Petroleum Corporation Ltd. & ANR Vs. Balakrishnan Nambiar  INSC 290 (20 August 1999)
V. Manohar., M. Jagannadha Rao. Mrs. Sujata V. Manohar, J.
respondent retired from the Bhrmah Shell Oil Storage and Distribution Company
Ltd. on superannuation with effect from 1.2.1975. At the date of his retirement
he was in the managerial cadre of the Company.
retirement, the respondent became entitled to a pension of Rs. 1317/- per
month. He was entitled to commute 1/3rd of this pension amounting to Rs. 439/-,
which he did. As a result, the respondent received on his retirement a monthly
pension of Rs. 878/-.
January, 1976 the Burmah Shell (Acquisition of Undertaking in India) Act, 1976 was passed pursuant to
which the right, title and interest and liabilities of Burmah Shall in relation
to its undertakings in India came to be vested in the
appellant-company. Thereafter the appellant-company voluntarily increased the
pension payable to the retired employees. As of 1.4.1993, the pension of the
respondent had been voluntarily increased by the appellant-company from Rs.
878/- to Rs. 1278/- per month.
30th of June, 1993, the appellant-company decided voluntarily to give to its
retired employees an increase of 56.03% on their existing pension. In the
meanwhile, in 1989 the Bharat Petroleum Corporation Ex-employees Association
representing the pensioners in the clerical staff category, had filed a writ
petition in this Court claiming that such of the pensioners who had commuted
portion of their pension and who had lived for more than 15 years after the
commutation, should be given the benefit of restoration of commuted pension.
This relief was granted by this Court by its order dated 17.8.1993. The
decision is reported as Bharat Petroleum Corpn. Ltd. Ex-Employees Association
and Ors. v. Chairman and Managing Director Bharat Petroleum Corporation ltd., Bombay and Ors. ( 4 SCC 37).
Although this judgment dealt with the clerical cadre, the appellant-corporation
decided to extend the benefit of this judgment also to the managerial cadre. As
a result, the respondent was given monthly pension calculated as follows:- As
on 1.4.1993: Pension Rs. 1278+Rs.720/- (56.03% of Rs. 1278/-) + 439 (commuted
pension which was restored in view of the above decision of this court).
: Rs. 1717/- The pension was calculated in this manner for all employees.
respondent, however, contends that the increase of 56.03% which was given with
effect from 1.7.1993, should be given on the pension of Rs.1278/- + the
commuted pension of Rs. 439/-. As a result, the 56.03% increase would come to Rs.
964/-, and the respondent should get a total pension of Rs. 2684/- per month.
High Court has granted the relief claimed by the respondent. Hence the present
appeal has been filed by the appellant.
appellants have submitted that the decision to give a voluntary increase of
56.03% on existing pension was taken on 30th of June, 1993, much prior to the
decision of this Court in Bharat Petroleum Corpn. Ltd. Ex-Employees Association
and Ors. v. Chairman and managing Director Bharat Petroleum Corporation Ltd., Bombay and Ors. (Supra) which was
delivered only on 17.8.1993. When the appellant took the decision to give an
increase of 56.03%, they had in mind only the existing pension which was being
paid to its employees. The financial burden on the appellants was calculated on
the basis of the increase of 56.03% being given on the then existing pension.
The decision was purely voluntary and there was no legal obligation to give
such an increase. Since the decision was to calculate the percentage of
increase only on the then existing pension, they have correctly implemented
this decision by calculating 56.03% increase on the existing pension.
they have also added to this figure the commuted value of the pension as per
the subsequent decision of this Court. Therefore, the respondent does not have
any right to claim an increase of 56.03% on the existing pension plus the
commuted value of pension, since this was not the decision taken by the
find much force in this contention. Clearly, the increase which was given by
the appellant-company was a purely voluntary increase. The percentage of
increase was on the then existing pension on the date when the decision was
taken. On the date of the decision, the existing pension was the pension as
commuted. It is true that under the decision of this Court set out earlier, the
benefit of restoration of commuted portion of the pension has been given with
effect from 1.4.1993. However, the decision which was taken prior to the
judgment of this Court was to give the increase at the rate of 56.03% on the
then existing pension. It was not contemplated at that time, that the commuted
portion of the pension would also be retrospectively added to the pension by
virtue a judgment which was to be delivered in further. Since the increase was
purely voluntary, the decision is required to be implemented in the manner in
which it was contemplated to be implemented.
writ petition, the respondent made a bare averment to the effect that not
taking into account the commuted value of the pension for the purpose of
calculating the increase would violate Article 14 of the Constitution. There
is, however, no factual foundation laid either in the petition or thereafter
which would support the plea under Article 14. The pension of all persons has
been calculated in the manner in which it was contemplated under the decision
of 30th of June, 1993. The appellants have pointed out that the entire clerical
cadre as also the managerial cadre have accepted the calculation so made and it
is only the respondent who is objecting to such a calculation. The appellants
have also drawn our attention to an old decision of this Court in The State of Bombay
and Anr. v. F.N. Balsara (1951 SCR 682 at page 708-709) where this court has
observed, inter alia, that under Article 14 a reasonable classification is
permissible. In the present case, if at all any distinction is made between
different categories of pensioners the pensioners who have commuted their
pension and who have subsequently got the benefit of the judgment of this Court
(supra) can be legitimately considered as a separate class. Reliance was also
placed by the appellants on the decision in Ameerunnissa Begum and Ors. V. Mahboob
Begum and Ors. (1953 SCR 404 at 414). In the present case, in the absence of
any factual basis for the plea, it is not possible to consider the application
of Article 14 to the present case.
appellants have also submitted that calculating the increase in pension in the
manner in which the respondent claims, would impose a substantial additional
financial burden on it, which was not contemplated when the decision to grant
an increase was taken on 30th of June, 1993. Since the decision of the
appellant-company was purely voluntary, it was legitimate for the appellants to
take into consideration the financial implications of their proposed decision.
Learned counsel for the respondent, however, has placed reliance on a judgment
of this Court in Gopal Krishna Sharma and Ors. v. State of Rajasthan and Ors. (1993 Supp. (2) SCC 375 at
385) where this Court has observed that when the court grants to the employees
what is due to them in law, financial considerations cannot be a ground for
denying the benefit legally due to them. In the present case, since the
increase was purely voluntary, the financial burden was an important factor
which went into the decision making process and it cannot, therefore, be
ignored. Undoubtedly, as submitted by the respondent, pension is not a bounty.
Nevertheless, any increase voluntarily given has to be calculated in the manner
contemplated under the decision.
premises the appeal is allowed and the impugned judgment and order of the High
Court is set aside.
will, however, be no order as to costs.