2006 Supreme(SC) 407

2006(3) Supreme 743
SUPREME COURT OF INDIA
(From Patna High Court)
B.N. Srikrishna and Lokeshwar Singh Panta, JJ.
State of Bihar and Ors.—Appellants
versus
Bihar Pensioners Samaj—Respondent
Civil Appeal No. 4150 of 2003
Decided on 27-4-2006
Counsel for the Parties :
For the Appellants : J.P. Cama, Sr. Advocate, Gopal Singh, Nishakant Pandey Advocates.
For the Respondent : Ranjit Kumar, Sr. Advocate, Ms. Binu Tamta, Advocate.

IMPORTANT POINT
1. Fixing of a cut off date for granting of benefits is well within power of Govt. as long as reasons therefore are not arbitrary and are based on rational consideration.
2. Financial constraint could be a valid ground for introducing a cut off date while introducing a pension scheme on revised basis.

Headnote:Constitution of India—Article 14—Fixation of cut off date for payment of revised benefit under pension—High Court struck down the notification holding it arbitrary and violative of Art. 14 of the Constitution—State Govt. enacted the law “The Bihar State Government Employees Revision of Pension, Family Pension and Death-cum-Retirement Gratuity (Validation and Enforcement) Act, 2001—High Court struck down the Act on ground that it was enacted to frustrate, side track and void the earlier decision of High Court—Appeal—Fixing of a cut off date for granting of benefits was well within powers of Govt. as long as reasons therefore were not arbitrary and were based on some rational consideration—State Govt. had declined to pay arrears from 1-1-1986 on ground of financial consideration which was a material consideration—Financial constrain could be a valid ground for introducing a cut off date while introducing a pension scheme on revised basis—Impugned judgment was liable to be set aside.

       Held : It is the validity of this Act which was impugned before the High Court, resulting in the impugned judgment. Once again, relying on the judgment in Bakhtawar Trust, (2003) 5 SCC 298, the learned counsel for the appellants contended that, a validating Act may even make ineffective the judgments and orders of competent courts provided it, by retrospective legislation, removes the cause of the invalidity or the basis that had led to those decisions. It is always open to the Legislature to alter the law retrospectively as long as the very premise on which the earlier judgment declared a certain action as invalid is removed. The situation would be one of a fundamental change in the circumstances and such a validating Act was not open to challenge on the ground that it amounted to usurpation of judicial powers. We think that the contention is well founded. The only ground on which Article 14 has been put forward by the learned counsel for the respondent is that the fixation of the cut-off date for payment of the revised benefits under the two concerned notifications was arbitrary and it resulted in denying arrears of payments to certain sections of the employees. This argument is no longer res integra. It has been held in a catena of judgments that fixing of a cut-off date for granting of benefits is well within the powers of the Government as long as the reasons therefor are not arbitrary and are based on some rational consideration. A supplementary affidavit filed on behalf of the State Government by Mukesh Nandan Prasad dated 9.9.2002 brings out in paragraph 8 that the total amount of financial burden, which would arise as a result of making effective the payments from 1.1.1986 would be about 2,038.34 crores. In other words, the State Government declined to pay the arrears from 1.1.1986 on the ground of financial consideration, which, undoubtedly, is a very material consideration for any administration. In State of Punjab and Ors. v. Amar Nath Goyal and Ors. (2005) 6 SCC 754 this Court had occasion to consider the very same issue. After referring to a number of other authorities, it was held that financial constraints could be a valid ground for introducing a cut-off date while introducing a pension scheme on revised basis. Thus, refusal to make payments of arrears from 1.1.1986 to 28.2.1989 on the ground of financial burden cannot be held to be an arbitrary ground or irrational consideration. Hence, the argument based on Article 14 of the Constitution must fail. We see no other contention justifying the striking down of the Validation Act passed by the competent Legislature. At any rate, none has been pointed out to us. Thus, the only argument in favour of the striking down having been found unacceptable, we are of the view that the impugned judgment of the High Court is erroneous and needs to be interfered with. (Paras 15 to 18)