1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 712-713 OF 2014
(Arising out of SLP(C) Nos.3106-3107 of 2012)
T.M. Sampath & Ors. … Appellants
:VERSUS:
Secretary, Ministry of Water Resources & Ors. … Respondents
WITH
CIVIL APPEAL NOS. 714-715 OF 2014
(Arising out of SLP(C) Nos.20425-20426 of 2011)
S.C. Awasthi & Ors.
:Versus:
… Appellants
Union of India & Ors.
AND
… Respondents
CIVIL APPEAL NO. 716 OF 2014
(Arising out of SLP(C) No.19102 of 2012)
P.N. Mishra … Appellants
:Versus:
Union of India & Ors. … Respondents
AND
WRIT PETITION (CIVIL) NO. 556 OF 2012
All India Navodaya VidyalayaStaff Association and Ors. .…Petitioners
:Versus:
Union of India & Ors. … Respondents
AND
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WRIT PETITION (CIVIL) NO. 518 OF 2012
S. Kannan and Ors. .…Petitioners
:Versus:
Union of India & Ors. … Respondents
JUDGME NT
Pinaki Chandra Ghose, J.
1. Leave granted in all the SLPs.
CIVIL APPEALS @ SLP(C) NOS.3106-3107 of 2012 AND SLP(C)
NOS.20425-20426 of 2011)
2. These appeals, by special leave, have been filed against the
judgment and order dated 06.01.2011 passed by the High Court of
Delhi at New Delhi in Writ Petition (Civil) No.3197 of 2010 and order
dated 18.03.2011 in Review Petition No.90/2011, by which the High
Court set aside the Order dated 08.02.2010 passed by Central
Administrative Tribunal in Original Application No.2037 of 2008 filed
by the appellants herein.
3. The facts of these appeals are briefly stated hereinafter.
Appellants herein are the employees of National Water Development
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Agency (“NWDA”) which was established as a Society in July 1982
and was registered under the Societies Registration Act, 1860. The
Society NWDA, which falls under the aegis and control, both
administrative and financial, of the Ministry of Water Resources, is
fully funded by the Government of India, headed by the Union
Minister for Water Resources as the President. The NWDA framed
Rules and Regulations for its smooth functioning. Whatever
emoluments have been prescribed for the Government servants by
the Central Government Office Memorandum (“O.M.”, for short) the
same apply mutatis mutandis to the employees of NWDA. By-law 28
of the NWDA also mandates that the rules and orders applicable to
the Central Government employees shall apply mutatis mutandis to
the employees of the NWDA subject to modification by the Governing
Body concerning service conditions and only in case of any doubt, the
matter has to be referred to the Governing Body for a decision. Byelaw
26(a) provides for the emoluments structure for all employees
that will be adopted by NWDA, with the approval of Ministry of
Finance (Department of Expenditure). Bye-law 28 provides that till
such time the NWDA frames its rules governing service conditions of
the employees, rules and orders applicable to Central Government
Employees shall apply mutatis mutandis, subject to such
modifications as made by NWDA from time to time.
4. As per the appellants, NWDA had implemented all the
recommendations of the Fourth Central Pay Commission from
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22.10.1986. The pay scales of the employees of NWDA were revised
as made applicable to Central Government employees. Pursuant to
the recommendation of the Fourth Central Pay Commission, Office
Memorandum dated 01-05-1987 was issued by the Ministry of
Personnel, Public Grievance and Pension, Department of Pensions
and Pensioners’ Welfare, for switch-over of employees from
Contributory Provident Scheme to Pension Scheme, according to
which all Contributory Provident Fund (CPF) Scheme beneficiaries,
who were in service of the Central Government on 1.1.1986, were
deemed to have come over to the Pension Scheme unless they
specifically opted out to continue under CPF Scheme. This Pension
Scheme was formulated by the Government under the 1972 Pension
Rules. The Office Memorandum dated 01-05-1987 reads as under:
“Change-over of employees from Contributory Provident
fund Scheme to Pension Scheme
(G.I., Dept. of Pensions & Pensioners Welfare, O.M.
No.4/1/87-P.I.C.I., dated the 1st May, 1987.)
The Central Government employees who are governed bythe Contributory Provident Fund Scheme (CPF Scheme)
have been given repeated options in the past to comeover to the pension scheme. The last such option wasgiven in the Department of Personnel and Training O.M.
No. F.3 (1)-Pension Unit/85, dated 6th June, 1985.
However, some Central Government employees still
continue under the CPF Scheme. The Fourth Central payCommission has recommended that all CPF beneficiaries
in service on January, 1, 1986, should be deemed to havecome over to the Pension Scheme on that date unless
they specifically opt out to continue under the CPF
Scheme.
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2. After careful consideration, it has been decided thatthe said recommendation shall be accepted and
implemented in the manner hereinafter indicated.
3.1 All CPF beneficiaries, who were in service on 1st
January, 1986, and who are still in service on the date ofissue of these orders (viz, 1st May, 1987) will be deemedto have come over to the pension Scheme.
3.2 The employees of the category mentioned above will,
however, have as option to continue under the CPF
Scheme, if they so desire. The option will have to be
exercised and conveyed to the Head of Office by30.09.1987, in the form enclosed if the employees wish
to continue under the CPF Scheme. If no option is
received by the Head of Office by the above date theemployees will be deemed to have come over to the
Pension Scheme.
1st
3.3 The CPF beneficiaries, who were in service on
January, 1986, but have since retired and in whose caseretirement benefits have also been paid under the CPFScheme, will have an option to have their retirement
benefits calculated under the Pension Scheme providedthey refund to the government, the Government
contribution to the Contributory Provident Fund and theinterest thereon, drawn by them at the time of settlementof the CPF Account. Such option shall be exercised latestby 30.9.1987.
3.4 In the case of CPF beneficiaries, who were in serviceon 1.1.1986, but have been since retired, and in whose
case the CPF Account has not already been paid, will beallowed retirement benefits as if they were borne on
pensionable establishments unless benefits settled underthe CPF Scheme.
3.5 In the case of CPF beneficiaries, who were in service
on 1.1.1986, but have since died either before retirement
or after retirement, the case will be settled in accordancewith para 3.3 or 3.4 above, as the case may be. Optionsin such cases will be exercised latest by 30.9.1987, bythe widow/widower and in the absence of widow/widowerby the eldest surviving member of the family who wouldhave otherwise been eligible to family pension under theFamily Pension Scheme if such scheme were applicable.
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3.6 The option once exercised shall be final.
3.7 In the types of cases covered by paragraphs 3.3 and
3.5 involving refund of Government’s contribution to thecontributory provident fund together with interest drawnat the time of retirement, the amount will have to be
refunded latest by the 30th September, 1987. If the
amount is not refunded by the said date, simple interestthereon will be payable at 10% per annum for period ofdelay beyond 30.9.1987.
4.1 In the case of employees who are deemed to comeover or who opt to come over to the Pension Scheme interms of paragraphs 3.3, 3.4 and 3.5, the retirement anddeath benefits will be regulated in the same manner as in
case of temporary/ quasi-permanent or permanent
Government servants, as the case may be, borne on
pensionable establishment.
4.2 In the case of employees referred to above, whocome over or are deemed to come over to the Pension
Scheme, the government’s contribution to the CPF
Account of the employees will be resumed by the
government. The employee’s contribution together withthe interest thereon at his credit in the CPF Account will
be transferred to the CPF Account to be allotted to him on
his coming over to the Pension Scheme.
4.3 Action to discontinue subscriptions/ contributions toCPF Account may be taken only after the last date
specified for exercise of option, viz. 30.9.1987.
5. A proposal to grant ex gratia payment to the CPF
beneficiaries, who retired prior to 1.1.1986, and to thefamilies of CPF beneficiaries who died prior to 1.1.1986,
on the basis of the recommendations of the Fourth
Central Pay Commission is separately under
consideration of the Government. The said ex gratiapayment, if and when sanctioned, will not be admissibleto the employees or their families who opt to continueunder the CPF Scheme from 1.1.1986 onward. (See Order
(4) in this Appendix)
6.1 These orders apply to all Civilian Central Governmentemployees who are subscribing to the Contributory
Provident Fund under the Contributory Provident Fund
Rules (India) 1962. In the case of other contributory
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provident funds, such as Special Railway Provident Fundor Indian Ordinance Factory Workers Provident Fund orIndian Naval Dockyard Workers Provident Fund, etc.
necessary orders will be issued by the respective
administrative authorities.
6.2 These orders do not apply to Central Governmentemployees who, on re-employment are allowed to
subscribe to Contributory Provident Fund. These orders
also do not apply to Central Government employeesappointed on contract basis where the contribution to theContributory Provident Fund is regulated in accordancewith the terms of contract.
6.3 These orders do not also apply to scientific and
technical personnel of the Department of Atomic Energy,
Department of Space, Department of Electronics and
such other Scientific Department as have adopted thesystem prevailing in the Department of Atomic Energy.
Separate orders will be issued in their respect in due
course (See Order (3) in this Appendix)
7.1 Ministry of Agriculture, etc. are requested to bringthese orders to the notice of CPF beneficiaries under
them, including those who have retired since 1.1.1986,
and to the families covered by paragraph 3.5 of theseorders.
7.2 Administrative Ministries administering any of the
Contributory Provident Fund Rules, other than
Contributory Provident Fund Rules (India) 1962, are alsoadvised to issue similar orders in respect of CPF
beneficiaries covered by those rules in consultation withthe Department of Pension and Pensioners’ Welfare.
8. These orders issue with the concurrence of the
Ministry of Finance, Department of Expenditure, vide their
U.O. No.2038/IS (Pres)/97, dated 13.4.1987.”
The above switch-over was applicable to all the Central Government
employees who were subscribing to the Contributory Provident Fund
under the Contributory Provident Fund Rules, 1962. As stated in
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paragraph 7.2 of the said O.M., this switch-over was not applicable
ipso facto to autonomous bodies under the Ministries of Central
Government who were subscribing to any other scheme other than
CPF Rules 1962, and therefore, it directed the administrative bodies
to issue similar orders for CPF beneficiaries, in consultation with
Department of Pensions and Pensioners’ Welfare. Subsequently the
employees of NWDA made representations to NWDA and Ministry of
Water Resources in view of the directions in the O.M., pursuant to
which the Ministry of Water Resources sought advice from the
Ministry of Finance (Department of Expenditure). The Finance
Ministry vide its letter dated 16.03.2000, advised autonomous bodies
to continue to follow the CPF Scheme or work out an annuity scheme.
Under paragraph 3 of the said letter it stated that introduction of
pension scheme on Government of India pattern should not be
agreed as a rule, and any exception in this regard would be referred
to the Department. The Governing Body of NWDA in its 3rd meeting
held on 31.3.1983 approved introduction of Contributory Provident
Fund scheme for the employees of NWDA on the lines of Contributory
Provident Fund Rules (India), 1962, as was clear in the appointment
orders and CPF settlement cases of deceased employees of NWDA
issued belatedly on 19/09/2007 and 23/12/2009. The NWDA did not
make any distinct CPF rules. As stated by the respondents, in the
year 1982 NWDA had framed contributory Provident Fund Rules,
which were duly approved by the Governing Body of NWDA. It
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rejected the proposal for introduction of Pension-cum-GPF-DCRG
Scheme in NWDA. The appellants sought Right to Information (“RTI”)
on 18.7.2000 whereupon the decision of Ministry of Finance dated
16.3.2000 and the decision taken by the Governing Body on
30.3.2000 that the implementation of the O.M. was rejected by the
Governing body, was appraised to them.
5. The appellants filed O.A. No.2037 of 2008 before the Central
Administrative Tribunal assailing the decision of the Governing Body
dated 30.03.2000 rejecting their request to switch-over to the
Pension Scheme and letter dated 16.3.2000 issued by the Finance
Ministry whereby the request of the appellants to switch-over to the
Pension Scheme pursuant to the O.M. dated 1.5.1987, had been
turned down.
6. Before the Central Administrative Tribunal (hereinafter
referred to as “the Tribunal”), when the case came up for hearing,
the respondents took a preliminary objection as to the cause of
action being barred by limitation on the ground that though the O.M.
is dated 01.05.1987, yet few members were associated in the 30th
meeting of the Governing Body having knowledge of the resolution
passed by the respondents on 30.03.2000 and that they cannot
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resort to a cause of action on the basis of RTI after 8 years, to file the
above OA. The Tribunal overruled the objection raised by the
respondents and after referring to various authorities, observed that
fundamental right of grant of pension does not attract limitation.
Moreover, on inaction the Government is precluded from raising the
hyper technical plea to defeat the rightful claim of applicants. The
order passed in 2000 was reiterated to the applicants in 2007 thus
the case of the applicants was good on merits. The Tribunal after
referring to the O.M., the bye-laws 26(a) & 28 and the decision of this
Court in Union of India v. S.L.Verma, (2006) 14 SCALE 56, held that
there was nothing in the language of clause 6.1 of the O.M. dated
01.05.1987, to suggest that the said O.M. does not apply to the
employees of autonomous bodies controlled by Central Government
and the said view finds no support from clause 7.2 of the O.M. The
advice dated 16.03.2000 of the Ministry of Finance to the Ministry of
Water Resources, at best, can be treated as an executive order and
as the same does not have retrospective effect, it has no application
to overrule the O.M. The Tribunal further held that the NWDA/Ministry
of Water Resources committed an error in seeking advice from
Ministry of Finance regarding implementation of the O.M. for the
reason that bye-law 26(a) provides that no approval of Central
Government is required to adopt scales of pay or allowances identical
to those adopted for corresponding posts as per order issued by
Central Government. As per bye-law 28, since no rules were framed
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by NWDA regarding switch-over of its employees, the O.M. squarely
applied to NWDA employees and the question of applicability of the
O.M. to the employees of the autonomous bodies is no longer res
integra by the decision of the Supreme Court in Union of India v.
S.L.Verma (supra). Accordingly, the Tribunal vide its order dated
08.02.2010, set aside the orders dated 16.03.2000 and 30.03.2000
impugned before it, allowed the O.A. No.2037 of 2008 and directed
the respondents to implement O.M. dated 01.05.1987 and treat the
employees of NWDA as covered under Pension Scheme in terms of
Central Civil Services (Pension) Rules, 1972 (“CCS Pension Rules”,
for short) w.e.f. 01.01.1986 with all benefits.
7. Aggrieved by the decision of the Tribunal, the respondents filed
writ petition under Article 226 and 227 of Constitution of India,
challenging the order 08.02.2010 passed by the Tribunal. The
respondents did not urge the issue of limitation before the High
Court. The question that arose for consideration before the High
Court was as to the applicability of the O.M. dated 01.05.1987 to the
employees of NWDA and whether reliance placed by the Tribunal
upon the decision in S.L. Verma’s case was correct. The High Court
after referring to clauses 6.1 and 7.2 of the O.M., held that the
employees of NWDA are not “Civilian Central Government
employees” as NWDA is an autonomous body working under
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administrative control of the Ministry of Water Resources; the
employees of NWDA are governed by National Water Development
Agency Contributory Fund Rules, 1982 and not Contributory Provident
Fund (India) Rules 1962, and in that view of the matter, they are
covered under third situation envisaged under clause 7.2 of the O.M.
dated 01.05.1987 and not under the two situations under clause 6.1
and clause 7.2 thereof. The High Court was of the opinion that the
Ministry of Water Resources ideally should have consulted the
Department of Pensions and Pensioners’ Welfare for issuance of
similar orders as O.M. dated 01.05.1987. However, the Ministry of
Water Resources consulted the Department of Expenditure, Ministry
of Finance in respect of the said matter instead of consulting the
Department of Pensions and Pensioner’s Welfare. As regards the
reason given by the Tribunal on by-law 28 of the NWDA is concerned,
the High Court opined that a bare reading of the provision makes it
clear that rules and orders applicable to the Central Government
employees shall apply mutatis mutandis to the employees of NWDA
only in cases where NWDA has not framed its own rules and
regulations. NWDA had framed its own CPF Rules in 1982 and thus,
by-law 28 has no role to play in the instant case. On careful
comparison of facts of S.L. Verma case with the facts of the case at
hand, the High Court observed that there are two material facts
which entirely distinguish S.L. Verma case from the case at hand.
First being that the O.M. dated 01.05.1987 was fully applicable to the
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employees in the S.L. Verma case while this is disputed in the present
case. The second fact being that the S.L. Verma case proceeds on the
premise that the recommendation of Fourth Central Pay Commission
pertaining to switching-over of the employees from Contributory
Provident Scheme to Pension Scheme was accepted by the employer
in that case. However, in the present case, it was specifically pleaded
by the appellants that the said recommendations of Fourth Central
Pay Commission were not accepted by the Governing Body of NWDA.
8. Learned counsel for the appellants claimed that O.M. dated
01.05.1987 was scrutinized by the Supreme Court in the case of S.L.
Verma (supra) and the present case is fully covered by the ratio of
said case. NWDA has not framed CPF Rules in 1982. There was no
reason for not placing on record the CPF Rules 1982 as approved by
the Governing Body before the Courts along with their pleadings.
Only at final stage they were included. NWDA has not brought the
said Rules to the knowledge of the appellants. The Rules have not
been approved by the Governing body and are not in operation. The
specific case of Respondent T.M. Sampath in review petition was that
the Respondents had not framed any CPF Rules 1982. No copy of the
said Rules was ever provided. As evident from the appointment
letters, at least 100 appointments on record proved that the
petitioners were governed by the CPF Rues of 1962. It was clearly
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mentioned under item 6 that they would be compulsorily required to
contribute to the CPF Rules 1962. These appointments were made
after the decision taken by the Governing Body on 31.3.1983. If the
NWDA Rules, 1982 were in operation, there was no reason for the
respondent authority not to mention in the offer of appointments that
the employees would be governed by NWDA Rules, 1982. All orders
of Government of India in respect of 1962 Rules were adopted by
NWDA from time to time. Under the bye-laws, the Governing Body is
empowered to make and amend any rules of NWDA. But no separate
CPF Rules, 1982 have ever been put up in prescribed format like
those of medical attendance, earned leave and recruitment rules
except introduction of CPF Scheme on lines of CPF Rules, 1962. Going
by the above facts the employees should get all the benefits which
Central Government Civilian Employees are entitled to. Under byelaw
28, only in case of doubt the matter is referred to Governing Body
for a decision, there is no provision to switchover or application of
Pension Rules as envisaged through O.M. Thus when there was no
working Rules and Regulation as to conversion from CPF to Pension
Scheme the order by the Pension Department passed on 01.05.1987
would be applicable. The petitioners are covered under clause 6.1 of
O.M. read in conjunction with clause 7.2 and in view of bye-law 28 the
O.M. will be applicable mutatis mutandis. NWDA had also not
circulated the O.M. amongst the employees. Thus they never
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submitted their option for switch over. Accordingly they are deemed
to have opted by implication of not giving option.
9. The Respondent acted in mala fide in implementing the second
O.M. for introduction of Death-cum-Retirement Gratuity Scheme
which was meant for Civilian Central government employees who
wanted to continue under CPF Rules 1962. It is submitted that six to
seven employees who were in a position to implement all the order
had been absorbed by taking pro-rata pension. The O.M. was equally
applicable o Autonomous bodies. The Government had failed to show
that it had refused to finance Autonomous bodies. It had acted
arbitrarily by rejecting the claim of Petitioners. The petitioner’s
Fundamental Rights under Article 14 and 16 had been violated by not
treating them at par with their similar counterparts in Central
Government, when the NWDA falls within the meaning of “State” as
defined in Article 12 of Constitution. The petitioners were in regular
service of Respondents after confirmation and thus they are entitled
to protection under Article 311 of Constitution. The Respondents
have acted wrongly by the fact that NWDA implemented all
4th
recommendations of Central Pay Commission except the
changeover of CPF beneficiaries to Pension scheme, as all top officers
who were responsible for implementing were on deputation and were
already covered under the Pension Scheme.
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10. The Respondents have not pursued the change-over of CPF to
Pension Scheme in a proper way. NWDA had never informed either
the Governing Body or Ministry of Finance that they are obligated to
bring in effect the change-over. Their contention that they placed the
issue on 30.3.2000 is per say illegal and arbitrary. The letter of
Department of Expenditure of 16.03.2000 only provided advice that
introduction to autonomous organization should not be made in
routine way. The Governing Body of NWDA is bound by legal fictions
for providing pension scheme. The legal fictions are created by
4th
reason of O.M. of 01.05.1987, acceptance of CPC
recommendations, bye-law 28 and sub rule (6)(iv) of Rule 209 of
General Financial Rules that service conditions of autonomous
organization receiving more than 50% of recurring expenditure by
way of grant in aid from Central Government should be treated at
par with their counterparts in Central Government. In view of the
decision in Sudhir vs. TISCO (1984) UJ SC 986, any rule which places
absolute discretion of an administrative authority the power to grant
or refuse pension or gratuity is arbitrary and violative of Article 14.
The petitioners are performing duties in the interest of State, and
they should be provided conditions and benefits of service in view of
the Court in Accountant General vs. Bakshi A (1962) SC 505. The
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denial of retrial benefits is denial of livelihood after superannuation
which is violative of Article 21.
11. The Respondents submitted that the same is wrong and that
there are two material facts which entirely distinguish S.L. Verma’s
case from the present case. They dismissed the contention stating
the same to be wrong and submitted that the organization had
framed its own CPF Rules, 1982 which were duly approved by the
NWDA Governing Body in its meeting held on 31.03.1983. The CPF
rules were made effective retrospectively from 15.07.1982. The
Respondents submitted that when the CPF Rules 1982 were framed
on the lines of the 1962 Rules, then mere mentioning of the wrong
year doesn’t confer any constitutional right that the employees would
be governed by CPF Rules 1962. It is also noteworthy that NWDA
came into existence in 1982. Posts in different grades were filled
either by direct recruitment or by deputation. For this reason, even
after NWDA CPF Rules were formulated, orders were issued
mentioning compulsory contribution to CPF under CPF Rules 1962.
Rule 10(2) of NWDA CPF Rules, 1982 says that contribution shall be a
percentage of the subscriber’s contribution or may be prescribed by
Government. Rule 11 provides that the agency will pay interest at
such rate as the Central Government prescribes on subscriptions to
CPF. It is submitted that all orders of Central Government were not
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automatically made applicable to employees of NWDA. After
acceptance of 4th pay recommendations the OM was issued extending
benefits to employees governed by CPF Scheme. As NWDA was
following its own CPF Rules, the benefits were extended by framing
its own Rules in consultation with nodal ministry. These rules were
approved by Governing Body in the 21st meeting. Since the rules and
regulation governing service conditions had been framed by NWDA,
bye-law 28 has no application.
12. As NWDA is a temporary organization all officer are also
temporary employees. No employees have been declared as
permanent. The service rendered in NWDA by its employees is non-
pensionable. The establishment expenditure of NWDA and for
implementing the mandate of NWDA, grant-in aid is provided by
Government. Without any specific approval of Ministry of Finance,
Department of Pension and Pensioner’s Welfare and Ministry of Water
Resources the NWDA cannot introduce the pension scheme on lines
of CCS Pension Rules. The petitioners have misled the Court that the
Government orders are adopted by the Respondent where rules are
not framed. The petitioners are covered under clause 7.2 in view of
the O.M., it was examined by Department of Pension and Pensioners
Welfare and Ministry of Finance. Both after examining the proposal
did not agree to the contention of the petitioners. The allegation, that
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NWDA had intentionally not circulated the O.M. is wrong. The
changeover to Pension Scheme was not automatic as NWDA was
following its own CPF Rules, 1982. The rules and regulations in
different autonomous bodies are different so the petitioners cannot
be equated at par with their counterparts working in Government
Departments and Autonomous Bodies as contended in Union of India
vs. Dr. Jai Dev Wig and Ors.
13. Based on the provisions in O.M. proposal for framing of DCRG
Rules for employees of NWDA was processed by the officers on
deputation from pensionable departments with help from
officers/employees. The officer and employees were fully involved
and they cannot claim that they were totally ignorant of the orders.
The changeover of employees cannot be suo-motto made applicable
for NWDA employees. The petitioners have failed to prove arbitrary
action of the respondents and hence Sudhir vs. TISCO, (1984) UJ SC
986, and Accountant General vs. Bakshi, AIR 1962 SC 505, has no
application. In view of the law laid down in Steel Authority of India
Ltd. vs. Dibeyendu Bhattacharya (2011) 2 SLR 243, petitioners have
no cause of action.
14. In light of the facts and circumstances of this case and the
submissions made by the learned counsel on both sides, it can be
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concluded that NWDA had framed its regulation the CPF Rules, 1982
and they were duly approved by the Governing Body of NWDA. As
NWDA is an autonomous body under the Ministry of Water Resources,
it has framed it own bye-laws governing the employees. It has been
time and again reiterated that the Court must adopt an attitude of
total non-interference or minimal interference in the matter of
interpretation of Rules framed by autonomous institutions. In
Chairman & MD, Kerala SRTC vs. K.O. Varghese and Others, (2007) 8
SCC 231, this Court held:
“KSRTC is an autonomous corporation established under
the Road Transport Corporation Act, 1950. It can regulate
the service of its employees by making appropriate
regulations it that behalf. The High Court is not correct in
thinking that there is any compulsion on KSRTC on the
mere adoption of Part III of KSR to automatically give all
enhancements in pension and other benefits given by the
State Government to its employees.”
Thus, as the appellants are governed by the CPF Rules1982, the O.M.
applicable to Central Government employees is not applicable to
them.
15. On the issue of parity between the employees of NWDA and
Central Government employees, even if it is assumed that the 1982
Rules did not exist or were not applicable on the date of the O.M. i.e.
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01.05.1987, the relevant date of parity, the principle of parity cannot
be applicable to the employees of NWDA. NWDA cannot be treated as
an instrumentality of the State under Article 12 of the Constitution
merely on the basis that its funds are granted by the Central
Government. In Zee Telefilms Ltd. & Another v. Union of India & Ors.,
(2005) 4 SCC 649, it was held by this Court that the autonomous
bodies having some nexus with the Government by itself would not
bring them within the sweep of the expression ‘State’ and each case
must be determined on its own merits. Thus, the plea of the
employees of NWDA to be treated at par with their counterparts in
Central Government under sub rule (6)(iv) of Rule 2009 of General
Financial Rules, merely on the basis of funding is not applicable.
16. Even if it is presumed that NWDA is “State” under Article 12 of
the Constitution, the appellants have failed to prove that they are at
par with their counterparts, with whom they claim parity. As held by
this Court in Union Territory, Chandigarh v. Krishan Bhandari, (1996)
11 SCC 348, the claim to equality can be claimed when there is
discrimination by the State between two persons who are similarly
situated. The said discrimination cannot be invoked in cases where
discrimination sought to be shown is between acts of two different
authorities functioning as State under Article 12. Thus, the employees
22
of NWDA cannot be said to be ‘Central Government Employees’ as
stated in the O.M. for its applicability.
17. Thus, by reason that the employees are governed by NWDA
CPF Rules, 1982, the O.M. dated 01.05.1987 is not applicable to the
appellant-employees. Further, as they have not established that they
are Central Government employees, at par with their counterparts,
their claim of parity with Central Government Employees is also
defeated.
18. In view of the discussion in the foregoing paragraphs, we do not
find any merit in these appeals which are accordingly dismissed.
There shall be no order as to costs.
WRIT PETITION (CIVIL) NOS. 556 & 518 OF 2012 ANDCIVIL APPEAL @ SLP(C) No.19102/2012)
19. Writ Petition (Civil) Nos. 556/2012 and 518/2012 and Special
Leave Petition (C) No.19102/2012 are other group of matters arising
out of same factual matrix and the point of contention in all three
matters is same. Writ Petition (Civil) No.556/2012 has been filed by
All India Navodaya Vidyalaya Staff Association and Writ Petition (Civil)
No.518/2012 has been filed by the Principals and other officials of
23
Jawahar Navodaya Vidyalaya and the employees of the Navodaya
Vidyalaya Samiti, for issuance of an appropriate writ in the nature of
mandamus or any other direction/s to the respondents to introduce
and implement CCS Pension Scheme, 1972 to all the employees of
the Navodaya Vidyalaya Samiti. SLP(C) No.19102/2012 has been filed
by Shri P.N. Mishra against the order dated 09.12.2012 passed by the
High Court of Jharkhand at Ranchi dismissing the writ petition filed by
him.
20. The facts necessary for disposal of these cases, stated briefly,
are that the idea of Jawahar Navodaya Vidyalaya was conceptualized
in 1985 and two model schools were started, one each at Jajjhar in
Haryana and Amravati in Maharashtra. However, the Jawahar
Navodaya Vidayala Samiti was established under the Registration of
Societies Act, 1960 on 28-02-1986. It is stated that Jawahar Navodaya
Vidyalaya schools have been established under the aegis of the
Ministry of Human Resource Development, Government of India. The
employees of Jawahar Navodaya Vidyalaya Samiti (“JNVS”)
demanded that they be brought under the GPF-cum-Pension Scheme
like their counterparts in other educational institutions, like Kendriya
Vidyalaya Samity (“KVS”), IITs, Sainik Schools, NCERT etc. However,
they have continued to be governed only by CPF Scheme and were
excluded from the Pension Scheme till 2004. It has been submitted
24
on behalf of the Petitioners/appellants that the Executive Committee
of JNVS had adopted a resolution which proposed the application of
Central Government Service Rules to its employees mutatis mutandis
till the Samiti framed its own rules. But the resolution has not been
shown to have been approved by the Government or District
Inspector of Schools. In any case, the demands of the employees of
JNVS have been supported as well as voiced by various Government
functionaries including Ministry of Human Resource and Development
through its letter to the Finance Ministry in 1998 seeking approval of
the Finance Ministry to introduce the Pension Scheme to JNVS, Y.N.
Chaturvedi Committee Report on Review of Management Structure
and Operating Mechanism of Navodaya Vidayala Samiti,
Parliamentary Committee on Functioning of Navodaya Vidayala
Samiti through its 154th, 184th and 198th Reports. All these
committees have strongly recommended that the employees of JNVS
be brought at par with the employees of Kendriya Vidayalaya and be
given similar service benefits, including pension under 1972 Rules.
However, the major hurdle in implementation of Pension Scheme to
the employees of JNVS has been the financial constraints as the
Finance Ministry never gave a go-ahead for such implementation. To
substantiate their claim, JNVS engaged an actuary to determine the
financial feasibility of implementing the Pension Scheme to JNVS
employees and it was found that if the employees contribution upto
31.03.2005 is transferred to the Pension Fund by 31.03.2005 and
25
annual contribution of @18% of salary on monthly basis from
01.04.2006, the implementation of the scheme is financially viable.
21. The Central Government formulated New Pension Scheme,
2004 for the employees of the JNVS in response to their repeated
demands. This New Pension Scheme was implemented from
01.01.2009. All the employees who had joined prior to the date of
implementation were given an option to either continue under the
CPF Scheme or to switch over to the New Pension Scheme. The cutoff
date for this New Pension Scheme was 01.01.2004; therefore, it
was not available to the employees who had joined the service prior
to cut-off date. However, the employees claim that New Pension
Scheme was also discriminatory as it is not at par with the Pension
Scheme under 1972 Rules. The existing employees were put under
Tier-II of the New Pension Scheme and the employer's contribution
was not available to them. Further, the New Pension Scheme did not
include any family pension, medical benefits and death gratuity.
22. Present Appellant in SLP No.19102/2012, Shri P.N. Mishra had
filed a Writ petition in the Jharkhand High Court seeking writ of
mandamus against the Government to implement the Pension
Scheme under 1972 Rules for the employees of the Jawahar
Navodaya Vidyalaya on the grounds of arbitrary discrimination
26
against them vis-Ã -vis employees of the Kendriya Vidyalaya and other
educational institution although run by autonomous bodies but very
much under the aegis of the HRD ministry whose employees are
benefitted by the Pension Scheme. The Petitioner therein also
challenged the New Pension Scheme notified in 2008 being
discriminatory and ultra vires of Articles 14, 19 and 21 of the
Constitution of India. The High Court found that there existed no
pension scheme for the employees of JNVS till the 2004 Scheme
which was notified in 2008. It noted that the New Pension Scheme
which was formulated by the Government in 2004 and notified in
2008 was in response to the demands of the employees of JNVS and
that cut-off date was the domain of the employer. It relied on the
judgment in All India Reserve Bank Retired Officers’ Association v.
Reserve Bank of India, (1992) Suppl. (1) SCC 664, wherein the
Supreme Court had held that when an existing scheme is liberalized,
the employer cannot ordinarily grant the benefit to one class of
employees and deny it to others by choosing arbitrary cut-off date.
However, when a completely new scheme is introduced, whole new
set of considerations are involved primarily being the financial
implications. On these grounds the High Court dismissed the Writ
petition stating that the Petitioner could not prove that NPS was
arbitrary or discriminatory.
27
23. Following issues are involved in these matters for our
consideration:
(i)
Whether O.M. dated 1-05-1987 applies to the employees of the
NVS?
(ii)
Whether the financial implication can be valid consideration for
denying pension?
(iii)
Whether the employees of the Navodaya Vidyalaya are entitled
to parity in pension with the employees of other autonomous
institutions like Kendriya Vidyalaya, NCERT, National Open
Schools and Tibetan Schools Association?
(iv)
Whether the New Pension Scheme, 2004 is arbitrary or
discriminatory?
24. Learned counsel appearing for the petitioners/appellants have
emphasized on the applicability of the Office Memorandum of the
Department Public Grievances and Pensions Department of Pensions
and Pensioners’ Welfare dated 01-05-1987 to the employees of JNVS
just like it was applied to the KVS. However, the learned Additional
Solicitor General has lucidly brought out the difference between the
position of employees of the organization with respect to said O.M.
She has pointed out that for application of the said O.M., following
three pre-requisites were to be fulfilled by the employees :
(i)
They must be Central Government employees,
28
(ii) They must be in service on 01-01-1986, and
(iii) They must be CPF beneficiaries as on 01-01-1986.
25. The Respondents have contended that the JNVS was not in
existence at the time of cut-off date applicable under the O.M. dated
01.05.1987 and also that the employees of the JNVS cannot claim as
of a right to be governed by the Central Civil Service (Pension) Rules,
1972 as they are not employees of the Central Government.
26. It is undisputed fact that the Navodaya Vidyalaya Samiti was
established and registered under the Societies Registration Act, 1860
only on 28-02-1986, so its employees cannot be in service as on 0101-
1986. Thus, while first condition is disputed, the second condition
is clearly not fulfilled. In contrast, the KVS was established in 1965.
Therefore, we find merit in the argument of the learned Additional
Solicitor General that the said O.M. cannot apply to the NVS
employees.
27. Further, it was submitted by the learned counsel for the
petitioners/appellants that the only reason for not providing pension
as per 1972 Rules has been the financial implications which becomes
apparent from the letter of the Finance Ministry dated 05-02-1999 to
the HRD Ministry in which the Finance Minister has clearly pointed out
29
the excessive liability that the Government would have to incur in
case it extends pension scheme to the JNVS employees and
suggested that an annuity scheme may be formulated with LIC by
employees contribution alone without any liability of the Government.
Also the Finance Ministry has expressed its concern that extending
such pension benefit on the grounds of parity would mean that all the
autonomous bodies under Government of India would make similar
demands and that would be financially infeasible.
28. In support of these submissions, learned counsel for the
petitioners/appellants has cited plethora of judgments wherein it was
held that fundamental rights cannot be violated on the grounds of
financial constraints and that the right to education is a fundamental
right which cannot be jeopardized by compromising with quality of
teachers in schools due to poor post service benefits. Reliance was
also placed on Municipal Council, Ratlam v. Vardichand (1980) 4 SCC
162, All India Imam Organization v. Union of India, (1993) 3 SCC 584,
and Kapila Hingorani v. State of Bihar, (2003) 6 SCC 1.
29. Learned Additional Solicitor General appearing for the
respondents argued that none of the cases relied upon by the
Petitioners/appellants involves right to pension and that Pension is
not a Fundamental Right. She cited Associate Banks Officers’
30
Association v. State Bank of India and Ors., 1998 (1) SCC 428,
wherein this Court observed that many ingredients go into shaping of
the wage structure of any organization, including the economic
capability of the employer. Taking simplistic approach of granting
higher remuneration to workers of one organization because another
organization had granted its employees, may lead to undesirable
results and the application of the doctrine would be fraught with
danger and may seriously affect the efficiency and functioning of the
organization. She also relied on A.K. Bindal v. Union of India, (2003) 5
SCC 163, which also states that the financial capacity is a relevant
consideration in deciding revision of pay scales. Therefore, the
learned Additional Solicitor General concluded that financial capacity
of the employer is an important factor which cannot be ignored while
fixing the wage structure and thus, the demands of the employees of
NVS are not founded on sound principle of law.
30. The learned counsel for the petitioners/appellants have argued
that Right to equality is guaranteed under Article 14 of the
Constitution which incorporates the principle of equal pay for equal
work and same has been violated in present case by granting pension
under 1972 Pension Rules to the employees of some autonomous
educational institutions like KVS, NCERT etc. and denying that benefit
to the employees of NVS. The learned Counsel pointed out that parity
31
in pay and pension be granted, particularly, between the employees
of NVS and the employees of KVS as both these institutions are run
by autonomous bodies registered under Societies Registration Act,
1860 under the aegis of the Ministry of Human Resource
Development, Government of India and are fully funded by the
Government of India. Also, that the working hours of the teachers in
NVS are more as compared to the KVS and the JNVS being fully
residential schools, the burden on teaching and non-teaching staff is
much more than Kendriya Vidalayas which are only day schools. The
learned Counsel has brought to the fore recommendations of various
committees and authorities which have supported the cause of the
Petitioners, namely, Review Committee set up by the Ministry of HRD
under Chairmanship of Shri Y.N. Chaturvedi to review the
Management Structure and Operating Mechanism of JNVS, 154th
report of the Department Related Parliamentary Committee on
functioning of JNV which was laid before Lok Sabha on 02-03-2005,
Cabinet Note prepared by the Ministry of HRD in March 2006 which
specifically pointed out the need to extend the Pension Scheme
under 1972 Rules to the employees of JNVS, 198th Report of the
Department Related Parliamentary Committee submitted on 17-082007
which strongly recommended for implementing the Pension
Scheme to the employees of JNVS. Even the Ministry of Labour and
Employment by its O.M. dated 07-09-2006 to the Ministry of HRD,
recommended extension of Pension Scheme to NVS.
32
31. Learned Additional Solicitor General, appearing on behalf of the
respondents submitted that the issue of extending Pension Scheme
of 1972 to the NVS employees is an administrative decision which is
made keeping in mind various determining factors and that it cannot
be said all schools and educational institutions constitute one class.
She cited All India Sainik Schools Employees Association v. Defence
Minister-cum-Chairman Board of Governors, Sainik School, 1988 (1)
Supp SCC 205, wherein the Sainik School employees had sought writ
of mandamus to extend all service benefits and advantages to them
as are applicable to the employees of the KVS. In the said case the
Supreme Court dismissed the petition on the ground that the
employees of Sainik Schools cannot be considered employees of the
Central Government nor can they be treated at par with KVS
employees.
32. The Respondent also relied on S.C. Chandra v. State of
Jharkhand, (2007) 8 SCC 279, wherein this Court held that the
doctrine of ‘equal pay for equal work’ is applicable only when there is
total identity in two groups of employees. Further, in A.K. Bindal
(supra), this Court has held that employees of Government
companies are not Government servants. It is, therefore, submitted
on behalf of the respondents that the petitioners/appellants are
33
employees of the autonomous body that is Navodaya Vidyalaya
Samiti which has all the control on the organization.
33. It may be expedient to note what this Court observed in the
case of S.C. Chandra (supra):
“…fixing of pay scales by the Courts by applying the
principle of equal pay for equal work upsets the highconstitutional principle of separation of powers betweenthree organs of the state. Realizing this Court has in
recent years avoided applying the principle of equal payfor equal work, unless there is complete and wholesomeidentity between the two groups (and there too the mattershould be sent for examination by an expert committeeappointed by the Government instead of the Court itselfgranting higher pay)”
34. Further, the learned counsel appearing for the Appellants have
contended that the pension is not a bounty given to the employee at
the will of the Government but a valuable right vested in the
employee and a right to receive pension is a “property” under Article
31 of the Constitution of India as was held in State of Kerala v. M.
Padmanabhan Iyer, (1985) 1SCC 429. Further, the learned Counsel
for the Appellants submitted that the pension is that part of the
salary which was not given to the employee during his/her service
but was kept for payment as pension, so now the employer cannot
deny the employees what is rightfully employees’ because, if there
was no pension to be paid, employees would have had higher salary.
34
35. Learned Additional Solicitor General has submitted that the
right to pension is not an inherent right of every employee but it
flows from the rules of the Government. If the employee is entitled to
pension as per the rules of the Government, his/her pension cannot
be withheld by a simple executive order (Deokinandan Prasad v.
State of Bihar & Ors. (1971) 2 SCC 330). Similarly, it is submitted that
if the employee is not entitled to the pension as per the rules
governing his/her service conditions, he/she cannot claim it as of
right inherent to the employment.
36. Further, the Counsel for the appellants’ argument regarding the
pension being part of the salary is accepted as the principle
governing pension but it cannot be applied to the present case as the
employees in the present case were not promised any pension at the
time of their appointment and no deductions were made during their
service towards any pension fund. Thus, it cannot be said that the
employees have been denied what was rightfully theirs.
37. The Appellants had raised the issue of the New Pension Scheme
which was notified in 2008 and whose cut-off date was 01.01.2004 in
the writ petition and the SLP, however, it wasn’t pressed during the
arguments. In any case, they have claimed that the New Pension
Scheme, is also discriminatory and that the said cut-off date is
35
arbitrary. The learned counsel for the appellants submitted that the
New Pension Scheme is not at par with the Pension Scheme under
1972 Rules as it does not have provisions for death gratuity, family
pension and medical benefits. Also, the two tier system of the New
Pension Scheme was challenged.
38. We have carefully perused the judgment of the High Court of
Jharkhand in W.P. 4946 of 2008 against which SLP(C) No.19102/2012
has been filed and we concur with the view of the High Court. The
cut-off date is a domain of the employer and so the introduction of
new scheme of pension will be done considering all the relevant
factors including financial viability of the same. No interference is
warranted unless there is gross injustice is perpetrated. The
Appellants have failed to prove any arbitrariness and discrimination
with respect to the New Pension Scheme.
39. In the light of the discussion in the foregoing paragraphs, the
writ petitions and the appeal are also dismissed. However, there shall
be no order as to costs.
….....…..…………………..J.
(Anil R. Dave)
36
….....…..…………………..J.
(Vikramajit Sen)
...........…………………….J.
(Pinaki Chandra Ghose)
New Delhi;
January 20, 2015.
