P.V.Sundara Rajan & ANR Vs. Union of
India & Ors [2000] INSC 262 (26 April 2000)
S.S.Ahamad, Y.K.Sabharwal
Y.K.SABHARWAL J.
The matter concerning the pension of Central
Government employees absorbed in Public Sector Undertakings has been the
subject matter of examination by this Court from time to time.
In "Common Cause", A Registered
Society And Ors. v.Union of India [(1987) 1 SCC 142], the grievance stressed
was that certain provisions of the Commutation of Pension Rules permit Union of
India to recover more than what is paid to the pensioners upon commutation and
thus they sought for the issue of directions for formulating appropriate scheme
rationalising the provisions relating to commutation.
That petition was filed on behalf of the
government servants who had commuted their pension partially. During the
pendency of the matter, Union of India agreed to restore the commuted portion
of the pension in regard to all civilian employees at the age of 70 years or
after 15 years, whichever is later, and agreed to make this effective from 1st April, 1986. The Court, however, directed that it would be just and equitable that the
benefit agreed to be extended in respect of commuted portion of the pension
should be effective from 1st April, 1985.
In Welfare Association of Absorbed Central
Government Employees in Public Enterprises v. Union of India & Ors.[(1991)
2 SCC 265], a two Judges' Bench examined the writ petition filed on behalf of
those who at the time of retirement from Government service and entering into
public sector had taken the advantage of commuting the entire pension and were
seeking the benefit of the judgment in the case of Common Cause (supra). It was
held that the petitioners belong to a class different from those whose case was
before this Court in the Common Cause case. It was noticed that the commutation
does bring certain advantages to the commutee and the class of Government
officers represented by the petitioner had derived such benefits and there was
no basis for the allegation that by not extending the benefit of common cause
case, there has been any infringement of Article 14 of the Constitution.
In Welfare Association of Absorbed Central
Government Employees in Public Enterprises v. Union of India & Ors. and
P.V.Sundara Rajan & Anr. v. B.B. Tandon & Ors. being Writ Petitions (C)
Nos. 11855 of 1985 and 567 of 1995 respectively [(1996) 2 SCC 187], the relief
was confined to the restoration of one-third portion of the fully commuted
pension as per the decision in Common Cause case. The contention of the
petitioners was that they have been denied the benefit of `common cause'
judgment, by insertion of para 4 in the impugned OM dated 5th march, 1987. They
sought quashing of the said para which provided that the Central Government
employees who got themselves absorbed under Central Public Sector
Undertakings/Autonomous Bodies and have received/or opted to receive commuted
value for one-third of pension as well as terminal benefits equal to the
commuted value of the balance amount of pension left after commuting one-third
of pension are not entitled to any benefit under the said orders as they have
ceased to be Central Government pensioners. The scope of Rule 37A of the CCS
(Pension) Rules, 1972 was also examined. That Rule reads as under :- "37-A
Payment of lump sum amount to persons on absorption in or under a corporation,
company or body (1) Where a government servant referred to in Rule 37 elects
the alternative of receiving the (retirement gratuity) and a lump sum amount in
lieu of pension, he shall, in addition to the (retirement gratuity) be granted:
(a) on an application made in this behalf, a
lump sum amount not exceeding the commuted value of one-third of his pension as
may be admissible to him in accordance with the provisions of the Civil
Pensions (Commutation) Rules; and (b) terminal benefits equal to the commuted
value of the balance amount of pension left after commuting one-third of
pension to be worked out with reference to the commutation tables obtaining on
the date from which the commuted value becomes payable subject to the condition
that the government servant surrenders his right of drawing two-thirds of his
pension." This Court (Bench of three Judges) held that one-third portion
of the pension has been commuted without any condition and two-third with the
condition attached. It would be useful to reproduce para 9 of the said decision
as under:
"From the above extracts, it will be
seen that a clear-cut distinction is made in Rule 37-A itself between one-third
portion of pension to be commuted without any condition attached and two-third
portion of pension to be received as terminal benefits with condition attached
with it. It follows that so far as commutation of one-third of the pension is
concerned, the petitioners herein as well as petitioners in "Common
Cause" case stand on similar footing with no difference. So far as the
balance of two-third pension is concerned, the petitioners herein have received
the commuted value (terminal benefits) on condition of their surrendering of their
right of drawing two-thirds of their pension. This was not the case with the
petitioners in "Common Cause" case. That being the position the
denial of benefit given to "Common Cause" petitioners to the present
petitioners violates Articles 14 and 16 of the Constitution.
The reasoning for restoring one-third
commuted pension in the case of "Common Cause" petitioners equally
applies to the restoration of one-third commuted pension in the case of these
petitioners as well." In respect of the earlier two Judges' Bench
decision, [(1991) 2 SCC 265], it was observed that Rule 37A was not brought to
the notice of the Court and that the contention that the petitioners on
commuting their pension in full cease to be Central Government pensioners was
too broad to be accepted in the absence of any Statute or the Rule.
Under these circumstances, it was held that
the petitioners are entitled to the benefits as given in "Common
Cause" case so far as it related to restoration of one third of the
commuted pension and consequently, para 4 of OM dated 5th March, 1987 was
quashed.
Contempt Petition No. 530 of 1997 in Writ
Petition (C) No. 11855 of 1985 was filed with the grievance that the Government
construing the aforesaid judgment literally restored one-third of the commuted
pension and denied all other attendant benefits as made available to the other
Central Government pensioners. By order dated 1st May, 1998 in Welfare
Association of Absorbed Central Government Employees in Public Enterprises
& Anr. v. Arvind Verma & Ors. [AIR 1998 SC 2862], this Court held that
the petitioners have to be treated at par with the Central Government
pensioners and the earlier decision had to be given effect to in letter and
spirit which means that the restoration of pension must be with attendant
benefits as given to the Central Government pensioners. The Government, it was
held, was liable to restore not only the pension but also all attendant
benefits. Noticing, however, that there was some genuine doubt on the part of
the respondents in construing and giving effect to the judgment of this Court
and, therefore, there was no contempt, the Government was directed to comply
with the judgment within three months and the contempt petition was thus
disposed of.
In purported implementation of the aforesaid
order dated 1st May, 1988, the Central Government issued a circular dated 14th
July, 1998. This led to filing of yet another contempt petition (Contempt
Petition (Civil) No.255 of 1999). By order dated 6th September, 1999, while
observing that no case for contempt is made out, this Court directed that the
contempt petitions be treated as applications for clarification.
Under aforesaid circumstances, contempt
petitions have been registered as interlocutory applications. One Lt.Col. B.R.
Malhotra (Retired) has also been impleaded as one of the applicants in IA No.
4/99. He had commuted 100% pension and complains of discrimination by
government against 100% commutees. Writ Petitions(C) Nos. 345 and 576 of 1999
have also been filed by the absorbed government employees who had commuted 100%
pension.
One of main grievance urged in the
applications is that all Central Government pensioners are entitled to dearness
relief on sanctioned basis pension as revised from time to time, regardless of
whether they have commuted any part of their pension. It has been claimed that
the benefit is to be calculated at applicable rates on the amount of pension
including the amount of commuted pension but these benefits have been restored
to the petitioners only partly at the notified rates on one-third of the
notional pension.
It has been submitted that they are at par
with other Central Government pensioners.
The dearness relief on pension has been
granted to pensioners to compensate them for the erosion in the value of money
due to rise in the cost of living. It seems clear that the Government has
permitted to the applicants dearness relief calculated only on one-third part
of the pension restored while in case of other pensioners, the dearness relief
is calculated on full pension including the commuted part of pension. As
already noticed, the applicants are to be treated on the same footing as other
Central Government employees in so far as the question of restoration of
one-third of commuted pension is concerned and are entitled to the benefits as
given in Common Cause case. In this respect, it would also be useful to notice
that the `pension' as defined in Central Civil Services (Pension) Rules 1972
does not include dearness relief. Rule 3(1)(o) reads as under :- "`Pension'
includes gratuity except when the term pension is used in contradistinction to
gratuity, but does not include dearness relief;" We may also reproduce
Rule 55-A :- " Dearness Relief on Pension/Family Pension (i) Relief
against price rise may be granted to the pensioners and family pensioners in
the form of dearness relief at such rates and subject to such conditions as the
Central Government may specify from time to time.
(ii) If a pensioner is re-employed under the
Central or State Government or a Corporation/Company/Body/Bank under them in
India or abroad including permanent absorption in such
Corporation/Company/Body/Bank, he shall not be eligible to draw dearness relief
on pension/family pension during the period of such re- employment.
(iii) Deleted" The Government
instructions also show that the dearness relief is granted to compensate the
pensioners for erosion in the value of money due to rise in the cost of living.
Anything which is not part of pension has to be paid in full in so far as those
who have commuted one-third pension. Nothing of substance could be shown by Mr.
Altaf Ahmed, learned Additional Solicitor General, so as to deprive the grant
of benefit of dearness relief on full pension to these public sector absorbees
at par with Central Government pensioners. Directions in this regard have been
issued by this Court from time to time but applicants are still being deprived
of this benefit. We give to the respondents a final opportunity to grant to the
applicants the benefit of dearness relief on pension as aforesaid within a
period of three months. The applicants are, however, not entitled to any other
benefit claimed in the applications.
The parity claimed by Lt.Col. Malhotra and
other absorbees who had commuted 100% pension, in our view, is entirely
misplaced. The contention that what is commuted or given up is an amount and
not the right to receive pension or right to receive post-commutation revision
and attendant benefits including dearness relief on the gross entitled pension
on the dates they were granted to other Government pensioners, is only
illusory. The decision in the case of State of T.N. and Ors. v. V.S.
Balakrishnan and Ors.
[(1994) Suppl. 3 SCC 204] on which reliance
was placed by Mr. Gopal Subramanium, Senior Advocate, has no applicability to
the point in issue. Those who commuted 100% pension continue to remain
non-pensioners till their pension is restored. In Welfare Association Case
(supra), persons who commuted the full pension and who will not be given any
monthly pension by deeming monthly pension to have been reduced to nil has been
treated as a separate category.
Those who commute 100% pension are not
entitled to the benefit of dearness relief on full pension or other benefits as
claimed herein. We also do not find any discrimination in so far as this class
is concerned.
The interlocutory applications and the writ
petitions are disposed of in the above terms leaving the parties to bear their
own costs.
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