REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   6573         OF 2008 [Arising out of SLP (Civil) No. 4739 of 2007]

Chandrashekar A.K. …Appellant

Versus

State of Kerala & Anr. …Respondents

J U D G M E N T  

S.B. SINHA, J :

1. Leave granted.

2. Whether a person who has resigned from service is  entitled  to the

benefit of revision of scale of pay with retrospective effect is the question

involved  in  this  appeal  which  arises  out  of  a  judgment  and  order  dated

11.01.2006 passed by the Division Bench of the Kerala High Court in Writ

Appeal No. 2004 of 2005.

3. Appellant  herein  was  employed  as  Director  (Finance)  in  the

respondent No. 2 company which is an undertaking of respondent No. 1.

He was a full time employee.  He resigned from services on 23.05.1995.  

4. The Government of India subsequently issued an office memorandum

(OM) dated 19.07.1995 whereby and whereunder the scales of pay for the

top  posts,  i.e.,  ‘executives  holding  board  level  posts’  were  revised  with

effect from 1.01.1992.  We are concerned herein with Schedule ‘C’ posts in

respect whereof existing scale of pay of Rs. 7500-200-8500 was revised to

Rs. 10000-400-12000.

Para 8 of the said OM dated 19.07.1995, which is material  for our

purpose, reads as under:

“8. The administrative Ministries are requested to fix the pay of the incumbents of the Board level posts who were in employment in their enterprises as on  1.1.92  in  the  manner  indicated  above  and forward  their  files  to  the  DPE  for  vetting  as required under the existing instructions contained in  BPE’s DO letter  No. 1/1/89-BPE (S&A) Cell dated 14.2.89 and DOPT’s OM No. 27(14)/C0/89 (ACC)  dated  6.12.89,  and  as  per  procedure indicated in Annexure –IV.”

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5. On or  about  1.01.1996, appellant  made a representation  requesting

payment of arrears of pay revision inter alia on the ground that he, having

been in service on 1.01.1992, was entitled to the benefit  of the said OM

dated 19.07.1995.  The said prayer was rejected by respondent by an order

dated 31.01.1996, stating:

“This  has  reference  to  your  letter  dated  1.1.96 requesting  for  making  the  pay  revision  w.e.f. 1.1.92  applicable  to  you  while  you  were  in  the service  of  the  Corporation.   Please note  that  the Office Memorandum dated 19.7.95 issued by the Secretary  to  Government  of  India  directing  the revision of scales of pay of Scheduled posts w.e.f. 1.1.92  specifically  contains  a  clause  that  all  the Administrative  Ministries/  Departments  are required  to  issue  presidential  directives  to  the concerned  Public  Sector  Enterprises  under  its administrative  control  to  give  effect  to  the  said revision.   Please  note  that  the  Industries Department  of  the  BPE  of  Kerala  State Government has not issued any specific directive to  the  Public  Sector  Undertakings  in  Kerala  for making the above revision effective.   Hence, we are unable to consider your request.”

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6. Appellant  made another representation before  respondent  No. 1 on

14.02.1996 which has been turned down by the Government of Kerala by a

letter dated 30.07.1996, stating:

“I am to invite your attention to the letter cited and to inform that the State Government have not yet adopted  the  revised  Central  BPE  schedules  in respect of SLPES.  As such, Government regrets their inability to concede to your request.”

7. Appellant  filed  a  writ  petition  upon  serving  a  legal  notice  on  the

respondents.   

By reason of a judgment and order dated 23.03.2005, a learned Single

Judge of the said High Court dismissed the said writ petition stating that as

appellant  was  not  in  service  when  the  said  OM  dated  19.07.1995  was

issued, he was not entitled to any relief.   

An Intra-court appeal preferred thereagainst has been dismissed by a

Division  Bench  of  the  said  Court  by reason  of  the  impugned  judgment,

directing:

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“2. There  was  no  response,  and  the  original petition had come to be filed.  The matter had been looked into by the learned Judge and he found no reasons to encourage the application as according to him, it  suffers  from laches  and it  is  not  as  if settled rights automatically are there in favour of the appellant.  We find no error in the reasoning so as to interfere with the findings as above.”

8. Mr.  K.  Vishwanathan,  learned  counsel  appearing  on  behalf  of  the

appellant,  submitted  that  the  High  Court  committed  a  serious  error  in

passing the impugned judgment insofar as it failed to take into consideration

that in view of the language used in the OM dated 19.07.1995, the revised

scale of pay stood incorporated with effect from 1.01.1992 and as appellant

was in service on that day, there was no reason as to why the benefit of the

revised scale of pay should be denied to him.  In any event, the OM dated

19.07.1995  does  not  contain  any  clause  in  terms  whereof  the  claim  of

appellant stands excluded.

9. Mr. A. Raghunath, learned counsel appearing on behalf of respondent

No.  2  and  Mr.  G.  Prakash,  learned  counsel  appearing  on  behalf  of

respondent No. 1, on the other hand, urged that as the State had adopted the

aforementioned OM dated 19.07.1995 only with effect from 1.04.1997, the

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said OM is not applicable in the case of appellant.  In any event, appellant

having resigned from the service, was not entitled to the benefit thereof.

10. Appellant was not in a pensionable service.  He resigned voluntarily.

The reason for tendering resignation by him is not known.   

11. Whether appellant after submitting his resignation had been working

in the better scale of pay is also not known.   

12. Ordinarily, a person retiring from service on pensionable post would

obtain the benefit of the revision in the scale of pay.  This was so held in

U.P. Raghavendra Acharya and Ors. v. State of Karnataka and Ors. [(2006)

9 SCC 630] wherein this Court opined:

“19.  The  fact  that  the  appellants  herein  were treated  to  be  at  par  with  the  holders  of  similar posts  in  Government  Colleges  is  neither  denied nor  disputed.  The  appellants  indisputably  are governed  by  the  UGC  scales  of  pay.  They  are entitled to the pensionary benefits also. They had been given the benefits of the revision of scales of pay  by  10th  Pay  Revision  Committee  w.e.f. 1.1.1986. The pensionary benefits payable to them on  attaining  the  age  of  superannuation  or  death were also stated to be at par with the employees of the State Government. The State of Karnataka, as

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noticed  hereinbefore,  for  all  intent  and  purport, has treated the teachers of the Government Aided Colleges  and  the  Regional  Engineering  Colleges on the one hand and the teachers of the colleges run by the  State  itself  on  the other  hand at  par. Even the financial rules were made applicable to them in  terms  of  the  notifications,  applying  the rule of incorporation by reference. Although Rule 296 of the Rules per se may not be applicable so far as the appellants are concerned, it now stands admitted  that  the  provisions  thereof  have  been applied to the case of the appellants also for the purpose of computation of pensionary benefits…”

The  services  of  the  appellant  being  not  a  pensionable  one,  in  our

opinion, U.P. Raghavendra Acharya (supra) has no application to the fact of

the present case.  In that case, the amount of pension was to be calculated.

On what basis,  the same was required to be done was  considered in the

following terms:

“22.  The  State  while  implementing  the  new scheme  for  payment  of  grant  of  pensionary benefits to its employees, may deny the same to a class of retired employees who were governed by a  different  set  of  rules.  The  extension  of  the benefits can also be denied to a class of employees if the same is permissible in law. The case of the appellants,  however,  stands  absolutely  on  a

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different  footing.  They  had  been  enjoying  the benefit  of  the  revised  scales  of  pay. Recommendations have been made by the Central Government  as  also  the  University  Grant Commission  to  the State  of  Karnataka  to  extend the  benefits  of  the  Pay  Revision  Committee  in their  favour.  The  pay  in  their  case  had  been revised in 1986 whereas the pay of the employees of the State of Karnataka was revised in 1993. The benefits  of  the  recommendations  of  the  Pay Revision  Committee  w.e.f.  1.1.1996,  thus  could not have been denied to the appellants. 23.  The stand of the  State  of Karnataka that  the pensionary  benefits  had  been  conferred  on  the appellants w.e.f. 1.4.1998 on the premise that the benefit of the revision of scales of pay to its own employees had been conferred from 1.1.1998,  in our  opinion,  is  wholly  misconceived.  Firstly, because the employees of the State of Karnataka and the appellants, in the matter of grant of benefit of revised scales of pay, do not stand on the same footing  as  revised  scales  of  pay  had  been  made applicable  to  their  cases  from  a  different  date. Secondly,  the  appellants  had  been  given  the benefit of the revised scales of pay w.e.f. 1.1.1996. It  is  now well  settled  that  a  notification  can  be issued by the State accepting the recommendations of the Pay Revision Committee with retrospective effect as it was beneficent to the employees. Once such  a  retrospective  effect  is  given  to  the recommendations of the Pay Revision Committee, the concerned employees despite their reaching the age  of  superannuation  in  between  the  said  dates and/or  the  date  of  issuance  of  the  notification would be deemed to be getting the said scales of pay as on 1.1.1996. By reason of such notification as  the  appellants  had  been  derived  of  a  vested right, they could not have been deprived therefrom and that too by reason of executive instructions.”

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13. In the instant case, there is nothing on record to show that the said

Office  Memorandum  was  brought  into  force.   It  may  be  true  that  the

contention of the State that the notification has been given effect to on and

from 1.04.1997 was not the premise on which the High Court dismissed the

writ petition, but, there cannot be any doubt whatsoever that the notification

revising the scale of pay must be brought into force.  Unless the notification

is given effect to, the question of deriving any legal benefit in terms thereof

by a former employee of respondent No. 2 did not and could not arise.   

14. We have noticed hereinbefore that both the Central Government as

also the  State  of  Kerala  categorically stated that  the notification  had not

come into force on the dates on which the representations of the appellant

dated  1.01.1996 and 14.02.1996 were  rejected  by them in  terms of  their

letters dated 31.01.1996 and 30.07.1996, respectively.  In this view of the

matter, it is difficult to agree with the contention of the learned counsel for

appellant that the benefit of recommendation of his pay revision committed

stood implemented on the day on which appellant resigned.

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15. This aspect of the matter has also been considered in  State of Tamil

Nadu v. Seshachalam [2007 (11) SCALE 239], stating:

“10. It is one thing to say that the State had come up with a policy decision which is beneficial to all the  employees  irrespective  of  the  fact  as  to whether  they  had  reached  the  age  of superannuation or not, the only criteria being that they were recruited to the Tamil Nadu Secretariat Service  on  or  before  28.1.1994  but  it  is  another thing to say that  the claim petitions  filed by the responders  were  based  on  the  success  of  their colleagues  before  the Administrative  Tribunal  in the  year  1994.  The  employees  working  in  the Finance  Department  had  been  promoted  long back. We have noticed hereinbefore that some of them retired as Additional Secretaries whereas the respondents  retired  as  merely  Assistants. Presumably,  promotions  to  the  employees  of  the Finance  Department  were  given  systematically over a long period of time but no such grievance was made nor any application was filed before the appropriate forum. Such grievance, in our opinion, should  have  been  raised  or  proper  application before  the  Tribunal  should  have  been  filed  long long back. It was in the aforementioned situation, the  Tribunal  was  of  the  opinion  that  their applications were barred by limitation. Assuming that the cause of action for filing such applications arose  in  view  of  the  observations  made  by  the Tribunal  in  its  order  dated  16.4.1993  passed  in Original Application No. 166 of 1990, but then in terms of  the Act  and the Rules,  the  respondents were required to file a proper application within a period of one year only. It is borne out from the records  that,  in  fact,  62  such  applications  were

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already  pending  when  GOMs  No.  126  was issued.”

Therein  U.P.  Raghavendra  Acharya (supra)  was  distinguished,

stating:

“20.  Reference  has  also  been  made  by  Mr. Venkataramani to a decision of this Court in U.P. Raghavendra  Acharya  and  Ors.  v.  State  of Karnataka and Ors. 2006 (6) SCALE 23 wherein it was held that pension is not a bounty and it is a deferred salary. This Court is not concerned herein with  such  a  situation.  In  the  said  decision,  this Court  was  concerned  with  a  case  where  an employee  retiring  on  a  particular  date  was  to receive  50%  of  the  pension  on  the  enhanced salary. In the fact situation obtaining therein that as the revision of pay and consequent revision in pension had come into force and by reason of a notification,  the  modality  of  computing  the pension was required to be determined, those who had fulfilled the conditions laid down therein were held  to  be  entitled  to  the  benefits  provided  for thereunder holding that the concerned employees had a vested right therein.”

16. The question as to whether the scale of pay would be revised or not is

a matter of policy decision for the State.  No legal right exists in a person to

get a revised scale of pay implemented.  It may be recommended by a body

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but ultimately it has to be accepted by the employer or by the State, who has

to bear the financial burden.   

17. This aspect of the matter has been considered by this Court in  HEC

Voluntary  Retd.  Employees  Welfare  Society  and  Another v.  Heavy

Engineering Corpn. Ltd. and Others [(2006) 3 SCC 708] stating:

“19.  It  is  not  in  dispute  that  the  effect  of  such voluntary retirement scheme is  cessation of jural relationship  between  the  employer  and  the employee.  Once  an  employee  opts  to  retire voluntarily, in terms of the contract he cannot raise a claim for a higher salary unless by reason of a statute  he becomes entitled thereto. He may also become entitled  thereto  even  if  a  policy  in  that behalf is formulated by the Company.”

[See also  Life Insurance Corporation of India and Others v.  Retired LIC

Officers Association and Others (2008) 3 SCC 321]

18. We may furthermore notice  that  a  distinction  has  been  made by a

Division  Bench  of  this  Court  between  the  terms  “retirement”  and

“resignation” in UCO Bank and Others v. Sanwar Mal [(2004) 4 SCC 412].

stating:

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“9.  We  find  merit  in  these  appeals.  The  words "resignation"  and  "retirement"  carry  different meanings in common parlance. An employee can resign at any point of time, even on the second day of his appointment but in the case of retirement he retires  only  after  attaining  the  age  of superannuation  or  in  the  case  of  voluntary retirement  on  completion  of  qualifying  service. The  effect  of  resignation  and  retirement  to  the extent that there is severance of employment but in service  jurisprudence  both  the  expressions  are understood differently. Under the Regulations, the expressions  "resignation"  and  "retirement"  have been  employed  for  different  purpose  and  carry different meanings...”

19. Mr.  Vishwanathan  is  correct  in  his  submission  that  the  Division

Bench  committed  a  serious  illegality  insofar  as  it  held  that  the  learned

Single  Judge has dismissed the writ  petition on the ground of  delay and

laches.  It did not do so. as it was not so, but having considered the merit of

the matter in its entirety, we are of the opinion that no case has been made

out for interference with the impugned judgment.   

The appeal is dismissed accordingly.  In the facts and circumstances

of the case, however, there shall be no order as to costs.

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………………………….J. [S.B. Sinha]

..…………………………J.     [Cyriac Joseph]

New Delhi; November 07, 2008   

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