REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 10857 OF 2016

All Manipur Pensioners Association ..Appellant by its Secretary

Versus

The State of Manipur and others ..Respondents

J U D G M E N T

M.R. SHAH, J.

Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the Division Bench of the High

Court  of  Manipur  at Imphal  dated 01.03.2016 passed  in Writ

Appeal No. 28 of 2006, by which the Division Bench of the High

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Court has allowed the said appeal preferred by the respondent –

State and has quashed and set aside the  judgment and order

dated  24.3.2005 passed by the learned  Single Judge in  Writ

Petition (C) No. 1455 of 2000, by which the learned Single Judge

held that the method of calculating the revised pension in

paragraph  4.1 of the office  memorandum dated  24.4.1999 in

respect of   pre­1996 pensioners is different from the method of

calculating the revised  pension  for the  Government  employees

who retired/died in harness on or after 1.1.1996 is arbitrary and

violative of Article 14 of the Constitution of India, the original writ

petitioners have preferred the present appeal.

2. The facts leading to the present appeal in nutshell are as

under:

That the State of Manipur adopted the Central Civil Services

(Pension) Rules, 1972, as amended from time to time.   As per

Rule 49 of the Central  Civil  Services Rules,  1972, a case of  a

government employee retired in accordance with the provisions of

the rules after completing qualifying service of not less than 30

years, the amount of pension shall be calculated at 50% of the

average emoluments subject to a  maximum of  Rs.4500/­ per

month.   It appears that considering the increase in the cost of

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living, the Government of Manipur decided to increase the

quantum of pension as well as the pay of the employees.   That

the Government of Manipur issued an office memorandum dated

21.4.1999 revising the quantum of pension.   However, provided

that those  Manipur  Government employees  who retired  on  or

after 1.1.1996 shall be entitled to the revised pension at a higher

percentage and those who retired before 1.1.1996 shall be

entitled at a lower percentage.

2.1 Feeling aggrieved by office memorandum dated 21.4.1999

providing two different revised pensions, viz, the higher

percentage of revised pension to the government employees who

retired on or after 1.1.1996 and the lower percentage of revised

pension to those who retired on or before 1.1.1996, the appellant

herein – All Manipur Pensioners Association approached the

learned Single Judge of the High Court of Manipur by way of Writ

Petition (C) No.1455 of  2000. It  was the case on behalf  of  the

original writ petitioners that all the pensioners who retired on or

after 1.1.1996 and those who retired before 1.1.1996 form only

one  class  as  a  whole  and therefore the classification  between

those who retired on or after 1.1.1996 and those who retired on

or before 1.1.1996 for the purpose of granting the benefit of

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revised pension is arbitrary, unreasonable and violative of Article

14 of the Constitution of India.  It was submitted that the date of

retirement cannot form the very criterion for classification.

Before the learned Single Judge, heavily reliance was placed on

the decision of this Court in the case of D.S. Nakara and others

vs.  Union  of India, reported in (1983)  1  SCC 305.     The writ

petition before the learned Single Judge was opposed by the State

Government  and  the  aforesaid  classification was  sought to  be

justified solely on the ground that considering the financial

constraints of the State, the State was justified in granting

revised pension differently to those  who retired after  1.1.1996

and those who retired before 1.1.1996.  It was the case on behalf

of the State that considering the financial constraints of the

State, the State was not in a position to extend the benefit  of

pension making the percentage given by the Government of India

in its memorandum dated 17.12.1998 to the pre­1996 pensioners

and accordingly  a decision was taken to extend the benefit  of

revised pension at certain percentage for the pre­1996 pensioners

and higher  percentage for the  post  1996 pensioners.  Relying

upon the decision of this Court in D.S. Nakara’s case (supra), by

the judgment and order dated 24.3.2005, the learned Single

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Judge allowed the writ petition and held the classification

between those pensioners who retired prior to 1996 and those

who retired after 1996 as arbitrary and violative of Article 14 of

the  Constitution  of India  and consequently  directed the  State

Government to pay the revised pension uniformly to all the

pensioners irrespective of any cut­off date, i.e., those who retired

pre­1996 or those who retired post­1996.

2.2. Feeling  aggrieved and dissatisfied  with  the judgment  and

order dated 24.3.2005 passed by the learned Single Judge in Writ

Petition (C) No. 1455 of 2000, the State preferred appeal before

the Division Bench of the High Court.   By the impugned

judgment and order dated 1.3.2016, the Division Bench of the

High Court has allowed the said appeal and has quashed and set

aside the judgment and order passed by the learned Single Judge

by observing that a classification is permissible and cut­off date

can be pressed into service  depending on financial resources of

the State.  The Division Bench has held that the cut­off date fixed

by the State government as 1.1.1996 for payment of revised

pension to pre­1996 retirees and post­1996 retirees cannot be

termed to be unreasonable or irrational in the light of Article 14

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of the Constitution of India and therefore need not be held to be

invalid.

3. Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the Division Bench of the High

Court, the  original  writ  petitioners  have  preferred the  present

appeal.

4. Shri R. Balasubramanian, learned Senior Advocate has

appeared for the appellant herein and Shri Sanjay Hegde, learned

Senior Advocate has appeared for the State.

4.1 Shri R. Balasubramanian, learned Senior Advocate

appearing on behalf of the appellant – Pensioners Association has

vehemently submitted that in the facts and circumstances of the

case, the Division Bench of the High Court has materially erred

in allowing the appeal and quashing and setting aside the

judgment and order passed by the learned Single Judge of the

High Court and approving the creation of two classes of

pensioners, viz., pre­1996 and post­1996 for the purpose of

revision in pension, which is contrary to catena of decisions of

this Court including the decision of this Court in the case of D.S.

Nakara (supra).

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4.2 It is further submitted by Shri R. Balasubramanian, learned

Senior Advocate appearing on behalf of the appellant –

Pensioners Association that the Division Bench of the High Court

has materially erred in not following the decision of this Court in

the case of D.S. Nakara (supra).  It is submitted that the Division

Bench of the High Court has not properly appreciated the fact

that the decision of this Court in the case of D.S. Nakara (supra)

has not been diluted at all in any of the subsequent decisions

and still holds the field.  It is submitted that the decisions of this

Court in the cases of  Hari Ram Gupta (D) through L.R. Kasturi

Devi v. State of U.P., reported in (1998) 6 SCC 328; T.N. Electricity

Board v. R. Veerasamy & others, reported in (1999) 3 SCC 414;

State of Punjab and others v. Amar Nath Goyal & others, reported

in (2005) 6 SCC 754, which came to be considered by the Division

Bench of the High Court while not following the decision of this

Court in the case of D.S. Nakara (supra) shall not be applicable to

the facts of the case on hand and all the aforesaid decisions are

clearly distinguishable.

4.3 It is further submitted by Shri R. Balasubramanian, learned

Senior Advocate appearing on behalf of the appellant –

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Pensioners Association that the Division Bench of the High Court

has erred in not properly appreciating the fact that all the

pensioners  form only one class as a whole  and therefore they

cannot be divided in two/classified into two groups for the

purpose of giving more financial benefits to one group than the

other.   It is submitted that the State’s financial

difficulty/constraint cannot be a ground to discriminate and/or

create two classes who as such belong to one class only.

4.4 It is further submitted by Shri R. Balasubramanian, learned

Senior Advocate appearing on behalf of the appellant –

Pensioners Association that the  High  Court has not properly

appreciated the fact that all the pensioners, whether they have

retired pre­1996 or post­1996 are governed by the pension rules

and are entitled to pension and therefore as such they form only

one class as a whole and therefore all the pensioners are entitled

to the same pensionary benefits irrespective of their date of

retirement.

4.5 It is further submitted by Shri R. Balasubramanian, learned

Senior Advocate appearing on behalf of the appellant –

Pensioners Association that as held by this Court in the case of

D.S. Nakara (supra) (para 42), the classification has to be based

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on some rational principle and the rational principle must have

nexus to the objects sought to be achieved.  It is submitted that if

the State Government considered it necessary to revise the

pension  due to the escalation in the cost of living  and  other

things, there is no rational principle behind it for granting the

revised pension only to those who retired post­1996 and

simultaneously denying the same to those who retired pre­1996.

It is  vehemently  submitted that if the revision of  pension was

necessitated due to the escalation in the cost of living etc., there

is no reason to deny the benefit of revised pension to those who

retired  pre­1996.   It is submitted that therefore this revision

which classified pension  into two classes  is  not  based on any

rational principle.   It is submitted that as held by this Court in

the case of D.S. Nakara (supra) if the rational principle is the one

of dividing pensioners with a view to giving something more to

persons otherwise equally placed, it would be discriminatory.  It

is submitted that this arbitrary division has not  only no nexus to

the revision in pension  but it is counterproductive and runs

counter to the whole gamut of pension scheme, more particularly

the revision in pension.

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4.6 It is further submitted by Shri R. Balasubramanian, learned

Senior Advocate appearing on behalf of the appellant –

Pensioners Association that the only justification by the State to

create two classes for the  purposes  of  payment  of revision in

pension, viz., those who retired pre­1996 and those who retired

post­1996 was the financial constraint.   It is submitted that the

aforesaid has no nexus with the object and purpose of revision in

pension.   It is submitted therefore that such a classification is

absolutely arbitrary and therefore violative of Articles 14 & 16 of

the  Constitution of India.   It is submitted that as such the

learned Single Judge of the High Court was justified in holding

creation of two classes for the purpose of revision in pension as

arbitrary and violative of Article 14 of the Constitution of India.

4.7 It is further submitted by Shri R. Balasubramanian, learned

Senior Advocate appearing on behalf of the appellant –

Pensioners Association that looking to the object and purpose of

the revision in pension, namely, increase in the cost of living, the

Division Bench of the High Court has materially erred in

observing and holding that   as the State does not have the

financial resources to pay uniform  pension to all the retired

employees and therefore cut­off date fixed by the State

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Government as 1.1.1996 for payment of revised pension to pre­

1996 retirees and  post­1996 retirees cannot  be termed to  be

unreasonable or irrational in the light of Article 14 of the

Constitution of India.   It is submitted that the aforesaid finding

recorded by the Division Bench of the High Court is just contrary

to the decision of this Court in the case of  D.S. Nakara (supra)

and  other subsequent  decisions in  which the  decision  of this

Court in the case of D.S. Nakara(supra) has been followed.

4.8 It is further submitted by Shri R. Balasubramanian, learned

Senior Advocate appearing on behalf of the appellant –

Pensioners Association that in the present case the decision of

this Court in the case of  D.S. Nakara (supra)  is squarely

applicable to the facts of the case.  It is submitted therefore that

the  Division Bench of the  High Court  has  materially erred in

quashing and setting aside the judgment and order passed by the

learned Single Judge in holding the decision of the State

Government creating two groups for the purpose of revision in

pension as arbitrary, unreasonable and violative of Article 14 of

the Constitution of India.

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4.9 Making the above submissions and heavily relying upon the

decision of this  Court in the  case  of  D.S.  Nakara(supra), it is

prayed to allow the present appeal.

5. The present appeal is vehemently opposed by Shri Sanjay

Hegde, learned Senior Advocate appearing on behalf of the

respondent – State.   

5.1 It is vehemently submitted by Shri Sanjay Hegde, learned

Senior Advocate appearing on behalf of the respondent – State

that in the facts and circumstances of the case and after

considering the observations made by this Court in the cases of

Hari  Ram Gupta  (supra),  R. Veerasamy (supra) and Amar Nath

Goyal (supra), the Division Bench of the High Court has rightly

held that the cut­off date fixed by the State Government for the

purpose of revised pension cannot be said to be unreasonable or

irrational in the light of Article 14 of the Constitution of India.

5.2 It is further submitted by Shri Sanjay Hegde, learned Senior

Advocate appearing on behalf of the respondent – State that the

decision of this Court in the case of  D.S. Nakara (supra), which

has  been  heavily relied  upon  by the learned  Senior  Advocate

appearing on behalf  of the appellant – Pensioners Association,

subsequently  came to  be considered by  this  Court  and  it  has

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been observed that the decision of this Court in the case of D.S.

Nakara (supra)  is one of the limited application and there is no

scope for enlarging the ambit of that decision to cover all

schemes  made by the retirees or a demand for an identical

amount of pension irrespective of the  date of retirement.   In

support of  his above submission,  Shri  Sanjay  Hegde, learned

Senior Advocate appearing on behalf of the respondent – State

has heavily relied upon the decisions of this Court in the cases of

Indian Ex­Services League v. Union of India, reported in (1991) 2

SCC 104, Union of India v. P.N. Menon, reported in (1994) 4 SCC

68 and State of Rajasthan v. Amrit Lal Gandhi, reported in (1997)

2 SCC 342.

5.3 Shri Sanjay Hegde, learned Senior Advocate appearing on

behalf  of the respondent  –  State  has  also  heavily relied  upon

some of the observations  made  by this  Court in the case of

Kallakkurichi Taluk Retired Officials Association, Tamil Nadu and

others v. State of Tamil  Nadu, reported in (2013) 2 SCC 772  in

support of his submission that financial constraint can be a valid

ground  to grant  the benefit  of revised pension  to some of the

pensioners and it is always open to the State Government looking

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to its own financial constraint to grant the  benefit of revised

pension by providing the cut­off date.   It is submitted therefore

that such a classification and/or creation of two groups for the

purpose of granting the benefit of revised pension cannot be said

to be unreasonable, irrational and violative of Article 14 of the

Constitution of India as sought to be contended on behalf of the

Pensioners Association.

5.4 Making the above submissions and relying upon the

aforesaid decisions, it is prayed to dismiss the present appeal.

6. We have heard the learned Senior Advocates for the

respective parties at length.

6.1 It is not in dispute that the State of Manipur has adopted

the Central Civil Services (Pension) Rules to be applicable to the

State of Manipur.  Therefore, all the government servants retired

in accordance with the provisions of the Pension Rules and after

completing qualifying service are entitled to the

pension/pensionary  benefits.   It appears that considering the

increase in the cost of living, the State Government

enhanced/revised the pension of its employees with effect from

1.1.1996 as in the case of Central Government employees.

However, this revision in pension was done differently, viz., for

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employees who retired prior to 1.1.1996 and for employees who

retired after 1.1.1996.  Consequently, the State provided a lower

percentage of increase to those who retired pre­1996 and

provided higher percentage of increase to those who retired post­

1996.  The learned Single Judge of the High Court held that such

a classification  is  not  permissible in law keeping in  mind  the

equality clause of the Constitution.   However, on an appeal, by

the impugned  judgment  and order, the  Division  Bench of the

High Court has reversed the decision of the learned Single Judge

and has observed and held that as in the present case the State

does not have the financial resources to pay uniform pension to

all the retired employees, the cut­off date fixed by the State

Government as  1.1.1996 for payment of revised pension to pre­

1996 retirees and  post­1996 retirees cannot  be termed to  be

unreasonable and irrational in the light of Article 14 of the

Constitution of India.  While passing the impugned judgment and

order, the Division Bench of the High Court has not followed the

decision of this Court in the case of  D.S. Nakara (supra),

considering some of the observations made by this Court in the

subsequent decisions in the cases of R. Veerasamy (supra); Amar

Nath Goyal(supra) and P.N. Menon (supra)  to the effect that the

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decision in the case of  D.S. Nakara (supra)  is one of the limited

application and there is no scope for enlarging the ambit of that

decision to cover all schemes made by the retirees or a demand

for  an  identical  amount  of  pension irrespective  of the  date  of

retirement.

6.2 Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the Division Bench of the High

Court, the original writ petitioners – All  Manipur Pensioners

Association – employees/pensioners who retired pre­1996 have

preferred the present appeal.

7. The short question which is posed for consideration before

this Court is, whether in the facts and circumstances of the case,

the decision of this Court in the case of D.S. Nakara (supra) shall

be applicable or not, and in the facts and circumstances of the

case and solely on the ground of financial constraint, the State

Government would be justified in creating two classes of

pensioners, viz., pre­1996 retirees and post­1996 retirees for the

purpose of payment of revised pension and  whether such a

classification is arbitrary, unreasonable and violative of Article 14

of the Constitution of India or not?

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7.1 At the outset, it is required to be noted that in the present

case, the State  Government  has justified the cut­off date for

payment of revised  pension solely on the ground of financial

constraint.  On no other ground, the State tried to  justify  the

classification.   In the backdrop of the aforesaid facts, the

aforesaid question posed for consideration before this Court  is

required to be considered.    

7.2 It is not in dispute that the State Government has adopted

the Central Civil Services (Pension) Rules, to be applicable to the

State of Manipur.  The State has also come out with the Manipur

Civil Services (Pension) Rules, 1977.  It is also not in dispute that

subject to completing the qualifying service the government

servants retired in accordance with the pension rules are entitled

to pension.  Therefore, as such, all the pensioners form only one

homogeneous class.   Therefore, it can be said that all the

pensioners form only one class as a whole.  Keeping in mind the

increase in the cost of living, the State Government increased the

quantum of pension and even pay for its employees.   The State

Government also enhanced the scales of pension/quantum of

pension with effect from 1.1.1996 keeping in mind the increase in

the cost of living.   However, the State Government provided the

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cut­off date for the purpose of grant of benefit of revised pension

with  effect from 1.1.1996  to those  who  retired post­1996 and

denied  the  revision  in  pension  to those  who retired pre­1996.

The aforesaid classification between these pensioners who retired

pre­1996 and post­1996 for the purpose of  grant of  benefit  of

revision in pension is the subject  matter of this appeal. As

observed hereinabove, the aforesaid classification is sought to be

justified by the State Government solely on the ground of

financial constraint.   

7.3 At the outset, it is required to be noted that in the case of

D.S.Nakara (supra), such a classification is held to be arbitrary,

unreasonable, irrational and violative of Article 14 of the

Constitution of India.  In paragraphs 42 and 65, this Court in the

case of D.S. Nakara (supra) has observed and held as under:

“42. If it appears to be undisputable, as it does to us that the pensioners for the purpose of pension benefits form a class, would its upward revision permit a homogeneous class to be divided by arbitrarily fixing an eligibility criteria unrelated to purpose of revision, and would such classification be founded on some rational principle? The classification has to be based, as is well settled, on some rational  principle  and the rational  principle  must have nexus to the objects sought to be achieved. We have set out the objects underlying the payment of pension. If the

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State considered it  necessary to liberalise the  pension scheme, we find no rational principle behind it for granting these benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior to that date. If the liberalisation was considered necessary for  augmenting social  security in old  age  to  government  servants then those who, retired earlier cannot be worst off than those who retire later. Therefore, this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory. To illustrate, take two persons, one retired just a day prior and another a day just succeeding the specified date. Both were in the same pay bracket, the average emolument was the same and both had put in equal number of years of service. How does a fortuitous circumstance of retiring a day earlier or a day later will permit totally unequal treatment in the matter of  pension?  One retiring  a  day earlier  will  have to  be subject to ceiling of Rs 8100 p.a. and average emolument to be worked out on 36 months' salary while the other will have a ceiling of Rs 12,000 p.a. and average emolument  will be computed on the basis of last 10 months'  average.  The artificial  division stares into face and is unrelated to any principle and whatever principle, if there be any, has absolutely no nexus to the objects sought to be achieved by liberalising the pension scheme. In fact this arbitrary division has not only no nexus to the liberalised pension scheme but it is counter­ productive and runs counter to the whole gamut of pension scheme. The equal treatment guaranteed in Article  14 is  wholly violated inasmuch as the  pension rules being statutory in character, since the specified date, the rules accord differential and discriminatory treatment to equals in the  matter of commutation of pension. A 48 hours'  difference in matter of retirement

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would have a traumatic effect. Division is thus both arbitrary and unprincipled.  Therefore, the classification does not stand the test of Article 14.

65.  That is the end of the journey. With the expanding horizons of socio­economic justice, the Socialist Republic and  welfare  State  which  we endeavour to set  up  and largely influenced by the fact that the old  men  who retired when emoluments were comparatively low and are exposed to vagaries of continuously rising prices, the falling value of the rupee consequent upon inflationary inputs, we are satisfied that by introducing an arbitrary eligibility criterion: “being in service and retiring subsequent to the specified date” for being eligible for the liberalised pension scheme and thereby dividing a homogeneous class, the classification being not based on any discernible rational principle and having been found wholly unrelated to the objects sought to be achieved by grant of liberalised pension and the eligibility criteria devised  being thoroughly  arbitrary,  we  are  of the  view that the eligibility for liberalised pension scheme of “being in service on the specified date and retiring subsequent to that date” in impugned memoranda, Exs. P­1  &  P­2, violates Article 14 and is unconstitutional and is struck down. Both the memoranda shall be enforced and implemented as read down as under: In other words, in Ex. P­1, the words:

“that in respect of the government servants who were in service on March 31, 1979 and retiring from service on or after that date”

and in Ex. P­2, the words:

“the new rates of pension are effective from April 1, 1979 and will be applicable to all service officers who became/become non­effective on or after that date”

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are unconstitutional and are struck down with this specification that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative to all pensioners governed by 1972 Rules irrespective of the date of retirement. Omitting the unconstitutional part it is declared that all pensioners governed by the 1972 Rules and Army Pension Regulations shall be entitled to pension as computed under the liberalised pension scheme from the specified date, irrespective of the date of retirement. Arrears of pension prior to the specified date as per fresh computation is not admissible. Let a writ to that effect be issued. But in the circumstances of the case, there will be no order as to costs.”

7.4 While the aforesaid decision of this Court in the case of D.S.

Nakara (supra) was relied upon by the appellant herein and as

such which came to be considered and followed by the learned

Single Judge, the Division Bench considering some of the

observations made in the cases of   Hari Ram Gupta (supra); R.

Veerasamy (supra); Amar Nath Goyal(supra) and P.N. Menon

(supra), has observed and held that the decision of this Court in

the case of  D.S. Nakara (supra)  is one of the limited application

and there is no scope for enlarging the ambit of that decision to

cover all schemes  made by the retirees or a demand for an

identical amount of pension irrespective of the date of retirement.

However, by not following the decision of this Court in the case of

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D.S. Nakara (supra), considering some of the observations made

by this Court in the aforesaid decisions, namely

P.N.Menon(supra) and other decisions,  the Division Bench of the

High Court has not at all considered the distinguishable facts in

the aforesaid decisions.

7.5 In the case of  P.N. Menon(supra),  the controversy was

altogether different one.   The factual position that needs to be

highlighted insofar as P.N. Menon (supra) is concerned, is that the

retired employees had never  been  in receipt  of “dearness pay”

when they retired from service and therefore the O.M. in question

could not have been applied to them.   This  is how this Court

examined the matter.   This Court also noticed that prior to the

O.M. in question, the pension scheme was contributory and only

with effect from 22.9.1977, the pension scheme was made non­

contributory.   Since the respondent employees in the first cited

case were not in service at the time of introducing the same they

were held not eligible for the said benefit.  Therefore, the said

decision shall not be applicable to the facts of the case on hand,

more particularly while considering and/or applying the decision

of this Court in the case of D.S. Nakara (supra).

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7.6 In the case of  Amrit Lal Gandhi (supra), pension was

introduced for the first time for the University teachers based on

the   resolution  passed  by   the  Senate   and  Syndicate of

Jodhpur  

University. The same  was approved  by the  State  Government

with effect  from 1.1.1990.   Therefore, the controversy was not

between one set of pensioners alleging discriminatory treatment

as against another set of pensioners.   There were no pensioners

to begin with. The retirees were entitled to provident fund under

the existing provident fund scheme.   The question of

discrimination between one set of pensioners from another set of

pensioners did not arise in the said decision. With the aforesaid

facts, this  Court  observed  that financial  viability is  a relevant

issue.

7.7 Similarly, the decision of this Court in the case of Indian Ex­

Services League (supra) also shall not be applicable to the facts of

the case on hand.  The facts in this case and the facts in the case

of D.S. Nakara (supra) are clearly distinguishable.  In the case of

Indian Ex­Services League (supra), the dispute was with respect to

PF retirees and Pension retirees and to that it was held that PF

retirees and Pension retirees constitute different classes and

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therefore this Court distinguished the decision of this Court in

the case of D.S. Nakara (supra).  Therefore, the aforesaid decision

shall not be applicable to the facts of the case on hand at all.

7.8 Similarly, the decisions of this Court in the cases of  Hari

Ram Gupta (supra) and Kallakkurichi Taluk Retired Officials

Association, Tamil Nadu (supra) also shall not be applicable to the

facts of the case on hand.  

7.9 In view of the above,  we are satisfied that none of the

judgments, relied upon by the learned Senior Advocate for the

respondent – State, has any bearing to the controversy in hand.

The Division Bench of the High Court has clearly erred in not

appreciating and/or considering the distinguishable facts in the

cases  of  Hari  Ram Gupta (supra);  R.  Veerasamy  (supra);  Amar

Nath  Goyal (supra); P.N.  Menon (supra) and  Amrit Lal  Gandhi

(supra).

8. Even otherwise on merits also, we are of the firm opinion

that there is no valid justification to create two classes, viz., one

who retired pre­1996 and another who retired post­1996, for the

purpose of grant of revised pension,   In our view, such a

classification has no nexus with the object and purpose of grant

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of benefit of revised pension.  All the pensioners form a one class

who are entitled to pension as per the pension rules. Article 14 of

the Constitution of India ensures to all equality before law and

equal protection of laws. At this juncture it is also necessary to

examine the concept of valid classification.  A valid classification

is truly a valid discrimination.   It is true that Article 16 of the

Constitution of India permits a valid classification.   However, a

very classification must be based on a just objective.  The result

to be achieved by the  just objective presupposes the choice of

some for differential consideration/treatment over others.   A

classification to be valid must necessarily satisfy two tests.

Firstly, the distinguishing rationale  has to be based on a  just

objective  and secondly, the  choice  of  differentiating one set  of

persons from another,  must have a reasonable nexus to the

objective sought to be achieved.  The test for a valid classification

may be summarised as a distinction based on a classification

founded on an intelligible differentia, which has a rational

relationship with the object sought to be achieved.   Therefore,

whenever a cut­off date (as in the present controversy) is fixed to

categorise one set of pensioners for favourable consideration over

others, the twin test for valid classification or valid discrimination

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therefore must necessarily be satisfied.  In the present case, the

classification in question has no reasonable nexus to the

objective  sought  to be achieved while  revising the pension.  As

observed  hereinabove, the  object  and  purpose for revising the

pension is  due to the increase in the cost of living.  All the

pensioners form a single class and therefore such a classification

for the purpose of grant of revised pension is unreasonable,

arbitrary, discriminatory and violative of Article 14 of the

Constitution of India.   The State cannot arbitrarily pick and

choose from amongst similarly situated persons, a cut­off date for

extension of benefits especially pensionary benefits. There has to

be a classification founded on some rational principle when

similarly situated class is differentiated for grant of any benefit.

8.1 As observed hereinabove, and even it is not in dispute that

as such a decision has been taken by the State Government to

revise the pension keeping in mind the increase in the cost of

living.   Increase in the cost of living would affect all the

pensioners irrespective of whether they have retired pre­1996 or

post­1996.  As observed hereinabove, all the pensioners belong to

one  class.  Therefore,  by such  a classification/cut­off  date the

equals are treated as unequals and therefore such a classification

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which has no nexus with the object and purpose of revision of

pension is unreasonable, discriminatory and arbitrary and

therefore the said classification was rightly set aside by the

learned Single Judge of the  High Court. At this stage, it is

required to be observed that whenever a new benefit is granted

and/or new scheme is introduced, it  might be possible for the

State to provide a cut­off date taking into consideration its

financial  resources. But the same shall  not be applicable with

respect to one and single class of persons, the benefit to be given

to the one class of persons, who are already otherwise getting the

benefits and the question is with respect to revision.

9. In view of the above and for the reasons stated above, we

are of the opinion that the controversy/issue in the present

appeal is squarely covered by the decision of this Court in the

case of  D.S. Nakara (supra).   The decision of this Court in the

case of  D.S. Nakara (supra) shall be applicable with full force to

the facts of the case on hand.   The Division Bench of the High

Court has clearly erred in not following the decision of this Court

in the case of  D.S. Nakara (supra)  and has clearly erred in

reversing the judgment and order of the learned Single Judge.

The impugned judgment and order passed by the Division Bench

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is not sustainable and the same deserves to be quashed and set

aside and is accordingly quashed and set aside. The judgment

and order passed by the learned Single Judge is hereby restored

and it is held that all the pensioners, irrespective of their date of

retirement, viz. pre­1996 retirees shall be entitled to revision in

pension at par with those pensioners who retired post­1996.  The

arrears be paid to the respective pensioners within a period of

three months from today.     

10. The instant appeal is allowed accordingly. However, in the

facts and circumstances of the case, there shall be no order as to

costs.

 ……………………………………J. [M.R. SHAH]

NEW DELHI; …………………………………….J. JULY 11, 2019. [A.S. BOPANNA]

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