Retrospective modifications to pension schemes that unfairly alter pension benefits for specific groups of retirees constitute discrimination under Article 14 of the Constitution.

JUDGMENT :

JYOTI SINGH, J.

1. Petitioner No. 1 in W.P.(C) 4406/2017 is Retired Officers Welfare Society of Indian Oil Corporation Ltd. (‘IOCL’) while Petitioners No. 2 and 3 are individual retired officers. Petitioners in W.P.(C) 7690/2017 are individual retired employees of Mathura Unit of IOCL. Petitioners lay a challenge to impugned Circular dated 19.04.2011 and Office Memorandum dated 01.06.2011 as also Deed of Variance dated 18.05.2011 issued by IOCL, whereby Superannuation Benefits Fund Scheme (‘hereinafter referred to as ‘SBF Scheme’) dated 24.12.1987 was retrospectively modified w.e.f. 01.01.2007. Declaration is sought to declare that all Deeds of Variance making changes to Principal Trust Deed dated 24.12.1987 are illegal and void ab initio. Writ of Mandamus is sought to IOCL to restore pension benefits to the Petitioners in accordance with the original SBF Scheme calculated on actual salary (Basic Pay + DA) and reckonable years of service as on actual date of superannuation of the members of Petitioner No.1 Society and individual retirees, who superannuated after 01.01.2007. On account of similitude of legal issues with respect to the same SBF Scheme, both petitions were heard together and are being decided by this common judgment.

2. Facts to the extent necessary and as averred in the writ petitions are that Board of Respondent No.1/IOCL vide Board Agenda No.CH/371 in a meeting held on 05.11.1986, passed a resolution approving in principle, the institution of a Self Contributory Superannuation Benefits Fund Scheme (‘hereinafter referred to as ‘SBF Scheme’) on co-operative basis for the employees of the Corporation, as a social welfare measure and to enable the Corporation to attract and retain talent. The proposed scheme was felt necessary as the existing benefits available to employees by way of Provident Fund, Gratuity, Encashment of leave were inadequate to meet the needs of the employees in their post-retirement phase. To secure their retired life, employees conveyed their willingness to contribute part of their salaries and also to forego some of the existing benefits like uniform allowance etc. to contribute indirectly towards the corpus.

3. It is averred that prior to grant of in-principle approval by the Board, a study was made with the help of Consulting Actuaries as to the funding needed for ensuring a guaranteed superannuation benefit @ 40% of the salary (Basic Pay + DA) of the employee upon his retirement with a consideration that an employee would contribute for minimum 32 years of service. Pursuant to Resolution dated 05.11.1986, IOCL through its Director, Director (Finance), Director (Marketing) and Director (R&P) entered into a Memorandum of Understanding (‘MoU’) dated 07.11.1987 with the representatives of the Indian Oil Officers’ Association, for setting up the Self Contributory Superannuation Benefits Fund (‘SBF Fund’) for the benefit of the employees of the Corporation. The salient features of MoU were nearly similar to the Board Agenda dated 05.11.1986, save and except, the following salient deviations:

“a). As per Note of Clause 2, Officers having service of less than 5 years for superannuation shall be required to contribute minimum for a period of 5 years. For this purpose, contribution was to be made on monthly basis during the service period and balance was to be paid in lumpsum at the time of superannuation.

b). As per Clause 5, 32 years' service was replaced with 32 [full] years' reckonable service for earning full 40% of benefits.

c). As per Clause 8, no officer was required to contribute for the past service.”

4. With the above deviations, an officer superannuating immediately on implementation of the proposed scheme was eligible for the benefit merely by paying contribution for a period of 5 years only. During the initial years of the SBF Scheme, numerous objections were raised by some of the employees especially younger group, who did not want to opt for this Scheme, considering that the prop