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PETITIONER: UNION OF INDIA

       Vs.

RESPONDENT: G. VASUDEVAN  PILLAY

DATE OF JUDGMENT08/12/1994

BENCH: HANSARIA B.L. (J) BENCH: HANSARIA B.L. (J) KULDIP SINGH (J)

CITATION:  1995 SCC  (2)  32        JT 1995 (1)   417  1995 SCALE  (1)9

ACT:

HEADNOTE:

JUDGMENT: The Judgment of the Court was delivered by HANSARIA, J.- This conglomeration of appeals (some of  which arise  because of leave already granted and some  came  into existence  because  of leave being granted)  require  us  to decide three questions:               (1)   Whether  the  decision of the  Union  of               India  not  to allow Dearness Relief  (DR)  on               pension  to  the ex-servicemen  on  their  re-               employment  in a civil post is  in  accordance               with law or not;               (2)   Whether  denial of DR on family  pension               on employment of dependants like widows of the               ex-servicemen is justified or not; and               (3)   Reduction of pay equivalent to  enhanced               pension of those exservicemen who were holding               civil  posts on 1-1-1986, following their  re-               employment, is permissible or not. We would examine these questions seriatim. Disallowing of DR on pension on re-employment 2.   To  answer the above question involved in some  of  the appeals,  the background leading to the  aforesaid  decision may be briefly noted.  To start with there was no  provision for   payment   of   DR   to   the   pensioners.     Various representations  were  made  to  the  Third  Pay  Commission seeking  some recommendations in this regard for  protecting the  pension  of the government employees  from  erosion  on account  of  possible  increases in the cost  of  living  in future.  The Commission considered this matter and also  the question regarding the manner in which some relief could  be provided  to the future pensioners.  After having noted  the various  suggestions which the Commission received in  reply to  its  questionnaire,  it  recommended  that  all   future pensioners,  irrespective of the amount of pension drawn  by them,  should be given relief @ 5% of their pension  subject to  a minimum of Rs 5 per mensem and maximum of Rs 25.   The

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Commission  further  recommended that the relief  should  be given as and when there is a 16-point rise in the 12 35 monthly  average  of the All-India  Working  Class  Consumer Price  Index.   This recommendation of  the  Commission  was accepted   by  the  Central  Government  vide   its   Office Memorandum of even number dated 6-4-1974, making the  relief available  to those employees belonging to Classes  11,  III and IV, who retired from service prior to 1-1-1973, as  well as those who retired afterwards. 3.A decision wag, however, taken subsequently not to pay  DR to reemployed pensioners.  This was made applicable to those ex-servicemen who had come to be re-employed in civil posts. Various writ petitions and original applications were  filed in  different legal for a of the country, which came  to  be decided either by upholding the validity of the decision  or by  taking  a  contrary view.  The  parties  who  lost  have preferred these appeals. 4.The learned Additional Solicitor General appearing for the Union  of  India  submits  that  the  decision  merits   our acceptance because of what has been stated in clause (ii) of Rule  55-A of Central Civil Services (Pension) Rules,  1972, as  amended in 1991.  We are, however, of the view that  the decision  cannot  be so supported for the  reason  that  the aforesaid  rules  have application to the persons  who  were members of Central Civil Services.  The ex-servicemen having apparently not been members of such Services, what has  been provided  in Rule 55-A(ii) cannot be invoked to deny  DR  on pension/family  pension  to the ex-servicemen on  their  re- employment. 5.Had  the  aforesaid been the only provision  pressed  into service  to deny DR to the ex-servicemen, we would have  had no difficulty in striking down the decision inasmuch as  the ex-servicemen  having been allowed pension and DR on  it  in accordance with the conditions of service governing  defence personnel,  the  provision contained in the  aforesaid  rule governing service condition of altogether different class of servicemen could not have impinged on their right to get  DR on  the  pension.   Learned  Additional  Solicitor  General, however, advances an alternative submission and the same  is that  there  are  even army instructions  which,  read  with office  memoranda  of Ministry of Finance,  will  show  that Dearness  Relief  on  pension cannot be  paid  even  to  ex- servicemen on their re-employment.  As this point could  not be  brought  home to us well when the cases were  heard,  as relevant  army instructions had not been brought on  record, we,  while  reserving the judgment after  close  of  hearing allowed  filing  of  written submissions,  which  were  done subsequently along with which large number of documents were filed to establish the point urged in the Court. 6.A   perusal  of  the  documents  shows  that  the   Office Memorandum  dated  1-8-1975  of  the  Ministry  of  Finance, Department  of Expenditure, which stated that a  re-employed Central  Government  pensioner is not eligible to  draw  any relief   during  the  period  of  re-employment,  was   made applicable  by the Ministry of Defence vide letter  of  even number  dated  28-10-1975 to Armed Forces  pensioners  also. These  documents  are  pages  17  and  18  of  the   written submission,  in  which  it has also been  stated  that  with formation  of  the  Department of  Pension  and  Pensioners’ Welfare under Ministry of 36 Personnel, Public Grievances and Pension, all orders  issued by  the  Ministry of Finance were made applicable  to  Armed Forces  pensioners as well.  A reference has then been  made

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to Office Memorandum dated 22-4-1987 on the subject of grant of  Dearness Relief to pensioners on the recommendations  of the Fourth Central Pay Commission, sub-para (v) of  Annexure 1  to  which states that Dearness Relief will  be  suspended when the Central Government pensioner is re-employed in  the department/office of the Central Government. 7.The aforesaid shows that dehors what has been laid down in clause  (ii)  of Rule 55-A of the aforesaid  Pension  Rules, there  are  materials on records to show  that  any  person, including  ex-servicemen, would not be entitled to  Dearness Relief   on   pension   on   his   re-employment   to    any department/office of the Central Government. 8.It  has,  however, been strenuously contended  by  learned counsel  appearing  for the re-employed  ex-servicemen  that pension  being  a right (and not a bounty)  available  to  a retired  employee as held in Nakara1 and DR being a part  of pension,  right  to  receive the same could  not  have  been infringed merely because the incumbent sought  re-employment to  take care of the hardship which he might have  otherwise faced after retirement.  To sustain the submission, strength is sought to be derived from the decision of the Kerala High Court  in Narayanan v. Union of India2 in which a  view  has been  taken that the DR became an integral part of  pension, because of which it could not have been discontinued on  re- employment.   As  against this, the view of the  Delhi  High Court  in Civil Writ No. 1699 of 1992 (disposed of on  23-2- 1993)  is  that the DR is different from pension.   For  the disposal of the present cases it is not necessary to express any  opinion  on  this aspect of  the  matter  inasmuch  as, according to us, even if Dearness Relief be an integral part of  pension,  we  do  not  find  any  legal  inhibition   in disallowing  the same in cases of those pensioners  who  get themselves  re-employed after retirement.  In our view  this category of pensioners can rightfully be treated differently from  those who do not get re-employed; and in the  case  of the reemployed pensioners it would be permissible in law  to deny DR on pension inasmuch as the salary to be paid to them on  re-employment takes care of erosion in the value of  the money  because of rise in prices, which lay at the  back  of grant  of  DR, as they get Dearness Allowance on  their  pay which allowance is not available to those who do not get re- employed. 9.We,  therefore, hold that the ex-servicemen  were  rightly debarred  from Dearness Relief on their pensions after  they got  themselves  re-employed  to any civil  post  under  the Government of India. Denial of DR on family pension 10.In some of the cases, we are concerned with the denial of Dearness   Relief  on  family  pension  on   employment   of dependants like widows of the ex-servicemen.  This  decision has to be sustained in view of what has been 1    D.S.  Nakara v. Union of India, (1983) 1 SCC 305:  1983 SCC (L&S) 145: AIR 1983 SC 130 2    1994 (1) KLT 897 37 stated  above  regarding  denial of DR  on  pension  on  re- employment  inasmuch as the official documents  referred  on that point also mention about denial of DR on family pension on employment.  The rationale of this decision is getting of Dearness Allowance by the dependants on their pay, which  is drawn following employment, because of which Dearness Relief on  family pension can justly be denied, as has  been  done. Reduction  of  enhanced  pension  from  pay  of  those   ex- servicemen   who  were  holding  civil  posts  on   1-1-1986 following their re-employment

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11.The  aforesaid reduction, which is the subject-matter  of some appeals, is the fall out of Office Memorandum dated 11- 9-1987  according to which the pay of the ex-servicemen  who were in employment in a civil post as on 1-1-1986  following their re-employment, is required to be reduced by an  amount equivalent  to the enhanced pension made available  pursuant to the report of the Fourth Pay Commission. 12.The  ground  of  attack is that  the  aforesaid  decision violates Articles 14 and 16 of the Constitution inasmuch  as there is no rational basis for classifying the employees for the  aforesaid  purpose  on  the basis  of  their  being  in employment  on 1-1-1986.  This submission has been  advanced because  the reduction of the aforesaid nature has not  been made  in respect of those who have been in employment  since 1-1-1986.   The  additional  affidavit filed  on  behalf  of Respondent  1  in  SLP (C) No. 17456 of  1991  on  25-8-1994 contains some names of those who were re-employed after 1-1- 1986  and  are being paid both the revised pay  and  revised pension.   This  factual position has been admitted  in  the aforesaid  written submissions filed on behalf of the  Union of  India inasmuch as it has been stated in page 9 that  the pensioners  who  are re-employed after  1-1-1986  enjoy  the benefit of revised pay and also revised pension with  effect from 1-1-1986. 13.Reliance   has  been  placed  in  support  of   aforesaid submission  on a two-Judge Bench decision of this Court,  to which  one  of  us (Kuldip Singh, J.)  was  a  party.   That decision  was in the case of TS.  Thiruvengadam v. Secy.  to Govt.  of  India3.   The facts of that  case  are,  however, different  inasmuch as there the Memorandum dated  16-6-1967 stating  that  revised  pensionary benefits  would  be  made available only to those Central Government servants who have been absorbed in public sector undertakings after that  date was  not found to be constitutional because the very  object of   bringing  to  the  existence  the  revised  terms   and conditions  by the memorandum was to protect the  pensionary benefits  which the Central Government servants  had  earned before their absorption into the public sector undertakings. It  was, therefore, held that restricting the  applicability of  the  revised memorandum only to those who  are  absorbed after  coming into force of the same would not  only  defeat the  very object and purpose of the memorandum but would  be contrary to fair play and justice also. 14.Despite  the  aforesaid decision being of no aid  in  the present  cases, we find no logic and basis  for  classifying the re-employed persons on the 3 (1993) 2 SCC 174 38 basis of their being in employment on 1-1-1986.  Indeed,  no justification  has been canvassed before us.   The  decision which  held the field before the impugned memorandum in  not taking note of pension while fixing pay of the ex-servicemen on  re-employment, which was based on good reasons,  had  no good  reason for its reversal, as enhanced pension  was  not confined  to those who were in employment on 1-1-1986.   The impugned  decision  is, therefore, arbitrary and is  hit  by Articles  14  and 16 of the  Constitution.   We,  therefore, declare the same as void. 15.Our  conclusions  on  the three questions  noted  in  the opening  paragraph  are that denial of  Dearness  Relief  on pension/family  pension in cases of those ex-servicemen  who got  re-employment  or whose dependants  got  employment  is legal and just.  The decision to reduce the enhanced pension from pay of those ex-servicemen only who were holding  civil posts on 1-1-1986 following their re-employment is, however,

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unconstitutional. 16.The appeals are disposed of accordingly.  IA Nos. 16, 30- 46  in appeals arising out of SLP (C) Nos. 1585-95  of  1994 stand disposed of.  No order asto costs.