2016 Supreme(SC) 764

SUPREME COURT OF INDIA
Jagdish Singh Khehar, C. Nagappan, JJ.
State of H.P. & Ors. – Appellants
Versus
Rajesh Chander Sood etc. etc. – Respondents
CIVIL APPEAL NOS.9750-9819 OF 2016 (Arising from SLP(C) Nos. 10864-10933 of 2014)
Decided On : 28-09-2016

IMPORTANT POINTS
The 1999 scheme applied to the employees from the date of option and not date of retirement. Contingent right to claim pension on retirement accruing to employees on date of option.
State was well within its rights to review the Scheme and fix a cut-off date.
Administrative review can only be exercised for a good and valid justification founded on reasonable consideration, and not being violative of any legal right.
When a welfare scheme is introduced without any misrepresentation and is withdrawn restoring the affected persons to their pre-scheme position, question of promissory estoppel does not arise.
Court has no jurisdiction to fasten a monetary liability on the State Government.
Matters of policy decisions necessarily have to be determined administratively on the basis of relevant factors.

Headnote:(a) Service law – Pension – Himachal Pradesh Corporate Sector Employees Pension (Family Pension, Commutation of Pension and Gratuity) Scheme, 1999 – Paragraph 4 – Employees submitting their option came to be regulated by the Scheme immediately – Those not opting deemed to have opted – New entrants naturally governed by the Scheme – The optees consciously foregoing all their rights under the Employees’ Provident Funds Scheme, 1995 – Employer’s contribution to CPF transferred to corpus of pension fund on date of option – The scheme applied to the employees from the date of option and not date of retirement – Contingent right to claim pension on retirement accruing to employees on date of option – Right to pension accrues as soon as an employee joins a pensionable service – He starts earning his qualifying service form that date. (Para 48, 49, 50, 51)

       (b) Service law – Pension – State deciding that the employees who opted for Himachal Pradesh Corporate Sector Employees Pension (Family Pension, Commutation of Pension and Gratuity) Scheme, 1999 would be entitled to pension if retiring before then date of repeal of the Scheme – Those retiring thereafter were deprived from pension – Thus State fixed the date of repeal as the cut-off date – Held, State was well within its rights to review the Scheme and fix a cut-off date – Exercise of such power by the State, however, should be in consonance with all legal and statutory obligations (Para 54)

       (1980) 3 SCC 402 – Relied upon

       (2002) 2 SCC 333; (1973) 2 SCC 650; (1976) 3 SCC 540; (1985) 4 SCC 369; (1994) 4 SCC 68; (1993) 4 SCC 62; (1997) 2 SCC 342; (2015) 10 SCALE 639; (2010) 12 SCC 538; (2013) 12 SCC 210; (2008) 9 SCC 125; (2011) 11 SCC 702 – Referred

       (c) Administrative law – Administrative review – Can only be exercised, for a good and valid justification founded on reasonable consideration, and not being violative of any legal right. (Para 55)

       (2006) 9 SCC 630; (1983) 1 SCC 305; (1997) 6 SCC 623 – Distinguished

       (d) Estoppel/ Promissory estoppel – Respondents, employees of Corporate bodies which are independent juristic bodies – Respondents not government employees – Government floating 1999 Scheme as welfare measure – No Misrepresentation by government – Employees retiring after cut-off date not deprived of their rights under Employees’ Provident Funds Scheme, 1995 – All amounts of their contribution and employer’s contribution paid to them with interest accrued – Principle of Estoppel/ Promissory estoppels not attracted. (Para 58)

       (2009) 5 SCC 694; AIR 2015 SC 901; (2014) 4 SCC 196 – Relied upon

       (2004) 1 SCC 663; (2000) 4 SCC 335 – Referred

       (e) Administrative law – Financial viability of pension scheme – Respondent employees disputing calculations of State government showing that the scheme was not self financing and therefore not viable – Financial calculations cannot be made casually, on generalized basis – Respondent employees not able to establish that withdrawal of the 1999 Scheme was based on arbitrary and irrational considerations – Withdrawal of the Scheme not arbitrary and violative of Article 21 of the Constitution. (Para 63)

       (2005) 6 SCC 754; (2003) 5 SCC 163; (2003) 6 SCC 490; (2003) 6 SCC 490; (1964) 7 SCR 569; (1990) 4 SCC 207 – Referred

       (f) Administration of justice – Judicial propriety – Court has no jurisdiction to fasten a monetary liability on the State Government – Budgetary allocation are matter of policy decisions – Pension scheme was never intended to be run on State funds – It was supposed to be self financing – State government could not be burdened with liability to run the Scheme as done by High Court – Impugned judgment not sustainable. (Para 64)

       (g) Administrative law – Service law – Pension – Discrimination – Respondent employees – employees of corporate bodies – Not government servants – Cannot claim parity with government servants – Even after withdrawal of 1999 Scheme State permitting corporate bodies not suffering loss to float/continue their individual pension scheme o the lines of 1999 Scheme – Withdrawal of 1999 Scheme, held, not discriminatory (Para 66, 67)

       (h) Administrative law – Withdrawal of 1999 scheme – When and how a loss making corporation would be wound up, when and how much, is to be paid as wages (or allowances) to employees, post-retiral benefits – All these are matters of policy decisions – Necessarily have to be determined administratively on the basis of relevant factors – Courts have no role – Notification repealing 1999 scheme, held, not capricious, arbitrary, illegal or uninformed. (Para 68)

       (i) Constitution of India – Article 21 – A welfare scheme targets to alleviate basic human rights – May be irreversible as its withdrawal would violate Article 21 – Not so, otherwise – 1999 scheme not a measure aimed at providing basic human rights – Hence not irreversible – Its withdrawal not violative of Article 21. (Para 69)

       (j) Constitution of India – Article 300A – Withdrawal of the 1999 Scheme – Well within authority of State – Its withdrawal already held valid – Cannot be said to be without authority of law – Not violative of Article 300A. (Para 70)

       (k) Service law – Pension – 1999 scheme – Respondent employees not government servants – No express right or obligation existing between State government and respondent employees – Legality and constitutionality of the notification repealing 1999 scheme upheld. (Para 71)

       Facts of the case:

       A number of employees who had been deprived of the benefit of Himachal Pradesh Corporate Sector Employees Pension (Family Pension, Commutation of Pension and Gratuity) Scheme, 1999 by the notification dated 2.12.2004 repealing the Scheme, challenged the repeal notification, by filing a number of writ petitions, before the High Court.

       By the impugned common order the High Court allowed all the writ petitions.

       Finding of the Court:

       Notification repealing the 1999 scheme is legal and constitutional.

       Result: Appeals allowed.