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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6013 OF 2011

(Arising out S.L.P. (C) NO. 3777 OF 2007)

Sheelkumar Jain ...... Appellant Versus

The New India Assurance Co. Ltd. & Ors. ...... Respondents J U D G M E N T

A. K. PATNAIK, J.

Leave granted.

2. This is an appeal by way of special leave against the order dated 10.11.2006 of the Division Bench of the Madhya Pradesh High Court, Indore Bench, in W.A. No.244 of 2006.

3. The brief facts of this case are that on 01.07.1969 the appellant was appointed as an Inspector in Liberty Insurance Company Limited. Under the General Insurance Business (Nationalised) Act, 1972 (for short `the Act'), Liberty Insurance Company was nationalized and merged in the respondent no.1-Company. The services of the appellant were absorbed in respondent No.1-Company and in September, 1984, he was promoted as Assistant Administrative Officer and posted at the Guna Branch as Assistant Branch Manager. In the year 1989, he was transferred to Indore and posted as Assistant Administrative Officer and thereafter as Divisional Accountant and in 1991 he was promoted to the post of Administrative Officer. The appellant then served a letter dated 16.09.1991 to the General Manager of respondent No.1- Company at the Head Office of the company at Bombay saying that he would like to resign from his post and requesting him to treat the letter as three months' notice and to relieve him from his services. The Assistant Administrative Officer, Indore, by his letter dated 28.10.1991 informed the appellant that his resignation has been accepted by the competent authority with effect from 16.12.1991, i.e. after completion of three months notice. Accordingly, the appellant was relieved from his services on 16.12.1991. Thereafter, the General Insurance (Employees') Pension Scheme, 1995 (for short `the Pension Scheme, 1995') was made by the Central Government in exercise of its powers under Section 17-A of the Act. The Pension Scheme, 1995 applied also to employees who were in the service of respondent No.1-Company on or after first January, 1986 but had retired before the first day of November, 1993 and exercised an option in writing within 120 days from the notified date provided he refunded within the specified period the entire amount of the company's contribution to the provident fund including interest thereon as well as the entire amount of non-refundable withdrawal, if any, made from the company's contribution to the provident fund amount and interest thereon. On 20.10.1995, the appellant submitted an application to the respondent No.1- Company opting for the Pension Scheme, 1995 and gave an undertaking to refund to respondent No.1-Company the entire amount of company's contribution to his provident fund account together with interest as well as the entire amount of non-refundable withdrawal, if any, made by him from company's contribution to his provident fund account and interest thereon. The respondent No.1-Company, however, intimated the appellant by letter dated 25.10.1995 that the Pension Scheme, 1995 was not applicable to those who have resigned from the respondent No.1-Company and since the appellant has resigned, he will not be entitled for the Pensions Scheme, 1995.

4. The appellant then filed Writ Petition No.692 of 1996 before the Madhya Pradesh High Court, Indore Bench, which was dismissed by the learned Single Judge by order dated 15.02.2000. Aggrieved, the appellant initially filed Special Leave Petition before this Court, but thereafter withdrew the same and challenged the order of the learned Single Judge before the Division Bench of the Madhya Pradesh High Court in Writ Appeal No.224 of 2006. The Division Bench of the Madhya Pradesh High Court held in the impugned order that under Clause 22 of the Pension Scheme, 1995, resignation entails forfeiture of the past services and as the appellant has resigned from service, even if he had worked for 20 years in respondent No.1-Company, he cannot be equated with an employee who had taken voluntary retirement from service under Clause 30 of the Pension Scheme, 1995 and the Pension Scheme, 1995 did not apply to the appellant and dismissed the Writ Appeal.

5. Mr. Sushil Kumar Jain, learned counsel for the appellant, submitted that the High Court was not right in coming to the conclusion that the appellant had resigned from service. He submitted that though in the letter dated 16.09.1991 to the General Manager of the respondent no.1- Company the appellant used the word `resigned', the letter was actually a three months' notice for voluntary retirement. He submitted that the appellant had rendered 20 years service and 20 years service was the qualifying service for voluntary retirement under Clause 30 of the Pension Scheme, 1995. He submitted that since the appellant had rendered more than 20 years of service under the respondent no.1-Company, he was entitled to the pension and such pension should not be denied to him by saying that he had resigned from service and had not taken voluntary retirement. He further submitted that Clause 22 of the Pension Scheme, 1995 providing that resignation from the service of the respondent no.1-Company shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits, was not in existence when the appellant submitted his letter dated 16.09.1991 and the only provision that was in force was Clause 5 of the General Insurance (Termination, Superannuation and Retirement of Officers and Development Staff) Scheme, 1976, (for short `the Scheme 1976') which provided that an officer or a person of the Development Staff shall not leave or discontinue his service without first giving a three months notice in writing to the appointing authority of his intention to leave or discontinue the service. He submitted that had there been a provision similar to Clause 22 of the Pension Scheme, 1995 in the Scheme, 1976, he would not have used the word `resigned' in his letter dated 19.06.1991. He cited the decisions of this Court in Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd. & Ors. [AIR 1984 SC 1064], J.K. Cotton Spinning and Weaving Mills Company Ltd. v. State of U. P. & Ors. [(1990) 4 SCC 27], Union of India & Ors. v. Lt. Col. P.S. Bhargava [(1997) 2 SCC 28] and Sansar Chand Atri v. State of Punjab & Anr. [(2002) 4 SCC 154] to contend that the resignation of the appellant actually amounted to voluntary retirement in the facts and circumstances of the case. He vehemently argued that it has been held in D.S. Nakara & Ors. v. Union of India [(1983) 1 SCC 305] and Chairman, Railway Board & Ors. v. C. R. Rangadhamaiah & Ors. [AIR 1997 SC 3828] that pension is neither a bounty nor a matter of grace but is a payment for the past services rendered by an employee. He relied on the decisions of this Court in S. Appukuttan v. Thundiyil Janaki Amma & Anr. [(1988) 2 SCC 372], Vatan Mal v. Kailash Nath [(1989) 3 SCC 79], Employees' State Insurance Corporation v. R.K. Swamy & Ors. [(1994) 1 SCC 445] and Union of India & Anr. v. Pradeep Kumari & Ors. [(1995) 2 SCC 736] for the proposition that while interpreting a statute the Court must have regard to the legislative intent and should not take a narrow or restricted view which will defeat the beneficial purpose of the statute.

6. Mr. Balaji Subramanian, learned counsel for the respondents, on the other hand, submitted that the letter dated 16.09.1991 of the appellant to the General Manager of the respondent no.1-Company used the word `resigned' and, therefore, the appellant actually resigned from service and did not take voluntary retirement. He cited a decision of this Court in UCO Bank & Ors., etc. v. Sanwar Mal, etc. [(2004) 4 SCC 412] in which this Court, while construing the UCO Bank (Employees') Pension Regulations, 1995 which had similar provisions, held that the words `resignation' and `voluntary retirement' carry different meanings and an employee, who has resigned from the service, was not entitled to pension. He also relied on the decision of this Court in Reserve Bank of India & Anr. v. Cecil Dennis Solomon & Anr. [(2004) 9 SCC 461] in which this Court, while construing the provisions of the Reserve Bank of India Pension Regulations, 1990, has held that in service jurisprudence, the expressions "resignation" and "voluntary retirement'' convey different connotations and a person who has resigned is not entitled to pension.

7. We have perused the decisions of this Court cited by learned counsel for the respondents. In Reserve Bank of India & Anr. v. Cecil Dennis Solomon & Anr. (supra) employees of the Reserve Bank of India had tendered their resignations in 1988 and were getting superannuation benefits under the provident fund contributory provisions and gratuity schemes. Subsequently, the Reserve Bank of India Pension Regulations, 1990 were framed. The employees who had tendered resignations in 1988 claimed that they were entitled to pension under these new Pension Regulations and moved the Bombay High Court for relief and the High Court held that the Reserve Bank of India was legally bound to grant pension to such employees. The Reserve Bank of India challenged the decision of the Bombay High Court before this Court and this Court held that as the employees had tendered resignation which was different from voluntary retirement, they were not entitled to pension under the Pension Regulations. Similarly, in UCO Bank & Ors., etc. v. Sanwar Mal, etc. (supra) Sanwar Mal, who was initially appointed in the UCO Bank on 29.12.1959 and was thereafter promoted to Class III post in 1980, resigned from the service of the UCO Bank after giving one month's notice on 25.02.1988. Thereafter, the UCO Bank (Employees') Pension Regulations, 1995 were framed and Sanwar Mal opted for the pension scheme under these regulations. The UCO Bank declined to accept his option to admit him into the pension scheme. Sanwar Mal filed a suit for a declaration that he was entitled to pension under the Pension Regulations and for a mandatory injunction directing the UCO Bank to make payment of arrears of pensions along with interest. The suit was decreed and the decree was affirmed in first appeal and thereafter by the High Court in second appeal. The UCO Bank carried an appeal to this Court and this Court differentiated "resignation" from "voluntary retirement" and allowed the appeal and set aside the judgment of the High Court. In these two decisions, the Courts were not called upon to decide whether the termination of services of the employee was by way of resignation or voluntary retirement. In this case, on the other hand, we are called upon to decide the issue whether the termination of the services of the appellant in 1991 amounted to resignation or voluntary retirement.

8. For deciding this issue, we have to look at the Clause 5 of the Scheme, 1976 made under Section 10 of the Act under which the services of the appellant were terminated after he submitted his letter dated 16.09.1991 to the General Manager of respondent No.1- Company saying that he would like to resign from his post and requesting him to treat the letter as three months' notice and to relieve him from his services. Clause 5 of the Scheme, 1976 is quoted hereinbelow: "5. Determination of Service:

(1) An officer or a person of the Development Staff, other than one on probation shall not leave or discontinue his service without first giving in writing to the appointing authority of his intention to leave or discontinue the service and the period of notice required to be given shall be three months;

Provided that such notice may be waived in part or in full by appointing authority at its discretion.

Explanation I - In this Scheme, month shall be reckoned according to the English Calendar and shall commence from the day following that on which the notice is received by the Corporation or the Company, as the case may be.

Explanation II - A notice given by an officer or a person of the Development Staff under this paragraph shall be deemed to be proper only if he remains on duty during the period of notice and such officer or person shall not be entitled to set off any leave earned against the period of such notice.

(2) In case of breach by an officer or a person of the Development Staff of the provisions of sub-paragraph (1), he shall be liable to pay to the Corporation or the Company concerned, as the case may be, as compensation a sum equal to his salary for the period of notice required of him which sum may be deducted from any monies due to him."

It will be clear from the language of sub-clause (1) of Clause 5 of the Scheme, 1976 that an officer or a person of the Development Staff could leave or discontinue his services after giving in writing to the appointing authority of his intention to leave or discontinue of the services and the period of such notice required to be given was three months. It is in accordance with this statutory provision that the appellant submitted his letter dated 16.09.1991 to the General Manager of respondent No.1-Company saying that he would like to resign from his post and requesting him to treat the letter as three months' notice and to relieve him from his services and it is in accordance with this statutory provision that the competent authority accepted his resignation with effect from 16.12.1991, i.e. after completion of three months' notice. Sub-clause (1) of Clause 5 does not state that the termination of service pursuant to the notice given by an officer or a person of the Development Staff to leave or discontinue his service amounts to "resignation" nor does it state that such termination of service of an officer or a person of the Development Staff on his serving notice in writing to leave or discontinue in service amounts to "voluntary retirement". Sub-clause (1) of Clause 5 does not also make a distinction between "resignation" and "voluntary retirement" and it only provides that an employee who wants to leave or discontinue his service has to serve a notice of three months to the appointing authority. We also notice that sub-clause (1) of Clause 5 does not require that the appointing authority must accept the request of an officer or a person of the Development Staff to leave or discontinue his service but in the facts of the present case, the request of the appellant to relieve him from his service after three months' notice was accepted by the competent authority and such acceptance was conveyed by the letter dated 28.10.1991 of the Assistant Administrative Officer, Indore.

9. We may now look at Clauses 22 and 30 of the Pension Scheme, 1995 which are quoted hereinbelow:

"22. Forfeiture of Service: Resignation or dismissal or removal or termination or compulsory retirement or an employee from the service of the Corporation or a Company shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits.

30. Pension on Voluntary Retirement: (1) At any time after an employee has completed twenty years of qualifying service, he may, by giving notice of not less than ninety days, in writing to the appointing authority, retire from service: Provided that this sub-paragraph shall not apply to an employee who is on deputation unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year:

Provided further that this sub-paragraph shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking to which he is on deputation at the time of seeking voluntary retirement.

(2) The notice of voluntary retirement given under sub-paragraph (1) shall require acceptance by the appointing authority:

Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.

(3)(a) An employee referred to in sub-paragraph (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than ninety days giving reasons therefor;

(b) on receipt of request under clause (a), the appointing authority may, subject to the provisions of sub-paragraph (2), consider such request for the curtailment of the period of notice of ninety days on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of ninety days on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of ninety days.

(4) An employee who has elected to retire under this paragraph and has given necessary notice to that effect to the appointing authority shall be precluded from withdrawing his notice except with the specific approval of such authority: Provided that the request for such withdrawal shall be made before the intended date of his retirement.

(5) The qualifying service of an employee retiring voluntarily under this paragraph shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty three years and it does not take him beyond the date of retirement.

(6) The pension of an employee retiring under this paragraph shall be based on the average emoluments as defined under clause (d) of paragraph 2 of this scheme and the increase, not exceeding five years in his qualifying service, shall not entitled him to any notional fixation of pay for the purpose of calculating his pension; Explanation: For the purpose of this paragraph, the appointing authority shall be the appointing authority specified in Appendix-I to this scheme."

10. The Pension Scheme, 1995 was framed and notified only in 1995 and yet the Pension Scheme, 1995 was made applicable also to employees who had left the services of the respondent No.1-Company before 1995. Clauses 22 and 30 of the Pension Scheme, 1995 quoted above were not in existence when the appellant submitted his letter dated 16.09.1991 to the General Manager of respondent No.1-Company. Hence, when the appellant served his letter dated 16.09.1991 to the General Manager of respondent No.1- Company, he had no knowledge of the difference between `resignation' under Clause 22 and `voluntary retirement' under Clause 30 of the Pension Scheme, 1995. Similarly, the respondent No.1-Company employer had no knowledge of the difference between `resignation' and `voluntary retirement' under Clauses 22 and 33 of the Pension Scheme, 1995 respectively. Both the appellant and the respondent No.1 have acted in accordance with the provisions of sub-clause (1) of Clause 5 of the Scheme, 1976 at the time of determination of service of the appellant in the year 1991. It is in this background that we have now to decide whether the determination of service of the appellant under sub-clause (1) of Clause 5 of the Scheme, 1976 amounts to resignation in terms of Clause 22 of the Pension Scheme, 1995 or amounts to voluntary retirement in terms of Clause 30 of the Pension Scheme, 1995. Clause 22 of the Pension Scheme, 1995 states that resignation of an employee from the service of the Corporation or a Company shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits, but does not define the term "resignation". Under sub-clause (1) of Clause 30 of the Pension Scheme, 1995, an employee, who has completed 20 years of qualifying service, may by giving notice of not less than 90 days in writing to the appointing authority retire from service and under sub-clause (2) of Clause 30 of the Pension Scheme, 1995, the notice of voluntary retirement shall require acceptance by the appointing authority. Since `voluntary retirement' unlike `resignation' does not entail forfeiture of past services and instead qualifies for pension, an employee to whom Clause 30 of the Pension Scheme, 1995 applies cannot be said to have `resigned' from service. In the facts of the present case, we find that the appellant had completed 20 years qualifying service and had given notice of not less than 90 days in writing to the appointing authority of his intention to leave service and the appointing authority had accepted notice of the appellant and relieved him from service. Hence, Clause 30 of the Pension Scheme, 1995 applied to the appellant even though in his letter dated 16.09.1991 to the General Manager of respondent no.1-Company he had used the word `resign'.

11. We may now cite the authorities in support of our aforesaid conclusion. In Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd. & Ors. (supra), the plaintiff had rendered continuous service under the respondent from 31.12.1929 till 31.08.1959, i.e. for 20 years and 8 months. He submitted a letter of resignation dated 27.07.1959 and his resignation was accepted by the respondent by letter dated 26.08.1959 and he was released from his service with effect from 01.09.1959. On these facts, a three-Judge Bench of this Court held: "The termination of service was thus on account of resignation of the plaintiff being accepted by the respondent. The plaintiff has, within the meaning of the expression, thus retired from service of the respondent and he is qualified for payment of gratuity in terms of Rule 6."

12. In Union of India & Ors. v. Lt. Col. P.S. Bhargava (supra), respondent joined the Army Dental Corps in 1960 and thereafter he served in various capacities as a specialist and on 02.01.1984 he wrote a letter requesting for permission to resign from service with effect from 30.04.1984 or from an early date. His resignation was accepted by a communication dated 24.07.1984 and he was released from service and he was also informed that he shall not be entitled to gratuity, pension, leave pending resignation and travel concession. On receipt of this letter, he wrote another letter dated 18.08.1984 stating that he was not interested in leaving the service. This was followed by another letter dated 22.08.1984 praying to the authority to cancel the permission to resign. These letters were written by the respondent because he realized that he would be deprived of his pension, gratuity, etc. as a consequence of his resignation. These subsequent letters dated 18.08.1984 and 22.08.1984 were not accepted and the respondent was struck off from the rolls of the Army on 24.08.1984. On these facts, the Court held:

"Once an officer has to his credit the minimum period of qualifying service, he earns a right to get pension and as the Regulations stand that right to get pension can be taken only if an order is passed under Regulations 3 or 16."

13. The aforesaid authorities would show that the Court will have to construe the statutory provisions in each case to find out whether the termination of service of an employee was a termination by way of resignation or a termination by way of voluntary retirement and while construing the statutory provisions, the Court will have to keep in mind the purposes of the statutory provisions. The general purpose of the Pension Scheme, 1995, read as a whole, is to grant pensionary benefits to employees, who had rendered service in the Insurance Companies and had retired after putting in the qualifying service in the Insurance Companies. Clauses 22 and 30 of the Pension Scheme, 1995 cannot be so construed as to deprive of an employee of an Insurance Company, such as the appellant, who had put in the qualifying service for pension and who had voluntarily given up his service after serving 90 days notice in accordance with sub-clause (1) of Clause 5 of the Scheme, 1976 and after his notice was accepted by the appointing authority.

14. In the result, we set aside the orders of the Division Bench of the High Court in the Writ Appeal as well as the learned Single Judge and allow this appeal as well as the Writ Petition filed by the appellant and direct the respondents to consider the claim of the appellant for pension in accordance with the Pension Scheme, 1995 and intimate the decision to the appellant within three months from today. There shall be no order as to costs.

..........................J.

(R. V. Raveendran)

..........................J.

(A. K. Patnaik)

New Delhi,

July 28, 2011.

Supreme Court of India

M.L. Jain vs Union Of India on 18 August, 1988

Equivalent citations: 1989 AIR 669, 1988 SCR Supl. (2) 496 Bench: Sen, A.P.

PETITIONER: M.L. JAIN

Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT18/08/1988

BENCH: SEN, A.P. (J)

BENCH: SEN, A.P. (J)ATRAJAN, S. (J)

CITATION:

1989 AIR 669 1988 SCR Supl. (2) 496

1988 SCC (4) 121 JT 1988 (3) 499

1988 SCALE (2)370

CITATOR INFO :

D 1991 SC 928 (2)

ACT:

High Court Judges (Conditions of Service) Act, 1954/High Court Judges (Conditions of Service) Rules, 1956: Section 15 and Para 2 of Part 111 of First Schedule/Rule 2-Retired High Court Judges- Recalculation and redetermination of pension-Improvement of service conattions including pension by virtue of Amendment Act 38186 and 20/88-Constitutional propriety and legality of Ministry of Law & Justice letter dated December 18,1987 giving liberty to State Government to determine the pension.

HEADNOTE:

The petitioner, before his appointment as a Judge of the Rajasthan High Court, was a member of the Rajasthan Higher Judicial Service. He was later transferred and appointed as a Judge of the High Court of Delhi. He retired on July 21, 1984. The petitioner had opted. for the purpose of his pension, for Part 111 of the First Schedule to the High Court Judges Conditions of Service) Act, 1954. Under this provision, the petitioner was entitled to a basic pension as admissible under the ordinary rules of his Service if he had not been appointed a Judge, and an additional pension for each completed year of service as a Judge of the High Court. The High Court Judges (Conditions of Service) Amendment Act, 1986 and 1988 brought about improvements in the service conditions. including pension, of the High Court Judges. The Government of India subsequently issued a scheme for rationalisation of pension structure for pre-January 1, 1984 pensioners. Pursuant there to the Ministry of Law & Justice, Government of India, issued letter dated December 18, 1987 giving directions to the Accountants General/Pay and Accounts Officers as to the manner in which the basic pension of the High Court Judges governed by the provisions of Part 111 of the First Schedule to the High Court Judges Conditions of Service Act, 1954 may be revised with effect from 1.1.1986, as in the case of the employees of Central Government, or from some other date the respective State Government may decide to adopt these orders or an independent order issued by them.

The petitioner has claimed higher pension on the ground that service Judges with lesser service, who belonged to Higher Judicial Service of some other States? have been granted higher pension while he has been subjected to a discriminatory treatment in the matter.

Allowing the Civil Miscellaneous Petition, it was, HELD: (1) This Court fails to appreciate the propriety of the letter dated December 111, 1987 of the Ministry of Law & Justice giving liberty to different State Governments to deny the benefit of the revised pension to the Service Judges consequently upon the enactment of the High Court Judges (Conditions of Service) Amendments Acts. 1986 and 1988 read along with Office Memoranda issued by the Government of Pension & Pensioners Welfare, dated April 14 1987,and April 16, 1987 and rule 2 of the High Court Judges Rules, 1956. Such a direction is constitutionally impermissible as offending Art.14 of the Constitution. It is tantamount to denial of equal treatment to persons belonging to the same class without any rational basis. [503F-H; 504A ]

(2) While the salary of Judges of the High Court is charged on the Consolidated Fund of the States, the pension of High Court Judges is charged on the Consolidated Fund of India. [500E]

JUDGMENT:

ORIGINAL JURISDICTION: Civil Miscellaneous Petition No. 18044 of 1980.

IN

Writ Petition No. 16093 of 1984.

(Under Article 32 of the Constitution of India ). Tapash Ray. Ms. Pratibha Jain and S. K. Jain for the Petitioner-.

K. Parasaran, Solicitor General, Kuldip Singh. Additional Solicitor Genera1 and Ms. A. Subhashini for the Respondent.

The following Order of the Court was delivered:

O R D E R

This is an application by Shri M.L. Jain, retired Judge of the Delhi Court questioning the constitutional propriety and legality of the order issued by the Pay & Accounts Officer, Delhi Administrative (High Court & Miscellaneous), New Delhi dated July 12) 1938 purporting to fix his pension at Rs.26,000 per annum and for an appropriate direction for re-determination of his pension and other pensionary benefits in view of the change in law brought about by High Court Judges (Conditions of Service) Amendment Acts, 1996 and 1988 (Act Nos. 38 of 1986 and 20 Of 1986). This order must be read in continuation of the earlier order delivered by this Court in M. L. Jain & Anr; v. Union of lndia, [19t3- 5] 2 SCC 355 by which this Court made a direction for payment of pension to the petitioner at Rs.21,5000 per annum in view of the two ceilings then operating against him, viz (a) a ceiling under the Rajasthan Rules providing that the maximum amount of pension should not exceed Rs. 1,500 per annum and (b) that under cl. (b) of Paragraph 2 of Part 111 of the First Schedule of the High Court Judges (Conditions of Service) Act, 1954.

According to the petitioner, in view of the change in law, the amount of pension payable to him has to be re- calculated and re-determined at Rs.41,600 per annum w.e.f. January, 1. 1986 which amount has to be further increased to Rs.46,100 per annum w.e.f. November 1, 1986 in place of the pension of Rs. 21,500 as earlier directed. he question hat falls of determination in this order is whether consequent upon the improvement of the service conditions including pension and other benefits by the High Court Judges (Conditions of Service) Amendment Acts, 1986 and 1988 and pursuant to the office Memoranda issued by the Government of India, Ministry of Personal, Public Grievances & Pensions, Department of Pensions & Pensioners welfare dated April 14, 1987 and April 16, 1987 the pension of the petitioner Shri M.L. Jain has o be re-calculated and e- determined at s. 41,600 per annum w.e.f. January 1, 1986 which amount has to be further inceases to Rs. 46,100 pew annum w.e.f. November 1,1986 in place of the pension s. 21,500 as ealiear directed In view of the impoance of the question involved, we requested Sri K Parasaran, learned Attorney General to assist the Court. We are greatly be holden to the Leaned Attorney General of the assistance that he has rendered.

The facts are uncontroverted. The petitioner has had a long and distinguished career in judicial service extending over a period of 38 years and 9 months. including 9 years and 21 days as a Judge of the High Court. When the petitioner was appointed as a Judge of the High Court of Rajasthan on July 1, 1975, he was a member of the Rajasthan Higher Judicial Service having been a District & Sessions Judge for the period from November 9, 1970 to July 1, 1975. On his appointment as a Judge of the Rajasthan High Court, the petitioner opted, for the purpose of his pension, for Part III of the First Schedule to the High Court Judges (Conditions of Service) Act, 1954. On July 23, 1978 the petitioner was transferred as a Judge of the High Court of Delhi under Art. 222 (1) of the Constitution. On July 24, 1978 the petitioner was sworn in as a Judge of the Delhi High Court and continued to hold that office till the date of his retirement on July 21, 1984."

In order to appreciate the point in its true perspective, it is necessary to set out the relevant constitutional and other statutory provisions as well as the changes brought about by the High Court Judges (Conditions of Service) Amendment Acts, 1986 and 1988, as also the Office Memoranda issued by the Government of India, Ministry of Personnel, Public Grievances and Pensions, Department of Pension and Pensioners Welfare dated April 14, 1987 and April 16, 1987 for upward revision of pension and rationalisation of the same.

Art. 221 of the Constitution enacts:

"221. Salaries etc. of Judges- (1) There shall be paid to the Judges of each High Court such salaries as may be determined by Parliament by law and, until provision in that behalf is so made, such salaries as are specified in the Second Schedule.

(2) Every Judge shall be entitled to such allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament and, until so determined, to such allowances and rights as are specified in the Second Schedule: Provided that neither the allowances of a Judge nor his rights in respect of leave of absence or pension shall be varied to his advantage after his appointment. " Under cl. (i) every Judge of a Nigh Court is thus entitled to such salaries as may be determined by Parliament by law. By cl. (2) such a Judge shall be entitled to such allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament. Until such a law is made, every such Judge shall be entitled to such salaries, allowances and rights as are specified in the Second Schedule.

The relevant provision relating to the petitioner Shri M.L. Jain is the one contained in s. 15 (1) (b)of the High Court Judges (Conditions of Service) Act, 1954 which is a law made by Parliament regulating his right to pension and it reads:

"15. Every Judge

(a) ***** ******

(b) who is not a member of the Indian Civil Service but has held any other pensionable civil post under the Union or a State, shall, on his retirement, be paid a pension in accordance with the scale and provisions in Part III of the First Schedule";

It is unquestionable that while the salary of Judges of the High Court charged on the Consolidated Fund of the State, the pension of such High Court Judges is charged on the Consolidated Fund of lndia.

Paragraph 2 of Part III of the First Schedule as amended by Act 35 of 1976, which was in force on July 1, 1975 when the petitioner was first appointed as a Judge or the Rajasthan High Court, was in these terms:

"2. The pension payable to such a Judge shall be- (a) the pension to which he is entitled under the ordinary rules of his service if he had not been appointed a Judge, his service as a judge being treated as service therein for the purpose of calculating that pension ; and (b) a special additional pension of Rs. 700 per annum in respect of each completed year of service for pension but in no case such additional pension together with the additional or special pension, if any, to which he is entitled under the ordinary rules of his service; shall exceed Rs.3,500 per annum."

By Act 36 of 1986 in cl. (b) of Paragraph 7 of Part III of the First Schedule of the Act, the special additional pension of Rs.700 has been raised to Rs. 1,600 and the ceiling of Rs.3,500 to Rs. 8,000 respectively w.e.f. November 1, 1986. There is however a proviso beneath cl. (b) which reads:

"Provided that the pension under clause (a) and the additional pension under clause (b) together shall in no case exceed Rs. 54,000 per annum in the case of a Chief Justice and Rs. 48,000 per annum in the case of any other Judge."

Rule 2 of the High Court Judges Rules, l956 as amended till March 18,1987 which governs all Service Judges, provides:

"2. Conditions of service in certain cases- The Conditions of service of a Judge of a High Court for which no express provision has been made in the High Court Judges (Conditions of Service) Act, 1954 shall be, and shall from the commencement of the Constitution be deemed to have been, determined by the rules for the time being applicable to a member of the Indian Administrative Service holding the rank of Secretary to the Government of the State in which the principal seat of the High Court is situated: Provided that, in the case of a a Judge of the High Court of Delhi, the condition of service shall be determined by the rules for the time being applicable to a member of the Indian Administrative service on deputation to th Government of India and holding the rank of Joint Secretary to the Government of India stationed at New Delhi." It would be convenient at this stage to refer to the decisions taken by the Government of India, Ministry of Personnel, Public Grievances & Pensions, Department of Pension & Pensioners Welfare. On March 18, 1987 the Government of India by Resolution No. 2/13/87-PIC accepted the recommendations of the Fourth Central Pay Commission for upward revision of pension and pensionary benefits. It was applicable to all pension to all pensioners family pensioners who were drawing pension family pension under the C.C.S. (Pension) Rules, 1972. C.C.S. (Extraordinary Pension) Rules and the corresponding rules applicable to Railway Pensioners and pensioners of All India Service.

In pursuance of the aforesaid Resolution, the Government of lndia, Ministry of Personnel, Public Grievances & Pensions, Department of Pension & Pensioners Welfare issued an Office Memorandum No. 2/1-87-PIC-II dated April 14, 1987 bringing about modifications in the rules regulating Pension, Death-cum-Retirement Gratuity and Family Pension under the C.C.S. (Pension) Rules, 1972, Rule 3.1 of the Rules as modified made the revised provisions applicable to Government servants who retired or died in harness on or after January 1, 1986. Rule 5.2 provided that pension shall be calculated at 50% of average emoluments in all cases instead of under the slab formula given in cl. (a) of sub-r. (2) of r. 49 of the Pension Rules.

By a subsequent Office Memorandum dated April 16, 1987 the MInistry of Personnel, Public Grievances and Pension, Department of Pension and Pensioners Welfare issued a scheme for rationalisation of pension structure for pre-January 1, l986 pensioners. It applied to all pensioners belonging to the classes enumerated above, including officers of the Indian Civil Service who retired from service on or after January 1 1973. Paragraph 2.2. of the Office Memorandum provides that separate orders would be issued by the Ministry of Defence in regard to Armed Forces Pensioners/Family Pensioners. Paragraph 2.3 is a provision with regard to retired Judges of the Supreme Court and the High Courts and it provides:

"These orders do not also apply to retired High Court and Supreme Court Judges and other constitutional/statutory authorities whose pension etc. is governed by separate orders. Necessary orders in their case will be issued by the respective administrative authorities."

Paragraph 5 of the aforesaid Office Memorandum provides for payment of additional benefit equal to the difference between half of the emoluments and the basic pension in view of re-calculation of pension at 50% of average monthly emoluments in place of the slab system. It further provides that there would be no upper ceiling on the amount of pension now so worked out.

On December 18, 1987 the Government of India, Ministry of Law & Justice, Department of Justice purported to issue a letter addressed to (1) Accountants General, All States, (2) The Pay & Accounts Officer, Supreme Court of India, New Delhi and (3) The Pay & Accounts Officer No. XIV, Delhi Administration, New Delhi giving direction as to the manner in which the basic pension of the Supreme Court Judges and High Court Judges governed by the provisions of Part III of the First Schedule to the High Court/Supreme Court Judges (Conditions of Service) Act, 1954/1958 is to be determined, the relevant portion whereof reads :

"The ordinary pension admissible to High Court/Supreme Court Judges under para 2(a) of Part-III of the First Schedule/Schedule to the High Court/Supreme Court Judges (Conditions of Service) Act, 1954/1958, respectively, may be revised with effect from 1. 1. 1986 as in the case of the employees of Central Government or from some other date, the respectively State Governments may decide to adopt these orders or an independent order issued by them, if any to grant the benefit of increased pension on similar lines to their employees including members of Higher Judicial Service."

The said letter goes on to say:

"This is subject to the condition that the total pension including additional pension admissible to such Judges under para 2(a) and (b) of Part-III of the First Schedule/Schedule to the High Court/Supreme Court Judges (C/S) Act, 1954/1958 shall not exceed Rs.48,000 p.a. Rs.54,000 p.a. and Rs. 60,000 p.a. in the case of Judge, High Court, Chief Justice, High Court/Judge, Supreme Court of India and the Chief Justice of India, respectively."

We fail to appreciate the propriety of the aforesaid letter of the Ministry of Law & Justice giving liberty to the different State Governments to deny the benefit of the revised pension to the Service Judges consequent upon the enactment of Act 38/86 and 20/88 read along with the aforesaid Office Memoranda issued by the Government of India, Ministry of Personnel, Public Grievances & Pensions, Department of Pension & Pensioners Welfare dated April 14, 1987 and April 16, 1987 and r. 2 of the High Court Judges Rules, 1956. Virtually this means that the State Governments may or may not issue any orders in of Paragraph 2.3 of the Office Memorandum dated April 16, 1987 appointing a date for grant of revised pension, or appoint different dates for the grant of revised pension to the retired High Court Judges who had opted to be governed by Part III of the First Schedule of the Act. Such a direction, in our view, was constitutionally impermissible as offending Act. 14 of the Constitution. It is tantamount to denial of equal treatment.

to persons belonging to the same class without any national basis.

It was urged on behalf of the petitioner that the Pay & Accounts Officer should not have denied the petitioner the benefit of the higher pension he was entitled to in the light of the changed provisions of law and that paragraph 2.3 of the Memorandum had no relevance to the petitioner's case because the petitioner, by reason of his transfer from the Rajasthan High Court to the Delhi High Court under Act. 222 of the Constitution became automatically a judge of the Delhi High Court and therefore he was governed by the first proviso to r. 2 of the High Court Judges (Conditions of Service) Rules, 1955 which provides that in the case of a Judge of the High Court of Delhi and a Judge of the High Court of Punjab & Haryana, the conditions of service shall be determined by the Rules for the time being applicable to a Member of Indian Administrative Service on deputation to the Government of India holding the rank of Joint Secretary to the Government of India stationed at New Delhi. It was urged by reason of this position the petitioner was entitled to the benefits of pension in restructured scale set out in the Memorandum. It was further stated that Iikewise the action of the Pay & Accounts Officer in reckoning the basic pension of the petitioner at Rs. 1,500 per month as provided in column 1 to the Table appended to the Memorandum, and not at Rs.2,925 merely on the strength of the earlier position noticed in M. L. Jain 's case, despite the changes brought about by Act 38 of 1986, and Act 20 of 1988 and in depriving him of the benefit of additional relief of Rs.250 per month w.e.f. January 1, 1986 was wholly misconceived and unwarranted. We not only found the contentions of the petitioner to have force but also to be irrefutable ones. To bring out more forcefully how the governmental action is patently arbitrary and as to how he had been subjected to discriminatory treatment without there being any justifiable basis for it the petitioner brought to our notice the higher rates of pension the Pay & Accounts Officer had fixed for some other Judges of the Delhi High Court even though their overall period of service and their tenure of office as a Judge of the High Court was lesser than his. While the Pay & Accounts Officer has fixed the pension of the petitioner at Rs. 26,000 per annum, the very same authority had fixed the pension of Shri J.D. Jain at Rs.46,340 and that of Shri D.R. Khanna at Rs.44,684 per annum who had also retired as Judges of the Delhi High Court. They had put lesser periods of total-service as well as service as High Court Judges. Shri J.D. Jain had put in judicial service for a period of 35 years, 7 months and 19 days including 6 years 5 months and 2 days as a Judge of the Delhi High Court. Shri D.R. Khanna had a total period of judicial service of 34 years, 110 months and 25 days including 5 years, 11 months and 28 days as a Judge of that High Court. We must confess that it surpasses our comprehension as to on what rational basis the Pay & Accounts Officer deemed it just and proper to accord differential treatment to the petitioner and fixing his pension at the low figure of Rs.26,000 when other Judges of the same High Court who had put in lesser number of years of service were held entitled to pension at much higher rates.

The State Government of Uttar Pradesh by its notification no. 14/1/39/84 CX (1) dated May 31, 1988 has brought about a change in cl. (b) of Paragraph 2 of Part III of the First Schedule and revised the rates of pension w.e.f. January 1, 1986 in terms of the aforesaid Memorandum. Accordingly, a Judge of the Allahabad High Court Shri J.P. Chaturvedi who, retired on February 7, 1981 had his pension fixed at Rs.46, 100 per annum. We are given to understand that he had put in much shorter period of service as compared to the petitioner. We commend the action of the State Government of Uttar Pradesh in issuing a Notification as abovesaid to clarify the position and to ensure the implementation of the change brought about in cl.(b) of Paragraph 1 of Part III of the First Schedule and would direct all the State Governments to issue orders in similar terms.

The learned Attorney General with his usual fairness frankly conceded that there is patent disparity in the pension fixed for the petitioner at Rs.26,000, Shri Kuldip Singh, learned Additional Solicitor General appearing on behalf of the Union of India assured us that the disparity disparity would be removed as expeditiously as possible and the authorities would endeavour to pay th difference to the petitioner without delay. The learned Attorney General was kind enough to say that he would advise the Government to bring about party between the pension drawn by the petitioner and the other Judges in India.

We refrain from expressing any opinion as to the effect of lifting of the ceiling on that special additional pension Rs. 8,000 per annum placed by cl.(b) of paragraph 2 of Part III the First Schedule. The question really does not arise for our consideration at the moment and is left open. In the result, C.M.P. No. 18044/88 is allowed. The impugned of the Pay & Accounts Officer dated July 12, 1988 is quashed. We direct the Union of India as well as the Pay & Accounts Officer, Delhi Administration (High Court & Miscellaneous), New Delhi to re-fix the pension of the petitioner at Rs.4l,600 per annum w.e.f. January 1, 1986 and at Rs.46, 100 per annum w.e.f. November 1, 1986. We further direct that the arrears of the difference in the amount of pension be paid to the petitioner as expeditiously as possible and in any event, not later than two months from today. The petitioner shall also be entitled to all other consequential benefits.

R.S.S. Petition allowed.

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 28.6.2011

CORAM:

THE HONOURABLE MR.JUSTICE ELIPE DHARMA RAO

AND

THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN

Writ Appeal No.1209 of 2007

1.G.Palani

2.Radha S.Kumar

3.K.B.Sivakumar

4.K.N.Rangasamy

5.V.V.Venkitaramani

6.S.Radhakrishnan

7.R.Ramachandran

8.G.Sivaramakrishnan

9.S.Krishnamoorthy

10.M.R.Visweswaran

11.V.Sundaresa Davey

12.T.S.Rangamani

13.N.Narayanaswamy

14.B.G.Krishnamurthy

15.T.V.Srinivasan

16.Mrs.K.Santhalakahsmi

17.R.Sampath ... Appellants

Vs.

1.Bank of Baroda,

rep.by The Chairman & Managing Director,

Central Office,

Baroda Corporate Centre,

'G' Block, C-26,Bandra-Kurla Complex,

Bandra East, Mumbai-400051.

2.The Competent Authority for Pension Regulations,

(Assistant General Manager),

Bank of Baroda,

Head Office, Baroda House,

P.B.No.506, Mandvi,

Baroda-390006.

3.Union of India,

represented by its Secretary to

the Banking Division,

Ministry of Finance,

New Delhi-110001. ... Respondents

* * *

Writ Appeal preferred under clause 15 of the Letters Patent, as against the order of the learned single Judge dated8.8.2007 made in W.P.No.8945 of 2001.

* * *

For appellants : Mr.AL.Somayaji,

Senior Counsel for

Mr.C.R.Chandrasekaran

For R.1 & R.2 : Mr.A.P.S.Kasturi Rangan for

M/s.Sampathkumar and

Associates

* * *

JUDGMENT

ELIPE DHARMA RAO, J.

The appellants are the retired employees of the respondents 1 and 2/Bank of Baroda between 30.11.1998 and 31.8.2000, either on superannuation or on voluntary retirement.

2. Originally, they have initiated these writ proceedings praying to issue a writ of mandamus directing the second respondent to pay the difference in basic pension and additional pension and commutation of pension with interest at a rate to be determined by this Court, in terms of the Bank of Baroda (Employees') Pension Regulations, 1995 (hereinafter referred to as the Regulations).

3. After the respondents brought in an amendment to the Regulations in April, 2003, by adding sub-clause (c) after 2(S)(b) with retrospective effect from 1.4.1998, the appellants have filed a petition to amend the prayer before the learned single Judge and on the same having been allowed, the prayer has been amended to one of a writ of Declaration, to 'declare that sub-clause (c) of clause (S) of Regulation 2 of Bank of Baroda (Employees) Pension Regulations, 1995 is null and void and direct the second respondent to pay the difference in basic pension and additional pension and commutation of pension with interest at a rate to be determined by this Court, in terms of the Bank of Baroda (Employees') Pension Regulations, 1995'.

4. From the materials placed on record, it is seen that Pension scheme was first introduced in 1995 in Banks and thereafter by virtue of the Joint Note signed by the Indian Banks' Association with various Bank Officers Unions on 14.12.1999, on salary revision for officers in Public Sector Banks, a salary revision was proposed and accepted.

5. Pay scales were revised from 1.4.1998 by the first respondent Bank and by the time they were implemented, according to the appellants, they had retired and hence they have been paid after their retirement, the arrears of wages consequent upon the revision. In this Joint Note, clause 6 defined 'pension' as:

'Pay' for the purpose of pension shall be the aggregate of pre-revised pay and Dearness Allowance thereon at CPI (consumer price index) 1616 points."

According to the appellants, this clause has resulted in payment of reduced amount of pension to them since the respondents 1 and 2 have not taken the last ten months enhanced salary for calculating the pension, but only the earlier unenhanced salary, citing the Joint Note. This, according to the appellants, is illegal and hence they have filed the present writ proceedings, the prayer of which has been subsequently amended, as stated above.

6. Since the learned single Judge has dismissed their plea, the appellants have come forward to prefer this appeal.

7. We have heard, at length, the submissions of the learned senior counsel appearing for the appellants and the learned standing counsel for the respondents 1 and 2.

8. The learned senior counsel appearing for the appellants would argue that once the pay revision has been effected, the respondents should take into consideration the last ten months salary to count the pension of the employees and the impugned amendment brought in by the respondents whereby 'pay' was defined only for the purpose of payment of reduced pension to the appellants, contrary to the pension regulations when they retired, as compared to payment of provident fund based on the revised pay from 1.4.1998, is illegal. Referring the act of the respondents an illegal one and need to be interfered with by this Court, the learned senior counsel would rely on a Three Judge Bench judgment of the Honourable Apex Court in SALABUDDIN MOHAMED YUNUS vs. STATE OF ANDHRA PRADESH [1984 LAB I.C. 1738]. In this case, a Government servant in the State of Hyderabad, who was governed by Rule 4 and 299(1)(b) of the Hyderabad Civil Service Rules and was entitled to receive pension of Rs.1,000/=, was retired before 1.11.1956 i.e. the date of reorganisation of States. But, by the subsequent amendment brought in, his pension was brought down to Rs.857.15 with retrospective effect by notification dated 3.2.1971. In these circumstances, the Honourable Apex Court has held the said action of reducing the pension as illegal 'as the right to receive pension flowed immediately on retirement and was property within meaning of Articles 19(1)(f) and 31(1) of the Constitution i.e. a fundamental right and could not be taken away either under Clause (5) of Article 19(1) and such deprivation was also not justified under Article 31(1) since the same could not be said to be for public purpose and no compensation was being paid to the public servant."

9. The learned senior counsel would also place reliance on a judgment of a Division Bench of Kerala High Court in SYNDICATE BANK AND OTHERS vs. CELINE THOMAS AND OTHERS [2006-II-LLJ 413]. In this case, the employer Bank denied to its employees who retired between November 1, 1992 and October 31, 1994, gratuity payable to them on the basis of revised pay granted after their retirement with retrospective effect, by invoking provision in a Memorandum of Understanding reached between Nationalised Banks and employees in June 1995. In these circumstances, the Division Bench of the Kerala High Court has held:

"... the payment of gratuity is a statutory benefit. It had to be computed on the basis of monthly pay of an employee. Memorandum of Understanding could not meddle with statutory prescriptions."

10. Citing the above judgments, the learned senior counsel for the appellants would argue that unfortunately, the learned single Judge has not considered these facts, leading to erroneous conclusions having been arrived at by him and would pray to allow this writ appeal.

11. On the other hand, the learned standing counsel for the respondents 1 and 2 would argue that the power of the Bank to amend the Pension Regulations is derived from Section 19(1) of the Banking Companies (Acquisition and Transfer of Undertakings) Act and in this case, by virtue of a settlement entered into by the Indian Banks' Association with the Unions, revised pay scales have been brought into effect from 1.4.1998 and regarding the persons like the appellants, it has been agreed that such enhancement in the emoluments is only for the sake of salary and not for computing the pension. The learned counsel would further argue that pursuant to the revision effected, the appellants have also received enhanced pay scales, but when it came to the matter of pension, they started agitating, which should not be encouraged by this Court. The learned counsel would further argue that the present writ proceedings are not maintainable on account of laches since the appellants have sought to challenge the definition of 'pay' in the Joint Note dated 14.12.1999 and Bipartite Settlement dated 27.3.2000 almost four to five years after the same was agreed upon by the Officers Association representing a majority of the bank officers at the apex industry level and such amendment as agreed being otherwise notified thorough circulars to all the offices by the Bank. He would further argue that there is no contradiction between the Joint Note/Bipartite settlement and the Pension Regulations. He would further argue that while negotiating the next settlement with the officers and the workmen, IBA, after mutual agreement with the representative Unions/Associations, has signed a settlement dated 2.6.2005 wherein it has been agreed between the parties that in respect of retirees retiring on or after 1.5.2005, 'average emoluments' as defined in Pension Regulations for the purpose of pension, be calculated with reference to the pay drawn during the last ten months of service of the employee's service in the Bank.

12. In support of his arguments, the learned counsel would place reliance on the following judgments:

1. TATA ENGINEERING AND LOCOMOTIVE COMPANY LIMITED vs. THEIR WORKMEN [(1981) 4 SCC 627]

2. NATIONAL ENGINEERING INDUSTRIESLTD. vs. STATE OF RAJASTHAN AND OTHERS [AIR 2000 SC 469],

3. I.T.C.LTD. WORKERS WELFARE ASSOCIATION AND ANOTHER vs. THE MANAGEMENT OF ITD LTD. AND OTHERS [AIR 2002 SC 937] and

4. TRANSMISSION CORPORATION A.P. LTD. & OTHERS vs. P.RAMACHANDRA RAO & ANOTHER.

13. In the first judgment cited above, a Three Judge Bench of the Honourable Apex Court has held that:

"A settlement cannot be weighed in any golden scales and the question whether it is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication. If the Settlement had been arrived at by a vast majority of the concerned workers with their eyes open and was also accepted by them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding the reference merely because a small number of workers were not parties to it or refused to accept it, or because the Tribunal was of the opinion that the workers deserved marginally higher emoluments than they themselves thought they did."

14. In the second judgment cited above, another Three Judge Bench of the Honourable Apex Court has held:

"A settlement of dispute between the parties themselves is to be preferred, where it could be arrived at, to industrial adjudication, as the settlement is likely to lead to more lasting peace than an award. Settlement is arrived at by the free will of the parties and is a pointer to there being goodwill between them. When there is a dispute that the settlement is not bona fide in nature or that it has been arrived at on account of fraud, misrepresentation or concealment of facts or even corruption and other inducements it could be subject matter of yet another industrial dispute which an appropriate Government may refer for adjudication after examining the allegations as there is an underlying assumption that the settlement reached with the help of Conciliation Officer must be fair and reasonable."

15. In the third judgment cited above, the Honourable Apex Court has held:

"A settlement which is a product of collective bargaining is entitled to due weight and consideration, more so when a settlement is arrived at in the course of conciliation proceeding. The settlement can only be ignored in exceptional circumstances viz. if it is demonstrably unjust, unfair or the result of mala fides such as corrupt motives on the part of those who were instrumental in effecting the settlement. That apart, the settlement has to be judged as a whole, taking an overall view. The various terms and clauses of settlement cannot be examined in piecemeal and in vacuum. In the instant case it cannot be said that the settlement which is otherwise valid and just suffers from any legal infirmity merely for the reason that one of the clauses in the settlement extends the benefits of life pension scheme only to the employees retiring after a particular date i.e. 24.8.1986. Exclusion of workmen retiring before that date is no ground to characterise the settlement as unjust or unfair. Moreover the allegations of mala fides such as corrupt motives have not been levelled against anyone and that aspect becomes irrelevant."

16. In the fourth judgment cited, the Honourable Apex Court has observed that 'exclusion of workmen retiring before date fixed in the settlement entered with recognised union is no good ground to characterise settlement as unjust or unfair, more so when there is no challenge to legality of settlement.'

17. Relying on the above judgments, the learned standing counsel for the respondents 1 and 2 would argue that since the impugned action has been resorted to on the part of the respondents 1 and 2 pursuant to a settlement entered into between the Unions and the Indian Banks' Association, the above judgments of the Honourable Apex Court squarely apply to the case on hand and would pray to dismiss this writ appeal.

18. The Bank of Baroda (Employees') Pension Regulations, 1995 are framed in exercise of the powers conferred by clause (f) of sub section (2) of Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act and thus, they are having statutory force in terms of the judgment of the Honourable Apex Court in VIDYA DHAR PANDE vs. VIDYUT GRIH SIKSHASAMITI [(1988) 4 SCC 734].

19. Since the matter involves the consideration of the terms 'average emoluments' and 'amount of pension' as defined in Regulations 2(d) and 35(2), they are extracted hereunder for easy reference:

"2(d): 'Average Emoluments' means the average of the pay drawn by an employee during the last ten months of his service in the Bank"

"35. Amount of pension:

(1) ....

(2) In the case of an employee retiring in accordance with the provisions of the Service Regulations or Settlement after completing a qualifying service of not less than thirty three years, the amount of basic pension shall be calculated at fifty per cent of the average emoluments."

20. A plain reading of both these Regulations would make it clear that after completing a qualifying service of not less than thirty three years, the amount of basic pension shall be calculated at fifty per cent of the average emoluments i.e. average of the pay drawn by an employee during the last ten months of his service in the Bank. But, in the case on hand, the straight case of the appellants is that though their pay has been revised from 1.4.1998, this pay hike has not been taken into count by the respondents on the ground that it was not agreed upon between the Unions and the Indian Banks' Association. If we apply the clear meaning of Regulations 2(d) and 35(2), this action of the respondents 1 and 2, must be held as a non-est one. But, the respondents 1 and 2 take shelter under the Joint Note entered into between the Unions and the Indian Banks' Association, saying that whatever has been accepted in the Joint Note could alone be insisted upon by the appellants and having already enjoyed the pay hike and received the arrears, the appellants are not justified in seeking to quash the impugned action of the respondents 1 and 2.

21. When the Pension Regulations strictly define that the last ten months emoluments should be taken into count for calculating the pension and when it is not at all the case of the respondents 1 and 2 themselves that the Regulations 2(d) and 35(2) have also been suitably amended, to achieve the purpose of impugned action, we cannot attach any logic to the differentiation introduced into the definition of the term 'pay' by the impugned action of the respondents since by virtue of this impugned action of the respondents 1 and 2, a legal conflict and contradiction has been created between the terms of Regulations, particularly 2(d) and 35(2), which are having the statutory force and the terms of the impugned amendment.

22. The respondents have relied on the judgments to the effect that they have the power to prescribe a cut-off date and that the settlements entered into between the workers unions and the Management by virtue of collective bargaining cannot be thrown out simply. We have no quarrel with this well established principle of law. But, in the case on hand, it is not that unbridled power of the respondents, that is in dispute, but the challenge is to the way in which an unusual meaning has been sought to be introduced by the respondents, quite against the very purport of the Pension Regulations.

23. It is the strong case of the appellants that because of this unusual amendment brought into the Regulations by the respondents, they have been put to a loss of pension ranging from Rs.565/= to Rs.1380/= p.m. and commutation ranging from Rs.22,250/= to Rs.62,160/=. This contention of the appellants was attempted to the pooh-poohed by the respondents on the ground that the Joint Note pertain only to the salary and not to the pension and that the appellants having accepted the pay revision and also received the arrears, cannot now turn around and say that they be given both the benefits, quite against the Joint Note.

24. At this juncture, the legal question that would fall for consideration is 'whether a settlement entered into by the Unions, contrary to the Regulations, would be legal'?

25. As has already been observed by us supra, in the case on hand, though the Joint Note talks about the pension, there is no mention therein about the Regulations 2(d) and 35(2). Therefore, it goes without saying that the 'average emoluments' for the purpose of counting the pension remained as the 'pay drawn by an employee during the last ten months of his service in the Bank' and that the basic pension shall be calculated at fifty per cent of the average emoluments. In the absence of any amendment to these Regulations, the attempt made on the part of respondents, curtailing this benefit to the appellants and such other similarly standing persons, by introducing the impugned amendment is illegal. It would have been a completely different thing, had the Joint Note agreed for all corresponding amendments, including the definitions for Regulations 2(d) and 35(2), which is not the case herein. Therefore, without any hesitation we can say that the impugned amendment brought in by the respondents 1 and 2, quite against the Regulations 2(d) and 35 (2) and the very intent and purport of the Regulations is null and void.

26. Probably realising this, this mistake has now been cured by the respondents in the settlement arrived at by them with the representative Unions/Associations on 2.6.2005, wherein it has been agreed between the parties that in respect of retirees, retiring on or after 1.5.2005, 'average emoluments' as defined in Pension Regulations for the purpose of pension, be calculated with reference to the pay drawn during the last ten months of service of the employee's service in the Bank. While this being the position, we have no hesitation to hold that there is complete justification in the prayer of the appellants, since the respondents 1 and 2 have tried to make an illegal differentiation between 'salary' and 'pension', further ignoring to honour the Regulations 2(d) and 35(2). It is also to be held that the receipt of the arrears of pay by the appellants cannot, in any way, stand in their way of challenging the impugned action of the respondents 1 and 2, since being contrary to the very purport and intention of the Regulations.

27. The learned single Judge has not gone into this aspect of the case, but, has proceeded to dissect the case keeping in view the unassailable fact that the respondents are having power to amend the Regulations, by due process of law.

28. The other argument advanced on the part of the respondents 1 and 2 that the writ proceedings are liable to be dismissed on account of laches also cannot be accepted, since there is no undue delay. To explain, the Joint Note on conclusions of discussions between IBA and Officers Associations is dated 14.12.1999 and the present writ proceedings have been initiated on 23.4.2001.

For all the above reasons, this Writ Appeal is allowed, setting aside the order of the learned single Judge. The respondents 1 and 2 are directed to calculate and pay the difference of monetary benefits to the appellants within twelve weeks from from the date of receipt of a copy of this judgment. But, the prayer of the appellants to pay the difference in basic pension and additional pension and commutation of pension with interest at a rate to be determined by this Court, cannot be ordered and the same stands rejected. No costs.

Rao

To

The Secretary to the Union of India,

Banking Division,

Ministry of Finance,

New Delhi 110001

SCA/1168/2010 1/2 ORDER

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

SPECIAL CIVIL APPLICATION No. 1168 of 2010

=========================================================

LIC PENSIONER'S ASSOCIATION THROUGH ITS PRESEDENT & 5 - Petitioner(s)

Versus

LIFE INSURANCE CORPORATION OF INDIA & 3 - Respondent(s)

=========================================================

Appearance :

MR GT PARIKH for Petitioner(s) : 1 - 6.

NOTICE SERVED for Respondent(s) : 1 - 4.

MR AK CLERK for Respondent(s) : 1,

MR VIBHUTI NANAVATI for Respondent(s) : 2,

MS DHARMISHTA RAVAL for Respondent(s) : 3,

=========================================================

CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD

Date : 20/09/2010

ORAL ORDER

Heard learned advocates appearing on behalf of respective parties.

Learned advocate Mr. Clerk submitted that on behalf of respondent No.1 LIC, affidavit in reply is filed in present petition by one Mr. J.B. Shukla, Manager (L&HPF), where, following averments are made in Para 11, Page 49, read with Circular dated 18th May 2010, Page 51.

11. Re: Para 8: The respondent, LIC of India, vide circular No. ZD/1153/ASP/2010 dated 18.05.10 has decided to share 75% of the premium for retired employees for Group Mediclaim Policy from 01.04.10. However, other averments and submissions contained therein are denied.

He submitted that accordingly, main grievance of present petitioner is satisfied by Respondent No.1 LIC.

Now, for remaining grievance, let petitioner may approach the respondent No.1 LIC by filing detailed representation within a period of one month from the date of receiving copy of present order. As and when respondent No.1 LIC received such representation from petitioner in respect of remaining grievance, let respondent No.1 LIC may examine and consider it and thereafter to pass appropriate reasoned order in accordance with law and policy within a period of three months from the date of receiving copy of such representation from petitioner and communicate decision to petitioner immediately.

In view of above observation and direction, present petition is disposed of by this Court without expressing any opinion on merits.

[H.K. RATHOD, J.]

#Dave

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN

AT JAIPUR BENCH, JAIPUR

ORDER

1. S.B. Civil Writ Petition No.6676/1998

Krishna Murari Lal Asthana

Vs.

Union of India & Ors.

2. S.B. Civil Writ Petition No.654/2007

Krishna Murari Lal Asthana & Ors.

Vs.

L.I.C. of India & Ors.

Date of Order : 12th January, 2010

HON'BLE MR. JUSTICE M.N. BHANDARI

Mr.Abhinav Sharma, Ms.Anita Aggarwal,G.C. - for petitioners

Mr. Anurag Aggarwal, Mr.Manoj Singh Ragav

Mr.S.S. Raghav - for respondents

BY THE COURT:

REPORTABLE

These two writ petitions involve common issues, thus are being heard and decided by this order. The petitioners are those who retired from the service of Life Insurance Corporation of India (for short 'the LIC of India'). First ground raised by the petitioners and common in both the writ petitions is regarding discrimination in grant of pensionary benefits. It is stated that on 28.6.1995, LIC of India(Employees) Pension Rules, 1995 (for short 'the Pension Rules') were notified. The Pension Rules were made applicable to the employees, who were in service of the respondent Corporation on or after 1.1.1986, on their exercising options to be governed by the Pension Rules and refunding the contribution of provident fund with interest. For those employees, who retired after 28.6.1995, the Pension Rules were made compulsory. Chapter – IV of the Pension Rules provides rates of pension. Rule 35(2) of the Pension Rules provides that if an employee has completed qualifying service of not less than 33 years, then his pension would be 50% of the average emoluments. The grievance of the petitioners is in regard to the grant of dearness allowance, inasmuch as, dearness allowance benefit has been attached on the basic pension and not on the basic pay. To clarify the above, it is submitted that benefit of dearness allowance after revision of the pay scale in the year 1996 was provided as under:-

“Dearness formula”

Basic Pay Rate of DA for every 4 points

i) Upto Rs.4800 0.35% of pay

ii) Rs.4801 to 7700 0.25% of 4800 plus 0.29% of pay in excess of Rs.4800

iii) Rs.7701 to 8200 0.35% of 4800 plus 0.29% of difference between Rs.7700 and Rs.4800 plus 0.17% of pay in excess of Rs.7700

iv) Rs.8201 and above 0.35% of Rs.4800 plus 0.29% of difference between Rs.7700 and Rs.4800 plus 0.17% of difference between Rs.8200 and Rs.7700 plus 0.09% of basic pay in excess of Rs.8200

Aforesaid formula was available till Pension Rules came in the year 1995. Under the Pension Rules, the benefit of dearness allowance was provided in the following manner:-

Scale of Back pension Rate of dearness relief as a percentage of basic pension

per month

i) Upto Rs.2400 0.35%

ii) Rs.2401 to 3850 0.35% of Rs.2400 plus 0.29% of basic pension in excess of Rs.2400

iii) Rs.3851 to 4100 0.35% of Rs.2400 plus 0.29% of the difference between Rs.3850 and Rs.2400 plus 0.17% of basic pension in excess of Rs.3850

iv) Above Rs.4100 0.35% of Rs.2400 plus 0.29% of difference between Rs.3850 and Rs.2400 plus 0.17% of the difference between Rs.4100 and Rs.3850 plus 0.09% of basic pension in excess of Rs.4100

In view of the aforesaid, benefit of dearness allowance at the first step being 0.35% remains upto basic pension of Rs.2400/- only whereas aforesaid percentage of dearness allowance is allowed on the basic pay upto Rs.4800/-. To understand the aforesaid difference, a comparative chart was submitted by the petitioners, which is quoted hereunder:-

“Comparative Chart”

Pay upto Rate of DA/DR Pension

Upto 4800 0.35% of pay Upto 2400

From 4801 to 7700 0.29% of pay From 2401 to 3850

From 7701 to 8200 0.17% of pay From 3851 to 4100

Above 8200 0.09% of pay Above 4100

Perusal of the aforesaid Chart shows that increase in the DA/DR was less for the pensioners because the benefit of DA/DR was reduced to the extent of 50% on proportion basis from the basic pay as an employee having qualifying pensionable service of 33 years or more gets 50% of the pay as pension. Learned counsel for petitioners prayed that slab of dearness allowance should be kept the same as is payable to the employees. In other words, it should not be reduced proportionately to the basic pension. Thus, first grievance of the petitioners is in regard to reduction of benefit of dearness allowance.

The other issue raised in S.B. Civil Writ Petition No.6676/1998 – Krishna Murari Lal Asthana Vs. Union of India and Others pertains to non-grant of benefit of stagnation increment.

Learned counsel for petitioners, advancing the arguments for first issue, submitted that non-grant of due benefit of dearness allowance to the retired employees is not only arbitrary but discriminatory in nature. After filing of the writ petition by Krishna Murari Lal Asthana, the LIC itself passed a resolution in its meeting held on 24.11.2001. On realizing the mistake, the LIC decided to sort out the issue by proper remedy, but finally left it to the discretion of the Union of India to take a final decision. If the resolution dated 24.11.2001 is implemented, then grievance of the petitioners can come to an end. This is more so when the LIC is an independent body constituted under the Act of Parliament and is controlled by its Board. The Central Government cannot sit on the decision taken by the Board within the framework of the Rules. However, in the present matter, despite the Board's resolution, petitioners have not been given relief for the reason that Government of India has not taken any decision on the aforesaid resolution dated 24.11.2001. Referring to the provisions of Section 21 of the LIC Act, it was submitted that only in regard to the matter of policy involving public interest, the Central Government may issue guidelines. Thus, aforesaid provision does not bar for implementation of the resolution passed by the Board as it is not otherwise contrary to the public interest. This is more so when the pensioners who retired after 31.7.1997 are getting the benefit of dearness allowance on the basic pay and not on the basic pension, thus pensioners have been divided in two categories in a discriminatory manner. Even the cut off date fixed becomes arbitrary between the two categories of pensioners more so when benefit of dearness allowance was not a new benefit. Thus, any change in the benefit of pension has to be made without a cut off date. The legal position in that regard is quite clear. In view of the catena of judgments of the Hon'ble Apex Court, if there is a change in the benefit of existing pensioners, change has to be made effective to all without a cut off date inasmuch as cut off date in such cases are held to be arbitrary. In a case where pension is allowed for the first time, then a cut off date can be provided. My attention was drawn towards the judgment of the Hon'ble Apex Court in the case of V. Kasturi Vs. State Bank of India reported in AIR 1999 SC 61wherein aforesaid issue has been dealt with. Same view has been expressed by the Hon'ble Apex Court in the case ofUnion of India Vs. Dr. Vijayappurapu Subhayammareported in AIR 2000 SC 3113 and was even reiterated in the case of Subrata Sen Vs. Union of India reported in(2001) 8 SCC 71. In reference to aforesaid judgments, it was urged that there can be no difference in the benefit of dearness allowance to the employees retired before 31.7.1997 and those retired after the aforesaid date.

In reference to Section 21 of the LIC Act, it is submitted that a formal approval of the Government of India was not required to the Board's decision dated 24.11.2001. A reference of the judgment in the case of UGC Class-I Officers' Association Vs. University Grants Commissioner reported in 2000 (7) SLR (Delhi) 17 was made apart from the judgment of the Hon'ble Apex Court in the case of HEC Voluntary Retd. Employees Welfare Society Vs. Heavy Engg. Corporation reported in 2006 (3) SCC 708. Therein it was held that a body created under the Act or even the Government agency need not to seek approval of every decision taken by its Board for day-to-day functioning of the Company. In reference to aforesaid, it is submitted that when the Board of Directors have already taken a decision on 24.11.2001, then there is no need of its sanction by the Central Government.

Learned counsel for petitioners has further submitted that there exists anomaly even in regard to the revision of the pay scale. The benefit of revision in the pay scale from time to time was not extended to the pensioners. In view of aforesaid, even an officer retiring in the higher pay scale started getting less pension than to the employee retiring subsequently in lower pay scale. Aforesaid aspect was also considered along with the first issue, by the Board in its meeting held on 24.11.2001 and following decision was taken:-

“Executive Director (Personnel) introducing the subject mentioned that there was three different rates for different groups of pensioners at present depending on their dates of retirement, which cause considerable administrative inconvenience. Chairman pointed out that he has since received a communication from Dr. S. Ram Khanna, Board Member, which refers to his meeting with the Retirees Federation and requested examining the proposal in detailed. The Note is in line with the demands made by the Federation, viz., giving effect to the proposal from 1.11.1993 and upgradation by giving weightage of 11.25% as in the case of inservice employees. Chairman pointed out that these have been considered before placing the matter to the Board and it was felt that the same would increase the financial burden very substantially and may be unaffordable for the corporation. Chairman pointed out that the implications of the proposal made have been actuarially determined at Rs.51.37 crores and the annual outlay be in the region of 6 to 8 crores. After some discussion the Board approved the proposal and suggested that it should be implemented prospectively and after obtaining Government approval.”

In view of aforesaid decision, the respondent Corporation was under an obligation to implement the decision without further delay as formal approval was not required from the Government. In view of aforesaid, it is prayed that relief claimed in the writ petitions may be granted to the petitioners.

The prayer for grant of stagnation increment was not pressed.

Per contra, learned counsel appearing for respondent – Corporation submits that benefit of dearness allowance has been provided on rational basis, thus petitioners are not entitled to any benefit. This is more so when the benefit is as per the Rules. By virtue of the aforesaid, even if retirees are divided in two or three groups for grant of pensionary benefits, it cannot be said to be arbitrary or discriminatory in nature. The Board of Directors took a favourable decision in its meeting held on 24.11.2001, but the Central Government has not granted approval to the same till date. Thus, it could not be given effect. In view of aforesaid, so far as the respondent Corporation is concerned, it has taken a favourable decision for the employees, but on account of inaction on the part of the Government of India, the Board's decision could not be given effect for redressal of the grievance raised by the petitioners herein. Learned counsel appearing for the Union of India submits that the Board's resolution dated 24.11.2001 is pending decision before the Government of India. The LIC was otherwise free to take its own decision. Thus, in these circumstances and as per the provisions of the Act, there was no need to send the Board's resolution for its approval by the Government of India. I have considered rival submissions of the parties and scanned the matter carefully.

First issue is in regard to non-grant of due benefit of dearness allowance. It is stated that employees retiring after 31.7.1997 are getting due benefit of pension with dearness allowance whereas those retired prior to aforesaid date are being deprived to get similar benefit. The issue for consideration, thus, remains is as to whether there can be a different method for grant of pensionary benefits for the retirees based on cut off date? The legal position in that regard is quite clear. In view of the several judgments of the Hon'ble Apex Court, issue regarding cut off date for providing pensionary benefits can be summarized in the following manner:-

(i) If there are change in benefit of pension then no cut off date can be provided. The benefit on account of change in pensionary benefits would have retrospective effect.

(ii) If the pension is introduced for the first time, a cut off date can be fixed.

Aforesaid issue has been settled by the Hon'ble Apex Court in various judgments cited by learned counsel for petitioners. In the case of V. Kasturi Vs. State Bank of India (supra), it was held that if a person was eligible for pension at the time of his retirement and if he survives till the time of subsequent amendment of the relevant pension scheme, he would become eligible to get enhanced pension or would become eligible to get more pension as per new formula. Accordingly, he would be entitled to get similar benefit from the date it is given to other members. Same view has been reiterated in the cases of Dr. Vijayappurapu Subhayamma (supra), Subrata Sen(supra) and in the case of All India Reserve Bank Retired Officers' Association Vs. Union of India reported in1992 Suppl. (1) SCC 664. In Paras 9 & 10 of All India Reserve Bank Retired Officers' Association's case, aforesaid issue was decided after referring earlier judgment of theHon'ble Apex Court in the case of D.S. Nakara Vs. Union of India (AIR 1983 SC 130). Relevant Paras of aforesaid judgment are reproduced hereunder:-

“9. The scheme introduced by the Regulations is a totally new one. It was not in existence prior to its introduction with effect from November 1, 1990. The employees of the Reserve Bank who had retired prior to that date were admittedly governed by the CPF scheme. They had received the benefit of employer's contribution under that scheme and on superannuation the amount to their account was disbursed to them and they had put it to use also. There can, therefore, be no doubt that the retiral benefits admissible to them under the extant Rules of the Bank had been paid to them. That was the social security plan available to them at the date of their retirement. The Bank employees were, however, clamouring for a pension scheme, firstly on a restricted basis as a third retiral benefit and later in lieu of the CPF scheme. The Central Government had not approved of a pension scheme, as a third retiral benefit. After that proposal was spurned it appears that the employees of the Bank demanded a pension scheme on the pattern of the scheme available to Central Government employees in lieu of the CPF Scheme. This was approved by the Central Government and consequently it was introduced with effect from November 1, 1990 under the Regulations. There can, therefore, be no doubt that if the CPF retirees were not admitted to this new scheme they could not make any grievance in that behalf. They had no right to claim coverage under the new pension scheme since they had already retired and had collected their retiral benefits from the employer. But the moot question is whether it was open to the employer to grant the benefit of the pension scheme to one group of CPF retirees who had retired from Bank service on or after January 1, 1986 and deny the same to all who had retired on or before December 31, 1985. Is this division of CPF retires discriminatory and violative of Article 14 of the Constitution?

10. Nakara judgment has itself drawn a distinction between an existing scheme and a new scheme. Where an existing scheme is revised or liberalized all those who are governed by the said scheme must ordinarily receive the benefit of such revision or liberalization and if the State desires to deny it to a group thereof, it must justify its action on the touchstone of Article 14 and must show that a certain group is denied the benefit of revision/liberalization on sound reason and not entirely on the whim and caprice of the State. The underlying principle is that when the State decides to revise and liberalize an existing pension scheme with a view to augmenting the social security cover granted to pensioners, it cannot ordinarily grant the benefit to a section of the pensioners and deny the same to others by drawing an artificial cut-off line which cannot be justified on rational grounds and is wholly unconnected with the object intended to be achieved. But when an employer introduced an entirely new scheme which has no connection with the existing scheme, different considerations enter the decision making process. One such consideration may be the financial implications of the scheme and the extent of capacity of the employer to bear the burden. Keeping in view its capacity to absorb the financial burden that the scheme would throw, the employer would have to decide upon the extent of applicability of the scheme. That is why in Nakara case this Court drew a distinction between continuance of an existing scheme in its liberalized form and introduction of a wholly new scheme; in the case of the former all the pensioners had a right to pension on uniform basis and any division which classified them into two groups by introducing a cut off date would ordinarily violate the principle of equality in treatment unless there is a strong rational discernible for so doing and the same can be supported on the ground that it will subserve the object sought to be achieved. But in the case of a new scheme, in respect whereof the retired employees have no vested right, the employer can restrict the same to certain class of retirees, having regard to the fact-situation in which it came to be introduced, the extent of additional financial burden that it will throw, the capacity of the employer to bear the same, the feasibility of extending the scheme to all retirees regardless of the dates of their retirement, the availability of records of every retiree, etc. It must be realized that in the case of an employee governed by the CPF scheme his relations with the employer come to an end on his retirement and receipt of the CPF amount but in the case of an employee governed under the pension scheme his relations with the employer merely undergo a change but do not snap altogether. This is the reason why this Court in Nakara case drew a distinction between liberalization of an existing benefit and introduction of a totally new scheme. In the case of pensioners it is necessary to revise the pension periodically as the continuous fall in the rupees value and the rise in prices of essential commodities necessitates an adjustment of the pension amount but that is not the case of employees governed under the CPF scheme, since they had received a lump sum payment which they were at liberty to invest in a manner that would yield optimum return which would take care of the inflationary trends. This distinction between those belonging to the pension scheme and those belonging to the CPF scheme has been rightly emphasized by this Court in Krishena case”.

Perusal of aforesaid Paras reveals that there exists difference between introduction of new Scheme then the existing Scheme. In the light of the aforesaid, if the facts of this case are looked into, then it becomes clear that amongst the pensioners there exists discrimination more specifically when the pension has been made admissible to the employees who retired on or after 1.1.1986. In view of aforesaid, there can be no different basis for dearness allowance or other benefits to those retired on or before 31.7.1997. The existing pensioners are entitled for the benefit of dearness allowance with the same measure as is admissible to the pensioners on or after 31.7.1997. The discrimination amongst the pensioners on that count is not permissible and if there exists rule, making discrimination amongst the existing pensioners, it is held to be violative of Articles 14 & 16 of the Constitution of India.

The respondent Corporation has already taken up the aforesaid issue in its Board meeting and a resolution was also passed on 24.11.2001 after taking note of the fact that three different rates for different groups of pensioners exist depending upon their dates of retirement. It is not only causing administrative inconvenience but creating anomaly amongst the pensioners also. Accordingly, decision was taken but was made subject to final approval by the Central Government.

The question now comes as to whether such Board's resolution requires Central Government's approval or can be implemented at the level of the respondent Corporation itself. If we look to Section 21 of the LIC Act, things become very clear. For ready reference Section 21 of the LIC Act is quoted hereunder:-

“Section 21. In the discharge of its functions under this Act, the Corporation shall be guided by such directions in matters of policy involving public interest as the Central Government may give to it in writing; and if any question arises whether a direction relates to a matter of policy involving public interest, the decision of the Central Government shall be final”.

Perusal of the aforesaid Section reveals that it is only in regard to discharge of its functions under the Act, the Corporation shall be guided by such directions of the Central Government, which involve public interest and is otherwise matter of policy. In the present matter, it has not been shown that any guideline was issued by the Government of India as a policy decision in public interest. Thus, the position herein is reverse. It is the Board which passed a resolution and sent it for approval of the Government of India, which cannot be said to be as per Section 21 of the LIC Act. In fact, position would be different if the Government of India would have issued guidelines on policy matters in the public interest. This is apart from the fact that on realizing the mistake, the Board had taken a cautious decision even for administrative convenience. Thus, there was no reason to seek approval because day-to-day decisions are not required to be sent for approval of the Central Government. The law, in this regard, is settled in view of various judgments cited by learned counsel for petitioners and has not otherwise been debated by learned counsel for the respondent Corporation. Even learned counsel for Union of India had accepted the aforesaid proposition and submitted that it is only a policy decision, that too, involving public interest and not every decision of Board, which needs approval by the Central Government. It is otherwise not made clear as to what is the element of public interest involved herein, if the resolution of the Board is implemented. In fact, implementation of the Board's resolution would take away discriminatory treatment amongst the pensioners apart from keeping the LIC away from the administrative inconvenience. Thus, in the light of the aforesaid discussion, there cannot be a cut off date for existing pensioners for providing benefits but further fact is that to cure the aforesaid mistake, the Board's resolution should have been given effect to, which will otherwise redress the entire grievance of the petitioners. In the facts and circumstances of the case, I am of the view that resolution passed by the Board of LIC does not need approval of the Central Government thus the Corporation may give effect to its resolution dated 24.11.2001 to avoid discrimination amongst existing pensioners.

In light of the discussion made above, both the writ petitions are allowed. The respondent Corporation is directed to take a decision for implementation of the resolution dated 24.11.2001 passed by the Board. The respondent Corporation cannot provide different criteria for grant of dearness allowance to the existing pensioners based on cut off date i.e. 31.7.1997. The benefit arising out of the directions above would, however, be considered by the respondent Corporation so that every retired employee may get the same benefit. Costs made easy.

(M.N. BHANDARI) J.

Sunil,JrPA

The Judgement of Supreme Court on Gratuity upheld the judgement of Kerala High Court covering Class I Officers of Lic who retired between 1.4.1993 to 31.7.1994. Those who retired between 1.8.1992 and 31.03.1993 were not covered and thus they were deprived of the difference in gratuity based on revised scales . Shri M L Gandhi, along with other four officers had also filed a similar case in Jan.1997 the judgement for which was pronounced on 04.07.2007 (CWP NO. 1128 of 1997) by the Hon'ble High Court of Punjab & Haryana At Chandigarh which provided relief to all Retired Officers irrespective of date of retirement. The text of the Judgement given below for the information of all.

CWP No.1128 of 1997

IN THE HIGH COURT OF PUNJAB AND HARYANA AT

CHANDIGARH

Date of Decision: 4.7.2008

Madan Lal Gandhi and others ......Petitioners

Versus

Union of India and others .....Respondents.

Coram:

Present:

HON'BLE MR. JUSTICE HEMANT GUPTA

Shri K.K.Gupta, Advocate, for the petitioners.

Shri Rajiv Sharma, Advocate, for respondent No.1.

Shri B.R. Mahajan, Advocate, for the respondent Nos. 2 to 4.

1. Whether Reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporters or not?

3. Whether the judgment should be reported in the Digest?

HEMANT GUPTA, J.

The challenge in the present writ petition is to Rule 9 of the Life Insurance Corporation of India Class I (Revision of Terms and Conditions of Service) (Amendment) Rules, 1996, to the extent of enforcement of the amendment from 1.6.1994. In other words, the challenge is to the cut off date of 1.8.1994 and claim is for payment of gratuity irrespective of the date of retirement.

Learned counsel for the petitioners relies upon an order passed by the Hon'ble Supreme Court in Civil Appeal No. 1289 of 2007 - Life Insurance Corporation of India and others v. Retirement L.I.C. Officers Association and others, decided on 12.2.2008, wherein the appeal filed by the Life Insurance Corporation of India against the judgment of the Kerala High Court was dismissed. In the aforesaid case, the Hon'ble Supreme Court has held to the following effect:-

“25. Revision of scales of pay as also other allowances is technical in nature. When a benefit is extended to a group of employees the effect of such benefit, if otherwise comes within the purview thereof must be held to be applicable to other groups of employees also. An employee is entitled to gratuity. It is not a bounty. It is payable on successful tenure of service. Regulation 77 provides as to how the amount of gratuity is to be calculated. Regulation 51 provides for a rule of measurement. Only because it employed the word “permanent basic pay”, the same will not itself lead to the conclusion that once an employee has retired, he would not be entitled to any revision of the amount of gratuity.

26. The Chairman of the Corporation has himself given a retrospective effect to revision in scales of pay. Such a retrospective effect has also been given so as to benefit a class of employees. The employees, irrespective of the fact whether they had superannuated or not, were given the benefit of arrears of pay from Ist August, 1993. By reason of grant of such benefit both to serving employees as also the superannuated employees, both the class of employees became entitled thereto as of right. If by reason thereof, even a retired employee, as on the date of retirement, became entitled to the benefit of the revised scale of pay, the same for all intent and purpose must be taken to be the permanent basic pay, apart from other allowances, if any, which are required to be taken into consideration for the purpose of computation of the amount of gratuity.”

Later, the Hon'ble Supreme Court found that fixation of cut off date by the Chairman of the Corporation is beyond the powers conferred upon him by the Statute.

In view of the aforesaid judgment, the present writ petition is allowed in the same terms as ordered by the Hon'ble Supreme Court, with directions to the respondents to grant the consequential benefits to the petitioners within a period of three months.

04-07-2008

ds

(HEMANT GUPTA)

JUDGE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No. 973 of 2007

Manohar Lal (D) by Lrs. ....Appellants

Versus

Ugrasen (D) by Lrs. & Ors. ...Respondents

With

Civil Appeal No. 974 of 2007

Ghaziabad Development Authority ....Appellant

Versus

Ugrasen (D) by Lrs. & Ors. ...Respondents

JUDGMENT

Dr. B. S. CHAUHAN, J.

1. Both these appeals have been preferred by the appellants being aggrieved of the judgment and order of the Allahabad High Court dated 22nd July, 2003 passed in C.M.W.P. No.6644 of 1989 by which the High Court has allowed the Writ Petition filed by respondent No.1-Ugrasen quashing the allotment of land made in favour of appellant-Manohar Lal and further directed to make the allotment of land in favour of the said respondent-Ugrasen.

2. In these appeals, three substantial questions of law for consideration of this Court are involved, they are, namely:

(a) As to whether the State Government - a Revisional Authority under the Statute, could take upon itself the task of a lower statutory authority?;

(b) Whether the order passed or action taken by a statutory authority in contravention of the interim order of the Court is enforceable?; and

c) Whether Court can grant relief which had not been asked for?

3. Facts and circumstances giving rise to these appeals are that lands owned and possessed by predecessor-in-interest of private appellant Manohar Lal and respondent Ugrasen were acquired under the provisions of the Land Acquisition Act, 1894 (hereinafter referred to as the `Act'). Notification under Section 4 of the Act was issued on 13.08.1962 covering about 32 acres of land in the Revenue Estates of Kaila Pargana Loni Dist. Meerut (now Ghaziabad). Declaration under Section 6 of the Act in respect of the said land was made on 24.05.1965 along with Notification under Section 17(1) invoking the urgency clause. Possession of the land except one acre was taken on 13.07.1965 and award under Section 11 of the Act was made on 11.05.1970.

The Government of Uttar Pradesh had framed Land Policy dated 30/31.07.1963 to the effect that where a big chunk of land belonging to one person is acquired for planned development, except the land covered by roads, he shall be entitled to the extent of 40% of his total acquired land in a residential area after development in lieu of compensation. The High-Powered Committee dealing with the issue laid down that applications for that purpose be filed within a period of one month from the date of taking the possession of the land which was subsequently changed to within one month from the date of completion of acquisition proceedings.

4. Both the private parties, i.e. Manohar Lal and Ugrasen claimed that they had made applications to claim the benefit under the said policy within time. Shri Ugrasen claimed that he had submitted the application on 31.12.1966 but no action was taken on the said application. Therefore, he filed another application on 7.9.1971. Manohar Lal-appellant claimed to have filed application for the said purpose on 22.6.1969 and was allotted land bearing plot Nos. 5, 7 to 16 and 25 to 33 in Sector 3N vide order dated 27.12.1979 as per the direction of the Chief Minister of Uttar Pradesh. Shri Ugrasen filed Writ Petition No. 1932 of 1980 before Allahabad High Court challenging the said order dated 27.12.1979. Subsequently, vide order dated 7.3.1980, the land allotted to Manohar Lal was changed to Plot Nos. 25 to 33. At the time of consideration of application of Ugrasen by the State Government, the Ghaziabad Development Authority (hereinafter called GDA) vide letter dated 18.3.1980 pointed out that submission of application by Shri Ugrasen was surrounded by suspicious circumstances as it was the last entry made on 31.12.1966 and signature of the receiving clerk had been made by a person who joined service only in 1979. In the meanwhile, Shri Manohar Lal filed Writ Petition No. 4159 of 1980 and the High Court restrained the authorities from making allotment to anyone else from the land allotted to him as per letter dated 7.3.1980.

5. In spite of the said interim order in force, the State Government vide order dated 12.12.1980 directed GDA to make the allotment of land in favour of Shri Ugrasen and thus, in compliance of the same, GDA issued letter of allotment dated 22.12.1980 in his favour. Shri Ugrasen submitted letter dated 1.1.1981 to GDA to give an Alternative land as the land covered by Plot Nos. 5 to 16 had been subject matter of the interim order of the High Court in a writ petition filed by Shri Manohar Lal.

6. Shri Ugrasen withdrew his Writ Petition No.1932 of 1980 on 6.3.1981 and deposited the compensation amount, i.e.Rs.32,010.60 on 3.3.1981. GDA allotted the land to Shri Ugrasen in Plot Nos. 36, 38, 39, 44, 46 and 47 vide order dated 02.01.1985, though it was also the land in dispute i.e. covered by the interim order passed by the High Court. Shri Ugrasen refused to take those plots as is evident from letter dated 7.1.1985 as certain encroachment had been made upon the said lands. GDA, vide letter dated 27.3.1989, allotted Plot Nos. 5, 7 to 16 to Shri Manohar Lal. Thus, being aggrieved, Shri Ugrasen filed Writ Petition No. 6644 of 1989 before the High Court for quashing of the said allotment in favour of Shri Manohar Lal.

7. Parties exchanged the affidavits and after hearing the parties and considering the material on record, the High Court allowed the said Writ Petition vide judgment and order dated 22nd July, 2003. Hence, these appeals.

8. Shri P.S. Patwalia, learned Senior counsel appearing for the appellant-Manohar Lal and Shri Vijay Hansaria, learned Senior counsel appearing for GDA have contended that Shri Ugrasen had never filed application for allotment in time. There had been manipulation in registration of the said application and it has been surrounded with suspicious circumstances. The application of Shri Ugrasen had been considered directly by the State Government-the revisional authority, though the State Government could not take the task of GDA upon itself. Land of Shri Ugrasen had been acquired for roads, thus, as per the Land Policy he was not entitled for any benefit of the same. Shri Ugrasen in his writ petition had asked only for quashing the allotment in favour of Manohar Lal and there was no prayer that the said land be allotted to him. Therefore, while issuing a direction for making the allotment in favour of Ugrasen, the High Court has exceeded its jurisdiction. Thus, appeals deserve to be allowed.

9. On the other hand, Shri Debal Banerji, learned Senior counsel appearing for the respondent-Ugrasen and Shri Pramod Swarup, learned Senior counsel appearing for the State of U.P. have vehemently opposed the appeals contending that once a decision has been taken as per the entitlement of the respondent-Ugrasen and the High Court has examined each and every fact, question of re-appreciation of evidence etc. is not permissible in exercise of the discretionary jurisdiction by this Court. Manohar Lal had also been allotted the land by the Chief Minister and not by GDA, thus no fault can be found with allotment in favour of Shri Ugrasen. Appeals lack merit and are liable to be dismissed.

10. We have considered the rival submissions made by learned counsel for the parties and perused the records.

11. In Rakesh Ranjan Verma & Ors. Vs. State of Bihar & Ors., AIR 1992 SC 1348, the question arose as to whether the State Government, in exercise of its statutory powers could issue any direction to the Electricity Board in respect of appointment of its officers and employees. After examining the statutory provisions, the Court came to the conclusion that the State Government could only take the policy decisions as how the Board will carry out its functions under the Act. So far as the directions issued in respect of appointment of its officers was concerned, it fell within the exclusive domain of the Board and the State Government had no competence to issue any such direction. The said judgment has been approved and followed by this Court in U.P. State Electricity Board Vs. Ram Autar and Anr. (1996) 8 SCC 506.

12. In Bangalore Development Authority and Ors. Vs. R. Hanumaiah and Ors. (2005) 12 SCC 508, this Court held that the power of the Government under Section 65 of the Bangalore Development Authority Act, 1976 was not unrestricted and the directions which could be issued were those which were to carry out the objective of the Act and not those which are contrary to the Act and further held that the directions issued by the Chief Minister to release the lands were destructive of the purposes of the Act and the purposes for which the BDA was created.

13. In Bangalore Medical Trust Vs. B.S. Muddappa & Ors. AIR 1991 SC 1902, this Court considered the provisions of a similar Act, namely, Bangalore Development Authority Act, 1976 containing a similar provision and held that Government was competent only to give such directions to the authority as were in its opinion necessary or expedient and for carrying out the purposes of the Act. The Government could not have issued any other direction for the reason that Government had not been conferred upon unfettered powers in this regard. The object of the direction must be only to carry out the object of the Act and only such directions as were reasonably necessary or expedient for carrying out the object of the enactment were contemplated under the Act. Any other direction not covered by such powers was illegal.

14. In Poonam Verma & Ors. Vs. Delhi Development Authority, AIR 2008 SC 870, a similar view has been re-iterated by this Court dealing with the provisions of Delhi Development Authority Act, 1957. In the said case, the Central Government had issued a direction to make allotment of flat out of turn. The Court held as under:

"......Section 41 of the Act, only envisages that the respondent would carry out such directions that may be Issued by the Central Government from time to time for the efficient administration of the Act. The same does not take within its fold an order which can be passed by the Central Government in the matter of allotment of flats by the Authority. Section 41 speaks about policy decision.

Any direction issued must have a nexus with the efficient administration of the Act. It has nothing to do with carrying out of the plans of the authority in respect of a particular scheme..........Evidently, the Central Government had no say in the matter either on its own or under the Act. In terms of the brochure, Section 41 of the Act does not clothe any jurisdiction upon the Central Government to issue uch a direction."

15. In State of U.P. Vs. Neeraj Awasthi and Ors. (2006) 1 SCC 667, this Court held as follows in context of Government directions:

"36. Such a decision on the part of the State Government must be taken in terms of the constitutional scheme, i.e., upon compliance of the requirement of Article 162 read with Article 166 of the Constitution of India. In the instant case, the directions were purported to have been issued by an officer of the State. Such directions were not shown to have been issued pursuant to any decision taken by a competent authority in terms of the Rules of Executive Business of the State framed under Article 166 of the Constitution of India."

16. In The Purtabpore Co., Ltd. Vs. Cane Commissioner of Bihar and Ors. AIR 1970 SC 1896, this Court has observed :

"The power exercisable by the Cane Commissioner under Clause 6(1) is a statutory power. He alone Could have exercised that power. While exercising that power he cannot abdicate his responsibility in favour of anyone - not even in favour of the State Government or the Chief Minister. It was not proper for the Chief Minister to have interfered with the functions of the Cane Commissioner.

In this case what has happened is that the power of the Cane Commissioner has been exercised by the Chief Minister, an authority not recognised by Clause (6) read with Clause (11) but the responsibility for making those orders was asked to be taken by the Cane Commissioner.

The executive officers entrusted with statutory discretions may in some cases be obliged to take into account considerations of public policy and in some context the policy of a Minister or the Government as a whole when it is a relevant factor in weighing the policy but this will not absolve them from their duty to exercise their personal judgment in individual cases unless Explicit statutory provision has been made for them to be given binding instructions by a superior."

17. In Chandrika Jha Vs. State of Bihar and Ors. AIR 1984 SC 322, this Court while dealing with the provisions of Bihar and Orissa Co-operative Societies Act, 1935, held as under:

"The action of the then Chief Minister cannot also be supported by the terms of Section 65A of the Act which essentially confers revisional power on the State Government. There was no proceeding pending before the Registrar in relation to any of the matters specified in Section 65A of the Act nor had the Registrar passed any order in respect thereto. In the absence of any such proceeding or such order, there was no occasion for the State Government to invoke its powers under Section 65A of the Act. In our opinion, the State Government cannot for itself exercise the statutory functions of the Registrar under the Act or the Rules."

18. In Anirudhsinhji Karansinghji Jadeja & Anr. Vs. State of Gujarat AIR 1995 SC 2390, it was observed :

"This is a case of power conferred upon one authority being really exercised by another. If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If the discretion is exercised under the direction or in compliance with some higher authority's instruction, then it will be a case of failure to exercise discretion altogether." (Emphasis added)

19. In K.K. Bhalla Vs. State of M.P. & Ors. AIR 2006 SC 898, this Court has de-lineated the functions of the State Government and the Development Authority, observing that :

"59. Both the State and the JDA have been assigned specific functions under the statute. The JDA was constituted for a specific purpose. It could not take action contrary to the scheme framed by it nor take any action which could defeat such purpose. The State could not have interfered with the day-to-day functioning of a statutory authority. Section 72 of the 1973 Act authorizes the State to exercise superintendence and control over the acts and proceedings of the officers appointed under Section 3 and the authorities constituted under the Act but thereby the State cannot usurp the jurisdiction of the Board itself. The Act does not contemplate any independent function by the State except as specifically provided therein.... the State in exercise of its executive power could not have directed that lands meant for use for commercial purposes may be used for industrial purposes..... the power of the State Government to issue direction to the officers appended under Section 3 and the authorities constituted under the Act is confined only to matters of policy and not any other. Such matters of policy yet again must be in relation to discharge of duties by the officers of the authority and not in derogation thereof.... The direction of the Chief Minister being de'hors the provisions of the Act is void and of no effect."

20. In Indore Municipality Vs. Niyamatulla (Dead through L.Rs.) AIR 1971 SC 97, this Court considered a case of dismissal of an employee by an authority other than the authority competent to pass such an order i.e. the Municipal Commissioner, the order was held to be without jurisdiction and thus could be termed to have been passed under the relevant Act. This Court held that "to such a case the Statute under which action was purported to be taken could afford no protection".

21. In Tarlochan Dev Sharma Vs. State of Punjab & Ors. (2001) 6 SCC 260, this Court, after placing reliance upon a large number of its earlier judgments, observed as under:

"In the system of Indian democratic governance as contemplated by the Constitution, senior officers occupying key positions such as Secretaries are not supposed to mortgage their own discretion, volition and decision-making authority and be prepared to give way or being pushed back or pressed ahead at the behest of politicians for carrying out commands having no sanctity in law. The Conduct Rules of Central Government Services command the civil servants to maintain at all times absolute integrity and devotion to duty and do nothing which is unbecoming of a government servant. No government servant shall in the performance of his official duties, or in the exercise of power conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior." (Emphasis added)

22. Therefore, the law on the question can be summarised to the effect that no higher authority in the hierarchy or an appellate or revisional authority can exercise the power of the statutory authority nor the superior authority can mortgage its wisdom and direct the statutory authority to act in a particular manner. If the appellate or revisional Authority takes upon itself the task of the statutory authority and passes an order, it remains unenforceable for the reason that it cannot be termed to be an order passed under the Act.

23. In Mulraj Vs. Murti Raghunathji Maharaj, AIR 1967 SC 1386, this Court considered the effect of action taken subsequent to passing of an interim order in its disobedience and held that any action taken in disobedience of the order passed by the Court would be illegal. Subsequent action would be a nullity.

24. In Surjit Singh Vs. Harbans Singh, AIR 1996 SC 135, this Court while dealing with the similar issue held as under:

"In defiance of the restraint order, the alienation/ assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. When the Court intends a particular state of affairs to exist while it is in seisin of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the Court orders otherwise. The Court, in these circumstances has the duty, as also the right, to treat the alienation/assignment as having not taken place at all for its purposes."

25. In All Bengal Excise Licensees Association Vs. Raghabendra Singh & Ors, AIR 2007 SC 1386, this court held as under:

"A party to the litigation cannot be allowed to take an unfair advantage by committing breach of an interim order and escape the consequences thereof..... the wrong perpetrated by the respondents in utter disregard of the order of the High Court should not be permitted to hold good."

26. In Delhi Development Authority Vs. Skipper Construction Co. (P) Ltd. & Anr. AIR 1996 SC 2005, this court after making reference to many of the earlier judgments held:

"On principle that those who defy a prohibition ought not to be able to claim that the fruits of their defiance are good, and not tainted by the illegality that produced them."

27. In Gurunath Manohar Pavaskar Vs. Nagesh Siddappa Navalgund, AIR 2008 SC 901, this Court while dealing with the similar issues held that even a Court in exercise of its inherent jurisdiction under Section 151 of the Code of Civil Procedure, 1908, in the event of coming to the conclusion that a breach to an order of restraint had taken place, may bring back the parties to the same position as if the order of injunction has not been violated.

28. In view of the above, it is evident that any order passed by any authority in spite of the knowledge of the interim order of the court is of no consequence as it remains a nullity.

29. In Messrs. Trojan & Co. Vs. RM.N.N. Nagappa Chettiar AIR 1953 SC 235, this Court considered the issue as to whether relief not asked for by a party could be granted and that too without having proper pleadings. The Court held as under:

"It is well settled that the decision of a case cannot be based on grounds outside the pleadings of the parties and it is the case pleaded that has to be found. Without an amendment of the plaint, the Court was not entitled to grant the relief not asked for and no prayer was ever made to amend the plaint so as to incorporate in it an alternative case."

30. A similar view has been re-iterated by this Court in Krishna Priya Ganguly etc.etc. Vs. University of Lucknow & Ors. etc. AIR 1984 SC 186; and Om Prakash & Ors. Vs. Ram Kumar & Ors., AIR 1991 SC 409, observing that a party cannot be granted a relief which is not claimed.

31. Dealing with the same issue, this Court in Bharat Amratlal Kothari Vs. Dosukhan Samadkhan Sindhi & Ors., AIR 2010 SC 475 held:

"Though the Court has very wide discretion in granting relief, the court, however, cannot, ignoring and keeping aside the norms and principles governing grant of relief, grant a relief not even prayed for by the petitioner."

32. In Fertilizer Corporation of India Ltd. & Anr. Vs. Sarat Chandra Rath & Ors., AIR 1996 SC 2744, this Court held that "the High Court ought not to have granted reliefs to the respondents which they had not even prayed for."

33. In view of the above, law on the issue can be summarised that the Court cannot grant a relief which has not been specifically prayed by the parties.

34. The instant case requires to be examined in the light of the aforesaid certain legal propositions. Section 41 of the U.P. Urban Planning and Development Act, 1973 reads as under:

"41. Control by State Government-(1) The Authority, the Chairman or the Vice-Chairman shall carry out such directions as may be issued to it from time to time by the State Government for the efficient administration of this Act.

(2) ..........................................

(3) The State Government may, at any time, either on its own motion or on application made to it in this behalf, call for the records of any case disposed of or order passed by the authority or Chairman for the purpose of satisfying itself as to the legality or propriety of any order passed or direction issued and may pass such order or issue such direction in relation thereto as it may think fit:

Provided that the State Government shall not pass an order prejudicial to any person without affording such person a reasonable opportunity of being heard.

(4) ......................................"

35. Clause (1) thereof empowers the State Government to issue general directions which are necessary to properly enforce the provisions of the Act. Clause (3) thereof make it crystal clear that the State Government is a revisional authority. Therefore, the scheme of the Act makes it clear that if a person is aggrieved by an order of the authority, he can prefer an appeal before the Appellate Authority i.e. Divisional Commissioner and the person aggrieved of that order may file Revision Application before the State Government. However, the State Government cannot pass an order without giving opportunity of hearing to the person, who may be adversely affected.

36. In the instant case, it is the revisional authority which has issued direction to GDA to make allotment in favour of both the parties. Orders had been passed without hearing the other party. The authority, i.e. GDA did not have the opportunity to examine the case of either of the said parties. The High Court erred in holding that Clause (1) of Section 41 empowers the State Government to deal with the application of an individual. The State Government can take only policy decisions as to how the statutory provisions would be enforced but cannot deal with an individual application. Revisional authority can exercise its jurisdiction provided there is an order passed by the lower authority under the Act as it can examine only legality or propriety of the order passed or direction issued by the authority therein.

37. In view thereof, we are of the considered opinion that there was no occasion for the State Government to entertain the applications of the said parties for allotment of land directly and issue directions to GDA for allotment of land in their favour.

38. Admittedly, the interim order passed by the High Court in favour of Shri Manohar Lal in Writ Petition No. 4159 of 1980 was in force and it restrained the Authorities to make allotment of the land in dispute in favour of anyone else. Indisputably, the State Government as well as the GDA remained fully alive of the factum of subsistence of the said interim order as is evident from the correspondence between them. In view of the law referred to hereinabove, order passed by the State Government in contravention of the interim order, remains unenforceable and inexecutable. More so, in the writ petition filed by Shri Ugrasen relief sought was limited only to quash the allotment made in favour of Shri Manohar Lal. No relief was sought for making the allotment in favour of the writ petitioner/Shri Ugrasen. However, the High Court vide impugned judgment and order has issued direction to make the allotment in his favour. Thus, we are of the view that issuance of such a direction was not permissible in law. Even otherwise as Shri Ugrasen's land had been acquired for roads, he could not make application for taking benefit of the Land Policy, particularly, when the Land Policy was not declared to be invalid or violative of equality clause enshrined in Article 14 of the Constitution.

39. The High Court failed to consider objections raised on behalf of GDA in its letter dated 19.4.1980 to the State Government pointing out as follows:

(a) Application of Ugrasen is entered on 31.12.1966 as the last entry in Postal Receipt register.

(b) Entry is at Sl. 15498.

(c) Entry is in different ink.

(d) True copy of application now submitted bears the date 13.12.1966.

(e) There is no signature on the cyclostyled copy.

(f) Application was made in 1971 and was rejected in 1977 by Shri Watal. Decision not challenged. Ugrasen kept quiet till 1980.

(g) Clerk Mr. Jai Prakash was not working before 1979.

40. It is settled legal proposition that burden lies on the person, who alleges/avers/pleads for existence of a fact. Sh. Ugrasen was under an obligation to establish the fact of submission of the application in time. Entry in respect of his application has been made in Postal Receipt Register. As said application was sent by post, Sh. Ugrasen could explain as to whether the application was sent by Registered Post/Ordinary Post or under Postal Certificate and as to whether he could produce the receipt, if any, for the same. In such a fact-situation, the application filed by Shri Ugrasen could not have been entertained at all, even if he was entitled for the benefit of the Land Policy.

41. The High Court committed an error observing that if the State Government had allowed the application filed by Ugrasen it was implicit that delay, if any, in making the claim stood condoned. Such an observation is not in consonance with law for the reason that if there is a delay in filing application, the question would arise as to whether the authority has a right to condone the delay. Even if, the delay can be condoned, the authority had to examine as to whether there was sufficient cause preventing the applicant to approach the authority in time. But, once the delay has been considered without application of mind, in a fact- situation like in the instant case, the question of deemed condonation would not arise. More so, the High Court could not examine the question of fact as to whether the application was made within time or not, particularly, in view of the fact that the authority had been making the allotment though application had not been made at all in time and it was only manipulation of the record of the authority with the collusion of its staff.

42. In fact, such exercise by the State amounts to colourable exercise of power. In State of Punjab & Anr. Vs. Gurdial Singh & Ors. AIR 1980 SC 319, this Court dealing with such an issue observed as under:

"Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice. Pithily put, bad faith which invalidates the exercise of power – sometimes called colourable exercise or fraud on power and oftentimes overlaps motives, passions and satisfaction - is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. If the use of the power is for the fulfilment of a legitimate object the actuation or catalysation by malice is not legicidal. The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion."

43. The State Government, being the revisional authority, could not entertain directly the applications by the said applicants, namely, Sh.Ugrasen and Sh. Manohar Lal. The action of the State Government smacks of arbitrariness and is nothing but abuse of power as the State Government deprived GDA to exercise its power under the Act, and deprived the aggrieved party to file appeal against the order of allotment. Thus, orders passed by the State Government stood vitiated. More so, it was a clear cut case of colourable exercise of power.

44. So far as the case of allotment in favour of Manohar Lal is concerned in more than one respect, it is by no means better than the case of Ugrasen as the initial allotment had been made by GDA in his favour consequent to the directions of the Chief Minister of Uttar Pradesh who had no competence to deal with the subject under the Statute and he has already been put in possession of a part of allotted land in commercial area, contrary to the Land Policy.

45. There are claims and counter claims regarding the dates of Section 6 declaration; taking of possession of land; and of making Awards so far as the land of Manohar Lal is concerned. As per the affidavit filed by the Vice-Chairman, GDA, Section 6 declaration was made on 24.5.1965 invoking the urgency clause under section 17(1); possession was taken on 13.7.1965; and Award was made on 11.5.1970. Manohar Lal preferred writ petition no.4159/1980 before the Allahabad High Court stating that Section 6 declaration in respect of his land was made on 30.1.1969, possession was taken on 29.5.1969 and Award was made on 11.6.1971. None of the parties considered it proper to place the authentic documents before the Court so that the real facts be determined. In such a fact situation, we are not in a position to decide as to whether Manohar Lal's application was filed in time as he had claimed in the said writ petition that he filed the First Application on 22.6.1969. However, one thing is clearly evident from the affidavit filed by Vice Chairman, GDA that the land allotted to both of these parties has been part of commercial area and not of residential area. In view thereof, any allotment made in favour of Manohar Lal so far, had been illegal as the application could not have been entertained by the Chief Minister and further appellant could not get allotment in commercial area. The Land Policy provided only for allotment of land in residential area.

46. The fact of illegal allotment of land in Commercial area has been brought to the notice of the Court first time vide affidavit of the Vice-Chairman, GDA dated 27.5.2010. Thus, it is crystal clear that such facts had not been brought on record before the High Court by GDA at any stage in any of the writ petitions nor it had been pointed out to the State Government when applications of both these parties had been entertained directly by the Chief Minister and the State Government. Only explanation furnished by the Vice-Chairman, GDA, in his affidavit is that due to inadvertence it escaped the notice of GDA that the plots had been categorized as commercial in the Master Plan and could not be allotted in favour of any applicant. Even today, the said plots continue to be in commercial area and not in residential area.

47. The present appellants had also not disclosed that land allotted to them falls in commercial area. When a person approaches a Court of Equity in exercise of its extraordinary jurisdiction under Article 226/227 of the Constitution, he should approach the Court not only with clean hands but also with clean mind, clean heart and clean objective. "Equally, the judicial process should never become an instrument of appreciation or abuse or a means in the process of the Court to subvert justice." Who seeks equity must do equity. The legal maxim "Jure naturaw aequum est neminum cum alterius detrimento et injuria fieri locupletiorem", means that it is a law of nature that one should not be enriched by the loss or injury to another. (vide The Ramjas Foundation & Ors. Vs. Union of India & Ors. AIR 1993 SC 852; K.P. Srinivas Vs. R.M. Premchand & ors. (1994) 6 SCC 620 and Nooruddin Vs. (Dr.) K.L. Anand (1995) 1 SCC 242).

48. Similarly, in Ramniklal N. Bhutta & Anr. Vs. State of Maharashtra & Ors. AIR 1997 SC 1236, this Court observed as under:-

"The power under Article 226 is discretionary. It will be exercised only in furtherance of interest of justice and not merely on the making out of a legal point.....the interest of justice and the public interest coalesce. They are very often one and the same. ..... The Courts have to weigh the public interest vis-`-vis the private interest while exercising....any of their discretionary powers (Emphasis added).

49. In M/s Tilokchand Motichand & Ors. Vs. H.B. Munshi & Anr. AIR 1970 SC 898; State of Haryana Vs. Karnal Distillery, AIR 1977 SC 781; and Sabia Khan & Ors. Vs. State of U.P. & Ors. AIR 1999 SC 2284, this Court held that filing totally misconceived petition amounts to abuse of the process of the Court. Such a litigant is not required to be dealt with lightly, as petition containing misleading and inaccurate statement, if filed, to achieve an ulterior purpose amounts to abuse of the process of the Court. A litigant is bound to make "full and true disclosure of facts."

50. In Abdul Rahman Vs. Prasony Bai & Anr. AIR 2003 SC 718; S.J.S. Business Enterprises (P) Ltd. Vs. State of Bihar & Ors. (2004) 7 SCC 166; and Oswal Fats & Oils Ltd. Vs. Addl. Commissioner (Admn), Bareily Division, Bareily & Ors. JT 2010 (3) SC 510, this Court held that whenever the Court comes to the conclusion that the process of the Court is being abused, the Court would be justified in refusing to proceed further and refuse relief to the party. This rule has been evolved out of need of the Courts to deter a litigant from abusing the process of the Court by deceiving it.

51. In view of the above, we are of the considered opinion that Shri Manohar Lal did not approach the Court with discloser of true facts, and particularly, that he had been allotted the land in the commercial area by GDA on the instruction of the Chief Minister of Uttar Pradesh.

52. It is a fit case for ordering enquiry or initiating proceedings for committing criminal contempt of the Court as the parties succeeded in misleading the Court by not disclosing the true facts. However, we are not inclined to waste court's time further in these cases. Our experience has been that the so-called administration is not likely to wake-up from its deep slumber and is never interested to redeem the limping society from such hapless situations. We further apprehend that our pious hope that administration may muster the courage one day to initiate disciplinary/criminal proceedings against such applicants/erring officers/employees of the authority, may not come true. However, we leave the course open for the State Government and GDA to take decision in regard to these issues and as to whether GDA wants to recover the possession of the land already allotted to these applicants in commercial area contrary to the Land Policy or value thereof adjusting the amount of compensation deposited by them, if any.

53. In view of the above, Civil Appeal No. 974 of 2007 filed by GDA is allowed. The Judgment and order of the High Court dated 22.7.2003 passed in Writ Petition No. 6644 of 1989 is hereby set aside. Civil Appeal No. 973 of 2007 filed by Manohar Lal is dismissed. No costs.

...................................J.

(Dr. B.S. CHAUHAN)

.........................................J.

(SWATANTER KUMAR)

New Delhi,

June 3, 2010

3

Head Notes

CASE NO.: Appeal (civil) 1289 of 2007

PETITIONER: Life Insurance Corporation of India and others

RESPONDENT: Retired L.I.C. Officers Association and others

DATE OF JUDGMENT: 12/02/2008

Dismissing the appeal, the Court HELD:

1.1 A statutory authority while exercising its jurisdiction would be entitled to exercise incidental power for determination of the principal issue but it, in such matters, cannot be said to have such power which is beyond the scope and purport of the principal provisions. A delegatee cannot act in violation of a statute. A sub-delegatee cannot exercise any power which is not meant to be conferred upon him by reason of statutory provisions. It must conform not only to the provisions of the Regulations and the Act but also other Parliamentary Acts. The Life Insurance Corporation of India (Staff) Regulations, 1960 are subordinate legislation. Chairman of the Corporation is a statutory authority. Power to fix a cut-off date has been conferred upon him by way of statutory provision. The same requires a strict interpretation. [para 22, 28 and 14] [836-H; 839-B-D; 835-A-B] Kurmanchal Institute of Degree and Diploma and Ors. Vs. Chancellor, M.J.P. Rohilkhand University and Ors. [2007] 6 SCC 35; Kerala Samsthana Chethu Thozhilali Union vs. State of Kerala and Ors. [2006] 4 SCC 327; Bombay Dyeing & Mfg. Co. Ltd. vs. Bombay Enviromental Action Group & Ors. [2006] 3 SCC 434; State of Kerala and Ors. Vs. Unni and Anr. [2007] 2 SCC 365; State of Orissa and Anr. Vs. M/s Chakobhai Ghelabhai and Company [1961] 1 SCR 719; and M/s Shroff and Co. vs. Municipal Corporation of Greater Bombay and Anr. [1989] Supp. 1 SCC 347 - relied on. H.E.C. Voluntary Retired Employees Welfare Society and Anr. Vs. Heavy Engineering Corporation Ltd. and Ors. [2006] 3 SCC 708; U.P. Rahavendra Acharya and Others vs. State of Karnataka and Ors. [2006] 9 SCC 630; State of Andhra Pradesh and Anr. Vs. A.P. Pensioners' Association and Ors. [2005] 13 SCC 161; and State of Tamil Nadu vs. Seshachalam [2007] 11 SCALE 239 - referred to.

1.2 Clause (1) of Regulation 51 postulates grant of pay, dearness allowance and other allowances in the manner as prescribed in the IInd Schedule. The basic pay and other allowances to Class II employees are regulated under the provisions contained in Schedule III thereof. Clause (2) of Regulation 51 confers jurisdiction on the Chairman to regulate the pay as also other matters connected therewith or incidental thereto by issuance of instructions. It may be true that the cut-off dates were fixed upon holding negotiations with the Unions. However, the jurisdiction of the Chairman to fix a cut-off date is in question in terms of sub-regulation (2) of Regulation 51. Revision of pay, dearness allowance and other allowances applicable to the employees of the Corporation stricto sensu are not covered by clause (2) of Regulation 51. [para 14, 15, 19 and 20] [835-B-D; 836-A-D]

1.3 Whereas dearness allowance and some other allowances, as for instance `house rent allowance' and `city compensatory allowance' are envisaged by IInd Schedule appended to the said Regulations, the payment of other amounts as the `Provident Fund' and `Gratuity' have nothing to do therewith. Provident Fund and Gratuity are ordinarily governed by the Acts enacted by the Parliament, subject to the conditions contained therein. Regulation 77 of the Regulations specifies the employees who would be entitled to payment of gratuity. Clause (2) of Regulation 77 provides for the manner in which the amount of gratuity shall be payable. [para 15-16] [835-E-H]

1.4 Neither the payment of Provident Fund nor the payment of Gratuity is thus covered by the provisions contained in Chapter IV of the Regulations. Method of fixation, eligibility for the benefit of revision and the date from which the revisions shall apply are thus only areas within which the Chairman can exercise jurisdiction. The effect of revision of pay scales on other spheres and which are otherwise governed by another statute or other provisions of the said Regulations would not come within the purview thereof. The terminology used "and other matters connected therewith or incidental thereto" as occurring in clause (2) of Regulation 51 must, therefore, be held to have a direct nexus with any one of the three elements preceding the expression. It has nothing to do with the construction of any other provision of the Regulations. The words "incidental to" cannot be interpreted too broadly. It cannot be read independently of the main provision. It cannot serve some other purpose which is not covered by Regulation 51 of the Regulations. It cannot be permitted to encroach upon an area which is not within the jurisdiction of the Chairman of the Corporation. [para 16, 20 and 21] [835-H; 836-D-E; 836-F-G] 2.1 Revision of scales of pay as also other allowances is technical in nature. When a benefit is extended to a group of employees the effect of such benefit, if otherwise comes within the purview thereof must be held to be applicable to other groups of employees also. An employee is entitled to gratuity. It is not a bounty. It is payable on successful tenure of service. Regulation 77 provides as to how the amount of gratuity is to be calculated. Regulation 51 provides for a rule of measurement. Only because it employed the word "permanent basic pay", the same will not by itself lead to the conclusion that once an employee has retired, he would not be entitled to any revision of the amount of gratuity. [para 25] [837-F-H] 2.2 The Chairman of the Corporation has himself given retrospective effect to revision in scales of pay. Such a retrospective effect has also been given so as to benefit a class of employees. The employees, irrespective of the fact whether they had superannuated or not, were given the benefit of arrears of pay from 1st August, 1993. By reason of grant of such benefit both to serving employees as also the superannuated employees, both the class of employees became entitled thereto as of right. If by reason thereof, an employee became entitled to the benefit of the revised scale of pay as on the date of retirement, the same for all intent and purpose must be taken to be the permanent basic pay, apart from other allowances, if any, which are required to be taken into consideration for the purpose of computation of the amount of gratuity. [para 26] [838-A-C] Indian Bank and Anr. Vs. N. Venkatramani [2007] 10 SCALE 475 - relied on. 2.3 It cannot be said that the Chairman of the Corporation having power even to fix the cut-off dates for different purposes, has also jurisdiction to do so for payment of gratuity, which has a direct nexus with the revised pay of scale. Once the Chairman fixes a cut-off date for the purpose of giving effect to the agreement vis--vis the payment of arrears in terms thereof, he cannot exercise further jurisdiction in respect of a matter which is not controlled by Chapter IV but is controlled by other provisions of statutes and Parliamentary Acts governing the field. [para 28] [838-H; 839-A-B] P.S. Patwalia, S. Rajappa, H. Jairaman, Tania Walia and Devish Tripathi for the Appellants. P.S. Narasimha, Sridhar Potaraju, D. Julius Diamei and Mandakani for the Respondents. *Subject*Life Insurance Corporation of India (Staff) Regulations, 1960: Regulations 51(1) and 77 - Revision of pay scales - Chairman of Corporation issuing Life Insurance Corporation of India Class I Officers (Revision of Terms and Conditions of Service) Instructions, 1996 fixing cut-off dates as 1.4.1993 for revision of pay and 1.8.1994 for payment of gratuity in terms of revised pay - HELD: An employee is entitled to gratuity - It is not a bounty - If an employee became entitled to revised pay on date of retirement, his revised pay must be taken to be permanent pay for purpose of computation of gratuity. Administrative Law: Subordinate Legislation - Powers of sub-delegatee - Chairman of LIC issuing instructions in exercise of powers under Regulation 51 fixing different cut-off dates for revision of pay and payment of gratuity in terms of revised pay - HELD: A delegatee cannot act in violation of a statute - A sub-delegatee cannot exercise any power which is not meant to be conferred upon him by reason of statutory provision - Gratuity is not covered under Regulation 51 - Provident Fund and Gratuity are ordinarily governed by the Acts enacted by Parliament subject to conditions contained therein - Regulation 77 provides as to how amount of gratuity is to be calculated – Regulation 51 provides for a rule of measurement - Life Insurance Corporation of India (Staff) Regulations, 1960 - Regulations 51 and 77 - Life Insurance Corporation of India Class I Officers (Revision of Terms and Conditions of Service) Instructions, 1996. Words and Phrases: Expression "and other matters connected therewith or incidental thereto" occurring in Regulation 51(2) of Life Insurance Corporation of India (Staff) Regulations, 1960 - Connotation of. The Chairman of the appellant-Life Insurance Corporation, pursuant to revision of pay of the employees of the Corporation, in exercise of powers under Regulation 51 of the LIC of India (Staff) Regulations 1960, issued Life Insurance Corporation of India Class I Officers (Revision of Terms and Conditions of Service) Instructions, 1996, fixing cut-off dates for grant of different allowances as also the pay. The cut-off date for revision of pay was fixed as 1.4.1993. However, for payment of gratuity, the cut-off date was fixed as 1.8.1994, which was challenged in some of the High Courts.

The Gujarat High Court and the Karnataka High Court upheld the validity of the 1996 Instructions whereas the Kerala High Court in the judgment under appeal took a different view. In the instant appeal filed by the Life Insurance Corporation, it was contended for the respondent-employees that the power of the Chairman of the appellant-Corporation to issue instructions under Regulation 51 being limited to Chapter IV of the Regulations, the 1996 Instructions had no application to payment of gratuity which is covered by Regulation 77. The question for consideration before the Court was: Whether the expression "the date from which the revision shall apply, and other matters connected therewith or incidental thereto", occurring in Regulation 51 of the Life Insurance Corporation of India Regulations, 1960 would also include the matter relating to payment of gratuity which is otherwise covered by Regulation 77 thereof? *Citation*2008 AIR 1485, 2008(2 )SCR823 , 2008(3 )SCC321 , 2008(2 )SCALE484 , 2008(2 )JT337

Judgement

CASE NO.: Appeal (civil) 1289 of 2007

PETITIONER: Life Insurance Corporation of India and others

RESPONDENT: Retired L.I.C. Officers Association and others

DATE OF JUDGMENT: 12/02/2008

BENCH: S.B. SINHA & HARJIT SINGH BEDI JUDGMENT:

JUDGMENT CIVIL APPEAL NO. 1289 OF 2007 S.B. SINHA, J.

1. Jurisdiction of the Chairman of the Life Insurance Corporation of India (Corporation) to issue instructions in terms of Regulation 51 of the Life Insurance Corporation of India Class-I Officers (Revision of Terms and Conditions of Service) Instructions, 1996 is in question in this appeal which arises out of a judgment and order dated 29th September, 1995 passed by a Division Bench of the Kerala High Court in Writ Appeal No. 32 of 2004.

2. We may notice only the admitted facts herein. Respondent No.1 is an Association of officers who have retired from the services of the appellant-Corporation which is a statutory authority constituted and incorporated under the Life Insurance Corporation Act, 1956. During the period of 1st August, 1992 and 31st July, 1994 a revision of scales of pay of the offices and employees of the Corporation took place. Different cut off dates were fixed for grant of different nature of allowances as also pay by the Chairman of the Corporation in purported exercise of his power under Regulation 51 of the Regulations. Whereas 1st April, 1993 was the cut

off date for revision of pay; 1st August, 1994 was fixed as the cut off date for the purpose of payment of gratuity on the basis of revised pay. However, so far as those employees who had retired prior to 1st August, 1994 are concerned, they were directed to be entitled to reduce gratuity based on the reduced scale of pay with effect from 1st April, 1993 only. The arrears of pay were directed to be paid only w.e.f. 1st April, 1993.

3. Indisputably, whereas the Gujarat and Kerala High Court upheld the validity of the instructions issued by the Chairman of the appellant- Corporation, the Karnakata High Court took a different view.

4. The claim of Respondent No.1 was allowed in part by a learned Single Judge of the High Court by his order dated 8th July, 2003 holding :- "A reading of Ext.P.3 (instructions issued by the Chairman for supplementary of Revisionist in respect of class I officers and claimed IV will definitely go to show that it cannot operate as far as the claims for gratuity is concerned. It is admitted that at least certain officers, represented by the petitioner Association were deemed as having revised salary from April, 1993 onwards. In that view, at the time of retirement, they were deemed as getting a salary which alone could have been taken notice of for computing gratuity, if Regulation No.77 has any application. It is definite that the restriction in Ext. P.3 and benevolence in Regulation No.77 could not have co-existed because the Corporation is offering gratuity at the rate less than the amount an employee had notionally drawn at the time of their respective retirement. It is also pertinent to note that when powers were conferred on the Chairman under Regulation No.51(2), specific reference was there about the incidents of DA and other allowances. There is no reference to any alteration permissible in respect of gratuity. It leads to the position that the regulation did not permit the Chairman to disturb criterian for gratuity payment by exercise of powers under Regulation No.51 (2)." It was further held :- "There was no power on the part of the Bank Management in that case to disturb the settlement, and the gratuity was to be paid on the basis of last drawn pay. Likewise, in the present case, it would not have been permissible for the Chairman to unsettle the benefits that had been spoken to by Regulation No.77 while issuing Ext.P.3 order."

5. A Division Bench of the said High Court on an intra court appeal preferred by the appellants herein upheld the said findings.

6. Mr. Patwalia, learned senior counsel appearing on behalf of the appellants, in support of this appeal, submitted :- 1) Pension and Gratuity having two different concepts, the High Court committed a serious error in holding that the Chairman of the Corporation had no jurisdiction to issue the instructions. ii) Sub-regulation (2) of Regulation 51 being of wide amplitude, the jurisdiction of the Chairman to fix cut off dates was not only applicable in respect of pay and allowances covered by Schedule II of the Regulations but also included "gratuity" as envisaged under Regulation 77, as the quantum thereof has a direct nexus with the payment of salary. iii) An employer, subject to the applicability of the doctrine of reasonableness and non-arbitrariness, can fix a cut off date for the implementation of the revised pay and allowances. iv) The amount of gratuity payable has to be calculated upon the permanent pay and once the gratuity has been paid, no further amount is payable only because the salary has been revised.

7. Mr. P.S. Narasimha, learned counsel appearing on behalf of the respondents, on the other hand, contended that the power of the Chairman of the Corporation to issue instructions being limited to Chapter IV of the Regulations, it has no application in relation to the payment of gratuity as provided for in Regulation 77 thereof.

8. Appellant-Corporation in exercise of its powers conferred upon it by clauses (b) and (bb) of sub-section (2) of Section 49 of the Life Insurance Corporation Act, 1956, with the previous approval of the Central Government, made Regulations known as "Life Insurance Corporation of India (Staff) Regulations, 1960 (in short 'the Regulations'). Chapter IV of the said Regulations deal with "Pay and Allowances". Regulation 51 thereof reads as under :- "Scales of Pay : 51.(1) The scales of pay, dearness allowance and other allowances (wherever payable) applicable to the employees of the Corporation in India shall be as prescribed in Schedule II hereto. (1A) The basic pay and other allowance admissible from time to time to an employee belonging to Class II shall be regulated in accordance with the provisions contained in Schedule III. (2) Whereas the scales of pay, dearness allowance or other allowances applicable to the employees of the Corporation or any class of them are revised in pursuance of any award, agreement or settlement, or otherwise, the method of fixation of pay in the new scales, the eligibility for the benefit of revision, the date from which the revision shall apply, and other matters connected therewith or incidental thereto shall be regulated by instructions issued by the Chairman in this behalf." (Emphasis supplied)

9. Chapter VII of the said Regulations deals with Miscellaneous Matters. Regulation 76 deals with Provident Fund. Regulation 77 deals with Gratuity. Regulation 78 deals with Superannuation Fund. Regulation 79 deals with Travelling Allowance Rules. There are other provisions also dealing with some other benefits which are to be granted to the employees of the Corporation.

10. Regulation 51 indisputably confers power upon the Chairman to fix a date from which the revision in pay shall apply. It applies to pay, dearness allowance and other allowances applicable to the employees of the Corporation. The question, as would appear from the discussions made hereinafter, is as to whether the expression "the date from which the revisions shall apply, and other matters connected therewith or incidental thereto", would also include the matter relating to payment of gratuity which is otherwise covered by Regulation 77 thereof.

11. Although Mr. Patwalia has relied upon a large number of decisions of this Court for the purpose of making a distinction between the terms "pension" and "gratuity" as also the jurisdiction of the employer to fix a cut off date, it may not be necessary to deal with all of them.

12. We may, however, note some precedents operating in the field. Recently in H.E.C. Voluntary Retired Employees Welfare Society and another vs Heavy Engineering Corporation Ltd. and others : (2006) 3 SCC 708 this Court observed :- "24. In State of A.P. v. A.P. Pensioners Assn. this Court categorically held that the financial implication is a relevant criterion for the State Government to determine as to what benefits can be granted pursuant to or in furtherance of the recommendations of a Pay Revision Committee. A' fortiori while taking that factor into account, an employer indisputably would also take into consideration the number of employees to whom such benefit can be extended." {See also U.P. Rahavendra Acharya and others vs. State of Karnatka and others [(2006) 9 SCC 630]}

13. It is also interesting to notice a decision of this Court in State of Andhra Pradesh and another vs. A.P. Pensioners' Association and others : (2005) 13 SCC 161 wherein it was opined :- "28. Computation of retirement gratuity payable to a government servant is, therefore, required to be done on the basis of the formula laid down therein. A bare perusal of the aforementioned Rule clearly shows that for the purpose of computation either 1/4th of the emoluments for each completed six-monthly period of service, or 3/16^th of emoluments for each completed six-monthly period of service, is to be taken into consideration. Such emoluments necessarily were payable either immediately before the date of retirement or the date of death. On 1-4- 1999, in view of the clear expressions contained in the aforementioned GO No. 114, those employees who retired between the period 1-7-1998 and 1-4-1999 would have received the actual benefit calculated in terms of the said Rule. The submission of Mr Lalit to the effect that they became entitled to enhanced pay and, therefore, to enhanced gratuity from 1-7-1998 is not wholly correct. They became entitled thereto but only notionally for the purpose of calculation of such recurring liability of the State which became payable with effect from 1-4-1999. The High Court has heavily relied upon the purported legal fiction created in the said Rule to the effect that the same would come into force with effect from 1-7-1998. The legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing therefrom." It was further observed :- "30. The case at hand indeed poses a different problem. Although like Gurupad Khandappa Magdum a notional revision of pay was to be considered as if the same took effect from 1-7-1998, but the Rules went further and stated that the actual monetary benefit thereof shall be given with effect from 1-4-1999. The Rules, therefore, not only create a legal fiction but also provide the limitations in operation thereof. If the effect of the legal fiction is extended in the manner suggested by Mr Lalit, clause (4) ( sic Rule 4) of the Rules will become otiose. In other words, all the consequences ordinarily flowing from a rule would be given effect to if the rule otherwise does not limit the operation thereof. If the rule itself provides a limitation on its operation, the consequences flowing from the legal fiction have to be understood in the light of the limitations prescribed. Thus, it is not possible to construe the legal fiction as simply as suggested by Mr Lalit." [See also State of Tamil Nadu vs. Seshachalam : 2007 (11) SCALE 239].

14. The Regulations are subordinate legislation. Chairman of the Corporation is a statutory authority. Power to fix a cut off date has been conferred upon him by way of statutory provision. The same requires a strict interpretation. Chapter IV of Regulations envisages scales of pay. It also talks of dearness allowance and other allowances as envisaged under the Iind Schedule thereof. Clause (2) of the said Regulation, as indicated hereinbefore, confers jurisdiction on the Chairman of the Corporation to regulate the same as also other matters connected therewith or incidental thereof by issuance of instructions.

15. It may be true, as was contended by Mr. Patwalia, that the cut off dates were fixed upon holding negotiations with the Unions. However, the jurisdiction of the Chairman to fix a cut off date is in question in terms of sub-regulation (2) of Regulation 51. Instructions have been issued under the said provision alone. Instructions not only cover the scales of pay from a particular date but different dates have been fixed for different types of allowances. We have noticed hereinbefore that whereas dearness allowance and some other allowances, as for instance 'house rent allowance' and 'city compensatory allowance' are envisaged by Iind Schedule appended to the said Regulations, the other allowances, and for instance, the 'Provident Fund' and 'Gratuity' have nothing to do therewith. Provident Fund and Gratuity are ordinarily governed by the Acts enacted by the Parliament, subject to the conditions contained therein.

16. Regulation 77 of the Regulations, specifies the employees who would be entitled to payment of gratuity. Clause (2) of Regulation 77 provides for the manner in which the amount of gratuity shall be payable. Neither the payment of Provident Fund nor the payment of Gratuity is thus covered by the provisions contained in Chapter IV of the Regulations.

19. Clause (1) of Regulation 51 postulates grant of pay, dearness allowance and other allowances in the manner as prescribed in the IInd Schedule. The basic pay and other allowances to Class II employees are regulated under the provisions contained in Schedule III thereof. Revision of pay, dearness allowance and other allowances applicable to the employees of the Corporation stricto sensu are not covered by clause (2) of Regulation 51. It merely states that when a revision takes place pursuant to or in furtherance of any award, agreement or settlement or otherwise, the Chairman of the Corporation will have the jurisdiction in regard to :- a) the method of fixation of pay in the new scales ; b) the eligibility for the benefit of revision ; and c) the date from which the revision shall apply.

20. Method of fixation, eligibility for the benefit of revision and the date from which the revisions shall apply are thus, the only areas within which the Chairman can exercise jurisdiction. The effect of revision of pay scales on other spheres and which are otherwise governed by another statute or other provisions of the said Regulations would not come within the purview thereof.

21. The terminology used "and other matters connected therewith or incidental thereto" must, therefore, be held to have a direct nexus with any one of the aforementioned three elements. The same has nothing to do with the construction of any other provision of the Regulations. The words "incidental to" cannot be interpreted too broadly. It cannot be read independently of the main provision. It cannot serve some other purpose which is not covered by Regulation 51 of the Regulations. It cannot be permitted to encroach upon an area which is not within the jurisdiction of the Chairman of the Corporation.

22. It is one thing to say that the court while exercising its jurisdiction

would be entitled to exercise such incidental power for determination of the principal issue but it is another thing to say that a statutory authority in such matters would be held to have such power which is beyond the scope and purport of the principal provisions. 23 The word "Incidental" has been defined in Advanced Law Lexicon 3rd (2005) Edition, Book 2 at 2275 to mean :- "According to Stroud's Judicial Dictionary, a thing is said to be incidental to another when it appertains to the principal thing. According to the ordinary Dictionary meaning, it signifies a subordinate action. Hukumchand Jute Mills Ltd. vs. Labour Appellate Tribunal, AIR 1958 Cal. 68, 70. (Industrial Disputes Act (14 of 1917), S. 10(4)]. The word "incidental" does not imply any casual or fortuitous connection. In a legal sense as applied to powers, it means a power which is subsidiary to that which has been expressed, and of an instrumental nature in relation thereto, which is both necessary and proper for the carrying into execution of the main power which has been expressly conferred. (Dunichand and Co. vs. Narain Das and Co. (1947) 17 Comp. Cas. 195 (FB)."

24. Each word employed in a statute must take colour from the purport and object for which it is used. The principle of purposive interpretation, therefore, should be taken recourse to.

25. Revision of scales of pay as also other allowances is technical in nature. When a benefit is extended to a group of employees the effect of such benefit, if otherwise comes within the purview thereof must be held to be applicable to other groups of employees also. An employee is entitled to gratuity. It is not a bounty. It is payable on successful tenure of service. Regulation 77 provides as to how the amount of gratuity is to be calculated. Regulation 51 provides for a rule of measurement. Only because it employed the word "permanent basic pay", the same will not itself lead to the conclusion that once an employee has retired, he would not be entitled to any revision of the amount of gratuity.

26. The Chairman of the Corporation has himself given a retrospective effect to revision in scales of pay. Such a retrospective effect has also been given so as to benefit a class of employees. The employees, irrespective of the fact whether they had superannuated or not, were given the benefit of arrears of pay from 1^st August, 1993. By reason of grant of such benefit both to serving employees as also the superannuated employees, both the class of employees became entitled thereto as of right. If by reason thereof, even a retired employee, as on the date of retirement, became entitled to the benefit of the revised scale of pay, the same for all intent and purpose must be taken to be the permanent basic pay, apart from other allowances, if any, which are required to be taken into consideration for the purpose of computation of the amount of gratuity.

27. In Indian Bank and another vs. N. Venkatramani : 2007 (10) SCALE 475 : this Court gave effect to the beneficial provision in the light of the rule of measurement, stating :- "13. It may be true that various provisions of the Regulations as for example Regulations 16, 17, 19, 23, etc. provided for qualifying service. Regulation 18 is not controlled by any of the said provisions. It does not brook any restrictive interpretation. It only provides for a rule of measurement. An employee, as noticed hereinbefore, was entitled to pension provided he has completed the specified period of service. How such a period of service would be computed is a matter which is governed by the statute. It is one thing to say that a statute provides for completion of fifteen years of minimum service, but if a provision provides for measurement of the period, the same cannot be lost sight of. Provision of the Regulations which are beneficial in nature, in our opinion, should be construed liberally."

28. Contention of Mr. Patwalia that the Chairman of the Corporation having power even to fix the cut off dates for different purposes, the jurisdiction exercised by him to do so for payment of gratuity, which has a direct nexus with the revised pay of scale cannot be accepted. Once he fixes a cut off date for the purpose of giving effect to the agreement vis-`-vis the payment of arrears in terms thereof, he cannot exercise further jurisdiction in respect of a matter which is not controlled by Chapter IV but is controlled by other provisions of statutes and Parliament Acts governing the field. A delegatee must exercise its powers within the four-corners of the statute. The power of a sub-delegatee is more restricted. A delegatee cannot act in violation of a statute. A sub-delegatee cannot exercise any power which is not meant to be conferred upon him by reason of statutory provisions. It must conform not only to the provisions of the Regulations and the Act but also other Parliamentary Acts. [See Kurmanchal Inst. of Degree and Diploma and Ors. vs. Chancellor, M.J.P. Rohilkhand Univ. and Ors. (2007) 6 SCC 35, Kerala Samsthana Chethu Thozhilali Union vs. State of Kerala and Ors. ( 2006 ) 4 SCC 327 Bombay Dyeing & Mfg. Co. Ltd. vs. Bombay Environmental Action Group & Ors. (2006) 3 SCC 434, State of Kerala and Ors. vs. Unni and Anr (2007) 2 SCC 365, State of Orissa and another vs. M/s. Chakobhai Ghelabhai and Company : 1961 (1) SCR 719 and M/s. Shroff and Co. vs. Municipal Corporation of Greater Bombay and another : (1989) Supp. 1 SCC 347].

28. We, however, do not intend to lay down the law that the expression "incidental" or "connected" would be matters which are of a casual nature only, but, we reiterate that the same must have something to do with the nature of power granted to the authority concerned.

29. Unfortunately before the Gujarat High Court and the Karanataka High Court, both the counsels have missed in bringing to the Court's notice this aspect of the matter.
30. We, therefore, do not find any merit in this appeal which is accordingly dismissed with costs. Counsel's fee assessed at Rs.25,000/-.

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

SPECIAL CIVIL APPLICATION No. 21345 of 2007

With

SPECIAL CIVIL APPLICATION No. 21346 of 2007

To

SPECIAL CIVIL APPLICATION No. 21411 of 2007

=========================================================

MANOJBHAI N. SHAH & 66 - Petitioner(s)

Versus

UNION OF INDIA & 4 - Respondent(s)

=========================================================

Appearance :

MR DHARMESH V SHAH for Petitioner(s) : 1 - 67.

None for Respondent(s) : 1 - 5.

=========================================================

CORAM :

HONOURABLE MR.JUSTICE JAYANT PATEL

Date : 10/12/2007

COMMON ORAL ORDER

1. In all the petitions, common prayers and common questions are there, and therefore, they are being considered by this Court by this common order.

2. The petitioners have preferred the petitions for a relief inter alia to challenge the second proviso of sub-clause (3) of clause 1 of para 1 of the Notification No. S.O.1792(E) dated 21.12.2005, whereby the benefit of revision of pay-scale to the persons who opted for Special Voluntary Retirement Scheme (hereafter 'the SVRS/retirement scheme) are specifically conferred. The petitioners have also prayed to challenge the decision of the respondent authority dated 08.02.2007, whereby the representation of the petitioners have been rejected.

3. The petitioners have also prayed to issue appropriate writ to the respondents to grant fixation of pay to the petitioners w.e.f. 01.08.2002 till the date of retirement and further grant all consequential benefits of arrears of pay, all benefits of the revised pay-scale and also pension, P.F., Gratuity, leave encashment etc.

4. Heard Mr. Sandeep Shah with Mr. Dharmesh Shah learned counsel appearing on behalf of the petitioners.

5. Mr. Shah, learned counsel appearing for the petitioners first contended that the notification, whereby the petitioners had opted for the Scheme of SVRS did provide for reserving the benefit of the revision of the pay-scale and it has been therefore submitted that after the date on which the petitioners opted for SVRS, if the revision of pay-scale has been granted w.e.f. 01.08.2002, the petitioners would be entitled to the benefit for all purposes and such benefit cannot be withdrawn. He also submitted that, as such, in the notification, there is no clause for fixation of notional benefit, for the persons who have opted for SVRS and administrative instructions issued are not provided in the notification and therefore, without authority.

6. He alternatively submitted that if it is found by this Court that the notification does provide for consideration of notional fixation of the pay-scale as per the revised scheme, then such clause would be unjust, unreasonable, arbitrary and hence, unconstitutional and therefore, this Court may strike down such clause in the notification. He submitted that there is also discrimination on the part of the Insurance Corporation as well as the Union Government since the revision has been granted including that of the pensionary benefits to those employees who have retired from service upon reaching the age of superannuation etc. and their pensions have been revised. Whereas, in the case of the petitioners, a specif restricted benefit is sought to be conferred and therefore, the petitioners are meted out with the discriminatory treatment by the Central Government which would be violative of Article 14 of the Constitution.

7. He lastly submitted that the petitioners had approached this Court earlier by preferring Special Civil Application No. 19927 of 2006 and allied matters and this Court made certain observations and directed for reconsideration of the matter. Such observation are also not considered and he further contended that opportunity of hearing was prayed by the petitioners before the decision and therefore, he submitted that this Court may consider the matter.

8. Mr. Shah, learned counsel for the petitioners also contended that in other High Courts, i.e., High Court of Madras, High Court of Bombay and High Court of Calcutta, for consideration of similar question, petitions have been admitted and are pending for final hearing, whereas, before the Himachal Pradesh High Court, he has received instructions that the Himachal Pradesh High Court has allowed the petition. He is not having the copy of the order and therefore, he submitted that this Court may also consider such circumstances.

9. It is an admitted position that all the petitioners are the persons, who have opted for SVRS Scheme which had come into effect from 01.01.2004. In the said Scheme, para 5(2) it was provided as under:

“The ex-gratia shall be computed on the basis of his/her salary as on the date of relieving. In case, wage revision is effected from a date prior to the date of this notification, the benefit of revised pay for the purpose of payment of ex-gratia will be allowed.”

Therefore, the scheme did provide for revision in payment of the ex-gratia amount, if there is wage revision with the prior date. It is also an admitted position that after the date on which the petitioners have opted for SVRS and have been paid the ex-gratia amount as per the scale prevailing then at the time when they opted for SVRS.

10. It appears that as per the notification dated 21.12.2005, there is wage revision/pay revision given w.e.f. 01.08.2002. However, in the very notification, in clause 1(3), it is provided as under:

“1.(3) This Scheme shall be applicable to those Officers who were in the service of the Corporation or Company as on, or after, the 1st day of August, 2002:

Provided that the officers, whose resignations had been accepted or whose services had been terminated during the period from the 1st day of August, 2002 and the date of publication of this Scheme, shall not be eligible for the arrears on account of revision under this Scheme:

Provide further that the officers, who had sought Special Voluntary Retirement under,-

a. the General Insurance Officers' Special Voluntary Retirement Scheme, 204, (S.O. 7(E) dated 1st January, 2004), in the case of Company; or

b. the General Insurance Corporation of India Officers' Special Voluntary Retirement Scheme, 2004 (S.O.455(E) dated the 1st April, 2004), in the case of Corporation.

and have been relieved thereunder prior to the date of notification, shall not be eligible for any benefit arising from this Scheme other than that provided for by sub-paragraph 2 of paragraph 5 of the General Insurance Officers' Special Voluntary Retirement Scheme, 2004, or, the General Insurance Corporation of India Officers' Voluntary Retirement Scheme, 2004, as the case may be.”

11. It is true that the effect is given from 01.08.2002. However, as per the well settled principles of law of interpretation, proviso to the main clause is to be read as an exception to the general foregoing clause. The first proviso is concerned to a different category, but the pertinent aspect is that, it has been specifically provided that the officers whose resignations have been accepted or whose services have been terminated prior to 01.08.2002 shall not be eligible for arrears on account of the revision under the Scheme. Therefore, such benefit is denied to those categories of officers. The second proviso further carves out an exception for the officers who had sought SVRS and who have been relieved prior to the notification. In the second proviso, it has been provided that such officers who have sought SVRS shall not be eligible for any benefit arising from the scheme other than as provided in sub paragraph (2) of para 5 of General Insurance Officers' Special Voluntary Retirement Scheme, 2003 or the General Insurance Corporation of India Officers' Special Voluntary Retirement Scheme of 2004, as the case may be. Therefore, there is a saving clause provided for reserving benefit as per sub paragraph (2) of paragraph 5 of the SVRS Scheme and no benefit other than the same.

12. After the notification, with a view to give effect to the notification, for the purpose of computing the benefit including for those officers who opted for SVRS Scheme, the instructions are issued by respondents dated 27.12.2005 in which, at para 2.3, it has been provided as under:

“2.3. In terms of the second proviso to paragraph 1(3) of the Second Amendment Scheme, 2005, the Officers who had sought voluntary retirement under the Special Voluntary Retirement Scheme, 2004 shall be eligible for the benefit of ex-gratia calculated on the basis of the revised scales of pay as per the Second Amendment Scheme, 2005 in terms of sub-paragraph 5 of the General Insurance Officers' Special Voluntary Retirement Scheme, 2004 (S.O.7(E) dated the 1st January, 2004).

For this purpose, the concerned Officer shall be notionally fitted in the revised scale or pay as on the date of his relieving.”

13. It is an admitted position that the petitioners are paid the amount of the difference as per the administrative instructions vide para 2(3) referred hereinabove. Therefore, in light of the aforesaid factual position, the challenge is to be considered.

14. Whenever any revision in the pay-scale is being made, even though the effective date is prior to the date on which the decision is taken, if the matter is to be considered for giving the equivalent revised pay-scale to the officer concerned, the parity is to be considered with the basic scale, unrevised in comparison to basic pay revised and the effect to be considered in equivalence. In the present case, it is an admitted position that in comparison to the equivalent pay-scale, revised pay-scale has been given by giving notional pay fixation on the date when the person concerned opted for SVRS and on the said aspects, there is no dispute as submitted by the learned counsel for the petitioners. However, the contention is that such revised pay-scale in the equivalent scale on the date of SVRS should be given effect from 01.08.2002 and not on the date on which the person opted for SVRS.

15. Prima facie, such contention may appear to be attractive, but on the close scrutiny, it appears that the same is meritless. The reason is that, the the pay-scale including earned increment of the person concerned on the date when he opted for SVRS in unrevised pay-scale is to be compared with the revised pay-scale including the increment which may be on the date when the person opted for SVRS and the last pay drawn on the date when the person opted for SVRS is not to be treated as on the date when the revision of the pay-scale is to be made, i.e. 01.08.2002. The normal interpretation of the revision of the pay-scale would mean placement of the person concerned in the equivalent pay-scale from the effective date, but with the notional benefit of earned increment as the case may be. Therefore, if a person has completed some year of service and has earned increment in the original pay-scale unrevised and if the revision is made, the period is to be counted notionally and the revised pay-scale is to be fixed. It is an admitted position that the petitioners last pay-scale unrevised was Rs.19,000/- and the equivalent revised pay-scale is Rs.28,505/- (taking the base of one of the petitioners for the purpose of understanding the dispute as contended by the learned counsel for the petitioners, the basis is taken of the pay-scale of one of the petitioner Shri M.N. Shah whose name is at Sr. No.8 at page No.65 and the case of all other petitioners are the same as declared by the learned counsel for petitioners except that figures shall vary). Therefore, the notional fixation in the equivalent pay-scale revised is considered for Rs.28,605/-.

16. The contention appears that Rs.28,605/- should be the basic pay-scale as on 01.08.2002 and not on the date when the petitioners opted for SVRS. If the equivalent revised pay-scale is considered keeping in view the last unrevised pay-scale on the date when the person concerned is relieved, the effect is included from 01.08.2002 and it cannot be said that such equivalent pay-scale of Rs. 28,605/-in case of Mr. M.N. Shah, whose example is given and facts are exactly similar, except the change in figure, the pay-scale deserves to be treated as on 01.08.2002. If such an argument is accepted, it would frustrate the very basic intent of the revision of the pay-scale and would be read as conferring of additional benefit. As in the present case, the revision of the equivalent basic pay-scale as the petitioners concerned were enjoying on the date when they opted for SVRS has been given, the contention that such should be taken back as on 01.08.2002 cannot be accepted.

17. Therefore, if in the administrative instruction, it has been mentioned for conferring notional benefit, for fixation in the revised pay-scale of the officer concerned who has opted for SVRS on the date of relieving, such instructions cannot be said as in contravention to the notification for revision of pay-scale, but are in consonance with the notification for revision of pay-scale. Therefore, the contention of the petitioner that the administrative instructions are in addition to the notification for revision of the pay-scale without there being any authority or that they are in contravention thereto cannot be accepted.

18. Even otherwise also, if the administrative instructions are in furtherance to and with a view to achieve the object of the notification of the revision of the pay-scale by giving the correct effect of the interpretation of the notification for revision of the pay-scale, such cannot be said as arbitrary or without proper application of mind.

19. As regards the challenge to the second proviso to sub-clause (3) of the notification dated 21.12.2005 is concerned, the same cannot be said to be ultra vires to the power of the Government or the employer nor can it be said as arbitrary or unreasonable or discriminatory for the reasons as stated hereinafter.

20. Firstly, the second proviso is to be read as an exception to the General Revision of the pay-scale in the scheme w.e.f. 01.08.2002. Further, the second proviso itself takes care of the benefit, which were to be reserved by sub-paragraph (2) of paragraph 5 of SVRS Scheme. The class of the petitioners who opted for SVRS cannot be equated with those persons who actually worked till they reached the age of superannuation and retired by normal mode. Special VRS as such, can be said as a package an a special deal or a Scheme declared by the employer and the benefit conferred, if any, are to be construed strictly and such benefit cannot be equated with the general benefit to be extended to the employees who are already in service and who have not opted for SVRS. Therefore, if for a specif class of persons, a specific restricted benefits are extended by the employer, it can be said as on rational basis for classification and such is permissible and it would not result into discrimination as sought to be canvassed.

21. The aforesaid is coupled with the circumstance that as per the first proviso in case of officers, whose resignations have been accepted or whose services have been terminated after 01.08.2002, no benefit whatsoever for the arrears on account of the revision of the pay-scale are conferred. As against the same, the petitioners have been conferred a larger benefit for revision of the pay-scale subject to restriction as contained in the second proviso.

22. Sub-paragraph(2) of paragraph 5, which is reproduced hereinabove in the earlier pararaph makes room for computation on the basis of the salary on the date of relieving for the purpose of counting the ex-gratia amount and such benefit are even otherwise sought to be conferred upon the officers who opted for SVRS like the petitioners by the second proviso to the notification and therefore, second provision to the notification is not in contravention to sub-paragraph(2) of paragraph 5 of General Insurance Officers' Special Voluntary Retirement Scheme nor does it take away the benefit which was otherwise provided. Therefore, when in the impugned second proviso to clause 1(3) of the notification dated 21.12.2005, the benefit for the purpose of computation of the ex-gratia amount are reserved and maintained, it can hardly be accepted that the second proviso to clause 1(3) of the notification dated 21.12.2005 is arbitrary or unreasonable.

23. Even otherwise also, when the benefits are maintained for the purpose of computation in the revised pay-scale, it cannot be said as unreasonable, but is rather reasonable. When the benefit is to be considered for the purpose of computation of the ex-gratia amount, the natural consequence would be for notional computation and the same is undertaken in the present case and the petitioners have been paid the difference of the amount on the basis of the notional computation in the equivalent pay-scale at the time when the person concerned was relieved as per the SVRS

24. In view of above, it cannot be said that the impugned order dated 09.02.2007 (Annexure-K) is arbitrary or unreasonable

25. When this Court earlier considered the matter being Special Civil Application No.19927/06 vide order dated 19.09.2006, while enabling the petitioners to make the representation, at para 5, it was observed as under:

“ In view of the aforesaid observations and directions, present petitions are disposed of, without expressing any opinion on merits”

It was further observed by the Court that the petitioners may challenge the decision if the representation is rejected. Therefore, it is apparent that this Court wanted to keep all questions open and the observations if any cannot be read a conclusive, on merits.

1. As regards the last submission for the breach of the principles of natural justice is concerned, the revision of the pay-scale itself is not challenged and the petitioners themselves have admitted the same. In view of the reasons recorded hereinabove, when the effect of revision of pay-scale has been correctly given, it cannot be said that any order prejudicial to the legal rights of the petitioners has been passed and therefore, no useful purpose would be served in entertaining the contention that the order is in breach of the principles of natural justice and therefore, the said contention is not entertained.

2. As regards the pendency of the petitions before the other High Courts is concerned, at the most, such situation can be termed as matter under consideration, but cannot be equated with the final view taken by any High Court. As the learned counsel for the petitioners even otherwise is also not in a position to produce the copy of the order of the Himachal Pradesh High Court, this Court is unable to consider the said view and therefore, the matter is independently examined and reasons are as recorded hereinabove. In any case, no useful purpose would be served in keeping the matter pending, if the Court finds that the matters are meritless. Hence, the order accordingly.

3. In view of the above, no case is made out for interference. Hence, dismissed.

(JAYANT PATEL, J.)

IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA

CWP No.: 189 of 2006.

Reserved on: 2.11.2007.

K. S. Raina. -------------Petitioner.

Versus

Coram:

The Hon’ble Mr. Justice Rajiv Sharma, Judge.

Whether approved for reporting?* Yes.

For the Petitioner: Ms. Ranjana Parmar, Advocate.

For Respondent No. 1: Ms. Shilpa Sood,

Central Government Counsel.

Rajiv Sharma, J.

The brief facts necessary for the adjudication of this petition are that the petitioner started his career in respondent No. 2 – Company as an Assistant in the year 1969. He submitted application seeking voluntary retirement under Special Voluntary Scheme on 4^th February 2004. The request was accepted by the employer on 5^th March 2004 and he was permitted to retire with effect from 15^th March 2004. Respondent No. 1 had issued notification dated 21^st December 2005 under Section 17A of the General Insurance Business (Nationalisation) Act, 1972 whereby the Scheme called as the General Insurance (Rationalisation of Pay Scales and other Conditions of service of Officers) second Amendment Scheme, 2005 was framed. The Scheme has come into force with effect from 1^st August 2002. Under the Scheme the scales of the Officers working in the company were revised. While implementing the Notification on 21^st December 2005 the category to which the petitioner belongs, i.e. who had sought voluntary retirement under 2004 Scheme was excluded except for the limited relief. The petitioner had approached this Court for the following reliefs:-

(i) That the General Insurance (Rationalisation of Pay Scales and Conditions of service of Officers) second Amendment Scheme, 2005 may be quashed and set aside to the extent it excludes the Officers who have sought Special Voluntary Retirement under Special Voluntary Retirement Scheme 2004 (S.O 7(E) dated 1.1.2004 and the General Insurance Corporation of India Officers’ Special Voluntary Retirement Scheme 2004 (S.O 455(E) dated 1^st April 2004) and were relieved prior to the date of notification dated 21.12.2005 resulting in deprivation of the revised pay scale to the petitioner.

* Whether reporters of local papers are allowed to see the judgment? Yes.

(ii) That after quashing the proviso under 3A and B, the respondents may be directed to revise the pay scale of the petitioner as per the notification dated 21.12.2005 and to pay him the arrears alongwith interest at some nationalised bank rate.

(iii) That the respondents may further be directed to revise the pensionary benefits to the petitioner after such pay fixation as directed by this Hon’ble Court alongwith arrears with interest at some nationalized bark rate.

(iv) That the cost of this litigation may be burdened upon the respondents.

(v) Any other order deemed just and proper in the facts and circumstances of the case may also be passed in favour of the petitioner.

Ms. Ranjana Parmar has strenuously argued that second proviso of para 3 of the Notification dated 21^st December 2005 as applicable to her client is violative of Articles 14 and 16 of the Constitution of India. She then contended that the category to which the petitioner belongs could not be excluded on the basis of the Notification dated 21^st December 2005 and her client is entitled to revised pay scale with effect from 1^st August 2002.

Mr. Ashwani Sharma was supported the Notification dated 21^st December 2005 and has strenuously argued that since the petitioner had sought voluntary retirement under Special Voluntary Retirement Scheme 2004, he is precluded from challenging the vires of conditions enumerated in Para 3 of the Scheme.

I have heard the learned counsel for the parties and perused the cord.

To appreciate the rival submissions of the parties, it will be appropriate to consider the salient features of the Schemes which were invogue in respondent No. 2 – Company from time to time. The first Scheme under which an employee of the company can seek voluntary retirement is called the General Insurance (Employees’) Pension Scheme, 1995. Para 30 of the Scheme provides that at any time after an employee has completed twenty years of qualifying service, he may by giving notice of not less than ninety days, in writing to the appointing authority, retire from service. Para 30 is reproduced in its entirely, which reads thus:-

“(30) Pension on voluntary retirement:-

(1) At any time after an employee has completed twenty years of qualifying service, he may, by giving notice of not less than ninety days, in writing to the appointing authority, retire from service:

Provided that this sub – paragraph shall not apply to an employee who is on deputation unless after having been transferred or having been returned in India he has served for a period not less than one year:

Provided further that this sub – paragraph shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking to which he is on deputation at the time of seeking voluntary retirement.

(2) The notice of voluntary retirement given under sub – paragraph (1) shall require acceptance by the appointing authority:

Provided that where the appointing authority does not refuse to grant the permission for retirement for retirement before the expiry of the period specified in the said notice, the retirement shall before effective from the date of expiry of the said period.

(3) (a) An employee referred to in sub paragraph (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than ninety days giving reasons therefore.

(b) On receipt of request under clause (a), the appointing authority may, subject to the provisions of sub – paragraph (2), consider such request for the curtailment of the period of notice of ninety days on merits and it he is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may leave the requirement of the notice if ninety days in the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of ninety days.

(4) An employee who has elected to retire under this paragraph and has given necessary notice to that effect to the appointing authority shall be precluded from withdrawing his notice except with the specific approval of such authority:

Provided that the request for such withdrawal shall be made before the intended date of his retirement.

(5) The qualifying service of an employee retiring voluntarily under this paragraph shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty three years and it does not take him beyond the date of retirement.

(6) The pension on an employee retiring under this paragraph shall be based on the average emoluments as defined under clause (d0 of paragraph 2 of this scheme and the increase not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating his pension:

Explanation:- For the purpose of this paragraph, the appointing authority shall be the appointing authority specified in Appendix – 1 to this Scheme.”

The petitioner had sought retirement under the Special Voluntary Retirement Scheme, 2004. Para 3 of the Scheme prescribes the eligibility criteria and the period of operation of the scheme is provided under Para 4 and the amount of ex-gratia has been stipulated under Para 5 and other benefits to which an employee has been held entitled, has been stipulated under Para 6.

The petitioner submitted the application under Special Voluntary Retirement Scheme, 2004 on 4^th February 2004, which was accepted by the employer on 5^th March 2004 and he was permitted to retire with effect from 15^th March 2004. Respondent No. 1 had issued the Notification dated 21^st December 2005 framing a Scheme called the General Insurance (Rationalisation of Pay Scales and other Conditions of service of Officers) second Amendment Scheme, 2005, it will be apt to reproduce para 3 of the scheme in its entirety to go into the entire gamut of the issues involved in this petition. Para 3 reads thus:-

“(3) This scheme shall be applicable to those Officers who were in the service of the Corporation or Company as on or after the 1^st August 2002.

Provided that the officers, whose resignations had been accepted or whose services had been terminated during the period from the 1^st day of August 2002 and the date of publication of this scheme, shall not be eligible for the arrears on account of revision under this Scheme.

Provided further that the officers, who had sought Special Voluntary Retirement under:-

a. The General Insurance Officers’ Special Voluntary Retirement Scheme 2004 (S.O 7(E) dated 1^st January 2004), in the case of Company, or

b. The General Insurance Corporations of India Officers’ Special Voluntary Retirement Scheme 2004 (S.O 455(E) dated 1^st April 2004), in the case of Corporation.

And have been relieved thereunder prior to the date of this notification, shall not be eligible for any benefit arising from this Scheme other than that provided for by sub – paragraph 2 of paragraph 5 of the General Insurance Officers’ Special Voluntary Retirement Scheme 2004, or, the General Insurance Corporations of India Officers’ Special Voluntary Retirement Scheme 2004, as the case may be.”

It has come in the supplementary affidavit filed on behalf of respondent No. 2 that the wage revision of the employees of the nationalized insurance companies follows a periodicity of five years, i.e. 1^st August 1987, 1^st August 1992, 1^st August 1997 and 1^st August 2002. Thus, it is evident that in normal circumstances wage revision should have taken place in the year 2002 instead of 2005.

The General Insurance (Rationalisation of Pay Scales and other Conditions of service of Officers) second Amendment Scheme, 2005 has come into force with effect from 1^st August 2002. The petitioner had sought retirement with effect from 15^th March 2004. In the normal circumstances the petitioner was entitled to get the wage revision in the basis of the Notification on 21^st December 2005 since the same had been made applicable with effect from 1^st August 2002, but the petitioner and similarly situate persons who had sought voluntary retirement under the Special Voluntary Retirement Scheme 2004 had been excluded from getting the benefit of revision in pay scales on the basis of Para 3.

The only ground taken to deny the benefit of revision of pay scale is that the petitioner had agreed to the terms and conditions of 2004 scheme and after his retirement under the Special Voluntary Retirement Scheme the contract has come into existence between the employer and the employee. The ground taken to deny the petitioner the benefit of revised pay scale with effect from 1^st August 2002 is not sustainable on the following grounds:

Firstly, the persons who had sought voluntary retirement either under the General Insurance (Employees’) Pension Scheme 1995 or under 2004 Scheme constitute a homogeneous class. It is evident from the contents of para 3 of 2005 Scheme that the persons who are governed under the General Insurance (Employees’) Pension Scheme 1995 are not precluded from getting the benefit of revised pay scale and it is only the petitioner and similarly situate persons who had sought the retirement under 2004 scheme, who have been excluded from getting the revised pay scales. There is no intelligible differentia so as to distinguish the employees who had sought the voluntary retirement under 2004 Scheme or under the General Insurance (Employees’) Pension Scheme 1995. Classification made by the employer on the basis of seeking premature retirement on the basis of two sets of retirement schemes is not sustainable being irrational and discriminatory. The petitioner had submitted his papers for seeking retirement on 4^th February 2004, which was accepted by the employer on 5^th March 2004 and he was permitted to seek retirement with effect from 15^th March 2004. The wage revision as per the pleadings of respondents No. 2 and 3 takes place every five years. The pay scales were to be revised in the year 2002, but for the reasons mentioned in the reply it took place in the year 2005. A conscious decision has been taken to implement the same with effect from 1^st August 2002. Undoubtedly the petitioner was in employment in 1^st August 2002 with respondent No. 2 – Company. He cannot be deprived of the revision of the pay scales with effect from 1^st August 2002 to 15^th March 2004 only on the ground that he had sought voluntary retirement in the year 2004 and had agreed to the terms and conditions of the Scheme. Learned counsel appearing on behalf of respondents No. 2 and 3 has not placed any contemporaneous record to substantiate that the petitioner has agreed to waive to get the benefits of the revised pay scale. This position was not visualized by the employer in the year 2004 since no revision has taken place on that date i.e. 15^th March 2004. The matter can be viewed from another angle also. The petitioner has a constitutional right to get his pay including the revision in the pay scale and it is settled law by law the fundamental rights can neither be waived off nor bartered away.

Secondly, it is also held that the petitioner had never acquiesced even as per 2004 Scheme to get the revised pay scale which had been made applicable with effect from 1^st August 2002.

Thirdly, the object sought to be achieved by the issuance of the Notification dated 21^st December 2005 was to give the revised pay scales which were due in 2002. In fact, this has been done by giving retrospective effect vide Notification dated 21^st December 2005. It is, thus, held that classification created on the basis of insertion of sub-clauses (a) and (b) in second proviso of Para 3 is violative of Articles 14 and 16 of the Constitution of India.

Their Lordships of the Hon’ble Supreme Court in State of Haryana and Another versus Jai Singh, (2003) 9 SCC 114 have laid down the following tests for valid classification under Article 14 of the Constitution of India:

“We will first take up for consideration the argument accepted by the High Court in the impugned judgment that the impugned classification is arbitrary, unreasonable and violative of Article 14 of the Constitution. While considering the challenge based on Article 14 as to the arbitrariness in the impugned classification, the court has to examine whether the impugned classification satisfies certain constitutional mandates or not. They are (i) that the classification must be founded on an intelligible differentia which distinguish persons or things that are grouped together from others left out of the group; (ii) that the differentia must have a rational relationship with the objects sought to be achieved by the Act. (See Kathi Raning Rawat v. State of Saurashtra.)”

Fourthly, the respondent No.2 being the “State” within the meaning of Article 12 of the Constitution of India its actions are subject to the constitutional limits and the same are to be judged in the light of the fundamental rights granted by Part-III of the Constitution. The action of an instrumentality or the agency of the State must be in conformity with Article 14 of the Constitution. The option given by the petitioner cannot bind him as it is violative of Article 14 of the Constitution of India and it also runs against the public policy. The action of the respondents is not supported by any rational basis or intelligible differentia.

The ratio of the judgment of (2006) 3 SCC 708 cited by Mr. Ashwani Sharma is not applicable to the facts of the present case for the simple reason that in the present case the petitioner was in fact in employment as on 1^st August 2002, the date from which the Notification (Annexure P-4) dated 21^st December 2005 has been made applicable.

Consequently, in view of the observations made above, send proviso of Para 3 of the Notification dated 21^st December 2005 is struck sown being ultra vires to the extent it deprives the petitioner and other similarly situate persons to get the benefit of revised pay scale with effect from 1^st August 2002 after applying the principle of severability.

According, the petition is allowed. The petitioner is held entitled to get the revised pay scale corresponding to his post he was occupying as on 1^st August 2002 till 15^th March 2004. The respondents are directed to work out the arrears etc. within six weeks from today.

December 3, 2007 (Rajiv Sharma), J.

(sok)

Bank employees who opted for voluntary retirement in the year 2000 and who had already opted for pension, were denied the benefit of addition to qualifying service in terms of Pension Regulations. The said denial came by way of enactment of an amendment retrospectively to Pension Regulations.

The aggrieved VRS optees knocked the doors of the judiciary. Supreme Court after calling for all the cases pending in various High Courts in India, decided the Civil Appeal No.1942 of 2009 (arising out of SLP No.8050/2006) alongwith Civil Appeal Nos. 1943 to 1957 of 2009. The Division Bench comprising Justice RM Lodha and Justice DK Jain vide order dated 27th March 2009, held that that the employees who had completed 20 years of service and were pension optees and offered voluntary retirement under VRS 2000 and whose offers were accepted by the banks are entitled to addition of five years of notional service in calculating the length of service for the purposes of that Scheme as per Regulation 29(5)of the Pension Regulations, 1995. The contrary view expressed by some of the High Courts do not lay down the correct legal position.