Transport corporation pensioners cannot claim parity with government pensioners under separate pension rules.

The respondents were retired employees of Tamil Nadu State Transport Corporations, which are companies registered under the Companies Act.

They were covered by the Tamil Nadu State Transport Corporation Employees’ Pension Fund Rules, a scheme distinct from the Tamil Nadu Pension Rules governing State Government employees

By G.O.Ms.No.142 dated 26 September 2019, the Government extended pension revision linked to the Seventh Pay Commission to Transport Corporation pensioners who retired between 1 January 2016 and 31 March 2018, with notional effect from 1 January 2016 and prospective monetary benefits.

Pensioners who retired before 1 January 2016 sought the same revision and related benefits.

The Single Judge allowed their writ petitions, holding, in substance, that pensioners formed a homogeneous class and the cut-off date was impermissible.

The State and Transport Corporations appealed; a connected writ petition was also before the Division Bench

1. Whether pensioners of State Transport Corporations, governed by a separate pension scheme, could claim parity with State Government pensioners governed by different rules

2. Whether the cut-off date of 1 January 2016 for extending the pension revision to Transport Corporation pensioners was arbitrary or discriminatory under Article 14

3. Whether the Single Judge was justified in directing extension of the benefits to Transport Corporation pensioners who retired before the cut-off date

The Court applied the Tamil Nadu State Transport Corporation Employees’ Pension Fund Rules, including Rule 2(w), which defines pensionary benefits under that scheme and distinguishes them from Government employees’ retirement benefits.

It held that a Government-owned company remains distinct from the Government and that its employees do not, merely by reason of Government ownership, become Government servants or acquire a right to Government service benefits.

Under Article 14, a cut-off date for extending financial benefits may be valid where it has a rational basis, including the Government’s financial considerations; courts ordinarily do not interfere with such policy decisions absent arbitrariness or a similar defect.

D.S. Nakara v. Union of India does not establish that all pensioners across distinct schemes or employer categories must be treated as one homogeneous class; its application is limited by later decisions, including Himachal Road Transport Corporation v. HRTC Retired Employees Union and State of Punjab v. Amar Nath Goyal.

The Court also relied on Chairman and MD, Kerala SRTC v. K.O. Varghese concerning the relevance of a corporation’s financial position when deciding whether to implement enhanced pension benefits.

The Court found that the respondents were governed by the Transport Corporation Pension Fund Rules, not the Tamil Nadu Pension Rules, and therefore could not claim automatic parity with State Government pensioners.

G.O.Ms.No.142 was a separate administrative and policy decision, limited to Transport Corporation employees retiring within the specified period; that order had not been challenged.

Extending it to all earlier retirees would impose a substantial financial burden—stated to be approximately ₹1,300 crores—on the Pension Fund Trust.

The Court held that financial implications could legitimately inform the cut-off date and that the Single Judge’s reliance on Nakara to treat pensioners as one homogeneous class overlooked the distinct governing schemes and the limits recognised in subsequent Supreme Court decisions.

It upheld the distinction between Government pensioners and Transport Corporation pensioners and declined to extend the benefits of G.O.Ms.No.142 to Transport Corporation pensioners who retired before 1 January 2016.

No costs were ordered.