[Cites 21, Cited by 0]
Madras High Court
E.Arumugam (Retd) vs The Government Of India on 19 January, 2026
Author: G.R.Swaminathan
Bench: G.R.Swaminathan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATE : 19.01.2026
CORAM
THE HON'BLE MR.JUSTICE G.R.SWAMINATHAN
AND
THE HON'BLE MRS.JUSTICE R.KALAIMATHI
WA(MD)Nos.761 & 765 of 2015
In WA(MD)No.761 of 2015 : -
1.E.Arumugam (Retd),
Administrative Officer,
2.R.Manoharan (Retd.),
Senior Assistant
3.R.Madhavan (Retd.),
Senior Assistant
4.V.Meenakshi Sundareswaran (Retd.),
Deputy Manager
5.K.N.Ramaraj (Retd.),
Administrative Officer
6.S.Anandaraj (Retd.),
Assistant Accounts Officer
7.S.V.Pandiyan (Retd),
Senior Assistant
8.V.Selvaraj (Retd.),
Administrative Officer
9.C.Nagasamy (Retd.),
Assistant
10.R.Sabapathy (Retd.),
Administrative Officer ... Appellants
1/19
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Vs.
1.The Government of India
Rep.by its Secretary,
Ministry of Finance,
Department of Economic Affairs,
Banking and Insurance,
III Floor, Jeevan Vikar,
Sansad Marg, New Delhi – 110 001.
2.National Insurance Co.Ltd.,
No.3, Middleton Street,
Kolkatta – 110 002, West Bengal.
3.Oriental Insurance Co., Ltd.,
A-25/27. Asaf Ali Road,
New Delhi – 110 002.
4.New India Assurance Co. Ltd.,
No.87, Mahatma Gandhi Road,
Fort, Mumbai – 400 001,
Maharashtra.
5.United India Insurance Co., Ltd.,
Whites Road,Royapettah,
Chennai – 600 014.
6.General Insurance Corporation Ltd.,
No.1, “Suraksha”, No.170, J.T.Road,
Mumbai- 400 020, Maharashtra.
7.National Insurance Special Voluntary
Retired / Retired Employees' Association,
7-A, (Old No.4-A), South Gangai Amman Kovil
1st Street, Choolaimedu, Chennai – 600 094,
Rep.by its President,
Mr.V.Ravishankar ...Respondents
2/19
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In WA(MD)No.765 of 2015 : -
National Insurance Special Voluntary
Retired / Retired Employees' Association,
7-A, (Old No.4-A), South Gangai Amman Kovil
1st Street, Choolaimedu, Chennai – 600 094,
Rep.by its President,
Mr.V.Ravishankar ... Appellant
Vs.
1.E.Arumugam (Retd),
Administrative Officer,
2.R.Manoharan (Retd.),
Senior Assistant
3.R.Madhavan (Retd.),
Senior Assistant
4.V.Meenakshi Sundareswaran (Retd.),
Deputy Manager
5.K.N.Ramaraj (Retd.),
Administrative Officer
6.S.Anandaraj (Retd.),
Assistant Accounts Officer
7.S.V.Pandiyan (Retd),
Senior Assistant
8.V.Selvaraj (Retd.),
Administrative Officer
9.C.Nagasamy (Retd.),
Assistant
10.R.Sabapathy (Retd.),
Administrative Officer ... Appellants
3/19
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11.The Government of India
Rep.by its Secretary,
Ministry of Finance,
Department of Economic Affairs,
Banking and Insurance,
III Floor, Jeevan Vikar,
Sansad Marg, New Delhi – 110 001.
12.National Insurance Co.Ltd.,
No.3, Middleton Street,
Kolkatta – 110 002, West Bengal.
13.Oriental Insurance Co., Ltd.,
A-25/27. Asaf Ali Road,
New Delhi – 110 002.
14.New India Assurance Co. Ltd.,
No.87, Mahatma Gandhi Road,
Fort, Mumbai – 400 001,
Maharashtra.
15.United India Insurance Co., Ltd.,
Whites Road,Royapettah,
Chennai – 600 014.
16.General Insurance Corporation Ltd.,
No.1, “Suraksha”, No.170, J.T.Road,
Mumbai- 400 020, Maharashtra. ...Respondents
Common Prayer : Writ Appeals filed under Clause 15 of Letters Patent, to set
aside the order dated 17.06.2015 made in WP(MD)No.9411 of 2011.
in WA(MD)No.765 of 2015
For Appellant : Mr.V.Vijay Shankar
For Respondents : Mr.K.K.Senthil for R2, R3, R5, R7, R8 & R9
Mr.P.Paulpandi for R11
Mr.V.Perumal for R12 to R16
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in WA(MD)No.761 of 2015
For Appellant : Mr.K.K.Senthil
For Respondents : Mr.P.Paulpandi for R1
Mr.V.Perumal for R2 to R6
Mr.V.Vijayshankar for R7
COMMON JUDGMENT
Both these appeals are directed against the order dated 17.06.2015
passed by the learned Single Judge dismissing WP(MD)No.9411 of 2011 filed
by the appellants in WA(MD)No.761 of 2015. The appellant association in
WA(MD)No.765 of 2015 got itself impleaded as the seventh respondent in the
writ petition vide order dated 04.12.2014.
2.The case on hand pertains to the pension scheme applicable to the
retired employees of Oriental Insurance Company Limited, United India
Insurance Company Limited, New India Assurance Company Limited and
National Insurance Company Limited. The Central Government in exercise of
the power conferred by Section 17A of the General Insurance Business
(Nationalization) Act, 1972 made applicable the General Insurance
(Employees') Pension Scheme, 1995 with effect from 01.11.1993. It was to
apply to those in service in the said insurance companies as on 01.01.1986.
Clause 2(d) and Clause 34 of the pension scheme read as follows :
“2(d) 'average emoluments' means the average of pay drawn by
an employee during the last ten months of his service”
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34.Amount of Pension -
(1) In respect of employees who retired between the 1st day of
January, 1986 but before the 31st day of July, 1987, basic
pension and additional pension will be updated as per the
formula given in Appendix-III.
(2) In the case of an employee retiring in accordance with the
provisions of the relevant rationalisation scheme after
completing the qualifying service of not less than thirty three
years, the amount of basic pension shall be calculated at fifty
per cent of the average emoluments.
(3) (a) Additional pension shall be fifty per cent of the allowances
drawn by an employee during the last ten months of his service.
(b) No dearness relief shall be paid on the amount of additional
pension.
Explanation:- For the purposes of this sub-paragraph
"allowances" means allowances which are admissible to the
extent counted for the following purpose only, namely :-
(i) making contributions to the Provident Fund ;
(ii) grant of house rent allowances ;
(iii) payment of gratuity ; and
(iv) re-fixation of salary on promotion.
(4) Pension as computed being the aggregate of sub-
paragraphs (2) and (3) above shall be subject to the minimum
pension as specified in this scheme.
(5) An employee who has commuted the admissible portion of
his pension as per the provisions of paragraph 40 of this
scheme shall receive only the balance of pension, monthly.
(6) (a) In the case of an employee retiring before completing a
qualifying service of thirty- three years, but after completing a
qualifying service of ten years, the amount of pension shall be
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proportionate to the amount of pension admissible under sub-
paragraphs (2) and (3) and in no case the amount of pension
shall be less than the amount of minimum pension specified in
this scheme.
(b) Notwithstanding anything contained in this scheme, the
amount of invalid pension shall not be less than the ordinary
rate of family pension which would have been payable to his
family in the event of his death while in service.
(7) The amount of pension finally determined under this
paragraph shall be expressed in whole rupee and where the
pension contains a fraction of a rupee, it shall be rounded off
to the next higher rupee.
(8) Notwithstanding anything contained in this Scheme, in
relation to an employee covered by the proviso to clause (k) of
Paragraph 2, pension shall be calculated in accordance with the
provisions of sub-paragraph (2), so however, that such pension
shall not be less than what he would have been entitled to had
he continued in the scale of pay of General Manager, when the
pension becomes due and payable to him.”
The pay scales of the employees are revised periodically. Such revisions took
place during 1989, 1997, 2002, 2007, 2012 and 2017. Since as per Clause
34, the basic pension receivable by a retired employee is pegged at 50% of
the average emolument, it tends to be static. The periodical pay scale
revisions are not taken note of while calculating the basic pension. As a result,
those who retired prior in point of time, though from a higher cadre, draw less
pension compared to those who retire from a far lower cadre. This is illustrated
by the following comparative chart :
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3.A similar situation obtained in the case of the Central Government
pensioners also. That was set right by the Government of India vide
Notification dated 17.12.1998. It was directed that the pension of all
pensioners irrespective of their date of retirement shall not be less than 50% of
the minimum pay in the revised scale of pay introduced with effect from
01.01.1996 of the post last held by the pensioners. When the 6 th Central Pay
Commission Recommendations were implemented, the Government of India
vide Office Memorandum dated 01.09.2008, directed that the fixation of
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pension will be subject to the provision that the revised pension, in no case,
shall be lower than fifty percent of the minimum of the pay in the pay band plus
the grade pay corresponding to the pre-revised pay scale from which the
pensioner had retired. The Tamil Nadu Electricity Board also issued similar
Board Proceedings dated 01.12.2009. Thus, the basic pension receivable by a
pensioner was quantified based on the revised pay fixed for the post which
was held by the pensioner when he retired. This was a beneficial measure
introduced by the Central Government for its pensioners. Many other
organizations followed suit. However, in the case of the respondent insurance
companies, similar change in the pension scheme was not brought about.
Though the appellant association and the pensioners represented to the
Central Government in this regard, no response was forthcoming. Hence,
WP(MD)No.9411 of 2011 was filed for directing the Ministry of Finance,
Government of India to grant revised pension and other benefits on the basis
of revised pay scale as amended and effected from time to time and to pay all
consequential benefits including pensionary arrears. The writ petition however
suffered dismissal. Hence, these writ appeals came to be filed.
4.The learned counsel for the appellants submitted that the learned
Single Judge erred in not granting relief. He drew our attention to Clause 55 of
the pension scheme and contended that the pensioners of the aforesaid
insurance companies are entitled to revision of their basic pension on par with
the methodology adopted by the Government of India. He pointed out that
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unless such a change is brought about, the iniquitous position demonstrated
by the comparative chart cannot be set right. A person who retired from a
higher grade is entitled to receive higher pension compared to a person who
retired from a lower grade. This proposition is a natural corollary of the
equality principle enshrined in Article 14 of the Constitution of India.
Pensioners form a homogenous class and a liberal approach adopted in case
of a section has to be applied across the board. The insurance companies in
question are possessed of a huge corpus of pension fund and they are in a
position to meet any liability that may arise as a result of issuance of a writ of
mandamus as prayed for. The learned counsel contended that the learned
Single Judge had misapplied the decisions reported in (1990) 4 SCC 207
(Krishena Kumar v. UOI) and (1997) 7 SCC 334 (UOI v. Lieut.Mrs.
E.IACATS). The learned counsel relied on the following case laws :
1. D.S. Nakara v. Union of India, (1983) 1 SCC 305
2. R.L. Marwaha v. Union of India, (1987) 4 SCC 31
3. Bharat Petroleum Management Staff Pensioners v.
Bharat Petroleum Corpn. Ltd., (1988) 3 SCC 32
4. All India Reserve Bank Retired Officers Assn. v. Union
of India, 1992 Supp (1) SCC 664
5. V. Kasturi v. Managing Director, State Bank of India,
(1998) 8 SCC 30
6. Subrata Sen v. Union of India, (2001) 8 SCC 71 AND
7. All Manipur Pensioners Assn. v. State of Manipur,
(2020) 14 SCC 625.
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The learned counsel filed written submissions and took us through the same.
He called upon us to set aside the order of the learned Single Judge and allow
the writ appeals.
5.Per contra, the learned counsel appearing for the respondents
submitted that the order of the learned Single Judge is well reasoned and that
it does not call for interference. Shri.V.Perumal, the learned counsel
appearing for the insurance companies also filed detailed written arguments
and took us through its contents. He raised prelimnary objection as regards
the maintainability of these writ appeals at the instance of the Appellant
Association.
6.We carefully considered the rival contentions and went through the
materials on record. The objection of the respondents that the writ appeal filed
by the association has to be dismissed as not maintainable is without
substance. While a writ petition by an association could possibly be contested
on grounds of maintainability, an appeal by an association which was a party
to the writ proceedings is obviously maintainable. It is well settled that any
aggrieved person can file a writ appeal under Clause 15 of the Letters Patent.
If an association felt aggrieved by the order of the learned Single Judge, it can
definitely maintain an appeal. It would be all the more so when it is a party to
the writ petition itself. An association has no fundamental right and therefore,
it cannot maintain a writ petition under Article 32 of the Constitution of India
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(vide Mohinder Kumar Gupta v. UOI (1995) 1 SCC 85). But a writ petition
filed under Article 226 of the Constitution can be maintained for enforcing a
statutory right or for any other purpose. A writ petitioner need not demonstrate
the existence of any fundamental right. It is enough that there is locus standi.
The appellant-association would definitely pass muster on that count. The
appeal has been filed to espouse the cause of the members of the association.
The Hon'ble Supreme Court in the decision reported in (1983) 1 SCC 305
(D.S.Nakara v. UOI) upheld the locus standi of a registered society to take up
the cause of its members by seeking remedy through judicial process. The
same approach was adopted by the Hon'ble Supreme Court in Confederation
of Ex.Servicemen Associations v. UOI (2006) 8 SCC 399. The Division
Bench of the Madras High Court in the decision reported in (2006) 2 CTC 705
(Vellakoil Vattara Vari Seluthuvor Nalvalvu Sangam v. State of T.N) held
that writ petition filed by a registered society for the benefit of its members is
very much maintainable. When a registered association can maintain a writ
petition, it can obviously maintain a writ appeal also.
7.Right to receive pension is recognised as a right in property (State Of
Jharkhand & Ors. vs Jitendra Kumar Srivastava & Anr (2013) 12 SCC
210). Right to receive pension, although accruing on retirement, is a condition
of service (UOI v. Gurnam Singh, (1982) 2 SCC 314). The Constitution
Bench of the Hon'ble Supreme Court in the decision reported in (1971) 2 SCC
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330 (Deokinandan Prasad v. State of Bihar) declared that pension is not a
bounty payable on the sweet will and pleasure of the government but is a
valuable right vesting in a government servant. But then, payment of pension
would only be as per the rules (Union of India v. Satish Kumar, (2006) 1
SCC 360). The argument of the appellants is not that they are not being paid
as per the provisions set out in the General Insurance (Employees') Pension
Scheme, 1995. The demand in these proceedings is that the basic pension
receivable by a retired employee should not be static but dynamic. It is true
that the Central Government has introduced a dynamic element in the pension
scheme applicable to the central government pensioners. But the pension
scheme applicable to the retired employees of the aforesaid insurance
companies does not contain a comparable provision. Unfortunately, the
appellants have also not challenged the validity of the 1995 pension scheme.
So long as Clauses 2(d) and 34 of the pension scheme remain as they are, the
appellants cannot seek anything more than what Clause 34 envisages.
8.Right to receive pension is not a fundamental or a constitutional right.
It is governed by statute or regulated by contract. Till the 1995 scheme was
introduced by the Central Government, the retired employees of the aforesaid
insurance companies did not receive any pension. Their right to receive
pension, therefore, stems and flows out of the provisions of the scheme. So
long as the scheme provisions remain what they are, the pension
quantification also has to be determined only by them. It is true that the Central
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Government has introduced a liberalised pension scheme for the central
government pensioners. Whether to bring the pensioners of the aforesaid
insurance companies also on par with the central government pensioners is a
policy decision that has to be taken by the central government. It is well
settled that the Court cannot compel the Government to formulate a policy,
evaluate alternatives or assess the effectiveness of existing policies. This
constraint stems from the principle of separation of powers, where the Court
lacks the democratic mandate and institutional expertise to delve into such
matters. Thus, while the Court can invalidate a policy, it lacks the authority to
create one. (vide Citizenship Act, 1955, Section 6-A, In re, (2024) 16 SCC
105). The writ court cannot dictate what the pension policy has to be. This is
because it has huge financial implications. The pockets of the insurance
companies may be deep. But that is no ground to direct them to cough up
more than what they are due and liable. Liability in such matters will have to
be determined only in terms of the applicable provisions. While they can be
liberally interpreted in pension matters, the court will not be justified in issuing
directions contrary to rules (vide V.Sukumaran v. State of Kerala, (2020) 8
SCC 106).
9.The core contention of the appellants is that they are entitled to
relief by applying the residuary clause set out in Clause 55 of the pension
scheme. It reads as follows :
“Residuary provisions – Matters relating to pension and
other benefits in respect of which no express provision has been
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made in this scheme shall be governed by the
corresponding provisions contained in the Central Civil
Services (Pension) Rules, 1972 or the Central Civil Services
(Commutation of Pension) Rules,1981, applicable for Central
Government employees.”
It is a cardinal principle of interpretation of a statute that only those cases or
situations can be covered under a residual head which are not covered under
a specific head. In other words, what can be brought under a residual
provision should not be covered under the provisions preceding it (UOI v.
Rajpal Singh (2009) 1 SCC 216). When the amount of pension payable to a
retired employee is already covered under Clause 34/35 of the pension
scheme, Clause 55, which is a residuary clause, cannot be invoked at all. A
residual clause can be pressed into service only in the absence of a provision.
Where the field is expressly covered, the residual clause will not kick in.
10.Appeal to Nakara principle or Article 14 of the Constitution of India is
equally in vain. Pensioners, no doubt, constitute a genus. But within this
overarching circle, there are numerous species. Each would form a sub-circle.
A member of one sub-circle cannot seek to compare himself or herself with a
member of another sub-circle merely on the ground that they belong to the
same genus of pensioners. The claimant must show that he is equally placed
in every respect to enforce the mandate of equality. The insurance company
in question might be a Government of India Undertaking. But on that score, an
insurance employee will not become a central government employee. If that
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be so, we fail to understand as to how the pensioner of such an insurance
company can claim parity with a central government pensioner.
11.The comparative chart shown by the learned counsel for the
appellant no doubt appeal to us at the first blush. But this submission is again
without any legal force. A Senior Assistant who retired between 01.08.1997
and 31.07.2002 would get monthly basic pension of Rs.25,589/- but a sub-staff
who retired after 01.08.2017 would get Rs.33,650/-. This looks anomalous.
But there is actually no anomaly. No generation should compare itself with its
succeeding generation. They belong to different time-zones. The basic
pension is fixed on the basis of the last drawn pay. Due to rise in prices,
increase in cost of living and other inflationary factors, pay scales are
periodically revised. Therefore, a sub-staff who joins the post a decade later
would obviously be getting a higher pay compared to those who occupied
higher grades earlier. It is said that comparisons are always odious. This
proverbial wisdom is of apposite application in this case. Those who retire
later get higher pension because their last drawn pay was higher. In other
words, their drawing higher pension is not on account of any application of a
different formula. The very same provision that applies to a Senior Assistant
who retired between 1997 and 2002 has been applied to the sub-staff who
retired after 2017. Thus, there is no infraction of the equality principle. One
cannot infer anomaly merely because of the drawal of higher pension by a
person belonging to a lower cadre without taking note of when he retired.
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12.We fully concur with the reasons assigned by the learned Single
Judge. We, therefore, refrain from extensively quoting the case laws relied on
by the learned Single Judge.
13.We should not however be understood as holding that the demand of
the appellants is unreasonable. Far from it. However, it is a matter to be
benevolently considered by the Central Government. The managements of
the respondent insurance companies might as well take up the matter. The
petitioners can very well pursue the matter with the governmental authorities.
The dismissal of these writ appeals will not and ought not to discourage them
from pursuing the matter. Since the hands of the writ court are tied and the
issue involves policy implications, we decline to interfere.
14.With the aforesaid observations, these writ appeals are dismissed.
No costs. Connected miscellaneous petitions are closed.
(G.R.S, J.) & (R.K.M, J.)
19.01.2026
Index : Yes / No
Internet : Yes/ No
SKM
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To:
1.The Secretary, Government of India
Ministry of Finance,
Department of Economic Affairs,
Banking and Insurance,
III Floor, Jeevan Vikar,
Sansad Marg, New Delhi – 110 001.
2.National Insurance Co.Ltd.,
No.3, Middleton Street,
Kolkatta – 110 002, West Bengal.
3.Oriental Insurance Co., Ltd.,
A-25/27. Asaf Ali Road,
New Delhi – 110 002.
4.New India Assurance Co. Ltd.,
No.87, Mahatma Gandhi Road,
Fort, Mumbai – 400 001,
Maharashtra.
5.United India Insurance Co., Ltd.,
Whites Road,Royapettah,
Chennai – 600 014.
6.General Insurance Corporation Ltd.,
No.1, “Suraksha”, No.170, J.T.Road,
Mumbai- 400 020, Maharashtra.
7.National Insurance Special Voluntary
Retired / Retired Employees' Association,
7-A, (Old No.4-A), South Gangai Amman Kovil
1st Street, Choolaimedu, Chennai – 600 094,
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G.R.SWAMINATHAN, J.
AND
R.KALAIMATHI, J.
SKM
WA(MD)Nos.761 & 765 of 2015
19.01.2026
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