Full Judgment Text
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PETITIONER:
P.V.SUNDARA RAJAN & ANR.
Vs.
RESPONDENT:
UNION OF INDIA & ORS.
DATE OF JUDGMENT: 26/04/2000
BENCH:
S.S.Ahamad, Y.K.Sabharwal
JUDGMENT:
Y.K.SABHARWAL J.
The matter concerning the pension of Central
Government employees absorbed in Public Sector Undertakings
has been the subject matter of examination by this Court
from time to time.
In "Common Cause", A Registered Society And Ors. v.
Union of India [(1987) 1 SCC 142], the grievance stressed
was that certain provisions of the Commutation of Pension
Rules permit Union of India to recover more than what is
paid to the pensioners upon commutation and thus they sought
for the issue of directions for formulating appropriate
scheme rationalising the provisions relating to commutation.
That petition was filed on behalf of the government servants
who had commuted their pension partially. During the
pendency of the matter, Union of India agreed to restore the
commuted portion of the pension in regard to all civilian
employees at the age of 70 years or after 15 years,
whichever is later, and agreed to make this effective from
1st April, 1986. The Court, however, directed that it would
be just and equitable that the benefit agreed to be extended
in respect of commuted portion of the pension should be
effective from 1st April, 1985.
In Welfare Association of Absorbed Central Government
Employees in Public Enterprises v. Union of India & Ors.
[(1991) 2 SCC 265], a two Judges’ Bench examined the writ
petition filed on behalf of those who at the time of
retirement from Government service and entering into public
sector had taken the advantage of commuting the entire
pension and were seeking the benefit of the judgment in the
case of Common Cause (supra). It was held that the
petitioners belong to a class different from those whose
case was before this Court in the Common Cause case. It was
noticed that the commutation does bring certain advantages
to the commutee and the class of Government officers
represented by the petitioner had derived such benefits and
there was no basis for the allegation that by not extending
the benefit of common cause case, there has been any
infringement of Article 14 of the Constitution.
In Welfare Association of Absorbed Central Government
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Employees in Public Enterprises v. Union of India & Ors.
and P.V.Sundara Rajan & Anr. v. B.B. Tandon & Ors. being
Writ Petitions (C) Nos. 11855 of 1985 and 567 of 1995
respectively [(1996) 2 SCC 187], the relief was confined to
the restoration of one-third portion of the fully commuted
pension as per the decision in Common Cause case. The
contention of the petitioners was that they have been denied
the benefit of ‘common cause’ judgment, by insertion of para
4 in the impugned OM dated 5th march, 1987. They sought
quashing of the said para which provided that the Central
Government employees who got themselves absorbed under
Central Public Sector Undertakings/Autonomous Bodies and
have received/or opted to receive commuted value for
one-third of pension as well as terminal benefits equal to
the commuted value of the balance amount of pension left
after commuting one-third of pension are not entitled to any
benefit under the said orders as they have ceased to be
Central Government pensioners. The scope of Rule 37A of the
CCS (Pension) Rules, 1972 was also examined. That Rule
reads as under :-
"37-A Payment of lump sum amount to persons on
absorption in or under a corporation, company or body
(1) Where a government servant referred to in Rule 37
elects the alternative of receiving the (retirement
gratuity) and a lump sum amount in lieu of pension, he
shall, in addition to the (retirement gratuity) be granted:
(a) on an application made in this behalf, a lump sum
amount not exceeding the commuted value of one-third of his
pension as may be admissible to him in accordance with the
provisions of the Civil Pensions (Commutation) Rules; and
(b) terminal benefits equal to the commuted value of
the balance amount of pension left after commuting one-third
of pension to be worked out with reference to the
commutation tables obtaining on the date from which the
commuted value becomes payable subject to the condition that
the government servant surrenders his right of drawing
two-thirds of his pension."
This Court (Bench of three Judges) held that one-third
portion of the pension has been commuted without any
condition and two-third with the condition attached. It
would be useful to reproduce para 9 of the said decision as
under:
"From the above extracts, it will be seen that a
clear-cut distinction is made in Rule 37-A itself between
one-third portion of pension to be commuted without any
condition attached and two-third portion of pension to be
received as terminal benefits with condition attached with
it. It follows that so far as commutation of one-third of
the pension is concerned, the petitioners herein as well as
petitioners in "Common Cause" case stand on similar footing
with no difference. So far as the balance of two-third
pension is concerned, the petitioners herein have received
the commuted value (terminal benefits) on condition of their
surrendering of their right of drawing two-thirds of their
pension. This was not the case with the petitioners in
"Common Cause" case. That being the position the denial of
benefit given to "Common Cause" petitioners to the present
petitioners violates Articles 14 and 16 of the Constitution.
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The reasoning for restoring one-third commuted pension in
the case of "Common Cause" petitioners equally applies to
the restoration of one-third commuted pension in the case of
these petitioners as well."
In respect of the earlier two Judges’ Bench decision,
[(1991) 2 SCC 265], it was observed that Rule 37A was not
brought to the notice of the Court and that the contention
that the petitioners on commuting their pension in full
cease to be Central Government pensioners was too broad to
be accepted in the absence of any Statute or the Rule.
Under these circumstances, it was held that the petitioners
are entitled to the benefits as given in "Common Cause" case
so far as it related to restoration of one third of the
commuted pension and consequently, para 4 of OM dated 5th
March, 1987 was quashed.
Contempt Petition No. 530 of 1997 in Writ Petition
(C) No. 11855 of 1985 was filed with the grievance that the
Government construing the aforesaid judgment literally
restored one-third of the commuted pension and denied all
other attendant benefits as made available to the other
Central Government pensioners. By order dated 1st May, 1998
in Welfare Association of Absorbed Central Government
Employees in Public Enterprises & Anr. v. Arvind Verma &
Ors. [AIR 1998 SC 2862], this Court held that the
petitioners have to be treated at par with the Central
Government pensioners and the earlier decision had to be
given effect to in letter and spirit which means that the
restoration of pension must be with attendant benefits as
given to the Central Government pensioners. The Government,
it was held, was liable to restore not only the pension but
also all attendant benefits. Noticing, however, that there
was some genuine doubt on the part of the respondents in
construing and giving effect to the judgment of this Court
and, therefore, there was no contempt, the Government was
directed to comply with the judgment within three months and
the contempt petition was thus disposed of.
In purported implementation of the aforesaid order
dated 1st May, 1988, the Central Government issued a
circular dated 14th July, 1998. This led to filing of yet
another contempt petition (Contempt Petition (Civil) No.
255 of 1999). By order dated 6th September, 1999, while
observing that no case for contempt is made out, this Court
directed that the contempt petitions be treated as
applications for clarification.
Under aforesaid circumstances, contempt petitions have
been registered as interlocutory applications. One Lt.
Col. B.R. Malhotra (Retired) has also been impleaded as
one of the applicants in IA No. 4/99. He had commuted 100%
pension and complains of discrimination by government
against 100% commutees. Writ Petitions(C) Nos. 345 and 576
of 1999 have also been filed by the absorbed government
employees who had commuted 100% pension.
One of main grievance urged in the applications is
that all Central Government pensioners are entitled to
dearness relief on sanctioned basis pension as revised from
time to time, regardless of whether they have commuted any
part of their pension. It has been claimed that the benefit
is to be calculated at applicable rates on the amount of
pension including the amount of commuted pension but these
benefits have been restored to the petitioners only partly
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at the notified rates on one-third of the notional pension.
It has been submitted that they are at par with other
Central Government pensioners.
The dearness relief on pension has been granted to
pensioners to compensate them for the erosion in the value
of money due to rise in the cost of living. It seems clear
that the Government has permitted to the applicants dearness
relief calculated only on one-third part of the pension
restored while in case of other pensioners, the dearness
relief is calculated on full pension including the commuted
part of pension. As already noticed, the applicants are to
be treated on the same footing as other Central Government
employees in so far as the question of restoration of
one-third of commuted pension is concerned and are entitled
to the benefits as given in Common Cause case. In this
respect, it would also be useful to notice that the
‘pension’ as defined in Central Civil Services (Pension)
Rules 1972 does not include dearness relief. Rule 3(1)(o)
reads as under :-
"‘Pension’ includes gratuity except when the term
pension is used in contradistinction to gratuity, but does
not include dearness relief;"
We may also reproduce Rule 55-A :-
" Dearness Relief on Pension/Family Pension
(i) Relief against price rise may be granted to the
pensioners and family pensioners in the form of dearness
relief at such rates and subject to such conditions as the
Central Government may specify from time to time.
(ii) If a pensioner is re-employed under the Central
or State Government or a Corporation/Company/Body/Bank under
them in India or abroad including permanent absorption in
such Corporation/Company/Body/Bank, he shall not be eligible
to draw dearness relief on pension/family pension during the
period of such re- employment.
(iii) Deleted"
The Government instructions also show that the
dearness relief is granted to compensate the pensioners for
erosion in the value of money due to rise in the cost of
living. Anything which is not part of pension has to be
paid in full in so far as those who have commuted one-third
pension. Nothing of substance could be shown by Mr. Altaf
Ahmed, learned Additional Solicitor General, so as to
deprive the grant of benefit of dearness relief on full
pension to these public sector absorbees at par with Central
Government pensioners. Directions in this regard have been
issued by this Court from time to time but applicants are
still being deprived of this benefit. We give to the
respondents a final opportunity to grant to the applicants
the benefit of dearness relief on pension as aforesaid
within a period of three months. The applicants are,
however, not entitled to any other benefit claimed in the
applications.
The parity claimed by Lt.Col. Malhotra and other
absorbees who had commuted 100% pension, in our view, is
entirely misplaced. The contention that what is commuted or
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given up is an amount and not the right to receive pension
or right to receive post-commutation revision and attendant
benefits including dearness relief on the gross entitled
pension on the dates they were granted to other Government
pensioners, is only illusory. The decision in the case of
State of T.N. and Ors. v. V.S. Balakrishnan and Ors.
[(1994) Suppl. 3 SCC 204] on which reliance was placed by
Mr. Gopal Subramanium, Senior Advocate, has no
applicability to the point in issue. Those who commuted
100% pension continue to remain non-pensioners till their
pension is restored. In Welfare Association Case (supra),
persons who commuted the full pension and who will not be
given any monthly pension by deeming monthly pension to have
been reduced to nil has been treated as a separate category.
Those who commute 100% pension are not entitled to the
benefit of dearness relief on full pension or other benefits
as claimed herein. We also do not find any discrimination
in so far as this class is concerned.
The interlocutory applications and the writ petitions
are disposed of in the above terms leaving the parties to
bear their own costs.