As per the case facts, employees who were part of the Contributory Provident Fund Scheme had previously been given options to switch to the Pension Scheme. Some employees who did ...
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1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2022
(Arising out of Special Leave Petition (Civil) Nos. of 2022)
(Arising out of Diary No. 13901 of 2017)
UNIVERSITY OF DELHI …Appellant
versus
SMT. SHASHI KIRAN & ORS. ETC. …Respondents
WITH
CIVIL APPEAL NO. OF 2022
(Arising out of Special Leave Petition (Civil) Nos._________of 2022)
(Arising out of Diary No. 36222 of 2018)
UNIVERSITY OF DELHI …Appellant
versus
C.L. KHANNA (RETD.) & ORS. …Respondents
WITH
CIVIL APPEAL NO. OF 2022
(Arising out of Special Leave Petition (Civil) Nos.________ of 2022)
(Arising out of Diary No. 36221 of 2018)
UNIVERSITY OF DELHI …Appellant
versus
DR. S.N. SINGH …Respondent
2
WITH
CIVIL APPEAL NO. OF 2022
(Arising out of Special Leave Petition (Civil) No.29577 of 2018)
UNIVERSITY OF DELHI …Appellant
versus
DR. SANTOSH KAUR SANGARI & ORS. …Respondents
AND WITH
CIVIL APPEAL NO. OF 2022
(Arising out of Special Leave Petition (Civil) Nos.________ of 2022)
(Arising out of Diary No.17007 of 2017)
UNIVERSITY OF DELHI …Appellants
versus
N.C. BAKSHI & ORS. ETC. …Respondents
J U D G M E N T
Uday Umesh Lalit, J.
1. Delay condoned. Leave granted.
2. These appeals by the University of Delhi (‘the University’, for short)
are directed against the judgment and order dated 24.08.2016 passed by the
Division Bench of High Court of Delhi at New Delhi in Letters Patent
3
Appeals
1
which in turn had challenged the decisions of the learned Single
Judge of the High Court dated 30.04.2014 in various Writ Petitions
2
.
3. The basic facts leading to the filing of the Writ Petitions in the High
Court are as under:
a. All the writ petitioners are members of the teaching staff working in
various colleges and institutions which are either affiliated to, or are
part of the University. The conditions of service of the teaching staff
are somewhat analogous to the employees of the Central
Government.
b. On 06.06.1985, the Central Government employees who were
governed by the Contributory Provident Fund (for short, “CPF”)
were permitted to opt for General Provident Fund and Pension
Scheme (for short, “GPF”). Thereafter a notification was issued by
the Central Government with respect to the changeover of the
1
LPA Nos.410-414, 416-418, 558, 594, 667, 672 and 780 of 2014; 554, 606, 607, 608, 609, 610, 615, 616, 617, 618,
619, 622, 623, 624, 625, 626, 627, 628, 629, 632, 633, 635, 636, 637, 638, 639, 640, 641, 642, 643, 644, 645, 646,
647, 648, 650, 651, 653, 654, 655 of 2014 and other connected appeals.
2
Writ Petition No. 1490 of 2006 and connected matters, Writ Petition(C) Nos. 5631 of 2010, 1216 of 2011, 3631 of
2011, 3863 of 2011, 5495 of 2011, W.P.(C)No. 6009 of 2011 & CM No. 12140 of 2011, W.P.(C)No.5106 of 2011 & CM
No. 10351 of 2011, W.P.(C)No.5975 of 2010 & CM No. 11775 of 2010, W.P.(C)No. 5979 of 2010 & CM No.11782 of
2010, W.P.(C)No.5980 of 2010 & CM No. 11784 of 2010, W.P.(C)No.5981 of 2010, W.P.(C)No.5982 of 2010 & CM No.
11787 of 2010, W.P.(C)No. 5985 of 2010 & CM No. 11793 of 2010; W.P.(C)No.2036 of 2010, W.P.(C)No.2037 of
2010, W.P.(C)No.3095 of 2010 & CM No. 7718 of 2011, W.P.(C)No. 5759 of 2010, W.P.(C)No.7310 of 2010 and
W.P.(C)No.8560 of 2010.
4
employees from CPF to GPF. Said notification issued on 1.5.1987
contemplated that all CPF beneficiaries who were in service on
01.01.1986 and were still in service would be deemed to have “come
over” to GPF unless a contrary option was exercised by them in
writing by 30.09.1987 to continue to be under CPF. The relevant
paragraphs of said notification were:
“The Central Government employees who are governed by the
Contributory Provident Fund Scheme (CPF Scheme) have been
given repeated options in the past to come over to the Pension
Scheme. The last such option was given in the Department of
Personnel and Training. O.M. No. F 3 (1) - Pension Unit/85, dated
the 6" June, 1985. However, some Central Government employees
still continue under the CPF Scheme. The Fourth Central Pay
Commission has recommended that all CPF beneficiaries in service
on January 1, 1986, should be deemed to have come over to the
Pension Scheme on that date unless they specifically opt out to
continue under the CPF Scheme.
2. After careful consideration, it has been decided that the said
recommendation shall be accepted and implemented in the manner
hereinafter indicated.
3.1 All CPF beneficiaries, who were in service on 1
st
January, 1986,
and who are still in service on the date of issue of these orders viz.,
1
st
May, 1987) will be deemed to have come over to the Pension
Scheme.
3.2 The employees of the category mentioned above will, however,
have an option to continue under the CPF Scheme, if they so desire.
The option will have to be exercised and conveyed to the concerned
Head of Office by 30-9-1987, in the form enclosed if the employees
wish to continue under the CPF Scheme. If no option is received
by the Head of Office by the above date the employees will be
deemed to have come over to the Pension Scheme.
*** *** ***
3.6 The option once exercised shall be final.
5
*** *** ***
6.3 These orders do not also apply to scientific and technical
personnel of the Department of Atomic Energy, Department of
Space, Department of Electronics and such other Scientific
Departments as have adopted the system prevailing in the
Department of Atomic Energy. Separate orders will be issued in
their respect in due course. [See Order (3) in this Appendix.]
8. These orders issue with the concurrence of the Ministry of
Finance, Department of Expenditure, vide their U.O.
No.2038/IS(Pers.)/87, dated 13-4-1987.”
c. Around the same time, a communication was addressed on
05.05.1987 by the Central Government to the Registrar of the
University stating that the Hon’ble President of India in his capacity
as Visitor of the University was pleased to approve the proposal of
the University for amending Statute 28A, giving benefits to its
employees relating to GPF, CPF, gratuity etc. “which are more
advantageous to the employees of the University in pursuance to
similar order issued by the Central Government with respect to their
own employees”. The amended Statute 28-A read as under:
“28-A: In this Statute unless there is anything repugnant in the
subject or context:
(1) * * * *
(2) * * * *
(3) * * * *
(4) * * * *
(5) The sanction and payment of retirement benefits admission
under this Statute shall regulated by such procedural instructions
as would be issued by the Executive Council.
Amendment approved:
Add the following as Clause 5 in Statute 28-A and Clause
5 and 6 may be renumbered as Clause 6 and 7 respectively.
6
“(5) As and when the Central Government amends Rules giving
more benefits to its employees relating to General Provident
Fund, Contributory Provident Fund, Pension Gratuity, etc. which
are advantageous to the employees of the University, the
employees of the University will be entitled to the same benefits
with effect from the date such amendment is brought into force
by the Central Government with respect to its employees.”
(6) * * * *
(7) * * * *”
d. Close on the heels, a notification was issued by the University on
25.05.1987 stating that all CPF beneficiaries in service on
01.01.1986 would be deemed to have “come over” to GPF under
Statute 28-A unless such employees had opted to continue under
CPF. Paragraph ‘5’ of the notification was to the following effect:
“5. Pensionary benefits to temporary employees - Temporary
employees, who retire on superannuation or on being declared
permanently incapacitated for further service by the appropriate
medical authority after having rendered temporary service of not
less than 10 years, shall be eligible for grant of superannuation/
invalid pension, retirement gratuity and family pension on the
same scale as admissible to permanent employees.
Further it has also been decided by the Government of India that
pensioners who have commuted a portion of their pension and on
1.4.85 or thereafter have completed or will complete 15 years
from their respective dates of retirement will have their
commuted portion of pension restored.
lt was also recommended by the Pay Commission that all CPF
beneficiaries who are in service on 1.1.1986 should be deemed to
have come over to the pension scheme on that dates unless they
specifically opt out to continue under the CPF Scheme. This
recommendation has also been accepted by the Government of
India.
Keeping in view the revised pensionary benefits, it has been
approved by the Vice-Chancellor that the above decision of the
7
Government of India regarding option also be adopted in the
University. It has, therefore, been decided that all Contributory
Provident Fund beneficiaries who are in service on 1.1.1986 in
the University should be deemed to have come over to the pension
scheme under Statute 28-A Appendix ‘A’ unless they specifically
opt out to continue under CPF Scheme (Statute 28-A, Appendix
‘B’).
It has further been decided that in respect of categories B, C & D
beneficiaries for whom the revised grades have been announced
and implemented, they be given three months’ time from the date
of this notification for opting out to continue under CPF Scheme
(Statute 28-A Appendix ‘B'). For category A - CPF beneficiaries
the period of three months’ time for the same purpose will be
reckoned from the date of adoption by the University of the
revised pay scales based on the IVth Pay Commission's
recommendations, UGC committee's Report. Employees who
have already opted for the scheme under Statute 28-A Appendix
'A' will not be eligible for any further option. These orders ‘would
also -be applicable to the employees of the Colleges affiliated to
the University of Delhi and receiving maintenance grant from ‘the
‘University Grants Commission. The contents of this notification
shall be brought to the notice of each employee and his/ her
acknowledgement for having noted these orders obtained and opt
in the office record.”
e. By cut-off date, that is to say by 30.09.1987, 2611 employees of the
University had opted to continue under CPF while the rest of the
employees, by virtue of deeming provision of the concerned
notification referred to above, were deemed to have “come over” to
GPF.
f. However, the University kept granting extensions for exercise of
option to remain under CPF. First two extensions were, thus,
granted vide communications dated 5.10.1987 and 21.01.1988 for
8
exercising the option to remain under CPF. About 626 employees
exercised such option to continue under CPF during two extensions
granted by the University.
g. Thereafter 11 further options were granted by the University
whereunder there could be a switchover from CPF to GPF. These
options were granted vide Notifications dated 9.2.1989, 4.6.1989,
17.9.1989, 12.07.1991, 20.12.1991, 16.07.1993, 12.07.1994,
15.03.1996, 09.01.1998, 04.03.1998 and 16.11.1998. The cutoff
date for exercise of option under the last notification was 31.1.1999.
About 2469 employees exercised option during periods covered by
these 11 notifications to switchover from CPF to GPF.
h. On 25.5.1999, a letter was addressed by the University Grants
Commission (“the UGC”, for short) to the Registrar of the
University stating that the option in terms of the notification dated
01.05.1987 issued by the Central Government could be exercised
only upto 30.09.1987; and if no option was received by said date the
employees were deemed to have “come over” to the pension scheme
and thus, option once exercised, was final. Further, the revised
option given by the University to the concerned employees to switch
9
over from CPF to GPF after the deadline was incorrect and
therefore, the cost of benefit, if any, to such employees must be met
by the University from its own sources. The relevant portion of the
communication was:
“As you are already aware, the employees of University of Delhi
are governed by Central Government GPF/CPF rules. The
Government of India vide their O.M.No.4/I/87-P.I.C, dated the
1st May, 1937 (copy enclosed) had given a cut-off date as
30.09.87 to the employees for exercising their option in case they
desired to continue to be governed by the CPF Scheme, and in
case no such option was exercised by the above date all the
employees were deemed to have come over to the GPF Scheme
of the Government of India. It was also made clear that no
extension for exercising option for continuing in the CPF scheme
will be admissible as per Government of India's rules after
30.9.87.
As per guidelines of Government of India, all CPF who were In
service on 1st January,1986, and who are still in service on the
date of issue of these orders (viz. 1st May, 1987) have therefore
automatically come over to the Pension scheme. However, the
employees who have exercised an option to continue under the
CPF scheme, if they so desired have done so after due
consideration by the specific date i.e. 30.09.87. As the option was
given upto 30.9.87 and it was clearly stated in the order that if no
option is received by the above date the employees will be
deemed to have come over to the Pension Scheme and the option
once exercised shall be final. The revised option again given by
the employees to come back to GPF Scheme from CPF Scheme
and accepted by the University is absolutely incorrect and against
the rule. I would therefore request you to please furnish a list of
employees who have been given the extension of change over
from CPF to GPF after 30.9.87 and the benefit of retirement
liabilities for such employees may be met by the University from
their own sources and the same would only be treated as
unapproved expenditure while determining the maintenance grant
of the University. The next installment of maintenance grant
would only be released after the receipt of above information.”
10
i. In response to a communication dated 18.09.1999 addressed by the
UGC with respect to the subject regarding option of shifting from
CPF to GPF, the Ministry of Human Resource Development,
Department of Secondary Education and Higher Education,
Government of India (“MHRD” for short) responded on 19.06.2000
and stated:
“…. That Ministry has regretted its inability to allow one more
option to change over from CPF Scheme to the GPF Scheme to
the employees of UGC and the institutions maintained by it.”
j. On 8.08.2001, the UGC again requested MHRD to allow one
extension for exercise of option to switch over from CPF to GPF.
The proposal was, however, rejected by the Finance Ministry of the
Central Government on the ground that the cost of introduction of
pension scheme was much higher than the CPF and that such cost
would continuously increase with every revision in the scale of pay
and further that acceptance of such proposal would have wide
repercussions with many similarly placed autonomous bodies
demanding similar extension.
4. In these circumstances, Writ Petitions were filed in the High Court
claiming diverse reliefs. These petitions, by order dated 21.05.2012 passed
11
by the learned Single Judge of the High Court, were categorized into three
categories.
a. Employees who had not exercised any option at all and thus by
virtue of the deeming provisions contemplated in the notification
dated 01.05.1987, were deemed to have “come over” to GPF; but
having continued to make contributions under the old CPF scheme
were being treated to be under CPF. This batch was subsequently
referred to as “R.N. Virmani batch of cases” in the decisions
rendered by the High Court.
b. Employees who had not exercised the option by the cutoff date
contemplated under the notification dated 01.05.1987 and were thus
deemed to have “come over” to GPF; however, such employees had
exercised the option to remain under CPF scheme during first two
extensions granted by the University between 01.10.1987 to
29.02.1988; and were now praying that they be allowed to be under
GPF. This batch of cases was described to be “N.C. Bakshi batch of
cases” in the decisions rendered by the High Court.
c. Employees who had exercised positive option by 30.09.1987 i.e. by
the original cutoff date contemplated under notification dated
12
1.5.1987 and had chosen to remain under CPF Scheme; but were
now demanding that they be given further option and were therefore
praying for extension of the cut-off date to enable them to “come
over” to GPF. This group of matters was referred to as “Shashi
Kiran batch of cases” in the decisions rendered by the High Court.
5. Thus, the employees in all three batches of cases desired to be under
GPF rather than under CPF and were therefore praying for a chance to
facilitate such switchover. The reason for such attempts was spelt out with
clarity in one of the letters
3
addressed by the University to the UGC as under:
"...I have received representations from 376 teachers of
constituent colleges and departments of this University addressed
to the Chairperson, UGC, requesting for the grant of a fresh
option to switch over from the CPF to the GPF cum pension
scheme. All of them were appointed before 1.1.1986. The
representations have drawn attention to the huge disparity
between those on the GPF cum pension scheme and those on the
CPF scheme. This is because over the years and especially in the
last few years - Government decisions have led to a situation
where those entitled to pensionary benefits have been placed in a
far more advantageous position that those entitled to CPF
schemes. As a result of the Fifth Pay Commission's
recommendations, 40% of pensions can now be commuted,
giving a huge lump payment to pensioners. The communication
is restored after fifteen years. Those on CPF get only a lump
payment which includes their own contribution. Pensions are now
fully indexed to inflation and their nominal value rises twice
every year, in the case of those on CPF, the Government - keeping
in view its overall fiscal and macro-economic strategy has
reduced interest from a high of 12% in 1998 to 8% today. While
the high interest rates which made CPF schemes attractive have
come down, the nominal value of pensions keeping going up
3
Letter dated 21.12.2006, which was extracted in the decisions of the learned Single Judge as well as the Division
Bench of the High Court.
13
because of inflation indexing. All this has created a significant
disparity between those on GPF-cum-pension and those on CPF
schemes. According to a rough calculation, this could run into
several lakh rupees over a period of time in the case of two
identically placed professors. I think there is merit in the request
that those who continue to be on the CPF scheme should be given
a fresh option to switch over to the GPF cum pension scheme
instead of taking the legalistic stand that those on CPF opted for
the scheme. The Government, as a fair employer, may kindly take
action to remove the growing inequality between those on CPF
and those on GPF cum pension schemes. I would, therefore,
request you to please take up the matter with the Ministry of HRD
and the Ministry of Finance to allow a fresh option to those on the
CPF scheme to come over to the GPF-cum-pension scheme..."
6. These three batches of cases were disposed by the learned Single Judge
of the High Court by three separate decisions dated 30.04.2014
A) R.N. Virmani batch of cases
i) The reasoning that weighed with the learned Single Judge was:-
“14. In my view, the answer to the question: as to whether
employees, who had not issued any overt communication with
regard to his / her desire to continue with the CPF Scheme, stood
covered by the Pension Scheme; would largely depend upon the
provisions of O.M. dated 01.05.1987, itself.
14.1 It is not in dispute before me that O.M. dated 01.05.1987 was
adopted by the University of Delhi vide notification dated
25.05.1987 read with notification dated 04.06.1987, pursuant to
an approval received in that behalf from its Vice Chancellor.
Therefore, much would depend, in my opinion, upon the language
of the relevant clause of O.M. dated 01.05.1987. The said O.M.
clearly applies to all employees who were CPF beneficiaries on
01.01.1986. Clause 3.1 read with clause 3.2 is plainly indicative
of the fact that all such employees, who are CPF beneficiaries,
shall be deemed, to have, come over to Pension Scheme unless
the employee(s) concerned submitted his or her option to continue
with the CPF Scheme. This option had to be submitted in the
prescribed form to the concerned Head of Office by 30.09.1987.
In case, no option was received by the Head of Office by
30.09.1987, employees were deemed to have come over to the
14
Pension Scheme. Therefore, by legal fiction once, the deeming
clause kicked-in, those who did not submit their option form for
continuation under the CPF Scheme stood covered by the Pension
Scheme.”
ii) To arrive at the conclusion as mentioned above, the learned Single
Judge relied inter alia upon the following passages from the decision of this
Court in Union of India and another v. S.L. Verma and others
4
:
“..4. The Central Government as also the respondent No.14-
Bureau of Indian Standards have proceeded on some legal
misconception that it was obligatory on the part of the said
employees to give a positive option for the said purpose. For the
first time on 2.2.1999, the respondent No.14 requested the Union
of India for grant of another chance to the respondents to switch
over to pension scheme stating that they purported to have
exercised their option for CPF Scheme on the cut-off date.
7. The Central Government, in our opinion, proceeded on a basic
misconception. By reason of the said Office Memorandum dated
1.5.1987 a legal fiction was created. Only when an employee
consciously opted for to continue with the CPF Scheme, he would
not become a member of the Pension Scheme. It is not disputed
that the said respondents did not give their options by 30.9.1987.
In that view of the matter respondent Nos. 1 to 13 in view of the
legal fiction created, became members of the Pension Scheme.
Once they became the member of the Pension Scheme,
Regulation 16 of the Bureau of Indian Standards (Terms and
Conditions of Service of Employees Regulations, 1988) had
become ipso-facto applicable in their case also. It may be that they
had made an option to continue with the CPF Scheme at a later
stage but if by reason of the legal fiction created, they became
members of the Pension Scheme, the question of their reverting
to the CPF would not arise. The respondent No.14 has correctly
arrived at a conclusion that an anomaly would be created and in
fact the said purported option on the part of respondent No.1 to
13 was illegal when a request was made by respondent No.14 to
the Union of India for grant of approval so that all those
employees shall come within the purview of the Pension Scheme.
In our opinion, the Ministry of Finance proceeded on a wrong
premise that the Pension Scheme was not in existence and it was
4
(2006) 12 SCC 53
15
a new one. Two legal fictions, as noticed hereinbefore, were
created, one by reason of the memorandum, and another by reason
of the acceptance of the recommendations of the Fourth Central
Pay Commission with effect from 1.1.1986. In terms of such legal
fictions, it will bear repetition to state, the respondent nos.1 to 13
would be deemed to have switched over to the pension WP(C)
1490-1507/2006 & connected matters Page 26 of 33 scheme,
which a fortiori would mean that they no longer remained in the
CPF scheme...”
(Emphasis supplied by the learned Single Judge)
iii) The argument made by the respondents was dealt with as under
“16. The argument raised before me by the respondents, which
veered towards approbation, was based on the fact that petitioners
had continued to contribute under the CPF Scheme. This
submission would not cut much ice with me, having regard to the
plain terms of O.M. dated 01.05.1987. If, the cover under the
Pension Scheme, gets triggered with effect from 30.09.1987, the
contribution by an employee and its receipt by the employer
clearly proceeds on a misconception of the provisions of O.M.
dated 01.05.1987. WP(C) 1490-1507/2006 & connected matters
Page 29 of 33 As a matter of fact, this very argument was repelled
by the Supreme Court, in S.L. Verma’s case, and I think, for good
reason. Consequently, there is no room for entertaining such an
argument. The relevant observations made in paragraph 7,
specific to this aspect, are, once again, extracted hereinafter.
“..It may be right they had made an option to continue with the
CPF Scheme at a later stage but if by reason of the legal fiction
created, they became members of the Pension Scheme, the
question of their reverting to the CPF would not arise..”
iv) It was therefore directed :-
“20. Having regard to the above discussion, the respondents-
University of Delhi/concerned Colleges will be entitled to recoup
their contribution under the CPF Scheme, if not already recouped,
with simple interest at the rate of 8% p.a.”
v) The petitions were thus allowed.
16
B) N.C. Bakshi batch of cases
i) While deciding this batch of cases, reliance was placed on the
decision in R.N. Virmani batch of cases to conclude that the option to
remain under CPF was exercised by the petitioners after the cut-off date
and only during extensions granted by the University, which extensions
were without any authority. It was observed:-
“In the judgment delivered by me in the batch of writ petitions, in
which the lead petition was numbered as : WP(C) 1490/2006-
1507/2006, titled as: Dr. R.N. Virmani and Ors. Vs. University of
Delhi and Anr., I have held that the provisions of the O.M. dated
01.05.1987 required a positive option to be given only if, an
employee was desirous of continuing with the CPF Scheme and
that too by 30.09.1987. In the event, no positive option was
received from an employee expressing his or her desire to
continue with the CPF Scheme then, the employee stood
automatically covered by the Pension Scheme by virtue of the
deeming legal fiction created under the provisions of the O.M.
dated 01.05.1987. This conclusion, I had reached after examining
the provisions of O.M. dated 01.05.1987, in particular, clauses 3.1
and 3.2 and the form appended to it. As noted in the said
judgement, this is also the view taken by the Supreme Court in
the case of Union of India and Anr. Vs. S.L. Verma and Ors.,
(2006) 12 SCC 53. For the sake of brevity, I am not detailing out
in extenso the rationale provided in the said judgement. The
observations made in the said judgment be read as part of the
present judgement……..
*** *** ***
4.2 Having regard to the aforesaid stand of the counsels for the
UGC, University of Delhi and concerned Colleges, the only
conclusion that I can come to is that notwithstanding the fact that
the petitioners in this batch of petitions had overtly expressed
their desire to continue in the CPF Scheme, they got automatically
covered by the Pension Scheme, once, the cut-off date of
30.09.1987, was crossed. Therefore, the objection qua delay and
latches cannot be sustained in case of these writ petitioners, save
and except, in those cases where the petitioners received, upon
17
retirement, without protest (either by filing an action in court or
otherwise) their benefits under the CPF Scheme. As explained in
Dr. R.N. Virmani’s judgement delay and latches will not get
attracted as the cause of action in these cases if not continuing, is
certainly recurring, each time the record was not corrected. (read
paragraphs 17.3 & 17.4 of Dr. R.N. Virmani’s judgment delivered
by me today along with this judgement). The availability of relief
to such petitioners, who collected their CPF benefit without
protest, one would deny, not on the interpretation of the
provisions of O.M. dated 01.05.1987, but on the grounds of
equity. The exercise of jurisdiction under Article 226 of the
Constitution being a discretionary remedy in such like cases, I
would not be persuaded to exercise my discretion. Furthermore,
once CPF benefits are collected without protest cause of action
will decidedly come to an end. Therefore, the captioned writ
petitions are allowed qua all the petitioners except vis-a-vis the
petitioner in WP(C) No. 5981/2010 and, in respect of petitioner
No.11 in WP(C) No.1216/2011.”
ii) Thus, with the exception of cases where CPF benefits were
collected by the concerned petitioners, all the petitions in this batch of
cases were allowed.
C) Shashi Kiran batch of cases
i) The relevant facts and submissions were set out as under:-
“(iv) that as per the additional affidavit filed by the University of
Delhi, which is impleaded as respondent no.4 in WP(C)
5759/2010, twelve (12) extensions were given by the said
University to the employees between 09.02.1989 to 16
th
/17
th
.11.1998 and 20.11.1998 to 16.12.1998, to change over, from
CPF Scheme to the Pension Scheme. During this period, a total
number of 2469 employees both from University of Delhi and
from 52 of 86 colleges affiliated to the said University had availed
of the option of switch over to the Pension Scheme. Of these 2469
employees, 1368 had retired and were now in receipt of pension
from University of Delhi, out of the funds made available by the
UGC.
18
(v) The present petitioners and those who are part of the other
two batches of the petitions, heard by this court, thus, constituted
a small percentage of the total number of employees, who have
been allowed to switch over after the cut-off date of 30.09.1987,
was crossed over. …
*** *** ***
11.1 On being asked, as to what would be the position of the
GOI with regard to the pension liability already undertaken by the
University of Delhi vis-à-vis 2469 employees, Mr. Bajaj said that
the liability in that behalf would have to be born and adjusted by
the University of Delhi under the had ‘unapproved expenditure’.
11.2 I may note at this stage that a similar query was put to Mr.
Amitesh Kumar, the learned counsel appearing for UGC who,
took an identical stand on the issue. Mr. Bajaj, thus, made it a
point to draw my attention to the observations made in paragraph
8 at page 56 of the judgment of the Supreme Court in the case of
Union of India and Anr. vs. S.L. Verma and Ors., (2006) 12
SCC 53 in support of its stand that the GOI, could not be called
upon to bear the financial burden of the decision taken by the
University of Delhi, to extend the date of change over. Reliance
in this regard was also placed on the judgement of the Division
Bench of this court in the case of Union of India vs. UGC Class
1 Officers Association and Ors., (2006) 87 DRJ 783.”
ii) The effect of notifications issued by the University giving
extensions was considered as under:-
“15. This would bring me to the next argument advanced by
the counsel for the petitioners that no notice was given to the
petitioners in the manner prescribed in circular dated 09.02.1989
and notification dated 11.02.1998. This argument, in my opinion,
is once again mis-conceived for the following reasons:-
(i) First and foremost, having reached the conclusion that no
extensions could have been given by the University of
Delhi without due approval of the UGC or the GOI, the
entire argument is, in a sense, a non-started.
(ii) Second, the petitioners having given their positive options
to continue under the CPF Scheme in terms of O.M. dated
19
01.05.1987, as adopted by the University of Delhi, cannot
now resile from the said position.
(ii)(a) assuming without accepting that University of Delhi
could grant extensions, a careful reading of the circular dated
09.02.1989 would demonstrate that even as per the University the
circular was intended to give one more opportunity to those
employees of the University of Delhi or colleges affiliated to it,
which were, receiving maintenance grant from the UGC to “come
over to the pension Scheme.” The circular was not directed
towards those employees, who had consciously opted to remain
in the CPF Scheme. In other words, no come back situation was
contemplated in the said circular. …”
iii) The petitioners having consciously exercised the option to be
under CPF, the prayer that they be given opportunity to switchover
was not accepted and the petitions were dismissed.
D) The case of 2469 employees who were given chance to switchover
after the cut-off was dealt with as under:-
“17. Before I conclude I must only clarify that the argument of
the petitioners that 2469 employees had been allowed to switch
over even after they had their given their option to continue under
the CPF scheme and, thus, the respondents had discriminated
against this set of petitioners is, an argument, which cannot be
countenanced in law. As is well settled, by several judgements of
the Supreme Court that there is no equality in illegality (see M.K.
Sarkar’s case, paragraph 25 at page 69). If, the University of
Delhi, has wrongly permitted switch over to some of its
employees to the Pension Scheme contrary to the provisions of
O.M. dated 01.05.1987 as adopted by it, it cannot be the ground
to grant relief to the petitioners. Since, the case of those 2469
employees is not before me, I am not required to return a finding
on them. As indicated by counsel for UGC and the Union of India,
the expenditure, if any, on account of the said 2469 employees
can only be classified under the head, 'unapproved expenditure'
and, therefore, the financial burden if at all, in that behalf would
lie only on the University of Delhi.”
20
7. These decisions in all three batches of cases were appealed against by
the University before the Division Bench, which dealt with each of these
batches as under:-
A) R.N. Virmani batch of cases:
“17. This court is of opinion that the submissions of the
University, the appellant, in regard to the Virmani’s order, have
no force. There is no denial and there can be none- that the nature
of the scheme contemplated by the 01.05.1987 notification was to
ensure that only those wishing to continue in the CPF scheme had
to opt to do so. A default in that regard, meant that the employee
not filling his option (to continue in CPF) was deemed to have
“come over” or migrated to the Pension Scheme. The University
and the official respondents (UGC, Central Government etc) had
urged that the petitioners in the Virmani group are deemed to have
accepted the CPF benefits, because they allowed deductions from
their monthly salaries during the interregnum and permitting
Pension Scheme benefits would not be fair; in the same breath it
was urged that there was delay. This court is of opinion that the
University – and the respondents are relying on contradictory
pleas. If they urge that the true interpretation of the 1987 circular
meant that anyone not furnishing an option to continue in the CPF
scheme is deemed to have opted for the Pension Scheme (as the
Virmani group undoubtedly did) there is no way they can succeed
on the ground of laches or estoppel. If plain grammatical meaning
of the language of the May 1987 OM were to be given, all those
who do not opt would automatically be borne in the Pension
Scheme. Such being the position, the argument that the petitioners
in Virmani allowed deduction of CPF amounts from their salary,
cannot be argued against them. CPF schemes typically require
employees to commit greater amounts than in GPF scheme, on a
monthly basis. That these staff members allowed higher amounts,
which were held under a scheme (and which earned interest), the
benefit of which had not accrued and was not available to them
till the date of superannuation, cannot be urged against them.
Likewise, the question of laches would not arise, because at the
most, pension would not be allowed for the entire period, given
that in matters of pension (see Union of India & Ors. V. Tarsem
Singh (2008) 8 SCC 648) there is a continuing cause of action.
Therefore, we find no infirmity with the learned Single Judge’s
order, in Virmani’s case.”
21
The appeals were thus dismissed.
B) N.C. Bakshi batch of cases:
“20. This court is of the opinion that no infirmity can be found
with the approach or reasoning of the learned Single Judge, in
allowing the respondents’ petitions. The learned Single Judge
made a factual analysis, in this category of teaching staff. The
chart, prepared for the purpose, and extracted at Para 3.1 of the
judgment in this batch (N.C. Bakshi v Union of India WP
5310/2010) shows that all the employees opted for the CPF
benefits, after the cut-off date. It was because of this and the
expressed stand of the UGC- and the University that the learned
Single Judge concluded that notwithstanding the so called option,
exercised in terms of the extensions given, the writ petitioners
could not be denied the benefit of the Pension Scheme because
they were deemed, by the OM of 01.05.1987 to have opted for it,
by default. Having regard to these facts, the appellants could not
have urged that the benefit of the Pension Scheme should have
been denied to these class of petitioners/teaching staff. Therefore,
we are of opinion that there is no infirmity with the impugned
judgment of the learned Single Judge. The University’s appeals,
therefore, deserve to fail.”
The appeals in this batch of cases were thus dismissed.
C) Shashi Kiran batch of cases:-
i) The distinction between cases in this batch as against the other
batches was noted thus:-
“21. The last category is the Shashi Kiran batch. Here, the
University staff, who constituted the writ petitioners, had
consciously opted for the CPF benefits. Their grievance was that
of discriminatory exclusion. They had approached the court,
contending that when they sought for options, the respondents
refused to extend it, saying that the previous extensions had ended
and later, that the UGC and the Central Government had refused
to grant approval.
“23. The discrimination complained of by the appellants in Shashi
Kiran’s batch of cases is that even though the deadline of
22
30.09.1987 was not deemed sacrosanct by the University (and
through omission and, therefore, tacit approval, by UGC and the
Central Government) a large number of employees who had not
opted either way were allowed to switch-over to the Pension
Scheme through options given over 14 years, by 12 different
extensions. Given that the ground realities had undergone a sea
change, the CPF scheme was unfeasible and had lost viability; on
the other hand, the Pension Scheme was more beneficial. These
appellants argue that in such a situation, when 2469 staff
members opted for pension on various dates during these
extensions, when they wished to do so, the respondents unfairly
refused the benefit.
24. The learned Single Judge’s view has some logic in it because
the University refused the Pension Scheme benefits in case of
those who had chosen it: in Virmani’s case, by default (i.e. no
option, which meant deemed option) and in the other cases,
because of the option for CPF, given after the date prescribed.
While the logic for directing relief in the first category (Virmani)
is sound, the second category was given relief by ignoring that
they consciously wished to switch-over to the CPF scheme, but
after the cutoff date. Thus, the learned Single Judge ignored the
conscious choice made only on the ground that the choice or
option for CPF was after the cut-off date. Now, this has led to a
peculiar situation where those who opted for CPF benefits have
been divided into two categories: one, who opted before the cut-
off date and two, those who opted after the cut-off date. The latter
have been given relief. That is also the basis for refusing relief to
the former, who are appellants in this batch.
25. As noticed earlier, 2469 staff members are enjoying the
benefit of the Pension Scheme, on account of the choice or option
made by them…….”
ii) It was thus observed:
“26. If these facts are taken together with the Central
Government’s conceded stand in permitting staff members and
employees in other institutions, including educational institutions
such as IIT Kanpur, the Department of Atomic Energy and
Council for Scientific and Industrial Research to opt in extended
dates for switch-over qua its employees, the rejection of UGC's
request that the conversion date be extended till 31.12.2003,
reveals the arbitrariness and non-application of mind by the
Central Government.
23
27. That the Central Government permitted change over as late
as till 31.12.2003, i.e before the sixth pay commission
recommendations (introducing CPF benefits to all those
employed later, universally with effect from 01.01.2004). This
aspect assumes critical importance, because the Central
Government (and UGC) admit that all those who opted after the
cutoff date (and many of them having opted for CPF earlier) have
been granted benefits under the Pension Scheme. The ground
realities with respect to the nature of benefits that accrue to CPF
optees in comparison with GPF/Pension optees paints a stark
picture. One should keep in mind that while opting for such
schemes, employees cannot gaze into the crystal ball, as it were,
and speculate whether the existing state of affairs would continue.
At the time when these options were sought and given, those
opting for CPF were reasonably certain that having regard to the
nature of contributions and the rate of interest, the end package
would compare favourably with Pension optees, with respect to
returns earned at the stage of superannuation. In other words,
when the options were given, these appellants were in
employment; neither they, nor for that matter the respondents
could have visualized a drastic fall in the interest rates, which
severely undermined the CPF option and shrunk the ultimate
lump sum CPF benefit available to these appellants. While
examining whether a statute once valid and upheld as such on the
ground of Article 14 ceases to be so due to later developments
and with passage of time, the Supreme Court has declared in a
number of judgments that the earlier declaration of validity or
basis of classification cannot be the basis to deny the arbitrariness
of the law, if it is proved to be so later (Refer to State of Madhya
Pradesh Vs. Bhopal Sugar Industries (1964) 6 S.C.R. 846;
Narottam Kishore Dev Varma and Ors. Vs. Union of India and
Anr. (1964) 7 S.C.R. 55 ; H.H. Shri Swamiji of Shri Admar Mutt
etc. vs. The Commissioner, Hindu Religious & Charitable
Endowments Department and Ors. (1980) 1 S.C.R. 368; Motor
General Traders and Anr. Etc. etc. vs. State of Andhra Pradesh
and Ors. etc. 1984 (1) S.C.R. 594.) In H.H. Shri Swamiji of Shri
Admar Mutt etc (supra) it was held that:
"there is a firm foundation laid in support of the
proposition that what was once a non-discriminatory
piece of legislation may in course of time become
discriminatory and be exposed to a successful
challenge on the ground that it violated Article 14 of
the Constitution."
28. In this case, clearly when the appellants opted for CPF
benefits, they did so without premonition of future developments.
24
The net result was that as between two individuals in the same
grade and post, carrying the same pay scale, one who opted for
the Pension Scheme was entitled to a substantial amount and
future adjustments in pension whenever Dearness Allowance
were to be enhanced. However, for the appellants, there was no
such advantage; they saw a shrinking package on account of later
developments – notably the drop in interest rates. Now, interest at
the rate or anyway, somewhere near the rates, which prevailed
when the scheme was introduced, was one of the significant basis
for the CPF scheme. With a drastic change in the rates, those
opting for CPF were at a grave disadvantage. To compound their
problems, the University’s interpretation of a fairly clear Office
Memorandum (dated 01.05.1987) injected much confusion. The
third factor is that even amongst University staffers, 12 extensions
were given and a large number of options for the Pension Scheme
were furnished – both in respect of those who opted for CPF
earlier and those who did not. Taking the totality of
circumstances, the University’s insistence to pin the appellants to
the options they originally exercised is discriminatory.
29. The other reason why this court is inclined to allow this appeal
is that neither the Central Government nor the UGC have
furnished a single reason for why option to switch-over to the
Pension Scheme was permitted up-to 31.12.2003 to several other
autonomous institutions and denied to the appellants. This
singular omission to say what compelled the Central Government
to deny the petitioners the benefit of switch-over, while
permitting those in other institutions, in the opinion of the court,
clearly amounts to discrimination. The mere fact that the
petitioners are working in the University whereas the other
employees work in other institutions is not sufficient, given that
the consistent stand is that options once given cannot be altered.
Therefore, it is held that denying the right to opt to the Pension
Scheme in the case of the Shashi Kiran batch is unsustainable; it
has resulted in arbitrariness.”
The appeals in this batch of cases were thus allowed.
8. The University accepted the decision in R.N. Virmani batch of cases
and as such no appeal has been preferred. It, however, is in appeal in the other
two batch of cases. At this stage, some of the documents which were not part
25
of the record before the High Court but were placed before us, must be
adverted to:-
a) On 08.08.2001, a communication was addressed by the UGC to the
Joint Secretary, MHRD. The relevant portion of the letter was:-
“…Many autonomous bodies including the universities have
adopted the basic policy of this circular but they have not
restricted to the cut off date and allowed their own cut off dates
to their employees for switchover from CP fund to GP fund.
Some of the Institutions have allowed this changeover till 1998.
However, some of the institutions under UGC who have shown
better discipline and also some of the employees of UGC itself
are representing now to allow their employees a chance to
switchover from CP fund to GP fund. In UGC, this number is 5
or 6 only.
Respective Ministries presumably have also not issued any
circular allowing this benefit to the employees of autonomous
bodies under their control. This has led to a situation where
different disparity among the employees in different autonomous
bodies as far as benefits under CP fund to GP fund is concerned.
For example, IIT, Kanpur allowed conversion until 30.7.98 and
kept this open for charge over for another fifteen years after
continuous service, in case they do not switch over by that date.
Copy of IIT, Kanpur letter dated Atomic Energy, Govt. of India
vide their letter 2/1/99/SCS/665 dated 12.10.2000 have also
extended another chance to opt for said switchover in case of
Technical employees of DAE. Similarly, CISR have allowed one
more option to all its employees to switchover. Their letter No.
17(197)/90-EII dated 25.1.99 is enclosed for reference.
On demand of employees of UGC and also the employees of the
Universities, the Commission considers it necessary to obtain
consent of your Ministry to allow one more cut off date to stop
this disparity in UGC and other autonomous institutions within
UGC umbrella specially in all those institutions where the
pension scheme already exists and only a few employees have
been left out for switchover from CP fund to GP fund. The cost
of extending the scheme in those left out cases will also be very
little so as to be called an additional burden on the exchequer.
Extension of the conversion scheme in institutions where pension
scheme is already existing is also necessary as Government have
26
extended the revised pay scales on the condition that these
institutions will maintain parity in all terms and conditions that
these institutions will maintain parity in terms and conditions of
service of its employees with the corresponding category of
employees in Govt. of India.
I would therefore request you to please consider this suggestion
and extend the schemes of conversion from CP fund to GP fund
scheme to all employees of autonomous bodies (or to employees
of UGC/Central & Deemed Universities) who already have
pension scheme since inception, and notify some clear cut off
future date, so that those institutions do not fix their own cut off
date/dates and create disparities and confusion.”
b) The stand of the MHRD is clear from one of the communications,
namely letter dated 24.10.2002 addressed by the MHRD to the UGC which
stated:-
“2. Since the University Grants Commission is the funding
agency and it itself had extended the Government policy on
conversion from CPF to GPF to the Central Universities and
Deemed Universities receiving 100% maintenance grant from the
UGC, no specific Government instructions are warranted to
decide the cases of those employees of the University of Delhi
who had been permitted irregular conversion from CPF to
GPF/Pension Scheme after the prescribed cut-off date.
3. You are, therefore, advised to decide the issue at your end
without referring it to this Ministry.”
c) Soon after the decision of the Division Bench of the High Court, a
communication was addressed by the University on 13.10.2016 to MHRD that
about 306 employees would be eligible to draw pension in terms of said
decision.
27
d) A letter dated 23.1.2017 was written by the Under Secretary to
Government of India, Ministry of Education, to the Registrar of the
University. Paragraph 2 of the letter stated as under:-
“2. The directions/observations in the matter are as under for
compliance: -
(i) To allow GPF/Pension of Government in respect of those
employees who were in service as on 01/01/1986, unless
they have specifically and in writing chosen the option to
stay with CPF. However, in respect of the employees who
have already retired, the question of surrender of the
University’s portion of the CPF as already taken by them,
will have to be dealt with by the University of Delhi on
consultation with the UGC/MHRD. Delhi
University/Concerned Colleges will ensure to recoup their
contributions under the CPF Scheme with simple interest
of 8% per annum. Thus while seeking option from the
employees this point will have to be appropriately taken
care by the MHRD/UGC/DU and Concerned Colleges.
(ii) In all other cases, University of Delhi is advised to file an
appeal against the order of the Hon’ble Delhi High Court,
in consultation with the UGC/MHRD.
(iii) In case any other employee who was not in service as on
01.01.1986 and joined thereafter, the question of
application of order of Department of pension dated
01.05.1987 shall not arise and as such if any order of any
Court of Law allows pension in their cases, the University
of Delhi may have to appropriately file appeal in the
appropriate appellate Court in consultation with UGC and
MHRD.
3. The University may take appropriate action in light of the
above and also to defend the interest of Govt. of India in all such
Court cases arising in the matter.”
e) On 29.03.2019 a letter was written by MHRD to the Secretary, UGC.
The relevant portion of the letter was:-
28
“2. The matter of non-settlement of pension issue of such
employees of University of Delhi and its Colleges who retired
after the order was passed by the Single Bench of Delhi High
Court on 30.4.2014 on the grounds that UGC counsel had
mentioned in the court that the expenditure on pension was
unapproved whereas those who retired prior to 30.4.2014 were
allowed pension by the University.
3. The matter has since been examined in consultation with
D/o Expenditure and it has been decided that if in this case
pension was allowed to a group of employees by DU, out of
which some have already been allowed pension on having retired
after recovering their CPF accumulation approximate to the
employer’s contribution, then the employees in this case may be
allowed pension, if they belong to the same group which was
allowed switch over from CPF to GPF by DU and where a few
employees have already been availing themselves of pension and
if employer’s contribution to CPF has been recovered in their
case, provided they are not related in any way whatsoever to the
case decided by the Delhi High Court on 24.8.2016.”
f) Soon thereafter a communication was addressed by the UGC to the
University, the subject being: -
“Release of pension benefits in respect of employees – who have
opted pension scheme from 1989 to 1998 and have retired after
the judgment of High Court of Delhi – Regarding.”
The relevant portion of the letter was :-
“I am directed to inform you that the MHRD vide its letter no. 4-
41/2014-Desk (U) dated 29
th
March, 2019 (copy enclosed) has
informed that the matter has since been examined in consultation
with D/o Expenditure and it has been decided that if in this case
pension was allowed to a group of employees by DU, out of
which some have already been allowed pension of having retired
after recovering their CPF accumulation approximate to the
employer’s contribution, then the employees in this case may be
allowed pension, if they belong to the same group which was
allowed switch over from CPF to GPF by DU and where a few
employees have already been availing themselves of pension and
if employer’s contribution to CPF has been recovered in their
29
case, provided they are not related in any way whatsoever to the
case decided by the Delhi High Court on 24.8.2016.”
g) On 02.03.2019, a communication was addressed by the Under
Secretary to Government of India, Ministry of Finance, Department of
Financial Services to the Chairpersons of Life Insurance Corporation of India
and other Insurance Corporations in public sector. The subject of the letter
was:-
“Final option for pension to leftover employees of Public Sector
Insurance Companies (PSICs) namely Life Insurance
Corporation of India, General Insurance Corporation of India,
Oriental Insurance Company Limited, United India Insurance
Company Limited, National Insurance Company Limited and
New India Assurance Company Limited: Reg.”
The communication stated:-
“The issue of grant of final option for pension to leftover
employees of Public Sector Insurance Companies (PSICs) was
under examination with the Central Government. It has now been
decided to allow a final option to those who joined service on or
before 28.06.1995 to opt for pension as a retirement benefit.
2. PSICs are requested to submit to this Department a detailed
scheme for approval and notification incorporating, inter alia, the
following parameters:
(i) In the case of serving employees who opt for pension,
employer’s contribution along with the interest to be
transferred to the pension fund. In addition, they would
also contribute a certain multiple of pay as was done in
the case of public sector banks;
(ii) For retired employees/families of deceased employees a
certain multiple of employer’s contribution to Provident
Fund and interest thereon received by the employee on
retirement to be refunded, as was done in the case of
public sector banks.
30
(iii) Pension/Family Pension to those who now opt to join the
pension scheme, will be payable with effect from the date
notification of the scheme. However, the employees
retiring after that date will be eligible for pension with
reference to their respective date of retirement.”
9. After hearing learned counsel for the parties who inter alia invited
attention of this Court to the documents adverted hereinabove, this Court
passed the order dated 02.03.2020, which stated:-
“Though their submissions are concluded, certain doubts have
arisen after the learned counsel invited our attention to various
documents on record.
Some of those documents are (i) letter dated 8.8.2001 from
University Grants Commission (for short “UGC”) to the Joint
Secretary, Government of India, Ministry of Human Resource
Development (for short “MHRD”,) placed on record at pages 46-
47 of the Convenience Volume, (ii) the response dated
24.10.2002 appended at page 48 of the Convenience Volume,
from the MHRD to the aforesaid letter dated 8.8.2001; (iii) the
letter dated 13.10.2016 written by Delhi University to the
Secretary, Department of Higher Education, MHRD appended at
page 58 of the Convenience Volume) and (iv) the letter dated
2.3.2019 from the Government of India (Ministry of Finance), at
page 63 of the Convenience Volume, in so far as certain
institutions like LIC and other Insurance Companies are
concerned.
One of the basic issues that arises in the matter is whether in terms
of Para 3.1 of O.M. dated 1.5.1987 was it competent for the
concerned institutions/authorities to keep on extending the period
within which options could be exercised by the concerned
employees.
It is in this light that the Division Bench of the High Court in
paragraphs 26 and 27 referred to certain facts including the stand
of the Central Government constituted in permitting several
members and employees in other institutions including
educational institutions such as IIT, Kanpur to give option by
extending dates for switch over till 31.12.2003.
31
All these communications do not spell out any consistent stand
on the Central Government. Though the Central Government and
the UGC are parties to the present list, no stand has been taken on
record by filing any appropriate affidavit.
In the circumstances, we call upon Central Government (Ministry
of HRD) as well as the UGC to file affidavits within seven days
from today and place their stand on record giving complete
details.
Delhi University is also called upon to place on record following
information by way of an affidavit:
(a) How many employees who were employed before 01.01.1986,
had opted to be covered under CPF Scheme by 30.09.1987.
(b) How many employees exercised the option to be part of CPF
Scheme after 30.09.1987 but within first two extensions allowed
by Delhi University.
(c) How many employees who had opted to be part of CPF,
exercised the reverse option granted to them and opted to be under
GPF.
(d) How many writ petitioners wanted similar benefit and
extension of some facilities as was granted to the employees
referred to in Para (c) above.
(e) How many employees are presently in service who answer
description that they are employees from before 1.1.1986 and are
still part of CPF Scheme.
Copies of the communications referred to in the earlier part of the
order shall also be supplied alongwith a copy of this order to the
Central Government and the UGC.”
9.1 In response to the questions posed in the Order dated 02.03.2020,
following information was supplied through the affidavit filed on behalf of
the University.
32
“3. That in pursuance of the aforementioned directions, the
petitioner is providing the following itemized response.
(a) How many employees who were employed before 01.01.1986,
had opted to be covered under CPF Scheme by 30.09.1987.
RESPONSE:
Approximately 2611, who were employed before 01.01.1986,
had opted for CPF Scheme by 30.09.1987
(b) How many employees exercised the option to be part of CPF
Scheme after 30.09.1987 but within first two extensions
allowed by Delhi University.
RESPONSE:
That approximately 626 employees exercised the option to be
part of CPF Scheme after 30.09.1987 but within the initial two
extensions allowed by the Delhi University.
(c) How many employees who had opted to be part of CPF,
exercised the reverse option granted to them and opted to be
under GPF.
RESPONSE:
That approximately 2469 employees who had opted to remain
in CPF exercised the reverse option granted to them and opted
to come over to GPF.
(d) How many writ petitioners wanted similar benefit and
extension of same facilities as was granted to the employees
referred to in Para (c) above.
RESPONSE:
Under category-1 i.e. N.C. Bakshi batch, 172 employees
wanted similar benefit of extension as was granted to the
employees referred to in Para-c above whereas the number of
such employees falling under category-2 i.e. Shashi Kiran
batch is 75.
(e) How many employees are presently in service who answer the
description that they are employees from before 1.1.1986 and
are still part of CPF Scheme.
33
RESPONSE:
51 respondents belonging to category-1 i.e. N.C. Bakshi
Batch and 86 respondents under category-2 i.e. Shashi Kiran
batch were appointed before 01.01.1986 are presently in
service and they are still part of CPF Scheme.”
9.2 In the affidavit filed on behalf of Union of India, Ministry of Education,
answer to question no.4 was given as under:-
“The Department of Pension and Pensioners’ welfare O.M.
dated 01.05.1987 provides that all CPF beneficiaries, who
were in service on 1.1.1986 and who are still in service on
the date of issue of these orders will be deemed to have
come over to the Pension Scheme. These orders apply to
all Civilian Central Government employees who are
subscribing to the Contributory Provident Fund under the
Contributory Provident Fund Rules (India), 1962. Further,
D/o Financial Services vide O.M. dated 02.03.2019 has
allowed the employees of Public Sector Insurance
Companies for a final option to those who joined service on
or before 28.06.1995, to opt for pension as a retirement
benefit. This O.M. is not applicable to Central Government
as well as autonomous bodies employees.”
It was further stated:-
“4. At the very outset, it is informed that in case this
Hon’ble Court decides the appeal against the University of
Delhi and the Union of India, the financial implications of
the same would have a snowball effect, as the same would
become applicable to all the Central Universities
throughout India, which would open a flood-gate of
litigation.”
10. The matter was thereafter extensively argued on behalf of the
University. It was submitted:-
34
a) The difference between CPF and GPF was always in existence
and as held by the Constitution Bench of this Court in Krishena
Kumar vs. Union of India and others
5
, the rules governing the
Provident Fund and its contribution would be entirely different
from the rules governing the Pension Scheme.
b) Under the notification dated 01.05.1987, the choice was
completely left to the employees and it was purely optional. An
optional scheme involving financial decisions could not be
converted into a compulsory scheme.
c) Comparison with employees of IITs, Department of Atomic
Energy and Insurance Companies was impermissible as the
employees of the University and these organizations did not form
a homogeneous class. Their terms and conditions of service,
financing pattern and financing departments were completely
different.
11. Number of learned senior counsel and other learned counsel appeared
on behalf the respondents-employees and submitted: -
5
(1990) 4 SCC 207
35
a) Though, notification dated 01.05.1987 was to the knowledge of
everyone, the subsequent extensions and chances to switchover
granted by the University were not brought to the knowledge of
all the employees and the respondents were thus prejudiced.
b) If the mandate under the notification dated 01.05.1987 was to be
followed scrupulously, the University could not have granted
subsequent option of switchover. But 2469 employees were
allowed to ‘come over’ to GPF after the cut-off date. Going by
various communications placed before the Court, such
employees were allowed full benefits under GPF. The case of
the present respondents-employees was not, in any way, different
from such 2469 employees.
c) The University being a Central University, its employees would
rank on similar footing as that of the organisations like IITs and
AIIMS. If extensions were granted to employees of the IITs, the
employees of the University were also entitled to similar benefit.
d) The Division Bench was, therefore, justified in setting aside the
view taken by the learned Single Judge of the High Court in
36
Shashi Kiran batch of cases but affirming the view in other two
batches.
12. The common thread which ran through the decisions of the learned
Single Judge pertaining to three batches of cases, was that the text of the
notification dated 01.05.1987 was clear that if no option was exercised by the
concerned employees before the cut-off date, they would be deemed to have
‘come over’ to GPF. It was only a positive option exercised by the employees
to continue to be under CPF which could have departed from such deeming
provision. Once exercised, the option was final and as such, there could be
no switchover from those who had consciously opted to be under CPF.
Further, relying on the decision in S.L. Verma
4
, it was observed that any
exercise of option after the deadline or the cut-off would be inconsequential.
It was on this premise that the cases in R.N. Virmani batch of cases and N.K.
Bakshi batch of cases were allowed by the learned Single Judge.
As regards Shashi Kiran batch of cases, the learned Single Judge
observed, that once the conscious decision was taken and option was
exercised to continue to be under CPF, there was “no room for any come back
situation.” The cases in the third batch were therefore, rejected.
37
13. However, the learned Single Judge observed that 2469 employees who
were given facility of such switchover after the cut-off date, though they had
also consciously opted to be under CPF, were not before the Court, and as
such, their cases had to be left untouched. It is a matter of record and which
aspect is clear from the communications referred to in paragraph 8
hereinabove that most of those 2469 employees, at the time of retirement,
were given all the benefits that were available to those who had opted to be
under GPF. Thus, those 2649 employees were certainly allowed to avail the
benefit of switchover which was not granted in favour of the employees in the
third batch of cases.
14. Affirming the view taken by the learned Single Judge in the first two
batches of cases, the Division Bench set aside the view of the learned Single
Judge only in the third batch of cases i.e. in Shashi Kiran batch of cases. As
the observations made by the Division Bench indicate, the matter was placed
on the ground of discrimination and principles of equality.
15. According to the notification dated 01.05.1987 two situations were
contemplated. First, the deeming provision in terms of which the concerned
employee was taken to have ‘come over’ to GPF. The second situation being
where a conscious option was exercised before the cut-off date to continue to
38
be under CPF. R.N. Virmani batch of cases was therefore rightly allowed by
the learned Single Judge and the Division Bench of the High Court, as no
conscious option was exercised by the cut-off date. Consequently, the
concerned employees must be deemed to have ‘come over’ to GPF.
Logically, it would be immaterial whether the concerned employee continued
to make contribution assuming himself to be covered under CPF, even though
contributions were made by the concerned authorities. The benefit was
therefore rightly granted in favour of the employees and the entire
contribution was directed to be refunded. The University has chosen not to
appeal against that decision and thus the matter has attained finality.
Theoretically, extension of the same principle would be that if no option
was exercised before the cut-off date, but an option was exercised after the
cut-off date was extended; and if no switchover could be allowed after the cut-
off date, the decisions rendered by the learned Single Judge and the Division
Bench in the N.C. Bakshi batch of cases were also quite correct.
Consequently, irrespective of the fact that the concerned employees had
exercised the option to continue to be under CPF, such exercise of option
would be non est in the eyes of law. That in fact is the ratio of the decision in
S.L. Verma’s
4
case. Thus, both these batches of cases were rightly decided
39
by the learned Single Judge and the Division Bench. We, therefore, dismiss
the appeal in N.C. Bakshi batch of cases.
16. We now turn to Shashi Kiran batch of cases.
17. As indicated by the University in its affidavit filed after the Order dated
02.03.2020 was passed by this Court, 2611 employees had opted to be under
CPF Scheme by the cut-off date, i.e. by 30.09.1987. Additionally, 626
employees exercised the option to be under CPF after the original cut-off, but
within initial two extensions granted by the University. Thus, as against the
entire body of employees of the University, 3237 (2611+626) employees had
exercised the option to be under CPF. Out of these 3237 employees, by virtue
of further extensions granted by the University, about 2469 employees
exercised the reverse option and opted to “come over” to GPF, leaving only
768 (3237-2469) employees to be under CPF. The answers to queries ‘d’ and
‘e’ given by the University in its affidavit indicate that the number of
employees in CPF Scheme was 86 while the petitioners in Shashi Kiran batch
were 75. We are, thus, concerned with 75 original petitioners in Shashi Kiran
batch of cases.
18. In Krishena Kumar
5
, the distinction between the Provident Fund
Scheme and the Pension Scheme was considered by the Constitution Bench
40
of this Court. In that case, the employees who had joined the service on or
after 01.04.1957 were to get covered automatically by the Pension Scheme
and insofar as employees who were already in service on 01.04.1957, they
were given an option either to retain the Provident Fund benefits or to
switchover to the pensionary benefits. About 12 extensions were thereafter
granted so that the options could be exercised by the employees within the
extended time. Those who had chosen not to exercise such option, were
before this Court. The basic nature of the Scheme was discussed in paragraph
7 of the decision as under:-
“7. We may now examine these options. The Railway Board’s letter
No. F(E) 50-RTI/6 dated November 16, 1957 introduced the pension
scheme for railway servants. It said that the President had been pleased
to decide that the pension rules, as liberalised vide Railway Board’s
Memo No. E-48 OPC-208 dated July 8, 1950 as amended or clarified
from time to time should apply “(a) to all Railway servants who entered
service on or after issue of that letter and (b) to all non-pensionable
railway servants who were in service on April 1, 1957 or have joined
railway service between that date and the date of issue of the order”.
The Railway servants referred to in para (b) were required to exercise
an unconditional and unambiguous option on the prescribed form on or
before March 31, 1958 electing for the pensionary benefits or retaining
their existing retirement benefits under the State Railway Provident
Fund Rules. It further said that any such employee from whom an
option form prescribed for the employee’s option was not received
within the above time limit or whose option was incomplete or
conditional or ambiguous shall be deemed to have opted for the
pensionary benefits and if any such employee had died by that date or
on or after April 1, 1957 without exercising option for the pensionary
scheme, his dues would be paid on the provident fund system. The
period of validity of this option was first extended up to June 30, 1958,
December 31, 1958, March 31, 1959 and lastly up to September 30,
1959. There could, therefore, be no doubt that those who did not opt for
the pension scheme had ample opportunity to choose between the two.”
41
Reliance was placed by the petitioners before this Court on the decision
in D.S. Nakara vs. Union of India
6
. Paragraphs 16, 29 and 30 of the decision
in Krishena Kumar
5
dealt with the issue as under:-
“16. As the basis or justification for striking or reading down paragraph
3.1 on Nakara
6
ratio, it is urged that all the Railway employees
numbering about 22 lakhs comprising 16,22,000 in service and about 6
lakhs pensioners constitute one family and must be treated as one class
as the government’s obligation to look after the retired Railway
employees both under the pension scheme and the provident fund
scheme being the same, they could not be treated differently. Any
differential treatment will be discriminatory and violative of Article 14
of the Constitution of India. In Nakara cas
6
the date arbitrarily chosen
was struck down and as a result the revised formula for computing
pension was made applicable to all the retired pensioners. The same
principle, it is urged, has to be extended to the Provident Fund retirees
also otherwise there would be discrimination. It is stated that though at
the time of choosing between Provident Fund and Pension Scheme both
the alternatives appeared to be more or less equal and the retired
provident funders took their lump sum yet subsequently stage by stage
the pensioners’ benefits were increased in such ways and to such extent
that it became more and more discriminatory against the provident
funders old and new. It was because of this discrimination that
successive options were given by the Railway Board for the provident
funders to become pensioners. Hence the submission that this limitation
must go, and all the provident funders must be deemed to have become
pensioners subject to the condition that the government contribution
received by them along with interest thereon is refunded or adjusted.
Obviously this gives no importance to the condition in the notifications
that option once exercised shall be final and binding and to the fact that
in each option a cut-off date was there related to the purpose of giving
that option.
*** *** ***
29. The court in Nakara
6
was not satisfied with the explanation that the
legislation had defined the class with clarity and precision and it would
not be the function of this Court to enlarge the class. The court held in
paragraph 65 of the report : (SCC pp. 344-45, para 65)
6
(1983) 1 SCC 305
42
“With the expanding horizons of socio-economic justice, the
Socialist Republic and Welfare State which we endeavour to
set up and largely influenced by the fact that the old men who
retired when emoluments were comparatively low and are
exposed to vagaries of continuously rising prices, the falling
value of the rupee consequent upon inflationary inputs, we
are satisfied that by introducing an arbitrary eligibility
criterion : ‘being in service and retiring subsequent to the
specified date’ for being eligible for the liberalised pension
scheme and thereby dividing a homogeneous class, the
classification being not based on any discernible rational
principle and having been found wholly unrelated to the
objects sought to be achieved by grant of liberalised pension
and the eligibility criteria devised being thoroughly arbitrary,
we are of the view that the eligibility for liberalised pension
scheme of ‘being in service on the specified date and retiring
subsequent to that date’ in impugned memoranda, Exs. P-1
and P-2, violates Article 14 and is unconstitutional and is
struck down. Both the memoranda shall be enforced and
implemented as read down as under : In other words, Ex. P-
1, the words : ‘that in respect of the government servants who
were in service on March 31, 1979 and retiring from service
on or after that date’; and in Ex. P-2, the words : ‘the new
rates of pension are effective from April 1, 1979 and will be
applicable to all service officers who became/become non-
effective on or after that date’ are unconstitutional and are
struck down with this specification that the date mentioned
therein will be relevant as being one from which the
liberalised pension scheme becomes operative to all
pensioners governed by 1972 Rules irrespective of the date
of retirement. Omitting the unconstitutional part it is
declared that all pensioners governed by the 1972 Rules and
Army Pension Regulations shall be entitled to pension as
computed under the liberalised pension scheme from the
specified date, irrespective of the date of retirement. Arrears
of pension prior to the specified date as per fresh
computation is not admissible.”
30. Thus the court treated the pension retirees only as a homogeneous
class. The PF retirees were not in mind. The court also clearly observed
that while so reading down it was not dealing with any fund and there
was no question of the same cake being divided amongst larger number
of the pensioners than would have been under the notification with
respect to the specified date. All the pensioners governed by the 1972
43
Rules were treated as a class because payment of pension was a
continuing obligation on the part of the State till the death of each of
the pensioners and, unlike the case of Contributory Provident Fund,
there was no question of a fund in liberalising pension.”
The distinction between two Schemes was dealt with in Paragraph 32
of the decision as under:-
“32. In Nakara
6
it was never held that both the pension retirees and the
PF retirees formed a homogeneous class and that any further
classification among them would be violative of Article 14. On the
other hand the court clearly observed that it was not dealing with the
problem of a “fund”. The Railway Contributory Provident Fund is by
definition a fund. Besides, the government’s obligation towards an
employee under CPF Scheme to give the matching contribution begins
as soon as his account is opened and ends with his retirement when his
rights qua the government in respect of the Provident Fund is finally
crystallized and thereafter no statutory obligation continues. Whether
there still remained a moral obligation is a different matter. On the other
hand under the Pension Scheme the government’s obligation does not
begin until the employee retires when only it begins and it continues till
the death of the employee. Thus, on the retirement of an employee
government’s legal obligation under the Provident Fund account ends
while under the Pension Scheme it begins. The rules governing the
Provident Fund and its contribution are entirely different from the rules
governing pension. It would not, therefore, be reasonable to argue that
what is applicable to the pension retirees must also equally be
applicable to PF retirees. This being the legal position the rights of each
individual PF retiree finally crystallized on his retirement whereafter no
continuing obligation remained while, on the other hand, as regard
Pension retirees, the obligation continued till their death. The
continuing obligation of the State in respect of pension retirees is
adversely affected by fall in rupee value and rising prices which,
considering the corpus already received by the PF retirees they would
not be so adversely affected ipso facto. It cannot, therefore, be said that
it was the ratio decidendi in Nakara
6
that the State’s obligation towards
its PF retirees must be the same as that towards the pension retirees. An
imaginary definition of obligation to include all the government retirees
in a class was not decided and could not form the basis for any
classification for the purpose of this case. Nakara
6
cannot, therefore, be
an authority for this case.”
44
Having observed that the Pension Scheme and the Provident Fund
Scheme were structurally different, it was then concluded that the retirees in
both categories did not belong to the same class and that there was no
discrimination. The challenge was, therefore, rejected.
19. At this stage we must also consider that in Rajasthan Rajya Vidyut
Vitran Nigam Limited vs. Dwarka Prasad Koolwal and others
7
, a Bench of
two Judges of this Court found that an employee had no inherent right to
demand extension for exercising the switchover option. It was observed:-
“58. When the Pension Regulations and the GPF Scheme are read
together, the necessary conclusion is that an employee must give his
option for either continuing to be a member of the CPF Scheme or to
switch over to the Pension and GPF Scheme. This option had to be
exercised within a period of 90 days from the cut-off date, that is, 28-
11-1988. But RSEB, in its wisdom, chose to extend the time for
exercising the switch-over option over a period of 8 years by giving
several opportunities to the employees through its notices. The right of
an employee to switch over was, therefore, limited in time by the
Pension and GPF Scheme. However, administrative orders issued by
RSEB from time to time extended the period for exercising the option.
No employee had any inherent right to either demand an extension of
the period for exercising the switch-over option or claim a right to
exercise the switch-over option at any time prior to his retirement, and
no such right has been shown to us.”
20. Krishena Kumar
5
was a case where the retirees from two categories
namely Pension Fund and Provident Fund, were taken to be distinct and
different and as such the plea on the ground of discrimination was rejected.
7
(2015) 12 SCC 51
45
As the Judgment of the Division Bench discloses, the matter was considered
by it from the standpoint of discrimination between the same category of
persons, that is to say, those who had opted to be under CPF. The different
groups in the same category were:-
a) Those who had not exercised any option but continued to make
payment of contribution towards CPF (R.K. Virmani batch of
cases).
b) Those who exercised the option to be under CPF but the option
was exercised after the cut-off. Since the option was exercised
after the cut-off, they were deemed to have ‘come over’ to GPF
and were granted benefit (N.C. Bakshi batch of cases).
c) Those who consciously exercised the option to be under CPF;
but taking advantage of further options granted through 11
extensions to switchover, had been allowed to ‘come over’ to
GPF (2469 employees).
21. It was against these three sub categories coming from the same category
of employees that the argument of discrimination was considered by the
Division Bench. Such was not the case in Krishena Kumar
5
or Rajasthan
Rajya Vidyut Vitran
8
.
46
The matter was further considered by the Division Bench in the context
of the employees of educational institutions such as IITs, who are directly
under the Central Government, just as the employees of the University, which
is a Central University. If the option was allowed to be exercised by granting
extension to the employees of the other educational institutions, the Division
Bench did not find any reason why similar choice/option could not be given
to the employees in Shashi Kiran batch of cases.
Additionally, the feature that has been presented through the documents
which have subsequently come on record is that even with respect to the
employees of Insurance Corporations similar options and extensions were
granted.
22. The differential treatment afforded to those 2469 employees as against
the employees in Shashi Kiran batch of cases, was not founded on any
rationale. No justifiable reason was coming forth. If those 2469 employees
could be afforded chance to exercise an option of switchover to GPF, even
though they had consciously opted to be under CPF, on principle of parity or
equality, the case was certainly made out.
47
23. We may now consider the matter from the perspective of financial
impact if the decision of the Division Bench is affirmed.
24. According to the notification dated 01.05.1987, the employees joining
the service after 01.01.1986 would always be under GPF. With respect to
those who were in service on 01.01.1986, said employees would be deemed
to have “come over” to GPF unless an option to continue to be under CPF was
consciously exercised before the cut-off date. Thus, when the Scheme was
framed and was sought to be implemented, the concerned authorities must
have taken into account the entire magnitude such as, the number of
employees and the likelihood of impact on the management of the fund, so
that reasonable returns can be effected by way of pension upon retirement of
such persons. Going by the intent of the notification, those who were to opt
for CPF, were an exception and the general rule was that everybody after
01.01.1986 would normally be covered by GPF. It is in this context that the
number of original petitioners in Shashi Kiran batch of cases has to be seen.
We are concerned with only 75 persons. On the other hand, the bulk of people
namely 2469 employees were granted the choice of reverse switchover and
they were allowed all the benefits under GPF. It can reasonably be said that
when the notification dated 01.05.1987 was issued, the authorities were
conscious of the possibility that all the employees may ‘come over’ to GPF.
48
With that possibility in mind, the fund was constituted and the affairs were
arranged. The shift of those 75 employees would not in any way affect the
strength and the character of the fund if a direction that the entire contribution
made by the authorities be returned with reasonable rate of interest is issued.
These 75 petitioners had approached the Court in the year 2010. At this length
of time, it is not as if any floodgates are going to open and there will be drain
on the resources of the State. A direction can, therefore, be issued, as was
done by the learned Single Judge in paragraph 20 of his Judgment in R.N.
Virmani batch of cases and which aspect was mentioned in the letter dated
23.01.2017 referred to in paragraph 8 hereinabove, for recouping the
contribution under CPF with 8% simple interest per annum.
25. Considering the circumstances on record, in our view, the decision
rendered by the Division Bench of the High Court in Shashi Kiran batch of
cases does not call for any interference except to the extent of direction for
recouping of the contribution under CPF with 8% simple interest per annum.
It is possible that at this length of time, some of the employees in Shashi Kiran
batch of cases may not be interested in switchover to GPF. But an option must
be afforded to them in such manner as the authorities deem appropriate.
49
26. All these appeals are therefore disposed of in aforestated terms, with no
order as to costs.
…………………………………J.
[Uday Umesh Lalit]
…………………………………J.
[Vineet Saran]
New Delhi;
May 10, 2022.
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