Madras High Court
E. Arumugam (Retd) vs The Government Of India on 17 June, 2015
Author: V.M.Velumani
Bench: V.M.Velumani
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 17 .06.2015
CORAM
THE HONOURABLE MS.JUSTICE V.M.VELUMANI
W.P.(MD)No.9411 of 2011
1.E. ARUMUGAM (RETD)
ADMINISTRATIVE OFFICER,
125/78, SOURASHTRA HIGH SCHOOL COLONY,
ANUPPANADY ROAD,
MADURAI - 9.
2.R. MANOHARAN (RETD.)
SENIOR ASSISTANT,
G-S-2 VANYA, AGRINI
ANDALPURAM, MADURAI ? 3.
3.R. MADHAVAN (RETD.)
SENIOR ASSISTANT,
C-191, 3-31 NELLAIYAPPAR STREET,
THIRUNAGAR MADURAI - 6.
4.V.MEENAKSHI SUNDARESWARAN (RETD.)
DEPUTY MANAGER,
13/20 PILLAIYAR KOIL STREET.
S.S. COLONY, MADURAI - 16.
5.K.N. RAMARAJ (RETD.)
ADMINISTRATIVE OFFICER,
100, SOUTH PERUMAL MAISTRY STREET,
MADURAI - 1.
6.S. ANANDARAJ (RETD.)
ASSISTANT ACCOUNTS OFFICER,
C/40 SHANTHI NIKETHAN APARTMENTS
ANNA NAGAR, MADURAI - 20.
7.S.V. PANDIYAN (RETD.)
SENIOR ASSISTANT
2/2A PONMARI NAGAR
VENKATACHALAPURAM MADURAI - 11.
8.V. SELVARAJ (RETD.)
ADMINISTRATIVE OFFICER
7/10-5 BHARATHI NAGAR, 6TH STREET,
KRISHNAPURAM COLONY,
MADURAI - 14.
9.C. NAGASAMY (RETD.)
ASSISTANT, 176, SOUTH VELI STREET, MADURAI ? 1.
10.R.SABAPATHY (RETD.)
ADMINISTRATIVE OFFICER
17 VISALAKSHIPURAM
MADURAI - 14. ... Petitioners
Vs.
1.THE GOVERNMENT OF INDIA
REP. BY ITS SECRETARY,
MINISTRY OF FINANCE,
DEPT. OF ECONOMIC AFFAIRS,
BANKING AND INSURANCE
IIIrd FLOOR, JEEVAN VIKAR,
SANSAD MARG,
NEW DELHI - 1.
2.NATIONAL INSURANCE COMPANY LIMITED,
NO.3 MIDDLETON STREET,
KOLKATTA - 700 001
WEST BENGAL.
3.ORIENTAL INSURANCE COMPANY LIMITED,
A-25/27,
ASAF ALI ROAD,
NEW DELHI-2.
4.NEW INDIA ASSURANCE COMPANY LIMITED,
NO. 87. MAHATMA GANDHI RAOD
FORT, MUMBAI -1,
MAHARASHATRA.
5.UNITED INDIA INSURANCE COMPANY LIMITED,
WHITES ROAD, ROYAPETTAH,
CHENNAI-14.
6.GENERAL INSURANCE CORPORATION LIMITED,
NO.1 " SURAKSHA"
NO.170 J.T. ROAD
MUMBAI - 400 020
MAHARASHTRA.
7.NATIONAL INSURANCE SPECIAL
VOLUNTARY RETIRED/RETIRED EMPLOYEES ASSOCIATION
7-A (OLD NO.4-A),
SOUTH GANGAI AMMAN KOIL IST STREET,
CHOOLAIMEDU, CHENNAI-94.
REP. BY ITS PRESIDENT V.RAVISHANKAR
[(*) R7-IMPLEADED AS PER ORDER
DT. 04.12.14 IN MP.1/14] ... Respondents
Writ petition filed under Article 226 of the Constitution of India
praying for Writ of Mandamus directing the respondents 1 to 6 to grant
revised pension and other benefits of the petitioners on the basis of revised
pay scale as amended and effected from time to time and pay all consequential
benefits including the arrears of pension on such revision from time to time.
(Prayer Amended as per order dated 18/12/2014 in MP.2/14 by KBKVJ).
!For Petitioner : Mr.V.Parthiban for
M/s. Paul and Paul
^For Respondents : Mr.S.Murugan,
Central Government Standing Counsel for R-1
Mr.V.Perumal for RR-2 to 6
Mr.V.Vijay Shankar for
Mr.K.Hema Karthikeyan for R-7
Date of reserving the order :18.03.2015
Date of pronouncing the order: 17.06.2015
:ORDER
The petitioners have come up with this writ petition directing the respondents 1 to 6 to grant revised pension and other benefits of them, on the basis of revised pay scale as amended and effected from time to time and pay all consequential benefits including the arrears of pension on such revision from time to time.
2.The petitioners were employees of respondents 2 to 6. They worked in various capacities and retired either on attaining age of superannuation or under Voluntary Retirement Scheme. All the petitioners are receiving pension as per the General Insurance (Employees') Pension Scheme, 1995, which was made applicable to all the employees, who retired or died on or after 01.01.1986. For those who retired or were in service before the notified date, the pension was optional and those who joined the companies, after modified date, the pension was made compulsory.
3.On 27.05.1974, the General Insurance (Rationalisation and Revision of Pay Scales and other conditions of Service of Supervisory, Clerical and Subordinate Staff), Scheme, 1974 was framed. The said scheme provided for various pay scales applicable to different category of employees and for payment of various allowances to the employees. In 1975, similar scheme was framed for officers.
4.Subsequent to the initial notification, in 1974, the first respondent was issuing notification periodically amending the original scheme revising the pay scales and other conditions of service and benefits of the employees. The amendments to the scheme were notified in 1989, 1996, 1997, 2005 and lastly in the year 2010.
5.The first respondent by the above notifications revised the pay scales of the employees, but failed to issue notification for revising pension payable to the already retired Insurance Employees on the basis of revised pay scales and other related revised benefits. The retired employees continued to draw their pension on the basis of the pay last drawn in the pay scales on the date of their date of retirement.
6.According to the petitioners, their quantum of pension remained static, whereas, cost of living increased manifold. They gave many representations to the first respondent lastly on 27.04.2011. The first respondent did not send any reply. In the representation, the petitioners pointed out that whenever recommendations of Central Pay Commission were implemented, the first respondent always issued corresponding notification for revision of pension on the basis of revised pay scale of all pensioners by treating them as homogeneous group. On the other hand, the Insurance companies are concerned, there are several groups of pensioners depending upon their dates of retirement even though covered by the same scheme. There is classification within classification. Such classification is per se preposterous and impermissible.
7.There is no provision in the pension scheme for revision of pension by notification. Therefore, the first respondent must issue notification by invoking residuary provision Clause 58 of the General Insurance Pension Scheme, 1995. In Similar situation, the employees of Life Insurance Corporation of India approached Rajasthan High Court, challenging different yardsticks adopted by the Corporation and treating the pensioners differently on the basis of their date of retirement. The learned single Judge accepted the contentions of the petitioners therein and the Division Bench confirmed the same. Now, the issue is pending in the Honourable Apex Court. Identically placed retired employees of the National Insurance Company like the petitioners herein have recently approached the Rajasthan High Court with a similar prayer like the present one.
8. The denial of pension on the basis of revised pay scales and treating the petitioners differently on the basis of their date of retirement amounted to hostile discrimination (as held in D.S.Nakara and Others Vs Union of India AIR 1983, SC 130). Therefore offends under Articles 14 and 16 of Constitution of India. This denial is unsustainable in law. Treating the petitioners as various groups for the purpose of pensionary benefits on the basis of the date of their retirement is discriminatory, arbitrary, unreasonable and violative of Article 14 and 16 of Constitution of India.
9. Calculation of pension on the basis of non existent pay scale is contrary to the letter and spirit of 1995 Pension Scheme and is against the principles of natural justice. The respondents are treating the petitioners differently without any intelligible differences amounted to unreasonable classification. The denial of pension on revised pay scale is also opposed ?legitimate expectation? and affects the very right of livelihood of the petitioners under Article 21 of Constitution of India.
10. (i)The 2nd respondent filed counter affidavit denying all the averments made by the petitioners. The respondent, at the out set, took a technical plea that the petitioners do not have enforceable right to demand that pension should be payable in accordance with the revised pay scale. The condition precedent for praying for issue of writ of mandamus is absent in the case of the petitioners. Having accepted the provision of Service Regulations, the petitioners have no right to maintain the present writ petition.
(ii) The petitioners are not aggrieved by any of the Provisions of Pension Scheme, 1995 and they are not challenging the pension scheme and subsequent amendments. The policy in respect of pension is beyond the purview of judicial review. When rule or its vires is not challenged, no benefit against the rule can be given.
(iii)The petitioners are paid pension as per the Provisions of Pension Scheme, 1995 as amended from time to time. As per the said scheme, the pension shall be 50% of basic pay as may be actually drawn by the employee during the last 10 months of his service linked with dearness relief thereon as periodically revised on the basis of Consumer Price Index. (CPI). The pension scheme has an in-built provision for periodical revision of dearness relief linked to Consumer Price Index (CPI). Hence, the petitioners are not entitled to issue of notification when pay scale has been revised.
(iv)In this regard, the Honourable Apex Court has held that
a)pension is required to be computed on calculation of average of last 10 months pay actually drawn by the employee.
b)Grant of pension de hors the rules and regulations is not permissible. No one can claim pension on the ground of parity with some other case. The question of violation of Article 14 does not arise.
c)The pensioner under the old rules and new rules are not similarly situated. Each set of retiring employees will be governed by their own rules, in force, when they retire. Hence, the petitioner cannot claim the benefit of scheme based on subsequent revision of pay scale after the date of retirement.
d)Parity between different services with regard to grant of pension cannot be granted. The court cannot substitute all the existing service conditions by totally new set of service conditions.
v)The respondents have not created several classes amongst homogenous class of pensioners. As per clause 2(k) & 2(r) of definitions of ?employee? and ?pensioners? are two different entities. As per clauses of pension scheme calculation of pension is made on the basis of pay as it existed on the date of retirement.
vi)The service conditions of respondents are entirely different from other departments of Central Government. Recommendations of Pay Commission have no relevance to the facts of the present case. Pension scheme of respondent have in-built provision for periodical revision of dearness relief linked to Consumer Price Index (CPI). Subsequent revision of pay scale shall not have any effect of revising basic pension. Service conditions of Life Insurance Corporation is different from the respondents herein.
vii)Revision of pay scale is governed by General Insurance (Rationalization of Pay Scale and other conditions of Service of Officers) Scheme, 1975 and the same applies only to the existing employees. The principles of legitimate expectation has no application to the facts of the present case and there is no violation of Article 21 of Constitution of India.
viii)Non-grant of pension based on the revised pay scale is not opposed to fair play, equity and good conscience. Having accepted the service regulation, the petitioners have at this stage, have no right to make a demand by way of a writ of mandamus.
11. The respondents 3 and 5 have filed separate counter affidavits, containing the very same averments as that of the second respondent.
12. Heard the learned counsel appearing for the petitioners and the learned counsels appearing for the respondents.
13.The learned counsel for the petitioners and respondents argued elaborately referring to the averments made in the affidavit and counter affidavits.
14. The learned counsel for the petitioner relied on the following judgments:
i)(1983) 1 Supreme Court Cases 305 (D.S.Nakara and Others Vs Union of India).
?9. Is this class of pensioners further divisible for the purpose of ?entitlement? and ?payment? of pension into those who retired by certain date and those who retired after that date? If date of retirement can be accepted as a valid criterion for classification, on retirement each individual government servant would form a class by himself because the date of retirement of each is correlated to his birth date and on attaining a certain age he had to retire. It is only after the recommendations of the Third Central Pay Commission were accepted by the Government of India that the retirement dates have been specified to be 12 in number being last day of each month in which the birth date of the individual government servant happens to fall. In other words, all government servants who retire correlated to birth date on attaining the age of superannuation in a given month shall not retire on that date but shall retire on the last day of the month. Now, if date of retirement is a valid criterion for classification, those who retire at the end of every month shall form a class by themselves. This is too microscopic a classification to be upheld for any valid purpose. Is it permissible or is it violative of Article 14?
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 to that date. If the 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 8100 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 10 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 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 Article 14.
ii)(1985) 3 Supreme Court Cases 345 (Premilobai Vishnu Dixit Vs State of Maharashtra).
?7. It is not necessary to examine the concept of pension. As already held by this Court in numerous judgments pension is a right not a bounty or gratuitous payment. The payment of pension does not depend upon the discretion of the Government but is governed by the relevant rules and anyone entitled to the pension under the rules can claim it as a matter of right. (Deoki Nandan Prasad v. State of Bihar2, State of Punjab v. Iqbal Singh3 and D.S. Nakara v. Union of India1.) Where the Government servant rendered service, to compensate which a family pension scheme is devised, the widow and the dependent minors would equally be entitled to family pension as a matter of right. In fact we look upon pension not merely as a statutory right but as the fulfilment of a constitutional promise inasmuch as it partakes the character of public assistance in cases of unemployment, old-age, disablement or similar other cases of undeserved want. Relevant rules merely make effective the constitutional mandate. That is how pension has been looked upon in D.S. Nakara judgment1. At the hearing of this group of matters we pointed out that since the family pension scheme has become non-contributory effective from September 22, 1977 any attempt at denying its benefit to widows and dependents of Government servants who had not taken advantage of the 1964 liberalisation scheme by making or agreeing to make necessary contribution would be denial of equality to persons similarly situated and hence violative of Article 14. If widows and dependents of deceased Government servants since after September 22, 1977 would be entitled to benefits of family pension scheme without the obligation of making contribution, those widows who were denied the benefits on the ground that the Government servants having not agreed to make the contribution, could not be differently treated because that would be introducing an invidious classification among those who would be entitled to similar treatment. When this glaring dissimilar treatment emerged in the course of hearing in the Court, Mr B. Dutta learned counsel appearing for the Union of India requested for a short adjournment to take further instructions.?
iii)(1987) 4 Supreme Court Cases 31 (R.L.Marwaha Vs Union of India and Others).
?8. There is no dispute that the ICAR though it is a body registered under the Societies Registration Act, 1960, is a body which is sponsored, financed and controlled by the Central Government. There has been a continuous mobility of personnel between Central Government departments and autonomous bodies, like the ICAR both ways and the Government thought, and rightly so, that it would not be just to deprive an employee who is later on absorbed in the service of the autonomous body, like the ICAR the benefit of the service rendered by him earlier in the Central Government for purposes of computation of pension and similarly the benefit of service rendered by an employee who is later on absorbed in the Central Government service the benefit of the service rendered by him earlier in the autonomous body for purposes of computation of pension. If that was the object of issuing the notification then the benefit of such notification should be extended to all pensioners who had rendered service earlier in the Central Government or in the autonomous body as the case may be with effect from the date of the said Government Order. Now let us take the case of a person who had rendered service under the Central Government between January 1, 1953 and July 1, 1955 but who has retired from service of the ICAR in 1985. There is no dispute that such a person gets the benefit of the service put in by him under the Central Government for purposes of his pension. But another pensioner who has put in service under the Central Government during the same period will not get similar concession if he has retired prior to the date of the Government Order if para 7 of that order is applied to him. The result will be that whereas in the first case there is pensionary liability of the Central Government in the second case it does not exist although the period of service under the Central Government is the same. This discrimination arises on account of the Government Order. There is no justification for denying the benefit of the Government Order to those who had retired prior to the date on which the Government Order was issued. The respondents have not furnished any acceptable reason in support of their case, except saying that the petitioner was not entitled to the benefit of the Government Order because the order says that it would not be applicable to those who had retired prior to the date on which it was issued. In the absence of any explanation which is worthy of consideration it has to be held that the classification of the pensioners who were working in the government/autonomous bodies into two classes merely on the basis of the date of retirement as unconstitutional as it bears no nexus to the object to be achieved by the order.?
iv)(1988) 3 Supreme Court Cases 32 (Bharat Petroleum (Erstwhile Burmah Shell) Management Staff Pensioners Vs Bharat Petroleum Corporation Limited and Others).
?4. The writ petition is, therefore, confined to the only question as to the escalation of pension. Burmah Shell has a fund known as Burmah Shell India Pension Fund and it has its own rules. When government nationalised the petroleum industry, another company known as Caltex India Ltd. was also acquired and came to be known as Hindustan Petroleum Corporation. It is thus a sister concern owned by the Central Government. Petitioners relied upon the increase in the pension granted by the Hindustan Petroleum Corporation to its employees in support of their claim for the increase in the pension. While Burmah Shell had a pension fund which has been taken over by the government company, Caltex did not have such a fund. The allegation made by the petitioners that the Hindustan Petroleum Corporation where there is no such fund has granted a steep escalation in the pension has not been disputed before us. Admittedly Burmah Shell is a bigger company than Hindustan Petroleum Corporation. We have been told that the total Burmah Shell management staff presently in the employment of the Respondent 1 would be around a thousand. Nothing acceptable has been placed before us from where support can be received for the argument of Mr Pai, learned counsel for Respondent 1, that if the escalation admitted by Messrs Hindustan Petroleum Corporation is accepted as the basis for escalation in Burmah Shell there would be injustice or a burden would arise which the respondent Company cannot discharge. The respondent Company has an obligation to pay from its earnings into the fund and merely because the existing fund is not adequate to bear the additional liability the claim which is otherwise justified cannot be rejected. As we have already pointed out, the Company?s current funds are available to supplement the pension fund.
5. Judicial notice can be taken of the fact that the rupee has lost its value to a considerable extent. Pension is no longer considered as a bounty and it has been held to be property. In a welfare State as ours, rise in the pension of the retired personnel who are otherwise entitled to it is accepted by the State and the State has taken the liability. If the similarly situated sister concern like Hindustan Petroleum Corporation can admit appropriate rise in the pension, we see no justification as to why the respondent Company should not do so.?
v)1992 Supp (1) Supreme Court Cases 664 (All India Reserve Bank Retired Officers Association and Others Vs Union of India and Another). ?10.That is why in Nakara case1 this Court drew a distinction between continuance of an existing scheme in its liberalised form and introduction of a wholly new scheme; in the case of the former all the pensioners had a right to pension on uniform basis and any division which classified them into two groups by introducing a cut-off date would ordinarily violate the principle of equality in treatment unless there is a strong rationale discernible for so doing and the same can be supported on the ground that it will subserve the object sought to be achieved. This distinction between those belonging to the pension scheme and those belonging to the CPF scheme has been rightly emphasised by this Court in Krishena case.?
vi)(1998) 8 Supreme Court Cases 30 (V.Kasturi Vs Managing Director, State Bank of India, Bombay and Another).
?22. If the person retiring is eligible for pension at the time of his retirement and if he survives till the time of subsequent amendment of the relevant pension scheme, he would become eligible to get enhanced pension or would become eligible to get more pension as per the new formula of computation of pension subsequently brought into force, he would be entitled to get the benefit of the amended pension provision from the date of such order as he would be a member of the very same class of pensioners when the additional benefit is being conferred on all of them. In such a situation, the additional benefit available to the same class of pensioners cannot be denied to him on the ground that he had retired prior to the date on which the aforesaid additional benefit was conferred on all the members of the same class of pensioners who had survived by the time the scheme granting additional benefit to these pensioners came into force. The line of decisions tracing their roots to the ratio of Nakara case1 would cover this category of cases.
Category II
23. However, if an employee at the time of his retirement is not eligible for earning pension and stands outside the class of pensioners, if subsequently by amendment of the relevant pension rules any beneficial umbrella of pension scheme is extended to cover a new class of pensioners and when such a subsequent scheme comes into force, the erstwhile non-pensioner might have survived, then only if such extension of pension scheme to erstwhile non-pensioners is expressly made retrospective by the authorities promulgating such scheme; the erstwhile non-pensioner who has retired prior to the advent of such extended pension scheme can claim benefit of such a new extended pension scheme. If such new scheme is prospective only, old retirees non-pensioners cannot get the benefit of such a scheme even if they survive such new scheme. They will remain outside its sweep. The decisions of this Court covering such second category of cases are: Commander, Head Quarter v. Capt. Biplabendra Chanda10 and Govt. of T.N. v. K. Jayaraman11 and others to which we have made a reference earlier. If the claimant for pension benefits satisfactorily brings his case within the first category of cases, he would be entitled to get the additional benefits of pension computation even if he might have retired prior to the enforcement of such additional beneficial provisions. But if on the other hand, the case of a retired employee falls in the second category, the fact that he retired prior to the relevant date of the coming into operation of the new scheme would disentitle him from getting such a new benefit.?
vii)(2001) 8 SCC 71 (Subrata Sen & Others Vs Union of India). ?14. In our view the aforesaid para does not in any way support the contention of the respondents. On the contrary, on parity of reasoning, we would also reiterate that let us be clear about this misconception. Firstly, the Pension Scheme including the liberalised scheme available to the employees is non-contributory in character. Payment of pension does not depend upon Pension Fund. It is the liability undertaken by the Company under the Rules and whenever becomes due and payable, is to be paid. As observed in Nakara case1 pension is neither a bounty, nor a matter of grace depending upon the sweet will of the employer, nor an ex gratia payment. It is a payment for the past services rendered. It is a social welfare measure rendering socio-economic justice to those who in the heyday of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in the lurch. Maybe that in the present case, the trust for Pension Fund is created for income tax purposes or for smooth payment of pension, but that would not affect the liability of the employer to pay monthly pension calculated as per the Rules on retirement from service and this retirement benefit is not based on availability of Pension Fund. There is no question of pensioners dividing the Pension Fund or affecting the pro rata share on addition of new members to the Scheme. As per Rule 1 quoted above, an employee would become a member of the Fund as soon as he enters into a specified category of service of the Company. Under Rule 8, trustees may withhold or discontinue a pension or annuity or any part thereof payable to a member or his dependants, and that pension amount is non-assignable. Further, the payment of pension was the liability of the employer as per the Rules and that liability is required to be discharged by the Union of India in lieu of its taking over of the Company. The rights of the employees (including retired) are protected under Section 11 of the Burmah Oil Company [Acquisition of Shares of Oil India Limited and of the Undertakings in India of Assam Oil Company Limited and the Burmah Oil Company (India Trading) Limited] Act, 1981.
17. In our view, the ratio of the aforesaid judgment is not applicable in the present case. In the said case, Indian Oxygen Ltd. had set up a ?non- contributory superannuation fund? known as the Indian Oxygen Ltd. Executive Staff Pension Fund. As per the Rules, an employee was entitled to receive an annuity under a policy purchased by the trustee of the Fund from Life Insurance Corporation of India. The petitioners in that case contended that the scheme of such non-contributory approved superannuation fund should be modified so as to provide for disbursement of pension by the Fund themselves or in the alternative by a statutory body to be newly constituted under a new scheme. Further, the Fund was constituted for the purpose of providing an annuity to the beneficiaries and the trustees were required to accumulate the contribution in respect of each beneficiary and purchase an annuity from Life Insurance Corporation of India at the time of retirement or death of each employee or on his becoming incapacitated prior to retirement as per Rule 89(2) of the Income Tax Rules, 1962. Therefore, when an employee retired, all accumulated contribution in respect of the employee concerned made by the employer to the Pension Fund of the trust was crystallized for the benefit of the employee. In that set of circumstances, the Court observed that the right of the employee to receive the annuity and quantum of his annuity gets crystallized at the time of purchase of annuity under the then existing scheme of Life Insurance Corporation of India. The Court also observed that the contention was based on misunderstanding of the nature of the annuity which is purchased in the interest of each employee as and when he retires. The position in the present case is altogether different. Right to get pension is obviously different from getting annuity on the basis of accumulated contribution. The Rules for grant of pension provide that an employee mentioned in a specified category shall automatically be a member of the pension fund and is entitled to get pension on the date of his retirement. Amount of pension is to be determined as per the Rules. That Rule is modified and the petitioners seek relief on the basis of the amended Rule on the ground that there cannot be any discrimination between the employees who retired prior to or after a particular date, as held in Nakara case1 which is followed by this Court in various decisions including V. Kasturi2. Further, there is no question of the pensioners (retired employees) dividing the Pension Fund and/or payment of pension to be made only from the Pension Fund. The liability to pay pension arises because of provision made in the Rules. In this view of the matter, the decision in Sasadhar Chakravarty3 would have no bearing.?
viii)(2008) 9 SCC 125 (Union of India and another Vs SPS Vains (Retd.) & Others).
?28. The question regarding creation of different classes within the same cadre on the basis of the doctrine of intelligible differentia having nexus with the object to be achieved, has fallen for consideration at various intervals for the High Courts as well as this Court, over the years. The said question was taken up by a Constitution Bench in D.S. Nakara1 where in no uncertain terms throughout the judgment it has been repeatedly observed that the date of retirement of an employee cannot form a valid criterion for classification, for if that is the criterion those who retired by the end of the month will form a class by themselves. In the context of that case, which is similar to that of the instant case, it was held that Article 14 of the Constitution had been wholly violated, inasmuch as, the Pension Rules being statutory in character, the amended Rules, specifying a cut-off date resulted in differential and discriminatory treatment of equals in the matter of commutation of pension. It was further observed that it would have a traumatic effect on those who retired just before that date. The division which classified pensioners into two classes was held to be artificial and arbitrary and not based on any rational principle and whatever principle, if there was any, had not only no nexus to the objects sought to be achieved by amending the Pension Rules, but was counterproductive and ran counter to the very object of the pension scheme. It was ultimately held that the classification did not satisfy the test of Article 14 of the Constitution.?
ix)(2013) 2 SCC 772 (Kallakkurichi Taluk Retd. Officials Assn. Vs. State of Tamil Nadu).
?33. At this juncture it is also necessary to examine the concept of valid classification. A valid classification is truly a valid discrimination. Article 16 of the Constitution of India permits a valid classification (see State of Kerala v. N.M. Thomas4). A valid classification is based on a just objective. The result to be achieved by the just objective presupposes, the choice of some for differential consideration/treatment, over others. A classification to be valid must necessarily satisfy two tests. Firstly, the distinguishing rationale has to be based on a just objective. And secondly, the choice of differentiating one set of persons from another, must have a reasonable nexus to the objective sought to be achieved. Legalistically, the test for a valid classification may be summarised as a distinction based on a classification founded on an intelligible differentia, which has a rational relationship with the object sought to be achieved. Whenever a cut-off date (as in the present controversy) is fixed to categorise one set of pensioners for favourable consideration over others, the twin test for valid classification (or valid discrimination) must necessarily be satisfied.?
x) In the Order dated 12.01.2010, the Rajasthan High Court, at Jaipur Bench, in
i)S.B.Civil Writ Petition No.6676 of 1998 Krishna Murari Lal Asthana Vs Union of India & Others
ii)S.B.Civil Writ Petition No.654/2007 Krishna Murari Lal Asthana & Ors Vs L.I.C of India & Ors, the issue regarding cut off date for providing pensionary benefits are summarized in the following manner:-
i)If there are change in benefit of pension then no cut off date can be provided. The benefit on account of change in pensionary benefits would have retrospective effect.
ii)If the pension is introduced for the first time, a cut off date can be fixed.
Aforesaid issue has been settled by the Hon'ble Apex Court in various judgments cited by learned counsel for petitioners. In the case of V.Kasthuri Vs State Bank of India (supra) (1998) (8) SCC 30, it was held that if a person was eligible for pension at the time of his retirement and if he survives till the time of subsequent amendment of the relevant pension scheme, he would become eligible to get enhanced pension or would become eligible to get more pension as per new formula. Accordingly, he would be entitled to get similar benefit from the date it is given to other members. Same view has been reiterated in the cases of Dr.Vijayappurapu Subhayamma (supra), Subrata Sen (supra) and in the case of All India Reserve Bank Retired Officers' Association Vs Union of India reported in 1992 suppl. (1) Scc 664. In paras 9 and 10 of All India Reserve Bank Retired Officers' Association's case, aforesaid issue was decided after referring earlier judgment of the Hon'ble Apex Court in the case of D.S.Nakara Vs. Union of India (AIR 1983 SC 130).
xi)In the order dated 21.01.2011, the Rajasthan High Court, at Jaipur Bench, in
i)D.B.Civil Special Appeal (W).No.493 of 2010 Life Insurance Corporation of India Vs Krishna Murari Lal Asthana and ors
ii)D.B.Civil Special Appeal (W).No.494 of 2010 Life Insurance Corporation of India Vs Krishna Murari Lal Asthana and ors, the Honourable Supreme Court held in paragraph No.6 as follows:
?6.We are of the view that whatever grievance with regard to the implementation of the Board's resolution dated 24.11.2001 is concerned, the same can be raised by the Union of India who has chosen not to file any appeal in the matter and this can easily be considered as an approval of the said resolution of the Board dated 24.11.2001 which was allegedly pending for nine years. The Board of LIC, who is the appellant before us against the judgment of the learned Single Judge, had itself taken a decision to remove the disparities and the discrimination with regard to the payment of Dearness Allowance and pension to the retired employees under its resolution of the Board dated 24.11.2001, which was in public interest. It could not and should not have filed the present appeal against the judgment of the learned Single Judge as the learned Single Judge has provided an umbrella to the appellant for the implementation of the decision of the Board dated 24.11.2001 on the categorical statement made by the learned counsel appearing on behalf of the Union of India and not assailed in appeal by the Union of India.?
15. The learned counsel for the respondents 2 to 6 relied on the following decisions:
i)(2006) 1 Supreme Court Cases 360 (Union of India and Another Vs Sathish Kumar).
?9. In all these petitions it is an admitted position that Rule 49 of the Central Civil Services (Pension) Rules would apply. The respondents? only claim, in their writ petitions, was that this Court had held in Raghu Nandan case1 and various High Courts? judgments that the qualifying service should be 30 years, they were thus also entitled to the benefit. It is admitted before us that, in not a single writ petition, is there any averment that Rule 49 of the Central Civil Services (Pension) Rules does not apply to that particular case. In none of the cases is there any challenge to the vires of the Rules and/or any challenge taken on the ground that the Rule is discriminatory.
12. So long as it is an admitted position that Rule 49 governs, payment of pension in all these cases, could only be as per the Rules. When there is no challenge to the Rule and there is no ground of discrimination taken in any of the petitions the Rule cannot be bypassed.?
ii)2015 (1) Scale 527 (T.M.Sampath & Ors Vs. Secretary, Ministry of Water Resources & Ors).
?14.In light of the facts and circumstances of this case and the submissions made by the learned counsel on both sides, it can be concluded that NWDA had framed its regulation the CPF Rules, 1982 and they were duly approved by the Governing Body of NWDA. As NWDA is an autonomous body under the Ministry of Water Resources, it has framed it own bye-laws governing the employees. It has been time and again reiterated that the Court must adopt an attitude of total non-interference or minimal interference in the matter of interpretation of Rules framed by autonomous institutions. In Chairman & MD, Kerala SRTC vs. K.O. Varghese and Others, (2007) 8 SCC 231, this Court held:
"KSRTC is an autonomous corporation established under the Road Transport Corporation Act, 1950. It can regulate the service of its employees by making appropriate regulations it that behalf. The High Court is not correct in thinking that there is any compulsion on KSRTC on the mere adoption of Part III of KSR to automatically give all enhancements in pension and other benefits given by the State Government to its employees."
Thus, as the appellants are governed by the CPF Rules 1982, the O.M. applicable to Central Government employees is not applicable to them.
35.Learned Additional Solicitor General has submitted that the right to pension is not an inherent right of every employee but it flows from the rules of the Government. If the employee is entitled to pension as per the rules of the Government, his/her pension cannot be withheld by a simple executive order (Deokinandan Prasad v. State of Bihar & Ors. (1971) 2 SCC
330). Similarly, it is submitted that if the employee is not entitled to the pension as per the rules governing his/her service conditions, he/she cannot claim it as of right inherent to the employment.?
iii) 2015 (1) Scale 64 (Manojbhai N.Shah & Ors Vs Union of India & Ors).
?33.....we are of the view that the employees who had taken benefit under the Scheme and had already retired would not be entitled to additional pension due to retrospective increase in pay in pursuance of Notification dated 21st December, 2005.
36....In normal circumstances when an employee retires from service, his relationship with the employer comes to an end. It is also a well settled legal position that after retirement, normally no disciplinary action can be initiated against the concerned employee. Similarly, the retired employee would not have any right of redetermination of his pension but only in cases where salary is revised with retrospective effect, the retired employee gets the benefit of additional pension and that too in certain cases.
38.We do not agree with the submission made on behalf of the employees that action of the Employers in not giving pay rise to the employees in pursuance of the Notification is discriminatory in nature. The employees who retired under the Scheme form a separate class of employees who were given many benefits, which are not given to employees retiring in normal course. If they all form a separate class, by no stretch of imagination it can be said that all those who retired under the Scheme and those who retired in normal course, are similarly situated. Thus, in our opinion, there is no violation of Article 14 of the Constitution of India in the instant case. ?
iv)1990 (4) SCC 207 (Krishna Kumar Vs Union of India).
?30.Thus the Court treated the pension retires only as a homogeneous class. The PF retirees were not in mind. The court also clearly observed that while so reading down it was not dealing with any fund any there was no question of the same cake being divided amongst larger number of the pensioners than would have been under the notification with respect to the specified date. All the pensioners governed by the 1972 rules were treated as a class because payment of pension was a continuing obligation on the part of t he State till lthe death of each of the pensioners and, unlike the case of Contributory Provident Fund, there was no question of a fund in liberalising pension.
32. In Nakara1 it was never held that both the pension retirees and the PF retirees formed a homogeneous class and that any further classification among them would be violative of Article 14............. Thus, on the retirement of an employee government?s legal obligation under the Provident Fund account ends while under the Pension Scheme it begins. The rules governing the Provident Fund and its contribution are entirely different from the rules governing pension. It would not, therefore, be reasonable to argue that what is applicable to the pension retirees must also equally be applicable to PF retirees. ........... An imaginary definition of obligation to include all the government retirees in a class was not decided and could not form the basis for any classification for the purpose of this case. Nakara1 cannot, therefore, be an authority for this case.
33......... But in Nakara1 it was never required to be decided that all the retirees formed a class and no further classification was permissible.?
v)1991 (2) SCC 104 (Indian Ex Service League Vs Union of India). ?10. Having heard both sides at length and after giving our anxious consideration to the matter, we have reached the conclusion that the claim of the petitioners in the present writ petitions is untenable and it proceeds on a misreading of the Nakara1 decision.
12. The liberalised pension scheme in the context of which the decision was rendered in Nakara1 provided for computation of pension according to a more liberal formula under which ?average emoluments? were determined with reference to the last ten months? salary instead of 36 months? salary provided earlier yielding a higher average, coupled with a slab system and raising the ceiling limit for pension............
14. Nakara1 decision came up for consideration before another Constitution Bench recently in Krishena Kumar v. Union of India2. The petitioners in that case were retired Railway employees who were covered by or opted for the Railway Contributory Provident Fund Scheme. It was held that PF retirees and pension retirees constitute different classes and it was never held in Nakara1 that pension retirees and PF retirees formed a homogeneous class, even though pension retirees alone did constitute a homogeneous class within which any further classification for the purpose of a liberalised pension scheme was impermissible. It was pointed out that in Nakara1, it was never required to be decided that all the retirees for all purposes formed one class and no further classification was permissible. We have referred to this decision merely to indicate that another Constitution Bench of this Court also has read Nakara1 decision as one of limited application and there is no scope for enlarging the ambit of that decision to cover all claims made by the pension retirees or a demand for an identical amount of pension to every retiree from the same rank irrespective of the date of retirement, even though the reckonable emoluments for the purpose of computation of their pension be different.?
vi)1999 (3) SCC 414 (T.N.Electricity Board Vs R.Veerasamy). ?10. In Hari Ram Gupta v. State of U.P.6 this Court held as follows:
(SCC pp. 334-35, para 9) ?9. ............., it is not always possible to extend the same benefits to one and all, irrespective of the dates of superannuation. As such, any revised scheme in respect of post-retirement benefits, if implemented with a cut-off date, which can be held to be reasonable and rational in the light of Article 14 of the Constitution, need not be held to be invalid. ........?
11. On 17-11-1998, a three-Judge Bench in All India PNB Retired Officers?
Assn. v. Union of India while negativing an identical claim, held as follows:
?This writ petition is squarely covered by the judgment of this Court in All India Reserve Bank Retired Officers? Assn. v. Union of India10. That judgment has rightly noted the distinction that Nakara case1 drew between a continuing scheme and a new scheme.?
vii)1996 (3) SCC 454 (V.M. Gadre (Dead) by Lrs Vs M.G.Diwan).
?10. ........ It is obvious from the above reliefs claimed in this case that the pensioners desire to give a complete go-by to the extant pension plan and replace it by a totally new scheme. These demands made in a petition under Article 32 of the Constitution totally overlook the fact that the Court cannot substitute a totally new pension plan in place of an existing one as each service and each institution has its own service conditions and merely because in another service the pension plan is better it cannot be adopted and substituted in a different service. In any service a pension plan is only one component of the basket of service conditions for that service and it cannot be viewed in isolation and where comparison is permissible all the conditions have to be compared because in one service weightage may have been given to fixation of pension whereas in another the benefit may have been given to house rent or maximum medical expenses......?
viii)1991 Supplement (2) SCC 141 (State of Rajasthan Vs Rajasthan Pensioner Samaj).
?2. We heard both the learned counsel for the respective parties for a considerable length of time. The main submission, urged on behalf of the appellant-State is that after the judgment of the Constitution Bench of this Court in Krishena Kumar v. Union of India2 the impugned judgment of the High Court following D.S. Nakara judgment1 cannot be sustained and that the contributory provident fund retirees (hereinafter called as CPF Retirees) form a different class from those who had opted for pension scheme according to the decision in Krishena Kumar case2 and as such they are not entitled now to claim as of right to switch over from Provident Fund Scheme to Pension Scheme and consequently the CPF Retirees are not entitled to the benefits granted to the Pension Retirees...........?
ix)1994 (4) SCC 68 (Union of India Vs P.N.Menon & Others). ?8. Whenever the Government or an authority, which can be held to be a State within the meaning of Article 12 of the Constitution, frames a scheme for persons who have superannuated from service, due to many constraints, it is not always possible to extend the same benefits to one and all, irrespective of the dates of superannuation. As such any revised scheme in respect of post-retirement benefits, if implemented with a cut-off date, which can be held to be reasonable and rational in the light of Article 14 of the Constitution, need not be held to be invalid. It shall not amount to ?picking out a date from the hat?, as was said by this Court in the case of D.R. Nim v. Union of India2 in connection with fixation of seniority. Whenever a revision takes place, a cut-off date becomes imperative because the benefit has to be allowed within the financial resources available with the Government.
20......... The respondents not being in service on the said date, were not eligible for the said benefit and no question of refunding the amount, which had already been contributed by them, did arise. According to us, the High Court was in error in applying the principle of D.S. Nakara1 in the facts and circumstances of the present case.?
x)1995 (2) SCC 530 (Union of India & Others Vs. B.Rama Murthy). ?3.......It is permissible to introduce different retiral benefit schemes for government servants as indicated in the decisions held by this Court in Krishena Kumar v. Union of India3, Indian Ex-Services League v. Union of India4 and State of Rajasthan v. Rajasthan Pensioner Samaj5.?
xi)1995 Supplement (4) SCC 205 (E.Gopalakrishnan & Others Vs. Union of India).
?3....... The pension is required to be computed on calculation of average of 10 months? pay actually drawn by the employee. Since the appellants admittedly were not in service as on 1-9-1985, the date on which the notional pay was given effect to, they had not actually drawn the pay including Rs 35 per month. Accordingly, the scale of pay including Rs 35 per month cannot be stepped up for computing the pension.?
xii)1997 (7) SCC 334 (Union of India Vs Lieut (Mrs) E.IACATS. ?4. The next question relates to payment of pension. Under Army Instruction No. 14 which was in force at the material time, the respondent, either on the date of her appointment or on the date of her retirement, or at any time during her service, did not have the benefit of pension on retirement. The terms and conditions of service were known to her at the time when she joined the service. At the time of joining service she had signed an agreement to abide by the rules and regulations governing Military Nursing Service (Local) from time to time. She has claimed that pensionary benefits which were conferred for the first time on all those who retired on or after 1-10-1983 should be given to her although she retired much prior to that date. Although she has not challenged the cut-off date as arbitrary, reliance in this connection is placed by her on the decision in the case of D.S. Nakara v. Union of India1. This decision has been subsequently explained and distinguished in a number of cases. In the case of Sushma Sharma (Dr) v. State of Rajasthan2 (AIR at p. 1379 : SCC p. 66, para 44) this Court cited with approval its earlier observations in Union of India v. Parameswaran Match Works Ltd.3 to the effect that the choice of a date as a basis of classification cannot always be dubbed as arbitrary unless it is capricious or whimsical. .......... Pensioners under the old rules and pensioners under the new rules are not similarly situated. Each set of retiring employees will be governed by their own rules in force when they retire.?
xiii)1997 (6) SCC 7 (K.L.Rathee Vs Union of India).
?6. We are unable to uphold this contention. Nakara case1 dealt with the manner of calculation of pension on the basis of average emoluments of a retired government employee. Prior to the liberalisation of the formula for computation of pension made by the memorandum dated 25-5-1979, average emoluments of the last thirty months of service of the employee provided that basis for calculation of pension. The 1979 memorandum provided that average emoluments must be calculated on the basis of the emoluments received by a government servant during the last ten months of the service. That apart, a new slab system for computation of pension was introduced and the ceiling on pension was raised. As a result of these changes, the pensioners who retired prior to the specified date suffered triple jeopardy, viz., lower average emoluments, absence of slab system and the lower ceiling. This Court struck down the provision including the memorandum which provided that: (SCC p. 345, para 65) ?the new rates of pension are effective from 1st April, 1979 and will be applicable to all service officers who became/become non-effective on or after that date.?
The Court further held: (SCC p. 345, para 65) ?Omitting the unconstitutional part it is declared that all pensioners governed by the 1972 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. Arrears of pension prior to the specified date as per fresh computation is not admissible.?
9. This aspect of the question was examined in the case of Indian Ex-Services League v. Union of India2. The case was argued on behalf of Armed Forces personnel retiring from commissioned ranks as well as Armed Forces personnel retiring from below the commissioned rank who were represented by Shri K.L. Rathee, J.S. Verma, J. (as His Lordship then was) speaking for the Constitution Bench which heard the matter observed that the contention of the writ petitioners on the basis of Nakara1 decision was untenable. On behalf of the petitioners, it had been contended that all retirees who held the same ranks irrespective of their date of retirement must be given the same amount of pension. In effect, what was urged was that there must be ?one rank one pension? for all the retirees irrespective of their date of retirement. This contention of the petitioners was rejected by the Constitution Bench by holding that Nakara1 decision was of limited application. There was no scope for enlarging the ambit of that decision to cover all claims made by the petitioners for identical amount of pension to every retired person from the same rank irrespective of the date of retirement, even though the reckonable emoluments for the purpose of computation of pension were different.
13. It clearly appears from all these cases that Nakara case1 is not a case of universal application irrespective of the facts and circumstances of the case. When the Government decided that pension was to be calculated on the basis of average salary drawn over a period of last ten months, it was held in Nakara1 that this principle has to be applied even to those persons who had retired before the notified date. That, however, does not mean that the emoluments of the persons who were retiring after the notified date and those who have retired before the notified date holding the same status must be treated to be the same. This argument was specifically negatived by the Constitution Bench in the case of All India Services Pensioners? Assn.4 What the petitioner is claiming in this case is more or less the same relief as was denied to him in the above case.?
xiv)1998 (6) SCC 328 (Hari Ram Gupta (Dead) Vs State of UP. ?9. The only other question that survives for our consideration is whether the ratio in Nakara case1 will assist the appellant in getting the relief sought for. In D.S. Nakara v. Union of India1 the question for consideration before this Court was whether on the basis of date of retirement the retirees can be classified into different groups and thereupon make provision granting some benefits to one group denying the others. In the aforesaid case, the provisions for pension were applicable to all retirees and, therefore, pensioners form a class as a whole. But when the Liberalised Pension Scheme was introduced, the said Scheme was made applicable to a group of pensioners and not to all and therefore, it was held by this Court that pensioners form a class as a whole and cannot be micro-classified by an arbitrary, unprincipled and unreasonable eligibility criterion........ When the army personnel claimed the same pension irrespective of their date of retirement, this Court in the Constitution Bench case of the Indian Ex- services League v. Union of India5 considered the grievance of ex-servicemen who had laid the claim on the basis of Nakara1 but ultimately negatived the same and followed Krishena Kumar3. In All India Reserve Bank Retired Officers? Assn. v. Union of India6 when the validity of the introduction of Pension Scheme in lieu of Contributory Provident Fund Scheme was challenged on the ground that bank employees who retired prior to 1-1-1986 have not been given the benefit of the said Scheme, it was held by this Court that there is no arbitrariness in the same.?
xv)AIR 2000 SC 3113 (Union of India Vs Dr.Vijayapurapu Subbahyama). ?8. Applying the aforesaid principles what we find in the present case is that the respondent retired on 13-1-1980 and under the then relevant Rules, an employee who has put in less than twenty years of qualifying service was not eligible to earn pension. At that point of time the respondent had put in only twelve years of qualifying service and, therefore, was not entitled to earn the pension on her retirement. The recommendations of the Fourth Pay Commission were enforced with effect from 1-1-1986 whereby the requirement of qualifying service to earn pension was reduced to ten years from twenty years. By the said recommendations a new class of pensioners was created. But the said recommendations of the Pay Commission were not enforced with effect from 13-11-1980 ? the date when the respondent retired ? but with effect from 1-1-1986. Thus, the recommendations of the Fourth Pay Commission not being with retrospective effect, the respondent was not entitled to receive pension under the said recommendations which came into effect from 1-1-1986.?
Conclusion:
16.The Admitted facts are:
i)All the petitioners worked under respondents 2 to 6 in various capacities.
ii)They either retired on attaining the age of superannuation or voluntary retired under Voluntary Retirement Scheme.
iii)while in service, they received salary as per the provisions of General Insurance (Rationalization and Revision of Pay Scales and other Conditions of Service of Supervisors, Clerical and Subordinate Staff) Scheme, 1974, as amended from time to time.
iv)On retirement, they are receiving pension as per the General Insurance Employees Pension Scheme, 1995
v)Pension is calculated based on 10 months average last drawn salary received by the petitioners linked with Dearness Allowance.
The issues raised by the petitioner:
17.According to the petitioners, the pay scale of employees are revised from time to time. On such revision, the employees in services were paid the revised pay scale. On retirement, their pension is calculated as per revised pay scale. The benefit of revised pay scale is not extended to employees, who retired before the revision of pay scale. This has resulted in anomaly as the petitioners are paid different amounts of pension based on date of retirement. All the petitioners irrespective of the date of retirement form a homogeneous class and there cannot be any different class within the homogeneous class. Different amount cannot be paid based on the date of retirement. Non extension of revised pay scale to already retired employees is against the principles of legitimate expectation in view of increasing cost of living day-by-day. The action of the respondents amounts to violation of Articles 14, 16 and 21 of the Constitution of India.
18.The learned counsel for the petitioners referred to a judgment of Rajasthan High Court in the case of pensioners of Life Insurance Corporation of India, who were denied the revised pay scale. The said High Court quashed the discrimination meted out to some of the employees.
19.The learned counsel further contended that the Central Government while implementing Pay Commission recommendations issues notification, extending the said benefits to the existing pensioners also. As per the residuary provision Clause 55 of the scheme, the first respondent must issue notification extending the revised pay scale to the pensioners of respondents 2 to 6 also as done to Central Government Pensioners.
20.As referred earlier, the learned counsel for the petitioners relied on the judgments referred to starting from D.S.Nakara Vs. Union of India AIR 1983 SC 130.
Contention of the respondents 2 to 6:
21.Per contra, the learned counsel for the respondents 2 to 6 contended that the writ petition itself is not maintainable as the petitioners have not challenged any of the provisions of pension scheme.
Having accepted the pension scheme in totality, it is not open to the petitioners to seek writ of mandamus after lapse of so many years. It is not correct to state that quantum of pension remains stagnant whereas the cost of living increased by leaps and bounds.
22.Learned counsel for the respondents 2 to 6 contended that there is an in-built provision in the Pension Scheme whereby the quantum of pension is increased based on Consumer Price Index (CPI). The petitioners cannot compare themselves with the pensioners of other organization as each pension scheme is different from one another. All the pensioners are paid pension based on 10 months average of last drawn salary. Therefore, there is no discrimination between the petitioners. The judgments of D.S.Nakara and Others Vs. Union of India (1983) 1 SCC 305 and other judgments are not advancing the case of the petitioners. The Apex Court explained the ratio in D.S.Nakara's case in the judgment of Krishna Kumar Vs Union of India [1990 (4) SCC 207].
23.I have carefully perused the materials on record and considered the arguments of the learned counsel for the petitioners and the respective learned counsels appearing for the respondents.
24.Considering the various judgments relied on by the learned counsel for the petitioners and the respondents and their arguments, I am inclined to hold that the contention of the counsel for the respondents 2 to 6 have considerable force and acceptable. As rightly contended by the learned counsel for the respondents 2 to 6, the petitioners have not challenged any of the provisions of Pension Scheme. Their only contention is that when pay scale is revised and the employees who were in service, when it came into force, are paid Pension based on the revised pay scale, they must also be paid the same amount. This contention is untenable and unacceptable. The definition of ?employee? and ?pensioner? created two different category of persons. The pensioners therefore cannot claim benefits granted to the employees who were in service at the time of revision of scale of pay. The Apex Court explained the ratio in D.S.Nakara's case in the judgment of Krishna Kumar Vs Union of India [1990 (4) SCC 207]. In view of the judgment of the Apex Court in Krishna Kumar's case, the reliance of the learned counsel for the petitioners in the judgment of D.S.Nakara's case does not advance their case. On the other hand, the judgment reported in 1997 (7) SCC 334 (Union of India Vs Lieut (Mrs) E.IACATS squarely applies to the facts of the present case.
?4. The next question relates to payment of pension. Under Army Instruction No. 14 which was in force at the material time, the respondent, either on the date of her appointment or on the date of her retirement, or at any time during her service, did not have the benefit of pension on retirement. The terms and conditions of service were known to her at the time when she joined the service. At the time of joining service she had signed an agreement to abide by the rules and regulations governing Military Nursing Service (Local) from time to time. She has claimed that pensionary benefits which were conferred for the first time on all those who retired on or after 1-10-1983 should be given to her although she retired much prior to that date. Although she has not challenged the cut-off date as arbitrary, reliance in this connection is placed by her on the decision in the case of D.S. Nakara v. Union of India1. This decision has been subsequently explained and distinguished in a number of cases. In the case of Sushma Sharma (Dr) v. State of Rajasthan2 (AIR at p. 1379 : SCC p. 66, para 44) this Court cited with approval its earlier observations in Union of India v. Parameswaran Match Works Ltd.3 to the effect that the choice of a date as a basis of classification cannot always be dubbed as arbitrary unless it is capricious or whimsical...........Pensioners under the old rules and pensioners under the new rules are not similarly situated. Each set of retiring employees will be governed by their own rules in force when they retire.?
25.The judgment relied on by the learned counsel for the petitioners in Life Insurance Corporation's case is not applicable to the facts of the present case. In that case, the Board of LIC passed a resolution to extend the benefit to all the pensioners but referred the same to Union of India for approval. In those circumstances, the Courts held that Life Insurance Corporation of India being an autonomous body, there is no need for LIC to get approval from Union of India.
26.Pension Scheme applicable to the pensioners of respondents 2 to 6 is a self-contained scheme. As per the relevant clauses, the petitioners are paid pension. The petitioners and similarly placed pensioners of respondents 2 to 6 have no right to invoke the residuary provision compelling first respondent to issue notification extending the revised pay scale to them for calculating basic pension. Applying the decisions of the Apex Court, I hold that there is no classification within the homogeneous classification of pensioners of respondents 2 to 6. The petitioners are entitled to basic pension based on the average of 10 months last drawn salary.
27.It is well settled that Courts cannot substitute a scheme. Courts can interfere with a policy decision or a scheme whenever necessary. The interference with a scheme must be minimum and cannot be substituted by a new scheme. In the present case, there is no reason to interfere with the pension scheme in question.
28.As the petitioners are paid as per the Pension Scheme, which is not challenged ultra vires, this writ petition fails as devoid of merits.
29.In the result, this writ petition is dismissed. There is no order as to costs. Consequently, connected M.P.(MD).No.1 of 2012 is closed. To
1.THE SECRETARY, GOVERNMENT OF INDIA MINISTRY OF FINANCE, DEPT. OF ECONOMIC AFFAIRS, BANKING AND INSURANCE IIIrd FLOOR, JEEVAN VIKAR, SANSAD MARG, NEW DELHI - 1.
2.NATIONAL INSURANCE COMPANY LIMITED, NO.3 MIDDLETON STREET, KOLKATTA - 700 001 WEST BENGAL.
3.ORIENTAL INSURANCE COMPANY LIMITED, A-25/27, ASAF ALI ROAD, NEW DELHI-2.
4.NEW INDIA ASSURANCE COMPANY LIMITED, NO. 87. MAHATMA GANDHI RAOD FORT, MUMBAI -1, MAHARASHATRA.
5.UNITED INDIA INSURANCE COMPANY LIMITED, WHITES ROAD, ROYAPETTAH, CHENNAI-14.
6.GENERAL INSURANCE CORPORATION LIMITED, NO.1 " SURAKSHA"
NO.170 J.T. ROAD MUMBAI - 400 020 MAHARASHTRA.
7.V.RAVISHANKAR, PRESIDENT, NATIONAL INSURANCE SPECIAL VOLUNTARY RETIRED/RETIRED EMPLOYEES ASSOCIATION 7-A (OLD NO.4-A), SOUTH GANGAI AMMAN KOIL IST STREET, CHOOLAIMEDU, CHENNAI-94.