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CENTRAL ADMINISTRATIVE TRIBUNAL
PRINCIPAL BENCH
OA 1165/2011
with
OA 2165/2011
And
OA 246/2012
New Delhi this the 21st day of April, 2015
Honble Mr. P.K. Basu, Member (A)
Honble Mr. Raj Vir Sharma, Member (J)
OA 1165/2011
1. Pratap Narayan, Executive Director (Retired). FICC, Min. of Fertilizers,
R/o C-47, Friends Colony East New Delhi-110065
AND Others
Versus
Union of India through
1. Secretary,
Ministry of Personnel, P.G. & Pensions,
Deptt. of Pensions & Pensioners Welfare
Lok Nayak Bhawan, New Delhi-110003
2. Secretary,
Deptt. of Expenditure Ministry of Finance,
Central Secretariat North Block, New Delhi-110001 Respondents
(Through Sh.Rajesh Katyal and Sh. D.S. Mahendru, Advocates)
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Judgement of CAT PB New Delhi dated 21st day of April, 2015
OA 1165/2011 with OA 1165/2011 & OA 246/2012
Pratap Narayan & Others – Vs- Union of India
ORDER
Mr. P.K. Basu, Member (A)
1. OA 1165/2011, OA 2165/2011 and OA 247/2012, all deal with the same issue and,
therefore, are being disposed off through this common order.
2. The prayer of the applicants arises from a clarification issued by the Department
of Pension and PensionersWelfare dated 3.10.2008, in specific challenging the following
provision:
“The pension will be reduced pro-rata, where the pensioner has less than the
maximum required service for full pension as per rule 49 of the CCS (Pension)
Rules, 1972 as applicable on 01.01.2006 and in no case it will be less than
Rs.3500/- p.m.”
3. The background of the case is that after the VI Pay Commission submitted its
report, the government issued OM dated 1.09.2008 relating to revision of pension of pre-
2006 pensioners/ family pensioners etc. Para 4.2 of the OM provides as follows:
4.2 The fixation of pension will be subject to the provision that the revised pension, in no
case, shall be lower than fifty percent of the minimum of the pay in the pay band plus the
grade pay corresponding to the pre-revised pay scale from which the pensioner had
retired. In the case of HAG + and above scales, this will be fifty percent of the minimum
of the revised pay scale.
4. Thereafter, the respondents issued the above mentioned OM dated 3.10.2008 in
which the clarification was issued that pension will be reduced pro-rata where the
pensioner had less than the maximum required service for full pension of 33 years. The
Department of Pension and Pensioners Welfare vide resolution dated 29.08.2008
introduced the revised pension structure with effect from 1.01.2006. In this, the
recommendation of the Pay Commission and the decision of the government were
elaborated. The paragraphs relevant to this case are quoted below:
S.
No
Recommendation Decision of
Government
2. Linkage of full pension with 33 years of qualifying service
should be dispensed with. Once an employee renders the
minimum pensionable service of 20 years, pension should be
paid at 50% of the average emoluments received during the past
10 months or the pay last drawn, whichever is more beneficial to
the retiring employee. Simultaneously, the extant benefit of
adding years of qualifying service for purposes of computing
pension/related benefits should be withdrawn as it would no
longer be relevant (5.1.33)
Accepted
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3. The recommendation regarding payment of full pension on
completion of 20 years of qualifying service will take effect only
prospectively for all Government employees other than PBORs
in Defence Forces from the date it is accepted by the
Government (6.5.3.)
Accepted
12. All past pensioners should be allowed fitment benefit equal to
40% of the pension excluding the effect of merger of 50%
dearness allowance/dearness relief as pension (in respect of
pensioners retiring on or after 1/4/2004) and dearness pension
(for other pensioners) respectively. The increase will be allowed
by subsuming the effect of conversion of 50% of dearness
relief/dearness allowance as dearness pension/dearness pay.
Consequently, dearness relief at the rate of 74% on pension
(excluding the effect of merger) has been taken for the purposes
of computing revised pension as on 1/1/2006. This is consistent
with the fitment benefit being allowed in case of the existing
employees. The fixation of pension will be subject to the
provision that the revised pension, in no case, shall be lower
than fifty percent of the sum of the minimum of the pay in the
pay band and the grade pay thereon corresponding to the pre- revised pay scale from which the pensioner had retired. (5.1.47).
Accepted with
the modification
that fixation of
pension shall be
based on a
multiplication
factor of 1.86,
i.e. basic
pension +
Dearness
Pension
(wherever
applicable) +
dearness relief
of 24% as on
1.1.2006, instead
of 1.74.
The respondents further issued an OM dated 19.03.2010, which is reproduced below:
The undersigned is directed to say that orders for revision of pension/family pension of
pre-2006 pensioners were issued vide this Departments OM of even number dated
01.09.2008. Para 4.1 of that OM lays down the manner in which the pension/family
pension of pre-2006 pensioners is to be consolidated w.e.f.1.1.2006. In accordance with
these instructions, a fitment weightage @ 40% of the pre-2006 basic pension/family
pension (excluding the merged dearness relief of 50%) is to be given for revision of the
pension of pre-2006 pensioners/family pensioners.
2. Para 4.2 of the aforesaid OM further provides that fixation of pension will be
subject to the provision that the revised pension, in no case, shall be lower than fifty
percent of the minimum of the pay in the pay band plus the grade pay corresponding to
the pre-revised pay scale from which the pensioner had retired. In the case of HAG+ and
above scales, this will be fifty percent of the minimum of the revised pay scale . It was
clarified in the OM dated 3.10.2008 that the pension calculated at 50% of the minimum of
pay in the pay band plus grade pay would be calculated at the minimum of the pay in the
pay band (irrespective of the pre-revised scale of pay) plus the grade pay corresponding
to the pre-revised pay scale. The pension will be reduced pro-rata, where the pensioner
had less than the maximum required service for full pension as per rule 49 of the CCS
(Pension) Rules, 1972 as applicable before 1.1.2006 and in no case it will be less than
Rs.3500/- p.m. The fixation of family pension will be subject to the provision that the
revised family pension, in no case, shall be lower than thirty percent of the sum of the
minimum of the pay in the pay band and the grade pay thereon corresponding to the pre- revised pay scale from which the pensioner had retired. A Table indicating the revised
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pension based on revised pay bands and grade pay was also annexed with this
Departments OM dated 14.10.2008.
3. A large number of representations/references were received in the Department in
regard to the provisions of para 4.2 of the OM dated 1.9.2008 and it was clarified in this
Departments OM of even number dated 11.2.2009 that the instructions/clarifications
issued in this regard were in consonance with the decision of the Government on the
recommendations of the Sixth Central Pay Commission and no change was required to
be made in this respect.
4. In spite of the above clarifications, representations are still being received from
pre-2006 pensioners (including those who retired from the pre-revised S-29 pay scale i.e.
Rs.18400-22400) for higher revised pension in terms of para 4.2 of the OM dated 1.9.2008.
Representations have also been received demanding a higher fitment weightage to the
pre-2006 pensioners in revision of pension in terms of Para 4.1 of the said OM.
5. These representations have been examined in consultation with Ministry of
Finance. It is reiterated that orders relating to revision of pension of pre-2006
pensioners/family pensioners have been correctly issued as per the recommendations of
the Sixth Central Pay Commission and no change is required to be made in this respect.
6. All references/representations received in this Department on the above issues
stand disposed off accordingly.
5. The above OM basically reiterated the OM dated 3.10.2008 namely that there will
be pro-rata reduction. In all the three OAs, the applicants have challenged the OM dated
3.10.2008 claiming that it is violative of the law laid down by the Honble Supreme Court in
D.S. Nakara Vs. Union of India, 1983 SCC (L&S) 145. The prayer made is that their
pension should be fixed in accordance with para 4.2 quoted above ensuring parity
between pensioners who have retired pre-1.01.2006 and post-1.01.2006. The question
before us is, therefore, whether the date of retirement is a relevant consideration for
eligibility when a revised formula for computation of pension is ushered in and made
effective from a specified date. This was precisely the point which was before the
Honble Supreme Court in D.S. Nakara (supra). The question that was raised by their
Lordships of the Honble Supreme Court in para 2 of the judgment reads as follows:
“2. Do pensioners entitled to receive superannuation or retiring 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 eligibility 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 pension attract Article 14 of
the Constitution and the element of discrimination liable to be declared
unconstitutional as being violative of Article 14? These and the related questions
debated in this group of petitions call for an answer in the backdrop of a welfare
State and bearing in mind that pension is a socio-economic justice measure
providing relief when advancing age gradually but irrevocably impairs capacity to
stand on one's own feet.”
And the Honble Supreme Court answered the questions as follows:
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“(1) Pension is neither a bounty not a matter of grace depending upon the
sweet will of the employer, nor an ex gratia payment. It is a payment for the past
service rendered. It is a social welfare measure rendering socio-economic justice
to those who in the hey-day of their life ceaselessly toiled for the employer on an
assurance that in their old age they would not be left in lurch. Pension as a
retirement benefit is in consonance with and furtherance of the goals of the
Constitution. The most practical raison detre for pension is the inability to
provide for oneself due to old age. It creates a vested right and is governed by the
statutory rules such as the Central Civil Services (Pension) Rules which are
enacted in exercise of power conferred by Article 309 and 148 (5) of the
Constitution.”
xxxx xxxx xxxx
In the present case Article 14 is wholly violated inasmuch as the pension rules
being statutory in character, the amended rules, since the specified date, accord
differential and discriminatory treatment to equals in the matter of commutation of
pension. It would have a traumatic effect on those who retired just before that
date. This division which classified pensioners into two classes is artificial and
arbitrary, is not based on any rational principle and whatever principle, if there be
any, has not only no nexus to the objects sought to be achieved by liberalizing
the pension rules, but is counter-productive and runs counter to the whole gamut
of the pension scheme. Further, there is not a single acceptable or persuasive
reason for this division. Therefore, the classification does not stand the test of
Article 14.
xxxx xxxx xxxx
Date of retirement cannot form a valid criterion for classification, for if that be the
criterion those who retire at the end of every month shall form a class by
themselves. This is too microscopic a classification to be upheld for any valid
purpose.
xxxx xxxx xxxx
The basic principle which informs both Articles 14 and 16 is equality and
inhibition against discrimination. Article 14 strikes at arbitrariness because any
action that is arbitrary must necessarily involve negation of equality. Article 14
forbids class legislation but permits reasonable classification for the purpose of
legislation which classification must satisfy the twin tests of classification being
founded on an intelligible differentia which distinguishes persons or things that
are grouped together from those that are left out of the group and that differentia
must have a rational nexus to the object sought to be achieved by the statute in
question.
6. Learned counsel for the applicants also cited V. Kasturi Vs. Managing Director,
State Bank of India, Bombay and another, (1998) 8 SCC 30 in which the Honble Supreme
Court held as follows:
“If the person retiring is eligible for pension at the time of his retirement and if he
survives till the time of subsequent amendment of the relevant pension scheme,
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he would become eligible to get enhanced pension or would become eligible to
get more pension as per the new formula of computation of pension. He would be
entitled to get the benefit of the amended pension provision from the date of such
order as he would be a member of the very same class of pensioners when the
additional benefit is being conferred on all of them. In such a situation, the
additional benefit available to the same class of pensioners cannot be denied to
him on the ground that he had retired prior to the date on which the aforesaid
additional benefit was conferred.”
Similarly, the learned counsel for the applicants also relied on the judgment of the
Honble Supreme Court in T.S. Thiruvengadam Vs. Secretary to Government of India,
Ministry of Finance, Department of Expenditure, New Delhi and others, (1993) 2 SCC 174
in which it was held as follows:
“The object of bringing into existence the revised terms and conditions in the
memorandum dated June 16, 1967 was to protect the pensionary benefits which
the Central Government servants had earned before their absorption into the
public undertakings. Restricting the applicability of the revised memorandum only
to those who are absorbed after the coming into force of the said memorandum,
would be defeating the very object and purpose of the revised memorandum and
contrary to fair play and justice.”
There is no substance in the contention that the revised benefits being new it could only
be prospective in operation and cannot be extended to employees who were absorbed
earlier. The memorandum dated June 16, 1967 is prospective which only means that the
benefits therein can be claimed only after June 16, 1967. The memorandum, however,
takes into consideration the past event that is the period of service under the Central
Government for the purposes of giving pro rata pension. Whoever has rendered
pensionable service prior to coming into force of the memorandum would be entitled to
claim the benefits under the said memorandum. Restricting the benefits only to those
who were absorbed in public undertakings after June 16, 1967 is arbitrary and hit by
Article 14 & 16. The
appellant was permitted to be absorbed in the Central Government public undertaking in
public interest. The appellant, as such, shall be deemed to have retired from Government
service from the date of his absorption and is eligible to receive the retirement benefits.
Though the retirement benefits envisaged under Rule 37 are to be determined in
accordance with the Government orders but the plain language of the rule does not
permit any discrimination while granting the retirement benefits.
Appeal allowed.
7. This Tribunal (full Bench) had also examined a similar issue in OA 937/2010
decided along with OA 2101/2010. In those cases, the prayer made was to remove
discrimination between pre-2006 and post-2006 retirees as regards their pension, who
were in the pay scale S-30 i.e. Rs.22400-525-24500. The matter was examined in depth
considering the judgments of the Honble Supreme Court in D.S. Nakara (supra), Union of
India Vs. S.P.S. Vains, (2008) 9 SCC 125, Union of India Vs. P.N. Menon, JT 1994 (3) SC
26, State of Punjab and others Vs. Amar Nath Goyal and others, 2005 SCC (L&S) 910,
Union of India Vs. S.R. Dhingra and others, (2008) 2 SCC 229, Government of Andhra
Pradesh and ors. Vs. N. Subbarayudu and others, 2008 (4) SLR 136 and Bank of India and
another Vs. K. Mohandas and others, 2009 (5) SCC 313. The OAs were allowed vide order
dated 20.11.2014 and the Tribunal gave the following directions:
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“We direct the respondents to consider the revised pay of the applicants
corresponding to the pay at which the concerned pensioner had in fact retired,
instead of considering the minimum of the said pay scale, thereby determining
pension/ family pension to pre-2006 retirees.
8. The learned counsel for the respondents has filed detailed reply primarily
explaining how pension of pre-2006 and post-2006 retirees has to be fixed. It is reiterated
that the government had accepted the recommendation regarding payment of full
pension on completion of twenty yearsservice, prospectively. Therefore, this cannot be
given retrospective effect now. It is further stated that in the order dated 6.03.2012
(Annexure A-7), disposing of the OAs No. 937/2010 and 2101/2010, this Tribunal (Full
Bench) made the following observations/directions in regard to the prayer of the
applicants seeking complete parity with post-2006 retirees:-
One of the reliefs sought for by the applicants in those OAs is that pre-2006 pensioners
may be allowed a total parity with post 1.1.2006 pensioners by notionally revising their
pay as on 1.1.2006 and then fixing pension at 50% of that notional pay.
At the outset, it may be stated here that the issue regarding admissibility of
pension/family pension to the pre 1.1.2006 retiree officers belonging to S-29 scale and
also whether the 2006 pensioners are entitled to the pension/family pension at par with
post 2006 retiree officers has been considered and decided by the Full Bench of the
Tribunal in Central Government SAG (S-29) Pensioners Association and another Vs
Union of India and another (OA 655/2010 with connected matters) decided on 1.11.2011
after taking into consideration the decisions of Apex Court in D.S. Nakara Vs. S.P.S.
Vains (2008)9 SCC 125) and the said relief has been rejected. The Full Bench of this
Tribunal in the aforesaid judgment has held that pre-2006 retirees cannot claim benefit at
par with post-2006 retirees, who are governed by the separate set of scheme and also
that the judgment in the case of S.P.S.Vains (supra) was rendered in the different facts
and circumstances of the case and relates to the Army personnel and based on the
premise of one rank one pension. However, regarding admissibility of pension based on
modified parity, as recommended by the Pay Commission and accepted by resolution
dated 29.8.2008, direction was given to the respondents to re-fix the pension and pay the
arrears to all pre-2006 retirees belonging to S-29 scale of pay, within a period of three
months from the date of receipt of a copy of the order. Thus, the aforesaid issue stands
decided of in the light of the reasoning given by the Full Bench of this Tribunal for parity
of reasoning given therein.
9. The respondents further argue that in its order dated 1.11.2011 in the OA No.
655/2010 referred to in the aforesaid order dated 6.3.2012 in the OAs No.937/2010 and
2101/2010, this Tribunal (full bench) decided that the challenge made by the applicants
based upon the judgment in D.S. Nakara that pre-2006 retirees should be extended the
same pensionary benefits as that of post-2006 retirees cannot be accepted. It is stated
that in para 9 of the judgment, this Tribunal also rejected the prayer for grant of full
pension on completion of 20 years of qualifying service at par with post-2006 retirees
and observed that the pre-2006 retirees cannot claim benefit at par with post-2006
retirees, who are governed by the separate set of scheme.
10. It is further added on behalf of the respondents that the applicants in the above
mentioned OAs No.937/2010 and 2101/2010 filed writ petitions being WP No. 4572/2012
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and WP 7342/2012 in the High Court of Delhi. Honble High Court of Delhi in its order
dated 19.8.2013 (Annexure A-9) passed the following order:
8. Keeping in view the aforesaid facts, none of which are disputed by learned counsel for
the respondents, with consent of learned counsel for the parties we set aside the
impugned decision(s) dated March 06,2012 and simultaneously we restore OA
No.937/2010 and OA No.2101/2010 for fresh adjudication on merits by the Tribunal on the
claim of the petitioners for full parity. The decision shall be rendered after giving full
opportunity of hearing to the petitioners and the decision dated November 01, 2011
passed by the Tribunal in the case of S-29 scale retirees shall not be treated as binding
upon it by the Tribunal for the reasons on the subject of full parity the said decision was
pronounced notwithstanding said retirees giving up the claim for full parity.
Thus Honble High Court remanded back the OA No.937/2010 and OA No.No.2101/2010 for
fresh adjudication on merits by this Honble Tribunal on the claim of the petitioners for
full parity. As stated earlier, these OAs were accordingly heard by this Tribunal (Full
Bench) and order dated 20.11.2014 passed.
11. We have gone through various judgments of the Honble Supreme Court in various
cases and also this Tribunals order dated 20.11.2014 in OA 937/2010 with OA 2101/2010.
The law has by now been well settled by the Honble Supreme Court that the date of
retirement cannot form a valid criterion for classification. It is held by their Lordships
that any clarification has to be founded on an intelligible differentia which distinguishes
persons or things that are grouped together from those that are left out of the group and
that differentia must have a rational nexus to the object sought to be achieved by the
statute in question.
13. In view of the judgments of the Honble Supreme Court
in D.S. Nakara (supra), V. Kasturi (supra), T.S. Thiruvengadam (supra) and order of the
Full Bench of the Tribunal in OA 937/2010 with OA 2101/2010 dated 20.11.2014, we are of
the opinion that the prayer in the OAs is fully justified. We, therefore, quash and set
aside the impugned orders dated 3.10.2008 and 19.03.2010 being violative of law laid
down by the Honble Supreme Court and direct the respondents that the qualifying
service for earning full pension will be treated as twenty years also for those who retired
from the Central Government service on or before 31.12.2005 and were alive on that day.
The respondents are also directed to modify/amend all relevant government orders/
letters/ notifications in accordance with the above decision. It is made clear that this
parity of pension between pre and post-1.01.2006 pensioners (on the question of
eligibility of minimum pensionable service of twenty years) would apply both as regards
pension and family pension. The respondents are granted three months time from the
date of receipt of this order for implementation of directions contained in this order.
(Raj Vir Sharma) ( P.K. Basu)
Member (J) Member (A)
