IMPORTANT POINT
The discernible purpose underlying pension scheme or a statute introducing the pension scheme must inform interpretative process and accordingly it should receive a liberal construction and the Courts may not so interpret such statute as to render them obscure.

Headnote:(i) Service Law-Pension and dearness relief-Entitlement to claim-Employees of Kerala State Road Transport Corporation seeking pension and dearness relief at enhanced rates in par with employees of State Government-Corporation formed in 1965-Some persons who were then employed with State Transport Department were absorbed by the Corporation-Their service conditions were protected-Pensions paid to them in terms of Kerala Service Rules-Departure made in 1992 by fixing subsequent dates of entitlement for dearness relief-Subsequent deferment of date-Challenged-Whether corporation has power to fix up a different cut off date taking into account several relevant factors like financial stringencies etc.-This shall be decided by the High Court afresh as directed-Road Transport Corporation Act, 1950-Section 34-Kerala Service Rules, 1959.
       Held : From the perusal of the order passed by the Division Bench, it appears that it proceeded on the basis as if the questions for consideration related entitlement to receive enhanced pension and dearness reliefs. As noted above, there was no dispute about entitlement and what was in controversy related to the date for which the payment was to be made. The High Court further proceeded on the basis that there was no question of any cut off date since Part III of the KSR was being adopted in the past. The same prima facie is not correct. Stand of the Corporation right through has been that it had fixed the date from which the payments were to be made and for that purpose relied on Ex. P-1, letter of the Government. Whether the letter (Ex.P-1) constituted a direction under Section 34 of the Act is an issue which is linked with several other issues like power of the Corporation to fix a different date de hors any special direction of the Government under Section 34 of the Act. Even if it is held that the letter in Ex.P-1 was not in the nature of a special direction, the other issues were required to be considered. That has apparently not been done. One of the issues which needed consideration was indication of KSR Part III on the question of paying pension in Corporation s order dated 5.5.1984. A distinction has been made between a mere reference or citation of one statute into another and incorporation. A statute may instead of referring to a particular previous statute or to any specific provision therein refer to the law on the subject generally. In such cases a reference is construed to mean that the law is as it reads thereafter including amendments subsequent to the time of adoption. (Paras 28 & 29)
       What is the effect of the letter dated 5-5-1984 and its impact on the authority, if any, of the Corporation to fix cut off date has not been examined by the High Court. (Para 35)
       (ii) Service Law-Pension-Concept of-It is not a matter of contract-Valuable right of employees.
       Held : Pension is neither bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to the statute, if any, holding the field, (ii) that the pension is not an ex gratia payment but it is a payment for the past service rendered; and (iii) it is a social welfare measure rendering socio-economic justice to those who in the hey day of their life ceaselessly toiled for employers on an assurance that in their ripe old age they would not be left in lurch. It must also be noticed that the quantum of pension is a certain percentage correlated to the emoluments earlier drawn. Its payment is dependent upon an additional condition of impeccable behaviour even subsequent to retirement. That is, since the cessation of the contract of service and that it can be reduced or withdrawn as a disciplinary measure. (Para 20)
       (iii) Interpretation of Statutes-Legislation by referable incorporation-Change in incorporation statute-Effect on incorporating statute. (Paras 31 to 33)

JUDGMENT

Arijit Pasayat, J.-C.A. Nos. 6651-6654/2000, 6655/2000, 6656/2000, 6657/2000 SLP (C) Nos. 6820/2001 6518-2001, C.A. Nos. 181-182/2002

Leave granted in SLP (C) Nos. 6820/2001 and 6581, 6521/2001.

2. Since these appeals have some similarity so far as pivotal issues are concerned, are, therefore, disposed of by this common judgment.

3. Several writ petitions were filed by the respondents herein before the Kerala High Court seeking declaration about their entitlement to receive pension and dearness relief at enhanced rates in par with the employees of the State Government. They were employees of the Kerala State Road Transport Corporation (hereinafter referred to as the Corporation) which is the appellant in all these appeals. Though the reliefs sought for were not exactly identical, by the impugned judgment four appeals were disposed of by a Division Bench of the High Court. Two of the writ appeals were filed by the writ petitioners, while two were filed by the Corporation.

4. The Corporation was formed on 1-4-1965; some persons who were then employed with State Transport Department were absorbed by the Corporation; their service conditions were protected vide Notification No. 4936/TC4/64/PW 22-3-1965 in terms of directions under Section 34 of the Road Transport Corporation Act, 1950 (in short the Act ). On the basis of conditions 11 and 12 of the Notification, which shall be extracted infra, pension was paid to erstwhile State Transport Department employees, in terms of Part III of Kerala Service Rules, 1959 (in short KSR ). In 1978, other employees who opted for pension were also granted pension at par with these employees. In 1992, (w.e.f. 1-1-1992) a departure was made by fixing subsequent dates of entitlement for dearness relief. Similar was the situation in 1994. While on the first instance date fixed was 1-7-1992, for the latter case it was directed to be operative from 1-11-1996, when the Government had fixed the date to be 1-4-1994.

5. Huge extra cost involved and shattered financial condition were the reasons indicated as such deferment. Reliance was also placed on a letter of the State Government dated 24-9-1992 which according to it was a direction in terms of Section 34 of the Act. According to this letter, in view of financial position of the Corporation, the matter relating to payment of the enhanced amounts may be deferred for better times. This letter was in response to the Corporation s letter to the effect that since it had no means to pay the enhanced rate of pension as per the Fifth Kerala Pay Commission, the date from which the amount is to be paid should be postponed. There is a great detail of controversy as to the true nature of the said government letter (Ex.P-1). While the Corporation s stand is that it is an instruction in terms of Section 34 of the Act, the pensioners took the stand that the Government only allowed the Corporation to defer the matter for some time. High Court accepted the stand of the writ petitioners. It also observed that the Government only allowed the Corporation to defer the matter for some time, in fact that was deferred, but full payments including the arrears with effect from the date of implementation in Government service also were made by the Corporation subsequently. High Court noted that till 1991 all the orders relating to enhancement of pension as well as dearness reliefs were paid to the pensioners of the Corporation without any difference in dates. It held that in Ex.P-1, what is mentioned relates to deferment of payment for some time, and revised pension benefits were in fact given with arrears after some time. It further noted that since Part III of the KSR had been adopted, there was no rational for fixing the cut off date for payment of the enhanced pension and the dearness reliefs. In the absence of any rule or regulation framed by the Corporation, KSR is applicable to the employees appointed by it. In respect of employees transferred from State Transport D

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2003 Supreme(SC) 475

IMPORTANT POINTThe discernible purpose underlying pension scheme or a statute introducing the pension scheme must inform interpretative process and accordingly it should receive a liberal construction and the Courts may not so interpret such statute as to render them obscure.

Cases Referred (6)

IMPORTANT POINT
The discernible purpose underlying pension scheme or a statute introducing the pension scheme must inform interpretative process and accordingly it should receive a liberal construction and the Courts may not so interpret such statute as to render them obscure.