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Himachal Pradesh High Court · body

2009 DIGILAW 35 (HP)

Himachal Road Transport v. H. P. Road Corporation

2009-01-08

DEV DARSHAN SUD, RAJIV SHARMA

body2009
JUDGMENT (Rajiv Sharma, J.) - The present petition is directed against the order dated 19.6.2001 of the learned Himachal Pradesh Administrative Tribunal rendered in OA No. (D) 237/1996. 2.Brief facts necessary for the adjudication of this petition are that the members of the petitioner’s union (hereinafter referred to as the petitioners for convenience sake) retired from the service of the respondent-Corporation prior to 5.6.1995. The respondent-Corporation formulated a scheme called “Himachal Road Transport Corporation Employees Pension scheme, 1995” (hereinafter referred to as `the scheme’ for convenience sake). The scheme was implemented with effect from 5.6.1995. The petitioners were left out from the ambit of the scheme. The petitioners preferred an original application before the Himachal Pradesh Administrative Tribunal. It was primarily averred in the original application that the cut off date i.e. 5.6.1995 has no reasonable nexus with the objective sought to be achieved and the respondents could not divide homogeneous class. It was further averred that though the scheme had been notified on 6.10.1995, but in fact it has been implemented with effect from 5.6.1995 respectively. The principal stand of the respondents before the learned Tribunal was that the date prescribed i.e. 5.6.1995 is constitutional and has a reasonable nexus with the objective sought to be achieved. The learned Tribunal dismissed the original application on 19.6.2001. 3.Mr. Onkar Jairath has strenuously argued that the cut-off date i.e. 5.6.1995 is arbitrary thus violative of Articles 14 and 16 of the Constitution of India. He also contended that all the employees of the Corporation constitute a homogeneous class and there cannot be classification within classification the manner in which the scheme promulgated has to be applied. He lastly contended that the respondents have given retrospective effect to the scheme though promulgated on 67.10.1995 with effect from 5.6.1995, however, the petitioners have been left out thus discriminated against. 4.Mr. Anshul Bansal, Additional Advocate General and Mr. Ashok Sharma, Advocate has supported the order of the learned Tribunal dated 19.6.2001. 5.We have heard the learned Counsel for the parties and perused the record carefully. 6.What emerges from the pleadings of the parties is that the petitioners were initially employed by the Mandi-Kullu Road Transport Corporation. The respondent-State issued office order dated 24.9.1974 whereby the Mandi-Kullu Road Transport Corporation was re-named as Himachal Road Transport Corporation. 5.We have heard the learned Counsel for the parties and perused the record carefully. 6.What emerges from the pleadings of the parties is that the petitioners were initially employed by the Mandi-Kullu Road Transport Corporation. The respondent-State issued office order dated 24.9.1974 whereby the Mandi-Kullu Road Transport Corporation was re-named as Himachal Road Transport Corporation. The State Government vide notification dated 1.10.1974 has taken over the services of the petitioners with effect from 2.10.1974. The petitioners were governed by the contributory provident fund scheme after their services were taken over by the Corporation with effect from 2.10.1974. The State Government has notified the scheme on 6.10.1995, however, the same was made applicable with effect from 5.6.1995. 7.Mr. Onkar Jairath has submitted that all the employees whether retired or serving in the Corporation constitute a homogeneous class. In other words, according to him, the cut-off date i.e. 5.6.1995 is arbitrary. He has strongly relied upon D.S. Nakara and others v. Union of India, AIR 1983 SC 130. Their Lordships of the Hon’ble Supreme Court have held that classification in revised pension formula between pensioners on the basis of the date of retirement specified in memoranda was arbitrary and violative of Article 14 of the Constitution of India. The classification made by the executive was held to be wholly arbitrary since the Court did not find a single acceptable or persuasive reason for this division. Their Lordships reiterated the established principle that classification has to be based on some rational principle and that must have nexus to the objects sought to be achieved. Their Lordships have also repelled the contention raised by the Union of India that the scheme was being made retroactive. The Court held : “...........Petitioners accordingly contend that this Court may consider the raison d’etre for payment of pension. If the pension is paid for past satisfactory service rendered, and to avoid destitution in old age as well as a social welfare or socio-economic justice measure, the differential treatment for those retiring prior to a certain date and those retiring subsequently, the choice of the date being wholly arbitrary, would be according differential treatment to pensioners who form a class irrespective of the date of retirement and, therefore, would be violative of Article 14. It was also contended that classification based on fortuitous circumstance of retirement before or subsequent to a date, fixing of which is not shown to be related to any rational principle, would be equally violative of Article 14...... ..........The Court realistically appraising, the social stratification and economic inequality and keeping in view the guidelines on which the State action must move as constitutionally laid down in Part IV of the Constitution, evolved the doctrine of classification. The doctrine was evolved to sustain a legislation or State action designed to help weaker sections of the society or some such segments of the society in need of succour. Legislative and executive action may accordingly be sustained if it satisfies the twin tests of reasonable classification and the rational principle correlated to the object sought to be achieved. The State, therefore, would have to affirmatively satisfy the Court that the twin tests have been satisfied. It can only be satisfied if the State establishes not only the rational principle on which classification is founded but correlates it to the objects sought to be achieved. This approach is noticed in Ramana Dayaram Shetty v. International Airport Authority of India, 1979(3) SCR 1014 at p. 1034 : AIR 1979 SC 1628 at pp. 1637-38) when at pages 1034, the Court observed that a discriminatory action of the Government is liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. ...........What is a pension? What are the goals of pension? What public interest or purpose, if any, it seeks to service? If it does seek to serve some public purpose, is it thwarted by such artificial division of retirement pre and post a certain date? We need seek answers to these and incidental questions so as to render just justice between parties to this petition. ............The challenge is not to the validity of the pension liberalisation scheme. The scheme is wholly acceptable to the petitioners, nay they are ardent supporters of it, nay further they seek the benefit of it. The petitioners challenge only that part of the scheme by which its benefits are admissible to those who retired from service after a certain date. ............The challenge is not to the validity of the pension liberalisation scheme. The scheme is wholly acceptable to the petitioners, nay they are ardent supporters of it, nay further they seek the benefit of it. The petitioners challenge only that part of the scheme by which its benefits are admissible to those who retired from service after a certain date. In other words, they challenge that the scheme must be uniformly enforced with regard to all pensioners for the purpose of computation of pension irrespective of the date when the Government servant retired subject to the only condition that he was governed by the 1972 Rules. No doubt, the benefit of the scheme will be available from the specified date, irrespective of the fact when the concerned Government servant actually retired from service....... .......If it appears to be undisputable, as it does to us that the pensioners for the purpose of pension benefits form a class, would its upward revision permit a homogeneous class to be divided by arbitrary fixing an eligibility criteria unrelated to purpose of revision, and would such classification be founded on some rational principle ? The classification has to be based, as is well settled, on some rational principle and the rational principle must have nexus to the objects to be achieved. We have set out the objects underlying the payment of pension. If the State considered it necessary to liberalise the pension scheme, we find no rational principle behind it for granting these benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior to that date. If the liberalisation was considered necessary for augmenting social security in old age to Government servants then those who retired earlier cannot be worse off then those who retire later. 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....... ........Further the classification is wholly arbitrary because we do not find a single acceptable or persuasive reason for this divison. This arbitrary action violated the guarantee of Article 14......... .....By our approach, are we making the Scheme retroactive? The answer is emphatically in the negative. Take a Government servant who retired on April 1, 1979. ........Further the classification is wholly arbitrary because we do not find a single acceptable or persuasive reason for this divison. This arbitrary action violated the guarantee of Article 14......... .....By our approach, are we making the Scheme retroactive? The answer is emphatically in the negative. Take a Government servant who retired on April 1, 1979. He would be governed by the liberalised pension scheme. By that time he had put in qualifying service of 35 years. His height of service is a relevant factor for computation of pension. Has the Government made it retroactive, 35 years backward compared to the case of a Government servant who retired on 30th March, 1979? Concept of qualifying service takes note of length of service, and pension quantum is correlated to qualifying service. Is it retroactive for 35 years for one and not retroactive for a person who retired two days earlier. It must be remembered that pension is relatable to qualifying service. It has correlation to the average emoluments and the length of service. Any liberalisation would pro tanto be retroactive in the narrow sense of the term. Otherwise it is always prospective. A statute is not properly called a retroactive statue because a part of the requisites for its action is drawn from a time antecedent to its passing. (See Craies on Statute Law, 6th Edn., p. 387). Assuming the Government had not prescribed the specified date and thereby provided that those retiring pre and post the specified date would all the governed by the liberalised pension scheme. Undoubtedly, it would be both prospective and retroactive. Only the pension will have to be recomputed in the light of the formula enacted in the liberalized pension scheme and effective from the date the revised scheme comes into force. And beware that it is not a new scheme, it is only a revision of existing scheme. It is not a new retrial benefit. It is an upward revision of an existing benefit. If it was a wholly new concept, a new retiral benefit, one could have appreciated an argument that those who had already retired could not expect it. It could have been urged that it is an incentive to attract the fresh recruits. Pension is a reward for past service. It is an upward revision of an existing benefit. If it was a wholly new concept, a new retiral benefit, one could have appreciated an argument that those who had already retired could not expect it. It could have been urged that it is an incentive to attract the fresh recruits. Pension is a reward for past service. It is undoubtedly a condition of service but not an incentive to attract new entrants because if it was to be available to new entrants only, it would be prospective at such distance of thirty-five years since its introduction. But it covers all those in service who entered thirty-five years back. Pension is thus not an incentive but a reward for past service. And a revision of an existing benefit stands on a different footing than a new retiral benefit. And even in case of new retiral benefit of gratuity under the Payment of Gratuity Act, 1972 past service was taken into consideration. Recall at this stage the method adopted when pay-scales are revised. Reviewed pay-scales are introduced from a certain date. All existing employees are brought on to the revised scales by adopting a theory of figments and increments for past service. In other words, benefit of revised scale is not limited to those who enter service subsequent to the date fixed for introducing revised scales but the benefit is extended to all those in service prior to that date. This is just and fair. Now if pension as we view it, is some kind of retirement wages for past service, can it be denied to those who retired earlier, revised retirement benefits being available to future retirees only. Therefore, there is no substance in the contention that the Court by its approach would be making the scheme retroactive, became it is implicit in theory of wages.” 8.In Union of India and another v. SPS Vains (Retd.) and others, 2008(12) Scale 360, the Court considered the position in D.S. Nakara’s (supra) and held that pensioners cannot be divided on the basis of date of retirement. The Court ruled : “.............The question regarding creation of different classes within the same cadre on the basis of the doctrine of intelligible differential having nexus with the object to be achieved, has fallen for consideration at various intervals for the High Courts as well as this Court, over the years. The Court ruled : “.............The question regarding creation of different classes within the same cadre on the basis of the doctrine of intelligible differential having nexus with the object to be achieved, has fallen for consideration at various intervals for the High Courts as well as this Court, over the years. The said question was taken up by a Constitution Bench in the case of D.S. Nakara (supra) where in no uncertain terms throughout the judgment it has been repeatedly observed that the date of retirement of an employee cannot form a valid criterion for classification for it that is the criterion those who retired by the end of the month will form a class by themselves. In the context of that case, which is similar to that of the instant case, it was held that Article 14 of the Constitution had been wholly violated, inasmuch as, the Pension Rules being statutory in character, the amended Rules, specifying a cut-off date resulted in differential and discriminatory treatment of equals in the matter of commutation of pension. It was further observed that it would have a traumatic effect on those who retired just before that date. The division which classified pensioners into two classes was held to be artificial and arbitrary and not based on any rational principle and whatever principle, if there was any, had not only no nexus to the objects sought to be achieved by amending the Pension Rules, but was counter productive and ran counter to the very object of the pension scheme. It was ultimately held that the classification did not satisfy the test of Article 14 of the Constitution. However, before we give such directions we must also observe that the submissions advanced on behalf of the Union of India cannot be accepted in view of the decision in D.S. Nakara’s case (supra). The object sought to be achieved was not to create a class within a class, but to ensure that the benefits of pension were made available to all persons of the same class equally. To hold otherwise would cause violence to the provisions of Article 14 of the Constitution. The object sought to be achieved was not to create a class within a class, but to ensure that the benefits of pension were made available to all persons of the same class equally. To hold otherwise would cause violence to the provisions of Article 14 of the Constitution. It could not also have been the intention of the authorities to equate the pension payable to offices of two different ranks by resorting to the step up principle envisaged in the Fundamental Rules in a manner where the other officers belonging to the same cadre would be receiving a higher pension.” 9.What emerges from the ratio of these two judgments is that pension scheme would receive liberal construction and the courts may not so interpret the scheme as to render it otiose. 10.The scheme in the present case was notified on 6.10.1995 and has been implemented with effect from 5.6.1995. The only reason for implementing the scheme with effect from 5.6.1995 is that the Cabinet has approved the same on 5.6.1995. The persons, who have retired between 5.6.1995 to 6.10.1995 were also covered under the scheme. It will be apt at this stage to take note of salient features of the scheme dated 6.10.1995. Paras 2, 3 and 5 of the same read thus : “2. Applicability. Save as otherwise provided the pension scheme shall apply to “Himachal Road Transport Corporation” employees including officers, appointed substantively on regular basis or permanently absorbed in Corporation service and posts in connection with the affairs of the Corporation which are borne on pensionable basis but shall not apply to :- (i) Persons employed on contract basis. (ii) Daily waged workers. (iii) Casual workers and Civil Staff workers on muster-roll. (iv) Part time workers. (v) Persons entitled to the benefit of GPF i.e. erstwhile Himachal Road Transport Employees and Officers. (vi) Persons taken on deputation from State Government. (vii) “Excluded employees” who elects to continue under the existing C.P.F. scheme. 3. Definitions : In this order, unless the context otherwise requires :- (a) “Corporation” means, Himachal Road Transport Corporation constituted under Section 3 of the Road Transport Act, 1950. (b) “Financial Advisor and Chief Accounts Officers” means, an officer of the Corporation who is entrusted with the functions of maintaining accounts of pension of the Corporation. 3. Definitions : In this order, unless the context otherwise requires :- (a) “Corporation” means, Himachal Road Transport Corporation constituted under Section 3 of the Road Transport Act, 1950. (b) “Financial Advisor and Chief Accounts Officers” means, an officer of the Corporation who is entrusted with the functions of maintaining accounts of pension of the Corporation. (c) “Employees” means, any person who is in the regular service of the “Corporation” and drawing pay in regular pay scale including persons absorbed in the Corporation permanently but does not include persons on deputation, daily wages, civil staff workers, work charged or casual/contract and part-time employees. (d) “Existing employees” means, an employee who is in the service of the Corporation as on 5.6.1995. (e) “Excluded employees” means, an existing employee who is member of the EPF/GPF Scheme and elects to continue to be the member of the said scheme. (f) “pension disbursing authority” means, head of office and Drawing and Disbursing Officer of the “Corporation” authorized to do so or any other officers who may be authorized to the purpose. (g) “Pension” includes family pension also. (h) “Family Pension” means, “Family Pension, 1964” admissible under rule 54 of the C.C.S. (Pension) Rules, 1972 and shall be applicable from 5th June, 1995 itself. 5. Eligibility to elect Himachal Road Transport Corporation Pension Scheme. The existing employees who opt the pension scheme shall forfeit their claim to employees’ share including interest thereon to the Himachal Road Transport Corporation as well as other claim for EPF/GPF scheme in respect of all past accumulations. The amount of their provident fund (excluding employer’s share and interest thereon shall be transferred to F.P.F. account to be allotted afresh to each subscriber i.e. “Exciting employees” (who opt for pension scheme).” 11.Only those set of employees have been excluded from the ambit of the scheme who elected to continue under the existing CPF scheme. The scheme has been promulgated to advance socio-economic justice. As laid down by their Lordships of the Hon’ble Supreme Court in the cases cited supra, the pension is neither a bounty nor a grace depending on the sweet will of the employer. The pension is not ex gratia payment, but it is a payment of the past services rendered by an employee. As laid down by their Lordships of the Hon’ble Supreme Court in the cases cited supra, the pension is neither a bounty nor a grace depending on the sweet will of the employer. The pension is not ex gratia payment, but it is a payment of the past services rendered by an employee. 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. 12.It is not disputed by the parties that there ought to be a ‘cut-off’ date for introducing a statute or a scheme like the preset one. However, what has to be seen is whether the classification based on the cut-off date has some rational principles and the rational principles have nexus to the objects sought to be achieved. The object of the present scheme is to improve the working conditions of the employees of the Corporation. The other object of the scheme is as noticed above in furtherance of socio-economic justice. The respondent-Corporation has not pleaded in its reply before the learned Tribunal that why the cut-off date i.e. 5.6.1995 has been picked up except that it was approved by the Cabinet on that date. The entire work force of the Corporation constitutes a homogeneous class. They could not be discriminated against by the employer by taking up a date i.e. 5.6.1995 without assigning any reason. It is not a case of the Corporation even in the pleading that it was due to financial exigency. There is no acceptable or persuasive reason for the division of a homogeneously constituted class of retirees on the basis of the cut-off date. 13.In the present case, the petitioners had been working in Mandi-Kull Transport Corporation. Their services were taken over with effect 2.10.1974. The petitioners as well as other employees of the Corporation were covered under the CPF Scheme. No doubt, they have received their GPF amount on their retirement. The petitioners who were the employees of the Himachal Road Transport Corporation could not be as a class left out from the operation of the scheme. The petitioners as well as other employees of the Corporation were covered under the CPF Scheme. No doubt, they have received their GPF amount on their retirement. The petitioners who were the employees of the Himachal Road Transport Corporation could not be as a class left out from the operation of the scheme. 14.In State Bank of India v. L. Kannaiah and others, 2003(10) SCC 499 while interpreting rules 7 and 8 of the State Bank of India Employees’ Pension Fund Rules the Court ruled : “......The reason for prescribing the maximum age limit of 35 or 38, as the case may be, for the purpose of induction into pension fund appears to be that the employee would be able to render minimum service of 20 years as contemplated by Rule 22 of the Pension Fund Rules. However, there does not appear to be any rational be or discernible basis for fixing the cut-off date as 1.1.1965, notwithstanding their earlier confirmation in Bank service. True, a new benefit has been conferred on the ex-servicemen and therefore a cut-off date could be fixed for extending this new benefit, without offending the ratio of the decision in D.S. Nakara and others v. Union of India, AIR 1983 SC 130; but, there could be no arbitrariness or irrationality in fixing such date. Minimum qualifying service being the essential consideration, even according to the Bank, there is no reason why the ex-servicemen like the respondents, who from the date of their confirmation had put in more than twenty years of service, even taking the retirement age as 58, should be excluded. No reason is forthcoming in the counter-affidavit filed by the Bank for choosing the said date. When it is decided to extend the pensionary benefits to ex-servicemen drawing pension, the denial of the benefit to some of the serving employees should be based on rational and ineligible criterion. In substance, that is the view taken by the High Court and we see no reason to differ with that view. 15.Their Lordships have not sustained the Observations of the High Court “that the petitioners were not entitled to pension as they were not employees of the State Bank of India originally as they have joined the service prior to 1.7.1955.” 16.No reason has been assigned by the respondent/employer for choosing 5.6.1995 as the cut-off date nor such reason/rationale is discernible from the pleadings. Reasons to deny the benefit of the scheme to the petitioners and similarly situate persons are required to be based on rationale and cogent criterion. The petitioners and other employees of the Corporation were governed under CPF scheme and they have been deprived of the benefit of ‘the scheme’ only on the basis of arbitrary cut-off date i.e. 5.6.1995. 17.The Tribunal has not correctly understood and applied the ratio of D.S. Nakara’s case (supra). It was necessary for the learned Tribunal to adjudicate on the rationality of the cut off date by calling upon the employer to substantiate why 5.6.1995 has been picked up as a cut-off date for the enforcement of the scheme. 18.In R.L. Marwaha v. Union of India and others, 1987(4) SCC 31 the Apex Court has held that fixing of a date for the grant of benefit must have nexus with object sought to be achieved. Their Lordships have held as under :- “There is no dispute that the ICAR though it is a body registered under the Societies Registration Act, 1960, is a body which is sponsored, financed and controlled by the Central Government. There has been a continuous mobility of personnel between Central Government departments and autonomous bodies, like the ICAR both ways and the Government thought, and rightly so, that it would not be just to deprive an employee who is later on absorbed in the service of the autonomous body, like the ICAR the benefit of the service rendered by him earlier in the Central Government for purposes of computation of pension and similarly the benefit of service rendered by an employee who is later on absorbed in the Central Government service the benefit of the service rendered by him earlier in the autonomous body for purposes of computation of pension. If that was the object of issuing the notification then the benefit of such notification should be extended to all pensioners who had rendered service earlier in the Central Government or in the autonomous body as the case may be with effect from the date of the said Government order. Now let us take the case of a person who had rendered service under the Central Government between January 1, 1953 and July 1, 1955 but who has retired from service of the ICAR in 1985. Now let us take the case of a person who had rendered service under the Central Government between January 1, 1953 and July 1, 1955 but who has retired from service of the ICAR in 1985. There is no dispute that such a person gets the benefit of the service put in by him under the Central Government for purposes of his pension. But another pensioner who has put in service under the Central Government during the same period will not get similar concession if he has retired prior to the date of the Government order if paragraph 7 of that order is applied to him. The result will be that whereas in the first case there is pensionary liability of the Central Government in the second case it does not exist although the period of service under the Central Government is the same. This discrimination arises on account of the Government order. There is no justification for denying the benefit of the Government order to those who had retired prior to the date on which the Government order was issued. The respondents have not furnished any acceptable reason in support of their case, except saying that the petitioner was not entitled to the benefit of the Government order because the order says that it would not be applicable to those who had retired prior to the date on which it was issued. In the absence of any explanation which is worthy of consideration it has to be held that the classification of the pensioners who were working in the Government/autonomous bodies into two classes merely on the basis of the date of retirement as unconstitutional as it bears no nexus to the object to be achieved by the order. We do not also find much substance in the plea that this concession being a new one it can only be prospective in operation and cannot be extended to employees who have already retired. It is true that it is prospective in operation in the sense that the extra benefit can be claimed only after August 29, 1984 that is the date of issue of the Government order. It is true that it is prospective in operation in the sense that the extra benefit can be claimed only after August 29, 1984 that is the date of issue of the Government order. But it certainly looks backward and takes into consideration the past event that is the period of service under the Central Government for purposes of computing qualifying service because such additional service can only be the service rendered prior to the date of issue of the Government order. By doing so the Government order will not become an order having retrospective effect. It still continues to be perspective in operation. Whoever has rendered service during any past period would be entitled to claim the additional financial benefit of that service if he is alive on August 29, 1984 under the Government order but with effect from August 29, 1984.” 19.Similarly in Union of India and another v. Deoki Nandan Aggarwal, 1992 Suppl.(1) SCC 323 the Court ruled that a person retiring prior to the cut-off date could not be denied the benefit of liberalized pension scheme. Their Lordships have held as under :- “At this stage itself, we may note that this Amending Act 38 of 1986 provided that the amended liberalised pension scheme would apply only to a Judge “who has retired on or after the commencement of the High Court and Supreme Court Judges (Conditions of Service) Amendment Act, 1986.” A similar provision which made the amendment by Act 35 of 1976 applicable only to those judges who have retired on or after October 1, 1974 was held ultra vires and struck down in the two decisions of this Court above referred to and it was held that the benefit of the amendment was available to all the retired Judges irrespective of the date of retirement but subject to the condition that the enhanced pension was payable only with effect from October 1, 1974. That was also the ratio of the decision of the Constitution Bench of this Court in D.S. Nakara and others v. Union of India, 1983(2) SCR 165 : AIR 1983 SC 130. On the same reasonings and logic we have to hold that Amending Act 38 of 1986 could not restrict the applicability of the amended provision to only those who have retired on or after the commencement of the Amending Act. On the same reasonings and logic we have to hold that Amending Act 38 of 1986 could not restrict the applicability of the amended provision to only those who have retired on or after the commencement of the Amending Act. The resultant position would be that the provisions of pension in Part I of First Schedule as amended by Act 38 of 1986 would be applicable to all the Judges irrespective of the dates of retirement and they would be entitled to be paid pension at the rates provided therein with effect from November 1, 1986.” 20.In State of West Bengal and others v. Ratan Behari Dey and others, 1993(4) SCC 62 the Court ruled that the State can specify a date with effect from which the Regulations framed, or amended, as the case may be, shall come into force and only condition is that in such cases the State cannot pick a date out of its hat. It has to prescribe the date in a reasonable manner, having regard to all the relevant facts and circumstances. Their Lordships have held as under :- “.........A date can be specified both prospectively as well as retrospectively. The only question is whether the prescription of the date is unreasonable or discriminatory...” 21.In the present case, the respondents have not placed any material on record what were the circumstances which have led to prescribing 5.6.1995 as cut-off date or any reason justifying such a date. The choice of date cannot be left to ipse dixit of the State. The same cannot be fixed in arbitrary and capricious manner without any basis. 22.Their Lordships of the Hon’ble Supreme Court have further held in M.C. Dhingra v. Union of India and others, 1996(7) SCC 564 that having grouped all the similarly circumstances employees, fixing the cut-off date and giving benefit to those who retired thereafter is obviously arbitrary. Their Lordships have held as under :- “It is seen that though the appellant had retired on February 1, 1973, since the question of tagging the previous serviced rendered in the State Government on temporary basis and the similar cases are pending, the Government had taken a decision on March 31, 1982 to tag the previous service for computation of the pension. Learned Counsel appearing for the respondents contended that clause 4 of the above said Circular is one of the conditions which prescribes that it would be applicable to the Government servants who retired from that date, namely, March, 31, 1982. since the appellant had retired on February 1, 1973, he is not eligible. We find no force in the contention. All the persons who rendered temporary service prior to their joining the Government of India Service have been given the benefit of fixation of the pension payable by tagging the temporary service. The cut-off date is arbitrary violating Article 14 of the Constitution of India. Having grouped all the similar circumstanced employees, fixing the cut-off date and giving benefit to those who retired thereafter is obviously arbitrary. In similar circumstances, following the ratio in D.S. Nakara and others v. Union of India, 1983(1) SCR 305 : AIR 1983 SC 130, this Court held in the case of R.L. Marwah v. Union of India, 1987(3) SCR 928, that such a restriction is arbitrary violating Article 14. On the facts and circumstances, we find that the restriction imposed in clause 4 of the Circular is violative of Article 14. It is, therefore, unconstitutional. However, the appellant will be entitled to the pro rata pension from March, 1982.” 23.In Subrata Sen and others v. Union of India and others, 2001(8) SCC 71 the Court held that no discrimination can be created between the employees who retired prior to and after a particular date for being entitled to the benefits of the revised pension scheme. Their Lordships have held as under :- “In our view the aforesaid para does not in any way support the contention of the respondents. On the contrary, on parity of reasoning, we would also reiterate that let us be clear about this misconception. Firstly, the Pension Scheme including the liberalized scheme available to the employees is non-contributory in character. Payment of pension does not depend upon Pension Fund. It is the liability undertaken by the Company under the Rules and whenever becomes due and payable is to be paid. As observed in Nakara’s case (supra), pension is neither a bounty, nor a matter of grace depending upon the sweet will of the employer, nor an ex gratia payment. It is a payment for the past services rendered. It is the liability undertaken by the Company under the Rules and whenever becomes due and payable is to be paid. As observed in Nakara’s case (supra), pension is neither a bounty, nor a matter of grace depending upon the sweet will of the employer, nor an ex gratia payment. It is a payment for the past services rendered. It is a social welfare measuring 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. May be that in the present case, the Trust for pension fund is created for Income tax purposes or for smooth payment of pension, but that would not affect the liability of employer to pay monthly pension calculated as per the Rules on retirement from service and this retirement benefit is not based on availability of pension fund. There is no question of pensioners dividing the Pension fund or affecting the pro rata share on addition of new members to the Scheme. As per Rule (1) quoted above, an employee would become member of the Fund as soon as he enters into a specified category of service of the Company. Under rule (8) Trustees may withhold or disconsolate a pension or annuity or any part thereof payable to a member or his dependents, and that pension amount is non-assignable. Further, the payment of pension was the liability of the employer as per the rules and that liability is required to be discharged by the UOI in lieu of its taking over of the Company. The rights of the employees (including retired) are protected under Section 11 of the Burmah Oil Company (Acquisition of Shares of Oil India (Act 41) Limited and of the undertakings in India of Assam Oil Company Limited and the Burmah Oil Company (India Trading) Limited Act, 1981. In our view, the ratio of the aforesaid judgment is not applicable in the present case. In the said case, Indian Oxygen Ltd. had set up a ‘non-contributory superannuation fund’ known as the Indian Oxygen Ltd. Executive Staff Pension Fund. As per the Rules, an employee was entitled to receive an annuity under a policy purchased by the trustee of the fund from the life Insurance Corporation of India. In the said case, Indian Oxygen Ltd. had set up a ‘non-contributory superannuation fund’ known as the Indian Oxygen Ltd. Executive Staff Pension Fund. As per the Rules, an employee was entitled to receive an annuity under a policy purchased by the trustee of the fund from the life Insurance Corporation of India. Petitioners in that case contended that the scheme of such non-contributory approved superannuation fund should be modified so as to provide for disbursement of pension by the fund themselves or in the alternative by a statutory body to be newly constituted under a new scheme. Further the fund was constituted for the purpose of providing an annuity to the beneficiaries and the trustees were required to accumulate the contribution in respect of each beneficiary and purchase and annuity from the Life Insurance Corporation of India at the time of retirement or death of each employee or on his becoming incapacitated prior to retirement as per Rule 89(2) of the Income Tax Rules, 1962. Therefore, when an employee retired, all accumulated contribution in respect of employee concerned made by the employer to the pension fund of the trust was crystallised for the benefit of employee. In that set of circumstances, the Court observed that the right of the employee to receive the annuity and quantum of his annuity gets crystallised at the time of purchase of annuity under the then existing scheme of Life Insurance Corporation of India. The Court also observed that the contention was based on misunderstanding of the nature of the annuity which is purchased in the interest of each employee as and when he retires. The position in the present case is altogether different. Right to get pension is obviously different from getting annuity on the basis of accumulated contribution. The rules for grant of pension provide that an employee mentioned in specified category shall automatically be member of pension fund and is entitled to get pensions on the date of his retirement. Amount of pension is to be determined as per the Rules. That Rule is modified and the petitioners seek relief on the basis of the amended rule on the ground that there cannot be any discrimination between the employees who retired prior to or after a particular date, as held in Nakara’s case which is followed by this court in various decisions including V. Kasturi (supra). That Rule is modified and the petitioners seek relief on the basis of the amended rule on the ground that there cannot be any discrimination between the employees who retired prior to or after a particular date, as held in Nakara’s case which is followed by this court in various decisions including V. Kasturi (supra). Further there is no question of pensioners (retired employees) dividing the pension fund and/or payment of pension to be made only from the pension fund. The liability to pay pension arises because of provision made in the rules. In this view of the matter, the decision in Sasadhar Chakravarty (supra) would have no bearing.” 24.In view of the definitive law laid down by their Lordships of the Hon’ble Supreme Court and no reasons forthcoming for picking up the cut-off date 5.6.1995, the writ petition is allowed. The cut-off date as 5.6.1995 is struck down. The scheme promulgated on 6.10.1995 shall also apply to the petitioners and other similarly situate persons, however, with a rider that they will have to deposit the amount already received by them towards the retiral benefits with the employer within reasonable period. Consequently, the order dated 19.6.2001 passed by the learned Tribunal in OA (D) No. 237/1996 is set aside. There will, however, be no order as to costs. M.R.B. ———————