HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION No.850 of 1999 Dated: 10-12-2009 Between: M.Sudershanam, S/o M. Devadanam, Visakhapatnam District and others. … Petitioners And Commissioner and Director of School Ecucation, A.P., Khairatabad and others. … Respondents For the petitioners : Sri Vedula Srinivas. For the Respondents : Sri P. Sree Raghuram. G.P. for School Education. < Gist: > Head Note: ? CITATIONS: 1. 1990(4) SLR 716 2. 1990(4) SLR 1 : AIR 1990 SC 1229 : (1990) 3 SCC 521 3. 1984(2) SLR 334 : AIR 1984 SC 1388 : 1984(3) SCC 518 THE HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO W.P.NO. 850 OF 1999 ORDER: This writ petition has been instituted by three teachers of the 4th respondent – school questioning the legality and validity of the orders issued by the 1st respondent – Commissioner and Director of School Education, Government of Andhra Pradesh, Hyderabad on 7.12.1998 directing the 2nd respondent – District Educational Officer, Visakhapatnam to stop payment of pension to them. They also called in question the consequential proceedings issued by the 2nd respondent – District Educational Officer directing the 3rd respondent – District Treasury Officer, Visakhapatnam on 22.12.1998 to stop releasing pension with immediate effect to them. The 1st petitioner worked and retired as a Head Master of the 4th respondent – High School run and managed by the Dock Labour Board, Visakhapatnam. The other petitioners have also worked as teachers in the said school and have retired from service. Prior to introduction of Pension Rules with effect from 1.4.1979, the Dock Labour Board was according the benefit of “Contributory Provident Fund” to its employees. Upon introduction of the pension scheme by it with effect from 1.4.1979, it gave option to all the employees who entered service of the Dock Labour Board prior to 1.4.1979 to exercise options either to remain in the contributory provident fund scheme or to move over to the new pension scheme, and in the latter event, the contributions made by the management to the provident fund would be retrieved by them. The writ petitioners have exercised option along with other teaching and non- teaching staff of the school to remain in the contributory provident fund scheme instead of switching over to the pension scheme. The 1st petitioner has retired from service on attaining the age of superannuation on 31.1.1991, followed similarly by the other petitioners. The 4th respondent – school was admitted to grant-in-aid scheme by the State government. Subsequently, the state government also introduced `pension scheme’ to the teaching and non-teaching staff who rendered service against grant-in-aid posts. Thus, the writ petitioners started receiving pension paid by the state government. The Dock Labour Board passed Resolution No.77/1984 withdrawing the contributory provident fund scheme. In the company of 23 others, the writ petitioners herein have filed WP No. 65 of 1985 questioning the validity and legality of the said Resolution No. 77/1984 passed by the Dock Labour Board, Visakhapatnam. A learned single Judge of this court allowed the said writ petition on 19.9.1989. Dock Labour Board carried the matter in appeal preferring WA No. 316 of 1990 there against. The Division Bench dismissed the said writ appeal on 21.11.1992. Hence the Contributory Provident Fund benefits were paid. The impugned order has been passed by the Commissioner and Director of School Education, upon a misconception that the writ petitioners, who are in receipt of contributory provident fund by the Dock Labour Board are not entitled to receive pensionary benefits and hence directed the District Educational Officer to stop payment of pension. Hence, this writ petition has been filed. On behalf of the respondents 1 to 3, the District Educational Officer, Visakhapatnam filed counter affidavit in the matter and contested this case. It is contended that the writ petitioners are not entitled to derive two sets of retirement benefits, one by way of contributory provident fund paid by the Dock Labour Board and another by way of pension paid by the State government. Whereas all retired persons are entitled to either the contributory provident fund benefit or the pension, but not both. Therefore, the action of the Commissioner of School Education in ordering for stoppage of payment of pension is justified. The 4th respondent in its counter affidavit has admitted the fact that the writ petitioners have exercised their option to continue under the contributory provident fund scheme and accordingly they were paid the contributory provident fund but, however, when the State Government has introduced pension scheme for such of its staff who have been admitted to grant-in-aid, they have taken a decision to withhold pension over which decision the Dock Labour Board has no control. It is not in dispute that the writ petitioners are teachers working with the 4th respondent – Dock Labour Board High School at Visakhapatnam. The Dock Labour Board has established two schools, a primary school and the other, the 4th respondent high school. The said schools were established in terms of the provisions contained under section 5-A of the Dock Workers (Regulation of Employment) Act, 1948. The Dock Labour Board has introduced in the year 1962 contributory provident fund scheme, as one of the terminal benefits to be accorded to its employees. The writ petitioners were members of the said contributory provident fund scheme. As is required, the Dock Labour Board was contributing an equal amount along with the employee members to the contributory provident fund scheme. The Dock Labour Board framed, Employees Pension and Gratuity Rules bringing into force from 1.4.1979 payment of pension scheme. The afore mentioned rules have been framed in terms of Section 3 of the Dock Workers (Regulation of Employment) Act, 1948. In accordance with these pension rules, the Dock Labour Board has accorded an option to its employees who were in service as on 1.4.1979 to opt either to remain under the contributory provident fund scheme or switch over to the pension scheme. It was made clear that options once exercised by the employees will be regarded as final. It is a fact that the petitioners amongst 44 of the employees of the Dock Labour Board opted to remain under the contributory provident fund scheme only. Therefore, they were not entitled to be paid pension under the pension rules framed by the Dock Labour Board. The State Government has admitted various posts, both teaching and non- teaching in the 4th respondent – school to grant-in-aid. Consequently, such of those teaching and non-teaching staff are paid their salary and other emoluments by the State Government in terms of grant-in-aid scheme evolved by it. The State Government of Andhra Pradesh has taken a policy decision through their orders contained in G.O. (p) 1132, Education Department, dated 16.11.1973 introducing payment of pension for all the aided school teachers and non-teaching staff. Consequently, teaching and non-teaching staff of aided educational institutions became entitled for payment of pension from the state government funds. To these funds, it will be relevant to note that the Dock Labour Board, the principal employer of the writ petitioners was not required to make any contribution. In other words, the payment of pension undertaken by the State Government of Andhra Pradesh to the employees of aided educational institutions is a non-contributory scheme. The whole financial burden is that of the State government only. Coming to know of the introduction of payment of pension by the State Government to such of those employees who have been admitted to grant-in-aid like the writ petitioners herein, the Dock Labour Board passed a resolution bearing No. 77/84 withdrawing the contributory provident fund scheme in respect of 44 employees working in the aided schools established by the said Board. That gave rise to the institution of WP No. 65 of 1985. The present petitioners herein are petitioner Nos. 11, 12 and 24 to the said writ petition. A learned single Judge of this court by his judgment rendered on 19.9.1989 allowed the said writ petition. The Dock Labour Board and the Correspondent of the two schools run by it carried the matter in appeal by preferring WA No. 316 of 1990. It was contended by them before the Division Bench that the writ petitioners who now had the advantage of payment of pension pursuant to the orders of the State Government contained in their G.O. Ms. No. 1132, are not entitled to take advantage of the option provided to them under the Pension Rules framed by the Dock Labour Board as it would amount to securing two superannuation benefits by them, one in the form of contributory provident fund and the other by way of payment of pension from the state government. It was also contended by the appellants therein that all other Dock Labour Board Employees would be entitled to either contributory provident fund scheme benefits or the benefit of pension scheme, but not both and hence the resolution No. 77/1984 passed by the Dock Labour board was intended to rectify the discrimination brought about by the entitlement of these 44 employees for payment of pension from the State government. The Division Bench has noticed the judgments rendered by the Supreme Court in Krishena Kumar v. Union of India, Smt. Shakuntala Mehrishi v. New Delhi Municipal Committee and Katheeja Bai v. Superintending Engineer and then concluded the issue in the following manner: “The assumption which the Board has made that the employees are not entitled to more than one superannuation benefit is of no avail in this case as employees are not seeking the benefit of contributory provident fund scheme and the pension scheme – both from the Board. They seek only continuance of the Contributory Provident Fund scheme which is the only superannuation benefit which the Board is bound to give them in terms of the pension rules. The fact that as teachers and non-teaching staff of aided schools they are entitled to pension from the coffers of the State shall be no consideration for the Board to deny the only superannuation benefit which the petitioners had opted finally in terms of clause 1(c) of the Pension Rules. Respondents are not therefore right in insisting that the petitioners who are entitled to the benefit of G.O. 1132 could not exercise their option in terms of clause 1(c) of the Pension Rules and the cancellation of such invalid options by resolution No.77/84 cannot be assailed nor are they right in insisting that the effect of the resolution was only to clarify that position. We are not impressed by the submission that the effect of allowing the petitioners to claim continuance under the Contributory Provident Fund Scheme would result in undue discrimination in their favour and that may lead to unrest among other employees. Petitioners who are teachers and non-teaching staff of aided educational institutions form a class by themselves. The fact that the State Government is obliged to pay pension to such employees does not result in discrimination among the same class of employees.” Thus, it is clear that the Division Bench had no hesitation to reject the contention that the effect of allowing the writ petitioners to claim continuance under the contributory provident fund scheme would result in an undue advantage for them to get paid pension by the state government also. WA No. 316 of 1990 was thus dismissed on 21.11.1992. This judgment has become final. Consequently, the Dock Labour Board, Visakhapatnam has settled the benefits arising out of the contributory provident fund scheme to the retired employees of the two schools run by them. Though the Director of School Education or the District Educational Officer, Visakhapatnam or the State Government of Andhra Pradesh is not a party to either WP No. 65 of 1985 and consequently WA No. 316 of 1990, but, however, the fact remains that the question that has engaged the attention of this court was precisely whether the right to receive pension by the teaching and non teaching staff of the two schools established by the Dock Labour Board would disentitle them from receiving the benefits under contributory provident fund scheme also. As noticed supra, this court has emphatically held that payment of benefits under the contributory provident scheme is entirely independent from the obligations of the State government arising from their policy decision announced through G.O. Ms. No.1132, dated 16.11.1973 introducing pension scheme to the teaching and non- teaching staff employed in aided educational institutions. When once this court had already held that the obligation to receive pension by the writ petitioners does not come in their way to remain under the contributory provident fund scheme, it must necessarily follow logically that both these benefits are independent of each other. There is no doubt that both of them are superannuation benefits. If both the benefits are required to be paid by one and the same authority perhaps there would have been some justification to insist for payment of any one of the benefits, but not both simultaneously. However, when both these benefits are liable to be settled and become payable by two different authorities, no “interest conflicting zone” would crop us. Payment of pension to the aided school staff is undertaken by the state government. Such staff are paid the superannuation benefit of pension from out of its coffers. Payment of pension to the aided school staff has obviously been undertaken by the State as a welfare measure, in recognition of the obligations thrust upon it by Article 41 contained in Part IV of our Constitution. It is set out therein that the State shall, within the limits of its economic capacity and development, make effective provision for securing public assistance in cases of old age, sickness and disablement. Therefore, the State upon a proper consideration of all relevant factors had considered it appropriate to provide for public assistance in the form of payment of pension for its citizens in their old age. Such a measure was contemplated to secure promotion of the welfare of its people and would also prevent its citizens from being forced, wholly out of economic necessity, to enter avocations which are unsuited to their age and strength. Payment of pension by the State is in recognition of the contribution made by men and women during their long useful years for the overall development and benefit of the state. Payment of pension is no longer treated or considered as a bounty or as an act of charity on the part of the State. It is intended to ensure that citizens who have contributed during their younger years of strength and vitality, for the growth of the society at large and played a key role in realizing the developmental goals set by the State, and the aspirations of the society, will live in the evening of their lives with their heads held high. They need not be saddled with a perpetual fear of an oncoming tomorrow. They are not required to wage a struggle, notwithstanding the progressive debility of their physical prowess, for sustaining and seeing them through the next day. It is intended to ensure that the “aged” would be able to live with the necessary dignity and honour. They should feel a meaning to their continued living. Therefore, this obligation has been undertaken by the State Government, though it is conscious that the schools are all established by the private managements and that the State Government has admitted such institutions for payment of grant-in-aid. There is also another facet to this issue viz., the State Government is under an obligation to endeavour to provide for free and compulsory education for all children until they complete the age of 14 years. This obligation was cast by Article 45 of our Constitution. Right to receive compulsorily, primary education, is a fundamental right, too. Since the State, keeping a careful eye on its sectoral allocations of budgetary provisions, and the priorities in fiscal allocations, would provide for these compulsory educational facilities, on a limited scale and hence encouraged and allowed private educational institutions to be established at various places across the length and breadth of the State. Thus, some of the burden in this regard is initially shifted to private sector. Therefore, the principal employers of the teaching and non-teaching staff in such schools are mostly private institutions or body of men who established such schools. In certain cases, some societies also may have established schools to cater to the educational needs and demands of the society at large. Notwithstanding this fact, that the teaching and non-teaching staff employed in such schools are truly the employees of the private organizations or body of men, by admitting such educational institutions to grant-in-aid, the State has undertaken to fund such institutions to the extent of payment of salary and emoluments and the maintenance grant. Even then, the State Government has not become the principal employer of all such teaching and non-teaching staff employed in aided educational institutions. Such men continue to be employees of the private organizations which established the school concerned. If the organizers of such societies or even in cases of individuals, who established schools conceive to provide additional superannuation benefits in favour of their teaching and non-teaching staff, can the state government grudge the same, merely because it has introduced pensionary scheme in favour of such employees? The answer is, payment of any additional superannuation benefits by the principal employer has no bearing upon the obligation of the state government to pay pension to the teaching and non-teaching staff undertaken by it insofar as aided educational institutions are concerned. Such additional superannuation benefits are complementary to the pensionary benefits, which the state government pays, but, not contradictory or conflicting to each other. This, perhaps, can better be illustrated for easy comprehension. Payment of Gratuity Act, 1972, requires the employers to pay 15 days average wages, for every completed year of service rendered, to such employees who have rendered a minimum 5 years of service. Suppose, an ideal employer prescribes, as a condition of service, to pay all such employees who have rendered at least 3 years service, 30 days average emoluments for every completed year of service, as Gratuity, the same cannot be faulted at all. Hence the payment of benefits under the contributory provident fund scheme introduced by the Dock Labour Board in the year 1962 has no connection whatsoever with the obligations cast upon the state government by its undertaking to pay pensionary benefits to the teaching and non-teaching staff in aided educational institutions. It is purely, incidental that the school where the petitioners worked was established by the Dock Labour Board and that Dock Labour Board was under an obligation to pay the benefits under the Contributory Provident Fund scheme. The Commissioner and Director of School Education should have carefully studied and assessed properly the implications before unilaterally ordering for stoppage of payment of pension. Before such orders are passed great care, caution and thought process ought to have been spared. Stoppage of payment of pension, in certain cases may bring about disastrous or even irreversible consequences. Therefore, orders of the nature passed by the Commissioner and Director of School Education as was done in the instant case on 7.12.1998, could not have been passed without complying with the principles of natural justice of providing an opportunity of hearing to the person who is likely to be impacted by any such decision. An opportunity of hearing will bring to light all facets concerning the issue and would ultimately help in a well informed decision to emerge in the matter. It is therefore salutary that before orders for stoppage of pension are passed, the Commissioner and Director of School Education would do well to comply with the principles of natural justice and pass a reasoned order indicating the factors that weighed in the decision. Fortunately, pursuant to an interim order passed by this court on 22.1.1999, the writ petitioners must have been continuously in receipt of pension. Respondents 1 to 4 will ensure that the writ petitioners as well as other similarly placed employees who worked against teaching and non-teaching posts in the two schools established by the Dock Labour Board, at Visakhapatnam, which were admitted to grant-in-aid by the state government, are paid their monthly pension without any hitch or hindrance, notwithstanding the fact that they have received the benefits under the “contributory provident fund scheme” of the Dock Labour Board. The writ petition is allowed and the impugned orders are set aside. Costs easy. --------------------------------- Nooty Ramamohana Rao, J knk 10th December 2009