Life Insurance Corporation of India v. Krishna Murarilal Asthana & Ors.

(ii) all allowances counted for the purpose of mflking contribution to the Provident Fund and for the payment ofdeamess allowance; and

(iii) fixed personal allowance not exceedmg the last increment inthescale ofpay; and

(iv) dearn^rfallowane©^^^^^ Index No.1148 in the AP"" Indi|jfverage C6iisjaidiertfeice Index for Indus|fal»tersa xxxx^. "W (pM'-I^sion" inc pasic pensife and the ad^ional pension iA||»pn Chapter VI S ruli;" Mfil "35. ^aytf're||ef^.f?lmployees who retired but before the 31st day of*Jul5^ia8iy»sjeifesiSn and additional pension will be updfflla"»'as==pef'^e formula given in Appendix-III. (2)In the case ofan employee retiring in accordance with the provisions of the Service Rules or ofthe Staff Regulations after completing aqualifying service of not less than thirty three years the amount ofbasic pension shall be calculated at fifty percent, ofthe average emoluments. (3) (a) Additional pension shall be fifty per cent, of the allowances drawn by an employee during the last ten months ofhis service; WP(C)184/2007& Connected matters these Page 16 of90 2017:DHC:8167-DB.-j:- (b) no deamess relief shall be paid on the amount of additional pension. Explanation ~ For the purpose of this sub-rule "allowances" means allowances which are admissible to the extent counted for the following purposes only, namely:-

(i) making contributions to the Provident Fund;

(iii) payment of gratuity; and

(iv) re-fixation of salary on promotion.

(4) Pension as compvite^gbpngrtht^gregate ofsub-rules (2) and (3) above sM^b"^.|ubjectpto to pension as specified in t b J iM/Mk _. (5) An empt^^whq^fe^pgg^th a®^sfc portion ofhis p,^hsiQn%s perW^ro^ao^^E'rule 4lliofttfese rules pension ^ ^ shall re&j^ftnlythe S (6) (afSn the case ofan If a qu^ifying service compibting a qualifyinglpMcekii 5v._i- _11 1elision, monthiy?> pension admissibly amountofp|M^?|iall^lesstl^^e amomWf pension speciMg&m Jtiringbefore completing years, bi® after |bn years, the amount of:ii»nat;e?t©^ihe^-^ainount oflpension AS)'jan(d'In-i.no'^case the (b) Notwithstandinf'M^hihgiseoHlained in these rules, the amount of invalid pension shall not be less than the ordinary rate offamily pensionwhich wouldhave been payableto his family in the event ofhis death while in service. (7) The amount ofpension finally determined under this rule 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."

15. Clause (o) to Rule 2 defining the term pension was amended vide Government notification dated 14^*^ May, 1999, to read:- WP(C)184/2007 & Connected matters Page 17of90 2017:DHC:8167-DB m (o) "pay" includes,-

(i) the basic pay including the stagnation increments if any; and

(ii) all allowances counted for the purpose of making contribution to the Provident Fund and for the payment of deamess allowance; and

(iii) fixed personal allowance not exceeding the last increment in the scale ofpay; ifany, and

(iv) in a case covered by the proviso to clause (j) or where the salary and other conditions have been fixed with the approval of the Central Govt., the deamess allowance calgulatM^^pto^ in the All India Aypa|e^o|p®ie3^P®!^^ Industrial workerp:ffithp§fe'6s i%p^l00"ippli|'^9i^^ basicpay draw]^%«tim in the^^lfeq^^ notifiefc^the Central Go#^.io^the po if PrpvidS that for|||| emoluments, as deL_ respect of emp|^|e^e4[Mose ten months',! before retirement ' scales and for%he pay as per deamesstlt^a^^p|oith^i|jI^M^Mhtherevised basic pay is peg|e|^gM^ggJliis. Clause (j) to Rule 2 which defines the expression "employee" referred to in clause(iv) ofclause(o) reads:- "G) "employee" means any person employed in the service of the Coiporation on full-time work on permanent basis and who opts and is govemed bythese mles but does not include an employee retired before the commencement ofthese mles and who is drawing pension from the Pension Fund of the Oriental Government Security Life Assurance Company WP(C)184/2007&Connectedmatters Page18 of90 2017:DHC:8167-DB.?2r Limited in accordance with sub-regulation (2) of regulation 76 of the Life Insurance Corporation of India (Staff) Regulations, 1960, made under the Act;"

16. Rule 38 which relates to determination of the period of ten months for average emoluments, reads

17. Rule 37 relates to deamess reliefand reads as under: "Dearness Relief - (1) Deamess relief shall be granted on basic pension or family pension or invalid pension or on compassionate allowance in accordance with the rates specified in appendixIV. WP(C)184/2007&Connectedmatters 29of90 (2) Deamess relief shall be allowed on fiill basicpension even after commutation."

18. Appendix IVreferred to inRules 37 is asunder: "Dearness relief on basic pension shall be as under: (1) In the case of employees who retired on or after the 1st day of January, 1986, but before the 1st day of November, 1993, deamess relief shall be payable for every rise or be recoyexaljle^Jor, every fall, as that case may be ofevei^^^^^^"^er^^®^pjnts in the quarterly average oLth^All^l^d|aMvera|i|<3fhs®^ Index, 4>J ^veraggpns^ for Induiffid ipMersj^i^ seriies^^^^^lOO. Such increa,rfojj4ecrea^^m|a^e^elieffo^p^eM^said four poin^l^pfbecale^^^^^^^innergi^^^^w: |Scale of bSiibI fpension per nK^tjllS pM rate of dearness •E^Ug|;as a percentage of ^"a'sic^ension (i) £0.i6f^Sif:Cer|^i^'

(ii) Rs.2,000/-^"''^^^^ai^ roM|P^rof Rs.1250 5lSsi0f5^ per cent ofbasic pension in excess of Rs.1250/-

(iii) Rs.2001/- to

0.67 per cent of Rs.l250/plus 0.55 per cent of the difference between Rs.2000/- and Rs.l250/plus 0.33 per cent of basic pension in excess of Rs.2000/-

(iv) aboveRs.2130/- 0.67 per cent of Rs.l250/plus 0.55 per cent of the

WP(C)184/2007 & Connected matters Page 20 of90 •n' 2017:DHC:8167-DB difference between Rs.2000/- and Rs.l250/plus 0.33 per cent of the difference between Rs.2130/- and Rs.2000/plus 0.17 per cent of basic pension in excess of Rs.2130/- (2) In the case of employees who retire on or after the 1st day of November, 1993, deamess relief shall be payable for evep^ffSS^jifB^^^lv^ for every fall, as the case mpj^ the anarterlviljflver^p^^^ tlifi All TniHlfa' Prtnoiiwailaiculated inlihelmanner.iScale of fpension per |l^ rate of dearnes^relief percentage o# basic tMisipn # (i)

(ii) Rs.M^i^Wlll

(iii) Rs.3,851to

0.35 per cent of Rs.2,400/plus 0.29 per cent of the difference between Rs.3,850 and Rs.2,400/- plus 0.17 per 8 cent of basic pension in excess ofRs.3,850/-

(iv) above Rs.4,100/- 0.35 per cent of Rs.2,400/plus 0.29 per cent of the difference between Rs.3,850 WP(C)184/2007 & Connected matters Page 21 of90 2017:DHC:8167-DB and Rs.2,400/- plus 0.17 per cent of the difference between Rs.4,100/- and Rs.3,850/- plus 0.09 per cent of basic pension in excess of Rs.4,100/- (3) Notwithstanding anything contained in Para (1) and Para (2), in respect of employees belonging to Class- Ill and Class-IV, who have retired on or after the 1st day of August, 1992 and in respect of Officers belonging to Class-I and ClasssHffeifH^^^^feafter 1st day ofApril, 3(A)Jri G0e of retire:d^ ciied on or aftegtl^pt day of^^^^^Mie deam^r^pfshall be,v|)iy%ble for evei^|i§^^^0® recoverai^^ fell every If as the case mam iSf Mr " ®'li1>very 4 points ovJI 1740 Such ' said 4;Ke Basic points in the quarterl)|Avei^|Consumer Price Irifi Industrial Workers of 1960 = loj incrfese or deoreai point% 3(B) In casei®J|a]^^^^^r^i^^^^fufure the rate of deamess relief"%a|^g^^^n!K^imployee shall be determined by the Corporation corresponding to the index to which the case is linked. (The Corporation has determined that in case of employees who have retired or died on or after the 1st day ofAugust 2002, the dearness reliefshall bepayable for every rise or to be recoverable for everyfall, as the case may be, of every 4 points over 2328points in the quarterly Average Consumer Price Indexfor Industrial Workers in the series of 1960 = 100 Such increase or decrease in dearness relieffor every said 4 points shall beat therate of0.18per centofthe Basic Pension). WP(C)184/2007 & Connected matters Page 22 of90 (4) Deamess relief shall be payable for the half year commencing from the 1st day of February and ending with 31st day of July on the quarterly average of the index figures published for the months of October, November and December ofthe previous year and for the half year commencing from the 1st day of August and ending with the 31st day of January on the quarterly average of the index figures published for the months of April, May and June ofthe same year; (5) In the case of family pension, invalid pension and compassionate allowance, deamess relief shall be payable in.accordance wjthgth^£ti^ltfeni%ne[4] above. (6) Deamess relM^iwill be allowed on^fulPbasic pension even after commutatiGjaiY^^^^i^ \ (7)l^^b^l^ssrelief!! additil^jp^sion."

19. There is also stipulation wi which is as ender: "36. M n mu pension ion^s|alfcl5%-^^ (a) rupees threei-Mnd^ per month in respect of an emplofebpbdsSfing to ClassIII or Class- IV, who had retired or died before 1st August,1992 and in respect of employee belonging to Class-I or Class-II, who had retired or died before 1st day ofApril, 1993. (b) rupees seven hundred and twenty per month in respect of an employee belonging to Class-Ill or Class-IV, who had retired or died on or after 1st August, 1992, and in respect of an employee belonging to Class-I or Class-II, who had retired or died on or after 1st April, 1993. minimum pension in Rule 36, me ^amoun ^minimum Page 23 of90

(c) rupees 1,100/- per month in respect of employees belonging to Class-I, Class-II, Class-Ill and Class-IV, who have retired or died on or after the first day of August, 1997;

(d) in case of any wage revision in future the amount of minimum pension payable to an employee shall be determined by the Corporation corresponding to the index to which the scale is linked"

20. Lastly, we will refer to the provisions relating to the pension fund. Rules 5,7, 11 and 13 relatingJg^e-Eension Fund are asunder: "5. Constit^ion (^^pfc&femration shall constitute a|F^Me igdW^yfe Ingu^e)!|prporation of India^^||gjioyeesjj^^^^|™^und^iiM ii^vocable trust ^#ii^periodl|i®g^^4nd tw^f^^cfes from the notilfiedtSate. % I (2) Th|Fundshall have?M purposetheprov^ionof the payment ofpension oj-ffamM^ in accordance with these rules tothe empl#geMfl^wailY f (3) The and shall ensura^l^pM^sui^ ^g#i:Sg^»i'enablethe trustees to niikgdja#?|pSpBfs^ under these rules. xxxxx

7. Composition of the Fund - The Fund shall consist ofthe following, namely:- Forthepurpose ofthis rule "pay" includes -

(i) the basicpay,

Page 24 of90 (ii)allowances other than deamess allowance which count for the purposes of making contribution to the Provident Fund and payment ofdeamess allowance,

(iii) deamess allowance payable on the basic pay and the allowances specified in clause (ii) above, upto Index Number 1148 in the quarterly average ofthe All India Consumer Price Index for Industrial Workers in the series 1960=100; and

(iv) a;llowances to the extent they count for Provident

Fund, house rent allowance, gratuity and for refixation ofsalary on promotion: Provided that the^£@o^ora^n^shal^^ not make any contribution tox^acciilSpfi thi^f^ri^ilfent Fund of the employee Explanationfe^On an'di Insurant.^gorporation| (Amendm^'nt) Rules, If^

(i) theibasic pay,

(ii) allowances other for the purpose^

(iii) leV'CQunWor^ntribution to the Provk^|i]^^fi|)jase^^^Mm gratuity and for refixatio^^of3jL^^^^^Sl"^^i^ff Provided that the Corporation shall not make any contribution to the account of the Provident Fund of the employee; (b) the accumulated contributions of the Corporation to the Provident Fund and interest accmed thereon upto the date of such transfer in respect ofthe employees;

(c) the amount consisting of contributions ofthe Corporation along with interest refunded by the employees who had retired before the date of publication of these mles but who WP(C)184/2007 & Connected matters Page 25 of90 ^-y opt for pension in accordance with the provisions contained in these rules;

(d) the investment in annuities or securities purchased out of the moneys ofthe Fund and interest thereon; (e) amount of any capital gains arising from the capital assets ofthe Fund; (f) the additional annual contribution made by the Corporation in accordance with the provisions contained in rule 11 ofthese rules; (g) any income ftom jnv^estg^^^^ ofth^amounts credited to the Fund; ® « emplovee.-^ •-asp* '

11. Actuarial investis Fund - The Co ration 31st day^'-of^^f^.^. and makej^sucb^^ditioh annual Provided that the Corporation shall cause an investigation to be made by an,Actuary into the financial condition of the Fund, as on the 31st of day of March immediately following the financial year in which the Fund is constituted. xxxxx

13. Payments out of the Fund - The payment ofbenefits by the trust shall be administered as follows, namely:- (a) the trust shall purchase immediate annuities from the Corporation m respect of each employee or his family, as WP(C)184/2007 & Connected matters Page 26 of90 2017:DHC:8167-DB the case may be, at the time he or his family becomes eligible for the benefits under these rules; (b) the trust shall, subjectto the availability of additional sums in the Fund, to be provided by the Corporation as required under rule 5 (3) purchase additional annuities as and when it becomes necessary to revise upwards the benefits payable in accordance with these rules;

(c) the trust shall, in the event of the benefits payable under these rules being revised downwards for any reason whatsoever, credit the benefits received from the

21. Rule 35 relatg^Q^^>mp retired afler|^^®iuary. pension anyadditional pen^| Appendix-Ill. This formula M notbeexaifined. jjnsion. ^F6i;''^emp,loyees who had fWole 3r^luly, l987 the basic imputed as per tfre fomula given in "npt challenged and:lierefore need

22. Under sub-Rile (2¥Mf1i5^!fiil&emil^^ inpbcordance with the Service Rules^^Sfaf&R|gulgi<m^ service ofnot less than 33 years, t]ie>^Ji6|p^S'ii0n^^|^ 50% ofhis average emoluments. Under clause (3) additional pension shall be 50% of the allowances drawn by the employee during the last 10 months of service. Clause (b) to sub-Rule (3) stipulates that no deamess relief is to be paid on the additional pension. The explanation defines the term "allowances" which are admissible for computing additional pension. WP(C)184/2007 & Connected matters Page 27 of90

23. Sub-Rule (4) states that pension shall be the aggregate of basic pension and additional pension and shall be subject to the minimum pension specified in the Rules.

24. Sub-Rules (6) relates to employees who have completed 10 years qualifying service and have retired before completing 33 years of qualifying service. In such cases, the amount of pension is proportionate to the amount of pension admissible, being the sum-total of basic pension and additional pensioii.^.^ia!^=...>.

25. Rule 37 states ^shrtlle'grfnted. on basic pension family pensp^^^ahd^|^^^^^nipass^n^ accordance rates spp^QiS'^dnf^ot^endix-lVI*^ 1 I allowance in

26. As per thfe'Pension Rules, consists of twM parts; basic IjI: ® pay includinp|tagnat^^mcre^i(ts^HlF'an^J'and allowances c pensions does not vary and remains static, notwithstanding subsequent revision of pay applicable to in-service employees and not to retired employees. To off-set and negate the impact of inflation and loss of purchasing power, the Pension Rules provide for payment ofdeamess relief.

27. Similarly, additional pension, added to basic pension, remains static and constant. Additional pension is 50% of the "allowances" drawn during the last 10 months of service. No deamess relief is payable on additional WP(C)I84/2007 & Connected matters trn^E^, Page 28 of90 2017:DHC:8167-DB pension. Noticeably, "allowances" counted for payments to Provident Fund, arereckoned forbothbasic pension andadditional pension.

28. Amendment to clause (o) to Rule 2 of the Pension Rules with effect from 14^*^ May, 1999, would not make any difference. Substituted clause

(iv) would apply to those retirees, who were in service as on 1®^

November, 1993 when the deamess allowance benefit calculated up to IndexNo.1148 of All IndiaAverage Consumer PriceIndexforIndustrial Workers was applied on the,.b^gic^pay^drawn by him. This is clear from theproviso to clausa^^i^)^ importantay.^fificantS^ employees.|)f& Corporat^^^^p. ti

29. Before we be%ii?a&to first notice an i|^e^,five years the pay revision.! Such pay or wage revi^on had taken pl^|:|i||f^|th effect from 19|2, 1997 and thereafter i^i 2002, 2007 time of wage revision, the deamess ^llow^i^ce payablefe'-ithevihrse^ice^eihployees.^^^ merged and factored in the%|ii|:et?#rgplacement payMcale^OnW the pay revisions have beati deamess allowance. to basic pay and

30. Appendix-IV divides and classifies retired employees into 4 categories. Paragraph 1relates to employees, who had retired between 1®' January, 1986 and 1®' November, 1993. Deamess relief is payable at the percentage ofbasic pension specified in the table for every 4points over 600 points in the quarterly average ofthe All India Average Consumer Price Index for Industrial Workers- 1960 Series (AICPI-IW, for short). For basic pension upto Rs. 1250, deamess relief percentage or WP(C)184/2007 & Connected matters Page 29 of90 2017:DHC:8167-DB equalization is 0.67%, for basic pension between Rs. 1251 and 2000 deamess relief percentage or equalization is 0.55% in excess of Rs. 1250, the deamess relief percentage or equalization between Rs. 2001 and 2130 is 0.33% and above Rs. 2130 is 0.17%.

31. For employees who have retired between November, 1993 and 31^ July, 1997 the deamess relief payable is for every 4 points over 1148 points in the quarterly average of the AICPI-IW. 1148 points was the PriceIndexas on NovembUj^^B^g^js therefore the relevant figure l^gvember, 1993 is also ' V for computing deamesr relifefi relevant for it.^refers •t©'? the, daites^on which®e^Jlfension Rules were j j -'"^^-^^'^'^equaHz^i^^table given in deemed to percentage 3850 will hav0^ome paragraph:|^ki^iatesthat^^ffl||^^^pion amouriSpt^Rs. 2400, the '6f deamess relie®^ -,,-^'0.35% and betwto Rs. 2401be 0.29% ofbasicilels^^^ Rs. 385lfand 4100 the

32. Paragraph 3(A) reittfjJt<^mfl|^ee%iMto or died after August, 1997 but before 3l-^fuly7=20§2r"Ih this case deamess relief is payable for every 4 points over 1740 points in the quarterly average of the AICPI-IW atthe rate of0.23% ofbasic pension. The date August, 1997 has rationale and was fixed, as coinciding with the pay revision of in-service employees.

33. Paragraph 3(B) states that for any wage revision in future, deamess relief payable shall be determined by the Corporation corresponding to the index to which the case is linked. For employees who have retired or Page 30 of90 2017:DHC:8167-DB died after 1®^ August, 2002 deamess relief is payable for every 4 point rise over 2328 points in the quarterly average of the AICPI-IW at the rate 0.18% of basic pay. The deamess relief for employees retiring between 01.08.2007 to 31.07.2012 and 01.08.2012 to 31.07.2017 has been reduced to 0.15% and 0.10%, respectively.

34. Thus deamess relief payable on basic pension for the employees retiring between 01.01.1982 to 31.07.2017 is as under:- Pensioner retired betweel^t^w:^^ ^ 01.01.1986 to -Ratl^of^J^arness Relief ^.6^^p^^p^taperingformula) 01.11.1993y31jOl1997 I^^pp 0.09°/|f|^fiEing formula) 01.08.1997|b 31"!07.2002 (See Rule 3(4) t rf,[1] 01.08.2002 _'1 to31.07.2007 l^ll 1 01.08.20071|31 01.08.2012 to 31?.(y[7]:Mj^

35. The deamess reliefpayable therefore has reference to the basic pension. The principle of deamess relief acknowledges that basic pension would remain static and not account for the future increase in salary of inservice employees.

36. The Pension Rules, exfacie, seek to provide beneficial deamess reliefto retired employees depending upon their date of retirement, which has reference to the basic pension. Higher percentage of deamess relief is WP(C)184/2007 & Connected matters Page 31 of90 2017:DHC:8167-DB given to employees who had retired between 1®^ January, 1986 and 31^^ October, 1993 for their basic pension was lower. However, for amounts above Rs. 2130/-, the deamess reliefof 0.17% is lessthan deamess relief in paragraph 3(A). Similarly, higher percentage of deamess relief is prescribed for basic pension upto Rs. 3850/- for employees who had retired between 1®^ November, 1993 and 31®^ July, 1997 in comparison to the deamess relief of 0.23% applicable to employees who had retired between August, 1997 and 31'^ July, 2002. For amounts above Rs. 3850 and Rs. 4100^^e^^^^^^^^ratg. is 0.17% and 0.09% respectively.UndGir^^^^it^3^)funlf^ ofbasicpay for every 4po^s^veir' lJM|l^^^p:^|the of the AlCPI-IW.i^^able. thepensioiin^ntabove above Rs.:3851 in paragrapl below

37. We shall, iri%he? variation^^rii^tralization on Paragraph 1and petision amounts been dealt with Ind examined Pension Rules di|cfesihgand adjudicating the contentions raisedN%». WP(C)184/2007 &Connected matters

38. To avoid prolixity, we are not elucidating in detail the arguments raised by the retired employees/associations and the Corporation, and would only refer to the fundamental points raised by the retired employees/associations and the response ofthe Corporation.

39. The primary and the core issue raised by the retired employees / association is that deamessrelief amountas per the Rules is not addedor merged with the basic pension and this results in non-revision ofbasic Page 32 of90 2017:DHC:8167-DB pension. As a result, the pension amount being paid to the retirees prior to 31®' July, 1997 is restricted and remains at arbitrarily low levels resulting in invidious discrimination. Resultantly, the same rank officials retiring on different dates get different amount of pension. In fact, a lower rank officer who retires later ends up getting a higher pension solely because of the date of retirement. This defeats the very object of giving pension and violates Article 14 of the Constitution. Reliance is placed upon the meaning and concept of the term 'pension', as elucidated mDeokir0tdii^^^"Vs^St^te ofBihar &Ors. (1971) 2see 330. D.S.^qr^mi VI (1983) 1See305 M and other cas|#' ^fMlarit^^^|t#|g the Central eivil Servicif(|,e|sion) Rlll^^|gif^^^|ibable to^l^fntml Government EmployeesMS projected to % pursuant to' i^iptiatlpentral Government employees, the decision off^e|^'^^|titution Bench in'|A*S'. Nakara (supra), ha-^e been given up!§r$|atf^ on acclptance ofthe recommend&ns qilli^^6^^^/^®\^®)nMnissiof Reports. It is submitted that theliiild'%re.ated under Rules..5xan^''6#ead with Rule 13 ofthe Pension Rmes4§^ni^^^ut^^3®seij^!iided. The Corporation has statutory obligation to lfetee#hat«aide^uate sums are made available to the trustees of the Fund for payments due under the Pension Rules including any shortfall resulting from upward revision. Reference is specifically made to Rules 5 (3) and 13(b) of the Pension Rules. Reference was also made to Rule 56, which is a residuary Rule and stipulates that matters relatingto pension and other benefitsin respectof r which no express provision has been made shall be governed by corresponding provisions contained in Central Civil Service (Pension) WP(C)184/2007 & Connected matters Page 33 of90 Rules 1972 or the Central Civil Services (Commutation of Pension) Rules 1981. It is asserted that the Managing Director and the Chairman of the Corporation are being treated differently and pension is paid as per Rule 55-B of the Pension Rules at par with the Central Government Pensioners, whereas other retired employees have been left out and are beingdiscruninated in violation of equality enshrined in Article 14. The financial implication as projected by the Corporation is disputed [This argument has beenexamined in detail separately]., Bfehe said submissions,

40. The Corporation has.#€liallpMef|ffl 0b:. inter alia statinglthat th^pensiomin-:respect of!ltnpfbyees is fund based unlike the C|ntral":;GovernMftifj®^^ whov receive their pension from Consdid^d Fund o^r^^J^lh^Corporatio^^eo^butes to the Fund@ l|k.ofeachmonth|t^|^^^chemployee. 0|thebasisof actuarial ipmputation, the|f|oriM^ makes addiilonal annual

41. Before refe^-ingtoD.S. Naka^ ^mwe would first take;on record the 4-u^ context. The meaning ari%concepy^.thM^%i^%^nsFon'%in.the India: meaning, concept,/and%§)ht®i:0f4^hat' is tenn "pension" are rather difficult to^^efiiS''inikass5lraitj'aGket'.>/Ihxdeveloped countries, 0,, -lifo. pensions are mostly contributoiy2jnr^naturej,:^non-contributory pensions being restricted to invalidity payments in the nature of social security measures rather than terminal service benefits. Item 17 of Article 366 of the Constitution defines the expression "pension" for the purpose of Constitution as contributory or of any kind whatsoever, payable to or in respect of any person, including retired pay, gratuity and any sum or sums payable by way of return to subscription to a provident fond. However, in service law, the expression "pension" in India as defined means a series of periodic payments, usually payable monthly for life. WP(C)184/2007 & Connected matters Page 35 of90 2017:DHC:8167-DB for past services of himself or another. This concept involves recognition of the principle that there is an obligation to help the person who was in public employment and has reached the age of superannuation or incapacitated from rendering further service. The principle is that an employee should be paid compensation for the gradual destruction of his wage earning capacity in the course of work. The aim is to provide social security in old age.

42. In Pepsu Road Vs. Mangal Singh & Ors., (2011) 11 the earlier case ithfaiid btplainirigtthe4expressionv''pen^ and also the Siti^tsofthe'said4erM|iSnd?jtiad held.^s under: law dealing wit&^i^ text book defifiiti^ts.

WP(C)184/2007 &Connectedmatters Page 36of90 "37.... pension is not a bounty payable on the sweet will and pleasure of the Government and that, on the other hand, the right to pension is a valuable right vesting in a govemment servant."

43. In D.S. Nakara (supra), the subject matter of challenge was the office memorandum dated 25^"^ May, 1979 issued by the Ministiy of Finance, Govemment of India, propounding the modified formula for computation of pension. The formula made applicable from 1®^ April, 1979 had liberalized the compjitation of pension on the following accounts;-

(i) Application^plab^ystem forpg^culatidn ^pension;

(ii) Calculati(|n' ^er the<,prece|^ing 10 months instead of S& m'oht

(iii) Benefit of qualifying seilM 3 years instead oi30 years; and

(iv) Raising the ceiling limit'©'Ifp^gnsfoft ofRs.l^ per rnonth. —^ ^-~-ma.tWs-Kvmade — said date. The employees who 5H9? had retired earlier, '%3^'WereZ^fej^^i^^i^ion on the basis.of. computation and average emoluments of 36 months' salary preceding the date of retirement. After exhaustive review of decisions explaining Article 14 of the Constitution and referring to the concept and meaning of the term 'pension' it was held that there was no reason for choosing 1®' April, 1979 as the cut-off date for application of the liberalized formula. The cut-off date was struck down as invalid observing that pensioners constitute one class. The Supreme Court however did note that this was not a case of a contributoryscheme or a pension fund from WP(C)184/2007 & Connected matters Page 37of90 V which alone the pension was to be disbursed. Neither was it a case where a new retiral benefit was awarded. It was a case of an upward revision of an existing benefit. Argument of the Government regarding non availability or paucity of funds was rejected, observing, that it would make a marginal difference in the case of past pensioners, because the emoluments were not revised.

44. The ratio In D.Si. Nakara (supra) was explained appropriately by the Constitutional Bench decision in Krishena Kumar (supra) wherein cutoffdate, to be covered-b^he.president fiih®^bheme or pension scheme, was challenged. MS. (supra) aecTsiotiv The persons cover|S;bj§!ne pro^tiii^kScheme ari'd thois.e covered by the • if pension scheme%did not fomy^/h&mfgfeneous class. ^Therefore, basis for - U' i applying Akicle 14 betweem1|i„eSwp® groups waS;not there. The I' iifilfilfl fl fixation of-cut-off date, to provi'deiW option to be covered under the. I. t e v 1 ^. pension scheme, was based^pn;wratitonaiHdifferentiation../frhus, fixing a L..A,.[1] not tantamount to

45. More pertinent, and i^ss^^spe.(^i&cds«=tl^^^^ Constitutional Bench decision in tlie case of Indian Ex-Services League (supra). The petitioners therein had relied on D.S. Nakara's case(supra) to allege discrimination for the pensioners constitute a homogeneous class and no distinction could be made between pensioners who had retired earlier or after a particular date. The concept ofpension in the Indian context, was additbnally relied. The contention asserted was that the retirees, who held the same rank, irrespective of the date of retirement must get the same amount of pension. The Constitutional Bench held that in WP(C)184/2007& Connected matters Page 38 of90 • ^ D.S.Nakara (supra), the portion of the Memoranda by which the benefit ofthe Uberalized pension scheme was confined to persons retiring on or after the specified date was struck down and the benefit was extended to all retirees, irrespective of the date of retirement. The ratio related to the mode of coniputation of pension and not revision of emoluments of earlier retirees. In other words claim for "One Rank One Pension" irrespective of date of retirement, was rejected in Indian Ex-Services League (supra) by the Constitution Bench. D.S. Nakam's case (supra) was distinguished on related tocomputation ofpension applyin^^Q^%beralize^^Q^ul^^^^ which "average emoluments",fef^rj|determ#ed|^f^^ salary instead of 36' rff^Mhs' sal ceiling limil ^^pension. retirees uniformly, as the computation ofIpension was slab syS^^m%id raising the

1. '•%: was held, must:|e given to all;b liberalized,toe mode of 'apply to,fl the retirees, I iliHf irrespective Mf the ie entitled to arre£ revised according^%c^inpMfe with the liberalized formula from the'^atedtswas-applicable. If the pensioners are and form one class, then computation ofpension cannot be by applying two different formulae, thereby inflicting unequal treatment solely based upon date of retirement. In Indian Ex-Services League (supra), it was held:-

TWeaLr®R^retirees' would not be ^e specified d^tg^ ^butM^r?f)ension would be Page 39 of90 2017:DHC:8167-DB liberalised pension scheme have to be given equally to all retirees irrespective of their date of retirement and those benefits cannot be confined only to the persons who retired on or after the specified date because for the purpose of grant of the benefits of liberalisation in pension, all retirees constitute one class irrespective oif their date of retirement. In order to give effect to this conclusion the only relief granted was to strike down that portion of the Memoranda by which the benefit of the liberalised pension scheme was confined only to persons retiring on or after the specified date with the result that the benefit was extended to all retirees, irrespective of their date ofretirement. Once this position emerging fi*om the decision iniVa^ra [(1983) 1 SCC 305: 1983 SCC (L&S) 145: (1983) 2 SCR 165] is borne in mind, the fallacy in the petitioners' contention in these writ petitions becomes obvious and their claim based only onNakara [(1983) 1 SCC 305: 1983 SCC (L&S) 145: (1983) 2 SCR 165] is untenable.

12. The liberalised pension scheme in the context of which the decision was rendered mNakara{{\9^?>) 1 SCC 305: 1983 SCC (L&S) 145: (1983) 2 SCR 165] provided for computation of pension according to a more liberal formula under which "average emoluments" were determined with reference to the last ten months' salary instead of 36 months' salary provided earlier yielding a higher average, coupled with a slab system and raising the ceiling limit for pension. This Court held that where the mode of computation of pension is liberalised from a specified date, its benefit must be given not merely to retirees subsequent to that date but also to earlier existing retirees irrespective of their date of retirement even though the earlier retirees would not be entitled to any arrears prior to the specified date on the basis of the revised computation made according to the liberalised formula. For the purpose of such a scheme all existing retirees irrespective of the date of their retirement, were held to constitute one class, any fiirther division within WP(C)184/2007 & Connectedmatters Page 40 of90 2017:DHC:8167-DB. J that class being impermissible. According to that decision, the pension of all earlier retirees was to be recomputed as on the specified date in accordance with the liberalised formula of computation on the basis ofthe average emoluments of each retiree payable on his date of retirement. For this purpose there was no revision of the emoluments of the earlier retirees under the scheme. It was clearly stated that 'if the 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'. This according to us is the decision mNakara [(1983) 1 SCC 305: 1983 SCC (L&S) 145: (1983) 2 SCR 165] and no more. U.Nakara [(1983) 1 SCC 305: 1983 SCC (L&S) 145: (1983) 2 SCR 165] decision came up for consideration before another Constitution Bench recently mKrishena Kumar V. Union ofIndia [(1990) 4 SCC 207: 1991 SCC (L&S) 112]. The petitioners in that case were retired Railwayemployees who were covered by or opted for the Railway Contributory Provident Fund Scheme. It was held that PF retirees and pension retirees constitute different classes and it was never held mNakara [(1983) 1 SCC 305: 1983 SCC (L&S) 145: (1983) 2 SCR 165] that pension retirees and PF retirees formed a homogeneous class, even though pension retirees alone did constitute a homogeneous class within which any further classification for the purpose of a liberalised pension scheme was impermissible. It was pointed out that mNakara[{\9^?>) 1 SCC 305: 1983 SCC (L&S) 145: (1983) 2 SCR 165], it was never required to be decided that all the retirees for all purposes formed one class and no further classification was permissible. We have referred to this decision merely to indicate that another Constitution Bench of this Court also has xQ3idiNakara [(1983) 1 SCC 305: 1983 SCC (L&S) 145: (1983) 2 SCR 165] decision as one of limited application and there is no scope for enlarging the ambit of that WP(C)184/2007 &Connected matters Page41of90 '-r decision to cover all claims made by the pension retirees or a demand for an identical amount of pension to every retiree from the same rank irrespective of the date of retu-ement, even though the reckonable emoluments for thepurpose ofcomputation oftheir pension be different."

46. Indian Ex-Services League (supra) case relates to Army personnel. K.L. Raihi (supra) is a case relating to retired government employees. Relying upon the decision in D.S. Nakara (supra) the plea was that on revision of pay scales of in-service employees there should be revision ofpension for the retirees^oi^^^¥^si^|rs ofthe same rank were »=rpa entitled to the sa contention wasfreje^fed ob||] the average&i©|pnents The said riile il^applicable;|®a|® retirement.! This definition^ retirement=^f the employ^^^ ofemoluments as'pr^^^ij^^m5|i||p||s^^^l|g^^ thatthe pension e.^Ste: of retirement. The basic^^si^m is computed on le last lO^mbttths of service, piers irrespective|6f the date of lents in force al the time of dergo a change. The same }'M formula of the date of retirement. Sse the definition was to be recalculated"^Wthe^fWsiii&f^evised pay. Benefit of the liberalized formula based on the last 10 months' emoluments was applied universally. This meant those who were drawing higher emoluments as salary would get higher pension. In clear and categoric terms, it was held that D.S. Nakara (supra) case does notlay down that same amount of pension must be paid to all persons retiring from Government service, irrespective of date of retirement. Reference was WP(C)184/2007 & Connectedmatters Page 42 of90 <>'7 made to other two Constitutional Bench decisions in Krishena Kumar (supra) and Indian Ex-Services League (supra).

47. A lucid and clear pronouncement is to be found on the said subject in the State of West Bengal (supra). This decision refers to the earlier decisions and also judgment in the case of Union of India Vs. P.N. Menon & Ors. (1994) 4 SCC 68, wherein vide Office Memorandum dated 25.05.1979 a portion of the deamess allowance was to be treated aspay in respect ofthe govemm^t servants, who had retired onor after 30"^ September, 1977.<,';^Sffwas^challenffl-as discriminatory to those who had retired^prior0<0%b^^ challenge was ^_lot#rnerge a part o'feidqamess •I ^ I to the paid pay, it was^o|'0j|v.e||f was taken in -wiew of the recommendkion of the 3*^^ P£iyk(lbyfriission. Thus, the decision to fix the cut-offdate with the re4'M^®#Sly?was not arbitrary as the cut-off date allowance into pay wbM^^^nouijttQias'h^ benefit, whereas D.S. Nakara's (supra) ratio and mandate was limited to upward revision of an existing benefit. The challenge made by the retired employees had failed to distinguishbetweenthe in force pension scheme and the revised pay scale. When there is a revision of pay, it applies to existing employees or in some cases even to retired employees, when given a retrospective effect. However, this does not mean that the pension should be revised on the basis of the new or upgraded emoluments. Unless there is a change in emoluments as defined in the pension WP(C)I84/2007 & Connected matters Page 43 of90 2017:DHC:8167-DB scheme, the basic pension payable would continue to remain as per the pay drawn by the employees immediately before his retirement. It was held:-

WP(C)184/2007 & Connectedmatters Page44of90 2017:DHC:8167-DB emoluments formed no part of the formula for grant of pension during 1986 to 1995."

49. We would now refer to some of the judgments of the retired employees and their associations and see to what extent the ratio in Indian Ex Services League (supra) and other decisions have been differed from or distinguished and on what grounds and for what reasons.

50. We would begin by referring to K.J.S. Buttar Vs. Union of India & Am. 2011 (11) see 429. In^isaidsSas^gie appellant, who was an ex- Captain in the Ind|.n^^^^iai|^|^ijw g^ui^^ to military service was entitfed>,t^ensionQ^s^^^ tfid',degree ofdisability of 50%. Howei/er/vide thei^Cir^Mia1|~irid/& 31®^ January, 2001 the degree^of disabilit; January, li96. The said St iHe|'ihfuiy was raisedSto|75% w.e.f. 1 iso stipulated gr|nt of service element oflull 10 years of sepfcfe instead of 2 years and revision of the -^-.Supreme Court he would employee, that be entifledCo^reyisi'on'^'as---prayedvanAismisability should be treated as 75% instead'of^50%5fcobsefying^that the letter dated 31 January, 2001 would be applicable not only to those officers, who had been invalidated out of service after 1®^ January, 1996, but also to those who were invalidated earlier.

51. This case, we would observe, is again a case of enhancement of existing pensionary benefits covered by the decision in the case of D.S. Nakara (supra). It relates to calculation of the disability factor and not parity of emoluments. By the letter/ instructions dated 31®^ January, 2001, it was WP(C)184/2007 & Connected matters Page 45 of90 2017:DHC:8167-DB:V held that where disability was assessed between 50 and 75 percent the same would betreated as 75%. As this instruction was made applicable w.e.f. 1®^ January, 1996, itwas held that the appellant would be entitled to benefit of the said instructions from 1'^ January, 1996 and it did not matter, and made no difference, whether the employee was invalidated from service before or after January, 1996.

52. In Kallakkurichi Taluk Retired Officials Tamil Nadu and Ors. Vs. State of Tamil Nadu Supreme Court was dealing with a case where retr^^.pc^sQTJun'gi Ij^%were drawing a lower pension on acG0unt[5],,,df^1;he,rule®p©sition relkjtmg 'io, merger of fixed percentage ^d^iess qlTo^iif|€||^^^earness^^^ calculating pension. In|jii^|Gntext, thi Division Bpnch ofthe High O^^^^fMldthat there was liscrimination gurt reversedjthe -decision ofthe as two different parameters |Q|,eo|m|tation cannot be applied for the M, J i ' purpose of|addmg ^aQjnPlinent'^wo^dl^ as pay for computing tKe^molumM^^^ purpose of adding the component of "deamess pay" to wages for calculating pension was to offset the effect of inflaition and in that the retirees prior to 1®^ June, 1986 should be given higher pension than those who retire immediately post the said date. This objective had to be kept in mind while deciding the controversy whether the Rule was arbitrary or violative of Article 14. There was historical pattern and exemplar of inclusion of "deamess allowance" as "deamess pay" for calculating pension. The State, vide the Rules, had given effect to equation from time to time. Whenever there was discrimination, on account ofaddition of deamess allowance in pay in the computation of pension, byjudicial WP(C)184/2007 & Connected matters Page 46 of90 2017:DHC:8167-DB intervention parity was restored. Thus, where the rules or government orders grant/require computation by adding "deamess allowance" to "deamess pay" in the fixed percentage, it must be applied to all pensioners, and none should be discriminated. Having so observed, the Supreme Court was conscious and had added the caveat that no employee has the right to draw deamess allowance as deamess pay till such time the State Government decides to grant and treat deamess allowance as deamess pay. The (State) Government has the right to choose whether or not^^ail^^no.^ancBls^^ be treated as deamess payandinthat^^!^|h^i^r^^'^^ "37. The issue in hand needs to be examined from another perspective as well. It must be clearly understood that no employee has a right to draw "deamess allowance" as "deamess pay" till such time as the State Government decides to treat "deamess allowance" as "deamess pay". And therefore, the State Government has the right to choose whether or not "deamess allowance" should be treated as "deamess pay". As such, it is open to the State Government not to treat any part of "deamess -V allowance" as "deamess pay". In case of financial constraints, this would be the most appropriate course to be adopted. Likewise, the State Government has the right to choose how much of "deamess allowance" should be treated as "deamess pay". As such, it is open to the State Government to treat a fraction, or even the whole of "deamess allowance" as "deamess pay". Based on Rule 30 of the Pension Rules, it is clear that the component of "deamess pay" would be added to emoluments of an employee for calculating pension. In a situation where the State Government has chosen, that a particular component of "deamess allowance" would be treated as "deamess pay", it cannot discriminate between one set of pensioners and another, while calculating the pension •WP(C)184/2007 & Connected matters Page 47 of90 2017:DHC:8167-DB payable to them (for the reasons expressed in the preceding paragraphs). Of course, a valid classification may justify such an action. In this case, the State Government has not come out with any justification/basis for the classification whereby one set of pensioners has been distinguished from others for differential treatment."

53. This brings us to the decision ofthe Supreme Court in Union ofIndia & Anr. Vs. S.P.S. Vains & Ors. (2008) 9 SCC 125. Facts of this case are rather peculiar, for upon the implementation ofthe 4* Pay Commission Recommendation, Brigadi^dnsthe^^high^t bracket were getting higher salary than the startin|'sala^4in(^;he{p^^ ofMajor General. Resultantly, the|Brigadiers^ than the Major Generalswe|#^^vingh^^^^^^^p^family''^^i^.Noticingthat thepostof^rig^ierwas/is'^^^^tt:forpromofeial^^mkofMajor General, tfee Government'^^^^^^Ipommendation of|the 5^ Pay Commission had corrected Jh|riuhikien^ anomaly. correct this •\\... aberration, special instructiins-^efeis'suid that-^the initial payat the rank Ik. ^ of Major General would be fixed at the stage next above the pay notionally arrived at by increasing his pay, including rank pay of Brigadier, by one increment in^the revised scale at the relevant stage, without retrospective effect. In this context reference was made to D.S. Nakara (supra) and the argument of the retired employees, i.e. retired Major Generals was accepted. We are inagreement with the counsel of the Corporation that the ratio and mandate ofthis decision isconfined to the peculiar factual matrix ofthe said case. This decision does refer to D.S. Nakara (supra) and states that there were several other judgments, in which the principle expounded was followed. The judgment has not quoted and referred to these decisions, which inthe said factual context WP(C)184/2007&Connectedmatters Page 48 of90 2017:DHC:8167-DB were not required to be quoted. We do not think the aforesaid decision propounds or exposits a ratio contrary to the ratio of the Constitutional Bench in Krishena Kumar (supra) and Indian Ex-Services League (supra) or the decision in K.L. Rathi (supra) and the State of West Bengal (supra)

54. In A.N. Sachdeva (Dead) by Legal Representatives and Ors. Vs. Maharishi Dayanand University, Rohtak and Anr., (2015) 10 SCC 117, the issue involved was,dtffer^t^he retired employees were being denied the bene||?i-^^^cAupjiy ga^^^ke in Kurukshetra University/Punja# Univlrsity &fas?.Gomputing5qualMying service for purpose ofpe^sio^after ^8ft^]^|af||r4ed and-becaffie employees of the Mahariiii,^^anand fe^^^pDhtak. In ^;liitext, several ere referred to alnlrmwiss^ was decided irilfavour of the decisions v retired em ^1. loyees. This Will-1 is d^@sionl|^\^( iwould not be of iany help and assistance |o the ^^^e^ xeftltpj^eisii^sopiatioiis in! the present controversy. \ '

55. Ourattention was Ors. Vs. Stateof Andhra Pradesh and Ora.; l-985jsSup^""SCC 432. This again was a peculiar case relating to the State ofAndhra Pradesh where first the age of retirement was reduced to 55 years from 58years andthen restored to 58 years in spite of the fact that the Supreme Court had in an earlier decision upheld the reduction of retirement age to 55 years. In this context, D.S. Nakara's case (supra) was referred to observe and hold that different treatment could not be accorded to those who had retked before and after a specified date as the choice of date was arbitrary, for WP(C)184/2007 & Connected matters Page 49 of90 2017:DHC:8167-DB classification wasbased upon fortuitous circumstance relating to the date of retirement. Reference was made to the principle of reasonableness of classification and its nexus with the object of the legislation. The argument pertaining to the administrative chaos was rejected observing that the person who had stirred-up the hornet's nest, i.e. the State government, cannot complain of beingstung.

56. Dhan Raj and Ors. Vs. State ofJ &K and Ors., (1998) 4 SCC 30 was a case of Drivers of the State Government, who were seeking pensionary benefits in terms of government order dated 3'^'' October, 1986, though they had retired prior to 9^^ June, 1981. The Supreme Court had noticed T.. • that the Government h^^o^Ulat^^n the '^^stira of grant of pensionary benefits. Therewas also a change in the status, as at one time m.- i. the State undertaking was a departmentofthe State Government. On the S Vi,[1] « !? interpretation of the relevant orders, it was held that all retirees in the

1. -I said case including those who had retired priorto 9 June, 1981, would be entitled to pensionary benefits. Recording the said finding, the stand of the State Government was rejected. In this context, reference was made to the ratio in D.S. Nakara (supra) to hold that the restrictive interpretation placed by the State Government for its own employees was not correct.

57. Reliance was placed on the decision inState ofRajasthan and Anr. Vs. Prem Raj, (1997) 10 SCC 317, which refers to D.S. Nakara, (supra) Krishena Kumar (supra) and Indian Ex-Services League(supra) and it was observed that for deciding the controversy in question in the said case itwas not necessary for the Supreme Court to further delve into the WP(C)184/2007&Connectedmatters SO of90 •i I

V. question as to the extent to which the D.S. Nakara (supra) has been followed or explained. Eluding to the decision in State ofRajasthan Vs. Sevanivatra Karamchari Hitkari Samiti, (1995) 2 SCC 117, the Court observed the D.S. Nakara (supra) has not been given a complete go by.

58. D.S. Nakara's case (supra) dealt with a situation where all Central Government pensioners, regardless of the date of retirement, were held to be entitled to computation of pension under the liberalized pension formula with effect from 1®^ April,3;l~97,9,j^

59. The factual positi0tf^atp|||ti&ei Nakara (supra) was pronounced shJitirdJbe'fecalliedSlfe.Central'-Govei^ent had earlier extended benfe'fitVfminimxifii^(Bii4®^®^sting |fensi8|[ers, which was mm" mere Rs.25j(- a's'on 1 Stood enhaMedfto Rs.l60/- as on 1®' April 1983. However|^fflMjs ofthe basis adojlted for fixing iilatlif;Ewhr ^ mmimum pension are avail recommend^ merger^^of dearae'ss^^iilllncerwith the-aiksic pay from time totime. '1fee^s^^^;;twio^ffli" i^gei^^^blam^s allowance with -j' basic pay effectiv'e^ffbm 30:.>&^pteifi]ie%||972?tindex average 272) and 31®^ January, 1982 (index-'ia^^J^JOj-before the pronouncement in D.S. Nakara (supra). This merger of deamess allowance was not carried out with effect from the date when the particular index average was reached, but from a subsequent date and was only made applicable to those who retired after that date. The Supreme Court was certainly conscious and aware that employees retiring from broadly comparable posts at different times were receiving different amounts of pension. These differences were due to the difference in emoluments drawn by WP(C)I84/2007 & Connected matters iie First Pay Commission had tm..J • Page 51 of90 '--p. 2017:DHC:8167-DB the retirees at the time of retirement and also on account of merger of deamess allowance with basic pay or due to interim relief granted from time to time. This was not struck down in the case of D.S. Nakara (supra). In fact, it was never made the subject matter ofchallenge.

60. The aforestated decisions are not contradictory or laying down different ratios. The principle enunciated in D.S. Nakara (supra) holds that formula for payment or computation of pension when liberalised has to be uniformly applied to all classes of pensioners except when classification made is-switli,reiferjenee to.;th^ut-off date that can be justified on a rational or a-reas6nable basiS'^ah&doelnot lead to violation ofArticle H.JEqjalli^y doeti basic pensi©n%i@f the reli 14 are not^Y|ol^t®<^ when the iWees is imfe^elhanced when emoluments ofthe in serviceNemPloy^eesllire revised. D.S.vNakara's case !i I rail I (supra) does not direct paymeri| \of lequal amount of pension pensioners regardless of In (supra), the "49....In our opinion, it would make a marginal difference in the case of past pensioners the emoluments are not revised. The last revision of emoluments was as per the recommendation of the Third Pay Commission (Raghubar Dayal Commission). If the emoluments remain the same, the computation of average emoluments under amended Rule 34 may raise the average emoluments, the period for averaging being reduced from last 36 months to last 10 months. The slab will provide slightly higher pension and if someone reaches the maximum the old lower ceiling will not deny him what is otherwise justly due on computation." (emphasis supplied) WP(C)184/2007& Connected matters to all i&akara's case Page 52 of90 Thus, D.S. Nakara's case (supra) had held that the formula computing pension by taking average of last ten months' emoluments would be applied universally. It did not lay down that quantum of emoluments drawn during the last ten months for each employee must be taken as uniform. The emoluments have to be calculated according tothe payscales applicable atthetime ofretirement. In Indian Ex-Services League (supra) it was held: '"'"lA.... Nakara decision {{\9%y) \ SCC 305: 1983 see (L&S) 145] (is) one of limited application and there is no scope for enlarging the ambit ofthat decision to cover all claims made by the pension retirees or a demand for an identical amount of pension to every retiree from the same rank irrespective of the date of retirement, even though the reckonable emoluments for the purpose of computation of their pension be different." " ^ The Pensi^,Rul^sG^n^p^i^^||iL^ payouts for retired employ(§e#4p^^^ag|jevision^^^€'.^^^ib^|Rules to offset the adverse impact ofinfl^o^^^fde f®r^^mj^iiliefbased upon price index. This cannot be faurtM^and'-stfucrtown as violating Article 14. Thus, courts have recognized that amount of pension for retirees from the same post can be different.

61. The Fourth Pay Commission Report in paragraph 10.10 (Part-II) had observed that any attempt to equalize pension with reference to the revised scales ofpay would, infact, amounts toretrospective application of these scales of pay and had referred to the decision of the Supreme Court in SLP 14179-80/1985, State Government Pensioners WP(C)184/2007 &Connectedmatters ^"8^ 53 of90 Association and Ors. Vs. State ofAndhra Pradesh while dealing with the revision of death-cum-retirement gratuity already received by past retirees irithe,following words:- "Improvements in pay scales by the very nature of things can be made prospectively so as to apply to only those who are in the employment on the date of upward revision. Those who were in employment say in 1950, 1960 or 1970, lived, spent and save, on the basis of the then prevailing cost of living structure and pay-scale structure, cannot invoke Article 14 in order to claim the The higher pay scakjibrgught^mtB^fQr in 1980. If upward pa^^fevi|i0i|j^i^bQnade%»|ospectively on account it. 1, pi^aps no such revision would ever belmade^' suggestio^for treatihMtheJiSifdearness all6warfce/relief drawn f 1 from time;Ho time as emolume'nlslMas rejected by the Fourth Pay Commission on the principlelthatl' pension, noir"'wiould result in unex|n amounts of onlyatdiffere||^^^^^venemployee^^wingsame basic pay, referred to the Fourth. /m©0mniissi:oii report toj= expressed and noflb^eel^t^^Sl^l^^^JJ^valence between the Sfpt;iHe divergent view Central Government pensioiS^^'d^lfeXorporation pensioners. There are marked and important differences, which we have highlighted subsequently.

62. In the present case, challenge, to the expression/date "on or after the day of August, 1997" in paragraph 3(A) of Appendix IV of the Pension Rules is fiitile and pointless. Deletion or striking out of the expression "on or after the 1st day ofAugust, 1997" would not result in the outcome sought by the retired employees/associations. The prayer is for WP(C)184/2007& Connected matters Page 54 of90 •• 'ij- c^( revalorization of basic pension by merging deamess relief paid upto index of 1740 points into basic pension or by notional increase in emoluments. The prayer would require re-writing the Pension Rules including the definition of "avei-age emoluments" and Rule 35, 37 and 38 relating to computati on of the amount ofpension, deamess relief, and re-calculation of average emoluments for the period of 10 months. In case we accept the contention of the retired employees/associations, whenever there is a revision in pay after a period of every 5 years, all retired employees would,fce'ehlitleOp ^ ofbasic pension on the basis of enhanced pay scales, notwifhstanding the fact that they have retired prior to'enliancement,of. pay scales. For" reasons stated, this challenge and submission predicated on Article 14 is to be rejected.

63. The next question relates to the adequacy of pension and violation of Article 21.,|The question of adequacy;of pension is rather difficult to decide by aljudicial verdict unless the amount or figure s shown as grossly inadeqjiate, unconscionaBlc or an ajjparent case of arbitrariness and irrationality resulting in violation of Article 14 can be deciphered -- - ' and is made oUt. As in the case of pay fixation, these are matters in the executive doinain and relate to policy. While deciding the question of quantum of pension, multiple factors such as the age of retirement, the length of service of the employee, financial condition of the employer, concept of "living wage" etc. have to be taken into consideration. Pay at the time of retirement has been the factor under the pension rules for the Central Government, State Governments as well as the Corporation. Pension, more often, is calculated on the last pay drawn over the fVP(C) 184/2007 & Connected matters Page 55 of90 2017:DHC:8167-DB. prescribed period, (see paragraph 2.35 of the Fourth Central Pay Commission's Report, Part-II relating to pension).

64. Article 39 (a) of the Constitution under the Directive Principles stipulates that the State shall secure that the citizens have the right to adequate means of livelihood. The Directive Principles though not conferring a legal right require and remind the State of its duty and obligation to provide means of adequate pension and other terminal benefits. Article 43 of the^^nstitojip^refers to "living wage". The approximate^e standard of living concept of "Universal'^S£sic fifcome^" affdiits.WGOgnition as a legal right is under debate and cpnsi^lerationtir<^\

65. The questio]!|l)f?'a|;equacy (5fe)f®mfSi|?pension%foufe also take into account that a prudent pers|M|?pi®xm^ke some personal savmgs for social seculty as well as old|g|.|lQiilhould take into coilsideration the savings, wfach an social security^etc. so as to either self-employed or thd§g®empl6yed®in the private sector, have to provide for themselves and their families. They rely on savings for old age and social security. We cannot ignore these facets and aspects when the question and clamour for grant of additional or new pensionary benefits is raised by the fortunate miniscule minority on the precept of violation ofthe Right to Life under Article 21. It is not uncommon when such claims are made, not to account for the assets, savings, and capital WP(C)184/2007 & Connected matters Page 56 of90 2017:DHC:8167-DB m ' 32^ created from the earnings/salary. These assets are excluded and not adverted to, as they are meant for inheritance by the next generation.

66. Traditionally, pensions were non-alterable because the value of the money was stable. However, in the Indian context, pensions normally are revised or increased in line with the rise in the cost of living or inflation. To what extent there would be adjustment would again depend upon a number of factors. We do not think that a fixed criteria or formula, which is applicab^^^a^^Sj-Ae^oard or universally, can be adoptedandapplied.^^'^'^^M^ Y

67. Duringthe cour|^p£^tl}b&eapng^a^^ wr^n^siij^issions, counsel for the retir^'^^loyee^l following Period of Retirement Post of Retirement Executive Director 01.04.1993 3M[7].1,9§: 01.08.19 ^3|s?07}20.Q2i i dra^^bu^^ention to the 01.08.2007 20920 "3%38 ^=€6f4CSd«**48308 Zonal Manager Deputy Zonal Manager Divisional Manager WF(C)184/2007 & Connected matters 32873 43373 29622 38721 26851 34609 (li.08.2012 '31.01.2013 Page 57of90 Assistant Divisional Manager 17723 21991 25504 32615 37503 Admin Officer 16390 1994[2] 22812 28628 32903 Assistant Admin Officer 15976 18968 21652 27116 31158 Higher Grade Assistant '£f 15152^^,-20323^. 21840 25070. Assistant 3k.-<£•. ^20040 „... An illustration ofaZonari^^^a|(0t^||iring on 30.06.19^^ and another retiring oi31.08.2016 is gi^mlie Cadre Dated|^ Retiremenf^' fePensron>, ^D#Paid r- Basic Pension + DR as in September %abS-5isa;fof' 31/8/2016 Zonal Manager 30/6/1997 6325 1278 15.0325 1921[2] 25537 Zonal Manager 31/8/2016 49918 388 49.918 1936[8] 69286 WP(C)I84/2007& Connected matters Page 58 of90 It was accordingly submitted with reference to the first table that an employee who had retired,from ajiigher post of Executive Director between 1993 to 1997 would be gettingpension, which is almostequal to the pension payable to an Assistant, who had retired between 1®^ August, 2012 to 31®^ January, 2013. It isalso highlighted that there isa huge difference between the pension payable to an Assistant, who had retired between 1®^ April, 1993 to 31®^ July, 1997 and August, 2012 to 31^ January, 2013. This variation, it was urged, violates Article 14 as well as Article 21 ofcthf-IEonstitutioifr

68. Violation of 4^icle,:^Ms notmMei Out with^efer^lce to the aforesaid violate A^icl^l so as to life.&In^t|ie absence of cogent d Ja and figures, holdthat the peifsions payable Rs.2rf!|^0i kimonth do not are grossil| inadequate so right to life. Tffe challenge is not that tHe,;amount-b.eini^aif'€s.|)^ri'sionisv^^ dnd piteous, but that the pen&n^&lK^afe^^#i^an%Ha^i^a0 to others. The WP(C)184/2007 & Connected matters argument woulllMf# t£5g^$ested*"^der ^Fticle' 14 and not under Article 21 of the CtfnltilftiTonv^olMpnso^^^ 14 would not be made out for the reasons set out above, as was decided by the Constitution Bench in Indian Ex-Services League and Am. (supra), and K.L. Rathi (supra) and The State of West Bengal (supra). We are bound by the said decisions, which interpret D.S, Nakara (supra) and elucidate the ratio. The second table again would not carry the case for the same reason. The table does not take into account the fact that a Zonal Manager who retired on 31®^ June, 1997 or 31®^ August, 2016 is Page 59 of90 2^ entitled to fixation ofpension on the basis of "emoluments" as defined in the Pension Rules.

69. There is another reason which weakens the retired employees' case, though we accept this would not be a ground to decisively reject the challenge relying on Article 14 of the Constitution. Employees, who had retired before 1®^ November, 1993 had toexercise option inwriting to be covered underthe Pension Rules withinthe period stipulated and were also required to deposit the Corporation's contribution to the Contributoiy Provident Fund with simple interest @ 6% per annum. For employees who had retired on or after 1®^ November, 1993 or before the notified date, i.e. 28"^ June, 1995, the option was required to be exercised and Corporation's contribution to the Provident Fund was M'- 1 to be refunded along with interest @ 12% per annum. The employees miituj. !S- -.a already in service were also to exercise the option and authorize the •1'.. - s: Trust of the Provident Fund to transfer the entire contribution of the Corporation in their Provident Fund along with interest accrued to the credit of the Fund constituted under the Pension Scheme.

70. The Pension Scheme was not compulsory but was optional, for the retirees, who have made the present challenge.

71. The petitioners/unions were conscious and had the knowledge that every 5 years there would be a revision of pay-scales and as per the Pension Rules, the employees, who had retired prior to the revision, would not get the benefit of the said upgraded or revised scales. The pensionwouldbe computed with reference to the pay drawn or average emoluments during the last 10 months. In order to off-set the WP(C)184/2007 & Connected matters Page 60of90 72. inflationary affect and fall in the value of money, the Pension Rules had postulated deamess reliefstipulated as per the scale or formula in Appendix-IV. The purpose and object ofRule 37 read with Appendix- IV is to grant deamess relief on account ofinflation and rise in prices. Deamess relief neutralized the inflationaiy effect to ensure that the pension is adequate and fair. We now proceed to examine the difference inneutralization by grant of deamess relief and whe^ynss^ds^^ntext Appendix IV violates Article 14and inffinfijSgBtBlqual^J'he Pension Rules notified on 28 June, 1995 in Appendix-IV noted the difference in the pension payable to prior and post 1''November, 1993 retirees. This is the date on which the Pension Rules were deemed to have come into force. The AICPI-IW index on 1®^ November, 1993 was 1148. This index fl. _ 1 number became the basis for computing deamess relief in paragraph 2 • a of Appendix-IV. Paragraph 1 of Appendix-IV was applicable to employees, who had retired beforethe day ofNovember, 1993 (and after 1® January, 1986) in whose case the AICPI-IW Index of 600 points was applicable and made the basis for calculation of deamess relief. Deamess reliefpayable under paragraph 1in Appendix IV is as under:- Basic Pension Rate of Deamess Relief First 1250 0.67% ofBasic Pension WP(C)184/2007 & Connected matters Page 61 of90 2017:DHC:8167-DB next 1251 to 2000 0.55% of Basic Pension next 2001 to 2130 0.33%) ofBasic Pension Above 2130 0.17%) ofBasic Pension Deamess Relief payable under paragraph[2] in Appendix IV is as under;-

73.

74. Basic Pensien^^ Dearness Relief First ^p'O^ f i)Sli^^%ftBasic Pension r'Q^9%^^^^^i'e^ension fnep3851 to ^fl7%iofBa^P^sion Above 4100 p.09% ofBasicPension Paragraph

1997. The same is payable fo^^-e^^^M^oinjjgjsefe^bVer 1740 points in the quarterly AICPI-IW @ 0.23 percent of the basicpension. As per paragraph 1 of Appendix-IV, the neutralization formula with reference to pensioners between 1®^ January, 1986 and November, 1993 for basic pension for first Rs. 1250 per month is 0.67%, for pension in excess of Rs.1250 upto Rs. 2000 is 0.55% and for pension in excess of Rs.2000 till Rs, 2130 is 0.33%. Thereafter it gets reduced to 0.17% for the basic pension in excess of Rs.2130. For amounts upto »• WP(C)184/2007 & Connected matters Page 62 of90 2017:DHC:8167-DB oA Rs.2130 the neutralization in paragraph 1 is higher than @ 0.23% stipulated in paragraph 3(A). However, neutralization benefit of 0.17% for payments in excess of Rs.2130 is lower than 0.23% in paragraph 3(A).

75. Similarly, the equalization of 0.23% of the basic pension for employees, who had retired or died onorafter 1®^ August, 1997 till 31®^ July, 2002 for every 4 points over 1740 in the quarterly average of the AICPI-IW is higher than the neutralization provided in paragraph 2 for pension amount between Rs.3851 to Rs.4100 and above Rs.4100. Equalizatior^in^sean:wiu^^^^t\veen0.17^

76. This,inouro^ion,woiili^fyi^^^lam violate^'r^iointheD.S. -f:s Nakara's case (supra). Pensioners prior to 31®^July, 1997 face a greater '§ • VMi imi\- I or harsher impact of inflation as their basic pension is lower. -n- Neutralization of rate of deamess relief in their cases cannot be lower than that of the retirees post 31st July,1997. This unequal treatment in /"' cf computation to the detriment of pre 31 July, 1997 retirees results in discrimination and thus violates Article 14 of the Constitution. Thus, grant of higher equalization @ 0.23% of basic pension in paragraph 3(A), without extending this benefit to those in paragraphs 1 and 2 is unreasonable and discriminatory violating Article 14. Retired employees covered under paragraphs 1 and 2 are entitled to neutralization at ratio/scale as applicable and given to employees retiring post 31st July,1997. Equalization under paragraphs 1 and 2 should not be less or lower than the equalization provided in paragraph WP(C)184/2007 & Connected matters Page 63 of90 ~y^ 3(A). This finding would be in consonance with the reasoning and the ratio in D.S. Nakara (supra) as expounded and explainedsubsequently in other decisions in Krishena Kumar & Ors., (supra), Indian Ex- S^rvicesLeague, (supra), K.L. Rathi (supra), etc. The equalization or neutralization criteria specified and fixed in paragraphs 1, 2, and 3(A) relates to the matter of computation, and takes care ofthe effect of fall of the value of money and inflation. This being a matter of computation, it would be wrong and inequitable not to grant benefit of higher scale equalization as stipulated in paragraph 3(A) wherever itis more beneficial.^

77. The consequence of the difference in equalization ratio is that the retirees prior in point of time are getting the lower benefit of equalization in percentage terms as compared to retirees, who were - * If II# II •| getting a higher basic pension.!# M | % wMi. w. 4A % £«-U[4]., ®

78. We are aware that in paragraphs 1 and 2, equalization criteria has been fixed in a descending scale. There is higher equalization on the initial amounts till Rs.2130Jn ^agraph 1and Rs.3850 in paragraph 2. This would not make any difference, for we are concerned with reference to paragraphs 1 and 2 with cases of equalisation above the said figures, which must correspond and meet the equalisation given to pensioners under paragraph 3(A), who hadretired subsequently afterthe 1^ day of August, 1997and are in receipt ofa higher basic pension.

79. For the identical reasons, the pensioners in paragraph 1 should not be given deamess reliefat a ratelower thanthe pensioners in paragraph 2. The rate of deamess relief on amounts above Rs.2130/- till Rs.3850/- WP(C)184/2007 &Connectedmatters Page64of90 2017:DHC:8167-DB fixed inparagraph 1at0.17% ofbasic pension shall be enhanced tothe rate of 0.29% as specified in clause (ii) of paragraph 2. However, for pension inexcess ofRs.2130/-, rate of0.23% ofbasic pension as stated inparagraph 3(A) would apply, with effect from the applicable date.

80. We are aware and conscious of the fact that paragraphs 1 and 2 form part of the Pension Rules as originally enacted. We have, in our reasons, indicated and referred to the option exercised by the retirees covered by paragraphs 1 we would not for this reasonrefuseto grant^lieftio.®"fenstenSiliiparagraph 1incase we fmd that the ordinal --j j--., by context cf the ]prayer fbr^^^i|^^on of pension (|i account of increase m emoluments offlfeeMej employees or uMform rate of basic pension, albeit^ou|i refief for apparent violation ofmtiGlt!/1^45PFtnii(iMst •.

81. Duringthe courseofhearing, we had askedthe Corporation to submita table explaining what would be the affect in case benefit of 0.23% is given to the employees covered by paragraphs 1 and 2. Along with written submissions, the Corporation has filed annexures. As per Aimexure A, an employee, who was entitled to basic pension of Rs.5000 on retirement would be entitledto pension after giving benefit of indexation in paragraph 1 of Rs.24,681.88 and in casepercentage of 0.23% is computed on pension above Rs.2130, the pension would be enhanced to Rs.27,634.95. Similarly, in case of an employee covered ^is^iscriminat^iajid^^ an artificial distinctiont#th#'dkrimQMfeftft'^B^pnglow||^eri^on. Reference to option|ex^ised by pertinent^^d relevant in the WP(C)184/2007 & Connected matters Page 65 of90 ^3 under paragraph 2, who was given an initial basic pension ofRs.5,000, his pension on indexation under paragraph 2 would be Rs.17,286.17, whereas in case he is given benefit of indexation of 0.23% on the pension amount of Rs.3851 and upwards, he would be entitled to pension of Rs.19,489.50/- Thus, on indexation of 0.23% on the higher amounts, the retirees covered under paragraphs 1 and 2 would get greater/higher benefit. They would be entitled to the said benefit. / 82. The aforesaid direction would largely benefit the retirees on the upper end i.e. whose basic pension in case ofparagraph 1 exceeds Rs.2130 or •ir= - wpt ^ in paragraph 2 when basic pension exceeds Rs.3850. This direction would not help the retirees at the lower end where the basic pension # i., was/is less than Rs.2131 or Rs.3851. We would accept the said position, but this would not deter us from passing the order on the ground that the upper end pensioners covered by paragraphs 1 and 2 are entitled to and would get the said benefit.^c. f:

83. There is another aspect on which we feel the retired employees/associations should succeed. The retired employees/associations on being asked could not point the lowest pension being paid. Perhaps the retired employees at the lower end are not adequately represented in the associations and do not have the same "access". The Corporation was asked to specify the correct position and state the lowest/minimum amount of pension being paid under paragraphs 1 and 2. For the sake of convenience, we would like to reproduce the chart filed by the Corporation, with reference to the minimum pension prescribed under Rule 36 quoted above:- WP(C)184/2007 & Connected matters Page 66 of90 2017:DHC:8167-DB c:^ CHART SHOWING PENSION PAYABLE INLOWEST SCALE INTHE CADRE OFCLASS-IV Minimum service required to earn pension is 10 years as per Rule 14 V August IS. August IS. August IS. August. JS. August IS. August IS. January Basic at the 10"" stage inthe lowest scale (sweeper) as per wage 15455 8175 5430 3670 2150 1090 575 Basic Pension for such a person is proportionately calculated = Avg of last 10 months basic divided by 2 x, 10/33 A l/2x 15455X, ^ P •I239es^ •823[c::::;-;^ s 326 165 158 Minimum | • Basic Pensiora as per rule 36 ^ w 9 1100 720^^ 1 t375 !• Hence Basid; Pension •& Payable 1 3010 1880|;||': if. 1100 720 f75 DR as on| 1/8/2016 1 S'- 1168 %619S 1864.[5] 3221 4.'1 ?3555 3211 Total Pension payable if the pensioner has put up 10 years 3941 # 3930 3586 if the person retired after putting in 33 years service as a sweeper his terminal Basic i.e. Maximum of. - sweeper scale 51333^•^8560;^ 13140 1575 875 Pension as per Rule 35 Last 10 months avg basic /2 25275/2 12638 6665 4280 2798 1570 788 754 DR as on 1/8/2016 4903 8288 7573 7271 7023 7466 6456 Total Pension payable if the pensioner has put up 33 years 17541 14953 11853 10068 8593 8253 7210 WP(C)184/2007& Connected matters Page 67 of90 The aforesaid table indicates that a employee who had retired on 1®^ August, 2012, at the lowest end would get a minimum pension of Rs.4178 on 1®^ August, 2016 if he has put in 10 years of service or Rs.17,541 if he has put in 33 years of service. Oil the same day, an employee retiring on or before 1^^ January, 1986 would be entitled would be entitled to a minimum pension inclusive of deamess relief of Rs.3586 if he has put in 10 years of service and Rs.7210 inclusive of deamess relief if he has put in 33 years of service. Minimum basic pension is fixed under Rule 36 ^d has been revised as per the table above from time totime, from Rs.375 to Rs.720 on 1®^ August, 1992, to Rs.llOO on 1'^ August, 1997, to Rs.l480 on 1®^ August, 2002, to 'WW w: /m Rs.l880 on 1®' August, 2007 and to Rs.3010 on 1®^ August, 2012. Rule 36 states that the amount of minimum pension shall be the amounts •-B'. _:i _ specified above. Benefit of enhanced minimum pension on each • -S occasion is with reference to the date of retirement. Prior retirees have ^ 'a-i iff not been extended benefit of the increased minimum pension. We do • •'m not think that benefit of minimum pension can be restricted with reference to the date of retirement. If it is so fixed and computed, it will violate the principle of equality as expounded in D.S. Nakara, Krishena Kumar, Indian Ex-Services League and K.I. Rathi (supra). Minimum pension is a matter pertaining to liberalisation in computation of pension, and not connected with emoluments. In D.S. Nakara*s case (supra), one ofthe benefits granted tothe pre 1®^ April, 1979 retirees was the benefit ofremoval oflimit ofRs.1500 per month. Secondly, the method of computation with reference to 36 months was struck down, in favour of the period of 10 months for it was more WP(C)184/2007& Connectedmatters Page68of90 2017:DHC:8167-DB beneficial. On the same analogy and reasoning, we would hold that whenever minimum pension isenhanced, the said benefit would accrue and should begiven tothose who were drawing pension lower than the stipulated figure. Minimum pension would, to some extent, have reference to the amount required to be paid in order to simply sustain oneself. Thus, Article 21 ofthe Constitutionwould be attracted. Effect thereof would be that whenever there is an enhancement of minimum pension, the pensioners drawing lessthanthe minimum pension would J be entitled to the minimum pension so fixed. In other words, an employee, who was drawing and entitled to minimum pension of Rs.375 with effect from 1®^ August, 1986, would be entitled to minimum pension of Rs.720 with effect from 1®' August, 1992, d' 2m minimum pension of Rs.llOO with effect from 1®* August, 1997, minimum pension of Rs.l480 with effect from 1®^ August, 2002, minimum pension of Rs.1880 with effect from 1®^ August, 2007, and I St minimum pension of Rs.3010 with effect from August, 2012, if the •-a; pension being drawn inclusive of deamess relief on the respective dates was lower. Either/or principle, i.e. whichever is more beneficial, will apply. Enhancement cannot obviously work to the detriment of the post retirees.

84. With effect from the said dates on grant of the said benefit, the pensioners would be entitled to deamess relief as specified and applicable with effect from 1®^ August, 1992, 1®^ August, 1997, 1®^ August, 2002, 1®^ August, 2007 and 1'^ August, 2012, respectively. This would be fair and just and would be in consonance with the judgment WP(C)184/2007 & Connected matters Page 69of 90 2017:DHC:8167-DB and ratio in D.S. Nakara (supra) as expounded and explained in Krishena Kumar, and Indian Ex-Services League (supra).

85. The next issue that requires examination is whether there is any intelligible difference between pension payment to the Central Government employees and the retired Corporation employees or they form one class. In order to decide this question we would refer to the Pension Rules relating to creation ofthe pension fund for disbursement of pension. In D.S. Nakara (supra) in paragraph 45, the Supreme Court had stated that the liberalized scheme applicable to government employees was a non-contributory scheme and that was not a case of.iT' -•ifWlf'Q! s&'.Lr'x.. •'ii pension fund. The pension in the said case was a statutory liability of w ^ the government under the rules. Thus, a distinction was drawn by the '.E- • - i Corporation between the said position, and pension payable under the G I pension fund inthe present case.; h\\%^ fl

86. There is a basic difference between pension payable to retired Corporation employees and the Central Government employees. Pension to retired^lntM|G©|^|rnin^eifff^mplqyee is paid on current disbursement approach i.e:-^pay^as=yoTi"go" and not by the funded plan approach. (The position has changed with effect from 01.01.2004 with the introduction of the National Pension Scheme.) Under the "pay as you go" approach, the retired employee is paid pension as and when it becomes due and the outlay being provided from the current operating sources/income. It is treated as a part of current salary costs. Under the funded approach, the employer estimates the amount of future expenditure for pension and sets aside the necessary funds for it. The WP(C)I84/2007 & Connected matters Page 70 of90 2017:DHC:8167-DB funds can be contributory or non-contributory i.e. provided for by the employer alone or both by the employer and the employee. In case of a business enterprise, the "Fund" approach is preferred for obvious reasons. It reflects the correct liability obligation existing on the said date. It prevents overstatement ofoperational profits.

87. Noticing the adverse effect of the ballooning pension bill, the Central Government has introduced the contributory National Pension Scheme with effect jfrom 01.01.2004. Notwithstanding this change, the contributory National^Pensionj^'Sche^^W^s only introduced for employees jq^^iiag I^^^C^t^orgion iti;^;0.^^Equating Central '

88. In the present case, with reference to the Pension Rules in question, it.Q. -J is noticeable that there is a pension fund which is created and has to be ••1-. ff maintained in terms of Rule 5. The composition of the Fund as per •m. Rule 7 consists of the contribution made by the Corporation @ 10% per month of the pay of the employee. The expression "pay" has been defined. Investment in annuities or securities purchased out of money ofthe Fund, along with interest earned thereupon, is added to corpus of the Fimd. Under Clause (f) of Rule 7, the Corporation is mandated to provide an additional annual contribution in accordance with the provisions contained in Rule 11. Rule 11 stipulates that the Corporation shall cause an investigation to be made by an actuary into the financial condition of the Fund every year as on 31®^ March of every year. Thereupon, the additional annual contribution shall be made to the Fund to secure payment ofthe benefits under these Rules. WP(C)184/20O[7] & Connected matters Page 71 of90 Govemmei^^p&ners singleclass wouldhav|4i&pleunf^^^^^te^ukfceptable^&^uences.

89.

90. ^<r Rule 13 dealing with payments out of the Fund, has been quoted in paragraph 20 above. As per Rule 13, the Trust has to purchase annuities from the Corporation in respect of each employee or his family at the time he or his family becomes eligible for pension under the Pension Rules i.e. at the time of retirement or death of an employee. Clause (b) of Rule 13 states thatthe Trust shall, subject to availability of additionar sums in the Fund to be provided by the Corporation, purchase additional annuities as and when it becomes necessary to revise upwards the benefits payable in accordance with the Rules. As per clause (c), in the event of the benefits payable under these Rules being revised downwards, the annuities purchased under these Rules wouldbe deposited in the Fund. Thus, the Corporation has an obligation and liability to provide for corpus and contribute towards any shortfall. As per th^Corporation,^ ^ contributio^nd§r^^^f(tela) |a^|»|4n providing ad.ditional annual 'Pv' WfM -M:^iiowing extent:- Financial Year i Contnl^on^ under Rule 7(a) (10% ofthe pay ofthe employer) (Crores) (A) ^^JilffiSitional Annual Contribution under Rule 7(f) r.w. Rule 11 (Crores) Total Contribution (Crores) (A) + (B) 2013-14 272.77 4769.21* 5041.98 2014-15 340.37 4037.43** 4377.80 2015-16 1004.18# (1002.34) 3589.25*** 4593.43# (4591.59) * As per actuarial valuation reportas on 31.03.2014. WP(C)184/2007&Connectedmatters page 72 of90 91.

92. a? ** As per actuarial valuation reportas on 31.03.2015. *** Asper actuarial valuation report as on 31.03.2016. " The Pension Rules, for a good reason, do not follow the principle of "pay as you go". It provides for additional funding on actuarial basis every year. As per the Pension Rules annuities are purchased at the time of retirement or death of an employee. These annuities have a reference to the total amount, which would be payable to the retiree or his family in future. JhLef€fih®i^Hfe^subj^^ to actuarial evaluation under Rule 11. be deposited in the Fund on th^^^^f^cgKi^^^iatkm l^^p^'^ervice pension optee empl0ye"^?These^^ftS have ^s^^e'^frovided by the Corporati^'h^Pthe Trust, "^^f^^atentionofthe C<|rporationthat in case prayer made by th^|^p'|;j|f^es/associations is t^| be accepted and the (Spurt directs -pension whenever there is a revision oj^pay-sqirl|tvYi&uASi-:®nt^^^^.^jliuation by the Corporation w#li^b,e^rgauired is corr^^rA^MoW would not be restricted to pureh^ey5feanimiii^Si^(® alone, and would account for in service ei^lo^eJSatitlM^ pension and would take into consideration periodic increase in pay every five years. This may and would lead to substantial financial obligation/liability and necessary consequences. This would certainly have an adverse affect onthe profitandlossaccount andbalance sheetof the Corporation. Thus, while we accept the contention of the retired employees/associations that the Corporation is to provide for funds in case there is a shortfall and the Corporation cannot shy away from the WP(C)184/2007 & Connected matters Page 73 of90 •J

93.

94. said liability, we would accept the contention of the Corporation and the Union of India that revalorization of pension beyond the statutory or constitutional mandate has to be commercially viable. In other words, no employer can be expected to pay more than his capacity unless there is a statutory obligation or constitutional rights are violated. In the jDresent context, in the absence of any statutory right, we would observe that in case there is invidious discrimination that violates Article 14, the Corporation would be liable. The challenge predicated on Article^^^ftl^J^s^ttetdQ^or reasons stated above and thereafter has^een-li^^ted oiily i#6i We have ak^a|^g|aotice^|a| Sect^6^the Act which states tha^h^CorporatSfe^^^^^ on life^^!^^ij^ce business. c^.^ shall, once at deast in every Section 26 mandates that 1 I two year|^ cause an inves^^fej|^ n^^de by acti^ries into the financial cfilndition of theM^nsu^afle|business, includibg a valuation of the liabiMes aMfsubmEMMIgp^l^^o^^ to the Central Government. t. T?te^altiatit)n-would incMe tlfeinsion liability. This is also stipulated in 0 ofthe Rules. Actuarial valuations in the lif^msurance business are the comer stone and edifice for a viable commercial venture. In the life insurance business accounts cannot be maintained on current basis. As noticed below, the law mandates and requires that accounts be maintained on actuarial basis, keeping in mind and accounting for future projections. The principles of actuarial valuation help determine and estimate the financial liabilities on the basis of certain assumption with regard to mortality rates, investment, trends, work force profile etc. WP(C)184/2007 & Connected matters Page 74 cf90 -J. yir" Ml

95. InA.K, Bindal &Am. Vs. Union ofIndia & Ors., (2003) 5 SCC 163, on the question of economic viability and the difference between the Central Government and a commercial enterprise, which is also a State, it was held as under:-

person shall bedeprived ofhis life orpersonal liberty except according to procedure established by law. The scope and content of this article has been expanded by judicial decisions. Right to life enshrined in this article means something more than survival or animal existence. It would include the right to live with human dignity. Payment of a very small subsistence allowance to an employee under suspension which would be wholly insufficient to sustain his living, was held to be violative of Article 21 of the Constitution in State of Maharashtra v. Chandrabhan Tale [(1983) 3 SCC 387: 1983 SCC (L&S) 391: 1983 SCC (Cri) 667: AIR 1983 SC 803]. Similarly, unfair conditions of labour inPeople's Unionfor Democratic Rights v. Union ofIndia[{\m) 3 SCC 235: 1982 SCC (L&S) 275: AIR 1982 SC 1473]. It has been held to embrace within its field the right to livelihood by means which are not illegal, immoral or opposed to public policy in Olga Tellis V.Bombay Municipal Corpn\{\9^5) 3 SCC 545: AIR 1986 SC 180] But to hold that mere non-revision of pay scale would also amount to a violation of the fundamental right guaranteed under Article 21 would be stretching it too far and cannot be countenanced. Even under the industrial law, the view isthat the workmen should get a minimum wage or a fair wage but notthat their wages must be revised and enhanced periodically. It is true that on account of inflation there has been a general price rise but by that fact alone it is not possible to draw an inference that fVP(C)184/2007 &Connectedmatters Page 75 of90 2017:DHC:8167-DB the salary currently being paid tothem iswholly inadequate to lead a life with human dignity. What should be the salary structure to lead a "life with human dignity" is a difficult exercise and cannot be measured in absolute terms. It will depend upon the nature of duty and responsibility of the post, the requisite qualification and experience, working condition and a host of other factors. The salary structure of similarly placed persons working in other public sector undertakings may also be relevant. The petitioners have not placed any material on record to show that the salary which is currently being paid to them is so low that they are not / able tomaintain their living having regard tothe post which they are holding. The observations made in paras 276 and 277 mDelhi Transport Corpn. v.D.TC. Mazdoor Congress [1991 Supp (1) SCC 600: 1991 SCC (L&S) 1213: 1990 Supp (1) SCR 142] strongly relied upon by learned counsel for the petitioners, should not be read out of its context. In the said case the Court was called upon to consider the constitutional validity of Regulation 9 of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, which gave power to terminate the services ofan employee after giving one month's notice or pay in lieu thereof. The termination of services ofsome ofthe employees on the ground that they ^ V were inefficient in their work by giving one month's notice was set aside by the High Court as in its opinion Regulation 9{b) gave absolute, unbridled and arbitrary powers to the management to terminate the services of any permanent or temporary employee and, therefore, the same was violative of Article 14 of the Constitution. It was in this context that the aforesaid observations were made by one Hon'ble Judge in his separate opinion. The issue involved was not of revision of pay scale but that of termination of services which has an altogether different impact on an employee.

19. The contention that economic viability of the industrial unit or the financial capacity of the employer cannot be taken into consideration in the matter of revision of pay scales ofthe employees, does not appeal to us. The question 2017:DHC:8167-DB of revision of wages of workmen was examined by a Constitution Bench mExpress Newspaper (P) Ltd. v. Union ofIndia [AIR 1958 SC 578] having regard to the provisions ofthe Industrial Disputes Act and the Minimum Wages Act and the following principles for fixation of rates of wages were laid down; (AIR p. 605, para 73) '\1) that in the fixation of rates of wages which include within its compass the fixation of scales of wages also, the capacity of the industry to pay is one of the essential circumstances to be taken into consideration except in cases ofbare subsistence or minimumwage where the employer is boundto paythe same irrespective of suchcapacity; (2) that the capacity of the industry to pay is to be considered on an industry-cum-region basis after taking a fair cross-section ofthe industry; and (5) that the proper measure for gauging the capacity of the industry topay should take into account the elasticity of demand for the product, the possibility of tightening up the organisation so that the industry could pay higher wages without difficulty the possibility of increase in the efficiency of the lowest-paid workers resulting in increase in production considered in conjunction with the elasticity of demand for the product — no doubt against the ultimate background that the burden ofthe increasedrate shouldnot be such as to drive the employer out ofbusiness.

20. The same question was again examined m Hindustan Times Ltd. v. Workmen{AiR. 1963 SC 1332] and the Court recorded its conclusion in the following words in para 7 of the Report: (AIR p. 1336)

WP(C)184/20p[7] &Connectedmatters Page77of90 2017:DHC:8167-DB considered. For these reasons, this Court has repeatedly emphasised the need of considering the problem onanindustry-cum-region basis, andofgiving careful consideration to the ability of the industry to payr

21. It may be noticed that in these cases the Court was considering the question of wage structure for workmen who belong to an economically poor section of society and providing them even a living wage was held to be a distant dream on account of economic considerations and also the capacity ofthe industry to pay.". We would, theiefor4jfej'ect th%.argun:i^iit#1pYa|Le^^ by the retired employees di* soi^e of tHMasso^iiatwjQSA eccin^mifeviability would not be the:|eleyant criteria-l;^®^™'^^ fj:' I i

96. On the qii3stionoffmancial|im|^t|Meretiredemployees/associations have raised multifarious.^yiimenllSw are to sonie extent even contradictc^. Th^^ro^?atfe^|^i|^i^t^ an upgraded equal pensio%mfoMs%^it was submittedfi|x^^c^nstitutional right and, therefore, it wouMijnpt^^matteriffWhethtotfeCorporatio^ incurs losses or requires funding from t^^'Ce^Sl&Se^Sient. Others have suggested that in-service officers or retirees post 1997 getting higher pension should forego their rights to ensure uniformity of pension. These arguments would not justify issue of Court direction. The first submission must be rejected as insubstantial and fallacious, for reasons set out above and subsequently. The employees, both serving and retired, would not agree with the suggestion given by some of the retired employees/associations. These pensioners or in-service WP(C)184/2007 & Connected matters Page 78 of90 2017:DHC:8167-DB employees are well entitled to claim their entitlement to pension under the Pension Rules, which would givethema statutory right.

97. Difference must bealso drawn between a legal right and corresponding duty, and a moral obligation; This distinction is referred to in Krishena Kumar (supra) in the following words:-

men of goo%: object. the same eftSnt#?All actions, whether jurisdiction of morals. It is aguid?^M©]^^§J^tEe'"iMividual, as it were, by the hand through all the details of his life, all his relations with his fellows. Legislation cannot do this; and, if it could, it ought not to exercise a continual interference and dictation over the conduct of men. Morality commands each individual to do all that is advantageous to the community, his own personal advantage included. But there are many acts useful to the community which legislation ought not to command. There are also many injurious actions which it ought not to forbid, although morality does so. In a word legislation has the same centre with morals, but it has not the same circumference." same these two arts, tsc.ifiices, have WP(C)184/2007&Connectedmatters Page 79 of90

98. On the question of financial implication, the Corporation submits that on actuarial basis if the stand of the retired employees/associations is accepted, the financial implication would be to the extent of Rs.32000 Crores. The Corporation filed to affidavit and an additional affidavit to explain and affirm their stand and position. The aforesaid figure consists of actuarial evaluation of the present obligation, i.e. present pensioners as well as in service pension optees. The Pension Scheme, itself, as well as Section 26 of the Act mandates actuarial valuation for the Pension Scher^^j^Mt^^^^Se^tsiti^^we cannot ignore the financial impactsand the Corporation will have to.Jrovide imr actuarial cSlcifMion wil Hojieijen ih-s'^wice|^mployees. The ffi^e'the fiitii|pawises. Indeed, ifwe acc^f)t SSI contentio^^pfi^|||Mrfed employees/associations, they alongwitiiother retirees and||i:^^g^e officers wouldye entitled to increased'fevalorization ofivtHeM^^ after e#ry five years when the pjay comp^^x and intricate calculations.- ^h^f^itentign ofthe enipJoy^/^ssQciadons that out of Rs.32000 Crores,1^f23,58BlS%|es^i^l^p©stj,|o'r'upgradation offuture pensioners and hence is hot anaimimediite liability and will become due and payable at successive intervals and about Rs.8000 Crores is the present liability, has to be rejected as in view of the nature of the Corporation's business and the mandate in law that its accounts must be maintained on actuarial basis. The retired employees/associations have submitted that the entire cost of arrears towards the pensioners from 1997 to 2017 would be about Rs.3163 Crores, which would be one-fifth of the annual expenditure on salaries and other benefits for WP(C)184/2007 & Connected matters Page 80 of90 99. ••-• • ^;. 'jiiT. the Financial Year 2015-16. Cost offuture upgradation for the present pensioners is Rs.5135 Crores. The figures fail to account for similar benefit or equal treatment to which the in-service pension optees would be entitled. These have to be factored and accounted. Ifwe proceed on the said basis and accept the said submission, the financial implication for the Corporation will be much more for the present in-service employees, who retire in future. They too would be entitled, on the basis ofparity and equality, to the same benefit and advantage on pay increases every five ye.ar#ifffiiEur^ The retired e^^loye^kssbciatio^s had^u|)Mft||^ that the Pension Fund as per''lhe^5e|)ort f about Rs.#0® Crores interest on the i ^pq^^^ear ii^-l^ad acorpus of temnd^ also — 1 mvestmen ^. present a^d the future not for any olher purpose. Refemngto sul^ittedth^kindthen had a Corpus income of Rs.2440 Cror^s^^^tife^a^^J^H^dl^fe^^^f^nsionoutgowas merely Rs.839 difference between purchasf^ifrMliate annuity on the retirement of jopt 9% annual • ' li-' i%Mtke|^This Fund can b| used for the ^Sin fails to notice the an employee or his death, which has been treated as an expenditure or outgo. The deposit or increase in the fund cannot be computed on the outgoings towards purchase of annuity. This is the reason why the Corporation has been depositing substantial amounts towards additional annual contribution in accordance with Rule 7(f) read with Rule 11 of the Pension Rules. This contribution is based on actuarial valuation to secure payment of the pensionary benefits under the WP(C)184/2007 & Connected matters Page 81 of90 V:^'it t Pension Rules for both the in-service pension optees and retired employees. As per the Corporation, the cost of Rs.23583 Crores is recognised as a known liability and has to be funded immediately as per Projected Unit Cost Method prescribed in Accounting Standard AS-15. To highlight the aforesaid position, the Corporation has stated as under:- LIC Employees Pension Fund (in Crs) Fund at Beginning of year Investment Income Employers;|' Contributions in lieu of under m Additional Contributions under Rule 7(f) r.w. Rule Benefits paid Fund as at end of year 31/03/2013 ^,31/03/2,014 16,^4 21,Q[7].3, ^3,654.>^^ 21,073 27,039 32,578 31/03/16 32,578,2,728 I 38,925 It is pointed outthatthe additional contribution under Rule 7 (f) for the year ending 31®^ March, 2016 had come down for the contribution underRule 7(a) in the said year had increased substantially to Rs.l004 Crores firom Rs.340 Crores. The additional annual contributions will WP(C)184/2007 & Connected matters Page 82 of90 2017:DHC:8167-DB go up substantially in case the prayer of the retired employees/associations isaccepted.

100. The retired employees/associations had submitted that the present pension outgo expenses constitute a negligible or small percentage of the total premium income, i.e., it is within the range of 0.23 to 0.37% for the years 2004-05 to 2015-16. Pension outgo was a small proportion ofthe salary outgo and between 3.19 to 6.21% for the same period. Similarly, the pension[5].0.utga>,i:atio in relation to management expenses was bei^e€n -l^^^i^:i|l'^^J^^^e6h'_FinancialYears 2004- 05 and 2015-^^^Tfeco||!9|^^ con^^ submission and submits th^^^^ exp^^^^^^idingpe^ionary benefits is about nV^o^Gtotalexp^^^^fiund30%of%e'^ensesunder theHead^alaryandBenefi|3^||]^TOyees. Theyhav^ubmittedthe followingdetails:- ''>w' 1 p. V A / -'v -V ' H - Expenses in Rs. Crores i-' A > 2014-15 2014-16 Commission to. Agents (1) 14768 16681.29 15092.[1] 15477.17 Salary and other Benefits (including Pension contribution by corporation (2) 11894.[9] 14705.11 14523.44 14659.34 Other expenses(3).. 4812.75 9060.79 7869.25 8033.42 Total Expenses(4)=(l+2+3) 31475.[6] 40447.19 37484.79 38169.93 Contribution to Pension Fund (5) 3923 5042 4378 4593 WP(C)184/2007 & Connected matters Page 83 of90 % of Pension Exp to Total Expenses item no. (5)/iteni no. (4)%

12.46 12.47 11.67 12.03 % of Pension Exp to Employees Remuneration

32.98 34.29 29.67 31.35

101. The error made by the retired employees/associations is they have not computed or taken the figure of the pension outgo from the Corporation to the Fund and have treated the annuities purchased as the 2015-16, the ^06^)o|;§ti faMaci'dus.r In the Financial Year;4&93 Crores to the Pension Furif. rfSese v^efeSI^^M&er the Head 'Salary and Other Benefits tp' tJ|^iSmployeey?^^||^^ to the j^teh| of Rs.14659 Crores. '|ie payment to t^^^i^^the Corporation-Ippresents the Coiporatiln's liability and l|tgS;|l}lp, for the Financill Year 2015- 1 (iS3' 4 iSu: remuneration ^^ x>,,rproportion or percentage As far as Corporation is concem^4®^ls^^utm^th in form of payment under Rule 7(a) or additional contribution in 7 (f) is a pension outgo. This is the cost ofpension to the Corporation.

102. There is another aspect, which must be referred to and taken into account. Section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939 fixes and stipulate statutory limits on management expenditure. The said percentage or figure cannot be breached. For the Financial Year 2014-15, the ratio of actual expenses allowable in terms of Rule 17D was 83.4%. There is very little WP(C)184/2007 & Connected matters Page 84 of90 V 5^ leverage available to the Corporation which has to also ensure that the ratio is not breached now or in future because of the obligation and liabilities. The ratio ensures fair returns to the policyholders and restricts management expenses. It balances the two competing objectives and rights. As per the figures mentioned in the affidavit filed by the Corporation on 4th February, 2017, the Corporation has surplus ofRs.36,060 Crores inthe Financial Year 2014-15, which was allocated inthe form ofbonus/payment to policyholders for Rs.34,257 Crores and Rs.1803^rprS^^^^C^ip^l^^^emment. Setting aside or contributine |§2pji0-'*drores %calculation would certainlyha^e^i^e|'ative in||a|§L^

103. The that focus of the % Corporat|n appears to Sonus" payabAo the. policy hold^s^^:^nottherightso||^^^m^oners. Thefactthkpaymentof higher pe^ion would thequantum^bonus to be paid to best it would, is paid after 10have miniscuMtoij^iS©^ 15 years when m Some of the pensioners/associations had"e#iti'urged'that pensionary benefits should be left out ofthe management cost so as to not breach the stipulations ofRule 17D. Still others had urged that arrears pertain to the period 1997 to 2017 and, therefore, need not be accounted for in one year for the purpose ofRule 17D.

104. These arguments have to be noted and rejected, as farfetched, unrealistic and unreasonable. The mandate of Rule 17D of the Insurance Rules, 1939 must be adhered to, for breach of statutory WP(C)184/2007 <6 Connected matters Page 85 of90 2017:DHC:8167-DB obligations would result in penalties and would also affect and impact the financial viability ofthe Corporation. Bonus has to be paid to the policy holders and in most cases is the actual benefit which the policy holder earns over and above apremium paid by them. The suggestion would not be commercially viable or sustainable for any life insurance company, which does not offer a fixed return and pays bonus. The component or quantum ofbonus is determined and decided today. The figure, and the amount appropriated on actuarial basis, takes into accountwhat b^pay^^^^i^^^fcity^^ ^,0'%itii^^ the lontigntiori.^ of 'the retired employeestesoBiations ^^W^^^schemiis^i^scriminatoiy as the Corpcristiag-is periodi^|^Aalorization of pensiont|ManagingDire^^^SfrmanunderRulelsB,whoalso receive payment from ^ Pf Rule' 5SB, notwithslmdmg anythingib%|lll|^e pension rule# an employee appointed Act, who was in service on b^^^^a^ary, 192^^ benefit shall be calculated in accorda^^^^^^^giil^^fCentral Civil Service (Pension) Rules, 1972, C^trar"^Sivil Services (Commutation of Pension) Rules, 1981 and in accordance with the instructions issued by the Central Government thereunder fi-om time to time. The explanation of the Corporation and the Union of India is that appointments to the posts of Chairman and Managing Director are made by the Central Government under Sections 4 and 20 of the Act. These posts require approval of the Appointment Committee of the Cabinet and draw pay as per the scale ofpay applicable to the Central

105. Lastly, we Page 86 of90 Government employees. This was the position even prior to introduction ofthe Pension Rules. Chairman and Managing Director of the Corporation by notification dated 3'^'^ July, 1996, were made eligible for pension, though their salary and deamess relief were calculated on 608 index points whereas pension rules had provided for calculation of deamess relief at 1148 index points. Thus, there was an anomaly. The Central Government considered the issue and decided that there shouldbe uniformity of terms and conditions of appointment approved by the Appioiiit^nt ^mmitte^ of the Cabinet in the msurance mdust^'mcludjfp-etirenient-paeKage. W" 4'J;-

106. In view ofthe exj^anation'^'^"' the retirediemt not thiri2jhat\the contention of buid be acceptedss a ground or ^pid by the Central Govermnent J'W' ifl under th| pension mles Central|Government employee!; We have already;!^ireferr^^^ to the distinltion between pension ^pj^licable to the Central Govemnientlbmployees, and„'k6tuanai' and' annuity" method applicable to CorporationSnJ^JsffiSnif^ and parity has not been maintained between the^6ehffarGovemment employees and the Corporation employees.

107. In view ofthe aforesaid discussion, it is held as under:-

(i) Employees of the Corporation cannot be equated and claim parity or equivalence in respect of method and "content" of pension with theCentral Govemment employees. WP(C)I84/2007 & Connected matters Page 87 of90 )-r\ - •''...' • f. -X;-,. 0^

(ii) Challenge of the retired employees/associations for revalorization of basic pension or merger of deamess relief with basic pension upon re-fixation of pay scale of in-service employees relying upon Articles 14 and 21 ofthe Constitution is rejected, except to the extent of entitlement to minimum pension as enhanced/increased under the Pension Rules from time to time; and rate of equalization stipulated in paragraph 1 is lower than the rate in paragraph 2 and'rates in paragraphs 1 and 2 are lowerthan the ra$esifi^a§^^3^k^)?^

(iii) In other /. V • a) Relired|&ployees,!#h6Aar'erin[5].receipt of peksion lower than tl^imum ^^^ced from •||' time, would be entitled to berifefid6fcth%|minimum pensionIrrespective of t fillff the date of retirenieflip

I. i§,tiirection would apply only when it.is beneficialIpJ-prirflefirees. Where such benefit of em^c^^^^^i^i^^ant^y^^ "relief would com&ericf^^3^^h«5%uld"beBs!ea^^a^.^''''th^eafter as per the applicable i=iW b) Retirees prior to f "TCugust, 1997 are entitled to deamess reliefat a rate not lower than 0.23% ofbasic pension. Rate of deamess relief for pre 1®^ August, 1997 retirees cannot be lower than the rate stipulated for pensioners who had retired onor after 1®^ August, 1997 till 31®^ July, 2002. WP(C)184/2007 4& Connected matters Page 88 of90 "ivrc) Similarly, deamess relief @ 0.17% of basic pension in paragraph 1 shall stand enhanced to 0.29% for amounts between Rs.2130/- to Rs.3850/-, the rate stipulated in paragraph 2.

108. We would also clarify that payment made in teims ofinterim directions issued by the Supreme Court would not be refunded or returned to the Corporation. We have issued the said direction as the amount paid is not substantial for the Corporation,, whereas asking the retired 3ione#tOj5i®|L|i®liFaml)un|wl)uld put them in agrave financial diffiqilty^,

109. In view o^h^foresaid^^||l^^^^ allowiri^phiwrit Petitions, the Corporatidii would the pensions inlseveral cases. This wouM be a time-c should be compl^^/d3M^fil^%{fi^'tfe||^fe a copy ofthis order IS received. Arrears, if anyfwouldsbe'pai'd from the date when the first Writ Petition was filed, to all retired employees/pensioners who would be entitled to benefit of this judgment. Interest would not be payable in case, payment is made within a period of one year fi'om the date copy of this order is received. In case there is delay beyond one year interest @ 8% per annum, unless explained and justified in writing to the retiredemployee^, wouldbe payable fi"Om the date ofthisjudgment ' >C' till payment is actually made. The retired employee^ if aggrieved by WP(C)184/2007 Connected matters ffl¥. 1 f2|Meise anderrors or,a mistakes can be M t 41# 1 made. % will be open^tQ«jii0=^^p.o]pporation to prelcribe suitable 'proeedurej^iiehmaynnvolve;the_r#md4empl0yees/pensioners to submit thlifepel&s^^objections or raeifoption! -''The said exercise Page 89 of90 2017:DHC:8167-DB the writtenorderwouldbe entitled to challenge the order in accordance t I with law.

110. The writ petitions are accordingly disposed of without any order as to costs. }k, APRILa"?,201# SSNA^KR/NA (SANJIVKHANNA) JUDGE -if, (CHAlDp^iHEKHAR) JlftcE Page 90 of90