Friday, 12 July 2019

Whether Classification Of Pensioners By Providing Cut-Off Date For The Purpose Of Grant Of Revised Pension is constitutional?

Even otherwise on merits also, we are of the firm opinion
that there is no valid justification to create two classes, viz., one
who retired pre1996
and another who retired post1996,
for the
purpose of grant of revised pension, In our view, such a
classification has no nexus with the object and purpose of grant

of benefit of revised pension. All the pensioners form a one class
who are entitled to pension as per the pension rules. Article 14 of
the Constitution of India ensures to all equality before law and
equal protection of laws. At this juncture it is also necessary to
examine the concept of valid classification. A valid classification
is truly a valid discrimination. It is true that Article 16 of the
Constitution of India permits a valid classification. However, a
very classification must be based on a just objective. The result
to be achieved by the just objective presupposes the choice of
some for differential consideration/treatment over others. A
classification to be valid must necessarily satisfy two tests.
Firstly, the distinguishing rationale has to be based on a just
objective and secondly, the choice of differentiating one set of
persons from another, must have a reasonable nexus to the
objective sought to be achieved. The test for a valid classification
may be summarised as a distinction based on a classification
founded on an intelligible differentia, which has a rational
relationship with the object sought to be achieved. Therefore,
whenever a cutoff
date (as in the present controversy) is fixed to
categorise one set of pensioners for favourable consideration over
others, the twin test for valid classification or valid discrimination

therefore must necessarily be satisfied. In the present case, the
classification in question has no reasonable nexus to the
objective sought to be achieved while revising the pension. As
observed hereinabove, the object and purpose for revising the
pension is due to the increase in the cost of living. All the
pensioners form a single class and therefore such a classification
for the purpose of grant of revised pension is unreasonable,
arbitrary, discriminatory and violative of Article 14 of the
Constitution of India. The State cannot arbitrarily pick and
choose from amongst similarly situated persons, a cutoff
date for
extension of benefits especially pensionary benefits. There has to
be a classification founded on some rational principle when
similarly situated class is differentiated for grant of any benefit.
8.1 As observed hereinabove, and even it is not in dispute that
as such a decision has been taken by the State Government to
revise the pension keeping in mind the increase in the cost of
living. Increase in the cost of living would affect all the
pensioners irrespective of whether they have retired pre1996
or
post1996.
As observed hereinabove, all the pensioners belong to
one class. Therefore, by such a classification/cutoff
date the
equals are treated as unequals and therefore such a classification

which has no nexus with the object and purpose of revision of
pension is unreasonable, discriminatory and arbitrary and
therefore the said classification was rightly set aside by the
learned Single Judge of the High Court. At this stage, it is
required to be observed that whenever a new benefit is granted
and/or new scheme is introduced, it might be possible for the
State to provide a cutoff
date taking into consideration its
financial resources. But the same shall not be applicable with
respect to one and single class of persons, the benefit to be given
to the one class of persons, who are already otherwise getting the
benefits and the question is with respect to revision.
9. In view of the above and for the reasons stated above, we
are of the opinion that the controversy/issue in the present
appeal is squarely covered by the decision of this Court in the
case of D.S. Nakara (supra). The decision of this Court in the
case of D.S. Nakara (supra) shall be applicable with full force to
the facts of the case on hand. The Division Bench of the High
Court has clearly erred in not following the decision of this Court
in the case of D.S. Nakara (supra) and has clearly erred in
reversing the judgment and order of the learned Single Judge.
The impugned judgment and order passed by the Division Bench

is not sustainable and the same deserves to be quashed and set
aside and is accordingly quashed and set aside. The judgment
and order passed by the learned Single Judge is hereby restored
and it is held that all the pensioners, irrespective of their date of
retirement, viz. pre1996
retirees shall be entitled to revision in
pension at par with those pensioners who retired post1996.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 10857 OF 2016

All Manipur Pensioners Association  Vs  The State of Manipur and others .
M.R. SHAH, J.
Dated:JULY 11, 2019.

Feeling aggrieved and dissatisfied with the impugned
judgment and order passed by the Division Bench of the High
Court of Manipur at Imphal dated 01.03.2016 passed in Writ
Appeal No. 28 of 2006, by which the Division Bench of the High
1
Court has allowed the said appeal preferred by the respondent –
State and has quashed and set aside the judgment and order
dated 24.3.2005 passed by the learned Single Judge in Writ
Petition (C) No. 1455 of 2000, by which the learned Single Judge
held that the method of calculating the revised pension in
paragraph 4.1 of the office memorandum dated 24.4.1999 in
respect of pre1996
pensioners is different from the method of
calculating the revised pension for the Government employees
who retired/died in harness on or after 1.1.1996 is arbitrary and
violative of Article 14 of the Constitution of India, the original writ
petitioners have preferred the present appeal.
2. The facts leading to the present appeal in nutshell are as
under:
That the State of Manipur adopted the Central Civil Services
(Pension) Rules, 1972, as amended from time to time. As per
Rule 49 of the Central Civil Services Rules, 1972, a case of a
government employee retired in accordance with the provisions of
the rules after completing qualifying service of not less than 30
years, the amount of pension shall be calculated at 50% of the
average emoluments subject to a maximum of Rs.4500/per
month. It appears that considering the increase in the cost of
2
living, the Government of Manipur decided to increase the
quantum of pension as well as the pay of the employees. That
the Government of Manipur issued an office memorandum dated
21.4.1999 revising the quantum of pension. However, provided
that those Manipur Government employees who retired on or
after 1.1.1996 shall be entitled to the revised pension at a higher
percentage and those who retired before 1.1.1996 shall be
entitled at a lower percentage.
2.1 Feeling aggrieved by office memorandum dated 21.4.1999
providing two different revised pensions, viz, the higher
percentage of revised pension to the government employees who
retired on or after 1.1.1996 and the lower percentage of revised
pension to those who retired on or before 1.1.1996, the appellant
herein – All Manipur Pensioners Association approached the
learned Single Judge of the High Court of Manipur by way of Writ
Petition (C) No.1455 of 2000. It was the case on behalf of the
original writ petitioners that all the pensioners who retired on or
after 1.1.1996 and those who retired before 1.1.1996 form only
one class as a whole and therefore the classification between
those who retired on or after 1.1.1996 and those who retired on
or before 1.1.1996 for the purpose of granting the benefit of
3
revised pension is arbitrary, unreasonable and violative of Article
14 of the Constitution of India. It was submitted that the date of
retirement cannot form the very criterion for classification.
Before the learned Single Judge, heavily reliance was placed on
the decision of this Court in the case of D.S. Nakara and others
vs. Union of India, reported in (1983) 1 SCC 305. The writ
petition before the learned Single Judge was opposed by the State
Government and the aforesaid classification was sought to be
justified solely on the ground that considering the financial
constraints of the State, the State was justified in granting
revised pension differently to those who retired after 1.1.1996
and those who retired before 1.1.1996. It was the case on behalf
of the State that considering the financial constraints of the
State, the State was not in a position to extend the benefit of
pension making the percentage given by the Government of India
in its memorandum dated 17.12.1998 to the pre1996
pensioners
and accordingly a decision was taken to extend the benefit of
revised pension at certain percentage for the pre1996
pensioners
and higher percentage for the post 1996 pensioners. Relying
upon the decision of this Court in D.S. Nakara’s case (supra), by
the judgment and order dated 24.3.2005, the learned Single
4
Judge allowed the writ petition and held the classification
between those pensioners who retired prior to 1996 and those
who retired after 1996 as arbitrary and violative of Article 14 of
the Constitution of India and consequently directed the State
Government to pay the revised pension uniformly to all the
pensioners irrespective of any cutoff
date, i.e., those who retired
pre1996
or those who retired post1996.
2.2. Feeling aggrieved and dissatisfied with the judgment and
order dated 24.3.2005 passed by the learned Single Judge in Writ
Petition (C) No. 1455 of 2000, the State preferred appeal before
the Division Bench of the High Court. By the impugned
judgment and order dated 1.3.2016, the Division Bench of the
High Court has allowed the said appeal and has quashed and set
aside the judgment and order passed by the learned Single Judge
by observing that a classification is permissible and cutoff
date
can be pressed into service depending on financial resources of
the State. The Division Bench has held that the cutoff
date fixed
by the State government as 1.1.1996 for payment of revised
pension to pre1996
retirees and post1996
retirees cannot be
termed to be unreasonable or irrational in the light of Article 14
5
of the Constitution of India and therefore need not be held to be
invalid.
3. Feeling aggrieved and dissatisfied with the impugned
judgment and order passed by the Division Bench of the High
Court, the original writ petitioners have preferred the present
appeal.
4. Shri R. Balasubramanian, learned Senior Advocate has
appeared for the appellant herein and Shri Sanjay Hegde, learned
Senior Advocate has appeared for the State.
4.1 Shri R. Balasubramanian, learned Senior Advocate
appearing on behalf of the appellant – Pensioners Association has
vehemently submitted that in the facts and circumstances of the
case, the Division Bench of the High Court has materially erred
in allowing the appeal and quashing and setting aside the
judgment and order passed by the learned Single Judge of the
High Court and approving the creation of two classes of
pensioners, viz., pre1996
and post1996
for the purpose of
revision in pension, which is contrary to catena of decisions of
this Court including the decision of this Court in the case of D.S.
Nakara (supra).
6
4.2 It is further submitted by Shri R. Balasubramanian, learned
Senior Advocate appearing on behalf of the appellant –
Pensioners Association that the Division Bench of the High Court
has materially erred in not following the decision of this Court in
the case of D.S. Nakara (supra). It is submitted that the Division
Bench of the High Court has not properly appreciated the fact
that the decision of this Court in the case of D.S. Nakara (supra)
has not been diluted at all in any of the subsequent decisions
and still holds the field. It is submitted that the decisions of this
Court in the cases of Hari Ram Gupta (D) through L.R. Kasturi
Devi v. State of U.P., reported in (1998) 6 SCC 328; T.N. Electricity
Board v. R. Veerasamy & others, reported in (1999) 3 SCC 414;
State of Punjab and others v. Amar Nath Goyal & others, reported
in (2005) 6 SCC 754, which came to be considered by the Division
Bench of the High Court while not following the decision of this
Court in the case of D.S. Nakara (supra) shall not be applicable to
the facts of the case on hand and all the aforesaid decisions are
clearly distinguishable.
4.3 It is further submitted by Shri R. Balasubramanian, learned
Senior Advocate appearing on behalf of the appellant –
7
Pensioners Association that the Division Bench of the High Court
has erred in not properly appreciating the fact that all the
pensioners form only one class as a whole and therefore they
cannot be divided in two/classified into two groups for the
purpose of giving more financial benefits to one group than the
other. It is submitted that the State’s financial
difficulty/constraint cannot be a ground to discriminate and/or
create two classes who as such belong to one class only.
4.4 It is further submitted by Shri R. Balasubramanian, learned
Senior Advocate appearing on behalf of the appellant –
Pensioners Association that the High Court has not properly
appreciated the fact that all the pensioners, whether they have
retired pre1996
or post1996
are governed by the pension rules
and are entitled to pension and therefore as such they form only
one class as a whole and therefore all the pensioners are entitled
to the same pensionary benefits irrespective of their date of
retirement.
4.5 It is further submitted by Shri R. Balasubramanian, learned
Senior Advocate appearing on behalf of the appellant –
Pensioners Association that as held by this Court in the case of
D.S. Nakara (supra) (para 42), the classification has to be based
8
on some rational principle and the rational principle must have
nexus to the objects sought to be achieved. It is submitted that if
the State Government considered it necessary to revise the
pension due to the escalation in the cost of living and other
things, there is no rational principle behind it for granting the
revised pension only to those who retired post1996
and
simultaneously denying the same to those who retired pre1996.
It is vehemently submitted that if the revision of pension was
necessitated due to the escalation in the cost of living etc., there
is no reason to deny the benefit of revised pension to those who
retired pre1996.
It is submitted that therefore this revision
which classified pension into two classes is not based on any
rational principle. It is submitted that as held by this Court in
the case of D.S. Nakara (supra) if the rational principle is the one
of dividing pensioners with a view to giving something more to
persons otherwise equally placed, it would be discriminatory. It
is submitted that this arbitrary division has not only no nexus to
the revision in pension but it is counterproductive and runs
counter to the whole gamut of pension scheme, more particularly
the revision in pension.
9
4.6 It is further submitted by Shri R. Balasubramanian, learned
Senior Advocate appearing on behalf of the appellant –
Pensioners Association that the only justification by the State to
create two classes for the purposes of payment of revision in
pension, viz., those who retired pre1996
and those who retired
post1996
was the financial constraint. It is submitted that the
aforesaid has no nexus with the object and purpose of revision in
pension. It is submitted therefore that such a classification is
absolutely arbitrary and therefore violative of Articles 14 & 16 of
the Constitution of India. It is submitted that as such the
learned Single Judge of the High Court was justified in holding
creation of two classes for the purpose of revision in pension as
arbitrary and violative of Article 14 of the Constitution of India.
4.7 It is further submitted by Shri R. Balasubramanian, learned
Senior Advocate appearing on behalf of the appellant –
Pensioners Association that looking to the object and purpose of
the revision in pension, namely, increase in the cost of living, the
Division Bench of the High Court has materially erred in
observing and holding that as the State does not have the
financial resources to pay uniform pension to all the retired
employees and therefore cutoff
date fixed by the State
10
Government as 1.1.1996 for payment of revised pension to pre1996
retirees and post1996
retirees cannot be termed to be
unreasonable or irrational in the light of Article 14 of the
Constitution of India. It is submitted that the aforesaid finding
recorded by the Division Bench of the High Court is just contrary
to the decision of this Court in the case of D.S. Nakara (supra)
and other subsequent decisions in which the decision of this
Court in the case of D.S. Nakara(supra) has been followed.
4.8 It is further submitted by Shri R. Balasubramanian, learned
Senior Advocate appearing on behalf of the appellant –
Pensioners Association that in the present case the decision of
this Court in the case of D.S. Nakara (supra) is squarely
applicable to the facts of the case. It is submitted therefore that
the Division Bench of the High Court has materially erred in
quashing and setting aside the judgment and order passed by the
learned Single Judge in holding the decision of the State
Government creating two groups for the purpose of revision in
pension as arbitrary, unreasonable and violative of Article 14 of
the Constitution of India.
11
4.9 Making the above submissions and heavily relying upon the
decision of this Court in the case of D.S. Nakara(supra), it is
prayed to allow the present appeal.
5. The present appeal is vehemently opposed by Shri Sanjay
Hegde, learned Senior Advocate appearing on behalf of the
respondent – State.
5.1 It is vehemently submitted by Shri Sanjay Hegde, learned
Senior Advocate appearing on behalf of the respondent – State
that in the facts and circumstances of the case and after
considering the observations made by this Court in the cases of
Hari Ram Gupta (supra), R. Veerasamy (supra) and Amar Nath
Goyal (supra), the Division Bench of the High Court has rightly
held that the cutoff
date fixed by the State Government for the
purpose of revised pension cannot be said to be unreasonable or
irrational in the light of Article 14 of the Constitution of India.
5.2 It is further submitted by Shri Sanjay Hegde, learned Senior
Advocate appearing on behalf of the respondent – State that the
decision of this Court in the case of D.S. Nakara (supra), which
has been heavily relied upon by the learned Senior Advocate
appearing on behalf of the appellant – Pensioners Association,
subsequently came to be considered by this Court and it has
12
been observed that the decision of this Court in the case of D.S.
Nakara (supra) is one of the limited application and there is no
scope for enlarging the ambit of that decision to cover all
schemes made by the retirees or a demand for an identical
amount of pension irrespective of the date of retirement. In
support of his above submission, Shri Sanjay Hegde, learned
Senior Advocate appearing on behalf of the respondent – State
has heavily relied upon the decisions of this Court in the cases of
Indian ExServices
League v. Union of India, reported in (1991) 2
SCC 104, Union of India v. P.N. Menon, reported in (1994) 4 SCC
68 and State of Rajasthan v. Amrit Lal Gandhi, reported in (1997)
2 SCC 342.
5.3 Shri Sanjay Hegde, learned Senior Advocate appearing on
behalf of the respondent – State has also heavily relied upon
some of the observations made by this Court in the case of
Kallakkurichi Taluk Retired Officials Association, Tamil Nadu and
others v. State of Tamil Nadu, reported in (2013) 2 SCC 772 in
support of his submission that financial constraint can be a valid
ground to grant the benefit of revised pension to some of the
pensioners and it is always open to the State Government looking
13
to its own financial constraint to grant the benefit of revised
pension by providing the cutoff
date. It is submitted therefore
that such a classification and/or creation of two groups for the
purpose of granting the benefit of revised pension cannot be said
to be unreasonable, irrational and violative of Article 14 of the
Constitution of India as sought to be contended on behalf of the
Pensioners Association.
5.4 Making the above submissions and relying upon the
aforesaid decisions, it is prayed to dismiss the present appeal.
6. We have heard the learned Senior Advocates for the
respective parties at length.
6.1 It is not in dispute that the State of Manipur has adopted
the Central Civil Services (Pension) Rules to be applicable to the
State of Manipur. Therefore, all the government servants retired
in accordance with the provisions of the Pension Rules and after
completing qualifying service are entitled to the
pension/pensionary benefits. It appears that considering the
increase in the cost of living, the State Government
enhanced/revised the pension of its employees with effect from
1.1.1996 as in the case of Central Government employees.
However, this revision in pension was done differently, viz., for
14
employees who retired prior to 1.1.1996 and for employees who
retired after 1.1.1996. Consequently, the State provided a lower
percentage of increase to those who retired pre1996
and
provided higher percentage of increase to those who retired post1996.
The learned Single Judge of the High Court held that such
a classification is not permissible in law keeping in mind the
equality clause of the Constitution. However, on an appeal, by
the impugned judgment and order, the Division Bench of the
High Court has reversed the decision of the learned Single Judge
and has observed and held that as in the present case the State
does not have the financial resources to pay uniform pension to
all the retired employees, the cutoff
date fixed by the State
Government as 1.1.1996 for payment of revised pension to pre1996
retirees and post1996
retirees cannot be termed to be
unreasonable and irrational in the light of Article 14 of the
Constitution of India. While passing the impugned judgment and
order, the Division Bench of the High Court has not followed the
decision of this Court in the case of D.S. Nakara (supra),
considering some of the observations made by this Court in the
subsequent decisions in the cases of R. Veerasamy (supra); Amar
Nath Goyal(supra) and P.N. Menon (supra) to the effect that the
15
decision in the case of D.S. Nakara (supra) is one of the limited
application and there is no scope for enlarging the ambit of that
decision to cover all schemes made by the retirees or a demand
for an identical amount of pension irrespective of the date of
retirement.
6.2 Feeling aggrieved and dissatisfied with the impugned
judgment and order passed by the Division Bench of the High
Court, the original writ petitioners – All Manipur Pensioners
Association – employees/pensioners who retired pre1996
have
preferred the present appeal.
7. The short question which is posed for consideration before
this Court is, whether in the facts and circumstances of the case,
the decision of this Court in the case of D.S. Nakara (supra) shall
be applicable or not, and in the facts and circumstances of the
case and solely on the ground of financial constraint, the State
Government would be justified in creating two classes of
pensioners, viz., pre1996
retirees and post1996
retirees for the
purpose of payment of revised pension and whether such a
classification is arbitrary, unreasonable and violative of Article 14
of the Constitution of India or not?
16
7.1 At the outset, it is required to be noted that in the present
case, the State Government has justified the cutoff
date for
payment of revised pension solely on the ground of financial
constraint. On no other ground, the State tried to justify the
classification. In the backdrop of the aforesaid facts, the
aforesaid question posed for consideration before this Court is
required to be considered.
7.2 It is not in dispute that the State Government has adopted
the Central Civil Services (Pension) Rules, to be applicable to the
State of Manipur. The State has also come out with the Manipur
Civil Services (Pension) Rules, 1977. It is also not in dispute that
subject to completing the qualifying service the government
servants retired in accordance with the pension rules are entitled
to pension. Therefore, as such, all the pensioners form only one
homogeneous class. Therefore, it can be said that all the
pensioners form only one class as a whole. Keeping in mind the
increase in the cost of living, the State Government increased the
quantum of pension and even pay for its employees. The State
Government also enhanced the scales of pension/quantum of
pension with effect from 1.1.1996 keeping in mind the increase in
the cost of living. However, the State Government provided the
17
cutoff
date for the purpose of grant of benefit of revised pension
with effect from 1.1.1996 to those who retired post1996
and
denied the revision in pension to those who retired pre1996.
The aforesaid classification between these pensioners who retired
pre1996
and post1996
for the purpose of grant of benefit of
revision in pension is the subject matter of this appeal. As
observed hereinabove, the aforesaid classification is sought to be
justified by the State Government solely on the ground of
financial constraint.
7.3 At the outset, it is required to be noted that in the case of
D.S.Nakara (supra), such a classification is held to be arbitrary,
unreasonable, irrational and violative of Article 14 of the
Constitution of India. In paragraphs 42 and 65, this Court in the
case of D.S. Nakara (supra) has observed and held as under:
“42. If it appears to be undisputable, as it does to us that
the pensioners for the purpose of pension benefits form a
class, would its upward revision permit a homogeneous
class to be divided by arbitrarily fixing an eligibility
criteria unrelated to purpose of revision, and would such
classification be founded on some rational principle? The
classification has to be based, as is well settled, on some
rational principle and the rational principle must have
nexus to the objects sought to be achieved. We have set
out the objects underlying the payment of pension. If the
18
State considered it necessary to liberalise the pension
scheme, we find no rational principle behind it for
granting these benefits only to those who retired
subsequent to that date simultaneously denying the
same to those who retired prior to that date. If the
liberalisation was considered necessary for augmenting
social security in old age to government servants then
those who, retired earlier cannot be worst off than those
who retire later. Therefore, this division which classified
pensioners into two classes is not based on any rational
principle and if the rational principle is the one of
dividing pensioners with a view to giving something more
to persons otherwise equally placed, it would be
discriminatory. To illustrate, take two persons, one
retired just a day prior and another a day just succeeding
the specified date. Both were in the same pay bracket,
the average emolument was the same and both had put
in equal number of years of service. How does a
fortuitous circumstance of retiring a day earlier or a day
later will permit totally unequal treatment in the matter
of pension? One retiring a day earlier will have to be
subject to ceiling of Rs 8100 p.a. and average emolument
to be worked out on 36 months' salary while the other
will have a ceiling of Rs 12,000 p.a. and average
emolument will be computed on the basis of last 10
months' average. The artificial division stares into face
and is unrelated to any principle and whatever principle,
if there be any, has absolutely no nexus to the objects
sought to be achieved by liberalising the pension scheme.
In fact this arbitrary division has not only no nexus to
the liberalised pension scheme but it is counterproductive
and runs counter to the whole gamut of
pension scheme. The equal treatment guaranteed in
Article 14 is wholly violated inasmuch as the pension
rules being statutory in character, since the specified
date, the rules accord differential and discriminatory
treatment to equals in the matter of commutation of
pension. A 48 hours' difference in matter of retirement
19
would have a traumatic effect. Division is thus both
arbitrary and unprincipled. Therefore, the classification
does not stand the test of Article 14.
65. That is the end of the journey. With the expanding
horizons of socioeconomic
justice, the Socialist Republic
and welfare State which we endeavour to set up and
largely influenced by the fact that the old men who
retired when emoluments were comparatively low and are
exposed to vagaries of continuously rising prices, the
falling value of the rupee consequent upon inflationary
inputs, we are satisfied that by introducing an arbitrary
eligibility criterion: “being in service and retiring
subsequent to the specified date” for being eligible for the
liberalised pension scheme and thereby dividing a
homogeneous class, the classification being not based on
any discernible rational principle and having been found
wholly unrelated to the objects sought to be achieved by
grant of liberalised pension and the eligibility criteria
devised being thoroughly arbitrary, we are of the view
that the eligibility for liberalised pension scheme of “being
in service on the specified date and retiring subsequent
to that date” in impugned memoranda, Exs. P1
& P2,
violates Article 14 and is unconstitutional and is struck
down. Both the memoranda shall be enforced and
implemented as read down as under: In other words, in
Ex. P1,
the words:
“that in respect of the government servants who were in
service on March 31, 1979 and retiring from service on or
after that date”
and in Ex. P2,
the words:
“the new rates of pension are effective from April 1, 1979
and will be applicable to all service officers who
became/become noneffective
on or after that date”
20
are unconstitutional and are struck down with this
specification that the date mentioned therein will be
relevant as being one from which the liberalised pension
scheme becomes operative to all pensioners governed by
1972 Rules irrespective of the date of retirement.
Omitting the unconstitutional part it is declared that all
pensioners governed by the 1972 Rules and Army
Pension Regulations shall be entitled to pension as
computed under the liberalised pension scheme from the
specified date, irrespective of the date of retirement.
Arrears of pension prior to the specified date as per fresh
computation is not admissible. Let a writ to that effect be
issued. But in the circumstances of the case, there will be
no order as to costs.”
7.4 While the aforesaid decision of this Court in the case of D.S.
Nakara (supra) was relied upon by the appellant herein and as
such which came to be considered and followed by the learned
Single Judge, the Division Bench considering some of the
observations made in the cases of Hari Ram Gupta (supra); R.
Veerasamy (supra); Amar Nath Goyal(supra) and P.N. Menon
(supra), has observed and held that the decision of this Court in
the case of D.S. Nakara (supra) is one of the limited application
and there is no scope for enlarging the ambit of that decision to
cover all schemes made by the retirees or a demand for an
identical amount of pension irrespective of the date of retirement.
However, by not following the decision of this Court in the case of
21
D.S. Nakara (supra), considering some of the observations made
by this Court in the aforesaid decisions, namely
P.N.Menon(supra) and other decisions, the Division Bench of the
High Court has not at all considered the distinguishable facts in
the aforesaid decisions.
7.5 In the case of P.N. Menon(supra), the controversy was
altogether different one. The factual position that needs to be
highlighted insofar as P.N. Menon (supra) is concerned, is that the
retired employees had never been in receipt of “dearness pay”
when they retired from service and therefore the O.M. in question
could not have been applied to them. This is how this Court
examined the matter. This Court also noticed that prior to the
O.M. in question, the pension scheme was contributory and only
with effect from 22.9.1977, the pension scheme was made noncontributory.
Since the respondent employees in the first cited
case were not in service at the time of introducing the same they
were held not eligible for the said benefit. Therefore, the said
decision shall not be applicable to the facts of the case on hand,
more particularly while considering and/or applying the decision
of this Court in the case of D.S. Nakara (supra).
22
7.6 In the case of Amrit Lal Gandhi (supra), pension was
introduced for the first time for the University teachers based on
the resolution passed by the Senate and Syndicate of
Jodhpur
University. The same was approved by the State Government
with effect from 1.1.1990. Therefore, the controversy was not
between one set of pensioners alleging discriminatory treatment
as against another set of pensioners. There were no pensioners
to begin with. The retirees were entitled to provident fund under
the existing provident fund scheme. The question of
discrimination between one set of pensioners from another set of
pensioners did not arise in the said decision. With the aforesaid
facts, this Court observed that financial viability is a relevant
issue.
7.7 Similarly, the decision of this Court in the case of Indian ExServices
League (supra) also shall not be applicable to the facts of
the case on hand. The facts in this case and the facts in the case
of D.S. Nakara (supra) are clearly distinguishable. In the case of
Indian ExServices
League (supra), the dispute was with respect to
PF retirees and Pension retirees and to that it was held that PF
retirees and Pension retirees constitute different classes and
23
therefore this Court distinguished the decision of this Court in
the case of D.S. Nakara (supra). Therefore, the aforesaid decision
shall not be applicable to the facts of the case on hand at all.
7.8 Similarly, the decisions of this Court in the cases of Hari
Ram Gupta (supra) and Kallakkurichi Taluk Retired Officials
Association, Tamil Nadu (supra) also shall not be applicable to the
facts of the case on hand.
7.9 In view of the above, we are satisfied that none of the
judgments, relied upon by the learned Senior Advocate for the
respondent – State, has any bearing to the controversy in hand.
The Division Bench of the High Court has clearly erred in not
appreciating and/or considering the distinguishable facts in the
cases of Hari Ram Gupta (supra); R. Veerasamy (supra); Amar
Nath Goyal (supra); P.N. Menon (supra) and Amrit Lal Gandhi
(supra).
8. Even otherwise on merits also, we are of the firm opinion
that there is no valid justification to create two classes, viz., one
who retired pre1996
and another who retired post1996,
for the
purpose of grant of revised pension, In our view, such a
classification has no nexus with the object and purpose of grant

of benefit of revised pension. All the pensioners form a one class
who are entitled to pension as per the pension rules. Article 14 of
the Constitution of India ensures to all equality before law and
equal protection of laws. At this juncture it is also necessary to
examine the concept of valid classification. A valid classification
is truly a valid discrimination. It is true that Article 16 of the
Constitution of India permits a valid classification. However, a
very classification must be based on a just objective. The result
to be achieved by the just objective presupposes the choice of
some for differential consideration/treatment over others. A
classification to be valid must necessarily satisfy two tests.
Firstly, the distinguishing rationale has to be based on a just
objective and secondly, the choice of differentiating one set of
persons from another, must have a reasonable nexus to the
objective sought to be achieved. The test for a valid classification
may be summarised as a distinction based on a classification
founded on an intelligible differentia, which has a rational
relationship with the object sought to be achieved. Therefore,
whenever a cutoff
date (as in the present controversy) is fixed to
categorise one set of pensioners for favourable consideration over
others, the twin test for valid classification or valid discrimination

therefore must necessarily be satisfied. In the present case, the
classification in question has no reasonable nexus to the
objective sought to be achieved while revising the pension. As
observed hereinabove, the object and purpose for revising the
pension is due to the increase in the cost of living. All the
pensioners form a single class and therefore such a classification
for the purpose of grant of revised pension is unreasonable,
arbitrary, discriminatory and violative of Article 14 of the
Constitution of India. The State cannot arbitrarily pick and
choose from amongst similarly situated persons, a cutoff
date for
extension of benefits especially pensionary benefits. There has to
be a classification founded on some rational principle when
similarly situated class is differentiated for grant of any benefit.
8.1 As observed hereinabove, and even it is not in dispute that
as such a decision has been taken by the State Government to
revise the pension keeping in mind the increase in the cost of
living. Increase in the cost of living would affect all the
pensioners irrespective of whether they have retired pre1996
or
post1996.
As observed hereinabove, all the pensioners belong to
one class. Therefore, by such a classification/cutoff
date the
equals are treated as unequals and therefore such a classification

which has no nexus with the object and purpose of revision of
pension is unreasonable, discriminatory and arbitrary and
therefore the said classification was rightly set aside by the
learned Single Judge of the High Court. At this stage, it is
required to be observed that whenever a new benefit is granted
and/or new scheme is introduced, it might be possible for the
State to provide a cutoff
date taking into consideration its
financial resources. But the same shall not be applicable with
respect to one and single class of persons, the benefit to be given
to the one class of persons, who are already otherwise getting the
benefits and the question is with respect to revision.
9. In view of the above and for the reasons stated above, we
are of the opinion that the controversy/issue in the present
appeal is squarely covered by the decision of this Court in the
case of D.S. Nakara (supra). The decision of this Court in the
case of D.S. Nakara (supra) shall be applicable with full force to
the facts of the case on hand. The Division Bench of the High
Court has clearly erred in not following the decision of this Court
in the case of D.S. Nakara (supra) and has clearly erred in
reversing the judgment and order of the learned Single Judge.
The impugned judgment and order passed by the Division Bench

is not sustainable and the same deserves to be quashed and set
aside and is accordingly quashed and set aside. The judgment
and order passed by the learned Single Judge is hereby restored
and it is held that all the pensioners, irrespective of their date of
retirement, viz. pre1996
retirees shall be entitled to revision in
pension at par with those pensioners who retired post1996.
The
arrears be paid to the respective pensioners within a period of
three months from today.
10. The instant appeal is allowed accordingly. However, in the
facts and circumstances of the case, there shall be no order as to
costs.
……………………………………J.
[M.R. SHAH]
NEW DELHI; …………………………………….J.
JULY 11, 2019. [A.S. BOPANNA]

Print Page

No comments:

Post a comment