Central Bank Retirees??? ... vs Union Of India & Ors.
2008 Latest Caselaw 875 Del

             IN THE HIGH COURT OF DELHI AT NEW DELHI

                         W.P.(C) No. 17825-28/2005



                 Judgment delivered on June 6th , 2008


#     Central Bank Retirees‟ Association & Ors.        .... Petitioners


                        Through    :     Mr. Jitendra Sharma, Senior

                                         Advocate with Mr. P.N.

                                         Sharma, Advocate


                                   Versus


$     Union of India & Ors.                              .... Respondents


^                        Through       : Mr. V.R. Reddy, Senior

                                         Advocate with Ms. Meera

                                         Mathur, Advocate for

                                         Respondents No. 3 to 5


                                         Mr. J.L. Gupta, Senior

                                         Advocate with Mr. Sanjay

                                         Bhatt, Advocate for

                                         Respondents No. 6 & 7

W.P. (C) No. 17825-28/2005                                          Page 1 of 43
 CORAM:

HON'BLE MR. JUSTICE G.S.SISTANI



      1.     Whether reporters of local papers may be allowed

             to see the Judgment?        Yes



      2.     To be referred to the Reporter or not? Yes


      3.     Whether the judgment should be reported in the

             Digest?               yes



G.S. SISTANI, J.

1. The present petition, under Article 226 of the Constitution of India,

seeks, inter alia, directions to the respondents to treat the petitioners

at par with the employees of Nationalised Banks and Financial

Institutions who have retired on or after 1.1.1986 for the purpose of

grant of pension.

2. The undisputed facts, leading to the present petition, may first be

noticed:

In exercise of the powers conferred by Clause (f) of sub-section (2) of section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the Board of Directors of the Central Bank of

India, after consultation with the Reserve Bank of India and with the previous sanction of the Central Government, framed Regulations known as the Central Bank (Employees‟) Pension Regulations, 1995 (hereinafter, "the Regulations"). Analogous Regulations to the same effect were also introduced mutatis mutandis by the Bank of India, the Industrial Development Bank of India and the Industrial Finance Corporation of India. In pursuance of these Regulations, a Pension Scheme was introduced in substitution of the existing Contributory Fund Scheme (hereinafter, "the CPF Scheme"). Whereas the Pension Scheme was made applicable to all employees entering service on or after 1.11.1993, the employees who had retired from service of their respective banks between 1.1.1986 and the date of the Regulations coming into force could either continue to be governed by the erstwhile CPF Scheme or they could opt for the benefit of the Pension Scheme. The employees who had retired before 1.1.1986, however, were not eligible for the Pension Scheme. Hence, the petitioners, retired from the service of different banks on or before 1.12.1985 and thus ineligible for being entitled to the new Pension Scheme, have filed the present writ petition challenging the constitutionality of these Regulations to the extent they disqualify a retiree who had retired prior to 1.1.1986 for grant of pension.

3. It is relevant to note that the petitioners, before approaching this

Court, had filed the present petition as W.P. (C) No. 471 of 2003

before the Supreme Court of India. The petitioners, whilst

challenging the vires of the 1.1.1986 cut-off date before the Apex

Court, complained that the action in denying pension to persons who

had retired before 31.12.1985 was violative of Article 14 of the

Constitution of India. The claim made by the petitioners was

contested by the respondents. It was, inter alia, pleaded that the

constitutionality of the 1.1.1986 cut-off date had already been upheld

by a Bench of three Judges in the All India Reserve Bank Retired

Officers Association and others v. Union of India and others1 (hereinafter,

"the RBI Case"), and subsequently affirmed by a Bench of equal strength vide its

order dated 17.11.1998 in All India PNB Retired Officers Association v. Union

of India & Ors. (hereinafter, "the PNB Case"). The petitioners, whilst

countervailing the defence of the respondents, claimed that the very basis

for the fixation of the cut-off date had been obliterated by the

recommendations of the Fifth Pay Commission Report, in pursuance

whereof, both pre- and post- 1.1.1986 retirees have been brought at

parity with each other. Upon considering the rival contentions of both

parties, the Apex Court, in its wisdom, did not consider it a fit case to

entertain the petition under Article 32 of the Constitution of India,

and accordingly, dismissed the petition with the suggestion to the

petitioners to register the same under Article 226 of the Constitution

of India. The Apex Court‟s order dated 1.9.2005, directing this Court

to dispose of the matter, is reproduced as under:

"Heard learned counsel for the parties.

We are of the considered view that this is not a fit case to entertain the petition under Article 32 of the Constitution of India. The proper course for the petitioners would be to move the High Court. To avoid unnecessary delay, we send the writ petition filed in this Court to the Delhi

1994 Supp (1) SCC 664

W.P. (C) No. 467 of 1997

High Court to be registered as petition under Article 226 of the Constitution of India. Since the dispute relates to claim of pension, if the matter is taken up for early disposal. We request the High Court to dispose of the matter as early as possible, preferably within twelve months from today.

The Writ petition is dismissed with the aforesaid observation."

4. It is trite that the question of the applicability of the Pension Scheme

introduced by the Regulations herein, including the constitutionality

of the 1.1.1986 cut-off date, is no longer res integra in light of the

decisions of the Apex Court in the RBI as well as the PNB Cases3. It

is also trite that any finding qua constitutionality of a cut-off date is

essentially a finding of fact, and once there is a finding of fact arrived

at by the highest Court of the land, all other Courts are estopped

from revisiting that conclusion. Inasmuch as the constitutionality of

the cut-off date of 1.1.1986 as well as the reasonableness of the

classification into pre- and post-1.1.1986 resulting therefrom has

already attained finality already by the Apex Court, it is trite that any

decision that this Court takes in the present petition appertaining to

an identical challenge cannot be de hors the ratio in the RBI Case4,

or to put it differently, without having in perspective the judicial dicta

in the said case.

supra at n. 1 and 2 respectively

supra at n. 1

5. In the RBI case5, the RBI had introduced Pension Regulations in

1990 with effect from 1.1.1990 in lieu of the CPF Scheme. The said

Regulations became applicable to all employees on roll from

1.11.1990. However, those employees who retired between

1.1.1986 and 1.1.1990 were given an option to opt for the Pension

Scheme on certain conditions. The bank employees who retired

from service prior to 1.1.1986 were not eligible to opt for Pension

Scheme. Aggrieved, the All India Reserve Bank Retired Officer

Association challenged this action of the RBI by way of a writ petition

before the Apex Court.

6. While deciding upon the vires of the Pension Regulations under

challenge , the Apex Court in the RBI Case6 observed as under:

"[W]henever any rule or regulation having statutory flavour is made by an authority which is a State within the meaning of Article12 of the Constitution, the choice of the cut-off date which has necessarily to be introduced to effectuate such benefits is open to scrutiny by the court and must be supported tin the touch-

stone of Article 14. If the choice of the date results in classification or division of members of a homogeneous group it would be open to the Court to insist that it be shown that the classification is based on an intelligible differentia and on rational consideration which bears a nexus to the purpose and object thereof. The differential treatment accorded to those who retired prior to the specified date and those who retired subsequent thereto must be justified on the touchstone of Article 14, for otherwise it would be

ibid

supra at n. 1

offensive to the philosophy of equality enshrined in the Constitution."7

(emphasis supplied)

7. Explaining as to how the reasonableness of the classification

resulting from the fixation of the cut-off date of 1.11.1986 is to be

tested on the touchstone of Article 14 of the Constitution of India, the

Apex Court succinctly observed as under:

"[A] distinction (has to be drawn) between the continuance of an existing scheme in its liberalized form and the introduction of a wholly new scheme; in the case of the former all the pensioners had a right to pension on a uniform basis and any division which classified them into two groups by introducing a cutoff date would ordinarily violate the principle of equality in treatment unless there is strong rationale discernible for so doing and the same can be supported on the ground that it will subserve the object sought to be achieved. But in the case of a new scheme, in respect whereof the retired employees have no vested right, the employer can restrict the same to certain class of retirees, having regard to the fact-situation in which it came to be introduced, the extent of additional financial burden that it will throw, the capacity of the employer to bear the same, the feasibility of extending the scheme to all retirees regardless of the dates of their retirement, the availability of records of every retiree, etc.."8

8. In order to further vindicate the fixation of the cut-off date in pension

matters, the Apex Court rationalised the prerogative of the State to

id at para 8

id at para 10

limit the applicability of a new scheme to a certain class of retirees

by observing as under:

"The underlying principle is that when the State decides to revise and liberalise an existing pension scheme with a view to augmenting the social security cover granted to pensioners, it cannot ordinarily grant the benefit to a section of the pensioners and deny the same to others by drawing an artificial cut-off line which cannot be justified on rational grounds and is wholly unconnected with the object intended to be achieved. But when an employer introduces an entirely new scheme which has no connection with the existing scheme, different considerations enter the decision making process. One such consideration may be the financial implications of the scheme and the extent of capacity of the employer to bear the burden. Keeping in view its capacity to absorb the financial burden that the scheme would throw, the employer would have to decide upon the extent of applicability of the scheme."9

(emphasis supplied)

9. The trite propositions culled out in the foregoing paragraphs, in my

view, constitute the ratio in the RBI Case10. Applying this ratio to the

Pension Regulations under challenge, the Apex Court upheld the

constitutionality of the 1.1.1986 cut-off date. The various

considerations, on the basis whereof the Apex Court in the RBI

Case11 vindicated the reasonableness of the classification resulting

ibid

supra at n. 1

ibid

from the 1.1.1986 cut-off date, would be worthwhile to take note of,

and accordingly, are consolidated as under:

i. There is a distinction between the liberalization of an existing scheme and the introduction of a new scheme.

ii. The introduction of the Pension Regulations for the first time in an organization in lieu of the CPF is a "new scheme".

iii. The Provident Fund retirees who have retired and have already received their retrial benefits from the employer cannot claim a vested right to coverage under the Pension Regulations.

iv. The relation of the Provident Fund retiree with the employer snaps upon the retirement and receipt of retrial benefits and there is no continuing relationship between the two.

v. On the other hand, in the case of a pension retiree, his relation with the employer merely undergo a change upon retirement but do not snap altogether.

vi. The CPF Scheme and the Pension Scheme and the rights of the members thereunder are structurally different.

vii. The Provident Fund retirees and the Pension retirees do not form a homogeneous class.

viii. The employer has the right to fix a cut off date and restrict the application whilst introducing the Pension Regulations in lieu of CPF for the first time.

ix. The cut-off date of 1.1.1986 was otherwise valid because the demand for pension as a second retrial benefit broadly on the lines of Central Government pattern was mooted sometime in the year 1986 and the date was so adopted at that time since Central Government also adopted the same based on the Fourth Pay Commission Recommendations.

10. With the aforesaid facts, ratio and the decision in the RBI Case12 in

perspective, I shall now advert to the rival contentions of both parties

herein in the paragraphs infra.

11. Mr. Jitendra Sharma, learned senior counsel for the petitioners, has

vehemently submitted that the Pension Scheme introduced by the

Regulations is not a new scheme but only a liberalised form of the

already existing CPF Scheme, and that as a result of such

liberalization, a homogeneous set of employees have been

classified into pre- and post- 1.1.1986 retirees. It is contended that

the prescription of 1.1.1986 as a cut-off date is totally unsustainable

in law and is irrational in nature inasmuch as the Regulations have

en bloc made the pre-1986 retirees ineligible from the grant of

pension.

12. It is further argued that the classification resulting from the

liberalisation of the existing CPF Scheme lies in the teeth of the ratio

ibid

in D.S. Nakara & Ors. v. Union of India13, wherein the Apex Court

has unequivocally opined that classification of pensioners has to be

based on some rational principle and the rational principle must

have nexus to the objects sought to be achieved. The Apex Court

therein has further opined that if any cut-off date classifying

pensioners into two classes is not based on any rational principle

and if the rational principle is the one of dividing pensioners with a

view to giving something more to persons otherwise equally placed,

it would be discriminatory and affront to the test of reasonableness

under Article 14 of the Constitution of India

13. Learned senior counsel has strenuously argued that both the pre-

1986 and post-1986 employees are at par when compared to their

respective portfolios as well as the terms and conditions governing

their respective appointment, and thus, the benefits of the new

Pension Scheme have been arbitrarily denied to the petitioners by

treating them as a separate class.

14. It is further contended by learned senior counsel for the petitioners

that the petitioners are all octogenarians who are unable to take any

alternative employment and are fully dependant upon the retrial

benefits which they can derive on the basis of their past service. It is

contended that the petitioners in their own right constitute a class of

1983 (1) SCC 305

persons who are in dire need of the Pension Scheme for their

subsistence and to lead an independent, distinguished and decent

lifestyle.

15. Learned senior counsel for the petitioners has relied upon Bharat

Petroleum Management Staff Pensioners v. Bharat Petroleum

Corporation Limited & Ors.14, to contend that pension is no longer

considered a bounty and it has been held to be a property and it is

thus onerous upon the State to take account of the rise in the pension

of the retired personnel who are otherwise entitled to it.

16. In the same vein, the following observations in State of Punjab v. K.R. Erry &

Sobhag Rai Mehta15, have relied upon:

"In short it must be conceded that though the State Government may have had some material before it for imposing a penalty by way of a cut in the pension it had failed to give a reasonable opportunity to the officers to put forward their defence or facts in extenuation before the cut was imposed. The case of Ridge v. Baldwin [1964] A.C. 40 comes to mind in this connection. Baldwin who was the Chief Constable of the borough police force was prosecuted on grave charges. Donovan J, the trial Judge made, while acquitting him, some observations about his moral incompetence to afford leadership to the police force. Acting on this severe criticism by a Judge of the High Court the Watch Committee, entitled Under Section 191 of the

(1988) 3 SCC 32

(1973) 1 SCC 120

Municipal Corporations Act, 1882 to dismiss him on a charge of unfitness, dismissed him from service. This dismissal practically at the end of his official career had the consequence of depriving him of his pension. The House of Lords held that the order had to be set aside because Baldwin was not afforded an opportunity to defend himself, though the statute itself did not require any such opportunity being given."16

17. Relying upon Deokinandan Prasad v. State of Bihar and others17,

learned senior counsel for the petitioners has contended that denial

of pension was infringement of the fundamental rights guaranteed

under Articles 19(1)(f) and 31(1) of the Constitution of India. The

Apex Court in the said case observed as under:

"[T]he right of the petitioner to receive pension is property under Article 31(1) and by a mere executive order the State had no power to withhold the same. Similarly, the said claim is also property under Article 19(1) (f) and it is not saved by Sub-article (5) of Article 19. Therefore, it follows that the order dated June 12, 1968 denying the petitioner right to receive pension affects the fundamental right of the petitioner under Articles 19(1)(f) and 31(1) of the Constitution, and as such the writ petition under Article 32 is maintainable."

18. Learned senior counsel for the petitioners has further contended

that even otherwise the prescribed cut-off date of 1.11.1986 holds

no water inasmuch as on the recommendations of the Fifth Pay

id at para 18

1971 (2) SCC 330

Commission, Government of India has done away with the aforesaid

cut-off date applicable to retired employees in their own departments

and allied offices. Pursuant thereto, all employees have been

brought at par irrespective of their date of retirement. It is contended

that the Fifth Pay Commission has taken a practical view of the

entire situation and has come to the conclusion that all retirees are

to be treated alike and no discrimination can be practiced with any

one them. To make good his point, learned senior counsel for the

petitioners has placed on record a copy of the Office Memorandum

No. F.45/86/97-P & PW(A)/Part - III, dated 10.2.1998 appertaining

the revision of pension of pre-1.1.1986 pensioners. Relevant

portions of the said Office Memorandum, filed as Annexure P-3

(Colly), are reproduced thus:

"REVISION OF PENSION OF PRE-1.1.1986

PENSIONERS

In accordance with the provisions contained in CCs (Pension) Rules, 1972 and the Government‟s orders issued thereunder, at present pension of all pre-1986 pensioners is based on the average emoluments drawn by them during last completed 10 months immediately preceding the date of retirement and similarly family pension is based on the last pay drawn by the deceased Government servant/pensioner. Government has, inter alia accepted the recommendation of Fifth Central Pay Commission to the effect that the pension of all the pre-1986 retirees may be updated by notional fixation of their pay as on 1.1.1986 by

adopting the same formula as for the serving employees and thereafter for the purpose of consolidation of their pension/family pension as on 1.1.1986, they may be treated alike those who have retired on or after 1.1.1986. Accordingly, pay of all those Government servants who retired prior to 1.1.1986 and also in cases of those Central Government employees who died prior to 1.1.1986, in respect of whom family pension was being paid on 1.1.1986, will be fixed on notional basis in the revised scale of pay for the post held by the pensioner, at the time of retirement or on the date of death of Government employee, introduced subsequent to retirement/death of Government employee consequent upon promulgation of Revised Pay Rules on implementation of recommendations of successive Pay Commissions or of award of Board of Arbitration or judgment of Court or due to general revision of the scale of pay for the post, etc. The number of occasions on which pay shall be required to be fixed on notional basis in each individual case would vary and may be required to be revised on several occasions in respect of those employees who retired in the „fifties and sixties‟. In all such cases, pay fixed on notional basis on the first occasion shall be treated as „pay‟ for the purpose of emoluments for re-fixation of pay in the revised scale of pay on the second occasion and other emoluments for re-fixation of pay in the revised scale of pay on the second occasion and other elements like DA/Ad hoc DA/Additional DA, IR, etc., based on this notional pay shall be taken into account. In the same manner, pay on notional basis shall be fixed on subsequent occasions. The last occasion shall be fixation of pay in the scale introduced on the basis of Fourth Central Pay Commission and made effective from 1.1.1986. While fixation of pay on notional basis on each occasion, the pay fixation formulae approved by the Government and be strictly followed. However, the benefit of any notional increments admissible in terms of the rules and instructions applicable at the relevant time shall not be extended in any case of re-fixation of pay on notional

basis. The notional pay so arrived as on 1.1.1986 shall be treated as average emoluments for the purpose of calculation of pension and accordingly, the pension prescribed. [The pension so calculated shall be consolidated as on 1st January, 1996 in accordance with the provisions contained in Paragraph 4.1 of this Department‟s O.M. NO. 45/86/97-P & PW (A)-Pt. II, dated the 27th October, 1997. Such consolidated full pension shall not, however, be less effect from 1st January, 1996 for the post last held by the concerned pensioner. However, such pension will be suitably reduced pro rata, where the pensioner has less than the maximum required service for full pension as per the rule [ Rule 49 of CCS(pension) Rules 1972] applicable to the pensioner as on the date of his/her superannuation/retirement and in no case it will be less than Rs. 1, 275 p.m."

(emphasis supplied)

19. The sum and substance of the contentions put forth on behalf of the

petitioners are outlined as under:

i. Firstly, that as a result of 1995 Pension Regulations, when a liberalized pension formula was introduced, and no new scheme was involved, prescription of cut-off date of 1986 resulted in fragmentation of a homogenous class of employees into two groups, inasmuch as those who retired on or after 1.1.1986 were given the option to migrate from the CPF to the pension Scheme and those who retired prior to 1986 were denied this option. The classification resulting in pursuance thereunto has no nexus with the object sought to be achieved.

ii. Secondly, that the cut-off date of 1.1.1986 became totally obscure under the Central Bank Employees Pension Regulation of 1995,

inasmuch as the said cut-off date has been obliterated retrospectively from the parent government scheme from the year 1998.

iii. Thirdly, that banks and financial institution have incorporated the obscure 1986 cut-off date in their new Pension Scheme de hors the decision taken by the government in 1998 pursuant to the 5th Pay Commission recommendations.

iv. Fourthly, that the classification ensuing discriminates against the interest of old elderly and needy citizen and is thus violative of doctrine of classification.

20. Per contra, Dr. V.R. Reddy, learned senior counsel for the

respondents no. 3 to 5 and Mr. J.L. Gupta, learned senior counsel

for respondents no. 6 and 7, have vehemently resisted the aforesaid

contentions of the petitioners on the ground that petitioners are

trying to raise the same issue which have attained finality in law in

light of the decisions in the RBI and PNB Cases18 and ought not to

be re-considered in the interest of justice and principle of adherence

to precedent.

21. Refuting the petitioners‟ principle contention that the Pension

Scheme is nothing but a liberalised form of the already existing

C.P.F. Scheme, it is stoutly argued by learned senior counsel for the

respondents that the Pension Scheme introduced by the

supra at n. 3

Regulations is a totally new one and was not into existence prior to

1.11.1990. It is the case of the respondents that the pre-1.1.1986

retirees, having already collected the retrial benefits entitled to them

under the erstwhile CPF Scheme, cannot now claim coverage under

the new Pension Scheme. To make good their point, learned senior

counsel for the respondents have drawn support from the decisions

of the Apex Court in Sita Ram Bansal and Ors. v. State Bank of

Punjab and Ors.19, ITC Ltd. Workers Welfare Association and

Another v. Management of ITC Ltd. & Another20, T.N. Electricity

Board v. R. Veeraswamy & Ors.21 and Transport Corpn., A.P. Ltd

& Ors. v. P. Ramachandra Rao & Anr.22

22. It is further contended by learned senior counsel for the respondents

that the impugned Pension Regulations were introduced in the year

1993-95 and the challenge to the same after 8 to 10 years of their

being in operation is uncalled for and bad on account of delay and

laches. It is further contended that the petitioners herein had retired

prior to 31.12.1985 and have approached this Court after 18 years of

their retirement. It is contended that the claim of the petitioners,

AIR 1997 SC 2341

(2002) 3 SCC 411

(1999) 3 SCC 414

(2006) 9 SCC 623

being totally barred by limitation, is not maintainable and liable to be

dismissed. Learned senior counsel for the petitioners has placed

reliance on the decisions in State of MP & Anr. v. Bhai Lal Bhai23,

Sarat Chandra Misra v. State of Orissa24, Tilokchand Motichand

& Ors. v. H.B. Munshi & Anr.25, Amrit Lal Berry v. Collector of

Central Excise, New Delhi & Ors.26, A.P. Steel Re-Rolling Mills

Ltd. v. State of Kerala & Ors. 27 to underpin the view that an

aggrieved party ought to move to the Court at the earliest possible

time and any inordinate delay may disentitle him to obtain a

discretionary relief under Article 226 of the Constitution of India.

23. Apropos of the claim of the petitioners that the recommendations of

the Fifth Pay Commission Report have obliterated the 1.1.1986 cut-

off date, it is contended by learned senior counsel for the

respondents that the said cut-off date continues to be relevant in so

far as the recommendations of the Fourth Pay Commission Report is

concerned. It is adduced that the scheme of Pension for the Reserve

Bank employees was patterned on the Pension Scheme applicable

to the Central Government employees as revised by the Fourth

AIR 1964 SC 1006

(2006) 1 SCC 638

1960 (1) SCC 110

(1975) 4 SCC 714

(2007) 2 SCC 725

Central Pay Commission with effect from 1.1.1986, and even

otherwise, the legality of the said cut-off date has already been

upheld by the Apex Court in the RBI and PNB Cases28. It is further

contended that the recommendations of the Fifth Pay Commission

are only recommendations to the Central Government and are

neither binding in nature nor are applicable to the employees of the

banking sector.

24. On the same aforesaid issue, attention of this Court has been drawn

to certain extracts from the Fifth Pay Commission Report, which, as

per learned senior counsel for the respondents, show that that the

cut-off date viz. 1.1.1986 has not been obliterated. The said extracts,

filed as Annexure P-7, are reproduced thus:

"FIFTH PAY COMMISSION RECOMMENDATIONS

Compilation of Fifth Pay Commission Recommendations on Pension and Retirement Benefits

PARITY BETWEEN PAST AND PRESENT PENSIONERS

The One Time Increase

127.16 The most controversial subject in the field of pensions has been the glaring disparity between persons of equivalent rank and status drawing vastly unequal pensions if they retired at different points of time. Government had

supra at n. 3

tried to solve the problem partially for the armed forces by adopting the One Time Increase formula, but this had not met their demand for One Bank One Pension. The inequity among the Civilian pensioners has continued over the decades with scant relief to the older of the senior citizens.

Modified Parity Formula

127.17 We have attempted a major policy thrust, by suggesting a complete parity between past and present pensioners at the time of the Fourth CPC, while recommending a modified parity between pre-1986 and post-1986 pensioners. The formula will ensure total equity as between persons who retired between 1986 and those who retired later. It also gives all pensioners atleast the minimum pension appurtenant to the post-1986 revised scale of pay of the post they held at retirement.

PRESENT POSITION

Extent of Disparity

137.10 Mainly because of the reasons mentioned in the preceding paragraph, past pensioners are in receipt of varying amounts of pension though they had retired from broadly comparable posts with the same length of qualifying service. The difference in the amount of basic pension alone between pre-1986 and post-1986 retirees upto the level of Director works out to Rs. 500 and more, whereas in respect of officers of the rank of Joint Secretary and above, the difference ranges between Rs. 850 and Rs. 1240. If the dearness relief and interim reliefs are added to the basic pension, the difference would range between more than two-

and-half times more than two times of the above amounts respectively, because of varying percentages of neutralization.

Our View

137.13 While it is desirable to grant complete parity in pension to all past pensioners irrespective of the date of their retirement, this may not be feasible straightaway as the financial implications would be considerable. The process of bridging the gap in pension of past pensioners has already been set in motion by the Fourth CPC when past pensioners were granted additional relief in addition to the consolidation of their pension. This process of attainment of reasonable parity needs to be continued so as to achieve complete parity over a period of time.

Our Recommendations

137.14 As a follow up of our basic objective of parity, we would recommend that the pension of all pre-1986 retirees may be updated by notional fixation of their pay as on 1.1.1986 by adopting the same formulas for the serving employees. This step would bring all the past pensioners to a common platform or on the Fourth CPC pay scales as on 1.1.1986. Thereafter, all the pensioners who have been brought on to the Fourth CPC by notional fixation of their pay and those who have retired on or after 1.1.1986 can be treated alike in regard to consolidation of their pension as on 1.1.1996 by allowing them the same fitment weightage as may be allowed to the serving employees. However, the consolidated pension shall be not less than 50% of the

minimum pay of the post, as revised by the Fifth CPC, held by the pensioner at the time of retirement. This consolidated amount of pension should be the cases for grant of dearness relief in future. The additions to pension as a result of our recommendations in this chapter shall not, however, qualify for any additional commutation for existing pensioners.

Procedure For Very Old Cases

137.16 There may be cases where it may not be possible for the pension sanctioning authorities to fix the pay of the very old retirees notionally because of non-availability of records due to such records having been weeded out or other administrative problems. In such cases, the pension may be revised with reference to the minimum pay of the post held by the pensioner, as revised by the Government of our recommendations.

UPDATING OF PRE-1986 PENSIONS

2. In accordance with the provisions contained in CCS (Pension) Rules, 1972 and the Government‟s orders issued there under, at present pension of all pre-1986 pensioners is based on the average emoluments drawn by them during last completed 10 months immediately preceding the date of retirement and similarly family pension is based on the last pay drawn by the deceased Government servant/pensioner. Government has, inter alia, accepted the recommendations of the Fifth CPC to the effect that the pension all the pre- 1986 retirees may be updated by notional fixation of their pay as on 1.1.1986 by adopting the same formula as for the serving employees and thereafter for the purpose of

consolidation of their pension/family pension as on 1.1.1986, they may be treated alike those who have retired on or after 1.1.986.

xxx

6. No arrears on account of revision of pension/family pension on notional fixation of pay will be admissible for the period prior to 1.1.1996."

(emphasis supplied)

25. Attention of this Court has been particularly drawn to para 137.10 of

the Report, wherein it has been noticed that there is "difference in

the basic pension alone and between pre-1.1.19986 and post-

1.1.1986 retirees upto the level of ...". In para 137.13, the

Commission records that "while it is desirable to grant complete

parity in pension to all past pensioners irrespective of the date of

retirement, this may not be feasible straightaway as the financial

implications would be considerable." Attention of this Court has been

further drawn to para 137.13 of the Report, wherein it is recorded

that "while it is desirable to grant complete parity in pension to all

past pensioners irrespective of the date of retirement, this may not

be feasible straightaway as the financial implications would be

considerable." Learned senior counsel next rely on para 137.14, the

Commission makes its recommendations that "the pension of all the

pre-1986 retirees may be updated by notional fixation of their pay

scales as on 1.1.1986 by adopting the same formula as for the

serving employees. This step would bring all the past pensioners to

a common platform or on to the Fourth CPC pay scales as on

1.1.1986." It is thus the case of the respondents that the said

extracts clearly belie the petitioners‟ contentions that the

recommendations of the Fifth Pay Commission have obliterated the

cut-off date of 1.1.1986 so as to bring at parity all pre- and post-

1.1.1986 retirees.

26. It is next contended by learned senior counsel for the respondents

that the Pension Scheme has been introduced by the Regulations

pursuant to a settlement arrived at between the Association of

Banks representing 58 member banks and the Employees‟

Unions/Associations representing the majority of the bank

employees. Taking a cue the case in ITC Ltd. Workers Welfare

Association and Another v. Management of ITC Ltd. &

Another 29 , it is contended by learned senior counsel for the

respondents that a settlement which is a product of collective

bargaining is entitled to due weight and consideration, and further,

that such settlement can only be challenged in exceptional

supra at n. 20

circumstances, viz. if it is demonstrably unjust, unfair or the result of

mala fides such as corrupt motives on the part of those who were

instrumental in effecting the settlement. It is thus the case of the

respondents that there is an implicit presumption of the Pension

Scheme being just and fair inasmuch as the said Pension Scheme is

the product of a settlement between Association of Banks and the

Employees‟ Unions/Associations, and thus, has a binding effect on

all members of such associations. For felicity of reference, the

respondents have placed on record a copy of the Memorandum of

Settlement, dated 29.10.1993, between the Management of 58

Banks as represented by the Indian Banks Association and their

Workmen as represented by the Indian National Banks Employees

Federation30, operative portion whereof is reproduced thus:

"Whereas:

a) During the course of negotiations on service conditions of the

workmen employees in February, 1990 the Indian Banks

Association (IBA) agreed to introduce pension scheme in

banks for the workmen employees in lieu of employers‟

contribution to the Provident Fund. The pension scheme

agreed by IBA ws to be broadly on Central Government/the

Reserve Bank of India pattern details of the scheme were to

be worked out.

Annexure R-5/1 (Colly.) at p. 154 of the Writ Petition

b) INBNEF‟s initial demand was for pension as third

superannuation benefit in addition to CPF and gratuity. This

was not acceptable to the IBA. After careful consideration of

the IBA‟s offer for pension as a second retiral benefit in lieu of

employer‟s contribution to contributory provident fund, INBEF

finally conveyed its acceptance of the same but demanded

additionally that D.A. should also be reckoned for provident

fund contribution and pension purposes. The IBA, however,

was not agreeable to treating D.A. as pay for Provident Fund

and pension calculations.

c) After protracted negotiations, over a period of time, the parties

agreed to resolve the dispute by accommodating each others‟

view points in the interest of industrial harmony.

NOW, THEREFORE IT IS HEREBY AGREED BY AN BETWEEN

THE PARTIES HERETO AS UNDER:

1. The member banks set out in the schedule I hereto shall

introduce pension as second retirement benefit scheme in lieu

of contributory provident fund where it does not exist for the

workmen employees of the member banks with effect from 1st

November, 1993.

2. Pension as a second retiral benefit scheme in lieu of

contributory provident fund shall be available to the following

category of employees/retired employees from 1st November,

1993 or the date of retirement, whichever is later.

I. Employees who join service of the bank on or after

1st November, 1993:

II. Employees in service of the bank as on 31st

October, 1993 and who on or before 30th June,

1994 exercise an option in writing in response to

bank‟s notice to this effect to be given not later than

31st December, 1993 to become members of the

pension scheme and to cease to be members of

the contributory provident fund scheme with effect

from 1st November, 19993 and irrevocably

authorize the bank or the trustees of the

contributory provident fund to transfer the entire

contribution of the bank along with entire interest

accrued thereon to the credit of pension fund to be

created for this purpose.

III. Retired employees who were in service of the bank

merged bank on or after 31st December, 1985

retired or after 1st January, 1986 nut before 1st

November, 1993 provided that such retired

employees apply for it on their own on the format

prescribed by each bank and refund within a

period of six months reckoned from 1st

November, 1993 the bank‟s entire contribution to

the provident fund including interest received with

further simple interest at the rate of 6 percent per

annum from the date of withdrawal of the provident

fund amount till the date of refund.

IV. Permanent part-time employees drawing scale

wage."

27. The sum and substance of the contentions put forth on behalf of the

respondents are outlined as under:

i. Firstly, that the Regulations were introduced in the year 1993-95 and the challenge to the same after 8 to 10 years of their being in operation is uncalled for and bad on account of delay and laches.

ii. Secondly, that the constitutionality of the cut-off date of 1.1.1986 has already been upheld by the Apex Court in the RBI as well as the

PNB Cases31, and thus, the petitioners are trying to raise the same issues which have attained finality in law and not ought to be raised in the interest of justice and adherence to the Doctrine of Precedents.

iii. Thirdly, the classification resulting from the 1.1.1986 cut-off date into pre- and post- 1.1.1986 retirees stands the test of reasonableness inasmuch as the Pension Scheme introduced by the Regulations is entirely a new scheme, and thus, the pre-1.1.1986 retirees,

having already collected the retrial benefits entitled to them under the erstwhile CPF Scheme, cannot now claim coverage under the new Pension Scheme.

iv. Fourthly, that even otherwise, the employer is entitled to fix cut-off dates in respect of new schemes introduced for the benefit of its employees and the same being a policy decision is not open to judicial intervention, unless the same is proved arbitrary or whimsical.

supra at n. 3

v. Fifthly, that there is an implicit presumption of the Pension

Scheme being just and fair inasmuch as the said Pension Scheme is the product of a settlement between Association of Banks and the Employees‟ Unions/Associations, and thus, has a binding effect on all members of such associations.

vi. Sixthly, that the recommendations of the Fifth Pay Commission do not in any manner obliterate the basis of the cut-off date of 1.1.1986, and even otherwise, the said recommendations are neither binding in nature nor applicable to employees of the Banking Sector.

28. Learned senior counsel for the petitioners has resisted the aforesaid

submissions of the respondents by filing a rejoinder. The sum and

substance of the submissions made by the petitioners in their

rejoinder is outlined thus:

i. Firstly, that the RBI and PNB cases32 are not applicable to present case owing to the change of circumstances in the present case. At the time when the RBI Case was decided, the cut-off date of 1.1.1986 was still applicable in the Government Pension Scheme, whereas today it is an absolutely changed scenario, as the said date stands obliterated in view of the recommendations of the Fifth Pay Commission Report.

ii. Secondly, in the RBI Case, the Pension Scheme could not be made applicable to pre-1986 employees for want of records. However, the affidavit filed by the petitioners in the RBI Case to the effect that the RBI did not have the records for pre-1986 retirees was an incorrect affidavit and requires reconsideration. The Reserve Bank of India, as

supra at n. 3

a matter of fact, was in possession of records for all pre-1986 retirees as is evident from the fact that the said Bank had in the year 1992 granted pension to the widows of those bankers who had retired prior to 1.1.1986. As per the RBI Manual and its Policy of Record Retention, records pertaining to the Pension, Provident Scheme, have to be maintained permanently, and thus, there was no occasion for the records to have been destroyed.

iii. Thirdly, that the present petition is not vitiated by delay and laches inasmuch as the dismissal of the petition in the PNB Case had dissuaded the petitioners to pursue the present petitioners from approaching the Court again either for clarification or review of its earlier orders or for filing the present writ petition. Thereafter, the Employees‟ Unions/Associations took time to convince the Members, who are all senior citizens of this country, above the age of 78 years with meager means to file the present writ petition.

iv. Fourthly, that merely because the respondents purport that the applicability of the Pension Scheme would entail State expenditure, the State cannot shirk its legal liability to pay the legitimate dues of the petitioners on the ground of increased financial liability. Banks have been making huge profits and giving large financial dividends to the Government. Further, most of the pre-1986 retirees are either on the wrong side of eighty or are no longer alive. The relevant pay scale at the relevant time was very low as compared to the present times. Thus, applicability of the Pension Scheme would not entail huge financial stakes for the respondents.

29. I have heard both parties at length and given my thoughtful

consideration to the matter.

30. Learned senior counsel for the petitioners, in the first leg of their

arguments, have fervently contended the Pension Scheme

introduced by the Regulations is not a new scheme but only a

liberalised form of the pre-existing CPF scheme, and thus, the

prescription of cut-off date of 1986 resulted in classification of a homogenous

class of employees into two groups, which classification has no nexus with the

object sought to be achieved, and thus, is ultra vires Article 14 of the

Constitution. Learned senior counsel have relied upon the decision in D.S.

Nakara & Ors. v. Union of India 33 wherein the Apex Court has

categorically opined that any classification that has no nexus with

object sought to be achieved is an unreasonable classification and

liable to be set aside.

31. The aforesaid contention of the petitioners, I am afraid, is not

acceptable to me. The petitioners, in my view, have wrongly

premised their contention on the presumption that the Pension

Scheme is inextricably connected with the erstwhile C.P.F. Scheme,

whereas the correct position is that Pension Scheme introduced by

the Regulations is a totally new one and was not into existence prior

to 1.11.1990, and further, that the pre-1.1.1986 retirees, having

already collected the retrial benefits entitled to them under the

supra at n. 13

erstwhile CPF Scheme, cannot now claim coverage under the new

Pension Scheme.

32. Reliance by the petitioners on the decision in D.S. Nakara & Ors. v.

Union of India is utterly misplaced. Nakara‟s case, as I

understand it, was a case where an artificial date was specified

classifying the retirees, governed by the same rules and similarly

situated, in two different classes, depriving one such class of the

benefit of liberalized Pension Rules. It was found in that case that

the specification of the date (from which the liberalized Rules were,

to come into force) was arbitrary. Whereas in this case, the

employees retiring prior to 1.1.1986 and those retiring thereafter are

governed by different Rules. The argument to the contrary may

mean that the Government can never change the conditions of

service relating to retrial benefits with effect from a particular date.

No such absolute proposition can be stated that while effecting any

such change, no date from which such change will come into force

can be specified. Of Course, as repeatedly held by the Courts, that

in such cases, as the expression goes, "pick a date out of its hat".

The cut-off date has to be prescribed in a reasonable manner,

having regard to all the relevant facts and circumstances, and

supra at n. 13

without bring about discrimination between similarly situated

persons.

33. As to how the 1.1.1986 is valid and the classification into pre- and

post-1.1.1986 retiress is reasonable has already been settled in the

RBI and PNB Cases35, and it is not for this Court to re-consider the

same.

34. This case has an interesting angle. Learned senior counsel for the

petitioners, whilst stoutly distinguishing the facts and considerations

which were prevalent at the time of the RBI Case36 from the facts

considerations prevalent as of today, has gone a step further and

challenged the very basis on which the Apex Court in the RBI

Case37 arrived at its decision of upholding vires of the 1.11.1986 cut-

off date. It is adduced by the learned senior counsel that the very

basis on which the Apex Court in the RBI Case 38 vindicated the

1.11.986 cut-off date has now been obliterated in view of the 5th Pay

Commission Recommendations which bring at parity all retires of the

Central Government irrespective of the date of retirement.

Interestingly, albeit the petitioners in the relief clause of their writ

supra at n. 3

supra at n. 1

Ibid

Ibid

petitions have not expressly sought for reconsideration of the RBI

Case 39 , the subtext of the submissions made by learned senior

counsel for the petitioners is that the Apex Court in the RBI Case40

was constrained to validate the 1.11.1986 cut-off date for want of

material records. Inter alia, it is contended by learned senior counsel

for the petitioner that the affidavit filed by the petitioners in the RBI

Case to the effect that it did not have the records for pre-1986

retirees, was an incorrect affidavit and requires reconsideration.

35. The plea of the petitioners warranting reconsideration of the RBI

Case41 is per se without merit, and if accepted, would run counters

to the mandate under Article 141 of the Constitution of India wherein

it is stated that "[t]he law declared by the Supreme Court shall be

binding on all Courts within the territory of India". There is, indeed,

under Article 142 a tacit embargo on the High Courts to derogate

from or overrule the decision of the Apex Court on the ground that

the legal position in the said decision was laid down without

consideration of material facts.

36. The mandate under Article 141 of the Constitution is mirrored in the

Common Law Doctrine of Precedents which unequivocally stipulates

Ibid

Ibid

Ibid

that when a point or principle of law has been once officially decided

or settled by the ruling of a superior Court in a case in which it is

directly and necessarily involved, it will no longer be considered as

open to examination or to a new ruling by the subordinate Court

which are bound to follow the superior Court‟s adjudications. The

Doctrine of Precedent is embodied in the maxim "stare decisis et

non quieta movere", the literal translation whereof is "[t]o stand by

things decided and not to disturb settled points".42 The Doctrine of

Precedents, in fact, underscores one of the most cardinal principles

of administration of justice being that like cases should be decided

alike. The said Doctrine, in essence, is premised on public policy,

and if not followed, is likely to create chaos in the administration of

justice. It is a truism that precedents set a definite pattern or finality

upon which the future conduct of Courts of Law may be based, and

this, in effect, facilitates consistency, certainty and uniformity which

are hallmarks of smooth administration of justice. It is these virtues

of consistency, certainty and uniformity which create confidence in

the Judicial System and these virtues can never be achieved without

paying obeisance to the Doctrine of Precedent.

see, Black's Law Dictionary, eighth edition, p. 1443

37. Learned senior counsel for the petitioners, however, have drawn

support from Commissioner of Police and Ors. v. Acharya

Jagdishwaranda Avadhuta and Anr. 43 (famously known as the

"Ananda Margi - II Case"). It may be recalled that a bench

consisting of three learned judges of the Apex Court in the Acharya

Jagdishwaranda Avadhuta and Ors. v. The Commissioner of

Police , Calcutta and Anr. 44 (famously known as the "Ananda

Margi - I Case") arrived at a unanimous conclusion on facts that the

Tandava Dance in public is not an essential and integral part of the

Ananda Margi faith. The non-essential nature of the Tandava Dance

to the Ananda Margi faith, as laid down in the Ananda Margi - I

Case45, was challenged before the Apex Court in the Ananda Margi

- II Case 46 on the ground that Ananda Murti Ji, the founder of

Ananda Margi faith, prescribed to perform Tandava dance in public

as an essential religious practice in the "Carya Carya", a book

containing the relevant doctrines. When the matter first came up for

hearing, a bench consisting of two learned Judges of the Apex Court

passed the following order dated 1.12.1987:

2004 (12) SCC 770

(1983) 4 SCC 522

Ibid

supra at n. 46

"We are of the view that these cases should appropriately be examined by the High Court keeping in view that has been said by this Court in the Judgment in Acharya Jagdishwaranda Avadhuta and Ors. v. The Commissioner of Police, Calcutta and Anr. reported in (1983) 4 SCC 522 Petitioners are at liberty to go before High Court."

38. Taking a leaf out of the decision of the Apex Court in the aforesaid

order setting the petitioners therein at liberty to approach the High

Court, learned senior counsel for the petitioners has argued that just

as the Calcutta High Court in the Ananda Margi-II Case 47 re-

considered the non-essential nature of Tandava dance to the

Ananda Margi faith in view of the revised edition of the Carya Carya,

likewise, this Court can also re-consider the findings in the RBI and

PNB Cases 48 in view of the recommendations of the Fifth Pay

Commission. Learned senior counsel for the petitioners submit that

they are further emboldened by the fact that in the present case, the

Apex Court vide order dated 1.9.2005, has expressly directed this

Court to dispose of the present matter.49

Ibid

supra at n. 3

The order dated 1.9.2005 is reproduced at para 3 of this judgment

39. Reliance by the petitioners on the Ananda Margi-II Case50, I am

afraid, is misplaced. The Judgment in the Ananda Margi-II Case51,

in fact, militates against the petitioners. It is important to note that

pursuant to the aforesaid order dated 1.12.1987 of the Apex Court,

first a Single Judge and subsequently a Division Bench of the

Calcutta High Court arrived at the conclusion that taking out

Tandava dance in public carrying skull, trident etc was an essential

part of Ananda Margi faith and Commissioner of Police could not

impose conditions to it. This unanimous decision of the Single and

Division Bench of the Calcutta High Court was challenged in the

Ananda Margi-II Case52, wherein the Apex Court has unequivocally

observed that the writings in the Carya Carya cannot be a "clue to

re-open the whole finding" (i.e., the non-essential nature of Tandava

Dance to the Ananda Margi faith), and further, that "[t]he learned

judges of the (Calcutta) High Court wrongly proceeded on the

assumption that the finding of this (Apex) Court regarding the non-

essential nature of Tandava Dance to the Ananda Margi faith is due

to the non-availability of any literature or prescriptions by the

supra at n. 46

Ibid

Ibid

founder"53. In view thereof, needless to state that the Apex Court in

the Ananda Margi-II Case 54 adopted the dictum laid down in the

Ananda Margi-I Case55 and held that the Tandava Dance was non-

essential to the Ananda Margi faith.

40. The crux of the decision in the Ananda Margi-II Case56 is that the

essential part of a religious faith could not be altered at a

subsequent point of time merely on the ground of non-availability of

literature or prescribed documents. Even otherwise, it is the settled

position of law, as laid down in Director of Settlement, A.P., v.

M.R. Apparao and Anr. and B.M. Lakhani v. Malkapur

Municipality58, that a decision of the Apex Court cannot be assailed

before any other Court on the ground that certain aspects were not

considered or that the relevant provisions were not brought to the

notice of the Apex Court.

41. It would be worthwhile to note that unlike the order dated 1.9.2005

appertaining the present case wherein the Apex Court dismissed the

petition being W.P. (C) No. 471 of 2003 in order that the same be

id at para 8

ibid

supra at n. 44

supra at n. 46

(2002) 4 SCC 638

AIR 1970 SC 1002

filed before this Court, the Apex Court in its order of 1.12.1987 did

not dismiss the fresh writ petition filed after its decision in the

Ananda Margi -I Case59. When the precepts were recorded in the

Carya Carya and made part of the new petition in the Ananda

Margi-II Case60, the Apex Court ordered the same to be investigated

by a fresh writ petition in the Calcutta High Court which was done by

the Division Bench of the High Court.

42. It would also be worthwhile to note that the reasoning of the Calcutta

High Court that a subsequent addition in the Carya Carya could

constitute Tandava dance as essential part of Ananda Margi faith

was not accepted by the Apex Court in the Ananda Margi -II

Case61 for the reason that "it is for the Court to decide whether a

part or practice is an essential part or practice of a given religion. As

a matter of fact if in the earlier litigations the Court arrives at a

conclusion of fact regarding the essential part or practice of a

religion -it will create problematic situations if the religion is allowed

to circumvent the decision of Court by making alteration in its

doctrine"62.

supra at n. 44

supra at n. 46

Ibid

id at para 11

43. Applying the aforesaid analogy as in the Ananda Margi -II Case63

to the present case, I have no hesitation in stating that the validity of

a cut-off date and the reasonableness of a classification resulting

therefrom are essentially findings of facts, and at any given point of

time, it is only for the Courts of law to arrive at such findings. Further,

what has already been settled by the Courts, cannot not be re-

considered or unsettled by the findings and suggestions of a

recommendatory body like the Pay Commission. In the present

case, the constitutionality of the 1.1.1986 cut-off date as well as the

reasonableness of the classification resulting therefrom, having

already attained finality in the decisions of the Apex Court, cannot

now be challenged by purporting that the recommendations of the

Fifth Pay Commission have obliterated the basis of fixing the cut-off

date. Even otherwise, as rightly contended by the respondents, the

recommendations of the Fifth Pay Commission are only

recommendations to the Central Government and are neither

binding in nature nor are applicable to the employees of the banking

sector.

44. To conclude, the subject-matter of the lis herein, being squarely

covered in facts and ratio by the Apex Court in the RBI and PNB

supra at n. 46

Cases 64 , this Court finds no ground to interfere in the present

petitions. Any attempt on the part of this Court to take a contrary

stand from the one taken in the said cases will be affront to the

mandate under Article 141 of the Constitution of India.

Consequently, the present petitions stand dismissed.

45. For the reasons aforesaid, I find no grounds to interfere in the

present petition, and consequently, the same stands dismissed.

June 6th , 2008                                              G.S. Sistani, J


ssn





     supra at n. 3