Full Text
HIGH COURT OF DELHI
EX-SERVICEMEN WELFARE UNION AND ANR. ..... Petitioners
Through: Mr. Karan Singh Bhati with Mr. Dilip Kumar, Advocates.
Through: Ms. Barkha Babbar with Ms. Dipanjali Tyagi, Advocates.
HON'BLE MS. JUSTICE DEEPA SHARMA MR. JUSTICE S. RAVINDRA BHAT
JUDGMENT
1. In this petition, the grievance urged is that of cut-off date (of 01.01.2009) envisioned by the order of the Cabinet Secretariat, Central Government dated 16.10.2009 granting pension and pensionary benefits to Special Frontier Force “SFF” personnel “at par with the Indian Army Group ‘Y’ PBORs”. They further seek consequential directions that pre 01.01.2009 veterans/retirees of the SFF should be granted service pension in accordance with the said order of 16.10.2009, disregarding the cut-off date. In short, the petitioners’ claim that by imposing the cut-off date for the reimbursement of pensionary and other retirement benefits, the Central Government has discriminated against the pre 01.01.2009 retirees. 2016:DHC:683-DB W.P.(C) 1335/2012 Page 2
2. SFF was created in the wake of the Chinese aggression in 1962 and was initially comprised only of Tibetans. Later Nepali Gurkhas too were recruited in the SFF - from 1965. The SFF was not treated as part of the Indian Army. In August 1971, for the first time, the Central Government provided terminal benefits to members of the Force introducing gratuity @ one month’s salary for each completed year of service to those serving for a minimum of two years, by Memorandum dated 26.08.1971. By a subsequent policy - embodied in the Cabinet Secretariat letter dated 20.11.1985, the Central Government enhanced the terminal benefits to 45% of the commuted value of service pension admissible to Indian Army personnel, to members of the SFF who completed at least 20 years service. The relevant extract of the said order reads as follows: - “……the President is pleased to sanction in addition to the retirement benefits indicated in this Secretariat letter dated 26th August, 1971, a lumpsum payment to the leaders/trainees of SFF, who retire rendering 20 years’ or more of service equivalent to the commuted value of 45% of service pension admissible to the Army personnel. The amount of service pension will be as specified in Annexure-II to Ministry of Defence letter No.B/38069/AG/PS[4] (a)/222/C/D (Pen/Services) dated 22nd January, 1985, and Annexure IV to Ministry of Defence letter No.B/33070/AG/PS4(a)/513/C/D (pen/service) dated 22nd February 1985 and as may be revised from time to time in respect of personnel shown against
┌───────────────────────────────────────────────────────────────────────────────────────────┐ │ Sl.No. SFF Rank Army Rank │ ├───────────────────────────────────────────────────────────────────────────────────────────┤ │ 1. Rapon Hon. Captain │ │ W.P.(C) 1335/2012 Page 2 │ │ 2016:DHC:683-DB │ │ 2. Rupon Hon. Lt. │ │ 3. Pol. Leader Sub. Major (Group-D) │ │ 4. Asstt. Po. Leader/Coy. Leader Subedar (Group-D) │ │ 5. Dy. Leader Nb. Subedar (Group-D │ │ 6. Asstt. Leader Class.I Havildar (Group-D) │ │ 7. Asstt. Leader Class-II Naik (Group-D) │ │ 8. Asstt. Leader Class-III L/Naik (Group-D) │ │ 9. Trainees Sepoy (Group-D) │ │ 10. Tibetan Female Nursing Assistant │ │ Male Nursing Assistants │ │ (Group ‘C’) │ │ *Added vide Cabinet Sectt Order │ │ No.16/12/93-EA-II dated 22 Nov 94 │ │ An Illustration, how to work out the lumpsum payment on │ │ pension commutation formula is enclosed for guidance. │ │ The expenditure involved in payment of the lumpsum amount as │ │ per para I above, will be debited to the Major Head “266 – │ │ Pension and other retirement benefits commuted value of pension │ │ “whereas the expenditure on payment of service gratuity in terms │ │ of this Secretariat letter dated 26th August, 1971, will be │ │ classified to the same Major Head, i.e., “266 – Pension and │ │ other retirement benefits – Gratuities.” │ │ 3. These orders will take effect from 6th of May, │ │ 1985.” │ │ W.P.(C) 1335/2012 Page 3 │ │ 2016:DHC:683-DB │ │ 3. By another order - dated 23.05.1996 - the Central Government acting │ └───────────────────────────────────────────────────────────────────────────────────────────┘
12. It may be mentioned that the Government of India, Ministry of Defence had been granting war injury pension to pre-1996 retirees also in terms of Para 10.[1] of the Ministry's Letter NO. 1(5)/87/D(Pen-Ser) dated 30-10-1987 (p. 59, Para 8). The mode Footnote 2 supra W.P.(C) 1335/2012 Page 23 of calculation, however, was changed by the Notification dated 31-1-2001 which was restricted to post-1996 retirees. The appellant, therefore, was entitled to the war injury pension even prior to 1-1-1996 and especially in view of the Instructions dated 31-1-2001 issued by the Government of India. The said instruction was initially for persons retiring after 1-1-1996 but later on by virtue of the subsequent Notifications dated 16-5- 2001 it was extended to pre-1996 retirees also on rationalisation of the scheme".
25. Kallakkurichi Taluk Retired Official Association, Tamil Nadu, etc. v State of Tamil Nadu19 was a case where the Supreme Court had to consider challenge to a dearness allowance component fixation formula, which had the effect of lowering the pension of those retiring after 1.06.1988. It was held that: "31. Having given our thoughtful consideration to the controversy in hand, it is not possible for us to find a valid justification for the State Government to have classified pensioners similarly situated as the appellants herein (who had retired after 1.6.1988), from those who had retired prior thereto. Inflation, in case of all such pensioners, whether retired prior to 1.6.1988 or thereafter, would have had the same effect on all of them. The purpose of adding the component of 'dearness pay' to wages for calculating pension is to offset the effect of inflation. In our considered view, therefore, the instant classification made by the State Government in the impugned Government order dated 9.8.1989 placing employees who had retired after 1.6.1988 at a disadvantage, vis-à-vis the employees who retired prior thereto, by allowing them a lower component of 'dearness pay', is clearly arbitrary and discriminatory, and as such, is liable to be set aside, as violative of Articles 14 and 16 of the Constitution of India." 2013 (4) SCR 883 W.P.(C) 1335/2012 Page 24 Thus, the general rule is that if an existing pension scheme is improved or modified, all those to whom the scheme applied (regardless of their date of superannuation) would be entitled to the benefit.
26. The respondents relied on Govt. of A.P. v. N. Subbarayudu 2008 (14) SCC 702. The Supreme Court held, in that decision, that: “There may be various considerations in the mind of the executive authorities due to which a particular cut off date has been fixed. These considerations can be financial, administrative or other considerations. The Court must exercise judicial restraint and must ordinarily leave it to the executive authorities to fix the cut off date. The Government must be left with some leeway and free play at the joints in this connection. In fact several decisions of this Court have gone to the extent of saying that the choice of a cut off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter affidavit filed by the Government, (unless it is shown to be totally capricious or whimsical)” State of Punjab Vs. Amar Nath Goel20 had confined pension benefits with reference to a cut-off date. The Court held as follows: “It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/ State Governments to limit the benefits only to employees, who retire or die on or after 1.4.1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level…….As we have already noticed, 1.4.1995 was the date suggested by the Fifth Central Pay Commission ("Pay Commission") in its Interim Report. The Central Government took a conscious stand that the consequential financial burden would be unbearable. It,
W.P.(C) 1335/2012 Page 25 therefore, chose to taper down the financial burden by making the benefits available only from 1.4.1995. It is trite that, the final recommendations of the Pay Commission were not ipso facto binding on the Government, as the Government had to accept and implement the recommendations of the Pay Commission consistent with its financial position. This is precisely what the Government did. Such an action on the part of the Government can neither be characterized as irrational, nor as arbitrary so as to infringe Article 14 of the Constitution.”
27. In P.K. Kapur (supra) the Supreme Court held that in matters of pay or pension benefits, classification is permissible and that recommendations of expert bodies such as Pay Commissions can be persuasive and acted upon without offending Article 14. In Mrs. Iacats (supra) the Supreme Court firstly explained developments after Nakara: “This decision has been subsequently explained and distinguished in a number of cases. In the case Dr. (Mrs.) Sushma Sharma etc. etc. v. State of Rajasthan & Ors. (AIR 1985 SC 1367 at 1379) this Court cited with approval the observations of this Court in Union of India & Anr. Etc. V. Parameswaran Match Works Ltd. (AIR 1974 SC 2349) to the effect that the choice of date as a basis of classification cannot always be dubbed as arbitrary unless it is capricious or whimsical….The respondent, therefore, cannot claim the benefit of a scheme which came into operation from a date subsequent to the date of her retirement. The respondent also did not contend either before the High Court or in the grounds of appeal before us that a cutoff date for grant of pensionery benefits is arbitrary or unreasonable. Even otherwise in view of the fact that a study team was first appointed and pursuant to its report certain benefits were given after considering the report of the study group would show that the cut-off date had a logical nexus with the decision to grant these benefits on the basis of the report of the study team. Fresh financial benefits which are conferred also have to be based on proper estimates of financial outlay required. Bearing in mind all relevant factors, if such a benefit is W.P.(C) 1335/2012 Page 26 conferred from a given date, such conferment of benefits from a given date cannot be considered as arbitrary or unreasonable.”
28. In Indian Ex-Servicemen League (supra), the Supreme Court described the claim made before it, in the following terms: “According to learned counsel for the petitioners, the result of the decision in Nakara is that all retirees who held the same rank irrespective of their date of retirement must get the same amount of pension and this should be the amount which was calculated and shown in the appendices to the Memorandum (Ex. P-2) challenged in Nakara. Admittedly, the appendices to that Memorandum specified the computation of pension for different ranks of retirees on or after 1.4.1979 made on the basis of the reckonable emoluments on 1.4.1979. It is also admitted that the reckonable emoluments for corresponding ranks on earlier dates were not the same to provide identical basis for recomputation of pension according to the liberalised pension scheme of pre. 1.4.1979 retirees. In substance, even though learned counsel for the petitioners do not say so, the arguments amount to the claim of `one rank, one pension' for all retirees of the Armed Forces irrespective of their date of retirement. It is also admitted that prior to this liberalised pension scheme, the pension amount of the earlier retirees from the same rank was not the same irrespective of their date of retirement or in other words, the principle of `one rank, one pension' did not apply earlier. It was stated at the Bar that the demand of `one rank, one pension' is pending consideration of the Government of India as a separate issue. It is, therefore, clear that unless the petitioner's claim in substance of `one rank, one pension' can be treated as flowing from the relief granted in Nakara, the reliefs claimed in these petitions though differently worded cannot be granted.
29. The Court had earlier noticed the issue in Nakara that there the “liberalised pension formula introduced a slab system, raised the ceiling and provided for a better average of emoluments for computation of pension and the liberalised scheme was made applicable to employees governed by W.P.(C) 1335/2012 Page 27 the Central Civil Services (Pension) Rules, 1972, retiring on or after the specified date.” It was then held that the liberalized formula of calculating pension rates, which had been extended to pre-1979 retirees in line with Nakara (supra) and that consequently, the claim for one pension for all, was untenable.
30. A reading of the decisions relied upon by the respondents reveals firstly that ipso facto, the choice of a date would not be lightly interfered with by courts on the ground of discrimination, unless it is plainly arbitrary.
31. All the decisions of the Supreme Court, right from Nakara emphasize that a distinction between beneficiaries of a new pension scheme and existing pensioners has to be kept in mind. If the benefit introduced is an improvement of an existing scheme, it cannot exclude those who retired earlier. The Supreme Court, in Krishena Kumar v Union of India21 emphasized the distinction between pensioners and CPF retirees. However, the formulation in Nakara that benefits of an improved or liberalized scheme can be given to earlier retirees, was not disturbed. That was a Constitution bench decision. In Indian Ex-Servicemen League – another Constitution Bench decision, the same distinction between a new scheme and a mere improvement was maintained. Yet another Constitution Bench iterated the same enunciation of law when it stated, in All India Reserve Bank
W.P.(C) 1335/2012 Page 28 Employees Association (supra) that a “distinction between liberalisation of an existing benefit and introduction of a totally new scheme” is to be kept in mind, while considering grievances stemming from cut-off dates that deprive pension benefits.
32. Does the impugned order introduce a new scheme, or is it an improvement of an existing scheme, which, but for the cut-off date, would have covered the members of the petitioner association who left employment before 01.01.2009. If one sees the history and chronology of the manner in which pensionary or terminal benefits were introduced, two distinct phases are noticeable. The first phase was between 1971 and 1985. During this period, there was no attempt to grant any but the bare minimum benefits to the class of employees that the petitioner represents. The benefits were only a months’ pay for each completed year of service at the end of the period of service. This changed significantly with the distribution of benefits according to the order of 1985. This proclaimed the second phase where not only was a specific reference made to benefits vis-à-vis Indian Army personnel, even rank parity was declared for the purpose. What was granted however, was not pension, but a lump sum amount equivalent to 45% of the commuted value of pension that would be payable to an Army personnel (“commuted value of 45% of service pension admissible to the Army personnel”). Even the head of expenditure is as follows: “The expenditure involved in payment of the lumpsum amount as per para I above, will be debited to the Major Head “266 – Pension and other retirement benefits commuted value of pension “whereas the expenditure on payment of service gratuity in terms of this Secretariat letter dated 26th August, 1971, will be classified to the same Major Head, i.e., “266 – Pension and W.P.(C) 1335/2012 Page 29 other retirement benefits – Gratuities.”22 There was an improvement or enhancement of the benefits, with increase in the rates as a result in the inclusion of certain other components for calculating the lump sum amounts, in 1996. It was in this background that the impugned order granted complete parity between Army personnel and those leaving the service of the Indian Government, but employed in the border from amongst Nepali and Tibetan nationals, after 01.01.2009.
33. It is not disputed- indeed the Union admits it as much – that SFF personnel have made “outstanding contribution” to the nation’s defense and security23. Their service and sacrifice is of the same order as Indian nationals who are members of the Indian Army. They do not claim to belong to the Indian Army; what they however demand is that retirement benefits and pension given to members of the SFF who retire after 01.01.2009 too should be given to them. Both these categories clearly form one class, i.e former SFF personnel. In fact, in all likelihood most of them served together. The fact that the long standing demand of SFF personnel for parity with Indian Army personnel was conceded and given effect later, is what is impeding the parity implicitly acknowledged by the impugned order.
34. The pre-existing scheme of retirement benefits entailed release of amounts with reference to the commuted value of what was payable to Indian Army personnel. In essence the earlier order of 1985 ordained the parity, which had been lacking. What however, distinguished that regime from the present one is the mode of disbursement. The Union chose one Government letter dated 20-11-1985 Para 4 of the Union’s counter affidavit, quoted earlier. W.P.(C) 1335/2012 Page 30 mode, i.e disbursement of a lump sum amount. But significantly, what was guaranteed was with reference to 45% of what the retired Indian Army personnel was entitled to receive as the commuted value of his pension. If the commuted pension value was ` 1000, a SFF retiree was entitled to ` 450/-. In the Court’s opinion, the Union’s argument that the impugned scheme introduces a new benefit altogether is without merit. The parity in rank between Army personnel and SFF personnel was brought about in 1985 itself; that parity remains and endures. That parity would ordinarily have meant disbursement of pension at par with what Army personnel were entitled to; however, for its own convenience the Union sought to make onetime payment choosing not to make out any further payouts. The situation improved, when in 1996 various elements apart from the pay alone were included for calculation of the lump sum amounts. However, the status of SFF retirees as those entitled to treatment similar to Army personnel continued. The new scheme is only an improvement, if viewed from this perspective, because it enlarges and extends the benefits – much like the 1996 memorandum and includes a whole series of other monetary elements. Besides, the mode of payout (from lump sum to monthly pension) is changed. However, the essential parity of status and entitlement based on that status, continues. In other words, the introduction of the scheme in 2009 is not a new one, but would really be a liberalized one extending the benefits of the existing one; doing away with lump sum payments on the one hand, and incurring the liability of monthly payouts.
35. This court is of the opinion that the introduction of 01.01.2009 as a cut-off in the light of the above discussion, is impermissible classification. There is no justification why this differentia is introduced, given that both W.P.(C) 1335/2012 Page 31 pre and post 2009 SFF retirees performed the same duties and stood to benefit in terms of rank parity with Army personnel, for purposes of pensionary benefits, since 1985. Arguendo some basis for such differentia, absolutely no rationale is shown for such differentiation with the object sought to be achieved, i.e monthly payment of pension. The mere ipse dixit that the Union would be burdened with greater monetary liability, rings hollow if seen from the perspective that lump sum payment meant a larger one-time payout, whereas monthly payment spreads liability rather than aggregates it.
36. The above declaration that the introduction of the date, i.e 01.01.2009 would, however, not be dispositive of the petition. This court is also conscious that the petitioners derived a one-time benefit -of a single sum payout -and are now seeking parity with pensioners, who would not secure such payouts, but rather be entitled to monthly pension. It is also a fact that the petitioners had the benefit of the lump sum amounts, which had greater value when they received it. In the circumstances, the court is of the opinion that ends of justice would be sub-served if the respondents ensure that like in the case of regular Army personnel, upon completion of the period of commutation (15 years) in the petitioners’ case, the amount commuted (i.e 45%) is restored. This would enure to the benefit of all parties, for the reason that instead of directing repayment of amounts received with some rate of interest (which would cause hardship to individuals) on the one hand and directing the Union to make full payments to the petitioners who had received lump sum payments in accordance with the prevailing scheme at rates which were somewhat higher (especially gratuity calculation) than in the case of Army personnel, - an option unforeseen by the Union and which W.P.(C) 1335/2012 Page 32 would result in burdening it- payment of the proportion which was made in proportion to the percentage of the commuted value would be the most apt in the circumstances.
37. In the light of the above discussion, the writ petition has to succeed; a direction is accordingly issued to the respondents to issue a Circular to the effect that the commuted value (45% of the commuted equivalent of pension of an Indian Army personnel) would be restored to all pre-01.01.2009 retirees, upon the completion of 15 years from the date of their superannuation. This restoration shall be made effective from the date of the scheme, i.e. 01.01.2009 and given to all those entitled to it, in accordance with the records available with the respondents, within 4 months from today. The SFF personnel would be entitled to the arrears, however, from 01.12.2011, i.e. proximate to the date of the rejection of the petitioners’ representation, leading to filing of the writ petition. This Court is aware that even according to the respondents, approximately 5727 personnel were discharged from the SFF who had rendered more than 15 years of service in SFF since its raising date, as on 31.12.2008. The writ petition is allowed in these terms. No costs.
S. RAVINDRA BHAT
(JUDGE)
DEEPA SHARMA (JUDGE) JANUARY 29, 2016