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CASE NO.: Appeal (civil)  5367-5368 of 2005

PETITIONER: The Principal Secretary to Government Finance & Planning Department

RESPONDENT: A.P. Pensioners Samaj & Ors

DATE OF JUDGMENT: 31/01/2007

BENCH: S. B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T

MARKANDEY KATJU, J.

       These appeals have been filed against the impugned judgment  dated 23.12.2003 of the Andhra Pradesh High Court in Writ Petition  Nos. 16719 and 18490 of 2003.

       The respondents in this appeal had filed O.As before the Andhra  Pradesh Administrative Tribunal seeking a direction to the State  Government to extend the benefits of G.O.Ms. No.87, Finance &  Planning (FW.Pen.1) Department, dated 25.5.1998 to all the pensioners  irrespective of their date of retirement and also to compensate the loss  sustained by the applicants.  It was contended therein that the pension  was calculated on the basis of ten months average pay and the  petitioners have been getting the said pension ever since the date of  their retirement.   However, the Government issued G.O.Ms. No.87  dated 25.5.1998 revising the fixation of pension on the basis of the last  drawn pay treating it as emoluments for the purpose of pension.   Hence, it was  contended that their pensions had to be re-fixed in terms  of G.O.Ms. No.87 dated 25.5.1998 and the same should be released  from the date of their respective retirements.  The Tribunal by its order  held that though the pensioners are entitled for re-fixation of their  pension in terms of G.O. Ms.No.87 dated 25.5.1998 they were not  eligible for any arrears that accrued prior to 25.5.1998.  The said order  was challenged by the State Government in the Writ Petitions.

       The State Government contended that the revised fixation of  pension on the basis of last drawn pay was applicable to those  pensioners who retired on or after 25.5.1998 and it cannot be made  applicable to the persons who retired prior to that date and that the  Government has power to fix a cut off date, which cannot be interfered  with by the Court.  Learned counsel for the State Government referred  to several decisions of this Court in support of his contention.

       The High Court dismissed the writ petition of the State  Government and held that the pensioners who were already drawing the  pensions cannot be denied the revision of pension on the basis of the  revised formula.  Thus, the High Court upheld the order of the  Tribunal, including the direction that the pensioners cannot claim any  arrears from a date anterior date to the G.O. 25.5.1998.   Aggrieved,  this appeal has been filed.

       We have heard the learned counsel for the parties and perused the  various decisions cited before us.

       A Constitution Bench of this Court in D.S. Nakara  vs.  Union of

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India 1983(1) SCC 305 has held that the employees who retired before  coming into operation of a pension scheme were also entitled to the  benefit of the said pension scheme.         However in V. Kasturi  vs.  Managing Director, State Bank of  India, Bombay and Anr 1998(8) SCC 30, the aforesaid decision was  distinguished, and it was held (vide paragraphs 22 and 23) that if an  employee was already getting some pension at the time of his  retirement then he would become eligible to get enhanced pension, if  such enhancement in the pension is made by an amendment to the  pension scheme subsequent to his retirement.  However, if the retired  employee was not getting any pension at all when he retired, he would  not be entitled to any pension if a pension scheme is introduced  subsequent to his retirement.

       Some subsequent decisions of this Court seem to have struck a  different note wherein it appears to have been held that even if a retired  employee was getting some pension at the time of his retirement, he  will not get the benefit of any enhancement in the pension subsequent  to his retirement vide T.N. Electricity Board  vs.  R. Veerasamy and  Ors. 1999(3) SCC 414,  State of West Bengal and Anr.  vs.  West  Bengal Govt. Pensioners’ Associations and Ors. 2002(2) SCC 179.

       In view of apparent conflict in these decisions, we are of the  opinion that the matter requires consideration by a larger Bench of this  Court.  Another point which requires consideration by a larger Bench is  whether any formal amendment to the A.P. Revised Pension Rule,  1980 was necessary, consequent to issue of the orders issued in  G.O.Ms. No.87, Finance, dated 25.5.1998, if the retired employees  wanted to get the benefit of the latter.

Let the papers of this case be filed before the Chief Justice for the  constitution of the larger Bench.