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2016 DIGILAW 23 (MAN)

State of Manipur v. All Manipur Pensioners Assn.

2016-03-01

KH.NOBIN SINGH, L.K.MOHAPATRA

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JUDGMENT : The State authorities have preferred this Writ Appeal challenging the legality of the judgment and order dated 24.3.2005 passed by the learned Single Judge in W.P(C) No.1455 of 2000. 2. The respondent No.1 is an Association of Pensioners registered under the Societies of Registration Act and the respondent No.2 joining the respondent No.1 in his b individual capacity had filed the writ petition. 3. The grievance of the respondents in the writ petition is that the Central Civil Services (Pension) Rules 1972 were adopted by the State of Manipur for Manipur Civil Services (Pension) Rules 1977 as amended by the Manipur Civil Services (Pension) (Amendment Rules), 1991. Rule 49 of the Central Civil Services 1972 provides that in case of a Government servant retired in accordance with the provisions of the Rules after completing qualifying service of not less than 30 years, the amount of pension shall be calculated at 50% of the average emoluments subject to a maximum of Rs.4500 per mensum. Considering the increase in cost of living, the Govt. of Manipur made an effort to increase the quantum of pension and pay for its employees. The Manipur Central Services (Revised Pay) (first Amendment) Rules 1999 have been brought in by the State Government enhancing the scales of pay of its employees w.e.f. 1.1.1996 as in the case of Central Govt. employees. It is the case of the respondents that the Central Government did not make any distinction between the pensioners and all the pensioners were allowed to receive revised pension irrespective of their date of retirement whereas the State of Manipur issued two Office Memoranda for the purpose of granting revised pension to those Manipur Government employees who retired on or after 1.1.1996 at a higher percentage and to those who retired before 1.1.1996 at a lower percentage. It is submitted by the respondents in the writ petition that pensioners form only one class as a whole and cannot be micro classified by an arbitrary, unprincipled and unreasonable criterion for the purpose of grant of pension to them. It is also submitted that the date of retirement cannot form the valid criterion for classification since those who retired at the end of every month shall form a class by themselves. It is also submitted that the date of retirement cannot form the valid criterion for classification since those who retired at the end of every month shall form a class by themselves. The division of pensioners into two classes is wrongful and arbitrary and is not based on any rational principle having nexus to the object sought to be achieved and accordingly is violative of Article 14 of the Constitution of India. 4. The present appellants filed counter affidavit in the writ petition stating that the Office Memorandum dated 17.12.1986 issued by the Govt. of India has not been adopted by the Government of Manipur. It is further stated in the counter affidavit that matters such as salary, pension are State subject and State is at liberty to fix the amount of salary or pension to be paid to its employees depending on its financial capability. It is further stated that considering the financial constraints of the State, it is not in a position to extend the benefit of pension matching the percentage given by the Govt. of India in its Memorandum dated 17.12.1998 to the pre-1996 pensioners and accordingly a decision was taken to extend the benefit of revised pension at certain percentage for the pre 1996 higher and another percentage for the post 1996 pensioners. 5. The learned single Judge, referring to several Office Memoranda which made part of the writ petition, came to the conclusion that the method of calculating the revised pension in para 4.1 of the Office Memorandum dt. 21.4.1999 in respect of pre-1996 pensioners is different from the method of calculating revised pension for the Government employees who retired/died in -harness on or after 1.1.1996 and is consequently arbitrary and violative of Article 14 of the Constitution of India. The Court also observed that there cannot be classification among one class of pensioners. 6. Shri Th. Ibohal, learned Advocate General, challenging the impugned judgment, submitted that the question of payment of salaries and pension is a State subject and it is for the State to decide how much salary or pension is to be paid to its employees or former employees depending on the financial condition of the State. Merely because the Central Govt. Shri Th. Ibohal, learned Advocate General, challenging the impugned judgment, submitted that the question of payment of salaries and pension is a State subject and it is for the State to decide how much salary or pension is to be paid to its employees or former employees depending on the financial condition of the State. Merely because the Central Govt. pays pension to its retired employees without any classification does not necessarily mean that State has to adopt the same principle and can be debarred from making any classification even though it does not have financial resources to pay. 7. Shri N. Jotendro, learned counsel appearing for the respondents submitted that pensioners belong to one class and no discrimination can be made by the State Government among the pensioners by classifying them into two groups. If a particular benefit is extended to the pensioners, it must be extended to all and the pre1996 pensioners cannot be paid a lesser percentage of the revised pension than that of the post-1996 pensioners. 8. The Government of Manipur in the Finance Department (Pay Implementation Cell) issued an Office Memorandum on 21.4.1999. In the said Memorandum some modifications were brought in the rules regulating pension, D.C.R.G. and Family Pension under the Manipur Service (Pension) Rules, 1977 and commutation of pension under C.C.S.(Commutation of Pension) Rules, 1981 for implementation in favour of the retired Government employees of the State Government. This Office Memorandum was made applicable to Government servants who retired/died-in-harness on or after 1.1.1996. Relevant portion of the notification are quoted below:- “17. 2.1. The revised provisions as per these orders shall apply to Government servants who retire/die-in-harness on or after 1.1.1996. Separate orders will be issued in respect of employees who retired/died before 1.1.1996. 2.2. Where pension/Family pension/D.C.R.G./Commutation of pension has already been sanctioned in cases occurring on or after 1.1.1996 the same shall be revised in terms of these orders. In cases where pension has been finally sanctioned on the pre-revised orders and if it happens to be more beneficial than the pension becoming due under these orders, the pension already sanctioned shall not be revised to the disadvantage of the pensioner in view of the Rule 70 of Manipur Services (Pension) Rules, 1977.” 4. Pension. In cases where pension has been finally sanctioned on the pre-revised orders and if it happens to be more beneficial than the pension becoming due under these orders, the pension already sanctioned shall not be revised to the disadvantage of the pensioner in view of the Rule 70 of Manipur Services (Pension) Rules, 1977.” 4. Pension. Pension shall continue to be calculated at 50% of average emoluments in all cases and shall be subject to a minimum of Rs.1275 per month and a maximum upto 50% of the highest pay in the Government which is Rs.30000 per month since 1/1/1996. Accordingly, the provisions of Clauses (a) and (b) of sub-rule (2) of rule 49 of the Pension Rules shall stand modified. The other provisions contained in Rule 49 shall continue to apply.” 9. Another Memorandum by the same Department was issued on 21.4.1999 introducing the Manipur Services (Revised Pay) Rules 1999 which came into effect from 1.1.1996 in respect of pre1996 pensioners/Family pensioners. The relevant portions of the said rule are quoted below:- “4.1. The pension/family pension of existing pre-1996 pensioners/family pensioners will be consolidated with effect from 1.1.1996 by adding together:- (i) The existing pension/family pension. (ii) Dearness Relief up to CPI 1510 i.e. @ 148%, 111% and 96% of basic pension as admissible vide this department’s O.M. No.30/1/91-PIC dated 6.6.1996. (iii) Interim Relief-I. (iv) Interim Relief-II (v) Fitment weightage @40% of the existing pension/family pension. The amount so arrived at will be regarded as consolidated pension/family pension with effect from 1.1.1996. The upper ceiling on pension/family pension has been increased from Rs.4,500 and Rs.1,250 to 50% and 30% respectively of the highest pay in the Government. Since the consolidated pension will be inclusive of commuted portion of pension, if any, the commuted portion will be deducted from the said amount while making monthly disbursements.” 10. Referring to the above Office Memoranda, it was contended by the learned counsel for the petitioners in the writ petition who are respondents in the appeal that a discrimination has been made between the pre and post 1996 retirees which is not permissible under law. It was the case of the respondents in the writ petition that retired employees form a class by themselves and the State Government had no jurisdiction or authority to classify them into two groups, i.e. pre-1996 retiree and post-1996 retiree and allow them revised pension at different rates. It was the case of the respondents in the writ petition that retired employees form a class by themselves and the State Government had no jurisdiction or authority to classify them into two groups, i.e. pre-1996 retiree and post-1996 retiree and allow them revised pension at different rates. 11. The learned Advocate General submitted that there is no discrimination among the pre and post 1996 retirees. Since the State Govt. did not have the requisite fund for payment of revised pension at the same rate to all the retired employees, a classification was made and such classification is permissible under law. 12. In the case of D.S. Nakara and Ors vs. Union of India, reported in AIR 1983 SC 130 a constitution Bench of the Supreme Court considered the provisions contained in the Central Civil Services (Pension) Rules, 1972 and Ministry of Finance Memorandum dated 25.5.1999 as well as 28.9.1979 introducing a classification in revised pension formula between pensioners on the basis of date of retirement specified in the said memoranda. The Court ultimately came to the conclusion that the fundamental principle is that Article 14 of the Constitution of India 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. The Court further held that the doctrine of classification 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. The Court, further, held that where all relevant considerations are the same, persons holding identical posts may not be treated differently in the matter of their pay merely because they belong to different departments. If that cannot be done when they are in service, can it be done after retirement ? The Court, further, held that where all relevant considerations are the same, persons holding identical posts may not be treated differently in the matter of their pay merely because they belong to different departments. If that cannot be done when they are in service, can it be done after retirement ? Expanding this principle, it can confidently be said that if pensioners form a class, their computation cannot be by different formal affording unequal treatment solely on the ground that some retired earlier and some retired later. The aforesaid case was followed subsequently by the Apex Court in the batch of cases, first case being Kallakkurichi Taluk Retired Officials Association, Tamil Nadu and others Vs. State of Tamil Nadu reported in (2013) 2 SCC 772 . 13. The case of D.S. Nakara (supra) was taken note of in a decision of the Supreme Court in the case of Hari Ram Gupta (Dead) through L.R. Kasturi Devi reported in (1998) 6 SCC 328 and was distinguished. The relevant paragraphs of the said judgment are quoted below: “9. The only other question that survives for our consideration is whether the ratio in Nakara's case will assist the appellant in getting the relief sought for? In D.S. Nakara v. Union of India, (1983) 1 SCC 305 : AIR 1983 SC 130 the question for consideration before this Court was whether on the basis of date of retirement the retirees can be classified into different groups and thereupon make provision granting some benefits to one group denying the others? In the aforesaid case the provisions for pension was applicable to all retirees and, therefore, pensioners form a class as a whole. But when Liberalised Pension Scheme was introduced the said Scheme was made applicable to a group of pensioners and not to all and therefore, it was held by this Court that pensioners form a class as a whole and cannot be micro-classified by an arbitrary, unprincipled and unreasonable eligibility criteria. But when Liberalised Pension Scheme was introduced the said Scheme was made applicable to a group of pensioners and not to all and therefore, it was held by this Court that pensioners form a class as a whole and cannot be micro-classified by an arbitrary, unprincipled and unreasonable eligibility criteria. It is to be noted that the aforesaid 487 judgment was considered by this Court in the subsequent Constitution Bench judgment of Krishna Kumar v. Union of India, (1990) 4 SCC 207 : AIR 1990 SC 1782 wherein the decision of Nakara ( AIR 1983 SC 130 ) (supra) was explained and it was held that the pension retirees and provident fund retirees do not form one homogeneous class and on the other hand the Rules governing the provident fund and its contribution are entirely different from the Rules governing pension and, therefore, it would not be reasonable to argue what is applicable to the pension retirees must also equally be applicable to Provident Fund retirees. It was further held in the aforesaid case that the rights of each individual retiree finally crystallised on his retirement where after no continuing obligation remained in case of those who are governed by Provident Fund Rules whereas in case of Pension retirees the obligation continues till the death of the employee. This Court categorically held that Nakara ( AIR 1983 SC 130 ) (supra) cannot be an authority for the decision in Krishna Kumar (supra). In Union of India v. B. P.N. Menon, (1994) 4 SCC 68 : 1994 AIR SCW 1985 a similar question came up for consideration and distinguishing Nakara and following Krishna Kumar and other similar cases the Court held that whenever the Government or an authority, which can be held to be a State within the meaning of Article 12 of the Constitution, frames a scheme for persons who have superannuated from service, due to many constraints, it is not always possible to extend the same benefits to one and all, irrespective of the dates of superannuation. As such any revised scheme in respect of post-retirement benefits, if implemented with a cut-off date, which can be held to be reasonable and rational in the light of Article 14 of the Constitution, need not be held to be invalid. As such any revised scheme in respect of post-retirement benefits, if implemented with a cut-off date, which can be held to be reasonable and rational in the light of Article 14 of the Constitution, need not be held to be invalid. Whenever a revision takes place, a cut-off date becomes imperative because the benefit has to be allowed within the financial resources available with the Government. When the Army personnel claimed the same pension irrespective of their date of retirement this Court in the Constitution Bench case of the Indian Ex-services League v. Union of India, (1991) 2 SCC 104 : 1991 AIR SCW 327, the Court considered the grievance of ex-servicemen who had laid the claim on the basis of Nakara ( AIR 1983 SC 130 ) (supra) but ultimately negatived the same and followed Krishna Kumar ( AIR 1990 SC 1782 ) (supra). In All India Reserve Bank Retired Officers Association v. Union of India, (1992) Suppl 1 SCC 664 : (1992 AIR SCW 460), when the validity of the introduction of Pensions scheme in lieu of Contributory Provident Fund Scheme was challenged on the ground that Bank employees who retired prior to 1-1-1986 have not been given the benefit of the said scheme it was held by this Court that there is no arbitrariness in the same. 10. This being the position the appellant having superannuated prior to the Rule coming into force cannot claim the right to pension under the Rules with the help of the decision of this Court in Nakara ( AIR 1983 SC 130 ) (supra) and further in view of our conclusion that the Rules do not have any retrospective operation the relief sought for by the appellant to get pension under the Rules cannot be granted.” 14. D.S. Nakara’s case (supra) was again taken note of in the case of T.N. Electricity Board vs. R. Veerasamy & Ors reported in (1999) 3 SCC 414 . The Apex Court, in the said judgment, also took note of the judgment in the case of Hari Ram Gupta (supra). The relevant paragraphs of the judgment are quoted below:- “15. D.S. Nakara’s case (supra) was again taken note of in the case of T.N. Electricity Board vs. R. Veerasamy & Ors reported in (1999) 3 SCC 414 . The Apex Court, in the said judgment, also took note of the judgment in the case of Hari Ram Gupta (supra). The relevant paragraphs of the judgment are quoted below:- “15. As noticed earlier, the learned Judges even after noticing that the ratio in the judgment of this Court in Nakara's case ( AIR 1983 SC 130 ) (supra) cannot be pressed into service, erroneously granted relief on the alleged delay on the part of the appellant-Electricity Board in introducing the pension scheme which certainly cannot be a ground for the Court to give retrospective effect to the pension scheme. Moreover, the appellant-Board had given wellfounded reasons for introducing the pension scheme from 1-7-1986 including financial constrains, a valid ground. We are of the view that the retired employees (respondents), who had retired from service before 1-7-1986 and those who were in employment on the said date, cannot be treated alike as they do not belong to one class. The workmen, who had retired after receiving all the benefits available under the Contributory Provident Fund Scheme, cease to be employees of the appellant-Board w.e.f. the date of their retirement. They form a separate class. 16. In the light of the foregoing discussion and applying the rulings of this Court above noted, we answer the issue set out at the outset by holding that the appellant-Board has not acted illegally or contrary to law in introducing the pension scheme prospectively from 1-7-1986 and that the employees (respondents) retired before 1-7-1986 cannot compel the appellant-Board to extend the benefit of the newly introduced pension scheme with retrospective effect.” 15. Reference may also be made to another decision of the Apex Court in the case of State of Penjab & Ors vs. Amar Nath Goyal & Ors reported in (2005) 6 SCC 754 . Though the case relates to payment of gratuity, the principle underlying in the decision is applicable to the present case. The relevant portion of the judgment are quoted below:- “24. Though the case relates to payment of gratuity, the principle underlying in the decision is applicable to the present case. The relevant portion of the judgment are quoted below:- “24. The learned counsel for the Union of India made available the Government's file from which it is seen that the Government took a conscious decision that the benefit of the increase in the quantum of gratuity, pursuant to the merged portion of the dearness allowance and the revised ceiling shall be made available from 1.4.1995, which was the date recommended in the Interim Report of the Fifth Central Pay Commission. The Government noticed that the consequential financial burden would be very heavy. Hence, the Central Government decided that these benefits would be made available only from 1.4.1995. The State Governments followed suit. 25. The only question, which is relevant and needs consideration, is whether the decision of the Central and State Governments t restrict the revision of the quantum of gratuity as well as the increased ceiling of gratuity consequent upon merger of a portion of dearness allowance into dearness pay reckonable for the purpose of calculating gratuity, was irrational or arbitrary. 26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1.4.1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level.” 16. On reading of the above three decisions, it is clear that whenever the Government or an authority, which can be held to be a State within the meaning of Article 12 of the Constitution, frames a scheme for persons who have superannuated from service, due to many constraints, it is not always possible to extend the same benefit to one and all irrespective of date of superannuation. As such any revised scheme in respect of post retirement benefit, if implemented with a cut-off date which can be held to be reasonable and rational in the light of Article 14 of the Constitution, need not be held to be invalid. As such any revised scheme in respect of post retirement benefit, if implemented with a cut-off date which can be held to be reasonable and rational in the light of Article 14 of the Constitution, need not be held to be invalid. Whenever a revision takes place, a cut-off date becomes imperative because benefit has to be allowed within the financial resources available with the Government. Relying on the above decision and some other decisions of the Apex Court, similar view was also expressed by a Division Bench of this Court in the case of The State of Manipur & Another vs. Smt. Vungkhonem & Another vide W.A. No. 3 of 2009 disposed of on 26.8.2015. 17. The learned counsel for the respondents relied upon 2 decisions of the Apex Court. The first decision is the case of Subrata Sen vs. Union of India reported in 2001 Legal Eagle (SC) 1211. In the said reported case, benefits of revised pension scheme was extended to officers retiring from December, 1994. The Court held the distinction to be discriminatory and directed that the benefit of revised pension scheme should be extended to all officers irrespective of their date of retirement. On reading of the judgment, we find that the question as to whether a classification could be made or not was neither raised nor considered. The decision was rendered on the basis of the decision in the case of D.S. Nakara (supra). The other decision relied upon by the respondents is the case of State of Rajasthan & Ors vs. Mahendra Nath Sharma reported in 2015 Legal Eagle (SC) 653 . This case relates to benefit of revised pay scales as well as pension. However, it does not deal with the question of classification. Reliance was placed on paragraph 21 of the judgment to say that State cannot take a plea of financial burden to deny the legitimate dues. As is evident from the earlier decisions referred to above, a classification is permissible and cut-off date can be pressed into service depending on financial resources of the State. 18. Reliance was placed on paragraph 21 of the judgment to say that State cannot take a plea of financial burden to deny the legitimate dues. As is evident from the earlier decisions referred to above, a classification is permissible and cut-off date can be pressed into service depending on financial resources of the State. 18. On analysis of the facts of the present case that the State does not have the financial resources to pay uniform pension to all the retired employees and the decisions referred to above, we conclude that the cut-off date fixed by the State Government as 1.1.1996 for payment of revised pension to pre-1996 retirees and post-1996 retirees cannot be termed to be unreasonable or irrational in the light of Art.14 of the Constitution of India and therefore need not be held to be invalid. 19. For the reasons stated above, we are unable to sustain the impugned judgment and accordingly allow the appeal and set aside the impugned judgment. The appeal is disposed of. Connected Misc. Applications shall stand disposed of.