1996 JTR(SC) 1983
1992 AIR(SC) 2218 ; 1997 75 FLR 76 ; 1996 10 JT 637 ; 1997 2 LLJ 678 ; 1997 1 RSJ 224 ; 1996 8 Scale 574 ; 1997 1 SCC 514 ; 1992 SCC(Cri) 55 ; 1997 SCC(L&S) 555 ; 1996 Supp9 SCR 151 ; 1996 3 SLR 795 ; 1997 KHC 1315 ; 1997 1 Supreme 49
1997(1) Supreme 49
SUPREME COURT OF INDIA
K. Ramaswamy and G.B. Pattanaik, JJ.
Union of India & Ors. -Appellants
versus
D.R.R. Sastri -Respondent
Civil Appeal No. 14752 of 1996
(Arising out of SLP (C) No. 14785 of 1995)
Decided on 22-11-1996
Act
Referred
:CONSTITUTION OF INDIA : Art.14
SERVICE LAW : .
(A) The relevant provisions of the Service Law, read in conjunction with the constitutional mandate under Article 14 of the Constitution of India, govern the right of a serving employee to opt for a liberalised pension scheme. The statutory framework ensures that an employee serving on the date the option was issued retains the right to exercise such option even if subsequently absorbed elsewhere, provided the communication of the option was due to reach them and was not effectively brought to their notice, thereby protecting the employee from procedural default.
(B) Key legal principles include the duty of the administration to communicate options to retiring employees, the preservation of statutory benefits for eligible serving employees, and the prevention of arbitrary discrimination in the grant of similar reliefs. The case underscores that an option intended for serving employees remains valid even after absorption, and any denial must be justified by clear material differences.
Facts of the case:
The respondent joined Indian Railways in 1950 and was later deputed to Heavy Engineering Corporation in 1972. While in Railways, the respondent opted for the Contributory Provident Fund Scheme. In 1974, a liberalised Pension Scheme was introduced for serving railway employees, and the respondent, being in service at the time, was entitled to opt for it. However, the relevant Railway Board communication dated 23rd July, 1974, was not brought to the respondents notice. The respondent was absorbed by Heavy Engineering Corporation and resigned from Railways in 1973. In 1993, the respondent sought to exercise the option, which was initially rejected. The Central Administrative Tribunal directed that the respondent be allowed to opt for the pension scheme on refund of amounts received, a direction challenged by the Union of India.
Findings of Court:
The Tribunal found that the respondent, being in service on 1st January 1973, was entitled to the option under the 1974 circular. The Tribunal noted that the communication failed to reach the respondent, preventing him from exercising the option, and observed that another employee had been granted a similar benefit after the expiry of the option period, indicating no unjustified discrimination. The Union of India failed to provide material justifying the differential treatment between the respondent and the employee granted relief in 1994.
Issues:
Whether an employee who was in service at the time of the introduction of a liberalised pension scheme but not informed of the option due to administrative lapse is entitled to exercise such option after absorption into another organisation, and whether the grant of similar relief to another employee after the expiry of the option period warrants like treatment.
Ratio Decidendi:
The Court held that the respondent was entitled to the pension option as of the date of the circular because he was in service at that time and the failure to communicate the option to him prevented him from availing it. The absence of any material distinguishing the respondents case from that of another employee who was granted relief establishes no justification for denial, warranting interference to set aside the impugned order.
Result:
The appeal is dismissed, allowing the respondent to exercise the option for the pension scheme, with pension calculated as of 31st July 1972, subject to compliance with necessary formalities, and without an order as to costs.
(A) The relevant provisions of the Service Law, read in conjunction with the constitutional mandate under Article 14 of the Constitution of India, govern the right of a serving employee to opt for a liberalised pension scheme. The statutory framework ensures that an employee serving on the date the option was issued retains the right to exercise such option even if subsequently absorbed elsewhere, provided the communication of the option was due to reach them and was not effectively brought to their notice, thereby protecting the employee from procedural default.
(B) Key legal principles include the duty of the administration to communicate options to retiring employees, the preservation of statutory benefits for eligible serving employees, and the prevention of arbitrary discrimination in the grant of similar reliefs. The case underscores that an option intended for serving employees remains valid even after absorption, and any denial must be justified by clear material differences.
Facts of the case:
The respondent joined Indian Railways in 1950 and was later deputed to Heavy Engineering Corporation in 1972. While in Railways, the respondent opted for the Contributory Provident Fund Scheme. In 1974, a liberalised Pension Scheme was introduced for serving railway employees, and the respondent, being in service at the time, was entitled to opt for it. However, the relevant Railway Board communication dated 23rd July, 1974, was not brought to the respondents notice. The respondent was absorbed by Heavy Engineering Corporation and resigned from Railways in 1973. In 1993, the respondent sought to exercise the option, which was initially rejected. The Central Administrative Tribunal directed that the respondent be allowed to opt for the pension scheme on refund of amounts received, a direction challenged by the Union of India.
Findings of Court:
The Tribunal found that the respondent, being in service on 1st January 1973, was entitled to the option under the 1974 circular. The Tribunal noted that the communication failed to reach the respondent, preventing him from exercising the option, and observed that another employee had been granted a similar benefit after the expiry of the option period, indicating no unjustified discrimination. The Union of India failed to provide material justifying the differential treatment between the respondent and the employee granted relief in 1994.
Issues:
Whether an employee who was in service at the time of the introduction of a liberalised pension scheme but not informed of the option due to administrative lapse is entitled to exercise such option after absorption into another organisation, and whether the grant of similar relief to another employee after the expiry of the option period warrants like treatment.
Ratio Decidendi:
The Court held that the respondent was entitled to the pension option as of the date of the circular because he was in service at that time and the failure to communicate the option to him prevented him from availing it. The absence of any material distinguishing the respondents case from that of another employee who was granted relief establishes no justification for denial, warranting interference to set aside the impugned order.
Result:
The appeal is dismissed, allowing the respondent to exercise the option for the pension scheme, with pension calculated as of 31st July 1972, subject to compliance with necessary formalities, and without an order as to costs.
JUDGMENT
Pattanaik, J.-Leave granted.
2. This appeal by special leave is directed against the order of the Central Administrative Tribunal, Madras dated 23rd September, 1994 in OA No. 1711 of 1993. By the impugned order the Tribunal has directed the appellant to allow the respondent the benefit of option for the pension scheme, on respondent refunding the amount he has received on his retirement.
3. The admitted facts are that the respondent joined the Indian Railways in the year 1950 and while continuing there went on deputation to the Heavy Engineering Corporation during the year 1972. While he was in the railway he had opted for Contributory Provident Fund Scheme. The said respondent exercised his option for permanent absorption in Heavy Engineering Corporation and submitted his resignation from the railways which was accepted by Railway Board and communicated by letter dated 26th June, 1973. In the year 1974 on the basis of recommendations of the Third Pay Commission, liberalised Pension Scheme was introduced and the Railway Board in its letter dated 22nd July, 1974 decided to give an opportunity to all the persons governed by the Provident Fund Scheme to opt for the liberalised Pension Scheme. The Railway Board s letter was communicated to all the General Managers with the direction that it shall be brought to the notice of all retired railway servants. The case of the respondent is that the liberalised Pension Scheme having been introduced at a point of time when he was an employee under the railways, he was entitled to opt for the said scheme. But the aforesaid letter of the Railway Board was not brought to his notice. It is only on 12th June, 1993 the said respondent made a representation requesting the Railway Board that he may be allowed to exercise the option and the Railway Board having rejected the same by its communication dated 13th July, 1993, respondent approached the Tribunal. The Tribunal by the impugned order came to the conclusion that the respondent being in service of the railways on 1st January, 1973 was entitled to exercise option for coming over to the pension scheme in terms of Railway Board s letter 23rd July, 1974. The Tribunal further came to the conclusion that notwithstanding the clear statement in the Board s letter that it should be brought to the notice of all the retirees, it had not been brought to the notice of the respondent no account of which he was prevented from exercising his option. The Tribunal also took note of the fact that another railway employee was allowed to exercise the option long after the date of exercising of option has expirted and, therefore, there should be no ground to discriminate the respondent. Challenging the aforesaid direction of the Tribunal the Union of India has come in appeal.
4. Mr. Mahajan appearing for the appellant contended that the respondent having not exercised his option to opt for the pension scheme within the time specified in the Board s letter dated 23rd July, 1974 the Tribunal erred in law granting him the relief in question. The learned counsel, however, was not in a position to indicate any special reason why the similar opportunity had been given to another railway employee which has been noticed by the Tribunal while granting the relief to the respondent. Mr. Mahajan, however, contended that in view of the Constitution Bench s decision of the Court in Krishan Kumar s case (1990(4) SCC 207) the impugned direction of the Tribunal cannot be sustained. When this case listed before this Court on 6th May, 1995, it was brought to the notice of the Court that the Government itself has granted a similar benefit to one K.V. Kasthuri by an order dated September 19, 1994 even though he had retired in the year 1973. The Court, therefore, called upon the Union Government to place the necessary material which enabled the Government to grant the relief to Shri Kasthuri and how his case stands on a different footing than the case of the respondent. But no further affidavit was filed by the Union of India nor any material was placed to indicate any distinguishing feature for granting the relief to Shri K.V. Kasthuri and refusing the same to the respondent. Be that as it may when the matter was again argued on 20th August, 1996, it was contended on behalf of the appellant that the respondent having resigned from the railways and having been absorbed by the Heavy Engineering Corporation would be entitled to the benefits available to him under the Heavy Engineering Corporation and the Counsel for the appellant also contended that the Heavy Engineering Corporation has already determined the pension of the respondent by taking into account the entire period of service from 1952. In view of the aforesaid submissions of the learned counsel appearing for the appellant the Court had called upon the railway administration to indicate whether the period of service rendered by the respondent from 1950 till July 22, 1972 under the railways was taken into account by the Heavy Engineering Corporation in fixing his pension on his retirement from the service of Heavy Engineering Corporation and whether the proportionality of the period of service from 1950 to July 31, 1972 and from August 1, 1972 till the retirement are separated to compute the pension and if so computed whether the respondent would stand to gain any higher pension than is being actually drawn. But unfortunately no further affidavit or material was placed by the appellant. On the other hand the respondent has filed an affidavit stating therein that he has not received any pension on his retirement from the Heavy Engineering Corporation as the Corporation itself had no pensionable scheme. In the aforesaid premises and in the absence of any explanation from the appellant to indicate any special feature for granting similar relief as late as in the year 1994 to Shri K.V. Kasthuri, we see no justification for our interference with the impugned direction of the Tribunal. The respondent had served for about 22 years and he should not be deprived of the pensionary benefit when the Government itself had come forward with the liberalised Pension Scheme and gave option to the persons already retired to come over to the pension scheme. But his pension is to be calculated as on July 31, 1972 in accordance with the Railway Board s letter dated 23rd of July, 1974 and on compliance with all the necessary formalities by the respondent in accordance with the said circular. Subject to the aforesaid observations this appeal is dismissed but in the circumstance there will be no order as to costs.
Appeal dismissed.
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