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CASE NO.: Appeal (civil)  2737 of 2002

PETITIONER: Union of India

RESPONDENT: A.S. Gangoli & Ors

DATE OF JUDGMENT: 26/04/2007

BENCH: Tarun Chatterjee & R V Raveendran

JUDGMENT: J U D G M E N T

R. V. RAVEENDRAN, J.

       This appeal by special leave is directed against the judgment dated  14.3.2001 passed by the Bombay High Court in W.P. No.2973 of 1989.  

2.      Respondents 1 to 10 were commissioned into Indian Air Force (IAF  for short) during 1963 to 1967. By the year 1987, they had put in more than  20 years of service and had reached the rank of either Group Captain or  Wing Commander.

3.      The Government of India, by Circulars dated 17.3.1986 and 19.2.1987  of the Defence Ministry, read with O.M. dated 6.3.1985 of Finance Ministry  permitted pro-rata pensionary benefits to officers of defence services on  their immediate absorption in Central Public Enterprises. As there was a  surplus of officers in the middle seniority level, IAF came up with schemes  from time to time enabling officers to take premature retirement voluntarily  and join public sector undertakings (’PSUs’ for short) and autonomous  bodies, without losing the pensionary benefit relating to the IAF service.  One such scheme notified on 1.4.1986 invited the officers in the age group  of 40 to 47 years to retire voluntarily and join M/s. Vayudoot Ltd.-  a public  sector undertaking. Several IAF officers including Respondents 1 to 10  applied for premature retirement from IAF under the said scheme in order to  join Vayudoot Ltd. By order dated 6.5.1987, the Air Headquarters accepted  the proposal for permanent absorption of respondents in Vayudoot Ltd. and  also conveyed the Government’s approval for premature retirement of the  respondents from the Indian Air Force in public interest with effect from  18.5.1987. The respondents accordingly left IAF and joined Vayudoot Ltd.  By order dated 13.7.1987, the Ministry of Defence sanctioned pensionary  benefits to respondents in terms of Ministry’s Circular dated 19.2.1987.   

4.      The Government of India issued a Circular dated 30.10.1987 in regard  to the implementation of the Government decisions on the recommendations  of the Fourth Central Pay Commission relating to pensionary benefits for  Armed Forces Officers/personnel retiring or dying in harness on or after  1.1.1986. The said circular modified the rules and regulations concerning  pensionary benefits of Commissioned Officers and personnel below officer  rank, to the extent indicated therein. Clause 5 of the said circular defined  "qualifying service" reckonable for pension and Death-cum-Retirement  gratuity as follows :  (i)     the actual qualifying service rendered by the officer plus a  specified weightage, for purposes of pension (the weightage being  9 years in the case of Pilot Officers and Flight Lieutenants, 8 years  for Squadron Leaders, 7 years for Wing Commanders and Group  Captains, 5 years for Air Commodores, and 3 years for Air Vice  Marshals and Air Marshals).

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(ii)    the actual qualifying service rendered by the officer plus a  weightage of 5 years for purposes of Death-cum-Retirement  Gratuity.      The grant of above weightage was subject to the condition that total  qualifying service including weightage shall not exceed 33 years. Notes (1)  and (3) to clause 5 of the circular dated 30.10.1987 relevant for our purpose  are extracted below: "(1) There will be no weightage for officers and personnel below officer  rank who retire prematurely for permanent absorption in PSUs and  autonomous bodies.

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(3) The above weightage shall not be reckoned for determining the  minimum qualifying service specified for admissibility of Retiring/service  Pension i.e. 20 years for service officers (15 years for late entrants), 15  years for personnel below officer rank and 20 years for NCs(E)."

        In view of Note (1) to clause 5, the pension and retirement gratuity of the  respondents were settled by treating the actual service rendered by them, as  the ’qualifying service’, without addition of any weightage.  

5.      The respondents were aggrieved by the non-addition of weightage to  their qualifying service, for purposes of pension and gratuity. According to  them, when the scheme was introduced, they were assured that there would  be no loss of pensionary benefits. They contended that Note (1) to clause 5  of the Circular dated 30.10.1987 which denied them the benefit of weightage  amounted to a ’denial’ of pensionary benefits and was also discriminatory.  They, therefore, filed W.P. No.2973 of 1989 in the Bombay High Court for  quashing Note (1) to clause 5 of the circular dated 30.10.1987 as being  violative of Article 14. They also sought a direction to the appellant to  extend them the weightage of seven years for computing their pension and  weightage of five years for computing their retirement gratuity, re-calculate  their pensionary benefits, and pay the arrears.   

6.      The writ petition was resisted by the appellant. It contended that the  respondents did not suffer any loss of pensionary benefits, as pension and  retirement gratuity were calculated with reference to the actual qualifying  service rendered by the respondents as per Rules. It was further contended  that the Government’s decision (in pursuance of the Fourth Pay Commission  recommendations) to provide weightage in calculating the qualifying service  to the retirees and exclusion of the class of retirees described in Note (1) to  Clause 5, from such benefit was a matter of policy, arrived at after taking  note of relevant factors. It was submitted that exclusion under Note (1) was  not discriminatory as those officers who retired prematurely for being  permanently absorbed in PSUs/autonomous bodies constituted a ’well- defined class’ who had been provided several benefits, distinct and different  from regular retirees. It was submitted that the classification was based on an  intelligible differentia, which had a rational nexus with the object sought to  be achieved.  

7.      The writ petition was allowed by judgment dated 14.3.2001. The High  Court declared Note (1) appended to clause 5 of the Government Circular  dated 30.10.1987 as illegal and inoperative and issued a consequential  direction to the appellant to grant a weightage of 7 years for computing  pension and weightage of 5 years for computing the retirement gratuity of  the respondents and pay them the difference. The decision of the High Court  was based on the following reasoning :   (i)     There was no rationale for carving out a separate category in  respect of the group of officers and personnel who retired prematurely for  being permanently absorbed in PSUs and autonomous bodies and denying  them weightage. The classification of retirees -- one class consisting of

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officers/personnel who were permitted to retire prematurely for personal  reasons, and another class consisting of officers/personnel who were  permitted to retire prematurely for joining PSUs/autonomous bodies - was  neither justifiable nor reasonable. The mere fact that different periods of  qualifying service were prescribed for the two sets of retirees, was not  sufficient to treat them differently.  

(ii)    When officers and personnel who sought premature retirement for  personal reasons, were treated as normal retirees and extended the benefit  of weightage, there was no reason why the officers and personnel whose  premature retirement was accepted in public interest (for immediately  joining PSUs), should be denied the benefit of weightage.  

The said judgment is challenged by Union of India. The appellant contends  that the High Court failed to take note of the relevant factors while  considering whether there was a reasonable classification and whether there  was hostile discrimination.  

8.      On the contentions urged, the question that arises for our  consideration is whether denial of benefit of weightage (for pensionary  benefits) to officers and personnel, who retired prematurely for permanent  absorption in PSUs/autonomous bodies, is violative of Article 14.    9.      According to the Respondents, the object of providing a weightage  (that is addition of a certain number of years to the qualifying service) for  purpose of pension and gratuity of defence personnel was to compensate  them for the comparatively younger superannuation age, and for the  hazardous and risky nature of defence service. It is stated that the Squadron  Leaders retire at the age of 48 years, Wing Commanders at the age of 50  years and Group Captains at the age of 52 years as against the normal  retirement age of 58/60 years. As the age of retirement increased as one rose  in hierarchy of defence service, the weightage correspondingly decreased.  As noticed above, the weightage for pension was 9 years for Pilot Officers, 7  years for Group Captains, 5 years for Air Commodores and 3 years for Air  Marshals. The respondents contend that having regard to the object  underlying service weightage, any classification, among retiring defence  personnel, with the intention of excluding a particular section of them from  the benefit of service weightage, was violative of Article 14.  

10.     The appellant does not seriously dispute that the weightage given  under clause 5 of the circular dated 30.10.1987 has some nexus with the  early age of retirement in the defence services. But the Appellant submits  that the very logic behind Respondents’ contention would defeat their claim.  It is pointed out that if the reason for grant of weightage is the early age of  retirement resulting in a lesser service period, then the benefit of weightage  should rightly be denied when   alternative civilian service is made available  thereby removing the disadvantage of shorter defence service. It is  contended that note (1) to clause 5 excludes the benefit of weightage only to  those who prematurely retire from defence service, for the immediate  purpose of permanent absorption in a PSU/autonomous body, where the age  of retirement is much higher. It is, therefore, contended that the  classification has a valid and direct nexus with the object sought to be  achieved.

11.     There is considerable force in the submission of the appellant.  Varying periods of weightage are added to the qualifying service of defence  service officers to compensate for, or offset the disadvantage of early age of  superannuation in defence service. The weightage of 7 years for a Group  Captain is because he normally retires from Air Force Service at a  comparatively early age of 52 years. If a Group Captain is permitted to  prematurely retire so that he can be permanently absorbed immediately in a  public sector undertaking where the retiring age is 58 or 60, the need to  provide weightage disappears. Further, special provisions were made for  such retirees under the circulars dated 17.3.1986 and 19.2.1987. They  directed that premature retirement, to take up employment under PSUs, with  the permission of the Government, will not entail forfeiture of service or

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retirement benefits. In such cases, the officer is deemed to have retired from  the date of premature retirement and eligible to receive the retirement  benefits, enumerated in those circulars. Therefore, the decision not to extend  the benefit of weightage to those who retired prematurely for immediate  permanent absorption in a PSU or autonomous body is a matter of policy of  the government supported by logical reasons. So long as such policy is not  manifestly arbitrary and does not violate any constitutional or statutory  provision, it is not open to challenge.  

12.     We will now refer to the several benefits that were available to those  who retired prematurely for joining public sector undertakings which were  not available to other retirees. We have listed them in the following  comparative table:  

Premature retirees for joining  PSUs/autonomous bodies Premature retirees for personal reasons  and persons retiring on attaining the age  of superannuation.

1.  The minimum qualifying service for  pension : 10 years (vide Circular dated  19.2.1987)

1.  The minimum qualifying service for  pension : 20 years (vide Regulation 25 of  Air Force Pension Regulations).  2. The retirees entitled to 100%  commutation of pension (vide the  Vayudoot scheme and circular dated  19.2.1987).

2.  The commutation permissible only in  respect of a portion of pension not  exceeding 43% (vide Air Force Instructions  4/S, para 13). 3. The retirees entitled to immediate  employment without any ’lock-in’ period.  (Vide Vayudoot scheme and order dated  6.5.1987). 3.  The retiree (of the rank of Group  Captain and above) could not accept  commercial employment for a period of 2  years from the date of retirement (unless  the retiree obtains the special permission of  the President) - vide Regulation 18 of Air  force Pension Regulations.

4. The retiree will have additional  service  till age of superannuation under PSU/  autonomous body.  4.   The retiree’s service comes to an end  with effect from the date of   retirement/premature retirement.                             

It is thus seen that the officers who took premature retirement for the  purpose of immediate employment in PSUs/autonomous bodies received  several specific benefits, including assured immediate re-employment and  extended service. The persons who retire in the usual course and those who  prematurely retire for personal reasons, were not entitled to those special  benefits. Therefore, the persons who retired prematurely for immediate  purpose of joining PSUs., clearly formed a distinct and separate class. In

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view of the special benefits extended to them, if note (1) to Regulation 5  excluded them from the benefit of weightage which was given to the other  retirees, it is not discrimination. The High Court completely overlooked  these aspects and its decision cannot therefore be sustained.

14.     The Respondents contended that they had no choice but to  prematurely retire, as they were ’directed’ to take premature retirement in  public interest and therefore, they have to be treated on par with other  retirees. This is factually incorrect. The Appellant did not direct the  Respondents to take premature retirement. It framed a scheme which  enabled certain categories of officers to take premature retirement  voluntarily, so that they can join Vayudoot Ltd., a public sector undertaking.  The scheme, as also the order dated 6.5.1987, clearly show that the  respondents applied for premature retirement voluntarily for the purpose of  joining Vayudoot and the Government granted approval for their premature  retirement in public interest so that they could be absorbed in Vayudoot.  This is not a case of compulsory retirement in public interest nor a case of  directing the employees to retire prematurely in public interest. The  expression "in public interest" is used in the order dated 30.5.1987 with  reference to the acceptance of the request for voluntary retirement. The  permission to take up commercial employment linked to the acceptance of  the request for premature retirement, unshackled the Respondents from the  rigours of the Air Force Pension Regulation No. 18 which is extracted  below:  "18. (a)  An officer who is granted any pension, gratuity or other benefit in  respect of his air force service or who is likely to receive any pension,  gratuity or other benefit under these Regulations shall obtain the  permission of the President before accepting an employment under a  Government outside India at any time after his air force service has  ceased. An officer of the rank of Group Captain or above whether held in  substantive capacity or otherwise, who is granted a pension, gratuity, or  other benefit in respect of his air force service or who is likely to receive  any pension, gratuity or other benefit under these Regulations, shall also  obtain such permission prior to acceptance of any commercial  employment before the expiry of two years from the date his air force  service ceases.  

(b)     An officer permitted by the President, before his air force service  ceases, to take up a particular employment under a Government outside  India, or commercial employment, shall not, however, be required to  obtain subsequent permission for his continuance in that employment.  

(c)     No service or disability pension or other recurring benefits shall be  payable to any officer who accepts an employment in contravention of the  provisions of this regulation, in respect of any period for which he is so  employment or for such a longer period as the President may direct.  Gratuity where due, but not already paid, shall also be liable to be  forfeited in part or in full as the President may, at his discretion, decide.  

It is, therefore, clear that but for the prior permission, the voluntary  premature retirement would have entailed the denial of pensionary benefit in  the manner and to the extent mentioned in clause (c) of Regulation 18.    

15.     Another contention urged by the respondents is that there was an  assurance by the appellant that there would be no loss of benefits in the  matter of pension and gratuity if they took premature retirement and that  assurance was breached by denying the benefit of weightage. But the  respondents have not been denied the benefit of pension or gratuity. Their  pension and retirement gratuity have been calculated with reference to their  actual qualifying service and they have been given those benefits. What has  been denied to them is not pension benefits, but the benefit of weightage  which was given to retirees under clause 5 of the Circular dated 30.10.1987.  The benefit of weightage is denied only to those who retired prematurely for  the immediate purpose of joining PSUs/autonomous bodies. We have

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already referred to the reasons for such denial. First, they will have the  benefit of joining immediately and continuing in service in a public sector  undertaking or autonomous body, without losing their pensionary benefits.  The other retirees including those retiring prematurely on personal grounds  did not have the benefit or such immediate assured alternative employment,  with pensionary benefits for the defence service intact. Secondly, they got  the benefit of 100% commutation and a lesser minimum period of qualifying  service which the other retirees did not get.

16.     It was next contended that certain retirees (Wing Commander H.M.  Majumdar and Others) who took premature retirement on personal grounds,  were subsequently permitted to take up commercial employment even before  the expiry of two years, and as a result, they got the benefit of service  weightage as also the benefits of a commercial employment. It is, therefore,  contended that there is no justification for denying the respondents the  benefit of weightage. But, it should be noted that the cases referred to are of  officers who took premature retirement on personal grounds and not for the  purpose of joining the service of any PSU. Consequently, note (1) to clause  5 of Circular dated 30.10.1987 did not apply to them and therefore, they  were given the benefit of service weightage. They were all of the rank of  Wing Commander and were not subject to the two years bar on commercial  employment imposed under Air Force Pension Regulation No. 18. The fact  that after retiring on personal grounds, they searched and secured  employment in some PSU/autonomous bodies is a fortuitous circumstance.  Many who retired on personal grounds, have not secured any employment  elsewhere, let alone with PSUs. Therefore, the cases of those who retired on  personal grounds (but subsequently secured employment), cannot be  compared with respondents who prematurely retired for the immediate  assured employment in a PSU/autonomous body.

17.     It was contended that one Lt. Col. B. R. Malhotra was permitted to  retire prematurely for the immediate purpose of being absorbed in a PSU  (Bharat Electronics Ltd - ’BEL’ for short); that he was also denied the benefit  of weightage, and approached the Delhi High Court in CWP No. 184 of  1997 and the High Court granted the benefit of weightage by its judgment  dated 12.11.1997 [reported in Lt. Col. B. R. Malhotra vs. Union of India - 71  (1998) Delhi Law Times 498]; that the appellant did not challenge the said  decision, but gave effect to it; and that having done so, the Appellant is  required to give such relief to Respondents also in view of the doctrine of  constructive res judicata. An identical contention claiming relief based on a  direction in the case of another retiree, was negatived by this Court  in Col.  B. J. Akkara (Retd.) vs. Government of India - 2006 (11) SCC 709,  following the earlier decision in State of Maharashtra vs. Digambar - 1995  (4) SCC 683. This Court held :  "A particular judgment of the High Court may not be challenged by the  State where the financial repercussions are negligible or where the appeal  is barred by limitation. It may also not be challenged due to negligence or  oversight of the dealing officers or on account of wrong legal advice, or on  account of the non-comprehension of the seriousness or magnitude of the  issue involved. However, when similar matters subsequently crop up and  the magnitude of the financial implications is realized, the State is not  prevented or barred from challenging the subsequent decisions or resisting  subsequent writ petitions, even though judgment in a case involving  similar issue was allowed to reach finality in the case of others. Of course,  the position would be viewed differently, if petitioners plead and prove  that the State had adopted a ’pick and choose’ method only to exclude  petitioners on account of malafides or ulterior motives."  

That apart, the facts of the case of Lt. Col. B. R. Malhotra were different. He  was working on deputation with BEL. He retired from the Army on  12.5.1985. He got absorbed in BEL and was given post facto sanction by the  President on 10.7.1985. Certain ’weightage element’ was sought to be  deducted from the standard rate of pension on the ground that he had been  permanently absorbed in a PSU. The High Court found that there was in fact  no weightage element in his case and there was also no rule or regulation

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applicable to him, which enabled Union of India to deduct any ’weightage  element’. The said decision is, therefore, of no relevance.   

18.     Respondents placed reliance on the decision of this Court in Union of  India v. Lt. Col. P.S. Bhargava [1997 (2) SCC 28] wherein while  considering Regulation 16 of Army Regulations (which is in pari materia  with Regulation 16 of the Air Force Pension Regulations), this Court held  that once an Army Officer has to his credit the minimum period of  qualifying service, he earns a right to get pension and such right can be taken  away only if his service is not satisfactory (vide Regulation 3) or where he is  cashired or dismissed or removed from service (under Regulation 16). This  Court further held that cases of voluntary resignations of officers, who have  to their credit the minimum period of qualifying service, did not fall under  the categories who can be denied pension and, therefore, such officers, who  voluntarily resign, cannot automatically be deprived of their terminal  benefits. The said decision deals with the right to pension and is of no  assistance to the respondents, as we are not concerned with any denial of  pension or pensionary benefits. The case on hand relates to denial of service  weightage to a specific class of retirees. So long as the exclusion is for  reasons which are valid and reasonable and there is no discrimination,  the  respondents can have no grievance.

19.     We, therefore, allow this appeal, set aside the order of the High Court  and consequently, the writ petition of the respondents stands dismissed.