K.N.SAIKIA - (1.) THIS analogous cluster of five writ petitions and one special leave petition involves a common question of law. The petitioner in Writ Petition No. 352 of 1989 is President of the All India Retired Railwaymen (P. F. Terms) Association and the petition has been filed in a representative' capacity on behalf of all the members of the Association who retired with Provident Fund benefits. Writ Petition No. 361 of 1989 has been filed by three individual retired Railway employees who also retired with provident fund benefits. The petitioner in Writ Petition No. 1285 of 1986 retired as Block Inspector of Northern Railway on 7-1-1968, a non-pensionable post. All the petitioners except petitioner No. 5 in W. P. No. 1575 of 1986 retired from Railway service high posts. Petitioner No. 1 retired as Additional Member, Railway Board on 5-11-1960 with Provident Fund benefits. Petitioner No. 2 was Member, Railway Board and similarly retired on 1-3-1968 opting for Provident Fund Scheme as at that time the maximum monthly pension was Rs. 675 only. Petitioner No. 3 similarly retired as General Manager on 5-12-1960. Petitioner No. 4 retired as Member (Staff) Railway Board and Ex officior Secretary to the Government of India on 30-6-1977 opting for the Provident Fund Scheme. Petitioner No. 5 also retired on 19-6-1972 opting for the Provident Fund Scheme. Petitioner No. 6 retired on 28-8-1962 as Director Health, Railway Board opting for Provident Fund Scheme. Petitioner No. 7 similarly retired on 17-2-1968 as Director, Railway Board. Petitioner No. 8 retired as General Manager, Indian Railways on 15-10-1966 with the Contributory Provident Fund Scheme. The petitioners in Writ Petition No. 1165 of 1989 are also similarly retired persons. The petitioner in Special Leave Petition (Civil) No. 8461 of 1986 retired as Assistant Auditor, with Provident Fund benefits. His claim to switch over to pension after retirement was rejected. The petitioners are thus retired railway employees who were covered by or had opted for the Railway Contributory Provident Fund Scheme. It is the petitioners case that before 1957 the only Railway scheme for retirement benefits in the was the Provident Fund Scheme wherein each employee had to contribute till retirement a portion of his annual income towards the Provident Fund and the Railway as the employer would make a matching contribution thereto. THIS Provident Fund Scheme was replaced in the year 1957 by the Pension Scheme whereunder the Railway would give posterior to his retirement certain monthly pension to each retired employee instead of making prior contribution to his Provident Fund. It is stated that the employees who entered Railway service on or after 1-4-1957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme. In so far as the employees who were already in service on 1-4-1957, they were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits on condition that the matching Railway contribution already made to their Provident Fund accounts would revert to the Railways on exercise of the option.
(2.) IT is the petitioners' case that till 1-4-1957 or even sometime thereafter, the pensionary benefits and the alternative Contributory Provident Fund benefits were considered to be more or less equally beneficial, wherefore, employees opted for either of them. That the benefits of the two were evenly balanced was evidenced by the Railway Board circular dated 17-9-1960 which gave an option to the employees covered by the Provident Fund Scheme to switch over to pension scheme and vice versa. Mr. Shanti Bhushan, the learned counsel for the petitioners in Writ Petitions Nos. 352 and 361 of 1989, submits that between 1957 and 1987 the pensionary benefits of Railway employees were enhanced on several occasions by different ways such as altering the formula for computing the pension, by including dearness allowance in the pay for computing pension, by removal of the ceiling on pension, and by introducing or liberalising the Family Pension Scheme etc. The Railways, it is urged, had expressed no intention of extending the benefits of this liberalised pension to those employees who had already retired. At the time when the option was given to choose between pension and Provident Fund, the employees had no idea that in future improvements would be made to either of them. However, it is stated, this Court in D. S. Nakara v. Union of India, (1983) 2 SCR 165 : (AIR 1983 SC 130), held that the benefit of any liberalisation in computation of pension would also have to be extended to those employees who had already retired as they were similarly situated with those who were yet to retire. It is submitted, that even though Nakara's case related to Central Government employees, the Railways also implemented the Judgment and extended the liberalised pension benefits even to those employees who had retired long before the liberalisations concerned were introduced. The decision to implement Nakara's Judgment to Railway employees is admittedly contained in G. 0. No. F1(3)EV/83 dated 22-10-1983. This has, according to the learned counsel, given rise to the "strange situation" namely, that while two alternative benefits of provident fund and pension were more or less equal at the time when the petitioners were to make their choice, the pensions have thereafter been liberalised manifold to the benefit of the pension retirees, whereas no similar benefits have been extended to those who retired opting for Provident Fund, hereinafter called 'the P. F. retirees'. It is asserted that due to successive liberalisations of pensions, the pension retirees derived manifold benefits while the P. F. retirees' benefits remained stagnant. It is submitted that had the petitioners, all of whom are P. F. retirees, known that pensionary benefits might subsequently be so increased, they would no doubt have opted for pension instead of Provident Fund. The following twelve notifications giving such options are referred to: JUDGEMENT_207_4_1990Html1.htm It may be noted that in case of each option the cut-off date was anterior to the respective dates of announcement, and as a result, employees who retired after the cut-off date (specified date) and before the notification date were also made eligible for exercising the option despite the fact that they already retired in the meantime. From the above, the 'main legal point' that arises, submits Mr. Shanti Bhushan, is that the Railways issued the above notification giving option to certain P. F. retirees after the respective cut-off dates to opt for the Pension Scheme even after their retirement, but the same options were not given to other similarly situated P. F. retirees beyond the respective cut-off dates. This, it is submitted, is clearly discriminatory and violative of Art. 14 of the Constitution and deserves to be struck down.
(3.) IT is contended by the petitioners that each of the above notifications including the last one, dated 8-5-1987 had given a fresh option to some of the P. F. retirees while denying that option to other P. F. retirees who were identically placed but were separated from the rest by the arbitrary cutoff date. Each of the notification specified a date and provided that the P. F. retirees who retired on or after that date would have fresh option of switching over to the pensionary benefits even though they had already retired, and also had already drawn the entire Provident Fund benefits due to them. IT is also contended that the specified dates in these notifications having formed the basis of the discrimination between similarly placed P. F. retirees those were arbitrary and unrelated to the objects sought to be achieved by giving of the option and were clearly violative of Art. 14 and also of the principle laid down in Nakara's case, (AIR 1983 SC 130), which according to counsel, is that pension retirees could not be divided by such arbitrary cut-off dates for the purpose of giving benefits to some and not to other similarly situated employees; and that by analogy the rule is equally applicable to the Provident Fund retirees as a class. Mr. Kapil Sibal, the learned Additional Solicitor General refuting the argument submits that each of the options was meant to give the P. F. retirees after the specified dates option to switch over to Pension Scheme and that each specified date had nexus with the reason for granting the particular option. He relies on the following statements to substantiate his submission. Statement Showing Pension Options Given to Railway Employees JUDGEMENT_207_4_1990Html2.htm 218 INTRODUCTION OF PENSION SCHEME OF RAILWAYS AND SUBSEQUENT PENSION OPTION i) Introduction of Pension Scheme Pension Scheme was introduced on the Railways on 16-11-57 and was applicable to the following: (a) To all Railway servants who enter service on and after 16-11-57 and (b) To all non-pensionable Railway servants who were in service on 1-4-57 or join Railway Service between 1-4-57 and 16-11-57 and opt for the Pension Scheme. The scheme was made applicable from 1-4-57 because the financial year commences from April each year. This option was extended 4 times from time to time and was valid up to 28-3-59. The extensions were given because there were representations for its extension so that the staff could get time to weigh the merits of the Schemes before they take decision. ii) Pension option dated 17-9-1960 Orders were issued on 2-8-1960 notifying. Railway Service (Authorised Pay) Rules, 1960. Under this notification new pay scales were introduced for Railway Servants. These new pay scales were effective from 1/07/1959. Fresh option was granted on 17-9-60 to Railway employees who were in service on 1-7-59 to come over to the pension scheme. The last date for exercising the option was 15-12-60. This was extended up to 31-12-60 to enable the concerned employees to come to a considered decision whether to retain the P.F. or opt for the pension scheme. iii) Pension Option dated 26-10-62 A decision was taken on 26-10-62 to count the officiating pay for the purpose of retirement benefits in case of those who were in service on 1-9-62. Accordingly, afresh option was given to staff to come over to pension scheme on 26-10-62. This option remained open till 31-3-63. iv) Pension Option dated 17-1-1964 As a result of introduction of Family Pension Scheme 1964, which came into force on 1- 1-64 orders were issued on 17-1-64 to the effect that all Railway employees who were in service could opt for pension scheme within a period of 6 months. This option was extended up to 16-9-64. v) Pension Option dated 3-3-66 Family Pension Scheme was further liberalised for employees who die while in service. In view of this improvement in pension scheme, pension option under Railway Board's orders dated 3-3-66 was given to employees who were in service on 31-12-65. Since the liberalisation in Family Pension Scheme came into effect from 1/01/1966 the option was open for employees who were in service on 31-12-65 and was open up to 30-6-1966. vi) Pension Option dated 13-9-68 The definition of 'Pay' for pensionary benefits was changed from 1-5-68, through Board's orders dated 13-9-68. In view of this, a further option was given on 13-9-68 to Railway employees who were in service on and after 1-6-68 to opt for the Pension Scheme. This option was open up to 31-12-68. This was further extended up to 31-3-69. vii) Pension Option dt. 15-7-72. On representation from the recognised labour federations that many employees had not clearly understood the liberalisation in-troduced in the pension scheme, a fresh option was allowed on 15-7-72 to all serving employees. This was open till 21-10-72. viii) Pension Option dated 23-7-74 This option was based on similar orders issued by Ministry of Finance. The rationale behind this option was that the recommendations of the 3rd Pay Commission became effective from 1-1-73 but pay structure of all employees who were in service on 1-1-73 got altered through orders issued piecemeal from time to time. There were liberalisations in the pension scheme also in the form of increase in the amount of gratuity as also introduction of the concept of Dearness Relief made available to the pensioners. This option was made available to all employees who were in service on 1-1-73. Employees who had retired earlier did not get affected in any way by the recommendations of the 3rd Pay Commission and were accordingly not given this option to come over to Pension Scheme. This option was available up to 22-1-75, a period of 6 months. The option given was extended from time to time till 31-12-78. The reason why this extension had to be allowed was that the revised pay scales recommended by the Pay Commission for many of the categories could not be finalised and notified. Till such time, the revised pay scale admissible ,to each category was made known, it was impossible for the concerned staff to assess the benefit admissible for opting for the revised scale as also for the pension option. The pension option had therefore to be extended from time to time in this manner. The letters authorising extension of the date of option were not very clearly worded with the result that the pension option during the periods of extension was granted even to those who had retired before such extension became admissible but who were in service on 1-1-73. The clarification was accordingly issued to all the Railways stating that the subsequent orders extending the date of option were applicable to serving employees only, but the cases already decided otherwise may be treated as closed and need not be opened again. It was subsequently represented by the organised labour that the options actually exercised up to 31-12-78 should be treated valid even though such cases may not have been decided by that date. This was agreed to and orders issued accordingly. ix) Pension Option dated 23-8-79 A liberalised formula and slab-system for calculation of pension effective from 31-3-79 was notified by Railway Board on 1-6-79. Accordingly, orders were issued on 23-8-79 allowing pension option to those Railway employees who were in service on 31-3-79. This option was initially open till 22-2-80 but was extended subsequently to enable wider participation up to 22-2-1981. x) Pension Option dated 4-10-82 Orders were issued by Board on 30-4-82 ordering that a portion of Dearness Allowance will be treated as pay for retirement benefits w.e.f. 31-1-82. Accordingly a fresh option was allowed on 4-10-82 which could be exercised by Railway employees who were in service on 31-1-82. This option was available up to 31-8-83. xi) Pension Option dated 18-6-85 Orders were issued by Railway Board on 17-5-85 merging Dearness Allowance to the price index up to 568 with pay for the purpose of retirement benefits and raising the ceiling of DCRG from 36,000 to 50,000 w.e.f. 31-3-85. Accordingly, another option was granted to the Railway employees who were in service on 31-3-85. This option was available for a period of 6 months i.e. up to 17-12-1985. xii) Pension Option dated 8-5-87 Consequent upon acceptance of the recommendations of the 4th Pay Commission the revised pay scales were notified on 19-9-86, and 14-3-87, effective from 1-1-86. Accordingly another pension option was given to the Railway employees who were in service on 1-1-86. Under these orders those who did not specifically opt out of pension scheme by 17-12-87 would be automatically deemed to have opted for the pension scheme. ;