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PETITIONER:

UNION OF INDIA

Vs.

RESPONDENT:

G. VASUDEVAN PILLAY

DATE OF JUDGMENT08/12/1994

BENCH:

HANSARIA B.L. (J)

BENCH:

HANSARIA B.L. (J)

KULDIP SINGH (J)

CITATION:

1995 SCC (2) 32 JT 1995 (1) 417

1995 SCALE (1)9

ACT:

HEADNOTE:

JUDGMENT:

The Judgment of the Court was delivered by

HANSARIA, J.- This conglomeration of appeals (some of which

arise because of leave already granted and some came into

existence because of leave being granted) require us to

decide three questions:

(1) Whether the decision of the Union of

India not to allow Dearness Relief (DR) on

pension to the ex-servicemen on their re-

employment in a civil post is in accordance

with law or not;

(2) Whether denial of DR on family pension

on employment of dependants like widows of the

ex-servicemen is justified or not; and

(3) Reduction of pay equivalent to enhanced

pension of those exservicemen who were holding

civil posts on 1-1-1986, following their re-

employment, is permissible or not.

We would examine these questions seriatim.

Disallowing of DR on pension on re-employment

2. To answer the above question involved in some of the

appeals, the background leading to the aforesaid decision

may be briefly noted. To start with there was no provision

for payment of DR to the pensioners. Various

representations were made to the Third Pay Commission

seeking some recommendations in this regard for protecting

the pension of the government employees from erosion on

account of possible increases in the cost of living in

future. The Commission considered this matter and also the

question regarding the manner in which some relief could be

provided to the future pensioners. After having noted the

various suggestions which the Commission received in reply

to its questionnaire, it recommended that all future

pensioners, irrespective of the amount of pension drawn by

them, should be given relief @ 5% of their pension subject

to a minimum of Rs 5 per mensem and maximum of Rs 25. The

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Commission further recommended that the relief should be

given as and when there is a 16-point rise in the 12

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monthly average of the All-India Working Class Consumer

Price Index. This recommendation of the Commission was

accepted by the Central Government vide its Office

Memorandum of even number dated 6-4-1974, making the relief

available to those employees belonging to Classes 11, III

and IV, who retired from service prior to 1-1-1973, as well

as those who retired afterwards.

3.A decision wag, however, taken subsequently not to pay DR

to reemployed pensioners. This was made applicable to those

ex-servicemen who had come to be re-employed in civil posts.

Various writ petitions and original applications were filed

in different legal for a of the country, which came to be

decided either by upholding the validity of the decision or

by taking a contrary view. The parties who lost have

preferred these appeals.

4.The learned Additional Solicitor General appearing for the

Union of India submits that the decision merits our

acceptance because of what has been stated in clause (ii) of

Rule 55-A of Central Civil Services (Pension) Rules, 1972,

as amended in 1991. We are, however, of the view that the

decision cannot be so supported for the reason that the

aforesaid rules have application to the persons who were

members of Central Civil Services. The ex-servicemen having

apparently not been members of such Services, what has been

provided in Rule 55-A(ii) cannot be invoked to deny DR on

pension/family pension to the ex-servicemen on their re-

employment.

5.Had the aforesaid been the only provision pressed into

service to deny DR to the ex-servicemen, we would have had

no difficulty in striking down the decision inasmuch as the

ex-servicemen having been allowed pension and DR on it in

accordance with the conditions of service governing defence

personnel, the provision contained in the aforesaid rule

governing service condition of altogether different class of

servicemen could not have impinged on their right to get DR

on the pension. Learned Additional Solicitor General,

however, advances an alternative submission and the same is

that there are even army instructions which, read with

office memoranda of Ministry of Finance, will show that

Dearness Relief on pension cannot be paid even to ex-

servicemen on their re-employment. As this point could not

be brought home to us well when the cases were heard, as

relevant army instructions had not been brought on record,

we, while reserving the judgment after close of hearing

allowed filing of written submissions, which were done

subsequently along with which large number of documents were

filed to establish the point urged in the Court.

6.A perusal of the documents shows that the Office

Memorandum dated 1-8-1975 of the Ministry of Finance,

Department of Expenditure, which stated that a re-employed

Central Government pensioner is not eligible to draw any

relief during the period of re-employment, was made

applicable by the Ministry of Defence vide letter of even

number dated 28-10-1975 to Armed Forces pensioners also.

These documents are pages 17 and 18 of the written

submission, in which it has also been stated that with

formation of the Department of Pension and Pensioners'

Welfare under Ministry of

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Personnel, Public Grievances and Pension, all orders issued

by the Ministry of Finance were made applicable to Armed

Forces pensioners as well. A reference has then been made

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to Office Memorandum dated 22-4-1987 on the subject of grant

of Dearness Relief to pensioners on the recommendations of

the Fourth Central Pay Commission, sub-para (v) of Annexure

1 to which states that Dearness Relief will be suspended

when the Central Government pensioner is re-employed in the

department/office of the Central Government.

7.The aforesaid shows that dehors what has been laid down in

clause (ii) of Rule 55-A of the aforesaid Pension Rules,

there are materials on records to show that any person,

including ex-servicemen, would not be entitled to Dearness

Relief on pension on his re-employment to any

department/office of the Central Government.

8.It has, however, been strenuously contended by learned

counsel appearing for the re-employed ex-servicemen that

pension being a right (and not a bounty) available to a

retired employee as held in Nakara1 and DR being a part of

pension, right to receive the same could not have been

infringed merely because the incumbent sought re-employment

to take care of the hardship which he might have otherwise

faced after retirement. To sustain the submission, strength

is sought to be derived from the decision of the Kerala High

Court in Narayanan v. Union of India2 in which a view has

been taken that the DR became an integral part of pension,

because of which it could not have been discontinued on re-

employment. As against this, the view of the Delhi High

Court in Civil Writ No. 1699 of 1992 (disposed of on 23-2-

1993) is that the DR is different from pension. For the

disposal of the present cases it is not necessary to express

any opinion on this aspect of the matter inasmuch as,

according to us, even if Dearness Relief be an integral part

of pension, we do not find any legal inhibition in

disallowing the same in cases of those pensioners who get

themselves re-employed after retirement. In our view this

category of pensioners can rightfully be treated differently

from those who do not get re-employed; and in the case of

the reemployed pensioners it would be permissible in law to

deny DR on pension inasmuch as the salary to be paid to them

on re-employment takes care of erosion in the value of the

money because of rise in prices, which lay at the back of

grant of DR, as they get Dearness Allowance on their pay

which allowance is not available to those who do not get re-

employed.

9.We, therefore, hold that the ex-servicemen were rightly

debarred from Dearness Relief on their pensions after they

got themselves re-employed to any civil post under the

Government of India.

Denial of DR on family pension

10.In some of the cases, we are concerned with the denial of

Dearness Relief on family pension on employment of

dependants like widows of the ex-servicemen. This decision

has to be sustained in view of what has been

1 D.S. Nakara v. Union of India, (1983) 1 SCC 305: 1983

SCC (L&S) 145: AIR 1983 SC 130

2 1994 (1) KLT 897

37

stated above regarding denial of DR on pension on re-

employment inasmuch as the official documents referred on

that point also mention about denial of DR on family pension

on employment. The rationale of this decision is getting of

Dearness Allowance by the dependants on their pay, which is

drawn following employment, because of which Dearness Relief

on family pension can justly be denied, as has been done.

Reduction of enhanced pension from pay of those ex-

servicemen who were holding civil posts on 1-1-1986

following their re-employment

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11.The aforesaid reduction, which is the subject-matter of

some appeals, is the fall out of Office Memorandum dated 11-

9-1987 according to which the pay of the ex-servicemen who

were in employment in a civil post as on 1-1-1986 following

their re-employment, is required to be reduced by an amount

equivalent to the enhanced pension made available pursuant

to the report of the Fourth Pay Commission.

12.The ground of attack is that the aforesaid decision

violates Articles 14 and 16 of the Constitution inasmuch as

there is no rational basis for classifying the employees for

the aforesaid purpose on the basis of their being in

employment on 1-1-1986. This submission has been advanced

because the reduction of the aforesaid nature has not been

made in respect of those who have been in employment since

1-1-1986. The additional affidavit filed on behalf of

Respondent 1 in SLP (C) No. 17456 of 1991 on 25-8-1994

contains some names of those who were re-employed after 1-1-

1986 and are being paid both the revised pay and revised

pension. This factual position has been admitted in the

aforesaid written submissions filed on behalf of the Union

of India inasmuch as it has been stated in page 9 that the

pensioners who are re-employed after 1-1-1986 enjoy the

benefit of revised pay and also revised pension with effect

from 1-1-1986.

13.Reliance has been placed in support of aforesaid

submission on a two-Judge Bench decision of this Court, to

which one of us (Kuldip Singh, J.) was a party. That

decision was in the case of TS. Thiruvengadam v. Secy. to

Govt. of India3. The facts of that case are, however,

different inasmuch as there the Memorandum dated 16-6-1967

stating that revised pensionary benefits would be made

available only to those Central Government servants who have

been absorbed in public sector undertakings after that date

was not found to be constitutional because the very object

of bringing to the existence the revised terms and

conditions by the memorandum was to protect the pensionary

benefits which the Central Government servants had earned

before their absorption into the public sector undertakings.

It was, therefore, held that restricting the applicability

of the revised memorandum only to those who are absorbed

after coming into force of the same would not only defeat

the very object and purpose of the memorandum but would be

contrary to fair play and justice also.

14.Despite the aforesaid decision being of no aid in the

present cases, we find no logic and basis for classifying

the re-employed persons on the

3 (1993) 2 SCC 174

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basis of their being in employment on 1-1-1986. Indeed, no

justification has been canvassed before us. The decision

which held the field before the impugned memorandum in not

taking note of pension while fixing pay of the ex-servicemen

on re-employment, which was based on good reasons, had no

good reason for its reversal, as enhanced pension was not

confined to those who were in employment on 1-1-1986. The

impugned decision is, therefore, arbitrary and is hit by

Articles 14 and 16 of the Constitution. We, therefore,

declare the same as void.

15.Our conclusions on the three questions noted in the

opening paragraph are that denial of Dearness Relief on

pension/family pension in cases of those ex-servicemen who

got re-employment or whose dependants got employment is

legal and just. The decision to reduce the enhanced pension

from pay of those ex-servicemen only who were holding civil

posts on 1-1-1986 following their re-employment is, however,

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unconstitutional.

16.The appeals are disposed of accordingly. IA Nos. 16, 30-

46 in appeals arising out of SLP (C) Nos. 1585-95 of 1994

stand disposed of. No order asto costs.