1997 (7) TMI 662 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of Notifications G.S.R. 1143(E) and G.S.R. 1144(E) dated December 5, 1988.
2. Retrospective amendment of Rule 2544 of the Indian Railway Establishment Code.
3. Impact on pension and retirement benefits of railway employees.

Summary:

1. Validity of Notifications G.S.R. 1143(E) and G.S.R. 1144(E):
The Supreme Court examined the validity of the notifications issued by the Union of India and the Railway Administration which amended Rule 2544 of the Indian Railway Establishment Code with retrospective effect. The amendments reduced the maximum limit of running allowance considered for pension calculations from 75% to 45% for the period from January 1, 1973, and to 55% from April 1, 1979.

2. Retrospective Amendment of Rule 2544:
The Court held that under the Proviso to Article 309 of the Constitution, the President has the power to promulgate rules with retrospective effect, but such rules should not violate any fundamental rights conferred by Part III of the Constitution. It was determined that the retrospective amendments to Rule 2544 adversely affected the vested rights of employees who had retired between January 1, 1973, and December 4, 1988, by reducing their pension benefits, which was deemed arbitrary and unreasonable.

3. Impact on Pension and Retirement Benefits:
The Court emphasized that pension is a valuable right earned by government servants, and any deprivation of this right after retirement is manifestly unreasonable and violative of Article 14 of the Constitution. The amendments in Rule 2544, which reduced the maximum limit of running allowance for pension calculations, were found to adversely affect the pension entitlements of employees who had already retired. The Court upheld the decision of the Full Bench of the Tribunal that the retrospective amendments to Rule 2544 were void as they offended Article 14 of the Constitution.

Conclusion:
The Supreme Court dismissed the appeals and special leave petitions filed by the Union of India and the Railway Administration, affirming that the retrospective amendments to Rule 2544 were unreasonable, arbitrary, and violative of the rights guaranteed under Articles 14 and 16 of the Constitution. The Court ruled that the pension of railway employees should be computed based on the rules in force at the time of their retirement, without the retrospective reduction of running allowance limits.