No 3958 61 of 1983
Under Article 32 of the Constitution of India H Salve PH Parekh and PK Manohar for the Petitioners
PP Singh RD Agarwala Ms section Relan CVS Rao LR Singhand SR Srivastava for the Respondent
The Judgment of the Court was delivered by RANGANATH MISRA J
By these applications under Article 32 of the Constitution Common Cause a registered Society and three retired Government servants have asked for strik ing down certain provisions of the Communication of Pension Rules applicable to civilian and defence pensioners as they permit the Union of India to recover more than what is paid to the pensioners upon commutation and for a direction that an appropriate scheme rationalising the provisions relating to commutation be brought into force
The respondent has filed a counter affidavit challenging the maintainability of the petition as also the claim of the petitioners and the matter has been heard at considerable length from time to time
Parties have filed written submissions supplementing their oral arguments
The Central Civil Services Commutation of Pension Rules 1981 are the approximate rules in force so far as civilian employees Under the Government of India are con cerned
A set of regulations is in force in regard to De fence personnel
It is not disputed that in the case of civilians the total amount of pension which can be commuted is upto one third while in the case of Defence personnel commutation is admissible upto 43 per cent in the case of officers 500 and upto 45 per cent in respect of other ranks
The argument advancement on behalf of the petitioners that there has been a substantial improvement in the life expectancy of the people in India has not been refuted on behalf of the re spondent
This Court suggested to the respondent in course of the hearing that in the changed situation now prevailing in the country a new look should be given to the matter
In deference to the suggestion made by this Court the respond ent took time to consider the various aspects raised in the writ petitions and the oral submissions advanced at the hearing as also the written notes submitted in Court
II also took into account the fact that several State Govern ments have changed the rule applicable to commutation and have restored full pension to the pensioners who commuted a part of their pension after lapse of fifteen years
Union of India has now agreed to restore the commuted portion of the pension in regard to all civilian employees at the age of seventy years or after fifteen years whichever is later and has agreed to make this effective from April 1 1986
This decision of the Respondent was communicated to the learned Attorney General by a letter dated 2031986 reading thus I am glad to inform you that Government have taken a decision in the matter of recovery from pension towards commuted value of pen sion
The decision is as follows i Recovery from pension payable every month towards commuted value of pension will stop on the completion of 15 years from the date of retirement on superannuation or on the pen sioner completing the age of 70 years which ever is later
ii The formulation will apply to all civil ian pensioners in whose case the age of re tirement on superannuation is 58 years and the personnel of Armed Forces in whose case the retirement age varies in accordance with the colour service prescribed for the rank at taining the age of 3738 years or more
iii Government have taken this decision as an act of goodwill to pensioners and to extend to them some measure of relief in the evening of their lives
It is sincerely be lieved that there will be no further demand on this issue and that the pensioners will accept the decision of the Government without dissent or reservation
iv The decision will take effect prospec tively from April 1 1986
 501 A distinction has been made in the case of Defence employees on the ground that retirement in their case is at an early age and merely with lapse of a period of fifteen years full pension could not be restored
It has also been pointed out that the Defence personnel receive in consideration of the exigencies of the service a higher rate of pension as com pared to civilian employees
As the position now stands when a pensioner commutes any part of his pension upto the authorised limit his pen sion is reduced for the remaining part of his life by de ducting the commuted portion from the monthly pension
The petitioners have contended that the commuted portion out of the pension is ordinarily recovered within about 12 years and therefore there is no justification for fixing the period at 15 years
Commutation brings about certain advantages
The commuting pensioner gets a lump sum amount which ordinarily he would have received in course of a spread over period subject to his continuing to live
Thus two advantages are certainly forthcoming out of commutation 1 availability of a lump sum amount and 2 the risk factor
Again many of the State Governments have already formulated schemes accepting the 15 year rule
In this background we do not think we would be justified in disturbing the 15 year formula so far as civilian pensioners are concerned
The age of superannuation used to be 55 until it was raised to 58
It is not necessary to refer to the age of the commuting pensioner when the benefit would be restored
It is sufficient to indicate that on the expiry of fifteen years from the period of retirement such restoration would take place
The respondent Government has agreed that this benefit should be extended with effect from 141986
The writ applications were filed in 1983
The matter was placed on board for hearing in February 1984
The Union Government took some time for responding to the suggestion of the Court and that is how the disposal was initially delayed
Thereaf ter the hearing of the matter has again been delayed on account of pressing business in the Court
In these circum stances we think it just and equitable that the benefit agreed to be extended in respect of the commuted portion of the pension should be effective from 141985 so far as the civilian employees are concerned
The decision of the respondent Government contained in the above communication does not cover all classes of De fence personnel having been confined to personnel of Armed Forces in whose case the retirement age varies in accordance the colour service prescribed for the rank attaining the age of 3738 years or more
In regard to those who are excluded it has been contended that the retirement is at too early an age and since a higher rate of 502 pension as compared to civilian employees is admissible the benefit contained in the Government order cannot be extended to that class
Previously the retiring age for the lower ranks such as sepoys used to be after 15 years  service but now it has been enhanced to 20 years  service
A sepoy retiring after 20 years  service is entitled to five years of weightage for his pension entitlement
Similarly a Naik retiring after 22 years of service and a Havildar after 24 years  service are also given credit of five years
While a civilian employee ordinarily retires after a full term of service entitling him to full pension it does not happen in the case of the lower ranks in the Defence services and with the extra advantage by the addition of years of credit the benefit in terms of money works out in the range of about 75 to 6
It has to be remembered that more than 50 of the Defence personnel belong to the lowest rank and about 81 in all retire early
The weightage factor relied upon by the Respondent to treat the Defence personnel differently is not a tenable feature
Undoubtedly the Defence personnel are a class by themselves
In their case retirement takes effect in certain classes as justified by the exigencies of the service rather early
Weightage if any is intended to cover this so that an equation for other purposes could be established
There is really no merit in the stand of the Respondent that the early age of retirement is fully compen sated by the higher rate of pension
In dealing with a matter of this nature it is not appropriate to be guided by the example of Life Insurance equally unjust it would be to adopt the interest basis
On the other hand the conclusion should be evolved by relating it to the years of purchase  basis
An addition of two years to the period necessary for the recovery on the basis of years of purchase justifies the adoption of the 15 years rule
That is more or less the basis which appears to be equitable
It may be that this would give rise to an addi tional burden on the exchequer but it would not be heavy and after all it would bring some relief to those who have served the cause of the Nation at great sacrifice
We are therefore of the view that no separate period need be fixed for the Armed Forces personnel and they should also be entitled to restoration of the commuted portion of the pension on the expiry of 15 years as is conceded in the case of civil pensioners
And for them too the effective date should be from 141985
We direct the respondent Government to give effect to this order within a period of three months from now
We place on record our appreciation of the consideration shown by the Union of India to ameliorate the hardship of the pensioners
There will be no order as to the costs
APJ Petitions allowed


Summary:
The Central Civil Services Commutation of Pension Rules 1981 are the rules applicable to civilian employees under the Government of India
In regard to Defence person nel a similar set of regulations is in force
In the case of civilians the total amount of pension which can be commuted is upto onethird while in the case of Defence personnel commutation is admissible upto 43 in the case of officers and upto 45 in respect of other ranks
In petitions under Article 32 the petitioners have asked for striking down certain provisions of the said Rules as they permit the Union to recover more than what is paid to the pensioners upon commutation and for a direction that an appropriate scheme rationalising the provisions relating to commutation be brought into force because there has been a substantial improvement in the life expectancy of the people and since commutation portion out of the pension is ordinarily recovered within about 12 years there is no justification for fixing the period at 15 years
The respondent Union of India challenged the maintain ability of the petitions as also the claim of the petition ers
On the suggestion of the Court the Union of India examined the matter and agreed to restore the commuted portion of the pension in regard to civilian employees at the age of 70 years or after 15 years whichever is later effective from April 1 1986
So far as Defence employees were concerned it was contended that retirement in their case was at an early age and merely with 1apse of a period of 15 years full pension could not be restored because they receive in consideration of the exigencies of the service a higher rate of pension as compared to civilian employees and the benefit contained in the Government order cannot be extended to all classes of Defence personnel
Allowing the petitions 498 HELD 1
When a pensioner commutes any part of his pension upto the authorised limit his pension is reduced for the remaining part of his life by deducting the commuted portion from the monthly pension
501 B 2
Commutation brings about certain advantages
The commuting pensioner gets a lump sum amount which ordinarily he would have received in course of a spread over period subject to his continuing to live
Two advantages are cer tainly forthcoming out of commutation 1 availability of a lump sum amount and 2 the risk factor
Many State Govern ments have already formulated schemes accepting the 15 years rule
This Court would not be justified in disturbing the 15 years formula so far as civilian pensioners are concerned
501 C D 3
On the expiry of 15 years from the date of retire ment restoration of commuted value of pension would take place and it would be just and equitable that the benefit of commuted portion of the pension should be effective from 141985 so far as civilian employees are concerned500 E 501 G 4
The decision of the respondent Government does not cover all classes of Defence personnel having been confined to personnel of Armed Forces in whose case the retirement age varies in accordance with the colour service prescribed for the rank attaining the age of 3738 years or more
Previously the retiring age for the lower ranks such as sepoys used to be after 15 years  service but now it has been enhanced to 20 years  service
A sepoy retiring after 20 years  service is entitled to 5 years of weightage for his pension entitlement
Similarly a Naik retiring after 22 years  of service and a Havildar after 24 years  service are also given credit of five yeats
While a civilian employee ordinarily retires after a full term of service entitling him to full pension it does not happen in the case of the lower ranks in the Defence services and with the extra advantage by the addition of years of credit the benefit in terms of money works out in the range of about 75 to 6
501 H 502 B 5
More than 50 of the Defence personnel belong to the lowest rank and about 81 in all retire early
The weightage factor relied upon by the respondent to treat the Defence personnel differently is not a tenable feature
The Defence personnel are a class by themselves
In their case retire ment takes effect in certain classes as justified by the exigencies of the service rather early
Weightage if any is intended to cover this so that an equation for other purposes could be established
There is no merit in the stand of respondent that the early age of retirement is fully compensated by the higher rate of pension
502C D 6
No separate period need be fixed for the Armed Forces personnel and 499 they should also be entitled to restoration of the commuted portion of the pension on the expiry of 15 years as is conceded in the case of civil pensioners and for them too the effective date should be from 141985
502 F G 7
In dealing with a matter of this nature it is not appropriate to be guided by the example of Life Insurance equally unjust it would be to adopt the interest basis
The conclusion should be evolved by relating it to the years of purchase  basis
An addition of two years to the period necessary for the recovery on the basis of years of purchase justifies the adoption of the 15 year rule which appears to be equitable
502 E