To Govt. Vs. N. Govindan Achary & Ors  Insc 43 (31 January 2006)
Pasayat & C.K. Thakker
Civil Appeal Nos. 381-382 of 2002] The Commissioner and Secretary ....Appellant
to Government, Transport Department, Fort. St. George, Madras ARIJIT PASAYAT, J.
appeals are directed against the judgment of the Tamil Nadu Administrative
Tribunal, Madras (in short the 'Tribunal') disposing
of several applications filed by the respondents. By the impugned judgment, the
Tribunal held that respondents were entitled to pension in terms of G.O.Ms.
No.378 issued by the Finance Department of the appellant- State dated 18.4.1975
read with G.O.Ms. No.378, Transport Department, dated 23.9.1985.
facts as highlighted by the appellants are essentially as follows:
respondents were employees of the erstwhile Transport Department in the State
of Tamil Nadu. Till 1972 the public
transportation was managed and run as a Government Department conferring the
status of Government servants to all employees of the State Transport
to the policy decision of the State, Corporations were formed. Initially, the
employees were sent to the said Corporations on deputation. As there was
reluctance on their part to be absorbed with the Transport Corporations giving
up their status and benefits available to government servants, the Government
by G.O.Ms. No.378 dated 18.4.1975 issued orders offering pension for the
services rendered in the Transport Department while they served in the
the pension offered in the said G.O.Ms. No.378 dated 18.4.1975 was denied to
the respondents. Hence, they filed applications before the Tribunal with a
prayer that direction be given to the present appellants to pay the eligible
pension to the applicants before the Tribunal for services rendered by them in
the transport department in terms of G.O.Ms. No.378 of the Finance Department
dated 23.9.1985. Two categories of cases were filed; one related to cases where
pension was denied on the ground that the applicants had not put in the
qualifying service of 10 years. Their services were counted from the date of
permanent absorption in the Transport Department instead of their date of entry
into service on 15.9.1975 i.e. the date of absorption in Transport Corporations
and in the second type of cases the employees were not given benefit of pension
while in service in the Transport Corporation as per G.O.Ms. 378. The
Government referred to G.O. No.212 to deny the benefit. It was pointed out by
the present appellants that the respondents had opted to continue under
Operational Subordinate Service Rules (in short the 'Operational Rules') when
pension was offered to operation staff in G.O. No.212 dated 28.3.1974. Acting
on the basis of demand raised by certain employees the aforesaid G.O. No.212
dated 28.3.1974 was issued extending pensionary benefits and called for
exercising options either to remain in the existing scheme or to come under
State of Tamil Nadu was at the relevant point of time
following two types of schemes. One was the pensionary scheme under Madras Liberalised
Pension Rules, 1960 (in short 'Liberalised Rules') and other was known as Non- Pensionary
Contributory Provident Fund Scheme (in short the 'Provident Fund Scheme') under
the Tamil Nadu State Transport Department Operation Subordinate Retiring
Invalid and Compassionate Gratuity (Non-Pensionable Establishment) Rules.
noted above, the G.O.No.212 was issued on 23.9.1974. When the G.O. was issued
certain doubts were entertained as to under which scheme the concerned
employees were covered. According to the appellants the respondents opted to
continue in the Non-pensionary Contributory Provident Fund scheme by exercising
option in writing under Rule 34 of the Tamil Nadu Pension Rules (in short
'Pension Rules'). Certain benefits were granted on 18.7.1975 to the employees
engaged by the Public Sector Undertakings and the State Government.
were some connected issues which had been dealt with by this Court in detail in
Government of Tamil Nadu and Ors. v. M. Ananchu Asari and Ors. (2003 (10) SCC
503) and Government of Tamil Nadu and Ors. v. M. Ananchu Asari and Ors.(2005
(2) SCC 332). These cases related to fixation of cut off dates for granting/calculating
pensionary benefits. In M. Ananchu Asari's case (supra) it was held as follows:
the fixation of the cut-off date as 1.4.1982 would, in our view, be
into account the aforementioned date for the purpose of assessing the requisite
length of service, we direct the appellants to take steps to extend the pensionary
benefits to the eligible employees. Having regard to the conduct of the
respondents in seeking the remedy long after the options were exercised, we
consider it just and proper to direct that the respondent employees whoever
have retired should get the arrears of pension only from 1.1.1988, which date
is fixed with reference to the year of filing the first writ petition, namely
WP NO.7012 of 1988. The fixation of pension and payment of arrears should be
done accordingly within a period of four months from today. The appellants are
entitled to adjust the monetary benefits which the employees would not have
received if they were to receive the pension." In the review petition's
decision in M. Ananchu Asari's case (supra) it was observed as follows:
contentions are raised on the merits, especially, in regard to the conclusion
of this Court that the process of absorption did not take place in 1975. We are
not inclined to rehear the arguments on merits. If the petitioners failed to
furnish the necessary material even during the pendency of appeal in this
Court, that is no ground to review the judgment. There is also nothing to be
clarified insofar as the operative part of the judgment is concerned. It is not
necessary for us to express any view on the question whether the Transport
Corporation employees who were erstwhile government servants retiring after
1.1.1988 would be eligible to get the pension in addition to the salary drawn
by them in the Corporation as per the Rules and GOs applicable to them. It is
the contention of the learned counsel for the respondent employees that the GOs
issued by the government themselves contemplated such payment and in fact those
who were parties to the earlier writ petitions were given that benefit. This
issue cannot legitimately form the subject matter of either review or
clarification." Stand of the appellants in these appeals is that the
aforesaid two decisions did not relate to the facts of the present case. On the
contrary, learned counsel for the respondents submitted that the issue is no
longer res integra in view of the aforesaid two judgments.
noted above, the two relevant GOs are Nos.212 and 378, so far as relevant, they
read as follows:
OF TAMIL (ABSTRACT) Pension:
of Madras Liberalised Pension Rules -
Extension to employees of Tamil Nadu State Transport Department orders issued.
DEPARTMENT G.O.Ms. No.212 DATED 28th MARCH 1974 G.O. Ms. No.537, Transport
Department, dated 3.7.1972 ORDER In the G.O. read above the Government has
approved the Special Rules for the Tamil Nadu State Transport Department
Operation Sub- Ordinate Service. According to Rule 12 of the said Rules, all the
members of the services are eligible for the benefits of gratuity and they will
be governed by the Special Gratuity Rules and will not be entitled to pension
or provident Fund benefits as applicable to the regular government servants.
The Government have since decided to extent the benefits of the Madras Liberalised
Pension Rules, 1960 to the workers of the Tamil Nadu State Transport Department
in lieu of Tamil Nadu State Transport Department Operation Subordinate
Retiring. In valid and compassionate Gratuity (Non-Pensionable Establishment)
The Government accordingly direct that the workers of
the Tamil Nadu State Transport Department be entitled to the Pension and
Provident Fund and the Family Pension benefits as applicable to the regular Government
servants under the Madras Liberalised Pension Rules, 1960 and the Madras
Government Servants Family Pension Rules, 1964.
This order shall take effect from 11.1.1974.
workers shall be given the option either to remain in the existing system or to
be governed by the Madras Liberalised Pension Scheme. The implementation of the
Madras Liberalised Pension Rules, 1960 and the Madras Government Servants
Family Pension Rules, 1964 shall be effected subjected to the following
employees borne on the Tamil Nadu State Transport Department Subordinate
Service who opt for the Madras Liberalised Pension benefits shall be governed
by the Madras Liberalised Pension Rules, 1960. For this purpose, their entire
service in the Tamil Nadu State Transport Department Operation Subordinate
Service will be reckoned towards pension, gratuity and all other benefits for
which they would have been entitled to under the rules. They will not be
eligible to get any Government contribution to Employees Provident Fund, 1952
now converted as Tamil Nadu Government Industrial Employees Provident Fund,
1969 and the amount of such contribution already credit to the account of the
employees will be resumed and credited back to the Government. The contribution
made towards the Employees Provident Fund, so far will be deemed as having been
contributed to General Provident Fund (Madras). They will have to continue to contribute to the General Provident
Fund (Tamil Nadu).
However, to ensure that all existing employees are given
the option to continue to be governed by the existing terms and conditions, if
for some reasons, they choose to do so, Government direct that all the
employees covered in paragraph 3 (a) (c) of this order will have the option to
request to be governed by the existing terms and conditions of service. This
option will be exercised on or before 30.6.1974. Those who do not exercise any
option shall automatically come under the Liberalised Pension Rules, 1960.
Option cannot be exercised after 30.6.1974 and option once exercised is final.
xxx xxxx xxxx (BY ORDER OF THE GOVERNOR) M.S. RAM SPECIAL
SECRETARY TO GOVERNMENT xxx xxxx xxxx "GOVERNMENT OF TAMIL NADU (ABSTRACT)
RULES PERMANENT ABSORPTION OF GOVERNMENT SERVANT UNDER STATE OWNED
CORPORATIONS/BOARDS/UNDERTAKINGS TERMINAL BENEFITS ORDERS ISSUED.
(FR.II) DEPARTMENT G.O.MS.No.378 Dated 18.4.1975.
G.O.Ms. No.1072, Finance, Dated 5.9.1964.
G.O.Ms. No.731, Industries (Special) Dated, 21.5.1974.
In the G.O. second read above certain terminal benefits relating to Pension,
Gratuity, Provident Fund, Earned Leave, Family Pension, etc., were granted to
Government servants permanently absorbed in the Tamil Nadu Small Industries
Government have decided to grant similar benefits to Government servant
permanently absorbed under all other public undertakings under the State
Government and pass the following orders in regard to the issues relating to
liabilities of Pension and Gratuity, Provident Fund, Earned Leave, Family
Pension commutation of leave to those opted to the service of the State owned
addition to pay in the public undertaking an optee will be entitled to
pension/gratuity earned by him in Government service prior to the such
absorption. If the qualifying service under Government is less than ten years,
Gratuity and Death cum Retirement Gratuity alone will be payable. They are
permitted to draw their pension/gratuity immediately on absorption in the
amount of subscription together with interest thereon, standing in the
Provident Fund Account of a Government Servant opting for service in the Public
Sector Undertaking may, if he so desires, be transferred to his new Provident
Fund Account under the undertaking provided the undertaking also agrees to such
a transfer. If, however, the Public Undertaking does not operate a Provident
Fund, the amount in question should be refunded to the subscriber. An officer
covered by a Government contributory Provident Fund will also be allowed, if he
so desires, to carry forward the corpus of the amount including Government
contributions to his new Provident Fund Account under the Public Sector
undertaking. Once such a transfer of Provident Fund balance has taken place,
the officer will be governed by the Provident Fund rules of the undertaking. As
per General Provident Fund (Tamil Nadu) Rules, the Provident Fund accumulation
shall continue to carry interest at the normal rate till final payment or
transfer of provident fund accumulation.
the optee for permanent absorption in the Public Sector undertaking will cease
to be a Government Servant, the Governments liability for family pension will
servant will exercise an option within six months of his absorption for either
of the alternatives indicated below:-
monthly pension and Death-cum-Retirement Gratuity already worked out under the
usual Government arrangements. OR
gratuity and a lump sum amount in lieu of pension worked out with reference to
commutation tables obtaining on the date from which pension will be admissible
and payable under the option orders.
liberalization of pension rules decided upon by Government after the permanent
absorption of a Government servant in a public enterprise would not be extended
In cases where
an officer at the time of absorption has less than 10 years service and is not
entitled to pension the question of proportionate pension will not arise, as he
will be eligible only to the proportionate service gratuity in lieu of pension
and Death-cum-Retirement Gratuity based on length of service.
ORDER OF THE GOVERNOR) S. GUHAN SECRETARY TO GOVERNMENT." For resolving of
the controversy, GO.1028 may also be referred to. On a reading of the GOs the
crucial expressions appear to be pension/gratuity "earned by him"
(underlined for emphasis) and the period stipulated is 10 years. This is
indicative of the fact that the position is relatable to government service and
the qualifying service is 10 years in terms of the Pension Rules. If the
respondents' stand is accepted it would mean that even if no benefit under the
government scheme is available yet the pensionary benefits have to be given. It
is to be further noted that G.O. No.212 refers to G.O. 537. From the factual
details available it appears that the respondents preferred to remain under the
Provident Fund Scheme. In the affidavits filed by the respondents in respect of
the stand taken as to exercise of option, there is no specific denial. On the
contrary, it is stated that the defendant does not remember whether the option
counsel for the respondents has highlighted about the beneficial nature of the
provisions. It is to be noted that the Tribunal proceeded on the basis as if
G.O.378 superseded G.O 212. G.O. 378 refers to exercise of the option by the
employees who wanted to be covered by the scheme. If really G.O.378 was
intended to supersede G.O.212, the least that could have been done is to refer
to G.O.212 which is admittedly not the position. G.O.378 nowhere refers to any
exercise of option under G.O.212. It is highlighted by learned counsel for the
respondents and the employees who have intervened in the proceedings that when
the Transport Corporations were formed option was asked for. It is too well
known that in the Corporation no pensionary benefits were there. So the
question of asking for any option did not arise and in that background the
employees had opted for provident fund scheme. After the cut off date i.e.
1.4.1982 the basis of option changed and the earlier basis was also changed.
controversy as noted above lies within a narrow compass i.e. whether G.O.
No.378 in effect superseded G.O. No.212. Bare reading of the two GOs do not
certainly indicate that to be the position. Additionally, if the stand of the
respondents is accepted the expression "earned by him" becomes
superfluous. That can never be the intention. It would be also relevant to
quote a portion of GO MS No.1028 dated 23.9.1985 which has also relevance.
OF TAMIL NADU
PUBLIC SECTOR UNDERTAKINGS PERMANENT ABSORPITON OF GOVERNMENT SERVANT UNDER
STATE OWNED CORPORATIONS/BOARDS/ UNDERTAKINGS TERMINAL BENEFITS ORDERS ISSUED.
DEAPRTMENT G.O. MS. NO.1028 DATED 23.9.1985 KURODHANA PURATTAST-7
G.O. Ms. No.378, Finance (FR.11) Department, dated
G.O. Ms. No.284, Finance Department dated 31.3.1980.
From the Finance (Pen.) Department Lr. No.74399/ Pen./83-8
dated 5.6.1985 addressed to the Accountant General Tamil Nadu.
addition to pay in the Public Undertakings, an optee will be entitled to
pension/gratuity earned by him in government service prior to such absorption
as per Madras Liberalisd Pension Rules 1960. They are permitted to draw their
pension/gratuity from the date of their permanent absorption in the Transport
Corporations. The arrears of monthly pension from the date of their permanent
absorption till date or the lumpsum amount based on the commuted value of
pension according to their option shall be paid immediately in respect of
retired/legal heirs of the deceased employees. Some of the retired employees
were sanctioned and paid pension only from the dates of the actual retirement
from the Transport Corporations on attaining the age of superannuation as per
the orders issued in the G.O. second read above. In respect of such cases the
arrears of monthly pension from the date of absorption to the date of
retirement of lumpsum amount based on the commuted value after adjusting the
monthly pension already received till date according to their option shall be
paid to them.
respect of the employees who expired on or after their permanent absorption the
legal heirs would have been paid only Death-cum- Retirement Gratuity. In such
cases the lumpsum amount based on the commuted value will be paid to the legal
heirs, since the payment of monthly pension/ family pension does not arise.
WHO ARE IN SERVICE IN STATE TRANSPORT UNDERTAKINGS
employees opt for lump sum amount based on the commuted value of pension, the
entire amount of pension and gratuity will be paid to them in the form of
National Savings Certificate. If they opt for monthly pension, the arrears of
monthly pension from the date of absorption to till date and gratuity will be
paid to them in the form of National Savings Certificate and the current
monthly pension will be paid every month:
The expenditure towards the settlement of Terminal
Benefits referred to in para 3 above will be initially met by the respective
Transport Corporations and subsequently adjusted against the outstanding
Government loan to the Corporations.
Since the optee for permanent absorption in the State
Transport Undertakings will cease to be a Government servant the Government
liability for Family Pension will cease.
erstwhile Tamil Nadu State Transport Department employees absorbed permanently
in the State Transport Undertakings should be allowed pension increase also in
their pension besides Dearness Allowance, Additional Dearness Allowance as
applicable from time to time to Government pensioners who retired on that date
as per the orders issued in the letter third read above.
ORDER OF THE GOVERNOR) A.K. VENKAT SUBRAMANIAN COMMISSIONER & SECRETARY TO
GOVERNMENT" Therefore, the stand of the State Government appears to be
correct. The view expressed by the Tribunal is indefensible and is set aside.
The appeals are allowed but with no orders as to costs.