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Supreme Court of India
Himachal Road Transport … vs Himachal Road Transport … on 22 February, 2021Author: Ashok Bhushan
Bench: Ashok Bhushan, R. Subhash Reddy
C.A.No.7230/2012
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7230 OF 2012
Himachal Road Transport
Corporation & Anr. …Appellant(s)
vs
Himachal Road Transport Corporation
Retired Employees Union ..Respondent(s)
J U D G M E N T
R.SUBHASH REDDY,J.
1. This appeal is filed by the Himachal Road
Transport Corporation and another, aggrieved by the
judgment and Order dated 08.01.2009, passed by the
High Court of Himachal Pradesh, at Shimla in CWP No.
1362 of 2001.
2. The Himachal Road Transport Corporation is
Signature Not Verified
MEENAKSHI KOHLI
Date: 2021.02.22
established under The Road Transport Corporations Act,
Digitally signed by
16:16:29 IST
Reason:
1950. The employees of the Corporation were governed
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by the Contributory Provident Fund Scheme (CPF). The
appellant-Corporation introduced a Pension Scheme in
the year 1995, by issuing a Notification dated
06.10.1995 and adopted Central Civil Service (Pension)
Rules, 1972. The second appellant has approved the
Scheme formulated by the Corporation. The Pension
Scheme was given effect to from 05.06.1995, that is
from the date on which Scheme was approved by the
Cabinet/ Government. For the employees who retired
from 05.06.1995, till the date of notification, i.e,
06.10.1995 and for the employees in service, an option
was given either to opt for Pension Scheme, or to
continue under the Contributory Provident Fund. Clause
5 of the Scheme, stipulates eligibility criteria to
opt for Pension Scheme.
3. The respondent-Union, consisting of the employees
who retired prior to 05.06.1995, approached the
Administrative Tribunal by filing Original Application
in OA (D) No. 237/1996, for grant of following
reliefs:
“i) That the cut off date for grant of
pension to those employees who were in
service of the Corporation as on June 5,
1995 be quashed and set aside;
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ii) That the applicants i.e. pre June
5, 1995 employees, may be held entitled
for pension as the other similarly
situated employees between June 5, 1995
to October 6, 1995 have been given the
benefit as per Clause 5 of the said
Scheme;
iii) That the action of the respondents
Corporation in denying pension to the
applicants may be declared illegal,
unjust, unreasonable, arbitrary and
violative of Article 14, 16, 21.”
The respondent-union, relying on a judgment of this
Court in the case of D.S. Nakara & Ors. v. Union of
India1 and several other judgments, pleaded that the
fixation of cut-off date was arbitrary and
discriminatory.
4. The appellants have contested the Original
Application, filed by the respondent-Union, inter alia
pleading that they have introduced a Pension Scheme to
the employees of the Corporation, with effect from
05.06.1995, on which date Cabinet has approved the
Scheme. It was the plea of the appellants that all the
employees of the Corporation, who retired prior to
05.06.1995, were already paid all the retiral benefits
including the benefit of Contributory Provident Fund,
as such the cut-off date fixed, i.e, 05.06.1995, for
1 AIR 1983 SC 130 = (1983) 1 SCC 305
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C.A.No.7230/2012
implementing the Pension Scheme, was not
discriminatory.
5. The Himachal Pradesh Administrative Tribunal, by
judgment dated 19.06.2001, dismissed the Original
Application filed by the respondent-Union, by holding
that the appellants are entitled to fix the cut-off
date for introducing the Pension Scheme for its
employees and such fixation is not discriminatory. It
was held that all the employees of the Union, who were
governed by the Contributory Provident Fund, on their
retirement, have already availed the benefit of such
fund. It was further noticed by the Tribunal that, as
the Cabinet has approved the Scheme in its meeting
held on 05.06.1995 as such, the Scheme was given
effect to from such date. By recording a finding that
the employees who were already retired prior to
05.06.1995, constitute a different category and are
not similarly placed as those employees who were in
service of the appellant-Corporation as on 05.06.1995,
dismissed the Original Application.
6. The respondent-Union, aggrieved by the judgment
and Order of the Administrative Tribunal, approached
the High Court of Himachal Pradesh, at Shimla, by way
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C.A.No.7230/2012
of Civil Writ Petition No. 1362 of 2001. In the Writ
Petition filed, mainly it was the case of the
respondent-Union that, the cut-off date, i.e,
05.06.1995, fixed by the Corporation for
implementation of Pension Scheme is discriminatory and
has no reasonable nexus with the object sought to be
achieved. It was the plea of Union that all the
employees of the Corporation, constitute a homogeneous
class and there cannot be a classification within the
class. By impugned judgment and Order dated
08.01.2009, the High Court has allowed the Writ
Petition, by quashing the cut-off date, on the ground
that no reasons were forthcoming from the appellant-
Corporation, for picking up the cut-off date, i.e,
05.06.1995, for implementation of Pension Scheme.
Further, High Court has declared that the Scheme
which was notified on 06.10.1995, shall apply to the
members of the respondent-Union and other similarly
situated persons, with a condition that they will have
to deposit the amount received by them under the
Contributory Provident Fund Scheme, within a
reasonable time. The High Court has set aside the
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Order of the Administrative Tribunal dated 19.06.2001,
passed in OA (D) 237/1996.
7. Aggrieved by the said judgment and order passed by
the High Court, the Road Transport Corporation is
before us, by way of this civil appeal.
8. We have heard Sri Himanshu Tyagi, learned counsel
appearing for the appellant-Corporation and Sri M.C.
Dhingra, learned counsel appearing for the respondent-
applicant.
9. It is contended by Sri Himanshu Tyagi, learned
counsel for the appellant-Corporation that, though
there is no discrimination in fixing the cut-off date,
i.e, 05.06.1995, by way of Notification dated
06.10.1995, the High Court has allowed the writ
petition, without assigning valid reasons. It is
submitted that the employees who retired prior to
05.06.1995, by availing the benefit of Contributory
Provident Fund Scheme, constitute a separate class.
After availing the benefit of Contributory Provident
Fund Scheme, on their retirement, it is not open to
plead that Pension Scheme, as notified for the
existing employees and the employees retired between
05.06.1995 and 06.10.1995 is discriminatory. The
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C.A.No.7230/2012
employees who retired prior to 05.06.1995, and the
employees presently in service, cannot be treated as a
homogeneous class. It is submitted that, it is always
open for the employer to extend further benefits to
the employees prospectively. When such Scheme is
introduced with effect from the date of its approval,
i.e, 05.06.1995, same is rightly not extended to the
employees who retired prior to 05.06.1995. The Pension
Scheme was approved by the Cabinet on 05.06.1995, as
such it cannot be said that such a fixation is either
arbitrary or illegal.
10. On the other hand, Sri M.C. Dhingra, learned
counsel appearing for the respondent-applicant, has
submitted that there is absolutely no reason or
justification for fixing the cut-off date, i.e,
05.06.1995, for implementation of Pension Scheme. It
is submitted that all the employees of the Corporation
constitute one homogeneous class and the appellant-
Corporation should not have made any distinction among
such class of employees. It is submitted that, as no
valid reasons have been assigned by the appellant-
Corporation, for fixing the cut-off date, as such the
High Court has rightly allowed the Writ Petition and
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C.A.No.7230/2012
there are no grounds to interfere with the same.
Further submissions of learned counsel for the
respondent is that, though the Pension Scheme was
notified vide Notification dated 06.10.1995, same was
given effect to retrospectively from 05.06.1995, as
such there is no reason for not extending such benefit
to the employees who retired prior to 05.06.1995 also.
With the contentions, as referred above, learned
counsel prayed for dismissal of the civil appeal.
11. Having heard the learned counsels on both sides,
we have perused the impugned order of the High Court,
the order passed by the Tribunal and other material
placed on record.
12. Before entering into the contentious issue of
fixation of cut-off date, for extending the benefit of
Pension Scheme by the Corporation, we need to notice
certain factual aspects emerging from the pleadings of
the parties and other material on record.
13. The members of the respondent-Union were initially
employed by the Mandi- Kullu Road Transport
Corporation. By Order dated 24.09.1974, the said
Corporation was re-named as “Himachal Road Transport
Corporation” and vide notification dated 01.10.1974,
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C.A.No.7230/2012
the Himachal Pradesh State Government has taken over
the services of such employees with effect from
02.10.1974. All the members of the respondent-Union,
who were retired, were governed by the Contributory
Provident Fund Scheme, after their services were taken
over by the Corporation with effect from 02.10.1974.
The State Government has notified the Pension Scheme
on 06.10.1995, however, the same was made applicable
with effect from 05.06.1995. The Administrative
Tribunal, by drawing a distinction on the facts from
the case of D.S. Nakara1 and other judgments relied on,
on behalf of the respondent, has held that the point
which arises in the instant case is different from the
cases relied upon. The Tribunal has held that the
members of the respondent-Union were governed by the
Contributory Provident Fund and had, on their
retirement, availed such benefit whereas the Scheme of
pension was made applicable with effect from
05.06.1995, as per the Notification dated 06.10.1995.
The Tribunal, by recording a finding that the
employees who already retired by availing the benefit
under the Contributory Provident Fund Scheme,
constitute a different category and are not similarly
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C.A.No.7230/2012
placed as those employees who were in service of the
Corporation on 05.06.1995, on which date the Scheme
was approved, has dismissed the Original Application.
14. When the order of the Tribunal, rejecting the
claim of the respondent-Union was challenged, by way
of Civil Writ Petition, the High Court, by referring
to certain cases decided by this Court, without any
independent assessment on the issue in question, has
allowed the writ petition, by impugned order.
15. In the case of D.S. Nakara1, this Court had
treated the pension retirees only, as a homogeneous
class and all the pensioners governed by The 1972
Rules, were treated as a class, because payment of
pension was a continuing obligation on the part of the
State, till life long to the pensioners, unlike the
beneficiaries of the Contributory Provident Fund. In
the said case, it was never held that the pension
retirees and the employees in service, constitute a
homogeneous class. In the case of R.L Marwaha v. Union
of India and others2, this Court has held that fixing
of a date for grant of benefit, must have nexus with
the object sought to be achieved. There cannot be any
2 1987(4) SCC 31
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dispute on the proposition. Further, the case of Union
of India and another v. Deoki Nandan Aggarwal3, relates
to fixation of cut-off date, for grant of liberalized
Pension Scheme. Even in the case of Subrata Sen and
others v. Union of India and others4, where a cut-off
date was fixed for the purpose of applicability of
revised pension scheme this Court has held that all
retired employees constitute one homogeneous class and
there cannot be cut-off date fixed to extend such
benefits. All the above said cases which are referred
to and relied on by the High Court are not relevant
and cannot be pressed into service, to decide the
issue which arises on the facts of this case.
16. Though there are long line of cases, where
validity of fixation of cut-off date is considered by
this Court, we confine and refer to the case law which
is relevant to the facts of the case on hand. In the
case of State of Punjab v. Amar Nath Goyal5, while
examining the validity of cut-off date fixed for grant
of benefit of increased quantum of death-cum-
3 1992 Supp. (1) SCC 323
4 (2001)8 SCC 71
5 (2005)6 SCC 754
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retirement gratuity, this Court has held that the
financial constraint pleaded by the Government, was a
valid ground for fixation of cut-off date and such
fixation was not arbitrary, irrational or violative of
Article 14 of the Constitution. While differentiating
the facts with the case of D.S. Nakara1, this Court
held in para 29 of the judgment, which reads as under:
“29. D.S. Nakara1 which is the
mainstay of the case of the
employees arose under special
circumstances, quite different from
the present case. It was a case of
revision of pensionary benefits and
classification of pensioners into
two groups by drawing a cut-off line
and granting the revised pensionary
benefits to employees retiring on or
after the cut-off date. The
criterion made applicable was “being
in service and retiring subsequent
to the specified date”. This Court
held that for being eligible for
liberalised Pension Scheme,
application of such a criterion is
violative of Article 14 of the
Constitution, as it was both
arbitrary and discriminatory in
nature. The reason given by the
Court was that the employees who
retired prior to a specified date,
and those who retired thereafter
formed one class of pensioners. The
attempt to classify them into
separate classes/groups for the
purpose of pensionary benefits was
not founded on any intelligible
dirrerentia, which had a rational
nexus with the object sought to be
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C.A.No.7230/2012
achieved. However, it must be noted
that even in cases of pension,
subsequent judgments of this Court
have considerably watered down the
rigid view taken in D.S. Nakara1 as
we shall see later in T.N.
Electricity Board v. R.Veerasamy
(“Veerasamy”). In any event, this is
not a case of a continuing benefit
like pension; it is a one-time
benefit like gratuity.”
17. In the case of Govt. of Andhra Pradesh
& others v. N. Subbarayudu & others6, by noticing that
a rigid view was taken in the case of D.S. Nakara1,
this Court has considerably watered down the same and
has held that fixing the cut-off date is an executive
function based on several factors like economic
conditions, financial constraints, administrative and
other circumstances. This Court further held that even
if no reason is forthcoming from executive, for
fixation of a particular date, it should not be
interfered by Court, unless cut-off date leads to some
blatantly capricious or outrageous result.
18. In the case of Suchet Singh Yadav and others v.
Union of India and others7, of which one of us is a
party, (Hon’ble Ashok Bhushan,J.), while examining the
6 (2008)14, SCC 702
7 (2019)11 SCC 520
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claim of commissioned officers of defence forces, i.e,
Army, Air force and Navy, who retired prior to
01.01.1996, for grant of next higher pay scale, on the
strength of Order of Government of India dated
21.11.1997, which was issued in consequence of
implementation of Fifth Pay Commission Report, this
Court has not accepted the plea of discrimination. In
the said judgment, it is held that pensioners, for
purposes of pension, constitute one class and schemes
which classify pensioners on basis of cut-off date are
impermissible unless such classification is founded on
some rational principle. On the facts of the case, in
the aforesaid judgment it is held that the Order which
was issued by the Government of India on 21.11.1997,
is applicable only to existing officers and not
retirees. Further in the case of All Manipur
Pensioners Association by its Secretary v. The State
of Manipur and others8, of which, one of us is a party,
(Hon’ble M.R.Shah,J.), when validity of Office
Memorandum dated 21.04.1999, issued for revising the
quantum of pension by fixing the cut-off date on
01.01.1996 is questioned, this Court has held that all
8 (2019)9 Scale, 282
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C.A.No.7230/2012
pensioners form only one homogeneous class and held
that such a fixation of date for extending the
benefits of revised benefits to the pensioners, is
arbitrary and violates Article 14 of the Constitution.
19. Coming back to the facts of the case on hand, by
applying the case law which is referred above, it is
clear that all the members of the respondent-Union,
while in service, were governed by Contributory
Provident Fund Scheme. All those employees who retired
before 05.06.1995, were paid all retiral benefits,
applicable to them. As the Pension Scheme was not in
existence during the relevant time, it was not the
case of violation of any service conditions either.
The Pension Scheme is introduced by way of
notification dated 06.10.1995, by giving effect from
05.06.1995, on which date the Cabinet has approved the
Scheme. The employees who were governed by the
Contributory Provident Fund Scheme and retired prior
to 05.06.1995 and the employees who were in service
and continued after 05.06.1995, of the appellant-
Corporation, cannot be treated as a homogeneous class.
The retired employees, who were governed by the
Contributory Provident Fund Scheme, on their
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C.A.No.7230/2012
retirement had already received the benefits of such
Scheme, constitute different class than those
employees who were in service as on 05.06.1995. There
is a valid reason for giving effect to the Pension
Scheme from 05.06.1995, though the notification was
issued on 06.10.1995. The cut-off date, i.e,
05.06.1995 is fixed on the ground that the Cabinet has
approved the Scheme from such date. As already noticed
above, it is always open for the employer to introduce
new Schemes and benefits, having regard to financial
health of the employer. Whenever such new benefit is
extended for the existing employees, retired employees
cannot seek such benefit, merely on the ground that
they too were the former employees of the Corporation.
In spite of specific plea of the appellant-Corporation
that the benefit of the Scheme was extended from
05.06.1995, in view of approval granted by the Cabinet
to the Scheme, the High Court has erroneously recorded
a finding that no reason has been assigned to choose
such cut-off date. It is true that all pensioners
constitute one class and whenever, revision is
effected, ordinarily such benefit is to be extended to
all the pensioners but at the same time, the scenario
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C.A.No.7230/2012
in the case on hand, is totally different. On the
facts of this case, it is to be noticed that when the
members of the respondent-Union retired, there was no
Pension Scheme at all. They were merely governed by
the Contributory Provident Fund Scheme and, on
retirement, they were already granted the benefit of
such Scheme. In that view of the matter, only on the
spacious plea that all the employees of the
Corporation constitute homogeneous class, cannot
question the cut-off date fixed for grant of Pension
Scheme.
20. It is profitable to refer a judgment of this
Court, in the case of State of Rajasthan and Another
v. Amrit Lal Gandhi and others9. The ratio decided in
the said case is identical to the issue on hand in the
present case. In the aforesaid case, pursuant to
recommendations made in the year 1986, by a committee
appointed by University Grants Commission, the
Syndicate and Senate of the University has recommended
for introducing a Pension Scheme for the employees of
the University. The State Government’s approval was
sought, which was given for introducing the Scheme
9 (1997) 2 SCC 342
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C.A.No.7230/2012
with effect from 01.01.1990. When such fixation of
cut-off date from 01.01.90 was found fault with, by
the High Court and the High Court issued directions to
give effect from 01.01.1986, while reversing the
judgment of the High Court, this Court has held that
fixation of cut-off date from 01.01.1990 cannot be
said to be arbitrary or discriminatory. Relevant
paragraph Nos. 16 and 17 of the judgment, read as
under:
“16. Applying the ratio of the aforesaid
decisions to the present case, we find no
justification for the High Court having
substituted the date of 1-1-1986 in lieu of
1-1-1990. It is evident that for introducing
a pension scheme, which envisaged financial
implications, approval of the Rajasthan
Government was required. In the letter of
16-4-1991, written to the Vice-Chancellors
of different universities of Rajasthan, it
was stated as follows:
“As per the direction in regard to the
aforesaid subject, the State Government has
decided to introduce Pension Scheme in the
Universities of the State w.e.f. 1-1-1990.
In this regard the State Legislature has
passed University Pension Rules and General
Provident Fund Rules. Therefore, by
enclosing a copy of University Pension
Regulations and General Provident Fund
Regulations with this letter, it is
requested that by obtaining approval of the
competent body or Syndicate of the
University, these Regulations be implemented
in the University together and necessary
information regarding implementation be
intimated.”
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C.A.No.7230/2012
17. The Syndicate and Senate of the
University, when they had forwarded their
recommendations in 1986, did not contain a
specific date with effect from which the
pension scheme was to be made applicable.
Their recommendations were subject to
approval. The approval was granted by the
Government, after the State Legislature had
passed the University Pension Rules and
General Provident Fund Rules. The Government
had stated in its affidavit before the High
Court that the justification of the cut-off
date of 1-1-1990 was “wholly economic”. It
cannot be said that the paying capacity is
not a relevant or valid consideration while
fixing the cut-off date. The University
could, in 1991, validly frame Pension
Regulations to be made applicable
prospectively. It, however, chose to give
them limited retrospectively so as to cover
a larger number of employees by taking into
account the financial impact of giving
retrospective operation to the Pension
Regulations. It was decided that employees
retiring on or after 1-1-1990 would be able
to exercise the option of getting either
pension or provident fund. Financial impact
of making the Regulations retrospective can
be the sole consideration while fixing a
cut-off date. In our opinion, it cannot be
said that this cut-off date was fixed
arbitrarily or without any reason. The High
Court was clearly in error in allowing the
writ petitions and substituting the date of
1-1-1986 for 1-1-1990.”
21. The High Court, without noticing the difference of
factual background, in the cases relied on by the
respondent-writ petitioner and without independently
considering the issue in question, has allowed the
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writ petition. In view of the same, we are of the view
that judgment of the High Court deserves to be set
aside.
22. Accordingly, this civil appeal is allowed.
Judgment of the High Court dated 08.01.2009, passed in
Civil Writ Petition No. 1362 of 2001 is set aside,
consequently said writ petition stands dismissed, with
no order as to costs.
…………………….J.
(ASHOK BHUSHAN)
…………………….J.
(R. SUBHASH REDDY)
…………………….J.
(M.R. SHAH)
NEW DELHI;
February 22,2021
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