AI Structured Summary
Not yet generated for this judgment
Judgment
Murahari Sri Raman, J.—
THE CHALLENGE:
Questioning the legality and tenability of Judgment dated 25th January, 2023 of the learned Single Judge in W.P.(C) No. 2317 of 2018, the appellants (opposite parties in the writ petition) filed this intra-Court appeal invoking provisions of Article 4 of the Odisha High Court Order, 1948 read with Clause 10 of the Letters Patent constituting the High Court of Judicature at Patna and Rule 6 of Chapter-III of the Rules of the High Court of Odisha, 1948.
1.1. The appellants are aggrieved by the Judgment of the learned Single Judge allowing the respondent No.1-petitioner before the writ Court to be granted similar treatment of changing option to avail benefit of pension under the Pension-cum-Gratuity Scheme instead of CPF-cum-Gratuity Scheme, as such benefit was allowed to five employees named in the Additional Affidavit filed by the Indira Gandhi Institute of Technology on the principle of parity.
THE PLEADINGS:
The case of the appellants as adumbrated in the writ appeal reveals that Indira Gandhi Institute of Technology, Sarang (for brevity, “IGIT”) previously known as Orissa College of Engineering, a premier institute in the State of Odisha offering engineering courses at the under-graduate level and post-graduate level, being equipped with highly qualified faculties and state of the art laboratories, imparts technical education with courses and curriculum approved by All India Council for Technical Education, IE and Indian Society for Technical Education and has National Board of Accreditation (AICTE) accreditation. Though initially the IGIT was managed directly by the Government of Odisha, it is managed by the IGIT Society, an autonomous body, since 1987.
2.1. The Respondent No.1 was appointed a Lecturer in Chemistry by the Director of Technical Education and Training Odisha dated 28.01.1983 as a Lecturer in Chemistry in the said college. All employees (teaching and non-teaching staff) working in the Orissa College of Engineering, subsequently converted to IGIT, came under the control of the society. The Petitioner, working as a Lecturer in Chemistry on ad hoc basis, was offered regular appointment on dated 07.07.1987 as a Lecturer in Chemistry on temporary basis in the erstwhile Orissa College of Engineering.
2.2. The management of the society in its 27th Meeting took the decision for implementation of CPF/GPF and Pension-cum-Gratuity Rules/Scheme for the employees of IGIT with effect from 01.04.1996. Though said Scheme was approved by the Government in its communication dated 11.01.2000, the State Government declined to bear any additional financial liability due to introduction of the Scheme over and above the normal Grant-in-Aid that would have been paid to the IGIT, had the CPF Scheme continued.
2.3. By issue of Circular dated 29.01.2000 all the regular employees of the IGIT were informed to exercise option for accepting either CPF-cum-Gratuity or Pension-cum-Gratuity in the prescribed form within a period of six months from the date of circulation. Accordingly, the respondent No.1 submitted his option for CPF-cum-Gratuity Scheme in his application dated 29.08.2000. The said option was stated to have been accepted by the management and such fact has been recorded in the service book on 20.02.2001.
2.4. After exercising the option for CPF-cum-Gratuity, five staff members of the IGIT, namely Jayanta Kumar Ganthia, Sukadeb Sahoo, Pradip Kumar Dash, Sheshadev Bhuyan and Padma Charan Rout, submitted their application to appellant No.1 for changing of option from CPF-cum-Gratuity Scheme to Pension-cum-Gratuity Scheme through proper channel between 05.05.2004 and 18.10.2004.
2.5. Regarding implementation of Pension-cum-Gratuity Scheme, it was resolved in the 40th Meeting of the Board of Governors, IGIT, Sarang held on 30.09.2004 that the existing employees would be allowed Pension-cum-Gratuity or CPF-cum-Gratuity as per the option already exercised. However, fresh employees to be recruited thereafter would be covered under the CPF-cum-Gratuity without any scope for opting towards pension scheme.
2.6. In terms of resolution dated 30.09.2004, Letter bearing No. PA/8/40-395 was issued by the Principal to the Registrar for furnishing list of staff who have opted to remain under Pension-cum-Gratuity Scheme or CPF-cum-Gratuity Scheme for approval of the Government. The staff were allowed to exercise their choice on 15.11.2004. The IGIT vide Letter No. IGIT/ACCTS/221 while transmitting the list of employees who have opted for pension scheme and CPF Scheme to the Commissioner-cum-Secretary, Industries Department, Government of Odisha, Bhubaneswar, it was clarified that out of 209 members who exercised their option, 177 employees have exercised their option in favour of the Pension-cum-Gratuity Scheme, but 32 members including the respondent No.1 opted for the CPF-cum-Gratuity Scheme. Thus, the option exercised by the respondent No.l to remain under CPF-cum-Gratuity Scheme was a conscious and voluntary decision. Nevertheless, five employees whose names did find place in the additional affidavit of the respondent No.1 before the writ Court had exercised their change of option to come back to Pension-cum-Gratuity Scheme much before approval of the aforesaid resolution of the Board of Governors by the Government of Odisha.
2.7. The Industries Department of the Government of Odisha taking into consideration the Resolution dated 30.09.2004 in the 40th Meeting of the Board of Governors directed the Principal, IGIT, Sarang for the implementation of the Pension Scheme in respect of the five employees who had exercised their option and retired in the meantime to remain under the Pension Scheme along with other 172 employees who have not retired but opted for the Pension-cum-Gratuity Scheme as per the List submitted by the Appellants vide Letter dated 16.11.2004. This List was approved by the Government on 23.03.2005.
2.8. The respondent No.1, having exercised his option to choose CPF-cum-Gratuity Scheme as is apparent from the List dated 16.11.2004 which got approved by the Government on 23.03.2005, his claim seeking to change the option on 15.04.2005, after the date of approval of the Government, to get the benefit under Pension-cum-Gratuity Scheme by showing the reason that five of his colleagues have been allowed to avail the benefit under the said Scheme has been objected to by the appellants. It is stated by the appellants that those five employees had exercised their option much before the date of approval of the Government. Even though such application was not at all entertainable, the respondent No.1 without adhering to the rules of procedure gave such application directly to the Principal which was neither approved by his Head of the Department nor routed through the proper channel.
2.9. It is further contended by the appellants that besides the respondent No.1, nineteen other employees had submitted their applications requesting to change of the option from CPF-cum-Gratuity to Pension-cum-Gratuity during 12.03.2005 to 03.09.2009. The appellant No.1 on receipt of such applications through Letter dated 12.01.2011 vide No. PA/8-47/18 sent the List of 20 employees including the respondent No.1 to be included in the Pension-cum-Gratuity Scheme instead of CPF-cum-Gratuity Scheme to the Principal Secretary to Government of Odisha in Industries Department with reference to the minutes of 46th Meeting of the Board of Governors. Acting thereon, the Board in its 47th Meeting resolved as under:
“The individual cases have been examined and put up in Annexure-l for perusal of the Board. Board advised the Director to request the Government for consideration to include in Pension-cum-Gratuity Scheme”.
2.10. The Government in response to Letter dated 12.01.2011 vide No. PA/8-47/18 intimated the appellant No.1 that it has nothing to say about the inclusion of employees who have opted to come over to Pension-cum-Gratuity Scheme from CPF-cum-Gratuity, as the Department would not bear any financial liability. The Government is stated to have clarified further that once the option is exercised it is final and it should not be reopened again.
2.11. It is brought on record the fact that in the meantime the respondent No.1 after attaining the age of superannuation on 31.01.2017 got retired from the services of the IGIT. After his retirement, it is asserted by the appellants, the respondent No.1 was extended with the retirement benefits including CPF, Gratuity and leave encashment. It is affirmed by the appellant that the respondent No.1 has received an “auto generated salary slip” till his retirement where his contribution to CPF did reflect. All amount accumulated in CPF account has been calculated, which came to be Rs.23,25,346/-including the IGIT matching share of Rs.19,26,783/-and has been disbursed to the respondent No.1 vide Cheque No. 977141 dated 31.01.2017. On his retirement the respondent No.1 did not raise any objection in receiving the benefit under the CPF-cum-Gratuity Scheme and, thereby he accepted it.
2.12. After getting all these benefits on his retirement, the respondent No.1 filed W.P.(C) No. 2317 of 2018 contending that his pension has not yet been released and questioned the action of the appellants as discriminatory, ultra vires and violative of fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution of India as also the Pension Rules.
RESPONSE OF THE RESPONDENT NO.1 IN THE INTRA-COURT APPEAL:
The respondent No.1 by way of counter affidavit strongly objecting to the contentions of the appellants submitted that pension is allowed to employees for the time and energy given to the employer which is never considered as bounty, but is granted as social security measure. The model employer is supposed not to refuse pension while allowing similarly situated employees of IGIT the benefit of pension in lieu of CPF-cum-Gratuity.
3.1. It is further submitted by the respondent No.1 that having cited neither rule nor any cut-off date for implementing the CPF-cum-Gratuity Scheme, the appellants sought to enforce said Scheme discriminating the respondent No.1.
3.2. In the 27th Meeting no eligibility criteria was specified for availing benefit under the Pension-cum-Gratuity Scheme for the staff of the IGIT and, therefore, the respondent No.1 claims to be eligible for grant of pension as per the pre-amended provision contained in the Odisha Civil Services (Pension) Rules, 1992, which came into force with effect from 01.01.2005. Rule 3(4) of said Rules read with Finance Department Notification No.44451/F., dtd.17.09.2005 and Finance Department Circular No-Pen-40/2005-16950(255)/F., dated 02.04.2007 specifically mentioned that notwithstanding anything contained in these rules, all persons appointed under the Government of Odisha with effect from 1st day of January, 2005, shall not be eligible for pension as defined under sub rule (1) of Rule 3 of the said Rules but shall be covered by the defined contribution pension scheme. Therefore, it is claimed that as other employees of the IGIT were accorded the benefit under the Pension-cum-Gratuity Scheme, the respondent No.1 also entitled to identical benefits.
3.3. It has been affirmed by the respondent No.1 that there has been gross violation of the principles of natural justice and the IGIT could not have obtained option surreptitiously without properly guiding the affected persons. The pros and cons of the decision taken by the IGIT ought to have been circulated. It is urged by the respondent No.1 that the employees should have been given opportunity to change their option before finalising the Lists of employees seeking to abandon the CPF-cum-Gratuity Scheme and prefer to remain in the Pension-cum-Gratuity Scheme.
3.4. Under such premises, the respondent No.1 pleaded that the writ petition has rightly been allowed in favour of the respondent No.1 and the learned Single Judge was judicious in rendering decision by taking into account the ratio decided in case of D.S. Nakara Vrs. Union of India, (1983) 1 SCC 305.
ARGUMENTS OF RESPECTIVE COUNSEL FOR THE PARTIES:
Pleadings in the matter being completed, this Court proceeded to hear the matter for final disposal at the stage of “Admission” on the consent of learned counsel for both the sides. This Court heard Sri Nirod Kumar Sahu, learned counsel for the appellants-IGIT and Sri Umakant Sahoo, learned counsel for the respondent No.1.
Sri Nirod Kumar Sahu, learned Advocate for the petitioner submitted that twenty employees including the respondent No.1 having accepted the CPF-cum-Gratuity Scheme could not have claimed double benefit inasmuch as the respondent No.1 had already opted for switch over to CPF-cum-Gratuity Scheme on 29.08.2000 instead of Pension-cum-Gratuity Scheme. After the approval of the Government on 23.03.2005 in order to avail the benefits of the Pension-cum-Gratuity Scheme, the respondent No.1 decided to revert his option to have the benefit under Pension-cum-Gratuity Scheme, which could not be granted.
5.1. Arguing further Sri Nirod Kumar Sahu, learned Advocate submitted that the respondent No.1 is misconceived to have stated that there has been violation of Article 14 of the Constitution of India vis-à-vis five employees who are accorded the benefit of the Pension-cum-Gratuity Scheme by opting out of earlier option. On the contrary, the respondent No.1 would be similarly situated as that of the twenty employees who have submitted their applications regarding changing their option from CPF-cum-Gratuity Scheme to Pension-cum-Gratuity Scheme during the period from 12.03.2005 to 03.09.2009, which was after confirmation obtained from the Government, i.e. on 23.03.2005. It is strenuously argued that the five employees, whose cases have been cited by the respondent No.1 to be similarly situated, had submitted their applications regarding change of their option from CPF-cum-Gratuity Scheme to Pension-cum-Gratuity Scheme before 16.11.2004, i.e., the letter regarding pension was forwarded to the Government for approval and such option was much before the approval being accorded by the Government. Thus, the case of the respondent No.1 can, by no stretch of imagination, be equated with that of the individual case of the five employees, who got the benefit under the Pension-cum-Gratuity Scheme.
5.2. Refuting the allegation of the respondent No.1 that he was compelled to choose the CPF-cum-Gratuity Scheme as incorrect statement of fact and brazen attempt to mislead the Court along with other similarly situated employees, learned Advocate for the appellants submitted that the representation of the respondent No.1 was not only placed in the 47th Meeting of Board of Governors held on 25.09.2010, but also was forwarded along with 19 others to the Government of Odisha. This is clear indication of the fact that the IGIT did not exert any pressure or force on him to exercise his option.
5.3. The rules governing the CPF-cum-Gratuity Scheme and its contribution are entirely different from that of the rules governing the Pension-cum-Gratuity Scheme. The obligation of IGIT towards an employee under CPF-cum-Gratuity Scheme to deposit matching contribution begins as soon as his account is opened and ends with his retirement when his rights qua the IGIT in respect of the CPF-cum-Gratuity Fund is finally crystallized and thereafter no statutory obligation continues. Thus, on retirement of an employee the obligation of contribution by the IGIT under the CPF-cum-Gratuity ends; so the obligation of the IGIT came to an end qua the respondent No.1 on 31.01.2017, i.e., the date of his superannuation.
5.4. Sri Nirod Kumar Sahu, learned counsel has put forth his argument that the learned Single Judge of this Court, while disposing of the writ petition without properly examining the facts and the materials available on record, has delivered the impugned Judgment dated 25.01.2023 by acceding to the prayer(s) made by the respondent No.1. Improper appreciation of factual matrix by the learned Single Judge led to filing of intra- Court of appeal.
5.5. Having placed heavy reliance on the following paragraph of Krishena Kumar Vrs. Union of India, (1990) 4 SCC 207, Sri Nirod Kumar Sahu, learned Advocate submitted that the respondent No.1 being a class apart from other employees who have exercised their option for Pension-cum-Gratuity Scheme, the Judgment of the learned Single Judge is liable to be set aside being vulnerable:
“In Nakara, (1983) 1 SCC 305 = (1983) 2 SCR 165 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 the court clearly observed that it was not dealing with the problem of a “fund”. 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 crystallized 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 obligation 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 crystallized on his retirement whereafter 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 cannot, therefore, be said that it was the ratio decidendi in Nakara, (1983) 1 SCC 305 = (1983) 2 SCR 165 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 this case. Nakara, (1983) 1 SCC 305 = (1983) 2 SCR 165 cannot, therefore, be an authority for this case.”
5.6. Further reliance has been placed on KVS Vrs. Jaspal Kaur, (2007) 6 SCC 13 = (2007) 7 SCR 969 to contend that option for the CPF-cum-Gratuity Scheme being exercised, there was no scope for changing option to come back to the Pension-cum-Gratuity Scheme as the amount under the CPF-cum-Gratuity Scheme had been quantified and disbursed in favour of the respondent No.1 on his retirement. Accordingly, the learned counsel for the appellants vehemently urged to set aside the Judgment dated 25.01.2023 of the learned Single Judge by holding that the appellants are justified in rejecting the claim of the respondent No.1.
5.7. Sri Nirod Kumar Sahu has laid stress on the ground taken in writ appeal to contend that the learned Single Judge has failed to consider an important aspect and passed the impugned Judgment ignoring the admitted position that the IGIT runs through the Grant-in-Aid received from the Government of Odisha and since the Government of Odisha has refused to grant the fund for payment under the Pension-cum-Gratuity Scheme to the employees who have/had retired by exercising their option under the CPF-cum-Gratuity Scheme, the learned Single Judge erred in directing the appellants to consider the case of the respondent No.1 under the Pension-cum-Gratuity Scheme though the respondent No.1 is not otherwise eligible to get such benefit under the law. Thus, the basis on which findings are recorded by the learned Single Judge being perverse and based on erroneous approach not countenanced by law, the impugned Judgment is liable to be set aside.
Per contra, Sri Umakant Sahoo, learned Advocate for the respondent No.1 began to submit that no cut-off date being specified, he was justified in claiming for extending the benefit of Pension-cum-Gratuity Scheme as was allowed to other staff of IGIT. Accordingly, the learned Single Judge has correctly conceived of the factual position and granted relief(s) sought for in the writ petition. The scope of intra-Court appeal being limited, and Sri Nirod Kumar Sahu, learned counsel for the appellants having not demonstrated irregularity in the Judgment of learned Single Judge or patent illegality therein, the present writ appeal is required to be dismissed.
6.1. Sri Umakant Sahoo, counsel for the respondent No.1 has submitted that the appellants have misconstrued the fact. The respondent No.1 has never been offered to receive the CPF-cum-Gratuity, rather without his volition, the appellants have transferred the amount to his bank account. In amplifying his argument, he submitted that while the IGIT has allowed five of his colleagues, who are similarly placed, to avail benefit of Pension-cum-Gratuity Scheme, in view of avowed principle inherent in Article 14 of the Constitution of India, there was no hindrance for them to consider the case of the respondent No.1.
6.2. It is submitted that the Hon’ble Supreme Court of India has been pleased to lay down, in the context of applicability of precedent to a case, in the following lines in Union of India Vrs. Arulmozhi Iniarasu, (2011) 7 SCC 397 = (2011) 9 SCR 1 = AIR 2011 SC 2731:
“12. Before examining the first limb of the question, formulated above, it would be instructive to note, as a preface, the well-settled principle of law in the matter of applying precedents that the Court should not place reliance on decisions without discussing as to how the fact situation of the case before it fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid’s theorems nor as provisions of Statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Disposal of cases by blindly placing reliance on a decision is not proper because one additional or different fact may make a world of difference between conclusions in two cases. [Ref.: Bharat Petroleum Corpn. Ltd. Vrs. N.R. Vairamani, (2004) 8 SCC 579; Sarva Shramik Sanghatana (KV), Mumbai Vrs. State of Maharashtra, (2008) 1 SCC 494 and Bhuwalka Steel Industries Limited Vrs. Bombay Iron & Steel Labour Board, (2010) 2 SCC 273].”
6.3. Hence, drawing distinction on facts that option was exercised by the employee in the case of KVS Vrs. Jaspal Kaur, (2007) 6 SCC 13 = (2007) 7 SCR 969, relied on by the counsel for the appellants, the Hon’ble Supreme Court of India came to the conclusion that merely because original document was not produced, it could not be held that there was no option. In the said reported Judgment the Hon’ble Supreme Court of India has proceeded on the basis of “last pay certificate” which clarified about the option being exercised by the respondent No.1. However, in the instant case, it is pointed out by the learned counsel for the respondent No.1 that to revert to the Pension-cum-Gratuity Scheme, option was exercised much earlier to the date of retirement and in fact, representation in this regard was placed before the Board of Governors. Advancing argument further it is submitted by Sri Umakant Sahoo that in the instant case, the respondent No.1 was misdirected to give option for availing CPF-cum-Gratuity Scheme which was sought to be changed later on to claim Pension-cum-Gratuity Scheme. It is also claimed by the learned Advocate for respondent No.1 that there was no cut-off date for changing the option. In such view of the matter, the IGIT should have acted with pragmatic approach by extending similar benefit as had been done for five employees.
6.4. Therefore, Sri Umakant Sahoo submitted that the decision rendered in Krishena Kumar Vrs. Union of India, (1990) 4 SCC 207 has been thoroughly misplaced by Sri Nirod Kumar Sahu, learned Advocate for the appellants and the fact-situation therein does not match with the case of the respondent No.1. Nevertheless, the case of the respondent No.1 can be considered in terms of Calcutta State Transport Corporation Vrs. Ashit Chakraborty, (2023) 6 SCR 203.
6.5. Furthermore, referring to State of Punjab Vrs. Dharam Pal, (2017) 9 SCC 395; Mohammad Ali Imam Vrs. State of Bihar, (2020) 5 SCC 685; Md. Abdul Ghani Vrs. State of West Bengal, AIR 2020 Cal 1 = 2019 SCC OnLine Cal 9326, it has been submitted that there being no cut-off date specified for exercising option, mere furnishing option at an earlier point of time would not disentitle the respondent No.1 from claiming benefit under the Pension-cum-Gratuity Scheme by changing such option subsequently. This is more so when the pension starts after retirement. The respondent No.1 having exercised option to revert to the Pension-cum-Gratuity Scheme on 15th April, 2005, i.e., much prior to his age of superannuation and while the matter was under contemplation before the State Government for approval, there was no difficulty in considering his case along with others particularly when five of the staff of IGIT situated similarly were extended the benefit of the Pension-cum-Gratuity Scheme. The appellants could not have ignored the fact that employees entitled to claim pension from the date of superannuation after making refund of employers share of provident fund.
6.6. Accordingly, Sri Umakant Sahoo, learned Advocate, the appellants-IGIT had clarified that employees joining before 2005 ought to be covered under the Pension-cum-Gratuity Scheme and those joining after 2005, may be included in the revised Pension-cum-CPF Scheme. In Punjab State Coop. Agricultural Development Bank Ltd. Vrs. Coop. Societies, (2022) 4 SCC 363 the exposition of the legal principles culled out is that an amendment having retrospective operation which has the effect of taking away the benefit already available to the employee under the existing rule indeed would divest the employee from his vested or accrued rights and that being so, it would be held to be violative of the rights guaranteed under Articles 14 and 16 of the Constitution. With reference to Bank of Baroda Vrs. G. Palani, (2022) 5 SCC 612 it could be explained that pension is a right and is not a bounty, and cannot be dealt with arbitrarily. In the said case, it has been clarified that the existing provisions could not have been amended with retrospective effect, taking away accrued rights on the basis of joint note which had no statutory backing.
6.7. This apart, Government had also accorded approval to allow pension to some employees, but the case of respondent No.1 was not considered favourably. As a result, the respondent No.1 after rendering around 34 years of meritorious service was hard pressed. In short, it is the case of the respondent No.1 that even though he had opted for CPF-cum-Gratuity Scheme he changed his option subsequently by opting for coming back to the Pension-cum-Gratuity Scheme in writing on 15th April, 2005, which ought to have been duly considered and benefit given to similarly situated persons should have been extended to him. Hence, Sri Umakant Sahoo prayed for dismissal of writ appeal.
DISCUSSIONS AND ANALYSIS:
Pertinent here to notice the perception of the learned Single Judge while considering the case of the respondent No.1 and allowing the writ petition. Paragraphs 11 to 14 of the Judgment dated 25.01.2023 are extracted hereunder for ready reference:
“11. Thus, from the foregoing discussion what emerges is, the Board of Governors took a decision that the existing employees (those employed before 01.01.2005) would be allowed pension/CPF as per option already exercised and fresh employees would be uniformly covered under CPF/gratuity scheme. Prima facie, there is nothing wrong in such decision from the legal point of view nor is there anything illegal in fixing of cut-off date for granting the benefit.
A Constitution Bench of the Apex Court in the case of D.S. Nakara Vrs. Union of India; reported in (1983) 1 SCC 305 ruled that while there can be no discrimination in the matter of granting or withholding of pension yet the prescription of a cut-off date is not necessarily discriminatory.
In the instant case, what has happened is, after having decided to allow pension/CPF to the existing employees as per option already exercised by them, the authorities of IGIT have allowed five employees named in the preceding paragraph to change their option but deprived the petitioner from doing so. This, according to the considered view of this Court, amounts to discrimination. If none of the employees would have been allowed to change their option, the matter would have been different. But as has been held in a catena of decisions rendered by the Apex Court, it is not permissible to create a class within a class. If the situation is allowed to stand as it is it would result in gross discrimination inasmuch as, some employees would be permitted to change their option already exercised while others would not. It must be also kept in mind that pension is not a bounty. It is property and enjoys the same constitutional protection afforded to any other property. The above action of the authorities is therefore, something that cannot be countenanced in law. This Court however would hasten to add that if the five employees named in the Additional Affidavit filed by IGIT have not been granted actual benefits consequent upon change of option, the Petitioner’s case shall not be considered on the principle of parity.
For the foregoing reasons therefore, this Court is of the considered view that if the five employees named in the additional affidavit filed by the IGIT, who were allowed to change their option to the pension scheme, have actually been granted such benefits, the same benefit should also be granted to the petitioner subject to such formalities as the authorities may deem fit and proper to insist.”
It may at this juncture be necessary to make excursion into the conceptual understanding of “pension”, as spelt out by this Court in Bhuban Mohan Dash Vrs. State of Odisha, 2023 SCC OnLine Ori 6432, so that the right of the respondent No.1 to claim for extension of benefit under the Pension-cum-Gratuity Scheme can well be couched in the light of the Judgment dated 25.01.2023 of the learned Single Judge rendered in the writ petition.
8.1. It is statutory obligation of the employer to pay pension. It has fairly been well-settled that pension is not a charity or bounty nor is it a conditional payment solely dependent on the sweet will of the employer. Pension is in the nature of deferred payment earned for rendering long and satisfactory service with the employer. It is a social security measure, consistent with the socio-economic requirements, providing safeguards to the employees in their later years of life, who have shed their sweat and blood for their employer during their long service tenure. The benefit is conferred upon an employee for his unblemished career.
8.2. In State of Rajasthan Vrs. Mahendra Nath Sharma, (2015) 9 SCC 540 it has been observed that the antiquated notion of pension being a bounty, a gratuitous payment depending upon the sweet will or grace of the employer not claimable as a right and, therefore, no right to pension can be enforced through Court has been swept under the carpet by the decision of the Constitution Bench in Deokinandan Prasad Vrs. State of Bihar, (1971) 2 SCC 330, wherein the Court authoritatively ruled that pension is a right and the payment of it does not depend upon the discretion of the Government but is governed by the rules and a Government servant coming within those rules is entitled to claim pension. It was further held that the grant of pension does not depend upon anyone’s discretion. It is only for the purpose of quantifying the amount, having regard to service and other allied matters, that it may be necessary for the authority to pass an order to that effect, but the right to receive pension flows to the Government servant not because of any such order but by virtue of the rules. This view was restated in State of Punjab Vrs. Iqbal Singh, (1976) 2 SCC 1.
8.3. A Division Bench of this Court in Dhruba Charan Panda Vrs. State of Odisha, 88 (1999) CLT 637 = 1999 (II) OLR 433, has given clear picture of the history of “pension” with reference to the Odisha Civil Services (Pension) Rules, 1992, as follows:
“10. In Corpus Juris Secundum, Volume 70 at page 423, it stated that the title ‘pension’ includes pecuniary allowances paid periodically by Government to persons who have rendered services to the public or suffered loss or injury in the public service, or to their representatives; who are entitled to such allowances and rate and amount thereof; and proceedings to obtain and payment of such pensions.
A pension is a periodical allowance of money granted by the Government in consideration or recognition of meritorious past service, or of loss or injury sustained in the public service. A pension is a periodical allowance of money granted by the Government in consideration or recognition of meritorious past services, or of loss or injury sustained in the public service. A pension is mainly designed to assist the pensioner in providing for his daily wants, and it presupposes the continued life of the recipient.
In its strict sense a pension is not a matter of contract, and is not founded on any legal liability; it is a mere bounty or gratuity ‘springing from the appreciation and graciousness of the sovereign’, and it may be given or withheld at the discretion of the sovereign. It may be bestowed on such persons and on such terms as the law-making body of the Government prescribes, and it is, at most, an expectancy granted by the law. The term ‘pension’ has been compared and distinguished from ‘bonus’ ‘compensation’, ‘profits’, and ‘retirement payment’. A pension fund is to be distinguished from an annuity fund derived in part from voluntary contributions under a statutory opinion to contribute or refrain from contributing.
The term ‘pension’ is frequently, particularly in recent years, used in the broad sense of retirement pay or compensation in which it may partake of the nature of a contractual right rather than of gratuity, and, as used in this sense with respect to persons in the service of the Government, the term is fully discussed in Officers g. 92. A pension is a gratuity only where it is granted for services previously rendered which at the time they were rendered gave rise to no legal obligation.
A somewhat discordant note on the question whether pension and gratuity are bounty to be distributed by the Government to its employees on their retirement vis-a-vis the position as indicated in Corpus Juris Secundum. A similar view was also expressed in State of Kerala and others Vrs. Padmanabhan Nair, AIR 1985 SC 356. It was observed that pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but are valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment. The view has been recently reiterated in Dr. Uma Agarwal Vrs. State of U.P. and another, AIR 1999 SC 1212.
It is to be noted that in certain countries wrongful withholding of pension money has been made a criminal offence and it has been observed in some of the western countries that the federal statute making the wrongful withholding of pension money a criminal offence must be strictly construed. The purpose of the statute, it was held, to protect the pensioner against fraud until the unconditional payment of the money to him.
In Halsbury’s Laws of England, Fourth Edition, Reissue— Volume 16, it has been observed on the subject as follows:
“Pension means, a periodical payment or lump sum by way of pension, gratuity or superannuation allowance as respects which the Secretary of State is satisfied that it is to be paid in accordance with any scheme or arrangement having for its object or one of its objects to make provision in respect of persons serving in particular employments for providing them with retirement benefits and, except in the case of such a lump sum which had been paid to the employee, that:
(1) the scheme or arrangement is established by Act of Parliament or of the Parliament of Northern Ireland, or other instrument having the force of law, or
(2) the benefits under the scheme or arrangement are secured by an irrevocable trust which is subject to the laws of any part of Great Britain; or
(3) the benefits under the scheme or arrangement are secured by a contract of assurance or an annuity contract which is made with:
(a) an insurance company to which the Insurance Companies Act, 1982 applies; or
(b) a registered friendly society; or
(c) an industrial and provident society registered under the Industrial and Provident Societies Act, 1965; or
(4) the benefits under the scheme or arrangement are secured by any regulation or other instrument, not being a regulation or instrument having the force of law, made with the authority of a Minister of the Crown or with the consent of the Treasury for the purpose of authorising the payment to persons not employed in the Civil Service of the State of such pensions, gratuities of other like benefits as might have been granted to person so employed; or
(5) the scheme or arrangement is established enactment or other instrument having the force of law in any part of the Common Wealth outside the United Kingdom; and that the provision made to enable benefits to be paid, taking into account any additional resources which could and would be provided by the employer, or any person connected with the employer, to meet any deficiency, is adequate to ensure payment in full of such benefits.
‘Pension’ includes any part of a pension. ‘Pension’ does not include:
(i) a payment to an employee which consists of solely of a return of his own contributions, with or without interest;
(ii) that part of a payment to an employee which is attributable solely to additional voluntary contributions by that employee made in accordance with the scheme or arrangement;
(iii) a periodical payment or lump sum, represents compensation under statutory compensation scheme and is payable under a statutory provision, whether made or passed before, on or after 31 July, 1978.
If in any case the Secretary of State is satisfied that benefits under the scheme or arrangement are wholly of mainly provided for the benefit of persons not resident to Great Britain, he may, if he thinks fit and subject to such conditions, if any, as he thinks proper, waive the requirement contained in head (2) above in respect of a scheme or arrangement the benefits under which are secured by an irrevocable trust or the requirements of heads (3)(a), (3)(b) or (3)(c) above in the case of a scheme or arrangement the benefits under which are secured by a contract of assurance or an annuity contract.”
8.4. In D.S. Nakara Vrs. Union of India, (1983) 1 SCC 322, the Supreme Court held as under:
“Pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer, nor an ex gratia payment but it is a payment for the past service rendered; and it is social welfare measure rendering socio-economic justice to those who in the hey-day of their life ceaselessly toiled for the employer on as 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 d’etre for pensions 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 Articles 309 and 148(5) of the Constitution.”
8.5. In Poonamal Vrs. Union of India, AIR 1985 SC 1196 = (1985) 3 SCC 345, referring to Deakinandan Prasad Vrs. State of Bihar, AIR 1971 SC 1409, it has been made clear that “pension” is not merely a statutory right but it is the fulfilment of a constitutional promise, inasmuch as it partakes the character of public assistance in case of unemployment, old-age, disablement or similar other cases of undeserved want. Relevant rules merely make effective the constitutional mandate. Pension is a right not a bounty or gratuitous payment.
8.6. In Kerala State Road Transport Corporation Vrs. K.O. Varghese, (2003) 12 SCC 293 = AIR 2003 SC 3966, it has been held:
“13. A political society which has a goal to set up a welfare State, would introduce and has, in fact, introduced as a welfare measure wherein the retiral benefit is grounded on consideration of State obligation to its citizens who having rendered service during the useful span of life must not be left to penury in their old age. But, the evolving concept of social security is a later-day development, and this journey was over a rough terrain. To note only one stage in 1856 a Royal Commission was set up to consider whether changes were necessary in the system established by the operative 1834 Act. The report of the Commission is known as “Northoote-Trevelyan Report”. The report was pungent in its criticism when it says that:
‘in civil services comparable to lightness of work and the certainty of provision in case of retirement owing to bodily incapacity, furnish strong inducement to the parents and friends of sickly youth to endeavour to obtain for them employment in the service of the Government, and the extent to which the public are consequently burdened, first with the salaries of officers who are obliged to absent themselves from their duties on account of ill health, and afterwards with their pensions when they retire on the same plea, would hardly be credited by those who have not had opportunities of observing the operation of the system’. (See Gerald Rhodes : Public Sector Pensions, pp. 18-19.)
***
Viewed in the light of the present-day notions, pension is a term applied to periodic money payments to a person who retires at a certain age considered age of disability; payments usually continue for the rest of the natural life of the recipient. The reasons underlying the grant of pension vary from country to country and from scheme to scheme. But broadly stated they are : (i) as compensation to former members of the armed forces or their dependants for old age, disability, or death (usually from service causes), (ii) as old age retirement or disability benefits for civilian employees, and (iii) as social security payments for the aged, disabled or deceased citizens made in accordance with the rules governing social service programmes of the country. Pensions under the first head are of great antiquity. Under the second head they have been in force in one form or another in some countries for over a century but those coming under the third head are relatively of a recent origin, though they are of the greatest magnitude. There are other views about pensions such as charity, paternalism, deferred pay, reward for service rendered, or as a means of promoting general welfare (see Encyclopaedia Britannica, Vol. 17, p. 575). But these views have become otiose.
Summing up, it can be said with confidence that pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it is a measure of socio-economic justice which inheres economic security in the foil of life when physical and mental powers start ebbing corresponding to the aging progress and therefore, one is required to fall back on savings. One such saving in kind is when you gave your best in the heyday of life to your employer, in days of invalidity, economic security by way of periodical payment is assured. The term has been judicially defined as a stated allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service. Thus the pension payable to an employee is earned by rendering long and sufficient service and therefore can be said to be a deferred portion of the compensation for service rendered. In one sentence one can say that the most practical raison d’être for pension is the inability to provide for oneself due to old age. One may live and avoid unemployment but not senility and penury if there is nothing to fall back upon.
***
From the aforesaid analysis three things emerge : (i) that pension is neither bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to the statute, if any, holding the field, (ii) that the pension is not an ex gratia payment but it is a payment for the past service rendered; and (iii) it is a social-welfare measure rendering socio-economic justice to those who in the heyday of their life ceaselessly toiled for employers on an assurance that in their ripe old age they would not be left in the lurch. It must also be noticed that the quantum of pension is a certain percentage correlated to the emoluments earlier drawn. Its payment is dependent upon an additional condition of impeccable behaviour even subsequent to retirement. That is, since the cessation of the contract of service and that it can be reduced or withdrawn as a disciplinary measure.
***
In its strict sense a pension is not a matter of contract, and is not founded on any legal liability, it is a mere bounty or gratuity “springing from the appreciation and consciousness of the sovereign”, and it may be given or withheld at the discretion of the sovereign. It may be bestowed on such persons and on such terms as the law-making body of the Government prescribes, and it is, at the most, an expectancy granted by the law. The term “pension” has been compared and distinguished from “bonus”, “compensation”, “profits” and “retirement payment”. A pension fund is to be distinguished from an annuity fund derived in part from voluntary contributions under a statutory option to contribute or refrain from contributing.
***
In Union of India Vrs. P.N. Menon, (1994) 4 SCC 68 = AIR 1994 SC 2221 this Court observed that not only in the matters of revising the pensionary benefits, but also in respect of revision of scales of pay a cut-off date on some rational or reasonable basis has to be and can be fixed for extending the benefits. The cut-off date may be justified on the ground that additional financial outlay is involved or the fact that under the terms of appointment the employee was not entitled to the benefit of the pension on retirement. (See Union of India Vrs. Lieut E. Iacats, (1997) 7 SCC 334). Depending upon financial conditions a cut-off date can be fixed when a new pension scheme is being introduced. (See State of Rajasthan Vrs. Amrit Lal Gandhi, (1997) 2 SCC 342).”
8.7. In V. Sukumaran Vrs. State of Kerala, (2020) 8 SCC 106, it has been held that pension is succour for post-retirement period, which is not a bounty payable at will, but social welfare measure as post-retirement entitlement to maintain dignity of employee.
8.8. In State of Kerala Vrs. Padmanabhan Nair, AIR 1985 SC 356, it has been observed that pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but are valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment.
8.9. In Vasant Gangaramsa Chandan Vrs. State of Maharashtra, (1996) 10 SCC 148, Supreme Court of India held that pension is not bounty of the State. It is earned by the employee for service rendered to fall back, after retirement. It is a right attached to the office and cannot be arbitrarily denied.
8.10. In State of Punjab Vrs. Justice S.S. Dewan, (1997) 4 SCC 569, it has been held that conceptually, pension is a reward for past service. It is determined on the basis of length of service and last pay drawn. Length of service is determinative of eligibility and quantum of pension. The same view has also been reiterated in Dr. Uma Agarwal Vrs. State of U.P., AIR 1999 SC 1212.
8.11. Considering the meaning attached to the word ‘pension’, as stated above, and on analysis of the same, three things emerge:
(i) that the pension is neither bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to the statute, if any, holding the field;
(ii) that the pension is not an ex gratia payment but it is a payment for the past service rendered; and (iii) it is social welfare measure rendering social economic justice to those who in the “heydays” of their life ceaselessly toiled for employers on an assurance that in their ripe old age they would not be left in lurch.
It must also be noticed that the quantum of pension is a certain percentage correlated to the emoluments earlier drawn. Its payment is dependent upon additional condition of impeccable behaviour even subsequent to retirement. It is determined on the basis of length of service and last pay drawn. Length of service is determinative of eligibility and quantum of pension.
8.12. In U.P. Raghavendra Acharya Vrs. State of Karnataka, (2006) 9 SCC 630, the Supreme Court of India held that ‘pension’ is treated to be a deferred salary. It is not a bounty. It is akin to right of property. It is correlated and has a nexus with the salary payable to the employees as on date of retirement.
8.13. Similar view has also been taken by this Court in the case of Sujata Mohanty Vrs. Berhampur University, 2021 (II) OLR 362, in which one of us (Dr. B.R. Sarangi, ACJ) was the member.
8.14. In view of the law laid down as discussed above, it is loud and clear that a right accrued in favour of the respondent No.1 to get Pension-cum-Gratuity in the same manner in which five employees, situated similarly, stated to have been extended Pension-cum-Gratuity.
8.15. In the Constitution Bench decision in the case of Chairman, Railway Board Vrs. C.R. Rangadhamaiah, AIR 1997 SC 3828, the Supreme Court of India was considering the amendment brought into Rule 2544 of the Indian Railway Establishment Court, Vol. II (Fifth Reprint) which was given retrospective effect. The said Rule was amended by Notification No. G.S.R. 1143 (E) with effect from 1st January, 1973 and by Notification No. G.S.R. 1144 (E), the amendment was made with effect from 1st April, 1979. The said Court, in paragraphs 20 and 24 of the said Judgment held as follows:
“It can, therefore, be said that a rule which operates in futuro so as to govern future rights of those already in service cannot be assailed on the ground of retrospectively as being violative of Articles 14 and 16 of the Constitution, but a rule which seeks to reverse from an anterior date a benefit which has been granted or availed, e.g., promotion or pay scale, can be assailed as being violative of Articles 14 and 16 of the Constitution to the extent it operates retrospectively.
***
In many of these decisions the expressions ‘vested rights’ or ‘accrued rights’ have been used while striking down the impugned provisions which had been given retrospective operation so as to have an adverse effect in the matter of promotion, seniority, substantive appointment, etc. of the employees. The said expressions have been used in the context of a right flowing under the relevant rule which was sought to be altered with effect from an anterior date and thereby taking away the benefits available under the rule in force at that time. It has been held that such an amendment having retrospective operation which has the effect of taking away a benefit already available to the employee under the existing rule is arbitrary, discriminatory and violative of the rights guaranteed under Articles 14 and 16 of the Constitution. We are unable to hold that these decisions are not in consonance with the decisions in Roshan Lal Tandon (AIR 1967 SC 1889) (supra); B.S. Yadav (AIR 1981 SC 561) (supra) and Raman Lal Keshav Lal Soni (AIR 1984 SC 161) (supra).”
Such being the understanding of the term “pension”, if the present case is considered, it is noticed that IGIT has never cautioned about furnishing option. It appears IGIT has also not apprised the employees about the effect of Pension-cum-Gratuity Scheme vis-à-vis CPF-cum-Gratuity Scheme. It is also observed from the facts adumbrated by the learned Single Judge as culled out from the pleadings of the parties that when the representations of the employees were sent to the Government of Odisha for taking decision with regard to extension of pension, the same was turned down by the IGIT because the Government did not wish to take the liability of said IGIT so far as pension is concerned. This Court also finds that there is manifest violation of principles of natural justice.
9.1. In Union of India Vrs. P.N. Natarajan, (2010) 12 SCC 405, it has been observed as follows:
“11. We have considered the respective submissions and carefully scrutinized the records. Although, neither the learned Single Judge nor the Division Bench considered the issue of violation of the rules of natural justice, having given serious thought to the entire matter, we are convinced that the retiral benefits payable to the Respondents could not be revised to their disadvantage without giving them action oriented notice and opportunity of hearing. By virtue of the option exercised by them under Section 12A(4)(b) and consequential action taken by the competent authority to fix their pension etc., the private Respondents acquired a valuable right to accordingly receive the financial benefits and the same could not have been reduced without complying with one of the basic rules of natural justice that no one shall be condemned unheard. The rule of audi alteram partem has been treated fundamental to the system established by rule of law and any action taken or order passed without complying with that rule is liable to be declared void. [State of Orissa Vrs. Dr. Binapani Dei (Misa), AIR 1967 SC 1269 and Sayeedur Rehman Vrs. State of Bihar, (1973) 3 SCC 333].
It is not in dispute that before directing revision of the pension etc., payable to the private respondents, the Central Government did not give them action oriented notice and opportunity of showing cause against the proposed action. Therefore, it must be held that the direction given by the Central Government to revise the retiral benefits including the pension payable to the Respondents Was nullity.”
To contend that financial constraint may be apposite ground to deny the benefit of pension to the respondent No.1, while allowing five other employees of IGIT, who are claimed to be similarly situated, Sri Nirod Kumar Sahu, learned counsel for the appellants urged that Article 14 of the Constitution cannot be taken aid of to grant the relief prayed for by the respondent No.1.
10.1. Such a plea is unavailable for the model employer to raise in order to deny legitimate dues to its employees, who has opted out of its chosen option. In the case of All Manipur Pensioners’ Association Vrs. State of Manipur, Civil Appeal No. 10857 of 2016, vide Judgment dated 11.07.2019 of the Supreme Court of India reported in (2020) 14 SCC 625, it has been observed as follows:
“7. The short question which is posed for consideration before this Court is, whether in the facts and circumstances of the case, the decision of this Court in the case of D.S. Nakara (supra) shall be applicable or not, and in the facts and circumstances of the case and solely on the ground of financial constraint, the State Government would be justified in creating two classes of pensioners, viz., pre-1996 retirees and post-1996 retirees for the purpose of payment of revised pension and whether such a classification is arbitrary, unreasonable and violative of Article 14 of the Constitution of India or not?
***
7.2 It is not in dispute that the State Government has adopted the Central Civil Services (Pension) Rules, to be applicable to the State of Manipur. The State has also come out with the Manipur Civil Services (Pension) Rules, 1977. It is also not in dispute that subject to completing the qualifying service the Government servants retired in accordance with the pension rules are entitled to pension. Therefore, as such, all the pensioners form only one homogeneous class. Therefore, it can be said that all the pensioners form only one class as a whole. Keeping in mind the increase in the cost of living, the State Government increased the quantum of pension and even pay for its employees. The State Government also enhanced the scales of pension/quantum of pension with effect from 01.01.1996 keeping in mind the increase in the cost of living. However, the State Government provided the cut-off date for the purpose of grant of benefit of revised pension with effect from 01.01.1996 to those who retired post-1996 and denied the revision in pension to those who retired pre-1996. The aforesaid classification between these pensioners who retired pre-1996 and post-1996 for the purpose of grant of benefit of revision in pension is the subject matter of this appeal. As observed hereinabove, the aforesaid classification is sought to be justified by the State Government solely on the ground of financial constraint.
***
Even otherwise on merits also, we are of the firm opinion that there is no valid justification to create two classes viz. one who retired pre-1996 and another who retired post-1996, for the purpose of grant of revised pension. In our view, such a classification has no nexus with the object and purpose of grant of benefit of revised pension. All the pensioners form one class who are entitled to pension as per the pension rules. Article 14 of the Constitution of India ensures to all equality before law and equal protection of laws. At this juncture it is also necessary to examine the concept of valid classification. A valid classification is truly a valid discrimination. It is true that Article 16 of the Constitution of India permits a valid classification. However, a valid classification must be based on a just objective. The result to be achieved by the just objective presupposes the choice of some for differential consideration/treatment over others. A classification to be valid must necessarily satisfy two tests. Firstly, the distinguishing rationale has to be based on a just objective and secondly, the choice of differentiating one set of persons from another, must have a reasonable nexus to the objective sought to be achieved. The test for a valid classification may be summarised as a distinction based on a classification founded on an intelligible differentia, which has a rational relationship with the object sought to be achieved. Therefore, whenever a cut-off date (as in the present controversy) is fixed to categorise one set of pensioners for favourable consideration over others, the twin test for valid classification or valid discrimination therefore must necessarily be satisfied.
8.1. In the present case, the classification in question has no reasonable nexus to the objective sought to be achieved while revising the pension. As observed hereinabove, the object and purpose for revising the pension is due to the increase in the cost of living.
All the pensioners form a single class and therefore such a classification for the purpose of grant of revised pension is unreasonable, arbitrary, discriminatory and violative of Article 14 of the Constitution of India. The State cannot arbitrarily pick and choose from amongst similarly situated persons, a cut-off date for extension of benefits especially pensionary benefits. There has to be a classification founded on some rational principle when similarly situated class is differentiated for grant of any benefit.
8.2. As observed hereinabove, and even it is not in dispute that as such a decision has been taken by the State Government to revise the pension keeping in mind the increase in the cost of living. Increase in the cost of living would affect all the pensioners irrespective of whether they have retired pre-1996 or post-1996. As observed hereinabove, all the pensioners belong to one class. Therefore, by such a classification/cut-off date the equals are treated as unequals and therefore such a classification which has no nexus with the object and purpose of revision of pension is unreasonable, discriminatory and arbitrary and therefore the said classification was rightly set aside by the learned Single Judge of the High Court. At this stage, it is required to be observed that whenever a new benefit is granted and/or new scheme is introduced, it might be possible for the State to provide a cut-off date taking into consideration its financial resources. But the same shall not be applicable with respect to one and single class of persons, the benefit to be given to the one class of persons, who are already otherwise getting the benefits and the question is with respect to revision.
In view of the above and for the reasons stated above, we are of the opinion that the controversy/issue in the present appeal is squarely covered by the decision of this Court in D.S. Nakara Vrs. Union of India, (1983) 1 SCC 305. The decision of this Court in D.S. Nakara Vrs. Union of India, (1983) 1 SCC 305 shall be applicable with full force to the facts of the case on hand. The Division Bench of the High Court has clearly erred in not following the decision of this Court in D.S. Nakara Vrs. Union of India, (1983) 1 SCC 305 and has clearly erred in reversing the judgment and order of the learned Single Judge. The impugned judgment and order [State of Manipur Vrs. All Manipur Pensioners’ Assn., 2016 SCC OnLine Mani 22 passed by the Division Bench is not sustainable and the same deserves to be quashed and set aside and is accordingly quashed and set aside. The judgment and order [All Manipur Pensioners’ Assn. Vrs. State of Manipur, 2005 SCC OnLine Gau 118 = (2005) 3 Gau LR 384 passed by the learned Single Judge is hereby restored and it is held that all the pensioners, irrespective of their date of retirement viz. pre-1996 retirees shall be entitled to revision in pension on a par with those pensioners who retired post-1996. The arrears be paid to the respective pensioners within a period of three months from today.”
10.2. The Review Petition being Diary No. 29471 of 2019 arising out of Civil Appeal No.10857 of 2016 (All Manipur Pensioners’ Association Vrs. State of Manipur) filed at the
behest of State of Manipur has been dismissed by passing following Order on 20.11.2019:
“Delay condoned.
We have perused the Review Petition and record of the appeal and are convinced that the order, of which review has been sought, does not suffer from any error apparent warranting its reconsideration. The Review Petition is, accordingly, dismissed.”
10.3. It does require discussion in this perspective that the pleading of the appellants at paragraph 12 of the writ appeal reveals that the IGIT on receipt of applications from the twenty employees including that of the respondent No.1 for consideration of their respective cases for inclusion in the Pension-cum-Gratuity Scheme instead of CPF-cum-Gratuity Scheme, placed the same before the Board of Governors, which decided as follows in the 47th Meeting held on 25.09.2010:
“The individual cases have been examined and put up in Annexure-1 for perusal of the Board. Board advised the Director to request the Government for consideration to include in Pension-cum-Gratuity Scheme.”
10.4. Sri Umakant Sahoo, learned Advocate for the respondent No.1 has pointed out by referring to “Extract of the minutes of the 40th Meeting of the Board of Governors, IGIT, Sarang held on 30.09.2004 at 11.00 a.m. in the Office Chamber of the Hon’ble Minister, Industries, R.D. & Law, Government of Odisha, BBSR” vide Annexure-5 of the writ appeal that conscious decision was taken as follows:
“F.1/40. Implementation of Pension-cum-Gratuity Scheme.—
Item on introduction of Pension-cum-Gratuity Scheme was discussed in detail. It was resolved that the existing employees may be allowed Pension/CPF as per the option already exercised. However, fresh employees to be rectruited henceforth should be covered under CPF-cum-Gratuity without any scope after opting towards Pension Scheme. The institute may request Government of Odisha to allocate required funds to extend Pensionary benefits in the annual budget as like UCE, Burla and introduce Scheme after obtaining approval of Government.”
10.5. The learned counsel for the respondent No.1, therefore, went on to argue that the decision restricting change of option was respecting “fresh employees recruited” after 30.09.2004, but there was no inhibition as regards existing employees with regard to change of option.
10.6. Aforesaid decisions in the Meetings are germane factors to construe that the IGIT has never contemplated to constrict change of option so far as existing employees as on 30.09.2004 are concerned, and thereby, the IGIT has not shown any intention to refuse the claim of the respondent No.1 for changing option to Pension-cum- Gratuity Scheme much prior to his retirement, i.e., 15th April, 2005. However, for confirmation, the Board sought to refer the matter to the Government of Odisha. Vide Industries Department Letter No. V.FEII-27/2011-2543/I, dated 14.02.2011 addressed to the Director, IGIT, Sarang, it has been directed as follows:
“From
Shri A. Mallick
Deputy Secretary to Government
To
The Director, IGIT, Sarang
Sub.: Inclusion of employees in Pension-cum-Gratuity Scheme instead of Pension-cum-Gratuity Scheme.
Sir,
I am directed to invite a reference to your Letter No.18, dated 12.01.2011 on the above subject and to say that State Government have nothing to say about the inclusion of employees who have opted for CPF-cum-Gratuity into Pension-cum-Gratuity Scheme now, as this Department will not bear any financial liability on it. Moreover, as per stipulated of the Scheme, option once exercised is final and it should not be reopened again.
Yours faithfully,
Sd/-
Deputy Secretary
to Government”
10.7. Taking cue from the aforesaid judgment of the Hon’ble Supreme Court of India in All Manipur Pensioners Association (supra), this Court has no doubt in mind that the invidious distinction sought to be created by the IGIT between the five employees and the present respondent No.1 has no sanctity and such plea has to be rejected. The well-founded reasons on the analysis of facts by the learned Single Judge in the Judgment dated 25.01.2023 in W.P.(C) No.2317 of 2018 do not warrant intervention of this Court in the instant intra-Court appeals.
The Hon’ble Supreme Court of India in the case of N. Ramachandra Reddy Vrs. State of Telengana, (2019) 11 SCR 792 delineated the scope of intra-Court appeals by making following observation:
“43. Further, in the case of Management of Narendra & Company Pvt. Ltd. Vrs. Workmen of Narendra & Company, (2016) 3 SCC 340, while considering the scope of the intra court appeal, this Court has held that, unless Appellate Bench concludes that findings of the learned Single Judge are perverse, it shall not disturb the same.”
11.1. In Management of Narendra & Company Pvt. Ltd. Vrs. Workmen of Narendra & Company, (2016) 3 SCC 340 it has been observed as follows:
“Be that as it may, in an intra-court appeal, on a finding of fact, unless the appellate Bench reaches a conclusion that the finding of the Single Bench is perverse, it shall not disturb the same. Merely because another view or a better view is possible, there should be no interference with or disturbance of the order passed by the Single Judge, unless both sides agree for a fairer approach on relief.”
11.2. This Court is, therefore, of the considered opinion that the present writ appeal does not warrant indulgence in the Judgment of the learned Single Judge in the teeth of aforesaid principle laid down.
CONCLUSION:
Taking into consideration the position that the Division Bench does not sit in re-appreciating the Judgment of the learned Single Judge in an intra-Court appeal on finding of fact, unless it is demonstrated by the appellants that the conclusion on set of facts based on material on record arrived at by the learned Single Judge is perverse. Thus, this Court does not feel it expedient to disturb the findings settled by the learned Single Judge.
12.1. In the case of Shri Anand Dash and Seven others Vrs. State of Orissa and others, 2014 (Supp.-I) OLR 754, this Court held as follows:
“16. In the case at hand, as already stated above, all the petitioners joined in their due assignment on 02.04.2005 by which date, the amended Rules were not existing. The said amended Rules, which were introduced by Notification dated 31.08.2007 and 17.09.2005 there could not have been given retrospective effect by stating that they will come into operation from 01.01.2005, which is prior to the date, when the petitioners joined in their new assignments.
We are, therefore, of the considered view that the said amendments brought to the General Provident Fund (Odisha) Rules, 1938 and the Orissa Civil Service (Pension) Rules, 1992 will not apply to the petitioners, who will be governed by the said Rules as it existed on the date of their joining in service. We also find that the opposite parties - State has discriminated the petitioners by allowing the benefits under the old Pension Rules and General Provident Fund (Odisha) Rules in the case of 13 regularly recruited OES officers, though they have been appointed on 14.02.2005 and joined the Government much after 01.01.2005. The said action on the part of the State also amounts to discrimination violating Articles 14 & 16 of the Constitution of India.
We, therefore, quash the impugned orders by which the representations of the petitioners were rejected arbitrarily inasmuch as without assigning any reason in support of such rejection and direct that the petitioners will be governed by the provisions of the old General Provident Fund (Odisha) Rules, 1938 and the Odisha Civil Services (Pension) Rules, 1992 as it stood prior to the amendments brought into the same and will be entitled to all the benefits, which were provided thereunder prior to such amendments. The amendments brought into the above two Rules, will have prospective effect from the date, such amendments were notified.”
12.2. The decision of this Court in Anand Dash (supra) was carried before the Supreme Court of India in Special Leave Petition (C) Nos. 35462-35464 of 2014, which stood dismissed vide Order dated 09.03.2018 with an observation that there exists no cogent reason to entertain the petitions/appeal and that the judgment impugned does not warrant any interference.
12.3. In Krishena Kumar Vrs. Union of India, AIR 1990 SC 1782 = (1990) 4 SCC 207, the Hon’ble Supreme Court held as follows:
“30. In Nakara, (1983) 1 SCC 305 it was never held that both the pension retirees and the P.F. retirees formed a homogeneous class and that any further classification among them would be violative of Article 14. On the other hand the Court clearly observed that it was not dealing with the problem of a ‘fund’. The Railway Contributory Provident Fund is by definition a fund. Besides, the Government’s obligation towards an employee under C.P.F. 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 crystallized 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 obligation 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 P.F. retirees. This being the legal position the rights of each individual P.F. retiree finally crystallized on his retirement where after no continuing obligation remained while on the other hand, as regards 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 P.F. retirees they would not be so adversely affected ipso facto. It cannot, therefore, be said that it was the ratio decidendi in Nakara that the State’s obligation towards its P.F. 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 this case. Nakara cannot, therefore, be an authority for this case. Stare decisis et non guieta movere. To adhere to precedent and not to unsettle things which are settled. But it applies to litigated facts and necessarily decided questions. Apart from Article 141 of the Constitution of India, the policy of courts is to stand by precedent and not to disturb settled point. When court has once laid down a principle of law as applicable to certain state of facts, it will adhere to that principle, and apply it to all future cases where facts are substantially the same. A deliberate and solemn decision of court made after argument on question of law fairly arising in the case, and necessary to its determination, is an authority, or binding precedent in the same court, or in other courts of equal or lower rank in subsequent cases where the very point is again in controversy unless there are occasions when departure is rendered necessary to vindicate plain, obvious principles of law and remedy continued injustice. It should be invariably applied and should not ordinarily be departed from where decision is of long standing and rights have been acquired under it, unless considerations of public policy demand it. But in Nakara it was never required to be decided that all the retirees formed a class and no further classification was permissible.
The next argument of the petitioners is that the option given to the P.F. employees to switch over to the pension scheme with effect from a specified cut-off date is bad as violative of Article 14 of the Constitution for the same reasons for which in Nakara the notification were read down. We have extracted the 12th option letter. This argument is fallacious in view of the fact that while in case of pension retirees who are alive the Government has a continuing obligation and if one is affected by dearness the others may also be similarly affected. In case of P.F. retirees each one's rights having finally crystallized on the date of retirement and receipt of P.F. benefits and there being no continuing obligation thereafter they could not be treated at par with the living pensioners. How the corpus after retirement of a P.F. retiree was affected or benefitted by prices and interest rise was not kept any track of by the Railways. It appears in each of the cases of option the specified date bore a definite nexus to the objects sought to be achieved by giving of the option. Option once exercised was told to have been final. Options were exercisable vice versa. It is clarified by Mr. Kapil Sibal that the specified date has been fixed in relation to the reason for giving the option and only the employees who retired after the specified date and before and after the date of notification were made eligible. This submission appears to have been substantiated by what has been stated by the successive Pay Commissions. It would also appear that corresponding concomitant benefits were also granted to the Provident Fund holders. There was, therefore, no discrimination and the question of striking down or reading down clause 3.1 of the 12th Option does not arise.”
12.4. It has been made clear in Bank of Baroda Vrs. G. Palani, (2022) 5 SCC 612 that accrued right cannot be taken away retrospectively and even otherwise also it is held to be arbitrary and irrational. Mere furnishing of option would not take away vested right and subsequent craving for change of option to come back to the Pension-cum-Gratuity Scheme should not have been denied to the respondent No.1. As is unequivocal from All Manipur Pensioners’ Association Vrs. State of Manipur, Civil Appeal No. 10857 of 2016, vide Judgment dated 11.07.2019 of the Supreme Court of India reported in (2020) 14 SCC 625 that financial constraint cannot be a valid ground to deny a person his legitimate benefit claiming under the relevant Pension-cum-Gratuity Scheme. Technical niceties, as embargo, cannot be adhered to by model employer for whom the employee had devoted time and energy and also portion of his life, which he never can get back.
12.5. It is fruitful to refer to State of Rajasthan Vrs. O.P. Gupta, (2022) SCC OnLine SC 1248, wherein it has been stated as follows:
“27. In this case, the Respondent-Writ Petitioner is claiming pension, which is a life long benefit. Denial of pension is a continuing wrong. This Court cannot also be oblivious to the difficulties of a retired employee in approaching the Court, which could include financial constraints.
It is settled law that when financial rules framed by the Government such as Pension Rules are capable of more interpretations than one, the Courts should lean towards that interpretation which goes in favour of the employee.”
12.6. Ergo, there being no scope to show indulgence in the finding of fact by the learned Single Judge, the writ appeal is liable to be dismissed.
Sri Nirod Kumar Sahu, learned Advocate for the appellants strenuously attempted to persuade this Court that this case does not fall within the scope of Article 14 and doing so would open up flood gates for other inasmuch as the claim of the respondent No.1 was rejected along with 19 others. It is contended by him that the case of respondent No.1 has rightly been rejected by the appellants as the option to come back to the fold of Pension-cum-Gratuity Scheme could not be said to have been in parity with that of five employees whose such claim was allowed. Repelling such contention of Sri Nirod Kumar Sahu, the learned counsel for the respondent No.1, Sri Umakant Sahoo, Advocate has reiterated submissions by urging that the cut-off date being not fixed for reverting to original Scheme before the retirement is just and proper and the same could not have been objected to by the appellants.
13.1. This Court finds the argument of Sri Umakant Sahoo plausible in terms of ratio laid down in University of Delhi Vrs. Smt. Shashi Kiran & Ors., etc., (2022) 7 SCR 957, wherein it has been stated thus:
“21. It was against these three sub-categories coming from the same category of employees that the argument of discrimination was considered by the Division Bench. Such was not the case in Krishena Kumar, (1990) 4 SCC 207 or Rajasthan Rajya Vidyut Vitran, (2015) 12 SCC 51 = (2014) 13 SCR 492. The matter was further considered by the Division Bench in the context of the employees of educational institutions such as IITs, who are directly under the Central Government, just as the employees of the University, which is a Central University. If the option was allowed to be exercised by granting extension to the employees of the other educational institutions, the Division Bench did not find any reason why similar choice/option could not be given to the employees in Shashi Kiran batch of cases.
Additionally, the feature that has been presented through the documents which have subsequently come on record is that even with respect to the employees of Insurance Corporations similar options and extensions were granted.
The differential treatment afforded to those 2469 employees as against the employees in Shashi Kiran batch of cases, was not founded on any rationale. No justifiable reason was coming forth. If those 2469 employees could be afforded chance to exercise an option of switchover to GPF, even though they had consciously opted to be under CPF, on principle of parity or equality, the case was certainly made out.
We may now consider the matter from the perspective of financial impact if the decision of the Division Bench is affirmed.
According to the notification dated 01.05.1987, the employees joining the service after 01.01.1986 would always be under GPF. With respect to those who were in service on 01.01.1986, said employees would be deemed to have “come over” to GPF unless an option to continue to be under CPF was consciously exercised before the cut-off date. Thus, when the Scheme was framed and was sought to be implemented, the concerned authorities must have taken into account the entire magnitude such as, the number of employees and the likelihood of impact on the management of the fund, so that reasonable returns can be effected by way of pension upon retirement of such persons. Going by the intent of the notification, those who were to opt for CPF, were an exception and the general rule was that everybody after 01.01.1986 would normally be covered by GPF. It is in this context that the number of original petitioners in Shashi Kiran batch of cases has to be seen. We are concerned with only 75 persons. On the other hand, the bulk of people namely 2469 employees were granted the choice of reverse switchover and they were allowed all the benefits under GPF. It can reasonably be said that when the notification dated 01.05.1987 was issued, the authorities were conscious of the possibility that all the employees may ‘come over’ to GPF. With that possibility in mind, the fund was constituted and the affairs were arranged. The shift of those 75 employees would not in any way affect the strength and the character of the fund if a direction that the entire contribution made by the authorities be returned with reasonable rate of interest is issued. These 75 petitioners had approached the Court in the year 2010. At this length of time, it is not as if any floodgates are going to open and there will be drain on the resources of the State. A direction can, therefore, be issued, as was done by the learned Single Judge in paragraph 20 of his Judgment in R.N. Virmani batch of cases and which aspect was mentioned in the letter dated 23.01.2017 referred to in paragraph 8 hereinabove, for recouping the contribution under CPF with 8% simple interest per annum.”
13.2. Considering the matter in the aforesaid perspective, it does not appeal to this Court that the argument of Sri Nirod Kumar Sahoo, learned Advocate for appellants can be found to be tenable. Out of the twenty employees who wished to withdraw their options to revert to the Pension-cum-Gratuity Scheme, only one employee, i.e., respondent No.1 has been pursuing the matter. As observed by the Hon’ble Supreme Court in Shashi Kiran, (2022) 7 SCR 957 (supra), this Court does not see any rationality in rejecting the option of the respondent No.1 to come back to the fold of Pension-cum-Gratuity Scheme on the ground of parity attracting the provisions of Article 14 of the Constitution of India.
A writ appeal is an appeal on principle where the legality and validity of the Judgment and/or Order of the Single Judge is tested and it can be interfered with only when there is a patent error on the face of the record or the judgment is against established or settled principle of law. If two views are possible and a view, which is reasonable and logical, has been adopted by a Single Judge, the other view, howsoever appealing may be to the Division Bench; it is the view adopted by the Single Judge, which would, normally be allowed to prevail. If the discretion has been exercised by the Single Judge in good faith and after giving due weight to relevant matters and without being swayed away by irrelevant matters and if two views are possible on the question, then also the Division Bench in writ appeal should not interfere, even though it would have exercised its discretion in a different manner, were the case come initially before it. The exercise of discretion by the Single Judge should manifestly be wrong, which would then give scope for interference by the Division Bench. (Ref.: Anindita Mohanty Vrs. Senior Regional Manager, H.P. Co. Ltd., Bhubaneswar, 2020 (II) ILR-CUT 398).
14.1. Since the learned Single Judge has elaborately discussed the factual matrix with well-reasoned order placing reliance on the evidence available on record, the Judgment dated 25.01.2023 delivered in W.P.(C) No.2317 of 2018 does not suffer infirmity in law so as to warrant interference in exercise of powers under Article 4 of the Odisha High Court Order, 1948 read with Clause 10 of the Letters Patent constituting the High Court of Judicature at Patna and Rule 6 of Chapter-III of the Rules of the High Court of Odisha, 1948.
Keeping abreast of the scope of intra-Court of appeal as propounded by the Hon’ble Supreme Court as well as this Court, for the reasons stated above and the discussions made in the foregoing paragraphs, no infirmity in the decision of the learned Single Judge vide Judgment dated 25.01.2023 is perceived and, therefore, this Court declines to show indulgence in the said Judgment in this writ appeal.
In the result, this writ appeal stands dismissed, but in the circumstances, there shall be no order as to costs.
……………………………