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6. The Government of India, Ministry of Personnel, Public Grievances and Pension (Department of Pension and Pension Welfare) later on vide O.M. bearing No. 4/18/87-P & PW (D) dated 7.2.1990 issued clarification in the following terms:-

(i) that where the employees had opted to retain pensionary benefits under the Central Government Rules, the emoluments drawn under the PSU shall be treated as emoluments for the purpose of Rule 33 of the Central Civil Services (Pension) Rules, 1972 and accordingly any emoluments drawn by the transferred employee will be taken into account for the purpose of calculation of average emoluments as per clarification given in Note 10 below Rule 33 of the Central Civil Services (Pension) Rules, 1972.

(ii) That such employees, who have specifically opted for Central Government Pensionary benefits, will be entitled to the benefit of payment of pension on the emoluments drawn at the time of retirement from the PSU. It is not obligatory on the part of the transferred employees who opted for pensionary benefits as admissible under Central Government Rules to retain Government pay scales, since both issues are not related.

7. A fresh Staff Notice, bearing Ref. No. HQ-A/01-01/90 PE1 dated 21.2.1990, was issued by VSNL by which the employees were called upon to exercise their option as to whether they wanted to retain the pensionary benefits available to them under the Government Rules or be governed by the Rules of the PSU/Autonomous Body. The clarificatory information was annexed to the said Notice which inter alia provided that the option to retain pensionary benefits under the Central Government Rules will mean that the employees will receive pensionary benefits (Pension & Gratuity) on the basis of emoluments/average emoluments drawn by the employee at the time of retirement from VSNL and in accordance with the Rules of the Central Government.

22. Fresh Staff Notice bearing No. HQ-A/01-01/90-PE1 dated 21.2.1990 came to be issued by VSNL to all the permanent employees in Government Service whose services had been transferred to VSNL from the OCS and who had opted for absorption in VSNL calling upon them to exercise their option in terms of sub-para (a) of Department of Pension and Pensioners' Welfare O.M. No. 4/18/87-P & PW dated 05.07.1989 which was placed on record of the High Court as Annexure P4 along with a clarificatory information which inter alia provided that the option to retain pensionary benefits under the Central Government Rules will mean that the employees will receive pensionary benefits (pension and gratuity) on the basis of emoluments/average emoluments drawn by the employees at the time of retirement from VSNL and in accordance with the Rules of the Central Government. In short, it was clarified that when the employees of VSNL will retire from the Nigam, he shall retire with pensionary benefits as if he had retired from Central Government service. Along with the clarificatory information three formats in the form of model (1), model [2] and model [3] were annexed requesting VSNL employees either to retain pensionary benefits under the Government Rules or retiral benefits of the Company by exercising their options as enumerated in either of the model form. It appears from the record that vide order dated 24.11.1996, the Government of India conveyed its approval to the revision of pay structure of Executives Employees and Non-Executives Employees of VSNL to the IDA pattern who were recruited on or after January 1, 1989. This order also provided that DA admissible to Executives and Non-Executives will be at the rates specified by the Department of Public Enterprises in their O.M. dated 22.1.1991 as amended from time to time. The letter in the 'Fitment Method' would show that the basic pay plus Central D.A. has been merged in the basic pay fixed in the appropriate stage of the IDA pattern scale of pay. It was specifically clarified in the said letter that the total emoluments drawn by VSNL employees in the Central Government scale of pay and DA pattern as on 2.1.1990 would stand protected and their pay would be fixed as clarified in the said order. Further, it was also specifically provided that after 2.1.1990 the employees of VSNL would draw increments and DA as per IDA pattern. Based on this direction from the Government of India, Department of Telecommunications, the pay scale of Non-Executives of VSNL was changed over to IDA pay scale in May, 1993 with retrospective effect from 2.1.1990 and for Executives in December, 1993 with retrospective effect from 2.1.1990. The respondents- retirees who were petitioners before the High Court have also relied upon the said letter dated 24.12.1992 in paragraph 28 of the writ petition. Again, VSNL issued office order bearing No. HA-A/01-04/91-PE1 dated 03.09.1993 in reply to clarification sought for by its Centres/Units as to whether pay drawn under IDA pattern could be treated as emoluments for the purpose of calculation of pension and other terminal benefits on or after 2.1.1990 in respect of employees who opted to retain pensionary benefits available to them in terms of Government of India Rules and also for change over to the IDA pattern of pay scale. In accordance with O.M. dated 5.7.1989 issued by Ministry of Personnel, Public Grievances and Pension, (Department of Pension and Pensioners' Welfare) being AnnexureP4, it was clarified that in respect of those employees who had changed over to IDA pattern of pay scale with effect from 2.1.1990 emoluments for purposes of calculation of pension and other terminal benefits shall be the emoluments drawn by them in the IDA scales at the time of their retirement/resignation/death, etc. from the Company. The said order also prescribed that the pension and other terminal benefits in the above case shall be calculated in accordance with the Rules of Central Government in that behalf. It further stated that "Admissible Dearness Relief" (ADR) shall also be allowed thereupon so arrived at as per the existing Central Government Rules. The respondents-retirees pleaded in the High Court the clarificatory order as existing facility and accrued right and the mode of computation of pensionary benefits to the OCS employees who were absorbed in VSNL. The letter dated 3.9.1993 (Annexure- P10) was a simple internal clarificatory circular exchanged between VSNL and its Centres/Units and in no circumstances the terms and conditions contained in the said letter could have been treated as a mode of computation of pensionary benefits of VSNL employees. When the clarificatory order stated: "Admissible Dearness Relief" shall also be allowed on the pension so arrived at as per existing Central Government Rules", the words 'so arrived at' have to be read and construed to be on the basis of the emoluments drawn in the IDA pay scales and nothing more or nothing less. It appears that due to some uncertainty on the part of VSNL for some period pension was paid on emoluments arrived at as per the IDA pay scales and DR accrued on IDA pay scale was wrongly given as per the CDA scales. This method and calculation was totally contrary to and inconsistent with the Government Circular dated 24.12.1992 which was referred to and relied upon by the respondents-retirees themselves in paragraph 28 of the writ petition and, therefore, the payment of pension made under bona fide mistake would, under no circumstances, be viewed and treated as vested right of VSNL employees who were drawing pay in IDA scales.

25. In view of the above, we are of the opinion that the benefit of DR of CDA scales, which has been given to the respondents-retirees by mistake at the time of their retirement, is not to be given again as clarified by the Government of India from time to time in their various Office Memoranda referred to above and the respondents -retirees are entitled to pension to be calculated on emoluments in the IDA pay scales. The ratio of the decision cited at Bar in the case of Chairman, Railway Board and Others v. C.R. Rangadhamaiah and Others [(1997) 6 SCC 623] is of no assistance to the respondents-retirees in the facts and circumstances of the present case. In that case, the respondents were railway employees belonging to the category of running staff (retired from service after 1.9.1973 and before 5.12.1998) and their pensionary benefits were to be calculated on the basis of "average emoluments" as defined in Rule 2544 of the Indian Railway Establishment Code. The 'Running Allowance' up to maximum of 75% taken as part average emoluments for determination of their pension and gratuity. When the pay scales of railway employees were revised w.e.f.1.1.1973 under the Railway Services (Revised Pay) Rules, 1973, the Railway Board by its letter dated 21.1.1974 intimated that existing percentage of running allowance would continue for the time being, though it was under revision. In a subsequent letter dated 22.3.1976, the percentage was reduced to 45% retrospectively w.e.f. 1.4.1976 which order was quashed by the Central Administrative Tribunal in some other case. The Railway Board did not challenge the validity of the said order of the Tribunal, but it issued two statutory notifications dated 5.12.1988, in which the percentage was reduced to 45% retrospectively w.e.f. 1.1.1973 and to 55% retrospectively w.e.f. 1.4.1979. The argument on behalf of the Railway Board before this Court was that the total amount of pension already being paid to the respondents did not get reduced on account of the impugned notifications. The argument was based on the premise that the respondents had not yet been paid pension by taking into account maximum limit of 75% of 'Running Allowance' on revised pay scale applicable from 1.1.1973. Rejecting this argument, this Court held that pension was payable to the respondents after their retirement. They were no longer in service on the date when the impugned notifications were issued. The amendments in the Rules were not restricted in their application in futuro but apply to employees who had already retired and were no longer in service on the date the impugned notifications were issued. It was observed that pension was determined on the basis of emoluments payable at the time of retirement (Rule 2301). It was held that the impugned amendments took away the right of the employees to have their pension computed on the basis of their average emoluments in accordance with the provisions applicable at the time of their retirement. The amount of pension payable to the respondents in accordance with the rules which were in force at the time of their retirement had been reduced. In such circumstances, this Court held that retrospective amendment of statutory rule, adversely affecting pension of employees who already stood retired on the date of the notification was invalid. A retrospective reduction of the pension was held not permissible under law.