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CASE NO.: Appeal (civil)  2845 of 2005

PETITIONER: Hari Chand and Others

RESPONDENT: Faridabad Complex Administration & Others

DATE OF JUDGMENT: 26/04/2005

BENCH: Ruma Pal & C.K. Thakker

JUDGMENT: J U D G M E N T

(Arising out of S.L.P. (c) No. 6360 of 2002)

WITH           

CIVIL APPEAL No. 2846 OF 2005  (Arising out of SLP (c) No. 6352 of 2002)

Jai Kishan and Others                           \005..    Appellants

                               Versus

Faridabad Complex Administration  & Others                                                \005.    Respondents WITH  

CIVIL APPEAL Nos. 2847-2850 OF 2005  (Arising out of SLP (c) Nos. 9820 to 9823 of 2002)

Pt. Udai Bhan and Others                                \005..    Appellants

                               Versus

Faridabad Municipal Corporation & Others                                                        \005.  Respondents

C.K. Thakker, J.

       Leave granted.

       The present appeals arise out of orders passed by the Division  Bench of the High Court of Punjab & Haryana at Chandigarh on  October 18, 2001 in several Letters Patent Appeals.  By those orders,  the Division Bench set aside the orders passed by the learned single  Judge in various Writ Petitions filed by the petitioners and dismissed  those petitions.   

       To appreciate the controversy raised by the parties, relevant  facts of the first matter (S.L.P. No. 6360 of 2002) may be stated.

       The said appeal is filed by one Hari Chand along with three  appellants and legal representatives of one Mr. Gardia.  From the  record, it appears that these five persons were employees of the  Faridabad Development Board which was converted into Faridabad

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Notified Area Committee, later on renamed as Faridabad Complex  Administration and finally as Faridabad Municipal Corporation.  The  particulars of their service are as detailed below; Appellant       Name                    Date of         Date of  No.                                     Appointment     Retirement

A-1             Hari Chand              30.04.38                10.06.76 A-2             Sohan Lal               23.02.50                31.05.80 A-3             Roshan Lal              01.04.55                30.11.79 A-4             Jetha Nand              26.03.48                30.04.86 A-5             Gardia          01.07.54                31.07.83

       It was the case of the petitioners (appellants herein) that they  were appointed by Faridabad Development Board.  On January 1,  1960, the functions of the Development Board were transferred to  Notified Area Committee and services of the petitioners were also  transferred to the Area Committee.  After coming into force of the  Faridabad Complex (Regulation and Development) Act, 1971 (Act 42  of 1971), all the employees were transferred to the Complex  Administration.  From the perusal of various provisions of the Act, it  was clear, submitted the petitioners, that the function of Municipal  Committee was taken over by respondent No.2 under the Act of 1971.   Services of the existing staff of the Municipalities i.e. Municipality of  Faridabad and Township, Municipality of Faridabad Old and  Municipality of Ballabhgarh were taken over by Faridabad Complex  Administration.  Those employees thus became employees of  Faridabad Complex Administration.  According to the petitioners,  they were entitled to all the benefits and facilities in the matters of  pay, pension, gratuity, etc. as extended and available to employees of  the State Government as the conditions of services of the petitioners  were governed by the Punjab Civil Services Rules as applicable to the  State of Haryana.  The appellants, therefore, deserved to be treated at  par with other Government servants of the State of Haryana.  Though  the petitioners made various representations to the second respondent  for grant of pension, gratuity and retrial benefits, no action was taken  by the Corporation.  They were, therefore, constrained to approach the  High Court by filing a writ petition.  A prayer was made to declare  that the petitioners were entitled to pensionary benefits as admissible  to employees of Haryana Government and to issue a writ of  mandamus directing respondent No.2 to extend such benefits to them.                    An affidavit was filed on behalf of the Administration, inter  alia contending that the petitioners were not entitled to benefits as  available to Government employees. According to the Administration,  the petitioners could not be said to be Government employees.  They  were governed by Act of 1971 and their service conditions were  regulated by the said Act and the Rules made thereunder.  Under that  Act, they were entitled to Contributory Provident Fund which was  paid to them.  It was, therefore, prayed that they had no cause of  action against the respondent and the petitions were liable to be  dismissed.   

       The learned single Judge, who heard the matter, allowed the  petition.  It was observed that some employees working with  Faridabad Development Board, whose services were transferred to  Faridabad Complex Administration came to know about the Bye-laws  formulated by the Administration regarding grant of pensionary  benefits after they retired.  They, therefore, made representations to  the Administration for grant of those benefits.  As the benefits were  not granted to them, they filed a civil suit which was decreed by the  Court of Sub-Judge, II Class, Faridabad. An appeal filed by the  Administration against the decree of the Trial Court came to be  dismissed by the Additional District Judge, Faridabad.  Regular  Second Appeal was also dismissed by the High Court.  On parity of  reasoning, therefore, proceeded the learned single Judge, the

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petitioners were also entitled to equal treatment.  The learned single  Judge observed that since the petitioners were similarly situated to the  plaintiffs in a civil suit, they were also entitled to similar benefits.   The decree passed in civil suit attained finality and hence, there was  no reason for respondent No.2 to deprive the petitioners to the benefits  which had been granted to plaintiffs in a civil suit.  Accordingly, the  petition was allowed and the respondent No.2 was directed to extend  all retrial benefits to the petitioners.  Similar orders were passed in  other writ petitions.

       Being aggrieved by the orders passed by the learned single  Judge, the Administration preferred Letters Patent Appeals.  The  Division Bench of the High Court observed that the decision of  Division Bench in Dhan Singh v. Faridabad Municipal Corporation,  Civil Writ Petition No. 842 of 2000 dated January 24, 2000 was  applicable and the point was concluded by the ratio of that decision.   In that Writ Petition, the Court negatived the contention of the  petitioners to get pensionary benefits observing that they had no right  to such pension in the light of statutory provision.

       The Bench noted that the learned single Judge did not deal with  the provision on the basis of which the prayer had been declined by  the respondent - Administration.  It observed that the pension scheme  was applied to local bodies including Faridabad Municipal  Corporation only from April 16, 1992.  It was a new scheme and had  no application to retired employees.  All the petitioners were  superannuated prior to 1992 and they were not entitled to pensionary  benefits under the scheme.  In the opinion of the Division Bench, the  point was fully covered by the decision of the Division Bench in Dhan  Singh, and the learned single Judge was in error in allowing the  petition.  The appeals were accordingly allowed and the orders passed  by the learned single Judge were set aside.                  Being aggrieved by the orders passed by the Division Bench of  the High Court, the appellants have approached this Court.  All  Special Leave Petitions were placed for admission, notices were  issued and a direction was given to the Registry to list the matters for  final disposal. That is how all the matters have been placed before us.  

       We have heard learned counsel for the parties.

       The learned counsel for the appellants submitted that the suit  filed by some of the employees in a civil court was decreed by the  Trial Court.  The said decree was confirmed by the lower appellate  court as well as by the High Court.  No further steps had been taken  and the decision has thus attained finality.  The learned single Judge  was, therefore, right in allowing the petitions filed by the appellants- petitioners.  It was also urged that the appellants were similarly  situated to the plaintiffs in a civil suit.  Hence, even on the ground of  equal treatment, the appellants are entitled to the benefits which had  been granted by a civil court in favour of employees in a suit.  Non- extension of those benefits to the appellants would be discriminatory  and violative of Article 14 as also un-reasonable and violative of  Article 19 of the Constitution.  It was urged by learned counsel that  the decision in a civil suit would operate as res judicata against the  respondent-Corporation.  The Division Bench had committed an error  of law in allowing Letters Patent Appeals and in setting aside the  directions issued by the learned single Judge.  It was, therefore,  prayed that the appeals may be allowed and direction may be issued to  the Corporation to grant pensionary benefits to the appellants.   

       The learned counsel for the respondent-Corporation, on the  other hand, supported the orders of the Division Bench.  It was  submitted that the doctrine of res judicata has no application.   Admittedly, the appellants had not approached a court of law earlier

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and were not parties to the suit.  One of the essential conditions of res  judicata is that the parties must be same, which is absent.  On merits  also, according to the learned counsel, no case had been made out by  the appellants.  Admittedly, all the appellants retired prior to April,  1992.  Pension scheme was introduced by the Corporation for the first  time in 1992.  It is well-settled, submitted the counsel, that if a scheme  is in existence and is operative, revision, modification or liberalisation  thereof would apply to the employees who had retired in the  meantime. Such benefit, however, is not available to a newly  introduced scheme.  In the instant case, the benefit of Contributory  Provident Fund was in existence when the appellants retired from  service.  They were, therefore, entitled to those benefits and were  given such benefits.  Then in April, 1992, pension scheme was  introduced by a notification dated March 5, 1993.  Since the  appellants were no more in service, they were not entitled to claim the  said benefit.  Regarding the decree passed in the suit, the attention of  the Court was not invited to Rule 3.16 of the Punjab Civil Services  Rules, which was never considered by the Court.  The decision in the  suit was thus per incuriam and had no binding force.

       The learned counsel also submitted that subsequently in Dhan  Singh, a writ petition was filed in the High Court of Punjab and  Haryana claiming similar benefits on the basis of a decree passed by a  civil court.  The Division Bench, however, considered Rule 3.16 along  with Note 1 and held that no relief could be granted to the petitioners  and the petition was dismissed.  The counsel stated that even this  Court also took a similar view.  The Division Bench was, therefore,  right in allowing the appeals filed by the Corporation and in setting  aside the orders of the learned single Judge.                    So far as Article 14 is concerned, it was submitted that the civil  court had not considered the relevant provision of law.  Since the  appellants had no right, the High Court negatived the claim and the  action is in accordance with law.   

       Having given anxious consideration, in our opinion, the  Division Bench has not faulted in allowing the appeals filed by the  Administration and in setting aside the decision of the learned single  Judge.  So far as res judicata is concerned, admittedly, no suit had  been filed by the appellants in any court.  A suit was instituted by  certain employees which was decreed by the Trial Court and the  decree was confirmed by the First Appellate Court as well as by the  High Court.  Apart from the fact that the doctrine of res judicata as  envisaged by Section 11 of the Code of Civil Procedure, 1908 does  not stricto sensu apply to the proceedings under Article 226 of the  Constitution, it has no application to the facts of the case.  Neither the  appellants were ’parties’ to that suit, nor they are claiming through the  plaintiffs of that suit.  Again, that suit was not filed by the plaintiffs as  a ’representative’ suit.  The decree in that suit, therefore, cannot  operate as res judicata.  It is no doubt open to the appellants to rely on  the said decision which had attained finality.  In our opinion, however,  the Division Bench was right and the submission of the learned  counsel for the Corporation is well-founded that the Court had not  considered Rule 3.16 of the Punjab Civil Services Rules.  Reading the  judgment of the Court, it transpires that two contentions were raised  before the Court.  Firstly, it was asserted that the erstwhile Faridabad  Board was functioning as a ’limb’ of Central Government.  Since the  plaintiffs were employees of the Board, they ought to be treated as  employees of the Government of India in the matter of pensionary  benefits.  The contention, however, was negatived and it was held that  the plaintiffs were not Central Government employees.  Secondly, it  was urged that they were entitled to pension in view of notification,  dated January 13, 1975 and Bye-law 10 which laid down that the  Faridabad Complex Administration would follow the Punjab Civil  Services Rules in the matter of pay, pension etc.  The Court, therefore,

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noted that the plaintiffs could not be denied those benefits.  In view of  the finding on the second point, the suit was decreed and the decree  was confirmed even by the High Court.  When a similar benefit was  claimed by other employees, the Division Bench in Dhan Singh, noted  that the attention of the Court was not invited to statutory provision  (Rule 3.16 of the Punjab Civil Services Rules) and hence the decision  in civil suit would not bind the administration.  The Division Bench  observed that the court relied upon Notification dated January 13,  1975, but no reference whatsoever was made to Rule 3.16 of the Rules  and particularly Note 1 thereof which expressly excluded the  employees of Municipalities from payment of pension.  The Division  Bench also observed that the statutory pension scheme was introduced  only from April 16, 1992.  The constitutional validity of the scheme  had not been challenged by the petitioner.  Since the petitioner retired  in 1989, i.e., three years prior to the applicability of the scheme, he  was not entitled to pensionary benefits.  Accordingly, the petition was  dismissed.

       There is one more reason why the orders passed by the Division  Bench should not be held legal and valid.  One K.L. Gulati, who was  also an employee of erstwhile Faridabad Notified Area Committee  retired on October 31, 1984 from the respondent-Corporation.  He  opted for Provident Fund which scheme was applicable then and  received the benefits.  After his death, his widow and children filed a  suit for grant of pensionary benefits.  The Trial Court decreed the suit.   The decree was confirmed by the First Appellate Court.  But the  Second Appeal was allowed.  The plaintiffs then approached this  Court.

       A three-Judge Bench of this Court on March 31, 2004 dismissed  the appeal by a speaking order.   It was observed that since the  Pension Scheme was introduced from 1992 and the employee retired  prior to introduction of the scheme, he would not be entitled to the  benefit under the newly introduced scheme.  This Court also negatived  the contention that in view of the Notification dated January 13, 1975,  the appellants were entitled to such pensionary benefits.  The Court  said;         "It was then urged that in any case by virtue of  Notification dated 13th January, 1975, the appellants  were entitled to pensionary benefits.  We also do not  find any merit in this argument.  Note 1 of Rule 3.16 of  the Punjab Civil Service Rules excluded the application  of pension schemes to the employees of the  Municipalities."                        (emphasis supplied)

       An attempt was no doubt made by the learned counsel for the  appellants that the above decision of this Court is per incuriam and as  observed in A.R. Antulay vs. R.S. Nayak & Another, (1988) 2 SCC  602, it has no binding effect.  The contention is not well-founded and  cannot be accepted. Apart from the fact that it was a decision of three- Judge Bench, it also considered the Notification dated June 13, 1975  on which reliance was placed by the appellants and negatived the  contention specifically referring to and relying upon Note 1 to Rule  3.16 of the Punjab Civil Services Rules, and in holding that the said  Note excluded employees of Municipalities from the application of  the Pension Scheme.  

       Regarding pensionary benefits, the learned counsel for the  parties referred to few decisions of this Court.  In the leading case of  D.S. Nakara & Others v. Union of India, (1983) 1 SCC 305, this  Court granted pensionary benefits even to those employees who had  retired before the revision of Pension Scheme observing that  pensioners form a class as a whole and cannot be micro-classified by  an arbitrary, unprincipled and unreasonable eligibility criterion for

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grant of revised pension.  An artificial discrimination for fixing date  of enforcement by extending benefits to those who retired after a  particular date by depriving similar benefits to those who retired prior  to that date must be held arbitrary, discriminatory, irrational and  violative of Article 14 of the Constitution.   

       In our opinion D.S. Nakara would not apply to the facts of the  case inasmuch as it was a case of grant of "revised" pension and was  not a "new" scheme.  What was observed by this Court was that when  a scheme is in existence when a Government servant retires and is  subsequently revised, it is not open to the Government to arbitrarily  ’pick and choose’ by forming two classes; (i) employees who retire  prior to revision of the scheme, and (ii) employees who retire after the  revision.  Since, the scheme was very much operative, benefit of  revision ought to be extended to all the employees who were  governed by the original scheme and retired prior to revision.

       In Dhan Raj & Others vs. State of J & K & Others, (1998) 4  SCC 30, D. S. Nakara was followed.  There, the appellant-employees  belonged to erstwhile Government Transport Undertaking in the State  of Jammu & Kashmir were sent on deputation in the State Road  Transport Corporation and retired prior to June, 1981.  The State  Government issued an order in 1986 allowing even retired employees  to opt for pension.  It was held by this Court that the said benefit was  available to all employees and not only to those who retired after  1981.

       On the other hand, in State of Punjab v. Justice S.S. Dewan  (Retired Chief Justice) & Others, (1997) 4 SCC 569, the petitioner  claimed retirement benefits on the basis of beneficial provision which  was introduced for the first time.  The question before this Court was  as to the applicability of such scheme to employees who had already  retired.  It was held that newly introduced scheme would not apply to  employees who had retired before introduction of such scheme.  If it  was liberalization of an existing scheme, it would be applicable to  employees who retired after such revised scheme as also prior to the  revision.           The Court stated;         "Conceptually, pension is a reward for past  services.  It is determined on the basis of length of  service and last pay drawn.  Length of service is  determinative of eligibility and the quantum of pension.   The formula adopted for determining last average  emoluments drawn has an impact on the quantum of  pension.  In D.S. Nakara case, the change in the formula  of determining average emoluments by reducing 36  months’ service to 10 months’ service as measure of  pension, made with a view to giving a higher average,  was regarded as liberalization or upward revision of the  existing pension scheme.  On the basis of the same  reasoning it may be said that any modification with  respect to the other determinative factor, namely,  qualifying service made with a view to make it more  beneficial in terms of quantum of pension can also be  regarded as liberalization or upward revision of the  existing pension scheme.  If, however, the change is not  confined to the period of service but extends or relates to  a period anterior to the joining of service then it would  assume a different character.  Then it is not  liberalization of the existing scheme but introduction of  a new retrial benefit. What has been done by amending  Rule 16 is to make the period of practice at the Bar,  which was otherwise irrelevant for determining the  qualifying service, also relevant for that purpose.  It is a  new concept and a new retrial benefit.  The object of the

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amendment does not appear to be to go for  liberalization.  The purpose for which it appears to have  been made is to make it more attractive for those who  are already in service so that they may not leave it and  for new entrants so that they may be tempted to joint it.   Though Rule 16 does not specifically state that the  amended rule will apply only to those who retired after  22-2-1990, the intention behind it clearly appears to be  to extend the new benefit to those only who retired after  that date.  For these reasons the principle laid down in  D.S. Nakara case that if pensioners form a class  computation of their pension cannot be by different  formula affording unequal treatment merely on the  ground that some retired earlier and some retired later,  will have no application to a case of this type.   Therefore, on both the grounds the High Court was in  error in applying the ratio of the decision in D.S. Nakara  case to this case.  As rightly contended on behalf of the  State, benefit of the amendment would be available to  only those direct recruits who retired after it has come  into force."                  In V. Kasturi v. Managing Director, State Bank of India,  Bombay & Another, (1998) 8 SCC 30, referring to several earlier  decisions, this Court held that prospective amendment in the Rule  would not entitle earlier retirees to get benefit of amendment.

       In Union of India & Another v. Deoki Nandan Aggarwal, 1992  Supp (1) SCC 323, this Court observed that the Court cannot usurp  legislative function.  It also cannot supply omission to a statute.   Under the guise of affirmative action to avoid discrimination, it  cannot modify legislative policy.                   The Court said; "It is not the duty of the court either to enlarge the scope  of the legislation or the intention of the legislature when  the language of the provision is plain and unambiguous.   The court cannot rewrite, recast or reframe the  legislation for the very good reason that it has no power  to legislate.  The power to legislate has not been  conferred on the courts.  The court cannot add words to  a statute or read words into it which are not there.   Assuming there is a defect or an omission in the words  used by the legislature the court could not go to its aid  to correct or make up the deficiency.  Courts shall  decide what the law is and not what it should be.  The  court of course adopts a construction which will carry  out the obvious intention of the legislature but could not  legislate itself.  But to invoke judicial activism to set at  naught legislative judgment is subversive of the  constitutional harmony and comity of  instrumentalities\005. Modifying and altering the scheme  and applying it to others who are not otherwise entitled  to under the scheme, will not also come under the  principle of affirmative action adopted by courts  sometimes in order to avoid discrimination.  If we may  say so, what the High Court has done in this case is a  clear and naked usurpation of legislative power."                                         (emphasis supplied)

       In our opinion, on the basis of the above case law, the Division  Bench was wholly right in allowing the appeals and setting aside the  directions of the learned single Judge.  The Division Bench in this  connection referred to the order passed in Dhan Singh (Civil Writ  Petition No. 842 of 2000) wherein it was observed:

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"A bare perusal of the above extracted portions of the  judgment of the lower appellate court, the Order passed  by the learned Single Judge in Regular Second Appeal  No. 1867 of 1994 and the Order passed by the learned  Single Judge in the Writ Petition of K.L. Chawla and  Ors. shows that the attention of the first appellate Court  had and two learned Single Judges of this Court had not  been drawn to Note \026 I appearing below Rule 3.16 of the  Punjab Civil Services Rules, Vol. II which expressly  exclude the employees of the Municipal Committee  from the Chapter relating to the pension etc.  The said  Rule alongwith Note-I read as under :-

’3.16.    (a)   The service of a government employee does  not qualify unless he is appointed and his duties and pay  are regulated by the government or under conditions  determined by the government;

(b)     Past service rendered in a part B State (excluding  Saurashtra but including an Indian State which  subsequently became a part of B State) shall be treated  as equivalent to Government services for the purpose of  pension and shall count for pension on permanent  absorption in the Punjab Government Service in the  same manner as such service rendered in a former part A  State Counts :  

Note 1 :- The following are examples of Government  employees excluded from pension by this Rule :-

1.      Employees of a Municipality; 2.      Employees of Grant \026 in- aid schools and  institutions;

3.      Subordinates appointed by Treasurers on their own  responsibility;

4.      Service on an establishment paid from a Contract  Establishment Allowance, with the detailed distribution  of which the Government does not interfere, whether  such contract allowance is a fixed amount or consists of  fees;

5.      Service on an establishment paid from the  Household Allowance of the Governor."         Since, in earlier matters, the attention of the Court was not  invited to Rule 3.16 of the Punjab Civil Services Rules and in  particular Note 1 which excluded Municipal employees from payment  of pensions, the Division Bench was right in holding that the  appellants herein were not entitled to pension.  As already observed, a  three-Judge Bench of this Court also took a similar view and  dismissed the appeal specifically observing that in view of statutory  provision, the retired employees of the respondent-Corporation were  not entitled to pensionary benefit which was introduced for the first  time in April, 1992.  The action of the respondent-Corporation, hence,  cannot be described as arbitrary, discriminatory or unreasonable,  violative of Article 14 or 19 of the Constitution.

       For the foregoing reasons, in our opinion, all the appeals  deserve to be dismissed and are, accordingly dismissed, however, in  the circumstances, without any order as to costs.