Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5114 OF 2022
The State of Tripura & Ors. …Appellant(s)
Versus
Smt. Anjana Bhattacharjee & Ors. …Respondent(s)
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned
judgment and order dated 31.10.2017 passed by the High
Court of Tripura at Agartala in Writ Petition (C) No. 494 of
2012, by which, the High Court has struck down Rule 3(3)
of the Tripura State Civil Services (Revised Pension) Rules,
2009 (hereinafter referred to as the Pension Rules, 2009)
Signature Not Verified
and consequently has directed to pay the original writ
Digitally signed by R
Natarajan
Date: 2022.08.24
17:14:55 IST
Reason:
petitioner the arrears of pension for the period from
1
01.03.2007 to 31.12.2008, the State of Tripura has
preferred the present appeal.
2. The facts leading to the present appeal in a nutshell are as
under:
2.1 That the State of Tripura has enacted/framed the Tripura
State Civil Services (Revised Pension) Rules, 2009, issued
by the Governor under Article 309 of the Constitution of
India. Rule 3(3) of the Pension Rules, 2009 which was
under challenge before the High Court, which has been
struck down by the High Court by the impugned judgment
and order, is as under:
“3(3) The revised rate of pension within the above
limits of minimum and maximum pension shall be
st
computed notionally from 1 January 2006 or, as the
case may be, from the date of
superannuation/retirement whichever is later. But
financial benefit according to this computation will be
st
admissible from 1 January 2009 or from the date of
superannuation/retirement whichever is later”
2.2 On the request made by the Government of India to
consider adoption and implementation of Revised Pay
Structure in UGC System for Teachers in Colleges w.e.f.
01.01.2006 following revision of pay scales of Central
th
Government employees as per 6 Central Pay
Commission’s recommendations, the State of Tripura
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issued a notification dated 02.02.2010 and introduced
revised pay structure with 2 Band Pay Rs. 1560039100
and 3740067000 respectively with appropriate academic
Grade Pay and it was specified that arrears would be
payable subject to receipt of financial assistance of 80%
from Central Government and that all other allowances to
be admissible from 01.01.2009. The State’s notification
also provided that the pension would be admissible as per
Pension Rules for State as amended from timetotime and
the upper ceiling of pension was raised from Rs. 25200 to
38500. The State amended Rule 3(2) of the Pension Rules,
2009 in the year 2010 and the maximum limit of pension
was fixed at Rs. 38500.
2.3 That vide letter/communication dated 23.12.2010, the
Finance Department clarified that as per Rule 3(3) of the
Pension Rules, 2009, pension will be computed notionally
and will take effect from date of retirement of a college
teacher who retired after 01.01.2006 but financial benefit
to be admissible only from 01.01.2009 or date of
retirement, whichever is later.
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2.4 That respondent No. 1 herein – original writ petitioner
retired as ReadercumVice Principal on 28.02.2007 upon
attaining age of superannuation. Her pension was
computed at Rs. 9,150/ based on her last basic pay of Rs.
18,300/. That thereafter on revision of pay, her pension
came to be revised to Rs. 26,850/ on the basis of revised
basic pay of Rs. 53,700/. However, the revised
pay/pension was made admissible and actually paid from
01.01.2009 and from the date of her retirement till
01.01.2009 it was computed notionally. Therefore, the
original writ petitioner preferred a writ petition before the
High Court initially praying for (i) arrears of salary for the
period from 01.01.2006 to 28.02.2007; (ii) arrears of
pension for the period from 01.03.2007 to 31.12.2008 on
the basis of revised pay scale. At this stage, it is required
to be noted that initially there was no challenge made to
the validity of Rule 3(3) of the Pension Rules, 2009.
However, subsequently, the writ petition came to be
amended and prayer for arrears of salary was deleted and
the prayer for quashing of Rule 3(3) of the Pension Rules,
2009 was made.
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2.5 It was the case on behalf of the original writ petitioner that
there is no reasonable excuse to deny the actual benefit of
pension for the period from 01.01.2006 to 31.12.2008
inasmuch as 80% of the financial requirement for
implementation was to be borne by the Central
Government whereas the State Government was to bear
merely 20% of the entire requirement for making payment
of the arrears of pension for the said period. It was
submitted on behalf of the original writ petitioner that
such a policy decision being arbitrary and violative of
Article 14 of the Constitution of India should be struck
down. It was submitted that there must be a reasonable
nexus to the object which the policy seeks to achieve.
2.6 That the writ petition was vehemently opposed by the
State. A counter affidavit was filed opposing the writ
petition in which it was specifically submitted on behalf of
the State that due to the financial burden on the State,
which the State was not in a position to bear the additional
burden of revised pension, a policy decision has been
taken to grant the benefit of revised pension notionally
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from 01.01.2006 to 31.12.2008 and to grant the actual
benefit of the revised pension from 01.01.2009 only. It was
vehemently submitted on behalf of the State before the
High Court that being a policy decision, the same may not
be interfered with in a writ petition under Article 226 of
the Constitution of India. It was submitted that it is not
normally within the domain of any court to weigh the pros
and cons of the policy or to scrutinize it and test the
degree of its beneficial or equitable disposition for the
purpose of varying, modifying, or annulling it, based on
however sound and good reasoning, except where it is
arbitrary or violative of any constitutional, statutory or any
other provision of law.
2.7 By the impugned judgment and order, the High Court has
not accepted the plea of financial crunch raised by the
State and consequently the High Court has struck down
Rule 3(3) of the Pension Rules, 2009 being arbitrary and
violative of Article 14 of the Constitution of India.
Thereafter, the High Court has directed the State to pay
the original writ petitioner the arrears of pension (revised
pension) from the date of her retirement to 31.12.2008.
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Feeling aggrieved and dissatisfied with the impugned
judgment and order passed by the High Court, by which
the High Court has struck down Rule 3(3) of the Pension
Rules, 2009 being arbitrary and violative of Article 14 of
the Constitution of India, the State of Tripura has
preferred the present appeal.
3. Shri Shuvodeep Roy, learned counsel appearing on behalf
of the State has vehemently submitted that due to the
financial crunch and considering the fact that there will be
heavy financial burden upon the State to pay the actual
revision pension from 01.01.2006, which may affect the
development of a small State like State of Tripura, a policy
decision was taken by the State to grant the benefit of
revision of pay scale from 01.01.2009 only and the benefit
of revision of pay to be made only notionally from
01.01.2006 to 31.12.2008, which the Hon’ble High Court
ought not to have interfered with in exercise of powers
under Article 226 of the Constitution of India.
3.1 It is submitted that unless it is found that such a policy
decision is arbitrary and/or violative of Constitution,
statute or any other provision of law, the High Court is
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precluded from interfering with the policy decision in
exercise of powers of judicial review under Article 226 of
the Constitution of India.
3.2 It is further submitted by counsel appearing on behalf of
the State that a detailed affidavit was filed on behalf of the
State pointing out the financial constraint and/or the
financial burden on the State if the arrears of revision of
pension is paid from 01.01.2006. However, the High Court
has, without any further discussion and without giving
any cogent reasons observed that the rationale of financial
crunch on the State exchequer has not satisfied the Court
at all.
3.3 It is further submitted that the financial burden on the
State can be a valid ground to fix a cutoff date for the
purpose of payment of revision of pension. Heavy reliance
is placed on the decisions of this Court in the cases of
State of Punjab and Ors. Vs. Amar Nath Goyal and Ors.;
(2005) 6 SCC 754 and State of Bihar and Ors. Vs. Bihar
Pensioners Samaj; (2006) 5 SCC 65 in this regard .
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4. Though served none has appeared on behalf of respondent
No. 1, may be because pursuant to the earlier interim
order passed by this Court, she has been paid the entire
arrears of pension from the date of her retirement. It is
required to be noted that the impugned judgment and
order passed by the High Court has been stayed by this
Court.
5. We have heard learned counsel appearing on behalf of the
State at length. We have gone through and considered the
impugned judgment and order passed by the High Court.
Before the High Court, Rule 3(3) of the Pension Rules, 2009
was under challenge, which is reproduced hereinabove.
Rule 3(3) of the Pension Rules, 2009 has been struck down
by the High Court by holding that the same is arbitrary
and violative of Article 14 of the Constitution of India.
Before the High Court, it was the specific case on behalf of
the State that because of heavy financial burden and there
being financial constraints, the State is not in a position to
bear the heavy burden of additional revised pension and
therefore, the State formulated a policy decision to the
effect that the revised pension shall be paid from
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01.01.2006 to 31.12.2008 notionally and actual revision of
pension shall be disbursed from 01.01.2009 only. A
detailed affidavit was filed on behalf of the State justifying
the above policy decision providing/granting the revision of
pay from 01.01.2009 only and to grant the benefit of
revised pension notionally from 01.01.2006 or from the
date of retirement till 31.12.2008. Before the High Court on
affidavit, it was stated, which is also reproduced by the
High Court in the impugned judgment and order, as under:
“However, vide Rule 3 (3) ibid Financial benefit was
made admissible from 1st January, 2009 or from the
date of superannuation/retirement which ever was
later. For all other cases, the pension was computed
notionally as per revised rates of scale of pay. Since
the petitioner retired on 28022007 so her revised
pension upto 31 122008 was computed notionally.
The claim of the petitioner is to allow her arrears of
pension as per revised rates for the period from 0103
2007 to 3112 2008. It is a fact that Financial
condition of the State has been passing through
turbulent time since the recommendations of the
Twelfth Finance Commission. State Government has to
depend on Central Government funding for meeting up
its Plan and NonPlan expenditure. The funding by the
Central Government is based on the recommendations
of the Finance Commission. Finance Commission
under estimated State’s projections of Nonplan
revenue expenditure which included salaries, pension
and interest payment (NonFlexible and Committed
Expenditure). For example, the State Government
presented a realistic picture of Rs. 3944.79 crores
towards meeting up expenditure towards pension as
per revised pay scales. Contrary to it, the Finance
Commission assessed a cumulative expenditure of Rs.
2779.09 crores which was Rs. 1165.70 less than the
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actual assessment by the State Government. 12th
Finance Commission calculated pension at Rs. 342.01
crores during the year 200809 and Rs. 413.83 crores
during the year 200910. This is an increase of
approximately 9% over 200708 and 21% over 2008
09. However, as per actual implication, the
expenditure during 200809 and 200910 has been
Rs. 356.43 crores and Rs. 559.89 crores respectively
which is 14% and 57% higher than that of previous
years. Thus, due to under assessment of the state’s
Financial position by the Finance Commission, there
has been a shortfall in funding on NonPlan revenue
expenditure. It was now required to make payment of
pension without compromising with the State’s
Finances on development front. As such Financial
benefit towards payment of pension was considered
from 01012009. All other cases of retirement falling
within 01012006 to 31122008 were allowed
pension fixed notionally. Further, payment of arrears
of pension will have a huge impact on the State
Finances as there are large numbers of retirees during
that period. Considering, the constrained financial
position of the State, it is not possible to consider
further payment of arrears of pension to the similarly
situated persons as it would give rise to huge financial
burden on the State Exchequer which will disturb the
financial equilibrium of the State.”
5.1 However, without giving any cogent reasons, the High
Court has observed that the foundation i.e., the financial
crunch has not satisfied the Court at all. Only reasoning or
actual findings are in paragraph 12 which reads as under:
“[12] We have thoroughly scrutinized the foundation as
projected by the staterespondents by the passage from the
additional counter affidavit, as reproduced above. We find
from the condition laid down in the notification dated
02.02.2010 that out of the total financial requirement the
Central Government shall bear 80% till 31.03.2010. The
period mentioned in the Rule 3(3) of the said rules falls
within the said coverage period and as such, what the State
Government has projected that for the financial crunch
they had been compelled to bring the said amendment in
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the said pension rules is wholly unacceptable and in
contrast to Article 14 of the Constitution of India. The
foundation i.e. the financial crunch has not satisfied us at
all. Hence, we are of the view that the said Rule 3(3) of the
Pension Rules being absolutely arbitrary is liable to be
struck down. Accordingly, we strike down the Rule 3(3) of
the Tripura State Civil Services (Revised Pension) Rules,
2009. The respondents No. 2, 3 & 4 are directed to pay the
arrear pension for the period from 01.03.2007 to
31.12.2008 to the petitioner within a period of 3(three)
months from today, else the said amount shall carry
interest @6% per annum from 01.04.2010.”
5.2 When specific statistics were provided before the High
Court justifying its policy decision and the financial
crunch/financial constraint was pleaded, there was no
reason for the High Court to doubt the same. As such the
findings recorded by the High Court in the impugned
judgment and order is contrary to the averments made in
affidavit filed on behalf of the State Government. From the
affidavit filed before the High Court reproduced
hereinabove, we are satisfied that a conscious policy
decision was taken by the State Government to grant the
benefit of revision of pension notionally from 01.01.2006 or
from the date of superannuation till 31.12.2008 and to
pay/grant the benefit of revision of pension actually from
01.01.2009, which was based on their financial
crunch/financial constraint.
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5.3 Whether the financial crunch/financial constraint due to
additional financial burden can be a valid ground to fix a
cutoff date for the purpose of granting the actual benefit
of revision of pension/pay has been dealt with and/or
considered by this Court in the case of Amar Nath Goyal
(supra). In the aforesaid decision, it is observed and held
by this Court that financial constraint can be a valid
ground for fixation of cutoff date for grant of benefit of
increased quantum of deathcumretirement gratuity. In
paragraphs 26, 32 and 33 of the said judgment, it is
observed and held as under:
“26. It is difficult to accede to the argument on behalf
of the employees that a decision of the Central
Government/State Governments to limit the benefits
only to employees, who retire or die on or after 14
1995, after calculating the financial implications
thereon, was either irrational or arbitrary. Financial
and economic implications are very relevant and
germane for any policy decision touching the
administration of the Government, at the Centre or at
the State level.
xxx xxx xxx
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
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a cutoff date. In our opinion, it cannot be said that
this cutoff 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 11
1986 for 111990.” [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 cutoff 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 171986, 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.”
5.4 In the aforesaid decision this Court after considering the
earlier decisions of this Court in the cases of State of
Punjab Vs. Boota Singh; (2000) 3 SCC 733 and State of
Punjab Vs. J.L. Gupta; (2000) 3 SCC 736 , it is
specifically observed and held that for the grant of
additional benefit, which had financial implications, the
prescription of a specific future date for conferment of
additional benefit, could not be considered arbitrary.
5.5 In the subsequent decision in Bihar Pensioners Samaj
(supra), the decision in the case of
Amar Nath Goyal
(supra) is followed and it is observed and held that
financial constraints could be a valid ground for
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introducing a cutoff date while introducing a pension
scheme on revised basis. It is further observed and held by
this Court in the aforesaid decision that fixing of a cutoff
date for granting of benefits is well within the powers of the
Government as long as the reasons therefor are not
arbitrary and are based on some rational consideration.
6. While applying the law laid down by this Court in the
aforesaid decisions to the facts of the case on hand, we are
of the opinion that in the instant case before us, the cutoff
date has been fixed as 01.01.2009 on a very valid ground
i.e., financial constraint. Therefore, the High Court
manifestly erred in striking down the Rule 3(3) of the
Pension Rules, 2009 being arbitrary and violative of Article
14 of the Constitution.
7. In view of the above and for the reasons stated above, the
impugned judgment and order passed by the High Court
striking down Rule 3(3) of the Tripura State Civil Services
(Revised Pension) Rules, 2009 is unsustainable and the
same deserves to be quashed and set aside and is
accordingly quashed and set aside. However, it is observed
that as respondent No. 1 has already been paid the arrears
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from the date of her retirement pursuant to the interim
order passed by this Court, the same shall not be recovered
from her. However, striking down of Rule 3(3) of the
Tripura State Civil Services (Revised Pension) Rules, 2009
by the impugned judgment and order is hereby quashed
and set aside. The present appeal is accordingly allowed. In
the facts and circumstances of the case there shall be no
order as to costs.
………………………………….J.
[M.R. SHAH]
NEW DELHI; ………………………………….J.
August 24, 2022. [B.V. NAGARATHNA]
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