Hon'ble Vedpal,J.
[By Hon'ble Mr. Justice Devi Prasad Singh]
1.Employees of Development Authorities through its Association and in personal capacity, who were holding various posts including Finance Advisor, Chief Engineer, Chief Town Planner, Executive Engineer, Assistant Engineer and Junior Engineer, etc., have approached this Court under Article 226 of the Constitution of India, thereby claiming post retiral benefits including regular pension at par with the Government employees. Some of the petitioners are employees of various departments of State of U.P., State owned Corporations, Public Undertakings, Municipalities etc., appointed in pursuance of provisions contained in sub-section 2 of Section 5 of U.P. Urban Planning and Development Act, 1973 (in short Act). Their services were later on, absorbed as the members of Centralised Services created under the U. P. Development Authorities Centralised Service Rules, 1985 (in short Centralised Service Rules) which came into force with effect from 25.6.1985 under Section 5(A) of the Act.
2.Under the Act, following categories of persons have been appointed in Development Authorities of the State namely:
1.Officers appointed under sub-section (1) of Section 5 of the Act on the post of Secretary and Chief Accounts Officer of the Development Authorities.
2.Officers/employees appointed under sub-section (2) of Section 5 of the Act by the Development authorities in required number and designation in appropriate grade.
3.The employees or officers initially appointed against pensionable post in various departments of State of U.P., State owned Corporation and Public Undertakings, having served as such for some period and later on, appointed as Officers in various Development Authorities under Section 5 (2) of the Act.
4.The employees and officers appointed under the Development Authorities later on, were absorbed in Centralised Service. Persons appointed under sub-section (3) and (4) of Section 59 of the Act.
3.Out of 4 categories, all employees and officers appointed in pursuance of sub-section (1) of Section 5, sub-section (3) and (4) of Section 59 of the Act, have been paid pension except the petitioners who fall within the second category i.e., appointed in pursuance of powers conferred by sub-section (2) of Section 5 of the Act.
4.Even some of the employees falling in the present categories, are being paid pension in pursuance of the orders passed by this Court.
Smt. Rita Bhatnagar wife of late Anil Bhatnagar is being paid pension in pursuance of the order dated 13.12.2001 passed in Civil Misc. Writ Petition No.42495 of 2001. Sri Girija Shanker Mishra from all Centrallised Service, is being paid pension in pursuance of the Government order dated 12.9.2003. In pursuance of the Government order dated 29.9.1983, the all class-III and class-I employees of Development Authorities have been sanctioned pension by the respective Development Authorities.
5.It has been submitted by the petitioners' counsel that all those employees who retired upto 5.4.1999 belonging to petitioners category, have been paid pension without any break. Those, who were serving in erstwhile Municipal Board and joined the Development Authorities, have been paid regular pension. During the course of employment, provident fund was deducted from petitioners salary by respective Development Authorities in accordance with U.P. Palika Centrlaised Services Rules, 1966. Some of the petitioners were also permitted to withdraw advance from provident fund. The respective Development Authorities, have been contributing their shares in the form of pension fund or in the name of contributory provident fund. The contributed fund has been deposited in pension fund in accordance with the U.P. Palika Centralised Services Rules, 1966 or in the provident fund of the respective employees as the case may be. After creation of Development Authorities under 1973 Act, the Government order dated 17.3.1983 was issued providing therein that till model pension is framed by the Development Authorities, employees of Development Authorities would be entitled for pension in accordance with Uttar Pradesh Palika Centralised Services Retirement Benefit Rules, 1981.
6.Thereafter, another Government order dated 29.9.1983 was issued providing therein that pension to class-III and class-IV employees of Development Authorities, should be sanctioned and paid by Vice-Chairman of the respective Development Authorities whereas, with respect to the remaining i.e.,Class-II and Class-I officers, the sanction of pension shall be made by the State Government till finalisation of Development Authorities retirement benefits Rules.
7.A combined reading of Government order dated 17.3.1983 and 29.9.1983, shows that Government took decision for payment of pension to employees and officers of Development Authorities till formulation and enforcement of model pension regulations.
8.Model pension Rule was drafted and approved by the Finance Department. The Draft Rules namely, U. P. Urban Planning and Development Centralised Services, Service Retirement Rules, 1997, was placed before the Cabinet in the year 1997 and the Cabinet thereafter, constituted a Committee headed by Chief Secretary of U.P. Government to look into the matter. The petitioners' submitted that the Committee headed by the Chief Secretary has principally agreed for payment of pension but no Rules or Regulations have been framed till date. Instead of framing Rules or Regulations, by the impugned order dated 5.4.1999 (Annexurre No.7 to the writ petition), it has been clarified that with regard to employees of the Development Authorities, no decision has been taken for payment of pension and they are not entitled for payment of pension. The impugned order has been again supplemented by another Government order dated 5.5.1999 (Annexure No.8 to the writ petition). However, a perusal of the Government order dated 5.5.1999 shows that principally, the Government has been agreed to pay pension to employees of Centralised Services appointed in pursuance of sub-section (2) of Section 5 of the Act.
9.On one hand, the Government principally agreed with regard to payment of pension to the petitioners and took a decision to frame Rules or Regulations for the purpose but on the other, the State Government has kept the matter pending since last 15 years. It may be noted that all the Development authorities had informed the Government that they possess sufficient fund to meet out the requirement with regard to payment of pension to the retired employees who were appointed in pursuance of sub-section (2) of Section 5 of the Act but even then no formal decision has been taken and communicated by the Government for framing appropriate Rules or Regulations to ensure payment of pension.
10.It has been vehemently argued by the petitioners' counsel that the petitioners are entitled for payment of pension in terms of Government order of the year 1983 (supra) ignoring the Government order dated 5.4.1999 as they are employees of Centralised Services.
Statutory Provisions
11.Section 5 of the Act empowers the State Government and Development Authorities to make appointment on the post falling within their jurisdiction. For convenience, Section 5 is reproduced as under:
"5. Staff of the Authority.--(1). The State Government may appoint two suitable persons respectively as the Secretary and the chief accounts officer of the Authority who shall exercise such powers and perform such duties as may be prescribed by regulations or delegated to them by the Authority or its Vice-Chairman.
(2)Subject to such control and restrictions as may be determined by general or special order of the State Government, the Authority may appoint such number of other officers and employees as may be necessary for the efficient performance of its functions and may determine their designations and grades.
(3)The Secretary, the Chief Accounts Officer and other officers and employees of the Authority shall be entitled to receive from the funds of the Authority such salaries and allowances and shall be governed by such other conditions of service as may be determined by regulations made in that behalf."
12.Section 5-A in the Act, was inserted by the Amending Act No.21 of 1985 with effect from 22.10.1984. Under Section 5-A, all persons working in the Development Authorities upon creation of Centralised Services, unless opt otherwise, shall be absorbed. Section 5-A of the Act is reproduced as under:
5-A. Creation of Centralised Services.---(1). Notwithstanding anything to the contrary contained in Section 5 or in any other law for the time being in force, the State Government may at any time, by notification, create one or more 'Development Authorities Centralised Services' for such posts, other than the posts mentioned in sub-section (4) of Section 59, as the State Government may deem fit, common to all the Development Authorities, and may prescribe the manner and conditions of recruitment to, and the terms and conditions of service of persons appointed to such service.
(2)Upon creation of a Development Authorities Centralised Service, a person serving on the posts included in such service immediately before such creation, not being a person governed by the U.P. Palika (Centralised) Services Rules, 1966, or serving on deputation, shall, unless he opts otherwise, be absorbed I n such service,---
(a) finally, if he was already confirmed in his post, and
(b) provisionally, if he was holding temporary or officiating appointment.
(3)A person referred to in sub-section (2) may, within three months from the creation of such Development Authorities Centralised Service communicate to the Government in the Housing Department, his option not to be absorbed in such Centralised Service, failing which he shall be deemed to have opted for final or provisional, as the case may be, absorption in such Centralised Service.
(4)Suitability of a person absorbed provisionally, for final absorption in a Development Authorities Centralised Service, shall be examined in the manner prescribed and if found suitable he shall be absorbed finally.
(5)The services of an employee who opts against absorption or who is not found suitable for final absorption, shall stand determined and he shall, without prejudice to his claim to any leave, pension, provident fund or gratuity which he would have been entitled to, be entitled to receive as compensation from the Development authority concerned, an amount equal to---
(a) three months' salary, if he was a permanent employee;
(b) one month's salary, if he was a temporary employee.
Explanation.---For the purpose of this sub-section the term 'salary' includes dearness allowance, personal pay and special pay, if any.
(6)It shall be lawful for the State Government or any officer authorised by it in this behalf, to transfer any person holding any post in a Development Authorities Centralised Service from one Development authority to another."
13.State Government issued Notification dated 22.10.1984 in pursuance of powers conferred under sub-section (1) of Section 5-A of the Act, creating Development Authorities Centralised Services for the post specified therein, common to all Development Authorities. Admittedly, the petitioners services have been absorbed and belong to Centralised Service. Section 24 of the Act deals with the payment of pension and provident fund. Section 24 of the Act provides that authority may constitute for the benefit of its whole-time paid members and of its officers and other employees in such manner and subject to such conditions, as the State Government may specify, such pension or provident funds as it may deem fit and in case it is done, the State Government shall declare that provision of the Provident Funds Act, 1925, shall apply. Statutory provisions contained in the Act reveals that for the benefit of serving employees, the provisions may be made for payment of pension and provident fund as deemed fit by the State Government. For convenience Section 24 of the Act is reproduced as under:
"24. Pension and Provident fund.---(1) The Authority may constitute for the benefit of its whole-time paid members and of its officers and other employees in such manner and subject to such conditions, as the State Government may specify, such pension or provident funds as it may deem fit.
(2)Where any such pension or provident fund has been constituted, the State Government may declare that the provisions of the Provident Funds Act, 1925, shall apply to such fund as if it were a Government Provident Fund."
14.U. P. Development Authorities Centralised Service Rules, 1985 was notified on 25.6.1985 and according to it, State Government shall be the appointing authority and persons absorbed under Rule shall be the members of service. The cadre and strength of service has been given under Rule 3. The age of superannuation has been provided under Rule 34. Rule 37 provides that any matter not covered by these Rules or by special orders, the members of service, shall be governed by Rules, Regulations and orders applicable generally to the U.P. Government servants serving in connection with the affairs of the State. For convenience, Rule 34 and 37 is reproduced as under:
"34. (1) Subject to the provisions of Sub-rules (2) and (3), the age of retirement from service of all officers and other employees of the service shall be sixty years beyond which no one shall ordinarily be retained n the service.
(2)The appointing authority may, at any time, by three months notice in writing or three months pay in lieu thereof to any officer or other employees of the service (whether permanent or temporary) without assigning any reason, require him to retire in public interest after he attains the age of fifty years.
(3)An officer or other employee of the service may be three months notice to the appointing authority seek voluntary retirement at any time after attaining the age of fifty years provided he has completed qualifying service for twenty years. The retirement under the sub-rule shall take effect only after the appointing authority has allowed the officer or other employee of the service to retire.
Provided that it shall be open to the appointing authority to allow an officer or other employee of the service to retire without any notice or by a shorter notice.
(4)A retiring pension and/or other retirement benefits, if any, shall be available in accordance with and subject to the provisions of the relevant rules applicable to every officer or other employees who retires or is required or allowed to retire under this rule.
Explanation--(1) The decision of the appointing authority under sub-rule (2) to require the officer or other employee to retire as specified therein shall be taken if it appears to the appointing authority to be in public interest but nothing herein contained shall be construed to require any recital in the order of such decision having been taken in the public interest.
(2)Every such decision shall, unless the contrary is proved, be presumed to have been taken in the public interest."
"37. (1) If any dispute of difficulty arises regarding interpretation of any of the provisions of these rules, the same shall be referred to the Government whose decision shall be final.
(2)In regard to the matters not covered by these rules or by special orders, the members of service shall be governed by the rules, regulations and orders applicable general to U.P. Government servants serving in connection with the affairs of the State.
(3)Matters not covered by sub-rules (1) and (2) above shall be governed, by such orders as the Government may deem proper to issue."
15.Admittedly, all the employees who were working earlier in Nagar Palika, Nagar Nigam and later on, whose services were merged and absorbed with the Centralised Services, are being paid regular pension in pursuance of the provisions of Section 59 (3) and (4) of the Act. The benefit available to them, have not been withdrawn. It has also been admitted at bar that persons appointed in pursuance of sub-section (1) of Section 5 of the Act, have been paid regular pension. Services of persons working in the U.P. Palika Centralised Service under Section 66, have been absorbed under sub-section (2) of Section 5-A of the Act. Except the persons appointed in pursuance of the powers under sub-section (2) of Section 5 of the Act, all persons have been paid regular pension. It may be noted that Section 24 of the Act is equally applicable to all the incumbent appointed in Development Authorities including the petitioners or the persons absorbed from Palika Centralised Service. Even to petitioners cadre, regular pension was being paid upto 1999 in pursuance of the provisions contained in the Act, Rules (supra), and the two Government orders:One dated 17.3.1983 and other, dated 29.9.1983. It shall be appropriate to reproduce the above two Government orders dated 4.3.1983. The Government order dated 17.3.1983 is reproduced as under:
"प्रेषक, श्री आनन्द स्वरूप वर्मा, संयुक्त सचिव, उत्तर प्रदेश शासन ।
सेवा में, उपाध्यक्ष, समस्त विकस प्राधिकरण, लखनऊ ।
उपर्युक्त विषयक लखनऊ विकस प्राधिकरण के पत्रांक ११२/सीएओ/पांच, दिनांक ११-१०-१९८२ के संदर्भ मे मुझे आपको यह सूचित करने का निर्देश हुआ है कि उत्तर प्रदेश नगर योजना और विकास अधिनियम १९७३ की धारा ५६(२) (ग) के अधीन प्रत्येक प्राधिकरण को अपने सेवा निवृत्त कर्मचारियों को पेंशन का भुगतान किये जाने हेतु शासन के पूर्वनुमोदन से विनियमावली बनानी है किन्तु अब तक किसी भी प्राधिकरण से, इस प्रयोजनार्थ आदर्श विनियमावली बनाये जाने हेतु कोई प्रारूप प्राप्त नहीं हुए हैं । अतएव यह अनुरोध है कि आदर्श विनियमावली बनाये जाने हेतु आवश्यक प्रारूप शासन को यथाशीघ्र उपलब्ध कराने का कष्ट करें ।
२- यह भी सूचित करना है कि पैरा १ में उललिखित आदर्श विनियमावली में कुछ समय लगेगा अतएव शासन द्वारा यह भी निर्णय लिया गया है कि ऎसी विनियमावली बनने तक उक्त अधिनियम की धारा ५९ (३) के अनुसरण में स्थानीय महापालिका की पेंशन नियमावली में, सक्षम प्राधिकारी में आवश्यक संशोधन मानते हुए, संदर्भित नियमावली के प्राविधानों के अनुसार ही, सेवानिवृत्त अधिकारियों व कर्मचारियों को पेंशन स्वीकृत की जाय ।
भवदीय, अपठनीय (आनन्द स्वरूप वर्मा) संयुक्त सचिव ।
संख्याः- ३७/३७,-२-१३३डीए/७८, तद् दिनांक प्रतिलिपि परीक्षक, स्थानीय निधि लेखा उत्तर प्रदेश इलाहाबाद को आवश्यक कार्यवाही हेतु प्रेषित ।
आज्ञा से, (आनन्द स्वरूप वर्मा) संयुक्त सचिव ।"
16.The Government order dated 29.9.1983, which is a clarificatory order, is reproduced as under:
"संख्या- ६७७८/३७-२-१३३डीए/७ प्रेषक, श्री आनन्द स्वरूप वर्मा, संयुक्त सचिव, उत्तर प्रदेश शासन, सेवा में, उपाध्यक्ष, कानपुर विकस प्राधिकरण, कानपुर ।
अनुभाग-२ लखनऊ दिनांक २९ सितम्बर, १९८३ विषयः- विकास प्राधिकरण कर्मचारियों की पेंशन स्वीकृति महोदय,
उपर्युक्त विषयक आपके पत्रांक ९५७/एल०डी०के०डी०ए०/दिनांक ३० अगस्त १९८३ के सन्दर्भ में मुझे आपको यह सूचित करने का निर्देश हुआ है कि उक्त पत्र में वर्णति परिस्थितियों में शासनादेश संख्या ३६/ ३७-२-१३३डीए/७८ दिनांक १७ मार्च १९८३ के पैरा २ में सूचित व्यवस्था के क्रम में यह निर्णय लिया गया है कि आदेश नियमावली बनने तक विकास प्राधिकरण के तृतीय एवं चतुर्थ श्रेणी के सेवानिवृत्त कर्मचारियों की पेंशन, परीक्षक स्थनीय निधि लेखा, (अथवा महालेखाकार, उत्तर प्रदेश) की संस्तुति के बजाए विकास प्राधिकरण में तैनात उत्तर प्रदेश वित्त एवं पेंशन सेवा के मुख्य लेखा अधिकारी की संस्तुति पर स्वयं उपाध्यक्ष, द्वारा स्वीकृत की जाए।
भवदीय, (आनन्द स्वरूप वर्मा) संयुक्त सचिव ।
संख्याः- ६७७८(१) / ७-२-१३३डीए/७८ तद् दिनांक प्रतिलिपि समस्त विकास प्राधिकरणों के उपाध्यक्षों को उपर्युक्त निर्णय के अनुसार पेंशन प्रकरणों में आवश्यक कार्यवाही हेतु ।
आज्ञा से, (आनन्द स्वरूप वर्मा) संयुक्त सचिव ।
संख्याः सा०/प्रा० दिनांकः प्रतिलिपि समस्त विभागाध्यक्षों को सूचनार्थ एवं आवश्यक कार्यवाही हेतु प्रेषित । अनुसचिव ।"
17.The important factor seems to lie in favour of the petitioners. Keeping in view Section 24 of the Act, the contributory provident fund were deducted during the entire service period. It has also not been disputed that the Development Authorities have informed the Government in writing that they have sufficient fund to meet out the expense with regard to payment of pension (around 50 crores). In such situation more so when the regular pension was paid upto 1999 to the persons appointed in pursuance of sub-section (2) of Section 5 of the Act and retired upto 1999, then no plausible and justified ground has been pointed out by the respondents with regard to denial of pension to the petitioners or employees who retired subsequently.
18.It is settled law that while considering the statutory provisions or intent of Legislature, each and every word, Act, or Rule, should be taken into account and be given meaning. The provision contained in the Act or Rules, should not be read in piecemeal. They should be given meaning by reading each section, para as well as the entire Act or Rule, vide (2002) 4 SCC 297 Grasim Industries Limited v. Collector of Customs; (2003) 3 SCC 410 Easland Combines v. CCE; (2006) 5 SCC 745 A. N. Roy v. Suresh Sham Singh and (2007) 10 SCC 528 Deewan Singh v. Rajendra Prasad Ardevi and other.
19.In view of the above, once all persons have been given regular pension appointed in view of the same Act and rules and even the petitioners' cadre was also paid regular pension upto the year 1999, then there appears to be no embargo under the Act or Rule to stop the payment of pension to the petitioners' cadre who retired after 1999. The impugned order seems to be an instance of non-application of mind to the statutory provisions as well as Rules. Once the State Government exercised its discretion in pursuance of the power conferred by Section 24 of the Act for payment of pension to all the employees working in the Development Authorities including the petitioners cadre, the stoppage of payment of petition to petitioners at later stage, seems to be unjust, improper and discriminatory.
20.Hon'ble Supreme Court in the case reported in AIR 1954 SC 224: M/s.Dwarka Prasad Laxmi Narain. Vs. State of Uttar Pradesh and others, held that limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. A Legislation or order which is arbitrary or excessively invades the right, cannot be said to contain the quality of reasonableness unless it strikes a proper balance.
21.In the case reported in AIR 1964 SC 179: T. Devadasan Vs. Union of India and another, Hon'ble Supreme Court held that State shall not deny to any person the equality before law or equal protection before laws within the territory of India. The equality provided by Article 14 is equal among equals. The aim of Article 14 is to ensure that individual distinction or arbitrary discrimination shall not be made by the State between a citizen and a citizen who answer the same description and the differences which may obtain between them are of no relevance for the purpose of applying a particular law, reasonable classification is permissible.
22.In (1971) 2 SCC 188: Mohd. Usman and others Vs. State of Andhra Pradesh, their lordships held that equality is attracted not only when equals are treated as unequals but also where unequals are treated as equals. In case Statutes oblige every person extending certain benefit then one cannot be denied from the benefit available under the Statutes.
23.In (1974) 4 SCC 3: E.P. Royappa. Vs. State of Tamil Nadu and another, the everlasting observation of Hon'ble Supreme Court shall regulate the society for all times to come. The Hon'ble Supreme Court observed that Article 14 is the genus while Article 16 is a species. Equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. It shall be appropriate to reproduce relevant portion from Royappa case (supra) as under:
"85. ... Art. 16 embodies the fundamental guarantee that Arts. 14 as there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. Though enacted as a distinct and independent fundamental right because of its great importance as a principle ensuring equality of opportunity in public employment which is so vital to the building up of the new classless egalitarian society envisaged in the Constitution, Art. 16 is only an instance of the application of the concept of equality enshrined in Art. 14. In other words, Art. 14 is the genus while Art 16 is a species, Art. 16 gives effect to the doctrine of equality in all matters relating to public employment. The basic principle which, therefore, informs both Arts. 14 and 16 is equality and inhibition against discrimination. Now, what is the content and reach of this great equalising principle? It is a founding faith, to use the words of Bose J., "a way of life", and it must not be subjected to a narrow pedantic or lexicographic approach. We cannot countenance any; attempt to truncate its all-embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be "cribbed cabined and confined" within traditional and doctrinaire limits. From a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Art. 14, and if it affects any matter relating to public employment, it is also violative of Art. 16. Arts. 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. They require that State action must be based on valid relevant principles applicable alike to all similarly situate and it must not be guided by any extraneous or irrelevant considerations because that would be denial of equality. Where the operative reason for State action, as distinguished from motive inducing from the antechamber of the mind, is not legitimate and relevant but is extraneous and outside the area of permissible considerations, it would :amount to mala fide exercise of power and that is hit by Arts.14 and 16. Mala fide exercise of Power and arbitrariness are different lethal radiations emanating from the same vice : in fact the matter comprehends the former. Both are inhibited by Arts. 14 and 16."
24.In (1974) 4 SCC 335: The General Manager South Central Railway Secunderabad and another. Vs. A.V.R. Siddhantti and others, Hon'ble Supreme Court reiterated the Royappa's case (supra) and held that fundamental right and equality means that persons in like situation under like circumstances, are entitled to be treated alike. So long as employees similarly circumstanced in the same class of service are treated alike, the question of hostile discrimination does not arise.
25.In (1981) 4 SCC 335:Air India. Vs. Nergesh Meerza and others, Hon'ble Supreme Court has summed up the equality clause as well as settled the law in para 39 thereof, as under:
"39. Thus, from a detailed analysis and close examination of the cases of this Court starting from 1952 till today, the following propositions emerge:
(1)In considering the fundamental right of equality of opportunity a technical, pedantic or doctrinaire approach should not be made and the doctrine should not be invoked even if different scales of pay, service terms, leave, etc., are introduced in different or dissimilar posts.
Thus, where the class or categories of service are essentially different in purport and spirit, Article 14 cannot be attracted.
(2)Article 14 forbids hostile discrimination but not reasonable classification. Thus, where persons belonging to a particular class in view of their special attributes, qualities, mode of recruitment and the like, are differently treated in public interest to advance and boost members belonging to backward classes, such a classification would not amount to discrimination having a close nexus with the objects sought to be achieved so that in such cases Article 14 will be completely out of the way.
(3)Article 14 certainly applies where equals are treated differently without any reasonable basis.
(4)Where equals and unequals are treated differently, Article 14 would have no application.
(5)Even if there be one class of service having several categories with different attributes and incidents, such a category becomes a separate class by itself and no difference or discrimination between such category and the general members of the other class would amount to any discrimination or to denial of equality of opportunity.
(6)In order to judge whether a separate category has been carved out of a class of service, the following circumstances have general to be examined:
(a) the nature, the mode and the manner of recruitment of a particular category from the very start,
(b) the classifications of the particular category,
(c) the terms and conditions of service of the members of the category,
(d) the nature and character of the posts and promotional avenues,
(e) the special attributes that the particular category possess which are not to be found in other classes, and the like."
26.In (1989) Supp-1 SCC 116=AIR 1989 SC 307: Roop Chand Adlakha and others. Vs. Delhi Development Authority and others, Hon'ble Supreme Court has observed that classification shall depend upon whether the differences are relevant to the goals sought to be reached by the law which seeks to classify. Overdo classification is to undo equality. Their lordships held that process of classification is in itself productive of inequality and in that sense antithetical of equality. However, the process of classification itself cannot be permitted to generate or aggravate inequality. Hon'ble Supreme Court cautioned that undisclosed or unknown reason for a classification rendering the precious guarantee of equality "a mere rope of sand". Relevant paragraphs from the case of Roop Chand Adlakha (supra) are reproduced as under:
"19. But then the process of classification is in itself productive of inequality and in that sense antithetical of equality. The process would be constitutionally valid if it recognises a pre-existing inequality and acts in aid of amelioration of the effects of such pre-existence inequality. But the process cannot in itself generate or aggravate the inequality. The process cannot merely blow up or magnify insubstantial or microscopic differences on merely meretricious or plausible differences. The overemphasis on the doctrine of classification or any anxious and sustained attempts to discover some basis for classification may gradually and imperceptibly deprive the article of its precious content and end in replacing doctrine of equality by the doctrine of classification. The presumption of good faith in and of constitutionality of a classification cannot be pushed to the point of predicating some possible or hypothetical but undisclosed and unknown reason for a classification rendering the precious guarantee of equality "a mere rope of sand".
20. "To overdo classification is to undo equality." The idea of similarity or dissimilarity of situations of persons, to justify classification, cannot rest on merely differentia which may, by themselves be rational or logical, but depends on whether the differences are relevant to the goals sought to be reached by the law which seeks to classify. The justification of the classification must needs, therefore, to be sought beyond the classification. All marks of distinction do not necessarily justify classification irrespective of the relevance or nexus to objects sought to be achieved by the law imposing the classification."
27.In (1978) 1 SCC 248: Msr. Maneka Gandhi. Vs. Union of India and another, while reiterating the principle enunciated in Royappa's case (supra) and other cases, their lordships held that equality and arbitrariness both are sworn enemies. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14 which strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Article 14 like a brooding omnipresence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14.
28.In (2001) 1 SCC 442: K. R. Lakshman and others. Vs. Karnataka Electricity Board and others, their lordships reiterated that classification must satisfy two conditions namely, the classification to be founded on intelligible differentia which distinguishes persons or things that are grouped from others who are left out of the group and that the differentia must have a rational relation to the object sought to be achieved by the legislation. There must be a nexus between the basis of classification and the object of the legislation.
29.In the case reported in (1971) 2 SCC 330: Deokinandan Prasad. Vs. The State of Bihar and others, their lordship held that right to receive pension is property under Article 31 (1) and by a mere executive order the State had no powers to withhold the same. Hon'ble Supreme Court observed as under:
"27. The last question to be considered, is, whether right to receive pension by a Government servant is property, so as to attract Articles 19 (1 (f) and 31 (1) of the Constitution. This question falls to be decided in order to consider whether the writ petition is maintainable under Article 32. To this aspect, we have already adverted to earlier and we now proceed to consider the same.
28. According to the petitioner the right to receive pension is property and the respondents by an executive order, dated June 12, 1968, have wrongfully withheld his pension. That order affects his fundamental rights under Articles 19 (1) (f) and 31 (1) of the Constitution...."
Hon'ble Supreme Court further observed that pension is not to be treated as bounty payable on sweet will and pleasure of the Government and the right to superannuation pension including its amount is a valuable right vesting in a Government servant.
30.In the case reported in (1973) 1 SCC 120: State of Punjab. Vs. K.R. Erry and Sobhag Rai Mehta, Hon'ble Supreme Court ruled that right of Government servant to receive pension is property under Article 31 (1) and by mere executive order the State Government did not have power to waive the same.
31.In the case reported in (1983) 1 SCC 305: D.S. Nakara and others. Vs. Union of India, the leading judgment of Hon'ble Supreme Court with regard to twin grounds for test of reasonable classification and rational principle corelated to the object sought to be achieved. The burden of proof lies on the State to establish that these twin tests have been satisfied. It can only be satisfied if the State establishes not only the rational principle on which classification is founded but correlate it to the objects sought to be achieved.
32.Hon'ble Supreme Court relying upon the Deokinandan Prasad (supra) and State of Punjab (supra) observed that antequated notion of pension being a bounty, a gratuitous payment depending upon sweet will or grace of employer has been swept under the carpet by the decision of Constitution Bench in Deokinandan Prasad (supra). It shall be appropriate to reproduce relevant portion of para 20 and 22 from the judgment of D.S. Nakara (supra), as under:
"20. The antequated notion of pension being a bounty, a gratuitous payment depending upon the sweet will or grace of the employer not claimable as a right and, therefore, no right to pension can be enforced through Court has been swept under the carpet by the decision of the Constitution Bench in Deokinandan Prasad v. State of Bihar: 1971 (Supp) SCR 634: (AIR 1971 SC 1409) wherein this Court authoritatively ruled that pension is a right and the payment of it does not depend upon the discretion of the Government but is governed by the rules and a government servant coming within those rules is entitled to claim pension. It was further held that the grant of pension does not depend upon anyone's discretion. It is only for the purpose of quantifying the amount having regard to service and other allied matters that it may be necessary for the authority to pass an order to that effect but the right ot receive pension flows to the officer not because of any such order but by virtue of the rules. This view was reaffirmed in State of Punjab v. Iqbal Singh, (1976) 3 SCR 360: (AIR 1976 SC 667).
22. In the course of transformation of society from feudal to welfare and as socialistic thinking acquired respectability, State obligation to provide security in old age, an escape from undeserved want was recognised and as a first step pension was treated not only as a reward for past service but with a view to helping the employee to avoid destitution in old age. The quid pro quo was that when the employee was physically and mentally alert, he rendered unto master the best, expecting him to look after him in the fall of life. A retirement system therefore, exists solely for the purpose of providing benefits. In most of the plans of retirement benefits, everyone who qualifies for normal retirement receives the same amount (see Retirement Systems for Public Employees by Bleakney, p 33)."
33.In D.S. Nakara (supra) their lordships further observed that in welfare State, its political society introduces a welfare measure where retiral pension is grounded on considerations of State obligation to its citizens who having rendered service during the useful span of life must not be left to penury in their old age, but the evolving concept of social security is a later day development. The term pension is applied to periodic payment of money to a person who retires at a certain age, considered age of disability and the payment usually continues for the rest of the natural life of the recipient. The reason for underlying the grant of pension vary from country. Pension is a measure of socio-economic justice which inheres economic security in the fall of life when physical and mental prowess is ebbing corresponding to ageing process and, therefore, one is required to fall back on savings. Hon'ble Supreme Court further reiterated that the pension is not a bounty or gracious payment and it does not depend upon the discretion of the Government and the person entitled for pension under statute, may claim it as a matter of right.
34.In the case reported in (1987) 2 SCC 179: State of Uttar Pradesh. Vs. Brahm Datt Sharma and another, while reiterating the aforesaid well settled proposition of law with regard to pension, Hon'ble Supreme Court observed that pension is right of property earned by Government servant on his rendering satisfactory service to the State. These principles have been reiterated in the case reported in 1992 Supple SCC 664: (AIR 1992 SC 767) All India Reserve Bank Retired Officers Association and others. Vs. Union f India and another.
35.Coming to the present dispute, Section 24 of the Act applies equally, to all categories of employees working in the Development Authorities with regard to payment of pension. The petitioners appointed under Section 2 and 5, were paid pension upto the year 1999. The employees absorbed in the Development authorities under Section 59 (3) and (4), are being pension, then their appears to be no rational behind the passing of the impugned order thereby stopping the pension of the employees retired after 1999. There is no nexus with the object sought to achieve more so, when the State Government admitted with regard to petitioners' entitlement of pension and also the availability of fund. Since 1999, only assurance has been given that the matter is under consideration. Right flowing from the Act and the Rules (supra), has been miserably skulked down. In a very high handedness and arbitrariness manner, the Government has stopped the facility of pension to the petitioners cadre after 1999 without any reasonable cause. The clarificatory order of the year 1983, seems to have been issued in letter and spirit keeping in view the statutory provisions but the impugned order seems to be an instance of non-application of mind suffering from vice of arbitrariness and without taking into account the fact that the pensionary benefits are the fundamental right protected by Article 31 (1) of the Constitution.
36.The burden was on State Government to establish the nexus of the object sought to be achieved and rational behind the impugned order. Except the argument on behalf of the State that under the rules and statutory provisions, the petitioners are not entitled for payment of pension, the State has not brought on record any material which may justify the issuance of the impugned order superseding the earlier two Government orders issued in the year 1983.
37.How and in what circumstances the State has taken different view while stopping the pension to the employees and the petitioners, is not borne out either from the record or from the argument advanced by the learned State counsel. The command of Section 24 of the Act is equally applicable to all category of employees working in the Development authorities collectively discharging their obligations under the Act. They cannot be treated differently with regard to payment of pension and more so when as held by Hon'ble Supreme Court, the pension is not a bounty but it is a property protected by Article 31 (1) of Constitution. Keeping in view the dictum of D.S. Nakara (supra), the State has failed to discharge its burden to prove the justification or rational in passing the impugned order.
38.Submission of the petitioners counsel that the impugned order is an incident of hostile discrimination as well as the arbitrary exercise of power, seems to be correct and is in right perspective. The State Government has failed to establish the rational behind passing the impugned order and stopping the pension after 1999 more so when the fund is available and principally being agreed with regard to payment of pension earlier in the year 1983, decision was taken to pay pension and the same was paid upto 1999.
39.The plain reading of Section 5 (A) read with Section 24 of the Act, makes out a case for petitioners entitlement for receiving pension from the respondents.
40.There is one other aspect of the matter. Rule 34 of the Rules, covers all the employees of the Development Authorities with regard to retiral pension and other retiral benefits. Rule 37 categorically provides that matter not covered under Sub-Rule (1) and (2), shall be governed by all such orders as the State Government may deem proper. Sub-Rule (3) of Rule 37 has been meant to fill up vacuum. Sub-rule (2) specifically provides that matters not covered by these Rules or by special orders, the members of service shall be governed by the Rules, Regulations and Orders applicable generally, to U.P. Government Servant serving in connection with the affairs of the State.
41.The two Government orders dated 4.3.1983 and 17.3.1983 seem to have been issued to clarify the position keeping in view the Sub-Rule (2) of Rule 37. Admittedly, employees of State Government are being paid pension in pursuance of provisions contained in Financial Handbook and Civil Services Regulations. Accordingly, unless the separate provision is made, the petitioners case shall be governed by Sub-rule (2) of Rule 37 of 1985 rules.
42.Right of State Government to regulate pension in pursuance of power conferred by Sub-rule (3) of Rule 37, ordinarily, shall be available only in case, there would have been no rule regulating pension of the State Government employees. Accordingly, while issuing the Government order or circulars, the State Government could not have stopped the payment of pension as has been done by the impugned order. It shall amount to curtail statutory right of the petitioners flowing from Section 24 read with Rule 37 (2) of the Act.
43.The impugned order virtually, overrides and violates the petitioners statutory rights avilable under Rule 37 (2) of the Rules read with Section 24 of the Act. Hence the impugned order seems to be arbitrary and hit by Article 14 of the Constitution.
44.We may not miss out sight to provision contained in Rule 38 of the Rules which is reproduced as under:
"38. Where the Government is satisfied that the operation of any rule regulating the conditions of service of the member of service causes undue hardship in any particular case, it may, notwithstanding anything contained in the rules applicable to the case by order, dispense with or relax the requirement of that rule to such extent and subject to such conditions as it may consider necessary for dealing with the case in a just and equitable manner."
45.A plain reading of Rule 38 shows that power conferred with the State Government is to remove difficulties in extension of benefits available under the Act or Rules itself. It is not meant to deprive the employees from the statutory benefits like pension or other alike matters. The Government by its orders or circulars, may add the benefit but cannot take away keeping in view the letter and spirit of Rule 38 of the Rules and any decision taken by the Government through Government order or circular without amending Rules or statutory provisions with regard to payment of pension, shall be violative of not only sub-rule (2) of Rule 37 but also Rule 38 of the Rules read with Section 24 of the Act.
46.The provisions with regard to payment of pension contained in the Act and rules are welfare legislation and proper meaning should be given to statutory provisions to meet requirement or object. There cannot be narrow interpretation of Rules which may deprive the employees of the payment of pension.
47.Provisions contained in Rule 34, 37 and Rule 38 (supra), are beneficial provisions and should be read collectively along with Section 24 and other related provisions. The beneficial legislation or statutory provisions dealing with the human rights or livelihood should be made functional and not facial cosmetics as held by Hon'ble Supreme court in AIR 1987 SC 1086: M.C. Mehta and another. Vs. Union of India and others. Their lordships in the said case has reiterated the constitutional spirits propounded in the case reported in Rammana Shett's case (AIR 1979 SC1628) and the Constitution Bench observed that functional realism should be looked into and not facial cosmetics. To reproduce relevant portion of para 17 of Rammana Shett's case as under::
"17. The criteria evolved by this Court in Ramana Shett's case (AIR 1979 SC 1628) (supra) were applied by this Court in Ajay Sasia v. Khalid Mujib, (1981) 2 SCR 79: (AIR 1981 SC 487 at pages 492, 493, 494), where it was further emphasised that :
Where constitutional fundamentals vital to the maintenance of human rights are at stake, functional realism and not facial cosmetics must be the diagnostic tool for constitutional law must seek the substance and not the form. Now it is obvious that the Government may act through the instrumentality or agency of natural persons or it may employ the instrumentality or agency of judicial persons to carry out its function..... It is really the Government which acts through the instrumentality or agency of the corporation and the juristic veil of corporate personality work for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government..... for it the Government acting through its officers is subject to certain constitutional limitations it must follow a fortiori that the Government acting through the instrumentality or agency of a corporation should be equally subject to the same limitations.
On the canon of construction to be adopted for interpreting constitutional guarantees the Court pointed out:
......Constitutional guarantees.... should not be allowed to be emasculated in their application by a narrow and constricted judicial interpretation. The Courts should be anxious to enlarge the scope and width of the fundamental rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, so as to subject the Government in all its myriad activities, whether through natural persons or through corporate entities to the basic obligation of the fundamental rights."
48.In (1999) 3 Supreme Court Cases 601; Secretary, H.S.E.B. v. Suresh and others, the Hon'ble Supreme Court while dealing with labour welfare legislation ruled that beneficent construction of the statutory provision must be given keeping the public interest at large and courts must decide while interpreting the statutory provisions keeping in view the interest of the public inspired by principles of justice, equity and good conscience. (para 14, 17 and 18).
49.In the case reported in (2002) 8 Supreme Court Cases 400; Essen Deinki Vs. Rajiv Kumar, the Hon'ble Supreme Court held that when the question arises with regard to the interpretation of welfare legislation, it is the duty of the courts to give broad interpretation keeping in view the purpose of such legislation of preventing arbitrary action though the statutory requirements cannot be ignored.
50.In the case reported in (2003) 4 Supreme Court Cases 27; S.M. Nilajkar and others vs. Telecom District Manager, Karnataka, the Hon'ble Supreme Court has held that while interpreting the welfare legislation in case of doubt or two possible views, the interpretation should be done in favour of beneficiaries.
51.In the case reported in (2004) 5 Supreme Court Cases 385; Deepal Girishbhai Soni and others Vs. United India Insurance Co. Ltd. Baroda, the Hon'ble Supreme Court again reiterated that beneficial legislation should be interpreted liberally keeping in view the purpose of enactment and reading entire statute in its totality. The purport and object of the Act must be given its full effect by applying the principles of purposive construction (para 56).
52.In view of the above, being beneficial provisions, in case Rule 34, 37 and 38 read with Section 24 are taken into account, and read collectively, it shall make out a case for payment of pension to the employees appointed in pursuance of Sub-section (2) of Section 5 of the Act which has been stopped by the impugned order of 1999. The impugned order seems to have been passed mechanically, without application of mind and violative of letter and spirit of Rule 34, 37 and 38 read with Section 24 of the Act.
53.There is another aspect of the matter. As observed hereinabove, a combined reading of statutory provisions as well as Rules (supra) reveals that the Legislature to their wisdom, intends to pay pension to the employees of Development Authorities. Accordingly, while taking any decision or passing any administrative order and/or executive instructions, the State Government does not have got right either to delay or prohibit the payment of pension. Any administrative order, and/or executive instruction should be issued in consonance with the statutory provisions and since the statutory provisions (supra) provide that pension shall be payable to the employees of the Development Authorities subject to orders passed by the State Government. State Government while issuing circular dated 17.3.1983 followed by another circular dated 29.9.1983, has rightly directed for payment of pension to the employees of the Development Authorities in accordance with Rules applicable to Government employees till special regulatory provisions are framed by the State and Development Authorities in consonance with Rules.
54.It is settled law that executive instructions and the Government orders cannot override the statutory provisions. In AIR 1972 SC 1546, State of Haryana Vs. Shamsher Jang, Hon'ble Supreme Court held that the qualification or service condition prescribed by the Rules can not be altered by executive instructions. Government is not competent to alter rules by administrative instruction more so, when the rules can be implemented without any difficulty.
In one another case reported in 1993 Supp (2) SCC 415, Himachal Pradesh State of Electricity Board Vs. Somdutt Uppal and another their Lordships of Hon'ble Supreme Court while reiterating the above principle held that by internal communications, regulations framed under statute can not be override.
It is settled law that Government orders or circulars cannot override the statutes, rules and regulations vide, 2005 LCD 1696 Vijai Singh and others Vs. State of U.P.
55.Once, the Legislature to their wisdom, intends to pay regular pension to the petitioners, then the State Government lacks jurisdiction to pass impugned circular/orders stopping payment of pension which was being paid to the employees of the Development Authorities till 1999. The impugned circular which is an administrative order or executive instruction, has been issued in contravention of statutory right flowing from the provision contained in the Act as well as Rules (supra).
56.The provisions contained in the Act and Rules (supra) are enabling provisions to pay pension and in absence of any statutory provision, the Rules applicable to State Government employees has been made applicable. Perhaps being conscious with the statutory provisions, while issuing impugned order, the State Government has not denied the petitioners right with regard to pension but only rider is that the same is under consideration that too, since last 11 years. Why matter has been kept pending, is not borne out either from the record or argument advanced by the learned counsel for the State Government. Why this "waiting period" not came to end even after eleven years ?
57.In spite of repeated query made by this Court, learned standing counsel failed to bring on record any material which may justify the issuance of impugned order more so, when regular pension was paid in pursuance of earlier circular/orders of 1983 (supra) which are in consonance with the Statutory provisions (supra). The State Government seems to have acted arbitrarily in violation of statutory provisions. By executive instructions, the rights flowing from the statutory provisions, cannot be taken away or withheld more so, when it was made available upto 1999.
58.The fund with regard to CPF, GPF were deducted. Once the contribution was provided by the employees and the petitioners with regard to pension fund, then the State Government does not seem to justify by withholding pension and prolonging the decision since last 11 years, though in pursuance of the orders of the year 1983 (supra), the pension was made available upto 1999. The observations made in the impugned order seems to be an act of non-application of mind. Till the Government frames Rules or Regulations, the petitioners shall be entitled for payment of regular pension as it was made available upto 1999 in pursuance of the earlier clarificatory orders of 1983 (supra) at par with the Government employees in view of Rule 37 (2).
59.It may be noted that initially, the Government order was for erstwhile employees of local bodies/Nagar Mahapalika who retired upto 1999 and by the impugned circular all of sudden without any justifiable cause, regular pension has been stopped though, it was paid till issuance of the impugned Government order. Though the source of recruitment may be different, the appointing authority may be different but all the employees of the development authorities, constitute one block and collectively carry out the statutory provisions under the Act to serve the people. Accordingly, rightly by two circulars of 1983, all the employees including the petitioners cadre, were ensured for payment of pension which was paid to them upto 1999. In view of the above, the writ petitions deserve to be allowed.
60.Accordingly, the writ petitions are allowed. A writ in the nature of certiorari is issued quashing the impugned order dated 5.4.1999 and 9.11.2004 with consequential benefits. A writ in the nature of mandamus is issued commanding the opposite parties to ensure the payment of regular pension to the petitioners and other similarly situated employees forthwith in accordance with Rules applicable to Government employees. Let decision be taken in pursuance of the observations made in the body of the present judgment expeditiously say, within three months from the date of receipt of a certified copy of this order. Respondents shall also ensure the payment of arrears of salary expeditiously say, within six months.
Costs made easy.
[Justice Vedpal ] [ Justice Devi Prasad Singh] Order Date :-[ delivered on November 20, 2010] Rajneesh)