Summarize the following court judgment. Special Leave Petition (Civil) No. 8461 of 1986. From the Judgment and Order dated 31.3.1986 of the Central Administrative Tribunal	 New Delhi	 in Original Appln. No. 40 of 1986. 356 AND Writ Petition Nos. 1285	 1575/86	 352	361 & 1165 of 1989. (Under Article 32 of the Constitution of India). Petitioners in Person in SLP 8461 of 1986 and W.P. No. 1285 of 1986. Shanti Bhushan	 Mrs. Swaran Mahajan	 Ms. Anuradha Maha jan	 Mrs. Rekha Pandey	 Jayant Bhushan	 Badri Das Sharma	 C.V. Francis	 Ramesh Babu	 Ms. Santosh Paul and G. Prakash	 for the Petitioners in W.P. No. 1575 of 1986	 352	361 and 1165 of 1989. Kapil Sibal	 Additional Solicitor General	 R.B. Datar	 Mukul Mudgal	 C.V. Subba Rao	 B.D. Sharma	 R.B. Mishra	 B.K. Prasad and A.M. Khanwilkar for the Respondents. N.P. Saxena for the Intervener. The Judgment of the Court was delivered by K.N. SAIKIA	 J. This analogous cluster of five writ petitions and one special leave petition involves a common question of law. The petitioner in Writ Petition No. 352 of 1989 is the President of the All India Retired Railwaymen (P.F. Terms) Association and the petition has been filed in a representative capacity on behalf of all the members of the Association who retired with Provident Fund benefits. Writ Petition No. 361 of 1989 has been filed by three indi vidual retired Railway employees who also retired with Provident Fund benefits. The petitioner in Writ Petition No. 1285 of 1986 retired as Block Inspector of Northern Railway on 7.1.1968	 a non pensionable post. All the petitioners except petitioner No. 5 in W.P. No. 1575 of 1986 retired from Railway service high posts. Petitioner No. 1 retired as Additional Member	 Railway Board on 5.11.1960 with Provident Fund benefits. Petitioner No. 2 was Member	 Railway Board and similarly retired on 1.3. 1968 opting for Provident Fund Scheme as at that time the maximum monthly pension was Rs.675 only. Petitioner No. 3 similarly retired as General Manager on 5.12.1960. Petitioner No. 4 retired as Member (Staff) Railway Board and Ex officio Secretary to the Gov ernment of India on 30.6.1977 opting for the Provident Fund Scheme. Petitioner No. 5 also retired on 19.6.1972 opting for the Provident Fund Scheme. Petitioner No. 6 retired on 28.8.1962 as Director 357 Health	 Railway Board opting for Provident Fund Scheme. Petitioner No. 7 similarly retired on 17.2.1968 as Director	 Railway Board. Petitioner No. 8 retired as General Manager	 Indian Railways on 15.10.1966 with the Contributory Provi dent Fund Scheme. The petitioners in Writ Petition No. 1165 of 1989are also similarly retired persons. The petitioner in Special Leave Petition (Civil) No. 8461 of 1986 retired as Assistant Auditor	 with Provident Fund benefits. His claim to switch over to pension after retirement was rejected. The petitioners are thus retired railway employees who were covered by or had opted for the Railway Contributory Provi dent Fund Scheme. It is the petitioners ' case that before 1957 the only scheme for retirement benefits in the Railways was the Provident Fund Scheme wherein each employee had to contribute till retirement a portion of his annual income towards the Provident Fund and the Railways as the employer would make a matching contribution thereto. This provident Fund Scheme was replaced in the year 1957 by the Pension Scheme whereunder the Railways would give posterior to his retirement certain monthly pension to each retired employee instead of making prior contribution to his Provident Fund. It is stated that the employees who entered Railway service on or after 1.4.1957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme. In so far as the employees who were already in service on 1.4.1957	 they were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits on condition that the matching Railway contribution already made to their Provident Fund accounts would revert to the Railway on exercise of the option. It is the petitioners ' case that till 1.4.1957 or even sometime thereafter	 the pensionary benefits and the alter native Contributory Provident Fund benefits were considered to be more or less equally beneficial	 wherefore	 employees opted for either of them. That the benefits of the two were evenly balanced was evidenced by the Railway Board circular dated 17.9.1960 which gave an option to the employees cov ered by the Provident Fund Scheme to switch over to pension scheme and vice versa. Mr. Shanti Bhushan	 the learned counsel for the petitioners in Writ Petition Nos. 352 and 361 of 1989	 submits that between 1957 and 1987 the pensionary benefits of Railway employees were enhanced on several occasions by different ways such as altering the formula for computing the pension	 by including dearness allowance in the pay for computing pension	 by removal of the ceiling on pension	 and by intro 358 ducing or liberalising the Family Pension Scheme etc. The Railway	 it is urged	 had expressed no intention of extend ing the benefits of this liberalised pension to those em ployees who had already retired. At the time when the option was given to choose between pension and Provident Fund	 the employees had no idea that in future improvements would be made to either of them. However	 it is stated	 this Court in D.S. Nakara and Ors. vs Union of India	 ; held that the benefit of any liberalisation in computation of pension would also have to be extended to those employees who had already retired as they were similarly situated with those who were yet to retire. It is submitted	 that even though Nakara 's case related to Central Government employ ees	 the Railways also implemented the Judgment and extended the liberalised pension benefits even to those employees who had retired long before the liberalisations concerned were introduced. The decision to implement Nakara 's Judgment to Railway employees is admittedly contained in G.O. No. FI (3) EV/83 dated 22.10.1983. This has	 according to the learned counsel	 given rise to the "strange situation" namely	 that while two alternative benefits of provident fund and pension were more or less equal at the time when the petitioners were to make their choice	 the pensions have thereafter been liberalised manifold to the benefit of the pension retirees	 whereas no similar benefits have been extended to those who retired opting for Provident Fund	 hereinafter called 'the P.F. retirees '. It is asserted that due to successive liberalisations of pensions	 the pension retirees derived manifold benefits while the P.F. retirees ' benefits remained stagnant. It is submitted that had the petitioners	 all of whom are P.F. retirees	 known that pensionary benefits might subsequently be so increased	 they would no doubt have opted for pension instead of Provident FUnd	 The following twelve notifications given such options are referred to: Date of Notification Cut off date chosen 1. 17.09.60 01.07.59 2. 26.10.62 01.09.62 3. 03.03.66 31.12.65 4. 13.09.68 01.05.68 5. 23.07.74 01. 01.73 359 6. 23.08.79 31.03.79 7 01.09.80 23.02.80 8. 04.10.82 31.08.82 9. 09.11.82 31.01.82 10. 13.05.8 31.01.82 11. 18.06.85 31.03.85 12. 08.05.87 01.01.86 It may be noted that in case of each option the cut off date was anterior to the respective dates of.announcement	 and as a result	 employees who retired after the cut off date (specified date) and before the notification date were also made eligible for exercising the option despite the fact that they already retired in the meantime. From the above	 the 'main legal point ' that arises	 submits Mr. Shanti Bhushan	 is that the Railways issued the above noti fication giving option to certain P.F. retirees after the respective cut off dates to opt for the Pension Scheme even after their retirement	 but the same options were not given to other similarly situated P.F. retirees beyond the respec tive cut off dates. This	 it is submitted	 is clearly dis criminatory and violative of article 14 of the Constitution and deserves to be struck down. It is contended by the petitioners that each of the above notifications including the last one	 dated 8.5. 1987 had given a fresh option to some of the P.F. retirees while denying that option to other P.F. retirees who were identi cally placed but were separated from the rest by the arbi trary cut off date. Each of the notifications specified a date and provided that the P.F. retirees who retired on or after that date would have fresh option of switching over to the pensionary benefits even though they had already re tired	 and also had already drawn the entire Provident Fund benefits due to them. It is also contended that the speci fied dates in these notifications having formed the basis of the discrimination between similarly placed P.F. retirees those were arbitrary and un related to the objects sought to be achieved by giving of the option and were clearly viola tive of article 14 and also of the principle laid down in Nakara 's case	 which according to counsel	 is that pension retirees could not be divided by such arbitrary cut off 360 dates for the purpose of giving benefitS ' to some and not to other similarly situated employees; and that by analogy the rule is equally applicable to the Provident Fund retirees as a class. Mr. Kapil Sibal	 the learned Additional Solicitor Gener al refuting the argument submits that each of the options was meant to give the P.F. retirees after the specified dates option to switch over to Pension Scheme and that each specified date had nexus with the reason for granting the particular option. He relies on the following statements to substantiate his submission. STATEMENT SHOWING PENSION OPTIONS GIVEN TO RAILWAY EMPLOYEES S1. No. Option Granted Option Reasons for Rly. Board 's validity granting letter No. period option date 1 2 3 4 5 1. I Option F(E) 50/RTI/6 1.4.57 to 31.3.58 Intro dated 16.11.57 (For those duction in service on system 1.4.1957 on Rai lways Extensions F(P) 58.PN 1/6 Extended upto dated 7.3.58 30.6.56 F(P)58.PN 1/6 Extended upto dated 19.6.58 31.12.58 F(P)58.PN 1/6 Extended upto dated 24.12.58 31.3.59 F(P)58.PN 1/6 Extended upto dated 28.3.59 30.9.59 2. II Option PC 60/RB/2/2 1.7.59 to 15.12.60 Revi dated 17.9.60 (For those in sion service on of Pay Struc ture (2 nd Pay Commiss ion re commenda tion) 361 Extensions PC 60/RB 2/2 Extended upto dated 7.4.61 30.6.61 PC/60/RB 2/2 Extended upto dated 2.11.61 31.12.61 3. III Option F(P)62.PN 1/2 1.9.62 to 31.3.63 Consequ dated 26.10.62 (For those in ent upon service on 1.9.62 decision to count officiati ng pay for pensionary benefits. IV Option F(P)63.PN/1/ 1.1.64 to 16.7.66 Introduc 40 dated 17.1.64 tion of family pension scheme. V Option F(P)65.PN1/41 31.12.65 to In pursuance dated 3.3.66 30.6.66 of decision (for those to liberalise in service on the family 31.12.65 pension Scheme by Extending it to employ ess who die wh ile in service. VI Option F(E) III.68.PN 1.5.68 to 31.12.68 In pursu 1/2 dated 13.9.88 (for those in ance of service on decision 1.5.68 to change the defi nition of "pay" w.e. f.1.5.68 for the purpose of pensionary benifits. 362 Extensions F(E)III.68PN Extended upto 1/2 dated 31.1.69 31.3.69 7. VII Option F(E)III.71.PN 15.7.72 to As a result of 1/3 dated 15.7.72 21.10.72 demandes from (for those orgnised in service labour. on 15.7.72 8. VIII Option PC III.73.PN/3 1.1.73 to 22.1.75 Consequet dated 23.7.74 (for those to acceptance in service III Pay Commis on 1.1.73) sions ' Recommen dations. Extensions PC III.73.PN/3 Extended upto Extended becau dated 18.1.75 & 30.6.76 & se by schedule for 25.6.75 31.12.75 vsrious categories PC III	 73.PN/3 Extended upto were being Pt I 30.6.76 Finalised. dated 16.12.75 PC III.73 PN/3 Extended upto Pt. I 31.12.76 dated 30.6.76 PC III 73 PN/3 Extended upto Pt. I 30.6.76 dated 3.1.77 PC III 73 PN/3 Extended upto Pt. I 31.12.77 dated 12.7.77 PC III 73 PN/3 Extended upto Pt. I 30.6.78 dated 17.4.78 PC III 73 PN/3 Option Exercised Pt. I upto 31.12.78 be dated 20.5.78 considered as valid PC III.78 PN/3 (staff who were in Pt. I service as on 1.1.73 & dated 27.12.78 retired/died/quited service during the period from 1.1.73 to 31.12.78) 363 9. IX Option F(E) III. to On account 1/4 22.2.80 of liberalisa dated 23.8.79 (For those in tion of pen service on sion formula 1.4.79) and introduc tion of slab system. Extensions F(E) III. PN Extended upto 1/4 dated 1.9.80 22.2.81 10. X Option F(E) III 82. 31.8.82 to 28.2.830n account PN 1/7 (For those in of part of DA dated 4.10.82 service on treated as 31.8.82) pay. Extension F(E)III 82. PN Extended upto 1/7 dated 13.5.83 31.8.83 % made applicable from 31.1.82 under letter No. F(E) III dated 9.11.82 11. XI Option F(E) III 85. 31.3.85 to Consequent PN 1/5 17.12.85 upon DA/ dated 18.6.85 (For those inADA upto service on average price 31.3.85 ) index at point 568 treated as pay for retire ment benefits. XII Option PC IV/87/13/ 1.1.86 to 30.9.87 All CPFbene 881 ficiaries who dated 8.5.87 (for those in were in service service on on 1.1.86 and 1.1.86) who are still in service will be deemed to 364 have come over to pen sion Scheme unless they specifically opt out pension scheme and desire to retain the CPF scheme. INTRODUCTION OF PENSION SCHEME OF RAILWAYS AND SUBSEQUENT PENSION OPTION (i) Introduction of Pension Scheme Pension Scheme was introduced on the Railways on 16.11.57 and was applicable to the following: (a) To all Railway servants who enter service on and after 16.11.57 and (b) To all non pensionable Railway servants who were in service on 1.4.57 or join Railway Service between 1.4.57 and 16.11.57 and opt for the Pension Scheme. The scheme was made applicable from 1.4.57 because the financial year commences from April each year. This option was extended 4 times from time to time and was valid upto 28.3.59. The extensions were given because there were repre sentations for its extension so that the staff could get time to weigh the merits of the Schemes before they take decision. (ii) Pension option dated 17.9. 1960 Orders were issued on 2.8.1960 notifying Railway Serv ices (Authorised Pay) Rules	 1960. Under this notification new pay scales were introduced for Railway Servants. These new pay scales were effective from 1st July	 1959. Fresh option was granted on 17.9.60 to Railway employees who were in service on 1.7.59 to come over to the pension scheme. The last 365 date for exercising the option was 15.12.60. This was ex tended upto 31.12.60 to enable the concerned employees to come to a considered decision whether to retain the P.F. or opt for the pension scheme. (iii) Pension Option dated 26.10.62 A decision was taken on 26.10.62 to count the officiat ing pay for the purpose of retirement benefits in case of those who were in service on 1.9.62. Accordingly	 a fresh option was given to staff to come over to pension scheme on 26.10.62. This option remained open till 31.3.63. (iv) Pension Option dated 17. 1964 As a result of introduction of Family Pension Scheme 1964	 which came into force on 1.1.1964 orders were issued on 17.1.64 to the effect that all Railway employees who were in service could opt for pension scheme within a period of 6 months. This option was extended upto 16.9.64. (v) Pension Option dated 3.3.66 Family Pension Scheme was further liberalised for em ployees who die while in service. In view of this improve ment in Pension Scheme	 pension option under Railway Board 's orders dated 3.3.66 was given to employees who were in service on 31.12.65. Since the liberalisation in Family Pension Scheme came into effect from 1st January	 1966	 the option was open for employees who were in service on 31.12.65 and was open upto 30.6.1966. (vi) Pension Option dated 13.9.68 The definition of 'Pay ' for pensionary benefits was changed from 1.5.68	 through Board 's orders dated 13.9.68. In view of this	 a further option was given on 13.9.68 to Railway employees who were in service on and after 1.5.68 to opt for the Pension Scheme. This option was open upto 31.12.68. This was further extended upto 31.3.69. (vii) Pension Option dt. 15.7. 72 On representation from the recognised labour federations that many employees had not clearly understood the liberali sation introduced in the pension scheme	 a fresh option was allowed on 15.7.72 to all serving employees. This was open till 21.10.72. 366 (viii) Pension Option dated 23.7. 74 This option was based on similar orders issued by Minis try of Finance. The rationale behind this option was that the recommendations of the 3rd Pay Commission became effec tive from 1.1.73 but pay structure of all employees who were in service on 1.1.73 got altered through orders issued piecemeal from time to time. There were liberalisations in the pension scheme also in the form of increase in the amount of gratuity as also introduction of the concept of Dearness Relief made available to the pensioners. This option was made available to all employees who were in service on 1.1.73. Employees who had retired earlier did not get affected in any way by the recommendations of the 3rd Pay Commission and were accordingly not given this option to come over to Pension Scheme. This option was available upto 22.1.75	 a period of 6 months. The option given vide letter of 23.7.74 was extended from time to time till 31.12.78. The reason why this exten sion had to be allowed was that the revised pay scales recommended by the Pay Commission for many of the categories could not be finalised and notified. Till such time	 the revised pay scale admissible to each category was made known	 it was impossible for the concerned staff to assess the benefit admissible for opting for the revised scale as also for the pension option. The pension option had there fore to be extended from time to time in this manner. The letters authorising extension of the date of option were not very clearly worded with the result that the pen sion option during the periods of extension was granted	 even to those who had retired before such extension became admissible but who were in service on 1.1.73. The clarifica tion was accordingly issued to all the Railways stating that the subsequent orders extending the date of option were applicable to serving employees only	 but the cases already decided otherwise may be treated as closed and need not be opened again. It was subsequently represented by the organised labour that the options actually exercised upto 31.12.78 should be treated valid even though such cases may not have been decided by that date. This was agreed to and orders issued accordingly. (ix) Pension Option dated 23.8. 79 A liberalised formula and slab system for calculation of pension 367 effective from 31.3.79 was notified by Railway Board on 1.6.79. Accordingly	 orders were issued on 23.8.79 allowing pension option to those Railway employees who were in serv ice on 31.3.79. This option was initially open till 22.2.80 but was extended subsequently to enable wider participation upto 22.2.1981. (x) Pension Option dated 4. 10.82 Orders were issued by Board on 30.4.82 ordering that a portion of Dearness Allowance will be treated as pay for retirement benefits w.e.f. 31.1.82. Accordingly a fresh option was allowed on 4.10.82 which could be exercised by Railway employees who were in service on 31.1.82. This option was available upto 31.8.83. (xi) Pension Option dated 18.6.85 Orders were issued by Railway Board on 17.5.85 merging Dearness Allowance to the price index upto 568 with pay for the purpose of retirement benefits and raising the ceiling of DCRG from 36	000 to 50	000 w.e.f. 31.3.85. Accordingly	 another option was granted to the Railway employees who were in service on 31.3.85. This option was available for a period of 6 months i.e. upto 17.12.1985. (xii) Pension Option dated 8.5.87 Consequent upon acceptance of the recommendations of the 4th Pay Commission the revised pay scales were notified on 19.9.86 and 14.3.87	 effective from 1.1.1986. Accordingly another pension option was given to the Railway employees who were in service on 1.1.86 vide orders of 8.5.87. Under these orders those who did not specifically opt out of pension scheme by 17.12.87 would he automatically deemed to have opted for the pension scheme. We may now examine these options. The Railway Board 's letter No. F(E) 50 RTI/6 dated November 16	 1967 introduced the pension scheme for railway servants. It said that the President had been pleased to decide that the pension rules	 as liberalised vide Railway Board 's Memo No. E 48 OPC 208 dated 8.7.1950 as amended or clarified from time to time should apply "(a) to all railway servants who entered serv ice on or after issue of that letter and (b) to all non pensionable railway servants who were in service on 1.4.57 or have joined railway service between that date and the date of issue of the order." The Railway servants referred to in para (b) were required 368 to exercise an unconditional and unambiguous option on the prescribed form on or before 31.3.1958 electing for the pensionary benefits or retaining their existing retirement benefits under the State Railway Provident Fund Rules. It further said that any such employee from whom an option form prescribed for the employee 's option was not received within the above time limit or whose option was incomplete or conditional or ambiguous shall be deemed to have opted for the pensionary benefits and if any such employee had died by that date or on or after 1.4.57 without exercising option for the pensionary scheme	 his dues would be paid on the provident fund system. The period of validity of this option was first extended upto 30.6.58	 31.12.58	 31.3.59 and lastly upto 30.9.59. There could	 therefore	 be no doubt that those who did not opt for the pension scheme had ample opportunity to choose between the two. The second option was given by the Board 's letter No. PC 60/ RB/2/2 dated 17.9.60 to elect the retirement benefits under the Provident Fund Rules or the Pension Rules. All Railway servants who were in non pensionable service on 15.11.57 prior to the introduction of the pension scheme on the Railways and who were still in service including (IPR) on 1.7.59 were granted this option to have their retirement benefits regulated by the State Railway Provident Fund Rules or the Railway Pension Rules. Every eligible railway servant was given the option to change over from P.F. benefits to pensionary benefits or vice versa. It clearly said that Railway servants who did not exercise the option would continue to be eligible for the P.F. benefits or pensionary benefits as the case might be for which he was already eligible. The option was subject to the special conditions stated therein. Where the Railway servants opted for pensionary benefits	 the part of the Government contribution together with interest thereon and/or special contribution to the Railway servants ' P.F. account had already been paid	 the excess of the amount over the gratuity due under the Pension Rules should be refunded to the Government. It clearly said that: "the option once exercised shall	 however	 be final and irrevocable irrespective of the decision taken on that issue. " If a Railway servant opted for P.F. benefits and if the payment of pensionary benefits had already commenced	 further payment would be stopped and his P.F. account would be reconstructed as if he had never opted for pensionary benefits. The period of validity of option was extended upto 30.6.61	 and then upto 31.12.61. This letter clearly indi cated the reason for giving this option as "under the re vised pay structure introduced from 1.7.59	 the bulk or whole of the D.A. previously payable 369 have been absorbed into pay and a number of changes are also being made in the rules regarding retirement benefits. " In pursuance of the 3rd Pay Commission Report	 Govern ment decided to give opportunity to opt for liberalised Railway Pension Rules including benefits of Family Pension Scheme	 1964	 to Railway employees	 who had retained the contributory P.F. Rules and who were in service on 31.3.1979 and retired on or after that date provided they gave in writing their option within six months. Employees who had retired under the said State Railway P.F. (Contributory) Rules	 their option would be valid if they refunded the entire Government contribution and the excess	 if any	 of special contribution to P.F. received by them over D.C.R.G. due to them under Pension Rules. In case of deceased employ ees request could be made for option by valid nominee and in the absence. of him by legal guardian. Thereafter a number of representations were made and the Government extended the time for giving option for adopting Pension Scheme in place of contributory P.F. Scheme. As a result of treatment of a portion of ADA as pay for purpose of retirement benefits and consequently enhancement in pensionary benefits	 the date for giving option was further extended by 28.2.1983 only for these employees who were in service on 31.8.1982 and who quitted/retired on or after that date. The date of option was further extended from time to time. Keeping in view the treatment of entire DA upto the price index line of 568 as pay for retirement benefit with effect from 31.3.85	 removal of ceiling limit of Rs. 1500 on pension and raising of ceiling of DCRG from Rs.36	000 to Rs.50	000 the date of option for employees who were in service on 31.3.85 and onwards and still governed by S.R.P.F. (Contributory) Rules	 was further extended upto 17.12.1985 provided the amount of death cum retirement gratuity and the excess	 if any	 of special contribution over the D .C.R.G.	 was refunded. The 12th option was as under. "Government of India/Bharat Sarkar Ministry of Railways/Rail Mantralaya (Railway Board) Machine No. PC IV/87/13/881 No. PC IV/87/Imp. PW 1 370 The General Managers	 RBBIS. No. 116/87 All Indian Railways	 New Delhi	 dated 8th May	 1987 Production Units etc. as per mailing list. Subject: Change over of Railway employees from the SRPF (Contributory Scheme) to Pension Scheme 'Implementation of the recommendation of the IV Central Pay Commission regard ing. The Railway employees who are covered by the SRPF (Contributory Scheme) CPF Scheme have been given repeated options in the past to come over the Pension Scheme. Howev er	 some Railway employees still continue under the CPF Scheme. The Fourth Central Pay Commission has now recommend ed that all CPF beneficiaries in service on January 1	 1986	 should be deemed to have come over to the Pension Scheme on that date	 unless they specifically opt out to continue under the GPF Scheme. After careful consideration the President is pleased to decide that the said recommendation shall be accepted and implemented in the manner hereinafter indicated. All CPF beneficiaries	 who were in service on 1.1.86 and who are still in service on the date of issue of these orders	 will be deemed to have come over to the Pension Scheme. ? 3.2. The employees of the category mentioned above will	 however	 have an option to continue under the CPF Scheme	 if they so desire. The option will have to be exercised and conveyed to the concerned Head of Office by 30.9.87	 in the form enclosed	 if the employees wish to continue under the GPF Scheme. 1f no option is received by the Head of Office by the above date the employees will be deemed to have come over to the Pension Scheme. The CPF beneficiaries	 	who were in service on 1.1.1986	 but have since retired and in whose cases retire ment benefits have also been paid under the CPF Scheme	 will have an option to 'have their retirement benefits calculated under the Pension Scheme provided they refund 371 to the Government the Government contribution to the Con tributory Provident Fund and the interest thereon	 drawn by them at the time of settlement of the CPF Account. Such option shall be exercised latest by 30.9. CPF beneficiaries	 who were in service on 1.1.1986 but were since retired	 and in whose cases the CPF Account has not already been paid	 will be allowed retirement benefits as if they were borne on pensionable establishments	 unless they specifically opt	 by 30.9.87	 to have their retirement benefits settled under the CPF Scheme. Cases of CPF beneficiaries	 who were in service on 1.1.86	 but have since died	 either before retirement or after retirement	 will be settled in accordance with para 3.3. or 3.4 above	 as the case may be. Options in such cases will be exercised	 latest by 30.9.87	 by the widow/widower and	 in the absence of widow/widower	 by the eldest surviv ing member of the family	 who would have otherwise been eligible to family pension under the Family Pension Scheme	 if such Scheme were applicable. The option	 once exercised	 shall be final. 3.7. . . . . 4.1. . . . . . 4 . 2 In the case of employees referred to above who come over or are deemed to have come over to the Pension Scheme	 the Government 's contribution to the CPF together with the interest thereon	 credited to the CPF Account of the employee	 will be resumed by the Government. Special contribution to Provident Fund if already paid in these cases	 will be adjusted against the death/ retirement Gratuity	 payable under these orders. The employee 's contri bution	 together with the interest thereon at his credit in the CPF account	 will be transferred to the CRPF (Non Con tributory) Account	 to be allotted to him	 on his coming over to the Pension Scheme. 4.3. . . . . . . . 5 'A proposal to grant ex gratia payment to the benefici aries	 who retired prior to 1.1.1986 and to the 372 families of CPF beneficiaries who died prior to 1.1.1986	 on the basis of the recommendations of the Fourth Central Pay Commission	 is separately under consideration of the Govern ment. The said ex gratia payment	 if and when sanctioned	 will not be admissible to the employees or their families who opt to continue under the CPF Scheme from 1.1.1986 onward. 6. . . . . (G. Chatterjee) Executive Director	 Pay Commission Railway Board. " The learned Additional Solicitor General stated that each option was given for stated reasons related to the options. On each occasion time was given not only to the persons in service on the date of the Railway Board 's letter but also to persons who were in service till the stated anterior date but had retired in the meantime. The period of validity of option was extended in all the options except Nos. 3rd	 4th	 5th and 7th. We find the statements to have been substantiated by facts. The cut off dates were not arbitrarily chosen but had nexus with the purpose for which the option was given. Mr. Shanti Bhushan however submits that applying the law laid down in Nakara 's case this Court should simply strike down or read down paragraph 8.1 of the above 12th option dated 8.5. That paragraph said that aH C.P.F. benefi ciaries who were in service on 1.1.86 and who were still in service on the date of issue of the order would be deemed to have come over to the pension scheme. It is submitted that once this limiting requirement is removed all the C.P.F. beneficiaries shall be eligible and will be deemed to have come over to the pension scheme. As the basis or justification for striking or reading down paragraph 3.1 on Nakara 's ratio	 it is urged that all the Railway employees numbering about 22 lakhs comprising 16	22	000 in service and about 6 lakhs pensioners constitute one family and must be treated as one class as the Govern ment 's obligation to look after the retired Railway employ ees both under the pension scheme and the provident fund scheme being the same	 they could not be treated different ly. Any differential treatment will be discriminatory and violative of Article 14 of the Constitution of India. In Nalcara 's case the date arbitrarily 373 chosen was struck down and as a result the revised formula for computing pension was made applicable to all the retired pensioners. The same principle	 it is urged	 has to be extended to the provident fund retires also otherwise there would be discrimination. It is stated that though at the time of choosing between provident fund and pension scheme both the alternative appeared to be more or less equal and the retired provident funders took their lump sum yet subse quently stage by stage the pensioners benefits were in creased in such ways and to such extent that it became more and more discriminatory against the provident funders old and new. It was because of this discrimination that aucces sive options were given by the Railway Board for the provi dent funders to become pensioners. Hence the submission that this limitation must go	 and all the provident funders must be deemed to have become pensioners subject to the condition that the Government contribution received by them along with interest thereon is refunded or adjusted. Obviously this gives no importance to the condition in the notifications that option once exercised shall be final and binding and to the fact that in each option a cut off date was there relat ed to the purpose of giving that option: Admittedly	 the entire case of the petitioners is sought to be based on the decision in Nakara 's case. Mr. Kapil Sibal submits that the petitioners ' basic assumption is erroneous inasmuch as Nakara 's case did not hold that when ever there was a liberalisation of pension all other pension retirees and P.F. retirees must be given option and that the older system of pension or Provident Fund was always insuf ficient. According to counsel the only question decided in Nakara can be gathered from the following paragraph of the report at page 172: "Do pensioners entitled to receive superannuation or retir ing pension under Central Civil Services (Pension) Rules	 1972 ( ' 1972 Rules ' for short) form a class as a whole? Is the date of retirement a relevant consideration for eligi bility when a revised formula for computation of pension is ushered in and made effective from a specified date? Would differential treatment to pensioners related to the date of retirement qua the revised formula for computation of pen sion attract Article 14 of the Constitution and the element of discrimination liable to be declared unconstitutional as being violative of article 14?" The basic question of law that has to be decided	 therefore	 is what was the ratio decidendi in Nakara 's case and how far that would 374 be applicable to the case of the P.F. retirees. The doctrine of precedent	 that is being bound by a previous decision	 is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it	 especially when they contain "propositions wider than the case itself required. " This was what Lord Selborne said in Caledonian Railway Co. vs Walker 's Trustees and Lord Halsbury in Quinn vs Leathem	 	 (502). Sir Frederick Pollock has also said: "Judicial authority belongs not to the exact words used in this or that judgment	 nor even to all the reasons given	 but only to the principles accepted and applied as necessary grounds of the decision." In other words	 the enunciation of the reason or princi ple upon which a question before a court has been decided is along binding as a precedent. The ratio decidendi is the underlying principle	 namely	 the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particu lar case which gives rise to the decision. The ratio deci dendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre existing rule of law	 either statutory or judge made	 and a minor premise consisting of the material facts of the case under immediate considera tion. If it is not clear	 it is not the duty of the court to spell it out with difficulty in order to be bound by it. In the words of Halsbury	 4th Edn.	 Vol. 26	 para 573: "The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi	 as ascertained on a consideration of the judgment in relation to the sub ject matter of the decision	 which alone has the force of law and which when it is clear it is not part of a tribu nal 's duty to spell out with difficulty a ratio decidendi in order to bound by it	 and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case. If more rea sons than one are given by a tribunal for its judgment	 all are taken as forming the ratio decidendi. " The question then is	 has the court said in Nakara that what was applicable to pensioners vis a vis liberalisation of pension was to be equally applicable to P.F. retirees? In Nakara 's case petitioners 1 and 375 2 were retired pensioners of the Central Government	 the first being a civil servant and the second being a member of the service personnel of the Armed Forces. The third peti tioner was a society registered under the Societies Regis tration Act	 1860	 formed to ventilate the legitimate public problems and was espousing the cause of the pensioners all over the country. The first petitioner retired in 1972 and on computation	 his pension worked out at Rs.675 per month and with dearness allowance he was drawing monthly pension of Rs.935. The second petitioner retired at or about that time and at the relevant time was in receipt of a pension plus dearness relief of Rs .981. The Union of India had been revising and liberalising the pension rules from time to time. The Central Government servants on retirement from service were entitled to receive pension under the Central Civil Services (Pension) Rules	 1972. Successive Central Pay Commissions recommended en hancement of pension in different ways. The first Central Pay Commission (1946 47) recommended raising of the retire ment age to 58 years and the scale of pension to 1/80 of the emoluments of each year of service subject to a limit 35/80 with a ceiling of Rs.8	000 per year for 35 years of service. The Second Central Pay Commission (1957 58) did not recom mend any increase in the non contributory retirement bene fits. The Administrative Reforms Commissioner (ARC) 1956 took note of the fact that the cost of living had shot up and correspondingly the possibility of savings had gone down and accordingly recommended that the quantum of pension may be raised to 3/6 of the emoluments of the last three years of service from existing 3/8 and the ceiling to be raised from Rs.675 per month to Rs. 1	000 per month. Before the Government acted upon it	 the Third Central Pay Commission did not examine the question of relief to pensioners because of its terms and recommended no change in the pension formu la except that the existing ceiling to be raised from Rs.675 to Rs. 1	000 per month and the maximum gratuity should be raised from Rs.24	000 to Rs.30	000. On May 25	 1979	 Government of India	 Ministry of Finance	 issued Office Memorandum No. F 19(3) EV 79 whereby the formula for computation of pension was liberalised but made it applicable. to Government servants who were in service on March 31	 1979 and retired from service on or after that date. The formula introduced a slab system for computation of pension which was applicable to employees governed by the 1972 rules retiring on or after the speci fied date. The pension for the service personnel which would include Army	 Navy and Air Force staff was governed by the relevant regulations. By 376 the Memorandum of the Ministry of Defence bearing No. B/40725/ AG/PS4 C/1816/AD (Pension)/Services dated September 28	 1979	 the liberalised pension formula introduced for the government servants governed by the 1972 rules was extended to the armed forces personnel subject to the limitations set out in the memorandum with a condition that the new rules of pension would be effective from April 1	 1979 and may be applicable to all service officers who become/ became non effective on or after that date. This liberalised 'pension formula was to be applicable prospectively to those who retired on or after March 31	 1979 in case of government servants governed by 1972 rules and in respect of defence personnel those who became/become non effective on or after April 1	 1979. Consequently those who retired prior to the specified date would not be entitled to the benefits of the liberalised pension formula. On the above facts the petitioners ' therein contended that this Court would consider the raison d 'etre for payment of pension	 namely	 whether it was paid for past satisfacto ry service rendered	 and to avoid destitution in old age as well as a social welfare or socioeconomic justice measure	 the differential treatment for those who retired prior to a certain date and those retiring subsequently	 the choice of the date being wholly arbitrary would amount to discrimina tion and violative of article 14; and whether the classifica tion based on fortuitous circumstance of retirement before or subsequent to a date	 fixing of which was not shown to be related to any rational principle	 would be equally viola tive of article 14. It was contended that pensioners of the Central Government formed a class for the purpose of pen sionary benefits and there could not be mini classification within the class designated as pensioners. The Court considered the nature and purposes of pension in the context of a welfare State and found that though unquestionably pension was linked to length of service and the last pay drawn which did not imply the pay on the last day of retirement but average emoluments of 36 months serv ice which under the liberalised scheme was reduced to aver age emoluments of 10 months preceding the date which was expected to be higher than that of the higher average emolu ments of 36 months	 coupled with the slab system for compu tation amounted to liberalisation of pension in different ways. If the pensioners who retired prior to the specified date had to earn pension on the average emoluments of 36 months ' salary just preceding the date of retirement	 natu rally the average would be lower and they would be doubly hit because the slab system newly introduced was not avail able to them 377 while the ceiling was at a lower level and thus they would suffer "triple jeopardy	 viz.	 lower average emoluments	 absence of slab system and lower ceiling. " This Court	 therefore	 wanted to know what was the purpose in prescrib ing the specified date vertically dividing the pensioners between those who retired prior to the specified date and those who retired subsequent to that date and why was the pension scheme liberalised. Receiving no satisfactory reply the Court observed: "Both the impugned memoranda do not spell out the raison d 'etre for liberalising the pension formula. In the affida vit in opposition by Shri S.N. Mathut	 it has been stated that the liberalisation of pension of retiring Government servants was decided by the Government in view of the per sistent demand of the Central Government employees repre sented in the scheme of Joint Consultative Machinery. This would clearly imply that the pre liberalised pension scheme did not provide adequate protection in old age and that a further liberalisation was necessary as a measure of econom ic security. When Government favorably responded to the demand it thereby ipso facto conceded that there was a larger available national cake part of which could be uti lised for providing higher security to erstwhile government servants who would retire. The Government also took note of the fact that Continuous upward movement of the cost of living index as a sequel of inflationary inputs and dimin ishing purchasing power of rupee necessitated upward revi sion of pension. If this be the underlying intendment of liberalisation of pension scheme	 can any one be bold enough to assert that it was good enough only for those who would retire subsequent to the specified date but those who had already retired did not suffer the pangs of rising prices and falling purchasing power of the rupee?" The Court then proceeded to examine whether there was any rationale behind the eligibility qualification and finding no rationale concluded: "Therefore	 this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed	 it would be discriminatory." 378 The Court accordingly concluded that the division was thus arbitrary and unprincipled and therefore the classifi cation did not stand the test of article 14. It was also arbi trary as the Court did not find a single acceptable or persuasive reason for this division and this arbitrary action violated the guarantee of article 14. The Court observed that the pension scheme including the liberalised scheme to the Government employees was non contributory in ' character. The payment of pension was a statutory liability undertaken by the Government and whatever became due and payable was 2budgeted for. The Court specifically observed: "One could have appreciated this line of reasoning where there is a contributory scheme and a pension fund from which alone pension is disbursed. That being not the case	 there is no question of pensioners dividing the pension fund which	 if more persons are admitted to the scheme	 would pro rata affect the share. Therefore	 there is no question of dividing the pension fund. Pension is a liability incurred and has to be provided for in the budget. " The Court further observed: "If from the impugned memoranda the event of being in serv ice and retiring subsequent to specified date is served	 all pensioners would be governed by the liberalised pension scheme. The pension will have to be recomputed in accordance with the provisions of the liberalised pension scheme as salaries were required to be recomputed in accordance with the recommendation of the Third Pay Commission but becoming operative from the specified date. It does therefore appear that the reading down of impugned memoranda by severing the objectionable portion would not render the liberalised pension scheme vague	 unenforceable or unworkable." The Court in Nakara was not satisfied with the explana tion that the legislation had defined the class with clarity and precision and it would not be the function of this Court to enlarge the class. The Court held in paragraph 65 of the report: "With the expanding horizons of socio economic justice	 the Socialist Republic and welfare State which we endeavour to set up and largely influenced by the fact that 379 the old men who retired when emoluments were comparatively low and are exposed to vagaries of continuously rising prices	 the falling value of the rupee consequent upon inflationary inputs	 we are satisfied that by introducing an arbitrary eligibility criterion: 'being in service and retiring subsequent to the specified date ' for being eligi ble for the liberalised pension scheme and thereby dividing a homogeneous class	 the classification being not based on any discernible rational principle and having been found wholly unrelated to the objects sought to be achieved by grant of liberalised pension and the eligibility criteria devised being thoroughly arbitrary	 we are of the view that the eligibility for liberalised pension scheme of 'being in service on the specified date and retiring subsequent to that date ' in impugned memoranda	 Exs. P 1 and P 2	 violates Article 14 and is unconstitutional and is struck down. Both the memoranda shall be enforced and implemented as read down as under: In other words	 exhibit P 1	 the words: 'that in respect of the government servants who were in service on March 31	 1979 and retiring from service on or after that date '; and in exhibit P 2	 the words: 'the new rates of pension are effective from April 1	 1979 and will be applicable to all service officers who became/become non effective on or after that date '; are unconstitutional and are struck down with this specifi cation that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative to all pensioners governed by 1972 Rules irrespec tive of the date of retirement. Omitting the unconstitution al part it is declared that all pensioners governed by the 1972 Rules and Army Pension Regulations shall be entitled to pension as computed under the liberalised pension scheme from the specified date	 irrespective of the date of retire ment. Arrears of pension prior to the specified date as per fresh computation is not admissible. " Thus the Court treated the pension retirees only as a homogeneous class. The P.F. retirees were not in mind. The Court also clearly observed that while so reading down it was not dealing with any fund 380 and there was no question of the same cake being divided amongst larger number of the pensioners than would have been under the notification with respect to the specified date. All the pensioners governed by the 1972 Rules were treated as a class because payment of pension was a continuing obligation on the part of the State till the death of each of the pensioners and	 unlike the case of Contributory Provident Fund	 there was no question of a fund in libera lising pension. The argument of Mr. Shanti Bhushan is that the State 's obligation towards pension retirees is the same as that towards P.F. retirees. That may be morally so. But that was not the ratio decidendi of Nakara. Legislation has not said so. To say so legally would amount to legislation by enlarg ing the circumference of the obligation and converting a moral obligation into a legal obligation. It reminds us of the distinction between law and morality and limits which separate morals from legislation. Bentham in his Theory of Legislation	 Chapter XII	 page 60 said: "Morality in general is the art of directing the actions of men in such a way as to produce the greatest possible sum of good. Legislation ought to have precisely the same object. But although these two arts	 or rather sciences	 have the same end	 they differ greatly in extent. All actions	 wheth er public or private	 fall under the jurisdiction of morals. It is a guide which leads the individual	 as it were	 by the hand through all the details of his life	 all his relations with his fellows. Legislation cannot do this; and	 if it could	 it ought not to exercise a continual interference and dictation over the conduct of men. Morality commands each individual to do all that is advantageous to the community	 his own personal advantage included. But there are many acts useful to the community which legislation ought not to command. There are also many injurious actions which it ought not to forbid	 although morality does so. In a word legislation has the same centre with morals	 but it has not the same circumference. " In Nakara it was never held that both the pension reti rees and the P.F. retirees formed a homogeneous class and that any further classification among them would be viola tive of article 14. On the other hand the Court clearly ob served that it was not dealing with the problem of a "fund". The Railway Contributory Provident Fund is by 381 definition a fund. Besides	 the Government 's obligation towards an employee under C.P.F. Scheme to give the matching contribution begins as soon as his account is opened and ends with his retirement when his rights qua the Government in respect of the Provident Fund is finally crystallized and thereafter no statutory obligation continues. Whether there still remained a moral obligation is a different matter. On the other hand under the Pension Scheme the Government 's obligation does not begin until the employee retires when only it begins and it continues till the death of the em ployee. Thus	 on the retirement of an employee Government 's legal obligation under the Provident Fund account ends while under the Pension Scheme it begins. The rules governing the Provident Fund and its contribution are entirely different from the rules governing pension. It would not	 therefore	 be reasonable to argue that what is applicable to the pen sion retirees must also equally be applicable to P.F. reti rees. This being the legal position the rights of each individual P.F. retiree finally crystallized on his retire ment whereafter no continuing obligation remained while on the other hand	 as regards Pension retirees	 the obligation continued till their death. The continuing obligation of the State in respect of pension retirees is adversely affected by fall in rupee value and rising prices which	 considering the corpus already received by the P.F. retirees they would not be so adversely affected ipso facto. It cannot	 there fore	 be said that it was the ratio decidendi in Nakara that the State 's obligation towards its P.F. retirees must be the same as that towards the pension retirees An imaginary definition of obligation to include all the Government retirees in a class was 'not decided and could not form the basis for any classification for the purpose of this case. Nakara cannot	 therefore	 be an authority for this case. Stare decisis et non guieta movere. To adhere to prece dent and not to unsettle things which are settled. But it applies to litigated facts and necessarily decided ques tions. Apart from article 141 of the Constitution of India	 the policy of courts is to stand by precedent and not to disturb settled point. When court has once laid down a principle of law as applicable to certain state of facts	 it will adhere to that principle	 and apply it to all future cases where facts are substantially the same. A deliberate and solemn decision of court made after argument on question of law fairly arising in the case	 and necessary to its determina tion	 is an authority	 or binding precedent in the same court	 or in other courts of equal or lower rank in subse quent cases where the very point is again in controversy unless there are occasions when departure is rendered neces sary to vindicate plain	 obvious principles of law and remedy continued injustice. It should be invariably applied 382 and should not ordinarily be departed from where decision is of long standing and rights have been acquired under it	 unless considerations of public policy demand it. But in Nakara it was never required to be decided that all the retirees formed a class and no further classification was permissible. The next argument of the petitioners is that the option given to the P.F. employees to switch over to the pension scheme with effect from a specified cut off date is bad as violative of article 14 of the Constitution for the same rea sons for which in Nakara the notification were read down. We have extracted the 12th option letter. This argument is fallacious in view of the fact that while in case of pension retirees who are alive the Government has a continuing obligation and if one is affected by dearness the others may also be similarly affected. In case of P.F. retirees each one 's rights having finally crystallized on the date of retirement and receipt of P.F. benefits and there being no continuing obligation thereafter they could not be treated at par with the living pensioners. How the corpus after retirement of a P.F. retiree was affected or benefitted by prices and interest rise was not kept any track of by the Railways. It appears in each of the cases of option the specified date bore a definite nexus to the objects sought to be achieved by giving of the option. Option once exer cised was told to have been final. Options were exercisable vice versa. It is clarified by Mr. Kapil Sibal that the specified date has been fixed in relation to the reason for giving the option and only the employees who retired after the specified date and before and after the date of notifi cation were made eligible. This submission appears to have been substantiated by what has been stated by the successive Pay Commissions. It would also appear that corresponding concomitant benefits were also granted to the Provident Fund holders. There was	 therefore	 no discrimination and the question of striking down or reading down clause 3.1 of the 12th Option does not arise. It would also appear that most of the petitioners before their filing these petitions had more than one opportunities to switch over to the Pension Scheme which they did not exercise. Some again opted for P.F. Scheme from the Pension Scheme. Mr. Shanti Bhushan then submits that the same relief as is being canvassed by the petitioners herein has been upheld by this Hon 'ble Court by dismissing the SLP No. 5973/88 of the Government in the case of Union of India vs Ghansham Das and Ors. against the Judgment of the Central Administrative Tribunal	 Bombay. The Tribunal 383 had held the same notifications as were impugned herein to be discriminatory and had directed that a flesh option be given to all P.F. retirees subject to refund of the Govern ment contribution to Provident Fund received by adjusting it against their pensionary rights. Similarly	 it is submitted	 in a Rajasthan case	 both the single Judge and the Division Bench have held that all the retirees would have to be given a flesh option as the notifications giving the option only to some retirees are clearly discriminatory. This view has	 it is urged	 again been upheld by this Hon 'ble Court by dismissing the Special Leave Petition No. 7192/87 of the Government by order dated 11.8.87. We have perused the judgments. The Central Administra tive Tribunal in Transferred Application No. 27/87 was dealing with the case of the petitioners ' right to revise options during the period from 1.4.69 to 14.7.72 as both the petitioners retired during that period. The tribunal ob served that no explanation was given to it nor could it find any such explanation. In State of Rajasthan vs Retired C.P.F. Holder Association	 Jodhpur	 the erstwhile employees of erstwhile Princely State of Jodhpur who after becoming Government servants opted Contributory Provident Fund wanted to be given option to switch over to Pension Scheme	 were directed to be allowed to do so by the Rajasthan High Court relying on Nakara which was also followed in Union of India vs Bidhubhushan Malik	 ; 	 subject matter of which was High Court Judges ' pension and as such both are distinguishable on facts. That the Pension Scheme and the P.F. Scheme are struc turally different is also the view of the Central Pay Com missions and hence ex gratia benefits have been recommended	 which may be suitably increased. In the report of the Third Central Pay Commission 1973	 Vol. 4 at page 49	 dealing with State Railway Provident Fund it was said: "49. Both gazetted and non gazetted Railway employees with a service of not less than 15 years who are governed by the State Railway Provident Fund Scheme are at present allowed a special contribution at the rate of 1/4th of a month 's pay for each completed 6 monthly period of service but not exceeding 15 months ' pay or Rs.35	000	 whichever is less. We have been informed by the Railway Board that for such em ployees the Government contribution and the special contri bution to the Provident Fund 384 together constitute the retirement benefits which in other civil departments are given in the shape of pension and death cum retirement gratuity. Accordingly	 when pensionery benefits to the other civil employees were im proved in 1956 and 1957	 the maximum of the special contri bution to the provident fund for the Railway employees was also increased from Rs.25	000 to Rs.35	000. We have not examined whether and to what extent any further increase in this contribution should be made consequent upon the en hancement of the maximum pension and gratuity being recom mended by us for pensionable employees. The Government may decide the same as they deem fit. " In the Report of the Fourth Central Pay Commission	 in Chapter 9 the Commission has discussed the State Railway Provident Fund Scheme including Contributory Provident Fund Scheme. In para 9.1 of the report	 the Commission said that the employees who joined railways prior to November 16	 1957 and did not opt for the pension scheme were also covered under the C.P.F. Scheme known as State Railways Provident Fund Scheme (SRPF). About 50	000 employees were stated to be covered under the C.P.F. Scheme of which the majority were in the railways. The number of employees who retired under the CPF and SRPF schemes were 1.20 lakhs. Under the CPF scheme every employee was required to subscribe a minimum of 8 1/3 per cent of his reckonable emoluments to be credited to the fund. The Government makes a matching contribution. Both the contributions earned interest at a rate specified by the Government from time to time. On retirement	 employ ees governed under the scheme was paid his contribution	 the contribution made by the Government and the interest earned on the total amount. In para 9.3 of the Report it was stated: "The SRPF scheme in the railways was replaced by the pension scheme as applicable to other Central Government employees	 in November	 1957 and those employees who were in service on April 1	 1957 and were governed by the scheme were given an option to come under the pension scheme. Whenever changes occurred in the pension structure for the Central Government employees an option was given to railway employees still covered by the scheme. Such options have been given on eleven occasions in the 385 past and the last such option was valid upto December	 1985. " Comparing the advantage and disadvantage of the schemes the Commission said: "While pension scheme has been improved	 enlarged and lib eralised from time to time	 there has been no similar im provement in the CPF scheme	 excepting through improvement of rates of interest which were modified from 7 per cent on 1974 to 9 per cent in 1983 84	 to 10 per cent in 1984 85 and to 12 per cent in 1985 86. While those governed by the pension scheme are entitled to receive dearness relief sanctioned from time to time to compensate for increase in the cost of living	 those under the CPF scheme were not entitled to such relief. The employees governed by the CPF scheme are also not entitled to the family pension available to those governed by the pension scheme. The matching gov ernment contribution in the case of CPF employees is paid for the full period of service the restriction of 33 years for those governed by pension scheme does not apply in their case. Those who have retired under the CPF scheme have a corpus yielding regular return. In the case of railway employees	 special contribution to PF is paid at the time of retirement equivalent to half a month 's salary for each completed year of service subject to a maximum of 16 months ' salary or Rs.60	000 whichever is less. The amount of special contribution has been raised from time to time as and when the limit on death cum retirement gratuity was changed. " In para 9.5 of the Report as to ex gratia alternative it is stated: "As the pension scheme was introduced on the railways m ' 1957	 those who retired earlier did not have an opportunity to opt for pension. It was	 therefore	 decided to give some ex gratia payment to them in consideration of the fact that the retirement benefits were lower than what they would have received if they had retired under the pension scheme. Since this applied mainly to the low paid employees	 the ex gratia payment ranging from Rs. 15 to Rs.22.50 per mensem was sanctioned to those drawing pay upto Rs.500 per month. They were also given relief on a 386 graded scale subsequently. The amount of ex gratia payment together with the relief now ranges from Rs. 170 to Rs. 283 per mensem. " In para 9.6	 the Commission said that the P.F. and pension schemes are structurally different. Accordingly alternative ex gratia reliefs were suggested: "We have received a number of suggestions from individuals	 associations and other organisations in respect of the CPF scheme. It has been stated that the objective of both the schemes	 viz.	 pension scheme and the CPF scheme being the same	 there should not be differences in the matter of retirement benefits between the pensioners and the benefici aries of the CPF. It has been urged that the liberalisation in the pension scheme needs to be appropriately extended to the beneficiaries under the CPF scheme. Since the schemes are structurally different	 equality of benefits under the two schemes is not feasible. We are	 however	 of the view that the CPF beneficiaries who have retired on low scales of pay deserve some measure of relief. We according recommend that all the CPF beneficiaries who have retired prior to March 31	 1985 with a basic pay upto Rs.500 per mensem may be given an ex gratia payment of Rs.300 per mensem which will be in addition to the benefits already received by them under the CPF scheme. The ex gratia payments and the period ic increases already received by those who retired on pay upto Rs.500 may be so adjusted that the total ex gratia amount is not less than Rs.300. We further recommend that ex gratia amount of Rs.300 per mensem may be reviewed as and when dearness relief is sanctioned to pensioners." "9.7. Railways have suggested grant of ex gratia payment to the widows and dependent children of deceased employees covered by CPF scheme at 50 per cent of the rate for ex gratia payment. We agree and recommend accordingly for those getting pay upto Rs.500 per mensem. The eligibility of widow and minor children for the purposes of this relief may be same as laid down under the pension rules." "9.8. In so far as the CPF beneficiaries still in service on 387 January 1	 1986 are concerned	 we recommend that they should be deemed to have come over to the pension scheme on that date unless they specifically opt out to continue under the CPF scheme. The CPF beneficiaries who decide to continue to remain under that scheme should not be eligible on retire ment for ex gratia payment recommended by us for the CPF retirees. Government may	 however	 extend the benefit of DCRG to CPF beneficiaries in other departments on the same lines as in railways." "9.9. Government may also consider the feasibility of giving an option to all other CPF retirees who are not covered under paragraph 9.6 above to come over to the pension scheme with effect from January 1	 1986 subject to their refunding to government the entire amount of government contribution inclusive of interest thereon credited to their Provident Fund account at the time of their retirement. " We have no doubt about the above recommendations receiv ing due consideration by the Union of India. The 12th Option already given has to be viewed in this context. The next question debated is that of financial implica tions. It is submitted that given the fact that the budget for the year 1990 91 for disbursement of pension is Rs.900 crores (as per page 11 of the Budget of the Railway Revenue and Expenditure of the Central Government for 1990 91)	 the additional liability which would arise by giving relief to the Petitioners would be insignificant in comparison. Ac cording to the petitioners as per their affidavit dated 15.9.88	 the additional liability would come to Rs. 18 crores per annum and this figure would steadily decrease as the number of P.F. retirees diminishes every year due to the fact that this question arises only with respect to very old retirees	 and a substantial number of them pass away every year. The Government in its affidavit dated 21.9.88 has stated that the additional liability as far as the Railway employ ees are concerned	 would be Rs.50 crores a year. This is based on the assumption that there are 79	000 surviving P.F. retirees. Apart from the fact that this number of 79	000 was based on calculations made in 1988	 and would be greatly reduced by this time	 the petitioners submit that the actual number of survivors would only be about 38	000. Thus	 the actual burden would be less than half. Further	 even assum ing that the figure 388 of 79	000 put forth by the Government is correct	 the aver age annual expenditure per retiree for pension calculated by the Government is incorrect as the calculation includes the non recurring arrear payments for the year 1987 88. Taking the correct figures of total pension outlay and total number of beneficiaries the per capita pension expenditure per annum works out to Rs.4521. Multiplying this by 79	000 (assuming the figures of the Railways to be correct) the annual expenditure comes to Rs.35.71 crores. This compared to the current budget of pensions of Rs.900 crores	 is quite insignificant and can be easily awarded by this Court as was done in Nakara	 it is urged. It is submitted in the alternative that if this Court feels that a positive direction cannot be made to the Gov ernment in this regard	 it is prayed that at least an option should no given to the respondents either to withdraw the benefit of switching over to pension from every one or to give it to the petitioners as well	 so that the discrimina tion must go. We are not inclined to accept either of these submis sions. The P.F. retirees and pension retirees having not belonged to a class	 there is no discrimination. In the matter of expenditure includable in the Annual Financial Statement	 this Court has to be loath to pass any order to give any direction	 because of the division of functions between the three co equal organs of the Government under the Constitution. Lastly	 the question of feasibility of converting all living P.F. retirees to Pension retirees was debated from the point of view of records and adjustments. Because of the view we have taken in the matter	 we do not consider it necessary to express any opinion. Mr. C.V. Francis in W.P. No. 1165 of 1989 argued the case more or less adopting the arguments of Mr. Shanti Bhushan. Mrs. Swaran Mahajan	 in W.P. No. 1575 of 1986	 submitted that the rule as to commuted portion of the pen sion reviving after 15 years should be applied to P.F. retirees so that the corpus of Provident Fund dues received more than 15 years ago should be treated as committed por tion of pension and be allowed to revive for adjustments against pension. In the view we have taken in this case it is not necessary to express any opinion on this question. 389 Mr. R.B. Datar for the respondent in W.P. No. 1575 of 1986 and W.P. No. 352 of 1989 more or less adopted the arguments of the learned Additional Solicitor General. In the result	 all the Writ Petitions and the Special Leave Petition are dismissed	 but the petitioners being retirees	 we make no order as to costs. R.S.S. ' Petitions dismissed.

The petitioners are retired railway employees who were covered by the Railway Contributory Provident Fund Scheme. The Provident Fund Scheme was replaced in the year 1957 by the Pension Scheme. The employees who entered Railway serv ice on or after 1.4.1957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme. The employees who were already in service on 1.4.1957 were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits. The petitioners had opted for Contributory Provident Fund Scheme. The petitioners ' case is that till 1.4.1957 or even sometime thereafter	 the pensionary benefits and the alter native Contributory Provident Fund benefits were considered to be more or less equally beneficial; at the time when the option was given to choose between pension and Provident Fund	 the employees had no idea that in future improvements would be made to either of them; and that as a result of the decision of the Railways to implement the judgment of this Court in D.S. Nakara vs Union of India	 ; 	 and to extend the liberalised pension benefits even to those railway employees who had retired long before the liberali sations of pension were introduced	 the pension retirees derived manifold benefits while P.F. retirees ' benefits remained stagnant. The main legal contention of the petitioners is that the Railways had issued twelve notifications giving option to certain Provident Fund retirees after the respective cut off dates	 to opt for the Pension Scheme 353 even after their retirement	 but the same options were not given to other similarly situated Provident Fund retirees beyond the respective cut off dates	 which was discriminato ry and hence violative of article 14 of the Constitution. It is further contended that the notifications specifying cut off dates were arbitrary and un related to the objects sought to be achieved by giving of the option	 and therefore violative of Article 14 and also of the principle laid down in Naka ra 's case. According to counsel	 the principle is that pension retirees could not be divided by such arbitrary cut off dates for the purpose of giving benefits to some and not to other similarly situated employees. It is submitted that by analogy the principle is equally applicable to the Provident Fund retirees as a class. On these grounds	 it is prayed that applying the law laid down in Nakara 's case this Court should simply strike down or read down paragraph 3.1 of the 12th option dated 8.5.1987. That paragraph said that all Contributory Provi dent Fund beneficiaries who were in service on 1.1.86 and who were still in service on the date of the order would be deemed to have come over to the pension scheme. It is sub mitted that once this limiting requirement is removed all the Contributory Provident Fund beneficiaries shall be eligible and will be deemed to have come over to the pension scheme. As the basis for striking or reading down paragraph 3.1 on Nakara 's ratio	 it is urged that all the Railway employees both in service and pensioners constitute one family and must be treated as one class	 and Government 's obligation to look after the retired Railway employees both under the pension scheme and the provident fund scheme being the same	 they could not be treated differently	 and any differential treatment will be discriminatory and violative of Article 14 of the Constitution of India. In Nakara 's case the date arbitrarily chosen was struck down and	 as a re sult	 the revised formula for computing pension was made applicable to all the retired pensioners. On behalf of the respondents it was contended that the options were meant to give the Provident Fund retirees after the specified dates option to switch over to Pension Scheme and that each specified date had nexus with the reason for granting the particular option. It is further submitted that the petitioners ' basic assumption is erroneous inasmuch as Nakara 's case did not hold that whenever there was a liber alisation of pension	 aH other pension retirees and Provi dent Fund retirees must be given the option	 and that the older system of pension or Provident Fund was always insuf ficient. Dismissing the writ petitions and the Special Leave Petition	 this Court	 354 HELD: (1) The doctrine of precedent	 that is	 being bound by a previous decision	 is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it	 especially when they contain "propo sitions wider than the case itself required." [374A B] (2) The enunciation of the reason or principle upon which a question before a court has been decided is alone binding as a precedent. The ratio decidendi is the underly ing principle	 namely	 the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. [382A; 374D] Caledonian Railway Co. vs Walker 's Trustees	 and Quin vs Leathern; 	 (502)	 referred to. (3) Apart from Article 141 of the Constitution the policy of courts is to stand by precedent and not to disturb settled point. When court has once laid down a principle of law as applicable to certain state of facts	 it will adhere to that principle	 and apply it to all future cases where facts are substantially the same. [381F G] (4). In Nakara 's case it was never required to be decid ed that all the retirees formed a class and no further classification was permissible. At the same time it was never held in that case that both the pension retirees and the Provident Fund retirees formed a homogeneous class and that any further classification among them could be viola tive of Article 14. On the other hand	 the Court had clearly observed that it was not dealing with the problem of a "fund". [380H] (5) The Railway Contributory Provident Fund is by defi nition a fund. Besides	 the Government 's obligation towards an employee under Contributory Provident Fund Scheme to give the matching contribution begins as soon as his account is opened and ends with his retirement when his rights qua the Government in respect of the Provident Fund is finally crystalized	 and thereafter no statutory obligation contin ues. Whether there still remained a moral obligation is a different matter. On the other hand	 under the Pension Scheme the Government 's obligation does not begin until the employee retires when only it begins and it continues till the death of the employee. Thus	 on the retirement of an employee Government 's legal obligation under the Provident Fund account ends while under the Pension Scheme it begins. Therefore	 the provident fund retirees could not be treated at par with the living 355 pensioners. There was	 therefore	 no discrimination	 and the question of striking down or reading down clause 3.1 of the 12th option does not arise. [380H; 381A B; 382F] Union of India vs Ghansham Das & Ors.	 S.L.P. No. 5973 of 1988 and Union of India vs Bidhubhushan Malik	 ; 	 distinguished. (6) The rules governing the Provident Fund and its contribution are entirely different from the rules governing pension. It would not	 therefore	 be reasonable to argue that what is applicable to the pension retirees must also equally be applicable to Provident Fund retirees. [381C] (7) An imaginary definition of obligation to include all the Government retirees in a class was not decided and could not form the basis for any classification for the purpose of this case. Nakara cannot	 therefore	 be an authority for this case. [381E] D.S. Nakara vs Union of India	 	 explained. (8) The argument is that the State 's obligation towards pension retirees is the same as that towards Provident Fund retirees. That may be morally so. But that was not the ratio decidendi of Nakara. Legislation has not said so. To say so legally would amount to legislation by enlarging the circum ference of the obligation and converting a moral obligation into a legal obligation. [380C D] (9) The statements made on behalf of the respondents to the effect that cut off dates had nexus with the reason for granting the particular option	 has been substantiated by facts. The cut off dates were not arbitrarily chosen but had nexus with the purpose for which the option was given. [382B D] (10) That the Pension Scheme and the Provident Fund Scheme are structurally different is also the view of the Central Pay Commissions	 and hence ex gratia benefits have been recommended	 which may be suitably increased. [383E]