K.L. RATHEEversusUNION OF INDIA AND ORS.

A                                K.L. RATHEE
                                        v.
                         UNION OF INDIA AND ORS.

                                  JULY 7, 1997

B                    [S.C. AGRAWAL AND S.C. SEN, JJ.]

        Service Law-<:CS(Pension) Rules, 1972-Rule ~Liberalised Pension
  Fonnula, 1979-Applicability of-Pension was to be calculated on the basis
  of average salary drawn over a period of last ten months-Applicability of the
C principle even to those persons who had retired before the notified
  date-Emoluments to be calculated according to Government mies in force
  at the time of retirement of the employees.

        On 25.5.1979 the Government of India introduced Liberalised Pension
D Formula with revised method of calculation of pension based on slab system
  and raised monthly pension to Rs. 1500 p.m. The benefit of this liberalised
  Pension Formula, 1979 was made available only to those Government ser·
  vants who retired on or after 31.3.1979. The fixation of cut off date of
  31.3.1979 was challenged as arbitrary. This Court allowing the Writ Petition
  held that all the pensioners governed by CCS (Pension) Rules 1972 will be
E governed by this liberalised scheme of pension irrespective of the date of
  their retirement. Accordingly, the Government issued orders extending the
  benefit of the judgment to all pensioners covered by CCS (Pension) Rules as
  well as liberalised Pension Rules, 1950. The Government clarified that only
  the benefit of this liberalisation should be allowed to all pensioners as had
  been mentioned in the Government Orders and that in all other respects the
F rules, prevalent on the date of retirement of the pensioners will apply; that
  the revised pension was to be computed on the average emoluments drawn
  during the last 10 months of service. However, the definition of'emoluments'
  as in force at the time of the retirement" of an employee had not undergone
  any change. The petitioner, who retired from Government Service on
G 1.5.1968, as Joint Secretary, after having got pension and other retirement
  benefits according to the Government rules in force at that time, claimed
  that he had to be given the same amount of pension as other employees of his
  rank irrespective of the date of retirement and argued that there should be
  no discrimination among the persons getting pension from the Government
  as there cannot be any classification among the retired Government
H employees on the basis of date of retirement, and they must be given higher
                                        426
                          K.L. RATHEEv. U.0.I.                           427

pension on the same basis as it was being given to persons who bad retired A
after 1.4.1979.

      Dismissing the writ petition, this Court

       HELD : According to the clarification issued by the Ministry of
Finance, the average of the last ten months' emoluments must form the           B
basis for calculation of pension. That means those who were actually
drawing larger emoluments in the last ten months of their service will get
large amounts of pension. Nakara's Case does not lay down that the same
amount of pension must be paid. to all persons retiring from Government
service irrespective of the date of retirement. There is only one class of      C
government employees for the purpose of calculation of pension. There
cannot be any mini classification of Government servants for calculating
the amount of pension payable. That means the same method should be
adopted for calculating pension for all Government servants. Even if
pension is calculated on the basis of the same formula the basis of
calculation has to be the average of the last ten month's emoluments as         D
the basis for calculation of pension must be uniformly applied to all
persons drawing pension from the Central Government. It however, does
not mean that the quantum of emoluments drawn during the last ten
months of service of each Government employee must be taken to be the
same. The emoluments have to be calculated according to the Government          E
rules in force at the time of retirement of the employees. Nakara's case is
not a case of universal application irrespective of the facts and circumstan-
ces of the case. When the Government decided that pension was to be
calculated on the basis of average salary drawn over a period of last ten
months, it was held in Nakara's case that this principle has to be applied
even to those persons who had retired before the notified date. That,           F
however, does not mean that the emoluments of the persons who were
retiring after the notified date and those who have retired before the
notified date holding the same status must be treated to be the same.
                                        [429-D; 432-B-G-H; 431-B-C; 433-A]
      D.S. Nakara & Ors. v. Union of India & Ors., [1983] 2 SCR 165 and
                                                                                G
Indian Ex-Services Leaque a11d Ors. Etc. v. U11io11 of India and Ors. Etc.,
[1991] 1 SCR 158, relied on.

     Krishena Kumar v. Union of India and Others, AIR (1990) SC 1782
and Union of India v.All India Se1vices Pensioners' Association and another, H
    428                     SUPREME COURT REPORTS [1997) SUPP. 1 S.C.R.

A AIR (1988) SC 501, distinguished.

          CIVIL ORIGINAL JURISDICTION : Civil Writ Petition No. 15434
    of 1984.

             (Under Article 32 of the Constitution of India.)
B
           S. Balakrishnan, S. Prasad and M.K.D. Namboodiri for the
    Petitioner.

             K. Lahiri, G. Venkatesh Rao and C.V. Subba Rao, for the Respon-
    dents.
c
             The Judgment of the Court was delivered by

         SEN, J. On 1.5.1968 the petitioner retired from Government service
  as Secretary, Industrial Licensing Policy Inquiry Committee and Joint
D Secretary to the Government of India in the Ministry of Industrial Develop-
  ment and Company Affairs, New Delhi. The petitioner got pension and
  other retirement benefits according to the Government rules in force at
  that time. On 25.5.1979 the Government of India introduced Liberalised
  Pension Formula. The main feature of this Formula was that it introduced
  revised method of calculation of pension based on slab system and raised
E monthly pension to Rs. 1500 per month. The benefit of the Liberalised
  Pension Formula, 1979 was made available only to those Government
  servants who retired on or after 31.3.1979. A Writ Petition was filed in this
  Court challenging the fixation of the cut-off date of 31.3.1979 for payment
  of liberalised pension. It was claimed that irrespective of the date of
F retirement the benefit of the Liberalised Pension Formula must be made
  available to all the pensioners. This Court upheld the contention of the
  petitioner and held that all the pensioners governed by 1972 Rules will be
  governed by this liberalised scheme of pension irrespective of the date of
  their retirement. In that case D.S. Nakara & Ors. v. Union of India & Ors.,
  [1983] 2 SCR 165, it was argued on behalf of the petitioners that all
G petitioners entitled to receive pension under the relevant rules formed a
  class irrespective of the date of their retirement. There could not be a mini
  classification within this class. The classification based on retirement before
  or subsequent to the specified date was invalid. The scheme of liberalisa-
  tion in computation of pension must be uniformly enforced with regard to
H all pensioners.
                       K.L.RATHEEv. U.0.1.[SEN,J.)                        429

      On the basis of the judgment of this Court on 22.10.1983 the Govern-       A
ment issued orders extending the benefit of the judgment to all pensioners
covered by CCS (Pension) Rules 1972 as well as Liberalised Pension Rules,
1950.

       After promulgation of the Order dated 22.10.1983 doubts arose             B
regarding the extent of the benefit of various liberalisations made from time
to time in Pension Rules. It was clarified by the Government that only the
benefit of this liberalisation should be allowed to all pensioners as had been
mentioned in the Government Orders dated 22.10.1983. In all other
respects the rules, prevalent on the date of retirement of the pensioners,
will apply.                                                                      C
       According to the clarification issued by the Ministry of Finance, the
revised pension is to be computed on the average emoluments drawn
during the last 10 months of service. This rule will apply to all the pen-
sioners. However, the definition of emoluments as in force at the time of D
the retirement of an employee has not undergone any change. The case of
the petitioner is the following Nakara's case he has .to be given the same
amount of pension as other employees of his rank irrespective of the date
of retirement.

       The case of the petitioner is that the judgment in Nakara 's Case E
leaves no room for doubt that there should be no discrimination among
the persons getting pension from the Government. There cannot be any
classification among the retired Government employees on the basis of
date of retirement. Therefore, they must be given higher pension on the
same basis as it was being given to persons who have retired after 1st April, F
1979.

       We are unable to uphold this contention. Nakara's Case (supra) dealt
with the manner of calculation of pension on the basis of average emolu-
ments of a retired Government employee. Prior to the liberalisation of the
formula for computation of pension made by the memorandum dated 25th G
May, 1979, average emoluments of the last thirty months of service of the
employee provided the basis for calculation of pension. The 1979
memorandum provided that average emoluments must be calculated on
the basis of the emoluments received by a Government servant during the
last ten months of the service. That apart, a new slab system for computa- H
    430                   SUPREME COURT REPORTS [1997] SUPP. l S.C.R.

A   tion of pension was introduced and the ceiling on pension was raised. As
    a result of these changes, the pensioners who retired prior to the specified
    date suffered triple jeopardy, viz., lower average emoluments, absence of
    slab system and the lower ceiling. This Court struck down the provision
    including the memorandum which provided that :
B           "the new rates of pension are effective from 1st April, 1979 and
            will be applicable to all service officers who became/become non-
            effective on or after that date."

            The Court further held :
c            "Omitting the unconstitutional part it is declared that all pensioners
             governed by the 1972 Rules and Army Pension Regulations shall
             be entitled to pension as computed under the liberalised pension
             scheme from the specified date, irrespective of the date of retire-
             ment. Arrears of pension prior to the specified date as per fresh
D            computation is not admissible."

           It is to be seen that the judgment did not strike down the definition
    of 'emoluments'. It merely held that if pension was to be calculated on the
    basis of the last ten months' emoluments of a Government servant, after
E   1.4.1979, there is no reason why those who have retired before 1.4.1979
    should get pension calculated on the basis of average of last thirty six
    months' emoluments. In other words, the rule of computation must be the
    same. This Court did not hold that those who have retired before 1.4.1979
    must be treated as having the same emoluments as those who retired on
    or after 1.4.1979 for the purpose of calculation of pension. Therefore, on
F   the strength of Nakara's Case (supra), the petitioner is not entitled to ask
    for computation of pension with reference to emoluments which he never
    got. Rule 5(1) of CCS (Pension) Rules, 1972 provides :

             "5(1)      Any claim to pension or family pension shall be regu-
                        lated by the provisions of these rules in force at the
G                       time when a Government servant retires or is retired
                        or is discharged or is allowed to resign from service or
                        dies, as the case may be."

          The average of the last ten months' emoluments must form the basis
H for calculation of pension. That means those who were actually drawing
                                 K.L. RATHEE v., U.O.I. [SEN, J.]                   431
          larger emoluments in the last ten months of their service will get larger A
          amounts of pension. Nakara's Case does not lay down that the same
          amount of pension must be paid to all persons retiring from Government
          service irrespective of the date of retirement. The contention of the
          petitioner that there is only one class of Government employees for the
          purpose of calculation of pension cannot be disputed. The Constitution B
          Bench in Nakara's Case has clearly laid down that there cannot be any mini
          classification of Government servants for calculating the amount of pension
          payable. That means the same method should be adopted for calculating
          pension for all Government servants. But the question is what should be
., .,     the quantum of pension payable to a Government servant? Even if pension C
          is calculated on the basis of the same formula the basis of calculation· has
          to be the average of the last ten months' emoluments. This principle of
          adopting last ten months' emoluments as the basis for calculation of
          pension must be uniformly applied to all persons drawing pension from the
          Central Government. This was all that was laid down in Nakara 's case. It,
          however, did not mean that the quantum of emoluments drawn during the
                                                                                       D
          last ten months of service of each Government employee must be taken to
          be the same for this purpose.

                   This aspect of the question was examined in the case of Indian
            Ex-Services League and Ors. Etc. v. Union of India and Ors. Etc., (1991] 1     E
            SCR 158. The case was argued on behalf of Armed Forces personnel
            retiring from commissioned ranks as well as Armed Forces personnel
            retiring from below the commissioned rank who were represented by Shri
            K.L. Rathee, J.S. Verma, J. (As His Lordship, then was) speaking for the
            Constitution Bench which heard the matter observed that the contention         F
            of the writ petitioners on the basis of Nakara decision was untenable. On
            behalf of the petitioners, it hacl been contended that all retirees who held
            the same ranks irrespective of their date of retirement must be given the
            same amount of pension. In effect, what was urged was that there must be
            "one rank one pension" for all the retirees irrespective of their date of
            retirement. This contention of the petitioners was rejected by the Constitu-   G
            tion ~ench by holding that Nakara's decision was of limited application.
            There was no scope for enlarging the ambit of that decision to cover all
            claims made by the petitioners for identical amount of pension to every
        '.· retired person from the same rank irrespective of the date of retirement,
            even though the reckonable emoluments for the purpose of computation           H
    432                   SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A of pension were different.
           In fact, the principle laid down in the case of Indian Ex- service
    League & Ors. (supra) negates the case of the petitioner in the instant case.
    Nakara's case does not lay down that the last ten months emoluments must
    be deemed to be the same for all the employees at the time of their
B   retirement. The emoluments have to be calculated according to the
    Government rules in force at the time of retirement of the employee. But,
    if the principle of average of last ten months' emoluments has been adopted
    for some employees, then that principle must be extended to all the
    employees who have retired before them. Nakara's Case did not lay down
C   that the reckonable emoluments for the purpose of calculation of pension        •' ~




    must be the same for a person occupying the same post.

          It is also to be noted that the case of Krishena Kumar v. Union of
    India and Other.:, AIR (1990) SC 1782, another Constitution Bench ex-
    amined the question whether on the strength of Nakara's Case, petitioners
D were entitled to the same Provident Fund benefits as were given to those
    who retired subsequent to 31st March, 1979. It was argued on behalf of the
    petitioner that State's obligation towards pensioners was the same as that
    towards persons who were to be paid Provident Fund benefits. This Court
    held that that was not the ratio of Nakara's Case. On retirement of an
E   employee, legal obligation under the Provident Fund account ended on             I.



    payment of the .Provident Fund dues of the employee. The Rules Govern-
    ing Provident Fund and contribution to such Fund were entirely different
    from the rules governing pension.

          It was also held in the case of Union of India v. All India Services
F Pensioners' Association and Another, AIR 1988 SC 501, that the principles
    laid down in Nakara's Case could not be extended to the case of payment
    of gratuity.

        It clearly appears from all these cases that Nakara's case is not a case
  of universal application irrespective of the facts and circumstances of the
G case. When the Government decided that pension was to be calculated on
  the basis of average salary drawn over a period of last ten months, it was
  held in Nakara, that this principle has to be applied even to those persons
  who had retired before the notified date. That, however, does not mean
  that the emoluments of the persons who were retiring after the notified
H date and those who have retired before the notified date holding the same
                          K.L. RA1HEE v. U.O.I. [SEN, J.)                    433


-   status must be treated to be the same. This argument_ was specifically A
    negatived by the Constitution Bench in the case of All India Services
    Pe11Sioners' Association, (supra). What the petitioner is claiming in this case
    is more or less the same relief as was denied to him in the above case.

          In view of the aforesaid, this writ petition must fail and is dismissed
    with no order as to costs.                                                      B
    R.A.                                                     Petition dismissed.




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