- (1.) In exercise of powers conferred by Cl.(j) of sub-sec. (2) of S. 58 or the Reserve Bank of India Act, 1934 (Act II of 1934) (hereinafter called 'the Act'), the Central Board of the Reserve Bank of India with the prior approval of the Central Government framed Regulations known as the Reserve Bank of India Pension Regulations, 1990 (hereinafter called 'the Regulations'). By the said Regulations brought into force with effect from 1st November, 1990 a pension scheme was introduced in substitution of the existing Contributory Provident Fund Scheme (hereinafter alluded to as the 'CPF Scheme' ). The newly introduced pension scheme was made applicable to all employees entering Bank service on or after 1st November, 1990; for them the CPF Scheme did not exist. The in-service employees i.e. those employees who were actually in service at the date of introduction of the scheme were given an option to opt out of the pension scheme and continue to be governed by the CPF Scheme. The third category is of those who retired from Bank's service between 1st January, 1986 and 1st November, 1990. Regulation 3(3) which deals with the applicability of the scheme to the said category of retired employees reads as under: "3(3) Employees who were in service as on 1st January 1986 (excluding those on leave preparatory to retirement) and had retired before 1st November, 1990, provided they exercise option to be governed by these Regulations and refund, within such period as may be specified, the Bank's contribution to provident fund including interest received by them from the Bank together with simple interest at six per cent per anrium from the date of withdrawal till the date of repayment. Pension shall be payable to them in accordance with Regulation 31." Regulation 31 reads as under: "31. Employees who have retired from tne Bank's service on or after 1st January, 1986 and before 1st November, 1990 shall be eligible for pension from 1st November, 1990 or after expiry of leave preparatory to retirement subject to Regulation 22. The payment of pension shall be subject to their refunding Bank's contribution to provident fund including interest received by them from the Bank, together with simple interest at the rate of six per cent per annum from the date of withdrawal till the date of repayment. Such employees will be permitted to commute their pension also with effect from 1st November, 1990, after due medical examination." It, therefore, appears on a conjoint reading of Regulation 3(3) and Regulation 31 that Bank employees who retired from service between 1st January, 1986 and 1st November, 1990 could opt for the benefit of the pension scheme with effect from 1st November, 1990 provided they refunded the Bank's contribution to the provident fund together with interest received thereon and together with further interest calculated at 6 per cent per annum from the date of withdrawal till the date of repayment. Bank employees who retired from service before 1st January, 1986 were not eligible to opt for the newly introduced pension scheme.
(2.) Petitioner No.1 is an Association of retired Bank employees and petitioners Nos. 2 to 7 are its members who retired from the Bank's service on or before 31st December, 1985. They are not entitled to opt for the pension-plan under the aforesaid Regulations. They contend that the cut-off date fixed under Regulations 3(3) and 31 extracted earlier is wholly artificial and has no relation to the object sought to be achieved by the introduction of the pension-plan in substitution of the extant CPF scheme. They contend that Article 14 of the Constitution forbids class legislation and the Bank Authorities have by drawing an artificial classification between those who retired on or before 31st December, 1985 and those who retired 24 hours later i.e. on or after 1st Janary, 1986 have violated the letter and spirit of the said article of the Constitution. Although Article 14 permits reasonable classification, that classification must satisfy the twin test of the same being founded on an intelligible criterion which distinguishes persons or things which are grouped together from those left out and the said differentia must be shown to have a rational nexus to the object sought to be achieved by the relevant Rules or Regulations. The petitioners, therefore, contend that while the pension scheme introduced under the Regulations is a welcome step consistent with the constitutional philosophy discernible from the Preamble and Articles 38, 39, 41 and 43 of Part IV of the Constitution, the artificial division of a homogeneous class of retired employees between those who retired prior to 1st January, 1986 and those who retired on or after that date is wholly arbitrary and unreasonable and is liable to be struck down as violative of Article 14 of the Constitution as explained by this Court in D . S. Nakara v. Union of India, (1983) 3 SCR 165 : (AIR 1983 SC 130). The petitioners contend that it is settled law that pension is neither a bounty nor a gratuitous payment dependent wholly on the sweet will or grace of the employer but is a right to which an employee is entitled on superannuation under the relevant Rules and is a welfare measure intended to render socioeconomic justice, a concept enshrined in the Preamble and Part IV of the Constitution. To deny benefit of the pension scheme merely because a group of employees superannuated on or before 31st December, 1985 is clearly abhorrent to the constitutional philosophy enshrined in Articles 14, 19, 21 and 300A of the Constitution. The petitioners, therefore, contend that the obnoxious part of Regulations 3(3) and 31 which limit the benefit of the pension plan to only those employees who retired from service on or after 1st January, 1986 should be struck down and instead the same should be liberalised and extended to all retired Bank employees regardless of the date of their retirement provided they opt for the scheme and are ready and willing to abide by the condition of refunding the Bank's contribution to the CPF scheme together with interest, if any, received by them and with further simple interest at 6 per cent per annum from the date of withdrawal of the said amount till repayment. In other words the petitioners contend that the pension scheme should be made available to all employees who retired from Bank's service before 1st November, 1990 provided they opt for the pension scheme. They contend that if the benefit of the pension scheme is extended to those who retired before 1st November, 1990 about 2,000 such employees will benefit therefrom and not all of them will opt for the same and hence the financial implication of the extension of the scheme to such employees will be marginal.
(3.) On behalf of the respondents, No.2 has entered a counter on behalf of the management and he contends that the cut-off date was chosen as 1st January, 1986 for diverse reasons, one of them being that the newly introduced pension scheme was patterned on the pension scheme applicable to central Government Employees as revised by the Fourth Central Pay Commission with effect from 1st January, 1986. This date was decided upon after considerable thought having regard to the fact that the proposal for a pension cheme in lieu of the PF scheme was revived sometime in 1986 after it was initially turned down. Besides, it was considered appropriate that retired employees who had drawn their package of superannuation benifits many years earlier and had the benefit of use of those funds over prolonged periods need not now be given the option to move over to a totally different retiral plan bearing no relationship whatsoever with the then existing wage structure. The respondents, therefore, contend that the cut-off date was chosen as lst January, 1986 principally because that was the date from which the pension scheme as revised by the Fourth Central Pay Commission was made applicable to Government employees. It was further contended that it was felt undesirable to relate back the scheme to a date prior to 1st January, 1986 as that would cause considerable difficulties regarding calculation etc., of the pension payable to old employees for want of availability of relevant records. The respondents, therefore, contend that the submission that the pension scheme introduced by the Regulations is violative of Articles 14, 19 and 21 of the Constitution is wholly misplaced as this is a totally new scheme introduced for the first time and it is open to the Bank Authorities to decide the date from which it should be brought in force and the employees who should be covered thereunder. The respondents, therefore, contend that the writ petition is without merits and deserves to be dismissed with costs.;