http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: STATE OF RAJASTHAN AND ANR.

       Vs.

RESPONDENT: AMRIT LAL GANDHI & ORS.

DATE OF JUDGMENT:       10/01/1997

BENCH: J.S. VERMA, B.N. KIRPAL

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T      KIRPAL, J.      Leave granted.      The common  question  of  law  which  arises  in  these appeals by  special leave  relates to  the date  with effect from which the revised pension is to be paid to the teachers of the  Jai Narayan  Vyas University  and Mohan Lal Sukhadia University who had retired between 1.1.1986 and 1.1.1990.      Though the  facts in these appeals are similar, for the purpose of this judgment. We need only refer to the facts in Civil Appeal Nos. 9710-9717 of 1995 and S.L.P. (C) No. 19231 of 1996 which arise from the judgment dated 30.8.1994 of the Division Bench of the High Court in D.B. Civil Writ Petition No. 115/1993  which considered  the rival contentions of the parties on  merit.. The  said judgment  has been followed by the High  Court while  allowing the writ petition from which Civil Appeal No. 9718 of 1995 arises.      In 1962,  Jodhpur University Act, 1962 was promulgated. For  the  teaching  staff  of  the  University  contributory provident fund  rules were  framed and  there was no pension scheme which was applicable to them.      It appears that the University Grant Commission in 1983 constituted a  committee  known  as  Mehrotra  Committee  to examine the  structure of emoluments and also the conditions of service of the University and College teachers.      The Mehrotra  Committee submitted  its report  in 1986, containing   various    recommendations.    One    of    the recommendations related  to  extending  pension-cum-gratuity scheme to the teachers of Universities and colleges.      Pursuant to  the said recommendations, resolutions were passed in  1986 by  the Syndicate  of University  of Jodhpur (now known  as Jai  Narayan Vyas University) and approved by the University  Senate for  the introduction  or  pensionary scheme in  the University.  According to this scheme, option was to  be given  to the  university employees to opt either for contributory  provident fund  or for  pension in lieu of the provident  fund. Draft  rules providing  for payment  of pension were also approved.      As the  proposed scheme had financial implications, the University had  to seek  the approval of the Government. The

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

Education Department  of the  Rajasthan Government, vide its letter dated  16.4.191, informed the Vice-chancellors of the Rajasthan University,  Jaipur, Jodhpur  University, Jodhpur, M.L. Sukhadia  University, Udaipur,  Ajmer University, Ajmer and Kota Open University, Kota that the State Government had decided to  introduce the pension scheme in the Universities of the  State W.E.F.  1.1.1990. It  is pursuant thereto that the cabinet  of the Jodhpur University on 24.4.1991 approved the resolutions  of the  Syndicate and  the Senate providing for the  introduction  of  the  pension  scheme.  Thereafter Pension  Regulations   1990  and   General  Provident   Fund Regulations 1990  were framed  and on  3.8.1991 options were invited from  all persons  who were  in the  service of  the University of  Jodhpur on  or after  1.1.1990 to  give their options whether  they wanted  to be  covered by the Provided Fund Regulations  or desired  to be  covered by  the Pension Regulations of 1990.      Thereafter, several  writ petitions  were filed  in the High Court  of Rajasthan.  Two writ  petitions were filed by the erstwhile  teachers of  the Rajasthan University who had retired prior  to 1.1.1986  while eight  writ petitions were filed  by   those  who  had  retired  between  1.1.1986  and 1.1.1990.      The Single  Judge of  the High  Court allowed  all  the aforesaid writ  petitions  and  directed  that  the  revised pension  scheme   should  be  made  applicable  to  all  the petitioners  including   those  who  had  retired  prior  to 1.1.1986. Appeals  were then filed before the Division Bench which, vide  judgment dated 30.8.1994. held that the revised pension scheme  should be  made  applicable  to  only  those employees who had retired between 1.1.1986 and 1.1.1990.      As already noticed above, the aforesaid judgment of the Division Bench  was followed in D.B. Civil Writ Petition No. 3489 of 1993 filed by the retired university teachers of the Mohan Lal  Sukhadia University,  Udaipur  from  which  Civil Appeal No. 9718 of 1995 arises.      On  behalf  of  the  appellants,  main  arguments  were addressed by  Shri Tapas  Ray, Sr.  learned counsel  in C.A. 9718 of  1995. He  referred to  the observations of the High Court to the effect that the Mehrotra Committee had made its recommendations in  1986 and the Syndicate and Senate of the University had  approved of  the grant  of pension  to those employees who  had retired  after 1.1.1986, and there was no reason as  to why  the Pension  Regulations should have been made applicable  with effect from 1.1.1990. It was contended by Shri Ray that the High Court overlooked the fact that the Pension  Regulations   which  were   framed  and  were  made applicable w.e.f.  1.1.1990 in  view of  the decision of the State of  Rajasthan contained in its letter dated 16.4.1991. He further  submitted that  the date,  as  to  when  pension scheme was  to be  made applicable, was a policy matter. The Government having  decided, as  a matter of policy, that all the Universities  in Rajasthan were to introduce the Pension w.e.f.  1.1.1990   the  said  decision  could  not,  it  was submitted, be challenged.      Mr. Ray  drew our  attention to  the decisions  of this Court in  State of  West Bengal  and others Vs. Ratan Behari Dey and  others, (1993) 4 SCC 62 and Union of India Vs. P.N. Menon and  others, (1994)  4 SCC  68 and  contended that the High Court  fell in  error in not following the ratio of the aforesaid decisions  in which  it was  clearly held  that  a particular  cut-off  date  could  be  fixed  while  granting pensionary benefits.      In Ratan  Behari case (supra), the Calcutta Corporation had in force a provident fund scheme. A demand was raised in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

1977 for  the introduction  of a  pension  scheme.  A  three member  committee   was  constituted  and  pursuant  to  its recommendations, which  were accepted by the Government with some modifications, Pension Regulations were framed in 1982. Effect was  given to these Regulations on and from 1.4.1977. The fixing of the date of 1.4.1977 was challenged by some of the members  of the  Calcutta Municipal  Corporation who had retired prior  to 1.4.1977.  The Calcutta High Court allowed the writ  petitions by  holding that  the date  of 1.4.1977, with effect  from when  the Pension Regulations were to come into effect,  was non  est  and  void.  While  allowing  the appeals, and  dismissing  the  writ  petitions,  this  Court examined the  reasons why  the date  1.4.1977 has been fixed and then observed as follows:      "Now, it is open to the State or to      the Corporation,  as the  case  may      be, to  change  the  conditions  of      service   unilaterally.    Terminal      benefits  as   well  as  pensionary      benefits constitute  conditions  of      service.  The   employer  has   the      undoubted  power   to  revise   the      salaries and/or  the pay  scales as      also  terminal  benefits/pensionary      benefits. The  power to  specify  a      date from which the revision of pay      scales         or          terminal      benefits/pensionary  benefits,   as      the case maya be, shall take effect      is a concomitant of the said power.      So long  as such  date is specified      in  a   reasonable  manner,   i.e.,      without    bringing     about     a      discrimination  between   similarly      situated persons,  no  interference      is called  for by the court in that      behalf."      In P.N.  Menon case  (supra) the  question again  arose with regard  to  fixing  of  cut-off  date  for  payment  of gratuity and  pension. In  that case  the cut-of date, which was fixed,  was 30.9.1977.  While allowing  the appeals  and repelling the challenge to the fixation of the said date, it was observed at pages 73-74 as under:      "Whenever  the   Government  or  an      authority, which  can be held to be      a  State   within  the  meaning  of      Article  12  of  the  Constitution,      frames a  scheme  for  persons  who      have   superannuated from  service,      due to  many constraints, it is not      always possible  to extend the same      benefits   to    one    and    all,      irrespective  of   the   dates   of      superannuation. As such any revised      scheme   in    respect   of   post-      retirement benefits, if implemented      with a  cut-off date,  which can be      held to  be reasonable and rational      in the  light of  Article 14 of the      Constitution, need  not be  held to      be invalid.  It shall not amount to      "picking out  a date  from the hat,      as was  said by  this Court  in the      case of D.R. Nim "V. Union of India      in  connection   with  fixation  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

    seniority.  Whenever   a   revision      takes place, a cut-off date becomes      imperative because  the benefit has      to be  allowed within the financial      resources   available    with   the      Government."      It again  reiterated at  page  75  that  "not  only  in matters of  revising the  pensionary benefits,  but even  in respect of revision of scales of pay, a cut-off date on some national or  reasonable basis, has to be fixed for extending the benefits".      Applying the  ratio of  the aforesaid  decisions to the present case,  we find  no justification  for the High Court having substituted  the date of 1..1986 in lieu of 1.1.1990. It is  evident that  for introducing a pension scheme, which envisaged financial  implications, approval of the Rajasthan Government was required. In the letter of 16.4.1991. written to  the   Vice-Chancellors  of   different  universities  of Rajasthan, it was stated as follows:      "As per  the direction in regard to      the aforesaid  subject,  the  State      Government has decided to introduce      Pension Scheme  in the Universities      of the  State w.e.f.  1.1.1990.  In      this regard  the State  Legislature      has passed University Pension Rules      and General  Provident Fund  Rules.      Therefore, by  enclosing a  copy of      University Pension  Regulations and      General Provident  Fund Regulations      with this  letter, it  is requested      that by  obtaining approval  of the      competent body  or syndicate of the      University,  these  Regulations  be      implemented   in   the   University      together and  necessary information      regarding     implementation     be      intimated."      The Syndicate  and forwarded  their recommendations  in 1986, did not contain a specific date with effect from which the  pension   scheme  was  to  be  made  applicable.  Their recommendations were  subject to  approval. The approval was granted by  the Government,  after the State Legislature had passed University  Pension Rules  and General Provident Fund Rules. The Government had stated in its affidavit before the High Court  that the  justification of  the cut-off  date of 1.1.1990 was  "wholly economic".  It cannot be said that the paying capacity  is not  a relevant  or valid  consideration while fixing  the cut-off  date. The  University  could,  in 1991,  validly   frame  Pension   Regulations  to   be  made applicable prospectively.  It, however,  chose to  give them limited retrospectively  so as  to cover  a larger number of employees by  taking into  account the  financial impact  of giving retrospective  operation to  the Pension Regulations. It was  decided that employees retiring on or after 1.1.1990 would be  able to  exercise the  option  of  getting  either pension or  provident fund.  Financial impact  of making the Regulations retrospective  can  be  the  sole  consideration while fixing  a cut-off  date. In  our opinion, it cannot be said that this cut-off date was fixed arbitrarily or without any reason.  The High Court was clearly in error in allowing the writ petitions and substituting the date of 1.1.1986 for 1.1.1990.      Mr. Anil  B. Diwan,  Sr. Advocate  appearing  in  Civil Appeal Nos. 9710-9717 of 1995 for respondent No.1, contended

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

that the  University had  asked for  extension  of  time  to implement the  judgment  and  must  be  regarded  as  having accepted the  decision specially when the University had not come in  appeal and,  therefore, whatever be the decision of this court  on the  question of  law,  the  benefit  of  the judgment should  be given  to his  clients who  had  retired between 1.1.1986 to 1.1.1990.      It is true that the University has not filed any appeal but the State of Rajasthan has challenged the correctness of the decision of the High Court and it was represented at the bar, on  behalf of  the appellant, that only the options had been invited  and the  judgment had not been given effect to and no  pension has  been given  to those  employees who had retired  between  1.1.1986  to  1.1.1990.  Counsel  for  the University stated that as the State of Rajasthan had a filed an appeal, therefore the University chose not to file one of it’s own.  We, therefore,  do not  see any  reason as to why this decision  should not be applicable to all the employees who had  retired prior to 1.1.1990 as it cannot be held that the University  had accepted  the correctness  of  the  High Court’s decision.      From the  aforesaid discussion,  it  follows  that  the policy decision  of the  Universities,  making  the  Pension Regulations applicable w.e.f. 1.1.1990 has not been shown to be arbitrary  or invalid.  These appeals  are,  accordingly, allowed and  the judgments  of the  High Court are set aside and  the   writ  petitions  filed  by  the  respondents  are dismissed. There shall be no order as to costs.