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PETITIONER:

STATE OF RAJASTHAN AND ANR.

Vs.

RESPONDENT:

AMRIT LAL GANDHI & ORS.

DATE OF JUDGMENT: 10/01/1997

BENCH:

J.S. VERMA, B.N. KIRPAL

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

KIRPAL, J.

Leave granted.

The common question of law which arises in these

appeals by special leave relates to the date with effect

from which the revised pension is to be paid to the teachers

of the Jai Narayan Vyas University and Mohan Lal Sukhadia

University who had retired between 1.1.1986 and 1.1.1990.

Though the facts in these appeals are similar, for the

purpose of this judgment. We need only refer to the facts in

Civil Appeal Nos. 9710-9717 of 1995 and S.L.P. (C) No. 19231

of 1996 which arise from the judgment dated 30.8.1994 of the

Division Bench of the High Court in D.B. Civil Writ Petition

No. 115/1993 which considered the rival contentions of the

parties on merit.. The said judgment has been followed by

the High Court while allowing the writ petition from which

Civil Appeal No. 9718 of 1995 arises.

In 1962, Jodhpur University Act, 1962 was promulgated.

For the teaching staff of the University contributory

provident fund rules were framed and there was no pension

scheme which was applicable to them.

It appears that the University Grant Commission in 1983

constituted a committee known as Mehrotra Committee to

examine the structure of emoluments and also the conditions

of service of the University and College teachers.

The Mehrotra Committee submitted its report in 1986,

containing various recommendations. One of the

recommendations related to extending pension-cum-gratuity

scheme to the teachers of Universities and colleges.

Pursuant to the said recommendations, resolutions were

passed in 1986 by the Syndicate of University of Jodhpur

(now known as Jai Narayan Vyas University) and approved by

the University Senate for the introduction or pensionary

scheme in the University. According to this scheme, option

was to be given to the university employees to opt either

for contributory provident fund or for pension in lieu of

the provident fund. Draft rules providing for payment of

pension were also approved.

As the proposed scheme had financial implications, the

University had to seek the approval of the Government. The

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Education Department of the Rajasthan Government, vide its

letter dated 16.4.191, informed the Vice-chancellors of the

Rajasthan University, Jaipur, Jodhpur University, Jodhpur,

M.L. Sukhadia University, Udaipur, Ajmer University, Ajmer

and Kota Open University, Kota that the State Government had

decided to introduce the pension scheme in the Universities

of the State W.E.F. 1.1.1990. It is pursuant thereto that

the cabinet of the Jodhpur University on 24.4.1991 approved

the resolutions of the Syndicate and the Senate providing

for the introduction of the pension scheme. Thereafter

Pension Regulations 1990 and General Provident Fund

Regulations 1990 were framed and on 3.8.1991 options were

invited from all persons who were in the service of the

University of Jodhpur on or after 1.1.1990 to give their

options whether they wanted to be covered by the Provided

Fund Regulations or desired to be covered by the Pension

Regulations of 1990.

Thereafter, several writ petitions were filed in the

High Court of Rajasthan. Two writ petitions were filed by

the erstwhile teachers of the Rajasthan University who had

retired prior to 1.1.1986 while eight writ petitions were

filed by those who had retired between 1.1.1986 and

1.1.1990.

The Single Judge of the High Court allowed all the

aforesaid writ petitions and directed that the revised

pension scheme should be made applicable to all the

petitioners including those who had retired prior to

1.1.1986. Appeals were then filed before the Division Bench

which, vide judgment dated 30.8.1994. held that the revised

pension scheme should be made applicable to only those

employees who had retired between 1.1.1986 and 1.1.1990.

As already noticed above, the aforesaid judgment of the

Division Bench was followed in D.B. Civil Writ Petition No.

3489 of 1993 filed by the retired university teachers of the

Mohan Lal Sukhadia University, Udaipur from which Civil

Appeal No. 9718 of 1995 arises.

On behalf of the appellants, main arguments were

addressed by Shri Tapas Ray, Sr. learned counsel in C.A.

9718 of 1995. He referred to the observations of the High

Court to the effect that the Mehrotra Committee had made its

recommendations in 1986 and the Syndicate and Senate of the

University had approved of the grant of pension to those

employees who had retired after 1.1.1986, and there was no

reason as to why the Pension Regulations should have been

made applicable with effect from 1.1.1990. It was contended

by Shri Ray that the High Court overlooked the fact that the

Pension Regulations which were framed and were made

applicable w.e.f. 1.1.1990 in view of the decision of the

State of Rajasthan contained in its letter dated 16.4.1991.

He further submitted that the date, as to when pension

scheme was to be made applicable, was a policy matter. The

Government having decided, as a matter of policy, that all

the Universities in Rajasthan were to introduce the Pension

w.e.f. 1.1.1990 the said decision could not, it was

submitted, be challenged.

Mr. Ray drew our attention to the decisions of this

Court in State of West Bengal and others Vs. Ratan Behari

Dey and others, (1993) 4 SCC 62 and Union of India Vs. P.N.

Menon and others, (1994) 4 SCC 68 and contended that the

High Court fell in error in not following the ratio of the

aforesaid decisions in which it was clearly held that a

particular cut-off date could be fixed while granting

pensionary benefits.

In Ratan Behari case (supra), the Calcutta Corporation

had in force a provident fund scheme. A demand was raised in

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1977 for the introduction of a pension scheme. A three

member committee was constituted and pursuant to its

recommendations, which were accepted by the Government with

some modifications, Pension Regulations were framed in 1982.

Effect was given to these Regulations on and from 1.4.1977.

The fixing of the date of 1.4.1977 was challenged by some of

the members of the Calcutta Municipal Corporation who had

retired prior to 1.4.1977. The Calcutta High Court allowed

the writ petitions by holding that the date of 1.4.1977,

with effect from when the Pension Regulations were to come

into effect, was non est and void. While allowing the

appeals, and dismissing the writ petitions, this Court

examined the reasons why the date 1.4.1977 has been fixed

and then observed as follows:

"Now, it is open to the State or to

the Corporation, as the case may

be, to change the conditions of

service unilaterally. Terminal

benefits as well as pensionary

benefits constitute conditions of

service. The employer has the

undoubted power to revise the

salaries and/or the pay scales as

also terminal benefits/pensionary

benefits. The power to specify a

date from which the revision of pay

scales or terminal

benefits/pensionary benefits, as

the case maya be, shall take effect

is a concomitant of the said power.

So long as such date is specified

in a reasonable manner, i.e.,

without bringing about a

discrimination between similarly

situated persons, no interference

is called for by the court in that

behalf."

In P.N. Menon case (supra) the question again arose

with regard to fixing of cut-off date for payment of

gratuity and pension. In that case the cut-of date, which

was fixed, was 30.9.1977. While allowing the appeals and

repelling the challenge to the fixation of the said date, it

was observed at pages 73-74 as under:

"Whenever the Government or an

authority, which can be held to be

a State within the meaning of

Article 12 of the Constitution,

frames a scheme for persons who

have superannuated from service,

due to many constraints, it is not

always possible to extend the same

benefits to one and all,

irrespective of the dates of

superannuation. As such any revised

scheme in respect of post-

retirement benefits, if implemented

with a cut-off date, which can be

held to be reasonable and rational

in the light of Article 14 of the

Constitution, need not be held to

be invalid. It shall not amount to

"picking out a date from the hat,

as was said by this Court in the

case of D.R. Nim "V. Union of India

in connection with fixation of

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seniority. Whenever a revision

takes place, a cut-off date becomes

imperative because the benefit has

to be allowed within the financial

resources available with the

Government."

It again reiterated at page 75 that "not only in

matters of revising the pensionary benefits, but even in

respect of revision of scales of pay, a cut-off date on some

national or reasonable basis, has to be fixed for extending

the benefits".

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..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."

The Syndicate and 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 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.

Mr. Anil B. Diwan, Sr. Advocate appearing in Civil

Appeal Nos. 9710-9717 of 1995 for respondent No.1, contended

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that the University had asked for extension of time to

implement the judgment and must be regarded as having

accepted the decision specially when the University had not

come in appeal and, therefore, whatever be the decision of

this court on the question of law, the benefit of the

judgment should be given to his clients who had retired

between 1.1.1986 to 1.1.1990.

It is true that the University has not filed any appeal

but the State of Rajasthan has challenged the correctness of

the decision of the High Court and it was represented at the

bar, on behalf of the appellant, that only the options had

been invited and the judgment had not been given effect to

and no pension has been given to those employees who had

retired between 1.1.1986 to 1.1.1990. Counsel for the

University stated that as the State of Rajasthan had a filed

an appeal, therefore the University chose not to file one of

it's own. We, therefore, do not see any reason as to why

this decision should not be applicable to all the employees

who had retired prior to 1.1.1990 as it cannot be held that

the University had accepted the correctness of the High

Court's decision.

From the aforesaid discussion, it follows that the

policy decision of the Universities, making the Pension

Regulations applicable w.e.f. 1.1.1990 has not been shown to

be arbitrary or invalid. These appeals are, accordingly,

allowed and the judgments of the High Court are set aside

and the writ petitions filed by the respondents are

dismissed. There shall be no order as to costs.