Case: The State of Tripura &amp; Ors Vs. Smt. Anjana Bhattacharjee &amp; Ors

findings are in paragraph 12 which reads as under: [12] We have thoroughly scrutinized the foundation as projected by the state-respondents by the passage from the additional counter affidavit, as reproduced above. We find from the condition laid down in the notification dated 02.02.2010 that out of the total financial requirement the Central Government shall bear 80% till 31.03.2010. The period mentioned in the Rule 3(3) of the said rules falls within the said coverage period and as such, what the State Government has projected that for the financial crunch they had been compelled to bring the said amendment in the said pension rules is wholly unacceptable and in contrast to Article 14 of the Constitution of India. The foundation i.e. the financial crunch has not satisfied us at all. Hence, we are of the view that the said Rule 3(3) of the Pension Rules being absolutely arbitrary is liable to be struck down. Accordingly, we strike down the Rule 3(3) of the Tripura State Civil Services (Revised Pension) Rules, 2009. The respondents No. 2, 3 & 4 are directed to pay the arrear pension for the period from 01.03.2007 to 31.12.2008 to the petitioner within a period of 3(three) months from today, else the said amount shall carry interest @6% per annum from 01.04.2010. 5.2 When specific statistics were provided before the High Court justifying its policy decision and the financial crunch/financial constraint was pleaded, there was no reason for the High Court to doubt the same. As such the findings recorded by the High Court in the impugned judgment and order is contrary to the averments made in affidavit filed on behalf of the State Government. From the affidavit filed before the High Court reproduced hereinabove, we are satisfied that a conscious policy decision was taken by the State Government to grant the benefit of revision of pension notionally from 01.01.2006 or from the date of superannuation till 31.12.2008 and to pay/grant the benefit of revision of pension actually from 01.01.2009, which was based on their financial crunch/financial constraint. 5.3 Whether the financial crunch/financial constraint due to additional financial burden can be a valid ground to fix a cut-off date for the purpose of granting the actual benefit of revision of pension/pay has been dealt with and/or considered by this Court in the case of Amar Nath Goyal (supra). In the aforesaid decision, it is observed and held by this Court that financial constraint can be a valid ground for fixation of cut-off date for grant of benefit of increased quantum of death-cum-retirement gratuity. In paragraphs 26, 32 and 33 of the said judgment, it is observed and held as under: - 26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1-4- 1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level. xxx xxx xxx 32. The importance of considering financial implications, while providing benefits for employees, has been noted by this Court in numerous judgments including the following two cases. In State of Rajasthan v. Amrit Lal Gandhi [(1997) 2 SCC 342 : 1997 SCC (L&S) 512 : AIR 1997 SC 782 ] this Court went so as far as to note that: Financial impact of making the Regulations retrospective can be the sole consideration while fixing a cut-off date. In our opinion, it cannot be said that this cut-off date was fixed arbitrarily or without any reason. The High Court was clearly in error in allowing the writ petitions and substituting the date of 1-1- 1986 for 1-1-1990. [Ibid., at AIR p. 784, para 17 : SCC p. 348, para 17 (emphasis supplied).] 33. More recently, in Veerasamy [(1999) 3 SCC 414 : 1999 SCC (L&S) 717] this Court observed that, financial constraints could be a valid ground for introducing a cut-off date while implementing a pension scheme on a revised basis [ Supra fn 2 SCC at p. 421 (para 15).] . In that case, the pension scheme applied differently to persons who had retired from service before 1-7-1986, and those who were in employment on the said date. It was held that they could not be treated alike as they did not belong to one class and they formed separate classes. 5.4 In the aforesaid decision this Court after considering the earlier decisions of this Court in the cases of State of Punjab Vs. Boota Singh; (2000) 3 SCC 733 and State of Punjab Vs. J.L. Gupta; (2000) 3 SCC 736, it is specifically observed and held that for the grant of additional benefit, which had financial implications, the prescription of a specific future date for conferment of additional benefit, could not be considered arbitrary. 5.5 In the subsequent decision in Bihar Pensioners Samaj (supra), the decision in the case of Amar Nath Goyal (supra) is followed and it is observed and held that financial constraints could be a valid ground for introducing a cut-off date while introducing a pension scheme on revised basis. It is further observed and held by this Court in the aforesaid decision that fixing of a cut-off date for granting of benefits is well within the powers of the Government as long as the reasons therefor are not arbitrary and are based on some rational consideration. 6. While applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand, we are of the opinion that in the instant case before us, the cut-off date has been fixed as 01.01.2009 on a very valid ground i.e., financial constraint. Therefore, the High Court manifestly erred in striking down the Rule 3(3) of the Pension Rules, 2009 being arbitrary and violative of Article 14 of the Constitution.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]4. Though served none has appeared on behalf of respondent No. 1, may be because pursuant to the earlier interim order passed by this Court, she has been paid the entire arrears of pension from the date of her retirement. It is required to be noted that the impugned judgment and order passed by the High Court has been stayed by this Court.5. We have heard learned counsel appearing on behalf of the State at length. We have gone through and considered the impugned judgment and order passed by the High Court. Before the High Court, Rule 3(3) of the Pension Rules, 2009 was under challenge, which is reproduced hereinabove. Rule 3(3) of the Pension Rules, 2009 has been struck down by the High Court by holding that the same is arbitrary and violative of Article 14 of the Constitution of India. Before the High Court, it was the specific case on behalf of the State that because of heavy financial burden and there being financial constraints, the State is not in a position to bear the heavy burden of additional revised pension and therefore, the State formulated a policy decision to the effect that the revised pension shall be paid from 01.01.2006 to 31.12.2008 notionally and actual revision of pension shall be disbursed from 01.01.2009 only. A detailed affidavit was filed on behalf of the State justifying the above policy decision providing/granting the revision of pay from 01.01.2009 only and to grant the benefit of revised pension notionally from 01.01.2006 or from the date of retirement till 31.12.2008.5.1 However, without giving any cogent reasons, the High Court has observed that the foundation i.e., the financial crunch has not satisfied the Court at all. Only reasoning or actual findings are in paragraph 12 which reads as under:[12] We have thoroughly scrutinized the foundation as projected by the state-respondents by the passage from the additional counter affidavit, as reproduced above. We find from the condition laid down in the notification dated 02.02.2010 that out of the total financial requirement the Central Government shall bear 80% till 31.03.2010. The period mentioned in the Rule 3(3) of the said rules falls within the said coverage period and as such, what the State Government has projected that for the financial crunch they had been compelled to bring the said amendment in the said pension rules is wholly unacceptable and in contrast to Article 14 of the Constitution of India. The foundation i.e. the financial crunch has not satisfied us at all. Hence, we are of the view that the said Rule 3(3) of the Pension Rules being absolutely arbitrary is liable to be struck down. Accordingly, we strike down the Rule 3(3) of the Tripura State Civil Services (Revised Pension) Rules, 2009. The respondents No. 2, 3 & 4 are directed to pay the arrear pension for the period from 01.03.2007 to 31.12.2008 to the petitioner within a period of 3(three) months from today, else the said amount shall carry interest @6% per annum from 01.04.2010.5.2 When specific statistics were provided before the High Court justifying its policy decision and the financial crunch/financial constraint was pleaded, there was no reason for the High Court to doubt the same. As such the findings recorded by the High Court in the impugned judgment and order is contrary to the averments made in affidavit filed on behalf of the State Government. From the affidavit filed before the High Court reproduced hereinabove, we are satisfied that a conscious policy decision was taken by the State Government to grant the benefit of revision of pension notionally from 01.01.2006 or from the date of superannuation till 31.12.2008 and to pay/grant the benefit of revision of pension actually from 01.01.2009, which was based on their financial crunch/financial constraint.5.3 Whether the financial crunch/financial constraint due to additional financial burden can be a valid ground to fix a cut-off date for the purpose of granting the actual benefit of revision of pension/pay has been dealt with and/or considered by this Court in the case of Amar Nath Goyal (supra). In the aforesaid decision, it is observed and held by this Court that financial constraint can be a valid ground for fixation of cut-off date for grant of benefit of increased quantum of death-cum-retirement gratuity. In paragraphs 26, 32 and 33 of the said judgment, it is observed and held as under: -26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1-4- 1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level.xxx xxx xxx32. The importance of considering financial implications, while providing benefits for employees, has been noted by this Court in numerous judgments including the following two cases. In State of Rajasthan v. Amrit Lal Gandhi [(1997) 2 SCC 342  : 1997 SCC (L&S) 512 : AIR 1997 SC 782 ] this Court went so as far as to note that:Financial impact of making the Regulations retrospective can be the sole consideration while fixing a cut-off date. In our opinion, it cannot be said that this cut-off date was fixed arbitrarily or without any reason. The High Court was clearly in error in allowing the writ petitions and substituting the date of 1-1- 1986 for 1-1-1990. [Ibid., at AIR p. 784, para 17 : SCC p. 348, para 17 (emphasis supplied).]33. More recently, in Veerasamy [(1999) 3 SCC 414  : 1999 SCC (L&S) 717] this Court observed that, financial constraints could be a valid ground for introducing a cut-off date while implementing a pension scheme on a revised basis [ Supra fn 2 SCC at p. 421 (para 15).] . In that case, the pension scheme applied differently to persons who had retired from service before 1-7-1986, and those who were in employment on the said date. It was held that they could not be treated alike as they did not belong to one class and they formed separate classes.5.4 In the aforesaid decision this Court after considering the earlier decisions of this Court in the cases of State of Punjab Vs. Boota Singh; (2000) 3 SCC 733  and State of Punjab Vs. J.L. Gupta; (2000) 3 SCC 736,  it is specifically observed and held that for the grant of additional benefit, which had financial implications, the prescription of a specific future date for conferment of additional benefit, could not be considered arbitrary.5.5 In the subsequent decision in Bihar Pensioners Samaj (supra), the decision in the case of Amar Nath Goyal (supra) is followed and it is observed and held that financial constraints could be a valid ground for introducing a cut-off date while introducing a pension scheme on revised basis. It is further observed and held by this Court in the aforesaid decision that fixing of a cut-off date for granting of benefits is well within the powers of the Government as long as the reasons therefor are not arbitrary and are based on some rational consideration.6. While applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand, we are of the opinion that in the instant case before us, the cut-off date has been fixed as 01.01.2009 on a very valid ground i.e., financial constraint. Therefore, the High Court manifestly erred in striking down the Rule 3(3) of the Pension Rules, 2009 being arbitrary and violative of Article 14 of the Constitution.