Introduction: Microcosmically stated, numerous petitioners, in the autumn of their lives, have not been paid their pension. The employer, the Kerala State Road Transport Corporation (referred to as 'the Corporation'), proffers the reason of financial constraints faced by it on account of the burden imposed on it by the State, through one measure or another, in the name of socio-economic obligations required to be fulfilled by an instrumentality of the State – the introduction of statutory pension being one such measure. The State, in turn, states that it has no obligation to bail out the Corporation, which has to fend for itself, lest the other socio-economic measures of the State should suffer. The result: Deaths – at least going by the media reports – of exhausted, exasperated, and desperate destitutes, called retired employees.
2. Before undertaking macrocosmic adjudication of the issue, it is meat to make a reference to a study report on longevity and the economic ramifications on the constricted coffers of the nations, more particularly the emerging economies.
“The world is on the cusp of a staggering rise in the number of old people, and they will live longer than ever before. Over the next 20 years the global population of those aged 65 or more will almost double, from 600m to 1.1 billion. The experience of the 20th century, when greater longevity translated into more years in retirement rather than more years at work, has persuaded many observers that this shift will lead to slower economic growth and “secular stagnation”, while the swelling ranks of pensioners will bust government budgets. (A Billion Shades of Grey, The Economist, 24th April, 2014 issue) (emphasis added) When we examine the demographic profile of ageing India, in the years 2000-2050, the overall population of India will grow by 55%, whereas the population of people in their 60 years and above will increase by 326% and those in the age group of 80+ by 700% - the fastest growing group.
3. One eighth (1/8) of the World’s Elderly Population lives in India. Most of them will never retire in the usual sense of the term and will continue to work as long as physically possible, inevitably though the disability to produce and earn will decline with age. The absence of savings will result in sharp decline in living standards, and for many it can mean destitution. Therefore, this is the challenge of old age income security in India. (National Policy for Senior Citizens, March 2011, Government of India) The Facts:
4. When a batch of writ petitions has been filed by numerous retired employees, and in one instance the writ petition having been filed by an association of retired employees, after entering appearance, neither the Corporation nor the Government joined the issue disputing the claim of the petitioners. Both the entities, however, started passing the buck showing an accusing finger towards each other as to who should own up the responsibility to pay the pensionary benefits to a few thousands of retired employees of the Corporation. At any rate, both the entities maintained unanimity in one issue: the paucity of funds and the precarious financial position of the Corporation.
5. Having on one end of the scales the hapless retired employees, and the financial constraints of the state on the other, this Court, all along, has not deemed it desirable to issue any peremptory and precipitous directions. Instead, it has gone on till this day issuing interim directions intermittently, thus nudging the Corporation and the Government towards their discharging the statutory obligations. Today too, this Court took up the matter with a view to ensuring some more compliance with numerous earlier directions, thereafter issuing one more direction with another time frame, thereby facilitating progressive amelioration of the petitioners’ hardship. It was not to be.
6. The learned Special Government Pleader, having filed an additional counter affidavit, without mincing words, declared before the Court that the Government has taken a decision not to provide any more financial assistance to the respondent Corporation, inasmuch as the Government’s efforts to bail it out have been affecting other developmental activities of the state. According to the learned Special Government Pleader, so far the Government paid to the respondent Corporation ` 1263 crore in the last five years and that the Government is prepared to write off the interest. He has also submitted that a proposal is also pending to convert this financial assistance as equity of the Government in the Corporation.
7. When faced with a query regarding huge amounts it allegedly owed to the Corporation, the learned Special Government Pleader has submitted that so far the Corporation has not provided any accurate data or statements of account concerning the Government’s dues on account of travel concessions et cetera. He has also submitted that, the earlier demand of the Corporation stood rejected on the ground that its claim was riddled with inaccuracies and infirmities.
8. With the stand of the Government thus declared, as the Corporation had all through been looking to the Government for funds, adjudication of the issue on merits became essential, thus putting quietus to this seemingly intractable issue.
9. Beginning with 12.02.2014, to ensure at least partial disbursement of the retirement benefits, this Court went on issuing interim directions on the following days:
25.08.2014 and 27.10.2014 – the interim directions given 07.08.2014, 25.08.2014 and 27.10.2014 being more elaborate than the other ones.
10. As I have already observed, there is not much of a factual matrix to refer to in all these writ petitions, save that all the petitioners have a common grievance that their pensionary benefits have not at all been paid to them or paid very irregularly, with a pronounced element of uncertainty, thus placing all of them in a state of perpetual anxiety and tension when they would be getting the next instalment of their pension.
11. Though there have been eighteen writ petitions, in a few of them arguments have been advanced by the learned counsel for the petitioners; in the rest of the matters, the same arguments have been adopted.
W.P.(C)No.3893/2014
12. To begin with, I may refer to the submission made by Sri.K.P.Rajeevan, the learned counsel for the petitioners in this writ petition. Since the submissions were advanced in the light of the statement made by the learned Special Government Government, the learned counsel for the petitioners has drawn my attention to the earlier counter affidavit filed by the Government in contra distinction with the additional counter affidavit which came to be filed just the other day. Taking this Court through both the counter affidavits, the learned counsel would contend that initially the Government undertook the burden of contributing the necessary funds at 1:1 ratio along with the respondent Corporation to ensure regular payment of pension. In that regard, he has also drawn my attention to Exhibit P12 notification, i.e., Ordinance 25 of 2014.
13. According to the learned counsel, the proposal made by the Government through Exhibit P5 for securing funds is in the process of being implemented, as could be seen from Exhibit P12. It is the particular contention of the learned counsel that in the light of the unequivocal undertaking given by the Government, it is estopped from negating not only its statutory but also its constitutional obligation towards retired employees of the Corporation, which in fact functions entirely under the control of the Government.
14. The learned counsel has further submitted that on an earlier occasion, a learned Division Bench of this Court issued a direction to earmark ten percent of the revenue generated by the Corporation for meeting the pension targets. He has also submitted that very recently a learned Division Bench of this Court has allowed an application filed by the Corporation permitting it to draw from the said funds and clear a portion of the pension arrears.
15. The learned counsel, referring to Exhibit P9, states that the Government has owed more than ` 1,500 crores in dues to the respondent Corporation. If a specific direction is given to the Government to pay up its own debts to the Corporation, that will solve the problem for ever.
16. According to him, the Corporation, with an asset basis of fifty thousand crores, is expected to function strictly on the business principles in terms of Section 22 of the Road Transport Corporations Act 1950 ('the Act' for brevity).
17. It is the specific contention of the learned counsel for the petitioners that the Kerala Transport Development Finance Corporation Ltd., built huge structures on the basis of Build Operate Transfer (BOT) on the properties of the Corporation by forcing it to borrow from the Finance Corporation at exorbitant rates, the rate of interest being 14.5%, far in excess of what the commercial banks charge. Apart from referring to Exhibit P7 in that regard, the learned counsel has drawn my attention to Exhibit P11(b), which is the information the petitioners obtained from the Corporation by invoking the provisions of the Right to Information Act. According to the learned counsel, the information reveals that at no point of time has the Corporation, the very owner of the assets, been taken into confidence, leave alone getting its prior consent before either the loan was sanctioned or before the structures were raised. In other words, the learned counsel tries to underline the fact that the Corporation has been reduced to the state of a mere spectator in managing its own affairs, including its assets, and that it has been made to bear a lot of unwanted burden of debt. Had the loan been from any other source, contends the learned counsel, the Corporation would have saved at least about forty five crores of rupees monthly on account of the differential interest and that amount alone would have been sufficient to take care of the pension obligations of the respondent Corporation.
18. Eventually, elaborating on his submissions, the learned counsel, placing reliance on Exhibit P2, submits that the very pension scheme was introduced in the Corporation on the directive of the Government, and as such, the Government cannot be heard saying that it does not have an obligation towards the employees of the Corporation, more particularly those who retired. W.P.(C)No.4141/2014
19. The learned Senior Counsel for the petitioners has submitted that in terms of Section 32 of the Act, the Government is duty bound to provide budgetary allocation to the Corporation. He has further submitted that on 07.08.2014 this Court issued a direction to the Government to explore the option of invoking Sections 37 and 38 of the Act if the Corporation was not in a position to perform its statutory obligations, thereby taking over the Corporation and re-structuring it, if necessary. According to the learned Senior Counsel, despite the said direction, though the Corporation continued committing defaults, the Government has not initiated any steps.
20. The learned Senior Counsel has stressed that this is the one case where this Court may have to press into service the continuous mandamus to ensure regular payment of pension to thousands of retired employees, inasmuch as it is a recurring problem. He has taken me through the entire gamut of the Act laying specific emphasis on Sections 3, 5, 19, 22, 32, 34 and 36 to 38. Further elaboration of these provisions, however, is avoided with a view to referring to them at appropriate stages of the discussion. The learned Senior Counsel has further submitted that in terms of Section 38 of the Act, the Government has every power to supersede the Corporation. He has also referred to Article 39B of the Constitution of India to underline that both the Government and the Corporation are the partners in this venture to sub-serve a socio-economic cause, and as such, they cannot claim to be independent of each other. He has further submitted that pension was introduced by the Government through Exhibit P1 in terms of Section 34 of the Act.
21. According to the learned Senior Counsel, the Government cannot go back on its obligation, more particularly in the light of Exhibit P1, and if the Government is of the opinion that the Corporation has not been managing its affairs properly, it can cause an enquiry under Section 36 of the Act. The learned Senior Counsel has placed reliance on State of T.N. v. Abu Kavur Bai ((1984) 1 SCC 515).
W.P.(C)No.4287/2014
22. This writ petition is filed by the former employees of the Transport Department of the Government who later were transferred into the ranks of the Corporation on its establishment. The learned counsel for the petitioners has submitted that now there are only 150 of those employees who have thus been transferred, one of them being 92 years old. All of them, in their advanced stage, have been facing severe hardship owing to uncertain and irregular disbursement of pension.
W.P.(C)No.3808/2014
23. The learned counsel for the petitioners has submitted that unable to endure an uncertain future marked by destitution and deprivation, some of the employees have committed suicide. He has further submitted that unless immediate remedial measures are taken, the calamitous circumstances may further aggravate and more deaths may follow. In this regard, he has shown me certain news reports.
W.P.(C)No.25244/2014
24. Referring to Section 3 of the Act, the learned counsel for the petitioners has contended that neither the Corporation nor the Government can run the business in public transport on profit and loss basis. According to him, it is the solemn constitutional obligation of the State to run the services of public utility to subserve the common good. He contends that the Government is duty bound, both constitutionally and statutorily, to ensure that the Corporation functions properly and all its obligations of whatever nature are met. In this regard, the learned counsel has drawn my attention to the recommendations made by the Legislative Committee in State Public Sector Undertaking (2008-2011) in the year 2008, as could be seen from Exhibit P3..
W.P.(C)No.2644/2014
25. The learned Senior Counsel contends that the issue of statutory obligation on the part of the Corporation to pay the pension to the retired employees without default already stands decided by this Court and that only its implementation remains. In this regard, the learned Senior Counsel has drawn my attention to Exhibit P5, the judgment dated 03.01.2012 rendered by this Court in W.P.(C)No.
29544/2008.
26. He has further submitted that though the respondent Corporation filed R.P.No.478/2012 against Exhibit P5 judgment, it was disposed of by this Court through Exhibit P6, holding that there was no error apparent on the face of the record to review the judgment. The Court, however, made it clear in Exhibit P6 that pensionary benefits shall also include pension which shall be paid on the first day of every month. The learned Senior Counsel has submitted that notwithstanding Exhibit P5 judgment, when the Corporation again committed default, the petitioners were constrained to issue Exhibit P7 notice dated 05.12.2013, but the Corporation remained unmoved.
27. The learned Senior Counsel has submitted that in so far as the payment of pension is concerned, the Corporation does not have any separate regulations. It has, in fact, adopted the provisions of the Kerala Service Rules (KSR). Referring to Rules 10 and 123 of Chapter III, the learned Senior Counsel would contend that pension is required to be paid on the first of every month. He has submitted that up to September 2014, after repeated prodding by this Court, the Corporation paid the retired employees at the rate of ` 8,600/- per month, though the monthly pension ranges from ` 10,000 - ` 30,000. According to him, it is neither permissible nor statutorily contemplated to take recourse to piece-meal payment of pension. Placing reliance on Deokinandan Prasad v. State of Bihar ((1971) 2 SCC 330), the learned Senior Counsel has contended that the pension is not an unwanted liability; on the contrary, it is an obligation. He has further stressed that the Corporation is neither sick nor insolvent.
Stand of the KSRTC
28. The learned Standing Counsel for the Corporation, though not entirely denied the obligation of the Corporation to disburse the pension regularly, has submitted that there is no truth in the allegations of the petitioners that the Corporation has reneged on its commitment to pay pension. Expatiating on her submissions, the learned Standing Counsel has submitted that up to September 2014 the Corporation has paid to all the pensioners at the rate of ` 8,700/- per month, notwithstanding the fact that the monthly pension ranges from ` 6,000 - ` 30,000. According to her, in 1984 it was the Government that compelled the Corporation to implement the statutory pension scheme without a proper study and understanding of the future implications in that regard.
29. The learned Standing Counsel has submitted that when it was introduced, the amount required towards meeting the pension obligations was ` 3.84 crores, which now increased more than ten-fold. According to her, presently there are 37,000 pensioners. Statistically submitting, the learned Standing Counsel has contended that the Corporation generates monthly revenue of ` 165 crores, whereas its monthly payment amounts to ` 254 crores, thus having a deficit of ` 89 crores. She has further submitted that every month the respondent Corporation is required to pool up ` 43 crores towards pension liability alone. All along the Corporation has, contends the learned Standing Counsel, spared no efforts to ensure regular payment of pension and precisely to meet its commitment, it has gone on borrowing from various sources including the Government. Now, apart from having the obligation of paying pension, the Corporation is also required to ensure regular payment of interest on the amounts it borrowed. Thus underlines the learned Standing Counsel the fact that the Corporation has been caught in a debt trap, as it finds itself unable to come out of the vicious circle: unbridgeable gap between revenue and expenditure.
30. The learned Standing Counsel has further submitted that the Government in fact in consultation with the Corporation has introduced Exhibit R2(a) revival package (WPC 25244/2014). According to her, if the Government implements the revival package as has been originally conceived, the crisis can be tided over.
Stand of the Government:
In the First Phase:
31. On the direction of this Court, one of the Deputy Secretaries to Government in the Transport Department, on 19.09.2014, filed the first counter affidavit, setting out the policy decision taken by the Government to find the solutions and remedial measures with respect to the problems faced by the Corporation.
32. The Government averred that though it occupies only 27% of the entire bus operations in the State, it effectively prevents the general public from getting exploited by the private sector, which is motivated only by profits. The stand of the Government concerning the role of the Corporation bears repetition, and is accordingly, to the extent relevant, reproduced:
“[As] a state transport enterprise, it cannot depend only upon the profit centres, but have to take into account the needs of the people especially the lower class, by extending service to the under developed areas of the state, providing travel concessions to various sections of the public. The Kerala State Road Transport Corporation cannot keep away from the social commitments and as such it is forced to extend its service through unprofitable routes and at unprofitable times. If the entire service operation is transferred to the private sector, in case of the winding up of the Kerala State Road Transport Corporation as remarked b the Hon’ble High Court, consequence will be, utmost exploitation of the poor and the middle class by the private sector. The Government exercises its fare control mechanism effectively, only because of the existence of the State Transport undertaking. So, is the case with the social concessions allowed to various sections of the public.”
(emphasis added)
33. Adverting to the problems faced by the Corporation regarding meeting its pension-payment targets, the Government places on record:
“[D]uring 1965-1984, there was no pension allowed to the employees of the Corporation. As the organization grew and the number of employees retiring from the service of the Kerala State Road Transport Corporation increased exponentially, and the rates of pay and pension increased rapidly, Kerala State Road Transport Corporation found it very difficult to find its own resources to pay pension to its employees, in addition to meeting its operational expenses which also grew rapidly in short span of times. Government, having found the existence of the Corporation very important in the matters of extending service to the poor and middle class of the society, supported it financially by extending loans, grants and funds for capital expenditures.”
(emphasis added)
34. Having said thus, the Government does acknowledge that through G.O.(MS) No.6/2014/Tran. dated 01.02.2014, it accorded sanction to implement a revival package in the Corporation for its financial uplift. According to the Government, with the implementation of this package, the Corporation is expected to get over its financial crunch within a certain span of time.
In the Second Phase:
35. Now, we may observe the stand of the Government in its additional statement filed on 26.11.2014. To begin with, it assures that it is monitoring implementation of Ext.R1(a) revival package submitted by the Corporation. Then goes on to add:
“[T]hough there was a proposal to share pension liability by the State Government and K.S.R.T.C. at 1:1 ratio, the same was not accepted by the Government and as such the Government is not bound to pay the said amount to K.S.R.T.C. As of now, Government has already paid an amount of Rs. 150 Crores to K.S.R.T.C. during this financial year to meet the working capital requirements of the Corporation. During the last 5 years the Government paid an amount of Rs.1263,13,59,966/- for meeting the working capital requirement of the Corporation. The Government is considering the proposal of the Managing Director of the K.S.R.T.C. for converting the above loan amount into equities and also to write off the interest and penal interest thereon. Apart from the above, Government is not in a position to shoulder any further liability of the K.S.R.C., especially in view of the financial constraint faced by the State at present.
(emphasis added)
36. Having said that, the Government, however, acknowledges that it has already passed an Ordinance by name 'Kerala State Road Transport Corporation (Passenger Group Personal Accident Insurance, Improved Passenger Amenities, Employees Social Security and Cess on Passenger Ticket) Ordinance, 2014'. It also says that the scheme as contemplated in Section 3 of the Ordinance was submitted by the Corporation and is in the final stages of approval by the Government. Once the scheme is approved, the Corporation can collect the cess amount over and above the ticket fare which is expected to be around ` 160 crores per annum as additional income.
37. Adverting to the role the Corporation it expected to play, the Government states thus:
“It is submitted that K.S.R.T.C. is a public sector undertaking which has to manage its own affairs without depending on the Government. There are several other public sector undertakings which are also catering the social obligations and public sector undertakings which are also catering the social obligations and public needs. The Government cannot extend financial help to the public sector undertakings merely on the ground that ground that they are doing some social obligation and catering to pubic needs. If such an attitude is taken, the Government will not be able to provide funds for other developmental works requiring more public interest and needs.
(emphasis added)
38. After reminding the Corporation that what it is doing is no charity and that, as an instrumentality of the State, it is obligated to do all that it is doing, the Government takes comfort in the fact that it is 'understood' that the Corporation has already initiated action for liquidating high interest rate loans by availing itself of loan from the Nationalised Banks with lower interest. If such an action is accomplished, an amount of ` 15-20 crores can be saved per month.
39. Heard the learned counsel for the petitioners and the learned Standing Counsel for the Corporation, apart from perusing the record.
The Issue:
40. Whose obligation is to pay regularly the pension due to the retired employees of the second respondent Corporation, and in what manner is the obligation required to be discharged?
Discussion:
41. To begin with, given the fact that the retirement age is 56 years, we cannot say all the petitioners, for that matter, all the retired employees of the Corporation are very old to be called senior citizens. Some of them are, though. Most of them, owing to the policy of superannuation, have been relegated to the realm of retired forces. Senile they are not, but senility hastens itself upon those who do not have a sense of self-worth. That is what precisely happens when a person is made to vegetate – nowhere to go, nothing to do and not much to fall back on. With ever increasing life expectancy and longevity, blissfully to some and banefully to some other, the issue of senescence has assumed importance. Geriatrics has become germane not only as a sociological issue, but also as an economic issue of enormous implications.
International Efforts:
42. The question of ageing was first debated at the United Nations in 1948 at the initiative of Argentina. The issue was again raised by Malta in 1969. In 1971, the General Assembly asked the Secretary-General to prepare a comprehensive report on the elderly and to suggest guideline for the national and international action. In 1978, it was decided to hold a World Conference on Ageing. Accordingly, the World Assembly on Ageing was held in Vienna from July 26 to August 6, 1982 wherein an International Plan of Action on Ageing was adopted. The International Plan of Action on Ageing was adopted by the General Assembly in 1982 and the Assembly in subsequent years called on the Governments to continue to implement its principles and recommendations. (i) In 1992, the U.N. General Assembly adopted the proclamation to observe the year 1999 as the International Year of the Older Persons.
(ii) The U.N. General Assembly has declared “Ist October” as the International Day for the Elderly, later rechristened as the International Day of the Older Persons. (iii) The U.N.General Assembly on December 16, 1991 adopted eighteen principles which are organized into five clusters, namely-independence, participation, care, self-fulfillment, and dignity of the older persons (Rights of Senior Citizens, by Dr. Rakesh Kumar Singh, University of Lucknow. Source: legalserviceindia.com.).
43. Subsequent international efforts made an impact on the implementation of the National Policy on Older Persons. The Madrid Plan of Action and the United Nations Principles for Senior Citizens were adopted by the UN General Assembly in 2002. The Proclamation on Ageing and the global targets on ageing for the Year 2001 were adopted by the General Assembly in 1992. Later, the Shanghai Plan of Action 2002 and the Macau Outcome document 2007 adopted by UNESCAP formed the basis for the global policy guidelines to encourage the Governments to design and implement their own policies from time to time. The Government of India is a signatory to all these documents demonstrating its commitment to address the concerns of the elderly (vide National Policy for Senior Citizens, March 2011, Government of India).
44. As could be seen from the policy referred to above, the Union of India has spelt out that among other benefits are required to be provided to the elderly: pension, travel concessions, income tax relief, medical benefit, extra interest on savings, security of older persons through an integrated scheme of the Ministry of Social Justice and Empowerment.
Constitutional Perspective:
45. Though India practices monism, Article 51(c) of the Constitution exhorts the nation to respect the international covenants. Indeed, Article 253 empowers the Parliament to give effect to International conventions and covenants. Further, one of the directive principles, Article 41, exhorts that the State shall, within the limits of economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.
The Earlier Adjudication:
46. In 2008, some of the retired employees filed W.P. (C)No.29544/2008 and invited a judgment dated 03.01.2012. In that judgment, this Court, placing reliance on Society of Retire Forest Officers v. Uttar Pradesh (2008 (3) KLT 2788 (SC)), has observed that the respondents have not raised any objection regarding their obligation to pay pension and that the only reason stated in the counter affidavit is about the financial constrain faced by the Corporation. Eventually this Court concluded that the said contention would not enable the Corporation to withhold the pensionary benefits of the retired employees. Observing thus, the Court allowed the writ petition.
The Right to Pension:
47. It is a clinched remark of repetition if I were to observe that the pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement. Indeed, they have become, under the decisions of the Courts, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment to the employees. [vide State of Kerala v. M. Padmanabhan Nair ((1985) 1 SCC 429) and D.D. Tewari v. Uttar Haryana Bijli Vitran Nigam Ltd., ((2014) 8 SCC 894)].
48. The grant of pension does not depend upon an order being passed by the authorities to that effect. It may be that for the purposes of quantifying the amount having regard to the period of service and other allied matters, it may be necessary for the authorities to pass an order to that effect, but the right to receive pension flows to an officer not because of the said order but by virtue of the Rules. If the question whether the pension granted to a public servant is property attracting Article 31(1) [now Art.300-A] of the Constitution is examined, it is a right as constitutes “property” and any interference will be a breach of Article 31(1). The State cannot by an executive order curtail or abolish altogether the right of the public servant to receive pension (vide Deokinandan Prasad v. State of Bihar ((1971) 2 SCC 330).
49. Referring to the Constitution Bench decision of Deokinandan Prasad, a three judge Bench of the Supreme Court in D.S. Nakara v. Union of India ((1983) 1 SCC 305) has observed that the antiquated 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.
50. In fact, in D.S. Nakara (supra), the Court posed unto itself the following questions:
What is a pension? What are the goals of pension? What public interest or purpose, if any, it seeks to serve? If it does seek to serve some public purpose, is it thwarted by such artificial division of retirement pre and post a certain date? Referring to Retirement Systems for Public Employees by Bleakney, their Lordships have held thus:
“21. There are various kinds of pensions and there are equally various methods of funding pension programmes. The present enquiry is limited to non-contributory superannuation or retirement pension paid by Government to its erstwhile employee and the purpose and object underlying it. Initially this class of pension appears to have been introduced as a reward for loyal service. Probably the alien rulers who recruited employees in lower echelons of service from the colony and exported higher level employees from the seat of Empire, wanted to ensure in the case of former continued loyalty till death to the alien rulers and in the case of latter, an assured decent living standard in old age ensuring economic security at the cost of the colony.
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.
… 29. Summing up it can be said with confidence that pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it 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 aging process and, therefore, one is required to fall back on savings. One such saving in kind is when you give your best in the hey- day of life to your employer, in days of invalidity, economic security by way of periodical payment is assured. The term has been judicially defined as a stated allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service. Thus the pension payable to a government employee is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation or for service rendered. In one sentence one can say that the most practical raison d’etre for pension is the inability to provide for oneself due to old age. One may live and avoid unemployment but not senility and penury if there is nothing to fall back upon.”
51. Pension has been defined under Article 366(17) of the Constitution of India as follows: “pension” means a pension, whether contributory or not, of any kind whatsoever payable to or in respect of any person, and includes retired pay so payable; a gratuity so payable and any sum or sums so payable by way of the return, with or without interest thereon or any other addition thereto, of subscriptions to a provident fund. On the concept of pension, the need and compulsion to provide for and pay it, the role of the State, we need not look beyond PEPSU RTC
v. Mangal Singh ((2011) 11 SCC 702), wherein the Hon'ble Supreme Court has exhaustively dealt with the issue. Having comprehensively surveyed the precedential precincts of the issue, their Lordships have held thus:
Apart from examining the definition of “pension” from standard works such as Corpus Juris Secundum and Halsbury’s Laws of England, the Hon’ble Supreme Court has quoted with approval, the definition as has been provided in American Jurisprudence 2d, Vol. 60, at p. 879:
“However, by modern usage, the ‘pension’ is not restricted to pure gratuities. Thus, it has been held that a pension paid to a governmental employee for long and efficient service is not an emolument the payment of which is barred by a State constitutional provision, but is a deferred portion of the compensation earned for services rendered. … A pension is closely akin to wages in that it consists of payments provided by an employer, is paid in consideration of past services, and serves the purpose of helping the recipient meet the expense of living.”
52. Summing up the precedential position obtaining till then, their Lordships have observed on the regulatory regime of pension thus:
1. That the regulations made under the statute laying down the terms and conditions of service of the employees, including the grant of retirement benefits, have the force of law.
2. That the statutory bodies as well as general public are bound to comply with the terms and conditions laid down in the regulations as a legal compulsion. Any action or order in breach of the terms and conditions of the regulations shall amount to violation of the regulations which are in the nature of statutory provisions and shall render such action or order illegal and invalid.
3. That the doctrine of ultra vires as applied to statutes, rules and orders should equally apply to the regulations and any other subordinate legislation.
4. That the employer Corporation is bound to comply with the mandatory provisions of the statute or the regulations framed under it.
5. That a subordinate legislation when validly framed becomes a part of the Act.”
6. If there are administrative instructions, guidelines or norms prescribed for the purpose, the appellant may claim benefit of interest on that basis. But even in absence of statutory rules, administrative instructions or guidelines, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution.
53. Based on the above observations of the Hon’ble Supreme Court, we can as well deduce that pension is salary deferred and paid periodically on predictable intervals. It can be withheld only under an authority of law. In fact, earlier, more than one Constitution Bench of the Hon'ble Supreme Court has held that right to pension is a fundamental right protected under Articles 19(1)(f) and 31
(1) of the Constitution of India, neither of which now remains in the organic instrument of the nation, though. Any legislation concerning pensionary benefit passed prior to 42nd amendment still is required to pass constitutional muster under Articles 19(1)(f) and 31(1). All those legislations or statutory regulations passed subsequent thereto still are required to be tested on the anvil of Article 300-A of the Constitution, inasmuch as the right to pension though no longer remained a fundamental right, it, at least, remains still a constitutional right: right to property.
Pension in the Corporation:
54. The Corporation was formed on 01.04.1965, where after certain employees working in the State Transport Department were absorbed by the Corporation, protecting their service conditions through Notification No. 4936/TC4/64/PW dated 22.03.1965 in terms of the directions under Section 34 of the Act. On the basis of Conditions 11 and 12 of the notification, pension was paid to the erstwhile State Transport Department employees, in terms of Part III of KSR. In 1978, other employees who opted for pension were also granted pension on par with these employees.
55. Through proceedings dated 17.03.1984 the Government required the Corporation to introduce the General Provident Fund Scheme for its employees with effect from 01.04.1984. It is noteworthy that the respondent Corporation has not framed any regulation but is following Part III of KSR. The pension is being paid to the retired employees of the Corporation treating them on par with Government employees.
Whose Money?
56. In ‘Pension Policy: the Search for Better Solutions’, the learned Author John A. Turner (2010, published by W.E. Upjohn Institute for Employment Research, Michigan2010) poses a question as to who is best able to bear the inherent financial and demographic risks in pension plans. He then answers that pension plans can involve five types of actors: employees, labor unions, employers and employers’ organizations, financial service providers, and Government. Risks could be borne by any of these actors. The primary decision as to who bears risks is made when policymakers or the pension provider decides whether to offer defined benefit, defined contribution, or hybrid plans. With defined benefit plans, typically the provider bears the financial market risk, as well as the demographic risk that the participants will live longer on average than expected.
57. Further, the learned author speaks of the basic underlining factor of pension policy by posing a question: Who should pay for pension plans? He goes on to answer it by observing that ultimately, according to economic theory, regardless of whether the employer or employee makes the contribution, the employees bear the cost, either through reduced wages relative to what they would be without a pension plan or through direct contributions. This process is clearly visible in the trade-offs labour unions make in collective bargaining, but this tenet of economic theory is greeted with skepticism among non-economists.
Policy Decisions and Judicial Review:
58. The Courts may not have much to do with the executive wisdom of administrative policies or expediency of legislation, so long as they do not fall foul of the Constitutional mandate. Upon reflection, judicial duty may seem so basic as to be obvious. Remnants of the duty remain vaguely familiar, particularly to the extent it can be discerned from the logic of Marbury v. Madison. The duty, however, tends to get lost in Marshall’s reasoning about the necessity of deciding cases, which was only a narrow slice of the duty of judges. This thin portion of the duty, moreover, is today characterized as “judicial review”—thus allowing the duty to be understood as a sort of power. As a result, judicial review largely obscures any substantial recognition of the traditional judicial duty. (P.101, Law and Judicial Duty by Philip Hamburger, Harvard University Press, 2008).
59. If indeed the law was doubtful or latitudinal, admitting one interpretation, which would be just, and another which would be unjust, it would become us to prefer the former, but the intent was all through clear. Thus, although “the policy of the Legislature seems to bear hard on the subject, we are not to judge, and determine on its propriety—that is a matter for the deliberation of those who made the law—and however unjust it seems, we must acquiesce, or there must be a dissolution of society. (Phile qui tam v. The Ship Anna (Court of Common Pleas, Philadelphia County, July 1787, as quoted in P.337 of Law and Judicial Duty).
60. Plainly the Framers refuse to make the judiciary “law-givers" even to the extent of allowing them to share in the legislative making of law, let alone finally to decide on policy, an exclusive legislative function. They drew a line between the judicial reviewing function, that is, policing grants of power to insure that there were no encroachments beyond the grants, and legislative policy making within those bounds. "Dangerous" and "destructive" as such policies might be, they were at to be the exclusive province of the legislature... their [judges] function, Marshall pointed out, was merely to “construe,” to “interpret” laws, not to infuse them with moral content. Having rejected judicial participation in policy making, the Framers were little likely to embrace judicial supervision of morals. (Government by Judiciary by Raoul Berger (2nd Edn., 1997) (emphasis original).
61. There cannot be much cavil about the executive wisdom of policy making and the hands-off approach of the judiciary in that regard. The introduction of pensionary benefit is, indeed, a matter of policy of the Government, but its implementation, however, is a matter of regulation, of law. This Court proposes to adjudicate the issue within the four corners of the regulations and based on the statutory obligations cast on the Government on one hand and the Corporation on the other.
Statutory Scheme:
62. Though the Road Transport Corporation Act, 1950 is a central enactment, the State Governments, in terms of Section 3 of the Act, can establish a Road Transport Corporation for the whole or any part of the State with a view to offering to the public, trade and industry the facility of road transport. The Corporation thus established, as per Section 4, is a body corporate having perpetual succession and a common seal, and shall by the said name sue and be sued. It is to be managed by a Board of Directors. Sections 5 to 11 of the Act deal with the constitution, the composition and the meetings of the Board of the Corporation. Sections 12 and 13 speak of the Board’s power to appoint committees and delegate functions, and the authentication of orders and other instruments by the Board. Sections 14 to 17-A of the Act deal with the internal management of the Corporation and appointment of Advisory Council, apart from the establishment of Subsidiary Corporation. Section 18 speaks of the general duty of the Corporation. Section 19 of the Act confers on the Corporation vast powers of varied nature. Clause (m) thereof confers residuary powers, however, with the prior approval of the State Government to do all other things to facilitate proper carrying on of the business of the Corporation. Leaving aside Sections 20 and 21, which deal with operational networks of the Corporation, we may refer to Section 22, which reads as follows:
“22. General principle of Corporation's finance.—It shall be the general principle of a Corporation that in carrying on its undertaking it shall act on business principles.”
63. As per Section 23 of the Act, both the Central Government and the State Government may provide to a Corporation established by the State Government any capital that may be required by the Corporation. Section 24, on the other hand, deals with additional capital of the Corporation, whose shares shall be, as per Section 25, guaranteed by the State Government as to the payment of the principal and the payment of annual dividend, if any.
64. The scheme of the enactment further reveals that the Corporation has the power of borrowing, with the previous approval of the State Government, in terms of Section 26 of the Act. Even the fund of the Corporation is required to be maintained based on the directions of the Government, as could be seen from Section 27 of the Act. The interest and dividend on the capital contributions, as mandated in Section 28, are to be paid at the rate fixed by the State Government. The provisions for depreciation and reserve, as well as other funds, are to be made in terms of Section 29, based on the directions of the State Government. Section 30 deals with disposal of profits, again based on the guidelines to be fixed by the State Government. This disposal of profits takes into its fold the welfare of labour as well, yet with the supervision of the State. The power of the Corporation to spend is as per Section 31 of the Act.
65. It is pertinent to observe that while Section 32 deals with 'Budget', Section 33 deals with 'Accounts and Audit'. Given the nature of the issue raised in the writ petition, it is apposite to examine Section 32 of the Act, which reads thus:
“32. Budget.—(1) Every Corporation shall, by such date in each year as may be prescribed, prepare and submit to the State Government for approval a budget for the next financial year showing the estimated receipts and expenditure during that financial year in such form as may be prescribed.
(2) Subject to the provisions of sub-sections (3) and (4), no sum shall be expended by or on behalf of a Corporation unless the expenditure of the same is covered by a current budget grant approved by the State Government.
(3) [Subject to such conditions and restrictions as may be specified in this behalf by the State Government, a] Corporation may sanction any re-appropriation within the grant from one head of the expenditure to another or from a provision made for one scheme to that in respect of another, subject to the condition that the aggregate budget grant is not exceeded.
(4) A Corporation may, within such limits and subject to such conditions as may be prescribed, incur expenditure in excess of the limit provided in the budget approved by the State Government under any head of expenditure or in connection with any particular scheme.”
66. The learned counsel for the petitioners in the batch of writ petitions have laid stress on the power of the Government to issue directions to the Corporation. In that regard reference may be had to Section 34 of the Act, which reads as follows:
“34. Directions by the State Government.— (1) The State Government may, after consultation with a Corporation established by such Government, give to the Corporation general instructions to be followed by the Corporation, and such instructions may include directions relating to the recruitment, conditions of service and training of its employees, wages to be paid to the employees, reserves to be maintained by it and disposal of its profits or stocks.
(2) In the exercise of its powers and performance of its duties under this Act, the Corporation shall not depart from any general instructions issued under sub-section (1) except with the previous permission of the State Government.
(emphasis added)
67. In terms of Section 35 of the Act, the Corporation is required to furnish to the State Government such returns, statistics, accounts and other information with respect to its property or activities or in regard to any proposed scheme as the State Government may from time to time require. In turn, the State Government shall cause the said annual report to be laid before the Legislature of the State. Further, under Section 36 of the Act, the State Government has the power to order enquiries into all or any of the activities of the Corporation and to report to the State Government the result of such inquiries. It is, in fact, well within the power of the Government, as per Section 37 of the Act, to take over from the Corporation and to administer any part of the undertaking of the Corporation, if Government, on receipt of the report under Section 36 is satisfied that it is necessary in the interest of the Corporation to do so.
68. The State Government, too, has the power to supersede the Corporation, as could be seen from Section 38, which reads as follows:
“38. Power to supersede a Corporation.—(1) If the State Government is of opinion that a Corporation established by that Government is unable to perform, or has persistently made default in the performance of the duties imposed on it by or under the provisions of this Act or has exceeded or abused its powers, the State Government may, with the previous approval of the Central Government, by notification in the Official Gazette, supersede the Corporation for such period as may be specified in the notification:
Provided that before issuing a notification under this sub-section the State Government shall give a reasonable time to the Corporation to show cause why it should not be superseded and shall consider the explanations and objections, if any, of the Corporation.
(2) Upon the publication of a notification under sub-section (1) superseding a Corporation—
(a) all the [Directors] of the Corporation shall, as from the date of supersession, vacate their offices as such [Directors];
(b) all the powers and duties which may, by or under the provisions of this Act or of any other law, be exercised or performed by or on behalf of the Corporation shall, during the period of supersession, be exercised and performed by such person or persons as the State Government may direct;
(c) all property vested in the Corporation shall, during the period of supersession, vest in the State Government.
(3) On the expiration of the period of supersession specified in the notification issued under sub-section (1), the State Government may—
(a) extend the period of supersession for such further term as it may consider necessary; or
(b) reconstitute the Corporation in the manner provided in Section 5.”
69. As could be seen, in terms of Section 39, the Corporation can be placed in liquidation by the order of the State Government with previous approval of the Central Government. Section 44 of the Act confers on the State Government the rule-making power.
The Role of the Government:
70. Now, we may address the issues based on the above statutory provisions. Two things have to be observed here: In terms of Section 19 of the Act, the Corporation is expected to function on sound business principles. The Government, nevertheless, expects, nay compels, the Corporation to carry out its part of welfare measures. In Exhibit P11A, in response to the queries from one of the petitioners under the Right to Information Act, the Corporation informs that it has never been consulted on the issues of putting its own properties to use or raising loans from KTDFC for the said purpose. The Government, I am afraid, cannot expect, rather force, the respondent Corporation to run with the hare and hunt with the hounds, so to say.
71. On the issue of amounts due from the Government to the Corporation in respect of various travel concessions granted to the weaker sections of the public, the Government avers as follows:
“[T]he K.S.R.T.C. has not so far submitted a proper and realistic set of accounts showing the actual usage of the passes and the amount of concession actually given by the K.S.R.T.C. The claim of the K.S.R.T.C. is on each and every day round the year, which is most irrational and erroneous. Therefore, the said claim was rejected by the Finance Department. As and when a proper claim is made in this regard, the same will be considered by the Government.
It is submitted that the K.S.R.T.C., being a separate entity, has to find out resources by its own for meeting their liabilities and they cannot always depend on the Government for their working capital requirements including the liability to pay pension funds to its employees.”
(emphasis added)
72. It is regrettable that the Government has taken such a plea as has been extracted above; it is not an ordinary debtor out to defeat the creditor with one stratagem or another. It, indeed, sets examples and expects others to follow. In State of Haryana v. Mukesh Kumar ((2011) 10 SCC 404) the Hon'ble Supreme Court has deprecated the plea of the adverse possession on the part of the State of Haryana. It has held that State, being a welfare state, cannot take the plea of adverse possession and acquire the property of a citizen without entitlement. Technically the plea of the Government cannot be found fault with that the Corporation has not pressed its demand for the recovery of its dues in a legally sustainable manner. In the same vein, it can be said that the Corporation, being a separate entity, could have taken recourse to the legal process of recovery. At the same time, one cannot, however, lose sight of the fact that the Corporation is nothing but an alter ego of the Government; its own creation and its own microcosmic image, the sustenance of which only comes from the State.
73. The Government is conscious that the Corporation has been struggling to meet its solemn statutory, and even constitutional, obligations. It is a party to all the proceedings and processes that have been initiated to bail out the Corporation. It was, therefore, all the more necessary for the Government to have resolved the issue of its dues to the Corporation with its own initiative. The Corporation says that from the Government more than one thousand crores is due; the Government only says that the claim suffers from contradictions. Nevertheless, there ought to be a middle ground. The Government could as well have seen what would be the admissible due, subject to the finalization of the dues and paid those admitted dues on its part. Every person, including the petitioners, and every entity, including the Corporation, looks to the Government as their or its saviour. There is no room for the Government to take shelter under a technical plea – it is against the constitutional morality of the nation, the State.
The Fact-Sheet on Pension:
74. Now, we may examine the fact-sheet as presented by the Corporation on the issue of pension dues. The Corporation offers the following reasons for its financial crises:
1. Providing pension from operational revenue.
2. Unprofitable service operation (arising from operating in non-profitable routes, as part of social commitment).
3. Shorter repayment period of loans availed from KTDFC at high interest rate for payment of pension.
4. Repayment of loans taken from other banking and non banking institutions for payment of pension.
5. From 1990 onwards Central Govt has stopped contributing Capital to STUs, including KSRTC.
6. Nominal contribution of capital of State Govt.
7. Increase in price of diesel and spare parts, without corresponding increase in fares, and
8. Cost of social obligation services provided by KSRTC are not reimbursed to KSRTC by Government.
75. Insofar as the pension payments are concerned, the Corporation contends that till 1984, the employees of the Corporation were not entitled to pension and thereby their pay scales were higher as compared to other Public Sector Undertakings. From 1984, the employees of the Corporation were also given pension on a par with Government employees, in accordance with the directions of the Government. This was, in fact, done without creating any corpus towards pension fund, nor was any assessment made on the future liability as well.
76. Logistically, in 1984, the pension liability was around ` 3.4 crore per month; presently, the liability exceeds ` 42 crore, with the certainty of its increasing further. It is the specific contention of the Corporation that the decision for payment of pension was taken at the level of the Government in 1984 without any proposal from the Corporation. This assertion of the Corporation is, however, contested by the learned Special Government Pleader.
77. All is said and done, this Court does not desire to be uncharitable to the Government regarding its past efforts in extending financial assistance, treated as loan, to the Corporation. The loan assistance from the Government and the KTDFC during the last five years and during April – November 2014 is as follows:.
(Figures Rs in crore)
78. As on 31.10.2014, the total liabilities of the Corporation are said to be to the tune of ` 2,758.50 crores. Almost the entire amount is owed to the Government and KTDFC in equal measure.
79. The Corporation tabulates the total number of pensioners and the range of their pensions as follows:
Range of Monthly Pension Number of Pensioners:
80. In a conspectus, it can be stated that the total number of pensioners are 35747; the monthly payments towards the pension disbursement is ` 40.22 crores. Though the Corporation has pleaded about the social commitments, such as travel concessions, imposed on it by the Government, it may not be relevant to refer to them.
81. At any rate, the Corporation is said to have proposed a revival package. Indisputably, the Government, initially, responded to the crisis and floated a revival package in G.O.(MS)No.06/2014/Tran. dated 01.02.2014, which is Exhibit P5 in W.P.(C)No.3893/2014. As per Annexure-IV of the revival package the liability of payment of pension is decided to be shared between the Government and the Corporation at 1:1 ratio in the following manner:
A. By Government Direct contribution for pension payment ` 120 Crore Compensation for Social Obligation concessions ` 100 Crore
B. By Corporation Pension Cess for ticket above ` 25/- ` 150 Crore A portion of the amount already set Apart for pension as per Supreme ` 70 Crore Court Direction
82. It is further pertinent to observe that a learned Division Bench of this Court through an earlier order, dated 20.11.2002, in W.A.No.289/2001, directed the Corporation to earmark 10% of the daily collection to create a fund for disbursement of the pensionary benefits to its retired employees. It seems, the learned Division Bench has further ordered the Corporation to use the amounts in Provident Fund account only for satisfying the provident fund claims of the existing and retired employees.
83. The other aspects of the revival package seem to be as follows:
(a) Finding a solution for the burgeoning liability of pension and proposal of LIC submitted in March, 2014.
(b) In order to improve the credit worthiness, revaluation of assets is proposed.
(c) Swapping of existing loans with low interest rate and longer repayment period loans.
(d) Conversion of Government Loans to Equity.
(e) Introduction of Pension Cess for tickets above Rs.25 for creating a Pension Fund.
(f) Rationalization of loss making schedules.
(g) Modernization and introduction of customer satisfaction technologies.
(h) Stopping of free passes to retired employees.
Government’s Assurance:
84. It is worthwhile to take note of the Government’s assurance, as could be gathered from its first counter affidavit, that the Government is closely monitoring the progress and implementation of the revival measures in the Corporation at regular intervals. There is no gainsaying the fact that the Government took, on the whole, a diametrically opposite stand in its additional counter affidavit. On that count, it is apt to observe that this Court is conscious of the fact that every Government elected on a popular mandate, in emerging economy, is faced with inexhaustible inventory of welfare measures and inelastic economic resources to meet the targets, the distance between both of them being, more or less, unbridgeable. But, at the same time, the Government cannot view the Corporation as its integral part in carrying the burden of socio-economic obligations and as a dispensable appendage when it comes to meeting its financial obligations. The Corporation owes its existence to the State, it draws sustenance from it and dies out, if the State does not want it. We cannot view the Corporation apart from the State, save for certain legal fictions.
85. Leaving aside the statutorily subsuming character of the State, vis-a-vis, the Corporation, even operationally the Corporation is, more or less, a spectator in managing its affairs. To exemplify, we can refer to Exhibit P11B in W.P.(C)No.3893/2014. I have already adverted to the submissions of the learned counsel for the petitioners that KTDFC constructed shopping complexes on the properties of the Corporation on the basis of Built-Operate-Transfer (BOT). In this regard, it is worthwhile to observe the answers of the Corporation to the queries under Right to Information Act from some of its former employees:
1. In which places owned by KSRTC agreement was signed with KTDFC for construction of shopping complexes on BOT basis? Furnish the area of each plan.
Ans: KSRTC has not signed any agreement with KTDFC for construction of Shopping Compled on BOT basis. Only the Government Order is available.
2. Whether Board of Directors of the Corporation had accorded sanction for the above matters and if so furnish the copy?
Ans: Implementation is based on the Government Order.
3. Whether there is any joint venture agreement between KSRTC and KTDFC for the above purpose and if so furnish the copy?
Ans: Nil
4. Furnish the details in the above matter with regard to terms and conditions, rate of interest, period, details of contribution, repayment details and relevant rules for lending the property.
Ans: KTDFC is to be contacted.
5. Inform whether any officers of KSRTC are authorized to supervise the work of the above buildings and if so furnish the name, designation and copy of relevant orders.
Ans: KSRTC officers are not authorized to supervise the work based on BOT.
86. In tune with the above all embracing approach of the Government in the matters of the Corporation, it has, justifiably, issued Exhibit P12 Ordinance “the Kerala State Road Transport Corporation (Passenger Group Personal Accident Insurance, Improved Passenger Amenities, Employees Social Security and Cess on Passenger Ticket) Ordinance, 2014”. It has further appreciably reported to the Court from time to time the progress of the revival package it has been executing along with the Corporation. So far so good. But, half way through, it cannot throw in the towel.
87. It is to be further appreciated that nobody can find fault with the Government’s welfare measure of introducing statutory pension in the Corporation way back in 1984. Obligation or no obligation, to this day, Government, too, shouldered the burden of the Corporation. The issue is only with regard to carrying it on further. At this juncture, as has been indicated above, the Government cannot view itself different and distinct from the Corporation in discharging the statutory and constitutional obligations. Nor is the Government powerless either in reigning in the Corporation, if it is unruly or unmanageable.
88. This Court does not desire to have any reference to the alleged death of a couple of retired employees of the Corporation on account of non-payment of pension regularly. They are based on media reports. In the beginning, a reference has been made to it only with a view to underlining the importance of the issue, as has been strenuously canvassed by some of the learned counsel for the petitioners. In any event, we cannot and ought not to wait until something calamitous happens to galvanize ourselves into action.
89. Under the Act of 1950 powers are aplenty for the Government à la State. Under Section 34 of the Act, the Government can issue suitable directions to the Corporation, thus exercising its supervisory powers; under Section 36, it has the power to order enquiries into all or any of the activities of the Corporation; under Section 37, it can take over from the Corporation and administer any part of the undertaking of the Corporation, if Government, on receipt of the report under Section 36 is satisfied that it is necessary in the interest of the Corporation so to do; it has the power to supersede the Corporation, as could be seen from Section 38; and, as could be seen, in terms of Section 39 of the Act, the Corporation can be placed in liquidation by the order of the State Government with the previous approval of the Central Government.
90. Under these facts and circumstances, any effort on the part of the Government to wriggle itself out of the onerous task of setting the Corporation right, if at all it is called for, in the public interest, cannot be countenanced. It cannot exonerate itself from it, as it otherwise becomes abdication of a solemn statutory and constitutional obligation. Difficulties notwithstanding, the State has to move on, and, ipso facto, the Government has to carry on.
91. Thus, the question of interfering with or interdicting the policy of the Government does not arise. All through, the Government has assured monitoring and successful execution of the scheme to ensure prompt and regular payment of pension to the retired employees of the Corporation. It needs no reiteration at this juncture that we cannot have any dichotomy of administration or State and Corporation schism in meeting the statutory and constitutional obligations. Thus, based on the revival package and the statutory scheme of things, this Court proposes to dispose of the writ petitions.
Conclusion:
For the reasons stated above, this Court disposes of the writ petitions with the following directions:
a. The first respondent Government shall, in consultation with the second respondent Corporation, quantify, at least tentatively, subject to final settlement, its dues to the Corporation and pay within thirty days, not less than half of the amount so quantified to the Corporation to enable it to discharge its immediate pension obligations.
b. The first respondent shall take all necessary steps, in a time bound manner, to execute and implement Ext.P5 revival package, which includes the measures of creating a corpus fund, exploring the options of finding a permanent solutions, involving PSUs like LIC, as has already been undertaken.
c. The first respondent shall take all the necessary corrective steps administratively vis-à-vis the respondent Corporation, if the Government is of the opinion that it is the need of the hour, so as to put quietus to the recurrent issue of pension obligations, which+ are otherwise bound to persist.
Dama Seshadri Naidu, Judge tkv