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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos. 4802-4803 OF 2013 ARISING OUT OF

SPECIAL LEAVE PETITION (C) Nos. 14922-14923 OF 2009  

SANCHARI DEVI & ORS                       Appellant(s)

                VERSUS

ARA MUNICIPAL CORPORATION & ORS           Respondent(s)

JUDGMENT

Leave granted.

2. These appeals are against the judgment dated 4th  

March, 2009 of the Division Bench of the Patna High  

Court in L.P.A. Nos. 863 and 914 of 2007.

3. The facts very briefly are that Ramashish Prasad  

and Vishwanath Ram were working with the Ara Municipal  

Corporation.  Ramashish  Prasad  superannuated  on  31st  

August, 1996 and Vishwanath Ram superannuated on 31st  

March,  1999.  While  they  were  working  in  the  Ara  

Municipal Corporation, the Bihar Municipal Officers and  

Servants Pension Rules, 1987 (for short 'the Rules')  

came  into  effect.  The  Rules  were  to  apply  to  all  

permanent employees of the Municipalities and Notified  

Area  Committees  in  the  State  of  Bihar.  The  Ara

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Municipal Corporation, however, did not give effect to  

the  Rules  until  19th June,  2004  on  which  date  it  

adopted resolution to give pensionary benefits to its  

employees who had retired from service from the year  

2000 onwards in accordance with the Rules.

4. Aggrieved,  Ramashish  Prasad  and  Vishwanath  Ram  

filed Writ Petitions CWJC Nos. 3267 and 3441 of 2005  

before  the  Patna  High  Court  claiming  appropriate  

reliefs. The learned Single Judge of the High Court who  

heard the writ petitions held in his judgment dated  

25th May,  2007  that  the  Rules  were  applicable  with  

effect from 13-11-1987 when the Rules were notified in  

the Gazette and since both the writ petitioners had  

superannuated after 13-11-1987 they were entitled to  

the benefit of pension under the Rules. The judgment  

dated 25th May, 2007 of the learned Single Judge was  

challenged by the Ara Municipal Corporation in L.P.A.  

Nos. 863 and 914 of 2007 and by the impugned judgment,  

the Division Bench of the High Court upheld the finding  

of the learned Single Judge that the Rules came into  

effect on 13-11-1987 but held that as the two writ  

petitioners  had  not  exercised  their  option  for  the  

pension as required by Rule 4 of the Rules and as their  

right to pension under the Rules was dependent upon the  

exercise of their option for pension, they were not

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entitled for the pension under the Rules. Aggrieved,  

Ramashish Prasad and the legal heirs of Vishwanath Ram  

have filed these appeals before this Court.

5. We have heard learned counsel for the parties and  

we find that the only point that we have to decide in  

these  appeals  is  whether  Ramashish  Prasad  and  

Vishwanath  Ram  were  entitled  to  the  benefit  of  the  

Rules even though they had not exercised their option  

for pension as required by Rule 4 of the Rules. For  

deciding this point, we have to look at the Rules 1 and  

4 of the Rules which are quoted here-in-below:

1. These  rules  may  be  called  the  Bihar  Municipal  Officers  and  Servants  Pension  Rules, 1987 and shall apply to all permanent  employees of the Municipalities and Notified  Area Committees.

4. (i) Municipal employee on roll on the  date of confirmation of this rule and who  had subscribed to the contributory provident  fund under provident fund rules and want to  be governed by these rules shall have the  option to do so and such option shall be  exercised in writing in the prescribed form  (Annexure 1) and submitted to their head of  office  within  90  days  from  the  date  of  framing  of  this  rule  by  the  State  Government.  If  such  option  in  writing  in  prescribed form is not received within the  period so fixed, it will be deemed that they  would  retain  the  existing  contributory  provident fund.

(ii)  Municipal  employees  who  retired  before the date of effect of this rule and  have received the part or whole amount of  provident  fund  contribution  will  not  be  eligible for the pension.

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6. A bare reading of the Rules 1 and 4(i) of the  

Rules makes it clear that the Rules apply to permanent  

employees  of  the  Municipalities  and  Notified  Area  

Committees in the State of Bihar. Thus, all permanent  

employees  of  Municipalities  and  Notified  Area  

Committees  including  the  Ara  Municipal  Corporation  

were  statutorily  entitled  to  the  pension  under  the  

Rules. Rule 4(ii) of the Rules provided further that  

municipal  employees  who  retired  before  the  date  of  

effect of the Rules and received part or whole amount  

of provident fund contribution will not be eligible  

for  pension.  Hence,  Municipal  employees  who  had  

retired before the date of effect of the Rules and had  

received part or whole of provident fund contribution  

were not entitled for the pension under the Rules. In  

other words, all permanent employees of Municipalities  

and  Notified  Area  Committees  including  the  Ara  

Municipal  Corporation  had  a  statutory  right  to  get  

pension if they had not retired before the date of  

effect of the Rules and had not received part or whole  

of provident fund contribution.

7. Rule 4(i) of the Rules, quoted above shows that  

municipal  employees  on  the  rolls  on  the  date  of  

confirmation of the Rules and who had subscribed to  

the provident fund and wanted to be governed by the

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provident fund rules shall have the option to do so  

and such option was to be exercised in writing in the  

prescribed form in Annexure 1 and submitted the option  

within 90 days from the date of framing of the Rules  

by the State Government and if such option in writing  

in prescribed form is not received within the time so  

fixed, it will be deemed that they would retain the  

existing contributory provident fund. The language of  

the last limb of Rule 4(i) provides that in case the  

option is not exercised by a municipal employee who is  

entitled  for  pension  under  the  Rules,  it  will  be  

deemed as if he has exercised his option to retain the  

existing contributory provident fund. The option was,  

therefore, a right of the employee either to continue  

with the contributory provident fund or to switchover  

to pension under the Rules and the statutory right of  

the  municipal  employee  to  receive  pension  was  not  

dependent upon the exercise of option as held by the  

High Court in the impugned order. As we have already  

indicated, by virtue of what is provided in Rule 1 of  

the Rules, every permanent employee of a Municipality  

or  Notified  Area  Committee,  if  he  had  not  retired  

before the date of effect of the Rules and had not  

received part or whole of provident fund contribution  

was statutorily entitled to the pension.

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8. In  the  facts  of  the  present  case,  the  Ara  

Municipal Corporation itself had taken a view that the  

Rules  were  not  applicable  until  a  resolution  is  

adopted by the Corporation and adopted the resolution  

only  on  19th June,  2004  saying  that  the  pensionary  

benefits of the Rules will be given to those employees  

who  had  retired  from  service  from  the  year  2000  

onwards. The resolution was clearly in contravention  

of the Rule 1 as well as Rule 4(ii) of the Rules. If  

the Corporation had taken the correct view that the  

rules would be effective from 13th November, 1987, the  

two employees Ramashish Prasad and Vishwanath Ram who  

were  employees  of  the  Ara  Municipal  Corporation  on  

that  date,  could  have  exercised  their  respective  

options  to  switchover  to  pension  scheme  under  the  

Rules.  This  is  a  case  where  the  Ara  Municipal  

Corporation by taking the view that the Rules were not  

applicable  until  adopted  by  the  Corporation  had  

disabled the aforesaid two employees from exercising  

their  option  and  cannot  take  advantage  of  such  a  

disability caused by the Municipal Corporation itself  

and deny their statutory right to pension under the  

Rules.  Moreover,  the  two  employees  have  also  not  

received part or whole of provident fund contribution  

although they have retired in 1996 and 1997 and hence

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they  could  not  have  been  deemed  to  have  exercised  

their option to retain existing provident fund.

9. For  the  aforesaid  reasons,  we  set  aside  the  

impugned  judgment  of  the  Division  Bench  and  direct  

that  the  appellants  will  be  given  the  pensionary  

benefits including pension and family pension, as the  

case may be, in accordance with the Rules within three  

months from today.

10. We  make  it  clear  that  this  judgment  has  been  

delivered in the facts of the present case and will  

not be treated as a precedent applicable to all other  

cases the facts of which are not before this Court.

11. The  appeals  stand  allowed  accordingly  with  no  

order as to costs.

............................J. (A.K. PATNAIK)                 

............................J. (RANJAN GOGOI)                 

NEW DELHI, JUNE 25, 2013