Allahabad High Court
Uma Shanker Upadhyaya And 23 Others vs State Of U.P.Through Prin.Secy. Deptt. ... on 7 August, 2025
Author: Abdul Moin
Bench: Abdul Moin
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Neutral Citation No. - 2025:AHC-LKO:46188
A.F.R.
Court No. - 4
Case :- WRIT - A No. - 1152 of 2005
Petitioner :- Uma Shanker Upadhyaya And 23 Others
Respondent :- State Of U.P.Through Prin.Secy. Deptt. Of Finance And Another
Counsel for Petitioner :- Yogendra Misra,Pankaj Kumar Pandey
Counsel for Respondent :- C.S.C.,M M Asthana,Vivek Shukla
Hon'ble Abdul Moin,J.
1. Heard learned counsel for the petitioners and Sri Vivek Shukla, learned Additional Chief Standing Counsel appearing on behalf of the respondents.
2. The facts of the case have already been set forth in detail in the order dated 04.07.2025. The relevant extract of the order dated 04.07.2025 is reproduced below:-
"1. Heard.
2. The petitioners, all retired Teachers of Basic Shiksha Parishad having retired prior to 01.07.2001, are aggrieved by the Government Order dated 29.06.2004, a copy of which is Annexure-2 to the petition, whereby their claim for grant of revised pay scales, so far as pay parity has been granted at par with the Central Government Teachers w.e.f. 01.07.2001, has been rejected. The petitioners are also aggrieved by the portion of the Government Order dated 03.09.2001, a copy of which is Annexure-1 to the petition, where in paragraph 2(1) it has been provided that the benefit of the earlier Government Order shall only be extended to those primary teachers and headmasters who are in service on 01.07.2001. A further prayer is for a mandamus commanding the respondents to grant the pay scales as given to the Central Government teachers to the petitioners also w.e.f. 01.01.1996.
3. Bereft of unnecessary details the facts as urged by the learned counsel for the petitioners are that all the petitioners were primary teachers having retired prior to 01.07.2001. A government order dated 20.07.2001, a copy of which is Annexure-4 to the petition, was issued in pursuance to the Fifth Pay Commission whereby the pay scales of the Fifth Pay Commission were granted to all the primary and secondary school teachers w.e.f. 01.01.1996. At the same time, considering the parity as had been claimed by the said teachers with the Central Government teachers, a revised pay scale was granted w.e.f. 01.07.2001 to the said teachers which, as already indicated above, was at par with the Central Government teachers. The Government Order dated 20.07.2001 provided in Clause 3 that a separate order would be issued for the purposes of admissibility of the pay scales, pay fixation and payment of arrears.
4. Considering clause 3 of the Government Order dated 20.07.2001 another Government Order dated 08.08.2001, a copy of which is Annexure-5 to the writ petition, was issued which, according to the petitioners, extended the benefit of pay scale which had been provided w.e.f. 01.07.2001 w.e.f. 01.01.1996 itself.
5. However, even before the petitioners could be granted the benefit of the said government order dated 08.08.2001 the government order impugned dated 03.09.2001, a copy of which is Annexure-1 to the petition, was issued which provided that the benefit of the revised pay scale, as provided vide government order dated 20.07.2001 i.e. at par with the Central Government teachers to the primary and secondary teachers, would only be admissible to those teachers who are in service on 01.07.2001.
6. The grievance of the petitioners is that once the government order dated 20.07.2001 had in fact granted parity to the teachers of the primary and secondary with the Central Government teachers yet the same was provided w.e.f. 01.07.2001 but subsequent thereto vide government order dated 08.08.2001 the benefit of the said pay scales was extended w.e.f. 01.01.1996 consequently there cannot be any occasion for issuance of the government order dated 03.09.2001 whereby restricting the said pay scales to only those teachers who were in service on 01.07.2001 more particularly when the petitioners had already retired on attaining the age of superannuation prior to 01.07.2001 and thus the impugned government order dated 03.09.2001 tends to create a class in the class of the teachers.
7. On the other hand, Sri Vivek Shukla, learned Additional Chief Standing Counsel, while placing reliance on the averments made in the counter affidavit filed on behalf of respondent no.1 has argued that as the petitioners are retired teachers between 01.01.1996 to 01.07.2001 consequently there are not entitled to the benefit of the Government Order dated 03.09.2001 and that the government order dated 03.09.2001 has correctly been passed.
8. Elaborating the same, the argument of Sri Shukla is that once the petitioners had retired prior to the said pay scale at par with the teachers of the Central Government coming into force i.e. w.e.f. 01.07.2001 as such the pension of the petitioners is to be fixed on the basis of the last drawn salary that had been drawn by them and thus there cannot be any occasion for extension of the said revised pay scale as has come into force w.e.f. 01.07.2001 to the petitioners who are all retired teachers.
9. However, before proceeding further the effect of the Government Order dated 08.08.2001 would have to be considered more particularly when the government order dated 20.07.2001 categorically provided in Clause 3 that a separate order would be issued pertaining to pay fixation, payment of arrears etc. and the government order dated 08.08.2001 has been issued considering Clause 3 of the government order dated 20.07.2001. Thus, it would have to be considered as to whether the government order dated 08.08.2001 would only be restricted to Clause 3 of the government order dated 20.07.2001 and not to the actual fixation of revised pay at par with Central Government teachers w.e.f. 01.01.1996, as has been urged by the learned counsel for the petitioners."
3. From perusal of the aforesaid order it thus emerges that the interpretation of the Government Orders dated 20.07.2001, 08.08.2001 and 03.09.2001 is to be considered i.e. as to whether the revised pay scales at par with the Central Government Teachers would be admissible w.e.f. 01.01.1996 or 01.07.2001.
4. Admittedly, all the petitioners retired prior to 01.07.2001.
5. The Government order dated 20.07.2001 on reproduction reads as under:-
"Announcement of giving Pay Scale to teachers as per Fifth Pay Commission
No.- Ve.Aa.-2-1262/Das-2001-53/2001
From, To,
V.K. Sharma, 1- Principal Secretary, Education, U.P. Govt.
Secretary, Finance, 2- Secretary, Secondary/Basic Education, U.P. Govt.
U.P. Government 3- Director, Secondary/Basic Education, U.P. Govt.
Finance(Finance Commission) Section-2 Lucknow: Date: 20 July, 2001
Subject:- Regarding granting the same pay scale to the teachers of primary and secondary educational institutions of the State as that of the teachers of equivalent level at the Centre, on the basis of the recommendations of the Fifth Central Pay Commission.
Sir,
I am directed to state that on the basis of the decision taken on the recommendations made in the Second Report (Partial)/Sixth Report of Pay Committee (1997-99), revised pay scales have been approved for the teachers of educational institutions of the State w.e.f 1-1-1996 vide Government Order No.- Ve.Aa.-2-1007/Das-17G-98, dated: 10th July, 1998 and Government Order No.- Ve.Aa.-2-1282/Das-17 (G)-98, dated: 07th October, 1998.
2. After due consideration of the demand of teachers of primary and secondary educational institutions of the State regarding granting pay scale equal to that of the equivalent teachers of Central Government on the recommendations of Fifth Central Pay Commission, the Governor is pleased to accord his approval for amending the pay scale of teachers mentioned in Column-1 of the annexed table from the pay scales admitted to them from 1.1.1996, mentioned in Column-2, as per the pay scales mentioned in Column-3, w.e.f. 01st July, 2001.
3. As per above, the necessary government orders will be issued separately for the concerned teachers regarding admissibility of Regular Grade/ Selection Grade and Promotional Grade, process of pay fixation and payment of arrears etc. in the amended pay scales.
Enclosures:- As above
Sincerly,
V.K. Sharma,
Secretary, Finance
Annexure to Government Order No.- Ve.Aa.2-1262/ Das-2001-53/2001, Dated: July 20, 2001
Designation
Pay Scale applicable from 1-1-1996 (Rs.)
Amended Pay Scale applicable from 1-7-2001 (Rs.)
Basic Education
1- Primary Teacher
A- Regular Grade
B- Selection Grade
3600-85-4450-100-5350
4000-85-4680-100-5780
4500-125-7000
5000-150-8000
2- Principal of Primary/ Teacher of Upper Primary
A- Regular Grade
B- Selection Grade
4250-100-5150-125-6400
4625-125-6750
5500-175-9000
6500-200-10500
3- Headmaster of Upper Primary
A- Regular Grade
B- Selection Grade
4625-125-7000
4800-150-7650
6500-200-10500
7500-250-12000
Secondary Education
1- L.T. Teacher
A- Regular Grade
B- Selection Grade
C-Promotional Grade
4500-125-7000
5500-175-8650
6500-200-10500
5500-175-9000
6500-200-10500
7500-250-12000
2- Lecturer
A- Regular Grade
B- Selection Grade
C-Promotional Grade
5500-175-8650
6500-200-10500
8000 -275 -13500
6500-200-10500
7500-250-12000
8000-275-13500
3- Headmaster of High School
A- Regular Grade
B- Selection Grade
6500-200-10500
8000-275-13500
7500-250-12000
8000-275-13500
4- Principal
A- Regular Grade
B- Selection Grade
8000-275-13500
10000-325-15200
10000-325-15200
-
R.S. Singh
Special Secretary, Finance."
(Translation by the Court)
6. The Government order dated 08.08.2001 on reproduction reads as under:-
"Procedure for Pay Fixation of Teachers
No.: Ve.Aa.-2-1432/Das-2001-53/2001
From,
V.K. Sharma,
Secretary, Finance,
Government of Uttar Pradesh.
To,
1. The Principal Secretary, Education, Government of Uttar Pradesh
2. The Secretary, Secondary/Basic Education, Government of Uttar Pradesh
3. The Director, Secondary/Basic Education, Uttar Pradesh.
Finance (Pay Commission) Section-2 Lucknow: Date: 08 August 2001
Subject: Procedure for fixation of pay in the amended pay scales sanctioned w.e.f. 01 July 2001 for the teachers of primary and secondary educational institutions of the State.
Sir,
I am directed to state in reference to the aforementioned subject that vide Government Order No. Ve.Aa.-2-1262/Das-2001-53/2001 dated 20 July 2001, orders have been issued for amending the pay scales of primary and secondary school teachers of the State w.e.f. 01 July 2001. In continuation of Para 3 of the aforesaid Government Order dated 20 July 2001 and in accordance with the Annexure thereto, the Hon'ble Governor is pleased to accord approval for the admissibility of the sanctioned amended pay scales (Regular Grade/ Selection Grade / Promotional Grade) subject to the following conditions :
(1) The amended pay scale shall be admissible only to those teaching posts which are mentioned in Column-1 of the Annexure to aforesaid Government Order dated 20 July 2001.
(2) All conditions and restrictions prescribed in the pay scale applicable from 01.01.1996 for the admissibility of the Selection Grade/Promotional Grade shall continue to remain applicable for the admissibility of the amended Selection Grade/Promotional Grade.
(3) If there exists a combined cadre of teaching and non-teaching posts, and the pay scale of the teaching post has been upgraded under the aforementioned Government Order dated 20 July 2001, then the upgraded pay scale shall be admissible to the incumbents of the combined cadre only upon assuming the teaching post on the basis of seniority.
(4) If the pay scale of any post of a feeding cadre, under the above Government Order dated 20 July 2001, becomes higher than that of its promotional post, then under the existing provisions, the incumbents officiating on the promotional post shall have the option to revert to their previously held post.
2. I am further directed to state that following procedure shall be adopted for fixation of pay and payment of arrears in the above sanctioned amended pay scales :
(1) The pay of concerned incumbent in the pay scale amended w.e.f. 01 July 2001, shall be fixed in accordance with Audit Instruction No. 4 given below to Fundamental Rule 22 of the Financial Handbook, Volume II, Part 2-4. The concerned incumbent shall have the right to exercise an option under Fundamental Rule 23(1) i.e. he may opt for the amended pay scale either from 01 July 2001 or from the date of any subsequent increment in the existing pay scale. However, the option once exercised in this regard, shall be treated as final. The last date for exercising the option shall be within a period of 90 days from the date of issuance of this Government Order. If no option is submitted by any teacher within the stipulated time period, it shall be deemed that he has opted to receive the amended pay scale w.e.f. 01 July 2001 subject to admissibility.
(2) As a result of pay scale fixation in the amended pay scale, the increased amount of salary (if any) for the period from 01 July 2001 to 31 December 2001 shall be deposited in the Provident Fund account of the concerned incumbent. If any incumbent is not a member of the Provident Fund, the said amount shall be given to him in the form of National Savings Certificate (NSC); however, the portion of the amount for which NSC is not available, shall be paid in cash.
(3) The cash payment of enhanced pay shall be made along with the salary for the month of January 2002 (which will be payable in February 2002).
Sincerely,
V.K. Sharma
Secretary, Finance"
(Translation by the Court)
7. The Government order dated 03.09.2001 on reproduction reads as under:-
"Fifth Central Pay Commission- Equal pay scales to be provided at equivalent levels.
Number - Ve.Aa.-2-1650/Das -2001- 53/2001
From,
Anand Mishra,
Secretary, Finance,
Government of Uttar Pradesh.
To,
1- Principal Secretary, Education, Government of Uttar Pradesh.
2- Secretary Secondary Education/Basic Education,Government of Uttar Pradesh.
3- Director, Secondary Education/Basic Education, Uttar Pradesh.
Finance (Pay Commission) Section - 2 Lucknow: Dated 03 September, 2001
Subject: Regarding granting the same pay scale to the teachers of primary and secondary educational institutions of the State as that of the teachers of equivalent level at the Centre on the basis of the recommendations of the Fifth Central Pay Commission.
Sir,
With reference to the above-mentioned Government Order No. Ve.Aa.-2-2162/Das-2001-53/2001, dated 20 July, 2001 and Government Order No. Ve.Aa.-2-1432/Das-2001-53/2001, dated 08 August, 2001, I am directed to convey that after due consideration the Governor is pleased to approve the amendment of pay scales for Basic Education teachers mentioned in the table annexed to the Government Order dated 20 July 2001, according to the table annexed with this Government Order.
2. Paragraph 2(1) of Government Order No. Ve.Aa.-2-1432/Das-2001-53/2001, dated 8 August, 2001, regarding the pay fixation of Primary and Secondary Education teachers of the State in the amended pay scales effective from 01 July, 2001, shall stand amended as follows:
(1) The pay of such teachers of Primary Education, mentioned in Column 1 of the Annexure to this Government Order, who were in service on 01 July, 2001, shall be fixed from the pay scales shown in Column 2 to the pay scales mentioned in Column 3 on notional basis from 01.01.1996 or afterwards date of appointment. Similarly, the pay of such teachers of Secondary Education, who were in service on 01 July, 2001, shall be fixed from the pay scale shown in Column 2 of the Annexure to Government Order No. Ve.Aa.-2-1262/Das-2001-53/2001, dated 20 July, 2001 to the pay scale in Column 3, on notional basis from 01.01.1996 or the afterwards actual date of appointment. Thus the payment of pay calculated after pay fixation on notional basis w.e.f. 01 July 2001 shall be made as per the provisions of Paragraphs 2(2) and 2(3) of Government Order No. Ve.Aa.-2-1432/Das-2001-53/2001, dated 08 August, 2001. As per above arrangement, no arrear shall be payable for the period from 01 January, 1996 to 30 June, 2001 in consequence of notional pay fixation w.e.f. 01.01.1996.
(2) Government Orders regarding amendment/admissibility in the current provisions of selection grade and promotional grade for Basic Education teachers will be issued separately.
3. The above-mentioned Government Orders be presumed amended up to above extent, and all their other terms and conditions shall remain applicable as these are.
Enclosure: As above.
Sincerely
Anand Mishra,
Secretary, Finance.
Annexure to Government Order No. Ve.Aa.-2-1650/Das-2001-53/2001, dated 03 September, 2001
Designation
Existing Pay Scale applicable w.e.f. 01-01-1996 (Rs.)
Amended pay scale w.e.f. 1-7-2001 (Rs.)
Basic Education
1- Primary Teacher
(a) Regular Grade
(b) Selection Grade
(c) Promotional Grade
2-Headmaster Primary / Teacher Upper Primary
(a) Regular Grade
(b) Selection Grade
(c) Promotional Grade
3- Headmaster Upper Primary
(a) Regular Grade
(b) Selection Grade
(c) Promotional Grade
3600-85-4450-100-5350
4000-85-4680-100-5780
4250-100-5150-125-6400
4625-125-6750
4625-125-7000
4800-150-7650
4500-125-7000
5000-150-8000
5500-175-9000
5500-175-9000
6500-200-10500
7500-250-12000
8500-200-10500
7500-250-12000
8000-275-13500
R.S. Singh
Special Secretary, Finance."
(Translation by the Court)
8. From perusal of the Government Order dated 20.07.2001, it emerges that the said Government Order had been issued on the demand of the Teachers of Primary and Secondary Education Institutions regarding granting pay scales equal to that of equivalent level Teachers of the Central Government on the recommendation of the 5th Central Pay Commission. His Excellency the Governor had accorded approval for amending the pay scales of the Teachers mentioned in Column 1 of the annexed table from the pay scales applicable to them from 01.01.1996 mentioned in Column 2 w.e.f. 01.07.2001. However, Clause 3 of the Government Order dated 20.07.2001 provided that the necessary government orders would be issued separately for the concerned teachers regarding admissiblity of regular scale/selection grade and promotional grade. However, there cannot be any dispute that the said pay scales were to come into force w.e.f. 01.07.2001.
9. So far as the petitioners are concerned their pay scales as applicable w.e.f. 01.01.1996 was Rs.3600-5350 to be amended to Rs.4500-7000 but w.e.f. 01.07.2001.
10. Vide Government Order dated 08.08.2001 the earlier government order was reiterated i.e. the pay scales being brought at par with those of the Central Government Teachers w.e.f. 01.07.2001. Thus, even this Government Order dated 08.08.2001 indicates that the said amended pay scales were to come into force w.e.f. 01.07.2001.
11. The aforesaid two government orders were followed by the Government Order dated 03.09.2001 which specifically provided that the pay scales of Teachers of Primary Education mentioned in Column 1 of the Annexure to the Government Order dated 20.07.2001 would be given only to those Teachers who were in service on 01.07.2001. However, notional fixation shall be given w.e.f. 01.01.1996 to such Teachers who were in service as on 01.07.2001.
12. As already indicated above, all the petitioners had retired prior to 01.07.2001.
13. Thus, from a perusal of the aforesaid three government orders it is apparent that the revised pay scales at par with the Central Government Teachers was only to be given w.e.f. 01.07.2001. Notional fixation has been extended to only those Teachers who were in service as on 01.07.2001.
14. No challenge has been raised to the Government Order dated 20.07.2001 which provided for the revised pay scales at par with the Central Government Teachers w.e.f. 01.07.2001. The Government Order which has been challenged by the petitioners is of 03.09.2001 which only gives the benefit of the revised pay scales at par with the Central Government Teachers on notional basis w.e.f. 01.01.1996 to only those Teachers who were in service on 01.07.2001. No prayer has been made even for grant of revised pay scales w.e.f. 01.01.1996. Thus, once no challenge has been raised to the Government Order dated 20.07.2001 as modified on 08.08.2001 and the subsequent Government Order dated 03.09.2001 only being in consequence to the earlier government orders and providing certain benefits which have also not been claimed by the petitioners as such no benefit can be extended to the petitioners of the revised pay scales at par with the Central Government Teachers w.e.f. 01.01.1996 even on notional basis.
15. At this stage, learned counsel for the petitioners argues that the proforma fixation for the petitioners can be considered inasmuch as even by the subsequent government orders it is only the proforma fixation which has been extended to those Teachers who were in service on 01.07.2001 and thus, the said cut off date has been fixed arbitrarily by the respondents.
16. Responding to the said argument regarding fixing of the cut off date for grant of even proforma benefit Sri Vivek Shukla, learned Additional Chief Standing Counsel has referred to the averments made in paragraph 8 of the counter affidavit to contend that not only in the case of the petitioners but also in the cases of other departments many times decisions are taken as to from which date the benefit of any revised/upgraded pay structure should be given notionally and from which date actually and therefore if the petitioners are allowed the benefits as per their demand then it will have adverse effect on the exchequer and consequently the cut off date has correctly been fixed.
17. However, even though no case has been set forth in the entire writ petition pertaining to the said argument as raised by the learned counsel for the petitioners yet as to whether a particular cut off date can be fixed by the Government on the ground of financial constraints while extending financial benefits has been considered threadbare by this Court in the case of Om Prakash Saxena and another vs. State of U.P. and others in Writ Petition No.1743 (SB) of 2011 decided on 13.05.2019 wherein after considering various judgments of Hon'ble Supreme Court including the judgment of D.S. Nakara and others vs. Union of India - (1983) 1 SCC 305 it has been held as under:-
"35. The argument raised by learned State Counsel that financial constraints would be a valid ground for fixation of a cut off date for grant of benefits as has been done with the issue of the Government Order dated 28.02.2007 with prospective effect. Though this ground has not been specifically taken by the respondents in the counter affidavit, as correctly pointed out by the learned counsel for the petitioners, yet the said ground has been taken during the course of argument and consequently can very well be considered by a Court of law while deciding the case keeping in view the law laid down by Hon'ble Supreme Court in the case of N. Subbarayudu (supra) wherein Hon'ble Supreme Court has held as under:-
"5. In a catena of decisions of this Court it has been held that the cut off date is fixed by the executive authority keeping in view the economic conditions, financial constraints and many other administrative and other attending circumstances. This Court is also of the view that fixing cut off dates is within the domain of the executive authority and the Court should not normally interfere with the fixation of cut off date by the executive authority unless such order appears to be on the face of it blatantly discriminatory and arbitrary. (See State of Punjab v. Amar Nath Goyal)
6. No doubt in D.S. Nakara v. Union of India this Court had struck down the cut off date in connection with the demand of pension. However, in subsequent decisions this Court has considerably watered down the rigid view taken in Nakara's Case, as observed in para 29 of the decision of this Court in State of Punjab v. Amar Nath Goyal.
7. There may be various considerations in the mind of the executive authorities due to which a particular cut off date has been fixed. These considerations can be financial, administrative or other considerations. The Court must exercise judicial restraint and must ordinarily leave it to the executive authorities to fix the cut off date. The Government must be left with some leeway and free play at the joints in this connection.
8. In fact several decisions of this Court have gone to the extent of saying that the choice of a cut off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter affidavit filed by the Government, (unless it is shown to be totally capricious or whimsical) vide State of Bihar v. Ramjee Prasad , Union of Indian v. Sudhir Kumar Jaiswal (Vide SCC Para 5), Ramrao v. All India Backward Class Bank Employees Welfare Assn. (Vide SCC Para 31), University Grants Commission v. Sadhana Chaudhary etc. It follows, therefore, that even if no reason has been given in the counter affidavit of the Government or the executive authority as to why a particular cut off date has been chosen, the Court must still not declare that date to be arbitrary and violative of Article 14 unless the said cut off date leads to some blatantly capricious or outrageous result."
36. The ground raised on behalf of the respondents that extending of the benefit of the Government Order dated 28.02.2007 to the petitioners who received end of session benefit in terms of the earlier Government Order would put a large financial burden on the State inasmuch as all such teachers who were also given end of session benefit in terms of the earlier Government Orders would also stake their claim for extension of the benefit of the Government Order dated 28.02.2007 and thus consciously the Government Order dated 28.02.2007 has been given prospective effect is a valid ground. In this regard, the position of law is no longer res-integra keeping in view the various judgments of Hon'ble Supreme Court which are being discussed below which have clearly held that a cut off date can be introduced on the ground of financial implication.
37. Hon'ble the Supreme Court in the case of Amar Nath Goyal (supra) has upheld the cut off date which was introduced on the ground of financial implication. For the sake of convenience, relevant observations of Hon'ble Supreme Court are reproduced 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 1.4.1995, 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 center or at the State level.
27. Even by O.M. dated 19.10.1993, all that happened was that a portion of the dearness allowance linked to average Consumer Price Index of 729.91 obtaining as on 1.3.1988 (i.e. 20% of the basic pay) was treated as dearness pay. This would count only for reckoning the emoluments for the purpose of calculating retirement-cum-death gratuity under the applicable rules and for no other purpose. This change was brought into effect from 16.9.1993.
28. Even at that time, interestingly, the benefits were not made admissible from 1.3.1988, i.e. the date of the Average Consumer Price Index of 729.91, but from a much further date i.e. 16.9.1993. The Central Government adopted the same policy while issuing the O.M. dated 14.7.1995. Although, dearness allowance linked to the All India Average Consumer Price Index 1201.66 (as on 1.7.1993), was treated as reckonable part of dearness allowance for the purpose of calculating the death-cum-retirement gratuity, the benefit was actually made available to the employees who retired or died on or after 1.4.1995. Similarly, the increase in the ceiling of gratuity was a mere consequential step, which was also made applicable from 1.4.1995. As we have already noticed, 1.4.1995 was the date suggested by the Fifth Central Pay Commission ("Pay Commission") in its Interim Report. The Central Government took a conscious stand that the consequential financial burden would be unbearable. It therefore, chose to taper down the financial burden by making the benefits available only from 1.4.1995.
It is trite that, the final recommendations of the Pay Commission were not ipso facto binding on the Government as the Government had to accept and implement the recommendations of the Pay Commission consistent with its financial position. This is precisely what the Government did. Such an action on the part of the Government can neither be characterized as irrational, nor as arbitrary so as to infringe Article 14 of the Constitution.
29. D.S. Nakara (supra), which is the mainstay of the case of the employees, arose under special circumstances, quite different from the present case. It was a case of revision of pensionary benefits and classifications of pensioners into two groups by drawing a cut-off line and granting the revised pensionary benefits to employees retiring on or after the cut-off date. The criterion made applicable was "being in service and retiring subsequent to the specified date". This Court held that for being eligible for liberalised pension scheme, application of such a criterion is violative of Article 14 of the Constitution, as it was both arbitrary and discriminatory in nature. The reason given by the Court was that the employees who retired prior to a specified date, and those who retired thereafter formed one class of pensioners. The attempt to classify them into separate classes/ groups for the purpose of pensionary benefits was not founded on any intelligible differentia, which had a rational nexus with the object sought to be achieved. However, it must be noted that even in cases of pension, subsequent judgments of this Court have considerably watered down the rigid view taken in D.S. Nakara as we shall see later in T.N. Electricity Board v. R. Veerasamy ("Veerasamy"). In any event this is not a case of a continuing benefit like pension; it is a one-time benefit like gratuity.
30. In Union of India v. P.N. Menon, while implementing the recommendations of the Third Pay Commission with regard to dearness pay linked to average index level 272, which was to be counted as emoluments for pension and gratuity under Central Civil Services (Pension) Rules, 1972, the Central Government had fixed a certain cut-off date and directed that only officers retiring on or after the specified date were entitled to the benefits of the dearness pay being counted for the purpose of retirement benefits. This was challenged as arbitrary and violative of Article 14 of the Constitution. This Court turned down the challenge and observed:
"Not only in matters of revising the pensionary benefits, but even in respect of revision of scales of pay, a cut-off date on some rational or reasonable basis, has to be fixed for extending the benefits. This can be illustrated. The Government decides to revise the pay scale of its employees and fixes the 1st day of January of the next year for implementing the same or the 1st day of January of the last year. In either case, a big section of its employees are bound to miss the said revision of the scale of pay, having superannuated before that date. An employee, who has retired on 31st December of the year in question, will miss that pay scale only by a day, which may affect his pensionary benefits throughout his life. No scheme can be held to be foolproof, so as to cover and keep in view all persons who were at one time in active service. As such the concern of the court should only be, while examining any such grievance, to see, as to whether a particular date for extending a particular benefit or scheme, has been fixed, on objective and rational considerations."
31. In Action Committee South Eastern Railway Pensioners v. Union of India, it was held that, on merger of a part of dearness allowance as dearness pay on average price index level at 272 with reference to different pay ranges, fixing a cut-off date in such a manner was not arbitrary and the principle enunciated in D.S. Nakara was not applicable. In this connection, the ratios in Krishena Kumar v. Union of India, Indian Ex-Services League v. Union of India, State Government Pensioners' Assn. v. State of A.P., and All India Reserve Bank Retired Officers' Assn. v. Union of India, are apt. In all these cases, the prescription of a cut-off date for implementation of such benefits was held not to be arbitrary, irrational or violative of Article 14 of the Constitution.
32. The importance of considering financial implications, while providing benefits for employees, has been noted by this Court in numerous judgments including in the following two cases. In State of Rajasthan v. Amritlal Gandhi, this Court went so as far as to note that:
"...Financial impact of making the Regulations retrospective can be the sole consideration while fixing a cut-off date. In our opinion, it cannot be said that this cut-off 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 1.1.1986 for 1.1.1990.
33. More recently, in Veerasamy, this Court observed that financial constraints could be a valid ground for introducing a cut-off date while implementing a pension scheme on a revised basis. In that case, the pension scheme applied differently to persons who had retired from service before 1.7.1986, 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.
34. In State of Punjab v. Boota Singh ("Boota Singh") after considering several judgments of this Court in D.S. Nakara to K.L. Rathee v. Union of India, it was held that D.S. Nakara should not be interpreted to mean that the emoluments of persons who retired after a notified date holding the same status, must be treated to be the same.
35. In State of Punjab v. J.L. Gupta where one of us was on the Bench (Sabharwal, J.), the views expressed in Boota Singh were reiterated, and it was 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.
36. In Ramrao v. All India Backward Class Bank Employees Welfare Assn., a Division Bench of this Court said, even for the purpose of effecting promotion, the fixing of a cut-off date was neither arbitrary, unreasonable nor did it offend Article 14 of the Constitution. Moreover, the Court held that possible hardship to be endured by a person as a result did not make cut-off dates violative of Article 14.
37. In the instant case before us, the cut-off date has been fixed as 1.4.1995 on a very valid ground, namely, that of financial constraints. Consequently, we reject the contention that the fixing of the cut-off date was arbitrary, irrational or had no rational basis or that it offends Article 14."
38. Hon'ble Supreme Court in the case of Rajesh Chander Sood (supra) has held as under:-
"75. Having given our thoughtful consideration to the issue canvassed, and having gone through the judgments cited, we are of the considered view, that this Court has repeatedly upheld a cut-off date, for extending better and higher pensionary benefits, based on the financial health of the employer. A cut-off date can therefore legitimately be prescribed for extending pensionary benefits, if the funds available cannot assuage the liability, to all the existing pensioners. We are therefore satisfied to conclude, that it is well within the authority of the State Government, in exercise of its administrative powers (which it exercised, by issuing the impugned repeal notification dated 2.12.2004) to fix a cut-off date, for continuing the right to receive pension in some, and depriving some others of the same. This right was unquestionably exercised by the State Government, as determined by this Court, in the R.R. Verma case, wherein this Court held, that the Government was vested with the inherent power to review. And that the Government was free to alter its earlier administrative decisions and policy. Surely, this is what the State Government has done in the present controversy. But this Court in the above mentioned judgment, placed a rider on the exercise of such power by the Government. In that, the exercise of such power, should be in consonance with all legal and statutory obligations.
76. It is equally true, that the power of administrative review can only be exercised, for a good and valid justification. Such justification besides being founded on reasonable consideration, should also not be violative of any legal right - statutory or constitutional, vested in the affected employees. Insofar as the permissibility of the administrative action taken, in issuing the impugned repeal notification dated 2.12.2004 is concerned, whether the said power was exercised by the State Government for good and valid reasons, and/or whether the same violated any statutory or constitutional right vested in the respondent-employees, shall be examined by us in the succeeding paragraphs."
39. Hon'ble Supreme Court in the case of T.M. Sampath (supra) has held as under:-
"40. We have carefully perused the judgment of the High Court of Jharkhand in P.N. Mishra v. Union of India against which SLP(C) No.19102 of 2012 has been filed and we concur with the view of the High Court. The cut-off date is a domain of the employer and so the introduction of new scheme of pension will be done considering all the relevant factors including financial viability of the same. No interference is warranted unless there is gross injustice is perpetrated. The Appellants have failed to prove any arbitrariness and discrimination with respect to the New Pension Scheme.
41. In the light of the discussion in the foregoing paragraphs, the writ petitions and the appeal are also dismissed. However, there shall be no order as to costs."
40. Likewise, Hon'ble Supreme Court in the case of Ratan Behari Dey (supra) has held as under:-
"7. In our opinion, the principle of Nakara has no application to the facts of this case. The precise principle enunciate in Nakara has been duly explained in Krishena Kumar by a coordinate Bench. For reasons to be assigned hereinafter, it cannot be said that prescribing April 1, 1977 as the date from which the new Regulations were to come into force is either arbitrary or discriminatory. Now, it is open to the State or to the Corporation, as the case may be, to change the conditions of service unilaterally. Terminal benefits as well as pensionary benefits constitute conditions of service. The employer has the undoubted power to revise the salaries and/or the pay-scales as also terminal benefits/pensioners benefits. The power to specify a date from which the revision of pay scales or terminal benefits/pensionary benefits, as the case may be, shall take effect is a concomitant of the said power. So long as such date is specified in a reasonable manner, i.e. without bringing about a discrimination between similarly situated persons, no interference is called for by the Court in that behalf. It appears that in the Calcutta Corporation, a pension scheme was in force prior to 1914. Later, that scheme appears to have been given up and the Provident Fund Scheme introduced Under the Provident Fund Scheme, a certain amount was deducted from the salary of the employees every month and credited to the Fund. An equal amount was contributed by the employer which too was credited to the Fund. The total amount to the credit of the employee in the Fund was paid to him on the date of his retirement. The employees, however, were demanding the introduction of a pension scheme. The demand fell on receptive years in the year 1977 may be because in that-year the Left Front Government came to power in that State, as suggested by the writ petitioners. The State government appointed a Commission to examine the said demand and to recommend the necessary measures in that behalf. The three members constituting the Commission differed with each other in certain particulars. The Government examined their recommendations and accepted them with certain modifications in the year 1981. After processing the matter through relevant departments, the Regulations were issued and published in the year 1982. In the above circumstances, the State Government thought that it would be appropriate to give effect to the said Regulations on and from April 1, 1977 i.e., the first day of the financial year in which the Pay Commission was appointed by the Government - a fact which could not have been unknown to the Corporation employees. We cannot say that the Government acted unreasonably in specifying the said date. It may also be said that, that was the year in which the Left Front came into power in that State, but that does not detract from the validity of the aforesaid reasons assigned by the State in its counter-affidavit filed before the Division Bench of the High Court. We are not in agreement with the opinion expressed by the High Court that the reasons assigned by the State Government are neither relevant not acceptable.
8. In this context, it may be remembered that the power of the State to specify a date with effect from which, the Regulations framed, or amended, as the case may be, shall come into force is unquestioned. A date can be specified both prospectively as well as retrospectively. The only question is whether the prescription of the date in this case is neither arbitrary now unreasonable, the complaint of discrimination must fail.
9. Now coming to the argument of Sri P.P. Rao that the Regulations bring about an unreasonable classification between similarly placed employees in concerned, we must say that we are not impressed by it. It is not submitted that the Corporation had no power to give retrospective effect to the Regulations. It was within the power of the Corporation to enforce the Regulations either prospectively or with retrospective effect from such date as they might specify. Of course, as repeatedly held by this Court, in such cases the State cannot, as the expression goes, pick a date out of its hat. It has to prescribe the date in a reasonable manner, having regard to all the relevant facts and circumstances. Once this is done, question of discrimination does not arise. Reference in this behalf may also be had to the decision of this Court in Sushma Sharma v. State of Rajasthan , a decision of the Division Bench comprising E.S. Venkataramiah and Sabyasachi Mukherji, JJ. "
18. Thus, considering the law laid down by this Court in the case of Om Prakash Saxena (supra) the said argument of learned counsel for the petitioners is also rejected.
19. Keeping in view the aforesaid discussion, no case for interference is made out. The writ petition is accordingly dismissed.
Order Date :- 7.8.2025
A. Katiyar (Abdul Moin, J.)
