Blog for Central and Bihar/Jharkhand State Govt.pensioners,attending day to day inconveniances of the pensioners,like,payment of Fixed Medical Allonces,Prompt sanction of Pension Loan,etc.
Pageviews last month
Friday, February 1, 2013
Suoreme Court Judgement.
Page 1
“ REPORTABLE”
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.8848-8849 OF 2012
Kallakkurichi Taluk Retired Official Association,
Tamilnadu, etc. …. Appellants
Versus
State of Tamilnadu …. Respondent
WITH
CIVIL APPEAL NO.8850-8852 OF 2012
Tiruneveli Corporation city Pensioners Federation …. Appellant
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8853-8855 OF 2012
Madurai Corp. Retired Officers Welfare Association …. Appellant
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8856 OF 2012
Tamilnadu Retired Officers Assn. & Its Affiliate, etc. …. Appellant
Versus
State of Tamil Nadu …. Respondent
WITH
1
Page 2
CIVIL APPEAL NO.8857 OF 2012
N. Subramaniam & Ors. …. Appellants
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8858 OF 2012
Chennai District Retired Officials Assn. …. Appellant
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8859 OF 2012
Tamilnadu Retired Govt. Employees Assn. …. Appellant
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8860 OF 2012
Navaneethakrishnan & Ors. …. Appellants
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8861-8863 OF 2012
M.M.C. Pensioners Welfare Association & Ors. …. Appellants
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8864 OF 2012
2
Page 3
G. Lakshmikanthan & Ors. …. Appellants
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8865 OF 2012
L.N. Ranganathan & Ors. …. Appellants
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8866 OF 2012
P.V. Thirumal & Ors. …. Appellants
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8868 OF 2012
K.N. Alavandar & Ors. …. Appellants
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8869 OF 2012
Retired Officials Association …. Appellants
Versus
State of Tamilnadu …. Respondent
WITH
CIVIL APPEAL NO.8871 OF 2012
S. Jeevi Kanagammal & Ors. …. Appellants
3
Page 4
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8872 OF 2012
V. Thirunavukkarasu & Ors. …. Appellants
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8873-8874 OF 2012
Tamilnadu Retired School-College Tech. Assn. …. Appellants
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8875 OF 2012
Ramanathanpuram District All Pensioners & Senior
Citizens Welfare Assn. …. Appellant
Versus
Government of Tamilnadu …. Respondent
WITH
CIVIL APPEAL NO.8876 OF 2012
S. Shan Mugam & Ors. …. Appellants
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8877-8878 OF 2012
S. Shanmugum & Ors. …. Appellants
Versus
4
Page 5
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8879 OF 2012
R. Thanumoorthy & Ors. …. Appellants
Versus
State of Tamilnadu & Anr. …. Respondents
WITH
CIVIL APPEAL NO.8880 OF 2012
K. Parthasarathy & Ors. …. Appellants
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8881 OF 2012
A. Sethu & Ors. …. Appellants
Versus
State of Tamilnadu …. Respondent
WITH
CIVIL APPEAL NO.8882 OF 2012
A. Shanmugathai & Ors. …. Appellants
Versus
State of Tamilnadu & Ors. …. Respondents
WITH
CIVIL APPEAL NO.8883 OF 2012
R. Kandasamy & Ors. …. Appellants
Versus
State of Tamilnadu & Anr. …. Respondents
5
Page 6
WITH
CIVIL APPEAL NO.8870 OF 2012
P. Chellappan & Ors. …. Appellants
Versus
State of Tamilnadu & Anr. …. Respondents
J U D G M E N T
JAGDISH SINGH KHEHAR, J.
1. The Government of Tamil Nadu has been issuing executive order
from time to time to determine the composition of allowances to be added
to pay for quantifying wages for calculating pension. It is the case of the
appellants, that the State Government followed a consistent practice of
treating ‘dearness allowance’ as ‘dearness pay’ for the computation of
pension and other retiral benefits. Illustratively, we are informed, that by a
Government Order dated 11.3.1970 the State Government included
‘dearness allowance’ at the rate then prevalent, as a component of wages
for calculating average emoluments for determining pension, for those who
retired on or after 26.2.1970. The instant Government Order dated
11.3.1970 was applicable to employees who retired between 26.2.1970
and 1.10.1970.
2. One R. Narasimachar who had retired on 21.11.1969 was not
extended the benefit of ‘dearness allowance’ drawn by him at the time of
his retirement, while computing his pension. This denial was because the
Government order dated 11.3.1970, extended the benefit referred to above
only to such employees who had/would retire on or after 26.2.1970.
6
Page 7
Dissatisfied with the aforesaid denial, he filed Writ Petition no.1815 of 1986
contending, that his pension should have been calculated by taking into
consideration ‘dearness allowance’ which was being drawn by him at the
time of his retirement, as ‘dearness pay’. A learned Single Judge of the
High Court of Judicature at Madras (hereinafter referred to as, the High
Court) allowed the aforesaid writ petition on 15.3.1990 by holding, that the
State Government was not right in restricting the applicability of the
Government Order dated 11.3.1970 only to employees who retired
between 26.2.1970 and 1.10.1970. The learned Single Judge directed,
that ‘dearness allowance’ which the appellant was drawing, at the time of
his retirement, be treated as ‘dearness pay’ for calculating his pension. On
26.2.1991, the writ appeal filed by the State Government against the order
dated 15.3.1990 (passed by the learned Single Judge allowing Writ
Petition no.1815 of 1986), was dismissed.
3. Based on the aforesaid judgment dated 15.3.1990, which the State
Government accepted, a clarificatory Government Order dated 4.12.1991,
was issued. Under the Government Order dated 4.12.1991, even for
employees who had retired prior to 1.12.1966, ‘dearness allowance’
actually drawn by them, at the time of their retirement,would be taken as
‘dearness pay’ for purposes of calculating pension. For employees retiring
between 1.12.1966 and 25.2.1970, ‘dearness allowance’ upto the level
obtaining in December, 1966 would be taken into consideration as
‘dearness pay’ for determining pension (and gratuity). It is therefore
submitted, that ‘dearness allowance’ became a component of pension, for
all employees who had retired upto 25.2.1970.
7
Page 8
4. In order to place the sequence of facts in the correct perspective, it
was further brought to our notice that the Government order dated
11.3.1970 was clarified by a subsequent letter dated 4.12.1991. As per the
aforesaid order and letter, Government servants retiring from service on or
after 26.2.1970, and upto 1.10.1970, ‘dearness allowance’ up to the level
obtaining in December, 1966, was to be reckoned as ‘dearness pay’ for
purposes of pension (and gratuity). Thereupon, through a subsequent
Government order dated 4.12.1991, directions were issued for extending
the benefit contemplated by the Government order dated 11.3.1970 and the
Government’s letter dated 4.2.1991, even to those who had retired prior to
26.2.1970.
5. A Government order dated 4.12.1991 was then brought to our notice.
It provided, that notional revised pension payable from 1.6.1988 would be
encashable only with effect from 1.12.1991. It also provided, that those
Government servants who had retired prior to 26.2.1970 but had died
before 1.12.1991, would be ineligible for the benefits contemplated for
retirees prior to 26.2.1970. However, if the concerned Government
employee had died after 1.12.1991, the benefits contemplated for retirees
prior to 26.2.1970 would be released to the legal heirs of such retirees. It
is, therefore apparent, that for the benefits of the aforesaid Government
order, the retirees under reference would be deprived of the actual
monetary benefit payable to him, from the date of his or her retirement, till
30.11.1991 (as arrears of pension under the aforesaid Government orders
were payable only with effect from 1.12.1991).
6. The aforesaid R. Narasimachar again assailed the Government
order dated 4.12.1991, by contesting the determination of the State
8
Page 9
Government, in denying to him, the benefit of arrears from the date of his
retirement (on 21.11.1969) till 30.11.1991, by filing Writ Petition no. 4038
of 1992 before the High Court. The aforesaid Writ Petition was allowed by
the High Court. The High Court held, that monetary benefits could not be
denied for the period preceding 1.12.1991. In other words, retirees before
1.12.1991 were held entitled to arrears from the date of their retirement till
30.11.1991. The cut off date (1.12.1991) for extending the benefit of
arrears was accordingly set aside.
7. The judgment rendered by the High Court in Writ Petition no. 4038 of
1992 on 15.6.1993, quashing the action of the State Government in limiting
payment of arrears, only with effect from 1.12.1991, was accepted by the
State Government. The judgment of the High Court was given effect to, by
a Government order dated 26.7.1993, whereby, the earlier Government
order dated 4.12.1991 was modified. Under the Government order dated
26.7.1993, pensioners were held eligible for arrears of pension from the
date of their actual retirement. The aforesaid benefit of arrears was also
extended to legal heirs of such pensioners, who had died in the meantime.
8. Based on the factual position narrated in the foregoing paragraphs, it
clearly emerges, that ‘dearness allowance’ was taken as ‘dearness pay’ for
employees retiring from government service, at all times, without any
interruption, for the computation of retiral benefits including pension. The
aforesaid narration also reveals, that the component of ‘dearness
allowance’ to be treated as ‘dearness pay’ for being taken into
consideration for calculating pension, was determined by the State
Government, through Government orders issued from time to time. The
9
Page 10
narration recorded hereinabove pertains to employees whose date of
retirement preceded 1.10.1970.
9. The factual position being recorded hereinafter relates to the period
after 1.10.1970.
10. On 6.2.1974, a Dearness Allowance Committee was constituted, to
inter alia make recommendations, of allowances which should be treated
as a component of wages, for calculating pension of retired/retiring
employees. On 7.7.1974, the Dearness Allowance Committee inter alia
recommended, that ‘dearness allowance’ be treated as ‘dearness pay’ in
full, for computing retiral benefits including pension. Accepting the
recommendations of the Dearness Allowance Committee, the Finance
Department, issued a Government Order dated 6.2.1975 directing, that
‘dearness allowance’ actually being drawn by employees retiring on or after
1.2.1975 be treated as ‘dearness pay’ for calculating average pay ( by
taking not consideration 10 months wages, prior to the date of retirement),
for calculating pension, (gratuity and travelling allowance). It would be
relevant to mention, that at the aforesaid juncture, employees drawing pay
upto Rs.299/-, were entitled to Rs.55/- as ‘dearness allowance’; and those
drawing pay at Rs.300/- and above, were entitled to Rs.70/- as ‘dearness
allowance’. Accordingly, by the Government Order dated 6.2.1975, the
State Government, determined the component of ‘dearness allowance’
(Rs.55/- or Rs.70/-, as the case may be) to be taken into consideration, for
calculating pension. The intention of the instant Government Order was,
that employees retiring on or after 1.2.1975, should derive full benefit of,
the merger of the then existing ‘dearness allowance’ into wages, as
‘dearness pay’ for computing pension. The Government order dated
1
Page 11
6.2.1975 permitted employees retiring on or after 1.2.1975, an addition of
‘dearness allowance’ actually being drawn by them, (during the period of
ten months, prior to the date of their retirement), by treating the same as
‘dearness pay’, for calculating average wages. The said average wage,
would lead to the computation of pension actually payable.
11. K. Venkataraman filed Writ Petition no. 8237 of 1995 before the High
Court with a prayer that ‘dearness allowance’ drawn by him for a period of
ten months prior to the date of his retirement (on 30.6.1974) be treated as
‘dearness pay’ for calculating his pension. The benefit sought, had been
denied because he had retired on 30.6.1974, whereas, the benefit of the
Government order dated 6.2.1975 was extended only to such employees
who had retired after 1.2.1975. The aforesaid Writ Petition came to be
transferred to the Tamil Nadu Administrative Tribunal (hereinafter referred
to as, the Administrative Tribunal). Before the Administrative Tribunal, the
Writ Petition was renumbered as T.A. 845 of 1991. The Administrative
Tribunal, by its order dated 1.4.1993, held that K. Venkataraman was
entitled to the benefits extended to other pensioners, irrespective of the fact
that he had retired (on 30.6.1974 i.e., prior to the cut off date (1.2.1975).
12. The State Government, accepted the decision of the Administrative
Tribunal in K. Venkataraman’s case (in T.A. no. 845 of 1991 decided on
1.4.1993), and implemented the same. For the aforesaid purpose, the
Finance (Pension) Department issued a Government order dated
23.9.1993. Accordingly, K. Venkataraman’s pension was recalculated by
treating ‘dearness allowance’ actually drawn by him, during the ten months
preceding the date of his retirement, as ‘dearness pay’. It therefore
emerges, that the manner of computing pension for retired and retiring
1
Page 12
employees were equated, in so far as the component of ‘dearness
allowance’ is concerned.
13. We were told, that when one or the other Government order
introduced a distinction in pensionary benefits, for computing pension, the
same was equated through judicial intervention. Such judicial interventions
were then adopted by the State Government, from time to time. This
aspect of the matter, factual as well as legal, was not disputed by the
learned counsel representing the respondents. This position continued
till the adoption of the recommendations of the Fourth Tamil Nadu Pay
Commission Report, details whereof, shall be narrated soon hereafter.
14. On 1.1.1979, the Tamil Nadu Pension Rules, 1978 (hereinafter
referred to as “the Pension Rules”) came to be enforced. After the
promulgation of the Pension Rules, pension of retiring government
employees had to be determined in consonance with the said Rules. It is
not in dispute, that pension to Government employees is now regulated
under the Pension Rules. Under the Pension Rules, pension is calculated
on the basis of an employee’s emoluments/wages, immediately before his
retirement. For this, reference may be made to Rule 30 of the Pension
Rules, which is being extracted hereunder:-
“30. Emoluments—In the rules, unless the context otherwise
requires,--
(1) Emoluments means and include:-
(i) Pay, other than special pay granted in view of his
personal qualifications, which has been
sanctioned for a post held by him substantively or
in an officiating capacity (including temporary
capacity under emergency provisions) or to which
he is entitled by reason of his position in a cadre:
(ii) special pay, dearness pay and personal pay; and
1
Page 13
(iii) any other remuneration which may be specially
claused as emoluments by the Government.”
(emphasis is ours)
The emoluments/wages to be taken into consideration for computing
pension is dependent on the allowances which are added to pay. The
composition and component of the said allowances is determined by the
State Government from time to time through Government orders. A
perusal of Rule 30 of the Pension Rules reveals, that ‘dearness pay’ is a
component of the wages to be taken into consideration for computing
pension. And ‘dearness pay’ is a component of ‘dearness allowance;
which on a declaration by the State Government approves (through a
Government order) for being taken into consideration for calculating
pension.
15. In 1986, the Fourth Tamil Nadu Pay Commission gave its report.
The Pay Commission recommended, that ‘dearness allowance’, prevalent
at the end of three years (after the Pay Commission’s recommendations),
should be treated as ‘dearness pay’, in order to ensure a reasonable
pension level. The Finance (Pension) Department having considered the
recommendations made by the Pay Commission, issued a Government
Order dated 30.4.1986, providing that ‘dearness allowance’ and ‘additional
dearness allowance’ sanctioned upto 30.9.1987 would be treated as
‘dearness pay’ for calculating pension, in respect of those who retired (or
died) on or after 1.10.1987. The concession of adding ‘dearness pay’ was
extended to the period of 10 months for calculating average emoluments,
for those who retired before or after 31.7.1987. But employees retiring on
or after 1.10.1987 were entitled to add ‘dearness allowance’ sanctioned
upto 1.10.1987 to their wages, for quantifying pension (family pension and
1
Page 14
death-cum-retirement gratuity). It is therefore apparent, that even after the
acceptance of the recommendations of the Fourth Pay Commission report,
‘dearness allowance’ remained a component of wages. As such, ‘dearness
allowance’ continued to be taken into consideration for computing pension
of retiring government employees.
16. The Fifth Tamil Nadu Pay Commission submitted its report in 1989.
The instant Pay Commission recommended, the following formula for
calculating pension:
Basic Pay Per Month Rate of Pension Per Month
i) Not exceeding Rs.1,500 30 percent of basic pay subject to
a minimum of Rs.375 p.m.
ii) Exceeding Rs.1,500 but not
exceeding Rs.3,000/-
20 per cent of basic pay subject
to a minimum of Rs.450 p.m.
iii) Exceeding Rs.3,000/- 15 per cent of basic pay subject
to a minimum of Rs.600 and a
maximum of Rs.1,250 p.m.
The Fifth Pay Commission also recommended different percentages of
increase in pension for existing pensioners, who had retired prior to
1.6.1988. By a Government Order dated 9.8.1989 the Finance Department
while accepting the recommendations of the Fifth Tamil Nadu Pay
Commission fixed a slab system, for adding ‘dearness allowance’ as
‘dearness pay’ for calculating pension. This decision of the State
Government was to be implemented for employees retiring on or after
1.6.1988.
17. Original Application no. 1919 of 1991 was filed by Ambasamudaram,
Taluk Pensioner Associations before the Administrative Tribunal. Likewise,
a large number of other Original Applications (including OA no. 4952 of
1992, O.A. no. 2227 of 1992, O.A. no. 4265 of 1992, O.A. no. 4953 of
1992, OA no.2645 of 1994 and OA no.2646 of 1994) were filed before the
1
Page 15
Administrative Tribunal. Through the aforesaid original applications, the
petitioners/applicants assailed the Government Order dated 30.4.1986
(issued in furtherance of the recommendations made by the Fourth Tamil
Nadu Pay Commission), as well as, the Government Order dated 9.8.1989
(issued in furtherance of the recommendations made by the Fifty Tamil
Nadu Pay Commission). All the aforesaid original applications were
disposed of by the Administrative Tribunal vide a common order dated
6.5.1996. The operative part of the order passed by the Administrative
Tribunal while disposing of the aforementioned original applications is
being extracted hereunder:
“OA 1919/91
We set aside the G.O.Ms. No.810 (Finance and Pay
Commission) Department dated 9.8.89 in so far as it affects the
applicant’s association and direct the respondent to extend the
benefits of 60% increase in the pre-revised pension plus the
Dearness Allowance at 608 points available to those who retired
prior to 1.6.60 to those pensioners and family pensioners of cases of
retirements or death occurring after 1.6.60.
OA 2227/92
We quash the G.O.Ms. No.371, Finance dated 30.4.1986 and
G.O.Ms.No.911, finance dated 4.12.1991 in so far as they have
restricted their applicability to the pensioners and family who retired
prior to 1.10.1987 listed in Appendix 1 and 2 and those who retired
during the period from 1.10.1987 to 31.5.1988 as listed in Appendix
from the services of Government, local bodies and aided educational
institutions and direct the respondent to count the DA and ADA as
dearness pay for all ten months preceding retirement for computing
average emoluments to fix their pensionary benefits including
pension and value of commutation and also direct the respondent to
pay the arrears of pension, gratuity and value of commutation of
pension on such refixation computed from the date of retirement or
death as the case may be to the pensioners and family pensioners.
OA 4265/92
We quash the G.O.Ms.No.115, Finance dated 6.2.1975 and
G.O.Ms.No.911 Finance dated 4.12.1991 in respect of the applicant
as far as it relates to classification of pensioners and direct the
respondent to extend the benefits of the impugned G.Os. to the
affected pensioners and family pensioners and pay the arrears of
pension and gratuity and the family pension computed on refixation
1
Page 16
of their original pension or family pension from the date of their
retirement or the date of death of the Government servant as the
case may be.
OA 4953/92
We quash G.O.Ms.No.371, Finance dated 30.4.1986 and
G.O.Ms.No.911 Finance dated 4.112.91 in respect of the applicant
as far as they have restricted their applicability to the pensioners and
family pensioners’ who retired or died as the case may be prior to
1.10.87 and after 1.4.78 and direct the respondent to allow the
pensioners who retired during the period from 1.10.87 to 31.5.1988
to count the DA and ADA as dearness pay for all the 10 months
preceding retirement for computing average emoluments and extend
the benefits of the impugned GOS to them, and pay them the arrears
of pension, gratuity and value of commutation on such refixation
computed on and from the date of retirement or death as the case
may be to the affected pensioners and family pensioners.
OA No.2645/94
We direct the respondents to extend the benefit of
G.O.Ms.No.679, Finance (Pension) Department, dated 23.9.93 to the
applicant also and revise his pension with effect from 1.11.1974
taking into account the Dearness Allowance drawn by him from
9.1.1974 to 31.10.1974 and pay him the arrears due to him
consequent on the revision from 1.11.1974.
OA No.2646/94
We quash the letter No.88079/Pension/93-I, Finance
Department, dated 1.10.1993 and direct the respondent to extend the
benefit granted in G.O.Ms.No.115, Finance dated 6.2.75 to those
who retired during the period from 1.10.70 to 1.2.75 and pay them
ar4rears of pension and DCRG from the dates of their retirement.
The applications are allowed. Taking into consideration the
fact that most of the applicants would have died or most of them
would have reached the age of more than 70, we direct the
respondent to refix their pension and pay the arrears within two
months from the date of receipt of this order or a copy thereof.”
18. The factual narration recorded hereinabove refers to the Government
orders issued from to time, directing the component of ‘dearness
allowance’, which was to be taken into consideration as ‘dearness pay’ for
computation of pension; the outcome of the challenges raised to the
aforesaid Government orders; and the eventual implementation thereof in
the context of the implementation of the component of ‘dearness pay’ to be
taken into consideration for calculating pension. Even though the
1
Page 17
exhaustive details of the same have been narrated above, it is necessary to
record a summary thereof, so as to have a bird’s eye view of the manner in
which ‘dearness pay’ has been extended to retired Government employees
from time to time. Accordingly, the aforesaid summary is being
paraphrased below:-
(i) Government order dated 11.3.1970 included ‘dearness
allowance’ as a component of wages for calculating pension
for only such employees who retired between 26.2.1970 and
1.10.1970. By judicial intervention, the aforesaid Government
order extending the benefit of treating ‘dearness allowance’ as
‘dearness pay’, was held to be applicable even to employees
who had retired prior to 26.2.1970. The State Government
accepted the aforesaid legal position and extended the same
benefit of ‘dearness allowance’ by treating the same as
‘dearness pay’ to all pensioners equally.
(ii) Government order dated 6.2.1975 was issued to give
effect to the recommendations made by the Dearness
Allowance Committee to the effect, that ‘dearness allowance’
sanctioned with effect from 1.4.1974 (Rs.55/- for employees
drawing pay upto Rs.599/-, and Rs.70/- for employees drawing
pay upto Rs.600/- and above) would be treated as ‘dearness
pay’ for employees retiring on or after 1.2.1975 ( by ‘adding
dearness allowance actually drawn by them during the ten
months preceding their retirement. By judicial intervention, it
was held that the aforesaid benefit would also extend to such
employees who had retired during the period between
1
Page 18
2.10.1970 and 31.1.1975, and that, ‘dearness allowance’
sanctioned from time to time and actually drawn by the retiring
employee would be treated as ‘dearness pay’ in case of those
who retired during the period between 2.10.1970 and
31.1.1975 (for calculation of pension).
(iii) Government order dated 30.4.1986, while accepting the
recommendation made by the Fourth Tamil Nadu Pay
Commission, provided for certain pensionary benefits to
employees who had retired between 1.10.1987 and 31.5.1988,
by allowing them to count ‘dearness allowance’ and ‘additional
dearness allowance’ as ‘dearness pay’. The concession of
‘dearness pay’ was extended for the entire ten months for
calculating average emoluments in case of those who retired
after 31.7.1987. By judicial intervention, it was held that the
concession of adding ‘dearness allowance’ as ‘dearness pay’
would extend even to employees who had retired (or died)
prior to 1.10.1987. It was also held, that pensioners who had
retired during the period between 1.10.1987 and 31.5.1988
would be entitled to count ‘dearness allowance’ and ‘additional
dearness allowance’ as ‘dearness pay’ (for all the ten months
preceding their retirement) for computing average wages for
calculating pension. The State Government accepted the
aforesaid legal position and extended the aforesaid benefits
equally to all pensioners.
(iv) Government order dated 9.8.1989, while accepting the
recommendations made by the Fifty Tamil Nadu Pay
1
Page 19
Commission, introduced a slab system, for adding ‘dearness
allowance’ as ‘dearness pay’ into the component of wages for
calculating pension. A distinction was made between
employees retiring before and after 1.6.1988. By judicial
intervention, the benefit of treating ‘dearness allowance’ as
‘dearness pay’ was extended to employees irrespective of the
date of their retirement.
(v) Government order dated 4.12.1991 provided, that
arrears of pension based on recalculation of pension, by taking
into consideration the component of ‘dearness allowance’ as
‘dearness pay’, would be released to pensioners with effect
from 1.12.1991, even in cases where the concerned pensioner
had retired with effect from a date preceding 1.12.1991. By
judicial intervention, arrears of pension, based on recalculation
of pension, were ordered to be released to retired employees,
by taking into consideration the component of ‘dearness
allowance’ as ‘dearness pay’ equally for all employees. The
State Government accepted the aforesaid legal position and
extended the said benefit to pensioners who had retired prior
to 1.12.1991.
19. The aforesaid factual/legal position is a historical narration of the
inclusion of ‘dearness allowance’ as ‘dearness pay’ from time to time for
computation of pension. What emerges from this narration is, that all
pensioners (past, present and future) were equally granted the benefit of
‘dearness allowance’ as ‘dearness pay’ for calculating pension. Whenever
a class of pensioners was discriminated against, for computation of
1
Page 20
pension, on the basis of dearness allowance/ pay judicial intervention
restored the equation. The equation was then given effect to by the State
Government from time to time. Clearly, judicial intervention repeatedly
erased the classifications created between pensioners, on the basis of
‘dearness pay’.
20. The present controversy yet again presents a dispute, inter se,
between the State Government and retired employees in respect of the
component of ‘dearness allowance’ liable to be treated as ‘dearness pay’,
for computing pension payable to retired Government employees. Even
though the instant controversy also arises out of Government order dated
9.8.1989, the same remained unsettled in the earlier rounds of litigation
(emerging out of the same Government order dated 9.8.1989), presumably
because none of the retired employees fell within the classes of
pensioners included in the present litigation. The employees herein are
those who retired on or after 1.6.1988. By the impugned Government order
dated 9.8.1989, pensionary benefits of an employee retired/retiring on or
after 1.6.1988 were required to be computed by adding ‘dearness
allowance’ to ‘dearness pay’ at a fixed percentage. By virtue of the
aforesaid determination, employees retiring on or after 1.6.1988 would be
at a disadvantage, as against the employees who had retired prior thereto.
21. The afore-stated challenge to the impugned Government order dated
9.8.1989 was raised before the Administrative Tribunal through an Original
Application (O.A. no. 5771 of 2001) by an Association of retired
Government employees. The aforesaid Original Application came to be
transferred to the High Court, wherein it was renumbered as Writ Petition
(T) no. 32045 of 2005. A learned Single Judge of the High Court allowed
2
Page 21
the aforesaid Writ Petition on 20.4.2006. The learned Single Judge held,
that the State Government, in not extending benefits to members of the
appellant Association, had discriminated against them. The impugned
Government order dated 9.8.1989, to the extent that it did not confer the
same benefits (based on the component of ‘dearness allowance’ treated as
‘dearness pay’), for employees who retired on or after 1.6.1988, was held
as unsustainable. Writ Petition (T) no. 32045 of 2005 was accordingly
allowed.
22. Dissatisfied with the order dated 20.4.2006 passed by the learned
Single Judge, allowing Writ Petition (T) no. 32045 of 2005, the State
Government preferred a Writ Appeal before a Division Bench of the High
Court. The aforesaid Writ Appeal, alongwith writ petitions filed before the
High Court on the same subject, were taken up for collective adjudication.
By an order dated 17.12.2007, Writ Appeal no. 1002 of 2006 was allowed.
The order dated 20.4.2006, passed by the learned Single Judge (allowing
the claim of the employees who had retired on or after 1.6.1988), was set
aside. All writ petitions filed by retired employees on the same subject
matter which were taken up for disposal alongwith the Writ Appeal referred
to above, were simultaneously dismissed. Through the instant Civil
Appeals, different employees’ associations, as also employees (singularly
and collectively), have assailed the order passed on 17.12.2007 by the
Division Bench of the High Court, allowing Writ Appeal no. 1002 of 2006
(and connected appeals); and dismissing the writ petitions preferred by
employees (and employees’ associations) taken up for collective disposal,
alongwith the aforesaid Writ Appeal (no. 1002 of 2006).
2
Page 22
23. During the course of hearing, learned counsel representing the
appellants, first and foremost, vehemently contended, on the basis of the
legal and the factual position noticed above, that the benefit of ‘dearness
allowance’ as ‘dearness pay’ has always equally been extended to all the
pensioners, irrespective of the date of their retirement. It was further
contended, that as and when there was discrimination on the above
subject, the same was suitably remedied by the State Government, by
amending/modifying the earlier Government orders. It was submitted, that
a similar discrimination emanating out of the same Government order
dated 9.8.1989, pertaining to a set of employees differently classified, was
corrected through judicial intervention (details already noticed above).
During the aforesaid course of repeated adjudication, on the subject under
consideration, the matter once came up to this Court, when Special Leave
Petition (Civil) no. 23643 of 1996, filed before this Court by the State
Government, was dismissed. Even a review petition filed before this Court,
by the State Government thereafter, admittedly met the same fate. It was
accordingly submitted, that the same principle which was made applicable
to different sections of pensioners, under the same Government order
dated 9.8.1989, should be extended to the instant class of retired
Government employees i.e., those who retired on or after 1.6.1988.
24. Besides the aforesaid legal premise, for assailing the impugned
Government order dated 9.8.1989, learned counsel representing the
appellants, invited our pointed attention to a compilation enclosed by the
Retired Officers’ Association (in Civil Appeal no. 8856 of 2012). The said
compilation was relied upon to demonstrate to us, the extent of
discrimination caused to the appellants (who retired on or after 1.6.1988).
2
Page 23
For this reason various hypothetical situations were illustratively placed
before us, for our consideration. In each such hypothetical illustration, the
appellants took into consideration the same number of years of service
rendered, against the same post, wherein the pensioner had also retired at
the same component of last pay drawn. Therefrom, it was sought to be
established, that employees who had retired on or after 1.6.1988 would be
at a substantial disadvantage. Illustratively, for the adjudication of the
present controversy, a hypothetical situation relating to an employee
holding the post of Deputy Collector is being placed below:
‘ A ’
Cadre taken : Deputy Collector
Date of retirement : 30.04.1988
Net qualifying service : 33 years
Scale of Pay : 1340-75—1715—90—2435
Pay last drawn : Rs. 2435/-
Average Emoluments : Rs. 2435/-
Original Pension fixed : Rs. 1218/-
Pension revised as per
G.O. 449 : Rs. 1448/-
Revision as per G.O. 810
As on 01.06.1988 : Rs. 1622/-
Pension as per G.O. 271 : 1622/-
Add: 50% increase : 811/-
-------------
Total Pension 2433/- (With effect from
1.6.1988)
(Pension as on 1.1.1966) : 2433/-
Add: 111% : 2701/-
Interim Relief-I 50/-
Interim Relief –II : 244/-
40% Hike : 974/-
------------------------
Total Pension : 6402/- (With effect from 1.1.1996)
xxx xxx xxx xxx
‘ B ’
Cadre taken : Deputy Collector
2
Page 24
Date of retirement : 30.06.1988
Net qualifying service : 33 years
Scale of Pay : 2200-75—2800—100—4000
Average Emoluments : Rs. 2515/- +
Add: 13% as per G.O. 810 : Rs. 327/-
: Rs.2842/-
Pension 50% : Rs.1421/-
As on 1.1.96:
Pension : Rs.1421/-
Add 148% : 2104/-
Interim relief-I : 50/-
Interim relief-II : 143/-
40% Hike : 569/-
-------------
Total Pension Rs.4287/- (With effect from 1.1.1996)
xxx xxx xxx xxx
‘ C ’
Cadre taken : Deputy Collector
Date of retirement : 30.06.1993
Net qualifying service : 33 years
10 months average
emoluments : Rs.2725/-
Add: 13% increase : Rs. 355/-
: Rs.3080/-
Pension fixed at 50% : Rs.1540/-
Revised pension as on
1.1.1996 : Rs.1540/-
Add Dearness Allowance
148% : 2280/-
Interim relief-I : 50/-
Interim relief-II : 154/-
40% Hike : 616/-
-------------
Total Pension Rs.4640/- (With effect from 1.1.1996)
After narrating the computations made in the illustrations referred to above,
it was submitted that it clearly emerged, that a person who had retired as a
Deputy Collector on 30.4.1988 (before 1.6.1988) would get pension of
Rs.6,402/-; while a Deputy Collector, who retired on 30.6.1988, would get
2
Page 25
Rs.4,287/-; and a Deputy Collector who retired on 30.6.1993, would get
Rs.4,640/- as pension, all of them having the same 33 years of qualifying
service, as well as, a similar last pay prior to their retirement. What is
important is, that the figures referred to above were accepted in the
response sought by the High Court from the Accountant General, Tamil
Nadu. In the response from the Accountant General, Tamil Nadu, the only
mistake found was the amount of pension depicted as Rs.6,402/- for a
Deputy Collector (who retired prior to 1.6.1988). According to the
Accountant General, Tamil Nadu, on a correct analysis, the said figure
would be Rs.6,808/-. It is therefore apparent, that in identical
circumstances, a Deputy Collector retiring prior to 1.6.1988 would draw
pension at the monthly rate of Rs.6,808/-, whereas, a Deputy Collector
retiring thereafter on 30.6.1988, would get a monthly pension of Rs.4,287/-.
This would show that a person who retired from the same cadre before the
crucial date i.e., 1.6.1988, would get about Rs.2,500/- per month more than
the one who had retired from the same cadre after the said date. The
aforesaid illustration has been highlighted by us, in order to determine the
correctness of the following inferences drawn by the Division Bench of the
High Court, while passing the impugned order dated 17.12.2007:-
“Learned counsel for the parties circulated their respective
calculations showing working sheet of pension as admissible to a
class of employees, who retired prior to 1st June, 1988 in the
unrevised scales of pay and those similarly situated and retired after
1st June, 1988 in the revised scales of pay. Charts are varying.
While in the chart submitted by the State Government it has been
shown that those who retired after 1 s t June, 1988 will be getting a
little bit higher than those who retired prior to 1 s t June, 1988, the
calculation submitted by individual parties shows that those who
retired just prior to 1 s t June, 1988 may get a little higher emoluments
than those who retired after 1 s t June, 1988 . It is for the said reason,
we also sought for opinion from the Accountant General, Tamil Nadu,
who has submitted its calculation chart, as circulated between the
parties and quoted hereunder:-
2
Page 26
“As per instructions of the Hon’ble High Court of Madras in
W.P. 11634 of 2002, the working sheets submitted by both the
Government and the petitioners in WA 1002 of 2006 have
been scrutinized and the following observations are made:-
A. Government Working Sheet:
Details of the case As it is As it
should
be
Designation: Tahsildar
Date of Retirement: 31.5.1988
Scale of Pay: Rs.1160-50-1460-70-1950
Pay Rs.1880
Rs.1387 Rs.1573
Designation: Tahsildar
Date of Retirement: after 1.6.1988
Scale of Pay: Rs.2000-60-2300-75-3200
Pay Rs.2300
Rs.1534 Rs.1534
1/579 revision is applied in this case, then the revised pension
from 1.6.88 works out to Rs.2000 + 18% D.A.
B. Petitioner Working Sheet: Out of nine illustrations, five
cases are found to be correct and in four cases, the
correct calculations are given below:-
Details of the case As it is As it
should be
Designation: Deputy
Collector (‘A’)
Date of Retirement:
30.4.1988
Scale of Pay:
Rs.1340-75-1715-90-
2435
Pay Rs.2435
Rs.2433
(from 1.6.88)
Rs.6402
(from 1.1.96)
Rs.2589
(from 1.6.88) Rs.6808
(from 1.1.96)
Designation: Block
Development Officer
(‘A’)
Date of Retirement:
31.1.1988
Scale of Pay:
Rs.1045-45-1450-65-
1675
Pay Rs.1515
Rs.849
(from 1.2.88)
Rs.1427
(from 1.6.88)
Rs.4303
(from 1.1.96)
Rs.947
(from 1.2.88) Rs.1592
(from 1.6.88)
Rs.4796
(from 1.1.96)
Designation:
Secondary Grade
Teacher (‘A’) (Sel.
Grade)
Rs.472
(from 1.1.88)
Rs.815
(from 1.6.88)
Rs.513
(from 1.1.88)
Rs.890
(from 1.6.88)
2
Page 27
Date of Retirement:
31.12.1987
Scale of Pay: Rs.
Pay Rs.820
Rs.2480
(from 1.1.96)
Rs.2790
(from 1.1.96)
Designation:
Tahsildar
Date of Retirement:
31.3.1990
Scale of Pay:
Rs.1160-50-1460-70-
1950
Pay Rs.2180 from
1.1.90
Rs.1232
(from 1.4.90)
Rs.3723
(from 1.1.96)
Rs.1209
(from 1.4.90) Rs.3654
(from 1.1.96)
It is certified that subject to the observations made supra the
illustrative calculations are in order.
Branch Officer/Pension 30”
From the aforesaid chart it appears that those who retired prior
to 1 s t June, 1988 or after 30 th June, 1988 from similar post, they wil l
get almost similar quantum of pension.
(emphasis is ours)
25. Learned counsel for the appellants pointed out, that the
determination by the High Court to the effect, that employees who had
retired prior to 1.6.1988 from a similar post, would “…get a little higher…”
pensionary emoluments, than those who retired afterwards, was clearly
preposterous. Learned counsel for the appellants, while referring to the
illustration narrated above, also invited our attention to the affidavit dated
15.12.2011 (filed by the first respondent in Civil Appeal no.8856 of 2012),
wherein the position canvassed at the behest of the appellants was
considered. According to the acknowledged position, the first respondent
(in the affidavit dated 15.12.2011), on proper calculations asserted, that in
identical circumstances, a Deputy Collector retiring prior to 1.6.1988 would
draw pension at a monthly rate of Rs.6,808/-, whereas, a Deputy Collector
retiring after 30.6.1988 would get a monthly pension of Rs.4,287/-. This
would show, that merely on account of the accident of retiring before or
2
Page 28
after 1.6.1988, one of the pensioners would draw pension at the rate of
about Rs.2,500/- per month more than the other. We are satisfied, that the
illustration referred to hereinabove, clearly negates the conclusion drawn
by the Division Bench of the High Court in the impugned order dated
17.12.2007, to the effect, that retirees prior to 1.6.1988 from a similar post
would “…get a little higher” pensionary emoluments.
26. We have given our thoughtful consideration to the controversy in
hand. First and foremost, it needs to be understood that the quantum of
discrimination, is irrelevant to a challenge based on a plea of arbitrariness,
under Article 14 of the Constitution of India. Article 14 of the Constitution of
India ensures to all, equality before the law and equal protection of the
laws. The question is of arbitrariness and discrimination. These rights flow
to an individual under Articles 14 and 16 of the Constitution of India. The
extent of benefit or loss in such a determination is irrelevant and
inconsequential. The extent to which a benefit or loss actually affects the
person concerned, cannot ever be a valid justification for a court in either
granting or denying the claim raised on these counts. The rejection of the
claim of the appellants by the High Court, merely on account of the belief
that the carry home pension for employees who would retire after 1.6.1988,
would be trivially lower than those retiring prior thereto, amounts to bagging
the issue pressed before the High Court. The solitary instance referred to
above, which is not a matter of dispute even at the hands of the first
respondent, clearly demonstrates, that in a given situation, an employee
retiring on or after 1.6.1988 could suffer a substantial loss, in comparison to
an employee retiring before 1.6.1988. We are, therefore satisfied, that the
High Court clearly erred while determining the issue projected before it.
2
Page 29
27. 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 vs. N.M. Thomas (1976) 2 SCC 310). 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 summarized 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. In the context of the instant appeals, it is
necessary to understand the overall objective of treating “dearness
allowance” (or a part of it) as “dearness pay”. There can be no doubt, that
‘dearness allowance’ is extended to employees to balance the effects of
ongoing inflation, so as to ensure that inflation does not interfere with the
enjoyment of life, to which an employee is accustomed. Likewise, the
objective of ‘dearness pay’ is to balance the effects of ongoing inflation, so
that a pensioner can adequately sustain the means of livelihood to which
he is accustomed . Having understood the reason why the Government
extends the benefit of ‘dearness allowance’ and ‘dearness pay’, to its
2
Page 30
employees and pensioners respectively, we would venture to search for
answers to the twin tests which must be satisfied, for making a valid
classification (or a valid discrimination), in the present fact situation.
28. In the present context, it needs to be kept in mind, that ‘dearness
allowance’ is paid to Government employees keeping in mind the All India
Consumer Price Index. Inflation in the market place is sought to be
balanced by paying ‘dearness allowance’ to Government employees.
When a State Government chooses to treat ‘dearness allowance’ as
‘dearness pay’, the objective remains the same i.e., inflation in the market
place is sought to be balanced for retired employees by giving them the
benefit of ‘dearness pay’. Since the component of inflation similarly affects
all employees, and all pensioners (irrespective of the date of their entry into
service or retirement), it is not per se possible to accept different levels of
‘dearness pay’ to remedy the malady of inflation. Just like the date of entry
into service (for serving employees) would be wholly irrelevant to
determine the ‘dearness allowance’ to be extended to serving employees,
because the same has no relevance to the object sought to be achieved.
Likewise, the date of retirement (for pensioners) would be wholly irrelevant
to determine the ‘dearness pay’ to be extended to retired employees.
Truthfully, it may be difficult to imagine a valid basis of classification for
remedying the malaise of inflation. In the absence of any objective,
projected in this case, the question of examining the reasonableness to the
object sought to be achieved, simply does not arise. Our straying into this
expressed realm of imagination, was occasioned by the fact, that the
pleadings filed on behalf of the State Government, do not reveal any
reason for the classification, which is subject matter of challenge in the
3
Page 31
instant appeal. The only position adopted in the pleadings filed before
this Court for introducing a cut off date for differential treatment, is
expressed in paragraph 4 of the counter affidavit, filed by the State of Tamil
Nadu, which is being extracted herewith:.-
“With reference to the averments made in the Grounds of the
Special Leave Petition, I submit that the fifth Pay Commission has
revised pay and pension with effect from 1.6.1988. As per the
recommendation of the above Pay Commission, the Government
had issued orders for the revision of pension and Family Pension
with effect from 1.6.1988 in G.O.Ms. No. 810. Finance (PC)
Department, dated 9.8.1989. It is submitted that the fourth Tamil
Nadu Pay Commission has recommended that at the end of the
period of three years, the Dearness Allowance sanctioned upto that
period could be treated as Dearness Pay. The Fourth Pay
Commission revision was given with effect from 1.10.1984. Based
on the above recommendation, the Government has issued orders
in G.O.Ms. No.371, Finance, dated 30.4.1986, read with
Government letter No.124414/Pension/86-1, dt. 11.2.1987, that the
Dearness Allowance sanctioned upto 30.9.1987 shall be treated as
Dearness Pay for the purpose of pensionary benefit in the case of
the Govt. Servant retiring on or after 1.10.1987. The orders
issued in G.O.Ms. 371, Finance dated 30.4.1985 as amended in
Government letter No.70707-A/Pension /86-1, dated 8.7. 1986 read
as follows:-
“The Fourth Tamil Nadu Pay Commission have among
other things recommended that at the end of a period of
three years the Dearness Allowance sanctioned upto the
period could be treated as Dearness Pay in order to ensure a
reasonable pension level. The Government accept the
recommendation of the Commission and direct that in the
case of Government servant, who will be retiring on or after
1.10.1987, the Dearness Allowance sanctioned upto
1.10.1987 shall be reckoned as Dearness Pay for purpose of
pension in the case of death of a Government servant
occurring on or after 1.10.1987 while in service the Dearness
Allowance sanctioned upto 1.10.1987 shall be treated as
Dearness Pay for the purpose of computing Family Pension.”
It is therefore, evident, that the State Government has not disclosed any
object which is desired to achieve by the cut off date. Most importantly, the
financial constraints of the State Government, were not described as the
basis/reason for the classification made in the imputgned Government
order dated 9.8.1989.
3
Page 32
29. The issue in hand needs to examine from another perspective as
well. It must be clearly understood, that no employee has a right to draw
‘dearness allowance’ as ‘dearness pay’ till such time as the State
Government decides to treat ‘dearness allowance’ as ‘dearness pay’. And
therefore, the State Government has the right to choose whether or not
‘dearness allowance’ should be treated as ‘dearness pay’. As such, it is
open to the State Government not to treat any part of ‘dearness allowance’
as ‘dearness pay’. In case of financial constraints, this would be the most
appropriate course to be adopted. Likewise, the State Government has the
right to choose how much of ‘dearness allowance’ should be treated as
‘dearness pay’. As such, it is open to the State Government to treat a
fraction, or even the whole of ‘dearness allowance’ as ‘dearness pay’.
Based on Rule 30 of the Pension Rules, it is clear that the component of
‘dearness pay’ would be added to emoluments of an employee for
calculating pension. In a situation where the State Government has
chosen, that a particular component of ‘dearness allowance’ would be
treated as ‘dearness pay’, it cannot discriminate between one set of
pensioners and another, while calculating the pension payable to them (for
the reasons expressed in the preceding paragraph). Of course, a valid
classification may justify such an action. In this case, the State
Government has not come out with any justification/basis for the
classification whereby one set of pensioners has been distinguished from
others for differential treatment.
30. The instant controversy should not be misunderstood as a
determination of the total carry home pension of an employee. All the
Government orders referred to above, deal with the quantum of ‘dearness
3
Page 33
allowance’ to be treated as ‘dearness pay’ for the calculation of pension.
‘Dearness pay’ is one of the many components, which go into the eventual
determination of pension. Therefore, the focus in the adjudication of the
present controversy must be on ‘dearness pay’, rather than on the eventual
carry home pension. The relevance and purpose of treating ‘dearness
allowance’ as ‘dearness pay’, has been brought out in the foregoing
paragraphs. Therefore, clearly, the object sought to be achieved by adding
‘dearness pay’ to the wage of a retiree, while determining pension payable
to him, is to remedy the adverse effects of inflation. The aforesaid object
has to be necessarily kept in mind, while examining the present
controversy. Any classification without reference to the object sought to be
achieved, would be arbitrary and violative of the protection afforded under
Article 14 of the Constitution of India, it would also be discriminatory and
violative of the protection afforded under Article 16 of the Constitution of
India.
31. Having given our thoughtful consideration to the controversy in hand,
it is not possible for us to find a valid justification for the State Government
to have classified pensioners similarly situated as the appellants herein
(who had retired after 1.6.1988), from those who had retired prior thereto.
Inflation, in case of all such pensioners, whether retired prior to 1.6.1988 or
thereafter, would have had the same effect on all of them. The purpose of
adding the component of ‘dearness pay’ to wages for calculating pension is
to offset the effect of inflation. In our considered view, therefore, the instant
classification made by the State Government in the impugned Government
order dated 9.8.1989 placing employees who had retired after 1.6.1988 at
a disadvantage, vis-Ã -vis the employees who retired prior thereto, by
3
Page 34
allowing them a lower component of ‘dearness pay’, is clearly arbitrary and
discriminatory, and as such, is liable to be set aside, as violative of Articles
14 and 16 of the Constitution of India.
32. It is also imperative for us to take into consideration, a few
judgments rendered by this Court, which were brought to our notice by the
learned counsel representing the State Government. Reliance was placed
on three judgments to substantiate the submissions advanced on behalf of
the respondents.
(i) First of all, reliance was placed on the decision rendered by this Court in
Union of India Vs. P.N. Menon,. (1994) 4 SCC 68. Facts in the first cited
judgment reveal, that a recommendation was made by the Third Pay
Commission to the State Government, suggesting review of the existing
wage position, based on unprecedented inflation. The State Government
was asked (by the Third Pay Commission) to take a decision on whether
the dearness allowance scheme should be extended further; or in the
alternative pay-scales themselves should be revised. This suggestion of
the Third Pay Commission was based on the fact, that the price level index
had arisen above the 12 monthly average to 272. Having considered the
matter, the State Government decided to extend the dearness allowance
scheme. It simultaneously issued an Office Memorandum, (hereinafter
referred to as ‘O.M.’) whereby, a portion of ‘dearness allowance’ was to
be treated as pay for computation of retiral benefits. The benefit of the
aforesaid O.M. was extended only to those employees who had/would
retire on or after 30.9.1977. The aforesaid O.M, also contemplated, that
persons who had/would retire on or after 30.9.1977 but not later than
30.04.1979 would be allowed to exercise an option, to choose one out of
3
Page 35
the two alternatives. They could either seek the benefit of death-cumretirement
gratuity by excluding the element of ‘dearness allowance’,
alternatively, they could seek the same, by including the element of
‘dearness allowance’. The issue which came up for adjudication before
this Court was, whether the aforesaid O.M. was sustainable in law, as it did
not extend equal benefits to all retirees, irrespective of the dates of their
retirement. All the respondents had retired before 30.9.1997. While
determining the aforesaid issue, this Court took into consideration inter alia
the fact that the decision to merge a part of ‘dearness allowance’ with pay,
was taken with reference to the price index level. This decision was taken
on the recommendations of the Third Pay Commission. In the aforesaid
view of the matter, and specially because, an option was given to
employees who had retired between 30.09.1977 and 30.04.1979, to get
their pension and (death-cum-retirement gratuity) calculated, by including
or excluding the element on dearness pay, this Court ruled, that the State
Government had adopted measures ensuring similar benefits to all. And
that, there was no intention to create a class within a class. This Court felt
that the classification, had a reasonable nexus with the price level index at
272, on 30.09.1977. This according to this Court was just and valid. The
factual position, that needs to be highlighted, in so far as the first cited
judgment i.e. in P.N. Menon’s case (supra) is that, the respondent
employees had never been in receipt of dearness pay, when they retired
from service, and therefore, the O.M. in question could not have been
applied to them. This is how this Court examined the matter in the cited
case. This Court also noticed, that prior to the O.M. in question, the
pension scheme was contributory, and only with effect from 22.9.1977, the
3
Page 36
pension scheme was made non contributory. Since the respondent
employees in the first cited case, were not in service at the time of
introducing the same, they were held not eligible for the said benefit.
(ii) Next, learned counsel relied upon the judgment in State of Rajasthan
Vs. Amrit Lal Gandhi, (1997) 2 SCC 342. The facts, in the second cited
judgment were, that originally teachers of the Jodhpur University were
governed by contributory provident fund rules. There was no pension
scheme applicable to them. In 1983, a committee constituted by the
University Grants Commission, recommended the introduction of pensioncum-
gratuity for university and college teachers. Thereupon, the Senate
and Syndicate of the Jodhpur University resolved to introduce a pension
scheme for university teachers. The resolution of the Syndicate and Senate
also provided, that options would be sought from existing teachers, so as to
enable them, to choose whether they should be governed by the
contributory provident fund rules, or would like to accept the benefits under
the pension scheme. As the recommendation of the Syndicate and the
Senate, of the Jodhpur University had financial implications, approval of the
State Government was imperative. On examining the recommendations,
the State Government decided to introduce the pension scheme with effect
from 1.1.1990. Based thereon, the Syndicate and the Senate passed a
concurring resolution expressing, that the pension scheme would become
operational with effect from 1.1.1990. Based thereon, those teachers who
were in the service of the Jodhpur University on or after 1.1.1990, were
required to submit their options. The question which arose for
consideration in the second cited judgment was, whether employees who
had retired before 1.1.1990, had a similar right to claim pension, as was
3
Page 37
being extended to employees, who had/would retire on or after 1.1.1990.
The High Court partly accepted the plea of the retirees by holding, that the
pension scheme should be extended to employees who had retired on or
after 1.1.1986. This Court did not approve the decision rendered by the
High Court. This Court noticed, that the approval of the resolutions of the
Syndicate and Senate of the Jodhpur University had been accorded by the
State Government after the State Legislature had passed the University
Pension Rules, and the General Provident Fund Rules. This Court also
noticed, that the State Government in its affidavit had taken an express
stand, that the introduction of the pension scheme was economically viable
only with effect from 1.1.1990. In other words, the State Government
could bear the financial burden of the pension scheme, only if it was
introduced with effect from 1.1.1990. Based on the aforesaid position
adopted by the State Government, this Court concluded, that the
determination of the State Government in introducing the pension scheme
for employees, who had retired with effect from 1.1.1990 had not been
fixed arbitrarily or without any valid reason/basis. This Court accordingly,
set aside the judgment rendered by the High Court.
(iii) Finally, learned counsel placed reliance on the judgment rendered by
this Court in State of Punjab Vs. Amar Nath Goel, (2005)6 SCC 754. In the
third cited case, employees both of the Central Government, as also, of the
State Governments of Punjab and Himachal Pradesh, who had retired prior
to 1.4.1995 sought death cum-retirement gratuity, up to the increased limit
of Rs. 2.5 lakhs. The claim raised by the employees was rejected in some
cases, whereas in some other cases the Central Administrative Tribunal
and the High Court took the view, that the benefit of increased quantum
3
Page 38
of death-cum-retirement gratuity, should be extended to employees, who
had retired between 1.7.1993 and 31.3.1995 as well. Having examined the
aforesaid controversy, this Court arrived at the conclusion, that the decision
of the Central Government and State Governments to limit the benefit only
to employees, who had retired ( or died) on or after 1.4.1995, was based
on a concrete determination of financial implications, as such, it was held
that the cut off date (1.4.1995) was neither arbitrary nor irrational, as
alleged. Consequently, the plea advanced at the hands of the employees
assailing the cut off date as arbitrary, and by alleging that it was not based
on any rational criteria, was rejected.
33. We have considered the submissions urged at the hands of the
learned counsel for the respondent, based on the judgments cited at the
bar. In our view, none of the judgments relied upon is relevant to the
present controversy.
(i) In so far as P.N. Menon’s case (supra) is concerned, having
examined the controversy. this Court arrived at the conclusion, that the
State Government adopted measures which would ensure, similar benefits
to all. This court also expressed the view, that there was no intention of the
State Government, to create any class within a class. The price level index
at 272 on 30.9.1977 was the determining factor for the State Government’s
decision. It was accordingly concluded, that there was a valid and
reasonable nexus to the object sought to be achieved. But most
importantly this Court felt, that the decision of the State Government in not
extending benefits to the respondents was based on the fact, that they were
not in receipt of the any ‘dearness pay’ at the time of their retirement.
Moreover, since the family pension scheme was contributory when the
3
Page 39
respondents had retired, the respondents could not justifiably seek the
benefits, which were available only to the retirees after the pension
scheme was made non contributory. There is, therefore no co-relation of
the first cited judgment with the controversy in hand.
(ii) In Amrit Lal Gandhi’s case (supra) pension was introduced for the
first time for university teachers based on resolutions passed by the
Syndicate and the Senate of the Jodhpur University. The same were
approved by the State Government with effect from 1.1.1990. The instant
controversy is, therefore, not between one set of pensioners alleging
discriminatory treatment, as against another set of pensioners. There were
no pensioners, to begin with. Retirees were entitled to provident fund
under the existing Provident Fund Scheme. The question of discrimination
of one set of pensioners from another set of pensioners, therefore, did not
arise in the second cited judgment. Financial viability was, as such, a
relevant issue. The State Government adopted the stance, that the
introduction of the pension scheme was financially viable only if the
scheme was introduced with effect from 1.1.1990. The cut off date clearly
disclosed a classification founded on an intelligible differentia, which had a
rational relationship with the object sought to be achieved. There is
therefore, in our view, no correlation of the second cited judgment with the
controversy in hand.
(iii) In so far as the third cited judgment is concerned, this Court in Amrit
Lal Gandhi’s case (supra) examined an issue where, the increased deathcum-
retirement gratuity could only be claimed by employees, who had
retired after the cut off date (1.4.1995). Death-cum-retirement gratuity is a
one time benefit, whereas, pension enures to retired employees for the
3
Page 40
entire length of their lives. Pension is therefore a continuing benefit.
Death-cum-retirement gratuity, is a one time benefit, disbursed in
accordance with to the rules prevalent at the time (of retirement). Herein
also, the issue under consideration was not different measures for
computing, a continuing retiral benefit, based on any cut off date. We are
therefore of the view, that the instant judgment is also not relevant for the
adjudication of the controversy in hand.
In view of the above, we are satisfied, that none of judgments relied upon
by the learned counsel for the respondents, have any bearing to
controversy in hand.
34. The instant appeals are accordingly allowed. The impugned order
dated 17.12.2007 passed by the High Court is hereby set aside. The
impugned Government Order dated 9.8.1989, to the extent that it extends
to employees who retire on or after 1.6.1988, a lower component of
‘dearness pay’, as against those who had retired prior to 1.6.1988, is set
aside, being violative of Articles 14 and 16 of the Constitution of India.
…………………………….J.
(D.K. Jain)
…………………………….J.
(Jagdish Singh Khehar)
New Delhi;
January 17, 2013.
4
Revision Of Pension for pre-1996-2006
MINIMUM REVISED BASIC PENSION OF PRE-2006 PENSIONERS W.E.F. 24-9-2012
AS PER DOP OM DATED 28-1-2013
Existing Pay Scales and
Revised Pay Structure as pr Sixth CPC
Pay structure & Pension as per accepted
Recommendations
Consoli
- dated
pension
with
40%
Fitment
Benefit
(vide
Para 4.1
of DOP
OM of
1-9-08)
i.e. 2.26
X B.P
Pen-sion
fixed
(as per
DOP OM
Dt 3/10/08
(By
misinterpr
eting
accep-ted
recommendations
of
SCPC)
Difference
Basic
Pen
-sion
(Col.7
Minus
Col. 8
or 9
whichever
is
higher)
Existing Pay
Scales as per
5th CPC
(BP)
SCPC
Pay
Band
Revised Pay
Structure
(Pay Band
+
Grade Pay)
Pay in
the Pay
Band
(corresp
onding
to minimum
of
Pre-
Revised
pay
scale)
Grade
Pay
(GP)
Revised
Basic
Pay
(Col. 4+
Col 5)
MINIMUM
REVISED
BASIC
PENSION
of Pre-2006
Pensioners
(50 %
of Col 6 )
W.e.f.
24-9-2012
1 2 3 4 5 6 7 8 9 10
S-4(2750-4400) PB-1 5200-20200+1800 5530 1800 7330 3665 3500 3500 165
S-5(3050-4590) PB-1 5200-20200+1900 5880 1900 7780 3890 3500 3550 340
S-6(3200-4900) PB-1 5200-20200+2000 6060 2000 8060 4030 3616 3600 414
S-7(4000-6000) PB-1 5200-20200+2400 7440 2400 9840 4920 4520 3800 400
S-8(4500-7000) PB-1 5200-20200+2800 8370 2800 11170 5585 5085 4000 500
S-9 (5000-8000) PB-2 9300-34800+4200 9300 4200 13500 6750 5650 6750 0
S-10 (5500-
9000) PB-2 9300-34800+4200 10230 4200 14430 7215 6215 6750 465
S-11(6500-
6900) PB-2 9300-34800+4200 12090 4200 16290 8145 7345 6750 800
S12((6500-
10500) PB-2 9300-34800+4200 12090 4200 16290 8145 7345 6750 800
S-13 (7450-
11500) PB-2 9300-34800+4600 13860 4600 18460 9230 8419 6950 811
S-14 (7500-
12000) PB-2 9300-34800+4800 13950 4800 18750 9375 8475 7050 900
S-15 (8000-
13500) PB-2 9300-34800+5400 14880 5400 20280 10140 9040 7350 1100
New scale-GrA PB-3 15600-39100+5400 15600 5400 21000 10500 9040 10500 0
S-16,(9000) PB-3 15600-39100+5400 16740 5400 22140 11070 10170 10500 570
S-17(9000-
9550) PB-3 15600-39100+5400 16740 5400 22140 11070 10170 10500 570
S-18 (10325-
10975) PB-3 15600-39100+6600 19210 6600 25810 12905 11666 11100 1239
S-19 (10000-
15200) PB-3 15600-39100+6600 18600 6600 25200 12600 11300 11100 1300
S-20 10650-
15850) PB-3 15600-39100+6600 19810 6600 26410 13205 12035 11100 1170
S-21(12000-
16500) PB-3 15600-39100+7600 22320 7600 29920 14960 13560 11600 1400
S-22 (12750-
16500) PB-3 15600-39100+7600 23720 7600 31320 15660 14408 11600 1252
S-23 (12000-
18000) PB-3 15600-39100+7600 22320 7600 29920 14960 13560 11600 1400
S-24 (14300-
18300) PB-4 37400-67000+8700 37400 8700 46100 23050 16159 23050 0
S-25 (15100-
18300) PB-4 37400-67000+8700 39690 8700 48390 24195 17063 23050 1145
S-26 (16400-
20000) PB-4 37400-67000+8900 39690 8900 48590 24295 18532 23150 1145
S-27(16400-
20900) PB-4 37400-67000+8900 39690 8900 48590 24295 18532 23150 1145
S-28 (14300-
22400) PB-4
37400-67000+10000
37400 10000 47400 23700 16159 23700 0
S-29 (18400-
22400) PB-4 44700 10000 54700 27350 20792 23700 3650
1. Consolidated pension figure in col. 8 is for basic pension (B.P.) based on the minimum pay of pre revised scale.
2. Those whose Revised Pension has been fixed higher than Col 7, shall not be affected by these orders
- (Compiled by : N. P. Mohan, President RSCWS, Ex CE WR)
Subscribe to:
Posts (Atom)