Union of India & Ors Vs. G.
Vasudevan Pillay & Ors  INSC 649 (8 December 1994)
HANSARIA B.L. (J) HANSARIA B.L. (J) KULDIP
CITATION: 1995 SCC (2) 32 JT 1995 (1) 417
1995 SCALE (1)9
conglomeration of appeals (some of which arise because of leave already granted
and some come into existence because of leave being granted) require, us to
decide three questions:
(1) Whether the decision of the Union of
India not to allow Dearness Relief (D.R.) on pension to the ex-serviceman on
their re-employment in a civil post is in accordance with law or not;
(2) whether denial of D.R. on family pension
on employment of dependents like widows of the ex-servicemen is justified or
not and (3) reduction of pay equivalent to enhanced pension of those
ex-servicemen who were holding civil posts on 01.01.86, following their
re-employment, is permissible or not.
would examine these question seriatim, Disallowing of D. R. on pension on
answer the above question involved in some of the appeals, the background
leading to the aforesaid decision may be briefly noted. To start with there was
no provision for payment of D.R. to the pensioners. Various representations
were made to the Third Pay Commission seeking some recommendations in this
regard for protecting the pension of the Government employees from erosion on
ac- count of possible increases in the cost of living in future.
The Commission considered this matter and
also the question regarding the manner in which some relief could be provided
to the future pensioners. After having noted the various suggestions which the
Commission received in reply to its questionnaire, it recommended that all
future pensioners, irrespective of the amount of pension drawn by them should
be given relief @ 5% of their pension subject to a minimum of Rs. 5/per mensem
and maximum of Rs. 25/-. The Commission further recommended that the relief
should be given as and when there is a 16 point rise in the 12-monthly average of
the All India Working Class Consumer Price Index. This recommendation of the
Commission was accepted by the Central Government vide its Office Memorandum of
even no. dated 6th April, 1974, making the relief available to those employees
belonging to Class II, III and IV, who retired from Services prior to 01.01.73,
as well as those who retired afterwards.
decision was however, taken subsequently not to pay D.R. to re-employed
pensioners. Ilk was made applicable to those ex-servicemen who had come to be
re-employed in civil posts. Various writ petitions and Original Applications
were filed in different legal for a of the country, which came to be decided
either by holding the validity of the 420 decision or by taking a contrary
view. The parties who lost have preferred these appeals.
learned Additional Solicitor General appearing for the Union of India submits
that the decision merits our ac- ceptance because of what has been stated in
clause (ii) of Rule 55-A of Central Civil Services (Pension) Rule, 1972, as
amended in 1991. We are, however, of the view that the decision cannot be so
supported for the reason that the aforesaid Rules have application to the
persons who were members of Central Civil Services. The ex-serviceman having
apparently not been members of such Services, what has been provided in Rule 55
A(ii) cannot be invoked to deny D.R. on pension, family pension to the
ex-serviceman on their re- employment.
the aforesaid been the only provision pressed into service to deny the DR. to
the ex-serviceman, we would have had no difficulty in striking down the
decision in as much as the ex-servicemen having been alloyed pension and D.R.
on it in accordance with the conditions of service governing defence personnel,
the provision contained in the aforesaid rule governing service condition of
all together different class of servicemen could not have impinged on their
right to get DR. on the pension. Learned Additional Solicitor General, however,
advances an alternative submission and the same is that there are even army
instructions which, read with Office Memorandum of Ministry of Finance, will
show that Dearness Relief of pension cannot be paid even to ex-servicemen on
their re-employment. As this point could not be brought home to us well when
the cases were heard, as relevant army instructions had not been brought on
record, we, while reserving the judgment after close of hearing allowed filing
of written submissions, which were done subsequently alongwith which large
number of documents were filed to establish the point urged in the Court.
perusal of the documents shows that the Office Memorandum dated 1.8.1975 of the
Ministry of Finance, De- partment of Expenditure, which stated that a
re-employed Central Government pensioner is not eligible to draw any relief
during the period of re-employment, was made applicable by the Ministry of
Defence vide letter of even number dated 28.10.1975 to Armed Forces pensioners
These documents are pages 17 and 18 of the
written submission, in which it has also been stated that with formation of the
Department of Pension and Pensioners' Welfare under Ministry of Personnel,
Public Grievances and Pension, all orders issued by the Ministry of Finance
were made applicable to Armed Forces Pensioners as well. A reference has then
been made to Office Memorandum dated 22.4.1987 on the subject of grant of
Dearness Relief to pensioners on the recommendations of the Fourth Central Com-
mission, sub-para-v of Annexure-1 to which states that Dearness Relief will be
suspended when the Central Government pensioner is re-employed in the
department/office of the Central Government.
aforesaid shows that de hors what has been laid down in clause (ii) of Rule
55-A of the aforesaid Pension Rules, there are materials on records to show
that any person, including ex-serviceman, would not be entitled to Dearness
Relief on pension on his reemployment to any 421 department/office of the
has, however, been strenuously contended by learned counsel appearing for the
re-employed ex-servicemen that pension being a right (and not a bounty)
available to a retired employee as held in Nakara, AIR 1983 SC 130, and IDR.
being a part of pension, right to receive the same could not have been infringed
merely because the incumbent sought re-employment to take care of the hardship
which he might have otherwise faced after retirement. To sustain the
submission, strength is sought to be derived from the decision of the Kerala
High Court in Narayanan v. Union of India 1994 (1) KLT 897, in which a view has
been taken that the DR became an integral part of pension, because of which it
could not have been discontinued on re-employment. As against this, the view of
the Delhi High Court in Civil Writ NO. 1699 of 1992 (disposed of on 23.2.1993)
is that the DR is different from pension. For the disposal of the present cases
it is not necessary to express any opinion on this aspect of the matter
inasmuch as, according to us, even if Dearness Relief be an integral part of
pension, we do not find any legal inhibition in disallowing the same in cases
of those pensioners who get themselves re-employed after retirement. In our
view this category of pensioners can rightfully be treated differently from
those who do not get re-employed; and in the case of the re-employed pensioners
it would be permissible in law to deny DR. on pension inasmuch as the salary to
be paid to them on re-employment takes care of erosion in the value of the
money because of rise in prices, which lay at the back of grant of D.R., as
they get Dearness Allowance on their pay which allowance is not available to
those who do not get re-employed.
therefore, hold that the ex-servicemen were rightly debarred from Dearness
Relief on their pensions after they got themselves re-employed to any civil
post under the Government of India.
`Denial of DR on family pension.
some of the cases, we are concerned with the denial of Dearness Relief on
family pension on employment of de- pendents like widows of the ex-servicemen.
This decision has to be sustained in view of what has been stated above
regarding denial of DR. on pension on reemployment inasmuch as the official
documents referred on that point also mention about denial of D.R. on family
pension on employment. The rationale of this decision is getting of Dearness
Allowance by the dependents on their pay, which is drawn following employment,
because of which Dearness Relief on family pension can justly be denied, as has
Reduction of enhanced pension from pay of
those ex-servicemen who were holding civil posts on 01.01.86 following their
aforesaid reduction, which is the subject matter of some appeals, is the fall
out of Office Memorandum dated 11.9.87 according to which the pay of the
ex-servicemen who were in employment in a civil post as on 01.01.86 following
their re-employment, is required to be reduced by an amount equivalent to the
enhanced pension made available pursuant to the report of the Fourth Pay Commission.
pound of attack is that the aforesaid decision violates Articles 14 and 16 of
the Constitution inasmuch as there is no rational basis for classifying the
employees for the aforesaid purpose on the basis of their being in employment on
01.01.86. This submission has been advanced because the reduction of the
aforesaid nature has not been made in respect of those who have been in
employment since 01.01.86. The additional affidavit filed on behalf of
respondent no. 1 in SLP(C) No. 17456/91 on 25.8.94 contains some names of those
who were re-employed after 01.01.86 and are being paid both the revised pay and
This factual position has been admitted in
the aforesaid written submissions filed on behalf of the Union of India inasmuch
as it has been stated in page 9 that the pensioners who are re-employed after 0
1. 0 1. 86 enjoy the benefit of revised pay and also revised pension w.e.f
has been placed in support of aforesaid submission on a two Judge Bench
decision of this Court, to which one of us (Kuldip Singh, J.) was a party. That
decision was in the case of T.S.Thiruvengadam v. Secretary to Government of
India, 1993 (2) SCC 174.
The facts of that case are, however,
different inasmuch as there the Memorandum dated June 16, 1967 stating that
revised pensionary benefits would be made available only to those Central
Government servants who have been absorbed in public sector undertakings after
mat doe was not found to be constitutional because the very object of bringing
to the existence the retired terms and conditions by the Memorandum was to
protect the pensionary benefits which the Central Government servants had
earned before their absorption into the public sector undertakings. It was,
therefore, held that restricting the applicability of the revised Memorandum
only to those who are absorbed after coming into force of the same would not
only defeat the very object and purpose of the Memorandum but would be contrary
to fair play and justice also.
the aforesaid decision being of no aid in the present cases, we find no logic
and basis for classifying the reemployment persons on the basis of their being
on employment on 01.01.86. Indeed, no justification has been canvassed before
us. The decision which held the field before the impugned Memorandum in not
taking note of pension while fixing pay of the ex-servicemen on re-employment,
which was based on good reasons, had no good reason for its reversal, as
enhanced pension was not confined to those who were in employment on 01.01.86.
The impugned decision is, therefore, arbitrary and is hit by Articles 14 and 16
of the Constitution. We, therefore, declare the same as void.
conclusions on the three questions noted in the opening paragraph are that
denial of Dearness Relief on pension/ family pension in cases of those
ex-servicemen who got re-employment or whose dependent got employment is legal
and just. The decision to reduce the enhanced pension from pay of those
ex-servicemen only who were holding civil posts on 01.01.86 following their
re-employment is, however, unconstitutional.
appeals are disposed of accordingly. I.A. Nos. 16, 30-46 in appeals (arising
out of S.L.P (C) Nos. 1585-95/94) stand disposed of No order as to costs.