Case: Welfare Association of Absorbed Central Government Employees in Public Enterprises Vs. Union of India

2. Brief facts leading to the filing of these two writ petitions are as follows :-The members of the petitioners welfare association in W.P. (C) No. 11855/85 and the individual petitioners in W.P.(C) No. 567/95 were Central Govt. Servants. Government of India some years ago decided to start public undertakings/enterprises in the core sector of industries. To start with the Government of India sent some of their officers to the public undertakings, on deputation. As it was felt that services of the officers having sufficient experience and skill were necessary for the public enterprises, the Government devised measures to induct those willing officers to continue in the public enterprises. Such officers were allowed to be absorbed in those public undertakings/enterprises. The Government offered to deem their retirement as retirement in `public interest. Consequent to their deemed retirement, such absorbed/retired Government servants were offered retrial benefits. These persons were also offered the usual facility of commuting one-third of their original pension under Civil Pensions Commutation Rules and were also offered additional facility of commuting the balance two-third pension also i.e. to commute the full pension. This facility, therefore, creates three categories of these persons : (1) the persons who have not commuted their pension and, therefore, draw full monthly pension from the Government; (2) the persons who have commuted one-third of the pension and, therefore, will draw a sliced monthly pension, reduced to the extent of commuted amount; (3) the persons who have commuted the full pension and who will not be given any monthly pension by deeming monthly pension to have been reduced to nil. The pesons falling in the first category continue to derive all the benefits of being Government Pensioners and get all the Interim Relief, liberalisation and/or whatever reliefs are given by the Government to the pensioners. But the persons in the second category are denied these benefits to the extent of ``one-third commutation. The third category are the worst hit and are totally denied of all these benefits.3. The above-mentioned second category of the retired Government servants namely, these who got one-third pension commuted moved this Court for restoration of their one-third pension by filing a writ petition under Article 32 of the Constitution of India (vide ``Common Cause v. Union of India, 1987(1) SCR 497). The contention put forward in support of their claim for restoration of the one-third pension was that the lumpsum amount paid gets adjusted by about 10 or 12 years and therefore, the Government must be directed to restore the commuted portion of one-third pension. It was also contended that lately there has been a substantial improvement in the life expectancy of the people in India and, therefore, there was no justification for denying the restoration of the commuted one-third portion of pension which gets adjusted after a period of 10 or 12 years. When that matter came up before this court, a suggestion was made to the Government to give a new look to the matter.

Court's reasoning:
8. From the above extracts, it will be seen that a clear-cut distinction is made in Rule 37-A itself between one-third portion of pension to be commuted without any condition attached and two-third portion of pension to be received as terminal benefits with condition attached with it. It follows that so far as commutation of one-third of the pension is concerned, the petitioners herein as well as petitioners in `Common Cause case stand on similar footing with no difference. So far as the balance of two-third pension is concerned, the petitions herein have received the commuted value (terminal benefits) on condition of their surrendering of their right of drawing two-thirds of their pension. This was not the case with the petitioners in `Common Cause case. That being the position the denial of benefit given to `Common Cause petitioners to the present petitioners violates Articles 14 and 16 of the Constitution. The reasoning for restoring one-third commuted pension in the case of `Common Cause petitioners equally applies to the restoration of one- third commuted pension in the case of these petitioners as well.9. No doubt the government while declining to consider the case of petitioners favourably took into account a decision of this court in Welfare Association of Absorbed Central Government Employees in Public Enterprises v. Union of India, 1991(2) SCC 265 : 1991(2) SCT 538 (SC), holding that the petitioners in `Common Cause case stand on a different footing than that of the petitioners in the present case. In that judgment Rule 37-A was not brought to the notice of the Court. Another reason given by the Government was that the petitioners on commuting their petition in full cease to be Central Government pensioners. This is too broad a contention to be accepted as no statute or rule is quoted in support of this contention.If after the expiry of 15 years, the pensioners who have opted for one- third commutation, becomes entitled to restoration of pension on the ground that the lumpsum amount paid had got adjusted before the said period as held in `Common Cause there is no good reason for not applying the same to the petitioners who have commuted their one-third portion of the pension under Rule 37-A of the Pension Rules, 1972, without any commitment for this portion of commutation. Presumably the respondent realising the fallacy have withdrawn the scheme of permitting commutation of full pension by O.M. No. 4/42/91- P&PW(D), dated 31.3.1995.For the forgoing reasons, we hold that the petitioners are entitled to the benefits as given by this Court in `Common Cause case so far as it related to restoration of one-third of the commuted pension.