- Bookmark
- Share
- CaseIQ
State Of W.B v. Monotosh Roy And Another
Factual and Procedural Background
The first respondent, a member of the West Bengal Higher Judicial Service, retired as Chief Metropolitan Magistrate, Calcutta, in February 1981 while drawing the super-time scale of Rs 2500-2750. His pension was fixed at Rs 1225 per month and retirement gratuity at Rs 30,000, in accordance with the then-applicable West Bengal Service (Death-cum-Retirement Benefits) Rules, 1971, which adopt the All India Services pension rules.
Following the Fourth Central Pay Commission, the Central Government restructured the super-time scale with effect from 1-1-1986 and, by notification dated 22-5-1987, amended the All India Services (Death-cum-Retirement Benefits) Rules, 1958. A separate Office Memorandum dated 16-4-1987 rationalised pensions of those who had retired before 1-1-1986; under it, the respondent’s pension was refixed at Rs 2355 per month.
Contending that pre-1986 retirees should receive the same pension formula as post-1986 retirees, the respondent filed a writ petition in the Calcutta High Court. A Single Judge dismissed the petition. On appeal, a Division Bench directed that his pension be recomputed by adding dearness and other allowances to his basic pay and granting 50 % of that figure from 1-1-1986.
The State of West Bengal appealed to the Supreme Court, challenging the Division Bench order.
Legal Issues Presented
- Whether retirees who left service before 1-1-1986 are entitled to the pensionary benefits granted to officers who retired on or after that date under the amended All India Services Rules.
- Whether the Calcutta High Court Division Bench erred in applying the principle of D.S. Nakara v. Union of India to extend post-1986 pension benefits to the respondent.
- Whether the Office Memorandum dated 16-4-1987, which rationalised but did not equalise pre-1986 pensions, is arbitrary or unconstitutional.
Arguments of the Parties
Appellant (State of West Bengal)
- The Division Bench misunderstood and misapplied Nakara; that judgment does not compel equalisation when benefits are linked to a new pay structure introduced after retirement.
- The respondent falls outside the amended rules of 22-5-1987, which expressly apply only to those in service on 1-1-1986.
- No challenge was raised to the amended rules themselves; the writ petition attacked only the Office Memorandum, so the respondent is not entitled to further relief.
Respondent (Writ Petitioner)
- Claimed that benefits conferred on post-1-1-1986 retirees must be extended to pre-1986 retirees on the equality principle recognised in Nakara.
- Sought pension at Rs 3800 per month, parity with serving IAS officers of equivalent rank, and quashing of the 16-4-1987 Memorandum.
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 | Liberalised pension formula cannot discriminate between classes of pensioners based on a cut-off date when the same calculation method is liberalised. | Distinguished. The Court held that Nakara concerned a mere change in the pension formula, whereas the present case involves benefits linked to a new pay scale applicable only to those in service on 1-1-1986. |
| All India Reserve Bank Retired Officers’ Assn. v. Union of India 1992 Supp (1) SCC 664 | Government may fix a rational cut-off date when introducing a new pension scheme. | Relied on to uphold the legitimacy of limiting post-1986 benefits to those in service on that date. |
| Union of India v. P.N. Menon (1994) 4 SCC 68 | Reiterated the validity of cut-off dates in revising pensionary benefits. | Cited to support the State’s stance that pre-1986 retirees cannot claim post-1986 formulae. |
| State of Rajasthan v. Amrit Lal Gandhi (1997) 2 SCC 342 | Followed P.N. Menon; affirmed reasonableness of cut-off dates in pay and pension revisions. | Applied as additional authority for sustaining differential treatment based on the 1-1-1986 date. |
| State of U.P. v. Jogendra Singh (1998) 1 SCC 449 | Liberalised retiral benefits introduced after an employee’s retirement are not retrospectively available. | Held to “squarely govern” the present facts, confirming that post-retirement enhancements cannot be claimed by earlier retirees. |
| V. Kasturi v. Managing Director, SBI (1998) 8 SCC 30 | Similar principle that subsequent liberalisations do not automatically apply to past retirees. | Cited alongside Jogendra Singh to deny the respondent’s claim. |
Court's Reasoning and Analysis
1. Statutory exclusion of the respondent: The Court noted that the amended All India Services (Death-cum-Retirement Benefits) Rules, 1958, introduced on 22-5-1987, define “revised scales of pay” as those effective from 1-1-1986. Because the respondent retired in February 1981, he does not fall within the amended regime. Rule 18’s note specifies that pre-1986 retirees receive only “additional relief” as sanctioned by the Government.
2. No challenge to the amended rules: The writ petition attacked only the Office Memorandum dated 16-4-1987 and did not assail the validity of the 22-5-1987 amendment. Therefore, relief inconsistent with the unchallenged rules could not be granted.
3. Misapplication of Nakara by the Division Bench: Unlike Nakara, which dealt with a uniform change in the pension formula, the present enhancement is inseparably linked to a new pay structure available only to officers in service on 1-1-1986. The Court held that Nakara does not mandate parity where the underlying pay scales differ.
4. Authority of precedent supporting cut-off dates: Citing All India RBI Retired Officers’ Assn., P.N. Menon, Amrit Lal Gandhi, Jogendra Singh and Kasturi, the Court reaffirmed that government may rationally select a date from which enhanced benefits apply and that retirees prior to that date cannot lawfully demand them.
5. Excess of jurisdiction by the High Court: By directing merger of dearness allowance and other allowances into the respondent’s basic pay and ordering payment of 50 % thereof as pension, the Division Bench effectively rewrote statutory rules, a function reserved to the Government.
Holding and Implications
APPEAL ALLOWED; the judgment of the Division Bench of the Calcutta High Court is set aside, and the Single Judge’s order dismissing the writ petition is restored. No order as to costs.
Implications: The decision reaffirms the legality of fixing cut-off dates when restructuring pay and pension schemes and limits the application of Nakara to situations that do not involve a new pay structure. It does not create new precedent but reinforces existing jurisprudence that enhancements introduced after an employee’s retirement are not automatically retrospective.
M. Srinivasan, J.—The first respondent in this appeal was a member of the West Bengal Higher Judicial Service and retired as Chief Metropolitan Magistrate, Calcutta in February 1981. At that time, he was drawing pay in the super-time scale of Rs 2500-2750 plus admissible allowances. His pension was fixed in accordance with the rules at the maximum rate of Rs 1225 per month. His retirement gratuity was settled at Rs 30,000.
2. According to Rule 91 of the West Bengal Service (Death-cum-Retirement Benefits) Rules, 1971, the rules applicable to members of All India Services shall apply mutatis mutandis to members of the West Bengal Higher Judicial Service. There is no dispute that the first respondent's pension was fixed in accordance therewith.
3. The Indian Administrative Service (Pay) Rules, 1954 was amended on the basis of the recommendation of the Fourth Central Pay Commission as per Government Order dated 13-3-1987. Thereby the previous single super-time selection grade applicable to the Central Government officers in the ranks of Joint Secretaries at Rs 2500-2750 was restructured into three categories:
A. Rs 5900-200-6700,
B. Rs 7300-100-7600,
C. Rs 8000 (fixed) w.e.f 1-1-1986.
Consequential amendment was made in All India Services (Death-cum-Retirement Benefits) Rules, 1958 by a notification dated 22-5-1987 whereby the pension of persons retiring after 1-1-1986 was to be calculated at 50% of the basic pay in the restructured super-time scale with a ceiling on pension at Rs 4500 per month for all categories of pensioners. The benefit of the said amendment was available only to persons retiring after 1-1-1986. Insofar as persons who retired prior to 1-1-1986 are concerned, the Government of India rationalised the pension structure by Office Memorandum No. 2/1/87-PIC-1 dated 16-4-1987 to implement the government decision on the recommendation of the Fourth Central Pay Commission. The above memorandum classified the retirees before 1-1-1986 into A, B and C categories in pari materia with Tables I, II and III of the Fourth Central Pay Commission report and provided dearness reliefs for them at the rate of 95%, 80% and 70% of their existing pensions respectively. In accordance with the said memorandum the first respondent's pension was refixed at Rs 2355 per month.
4. However, the first respondent filed a writ petition in the High Court of Calcutta under Article 226 of the Constitution of India praying for issue of a mandamus to the Union of India and the State Government to withdraw the aforesaid notification dated 16-4-1987, settle and pay the pension to the petitioner at the rate of Rs 3800 per month on a par with the serving officers of his rank in the Indian Administrative Service after deducting the amount drawn already and to pay all the arrears thereof forthwith and for a declaration that the said notification dated 16-4-1987 was illegal, arbitrary, unfair and unconstitutional and as such liable to be struck down and quashed. In addition to the above prayers, the petitioner made several other prayers but it is not necessary for us to refer to them here. Suffice it to point out that the basis of the claim of the petitioner is that the benefits which were conferred on persons who retired after 1-1-1986 should be made available to persons who retired prior to that date.
5. The writ petition was dismissed by a Single Judge of the High Court who held that the principle laid down by this Court in D.S Nakara case (1983) 1 SCC 305 would not apply and the reliance placed by the writ petitioner on the said ruling was misconceived. The Court pointed out that the difference between the pension payable to persons who retired after 1-1-1986 and the pension payable to the persons who retired prior to that date was on account of restructuring the scales of pay and the writ petitioner having retired long prior to the said date when the old scale of pay was prevailing was not entitled to claim the benefit. As against the judgment of the Single Judge, an appeal was filed which was disposed of by a Division Bench. The Bench opined that for the purpose of determining the pensionary benefit to the writ petitioner, the basic pay should also include the dearness relief or interim relief which was granted to such persons in the same manner as it was made applicable in respect of persons who retired after 1-1-1986. The Bench also held that the perquisites which were allowed to “post-1-1-1986” pensioners should also be added to the basic pay of the writ petitioner and thereafter 50% of that amount should be given by way of pension to him w.e.f 1-1-1986. The respondents therein were directed to refix the pension of the writ petitioner in terms of the said order.
6. Aggrieved by the said judgment and order, the State of West Bengal has preferred this appeal.
7. The contention of the appellant is that the impugned judgment of the Division Bench of the High Court is vitiated by a misunderstanding of the rule in Nakara (1983) 1 SCC 305 and the overlooking of the relevant rules applicable to the writ petitioner. Before adverting to the rule in Nakara (1983) 1 SCC 305, we would like to point out that the petitioner does not come within the purview of the relevant rules, as amended by the notification dated 22-5-1987.
8. In exercise of the powers conferred by sub-section (1) of Section 3 of the All India Services Act, 1951 the Central Government issued a notification on 22-5-1987 amending the All India Services (Death-cum-Retirement Benefits) Rules, 1958. The word “emoluments” has been defined thereby to mean the pay that a member of the Service was receiving before his retirement or death, as the case may be. The proviso to the definition clause is to the effect that in the case of a member of the Service retiring from service within ten months of the date of coming over to the revised scales of pay, the emoluments in respect of any period, prior to coming over to the revised scales of pay, shall include the pay other than the special pay in the pre-revised scale, dearness allowance, additional dearness allowance and ad hoc dearness allowance appropriate to pay up to the Cost of Price Index 608 actually drawn during the relevant period and interim relief appropriate to pay actually drawn during the relevant period. The expression “revised scales of pay” has been defined to mean the scales of pay introduced with effect from 1-1-1986. Thus, the definition clauses themselves exclude the petitioner who retired from service in February 1981 long before the revision of scales of pay came into force. Rule 18 provides for the amount of gratuity and pension in the case of a member of the Service who retires from service in accordance with the Rules. The note at the end of the Rule reads that a member of the Service, before 1-1-1986, shall be granted such additional relief in pension, as may be sanctioned by the Central Government. Hence, the provisions of Rule 18 fixing the amount of gratuity or pension will not apply to the writ petitioner.
9. In the writ petition there is no challenge whatever to the provisions of the Rules, as amended by the notification dated 22-5-1987; nor has the writ petitioner chosen to challenge the notification as such. On the other hand the prayers in the writ petition are directed only against the memorandum dated 16-4-1987, as stated already. Consequently, the first respondent is not entitled to any relief whatever in the writ petition and it deserves to be dismissed. This aspect of the matter has been completely ignored by the Division Bench of the High Court. This appeal has to be allowed on that short ground.
10. We have already referred to the fact that the new provisions for payment of pension introduced by the amendment of 1987 were only consequential to the restructuring of the pay scales of the members of the Service. The Division Bench of the High Court has recognised the position that the writ petitioner cannot claim benefit of higher pay scale having retired from service long before the introduction of such pay scales. The Division Bench also pointed it out that the petitioner cannot claim a pension higher than the pay drawn by him. The Division Bench observed:
“We agree with the view of the learned trial Judge that the petitioner cannot claim a pension higher than the pay drawn by him; but at the same time, the value of a rupee 20 years ago and the value of a rupee now cannot be treated to be the same by any logic. The appellant is not entitled to get the benefit of the higher pay scale, but the appellant is entitled to get the benefit of calculation of pension by merging the dearness allowance and other allowances along with the basic pay which has been introduced subsequently.”
11. It is quite obvious that the Division Bench has usurped the functions of the Central Government and thus travelled beyond its jurisdiction.
12. Much reliance is placed on the decision in D.S Nakara v. Union of India (1983) 1 SCC 305. That was a case in which the Central Government liberalised the formula for computation of pension but made it applicable to the government servants who were in service on 31-3-1979 and retired from service on or after the specified date. This Court struck down the said classification and held that the liberalised formula was applicable to all the pensioners whether they retired before or after the specified date. That principle cannot apply in the present case where the pension benefits have been fixed on the basis of the revised pay structure to those members who are in service on 1-1-1986.
13. In All India Reserve Bank Retired Officers' Assn. v. Union of India 1992 Supp (1) SCC 664, (1992) 19 ATC 865 a Bench of this Court distinguished the judgment in Nakara (1983) 1 SCC 305 and pointed out that it is for the Government to fix a cut-off date in the case of introducing a new pension scheme. The Court negatived the claim of the persons who had retired prior to the cut-off date and had collected their retiral benefits from the employer. A similar view was taken in Union of India v. P.N Menon (1994) 4 SCC 68, (1994) 27 ATC 515. In State of Rajasthan v. Amrit Lal Gandhi (1997) 2 SCC 342, JT (1997) 1 SC 421 the ruling in P.N Menon case (1994) 4 SCC 68, (1994) 27 ATC 515 was followed and it was reiterated that in matters of revising the pensionary benefits and even in respect of revision of scales of pay, a cut-off date on some rational or reasonable basis has to be fixed for extending the benefits.
14. In State of U.P v. Jogendra Singh (1998) 1 SCC 449 a Division Bench of this Court held that liberalised provisions introduced after an employee's retirement with regard to retiral benefits cannot be availed of by such an employee. In that case the employee retired voluntarily on 12-4-1976. Later on, the statutory rules were amended by Notification dated 18-11-1976 granting benefit of additional qualifying service in case of voluntary retirement. The Court held that the employee was not entitled to get the benefit of the liberalised provision which came into existence after his retirement. A similar ruling was rendered in V. Kasturi v. Managing Director, State Bank of India (1998) 8 SCC 30, JT (1998) 7 SC 147.
15. The present case will be governed squarely by the last two rulings referred to above. We have no doubt whatever that the first respondent is not entitled to the relief prayed for by him in the writ petition. The Division Bench of the High Court was, therefore, in error in granting a part of the prayer of the first respondent. Hence, this appeal is allowed. The judgment of the Division Bench is set aside and the judgment of the Single Judge of the Calcutta High Court dated 10-7-1992 dismissing Civil Order No. 9993 (W) of 1988 filed by the first respondent herein is restored. There will be no order as to costs.
Alert