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PETITIONER: HARI RAM GUPTA (D) THR. L.R. KASTURI DEVI

       Vs.

RESPONDENT: THE STATE OF UTTAR PRADESH

DATE OF JUDGMENT:       22/07/1998

BENCH: SUJATA V. MANOHAR, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T PATTANAIK, J.      Leave granted.      This appeal  by grant  of  special  leave  is  directed against the  judgment dated  13th of  November, 1995  of the Allahabad High Court in Civil Miscellaneous Petition No. 557 of 1987.  Hari Ram  Gupta husband  of the present appellant, had filed  the writ  petition seeking  a mandamus  from  the court  to  the  appropriate  authorities  to  give  him  the benefits of  the Uttar  Pradesh Palika (Centralised) Service Retirement benefit  Rules, 1981  (hereinafter referred to as ’the Rules’).  But said  Hari Ram  Gupta  had  retired  from service on  superannuation in  the year  1980. He,  however, claimed that he would be entitled to pension under the Rules as the  Rules are  intended to  apply retrospectively and at any rate  following the  principle of  the Judgement of this Court in  D.S. Nakara and other vs. Union of India, (1983) 1 SCC 305,  the court  should grant  him the  relief. The High Court by  the impugned  judgment came to hold that the Rules have  no   retrospective  operation,   and  therefore,   the applicant was not entitled to claim pension under the Rules. Soon after  the judgment  of the  Allahabad High  Court, the husband of  the appellant  having died,  the widow filed the special leave  application out  of which this appeal arises. The sole question for consideration is whether the Rules can be said  to  have  any  retrospective  application  and  are applicable  to  those  employees  belonging  to  the  Palika (Centralised) Service, who retired from service prior to the coming into  force of  the Rules.  It is  not disputed  that before the  Rules came  into operation  there was  no  rules providing pension  for  the  employees  of  the  centralised services.      The  learned  counsel  for  the  appellant  strenuously contended that  a conjoint  reading of sub-rules (2) and (3) of Rule  3 would  make it  crystal clear  that the  Rule  is applicable even  to those  employees who  have retired  from service on  the date the Rules came into operation, provided they exercise  their option  in accordance  with  the  Rules within the stipulated period of 90 days from the enforcement of the  Rules and  they deposit the amount finally withdrawn

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from  Palika’s  contribution  and  bonus  deposited  in  his Provident Fund  Account into  the pension  fund  established under Part VI of the Rules. According to the learned counsel unless such  an interpretation  is given,  the provision  of sub-rule (3)  would become  otiose inasmuch as an officer is entitled to  finally withdraw  the amount from the Provident Fund on  super annuation and not while he continues to be in service. The  learned counsel  further contended  that under identical circumstances  an employee  of a  school under New Delhi Municipal  Committee had  approached this Court in the case  of  Shakuntala  Mehrishi,  New  Delhi  vs.  New  Delhi Municipal Committee  and others,  (1991) 3  SCC 521 and this Court had  granted the retiral benefits to the employee. The aforesaid decision,  contends the  learned counsel  for  the appellant, should apply with full force to the case in hand. The learned counsel further urged that the Rules in question providing for  pension, if  is held  to apply  to only those employees who retired subsequent to the coming into force of the Rules  and not to those to have already retired, then it would be violative of the law laid down by this Court in the case of  D.S. Nakara (supra) inasmuch as pension paid is not a bounty nor an ex-gratia payment for past services rendered and is  a social  welfare measure  rendering  socio-economic justice  to   those  who   in  the  hey-day  of  their  life ceaselessly toiled  for the employer on an assurance that in their old age they would not be left in lurch.      Learned counsel  for the  respondent, on the other hand contended that  there is  no  ambiguity  in  the  Rules  and nowhere   the   Rules   indicate   that   it   would   apply retrospectively on  certain conditions  being fulfilled.  He further  contended   that  under   the  provisions   of  the Regulation for  payment of  Provident  Fund  made  by  Nagar Palika, Jhansi  an employee  is entitled to finally withdraw after rendering  25 years  of service  or when such employee has less  than 8  years of  service to  attain  the  age  of superannuation, and  therefore, it is not correct that final withdrawal   is    permissible   only   on   the   date   of superannuation. In  that view  of the  matter the expression ’final withdrawal’  in sub-rule  (3) of  Rule 3 of the Rules cannot  be  interpreted  to  mean  that  the  Rules  have  a retrospective operation. The learned counsel also urged that the rules  determining the service conditions of an employee under the  service jurisprudence  is usually  prospective in nature unless  there is anything in the Rules which indicate the legislative  intent of  making the rule retrospective or the rule  is expressly  made retrospective. Since neither of these conditions  are satisfied  in the  case in  hand,  the rules must  be held  to be prospective, and therefore, would not govern the case of those who retired prior to the coming into force  of the  Rules.  on the question of applicability of the  decision of  this Court in Shakuntala Mehrishi case, the learned  counsel contended  that the  ratio laid down in that case  has no  application and  the said  decision is no guidance for  deciding the  question as to whether the Rules in the  present case has any retrospective operation. On the question of  the applicability of the ratio in D.S. Nakara’s case, the  learned counsel for the respondent urged that the appellant has  not challenged  validity of  the Rules and on the other  hand seek  relief on  the basis of the said Rule, therefore, the  Rule  cannot  be  struck  down.  He  further contended that the decision of this Court in D.S. Nakara has been watered down by this Court in several subsequent  cases and it  is the  settled  position  now  that  the  employees retiring on  a particular  date would  be  governed  by  the benefits of  the rules  then existing and cannot complain of

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if at  a subsequent  stage certain  other rules  confer some additional benefits.  Thus, judged the principles enunciated by this  Court in  nakara have no application to the case in hand.      In view  of the  rival submission,  the first  question that arises  for consideration  is whether  the Rules can be said to have any retrospective operation?      We have  examined the  Rules carefully  and there is no express provision  in  the  Rules  giving  it  retrospective operation. The  question then  arises as to whether from any of the  provisions contained  in the Rules is it possible to infer  that   the  Rules   have  been   given  retrospective operation. The argument of the learned counsel appearing for the appellant  in this  context is  based upon  the language used in  sub-rule (2) and sub-rule (3) of Rule 3. For better appreciation of  the point  in issue  sub-rules (1), (2) and (3) of Rule 3 are quoted hereinbelow in extenso:-      3. Application  of the  rules.- (1)      These     rules     shall     apply      compulsorily to  all those officers      who were appointed on or after July      9, 1966 under clause (1) of Rule 21      of   the   Uttar   Pradesh   Palika      (Centralised) Services  Rules, 1966      and would  become permanent  on any      post in the Centralised Services.      (2) The  officers who  were finally      absorbed on any post in Centralised      Services under clause (2) of Rule 6      of   the   Uttar   Pradesh   Palika      (Centralised) Services  Rules, 1966      will  have   an  option   to  elect      whether they  would be  governed by      the existing Pension/Provident Fund      Rules of  the Palika as hitherto or      would like  to  governed  by  those      rules.     This  option   shall  be      exercised within  ninety days  from      the enforcement  of these rules and      the option  once exercised shall be      final.      (3)  If  an  officer  opting  these      rules  has  finally  withdrawn  the      amounts  of  Palika’s  contribution      and   bonus    deposited   in   his      Provident Fund  Account,  the  same      shall have  to be  deposited by him      into the  pension fund  established      under Part  VI of these Rules along      with interest  at the  rates  fixed      from time  to time  by the  Reserve      Bank of India."      Sub-rule (1)  of Rule  3 clearly  indicates  that  Rule should apply  to those  officers who  were appointed  on  or after July 1966 under clause 1 of Rule 21 of the Centralised Services Rules  of 1966  and would  become permanent  in the Centralised  services.    This  sub-rule  obviously  has  no application. The earned counsel appearing for the appellant, however, urged  that if  sub-rules (2) and (3) of Rule 3 are read together  it unequivocally  indicates that the Rules do apply to  those persons who have already retired. In as much as sub-rule  (3) gives  an option  to officers  to  exercise option to  be governed by the Rules and if they have finally withdrawn the  amounts of  Palika’s contribution  and  bonus deposited in  Provident Fund  Account the  same will have to

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deposited into  the pension  fund. It  is contended  by  the learned counsel  that an  employee can  finally withdraw the amount from  the Provident  Fund only  on his superannuation and not  at any  earlier point of time while he continues to be  in   service  and,   therefore,  this  sub-rule  clearly indicates that  the Rules  apply to  those who  have already superannuated on  the date  the Rule came into force. But on examining the  provisions contained  in Pension  and General Provident Fund  Regulations or Rules which governed the case of employees  of Palika, more particularly the provisions of Clause 5  - C(1)  we find  that final  withdrawals under the Regulation is  permitted in  the case  of Municipal servants who have  either rendered 25 years service or have less than 8 years to attain the age of superannuation. The purpose for which such  final withdrawal is permissible is enumerated in other sub-clauses  of said Clause 5 - C. In this view of the matter the  argument of the earned counsel appearing for the appellant that  final withdrawal  is permissible only on the date  of   superannuation  cannot   be  sustained   and  the expression ’final  withdrawal’ as  envisaged under  sub-rule (3) of  Rule 3 would mean those final withdrawals made by an employee  while  continuing  in  service  for  the  purposes mentioned in sub-clause (2) of Clause 5-C. Consequently, the argument that  a combined reading of sub-clause (3) and sub- clause  (2)   of  Rule  3  indicates  that  the  Rules  have retrospective application  is devoid  of any  force and  the same accordingly stands rejected.      The next  question that  arises  for  consideration  is whether the  judgment of  this Court  in Shakuntala Mehrishi vs. New  Delhi Municipal  Committee and  other (1990)  3 SCC 521, any  way helps  the appellant  in  getting  the  relief sought for?  In the  aforesaid case  the teacher  of  a  re- cognised aided  school opted for pension and gratuity within stipulated period  in  prescribed  proforma  as  desired  by statutory    notification.     But    notwithstanding    his superannuation he  did  not  receive  the  benefits  as  the modalities  about  contribution  towards  pension  fund  and approval of  Government of India had not been obtained. This Court held  that payments to the employee cannot be deferred on such  grounds over which the employee has not control and accordingly directed that the necessary payments be made. we fail to  understand how the aforesaid decision is in any way applicable to  the case in hand for deciding the question as to  whether   the  Rules   providing   for   pension   would retrospectively apply  to the  case of  an employee  who had already retired  before the  Rules came  into operation.  In our considered  opinion the aforesaid decision of this Court does not help the appellant in any manner.      The  only   other  question   that  survives   for  our consideration is  whether the  ratio in  Nakara’s case  will assist the  appellant in  getting the  relief sought for? In D.S. Nakara  and others vs. Union of India (1983) 1 SCC, 305 the question for consideration before this Court was whether on the  basis of  date of  retirement the  retirees  can  be classified  into   different  groups   and  thereupon   make provision granting  some benefits  to one  group denying the others? In the aforesaid case the provisions for pension was applicable to all retirees and, therefore, pensioners form a class as  a whole.  But when  Liberalised Pension Scheme was introduced the said Scheme was made applicable to a group of pensioners and not to all and therefore, it was held by this Court that  pensioners form a class as a whole and cannot be micro-classified   by   an   arbitrary,   unprincipled   and unreasonable eligibility  criteria. it  is to  be noted that the aforesaid  judgment was  considered by this Court In the

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subsequent Constitution  Bench judgment of Krishna Kumar vs. Union of  India (1991)  4 SCC,  207 wherein  the decision of Nakara (supra)  was explained  and  it  was  held  that  the pension retirees and provident fund retirees do not form one homogeneous class  on the other hand the Rules governing the provident fund  and its  contribution are entirely different from the  Rules governing  pension and,  therefore, it would not be reasonable to argue what is applicable to the pension retirees must  also equally  be applicable to Provident Fund retirees must  also equally  be applicable to Provident Fund retirees. It was further held in the aforesaid case that the rights of  each individual  retiree finally  crystallised on his retirement where after no continuing obligation remained in case  of those  who are  governed by Provident Fund Rules whereas in case of Pension retirees the obligation continues till the  death of  the employee.   This Court categorically held that  Nakara (supra)  cannot be  an authority  for  the decision in  Krishna Kumar  (supra). In  Union of  India vs. B.P.N. Menon  (1994) 4 SCC 68 a similar question came up for consideration  and   distinguishing  Nakara   and  following Krishna Kumar  and other  similar cases  the Court held that whenever the  Government or  an authority, which can be held to be  a State  within the  meaning of  Article  12  of  the Constitution,  frames   a  scheme   for  persons   who  have superannuated from  service, due  to many constraints, it is not always  possible to  extend the same benefits to one and all, irrespective  of the  dates of  superannuation. As such any revised  scheme in  respect of post-retirement benefits, if implemented  with a cut-off date, which can be held to be reasonable and  rational in  the light  of Article 14 of the Constitution, need  not be  held to  be invalid.  Whenever a revision takes  place, a  cut-off  date  becomes  imperative because the  benefit has  to be allowed within the financial resources available  with  the  Government.  When  the  Army personnel claimed  the same  pension irrespective  of  their date of retirement this Court in the Constitution Bench case of the Indian ex-services League vs. Union of India, (1991)2 SCC 104, the Court considered the grievance of ex-servicemen who had  laid the  claim on  the basis of nakara (supra) but ultimately negatived  the same  and followed  Krishna  Kumar (supra).  In   All  India   Reserve  Bank  Retired  Officers Association vs. Union of India, (1192) Suppl 1 SCC 664, when the validity  of the introduction of Pensions scheme in lieu of Contributory  Provident Fund Scheme was challenged on the ground that  Bank employees  who retired  prior to  1.1.1986 have not  been given  the benefit  of the said scheme it was held by  this Court  that there  is no  arbitrariness in the same.      This  being   the   position   the   appellant   having superannuated prior  to the  Rule coming  into force  cannot claim the  right to pension under the Rules with the help of the decision  of this Court in Nakara (supra) and further in view of  our conclusion  that the  Rules  do  not  have  any retrospective  operation   the  relief  sought  for  by  the appellant to get pension under the Rules cannot be granted.      In the  premises, as aforesaid, the appeal fails and is dismissed. But  in the  circumstances there will no order as to costs.