Judgment

N. P. SINGH, J.:- The respondents, who are retired Government servants, filed a writ application before the High Court, questioning the validity of Office Memorandum No. F-19(4) -E.V./79 dated 25th May, 1979, issued by the Government of India, treating a portion of the dearness allowance, as pay for the purpose of retirement benefits in respect of Government servants who retired on or after the 30th September, 1977. According to respondents, who retired from service before 30th September, 1977, the said benefits should have been extended to all retired Government servants, irrespective of their date of superannuation.

2. A learned Judge of the High Court allowed the said writ application on basis of the judgment of this Court in the case of D. S. Nakara v. Union of India, AIR 1983 SC 130, saying that the said Office Memorandum was discriminatory in nature. The Division Bench dismissed the appeal filed on behalf of the Union of India.

3. It may be mentioned that Government of India issued on 25th May, 1979 two Office Memorandum Nos. F-19(3)-E.V./79 and F-19(4) -E.V./79. In the Office Memorandum No. F-19(3)-E.V./79, the computation of pension was liberalised, but it was made applicable to the Government servants who were in service on March 31, 1979 and retired from service on or after that date. It introduced a slab system for computation of pension. That Office Memorandum was the subject matter of controversy in the aforesaid case of D. S. Nakara (AIR 1983 SC 130) (supra). This Court held that the criteria, "being in service and retiring subsequent to the specified date" for being eligible for liberalised pension in the aforesaid Office Memorandum, was violative of Article 14 of the Constitution, being arbitrary and discriminatory in nature. It was pointed out that the Government servants, who retired prior to the specified date, and those who retired thereafter, formed one class. They having been classified in two separate groups for the purpose of the pensionary benefits, the classification was not founded on any intelligible differentia. The said classification had also no rational nexus with the object sought to be achieved.

4. The Office Memorandum No. F19(4)-E.V./79, with which we are concerned, states that the question of treatment of a portion of dearness allowance as pay had been under consideration of the Government of India and the President had been pleased to decide that "in respect of Government servants who retired on or after the 30th September, 1977, the amount of dearness allowance indicated in para 2 below, shall be treated as pay for the purposes and to the extent specified hereinafter". It further says that part of the dearness allowance, shall be treated dearness pay, in different pay ranges specified in the said Office Memorandum for the purpose of retirement benefits. Up to pay range of Rs. 300/-, 36% of the pay shall be deemed to be dearness pay. Similarly, in respect of pay range above Rs. 300/- and up to Rs. 2157/-, 27% of the pay subject to a minimum of Rs. 108/- and maximum of Rs. 243/ - shall be treated as amount of dearness pay. In respect of pay range above Rs. 2157/- and up to Rs. 2399/-, the dearness pay shall be the amount by which the pay falls short of Rs. 2400/-. In the case of officers drawing pay above Rs. 2180/- and retiring on or after 1st December, 1978, the amount of dearness pay to be treated for the purpose of retirement benefits has been specified in the said Office Memorandum. In paragraph 3(1) of that Office Memorandum, it has been said that the dearness pay shall count as emoluments for pension and gratuity in terms of Rule 33 of the Central Civil Services (Pension) Rules, 1972. But, in the case of persons who have already retired on or after 30th September, 1977 1st December, 1978, but within ten months of those dates, the ultimate average emoluments will be calculated according to the procedure prescribed. In the case of persons, who retired between 30th September, 1977