The revocation of an irrevocable Trust can be valid if it is in line with the covenants of the Trust Deed, and amendments to a Pension Scheme can be upheld if they are rational and not arbitrary.

1. In the above captioned five petitions, petitioners are the superannuated/ volunteer retirement optees/ dependents of employees of respondent No.2- Minerals & Metals Trading Corporation Limited (hereinafter referred to as “MMTC”) who claim their right to pension, which according to petitioners has been illegally denied by amending Minerals & Metals Trading Corporation of India Employees’ Contributory Superannuation-cum-Family Annuity Scheme” created vide Trust Deed of 29th March, 1989 [hence forth referred to as the ‘Trust”] and ultimately revoking it.

2. Minerals & Metals Trading Corporation of India Employees’ Contributory Superannuation-cum-Family Annuity Scheme” is appended as a Schedule to the Trust Deed of 29th March, 1989. This ‘Self Contributory Pension Scheme’ was first amended in the year 1997 and again in the year 1998, it was amended for the second time and the third amendment to it was made in the year 2002. The MMTC contribution to this Scheme was of Rs. 100 per month only. On 21st November, 2005, the Trust Deed of 29th March, 1989 was revoked with the signing of the Revocation Deed. Pertinently, the MMTC Employees’ Union and MMTC Officers’ Association were a party to the Memorandum of Settlement of 28th November, 2005. The Revocation Deed was preceded by a unanimous decision of 9th August, 2005 of Federation of MMTC Officer’s Association and MMTC Employees’ Union to wind up the Trust.

3. The challenge in the above captioned petitions is to the Deed of Revocation of 21st November, 2005 and the above referred amendments made to the afore-referred ‘Self Contributory Pension Scheme’. Since the challenge to the Revocation Deed and the amendments made to the aforesaid Scheme is on similar grounds, therefore, these petitions were heard together and are being disposed of by this common judgment.

4. The background facts are that on 20th July, 1988, a Memorandum of Understanding was entered into between respondent-MMTC and Employees Federation/ Union for forming a Pension Scheme under the Industrial Disputes Act, 1947. It is a matter of record that the officers of MMTC were the Trustees of this Trust Deed of 29th March, 1989 which was irrevocable. Clause 4.12 of the Trust Deed empowered the Trust to alter, vary or amend the Pension Scheme. As per this Trust Deed, the benefits under this Scheme were payable on the date of superannuation of the employee. It is relevant to note that as per Clause-22 of this Trust Deed, the Trust could be terminated in case the Trustees unanimously decided to do so. Clause 22.2 provides that upon termination of the Trust, the individual contributions were to be refunded with interest to the beneficiaries of the Pension Scheme. This Trust fund was approved by Commissioner of Income Tax (henceforth referred to as the ‘CIT’) w.e.f. 1st April, 1988.

5. The salient features of the ‘Self Contributory Pension Scheme’ were that the Trust would include representatives of the MMTC Employees’ Union and its Officers’ Association as Trustees. M/S A.K. Pandit, Actuarial, advised the Trust to take loan from MMTC to overcome the financial constraints and in this regard, an Agreement of 4th May, 1995 was entered between the Trust and MMTC for a staff loan of Rs. 10 crores, which carried interest @4% p.a. This soft loan was to be repaid by respondent No.3-Trust to respondent No.2-MMTC in fifteen installments of Rs. 1 crore each and the first installment was to commence from May, 2003. In short, by the first amendment of the year 1997 to the ‘Self Contributory Pension Scheme’, reckonable service for earning pension was increased from 33 years to 39.6 years and the pension amount was increased from Rs. 2,000/- per month to Rs. 2,100/- per month. Minimum period of contribution to this Scheme was increased from 05 years to 07 years and the minimum qualifying service was made 20 years with the rider that an employee, who is covered by this Scheme, has to make contribution to this Scheme for a minimum period o