ivil Appeal Nos
3392 3394 of 1990
From the Judgment and Order dated 3011
1989 of the Andhra Pradesh High Court in WA No 26989 dated 3081988 in WP No 1204184 and dated 26111987 in WP No 194 of 1983
PK Goswamy Additional Solicitor General MK Ramamurthy C Sitaramaiya ML Paul Kailash Vasdev Ms MM Rasaily MA Krishnamurthy Mrs C Ramamurthy TVSN Chari Mrs B Sunita Rao and Ms Majula Gupta for the Appearing Parties
The Judgment of the Court was delivered by KASLIWAL J
Special leave granted
All the above cases are disposed of by one single order as identical questions of law are involved in all these cases
In order to appreciate the controversy facts in brief are stated of all these cases
SLP No 4176 of 1988 The respondent Vijaya Kumar was appointed as a Proba tionary Officer Gr
I Officer by an Order of the Executive Committee of the Central Board of the State Bank of India on 71271
The respondent was charge sheeted in respect of gross irregularities and corrupt 401 practices and was ultimately dismissed from service by an order dated 221288 passed by the Chief General Manager of the Bank
Shri Vijay Kumar filed a writ petition No 19483 before the Andhra Pradesh High Court challenging his order of dismissal
A Division Bench of the High Court heard the writ petition alongwith writ appeal No 14186 and allowed the writ petition but dismissed the writ appeal by order dated 261187
The State Bank aggrieved against the afore said order of the High Court passed in writ petition No 19483 has filed this special leave petition
The High Court has allowed the writ petition only on one ground that the appointing authority of Vijaya Kumar was Executive Committee of the Bank and as such Chief General Manager being an authority lower than the appointing authority was not compe tent to pass an order of dismissal
SLP No 15235 of 1988 In this case the respondent T Dayakar Rao was appointed as a Clerk in the State Bank of India in the month of Octo ber 1962
In the month of July 1971 he was selected as a Trainee Officer and was given job training at various branches of the Bank for two years
While he was working as a Bank Manager he was chargesheeted for irregularities committed by him during the period 1979 to 15680
Disci plinary proceedings were initiated on 29782
On 6384 the Chief General Manager in the capacity of disciplinary au thority passed an order of dismissal
T Dayakar Rao filed a writ petition No 120484 in the High Court
The Division Bench of the High Court by an order dated 13th August 1988 allowed the writ petition following the decision of Division Bench given in writ appeal No 14186 dated 261187
The Bank aggrieved against the aforesaid order has filed the Special Leave Petition under Article 136 of the Constitu tion
SLP No 2069 of 1990 In this case Shri AK Soundararajan appellant was appointed as Technical Officer by an order dated 14668 of the Executive Committee of the Central Board of the Bank
It was mentioned in the Order that Shri Soundararajan would be governed by the State Bank of India Officers  Assistants Service Rules
Post of Technical Officer was considered equivalent to Staff Officer Grade III under the Rules
He was suspended and given a chargesheet on 23482 and was dismissed by an order dated 31383 passed by the Chief General Manager
Shri Soundararajan filed a writ petition No 710885 in the High Court challenging his order of dismissal
Learned Single Judge of the High 402 Court by order dated 311088 allowed the writ petition by following the decision given by the Division Bench in writ petition No 120484 in the case of T Dayakar Rao
The State Bank aggrieved against the order of the learned Single Judge filed an appeal before the Division Bench
The Divi sion Bench in this case took into consideration an amendment made in Regulation 55 by a resolution dated 25888 made applicable with retrospective effect
The Division Bench by Order dated 30th November 1989 allowed the appeal filed by the Bank
Shri AK Soundararajan aggrieved against the Order of the High Court has filed this Special Leave Peti tion
It would be necessary to narrate the facts of SLP C No 513988 State Bank of India vs Hanumantha Rao disposed of by an order of this Court dated 30th January 1990
Hanumantha Rao was promoted as Grade I Officer on 141973 by the Executive Committee of the Central Board of State Bank of India
In 1979 he was posted as the Manager of a branch of the Bank in Warangal District
In respect of certain alleged acts of misfeasancemalfeasance he was suspended on 17881
On 4582 a memo of charges was served on Hanumantha Rao by the Chief General Manager of the Bank
The Chief General Manager of the State Bank of India local head office Hyderabad dismissed Hanumantha Rao by an order dated 7184
Hanumantha Rao filed a writ petition No 550984 in the High Court
Learned Single Judge allowed the writ petition declaring the order of dismissal as incompe tent and invalid
The Bank aggrieved against the order of the Learned Single Judge filed a Letters Patent Appeal No 14186 before the Division Bench
The Division Bench heard and disposed of the writ appeal No 14186 and writ petition No 19483 by a common order
The Division Bench agreed with the conclusion of the learned Single Judge that the order of dismissal passed by the Chief General Manager is incompetent and invalid being violative of the guarantee contained in the proviso to Regulation 552a of the State Bank of India General Regulations 1955
While dealing with the cross objections filed by Shri Hanumantha Rao the Bench took notice of the fact that the writ petitioner had died on 241187 and as such gave the following direction On account of the death of the writ petitioner it is unnec essary for us to go into the merits of the contentions urged by way of cross objections
There is no question of 403 any enquiry or further enquiry hereafter
We may mention in this connection that the learned counsel for the petitioner respondent in this Writ Appeal offered to file a petition to bring on record the legal representatives of the deceased writ petitioner as respondents in this Writ Appeal since according to him they would be entitled in any event to claim the monetary benefits flowing from the orders of this Court
Now that we have agreed with the learned single Judge that the order of dismissal was incompetent and invalid we direct that the writ petitioner shall be treated to be under suspension pending enquiry till 2411
1987 and all the monetary benefits that he is entitled to on that basis including the arrears of suspension allowance shall be paid over to his legal representatives
Mr Prasad will file the legal representatives petition within two weeks from today
Post this Writ Appeal for orders after two weeks
The Writ Appeal accordingly fails and is dis missed but in the circumstances without costs
 The Bank aggrieved against the aforesaid order filed the SLP No 513988 before this Court
Taking note of the facts and circumstances of the case of Hanumantha Rao having died on 241187 leaving behind 14 children this Court on 30th January 1990 did not consider if fit to interfere with impugned order of the Division Bench
It was further made clear that even though this Court was not interfering with the impugned order the questions raised on behalf of the Bank were left open
The Bank was directed to treat Hanuman tha Rao in service and pay the dues arrears of salary and other terminal benefits in accordance with law to his legal representatives
With these observations the SLP was dis missed
The question which calls for consideration in all these cases is whether the order of dismissal could be passed by the Chief General Manager who was lower in rank to the Executive Committee who was the appointing authority in these cases
In order to appreciate this controversy it would be proper to give reference of the relevant provisions of the hereinafter referred to as the Act State Bank of India General Regulations 1955 hereinafter referred to as the Regulations and the State Bank of India Supervising Staff Service Rules 1975 404 hereinafter referred to as the Rules
Section 43 of the Act empowers the State Bank to appoint such number of officers Advisors and Employees as it con siders necessary or desirable for the efficient performance of its functions and to determine the terms and conditions of their appointments and service
Section 49 of the Act confers power on the Central Governmentin consultation with the Reserve Bank to make rules to provide for all matters in which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act
Section 501 of the Act confers powers on the Central Board of Directors of the Bank to make regulations
Sub section 3 of the Section 50 of the Act empowered the Reserve Bank to make the first regulations with the previous sanction of the Central Government
In exercise of the powers conferred by sub section 3 of Section 50 of the Act the Reserve Bank of India with the previous sanction of the Central Government made the State Bank of India General Regulations 1955
These regulations have been amended from time to time by the Central Board of Directors by making regulations under subsection 1 of Section 50 of the Act
Regulation 552a deals with the initial appointments and promotions to various categories of employees in the bank
Initially the appointments of Officers used to be made only by the Executive Committee as provided in Regulation 552a
As the bank grew larger in branches the bank thought fit to vest the power of appointment and promotion to various functionaries of the bank and also gave power to delegate their power of appointment also
Regulation 552a was thus substituted by a resolution dated 18th August 1971 of the Central Board
After this resolution for Officers Grade I  IIthe appointing authorities were speci fied as the Secretary and Treasurer or the Managing Director respectively depending upon whether the appointmentpromo tion is for service in the Circle or the Central office
The State Bank of India Officers  Assistants Rules which govern the service conditions of Grade I Officer whether they were Probationary Officers or Trainee Officers and Staff Officers followed the scheme of appointing authority laid down in the Regulations
Regulation 552a was again amended by a resolution of the Central 405 Board on 11th July 1972
By this amendment there was only a terminological regrouping of the earlier regulation rather than any qualitative change
The State Bank Laws Amendment Act 1973 introduced various amendments and one of the amendments was relating to change of designation of Secre tary and Treasurer as Chief General Manager
Hence the Central Board vide its resolution dated 29374 for the words Secretary  Treasurer substituted Chief General Manager
 The service conditions of all Officers came to be brought under a single set of service rules viz the State Bank of India Supervising Staff Service Rules which came into force on 1775
It would be important to mention that Regulation 552a at all relevant period for our purpose recognized the right of the officers or employees of the Bank under the following clause such officers or employees shall not be dismissed from service of the State Bank by an authority lower than the appointing authority
 Clause f of Rule 3 of the State Bank of India Supervising Staff Service Rules which is relevant for our purposes reads as under f Appointing Authority means i in the case of Officers Grade II and Grade I and of other employees to whom the salary scales applicable to Officers Grade II and Grade I generally apply with or with out modification the Chief General Manager concerned or the Managing Director according as the employee is serving in the Circle or in or under Central Office ii in the case of Staff Officers of various grades and of other employees to whom the salary scales applicable to Staff Officers generally apply with or without modification the Managing Director iii in the case of Senior Staff Appointments and of em ployees to whom the salary scales applicable to Senior Staff Appointments generally apply with or without modifica tion the Executive Committee Sub Rule 1 of Rule 50 relevant for our purposes is also reproduced below 501i The Disciplinary Authority may itself or shall when so directed by its superior authority institute disci plinary proceedings against an employee
406 ii The Disciplinary Authority or any Authority higher than it may impose any of the penalties in rule 49 on an employ ee
It may be further noted that an amendment in Regulation 55 was approved by Central Board at its meeting dated August 25 1988 which reads as under 551 Save as provided in sub regulation 2 and as may be directed the Central Board a Local Board may exercise all the powers of the State Bank in respect of the Staff serving in the areas in its jurisdiction
2a The appointing andor promoting authority for various categoriesgrades of officers and employees shall be such as the Executive Committee may by general or special order designate from time to time
b No officer or employee of the Bank shall be dismissed discharged removed or retired from the service of the Bank or reduced to a lower grade or post or to a lower stage in a time scale by an authority lower than the appointing author ity
Explanation For the purpose of clause b the term appointing authority  shall mean and include the authority who has been designated as such in respect of such class or grade of officers or employees to which the officer or employee concerned as the case may be belongs at the time when such Order is passed or any proceeding leading to such Order or termination is initiated  c Nothing in this sub regulation shall affect the powers of a disciplinary authority appointed or notified under any award settlement under the  governing affecting or regulating the service conditions of workmen of the Bank and for the purpose of clause b above the appointing authority shall be deemed to have been substituted by such disciplinary authority
d The salary and other emoluments to be granted to offi cers and other employees shall be as laid down in the Rules of Service approved by the Central Board and where no such rules have been laid down as fixed by the Executive Commit tee
407 e The power to grant pensions to officers and other em ployees leaving the service of the State Bank other than pensions provided for under the Rules of pension funds respectively applicable to them shall be reserved to the Central Board
f The grant of gratuities or other financial assistance either temporary or permanent to widows children or other dependents of deceased officers or other employees shall be made by the Executive Committee of the Central Board except where grant of any such gratuity or financial assistance is authorised by any general direction given by the Central Board
Explanation The term Officers  in this regulation shall include any employee to whom the rules of service generally applicable to officers apply with or without modification Sub regulation 2 substituted with effect from 11079
 The Executive Committee of the Bank passed the following resolution on August 30 1988 In exercise of the powers conferred by sub section 1 of Section 43 of the 23 of 1955 and amended sub regulation 2a of Regulation 55 of the State Bank of India General Regulations 1955 the Executive Committee of the Central Board of the State Bank of India hereby makes the following order The initial appointments andor promotions to various categories of officers and other employees in the Bank set out in Column I here under shall be made by the authority specified in Column II
Column I Column II Employees working at branches i Employees other a Subordinate the concerned than officers Staff Branch Manager and deputy General Manager ii Clerical the concerned Staff Regional Manager and Dy
General Manager
b Employees working at LHOs 408 Regional Offices and their establishments The concerned Office Manager Admn
Officer at Staff Colleges or Insti tutes Manager Dy
Chief Manager or where there is no post of above descrip tions the head of con cerned deptoffice
ii Officers in The Chief General Manager junior management for appointmentspromotions in the Grade Scale I Circle and the Chief General and Middle Manager Personnel  HRD in Management Central Office for Central Grade Scale II Office establishment
iii Officers in The Deputy Managing Director Middle Management Grade Scale III iv Officers in The Managing Director Senior Management Grade Scale IV V v Officers in Top Recommending Authority Executive Grade Scale VI VII The Directors Promotion Committee and special consisting of the Chairman the scales Managing Director and the Director nominated by the Central Government in terms of clause e sub section 1 of Section 19 and the Director nominated by the Reserve Bank of India in terms of clause f of sub section 1 of Section 19 of the Act
PromotingAppointing Authority The Executive Committee of the Cen tral Board
409 All authorisations in respect of appointing authority andor promoting authority made by the Executive Committee from time to time after 11079 shall be deemed to have been done under the amended regulation 55
Appointments autho rised by the Chief General Manager Personnel  HRD in respect of JMGS I after 11079 are also confirmed hereby
All the employees of the bank in the cases before us where appointed by the Executive Committee
Order of dis missal in their cases has been passed by the Chief General Manager
It is an admitted position that on the date of passing the order of dismissal the Chief General Manager was the appointing authority
According to the Bank though the employees were appointed by the Executive Committee but at the time when inquiry was held and the order of dismissal passed the Chief General Manager had become the appointing authority
On the other hand the contention on behalf of the employees is that the Executive Committee being the appoint ing authority no authority lower than the Executive Commit tee can pass the order of dismissal in their cases
Accord ing to their contention the Chief General Manager being a lower authority than the Executive Committee he had no competence to pass the order of dismissal
Learned counsel for the employees in this regard referred to Article 311 of the Constitution of India and placed reliance on a plethora of cases decided on the basis of guarantee enshrined under Article 311 of the Constitution
The guarantee clause under Article 3111 of the Consti tution of India which is relevant for our purpose reads as under No person who is a member of a Civil Service of the Union or an All India Service or a Civil Service of a State or holds a Civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed
 Now so far as the right which has been conferred on the employees of the State Bank contained in Regulation 552a is that such officers or employees shall not be dismissed from service of the State Bank by an authority lower than the appointing authority
Thus a comparison of the provi sions contained in Article 3111 of the Constitution and the right guaranteed to the employees of the State Bank under Regulation 552a shows that there is a material difference between the language used in the two provisions
Under Arti 410 cle 3111 the words used are by which he was appointed In Regulation 552a there are no such words by which he was appointed and in its place the only right guaranteed is that the employee shall not be dismissed by an authority lower than the appointing authority
Thus the right guaran teed in case of the officers or employees of the State Bank is that the order of dismissal cannot be passed by an au thority lower than the appointing authority
A perusal of the relevant Regulations and Rules mentioned above clearly go to show that the Chief General Manager had become the appointing authority of the employees in question under Regulation 552a with effect from 1774
Admittedly the orders of dismissal have been passed long after these amend ments when the Chief General Manager had already become their appointing authority under the Regulations and the Rules
The right that an officer or employee of the State Bank of India cannot be dismissed from service by an author ity lower than the appointing authority is a creation of statutory rules and regulations
So far as the right or protection guaranteed under Article 311 of the Constitution is concerned it applies to members of the Civil Service of the Union or an All India service or a Civil Service of a State or who holds a Civil Post under the Union or a State
Admittedly the employees of the State Bank do not fall under any one of these categories and they cannot seek any protec tion under Article 3111 of the Constitution
The employees of the State Bank can only claim such rights which have been conferred under Regulation 552a of the General Regula tions
The only right conferred under the said provision is that the officers or employees of the State Bank cannot be dismissed by an authority lower than the appointing authori ty
With the risk of repetition it may be stated that on the date when the order of dismissal has been passed Chief General Manager had already become the appointing authority and as such the order of dismissal has not been passed by an authority lower than the appointing authority
Apart from the view taken by us as mentioned above the Regulation 55 has been amended by a resolution of the Cen tral Board dated August 25 1988 with retrospective effect
It has now been made clear in the explanation that for the purpose of clause b the term appointing authority shall mean and include the authority who has been designated as such in respect of such class or grade of officers or em ployees to which the officer or employee concerned as the case may be belongs at the time when such order is passed or any proceedings leading to such order or termination is initiated
This provision now concludes the controversy if any and clearly provides that the appointing authority shall mean and include the authority who has 411 been designated as such at the time when such order is passed
It was contended on behalf of the Learned counsel for the employees that the Bank had no power to amend the Regulations with retrospective effect
We see no force in this contention
Section 502a of the Act clearly pro vides that all regulations made under this section shall have effect from such earlier or later date as may be speci fied in the regulation
Thus the regulations can be made to give effect from earlier dates also as may be specified in the regulations
We find no force in the contention of learned counsel for the employees that they had vested right in this regard and the same could not have been taken away by making regulations with retrospective effect
There cannot be any vested right in such a matter
As already mentioned above it was a right conferred under Regulation 552a and the same can be amended with retrospective effect also in case the authority competent to make regula tions has been given a right to make regulations with retro spective effect
It has been held in State of Jammu  Kash mir vs Triloki Nath Khosa  Ors SCR 1974 Vol
1771 that it is well settled that a Government servant acquires a status  on appointment to his office and as a result his rights and obligations are liable to be determined under statutory or constitutional authority which for its exercise requires no reciprocal consent
In Bishun Narain Misra vs The State of Uttar Pradesh and Others AIR 1965 Vol
52 SC 1567 it was held that new rule reducing the age of retire ment from 55 years to 53 years could not be said to be retrospective
The proviso to the new rule and the second notification were only methods to tide over the difficult situation which would arise in the public service if the new rule was applied at once and also to meet any financial objection arising out of the enforcement of the new rule
The new rule therefore could not be struck down on the ground that it was retrospective in operation
In Roshan Lal Tandon vs Union of India  Anr and Kunj Behari vs Union of India  Ors AIR 1967 SC Vol
541889 it was held that the legal position of Government servant is more one of status than of contract
The hallmark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement by the parties
Emolu ment of the Government servant and his terms of service are governed by statute or statutory rules which may be unilat erally altered by he Government without the consent of the employee
It was further held in the above case that the petitioner had no vested contractual right in regard to the terms of his service and that the same can be altered uni laterally
We may further add that the prohibition if any to alter the terms and conditions can be found only under the Constitution of India and in case power of the rule or law making authority is not circumscribed or limited by any constitutional 412 mandate then it has power to amend such terms and conditions of service unilaterally without the consent of the employee
In the cases in hand before us the right whatsoever con ferred on the employees of the State Bank was on the basis of Regulation 552a and the Central Board of the Bank was authorised to amend such regulations from any date under Section 502a of the Act
In the result the appeals filed by the State Bank of India in the case of Vijaya Kumar and T Dayakar Rao are allowed the impugned orders passed by the High Court are set aside and the cases are remanded to the High Court for deciding the writ petitions on other points in accordance with law
Now so far as the appeal filed by Sh
AK Sunda rarajan is concerned the point decided by us shall remain concluded but the appellant would be free to raise other points before this Court which are left undetermined
This case may now be listed for further hearing and final dispos al at an early date
In the facts and circumstances of the case the parties shall bear their own costs
Y Lal CA No 3392  3393 of 1990 allowed
CA No 3394 of 1990 ordered to be listed for final heating


Summary:
The petitioners are retired railway employees who were covered by the Railway Contributory Provident Fund Scheme
The Provident Fund Scheme was replaced in the year 1957 by the Pension Scheme
The employees who entered Railway serv ice on or after 141957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme
The employees who were already in service on 141957 were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits
The petitioners had opted for Contributory Provident Fund Scheme
The petitioners  case is 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 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 and that as a result of the decision of the Railways to implement the judgment of this Court in DS Nakara vs Union of India   and to extend the liberalised pension benefits even to those railway employees who had retired long before the liberali sations of pension were introduced the pension retirees derived manifold benefits while PF retirees  benefits remained stagnant
The main legal contention of the petitioners is that the Railways had issued twelve notifications giving option to certain Provident Fund retirees after the respective cut off dates to opt for the Pension Scheme 353 even after their retirement but the same options were not given to other similarly situated Provident Fund retirees beyond the respective cut off dates which was discriminato ry and hence violative of article 14 of the Constitution
It is further contended that the notifications specifying cut off dates were arbitrary and un related to the objects sought to be achieved by giving of the option and therefore violative of Article 14 and also of the principle laid down in Naka ra s case
According to counsel the principle is that pension retirees could not be divided by such arbitrary cut off dates for the purpose of giving benefits to some and not to other similarly situated employees
It is submitted that by analogy the principle is equally applicable to the Provident Fund retirees as a class
On these grounds it is prayed that applying the law laid down in Nakara s case this Court should simply strike down or read down paragraph 31 of the 12th option dated 851987
That paragraph said that all Contributory Provi dent Fund beneficiaries who were in service on 1186 and who were still in service on the date of the order would be deemed to have come over to the pension scheme
It is sub mitted that once this limiting requirement is removed all the Contributory Provident Fund beneficiaries shall be eligible and will be deemed to have come over to the pension scheme
As the basis for striking or reading down paragraph 31 on Nakara s ratio it is urged that all the Railway employees both in service and pensioners constitute one family and must be treated as one class and Government s obligation to look after the retired Railway employees both under the pension scheme and the provident fund scheme being the same they could not be treated differently and any differential treatment will be discriminatory and violative of Article 14 of the Constitution of India
In Nakara s case the date arbitrarily chosen was struck down and as a re sult the revised formula for computing pension was made applicable to all the retired pensioners
On behalf of the respondents it was contended that the options were meant to give the Provident Fund 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
It is further submitted that the petitioners  basic assumption is erroneous inasmuch as Nakara s case did not hold that whenever there was a liber alisation of pension aH other pension retirees and Provi dent Fund retirees must be given the option and that the older system of pension or Provident Fund was always insuf ficient
Dismissing the writ petitions and the Special Leave Petition this Court 354 HELD 1 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 propo sitions wider than the case itself required 374A B 2 The enunciation of the reason or principle upon which a question before a court has been decided is alone binding as a precedent
The ratio decidendi is the underly ing 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 particular case which gives rise to the decision
382A 374D Caledonian Railway Co vs Walker s Trustees and Quin vs Leathern  502 referred to
3 Apart from Article 141 of the Constitution 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
381F G 4
In Nakara s case it was never required to be decid ed that all the retirees formed a class and no further classification was permissible
At the same time it was never held in that case that both the pension retirees and the Provident Fund retirees formed a homogeneous class and that any further classification among them could be viola tive of Article 14
On the other hand the Court had clearly observed that it was not dealing with the problem of a fund
380H 5 The Railway Contributory Provident Fund is by defi nition a fund
Besides the Government s obligation towards an employee under Contributory Provident Fund 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 crystalized and thereafter no statutory obligation contin ues
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 employee
Thus on the retirement of an employee Government s legal obligation under the Provident Fund account ends while under the Pension Scheme it begins
Therefore the provident fund retirees could not be treated at par with the living 355 pensioners
There was therefore no discrimination and the question of striking down or reading down clause 31 of the 12th option does not arise
380H 381A B 382F Union of India vs Ghansham Das  Ors SLP No 5973 of 1988 and Union of India vs Bidhubhushan Malik   distinguished
6 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 pension retirees must also equally be applicable to Provident Fund retirees
381C 7 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
381E DS Nakara vs Union of India  explained
8 The argument is that the State s obligation towards pension retirees is the same as that towards Provident Fund 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 enlarging the circum ference of the obligation and converting a moral obligation into a legal obligation
380C D 9 The statements made on behalf of the respondents to the effect that cut off dates had nexus with the reason for granting the particular option has been substantiated by facts
The cut off dates were not arbitrarily chosen but had nexus with the purpose for which the option was given
382B D 10 That the Pension Scheme and the Provident Fund Scheme are structurally different is also the view of the Central Pay Commissions and hence ex gratia benefits have been recommended which may be suitably increased
383E