IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.: 578 of 2006. Decided on: 28.07.2008. Ram Singh. … … Petitioner. Versus Union of India and Others. … … Respondents. Coram: The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting?1 Yes. For the Petitioner: Mr. Bimal Gupta, Advocate. For the Respondents: Mr. Janesh Mahajan, Central Government Counsel. Rajiv Sharma, Judge: The brief facts necessary for the adjudication of this petition are that the petitioner was enrolled in the Indo-Tibetan Border Police as Constable and he joined as such on 24th November, 1969. He was promoted to the post of L/Naik in the year 1981 and was subsequently promoted as Naik (Medic) on 7th September, 1982 w.e.f. 17th August, 1982. He was promoted to the post of Head Constable in the year 1987. The respondents in order to remove the stagnation had adopted the Assured Career Progression Scheme in the Organisation. In sequel to the introduction of A.C.P.S. vide office order dated 15.6.2004 (Annexure P-2), the petitioner was put in the pay scale of Rs.5500- 9000 w.e.f. 9.8.1999. He retired on 30th September, 2005. He was Whether reporters of local papers may be allowed to see the judgment? Yes. - 2 - issued a draft amounting to Rs.2,25,122/- alongwith a letter dated 26th September, 2005. It is evident from Annexure P-5, dated 5th September, 2005 that his pay has been altered from Rs.5500-9000 to Rs.4000-6000. The Pension Payment Order as per Annexure P-4 dated 19th September, 2005 has been issued in the pay scale of Rs.4000-6000. His retirement gratuity has been assessed at Rs.1,49,579.00. He made a representation against the withholding of a sum of Rs.1,26,259/- by the respondents and fixing his pension in the pay-scale of Rs.4000-6000 on 28.10.2005. His representation was rejected by the respondents on 13.12.2005 (Annexure P-8). The respondents had filed reply to the writ petition. The sum and substance of the reply is that the pay of the petitioner has been reduced from Rs.5500-9000 to 4000-6000 on the basis of order dated 28.4.2005. Mr. Bimal Gupta has strenuously argued that the action of the respondents reducing the pay of the petitioner from Rs.5500-9000 to Rs.4000-6000 and converting his pension in the pay scale of Rs.4000- 6000 is illegal, arbitrary, thus, violative of Articles 14 and 21 of the Constitution of India. Mr. Janesh Mahajan has supported the action of the respondents in fixing his pension on the basis of pay scale of Rs.4000-6000 as per Order dated 28.4.2005. I have heard the learned counsel for the parties and perused the record carefully. The petitioner was promoted to the post of Head Constable in the year 1987. The respondents had decided to adopt the Assured Career Progression Scheme in the Organisation w.e.f. 9th August, 1999. However, a conscious decision has been taken to introduce the Scheme on 15.8.2004 on the basis of which the petitioner was granted the higher pay scale of Rs.5500-9000 w.e.f. 9.8.1999. He was paid the - 3 - arrears of salary etc. He had superannuated on 30th September, 2005. In fact, he has been issued a draft of Rs.2,25,122/- towards Death- cum-Retiral Gratuity/death gratuity/revised death cum retiral gratuity (Annexure P-3). However, his pay has been reduced from Rs.5500- 9000 to Rs.4000-6000 on the basis of Annexure P-5, dated 5th September, 2005. His pension was also fixed in the pay-scale of Rs.4000-6000 instead of Rs.5500-9000 and the retirement gratuity was reduced from Rs.2,25,122/- to Rs.1,49,547/-. The representation made by the petitioner has been rejected vide letter dated 13.11.2005. Mr. Bimal Gupta submits that no notice was ever issued to the petitioner before taking a decision by the respondents to recover a sum of Rs.1,26,259/- and also to grant the pension in the pay-scale of Rs.4000-6000 instead of Rs.5500-9000. The respondents could not refute this submission. It is settled law by now that any order which has a civil consequence, must be passed in conformity with the principles of natural justice. The petitioner ought to have been heard before a decision was taken to recover a sum of Rs.1,26,259/- and to fix the pension in the pay-scale of Rs.4000-6000 instead of Rs.5500- 9000. The matter is required to be viewed from another angle. The petitioner has been granted the benefit as per Annexure P-2 dated 15.8.2004 with effect from 9.8.1999. His name figures at Sr. No.7 of Annexure P-2. He has been granted the arrears of salary pursuant to Annexure P-2. It was only on the basis of his pay being fixed in the higher pay scale of Rs.5500-9000 his retiral benefit, retirement gratuity was calculated at Rs.2,25,122/-. It was directed to be released to him vide Annexure P-3. However, the higher pay-scale granted to the petitioner of Rs.5500-9000 has been altered to Rs.4000-6000 on the basis of Annexure P-5, dated 5.9.2005. The reason assigned for - 4 - reducing the pay-scale of the petitioner from Rs.5500-9000 to 4000- 6000 is communication dated 28.4.2005. The text of order dated 28.4.2005 read thus:- “The proposal regarding non-introduction of rank of Assistant Sub Inspector in GD Cadre in Central police Force has been examined in consultation with Ministry of Finance. Ministry of Finance did not agree to the proposal on the ground that cadre structure in Central Police force is totally on par with Delhi Police where rank of ASI is existing. 2. Regarding grant of ACP or promotion to Head Constables, Ministry of Finance has directed that the Head Constables on promotion or under ACP will only get the initial scale of Rs.4,000-6000/- which will then stand upgraded to the next higher scale of Rs.5500-9000/- as and when vacancies arise in that grade. 3. In view of directions of Ministry of Finance, the rank of ASI is to be introduced in the GD Cadre in Central Police force. The existing eligible Head Constables may be granted ACP in the pay scale of Rs.4000-6000/- (In the rank of ASI) only. 4. This issues with the approval of Ministry of Finance vide their U.O. No.2(16)/E-III/99 dated 13.4.2005 and Integrated Finance Division of this Ministry vide their Dy. No.438/Fin.11/05 dated 27.4.2005.” The decision to grant the pay-scale of Rs.5500-9000 on the basis of Assured Career Progression Scheme is dated 15.8.2004. The decision to re-fix the petitioner in the pay-scale of Rs.4000-6000 is on the basis of order dated 28.4.2005. The petitioner has acquired a vested right to be fixed in the higher pay-scale of Rs.5500-9000 on the basis of order dated 15.8.2004. He has been paid the arrears with effect from 9.8.1999 and his retiral benefits were calculated on the - 5 - basis of this pay-scale. It appears that initially the cadre of A.S.I. was not constituted in the Indian Tibet Border Police and a decision has been taken as is evident from order dated 28.4.2005 to introduce the rank of A.S.I. in the Organisation. The purpose of granting the higher pay-scale to the petitioner and the similarly situated persons was to reduce the stagnation in the cadre. In the present case, the petitioner was promoted to the post of Head Constable in the year 1987 and on the basis of Assured Career Progressions Scheme, he had been granted the higher pay-scale with effect from 9.8.1999 after completion of 12 years of service. The petitioner and the similarly situated persons after the grant of higher pay-scale under Assured Career Progression Scheme constitute a special Class and their pay-scale on the basis of Annexure P-2 was to be protected and could not be altered on the basis of order dated 28.4.2005. The petitioner had made a representation against the recovery of a sum of Rs.1,26,259/- and his reduction in pay-scale from Rs.5500-90000 to Rs.4000-6000. The same was rejected only on the basis of order dated 28.4.2005. It was open to the respondents though to constitute the cadre of A.S.Is. at par with Delhi Police Force, but without disturbing the rights of the petitioner, more particularly, when he was on the verge of retirement. The rights of the petitioner have been adversely affected on two grounds; firstly recovery of Rs.1,26,259/- has been effected from his D.C.R.G. and secondly, his pension has also been reduced substantially on the basis of Annexure P-5. A policy decision has been taken by the respondents to introduce the Assured Career Progression Scheme to reduce the stagnation. The A.C.P.S. was implemented in the case of the petitioner and he was granted the pay-scale of Rs.5500-9000 with effect from 9.8.1999 on the basis of Annexure P-2. The policy decision - 6 - has been communicated and acted upon by the parties. The petitioner had been granted the higher pay-scale immediately after completion of 12 years of service as per A.C.P.S. The decision has been taken by the respondents at their own level. The petitioner has neither misled nor concealed any facts from the respondents. The petitioner’s pay was thus rightly fixed in the pay-scale of Rs.5500-9000 and it cannot be presumed by any stretch of imagination that it is a case of wrong fixation. The pay fixation is on the basis of the decision/order dated 15.8.2004. The respondents have failed to show that there is any legislative provision or statutory rule contrary to the Assured Career Progression Scheme which had been introduced and which has led to the issuance of Order dated 28.4.2005. The respondents are estopped from backing out the promise held out to the petitioner on the basis of Annexure P-2, dated 15.8.2004. The respondents are bound to honour their promise. The petitioner had been granted higher pay- scale and he had been paid the arrears as well as retiral benefits.. Their Lordships of the Hon’ble Supreme Court in Divisional Superintendent, Eastern Railway, Dinapur and others v. L.N. Kashri and others, AIR 1974 SC 1889 have held as under:- “The respondents were confirmed in the scale of Rs.110-180. The appellants having fixed the scale and confirmed the respondents could not reduce the scale without giving any opportunity to the respondents to be heard. Furthermore, the respondents on confirmation became entitled to rights to the post and to the scale of pay fixed by the Board.” Their Lordships of the Hon’ble Supreme Court in Bhagwan Shukla v. Union of India and others, AIR 1994 SC 2480 have held that before the conditions of service are altered, an employee should be given an opportunity to show cause, more particularly, when the - 7 - basic pay has been reduced retrospectively as in the present case. Their Lordships have held as under:- “We have heard learned counsel for the parties. That the petitioner’s basic pay had been fixed since 1970 at Rs.190/- p.m. is not disputed. There is also no dispute that the basic pay of the appellant was reduced to Rs.181/- p.m. from Rs.190/- p.m. in 1991 retrospectively w.e.f. 18-12-1970. The appellant has obviously been visited with civil consequences but he had been granted no opportunity to show cause against the reduction of his basic pay. He was not even put on notice before his pay was reduced by the department and the order came to be made behind his back without following any procedure known to law. There, has, thus, been a flagrant violation of the principles of natural justice and the appellant has been made to suffer huge financial loss without being heard. Fair play in action warrants that no such order which has the effect of an employee suffering civil consequences should be passed without putting the concerned to notice and giving him a hearing in the matter. Since, that was not done, the order (memorandum) dated 25-7-1991, which was impugned before the Tribunal could not certainly be sustained and the Central Administrative Tribunal fell in error in dismissing the petition of the appellant. The order of the Tribunal deserves to be set aside. We, accordingly, accept this appeal and set aside the order of the Central Administrative Tribunal dated 17-9-1993 as well as the order (memorandum) impugned before the Tribunal dated 25-7- 1991 reducing the basic pay of the appellant from Rs.190/- to Rs.181/- w.e.f. 18-12-1970.” The petitioner had completed 12 years of service and was placed in higher pay-scale of Rs.5500-9000 on the basis of order dated 15.8.2004. He had acquired vested right to remain in the pay-scale of Rs.5500-9000 and to get his pension fixed in this higher pay-scale. The vested rights which the petitioner had acquired were disturbed on - 8 - the basis of order dated 28.4.2005. The order dated 28.4.2005 cannot operate retrospectively since the petitioner had been granted higher pay scale as per Assured Career Progression Scheme. Their Lordships of the Hon’ble Court in K. Narayanan and others versus State of Karnataka and others, 1994 Supp (1) SCC 44 have held that the rules operate prospectively. Retrospectivity is exception. Their Lordships have further held that even where the statute permits framing of rule with retrospective effect the exercise of power must not operate discriminately or in violation of any constitutional right so as to affect vested right. The rule making authority should not be permitted normally to act in the past. Their Lordships have held as under: “Rules operate prospectively. Retrospectivity is exception. Even where the Statutes permits framing of rule with retrospective effect the exercise of power must not operate discriminately or in violation of any constitutional right so as to affect vested right. The rule making authority should not be permitted normally to act in the past. The impugned rule made in 1985 permitting appointment by transfer and making it operative from 1976 subject to availability of vacancy in effect results in appointing a Junior Engineer in 1986 with effect from 1976. Retrospectivity of the rules is a camouflage for appointment of Junior Engineers from a back date. In our opinion the rule operates viciously against all those Assistant Engineers who were appointed between 1976 to 1985. In Ex-Capt. K. C. Arora v. State of Haryana (1984) 3 SCC 281 : (AIR 1987 SC 1858) and P. D. Aggarwal v. State of U.P. (1987)3SCC 622 : (AIR 1987 SC 1676) it was held by this Court that the President or Governor cannot make such retrospective rules under Art. 309 of the Constitution as contravene Art. 14, 16 or 311 and affect vested right of an employee. Even in B. S. Yadav v. State of Haryana (1981) 1 SCR 1024 : (AIR 1981 SC 561) where - 9 - the power to frame rules retrospectively was upheld it was observed (para 76 of AIR) : "Since the Governor exercises a Legislative power under the proviso to Art. 309 of the Constitution, it is open to him to give retrospective operation to the rules made under that provision. But the date from which the rules are made to operate must be shown to bear, either from the face of the rules or by extrinsic evidence, reasonable nexus with the provisions contained in the rules, especially when the retrospective effect extends over a long period as in this case." As seen earlier there is no nexus between framing a rule permitting appointment by transfer and making it retrospective with effect from 1976. Appointing a person to a higher post in a different cadre in which he has never worked is violative of constitutional guarantee of those who are working in the cadre. It is against basic principle of recruitment to any service. Even in Mohammad Shujat Ali (AIR 1974 SC 1631) (supra) where the Constitution Bench while reiterating that distinction in qualification was valid criteria for determining eligibility for promotion except where both held the same post and perform same duty did not strike down the rules as the differentiation in same class of persons was not brought about for the first time but existed from before and the two were treated as distinct and separate class. The retrospective operation of the impugned rule attempts to disturb a system which has been existing for more than twenty years. And that too without any rationale. Absence of nexus apart no rule can be made retrospectively to operate unjustly and unfairly against other. In our opinion the retrospective operation of the rule with effect from 1st January, 1976 is discriminatory and violative of Arts. 14 and 16.” Their Lordships of the Hon’ble Supreme in Chairman, Railway Board and others versus C.R. Rangadhamaiah and - 10 - others (1997) 6 SCC 623 have explained expression “vested rights” or “accrued rights”. Their Lordships have held that the expression “vested rights” or “accrued rights” are used in the context of a right flowing under the relevant rule which was sought to be altered with effect from an anterior date and thereby taking away the benefits available under the rule in force at that time. Such an amendment having retrospective operation which has the effect of taking away a benefit already available to the employee under the existing rule is arbitrary, discriminatory and violative of the rights guaranteed under Articles 14 and 16 of the Constitution. Their Lordships have held as under: “In many of these decisions the expressions "vested rights" or "accrued rights" have been used while striking down the impugned provisions which had been given retrospective operation so as to have an adverse effect in the matter of promotion, seniority, substantive appointment, etc. of the employees. The said expressions have been used in the context of a right flowing under the relevant rule which was sought to be altered with effect from an anterior date and thereby taking away the benefits available under the rule in force at that time. It has been held that such an amendment having retrospective operation which has the effect of taking away a benefit already available to the employee under the existing rule is arbitrary, discriminatory and violative of the rights guaranteed under Articles 14 and 16 of the Constitution. We are unable to hold that these decisions are not in consonance with the decisions in Roshan Lal Tandon (AIR 1967 SC 1889) (supra); B. S. Yadav (AIR 1981 SC 561) (supra) and Raman Lal Keshav Lal Soni (AIR 1984 SC 161) (supra).” In view of the aforesaid reasons, the writ petition is allowed. Annexures P-4, P-5 and P-8 are quashed and set aside. The - 11 - respondents are directed to release a sum of Rs.1,26,259/- to the petitioner with interest at the rate of 12% per annum. The respondents are further directed to fix the pension of the petitioner in the pay-scale of Rs.5500-9000 within eight weeks from today. No order as to costs. (Rajiv Sharma) Judge. July 28, 2008. (sck).