Majithia, J.:— This bunch of writ petitions (Civil Writ Petitions Nos. 1499 and 2864 of 1983, 4125, 4908, 1530, 2319 and 4216 of 1984, 1039, 5141, 41, 3678, 4072, 4712, 4720, 4721, 5584 of 1985 and 1171 of 1987) will be disposed of by a common judgment.
2. We have referred to the facts as given in Civil Writ Petition No. 2864 of 1983.
3. The factual matrix has little relevance to the issues raised and canvassed at the hearing. However, a brief resume of the facts is necessary to appreciate the points urged.
4. The petitioner joined as a beldar on 1 August 1951, as a work-charged employee in the office of the Sub-Divisional Officer, Pathankot. He had a regular service, without any break, from the date of joining the service till the date of his superannuation — 3 October 1977.
5. After his superannuation, the petitioner represented to the respondents for grant of pensionary benefits for the reasons that he had served the department regularly and the post against which he was appointed was a regular post. Even in the industrial award, dated 1 June 1972 (between the workmen and the Chief Engineer, PWD (B & R), Establishment Branch, Punjab, Patiala), which was published in the Government Gazette, dated 14 July 1972, it was held by the Tribunal that the work-charged employees were entitled to be confirmed after five years of service. Therefore, the petitioner contends that he would be deemed to have been confirmed in the year 1956. Respondent 1 vide its letter No. 1177B & R(4)-73, dated 6 February 1973, accorded sanction to the regularisation of all those employees of PWD (Irrigation Branch) working in work-charged establishment with effect from 15 August 1972, who had put in ten years' or more service on that date. The petitioner averred that respondent 1 has deprived him of the pensionary benefits on the strength of rule 3.17 and rule 1.2 or rule 1.4(iii) of the Punjab Civil Service Rules, Vol. 11. The petitioner was a Government servant and was paid from the Government revenue and Government funds, and could not be excluded from the purview of Punjab Civil Service Rules in relation to pension. It is pleaded that the action is totally arbitrary and violative of Art. 14 of the Constitution of India, as the said rule is discriminatory.
6. The respondents, in their return, substantially admitted all the factual pleas of the petitioner. It was, inter alia, pleaded that the petitioner's qualifying service for pension and gratuity starts from 15 August 1972, i.e, the date from which he is brought on the regular cadre. He did not have a regular service for ten years on the date of his superannuation, i.e, 31 October 1977, thus was not entitled to pensionary benefits. The service in the work-charged establishments does not count for pension under rule 3.17(ii) of the Punjab Civil Service Rules, Vol. II.
7. The writ petition came up for hearing before Gokal Chand Mital, J. The learned Judge opined that the question whether the benefit of pension and gratuity can be allowed to the work-charged employees only from the date they stand regularised in service or after taking notice of the whole of the service, i.e, from the date of joining as a work-charged employee is a matter of importance and has to be judged on the test of “equality” provisions under Art. 14 of the Constitution. A prayer was made to my Lord, the Chief Justice, for constitution of a larger Bench.
8. The matter was subsequently placed for hearing before Gokal Chand Mital and J.V Gupta, JJ. The Division Bench was of the prima facie opinion that the rules regarding the work-charged employees had remained in force for more than half a century and there was no direct decision of any Court on the point, and the decision on the point may have far reaching implications. It observed that the matter be decided by a Full Bench as the decision would bind the State of Punjab, Haryana and the Union Territory of Chandigarh. It is in this manner that the matter had been placed before us.
9. What is pension? Is it a right to property or a bounty? The question came up for consideration before this Court in Bhagwant Singh… v. Union Of India…. [A.I.R 1962 Pun. 503]. It was held that such a right constitutes “property” and any interference will be a breach of Art. 31(1) of the Constitution. The decision given by the learned Single Judge was approved by the Letters Patent Bench in Union of India v. Bhagwant Singh [I.L.R 1965 (2) Pun. 1]. The Letters Patent Bench held that the pension granted to a public servant on his retirement is “property” within the meaning of Art. 31(1) of Constitution and he could not be deprived of the same, save by authority of law.
10. This matter again came up for hearing before a Full Bench of this Court in K.R Erry v. State of Punjab [A.I.R 1967 Pun. 279]. The majority quoted with approval the principle laid down in the earlier two decisions of the Court referred to above and held that the pension is not to be treated as a bounty payable on the sweet will and pleasure of the Government and that the right of superannuation pension, including its amount, is a valuable right vesting in a Government servant. The Full Bench decision was approved by their Lordships of the Supreme Court in Deokinandan Prasad v. State of Bihar [(1971) 2 SCC 330 : A.I.R 1971 S.C 1409], with the following observations:
“We are of the opinion that the right of the petitioner to receive pension is property under Art. 31(1) and by a mere executive order the State had no power to withhold the same. Similarly, the said claim is also property under Art. 19(1)(f) and it is not saved by Sub-Art. (5) of Art. 19. Therefore, it follows that the order, dated 12 June 1968, denying the petitioner right to receive pension affects the fundamental right of the petitioner under Arts. 19(1)(f) and 31(1) of the Constitution, and as such the writ petition under Art; 32 is maintainable.”
11. This view was reaffirmed in State of Punjab v. Iqbal Singh [(1976) 2 SCC 1 : A.I.R 1976 S.C 667], where their Lordships of the Supreme Court where pleased to observe as under:
“It has been urged by the appellant that the Full Bench decision of the High Court of Punjab and Haryana in K.R Erry case [A.I.R 1967 Pun. 279] (vide supra), is not in accordance with law as superannuation pension is a bounty and is given only as an act of grace. That ground is no longer available to the appellants in view of the decision of this Court in Deokinandan Prasad v. State of Bihar [(1971) 2 SCC 330 : A.I.R 1971 S.C 1409] (vide supra), where it was held that pension is not a bounty payable on the sweet will and pleasure of the Government and the right of a Government servant to receive it is property under Art. 31(1) of the Constitution and the State cannot withhold the same by a mere executive order. It was further held in that case that the claim to pension was also property under Art. 19(1)(f) of the Constitution and was not saved by Cl. (v) thereof.”
In view of this, the pension is a right to property and a Government servant cannot be deprived of this right, save by legislation which, too, has to satisfy the test of Art. 14 of the Constitution.
12. The principal submission raised by the learned counsel relates to the constitutional validity of rule 3.17(H) of Punjab Civil Service Rules, Vol. II (hereinafter called the rules) which is in the following terms:
“If an employee was holding substantively a permanent post on the date of his retirement, his temporary or officiating service under the State Government, followed without interruption by confirmation in the same or another post, shall count in full as qualifying service except in respect of:
(i) periods of temporary or officiating service in non-pensionable establishment;
(ii) periods of service in work-charged establishment; and
(iii) …”
rule 1.4 of the Punjab Civil Service Rules, Vol. I, may be noticed.
“1.4 These rules shall not apply to—
(i) any Government employee between whom and the Government, a specific contract or agreement subsists in respect of any matter dealt with herein to the extent up to which specific provision is made in the contract or agreement (See rule 1.3 above);
(ii) any person for whose appointment and conditions of service special provision is made by order under any law for the time being in force; and
(iii) any Government employee or class of Government employees to whom the competent authority may, by general or special order, direct that they shall not apply in whole or in part. One of such classes of Government employees is that employed only occasionally or which is subject to discharge at one month's notice or less. A list of such Government employees is given in appendix 2.
Note: Different types of model forms of agreement for use in the case of Government employees engaged on contract are given in Form Pb. C.S.R No. 1.”
13. The principle underlying the guarantee of Art. 14 of the Constitution is that all persons similarly circumstanced shall be treated alike, both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject-matter of the legislation their position is substantially the same.
14. In the earliest stages of evolution of the Constitution Law, Art. 14 came to be identified with the doctrine of “classification” because the view taken was that Art. 14 forbids discrimination and there will be no discrimination where classification making the differentia fulfils two conditions, viz.:
(i) that the classification is founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group; and
(ii) that differentia has a rational relation to the objects sought to be achieved by the statute in question:
See Ram Krishna Dalmia v. Mr. Justice S.R Tendolkar* [A.I.R 1958 S.C 538]; their Lorships of the Supreme Court observed as under:
“The classification may be founded on differential basis according to objects sought to be achieved but what is implicit in it is that there ought to be nexus, i.e causal connection between the basis of classification and object of the statute under consideration. It is equally well settled by the decisions of this Court that Art. 14 condemns discrimination not only by a substantive law but also by a law of procedure.”
15. However, a new dimension was given to Art. 14 by the Supreme Court in E.P Royappa v. State of Tamil Nadu [(1974) 4 SCC 3 : A.I.R 1974 S.C 555]. In that case, the petitioner, an I.A.S Officer, challenged the order of his transfer on several grounds, including the violation of Art. 14. It was pointed out for the first time that Art. 14 embodies guarantee againt arbitrariness. Their Lordships were pleased to observe as under:
“From a positive point of view, equality is antithetic to arbitrariness. In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Art. 14, and if it affects any matter relating to public employment, it is also violative of Art. 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment.”
16. The legislation has not only to pass the above test but it must also pass the test that it is not arbitrary. In Smt. Maneka Gandhi v. Union of India [(1978) 1 SCC 248 : A.I.R 1978 S.C 597], their Lordships of the Supreme Court were pleased to observe as under:
“… what is the content and reach of the great equalising principle enunciated in this article? There can be no doubt that it is a founding faith of the Constitution. It is indeed the pillar on which rests squarely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or lexicographic approach. No attempt should be made to truncate its all embracing scope and meaning, for, to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits…
Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Art. 14 like a brooding omnipresence.”
17. In re: Special Courts Bill case [(1979) 1 SCC 380 : A.I.R 1979 S.C 478] (vide supra), their Lordships of the Supreme Court restated the following four principles in these terms:
“The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact of scientific exclusion or inclusion of persons or things. The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is Justified if it is not palpably arbitrary.
The principle underlying the guarantee of Art. 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same remedies should be made available to them irrespective of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject-matter of the legislation their position is substantially the same.
The law can make and set apart the classes according to the needs and exigencies of the society and as suggested by experience, it can recognise even a degree of evil, but the classification should never be arbitrary, artificial or evasive.
The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely,
(1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others, and
(2) that differentia must have a rational relation to the object sought to be achieved by the Act.”
18. This proposition was affirmed and explained by the Constitution Bench of the Supreme Court in Ajay Hasia v. Khalid Mujib Sehravardi [1981-II L.L.N 613], with the following observations in Para. 16, at page 625:
“…That it must, therefore, now be taken to be well settled that what Art. 14 strikes at is arbitrariness because an action that is arbitrary, must necessarily involve negation of equality. The Court made it explicit that where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law, and is, therefore, violative of Art. 14.”
The same principle was reiterated in Nakara (D.S) v. Union of India [1983-I L.L.N 289], with the following observations made by their Lordships of the Supreme Court in Para. 16, at pages 296 and 297:
“As a corollary to this well-established proposition, the next question is, on whom the burden lies to affirmatively establish the rational principle on which the classification is founded correlated to the object sought to be achieved? The trust of Art 14 is that the citizen is entitled to equality before law and equal protection of laws. In the very nature of things the society being composed of unequals a welfare State will have to strive by both executive and legislative action to help the less fortunate in society to ameliorate their condition so that the social and economic inequality in the society may be bridged. This would necessitate a legislation applicable to a group of citizens otherwise unequal and amelioration of whose lot is the object of State affirmative action. In the absence of doctrine of classification such legislation is likely to flounder on the bedrock of equality enshrined in Art. 14. The Court realistically appraising the social stratification and economic inequality and keeping in view the guidelines on which the State action must move as constitutionally laid down in Part IV of the Constitution, evolved the doctrine of classification. The doctrine was evolved to sustain a legislation or State action designed to help weaker sections of the society or some such segments of the society in need of succour. Legislative and executive action may accordingly be sustained if it satisfies the twin tests of reasonable classification and the rational principle correlated to the object sought to be achieved. The State, therefore, would have to affirmatively satisfy the Court that the twin tests have been satisfied. It can only be satisfied if the State establishes not only the rational principle on which classification is founded but correlates it to the objects sought to be achieved. This approach is noticed in Ramana Dayaram Shetty v. International Airport Authority of India [1981-I L.L.N 270], when the Court observed that a discriminatory action cf the Government is liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.”
19. In the light of the above, let us examine the validity of rule 3.17(ii) of the Punjab Civil Sevice Rules, Vol. II. This rule says that the period of service in a work-charged establishment shall not be taken into account in calculating the qualifying service. After the services of a work-charged employee have been regularised he becomes a public servant. The service is under the Government and is paid by it. This is what was precisely stated in the industrial award, dated 1 June 1972, between the workmen and the Chief Engineer, P.W.D (B. & R.), Establishment Branch, Punjab, Patiala, which was published in the Government Gazette, dated 14 July 1972. Even otherwise, the matter was settled by the Punjab Government Memo No. 14095-BRI (3)-72/53, dated 6 February 1973 (annexure P7) where it was stated that all those work-charged employees who had put in ten years of service or more as on 15 August 1972, their services would be deemed to have been regularised. Once the services of a work-charged employee have been regularised, there appears to be hardly any logic to deprive him of the pensionary benefits as are available to other public servants under rule 3.17 of the rules. Equal protection of laws must mean the protection of equal laws for all persons similarly situated. Article 14 strikes at arbitrariness because a provision which is arbitrary involves the negation of equality. Even the temporary or officiating service under the State Government has to be reckoned for determining the qualifying service. It looks to be illogical that the period of service spent by an employee in a work-charged establishment before his regularisation has not been taken into consideration for determining his qualifying service. The classification which is sought to be made among Government servants who are eligible for pension and those who started as work-charged employees and their services regularised subsequently, and the other is not based on any intelligible criteria and therefore, is not sustainable at law. After the services of a work-charged employee have been regularised, he is a public servant like any other servant. To deprive him of the pension is not only unjust and inequitable but is hit by the vice of arbitrariness, and for these reasons the provisions of sub-rule (ii) of rule 3.17 of the rules have to be struck down being violative of Art. 14 of the Constitution.
20. In relaxation of rule 3.17(ii) of rules by the respondent-authorities, the service of sixteen work-charged employees was counted for pensionary benefits and gratuity vide Government of Punjab, Department of Irrigation and Power (Irrigation Branch) Memo No. 2/5/81-IB(6)/16411, dated 7 November 1982 (annexure P2), which reads as under:
“Sanction of the Government of Punjab is accorded in relaxation of rule 3.17 of Punjab Civil Service Rules, Vol. II, for counting of previous work-charged service towards gratuity in respect of 16 work-charged employees of Nangal Workshop mentioned in the enclosed statement subject to the conditions that no terminal benefit is/has been given to these work-charged employees at the time of regularisation of their service.
Sanction of the Governor of Punjab is also accorded to the counting of service of these 16 work-charged employees towards pension as a special case provided no benefit has already been drawn by them in lieu of pensionary benefits.”
If respondent 1 has granted exemption from rules in certain cases, we do not find any justifiable reasons for excluding others from the grant of pension and gratuity benefits. For this reason too, we find rule 3.17(ii) is bad at law, as it enables the Government to discriminate between employees similarly situated.
21. In fairness to Sri Bedi, the learned Additional Advocate-General, the submission made by him may be adverted to. It was contended that—
(i) a work-charged employee is engaged for a particular purpose upon completion of which his services come to an end;
(ii) no order has been passed by the State Government confirming the petitioner against the post on which his services are regularised and resultantly he does not fulfil the conditions entitling a Government servant for pension, as envisaged by rule 3.12 of the rules.
The counsel also tried to justify the Government action by placing reliance on rule 1.4 of the Punjab Civil Service Rules, Vol. 1. It was further contended that P.W.D (B. & R.) Establishment Branch is not an industry and in support of this submission her relied on State of Punjab v. Sh. Kuldip Singh [1983-I L.L.N 576] and Om Parkash v. Executive Engineer, S.Y.L Canal Division VII [1984-II L.L.N 934].
22. His first submission is devoid of any merit. In Para. 3 of the petition, it is specifically averred that the petitioner had regular service, without any break of a single day, right from 1951 to the date of his superannuation in the year 1977. In the corresponding paragraph of the written statement, this assertion has not been denied but the only plea taken is that his qualifying service for pension and gratuity starts from 15 August 1972, i.e, the day from which he was brought on regular cadre; and that his service in the work-charged establishment does not count for pension under rule 3.17(ii) of the rules. The plea that he has been in continuous service has not been denied. It appears that on the completion of one project, the petitioners were engaged in another project, either with break in service or without any break. Every plea raised in a petition has to be specifically denied and in the absence of specific denial, the assertions made in the petition will normally be deemed to have been admitted or at least the Court can proceed on the basis that it is an uncontroverted fact. Since there is no denial by the respondents that the petitioner has been in continuous service since 1951, it would be presumed that he has been in continuous service till the date of superannuation. The second contention that no order has been passed by the State Government confirming the petitioner against the post on which his services were regularised, and so on, is also without merit. The regularisation of services must be against a particular post, and the petitioner will be deemed to have been made permanent on the post against which his services have been regularised. This precisely appears to be the purport of the Punjab Government Memo (annexure P7), and the award of the Industrial tribunal, dated 1 June 1972, published in the Government Gazette, dated 14 July 1972, referred to earlier. In the award, it was specifically held that the work-charged employees who had put in three years of continuous service are entitled to be made permanent and to be confirmed after having put in five years' service as demanded by the workmen. The award may bind the workmen and the management of the P.W.D (B. & R.) Establishment Branch. Technically speaking it may not be binding on other branches of the P.W.D Once the services of a work-charged employee are regularised, he will be deemed to be entitled to the benefit under rule 3.17 of the rules.
23. The third submission that the Government action was justified in view of rule 1.4 of the Punjab Civil Services Rules, Vol. I, deserves to be rejected simply on the ground that this rule has not the remotest application to the facts of the present case. The learned counsel is not correct is saying that there is a specific contract or an agreement in the instant case, excluding the applicability of the Punjab Civil Services Rules, and more particularly, in the light of the fact that the services of the petitioner were regularised, and he would be deemed to have become a member of the service under the Government.
24. The last submission of the learned Additional Advocate-General that the P.W.D (B. & R.) Establishment Branch is not an industry is not substainable in law. This question does not arise. However, the ruling relied upon by him, viz., Kuldip Singh case [1983-I L.L.N 576] (vide supra), and Om Parkash case [1984-I L.L.N 934] (vide supra), were expressly overruled in Des Raj v. State of Punjab [1988-II L.L.N 1]. Their Lordships of the Supreme Court were pleased to hold as under, in Para. 1???, at page 3:
“… The main functions of the Irrigation Department when subjected to the dominant nature test clearly come within the ambit of industry. We have not been able to gather as to why even six years after the amendment has been brought to the definition of industry in S. 2(j) of the Act the same has not been brought into force. This Court on more than one occasion, has indicated that the position should be clarified by an appropriate amendment and when keeping in view the opinion of this Court, the law was sought to be amended, It is appropriate that the same should be brought into force as such or with such further alterations as may be considered necessary, and the legislative view of the matter is made known and the confusion in the field is cleared up.”
25. Before we conclude we must observe that this judgment will be confined only to pension and gratuity.
26. In view of the foregoing discussion, the petitions are allowed, with no order as to costs.