Full Judgment Text
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PETITIONER:
BHARAT PETROLEUM (ERSTWHILE BURMAH SHELL) MANAGEMENT STAFFPE
Vs.
RESPONDENT:
BHARAT PETROLEUM CORPORATION LTD. & ORS.
DATE OF JUDGMENT11/05/1988
BENCH:
MISRA RANGNATH
BENCH:
MISRA RANGNATH
DUTT, M.M. (J)
CITATION:
1988 AIR 1407 1988 SCR Supl. (1) 312
1988 SCC (3) 52 JT 1988 (2) 439
1988 SCALE (1)1109
CITATOR INFO :
RF 1990 SC1228 (1,2)
ACT:
Burmah Shell (Acquisition of Undertakings in India)
Act, 1976: ss. 3, 4, 9 & 10(1)-Burmah Shell Management Staff
Pensioners-Claim for escalation of pension-Admissibility of.
Civil Services: Pension-No longer considered a bounty-
Held to be property-Entitlement to escalation of pension-
Judicial notice can be taken of the fact that the rupee has
lost its value.
HEADNOTE:
Burmah Shell oil Storage and Distributing Company of
India Limited had a non-contributory pension fund.
Consequent upon nationalisation of the petroleum industry,
this fund was taken over by the Government company,
respondent No. 1, under s. 10(1) of the Burmah Shell
Acquisition of Undertakings in India) Act 2 of 1976.
In this writ petition under Art. 32 of the Constitution
the erstwhile Burmah Shell Management Staff Pensioners
claimed adequate escalation in their pension keeping in view
the loss of purchasing power of the rupee and the general
rise in the cost of living. In support of their claim they
relied upon the steep escalation in the pension granted by
the Hindustan Petroleum Corporation, a sister concern, to
its employees. The latter has no such fund. It was contended
for the respondent Company that if the escalation admitted
by the Hindustan Petroleum Corporation is accepted as the
basis for escalation in the respondent company there would
be injustice or a burden would arise which they cannot
discharge.
Allowing the writ petition,
^
HELD: 1. The petitioners being the management staff of
the Burmah Shell are entitled to a hike in the pension.
[316E-F]
2. Judicial notice can be taken of the fact that the
rupee has lost its value to a considerable extent. Pension
is no longer considered as a bounty and it has been held to
be property. In a welfare state, as ours,
313
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rise in the pension of the retired personnel, who are
otherwise entitled to it, is accepted by the State and the
State has taken the liability. In the instant case, if the
similarly situated sister concern like Hindustan Petroleum
Corporation can admit appropriate rise in the pension, there
is no justification as to why the respondent company should
not do so. [316D-E]
3. The respondent-company has an obligation to pay from
its earnings into the fund and merely because the existing
fund is not adequate to bear the additional liability the
claim which is otherwise justified cannot be rejected. The
company’s current funds are available to supplement the
pension fund. [316C]
4. Respondent No. 1 to give to the petitioners hike in
the pension effective from 1st May, 1988 at the same rate as
is being given by Hindustan Petroleum Corporation. If the
amount available from the pension fund is not adequate the
Government-company would allocate appropriate funds to meet
the demand. The additional pension to be disbursed latest by
31st of July, 1988. [316F-G]
JUDGMENT:
ORIGINAL JURISDICTION: Writ Petition (Civil) No. 590 of
(Under Article 32 of the Constitution of India)
B.B. Sawhney for the Petitioners.
G.B. Pai, O.C. Mathur, Ms. Meera Mathur, Ms. Deepa
Chhabra and N. Misra for the Respondents.
The Judgment of the Court was delivered by
RANGANATH MISRA, J. Under the Burmah Shell (Acquisition
of Undertakings in India) Act 2 of 1976, (hereinafter
referred to as the ’Act’), the Union of India acquired the
right, title and interest of Burmah Shell oil Storage and
Distributing Company of India Limited (hereinafter referred
to as Burmah Shell) in relation to its undertakings in
India. Sections 3, 4, and 9 of the Act are relevant. Under
section 3 the right, title and interest of Burmah Shell in
relation to its undertakings in India stood transferred and
became vested in the Central Government. In terms of section
4, the assets and liabilities were taken over by the
Government of India. Under section 9 persons employed under
Burmah Shell came under the employment of the
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Government company known as Bharat Petrolium Corporation A
Limited (respondent No. I herein) Section 1()(1) provides
thus:
"Where a provident, superannuation, welfare
or other fund has been established by Burmah Shell
for the benefit of the persons employed by it in
connection with its undertakings in India, the
monies relatable to the employees-
(i) whose services are transferred by or
under this Act to the Central Government or
the Government company; or
(ii) who are in receipt of pension or other
pensionary benefits immediately before the
appointed day,
shall, out of the monies standing on that day to
the credit of such provident, superranuation,
welfare or other fund stand transferred to and
vested in, the Central Government or the
Government company, as the case may be, free from
any trust that may have been constituted by Burmah
Shell in respect thereof."
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The detailed provisions for administration of the fund are
contained in that section.
This petition under Article 32 of the Constitution is
by the erstwhile Burmah Shell Management Staff Pensioners
who claim two reliefs:
(1) Extension of the benefit of restoration of commuted
pension after the period of 15 years from the date of
commutation as decided by this Court in the case of
Common Cause & Ors. v. Union of lndia & Ors., AIR 1987
SC 210 and
(2) Adequate escalation in the pension keeping in view
the loss of purchasing power of the rupee and the
general rise in the cost of living.
In answer to the rule nisi, the respondent made its
return by contending that the pension scheme of the first
respondent is a funded scheme. The decision of this Court in
the case of Common Cause rendered in respect of Government
servants, both of civil and defence services, cannot be
extended to a public sector undertaking. The pen-
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sion scheme of Burmah Shell was set up by Non-Contributory
Pension A Fund by a Trust Deed in December, 1950, but
effective from 1st January, 1947, of which both the
management staff as also the clerical staff were members.
This Court on 13th of November, 1987, referred two questions
arising for determination for the opinion of Mr. D.K.
Lodaya, Chief Actuary of the Life Insurance Corporation of
India at Bombay, with the consent of parties and the two
questions referred to are:
( 1) Is the pension fund actuarially solvent to
bear the liability flowing from restoration of commuted
portions of pensions after 13 or 15 years from the
respective dates of commutation ? If not, the extent of
additional funds necessary for the purpose may be
indicated, and the tax relief which will be available
for such contribution of additional funds may also be
indicated.
(2) Is the pension fund actuarially solvent to
bear (a) enhancement of pensions and (b) linking
pensions with the cost of living index? If so, the
extent by which the pensions can be enhanced by
utilising the existing resources of the Fund may be
indicated.
The report has been received and kept on record. It
indicates that the additional liability on account of
restoration of the commuted value of the pension on the
basis of 13 years would be more that Rs. 3 Crores and on the
basis of 15 years would be more than Rs.2-1/2 Crores.
Counsel for the petitioners has, however, told us in course
of the hearing that the question of restoration of the
commuted value of the pension may not be adjudicated at
present. In view of such submission, we do not examine this
issue.
The writ petition is, therefore, confined to the only
question as to the escalation of pension. Burmah Shell has a
fund known as Burmah Shell India Pension Fund and it has its
own rules. When Government nationalised the Petroleum
industry, another company known as Caltex India Ltd. was
also acquired and came to be known as Hindustan Petroleum
Corporation. It is thus a sister concern owned by the
Central Government. Petitioners relied upon the increase in
the pension granted by the Hindustan Petroleum Corporation
to its employees in support of their claim for the increase
in the pension. While Burmah Shell had a pension fund which
has been taken over by the Government company, Caltex did
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not have such a fund The allegation made by the petitioners
that the Hindustan Petroleum Corporation
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Where there is no such fund has granted a steep escalation
in the pension has not been disputed before us. Admittedly
Burmah Shell is a bigger company than Hindustan Petroleum
Corporation. We have been told that the total Burmah Shell
management staff presently in the employment of the
respondent No. 1 would be around a thousand. Nothing
acceptable has been placed before us from where support can
be received for the argument of Mr. Pai, learned counsel for
respondent No. 1, that if the escalation admitted by Messrs
Hindustan Petroleum Corporation is accepted as the basis for
escalation in Burmah Shell there would be injustice or a
burden would arise which the respondent-Company cannot
discharge. The respondent-Company has an obligation to pay
from its earnings into the Fund and merely because the
existing fund is not adequate to bear the additional
liability the claim which is otherwise justified cannot be
rejected. As we have already pointed out, the Company’s
current funds are available to supplement the pension fund.
Judicial notice can be taken of the fact that the rupee
has lost its value to a considerable extent. Pension is no
longer considered as a bounty and is has been held to be
property. In a welfare State as ours, rise in the pension of
the retired personnel who are otherwise entitled to it is
accepted by the State and the State has taken the liability.
If the similarly situated sister concern like Hindustan
Petroleum Corporation can admit appropriate rise in the
pension, we see no justification as to why the respondent-
Company should not do so.
We, therefore, hold that the petitioners being the
management staff of the Burmah Shell would be entitled to a
hike in the pension admissible at the same rate as is being
given by Hindustan Petroleum Corporation. We accordingly
direct respondent No. 1 to give the necessary hike in the
pension effective from 1st May, 1988 If the amount available
from the pension fund is not adequate, it would obviously
mean that the Government company would allocate appropriate
funds to meet the demand. The additional pension should be
disbursed latest by 31st of July, 1988. No costs.
P.S.S. Petition allowed.
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