2009 (12) TMI 1032 - SC - Indian Laws

Option to switch over to pension scheme instead of continuing under the Contributory Provident Fund Scheme - Retired railway employee pension scheme - Information of the availability of option - Whether the respondent was entitled to exercise an option to switch over pension scheme, beyond the stipulated last date, that to twenty two years after retirement and receipt of the retirement dues under the Contributory Provident Fund Scheme? - HELD THAT - In this case, the facts that the employee was in service of the Railways itself before and at the time of retirement and was working as the Head of the Department and was receiving all communications relating to option for being circulated to all employees in his department. Therefore, the question of respondent not being aware of the option does not arise. The respondent chose not to exercise the option and continued to remain under the Contributory Provident Fund Scheme, and more important, received the entire PF amount on his retirement. In fact, as noticed, in his application before the Tribunal the respondent refers to all the options. He is careful to say that he was not 'intimated' about the contents of the last order relating to extension of the option, but does not say that he was unaware of the order extending the benefit of option. The respondent consciously chose not to exercise the option as he admittedly thought that receiving a substantial amount in a lump sum under the provident fund scheme (which enabled creation of a corpus for investment) was more advantageous than receiving small amounts as monthly pension under the pension scheme. In those days (between 1957 when the pension scheme was introduced and 1976 when the respondent retired) the benefits under the provident fund scheme and pension scheme were more or less equal; and there was a general impression among employees that having regard to average life expectancy and avenues for investment of the lump sum PF amount, it was prudent to receive a large PF amount on retirement rather than receive a small pension for a few years (particularly as there was a ceiling on the pension and as dearness allowance was not included in the pay for computing the pension). Having enjoyed the benefits and income from the provident fund amount for more than 22 years, the respondent could not seek switch over to pension scheme which would result in respondent getting in addition to the PF amount already received, a large amount as arrears of pension for 22 years (which will be much more than the provident fund amount that will have to be refunded in the event of switch over) and also monthly pension for the rest of his life. If his request for such belated exercise of option is accepted, the effect would be to permit the respondent to secure the double benefit of both provident fund scheme as also pension scheme, which is unjust and impermissible. The validity period of the option to switch over to pension scheme expired on 31.12.1978 and there was no recurring or continuing cause of action. The respondent's representation dated 8.10.1998 seeking an option to shift to pension scheme with effect from 1976 ought to have been straight away rejected as barred by limitation/delay and laches. Even on merits, the application has to fail. In Krishena Kumar v. Union of India 1990 (7) TMI 366 - SUPREME COURT , a Constitution Bench of this Court considering the options given to the Railway employees to shift to pension scheme, held that prescription of cut off dates while giving each option was not arbitrary or lacking in nexus. This Court also held that provident fund retirees who failed to exercise option within the time were not entitled to be included in the pension scheme on any ground of parity. Therefore, the respondent who did not exercise the option available when he retired in 1976, was not entitled to seek an opportunity to exercise option to shift to the pension scheme, after the expiry of the validity period for option scheme, that too in the year 1998 after 22 years. Claim on the basis of guarantee of equality - When a person is refused a benefit to which he is not entitled, he cannot approach the court and claim that benefit on the ground that someone else has been illegally extended such benefit. If he wants, he can challenge the benefit illegally granted to others. The fact that someone who may be not entitled to the relief has been given relief illegally is not a ground to grant relief to a person who is not entitled to the relief. The appeal is therefore allowed and the orders of the Tribunal and the High Court are set aside and the original application of the respondent before the tribunal is dismissed.

Summary

Issues Involved:
1. Entitlement to switch over to the pension scheme beyond the stipulated last date.
2. Validity of the Tribunal's direction to consider the respondent's representation.
3. Applicability of principles of equality and equal opportunity.

Detailed Analysis:

1. Entitlement to switch over to the pension scheme beyond the stipulated last date:
The respondent, who joined the Railway service on 10.2.1947, was initially under the Contributory Provident Fund Scheme. The Railway introduced a pension scheme on 16.11.1957, giving employees options to switch over to the pension scheme on multiple occasions until 31.12.1978. Despite being aware of these options, the respondent chose not to switch and continued with the Provident Fund Scheme. He retired voluntarily on 15.10.1976 and received his Provident Fund dues. Twenty-two years later, in 1998, he sought to switch to the pension scheme, which was rejected by the Railway Board. The Supreme Court held that the respondent, having consciously chosen not to exercise the option during his service and having received the Provident Fund amount, could not seek to switch over to the pension scheme after such a long delay. The Court emphasized that the option should be exercised within the specified time, and allowing a switch over after 22 years would result in unjust double benefits.

2. Validity of the Tribunal's direction to consider the respondent's representation:
The Tribunal initially directed the Railway Board to consider the respondent's representation without examining the merits, which led to further litigation. The Supreme Court criticized this approach, stating that courts/tribunals should not direct consideration of representations related to stale or dead issues. The Court cited its decision in C. Jacob v. Director of Geology and Mining, emphasizing that such directions could revive time-barred disputes and lead to unnecessary litigation. The Court held that the respondent's representation should have been rejected outright due to the significant delay and laches.

3. Applicability of principles of equality and equal opportunity:
The respondent argued that he should be allowed to switch over to the pension scheme based on the precedent of another employee, K.V. Kasturi, who was granted the option in 1994. The Supreme Court rejected this argument, stating that the principles of equality under Article 14 of the Constitution could not be enforced in a negative manner. The Court held that if a benefit was illegally or irregularly extended to someone, others could not claim the same benefit on that basis. The guarantee of equality applies only when the benefit was lawfully granted to someone similarly placed. The Court emphasized that perpetuating an irregularity or illegality was not permissible.

Conclusion:
The Supreme Court allowed the appeal, setting aside the orders of the Tribunal and the High Court, and dismissed the respondent's original application. The Court upheld the principle that options to switch over to beneficial schemes must be exercised within the stipulated time and that stale claims should not be entertained. The decision reinforced the importance of adhering to prescribed timelines and the inadmissibility of claims based on the extension of irregular benefits to others.