IMPORTANT POINT
A service rule which seeks to reverse from an anterior date a benefit which has been granted or availed can be assailed as being violative of Articles 14 and 16 of the Constitution to the extent it operates retrospectively.

Headnote:Service Law-Constitution of India-Art. 309, Proviso-Power to make rules under-A rule which operates in futuro, to govern future rights of those in service-Cannot be assailed on ground of retrospectivity as being violative of Arts. 14 & 16 of Constitution-A rule which seeks to reverse from an anterior date a benefit granted or availed-Can be challenged as being violative of Arts. 14 & 16 to the extent it operates retrospectively. (Para 16)
       Railways-Indian Railway Establishment Code, Vol. II (Fifth Reprint)-Rule 2544-Notifications Nos. G.S.R. 1143(E) and G.S.R. 1144(E) dated 5.12.1988-Validity of-By Notification No. 1143(E), Rule 2544 amended w.e.f. 1.1.1973-Notification No. 1144(E) amended the Rule w.e.f. 1.4.1979-Quantum of percentage of Running Allowance for purpose of retirement and other benefits reduced from 75 to 45 w.e.f. 1.1.73 and 55 from 1.4.1979 onwards-Respondents being employees who had retired after 1.1.1973 and before 5.12.1988-They are entitled to have their pension computed in accordance with Rule 2544-Notifications in so far as they have been given retrospective operation are violative of rights then guaranteed under Art. 19(1) and 31(1) of Constitution-Notifications being unreasonable and arbitrary are also violative of Arts. 14 and 16.
       Held : The respondents in these cases are employees who had retired after January 1, 1973 and before December 5, 1988. As per Rule 2301 of the Indian Railway Establishment Code they are entitled to have their pension computed in accordance with Rule 2544 as it stood at the time of their retirement. At that time the said rule prescribed that Running Allowance limited to a maximum of 75 of the other emoluments should be taken into account for the purpose of calculation of average emoluments for computation of pension and other retrial benefits. The said right of the respondents employees to have their pension computed on the basis of their average emoluments being thus calculated is being taken away by the amendments introduced in Rule 2544 by the impugned notifications dated December 5, 1988 inasmuch as the maximum limit has been reduced from 75 to 45 for the period from January 1, 1973 to March 31, 1979 and to 55 from April 1, 1979 onwards. As a result the amount of pension payable to the respondents in accordance with the rules which were in force at the time of their retirement has been reduced. (Para 20)
       It is no doubt true that on December 5, 1988 when the impugned notifications were issued, the rights guaranteed under Articles 31(1) and 19(1)(f) were not available since the said provisions in the Constitution stood omitted with effect from June 20, 1979 by virtue of the Constitution (Forty-fourth Amendment) Act, 1978. But the notifications G.S.R. 1143(E) and G.S.R. 1144(E) have been made operative with effect from January 1, 1973 and April 1, 1979 respectively on which dates the rights guaranteed under Articles 31(1) and 19(1)(f) were available. Both the notifications in so far as they have been given retrospective operation are, therefore, violative of the right then guaranteed under Articles 19(1) and 31(1) of the Constitution. (Para 22)
       Apart from being violative of the rights then available under Articles 31(1) and 19(1)(f), the impugned amendments, in so far as they have been given retrospective operation, are also violative of the rights guaranteed under Articles 14 and 16 of the Constitution on the ground that they are unreasonable and arbitrary since the said amendments in Rule 2544 have the effect of reducing the amount of pension that had become payable to employees who had already retired from service on the date of issuance of the impugned notifications, as per the provisions contained in Rule 2544 that were in force at the time of their retirement. (Para 23)

JUDGMENT

S.C. Agrawal, J.-These appeals and special leave petitions filed by the Union of India and the Railway Administration involve the question regarding validity of the notifications Nos. G.S.R. 1143(E) and G.S.R. 1144(E) dated December 5, 1988 issued in exercise of the power conferred on the President of India under the Proviso to Article 309 of the Constitution whereby Rule 2544 of the Indian Railway Establishment Code, Volume II (Fifth reprint) has been amended with retrospective effect. By notification No. G.S.R. 1143(E) the said rule was amended with effect from January 1, 1973 and by notification No. G.S.R. 1144(E) the amendment was made with effect from April 1, 1979.

2. In Railways there are certain employees such as Drivers, Guards, Shunters, etc. who are connected with the movement of trains and are categorised as "running staff . In addition to the pay the running staff are entitled to payment of Running Allowance. Under the relevant rules computation of pension after retirement is made on the basis of average emoluments and a part of the Running Allowance is included in average emoluments. Provision in this regard is contained in clause (g) of Rule 2544 of the Indian Railway Establishment Code. Prior to its amendment by the impugned notifications Rule 2544 provided as follows :-

"Rule 2544 (G.S.R. 486)-Emoluments and Average Emoluments : The term "Emoluments", used in these Rules, means the emoluments which the Officer was receiving immediately before the retirement and includes:-

(a) pay other than that drawn in tenure post;

(b) Personal allowance, which is granted (i) in lieu of loss of substantive pay in respect of a permanent post other than a tenure post, or (ii) with the specific sanction of the Government of India, for any other personal consideration.

Note : Personal pay granted in lieu of loss of substantive pay in respect of a permanent post other than a tenure post shall be treated as personal allowance for the purpose of this article. Personal pay granted on any other personal considerations shall not be treated as personal allowance unless otherwise directed by the President.

(c) fees or commission if they are the authorised emoluments of an appointments and are in addition to pay. In this case "Emoluments" means the average earnings for the last six months of service;

(d) acting allowance of an Officer without a substantive appointment if the acting service counts under Rule 2409 [c.s.r. 371], and allowances drawn by an Officer appointed provisionally substantively or appointed substantively pro tempore or in an officiating capacity to an office which is substantively vacant and on which no Officer has a lien or to an Office temporarily vacant in consequence of the absence of the permanent incumbent on leave without allowances or on transfer to foreign service;

(e) deputation (duty) allowances;

(f) duty allowances (special pay); and

(g) (i) For the purpose of calculation of average emoluments : Actual amount of running allowances drawn by the Railway servant during the month limited to a maximum of 75 of the other emoluments reckoned in terms of (a) to (f) above.

(ii) For the purpose of gratuity and/or death-cum-retirement gratuity: The monthly average of running allowance drawn during the three hundred and sixty five days of running duty immediately preceding the late of quitting service limited to 75 of the monthly average of the other emoluments reckoned in terms of items (a) to (f) above drawn during the same period.

Note : In the case of an Officer with a substantive appointment who officiates in another appointment or holds a temporary appointment, "Emoluments" means :

(a) the emoluments which would be taken into account under this Rule in respect of the appointment in which he officiates or of the temporary appointments, as the case may be, or

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1997 Supreme(SC) 1014

IMPORTANT POINTA service rule which seeks to reverse from an anterior date a benefit which has been granted or availed can be assailed as being violative of Articles 14 and 16 of the Constitution to the extent it operates retrospectively.

Cases Referred (14)

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IMPORTANT POINT
A service rule which seeks to reverse from an anterior date a benefit which has been granted or availed can be assailed as being violative of Articles 14 and 16 of the Constitution to the extent it operates retrospectively.