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CASE NO.:

Appeal (civil) 6449-6450 of 2005

PETITIONER:

Central Organisation of Tamil Nadu Electricity Employees

RESPONDENT:

Tamil Nadu Electricity Board

DATE OF JUDGMENT: 21/10/2005

BENCH:

B.N. Srikrishna & C.K. Thakker

JUDGMENT:

JUDGMENT

SRIKRISHNA, J.

Leave granted in all the Special Leave Petitions.

The issue of law to be decided in the present matter is: Whether an

establishment can modify pensions (and connected benefits) payable to

employees without first changing the Regulations that govern those

pensions? In other words, can pensions be changed (particularly, when the

change is to the detriment of the employees concerned) without recourse to

the proper procedure prescribed for changing them?

This group of appeals by special leave raises the same issues of facts and

law for a decision by this Court. Hence, they can all be dealt with by a

common judgment. For the sake of convenience, the facts shall be mentioned

from the appeal arising out of Special Leave Petition (Civil) Nos.

3759-3760/04.

A Survey of the Facts

These appeals have been filed by a registered Trade Union, which represents

nearly 30,000 employees of the Tamil Nadu Electricity Board ("the Board").

Prior to 1.7.57, the State of Tamil Nadu was departmentally carrying on the

work of distribution and supply of electric energy. On 1.7.57, the Board

was constituted by the State Government under Chapter III of the

Electricity (Supply) Act, 1948 ("the 1948 Act"). The employees of the Board

consisted of two different classes: (i) Employees who were already employed

by the State Government and were taken over into the service of the Board

upon its constitution; and (ii) Employees directly recruited by the Board

after its constitution. In exercise of its powers under Section 79(c) of

the 1948 Act, the Board brought into force a set of regulations styled as

the "Tamil Nadu Electricity Board Liberalised Pension Regulations, 1960"

("1960 Regulations") with effect from 1.7.60. These Regulations dealt with

the conditions of service specifically pension and death-cum-retirement

gratuity. Under Regulation 3 of the 1960 Regulations, the qualifying

service for earning pension was a period of thirty years.

The 1960 Regulations also contained a Savings Clause incorporated in

Regulation 9, which reads as under:

9. SAVING

(i) No provision in the Civil Service Regulations shall, so far as it

is inconsistent with any of the provisions of these regulations have any

effect.

(ii) Save as otherwise provided in these regulations, the provisions in

these regulations, shall be in addition to and not in derogation of the

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provisions in the Civil Service Regulations as amended from time to time by

the Government of Tamil Nadu."

The Board had its own Pension and Provident Fund Schemes, which, in the

opinion of the State of Tamil Nadu, gave to the employees benefits which

were on the whole not-less-favourable than the benefits provided under the

Employees' Provident Fund Act, 1952 or the Employees Provident Fund Scheme,

1952. Hence, the State Government by Government Order ("G.O.") No. 988

(dated 13.7.70) exempted, under Section 17(1)(b) of the Employees'

Provident Fund Act, 1952, the establishment of the Board from the operation

of all the provisions of the Employees' Provident Fund Scheme, 1952 framed

under the provisions of the Employees' Provident Fund Act, 1952. The

exemption was, however, subject to the conditions specified in the G.O.

itself.

Further, by Central Government notification dated 25.6.1986, exemption

under Section 17(14) of the Employees' Provident Funds and Miscellaneous

Provisions Act, 1952, was granted from the operation of all the provisions

of the Employees' Family Pension Scheme, 1971 on the ground that the

benefits in the nature of Family Pension under the Tamil Nadu Electricity

Board Employees' Family Pension Regulations, 1964 ("Family Pension

Regulations, 1964") were not-less-favourable than the benefits provided

under the Employees Family Pension Scheme, 1971. While granting this

exemption, a specific condition was imposed by clause (4) enumerated to the

Schedule to the notification, which reads as under:

"(4) No amendment to the provision of the said regulations shall be made

without the prior approval of the Central Provident Fund Commissioner and

there (sic) any amendment is likely to affect adversely the interest of the

employees of the Board the Central Provident Fund Commissioner shall before

giving his approval give reasonable opportunity to the employees to explain

their view-point."

Similar exemption was granted by the Central Government (by another

notification dated 25.6.86) from the provisions of the Employees' Deposit

Linked Insurance Scheme, 1976, on the same ground (i.e. that the Board's

Family Benefits Subsidiary Scheme provided no-less-favourable benefits to

the employees), but again subject to a condition of a similar nature.

On 26.6.86, after the workers made representations, the Board passed a

resolution (numbered B.P.Ms (F.B.) No. 5) by which it ordered that all the

Regular Work Establishment Workmen retiring/ expiring on or after 1.7.86

would be governed by the pension scheme of the Board. On 17.2.95, the Board

passed a resolution (No. B.P. (F.B.) No. 7) which amended Regulation 9 of

the 1960 Regulations. In the proceedings of the Board it was pointed out

that, since the formation of the Board on 1.7.57 till the Board's 1960

Regulations came into force, the employees of the Board were governed only

by the Civil Service Regulations with respect to quantum of pension, death-

cum-retirement gratuity etc. After the framing of the 1960 Regulations and

the Family Pension Regulations, 1964, the provisions of the said

Regulations which were not inconsistent with the Civil Service Regulations

were followed. In addition, the provisions of the Civil Service

Regulations, with respect to matters not specifically governed by the

Board's regulations, were also applicable.

With a view to creating a complete Pension Code, the Tamil Nadu Government

framed the Tamil Nadu Pension Rules (brought into force with effect from

18.7.76) and the Tamil Nadu Pension Rules, 1978 (brought into force with

effect from 1.1.79). These Rules replaced the Civil Service Regulations,

Madras Liberalised Pension Rules, 1960 and the Tamil Nadu Government

Servants Family Pension Rules, 1964.

It has also been pointed out in the Board's Proceedings that the Board

having followed the Civil Service Regulations, in addition to the 1960

Regulations and the Family Pension Regulations, 1964, had also been

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following the Tamil Nadu Pension Rules, and the Tamil Nadu Pension Rules,

1978 for settling the terminal benefits of the retiring employees of the

Board. It was noted that the amendments made from time to time in the Tamil

Nadu Pension Rules and Tamil Nadu Pension Rules, 1978 were also being

followed by the Board in the light of the saving provisions contained in

Regulation 9 of the 1960 Regulations. The Board, "having considered the

matter carefully", decided that it was necessary to amend Regulation 9 of

the 1960 Regulations "so as to follow the provisions of the Pension Rules

of the Tamil Nadu Government". Towards this end, the Board decided to amend

Regulation 9 by exercising its powers under Section 79(c) of the

Electricity (Supply) Act, 1948. Regulation 9 was amended by substituting a

new regulation as under:

"9 SAVING

(i) No provision in the Tamil Nadu Pension Rules and Tamil Nadu Pension

Rules, 1978, shall, so far as it is inconsistent with any of the provisions

of these regulations have any effect.

(ii) Save as otherwise provided in these regulations, the provisions in

these regulations, shall be in addition to and not in derogation of the

provisions in the Tamil Nadu Pension Rules and Tamil Nadu Pension Rules,

1978, as amended from time to time by the Government of Tamil Nadu."

These amendments were directed to take effect respectively from 18.7.76 and

1.1.79.

On 8.7.98, a Memorandum of Settlement under Section 18(1) of the Industrial

Disputes Act, 1947 was reached between the Board and its workmen. Although

the settlement pertained to several conditions of service,1 we propose to

examine only the most relevant clauses.

Clause 14 of the settlement provides that a settlement under Section 12(3)

of the Industrial Disputes Act, 1947 would be secured immediately on wage

revision and on workload revision, after settlement of revisions of work

norms. By Clause 17, the settlement was to be in force for a period of four

years with effect from 1.12.96. Despite this period having expired, we are

informed by the counsels on both sides that the settlement was not formally

terminated under Section 19(2) of the Industrial Disputes Act, 1947. Clause

15 of the said settlement is of some importance and reads as under:

"15. IT IS ALSO AGREED THAT:

(i) The contract Labourers in thermal stations will be paid wages with

effect from 1.4.1997 with reference to settlement dated 21.7.1997. With

effect from 16.4.1998 according to the orders of the High Court in Writ

Appeal No. 1373 of 1993 will be implemented.

(ii) The contract labourers employed on daily wages in Distribution,

Generation and other Circles will be paid wages according to the PWD

schedule of rates with effect from 1.7.1998.

(iii) The revised pension scheme of the Government of Tamil Nadu and any

amendments there on from time to time will be applied to the pensioners of

the Tamil Nadu Electricity Board."

(Emphasis supplied)

While the conditions of service of the employees of the Board remained

thus, G.O. No. 71 was issued by the Government of Tamil Nadu on 19.3.03,

which purported to revise downwards various benefits accorded to Government

Servants. This was on the ground that pension payments and other benefits

had "reached a level far higher than any other State in India" and had,

therefore, become "fiscally unsustainable". Through the G.O., the State

Government directed that the maximum Qualifying service be enhanced to

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thirty-three years from thirty years in order to become eligible for full

pension by Government Servants after retirement. It also directed through

the said G.O. that pension would be determined on the basis of the average

emoluments drawn during the last ten months of service rendered only. These

amendments were directed to become operative in respect of Government

servants retiring on or after 1.4.03.

By another G.O. No. 74 dated 19.3.03, for identical reasons, the State

Government directed that the maximum limit for commutation of portion of

pension by the pensioner would be 33 1/3% of pension only. This order also

took effect from 1.4.03.

Following the amendments made by the State Government to the Pension Rules,

the Board by its Resolution B.P. (Ch) No. 64 (dated 31.3.03) brought about

corresponding changes in the rules of pension applicable to its employees.

This Board Proceeding is the crucial one and necessitates reproduction in

its entirety.

"Tamil Nadu Electricity Board

Abstract

Pension-Qualifying Service for pension and calculation of pension Revised

orders-Issued.

SECRETARIAT BRANCH

(Per.) B.P.(Ch) No. 64 Dated : 31st March, 2003

Chitrabanu, Panguni 17,

Thiruvalluvar Aandu 2034

Read.

(1) (Per) B.P.(CH) No. 253 (SB) dated 23.9.96.

(2) G.O. Ms. No. 71 Finance (Pension) Department,

dated 19.3.2003.

PROCEEDINGS:

In the B.P. first cited orders have been issued reducing the

maximum qualifying service from 33 years to 30 years to become

eligible for full pension by a Board employee after retirement. It

has also been ordered therein that pension shall be determined

based on 50% of average emoluments drawn during the last 10 months

service rendered or 50% of pay last drawn (sic) Board employee,

whichever is higher.

2. The Government have (sic) now issued orders in the Government Order

second cited enhancing the maximum qualifying service to 33 years from 30

years to become eligible for full pension by the Government Servants after

retirement. The Government have (sic) also ordered that Pension shall be

determined based on the average emoluments drawn during the last 10 months

of service rendered only.

3. The provisions in the Tamil Nadu Pension Rules 1978 have been made

applicable to the employees of the Tamil Nadu Electricity Board also by an

amendment to Regulation 9 of Tamil Nadu Electricity Board Liberalised

Pension Regulations 1960. It has, therefore, become necessary to adopt the

orders relating to Government Pensioners to the pensioners of the Board.

Adoption of Government orders in respect of pensionery benefits does not

attract the issue of notice under Section 9A of Industrial Dispute Act,

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1947.

4. Based on the orders of the Governments mentioned in para-2 above, the

Tamil Nadu Electricity Board hereby directs that the maximum qualifying

service be enhanced to 33 years from 30 years to become eligible for full

pension by the Board employees after retirement.

5. The Board also directs that pension shall be determined based on the

average emoluments drawn during the last 10 months of service rendered

only.

6. These orders shall be applicable to Board employees retiring on or after

1.4.2003.

7. The receipt of the Board Proceedings may be acknowledged in slip

enclosed.

(By order of the Chairman)

(G. Gnanaselvam)

Secretary.

To

..........................................

..........................................."

By a similar worded Board Resolutions B.P. (Ch) No. 65 (dated 31.3.2003)

and B.P. (Ch) No. 66 (dated 31.3.2003), commutation level for pension was

substantially revised downwards.

The Proceedings in the High Court

The Appellant-Trade Union filed Writ Petition Nos. 11899, 11900 and

11902/2003 before the High Court of Judicature at Madras challenging these

three orders (i.e. B.P. (Ch.) Nos.64-66) of the Board. It was contended by

the Trade Union that the Board being a Statutory Board was not required to

mechanically follow the G.O.s and, in any event, the action of the Board

adversely affecting the pensions of employees was unfair, arbitrary and

unconstitutional.

Around the same time, similar writ petitions (W.P. No. 11228/2003 etc.)

were moved by Government servants (The Madras High Court Staff

Association). These sought to impugn the changes brought about in their

pensionary conditions by G.O. Nos. 71 to 74. A Division Bench of the High

Court of Madras dismissed their Writ Petitions (through order dated

23.10.03). A survey of this judgment becomes necessary because it is

heavily relied upon while disposing off the present impugned judgment.

The High Court in its order dated 23.10.03 held that the action of the

Government in G.O. Nos. 71 to 74 was motivated by financial constraints and

was, therefore, not arbitrary. It observed that the cut-off date of 1.4.03

for the revised pension package was not arbitrary since only the terminal

benefits of future retirees were being affected and that no accrued rights

were affected. Moreover, the High Court held that the Government could

alter the service conditions of its employees in exercise of its powers

under Article 309 of the Constitution of India. However, the High Court set

aside G.O. Nos. 72 and 73 by which the State Government increased the

discount rate of commutation of pension and curtailed the encashment of

leave on retirement on the ground that these were accrued rights which

could not be prejudicially affected by the Government.

Now for the present impugned judgment. Following its own judgment in W.P.

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No. 11228/2003 (dated 23.10.03) etc., the High Court of Madras decided W.P.

Nos. 11899, 11900 and 11902/2003 along with a batch of connected matters,2

filed by a large number of employees through order dated 23.10.03 ("the

impugned judgment"). The impugned judgment held inter alia as under:

1. That the Settlement (dated 8.7.98) between the Board and its employees

provided for revised pension schemes of the Government to be applied to the

Board's pensioners and hence no prior notice under Section 9A of the

Industrial Disputes Act, 1947 was necessary.

2. Regulation 9 of the 1960 Regulations as amended by B.P. No. 7 (dated

17.12.95), provided for the adoption of the Pension Rules of the Government

as amended from time to time.

3. The Board's Service Regulation No.17 did not provide for payment of

pension and hence the qualifying service of 30 years mentioned therein

could not be relied upon.

4. Since G.O.Ms Nos. 71 and 74 have been upheld for Government servants

(vide Madras High Court order in W.P. No. 11228/2003 dated 23.10.03), B.P.

Nos. 64 and 66, which rely upon them, are valid.

5. Since G.O. No. 73 enhancing the rate of commuted pension was set aside

(vide Madras High Court order in W.P. No. 11228/03 dated 23.10.03), B.P.

No. 65 based thereon was illegal.

The Appellant-Trade Union is before this Court in appeal on behalf of the

employees of Tamil Nadu Electricity Board to challenge the impugned

judgment.

The Facts in the Connected Special Leave Petitions

Civil Appeals arising out of S.L.P.(C) Nos. 4598-4599/04 are filed by the

Tamil Nadu Electricity Board Accounts and Executive Staff Union on behalf

of the Accounts and Executive staff who are aggrieved by the disposal of

their Writ Petitions Nos. 11565 and 11567 of 2003 by common order of the

High Court of Madras (dated 23.10.03 in W.P. 10727/03 etc).

Civil Appeals arising out of S.L.P.(C) Nos. 4750-4751/04 are filed by the

Trade Union representing the Tamil Nadu Electricity Board Stores Union

aggrieved by the dismissal of their Writ Petitions Nos. 11937 and 12372 of

2003 by common order of the High Court of Madras dated 23.10.03 in W.P.

10727/03 etc.

Civil Appeals arising out of S.L.P.(C) Nos. 16305-16306/04 are filed by the

Tamil Nadu Electricity Workers Federation challenging the impugned common

judgment in dismissing their Writ Petitions Nos. 12349 and 12351 of 2003 by

common order of the High Court of Madras dated 23.10.03 in W.P. 10727/03

etc.

Civil Appeals arising out of S.L.P.(C) Nos. 8882-8883/04 are filed by the

Tamil Nadu Electricity Board Workers Progressive Union challenging the

impugned common judgment dated 23.10.03 in W.P. 10727/03 etc insofar as it

dismisses their Writ Petitions Nos. 11935 and 12370 of 2003.

The Contentions

Ms. Indira Jaising, learned Senior Counsel for the appellant-employees, who

led the arguments on behalf of the appellants, raised several contentions,

arguing on construction of the regulations and the settlement, and on

constitutional grounds.

Ms. Jaising's contention on the construction of the Regulation was that the

Board had reduced the pensionary benefits through executive orders without

amending 1960 Regulations, an action which Ms. Jaising contends is ultra

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vires the powers of the Board.

Turning to the Settlement (dated 8.7.98) between the Board and its

employees, she urged that Clause 15(iii) did not have the effect of

rendering the amendments to the pension scheme of the State Government

employees automatically applicable to the employees of the Board.

Consequently, Ms. Jaising contended that the only method by which the Board

could have adversely affected the pension regulations applicable to its

employees was by the process of formal amendment of its regulations, which

admittedly has not been done.

She further contended that Clause 15(iii) of the Settlement could not be

treated as a waiver of the "fundamental rights" of the employees as there

was no conscious agreement discernible in the Settlement to reduce the

pensionary benefits. In her submission, the High Court erred in

interpreting Regulation 9(ii) of the 1960 Regulations as amended.

Ms. Jaising made two broad submissions on Constitutional grounds to

question the action of the Board. Her first broad contention was with

regard to the legal nature of pensions. Relying on several authorities of

this Court, she contended that pension is an accrued right, which could not

be taken away, that too by a mere executive action such as a resolution of

the Respondent-Board. She also contended that pension is in the nature of

property and it cannot be taken away except by procedure established by law

as provided under Article 300A consistent with Article 14 of the

Constitution of India.

Ms. Jaising's second broad contention was that the action of the Board was

"unreasonable" and hence violative of Article 14. Relying upon a judgment

of this Court in D. S. Nakara and Ors. v. Union of India,3 ("Nakara") she

contended that the revision of the formula of the rate of pension in the

existing scheme makes an invidious distinction between those retired before

or after the cut-off date resulting in unequal treatment being meted out to

the two groups.

Mr. Ramamoorthy, learned Senior Counsel appearing for the Board attempted

to sustain the impugned judgment by advancing the reasoning of the High

Court.

Principle of Waiver and the Settlement

In our view, Clause 15(iii) of the Settlement (dated 8.7.98) merely

mollifies the rigour of requirement of advance notice of 15 days under

Section 9A of the Industrial Disputes Act, 1947. Ms. Jaising contended that

the conditions of service once settled can never be changed except by being

substituted by a fresh settlement or award. This may be true with regard to

conditions of service, which have been settled by a binding settlement/

award. With regard to matters which are in the realm of virgin territory,

we are afraid that this may not be the rule. In fact, we called upon Ms.

Jaising to show as to which provision of the Industrial Disputes Act, other

than Section 9A, prohibits the change by an employer of a condition of

service that it was not brought about by a settlement or award. No such

provision was cited before us.

We are, hence, unable to accept the contention of Ms. Jaising that the

Board could not have changed, by executive action, even those conditions of

service that were not the subject matter of regulations, a settlement or an

award. In our judgment, Clause 15(iii) of the Settlement merely operates to

exempt the employer (the Board) from giving a notice under Section 9A of

the Industrial Disputes Act, 1947.

It was not pleaded by the Board before the High Court, nor was it so held

by the High Court in the impugned judgment, that there was any waiver of

rights generally by reason of the said clause in the said Settlement.

Neither we are inclined to accept such an argument, nor did the learned

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counsel for the Board advance any such argument before us. The argument

with reference to the principle of waiver is, therefore, wholly irrelevant

and need not detain us. This takes us to the interpretation of Regulation 9

of the 1960 Regulations and its true import.

The 1960 Pension Regulations

This case really turns on the interpretation of the pension regulations,

particularly Regulation 9 of the 1960 Regulations. In considering the

import of Regulation 9 of the 1960 Regulations (amended on 17.2.95) a

historical overview is crucial. After the constitution of the Board in the

year 1957, a set of employees, erstwhile State Government's servants were

taken over in the employment of the Board. They were governed by the Civil

Service Regulations inter alia with regard to their pensionary benefits.

Thus, when the 1960 Regulations were brought into force on 1.7.60, the

Board had in its employment the erstwhile Tamil Nadu Government servants as

well as employees directly recruited by it. A saving clause was necessary

in order to ensure that the erstwhile Tamil Nadu Government servants (who

were taken over into the service of the Board) were not adversely affected

by framing of the Regulations. Consequently, a Saving Clause was

introduced, vide Regulation 9.

This saving clause (as it stood before the amendment of 17.2.95) was in two

parts. Clause (i) ensured that no provision in the Civil Service

Regulations to the extent of its inconsistency with any of the provisions

of the 1960 Regulations would have any effect. This was obviously intended

to ensure that whatever better benefits were available to the employees of

the Board would be protected even if the Civil Service Regulations were

inconsistent with the Board's Regulations.

Clause (ii) specifically provided that the provisions made in the

Regulations would be in addition to and not in derogation of the provisions

in the Civil Service Regulations as amended from time to time by the

Government of Tamil Nadu. The import of this clause was that, except as

otherwise provided in the 1960 Regulations, with regard to matters not

covered by the Civil Service Regulations, the 1960 Regulations would have

to be read additionally and not so as to derogate from the Civil Service

Regulations. In other words, the intention declared by clause (ii) is that

the persons covered by the Civil Service Regulations would be entitled to

the benefits thereunder and also to the benefits flowing from the 1960

Regulations.

In 1995, however, the Board proposed to amend Regulation 9 as it stood. The

preambulatory portion in the Board Proceedings (B.P. (FB) No. 7 dated

17.2.95) clearly sets forth the reasons, which motivated the Board to amend

Regulation 9. This became necessary, because in the period after the 1960

regulations were first operative, the State Government had replaced the

then existent Civil Service Regulations with the Tamil Nadu Pension Rules

and Tamil Nadu Pension Rules, 1978. Correspondingly, by the 1995 amendment,

the expression "Civil Service Regulations" in Regulation 9 was replaced by

"Tamil Nadu Pension Rules" and "Tamil Nadu Pension Rules, 1978". Regulation

9(ii) was also amended on the same lines. However, there were no other

changes either formal or substantive in Regulation 9. The amended

Regulation 9 took effect from the dates on which the Tamil Nadu Pension

Rules and Tamil Nadu Pension Rules, 1978 were brought into force (i.e.

18.7.76 and 1.1.79 respectively).

In our view, the amended Regulation 9 only makes explicit with reference to

the Tamil Nadu Pension Rules and Tamil Nadu Pension Rules, 1978 what was

already provided for in the unamended Regulation 9, which referred to the

Civil Service Regulations. A reading of the Board Proceeding (B.P. (FB) No.

7 dated 17.2.95) makes it clear that since the formation of the Board on

1.7.57 till the 1960 Regulations came into force, the employees of the

Board were governed only by the provisions of the Civil Service Regulations

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inter alia with respect to quantum of pension, death-cum-retirement

gratuity. After the Board framed its 1960 Regulations and the Family

Pension Regulations, 1964, the provisions of these Regulations, which were

not inconsistent with the Civil Service Regulations, were followed "in

addition to the provisions of the Civil Service Regulations with respect to

matters not specifically governed by the Board's Regulations."

The said Board Proceedings also make it clear that once the Civil Service

Regulations were replaced by the Tamil Nadu Pension Rules and Tamil Nadu

Pension Rules, 1978, those were followed for settling the terminal benefits

of retiring employees of the Board. Similarly, according to the Board

Proceedings, the amendments made from time to time in the aforesaid Rules

of the State Government were also being applied to the retiring employees

of the Board "in the light of the saving provision contained in Regulation

9 of the 1960 Regulations." As we have previously discussed, the Board

Proceedings indicate that the 1995 amendment to Regulation 9 was only

intended to take into account the State Government's action of replacing

the Civil Service Regulations with the Tamil Nadu Pension Rules and Tamil

Nadu Pension Rules, 1978.

The real question before us is: whether the Board could have followed the

State Government's pension amendments by merely changing Regulation 9. It

appears to us that the decision taken by the Board to amend its own pension

rules and bring it in line with those applicable to the Government's

servants was per se unexceptionable; however, this could not have been

achieved by a mere amendment in Regulation 9 as seems to have prevailed in

the opinion of the Board.

Ms. Jaising is right in her contention that the purpose and purport of

Regulation 9 was to ensure, firstly, that the State Government employees

taken over in the service of the Board were not prejudiced with regard to

their conditions of service, particularly pension and death-cum-retirement

gratuity. Secondly, the saving clause ensures that with regard to matters

which were not covered by the State Government rules but covered by the

Board's Regulations, the benefit covered under the Board Regulations would

be in addition to and not in derogation of what was already available in

the Civil Service Regulations. It was open to the Board in exercise of its

statutory powers under Section 79(c) of the Electricity (Supply) Act, 1948

to amend its pension regulations in such manner as to bring it precisely in

line with the Tamil Nadu Government Rules with regard to pension and other

benefits as applicable to the State Government employees. Instead of

expressly amending the Regulations, the Board appears to have fallen back

on Regulation 9, which was merely a saving clause intended to insulate the

employees against erosion of their benefits granted in the provisions.

Whether such an amendment could have been successfully challenged on its

substantive merits is not a question with which we are concerned. We are

only concerned with whether the Board could have straightaway imported

wholesale the provisions of the pension rules applicable to the State

Government employees via the vehicle of the saving clause, Regulation 9.

Our answer to this issue is clearly in the negative because such a

possibility is evidently absent in the text of the said Regulation. For

this reason, we are of the view that the conditions of service pertaining

to pension that were already the subject matter of the Regulations could

not have been changed by the Board without amending the Regulations in

accordance with law.

Quantifying and Qualifying for Pensions

As under Regulation 3 of the 1960 Regulations, the qualifying service for

full pension was initially prescribed as thirty years. It was only by Board

Proceedings B.P.(Ch) No. 64 (dated 31.3.03) that the maximum qualifying

service for pension was increased from thirty years to thirty-three years.

By the same Board's Proceedings, the pension was made relatable to the

average emoluments drawn during the last ten months service instead of the

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last drawn pay. These two aspects were the subject matters of the 1960

Regulations and, therefore, by a Board Proceeding, without amending the

Regulations, they could not have been modified to the prejudice of the

employees. B.P.(Ch) No. 64 (dated 31.3.03) is, therefore, bad in law and

illegal inasmuch as it purports to bring about adverse changes in the

quantification of pensions and the qualifying period of service for

pensions.

Commutation of Pension

We need to, however, draw a distinction between two different situations

which have arisen, namely: (i) an attempt by the Board to withdraw certain

benefits granted by a decision of the Board (without amending the

applicable regulations) by another Board decision, (ii) the other situation

is where a benefit granted under the 1960 Regulations was sought to be

taken away by a Board's decision (without amending the applicable

regulations). As have seen in the previous situations discussed, the latter

is clearly impermissible. We, however, need to consider the former issue.

A change brought about by the Board that has also been impugned is with

regard to the decrease in the maximum permissible commutation of pension

from 40% to 33 1/3% by following G.O. No. 74 (dated 19.3.03) issued by the

Government of Tamil Nadu. As far as this change is concerned, it would

appear that Regulation 7 as framed in 1960 permitted a maximum commutation

of one-third. By a Board Proceeding B.P.(Ch) No. 208 (dated 18.8.98), the

commutation percentage was increased to 40%. This has now been reduced to

33 1/3% by another Board Proceeding B.P. (Ch) No. 66 (dated 31.3.03). In

other words, what was granted by a Board Proceeding, without amending the

Regulations, is sought to be taken away by another Board Proceeding with a

view to following G.O.Ms. No. 74 (dated 19.3.03) issued by the State

Government in respect of its own employees. As far as this change is

concerned, the argument of not following the proper procedure (i.e.

amending the Regulations) does not apply. In fact, the change made by

B.P.(Ch) No. 66 (dated 31.3.03) actually brings the level of commutation to

what was originally given by the 1960 Regulations. In our view, what was

granted by a mere Board Proceeding could be validly altered by another

Board Proceeding. Therefore, the challenge to the change in the commutation

percentage brought about by B.P.(Ch) No. 66 fails by the same token.

Ms. Jaising further contended that, with regard to the reduction in the

percentage of maximum commutation of pension, the employees who were

covered by the provisions of the Industrial Disputes Act, 1947 would be

entitled to raise an industrial dispute, and have it adjudicated according

to law. She also submitted that, if this Court were to hold against the

employees on the point of commutation of pension, some time may be

permitted to the employees to raise an industrial dispute with regard to

the change. Considering that the change is likely to have an impact on a

large number of employees of the Board, we are inclined to give reasonable

time to the employees to raise an industrial dispute before the change

impacts them.

The Constitutional Grounds

Turning to Ms. Jaising's first argument on constitutional grounds, it

appears to us that even if pension is "property", all that Article 300A

provides is that: "No person shall be deprived of his property save by

authority of law." Thus, if deprivation of the pensionary benefits was by

"authority of law" then nothing survives in this contention. We have

already examined in depth whether the Board has acted with the "authority

of law" i.e. whether it has followed the prescribed procedure in bringing

about the changes in the pensionary benefits, and we have held accordingly.

Thus, this contention need not be examined any further.

As to Ms. Jaising's contention that the Board's actions violate Article 14

of the Constitution and the ratio in Nakara, we would have had to pursue

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this contention only if we had not been able to decide the case on narrow

interpretational grounds as we have already done. Ms. Jaising, however,

contended that if we did not decide on the broader constitutional ground

argued by her there would be multiplicity of litigation on the same issue.

We do not agree. In fact, at the present stage the argument of multiplicity

of litigation is only speculative since we cannot predict what future

course the Board or the employees will adopt. Further, even if multiple

litigations were a possibility that should not compel us to opine on every

ground argued before us, especially those involving constitutional issues.

In this context, we are reminded of a famous exchange in the U.S. Supreme

Court between Justice Frankfurter and the Counsel:4

"...Mr. Arnold pleaded with the Court that he would not like to win

the case on the narrow procedural, statutory ground to which a

majority of the members of the bench was evidently inclining.

Responded Mr. Justice Frankfurter: "The question is not whether you

want to win the case on that ground or not. This Court reaches

constitutional issues last, not first." He might well have quoted

Mr. Justice Brandeis's famous assertion that the "...most important

thing we do is not doing.""

This is precisely the principle, which we intend to adopt. This Court must

be parsimonious on the grounds on which it chooses to decide a particular

case. If a case can be decided upon any ground other than constitutional

grounds, such as by statutory construction or the like, this Court must do

so. Despite the characteristic acuity with which Ms. Jaising argued the

constitutional grounds, in our opinion, they are not ripe for adjudication,

as we have been able to decide the matter on other narrower grounds. Where

a paring knife suffices, a battle axe is precluded.

The Final Conclusions

In the result we hold as under:

1. The change brought about in the qualifying service for full pension

by increasing it from thirty years to thirty-three years by B.P.(Ch) No. 64

(dated 31.3.03) is liable to be interfered with as it has been done without

amendment to the 1960 Regulations.

2. The change brought about by B.P.(Ch) No. 64 (dated 31.3.03) linking

the pension to the average emoluments of the last ten months before

retirement without amendment of the 1960 Regulations is bad in law.

3. The reduction in the maximum permissible commutation of pension

from 40% to 33 1/3% brought about by B.P.(Ch) No. 66 (dated 31.03.03),

without amendment of the 1960 Regulations is not liable to be interfered

with.

4. On the issue of whether the Board can adversely modify the pensions

payable even after following the prescribed procedure (i.e. after amending

the applicable pension regulations) and whether such change would be

violative of Article 14 or the ratio in Nakara we express no opinion

whatsoever, as it is unnecessary in the light of our findings above.

We, therefore, partly allow the appeals and interfere with the impugned

judgment of the High Court insofar as issues one and two are concerned and

set aside the action of the Board on the aforesaid issues. This shall be

without prejudice to the powers of the Board to bring about the changes

after proper amendment of the 1960 Regulations and also without prejudice

to the rights of the employees to challenge such amendments on any

permissible ground (including on the grounds we have chosen not to express

our opinions upon).

The impugned High Court judgment, insofar as it upholds the reduction of

the maximum permissible commutation from 40% to 33 1/3% is not interfered

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with without prejudice to the rights of the employees to raise an

industrial dispute.

We are informed that during the pendency of the writ petitions before the

High Court there was a stay operating in favour of the employees as a

result of which service conditions that were under challenge were not

permitted to be amended. There was also an interim stay of Board

Proceedings Nos. 64 and 66 (dated 31.3.03) granted by this Court on 8.3.04

which has continued till today. In the circumstances, we extend the stay in

respect of Board Proceeding B.P.(Ch) No. 66 (dated 31.3.2003) for a period

of eight weeks to enable the employees to raise an industrial dispute for

adjudication, if so advised.

The appeals are allowed in the aforesaid terms. No costs.