Case: Kerala State Road Transport Corpn Vs. K.O. Varghese

3. Several writ petitions were filed by the respondents herein before the Kerala High Court seeking declaration about their entitlement to receive pension and dearness relief at enhanced rates in par with the employees of the State Government. They were employees of the Kerala State Road Transport Corporation (hereinafter referred to as the Corporation) which is the appellant in all these appeals. Though the reliefs sought for were not exactly identical, by the impugned judgment four appeals were disposed of by a Division Bench of the High Court. Two of the writ appeals were filed by the writ petitioners, while two were filed by the Corporation.4. The Corporation was formed on 1.4.1965; some persons who were then employed with State Transport Department were absorbed by the Corporation; their service conditions were protected vide Notification No. 4936/TC4/64/PW 22.3.1965 in terms of directions under Section 34 of the Road Transport Corporation Act, 1950 (in short "the Act"). On the basis of conditions 11 and 12 of the Notification, which shall be extracted infra, pension was paid to erstwhile State Transport Department, in terms of Part III of Kerala Service Rules, 1959 (in short KSR). In 1978, other employees who opted for pension were also granted pension at par with these employees. In 1992, (w.e.f. 1.1.1992), a departure was made by fixing subsequent dates of entitlement for dearness relief. Similar was the situation in 1994. While on the first instance date fixed was 1.7.1992, for the latter case it was directed to be operative from 1.11.1996, when the Government had fixed the date to be 1.4.1994.5. Huge extra cost involved and shattered financial condition were the reasons indicated as such deferment. Reliance was also placed on a letter of the State Government dated 24.9.1992 which according to it was a direction in terms of Section 34 of the Act. According to this letter, in view of financial position of the Corporation, the matter relating to payment of the enhanced amounts may be deferred for better times. This letter was in response to the Corporations letter to the effect that since it had no means to pay the enhanced rate of pension as per the Fifth Kerala Pay Commission, the date from which the amount is to be paid should be postponed. There is a great detail of controversy as to the true nature of the said government letter (Ex.While the Corporations stand is that it is an instruction in terms of Section 34 of the Act, the pensioners took the stand that the Government only allowed the Corporation to defer the matter for some time. High Court accepted the stand of the writ petitioners. It also observed that the Government only allowed the Corporation to defer the matter for some time, in fact that was deferred, but full payments including the arrears with effect from the date of implementation in Government service also were made by the Corporation subsequently. High Court noted that till 1991 all the orders relating to enhancement of pension as well as dearness reliefs were paid to the pensioners of the Corporation without any difference in dates. It held that inwhat is mentioned relates to deferment of payment for some time, and revised pension benefits were in fact given with arrears after some time. It further noted that since Part III of the KSR had been adopted, there was no rational for fixing the cut off date for payment of the enhanced pension and the dearness reliefs. In the absence of any rule or regulation framed by the Corporation, KSR is applicable to the employees appointed by it. In respect of employee transferred from State Transport Department, the position was clear that they are to be paid from the date the government servants got it. Reference was made to the conditions of transfer. Accordingly, the appeals filed by the respondents (writ petitioners) were allowed while those filed by the

Court's reasoning:
36. In addition to the general questions raised in other appeals, one other aspect which needs to be noted is that some amount was sought to be recovered from the respondents on the ground that they were paid amounts in excess of their legal entitlements. The attempt to recover the amount was resisted by thewho filed writ petitions before the High Court which at the first instance directed disposal of the representations filed by them. On fresh consideration, orders were passed for recovery. The ground taken for directing recovery was that there was wrong fixation of pay. That was again challenged before the High Court. Taking note of the fact that pay was fixed in 1974 and the writ petitioners were not responsible for any wrong fixation of pay, the recovery of the amount was held to be inequitable by learned Single Judge of the High Court.From the perusal of the order passed by the Division Bench Bench, it appears that it proceeded on the basis as if the questions for consideration related entitlement to receive enhanced pension and dearness reliefs. As noted above, there was no dispute about entitlement and what was in controversy related to the date for which the payment was to be made. The High Court further proceeded on the basis that there was no question of any cut off date since Part III of the KSR was being adopted in the past. The same prima facie is not correct. Stand of the Corporation right through has been that it had fixed the date from which the payments were to be made and for that purpose relied on Ex.letter of the Government. Whether the letter (Ex.constituted a direction under Section 34 of the Act is an issue which is linked with several other issues like power of the Corporation to fix a different date de hors any special direction of the Government under Section 34 of the Act. Even if it is held that the letter in Ex.was not in the nature of a special direction, the other issues were required to be considered. That has apparently not been done.29. One of the issues which needed consideration was indication of KSR Part III on the question of paying pension in Corporations order dated 5.5.1984. A distinction has been made between a mere reference or citation of one statute into another and incorporation. A statute may instead of referring to a particular previous statute or to any specific provision therein refer to the law on the subject generally. In such cases a reference is construed to mean that the law is as it reads thereafter including amendments subsequent to the time of adoption, as was noted by Sutherland in Statutory Construction Vol.2, 3rd Edn., p.550 and supplement (1956), p.119.30. The legislation by referable incorporation falls into two categories. That is (i) where a statute by specific reference incorporates the provisions of another statue as at the time of adoption and (ii) where a statute incorporate by general reference. The law concerning a particular subject has a genus. In the former case the subsequent amendments made in the referred statute cannot automatically be read into the adopting statute. But in the second category it may be presumed that the legislative intent was to include all the subsequent amendments also made from time to time in the generic law on the subject adopted by the general reference.31. In the former case a modification, repeal orof the statute that is referred will also have effect on the statute in which it is referred; but in the latter case any change in the incorporation statute by way of amendment or repeal has no repercussion on the incorporating statute. The rule that the repeal of amendment of an Act which is incorporated in a later Act has no effect on the later Act or on the provisions incorporated therein is subject to four exceptions. They are (i) where the later Act and the earlier Act are supplemental to each other, (ii) where the two Acts are in pari materia, (iii) where the amendment of the earlier Act if not imported in the later Act would render it wholly unworkable and (iv) where the amendment of the earlier Act either expressly or by necessary intendment also applies to the later Act. Even though only particular sections of an earlier Act are incorporated into later statute, in construing the incorporated provisions it may be necessary and permissible to refer to other parts of the earlier statute which are not incorporated. This does not however mean that a provision in the nature of a proviso or exception in the earlier Act which is not brought in by incorporation can be read in a manner so as to limit the meaning of the provision incorporated. Reference to other provisions of the earlier statute is only permissible to cull out meaning of the provision incorporated.