2019 Supreme(SC) 735

SUPREME COURT OF INDIA CIVIL APPEAL NO. 10857 OF 2016
M.R. SHAH, A.S. BOPANNA, JJ.
All Manipur Pensioners Association by its Secretary – Appellant
Versus
The State of Manipur and others – Respondents
Decided On : 11-07-2019

IMPORTANT POINTS
(1) There has to be a classification founded on some rational principle when similarly situated class is differentiated for grant of any benefit.
(2) All pensioners form only one homogeneous class.

Headnote:(A) Service Law – Pension – Discrimination between pensioners – State of Manipur has adopted Central Civil Services (Pension) Rules to be applicable to State of Manipur – All government servants retired in accordance with provisions of Pension Rules and after completing qualifying service are entitled to pension/pensionary benefits – State provided a lower percentage of increase to those who retired pre1996 and provided higher percentage of increase to those who retired post1996 – Classification is sought to be justified by State Government solely on the ground of financial constraint – Subject to completing qualifying service government servants retired in accordance with pension rules are entitled to pension – As such, all pensioners form only one homogeneous class – Even otherwise on merits also, there is no valid justification to create two classes, viz., one who retired pre1996 and another who retired post1996, for the purpose of grant of revised pension – Such a classification has no nexus with object and purpose of grant of benefit of revised pension – All pensioners form a one class who are entitled to pension as per pension rules – Article 14 of Constitution of India ensures to all equality before law and equal protection of laws – Classification in question has no reasonable nexus to objective sought to be achieved while revising pension – Object and purpose for revising pension is due to increase in cost of living – All pensioners form a single class and such a classification for the purpose of grant of revised pension is unreasonable, arbitrary, discriminatory and violative of Article 14 of Constitution of India – State cannot arbitrarily pick and choose from amongst similarly situated persons, a cutoff date for extension of benefits especially pensionary benefits – Whenever a new benefit is granted and/or new scheme is introduced, it might be possible for State to provide a cutoff date taking into consideration its financial resources – But same shall not be applicable with respect to one and single class of persons, benefit to be given to one class of persons who are already otherwise getting benefits and question is with respect to revision – All pensioners, irrespective of their date of retirement, viz. pre1996 retirees shall be entitled to revision in pension at par with those pensioners who retired post1996 – Impugned judgment and order passed by Division Bench quashed and set aside and judgment and order passed by Single Judge restored. [Central Civil Services (Pension) Rules, 1972 – Rule 49] (Paras 6.1, 7.2, 8, 8.1 and 9)

       (B) Constitution of India – Article 16 – Valid classification – Ingredients – classification must be based on a just objective – Result to be achieved by just objective presupposes choice of some for differential consideration/treatment over others – A classification to be valid must necessarily satisfy two tests. Firstly, distinguishing rationale has to be based on a just objective and secondly, choice of differentiating one set of persons from another, must have a reasonable nexus to objective sought to be achieved – Test for a valid classification may be summarised as a distinction based on a classification founded on an intelligible differentia which has a rational relationship with object sought to be achieved – Whenever a cut-off date is fixed to categorise one set of pensioners for favourable consideration over others, twin test for valid classification or valid discrimination must necessarily be satisfied – There has to be a classification founded on some rational principle when similarly situated class is differentiated for grant of any benefit. (Para 8)

       Facts of Case:

       Question which is posed for consideration is, whether in facts and circumstances of the case, decision of this Court in case of D.S. Nakara shall be applicable or not, and in the facts and circumstances of case and solely on the ground of financial constraint, State Government would be justified in creating two classes of pensioners, viz., pre1996 retirees and post1996 retirees for the purpose of payment of revised pension and whether such a classification is arbitrary, unreasonable and violative of Article 14 of Constitution of India or not? State Government has justified cut-off date for payment of revised pension solely on the ground of financial constraint. On no other ground, State tried to justify the classification. Division Bench has held that the cut-off date fixed by the State government as 1.1.1996 for payment of revised pension to pre1996 retirees and post1996 retirees cannot be termed to be unreasonable or irrational in the light of Article 14 of Constitution of India and therefore need not be held to be invalid.

       Findings of Court:

       A classification to be valid must necessarily satisfy two tests. Firstly, distinguishing rationale has to be based on a just objective and secondly, choice of differentiating one set of persons from another, must have a reasonable nexus to objective sought to be achieved. Test for a valid classification may be summarised as a distinction based on a classification founded on an intelligible differentia which has a rational relationship with object sought to be achieved.

       Result : Appeal allowed.