THE RESERVE BANK OF INDIAversusM.T. MANI AND ANOTHER

                 [2025] 5 S.C.R. 1128 : 2025 INSC 769

                       The Reserve Bank of India
                                   v.
                         M.T. Mani and Another
                      (Civil Appeal No. 13962 of 2024)
                                 23 May 2025
           [Abhay S. Oka and Augustine George Masih,* JJ.]


                           Issue for Consideration
       RBI issued Administration Circular No.1 on 14.09.2020 opening a
       last option for the serving and retiring employees to switch over to
       pension scheme from CPF scheme. Whether the fixing of the cut
       off date i.e. 01.07.2020 for grant of pensionary benefits and that
       too prospectively is in consonance with law or is discriminatory
       and arbitrary.

                                  Headnotes†
       Payment of Gratuity Act, 1972 – RBI Pension Regulations,
       1990 – Contributory Provident Fund – After introduction of
       Pension Regulations, 1990, RBI gave option to the serving and
       retiring employees to switch over to pension scheme from CPF
       scheme in the year 1990, 1992, 1995 and 2000 – Respondent
       No.1 joined service of the RBI on 14.09.1981 and became a
       member of the CPF Scheme in operation then for the staff – He
       got the aforesaid four options in his tenure, however, he chose
       not to join the Pension Scheme rather continued with the CPF –
       Respondent retired on 30.11.2014 – After the Government of
       India rejected the proposal of RBI for another option for CPF
       optees to switch to the Pension Scheme, respondent no.1
       filed writ petition – During the pendency of writ petition, RBI
       issued Administration Circular No.1 on 14.09.2020 opening a
       last option for the serving and retiring employees – Thereafter,
       respondent opted for for the Pension Scheme and in the
       pending writ petition moved for an amendment to challenge
       the denial of entitlement to the grant of arrears of pension
       from the date of retirement – Amendment was allowed – The
       writ petition was dismissed by the Single Judge of High Court,
       holding therein that the respondent had well-informed details


* Author
[2025] 5 S.C.R.                                                               1129

           The Reserve Bank of India v. M.T. Mani and Another


     regarding the non-grant of arrears of pension and eligibility
     for pension from a particular date i.e. 01.07.2020 – Aggrieved,
     respondent filed writ appeal before the Division Bench of the
     High Court and same was allowed – Correctness:
     Held: Each administrative circular was independent in itself where
     the competent authority had taken a well-informed, considered,
     and gauged decision with regard to the applicability, liability and
     financial implications, apart from the other aspects – Each time,
     as is apparent, different aspects were taken note of – In some
     cases, it was provided for retrospective effect, while in others it was
     restricted to employees up to a particular date, and yet another
     only to those employees who were in service while on yet another
     occasion to both ex-employees and in-service employees –
     What is apparent, therefore, is that on each occasion, there was
     a specific time frame fixed for giving an option, and the benefit
     was similarly limiting it to the beneficiaries – The financial burden
     and the liability are prominent aspects taken into consideration by
     the Government while granting its no objection to the proposed
     Scheme – In the instant case, the retrospective financial burden
     would have resulted in an unjustified liability of over 900 crores
     for the RBI, which would have led to a financially unsustainable
     scenario – It is settled that individual hardships cannot justify
     altering a rule of general application and underscored that the
     determination of cut-off dates is a matter of policymaking – This
     function squarely lies within the domain of the rule-making authority,
     not the judiciary, as courts cannot assume the role of framing
     or modifying policy decisions in the guise of judicial review –
     Therefore, it cannot be said that the cut off date, as fixed for
     grant of pension while refusing its retrospectivity, thereof would be
     arbitrary or illegal or discriminatory in nature – The Respondent,
     therefore, cannot be permitted to choose a particular aspect of
     the Scheme that makes it unworkable, and that too for his own
     financial benefit – Approbation and reprobation would not be
     permissible in such schemes – Respondent having once opted
     for the Scheme cannot be permitted to not accept a part thereof
     while intending to take the benefit of the Scheme as a whole –
     Thus, the impugned judgment passed by the Division Bench of
     High Court is hereby set aside and the Judgment of the Single
     Judge dismissing the writ petition preferred by the respondent is
     restored. [Paras 29, 30, 33, 34, 39, 42]
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                            Case Law Cited
    Mohammad Ali Imam and Others v. State of Bihar and Others
    (2020) 5 SCC 685; State of Punjab and Others v. Amar Nath
    Goyal and Others [2005] Supp. 2 SCR 549 : (2005) 6 SCC
    754 – relied on.
    State of Tripura and Others v. Anjana Bhattacharjee and Others
    [2022] 11 SCR 14 : (2022) 19 SCC 705; Hirandra Kumar v. High
    Court of Judicature at Allahabad and Another [2019] 2 SCR
    608 : (2020) 17 SCC 401; Himachal Road Transport Corporation
    and Another v. Himachal Road Transport Corporation Retired
    Employees Union [2021] 2 SCR 104 : (2021) 4 SCC 502; T.N
    Electricity Board v. R. Veerasamy and Others [1999] 2 SCR 221 :
    (1999) 3 SCC 414 – referred to.

                              List of Acts
    Gratuity Act, 1972; RBI Pension Regulations, 1990.

                           List of Keywords
    Service Law; Pension; Contributory Provident Fund; Pension
    Scheme; Retirement date; Arrears of pension; Serving and retiring
    employees; Switch over to pension scheme from CPF scheme;
    Entitlement to the grant of arrears of pension from the date of
    retirement; Financial burden; Liability; Retrospective financial
    burden; Individual hardships; Policymaking; Judiciary.

                          Case Arising From
    CIVIL APPELLATE JURISDICTION: Civil Appeal No. 13962 of 2024
    From the Judgment and Order dated 18.12.2023 of the High Court
    of Kerala at Ernakulam in WA No. 1037 of 2023

                       Appearances for Parties
    Advs. for the Appellant:
    Shyam Divan, Sr. Adv., Ramesh Babu M.R., Nisha Sharma,
    Yashvardhan Singh, Ms. Anshula Laroriya, Ms. Jagriti Bharti.
    Advs. for the Respondents:
    Yohannan I, Ms. Aishwarya Mary Mathew, Manu Krishnan G.
[2025] 5 S.C.R.                                                       1131

           The Reserve Bank of India v. M.T. Mani and Another


                Judgment / Order of the Supreme Court

                                Judgment

     Augustine George Masih, J.

1.   In this Appeal, challenge has been raised by the Reserve Bank of
     India (“RBI”) to the Division Bench Judgment of the Kerala High Court
     dated 18.12.2023 whereby the appeal preferred by Respondent No.1
     against the Judgment of a Single Judge dismissing his Writ Petition
     for grant of pension with effect from the date of his retirement i.e.
     01.12.2014, stood dismissed after he exercised his option as per
     the RBI Regulations/Circular dated 14.09.2020.
2.   The facts are not in dispute and therefore are being referred at the
     very outset.
3.   The employees of the RBI prior to 1990 were governed by the
     Contributory Provident Fund (“CPF”) and the payment of the Gratuity
     Act, 1972 (“Gratuity Act”). For the first time, on 29.10.1990, the RBI
     with approval from its Central Board of Directors introduced the
     RBI Pension Regulations, 1990. Employees were informed vide
     Administration Circular No. 6 to the effect that the said regulations
     would come into effect from 01.11.1990 giving an option to the existing
     employees to join the said Pension Scheme or to continue with the
     RBI’s CPF. All new employees who joined on or after 01.11.1990
     were to be governed by the 1990 Regulations. It also provided
     that the employees in service as on 01.01.1986 who retired before
     01.11.1990 were also eligible for pension upon refunding the amount
     of CPF share of the RBI with accrued interest as received by them on
     their retirement, along with simple interest thereon at the rate of 6%.
     According to Regulation 31 thereof, employees retiring between
     01.01.1986 and 31.10.1990, although eligible to join the Pension
     Scheme, would receive the pension only from 01.11.1990 onwards,
     with no arrears for the period before the said date. On 07.02.1992 RBI
     issued another Administration Circular No. 5 amending the Pension
     Regulations, 1990 effective from 06.02.1992. Existing employees
     (excluding those on leave preparatory to retirement) were given a
     fresh option to switch to the Pension Regulations. Here again, no
     retrospective pensionary benefits were granted.
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4.   On 14.10.1995, Administration Circular No. 4 providing for another
     opportunity for existing employees as on 01.11.1992 excluding those
     on Leave Preparatory retirement to opt for the Pension Regulations.
     On this occasion, the refund of the CPF contribution made by the RBI
     and accrued interest was to be effected with 12% simple interest. It
     was clarified that it was not applicable to employees who had retired
     before 01.11.1992 making it prospective.
5.   Three attempts made by the RBI to give another option to its
     employees to switch over from CPF to the Pension Scheme did not
     find favour with the Government of India on 04.02.2002, 26.02.2018
     and 05.03.2019. On 14.09.2020, another Administration Circular
     No. 1 was issued, which allowed existing CPF optees and former
     employees who were in service on or after 01.11.1997 and retired
     with CPF to opt for Pension Regulations. This was obviously, subject
     to the refund of the CPF plus accrued interest amount pertaining
     to the RBI’s share with 12% simple interest. It is apparent that this
     Circular was not applicable to employees who had retired before
     01.11.1997. A detailed memorandum of procedure for option to be
     exercised was issued by the RBI on 20.09.2000.
6.   Respondent No. 1 joined service of the RBI on 14.09.1981 and
     became a member of the CPF Scheme in operation then for the
     staff. During his entire service tenure, until he retired as Manager
     on 30.11.2014, Respondent No.1 got four options to switch over to
     the Pension Scheme, starting from 01.11.1990 till 14.09.2000. He
     chose not to join the Pension Scheme rather continued with the CPF.
     As a matter of fact, on retirement, he was paid the entire dues of
     CPF and Gratuity.
7.   It appears that Respondent No. 1 filed a Writ Petition before the High
     Court of Kerala at Ernakulam on 14.02.2020, after the Government
     of India rejected the proposal of RBI for another option for CPF
     optees to switch to the Pension Scheme on 05.03.2019. He sought
     a direction to the RBI to allow him to exercise the pension option
     as per the 1990 Regulations, and to grant him pension benefits
     with effect from 30.11.2014, his date of retirement, along with 12%
     interest on arrears.
8.   During the pendency of the Writ Petition, the RBI proposed to the
     Government of India to grant a final chance for remaining CPF
[2025] 5 S.C.R.                                                            1133

           The Reserve Bank of India v. M.T. Mani and Another


     optee employees, both serving and retired, to opt for the Pension
     Scheme. No objection was conveyed by the Government to the RBI’s
     proposal on 26.06.2020, for the CPF optees who were in service
     from 01.11.1990 till 15.11.2000.
9.   This permission for the change of option was allowed to the employees
     subject to refund of the CPF amount with accrued interest as received
     from RBI on retirement and simple interest as may be decided by
     the RBI. RBI issued Administration Circular No. 1 on 14.09.2020
     opening a last option for the serving and retiring employees who
     were in Bank service as on 01.11.1990 (the date of introduction of
     the Pension Scheme) and continued as on 15.11.2000 (the closing
     date of the last chance given to the employees to exercise pension
     option). This fresh option for switching over from CPF to Pension
     Scheme would be subject to certain terms and conditions which
     were to be specified as per the detailed instructions to be issued in
     this regard separately by the RBI. However, in this Administration
     Circular No. 1 itself it was clarified that the eligible employees and
     the family members would be entitled to draw monthly pension/family
     pension with effect from 01.07.2020 and no arrears of pension will
     be paid for the period prior thereto. The payment of pension was
     made prospective w.e.f. 01.07.2020. It was further clarified that this
     option was not applicable to the employees who joined bank service
     on or after 01.01.2012 and were governed by the National Pension
     Scheme (NPS). Detailed instructions were issued by the RBI on
     18.09.2020. The relevant portion thereof reads as follows:
           “Please refer to Administration Circular No. 1 dated
           September 14, 2020 regarding opening of option for
           pension.
           2. The employees who were in the Bank’s service as on
           November 1, 1990 and continued as such on November 15,
           2000 are being offered a last opportunity for exercising their
           option for switching over form Contributory Provident Fund
           (CPF) to pension scheme under RBI Pension Regulations,
           1990 (Pension Regulations), covering the categories, viz.
           serving employees, retired employees and eligible family
           members of deceased employees; as under:
           (i) Serving employees of the Bank who had earlier chosen
           not to be governed by Pension Regulations and continued
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        to retain CPF option, subject to transfer of amount of Bank’s
        contribution to Provident Fund with accrued interest to be
        credited to the RBI Gratuity and Superannuation Fund
        (Pension Fund).
        (ii) Retired employees of the Bank who had earlier
        retained CPF option, subject to refund of amount of Bank’s
        contribution to Provident Fund with accrued interest paid
        to them at the time of their retirement, along with simple
        interest @3% per annum calculated from the date of
        receipt of the amount by the employee till the date of
        refund to the Bank.
        (iv) Option for switch-over from CPF to Pension under the
        Pension Regulations, once exercised, shall be irrevocable.
        (v) The option shall not be applicable to employees who
        joined service on or after 01.01.2012 and are governed
        by National Pension System.
        4. Retired employees:
        (i) Eligible Retired employees, as mentioned at Para 2(ii)
        above, shall exercise their option for joining the Pension
        Scheme in FORM -1 (R) (copy enclosed) within 90 days
        from the date of this circular i.e. on or before close of
        business hours on December 17, 2020. On exercising
        the option, they shall refund to the Bank in lump sum,
        within 90 days from the date of this circular i.e. on or
        before close of business hours on December 17, 2020, the
        Bank’s contribution to Provident Fund and accrued interest
        thereon paid to them at the time of their retirement along
        with simple interest @3% per annum calculated from the
        date of receipt of the amount by the employee till the date
        of refund to the Bank.
        (ii) The duly filled in FORM-1 (R) (copy enclosed) along
        with details of family duly filled in Form 4 (copy enclosed)
        shall be submitted by the retired employee at the Regional
        Office/Central Office Department from where he/she retired.

                xx        x         x          x         x
        (vi) Pre - November 1, 2012 retirees will be eligible for
        revision of pension, prospectively i.e. from July 1, 2020,
[2025] 5 S.C.R.                                                          1135

           The Reserve Bank of India v. M.T. Mani and Another


           without payment of any arrears, as per the method indicated
           in circular CO HRMD No. G. 84/ 18491/21.01.00/2018-
           19 dated March 7, 2019 read with letter CO HRMD No.
           27412/21.01.000/2018-19 dated June 26, 2019.
           (vii) Eligible retired employees who have exercised their
           option for pension and refunded Bank’s contribution to
           Provident Fund and accrued interest thereon, along with
           simple interest @3% per annum as per para 4(i) above
           will be eligible for full pension from July 1. 2020 upto the
           date they opt for commutation of pension.

                    xx       x         x         x         x
           ix) On commutation of pension, retired employees will
           draw the basic pension reduced to the extent of commuted
           portion of pension. In such cases, full pension will be
           restored fifteen years after the date of commutation of
           pension.
           (x) Failing to deposit amount of Bank’s contribution to
           Provident Fund and accrued interest thereon, along with
           simple interest @3% per annum as at para 4(i) above
           within the stipulated time by the retired employee, will
           render the option for pension exercised by him/her as
           invalid. Any request for extension of time limit for refund
           of Provident Fund amount shall be rejected forthwith by
           respective RO/COD, without reference to Central Office.
           (xi) After completion of all formalities, eligible retired
           employees will start drawing pension with effect from July
           1, 2020. No arrears of pension will be paid for the period
           prior to July 1,2020.”
10. A perusal of the above instructions for implementation dated
    18.09.2020 makes it amply clear that all the employees who were
    eligible to switch over from the CPF Scheme to the Pension Scheme
    and who now opted for the Pension Scheme were required to refund
    the amount of Bank’s contribution to the Provident Fund with accrued
    interest, along with simple interest at the rate of 3% per annum,
    calculated from the date of receipt of the amount by the employee
    from the Bank till the date of refund thereof. The option had to be
    exercised, and the refund was also to be made to the Bank on or
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     before 17.12.2020. Commutation of pension was also permitted at the
     option of the employees. It was specifically so noted and mentioned
     that the retired employee would start drawing pension with effect
     from 01.07.2020, and no arrears of pension would be paid for the
     period prior thereto.
11. Respondent No. 1 on the issuance of the said Administration Circular
    No. 1 dated 14.09.2020, followed by the detailed instructions for
    implementation dated 18.09.2020, opted for the Pension Scheme,
    and the said Pension Scheme had been made applicable to him
    under which he is admittedly receiving monthly pension. The said
    Respondent, in the pending Writ Petition moved for an amendment to
    challenge the denial of entitlement to the grant of arrears of pension
    from the date of retirement. The said clauses of the Administrative
    Circular, as well as detailed instruction circular, were challenged to
    that limited extent, with a prayer for issuance of a writ of mandamus
    to the RBI to award 12% interest on arrears due to the petitioner
    by allowing him arrears with effect from the date of his retirement
    i.e. 30.11.2014.
12. The said amendment was allowed by the High Court on 18.03.2022,
    and an amended Writ Petition was filed. Upon the RBI filing a Counter
    to the amended Writ Petition, the Single Judge of the High Court
    proceeded to decide the Writ Petition, dismissing it vide Order dated
    04.04.2023, holding therein that the Respondent had well-informed
    details regarding the non-grant of arrears of pension and eligibility for
    pension from a particular date i.e. 01.07.2020. Having accepted the
    same and taken benefit thereof, it was not open to the Respondent
    to challenge a part of the said Scheme.
13. Upon dismissal of the writ petition, the Respondent preferred a writ
    appeal which was allowed by the Division Bench on 18.12.2023
    entitling the Respondent to pension benefits from the date of
    his retirement i.e. 30.11.2014, on the grounds that in the earlier
    administrative circulars, whenever an option had been granted to
    the serving or retired employees, they were entitled to arrears of
    pension as well. Denial of such arrears of pension from the date of
    retirement was held to be discriminatory and arbitrary at the hands of
    the RBI. A direction was further issued to the RBI to pay the pension
    benefits within one month from the date of the Order, failing which,
    it would attract interest at the rate of 6% per annum until realization.
[2025] 5 S.C.R.                                                       1137

           The Reserve Bank of India v. M.T. Mani and Another


14. The rationale and the reasoning put forth by the Division Bench
    was that the Respondent, to be eligible to opt for to the Pension
    Scheme, had to refund the contribution of the bank along with accrued
    interest with 3% simple interest from the date of the receipt of the
    said amount till its deposit. The amount having been refunded along
    with interest, entitled the employees to the benefit of pension from
    the date of retirement.
15. Another ground which was taken by the Division Bench was that the
    cut-off date i.e. 01.07.2000 as the effective date of pension was not
    based upon the RBI Pension Regulations, 1990. Instead, it was an
    administrative decision to reduce the financial burden, which would
    unjustly deprive eligible retirees of the rightful pension claim for the
    earlier period.
16. The stand of the Appellant RBI was that the Pension Scheme, as
    made applicable, provided for the cut-off date of 01.07.2020 for the
    grant of benefit of pension, based on the financial liability that would
    accrue as a result of the change of option. The employees, having
    received the lump sum amount had been utilizing the same from
    the date of the retirement till the date of refund, and the 3% interest
    required to be deposited from the date of receipt of the amount till
    the date of refund was to take care of the inflation and on the lower
    side considering that the interest payable on a fixed deposit is much
    higher. The said amount of 3% was intended to cover merely the
    administrative and other expenses.
17. Another ground taken in the writ by the RBI with regard to the
    Respondent having voluntarily accepted a contract which was offered
    by the RBI, cannot be permitted to selectively accept the beneficial
    terms and reject the unfavourable ones. The principle sought to be
    invoked was that the Respondent cannot be permitted to approbate
    and reprobate at the same time, i.e., accept the Pension Scheme
    as it is and then demand retrospective benefit of arrears of pension
    contrary to the agreed terms.
18. In the light of the above, with the judgment of the Division Bench
    going contrary to the Administration Circular No. 1, dated 14.09.2020,
    and the instructions for implementation dated 18.09.2020, RBI
    approached this Court by filing the Special Leave Petition wherein,
    on notice having been issued, operation of the Impugned Order
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     entitling Respondent No. 1 to pension from the date of his retirement
     was stayed. However, his entitlement for monthly pension with effect
     from 01.07.2020 onwards was ordered to be continued.
19. Learned Counsel for the Appellant has referred in detail to the
    Administration Circular No. 1 dated 14.09.2020 and 18.09.2020, to
    contend that the eligibility criteria had been clearly laid down therein
    and it was also made clear that the pension would be payable with
    effect from 01.07.2020 and not from the date of retirement. This is
    apparent from the clarification that no arrears prior to the said date
    would be paid to an optee for Pension Scheme from the CPF Scheme.
20. The Respondent, having unconditionally accepted all terms of
    these circulars and filled in the requisite forms etc. and fulfilled the
    conditions as laid down therein, cannot now be permitted to challenge
    unfavourable conditions. The Scheme as a whole had to be given
    effect to as a package deal.
21. An employer is entitled to consider several aspects while fixing a
    particular date for implementation of a scheme such as financial
    constraints, administrative exigencies, economic conditions, and
    other relevant circumstances. With these aspects in mind, the
    employer is fully justified in fixing some cut-off date, which cannot
    be said to be arbitrary. The various decisions as conveyed by the
    Government of India including its earlier refusal to allow a change
    of option, reflect such a position with regard to the financial burden
    and liability which the RBI and the Government would have to bear.
    The final proposal which had been finally accepted, and the financial
    liability as projected therein, specifically took note of the fact that
    the arrears of pension would not be paid to the optees as per the
    2020 Circular. The nominal interest of 3% charged on the refunded
    amount was merely for the purposes of covering the administrative
    expenses, inflation etc.
22. In support of the aspect regarding the policy decision and fixation
    of the cut-off date, dependent upon the financial liability apart from
    the administrative exigencies, reference has been made to the
    judgments of this Court in Mohammad Ali Imam and Others Vs.
    State of Bihar and Others1, State of Tripura and Others Vs.


1   (2020) 5 SCC 685
[2025] 5 S.C.R.                                                         1139

            The Reserve Bank of India v. M.T. Mani and Another


     Anjana Bhattacharjee and Others2, Hirandra Kumar Vs. High
     Court of Judicature at Allahabad and Another3, State of Punjab
     and Others v. Amar Nath Goyal and Others4 and Himachal Road
     Transport Corporation and Another v. Himachal Road Transport
     Corporation Retired Employees Union5.
23. Another plea which has been taken is that the Respondent had been
    in service since the year 1981. On all occasions i.e. 1990, 1992,
    1995 and 2000 when the options were given for switching over to the
    Pension Scheme from the CPF Scheme, he decided not to opt for
    the same and continued with the old scheme. On his retirement, he
    received all the benefits under the said CPF Scheme. Having failed
    to opt during these earlier occasions, it would not lie in the mouth of
    the Respondent to now state that he would be entitled to the same
    benefit as was available under those administrative circulars. Each
    circular had its own terms and conditions which the employees opted
    for and complied, thus entitling them to the benefit as per the said
    Circular. Similarly, when the latest administrative circular of the year
    2020 was issued, it was a complete package detailing therein the pros
    and cons. Once accepted, the benefits which were earlier conferred
    under the options made available to the then-retired and in-service
    employees at the relevant time cannot be claimed by the Respondent.
    It has also been pointed out that as per the circular of 2020, simple
    interest of 3% per annum is being charged upon the amount of RBI
    contributions to provident fund, whereas in the earlier occasions,
    interest was levied at 6% per annum on the first option followed by
    12% per annum on the subsequent occasions. This 3% interest, as
    was being charged from the employees, was based on the financial
    calculations and economic considerations keeping in view the fact, that
    the pension would be payable with effect from 01.07.2020 to the fresh
    optees to the Pension Scheme. This aspect was clearly mentioned in
    the administrative circular as well as the detailed instructions which
    pointed out therein that arrears would not be payable prior to the
    said date. It has been pointed out that each circular was a scheme
    in itself, laying down different parameters and requirements to be
    fulfilled, including the aspect of eligibility with consequential benefits.


2   (2022) 19 SCC 705
3   (2020) 17 SCC 401
4   (2005) 6 SCC 754
5   (2021) 4 SCC 502
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24. Some Circulars fixed the cut-off date for the employees to be eligible,
    others laid down the different interest-rates for refund of the amount
    etc. Therefore, the 2020 Circular was a complete scheme in itself
    both liability and benefits which were balanced and worked out based
    on which approval was granted by the Government of India. The
    conditions therefore laid down therein were sacrosanct and, once
    accepted, had to be adhered to. The reasons as assigned by the
    Division Bench of the High Court are unsustainable as there is no
    discrimination meted out to the Respondent, and as a consequence
    of the Judgment of the High Court, huge financial liability would fall
    upon the Appellant, which was neither envisaged, perceived nor
    intended. Policy decisions, especially relating to the financial aspects,
    need not be interfered with. This has been emphasised and based
    on the judgments referred to above.
25. On the other hand, Counsel for the Respondent has supported the
    judgment of the Division Bench of High Court. He submits that all
    through, whenever the Circulars have been issued, the employees
    have been granted the benefit of arrears of pension from the date
    of their retirement. Depriving the Respondent of the benefit of the
    arrears, when the CPF contribution along with the interest, as required
    stands deposited, would amount to denying the Respondent the
    benefit of 67 months of pension, which would not be justified and
    would be discriminatory and arbitrary. Assertion has been made that
    under the 1990 Pension Regulations, there is nothing mentioned
    with regard to non-grant of arrears. No issue of financial loss to the
    Government Exchequer would arise as the Scheme has been duly
    approved by the Ministry of Finance, and therefore, the said aspect
    with regard to the financial liability is unsustainable. Learned Counsel
    has further stated that the RBI itself had been pushing for giving
    another option to the employees for switching over to the Pension
    Scheme. Therefore, it cannot now assert that they would not grant
    the benefit which was earlier granted under the prior Administrative
    Circulars issued by the RBI. On this basis it is asserted that the
    Respondent is being discriminated against viz-a-viz the similarly
    placed employees/retirees.
26. Prayer has thus been made for dismissal of the Appeal.
27. We have considered the submissions made by the Counsel for the
    parties and, with their assistance have gone through the records of
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           The Reserve Bank of India v. M.T. Mani and Another


     the case. The first and foremost issue which requires to be considered
     and decided, and upon which all the ancillary submissions depend
     is; whether the fixing of the cut off date i.e. 01.07.2020 for grant of
     pensionary benefits and that too prospectively is in consonance with
     law or is discriminatory and arbitrary.
28. The details and factum with regard to the various four options which
    were available to the Respondent during the period he was in
    employment with the RBI and that he did not opt for switching over
    to the Pension Scheme in the year 1990, 1992, 1995 and 2000 is
    not questioned rather admitted. Respondent joined the service on
    14.09.1981 and retired as Manager on 30.11.2014. The details with
    regard to and the requirements under each administrative circular
    issued on these four occasions have not been disputed.
29. What is apparent, therefore is, that each administrative circular was
    independent in itself where the competent authority had taken a
    well-informed, considered, and gauged decision with regard to the
    applicability, liability and financial implications, apart from the other
    aspects. Each time, as is apparent, different aspects were taken note
    of. In some cases, it was provided for retrospective effect, while in
    others it was restricted to employees up to a particular date, and yet
    another only to those employees who were in service while on yet
    another occasion to both ex-employees and in-service employees.
30. Similarly, the rate of interest applicable on the amount to be refunded
    also varied depending upon the targeted beneficiaries of the Scheme.
    What is apparent, therefore, is that on each occasion, there was a
    specific timeframe fixed for giving an option, and the benefit was
    similarly limiting it to the beneficiaries.
31. Fortunately for the Respondent he was eligible on four occasions to
    avail the benefits of the Pension Scheme, but he opted out each time
    and continued with the CPF Scheme. Having taken a considered and
    calculated decision with regard to non-joining of the Pension Scheme
    and continuing with the CPF Scheme, the claim of the Respondent
    has to be considered in the said light.
32. Another aspect which is apparent is that there has been a gap of
    20 years, as the option which was given prior to the last one was
    in the year 2000, and the one which is in question before us is of
    the year 2020. During this period, on three separate occasions, as
    mentioned earlier, the Government did not agree with the proposal
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                          Supreme Court Reports


     of the RBI to grant another option for switching over to the Pension
     Scheme. It is apparent from the documents placed on the record that
     the financial details regarding the liability and the calculations based
     thereon, as part of the proposal for a one-time last option to move
     to the Pension Scheme were put forth before the Government. As
     is evident from the said proposal, no liability with regard to arrears
     of pension was highlighted therein. This is logical as well as it was
     specifically provided that the pension would be payable with effect
     from 01.07.2000, and there would be no entitlement of arrears from
     the date of retirement or otherwise.
33. The financial burden and the liability were therefore, prominent
    aspects taken into consideration by the Government while granting
    its no objection to the proposed Scheme for switching to the Pension
    Scheme to the erstwhile CPF Scheme optee employees.
34. As per the pleadings, the retrospective financial burden would have
    resulted in an unjustified liability of over 900 crores for the RBI, which
    would have led to a financially unsustainable scenario. This aspect
    has also been pressed into service by the Counsel. The decision of
    the Government falls within the realm of policy decision, keeping in
    view of the considerations taken note of before ultimately approving
    the Scheme of switch-over as a last option to the persons who were
    eligible under it as laid down therein.
35. When this aspect is examined in the light of the law, as settled by
    this Court in the case of Mohammad Ali Imam and Others (supra),
    in Paragraph 11, this Court held thus:
           “11. Apart from this, there may be other considerations in
           the mind of the executive authority while fixing a particular
           date i.e. economic conditions, financial constraints,
           administrative and other circumstances, and if no reason
           is forthcoming from the executive for fixation of a particular
           date, it should not be interfered with by the Court unless
           the cut-off date leads to some blatantly capricious or
           outrageous result. In such cases, it has been opined
           that there must be exercise of judicial restraint and such
           matters ought to be left to the executive authorities, to
           fix the cut-off date, and the Government thus, must be
           left with some leeway and free play at the joints in this
           connection. Even if no particular reasons are given for
[2025] 5 S.C.R.                                                              1143

           The Reserve Bank of India v. M.T. Mani and Another


           the cut-off date by the Government, the choice of cut-off
           date cannot be held to be arbitrary (unless it is shown
           to be totally capricious or whimsical) — State of A.P. v.
           N. Subbarayudu [State of A.P. v. N. Subbarayudu, (2008)
           14 SCC 702 : (2009) 2 SCC (L&S) 172].”
     In State of Punjab and Others (supra), in paragraphs 32, 32, 34
     and 37, this Cout held thus:
           32. The importance of considering financial implications,
           while providing benefits for employees, has been noted by
           this Court in numerous judgments including the following
           two cases. In State of Rajasthan v. Amrit Lal Gandhi [(1997)
           2 SCC 342 : 1997 SCC (L&S) 512 : AIR 1997 SC 782]
           this Court went so as far as to note that:
           “Financial impact of making the Regulations retrospective
           can be the sole consideration while fixing a cut-off date.
           In our opinion, it cannot be said that this cut-off date was
           fixed arbitrarily or without any reason. The High Court was
           clearly in error in allowing the writ petitions and substituting
           the date of 1-1-1986 for 1-1-1990.” [Ibid., at AIR p. 784,
           para 17 : SCC p. 348, para 17 (emphasis supplied).]
           33. More recently, in Veerasamy [(1999) 3 SCC 414 :
           1999 SCC (L&S) 717] this Court observed that, financial
           constraints could be a valid ground for introducing a cut-off
           date while implementing a pension scheme on a revised
           basis [ Supra fn 2 SCC at p. 421 (para 15).] . In that case,
           the pension scheme applied differently to persons who
           had retired from service before 1-7-1986, and those who
           were in employment on the said date. It was held that
           they could not be treated alike as they did not belong to
           one class and they formed separate classes.
           34. In State of Punjab v. Boota Singh [(2000) 3 SCC 733 :
           2000 SCC (L&S) 435] (“Boota Singh”) after considering
           several judgments of this Court in D.S. Nakara [(1983) 1
           SCC 305 : 1983 SCC (L&S) 145] to K.L. Rathee v. Union
           of India [(1997) 6 SCC 7 : 1997 SCC (L&S) 1253] it was
           held that D.S. Nakara [(1983) 1 SCC 305 : 1983 SCC
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                          Supreme Court Reports


            (L&S) 145] should not be interpreted to mean that the
            emoluments of persons who retired after a notified date
            holding the same status, must be treated to be the same
            [ Supra fn 13 SCC at p. 735 (para 8).].
            37. In the instant case before us, the cut-off date has
            been fixed as 1-4-1995 on a very valid ground, namely,
            that of financial constraints. Consequently, we reject the
            contention that fixing of the cut-off date was arbitrary,
            irrational or had no rational basis or that it offends
            Article 14.”
     In State of Tripura (supra) the Supreme Court, in reaffirming its earlier
     rulings such as in Amar Nath Goyal (supra) and T.N Electricity
     Board vs. R. Veerasamy and Others6, held that financial constraints
     can constitute a valid and non-arbitrary basis for fixing a cut-off date
     for extending pensionary benefits or pay revisions. It emphasized
     that economic considerations are germane to governmental policy
     decisions, and distinguishing between retirees based on such a date
     does not violate Article 14 of the Constitution. Accordingly, in the
     present case, the cut-off date fixed under the Pension Rules was
     constitutionally valid, and the High Court’s judgment striking it down
     was found to be erroneous. In Hirandra Kumar (supra) the Court
     clarified that individual hardships cannot justify altering a rule of
     general application and underscored that the determination of cut-off
     dates is a matter of policy-making. This function squarely lies within
     the domain of the rule-making authority, not the judiciary, as courts
     cannot assume the role of framing or modifying policy decisions in
     the guise of judicial review.
36. Therefore, it cannot be said that the cut off date, as fixed for grant of
    pension while refusing its retrospectivity, thereof would be arbitrary
    or illegal or discriminatory in nature.
37. Moreover, based on the facts of the case, the Respondent cannot be
    permitted to blow hot and cold in the same breath, as stated above.
    Each Circular had its own specific terms and conditions, entitling the
    retirees or in-service employees to the benefits as were laid down
    therein and that too subject to certain conditions.


6   (1999) 3 SCC 414
[2025] 5 S.C.R.                                                    1145

             The Reserve Bank of India v. M.T. Mani and Another


38. The said scheme itself was a well-considered and thoroughly worked-
    out detailed financial liability aspect. The said Scheme therefore
    to be operational and effective and above all, a viable one was to
    operate as a whole. The present Scheme of the year 2020, was a
    conglomerate of various factors, with each factor working in tandem
    with the others making it an effective and workable Scheme which
    when tested on the principles laid down by this Court as referred to
    above would not fall foul of it.
39. The financial aspect, in itself, is a valid consideration, as stated
    above, and would be applicable in the present case. The Respondent,
    therefore, cannot be permitted to choose a particular aspect of the
    Scheme that makes it unworkable, and that too for his own financial
    benefit. Approbation and reprobation would not be permissible in such
    schemes. Respondent having once opted for the Scheme cannot
    be permitted to not accept a part thereof while intending to take the
    benefit of the Scheme as a whole.
40. The plea, therefore, as has been sought to be projected amounts to
    violation of the contractual terms because the Scheme in itself had
    to be given effect to as a whole.
41. There being no violation of the Constitutional, Statutory or Common
    Law principles, interference by the Division Bench vide the impugned
    judgment while setting aside the judgement of the Single Judge
    cannot sustain.
42. In view of the above, the impugned judgment dated 18.12.2023
    passed by the Division Bench of High Court of Kerala, therefore,
    cannot sustain and is hereby set aside and the Judgment of the
    Learned Single Judge dated 04.04.2023 dismissing the writ petition
    preferred by the Respondent is restored. The appeal is allowed.
43. There shall be no orders as to cost.
44. Pending application(s), if any, shall also stand disposed of.

     Result of the case: Appeal allowed.



     †
         Headnotes prepared by: Ankit Gyan