Keshav Singh vs State of Himachal Pradesh

Surinder Singh, J.—The petitioners, in both these petitions, were Veterinary Doctors. Petitioner Keshav Singh retired on superannuation on 30th November, 2001 from the post of Deputy Director and petitioner Bhupinder Singh Mehta on 30th April, 2003 as Joint Director from the Department of Animal Husbandry.

(ii) Admittedly, both the petitioners are receiving superannuation pension under the CCS (Pension) Rules, 1972, as applicable to the Himachal Pradesh State Government employees.

(iii) The computation pension of petitioner Dr. Keshav Singh was worked out to Rs. 8,475/- per month alongwith dearness relief granted from time to time and revision of pay w.e.f. 1.6.2006. He is receiving monthly pension (basic) of Rs. 23,000/- plus interim relief totaling Rs. 29,210/-after deduction of commuted value of pension amounting to Rs. 3,390/-. The petitioner has been receiving net monthly pension of Rs. 25,820/-, whereas petitioner Dr. Bhupinder Singh Mehta at the time of his retirement was drawing the last basic pay of Rs. 18,150/-and on average emoluments of Rs. 18,069.19 paise, his pension was fixed at Rs. 9,035/- per month commencing from 1.5.2003. After deduction of commuted pension amounting to Rs. 3,614/-, he was allowed to draw monthly pension of Rs. 5,421/-.

(iv) For the first time, the non-practicing allowance (NPA) was allowed to the Veterinary Doctors, as applicable to the Ayurvedic Doctors @ Rs. 450/- per month whose basic pay was upto Rs. 3,000/- per month and exceeding to it Rs. 600/-per month on and w.e.f. 1.4.1997. The NPA was treated as pay for the grant of various allowances such as TA/DA etc., even for calculation of retiral benefits as per the Notification issued on 8th April, 1997. Thereafter pay scales were revised and the respondent State issued Office Memorandum No. Fin (C) B(7)-4/2002, dated 10th June, 2005, with respect to the merger of 50% Dearness Allowance with basic pay of the Government employees. It reads as under:

No. Fin(C)-B(7)-4/2002 Government of Himachal Pradesh, Finance (Regulations) Department.

Dated Shimla-2, the 10th June, 2005.

OFFICE MEMORANDUM

Subject: Merger of 50% Dearness Allowance with basic pay to Government employees.

The undersigned is directed to say that the matter regarding merger of Dearness Allowance equal to 50% of pay with basic pay of the employees of the State Government was under consideration of the Government for sometime past. Now the Governor, Himachal Pradesh is pleased to order that with effect from 01.04.2004, Dearness Allowance equal to 50% of existing pay shall be merged with basic pay and shown distinctly as Dearness Pay (DP) which would be counted for calculating Retirement Benefits and Dearness Allowance and NPA to Allopathic Doctors. Consequently Dearness Allowance from 01.04.2004 would be payable at the rate of 11%.

However, all other allowances and entitlements will continue to be calculated on the basis of Basic Pay alone without taking into account the element of Dearness Pay. Dearness Pay will also not be counted for the calculation of NPA to Ayurvedic and Veterinary Doctors.

The maximum ceiling of Rs. 25,500/- for basic pay plus NPA as prescribed earlier for doctors will remain as such and the Dearness Pay will not be taken into account for reckoning this limit. In other words, the maximum limit of Rs. 25,500/- per month will comprise of Basic Pay plus NPA only.

The following examples are given for ready reference:

Employee''s

Basic pay = 7000/-

Dearness Pay (DP) = 7000x 50% = 3500

DA @ 11% on basic pay (DP) = 1155/-

Allopathic Doctors

Basic Pay = 19000/-

DP @ 50% of Basic Pay= 9500/

Basic Pay+DP = 28500/-

NPA @ 25% of 28500 = 7125/-

Basic Pay + NPA = 26125/-

Basic Pay + NPA (restricted to 25,500)

25,500/-

(Basic Pay + NPA + DP) 25500 + 9500 =35000

DA @ 11% of 35000 = 3850/-

Basic+DP+NPA+ DA @ 11%38850/-

The benefit in the shape of cash payment will be allowed with the salary for the month of June 2005 payable in July 2005 and arrears w.e.f. 01.04.2004 to 31.05.2004 shall be paid in three instalments. In the first two instalments arrears for 5 months each will be paid in August 2005 and October 2005 and the arrears for the remaining 4 months will be paid in March, 2006.

These orders will be applicable to the employees working in various Government Departments.

In so far as the PSUs/Universities /Autonomous Bodies/ Boards etc. are concerned, the managements of these PSUs/ Universities/ Autonomous Bodies/Boards etc. will decide the 50% merger after taking into consideration the Resource Scenarios of the concerned PSU/Board.

Sd/-Deputy Secretary (Fin.Reg.) to the Government of Himachal Pradesh.

The State Finance (Regulation) Department simultaneously notified following Office Memorandum dated 10th June, 2005:-

No. Fin(C)-B(7)-4/99 Government of Himachal Pradesh, Finance (Regulations) Department.

Dated Shimla-2, the 10th June, 2005.

OFFICE MEMORANDUM

Subject:

Revision of rates of Non-Practicing Allowance for Veterinary Doctors.

The undersigned is directed to say that the matter relating to revision/enhancement of rates of NPA to Veterinary Doctors notified vide No. Ahy-B(15)-14/84 dated 8.4.1997 (issued by the Animal Husbandry Department) was under the consideration of the State Government for sometime past.

After careful consideration the Governor, Himachal Pradesh is pleased to revise/ enhance the Non-Practicing Allowance in respect of Veterinary Doctors in 25% of basic pay with effect from 1st May, 2005 with the condition that the basic pay plus NPA will not exceed Rs. 25500/-month.

This enhanced 25% NPA will be a separate entity and will not be counted/ taken into account for any purpose like calculation of all allowances, dearness pay or retirement benefits.

Sd/-Deputy Secretary (Fin.Reg.) to the Government of Himachal Pradesh.

Thereafter the State Finance Department issued another notification vide OM No. FIN(C)B(7) 4/2002 dated 7th July, 2007. It reads as under:

No. Fin(C)B(7)-4/2002 Government of Himachal Pradesh, Finance (Regulations) Department.

Dated Shimla-2, the 7th July, 2007.

OFFICE MEMORANDUM

Subject: Reckoning of Dearness Pay for purpose of calculation of NPA in respect of Ayurvedic Doctors/ Veterinary Doctors and reckoning of enhanced NPA @ 25% of pay for calculation of all allowances/ pensionary benefits in respect o Veterinary Doctors.

The undersigned is directed to invite a reference to this Department''s Office Memorandum of even number dated 10th June, 2005 vide which Dearness Allowance equal to 50% of existing pay of State Government employees was merged with basic pay of State Government employees and was treated as Dearness Pay w.e.f.1.4.2004. It was also decided that this element of Dearness Pay will not be counted for calculation of NPA in respect of Ayurvedic Doctors and Veterinary Doctors. Subsequently, vide O.M. of even number dated 13th October, 2005, gross salary of Ayurvedic Doctors which they were drawing on 31.3.2004, was ordered to be protected.

Matter relating to allowing of NPA on Dearness Pay for Ayurvedic Doctors and Veterinary Doctors was under consideration of State Government for sometime past and after due consideration, it has, now been decided that with effect from 1.7.2007, the element of Dearness Pay will be taken into account for purpose of calculation of NPA in respect of Ayurvedic Doctors and Veterinary Doctors.

The undersigned is further directed to invite a reference to this Department''s O.M. bearing number Fin(C)B(7)-4/99, dated 10th June, 2005 and to say that existing NPA in respect of Veterinary Doctors was enhanced to 25% of their basic pay w.e.f. 1.5.2005 vide above O.M. It was, however, decided that this enhanced 25% NPA will not be taken into account for any purpose like calculation of all allowances, dearness pay or retirement benefits.

The matter relating to reckoning of enhanced 25% NPA of Veterinary Doctors for calculation of all allowances, dearness pay and retirement benefits was also under consideration of the State Government for sometime past and after careful consideration, it has been decided that the element of 25% NPA of Veterinary Doctors will be taken into account for calculation of all allowances, dearness pay and retirement benefits with effect from 1.7.2007.

It has been decided that the upper limit for Basic Pay plus NPA plus Dearness Pay in respect of Ayurvedic Doctors & Veterinary Doctors will be Rs. 38,500/- per month with effect from 1.7.2007.

Above decision may kindly be brought to the notice of all concerned for making pay of DP/NPA & other benefits as above accordingly.

Sd/-Deputy Secretary (Finance) to the Government of Himachal Pradesh.

Fourth respondent vide his Office letter dated 18.2.2010 revised the pension of Dr. Bhupinder Singh Mehta to Rs. 23,050/- in terms of Para 4.2 of HP Government Finance Department OM No. Finance (Pen)A(3)-1/09 Part-II dated 14.10.2009.

The benefit of the aforesaid decision of the Government circular conveyed vide Office Memorandum dated 7.7.2007 was not accorded to the petitioners, as such they made representations to the State Government to allow them the pension benefit, but it turned deaf ears.

Dr. Keshav Singh petitioner for himself as also the counsel for Dr. Bhupinder Singh Mehta vehemently argued that the issuance of aforesaid Office Memorandum dated 7.7.2007 is the result of deliberations pending for consideration for some time past and it did not carve out a class within a class. Therefore, by applying the Office Memorandum dated 7.7.2007 prospectively is violative of Article 14 of the Constitution of India, as such they are entitled for the liberalized pension scheme aforesaid from the date it came into force. He also argued that the reasons given by the Secretary (Finance) for not allowing this benefit to them were not to allow opening of Pandora''s box of all settled past cases including Ayurvedic doctors causing heavy financial liabilities and difficult to handle administratively, are factually wrong and illegal.

The stand taken up by the respondents No. 1 to 3 in their reply is that once the pension is fixed/ authorized by the Accountant General to the pensioners then only the revision of pension takes place, as per the fitment table provided by the State Government, but in the present case the element of NPA, as was admissible at the time of retirement to the petitioners and stood already included in their pension, as per the fitment table, therefore, none of the petitioners is entitled for the benefit from the retrospective dates. It is also averred that the State Government took a conscious decision to allow such a benefit with prospective effect i.e. 1.7.2007 to the employees retiring before the date. Since it is a conscious policy decision of the State Government within its prerogative based upon the financial consideration, which calls for no interference of the Court in writ jurisdiction.

Shri A.K. Bansal, learned Additional Advocate General, forcefully argued that it is a settled law that only basic pension is subject to revision from time to time and no other allowances. If the allowances are granted, it is only from the prospective date. He also argued that the petitioners are receiving revised pension w.e.f. 1.1.2006 to whatever they were held and found entitled/admissible, as per the instructions of the Government issued from time to time. It is also argued that at the time of retirement of the petitioners, there was a fixed NPA of Rs. 600/- admissible to the Veterinary Doctors, therefore, the element of NPA was taken into account for their retirement benefits being the part of their basic pay. Later on Dearness Allowance equal to 50% of existing pay was merged with the basic pay of Government employees and shown distinctly as DP, as per the decision of the State Finance Department, as such the element of DP was not taken into account for pensionary benefits because they had retired from the service prior to 1.5.2005. Thus 25% NPA was not taken into account for calculating the pensionary benefits in excess to which they were entitled. It is also argued that 25% NPA to the Veterinary Doctors was allowed for the purpose of calculation of pension on average element of pension, which was to be counted for pension in respect of doctors who retired after 1.7.2007, therefore, the claim of the petitioners to it is not justified.

The above arguments are countered by Dr. Keshav Singh, Advocate by submitting that the decision of the State Government vide Office Memorandum dated 7.7.2007 made a revision of existing pension scheme, i.e., the CCS (Pension) Rules, 1972, adopted by the State Government and it is not a new scheme, as is being projected. Therefore, such benefit is also available to all, including other employees who retire after 1.7.2007, as they constitute a homogenous class.

According to 4th respondent, the pension cases of the petitioners were finalized as proposed by the pension sanctioning authority, i.e., 3rd respondent. The revision of pension on account of merger of 50% of Dearness Allowance in respect of pensioners who retired prior to 1.4.2004 was required to be done by the concerned Treasury Officer. The pension case has further been revised on account of revision of pay w.e.f. 1.1.2006 as proposed by the respondent-Department. However, it is admitted that 25% NPA, as enhanced, was allowed to the Veterinary Doctors w.e.f. 1.7.2007, but towed the same line, as submitted by respondents No. 1 to 3 that its admissibility, calculation on DP and reckoning for pensionary benefits are applicable only to the Veterinary Doctors who are in service, retired after 1.7.2007, whereas the petitioners had retired prior to 2005 hence the element of enhanced 25% NPA to them was not available.

I have given my thoughtful consideration to the rival contentions of the parties and have gone through the record.

As already stated above, earlier the NPA was allowed only to the Ayurvedic Doctors, but thereafter respondent-State took a conscious decision to extend it to Veterinary Doctors on and with effect from 1.4.1997. Thereafter there was a revision of pay scales, as indicated in the letter dated 10.6.2005, supra, but this enhancement of 25% NPA was kept as a separate entity and was not counted/taken into account for any other purpose like calculation of allowances etc. as indicated therein. Vide Office Memorandum dated 7.7.2007 quoted above, it was conveyed that the reckoning of DP for the purpose of calculation of NPA in respect of Veterinary Doctors and reckoning of element of enhanced NPA at the rate of 25% of pay for calculation of all allowances/benefits in respect of Veterinary Doctors was allowed w.e.f. 1.7.2007, as mentioned therein and the upper limit for basic pay plus NPA plus DP of the Doctors was kept Rs. 38,500/- per month from that date. To my mind this Office Memorandum does not make any distinction to such employees retiring prior to 1.7.2007 or thereafter. Rather its careful perusal would reveal that the enhancement of 25% NPA of Veterinary Doctors would be taken into account for calculation of all allowances, DP and retirement benefits to retirees who would even retire on and with effect from 1.7.2007. Therefore, this is an upward revision of the existing benefit from the date mentioned above. No arrears are involved to the retiree doctors prior to 1.7.2007 because to that extent the scheme is prospective. All the pensioners whenever they retire, in my opinion, are covered by the liberalized pension scheme because the scheme for payment of pension to a pensioner is governed by 1972 Pension Rules. Thus, the date of retirement appears to be wholly irrelevant. As stated supra, the Office Memorandum dated 7.7.2007 is operative from the date mentioned therein and would bring under its umbrella all existing pensioners who even retired subsequent to 1.7.2007, but in case of the retirees prior to the specified date aforesaid their pension would be computed afresh in view of the liberalized scheme and would become payable in future commencing from specified date and no arrears would be payable prior to it, which would take care of the grievance of retrospectively, making a marginal difference in the case of past pensioners because their emoluments are not revised and these stood already granted to them, as per the Office Memorandum issued in the year 2005 quoted above.

The interpretation of any other decision of the State Government as ventilated by the learned Additional Advocate General, qua the Office Memorandum dated 7.7.2007, that it is applicable only to the retirees on and w.e.f.1.7.2007, is introducing a mischief and is vulnerable as denying equality and introducing an arbitrary fortuitous circumstance to a homogenous class, which can easily be severed being arbitrary and discriminatory.

The Constitution Bench of the Supreme Court in D.S. Nakara and Others Vs. Union of India (UOI), observed in paras 50 and 51 as under:

There is nothing immutable about the choosing of an event as an eligibility criteria subsequent to a specified date. If the event is certain but its occurrence at a point of time is considered wholly irrelevant and arbitrarily selected having no rationale for selecting it and having an undesirable effect of dividing homogeneous class and of introducing the discrimination, the same can be easily severed and set aside. While examining the case under Article 14, the approach is not : ''either take it or leave it'', the approach is removal of arbitrariness and if that can be brought about by severing the mischievous portion the Court ought to remove the discriminatory part retaining the beneficial portion. The pensioners do not challenge the liberalized pension scheme. They seek the benefit of it. Their grievance is of the denial to them of the same by arbitrary introduction of words of limitation and we find no difficulty in severing and quashing the same. This approach can be legitimated on the ground that every Government servant retires. State grants upward revision of pension undoubtedly from a date. Event has occurred revision has been earned. Date is merely to avoid payment of arrears which may impose a heavy burden. If the date is wholly removed, revised pensions will have to be paid from the actual date of retirement of each pensioner. That is impermissible. The State cannot be burdened with arrears commencing from the date of retirement of each pensioner. But effective from the specified date future pension of earlier retired Government servants can be computed and paid on the analogy of fitments in revised pay-scales becoming prospectively operative. That removes the nefarious unconstitutional part and retains the beneficial portion. It does not adversely affect future pensioners and their presence in these petitions becomes irrelevant. But before we do so, we must look into the reasons assigned for eligibility criteria, namely, ''in service on the specified date and retiring after that date''. The only reason we could find in affidavit of Shri Mathur is the following statement in para 5 :

"The date of effect of the impugned orders has been selected on the basis of relevant and valid considerations.

We repeatedly posed a question: what are those relevant and valid considerations and waited for the answer in vain. We say so because in the written submissions filed on behalf of the Union of India, we find not a single valid or relevant consideration much less any consideration relevant to selection of eligibility criteria. The tenor is "we select the date and it is unquestionable; either take it or leave it as a whole". The only submission was that the date is not severable and some submissions in support of it.

The Supreme Court in the above judgment further observed that it must be remembered that pension is relatable to qualifying service. It has correlation to the average emoluments and the length of service. Any liberalization would pro-tanto be retroactive in the narrow sense of the term. Otherwise it is always prospective. Assuming the Government had not prescribed the specified date and thereby provided that those retiring pre and post the specified date would all be governed by the liberalized pension scheme undoubtedly it would be both prospective and retroactive. Only the pension will be recomputed and enacted in the liberalized pension scheme and effective from the date the revised scheme comes into force. Since it was only a revision of existing scheme, not a new retiral benefit. It is an upward revision of an existing benefit. If it was a wholly new concept, a new retiral benefit, one could have appreciated an argument that those had already retired could not expect it. It could have been urged that it is an incentive to attract the fresh recruits. If it was only available to new entrants, it would be prospective at such distance. Since its introduction, it covers all those who entered in service as back as the petitioners herein. The burden to justify administrative or legislative action lies on the State. The basic principle which uniforms both Article 14 and 16 of the Constitution of India, is equality and inhibition against discrimination. Article 14 strikes at arbitrariness involving negation of equality and forbids class legislation but permits reasonable classification for the purpose of legislatiion/administration, which classification must satisfy the twin test of classification being followed 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.

In D.S. Nakara''s case (supra), the Apex Court also held that pension is a reward for past service and is not an incentive. The revision of an existing benefit stands on a different footing than a new retiral benefit. Even in case of a new retiral benefit of gratuity under the Payment of Gratuity Act, 1972 past benefit is taken into consideration when the revised pay scales are introduced from a certain date all existing employees are brought on to the revised scales by adopting a theory of fitment, the increments for past service and benefit of revised pay scales is not limited to those who entered into service subsequent to that date. But if the existing pension is liberalized by adding some new benefit it cannot be denied to those who retired earlier. Therefore, I do not find any substance in the contentions raised by the respondents that the Office Memorandum dated 7.7.2007 is applicable to future retirees creating a class within a class because the petitioners and the retirees on and w.e.f. 1.7.2007 constitutes a homogenous class.

It is well settled that whenever a classification is held to be impermissible and the measure can be retained by removing the unconstitutional portion of classification, by striking down words of limitation, the resultant effect may be of enlarging the class, that is, what is called reading down the measures.

Non-contributory pension under 1972 Rules is a State obligation. It is an item of expenditure voted year to year depending upon the number of pensioners and the estimated expenditure. Now when the liberalized pension scheme was introduced, it is justifiably assumed that the government servants would retire from the next day of the coming into operation of the scheme and the burden will have to be computed as imposed by the liberalized scheme. Even the government has been granting since nearly a decade temporary increases from time to time to pensioners. Therefore, there will be a marginal difference as the old pensioners are on the way out and their number is fast decreasing. This number will keep on dwindling. Therefore, the financial burden is no ground which could detract the government from covering pre 2007 pensioners.

In V. Kasturi Vs. Managing Director, State Bank of India, Bombay and Another, the Supreme Court observed that if the person retiring is eligible for pension at the time of his retirement and if he survives till the time of subsequent amendment of the relevant pension scheme, he would become eligible to get enhanced pension or would become eligible to get more pension as per formula of computation of pension subsequently brought into force, he would be entitled to get the benefit of the amended pension provision from the date of such order as he would be a member of the very same class of pensioners when the additional benefit is being conferred on all of them. In such a situation, the additional benefit available to the same class of pensioners cannot be denied to him on the ground that he had retired prior to the date on which the aforesaid additional benefit was conferred on all the members of the same class of pensioners who had survived by the time the scheme granting additional benefit to these pensioners came into force. It was observed that the line of decisions tracing their roots to the ratio of Nakara''s case (supra), would cover this category of cases.

In my opinion, the object sought to be achieved by the Office Memorandum dated 7.7.2007 is not to create a class within a class, but to ensure that the benefit of pension was made available to all persons of the same class equally. The decision of the State Government as projected or to hold otherwise would cause violation to the provisions of Article 14 of the Constitution. It is well settled law that when there is a clear violation of a statute or a constitutional provision or there is arbitrariness in the ''Wednesbury sense'', the Court has every right to interfere even with the policy decisions.

In the instant case, as already discussed above, the denial of the benefit of the liberalized pension scheme to the petitioners who form a homogeneous class cannot be classified by arbitrary fixing an eligibility criterion of date unrelated to the purpose of revision of pension. Therefore, for the above reasons, both these writ petitions are allowed and the respondents are directed to pay the petitioners the enhanced retirement benefits on emoluments of 25% NPA on and w.e.f. 1.7.2007 irrespective of their date of retirement. The due and admissible arrears shall be paid/ released to each of the petitioners within three months from the date of production of the copy of this judgment. Pending application(s), if any are also disposed of.