Supreme Court of India

Des Raj Bhatnagar And Anr. Etc vs Union Of India on 13 February, 1991

Equivalent citations: 1991 SCR (1) 356, 1991 SCC (2) 266, 1991 AIR SCW 523, 1991 (2) SCC 266, (1991) 1 SCR 356 (SC), (1991) 62 FACLR 428, 1991 SCC (L&S) 495, (1991) 16 ATC 469, (1991) 1 CURLR 633, (1991) 2 SERVLR 116, 1991 UJ(SC) 2 65, (1991) 1 JT 443 (SC)

Author:
N.M. Kasliwal

Bench:
N.M. Kasliwal
,
K. Ramaswamy

PETITIONER:
DES RAJ BHATNAGAR AND ANR. ETC.

Vs.

RESPONDENT:
UNION OF INDIA

DATE OF JUDGMENT13/02/1991

BENCH:
KASLIWAL, N.M. (J)
BENCH:
KASLIWAL, N.M. (J)
RAMASWAMY, K.

CITATION:
1991 SCR (1) 356 1991 SCC (2) 266
JT 1991 (1) 443 1991 SCALE (1)208

ACT:
Constitution of India:
Articles 14
and
16.
Central
Government employees absorbed in Central Public Sector
Undertakings-Entitlement of pensionary benefits-Central
Civil Service (Pension) Rules, 1972: 0. MS. dated 13.2.1976
and 22.10.1983-Validity of.
Service Law: Central Civil Service (Pension) Rules,
1972: Liberalised Pension Formula, 1979: 0. Ms. dated
13.2.1976 and 22.10.1983-Central Government pensioners-
Relief and adhoc relief on pension-Central Government
employees absorbed in Central Public Sector
Undertakings-Retiring from Central Government service -
Commuted original pension-Whether eligible to be
treated as Central Government pensioners.
Central Civil Service (Pension) Rules, 1972:
Commutation of pension-Effect of.

HEADNOTE:
The petitioners, who were Central Government
employees, on their absorption in a Central Public Sector
Undertaking, retired from Central Government service on
different dates prior to 31.3.1979, and commuted their
original pension for a lump sum as permissible under
the Civil Service (Pension) Rules, 1972.
The Central Government issued O.M. dated 13.2.1976,
enabling an officer who commuted a portion of his pension to
be eligible for relief and ad hoc reliefs on the full amount
of his original pension, but persons who got themselves
absorbed in Public Sector Undertakings were not
eligible to the said benefits. Taking note,of the erosion in
the value of the rupee, the Government, by O.M. dated
25.5.1979, introduced the Liberalised Pension Formula,
benefit of which, by this Court's decision in D.S.
Nakara's case was extended to all Central Government
pensioners irrespective of the dates of their retirement.
In order to implement the said decision, the
Government issued O.M. dated 22.10.1983, but the benefit
was not given to those persons who got them-selves absorbed
in Central Public Sector Undertakings and
received/opted to receive commuted raise of 1/3rd of
pension as well as
terminal benefits equal to the commuted value of the balance
amount of pension left after such commutation.
The petitioners challenged the validity of the
aforesaid O.Ms. dated 13.2.1976 and 22.10.1983 and
contended that for the purposes of grant of the full
benefit of relief or ad hoc relief, the Rules do not make
any distinction between an officer who has sought
commutation of a portion of his original pension and one
who has not sought any such commutation; and as the
petitioners who opted for commutation of their original
pension in accordance with the Rules were being arbitrarily
and without just and reasonable cause deprived of the
relief, the aforesaid Office Memoranda were vitiated by
an inherent discrimination and were violative of
Articles
and
of the Constitution.
The facts of the appeal were identical to those of the
petitions except that the appellant came before this Court
in appeal against the order of the High Court which
dismissed his writ petition.
On the question: whether the petitioners/appellants
fell in the category of Central Government pensioners for
the purpose of entitlement to the benefit of the
Liberalised Pension Formula or did they fall in a different
class altogether and were not entitled to get any such
benefit,
Dismissing the writ petitions and the appeal, this
Court,
HELD: 1. Clause 5 of O.M. dated 22.10-1983 is clear
that such Central Government employees who got
themselves absorbed under Central Public Sector
Undertakings prior to 1.4.1979 and opted to receive
commuted raise for 1/3rd of pension as well as terminal
benefit equal to the commuted value of the balance amount of
pension were not entitled to any benefit as they were not
Central Government Pensioners as on 1.4-1979. [362B-C]
2.Commutation brings about certain advantages. The
person who commutes his pension gets a lump sum which
ordinarily he would have received in the course of his
spread over period subject to his continuing to live The two
advantages of the commutation are the-availability of a
lump sum and the risk factor. The allowance of Family
Pension to such person does not however make them entitled
to get any benefit that is given to the pensioners on
account of Liberalised Pension Rules taking note of the
fallen value of the rupee. [362F-G, 363A-B]
3.1 In the instant case, the petitioners had not only
got 1/3rd of
their pension commuted but exercised the option of getting
the entire pension commuted and in lieu thereof got a lump
sum. Such persons cannot fall in the category of Central
Government pensioners for the purposes of getting benefit of
the Liberalised Pension Rules which can be made
applicable only to Central Government pensioners. [362G-H,
363A]
3.2 The petitioners fell in a different class
altogether and were not entitled to claim any benefit
granted to the Central Government Pensioners. After getting
a lump sum in lieu of entire pension, they did not fall in
the class of Central Government pensioners and were not
entitled to any benefit granted to such pensioners. The case
of the Central Government pensioners who got their 1/3rd
pension commuted also fail in a different class inasmuch as
they got 2/3rd pension, and after 15 years of such
commutation or having attained the age of 70 years whichever
was later, they became entitled to full pension. [363C-D]
"Common Cause" a Registered Society & Ors. v. Union of
India, [1987] 1 SCC 142, distinguished.
D.S. Nakara & Ors. v. Union of India, [1983] 2 SCR 165,
referred to.

JUDGMENT:

ORIGINAL JURISDICTION: Writ Petition Nos.11757 & 11758 of
1984.

(Under
Article 32
of the Constitution of India).

WITH
Civil Appeal No. 1124 of 1985.

P.P. Rao, K. Jagan Mohan Rao and Raju Ramachandran for
the Petitioners.

V.C. Mahajan, Ms. A Subhashini and R.B. Mishra for the
Respondent.

The Judgment of the Court was delivered by
KASLIWAL, J. The above writ petitions and appeal are
disposed of by one single order as identical question of law
are involved in these cases. In order to appreciate the
controversy we would narrate the facts of the writ
petitions. Shri Des Raj Bhatnagar, Petitioner DES No. 1 and
Shri Ved Pal Seth, Petitioner No.2 were employees of the
Central Government. The petitioner No. 1 after serving in
various capacities in the Department of food of the Central
Government from 24.10.1941 to 31.8.1971 (29 years and 10
months) was permanently absorbed in Food Corporation of
India as Assistant on 1st September, 1971 and retired from
the Government service.

The petitioner No. 2 after serving the Government in
various capacities for the period from 5.11.1947 to 8.2.1972
(20 years and 3 months) was permanently absorbed on 9.2.1972
in Food Corporation of India as Sr. Asstt. Manager and
retired from the Government service.

On absorption in the Food Corporation of India, the
petitioners were required to exercise either of the
following two options:

(a) Receiving the pro-rata monthly pension and
death-cum-retirement gratuity as admissible under the rules;
and

(b) Receiving the pro-rata gratuity and a lumpsum
amount in lieu of pension worked out with reference to
commutation table obtaining on the date from which the
pension was to be admissible and under the option order.

The office of the Pay and Accounts Officer, Ministry of
Food and Agriculture determined the original pension payable
to the petitioners per mensem. The petitioners were
sanctioned original pensions in accordance with the
provisions of the Central Civil Service (Pension) Rules,
1972. In case of petitioner No. 1 the original pension was
determined at Rs. 240 per mensem payable from 1st September,
1971.In case of petitioner No. 2 the original pension
admissible was determined at Rs.287 per mensem payable from
9.2.1972.

The petitioner No. I received his pension @ Rs.240 per
mensem for the period from 1.9.1971 to 29.10.1972.
Petitioner No. 2 received his pension @ Rs.287 per mensem
for the period from 9.2.1972 to 16.8.1972. Under the above
Rules maximum of one third of the amount of admissible
pension could be commuted. However, in the case of
Government officers including Industrial Management Pool
Officers who were opting for permanent absorption in Public
Sector Undertakings, an option was given to commute the full
amount of their original pension. The petitioner No. I and
petitioner No. 2 commuted their original pensions for a
lumpsum of Rs.35,568 and Rs.43,601 on 30.10.1972 and
17.8.1972 respectively.
The Third Central Pay Commission was required to make
its recommendations in the matter of providing relief to
Government pensioners. The Pay Commission, in order to
secure Government pensioners against the continuing erosion
in the value of the rupees and to recommend appropriate
measures for protecting the pension of Government servants
from such erosion on account of the possible increase in the
case of living in future and after having considered the
matter, recommended that irrespective of the amount of
pension drawn by them, pensioners should be given relief at
the rate of 5% of their pension subject to a minimum of Rs.5
per mensem and a maximum of Rs.25 per mensem. The relief at
those rates were recommended to be given to the Government
pensioners as and when there was a 16 point rise in the 12
months average of the All India Working Class Consumer Price
Index ( 1960- 100). The relief for the first time, at these
rates was to be paid when the 12th monthly average of this
index reached 216. The said recommendation made by the Pay
Commission was duly accepted by the Central Government.

The Ministry of Finance Office Memorandum No. F. 22(8)-
EV(A)/75 dated 13.2.1976 inter alia, provided that where an
officer on his retirement commutes a portion of his pension
he is eligible for relief and ad hoc reliefs in pension on
the full amount of original pension as admissible to him.
Under the said O.M. the term 'Pension' includes for the
purposes of ad hoc relief the commuted portion of pension,
if any. The case of the petitioners is that according to
these Rules, an officer who has commuted any part of this
pension and an officer who has not opted for any commutation
both receive the full quantum of relief and ad hoc relief on
full amount of original pension. It has thus been contended
that for the purposes of grant of the full benefit of relief
or ad hoc relief the Rules do not make any distinction
between an officer who has sought commutation of his
original pension and one who has not sought any such
commutation. The petitioner and other Government servants
who opted for commutation of their original pension in
accordance with the Rules are being arbitrarily and without
just and reasonable cause are deprived of the relief and ad
hoc relief on commutation in pursuance of the Office
Memorandum dated 13.2.1976. Though, an officer who commutes
one third of his pension gets relief and ad hoc relief on
the basis of original amount of his pension but whereas an
officer commutes whole of his original pension is deprived
of the entire amount of the relief or ad hoc relief. The
petitioners have thus contended that aforesaid Office
Memorandum dated 13.2.1976 is vitiated by an inherent
discrimination and is violative of
Articles 14
and
of the
Constitution.
The petitioners have further submitted that they are
entitled to the aforesaid reliefs granted to all other
Government pensioners, and the amount of relief to which
pensioners are entitled and has been denied to them under
the impugned Office Memorandum dated 13.2. 1976 works
out to Rs. 13,592 and Rs. 15,040 in case of petitioner No. 1
and petitioner No. 2 respectively upto 29.2.1984. The
Ministry of Finance in their Office Memorandum No.
2(8)/EV/82 dated 10.10.1983 has sanctioned the grant of
relief and ad hoc reliefs to Government servants who retired
prior to 10th September, 1979 @ 92.5% of their original
pension subject to minimum of Rs.93 and maximum of Rs.463
with effect from 1st July, 1983. This has been done by
taking in view the decline in the purchasing power of the
rupee and the original sanction being insufficient and
meagre to sustain the pensioners.

Apart from the above the petitioners have submitted
that they are also entitled to the benefit of Liberalised
Pension Formula of 1979,which was introduced vide the
Finance Ministry's Office Memorandum No. F. 19(37)/EV/79
dated 25.5-1979, in respect of the approved pensionable
service rendered by them in the Central Government as
admissible to other pensioners who retired from Government
service between 17.4.1950 to 31.3.1979. The said
Memorandum was made applicable only to those Government
servants who retired from service on or after 31.3.1979.
However, this Court in
D.S. Nakara & Others v. Union of
India
, [1983] 2 SCR 165 held that all Central Government
pensioners governed by the Central Civil Service
(Pension) Rules, 1972 were entitled to pension w.e.f.
1.4.1979 as computed under the Liberalised Pension Formula
irrespective of the date of their retirement. Placing
reliance on
the above decision
it has been claimed that
there should be no discrimination between the applicability
of the Liberalised Pension Formula to pre 31.3.1979
pensioners and there is no just and reasonable cause in
denying such benefit to the petitioners under the impugned
Office Memorandum No. F. 1(3)/EV/83 dated 22.10.1983.
Clause 5 of the Office Memorandum dated 22.10.1983 reads
as under:

"Central Government employees, who got
themselves absorbed under Central Public sector
undertaking/autonomous bodies prior to 1.4.1979
and have received/or opted to receive commuted
raise for 1/3rd of pension as well as terminal
benefit equal to the commuted value of the
balance amount of pension left after commuting
1/3rd, of pension, are not entitled to any benefit
under these orders as they were not Central
Government pensioners as on 1.4.79. In cases where
only a portion of pension has been commuted the
pension will have to be enhanced in accordance
with these orders with effect from 1.4.1979".
The above clause makes it clear that such Central
Government employees, who got themselves absorbed under
Central Public Sector Undertakings prior to 1.4.1979 and
opted to receive commuted raise for 1/3rd of pension as
well as terminal benefit equal to the commuted value of the
balance amount of pension left after commuting 1/3rd of
pension were not entitled to any benefit as they were not
Central Government pensioners as on 1.4.1979. An identical
writ petition No. 1068/1987 under
Art. 32
of the
constitution was filed on behalf of the Welfare Association
of absorbed Central Government Employees in Public
Enterprises and this Court dismissed the said writ petition
on April 12, 1990.
In the said writ petition benefit of
Judgment of this Court in "Common Cause" a
Registered
Society & Ors. v. Union of India
, [ 1987] 1 SCC 142 was
claimed but the same was negatived by making a distinction
that the Writ Petition "Common Cause" was on behalf of
the Government servants who had commuted their pension
partially and this Court for the reasons indicated in the
judgment came to hold that on the expiry of 15 years from
the date of commutation the entire pension revived. The
petitioners were persons who had, at the time of retirement
from Government service and entering into public sector
had taken the advantage of commuting the entire pension.
They certainly belong to a class different from those whose
case was before this Court at the instance of the common
cause in Writ Petition Nos. 1955-61 of 1983. It was further
held
in
the above case
that the commutation does bring
certain advantages to the committees and the class of
Government officers whom the petitioner seeks to
represent have derived such benefits.'
We find no reason to take a different view. The
commutation brings about certain advantages. The
commuting pensioner gets a lumpsum amount which
ordinarily he would have received in the course of his
spread over period subject to his continuing to live. Thus,
two advantages are certainly forthcoming out of
commutation-(1) availability of a lumpsum amount, and (2)
the risk factor. In the present case the petitioners had
not only got 1/3rd of their pension commuted but exercised
the option of getting the entire pension commuted and in
lieu thereof got a lumpsum. Such persons cannot fall in
the category of Central Government pensioners for the
purposes of getting benefit of Liberalised Pension Rules
which can be made applicable only to Central Government
Pensioners. It is no doubt correct that the family pension
has been allowed in case of the persons like the petitioners
but that does not make them entitled to get any benefit
given to the pensioners on account of the liberalised
Pension Rules taking note of the fallen value of the rupee.

It was contended by Mr. Rao on behalf of the
petitioners that the petitioners are not claiming any
pension but their contention is that the Liberalised Pension
Rules which given benefit to those pensioners who had got
their 1/3rd pension commuted should be granted to the
petitioners by awarding lumpsum after increasing their
pension and calculating such amount in proportion to the
increased pension. We find no force in this contention as
the petitioners fall in a different class altogether and are
not entitled to claim any benefit granted to Central
Government pensioners. After getting a lumpsum in lieu
of entire pension, they do not fall in the class of Central
Government pensioners and are not entitled to any benefit
granted to Central Government pensioners. The case of
such Central Government pensioners who got their 1/3rd
pension commuted also fall in a different class in as much
as they get 2/3rd pension, and after 15 years of such
commutation or having attained the age of 70 years whichever
was later they become entitled to full pension. Petitioners
on the other hand were not entitled to any pension after
having received the lumpsum amount in lieu of pension being
commuted and having opted to receive such amount in lumpsum
at the time of entering the service in Public, Sector
Undertaking.

In the above mentioned civil appeal the legal question
is identical except that the appellant in this case became a
pensioner of the Central Government w.e.f. 1.4.1977 and the
pension determined as payable to him was Rs.609 per month
and the same was got commuted by the appellant for a lumpsum
amount on and from 7.8.1978. The appellant had exercised the
option for absorption in Steel Authority of India Limited
(SAIL) a Public Sector Enterprise. The Writ Petition filed
by him before the High Court of Delhi was dismissed on
25.8.1982. The appellant then filed a S.L.P. against the
said order. This Court had granted special leave on
25.3.1985 and had given a direction to hear the appeal
alongwith the writ petition Nos. 11757 & 11758 of 1984.

In the result we find no force in all these cases and
the same are dismissed with no order as to costs.

R.P. Petitions and Appeal
dismissed.