State of
Rajasthan & ANR Vs. Prem Raj [1997] INSC
165 (14 February 1997)
S.C.
AGRAWAL, G.B. PATTANAIK G.B.
PATTANAIK, J.
ACT:
HEAD NOTE:
These
two appeals involve a common question of law and as such were heard together
and are being disposed of by the common judgment. The respondent in both the
appeals are pre- 1979 retiree, the respondent in Civil Appeal No. 5450 of 1994
having superannuated on 14.11.1969 and the respondent in the other appeal
having superannuated before December 1968. On superannuation, their pension had
been computed in accordance with Rule 256 of the Rajasthan Service Rules, 1951,
(hereinafter referred to as `the Rules') whereunder Dearness Allowance received
by them while in service had not been taken into account for computation in the
amount of pension. On 18th March, 1971 the Governor of Rajasthan in exercise of
powers conferred by proviso to Article 309 of the Constitution amended the
Rules giving it retrospective effect w.e.f. 1.4.1970, while was incerted as
Rule 250- C(1)(a). The said provision stipulates that in case of Government
Servants retiring from service on or after 1.4.1970 the term
"emoluments" used for the purpose of pension, service gratuity and
death-cum-retirement gratuity shall mean the `pay' as defined in Rule 7(24) and
Dearness pay appropriate to pay, if any, which the officer was receiving
immediately before his retirement. The aforesaid provision is extracted herein
below in extenso :
"Notwithstanding
the provisions contained in rule 250, 250-A, 250-B in case of Government
Servants retiring from service on or after 1.4.1970, the term `emoluments' used
for purposes of pension, service gratuity and death-cum- retirement gratuity
shall mean the "pay" as defined in rule 7(24) and dearness pay
appropriate to pay, if any, which the officer was receiving immediately before
his retirement, provided that - (2) The Special Pay, if any, granted for
performance of additional duties or a post in addition to duties of his own
post shall not be taken into account for the purpose of this rule." By the
said Notification dated 18th
March, 1971 Rule 250-A
(1) was also amended giving it retrospective effect from w.e.f. 1.4.1970, which
is extracted herein below in extenso:
"Notwithstanding
the provisions contained in rule 256, in case of a Government servant retiring
from service on or after 1.4.70 the amount of superannuation, retiring, invalid
and compensation gratuity and the pension shall be admissible as follows :
-----------------------------------
Completed six Scale of Maximum monthly periods Gratuity / Pension of qualifying
Pension (in Rs. service per annum) ----------------------------------- 1 2 3
----------------------------------- 60 30/80th " " 8100
----------------------------------- By Notification dated 2.12.1974 giving it
retrospective effect w.e.f. 31.10.1974 Rule 256-B was also amended which
extracted herein below in extenso:
"Notwithstanding
the provision contained in Rule 256-A, in respect of a Government Servant
retiring on or after 31.10.1974 the amount of superannuation retiring invalid
and compensation gratuity and pension admissible shall be as follows:-
----------------------------------- Completed six Scale of Maximum monthly
Gratuity Pension periods of pension (in Rs.
per
qualifying annum) ----------------------------------- 1 2 3 66 33/80th "
" 12000.00 ----------------------------------- The effect of the aforesaid
amendment was that while the maximum pension in respect of Government Servants
retiring from service on or after 1.4.1970 was 8,100, but those who retired on
or after 31.10.1974 it became 12,000 and while in case of the former pension
was to be computed on 30/80th but in case of later it became 33/80th. By
Notification dated 2.12.74 Rule 250-C(3) was also amended providing therein
that in case of Government servants retiring on or after 31.10.1974 the term
"emoluments" used for the purpose of pension, service gratuity and
death-cum- retirement gratuity shall mean pay as defined in Rule 7(24) and
shall include dearness allowance, dearness pay (where admissible) and ad-hoc reliefs
admissible on 31.12.1972. By Notification dated 21.1.1980, the Government of Rajashtan
provided a revised formula for calculation of pension on slab basis in respect
of Government Servants retiring on or after 31st March, 1979. By yet another Notification dated September 2, 1985, the Government of Rajasthan
extended the benefit of revised pension formula to pre-31.3.1979 pensioners.
This benefit was extended to pre 31.3.1979 retir ees possibly because of the
decision of this Court in D.S.
respondent
in the first case approached the Rajasthan High Court in the year 1989 which
was registered as Civil Writ Petition No. 575 of 1989 claiming the benefits of
the three amended provisions referred to earlier and contended that the amended
provisions so far as they provided a cut-off date for its application are
arbitrary. It may be stated that the Circular of September 2, 1985 by which
revised pension formula was extended to pre-31.3.1979 pensioners was not
challenged and on the other hand it was prayed that after determination of the
emoluments in accordance with the amended provisions of 1970 and 1974, the
relief may be granted in accordance with the Circular dated September 2, 1985.
The Division Bench of the rajasthan High Court following the decision of this
Court in Nakara's case referred to supra struck down the cut-off date of
1.4.1970 in Rule 256-A as well as struck down the cut-off date of 1.4.1973 in
Rule 250-C and also struck down the cut-off date provided under sub-rule 3 of
Rule 250-C. It also held that the computation of pension as per Rule 256-B
should be made applicable to all Government Servants irrespective of date of
retirement and the provision making it applicable to those Government servants
who have retired on or after 31.10.1974 is invalid. The High Court further
directed that the pension of the respondent should be refixed as per
Notification dated 2.9.1985 after determining the emoluments of the respondent
under the amended provisions.
In the
second case, the writ petition was heard by a learned single Judge who allowed
the same on identical grounds and an appeal against the same to the Division
Bench by the State of Rajasthan was dismissed and thus the appeal
by special leave therein.
Mr. Aruneshwar
Gupta, the learned counsel appearing for the appellant contended that the
decision of this Court in Nakara's case has been watered down by the subsequent
decisions in Krishena Kumar's case, 1990 (4) SCC 207, Indian Ex-Services League
and others vs. Union of India. 1991 (2) SCC 104, State of West Bengal and others vs. Ratan Behari Dev and
others, 1993(4) SCC 62. and in State of Rajasthan vs. Sevanivatra Karamchari Hitakari
Samiti, 1995 (2) SCC 117 and the law as it stands now it is permissible for the
State Government to provide different modes of computation of pension in
respect of Government Servants retiring on different dates and it cannot be
challenged on the ground of discrimination so long as the cut-off date thus
provided has a reasonable nexus with the change in the mode of the computation.
The learned counsel went to the extent of urging that the principles laid down
by this Court in Nakara's case is no longer being followed in recent cases and,
therefore, the High Court was in error in allowing the Writ Petition following
the decision of this Court in Nakara's case. Mr. Gupta also urged that the
respondent in each of the appeals having superannuated in 1969 and 1968
respectively and having not challenged the different amended provisions which
came into existence between 1970 and 1974 and having approached the High Court
in the year 1989 long 19 years after the first amended provision was made in
1970, the High Court should not have entertained the writ petition at all. The
learned counsel lastly urged that in any of the matter the Notification of
September 2, 1985 having provided for a revised pension formula to
pre-31.3.1979 pensioners which includes the respondents case and the said
Notification having indicated the mode of computation of pension and as well as
having defined the expression `emoluments' and without challenging the said
Notification the respondent is not entitled to the relief as granted by the
High Court.
Mr. Srivastava,
the learned counsel for the respondent, on the other hand, contended that the
decision of this Court in Nakara's case has not been over-ruled and what has
been indicated in the subsequent cases is that if the Government provides a new
scheme and make the said scheme applicable from a particular date then the
retirees prior to that date will not be entitled to the benefit under the new
scheme.
But if
a pension scheme which was in vogue is liberalised from time to time then all
pensioners would be entitled to the benefit of such liberalised rules and that
is what has been granted by the High Court in the present case. The learned
counsel fairly conceded that the Notification of September 2, 1985 providing for a liberalisation of pension by introduction
of slab system even in respect of pre- 31.3.1979 retirees has not been assailed
by the respondent.
Having
examined the rival contentions and on a closer scrutiny of the Notification of
the Government of Rajasthan dated September 2, 1985 we are of the considered
opinion that the High Court committed gross error in examining the validity of
the earlier amended provisions and striking down the same and granting the
relief to respondent without striking down the Notification dated September 2,
1985 or at least para 3 and 5 thereof. In this view of the matter it would not
be necessary to examine the bigger issue raised by Mr. Gupta as to whether the
decision of this Court in Nakara's case is really not being followed in the
later decision, though we would briefly notice the extent to which the Nakara's
decision has been explained in the later decision.
In
D.S. Nakara's case [1983 2 SCR 165] the memorandum issued by the Government of
India dated May 25, 1979 and September 23, 1979 liberalising the form for
computation of pension in respect of employees governed by the Central Civil
Services (Pension) Rules. 1973 who retired on or after March 31, 1979 was challenged to be arbitrary and violative
of Article 14. This Court came to conclusion that when the State considered it
necessary to liberalise the Pension Scheme in order to argumenting the social
security in old age to Government servants, it could not grant benefit of liberalisation
only to those who retired subsequent to the specified date and deny the same to
those who had retired prior to that date. The division which classified the
pensioners into two clauses on the basis of the specified date was devoid of
any rational principle and was both arbitrary and unprincipled being unrelated
to the object sought to be achieved by grant of liberalised pension and the
guarantee of equal treatment contained in Article 14 was violated inasmuch as
the pension rules which were statutory in character meted out differential and
discriminatory treatment to equals in the matter of computation of pension from
the dates specified in the impugned memoranda.
This
Constitution Bench decision was considered by another Constitution Bench in Krishena
Kumar's case [1990 (4) SCC 207]. In the said case prior to 1957 the only scheme
for retirement benefits in the Railways was the Provident Fund Scheme. The same
scheme was replaced in the year 1957 by a pension scheme. Thus all the
employees who were in service prior to the introduction of pension scheme were
given option either to retain the Provident Funds benefits or to switch over to
pensionary benefits on condition that the contribution made by the Railways to
the Provident accounts would revert to the Railways on exercise of option.
The
employees who did not opt for pension scheme even though had ample opportunity
to opt for the same, came forward with a claim that they should be given the
benefits of pensionary scheme following the principle of Nakara's case. This
Court held that the pension scheme and the provident fund scheme are
structurally different and applying the principles of Nakara's case, it cannot
be held that the pension retirees and the provident fund retirees form a
homogeneous class.
The
Court also further held that the rules governing the provident fund are
entirely different from rules governing pension scheme and therefore, it would
not be reasonable to argue that the rules applicable to the pension retirees
was also equally applicable to provident fund retirees. It was noticed by the
Court that in Nakara's case the provident fund retirees were not in mind before
the Court and only the pension retirees were treated as a homogeneous class.
The Court further held that there would be no discrimination in treating the
provident fund retirees differently from the pension retirees.
In the
case of Indian Ex-Services League & Ors. vs. Union of India, 1991 (2) SCC
104, in yet another Constitution Bench case the liberalised pension scheme and
fixation of cut-off date for applicability of the same came up for
consideration before the Court. The petitioners therein claimed "one rank
one pension" for all retirees in the armed forces irrespective of the date
of retirement by application of Nakara's case. The Court held that the decision
in Nakara's case has to be read as one of limited application and its ambit
cannot be enlarged to cover all claims made by the pension retirees or a demand
for an identical amount of pension to every retiree from the same rank
irrespective of the date of retirement, even though the reckonable emoluments
for the purpose of computation of their pension be different. In the aforesaid
case, consequent upon the decision of this Court in Nakara's case a
Notification was issued on 3rd December, 1983 by the Government of India for recomputing the revised pension of
pre-April 1, 1971 retirees according to liberalised pension scheme. The recomputation
as made according to the liberalised pension scheme giving the same benefit to
all retirees irrespective of their date of retirement. But the petitioners
contended that the ratio of Nakara case is that all retirees who held the same
rank irrespective of the date of retirement must get the same amount of
pension. This Court rejected the said contention. On reading the memorandum of
the Government of India the Court held that the benefit of liberalised pension
scheme was made applicable even to pre-April 1, 1979 retirees of the armed
forces and the computation according to the liberalised formula for them was
done by Government order dated 22nd November, 1983 and December 3, 1983. In
other words, what was held by this Court in the Indian Ex-Services League's case
that after introduction of the liberalisation scheme, from a specified date,
even the retirees earlier to the same date would get the benefit of the liberalisation
scheme but not in the same manner and to the same extent which persons in
service and retiring after the date would get.
In
State of West Bengal and Others vs. Ratan Behari Dev and Others, 1993 (4) SCC
62, this Court considered the question whether in providing a pension scheme
the State could fix up a particular date and make it applicable to those who
retired on or after that date. The Court distinguished the Nakara's case by
holding that in Nakara's case an artificial date had been specified classifying
the retirees governed by the same rules and similarly situated into two
different classes depriving one such class of the benefit of the liberalised
pension rules and that was held to be bad. Following the decision of the Court
in Krishena Kumar's case it was held that the State can specify a date with
effect from which the Regulations framed or amended conferred the pensionary
benefits shall come into force but the only condition is that the State cannot
pick a date out of its hat and the date has to be prescribed in a reasonable
manner having regard to all the facts and circumstances.
Hitkari
Samiti, 1995 (2) SCC 117, the provisions contained in Rule 268-H of Rajasthan
Service Rules came up for consideration as to whether the aforesaid provisions
restructuring the rights of Government servants in service on 29.2.1964 can be
held to be violative of Article 14. The Court applied the principle in Krishena
Kumar's case and Indian Ex-Services League's case and held that the fixation of
29.2.1964 as the cut-off date with effect from which the new liberalised
pension scheme in Chapter XXIII-A was introduced cannot be said to be arbitrary
or violative of Article 14 of the Constitution. As has been stated earlier for
deciding the present controversy it is not necessary for us to further delve
into the question as to the extent to which the decision of this Court in Nakara's
case has been followed or explained. But suffice it to say that the contention
of Mr. Gupta, the learned counsel for the appellant that the decision of this
Court in Nakara's case has been given a complete go-by cannot be sustained.
The
real question that arises for consideration in the present two appeals is
whether it is at all permissible to examine the validity of the earlier
Notification of the Government issued in the years 1970 and 1974 without
considering the effect of Notification dated September 2, 1985 by which
Notification even the pre-March 31, 1979 retirees were extended the benefit of
revised pension formula. It appears that State of Rajasthan had liberalised the
pension scheme and introduced the revised pension formula by Notification dated
21.1.1980 for calculation of pension on slab basis in respect of Government
Servants retiring on or after 31st March, 1979. By September 2, 1985 Notification the Government was pleased to order that the
benefit of the revised formula for calculation of pension on slab basis would
be extended to all pensioners provided they were in receipt of pension as on
1.4.1979 under Rajasthan Service Rules as amended from time to time. In other
words, the principle of Nakara's case was made applicable and the Notification
dated September 2, 1985 was issued. Paragraph 3(1) of
aforesaid Notification dated September 2, 1985
stipulated that the last emolument immediately preceding the date of retirement
may be taken into account for the purpose of calculation of revised pension
wherever the average emoluments were earlier computed on the basis of 36 months
emoluments. the last emolument for this purpose shall be as per rules in force
at the time of retirement of the respective Government servants. Paragraph 3
provided the mode of computation of the pension of such pre-March 31, 1979
retirees. Paragraph 4 mentions the classes of pensioners to whom the order will
not be applicable.
Paragraph
5 provides an ad-hoc formula developed on certain assumptions and a ready reckoner
saying the rate of existing pension and revised pension was annexed. It further
provides that each pensioner would exercise an option as to whether he would
receive the revised pension on the ad-hoc formula or with reference to the
actual calculation based on service records and the option once exercised would
be final. The ad-hoc formula was devised as it was thought that recomputation
of pension on the basis of actual emoluments which a pensioner was drawing and
qualifying service being a time consuming process and considerable time may be
necessary for locating the old records which may not be readily available.
Thus, it would appear, by the Notification dated September 2, 1985, the Government of Rajasthan also extended the benefit of
the revised pension formula on slab basis to pre-March 31, 1979 retirees and we
see no infirmity with the said Notification. The High Court in our considered
opinion without noticing the aforesaid Notification and without examining the
same unnecessarily examined the earlier liberalisation orders and erroneously
struck down the same. The Notification dated September 2, 1985 not having been
challenged and the High Court not having quashed the same, the pre-March 31,
1979 retirees like the respondents in both the appeals would be governed by the
same and depending upon the question whether they have exercised their option
to get the revised pension on the basis of ad-hoc formula or to be computed on
the basis of the last emoluments drawn and the number of years of service
therein, the computation of pension has to be done.
The
September 2, 1985 Notification in the present case is somewhat similar to the
Notification which were for consideration by this Court in Indian Ex-Services
League's case referred to earlier. In this view of the matter the impugned
judgment of the High Court cannot be sustained and we accordingly set aside the
same. These appeals are allowed and the Writ Petitions filed by the respondents
stands dismissed but in the circumstances there will be no order as to costs.
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