Full Judgment Text
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CASE NO.:
Appeal (civil) 410-429 of 2002
PETITIONER:
Commnr.&Secretary to Govt.
RESPONDENT:
N. Govindan Achary and Ors.
DATE OF JUDGMENT: 31/01/2006
BENCH:
ARIJIT PASAYAT & C.K. THAKKER
JUDGMENT:
J U D G M E N T
[With Civil Appeal Nos. 381-382 of 2002]
The Commissioner and Secretary ....Appellant
to Government, Transport Department,
Fort. St. George, Madras
ARIJIT PASAYAT, J.
These appeals are directed against the judgment of the
Tamil Nadu Administrative Tribunal, Madras (in short the
’Tribunal’) disposing of several applications filed by the
respondents. By the impugned judgment, the Tribunal held
that respondents were entitled to pension in terms of G.O.Ms.
No.378 issued by the Finance Department of the appellant-
State dated 18.4.1975 read with G.O.Ms. No.378, Transport
Department, dated 23.9.1985.
Background facts as highlighted by the appellants are
essentially as follows:
The respondents were employees of the erstwhile
Transport Department in the State of Tamil Nadu. Till 1972
the public transportation was managed and run as a
Government Department conferring the status of Government
servants to all employees of the State Transport Department.
Pursuant to the policy decision of the State, Corporations were
formed. Initially, the employees were sent to the said
Corporations on deputation. As there was reluctance on their
part to be absorbed with the Transport Corporations giving up
their status and benefits available to government servants, the
Government by G.O.Ms. No.378 dated 18.4.1975 issued orders
offering pension for the services rendered in the Transport
Department while they served in the transport corporations.
But the pension offered in the said G.O.Ms. No.378 dated
18.4.1975 was denied to the respondents. Hence, they filed
applications before the Tribunal with a prayer that direction be
given to the present appellants to pay the eligible pension to
the applicants before the Tribunal for services rendered by
them in the transport department in terms of G.O.Ms. No.378
of the Finance Department dated 23.9.1985. Two categories of
cases were filed; one related to cases where pension was
denied on the ground that the applicants had not put in the
qualifying service of 10 years. Their services were counted
from the date of permanent absorption in the Transport
Department instead of their date of entry into service on
15.9.1975 i.e. the date of absorption in Transport
Corporations and in the second type of cases the employees
were not given benefit of pension while in service in the
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Transport Corporation as per G.O.Ms. 378. The Government
referred to G.O. No.212 to deny the benefit. It was pointed out
by the present appellants that the respondents had opted to
continue under Operational Subordinate Service Rules (in
short the ’Operational Rules’) when pension was offered to
operation staff in G.O. No.212 dated 28.3.1974. Acting on the
basis of demand raised by certain employees the aforesaid
G.O. No.212 dated 28.3.1974 was issued extending
pensionary benefits and called for exercising options either to
remain in the existing scheme or to come under pension
scheme.
The State of Tamil Nadu was at the relevant point of time
following two types of schemes. One was the pensionary
scheme under Madras Liberalised Pension Rules, 1960 (in
short ’Liberalised Rules’) and other was known as Non-
Pensionary Contributory Provident Fund Scheme (in short the
’Provident Fund Scheme’) under the Tamil Nadu State
Transport Department Operation Subordinate Retiring Invalid
and Compassionate Gratuity (Non-Pensionable Establishment)
Rules.
As noted above, the G.O.No.212 was issued on
23.9.1974. When the G.O. was issued certain doubts were
entertained as to under which scheme the concerned
employees were covered. According to the appellants the
respondents opted to continue in the Non-pensionary
Contributory Provident Fund scheme by exercising option in
writing under Rule 34 of the Tamil Nadu Pension Rules (in
short ’Pension Rules’). Certain benefits were granted on
18.7.1975 to the employees engaged by the Public Sector
Undertakings and the State Government.
There were some connected issues which had been dealt
with by this Court in detail in Government of Tamil Nadu and
Ors. v. M. Ananchu Asari and Ors. (2003 (10) SCC 503) and
Government of Tamil Nadu and Ors. v. M. Ananchu Asari and
Ors.(2005 (2) SCC 332). These cases related to fixation of cut
off dates for granting/calculating pensionary benefits. In M.
Ananchu Asari’s case (supra) it was held as follows:
"Hence, the fixation of the cut-off date as
1.4.1982 would, in our view, be appropriate.
Taking into account the aforementioned date
for the purpose of assessing the requisite
length of service, we direct the appellants to
take steps to extend the pensionary benefits to
the eligible employees. Having regard to the
conduct of the respondents in seeking the
remedy long after the options were exercised,
we consider it just and proper to direct that
the respondent employees whoever have
retired should get the arrears of pension only
from 1.1.1988, which date is fixed with
reference to the year of filing the first writ
petition, namely WP NO.7012 of 1988. The
fixation of pension and payment of arrears
should be done accordingly within a period of
four months from today. The appellants are
entitled to adjust the monetary benefits which
the employees would not have received if they
were to receive the pension."
In the review petition’s decision in M. Ananchu Asari’s case
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(supra) it was observed as follows:
"Certain contentions are raised on the merits,
especially, in regard to the conclusion of this
Court that the process of absorption did not
take place in 1975. We are not inclined to
rehear the arguments on merits. If the
petitioners failed to furnish the necessary
material even during the pendency of appeal in
this Court, that is no ground to review the
judgment. There is also nothing to be clarified
insofar as the operative part of the judgment is
concerned. It is not necessary for us to express
any view on the question whether the
Transport Corporation employees who were
erstwhile government servants retiring after
1.1.1988 would be eligible to get the pension in
addition to the salary drawn by them in the
Corporation as per the Rules and GOs
applicable to them. It is the contention of the
learned counsel for the respondent employees
that the GOs issued by the government
themselves contemplated such payment and in
fact those who were parties to the earlier writ
petitions were given that benefit. This issue
cannot legitimately form the subject matter of
either review or clarification."
Stand of the appellants in these appeals is that the
aforesaid two decisions did not relate to the facts of the
present case. On the contrary, learned counsel for the
respondents submitted that the issue is no longer res integra
in view of the aforesaid two judgments.
As noted above, the two relevant GOs are Nos.212 and
378, so far as relevant, they read as follows:
"GOVERNMENT OF TAMIL
(ABSTRACT)
Pension: Benefits of Madras Liberalised
Pension Rules - Extension to employees of
Tamil Nadu State Transport Department \026
orders \026 issued.
TRANSPORT DEPARTMENT
G.O.Ms. No.212 DATED 28th MARCH
1974
G.O. Ms. No.537, Transport Department,
dated 3.7.1972
ORDER
In the G.O. read above the Government has
approved the Special Rules for the Tamil Nadu
State Transport Department Operation Sub-
Ordinate Service. According to Rule 12 of the
said Rules, all the members of the services are
eligible for the benefits of gratuity and they will
be governed by the Special Gratuity Rules and
will not be entitled to pension or provident
Fund benefits as applicable to the regular
government servants. The Government have
since decided to extent the benefits of the
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Madras Liberalised Pension Rules, 1960 to the
workers of the Tamil Nadu State Transport
Department in lieu of Tamil Nadu State
Transport Department Operation Subordinate
Retiring. In valid and compassionate Gratuity
(Non-Pensionable Establishment) Rules.
02. The Government accordingly direct that
the workers of the Tamil Nadu State Transport
Department be entitled to the Pension and
Provident Fund and the Family Pension
benefits as applicable to the regular
Government servants under the Madras
Liberalised Pension Rules, 1960 and the
Madras Government Servants Family Pension
Rules, 1964.
03. This order shall take effect from 11.1.1974.
The workers shall be given the option either to
remain in the existing system or to be
governed by the Madras Liberalised Pension
Scheme. The implementation of the Madras
Liberalised Pension Rules, 1960 and the
Madras Government Servants Family Pension
Rules, 1964 shall be effected subjected to the
following conditions:-
(a) All existing employees borne on the Tamil
Nadu State Transport Department Subordinate
Service who opt for the Madras Liberalised
Pension benefits shall be governed by the
Madras Liberalised Pension Rules, 1960. For
this purpose, their entire service in the Tamil
Nadu State Transport Department Operation
Subordinate Service will be reckoned towards
pension, gratuity and all other benefits for
which they would have been entitled to under
the rules. They will not be eligible to get any
Government contribution to Employees
Provident Fund, 1952 now converted as Tamil
Nadu Government Industrial Employees
Provident Fund, 1969 and the amount of such
contribution already credit to the account of
the employees will be resumed and credited
back to the Government. The contribution
made towards the Employees Provident Fund,
so far will be deemed as having been
contributed to General Provident Fund
(Madras). They will have to continue to
contribute to the General Provident Fund
(Tamil Nadu).
xxx xxxx xxxx
06. However, to ensure that all existing
employees are given the option to continue to
be governed by the existing terms and
conditions, if for some reasons, they choose to
do so, Government direct that all the
employees covered in paragraph 3 (a) (c) of this
order will have the option to request to be
governed by the existing terms and conditions
of service. This option will be exercised on or
before 30.6.1974. Those who do not exercise
any option shall automatically come under the
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Liberalised Pension Rules, 1960. Option
cannot be exercised after 30.6.1974 and option
once exercised is final.
xxx xxxx xxxx
(BY ORDER OF THE GOVERNOR)
M.S. RAM
SPECIAL SECRETARY TO GOVERNMENT
xxx xxxx xxxx
"GOVERNMENT OF TAMIL NADU
(ABSTRACT)
FUNDAMENTAL RULES PERMANENT
ABSORPTION OF GOVERNMENT SERVANT
UNDER STATE OWNED
CORPORATIONS/BOARDS/UNDERTAKINGS
TERMINAL BENEFITS ORDERS ISSUED.
FINANCE (FR.II) DEPARTMENT
G.O.MS.No.378 Dated 18.4.1975.
01. G.O.Ms. No.1072, Finance, Dated
5.9.1964.
02. G.O.Ms. No.731, Industries (Special)
Dated, 21.5.1974.
ORDER
In the G.O. second read above certain
terminal benefits relating to Pension, Gratuity,
Provident Fund, Earned Leave, Family
Pension, etc., were granted to Government
servants permanently absorbed in the Tamil
Nadu Small Industries Corporation Limited.
The Government have decided to grant similar
benefits to Government servant permanently
absorbed under all other public undertakings
under the State Government and pass the
following orders in regard to the issues relating
to liabilities of Pension and Gratuity, Provident
Fund, Earned Leave, Family Pension
commutation of leave to those opted to the
service of the State owned
Corporations/Boards/Undertakings.
Pension and Gratuity:
In addition to pay in the public
undertaking an optee will be entitled to
pension/gratuity earned by him in
Government service prior to the such
absorption. If the qualifying service under
Government is less than ten years, Gratuity
and Death cum Retirement Gratuity alone will
be payable. They are permitted to draw their
pension/gratuity immediately on absorption in
the Corporation.
Provident Fund:
The amount of subscription together with
interest thereon, standing in the Provident
Fund Account of a Government Servant opting
for service in the Public Sector Undertaking
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may, if he so desires, be transferred to his new
Provident Fund Account under the
undertaking provided the undertaking also
agrees to such a transfer. If, however, the
Public Undertaking does not operate a
Provident Fund, the amount in question
should be refunded to the subscriber. An
officer covered by a Government contributory
Provident Fund will also be allowed, if he so
desires, to carry forward the corpus of the
amount including Government contributions
to his new Provident Fund Account under the
Public Sector undertaking. Once such a
transfer of Provident Fund balance has taken
place, the officer will be governed by the
Provident Fund rules of the undertaking. As
per General Provident Fund (Tamil Nadu)
Rules, the Provident Fund accumulation shall
continue to carry interest at the normal rate
till final payment or transfer of provident fund
accumulation.
xxx xxx xxx
Family Pension:
Since the optee for permanent absorption
in the Public Sector undertaking will cease to
be a Government Servant, the Governments
liability for family pension will cease.
Commutation of Pension:
i) Every Government servant will exercise
an option within six months of his
absorption for either of the alternatives
indicated below:-
(a) Receiving the monthly pension and
Death-cum-Retirement Gratuity
already worked out under the usual
Government arrangements.
OR
(b) Receiving the gratuity and a lump
sum amount in lieu of pension
worked out with reference to
commutation tables obtaining on
the date from which pension will be
admissible and payable under the
option orders.
ii) Any further liberalization of pension rules
decided upon by Government after the
permanent absorption of a Government
servant in a public enterprise would not
be extended to them.
iii) In cases where an officer at the time of
absorption has less than 10 years service
and is not entitled to pension the
question of proportionate pension will not
arise, as he will be eligible only to the
proportionate service gratuity in lieu of
pension and Death-cum-Retirement
Gratuity based on length of service.
(BY ORDER OF THE GOVERNOR)
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S. GUHAN
SECRETARY TO GOVERNMENT."
For resolving of the controversy, GO.1028 may also be
referred to. On a reading of the GOs the crucial expressions
appear to be pension/gratuity "earned by him" (underlined for
emphasis) and the period stipulated is 10 years. This is
indicative of the fact that the position is relatable to
government service and the qualifying service is 10 years in
terms of the Pension Rules. If the respondents’ stand is
accepted it would mean that even if no benefit under the
government scheme is available yet the pensionary benefits
have to be given. It is to be further noted that G.O. No.212
refers to G.O. 537. From the factual details available it
appears that the respondents preferred to remain under the
Provident Fund Scheme. In the affidavits filed by the
respondents in respect of the stand taken as to exercise of
option, there is no specific denial. On the contrary, it is stated
that the defendant does not remember whether the option was
exercised.
Learned counsel for the respondents has highlighted
about the beneficial nature of the provisions. It is to be noted
that the Tribunal proceeded on the basis as if G.O.378
superseded G.O 212. G.O. 378 refers to exercise of the option
by the employees who wanted to be covered by the scheme. If
really G.O.378 was intended to supersede G.O.212, the least
that could have been done is to refer to G.O.212 which is
admittedly not the position. G.O.378 nowhere refers to any
exercise of option under G.O.212. It is highlighted by learned
counsel for the respondents and the employees who have
intervened in the proceedings that when the Transport
Corporations were formed option was asked for. It is too well
known that in the Corporation no pensionary benefits were
there. So the question of asking for any option did not arise
and in that background the employees had opted for provident
fund scheme. After the cut off date i.e. 1.4.1982 the basis of
option changed and the earlier basis was also changed.
The controversy as noted above lies within a narrow
compass i.e. whether G.O. No.378 in effect superseded G.O.
No.212. Bare reading of the two GOs do not certainly indicate
that to be the position. Additionally, if the stand of the
respondents is accepted the expression "earned by him"
becomes superfluous. That can never be the intention. It
would be also relevant to quote a portion of GO MS No.1028
dated 23.9.1985 which has also relevance.
"GOVERNMENT OF TAMIL NADU
ABSTRACT
STATE PUBLIC SECTOR
UNDERTAKINGS PERMANENT ABSORPITON
OF GOVERNMENT SERVANT UNDER STATE
OWNED CORPORATIONS/BOARDS/
UNDERTAKINGS TERMINAL BENEFITS
ORDERS ISSUED.
TRANSPORT DEAPRTMENT
G.O. MS. NO.1028
DATED 23.9.1985
KURODHANA
PURATTAST-7
THIRUVALLUVARANDU:2016
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READ
01. G.O. Ms. No.378, Finance (FR.11)
Department, dated 18.04.1975
02. G.O. Ms. No.284, Finance Department
dated 31.3.1980.
0.3 From the Finance (Pen.) Department Lr.
No.74399/ Pen./83-8 dated 5.6.1985
addressed to the Accountant General Tamil
Nadu.
PENSION AND GRATUTITY
In addition to pay in the Public
Undertakings, an optee will be entitled to
pension/gratuity earned by him in government
service prior to such absorption as per Madras
Liberalisd Pension Rules 1960. They are
permitted to draw their pension/gratuity from
the date of their permanent absorption in the
Transport Corporations. The arrears of
monthly pension from the date of their
permanent absorption till date or the lumpsum
amount based on the commuted value of
pension according to their option shall be paid
immediately in respect of retired/legal heirs of
the deceased employees. Some of the retired
employees were sanctioned and paid pension
only from the dates of the actual retirement
from the Transport Corporations on attaining
the age of superannuation as per the orders
issued in the G.O. second read above. In
respect of such cases the arrears of monthly
pension from the date of absorption to the date
of retirement of lumpsum amount based on
the commuted value after adjusting the
monthly pension already received till date
according to their option shall be paid to them.
In respect of the employees who expired on or
after their permanent absorption the legal
heirs would have been paid only Death-cum-
Retirement Gratuity. In such cases the
lumpsum amount based on the commuted
value will be paid to the legal heirs, since the
payment of monthly pension/ family pension
does not arise.
EMPLOYEES WHO ARE IN SERVICE IN STATE
TRANSPORT UNDERTAKINGS
If the employees opt for lump sum
amount based on the commuted value of
pension, the entire amount of pension and
gratuity will be paid to them in the form of
National Savings Certificate. If they opt for
monthly pension, the arrears of monthly
pension from the date of absorption to till date
and gratuity will be paid to them in the form of
National Savings Certificate and the current
monthly pension will be paid every month:
04. The expenditure towards the settlement
of Terminal Benefits referred to in para 3 above
will be initially met by the respective Transport
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Corporations and subsequently adjusted
against the outstanding Government loan to
the Corporations.
06. FAMILY PENSION
1. Since the optee for permanent
absorption in the State Transport
Undertakings will cease to be a Government
servant the Government liability for Family
Pension will cease.
The erstwhile Tamil Nadu State Transport
Department employees absorbed permanently
in the State Transport Undertakings should be
allowed pension increase also in their pension
besides Dearness Allowance, Additional
Dearness Allowance as applicable from time to
time to Government pensioners who retired on
that date as per the orders issued in the letter
third read above.
(BY ORDER OF THE GOVERNOR)
A.K. VENKAT SUBRAMANIAN
COMMISSIONER & SECRETARY TO
GOVERNMENT"
Therefore, the stand of the State Government appears to
be correct. The view expressed by the Tribunal is indefensible
and is set aside. The appeals are allowed but with no orders as
to costs.