D.S Nakara v. Union of India

CourtSupreme Court of India
Name of the caseD.S Nakara v. Union of India
Citation1983 AIR 130, 1983 SCR (2) 165
Year1983
AppellantD.S Nakara & Ors.
DefendantUnion of India
BenchJustices D.Y Chandrachud, Baharul Islam, D.A Desai, Y.D Tulzapurkar, O.C Reddy

Introduction

Article 14 of the Indian Constitution provides that equals should be treated equally and differentiation between them with no reasonable basis violates. This case is about the pensioners who were excluded from the benefit of increased benefit of pension because of their retirement date. They challenged the statute that prohibits them from the benefit because the discrimination is unreasonable.

Background

At first the age of retirement was recommended 58 years by the First Central Pay Commission and scale of pension was recommended to be 1/80 of the total pay of each year. Means Rs. 8000 per year of pension is payable for 35 years of service. And while accepting the recommendation Government of India raised it to Rs. 8100 which would earn a monthly pension of Rs. 675. The second Central Pay Commission again said that the age of retirement would be same but it did not recommend any changes in retirement benefits and said that in future any improvement to be made. After this a new commission to be made by the government i.e. Administrative Reforms Commission (ARC) and it took the note that cost of living had been increased and possibility of savings has been gone down. It observed that the quantum of pension was very low and consequently quantum of pension to be raised to 3/6 from 3/8 and the ceiling should be raised from Rs. 675 to Rs. 1000 per month. before any step taken by the government the Third Central Pay Commission was set up and on a reference by them, the Government of India decided not to amend the terms of reference.

With regard to the future pensioners the third Pay Commission while retiring that the stage of superannuation should continue to be 58 years further recommended that no change in the existing formula for computing pension is considered necessary. The only important recommendation worth noticing is that the Commission recommended that the existing ceiling of maximum pension should be raised from Rs. 675 to Rs. 1, 000 p.m. and the maximum of the gratuity should be raised from Rs. 24, 000 to Rs. 30, 000.

By a Memorandum dated May 25, 1979 the Government of India liberalised the formula for computation of pension in respect of employees governed by the Central Civil Services (Pension) Rules, 1972 and made it applicable to employees retiring on or after March 31, 1979. By another Memorandum issued on September 23, 1979 it extended the same, subject to certain limitations, to the Armed Forces’ personnel retiring on or after April 1, 1979.

Facts

Petitioners 1 and petitioner 2 both had retired in the year 1972 from the Central Civil Service and the Armed Forces’ service respectively, and petitioner No. 3, a registered society advocating the cause of pensioners all over the country, challenged the validity of the above two memoranda because the benefit of the new statute was available to the only ones who retired after the above mentioned date but not to those who were retired before the above mentioned date.

The counsel for the petitioner advocated that the pensioners are entitled to receive the pension benefit under the statute and the date of the retirement is irrelevant cause for the exclusion of the benefit and retirement and there cannot be a mini-classification within this class. This different treatment based on only specified date of retirement is violative of article 14 of the constitution as the choice of specified date is wholly arbitrary and the classification based on the accidental circumstance of retirement before or after to the specified date is invalid and that the scheme of liberalisation in computation of pension must be uniformly enforced with regard to all pensioners.

While the counsel for the respondent advocated that the classification based on the date of retirement is valid for the purpose of granting pensionary benefits because the specified date is an integral part of the scheme of liberalisation and the Government would never have enforced the scheme devoid of the date. And Doctrine of Severability cannot be imposed here for differentiate the specified date from the scheme because it would impact the class of pensioners covered by the scheme, it will increase the class and when the legislature has expressly defined the class then it would be outside the judicial function if it increase the class. And in almost every case there are some category and class already set up according to the scope of provisions for maintaining the law. This scheme has financial implications so the court cannot make it retroactive. And if more persons are included in the scheme then the share will automatically decrease. And in the last the third petitioner has no locus standi in the case.


Issues

  • Is the date of retirement a relevant consideration for eligibility and computation of pension?
  • Would differential treatment to pensioners related to the date of retirement contained the element of discrimination liable to be declared unconstitutional as being violative of Article 14?

Related Provisions

  • Article 14 of the Constitution:

It talks about the equality; that the state shall not deny equality and give equal protection of law to everyone and prohibit the discrimination on the grounds of religion, race, caste, sex or place of birth.

  • Article 32 of the Constitution:

This give the power to enforce Fundamental Rights to the citizens; that they can move to Supreme Court if their Fundamental right is violated. Ans the Supreme Court can issue directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate, for the enforcement of any of the rights conferred by this Part.

  • Article 38(1) of the Constitution:

State to secure a social order for the promotion of welfare of the peopleby securing and protecting social order in which justice, social, economic and political, shall inform all the institutions of the national life.

  • Article 39 of the Constitution:

“Certain principles of policy to be followed by the State: The State shall, in particular, direct its policy towards securing

(a)that the citizens, men and women equally, have the right to an adequate means to livelihood;

(b)that the ownership and control of the material resources of the community are so distributed as best to sub serve the common good;

(c)that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;

(d)that there is equal pay for equal work for both men and women;

(e)that the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength;

(f)that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment.”

  • Article 41 of the Constitution:

“Right to work, to education and to public assistance in certain cases The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.”

  • Rule no. 34 of the Central Service (pension) Rules, 1972 – Rule 34

Average Emoluments:

Average emoluments shall be determined with reference to the emoluments drawn by a Government servant during the last 1[ten months] of his service. 

NOTE 1. – If during the last 1[ten months] of his service a Government servant had been absent from duty on leave for which leave salary is payable or having been suspended had been reinstated without forfeiture of service, the emoluments which he would have drawn had he not been absent from duty or suspended shall be taken into account for determining the average emoluments :

    Provided that any increase in pay (other than the increment referred to in Note 3) which is not actually drawn shall not form part of his emoluments.

NOTE 2. – If, during the last 1[ten months] of his service, a Government servant had been absent from duty on extraordinary leave, or had been under suspension the period whereof does not count as service, the aforesaid period of leave or suspension shall be disregarded in the calculation of the average emoluments and equal period before the 1[ten months] shall be included.

NOTE 3- In the case of a Government servant who was on earned leave during the last ten months of his service and earned an increment, which was not withheld, such increment though not actually drawn shall be included in the average emoluments:

    Provided that the increment was earned during the currency of the earned leave not exceeding one hundred and twenty days or during the first one hundred and twenty days of earned leave where such leave was for more than one hundred and twenty days.

Related Cases

Maneka Gandhi v. Union of India[i]:

In this case the scope of Article 14 was examined and Bhagwati, J., stated, “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 14like a brooding omnipresence.”

Sriram Krishna Dalmia v. Sri Justice S.R. Tendolkar and Others[ii]:

In this case, the court held that there can be classification in making scheme or laws but those classification must be reasonable one. The classification may be founded on differential basis according to objects sought to be achieved but there is contained this that there ought to be a nexus means a causal connection between the basis of classification and object of the statute under consideration. Article 14 forbids class legislation but it does not forbid reasonable classification for the purpose of legislation. And two tests are there to check the reasonable classification;(i) 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 differentia must have a rational relation to the objects sought to be achieved by the statute in question.

Ramana Dayaram Shetty v. The International Airport Authority of India &Ors[iii].:

In this case court held that if government take any discriminatory action against any class or individual then that action 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.

State of Punjab &Anr. V. Iqbal Singh[iv]

In this case the court was of the view thatpension 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 and  the grant of pension does not depend upon any one’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.

Jaila Singh &Anr. V. State of Rajasthan &Ors[v]:

In this case the Court struck down the provision as discriminatory the division of pre-1955 and post-1955 tenants for the purpose of allotment of land made by the Rules under the Rajasthan Colonisation Act, 1954 observing that the various provisions indicate that the pre-1955 and post-1955 tenants stand on the same footing and therefore do not form different classes and hence the division was held to be based on wholly irrelevant consideration.

Judgment

The Supreme Court in this case held that the Article 14 of the Constitution and this provision strikes at arbitrariness in State action and ensures fairness and equality of treatment. 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. Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation. The classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are leftout of the group. And the classification must have some rational nexus with the object which is to be achieved by the statute. A discriminatory action 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.

This is very clear and undoubtable that all the pensioners for payment of pension from a class. When the State considered it necessary to liberalise the pension scheme in order to expand social security in old age to government servants it could not grant the benefits of liberalisation only to those who retired subsequent to the specified date and deny the same to those who had retired prior to that date. The division which classified the pensioners into two classes on the basis of the specified date was devoid of any rational principle and was both arbitrary and unprincipled being unrelated to the object sought to be achieved by grant of liberalised pension and the guarantee of equal treatment contained in Art. 14 was violated.

This would clearly imply that the pre-liberalised scheme did not provide adequate protection in old age, and that a further liberalisation was necessary as a measure of economic security. The government also took note of the fact that continuous upward movement of the cost of living index and diminishing purchasing power of rupee necessitated upward revision of pension. With this underlying intendment of liberalisation, it cannot be asserted that it was good enough only for those who would retire subsequent to the specified date but not for those who had already retired. So, the Court held that the rule 34 of the central service pension rules 1972 as unconstitutional on the ground that the classification is made by it between pensioners are arbitrary and it had no legal nexus.

Analysis

In this case the court expands the horizons of socio-economic justice and stuck down the statute which discriminate between the same class of people on an unreasonable ground. It also emphasises that all the statutes or laws must have some rational nexus with the object of the law. The principle aim of the state is to eliminate in income, status and standard of the life. The basic frame work of socialism is to provide a proper standard of life to the people, especially security from cradle to grave. Amongst there, it envisaged economic equality and equitable distribution of income. This is a mix thought of Marx and Gandhi, though this is slightly leaning towards the Gandhian socialism, where there is exploitation of slave and unreasonable discrimination amongst the equals, are nowhere found and finally the society can become a welfare society.

References

[i][1978] 2 SCR 621

[ii][1959] SCR 279

[iii][1973] 3 SCR 1014

[iv][1991] SCR 2 790

[v][1975] supp. SCR 428

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