CENTRAL ADMINISTRATIVE TRIBUNAL PRINCIPAL BENCH
OA 1165/2011 with
OA 2165/2011
And
OA 246/2012
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 1165/20111. 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)
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 |
| 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 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 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 Hon‘ble Supreme Court in D.S. Nakara
(supra). The question that was raised by their Lordships of the Hon ‘ble
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 Hon ‘ble Supreme Court answered the questions as follows:
“(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,
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:
“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 years service, 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
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) Member (J)
( P.K. Basu) Member (A)
Narendra Modi 
