The Government of India vs T.R. Raghavan

D.V. Shylendra Kumar, J.-The Government of India has approached this Court invoking jurisdiction under Article 227 of the Constitution of India being aggrieved by the order dated 20th February, 2003 passed in original Application No. 747 of 2002.

Under the impugned order, the Tribunal has directed the petitioner to extend certain benefits to the applicant before it, in terms of a Scheme which was in vogue in the Department of Space known as the Contributory Health Services Scheme (CHSS). For the purpose of issuing such direction, the Tribunal found fault with a particular provision of the Scheme namely, paragraph 2.3.2 which sought to exclude certain type of employees or former employees of the department from admission to the benefit of the Scheme. While holding this provision which excludes certain employees from such benefit as discriminatory and as such was required to be struck down, the Tribunal quashed a communication dated 24th July, 2002 issued by the petitioner-department to the applicant indicating that it is not possible to extend the benefits under the Scheme.

Brief facts leading to the present writ petition are as under:

The original applicant before the Tribunal had joined the department of space, a wing of the Government of India as an Engineer way back in the year 1968 that is on 6-1-1968. It appears around the year 1985 the applicant went on deputation to an organisation known as National Building Construction Corporation Limited (NBCC), an undertaking of the Government of India. Ultimately, the applicant opted for being absorbed as Chief Engineer with M/s. NBCC with effect from 1-7-1985. It further transpires that the applicant took voluntary retirement from M/s. NBCC also with effect from 30-10-1992.

It appears, the applicant had requested the petitioner organisation that he should be conferred or extended the benefits under the health services on and after the year 2000 as he had become entitled to receive 1/3rd of the commuted value of the pension from this period onwards and as such had sought for the extension of the Scheme for himself and his wife. It is due to the denial of the extension of this benefit the applicant had approached the Tribunal.

A few more facts relating to the Scheme are, the Scheme is in vogue for extending certain benefits to the employees of the department particularly for taking care of their health needs and is a contributory self-supporting Scheme. The employees who joined the Scheme are required to contribute a percentage of the salary during their membership to the Scheme and are entitled to enjoy benefits under the Scheme.

The benefits under the Scheme is also available to former employees on retirement. Paragraph 2.2.5, sub-paragraph (iii) of the Scheme reads as under:

"(iii) Retired employees who are engaged in any trade, business or profession or are employed in any capacity either under Government or otherwise shall also be eligible to the benefits of the Scheme subject to payment of additional contribution prescribed from time to time. Such retired employees can also opt out of the Scheme while in employment or engaged in any trade, etc., and may join it after final retirement from such employment, occupation or trade. The coverage will be limited to the employees and spouse only. Additional defendants falling under the definition of ''family'' will be included only on payment of contributions equal to the unsubsidised cost of the Scheme per dependent".

It is claiming benefit under the latter category of two situations contemplated in sub-paragraph (iii) of paragraph 2.2.5 that the original applicant had sought for readmission to the benefits of the Scheme on being entitled to draw pension at 1/3rd of the commuted value.

The petitioner-department had principally denied the benefit to the applicant on the basis of paragraph 2.3.2 which reads as under:

"Employees who take up employment in Public Sector Undertaking/Autonomous Bodies on permanent absorption basis are not eligible for CHSS facilities to DOS although such employees receive pension from Government of India".

Is in the way of the applicant for claiming such benefit.

The subsequent paragraph 2.3.2 referred to above indeed seeks to deny the benefits of the Scheme to the class of employees who took up employment under the Public Sector Undertakings or Autonomous Bodies on permanent absorption.

However, it was contended on behalf of the applicant before the Tribunal that this paragraph which seeks to exclude the benefit to a class of former employees of the department particularly for admission to the benefits under the Scheme, is discriminatory as it does not make a reasonable classification for the purpose of denying the benefit. The Tribunal, placing reliance on the ratio laid down by the Supreme Court in D.S. Nakara and Others v. Union of India, AIR 1983 SC 130, and on the same lines of reasoning held that paragraph 2.3.2 is discriminatory and quashed it and consequently directed the petitioner-department to extend the benefit to the applicant. That is how the present writ petition is presented.

We have heard Sri M.S. Padmarajaiah, learned Senior Counsel appearing for the petitioner. Learned Counsel vehemently submitted that the Tribunal is in error in not only quashing paragraph 2.3.2 of the Scheme as discriminatory but also in quashing the impugned communication and issuing further consequential direction. It is the submission of the learned Counsel that the applicant before the Tribunal was one amongst a distinct class of employees who went out of the organisation and who had totally severed their relationship with the department on being absorbed in the other organisation. In the instant case, the submission of the learned Counsel is that the applicant at the time of the absorption to NBCC had also opted for 100% commutation of the pension and as such the relationship with the petitioner and the applicant came to be severed in all respects; that the applicant went out of the contemplation of the department for all purposes and such a person cannot seek any benefit under the Scheme. Learned Counsel has submitted that the factum of the applicant receiving 1/3rd of the pension payable in the normal course after a period of 15 years from the date on which he had accepted or opted for total commutation is not a circumstance to hold that the relationship between the department and the former employee to have revived in any manner for enabling the person to claim the benefits under the Scheme.

The submission of the Counsel is that assuming for the purpose of receiving such 1/3rd value of the pension the applicant is to be treated as a pensioner and a former employee of the department under the Pension Rules he does not become a person who can be said to be covered or a person who can be called as a retired employee to claim the benefit of paragraph 2.2.5, sub-paragraph (iii).

Learned Counsel placing reliance on the ratio laid down in the decision in A.K. Bindal v. Union of India, AIR 2003 SC 2189, as enunciated by the Supreme Court in this case submits that the mere fact that the applicant had become a pensioner under the pension rules does not automatically entitle him for the benefits under the Scheme. Learned Senior Counsel has also placed reliance and has drawn a parallel to the classification that has been made in this decision by the Supreme Court amongst the two classes of former employees, namely, those who go out of employment on taking voluntary retirement and who totally seceded all relationships with their former employer and other employees who retired in the normal course. Learned Senior Counsel submits that in the present situation with the applicant opting for absorption with NBCC and also at the same time opting for 100% commutation of the pension is akin to the Golden Hand Shake referred to and elaborated in Bindal''s case, and, therefore, for all purposes the relationship is severed once and for all and there is no question of such an employee striving to revive the relationship on the premise that such an employee becomes entitled to claim benefits under the Scheme by seeking readmission to the Scheme on receipt of 1/3rd of pension after 15 years from such date.

The other submission of the learned Senior Counsel is that for an employee or a former employee who continues to receive the benefits under the Scheme there should be continuous contribution and if there is stoppage of such contribution then such retired employee cannot later come back and try to revive the relationship and seek for readmission to the benefits of the Scheme.

We shall deal with the latter submission first. We are unable to accept the submission that the former employee who had not contributed to the Scheme continuously or where there was an interval in contributions, such employee cannot rejoin the Scheme under any circumstance. This is because, paragraph 2.2.5, sub-paragraph (iii) contemplates precisely such a situation of a retired employee who in fact has opted for being absorbed in any other undertaking, Government or otherwise, is also entitled to the benefits under the Scheme not only on continuity of the membership notwithstanding the absorption in the other organisation but also in a situation where he had not continued to be a member of the Scheme but after retirement in the other organisation, opts to rejoin the Scheme. The only condition that is required to be fulfilled is that such a person should resume his contribution and also the additional contribution if so stipulated under the Scheme as fixed from time to time. The quantum of contribution might have varied from time to time but whatever contribution is required to be made by such a person at the time when he seeks to rejoin the Scheme should be contributed and this is the only condition to rejoin the Scheme. It may be a fact that such an employee had not made contribution for some period and during which period he had been denied any benefit. But by opting to rejoin the Scheme on payment of contribution or additional contribution as is payable on the date of his rejoining the Scheme, such former employee is entitled for being continued as a member seeking benefit under the Scheme for himself and his spouse on such payment.

We have no doubt that paragraph 2.2.5, sub-paragraph (iii) extends such a benefit to a former employee or a retired employee. We are unable to accept the submission of the learned Senior Counsel that an employee of this nature though may have revived some relationship as a former employee or a pensioner for the purpose of the pension Scheme does not so remain for the purpose of readmission to the Scheme. We say so because the very health Scheme contemplates such a situation and not because such a situation is contemplated under the pension Scheme.

The other submission is with regard to the validity of paragraph 2.3.2 of the Scheme and the pronouncement of the Tribunal that it is violative of Article 14 of the Constitution.

Two principles of interpretation are attracted and can be pressed into service for examining the correctness of the understanding of the provisions of the Scheme by the Tribunal. The first principle is that while interpreting and understanding a provision which is capable of being understood in two ways, an interpretation which renders the provision legal and constitutional should be preferred and any interpretation which renders a provision unconstitutional or even as one denying an equal opportunity should be avoided. Even on the principle of equality of opportunity and as to whether the classification that is sought to be made under paragraph 2.3.2 is a reasonable one, we are of the view that it has no intelligible nexus to the object of the Scheme which is to extend certain benefits to employees and former employees; in seeking to exclude the benefit to the class of employees contemplated in paragraph 2.3.2. We say so because the main object of the Scheme is to extend certain benefit to the employees and former employees of the organisation. Paragraph 2.2.5, sub-paragraph (iii) expressly excludes such benefits to retired employees and who have taken employment elsewhere. The object is to extend the benefit. The benefit is provided on making the necessary contribution. If a person claims the benefit even without making the contributions it can be said that exclusion of such persons from the class of persons who are entitled to the benefit is a reasonable classification. Though persons who are contemplated in paragraph 2.2.5, sub-paragraph (iii) are also are prepared for making the contribution and nevertheless they are sought to be denied the benefit of admission or rejoining the Scheme will definitely amount to making a classification without an intelligible nexus to the object of the Scheme. Therefore, we are in agreement with the view expressed by the Tribunal that such a classification is not a reasonable classification and on the principle laid down by the Supreme Court in Nakara''s case, the classification cannot be sustained. It suffers from the vice of discrimination. Therefore, quashing of paragraph 2.3.2 is justified.

The other principle that is attracted is that when an earlier provision of a statutory Scheme extends a certain benefit and a subsequent provision seeks to deny or take away the benefit and if a conflict arises in giving effect to the provisions of the Scheme, the provision should be so understood as to advance the object of the Scheme and the latter provision which appears to be in conflict with the earlier provision (advancing the object of the Scheme) should give way to the earlier provision. While in sub-paragraph (3) of para 2.2.5, a clear benefit is extended to persons like the applicant before the Tribunal, the subsequent provision in para 2.3.2 seeks to exclude the same and as such presents a conflict. The conflict should be so resolved and the provisions to reconciled that the benefit is rather extended than denied.

We are also of the view that the decision relied upon by the learned Senior Counsel in Bindar''s case, does not further the case of the petitioner in the present situation. The argument advanced based on certain decision rendered by the Administrative Tribunal, Chandigarh Bench in 2003(3) ATJ 83 also fails for the reason indicated above. We have already noticed a classification as made in para 2.3.2 is a classification which is not sustainable, which is discriminatory and as such suffers from the vice of being violative of Article 14 of the Constitution of India.

In the circumstance, we find no reason to interfere with the order passed by the Tribunal. We find no merit in the writ petition for interference under Article 227 of the Constitution. Writ petition is accordingly dismissed.