Holding

The Supreme Court held that the 3 October 1986 Government Order validly confers pensionary benefits on the appellants who retired before 9 June 1981 and is not violative of Article 177, thereby entitling them to pension.

Summary

The appellants, former drivers and conductors of the Jammu & Kashmir State Road Transport Corporation, served for 30‑40 years as temporary employees and retired before 9 June 1981. A 1981 notification amended Article 177 of the J&K Civil Service Regulations to grant pension to temporary servants with at least 20 years of service, but the State later limited the benefit to those who retired after that date. After representations, the State issued a Government Order on 3 October 1986 extending pension rights to all temporary employees, including those who had retired earlier. The State refused to honour the order for the appellants, arguing it was not retrospective and violated Article 177. The High Court single judge granted the pension, the State appealed, and the Division Bench set aside the order. The Supreme Court allowed the appeal, holding that the 1986 order validly confers pension benefits on the appellants, is not violative of Article 177, and that denying it would breach Article 14 and the doctrine of legitimate expectation.

Issues considered

Whether the Government Order dated 3 October 1986 is applicable to temporary employees who retired before 9 June 1981.
Whether the 3 October 1986 order is violative of Article 177 of the Jammu & Kashmir Civil Service Regulations.
Whether the denial of pension to such employees violates Article 14 of the Constitution of India and the doctrine of legitimate expectation.
Whether the 3 October 1986 order operates retrospectively.

Legislation cited

Constitution of Indias. 14

Subjects

pensiontemporary employeelegitimate expectationArticle 14Article 177retrospective orderdiscriminationcivil service regulationsJammu & Kashmiradministrative law

Judgment

A OHAN RAJ AND ORS.
v.
STATE OF JAMMU AND KASHMIR AND ORS.

MARCH 23, 1998

B [K. VENKATASWAMI AND A.P. MISRA, JJ.)

Service law :

Pension-Denial of-To appellants tempormy employees with 30-40
C years of service-Notification dated 9. 6.1981-Pension payable to temporary
employees with 20 years of service Appellants excluded, since retired before
the date of notificaiton-By further G. 0. dated 3.10.1986 all the tempormy
employees granted pension-Held, under the facts, appellant entitled to
pensionary benefit-The plea of state that G.O. dated 3. I0.1986 is violative
D of Article 177 of J. & K. Civil Service Regulations, deprecated and the G. 0.
held as not violative-Denial of pensionary benefit without any sound
reasoning or any justifiable differentia is against the spirit of constitution-
Constitution of India, 1950. Directive Principles-Constitution of Jammu &
Kashmir 1957 Section 124-.Jammu & Kashmir Civil Service Regulations-
Artic/e 177.
E
Constitution of India, 1950-Article 14-Cut off date-Different criteria
for enforcement of notification entitling pensionary benefit between similarly
place'd employees-Held, there is no justifiable criteria for the· state
Government to draw the line between those who retired earlier and those
who retired after the date of notification.
F
Administrative law :

Subordinate legislation-Attempt of State Government to get its own
order held illegal in judicial review-Held, is inappropriate.

G Doctrine of legitimate Expectation-Person in service for long period
earns his legitimate expectation.

Interpretation of Statute-Internal aids- 'Heading'-Consideration of

The appellants, employees of erstwhile undertaking, who were taken
H on deputation with Road Transport Corporation, opted for temporary service
404
OHAN RAJ 1·. STA TE 405
in the year 1969, 1972 and 1979. They retired before 9.6.1981 after putting A
in service of 30-.tO years. Vide notification dated 9.6.81, a temporary
Government servant with 20 years of service was given pensionary benefit
by an amending Article 177 of Jammu & Kashmir Civil Service Regulation.

The respondent State, after the above notification demarcated lines to
give pensionary benefits to only those who retired after 9.6.81 and thus the B
appellants were excluded from this benefit. As a result of various
-< representations of the appellants, pensionary benefit was granted to all the
temporary employees of the earstwhile undertaking, vide G.O. dated 3.10.1986.

The appellants were refused the grant of pension which they claimed
on the basis of G.O. dated 3.10.1986. But the respondent State denied it on
c
the ground that G.0. dated 3.10.1986 is not applicable to those who retired
before 9.6.1981.

Against the stand of the state, the appellants filed a writ petition before
High Court, which was allowed by Single judge directing the State to grant
~
D
pensionary benefits under the order dated 3.10.1986. L.P.A. filed by State
~
against the above order, was allowed on the ground that G.O. dated 3.10.1986
was contrary to the service conditions and the law governing the appellants.

In appeal to this court, the respondent State contended that the appellants
were not entitled to pensionary benefits because G.O. dated 3.10.1986 has E
to be read with notification dated 9.6.1981; hence the benefit under it can
only to granted to those who retired after 9.6.1981 and that the G.O. dated
3.10.1986 was not retrospective in operation. Alternatively it was contended
that the G.O. dated 3.10.1986 is in violation of Article 177 of Jammu and
Kashmir Civil Service Regulation.
f"> F
Allowing the appeal, this Court

HELD : I. I. The appellants are entitled to the pensionary benefits in
terms of and as held by Single judge of the High Court. 1414-BI

1.2. There is no substance in the contention of the respondents that
the G.O. dated 3.10.86 when read with the earlier notification dated 9.6.81, G
the benefit is only to be given to those who retired after the said date. If that
K be so, there was no need to issue the order dated 3.10.86. Government was
aware of the amendment already made through the notification to Article 177
of the State Civil Service Regulations. If the stand of the respondent State
is to be accepted, then the representation of the appellants should have been H
406 SUPREME COURT REPORTS [ 1998] 2 S.C.R.

A rejected, but that was not so. In spite of the said amendment the Government
issued the order dated 3.10.86 making applicable pensionary benefit to
temporary employees of the earstwhile undertaking who opted for temporary
service in the year 1969, 1972 and 1979. 1411-B-Cj

1.3. The stand of the State that the order dated 3.10.86 is not
B retrospective and hence cannot confer benefit to those prior to this date, was
not taken earlier, either before the Single Judge or before the Divisional
Bench. This interpretation is also, misconceived. It is made clear by the
heading 'subject' to the said order, which refers to cover and confirm benefits
to all the retired employees of the Corporation meaning thereby to those
C retired prior to the date of the order. 1412-B-DI
1.4. The amendment to Article 177 has given benefit to all the retiring
employees, i.e., it would accrue to all those retiring after 9.6.81 viz., the date
of amendment. But it has not, by any positive words, excluded expressly those
who retired prior to the said date. If later the Government itself considering
the matter confers the same benefits even to those who retired prior to
D 9.6.81, it cannot be said to be either violating Article 177 or in conflict with •
that. It is a case which is not covered under Article 177. If Government
desired otherwise, it could have been after issuing order dated 3.10.86,
withdrawn the same. On the contrary, it permitted it to continue.
1412-G-H; 413-Al
E 2. The submission that the order dated 3rd October 1986 is in violation
of Article 177 of Jam mu & Kashmir Civil Service Regulations; hence the
appellants cannot draw any benefit under it was made nor any ground raised
even in the appeals filed against the order of Single Judge nor such stand
is expected to be raised in the facts and circumstances of the case, it is
F inappropriate for a State Government to take up a stand to get its own order
to be held illegal, by giving restrictive interpretation to deny benefit to its
own employees as he had worked for such a long period. 1412-F; 413-Cj

3. There is no justifiable criteria for the State Government to draw the
line between those who retired earlier and those retired after 9th June 1981.
G Both such set of employees were equally placed in the same undertaking/
corporation temporary in character and all having served in the organisations
for more than 20 years. The person serving for such long period earns his
legitimate expectation. 1413-BI

D.S. Nakara & Ors. v. Union of India, [198311 SCC 305, referred to.
H 4. While considering the question of grant of pensionary benefits the
OHAN RAJ v. STATE [MISRA, J.] 407
State has to act to reach the constitutional goal of setting up a socialist State A
as stated and the assurance as given in the Directive Principles of State
Policy. A pension is part and parcel of that goal, which secures to a person
serving with the State, after retirement, of his livelihood. To deny such a
right to such a person, without any sound reasoning or any justifiable
differentia would be against the spirit of the constitution. The stand taken B
by the State Government is contrary to the said spirit. (413-Fl

D.S. Nakara & Ors. v. Union of India, ( 198311 SCC 305, referred to.

Cl VIL APP ELLA TE JURISDICTION : Civil Appeal No. 9392 of
1996.
c
From the Judgment and Order dated 5.9.95 of the Jammu & Kashmir
High Court in LP.A. No. 62of1993.

M.L. Bhat, Ms. Purnima Bhat and Prakash Padia for the Appellants.

Ashok Mathur and G.M. Kawoosa for the Respondents. D
The Judgment of the Court was delivered by

MISRA, J. The short question for consideration is, whether the
appellants, who were all drivers and conductors in the Jammu and Kashmir
State Road Transport Corporation, are entitled to the pensionary benefits in E
terms of Government order dated 3rd October, 1986 when they retired from
service of.the Corporation prior to 9th June, 1981.

In the year 1947, the Government Transport Undertaking (hereinafter
refereed to as 'Undertaking' was formed in the State of Jammu and Kashmir
to render transport services to its people. The appellants were employed as F
drivers and conductors from the year 1950 onwards. Initially, they were in
service with the aforesaid undertaking and later with the Road Transport
Corporation (hereinafter referred to as 'Corporation'). This corporation was
formed in the year 1976. All the appellants served in the State organisations
for various terms ranging from 30 to 40 years. On 9th April, 1969 the State G
Undertaking was made a permanent department of the State Government. On
1st September, 1976, the aforesaid Corporation was formed in terms of State
Road Transport Corporation Act, 1950, which was made applicable to the
State of Jammu and Kashmir by virtue of Act No. 25 of 1968. As a consequence,
the Government employees serving with the State Undertaking were treated
on deputation with the State Corporation. The Government oscillated with its H
408 SUPREME COURT REPORTS [1998] 2 S.C.R.

A decision the terms on which to confer pensionary benefits. Hence, it issued
variou$ orders in the years 1972 to 1974, all being made applicable from 9th
April, 1969 vide Government's order dated 27th March, 1979. By this, the
option for drawing pension and other benefits was given to the appellants
and others retired or seek to retire from the Corporation. The appellants,
however, continued to be the State Government employees. Thereafter, on 9th
B June, 1981 through Regulation No. 177 the States Civil Services Regulation
was amended by adding 3rd proviso to it. By that, a temporary Government
servant with 20 years' service on the date of superannuation was also entitled
to dr<1w pension. Then came the aforesaid Government order dated 3rd October,
1986 for exercising option even to those already retired for drawing pension
C as admissible under the normal rule applicable to a permanent government
emp~oyee which was also given to the appellants and others to which the
appellants opted. Admittedly, with reference to this Government order dated
3rd October, 1986 vide a Notification dated 20.4.1987, the appellants and
others belonging to the erstwhile Undertaking were declared permanent in the
aforesaid Corporation retrospectively to all those who were temporary upto
D 3 Ist August, 1976. The case of the appellants is that some of the drivers
simllarly placed were granted pension under it but the same is refused to the
appellants.

The appellants forcefully on the aforesaid Government order dated 3rd
E October, 1986, urged that the order, clearly, unequivocally without any
res~rvation grants the pensionary benefits to all the retired personnel who
retired from the Corporation including the appellants. For the respondents,
the, stand is, yes it is applicable but not to those who retired prior to 9th June,
In I. Admittedly, all the appellants retired prior to this date. Aggrieved by the
said stand, the appellants filed a writ petition which was allowed by the
F learned single Judge, who directed the respondents to give them pensionary
benefits under the order dated 3. I 0.1986. Aggrieved by the said order, the
respondents filed a Letters Patent Appeal before the Division Bench of the
Hjgh Court. The said appeal was allowed in which it was held that the
afbresaid Government order dated 3rd October, 1986 was contrary to the
G service conditions and the law governing the Writ petitioners. The writ
petition stood dismissed. As against this order, the present appeal arises.

It is clear that the question of absorption and giving pensionary benefits
to the employees in the aforesaid Undertaking and the Corporation was
~rawing the attention of the State Government right from the year 1969 which
H is evident from the various orders and letters issued. The first step towards
Dl-IJ\N RA.I 1·. STA IE [MISRA . .I.] 409
it is a Cabinet decision and the order dated 9th April, 1969 by which the A
aforesaid Transport Undertaking was declared as a perrnanent department
prospectively. The employees were given option either to become permanent
or continue to be temporary on certain condition. On 7th March, 1972 the
aforesaid order was clarified that the permanent and temporary posts in the
Undertaking will be notified by the Government from time to time. Further, B
those employees, who opted for permanency, will be confirmed subject to the
availability of posts. Further, the Government recast para 4 in the order dated
7th March, 1972 by means of Government order dated 6th July, 1973. Under
this, it was clarified that all the posts declared as permanent shall only for the
purposes of pension be deemed to have been made permanent retrospectively
from the date of their creation. This order was made retrospectively with effect C
from 9th April, 1969. Then carne the Governrnent order dated 11th April, 1974
under which the order for refund of bonus/reward/ex-gratia payments by the
aforesaid earlier three orders were withdrawn. Then came the Central road
Transport corporation Act under which all the employees of the erstwhile
Undertaking were taken on deputation in the Road Transpo11 Corporation
from I st September, 1976. All the Government servants, who opted for service D
in the said Corporation, were treated to have been on deputation with the said
Corporation from the date of its formation to the date of their exercising
option. Under Section 124 of the Constitution of Jammu and Kashmir which
is similar to Section 309 of the Constitution of India, the Government in
exercise of the powers conferred by proviso to the said section made E
·amendments through Notification dated 9th June, 1981 in the Jammu and
Kashmir Civil Service Regulations by inse11ing 3rd proviso to Article 177 of
the said Regulation, which is quoted hereunder :-

"Provided also that a temporary Government servant who on his
retirement from service on attaining the age of superannuation or on F
his being declared permanently incapacitated for further government
service by the appropriate Medical authority after he has rendered
temporary service of not less than twenty years shall be eligible for
all pensionary benefits admissible to a permanent Government servant
under these rules and condition of holding a pensionable post in a
substantive capacity or a continuous quasipermanent service of 5 G
years or more, shall be dispensed with in his case.

In schedule ix the following shall be inserted as a 3rd proviso
below Rule 11:
Provided also that a temporary Government servant with 20 years H

...'
410 SUPREf\IE COURT REPORTS [ 1998] 2 S.C.R.

A ~ervice retiring on superannuation or on this being declared
permanently incapacitated will be granted all pensinary benefits, as
admissible to permanent Government servants..-

It is under this Notification the respondents demarcated lines to give
the pensionary benefits to only those who retired after this date, i.e., 9th June,
B 1981, and not prior and since all the appellants retired prior to this date they
were excluded. The appellants thereafter made various representations to the
Government for admitting them to this benefit. The stand taken was, they
were all working for the last about 30 to 40 years as temporary Government
servants but when all similarly placed persons under the aforesaid amendment
C were made eligible for pension who have worked only for 20 years service
prior to the date of superannuation then there is no justification to exclude
the appellants from this benefit only on the basis of retiring earlier to this
dated viz. 9th June, 1981. The case of the appellants is that the Government
favourably considered the said representation and decided to grant the
pensionary benefits even to other temporary employees of the Corporation,
0

D who retired prior to 9th Ju ne. 1981. It is this decision which resulted into the
aforesaid order dated 3rd October, I986. It is not in dispute that under this . {'
order all the appellants arc entitled to receive pensionary benefits, namely,
even those who have retired prior to 9th June, 1981.

Learned counsel for the respondent - State has contradicted this stand
E and urged that the order dated 3rd October, I986 has to be read with the
notification dated 9th June, I 981 and hence ihe benefit under it, can only be
granted to such employees who have retired after 9th June, I981. In other
words, the case of the respondents is that prior to 9th June, 198 I, Article 177
of the aforesaid Regulation only provided permanent Government employees
or such quasi-permanent employees, who have been working for more than
F five years, were only entitled to the grant of pensionary benefit. It is for the
first time through the aforesaid amendment dated 9th June, 1981, even temporary
Government servants were conferred with pensionary benefits and who had
rendered temporary service of not less than 20 years.

G It is significant that learned Single Judge has clearly recorded a finding.
. )
which is also clear from the records that the order dated 3rd October, 1986
was the result of the representations made by the appellants. At this relevant
time. the State was under the Governor's Rule and by virtue of Section 92 of
aforesaid State Constitution, the Governor accepted the demands of the
-
appellants by granting pensionary benefits to them also by means of the said
H order. Learned Single Judge recorded that this fact is set in para 12 of the writ
OHAN RAJ v. STATE [MISRA. J.] 411

petition and the same was not refuted by the State in the counter affidavit. A
~
,. This fact and the finding of the learned single Judge to this extent has not
been set aside.

After hearing learned counsel of the parties, we do not find any
substance in the contention of the respondents that this order when read with
the earlier notification dated 9th June, 1981 the benefit is only to be give to B
• ~
those who retired after the said date. If that be so, there was no need to issue
this order on 3rd October, 1986. Government was aware of the amendment
already made through the aforesaid notification to Article 177 of the Said
Regulation. If the stand of the respondent - state is to be accepted then the
representations of the appellants should have been rejected but that was not
so. We find that in spite of the said amendment the Government issued the
c
order dated 3rd October, 1986 making applicable pensionary benefit to
temporary employees of the erstwhile Undertaking who opted for temporary
service in the years 1969, 1972 and 1979. The relevant portion of the said
Government order dated 3rd October, 1986 is quoted hereunder :-
D
.
;, "It is hereby ordered that all temporary employees of erstwhile
Government Transport Undertaking who have opted for temporary
service in the State Road Transport Corporation or those employees
who have opted for Corporation Ser;ice in the State Road Transport
Corporation, in pursuance of Govt. Order No. 25-TP of 1979 dated
27.3.1979 shall be given afresh option to: E

a.····················
b.........................

i. ···························
\" F
(ii) the option new exercised shall be final and shall be available for
a period of three months from the date of issue of formal notification
in this behalf."

We find that the learned Single Judge has held with reference to the
order dated 3rd October, 1986;
G
I(
" ............ that the intention of the Government while issuing order
dated 3rd October, 1986 was very clear .hat, notwithstanding Article
177 of the C.S.R. and notwithstanding the fact that the petitioners had
all retired prior to 9th June, 1981, they were declared entitled to the H

r
412 SUPREME COURT REPORTS [1998] 2 S.C.R.

A grant of pensionary benefit."

Learned counsel for the state submits that the said order dated 3rd
October, 1986 is not retrospective in operation, hence cannot confer benefit
to those prier to this date. Firstly, no such stand was taken by the State either
before the learned Single Judge nor before the Division Bench. Even otherwise,
B this interpretation is misconceived. In fact the heading - 'Su~;ect', to the said
order dispels all the doubt which is quoted hereunder; .,
"Subject : Grant of normal retirement benefits to the retired
employee of the state Road Transport Corporation sanction to the
.
>

"
c
The subject refers to cover and confer benefits to all the retired
employees of the Corporation meaning thereby to those retired prior to the
date of the order. Hence, contention to the contrary by the respondents have
no merit.

D This order clearly gave fresh right to exercise the option to all the
employees of the Corporation, who retired earlier, to be made within a period
of three months. It is not in dispute that all the appellants exercise their option
within the said period. Admittedly, this benefit, by this order, was conferred
on the basis of representations made by the appellants to the Government,
E hence their right cannot be rejected on the basis of submission of the learned
counsel for the State.

Learned counsel for the State then made an alternative submission that
the order dated 3rd October, 1986 is in violation of Article 177 of the said
Regulation, hence the appellants cannot draw any benefit undt!r it. It seems
F that it is this submission which led to the mis-direction even by the appellate
court. We are surprised that the State is taking such a stand on its own order
to be held to be ultravires of a Regulation. Neither such a submission was
made nor any ground raised even in the appeals filed against the order of
learned single Judge nor such a stand is expected to be raised on the facts
G and circumstances of this case. Even otherwise, examining this submission we
find that the amendment to Article 177 has given benefit to all the retiring
employees, i.e., it would accrue to all retiring after 9th June, 1981 viz. the date
of amendment. But it has not, by any positive words, excluded expressly to
those who retired prior to the said date. If later the government itself
reconsidering the matter confers the same benefits even to those who retired
H prior to 9th June, 1981, it cannot be said to be either violating Article 177 or
OHAN RAJ v. STATE [MISRA, .I.] 413
in conflict with that. It is a case, which is not covered under Article 177 is A
dealt with later. If Government desired otherwise, it could have, even after
issuing order dated 3rd October, 1981, withdrawn the same. On the contrary,
it permitted to continue. Hence, even this submission of the said order being
violative of Article 177, has no force.

Even otherwise, we do not find any justifiable criteria for the State B
Government to draw the line between those who retired earlier and those
retired after 9th June, 1981. Both such set of employees were equally placed
in the same Undertaking/Corporation temporary in character and all having
served in the organisations for more than 20 years. In fact, appellants have
served with the Government for more than 30 to 40 years. The person serving C
for such a long period earns his legitimate expectation. It is not something
which he seeks as a begging bowl. It is inappropriate for a State Government
to take up a stand to get its own order to be held illegal. by giving restrictive
interpretation to deny benefit to its own employees who had worked for such
a long period. In fact, in the Constitution Bench decision of this court in D.S.
Nakara and Others v. Union of India, [1983] I SCC 305, this Court held that D
criterion of date of enforcement of the revised scheme entitling benefits of the
revision to those retiring after specified date while depriving the benefits to
those retiring prior to that date was violative of Article 14. Even otherwise,
while considering the question of grant of pensionary benefits the State has
to act to reach the constitutional goal of setting up a socialist State as stated E
and the assurance as given in the Directive Principles of State Policy. A
pension is a part and parcel of that goal, which secures to a person serving
with the State after retirement of his livelihood. To deny such a right to such
a person, without any sound reasoning or any justifiable differentia would be
against the spirit of the constitution. We find in the present case the stand
taken by the State Government to be contrary to the said spirit. In the F
aforesaid D.S. Nakara (supra), this court has very clearly recorded the
following :-

"Para 36. - Having set out clearly the society which we propose to set
up, the direction in which the State action must move, the welfare
State which we propose to build up, the constitutional goal of setting G
up a socialist State and the assuranc~ in the Directive Principles of
State Policy especially of security in old age at least to those who
have rendered useful service during their active years, it is indisputable,
nor was it questioned, that pension as a retirement benefit is in
consonance with and in furtherance of the goals of the Constitution. H
414 SUPREME COURT REPORTS [1998] 2 S.c..R.

A The goals for which pension is paid themselves give a tillip and push
to the policy of setting up a welfare State because by pension the
socialist goal of Security of cradle to grave is assured at least when
it is mostly needed and least available, namely, in the fall of life."

For the aforesaid reasons and the findings recorded on the facts and
B circumstances of this case, the appeal stands allowed. The impugned order
of the High Court dated 5th September, 1995 passed in L.P.A. No. 62of1993
is set aside. The appellants would be entitled for the pensionary benefits in
terms of and as held by learned Single Judge in its order dated 29th June,
1993. On the facts and circumstances of the case, cost on the parties.
c K.T. Appeal allowed.