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  • Articles 14 and 16 of the Constitution
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  • Articles 14 and 16 of the Constitution
Smart Summary

Factual and Procedural Background

A prior judgment of the Supreme Court dated 15-12-1995 in Welfare Assn. of Absorbed Central Govt. Employees in Public Enterprises v. Union of India ((1996) 2 SCC 187; (1996) 33 ATC 188) held that the petitioners were entitled to restoration of one-third of the commuted pension on the same footing as the petitioners in the Common Cause case ((1987) 1 SCC 142; (1987) 2 ATC 100), and consequently quashed paragraph 4 of the Office Memorandum dated 5-3-1987; the writ petitions were allowed to that extent (no costs).

When the respondents did not give effect to that judgment, the petitioners earlier filed Contempt Petition No. 310 of 1996, which was disposed of on 7-10-1996 after the respondents stated compliance was in process. Thereafter, the petitioners filed the present contempt petition alleging that the respondents restored only one-third of the commuted pension “literally” but denied other attendant benefits available to Central Government pensioners, including (as stated) pension revision.

Legal Issues Presented

  1. Whether the respondents’ implementation of the 15-12-1995 judgment was required to include not only restoration of one-third commuted pension but also all attendant benefits available to Central Government pensioners.
  2. Whether the respondents’ manner of implementation (and their position as to limiting benefits) amounted to contempt of court.

Arguments of the Parties

Respondents’ Arguments

  • The learned Additional Solicitor General attempted to reopen the contention that the petitioners could not be treated on a par with Central Government pensioners, despite that contention having been raised and negatived in the earlier judgment.
  • Relying on paragraph 15 of an additional affidavit (Respondents 1 to 3), it was stated that PSU absorbees had drawn a lump-sum capitalised value for the two-thirds portion of pension as a one-time settlement; since that two-thirds portion was surrendered and no longer available “in the nature of pension,” absorbed employees were not entitled to dearness relief on that two-thirds commuted portion (terminal benefits).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Welfare Assn. of Absorbed Central Govt. Employees in Public Enterprises v. Union of India (1996) 2 SCC 187, (1996) 33 ATC 188 Distinction under Rule 37-A between (i) one-third pension commutable without conditions and (ii) two-thirds commuted as terminal benefits with surrender condition; denial of restoration of one-third commuted pension to PSU absorbees (when granted in Common Cause) violates Articles 14 and 16; para 4 of OM dated 5-3-1987 quashed to that extent. Used as the controlling judgment whose directions had to be implemented “in letter and spirit,” and as the basis to reject the respondents’ attempt to deny parity with Central Government pensioners.
Common Cause (1987) 1 SCC 142, (1987) 2 ATC 100 Basis for restoration of one-third of commuted pension. The Court reiterated that the reasoning supporting restoration in Common Cause applied to these petitioners for the one-third portion, and that attendant benefits tied to such restoration had to follow as for Central Government pensioners.

Court's Reasoning and Analysis

The Court noted that, after the earlier contempt proceedings were disposed of on the respondents’ statement that compliance was in process, the respondents implemented the 15-12-1995 judgment by restoring only one-third of the commuted pension and denying attendant benefits available to other Central Government pensioners.

The Court rejected the attempt by the learned Additional Solicitor General to reopen the parity issue, observing that the contention had been raised and negatived in the 15-12-1995 judgment, and reaffirmed that the petitioners had to be treated on a par with Central Government pensioners.

Interpreting its earlier direction to restore one-third commuted pension, the Court clarified that it was intended to be implemented “in letter and spirit,” meaning that restoration must be accompanied by attendant benefits available to Central Government pensioners. The Court specifically noted that Central Government pensioners are given revision in pension, which (as stated) had not been given to the petitioners on the ground that only restoration had been ordered.

On contempt, the Court held that there was “some genuine doubt” on the part of the respondents in construing and giving effect to the judgment; therefore, it found that there was no contempt. Nonetheless, it directed compliance with the judgment as clarified, within three months.

Holding and Implications

NO CONTEMPT; CONTEMPT PETITION DISPOSED OF WITH DIRECTIONS.

The respondents were directed to restore not only the one-third pension as ordered in the 15-12-1995 judgment but also “all the attendant benefits as given to the Central Government pensioners,” and to comply within three months from the date of this order. The Court disposed of the contempt petition on the basis that the respondents’ non-compliance arose from a genuine doubt in construing the earlier judgment, and it did not indicate that it was laying down any new precedent beyond clarifying implementation of its prior directions.

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    Welfare Association Of Absorbed Central Govt. Employees In Public Enterprises And Another v. Arvind Verma And Others

    K. Venkataswami, J.— This Court in a judgment dated 15-12-1995 in Welfare Assn. of Absorbed Central Govt. Employees in Public Enterprises v. Union of India (1996) 2 SCC 187, (1996) 33 ATC 188 inter alia, held as follows:( & 194, paras 9 & 15)

    “9. From the above extracts, it will be seen that a clear-cut distinction is made in Rule 37-A itself between one-third portion of pension to be commuted without any condition attached and two-thirds portion of pension to be received as terminal benefits with condition attached with it. It follows that so far as commutation of one-third of the pension is concerned, the petitioners herein as well as petitioners in ‘Common Cause’ case (1987) 1 SCC 142, (1987) 2 ATC 100 stand on similar footing with no difference. So far as the balance of two-thirds pension is concerned, the petitioners herein have received the commuted value (terminal benefits) on condition of their surrendering of their right of drawing two-thirds of their pension. This was not the case with the petitioners in ‘Common Cause’ case (1987) 1 SCC 142, (1987) 2 ATC 100. That being the position the denial of benefit given to ‘Common Cause’ (1987) 1 SCC 142, (1987) 2 ATC 100 petitioners to the present petitioners violates Articles 14 and 16 of the Constitution. The reasoning for restoring one-third commuted pension in the case of ‘Common Cause’ (1987) 1 SCC 142, (1987) 2 ATC 100 petitioners equally applies to the restoration of one-third commuted pension in the case of these petitioners as well.

    15. For the foregoing reasons, we hold that the petitioners are entitled to the benefits as given by this Court in ‘Common Cause’ case (1987) 1 SCC 142, (1987) 2 ATC 100 so far as it related to restoration of one-third of the commuted pension. Consequently, the impugned para 4 of Office Memorandum dated 5-3-1987 is quashed. The writ petitions are accordingly allowed to the extent indicated above. No costs.”

    2. As the respondents did not give effect to the judgment, the petitioners, on an earlier occasion, moved this Court in Contempt Petition No. 310 of 1996, which was disposed of by this Court on 7-10-1996 by passing the following order:

    “The counter has been filed wherein it has been stated that the directions of this Court are in the process of being complied with.

    The contempt petition is disposed of.”

    3. Thereafter, it appears that the respondents construing the judgment of this Court literally restored one-third of the commuted pension and denied all other attendant benefits as made available to the other Central Government pensioners. Aggrieved by that, the petitioners have moved this Court once again by filing this contempt petition.

    4. Shri Altaf Ahmad, learned Additional Solicitor General, once again attempted to reopen the issue that the petitioners cannot be treated on a par with the Central Government pensioners even though such a contention was raised and negatived by this Court in the said judgment. For the reasons already stated in the judgment, we hold that the petitioners have to be treated on a par with the Central Government pensioners. When we directed the respondents to restore the one-third portion of the commuted pension, it was intended to be given effect to in letter and spirit, which means that the restoration of pension must be with attendant benefits as given to the Central Government pensioners. The learned Additional Solicitor General brought to our notice the statement in para 15 of the additional affidavit on behalf of Respondents 1 to 3, which reads as follows:

    “In the case of PSU absorbees, they have drawn lump sum capitalised value for the 2/3rds portion of pension as one-time settlement. This portion is, therefore, no longer available to the absorbed employees in the nature of pension and according to the Supreme Court judgment dated 15-12-1995, the petitioners have received the commuted value (terminal benefits) on the condition of their surrendering their rights of drawing 2/3rds of the pension. In view of this, the absorbed employees are not entitled to the grant of dearness relief on this 2/3rds commuted portion of pension (terminal benefits).”

    5. It will be noticed that the Central Government pensioners are given revision in the pension, which was not given to the petitioners on the ground that this Court had ordered only restoration of pension.

    6. After hearing counsel on both sides, we make it clear that the respondents are liable to restore not only the pension as ordered by this Court in the said judgment but also all the attendant benefits as given to the Central Government pensioners. We hold that there was some genuine doubt on the part of the respondents in construing and giving effect to the judgment of this Court and, therefore, there is no contempt. We now direct the respondents to comply with the judgment of this Court as explained hereinbefore within three months from this date.

    7. The contempt petition will stand disposed of accordingly.

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    Welfare Association ... v. Arvind Verma And Others
    (May 1, 1998)