Special Leave Petition Civil No 8461 of 1986
From the Judgment and Order dated 3131986 of the Central Administrative Tribunal New Delhi in Original Appln
No 40 of 1986
356 AND Writ Petition Nos
1285 157586 352361  1165 of 1989
Under Article 32 of the Constitution of India
Petitioners in Person in SLP 8461 of 1986 and WP No 1285 of 1986
Shanti Bhushan Mrs Swaran Mahajan Ms Anuradha Maha jan Mrs Rekha Pandey Jayant Bhushan Badri Das Sharma CV Francis Ramesh Babu Ms Santosh Paul and G Prakash for the Petitioners in WP No 1575 of 1986 352361 and 1165 of 1989
Kapil Sibal Additional Solicitor General RB Datar Mukul Mudgal CV Subba Rao BD Sharma RB Mishra BK Prasad and AM Khanwilkar for the Respondents
NP Saxena for the Intervener
The Judgment of the Court was delivered by KN SAIKIA J
This analogous cluster of five writ petitions and one special leave petition involves a common question of law
The petitioner in Writ Petition No 352 of 1989 is the President of the All India Retired Railwaymen PF Terms Association and the petition has been filed in a representative capacity on behalf of all the members of the Association who retired with Provident Fund benefits
Writ Petition No 361 of 1989 has been filed by three indi vidual retired Railway employees who also retired with Provident Fund benefits
The petitioner in Writ Petition No 1285 of 1986 retired as Block Inspector of Northern Railway on 711968 a non pensionable post
All the petitioners except petitioner No 5 in WP No 1575 of 1986 retired from Railway service high posts
Petitioner No 1 retired as Additional Member Railway Board on 5111960 with Provident Fund benefits
Petitioner No 2 was Member Railway Board and similarly retired on 13 1968 opting for Provident Fund Scheme as at that time the maximum monthly pension was Rs675 only
Petitioner No 3 similarly retired as General Manager on 5121960
Petitioner No 4 retired as Member Staff Railway Board and Ex officio Secretary to the Gov ernment of India on 3061977 opting for the Provident Fund Scheme
Petitioner No 5 also retired on 1961972 opting for the Provident Fund Scheme
Petitioner No 6 retired on 2881962 as Director 357 Health Railway Board opting for Provident Fund Scheme
Petitioner No 7 similarly retired on 1721968 as Director Railway Board
Petitioner No 8 retired as General Manager Indian Railways on 15101966 with the Contributory Provi dent Fund Scheme
The petitioners in Writ Petition No 1165 of 1989are also similarly retired persons
The petitioner in Special Leave Petition Civil No 8461 of 1986 retired as Assistant Auditor with Provident Fund benefits
His claim to switch over to pension after retirement was rejected
The petitioners are thus retired railway employees who were covered by or had opted for the Railway Contributory Provi dent Fund Scheme
It is the petitioners  case that before 1957 the only scheme for retirement benefits in the Railways was the Provident Fund Scheme wherein each employee had to contribute till retirement a portion of his annual income towards the Provident Fund and the Railways as the employer would make a matching contribution thereto
This provident Fund Scheme was replaced in the year 1957 by the Pension Scheme whereunder the Railways would give posterior to his retirement certain monthly pension to each retired employee instead of making prior contribution to his Provident Fund
It is stated that the employees who entered Railway service on or after 141957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme
In so far as the employees who were already in service on 141957 they were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits on condition that the matching Railway contribution already made to their Provident Fund accounts would revert to the Railway on exercise of the option
It is the petitioners  case that till 141957 or even sometime thereafter the pensionary benefits and the alter native Contributory Provident Fund benefits were considered to be more or less equally beneficial wherefore employees opted for either of them
That the benefits of the two were evenly balanced was evidenced by the Railway Board circular dated 1791960 which gave an option to the employees cov ered by the Provident Fund Scheme to switch over to pension scheme and vice versa
Mr Shanti Bhushan the learned counsel for the petitioners in Writ Petition Nos 352 and 361 of 1989 submits that between 1957 and 1987 the pensionary benefits of Railway employees were enhanced on several occasions by different ways such as altering the formula for computing the pension by including dearness allowance in the pay for computing pension by removal of the ceiling on pension and by intro 358 ducing or liberalising the Family Pension Scheme etc
The Railway it is urged had expressed no intention of extend ing the benefits of this liberalised pension to those em ployees who had already retired
At the time when the option was given to choose between pension and Provident Fund the employees had no idea that in future improvements would be made to either of them
However it is stated this Court in DS Nakara and Ors
vs Union of India  held that the benefit of any liberalisation in computation of pension would also have to be extended to those employees who had already retired as they were similarly situated with those who were yet to retire
It is submitted that even though Nakara s case related to Central Government employ ees the Railways also implemented the Judgment and extended the liberalised pension benefits even to those employees who had retired long before the liberalisations concerned were introduced
The decision to implement Nakara s Judgment to Railway employees is admittedly contained in GO No FI 3 EV83 dated 22101983
This has according to the learned counsel given rise to the strange situation namely that while two alternative benefits of provident fund and pension were more or less equal at the time when the petitioners were to make their choice the pensions have thereafter been liberalised manifold to the benefit of the pension retirees whereas no similar benefits have been extended to those who retired opting for Provident Fund hereinafter called the PF retirees 
It is asserted that due to successive liberalisations of pensions the pension retirees derived manifold benefits while the PF retirees  benefits remained stagnant
It is submitted that had the petitioners all of whom are PF retirees known that pensionary benefits might subsequently be so increased they would no doubt have opted for pension instead of Provident FUnd The following twelve notifications given such options are referred to Date of Notification Cut off date chosen 1
170960 010759 2
261062 010962 3
030366 311265 4
130968 010568 5
230774 01 0173 359 6
230879 310379 7 010980 230280 8
041082 310882 9
091182 310182 10 13058 310182 11
180685 310385 12
080587 010186 It may be noted that in case of each option the cut off date was anterior to the respective dates ofannouncement and as a result employees who retired after the cut off date specified date and before the notification date were also made eligible for exercising the option despite the fact that they already retired in the meantime
From the above the main legal point  that arises submits Mr Shanti Bhushan is that the Railways issued the above noti fication giving option to certain PF retirees after the respective cut off dates to opt for the Pension Scheme even after their retirement but the same options were not given to other similarly situated PF retirees beyond the respec tive cut off dates
This it is submitted is clearly dis criminatory and violative of article 14 of the Constitution and deserves to be struck down
It is contended by the petitioners that each of the above notifications including the last one dated 85
1987 had given a fresh option to some of the PF retirees while denying that option to other PF retirees who were identi cally placed but were separated from the rest by the arbi trary cut off date
Each of the notifications specified a date and provided that the PF retirees who retired on or after that date would have fresh option of switching over to the pensionary benefits even though they had already re tired and also had already drawn the entire Provident Fund benefits due to them
It is also contended that the speci fied dates in these notifications having formed the basis of the discrimination between similarly placed PF retirees those were arbitrary and un related to the objects sought to be achieved by giving of the option and were clearly viola tive of article 14 and also of the principle laid down in Nakara s case which according to counsel is that pension retirees could not be divided by such arbitrary cut off 360 dates for the purpose of giving benefitS  to some and not to other similarly situated employees and that by analogy the rule is equally applicable to the Provident Fund retirees as a class
Mr Kapil Sibal the learned Additional Solicitor Gener al refuting the argument submits that each of the options was meant to give the PF retirees after the specified dates option to switch over to Pension Scheme and that each specified date had nexus with the reason for granting the particular option
He relies on the following statements to substantiate his submission
STATEMENT SHOWING PENSION OPTIONS GIVEN TO RAILWAY EMPLOYEES S1
No Option Granted Option Reasons for Rly
Board s validity granting letter No period option date 1 2 3 4 5 1
I Option FE 50RTI6 1457 to 31358 Intro dated 161157 For those duction in service on system 141957 on Rai lways Extensions FP 58PN 16 Extended upto dated 7358 30656 FP58PN 16 Extended upto dated 19658 311258 FP58PN 16 Extended upto dated 241258 31359 FP58PN 16 Extended upto dated 28359 30959 2
II Option PC 60RB22 1759 to 151260 Revi dated 17960 For those in sion service on of Pay Struc ture 2 nd Pay Commiss ion re commenda tion 361 Extensions PC 60RB 22 Extended upto dated 7461 30661 PC60RB 22 Extended upto dated 21161 311261 3
III Option FP62PN 12 1962 to 31363 Consequ dated 261062 For those in ent upon service on 1962 decision to count officiati ng pay for pensionary benefits
IV Option FP63PN1 1164 to 16766 Introduc 40 dated 17164 tion of family pension scheme
V Option FP65PN141 311265 to In pursuance dated 3366 30666 of decision for those to liberalise in service on the family 311265 pension Scheme by Extending it to employ ess who die wh ile in service
VI Option FE III68PN 1568 to 311268 In pursu 12 dated 13988 for those in ance of service on decision 1568 to change the defi nition of pay we
f1568 for the purpose of pensionary benifits
362 Extensions FEIII68PN Extended upto 12 dated 31169 31369 7
VII Option FEIII71PN 15772 to As a result of 13 dated 15772 211072 demandes from for those orgnised in service labour
on 15772 8
VIII Option PC III73PN3 1173 to 22175 Consequet dated 23774 for those to acceptance in service III Pay Commis on 1173 sions  Recommen dations
Extensions PC III73PN3 Extended upto Extended becau dated 18175  30676  se by schedule for 25675 311275 vsrious categories PC III 73PN3 Extended upto were being Pt I 30676 Finalised
dated 161275 PC III73 PN3 Extended upto Pt
I 311276 dated 30676 PC III 73 PN3 Extended upto Pt
I 30676 dated 3177 PC III 73 PN3 Extended upto Pt
I 311277 dated 12777 PC III 73 PN3 Extended upto Pt
I 30678 dated 17478 PC III 73 PN3 Option Exercised Pt
I upto 311278 be dated 20578 considered as valid PC III78 PN3 staff who were in Pt
I service as on 1173  dated 271278 retireddiedquited service during the period from 1173 to 311278 363 9
IX Option FE III
to On account 14 22280 of liberalisa dated 23879 For those in tion of pen service on sion formula 1479 and introduc tion of slab system
Extensions FE III
PN Extended upto 14 dated 1980 22281 10
X Option FE III 82
31882 to 282830n account PN 17 For those in of part of DA dated 41082 service on treated as 31882 pay
Extension FEIII 82
PN Extended upto 17 dated 13583 31883  made applicable from 31182 under letter No FE III dated 91182 11
XI Option FE III 85
31385 to Consequent PN 15 171285 upon DA dated 18685 For those inADA upto service on average price 31385  index at point 568 treated as pay for retire ment benefits
XII Option PC IV8713 1186 to 30987 All CPFbene 881 ficiaries who dated 8587 for those in were in service service on on 1186 and 1186 who are still in service will be deemed to 364 have come over to pen sion Scheme unless they specifically opt out pension scheme and desire to retain the CPF scheme
INTRODUCTION OF PENSION SCHEME OF RAILWAYS AND SUBSEQUENT PENSION OPTION i Introduction of Pension Scheme Pension Scheme was introduced on the Railways on 161157 and was applicable to the following a To all Railway servants who enter service on and after 161157 and b To all non pensionable Railway servants who were in service on 1457 or join Railway Service between 1457 and 161157 and opt for the Pension Scheme
The scheme was made applicable from 1457 because the financial year commences from April each year
This option was extended 4 times from time to time and was valid upto 28359
The extensions were given because there were repre sentations for its extension so that the staff could get time to weigh the merits of the Schemes before they take decision
ii Pension option dated 179
1960 Orders were issued on 281960 notifying Railway Serv ices Authorised Pay Rules 1960
Under this notification new pay scales were introduced for Railway Servants
These new pay scales were effective from 1st July 1959
Fresh option was granted on 17960 to Railway employees who were in service on 1759 to come over to the pension scheme
The last 365 date for exercising the option was 151260
This was ex tended upto 311260 to enable the concerned employees to come to a considered decision whether to retain the PF or opt for the pension scheme
iii Pension Option dated 261062 A decision was taken on 261062 to count the officiat ing pay for the purpose of retirement benefits in case of those who were in service on 1962
Accordingly a fresh option was given to staff to come over to pension scheme on 261062
This option remained open till 31363
iv Pension Option dated 17
1964 As a result of introduction of Family Pension Scheme 1964 which came into force on 111964 orders were issued on 17164 to the effect that all Railway employees who were in service could opt for pension scheme within a period of 6 months
This option was extended upto 16964
v Pension Option dated 3366 Family Pension Scheme was further liberalised for em ployees who die while in service
In view of this improve ment in Pension Scheme pension option under Railway Board s orders dated 3366 was given to employees who were in service on 311265
Since the liberalisation in Family Pension Scheme came into effect from 1st January 1966 the option was open for employees who were in service on 311265 and was open upto 3061966
vi Pension Option dated 13968 The definition of Pay  for pensionary benefits was changed from 1568 through Board s orders dated 13968
In view of this a further option was given on 13968 to Railway employees who were in service on and after 1568 to opt for the Pension Scheme
This option was open upto 311268
This was further extended upto 31369
vii Pension Option dt 157
72 On representation from the recognised labour federations that many employees had not clearly understood the liberali sation introduced in the pension scheme a fresh option was allowed on 15772 to all serving employees
This was open till 211072
366 viii Pension Option dated 237
74 This option was based on similar orders issued by Minis try of Finance
The rationale behind this option was that the recommendations of the 3rd Pay Commission became effec tive from 1173 but pay structure of all employees who were in service on 1173 got altered through orders issued piecemeal from time to time
There were liberalisations in the pension scheme also in the form of increase in the amount of gratuity as also introduction of the concept of Dearness Relief made available to the pensioners
This option was made available to all employees who were in service on 1173
Employees who had retired earlier did not get affected in any way by the recommendations of the 3rd Pay Commission and were accordingly not given this option to come over to Pension Scheme
This option was available upto 22175 a period of 6 months
The option given vide letter of 23774 was extended from time to time till 311278
The reason why this exten sion had to be allowed was that the revised pay scales recommended by the Pay Commission for many of the categories could not be finalised and notified
Till such time the revised pay scale admissible to each category was made known it was impossible for the concerned staff to assess the benefit admissible for opting for the revised scale as also for the pension option
The pension option had there fore to be extended from time to time in this manner
The letters authorising extension of the date of option were not very clearly worded with the result that the pen sion option during the periods of extension was granted even to those who had retired before such extension became admissible but who were in service on 1173
The clarifica tion was accordingly issued to all the Railways stating that the subsequent orders extending the date of option were applicable to serving employees only but the cases already decided otherwise may be treated as closed and need not be opened again
It was subsequently represented by the organised labour that the options actually exercised upto 311278 should be treated valid even though such cases may not have been decided by that date
This was agreed to and orders issued accordingly
ix Pension Option dated 238
79 A liberalised formula and slab system for calculation of pension 367 effective from 31379 was notified by Railway Board on 1679
Accordingly orders were issued on 23879 allowing pension option to those Railway employees who were in serv ice on 31379
This option was initially open till 22280 but was extended subsequently to enable wider participation upto 2221981
x Pension Option dated 4
1082 Orders were issued by Board on 30482 ordering that a portion of Dearness Allowance will be treated as pay for retirement benefits wef 31182
Accordingly a fresh option was allowed on 41082 which could be exercised by Railway employees who were in service on 31182
This option was available upto 31883
xi Pension Option dated 18685 Orders were issued by Railway Board on 17585 merging Dearness Allowance to the price index upto 568 with pay for the purpose of retirement benefits and raising the ceiling of DCRG from 36000 to 50000 wef 31385
Accordingly another option was granted to the Railway employees who were in service on 31385
This option was available for a period of 6 months ie upto 17121985
xii Pension Option dated 8587 Consequent upon acceptance of the recommendations of the 4th Pay Commission the revised pay scales were notified on 19986 and 14387 effective from 111986
Accordingly another pension option was given to the Railway employees who were in service on 1186 vide orders of 8587
Under these orders those who did not specifically opt out of pension scheme by 171287 would he automatically deemed to have opted for the pension scheme
We may now examine these options
The Railway Board s letter No FE 50 RTI6 dated November 16 1967 introduced the pension scheme for railway servants
It said that the President had been pleased to decide that the pension rules as liberalised vide Railway Board s Memo No E 48 OPC 208 dated 871950 as amended or clarified from time to time should apply a to all railway servants who entered serv ice on or after issue of that letter and b to all non pensionable railway servants who were in service on 1457 or have joined railway service between that date and the date of issue of the order The Railway servants referred to in para b were required 368 to exercise an unconditional and unambiguous option on the prescribed form on or before 3131958 electing for the pensionary benefits or retaining their existing retirement benefits under the State Railway Provident Fund Rules
It further said that any such employee from whom an option form prescribed for the employee s option was not received within the above time limit or whose option was incomplete or conditional or ambiguous shall be deemed to have opted for the pensionary benefits and if any such employee had died by that date or on or after 1457 without exercising option for the pensionary scheme his dues would be paid on the provident fund system
The period of validity of this option was first extended upto 30658 311258 31359 and lastly upto 30959
There could therefore be no doubt that those who did not opt for the pension scheme had ample opportunity to choose between the two
The second option was given by the Board s letter No PC 60 RB22 dated 17960 to elect the retirement benefits under the Provident Fund Rules or the Pension Rules
All Railway servants who were in non pensionable service on 151157 prior to the introduction of the pension scheme on the Railways and who were still in service including IPR on 1759 were granted this option to have their retirement benefits regulated by the State Railway Provident Fund Rules or the Railway Pension Rules
Every eligible railway servant was given the option to change over from PF benefits to pensionary benefits or vice versa
It clearly said that Railway servants who did not exercise the option would continue to be eligible for the PF benefits or pensionary benefits as the case might be for which he was already eligible
The option was subject to the special conditions stated therein
Where the Railway servants opted for pensionary benefits the part of the Government contribution together with interest thereon andor special contribution to the Railway servants  PF account had already been paid the excess of the amount over the gratuity due under the Pension Rules should be refunded to the Government
It clearly said that the option once exercised shall however be final and irrevocable irrespective of the decision taken on that issue
 If a Railway servant opted for PF benefits and if the payment of pensionary benefits had already commenced further payment would be stopped and his PF account would be reconstructed as if he had never opted for pensionary benefits
The period of validity of option was extended upto 30661 and then upto 311261
This letter clearly indi cated the reason for giving this option as under the re vised pay structure introduced from 1759 the bulk or whole of the DA previously payable 369 have been absorbed into pay and a number of changes are also being made in the rules regarding retirement benefits
 In pursuance of the 3rd Pay Commission Report Govern ment decided to give opportunity to opt for liberalised Railway Pension Rules including benefits of Family Pension Scheme 1964 to Railway employees who had retained the contributory PF Rules and who were in service on 3131979 and retired on or after that date provided they gave in writing their option within six months
Employees who had retired under the said State Railway PF Contributory Rules their option would be valid if they refunded the entire Government contribution and the excess if any of special contribution to PF received by them over DCRG due to them under Pension Rules
In case of deceased employ ees request could be made for option by valid nominee and in the absence
of him by legal guardian
Thereafter a number of representations were made and the Government extended the time for giving option for adopting Pension Scheme in place of contributory PF Scheme
As a result of treatment of a portion of ADA as pay for purpose of retirement benefits and consequently enhancement in pensionary benefits the date for giving option was further extended by 2821983 only for these employees who were in service on 3181982 and who quittedretired on or after that date
The date of option was further extended from time to time
Keeping in view the treatment of entire DA upto the price index line of 568 as pay for retirement benefit with effect from 31385 removal of ceiling limit of Rs 1500 on pension and raising of ceiling of DCRG from Rs36000 to Rs50000 the date of option for employees who were in service on 31385 and onwards and still governed by SRPF Contributory Rules was further extended upto 17121985 provided the amount of death cum retirement gratuity and the excess if any of special contribution over the D CRG was refunded
The 12th option was as under
Government of IndiaBharat Sarkar Ministry of RailwaysRail Mantralaya Railway Board Machine No PC IV8713881 No PC IV87Imp
PW 1 370 The General Managers RBBIS
No 11687 All Indian Railways New Delhi dated 8th May 1987 Production Units etc
as per mailing list
Subject Change over of Railway employees from the SRPF Contributory Scheme to Pension Scheme Implementation of the recommendation of the IV Central Pay Commission regard ing
The Railway employees who are covered by the SRPF Contributory Scheme CPF Scheme have been given repeated options in the past to come over the Pension Scheme
Howev er some Railway employees still continue under the CPF Scheme
The Fourth Central Pay Commission has now recommend ed that all CPF beneficiaries in service on January 1 1986 should be deemed to have come over to the Pension Scheme on that date unless they specifically opt out to continue under the GPF Scheme
After careful consideration the President is pleased to decide that the said recommendation shall be accepted and implemented in the manner hereinafter indicated
All CPF beneficiaries who were in service on 1186 and who are still in service on the date of issue of these orders will be deemed to have come over to the Pension Scheme  32
The employees of the category mentioned above will however have an option to continue under the CPF Scheme if they so desire
The option will have to be exercised and conveyed to the concerned Head of Office by 30987 in the form enclosed if the employees wish to continue under the GPF Scheme
1f no option is received by the Head of Office by the above date the employees will be deemed to have come over to the Pension Scheme
The CPF beneficiaries who were in service on 111986 but have since retired and in whose cases retire ment benefits have also been paid under the CPF Scheme will have an option to have their retirement benefits calculated under the Pension Scheme provided they refund 371 to the Government the Government contribution to the Con tributory Provident Fund and the interest thereon drawn by them at the time of settlement of the CPF Account
Such option shall be exercised latest by 309
CPF beneficiaries who were in service on 111986 but were since retired and in whose cases the CPF Account has not already been paid will be allowed retirement benefits as if they were borne on pensionable establishments unless they specifically opt by 30987 to have their retirement benefits settled under the CPF Scheme
Cases of CPF beneficiaries who were in service on 1186 but have since died either before retirement or after retirement will be settled in accordance with para 33
or 34 above as the case may be
Options in such cases will be exercised latest by 30987 by the widowwidower and in the absence of widowwidower by the eldest surviv ing member of the family who would have otherwise been eligible to family pension under the Family Pension Scheme if such Scheme were applicable
The option once exercised shall be final
37     41      4  2 In the case of employees referred to above who come over or are deemed to have come over to the Pension Scheme the Government s contribution to the CPF together with the interest thereon credited to the CPF Account of the employee will be resumed by the Government
Special contribution to Provident Fund if already paid in these cases will be adjusted against the death retirement Gratuity payable under these orders
The employee s contri bution together with the interest thereon at his credit in the CPF account will be transferred to the CRPF Non Con tributory Account to be allotted to him on his coming over to the Pension Scheme
43        5 A proposal to grant ex gratia payment to the benefici aries who retired prior to 111986 and to the 372 families of CPF beneficiaries who died prior to 111986 on the basis of the recommendations of the Fourth Central Pay Commission is separately under consideration of the Govern ment
The said ex gratia payment if and when sanctioned will not be admissible to the employees or their families who opt to continue under the CPF Scheme from 111986 onward
6     G Chatterjee Executive Director Pay Commission Railway Board
 The learned Additional Solicitor General stated that each option was given for stated reasons related to the options
On each occasion time was given not only to the persons in service on the date of the Railway Board s letter but also to persons who were in service till the stated anterior date but had retired in the meantime
The period of validity of option was extended in all the options except Nos
3rd 4th 5th and 7th
We find the statements to have been substantiated by facts
The cut off dates were not arbitrarily chosen but had nexus with the purpose for which the option was given
Mr Shanti Bhushan however submits that applying the law laid down in Nakara s case this Court should simply strike down or read down paragraph 81 of the above 12th option dated 85
That paragraph said that aH CPF benefi ciaries who were in service on 1186 and who were still in service on the date of issue of the order would be deemed to have come over to the pension scheme
It is submitted that once this limiting requirement is removed all the CPF beneficiaries shall be eligible and will be deemed to have come over to the pension scheme
As the basis or justification for striking or reading down paragraph 31 on Nakara s ratio it is urged that all the Railway employees numbering about 22 lakhs comprising 1622000 in service and about 6 lakhs pensioners constitute one family and must be treated as one class as the Govern ment s obligation to look after the retired Railway employ ees both under the pension scheme and the provident fund scheme being the same they could not be treated different ly
Any differential treatment will be discriminatory and violative of Article 14 of the Constitution of India
In Nalcara s case the date arbitrarily 373 chosen was struck down and as a result the revised formula for computing pension was made applicable to all the retired pensioners
The same principle it is urged has to be extended to the provident fund retires also otherwise there would be discrimination
It is stated that though at the time of choosing between provident fund and pension scheme both the alternative appeared to be more or less equal and the retired provident funders took their lump sum yet subse quently stage by stage the pensioners benefits were in creased in such ways and to such extent that it became more and more discriminatory against the provident funders old and new
It was because of this discrimination that aucces sive options were given by the Railway Board for the provi dent funders to become pensioners
Hence the submission that this limitation must go and all the provident funders must be deemed to have become pensioners subject to the condition that the Government contribution received by them along with interest thereon is refunded or adjusted
Obviously this gives no importance to the condition in the notifications that option once exercised shall be final and binding and to the fact that in each option a cut off date was there relat ed to the purpose of giving that option Admittedly the entire case of the petitioners is sought to be based on the decision in Nakara s case
Mr Kapil Sibal submits that the petitioners  basic assumption is erroneous inasmuch as Nakara s case did not hold that when ever there was a liberalisation of pension all other pension retirees and PF retirees must be given option and that the older system of pension or Provident Fund was always insuf ficient
According to counsel the only question decided in Nakara can be gathered from the following paragraph of the report at page 172 Do pensioners entitled to receive superannuation or retir ing pension under Central Civil Services Pension Rules 1972   1972 Rules  for short form a class as a whole Is the date of retirement a relevant consideration for eligi bility when a revised formula for computation of pension is ushered in and made effective from a specified date Would differential treatment to pensioners related to the date of retirement qua the revised formula for computation of pen sion attract Article 14 of the Constitution and the element of discrimination liable to be declared unconstitutional as being violative of article 14 The basic question of law that has to be decided therefore is what was the ratio decidendi in Nakara s case and how far that would 374 be applicable to the case of the PF retirees
The doctrine of precedent that is being bound by a previous decision is limited to the decision itself and as to what is necessarily involved in it
It does not mean that this Court is bound by the various reasons given in support of it especially when they contain propositions wider than the case itself required
 This was what Lord Selborne said in Caledonian Railway Co vs Walker s Trustees and Lord Halsbury in Quinn vs Leathem  502
Sir Frederick Pollock has also said Judicial authority belongs not to the exact words used in this or that judgment nor even to all the reasons given but only to the principles accepted and applied as necessary grounds of the decision In other words the enunciation of the reason or princi ple upon which a question before a court has been decided is along binding as a precedent
The ratio decidendi is the underlying principle namely the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particu lar case which gives rise to the decision
The ratio deci dendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre existing rule of law either statutory or judge made and a minor premise consisting of the material facts of the case under immediate considera tion
If it is not clear it is not the duty of the court to spell it out with difficulty in order to be bound by it
In the words of Halsbury 4th Edn Vol 26 para 573 The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi as ascertained on a consideration of the judgment in relation to the sub ject matter of the decision which alone has the force of law and which when it is clear it is not part of a tribu nal s duty to spell out with difficulty a ratio decidendi in order to bound by it and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case
If more rea sons than one are given by a tribunal for its judgment all are taken as forming the ratio decidendi
 The question then is has the court said in Nakara that what was applicable to pensioners vis a vis liberalisation of pension was to be equally applicable to PF retirees In Nakara s case petitioners 1 and 375 2 were retired pensioners of the Central Government the first being a civil servant and the second being a member of the service personnel of the Armed Forces
The third peti tioner was a society registered under the Societies Regis tration Act 1860 formed to ventilate the legitimate public problems and was espousing the cause of the pensioners all over the country
The first petitioner retired in 1972 and on computation his pension worked out at Rs675 per month and with dearness allowance he was drawing monthly pension of Rs935
The second petitioner retired at or about that time and at the relevant time was in receipt of a pension plus dearness relief of Rs 981
The Union of India had been revising and liberalising the pension rules from time to time
The Central Government servants on retirement from service were entitled to receive pension under the Central Civil Services Pension Rules 1972
Successive Central Pay Commissions recommended en hancement of pension in different ways
The first Central Pay Commission 1946 47 recommended raising of the retire ment age to 58 years and the scale of pension to 180 of the emoluments of each year of service subject to a limit 3580 with a ceiling of Rs8000 per year for 35 years of service
The Second Central Pay Commission 1957 58 did not recom mend any increase in the non contributory retirement bene fits
The Administrative Reforms Commissioner ARC 1956 took note of the fact that the cost of living had shot up and correspondingly the possibility of savings had gone down and accordingly recommended that the quantum of pension may be raised to 36 of the emoluments of the last three years of service from existing 38 and the ceiling to be raised from Rs675 per month to Rs 1000 per month
Before the Government acted upon it the Third Central Pay Commission did not examine the question of relief to pensioners because of its terms and recommended no change in the pension formu la except that the existing ceiling to be raised from Rs675 to Rs 1000 per month and the maximum gratuity should be raised from Rs24000 to Rs30000
On May 25 1979 Government of India Ministry of Finance issued Office Memorandum No F 193 EV 79 whereby the formula for computation of pension was liberalised but made it applicable
to Government servants who were in service on March 31 1979 and retired from service on or after that date
The formula introduced a slab system for computation of pension which was applicable to employees governed by the 1972 rules retiring on or after the speci fied date
The pension for the service personnel which would include Army Navy and Air Force staff was governed by the relevant regulations
By 376 the Memorandum of the Ministry of Defence bearing No B40725 AGPS4 C1816AD PensionServices dated September 28 1979 the liberalised pension formula introduced for the government servants governed by the 1972 rules was extended to the armed forces personnel subject to the limitations set out in the memorandum with a condition that the new rules of pension would be effective from April 1 1979 and may be applicable to all service officers who become became non effective on or after that date
This liberalised pension formula was to be applicable prospectively to those who retired on or after March 31 1979 in case of government servants governed by 1972 rules and in respect of defence personnel those who becamebecome non effective on or after April 1 1979
Consequently those who retired prior to the specified date would not be entitled to the benefits of the liberalised pension formula
On the above facts the petitioners  therein contended that this Court would consider the raison d etre for payment of pension namely whether it was paid for past satisfacto ry service rendered and to avoid destitution in old age as well as a social welfare or socioeconomic justice measure the differential treatment for those who retired prior to a certain date and those retiring subsequently the choice of the date being wholly arbitrary would amount to discrimina tion and violative of article 14 and whether the classifica tion based on fortuitous circumstance of retirement before or subsequent to a date fixing of which was not shown to be related to any rational principle would be equally viola tive of article 14
It was contended that pensioners of the Central Government formed a class for the purpose of pen sionary benefits and there could not be mini classification within the class designated as pensioners
The Court considered the nature and purposes of pension in the context of a welfare State and found that though unquestionably pension was linked to length of service and the last pay drawn which did not imply the pay on the last day of retirement but average emoluments of 36 months serv ice which under the liberalised scheme was reduced to aver age emoluments of 10 months preceding the date which was expected to be higher than that of the higher average emolu ments of 36 months coupled with the slab system for compu tation amounted to liberalisation of pension in different ways
If the pensioners who retired prior to the specified date had to earn pension on the average emoluments of 36 months  salary just preceding the date of retirement natu rally the average would be lower and they would be doubly hit because the slab system newly introduced was not avail able to them 377 while the ceiling was at a lower level and thus they would suffer triple jeopardy viz lower average emoluments absence of slab system and lower ceiling
 This Court therefore wanted to know what was the purpose in prescrib ing the specified date vertically dividing the pensioners between those who retired prior to the specified date and those who retired subsequent to that date and why was the pension scheme liberalised
Receiving no satisfactory reply the Court observed Both the impugned memoranda do not spell out the raison d etre for liberalising the pension formula
In the affida vit in opposition by Shri SN Mathut it has been stated that the liberalisation of pension of retiring Government servants was decided by the Government in view of the per sistent demand of the Central Government employees repre sented in the scheme of Joint Consultative Machinery
This would clearly imply that the pre liberalised pension scheme did not provide adequate protection in old age and that a further liberalisation was necessary as a measure of econom ic security
When Government favorably responded to the demand it thereby ipso facto conceded that there was a larger available national cake part of which could be uti lised for providing higher security to erstwhile government servants who would retire
The Government also took note of the fact that Continuous upward movement of the cost of living index as a sequel of inflationary inputs and dimin ishing purchasing power of rupee necessitated upward revi sion of pension
If this be the underlying intendment of liberalisation of pension scheme can any one be bold enough to assert that it was good enough only for those who would retire subsequent to the specified date but those who had already retired did not suffer the pangs of rising prices and falling purchasing power of the rupee The Court then proceeded to examine whether there was any rationale behind the eligibility qualification and finding no rationale concluded Therefore this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed it would be discriminatory 378 The Court accordingly concluded that the division was thus arbitrary and unprincipled and therefore the classifi cation did not stand the test of article 14
It was also arbi trary as the Court did not find a single acceptable or persuasive reason for this division and this arbitrary action violated the guarantee of article 14
The Court observed that the pension scheme including the liberalised scheme to the Government employees was non contributory in  character
The payment of pension was a statutory liability undertaken by the Government and whatever became due and payable was 2budgeted for
The Court specifically observed One could have appreciated this line of reasoning where there is a contributory scheme and a pension fund from which alone pension is disbursed
That being not the case there is no question of pensioners dividing the pension fund which if more persons are admitted to the scheme would pro rata affect the share
Therefore there is no question of dividing the pension fund
Pension is a liability incurred and has to be provided for in the budget
 The Court further observed If from the impugned memoranda the event of being in serv ice and retiring subsequent to specified date is served all pensioners would be governed by the liberalised pension scheme
The pension will have to be recomputed in accordance with the provisions of the liberalised pension scheme as salaries were required to be recomputed in accordance with the recommendation of the Third Pay Commission but becoming operative from the specified date
It does therefore appear that the reading down of impugned memoranda by severing the objectionable portion would not render the liberalised pension scheme vague unenforceable or unworkable The Court in Nakara was not satisfied with the explana tion that the legislation had defined the class with clarity and precision and it would not be the function of this Court to enlarge the class
The Court held in paragraph 65 of the report With the expanding horizons of socio economic justice the Socialist Republic and welfare State which we endeavour to set up and largely influenced by the fact that 379 the old men who retired when emoluments were comparatively low and are exposed to vagaries of continuously rising prices the falling value of the rupee consequent upon inflationary inputs we are satisfied that by introducing an arbitrary eligibility criterion being in service and retiring subsequent to the specified date  for being eligi ble for the liberalised pension scheme and thereby dividing a homogeneous class the classification being not based on any discernible rational principle and having been found wholly unrelated to the objects sought to be achieved by grant of liberalised pension and the eligibility criteria devised being thoroughly arbitrary we are of the view that the eligibility for liberalised pension scheme of being in service on the specified date and retiring subsequent to that date  in impugned memoranda Exs
P 1 and P 2 violates Article 14 and is unconstitutional and is struck down
Both the memoranda shall be enforced and implemented as read down as under In other words exhibit P 1 the words that in respect of the government servants who were in service on March 31 1979 and retiring from service on or after that date  and in exhibit P 2 the words the new rates of pension are effective from April 1 1979 and will be applicable to all service officers who becamebecome non effective on or after that date  are unconstitutional and are struck down with this specifi cation that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative to all pensioners governed by 1972 Rules irrespec tive of the date of retirement
Omitting the unconstitution al part it is declared that all pensioners governed by the 1972 Rules and Army Pension Regulations shall be entitled to pension as computed under the liberalised pension scheme from the specified date irrespective of the date of retire ment
Arrears of pension prior to the specified date as per fresh computation is not admissible
 Thus the Court treated the pension retirees only as a homogeneous class
The PF retirees were not in mind
The Court also clearly observed that while so reading down it was not dealing with any fund 380 and there was no question of the same cake being divided amongst larger number of the pensioners than would have been under the notification with respect to the specified date
All the pensioners governed by the 1972 Rules were treated as a class because payment of pension was a continuing obligation on the part of the State till the death of each of the pensioners and unlike the case of Contributory Provident Fund there was no question of a fund in libera lising pension
The argument of Mr Shanti Bhushan is that the State s obligation towards pension retirees is the same as that towards PF retirees
That may be morally so
But that was not the ratio decidendi of Nakara
Legislation has not said so
To say so legally would amount to legislation by enlarg ing the circumference of the obligation and converting a moral obligation into a legal obligation
It reminds us of the distinction between law and morality and limits which separate morals from legislation
Bentham in his Theory of Legislation Chapter XII page 60 said Morality in general is the art of directing the actions of men in such a way as to produce the greatest possible sum of good
Legislation ought to have precisely the same object
But although these two arts or rather sciences have the same end they differ greatly in extent
All actions wheth er public or private fall under the jurisdiction of morals
It is a guide which leads the individual as it were by the hand through all the details of his life all his relations with his fellows
Legislation cannot do this and if it could it ought not to exercise a continual interference and dictation over the conduct of men
Morality commands each individual to do all that is advantageous to the community his own personal advantage included
But there are many acts useful to the community which legislation ought not to command
There are also many injurious actions which it ought not to forbid although morality does so
In a word legislation has the same centre with morals but it has not the same circumference
 In Nakara it was never held that both the pension reti rees and the PF retirees formed a homogeneous class and that any further classification among them would be viola tive of article 14
On the other hand the Court clearly ob served that it was not dealing with the problem of a fund
The Railway Contributory Provident Fund is by 381 definition a fund
Besides the Government s obligation towards an employee under CPF Scheme to give the matching contribution begins as soon as his account is opened and ends with his retirement when his rights qua the Government in respect of the Provident Fund is finally crystallized and thereafter no statutory obligation continues
Whether there still remained a moral obligation is a different matter
On the other hand under the Pension Scheme the Government s obligation does not begin until the employee retires when only it begins and it continues till the death of the em ployee
Thus on the retirement of an employee Government s legal obligation under the Provident Fund account ends while under the Pension Scheme it begins
The rules governing the Provident Fund and its contribution are entirely different from the rules governing pension
It would not therefore be reasonable to argue that what is applicable to the pen sion retirees must also equally be applicable to PF reti rees
This being the legal position the rights of each individual PF retiree finally crystallized on his retire ment whereafter no continuing obligation remained while on the other hand as regards Pension retirees the obligation continued till their death
The continuing obligation of the State in respect of pension retirees is adversely affected by fall in rupee value and rising prices which considering the corpus already received by the PF retirees they would not be so adversely affected ipso facto
It cannot there fore be said that it was the ratio decidendi in Nakara that the State s obligation towards its PF retirees must be the same as that towards the pension retirees An imaginary definition of obligation to include all the Government retirees in a class was not decided and could not form the basis for any classification for the purpose of this case
Nakara cannot therefore be an authority for this case
Stare decisis et non guieta movere
To adhere to prece dent and not to unsettle things which are settled
But it applies to litigated facts and necessarily decided ques tions
Apart from article 141 of the Constitution of India the policy of courts is to stand by precedent and not to disturb settled point
When court has once laid down a principle of law as applicable to certain state of facts it will adhere to that principle and apply it to all future cases where facts are substantially the same
A deliberate and solemn decision of court made after argument on question of law fairly arising in the case and necessary to its determina tion is an authority or binding precedent in the same court or in other courts of equal or lower rank in subse quent cases where the very point is again in controversy unless there are occasions when departure is rendered neces sary to vindicate plain obvious principles of law and remedy continued injustice
It should be invariably applied 382 and should not ordinarily be departed from where decision is of long standing and rights have been acquired under it unless considerations of public policy demand it
But in Nakara it was never required to be decided that all the retirees formed a class and no further classification was permissible
The next argument of the petitioners is that the option given to the PF employees to switch over to the pension scheme with effect from a specified cut off date is bad as violative of article 14 of the Constitution for the same rea sons for which in Nakara the notification were read down
We have extracted the 12th option letter
This argument is fallacious in view of the fact that while in case of pension retirees who are alive the Government has a continuing obligation and if one is affected by dearness the others may also be similarly affected
In case of PF retirees each one s rights having finally crystallized on the date of retirement and receipt of PF benefits and there being no continuing obligation thereafter they could not be treated at par with the living pensioners
How the corpus after retirement of a PF retiree was affected or benefitted by prices and interest rise was not kept any track of by the Railways
It appears in each of the cases of option the specified date bore a definite nexus to the objects sought to be achieved by giving of the option
Option once exer cised was told to have been final
Options were exercisable vice versa
It is clarified by Mr Kapil Sibal that the specified date has been fixed in relation to the reason for giving the option and only the employees who retired after the specified date and before and after the date of notifi cation were made eligible
This submission appears to have been substantiated by what has been stated by the successive Pay Commissions
It would also appear that corresponding concomitant benefits were also granted to the Provident Fund holders
There was therefore no discrimination and the question of striking down or reading down clause 31 of the 12th Option does not arise
It would also appear that most of the petitioners before their filing these petitions had more than one opportunities to switch over to the Pension Scheme which they did not exercise
Some again opted for PF Scheme from the Pension Scheme
Mr Shanti Bhushan then submits that the same relief as is being canvassed by the petitioners herein has been upheld by this Hon ble Court by dismissing the SLP No 597388 of the Government in the case of Union of India vs Ghansham Das and Ors
against the Judgment of the Central Administrative Tribunal Bombay
The Tribunal 383 had held the same notifications as were impugned herein to be discriminatory and had directed that a flesh option be given to all PF retirees subject to refund of the Govern ment contribution to Provident Fund received by adjusting it against their pensionary rights
Similarly it is submitted in a Rajasthan case both the single Judge and the Division Bench have held that all the retirees would have to be given a flesh option as the notifications giving the option only to some retirees are clearly discriminatory
This view has it is urged again been upheld by this Hon ble Court by dismissing the Special Leave Petition No 719287 of the Government by order dated 11887
We have perused the judgments
The Central Administra tive Tribunal in Transferred Application No 2787 was dealing with the case of the petitioners  right to revise options during the period from 1469 to 14772 as both the petitioners retired during that period
The tribunal ob served that no explanation was given to it nor could it find any such explanation
In State of Rajasthan vs Retired CPF Holder Association Jodhpur the erstwhile employees of erstwhile Princely State of Jodhpur who after becoming Government servants opted Contributory Provident Fund wanted to be given option to switch over to Pension Scheme were directed to be allowed to do so by the Rajasthan High Court relying on Nakara which was also followed in Union of India vs Bidhubhushan Malik   subject matter of which was High Court Judges  pension and as such both are distinguishable on facts
That the Pension Scheme and the PF Scheme are struc turally different is also the view of the Central Pay Com missions and hence ex gratia benefits have been recommended which may be suitably increased
In the report of the Third Central Pay Commission 1973 Vol 4 at page 49 dealing with State Railway Provident Fund it was said 49
Both gazetted and non gazetted Railway employees with a service of not less than 15 years who are governed by the State Railway Provident Fund Scheme are at present allowed a special contribution at the rate of 14th of a month s pay for each completed 6 monthly period of service but not exceeding 15 months  pay or Rs35000 whichever is less
We have been informed by the Railway Board that for such em ployees the Government contribution and the special contri bution to the Provident Fund 384 together constitute the retirement benefits which in other civil departments are given in the shape of pension and death cum retirement gratuity
Accordingly when pensionery benefits to the other civil employees were im proved in 1956 and 1957 the maximum of the special contri bution to the provident fund for the Railway employees was also increased from Rs25000 to Rs35000
We have not examined whether and to what extent any further increase in this contribution should be made consequent upon the en hancement of the maximum pension and gratuity being recom mended by us for pensionable employees
The Government may decide the same as they deem fit
 In the Report of the Fourth Central Pay Commission in Chapter 9 the Commission has discussed the State Railway Provident Fund Scheme including Contributory Provident Fund Scheme
In para 91 of the report the Commission said that the employees who joined railways prior to November 16 1957 and did not opt for the pension scheme were also covered under the CPF Scheme known as State Railways Provident Fund Scheme SRPF
About 50000 employees were stated to be covered under the CPF Scheme of which the majority were in the railways
The number of employees who retired under the CPF and SRPF schemes were 120 lakhs
Under the CPF scheme every employee was required to subscribe a minimum of 8 13 per cent of his reckonable emoluments to be credited to the fund
The Government makes a matching contribution
Both the contributions earned interest at a rate specified by the Government from time to time
On retirement employ ees governed under the scheme was paid his contribution the contribution made by the Government and the interest earned on the total amount
In para 93 of the Report it was stated The SRPF scheme in the railways was replaced by the pension scheme as applicable to other Central Government employees in November 1957 and those employees who were in service on April 1 1957 and were governed by the scheme were given an option to come under the pension scheme
Whenever changes occurred in the pension structure for the Central Government employees an option was given to railway employees still covered by the scheme
Such options have been given on eleven occasions in the 385 past and the last such option was valid upto December 1985
 Comparing the advantage and disadvantage of the schemes the Commission said While pension scheme has been improved enlarged and lib eralised from time to time there has been no similar im provement in the CPF scheme excepting through improvement of rates of interest which were modified from 7 per cent on 1974 to 9 per cent in 1983 84 to 10 per cent in 1984 85 and to 12 per cent in 1985 86
While those governed by the pension scheme are entitled to receive dearness relief sanctioned from time to time to compensate for increase in the cost of living those under the CPF scheme were not entitled to such relief
The employees governed by the CPF scheme are also not entitled to the family pension available to those governed by the pension scheme
The matching gov ernment contribution in the case of CPF employees is paid for the full period of service the restriction of 33 years for those governed by pension scheme does not apply in their case
Those who have retired under the CPF scheme have a corpus yielding regular return
In the case of railway employees special contribution to PF is paid at the time of retirement equivalent to half a month s salary for each completed year of service subject to a maximum of 16 months  salary or Rs60000 whichever is less
The amount of special contribution has been raised from time to time as and when the limit on death cum retirement gratuity was changed
 In para 95 of the Report as to ex gratia alternative it is stated As the pension scheme was introduced on the railways m  1957 those who retired earlier did not have an opportunity to opt for pension
It was therefore decided to give some ex gratia payment to them in consideration of the fact that the retirement benefits were lower than what they would have received if they had retired under the pension scheme
Since this applied mainly to the low paid employees the ex gratia payment ranging from Rs 15 to Rs2250 per mensem was sanctioned to those drawing pay upto Rs500 per month
They were also given relief on a 386 graded scale subsequently
The amount of ex gratia payment together with the relief now ranges from Rs 170 to Rs 283 per mensem
 In para 96 the Commission said that the PF and pension schemes are structurally different
Accordingly alternative ex gratia reliefs were suggested We have received a number of suggestions from individuals associations and other organisations in respect of the CPF scheme
It has been stated that the objective of both the schemes viz pension scheme and the CPF scheme being the same there should not be differences in the matter of retirement benefits between the pensioners and the benefici aries of the CPF
It has been urged that the liberalisation in the pension scheme needs to be appropriately extended to the beneficiaries under the CPF scheme
Since the schemes are structurally different equality of benefits under the two schemes is not feasible
We are however of the view that the CPF beneficiaries who have retired on low scales of pay deserve some measure of relief
We according recommend that all the CPF beneficiaries who have retired prior to March 31 1985 with a basic pay upto Rs500 per mensem may be given an ex gratia payment of Rs300 per mensem which will be in addition to the benefits already received by them under the CPF scheme
The ex gratia payments and the period ic increases already received by those who retired on pay upto Rs500 may be so adjusted that the total ex gratia amount is not less than Rs300
We further recommend that ex gratia amount of Rs300 per mensem may be reviewed as and when dearness relief is sanctioned to pensioners 97
Railways have suggested grant of ex gratia payment to the widows and dependent children of deceased employees covered by CPF scheme at 50 per cent of the rate for ex gratia payment
We agree and recommend accordingly for those getting pay upto Rs500 per mensem
The eligibility of widow and minor children for the purposes of this relief may be same as laid down under the pension rules 98
In so far as the CPF beneficiaries still in service on 387 January 1 1986 are concerned we recommend that they should be deemed to have come over to the pension scheme on that date unless they specifically opt out to continue under the CPF scheme
The CPF beneficiaries who decide to continue to remain under that scheme should not be eligible on retire ment for ex gratia payment recommended by us for the CPF retirees
Government may however extend the benefit of DCRG to CPF beneficiaries in other departments on the same lines as in railways 99
Government may also consider the feasibility of giving an option to all other CPF retirees who are not covered under paragraph 96 above to come over to the pension scheme with effect from January 1 1986 subject to their refunding to government the entire amount of government contribution inclusive of interest thereon credited to their Provident Fund account at the time of their retirement
 We have no doubt about the above recommendations receiv ing due consideration by the Union of India
The 12th Option already given has to be viewed in this context
The next question debated is that of financial implica tions
It is submitted that given the fact that the budget for the year 1990 91 for disbursement of pension is Rs900 crores as per page 11 of the Budget of the Railway Revenue and Expenditure of the Central Government for 1990 91 the additional liability which would arise by giving relief to the Petitioners would be insignificant in comparison
Ac cording to the petitioners as per their affidavit dated 15988 the additional liability would come to Rs 18 crores per annum and this figure would steadily decrease as the number of PF retirees diminishes every year due to the fact that this question arises only with respect to very old retirees and a substantial number of them pass away every year
The Government in its affidavit dated 21988 has stated that the additional liability as far as the Railway employ ees are concerned would be Rs50 crores a year
This is based on the assumption that there are 79000 surviving PF retirees
Apart from the fact that this number of 79000 was based on calculations made in 1988 and would be greatly reduced by this time the petitioners submit that the actual number of survivors would only be about 38000
Thus the actual burden would be less than half
Further even assum ing that the figure 388 of 79000 put forth by the Government is correct the aver age annual expenditure per retiree for pension calculated by the Government is incorrect as the calculation includes the non recurring arrear payments for the year 1987 88
Taking the correct figures of total pension outlay and total number of beneficiaries the per capita pension expenditure per annum works out to Rs4521
Multiplying this by 79000 assuming the figures of the Railways to be correct the annual expenditure comes to Rs3571 crores
This compared to the current budget of pensions of Rs900 crores is quite insignificant and can be easily awarded by this Court as was done in Nakara it is urged
It is submitted in the alternative that if this Court feels that a positive direction cannot be made to the Gov ernment in this regard it is prayed that at least an option should no given to the respondents either to withdraw the benefit of switching over to pension from every one or to give it to the petitioners as well so that the discrimina tion must go
We are not inclined to accept either of these submis sions
The PF retirees and pension retirees having not belonged to a class there is no discrimination
In the matter of expenditure includable in the Annual Financial Statement this Court has to be loath to pass any order to give any direction because of the division of functions between the three co equal organs of the Government under the Constitution
Lastly the question of feasibility of converting all living PF retirees to Pension retirees was debated from the point of view of records and adjustments
Because of the view we have taken in the matter we do not consider it necessary to express any opinion
Mr CV Francis in WP No 1165 of 1989 argued the case more or less adopting the arguments of Mr Shanti Bhushan
Mrs Swaran Mahajan in WP No 1575 of 1986 submitted that the rule as to commuted portion of the pen sion reviving after 15 years should be applied to PF retirees so that the corpus of Provident Fund dues received more than 15 years ago should be treated as committed por tion of pension and be allowed to revive for adjustments against pension
In the view we have taken in this case it is not necessary to express any opinion on this question
389 Mr RB Datar for the respondent in WP No 1575 of 1986 and WP No 352 of 1989 more or less adopted the arguments of the learned Additional Solicitor General
In the result all the Writ Petitions and the Special Leave Petition are dismissed but the petitioners being retirees we make no order as to costs
RSS  Petitions dismissed


Summary:
The petitioner filed a writ petition in the High Court challenging the detention of her husband Syed Ali Raza Shafiq Mohammed under section 31 of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Sub stances Act 1988
The detenu was then already in jail as he was involved in a case under the Act and his bail applica tion in that case had been rejected
3he Division Bench of the High Court dismissed the writ petition
Before this Court in the Special Leave Petition it was inter alia contended on behalf of the detenu that i the mere possibility of the detenu s release on bail was not enough for preventive detention unless there was material to justify the apprehension that his detention would be neces sary in order to prevent him from engaging in illicit traf ficking in narcotic drugs and psychotropic substances in case of his release on bail ii the detention orders of Rai Chand Shah and Jai Lal Vora who were arrested and detained in the same raid having been struck down by the High Court on the ground that the medical report in respect of the injuries sustained by Rai Chand Shah was placed in a truncated form before the detaining authority the detention order of the detenu should also be set aside as it suffered from the same vice iii though the declaration was issued under Sec
101 of the Act on 2011989 but the same was served on the detenu on 1021989 after an unexplained delay of 21 days and iv there was in an inordinate and unex plained delay in considering the representations made by the detenu
On the other hand it was contended on behalf of the respondents that i it would depend on the facts and circumstances of each case whether a detention order was to be passed or not in case of a person who was already in custody ii the detaining authority could take into ac count the nature of the antecedent activities of the detenu in order to 269 arrive at the conclusion that it was likely that after his release from custody he would indulge in criminal activities and it was necessary to detain him in order to prevent him from engaging in such activities and iii in the present case there was complete awareness in the mind of the detain ing authority that if he was released on bail he was likely to indulge in the criminal activities
Dismissing the special leave petition this Court HELD 1 The material placed before the detaining authority and the facts mentioned in the grounds of deten tion clearly go to show that the detaining authority was fully aware that the bail application filed by the detenu had been rejected
The detaining authority was also con scious of the fact that the two other detenus who were arrested and detained in the same raid had already been released on bail
277B C 2 The antecedents of the detenu which were clear from his own statement went to show that he was initiated in drug trafficking in 1984 and employed as a delivery hay on Rs30 per day and within a short span of four years had himself started buying and selling Narcotic Drugs and amassed huge movable and immovable properties in Bombay
In the present raid itself hereoin and Mandrax tablets worth Rs 11342000 were seized from the ownership and possession of the detenu
277C D 3 The detaining authority after taking into consider ation the material placed before him arrived at the conclu sion that the detenu being in judicial custody may under the normal law of the land he granted bail and be in a position to continue to pursue his nefarious activities 277E 4 The detaining authority in these circumstances considered it necessary to invoke the law of preventive detention under the Act to prevent the detenu from indulging in prejudicial activities in future
In these circumstances it cannot be said that the order of detention was illegal on the ground that it was passed while the detenu was already in custody 277F 5 The facts and circumstances of each case have to be taken into consideration in the context of considering the order of detention in the case of a detenu who is already in jail
273G N Meera Rani vs Government of Tamil Nadu JT 478 Dharmendra Sugan Chand Chelwat vs Union of India   Sanjeev Kumar Aggarwal Union of India JT  Smt
Shashi Aggarwal vs State of UP JT and Ramesh Yadav vs District Magistrate Etah  referred to
6 A perusal of the orders of the High Court quashing the detention orders of Rai Chand Shah and Jai Lal Vora shows that the basis for the detention orders were their confessional statements
The High Court in this regard had observed that the confessional statement of Rai Chand Shah which also formed integral and vital part of the grounds of detention of Jai Lal Vora being product of threats and injuries sustained by him and further his medi cal report having been placed in truncated form before the detaining authority their detention became invalid
But so far as the case of the present detenu is concerned his detention was based on entirely distinct and separate mate rials including his own confessional statements
The basis of the grounds of detention of the present detenu is not rounded on the truncated form of medical report of injuries sustained by Rai Chand Shah
Thus the present detenu cannot take advantage of any orders passed by the High Court de claring detention orders of Rai Chand Shah and Jai Lal Vora as illegal
278A E 7 So far as the provision of Sub Sec
3 of Sec
3 of the Act is concerned it clearly provides that for the purposes of clause 5 of article 22 of the Constitution the communication to a person detained in pursuance of a deten tion order of the grounds on which the order has been made shah be made as soon as may he after the detention but ordinarily not later than five days and in exceptional circumstances and for reasons to be recorded in writing not later than fifteen days from the date of detention
This provision thus relates to the communication 01  the grounds of detention
279B C 8 The principle of five days and fifteen days as provided in Sub section 3 of Section 3 of the Act relating to communication of grounds of detention cannot be applied in respect of declaration issued under Sec
101 of the Act
280F 9 There is no force in the contention that there was an inordinate delay in considering the representations submitted by the detenu
The High Court has given adequate and detailed reasons in holding that the delay has been explained by the counter affidavit filed by the respondents
281A B 271