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2018 Supreme(Online)(KER) 6272
HIGH COURT OF KERALA
P.V.ASHA, J
C M SATHIAN – Appellant
Versus
THE CHIEF ENGINEER – Respondent
WRIT PETITION (CIVIL) 4315/2017
The court upheld that pension entitlements can be regulated by cut-off dates based on financial considerations without violating constitutional principles of equality.
Headnote:
Pension - Commutation of Pension - Act Section List - The court evaluated provisions regarding pension commutation, applying precedents that link pension entitlements to constitutionality and economic rationality, ultimately affirming the legality of a cut-off date based on financial considerations.
Fact of the Case:
The petitioners, retired officers from a public electricity board, challenged a regulation that denied them revised commutation rates due to their retirement date, arguing it was arbitrary and discriminatory against Supreme Court precedents.
Issues: Whether the denial of pension commutation benefits based on a cut-off date was arbitrary and unconstitutional.
Ratio Decidendi: The court concluded that establishing a cut-off date for pension commutation does not amount to discrimination as long as the financial rationale is sound and supported by prior judicial decisions.
Final Decision: Writ petition is dismissed.
J U D G M E N T
The petitioners are officers, who retired from service from the Kerala State Electricity Board Limited ('the Board' for short) between 01.07.2013 and 01.04.2016. As per Ext.P1 order, the Board approved the recommendations of the Pay Revision Sub Committee for revision of pay and allowances of the officers of the Board and to accept the agreement reached with the recognized Trade Unions for revision of pay and allowances of workmen. In this order, it is stated that a Pay Revision Sub Committee was constituted by the Board for conducting negotiations with the Trade Unions and Officers of Associations to arrive at a Long Term Settlement and for revising the pay and allowances of Officers. It is stated that the Pay Revision Sub Committee after detailed discussions with the Associations of Officers have reached a consensus and submitted a proposal for the revision of pay and allowances of the Officers of KSEB. On the basis of this report, the Board decided to implement the pay revision. Ext.P2 Board Order was issued on 04.03.2016 with respect to the revision of pension and other related benefits to the pensioners in the KSEB.
2. In the present case, petitioners are aggrieved by Clause 6 of Ext.P2 order, which provides for commutation of pension and restoration of commuted portion of pension, which reads as follows:
“The existing rate of commutation of pension (40% of the basic pension) shall be admissible on the revised pay (in the revised scales of pay of workmen and officers implemented vide Board Orders read as 4th and 6th paper above with effect from 01.07.2013/01.08.2013) shall be applicable only in cases of retirement on or after 01.04.2016, as the case may be. The existing commutation factor and the period of restoration shall continue. Commuted portion shall be recovered in the next month of payment of commuted value.”
3. Petitioners are persons, who are thus, denied the benefit of commutation of pension at the revised rates of pension for the reason that they retired from service between 01.07.2013 and 01.04.2016, as the benefit of commutation of pension is made admissible on the revised pay only for those who retired after 01.04.2016. Petitioners submit that the cut off date fixed for enjoying the benefit of commutation of pension is unconstitutional and arbitrary and contrary to the dictum laid down by the Supreme Court inD.S.Nakara v. Union of India [ AIR 1983 SC 130 ]. It is pointed out that there is hostile discrimination in denying the benefits to the petitioners only for the reason that they retired between 01.07.2013 and 01.04.2016, when the pay and pension are revised with effect from
01.07.2013.
4. The respondents have filed a counter affidavit, stating that the Full Time Directors of the Board took the decision regarding commutation of pension, considering the financial stringencies being faced by the Board, accepting the modality adopted by the Government in sanctioning the benefits. It is stated that financial position of the Board is very poor and in case the commutation facilities are extended to all the pensioners who retired since 31.03.2014, crores of Rupees would be required to pay the advance commutation of amount. It is stated that petitioners would be entitled to get more pension on account of the revision of pension every month; the benefit of revision is not denied to persons like petitioners; only the benefit of commutation is denied. It is stated that fixing a cut off date cannot be said to be a measure of discrimination. It is further stated that the Board had fixed a similar cut off date in the previous occasion when the revision of pension was ordered as per order dated 11.11.2008. A batch of writ petitions were filed challenging a similar provision restricting the commutation of pension on the basis of date of retirement. By the judgment reported in Kerala State Electricity Board v. Reghukumar [ 2012 (1) KLT 199 ] in W. A. No.1702 of 2010 and connected cases filed by the Board, the
