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PETITIONER: STATE OF RAJASTHAN & ANR.

       Vs.

RESPONDENT: PREM RAJ

DATE OF JUDGMENT:       14/02/1997

BENCH: S.C. AGRAWAL, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T G.B. PATTANAIK, J.      These two  appeals involve a common question of law and as such were heard together and are being disposed of by the common judgment. The respondent in both the appeals are pre- 1979 retiree,  the respondent  in Civil  Appeal No.  5450 of 1994 having  superannuated on  14.11.1969 and the respondent in the  other appeal  having superannuated  before  December 1968. On  superannuation, their pension had been computed in accordance with  Rule 256  of the  Rajasthan Service  Rules, 1951, (hereinafter  referred to  as ‘the  Rules’) whereunder Dearness Allowance received by them while in service had not been taken  into account  for computation  in the  amount of pension. On  18th March,  1971 the  Governor of Rajasthan in exercise of  powers conferred  by proviso  to Article 309 of the Constitution  amended the  Rules giving it retrospective effect w.e.f.  1.4.1970, while  was incerted  as  Rule  250- C(1)(a). The  said provision  stipulates  that  in  case  of Government  Servants  retiring  from  service  on  or  after 1.4.1970 the  term "emoluments"  used  for  the  purpose  of pension, service  gratuity and death-cum-retirement gratuity shall mean  the ‘pay’  as defined in Rule 7(24) and Dearness pay appropriate  to pay,  if  any,  which  the  officer  was receiving immediately  before his  retirement. The aforesaid provision is extracted herein below in extenso :      "Notwithstanding   the   provisions      contained in rule 250, 250-A, 250-B      in  case   of  Government  Servants      retiring from  service on  or after      1.4.1970,  the   term  ‘emoluments’      used  for   purposes  of   pension,      service  gratuity   and  death-cum-      retirement gratuity  shall mean the      "pay" as  defined in rule 7(24) and      dearness pay appropriate to pay, if      any,   which    the   officer   was      receiving  immediately  before  his      retirement, provided that -      (2)  The   Special  Pay,   if  any,      granted    for    performance    of

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    additional  duties  or  a  post  in      addition to  duties of his own post      shall not be taken into account for      the purpose of this rule."      By the  said Notification  dated 18th  March, 1971 Rule 250-A (1)  was also  amended giving  it retrospective effect from w.e.f.  1.4.1970, which  is extracted  herein below  in extenso:      "Notwithstanding   the   provisions      contained in rule 256, in case of a      Government  servant  retiring  from      service  on  or  after  1.4.70  the      amount of superannuation, retiring,      invalid and  compensation  gratuity      and the pension shall be admissible      as follows :      -----------------------------------      Completed six   Scale of    Maximum      monthly periods Gratuity /  Pension      of qualifying   Pension     (in Rs.      service                     per                                  annum)      -----------------------------------           1              2         3      -----------------------------------      60 30/80th          "   "   8100      -----------------------------------      By Notification dated 2.12.1974 giving it retrospective effect w.e.f.  31.10.1974 Rule  256-B was also amended which extracted herein below in extenso:      "Notwithstanding   the    provision      contained in Rule 256-A, in respect      of a Government Servant retiring on      or after  31.10.1974 the  amount of      superannuation retiring invalid and      compensation gratuity  and  pension      admissible shall be as follows:-      -----------------------------------      Completed six   Scale of   Maximum      monthly         Gratuity   Pension      periods of      pension     (in Rs.                                 per      qualifying                 annum)      -----------------------------------           1              2         3      66 33/80th          "  "  12000.00      -----------------------------------      The effect  of the  aforesaid amendment  was that while the  maximum  pension  in  respect  of  Government  Servants retiring from  service on  or after  1.4.1970 was 8,100, but those who  retired on  or after  31.10.1974 it became 12,000 and while  in case  of the former pension was to be computed on 30/80th  but in  case of  later  it  became  33/80th.  By Notification dated  2.12.74 Rule  250-C(3) was  also amended providing  therein  that  in  case  of  Government  servants retiring on  or after  31.10.1974 the term "emoluments" used for the  purpose of pension, service gratuity and death-cum- retirement gratuity  shall mean pay as defined in Rule 7(24) and shall  include dearness  allowance, dearness  pay (where admissible) and  ad-hoc reliefs admissible on 31.12.1972. By Notification dated  21.1.1980, the  Government of  Rajashtan provided a  revised formula  for calculation  of pension  on slab basis  in respect of Government Servants retiring on or after 31st  March, 1979.  By yet  another Notification dated September 2,  1985, the Government of Rajasthan extended the

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benefit  of   revised  pension   formula  to   pre-31.3.1979 pensioners. This benefit was extended to pre 31.3.1979 retir ees possibly  because of  the decision of this Court in D.S. Nakara &  Ors. Vs.  Union of  India, 1983  (2) SCR  165. The respondent in  the first  case approached the Rajasthan High Court in  the year  1989 which  was registered as Civil Writ Petition No.  575 of 1989 claiming the benefits of the three amended provisions  referred to  earlier and  contended that the amended  provisions so  far as  they provided  a cut-off date for  its application  are arbitrary.  It may  be stated that the  Circular of  September 2,  1985 by  which  revised pension formula was extended to pre-31.3.1979 pensioners was not challenged  and on  the other  hand it  was prayed  that after determination of the emoluments in accordance with the amended provisions  of 1970  and 1974,  the  relief  may  be granted in  accordance with  the Circular dated September 2, 1985.  The  Division  Bench  of  the  rajasthan  High  Court following the  decision  of  this  Court  in  Nakara’s  case referred to  supra struck  down the cut-off date of 1.4.1970 in Rule  256-A as  well as  struck down  the cut-off date of 1.4.1973 in Rule 250-C and also struck down the cut-off date provided under  sub-rule 3  of Rule 250-C. It also held that the computation  of pension as per Rule 256-B should be made applicable to  all Government  Servants irrespective of date of retirement  and the  provision making  it  applicable  to those Government  servants who  have  retired  on  or  after 31.10.1974 is  invalid. The High Court further directed that the pension  of the  respondent should  be  refixed  as  per Notification dated 2.9.1985 after determining the emoluments of the respondent under the amended provisions.      In the  second case,  the writ  petition was heard by a learned single  Judge who  allowed  the  same  on  identical grounds and an appeal against the same to the Division Bench by the  State of Rajasthan was dismissed and thus the appeal by special leave therein.      Mr. Aruneshwar Gupta, the learned counsel appearing for the appellant  contended that  the decision of this Court in Nakara’s case  has  been  watered  down  by  the  subsequent decisions in Krishena Kumar’s case, 1990 (4) SCC 207, Indian Ex-Services League  and others  vs. Union of India. 1991 (2) SCC 104,  State of  West Bengal  and others vs. Ratan Behari Dev and  others, 1993(4)  SCC 62.  and in State of Rajasthan vs. Sevanivatra Karamchari Hitakari Samiti, 1995 (2) SCC 117 and the law as it stands now it is permissible for the State Government to  provide different  modes  of  computation  of pension  in  respect  of  Government  Servants  retiring  on different dates and it cannot be challenged on the ground of discrimination so long as the cut-off date thus provided has a reasonable  nexus with  the change  in  the  mode  of  the computation. The  learned counsel  went  to  the  extent  of urging that  the principles  laid  down  by  this  Court  in Nakara’s case  is no  longer being  followed in recent cases and, therefore,  the High Court was in error in allowing the Writ Petition  following  the  decision  of  this  Court  in Nakara’s case.  Mr. Gupta  also urged that the respondent in each of  the appeals  having superannuated  in 1969 and 1968 respectively and having not challenged the different amended provisions which  came into  existence between 1970 and 1974 and having  approached the  High Court in the year 1989 long 19 years after the first amended provision was made in 1970, the High Court should not have entertained the writ petition at all.  The learned counsel lastly urged that in any of the matter the Notification of September 2, 1985 having provided for a  revised pension  formula to  pre-31.3.1979 pensioners which  includes   the  respondents   case   and   the   said

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Notification having  indicated the  mode of  computation  of pension  and  as  well  as  having  defined  the  expression ‘emoluments’ and  without challenging  the said Notification the respondent  is not  entitled to the relief as granted by the High Court.      Mr. Srivastava, the learned counsel for the respondent, on the other hand, contended that the decision of this Court in Nakara’s  case has  not been over-ruled and what has been indicated in  the subsequent cases is that if the Government provides a  new scheme  and make  the said scheme applicable from a  particular date then the retirees prior to that date will not  be entitled  to the  benefit under the new scheme. But if  a pension  scheme which  was in vogue is liberalised from time  to time  then all pensioners would be entitled to the benefit  of such  liberalised rules and that is what has been granted  by the  High Court  in the  present case.  The learned counsel  fairly conceded  that the  Notification  of September 2,  1985 providing for a liberalisation of pension by introduction  of slab  system even  in  respect  of  pre- 31.3.1979 retirees has not been assailed by the respondent.      Having examined  the rival  contentions and on a closer scrutiny of  the Notification of the Government of Rajasthan dated September  2, 1985  we are  of the  considered opinion that the  High Court  committed gross error in examining the validity of the earlier amended provisions and striking down the same  and granting  the  relief  to  respondent  without striking down the Notification dated September 2, 1985 or at least para  3 and  5 thereof.  In this view of the matter it would not be necessary to examine the bigger issue raised by Mr. Gupta  as to  whether the  decision  of  this  Court  in Nakara’s case  is really  not being  followed in  the  later decision, though we would briefly notice the extent to which the Nakara’s  decision  has  been  explained  in  the  later decision.      In D.S.  Nakara’s case  [1983 2 SCR 165] the memorandum issued by  the Government  of India  dated May  25, 1979 and September 23,  1979 liberalising the form for computation of pension in  respect of  employees governed  by  the  Central Civil Services (Pension) Rules. 1973 who retired on or after March 31,  1979 was challenged to be arbitrary and violative of Article  14. This  Court came to conclusion that when the State considered  it necessary  to  liberalise  the  Pension Scheme in  order to  argumenting the  social security in old age to  Government servants,  it could  not grant benefit of liberalisation only  to those  who retired subsequent to the specified date  and deny  the same  to those who had retired prior to  that  date.  The  division  which  classified  the pensioners into  two clauses  on the  basis of the specified date was  devoid of  any rational  principle  and  was  both arbitrary and  unprincipled being  unrelated to  the  object sought to  be achieved  by grant  of liberalised pension and the guarantee of equal treatment contained in Article 14 was violated inasmuch  as the pension rules which were statutory in  character  meted  out  differential  and  discriminatory treatment to  equals in the matter of computation of pension from the dates specified in the impugned memoranda.      This Constitution  Bench  decision  was  considered  by another Constitution  Bench in  Krishena Kumar’s  case [1990 (4) SCC 207]. In the said case prior to 1957 the only scheme for retirement  benefits in  the Railways  was the Provident Fund Scheme.  The same  scheme was replaced in the year 1957 by a  pension scheme.  Thus all  the employees  who were  in service prior  to the  introduction of  pension scheme  were given option  either to  retain the Provident Funds benefits or to  switch over  to pensionary benefits on condition that

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the contribution  made by  the  Railways  to  the  Provident accounts would revert to the Railways on exercise of option. The employees who did not opt for pension scheme even though had ample opportunity to opt for the same, came forward with a claim that they should be given the benefits of pensionary scheme following  the principle of Nakara’s case. This Court held that  the pension  scheme and the provident fund scheme are structurally  different and  applying the  principles of Nakara’s case,  it cannot  be held that the pension retirees and the  provident fund  retirees form  a homogeneous class. The Court  also further  held that  the rules  governing the provident fund  are entirely  different from rules governing pension scheme  and therefore, it would not be reasonable to argue that  the rules applicable to the pension retirees was also equally  applicable to  provident fund retirees. It was noticed by  the Court  that in  Nakara’s case  the provident fund retirees were not in mind before the Court and only the pension retirees  were treated  as a  homogeneous class. The Court further  held that there would be no discrimination in treating the  provident fund  retirees differently  from the pension retirees.      In the  case of  Indian Ex-Services  League &  Ors. vs. Union  of   India,  1991   (2)  SCC   104,  in  yet  another Constitution Bench  case the  liberalised pension scheme and fixation of  cut-off date for applicability of the same came up for  consideration  before  the  Court.  The  petitioners therein claimed  "one rank  one pension" for all retirees in the armed  forces irrespective  of the date of retirement by application of  Nakara’s  case.  The  Court  held  that  the decision in  Nakara’s case  has to be read as one of limited application and  its ambit  cannot be  enlarged to cover all claims made  by the  pension retirees  or a  demand  for  an identical amount  of pension  to every retiree from the same rank irrespective of the date of retirement, even though the reckonable emoluments  for the  purpose  of  computation  of their  pension   be  different.   In  the   aforesaid  case, consequent upon the decision of  this Court in Nakara’s case a Notification  was issued  on 3rd  December,  1983  by  the Government of  India for  recomputing the revised pension of pre-April 1,  1971 retirees according to liberalised pension scheme.  The   recomputation  as   made  according   to  the liberalised pension  scheme giving  the same  benefit to all retirees irrespective  of their  date of retirement. But the petitioners contended  that the ratio of Nakara case is that all retirees who held the same rank irrespective of the date of retirement  must get  the same  amount of  pension.  This Court  rejected   the  said   contention.  On   reading  the memorandum of  the Government  of India  the Court held that the  benefit   of  liberalised   pension  scheme   was  made applicable even  to pre-April  1, 1979 retirees of the armed forces and  the computation  according  to  the  liberalised formula for  them was  done by  Government order  dated 22nd November, 1983  and December  3, 1983.  In other words, what was held  by this  Court in  the Indian Ex-Services League’s case that  after introduction  of the liberalisation scheme, from a specified date, even the retirees earlier to the same date would  get the benefit of the liberalisation scheme but not in  the same manner and to the same extent which persons in service and retiring after the date would get.      In State of West Bengal and Others vs. Ratan Behari Dev and Others,  1993 (4)  SCC 62,  this  Court  considered  the question whether  in providing  a pension  scheme the  State could fix  up a  particular date  and make  it applicable to those  who   retired  on  or  after  that  date.  The  Court distinguished the  Nakara’s case by holding that in Nakara’s

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case an  artificial date  had been specified classifying the retirees governed  by the  same rules and similarly situated into two  different classes  depriving one such class of the benefit of  the liberalised  pension rules and that was held to be  bad. Following  the decision of the Court in Krishena Kumar’s case  it was  held that the State can specify a date with effect  from which  the Regulations  framed or  amended conferred the  pensionary benefits shall come into force but the only  condition is that the State cannot pick a date out of its hat and the date has to be prescribed in a reasonable manner having regard to all the facts and circumstances.      In  State   of  Rajasthan  Vs.  Sevanivatra  Karmachari Hitkari Samiti,  1995 (2)  SCC 117, the provisions contained in Rule  268-H  of  Rajasthan  Service  Rules  came  up  for consideration  as   to  whether   the  aforesaid  provisions restructuring the  rights of  Government servants in service on 29.2.1964  can be held to be violative of Article 14. The Court applied  the principle  in Krishena  Kumar’s case  and Indian Ex-Services  League’s case and held that the fixation of 29.2.1964  as the cut-off date with effect from which the new  liberalised  pension  scheme  in  Chapter  XXIII-A  was introduced cannot  be said  to be  arbitrary or violative of Article 14  of the  Constitution. As has been stated earlier for deciding the present controversy it is not necessary for us to  further delve  into the  question as to the extent to which the  decision of  this Court in Nakara’s case has been followed or  explained. But  suffice  it  to  say  that  the contention  of  Mr.  Gupta,  the  learned  counsel  for  the appellant that  the decision  of this Court in Nakara’s case has been given a complete go-by cannot be sustained.      The real  question that arises for consideration in the present two  appeals is  whether it is at all permissible to examine the  validity of  the earlier  Notification  of  the Government  issued  in  the  years  1970  and  1974  without considering the  effect of  Notification dated  September 2, 1985 by  which Notification  even  the  pre-March  31,  1979 retirees  were  extended  the  benefit  of  revised  pension formula. It  appears that State of Rajasthan had liberalised the  pension  scheme  and  introduced  the  revised  pension formula by  Notification dated  21.1.1980 for calculation of pension on  slab basis  in respect  of  Government  Servants retiring on  or after 31st March, 1979. By September 2, 1985 Notification the  Government was  pleased to  order that the benefit of the revised formula for calculation of pension on slab basis would be extended to all pensioners provided they were in  receipt of  pension as  on 1.4.1979 under Rajasthan Service Rules  as amended from time to time. In other words, the principle  of Nakara’s  case was made applicable and the Notification dated  September 2,  1985 was issued. Paragraph 3(1) of  aforesaid  Notification  dated  September  2,  1985 stipulated that the last emolument immediately preceding the date of retirement may be taken into account for the purpose of calculation  of  revised  pension  wherever  the  average emoluments were  earlier computed  on the basis of 36 months emoluments. the  last emolument for this purpose shall be as per rules  in  force  at  the  time  of  retirement  of  the respective Government  servants. Paragraph  3  provided  the mode of  computation of  the pension  of such  pre-March 31, 1979  retirees.   Paragraph  4   mentions  the   classes  of pensioners  to  whom  the  order  will  not  be  applicable. Paragraph 5  provides an ad-hoc formula developed on certain assumptions and a ready reckoner saying the rate of existing pension and revised pension was annexed. It further provides that each  pensioner would  exercise an option as to whether he would  receive the  revised pension on the ad-hoc formula

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or with reference to the actual calculation based on service records and  the option  once exercised  would be final. The ad-hoc  formula   was  devised   as  it   was  thought  that recomputation of  pension on  the basis of actual emoluments which a pensioner was drawing and qualifying service being a time  consuming   process  and   considerable  time  may  be necessary for  locating the  old records  which may  not  be readily  available.   Thus,  it   would   appear,   by   the Notification dated  September 2,  1985,  the  Government  of Rajasthan also  extended the  benefit of the revised pension formula on  slab basis to pre-March 31, 1979 retirees and we see no  infirmity with the said Notification. The High Court in our  considered opinion  without noticing  the  aforesaid Notification and  without examining  the same  unnecessarily examined the  earlier liberalisation  orders and erroneously struck down  the same.  The Notification  dated September 2, 1985 not  having been  challenged and  the  High  Court  not having quashed  the same,  the pre-March  31, 1979  retirees like the  respondents in  both the appeals would be governed by the  same and  depending upon  the question  whether they have exercised  their option  to get  the revised pension on the basis  of ad-hoc  formula or to be computed on the basis of the  last emoluments  drawn and  the number  of years  of service therein,  the computation of pension has to be done. The September  2, 1985  Notification in  the present case is somewhat  similar   to  the   Notification  which  were  for consideration by  this Court  in Indian Ex-Services League’s case referred  to earlier.  In this  view of  the matter the impugned judgment  of the High Court cannot be sustained and we accordingly set aside the same. These appeals are allowed and the  Writ Petitions  filed  by  the  respondents  stands dismissed but in the circumstances there will be no order as to costs.