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2002 Supreme(MP) 282

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
Dipak Misra and U.N. Singh, JJ.
N.L. Mandhan and others
Vs.
M.P. State Electricity Board and another
W.P. No. 857, 926, 4813, 4814, 6005, 6245, and 5710 of 2001
Decided On: 05.03.2002

Advocates appeared:
For Appellant/Petitioner/Plaintiff: Sanjay Agrawal, R.N. Singh, Senior Counsel with Arpan Pawar
For Respondents/Defendant: V. K. Tankha, Senior Counsel with H.K. Upadhyay

Headnote:

Pension Commutation - M.P. State Electricity Board - Electricity (Supply) Act, 1948, M.P. Civil Services (Commutation of Pension) Rules, 1996 - The court declared the notification dated 9-3-2001 as ultra vires, with prospective effect. Employees who voluntarily retired were entitled to benefits as per the 1976 Rules, while those who retired by superannuation were entitled to benefits as per the rules in force at the time of retirement.

Fact of the Case:

The petitioners, employees of the M.P. State Electricity Board, accepted voluntary retirement and sought commutation of pension. The Board issued a notification in 2001 reducing the commutation value of the pension, affecting the vested rights of the petitioners.

Finding of the Court:

The court held that the notification dated 9-3-2001 was ultra vires with prospective effect. Employees who voluntarily retired were entitled to benefits as per the 1976 Rules, while those who retired by superannuation were entitled to benefits as per the rules in force at the time of retirement.

Issues: The issues involved the retrospective application of the notification, the rights of employees who voluntarily retired, and the legality of the Board's orders.

Ratio Decidendi: The court held that pension should be computed in accordance with the rules in force at the time of retirement. The Board's orders were not conferred the status of law as they were not notified as required by the Electricity (Supply) Act, 1948.

Final Decision: The court allowed the writ petitions, declaring the notification dated 9-3-2001 as ultra vires with prospective effect. It directed the Board to provide pensionary benefits as per the 1976 Rules to employees who voluntarily retired and as per the rules in force at the time of retirement to those who retired by superannuation.

ORDER

Dipak Misra, J.

1. Common questions of law being involved in this batch of writ petitions, it was heard analogously and is hereby disposed of by this singular order. For the sake of clarity and convenience we would proceed to adumbrate the facts in W.P. No. 6005/2001.

2. The petitioners, who were the employees of the M.P. State Electricity Board, accepted voluntary retirement from the M.P. Electricity Board (in short 'the Board') on various dates. A copy of the order of retirement in respect of four persons has been brought on record as Annexure P/1. The petitioners opred for voluntary retirement in order to discharge their liability towards their family and to provide better future to their offsprings. At the time of settlement of their case relating to grant of pension, their application for commutation was considered in accordance with the rules in vogue, and they were allowed commutation of pension in lump sum to the tune of 40% of the pension. In the order granting pension it was mentioned that 40% is the commuted value of the pensior and it would be payable only after the drawal of the first pension. It is setforth in the petition that though the petitioners were allowed to retire voluntarly the commutation value of the pension was withheld for the reasons best known to the respondents. The repeated approach to the authorities ended in sisyphean labour. When the petitioners were planning to have a better future, like a bolt from the blue they were served with the orders that there would be amended commuted pension in terms of the Board's notification dated 9-3-2001 by which the commutation of the pension has been drastically reduced.

2. According to the writ petitioners the deduction of commutation of pension in pursuance of the notification dated 9-3-2001 is arbitrary and illegal inasmuch as the said notification has been given retrospective effect, though law does not envisage such allowance. It is pleaded in the petition that tie State Government has framed a set of rules regarding commutation of pension i e. M.P. Civil Services (Commutation of Pension) Rules, 1996 (for brevity 'the Rules') and the said rules were notified on 21-8-1996 and were published in the official gazette on 13-9-1996. It is putforth that the Board in exercise of powers conferred on it under section 79 of the Electricity (Supply) Act, 1948 (for brevity 'the Act') adopted the rules for its employees vide order dated 30-6-1998. As the State Government by notification dated 7-2-2000 amended the provisions contained in the rules and the schedule was drastically amended and the number of years in respect of which the pension could be commuted was significantly reduced. It has been averred that the Pension of Commutation Rules, 1976 was withdrawn on 7-2-2000 and the new rules were adopted by the notification issued by the State Government on 26-12-2000, Annexure P/4. While the matter stood thus, the Board issued notification on 9-3-2000, Annexure P/5 adopting the notification issued on 7-2-2000 with retrospective effect from 18-2-2000. This order has been notified in the official gazette as envisaged under clause (c) of section 79 of the Act. It is urged in the petition that Annexure P/5 is illegal, irrational, unreasonable and arbitrary inasmuch as by virtue of this notification the vested right of the pensioners has been curtailed. It is also highlighted that the persons who had availed the retirement on the voluntary retirement scheme, were tempted to so avail because of the benefits conferred by the Board with regard to commutation value of pension. It is also putforth that there are 40 employees who have already been given the benefit of this commutation value as they opted for voluntary retirement but the same has been denied to them. With these averments prayer has been made to declare that the notification dated 9-3-2001 is ultra vires, being irrational and unreasonable inasmuch as it has been made retrospectively applicable as a consequence





































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