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PETITIONER: DES RAJ BHATNAGAR AND ANR. ETC.

       Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT13/02/1991

BENCH: KASLIWAL, N.M. (J) BENCH: KASLIWAL, N.M. (J) RAMASWAMY, K.

CITATION:  1991 SCR  (1) 356        1991 SCC  (2) 266  JT 1991 (1)   443        1991 SCALE  (1)208

ACT:      Constitution  of  India: Articles 14  and  16.  Central Government  employees  absorbed  in  Central  Public  Sector Undertakings-Entitlement   of  pensionary   benefits-Central Civil Service (Pension) Rules, 1972: 0. MS. dated  13.2.1976 and 22.10.1983-Validity of.      Service  Law: Central   Civil Service (Pension)  Rules, 1972:  Liberalised  Pension  Formula,  1979:  0.  Ms.  dated 13.2.1976  and  22.10.1983-Central  Government   pensioners- Relief  and  adhoc  relief  on  pension-Central   Government employees     absorbed     in    Central   Public     Sector Undertakings-Retiring  from  Central  Government  service  - Commuted    original   pension-Whether   eligible   to    be treated  as  Central Government pensioners.      Central   Civil   Service  (Pension)    Rules,    1972: Commutation  of pension-Effect of.

HEADNOTE:      The   petitioners,   who   were   Central    Government employees,  on  their absorption in a Central Public  Sector Undertaking,   retired  from Central Government  service  on different dates  prior  to  31.3.1979,  and  commuted  their original  pension for a  lump  sum  as   permissible   under the Civil Service (Pension) Rules, 1972.      The  Central  Government issued O.M.  dated  13.2.1976, enabling an officer who commuted a portion of his pension to be eligible for relief and ad hoc reliefs on the full amount of  his original pension, but persons who   got   themselves absorbed    in   Public   Sector   Undertakings   were   not eligible to the said benefits. Taking note,of the erosion in the  value  of the rupee, the Government,  by   O.M.   dated 25.5.1979,  introduced  the  Liberalised  Pension   Formula, benefit   of   which,   by  this Court’s  decision  in  D.S. Nakara’s   case  was  extended  to  all  Central  Government pensioners  irrespective of the dates of their   retirement. In   order   to   implement   the   said    decision,    the Government   issued  O.M. dated 22.10.1983, but the  benefit was not given to those persons who got them-selves  absorbed in     Central     Public    Sector     Undertakings     and received/opted  to  receive  commuted  raise  of  1/3rd   of pension  as  well  as                                                        357

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terminal benefits equal to the commuted value of the balance amount of pension left after such commutation.      The   petitioners  challenged  the  validity  of    the aforesaid    O.Ms.  dated  13.2.1976  and   22.10.1983   and contended  that  for  the  purposes  of grant  of  the  full benefit  of relief or ad hoc relief, the Rules do  not  make any   distinction  between  an  officer  who   has    sought commutation   of  a portion of his original pension and  one who  has  not sought  any  such commutation;  and   as   the petitioners  who  opted  for  commutation  of their original pension in accordance with the Rules were being  arbitrarily and  without  just  and reasonable  cause  deprived  of  the relief,  the aforesaid Office Memoranda  were  vitiated   by an  inherent  discrimination and were violative of  Articles 14 and 16 of the Constitution.      The facts of the appeal were identical to those of  the petitions  except that the appellant came before this  Court in  appeal  against  the  order  of  the  High  Court  which dismissed his writ petition.      On  the  question: whether  the  petitioners/appellants fell  in  the category of Central Government pensioners  for the   purpose   of   entitlement  to  the  benefit  of   the Liberalised Pension Formula or did they fall in a  different class  altogether  and  were not entitled to  get  any  such benefit,      Dismissing  the  writ petitions and  the  appeal,  this Court,      HELD:  1.  Clause 5 of O.M. dated 22.10-1983  is  clear that    such  Central   Government   employees    who    got themselves    absorbed    under   Central   Public    Sector Undertakings   prior  to  1.4.1979  and  opted   to  receive commuted  raise  for 1/3rd of pension as  well  as  terminal benefit equal to the commuted value of the balance amount of pension  were not entitled to any benefit as they  were  not Central Government  Pensioners as on 1.4-1979. [362B-C]      2.Commutation  brings  about  certain  advantages.  The person  who  commutes  his pension gets a  lump  sum   which ordinarily   he   would have received in the course  of  his spread over period subject to his continuing to live The two advantages   of  the  commutation are the-availability of  a lump  sum  and  the risk factor.  The  allowance  of  Family Pension  to such person does not however make them  entitled to  get  any  benefit that is given  to  the  pensioners  on account  of  Liberalised  Pension Rules taking note  of  the fallen value of the rupee. [362F-G, 363A-B]      3.1  In the instant case, the petitioners had not  only got 1/3rd of                                                        358 their  pension commuted but exercised the option of  getting the  entire pension commuted and in lieu thereof got a  lump sum.  Such  persons cannot fall in the category  of  Central Government pensioners for the purposes of getting benefit of the   Liberalised   Pension   Rules  which   can   be   made applicable  only to Central Government pensioners.  [362G-H, 363A]      3.2   The  petitioners  fell  in  a   different   class altogether  and  were  not entitled  to  claim  any  benefit granted to the Central Government Pensioners. After  getting a  lump sum in lieu of entire pension, they did not fall  in the  class  of Central Government pensioners  and  were  not entitled to any benefit granted to such pensioners. The case of  the  Central Government pensioners who got  their  1/3rd pension commuted also fail in a different class inasmuch  as they  got  2/3rd  pension,  and  after  15  years  of   such commutation or having attained the age of 70 years whichever

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was later, they became entitled to full pension. [363C-D]      "Common Cause" a Registered Society & Ors. v. Union  of India, [1987] 1 SCC 142, distinguished.      D.S. Nakara & Ors. v. Union of India, [1983] 2 SCR 165, referred to.

JUDGMENT: ORIGINAL  JURISDICTION: Writ Petition Nos.11757 &  11758  of 1984.      (Under Article 32 of the Constitution of India).                             WITH      Civil Appeal No. 1124 of 1985.      P.P. Rao, K. Jagan Mohan Rao and Raju Ramachandran  for the Petitioners.      V.C. Mahajan, Ms. A Subhashini and R.B. Mishra for  the Respondent.      The Judgment of the Court was delivered by      KASLIWAL,  J. The above writ petitions and  appeal  are disposed of by one single order as identical question of law are  involved  in these cases. In order  to  appreciate  the controversy   we  would  narrate  the  facts  of  the   writ petitions. Shri Des Raj Bhatnagar, Petitioner DES No. 1  and Shri Ved Pal Seth, Petitioner No.2 were employees of the                                                        359 Central  Government. The petitioner No. 1 after  serving  in various capacities in the Department of food of the  Central Government  from  24.10.1941 to 31.8.1971 (29 years  and  10 months)   was  permanently absorbed in Food  Corporation  of India  as Assistant on 1st September, 1971 and retired  from the Government service.      The  petitioner No. 2 after serving the  Government  in various capacities for the period from 5.11.1947 to 8.2.1972 (20 years and 3 months) was permanently absorbed on 9.2.1972 in  Food   Corporation of India as Sr.  Asstt.  Manager  and retired from the Government service.      On  absorption  in the Food Corporation of  India,  the petitioners   were  required  to  exercise  either  of   the following two options:      (a)  Receiving   the  pro-rata  monthly   pension   and death-cum-retirement gratuity as admissible under the rules; and      (b)  Receiving  the pro-rata  gratuity  and  a  lumpsum amount   in  lieu of pension worked out  with  reference  to commutation  table  obtaining  on the date  from  which  the pension was to be admissible and under the option order.      The office of the Pay and Accounts Officer, Ministry of Food and Agriculture determined the original pension payable to   the  petitioners  per  mensem.  The  petitioners   were sanctioned   original   pensions   in  accordance  with  the provisions  of  the Central Civil Service  (Pension)  Rules, 1972.  In case of petitioner No. 1 the original pension  was determined at Rs. 240 per mensem payable from 1st September, 1971.In  case  of  petitioner No. 2  the  original   pension admissible  was determined at Rs.287 per mensem payable from 9.2.1972.      The petitioner No. I received his pension @ Rs.240  per mensem   for  the  period  from  1.9.1971   to   29.10.1972. Petitioner  No. 2 received his pension @ Rs.287  per  mensem for  the period from 9.2.1972 to 16.8.1972. Under the  above Rules  maximum  of  one third of the  amount  of  admissible pension   could  be  commuted.  However,  in  the  case   of Government  officers  including Industrial  Management  Pool Officers who were opting for permanent absorption in  Public

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Sector Undertakings, an option was given to commute the full amount  of their original pension. The petitioner No. I  and petitioner  No.  2 commuted their original  pensions  for  a lumpsum  of  Rs.35,568  and  Rs.43,601  on  30.10.1972   and 17.8.1972 respectively.                                                        360      The  Third Central Pay Commission was required to  make its  recommendations  in the matter of providing  relief  to Government  pensioners.  The  Pay Commission,  in  order  to secure Government pensioners against the continuing  erosion in  the  value of the rupees and  to  recommend  appropriate measures  for protecting the pension of Government  servants from such erosion on account of the possible increase in the case  of  living in future and after having  considered  the matter,  recommended  that  irrespective of  the  amount  of pension drawn by them, pensioners should be given relief  at the rate of 5% of their pension subject to a minimum of Rs.5 per mensem and a maximum of Rs.25 per mensem. The relief  at those  rates were recommended to be given to the  Government pensioners  as and when there was a 16 point rise in the  12 months average of the All India Working Class Consumer Price Index ( 1960- 100). The relief for the first time, at  these rates  was to be paid when the 12th monthly average of  this index  reached 216. The said recommendation made by the  Pay Commission was duly accepted by the Central Government.      The Ministry of Finance Office Memorandum No. F. 22(8)- EV(A)/75 dated 13.2.1976 inter alia, provided that where  an officer on his retirement commutes a portion of his  pension he  is eligible for relief and ad hoc reliefs in pension  on the  full amount of original pension as admissible  to  him. Under  the  said O.M. the term ’Pension’  includes  for  the purposes  of ad hoc relief the commuted portion of  pension, if  any.  The case of the petitioners is that  according  to these  Rules, an officer who has commuted any part  of  this pension and an officer who has not opted for any commutation both receive the full quantum of relief and ad hoc relief on full amount of original pension. It has thus been  contended that for the purposes of grant of the full benefit of relief or  ad  hoc  relief the Rules do not  make  any  distinction between  an  officer  who  has  sought  commutation  of  his original  pension  and  one  who has  not  sought  any  such commutation.  The petitioner and other  Government  servants who  opted  for  commutation of their  original  pension  in accordance with the Rules are being arbitrarily and  without just and reasonable cause are deprived of the relief and  ad hoc  relief  on  commutation  in  pursuance  of  the  Office Memorandum  dated 13.2.1976. Though, an officer who commutes one  third of his pension gets relief and ad hoc  relief  on the  basis of original amount of his pension but whereas  an officer  commutes whole of his original pension is  deprived of  the  entire amount of the relief or ad hoc  relief.  The petitioners  have  thus contended  that   aforesaid   Office Memorandum  dated  13.2.1976  is  vitiated  by  an  inherent discrimination and is violative of Articles 14 and 16 of the Constitution.                                                        361      The  petitioners have further submitted that  they  are entitled  to  the  aforesaid reliefs granted  to  all  other Government  pensioners,  and the amount of relief  to  which pensioners are entitled and has been denied  to  them  under the   impugned  Office  Memorandum  dated 13.2.  1976  works out to Rs. 13,592 and Rs. 15,040 in case of petitioner No. 1 and  petitioner  No.  2  respectively  upto  29.2.1984.  The Ministry   of  Finance  in  their  Office  Memorandum    No. 2(8)/EV/82   dated  10.10.1983 has sanctioned the  grant  of

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relief and ad hoc reliefs to Government servants who retired prior  to  10th September,  1979 @ 92.5% of  their  original pension  subject to minimum of Rs.93  and maximum of  Rs.463 with  effect  from  1st July, 1983. This has  been  done  by taking  in view the decline in the purchasing power  of  the rupee  and  the  original sanction  being  insufficient  and meagre  to sustain the pensioners.      Apart  from  the above the petitioners  have  submitted that  they are also entitled to the benefit  of  Liberalised Pension  Formula  of  1979,which  was  introduced  vide  the Finance  Ministry’s  Office  Memorandum No. F.  19(37)/EV/79 dated  25.5-1979,  in respect of  the  approved  pensionable service  rendered  by  them in  the  Central  Government  as admissible  to other pensioners who retired from  Government service   between  17.4.1950  to   31.3.1979.    The    said Memorandum   was  made applicable only to those   Government servants  who  retired  from service on or after  31.3.1979. However,  this  Court in D.S. Nakara & Others  v.  Union  of India,  [1983]  2 SCR 165 held that all  Central  Government pensioners   governed   by   the   Central   Civil   Service (Pension)  Rules,  1972  were  entitled  to  pension  w.e.f. 1.4.1979  as computed under the Liberalised Pension  Formula irrespective  of  the  date  of  their  retirement.  Placing reliance  on  the above decision it has  been  claimed  that there should be no discrimination between the  applicability of   the  Liberalised  Pension  Formula  to  pre   31.3.1979 pensioners  and  there is no just and  reasonable  cause  in denying  such benefit to the petitioners under the  impugned Office Memorandum No. F. 1(3)/EV/83 dated 22.10.1983.    Clause 5 of the Office Memorandum dated 22.10.1983  reads as under:           "Central    Government    employees,    who    got           themselves  absorbed under Central  Public  sector           undertaking/autonomous  bodies prior  to  1.4.1979           and  have  received/or opted to  receive  commuted           raise  for  1/3rd of pension as well  as  terminal           benefit equal to the  commuted  value  of  the                                                        362           balance  amount  of pension left  after  commuting           1/3rd, of pension, are not entitled to any benefit           under  these  orders  as  they  were  not  Central           Government pensioners as on 1.4.79. In cases where           only  a portion of pension has been  commuted  the           pension  will  have to be enhanced  in  accordance           with these orders with effect from 1.4.1979". The   above  clause  makes  it  clear  that   such   Central Government  employees,  who got themselves  absorbed   under Central   Public  Sector Undertakings prior to 1.4.1979  and opted  to  receive  commuted  raise for 1/3rd of pension  as well as terminal benefit equal to the commuted value of  the balance  amount  of pension left after  commuting  1/3rd  of pension  were not entitled to any benefit as they were   not Central  Government pensioners as on 1.4.1979. An  identical writ   petition   No.  1068/1987  under  Art.  32   of   the constitution was filed on behalf of the Welfare  Association of   absorbed   Central  Government   Employees   in  Public Enterprises and this Court dismissed the said writ  petition on  April  12, 1990. In the said writ  petition  benefit  of Judgment  of  this  Court in  "Common  Cause"  a  Registered Society &  Ors.  v.  Union  of India, [ 1987] 1 SCC 142  was claimed  but the same was negatived by making a  distinction that  the Writ Petition "Common  Cause"  was  on  behalf  of the Government servants  who  had  commuted  their   pension partially  and this Court for the reasons indicated  in  the judgment  came to hold that on the expiry of 15  years  from

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the  date  of commutation the entire  pension  revived.  The petitioners were persons who had, at the time of  retirement from  Government service and entering  into   public  sector had  taken  the advantage of commuting the  entire  pension. They certainly belong to a class different from those  whose case  was  before this Court at the instance of  the  common cause in Writ Petition Nos. 1955-61 of 1983. It was  further held  in  the  above case that the  commutation  does  bring certain  advantages  to  the committees  and  the  class  of Government  officers   whom   the   petitioner   seeks    to represent  have derived such benefits.’      We  find  no  reason to take a  different   view.   The commutation   brings   about   certain    advantages.    The commuting    pensioner    gets  a  lumpsum   amount    which ordinarily  he  would  have  received  in  the course of his spread over period subject to his continuing to live.  Thus, two   advantages   are   certainly   forthcoming   out    of commutation-(1)  availability of a lumpsum amount,  and  (2) the  risk factor.  In  the present case the petitioners  had not  only got 1/3rd of their pension commuted but  exercised the  option  of getting the entire pension commuted  and  in lieu thereof got a lumpsum. Such persons cannot fall  in                                                        363 the  category  of  Central Government  pensioners   for  the purposes   of getting benefit of Liberalised  Pension  Rules which  can  be made applicable only  to  Central  Government Pensioners. It is no  doubt  correct that the family pension has been allowed in case of the persons like the petitioners but  that  does not make them entitled to  get  any  benefit given  to  the  pensioners on  account  of  the  liberalised Pension  Rules taking note of the fallen value of the rupee.      It   was  contended  by  Mr.  Rao  on  behalf  of   the petitioners  that  the  petitioners  are  not  claiming  any pension but their contention is that the Liberalised Pension Rules  which given benefit to those pensioners who  had  got their 1/3rd  pension  commuted  should  be  granted  to  the petitioners  by  awarding lumpsum after   increasing   their pension   and calculating such amount in proportion  to  the increased  pension.  We find no force in this contention  as the petitioners fall in a different class altogether and are not  entitled  to  claim  any  benefit  granted  to  Central Government  pensioners. After getting a  lumpsum   in   lieu of  entire pension, they do not fall in the class of Central Government  pensioners and are not entitled to  any  benefit granted  to  Central Government pensioners.  The   case   of such   Central  Government  pensioners who got  their  1/3rd pension  commuted also fall in a different class in as  much as  they  get  2/3rd pension, and after  15  years  of  such commutation or having attained the age of 70 years whichever was later they become entitled to full pension.  Petitioners on  the  other hand were not entitled to any  pension  after having received the lumpsum amount  in lieu of pension being commuted and having opted to receive such amount in  lumpsum at  the  time  of entering the  service  in  Public,  Sector Undertaking.      In the above mentioned civil appeal the legal  question is identical except that the appellant in this case became a pensioner of the Central Government w.e.f. 1.4.1977 and  the pension  determined  as  payable to him was Rs.609 per month and the same was got commuted by the appellant for a lumpsum amount on and from 7.8.1978. The appellant had exercised the option  for absorption in Steel Authority of  India  Limited (SAIL)  a Public Sector Enterprise. The Writ Petition  filed by  him  before  the High Court of Delhi  was  dismissed  on 25.8.1982.  The  appellant then filed a S.L.P.  against  the

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said  order.  This  Court  had  granted  special  leave   on 25.3.1985  and  had  given a direction to  hear  the  appeal alongwith the writ petition Nos. 11757 & 11758 of 1984.      In  the result we find no force in all these cases  and the same are dismissed with no order as to costs. R.P.                                  Petitions  and  Appeal                                              dismissed.                                                        364