Gujarat High Court
State Of Gujarat And Ors. vs Narsinhdas Krishnadas Agravat on 22 June, 2005
Author: G.S. Singhvi
Bench: G.S. Singhvi, A.S. Dave
JUDGMENT G.S. Singhvi, J.
1. These appeals are directed against order dated 1-3-2004 by which the learned single Judge allowed the Special Civil Applications filed by the respondents and quashed the cut-off date i.e. 1-1-1997 specified in the Pension Scheme framed by the State Government for teachers of Primary Schools of the private aided and recognized educational institutions and directed the appellants to pay them pension.
2. For deciding the questions arising in the appeals, it will be appropriate to notice the relevant facts.
2.1 Kusumben E. Borasada who had worked as Craft Teacher in Web Memorial Girls High School run by the Education Board of Methodist Church represented to the State Government for grant of pension at par with the teachers employed in the Government schools. Her claim was rejected on the ground that she is not a protected teacher. She challenged the Government's decision in Special Civil Application No. 3636 of 1982 which was allowed by the learned single Judge vide his order dated 18-1-1997. (reported in Kusumben E. Borasada v. Govt. of Gujarat 1997 (3) GLR 2159). The learned single Judge directed the respondents to extend the benefit of pension to the teachers of aided private aided Primary Schools in the State of Gujarat. The operative part of that order reads as under :
14. In the result, this Special Civil Application succeeds. The action of the respondent State of Gujarat in not giving the benefit of pension to the teachers of recognized aided private primary schools is declared to be ultra vires Articles 14 and 16 of the Constitution of India. The respondent State of Gujarat is hereby directed to extend the benefit of pension to the teachers of aided private primary schools in the State of Gujarat. The petitioner's claim shall be worked out within a period of three months from the date of receipt of certified copy of this judgment, and thereafter, the petitioner shall be given the benefit of pension, inclusive of arrears, within next three months. However, it is made clear that in case the petitioner was a member of Provident Fund Scheme, then she has to refund to the State the share of contribution of the employer, if any, together with interest thereon. Rule made absolute accordingly, with no order as to costs.
3. The State of Gujarat challenged the aforementioned order of the learned single Judge by filing an appeal under Clause 15 of the Letters Patent. An application for condonation of delay in filing the appeal was also filed. The Division Bench dismissed the application for condonation of delay. Consequently, the Letters Patent Appeal was dismissed as time-barred. The order of the Division Bench was set aside by the Supreme Court in Civil Appeal No. 4191 of 1999 decided on 2-8-1999 and the case was remanded to this Court for deciding the appeal on merits.
4. In compliance of the direction given by the Supreme Court, the appeal filed by the State of Gujarat was registered as Letters Patent Appeal No. 788 of 1998. The same was dismissed by the Division Bench vide its order dated 30th July, 2001 (reported in State of Gujarat v. Kusumben E. Borasada 2001 (3) GLH 659). The Division Bench upheld the order of the learned single Judge and also directed the State Government to frame an appropriate scheme for giving pensionary benefits to the teachers of the primary schools of private aided institutions. The Division Bench also directed the State Government to work out the modalities with regard to the date of commencement of the Pension Scheme as also the date from which actual payment was to be made to the teachers who had already retired. For the sake of convenient reference, Paragraph Nos. 5, 6 and 7 of the order of the Division Bench are reproduced below :
5. Therefore, while upholding the order as has been passed by the learned single Judge, we direct the State Government to frame an appropriate scheme for the purpose of giving pensionary benefits to the teachers of the primary schools of above nature. Modalities with regard to the date of commencement of the pension scheme as also the date from which the actual payment of pension is to be made in case of teachers who were already retired may be worked out.
6. In this regard, certain aspects have been brought to our notice by the learned Senior Counsel, Mr. H.M. Mehta, and we find that such factors are relevant and quite germane for the purpose of evolving such a scheme for payment of pension to the teachers of Non-Government (Private) but Government recognized and Government Aided Primary Schools, and we accordingly direct that while framing the scheme and determining the date of commencement of the scheme the State Government shall keep in view the following aspects and treat the teachers of such primary schools at par with the teachers of similarly situated Colleges/ Higher Secondary Schools/Secondary Schools for the purpose of pension by issuing appropriate Government Resolution :
(i) That the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (14th March, 1952) was an Act to provide for the initiation of the Provident Funds (Pension Fund) and Deposit Linked Insurance Fund for employees in factories and other establishments;
(ii) That this Act was applied to the employees working in educational establishments or 19th of February, 1982;
(iii) That as has been pointed out by Mr. H. M. Mehta, in case of educational institutions, the Supreme Court while admitting a batch of writ petitions filed by number of education institutions had stayed the operation of the Government of India's Notification S.O. No. 986 dated 19th February, 1982, applying the Act to Educational Institutions and the general stay continued till January, 1988, and while deciding and dismissing these petitions finally in January, 1988, the Supreme Court, in the cases of D.A.V. College and Anr. v. Regional Provident Fund Commissioner and Ors. reported in 1988 (2) SLR 170 decided on 29-1-1988 and Welham Girls High School Society, Dehradun v. Union of India and Ors. reported in 1988 (2) SLR 172 decided on 28-1-1988 ordered as under :
We do not find any substance in the contention of the petitioners in these cases that the Employees Provident Fund And Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act,') has no application to the educational institutions who are petitioners in these cases. We, therefore, dismiss these cases. 2. We direct that the petitioners shall comply with the Act and the schemes framed thereunder regularly with effect from 1-2-1988. Whatever they have to pay under the Act and the schemes in respect of the period between 1-3-1982 and 1-2-1988 shall be paid in each of the petitioners within such time as may be granted by the Regional Provident Fund Commissioner. If the petitioners pay all the arrears payable from 1st March, 1982 up to 1st February, 1988 in accordance with the directions of the Regional Provident Fund Commissioner, he shall not levy any damages for the delay in payment of the arrears. Having regard to the special facts of these cases the subscribers (the employees) shall not be entitled to any interest on the arrears. The writ petitions are disposed of accordingly. No costs.
(iv) In the light of the Supreme Court's judgment as aforesaid, it may be considered that as a consequence of general stay granted by the Supreme Court of the operation of the Government of India's notification S.O. No. 986 dated 19th February, 1982 the educational institutions had not recovered the employees' share of contributions from their wages during the period (March, 1982 to January 1988) when the stay order was in force, and therefore, in such cases insistence of the payment of the employees' share of contributions by the institutions themselves will not be in order. Therefore, it was decided by the Central Board of Trustees in consultation with the Ministry of. Labour, Government of India, that in cases where the educational institutions had not actually recovered the employees' share of contributions from their wages for the period from 1-3-1982 to 31-1-1988, payment of the same need not be insisted upon and the same may be waived except in cases where the employer or the employees volunteer to pay the same in lump-sum or in instalments and in cases where the employees' share of contribution for the abovesaid period has already been deposited by any of the educational institutions and has been credited to the respective accounts of the employees' the question of its refund does not arise and such cases should not be reopened.
(v) The date of judgment of the learned single Judge is 18th January, 1997 :
7. All these factors may be taken into consideration for the purpose of fixing the date of commencement of the scheme with regard to the teachers of the private institutions imparting primary education which are recognized and aided, and in case of retired teachers, the amount of pension be fixed on national basis from the date of the commencement of the scheme. Such scheme shall be framed by the Government within a period of three months from the date of receipt of the certified copy of this order, as may be served by either of the parties or through the Court, and the same shall be appropriately notified, acted upon and given effect to and the due benefits shall be given to the retired teachers also who are found to be entitled for the pension. The appeal is hereby dismissed with no order as to costs with the directions as above.
Thereafter, the State Government framed Pension Scheme for the teachers of the Primary Schools of private aided recognized institutions, and circulated the same vide letter dated 6-4-2002. The scheme was made applicable to the teachers who retired from service on or after 1-1-1997 subject to the condition that they will have to surrender the amount received under the Employees' Provident Fund Scheme, 1982 framed under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
5. The respondents challenged the scheme to the extent it was made applicable only to the teachers retiring on or after 1-1-1997. They pleaded that the cutoff date specified for determination of the eligibility and entitlement of the teachers of the private schools to receive the pension was totally arbitrary and irrational and there was no justification to deny them the benefits flowing from the Pension Scheme. They also pleaded that while fixing the cut-off date for implementation of the scheme, the State Government had ignored the indicias enumerated in the order of the Division Bench, and therefore, the same was liable to be struck down.
6. The learned single Judge allowed the writ petitions and quashed the cutoff date specified in the Pension Scheme. He held that the State Government committed serious illegality by fixing 1-1-1997 as the date of commencement of the Pension Scheme ignoring the various factors enumerated in Paragraph No. 6 of order dated 31-7-2001 passed by Division Bench. He also referred to the Employees' Provident Fund Scheme, 1982 and held that the Pension Scheme should have been implemented with effect from 1-3-1982 because the Provident Fund Scheme was made applicable with effect from 19-2-1982. Paragraph Nos. 7.2, 7.3 and 8 of the order of the learned single Judge, which contained the reasons for his conclusion read as under :
7.2 When the Division Bench has careful enough to refer to in detail certain aspects with regard to benefit that had been made available to the teachers in educational establishments and when the present scheme i.e. The pension scheme is an alternative to the benefit that may be received by the retired teacher, under the E.P.F. Act, it will be necessary to decide whether it was the intention of the Division Bench to make the pension scheme applicable with effect from 1st March, 1982. The demand of the petitioners of these petitions is that its benefit shoud be extended even to the teachers who have retired prior to 1st January, 1997. In ray opinion, since the Division Bench has considered and dealt with the aspect regarding the applicability of the E.P.F. Act to the educational institutions in detail, there is some purpose behind it. It may also be noted here that so far as the petitioners are concerned, their prayer is that though the scheme was made effective from the year 1997, they may be notionally considered covered under the scheme and the actual payment of the pension be made available to them with effect from 1st January, 1997. It therefore, very clearly emerges that when the Division Bench enunciated certain factors in its judgment by referring to the material that was placed before it by the Counsels appearing for the parties and in particular for the petitioner, it wanted to earmark class of aforesaid teachers for benefit under the scheme of pension right from the year 1982 i.e. the year the E.P.F. Act was made applicable to such establishments. While dealing with the aforesaid factors, the Division Bench has also taken into consideration various Notifications that had been issued by the State Government extending the benefit of pension scheme to the teachers of Secondary Schools and Colleges. It is stated by Mr. Ajmera at the Bar that so far as the Notification in respect of secondary teachers is concerned, it is dated 21st December, 1971 and it was made effective from 1st April, 1969. So far as the teachers of the college are concerned, Resolution is dated 15th October, 1984. However, Mr. Ajmera and Mr. Patel were not in a position to state from what date the scheme was made effective. Anyhow, the fact remains that so far as the secondary teachers are concerned, they have been receiving this benefit from 1st April, 1969 and in respect of teachers of the college, the Notification was issued in the month of October, 1984. Both the Division Bench as well as the learned single Judge have in no uncertain terms said that the teachers of the primary schools of the aforesaid category are at par with teachers of Secondary Schools and College. It is, therefore, obvious that when those teachers have been receiving this benefit since long, it was very much desirable that teachers of the primary schools should also be given such benefit from a particular date whereby they may also get the benefit of the scheme from around the same time. That apart when it is an alternative or the benefit under the E.P.F. Act, that benefit should also be offered to the teachers from or around the time the provisions of E.P.F. Act were made applicable to the educational establishments. The Division Bench would not have mentioned details regarding E.P.F. Act without any meaning. The said date is 19th February, 1982. No better date could be than 1st March, 1982 to be determined as the effective date. In that view of the matter, there is no doubt in my mind that the Division Bench intended to give the benefit of the scheme that may be framed by the State of Gujarat with effect from the year 1982. Of course, it had also taken care to see that no unnecessary financial burden is thrown on the State Government. It had also said that for the purpose of determining the benefit under the scheme their pension amount be notionally fixed from the date of the commencement of the scheme. The petitioners herein have also made the same request since their prayer is that prior to the cut-off date i.e. 1st June, 1997 their pension be fixed on notional basis and the actual payment may be made from the date of the commencement of the scheme. In the present scheme, there is no such bifurcation of period as indicated by the Division Bench. For that also, it could be said to be not in consonance with the direction contained in the judgment of the Division Bench.
7.3 Further, indication could be had for determining date of commencement and the date of the actual benefit to be made, from two different dates that have been mentioned in Clause (ii) and Clause (v). As stated above in Clause (ii), 19th February, 1982 has been mentioned as date of the application of the E.P.F. Act to the employees working in the educational establishments and in Clause (v) the date of the judgment of the learned single Judge is given as 18th February, 1997. These two dates are to be adjusted. That indication has been given in Clause (iii) by reproducing Para 2 of the judgment of the Apex Court dated 29th January, 1988 and also reproduction of certain direction of the Apex Court contained in Clause (iv) of Paragraph 6 of the Division Bench's judgment. A conjoint reading of this Clause, would therefore, in my mind, definitely suggest that what the Division Bench intended was that the scheme be made effective from the month of February, 1982 or around that time but actual payment to be made from January, 1997. That has not been done by the State of Gujarat, and therefore, in my opinion, the grievance of the petitioners is justified.
8. The sum and substance of the aforesaid discussion is that while determining the date of commencement of the scheme the Government has completely ignored the guidelines provided by it. When the Division Bench of this Court has given mandate to the Government that it shall frame the scheme and that too in accordance with the factors suggested by the Division Bench, it was the duty of the Government to frame the scheme accordingly. Mandate had become final since no S.L.P. was preferred by the Government against the said judgment before the Apex Court. The Government has ignored the mandate while determining the date of commencement of the scheme, and thereby, failed to perform its duty. This Court, therefore, can interfere with the scheme to the extent it determines the date of commencement as 1st January, 1997 and to that extent it is required to be quashed and it is hereby ordered to be quashed.
7. Mrs. Manisha L. Shah, learned Assistant Government Pleader argued that the order of the learned single Judge is liable to be set aside because the reasons given by him for declaring the cut-off date fixed for implementation of the scheme as arbitrary are wholly irrelevant. She further argued that the cut-off date i.e. 1-1-1997 fixed by the State Government for implementation of the Pension Scheme does not suffer from any constitutional or other infirmity because that was done keeping in view the fact that the writ petitioner, filed by Kusumben E. Borasada for quashing the Government's decision not to give her the benefit of Pension Scheme applicable to the teachers of the Government Schools was allowed by the learned single Judge on 18-1-1997. Mrs. Shah then submitted that while confirming the order passed by the learned single Judge in Kusumben E. Borasada's case (reported in 1997 (3) GLR 2159) the Division Bench gave direction for framing of the scheme with liberty to the State Government to work out the modalities for its implementation keeping in view the factors enumerated in Paragraph No. 6, and therefore, the State Government was well within its right to fix the cut-off date. In support of her argument, Mrs. Shah relied upon the judgments of the Supreme Court in Ravindranath Mukhopadhyay v. Coal India Limited , State of Punjab v. Justice S. S. Dewan and State of Haryana v. Raichand .
S/Shri Kirti J. Macwan, J.D. Ajmera and Ashok Patel, Counsels for the respondents supported the order under challenge and argued that the learned single Judge did not commit any error by striking down the cut-off date which was totally arbitrary and irrational. Shri Macwan emphasized that the Pension Scheme for the teachers and lecturers of the Government Schools had been made applicable with effect from the years 1969 and 1984, but similar scheme was not- framed for the teachers of the Primary Schools of the private aided institutions resulting in violation of their fundamental right to equality and when the learned single Judge made a declaration to this effect, the State Government was duty bound to grant pension to the teachers of the Primary Schools of the private aided institutions with effect from the date similar benefit was extended to the teachers employed in the Government Schools. Shri Macwan submitted that the Employees' Provident Fund Scheme was made applicable to the teacher of the private schools in 1982, and therefore, the learned single Judge rightly directed the grant of pensionary benefits to the respondents and other similarly situated persons from the (date of implementation of that scheme. He further submitted that stay granted by the Supreme Court on the implementation of the Pension Scheme, which remained operative till 1988 cannot be made basis for denying the benefit of Pension Scheme to the teachers of the private aided institutions.
8. We have given our most anxious consideration to the entire matter. The question whether the cut-off date specified in a legislative instrument or the administrative policy decision taken by the State and/or its instrumentality is violative of the doctrine of equality has become subject-matter of large number of cases and it will be profitable to notice some of the judgments of the Supreme Court.
8.1 In D.R. Nim v. Union of India , the Constitution Bench of the Supreme Court considered whether the cut-off date i.e. 19-5-1951 fixed by the Government of India for determination of the year of allotment under the Indian Police Service (Regulation of Seniority) Rules, 1954 was arbitrary and violative of Article 14. The appellant who joined Uttar Pradesh Police Service in 1938 was promoted as Officiating Superintendent of Police with effect from June 25, 1947. He was regularly promoted to the Indian Police Service Cadre of Uttar Pradesh with effect from 22-10-1955. He was allotted 1956 for the purpose of fixation of seniority under the 1954 Rules. This was done on the basis of order dated 25-8-1955 issued by the Government of India which had fixed 19-5-1951 as the cut-off date for determination of the year of allotment. After making a a reference to the affidavit filed on behalf of the Government of India, the Supreme Court held that the cut-off date was artificial and arbitrary, inasmuch as it had nothing to do with the application of the first and the second proviso to Rule 3(3) of the Rules. The Supreme Court observed that the Central Government cannot pick out a date from the hat for the purpose of fixing the seniority of the promotee officers and directed that the entire service of the appellant including the officiating service should be reckoned for the purpose of fixing the year of allotment.
8.2 In Union of India v. Parameswaran Match Works , the Supreme Court negatived the challenge to Clause (b) of Notification dated 4-6-1967 issued by the Government under Rule 8(1) of the Central Excise Rules, 1944 by which only those manufacturers of match boxes were held entitle to the benefit of concessional rate of duty who filed declaration before 4-9-1967. The respondent successfully challenged the choice of the date before the Madras High Court. While reversing the judgment o f the High Court, Their Lordships of the Supreme Court observed as under :
That a classification can be founded on a particular date and yet be reasonable, has been held by this Court in several decisions (See Hathisingh Mfg. Co. Ltd. v. Union of India , Dr. Mohmmad Saheb Mahbood Medico v. Deputy Custodian General , M/s. Bhikusa Yamasa Kshatriya (P) Ltd. v. Union of India ) and Daruka & Co. v. Union of India . The choice of a date as a basis for classification cannot always be dubbed as arbitrary even if no particular reason is forthcoming for the choice unless it is shown to be capricious or whimsical in the circumstances. When it is seen that a line or a point there must be and there is no mathematical or logical way of fixing it precisely, the decision of the legislature or its delegate must be accepted unless we can say that it is very wide of any reasonable mark. See Louisville Gas & E. Co. v. Coleman (1927) 277 US 32 per Justice Holmes.
8.3 In Dr. (Mrs.) Sushma Sharma v. State of Rajasthan , the Supreme Court held that the choice of date fixed for determination of the eligibility of the temporary lecturers for absorption under Rajasthan Universities Teachers and Officers (Special Conditions of Service) Act, 1974 was not arbitrary. It was argued on behalf of the appellant that 25th June, 1975, i.e. the date on which emergency was declared in the country had nothing to do with the object of the legislation, viz., to regularize the services of the temporary lecturers and that the choice of the date was wholly arbitrary, irrational and violative of Article 14 of the Constitution. Their Lordships of the Supreme Court referred to the earlier precedents In Re : The Special Courts Bill, 1978, , Prag Ice and Oil Mills v. Union of India , D. S. Nakara v. Union of India , Union of India v. Parameswaran Match Works (supra) and held as under :
The, choice of 25th June, 1975 as the date prior to which temporary teachers must have been in employment to be eligible for screening cannot be said to be an arbitrary choice. The choice of the said date was not with an intention to differentiate between pre and post emergency appointees.
The primary object of the Ordinance as well as of the Act was to provide for the absorption and regularization of temporary lecturers of long standing in the universities in Rajasthan. What was intended was that the temporary teachers of long standing should be screened and 25th June, 1975 was taken because it was as convenient a date as any other. While interpreting the provisions of any Act, what is necessary is the intention of the legislature and that has to be found out from the language used, it is not the view of the Vice-Chancellor or of an officer or authority who might or might not have put a note to the Bill.
The intention was that those who had continued from a date prior to 1975 upto June, 1978 should get the benefit. Such benefit had to be fixed giving a particular period and from the mere fact that 25th June, 1975 was fixed which also happens to be the date on which emergency was clamped on the country, it cannot be said that emergency was the nexus. A certain tenure of service for the purpose of absorption was the object to be achieved and this has a rational nexus with the object. The prescription of the date from which the period should begin and the date on which it should end were mere incidental to the purpose. Any date perhaps could have served the purpose which took into consideration long tenure. What was intended by the use of the expression 'appointed on or before 25-6-1975 and must have continued until 12-6-1978 being the date of coming into force of the Ordinance indicated that there should have been near about three years experience for being eligible for absorption. The date was a handy date. Handy in the sense, it came quickly in the minds of some people. At least there is no evidence that there was an attempt to separate or penalize pre-emergency appointees and no decision was taken by any appropriate authority and no such evidence is there to make a distinction between pre-emergency and post-emergency appointees.
8.4 In D.S. Nakara's case (supra), the Supreme Court struck down the classification made between pensioners for the purpose of grant of benefit of liberalization only on the basis of the particular date i.e. 3rd March, 1979.
The judgment in Nakara's case (D.S. Nakara v. Union of India was considered by another Constitution Bench in Krishena Kumar v. Union of India . The facts of that case were that the petitioners, who were retired Railway employees challenged the cut-off date i.e. 1-4-1957 specified in the Pension Scheme introduced in place of Provident Fund Scheme. While repelling the challenge, the Supreme Court distinguished the ratio of Nakara's case (supra) by making following observations :
In Nakara, the Court treated the pension retirees only as a homogeneous class. 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. On the other hand the court clearly observed that it was not dealing with the problem of a "fund". The Railway Contributory Provident Fund is by definition a fund. Besides, 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 P.F. retirees. This being the legal position the rights of each individual P.F. retiree finally crystallized on his retirement whereafter no continuing obligation remained, while on the other hand, as regard Pension retirees, the obligation continued till their death. The continuing obligation of the State in respect of pension retirees is adversely affected by fall in rupee value and rising prices which, considering the corpus already received by the P.F. retirees they would not be so adversely affected ipso facto. It cannot, therefore, be said that it was the ratio decidendi in Nakara that the State's obligation must be the same as that towards the pension 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. Nakara cannot, therefore, be an authority for this case.
8.5 In State of West Bengal and Ors. v. Ratan 'Behari Dey and Ors. , the Supreme Court referred to the, judgments in Shushma Sharma's case (supra), D.S. Nakara's case (supra) and Krishena Kumar's case (supra) and upheld the cut-off date i.e. 1-4-1977 specified in the Corporation of Calcutta Employees (Death-cum-retirement) Benefit Regulations, 1982. Some of the observations made in that judgment are extracted below :
The State Government had acted reasonably in specifying the cut-off date April 1, 1977. That might have been the year in which the Left Front came into power in that State, but that does not detract from the validity of the reasons for fixing the date. It cannot be said that the reasons assigned by the State Government are neither relevant nor acceptable. Nakara was a case where an artificial date was specified classifying, the retirees, governed by the same Rules, and similarly situated, into two different classes, depriving one such class of the benefit of liberalized Pension Rules. Whereas in this case, the employees retiring prior to April 1, 1997 and those retiring thereafter were governed by different sets of rules.
It is open to the State or to the Corporation; as the case may be, to change the conditions of service unilaterally. Terminal benefits as well as pensionary benefits constitute conditions of service. The employer has the undoubted power to revise the salaries and/or the pay scales as also terminal benefits/pensionary benefits. The power to specify a date from which the revision or pay-scales or terminal benefits/pensionary benefits, as the case may be, shall take effect is a concomitant of the said power. The State can specify a date with effect from which the Regulations framed, or amended, as the case may be, shall come into force. It was within the power of the Corporation to enforce the Regulations either prospectively or with retrospective effect from such date as they might specify. Only condition is that in such cases the State cannot pick a date out of its hat. It has to prescribe the date in a reasonable manner, having regard to all the relevant facts and circumstances. So long as such date is specified in a reasonable manner, i.e., without bringing about a discrimination between similarly situated persons, no interference is called for by the Court in that behalf on ground of discrimination.
8.6 In All India Reserve Bank Retired Officers Association v. Union of India , the Supreme Court distinguished Nakara's case (supra) and applied the ratio of Krishena Kumar's case (supra) for rejecting the petitioner's plea that denial of the benefit of Pension "Scheme framed by the Reserve Bank in lieu of Contributory Provident Fund Scheme to those who had retired prior to 1-1-1996 was violative of Article 14. Their Lordships drew distinction between cases in which existing Pension Scheme is liberalized and in which new Pension Scheme is introduced and held :
When the State decides to revise and liberalize an existing pension scheme with a view to augmenting the social security cover granted to pensioners, it cannot ordinarily granted the benefit to a section of the pensioners and deny the same to others by drawing an artificial cut-off line which cannot be justified on rational grounds and is wholly unconnected with the object intended to be achieved. But when an employer introduces an entirely new scheme which has no connection with the existing scheme, different considerations enter the decision making process. One such consideration may be the extent of capacity of the employer to bear the burden. Keeping in view its capacity to absorb the financial burden that the scheme would throw, the employer would have to decide upon the extent of applicability of the scheme.
It appears on a conjoint reading of Regulation 3(3) and Regulation 31 that Bank employees who retied from service between 1st January, 1986 and 1st November, 1990 could opt for the benefit of the pension scheme with effect from 1st November, 1990 provided they refunded the Bank's contribution to the provident fund together with interest received calculated at 6 percent per annum from the date of withdrawal till the date of repayment. Bank employees who retired from service before 1st January, 1986 were not eligible to opt for the newly introduced Pension Scheme.
The cut-off date i.e. 1-1-1986 is not arbitrary fixed by the Bank authorities or the Central Government while giving its approval and it is not devoid of rational consideration not is wholly whimsical. In fixing the cut-off date the authorities had not acted mala fide with a view to deprive those who had retired on or before 31st December, 1985 of the benefit of the pension scheme but it was not practicable to extend the benefit to such retirees. The rationale for fixing the cut-off date as 1st January, 1986 was the same as the case of Central Government employees based on the recommendation of the Fourth Central Pay Commission. The fact that service records of persons retired prior to cut-off date were not available also justified the reason for not extending the benefit to those who had retired before five years or more.
8.7 In Union of India v. P.N. Menon , the Supreme Court reversed the judgment of the Madras High Court and upheld the cutoff date specified in the Memorandum dated 25-5-1979 for grant of higher pensionary benefits to the employees who had retired between 30th September, 1977 and 30th April, 1979. The Supreme Court referred to the judgments in Nakara's case, Krishena Kumar's case, All India Reserve Bank Officer's Association's case and observed :
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. 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.
No scheme can be held to be foolproof, so as to cover and keep in view all persons who were at one time in active service. As such the concern of the Court should only be, while examining any such grievance, to see, as to whether a particular date for extending a particular benefit or scheme, has been fixed, on objective and rational considerations.
The decision to merge a part of the dearness allowance with pay, when the price index level was at 271, appears to have been taken on basis of the recommendation of the Third Pay Commission. In this background, it cannot be said that the date, 30-9-1977, was picked out in an arbitrary or irrational manner, without proper application of mind. The option given to employees, who retired on or after 30-9-1977, but not later than 30-4-1979, to exercise an option to get their pension and death-cum-retirement gratuity calculated by excluding the element of dearness pay as indicated in the aforesaid office memorandum or to get it included in their pension and death-cum-retirement gratuity, was not an exercise to create a class within a class. The decision having in nexus with the price index level at 272, which it reached on 30-9-1977, was just and valid. It has been rightly pointed out that respondents had never been in receipt of dearness pay and as such the office memorandum in question could not have been applied to them. Similarly, the encashment of leave was a new scheme introduced which could not have been extended retrospectively to respondents, who had retired before the introduction of the said scheme. Same can be said even in respect of family pension scheme which was earlier contributory, but with effect from 22-9-1977 the scheme was made non-contributor. The respondents not being in service on the said date, were not eligible for the same benefit and no question of refunding the amount, which had already been contributed by them, did arise.
8.8 In Union of India v. Lieut (Mrs.) E. Iacats , the Supreme Court reiterated the principle that where liberal Pension Scheme was introduced after considering report of Study Group and the scheme was made applicable to those who retired after 1-10-1983, those who retired earlier cannot plead discrimination and complain of the violation of Article 14.
8.9 In State of Punjab v. Justice S.S. Dewan (supra), the cut-off date specified in the Punjab Superior Judicial Service Rules, 1963 for grant of benefit of 10 years practice at the Bar as a part of qualifying service was upheld in the following words :
Conceptually, pension is a reward for past service. It is determined on the basis of length of service and last pay drawn. Length of service is determinative of eligibility and the quantum of pension. The formula adopted for determining last average emoluments drawn has an impact on the quantum of pension. D. S. Nakara case involved the change of formula for determining average emoluments and it was treated as liberalization or upward revision of the existing pension scheme. On parity or reasoning it can be said that any modification with respect to the other determinative factor, namely, qualifying service made with a view to make it more beneficial in terms of quantum of pension scheme. If, however, the change is not confined to the period of service but extends or relates to a period anterior to the joining of service, then it would assume a different character. Then, it is not liberalization of the existing scheme but introduction of a new retiral benefit. Here; what has been done by amending Rule 16 is to make the period of practice at the Bar, which was otherwise irrelevant for determining the qualifying service, also relevant for that purpose. The purpose seems to make the service more attractive for those who are already in service so that they may not leave it and for new entrants so that they may be tempted to join it. Though, Rule 16 does not specifically state that the amended rule will apply only to those who retired after 22-2-1990, the intention behind it clearly appears to be to extend the new benefit only to those who retired after that date. For these reasons, the principle laid down in D.S. Nakara case that if pensioners from a class, computation of their pension cannot be by different formula affording unequal treatment merely on the ground that some retired earlier and some retired later, will have no application to a case of this type. Benefit of the amendment would be available to only those direct recruits who retired after it came into force.
8.10 In V. Kasturi v. Managing Director, State Bank of India , the Division Bench of the Supreme Court, after reviewing the case-law on the subject reiterated the principle that the benefit of a new Pension Scheme can be confined by specifying a cut-off date and the principles governing the applicability of a liberalized pension scheme cannot be invoked for striking down such cut-off date.
8.11 In Hari Chand v. Faridabad Complex Administration 2005 (4) SCC 593, the Supreme Court upheld the decision of the Punjab & Haryana High Court which had rejected the appellant's challenge to the applicability of Pension Scheme introduced in 1992 only to those who retired after April, 1992.
9. The principles which can be deduced from the above-noted judicial precedent are that if an existing Pension Scheme is revised or liberalized, then the benefit of revision/liberalization has to be given to the existing pensioners and they cannot be divided into two or more groups with reference to a particular date except when there are cogent and rational reasons for making classification or dividing the pensioners into two groups. However, if the employer introduces a new scheme for the first time, it is well within its domain to specify any particular date for implementation of scheme and those who may have retired prior to that date cannot complain of discrimination or invoke doctrine of equality enshrined under Articles 14 and 16 for issuance of a direction to the employer to extend the benefit of Pension Scheme to the pre cut-off date retirees. Similarly, if an existing Provident Fund Scheme is replaced by Pension Scheme, the employer has the discretion to fix the cut-off date for enforcing the pension scheme and the Provident Fund holders who may have retired prior to that date cannot contend that the Pension Scheme is violative of their fundamental right to equality. The burden to prove that the date fixed for implementation of the new Pension Scheme is arbitrary is always on the petitioner and unless a very strong case is made out, the Court will not interfere with the employer's choice of the date. Ordinarily, the Court will presume that the date fixed for implementation of the Pension Scheme is rational and does not suffer from the vice of discrimination. However, such presumption is rebuttable and the Court may nullify the discretion exercised by the employer if it is proved by the petitioner that the choice of the date is wholly arbitrary or irrational or is wide of the mark.
10. Reverting to the case in hand, we find that the respondents were governed by the Employees' Provident Fund Scheme which was introduced in 1982 for educational establishments. Initially, the Supreme Court stayed the implementation of that scheme, but the writ petitions filed by the management of the schools were ultimately dismissed and they were directed to contribute their share with retrospective effect. The Pension Scheme was framed for the first time pursuant to the direction given by the Division Bench on 31-7-2001. The same was circulated vide letter dated 6-4-2002 and made applicable to the teachers who retired from service on or after 1-1-1997. This was done keeping in view the fact that the writ petition filed by Kusumben E. Borasada claiming pension was decided by the learned single Judge on 18-1-1997. This was one of the factors enumerated in Paragraph No. 6 of the judgment of the Division Bench. Therefore, it is not possible to agree with the learned single Judge that the denial of pension to part 1-1-1997 retirees is arbitrary and violative of Articles 14 and 16 of the Constitution.
11. In our opinion, the State could legitimately fixed 31-7-2001 as the cutoff date for applicability of the Pension Scheme to the teachers of the primary schools of the private aided institutions because that is the date on which the Division Bench given direction for framing the Pension Scheme. However, keeping in view the factors enumerated in Paragraph No. 6 of the judgment of the Division Bench including the fact that the learned single Judge had decided the writ petition on 18th January, 1997, the State Government made the Pension Scheme applicable to those retiring on or after 1-1-1997. Thus, the choice of the cut-off date specified in the Pension Scheme cannot be termed as irrational or wide of the mark. Rather, it is based on a rational consideration, namely, that the High Court had recognized the entitlement of the teachers of private aided institutions to get pension only on 18-1-1997.
12. It is true that while directing the State Government to frame the Pension Scheme, the Division Bench had enumerated various other factors which were to be kept in view for determining the date of its implementation, but it cannot be said that the choice of 1-1-1997 made by the State Government is wholly arbitrary or violative of the right to equality guaranteed to the respondents under the Constitution.
13. The reasons assigned by the learned single Judge for directing the implementation of the Pension Scheme with effect from 1-3-1982 are not at all germane to the considerations which could weigh with the public employer in selecting a particular date for implementation of the scheme. It appears to us that attention of the learned single Judge was not drawn to the distinctions highlighted in the judgments of the Supreme Court between the Provident Fund Scheme and the Pension Scheme and between the cases in which the existing Pension Scheme is liberalized and the cases in which the Pension Scheme is for the first time introduced in place of the Provident Fund Scheme. No doubt, the Division Bench had specified the factum of introduction of the Employees' Provident Fund Scheme as one of the factors which could he considered by the Government for the purpose of determining the date of implementation of the Pension Scheme, but there is nothing in the judgment dated 31-7-2001 from which it can be inferred that the Court had ordained the State Government to introduce the Pension Scheme with effect from 1-3-1982 or any other particular date. Rather, the Court had unequivocally left to the discretion of the State to choose the date of the commencement of the scheme by taking into consideration various factors and the later had chosen 1-1-1997, keeping in view the fact that the High Court had recognized the entitlement of the teachers of the private schools to get pension only on 18-1-1997. Thus, we do not find any constitutional infirmity in the decision of the State Government to make Pension Scheme applicable with effect from 1-1-1997 and the consequential exclusion of the teachers who had retired or before 31-12-1996,
14. In the result, the appeals are allowed. The order of the learned single Judge is set aside. Consequently, the writ petitions filed by the respondents shall stand dismissed. However, it is made clear that if any of the respondents has received monitory benefit during the pendency of the appeals, then no recovery shall be made from him/her on the strength of this order. The parties are left to bear their own costs.