2015 (1) TMI 1502 - SC - Indian Laws

Change-over of CPF to Pension Scheme - Request of the Appellants to switch-over to the Pension Scheme pursuant to the O.M. dated 1.5.1987, had been turned down - applicability of the O.M. dated 01.05.1987 to the employees of NWDA - whether reliance placed by the Tribunal upon the decision in S.L. Verma's case 2006 (11) TMI 722 - SUPREME COURT was correct? HELD THAT - Based on the provisions in O.M. proposal for framing of DCRG Rules for employees of NWDA was processed by the officers on deputation from pensionable departments with help from officers/employees. The officer and employees were fully involved and they cannot claim that they were totally ignorant of the orders. The changeover of employees cannot be suo-motto made applicable for NWDA employees. The Petitioners have failed to prove arbitrary action of the Respondents and hence SUDHIR CHANDRA SARKAR VERSUS TATA IRON STEEL 1984 (3) TMI 418 - SUPREME COURT , and ACCOUNTANT GENERAL, BIHAR AND ANOTHER VERSUS N. BAKSHI 1961 (11) TMI 69 - SUPREME COURT , has no application. It can be concluded that NWDA had framed its Regulation the CPF Rules, 1982 and they were duly approved by the Governing Body of NWDA. As NWDA is an autonomous body under the Ministry of Water Resources, it has framed it own bye-laws governing the employees. It has been time and again reiterated that the Court must adopt an attitude of total non-interference or minimal interference in the matter of interpretation of Rules framed by autonomous institutions. Parity between the employees of NWDA and Central Government employees - HELD THAT - NWDA cannot be treated as an instrumentality of the State Under Article 12 of the Constitution merely on the basis that its funds are granted by the Central Government. In ZEE TELEFILMS LTD ANR VERSUS UOI. ORS 2005 (2) TMI 773 - SUPREME COURT , it was held by this Court that the autonomous bodies having some nexus with the Government by itself would not bring them within the sweep of the expression 'State' and each case must be determined on its own merits. Thus, the plea of the employees of NWDA to be treated at par with their counterparts in Central Government Under Sub-rule (6)(iv) of Rule 2009 of General Financial Rules, merely on the basis of funding is not applicable. Even if it is presumed that NWDA is State Under Article 12 of the Constitution, the Appellants have failed to prove that they are at par with their counterparts, with whom they claim parity. As held by this Court in UNION TERRITORY CHANDIGARH VERSUS KRISHAN BHANDARI 1996 (10) TMI 528 - SUPREME COURT , the claim to equality can be claimed when there is discrimination by the State between two persons who are similarly situated. The said discrimination cannot be invoked in cases where discrimination sought to be shown is between acts of two different authorities functioning as State Under Article 12. Thus, the employees of NWDA cannot be said to be 'Central Government Employees' as stated in the O.M. for its applicability. Thus, by reason that the employees are governed by NWDA CPF Rules, 1982, the O.M. dated 01.05.1987 is not applicable to the Appellant-employees. Further, as they have not established that they are Central Government employees, at par with their counterparts, their claim of parity with Central Government Employees is also defeated. There are no merit in these appeals which are accordingly dismissed. Seeking direction/s to the Respondents to introduce and implement CCS Pension Scheme, 1972 to all the employees of the Navodaya Vidyalaya Samiti - HELD THAT - The cut-off date is a domain of the employer and so the introduction of new scheme of pension will be done considering all the relevant factors including financial viability of the same. No interference is warranted unless there is gross injustice is perpetrated. The Appellants have failed to prove any arbitrariness and discrimination with respect to the New Pension Scheme. The writ petitions and the appeal are also dismissed.

Summary

Issues Involved:
1. Applicability of the Office Memorandum (O.M.) dated 01-05-1987 to employees of NWDA and JNVS.
2. Financial implications as a valid consideration for denying pension.
3. Entitlement of NWDA and JNVS employees to parity in pension with Central Government employees and other autonomous institutions.
4. Arbitrariness or discrimination of the New Pension Scheme, 2004.

Detailed Analysis:

1. Applicability of the O.M. dated 01-05-1987 to Employees of NWDA and JNVS:
The primary issue was whether the O.M. dated 01-05-1987, which facilitated the switch-over from the Contributory Provident Fund (CPF) Scheme to the Pension Scheme for Central Government employees, applied to the employees of NWDA and JNVS.

NWDA Employees:
The Tribunal held that the O.M. applied to NWDA employees, citing bye-laws 26(a) and 28, which mandated that rules applicable to Central Government employees should apply mutatis mutandis to NWDA employees. However, the High Court overturned this decision, stating that NWDA is an autonomous body with its own CPF Rules framed in 1982, making the O.M. inapplicable. The Supreme Court upheld the High Court's view, emphasizing that NWDA employees are governed by their own CPF Rules, 1982, and not the Central Government rules.

JNVS Employees:
The JNVS was established on 28-02-1986, and its employees could not have been in service on 01-01-1986, a prerequisite for the O.M.'s applicability. The Supreme Court found merit in the argument that the O.M. could not apply to JNVS employees as they did not fulfill the conditions set forth in the O.M.

2. Financial Implications as a Valid Consideration for Denying Pension:
The financial viability of extending pension benefits was a significant concern.

The Supreme Court acknowledged the financial constraints highlighted by the Finance Ministry, which argued that extending pension benefits to all autonomous bodies would be financially infeasible. The Court cited previous judgments emphasizing that financial capacity is a relevant consideration in deciding wage structures and pension benefits.

3. Entitlement to Parity in Pension:
The employees of NWDA and JNVS sought parity with their counterparts in Central Government and other autonomous institutions like Kendriya Vidyalaya (KVS).

NWDA Employees:
The Supreme Court ruled that NWDA employees could not claim parity with Central Government employees as they are governed by their own CPF Rules, 1982. The Court also noted that NWDA is not an instrumentality of the State under Article 12 of the Constitution merely due to its funding by the Central Government.

JNVS Employees:
The Court held that JNVS employees could not claim parity with KVS employees as they did not meet the prerequisites of the O.M. and were not Central Government employees. The Court emphasized that the principle of equal pay for equal work applies only when there is total identity between the two groups of employees.

4. Arbitrariness or Discrimination of the New Pension Scheme, 2004:
The New Pension Scheme (NPS) introduced in 2004 was challenged for being discriminatory and not at par with the 1972 Pension Rules.

The Supreme Court found no arbitrariness or discrimination in the NPS. It upheld the High Court's view that the cut-off date for the NPS was within the domain of the employer and that financial viability was a legitimate consideration. The Court noted that the NPS was a new scheme with different considerations, and the employees failed to prove any gross injustice or discrimination.

Conclusion:
The Supreme Court dismissed the appeals, ruling that the O.M. dated 01-05-1987 did not apply to NWDA and JNVS employees, financial implications were a valid consideration for denying pension, and the employees were not entitled to parity with Central Government employees. The New Pension Scheme, 2004, was not found to be arbitrary or discriminatory. There was no order as to costs.