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K.L Rathee v. Union Of India And Others
Factual and Procedural Background
The petitioner retired from Government service on 1 May 1968 as Secretary, Industrial Licensing Policy Inquiry Committee and Joint Secretary to the Government of India in the Ministry of Industrial Development and Company Affairs. He initially received pension in accordance with the rules then in force.
On 25 May 1979 the Government of India issued a Liberalised Pension Formula that (a) shifted the basis of pension calculation from the average emoluments of the last 36 months to the last 10 months, (b) introduced a slab system, and (c) increased the pension ceiling to Rs 1,500 per month. The benefits, however, were confined to employees retiring on or after 31 March 1979.
In D.S. Nakara v. Union of India (1983) the Supreme Court invalidated this cut-off date and ruled that the revised method of computation must extend to all pensioners governed by the Central Civil Services (Pension) Rules, 1972 (“CCS Rules”), irrespective of their date of retirement. Pursuant to that judgment, the Government on 22 October 1983 extended the liberalised formula to all such pensioners.
Subsequent governmental clarifications stated that only the specific liberalisations mentioned in the 22 October 1983 order were to be given to earlier retirees; in all other respects, the rules prevailing on the date of retirement would continue to apply. The petitioner nonetheless sought recalculation of his pension so that he would receive the same quantum as officers of his rank who retired after 1 April 1979, irrespective of the actual emoluments he drew during his final ten months of service. He filed the present writ petition before the Supreme Court to obtain that relief.
Legal Issues Presented
- Whether, on the strength of D.S. Nakara v. Union of India, a pre-1979 retiree is entitled to have his pension recomputed so as to equal the pension payable to post-1979 retirees of the same rank, even though his last-drawn emoluments were lower.
Arguments of the Parties
Petitioner's Arguments
- The principle laid down in Nakara forbids any classification among pensioners based on the date of retirement; therefore, all retirees of the same rank form a single class for pension purposes.
- Consequently, the petitioner must receive the higher pension payable to officers who retired on or after 1 April 1979, without regard to the emoluments he actually received during his service.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| D.S. Nakara v. Union of India, (1983) 1 SCC 305 | Prohibits classification of pensioners solely by date of retirement; mandates uniform method of pension computation. | Distinguished: Court held that Nakara ensures a common formula (last 10 months’ average), but does not equalise the underlying emoluments for all retirees. |
| Indian Ex-Services League v. Union of India, (1991) 2 SCC 104 | Clarified that Nakara has limited reach and does not mandate “one rank, one pension.” | Relied upon to reject the petitioner’s plea for identical quantum of pension irrespective of reckonable emoluments. |
| Krishena Kumar v. Union of India, (1990) 4 SCC 207 | Held that Nakara cannot be extended to provident-fund benefits; emphasised its confined scope. | Cited to illustrate consistent judicial recognition of the narrow ambit of Nakara. |
| Union of India v. All India Services Pensioners’ Association, (1988) 2 SCC 580 | Held that Nakara principles do not apply to gratuity computations. | Referenced to show that equalisation of pension quantum was specifically rejected in analogous contexts. |
Court's Reasoning and Analysis
The Court noted that Nakara addressed only the mode of calculating pension—substituting a 10-month average for a 36-month average and introducing a slab system—and struck down the cut-off date that restricted this improved method to post-1979 retirees. The judgment did not alter the definition of “emoluments.” Consequently, while all pensioners are now entitled to have their pension computed on the basis of the last ten months’ emoluments, the actual figures used must be the emoluments that each employee actually drew.
Rule 5(1) of the CCS Rules expressly provides that a pension claim is governed by the rules in force on the employee’s date of retirement. Therefore, although the computation formula must be uniform, the underlying data (the employee’s own pay during the last ten months) remain variable and fact-specific. Accepting the petitioner’s contention would require deeming his past emoluments to be the same as those of later retirees, an extension explicitly rejected by Constitution-Bench decisions in Indian Ex-Services League and All India Services Pensioners’ Association. The Court concluded that Nakara does not support a demand for equal quantum of pension where reckonable emoluments differ.
Holding and Implications
Writ Petition Dismissed. The Court denied the petitioner’s request for recomputation of pension and made no order as to costs.
Implications: The decision reaffirms that Nakara guarantees only uniformity in the method of pension computation, not equality in the amount of pension. It maintains the principle that reckonable emoluments remain those actually earned by each employee, thereby limiting the scope for future claims seeking parity of pension quantum across different retirement dates.
C. Sen, J.— On 1-5-1968 the petitioner retired from government service as Secretary, Industrial Licensing Policy Inquiry Committee and Joint Secretary to the Government of India in the Ministry of Industrial Development and Company Affairs, New Delhi. The petitioner got pension and other retirement benefits according to the government rules in force at that time. On 25-5-1979 the Government of India introduced Liberalised Pension Formula. The main feature of this Formula was that it introduced revised method of calculation of pension based on slab system and raised monthly pension to Rs 1500 per month. The benefit of the Liberalised Pension Formula, 1979 was made available only to those government servants who retired on or after 31-3-1979. A writ petition was filed in this Court challenging the fixation of the cut-off date of 31-3-1979 for payment of liberalised pension. It was claimed that irrespective of the date of retirement the benefit of the Liberalised Pension Formula must be made available to all the pensioners. This Court upheld the contention of the petitioner and held that all the pensioners governed by the 1972 Rules will be governed by this liberalised scheme of pension irrespective of the date of their retirement. In that case, D.S Nakara v. Union of India (1983) 1 SCC 305, (1983) 2 SCR 165, it was argued on behalf of the petitioners that all petitioners entitled to receive pension under the relevant rules formed a class irrespective of the date of their retirement. There could not be a mini classification within this class. The classification based on retirement before or subsequent to the specified date was invalid. The scheme of liberalisation in computation of pension must be uniformly enforced with regard to all pensioners.
2. On the basis of the judgment of this Court on 22-10-1983 the Government issued orders extending the benefit of the judgment to all pensioners covered by the CCS (Pension) Rules as well as Liberalised Pension Rules, 1950.
3. After promulgation of the Order dated 22-10-1983 doubts arose regarding the extent of the benefit of various liberalisations made from time to time in Pension Rules. It was clarified by the Government that only the benefit of this liberalisation should be allowed to all pensioners as had been mentioned in the Government Orders dated 22-10-1983. In all other respects the rules prevalent on the date of retirement of the pensioners, will apply.
4. According to the clarification issued by the Ministry of Finance, the revised pension is to be computed on the average emoluments drawn during the last 10 months of service. This rule will apply to all the pensioners. However, the definition of emoluments as in force at the time of the retirement of an employee has not undergone any change. The case of the petitioner is that following Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 he has to be given the same amount of pension as other employees of his rank irrespective of the date of retirement.
5. The case of the petitioner is that the judgment in Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 leaves no room for doubt that there should be no discrimination among the persons getting pension from the Government. There cannot be any classification among the retired government employees on the basis of date of retirement. Therefore, they must be given higher pension on the same basis as it was being given to persons who have retired after 1-4-1979.
6. We are unable to uphold this contention. Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 dealt with the manner of calculation of pension on the basis of average emoluments of a retired government employee. Prior to the liberalisation of the formula for computation of pension made by the memorandum dated 25-5-1979, average emoluments of the last thirty months of service of the employee provided that basis for calculation of pension. The 1979 memorandum provided that average emoluments must be calculated on the basis of the emoluments received by a government servant during the last ten months of the service. That apart, a new slab system for computation of pension was introduced and the ceiling on pension was raised. As a result of these changes, the pensioners who retired prior to the specified date suffered triple jeopardy, viz., lower average emoluments, absence of slab system and the lower ceiling. This Court struck down the provision including the memorandum which provided that:
“the new rates of pension are effective from 1st April, 1979 and will be applicable to all service officers who became/become non-effective on or after that date.”
The Court further held:
“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.”
7. It is to be seen that the judgment did not strike down the definition of “emoluments”. It merely held that if pension was to be calculated on the basis of the last ten months' emoluments of a government servant, after 1-4-1979, there is no reason why those who have retired before 1-4-1979 should get pension calculated on the basis of average of last thirty-six months' emoluments. In other words, the rule of computation must be the same. The Court did not hold that those who have retired before 1-4-1979 must be treated as having the same emoluments as those who retired on or after 1-4-1979 for the purpose of calculation of pension. Therefore, on the strength of Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165, the petitioner is not entitled to ask for computation of pension with reference to emoluments which he never got. Rule 5(1) of CCS (Pension) Rules, 1972 provides:
“5. (1) Any claim to pension or family pension shall be regulated by the provisions of these rules in force at the time when a government servant retires or is retired or is discharged or is allowed to resign from service or dies, as the case may be.”
8. The average of the last ten months' emoluments must form the basis for calculation of pension. That means those who were actually drawing larger emoluments in the last ten months of their service will get larger amounts of pension. Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 does not lay down that the same amount of pension must be paid to all persons retiring from government service irrespective of the date of retirement. The contention of the petitioner that there is only one class of government employees for the purpose of calculation of pension cannot be disputed. The Constitution Bench in Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 has clearly laid down that there cannot be any mini classification of government servants for calculating the amount of pension payable. That means the same method should be adopted for calculating pension for all government servants. But the question is what should be the quantum of pension payable to a government servant? Even if pension is calculated on the basis of the same formula the basis of calculation has to be the average of the last ten months' emoluments. This principle of adopting last ten months' emoluments as the basis for calculating of pension must be uniformly applied to all persons drawing pension from the Central Government. This was all that was laid down in Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165. It, however, did not lay down that the quantum of emoluments drawn during the last ten months of service of each government employee must be taken to be the same for this purpose.
9. This aspect of the question was examined in the case of Indian Ex-Services League v. Union of India (1991) 2 SCC 104, (1991) 16 ATC 488, (1991) 1 SCR 158. The case was argued on behalf of Armed Forces personnel retiring from commissioned ranks as well as Armed Forces personnel retiring from below the commissioned rank who were represented by Shri K.L Rathee, J.S Verma, J. (as His Lordship then was) speaking for the Constitution Bench which heard the matter observed that the contention of the writ petitioners on the basis of Nakara (1983) 1 SCC 305, (1983) 2 SCR 165 decision was untenable. On behalf of the petitioners, it had been contended that all retirees who held the same ranks irrespective of their date of retirement must be given the same amount of pension. In effect, what was urged was that there must be “one rank one pension” for all the retirees irrespective of their date of retirement. This contention of the petitioners was rejected by the Constitution Bench by holding that Nakara (1983) 1 SCC 305, (1983) 2 SCR 165 decision was of limited application. There was no scope for enlarging the ambit of that decision to cover all claims made by the petitioners for identical amount of pension to every retired person from the same rank irrespective of the date of retirement, even though the reckonable emoluments for the purpose of computation of pension were different.
10. In fact, the principle laid down in the case of Indian Ex-Services League (1991) 2 SCC 104, (1991) 16 ATC 488, (1991) 1 SCR 158 negates the case of the petitioner in the instant case. Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 does not lay down that the last ten months' emoluments must be deemed to be the same for all the employees at the time of their retirement. The emoluments have to be calculated according to the government rules in force at the time of retirement of the employees. But, if the principle of average of last ten months' emoluments has been adopted for some employees, then that principle must be extended to all the employees who have retired before them. Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 did not lay down that the reckonable emoluments for the purpose of calculation of pension must be the same for a person occupying the same post.
11. It is also to be noted that in the case of Krishena Kumar v. Union of India (1990) 4 SCC 207, (1990) 14 ATC 846, AIR 1990 SC 1782, another Constitution Bench examined the question whether on the strength of Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165, the petitioners were entitled to the same Provident Fund benefits as were given to those who retired subsequent to 31-3-1979. It was argued on behalf of the petitioner that State's obligation towards pensioners was the same as that towards persons who were to be paid Provident Fund benefits. This Court held that that was not the ratio of Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165. On retirement of an employee, legal obligation under the Provident Fund account ended on payment of the Provident Fund dues of the employee. The Rules governing Provident Fund and contribution to such Fund were entirely different from the rules governing pension.
12. It was also held in the case of Union of India v. All India Services Pensioners' Assn. (1988) 2 SCC 580, (1988) 7 ATC 449, AIR 1988 SC 501 that the principles laid down in Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 could not be extended to the case of payment of gratuity.
13. It clearly appears from all these cases that Nakara case (1983) 1 SCC 305, (1983) 2 SCR 165 is not a case of universal application irrespective of the facts and circumstances of the case. When the Government decided that pension was to be calculated on the basis of average salary drawn over a period of last ten months, it was held in Nakara (1983) 1 SCC 305, (1983) 2 SCR 165 that this principle has to be applied even to those persons who had retired before the notified date. That, however, does not mean that the emoluments of the persons who were retiring after the notified date and those who have retired before the notified date holding the same status must be treated to be the same. This argument was specifically negatived by the Constitution Bench in the case of All India Services Pensioners' Assn. (1988) 2 SCC 580, (1988) 7 ATC 449, AIR 1988 SC 501 What the petitioner is claiming in this case is more or less the same relief as was denied to him in the above case.
14. In view of the aforesaid, this writ petition must fail and is dismissed with no order as to costs.
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