IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 15TH JANUARY 2009 / 25TH POUSHA 1930 OP.No. 33852 of 2001(E) ----------------------- PETITIONER(S): --------------- P.M. ITTIYAIRRAH, PALLYPADAN HOUSE, KARATTUPALLIKKARA, PERUMBAVOOR P.O., ERNAKULAM. BY ADV. SRI.P.K.RAVISANKAR RESPONDENT(S): --------------- 1. UNION OF INDIA, REP. BY SECRETARY, MINISTRY OF DEFENCE, NEW DELHI. 2. CHIEF CONTROLLER OF DEFENCE ACCOUNTS (PENSION), ALLAHABAD. 3. RECORD OFFICER, A.S.C. RECORDS (MT), BANGALORE-560 007. 4. DEFENCE PENSION DISBURSING OFFICER, D.A.D. COMPLEX, PERUMANOOR, ERNAKULAM. GOVERNMENT PLEADER SMT. K.R. DEEPA. SRI.B.N.SHIV SHANKAR, ADDL.CGSC FOR R3 SRI.TOJAN J.VATHIKULAM, ADDL.CGSC THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 06/01/2009, ALONG WITH OP NO. 13916 OF 2002, OP NO. 15732 OF 2002 O.P. NO. 30901 OF 2002 & OP NO. 2300 OF 2003 THE COURT, ON 15/01/2009 DELIVERED THE FOLLOWING: PETITIONER'S EXHIBITS: O.P.NO. 33852/2001. ---------------------------------------------------------------- EXT.P1 TRUE COPY OF REPRESENTATION DT. 15-4-2000. EXT.P2 LETTER DT. 29-4-2000. EXT.P3 LETTER DT. 27-5-2000. EXT.P4 LETTER DT. 24-9-1998. EXT.P5 LETTER DT. 7-2-2001. RESPONDENTS' EXHIBITS: ---------------------------------------- EXT.R1(a) RELEVANT PAGES OF ENTITLEMENT RULES. EXT.R1(b) RE-SURVEY MEDICAL BOARD PROCEEDINGS. EXT.R1(c) PROCEEDINGS ISSUED BY PCDA (PENSIONS), ALLAHABAD. EXT.R1(d) JUDGMENT OF PUNJAB & HARYANA HIGH COURT DT. 15-11-1996. [TRUE COPY] P.S TO JUDGE. S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= O.P. Nos. 33852/2001, 13916, 15732 & 30901/2002 and 2300/2003. =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 15th January, 2009. J U D G M E N T The petitioners in all these original petitions are military personnel discharged from service, who are receiving military pension on the disability element also taking into account disability suffered by them attributable to military service. They are aggrieved by the action of the respondents in the matter of fixing a cut off date for the purpose of application of a liberalised pension scheme in the matter of assessment of disability, based on the date of discharge of the military personnel. 2. Prior to the recommendation of the Vth Central Pay Commission, military personnel drawing disability pension were subjected to periodic examination by Re-survey Medical Boards every five years and pension was liable to be reviewed on the basis of the percentage of disability assessed by the Re-survey Medical Boards. The Vth Central Pay Commission recommended that the disability once assessed may be treated as final, unless the individual himself requests for a review. The Government of India accepted this recommendation and by Ext. P5 dated 7-2-2001 (in O.P.No. 33852/2001) on behalf of the President of India, the Director (Pensions) of the Ministry of Defence of Government of India, sanction was accorded for modification of the Rules and Regulations as stated therein. In the same, in respect of re-assessment of disability, it was stated thus in paragraph 7 thereof. “7. Re-assessment of Disability: There will be no periodical reviews by the Resurvey Medical Boards for re- assessment of disabilities. In cases of disabilities adjudicated as being of a permanent nature, the decision once arrived at will be final and for life unless the individual himself requests for a review. In cases of disabilities which are not of a permanent nature, there will be only one review of the percentage by a O.P.. No. 33852/01 etc. -: 2 :- Reassessment Medical Board, to be carried out later, within a specified time frame. The percentage of disability assessed recommended by the Reassessment Medical Board will be final and for life unless the individual himself ask for a review. The review will be carried out by Review Medical Board constituted by DGFMS. The percentage of disability assessed by the Review Medical Board will be final.” However, in paragraph 10 thereof, a cut off date was fixed as 1.1.1996 for application of the liberalised scheme of re-assessment of disability thus: “10. The provision contained in this letter will be applicable to service personnel who were in service on or after 1 Jan 96. The cases which have been finalised prior to issue of this letter will not be re-opened? As regards Pre 1 Jan 96 disability pensioners, the assessment made by the Reassessment Medical Board held on or after the date of issue of this letter will be considered as final and for life unless the individual himself asks for a review. This review will be carried out by Review Medical Board constituted by DGAFMS. The percentage of disability assessed by the Review Medical Board will be final.” This cut off date is sought to be challenged by the petitioners on the ground of arbitrariness, discrimination and violation of the fundamental rights of the petitioners guaranteed under Articles 14 and 16 of the Constitution of India. According to the petitioners such classification of pensioners on the basis of date of discharge is liable to be set aside on the ground that the said classification is not based on any intelligible differentia and does not have a rational nexus with the object sought to be achieved by the liberalised scheme. In support of their contentions, the petitioners rely on the decision of the Constitution Bench of the Supreme Court in D.S. Nakara v. Union of India, (1983) 1 SCC 305. 3. Although counter affidavit/statement has been filed in some O.P.. No. 33852/01 etc. -: 3 :- of the cases, no serious attempt has been made by respondents to justify the classification on the basis of an intelligible differentia or object sought to be achieved. However, the Central Government counsel appearing for the respondents sought to justify the cut off date relying on the decision of the Supreme Court in State of Punjab and others v. Amarnath Goyal and others, (2005) 6 SCC 754. 4. I have considered the rival contentions in detail. 5. I find that the facts of these cases are similar to those in Nakara's case (supra). In that case, the Government of India introduced a liberalised pension formula for retired Government servants and defence personnel, but stipulated that the same shall be applicable only to Government servants, who were in service on March 31, 1979 and retire from service on or after that date and defence personnel who became/become non-effective on or after April 1, 1970. In paragraph 9 of that decision, the Supreme Court posed the question for decision thus: “9. Is this class of pensioners further divisible for the purpose of 'entitlement' and 'payment' of pension into those who retired by certain date and those who retired after that date? If date of retirement can be accepted as a valid criterion for classification, on retirement each individual government servant would form a class by himself because the date of retirement of each is correlated to his birth date and on attaining a certain age he had to retire. It is only after the recommendations of the Third Central Pay Commission were accepted by the Government of India that the retirement dates have been specified to be 12 in number being last day of each month in which the birth date of the individual government servant happens to fall. In other words, all government servants who retire correlated to birth date on attaining the age of superannuation in a given month shall not retire on that date but shall retire on the last day of the month. Now, if date of retirement is a valid criterion for classification, those who retire at the end of every month shall form a class by themselves. This is too microscopic a classification to be upheld for any valid purpose. Is it permissible O.P.. No. 33852/01 etc. -: 4 :- or is it violative of Article 14?” 6. After referring to previous decisions of the Supreme Court on the scope of Article 14, the Court stated thus in paragraph 15. “15. Thus the fundamental principle is that Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation which classification must satisfy the twin tests of classification being founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question.” 7. Thereafter the court considered the question as to on whom the burden lies to affirmatively establish the rational principle on which the classification is founded correlated to the object sought to be achieved and held thus in paragraph 16: “16 ...... The State, therefore, would have to affirmatively satisfy the Court that the twin tests have been satisfied. It can only be satisfied if the State establishes not only the rational principle on which classification is founded but correlate it to the objects sought to be achieved. This approach is noticed in Ramana Dayaram Shetty v. International Airport Authority of India when at SCR page 1034(SCC p. 506), the Court observed that a discriminatory action of the Government is liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.” 8. After examining the concept of pension and its goals, the Supreme Court arrived at the following conclusions at paragraphs 27,28 and 29: 27. Viewed in the light of the present day notions pension is a term applied to periodic money payments to a person who retires at a certain age considered age of disability; payments usually continue for the rest of the natural life of the recipient. The reasons underlying the grant of pension vary from country to country and from scheme to scheme. But O.P.. No. 33852/01 etc. -: 5 :- broadly stated they are (i) as compensation to former members of the Armed Forces or their dependent for old age, disability, or death (usually from service causes), (ii) as old age retirement or disability benefits for civilian employees, and (iii) as social security payments for the aged, disabled, or deceased citizens made in accordance with the rules governing social service programmes of the country. Pensions under the first head are of great antiquity. Under the second head they have been in force in one form or another in some countries for over a century but those coming under the third head are relatively of recent origin, though they are of the greatest magnitude. There are other views about pensions such as charity, paternalism, deferred pay, rewards for service rendered, or as a means of promoting general welfare (see Encyclopaedia Britannica, Vol. 17, p. 575). But these views have become otiose. 28. Pensions to civil employees of the Government and the defence personnel as administered in India appear to be a compensation for service rendered in the past. However, as held in Douge v. Board of Education a pension is closely akin to wages in that it consists of payment provided by an employer, is paid in consideration of past service and serves the purpose of helping the recipient meet the expenses of living. This appears to be the nearest to our approach to pension with the added qualification that it should ordinarily ensure freedom from undeserved want. 29. Summing up it can be said with confidence that pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it is a measure of socio-economic justice which inheres economic security in the fall of life when physical and mental prowess is ebbing corresponding to aging process and, therefore, one is required to fall back on savings. One such saving in kind is when you give your best in the hey-day of life to your employer, in days of invalidity, economic security by way of periodical payment is assured. The term has been judicially defined as a stated allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service. Thus the pension payable to a government employee is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation or for service rendered. In one sentence one can say that the most practical raison d'etre for pension is the inability to provide for oneself due to old age. One may live and avoid unemployment but not senility and penury if there is nothing to fall back upon.” (Underlining supplied) O.P.. No. 33852/01 etc. -: 6 :- 9. Ultimately on the validity of the classification on the basis of the date of retirement the Supreme Court held thus in paragraph 42: “42. If it appears to be undisputable, as it does to us that the pensioners for the purpose of pension benefits form a class, would its upward revision permit a homogeneous class to be divided by arbitrarily fixing an eligibility criteria unrelated to purpose of revision, and would such classification be founded on some rational principle? The classification has to be based, as is well settled, on some rational principle and the rational principle must have nexus to the objects sought to be achieved. We have set out the objects underlying the payment of pension. If the State considered it necessary to liberalise the pension scheme, we find no rational principle behind it for granting these benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior to that date. If the liberalisation was considered necessary for augmenting social security in old age to government servants then those who retired earlier cannot be worst off than those who retire later. Therefore, this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory........” 10. Before applying the ratio of the above decision to the facts of these cases, it is worthwhile to note that while considering the issue, as is clear from paragraph 27 of that decision, the Supreme Court considered the scope of pension as compensation to former members of the Armed Forces or their dependents for old age, disability or death (usually from service causes) also, meaning thereby that the said decision applies to disability pension to military personnel discharged from service on account of disability attributable to military service, as in these cases. 11. I shall now examine whether the classification attempted by Ext.P5 satisfies, the twin tests of intelligible differentia and O.P.. No. 33852/01 etc. -: 7 :- rational nexus to the object sought to be achieved. Paragraph 164.10 of the Report Vth Commission has been quoted in the original petition thus: “4. In the meanwhile, the 5th Central Pay Commission submitted its report before the Central Government recommending, inter alia certain changes in the manner and the quantum of disability pension payable to Ex-Servicemen. In paragraph 164.10 of its report the Commission made the following recommendations. “164.10 The armed forces have also represented that the existing system of reassessment of disability after specific periods of time leads to considerable delays, thereby causing unnecessary hardship to the disabled pensioner. They have suggested that disability as stated in the Release Medical Board should be treated as final unless the individual request for a review. We have considered this aspect and agree that the existing system is prone to delays and since the personnel has been boarded out on the basis of the disability constant compensation is justified. We have already suggested rationalisation of the existing system of percentage of disability and in our opinion the scope for change in the degree of disability would be minimised. We have also suggested that for disability capable for improvement, provision to retain personnel should be made. Considering all these, we agree with the proposal that the disability once assessed may be treated as final unless the individual himself requests for a review.” Therefore the object of dispensing with the re-assessment of the disability is to avoid the delay and hardship to the disabled pensioners. What then is the intelligible differentia in classifying the disability pensioners on the basis of date of discharge, with reference to the object sought to be achieved? The respondents now seek to justify the fixation of the cut off date on the ground of financial constraint, relying on the decision in Amar Nath Goyals case (supra). But there is absolutely no pleading to that effect in their counter affidavit/statement. No materials are placed before me as to the financial implications on extending the benefit to O.P.. No. 33852/01 etc. -: 8 :- military personnel discharged from service prior to 1.1.1996 also. The number of discharged military personnel prior to 1.1.1996 eligible for this benefit may not be that much. In any event only five original petitions have been filed in this Court. As such I am satisfied that the respondents have not succeeded in justifying the classification on the basis of financial constraints. As such the respondents have not discharged their burden to justify the classification on any intelligible differentia with reference to the object sought to be achieved. In this connection, I also find that the ratio of the decision in D.S. Nakara's case was again applied by the Supreme Court in the recent decision of Union of India and another v. SPS Vains (Retd.) and others, (2008) 9 SCC 125, which is also a case relating to military pension, as per the Vth Pay Commission although on a different issue. In that case, a dispute arose on the question whether officers of the rank of Major General in the Army and of equivalent rank in the two other wings of the defence forces who had retired prior to 1.1.1996 have been validly excluded for the benefit of revision of pay scales in keeping with the recommendation of the fifth Central Pay Commission by virtue of a Special Army Instruction. Dealing with that issue, the Supreme Court held thus in paragraphs 26 to 30: “26. The said decision of the Central Government does not address the problem of a disparity having created within the same class so that two officers both retiring as Major Generals, one prior to 1-1-1996 and the other after 1-1-1996, would get two different amounts of pension. While the officers who retired prior to 1-1- 1996 would now get the same pension as payable to a Brigadier on account of the stepping up of pension in keeping with the fundamental rules, the other set of Major Generals who retired after 1-1-1996 will get a higher amount of pension since they would be entitled to the benefit of the revision of pay scales after 1-1-1996. 27. In our view, it would be arbitrary to allow such a O.P.. No. 33852/01 etc. -: 9 :- situation to continue since the same also offends the provisions of Article 14 of the Constitution. 28. The question regarding creation of different classes within the same cadre on the basis of the doctrine of intelligible differentia having nexus with the object to be achieved, has fallen for consideration at various intervals for the High Courts as well as this Court, over the years. The said question was taken up by a Constitution Bench in D.S. Nakara [(1983) 1 SCC 305] where in no uncertain terms throughout the judgment it has been repeatedly observed that the date of retirement of an employee cannot form a valid criterion for classification, for if that is the criterion those who retired by the end of the month will form a class by themselves. In the context of that case, which is similar to that of the instant case, it was held that Article 14 of the Constitution had been wholly violated, inasmuch as, the pension Rules being statutory in character, the amended Rules, specifying a cut-off date resulted in differential and discriminatory treatment of equals in the matter of commutation of pension. It was further observed that it would have a traumatic effect on those who retired just before that date. The division which classified pensioners into two classes was held to be artificial and arbitrary and not based on any rational principle and whatever principle, if there was any, had not only no nexus the objects sought to be achieved by amending the Pension Rules, but was counterproductive and ran counter to the very object of the pension scheme. It was ultimately held that the classification did not satisfy the test of Article 14 of the Constitution. 29. The Constitution Bench (in D.S. Nakara) has discussed in detail the objects of granting pension and we need not, therefore, dilate any further on the said subject, but the decision in the aforesaid case has been consistently referred to in various subsequent judgments of this Court, to which we need not refer. In fact, all the relevant judgments delivered on the subject prior to the decision of the Constitution Bench have been considered and dealt with in detail in the aforesaid case. The directions ultimately given by the Constitution Bench in the said case in order to resolve the dispute which had arisen, is of relevance to resolve the dispute in this case also. 30. However, before we give such directions we must also observe that the submissions advanced on behalf of the Union of India cannot be accepted in view of the decision in D.S. Nakara case. The object sought to be achieved was not to create a class within a class, but to ensure that the benefits of pension were made available to all persons of the same class equally. To hold otherwise would cause violence to the provisions of Article 14 of the Constitution. It would not also have been the intention of the authorities to equate the pension payable to officers of two O.P.. No. 33852/01 etc. -: 10 :- different ranks by resorting to the step-up principle envisaged in the fundamental rules in a manner where the other officers belonging to the same cadre would be receiving a higher pension.” 12. The reason for invaliding military personnel out of service is that he is unable to discharge his duties as a military personnel because of the disability suffered by him, attributable to military service. The condition is that the percentage of disability shall not be less than 20%. Therefore, he is discharged on finding that he has suffered a disability which disables him to discharge his duties as a military personnel because the percentage of disability is 20% or more. If on examination of re-survey medical board it is found that his disability has been reduced below 20% would the military reinstate in his service? Obliviously no. If the original disability is reduced but above 20%, would that change the status of the pensioner? The answer to that is also no. Then what is the difference between those persons discharged on or after 1.1.1996 and those discharged prior to 1.1.1996? I do not see any. What is the difference between a reassessment of disability made on 31.12.1995 and one made on 1.1.1996. If a re-assessment made on 1.1.1996 can be final, why not a re-assessment made on 31.12.1995 also? Had paragraph 10 of Ext.P5 said merely that re-assessment made prior to 1.1.1996 would be final, then also the purpose would be served and the object would be achieved. Therefore I am satisfied that the ratio of the decisions of the Supreme Court in Nakara's case and SPS Vains' case (supra) squarely applies to the facts of this case. Accordingly, I declare that the cut off date of 1.1.1996 fixed in paragraph 10 of Ext.P5 (in O.P. 33852/01 which is the one under challenge in all the original petitions, is arbitrary, discriminatory and unconstitutional. The same is therefore hereby struck down. The eligibility for disability pension of all petitioners' O.P.. No. 33852/01 etc. -: 11 :- shall be finalised on the basis of the disability already fixed prior to 1.1.1996 and the same shall not be re-opened on the basis of any re- assessment. All the petitioners shall be paid disability