IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 9TH JUNE 2010 / 19TH JYAISTHA 1932 WP(C).No. 3892 of 2004(L) --------------------------------------- PETITIONER(S): ------------------------- P.K.PRABHAKARA KURUP, S/O.THE LATE M.NARAYANAN NAIR, AGED 62 YEARS, SELECTION GRADE LECTURER(RETIRED), ZAMORIN'S GURUVAYOORAPPAN COLLEGE, KOZHIKODE, RESIDING AT 'AMBADI', ERANJIKKAL P.O. ELATHUR VIA, KOZHIKODE 673 303. BY SRI.O.V.RADHAKRISHNAN, SENIOR ADVOCATE RESPONDENT(S): -------------------------- 1. STATE OF KERALA REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE ACCOUNTANT GENERAL (A&E)KERALA, THIRUVANANTHAPURAM. 3. THE DIRECTOR OF COLLEGIATE EDUCATION, THIRUVANANTHAPURAM. 4. THE DEPUTY DIRECTOR OF COLLEGIATE EDUCATION, KOZHIKODE. BY SPL.GOVERNMENT PLEADER SRI. N.MANOJKUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/05/2010, THE COURT ON 09/06/2010 DELIVERED THE FOLLOWING: Kss WPC.NO.3892/2004 L APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE ORDER NO.GA.A4/11472/82 DTD. 23/04/1983 ALONG WITH THE STATEMENT SHOWING THE FIXATION OF PAY OF THE DEPUTY REGISTRAR, UNIVERSITY OF CALICUT. P2: COPY OF THE PROCEEDINGS NO.12/B DTD. 02/11/1983 OF THE MANAGER, ZAMORIN'S GURUVAYOORAPPAN COLLEGE, CALICUT - 3. P3: COPY OF THE PROCEEDINGS NO.14/57/B DTD. 07/10/1989 OF THE EDUCATIONAL AGENCY OF ZAMORIN'S GURUVAYOORAPPAN COLLEGE, CALICUT. P4: COPY OF THE ORDER NO.GA-II/A3/3168/88 DTD. 06/01/1990 ALONG WITH STATEMENT DTD. 06/01/1990 SHOWING THE FIXATION OF PAY OF THE ASSISTANT REGISTRAR, UNIVERSITY OF CALICUT. P5: COPY OF THE G.O.(MS) NO.16/91 H.EDN. DTD. 23/01/1991 OF THE 1ST RESPONDENT. P6: COPY OF THE MEMO NO.G6-56/96 DTD. 01/06/1996 OF THE PRINCIPAL, ZAMORIN'S GURUVAYOORAPPAN COLLEGE, CALICUT. P7: COPY OF THE COVERING LETTER DTD. NIL/9/95 ALONG WITH THE LETTER OF 2ND RESPONDENT ADMITTING PENSION, SANCTIONING THE COMMUTTED VALUE OF PENSION AND GRATUITY PAYMENT ORDER. P8: COPY OF THE PENSION PAYMENT ORDER DTD. 5/96. P9: COPY OF THE G.O.(P) NO.3001/98/FIN. DTD. 25/11/1998 OF THE 1ST RESPONDENT. P10: COPY OF THE G.O.(P) NO.171/99/H.EDN. DTD. 21/12/1999 ALONG WITH APPENDIX 1 A AND APPENDIX II OF THE 1ST RESPONDENT. P11: COPY OF THE G.O.(P) NO.118/2001/(91)/FIN. DTD. 17/01/2001 OF THE 1ST RESPONDENT. Kss ..2/- ...2..... WPC.NO.3892/2004 L P12: COPY OF THE LETTER NO.P-18/REVN/597/AC/02/03 DTD. 06/09/2001 OF THE 2ND RESPONDENT. P13: COPY OF THE LETTER NO.P-18/REVN/597/AC/02-03 DTD. 06/09/2002 ADDRESSED TO DISTRICT/SUB TREASURY OFFICER, PENSION PAYMENT TREASURY, KOZHIKODE. P14: COPY OF THE REPRESENTATION DTD. 01/10/2002 OF THE PETITIONER TO THE 2ND RESPONDENT. P15: COPY OF THE REPRESENTATION DTD. 10/01/2003 OF THE PETITIONER TO THE 2ND RESPONDENT. P16: COY OF THE LETTER DTD. 12/02/2003 OF THE 2ND RESPONDENT. RESPONDENT'S EXHIBITS: N I L /TRUE COPY/ P.S.TO JUDGE Kss T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No. 3892 of 2004-L - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 9th day of June, 2010. JUDGMENT The petitioner retired as Selection Grade Lecturer in Zamorin's Guruvayurappan College, Kozhikode on 31.5.1996. The writ petition concerns the claim for commutation of a portion of his pension on the basis of the revised pension ordered in Ext.P9 Government Order and for a declaration that he is entitled to get the enhanced DCRG at Rs.2.80 lakhs ordered therein. 2. The petitioner entered service as a Junior Lecturer in Commerce on 8.9.1969 in the above college and later obtained various promotions and fixations of pay from time to time. On implementation of the University Grants Commission Scheme 1986 by various Government Orders the petitioner was brought under the said Scheme. He continued as Lecturer (Selection Grade) till his retirement on superannuation on 31.5.1996 after putting 33 years, 4 months and 14 days of qualifying service. The proceedings Exts.P7 and P8 are the letters admitting pension, sanctioning the commuted value of pension and gratuity payment order. Therein, the DCRG admitted is Rs.80,000/- and the commuted value of pension granted wpc 3892/2004 2 is Rs.1,12,785/-. The amount of pension admitted is Rs.2469/-. 3. The various disputes raised in this writ petition emanates from the pay revision orders issued by the State Government to Government employees as per G.O.(P) No.3000/98/Fin dated 25.11.1998 which was followed by Ext.P9 Govt. Order, whereby the pension and other retirement benefits of the Government employees were revised from 1.3.1997. The date of effect of Ext.P9 is 1.3.1997 and by para 15 the ceiling of maximum amount of DCRG stands raised from Rs.80,000/- to Rs.2.80 lakhs with effect from 1.3.1997. These orders have been made applicable to college teachers who come under the UGC/AICTE/Medical Education Scheme Scales of Pay, as per clause 23 therein. Ext.P10 is the copy of the revised UGC Scheme adopted by the Government dated 21.12.1999. The date of effect of the revised scale of pay is from 1.1.1996. Thus, the petitioner was also benefited by the revised pay granted by the said order up to the date of his retirement. 4. The Government later issued another order as per Ext.P11 dated 17.1.2001. Based on the said order benefits were granted to persons like the petitioner who retired between 1.1.1996 and 1.3.1997, whereby the maximum pension admissible has been fixed as 50% of the maximum of the wpc 3892/2004 3 revised scale under AICTE/UGC/Medical Education Schemes scale of pay with effect from 1.1.1996. It was specified further that they will not be entitled to commute a portion of their revised pension on account of the concession granted and that the revised rate of DCRG as ordered by Ext.P9 will not be admissible to such persons. These two clauses are under challenge in this writ petition. 5. Mainly it is contended that the revised UGC Scheme 1998 was implemented from 1.1.1996. The pensioners who are granted the revised scale of pay under the revised UGC Scheme 1998 which is made applicable on and from 1.1.1991 form a homogeneous class and are entitled to equal treatment in the light of Articles 14 and 16(1) of the Constitution of India. In the light of the above, the cut off date fixed as 1.3.1997 for the purpose of granting enhanced DCRG of Rs.2.80 lakhs divides the pensioners who retired prior to 1.3.1991 and those who are to retire after 1.3.1997. The same is illegal and arbitrary. On these grounds, the denial of the benefit of commuted value of pension is also under challenge. 6. Heard Shri O.V. Radhakrishnan, learned Senior Counsel for the petitioner and Shri N. Manoj Kumar, learned Govt. Pleader. 7. Learned Senior Counsel appearing for the petitioner submitted that wpc 3892/2004 4 there is no scientific basis for fixing the cut off date 1.3.1997 in Ext.P9 for the grant of enhanced DCRG. My attention was invited to para 23 of Ext.P9, specifying that the orders will be applicable to college teachers who come under UGC/AICTE/Medical Education Scheme Scales of Pay. It is pointed out that as the Scheme has been made applicable to such teachers like the petitioner, no distinction can be drawn on the basis of the date of retirement of persons who have retired from 1.1.1996 upto 1.3.1997. It is pointed out that the revision of scales of pay of college teachers under the UGC Scheme as per Ext.P10 being effective from 1.1.1996, the petitioner also is included in the class of people whose pay scales have been revised, for enabling him to claim the benefit of Ext.P9 Govt. Order. It is further pointed out that the date of effect of Ext.P10 is 1.1.1996 going by para 4.1 and going by para 5.1, the revised scale of pay will be admissible to various categories as on 1.1.1996. The argument which has been vehemently stressed is that the class of Government employees and college teachers whose scales of pay have been revised, form a homogeneous one and therefore such pensioners who have retired prior to 1.3.1997 and who are beneficiaries of the revised scale of pay, as in the case of the petitioner, cannot be denied the benefit of the increased DCRG as well as the benefit wpc 3892/2004 5 of commutation of pension by arbitrarily fixing the cut off date. Reliance is placed on the decisions of the Apex Court in D.S. Nakara v. Union of India {(1983) 1 SCC 305}, All India Reserve Bank Retired Officers Association v. Union of India {(1992) Supp (1) SCC 664), V. Kasthuri v. Managing Director, State Bank of India {(1998) 8 SCC 30), etc. It is pointed out that even if Ext.P9 could be termed as a new scheme, since it applies to the retirees based on the revised scales of pay, such distinction can only be termed as arbitrary. 8. Learned Govt. Pleader opposed the pleas raised by the learned Senior Counsel for the petitioner, by relying upon various decisions of the Apex Court, viz. State of West Bengal and others v. Ratan Behari Dey and others {(1993) 4 SCC 62}, Union of India v. P.N. Menon and others {(1994) 4 SCC 68} and State of Rajasthan v. Sevanivatra Karamchari Hitkari Samiti (JT 1995 (1) SC 315) and that of a Division Bench of this Court in Ananthasubramanian v. State of Kerala (1996 (2) KLT 69). It is further pointed out that the issue is covered against the petitioner in the light of the decision of a Division Bench of this Court in State of Kerala v. Gopalakrishna Pillai (2009 (2) KLT 39), wherein the identical reliefs wpc 3892/2004 6 sought by certain other persons whose dates of superannuation were between July 1996 and February 1997, were denied the benefit of increased DCRG and commuted value of pension. 9. First I will consider the plea raised by the learned Govt. Pleader relying upon the judgment in Gopalakrishna Pillai’s case (supra). Therein, the amendments made to Rule 60© of Part I K.S.R. and Notes 6 to 9 to Rule 63 Part III and Rule 62 of Chapter XIV-A K.E.R. arose for consideration. My attention was invited to para 10 onwards of the judgment wherein the claims of retirees from July 1996 to February 1997 for maximum ceiling of DCRG at Rs.2.80 lakhs was considered along with the benefit of commutation of a portion of the revised pension. The order passed by the Government extending the benefit of UGC scale of pay which is applicable from 1.1.1996 was also referred to therein. A reading of the judgment shows that the issue turned upon the interpretation of the amendments to Rule 60© and Rule 63 of Part III K.E.R. which is retrospective from 15.5.1986. The amendments were upheld. On that basis it was held that the parties therein were not entitled for the benefit of increased DCRG and other benefits. The Division Bench had no occasion to consider the legal questions raised in this writ petition. Therefore, I wpc 3892/2004 7 venture to consider the points raised in detail in the light of the arguments raised on either side. 10. The principles discernible from the decision of the Apex Court in D.S. Nakara’s case {(1983) 1 SCC 305} which was considered in later decisions, of course were relied upon by the learned Senior Counsel for the petitioner. In fact, in various decisions of the Apex Court, the principles stated therein have been distinguished based on the particular fact situations and the orders relevant. The important decision relied upon by the learned Senior Counsel for the petitioner, is V. Kasthuri’s case {(1998) 8 SCC 30}. Para 22 therein is significant, which is extracted below: Category - 1 “If the person retiring is eligible for pension at the time of his retirement and if he survives till the time of subsequent amendment of the relevant pension scheme, he would become eligible to get enhanced pension or would become eligible to get more pension as per the new formula of computation of pension subsequently brought into force, he would be entitled to get the benefit of the amended pension provision from the date of such order as he would be a member of the very same class of pensioners when the additional benefit is being conferred on all of them. In such a situation, the additional benefit available to the same class of wpc 3892/2004 8 pensioners cannot be denied to him on the ground that he had retired prior to the date on which the aforesaid additional benefit was conferred on all the members of the same class of pensioners who had survived by the time the scheme granting additional benefit to these pensioners came into force. The line of decisions tracing their roots to the ratio of Nakara case would cover this category of cases.” 11. Going by the said principle, when a retiree is governed by a particular pension scheme, and when the said pension scheme is revised, he would be entitled to get the benefit of the new formula. In such cases, the additional benefit available to the same class of pensioners cannot be denied to him on the ground that he had retired prior to the date on which the additional benefit was conferred . But in para 23 their Lordships explained the legal position applicable in other cases, in the following manner, in respect of category No.2: “However, if an employee at the time of his retirement is not eligible for earning pension and stands outside the class of pensioners, if subsequently by amendment of the relevant pension rules any beneficial umbrella of pension scheme is extended to cover a new class of pensioners and when such a subsequent scheme comes into force, the erstwhile non-pensioner might have survived, then only if such extension of pension scheme to erstwhile non- pensioners is expressly made retrospective by the authorities wpc 3892/2004 9 promulgating such scheme; the erstwhile non-pensioner who has retired prior to the advent of such extended pension scheme can claim benefit of such a new extended pension scheme. If such new scheme is prospective only, old retirees non-pensioners cannot get the benefit of such a scheme even if they survive such new scheme. They will remain outside its sweep.” Thus, if a new scheme is brought which is only prospective, the old retirees will not get the benefit of the scheme. The said principle is significant while considering the claim raised by the petitioner herein. 12. Similar questions have been considered by the Apex Court in various decisions. In All India Reserve Bank Retired Officers Association’s case (1992 Supp (1) SCC 664), after considering in detail the scheme which was the subject matter of decision therein and the principles stated in Nakara’s case (supra), it was held in para 10 that “where an existing scheme is revised or liberalized all those who are governed by the said scheme must ordinarily receive the benefit of such revision or liberalization and if the State desires to deny it to a group thereof, it must justify its action on the touchstone of Article 14 and must show that a certain group is denied the benefit of revision/liberalization on sound reason and not entirely on the whim and caprice of the State.” But it wpc 3892/2004 10 was held further thus: “But when an employer introduces an entirely new scheme which has no connection with the existing scheme, different considerations enter the decision making process. One such consideration may be the financial implications of the scheme and the extent of capacity of the employer to bear the burden. Keeping in view its capacity to absorb the financial burden that the scheme would throw, the employer would have to decide upon the extent of applicability of the scheme. That is why in Nakara case this Court drew a distinction between continuance of an existing scheme in its liberalised form and introduction of a wholly new scheme, in the case of the former all the pensioners had a right to pension on uniform basis and any division which classified them into two groups by introducing a cut-off date would ordinarily violate the principle of equality in treatment unless there is a strong rationale discernible for so doing and the same can be supported on the ground that it will subserve the object sought to be achieved. But in the case of a new scheme, in respect whereof the retired employees have no vested right, the employer can restrict the same to certain class of retirees, having regard to the fact-situation in which it came to be introduced, the extent of additional financial burden that it will throw, the capacity of the employer to bear the same, the feasibility of extending the scheme to all retirees regardless of the dates of their retirement, the availability of records of every retiree, etc.” wpc 3892/2004 11 13. In Ratan Behari Dey’s case {(1993) 4 SCC 62}, a similar issue was considered including the question whether the State can specify any date to bring into effect a scheme. It was held in para 7 as follows: “Now it is open to the State or to the Corporation, as the case may be, to change the conditions of service unilaterally. Terminal benefits as well as pensionary benefits constitute conditions of service. The employer has the undoubted power to revise the salaries and/or the pay scales as also terminal benefits/pensionary benefits. The power to specify a date from which the revision of pay scales or terminal benefits/pensionary benefits, as the case may be, shall take effect is a concomitant of the said power. So long as such date is specified in a reasonable manner, i.e. without bringing about a discrimination between similarly situated persons, no interference is called for by the court in that behalf.” 14. In a later decision in Sevanivatra Karamchari Hitkari Samiti’s case (JT 1995 (1) SC 315), the decision in Nakara’s case (supra) was explained in para 23 in the following words: “In Krishna Kumar's case, it has been indicated that in D.S. Nakara's case this Court considered a case where an artificial date was specified classifying the retirees into two different classes even though they were governed by the same rules and were similarly situated. Such classification where both the groups were governed wpc 3892/2004 12 by the same rules amounted to deprivation of one group of the benefit of liberalisation of pension rules. It was only in that situation it was held in D.S. Nakara's case that specification of the date from which the liberalisation pension rules were to come into force was arbitrary. This Court, in D.S. Nakara's case, clearly indicated that it was not a new scheme but only a revision of the existing scheme and it was not a new retiral benefit but it was a case of upward revision of existing benefit.” 15. The decision of the Apex Court in P.N. Menon’s case {1994) 4 SCC 68} concerned a scheme framed by the Government of India brought in by O.M. dated 25.5.1979 treating a portion of the dearness allowance, as pay for the purpose of retirement benefits in respect of government servants who retired on or after 30.9.1977. The persons who retired from service before 30.9.1977 sought to extend the benefit to them also. The writ petition was allowed by the Single Bench of the High Court, by relying upon Nakara’s case (supra) and the Division Bench dismissed the appeal filed by the Government of India. This was reversed by the Apex Court in the above decision. The relevant principles were restated in paragraphs 7 and 8 thus: “7. Public service is bilateral in nature in the sense that a public servant is remunerated for the service he renders to the wpc 3892/2004 13 public. Such public servant shall get pension after retirement, is one of the integral part of his employment. That is why it has been repeatedly said by the courts that pension is not a charity. Every public servant becomes entitled, after retirement for pension under the relevant rules for the service he has rendered to public for years. Keeping in view the services rendered in the past and to ensure that they live and lead a dignified life even after superannuation, the Government has been revising the rates of pension or providing certain additional benefits from time to time. But the demand of retired personnel is that throughout they should be treated on a par and as a class with persons who retire later. 8. Whenever the Government or an authority, which can be held to be a State within the meaning of Article 12 of the Constitution, frames a scheme for persons who have superannuated from service, due to many constraints, it is not always possible to extend the same benefits to one and all, irrespective of the dates of superannuation. As such any revised scheme in respect of post- retirement benefits, if implemented with a cut-off date, which can be held to be reasonable and rational in the light of Article 14 of the Constitution, need not be held to be invalid. It shall not amount to “picking out a date from the hat”, as was said by this Court in the case of D.R. Nim v. Union of India, in connection with fixation of seniority. Whenever a revision takes place, a cut-off date becomes imperative because the benefit has to be allowed within the financial resources available with the Government.” wpc 3892/2004 14 16. Another important decision of the Apex Court in similar set of facts is one decided in Amar Nath Goyal's case {(2005) 6 SCC 754}. Therein, an issue on an order like this directly arose for consideration. There a benefit of increased quantum of DCRG was granted to Government employees who died or retired on or after 1.4.1995. The increased quantum of DCRG was Rs.2.5 lakhs. Large number of employees who had retired prior to 1.4.1995 applied for getting the additional benefits. A similar contention was raised stating that the fixing of the cut-off date and restricting the benefit only to persons who died or retired on or after the said date, was discriminatory and arbitrary. It was also contended that all retirees/dead persons form a homogeneous class and any discrimination or distinction between retirees/dead persons prior to 1.4.1995 and those who retired/died on or after 1.4.1995 had no rational basis. A reference to the facts of the case show that similar type of orders have been issued therein also by the Government. It was held in para 29 thus: “D.S. Nakara which is the mainstay of the case of the employees, arose under special circumstances, quite different from the present case. It was a case of revision of pensionary benefits and classification of pensioners into two groups by drawing a cut-off line and granting the revised pensionary benefits to employees wpc 3892/2004 15 retiring on or after the cut-off date. The criterion made applicable was “being in service and retiring subsequent to the specified date”. This Court held that for being eligible for liberalised pension scheme, application of such a criterion is violative of Article 14 of the Constitution, as it was both arbitrary and discriminatory in nature. The reason given by the Court was that the employees who retired prior to a specified date, and those who retired thereafter formed one class of pensioners. The attempt to classify them into separate classes/groups for the purpose of pensionary benefits was not founded on any intelligble differentia, which had a rational nexus with the object sought to be achieved. However, it must be noted that even in cases of pension, subsequent judgments of this Court have considerably watered down the rigid view taken in D.S. Nakara as we shall see later in T.N. Electricity Board v. R. Veerasamy (“Veerasamy”). In any event, this is not a case of a continuing benefit like pension; it is a one-time benefit like gratuity.” Reliance was placed on the dictum laid down in P.N. Menon's case {(1994) 4 SCC 68} and other decisions to hold that fixing of cut-off date for implementation of such benefits, that too on the basis of financial implication, cannot be said to be arbitrary, irrational or violative of Article 14 of the Constitution of India. It was also noticed that the benefit