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TMI Blog2016 (9) TMI 1629X X X X Extracts X X X X X X X X Extracts X X X X ..... heme on 29.10.1999 - the Himachal Pradesh Corporate Sector Employees Pension (Family Pension, Commutation of Pension and Gratuity) Scheme, 1999. In the present judgment, the instant scheme will be referred to as 'the 1999 Scheme'. A perusal of 'the 1999 Scheme' reveals that its application extended to employees of some of the corporate bodies (- specified in Annexure-I, appended to 'the 1999 Scheme') in Himachal Pradesh. There were in all 20 corporate entities, named in Annexure-I. These corporate bodies functioned as independent entities, under the Departments of Industries, Welfare, Horticulture, Forest, Food and Supplies, Tourism, Town and Country Planning, Housing and General Administration. 3. Paragraph 2 of 'the 1999 Scheme', provided for the zone of application of the said Scheme. It expressly provided, that the same would apply to only such of the employees, "who opted for the benefit under the scheme". It is necessary to expressly notice, that paragraph 2 of 'the 1999 Scheme' required, that the above option would be exercised by the employees in writing, in the format provided for the same. This option, was required to be submitted within 30 days of the notification of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting employees of the Corporation as on 1.4.99 shall have the option either to elect the pension scheme or to continue under existing Provident Fund scheme. (b) The existing employees who opt for Pension Scheme shall automatically forfeit their claim to employer's share of CPF including interest thereon to the State Government as well as other claims under CPF Schemes by whatsoever name called in respect of all past accumulations upto 31.3.1999. The amount of their subscriptions to the fund alongwith interest (excluding employer's share and interest thereon) shall be transferred to GPF account to be allotted and maintained by the concerned Corporate Sector Organisation as per Rules adopted by them". It is apparent from the above extract, that even though 'the 1999 Scheme' was to take effect from 1.4.1999 (- under paragraph 1(3) of 'the 1999 Scheme'), a claim for pension by an employee governed by the above scheme, would arise only at the time of the employee's retirement, on attaining the age of superannuation, or when he was retired from service by the employer, or in case of his death in harness. This is how, the appellant-State views the above provision (detailed submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accordingly exempted from the applicability of the Provident Fund Act. It is apparent, that the communication dated 11.9.2001 clarified, that as the corporate bodies fell within the ambit of Section 16(1)(b) of the Provident Fund Act, it would not be applicable to the concerned establishments in the State of Himachal Pradesh, with effect from 1.4.1999. 9. The above communication dated 11.9.2001, came to be endorsed by the Union Minister of Labour, on 17.9.2001. The observations recorded in the order of the Union Minister are extracted hereunder: "I have had the matter examined. It has been, noted from the Notification of the State Government dated 29.10.1999 that all regular employees of these undertakings are entitled to pension, commutation of pension, gratuity as applicable to the State Govt. Employees of Himachal Pradesh. In such circumstances the EPF & MP Act, 1952 shall not apply. The Pension would be discharged by the Himachal Pradesh Government in terms of Section 16(1)(b). These establishments would be out of the purview of the Act from the date the Notification has come into force." In view of the factual position narrated herein above, the provisions of the Provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was maintained at the same level, the pension fund balance would be Rs.15.76 crores. Keeping in mind, the approximate pension liability of Rs.14.56 crores for the year 2015-16, it was inferred, that the financial liability towards pension for the following year, i.e., 2016-17 would not be met, out of the pension fund. It was therefore infrerred, that the payment of pension to regular employees of the concerned corporate bodies, could not be paid and sustained, out of the pension fund contemplated under 'the 1999 Scheme'. Accordingly, the high powered committee recorded its conclusions as under: "In view of the above "the committee" is of the view that the pension scheme for Corporate Sector employees based on contribution by the State Government will not be viable on a self sustaining basis mainly due to the following reasons:- i). Uncertainty in the rate of interest regime. ii). Declining recruitment in the Corporate Sector would deplete the size of the corpus to be created and it would be difficult to honour liabilities accruing after 10-12 years. iii). The pension plan envisages payment of pension to Corporate Sector employees as is being paid to the Government employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of 'the 1999 Scheme' by the notification dated 2.12.2004, challenged the repeal notification, by filing a number of writ petitions, before the High Court of Himachal Pradesh, at Shimla (hereinafter referred to as the High Court). By the impugned common order dated 19.12.2013, the High Court allowed all the writ petitions. The final determination of the High Court, is apparent from the following conclusions recorded by it: "78. There is no merit in the contention of learned Advocate General that the scheme could not be implemented due to financial crunch. The State was aware of the financial implication at the time of issuance of notification dated 29.10.1999. It is the sovereign responsibility of the State to garner revenue to make welfare measures, including payment of pensionery/retiral benefits. 79. It cannot be gathered from the plain language that either expressly or by implication notification dated 2.12.2004 would apply retrospectively. 80. Accordingly, in view of the analysis and discussion made hereinabove, all the writ petitions are allowed. The cut-off date 2.12.2004 is declared ultra vires. Notification dated 2.12.2004 is read down to save it from unconstit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um of gratuity as well as the increased ceiling of gratuity consequent upon merger of a portion of dearness allowance into dearness pay reckonable for the purpose of calculating gratuity, was irrational or arbitrary. 26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1.4.1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level." On the same proposition, reliance was also placed on A.K. Bindal v. Union of India, 2003 (5) SCC 163, and our attention was drawn to the following observations recorded therein: "13. The change in policy effected by these memorandums was that the Government would not provide any budgetary support for the wage increase and the undertakings themselves will have to generate the resources to meet the additional expenditure, which will be incurred on account of increase in wages. So far as sick ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eet the additional expenditure incurred on account of increase in wages and that the government will not provide any funds for the same. Such of the public sector enterprises (government companies) which had become sick and had been referred to BIFR, were obviously running on huge losses and did not have their own resources to meet the financial liability which would have been incurred by revision of pay scales. By the office memorandum dated 19- 7-1995 the Government merely reiterated its earlier stand and issued a caution that till a decision was taken to revive the undertakings, no revision in pay scale should be allowed. We, therefore, do not find any infirmity, legal or constitutional in the two office memorandums which have been challenged in the writ petitions. 18. We are unable to accept the contention of Shri Venkataramani that on account of non-revision of pay scales of the petitioners in the year 1992, there has been any violation of their fundamental rights guaranteed under Article 21 of the Constitution. Article 21 provides that no person shall be deprived of his life or personal liberty except according to procedure established by law. The scope and content of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industrial Tribunal, the employees of the Regional Rural Banks were also given the benefits of the same settlement. Subsequently, the pay structures of the employees of the nationalised commercial banks were further revised by the 6th and 7th bipartite settlements but the same was not done for the employees of the Regional Rural Banks who then filed writ petitions. It was contended on behalf of the Union of India and also the Banks that financial condition of the Regional Rural Banks was not such that they may give their employees the pay structure of the employees of the nationalised commercial banks. It was in these circumstances that this Court observed that the decision of the National Industrial Tribunal in the form of an award having been implemented by the Central Government, it would not be permissible for the employer bank or the Union of India to take such a plea in the proceedings before the Court. The other case namely All India Regional Rural Bank Officers Federation v. Govt. of India, (2002) 3 SCC 554, arose out of interlocutory applications and contempt petitions which were filed for implementation of the direction issued in the earlier case, namely, South Malabar G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich they are working did not have the financial capacity to grant revision in pay-scale, yet the Government should give financial support to meet the additional expenditure incurred in that regard. 8. We have carefully gone through the pleadings, the Annexures filed by both sides and the orders passed by the BIFR and the judgments cited by the counsel appearing on either side. Learned counsel for the contesting respondent drew our attention to a recent judgment of this Court in A.K. Bindal and Anr. v. Union of India, (2003) 5 SCC 163, in support of her contention. We have perused the said judgment. In our opinion, since the employees of Government companies are not Government servants, they have absolutely no legal right to claim that the Government should pay their salary or that the additional expenditure incurred on account of revision of their pay-scales should be met by the Government. Being employees of the companies, it is the responsibility of the companies to pay them salary and if the company is sustaining losses continuously over a period and does not have the financial capacity to revise or enhance the pay-scale, the petitioners, in our view, cannot claim any legal ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evident from the above that it is neither within the domain of the courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are our courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. 47. Process of disinvestment is a policy decision involving complex economic factors. The courts have consistently refrained from interfering with economic decisions as it has been recognised that economic expediencies lack adjudicative disposition and unless the economic decision, based on economic expediencies, is demonstrated to be so violative of constitutional or legal limits on power or so abhorrent to reason, that the Courts would decline to interfere. In matters relating to economic issues, the Government has, while taking a decision, right to "trial and error" as long as both trial and error are bona fide and within limits of authority. There is no case made out by the petitioner that the decision to disinvest in BALCO is in any way capri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of abolition of post. The abolition of post is not a personal penalty against the government servant. The abolition of post is an executive policy decision. Whether after abolition of the post the Government servant who was holding the post would be offered any employment under the State would therefore be a matter of policy decision of the Government because the abolition of post does not confer on the person holding the abolished post any right to hold the post." Reliance was also placed on Excise Commissioner, U.P., Allahabad v. Ram Kumar, (1976) 3 SCC 540, and reference was made to the following observations recorded therein: "Appeals Nos. 399 to 404 of 1975 which raise another point as well viz. the validity of the appellants' demand from the respondents in respect of sales tax at the rate of ten paise per rupee on the retail sales of country spirit made by the latter with effect from April 2, 1969 stand on a slightly different footing. Section 3-A and 4 of the U.P. Sales Tax Act, 1948 clearly authorise the State Government to impose sales tax. The fact that sales of country liquor had been exempted from sales tax vide Notification No. ST-1149/X-802(33)-51 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 'the 1999 Scheme', reliance was placed on paragraph 4 of 'the 1999 Scheme' (already extracted above). It was the pointed assertion of learned counsel, based on paragraph 4 of 'the 1999 Scheme', that a claim towards pension could be raised by an employee under 'the 1999 Scheme' only "...when an employee retires or is retired or dies or is discharged as the case may be ...". It was submitted, that only such of the employees who could avail the benefit of pension, were protected from the effect of the repeal notification dated 2.12.2004. It was submitted, that such of the employees who had opted for 'the 1999 Scheme', but were not occasioned with the effect of the contingencies contemplated under paragraph 4 of 'the 1999 Scheme', were not entitled to claim a vested right. It was urged, that a vested right can only be established, when all the incidents which would entitle an employee to draw pensionary rights, under 'the 1999 Scheme', stood satisfied. It was pointed out, that only on the happening of one of the events depicted in paragraph 4, a vested right would emerge. It was the unequivocal submission of learned counsel for the appellants, that none of the respondent-employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a policy securing a deferred annuity upon the life of such member to be effected by the Trustees as agents for and on behalf of the Society and the members respectively with the Co-operative Insurance Society Limited securing the payment to the Trustees of an annuity equivalent to the pension to which such member shall be entitled under the Scheme and the Rules; the insurers shall agree that the Trustees shall be entitled to surrender such deferred annuity and that, on such deferred annuity being so surrendered, the insurers will pay to the Trustees the total amount of the premiums paid in respect thereof together with compound interest thereon; all moneys received by the Trustees from the insurers shall be held by them as Trustees for and on behalf of the person or persons entitled thereto under the Rules of the Scheme; any policy or policies issued by the insurers in connection with the Scheme shall be deposited with the Trustees; the Society shall contribute one-third of the premium from time to time payable in respect of the policy securing the deferred annuity in respect of each member as thereinbefore provided and the member shall contribute the remaining two-thirds; the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st for and on behalf of the person or persons entitled thereto under the rules of the Scheme. The Trustees are enjoined to take out policies of insurance securing a deferred annuity upon the life of each member, and funds are provided by contributions from the employer as well as from the employees. The Trustees realise the annuities and pay the pensions to the employees. Under certain contingencies mentioned above, an employee would be entitled to the pension only after superannuation. If the employee leave the service of the Society or is dismissed from service or dies in the service of the Society, he will be entitled only to get back the total amount of the portion of the premium paid by him, though the trustees in their discretion under certain circumstances may give him a proportion of the premiums paid by the Society. The entire amount representing the contributions made by the Society or part thereof, as the case may be, will then have to be paid by the Trustees to the Society. Under the scheme the employee has not acquired any vested right in the contributions made by the Society. Such a right vests in him only when he attains the age of superannuation. Till that date that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finally crystallized on his retirement whereafter no continuing obligation remained, while on the other hand, as regards Pension retirees, the obligation continued till their death....." Based on the legal position declared by this Court in the above judgments, it was urged, that in the absence of any vested right, a challenge to the notification dated 2.12.2004, was neither sustainable nor maintainable in law. 19. It would be relevant to notice, that 'the 1999 Scheme' became operational with effect from 1.4.1999. It remained operational till the issuance of notification dated 2.12.2004. While repealing 'the 1999 Scheme', the notification dated 2.12.2004, did not deprive such of the employees who had retired during subsistence of the Scheme, of the benefits that had accrued to them, under 'the 1999 Scheme'. Only such of the employees who were to retire on or after 2.12.2004, were disentitled to the benefits under the Scheme. It was the submission of learned counsel for the appellants, that the choice of the cut-off date - 2.12.2004 in the present controversy, is a permissible incident in law. It was pointed out, that the instant proposition has been repeatedly examined by this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bringing about a discrimination between similarly situated persons, no interference is called for by the court in that behalf. It appears that in the Calcutta Corporation, a pension scheme was in force prior to 1914. Later, that scheme appears to have been given up and the Provident Fund Scheme introduced under the Provident Fund Scheme, a certain amount was deducted from the salary of the employees every month and credited to the Fund. An equal amount was contributed by the employer which too was credited to the Fund. The total amount to the credit of the employee in the Fund was paid to him on the date of his retirement. The employees, however, were demanding the introduction of a pension scheme. The demand fell on receptive years in the year 1977... maybe because in that-year the Left Front Government came to power in that State, as suggested by the writ petitioners. The State Government appointed a Commission to examine the said demand and to recommend the necessary measures in that behalf. The three members constituting the Commission differed with each other in certain particulars. The Government examined their recommendations and accepted them with certain modifications in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omprising E.S. Venkataramiah and Sabyasachi Mukharji, JJ." It was pointed out, that the determination rendered in the above two judgments has been reiterated by this Court in State of Rajasthan v. Amrit Lal Gandhi, (1997) 2 SCC 342. Last of all, learned counsel invited the Court's attention to R.R. Verma v. Union of India, (1980) 3 SCC 402, wherefrom reliance was placed on the following:- "5. The last point raised by Shri Garg was that the Central Government had no power to review its earlier orders as the rules do not vest the government with any such power. Shri Garg relied on certain decisions of this Court in support of his submission: Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji, (1971) 3 SCC 844; D.N. Roy v. State of Bihar, (1970) 3 SCC 119, and State of Assam v. J.N. Roy Biswas, (1976) 1 SCC 234. All the cases cited by Shri Garg are cases where the government was exercising quasi-judicial power vested in them by statute. We do not think that the principle that the power to review must be conferred by statute either specifically or by necessary implication is applicable to decisions purely of an administrative nature. To extend the principle to pure administrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to constitute the corpus fund, to be administered and maintained by the Finance Department of the State Government, which would make 'the 1999 Scheme', self-financing. The above submission, was drawn from a collective reading of paragraphs 4(b) and 5 of 'the 1999 Scheme'. It was further contended, that an employee's own contribution to the CPF, i.e. the subscription amount contributed by the employee to his own CPF account, was to be retained in his GPF account. The instant employee's contribution, was to be disbursed to him, at the time of his retirement, as GPF. As such, it was pointed out, that the contributions made by the employees, from out of their own funds, were unaffected by 'the 1999 Scheme'. 23. It was therefore highlighted by learned counsel, that the present controversy has nothing to do with an employee's contribution, but was limited to the right of an employee to claim pension under 'the 1999 Scheme'. It was urged, that the exercise of an option to switch over from the CPF scheme, to 'the 1999 Scheme', did not result in a vested right, to earn pension. To support the instant contention, it was pointed out, that one of the pre-conditions for earning pension, is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed right for sanction and which has been accepted by the Division Bench of the High Court, is not a right in relation to "ownership or possession of any property" for which the expression "vest" is generally used. What we can understand from the claim of a "vested right" set up by the respondent Company is that on the basis of the Building Rules, as applicable to their case on the date of making an application for sanction and the fixed period allotted by the Court for its consideration, it had a "legitimate" or "settled expectation" to obtain the sanction. In our considered opinion, such "settled expectation", if any, did not create any vested right to obtain sanction. True it is, that the respondent Company which can have no control over the manner of processing of application for sanction by the Corporation cannot be blamed for delay but during pendency of its application for sanction, if the State Government, in exercise of its rule- making power, amended the Building Rules and imposed restrictions on the heights of buildings on G.T. Road and other wards, such "settled expectation" has been rendered impossible of fulfillment due to change in law. The claim based on the alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out, that the above determination at the hands of the High Court, would have the effect of 'the 1999 Scheme' remaining in place, till such time as employees engaged in corporations upto 2.12.2004 eventually retired on attaining the age of superannuation. In the above view of the matter, it was asserted, that in the manner the legality of the issue has been determined by the High Court, 'the 1999 Scheme' which was repealed on 2.12.2004, would actually and factually continue to be operational, for a further period of approximately 20 years, by which time alone, employees engaged prior to the notification dated 2.12.2004, would retire from service. 27. It was also the contention of learned counsel, that the confinement of the pensionary benefits under 'the 1999 Scheme', to such of the employees, who had retired from the concerned corporations, between 1.4.1999 and 2.12.2004, could not be invalidated because the right to receive pension stood crystalised and vested in them in terms of paragraph 4 of 'the 1999 Scheme'. It was submitted, that a statutory classification cannot be set aside, when there is overwhelming justification, demonstrating a valid basis, therefor. The repe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. It was decided that employees retiring on or after 1-1- 1990 would be able to exercise the option of getting either pension or provident fund. Financial impact of making the Regulations retrospective can be the sole consideration while fixing a cut-off date. In our opinion, it cannot be said that this cut-off date was fixed arbitrarily or without any reason. The High Court was clearly in error in allowing the writ petitions and substituting the date of 1-1-1986 for 1-1-1990." For the same proposition, reliance was also placed in Union of India v. R. Sarangapani, (2000) 4 SCC 335, and our attention was drawn to the following observations recorded therein:- "11. One more aspect which we want to emphasise is that the applicants who were appointed to the technical posts and the other persons who were appointed to the non-technical posts are not on the same footing. The nature of their jobs was different, the qualifications for appointment were different and the training period was to be longer for the technical staff. It was obviously necessary that those who were to occupy the technical posts should have a longer period of training than those who were to occupy the non-techni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing regard to the budgetary provision, as to what extent it could go and whether it could fix a cut-off date which was co-terminus with the commencement of the recommendation of the Fourth Pay Commission, namely, 1-1-1986. On the peculiar facts of this case the said date was perfectly valid because the only consideration was the financial burden of the State and not any principle of equality." 28. In order to canvass the proposition noticed hereinabove, learned counsel also placed reliance on, 'A Treatise on the Constitutional Limitations', authored by Thomas M. Cooley (Indian Reprint of 2005, Hindustan Law Book Company, Calcutta), and invited our attention to following observations recorded in Chapter XI, bearing the heading - Of The Protection To Property By 'The Law Of The Land':- "The chief restriction is that vested rights must not be disturbed; but in its application as a shield of protection, the term "vested rights" is not used in any narrow or technical sense, as importing a power of legal control merely, but rather as implying a vested interest which it is equitable the government should recognize, and of which the individual cannot be deprived without injustice. And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vested right to claim pension under 'the 1999 Scheme', and that, it was not open to them to assail the partial repeal of 'the 1999 Scheme', vide notification dated 2.12.2004. 29. In the process of repudiating the submissions advanced at the hands of the appellants, Mr. Guru Krishna Kumar, learned senior counsel representing the respondent-employees, drew our attention to certain factual aspects of the matter, which according to him, needed to be kept in mind, while determining the veracity of the challenge raised by the State Government. It was pointed out, that all the respondent-employees, were already in the employment of corporate bodies, in the State of Himachal Pradesh, on the date 'the 1999 Scheme' was introduced - on 1.4.1999. Learned counsel asserted, that it was not disputed at the behest of the State Government, that all the respondent-employees were entitled to benefits under 'the 1999 Scheme', either on account of having exercised their option to be governed by 'the 1999 Scheme', or by virtue of the deeming provision expressed in paragraph 2(2) of 'the 1999 Scheme'. It was asserted, that all the employees who came to be governed by 'the 1999 Scheme', constituted a ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in corporations in the State of Himachal Pradesh, did not create a vested right in them. It was submitted, that a mere subscription to 'the 1999 Scheme', by exercising their option to be governed by the same, created a vested right in the respondent-employees. In this behalf it was pointed out, that retirement on attaining the age of the superannuation, was relevant, only for the purpose of the accrual of a cause of action, for raising a claim for pension (under 'the 1999 Scheme'). Learned counsel, while acknowledging, that a right to claim pension would arise only when the concerned employee attained the age of superannuation, yet submitted, that the moment a contribution earlier payable to the employees as CPF on their retirement, was diverted to the corpus fund maintained by the Finance Department of the State Government, the same created a contingent right in each one of them (under 'the 1999 Scheme') to claim pension. It was therefore submitted, that there was no justification in the contention advanced on behalf of the appellants, that the action of the respondent-employees in opting for 'the 1999 Scheme', did not alter their position adversely, with reference to their er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees came into force from 1-4-1998 by merging the DA as on 1-1-1996. The pensionary benefits were also simultaneously revised w.e.f. 1-4-1998. Therefore, the revised pay drawn in the UGC pay scales for the period from 1-1-1996 up to 31-3-1998 shall not be taken as emoluments for the purpose of pensionary benefits. Accordingly,- (a) In respect of teachers drawing UGC pay scales who have retired during the period from 1-1-1996 to 31-3-1998, they shall be eligible for the benefit of the fixation of pay and arrears under the revised UGC scales of pay only. There shall not be any change in their pensionary benefits with reference to the revised UGC pay and the retirement benefits already sanctioned in the pre-revised UGC pay scales will not undergo any modifications. However, they shall be entitled to the benefit of fixation of revised pension/family pension as contemplated in GO No. FD (Spl.) 2 PET 99 dated 15-2-1999 only w.e.f. 1-4-1998. Para 6 of GO No. FD (Spl.) 2 PET 99 dated 15-2-1999 stands modified to this extent. (b) In respect of teachers drawing UGC pay scales and who have issued on or after 1-4-1998, the pay drawn in the revised UGC pay scales shall be counted for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out, that while calculating pensionary benefits, it was imperative for the employer to take into consideration, the actual pay drawn by the employees, at the time of their retirement. Accordingly it was held, that the action of the State Government in granting revised pay- scales with retrospective effect (with effect from 1.1.1996), but extending the benefit of revised pay for calculating pension, only with effect from 31.3.1998, was not sustainable in law. Inasmuch as, employees who had retired between 1.1.1996 and 31.3.1998 would be prejudicially affected. On the same proposition, learned counsel placed reliance on D.S. Nakara v. Union of India, (1983) 1 SCC 305, and invited our attention to the following observations made therein:- "20. The antequated notion of pension being a bounty, a gratuitous payment depending upon the sweet will or grace of the employer not claimable as a right and, therefore, no right to pension can be enforced through Court has been swept under the carpet by the decision of the Constitution Bench in Deokinandan Prasad v. State of Bihar, (1971) 2 SCC 330, wherein this Court authoritatively ruled that pension is a right and the payment of it do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "31. ... pension is not to be treated as a bounty payable on the sweet will and pleasure of the Government and that the right to superannuation pension including its amount is a valuable right vesting in a government servant." [p. 152] (emphasis supplied) In that case the right to receive pension was treated as property under Articles 31(1) and 19(1)(f) of the Constitution. 27. In D.S. Nakara v. Union of India, (1983) 1 SCC 305, this Court, after taking note of the decision in Deokinandan Prasad (supra), has said: (SCC p. 323, paras 28 and 29) "28. Pension to civil employees of the Government and the defence personnel as administered in India appears to be a compensation for service rendered in the past. However, as held in Dodge v. Board of Education, 302 US 74, a pension is closely akin to wages in that it consists of payment provided by an employer, is paid in consideration of past service and serves the purpose of helping the recipient meet the expenses of living. *** 29. ... Thus the pension payable to a government employee is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation or for service rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 19(1)(f) of the Constitution. Relying upon the decision in Deokinandan Prasad (supra), it was held: (SCC p. 406, para 6) "6. ... The fundamental right to receive pension according to the rules in force on the date of his retirement accrued to the appellant when he retired from service. By making a retrospective amendment to the said Rule 299(1)(b) more than fifteen years after that right had accrued to him, what was done was to take away the appellant's right to receive pension according to the rules in force on the date of his retirement or in any event to curtail and abridge that right. To that extent, the said amendment was void." 32. It is no doubt true that on 5-12-1988 when the impugned notifications were issued, the rights guaranteed under Articles 31(1) and 19(1)(f) were not available since the said provisions in the Constitution stood omitted with effect from 20-6-1979 by virtue of the Constitution (Forty-fourth Amendment) Act, 1978. But Notifications Nos. GSR 1143 (E) and GSR 1144 (E) have been made operative with effect from 1-1-1973 and 1-4-1979 respectively on which dates the rights guaranteed under Articles 31(1) and 19(1)(f) were available. Both the notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencement of qualifying service, the concerned employee is treated to have an inherent vested right, for a claim to pension. In order to substantiate the instant contention, learned counsel placed reliance on the D.S. Nakara case (supra), and invited our attention to the following observations recorded therein:- "46. By our approach, are we making the scheme retroactive? The answer is emphatically in the negative. Take a government servant who retired on April 1, 1979. He would be governed by the liberalised pension scheme. By that time he had put in qualifying service of 35 years. His length of service is a, relevant factor for computation of pension. Has the Government made it retroactive, 35 years backward compared to the case of a Government servant who retired on 30th March, 1979? Concept of qualifying service takes note of length of service, and pension quantum is correlated to qualifying service. Is it retroactive for 35 years for one and not retroactive for a person who retired two days earlier? It must be remembered that pension is relatable to qualifying service. It has correlation to the average emoluments and the length of service. Any liberalisation would pro tant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable to future retirees only. Therefore, there is no substance in the contention that the court by its approach would be making the scheme retroactive, because it is implicit in theory of wages." Based on the observations extracted above, it was submitted, that it was not open to the State to contend, that a vested right would be created under 'the 1999 Scheme', only on the date of retirement. Since pension has been recognized as deferred-wages for past services, payable on retirement, according to learned counsel, the moment an employee is enrolled on the pension scheme, his right to claim pension, must be deemed to have materialized. 32. Relying on certain paragraphs of 'the 1999 Scheme' (referred to above), it was submitted, that the appellants have erroneously treated the date of retirement, as the date on which the right to pension accrued to the employees. In this behalf it was pointed out, that the cause of action to receive pension would accrue to an employee on the date of his retirement. However, the right to receive pension crystalises, at the end of every successive day, and at the end of every successive month, and at the end of every successive year. It was pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n application to the Administrative Tribunal). One of the exceptions to the said rule is cases relating to a continuing wrong. Where a service related claim is based on a continuing wrong, relief can be granted even if there is a long delay in seeking remedy, with reference to the date on which the continuing wrong commenced, if such continuing wrong creates a continuing source of injury. But there is an exception to the exception. If the grievance is in respect of any order or administrative decision which related to or affected several others also, and if the reopening of the issue would affect the settled rights of third parties, then the claim will not be entertained. For example, if the issue relates to payment or refixation of pay or pension, relief may be granted in spite of delay as it does not affect the rights of third parties. But if the claim involved issues relating to seniority or promotion, etc., affecting others, delay would render the claim stale and doctrine of laches/limitation will be applied. Insofar as the consequential relief of recovery of arrears for a past period is concerned, the principles relating to recurring/successive wrongs will apply. As a conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rior to the date of the original application. [See: M.R. Gupta v. Union of India, 1995 (5) SCC 628, and Union of India v. Tarsem Singh, 2008 (8) SCC 648]". It was, therefore, the contention of learned counsel for the respondents, that the foundation to claim pension, accrued in the employees of all corporate bodies in the State of Himachal Pradesh (including all the respondent-employees herein), the very moment they came to be enrolled in 'the 1999 Scheme'. It was submitted, that all existing employees who had opted for pension or were deemed to have opted for pension, had vested in themselves the right to pension when they would retire from service. All employees who came to be engaged by corporations in the State, from 1.4.1999 up to 1.12.2004, were likewise vested with the right to receive pension, because of the fact, that at the very inception of their employment, they became members of 'the 1999 Scheme', and the period of service rendered by them would likewise constitute qualifying service, for pension. It was therefore submitted, that there was a clear distinction between two contingencies, firstly, the date on which a claim for pension can be stated to have vested in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution. For the instant proposition, learned counsel placed reliance on the decision rendered in State of Jharkhand v. Jitendra Kumar Srivastava, (2013) 12 SCC 210, and invited our attention to the following observations recorded therein:- "8. It is an accepted position that gratuity and pension are not bounties. An employee earns these benefits by dint of his long, continuous, faithful and un-blemished service. Conceptually it is so lucidly described in D.S. Nakara and Ors. v. Union of India, (1983) 1 SCC 305, by D.A. Desai, J., who spoke for the Bench, in his inimitable style, in the following words: (SCC pp. 319-20, paras 18-20) "18. The approach of the Respondents raises a vital and none too easy of answer, question as to why pension is paid. And why was it required to be liberalised? Is the employer, which expression will include even the State, bound to pay pension? Is there any obligation on the employer to provide for the erstwhile employee even after the contract of employment has come to an end and the employee has ceased to render service? 19. What is a pension? What are the goals of pension? What public interest or purpose, if any, it seeks to serve? If it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the right to receive pension by a Government servant is property, so as to attract Articles 19(1)(f) and 31(1) of the Constitution. This question falls to be decided in order to consider whether the writ petition is maintainable under Article 32. To this aspect, we have already adverted to earlier and we now proceed to consider the same. 28. According to the Petitioner the right to receive pension is property and the Respondents by an executive order dated 12-6-1968 have wrongfully withheld his pension. That order affects his fundamental rights under Articles 19(1)(f) and 31(1) of the Constitution. The Respondents, as we have already indicated, do not dispute the right of the Petitioner to get pension, but for the order passed on 5-8-1996. There is only a bald averment in the counter-affidavit that no question of any fundamental right arises for consideration. Mr. Jha, learned Counsel for the Respondents, was not prepared to take up the position that the right to receive pension cannot be considered to be property under any circumstances. According to him, in this case, no order has been passed by the State granting pension. We understood the learned Counsel to urge that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his judgment becomes too obvious. A person cannot be deprived of this pension without the authority of law, which is the Constitutional mandate enshrined in Article 300-A of the Constitution. It follows that attempt of the Appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced." For the same proposition, reliance was placed on the decision of this Court in the U.P. Raghavendra Acharya case (supra). Learned counsel while seeking to adopt the conclusions drawn by this Court in the above case asserted, that the subscription to the pensionary scheme by itself, would create a vested right in the respondent-employees, to draw pension under 'the 1999 Scheme'. 35. At this juncture, learned counsel for the respondent-employees also placed reliance on the U.P. Raghavendra Acharya case (supra), and invited the Court's attention to the following:- "19. The fact that the appellants herein were treated to be on a par with the holders of similar posts in government colleges is neither denied nor disputed. The appellants indisputably are governed by the UGC scales o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefits of the Pay Revision Committee in their favour. The pay in their case had been revised in 1986 whereas the pay of the employees of the State of Karnataka was revised in 1993. The benefits of the recommendations of the Pay Revision Committee w.e.f. 1-1-1996, thus, could not have been denied to the appellants. 23. The stand of the State of Karnataka that the pensionary benefits had been conferred on the appellants w.e.f. 1-4-1998 on the premise that the benefit of the revision of scales of pay to its own employees had been conferred from 1-1-1998, in our opinion, is wholly misconceived. Firstly, because the employees of the State of Karnataka and the appellants, in the matter of grant of benefit of revised scales of pay, do not stand on the same footing as revised scales of pay had been made applicable to their cases from a different date. Secondly, the appellants had been given the benefit of the revised scales of pay w.e.f. 1-1-1996. It is now well settled that a notification can be issued by the State accepting the recommendations of the Pay Revision Committee with retrospective effect as it was beneficent to the employees. Once such a retrospective effect is given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel for the respondent- employees, that the present controversy needs to be examined from the perspective, that the respondent-employees did not make any endeavour to claim pension as a matter of parity with Government employees, in the State of Himachal Pradesh. It was submitted, that legally such a claim would not be sustainable, because civil servants in the State of Himachal Pradesh, and employees of Government owned corporations in the State, can not be considered as entitled to the same monetary benefits. It was however pointed out, that insofar as the present controversy is concerned, the State of Himachal Pradesh at its own, had granted parity to employees of Government owned corporations on the subject of pension, with Government employees in the State. Examined in the above context, according to learned counsel, it is apparent that the right of employees of Government owned corporations, in the State of Himachal Pradesh, on the issue of pension, stood conceded in their favour, on the basis of 'the 1999 Scheme'. It was in the above view of the matter, that learned counsel for the respondent-employees asserted, that the revocation of a benefit which the State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red necessary for augmenting social security in old age to government servants then those who retired earlier cannot be worst off than those who retire later. Therefore, this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory. To illustrate, take two persons, one retired just a day prior and another a day just succeeding the specified date. Both were in the same pay bracket, the average emolument was the same and both had put in equal number of years of service. How does a fortuitous circumstance of retiring a day earlier or a day later will permit totally unequal treatment in the matter of pension? One retiring a day earlier will have to be subject to ceiling of Rs.8100 p.a. And average emolument to be worked out on 36 months' salary while the other will have a ceiling of Rs.12,000 p.a. and average emolument will be computed on the basis of last ten months' average. The artificial division stares into face and is unrelated to any principle and whatever principle, if there be an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pension scheme. It was ultimately held that the classification did not satisfy the test of Article 14 of the Constitution. 29. The Constitution Bench (in D.S. Nakara (supra)), has discussed in detail the objects of granting pension and we need not, therefore, dilate any further on the said subject, but the decision in the aforesaid case has been consistently referred to in various subsequent judgments of this Court, to which we need not refer. In fact, all the relevant judgments delivered on the subject prior to the decision of the Constitution Bench have been considered and dealt with in detail in the aforesaid case. The directions ultimately given by the Constitution Bench in the said case in order to resolve the dispute which had arisen, is of relevance to resolve the dispute in this case also. 30. However, before we give such directions we must also observe that the submissions advanced on behalf of the Union of India cannot be accepted in view of the decision in D.S. Nakara's case (supra). The object sought to be achieved was not to create a class within a class, but to ensure that the benefits of pension were made available to all persons of the same class equally. To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding for his daily wants, and it presupposes the continued life of the recipient." Based on the above, it was the contention of learned counsel, that the State Governments' inference, based on the report of the Committee, dated 15.11.2003, that 'the 1999 Scheme' was not viable, was clearly unacceptable. In this behalf, learned counsel invited the Court's attention to the following observations, recorded in the said report:- "14. After determining the magnitude of inflows and outflows, the sustainability of the corpus has been analysed assuming average interest income from corpus investment at various levels of interest over a period of 10 years. The highest rate of interest has been assumed to be 6.5% and the lowest 5.5%. In each scenario, the net surplus available for ploughing back into the pension fund starts declining from the 6th year onwards. This is essentially due to the fact that with dwindling fresh recruitments, the pension liabilities will continue to increase over the years, but the inflows would decline due to reduced contributions. Details of the calculations are as under:- 5.5% Annexure-F 5.75% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions of service of the concerned corporations, was vested with the Government. In this behalf, reliance was placed on Articles 51 and 52 of Articles of Association of the Himachal Pradesh State Forest Development Corporation Limited. It was highlighted that similar Articles of Association governed the other corporations, as well. It was therefore submitted, that the State Government, had no business, to withdraw itself, from its responsibility and commitment. 42. It was, therefore submitted, that the Government has consistently been extending the benefit of similar conditions of service, to employees of Government owned corporations, as are available to Government employees in the State. The Government having taken a conscious decision to extend pensionary benefits to all employees of Government owned corporations, under 'the 1999 Scheme', is clearly precluded from withdrawing the same, specially on account of the fact, that the corporations under consideration, are instrumentalities of the State in terms of Article 12 of the Constitution of India. According to learned counsel, 'the 1999 Scheme' was liable to be treated as a welfare measure, extended by the State Government t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground of retroactivity as being violative of Articles 14 and 16 of the Constitution, but a rule which seeks to reverse from an anterior date a benefit which has been granted or availed of, e.g., promotion or pay scale, can be assailed as being violative of Articles 14 and 16 of the Constitution to the extent it operates retrospectively. xxx xxx xxx 25. In these cases we are concerned with the pension payable to the employees after their retirement. The respondents were no longer in service on the date of issuance of the impugned notifications. The amendments in the rules are not restricted in their application in futuro. The amendments apply to employees who had already retired and were no longer in service on the date the impugned notifications were issued. xxx xxx xxx 30. The respondents in these cases are employees who had retired after 1- 1-1973 and before 5-12-1988. As per Rule 2301 of the Indian Railway Establishment Code they are entitled to have their pension computed in accordance with Rule 2544 as it stood at the time of their retirement. At that time the said rule prescribed that Running Allowance limited to a maximum of 75% of the other emoluments should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier, Rule 2301 of the Indian Railway Establishment Code prescribes in express terms that a pensionable railway servant's claim to pension is regulated by the rules in force at the time when he resigns or is discharged from the service of Government. The respondents who retired after 1-1-1973 but before 5-12-1988 were, therefore, entitled to have their pension computed on the basis of Rule 2544 as it stood on the date of their retirement. Under Rule 2544, as it stood prior to amendment by the impugned notifications, pension was required to be computed by taking into account the revised pay scales as per the 1973 Rules and the average emoluments were required to be calculated on the basis of the maximum limit of Running Allowance at 75% of the other emoluments, including the pay as per the revised pay scales under the 1973 Rules. Merely because the respondents were not paid their pension on that basis in view of the orders of the Railway Board dated 21-1-1974, 22-3-1976 and 23-6-1976, would not mean that the pension payable to them was not required to be computed in accordance with Rule 2544 as it stood on the date of their retirement. Once it is held that pension payable to suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel, placed reliance on State of Assam v. Barak Upatyaka D.U. Karmachari Sanstha, (2009) 5 SCC 694, and drew our attention to the following:- "2. By that order the Division Bench upheld the order dated 23.12.1999 of the learned Single Judge in Civil Rule No. 2996/1995 allowing the respondent's writ petition and directing the state government to sanction financial assistance by way of grant-in-aid to Cachar and Karimganj District Milk Producers' Cooperative Union Limited ("CAMUL", for short) so as to enable CAMUL to make regular payment of monthly salaries, allowances as also the arrears to its employees. xxx xxx xxx 4. It is contended that the State Government had all-pervasive control over the affairs and management of CAMUL and therefore it should be treated as a department of the Government of Assam, though registered as a co- operative society by lifting the corporate veil. It was further contended that State Government was responsible and liable to pay the salaries and emoluments of the employees of CAMUL and it was not justified in withholding the grant amount. 5. The respondent Union therefore sought a direction to the State Government to release ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant-in-aid from 1994; that the Dairy Development Project at Silchar was purely a State Government scheme and as that Project has not been discontinued and as there was no decision to bar CAMUL from receiving grant-in-aid which was being granted from 1982-83 till 1994, the State Government could not deny the grant-in-aid amount. Consequently, the learned Single Judge directed release of the grand-in-aid for paying monthly salaries and allowances along with arrears to the employees. xxx xxx xxx 10. CAMUL indisputably is a co-operative society registered under the provisions of the Assam Cooperative Societies Act, 1949. Section 85 of the said Act provides that every registered society shall be deemed to be a body corporate by the name under which it is registered, with perpetual succession and a common seal, and with power to hold property, to enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was constituted. 11. Therefore, CAMUL, even if it was "State" for purposes of Article 12, was an independent juristic entity and could not have been identified with or treated as the State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty clause in respect of the employees is fully safeguarded. The Government of the State of Bihar, thus, had a constitutional obligation to protect the life and liberty of the employees of the government-owned companies/corporations who are the citizens of India. It had an additional liability having regard to its right of extensive supervision over the affairs of the company. xxx xxx xxx 33. The State having regard to its right of supervision and/or deep and pervasive control, cannot be permitted to say that it did not know the actual state of affairs of the State Government undertakings and/or it was kept in the dark that the salaries of their employees had not been paid for years leading to starvation death and/or commission of suicide by a large number of employees. Concept of accountability arises out of the power conferred on an authority. 34. The State may not be liable in relation to the day-to-day functioning of the companies, but its liability would arise on its failure to perform the constitutional duties and functions by the public sector undertakings, as in relation thereto lie the State's constitutional obligations. The State acts in a fiduciary capacity. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Kapila Hingorani (I): (SCC pp. 34-35, paras 74 & 76) "74. We, however hasten to add that we do not intend to lay down a law, as at present advised, that the State id directly or vicariously liable to pay salaries/remunerations of the employees of the public sector undertakings or the government companies in all situations. We, as explained hereinbefore, only say that the State cannot escape its liability when a human rights problem of such magnitude involving the starvation deaths and/or suicide by the employees has taken place by reason of non-payment of salary to the employees of public sector undertakings for such a long time. ... xxx xxx xxx 76. This order shall be subject to any order that may be passed subsequently or finally." xxx xxx xxx 19. The position is further made clear in Kapila Hingorani (II) as under: (SCC p. 270, para 37) "37. We make it clear that we have not issued the aforementioned directions to the States of Bihar and Jharkhand on the premise that they are bound to pay the salaries of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said scheme, immediately on their having submitted their option. In addition to the above, all such employees who did not exercise any option (whether to be governed, by the Employees' Provident Funds Scheme, 1995, or by 'the 1999 Scheme'), would automatically be deemed to have opted for 'the 1999 Scheme'. All new entrants would naturally be governed by 'the 1999 Scheme'. All those who had moved from the provident fund scheme to the pension scheme, would be deemed to have consciously, foregone all their rights under the Employees' Provident Funds Scheme, 1995. It is of significance, that all the concerned employees by moving to 'the 1999 Scheme', accepted, that the employer's contribution to their provident fund account (and the accrued interest thereon, upto 31.3.1999), should be transferred to the corpus, out of which their pensionary claims, under 'the 1999 Scheme' would be met. It is therefore not possible for us to accept, that the concerned employees would be governed by 'the 1999 Scheme' only from the date on which they attained the age of superannuation, and that too - subject to the condition that they fulfilled the prescribed qualifying service, entitling them to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced on behalf of the respondent-employees, inasmuch as, the seeds of the right to receive pension, emerge from the very day, an employee enters a pensionable service. From that very date, the employee commences to accumulate qualifying service. His claim for pension would obviously crystalise, when he acquires the minimum prescribed qualifying service, and also, does not suffer a disqualification, disentitling him to a claim for pension. 51. In the above view of the matter, it is not possible for us to accept, that the rights of the concerned employees under 'the 1999 Scheme', can be stated to get vested, only on the date when a concerned employee would attain the age of superannuation, and satisfy all the pre-requisites for a claim towards pension. We are also persuaded to accept the contention advanced on behalf of the respondent-employees, that the cause of action to raise a claim for pension, would arise on the date when a concerned employee actually retires from service. Any employee governed by a pension scheme, enrolls to earn qualifying service, immediately on his enrolment into the pensionable service. Every such employee must be deemed to have commenced to invest in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liability, to all the existing pensioners. We are therefore satisfied to conclude, that it is well within the authority of the State Government, in exercise of its administrative powers (which it exercised, by issuing the impugned repeal notification dated 2.12.2004) to fix a cut-off date, for continuing the right to receive pension in some, and depriving some others of the same. This right was unquestionably exercised by the State Government, as determined by this Court, in the R.R. Verma case (supra), wherein this Court held, that the Government was vested with the inherent power to review. And that the Government was free to alter its earlier administrative decisions and policy. Surely, this is what the State Government has done in the present controversy. But this Court in the above mentioned judgment, placed a rider on the exercise of such power by the Government. In that, the exercise of such power, should be in consonance with all legal and statutory obligations. 55. It is equally true, that the power of administrative review can only be exercised, for a good and valid justification. Such justification besides being founded on reasonable consideration, should also not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned notification cannot be assailed on the basis of the judgments cited above. We shall now deal with the legal submissions advanced on behalf of the respondent-employees, in their attempt to invalidate the repeal notification, dated 2.12.2004. 57. The first legal contention advanced on behalf of the respondent- employees was based on the principle of estoppel/promissory estoppel. It was the assertion of learned counsel, that the respondent-employees had altered their position to their detriment, on their having opted (or deemd to have opted) to be governed by 'the 1999 Scheme'. In order to highlight the above assertion it was submitted, that the entire employer's contribution towards provident fund (alongwith, the accumulated interest thereon), was foregone by the respondent-employees. The said amount unquestionably belonged to the respondent-employees, and their right over the same was protected under the Provident Fund Act. It was submitted, that the aforesaid option was exercised by the respondent-employees, only when the offer to extend pensionary benefits, was voluntarily made to the employees by the State Government. It was contended, that the promise to pay pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st-retiral benefits to employees of such independent legal entities, on the mistaken belief, arising out of a miscalculation, that the same can be catered to, out of available resources. This measure was adopted by the State Government, not in its capacity as the employer of the respondent-employees, but as a welfare measure. When it became apparent, that the welfare measure extended by the State Government, could not be sustained as originally understood, the same was sought to be withdrawn. We are of the view that the principle invoked on behalf of the respondent-employees, cannot be applied in the facts of the present case, specially, in view of the decision in M/s. Bhagwati Vanaspati Traders v. Senior Superintendent of Post Offices, Meerut, AIR 2015 SC 901, wherein this Court held as under:- "The first contention advanced at the hands of the learned counsel for the appellant was based on the decision rendered by this Court in Tata Iron & Steel Co. Ltd. v. Union of India & Ors., (2001) 2 SCC 41, wherefrom learned counsel invited our attention to the following observations:- "20. Estoppel by conduct in modern times stands elucidated with the decisions of the English Courts in Pic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om doing in reliance on the representation, in short, the party asserting the estoppel must have been induced to act to his detriment. So long as the assumption is adhered to, the party who altered the situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs, the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment, (vide Grundts: High Court of Australia (supra)). 21. Phipson on Evidence (Fourteenth Edn.) has the following to state as regards estoppels by conduct. "Estoppels by conduct, or, as they are still sometimes called, estoppels by matter in pais, were anciently acts of notoriety not less solemn and formal than the execution of a deed, such as livery of seisin, entry, acceptance of an estate and the like, and whether a party had or had not concurred in an act of this sort was deemed a matter which there could be no difficulty in ascertaining, and then the legal consequences followed (Lyon v. Reed, (1844) 13 M & W 285 (at p. 309). The doctrine has, however, in modern times, been extended so as to embrace practically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase any particular declaration/certificate furnished by us against our above referred to claims are found to be incorrect or any excess payment is determine to have been made due to oversight/wrong calculation etc. at any time. We also undertake to refund the amount within 10 days of receipt of the notice asking for the refund, failing which the amount erroneously paid or paid in excess shall be recovered from or adjusted against any other claim for export benefits by EEPC or by the licensing authorities of CCI & C." and it is on this score it may be noted that in the event of there being a specific undertaking to refund for any amount erroneously paid or paid in excess (emphasis supplied), question of there being any estoppel in our view would not arise. In this context correspondence exchanged between the parties are rather significant. In particular letter dated 30.11.1990 from the Assistant Development Commissioner for Iron & Steel and the reply thereto dated 8.3.1991 which unmistakably record the factum of non-payment of JPC price." It is apparent from the factual position narrated above, that the original action of the State Government was bonafide, and for the welfare of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruth of the matter. All, for the sake of fairness. A perusal of the above provision reveals four salient pre conditions before invoking the rule of estoppel. Firstly, one party should make a factual representation to the other party. Secondly, the other party should accept and rely upon the aforesaid factual representation. Thirdly, having relied on the aforesaid factual representation, the second party should alter his position. Fourthly, the instant altering of position, should be such, that it would be iniquitous to require him to revert back to the original position. Therefore, the doctrine of estoppel would apply only when, based on a representation by the first party, the second party alters his position, in such manner, that it would be unfair to restore the initial position." Since there is no dispute, that the original position (the rights enjoyed by the respondent-employees, under the Employees Provident Fund Scheme, 1995) available before 'the 1999 Scheme' was given effect to, has actually been restored, we are of the considered view, that the principle sought to be invoked on behalf of the respondent-employees, cannot augur in a favourable determination for them, beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmenced to draw pensionary benefits under 'the 1999 Scheme', were not to be affected. It was therefore pointed out, that the classification made by the State Government was reasonable and justifiable in law, and it also had a nexus to the object sought to be achieved. 62. It is in the above scenario, that the legality and justiciability of 'the 1999 Scheme', will have to be examined. The submission advanced at the behest of the respondent-employees was, that it was not permissible for the State Government to advance any such plea, because the State Government must be deemed to have examined the financial viability of the scheme, before 'the 1999 Scheme' was given effect to. And that, it does not lie in the mouth of the State Government, after giving effect to 'the 1999 Scheme', to assert that 'the 1999 Scheme' was not financially viable. It was insisted, that even if data pertaining to the financial viability of the scheme, as was sought to be relied upon was correct, financial deficiencies if any, could be catered to by the State Government, from the vast financial resources available to it. And further, that 'the 1999 Scheme' in terms of the determination rendered by the High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the State Government, in allowing those who had already started earning pensionary benefits under 'the 1999 Scheme', was based on a legitimate classification, acceptable in law. In the above view of the matter, the action of the State Government cannot be described as arbitrary, and as such, violative of Article 14 of the Constitution of India. We are also satisfied in concluding, that the understanding of the State Government (which had resulted in introducing 'the 1999 Scheme') on being found to be based on an incorrect calculation, with reference to the viability of the corpus fund (to operate 'the 1999 Scheme'), had to be administratively reviewed. And that, the State Government's determination in exercising its power of review, was well founded. 64. It is also not possible for us to accept, that any Court has the jurisdiction to fasten a monetary liability on the State Government, as is the natural consequence, of the impugned order passed by the High Court, unless it emerges from the rights and liabilities canvassed in the lis itself. Budgetary allocations, are a matter of policy decisions. The State Government while promoting 'the 1999 Scheme', felt that the same would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lea of discrimination, advanced at the behest of the respondent-employees. It is not possible for us to accept, that the employees of corporate bodies, can demand as of right, to be similarly treated as Government employees. Whilst it can be stated that Government employees of the State of Himachal Pradesh are civil servants, the same is not true for employees of corporate bodies. Corporate bodies are independent entities, and their employees cannot claim parity with employees of the State Government. The State Government has a master-servant relationship with the civil servants of the State, whilst it has no such direct or indirect nexus with the employees of corporate bodies. The State Government may legitimately choose to extend different rights in terms of pay-scales and retiral benefits to civil servants. It may disagree, to extend the same benefits to employees of corporate bodies. The State Government would be well within its right, to deny similar benefits to employees of corporate bodies, which are financially unviable, or if their activities have resulted in financial losses. It is common knowledge, that when pay-scales are periodically reviewed for civil servants, they d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uery, has to be in the negative. The sustenance of the organization itself, is of paramount importance. The claim of employees, who have been engaged by the organization, to run the activities of the organization, is of secondary importance. If an organization does not remain financially viable, the same cannot be required to remain functional, only for the reason that its employees, are not adversely impacted. When and how a decision to wind up an organization is to be taken, is a policy decision. The decision to wind up a corporation may be based on several factors, including the nature of activities rendered by it. In a given organization, sometimes small losses may be sufficient to order its closure, as its activities may have no vital bearing on the residents of the State. Where, an organization is raised to support activities on which a large number of people in the State are dependent, the same may have to be sustained, despite the fact that there are substantial losses. The situations are unlimited. Each situation has to be regulated administratively, in terms of the policy of the State Government. Whether a corporate body can no longer be sustained, because its activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral benefits to the respondent- employees, was an extension of such a benefit. 'The 1999 Scheme', it was submitted, would have resulted in ameliorating the conditions of the respondent-employees, after their retirement. The submission advanced on behalf of the respondent-employees is seemingly attractive, but is not acceptable as a proposition of law. A welfare scheme, may or may not aim at providing, the very basic rights to sustain human dignity. In situations where a scheme targets to alleviate basic human rights, the same may possibly constitute an irreversible position, as withdrawal of the same, would violate Article 21 of the Constitution. Not so, otherwise. Herein, the Employees' Provident Funds Scheme, 1995, sponsored under the Provident Fund Act, is in place. The same was sought to be replaced, by 'the 1999 Scheme'. 'The 1999 Scheme' was an effort at the behest of the State Government, to provide still better retiral benefits. 'The 1999 Scheme' was not a measure, aimed at providing basic human rights. Therefore, 'the 1999 Scheme' can not be treated as irreversible. The same would not violate Article 21 of the Constitution, on its being withdrawn. It is not in dispute, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees and the State Government. One can understand, such a claim arising out of an obligation between an employer and his employees, where there is a quid pro quo - a trade off based on a relationship (as between, an employer and employee). We have however concluded, that there was no such relationship between the State Government, and the respondent-employees. All the corporate bodies in which the respondent-employees were/are engaged, are independent juristic entities. It is therefore apparent, that the claim raised by the respondent-employees, is not based on any right or obligation between the parties. We have also examined the submissions advanced by learned counsel premised on various constitutional provisions (- Articles 14, 16, 21 and 300A of the Constitution of India), but have found, that no right can be stated to have been violated, thereunder. We have also examined the other legal submissions, advanced on behalf of the respondent-employees, and have found the same, as unjustified. The issue whether administrative review was permissible, after 'the 1999 Scheme' had become operational, has been answered in the affirmative. And finally, we have concluded, that the exer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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