Delhi High Court
Priyanka Jain vs Punjab National Bank And Anr on 17 July, 2025
Author: C.Hari Shankar
Bench: C. Hari Shankar
$~72
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 11178/2023 & CM APPL. 43441/2023
PRIYANKA JAIN .....Petitioner
Through: Dr. L.S Chaudhary with
Dr. Ajay Chaudhary, Mr. Bharat Chaudhary,
Ms. Vinita, Monika, Mr. Anirudh Sharma
and Mr. Vishesh Kumar, Advs.
versus
PUNJAB NATIONAL BANK AND ANR .....Respondents
Through: Mr. Rajat Arora, Mr. Niraj
Kumar and Mr. Sourabh Mahala, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE AJAY DIGPAUL
JUDGMENT (ORAL)
% 17.07.2025
C.HARI SHANKAR, J.
The lis
1. This writ petition assails the constitutional validity of
Regulation 2(o)(c) of the Punjab National Bank (Employees) Pension
Regulations, 19951, “so far as it restricts the benefit of family pension
to a deceased employee’s daughter, on completing the age of 25
years”. The provision reads thus:
“2. Definitions:
1 “the Pension Regulations”, hereinafter
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In these regulations, unless the context otherwise requires :-
*****
(o) “family” in relation to an employee means :-
*****
c) son or daughter including widow or divorced
daughter till he or she attains the age of twenty five
years or up to his or her marriage or re-marriage,
whichever is earlier including such son or daughter
adopted legally.
2. Regulation 2(o)(c) is only a definition clause. It merely defines
expressions used in the Pension Regulations. While, classically, a
definition clause has no independent substantive operational
existence, and becomes meaningful only when it is employed to
understand the expression as it occurs in one or the other provision as
contained in that statutory, or quasi-statutory instrument, nonetheless,
if the definition of an expression, as contained in the definition clause,
is itself invidiously discriminatory in nature, so as to violate Articles
14 or 16 of the Constitution of India, it renders itself vulnerable to
challenge.
3. The grievance of the petitioner stems from the exclusion, in
Regulation 2(o)(c) of the Pension Regulations, of unmarried daughters
above the age of 25 from the definition of “family” for the purposes of
applicability of the Regulations. Thus, the consequence of the
impugned clause is that, while an unmarried daughter of a deceased
employee of the Bank would be entitled to the benefit of the Pension
Regulations and, consequently, to family pension thereunder, she
becomes disentitled to family pension if she is over the age of 25,
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even if she is unmarried and otherwise satisfies the criteria stipulated
for entitlement to family pension. Age, and age alone, excludes her.
This, according to the petitioner, is completely unconstitutional, and
cannot be allowed to remain on the statute book.
4. In its counter affidavit, the Bank, while otherwise seeking to
support the validity of the impugned Regulation 2(o)(c), also refers to
Regulation 40(1)(b) of the Pension Regulations, which, to the extent it
is relevant, reads as under:
“40. Period of payment of family pension
1) The period for which family pension is payable
shall be, –
*****
b) this in the case of a son or daughter
(including widowed/divorced) till she attains the
age of twenty-five years or up to the age of his/her
marriage/remarriage, whichever is earlier:
Provided the family pension payable to
sons/daughters (including widowed/divorced) shall
be discontinued/not admissible when the eligible
son/daughter starts earning a sum in excess of ₹
2550/- per month from employment in
Government/private sector/self-employment etc:
Provided further that if the son or daughter
of an employee is suffering from any disorder or
disability of mind or is physically crippled or
disabled so as to render him or her unable to earn a
living even after attaining the age of 25 years, the
family pension shall be payable to such son or
daughter for life subject to the following conditions,
namely,
(i) If such son or daughter is one among
2 or more children of the employee, the
family pension shall initially be payable toW.P.(C) 11178/2023
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the minor children in the order set out in
clause (e) of sub- regulation (1) until the last
minor child attains the age of 25 years and
thereafter the family pension shall be
resumed in favour of the son or daughter
suffering from disorder or disability of mind
or who is physically crippled or disabled and
shall be payable to him or her for life;
(ii) If there are more than 1 such
children suffering from disorder or disability
of mind or who are physically crippled or
disabled, the family pension shall be paid in
the order of their birth and the younger of
them will get the family pension only after
the elder above him or her ceases to be
eligible:
Provided that where the family
pension is payable to such twin
children it shall be paid in the
manner set out in clause (f) of sub-
regulation (1); …”
5. The nub of the controversy, quite simply, therefore, is whether
the exclusion of unmarried daughters from entitlement to family
pension, consequent on the death of her father, as envisaged by
Regulation 40(1)(b), as well as Regulation 2(o)(c) of the Pension
Regulations, is constitutionally sustainable.
6. We, therefore, have examined this aspect of constitutionality
both in respect of Regulation 2(o)(c), as well as Regulation 40(1)(b),
of the Pension Regulations. We have not restricted our determination
to Regulation 2(o)(c), as Regulation 40(1)(b) is the substantive avatar
of Regulation 2(o)(c), and is being cited as a defence to the challenge
to the validity of Regulation 2(o)(c).
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Rival Submissions and Analysis
7. We have heard Mr. L.S. Chaudhary for the petitioner and Mr.
Rajat Arora for the Bank, at length.
8. Reliance by the Bank on the second proviso to Regulation
40(1)(b)
8.1 The Bank, in its counter-affidavit, has sought to emphasise the
fact that the proscription on grant of family pension is not absolute,
but stands relaxed, by the second proviso to Regulation 40(1)(b), in a
case in which the unmarried daughter suffers from any disorder or
disability of mind, or is physically crippled or disabled so as to render
her unable to earn a living. In such cases, submits the Bank, the
unmarried daughter, even after attaining the age of 25, would be
eligible for family pension subject to satisfaction of the conditions
envisaged in the proviso.
8.2 The argument is obviously unsustainable. The relaxation
granted to unmarried daughters suffering from the conditions
envisaged by the second proviso to Regulation 40(1)(b) cannot, quite
obviously, be cited as a defence to the challenge, by the petitioner, to
the exclusion of unmarried daughters above the age of 25 from family
pension, except where they suffer from the conditions envisaged in
the proviso.
8.3 Family pension, like pension itself, is not a charity. It is a
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recognition for years of service rendered by the employee. It is,
additionally, a means for the family of the deceased employee to tide
over the financial distress in which it finds itself. If the employee,
otherwise entitled to pension, dies, leaving his family in the lurch,
family pension is intended to extend, to the surviving family of the
employee, the pensionary benefits to which the employee would have
been entitled, had he been alive. The entitlement of the family of the
employee to family pension, therefore, does not stand on a pedestal
lower than the entitlement of the employee himself to pension.
8.4 As such, the mere relaxation, envisaged in the second proviso
to Regulation 40(1)(b) of the Pension Regulations, to the rigour of the
main Regulation 40(1)(b), is no defence to the challenge to the
validity of Regulation 40(1)(b) itself.
8.5 The reliance, by Mr. Arora, on the second proviso to Regulation
40(1)(b) is, therefore, obviously misguided.
9. On merits
9.1 It is practically fossilised in the law that a challenge to the
constitutional validity of statutory or quasi-statutory enactment,
predicated on Article 14 or 16 of the Constitution of India, has to be
tested by ascertaining whether the provision results in an invidious
discrimination between persons or classes of persons between or
among whom there is no intelligible differentia or, if there is an
intelligible differentia, the differentia has no rational nexus with the
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object of the concerned statutory or quasi-statutory instrument.
10. Clearly, the impugned Regulation 40(1)(b) of the PNB
Regulations creates a distinction between unmarried daughters of
deceased employees of the Bank who are below the age of 25 years
and unmarried daughters of the employees of the Bank who are above
the age of 25 years. It results in the cleavage of an otherwise
homogenous class of unmarried daughters of a deceased Bank
employee into two categories – daughters below 25 and daughters
above 25.
11. The Court has, therefore, to examine whether this distinction
constitutes an intelligible differentia, which has a rational nexus to the
object of the provision.
12. As Mr. Rajat Arora, learned Counsel for the respondent,
correctly submits, the object of family pension is to provide succour to
the survivors of a deceased employee – in the present case, of the
Bank.
13. We have queried of Mr. Arora as to how, if that is the object of
family pension, there can be a distinction between unmarried
daughters who are below the age of 25 years and unmarried daughters
who are above the age of 25 years. Is it that unmarried daughters
below the age of 25 years are in need of succour whereas unmarried
daughters above the age of 25 years are not? Or is one category more
in need of succour than the other?
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14. Mr. Arora’s submission is that there is a general belief that, by
the time an unmarried daughter reaches the age of 25 years, she would
have started earning her own livelihood or would have the capacity to
stand on her own legs and attain self-sufficiency. He also submits that
family pension is intended for persons who are not dependent on
others and that this is also a governing consideration which has
weighed with the framers of the Regulations in fixing the age of 25
years.
15. Let us examine the contention.
16. J.S. Rukmani v. Govt of Tamil Nadu
16.1 A bench of three learned Judges of the Supreme Court, in J.S.
Rukmani v Government of Tamil Nadu2, was seized with the issue of
whether family pension would be denied to the petitioner J.S.
Rukmani3 before the Supreme Court on the ground that her late
husband was, at the time of his retirement, serving in Cannanore,
which did not form part of the state of Tamil Nadu at the time of grant
of family pension to her. Rukmani, being a lady without means,
directly petitioned the Supreme Court under Article 32 of the
Constitution of India. The Supreme Court issued notices to the States
of Tamil Nadu and Kerala. Both states were represented. While the
entitlement of Rukmani to family pension was not disputed, the states
joined issue on the state on which the liability to pay the said pension
would fall.
2 1984 Supp SCC 650
3 “Rukmani” hereinafter
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16.2 The Supreme Court observed that, as the Kerala Pension Rules
applied only to government servants who retired on or after 1 April
1964, Rukmani could not claim family pension from the state of
Kerala. The contention of the state of Tamil Nadu that the liability to
pay family pension to Rukmani could not devolve on it as, by the time
she became entitled to family pension, Cannanore, by virtue of the
States Reorganisation Act which was enacted in the interregnum, was
no longer in the state of Tamil Nadu, was found unsustainable in law.
Though this is not the precise issue which arises for consideration
before us, the following observations of the Supreme Court, as
contained in para 9 of the report, are of relevance:
“… Only ground on which the State of Tamil Nadu sought to
exclude the petitioners from the benefit of the family pension was
that their respective husbands served at the time of their
superannuation at places which as a result of the States
Reorganisation Act, 1956 were no more in the State of Tamil Nadu
but became parts of other successor States. We do not think any
such limitation can be read in the notification dated May 26, 1979.
It is true that by reason of the subsequent government order dated
March 18, 1982 issued by the State of Tamil Nadu clarifying the
notification dated May 26, 1979 the petitioners would be excluded
from the benefit of the family pension since the places where their
respective husbands were serving at the time of superannuation
became part of States other than the State of Tamil Nadu. But the
learned counsel appearing on behalf of the petitioners challenged
the constitutional validity of the government order dated March 18,
1982 and contended that the place where a government servant was
serving at the time of superannuation has no rational nexus with
the object of granting family pennon under the notification dated
May 26, 1979 and that the government order dated March 18, 1982
is therefore discriminatory and void. This contention is, in our
opinion, well founded and must be accepted. The object of
granting family pension under the notification dated May 26, 1979
is obviously to alleviate the economic distress of widows and other
members of the family of government servants who retired after
faithfully serving the State of Madras as also the successor State of
Tamil Nadu and who subsequently died leaving widows and otherW.P.(C) 11178/2023
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members of the family. Now admittedly the widow of a government
servant who was in employment of the former State of Madras and
who retired before the reorganisation of the States would be
entitled to family pension under the notification dated May 26,
1979 if the place where her husband was serving at the time of
superannuation was situate in the territories of the successor, State
of Tamil Nadu. If that be so, then it is difficult to see how the
widow of a government servant who served the former State of
Madras in the same manner and who retired before the
reorganisation of the States should not be entitled to family
pension under the notification dated May 26, 1979 merely because
the place where her husband was serving at the date of
superannuation subsequently came to form part of the territories of
a State other than the State of Tamil Nadu as a result of the
reorganisation of the States. The object of the notification dated
May 26, 1979 does not warrant any such distinction to be made
between the widows of one class of government servants and the
widows of another class merely on the basis of the place where the
government servant last served at the time of superannuation,
although in both cases the government servant served the same
State, namely, the former State of Madras and superannuated
before the reorganisation of the States. We are therefore of the
view that the restrictive limitation imposed by the government
order dated March 18, 1982 confining the benefit of family pension
to the members of the family of only those government servants
who last served at a place falling within the territories of the
successor State of Tamil Nadu must be held to be violative of
Article 14 of the Constitution and hence unconstitutional and
void.”
(Emphasis supplied)
17.1 The linking of the entitlement of pension to a particular date
immediately brings to mind the classic judgment of the Supreme
Court, rendered by a Constitution Bench, in D.S. Nakara v UOI4. In
that case, the Supreme Court was concerned with executive
instructions which made entitlement to pension dependent on whether
the concerned government servant retired on or after 1 April 1979.
4 (1983) 1 SCC 305
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The instructions restricted the entitlement to pension to government
servants who retired on or after the said date. The constitutionality of
the provision was challenged before the Supreme Court. The
following passages, from the judgment of the Supreme Court, are
illuminating:
“2. Do pensioners entitled to receive superannuation or
retiring pension under Central Civil Services (Pension) Rules,
1972 (“1972 Rules”, for short) form a class as a whole? Is the
date of retirement a relevant consideration for eligibility when a
revised formula for computation of pension is ushered in and made
effective from a specified date? Would differential treatment to
pensioners related to the date of retirement qua the revised
formula for computation of pension attract Article 14 of the
Constitution and the element of discrimination liable to be
declared unconstitutional as being violative of Article 14? These
and the related questions debated in this group of petitions call for
an answer in the backdrop of a welfare State and bearing in mind
that pension is a socio-economic justice measure providing relief
when advancing age gradually but irrevocably impairs capacity to
stand on one’s own feet.
*****
8. Primary contention is that the pensioners of the Central
Government form a class for purpose of pensionary benefits and
there could not be mini-classification within the class designated as
pensioners. The expression “pensioner” is generally understood in
contradistinction to the one in service. Government servants in
service, in other words, those who have not retired, are entitled to
salary and other allowances. Those who retire and are designated
as “pensioners” are entitled to receive pension under the relevant
rules. Therefore, this would clearly indicate that those who render
service and retire on superannuation or any other mode of
retirement and are in receipt of pension are comprehended in the
expression “pensioners”.
9. Is this class of pensioners further divisible for the purpose
of “entitlement” and “payment” of pension into those who retired
by certain date and those who retired after that date? If date of
retirement can be accepted as a valid criterion for classification,
on retirement each individual government servant would form a
class by himself because the date of retirement of each is
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correlated to his birth date and on attaining a certain age he had
to retire. It is only after the recommendations of the Third Central
Pay Commission were accepted by the Government of India that
the retirement dates have been specified to be 12 in number being
last day of each month in which the birth date of the individual
government servant happens to fall. In other words, all
government servants who retire correlated to birth date on
attaining the age of superannuation in a given month shall not
retire on that date but shall retire on the last day of the month.
Now, if date of retirement is a valid criterion for classification,
those who retire at the end of every month shall form a class by
themselves. This is too microscopic a classification to be upheld
for any valid purpose. Is it permissible or is it violative of Article
14?
10. The scope, content and meaning of Article 14 of the
Constitution has been the subject-matter of intensive examination
by this Court in a catena of decisions. It would, therefore, be
merely adding to the length of this judgment to recapitulate all
those decisions and it is better to avoid that exercise save and
except referring to the latest decision on the subject in Maneka
Gandhi v Union of India5 from which the following observation
may be extracted:
“[W]hat 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 securely 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 Article 14
like a brooding omnipresence….”
11. The decisions clearly lay down that though Article 14
forbids class legislation, it does not forbid reasonable classification
for the purpose of legislation. In order, however, to pass the test of
permissible classification, two conditions must be fulfilled viz. (i)
5 (1978) 1 SCC 248
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that the classification must be 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 that
differentia must have a rational relation to the objects sought to be
achieved by the statute in question (see Ram Krishna Dalmia v
Justice S.R. Tendolkar6). 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 a 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 Article 14 condemns discrimination not
only by a substantive law but also by a law of procedure.
12. After an exhaustive review of almost all decisions bearing
on the question of Article 14, this Court speaking through
Chandrachud, C.J. in In re Special Courts Bill, 19787 restated the
settled propositions which emerged from the judgments of this
Court undoubtedly insofar as they were relevant to the decision on
the points arising for consideration in that matter. Four of them are
apt and relevant for the present purpose and may be extracted.
They are:
“* * *
(3) 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 or
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.
(4) The principle underlying the guarantee of Article 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.
6 AIR 1958 SC 538
7 (1979) 1 SCC 380
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*****
(6) 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 degree of
evil, but the classification should never be arbitrary,
artificial or evasive.
(7) 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 that differentia must have a rational
relation to the object sought to be achieved by the Act.
* * *”
13. The other facet of Article 14 which must be remembered is
that it eschews arbitrariness in any form. Article 14 has, therefore,
not to be held identical with the doctrine of classification. As was
noticed in Maneka Gandhi case in the earliest stages of evolution
of the constitutional law, Article 14 came to be identified with the
doctrine of classification because the view taken was that Article
14 forbids discrimination and there will be no discrimination
where the classification making the differentia fulfils the
aforementioned two conditions. However, in E.P. Royappa v State
of T.N.8 it was held that the basic principle which informs both
Article 14 and 16 is equality and inhibition against discrimination.
This Court further observed as under:
“From a positivistic 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 Article 14, and if it affects any
matter relating to public employment, it is also violative of
Article 16. Articles 14 and 16 strike at arbitrariness in State
action and ensure fairness and equality of treatment.”
8 (1974) 4 SCC 3
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14. Justice Iyer has in his inimitable style dissected Article 14
in Maneka Gandhi as under:
“That article has a pervasive processual potency and
versatile quality, egalitarian in its soul and allergic to
discriminatory diktats. Equality is the antithesis of
arbitrariness and ex cathedra ipse dixit is the ally of
demagogic authoritarianism. Only knight-errants of
‘executive excesses’ — if we may use current cliche — can
fall in love with the Dame of despotism, legislative or
administrative. If this Court gives in here it gives up the
ghost. And so it is that I insist on the dynamics of
limitations on fundamental freedoms as implying the rule
of law: Be you ever so high, the law is above you.”
Affirming and explaining this view, the Constitution Bench in Ajay
Hasia v Khalid Mujib Sehravardi9 held that it must, therefore,
now be taken to be well settled that what Article 14 strikes at is
arbitrariness because any 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 Article 14. After a review of large number of decisions bearing
on the subject, in Air India v Nergesh Meerza10 the Court
formulated propositions emerging from an analysis and
examination of earlier decisions. One such proposition held well
established is that Article 14 is certainly attracted where equals are
treated differently without any reasonable basis.
15. Thus the fundamental principle is that Article 14 forbids
class legislation but permits reasonable classification for the
purpose of legislation which classification must satisfy the twin
tests of classification being founded on an intelligible differentia
which distinguishes persons or things that are grouped together
from those that are left out of the group and that differentia must
have a rational nexus to the object sought to be achieved by the
statute in question.
16. 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 thrust of Article 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
9 (1981) 1 SCC 722
10 [(1981) 4 SCC 335
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legislative action to help the less fortunate in the 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 bed rock of equality enshrined in Article 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
correlate it to the objects sought to be achieved. This approach is
noticed in Ramana Dayaram Shetty v International Airport
Authority of India11 when, the Court observed that a
discriminatory action of 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.
17. The basic contention as hereinbefore noticed is that the
pensioners for the purpose of receiving pension form a class and
there is no criterion on which classification of pensioners retiring
prior to specified date and retiring subsequent to that date can
provide a rational principle correlated to object viz. object
underlying payment of pensions. In reply to this contention set out
in para 19 of the petition, Mr S.N. Mathur, Director, Ministry of
Finance in para 17 of his affidavit-in-opposition on behalf of the
respondents has averred as under:
“The contentions in paras 18 and 19 that all pensioners
form one class is not correct and the petitioners have not
shown how they form one class. Classification of
pensioners on the basis of their date of retirement is a valid
classification for the purpose of pensionary benefits.”
These averments would show at a glance that the State action is
11 (1979) 3 SCC 489
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sought to be sustained on the doctrine of classification and the
criterion on which the classification is sought to be sustained is the
date of retirement of the government servant which entitled him to
pension. Thus according to the respondents, pensioners who retire
from Central Government service and are governed by the relevant
pension rules all do not form a class but pensioners who retire prior
to a certain date and those who retire subsequent to a certain date
form distinct and separate classes. It may be made clear that the
date of retirement of each individual pensioner is not suggested as
a criterion for classification as that would lead to an absurd result,
because in that event every pensioner relevant to his date of
retirement will form a class unto himself. What is suggested is that
when a pension scheme undergoes a revision and is enforced
effective from a certain date, the date so specified becomes a sort
of a rubicon and those who retire prior to that date form one class
and those who retire on a subsequent date form a distinct and
separate class and no one can cross the rubicon. And the learned
Attorney-General contended that this differentiation is grounded
on a rational principle and it has a direct correlation to the object
sought to be achieved by liberalised pension formula.
*****
19. What is a pension? What are the goals of pension? What
public interest or purpose, if any, it seeks to serve? If it does seek
to serve some public purpose, is it thwarted by such artificial
division of retirement pre and post a certain date? We need seek
answer to these and incidental questions so as to render just justice
between parties to this petition.
20. The antequated notion of pension being a bounty, a
gratuitous payment depending upon the sweet will or grace of the
employer not claimable as a right and, therefore, no right to
pension can be enforced through Court has been swept under the
carpet by the decision of the Constitution Bench in Deokinandan
Prasad v State of Bihar12 wherein this Court authoritatively ruled
that pension is a right and the payment of it does not depend upon
the discretion of the Government but is governed by the rules and a
government servant coming within those rules is entitled to claim
pension. It was further held that the grant of pension does not
depend upon anyone’s discretion. It is only for the purpose of
quantifying the amount having regard to service and other allied
matters that it may be necessary for the authority to pass an order
to that effect but the right to receive pension flows to the officer
not because of any such order but by virtue of the rules. This view
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was reaffirmed in State of Punjab v Iqbal Singh13.
*****
22. In the course of transformation of society from feudal to
welfare and as socialistic thinking acquired respectability. State
obligation to provide security in old age, an escape from
undeserved want was recognised and as a first step pension was
treated not only as a reward for past service but with a view to
helping the employee to avoid destitution in old age. The quid pro
quo was that when the employee was physically and mentally alert,
he rendered unto master the best, expecting him to look after him
in the fall of life. A retirement system therefore exists solely for
the purpose of providing benefits. In most of the plans of
retirement benefits, everyone who qualifies for normal retirement
receives the same amount (see Retirement Systems for Public
Employees by Bleakney, p. 33).
*****
24. A political society which has a goal of setting up of a
welfare State, would introduce and has in fact introduced as a
welfare measure wherein the retiral benefit is grounded on
“considerations of State obligation to its citizens who having
rendered service during the useful span of life must not be left to
penury in their old age, but the evolving concept of social security
is a later day development”. And this journey was over a rough
terrain. To note only one stage in 1856 a Royal Commission was
set up to consider whether any changes were necessary in the
system established by the 1834 Act. The Report of the
Commission is known as “Northcote-Trevelyan Report”. The
Report was pungent in its criticism when it says that:
“[I]n civil services comparable to lightness of work and the
certainty of provision in case of retirement owing to bodily
incapacity, furnish strong inducements to the parents and
friends of sickly youths to endeavour to obtain for them
employment in the service of the Government, and the
extent to which the public are consequently burdened, first
with the salaries of officers who are obliged to absent
themselves from their duties on account of ill health, and
afterwards with their pensions when they retire on the same
plea, would hardly be credited by those who have not had
opportunities of observing the operation of the system. [
See Gerald Rhodes: Public Sector Pensions, pp 18-19] ”
*****
13 (1976) 2 SCC 1
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26. Let us therefore examine what are the goals that pension
scheme seeks to subserve? A pension scheme consistent with
available resources must provide that the pensioner would be able
to live: (i) free from want, with decency, independence and self-
respect, and (ii) at a standard equivalent at the pre-retirement level.
This approach may merit the criticism that if a developing country
like India cannot provide an employee while rendering service a
living wage, how can one be assured of it in retirement? This can
be aptly illustrated by a small illustration. A man with a broken
arm asked his doctor whether he will be able to play the piano after
the cast is removed. When assured that he will, the patient replied,
“that is funny, I could not before”. It appears that determining the
minimum amount required for living decently is difficult, selecting
the percentage representing the proper ratio between earnings and
the retirement income is harder. But it is imperative to note that as
self-sufficiency declines the need for his attendance or institutional
care grows. Many are literally surviving now than in the past. We
owe it to them and ourselves that they live, not merely exist. The
philosophy prevailing in a given society at various stages of its
development profoundly influences its social objectives. These
objectives are in turn a determinant of a social policy. The law is
one of the chief instruments whereby the social policies are
implemented and
“pension is paid according to rules which can be said to
provide social security law by which it is meant those legal
mechanisms primarily concerned to ensure the provision
for the individual of a cash income adequate, when taken
along with the benefits in kind provided by other social
services (such as free medical aid) to ensure for him a
culturally acceptable minimum standard of living when the
normal means of doing so failed”. (See Social Security
Law by Prof. Harry Calvert, p. 1)
27. Viewed in the light of the present day notions pension is a
term applied to periodic money payments to a person who retires at
a certain age considered age of disability; payments usually
continue for the rest of the natural life of the recipient. The reasons
underlying the grant of pension vary from country to country and
from scheme to scheme. But broadly stated they are (i) as
compensation to former members of the Armed Forces or their
dependents for old age, disability, or death (usually from service
causes), (ii) as old age retirement or disability benefits for civilian
employees, and (iii) as social security payments for the aged,
disabled, or deceased citizens made in accordance with the rules
governing social service programmes of the country. Pensions
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under the first head are of great antiquity. Under the second head
they have been in force in one form or another in some countries
for over a century but those coming under the third head are
relatively of recent origin, though they are of the greatest
magnitude. There are other views about pensions such as charity,
paternalism, deferred pay, rewards for service rendered, or as a
means of promoting general welfare (see Encyclopaedia
Britannica, Vol. 17, p. 575). But these views have become otiose.
*****
29. Summing up it can be said with confidence that pension is
not only compensation for loyal service rendered in the past, but
pension also has a broader significance, in that it is a measure of
socio-economic justice which inheres economic security in the fall
of life when physical and mental prowess is ebbing corresponding
to aging process and, therefore, one is required to fall back on
savings. One such saving in kind is when you give your best in the
hey-day of life to your employer, in days of invalidity, economic
security by way of periodical payment is assured. The term has
been judicially defined as a stated allowance or stipend made in
consideration of past service or a surrender of rights or
emoluments to one retired from service. Thus the pension payable
to a government employee is earned by rendering long and
efficient service and therefore can be said to be a deferred portion
of the compensation or for service rendered. In one sentence one
can say that the most practical raison d’etre for pension is the
inability to provide for oneself due to old age. One may live and
avoid unemployment but not senility and penury if there is nothing
to fall back upon.
30. The discernible purpose thus underlying pension scheme or
a statute introducing the pension scheme must inform interpretative
process and accordingly it should receive a liberal construction and
the courts may not so interpret such statute as to render them inane
(see American Jurisprudence, 2d, 881).
31. From the discussion three things emerge: (i) that pension is
neither a bounty nor a matter of grace depending upon the sweet
will of the employer and that it creates a vested right subject to
1972 Rules which are statutory in character because they are
enacted in exercise of powers conferred by the proviso to Article
309 and clause (5) of Article 148 of the Constitution; (ii) that the
pension is not an ex gratia payment but it is a payment for the past
service rendered; and (iii) it is a social welfare measure rendering
socio-economic justice to those who in the hey-day of their life
ceaselessly toiled for the employer on an assurance that in their old
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age they would not be left in lurch. It must also be noticed that the
quantum of pension is a certain percentage correlated to the
average emoluments drawn during last three years of service
reduced to 10 months under liberalised pension scheme. Its
payment is dependent upon an additional condition of impeccable
behaviour even subsequent to retirement, that is, since the
cessation of the contract of service and that it can be reduced or
withdrawn as a disciplinary measure.
32. Having succinctly focussed our attention on the conspectus
of elements and incidents of pension the main question may now
be tackled. But, the approach of court while considering such
measure is of paramount importance. Since the advent of the
Constitution, the State action must be directed towards attaining
the goals set out in Part IV of the Constitution which, when
achieved, would permit us to claim that we have set up a welfare
State. Article 38(1) enjoins the State to strive to promote welfare of
the people by securing and protecting as effective as it may a
social order in which justice — social, economic and political —
shall inform all institutions of the national life. In particular the
State shall strive to minimise the inequalities in income and
endeavour to eliminate inequalities in status, facilities and
opportunities. Article 39(d) enjoins a duty to see that there is equal
pay for equal work for both men and women and this directive
should be understood and interpreted in the light of the judgment
of this Court in Randhir Singh v Union of India14. Revealing the
scope and content of this facet of equality, Chinnappa Reddy, J.
speaking for the Court observed as under:
“Now, thanks to the rising social and political
consciousness and the expectations aroused as a
consequence, and the forward-looking posture of this
Court, the underprivileged also are clamouring for their
rights and are seeking the intervention of the court with
touching faith and confidence in the court. The Judges of
the court have a duty to redeem their constitutional oath
and do justice no less to the pavement-dweller than to the
guest of the five-star hotel.”
Proceeding further, this Court observed that where all relevant
considerations are the same, persons holding identical posts may
not be treated differently in the matter of their pay merely because
they belong to different departments. If that can’t be done when
they are in service, can that be done during their retirement?
Expanding this principle, one can confidently say that if pensioners
14 (1982) 1 SCC 618
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form a class, their computation cannot be by different formula
affording unequal treatment solely on the ground that some retired
earlier and some retired later. Article 39(e) requires the State to
secure that the health and strength of workers, men and women,
and children of tender age are not abused and that citizens are not
forced by economic necessity to enter avocations unsuited to their
age or strength. Article 41 obligates the State within the limits of
its economic capacity and development, to make effective
provision for securing the right to work, to education and to
provide assistance in cases of unemployment, old age, sickness and
disablement, and in other cases of undeserved want. Article 43(3)
requires the State to endeavour to secure amongst other things full
enjoyment of leisure and social and cultural opportunities.
33. Recall at this stage the Preamble, the flood light
illuminating the path to be pursued by the State to set up a
Sovereign Socialist Secular Democratic Republic. Expression
“socialist” was intentionally introduced in the Preamble by the
Constitution (Forty-second amendment) Act, 1976. In the objects
and reasons for amendment amongst other things, ushering in of
socio-economic revolution was promised. The clarion call may be
extracted:
“The question of amending the Constitution for removing
the difficulties which have arisen in achieving the objective
of socio-economic revolution, which would end poverty
and ignorance and disease and inequality of opportunity,
has been engaging the active attention of Government and
the public for some time….
It is, therefore, proposed to amend the Constitution to spell
out expressly the high ideals of socialism … to make the
directive principles more comprehensive….”
What does a Socialist Republic imply? Socialism is a much
misunderstood word. Values determine contemporary socialism
pure and simple. But it is not necessary at this stage to go into all
its ramifications. The principal aim of a socialist State is to
eliminate inequality in income and status and standards of life. The
basic framework of socialism is to provide a decent standard of life
to the working people and especially provide security from cradle
to grave. This amongst others on economic side envisaged
economic equality and equitable distribution of income. This is a
blend of Marxism and Gandhism leaning heavily towards
Gandhian socialism. During the formative years, socialism aims at
providing all opportunities for pursuing the educational activity.
For want of wherewithal or financial equipment the opportunity to
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be fully educated shall not be denied. Ordinarily, therefore, a
socialist State provides for free education from primary to PhD but
the pursuit must be by those who have the necessary intelligence
quotient and not as in our society where a brainy young man
coming from a poor family will not be able to prosecute the
education for want of wherewithal while the ill equipped son or
daughter of a well-to-do father will enter the portals of higher
education and contribute to national wastage. After the education is
completed, socialism aims at equality in pursuit of excellence in
the chosen avocation without let or hindrance of caste, colour, sex
or religion and with full opportunity to reach the top not thwarted
by any considerations of status, social or otherwise. But even here
the less equipped person shall be assured a decent minimum
standard of life and exploitation in any form shall be eschewed.
There will be equitable distribution of national cake and the worst
off shall be treated in such a manner as to push them up the ladder.
Then comes the old age in the life of everyone, be he a monarch or
a mahatma, a worker or a pariah. The old age overtakes each one,
death being the fulfilment of life providing freedom from bondage.
But here socialism aims at providing an economic security to those
who have rendered unto society what they were capable of doing
when they were fully equipped with their mental and physical
prowess. In the fall of life the State shall ensure to the citizens a
reasonably decent standard of life, medical aid, freedom from
want, freedom from fear and the enjoyable leisure, relieving the
boredom and the humility of dependence in old age. This is what
Article 41 aims when it enjoins the State to secure public
assistance in old age, sickness and disablement. It was such a
socialist State which the Preamble directs the centres of power —
Legislative, Executive and Judiciary — to strive to set up. From a
wholly feudal exploited slave society to a vibrant, throbbing
socialist welfare society is a long march but during this journey to
the fulfilment of goal every State action whenever taken must be
directed, and must be so interpreted, as to take the society one step
towards the goal.
*****
35. With this background let us now turn to the challenge
posed in these petitions. The challenge is not to the validity of the
pension liberalisation scheme. The scheme is wholly acceptable to
the petitioners, nay they are ardent supporters of it, nay further
they seek the benefit of it. The petitioners challenge only that part
of the scheme by which its benefits are admissible to those who
retired from service after a certain date. In other words, they
challenge that the scheme must be uniformly enforced with regard
to all pensioners for the purpose of computation of pension
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irrespective of the date when the government servant retired
subject to the only condition that he was governed by the 1972
Rules. No doubt, the benefit of the scheme will be available from
the specified date, irrespective of the fact when the concerned
government servant actually retired from service.
36. Having set out clearly the society which we propose to set
up, the direction in which the State action must move, the welfare
State which we propose to build up, the constitutional goal of
setting up a socialist State and the assurance in the Directive
Principles of State Policy especially of security in old age at least
to those who have rendered useful service during their active years,
it is indisputable, nor was it questioned, that pension as a
retirement benefit is in consonance with and in furtherance of the
goals of the Constitution. The goals for which pension is paid
themselves give a fillip and push to the policy of setting up a
welfare State because by pension the socialist goal of security of
cradle to grave is assured at least when it is mostly needed and
least available, namely, in the fall of life.
37. If such be the goals of pension, if such be the welfare State
which we propose to set up, if such be the goals of socialism and
conceding that any welfare measure may consistent with economic
capacity of the State be progressively augmented with wider width
and a longer canvas yet when the economic means permit the
augmentation, should some be left out for the sole reason that
while in the formative years of the nascent State they contributed
their mite but when the fruits of their labour led to the flowering of
economic development and higher gross national produce bringing
in larger revenue and therefore larger cake is available, they would
be denied any share of it? Indisputably, viewed from any angle
pensioners for payment of pension form a class. Unquestionably
pension is linked to length of service and the last pay drawn but the
last pay does not imply the pay on the last day of retirement but
average emoluments as defined in the scheme….
38. What then is the purpose in prescribing the specified date
vertically dividing the pensioners between those who retired prior
to the specified date and those who retire subsequent to that date?
That poses the further question, why was the pension scheme
liberalised? What necessitated liberalisation of the pension
scheme?
39. Both the impugned memoranda do not spell out the raison
d’etre for liberalising the pension formula. In the affidavit in
opposition by Shri S.N. Mathur, it has been stated that the
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liberalisation of pension of retiring government servants was
decided by the Government in view of the persistent demand of the
Central Government employees represented in the scheme of Joint
Consultative Machinery. This would clearly imply that the pre-
liberalised pension scheme did not provide adequate protection in
old age and that a further liberalisation was necessary as a measure
of economic security. When Government favourably responded to
the demand it thereby ipso facto conceded that there was a larger
available national cake part of which could be utilised for
providing higher security to erstwhile government servants who
would retire. The Government also took note of the fact that
continuous upward movement of the post of living index as a
sequel of inflationary inputs and diminishing purchasing power of
rupee necessitated upward revision of pension. If this be the
underlying intendment of liberalisation of pension scheme, can
anyone be bold enough to assert that it was good enough only for
those who would retire subsequent to the specified date but those
who had already retired did not suffer the pangs of rising prices
and falling purchasing power of the rupee? What is the sum total
of picture? Earlier the scheme was not that liberal keeping in view
the definition of average emoluments and the absence of slab
system and a lower ceiling. Those who rendered the same service
earned less pension and are exposed to the vagary of rising prices
consequent upon the inflationary inputs. If, therefore, those who
are to retire subsequent to the specified date would feel the pangs
in their old age, of lack of adequate security, by what stretch of
imagination the same can be denied to those who retired earlier
with lower emoluments and yet are exposed to the vagaries of the
rising prices and the falling purchasing power of the rupee. And the
greater misfortune is that they are becoming older and older
compared to those who would be retiring subsequent to the
specified date. The Government was perfectly justified in
liberalising the pension scheme. In fact it was overdue. But we find
no justification for arbitrarily selecting the criteria for eligibility
for the benefits of the scheme dividing the pensioners all of whom
would be retirees but falling on one or the other side of the
specified date.
*****
42. If it appears to be undisputable, as it does to us that the
pensioners for the purpose of pension benefits form a class, would
its upward revision permit a homogeneous class to be divided by
arbitrarily fixing an eligibility criteria unrelated to purpose of
revision, and would such classification be founded on some
rational principle? The classification has to be based, as is well
settled, on some rational principle and the rational principle must
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have nexus to the objects sought to be achieved. We have set out
the objects underlying the payment of pension. If the State
considered it necessary to liberalise the pension scheme, we find
no rational principle behind it for granting these benefits only to
those who retired subsequent to that date simultaneously denying
the same to those who retired prior to that date. If the
liberalisation was considered necessary for augmenting social
security in old age to government servants then those who, retired
earlier cannot be worst off than those who retire later. Therefore,
this division which classified pensioners into two classes is not
based on any rational principle and if the rational principle is the
one of dividing pensioners with a view to giving something more to
persons otherwise equally placed, it would be discriminatory. To
illustrate, take two persons, one retired just a day prior and
another a day just succeeding the specified date. Both were in the
same pay bracket, the average emolument was the same and both
had put in equal number of years of service. How does a fortuitous
circumstance of retiring a day earlier or a day later will permit
totally unequal treatment in the matter of pension? One retiring a
day earlier will have to be subject to ceiling of Rs 8100 p.a. and
average emolument to be worked out on 36 months’ salary while
the other will have a ceiling of Rs 12,000 p.a. and average
emolument will be computed on the basis of last 10 months’
average. The artificial division stares into face and is unrelated to
any principle and whatever principle, if there be any, has
absolutely no nexus to the objects sought to be achieved by
liberalising the pension scheme. In fact this arbitrary division has
not only no nexus to the liberalised pension scheme but it is
counter-productive and runs counter to the whole gamut of
pension scheme. The equal treatment guaranteed in Article 14 is
wholly violated inasmuch as the pension rules being statutory in
character, since the specified date, the rules accord differential
and discriminatory treatment to equals in the matter of
commutation of pension. A 48 hours’ difference in matter of
retirement would have a traumatic effect. Division is thus both
arbitrary and unprincipled. Therefore, the classification does not
stand the test of Article 14.
43. Further the classification is wholly arbitrary because we do
not find a single acceptable or persuasive reason for this division.
This arbitrary action violated the guarantee of Article 14. …
*****
50. There is nothing immutable about the choosing of an event
as an eligibility criteria subsequent to a specified date. If the event
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is certain but its occurrence at a point of time is considered wholly
irrelevant and arbitrarily selected having no rationale for selecting
it and having an undesirable effect of dividing homogeneous class
and of introducing the discrimination, the same can be easily
severed and set aside. While examining the case under Article 14,
the approach is not: “either take it or leave it”, the approach is
removal of arbitrariness and if that can be brought about by
severing the mischievous portion the court ought to remove the
discriminatory part retaining the beneficial portion. The pensioners
do not challenge the liberalised pension scheme. They seek the
benefit of it. Their grievance is of the denial to them of the same by
arbitrary introduction of words of limitation and we find no
difficulty in severing and quashing the same. This approach can be
legitimised on the ground that every government servant retires.
State grants upward revision of pension undoubtedly from a date.
Event has occurred revision has been earned. Date is merely to
avoid payment of arrears which may impose a heavy burden. If the
date is wholly removed, revised pension will have to be paid from
the actual date of retirement of each pensioner. That is
impermissible. The State cannot be burdened with arrears
commencing from the date of retirement of each pensioner. But
effective from the specified date future pension of earlier retired
government servants can be computed and paid on the analogy of
fitments in revised pay scales becoming prospectively operative.
That removes the nefarious unconstitutional part and retains the
beneficial portion. It does not adversely affect future pensioners
and their presence in these petitions becomes irrelevant. But before
we do so, we must look into the reasons assigned for eligibility
criteria, namely, “in service on the specified date and retiring after
that date”. The only reason we could find in affidavit of Shri
Mathur is the following statement in para 5:
“The date of effect of the impugned orders has been
selected on the basis of relevant and valid considerations.”
51. We repeatedly posed a question: what are those relevant
and valid considerations and waited for the answer in vain. We
say so because in the written submissions filed on behalf of the
Union of India, we find not a single valid or relevant consideration
much less any consideration relevant to selection of eligibility
criteria. The tenor is “we select the date and it is unquestionable;
either take it or leave it as a whole”. The only submission was that
the date is not severable and some submissions in support of it.
*****
58. Now if the choice of date is arbitrary, eligibility criteria is
unrelated to the object sought to be achieved and has the
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pernicious tendency of dividing an otherwise homogeneous class,
the question is whether the liberalised pension scheme must wholly
fail or that the pernicious part can be severed, cautioning itself that
this Court does not legislate but merely interprets keeping in view
the underlying intention and the object, the impugned measure
seeks to subserve? Even though it is not possible to oversimplify
the issue, let us read the impugned memoranda deleting the
unconstitutional part. Omitting it, the memoranda will read like
this:
“At present, pension is calculated at the rate of 1/80th of
average emoluments for each completed year of service and
is subject to a maximum of 33/80 of average emoluments
and is further restricted to a monetary limit of Rs 1000 per
month. The President is, now, pleased to decide that with
effect from March 31, 1979 the amount of pension shall be
determined in accordance with the following slabs.”
If from the impugned memoranda the event of being in service and
retiring subsequent to specified date is severed, all pensioners
would be governed by the liberalised pension scheme. The pension
will have to be recomputed in accordance with the provisions of
the liberalised pension scheme as salaries were required to be
recomputed in accordance with the recommendation of the Third
Pay Commission but becoming operative from the specified date.
It does therefore appear that the reading down of impugned
memoranda by severing the objectionable portion would not render
the liberalised pension scheme vague, unenforceable or
unworkable.
59. In reading down the memoranda, is this Court legislating?
Of course “not”. When we delete basis of classification as violative
of Article 14, we merely set at naught the unconstitutional portion
retaining the constitutional portion.
*****
65. That is the end of the journey. With the expanding horizons
of socio-economic justice, the Socialist Republic and welfare State
which we endeavour to set up and largely influenced by the fact
that the old men who retired when emoluments were
comparatively low and are exposed to vagaries of continuously
rising prices, the falling value of the rupee consequent upon
inflationary inputs, we are satisfied that by introducing an arbitrary
eligibility criterion: “being in service and retiring subsequent to the
specified date” for being eligible for the liberalised pension
scheme and thereby dividing a homogeneous class, the
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classification being not based on any discernible rational principle
and having been found wholly unrelated to the objects sought to be
achieved by grant of liberalised pension and the eligibility criteria
devised being thoroughly arbitrary, we are of the view that the
eligibility for liberalised pension scheme of “being in service on
the specified date and retiring subsequent to that date” in impugned
memoranda, Exs. P-1 & P-2, violates Article 14 and is
unconstitutional and is struck down. Both the memoranda shall be
enforced and implemented as read down as under: In other words,
in Ex. P-1, the words:
that in respect of the Government servants who were in
service on the 31st March, 1979 and retiring from service
on or after that dateand in Exhibit P-2, the words:
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.
are unconstitutional and are struck down with this specification
that the date mentioned therein will be relevant as being one from
which the liberalised pension scheme becomes operative to all
pensioners governed by 1972 Rules irrespective of the date of
retirement. 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. Let a writ to that effect
be issued. But in the circumstances of the case, there will be no
order as to costs.”
18. All Manipur Pensioners Association v State of Manipur
18.1 Nakara has been followed in All Manipur Pensioners
Association v State of Manipur & Ors15. In that case, the provision
under challenge was in an Office Memorandum16 dated 21 April 1999
issue by the Government of Manipur, whereby employees who retired15 (2020) 14 SCC 625
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or after 1 January 1996 were entitled to a revised pension at rates
higher than those applicable to employees who retired prior to that
date.
18.2 Following Nakara, the Supreme Court held that the State
Government was not justified in creating two classes of pensioners, in
the form of pre-1996 retirees and post-1996 retirees. The following
passages from the judgment are relevant:
“7. The short question which is posed for consideration before
this Court is, whether in the facts and circumstances of the case,
the decision of this Court in D.S. Nakara shall be applicable or
not, and in the facts and circumstances of the case and solely on
the ground of financial constraint, the State Government would be
justified in creating two classes of pensioners viz. pre-1996 retirees
and post-1996 retirees for the purpose of payment of revised
pension and whether such a classification is arbitrary, unreasonable
and violative of Article 14 of the Constitution of India or not?
7.1. At the outset, it is required to be noted that in the present
case, the State Government has justified the cut-off date for
payment of revised pension solely on the ground of financial
constraint. On no other ground, the State tried to justify the
classification. In the backdrop of the aforesaid facts, the aforesaid
question posed for consideration before this Court is required to be
considered.
7.2. It is not in dispute that the State Government has adopted
the Central Civil Services (Pension) Rules, to be applicable to the
State of Manipur. The State has also come out with the Manipur
Civil Services (Pension) Rules, 1977. It is also not in dispute that
subject to completing the qualifying service the government
servants retired in accordance with the pension rules are entitled
to pension. Therefore, as such, all the pensioners form only one
homogeneous class. Therefore, it can be said that all the
pensioners form only one class as a whole. Keeping in mind the
increase in the cost of living, the State Government increased the
quantum of pension and even pay for its employees. The State
Government also enhanced the scales of pension/quantum of16 “OM” hereinafter
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pension with effect from 1-1-1996 keeping in mind the increase in
the cost of living. However, the State Government provided the
cut-off date for the purpose of grant of benefit of revised pension
with effect from 1-1-1996 to those who retired post-1996 and
denied the revision in pension to those who retired pre-1996. The
aforesaid classification between these pensioners who retired pre-
1996 and post-1996 for the purpose of grant of benefit of revision
in pension is the subject-matter of this appeal. As observed
hereinabove, the aforesaid classification is sought to be justified by
the State Government solely on the ground of financial constraint.
7.3. At the outset, it is required to be noted that in D.S. Nakara,
such a classification is held to be arbitrary, unreasonable, irrational
and violative of Article 14 of the Constitution of India. …
*****
8. Even otherwise on merits also, we are of the firm opinion
that there is no valid justification to create two classes viz. one
who retired pre-1996 and another who retired post-1996, for the
purpose of grant of revised pension. In our view, such a
classification has no nexus with the object and purpose of grant of
benefit of revised pension. All the pensioners form one class who
are entitled to pension as per the pension rules. Article 14 of the
Constitution of India ensures to all equality before law and equal
protection of laws. At this juncture it is also necessary to examine
the concept of valid classification. A valid classification is truly a
valid discrimination. It is true that Article 16 of the Constitution of
India permits a valid classification. However, a valid classification
must be based on a just objective. The result to be achieved by the
just objective presupposes the choice of some for differential
consideration/treatment over others. A classification to be valid
must necessarily satisfy two tests. Firstly, the distinguishing
rationale has to be based on a just objective and secondly, the
choice of differentiating one set of persons from another, must
have a reasonable nexus to the objective sought to be achieved.
The test for a valid classification may be summarised as a
distinction based on a classification founded on an intelligible
differentia, which has a rational relationship with the object
sought to be achieved. Therefore, whenever a cut-off date (as in
the present controversy) is fixed to categorise one set of pensioners
for favourable consideration over others, the twin test for valid
classification or valid discrimination therefore must necessarily be
satisfied.
8.1. In the present case, the classification in question has no
reasonable nexus to the objective sought to be achieved while
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revising the pension. As observed hereinabove, the object and
purpose for revising the pension is due to the increase in the cost
of living. All the pensioners form a single class and therefore such
a classification for the purpose of grant of revised pension is
unreasonable, arbitrary, discriminatory and violative of Article 14
of the Constitution of India. The State cannot arbitrarily pick and
choose from amongst similarly situated persons, a cut-off date for
extension of benefits especially pensionary benefits. There has to
be a classification founded on some rational principle when
similarly situated class is differentiated for grant of any benefit.
8.2. As observed hereinabove, and even it is not in dispute that
as such a decision has been taken by the State Government to
revise the pension keeping in mind the increase in the cost of
living. Increase in the cost of living would affect all the pensioners
irrespective of whether they have retired pre-1996 or post-1996.
As observed hereinabove, all the pensioners belong to one class.
Therefore, by such a classification/cut-off date the equals are
treated as unequals and therefore such a classification which has
no nexus with the object and purpose of revision of pension is
unreasonable, discriminatory and arbitrary and therefore the said
classification was rightly set aside by the learned Single Judge of
the High Court. At this stage, it is required to be observed that
whenever a new benefit is granted and/or new scheme is
introduced, it might be possible for the State to provide a cut-off
date taking into consideration its financial resources. But the same
shall not be applicable with respect to one and single class of
persons, the benefit to be given to the one class of persons, who are
already otherwise getting the benefits and the question is with
respect to revision.
9. In view of the above and for the reasons stated above, we
are of the opinion that the controversy/issue in the present appeal is
squarely covered by the decision of this Court in D.S. Nakara. The
decision of this Court in D.S. Nakara shall be applicable with full
force to the facts of the case on hand. The Division Bench of the
High Court has clearly erred in not following the decision of this
Court in D.S. Nakara and has clearly erred in reversing the
judgment and order of the learned Single Judge. The impugned
judgment and order passed by the Division Bench is not
sustainable and the same deserves to be quashed and set aside and
is accordingly quashed and set aside. The judgment and order
passed by the learned Single Judge is hereby restored and it is held
that all the pensioners, irrespective of their date of retirement viz.
pre-1996 retirees shall be entitled to revision in pension on a par
with those pensioners who retired post-1996. The arrears be paid to
the respective pensioners within a period of three months from
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today.”
19. We are of the considered opinion that, in the light of the law
laid down in these decisions, the outcome of this litigation is
predetermined. Though these decisions dealt with the issue of
whether the entitlement to pension, or to liberalised or revised
pension, could be based on a cut-off date, thereby rendering
pensioners who retired prior to that date ineligible for revised
pension, and those who retired thereafter eligible therefor, the
principles clearly apply, mutatis mutandis, to the entitlement of
dependent family members, of a deceased pensioner, to family
pension.
20. The observations of the Supreme Court can easily be
extrapolated to such a case. In line with the observations of the
Supreme Court in the above decisions, unmarried daughters of a
deceased employee of the Bank form one homogenous class. They
cannot be artificially divided on the basis of a cut-off age of 25.
Family pension, as the respondents themselves accept, is intended to
provide succour to the family members of a deceased pensioner.
Among such family members are unmarried daughters. The Pension
Regulations do not disclose any basis for the cut-off age of 25, in the
case of unmarried daughters. The counter-affidavit filed by the Bank
proceeds on a presumption that unmarried daughters, once they cross
the age of 25, are self-sufficient. No basis for this presumption is
forthcoming. Insofar as the plea, of Mr. Arora, that, if the plea of the
petitioner were to be allowed, it would result in severe financial
burden on the Bank, already stand rejected by the Supreme Court in its
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decision in All Manipur Pensioners Association.
21. Besides, if the concern of the Bank was that daughters of a
deceased pensioner, who were self-sufficient and possessed of the
means to manage their lives, would nonetheless seek family pension,
the solution, if at all, would be to incorporate, in the Pension
Regulations, provisions to make the financial status of the dependent
family members, including unmarried daughters, a governing criterion
for entitlement to family pension. Of course, in such an event, the
Pension Regulations would also have to provide objective and legally
sustainable criteria on the basis of which the financial condition of
such unmarried daughters would have to be reckoned. Here, again, it
would not be permissible for the Bank to incorporate some artificial
criterion, such as a cut-off age, as the sole basis to determine financial
wherewithal. Any such basis would be unscientific and irrational, and
would necessarily have to perish beneath the sabre of Articles 14 and
16 of the Constitution of India.
22. Besides referring to some general perception and general belief
– for which, too, no empirical data is forthcoming – Mr. Arora has not
been able to justify, on the basis of any principle of science or
economics, the presumption that, on her 25th birthday, an unmarried
girl crosses the Rubicon of dependency. The figure of 25 is based on
no legally sustainable principle. It does not constitute a legitimate
consideration on the basis of which unmarried daughters of deceased
pensioners, who otherwise form one homogenous class, can be
divided into two. It is, therefore, entirely arbitrary.
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23. It is worthwhile to reiterate, before proceeding or concluding
the discussion, that the impugned provisions of the Pension
Regulations do not make entitlement of an unmarried daughter to
family pension dependent on her financial position or her financial
wherewithal. Her entitlement is made solely dependent on her age.
24. In fact, the first proviso to Regulation 40(1)(b) of the Pension
Regulations itself factors in the consideration of financial dependency
by stipulating that the entitlement to family pension would cease if the
son or daughter – which would include unmarried daughters – starts
earning over ₹ 2550/-, per month. If anything, this provision may be
regarded as unduly stringent. However, it is not under challenge, and
it is not our remit, therefore, to offer any comment in that regard. The
apprehension of the Bank that, if a cut-off age is not stipulated,
unmarried daughters possessed of the financial wherewithal to fend
for themselves would also seek to claim family pension, however,
stands addressed.
25. Mr. Arora also submitted that, if the regulation is to remain
open-ended, it would result in unmarried daughters becoming eligible
forever.
26. The submission which is one which hinges on imponderables.
The entitlement to family pension survives only till the daughter is
unmarried. If, beyond the age of 25 years the daughter marries, she is
no longer entitled to family pension under the said clause. The
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entitlement would also cease if the daughter commences earning more
than ₹ 2550/- per month. This proviso, in our view, more than amply
protects the Bank, and is sufficient to allay the apprehension expressed
by Mr. Arora.
27. We, therefore, are of the considered opinion that exclusion,
from the benefit of family pension, of unmarried daughters of
deceased employees of the Bank, on their attaining the age of 25, is
unconstitutional, as it infracts Articles 14 and 16 of the Constitution of
India.
28. Regulations 2(o)(c) and 40(1)(b), to the extent they render
unmarried daughters who are above the age of 25 years as ineligible
for family pension are, therefore, struck down. It is declared that
unmarried daughters of deceased employees of the Bank would not
become ipso facto disentitled to family pension merely because they
are 25 years of age or above, provided they satisfy the other
stipulations and conditions envisaged in the Pension Regulations for
entitlement to family pension.
29. As, till today, the respondents have not granted family pension
to the petitioner only because of the existence of the impugned
Regulations on the statute book, we do not think it would be
appropriate to grant any arrears of pension. The petitioner would,
therefore, be entitled to family pension, from today, subject to her
satisfying the other conditions envisaged in the Pension Regulations in
that regard.
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30. The petition is allowed to the aforesaid extent with no orders as
to costs.
C.HARI SHANKAR, J.
AJAY DIGPAUL, J.
JULY 17, 2025/AS
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