K.S. Radhakrishnan, J. 1. This appeal is preferred by the chairman of the Cochin Dock Labour Board. The writ petition was preferred by the first respondent-Dock Labour Board Ex-employees Welfare Association (hereinafter called "the association"). The association is a registered association with a membership of 173. They are all ex-employees of the Cochin Dock Labour Board, who retired prior to 1986 under the voluntary retirement scheme after rendering more than 15 years of service. They also wanted similar benefit which was extended to wife and dependent children of CPF beneficiaries who retired prior to January 1, 1986. The learned single judge found that the non-inclusion of those persons was discriminatory and violative of Article 14 of the Constitution of India. Consequently, the directions were issued to extend the ex gratia payment made available to them also in parity with Clause (viii) of exhibit P-1. Aggrieved by the said judgment, the Board has preferred this appeal.
2. The short facts which are necessary for disposal of this appeal are as follows:
The IV Central Pay Commission recommended grant of relief to the families of the deceased civilian Central Government employees who were governed by the Contributory Provident Fund Scheme. This recommendation was under the active consideration of the Government of India. The President of India then decided that the widows and dependent children of the deceased contributory provident fund beneficiaries who had retired from service prior to January 1, 1986, should be granted ex gratia payment of Rs. 150 p.m. with effect from January 1, 1986, or from the date following the date of death of the deceased employee, whichever is later. The payment was also made admissible with effect from January 1, 1986, to the widows and dependent children of the CPF beneficiaries who died while in service prior to January 1, 1986. On the basis of the said decision, the Government of India, Ministry of Surface Transport (Ports Wing), informed the Dock Labour Board, vide exhibit P-1 communication, dated August 13, 1990, that: the orders be implemented with the approval of the Board of Trustees/Dock Labour Board pending formal amendments to Rules/ Regulations if required, in accordance with the prescribed procedure. The clause with which we are concerned in this case is as follows:
"Widows and dependent children of the contributory provident fund beneficiaries who had retired from service prior to January 1, 1986, shall be granted an ex gratia payment of Rs. 150 per month with effect from January 1, 1986, or from the date following the date of death of the employee, whichever is later. This payment shall also be admissible with effect from January 1, 1986, to the widows and dependent children of the contributory provident fund beneficiaries who died while in service prior to January 1, 1986. They will also be paid relief on the ex gratia payment at the rates specified by Government to their retirees."
3. We noticed that on the basis of the recommendation of the Vth Central Pay Commission the Central Government, vide O.M. No. 45/52/97-P and P.W(E) dated December 16, 1997, had decided to grant ex gratia payment to the CPF beneficiaries who retired between November 18, 1960, to December 31. 1995, with effect from November 1, 1997, subject to the condition that such persons should have rendered at least 20 years of continuous service prior to their superannuation for becoming eligible for ex gratia payment.
4. The association and several others then made representations before the Central Government for extension of benefit of ex gratia payment to the living CPF beneficiaries who had retired before January 1, 1986. The Board also forwarded the representation to the Government of India. In response to the said representation the Board received a communication from the Government stating that the benefit had not been extended to the living CPF retirees. The Central Government also reiterated the stand in their communication dated January 9, 1997, stating that the request to grant ex gratia payment to the CPF beneficiaries who retired prior to January 1, 1986, on the lines of ex gratia payment made to the widow/widower of CPF beneficiaries who died prior to January 1, 1986, could not be agreed to.
5. Counsel for the appellant Sri Antony Dominic submitted that the learned single judge committed an error in directing the Board and the Central Government to extend the benefit of ex gratia payment to those CPF beneficiaries who had retired from service prior to January 1, 1986, as well. Counsel submitted that the provision for ex gratia payment to the widows and dependents of CPF beneficiaries was a payment purely on compassionate grounds and not on account of any statutory obligation or liability. Counsel also submitted that the learned single judge misunderstood the scope of the decision of the Supreme Court in D.S. Nakara v. Union of India, AIR 1983 SC 130 :
1983 (1) SCC 305 : 1983-I-LLJ-104. Counsel submitted that the above mentioned decision falls within the sphere of an existing pension scheme and not with regard to any new scheme.
6. Counsel appearing for the association Sri A.X. Varghese on the other hand, submitted that the intention of the liberalised pension scheme was to alleviate the difficulties and hardships suffered by CPF beneficiaries. According to him, there is no logic in not granting the benefit to living CPF beneficiaries. According to him, it is illogical to give benefit only to widows and dependants of those who died and deny the benefits to those who are living. It is his case that the liberalised pension scheme has totally neglected the fact that those employees of the Dock labour Board who had retired before January 1, 1986, are the primary beneficiaries of the scheme and the widows and dependants are only the secondary beneficiaries. In order to resolve the controversy, it is essential to examine the scope of the scheme by which the Central Government has granted ex gratia payment to the widows and dependant children of those CPF beneficiaries who died prior to January 1, 1986.
7. We noticed that the IV Central Pay Commission in Part II of its report recommended the granting of relief to the families of the deceased civilian Central Government employees, who were governed by contributory provident fund scheme. This recommendation was considered by the President of India and it was decided that the widows and dependent children of the deceased CPF beneficiaries who had retired from service prior to January 1, 1986, should be granted ex gratia payment of Rs. 150 p.m. with effect from January 1, 1986, or from the date following the date of death of the deceased employee, whichever is later. It was also ordered that the ex gratia payment should also be admissible with effect from January 1, 1986, to the widows and dependent children of the CPF beneficiaries who died while in service prior to January 1, 1986. For payment of benefit to the widows and dependent children also elaborate procedure has been laid down in the scheme itself. Only if the widows and dependent children satisfy those conditions, they will be entitled to get ex gratia payment. Government recognised widows and dependent children as a group by themselves for the grant of ex gratia payment of Rs. 150 per month. The living CPF personnel who retired prior to January 1, 1986, were not covered by the scheme while benefits were extended to their widows and dependent children. They form a class by themselves as we have already indicated. There is no statutory provision or obligation on the part of the Central Government to effect any ex gratia payment. The provision for ex gratia payment to the widows and dependent children of the CPF beneficiaries was based on a policy decision and not on the basis of any statutory prescription.
8. The learned single judge relying upon the decision in D.S. Nakara's case, (supra) held that the principle laid down therein is applicable to the association as well. According to the learned judge, there cannot be any classification among the retired employees. The learned judge felt that if the members of the association died, then their dependants would be entitled to the benefits, but for living personnel no benefit is extended. This provision, according to the learned judge, is clearly unreasonable and violative of Article 14 of the Constitution of India. The learned judge also held the failure to provide the same benefits that are made available to other employees who have died, would be violative of Articles 29 and 39(e) of the Constitution of India. Reliance was also placed on the Apex Court's decision in Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802 : 1983 (3) SCC 161. The learned judge, therefore, held that there is discrimination in granting the benefits to the widows and dependents of the deceased employees and deprived the same benefit to the living employees.
9. We of the view that the reasoning adopted by the learned single judge cannot be sustained. The widows of the retired CPF beneficiaries as well as the dependant children form a homogeneous class. Widow is put in such a situation that the breadwinner of the family is no more and that she has to sustain herself. The position is all the more precarious if the children are dependent on her. So also the case of dependent Children themselves. In order to alleviate the difficulties experienced by the widow as well as the dependent children of a retired employee who retired prior to January 1, 1986, payment of ex gratia of Rs. 150 per month was effected We are of the view that they cannot be equated with the living CPF beneficiaries who retired prior to January 1, 1986. They are not similarly placed. "Equality" means, equality in similar circumstance between the same class of persons for the same purpose and objects. It cannot operate among unequals. We are of the view that the classification made between the living CPF beneficiaries who retired prior to January 1, 1986, and widow and dependent children of CPF beneficiaries has a reasonable nexus with the objects sought to be achieved and that such classification and differentiation is just and legal. In order to apply a classification as permissible one within the meaning of Article 14 of the Constitution two tests are to be satisfied. (1) That the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group; and (2) that differentia must have a rational relation to the objects sought to be achieved. Applying those tests we are of the view there is a clear distinction between widow and dependent children of the CPF personnels who retired prior to January 1, 1986, and CPF personnel retired prior to January 1, 1986. On the death of the CPF personnel who retired prior to January 1, 1986, the widow and dependent children are placed in such a situation that there is nobody to look after them since the breadwinner is no more. This was one of the factors which was taken note of by the IV" Central Pay Commission. The IV Pay Commission- report-in Part II recommended regarding grant of relief to the families of deceased civilian Central Government employees who were governed by contributory provident fund scheme. It is in implementation of the said recommendation the Government have decided to extend the payment of ex gratia to widows and dependent children of the deceased CPF beneficiaries. The IV Pay Commission in their wisdom never thought it necessary to extend the benefit to the living retired personnel who retired prior to January 1, 1986, which we are of the view is perfectly justified.
10. We are of the view that the legal and factual distinction between those two categories of personnel, that is widow and children of CPF beneficiaries who retired prior to January 1, 1986, and the CPF beneficiaries retired prior to January 1, 1986, is intelligible and clearly distinguished the persons grouped together and left out of the group. Such differentiation has been upheld by the Apex Court in various decisions like State of Rajasthan v. Sevanivatra Karamchari Hitkari Samiti, 1995 (2) SCC 117. The Apex Court held that the wisdom in a policy decision of the Government, as such, is not justiciable unless such policy decision is wholly capricious, arbitrary and whimsical thereby offending the rule of law as enshrined in Article 14 of the Constitution or such policy decision offends any statutory provisions or the provisions of the Constitution.
11. The Supreme Court in various decisions applied the same principle in other areas also. Reference may be made to LIC of India v. Consumer Education and Research Centre AIR 1995 SC 1811 : 1995 (5) SCC 482; Indian Aluminium Company Ltd. v. Karnataka Electricity Board, AIR 1992 SC 2169 : 1992 (3) SCC 580; D.C. Bhatia v. Union of India, 1995-(1) SCC 104. We are of the firm view that the learned single judge has committed an error in taking the view that the widows and dependent children are placed on the same footing as living CPF beneficiaries who retired prior to January 1, 1986.
12. The learned single judge has not ; properly appreciated the decision of the Supreme Court in D.S. Nakara 's case, (supra).
In D.S. Nakara's case the Apex Court considered a case where an artificial date was specified classifying the retirees into two different classes even though they were governed by the same rules and were similarly situated. The Apex Court held such classification where both the groups were governed by the same rules amounted to deprivation of one group of the benefit of liberalisation of pension rules. In the instant case, that principle cannot be imported. This is a case where ex gratia payment was made available on the basis of the liberalised pension scheme to the widow and dependent children of CPF beneficiaries who retired prior to January 1, 1986. Association representing those CPF beneficiaries who retired prior to January 1, 1986, seeking extension of the benefit of a scheme which was made applicable to widows and dependent children to them also. In other words, they wanted introduction of a new provision or a scheme which is beneficial to them. We noticed that D.S. Nakara's case was considered by the Supreme Court on subsequent occasion and explained the principle laid down in Nama's case. Reference was made to the decision in State of Rajasthan v. Sevanivatra Karamchari Hitkari Samiti (supra) wherein the Apex Court relying upon a Constitution Bench decision of the Apex Court in Krishena Kumar v. Union of India 1990 (4) SCC 207, held as follows at p. 125:
"After considering the respective contentions made by learned counsel for the parties, it appears to us that after the impugned decision was made by the Rajasthan High Court, this Court has considered the import of the decision rendered in D. S. Nakara 's case. This Court has noticed the ratio in D. S. Nakara's case as indicated in Krishena Kumar's case and in Indian Ex-services League's case and also in Rajasthan Pensioner Samaj's case, it has been clearly indicated by this Court that the Government servants can be governed by different sets of retiral benefit rules with a reference to their holding of office from a cut-off date. In Krishena Kumar's case it has been indicated that in D.S, Nakara's case this Court considered a case where an artificial date was specified classifying the retirees into two different classes even though they were governed by the same rules and were similarly situated. Such classification where both the groups were governed by the same rules amounted to deprivation of one group of the benefit of liberalisation of pension rules. It was only in that situation it was held in D.S. Nakara's case that specification of the date from which the liberalisation pension rules were to come into force was arbitrary. This Court in D.S. Nakara's case clearly indicated that it was not a new scheme but only a revision of the existing scheme and it was not a new retiral benefit but it was a case of upward revision of existing benefit. In D.S. Nakara's case it was pointed out that if it was wholly a new concept, a new retiral benefit, one could have appreciated an argument that those who had already retired could not expect it. The Constitution Bench in Krishena Kumar's case has upheld different sets of retiral benefits being made applicable to the employees retiring prior to April 1977, and retiring thereafter. It. has been indicated by the Constitution Bench in Krishena Kumar's case that any argument to the contrary would mean that the Government can never change the condition of service relating to retiral benefits with effect from a particular date. It has, however, been pointed out that the State cannot back a date out of its hat but it has to prescribe a date in a reasonable manner having regard to the relevant facts and circumstances."
In this connection reference may also be made to the Decision of the Apex Court in Indian Ex-services League v. Union of India, AIR 1991 SC 1182 : 1991 (2) SCC 104 : 1992-I-LLJ-765, State of Rajasthan v. Rajasthan Pensioner Samaj AIR 1991 SC 1743 : 1991 Supp 2 SCC 141.
14. We have already indicated that subsequently the Central Government passed order dated December 16, 1997, and decided to grant ex gratia payment to the CPF beneficiaries who retired between November 18, 1960, to December 31, 1995 with effect from November 1, 1997, subject to the condition that such persons should have rendered at least 20 years of continuous service prior to their superannuation for becoming eligible for ex gratia payment. We find in this case, the above benefit also would not be available to the members of the association since they have not satisfied 20 years continuous service. Persons who are included in the Government Order dated December 16, 1997 also form a class by themselves, the said benefit extended only to those persons who retired between November 18. 1960, to December 31, 1995, and have rendered at least 20 years of continuous service prior to their superannuation in order to become eligible for ex gratia payment.
15. We are, therefore, of the view that the learned single judge is not right in directing the Central Government as well as the Board to extend the benefit which was made available to the widow and dependent children of those CPF beneficiaries who retired prior to January 1, 1986, to CPF Beneficiaries who retired prior to January 1, 1986, as well. We are of the considered opinion, that is a matter which falls clearly within the domain of the Union of India with which we express no opinion.
16. We, therefore, set aside the judgment of the learned single judge and allow this appeal.