1982 (12) TMI 151 - SC - Indian Laws

It provides that no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, Railway Company or shop exempted under Section 5 shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court - Held that gratuity is a social welfare measure rendering socio economic justice by providing economic security in the fall of life when physical and mental prowess is ebbing, corresponding to ageing process and when, once falls back on savings. Such payments cannot be withheld unless specifically permitted by any statutory provision.

Issues Involved:
1. Classification of pensioners based on the date of retirement.
2. Violation of Article 14 of the Constitution.
3. Rationality and relevance of the specified date for pension eligibility.
4. Financial implications of extending the liberalized pension scheme to all pensioners.
5. Severability of the unconstitutional part of the pension scheme.

Detailed Analysis:

1. Classification of Pensioners Based on the Date of Retirement:
The primary contention was whether pensioners who retired before a specified date and those who retired after that date could be classified into different groups for the purpose of pension benefits. The petitioners argued that all pensioners form a single class and that there should not be any sub-classification within this group based on the date of retirement. The Court noted that the classification of pensioners based on the date of retirement was arbitrary and lacked rational justification.

2. Violation of Article 14 of the Constitution:
The Court examined whether the differential treatment of pensioners based on the date of retirement was violative of Article 14, which guarantees equality before the law. The Court reiterated that Article 14 forbids class legislation but permits reasonable classification for legislative purposes. The classification must be based on an intelligible differentia and must have a rational relation to the object sought to be achieved. The Court found that the classification based on the date of retirement did not meet these criteria and was therefore unconstitutional.

3. Rationality and Relevance of the Specified Date for Pension Eligibility:
The Court scrutinized the rationale behind selecting a specific date for the eligibility of the liberalized pension scheme. It was found that the date was arbitrarily chosen without any rational basis related to the objectives of the pension scheme. The Court emphasized that the purpose of the liberalized pension scheme was to provide economic security in old age, which should apply uniformly to all pensioners irrespective of their retirement date.

4. Financial Implications of Extending the Liberalized Pension Scheme to All Pensioners:
The Court addressed the argument that extending the liberalized pension scheme to all pensioners would have significant financial implications. It was clarified that the pension scheme is a non-contributory statutory liability of the government, budgeted annually. The Court found that the financial impact of including all pensioners under the liberalized scheme would not be unbearable and should not deter the government from providing equitable pension benefits.

5. Severability of the Unconstitutional Part of the Pension Scheme:
The Court considered whether the unconstitutional part of the pension scheme could be severed while retaining the beneficial provisions. It concluded that the arbitrary eligibility criteria based on the date of retirement could be severed without affecting the overall scheme. The liberalized pension scheme could be applied to all pensioners from the specified date, ensuring uniformity and compliance with Article 14.

Conclusion:
The Court held that the classification of pensioners based on the date of retirement was unconstitutional as it violated Article 14 by introducing arbitrary and discriminatory treatment within a homogeneous class. The specified date for eligibility was found to be an irrational criterion unrelated to the objectives of the pension scheme. The Court severed the unconstitutional part of the scheme, extending the benefits of the liberalized pension scheme to all pensioners governed by the 1972 Rules, effective from the specified date, without any arrears for the period prior to that date. The judgment ensured that all pensioners received equitable treatment in line with the principles of socio-economic justice and the constitutional mandate.

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