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“7. In our opinion, the principle of Nakara, (1983) 1 SCC 305, has no application to the facts of this case. The precise principle enunciated in Nakara (supra) has been duly explained in Krishena Kumar, (1990) 4 SCC 207, by a coordinate Bench. For reasons to be assigned hereinafter, it cannot be said that prescribing April 1, 1977 as the date from which the new Regulations were to come into force is either arbitrary or discriminatory. Now, 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 of pay scales or terminal benefits/pensionary benefits, as the case may be, shall take effect is a concomitant of the said power. 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. It appears that in the Calcutta Corporation, a pension scheme was in force prior to 1914. Later, that scheme appears to have been given up and the Provident Fund Scheme introduced under the Provident Fund Scheme, a certain amount was deducted from the salary of the employees every month and credited to the Fund. An equal amount was contributed by the employer which too was credited to the Fund. The total amount to the credit of the employee in the Fund was paid to him on the date of his retirement. The employees, however, were demanding the introduction of a pension scheme. The demand fell on receptive years in the year 1977… maybe because in that-year the Left Front Government came to power in that State, as suggested by the writ petitioners. The State Government appointed a Commission to examine the said demand and to recommend the necessary measures in that behalf. The three members constituting the Commission differed with each other in certain particulars. The Government examined their recommendations and accepted them with certain modifications in the year 1981. After processing the matter through relevant departments, the Regulations were issued and published in the year 1982. In the above circumstances, the State Government thought that it would be appropriate to give effect to the said Regulations on and from April 1, 1977 i.e., the first day of the financial year in which the Pay Commission was appointed by the Government — a fact which could not have been unknown to the Corporation employees. We cannot say that the Government acted unreasonably in specifying the said date. It may also be said that, that was the year in which the Left Front came into power in that State, but does not detract from the validity of the aforesaid reasons assigned by the State in its counter-affidavit filed before the Division Bench of the High Court. We are not in agreement with the opinion expressed by the High Court that the reasons assigned by the State Government are neither relevant nor acceptable. 
1987.”
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9.  However, para 27-A was inserted thereto in respect of revision of pensionary benefits, which is to the following effect:
“27-A. Revision of pensionary benefits.—(i) UGC scales as revised from 1-1- 1996 have been linked to the index level of 1510 points inasmuch as the revised pay scale structure includes the DA admissible as on 1-1-1996 to the extent of 138% of basic pay. As on 1-1-1996 the pensionary benefits under the State Government had not been revised. The revised pay scales of the State Government employees came into force from 1-4-1998 by merging the DA as on 1-1-1996. The pensionary benefits were also simultaneously revised w.e.f. 1-4-1998. Therefore, the revised pay drawn in the UGC pay scales for the period from 1-1-1996 up to 31-3-1998 shall not be taken as emoluments for the purpose of pensionary benefits. Accordingly,—

(b) In respect of teachers drawing UGC pay scales and who have issued on or after 1-4-1998, the pay drawn in the revised UGC pay scales shall be counted for the purpose of pensionary benefits and the orders revising the pensionary benefits vide GO No. FD (Spl.) 2 PET 99 dated 15-2-1999 shall be made applicable.” *** *** ***

23. The stand of the State of Karnataka that the pensionary benefits had been conferred on the appellants w.e.f. 1-4-1998 on the premise that the benefit of the revision of scales of pay to its own employees had been conferred from 1-1-1998, in our opinion, is wholly misconceived. Firstly, because the employees of the State of Karnataka and the appellants, in the matter of grant of benefit of revised scales of pay, do not stand on the same footing as revised scales of pay had been made applicable to their cases from a different date. Secondly, the appellants had been given the benefit of the revised scales of pay w.e.f. 1-1-1996. It is now well settled that a notification can be issued by the State accepting the recommendations of the Pay Revision Committee with retrospective effect as it was beneficent to the employees. Once such a retrospective effect is given to the recommendations of the Pay Revision Committee, the employees concerned despite their reaching the age of superannuation in between the said dates and/or the date of issuance of the notification would be deemed to be getting the said scales of pay as on 1-1-1996. By reason of such notification, as the appellants had been deprived of a vested right, they could not have been deprived therefrom and that too by reason of executive instructions.

35. At this juncture, learned counsel for the respondent-employees also placed reliance on the U.P. Raghavendra Acharya case (supra), and invited the Court’s attention to the following:-
“19. The fact that the appellants herein were treated to be on a par with the holders of similar posts in government colleges is neither denied nor disputed. The appellants indisputably are governed by the UGC scales of pay. They are entitled to the pensionary benefits also. They had been given the benefits of the revision of scales of pay by the 10th Pay Revision Committee w.e.f. 1-1-1986. The pensionary benefits payable to them on attaining the age of superannuation or death were also stated to be on a par with the employees of the State Government. The State of Karnataka, as noticed hereinbefore, for all intent and purport, has treated the teachers of the government aided colleges and the regional engineering colleges on the one hand and the teachers of the colleges run by the State itself on the other hand on a par. Even the financial rules were made applicable to them in terms of the notifications, applying the rule of incorporation by reference. Although Rule 296 of the Rules per se may not be applicable so far as the appellants are concerned, it now stands admitted that the provisions thereof have been applied to the case of the appellants also for the purpose of computation of pensionary benefits. Therefore there cannot be any doubt whatsoever that the term "Emoluments" as contained in Rule 296 of the Rules would also apply to the case of the appellants. Rule 296 of the Rules reads as under: