High CourtDivision Bench2007-01-31Referred to the Larger Bench for constitutional...

Principal Secretary to Government Finance & Planning Department v. A.P. Pensioners Samaj and Ors.

Case / Petition Number:Civil Appeal Nos. 5367-5368 of 2005

Neutral Citation:SUPREME COURT REPORTS (2007) 2 S. C. R.

Case Details & Bench

Court: High Court
Hon'ble Judges: S. B. Sinha
Markandey Katju
Judgment Date: 2007-01-31
Court Decision / Holding: The Court did not decide the substantive entitlement but referred the matter to a larger Bench for resolution and consideration of the need for formal amendments to the AP Revised Pension Rules.
Final Disposition: Referred to the Larger Bench for constitutional resolution of the issues.

Parties to the Case

Appellants / Petitioners

Principal Secretary to Government Finance & Planning Department

Respondents

A.P. Pensioners Samaj and Ors.

Legal Representation & Advocates

Counsels for Petitioners

• H.S. Guru Rao
• D. Bharathi Reddy
• P. Vinay Kumar
• Sneha Bhaskaran

Counsels for Respondents

• R. Sundaravaradan
• R.N. Keshwilli
• Ramlal Roy
• Chava Badri Nath Basu
• C.M. Angadi
• K.P. Singh
• Bimal Roy Jad

Case Synopsis & Summary

These appeals challenge an Andhra Pradesh High Court ruling on pension revision under the AP Revised Pension Rules, 1980 in the wake of GO Ms. No. 87, Finance dated 25 May 1998. The respondents-pensioners sought extension of GO 87’s revised fixation to all pensioners irrespective of retirement date, and arrears from retirement. The Government contended that the revised fixation, based on last drawn pay, applies only to those who retired on or after 25 May 1998 and that a cut‑off date is permissible. The Administrative Tribunal held entitlement to re‑fixation under GO 87 but denied arrears prior to the GO date. The High Court upheld this order, and the State challenged it in appeal. In this Court, the appellants argue that the pension reform scheme should be universally applicable and that the cut‑off should be removed or modified, contending that the Court’s earlier conflicting decisions on pre‑retirement pension rights require authoritative resolution. The respondents rely on earlier rulings supporting the cut‑off and limitation on entitlement. The Court, recognizing an apparent conflict, directs that the matter be referred to a larger Bench for consideration of the issues, including whether a formal amendment to the AP Revised Pension Rules is necessary to extend benefits to pre‑retirement pensioners and the correct cut‑off date.

Provisions of Law Cited

AP Revised Pension Rules, 1980G.O.Ms. No. 87, Finance dated 25 May 1998

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellants contend that GO 87’s revised pension fixation should be extended to all pensioners, regardless of retirement date, with arrears from retirement if warranted. They challenge the propriety of a fixed cut‑off date and urge that the scope of the amended pension rules be clarified, arguing that conflicting precedents necessitate a larger Bench to harmonize the law and determine the need for formal amendments to the AP Revised Pension Rules.

Contentions of Respondents

The respondents argue that GO 87’s revised fixation applies only to retirees who left service on or after 25 May 1998 and that a valid cut-off date is within the State’s power. They rely on a line of decisions to support the cut‑off and oppose extending benefits to pre‑retirement pensioners or awarding arrears prior to GO 87. They emphasize the need to resolve the conflict among authorities and defer to the government’s prerogative in pension fixation.

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
D.S. Nakara v. Union of India	(1983) 1 SCC 305	Positive	Constitution Bench held that employees who retired before the pension scheme came into operation were entitled to the benefit of the pension scheme.
V. Kasturi v. Managing Director, State Bank of India, Bombay and Anr.	(1998) 8 SCC 30	Distinguished	Distinguished Nakara; held that enhancement is available only to those already receiving pension at retirement, via post-retirement amendments.
TN Electricity Board v. R. Veerasamy and Ors.	(1999) 3 SCC 414	Mentioned Only	Noted as part of a line of decisions suggesting a contrary view on post-retirement pension enhancements.
State of West Bengal and Anr. v. West Bengal Govt. Pensioners' Associations and Ors.	(2002) 2 SCC 179	Mentioned Only	Cited amid conflicting decisions; described as part of the broader debate to be resolved by a larger Bench.

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Extracted Judgment Text

Exact text extracted from official judgment records.

_·.) !_ ~f- # THE PRINCIPAL SECRET ARY TO GOVERNMENT FINANCE & PLANNING DEPARTMENT A _v._ ## A.P. PENSIONERS SAMAJ AND ORS. JANUARY 31, 2007 B [S.B. SINHA AND MARKANDEY KA TJU, JJ.] ## _Service Law:_ c _Pension-Revision of-Cut off date-Enhancement of pension from a specified date-Refixation of pension-Whether to be effective from the specified date or from the earlier date from which the pensioner was getting the pension-Whether any formal amendment to A.P. Revised Pension Rules, 1980 was necessary consequent to issuance of A.P. G.O.Ms. No. 87, Finance dated 25.5.1998, if the retired employees wanted to get benefit of the said_ D _G.0.-There being conflict in decisions, matter referred to larger BenchA.P. Revised Pension Rules, I 980-G. 0. Ms: No. 87, Finance dated 2 5. 5. 1998._ _D.S. Nakara_ v. _Union of India,_ (1983) 1SCC305; _V. Kasturiv. Managing Director, State Bank of India, Bombay and Anr.,_ (1998) 8 SCC 30; _T.N Electricity Board_ v. _R. Veerasamy and Ors.,_ (1999) 3 SCC 414; and _State of_ E _West Bengal and Anr._ v. _West Bengal Govt. Pensioners' Associations and Ors.,_ (2002) 2 sec 179, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5367-5368 of 2005. _'(_ F From the Final Common Judgment and Order dated 23.12.2003 of the High Court of Judicature, Andhra Pradesh at Hyderabad in W.P. Nos.16719 and 18490/2003. -· H.S. Guru Raja Rao, D. Bharathi Reddy, P. Vinay Kumar and Sneha Bhaskaran for the Appellant. R. Sundaravaradan, R.N. Keshw!ll)i, Ramlal Roy, Chava Badri Nath Basu, · C.M. Angadi, K.P. Singh and Bimal Roy Jad for the Respondents. The Order of the Court was delivered by 37 38 SUPREME COURT REPORTS (2007] 2 S. C.R. A These appeals have been filed .against the impugned judgment dated 23.12.2003 of the Andhra Pradesh High Court in Writ Petition Nos. 16719 and 18490of2003. The respondents in this appeal had filed O.As before the Andhra Pradesh Administrative Tribunal seeking a direction to the State Government B to extend the benefits of G.O.Ms. No.87, Finance & Planning (FW.Pen. I) Department, dated 25.5.1998 to all the pensioners irrespective of their date of retirement and also to compensate the loss sustained by the applicants. It was contended therein that the pension was calculated on the basis of ten months average pay and the petitioners have been getting the said pension C ever since the date of their retirement. However, the Government issued G.0.Ms. No.87 dated 25.5.1998 revising the fixation of pension on the basis of the last drawn pay treating it as emoluments for the purpose of pension. Hence, it was contended that their pensions had to be re-fixed in terms of G.0.Ms. No.87 dated 25.5.1998 and the same should be released from the date of their respective retirements. The Tribunal by its order held that though D the pensioners are entitled for re-fixation of their pension in terms of G.O. Ms.No.87 dated 25.5 .1998 they were not eligible for any arrears that accrued prior to 25.5.1998. The said order was challenged by the State Government in the Writ Petitions. The State Government contended that the revised fixation of pension E on the basis of last drawn pay was applicable to those pensioners who retired on or after 25.5.1998 and it cannot be made applicable to the persons who retired prior to that date and that the Government has power to fix a cut off date, which cannot be interfered with by the Court. Learned counsel for the State Government referred to several decisions of this Court in support of his· _p_ contention. '• The High Court dismissed the writ petition of the State Government and held that the pensioners who were already drawing the pensions cannot be denied the revision of pension on the basis of the revised formula. Thus, the High Court upheld the order of the Tribunal, including the direction that the G pensioners cannot claim any arrears from a date anterior date to the G.O. 25.5.1998. Aggrieved, this appeal has been filed. We have heard the learned counsel for the parties and perused the various decisions cited before us. H A Constitution Bench of this Court in _D.S. Nakara_ v. _Union of India,_ **PRINCIPAL SECRETARY TO GOVERNMENT FINANCE & PLANNING DEPARTMENT** _**v.**_ **A.P. PENSIONERS SAMAJ 39** [1983) **1** sec 305 has held that the employees who retired before coming into A operation of a pension scheme were also entitled to the benefit of the said pension scheme. However in _V. Kasturi_ v. _Managing Director, State Bank of India, Bombay and Anr.,_ [ 1998) 8 SCC 30, the aforesaid decision was distinguished, and it was held (vide paragraphs 22 and 23) that if an employee was already **B** getting some pension at the time of his retirement then he would become eligible to get enhanced pension, if such enhancement in the pension is made by an amendment to the pension scheme subsequent to his retirement. However, if the retired employee was not getting any pension at all when he retired, he would not be entitled to any pension if a pension scheme is C introduced subsequent to his retirement. _,_ Some subsequent decisions of this Court seem to have struck a different note wherein it appears to have been held that even if a retired employee was getting some pension at the time of his retirement, he will not get the benefit of any enhancement in the pension subsequent to his retirement vide _T.N._ D _Electricity Board_ v. _R. Veerasamy and Ors.,_ [1999) 3 SCC 414, _State of West Bengal and Anr._ v. _West Bengal Govt. Pensioners' Associations and Ors.,_ (200212 sec I 79. In view of apparent conflict in these decisions, we are of the opinion that the matter requires consideration by a larger Bench of this Court. Another E point which requires consideration by a ·larger Bench is whether any formal amendment to the A.P. Revised Pension Rule, 1980 was necessary, consequent to issue of the orders issued in G.O.Ms. No.87, Finance, dated 25.5.1998, if the retired employees wanted to get the benefit of the latter. Let the papers of this case be placed before the Chief Justice for the F constitution of the larger Bench. RP. Referred to the large Bench. \