1988 (1) TMI 349 - SC - Indian Laws

Summary

Issues Involved:
1. Entitlement of All India Services members retired prior to 1.1.1973 to gratuity at revised rates.
2. Validity of rule 28(6) of the All India Services (Death-cum-Retirement Benefits) Rules, 1958.
3. Applicability of the principle in D.S. Nakara v. Union of India to gratuity payments.

Summary:

1. Entitlement of All India Services Members Retired Prior to 1.1.1973 to Gratuity at Revised Rates:
The Supreme Court examined whether members of the All India Services who retired before 1.1.1973 are entitled to gratuity at the rates specified in Notification No. 33/12/73-AIS (ii) dated 24.1.1975. The Central Administrative Tribunal had ruled that all members, irrespective of their retirement date, should receive liberalized pensionary benefits, including gratuity, as per the said notification. However, the Supreme Court set aside this part of the Tribunal's judgment, declaring that members who retired before 1.1.1973 are not entitled to claim gratuity based on the revised rates.

2. Validity of Rule 28(6) of the All India Services (Death-cum-Retirement Benefits) Rules, 1958:
The Tribunal had declared rule 28(6) unconstitutional insofar as it restricted pensioners to benefits available at their retirement date, denying them the benefits of the liberalized pension and gratuity. The Supreme Court, however, emphasized that the Tribunal's decision to ignore the precedent set by the Andhra Pradesh State Government Pensioners Association case was incorrect. The Supreme Court upheld the validity of rule 28(6) in the context of gratuity payments.

3. Applicability of the Principle in D.S. Nakara v. Union of India to Gratuity Payments:
The Supreme Court considered whether the principle in D.S. Nakara's case, which dealt with pension, applied to gratuity payments. The Court noted that while pension is a periodic payment, gratuity is a one-time payment made at retirement. The Court referenced previous decisions, including the Andhra Pradesh State Government Pensioners Association case and M.L. Abhyankar's case, which distinguished between pension and gratuity. The Court concluded that the principle in D.S. Nakara's case does not apply to gratuity payments, and there was no express or implied directive in the government notification to pay revised gratuity to those who retired before 1.1.1973.

Conclusion:
The Supreme Court allowed the appeal to the extent that members of the All India Services who retired prior to 1.1.1973 are not entitled to claim gratuity based on the revised rates specified in Notification No. 33/12/73-AIS (ii) dated 24.1.1975. The judgment of the Tribunal was set aside accordingly, with no order as to costs.