Telangana High Court
G. Suresh vs Telangana State Police Housing ... on 15 June, 2021
Bench: M.S.Ramachandra Rao, T.Vinod Kumar
THE HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T. VINOD KUMAR
Writ Petition No.24244 of 2020
Between:
G. Suresh, S/o.G. Venkateswara Rao,
Aged about : 66 years,
Asst. General Manager (Retd.),
A.P. State Police Housing Corporation
Limited, Hyderabad,
R/o.15-31/4/1, LILG 95, Dharma Reddy
Colony, Phase-III, K.P.H.B.,
Hyderabad - 500 085, and others
...Petitioners
And
Telangana State Police Housing
Corporation Limited,
State Police Headquarters Compound,
Saifabad, Hyderabad - 500 004,
Rep. by its Managing Director and others
...Respondents
Date of Judgment pronounced on : .06.2021
HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T. VINOD KUMAR
1. Whether Reporters of Local newspapers : Yes/No
May be allowed to see the judgments?
2. Whether the copies of judgment may be marked : Yes
to Law Reporters/Journals:
3. Whether His Lordships wishes to see the fair copy : Yes/No
Of the Judgment?
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THE HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T. VINOD KUMAR
Writ Petition No.24244 of 2020
% .06.2021
# G. Suresh, S/o.G. Venkateswara Rao,
Aged about : 66 years,
Asst. General Manager (Retd.),
A.P. State Police Housing Corporation Limited,
Hyderabad,
R/o.15-31/4/1, LILG 95, Dharma Reddy
Colony, Phase-III, K.P.H.B.,
Hyderabad - 500 085, and others
...Petitioners
And
$Telangana State Police Housing Corporation
Limited,
State Police Headquarters Compound,
Saifabad, Hyderabad - 500 004,
Rep. by its Managing Director and others
...Respondents
< GIST:
> HEAD NOTE:
!Counsel for the Petitioners : Sri Ravi Kondaveeti
^Counsel for the respondents : Smt. N. Uma Devi, learned Standing
Counsel for Police Housing Corporation,
Telangana;
Sri G. Pedda Babu, Standing
Counsel for Police Housing Corporation,
Andhra Pradesh; &
Sri Srinivas Karra, Standing Counsel
for LIC of India (5th respondent).
? Cases referred
1. 2019 (1) ALD 7 (SC)
2. 2017 (6) ALD 103 (DB)
3. 2019 (2) ALD 151 (FB)
4. AIR 1983 SC 130
5. (2013) 2 SCC 772
6. (2008) 2 SCC 672, at page 697
7. Suo Motu Writ Petition (Civil) No.3 of 2021
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HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T.VINOD KUMAR
Writ Petition No.24244 of 2020
ORDER: (Per Sri Justice M.S.Ramachandra Rao)
The petitioners were employees of A.P. State Police Housing
Corporation Limited, which had been constituted in the Composite
State of Andhra Pradesh. The 1st petitioner had retired from service as
Assistant General Manager on 31.07.2013 and the 2nd petitioner had
retired from service as a Senior Accountant on 28.02.2014.
The background facts
2. According to the petitioners, a Group Superannuation Scheme
for 182 regular employees of the above Corporation was approved by
it's Board of Directors in a meeting held on 14.12.2012. As per a
Resolution passed in the said Board meeting, 90% share of the
employer and 10% share of the employees, amounting to Rs.18.71
Crores was paid to the Life Insurance Corporation of India Ltd
(5th respondent) as a single payment for creation of Corpus Fund so as
to enable the beneficiaries to get retirement annuity benefit/pension @
40% of the last basic pay drawn on the date of their superannuation.
3. A Trust Deed was executed on 18.01.2013 by the A.P. State
Police Housing Corporation Limited, and five persons for
establishment of an irrevocable Trust by name 'A.P. State Police
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Housing Corporation Ltd Employees Group Superannuation Scheme
Trust'. This Trust was created to set up the contributory
superannuation/ annuity scheme called 'A.P. State Police Housing
Corporation Employees Superannuation Scheme' for providing
pension benefits; that the trustees shall enter into a scheme of
insurance with the 5th respondent, for which premiums payable would
be provided by contributions to be made by the said Corporation.
4. The Scheme came into effect on 1.1.2013 and contemplated
that the Corporation would make contributions to the trustees as
provided in the Rules and the trustees would utilize the same for
paying premium to the 5th respondent and the 5th respondent would
provide a Master Policy.
5. A Circular dt.25.02.2013 was issued to the employees of the
said Corporation informing about the formation of the 'A.P. State
Police Housing Corporation Superannuation Scheme Trust' as per the
decision taken by the Board of Directors in the meeting held on
14.12.2012, and asking each employee to give consent letter for
joining the Scheme as a beneficiary by paying 10% share by way of
recovery from his salary. As per the said circular, employees who
have rendered a minimum of 20 years of permanent service would be
eligible to be covered by the Scheme.
6. The 5th respondent also issued Master Policy
No.GSCAB517091 on 30.08.2013 after receiving proposal from the
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trustees of the above Trust for a Group Superannuation Policy for
providing pension benefits after receiving Rs.18,37,70,093/- being the
incremental investment of Group Superannuation Fund.
7. Under the terms of this policy, all permanent employees, who
are aged not less than 18 years and not more than 58 years, were made
eligible to receive benefits, and as soon as a member or beneficiary
becomes entitled to receive the benefits under the Scheme, the 4th
respondent would send the relevant particulars through the Trustees to
the 5th respondent and the Corporation would then pay to the grantees
appropriate benefits.
8. After the petitioners retired from service, the 5th respondent
fixed their pension benefits as per the pay scales which were existing
on the respective dates of their retirement as advised by the
Trustees.
9. There was also bifurcation of the Composite State of Andhra
Pradesh into the new State of Telangana and the Residuary State of
Andhra Pradesh w.e.f. 02.06.2014 under the A.P. Reorganization Act,
2014 (for short 'the Act').
10. Post bifurcation of the State, the State of Telangana
incorporated the Telangana State Police Housing Corporation Limited
(respondent No.1) and also constituted the Telangana State Police
Housing Corporation Limited Employees Group Superannuation
Scheme Trust (Respondent No.3).
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11. The A.P. State Police Housing Corporation Limited and the
A.P. State Police Housing Corporation Limited Employees Group
Superannuation Scheme Trust, however continued to exist with
activities restricted to the residuary State of A.P. They are
respondents 2 and 4 in the Writ Petition.
Petitioners are not allocated to either respondent no.1 or respondent no.2
Corporation
12. Admittedly, employees in service of the erstwhile A.P. State
Police Housing Corporation Limited, who were in service on
02.06.2014, the notified date under the Act, were allocated between
the Telangana State Police Housing Corporation Limited (respondent
No.1) and the A.P. State Police Housing Corporation Limited
(respondent No.2). This is clear from the certificate dt.27.2.2018
issued jointly by the Managing Directors of respondent no.s 1 and 2
filed by the respondent no.4.
13. But since both the petitioners had superannuated from the
erstwhile A.P. State Police Housing Corporation Limited prior to
02.06.2014, they were not allocated to either of these Corporations as
per the guidelines framed under the Act. It is not even the case of any
of the respondents that petitioners were allocated under the Act to
either respondent no.1 or respondent no.2 corporations after 2.6.2014.
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The bifurcation of the pooled fund contributed for operating the Group
Superannuation scheme
14. There is no dispute that in a meeting of the Trust held on
20.09.2018, it was resolved to bifurcate the pooled fund of
Rs.18,90,73,331/- available as on 31.03.2018 between respondents 1
and 2 as per the final employees bifurcation list dt.27.08.2018 and to
transfer the share of the respondent no.3 of Rs.4,52,27,845/- into the
new Telangana State Police Housing Corporation Group
Superannuation Scheme Policy. This indicates that there was no
agreement between respondent No.s 1 or 3 on the one hand and
respondent No.2 or 4 with regard to petitioners who had retired prior
to 02.06.2014 and who were not mentioned in the final employees
bifurcation list dt.27.08.2018.
The demerger of the erstwhile A.P. State Police Housing Corporation
Limited
15. There was also a demerger plan of the erstwhile A.P. State
Police Housing Corporation Limited dt.25.07.2015 bifurcating the
assets and liabilities between the respondents 1 and 2, which was also
approved by the Expert Committee headed by Smt.Sheela Bhide,
I.A.S (Retd.) constituted for division of assets and liabilities of
Government Corporations and Companies as per the Act and vide
G.O.Ms.no.1 dt.1.1.2021, the State of A.P. had approved the demerger
proposal w.r.t. assets and liabilities of the erstwhile A.P. State Police
Housing Corporation Ltd.
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16. Counsel for respondents did not bring to our notice any
provision of the demerger scheme making specific allocation of
liability in regard to pension/annuity obligations incurred in respect of
employees like the petitioners who retired prior to 02.06.2014,
specifically in regard to the annuity/pension payments under the
Common Group Superannuation Scheme Fund under the Master
Policy taken by the erstwhile Corporation with the 5th respondent.
Contentions of petitioners, respondents and their consideration
17. Petitioners contend that there was a revision of pay of the
petitioners with effect from 01.07.2013 by implementing Revised
Master Scales of Revised Pay Scales, 2015; that after petitioners'
retirement, the Pay Revision was affected, and the pay of the
petitioners was also revised w.e.f. 01.07.2013 as per the Revised Pay
Scales of 2015 with retrospective effect on 07.10.2015 and
09.05.2019 respectively notionally; as on 1.7.2013, they were both in
the service of the erstwhile A.P. State Police Housing Corporation
Limited; an so on the basis of the Revised Pay Scales-2015, there has
to be a revision of the annuity/pension payable to them, but the
respondents are not giving it to them, though they are giving it to
everybody else.
18. The 1st petitioner had made representations to the 2nd
respondent demanding for increased annuity on the basis of the
Revised Pay Scales-2015 in August, 2018, 15.10.2019, 05.12.2019,
09.01.2020, 06.02.2020, and the 2nd petitioner had made similar
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representations to 2nd respondent on 22.10.2019, 15.10.2019,
16.12.2020, 09.01.2020, 12.02.2020 and 09.03.2020.
The stand of 2nd respondent
19. The 2nd respondent rejected the request of both petitioners by
separate proceedings dt.12.05.2020 on the ground that their name was
not found in the employees approved List of Andhra Pradesh i.e., final
bifurcation approved by the Combined Board.
20. Petitioners contend that this stand of the 2nd respondent is
arbitrary and illegal, because their names would not be placed in the
final bifurcation list of employees because such list will consist only
of employees of the erstwhile A.P. State Police Housing Corporation
Limited who were in service as on 02.06.2014, the notified date under
the Act; and since the petitioners had retired prior to the said date,
their names cannot be expected to be found in the said list. They
contend that this stand of the 2nd respondent is arbitrary, illegal and
unsustainable.
Finding regarding the rejection of petitioners' case by 2nd respondent
21. We accept this plea of the petitioners because it is not the case
of the 2nd respondent that persons who had retired before 2.6.2014 had
been allocated between respondent no.s 1 and 2 and no evidence is
placed before us to show to which Corporation, the 1st respondent or
the 2nd respondent, were allocated. Because they were never allocated,
the respondent no.2 cannot wash it's hands off it's obligation to make
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payment of annuity/pension or increase thereof on the basis of
Revised Pay Scales, 2015, if it is otherwise liable.
The stand of the 1st respondent
22. The request of the 1st petitioner dt.30.05.2020 made to the 1st
respondent was replied by the said respondent on 24.09.2020 stating
that he belongs to APSPHCL i.e., the 2nd respondent, that his fund is
transferred to the 4th respondent, and that he is eligible for annuity as
per the Revised Pay Scales-2015.
23. It is also admitted in the counter affidavit filed by respondents
1 and 3 that representation dt.30.05.2020 of the petitioners made to
the 3rd respondent was forwarded to the Chairman of the 4th
respondent-Trust, that nativity of both petitioners lies in the State of
A.P., that the petitioners cannot come under the 3rd respondent, and
only the respondents 2 and 4 have to take care of the petitioners. It is
also contended that the 3rd respondent had transferred funds to the 4th
respondent as per the Expert Committee proposals, that petitioners
also stated that their names were there in the funds bifurcation list of
Andhra Pradesh, and so they belong to the Andhra Pradesh entity i.e.,
2nd respondent and 4th respondent only.
24. Petitioners contend that on the basis of their nativity (being
allegedly in the residuary State of Andhra Pradesh), it is not open to
respondent nos.1 and 3 to contend that they have no responsibility
towards payment of increased annuity to the petitioners on the basis of
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the Revised Pay Scales, 2015, and that such a stand violates Articles
14 and 16 (2) of the Constitution of India and also the provisions of
the Act.
Finding regarding the rejection of petitioners' case by 1st respondent
25. In Telangana Judges Association and another Vs. Union of
India and others1, the Supreme Court declared :
"51. The nativity for public employment runs counter to the
fundamental right guaranteed Under Article 16(2) except when it is
provided by a Parliamentary Law as per exception carved out in
Article 16(3) of the Constitution of India. No Parliamentary Law is
relied by the Petitioner, which provides residence as an eligibility
to the employment in Judicial Service. In Act, 2014, there is no
provision, which expressly provides for allotment of the State on
the basis of place of birth or residence. Sections 77, 78 and 79 of
the Act do not refer to allotment on the basis of place of birth.
When for entering into Judicial Service, no condition can be put
regarding residence of particular area for allocation of a State,
consequent to Act, 2014, nativity cannot be sole basis, as is
contended by the Petitioner. It is true that the State of Telangana
stand formed to realise the democratic aspirations of the people of
Telangana. We have noticed the Statement of Objects and Reasons
of Act, 2014, which clearly establish that the creation of a separate
State of Telangana is for the betterment of the social, economic,
political and other aspirations of the people of that region, which
contemplated allocation of separate State of Telangana. The entire
Statement of Objects and Reasons does not indicate that with
respect to public employment, nativity is to play a dominant role. It
is true that Judicial Officers belonging to Telangana territorial
area may have desired or expectation to choose or to opt for their
cadre in Telangana area, which is a legitimate aspiration, but
giving pre-dominance to nativity only is not spelled from any
statutory provision or scheme."(emphasis supplied)
1
2019 (1) ALD 7 (SC)
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26. In view of this decision, we agree with this plea of petitioners
that concept of nativity cannot come into play in regard to terms and
conditions of service of permanent employees of the erstwhile A.P.
State Police Housing Corporation Ltd since it violates Art.16(2) of the
Constitution of India which prohibits discrimination on the basis of
place of birth, descent or residence. So even the respondent no.s 1 and
3 cannot wash their hands off the possible liability for payment of
increased pension to petitioners who had retired prior to 2.6.2014 on
basis of Revised Pay Scales, 2015, if they are otherwise liable.
Other pleas of petitioners
27. Petitioners also contend that when respondent nos.1 and 3
stated that some employees who retired from service after petitioners
retired from service got the benefit under the Group Superannuation
Scheme under the Revised Pay Scales, 2015, the petitioners cannot be
discriminated against; that as per the Scheme and the Master policy
issued by the 5th respondent, the annuity has to be fixed on the basis of
last pay drawn by them, and once such last pay drawn came to be
revised w.e.f. 01.07.2013, and both petitioners were in service on that
day, they cannot be denied the benefit in increase in annuity. We find
considerable force in this submission too.
28. It is not in dispute that the composite A.P. State Police Housing
Corporation Limited Employees' Group Superannuation Scheme
Trust (which was not bifurcated at that time) had addressed a letter
dt.30.04.2016 to 5th respondent requesting for furnishing of details of
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the amounts that needs to be paid to the 5th respondent for the purpose
of implementation of Revised Pay Scales, 2015 to the employees
under the Group Superannuation Scheme, that to the said letter was
enclosed a list of employees which included the petitioners; that in
reply to the said letter, the 5th respondent wrote vide letter
dt.24.09.2016 stating that a sum of Rs.53.87 crores would be the total
value of the Trust that is to be created for implementing the Revised
Pay Scales, 2013 to the beneficiaries of Group Superannuation
Scheme; that as on 31.03.2016, only Rs.19.64 crores was available,
and so the 4th respondent should pay balance of Rs.34.23 crores for
conferring the benefit of the Revised Pay Scales, 2015 to the
beneficiaries of the Group Superannuation Scheme. However, the
said letter dt.24.09.2016 clarified that the said balance can be paid in
installments in a phased manner based on availability of funds.
29. It is also not disputed that the respondent nos.1 and 2 deposited
Rs.5 crores and Rs.5.25 crores respectively with 5th respondent, that
later the 2nd respondent deposited a further amount of Rs.3 crores with
the 5th respondent for the benefit of applying Revised Pay Scales,
2015 to be given to the beneficiaries of the Group Superannuation
Scheme.
30. Petitioners allege that basing on the said deposits made by
respondent nos.1 and 2 claim forms were forwarded to the 5th
respondent by the said respondents for revision of pension, and the 5th
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respondent had extended the benefit of Revised Pension Scales, 2015
for payment of annuity to all beneficiaries except the petitioners.
The effect of the A.P. Reorganisation Act, 2014 on the claims of the parties
31. We may point out that respondent nos.1 to 4 in their respective
counter-affidavits deliberately omitted to refer to the relevant
provisions of the Act which deal with division of assets and liabilities
or bifurcation of employees of Schedule IX Government Companies /
Corporations like the erstwhile A.P. State Police Housing Corporation
Ltd., which is at Serial No.12 in the said Schedule.
32. Under Sub-Section (2) of Section 68 of the Act, the assets,
rights and liabilities of such Corporations have to be apportioned
between the successor States in the manner provided in Section 53 of
the Act; and under proviso (b) to Sub-Section (1) of Section 53, assets
and liabilities of headquarters of such Corporations have to be
apportioned between the two successor States on the basis of
population ratio of 58.32 : 41.68. Under Section 82, there has to be
bifurcation of employees of such Corporation between the two
successor States on the basis of modalities determined by the
corporate body for their distribution.
33. The term 'successor States' occurring in Sec.53 and Sec.82 has
been interpreted to refer to the successor Corporations of both States
by a Division Bench of this Court in G. Rama Mohan Rao and
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another vs. Government of Andhra Pradesh and another2. The
Division Bench held that in para no.148 as under :
"148. When read in the context of Section 82, the modalities for
distributing the personnel between the two successor States can only
mean the modalities for distributing the personnel between the two
successor State Public Sector Undertakings, Corporations and
Autonomous Bodies, and not distribution of such personnel between the
respective State Governments, as that would make employees of such
Corporations / Undertakings / Companies, etc., employees of the
Governments of the two successors States. ... ... ..."
34. How such apportionment is to be made is the question to be
considered.
35. In regard to employees of the composite State of Andhra
Pradesh, who retired prior to 2.6.2014, the notified date under the Act
( on which date the composite State of Andhra Pradesh was bifurcated
into the new State of Telangana and the residuary State of Andhra
Pradesh), Sec.59 of the Act states:
" Sec.59. Pensions:
The liability of the existing State of Andhra Pradesh in respect of
pensions shall pass to, or be apportioned between, the successor
States of Andhra Pradesh and Telangana in accordance with the
provisions contained in the Eighth schedule to this Act."
36. Para 3 of the Eighth schedule says that the total representing
the liability of the existing State of Andhra Pradesh in respect of
pensions and other retirement benefits shall be apportioned between
the successor States on the basis of population ratio.
2
2017 (6) ALD 103 (DB)
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37. This provides a clue even with regard to apportionment of
pension liability of Schedule IX Corporations like the erstwhile A.P.
State Police Housing Corporation Ltd.
Finding re: liability of respondent no.s 1 and 2 to meet the liability towards
the claim for increased annuity made by petitioners
38. The liability to pay increased annuity/pension to the petitioners
is the liability of the 'headquarters' of the erstwhile A.P. State Police
Housing Corporation Ltd.
39. So such a liability of headquarters of such Corporations, as per
Proviso (b) to sub-Section (1) of Sec.53 of the Act, also has to be
apportioned between the two successor States on the basis of
population ratio of 58.32 : 41.68.
Re: maintainability of this writ Petition in this Court
40. A plea is raised in para 2 of the counter affidavit of 2nd
respondent that this Writ Petition seeking relief against the Andhra
Pradesh State Police Housing Corporation and the 4th respondent, its
entity, is not maintainable before this Court which is the High Court
of Judicature for the State of Telangana and that the petitioners can
only approach the Supreme Court of India.
41. We may point out that between 2.6.2014 (the notified date as
per the Act bifurcating the composite State of Andhra Pradesh into the
new State of Telangana and the residuary State of Andhra Pradesh)
and 1.1.2019 (the come into operation of the new High Court for the
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State of Andhra Pradesh at Amaravati), the High Court at Hyderabad
had functioned as a common High Court for both the new state of
Telangana and the residuary State of Andhra Pradesh. Only from
1.1.2019, the separate High Courts for the State of Telangana and the
State of Andhra Pradesh started functioning. This Writ Petition had
been filed in the year 2020.
42. We are unable to agree with the contention of the respondent
no.2 regarding it's plea of lack of jurisdiction of this High court to
entertain and decide this Writ Petition because both the petitioners had
retired from service prior to 02.06.2014, but their claim to payment of
increased annuity benefits is on the basis of Revised Pay Scales 2015
which were brought into effect from 01.07.2013; and their claim is
relatable to Clause 7(ii) of the Rules framed by the erstwhile A.P.
State Police Housing Corporation Limited which states:
"7. Scheme of Insurance:
(i) ....
(ii) If the Corporation with the sole intention of granting relief to the
Members/Beneficiaries who are already drawing the pension
decides to grant increases in the quantum of pension. Such
Members/Beneficiaries shall be eligible for the said increase in the
Pension from such date and in such form as may be allowed by the
Corporation. The future benefits if any arises on account of
Superannuation / Annuity Fund will be implied to this Scheme."
43. These Rules had been framed under the Trust Deed
dt.18.01.2013 creating the A.P. State Police Housing Corporation
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Employees Superannuation Scheme; and the right to get such increase
is under the Master Policy issued by the 5th respondent on 30.08.2013.
44. Demerger proposal was submitted by the Managing Directors
of the erstwhile A.P. State Police Housing Corporation only on
25.07.2015 and the same was approved vide G.O.Ms.No.1, Home
(Legal.II) Department, dt.01.01.2021.
45. In our opinion, the cause of action for institution of this Writ
Petition accrued to the petitioners when the Revision in Pay Scales
was done in 2015 with effect from 01.07.2013 within the territorial
jurisdiction of the common High Court at Hyderabad because the
registered office of the erstwhile A.P. State Police Housing
Corporation Limited was located in Hyderabad as on 02.06.2014 and
continued to be in Hyderabad even till 2018.
46. Therefore, under Article 226(2) of the Constitution of India,
this High Court, being the successor to the common High Court at
Hyderabad for both States, has territorial jurisdiction to deal with this
matter as the cause of action stood crystallized at that point of time
itself.
47. This is also the view expressed by a Full bench of this Court in
Letter dt.6.1.2019 sent by the Andhra Pradesh High Court
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Advocates' association rep. by it's President, Amaravathi, Guntur
District v. Union of India and others3.
48. The Full bench held:
"14. At this stage, it would be appropriate to deal with another issue
raised by Sri D.V. Sitharam Murthy, learned Senior Counsel. He
would argue that Section 40(3) of the Act of 2014 is in conflict with
Article 226(2) of the Constitution. It is his contention that after
constitution of the High Court for the present State of Andhra
Pradesh, the Hyderabad High Court has no jurisdiction over the
territories which fall within the jurisdiction of the newly constituted
High Court. He would therefore assert that even writ appeals which
come within the scope of Section 40(3) cannot be dealt with by the
Hyderabad High Court after constitution of a separate High Court
for the present State of Andhra Pradesh, as it no longer has
jurisdiction over cases which relate to the territories of that State, as
per Article 226(2).
15. Having given our earnest consideration to this aspect, we find the
argument to be specious.
16. Article 226(2) provides that the power to issue directions, orders
or writs under Article 226(1) may be exercised by any High Court
having jurisdiction over the territories within which the cause of
action, wholly or in part, arises. The argument of the learned Senior
Counsel loses sight of the fact that Section 40(3) of the Act of 2014
deals with cases which arise out of or pertain to cases which were
instituted before the common High Court at Hyderabad at a point of
time when it did have territorial jurisdiction over both the States and
on the strength of the cause of action which arose within its
territories. As the cause of action for institution of such cases arose
within the territorial jurisdiction of the common High Court at
Hyderabad, the jurisdiction to deal with those cases stood
crystallised at that point of time itself. Section 40(3) of the Act of
2014 merely retains and saves such jurisdiction in the Hyderabad
High Court to continue to deal with the limited matters arising out of
3
2019 (2) ALD 151 (FB)
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such cases which were dealt with by the common High Court at
Hyderabad at a point of time when it had jurisdiction to deal with
them, notwithstanding the constitution of a separate High Court for
the present State of Andhra Pradesh. There is therefore no conflict
between Section 40(3) of the Act of 2014 and Article 226(2) of the
Constitution.
17. As stated supra, all that Section 40(3) postulates is that the cause
of action in relation to the cases covered thereby would remain
frozen and the Hyderabad High Court would have sole jurisdiction to
entertain, hear and dispose of appeals, reviews and other cases
which are linked to the orders passed by the common High Court at
Hyderabad.
...
21. Needless to state, cases in which the State of Telangana figures
as a party would not come within the ambit of Section 40(3) of the
Act of 2014. Section 40 essentially deals with proceedings which are
liable to be transferred from the Hyderabad High Court to the newly
constituted High Court of Andhra Pradesh, owing to its jurisdiction
being denuded under Section 40(1) of the Act of 2014. All matters
involving the present State of Andhra Pradesh and also the State of
Telangana would necessarily have to be dealt with on a case to case
basis and cannot be brought within the sweep of the administrative
power vesting in the Chief Justice under the proviso to Section 40(3)
of the Act of 2014. This would include service disputes pertaining to
both the States and all such other matters where both the States
figure as parties.
22. Be in noted that all the learned Counsel appearing before us
broadly indicated their agreement with the opinion expressed by the
Bench on the above lines during the hearing.
23. On the above analysis, we hold that though the Hyderabad High
Court has the sole jurisdiction to continue to deal with the writ
appeals on hand and all such other matters which would come within
the ambit of Section 40(3) of the Act of 2014, it would be well within
the administrative power of the Chief Justice of the Hyderabad High
Court under the proviso to Section 40(3) of the Act of 2014 and given
the circumstances, it would perhaps be advisable, to transfer these
writ appeals and all such cases akin thereto, including contempt
cases, review petitions and applications seeking leave to approach
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the Supreme Court in relation to the orders passed by the erstwhile
common High Court at Hyderabad, to the newly constituted High
Court for the State of Andhra Pradesh at Amaravathi."
(emphasis supplied)
We respectfully follow the said decision and hold that since the
cause of action to file this Writ Petition accrued to the petitioners
when the Revision in Pay Scales was done in 2015 with effect from
01.07.2013 within the territorial jurisdiction of the common High
Court at Hyderabad because the registered office of the erstwhile A.P.
State Police Housing Corporation Limited was located in Hyderabad
as on 02.06.2014 and continued to be in Hyderabad even till 2018 ;
and this happened prior to 1.1.2019, when the separate High Court for
the State of Andhra Pradesh was constituted at Amaravathi; and since
we have given a finding that both respondents 1 and 2 have
responsibility and liability to meet the claim of the petitioners in the
ratio 41.68: 58.32, we hold that this High Court alone has jurisdiction
to entertain this Writ Petition.
Re: plea of respondent no.2 about it's non-liability to do anything as regards
the petitioners because they retired prior to 2.6.2014
49. In para 6 of his counter affidavit, the 2nd respondent stated that
as per the norms of the Scheme, once an employee retires, his
application is forwarded to the 5th respondent for release of
superannuation benefits and the fund automatically detaches from the
common fund and the superannuation benefit will be paid by creating
a Master Policy on his/her name with the 5th respondent; and as both
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petitioners retired before 02.06.2014, they were in the common fund
as on 02.06.2014; and they do not have any right to ask from and out
of the existing fund.
50. No provision of the Scheme/Master Policy is cited by the 2nd
respondent in support of this plea.
51. Moreover this plea runs contrary to Clause 7(ii) of the Rules
referred to above which clearly contemplate increase in quantum of
pension under the Master Policy.
52. Having given this benefit to everybody who was in service as
on 02.06.2014 but who retired thereafter, the petitioners alone cannot
be discriminated against on the pretext that they retired prior to
02.06.2014. In the event any funds are payable to confer benefit of
increased annuity on the petitioners, then such liability is to be shared
both by respondent No.s 1 and 2 in the population ratio of 41.68 :
58.32.
53. It was not open to respondents 1 and 2 to contend that they
topped up the Group Superannuation Scheme as per Revised Pay
Scales of 2015 for only employees who were in service on 02.06.2014
to extend superannuation annuity benefit as per the said Revised Pay
Scales.
54. They ought to have also topped up and paid to 5th respondent
any further amounts payable for extending the increased
superannuation annuity benefits as per Revised Pay Scales 2015 to the
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petitioners as well notwithstanding the fact that they retired prior to
02.06.2014. More so since the 1st respondent had even issued Letter
dt.24.09.2020 to the 2nd respondent that the 1st petitioner is eligible for
annuity as per Revised Pay Scales 2015.
55. Even the 2nd respondent admits that the Group Superannuation
Scheme is a welfare scheme which is in the nature of bonus/incentive
to the employee to boost their morale for improvement of the output
of the Corporation. It is undoubtedly a service benefit akin to pension;
and it is devised as a retirement benefit not payable by the
Corporation but payable through the 5th respondent through an
insurance policy offered by the latter.
56. When the petitioners are admittedly covered by the Scheme and
the Rules made thereunder which contemplate under Clause 7(ii) even
an increase in quantum of pension at the discretion of the Corporation,
the respondents cannot play favorites by preferring to confer benefit
only on retirees post 02.06.2014 and excluding persons like the
petitioners who retired prior to 02.06.2014.
57. The Supreme Court in D.S.Nakara Vs. Union of India4 held
that Article 14 no doubt permits reasonable classification for the
purpose of legislation, but to pass the test of permissible classification,
two conditions must be fulfilled i.e. (i) that the classification must be
founded on a intelligible differentia which distinguishes persons or
things that are grouped together from those that are left out of the
AIR 1983 SC 130
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group; and (ii) that the differentia must have a rational relation to the
objects sought to be achieved by the statute in question. It
emphasized that there ought to be a nexus i.e. causal connection
between the basis of classification and the object of the statute
under consideration.
It held that the burden of proof is on the State and it would
have to affirmatively satisfy the Court that the twin tests have
been satisfied; and that it can only be satisfied if the State
establishes not only the rational principle on which the
classification is founded but correlates it to the objects sought to
be achieved.
It declared that pension is a right and its payment does not
depend upon the discretion of the Government, that it is not a bounty
or a gratuitous payment depending upon the sweet will or the grace of
the employer; that it is earned by rendering long and efficient service
and is in the nature of a deferred portion of the compensation for the
service rendered; that persons holding identical posts while in service
cannot be treated differently in the matter of their pay merely because
they belong to different departments and afortiorari even after their
retirement. If pensioners form a class, their computation cannot
be by different formula affording unequal treatment solely on the
ground that some retired earlier and some retired later.
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It declared that the impugned memoranda issued by the
Government did not spell out the raison d'etre for liberalizing the
pension formula; and that it did not find justification for arbitrarily
selecting the criteria for eligibility for the benefits of the scheme
dividing the pensioners all of whom would be retirees but falling on
one or other side of the specified date. It held:
".......If the State considered it necessary to liberalise the pension
scheme, we find no rational principle behind it for granting these
benefits only to those who retired subsequent to that date
simultaneously denying the same to those who retired prior to
that date. If the liberalisation was considered necessary for
augmenting social security in old age to government servants
then those who, retired earlier cannot be worst off than those who
retire later. Therefore, this division which classified 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. To illustrate, take two persons, one
retired just a day prior and another a day just succeeding the
specified date. Both were in the same pay bracket, the average
emolument was the same and both had put in equal number of
years of service. How does a fortuitous circumstance of retiring a
day earlier or a day later will permit totally unequal treatment in
the matter of pension? One retiring a day earlier will have to be
subject to ceiling of Rs.8100 p.a. and average emolument to be
worked out on 36 months' salary while the other will have a
ceiling of Rs.12,000 p.a. and average emolument will be
computed on the basis of last 10 months' average. The artificial
division stares into face and is unrelated to any principle and
whatever principle, if there be any, has absolutely no nexus to the
objects sought to be achieved by liberalising the pension scheme.
In fact this arbitrary division has not only no nexus to the
liberalised pension scheme but it is counter-productive and runs
counter to the whole gamut of pension scheme. The equal
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treatment guaranteed in Article 14 is wholly violated inasmuch as
the pension rules being statutory in character, since the specified
date, the rules accord differential and discriminatory treatment to
equals in the matter of commutation of pension. A 48 hours'
difference in matter of retirement would have a traumatic effect.
Division is thus both arbitrary and unprincipled. Therefore, the
classification does not stand the test of Article 14"
58. This principle was reiterated in Kallakkurichi Taluk Retired
Officials Assn. v. State of T.N5. in the following terms:
"33. ... ...A valid classification is based on a just objective.
The result to be achieved by the just objective presupposes, the
choice of some for differential consideration/treatment, over
others. A classification to be valid must necessarily satisfy two
tests. Firstly, the distinguishing rationale has to be based on a
just objective. And secondly, the choice of differentiating one set
of persons from another, must have a reasonable nexus to the
objective sought to be achieved. Legalistically, the test for a
valid classification may be summarised as a distinction based on
a classification founded on an intelligible differentia, which has
a rational relationship with the object sought to be achieved.
Whenever a cut-off date (as in the present controversy) is fixed
to categorise one set of pensioners for favourable consideration
over others, the twin test for valid classification (or valid
discrimination) must necessarily be satisfied."
59. We hold that, in the instant case, there is no just objective
shown by the respondents to exclude the petitioners from getting
increased annuity/pension when the Revised Pay Scales, 2015 came
into effect from 1.7.2013, and both petitioners were in service on the
said day and admittedly they were covered by the Master policy taken
by the erstwhile A.P. State Police Housing Corporation Ltd; and no
(2013) 2 SCC 772
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nexus/rationale is shown to exclude them from the said benefit. The
fixing of cut off date as 2.6.2014 for conferring the benefit of
increased annuity/pension does not pass the test of valid classification
prescribed in the above decisions. That too, for the sole purpose of
depriving only these two petitioners out of 182 persons who are
covered by the said Master Policy issued by the 5th respondent. It
cannot be said that any small extra expenditure to be incurred by the
respondent nos.1 and 2 to be paid to the 5th respondent for extending
the benefit of increased annuity / pension to the petitioners, would be
a valid consideration to deny them this benefit.
60. So, merely because the A.P. Reorganisation Act, 2014 came
into operation bifurcating the composite State of Andhra Pradesh into
the new State of Telangana and the residuary State of Andhra Pradesh
from that date, the said date could not have been adopted for denying
the petitioners the benefit of increased annuity/pension.
61. A feeble plea is raised by counsel for respondent no. 2 that
fixing of the cut off date is a 'policy decision' and it is immune from
challenge.
62. This plea is without any basis because the Supreme Court had,
time and again, held that courts do not lack jurisdiction in conducting
a judicial review of executive policy. In DDA v. Joint Action
Committee, Allottee of SFS Flats6, the Supreme Court declared:
(2008) 2 SCC 672, at page 697
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" 64. An executive order termed as a policy decision is not beyond
the pale of judicial review. Whereas the superior courts may not
interfere with the nitty-gritty of the policy, or substitute one by the
other but it will not be correct to contend that the court shall lay its
judicial hands off, when a plea is raised that the impugned decision
is a policy decision. Interference therewith on the part of the
superior court would not be without jurisdiction as it is subject to
judicial review.
65. Broadly, a policy decision is subject to judicial review on the
following grounds:
(a) if it is unconstitutional;
(b) if it is dehors the provisions of the Act and the regulations;
(c) if the delegatee has acted beyond its power of delegation;
(d) if the executive policy is contrary to the statutory or a larger
policy."
This was also recently reiterated in the order dt.31.5.2021
passed by a 3 Judge Bench of the Supreme Court in RE: Distribution
of Essential Supplies and Services during Pandemic7 wherein the
Court declared:
"14. ... Our Constitution does not envisage courts to be silent
spectators when constitutional rights of the citizens are infringed by
executive policies...."
63. In our considered opinion, the so-called Policy adopted by the
respondents is violative of Article 14 of the Constitution of India and
is unconstitutional. It cannot therefore be sustained.
64. Accordingly, the Writ Petition is allowed; the action of the
respondent in not revising annuity payable to the petitioners as per
Revised Pay Scales, 2015 is declared as arbitrary, illegal and violative
Suo Motu Writ Petition (Civil) No.3 of 2021
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of Articles 14 and 16 of the Constitution of India; the respondent
nos.1 and 2 are directed to pay within four (04)weeks from today in
the ratio 41.68 : 58.32 to the 5th respondent any further sums
necessary to be paid to it for the purpose of conferring the benefit of
increased annuity / pension on the petitioners under the Group
Superannuation Scheme covered by the Master Policy taken by them
with the 5th respondent when the A.P. State Police Housing
Corporation was existing in the composite State of Andhra Pradesh;
three (03) weeks after receipt of such payment, the 5th respondent
shall make payment of the increased annuity / pension to the
petitioners in the same manner as is being done to the other
beneficiaries of the said superannuation scheme. No order as to costs.
65. As a sequel, miscellaneous petitions pending if any in this Writ
Petition, shall stand closed.
____________________________
M.S.RAMACHANDRA RAO, J
___________________
T.VINOD KUMAR, J
15th June, 2021
Note : LR copy to be marked : YES
B/o.
Gra / Svv / Ndr
