T. Yakaiah vs The State Of Telangana,
2025 Latest Caselaw 4757 Tel

Telangana High Court

T. Yakaiah vs The State Of Telangana, on 11 April, 2025

      THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL
                           AND
           THE HON'BLE SMT JUSTICE RENUKA YARA

             WRIT APPEAL Nos.209, 170 and 210 of 2025


COMMON JUDGMENT:

(Per the Hon'ble the Acting Chief Justice Sujoy Paul)

These intra-Court Appeals take exception to the common

order passed in W.P.Nos.14315, 15944 and 14641 of 2021,

dated 20.12.2024 decided along with other matters.

2. The Writ Petitions were filed by retired employees assailing

G.O.Ms.Nos.55 and 56, dated 11.06.2021. The main grievance of

the petitioners/appellants is that the respondents/State while

issuing the said G.Os. made it clear that the revised consolidated

basic pension shall come into force with effect from 01.07.2018

notionally and monetary benefits shall be allowed w.e.f.

01.04.2020. Thus, no difference of Retirement Gratuity/

Encashment of Earned Leave shall be payable to the retired

employees who retired between 01.07.2018 and 31.03.2020.

Contention of the appellants:

3. The bone of contention of the learned counsel for the

appellants is that the pensioners belong to one homogeneous

class. The respondents/State by putting the said condition and

cut-off date divided a homogeneous class and made an attempt to

HACJ (SP,J) & RY,J Wa_209_2025 & batch

create a class within the class. This hits Article 14 of the

Constitution and cannot be treated to be a valid classification.

There is no rationale behind the same, neither there exist any

object sought to be achieved.

4. Learned counsel for the appellants, by taking this Court to

the order of the learned Single Judge in the aforesaid Writ

Petitions, urged that after considering the various judgments of

the Supreme Court, the learned single Judge came to hold that

the judgments are indeed applicable, but opined that the

prescription of cut-off date for not extending actual monetary

benefits is not bad in law.

5. Criticizing the aforesaid findings, learned counsel for the

appellants urged that the curtains are finally drawn on this issue

by the judgments of the Supreme Court in the case of All Manipur

Pensioners Association v. State of Manipur 1 and Maharashtra

State Financial Corporation Ex-Employees Association v.

State of Maharashtra 2. In view of these authoritative

pronouncements, wherein previous Constitution Bench judgment

(2020) 14 Supreme Court Cases 625

(2023) 11 Supreme Court Cases 186

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of the Supreme Court in DS Nakara v. Union of India 3 was

considered, learned Single Judge has certainly erred in not

interfering with the offending portion of G.Os and erred in

declining the relief.

6. Learned counsel for the appellants, by placing reliance on

Article 366 (17) of the Constitution, submits that definition of

pension is wide enough to include gratuity and retiral dues. In

this view of the matter, the learned single Judge was not justified

in not interfering with the impugned G.Os.

Contention of the State:

7. Sri S. Rahul Reddy, learned Special Government Pleader,

representing the State on the other hand supported the impugned

order passed by the learned Single Judge and urged that the

learned Single Judge has considered the judgments cited by

present appellants in the aforesaid paragraphs as well as the other

judgments of the Supreme Court and rightly came to hold that the

recommendation of Pay Commission is not as such binding on the

Government and financial constraints is one of the relevant

considerations for prescribing a cut-off date. Thus, on that

relevant consideration if Government has decided not to extend

1983 (1) SCC 305

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the actual benefit for a particular period and prescribed a cut-off

date, it cannot be said to be unconstitutional in nature.

8. To buttress the aforesaid contention, reliance is placed on

the judgment of the Supreme Court in the State of Andhra

Pradesh v. A.P. Pensioners' Association 4. It is submitted that

almost in similar factual background, a matter travelled from this

Court to Supreme Court and the Supreme Court in clear terms

opined that financial constraints can be a ground to take a

decision prescribing a cut-off date. The next reliance is placed on

the judgment of Supreme Court in State of Tripura v. Anjana

Bhattacharjee 5. On the strength of this judgment, Sri S. Rahul

Reddy submits that after considering a catena of judgments, the

Supreme Court made it clear that financial burden can lead to

fixing of a cut-off date, which cannot be said to be

unconstitutional in nature. Thus, the learned Single Judge has

taken a plausible view which does not warrant any interference by

this Court.

9. The parties confined their arguments to the extent indicated

above.

(2005) 13 SCC 161

2022 SCC OnLine SC 1071

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10. We have heard the parties at length and perused the record.

Findings:-

11. Before dealing with rival contentions, it is apposite to

reproduce the relevant portion of G.O.Ms.No.55 and 56, dated

11.06.2021, which reads as under:

G.O.Ms.No.55:

"4. a) The existing Pension/Family Pension, in respect of those retired or died while in service prior to 01.07.2018 and also in the case of Family Pensioners who are in receipt of Family Pension as on 1.7.2018 be consolidated, by adding fitment benefit of 30% on the Basic Pension/Basic Family Pension and by merging the Dearness Relief @ 30.392% admissible as on 01.07.2018. The same shall be known as Revised Consolidated Basic Pension/Revised Consolidated Basic Family Pension.

b) This Revised Consolidated Basic Pension or Revised Consolidated Basic Family Pension shall come into force with effect from 01.07.2018 notionally and the monetary benefit be allowed with effect from 01.04.2020.

c) The Consolidated Pension/Family Pension shall be paid from the month of June, 2021 payable in the month of July, 2021.

d) The arrears on account of Consolidation of Pension/Family Pension /Financial Assistance for the period from 01.04.2020 to 31.05.2021, will be paid in 36 equal monthly instalments.

e) No difference on Retirement Gratuity/Encashment of Earned Leave shall be allowed in case of employees who retired between 01.07.2018 and 31.03.2020.

5. While fixing the consolidated Basic Pension/Basic Family Pension as above, part of a rupee, if any arrived, should be rounded off to the next higher rupee.

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6. While consolidating the Pension, the additional quantum of pension paid to Pensioners on attaining specified ages, which is shown distinctly, should be ignored.

7. In the case of employees who retired from service on or after 01.07.2018, the pension shall be calculated on the pay in Revised Pay Scales, 2020 only.

8.1 The employees who retired between 01.07.2018 and 31.03.2020 are eligible for revision of their pay in the Revised Pay Scales, 2020 notionally as per the orders issued in the G.O. sixth read above. As such, the pensions of these employees have to be revised notionally based on the revised pay in Revised Pay Scales, 2020 and monetary benefit should be allowed from 01.04.2020 only.

8.2 No difference on Retirement Gratuity/Encashment of Earned Leave shall be allowed to the Pensioners on the pension notionally fixed as above."

G.O.Ms.No.56:

"6. The arrears on account of revision of Gratuity from 01.04.2020 to 31.05.2021, will be paid in thirty six (36) equal monthly installments."

(Emphasis Supplied)

12. As noticed above, learned counsel for the appellants placed

reliance on two judgments of Supreme Court in All Manipur

Pensioners Association and Maharashtra State Financial

Corporation Ex-Employees Association (both supra). The

Constitution Bench judgment of Supreme Court in DS Nakara

(supra) was also relied upon.

13. In All Manipur Pensioners Association (supra), the

Supreme Court considered the decision and action of creating two

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classes viz., one who retired pre-1996 and others who retired post-

1996 for the purpose of grant of revised pension. The Supreme

Court opined that such classification has no nexus with the object

and purpose of grant of benefit of revised pension. It is further

opined that all pensioners form one class who are entitled to

pension as per Article 14 of the Constitution. Accordingly, the

cut-off date in this backdrop was held to be improper.

14. A careful reading of the above judgment also shows that in

no uncertain terms in para 8.2 it was poignantly held that

whenever a new benefit is granted or new scheme is introduced,

State may provide a cut-off date taking into account its financial

resources.

15. In Maharashtra State Financial Corporation Ex-

Employees Association (supra), the Supreme Court again

considered that the employees who retired prior to 29.03.2010

and subsequent thereto were performing same duties. Since there

was no valid distinction between those who retired before

29.03.2010 and those who continued thereafter, the Supreme

Court held that classification is improper and the appeal was

accordingly allowed. Pertinently, in this case, the Supreme Court

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had no occasion to consider the aspect of financial constraints of

the State Government.

16. In the case of A.P. Pensioners' Association, GO(P) No.114,

dated 11.08.1999, was subject matter of challenge. The offending

clauses 9 and 16 are reproduced for ready reference.

"9. Persons who retired between 1-7-1998 and 31-3-1999 shall also be eligible for the Revised Pay Scales, 1999. The notional pay fixed in the Revised Pay Scales, 1999 in accordance with these orders, shall in such cases count towards pensionary benefits.

16. Separate orders are also being issued in regard to the recommendations of the Pay Revision Commission on pension and other terminal benefits."

17. The State also issued GO(P) No.15 on 16.09.1999, wherein it

was categorically stated that revised consolidated pension shall

come into force with effect from 01.07.1998 with monetary

benefits payable from 01.04.1999. G.O.Ms.No.158 was issued on

16.09.1999 enhancing the limit of commutation of pension under

Rules to 40% of pension sanctioned to the pensioners with effect

from 01.04.1999. Such enhancement was made applicable only

in relation to the persons who retired or died on or after

01.04.1999. On 23.12.1999, G.O.Ms.No.206 was issued and all

these cut-off dates and aspect of financial constraints became

subject matter of consideration before the Supreme Court. The

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Supreme Court in A.P. Pensioners' Association (supra)

considered its previous judgment in State Government

Pensioners' Association v. State of Andhra Pradesh 6 and

opined as under:

"32. In State Govt. Pensioners' Assn. v. State of A.P. [(1986) 3 SCC 501 : 1986 SCC (L&S) 676] this Court accepted that when the revised scheme became operative from 1-4-1978, non-payment of gratuity under the Revised Pension Rules, 1980 was not payable to those pensioners who retired prior thereto stating that at the time of retirement they were governed by the then existing rules and their gratuity was calculated on that basis. The Court rejected the contention that the same was ultra vires Article 14 of the Constitution."

(Emphasis Supplied)

18. After detailed analysis, the Supreme Court made it clear that

financial implication can be a relevant consideration to determine

the cut-off date. The relevant paragraph reads as under:

"39. It is, therefore, beyond any shadow of doubt that the financial implication is a relevant criterion for the State Government to determine as to what benefits can be granted pursuant to or in furtherance of the recommendations made by PRC. PRC also said that while revision of pay shall take effect from 1-7-1998, the monetary benefit would be payable only from 1-4-1999. If monetary benefit was payable only from 1-4-1999, all rights to get the benefits computed on the basis of the revised scale of pay would only be for the purpose of payment of pay with effect from 1-4-1999 or payment of the recurring amount of pension with effect from that date."

(Emphasis Supplied)

(1986) 3 SCC 501

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19. A similar view is taken in the case of Anjana Bhattacharjee

(supra), which reads as under:

"19. Whether the financial crunch/financial constraint due to additional financial burden can be a valid ground to fix a cut- off date for the purpose of granting the actual benefit of revision of pension/pay has been dealt with and/or considered by this Court in Amar Nath Goyal [State of Punjab v. Amar Nath Goyal, (2005) 6 SCC 754 : 2005 SCC (L&S) 910] . In the aforesaid decision, it is observed and held by this Court that financial constraint can be a valid ground for fixation of cut-off date for grant of benefit of increased quantum of death-cum-retirement gratuity. In paras 26, 32 and 33 of the said judgment [State of Punjab v. Amar Nath Goyal, (2005) 6 SCC 754 : 2005 SCC (L&S) 910], it is observed and held as under : (SCC pp. 763 & 765)

"26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1-4-1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level.

***

32. The importance of considering financial implications, while providing benefits for employees, has been noted by this Court in numerous judgments including the following two cases. In State of Rajasthan v. Amrit Lal Gandhi [State of Rajasthan v. Amrit Lal Gandhi, (1997) 2 SCC 342 : 1997 SCC (L&S) 512] this Court went so as far as to note that:

'17. ... Financial impact of making the Regulations retrospective can be the sole consideration while fixing a cut-off date. In our opinion, it cannot be said that this cut-off date was fixed arbitrarily or without any reason. The High Court was clearly in error in allowing the writ petitions and substituting the date of 1-1-1986 for 1-1- 1990.' [Id, SCC p. 348, para 17 (emphasis supplied).]

33. More recently, in Veerasamy [T.N. SEB v. R. Veerasamy, (1999) 3 SCC 414 : 1999 SCC (L&S) 717] this Court observed that, financial constraints could be a valid ground for introducing a cut-off date while implementing a pension scheme on a revised basis [Id, SCC p. 421, para 15] . In that case, the pension scheme

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applied differently to persons who had retired from service before 1-7-1986, and those who were in employment on the said date. It was held that they could not be treated alike as they did not belong to one class and they formed separate classes."

20. In the aforesaid decision this Court after considering the earlier decisions of this Court in State of Punjab v. Boota Singh [State of Punjab v. Boota Singh, (2000) 3 SCC 733 : 2000 SCC (L&S) 435] and State of Punjab v. J.L. Gupta [State of Punjab v. J.L. Gupta, (2000) 3 SCC 736 : 2000 SCC (L&S) 437], it is specifically observed and held that for the grant of additional benefit, which had financial implications, the prescription of a specific future date for conferment of additional benefit, could not be considered arbitrary.

21. In the subsequent decision in Bihar Pensioners Samaj [State of Bihar v. Bihar Pensioners Samaj, (2006) 5 SCC 65 : 2006 SCC (L&S) 913] , the decision in Amar Nath Goyal [State of Punjab v. Amar Nath Goyal, (2005) 6 SCC 754 :

2005 SCC (L&S) 910] is followed and it is observed and held that financial constraints could be a valid ground for introducing a cut-off date while introducing a pension scheme on revised basis. It is further observed and held by this Court in the aforesaid decision that fixing of a cut-off date for granting of benefits is well within the powers of the Government as long as the reasons therefor are not arbitrary and are based on some rational consideration."

(Emphasis Supplied)

20. At the cost of repetition, in the case of All Manipur

Pensioners Association (supra) on which reliance is placed by

the learned counsel for the appellants, the Supreme Court opined

that the financial constraints can be a valid consideration for

prescribing a cut-off date. In other cases cited by the State, it is

clearly held that financial constraints can be a reason for

prescribing a cut-off date.

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21. In the instant case, learned Single Judge considered the

judgment relied upon by the parties and came to the conclusion

as under:

"In the instant case, for the purpose of achieving the object of extending the revised pay scales/pension to its serving/retired employees, duly balancing the financial implications on the State Exchequer, the Government has prescribed a cut-off date, for extending the monetary benefits arising on account of enhanced Encashment of Leave and Gratuity, to the petitioners and other similarly situated persons, which admittedly do not have any impact on the pension being drawn by them and it also cannot be said that the said action of the respondents is against the object/purpose of revision of payscales and pension. Therefore, the judgments relied by the petitioners are distinguishable on facts and no avail to them."

(Emphasis Supplied)

22. If the findings given by learned single Judge are tested on

the anvil of principles laid down in the case of All Manipur

Pensioners Association (supra), A.P. Pensioners' Association

(supra) and Anjana Bhattacharjee (supra), it can be safely held

that the findings given by the learned single Judge are based on

the ratio decidendi of the said cases. The learned single Judge has

applied a relevant consideration i.e., financial constraints on the

State exchequer. Thus, even assuming for the sake of argument

that persons retired before a particular cut-off date and after a

cut-off date belong to a homogenous class, the fact remains that

decision to grant the benefit from a cut-off date based on financial

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constraints is founded upon a valid consideration. No amount of

argument is advanced to attack the prescription of cut-off date

based on financial constraints. Thus, in our view, the learned

single Judge has taken a plausible view which warrants no

interference.

23. The Writ Appeals fail and are hereby dismissed. There shall

be no order as to costs. Miscellaneous petitions pending, if any,

shall stand closed.

_________________________ SUJOY PAUL, ACJ

__________________________ RENUKA YARA, J

Date: 11.04.2025 GVR/TJMR