B.N.Srivastava vs STATE OF U.P.and others

The petitioner retired as Professor and Head of the Department of Ancient Indian History, Lucknow University on 22nd April, 1988. He was reemployed and was permitted to continue upto the end of session on 30th June, 1988. Thus the petitioner became entitled for pension and other postretirement benefits from 1st July, 1988. The case of the petitioner is that on 12th June, 1991 a sum of Rs. 54,190/ was paid to him towards commutation of pension which was calculated at the age of 64 years at the rupee value of 8.82 instead of at the age of 61 with rupee value of 9.81. According to the petitioner, he is entitled to Rs. 60,272.60 on account of commutation of pension. The petitioner has been paid arrears of pension from 1st July, 1988 to April, 1991 on 9th May, 1991. He has also been paid Rs. 3,382/ for May, 1991 on 30th June, 1991, Rs. 2,870/ for June 1991 on 4th July, 1991 and Rs. 3,024/ for July, 1991 on 1st August, 1991. Thus arrears of pension have been paid to the petitioner from the date of retirement till July, 1991. The University authorities have also paid a sum of Rs. 27,149.57 on 11th March, 1991 and Rs. 4,250/ on 27th June, 1991 on account of provident fund dues. The petitioner claims that the amount due to him on account of provident fund has not been paid in full and the amount payable to him as pension has also been wrongly withheld since August, 1991.

It appears that on 7th February, 1991, a G. O. was issued to the effect that the benefits of commutation of pension will be available to those teachers who have retired on or after 14th August, 1988. In view of this G. O., the Vice Chancellor, Lucknow University, wrote a letter to the petitioner on 20th November, 1991 informing him that since the date of his retirement is 22nd April, 1988, he is not entitled for commutation of pension as per existing rules and procedure. The petitioner was further informed that his representation has been forwarded by the University to the State Government to clarify the position in this respect and a reply was awaited. The petitioner was also informed that pending the Issue of G. O. regarding his eligibility for commutation of onefifth pension, he is requested to refund the balance of outstanding amount of Rs. 34,802/. This balance was worked out after making an adjustment of part of the pension paid to the petitioner on account of commutation towards pension wnich was payable to him for and after August, 1990. The contention of the petitioner is that the G.O. dated 7th February, 1990 is discriminatory and is violative of Article 14 of the Constitution and is liable to be struck down.

The claim of the petitioner for commutation of pension has been contested by the opposite parties. A counteraffidavit filed on behalf of the University indicates that the University has taken more or less a neutral attitude inasmuch as the benefit of commutation of pension has been refused by it in the case of the petitioner on account of the impugned G. O. No counteraffidavit has been filed on behalf of the State of U. P. Learned Standing Counsel stated that no instructions have been received and no counteraffidavit is being filed. He has, however, submitted that the impugned G. O. has been issued on the basis of the recommenda�tion of the Pay Commission which was accepted by the State Government, by means of resolution dated 14th August, 1988. A copy the said re�solution has been filed as Annexure23 to the writ petition. The cutoff date, 14th August, 1988 has been incorporated in the impugned G.O. on account of the fact that the resolution of the State Government, accepting the recommendation of the Pay Commission, was issued on that data. But for this fact, nothing has been stated on behalf of the State of U. P. as to why 14th June, 1988 has been selected by the State Government for providing the benefit of commutation of pension to the University teachers who have retired on or after 14th August, 1988.

In D. S. Nakara v. Union of India (1983) 1 SCC 305 it was held that pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer, nor an ex gratia payment. It is a payment for the past service rendered. It is a social welfare measure rendering socioeconomic justice to those who in the heyday of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in lurch. Pension as a retirement benefit is in consonance with and furtherance of the goals of the Constitution. It was also held that the date of retirement cannot form a valid criterion for classification. If that be the criterion, those who retire at the end of every month shall Form a class by themselves. This is too microscopic classification to be upheld for any valid purpose, hence the division with reference to date retirement is not justifiable. Therefore, any classificarion of pensioners which is artificial and arbitrary and is not based on any rational principle and whatever principle, if there be any, has no nexus to the object sought to be achieved by the classification would be violative of Article 14 of the Constitution. In this view of the matter, the eligibility for liberalised pension scheme of being in service on the specified date and retiring subsequent to that date in the impugned memoranda was struck down, with this specification that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative to all pensioners governed by 1972 Rules irrespective of the date of retirement.

The case of Nakara was considered in Krishna Kumar v. Union of India (1990)4 SCC 207. In that case the petitioners were retired railway employees who were governed by or had opted for the Railway Contri�butory Provident Fund Scheme. The provident fund scheme was replaced in the year 1957 by the pension scheme whereunder the Railways would give posterior to his retirement certain monthly pension to each retired employee instead of making prior contribution to his provident fund. The employees who entered railway service on or after 1st April, 1957 were automatically covered by the pension scheme instead of the provident fund scheme. In so far as the employees who were already in service on 1st April, 1957 are concerned, they were given an option either to retain the provident fund benefits or to switch over to the pensionary benefits on condition that the matching railway contribution already made to their provident fund accounts would revert to the Railways on exercise of the option. The case of the petitioners was that the pension scheme should be made applicable to all railway employees. The contention of the petitioners was not accepted. It was held that provident fund retirees and pension retirees having not belonged to a class, there was no discrimination. In this connection, a reference was made to Nakara''s case and it was observed that in Nakara it was never held that both the pension retirees and provident fund retirees formed a homogeneous class and that any further classification among them would be violative of Article 14. It was also held that it cannot be said that the ratio decidendi in Nakara''s case was that the State obli�gation towards its provident fund retirees must be the same as that towards pension retirees. It was also found that the pension scheme and provident fund scheme are structurally different and an imaginary definition of obli�gation to include all Government retirees as a class could not form the basis for any classification for the purposes of the case and Nakara cannot, therefore, be an authority therefor.

In the instant case, we are concerned with the case of pensioners. It is well established that Article 14 forbids class legislation but permits reasonable classification which must satisfy the twin tests of classification being founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question. In the present case the impugned G. O. has the effect of making a classification among the retired teachers of University on the basis of the date of their retirement. So far as commutation of pension is concerned, it has not been shown what is the object of such classification and in what manner the basis of classification, namely, the date of retirement has nexus with such object. Assuming that the date of retirement can be regarded as an intelligible differentia, there is nothing on record to indicate that it has any nexus with the object of classification. The fact that the date 14th August, 1988 was selected on the basis that the recommendations of the Pay Commission were made effective by the State Government on that date would not satisfy the conditions of valid classification for the purposes of Article 14 of the Constitution and would at best be arbitrary. We are, therefore, clearly of the oninion that the impugned G. O. is violative of Article 14 of the Constitution and cannot be upheld.

It may be mentioned that in writ petition no. 1252 of 1990 decided on 7th September, 1992 a learned single judge of this Court has also taken a similar view and he issued a writ of mandamus directing the opposite parties to give the benefit of commutation of pension to those teachers of degree colleges who have retired after 14th August, 1988 and to commute pension on the last emoluments drawn at the age of sixty years which is the statutory age of superannuation in their case.

We have accordingly come to the conclusion that the impugned G. O. dated 14th August, 1988 contained in Annexure15 to the writ petition is liable to be quashed. The petitioner is entitled to benefits of commutation of pension as claimed by him and the opposite parties are to be restrained from with holding payment of pension to him from August, 1991 or from making deduction of any amount from the pension paid or payable to him on account of the fact that the commutation of pension already made in his favour was not justified.

So far as the payment of dues on account of provident fund as claimed by the petitioner is concerned, we find that the matter is not disputed. Annexure17 to the writ petition shows that the Finance Officer of Lucknow University has informed the petitioner that all the missing amount has been credited to the provident fund account of the petitioner and, therefore, what, remains to be done now is to make actual payment of the same to the petitioner.

For the reasons given above the writ petition is allowed. The impugned G. O. dated 7th February, 1990 contained in Annexure15 to the writ petition is hereby quashed. The opposite parties are directed to calculate the correct amount payable to the petivioier on account of commutation of pension without taking into account the impugned G. O. and make payment of the same to him. The opposite parties are further directed not to make any deduction from the amount paid or payable to the petitioner on account of pension on the pretext that commutation of pension earlier made to the petitioner was wrongly done. Pension due to the petitioner at the usual rate since August, 1991 shall also be released and regularly paid to him by the opposite parties and the arrears shall be paid within one month. The opposite parties are also directed to make payment of the amount due to the petitioner on account to of provident fund, as indicated in Annexure17 to the writ petition, within one month from today. There shall be no order as to costs.