewa Ram and Ors. v. Union of India and Ors. is also relevant, in which it is stated that it was for the Government to decide as a part of the executive policy as to from which date the arrears would be granted to the employee and the decision was not arbitrary or violative of Article 14 of the Constitution. Another decision of the Apex Court reported in State of Punjab and Ors. v. Amarnath Goyal and Ors. in which it is held that "it is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1-4-1995, after calculating the financial implications thereon, was either irrational or arbitrary". It is advantageous to rely on a decision of the Apex Court reported in State of Bihar v. Bihar Pensioners Samaj 2006 (2) KLT (SC) (SN) 78 (Case No. 96). In the above decision it is held as follows:
Finuncial constraints could be a valid ground for introducing a cut-off-date while introducing a pension scheme on revised basis. Thus, refusal to make payments of arrears from 1-1-1986 to 28-2-1989 on the ground of financial burden cannot be held to be an arbitrary ground or irrational consideration.
7. Having perused the above decisions, this Court is of the view that the conditions contained in Ext.P12 are not arbitrary or violative of Article 14 of the Constitution of India. It is for the Government to decide, as a part of the executive policy, to extent the benefit of Pension Scheme to the employees of the Corporation who retired prior to the cut-off date. In the instant case before this Court, the cut-off date has been fixed as 1-2-1996 on a very valid ground, namely, that of financial constraints and after the lapse of four years the petitioner cannot claim as that of the employees who retired prior to 1-2-1996. Even in Ext.P12 a condition is that pre 1996 retirees would be eligible for pension with effect from the month in which they refund the employer's contribution to contributory Provident Fund. Ext.P12 is dated 29-4-2000. Even after the lapse of more than 5 years none of the employees was willing to opt the condition contained in Ext.P12 Government Order.
8. In the above circumstances, this Court is of the view that the Original Petition has no merit and it is liable to be dismissed. Hence, the Original Petition is dismissed. No order as to costs.