Service law: Pension – Dearness allowance – Claim of retirees for full compensation against price rise on dearness relief – Grievance of retirees was that appellant-bank made distinction in terms of dearness relief on the basis of dates of retirement of pensioners and that denial of benefit of full dearness relief to retirees prior to 1.11.2002 was arbitrary – High Court held that there was no justification for making distinction between pre November 2002 retirees and post November 2002 retirees and the appellant must pay dearness relief to all pensioners at the same rate – Aggrieved, Banks appealed – Held: Each class is governed by distinct and different parameters – The conferral of advantages of benefits on two different classes of retirees has a completely distinct formula and rates and it is not possible to have a synthesis on any count or to put both the sets of retirees on any common parameters – It is thus hazardous to adopt a flat rate – Any attempt to tinker with either the formula or the rate would make the whole scheme unworkable – Both the categories of retirees, namely, pre November 2002 and post November, 2002 stand on different footing, the parameters which govern the computation of dearness relief are also on a different level – High Court failed to appreciate these aspects – The impugned judgment was completely erroneous and is set aside.
Allowing the appeals and dismissing writ petition, the Court
HELD: 1.1 Appendix II to the Pension Regulations had categorized employees in three different segments and the dearness relief payable on basic pension in respect of employees in these three categories was on the basis of tapering formula which differed in each of the categories. In respect of those who were in the first category i.e. those who had retired earliest, the RETIREES’ WELFARE ASSO.
dearness relief was 0.67% on the first slab namely upto Rs.1250/- of basic pension. The rate then tapered and finally was 0.17% of basic pension in excess of Rs.2130/-. At the same time in respect of retirees in the second category, the rate of dearness relief was 0.35 per cent in respect of first slab namely upto Rs.2400/-. Here also the dearness relief was on a tapering formula and finally was 0.09% of basic pension in excess of Rs.4100/-. The third category which was in respect of employees who retired after 01.04.1998, the rate was 0.25% for the first slab upto Rs.3380/-. Going by the tapering formula, the rate was
0.06 per cent of the basic pension in excess of Rs.5770/-. If Clause 7(2) of the 9th Bipartite Settlement dated 27.04.2010 is compared with the last category of the Appendix II of the Pension Regulations, there is hardly any change in respect of retirees during the period 01.04.1998 to 31.10.2002. Thus, whatever benefit was conferred and was enjoyable by the employees who retired before November 2002 was not taken away. [Para 21] [464-G-H; 465-A-D]
1.2 If both categories dealt with by 9th Bipartite Settlement
dated 27.04.2010 are further compared, the retirees prior to 01.11.2002 would be entitled to dearness relief on a tapering formula where the initial slab upto Rs.3550/- is to be governed by quotient of 0.24%. The tapering formula then ends with 0.06% of basic pension in excess of Rs.6010/-. The starting point is at a level of 0.24% while the end point tapers to 0.06%. The maximum advantage is sought to be given to those who are getting basic pension at lower levels of slab who would get the dearness relief at 0.24%. As against this, the retirees after 01.11.2002 are to be given dearness relief at a flat rate of 0.18% of the basic pension. Theoretically, the starting level for the retirees prior to 01.11.2002 is at a higher level of 0.24% as against the retirees after 01.11.2002. It could possibly be said that for those who are with basic pension in the region of Rs.6000/-, on the basis of a tapering formula may well, in the ultimate analysis, average to the same level of 0.18%.[Para 22] [465-E-G]
2. The parity that was sought in the petition was not so much regarding applicability of same rate of 0.18% but was in respect of “flat rate” idea. The calculation of dearness allowance of Rs.14274/- on basic pension of Rs.7880/- in the case of Santipriya Roy is in keeping with tapering formula as given in the Bipartite Settlement dated 27.04.2010. The tabular chart then proceeds to calculate full compensation on account of dearness allowance with slab rate of 0.24% on the entire basic pension of Rs.7880/- which figure comes to Rs.18912/-. Thus the submission was that the dearness relief be computed on 0.24% for the entirety of basic pension and not just for the first slab upto Rs.3550/-. But such calculation completely disregards that rate which is a flat rate applicable in case of post 01.11.2002 retirees is not 0.24% for the entire amount of basic pension but at a different level of 0.18% and the threshold requirement of quarterly average of the Index is also different. If we were to simply borrow the same rate of 0.18% in the case of retirees prior to 01.11.2002, the concerned retirees may well be at a disadvantage. For instance, the basic pension of Rs. 7880/- of said Santipriya Roy would yield a figure of Rs. 14184/- with flat rate of 0.18%. It will not therefore be correct to adopt and apply the same rate as is made applicable in case of post 01.11.2002 retirees. [Para 23] [465-G-H; 466-A-C]
3. The tapering formula undoubtedly begins with 0.24% for the first segment of Rs.3550/- of basic pension and then progressively steps down and finally reaches the level of 0.06% where the basic pension is in excess of Rs.6010/-. What is devised by way of such tapering formula is higher rate at the lower levels of segments so that larger number of peoples would get maximum advantage and the rate thereafter keeps stepping down. The benefit which is sought to be conferred by the tapering formula lies in the averaging which comes to near about the same quantum as is given to the post 01.11.2002 retirees. No illustration has been placed on record to submit that even with 0.18% dearness allowance those who retired after November 2002 walk away with substantially greater advantage as against pre November 2002 retirees. Each class is governed by distinct and different parameters. Both classes are distinct and do not form a homogenous group. It would be extremely difficult and hazardous to adopt a flat rate as is sought to be projected. [Para 24] [466-EG; 467-A-B]
4. Any attempt to tinker with either the formula or the rate would make the whole scheme unworkable. It is true that the RETIREES’ WELFARE ASSO.
tapering formula was done away with by Reserve Bank of India but that by itself cannot entitle the retirees prior to 01.11.2002 either to be conferred the advantage at the same rate made applicable by Reserve Bank of India or at the flat rate of 0.24% as was sought to be projected. [Para 25] [467-C, E]
Indian Ex-Services League and Others v. Union of India and Others (1991) 2 SCC 104 : [1991] 1 SCR 158; Union of India v. P. N. Menon and Others (1994) 4 SCC 68; Kunhayammed and Others v. State of Kerala and Another (2000) 6 SCC 359 : [2000] 1 Suppl. SCR
538 – relied on.
D. S. Nakara v. Union of India (1983) 1 SCC 305 : [1983] 2 SCR 165; Kallakkurichi Taluk Retired Officials Association Tamil Nadu and others v. State of Tamil Nadu (2013) 2 SCC 772 : [2013] 4 SCR 883; Krishena Kumar v. Union of India and Others (1990) 4 SCC 207 : [1990] 3 SCR 352; State of Punjab v. Justice S. S. Dewan (Retired Chief Justice) and Others (1997)
4 SCC 569 : [1997] 3 SCR 1027; Col. B. J. Akkara (Retd.) v. Government of India and Others (2006) 11 SCC 709 : [2006] 7 Suppl. SCR 58– referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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