PEPSU ROAD TRANSPORT CORPORATION, PATIALAversusMANGAL SINGH AND ORS.

                         [2011] 6 S.C.R. 564


A    PEPSU ROAD TRANSPORT CORPORATION, PATIALA
                                  v.
                     MANGAL SINGH AND ORS.
                   (Civil Appeal No. 4111 of 2008)
                           MAY 12, 2011
B
                [D.K. JAIN AND H.L. DATTU, JJ.]

        Pension:

c     Regulations made under a statute laying down the terms
  and conditions of service of employees which governed the
  Pension Scheme - Non-compliance of - Entitlement of
  employees to claim benefit under the Pension Scheme -
  Held: Failure on the part of the employees to opt for the
D Pension Scheme and/or refund the advance taken from the
  employer's contribution of C. P. F. as envisaged in the
  Regulations would disentitle them from claiming any benefit
  under the Pension Scheme - Pepsu Road Transport
  Corporation Employee Pension/Gratuity and General
E Provident Fund Regulations, 1992 - Regulations 3, 4 -
  Service law.

       Regulations made under the statute laying down the
  terms and conditions of service of employees, including the
  grant of retirement benefits - Binding effect of - Held:
F Regulations validly made under statutory powers are binding
  and effective as the enactment of the competent legislature
  - Any action or order in breach of the terms and conditions
  of the Regulations shall amount to violation of Regulations
  which are in the nature of statutory provisions and shall render
G such action or order illegal and invalid.
        Pension and Contributory Provident Fund - Difference
    between the two concepts - Discussed.


H                               564
    PEPSU ROAD TRANSPORT CORPORATION,                     565
          PATIALA v. MANGAL SINGH
    Notice:                                                     A
     lndivjdual notice - Option to choose retirement benefits
- Not exercised - Plea of the respondents that option was not
exercised for want of knowledge for non,..service of individual
notices - Pension Scheme not providing for serving 8
individual notices on the employees - Held: In view of
absence of such condition in the scheme, it was not
necessary for the Corporation to give an individual notice to
respondents for exercising of option for pension Scheme and
a/so for asking respondent to refund the employers
contribution of C.P.F. at each stage - Even otherwise, when C
notice or knowledge of the Pension Scheme can be
reasonably inferred or gathered from the conduct of the
respondents in their ordinary course of business and from
surrounding circumstances, then, it will constitute a sufficient
notice in the eyes of law.                                       D

     By virtue of Pepsu Road Transport Corporation
Employee Pension/Gratuity and General Provident Fund
Regulations, 1992, if an employee .of the appellant-
Corporation fails to exercise his option for the Pension        E
Scheme within a period of 6 months from the date of·
issue of the Regulations and secondly, even on exercise
of option, if an employee fails to refund the amount of
advance taken from employers contribution of the C.P.F.
within 6 months from the date of issue of the Regulations,      F
then it shall be deemed that employee had opted to
continue for the existing C.P .F. benefit.
     In the instant case, the respondents were the
employees of the appellant-Corporation. The issue which
arose for consideration in these appeals was whether the        G
respondents were eligible to claim pensionary benefits
under the Pension Scheme inspite of the non-compliance
of the essential conditions stipulated in the Regulations
of 1992 which governed the said Pension Scheme.
                                                                H
             ~-   ,•- -·




     566.   SUPREME COURT REPORTS_: .. (2011) 6 S.C.R.

A.       Allowing the appeals, the Court
         HELD: 1.1. The Pepsu Road Transport Corporation
    was constituted in terms of the provisions .of the Road .
 ·.Transport Corporations Act, 1950: By reason of the
8 provisions of Section 4 thereof, each Corporation is a .
    body corporate having perpetual succession and a .
    common seal and can, in its own name, sue and be sued.
    Section 45 of the 1950 Act authorises the Corporation to
    frame Regulations for the administration of the affairs of
C the Corporation. The Regulations provide for the grant of
    retirement benefits to the employees of the PEPSU Road
   lransport Corporation with effect from 15.06.1992. [Paras
    12, 13, 14] [578-D-E; 579-D]
          1.2. It is well settled law that the Regulations made
D under the statute laying down the terms and conditions
     of service of employees, including the grant of retirement ·
     benefits has the force of law. The Regulations validly ··
     made under statutory powers .are binding and .effective
 · · as the enactment of the compttent legislature. The ·
E statutory bodies as well as general public are bound to
     comply with the terms and conditions laid down in the
     Regulations as a legal compulsion. Any action or order
     in breach of the terms and conditions of the Regulations ·
     shall amount to violation of Regulations which are in the·
F nature of statutory provisions and shall render such
     action or order illegal and invalid. Even in the case of non-
     statutory Regulations specifically providing for the grant
     of pensionary benefits to the employee qua his employer
     shall be governed by the terms and conditions
G encapsulated in such non-statutory Regulations. [Paras
     16, 19] [582-E-G; 586-A-B] .
         U~ion of India v. Brig. P.- K. Dutta (Retd.) 1994(6) Suppl.·
     SCR 358: 1995 Supp (2) SCC 29 - relied on •...
                   ' i -'
H
     PEPSU ROAD TRANSPORT CORPORATION,                   567
           PATIALA v. MANGAL SINGH
     Union of India v. M. K. Sarkar (2009) 16 SCR 249: (2010)   A·
 2 SCC 59; Sukhdev Singh v. Bhagatram Sardar Singh
 Raghuvanshi (1975) 3 SCR 619: (1975) 1 SCC 421; Vidya
 Dhar Pande v. Vidyut Grih Siksha Samiti, (1988) 3 Suppl.
\$CR 442 : (1988) 4 SCC 734; Rajasthan SRTC v. Bal
 Mukund Bairwa (2009) 4 SCC 299 - referred to.                  B

      2.1. Pension and Contributory Provident Fund
 (C.P.F.)

      Pension is a retirement benefit partaking of the
 character of regular payment to a person in consideration      C
 of the past services rendered by him. Although pension
 is not a bounty but is claimable as a matter of right, yet
 the right is not absolute or unconditional. The person
 claiming pension must establish his entitlement to such
 pension in law. The entitlement might be dependent upon        D
 various considerations or conditions. In a given case, the
 retired employee is entitled to pension or not depend on
 the provisions and interpretation of Rules and
 Regulations. The C.P.F. appears to be simple mechanism
 where an employee is paid the total amount which he has        E
 contributed along with the equal contribution made by
 the employer ordinarily at the time of retirement of an
 employee. In short, "pension is payable periodically as
 long as the pensioner is alive whereas C.P .F. is paid only
 once on retirement". Therefore, conceptually, pension          F
 and C.P.F. are separate and distinct. [Para 21] [587-E-H;
 588-A]
     2.2. Essential distinction between C.P.F. and Pension.
      The C.P.F. was introduced with the object of              G
 providing social security to the employees working in
 factories and other establishments, after their retirement.
 The C.P.F. was instituted as a Compulsorily Contributory
 Provident Fund by the enactment of the Employees'
 Provident Funds and Miscellaneous Provisions Act, 1952.        H
    568    SUPREME COURT REPORTS              [2011] 6 S.C.R.


A The employee registered under the Provident Fund Act
  shall be entitled to claim all benefits available under the
  C.P .F. Scheme framed under the Act. This C.P .F. Scheme
  requires opening of the account for the employee by the
  employer. The Government/employer is under the
B continuous obligation to deposit equal or matching
  contribution made by the employee in his account till he
  retires. Once the employee is retired, then his rights qua
  Government/employer's contribution into his C.P .F.
  account finally crystallizes. After retirement, this entire
c C.P .F. amount is paid to the employee as a retiral benefit.
  On the receipt of C.P.F. amount, the relationship between
  employee and employer ceases to exist without leaving
  any further legal right or obligation qua each other. On
  the other hand, Pension is a periodic payment of an
  amount to the employee, after his retirement from service
0
  by his employer till his death. In some cases, it is also
  payable to the dependents of the deceased employee as
  a family pension. The pension is in a nature of right which
  employee has earned by rendering long service to the
  employer. It is a deferred payment of compensation for
E past service. It is dependable on the condition of
  rendering of service by the employee for a certain fixed
  period of time with decent behavior. Like C.P.F., the object
  of providing pensionery benefit under the Pension
  Scheme is to provide social security to the employee and
F his family after his retirement from service. The
  Government's/Employer's obligation under the Pension
  Scheme begins only when the employee retires and it
  continues till the death of the employee. Pension is not
  a charity or bounty nor is it a conditional payment solely
G dependent on the sweet will of the employer. It is a social
  security plan consistent with the socio-economic
  requirements of the Constitution when the employer
  s a State within the meaning of Article 12 of the C
  nstitution rendering social justice to a superannuated
H
    PEPSU ROAD TRANSPORT CORPORATION,                  569
          PATIALA v. MANGAL SINGH
government servant. It is a right attached to the office and A
cannot be arbitrarily denied. [Paras 22, 26, 36] [588-B-E;
590-D-F; 595-B-D]

     A.P. Srivastava v. Union of India (1995) 6 SCC 227;
Vasant Gangaramsa Chandan v. State of Maharashtra (1996)
                                                         8
10 SCC 148; Subrata Sen v. Union of India (2001) 8 SCC
71; Union of India v. P.D. Yadav (2002) 1 SCC 405; Grid
Corpn. of Orissa v. Rasananda Das (2003) 10 SCC 297 -
relied on.

     Committee for Protection of Rights of ONGC Employees C
v. 0. N. G. C., (1990) 2 SCC 472; Krishena Kumar v. Union of
India, (1990) 4 SCC 207; All India Reserve Bank Retired
Officers' Assn. v. Union of India 1992 Supp (1) SCC 664;
Deokinandan Prasad v. State of Bihar 1971 Suppl. SCR
634: (1971) 2 SCC 330; D.S. Nakara v. Union of India (1983) D
1 SCC 305; Poonamal v. Union of India, (1985) 3 SCC 345;
Prabhu Narain v. State of U.P (2004) 13 SCC 662; UP.
Raghavendra Acharya v. State of Karnataka (2006) 9 SCC
630 - referred to.
                                                              E
      3. In these appeals, the respondents had failed to
comply with the terms and conditions of the Regulations,
which governed the Pension Scheme. The statutory
Regulations made under a statute are required to be
interpreted in the same manner which is adopted while
interpreting any other statutory provisions. The F
Corporation as well as respondents are obliged and
bound to comply with its mandatory conditions and
requirements. Any action or conduct deviating from these
conditions shall render such action illegal and invalid. The
respondents had availed the retiral benefits arising out G
of the C.P.F and gratuity without any protest. The
respondents in all these appeals had made a claim for
pensionary benefits under the Pension Scheme for the
first time only after their retirement with an unreasonable
delay of more than 8 years. It is not in dispute that in some H
    570      SUPREME COURT REPORTS                (2011) 6 S.C.R.


A appeals, the respondents never opted for the Pension
  Scheme for their alleged want of knowledge for non-
  service of individual notices. In other appeals, although
  respondents applied for the option of the Pension
  Scheme but indisputably never fulfilled the quintessential
B conditions envisaged by the Regulations which are
  statutory in nature. In view of absence of such condition
  in the scheme, it was not necessary for the Corporation
  to give an individual notice to respondents for exercising
  of option for pension Scheme and also for asking
c respondent to refund the employers contribution of C.P.F.
  at each stage. Furthermore, when notice or knowledge
  of the Pension Scheme can be reasonably inferred or
  gathered from the conduct of the respondents in their
  ordinary course of business and from surrounding
D circumstances, then, it will constitute a sufficient notice
  in the eyes of law. [Paras 38, 40) [595-G-H; 596-A-D; G-
  H; 597-A-B]

          Dakshin Haryana Bijli Vitran Nigam v. Bachan Singh
    (2009) 14 SCC 793 - Distinguished.
E
          Union of India v. M.K. Sarkar (2010) 2 SCC 59 - relied
    on.
       4. The failure on the part of the respondents to opt
  for the Pension Scheme and refund the advance taken
F from the employer's contribution of C.P.F. will disentitle
  them from claiming any benefit under the Pension
  Scheme. Therefore, the judgment and order passed by
  the High Court is not sustainable. [Para 41) [598-E-F]
G                        Case Law Reference:
          (2009) 16 SCR 249         referred to     Paras 6, 39
          (1975) 3 SCR 619          referred to     Para 17
          (1988) 3 Suppl. SCR 442 referred to       Para 18
H
    PEPSU ROAD TRANSPORT CORPORATION,                     571
          PATIALA v. MANGAL SINGH
    1994 (6) Suppl SCR 358 relied on            Para 19          A
    (2009) 2 SCR 161             referred to    Para 19
    (1990) 2 SCR 156             referred to    Para 23
    (1990) 3 SCR 352             referred to    Para 24
                                                                 B
    1991 (3) Suppl SCR 256 referred to          Para 25
    (1971) Suppl SCR 634         referred to    Para 27
    (1983) 2 SCR 165             referred to    Para 27
    (1985) 3 SCR 1042            referred to    Para 29          c
    (2004) 13 sec 662            referred to    Para 31
    (2006) 2 Suppl SCR 582 referred to          Para 32
    (1995) 3 Suppl SCR 826 relied on            Para 36
                                                                 D
    (1996) 3 Suppl SCR 595 r~lied on            Para 36
    (2001) 3 Suupl SCR 140 relied on            Para 36
    (2001) 4 Suppl SCR 209 relied on            Para 36
    (2003) 4 Suppl SCR 45        relied on      Para 36          E

    (2009) 11 SCR 710            Distinguished Para 9
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4111 of 2008.
                                                                 F
    From the Judgment & Order dated 19.1.2007 of the High
Court of Punjab & Haryana at Chandigarh in Civil Writ Petition
No. 4211 of 2005.
                            WITH
                                                                 G
C.A. Nos. 4405, 4404 of 2011 & 3846 of 2010.
    K.K. Mohan, K. Sarada Devi, Raj Paul Kansai, Debasis
Misra, S. Janani, Vikash Singh, Sunando Raha, Deepak Goel,
Suresh Kumari, R.D. Upadhyay, B.K. Pal, P.N. Jha, Geetanjali
                                                                 H
    572      SUPREME COURT REPORTS                [2011] 6 S.C.R.


A Mohan for the appearing parties.

          The Judgment of the Court was delivered by
        H.L. DATTU, J. 1. Leave granted in SLP (C) No. 3349 of
    2008 and SLP (C) 330 of 2008.
B
        2. In Civil Appeal No. 4111 of 2008 - PEPSU Road
    Transport Corporation and Another v. Mangat Singh & Ors.
    (hereinafter referred to as "Mangal's appeal"), respondent
    joined the services of the Pepsu Road Transport Corporation
    (hereinafter referred to as "Corporation") as driver on
C   07.11.1974 and his services were governed by service rules
    of the Corporation which included the eligibility to receive      1



    Contributory Provident Fund (for short, "C.P.F.") and gratuity.
    Subsequently, on 30.06.1982, the services of the respondent
    were terminated for his unauthorized absence from the duty. The
D   respondent raised an industrial dispute against his termination
    order, which was dismissed by the Labour Court vide its order
    dated 11.02.1994. Aggrieved by the aforesaid order of the
    Labour Court, respondent filed a writ petition before the High
    Court of Punjab and Haryana, which was allowed vide order
E   dated 10.04.1996, setting aside the order of termination. The
    High Court further directed the reinstatement of the respondent
    with effect from 18.06.1996. In the meantime, on 15.06.1992,
    the Corporation had introduced the Pension Scheme for its
    employees and also framed Regulations known as Pepsu Road
F   Transport Corporation Employees Pension/Gratuity and
    General Provident Fund Regulations 1992 ('Regulations' for
    short) in order to regulate the said scheme. The Pension
    Scheme in terms of Regulation 4 of the Regulations envisages
    the condition of exercise of the option within a period of six
G   months from the date of. issue of the Regulations by an
    employee in order to avail .the pensionary benefits under the
    scheme. This time was further extended till 15.12.1992. The
    Regulation 4 of the said Regulations entitles the employee re-
    joining after leave or suspension to exercise his option for
H   Pension Scheme within the period of 6 months from the date
     PEPSU ROAD TRANSPORT CORPORATION,                     573
     PATIALA v. MANGAL SINGH [H.L. DATTU, J.]
of his re-joining. The respondent had also submitted nomination A
form of the C.P.F. scheme. However, the respondent did not
receive any retiral benefits on his retirement after attaining the
age of superannuation due to pendency of litigation in the High
Court regarding the payment of his back wages for the period
of his absence from the service. It is not in dispute that B
respondent did not opt for the Pension Scheme till the date of
his retirement. On 09.03.2005, the respondent filed a writ
petition before the High Court for a direction to the Corporation
to sanction pensionary benefits to the respondent under the
pension scheme. The High Court has allowed the writ petition      c
vide its order dated 19.01.2007 on the ground that the
provisions of Regulation 4 do not cover the case of the persons
reinstated into service pursuant to the orders of the Court. The
High Court further directed the Corporation to allow the
respondent to exercise his option for pension scheme within
                                                                   0
six months from the date of the order and the formalities for
payment of pension be finalized within a particular time frame.
Being aggrieved, the Corporation has filed this appeal.
     3. In SLP (Civil) No. 3349 of 2008- PEPSU Road
Transport Corporation and Another v. Sharanjit Kaur, · widow E
of Bachittar Singh and Ors. (hereinafter referred to as
Bachittar's appeal): The respondent had joined the services of
the Corporation as a Conductor on 07.07.1962. He was
subscriber for C.P.F. and gratuity. In the year 1989, respondent
took the loan from his C.P.F. account to the tune of Rs. 26,000/ F
-. Subsequently, on 15.06.1992, the Corporation had
introduced the Pension Scheme for its employees along with
the Regulations to regulate the said scheme. The Pension
Scheme in terms of Regulation 3 (h) of the Regulations
envisaged the condition of refund of the loan taken from the G
C.P.F. account by an employee on or before 14.12.1992 in
order to avail the pensionary benefits under the said
Regulations. The respondent had applied for the pension
scheme but failed to return the said loan amount. The
respondent retired as Inspector on 28.02.1997. He had received H
   574      SUPREME COURT REPORTS                  [2011] 6 S.C.R.


A all the monetary benefits including a sum of Rs. 99,005/- under
  C.P.F. Scheme. However, the respondent filed a writ petition
  before the High Court praying for pensionary benefits due to
  him under the pension scheme. The High Court (Civil Writ
  Petition No. 10285 of 1998) vide its order dated 09.08.2007
B has allowed the appeal following its earlier decision in RSA No.
  2173 of 1994, dated 25.05.2004 titled as 'PEPSU Road
  Transport Corporation v. Sant Ram Fitter', wherein, the High
  Court has observed that the rejection of the claim of respondent
  by the Corporation was illegal and arbitrary as the amount of
c advance can be adjusted against Death-cum-Retirement
  Gratuity payable to employee on his retirement as per
  Regulation 24 (3) of the Regulations and it can even be
  deducted from the C.P.F. of the respondent. In the light of this,
  the High Court has further directed the Corporation to release
  pensionary benefits to the respondent with interest @6% per
0
  annum from the date of accrual 'Jf pension till the date of
  payment thereof within two months from the date of the order.
       4. In SLP (Civil) No. 330 of 2008- PEPSU Road
   Transport Corporation and Another v. Baldev Singh & Ors.
E (hereinafter referred to as "Baldev's appeal): The respondent
  joined the services of the Corporation as a driver on 13.10.1966
  and had subscribed to C.P.F. and gratuity. In the year 1986,
  respondent took loan from his C.P.F. account to the tune of Rs.
   12,000. Subsequently, on 15.06.1992, the Corporation had
F introduced the Pension Scheme for its employees along with
  the Regulations in order to regulate the said scheme. The
  Pension Scheme in terms of Regulation 3 (h) of the Regulations
  envisaged the condition of refund of the loan taken from the
  C.P.F. account by an employee on or before 14.12.1992 in
G order to avail the pensionary benefits under the said scheme.
  The respondent had applied for the pension scheme but failed
  to return the said loan amount. Eventually, the respondent retired
  as a driver on 30.09.1994 and has received an amount of Rs.
  80,575/- under C.P.F. Scheme as retiral benefits. However, the
H respondent filed a writ petition before the High Court of Punjab
     PEPSU ROAD TRANSPORT CORPORATION,                        575
     PATIALA v. MANGAL SINGH [H.L. DATTU, J.]

and Haryana inter-alia praying for pensionary benefits due to        A
him under the pension scheme. The High Court vide its ex-parle
order dated 11.8.1997, directed the Corporation to pay all
retrial benefits to the respondent within 2 months With interest.
Aggrieved by this, the Corporation filed a review petition, which
was allowed by the High Court vide its order dated 22.05.1998,       B
directing the Corporation to determine whether any amount is
due to the respondent by passing a speaking order. In
compliance with the above order of the High Court, the
Managing Director of the Corporation, after giving the
opportunity of hearing, passed a detailed order rejecting the        c
claim of the respondent. Being aggrieved by the said order
dated 18.08.1998, the respondent filed a writ petition before
the High Court. The High Court has allowed the writ petition vide
its order dated 09.08.2007 following its earlier Judgment in Civil
Writ Petition No. 10285 of 1998 (Bachhitar Singh v. PEPSU            D
Road Transport Corporation).
      5. In Civil Appeal No. 3846 of 2010- PEPSU Road
Transport Corporation and Another v. Jagroop Singh
(hereinafter referred to as "Jagroop's appeal"), the respondent ·
had served the Corporation as a driver and was subscriber of E
C.P.F. and gratuity. Subsequently, on 15.06.1992, the
Corporation introduced the Pension Scheme for its employees
and also made the Regulations in order to regulate the said
scheme. The Pension Scheme in terms of Regulation 4 of the
Regulations envisages the condition for exercise of the option F
on or before 15.12.1992, by an employee in order to avail the
pensionary benefits under the scheme. Subsequently, the
Corporation had also extended this period by three months. It
is not in dispute that the respondent had not exercised any
option for availing the benefits under the pension scheme. On G
30.11.2000, the respondent took pre-mature voluntary
retirement. On 08.06.2001, the respondent received all the
retrial benefits under the C.P.F Scheme and gratuity without
any objection or protest. However, 01.06.2002, after nearly
10years from his retirement, the respondent filed a suit for H
    576       SUPREME COURT REPORTS                 [2011) 6 S.C.R.


A declaration for the entitlement to pension and other benefits in
  the Court of Civil Judge Senior Division, Bathinda. The learned
  Civil Judge had passed the judgment and decree dated
  01.03.2006 in favor of the respondent on the ground that the
  respondent was never informed about the option available
B under the Regulations and he came to know about this Scheme
  only at the time of his retirement. The learned Civil Judge further
  directed the Corporation to release pensionary benefit to the
  respondent along with interest @9% per annum till the date of
  realization. Being aggrieved by the judgment and decree dated
c 01.03.2006, the Corporation filed a Regular Second Appeal in
  the Court of District Judge, Bathinda, the same was allowed
  vide Judgment and order dated 27.04.2006 on the ground that
  respondent is estopped from claiming any pensionary benefit
  by his act of receiving all the retrial benefits under the C.P.F.
D Scheme at the time of his retirement and failing to exercise the
  option in terms of Regulation 4 of the Regulations in order to
  avail the benefits under the pension scheme. Aggrieved by this
  order of the Additional District Judge dated 27.04.2006, the
  respondent filed a Regular Second Appeal in the High Court,
  the same was allowed vide order and judgment dated
E 23.12.2008. The High Court has followed its earlier Judgment
  in Civil Writ Petition No. 14562 of 2004 titled as 'Jagjit Singh
  v. Managing Director, Pepsu Road Transport Corporation
  and another' dated 03.12.2008, wherein, the appeal was
  allowed on the ground that the pension scheme was never
F circulated nor was informed to the employees of the
  Corporation and mere non-refund of the loan taken from the
  C.P.F. account would not disentitle the employee from claiming
  pension under the scheme.
G       6. The issue involved in the present appeal for our
    consideration is: Whether the respondents are eligible to claim
    pensionary benefits under the Pension Scheme in view of the
    non-compliance of the essential conditions stipulated in the
    Regulations which govern the said Pension Scheme?
H         7. Shri K. K. Mohan, learned counsel has appeared for the
    PEPSU ROAD TRANSPORT CORPORATION,                        577
    PATIALA v. MANGAL SINGH [H.L. DATIU, J.]
Corporation and the respondents are represented by a battery         A
of learned counsel. We will refer to their submissions while
dealing with the issue canvassed before us.
      8. Learned counsel for the Corporation submits that the
respondents having not exercised their option for the pension
scheme within the time specified in the Regulations and those        8
having opted but not having complied with the terms and
conditions stipulated in the Regulations which govern the
pensionary benefits, the High Court erred in law granting relief
in question. In other words, he submits that the respondents are
ineligible to claim any pensionary benefits under the Pension        C
Scheme since they have failed to comply with quintessential
conditions, namely Regulation 3 and 4 of the said Regulations.
He further submits, relying on the decision of this Court in Union
of India v. M.K. Sarkar, (2010) 2 SCC 59, that the respondents
cannot take the plea that they were not given the opportunity to     D
opt for the Pension Scheme in the absence of the service of
notice by the Corporation to its individual employees.
    9. Learned counsel for respondents submits relying on
Dakshin Hayana Bijli Vitran Nigam v. Bachan Singh, (2009)            E
14 SCC 793, that in Mangal's and Jagroop's appeals, the
respondents were not given the opportunity in order to exercise
the option for the Pension Scheme as no individual notice was
served to them. Therefore, they were unable to exercise the
option for availing the benefits under the Pension Scheme in
                                                                     F
terms of the Regulation 4 of the Regulations.
      10. The learned counsel for respondent in Mangal's appeal
further submits that the respondent's services were terminated
when the Pension Scheme was introduced. Therefore, the re-
joining of duty by the respondent after the termination of his       G
services is not covered by Regulation 4 of the Regulations. In
other words, the learned counsel submits that Regulation 4
contemplates the exercise of option only by an employee, under
suspension and leave, within further period of 6 months from
the date of joining of duty after suspension.                        H
    578       SUPREME COURT REPORTS'                 [2011) 6 S.C.R.

A       11. Learned counsel submits that, in Baldev's and
    Bachittar's appeals, the respondents opted for the Pension
    Scheme and did not refund the amount of advance taken from
    the C.P.F. including employer's contribution as the nature of the
    advance was non-refundable, which is not covered by
a   Regulation 3 (h) of the said Regulations. Learned counsel
    alternatively argues that even if there is failure of the
    respondents to refund the employer's contribution in terms of
    Regulation 3(h) of the Regulations, it does not disentitle the
    respondents from receiving pensionary benefits as the advance
c   due to employer's contribution of C.P.F. could be duly adjusted
    against the respondents contribution by virtue of Regulation
    20(3) and 24 (3) of the Regulations.
       12. The Pepsu Road Transport Corporation was
  constituted in terms of the provisions of the Road Transport
D Corporations Act, 1950 (hereinafter referred to as "the 1950
  Act"). By reason of the provisions of Section 4 thereof, each
  Corporation is a body corporate having perpetual succession
  and a common seal and can, in its own name, sue and be sued.
E         13. Section 45 of the 1950 Act authorises the Corporation
    to frame Regulations for the administration of the affairs of the
    Corporation. The Section reads :-
          "45. Power to make Regulations.-(1) A Corporation may,
          with the previous sanction of the State Government, make
F         Regulations, not inconsistent with this Act and the rules
          made thereunder, for the administration of the affairs of the
          Corporation.
          (2) In particular, and without prejudice to the generality of
          the foregoing power, such Regulations may provide for all
G         or any of the following matters, namely-
          (a) the manner in which, and the purposes for which,
          persons may be associated with the Board under Section
          10;
H
    PEPSU ROAD TRANSPORT CORPORATION,                       579
    PATIALA v. MANGAL SINGH [H.L. DATIU, J.]

    (b) the time and place of meetings of the Board and the        A
    procedure to be followed in regard to transaction of
    business at such meetings;

    (c) the .conditions of appointment ·and service and the
    scales of pay of officers and other employees of the
    Corporation other than the Managing Director, the Chief        8
    Accounts Officer and the Fin"ancial Adviser or, as the case
    may be, the Chief Accounts Officer-cum-Financial Adviser;

    (d) the issue of passes to the' employees of the Corporation
    and other persons under Section 19;                            c
    (e) the grant of refund in respect of unu~ed tickets and
    concessional passes under Section 19."

    14. The Regulations provide for the grant ·bf retirement
benefits to the employees of the PEPSU Road Transport              o
Corporation with effect frorn 15.06.1992.

     15. To appreciate the point in issue, it would be necessary
to refer to the relevant Regulations :
                                                  '
    "Regulation 3. Application: (1) These Regulations shall        E
    apply to the employees of th.e PEPSU Road Transport
    Corporation who:
    (i) Were/are appointed on or after the date of issue of
    Regulations ·on whole-time and
                                                                   F
    reg~lar basis; and

    (ii) Were working immediately before the date of issue of
    Regulations and opt for these Regulations.
    (2) These Regulations shall not apply to the employees,        G
    who:
    (a) Opt out of these Regulations.
      .          ~                   '

    (b) Are on deputation with the Corporation.
                                                                   H
    580       SUPREME COURT REPORTS                  [2011] 6 S.C.R.


A         (c) Are paid out of contingencies.
          (d) Are work charged employees.
          (e) Are employed on contract basis, except when the
          contract provided otherwise.
B
          (f) Are re-employed after superannuation.
          (g) Are specifically excluded wholly or partly from the
          operation of these Regulations; and
          h) Opt for the PRTC Employees Pension/Gratuity and
c         Regulations General Provident Fund, 1992, but failed to
          refund the amount of advance taken out of the Employer's
          share of the Contributory Provident Fund alongwith interest
          thereon within the stipulated period."
D         Regulation 4. Exercise of Option: The option under clause
          (ii) of the sub-rule (1) of Regulation 3 shall be exercised
          in duplicate in writing in Form I so as to reach the
          managing director as forwarded by the general manager
          in case of depots and administrative officer in the case of
E         headquarters with his counter signatures within a period
          of six months from the date of issue of these Regulations.
          Provided that:
          (i) In the case of an employee, who on the date of the issue
F         of these Regulations was abroad or on leave, the option
          shall be exercised within a period of six months from the
          date of taking the charge of his post.
          (ii) Where an employee is under suspension, on the date
          of issue of these Regulations, the option shall be exercised
G         within a period of six months from the date of his joining
          the duty.
          (iii) An option once exercised shall be final, provided the
          concerned employee deposits the Corporation's share of
H         C.P. Fund received by him - taken in advance, if any, within
     PEPSU ROAD TRANSPORT CORPORATION,                       581
     PATIALA v. MANGAL SINGH [H.L. DATTU, J.]
\
 \   a period of six months from the date of issue of                A
     Regulations and if a person fails to exercise his option
     under the said Regulations within the specified period
     referred to above, it shall be deemed he has opted to
     continue for the existing Contributory Provident Fund
     benefit.                                                        8
     {iv) An employee who dies on or after the issue of these
     Regulations and who could not exercise his option the legal
     heir of such employee, who is entitled to receive retirement
     benefits under the said Regulations, shall exercise option,
     subject to the condition that the legal heir shall have to      c
     deposit the amount of the Corporation's share of the C.P.
     Fund received by the deceased employee.

     (v) The employee recruited after the introduction of the said
     pension Regulations will be covered under these                 D
     Regulations.
     Regulation 20. Subscri~tion and Maintenance of General
     Provident Fund Account: (1) The employees, who were
     appointed on or after the commencement of these
     Regulations and also to the existing employees, who opt         E
     for those Regulations shall contribute towards the General
     Provident Fund at the rate prescribed by the Punjab
     Government for their employees. An employee may,
     however, subscribe voluntarily at higher rate than that
     prescribed by the Punjab Government. The Fund shall be          F
     regulated in accordance with the rules and procedure to
     be prescribed by the Punjab Government from time to time.
     (2) The date of switchover for the existing employees to
     General Provident Fund shall be date of issue of these
     Regulations. The Corporation shall maintain the General         G
     Provident Fund Account at head office level.
     (3) An employee may be sancationed an advance out of
     his own share (General Provident Fund) for transfer to
     Pension and Gratuity to meet with his liability of advance      H
    582       SUPREME COURT REPORTS                   [2011] 6 S.C.R.

A         taken by him out of the employer's share of the Contributory
          Provident Fund.
          Regulation 24. Adjustment and Recovery of dues: (1) The
          competent authority shall take steps to assess the dues
          outstanding against the employee two years before the
B
          date on which he is due to retire on superannuation.
          (2)The assessment of the outstanding dues against the
          employees shall be completed by the competent authority
          eight months prior to the date of his retirement.
c         (3) The dues as assessed including those dues which
          come to the notice subsequently and which remain
          outstanding till the date of retirement of the employee, shall
          be adjusted against the amount of death-cum-retirement
          gratuity becoming payable to the employee on his
D         retirement.
          (4) When an employee retries from service, an office shall
          be issued to that effect by competent authority.
        16. It is well settled law that the Regulations made under
E the statute laying down the terms and conditions of service of
  employees, including the grant of retirement benefits, has the
  force of law. The Regulations validly made under statutory
  powers are binding and effective as the enactment of the
  competent legislature. The statutory bodies as well as general
F public are bound to comply with the terms and conditions laid
  down in the Regulations as a legal compulsion. Any action or
  order in breach of the terms and conditions of the Regulations
  shall amount to violation of Regulations which are in the nature
  of statutory provisions and shall render such action or order
G illegal and invalid.
         17. In Sukhdev Singh v. Bhagatram Sardar Singh
    Raghuvanshi, (1975) 1 SCC 421, this Court, while elaborately
    discussing the nature and effect of the Regulations made under
    the Statute, has observed:
H
PEPSU ROAD TRANSPORT CORPORATION,                       583
PATIALA v. MANGAL SINGH [H.L. DATTU, J.]
 "23. The not.iceable feature is that these statutory bodies    A
 have no free hand in framing the conditions and terms of
 service of their employees. These statutory bodies are
 bound to apply the terms and conditions as laid down in
 the Regulations. The statutory bodies are not free to
 make such terms as they think fit and proper. Regulations      B
 prescribe the terms of appointment, conditions of service
 and procedure for dismissing employees.' These
 Regulations in the statutes are described as "status fetters
 on freedom of contract". The Oil and Natural Gas
 Commission Act in Section 12 specifically enacts that the      c
 terms and conditions of the employees may be such as
 may be provided by Regulations. There is a legal
 compulsion on the Commission to comply with the
 Regulations. Any breach of such compliance would be
 a breach of the Regulations which are statutory                0
.provisions. In other statutes under consideration viz. the
 Life Insurance Corporation Act and the Industrial Finance
 Corporation Act though there is no specific provision
 comparable to Section 12 of the 1959 Act the terms and
 conditions of employment and conditions of service are         E
 provided for by Regulations. These Regulations are not
 only binding on the authorities but also on the public.


30. In this view a Regulation is not an agreement or
contract but a law binding the corporation, its officers,       F
servants and the members of the public who come within
the sphere of its operations. The doctrine of ultra vires as
applied to statutes, rules and orders should equally apply
to the Regulations and any other subordinate legislation.
The Regulations made under power conferred by the               G
statute are subordinate legislation and have the force and
effect, if validly made, as the Act passed by the
competent legislature.

                                                                H
    584       SUPREME COURT REPORTS                 [2011] 6 S.C.R.

A         33. There is no substantial difference between a rule and
          a Regulation inasmuch as both are subordinate legislation
          under powers conferred by the statute. A Regulation
          framed under a statute applies uniform treatment to every
          one or to all members of some group or class. The Oil
B         and Natural Gas Commission, the Life Insurance
          Corporation and Industrial Finance Corporation are all
          required by the statute to frame Regulations inter alia for
          the purpose of the duties and conduct and conditions of
          service of officers and other employees. These
c         Regulations impose obligation on the statutory
          authorities. The statutory authorities cannot deviate from
          the conditions of service. Any deviation will be enforced
          by legal sanction of declaration by courts to invalidate
          actions in violation of rules and Regulations. The
          existence of rules and Regulations under statute is to
D
          ensure regular conduct with a distinctive attitude to that
          conduct as a standard. The statutory Regulations in the
          cases under consideration give the employees a
          statutory status and impose restriction on the employer
          and the employee with no option to vary the conditions.
E         An ordinary individual in a case of master and servant
          contractual relationship enforces breach of contractual
          terms. The remedy in such contractual relationship of
          master and servant is damages because personal service
          is not capable of enforcement. In cases of statutory
F         bodies, there is no personal element whatsoever
          because of the impersonal character of statutory bodies.
          In the case of statutory bodies it has been said that the
          element of public employment or service and the support
          of statute require observance of rules and Regulations."
G
       18. In Vidya Dhar Pande v. Vidyut Grih Siksha Samiti,
  (1988) 4 sec 734, the services of the appellant-employee
  were terminated, in contravention of the service Regulations,
  by the respondent school. This Court, while reinstating the
H employee in service, has agreed with the observations made
   PEPSU ROAD TRANSPORT CORPORATION,                       585
   PATIALA v. MANGAL SINGH [H.L. DATTU, J.]
in Sukhdev Singh's case (Supra). While doing so, this Court        A
has stated:
    9. The question whether a Regulation framed under power
    conferred by the provisions of a statute has got statutory
    power and whether an order made in breach of the said
                                                                   8
    Regulation will be rendered illegal and invalid, came up for
    consideration before the Constitution Bench in the case
    of Sukhdev Singh v. Bhagatram Sardar Singh
    Raghuvanshi. In this case it was held that: [SCC p. 438 :
    SCC (L&S) P. 118, para 33]
                                                                   c
    "There is no substantial difference between a rule and a
    Regulation inasmuch as both are subordinate legislation
    under powers conferred by the statute. A Regulation
    framed under a statute applies uniform treatment to every
    one or to all members of some group or class. The Oil and      o
    Natural Gas Commission, the Life Insurance Corporation
    and Oil and Industrial Finance Corporation_ are all required
    by the statute to frame Regulations inter alia for the
    purpose of the duties and conduct and conditions of
    service of officers and other employees. These                 E
    Regulations impose obligation on the statutory authorities.
    The statutory authorities cannot deviate from the
    conditions of service. Any deviation will be enforced by
    legal sanction of declaration by courts to invalidate
    actions in violations of rules and Regulations. The            F
    existence of rules and Regulations under statute is to
    ensure regular conduct with a distinctive attitude to that
    conduct as a standard. The statutory Regulations in the
    cases under consideration give the employee a statutory
    status and impose restriction on the employer and the
    employee with no option to vary the conditions."               G
    10. There is, therefore, no escape from the conclusion
    that Regulations have force of Jaw. The order of the High
    Court must, therefore, be reversed on this point
    unhesitatingly. -                                              H
    586       SUPREME COURT REPORTS                  [2011] 6 S.C.R.

A      19. Even in the case of non-statutory Regulations,
  specifically providing for the grant of pensionary benefits to the
  employee qua his employer shall be governed by the terms and
  conditions encapsulated in such non-statutory Regulations. In
  Union of India v. Brig. P. K. Dutta (Retd.), 1995 Supp (2) SCC
B 29, this Court :
          7. It is true that the Pension Regulations are non-statutory
          in character. But as held by this Court in Major (Retd.) Hari
          Chand Pahwa v. Union of India 1995 Supp (1) SCC 221 ,
          the pensionary benefits are provided for and are payable
c         only under those Regulations and can, therefore, be
          withheld or forfeited under and as provided by those very
          Regulations. The following observations from the said
          judgment makes the position clear:

D          "We do not agree even with the second contention
           advanced by the learned counsel. The provisions of
           Regulation 16(a) are clear. Even if it is assumed that the
           Pension Regulations have no statutory force, we fail to
           understand how the provisions of the said Regulations
E          are contrary to the statutory provisions under the Act or
          the Rules. The pension has been provided under these
          Regulations. It is not disputed by the teamed counsel that
          the pension was granted to the Corporation under the
          said Regulations. The Regulations which provided for the
          grant of pension can also provide for taking it away on
F         justifiable grounds."
       20. In Rajasthan SRTC v. Bal Mukund Bairwa, (2009) 4
  SCC 299, the services of the employee of the appellant were
  terminated by virtue of service Regulations (Statutory) made
G under Section 45 of the Road Transport Corporation Act, 1950.
  This Court, while upholding the jurisdiction of the Civil Court to
  entertain the suit filed by the employee challenging the order
  of termination of his services, has held:
          "38. Where the relationship between the parties as
H         employer and employee is contractual, the right to enforce
     PEPSU ROAD TRANSPORT CORPORATION,                        587
     PATIALA v. MANGAL SINGH [H.L. DATTU, J.]
     the contract of service depending on personal volition of        A
     an employer is prohibited in terms of Section 14(1)(b) of
     the Specific Relief Act, 1963. It has, however, four
     exceptions, namely, (1) when an employee enjoys a status
     i.e. his conditions of service are governed by the rules
     framed under the proviso appended to Article 309 of the          B
     Constitution of India or a statute and would otherwise be
     governed by Article 311 (2) of the Constitution of India; (2)
     where the conditions of service are governed by statute
     or statutory Regulation and in the event mandatory
     provisions thereof have been breached; (3) when the              c
     service of the employee is otherwise protected by a
     statute; and (4) where a right is claimed under the Industrial
     Disputes Act or sister laws, termination of service having
     been effected in breach of the provisions thereof.
     39. The appellant Corporation is bound to comply with            D
     the mandatory provisions of the statute or the
     Regulations framed under it. A subordinate legislation
     when validly framed becomes a part of the Act ... "
      21. Pension is a retirement benefit partaking of the E
character of regular payment to a person in consideration of
the past services rendered by him. We hasten to add that
although pension is not a bounty but is claimable as a matter
of right, yet the right is not absolute or unconditional. The person
claiming pension must establish his entitlement to such pension
in law. The entitlement might be dependent upon various F
considerations or conditions. In a given case, the retired
employee is entitled to pension or not depend on the provisions
and interpretation of Rules and Regulations. The Contributory
Provident Fund appears to be simple mechanism where an
employee is paid the total amount which he has contributed G
along with the equal contribution made by the employer
ordinarily at the time of retirement of an employee. In short, we
quote what was repeatedly said by this Court that "pension is
payable periodically as long as the pensioner is alive whereas
C.P.F. is paid only once on retirement". Therefore, conceptually, H
    588       SUPREME COURT REPORTS                  [2011) 6 S.C.R.


A pension and C.P.F. are separate and distinct.
         22. Now we will try to explain the essential distinction
    between these two retirement benefits that an employee may
    derive at the time of his retirement from service. The C.P.F. was
    introduced with the object of providing social security to the
9   employees working in factories and other establishments, after
    their retirement. The C.P.F. was instituted as a Compulsorily
    Contributory Provident Fund by the enactment of the
    Employees' Provident Funds and Miscellaneous Provisions
    Act, 1952 (hereinafter referred to as "the Provident Fund Act"}.
C   The employee registered under the Provident Fund Act shall
    be entitled to claim all benefits available under the C.P.F.
    Scheme framed under the Act. This CPF Scheme requires
    opening of the account for the employee by the employer. The
    Government/employer is under the continuous obligation to
D   deposit equal or matching contribution made by the employee
    in his account till he retires. Oncd the employee is retired, then
    his rights qua Government/employer's contribution into his
    C.P.F. account finally crystallizes. After retirement, this entire
    C.P.F. amount is paid to the employee as a retrial benefit. On
E   the receipt of C.P .F. amount, the relationship between employee
    and employer ceases to exist without leaving any further legal
    right or obligation qua each other.
     23. In Committee for Protection of Rights of ONGC
F Employees v. O.N.G.C., (1990) 2 SCC 472, this Court has
    stated:
          "12. Employees' Provident Funds and Miscellaneous
          Provisions Act, 1952 (hereinafter referred to as 'the
          Provident Fund Act') has been enacted with the object of
G         providing social security to the employees in factories and
          other establishments covered by the said Act, after their
          retirement. In the Statement of Objects and Reasons for
          the said enactment it was mentioned as under:
          "The question of making some provision for the future of
H         the industrial worker after he retires, or for his dependants
   PEPSU ROAD TRANSPORT CORPORATION,                         589
   PATIALA v. MANGAL SINGH [H.L. DATTU, J.]
    in case of his early death, has been under consideration        A
    for some years. The ideal way would have been provisions
    through old age and survivors' pensions as has been done
    in the industrially advanced countries. But in the prevailing
    conditions in India, the institution of a pension scheme
    cannot be visualised in the near future. Another alternative    B
    may be for provision of gratuities after a prescribed period
    of service. The main defect of a gratuity scheme, however,
    is that the amount paid to a worker or his dependants
    would be small, as the worker would not himself be making
    any contribution to the fund. Taking into account the various   C
    difficulties, financial and administrative, the most
    appropriate course appears to be the institution
    compulsorily of contributory provident fund in which both
    the worker and the employer would contribute. Apart from
    other advantages, there is the obvious one of cultivating
    among the workers a spirit of saving something regularly."      D
    13. This indicates that the scheme of Contributory
    Provident Fund, by way of retiral benefit, envisaged by the
                                             a
    Provident Fund Act, is in the nature of substitute for old
    age pension because it was felt that in the prevailing          E
    conditions in India, the institution of a pension scheme
    could not be visualised in the near future. It was not the
    intention of Parliament that Provident Fund benefit
    envisaged by the said Act would be in addition to
    pensionary benefits."                                           F
    24. In Krishena Kumar v. Union of India, (1990) 4 SCC
207, this Court has held :
    "32. The Railway Contributory Provident Fund is by
    definition a fund. Besides, the government's obligation         G
    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 right$ qua
    the government in respect of the Provident Fund is finally
    crystallized and thereafter no statutory obligation             H
    590       SUPREME COURT REPORTS                 [2011] 6 S.C.R.

A         continues. Whether there still remained a moral obligation
          is a different matter."

        25. In A// India Reserve Bank Retired Officers' Assn. v.
    Union of India, 1992 Supp (1) SCC 664, this Court, while
  considering the case of the Pension Scheme and Contributory
B Provident Fund Scheme, has held:
          "10 .... in the case of an employee governed by the
          Contributory Provident Fund Scheme his relations with
          the employer come to an end on his retirement and
c         receipt of the contributory provident fund amount but in
          the case of an employee governed under the Pension
          Scheme his relations with the employer merely undergo
          a change but do not snap altogether."
        26. Pension is a periodic payment of an amount to the
D employee, after his retirement from service by his employer till
  his death. In some cases, it is also payable to the dependents
  of the deceased employee as a family pension. The pension
  is in a nature of right which employee has earned by rendering
  long service to the employer. It is a deferred payment of
E compensation for past service. It is dependable on the
  condition of rendering of service by the employee for a certain
  fixed period of time with decent behavior. Like C.P.F., the
  object of providing pensionery benefit under the Pension
  Scheme is to provide sociaj security to the employee and his
F family after his retirement from service. The Government's/
  Employer's obligation under the Pension Scheme begins only
  when the employee retires and it continues till the death of the
  employee.
          27. In Deokinandan Prasad v. State of Bihar, (1971) 2
G SCC 330, this Court has held:
          "31 .... pension is not a bounty payable on the sweet will
          and pleasure of the Government and that. on the other
          hand, the right to pension is a valuable right vesting in a
H         government servant.
    PEPSU ROAD TRANSPORT CORPORATION,                         591
    PATIALA v. MANGAL SINGH [H.L. DATIU, J.]

     28. In 0. S. Nakara v. Union of India, (1983) 1 SCC 305,         A
this court has observed:

   ."27. 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         B.
    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 dependents for old age, disability, or death (usually      C
     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 soci.al service
     programmes of the country. Pensions under the first head         D
     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 recent origin, though they are of the greatest
     magnitude. There are other views about pensions such as          E
     charity, paternalism, deferred pay, rewards for service
     rendered, or as a. means of promoting general welfare
     (see Encyclopaedia Britannica, Vol. 17, p. 575). But these
     views have become otiose.

    28. Pensions to civil employees of the Government and the         F
    defence personnel as administered in India appear to be
    a compensation for service rendered in the past. However,
    as held in Douge v. Board of Education, 302 US 74, a
    pension is closely akin to wages in that it consists of
    payment provided by an employer, is paid in                       G
    consideration of past service and serves the purpose of
    helping the recipient meet the expenses of living. This
    appears to be the nearest to our approach to pension with
    the added qualification that it should ordinarily ensure
    freedom from undeserved want.                                     H
    592       SUPREME COURT REPORTS                  (2011) 6 S.C.R.


A         29. 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 fall of life
B          when physical and mental prowess is ebbing
          corresponding to aging process and, therefore, one is
          required to fall back on savings. One such saving in kind
           is when you give your best in the hey-day of life to your
           employer, in days of invalidity, economic security by way
          of periodical payment is assured. The term has been
c         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 a government employee is earned
           by rendering long and efficient service and therefore can
D          be said to be a defeffed portion of the compensation or
           for service rendered. In one sentence one can say that
           the most practical raison d'etre 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
E          nothing to fall back upon."
         29. In Poonamal v. Union of India, (1985) 3 SCC 345,
    this Court has observed:

          "7.... pension is a right not a bounty or gratuitous payment.
F         The payment of pension does not depend upon the
          discretion of the Government but is governed by the
          relevant rules and anyone entitled to the pension under the
          rules can claim it as a matter of right. (Deoki Nandan
          Prasad v. State of Bihar 1971 (2) SCC 330, State of
G         Punjab v. Iqbal Singh.1976 (2) SCC 1 and D.S. Nakara v.
          Union of India 1983 (1) SCC 305.) Where the Government
          servant rendered service, to compensate which a family
          pension scheme is devised, the widow and the dependent
          minors would equally be entitled to family pension as a
H         matter of right. In fact we look upon pension not merely
     PEPSU ROAD TRANSPORT CORPORATION,                         593··
     PATIALA v. MANGAL SINGH [H.L. DATTU, J.]

     as a statutory right but as the fulfilment of a constitutional        A
     promise inasmuch as it partakes the character of public
     assistance in cases of unemployment, old-age,
     disablement or similar other cases of undeserved want.
     Relevant rules merely make effective the constitutional
     mandate."                                                             B

     30. In Krishena Kumar v. Union of India (supra) this Court
 has held:

     "32 .... On the other hand under the Pension Scheme the
     government's obligation does not begin until the employee             c
     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."
       31. In Prabhu Narain v. State of U.P.,(2004) 13 SCC 662,            D
· this Court has observed:
                                                                       i
     "5. No doubt pension is not a bounty, it is a valuable right ;
                                                                  I
     given to an employee, but, in the first place it must be
     shown that the employee is entitled to pension under a E
     particular rule or the scheme, as the case may be."
     32. In U.P. Raghavendra Acharya v. State of Karnataka,
 (2006) 9 SCC 630, this Court has held:

     "25. Pension, as is well known, is not a bounty. It is treated        F
     to be a deferred salary. It is akin to right of property. It is
     correlated and has a nexus with the salary payable to the
     employees as on the date of retirement."
       33. The term pension has been defined in American
. Jurisprudence 2d, Vol. 60, at pg. 879 as thus:                       G
     "However, by modern usage, the "pension" is not
     restricted to pure gratuities. Thus, it has been held that
     a pension paid a governmental employee for long and
     efficient service is not an emolument the payment of                  H
    594           SUPREME COURT REPORTS                [2011) 6 S.C.R.


A         which is barred by a state constitutional provision, but is
          a deferred portion of the compensation earned for
          services rendered. . .. A pension is closely akin to wages
          in that it consists of payments provided by an employer,
          is paid in consideration of past services, and serves the
B         purpose of helping the recipient meet the expense of
          living."

        34. The concept of pension has been discussed in
    Halsbury's Laws of England, Fourth Edition (Reissue), Vol. 16,
    para. 400 as thus:
c
          "Meaning of 'pension'. '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
0         any scheme or arrangement having its object or one of its
          objects to make provision in respect of persons serving
          in particular employments for providing them with
          retirement benefits ... 'Pension' does not include:
           (i)       a payment to an employee which consists solely
E                   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
F
                   with the scheme or arrangement;

           (iii)   a periodical payment or lump sum, in so far as that
                   payment or lump sum represents compensation
                   under the statutory compensation schemes and is
G                  payable under a statutory provision, whether made
                   or passed before, on or after 31st July 1978"
        35. The concept of pension has also been considered in
    Corpus Juris Secundum, Vol. 70, at pg. 423 as thus:

H         "A pension is a periodical allowance of money granted by
       PEPSU ROAD TRANSPORT CORPORATION,                        595
       PATIALA v. MANGAL SINGH [H.L. DATIU, J.]
       the government in consideration or recognition of                A
       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."
                                                                    8
     36. To sum up, we state that the concept of pension has
been considered by this court time and again and in catena of
cases, it has been observed that the Pension is not a charity
or bounty nor is it a conditional payment solely dependent on
the sweet will of the employer. It is earned for rendering a long
and satisfactory service. It is in the nature of deferred payment C
for past services. It is a social security plan consistent with the
socio-economic requirements of the Constitution when the
employer is a State within the meaning of Article 12 of the
Constitution rendering social justice to a superannuated
government servant. It is a right attached to the office and D
cannot be arbitrarily denied. [see A.P. Srivastava v. Unio{l of
India, (1995) 6 SCC 227, Vasant Gangaramsa Chandan v.
State of Maharashtra, (1996) 10 SCC 148, Subrata Sen v.
Union of India,' (2901) 8 SCC 71, Union of India v. P.O.
Yadav, (2002) 1        :sec
                          405, Grid Corpn. of Orissa v.                 E
Rasananda Oas, (2003) 10 SCC 297, All India Reserve Bank
Retired Officers Assn. v. Union of India (Supra)].

    37. Having noticed the conceptual difference between the
concept of C.P.F. and pension, we will now. notice the
submissions made by the learned counsel for the parties to the          F
tis.
     38. The common .thread which runs through all these
appeals eanvassed before us is that the respondents have
failed to comply with the terms and conditions of the                   G
Regulations, which govern the Pension Scheme. We have
already consjdered the nature and effect of the Regulations,
which are made under a statute. These statutory Regulations
require to be interpreted in the same manner which is adopted
while interpreting any· o~her statutory provisions. The                 H
    596     SUPREME COURT REPORTS                  [2011) 6 S.C.R.

A Corporation. as well as respondents are obliged and bound to
  comply with its mandatory conditions and requirements. Any
  action or conduct deviating from these conditions shall render
  such action illegal and invalid. Moreover, the respondents have
  availed the retiral benefits arising out of the C.P.F and gratuity
B without any protest. The respondents in all these appeals,
  before us, have made a claim for pensionary benefits under the
  Pension Scheme for the first time only after their retirement with
  an unreasonable delay of more than 8 years. It is not in dispute,
  in some appeals, that the respondents never opted for the
c Pension Scheme for their alleged want of knowledge for non-
  service of individual notices. In other appeals, although
  respondents applied for the option of the Pension Scheme but
  indisputably never fulfilled the quintessential conditions
  envisaged by the Regulations which are statutory in nature.
D       39. The learned counsel for the respondents in support of
  their contention for want of knowledge of the Pension Scheme
  due to non-service of individual notices relied on the decision
  of this Court in Dakshin Haryana Bijli Vitran Nigam v. Bachan
  Singh, (2009) 14 SCC 793. The said decision is clearly
E distinguishable on facts. In that case, the appellant, Haryana
  State Electricity Board, had issued instructions dated
  23.06.1993 and circular dated 09.08.1994 in order to provide
  an option to the employees for pensionary benefits in lieu of
  their work charged service with an express condition of noting .
F of instructions from all the employees and acknowledging the
  receipt of the letter. In these appeals, before us, there Is no
  such condi•ion of noting from the employees or serving
  individual notices in the Pension Scheme or Regulations.
  Therefore, in our opinion, Bachan Slngh's decision will not
G assist the respondents.
       40. In our view, in the facts and circumstances of the
  present case and in view of absence of such condition in the
  scheme, it is not necessary for the Corporation to give an
  individual notice to respondents for exercising of option for
H pension Scheme and also for asking respondent to refund the·
    PEPSU ROAD TRANSPORT CORPORATION,                       597
    PATIALA v. MANGAL SINGH [H.L. DATTU, J.]
employers contribution of C.P.F. at each stage. Furthermore,       A
when notice or knowledge of the Pension Scheme can be
reasonably inferred or gathered from the cond'uct of,the
respondents in their ordinary course of business and from
surrounding circumstances, then, it will constitute a sufficient
notice in the eyes of law. 1.n Union of lndi.f3 v. M.K. Sarkar,    B
(2010) 2 SCC 59, this Court has :
    21. The Tribunal in this case has assumed that being
    "aware" of the scheme was not sufficient notice to a retiree
    to exercise the option and individ~al written
    communication was mandatory. The Tribunal was of the C
    view that as the Railways remained unrepresented and
    failed to prove by positive evidence, that the respondent
    was informed of the availability of the option, it should be
    assumed that there was non-compliance with the
    requirements relating to notice. The High Court has D
    impliedly accepted and affirmed this view. The assumption
    is not sound .
   . 22. The Tribunal was examining the issue with reference ·
     to a case where there was a delay of 22 years. A person, E
     who is aware of the availability of option, cannot contend
     that he was not served a written notice of the availability
     of the option after 22 years. In such a case, even if Railway
     Administration was represented, it was not reasonable to
     expect the department to maintain the records of such
     intimation(s) of individual notice to each employee after 22 F
     years. In fact by the time the matter was considered more
     than nearly 27 years had elapsed. Further when notice or
     knowledge of the availability of the option was clearly
     inferable, the employee· cannot after a long. time (in this
     case 22 years) be heard to contend that in the absence G
   . of written intimation ·of the option, he is still entitled to
     exercise the option.
    23. This Court considered the meaning of "notice" in
    Nilkantha Sidramappa Ningashetti v. Kashinath                  H
    598       SUPREME COURT REPORTS                  [2011) 6 S.C.R.

A          Somanna Ningashetti, AIR 1962 SC 666. This Court held:
           (AIR p. 669, para 10)
           "10. We see no ground to construe the expression 'date
           of service of notice' in Column 3 of Article 158 of the
           Limitation Act to mean only a notice in writing served in a
B          formal manner. When the legislature used the word 'notice'
           it must be presumed to have borne in mind that it means
           not only a formal intimation but also an informal one.
           Similarly, it must be deemed to have in mind the fact that
           service of a notice would include constructive or informal
c          notice. If its intention were to exclude the latter sense of
           the words 'notice' and 'service' it would have said so
           explicitly."
        41. The Regulation 4 (iii) of the Regulations is a deeming
0 provision to the effect: firstly, if an employee fails to exercise
  his option within a period of 6 m,.nths from the date of issue of
  these Regulations and; secondly, even on exercise of option,
  if an employee fails to refund the amount of advance taken from
  employers contribution of the C.P.F. within 6 months from the
E date of issue of these Regulations, then it shall be deemed that
  employee has opted to continue for the existing C.P.F. benefit.
  Therefore, the failure on the part of the respondents to opt for
  the Pension Scheme and refund the advance taken from the
  employer's contribution of C.P.F. will disentitle them from
F claiming any benefit under the Pension Scheme. Therefore, we
  cannot sustain the Judgment and order passed by the High
  Court.
       42. The appeals are accordingly allowed and the
  impugned Judgment and orders passed by the High Court are
G set aside. There will be no order as to costs.

    D.G.                                           Appeals allowed.