IN THE SUPREME COURT OF INDIA
Writ Petition Nos. 5939-41 of 1980
Decided On: 17.12.1982
Appellants: D.S. Nakara and Ors.
Vs.
Respondent: Union of India (UOI)
Hon'ble Judges:
Y.V. Chandrachud, C.J., D.A. Desai, O. Chinnappa Reddy,v.D. Tulzapurkar and Baharul Islam , JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Anil B. Divan, Vineeta Sen Gupta and P.H. Parekh, Advs.
For Respondents/Defendant: L.N. Sinha, Attorney General, M.M. Addul Khader, N. Nettar, A. Subhashini andG.L. Sanghi, Advs.
For Intervener: G.L. Sanghi, S.R. Srivastava and K.K. Gupta, Advs.
Subject: Service
Subject: Constitution
Catch Words
Mentioned IN
Acts/Rules/Orders:
Constitution of India - Articles 14, 32, 38(1), 39, 41, 148 and 309; Central Services (Pension) Rules, 1972 - Rule 34
Cases Referred:
Maneka Gandhi v. Union of India, (1978) 1 SCC 248, (1978) 2 SCR 621, AIR 1978 SC 597; Ram Krishna Dalmia v. Justice S.R. Tendolkar, 1959 SCR 279, AIR 1958 SC 538; Douge v. Board of Education 302 US 74; D.R. Nim v. Union of India, (1967) 2 SCR 325, AIR 1967 SC 1301, (1967) 2 SCJ 347, (1968) 1 LLJ 264; Louisville Gas Co. v. Alabama Power Co. 240 US 30, (1927); Randhir Singh v. Union of India, (1982) 1 SCC 618, 1982 SCC (L&S) 119; S.P. Gupta v. Union of India, 1981 Supp SCC 87; In Re: Special Courts Bill 1978 (1979) 1 SCC 380 : (1979) 2 SCR 476 : AIR 1979 SC 478; E.P. Royappa v. State of T.N. (1974) 4 SCC 3 : (1974) 2 SCR 348 : 1974 SCC (L&S) 165 : (1974) 1 LLJ 172; Ajay Hasia v. Khalid Mujib Sehravardi (1981) 1 SCC 722 : 1981 SCC (L&S) 258 : (1981) 2 SCR 79 : (1981) 1 LLJ 103; Air India v. Nergesh Meerza (1981) 4 SCC 335 : 1981 SCC (L&S) 599 : (1982) 1 SCR 438 : 1981 UPSC 137 : AIR 1981 SC 1829; Deokinandan Prasad v. State of Bihar (1971) 2 SCC 330 : 1971 Supp SCR 634 : AIR 1971 SC 1409 : (1971) 1 LLJ 557; State of Punjab v. Iqbal Singh (1976) 2 SCC 1 : 1976 SCC (L&S) 172 : (1976) 3 SCR 360 : 1976 Lab IC 474; Jaila Singh v. State of Rajasthan 1975 Supp SCR 428 : (1976) 1 SCC 602 : AIR 1975 SC 1436; Union of India v. Parameswaran Match Works (1975) 2 SCR 573 : (1975) 1 SCC 305 : AIR 1974 SC 2349; D.C. Gouse & Co. v. State of Kerala (1980) 1 SCR 804 : (1980) 2 SCC 410 : AIR 1980 SC 271
Citing Reference:
* Mentioned
*** Discussed
Maneka Gandhi v. Union of India,***
Ram Krishna Dalmia v. Justice S.R. Tendolkar,***
Douge v. Board of Education ***
D.R. Nim v. Union of India,***
Louisville Gas Co. v. Alabama Power Co.***
Randhir Singh v. Union of India***
S.P. Gupta v. Union of India ***
In Re: Special Courts Bill ***
E.P. Royappa v. State of T.N.***
Ajay Hasia v. Khalid Mujib Sehravardi ***
Air India v. Nergesh Meerza ***
Deokinandan Prasad v. State of Bihar ***
State of Punjab v. Iqbal Singh *
Jaila Singh v. State of Rajasthan ***
Union of India v. Parameswaran Match Works ***
D.C. Gouse & Co. v. State of Kerala ***
JUDGMENT
1. With a slight variation to suit the context Woolesey's prayer : "had I served my God as reverently as I did my king, I would not have fallen on these days of penury" is chanted by petitioners in this group of petitions in the Shellian tune : 'I fall on the thorns of life I bleed.' Old age, ebbing, mental and physical prowess, atrophy of both muscle and brain powers permeating these petitions, the petitioners in the fall of life yearn for equality of treatment which is being meted out to those who are soon going to join and swell their own ranks,
2. Do pensioners entitled to receive superannuation or retiring pension under Central Civil Services (Pension) Rules, 1972 ('1972 Rules' for short) form a class as a whole? Is the date of retirement a relevant consideration for eligibility when a revised formula for computation of pension is ushered in and made effective from a specified date? Would differential treatment to pensioners related to the date of retirement qua the revised formula for computation of pension attract Article 14 of the Constitution and the element of discrimination liable to be declared unconstitutional as being violative of Article 14? These and the related questions debated in this group of petitions call for an answer in the backdrop of a welfare State and bearing in mind that pension is a socio-economic justice measure providing relief when advancing age gradually but irrevocably impairs capacity to stand on one's own feet.
3. Factual matrix has little relevance to the issues raised and canvassed at the hearing. Petitioners 1 and 2 are retired pensioners of the Central Government, the first being a civil servant and the second being a member of the service personnel of the Armed Forces. The third petitioner is a society registered under the Societies Registration Act, 1860, formed to ventilate the legitimate public problems and consistent with its objective it is espousing the cause of the pensioners all over the country. Its locus standi is in question but that is a different matter. The first petitioner retired in 1972 and on computation, his pension worked out at Rs. 675/- p.m. and along with the dearness relief granted from time to time, at the relevant time he was in receipt of monthly pension of Rs. 935/-. The second petitioner retired at or about that time and at the relevant time was in receipt of a pension plus dearness relief of Rs. 981/-p.m. Union of India has been revising and liberalising the pension rules from time to time. Some landmark changes may be noticed.
4. The First Central Pay Commission (1946-47) recommended that the age of retirement in future should be uniformly 58 years for all services and the scale of pension should be 1/80 of the emoluments for each year of service, subject to a limit of 35/80 with a ceiling of Rs. 8,000 per year for 35 years of service, which the Government of India while accepting the recommendation raised to Rs. 8,100 per year which would earn a monthly pension of Rs. 675 at the maximum. The Second Central Pay Commission (1957-58) re-affirmed that the age of superannuation should be 58 years for all classes of public servants but did not recommend any increase in the non-contributory retirement benefits and recommended that if in future any improvement is to be made, it was the considered view of the Commission that these benefits should be on a contributory basis. The Administrative Reforms Commission ('ARC' for short) set up by the Government of India in 1956 took note of the fact that the cost of living has shot up and correspondingly the possibility of savings has gone down and consequently the drop in wages on retirement is in reality much steeper than what the quantum of pension would indicate, and accordingly the ARC recommended that the quantum of pension admissible may be raised to 3/6 of the emoluments of the last three years of service as against the existing 3/8 and the ceiling should be raised from Rs. 675 p.m. to Rs. 1000 p.m. Before the Government could take its decision on the recommendations of the ARC, the Third Central Pay Commission was set up. One of the terms of reference of the Third Pay Commission was 'death-cum-retirement benefits of Central Government employees'. The Third Pay Commission did not examine the question of relief to pensioners because in its view unless the terms of reference were suitably amended it would not be within their jurisdiction to examine this question and on a reference by them, the Government of India decided not to amend the terms of reference. With regard to the future pensioners the Third Pay Commission while reiterating that the age of superannuation should continue to be 58 years further recommended that no change in the existing formula for computing pension is considered necessary. The only important recommendation worth noticing is that the Com mission recommended that the existing ceiling of maximum pension should be raised from Rs. 675 to Rs. 1,000 p.m. and the maximum of the gratuity should be raised from Rs. 24,000 to Rs. 30,000.
5. On May 25, 1979, Government of India, Ministry of Finance, issued Office Memorandum No. F-19(3)-EV-79 whereby the formula for computation of pension was liberalised but made it applicable to Government servants who were in service on March 31, 1979 and retire from service on or after that date (specified date for short). The formula introduced a slab system for computation of pension. This liberalised pension formula was applicable to employees governed by the 1972 Rules retiring on or after the specified date. The pension for the service personnel which will include Army, Navy and Air Force staff is governed by the relevant regulations. By the Memorandum of the Ministry of Defence bearing No. B/40725/AG/PS4-C/1816/AD (Pension)/Services dated September 28, 1979, the liberalised pension formula introduced for the government servants governed by the 1972 rules was extended to the Armed Forces personnel subject to limitations set out in the memorandum with a condition that the new rules of pension would be effective from April 1, 1979, and may be applicable to all service officers who become/became non-effective on or after that date, (for short specified date).
6. The chronology of events herein narrated would bring to surface the contentions raised in these petitions. The liberalised pension formula shall be applicable prospectively to those who retired on or after March 31, 1979 in case of government servants covered by 1972 Rules and in respect of defence personnel those who became/become non-effective on or after April 1, 1979. Consequently those who retired prior to the specified date would not be entitled to the benefits of the liberalised pension formula.
7. Petitioners accordingly contend that this Court may consider the raison d'etre for payment of pension. If the Pension is paid for past satisfactory service rendered, and to avoid destitution in old age as well as a social welfare or socio-economic justice measure, the differential treatment for those retiring prior to a certain date and those retiring subsequently, the choice of the date being wholly arbitrary, would be according differential treatment to pensioners who form a class irrespective of the date of retirement and, there fore, would be violative of Article 14. It was also contended that classification based on fortuitous circumstance of retirement before or subsequent to a date, fixing of which is not shown to be related to any rational principle, would be equally violative of Article 14.
8. Primary contention is that the pensioners of the Central Government form a class for purpose of pensionary benefits and there could not be mini-classification within the class designated as pensioners. The expression 'pensioner' is generally understood in contra-distinction to the one in service. Government servants in service, in other words, those who have not retired, are entitled to salary and other allowances. Those who retire and are designated as 'pensioners' are entitled to receive pension under the relevant rules. Therefore, this would clearly indicate that those who render service and retire en superannuation or any other mode of retirement and are in receipt of pension are comprehended in the expression 'pensioners'.
9. Is this class of pensioners further divisible for the purpose of 'entitlement' and 'payment' of pension into those who retired by certain date and those who retired after that date? If date of retirement can be accepted as a valid criterion for classification, on retirement each individual government servant would form a class by himself because the date of retirement of each is correlated to his birth date and on attaining a certain age he had to retire. It is only after the recommendations of the Third Central Pay Commission were accepted by the Government of India that the retirement dates have been specified to be 12 in number being last day of each month in which the birth date of the individual government servant happens to fall. In other words, all government servants who retire correlated to birth date on attaining the age of superannuation in a given month shall not retire on that date but shall retire on the last day of the month. Now, if date of retirement is a valid criterion for classification, those who retire at the end of every month shall form a class by themselves. This is too microscopic a classification to be upheld for any valid purpose. Is it permissible or is it violative of Article 14?
10. The scope, content and meaning of Article 14 of the Constitution has been the subject-matter of intensive examination by this Court in a catena of decisions. It would, therefore, be merely adding to the length of this judgment to recapitulate all those decisions and it is better to avoid that exercise save and except referring to the latest decision on the subject in Maneka Gandhi v. Union of India MANU/SC/0133/1978 from which the following observation may be extracted:
...what is the content and reach of the great equalising principle enunciated in this article? There can be no doubt that it is a founding faith of the Constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or lexicographic approach. No attempt should be made to truncate its all-embracing scope and meaning for, to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits.... Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Article 14 like a brooding omnipresence.
11. The decisions clearly lay down that though Article 14 forbids class legislation, it does not forbid reasonable classification for the purpose of legislation. In order, however, to pass the test of permissible classification, two conditions must be fulfilled, viz., (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group; and (ii) that that differentia must have a rational relation to the objects sought to be achieved by the statute in question, (see Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar and Ors. [1959] S.C.R. 279 at p. 296 The classification may be founded on differential basis according to objects sought to be achieved but what is implicit in it is that there ought to be a nexus i.e., causal connection between the basis of classification and object of the statute under consideration. It is equally well settled by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure.
12. After an exhaustive review of almost all decisions bearing on the question of Article 14, this Court speaking through Chandrachud, C.J. in Re. Special Courts Bill MANU/SC/0039/1978 restated the settled propositions which emerged from the judgments of this Court undoubtedly insofar as they were relevant to the decision on the points arising for consideration in that matter. Four of them are apt and relevant for the present purpose and may be extracted. They are:
3. The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is justified if it is not palpably arbitrary.
4. The principle underlying the guarantee of Article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same remedies should be made available to them irrespective of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is substantially the same.
6. The law can make and set apart the classes according of the needs and exigencies of the society and as suggested by experience. It can recognise even degree of evil, but the classification should never be arbitrary, artificial or evasive.
7. The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that differentia must have a rational relation to the object sought to be achieved by the Act.
13. The other facet of Article 14 which must be remembered is that it eschews arbitrariness in any form. Article 14 has, therefore, not to be held identical with the doctrine of classification. As was noticed in Maneka Gandhi's case in the earliest stages of evolution of the Constitutional law, Article 14 came to be identified with the doctrine of classification because the view taken was that Article 14 forbids discrimination and there will be no discrimination where the classification making the differentia fulfils the aforementioned two conditions. However, in EP. Royappa v. State of Tamil Nadu MANU/SC/0380/1973, it was held that the basic principle which informs both Articles 14 and 16 is equality and inhibition against discrimination. this Court further observed as under:
From a positivistic point of view, equality is antithetic to arbitrariness. In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Article 14, and if it affects any matter relating to public employment, it is also violative of Article 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment.
14. Justice Iyer has in his inimitable style dissected Article 14 as under:
The article has a pervasive processual potency and versatile quality, equalitarian in its soul and allergic to discriminatory diktats. Equality is the antithesis of arbitrariness and ex cathedra ipse dixit is the ally of demagogic authoritarianism. Only knight-errants of 'executive excesses'-if we may use current cliche-can fall in love with the Dame of despotism, legislative or administrative. If this Court gives in here it gives up the ghost. And so it that I insist on the dynamics of limitations on fundamental freedoms as implying the rule of law; be you ever so high, the law is above you." MANU/SC/0133/1978.
15. Affirming and explaining this view, the Constitution Bench in Ajay Hasia etc. v. Khalid Mujib Sehravardi and Ors etc. MANU/SC/0498/1980 held that it must, therefore, now be taken to be well settled that what Article 14 strikes at is arbitrariness because any action that is arbitrary must necessarily involve negation of equality. The Court made it explicit that where an act is arbitrary it is implicit in it that it is un equal both according to political logic and constitutional law and is, therefore, violative of Article 14. After a review of large number of decisions bearing on the subject, in Air India etc. v. Nargesh Meerza and Ors. etc. MANU/SC/0688/1981 the Court formulated propositions emerging from analysis and examination of earlier decisions. One such proposition held well established is that Article 14 is certainly attracted where equals are treated differently without any reasonable basis.