1999 (3) TMI 677 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the appellant-Board acted illegally or contrary to law in introducing a pension scheme prospectively from 1.7.1986.
2. Whether employees who retired before 1.7.1986 can compel the appellant-Board to extend the benefit of the newly introduced pension scheme with retrospective effect.

Issue-wise Detailed Analysis:

1. Introduction of Pension Scheme Prospectively from 1.7.1986:
The appellant-Board was established on 1.7.1957 under Section 5 of the Indian Electricity (Supply) Act, 1948. Initially, employees were governed by the Contributory Provident Fund Scheme. On their retirement before 1.7.1986, these employees received all retiral benefits under the existing scheme. The pension scheme was introduced by the appellant-Board effective from 1.7.1986 after obtaining necessary exemptions from the Family Pension Scheme, 1971, and Employees Deposit Linked Insurance Scheme, 1976. The High Court's Division Bench ruled that the delay in introducing the pension scheme deprived the employees of its benefits, and thus, the scheme should be extended retrospectively. However, the Supreme Court noted that the law is well settled on this issue. The Court emphasized that a new pension scheme can only benefit retirees if it is expressly made retrospective. Otherwise, old retirees who were non-pensioners remain outside its scope. The Court referenced several judgments, including V. Kasturi v. Managing Director, State Bank of India, and Union of India v. Lieu (Mrs.) E. locals, which supported the prospective application of new pension schemes.

2. Retrospective Application of Pension Scheme:
The Supreme Court examined the facts and legal precedents to determine whether the employees who retired before 1.7.1986 could claim the benefits of the newly introduced pension scheme. The Court highlighted that the employees were not governed by a pension scheme but by the Contributory Provident Fund Scheme at the time of their retirement. They received all retiral benefits as per the rules then in force. The appellant-Board introduced the pension scheme from 1.7.1986 based on a Central Government notification and financial constraints. The Court noted that changing the effective date would require reopening past cases and seeking retrospective exemptions, leading to significant financial burdens. The Court referenced judgments such as Hari Ram Gupta v. State of U.P. and All India PNB Retired Officers Assn. v. Union of India, which distinguished between continuing schemes and new schemes and upheld the validity of prospective application based on financial constraints and logical nexus.

Conclusion:
The Supreme Court concluded that the appellant-Board did not act illegally or contrary to law by introducing the pension scheme prospectively from 1.7.1986. The employees who retired before this date could not compel the Board to extend the scheme retrospectively. The Court set aside the Division Bench's judgment and upheld the Single Judge's order dismissing the writ petitions. The appeals were allowed with no order as to costs.