IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE NINTH DAY OF JULY TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI JUSTICE V.ESWARAIAH and THE HON'BLE SRI JUSTICE P.SWAROOP REDDY WRIT PETITION NO : 18104 of 1997 Between: B. Radha Krishna Murthy, s/o Raghavaiah, Kareemnagar Dist Co-operative Central Bank, Kareemnagar. ..... PETITIONER AND 1 The Managing Director A.P. State Co-operative Bank, Abids Road, Hyderabad. 2 The General Manager, Kareemnagar Dist Co-operative Cerntral Bank Ltd., Kareemnagar. 3 The Commissioner & Registrar of Co-operative Societies A.P., Jawaharlal Nehru Road, Nampally, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue an order, direction or an appropriate writ more particularly in the nature of Writ of Mandamus directing the respondents to extend the benefits of encashment to leave of 240 days and the Gratuity equivalent to the sum of 20 months Salary to the petitioner herein and pay the Difference of leave Encashment and gratuity to the petitioner within a Specified time by holding that fixing of arbitrary cut off date as 7.11.1996 as the date to become eligible for such enhanced leave encashment of 240 days and gratuity to the petitioner equivalent to the same of 20 months salary as arbitrary, illegal, unjustified, discriminatory and violative of Articles 14 & 16 of the Constitution of India beside the law laid down by the Hon'ble Supreme Court of India in Nakara’s Case and seaside the said date. Counsel for the Petitioner:MR.GOPALA RAO GANDRAKOTA Counsel for the Respondent No.: MR.A.H.RAMA KRISHNA RAO (SC FOR APCOB) The Court made the following : VE & PSR, JJ. W.P.No. 18104 of 1997 O r d e r: (Per P. Swaroop Reddy, J.) This is a reference made by our learned brother – Justice C.V. Nagarjuna Reddy. 2. This writ petition is filed seeking relief of granting the benefit of encashment of leave for 240 days and gratuity equivalent to a sum of twenty months salary to the petitioner by holding that fixation of 07.11.1996 as cut-off date as arbitrary and violative of Articles 14 and 16 of the Constitution of India. 3. Before the learned single Judge, a copy of the order in W.P.No. 16778 of 1997 decided on 8.2.2007, wherein another learned single Judge upheld the cut-off date, as 7-11-1996, as fixed by the respondents- herein was placed. The decision of the Hon’ble Apex Court in D.S. Nakara v. Union of India[1] placed was also before the learned Single Judge, on the basis of which it was contended that fixation of 7.11.1996 as cut-off date for the persons who retired prior to that date i.e., 7.11.1996 for getting retiremental benefits was arbitrary. It is observed by the referring Judge that while hearing W.P.No. 16778 of 1997, the judgment of the Constitution Bench in D.S. Nakara’s case (1 supra) was not brought to the notice of the learned single judge who heard W.P.No. 16778 of 1997. 4. The facts relevant are: The petitioner was appointed as a Supervisor on 8.7.1966, in the Land Mortgage Bank, Sultanabad, Kaeemnagar District, which was later amalgamated with the first respondent – The A.P. State Cooperative Bank on 1.4.1987, on which the petitioner was working as an Accountant. He retired as Accountant from the second respondent i.e., Karimnagar District Cooperative Central Bank Ltd., on 31.10.1996, on attaining the age of superannuation. 5. In respect of the employees of A.P. State Cooperative Bank, the bank has been allowing encashment of leave for 240 days and gratuity equivalent to twenty months salary. The employees working in the branches of the Central Bank working in the District were being allowed encashment only for 180 days and were being paid gratuity equivalent to the amount of fifteen months salary. Thus there and discrimination among the employees that were discharging same work. Later on 7.11.1996,t he Commissioner for Cooperation and Registrar of Cooperative Societies, AP, Hyderabad vide letter Rc.No.33842/95-C3 dated:7.11.1996 addressed all the General Managers of the District Cooperative Central Banks for enhancement of the leave encashment from 180 to 240 days and gratuity amount equivalent to the salary of twenty months, instead of fifteen months, to the employees retiring on superannuation or death with retrospective effective from the date of amendment carried out to the service regulations in respect of the District Cooperative Central Banks.. It was also mentioned in that letter that this benefit shall be extended with retrospective effect. By letter Rc.No.33842/95-C3 dated: 19.11.1996 the Commissioner for Cooperation and Registrar of Cooperative Societies clarified that the encashment of leave from 180 to 240 days and gratuity amount equivalent to fifteen months to twenty months pay can be allowed to the employees of the District Cooperative Central Banks, retiring on superannuation or death in the existing framework of the I.D. Award and the benefits shall be extended with retrospective effect from the date of issue of the orders, by letter dated:7.11.1996. 6. The petitioner contended that the A.P. Cooperative Central Bank is a State owned Bank, managed by the State Government. The Government employees are entitled for the benefit of encashment of earned leave of (240) days and gratuity equivalent to twenty months pay and the employees working in A.P. Cooperative Central Bank at Hyderabad are enjoying the said benefit since long time. Only the employees working in District Cooperative Central Banks were allowed the benefit of encashment of leave for 180 days and gratuity equivalent to fifteen months salary. In spite of repeated requests made by the effected employees, there was no response initially. However, the employees working in District Cooperative Central Banks were allowed the said benefit fixing the cut off date as 7.11.1996, the date from which the employees in District Cooperative Central Banks in the Districts would be eligible for such benefit. 7. According to the petitioner, fixing the cut-off date for extending the said benefit is highly irrational, arbitrary, unjustified, illegal, discriminatory and violative of Articles 14 and 15 of the Constitution of India. 8. The petitioner retired from service on 31.10.1996 on attaining the age of superannuation. As already referred, on account of the cut-off date being fixed as 7.11.1996, he would not be entitled for the benefit of amended enhanced encashment of leave and gratuity. As he retired just six days earlier to the cut-off date, he lost the said benefit. According to the petitioner, the cut-off date had no nexus to the object to be achieved and the same is arbitrary, illegal, unjust and discriminatory. 9. The second respondent filed counter contending that fixing of cut- off date as 7.11.1996 is not arbitrary. Normally the amendment would come into effect from the date of its approval or from the date of the proceedings issued and not retrospectively. That the decision of the Hon’ble Supreme Court in D.S. Nakara’s case (1 supra) has no application to the facts of the present case. 10. The third respondent filed its counter stating that on the request of the A.P. Cooperative Central Bank Employees Association vide their letter dated:7.5.1995 and their subsequent letters for enhancement of leave encashment from 180 days to 240 days and gratuity from 15 months to twenty months pay, was agreed finally and proceedings were issued vide Rc.No.33842/96-C3 dated:7.11.1996 with prospective effect from the date of the amendment carried out to the service regulations of the District Cooperative Central Bank Employees or to the Award and the same was further clarified in proceedings Rc.No.33842/95-C3 dated:19.11.1996, extending the benefit from the date of issue of the earlier order i.e., 7.11.1996 and that there is no discrimination. 11. Now, the question is whether the petitioner is entitled for the benefits of amended enhanced encashment of leave and gratuity for which the cut-off date was fixed as 7.11.1996. 12. The Hon’ble Supreme Court in Nakara’s case (1 supra) in paragraph-65 observed: “That is the end of the journey. With the expanding horizons of socio-economic justice, the socialist Republic and Welfare State which we endeavor to set up and largely influenced by the fact that the old men who retired when emoluments were comparatively low and are exposed to vagaries of continuously rising prices, the falling value of the rupees consequent upon inflationary inputs, we are satisfied that by introducing an arbitrary eligibility criteria; ‘being in service and retiring subsequent to the specified date’ for being eligible for the liberalized pensions 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 liberalized pension and the eligibility criteria devised being thoroughly arbitrary, we are of the view that the eligibility for liberalized pension scheme of ‘being in service on the specified date and retiring sub- sequent to that date’ in impugned memoranda, Exhibits 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 asunder: In other words, in Ex P-1, the words: “that in respect of the Government servants who were in service on the 31st March, 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 1st April, 1979 and will be applicable to all service officers who became/become non-effective on or after that date” Are unconstitutional and struck down with the specification that the date mentioned there in will be relevant as being one from which the liberalized pension scheme becomes operative to all pensioners governed by 1972 Rules irrespective of the date of retirement. Omitting the unconstitutional 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 liberalized pension scheme from the specified date irrespective of the date of retirement. Arrears of pension prior to the specified date as per fresh computation is not admissible. Let a writ to that effect be issued. But in the circumstances of the case, there will be no order as to costs”. Thus, the Hon’ble Supreme Court felt that the people who retire when emoluments were comparatively low and are exposed to vagaries of continuously rising prices and inflation cannot be put to disadvantage by not being allowed for enhanced pensionary benefits. The order in Nakara’s case (1 supra) was pronounced by the Hon’ble Constitution bench in W.P.Nos. 5939 – 41 of 1980 on 17.12.1982. 13. The learned counsel appearing for the respondents contends that subsequent to the judgment in Nakara’s case (1 supra), the Hon’ble Apex Court has considered the same question in several other cases, which were summed up in Hari Ram Gupta v. State of UP[2], wherein, it was held that fixing of cut off date for entitlement of certain benefits for persons that have retired is appropriate. In this case, Hari ram Gupta, the petitioner wanted benefits of U.P. Palika (Centralized) Service Retirement Benefits Rules, 1981, though he retired from service, on superannuation in 1980. His contention was that 1980 – 1981 Rules are applicable retrospectively and that at any rate in view of the decision of the Hon’ble Supreme Court in Nakara’s case (1 supra), he is entitled for the benefit of new Rules. The Hon’ble High Court held that “the rules have no retrospective operation and the petitioner is not entitled to claim under the old rules.” In that case, prior to coming into force of 1981 Rules, referred to above, there were no rules providing pension for the employees of Centralized Service to which the petitioner belonged. It was contended before the Hon’ble Supreme Court, that the decision in Nakara’s case (1 supra) was watered down by the Hon’ble Apex Court in several subsequent cases stating that the employees retired on a particular date would be governed by the benefit of Rules then existing and cannot complain that people that retired subsequently are offered certain additional benefits. In paragraph-9 of the judgment in Hari Ram Gupta case (2 supra), the Hon’ble Apex Court observed that “It is to be noted that the aforesaid judgment was considered by this court in the subsequent Constitution Bench of Krishena Kumar v. Union of India[3], wherein the decision of Nakara case (1 supra) was explained and it was held that the pension retirees and provident fund retirees do not form one homogeneous class and on the other hand, the Rules governing the provident fund and its contribution are entirely different from the Rules governing pension therefore, it would not be reasonable to argue what is applicable to the pension retirees must also equally be applicable to the provident fund retirees.” 14. The Hon’ble Supreme Court further held in the above case – Krishena Kumar (3 supra) that the rights of each individual retire finally crystallized on his retirement where after no continuing obligation remained in case of those who are governed by Provident Fund Rules whereas in case of pension retirees, the obligation continues till the death of the employee. 15. In Union of India v. P.N. Menon[4] a similar question came up for consideration and distinguishing Nakara’s case (1 supra), and following Krishena Kumar (3 supra) and other similar cases, the court held that “whenever the Government or any other authority, which can be held to be a State within the meaning of Article 12 of the Constitution of India, frames a scheme for persons who have superannuated from the service, due to many constraints, it is not always possible to extend the same benefits to one and all, irrespective of date 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. Whenever a revision takes place and a cut-off date becomes imperative because, the benefit has to be allowed within the financial resources available with the Government.” 16. I n Indian Ex-Service League v. Union of India[5] another Constitution Bench of the Hon’ble Supreme Court considered similar question, where retired officers relied on Nakara’s case (1 supra), the Hon’ble Supreme Court negatived their claim following the decision in Krishen Kumar (2 supra) case. A similar decision was also taken by the Hon’ble Supreme Court in All India Reserve Bank Retired Officers’ Association v. Union of India[6], wherein the validity of introduction of pension scheme in lieu of contributory provident fund scheme was challenged on the ground that the bank employees who retire prior to 1.1.1986 have not been given the benefit of the said scheme and it was held that there was no arbitrariness. 17. The Hon’ble Supreme Court ultimately held that the appellant (Hari Ram Gupta) having superannuated prior to the Rules coming into force cannot claim the right to pension under the Rules with the help of the decision in Nakara’s case (1 supra), as the Rules do not have any retrospective operation. Thus, in view of the decision of the Hon’ble Supreme Court in Hari Ram Gupta’s case (2 supra) referred to above, where after considering the decisions of other Constitution Benches, rendered subsequent to the decision of the Constitution Bench in Nakara’s case (1 supra), it was held that fixing a cut-off date is not illegal, it has to be held that the petitioner herein is not entitled for the benefit, when he retired prior to the scheme coming into force and when a cut-off date was fixed and there is no arbitrariness in fixing the cit-off date for applicability of the relevant benefits and there is no violation of Article 14 of the Constitution of India. 18. Accordingly we find no merits in the writ petition and it is accordingly dismissed. No costs. __________________ V. ESWARAIAH, J. July 9, 2009. *BVS _______________________ P. SWAROOP REDDY, J. [1] AIR 1983 SC 130 [2] 1998 (6) SCC 328 [3] 1990 (4) SCC 207 [4] 1994 (4) SCC 68 [5] 1991 (2) SCC 104 [6] 1992 Supp (1) SCC 664