A HARi RAM GUPTA (DEAD) THROUGH L.R.

KASTURI DEVI

STATE OF UTTAR PRADESH

JULY 22, 1998

[SUJATA V. MANOHAR AND G.B. PATTANAIK, JJ.]

Service Law :

C UP. Pa/ika (Centralised) Service Retirement Benefits Rules, 1981 Rule 3.

Retirement Benefits-Pension Provident Fund Scheme to Pension Scheme- Switchover from-Availability of-To employees who had already retired from service-Held : Rules do not have retrospective operation- D Hence, those employees who had retired before the Rules had come into force, not entitled to pension-UP. Palika (Centralised) Service Rules, 1966.

Retirement Benefits-Cut-off date-Pension-Revised scheme- Employees who had already retired- Employee retired after Rules came into force-Rules provided for switchover from Provident Fund Scheme to Pension E Scheme-Automatic applicability of Rules-Held : Pension retirees and provident fond retirees do not form one homogenous class-Hence, contention based on Nakara's case that all retirees formed one homogenous class and entitled to benefits of revised scheme, rejected-Constitution of India, 1950, Art. 14.

F Words and Phrases :

"Finally withdrawn "-Meaning of-Jn the context of R. 3 of UP. Palika (Centralised) Service Retirement Benefits Rules, 1981.

The appellant filed a writ petition before the High Court claiming that he was entitled for pension under the U.P. Palika (Centralised) Service G Retirement Benefits Rules, 1981 which came into fm:ce one year after the appellant had retired from service on superannuation. The High Court dismissed the petition. Hence this appeal.

On behalf of the appellant it was contended that the Rules applied retrospectively and that the appellant was entitled in terms of Rule 3(2) and H (3) to exercise option for switching over from provident fund scheme fo

H.R. GUPTA (DEAD) THROUGH L.R. KASTURI DEVI v. STATE 855

pension scheme because it was provided in Rule 3 (3) that "if an officer A opting for these Rules has finally withdrawn the amounts of the Palika 's contribution and bonus deposited in his provident fund account, the same shall have to be deposited by him into the pension fund ..... along with interest".

On behalf of the respondent it was contended that under Clause 5-C

(1) of the Pension and General Provident Fund Regulations an employee was B entitled to finally withdraw from the provident fund after renderingJS years or when he had less than 8 years of service to attain the age of superannuation and, therefore, the expression "finally withdrawn" in Rule 3(3) did not mean that the Rules h_ad a retrospective operation.

Dismissing the appeal, tlils Court

HELD : 1. The expression "finally withdrawn" as envisaged in Rule 3(3) of the U.P. Palika (Centralised) Service Retirement Benefit Rules, 1981 would mean those final withdrawals made by an employee while continuing

in service for the purposes mentioned in Clause S-C(2) of the Pension and D General Provident Fund Regulations. Consequently, the argument that a combined reading of Rules 3(2) and (3) indicates that the Rules have retrospective application is devoid of any force and the same accordingly stands rejected. (860-E)

Shakuntala Mehrishi v. New Delhi Municipal Commitee, (1990) 3 SCC E 521, held inapplicable.

2.1. Nakara 's case considered in a subsequent Constitution Bench judgement in Krishana Kumar's case wherein it was explained that the pension retirees and provident fund retirees do not form one homogeneous class and on the other hand the Rules governing the provident fund and its F contribution and entirely different form the Rules governing pension and, therefore, it would not be reasonable to argue that what is applicable to the pension retirees must also equally be applicable to Provident Fund retirees.

It was further held in Krishna Kumar's case that the rights of each individual retire finally crystallised on his retirement where after no continuing G obligation remained in case of those who are governed by Provident Fund Rules whereas in case of Pension retirees the obligation continues till the death of the employee. This Court categorically held that Nakaa's case could not be an authority for the decision in Krishna kumar 's case. In subsequent decisions also this Court held that whenever the Government or an authority frames a scheme for persons who have superannuated from H

A service, due to many constraints, it is not always possible to extend same .-

benefits to one and all, irrespective of the dates of superannuation. As such any revised scheme in respect of post-retirement benefits, if implemented with a cut-off date, which can be held to be reasonable and rational in the light of Article 14 of the constitution, need not be held to be invalid. Whenever a revision takes place; a cut-off date becomes imperative because the benefit has to be allowed within the financial resources available with the Government.

(861-A-H]

2.2. Therefore, the appellant having superannuated prior to the Rules coming into force cannot claim the right to pension under the Rules with C the help of the decision of this Court in Nakara 's case and further in view of the conclusion that the Rules do not have any retrospective operation the relief sought for by the appellant to get pension under the Rules cannot be granted. (862-C]

Krishna Kumar v. Union of India, [1990] 4 SCC 207, Union of India 0 v.P.N Menon, (1994] 4 SCC 68; Indian Ex-services League v. Union of India, (1991] 2 SCC 104 and All India Reserve Bank Retired Officers Association

v. Union of India, (1992] Supp. 1 SCC 664, relied on.

D.S. Nakara v. Union of India, [1983] I SCC 305, held inapplicable.

E CIVIL AP PELLA TE JURISDICTION : Civil Appeal No. 3433 of

1998 ..

From the Judgment and Order dated 13.11.95 of the Allahabad High Court in W.P. No. 557of1987.

K.K. Dubey and Ms. N. Annapoorani for the Appellant.

A.K. Goel, Additional General, Ms. Niti Dikshit and Pradeep Misra for the Respondent.

The Judgment of the Court was delivered by

PATTANAIK, J. Leave granted.

This appeal by grant of special leave is directed against the judgment dated 13th of November, 1995 of the Allahabad High Court in Civil Miscellaneous Petition No. 557 of 1987. Hari Ram Gupta, husband of the H present appellant, had filed the writ petition seeking a mandamus from the

... .

.1 ~. GGPTA (DEAD) THROUGH L R KASTURI DEVI r. STA TE [PA TT ANAIK, J] 857

court to the appropriate authorities to give him the benefits of the Uttar A Pradesh Palika (Centralised) Service Retirement Benefit Rules, 1981 (hereinafter referred to as 'the Rules'). But said Hari Ram Gupta had retired from service on superannuation in the year 1980. He, however, claimed that he would be entitled to pension under the Rules as the Rules are intended to apply retrospectively and at any rate following the principle of the judgment of this Court in D.S. Nakara and others v. Union of India, [1983] 1 SCC 305, the B court should grant him the relief. The High Court by the impugned judgment came to hold that the Rules have no retrospective operation, and therefore, the applicant was not entitled to claim pension under the Rules. Soon after the judgment of the Allahabad High Court, the husband of the appellant having died, the widow filed the special leave application out of which this C appeal arises. The sole question for consideration is whether the Rules can be said to have any retrospective application and are applicable to those employees belonging to the Palika (Centralised) Service, who retired from service prior to the coming into force of the Rules. It is not disputed that before the Rules came into operation there was no rules providing pension for the employees of the centralised services.

The learned counsel for the appellant strenuously contended that a conjoint reading of sub-rules (2) and (3) of Rule 3 would make it crystal clear that the Rule is applicable even to those employees who have retired from service on the date the Rules came into operation, provided they exercise their option in accordance with the Rules within the stipulated period of 90 days E from the enforcement of the Rules and they deposit the amount finally withdrawn from Palika's contribution and bonus deposited in his Provident Fund Account into the pension fund established under Part VI of the Rules.

According to the learned counsel unless such an interpretation is given, the provision of sub-rule (3) would become otiose inasmuch as an officer is entitled to finally withdraw the amount from the Provident Fund on super F annuation and not while he continues to be in service. The learned counsel further contended that under identical circumstances an employee of a school under New Delhi Municipal Committee had approached this Court in the case of Shakuntala Mehrishi, New Delhi v. New Delhi Municipal Committee and others, [ 1990] 3 sec 521 and this Court had granted the retiral benefits to the G employee. The aforesaid decision, contends the learned counsel for the appellant, should apply with full force to the case in hand. The learned counsel further urged that the Rules in question providing for pension, if is held to apply to only thoseemployees who retired subsequent to the coming into force of the Rules and not to those to have already retired, then it would be violative of the law laid down by this Court in the case of D.S. Nakara H

A (supra) inasmuch as pension paid is not a bounty nor an ex-gratia payment for past services rendered and is a social welfare measure rendering socioeconomic justice to those who in the hey-day of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in lurch.

B Learned counsel for the respondent, on the other hand contended that there is no ambiguity in the Rules and nowhere the Rules indicate that it would apply retrospectively on certain conditions being fulfilled. He further contended that under the provisions of the Regulation for payment of Provident Fund made by Nagar Palika, Jhansi an employee is entitled to finally withdraw C after rendering 25 years of service or when such employee has less than 8 years of service to attain the age of superannuation, and therefore. it is not correct that final withdrawal is permissible only on the date of superannuation.

In that view of the matter the expression 'final withdrawal' in sub-rule (3) of Rule 3 of the Rules cannot be interpreted to mean that the Rules have a retrospective operation. The learned counsel also urged that the rules D determining the service conditions of an employee under the service jurisprudence is usually prospective in nature unless there is anything in the Rules which indicate the legislative intent of making the rule retrospective or the rule is expressly made retrospective. Since neither of these conditions are satisfied in the case in hand, the rules must be held to be prospective, and E therefore, would not govern the case of those who retired prior to the coming into force of the Rules. On the question of applicability of the decision of this Court in Shakuntala Mehrishi case, the learned counsel contended that the ratio laid down in that case has no application and the said decision is no guidance for deciding the question as to whether the Rules in the present

F case has any retrospective operation. On the question of the applicability of the ratio in D.S. Nakara's case, the learned counsel for the respondent urged that the appellant has not challenged validity of the Rules and on the other hand seek relief on the basis of the said Rule, therefore, the Rule cannot be struck down. He further contended that the decision of this Court in D.S.

Nakara has been watered down by this Court in several subsequent cases and G it is the settled position now that the employees retiring on a particular date would be governed by the benefits of the rules then existing and cannot complain of if at a subsequent stage certai11 other rules confer some additional benefits. Thus, judged the principles enunciated by this Court in Nakara have no application to the case in hand.

H In view of the rival submission, the first question that arises for

r GUPTA (DEAD) THROUGH L.R KASTOR! DEVI v. STATE [PATTANAIK, J] 859

~ consioeration is whether the Rules can be said to have any retrospective A ..... operation?

We have examined the Rules carefully and there is no express provision in the Rules giving it retrospective operation. The question then arises as to whether from any of the provisions contained in the Rules is it possible to B infer that the Rules have been given retrospective operation. The argument of the learned counsel appearing for the appellant in this context is based • upon the language used in sub-rule (2) and sub-rule (3) of Rule 3. For better

.... appreciation of the point in issue sub-rules (I), (2) and (3) of Rule 3 are quoted hereinbelow in extenso:-

"3. Application of the rules.- (1) These rules shall apply compulsorily c

to all those officers who were appointed on or after July 9, 1966 under clause (I) of Rule 21 of the Uttar Pradesh Palika (Centralised) Services Rules, I 966 and would become permanent on any post in the Centralised Services.

(2) The officers who were finally absorbed on any post in Centralised D

Services under clause (2) of Rule 6 of the Uttar Pradesh Palika (Centralised) Services Rules, 1966 will have an option to elect whether they would be governed by the existing Pension/Provident Fund Rules of the Palika as hitherto or would like to be governed by those rules. This option shall be exercised within ninety days from the E enforcement of these rules and the option once exercised shall be final.

(3) If an officer opting these rules has finally withdrawn the amounts of Palika's contribution and bonus deposited in his Provident Fund F ..

Account, the same shall have to be deposited by him into the pension .

fund established under Part VI of these Rules along with interest at the rates fixed from time to time by the Reserve Bank of India."

Sub-rule (I) of Rule 3 clearly indicates that Rule should apply to those officers who were appointed on or after July 1966 under clause I of Rule 21 G of the Centralised Services Rules of 1966 and would become permanent in the Centralised services. This sub-rule obviously has no application. The learned

.... counsel appearing for the appellant, however, urged that if sub-rules (2) and

(3) of Rule 3 are read together it unequivocally indicates that the Rules do apply to those persons who have already retired. In as much as sub-rule (3) gives an option to officers to exercise option to be governed by the Rules H

A and if they have finally withdrawn the amounts of Palika's contribution and bonus deposited in Provident Fund Account the same will have to be deposited into the pension fund. It is contended by the learned counsel that an employee can finally withdraw the amount from the Provident Fund only on his superannuation and not at any earlier point of time while he continues to be in service and, therefore, this sub-rule clearly indicates that the Rules apply B to those who have already superannuated on the d'!te the Rule came into force. But on examining the provisions contained in Pension and General Provident Fund Regulations or Rules which governed the case of employees of Palika, more particularly the provisions of Clause 5 - C( 1) we find that final withdrawals under the Regulation is permitted in the case of Municipal servants C who have either rendered 25 years service or have less than 8 years to attain the age of superannuation. The purpose for which such final withdrawal is permissible is enumerated in other sub-clauses of said Clause 5 - C. In this view of the matter the argument of the learned counsel appearing for the appellant that final withdrawal is permissible only on the date of superannuation cannot be sustained and the expression 'final withdrawal' as D envisaged under sub-rule (3) of Rule 3 would mean those final withdrawals made by an employee while continuing in service for the purposes mentioned in sub-clause (2) of Clause 5-C. Consequently, the argument that a combined reading of sub-clause (3) and sub-clause (2) of Rule 3 indicates that the Rules have retrospective application is devoid of any force and the same accordingly E stands rejected.

The next question that arises for consideration is whether the judgment of this Court in Shakuntala Mehrishi v. New Delhi Municipal Committee and others, [ 1990] 3 sec 521, any way helps the appellant in getting the relief sought for? In the aforesaid case the teacher of a recognised aided school F opted for pension and gratuity within stipulated period in prescribed proforma as desired by statutory notification. But notwithstanding his superannuation he did not receive the benefits as the modalities about contribution towards pension fund and approval of Government of India had not been obtained.

This Court held that payments to the employee cannot be deferred on such G grounds over which the employee has no control and accordingly directed that the necessary payments be made. We fail to understand how the aforesaid decision is in any way applicable to the case in hand for deciding the question as to whether the Rules providing for pension would retrospectively apply to the case of an employee who had already retired before the Rules came into operation. In our considered opinion the aforesaid decision of this H Court does not help the appellant in any manner.

H.R GUPTA (DEAD) THROUGH L.R. KASTURI DEVI v. STATE [PA TTANAIK, J.) 861

The only other question that survives for our consideration is whether A ... the ratio in Nakara's case will assist the appellant in getting the relief sought for? In D.S. Nakara and others v. Union of India, [1983] I SCC, 305 the question for consideration before this Court was whether on the basis of date of retirement the retirees can be classified into different groups and thereupon make provision granting some benefits to one group denying the others? In B the aforesaid case the provisions for pension was applicable to all retirees and, therefore, pensioners form a class as a whole. But when Liberalised • Pension Scheme was introduced the said Scheme was made applicable to a .... group of pensioners and not to all and therefore, it was held by this Court that pensioners form a class as a whole and cannot be micro-classified by an arbitrary, unprincipled and unreasonable eligibility criteria. It is to be noted c that the aforesaid judgment was considered by this Court in the subsequent Constitution Bench judgment of Krishna Kumar v. Union of India, [1990] 4 SCC, 207 wherein the decision ofNakara (supra) was explained and it was held that the pension retirees and provident fund retirees do not form one homogeneous class on the other hand the Rules governing the provident D fund and its contribution are entirely different from the Rules governing pension and, therefore, it would not be reasonable to argue what is applicable to the pension retirees must also equally be applicable to Provident Fund retirees. It was further held in the aforesaid case that the rights of each individual retired finally crystallised on his retirement where after no continuing obligation remained in case of those who are governed by Provident Fund E Rules whereas in case of Pension retirees the obligation continues till the death of the employee. This Court categorically held that Nakara (supra) cannot be an authority for the decision in Krishna Kumar (supra). In Union of India v. B. P.N. Menon, [1994] 4 SCC 68 a similar question came up for consideration and distinguishing Nakara and following Krishna Kuma, r and • other similar cases the Court held that whenever the Government or an F . authority, which can be held to be a State within the meaning of Article 12 of the Constitution, frames a scheme for persons who have superannuated from service, due to many constraints, it is not always possible to extend the same benefits to one and all, irrespective of the dates of superannuation. As such any revised scheme in respect of post-retirement benefits, if implemented G with a cut-off date, whiCh can be held to be reasonable and rational in the light of Article 14 of the Constitution, need not be held to be invalid. Whenever ...

~ a revision takes place, a cut-off date becomes imperative because the benefit has to be allowed within the financial resources available with the Government.

When the Army personnel claimed the same pension irrespective of their date of retirement this Court in the Constitution Bench case of the Indian ex- H

A services League v. Union of India, (1991] 2 sec 104, the Court considered the grievance of ex-servicemen who had laid the claim on the basis of Nakara

(supra) but ultimately negatived the same and followed Krishna Kumar (supra).

In All India Reserve Bank Retired Officers Association v. Union of India, (1992] Suppl. I SCC 664, when the validity of the introduction of Pensions scheme in lieu of Contributory Provident Fund Scheme was challenged on the B ground that Bank employees who retired prior to 1.1.1986 have not been given the benefit of the said scheme it was held by this Court that there is no arbitrariness in the same.

This being the position the appellant having superannuated prior to the C Rule corning into force cannot claim the right to pension under the Rules with the help of the decision of this Court in Nakara (supra) and further in view of our conclusion that the Rules do not have any retrospective operation the relief sought for by the appellant to get pension under the Rules cannot be granted.

D In the premises, as aforesaid, the appeal fails and is dismissed. But in the circumstances there will no order as to costs.

v.s.s.

Appeal dismissed.