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2012 DIGILAW 156 (ORI)

PRAFULLA KUMAR GIRI v. MANAGING DIRECTOR, ORISSA HYDRO POWER CORPORATION LTD.

2012-03-21

S.K.MISHRA

body2012
JUDGMENT : S.K. Mishra, J. - The petitioner, a retired employee of Orissa Hydro Power Corporation Ltd. (hereinafter referred to as "OHPC" for brevity), has challenged the Notification issued under the Pension Scheme by the opposite party namely OHPC, to be violative of Articles 14,16,21 and 300-A of the Constitution of India. 2. The petitioner was working as Senior Electrician under Balimela Hydro Electricity under Balimela Hydro Electricity Project. While working as such, he retired from service on 31.10.2004 on superannuation. The said Balimela Hydro Electricity Project is under the control of the OHPC. Previously it was under the Orissa State Electricity Board (hereinafter referred to as the "OSEB" for brevity). The OSEB as per Resolution No.9469 dated 19.3.1991 adopted the Orissa Pension Rules, 1977 w.e.f. 01.4.1990 and called for option from its employees whether they want to remain under the EPF Scheme or to come under the scope of OSEB Pension Scheme. The employees were asked to submit the said option on or before 30.9.1991. 3. The petitioner pleads that being totally ignorant about the OSEB Pension Scheme as he was not supplied with the guidelines of the said Pension Scheme he could not understand the difference between the two schemes. As such out of sheer ignorance the petitioner and other employees of the Balimela Hydro Electricity Project gave their option to continue in the EPF Scheme instead of OSEB Pension Scheme. It was not within their knowledge that OSEB Pension Scheme is more beneficial than the EPF Scheme, accordingly they approached the Management to consider their option to allow them to be covered under the OSEB Pension Scheme. 4. The Management, therefore, discussed with the employees, but the legal opinion given on the same by the Corporation was negative. Therefore, the petitioner filed an application before the Court, which was registered as W.P.(C) No.7273/2004, on 13.7.2004 before his retirement challenging the legal action of opposite party no.1 in not allowing him to change his option to be covered under the OSEB Pension Scheme. In the meantime he retired. On 28.4.2006, the Managing Director of the OHPC passed an order publishing thereby the names of seventy nine employees, who were on the roll of OHPC as on 19.5.2005 and allowed them to come under OHPC Pension Scheme, but the name of the petitioner was not in the said list. In the meantime he retired. On 28.4.2006, the Managing Director of the OHPC passed an order publishing thereby the names of seventy nine employees, who were on the roll of OHPC as on 19.5.2005 and allowed them to come under OHPC Pension Scheme, but the name of the petitioner was not in the said list. Therefore, the petitioner on rising of a fresh cause of action withdrew W.P.(C) No.7273/2004 in order to file a better petition. The petitioner, therefore, has filed this writ petition challenging the fixation of cut-off date for exercising the option for pension and to declare the same to be illegal and to further direct opposite party no.1 to allow the petitioner to be covered under the OHPC Pension Scheme as has been done in case of employees under Annexure-7. 5. Counter affidavit has been filed by the opposite parties. The opposite parties, inter alia, pleading that the petitioner retired as Senior Electrician from OHPC Service on 31.10.2004 and that he had not exercised his opinion to come under the purview of the OHPC Pension Scheme, therefore, he is not entitled to the same. It is submitted that the act of putting a cut-off date to be 19.5.2005 is not arbitrary. It has been taken in accordance with the Office Order No.5153 dated 15.4.2005 of the GRIDCO wherein similar opportunities were given to the employees to exercise their option to come over to the Pension Scheme of GRIDCO with a cut-off date of 22.12.2004. The cut-off date, which has been fixed, was on the date on which the Board of Directors of GRIDCO took the decision to extend the pensionary benefit to such employees. Similarly, the OHPC also took a decision with cut-off date as 19.5.2005 on the basis of the decision taken by the OHPC Board in its meeting held on 19.5.2005. It is submitted that as a practice the cut-off date is normally fixed for implementation of any rule, as the date of decision as have been done prudently. Therefore, the opposite parties plead that the writ petition is without merit and same be dismissed. 6. In a rejoinder affidavit to the counter affidavit, the petitioner claimed that the pleadings of the opposite parties are misleading. Therefore, the opposite parties plead that the writ petition is without merit and same be dismissed. 6. In a rejoinder affidavit to the counter affidavit, the petitioner claimed that the pleadings of the opposite parties are misleading. As a matter of fact, it is further pleaded though in a joint meeting of the GRIDCO and OHPC the fixation of cut-off date was decided as correct and the Project fixed the cut-off date as 22.12.2004, but subsequently vide Office Order dated 16.2.2009, the earlier decision taken on 15.4.2005(Office Order No.5153) has been superseded by the GRIDCO and all the employees, who were on the rolls as on 1.4.1990 and retired thereafter from all the existing non-pensionary, have been allowed to get the GRIDCO pensionary benefits. Therefore, the employees of OHPC, who stands on the similar footing, are entitled to the said benefits. 7. Thus, the undisputed facts in the case are that the petitioner was originally an employee of OSEB and latter he was transferred to OHPC as per Orissa Electricity Reforms (Transfer of Undertakings, Assets, Liabilities Proceedings & Personnel) Scheme Rules, 1996. He was permanently absorbed in the OHPC w.e.f. 1.4.1996. The petitioner along with seventy nine employees of the OHPC had given their option to continue in the EPF Scheme instead of OSEB Pension Scheme on 26.6.1991. On 31.10.2004 the petitioner retired from service. On 19.5.2005 fresh cut-off date was fixed to accommodate the employees of the OHPC to exercise their option. On 28.4.2006 opposite party no.1 passed the said resolution allowing seventy nine employees, who were on the roll of OHPC on 19.5.2005 to come under OSEB Pension Scheme excluding the petitioner, although it is alleged that he is similarly situated. 8. After hearing learned counsel for the petitioner as well as opposite party no.1, the following questions arise for determination in this case:- (i) Whether the Notification of opposite party no.1 on 28.4.2006 is in violation of Article 14 of the Constitution of India? (ii) Whether the said Notification is creating a class within a class and, therefore, should be held to be discriminatory and arbitrary ? 9. To adjudicate these questions, the ratio decided by the Supreme Court in various cases has to be considered. (ii) Whether the said Notification is creating a class within a class and, therefore, should be held to be discriminatory and arbitrary ? 9. To adjudicate these questions, the ratio decided by the Supreme Court in various cases has to be considered. The constitution Bench of the Supreme Court in D.S. Nakara and others v. Union of India; AIR 1983 Supreme Court 130 considered the questions whether the date of retirement as a relevant consideration for eligibility when a revised formula for computation of pension is ushered in and made effective from a specified date and whether such a fixing of a cut-off date is violative of the principles enshrined under Article 14 of the Constitution of India. The Supreme Court ruled that the fundamental principle that Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation which must satisfy the twin test 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. Having dealt with various case laws and after examining the issue involved thoroughly, the Supreme Court held that by introducing an arbitrary eligibility criteria 'being in service and retiring subsequent to the specified date' for being eligible for the liberalized 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 liberalized pension and the eligibility criteria devised being thoroughly arbitrary is violative of Article 14 and unconstitutional. Therefore, the Supreme Court struck down the said cut-off date. 10. In Bhimasen Prusty and others v. State of Orissa and others; 78(1994) C.L.T. 357 the Division Bench of this Court examined whether the primary school teachers, who had retired prior to 1.9.1988 for grant of family pension to their survivors after their death, are entitled to the said pension in view of the fact that the family pension was made admissible from 1.9.1988 and as per the Orissa Aided Educational Institutions (Non-Govt. Fully Aided Primary School Teachers) Retirement Benefit (Amendment) Rules, 1989. Fully Aided Primary School Teachers) Retirement Benefit (Amendment) Rules, 1989. The Division Bench after considering the ratio decided by the constitution Bench in D.S. Nakara's case (supra) and State Government Pensioners Association v. State of Andhra Pradesh; AIR 1986 SC 1907 held that the cause shown to treat 1.9.1988 as the cut-off date can hardly be taken as an intelligible dividing line. Law is well settled that between the homogeneous clause artificial discrimination cannot be made in the matter of grant of pensionary rights and that once any revised scheme of pension is introduced it becomes equally applicable to all existing pensioners. So far as gratuity is concerned, it being an one time payment, the quantum of it payable by any particular date or revision of it is not retrospectively applicable to the existing pensioners. Then taking note of the aforesaid two reported cases the Court held that since the revised scheme was operative from the date mentioned in the scheme, i.e. 1.4.1978, the continuing rights of the pensioners to receive pension and family pension must also be revised according to that scheme. It was further held that whenever there is an introduction or revision in the family pension scheme, it becomes applicable to all the existing pensioners and there cannot be any reason to confine the right to get the family pension to only families of teachers retired after 1.9.1988. Hence the amendment to the rule has to be interpreted in that way and having not introduced any discrimination. Even so, it was also made clear that since the Rules have come into force with effect from 1.9.1988, no arrear payment of pension is permissible but the families of such teachers, who are retired prior to 1.9.1988 and have otherwise become entitled to family pension in accordance with the Orissa Pension Rules, shall be entitled to get the family pension in accordance with those Rules for the period for which payment is payable. 11. 11. All these cases have been referred to by this Court in Subarna Dibya and others v. State of Orissa and others; 2005(I) OLR - 168 wherein the effect of the amendment of Orissa Aided Educational Institutions Employees' Retirement Benefit Rules, 1981 (2001 Amendment Rules) was considered and it was held that the family of a Primary School/High school Teacher, who was serving in an aided educational institution would be entitled to receive family pension irrespective of the date of retirement and/or death of the said employee. 12. In Krishena Kumar v. Union Of India And Others; (1990) 4 SCC 207 , the Supreme court examined the validity of a cut-off date for opting to be covered under the railways pension scheme rather than the Railway Contributory Provident Fund Scheme. The facts of that case are that the petitioners, who were retired employees were covered by or had opted for the Railway Contributory Provident Fund Scheme. According to the petitioners before 1957 the only scheme for retirement benefits in the Railways was the Provident Fund Scheme. The scheme was replaced in the year 1957 by the Pension Scheme. The employees who entered Railway service on or after April 1, 1957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme. The employees who were already in service on April 1, 1957 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 Railways on exercise of the option. Twelve notifications giving such options were issued. In such 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. Twelve notifications giving such options were issued. In such 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. It was stated 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 had thereafter been liberalized manifold to the benefit of the pension retirees, whereas no similar benefit had been extended to those who retired opting for Provident Fund, and that had the petitioners, all of whom are PF retirees, known that pensionary benefits might subsequently be so increased, they would no doubt have opted for pension instead of Provident Fund. As regards the cut-off date it was mainly submitted that the Railways issued the notifications giving option to certain PF 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 PF retirees beyond the respective cut-off dates. This, it was submitted, was clearly discriminatory and violative of Article 14. The Supreme Court dismissing the SLP held that "those who did not opt for the pension scheme had ample opportunity to choose between the two viz. the PF scheme or the pension scheme. Each option was given for stated reason 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 a few. Therefore, the cut-off dates were not arbitrarily chosen but had nexus with the purpose for which the option was given." While deciding the case, the Supreme Court distinguished the ratio decided in the D.S. Nakara's case (supra). It was observed that in Nakara's case it was never held that both the pension retirees and the PF retirees formed a homogeneous class and that any further classification among them would be violative of Article 14. It was observed that in Nakara's case it was never held that both the pension retirees and the PF retirees formed a homogeneous class and that any further classification among them would be violative of Article 14. On the other hand it clearly observed that it was not dealing with the problem of a "fund". The Supreme Court further held that the Railway Contributory Provident Fund is by definition a fund. Besides, the Government's obligation towards an employee under CPF 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 crystalised 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 employee. Thus, on the retirement of an employee Government's legal obligating 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 pension retirees must also equally be applicable to PF retirees. This being the legal position the rights of each individual PF retiree finally crystalised on his retirement where after no continuing obligation remained while, on the other hand, as regard 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 PF retirees they would not be so adversely affected ipso facto. It can not, therefore, be said that it was the ratio decidendi in D.S. Nakara's case (supra) that the State's obligation towards its PF 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 that case. The Supreme Court, therefore, held that D.S. Nakara cannot, therefore, be an authority for the case being considered by it. 13. 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 that case. The Supreme Court, therefore, held that D.S. Nakara cannot, therefore, be an authority for the case being considered by it. 13. Similarly in V.K. Ramamurthy v. Union Of India And Another; (1996) 10 SCC 73 , the Supreme Court held that the petitioner was retired in the year 1972 and did not exercise his option to come over to the Pension Scheme even though he was granted six opportunities is not entitled to opt for Pension Scheme at such a belated stage. 14. Similar is the ratio decided in State of Rajasthan v. Rajasthan Pensioner Samaj; 1991 Supp(2) SCC 141, wherein the Supreme court set aside the High Court's order allowing the petition of widows of contributors of Jodhpur Provident Fund relying on D.S. Nakara case. The Supreme Court took note of the distinction made in Krishena Kumar case. 15. Thus, a reading of the aforesaid cases leaves no doubt in the mind of the Court that Provident Fund retirees and pension retirees do not form one homogeneous group and, therefore, putting a cut-off date is not violative or Article 14 of the Constitution of India. Hence the Court cannot direct that notification issued by opposite party no.1 to be arbitrary and thus violative of Article 14 of the Constitution of India. 16. Thus, there is no merit in the writ petition and the same is dismissed. No costs.