U.P. Raghavendra
Acharya & Ors Vs. State of Karnataka & Ors [2006] Insc 310 (12 May 2006)
S.B.
Sinha & P.P. Naolekar
WITH [CIVIL
APPEAL NOS.1390-1395 OF 2006 & 1865 OF 2006] S.B. SINHA, J.
These
appeals involving identical questions of fact and law were taken up for hearing
together and are being disposed of by this common judgment.
The
appellants in these appeals are retired teachers of the University and Private
Aided Colleges (to whom UGC scales of pay were applicable).
They
have retired during the period 1.1.1996 to 31.3.1998. So far as the teachers of
the University or Privates Aided Colleges are concerned, indisputably, they
were being paid the same salary as was being paid to the teachers of the
Government colleges. The appellants in Civil Appeal No.1391/2006, have retired
from the Karnataka Regional Engineering College, Surathkal, Karnataka, which was established by the
Government of India at the request of the Government of Karnataka. It is a
centrally aided institution as envisaged under Entry 64 of List 1 of the
Seventh Schedule to the Constitution of India. So far as the said institution
is concerned, its expenditure used to be borne by the Government of India and
the State of Karnataka. It, however, has been notified by
the Government of India as a Deemed University with effect from 26.6.2002.
It is
not in dispute that the revised scales of pay as recommended by the Pay
Revision Committee became applicable to the appellants with effect from
1.1.1986. It is also not in dispute that the UGC scales of pay were applicable
to them. The Government of Karnataka, by a letter dated 17.12.1993 directed
that the matter relating to the fixation of pension on the basis of UGC pay
scales would be governed by Rule 296 of the Karnataka Civil Services Rules (hereinafter
referred to as 'the Rules'), providing for computation of emoluments for the
purpose of pension and gratuity of a Government servant. In the said letter it
was stated:
"The
term 'emoluments' has been defined and redefined from time to time whenever
pension has been revised by Executive orders. The terms Emoluments for purpose
of pensionary benefits as defined in G.O. Dated 17.8.87 benefits includes among
other things the last pay drawn.
It is
therefore, clarified that the pay drawn by the teachers of degree colleges in
respect of whom UGC scales have been extended by G.O. No.ED 88 UNI 88 dtd.
30.3.90 w.e.f. 1.1.86 and who have opted to UGC scales of pay, the last pay
drawn by them in the UGC scales of pay among other things may be treated as
emoluments for purpose of pensionary benefits under G.O. Dtd. FD 20 SRS 87 (I) dtd.
17.8.87." In continuation of the said letter dated 17.12.1993, the
Government of Karnataka by letter 12.10.1994, clarified that the pay drawn by
the teachers of degree colleges in respect of whom UGC scales of pay had been
extended by G.O. No.ED 28 UNI 88 dtd. 30.3.90, may be treated as emoluments for
the purpose of settling pensionary benefits under G.O. No.FD 20 SRS 87(F) dated
17.8.87. It was further stated:
"It
is further clarified that the clarification issued already on 17.12.93 equally
applies in respect of teachers of aided degree colleges also to whom the
benefit of UGC scales of pay as contemplated in G.O. ED 88 UNI 88 dated 30.3.90
have been extended. Action may be taken accordingly." By a notification
bearing G.O. No.ED No.442 dated 12.5.88, the Government of Karnataka extended
the revision of pensionary benefits contemplated by the aforesaid order dated
17.8.87, to the teachers of the aided educational institutions, whose pension
was to be paid out of the consolidated fund of the State. It stands admitted
that whereas 80% of the additional amount required for discharging the said
liability was to be borne by the Central Government, 10% thereof was to be
borne by the institution concerned and the rest 10% amount was to be raised by
way of additional generation of revenue, as would appear from the letter of the
Ministry of Human Resource Development, Department of Education, Government of
India dated 17.8.98.
It is
furthermore not in dispute that the Central Government pursuant to or in
furtherance of the recommendations made by the Central Pay Commission, revised
the scales of pay of its employees with effect from 1.1.1996. The revision of
such pay scales was also accepted by the University Grants Commission. Grant of
revision of such pay scales was also recommended for the posts held by the
appellants herein. On or about 22.7.1999, the Government of India by a letter
addressed to the Education Secretaries of all the States and Union Territories, stated in a categorical stand that the revision of pension
structure for retired teachers shall be as is applicable to the employees
working in Central Universities. It was stated:
"Since
the Central Govt. has already revised the pension structure of its employees
and the same has been extended to the teachers in Central Universities, it is
requested that appropriate orders in this regard may kindly be issued at an
early date for the teachers in State Universities and Colleges.
The
AIFUCTO delegations further highlighted the problems faced by teachers in
getting recognition of past service for pensionary benefits and condonation of
break in service while moving from one State to another. It is requested that
the guidelines issued by UGC in this regard may be followed and the State Govts.
May have reciprocal arrangements amongst themselves to obviate the problems
faced by the teachers." The Government of Karnataka issued appropriate
notification extending the UGC pay scales as revised from 1.1.1996, inter alia
to the teachers of Government and Aided Colleges, stating:
-
"Government
is pleased to revise the pay scales of teachers, librarians and physical
education directors in Government and aided colleges under the control of the
Department of Collegiate Education as detailed below.
-
Coverage:
This
scheme applies to Lecturers, Lecturers (Senior Scale), Lecturers (Selection
Grade), Librarians, Librarians (Senior Scale), Librarians (Selection Grade),
Director of Physical Education, Directors of Physical Education (Senior Scale)
and Directors of Physical Education (Selection Grade), Principals Grade-I and
Principals Grade-II.
-
Date of effect:
The
revised UGC pay scales will be retrospectively effective from 1st January, 1996, and other benefits prospectively
from the date of this order." The said revised scales of pay were to be
inclusive of basic pay, dearness allowance, interim relief and fixed dearness
allowance admissible as on 1.1.1996. However, on 22.7.2000, a notification was
issued by the Government of Karnataka, extending the UGC pay scales from
1.1.1996, to the teachers, librarians, etc. of the Government/Aided Colleges
stating:
"Revised
UGC pay scales have been extended to the Teachers, Librarians and Physical
Education Directors in the Government/Aided Colleges of the Collegiate Eduction
Department in GO read at (1) above.
Subsequently,
various clarifications have been issued by the Government of India and UGC on
the implementation of the pre-revised scale will become entitled to one
increment in the revised scale with effect from 1.1.1996 and the lecturers
drawing pay at 14th and 15th stage of the pre-revised scale will become
entitled to two increments in the revised scale on 1.1.1996. As the lecturers
drawing pay from 10th to 15th stage will get the benefit of bunching, they will
become entitled to the next increment in the revised scale on completion of 12
months from the date of stepping up of their pay viz. 12 months from
1.1.1996." However, paragraph 27A was inserted thereto in respect of
revision of pensionary benefits, which is to the following effect:
"27-A:
Revision of pensionary benefits:
-
UGC scales as
revised from 1.1.96 have been linked to the index level of 1510 points inasmuch
as the revised pay scale structured includes the DA admissible as on 1.1.96 to
the extent of 138% of basic pay. As on 1`.1.96 the pensionary benefits under
the State Government had not been revised. The revised pay scales of the State
Government employees came into force from 1.4.98 by merging the DA as on
1.1.96. The pensionary benefits were also simultaneously revised w.e.f. 1.4.98.
Therefore, the revised pay drawn in the UGC pay scales for the period from
1.1.96 upto 31.3.98 shall not be taken as emoluments for the purpose of pensionary
benefits.
Accordingly,
-
In respect of
teachers drawing UGC pay scales who have retired during the period from 1.1.96
to 31.3.98 they shall be eligible for the benefit of the fixation of pay and
arrears under the revised UGC scales of pay only. There shall not be any change
in their pensionary benefits with reference to the revised UGC pay and the
retirement benefits already sanctioned in the pre-revised UGC pay scales will
not undergo any modifications. However, they shall be entitled to the benefit
of fixation of revised pension/family pension as contemplated in GO No.FD(Spl.)
2 PET 99 dated 15.2.99 only w.e.f. 1st April, 1998. Para 6 of GO No.FD (Spl.) 2
PET 99 dated 15.2.99 stand modified to this extent.
-
In respect of
teachers drawing UGC pay scales and who have issued on or after 1.4.98, the pay
drawn in the revised UGC pay scales shall be counted for the purpose of pensionary
benefits and the orders revising the pensionary benefits vide GO No.FD (Spl.) 1
PET 99 dated 15.2.99 shall be made applicable." A similar amendment was
made in respect of the Regional Engineering Colleges by inserting para 31A.
The
mode of payment of arrears in the revised scales of pay in terms of the
notification was to be made as under:
-
"Mode of payment of arrears:
-
The arrears of
pay and allowances during the period from 1.1.1996 to 31.5.1999 shall be
invested in the NSC VIII issue in multiples of Rs.100 to the extent of 80% of
the amount, the balance amount being paid in cash."
-
In case of
employees who cease to be in service due to death, retirement or resignation
the arrears shall be fully payable in cash." A further notification was
issued on 8.8.2000, extending the AICTE pay scales from 1.1.1996 to the
teachers, librarians, etc. of the Government Aided Colleges and Engineering Colleges, which was to the same effect.
Writ
petitions were filed before the Karnataka High Court questioning the said
notifications dated 22.7.2000 and 8.8.2000. The said writ petitions were
allowed holding that the impugned notifications were illegal. The learned
Single Judge in his judgment opined that in view of the notification dated
22.7.1999, issued by the State of Karnataka, the revised scales of pay became applicable in respect of those
teachers who had retired during the period from 1.1.1996 to 31.3.1998 and they
could not have been deprived of the said benefit. It was held that the impugned
notifications were arbitrary as these resulted in discrimination between the
teachers working in the Government Colleges and the teachers working in the Non-
Government Colleges which would mean treating the equals unequally. It was
further opined that, in any event, the teachers of the Government Aided
Colleges as also the teachers of the Regional Engineering Colleges formed a
class by themselves and no discrimination could have been made between the
employees who retired prior to 31.3.1998 and those retiring subsequent thereto.
The
appeals preferred by the State of Karnataka against the said judgment were allowed by the Division Bench of the
Karnataka High Court, holding as under:
"It
is not disputed that method of calculation of pension, 50% of last pay drawn is
same to all and there is no change in the method of calculation. However, for
the purpose of revised pension, cut off date is fixed as 1.4.1998. As stated,
the pensionary benefits were uniformly revised in respect of all classes of
teachers with effect from 1.4.1998 and in view of this, the cut off date fixed
on 1.4.1998 by inserting clauses 27-A & 31-A by orders dated 29.7.2000,
7.8.2000 and 8.8.2000 in Government Order dated 15.11.1999 cannot be said to be
bad. Therefore, the order of learned Single Judge quashing the orders dated
29.7.2000, 7.8.2000 and 8.8.2000 in setting aside the grant of pension from
1.4.1998 on the ground of discrimination vis-a-vis the Government employees, is
not correct. Policy decision has been taken in fixing cut off date having
regard to expenditure involved, financial implications and other relevant
considerations. It cannot be said to be arbitrary or irrelevant in fixing the
cut off date which is applicable uniformly to all categories of pensioners
including Government servants which is in consonance with Articles 14 and 16 of
the Constitution and the impugned orders of the Government do not violate
Articles 14 and 16 of the Constitution of India. Therefore, the order of the
learned Single Judge is liable to be set aside and accordingly set aside."
The review petitions filed thereagainst were dismissed.
Mr.
S.B. Sanyal, leaned senior counsel appearing on behalf of the appellants raised
a short question in support of these appeals. Learned counsel would submit that
having regard to the fact that the appellants were given the benefit of the
revised scales of pay w.e.f. 1.1.1996, and, thus, having acquired a vested
right in relation thereto, the quantum of their pensionary benefits must be
computed on the basis of 50% of the last pay drawn and in that view of the
matter although they had been given the benefit of the revised pay scales from
1.1.1996, the pensionary benefits could not have been directed to be given from
1.4.1998.
Mr.
Sanjay R. Hegde, learned counsel appearing for the State of Karnataka, on the other hand, submitted that
Rule 296 of the Rules was not applicable to the case of the appellants herein
as they were not Government servants. It was contended that the action on the
part of the State cannot be said to be suffering from any infirmity whatsoever
inasmuch as so far as the employees of the State of Karnatake are concerned the
benefit of the revised scales of pay was given effect on and from 1.4.1998.
According to the learned counsel, although the State of Karnataka had given the benefits of the
revised scales of pay in terms of the recommendations of the UGC, with
retrospective effect from 1.1.1996, it was not obligatory on its part to extend
the retiral benefits thereof to the appellants also from the said date.
Our
attention in this behalf has been drawn to the notification dated 24.12.1998
issued by the UGC which reads as under:
-
"Superannuation
benefits:
17.1
The benefit in
service to a maximum of 3 years should be provided for the teachers who have
acquired Ph.D. Degree at the time of entry so that, almost all teachers get full
retirement benefits, which are available after 33 years of service subject to
overall age of superannuation;
17.2
Other conditions
with respect of superannuation benefits may be given as per the Central/State
Government Rules." In view of the rival contentions of the parties as noticed
hereinbefore, the question which arises for consideration before this Court is
as to whether the appellants having been given the benefit of the revised pay
scales w.e.f. 1.1.1996, could have been deprived of the retiral benefits
calculated with effect therefrom.
The
fact that the appellants herein were treated to be at par with the holders of
similar posts in Government Colleges is neither denied nor disputed. The
appellants indisputably are governed by the UGC scales of pay. They are
entitled to the pensionary benefits also. They had been given the benefits of
the revision of scales of pay by 10th Pay Revision Committee w.e.f. 1.1.1986.
The pensionary benefits payable to them on attaining the age of superannuation
or death were also stated to be at par with the employees of the State
Government. The State of Karnataka, as noticed hereinbefore, for all
intent and purport, has treated the teachers of the Government Aided Colleges and the Regioinal Engineering Colleges on the one hand and the teachers of
the colleges run by the State itself on the other hand at par. Even the
financial rules were made applicable to them in terms of the notifications,
applying the rule of incorporation by reference.
Although
Rule 296 of the Rules per se may not be applicable so far as the appellants are
concerned, it now stands admitted that the provisions thereof have been applied
to the case of the appellants also for the purpose of computation of pensionary
benefits. Therefore there cannot be any doubt whatsoever that the term
"Emoluments" as contained in Rule 296 of the Rules would also apply
to the case of the appellants. Rule 296 of the Rules reads as under:
-
"In respect
of retirement or death while in service of Government Servants on or after
first day of July, 1993, the term "Emoluments" for the purpose of
this Chapter means, the Basic pay drawn by the Government servant in the scale
of pay applicable to the post on the date of retirement or death and includes
the following, but does not include pay and allowance drawn from a source other
than the Consolidated Fund of the State,-
..............................................
Note:-
-
Basic pay means
the pay drawn in the time scale of pay applicable to the post immediately
before retirement or death." Note (a) appended to the Rule 296, states
that basic pay would mean the pay drawn in the time scale of pay applicable to
the post immediately before the retirement or death. Other rules being Rule
296B, 296C, 296D, etc. specifying different dates of retirement or death used
similar terminology. Rule 297 provides that the term "average
emoluments" means the average calculated upon the last three years of
service.
It is
one thing to say that the State can fix a cut off date unless and until the
same is held to be arbitrary or discriminatory in nature, the same would be
given effect for carrying out the purpose for which it was fixed..
In
this case, the cut-off date for all intent and purport had been fixed as
1.1.1996. It is, thus, not a case where cut-off date was fixed as 1.4.1998 as
the State merely intended to confer only same benefits. It is, thus, also not a
case like Transmission Corporation, A.P. Ltd. vs. P. Ramachandra Rao & Anr.
[2006 (4) SCALE 362}, where a section of the employees were excluded from being
given the benefit of revised pension as they had retired prior to the cut-off
date.
The
State while implementing the new scheme for payment of grant of pensionary
benefits to its employees, may deny the same to a class of retired employees
who were governed by a different set of rules. The extension of the benefits can
also be denied to a class of employees if the same is permissible in law. The
case of the appellants, however, stands absolutely on a different footing. They
had been enjoying the benefit of the revised scales of pay. Recommendations
have been made by the Central Government as also the University Grant
Commission to the State of Karnataka to
extend the benefits of the Pay Revision Committee in their favour. The pay in
their case had been revised in 1986 whereas the pay of the employees of the
State of Karnataka was revised in 1993. The benefits
of the recommendations of the Pay Revision Committee w.e.f. 1.1.1996, thus
could not have been denied to the appellants.
The
stand of the State of Karnataka that the pensionary benefits had
been conferred on the appellants w.e.f. 1.4.1998 on the premise that the
benefit of the revision of scales of pay to its own employees had been
conferred from 1.1.1998, in our opinion, is wholly misconceived. Firstly,
because the employees of the State of Karnataka and the appellants, in the matter of grant of benefit of revised scales
of pay, do not stand on the same footing as revised scales of pay had been made
applicable to their cases from a different date. Secondly, the appellants had
been given the benefit of the revised scales of pay w.e.f. 1.1.1996. It is now
well settled that a notification can be issued by the State accepting the
recommendations of the Pay Revision Committee with retrospective effect as it
was beneficent to the employees. Once such a retrospective effect is given to
the recommendations of the Pay Revision Committee, the concerned employees
despite their reaching the age of superannuation in between the said dates
and/or the date of issuance of the notification would be deemed to be getting
the said scales of pay as on 1.1.1996. By reason of such notification as the
appellants had been derived of a vested right, they could not have been
deprived therefrom and that too by reason of executive instructions.
The
contention of the State that the matter relating to the grant of pensionary
benefits vis-a-vis the revision in the scales of pay stands on different
footing, thus, must be rejected.
Pension,
as is well known, is not a bounty. It is treated to be a deferred salary. It is
akin to right of property. It is co-related and has a nexus with the salary
payable to the employees as on the date of retirement.
These
appeals involve the question of revision of pay and consequent revision in
pension and not the grant of pension for the first time. Only the modality of
computing the quantum of pension was required to be determined in terms of the
notification issued by the State of Karnataka. For the said purpose, Rule 296 of the Rules was made applicable. Once
this rule became applicable, indisputably the computation of pensionary
benefits was required to be carried out in terms thereof. The Pension Rules
envisage that pension should be calculated only on the basis of the emoluments
last drawn. No order, therefore, could be issued which would be contrary to or
inconsistent therewith. Such emoluments were to be reckoned only in terms of
the statutory rules. If the State had taken a conscious decision to extend the
benefit of the UGC pay scales w.e.f. 1.1.1996, to the appellants allowing them
to draw their pay and allowances in terms thereof, we fail to see any reason as
to why the pensionary benefits would not be extended to them from the said
date.
In
fact the status of the appellants that they were at par with teachers of the
Government colleges was not disputed. A Division Bench of the Karnataka High
Court in V.P. Babar & Ors. vs. State of Karnataka (W.P. Nos.32163-32208/1998) has clearly held so. It has not been
disputed that the said judgment has become final as the State of Karnataka did not prefer any appeal thereagainst.
The
impugned orders furthermore is opposed to the basic principles of law inasmuch
as by reason of executive instructions an employee cannot be deprived of a
vested or accrued right. Such a right to draw pension to the extent of 50% of
the emoluments, computed in terms of the rules, w.e.f. 1.1.1996, vested to the
appellants in terms of Government notification read with Rule 296 of the Rules.
As the
amount calculated on the basis of the revised scales of pay on and from
1.1.1996 to 31.3.1998 have not been paid to the appellants by the State of
Karnataka as ex gratia, and in fact was paid by way of emoluments to which the
appellants became entitled to in terms of their conditions of service, which in
turn are governed by the statutory rules, they acquired a vested right therein.
If the appellants became entitled to the benefits of the revised scales of pay,
and consequently to the pension calculated on the said basis in terms of the
impugned rules, there would be reduction of pension with retrospective effect
which would be violative of Articles 14 and 16 of the Constitution of India.
In
Chairman, Railway Board and Ors. vs. C.R. Rangadhamaiah and Ors. [1997 (6) SCC
623], a Constitution Bench of this Court opined:
"Apart
from being violative of the rights then available under Articles 31(1) and
19(1)(f), the impugned amendments, insofar as they have been given
retrospective operation, are also violative of the rights guaranteed under
Articles 14 and 16 of the Constitution on the ground that they are unreasonable
and arbitrary since the said amendments in Rule 2544 have the effect of
reducing the amount of pension that had become payable to employees who had
already retired from service on the date of issuance of the impugned
notifications, as per the provisions contained in Rule 2544 that were in force
at the time of their retirement." The appellants had retired from service.
The State therefore could not have amended the statutory rules adversely
affecting their pension with retrospective effect.
In Subrata
Sen and Ors. vs. Union of India and Ors. [2001 (8) SCC 71], a Division Bench of this Court
applying the principles laid down in D.S. Nakara vs. Union of India [1983 (1)
SCC 305], observed:
"In
our view the aforesaid para does not in any way support the contention of the
respondents. On the contrary, on parity of reasoning, we would also reiterate
that let us be clear about this misconception. Firstly, the Pension Scheme
including the liberalised scheme available to the employees is non-contributory
in character. Payment of pension does not depend upon Pension Fund. It is the
liability undertaken by the Company under the Rules and whenever becomes due
and payable, is to be paid. As observed in Nakara case (1983 (1) SCC 305),
pension is neither a bounty, nor a matter of grace depending upon the sweet
will of the employer, nor an ex gratia payment. It is a payment for the past
services rendered. It is a social welfare measure rendering socio-economic
justice to those who in the heyday of their life ceaselessly toiled for the
employer on an assurance that in their old age they would not be left in the
lurch. Maybe that in the present case, the trust for Pension Fund is created
for income tax purposes or for smooth payment of pension, but that would not affect
the liability of the employer to pay monthly pension calculated as per the
Rules on retirement from service and this retirement benefit is not based on
availability of Pension Fund. There is no question of pensioners dividing the
Pension Fund or affecting the pro rata share on addition of new members to the
Scheme. As per Rule 1 quoted above, an employee would become a member of the
Fund as soon as he enters into a specified category of service of the Company.
Under Rule 8, trustees may withhold or discontinue a pension or annuity or any
part thereof payable to a member or his dependants, and that pension amount is
non-assignable. Further, the payment of pension was the liability of the
employer as per the Rules and that liability is required to be discharged by
the Union of India in lieu of its taking over of the Company.
The
rights of the employees (including retired) are protected under Section 11 of
the Burmah Oil Company [Acquisition of Shares of Oil India Limited and of the
Undertakings in India of Assam Oil Company Limited and the Burmah Oil Company
(India Trading) Limited] Act, 1981." Yet again, in State of West Bengal and Anr. vs. W.B. Govt. Pensioners'
Associations and Ors. [2002 (2) SCC 179], this Court stated the law in the
following terms:
"Because
the scales of pay had been revised from 1.1.1986, the recomputation of pension
for such employees as had been granted the revised scales of necessity was
limited to the same cut-off date. All that the impugned Memorandum No.4056-F
dated 25.4.1990 did was to recompute the benefits in favour of post- 1.1.1986
retirees according to the existing formula as provided by Memorandum No.7530-F
and No.7531-F, both dated 6.7.1988. The same formula continues to be applied to
the pre-1986 pensioners is only on account of the revision of pay scales and
not on account of failure of the State Government to equitably apply the liberalised
Pension Scheme formula. The quantum of the emoluments formed no part of the
formula for grant of pension during 1986 to 1995." [Also see K.L. Rathee
vs. Union of India & Ors., 1997 (6) SCC 7, and Indian Ex-Services League
& Ors. vs. Union of India, 1991 (2) SCC 104] It is also trite that persons
similarly situated cannot be discriminated against. [See K.T. Veerappa &
Ors. vs. State of Karnataka & Ors., 2006 (4) SCALE 293].
For
the reasons stated above, the impugned judgment cannot be sustained and is
accordingly set aside. The appeals are allowed with costs. Counsel fee is
assessed at Rs.5,000/- in each appeal.
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