UNIVERSITY OF DELHI versus SMT. SHASHI KIRAN & ORS. ETC. on 10 May 2022

UNIVERSITY OF DELHI

v.

SMT. SHASHI KIRAN & ORS. ETC.

(Civil Appeal Nos. 3797-3809 of 2022)

MAY 10, 2022

[UDAY UMESH LALIT AND VINEET SARAN, JJ.]

Service Law: Pensionary benefits – Contributory ProvidentFund-CPF and General Provident Fund and Pension Scheme-GPF– Shift from CPF to GPF after the cut-off date – On facts, issuanceof Notification by the University on 25.05.1987 that all CPFbeneficiaries in service on 01.01.1986 would be deemed to have“come over” to GPF under Statute 28-A unless such employees hadopted to continue under CPF – By cut-off date, of 30.09.1987, 2611employees of the University opted to continue under CPF while therest of the employees, were deemed to have “come over” to GPF –Thereafter, grant of extensions for exercising the option to remainunder CPF wherein option exercised by 626 employees – Universitykept extending the cut off date for switchover from CPF to GPF –Cut off date for exercise of option under the last notification was31.01.1999 – 2469 employees exercised their option for switchoverfrom CPF to GPF – After the deadline the option given for switchoverwas incorrect – Writ petition by employees, those who did not exercisetheir choice, but continued to make payment of contribution towardsCPF (first batch), employees who chose CPF in the first twoextensions but later wanted to shift to GPF (second batch), andemployees who chose CPF before the cut-off date but wanted tochange to GPF (third batch) – Case of first and second batchallowed - However, as regards the third batch, the Single Judgeheld that the employees having consciously exercised the option tobe under CPF, their prayer of switchover cannot be acceptedwhereas the Division Bench held that switch-over to the PensionScheme was permitted upto 31.12.2003 to several other autonomousinstitutions, thus, denying the right to opt to the Pension Scheme inthe case of the third batch unsustainable – On appeal, held:Differential treatment afforded to those 2469 employees as againstthe employees in third batch of cases, not founded on any rationale A

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A– If those 2469 employees could be afforded chance to exercise anoption of switchover to GPF, even though they had consciouslyopted to be under CPF, on principle of parity or equality, the casewas certainly made out – Going by the intent of the notification,those who were to opt for CPF, were an exception and the generalrule was that everybody after 01.01.1986 would normally be coveredBby GPF – In the third batch of cases, the concern is with only 75persons – Bulk of people namely 2469 employees were granted thechoice of reverse switchover and they were allowed all the benefitsunder GPF – When the notification dated 01.05.1987 was issued,the authorities were conscious of the possibility that all the employeesCmay ‘come over’ to GPF and accordingly the fund was constitutedand the affairs were arranged – Shift of those 75 employees wouldnot in any way affect the strength and the character of the fund –Thus, the decision by the Division Bench of the High Court in thethird batch does not call for any interference except to the extent ofdirection for recouping of the contribution under CPF with 8% simpleDinterest pa.

Disposing of the appeals, the Court

Conclusion

Disposing of the appeals, the Court

HELD: 1.1 The common thread which ran through thedecisions of the Single Judge pertaining to three batches of cases,Ewas that the text of the notification dated 01.05.1987 was clearthat if no option was exercised by the concerned employees beforethe cut-off date, they would be deemed to have ‘come over’ toGPF. It was only a positive option exercised by the employees tocontinue to be under CPF which could have departed from suchdeeming provision. Once exercised, the option was final and asFsuch, there could be no switchover from those who hadconsciously opted to be under CPF. Further, relying on thedecision in S.L. Verma, it was observed that any exercise of optionafter the deadline or the cut-off would be inconsequential. It wason this premise that the cases in R.N. Virmani batch of cases andGN.K. Bakshi batch of cases were allowed by the learned SingleJudge. As regards Shashi Kiran batch of cases, the Single Judgeobserved, that once the conscious decision was taken and optionwas exercised to continue to be under CPF, there was “no roomfor any come back situation.” The cases in the third batch weretherefore, rejected. [Para 12][995-E-H; 996-A]H

1.2 As regards, the 2469 employees who were given facilityof such switchover after the cut-off date, the Single Judgeobserved that though they had also consciously opted to be underCPF, were not before the Court, and as such, their cases had tobe left untouched. It is a matter of record and which aspect isclear from the communications referred to that most of those2469 employees, at the time of retirement, were given all thebenefits that were available to those who had opted to be underGPF. Thus, those 2649 employees were certainly allowed to availthe benefit of switchover which was not granted in favour of theemployees in the third batch of cases. Affirming the view takenby the Single Judge in the first two batches of cases, the DivisionBench set aside the view of the Single Judge only in the thirdbatch of cases i.e. in Shashi Kiran batch of cases. As theobservations made by the Division Bench indicate, the matterwas placed on the ground of discrimination and principles ofequality. [Paras 13, 14][996-B-D]

1.3 According to the notification dated 01.05.1987 twosituations were contemplated. First, the deeming provision interms of which the concerned employee was taken to have ‘comeover’ to GPF. The second situation being where a conscious optionwas exercised before the cut-off date to continue to be underCPF. R.N. Virmani batch of cases was therefore rightly allowedby the Single Judge and the Division Bench of the High Court,as no conscious option was exercised by the cut-off date.Consequently, the concerned employees must be deemed to have‘come over’ to GPF. Logically, it would be immaterial whetherthe concerned employee continued to make contributionassuming himself to be covered under CPF, even thoughcontributions were made by the concerned authorities. The benefitwas therefore rightly granted in favour of the employees and theentire contribution was directed to be refunded. The Universityhas chosen not to appeal against that decision and thus the matterhas attained finality. [Para 15][996-E-G]

1.4 Theoretically, extension of the same principle wouldbe that if no option was exercised before the cut-off date, but anoption was exercised after the cut-off date was extended; and if AB

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Ano switchover could be allowed after the cut- off date, thedecisions rendered by the Single Judge and the Division Benchin the N.C. Bakshi batch of cases were also quite correct.Consequently, irrespective of the fact that the concernedemployees had exercised the option to continue to be under CPF,such exercise of option would be non est in the eyes of law. ThatBin fact is the ratio of the decision in S.L. Verma’s case. Thus, boththese batches of cases were rightly decided by the Single Judgeand the Division Bench. Therefore, the appeal in N.C. Bakshibatch of cases is dismissed. [Para 15][996-H; 997-A-B]

1.5 As indicated by the University in its affidavit filed afterCthe Order dated 02.03.2020 was passed by this Court, 2611employees had opted to be under CPF Scheme by the cut-offdate, i.e. by 30.09.1987. Additionally, 626 employees exercisedthe option to be under CPF after the original cut-off, but withininitial two extensions granted by the University. Thus, as against Dthe entire body of employees of the University, 3237 (2611+626)employees had exercised the option to be under CPF. Out ofthese 3237 employees, by virtue of further extensions grantedby the University, about 2469 employees exercised the reverseoption and opted to “come over” to GPF, leaving only 768 (3237-2469) employees to be under CPF. The answers to queries ‘d’Eand ‘e’ given by the University in its affidavit indicate that thenumber of employees in CPF Scheme was 86 while the petitionersin Shashi Kiran batch were 75. Thus, the concern is with 75 originalpetitioners in Shashi Kiran batch of cases. [Para 17][997-C-E]

1.6 As the Judgment of the Division Bench discloses, theFmatter was considered by it from the standpoint of discriminationbetween the same category of persons, that is to say, those whohad opted to be under CPF. The different groups in the samecategory were:- those who had not exercised any option butcontinued to make payment of contribution towards CPF (R.K.GVirmani batch of cases); those who exercised the option to beunder CPF but the option was exercised after the cut-off. Sincethe option was exercised after the cut-off, they were deemed tohave ‘come over’ to GPF and were granted benefit (N.C. Bakshibatch of cases); and those who consciously exercised the option H

to be under CPF; but taking advantage of further options grantedthrough 11 extensions to switchover, had been allowed to ‘comeover’ to GPF (2469 employees).It was against these three subcategories coming from the same category of employees that theargument of discrimination was considered by the Division Bench.[Paras 20, 21][1002-E-H; 1003-A]

1.7 The matter was further considered by the DivisionBench in the context of the employees of educational institutionssuch as IITs, who are directly under the Central Government,just as the employees of the University, which is a CentralUniversity. If the option was allowed to be exercised by grantingextension to the employees of the other educational institutions,the Division Bench did not find any reason why similar choice/option could not be given to the employees in Shashi Kiran batchof cases. [Para 21][1003-B-C]

1.8 The differential treatment afforded to those 2469employees as against the employees in Shashi Kiran batch ofcases, was not founded on any rationale. No justifiable reasonwas coming forth. If those 2469 employees could be affordedchance to exercise an option of switchover to GPF, even thoughthey had consciously opted to be under CPF, on principle of parityor equality, the case was certainly made out. [Para 22][1003-D-E]

1.9 The matter would be considered from the perspectiveof financial impact if the decision of the Division Bench is affirmed.According to the notification dated 01.05.1987, the employeesjoining the service after 01.01.1986 would always be under GPF.With respect to those who were in service on 01.01.1986, saidemployees would be deemed to have “come over” to GPF unlessan option to continue to be under CPF was consciously exercisedbefore the cut-off date. Thus, when the Scheme was framed andwas sought to be implemented, the concerned authorities musthave taken into account the entire magnitude such as, the numberof employees and the likelihood of impact on the management ofthe fund, so that reasonable returns can be effected by way ofpension upon retirement of such persons. Going by the intent ofthe notification, those who were to opt for CPF, were an exception A

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Aand the general rule was that everybody after 01.01.1986 wouldnormally be covered by GPF. It is in this context that the numberof original petitioners in Shashi Kiran batch of cases has to beseen. The concerned is with only 75 persons. On the other hand,the bulk of people namely 2469 employees were granted thechoice of reverse switchover and they were allowed all theBbenefits under GPF. It can reasonably be said that when thenotification dated 01.05.1987 was issued, the authorities wereconscious of the possibility that all the employees may ‘comeover’ to GPF. With that possibility in mind, the fund was constitutedand the affairs were arranged. The shift of those 75 employeesCwould not in any way affect the strength and the character of thefund if a direction that the entire contribution made by theauthorities be returned with reasonable rate of interest is issued.These 75 petitioners had approached the Court in the year 2010.At this length of time, it is not as if any floodgates are going toopen and there will be drain on the resources of the State. ADdirection can, therefore, be issued, as was done by the SingleJudge in his Judgment in R.N. Virmani batch of cases and whichaspect was mentioned in the letter dated 23.01.2017 referred toin paragraph 8, for recouping the contribution under CPF with8% simple interest per annum. [Paras 23-24][1003-E-H; 1004-EA-D]

1.10 Considering the circumstances on record, the decisionrendered by the Division Bench of the High Court in Shashi Kiranbatch of cases does not call for any interference except to theextent of direction for recouping of the contribution under CPFFwith 8% simple interest per annum. It is possible that at thislength of time, some of the employees in Shashi Kiran batch ofcases may not be interested in switchover to GPF. But an optionmust be afforded to them in such manner as the authorities deemappropriate. [Para 25][1004-E]

GKrishena Kumar vs. Union of India and others (1990)4 SCC 207 : [1990] 3 SCR 352; Rajasthan Rajya VidyutVitran Nigam Limited vs. Dwarka Prasad Koolwal andothers (2015) 12 SCC 51 : [2014] 13 SCR 492 –distinguished.

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Union of India and another v. S.L. Verma and others(2006) 12 SCC 53 : [2006] 9 Suppl. SCR 770; D.S.Nakara vs. Union of India (1983) 1 SCC 305 : [1983]2 SCR 165 – referred to.

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Case Law Reference

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.3797-3809 of 2022.

From the Judgment and Order dated 24.08.2016 of the High Courtof Delhi at New Delhi in LPA Nos.410-414, 416-418, 558, 594, 667, 672and 780 of 2014.

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Civil Appeal Nos.3850, 3852, 3851 and 3810-3849 of 2022.

Ms. Madhavi Divan, ASG, Aman Sinha, P. S. Patwalia, K. K. Rai,Anip Sachthey, Meet Malhotra, Sr. Advs., Sanjai Kumar Pathak, NupoorSinha, Ms. Shashi Pathak, Arvind Kumar Tripathi, Ms. Vishakha, ParthivGoswami, Sahil Monga, Gurmeet Singh Makker, Ms. Shefali Jain, RajeshPrasad Singh, S. M. Deenadayalan, Ms. T. Archana, Anshul Rai, Ms.Sreoshi Chatterjee,, Ramkrishna Veerendra, Tanuj Khurana, Ms. AnjaliChauhan, Ankur Gupta, Nar Hari Singh, S. K. Pandey, Awanish Kumar,Chandrashekhar A. Chakalabbi, Ravi S. Chauhan, Vikas Mehta, KaushalSarkar, Pratap Shanker, Ankit Kumar, Swetank Shantanu, Arvind KumarGupta, Prashant Bhardwaj, Rishi Bharadwaj, Shaurya Dogra, SiddharthaShankar Ray, Saksham Maheshwari, Jagjit Singh Chhabra, Amar NathGupta, Kamlesh K. Maurya, Santosh Kumar Sahu, Rameshwar PrasadGoyal, Satyajit A. Desai, Ms. Anagha S. Desai, Satya Kam Sharma,Vikas Kumar, Manish Paliwal, Devmani Bansal, Ateev Mathur, C. S. N.Mohan Rao, R. Santhana Krishnan, Lokesh Kumar Sharma, Ms. SujeetaSrivastava, Ms. Abha R. Sharma, Yatendra Singh Jafa, Rahul Pratap,Romy Chacko, Shakthi Chand Jaidwal, Santosh Kumar-I, Ms. Isha Jain,Mohinder Jit Singh, Hardik Rupal, Amit Kumar, Arjun Harkauli, Ms.

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AMalini Poduval, Abhijat P. Medh, Aditya Ranjan, D. S. Chauhan, SatpalSingh, Mayank Goel, M/s UNUC Legal LLP, Advs. for the appearingparties.

The Judgment of the court was delivered by UDAY UMESH LALIT, J.B

1. Delay condoned. Leave granted.

2. These appeals by the University of Delhi (‘the University’, forshort) are directed against the judgment and order dated 24.08.2016passed by the Division Bench of High Court of Delhi at New Delhi inCLetters Patent Appeals[1] which in turn had challenged the decisions ofthe learned Single Judge of the High Court dated 30.04.2014 in variousWrit Petitions[2].

3. The basic facts leading to the filing of the Writ Petitions in theHigh Court are as under:Da.All the writ petitioners are members of the teaching staffworking in various colleges and institutions which are eitheraffiliated to, or are part of the University. The conditions ofservice of the teaching staff are somewhat analogous tothe employees of the Central Government.

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b.On 06.06.1985, the Central Government employees whowere governed by the Contributory Provident Fund (for short,“CPF”) were permitted to opt for General Provident Fundand Pension Scheme (for short, “GPF”). Thereafter a F1 LPA Nos.410-414, 416-418, 558, 594, 667, 672 and 780 of 2014; 554, 606, 607, 608,609, 610, 615, 616, 617, 618, 619, 622, 623, 624, 625, 626, 627, 628, 629, 632, 633,635, 636, 637, 638, 639, 640, 641, 642, 643, 644, 645, 646, 647, 648, 650, 651, 653,654, 655 of 2014 and other connected appeals.

2 Writ Petition No. 1490 of 2006 and connected matters, Writ Petition(C) Nos. 5631 of2010, 1216 of 2011, 3631 of 2011, 3863 of 2011, 5495 of 2011, W.P.(C)No. 6009 of2011 & CM No. 12140 of 2011, W.P.(C)No.5106 of 2011 & CM No. 10351 of 2011,GW.P.(C)No.5975 of 2010 & CM No. 11775 of 2010, W.P.(C)No. 5979 of 2010 & CMNo.11782 of 2010, W.P.(C)No.5980 of 2010 & CM No. 11784 of 2010, W.P.(C)No.5981of 2010, W.P.(C)No.5982 of 2010 & CM No. 11787 of 2010, W.P.(C)No. 5985 of 2010& CM No. 11793 of 2010; W.P.(C)No.2036 of 2010, W.P.(C)No.2037 of 2010, W.P.(C)No.3095 of 2010 & CM No. 7718 of2011, W.P.(C)No. 5759 of 2010, W.P.(C)No.7310 of 2010 and W.P.(C)No.8560 ofH2010.

notification was issued by the Central Government withrespect to the changeover of the employees from CPF toGPF. Said notification issued on 1.5.1987 contemplated thatall CPF beneficiaries who were in service on 01.01.1986and were still in service would be deemed to have “comeover” to GPF unless a contrary option was exercised bythem in writing by 30.09.1987 to continue to be under CPF.The relevant paragraphs of said notification were:

“The Central Government employees who are governedby the Contributory Provident Fund Scheme (CPFScheme) have been given repeated options in the pastto come over to the Pension Scheme. The last suchoption was given in the Department of Personnel andTraining. O.M. No. F 3 (1) - Pension Unit/85, dated the6” June, 1985. However, some Central Governmentemployees still continue under the CPF Scheme. TheFourth Central Pay Commission has recommended thatall CPF beneficiaries in service on January 1, 1986,should be deemed to have come over to the PensionScheme on that date unless they specifically opt out tocontinue under the CPF Scheme.

2. After careful consideration, it has been decided thatthe said recommendation shall be accepted andimplemented in the manner hereinafter indicated.

3.1 All CPF beneficiaries, who were in service on 1[st]January, 1986, and who are still in service on the date ofissue of these orders viz., 1[st] May, 1987) will be deemedto have come over to the Pension Scheme.

3.2 The employees of the category mentioned abovewill, however, have an option to continue under the CPFScheme, if they so desire. The option will have to beexercised and conveyed to the concerned Head of Officeby 30-9-1987, in the form enclosed if the employees wishto continue under the CPF Scheme. If no option isreceived by the Head of Office by the above date theemployees will be deemed to have come over to thePension Scheme.

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SUPREME COURT REPORTS

3.6 The option once exercised shall be final.

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6.3 These orders do not also apply to scientific andtechnical personnel of the Department of Atomic Energy,Department of Space, Department of Electronics andsuch other Scientific Departments as have adopted thesystem prevailing in the Department of Atomic Energy.Separate orders will be issued in their respect in duecourse. [See Order (3) in this Appendix.]

8. These orders issue with the concurrence of theMinistry of Finance, Department of Expenditure, videtheir U.O. No.2038/IS(Pers.)/87, dated 13-4-1987.”

c.Around the same time, a communication was addressed on05.05.1987 by the Central Government to the Registrar ofthe University stating that the Hon’ble President of India inhis capacity as Visitor of the University was pleased toapprove the proposal of the University for amending Statute28A, giving benefits to its employees relating to GPF, CPF,gratuity etc. “which are more advantageous to theemployees of the University in pursuance to similar orderissued by the Central Government with respect to their ownemployees”. The amended Statute 28-A read as under:

“28-A: In this Statute unless there is anything repugnantin the subject or context:

(5) The sanction and payment of retirement benefitsadmission under this Statute shall regulated by suchprocedural instructions as would be issued by theExecutive Council.

Amendment approved:

Add the following as Clause 5 in Statute 28-A andClause 5 and 6 may be renumbered as Clause 6 and 7respectively.

“(5) As and when the Central Government amends RulesAgiving more benefits to its employees relating to GeneralProvident Fund, Contributory Provident Fund, PensionGratuity, etc. which are advantageous to the employeesof the University, the employees of the University willbe entitled to the same benefits with effect from theBdate such amendment is brought into force by the CentralGovernment with respect to its employees.”

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d.Close on the heels, a notification was issued by the Universityon 25.05.1987 stating that all CPF beneficiaries in serviceon 01.01.1986 would be deemed to have “come over” toGPF under Statute 28-A unless such employees had optedto continue under CPF. Paragraph ‘5’ of the notificationwas to the following effect:

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“5. Pensionary benefits to temporary employees -Temporary employees, who retire on superannuation oron being declared permanently incapacitated for furtherservice by the appropriate medical authority after havingrendered temporary service of not less than 10 years,shall be eligible for grant of superannuation/ invalidpension, retirement gratuity and family pension on thesame scale as admissible to permanent employees.

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Further it has also been decided by the Government ofIndia that pensioners who have commuted a portion oftheir pension and on 1.4.85 or thereafter have completedor will complete 15 years from their respective dates ofretirement will have their commuted portion of pensionrestored.

lt was also recommended by the Pay Commission thatall CPF beneficiaries who are in service on 1.1.1986should be deemed to have come over to the pensionscheme on that dates unless they specifically opt out tocontinue under the CPF Scheme. This recommendationhas also been accepted by the Government of India.

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Keeping in view the revised pensionary benefits, it hasbeen approved by the Vice-Chancellor that the abovedecision of the Government of India regarding optionalso be adopted in the University. It has, therefore, beendecided that all Contributory Provident Fundbeneficiaries who are in service on 1.1.1986 in theUniversity should be deemed to have come over to thepension scheme under Statute 28-A Appendix ‘A’ unlessthey specifically opt out to continue under CPF Scheme(Statute 28-A, Appendix ‘B’).

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It has further been decided that in respect of categoriesCB, C & D beneficiaries for whom the revised gradeshave been announced and implemented, they be giventhree months’ time from the date of this notification foropting out to continue under CPF Scheme (Statute 28-AAppendix ‘B’). For category A - CPF beneficiaries theDperiod of three months’ time for the same purpose willbe reckoned from the date of adoption by the Universityof the revised pay scales based on the IVth PayCommission’s recommendations, UGC committee’sReport. Employees who have already opted for thescheme under Statute 28-A Appendix ‘A’ will not beEeligible for any further option. These orders ‘would also-be applicable to the employees of the Colleges affiliatedto the University of Delhi and receiving maintenancegrant from ‘the ‘University Grants Commission. Thecontents of this notification shall be brought to the noticeFof each employee and his/ her acknowledgement forhaving noted these orders obtained and opt in the officerecord.”

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e.By cut-off date, that is to say by 30.09.1987, 2611 employeesof the University had opted to continue under CPF whileGthe rest of the employees, by virtue of deeming provision ofthe concerned notification referred to above, were deemedto have “come over” to GPF.

f.However, the University kept granting extensions forexercise of option to remain under CPF. First two extensionswere, thus, granted vide communications dated 5.10.1987H

and 21.01.1988 for exercising the option to remain underCPF. About 626 employees exercised such option tocontinue under CPF during two extensions granted by theUniversity.

g.Thereafter 11 further options were granted by the Universitywhereunder there could be a switchover from CPF to GPF.These options were granted vide Notifications dated9.2.1989, 4.6.1989, 17.9.1989, 12.07.1991, 20.12.1991,16.07.1993, 12.07.1994, 15.03.1996, 09.01.1998, 04.03.1998and 16.11.1998. The cutoff date for exercise of option underthe last notification was 31.1.1999. About 2469 employeesexercised option during periods covered by these 11notifications to switchover from CPF to GPF.

h.On 25.5.1999, a letter was addressed by the UniversityGrants Commission (“the UGC”, for short) to the Registrarof the University stating that the option in terms of thenotification dated 01.05.1987 issued by the CentralGovernment could be exercised only upto 30.09.1987; andif no option was received by said date the employees weredeemed to have “come over” to the pension scheme andthus, option once exercised, was final. Further, the revisedoption given by the University to the concerned employeesto switch over from CPF to GPF after the deadline wasincorrect and therefore, the cost of benefit, if any, to suchemployees must be met by the University from its ownsources. The relevant portion of the communication was:

“As you are already aware, the employees of Universityof Delhi are governed by Central Government GPF/CPFrules. The Government of India vide their O.M.No.4/I/87-P.I.C, dated the 1st May, 1937 (copy enclosed) hadgiven a cut-off date as 30.09.87 to the employees forexercising their option in case they desired to continueto be governed by the CPF Scheme, and in case nosuch option was exercised by the above date all theemployees were deemed to have come over to the GPFScheme of the Government of India. It was also madeclear that no extension for exercising option for continuingin the CPF scheme will be admissible as per Governmentof India’s rules after 30.9.87.

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As per guidelines of Government of India, all CPF whowere In service on 1st January,1986, and who are still inservice on the date of issue of these orders (viz. 1stMay, 1987) have therefore automatically come over tothe Pension scheme. However, the employees who haveexercised an option to continue under the CPF scheme,if they so desired have done so after due considerationby the specific date i.e. 30.09.87. As the option wasgiven upto 30.9.87 and it was clearly stated in the orderthat if no option is received by the above date theemployees will be deemed to have come over to thePension Scheme and the option once exercised shall befinal. The revised option again given by the employeesto come back to GPF Scheme from CPF Scheme andaccepted by the University is absolutely incorrect andagainst the rule. I would therefore request you to pleasefurnish a list of employees who have been given theextension of change over from CPF to GPF after 30.9.87and the benefit of retirement liabilities for such employeesmay be met by the University from their own sourcesand the same would only be treated as unapprovedexpenditure while determining the maintenance grant ofthe University. The next installment of maintenance grantwould only be released after the receipt of aboveinformation.”

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i.In response to a communication dated 18.09.1999 addressedby the UGC with respect to the subject regarding option ofFshifting from CPF to GPF, the Ministry of Human ResourceDevelopment, Department of Secondary Education andHigher Education, Government of India (“MHRD” forshort) responded on 19.06.2000 and stated:

“…. That Ministry has regretted its inability to allowone more option to change over from CPF Scheme tothe GPF Scheme to the employees of UGC and theinstitutions maintained by it.”

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j.On 8.08.2001, the UGC again requested MHRD to allowone extension for exercise of option to switch over fromCPF to GPF. The proposal was, however, rejected by the H

Finance Ministry of the Central Government on the groundthat the cost of introduction of pension scheme was muchhigher than the CPF and that such cost would continuouslyincrease with every revision in the scale of pay and furtherthat acceptance of such proposal would have widerepercussions with many similarly placed autonomous bodiesdemanding similar extension.

4. In these circumstances, Writ Petitions were filed in the HighCourt claiming diverse reliefs. These petitions, by order dated 21.05.2012passed by the learned Single Judge of the High Court, were categorizedinto three categories.

a.Employees who had not exercised any option at all andthus by virtue of the deeming provisions contemplated inthe notification dated 01.05.1987, were deemed to have“come over” to GPF; but having continued to makecontributions under the old CPF scheme were being treatedto be under CPF. This batch was subsequently referred toas “R.N. Virmani batch of cases” in the decisions renderedby the High Court.

b.Employees who had not exercised the option by the cutoffdate contemplated under the notification dated 01.05.1987and were thus deemed to have “come over” to GPF;however, such employees had exercised the option to remainunder CPF scheme during first two extensions granted bythe University between 01.10.1987 to 29.02.1988; and werenow praying that they be allowed to be under GPF. Thisbatch of cases was described to be “N.C. Bakshi batch ofcases” in the decisions rendered by the High Court.

c.Employees who had exercised positive option by 30.09.1987i.e. by the original cutoff date contemplated undernotification dated 1.5.1987 and had chosen to remain underCPF Scheme; but were now demanding that they be givenfurther option and were therefore praying for extension ofthe cut-off date to enable them to “come over” to GPF.This group of matters was referred to as “Shashi Kiranbatch of cases” in the decisions rendered by the High Court.5. Thus, the employees in all three batches of cases desired to beunder GPF rather than under CPF and were therefore praying for a A

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Achance to facilitate such switchover. The reason for such attempts wasspelt out with clarity in one of the letters[3] addressed by the University tothe UGC as under:

“...I have received representations from 376 teachers ofconstituent colleges and departments of this UniversityBaddressed to the Chairperson, UGC, requesting for the grantof a fresh option to switch over from the CPF to the GPF cumpension scheme. All of them were appointed before 1.1.1986.The representations have drawn attention to the huge disparitybetween those on the GPF cum pension scheme and those onthe CPF scheme. This is because over the years and especiallyCin the last few years - Government decisions have led to asituation where those entitled to pensionary benefits have beenplaced in a far more advantageous position that those entitledto CPF schemes. As a result of the Fifth Pay Commission’srecommendations, 40% of pensions can now be commuted,Dgiving a huge lump payment to pensioners. The communicationis restored after fifteen years. Those on CPF get only a lumppayment which includes their own contribution. Pensions arenow fully indexed to inflation and their nominal value rises twiceevery year, in the case of those on CPF, the Government -keeping in view its overall fiscal and macro-economic strategyEhas reduced interest from a high of 12% in 1998 to 8% today.While the high interest rates which made CPF schemesattractive have come down, the nominal value of pensionskeeping going up because of inflation indexing. All this hascreated a significant disparity between those on GPF-cum-Fpension and those on CPF schemes. According to a roughcalculation, this could run into several lakh rupees over a periodof time in the case of two identically placed professors. I thinkthere is merit in the request that those who continue to be onthe CPF scheme should be given a fresh option to switch overto the GPF cum pension scheme instead of taking the legalisticGstand that those on CPF opted for the scheme. The Government,as a fair employer, may kindly take action to remove thegrowing inequality between those on CPF and those on GPF

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3 Letter dated 21.12.2006, which was extracted in the decisions of the learned SingleHJudge as well as the Division Bench of the High Court.

cum pension schemes. I would, therefore, request you to pleasetake up the matter with the Ministry of HRD and the Ministryof Finance to allow a fresh option to those on the CPF schemeto come over to the GPF-cum-pension scheme...”

6. These three batches of cases were disposed by the learnedSingle Judge of the High Court by three separate decisions dated30.04.2014

A) R.N. Virmani batch of cases

i)The reasoning that weighed with the learned Single Judgewas:- “14. In my view, the answer to the question: as to whetheremployees, who had not issued any overt communicationwith regard to his / her desire to continue with the CPFScheme, stood covered by the Pension Scheme; wouldlargely depend upon the provisions of O.M. dated01.05.1987, itself.

14.1 It is not in dispute before me that O.M. dated01.05.1987 was adopted by the University of Delhi videnotification dated 25.05.1987 read with notification dated04.06.1987, pursuant to an approval received in that behalffrom its Vice Chancellor. Therefore, much would depend,in my opinion, upon the language of the relevant clause ofO.M. dated 01.05.1987. The said O.M. clearly applies toall employees who were CPF beneficiaries on 01.01.1986.Clause 3.1 read with clause 3.2 is plainly indicative of thefact that all such employees, who are CPF beneficiaries,shall be deemed, to have, come over to Pension Schemeunless the employee(s) concerned submitted his or heroption to continue with the CPF Scheme. This option hadto be submitted in the prescribed form to the concernedHead of Office by 30.09.1987. In case, no option wasreceived by the Head of Office by 30.09.1987, employeeswere deemed to have come over to the Pension Scheme.Therefore, by legal fiction once, the deeming clause kicked-in, those who did not submit their option form for continuationunder the CPF Scheme stood covered by the PensionScheme.”

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Aii)To arrive at the conclusion as mentioned above, the learnedSingle Judge relied inter alia upon the following passagesfrom the decision of this Court in Union of India andanother v. S.L. Verma and others[4]:

“..4. The Central Government as also the respondentNo.14-Bureau of Indian Standards have proceeded onsome legal misconception that it was obligatory on thepart of the said employees to give a positive option forthe said purpose.For the first time on 2.2.1999, therespondent No.14 requested the Union of India for grantof another chance to the respondents to switch over topension scheme stating that they purported to haveexercised their option for CPF Scheme on the cut-offdate.

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7. The Central Government, in our opinion, proceededon a basic misconception. By reason of the said OfficeMemorandum dated 1.5.1987 a legal fiction was created.Only when an employee consciously opted for to continuewith the CPF Scheme, he would not become a memberof the Pension Scheme. It is not disputed that the saidrespondents did not give their options by 30.9.1987. Inthat view of the matter respondent Nos. 1 to 13 in viewof the legal fiction created, became members of thePension Scheme. Once they became the member ofthe Pension Scheme, Regulation 16 of the Bureau ofIndian Standards (Terms and Conditions of Service ofEmployees Regulations, 1988) had become ipso-factoapplicable in their case also. It may be that they hadmade an option to continue with the CPF Scheme at alater stage but if by reason of the legal fiction created,they became members of the Pension Scheme, thequestion of their reverting to the CPF would not arise.The respondent No.14 has correctly arrived at aconclusion that an anomaly would be created and in factthe said purported option on the part of respondent No.1to 13 was illegal when a request was made byrespondent No.14 to the Union of India for grant of D

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approval so that all those employees shall come withinthe purview of the Pension Scheme. In our opinion, theMinistry of Finance proceeded on a wrong premise thatthe Pension Scheme was not in existence and it was anew one. Two legal fictions, as noticed hereinbefore,were created, one by reason of the memorandum, andanother by reason of the acceptance of therecommendations of the Fourth Central Pay Commissionwith effect from 1.1.1986. In terms of such legal fictions,it will bear repetition to state, the respondent nos.1 to 13would be deemed to have switched over to the pensionWP(C) 1490-1507/2006 & connected matters Page 26of 33 scheme, which a fortiori would mean that they nolonger remained in the CPF scheme...”

(Emphasis supplied by the learned Single Judge)

iii)The argument made by the respondents was dealt with asunder “16. The argument raised before me by the respondents,which veered towards approbation, was based on the factthat petitioners had continued to contribute under the CPFScheme. This submission would not cut much ice with me,having regard to the plain terms of O.M. dated 01.05.1987.If, the cover under the Pension Scheme, gets triggered witheffect from 30.09.1987, the contribution by an employeeand its receipt by the employer clearly proceeds on amisconception of the provisions of O.M. dated 01.05.1987.WP(C) 1490-1507/2006 & connected matters Page 29 of33 As a matter of fact, this very argument was repelled bythe Supreme Court, in S.L. Verma’s case, and I think, forgood reason. Consequently, there is no room for entertainingsuch an argument. The relevant observations made inparagraph 7, specific to this aspect, are, once again,extracted hereinafter.

“..It may be right they had made an option to continue withthe CPF Scheme at a later stage but if by reason of thelegal fiction created, they became members of the PensionScheme, the question of their reverting to the CPF wouldnot arise..”

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iv)It was therefore directed :-

“20. Having regard to the above discussion, the respondents-University of Delhi/concerned Colleges will be entitled torecoup their contribution under the CPF Scheme, if notalready recouped, with simple interest at the rate of 8%p.a.”

v)The petitions were thus allowed.

B)N.C. Bakshi batch of cases

i)While deciding this batch of cases, reliance was placedon the decision in R.N. Virmani batch of cases to concludethat the option to remain under CPF was exercised by thepetitioners after the cut-off date and only during extensionsgranted by the University, which extensions were withoutany authority. It was observed:- “In the judgment delivered by me in the batch of writpetitions, in which the lead petition was numbered as :WP(C) 1490/2006-1507/2006, titled as: Dr. R.N. Virmaniand Ors. Vs. University of Delhi and Anr., I have heldthat the provisions of the O.M. dated 01.05.1987 requireda positive option to be given only if, an employee wasdesirous of continuing with the CPF Scheme and thattoo by 30.09.1987. In the event, no positive option wasreceived from an employee expressing his or her desireto continue with the CPF Scheme then, the employeestood automatically covered by the Pension Scheme byvirtue of the deeming legal fiction created under theprovisions of the O.M. dated 01.05.1987. Thisconclusion, I had reached after examining the provisionsof O.M. dated 01.05.1987, in particular, clauses 3.1 and3.2 and the form appended to it. As noted in the saidjudgement, this is also the view taken by the SupremeCourt in the case of Union of India and Anr. Vs. S.L.Verma and Ors., (2006) 12 SCC 53. For the sake ofbrevity, I am not detailing out in extenso the rationaleprovided in the said judgement. The observations madein the said judgment be read as part of the presentjudgement……..

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4.2 Having regard to the aforesaid stand of the counselsfor the UGC, University of Delhi and concernedColleges, the only conclusion that I can come to is thatnotwithstanding the fact that the petitioners in this batchof petitions had overtly expressed their desire to continuein the CPF Scheme, they got automatically covered bythe Pension Scheme, once, the cut-off date of30.09.1987, was crossed. Therefore, the objection quadelay and latches cannot be sustained in case of thesewrit petitioners, save and except, in those cases wherethe petitioners received, upon retirement, without protest(either by filing an action in court or otherwise) theirbenefits under the CPF Scheme. As explained in Dr.R.N. Virmani’s judgement delay and latches will not getattracted as the cause of action in these cases if notcontinuing, is certainly recurring, each time the recordwas not corrected. (read paragraphs 17.3 & 17.4 of Dr.R.N. Virmani’s judgment delivered by me today alongwith this judgement). The availability of relief to suchpetitioners, who collected their CPF benefit withoutprotest, one would deny, not on the interpretation of theprovisions of O.M. dated 01.05.1987, but on the groundsof equity. The exercise of jurisdiction under Article 226of the Constitution being a discretionary remedy in suchlike cases, I would not be persuaded to exercise mydiscretion. Furthermore, once CPF benefits are collectedwithout protest cause of action will decidedly come toan end. Therefore, the captioned writ petitions areallowed qua all the petitioners except vis-a-vis thepetitioner in WP(C) No. 5981/2010 and, in respect ofpetitioner No.11 in WP(C) No.1216/2011.”

ii) Thus, with the exception of cases where CPF benefits werecollected by the concerned petitioners, all the petitions in this batch ofcases were allowed.

C) Shashi Kiran batch of cases i)The relevant facts and submissions were set out as under:- “(iv) that as per the additional affidavit filed by the Universityof Delhi, which is impleaded as respondent no.4 in WP(C)

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5759/2010, twelve (12) extensions were given by the saidUniversity to the employees between 09.02.1989 to 16[th]/17[th] .11.1998 and 20.11.1998 to 16.12.1998, to change over,from CPF Scheme to the Pension Scheme. During thisperiod, a total number of 2469 employees both fromUniversity of Delhi and from 52 of 86 colleges affiliated tothe said University had availed of the option of switch overto the Pension Scheme. Of these 2469 employees, 1368had retired and were now in receipt of pension fromUniversity of Delhi, out of the funds made available by theUGC.

(v) The present petitioners and those who are part of theother two batches of the petitions, heard by this court, thus,constituted a small percentage of the total number ofemployees, who have been allowed to switch over afterthe cut-off date of 30.09.1987, was crossed over. …

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11.1 On being asked, as to what would be the position ofthe GOI with regard to the pension liability alreadyundertaken by the University of Delhi vis-à-vis 2469employees, Mr. Bajaj said that the liability in that behalfwould have to be born and adjusted by the University ofDelhi under the had ‘unapproved expenditure’.

11.2 I may note at this stage that a similar query was put toMr. Amitesh Kumar, the learned counsel appearing for UGCwho, took an identical stand on the issue. Mr. Bajaj, thus,made it a point to draw my attention to the observationsmade in paragraph 8 at page 56 of the judgment of theSupreme Court in the case of Union of India and Anr. vs.S.L. Verma and Ors., (2006) 12 SCC 53 in support of itsstand that the GOI, could not be called upon to bear thefinancial burden of the decision taken by the University ofDelhi, to extend the date of change over. Reliance in thisregard was also placed on the judgement of the DivisionBench of this court in the case of Union of India vs. UGCClass 1 Officers Association and Ors., (2006) 87 DRJ783.”

ii) The effect of notifications issued by the University givingextensions was considered as under:- A

“15. This would bring me to the next argument advancedby the counsel for the petitioners that no notice was givento the petitioners in the manner prescribed in circular dated09.02.1989 and notification dated 11.02.1998. This argument,in my opinion, is once again mis-conceived for the followingreasons:- B

(i) First and foremost, having reached the conclusionthat no extensions could have been given by theUniversity of Delhi without due approval of the UGCor the GOI, the entire argument is, in a sense, a non-started.

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(ii) Second, the petitioners having given their positiveoptions to continue under the CPF Scheme in termsof O.M. dated 01.05.1987, as adopted by theDUniversity of Delhi, cannot now resile from the saidposition.

(ii) (a) assuming without accepting that University of Delhi couldgrant extensions, a careful reading of the circular dated09.02.1989 would demonstrate that even as per theUniversity the circular was intended to give one moreopportunity to those employees of the University of Delhior colleges affiliated to it, which were, receivingmaintenance grant from the UGC to “come over to thepension Scheme.”The circular was not directed towardsthose employees, who had consciously opted to remain inthe CPF Scheme. In other words, no come back situationwas contemplated in the said circular. …”

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iii)The petitioners having consciously exercised the option tobe under CPF, the prayer that they be given opportunity toswitchover was not accepted and the petitions weredismissed.

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D) The case of 2469 employees who were given chance toswitchover after the cut-off was dealt with as under:- “17. Before I conclude I must only clarify that the argumentof the petitioners that 2469 employees had been allowed to H

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switch over even after they had their given their option tocontinue under the CPF scheme and, thus, the respondentshad discriminated against this set of petitioners is, anargument, which cannot be countenanced in law. As is wellsettled, by several judgements of the Supreme Court thatthere is no equality in illegality (see M.K. Sarkar’s case,paragraph 25 at page 69). If, the University of Delhi, haswrongly permitted switch over to some of its employees tothe Pension Scheme contrary to the provisions of O.M.dated 01.05.1987 as adopted by it, it cannot be the groundto grant relief to the petitioners. Since, the case of those2469 employees is not before me, I am not required to returna finding on them. As indicated by counsel for UGC andthe Union of India, the expenditure, if any, on account ofthe said 2469 employees can only be classified under thehead, ‘unapproved expenditure’ and, therefore, the financialburden if at all, in that behalf would lie only on the Universityof Delhi.”

7. These decisions in all three batches of cases were appealedagainst by the University before the Division Bench, which dealt witheach of these batches as under:-

A) R.N. Virmani batch of cases:

“17. This court is of opinion that the submissions of theUniversity, the appellant, in regard to the Virmani’s order, haveno force. There is no denial and there can be none- that thenature of the scheme contemplated by the 01.05.1987notification was to ensure that only those wishing to continuein the CPF scheme had to opt to do so. A default in that regard,meant that the employee not filling his option (to continue inCPF) was deemed to have “come over” or migrated to thePension Scheme. The University and the official respondents(UGC, Central Government etc) had urged that the petitionersin the Virmani group are deemed to have accepted the CPFbenefits, because they allowed deductions from their monthlysalaries during the interregnum and permitting Pension Schemebenefits would not be fair; in the same breath it was urged thatthere was delay. This court is of opinion that the University –and the respondents are relying on contradictory pleas. If they urge that the true interpretation of the 1987 circular meant thatanyone not furnishing an option to continue in the CPF schemeis deemed to have opted for the Pension Scheme (as theVirmani group undoubtedly did) there is no way they cansucceed on the ground of laches or estoppel. If plaingrammatical meaning of the language of the May 1987 OMwere to be given, all those who do not opt would automaticallybe borne in the Pension Scheme. Such being the position, theargument that the petitioners in Virmani allowed deduction ofCPF amounts from their salary, cannot be argued against them.CPF schemes typically require employees to commit greateramounts than in GPF scheme, on a monthly basis. That thesestaff members allowed higher amounts, which were held undera scheme (and which earned interest), the benefit of whichhad not accrued and was not available to them till the date ofsuperannuation, cannot be urged against them. Likewise, thequestion of laches would not arise, because at the most, pensionwould not be allowed for the entire period, given that in mattersof pension (see Union of India & Ors. V. Tarsem Singh (2008)8 SCC 648) there is a continuing cause of action. Therefore,we find no infirmity with the learned Single Judge’s order, inVirmani’s case.”

The appeals were thus dismissed.

B) N.C. Bakshi batch of cases:

The appeals were thus dismissed.

B) N.C. Bakshi batch of cases:

“20. This court is of the opinion that no infirmity can be foundwith the approach or reasoning of the learned Single Judge, inallowing the respondents’ petitions. The learned Single Judgemade a factual analysis, in this category of teaching staff. Thechart, prepared for the purpose, and extracted at Para 3.1 ofthe judgment in this batch (N.C. Bakshi v Union of India WP5310/2010) shows that all the employees opted for the CPFbenefits, after the cut-off date. It was because of this and theexpressed stand of the UGC- and the University that the learnedSingle Judge concluded that notwithstanding the so calledoption, exercised in terms of the extensions given, the writpetitioners could not be denied the benefit of the PensionScheme because they were deemed, by the OM of 01.05.1987to have opted for it, by default. Having regard to these facts, ABC

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the appellants could not have urged that the benefit of thePension Scheme should have been denied to these class ofpetitioners/teaching staff. Therefore, we are of opinion thatthere is no infirmity with the impugned judgment of the learnedSingle Judge. The University’s appeals, therefore, deserve tofail.”

The appeals in this batch of cases were thus dismissed.

C) Shashi Kiran batch of cases:-

i) The distinction between cases in this batch as against the otherbatches was noted thus:- “21. The last category is the Shashi Kiran batch. Here, theUniversity staff, who constituted the writ petitioners, hadconsciously opted for the CPF benefits. Their grievance wasthat of discriminatory exclusion. They had approached the court,contending that when they sought for options, the respondentsrefused to extend it, saying that the previous extensions hadended and later, that the UGC and the Central Governmenthad refused to grant approval.

“23. The discrimination complained of by the appellants in ShashiKiran’s batch of cases is that even though the deadline of30.09.1987 was not deemed sacrosanct by the University (andthrough omission and, therefore, tacit approval, by UGC andthe Central Government) a large number of employees whohad not opted either way were allowed to switch-over to thePension Scheme through options given over 14 years, by 12different extensions. Given that the ground realities hadundergone a sea change, the CPF scheme was unfeasible andhad lost viability; on the other hand, the Pension Scheme wasmore beneficial. These appellants argue that in such a situation,when 2469 staff members opted for pension on various datesduring these extensions, when they wished to do so, therespondents unfairly refused the benefit.

24. The learned Single Judge’s view has some logic in it becausethe University refused the Pension Scheme benefits in case ofthose who had chosen it: in Virmani’s case, by default (i.e. nooption, which meant deemed option) and in the other cases,because of the option for CPF, given after the date prescribed.

While the logic for directing relief in the first category (Virmani)is sound, the second category was given relief by ignoring thatthey consciously wished to switch-over to the CPF scheme,but after the cutoff date. Thus, the learned Single Judge ignoredthe conscious choice made only on the ground that the choiceor option for CPF was after the cut-off date. Now, this has ledto a peculiar situation where those who opted for CPF benefitshave been divided into two categories: one, who opted beforethe cut-off date and two, those who opted after the cut-offdate. The latter have been given relief. That is also the basisfor refusing relief to the former, who are appellants in thisbatch.

25. As noticed earlier, 2469 staff members are enjoying thebenefit of the Pension Scheme, on account of the choice oroption made by them…….”

ii) It was thus observed:

“26. If these facts are taken together with the CentralGovernment’s conceded stand in permitting staff members andemployees in other institutions, including educational institutionssuch as IIT Kanpur, the Department of Atomic Energy andCouncil for Scientific and Industrial Research to opt in extendeddates for switch-over qua its employees, the rejection of UGC’srequest that the conversion date be extended till 31.12.2003,reveals the arbitrariness and non-application of mind by theCentral Government.

27. That the Central Government permitted change over aslate as till 31.12.2003, i.e before the sixth pay commissionrecommendations (introducing CPF benefits to all thoseemployed later, universally with effect from 01.01.2004). Thisaspect assumes critical importance, because the CentralGovernment (and UGC) admit that all those who opted afterthe cutoff date (and many of them having opted for CPF earlier)have been granted benefits under the Pension Scheme. Theground realities with respect to the nature of benefits that accrueto CPF optees in comparison with GPF/Pension optees paintsa stark picture. One should keep in mind that while opting forsuch schemes, employees cannot gaze into the crystal ball, as AB

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it were, and speculate whether the existing state of affairswould continue. At the time when these options were soughtand given, those opting for CPF were reasonably certain thathaving regard to the nature of contributions and the rate ofinterest, the end package would compare favourably withPension optees, with respect to returns earned at the stage ofsuperannuation. In other words, when the options were given,these appellants were in employment; neither they, nor for thatmatter the respondents could have visualized a drastic fall inthe interest rates, which severely undermined the CPF optionand shrunk the ultimate lump sum CPF benefit available tothese appellants. While examining whether a statute once validand upheld as such on the ground of Article 14 ceases to be sodue to later developments and with passage of time, theSupreme Court has declared in a number of judgments thatthe earlier declaration of validity or basis of classification cannotbe the basis to deny the arbitrariness of the law, if it is provedto be so later (Refer to State of Madhya Pradesh Vs. BhopalSugar Industries (1964) 6 S.C.R. 846; Narottam Kishore DevVarma and Ors. Vs. Union of India and Anr. (1964) 7 S.C.R.55 ; H.H. Shri Swamiji of Shri Admar Mutt etc. vs. TheCommissioner, Hindu Religious & Charitable EndowmentsDepartment and Ors. (1980) 1 S.C.R. 368; Motor GeneralTraders and Anr. Etc. etc. vs. State of Andhra Pradesh andOrs. etc. 1984 (1) S.C.R. 594.) In H.H. Shri Swamiji of ShriAdmar Mutt etc (supra) it was held that:

“there is a firm foundation laid in support of the propositionthat what was once a non-discriminatory piece of legislationmay in course of time become discriminatory and be exposedto a successful challenge on the ground that it violatedArticle 14 of the Constitution.”

28. In this case, clearly when the appellants opted for CPFbenefits, they did so without premonition of future developments.The net result was that as between two individuals in the samegrade and post, carrying the same pay scale, one who optedfor the Pension Scheme was entitled to a substantial amountand future adjustments in pension whenever DearnessAllowance were to be enhanced. However, for the appellants,

there was no such advantage; they saw a shrinking packageon account of later developments – notably the drop in interestrates. Now, interest at the rate or anyway, somewhere nearthe rates, which prevailed when the scheme was introduced,was one of the significant basis for the CPF scheme. With adrastic change in the rates, those opting for CPF were at agrave disadvantage. To compound their problems, theUniversity’s interpretation of a fairly clear OfficeMemorandum (dated 01.05.1987) injected much confusion. Thethird factor is that even amongst University staffers, 12extensions were given and a large number of options for thePension Scheme were furnished – both in respect of thosewho opted for CPF earlier and those who did not. Taking thetotality of circumstances, the University’s insistence to pin theappellants to the options they originally exercised isdiscriminatory.

29. The other reason why this court is inclined to allow thisappeal is that neither the Central Government nor the UGChave furnished a single reason for why option to switch-overto the Pension Scheme was permitted up-to 31.12.2003 toseveral other autonomous institutions and denied to theappellants. This singular omission to say what compelled theCentral Government to deny the petitioners the benefit ofswitch-over, while permitting those in other institutions, in theopinion of the court, clearly amounts to discrimination. Themere fact that the petitioners are working in the Universitywhereas the other employees work in other institutions is notsufficient, given that the consistent stand is that options oncegiven cannot be altered. Therefore, it is held that denying theright to opt to the Pension Scheme in the case of the ShashiKiran batch is unsustainable; it has resulted in arbitrariness.”

The appeals in this batch of cases were thus allowed.

8. The University accepted the decision in R.N. Virmani batch ofcases and as such no appeal has been preferred. It, however, is in appealin the other two batch of cases. At this stage, some of the documentswhich were not part of the record before the High Court but were placedbefore us, must be adverted to:- ABC

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a) On 08.08.2001, a communication was addressed by the UGCto the Joint Secretary, MHRD. The relevant portion of the letterwas:- “…Many autonomous bodies including the universities haveadopted the basic policy of this circular but they have notrestricted to the cut off date and allowed their own cut offdates to their employees for switchover from CP fund to GPfund. Some of the Institutions have allowed this changeovertill 1998. However, some of the institutions under UGC whohave shown better discipline and also some of the employeesof UGC itself are representing now to allow their employees achance to switchover from CP fund to GP fund. In UGC, thisnumber is 5 or 6 only.

Respective Ministries presumably have also not issued anycircular allowing this benefit to the employees of autonomousbodies under their control. This has led to a situation wheredifferent disparity among the employees in differentautonomous bodies as far as benefits under CP fund to GPfund is concerned. For example, IIT, Kanpur allowedconversion until 30.7.98 and kept this open for charge over foranother fifteen years after continuous service, in case they donot switch over by that date. Copy of IIT, Kanpur letter datedAtomic Energy, Govt. of India vide their letter 2/1/99/SCS/665dated 12.10.2000 have also extended another chance to optfor said switchover in case of Technical employees of DAE.Similarly, CISR have allowed one more option to all itsemployees to switchover. Their letter No. 17(197)/90-EII dated25.1.99 is enclosed for reference.

On demand of employees of UGC and also the employees ofthe Universities, the Commission considers it necessary toobtain consent of your Ministry to allow one more cut off dateto stop this disparity in UGC and other autonomous institutionswithin UGC umbrella specially in all those institutions wherethe pension scheme already exists and only a few employeeshave been left out for switchover from CP fund to GP fund.The cost of extending the scheme in those left out cases willalso be very little so as to be called an additional burden on theexchequer. Extension of the conversion scheme in institutions where pension scheme is already existing is also necessary asGovernment have extended the revised pay scales on thecondition that these institutions will maintain parity in all termsand conditions that these institutions will maintain parity in termsand conditions of service of its employees with thecorresponding category of employees in Govt. of India.

I would therefore request you to please consider this suggestionand extend the schemes of conversion from CP fund to GPfund scheme to all employees of autonomous bodies (or toemployees of UGC/Central & Deemed Universities) whoalready have pension scheme since inception, and notify someclear cut off future date, so that those institutions do not fixtheir own cut off date/dates and create disparities andconfusion.”

b) The stand of the MHRD is clear from one of thecommunications, namely letter dated 24.10.2002 addressed by theMHRD to the UGC which stated:- “2. Since the University Grants Commission is the fundingagency and it itself had extended the Government policy onconversion from CPF to GPF to the Central Universities andDeemed Universities receiving 100% maintenance grant fromthe UGC, no specific Government instructions are warrantedto decide the cases of those employees of the University ofDelhi who had been permitted irregular conversion from CPFto GPF/Pension Scheme after the prescribed cut-off date.

3. You are, therefore, advised to decide the issue at your endwithout referring it to this Ministry.”

c) Soon after the decision of the Division Bench of the High Court,a communication was addressed by the University on 13.10.2016to MHRD that about 306 employees would be eligible to drawpension in terms of said decision.

d) A letter dated 23.1.2017 was written by the Under Secretaryto Government of India, Ministry of Education, to the Registrar ofthe University. Paragraph 2 of the letter stated as under:- “2. The directions/observations in the matter are as under forcompliance: - AB

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988SUPREME COURT REPORTS

A(i)To allow GPF/Pension of Government in respect of thoseemployees who were in service as on 01/01/1986, unlessthey have specifically and in writing chosen the optionto stay with CPF. However, in respect of the employeeswho have already retired, the question of surrender ofthe University’s portion of the CPF as already takenBby them, will have to be dealt with by the University ofDelhi on consultation with the UGC/MHRD. DelhiUniversity/Concerned Colleges will ensure to recouptheir contributions under the CPF Scheme with simpleinterest of 8% per annum. Thus while seeking optionCfrom the employees this point will have to beappropriately taken care by the MHRD/UGC/DU andConcerned Colleges.

(ii) In all other cases, University of Delhi is advised to filean appeal against the order of the Hon’ble Delhi HighDCourt, in consultation with the UGC/MHRD.

(iii) In case any other employee who was not in service ason 01.01.1986 and joined thereafter, the question ofapplication of order of Department of pension dated01.05.1987 shall not arise and as such if any order ofany Court of Law allows pension in their cases, theUniversity of Delhi may have to appropriately file appealin the appropriate appellate Court in consultation withUGC and MHRD.

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3. The University may take appropriate action in light of theabove and also to defend the interest of Govt. of India in allFsuch Court cases arising in the matter.”

e) On 29.03.2019 a letter was written by MHRD to the Secretary,UGC. The relevant portion of the letter was:- “2. The matter of non-settlement of pension issue of suchGemployees of University of Delhi and its Colleges who retiredafter the order was passed by the Single Bench of Delhi HighCourt on 30.4.2014 on the grounds that UGC counsel hadmentioned in the court that the expenditure on pension wasunapproved whereas those who retired prior to 30.4.2014 wereallowed pension by the University.H

3. The matter has since been examined in consultation with D/o Expenditure and it has been decided that if in this case pensionwas allowed to a group of employees by DU, out of whichsome have already been allowed pension on having retired afterrecovering their CPF accumulation approximate to theemployer’s contribution, then the employees in this case maybe allowed pension, if they belong to the same group whichwas allowed switch over from CPF to GPF by DU and wherea few employees have already been availing themselves ofpension and if employer’s contribution to CPF has beenrecovered in their case, provided they are not related in anyway whatsoever to the case decided by the Delhi High Courton 24.8.2016.”

f) Soon thereafter a communication was addressed by the UGCto the University, the subject being: - “Release of pension benefits in respect of employees – whohave opted pension scheme from 1989 to 1998 and have retiredafter the judgment of High Court of Delhi – Regarding.”

The relevant portion of the letter was :-

“I am directed to inform you that the MHRD vide its letter no.4-41/2014-Desk (U) dated 29[th] March, 2019 (copy enclosed)has informed that the matter has since been examined inconsultation with D/o Expenditure and it has been decided thatif in this case pension was allowed to a group of employees byDU, out of which some have already been allowed pension ofhaving retired after recovering their CPF accumulationapproximate to the employer’s contribution, then the employeesin this case may be allowed pension, if they belong to the samegroup which was allowed switch over from CPF to GPF byDU and where a few employees have already been availingthemselves of pension and if employer’s contribution to CPFhas been recovered in their case, provided they are not relatedin any way whatsoever to the case decided by the Delhi HighCourt on 24.8.2016.”

g) On 02.03.2019, a communication was addressed by the UnderSecretary to Government of India, Ministry of Finance, Departmentof Financial Services to the Chairpersons of Life Insurance AB

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ACorporation of India and other Insurance Corporations in publicsector. The subject of the letter was:- “Final option for pension to leftover employees of Public SectorInsurance Companies (PSICs) namely Life InsuranceCorporation of India, General Insurance Corporation of India,BOriental Insurance Company Limited, United India InsuranceCompany Limited, National Insurance Company Limited andNew India Assurance Company Limited: Reg.”

The communication stated:-

“The issue of grant of final option for pension to leftoveremployees of Public Sector Insurance Companies (PSICs)was under examination with the Central Government. Ithas now been decided to allow a final option to those whojoined service on or before 28.06.1995 to opt for pension asa retirement benefit.

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2. PSICs are requested to submit to this Department adetailed scheme for approval and notification incorporating,inter alia, the following parameters:

(i) In the case of serving employees who opt for pension,employer’s contribution along with the interest to betransferred to the pension fund. In addition, theywould also contribute a certain multiple of pay aswas done in the case of public sector banks; E

(ii) For retired employees/families of deceasedemployees a certain multiple of employer’scontribution to Provident Fund and interest thereonreceived by the employee on retirement to berefunded, as was done in the case of public sectorbanks.

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(iii) Pension/Family Pension to those who now opt to jointhe pension scheme, will be payable with effect fromthe date notification of the scheme. However, theemployees retiring after that date will be eligible forpension with reference to their respective date ofretirement.”

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9. After hearing learned counsel for the parties who inter aliainvited attention of this Court to the documents adverted hereinabove,this Court passed the order dated 02.03.2020, which stated:- “Though their submissions are concluded, certain doubts havearisen after the learned counsel invited our attention to variousdocuments on record.

Some of those documents are (i) letter dated 8.8.2001 fromUniversity Grants Commission (for short “UGC”) to the JointSecretary, Government of India, Ministry of Human ResourceDevelopment (for short “MHRD”,) placed on record at pages46-47 of the Convenience Volume, (ii) the response dated24.10.2002 appended at page 48 of the Convenience Volume, fromthe MHRD to the aforesaid letter dated 8.8.2001; (iii) the letterdated 13.10.2016 written by Delhi University to the Secretary,Department of Higher Education, MHRD appended at page 58of the Convenience Volume) and (iv) the letter dated 2.3.2019from the Government of India (Ministry of Finance), at page 63of the Convenience Volume, in so far as certain institutions likeLIC and other Insurance Companies are concerned.

One of the basic issues that arises in the matter is whether interms of Para 3.1 of O.M. dated 1.5.1987 was it competent forthe concerned institutions/authorities to keep on extending the periodwithin which options could be exercised by the concernedemployees.

It is in this light that the Division Bench of the High Court inparagraphs 26 and 27 referred to certain facts including the standof the Central Government constituted in permitting severalmembers and employees in other institutions including educationalinstitutions such as IIT, Kanpur to give option by extending datesfor switch over till 31.12.2003.

All these communications do not spell out any consistent stand onthe Central Government. Though the Central Government andthe UGC are parties to the present list, no stand has been takenon record by filing any appropriate affidavit.

In the circumstances, we call upon Central Government (Ministryof HRD) as well as the UGC to file affidavits within seven daysfrom today and place their stand on record giving complete details.

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ADelhi University is also called upon to place on record followinginformation by way of an affidavit:

(a) How many employees who were employed before 01.01.1986,had opted to be covered under CPF Scheme by 30.09.1987.

(b) How many employees exercised the option to be part of CPFBScheme after 30.09.1987 but within first two extensions allowedby Delhi University.

(c) How many employees who had opted to be part of CPF,exercised the reverse option granted to them and opted to beunder GPF.C(d) How many writ petitioners wanted similar benefit andextension of some facilities as was granted to the employeesreferred to in Para (c) above.

(e) How many employees are presently in service who answerDdescription that they are employees from before 1.1.1986 and arestill part of CPF Scheme.

Copies of the communications referred to in the earlier part of theorder shall also be supplied alongwith a copy of this order to theCentral Government and the UGC.”

E9.1 In response to the questions posed in the Order dated02.03.2020, following information was supplied through the affidavit filedon behalf of the University.

“3.That in pursuance of the aforementioned directions, thepetitioner is providing the following itemized response.

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(a) How many employees who were employed before01.01.1986, had opted to be covered under CPF Schemeby 30.09.1987.

RESPONSE:

GApproximately 2611, who were employed before 01.01.1986,had opted for CPF Scheme by 30.09.1987

(b) How many employees exercised the option to be part ofCPF Scheme after 30.09.1987 but within first twoextensions allowed by Delhi University.

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RESPONSE:

That approximately 626 employees exercised the option tobe part of CPF Scheme after 30.09.1987 but within theinitial two extensions allowed by the Delhi University.

(c) How many employees who had opted to be part of CPF,exercised the reverse option granted to them and optedto be under GPF.

RESPONSE:

That approximately 2469 employees who had opted toremain in CPF exercised the reverse option granted to themand opted to come over to GPF.

(d) How many writ petitioners wanted similar benefit andextension of same facilities as was granted to theemployees referred to in Para (c) above.

RESPONSE:

Under category-1 i.e. N.C. Bakshi batch, 172 employeeswanted similar benefit of extension as was granted to theemployees referred to in Para-c above whereas the numberof such employees falling under category-2 i.e. ShashiKiran batch is 75.

(e) How many employees are presently in service whoanswer the description that they are employees frombefore 1.1.1986 and are still part of CPF Scheme.

RESPONSE:

51 respondents belonging to category-1 i.e. N.C. BakshiBatch and 86 respondents under category-2 i.e. Shashi Kiranbatch were appointed before 01.01.1986 are presently inservice and they are still part of CPF Scheme.”

9.2 In the affidavit filed on behalf of Union of India, Ministry ofEducation, answer to question no.4 was given as under:- “The Department of Pension and Pensioners’ welfare O.M. dated01.05.1987 provides that all CPF beneficiaries, who were in serviceon 1.1.1986 and who are still in service on the date of issue ofthese orders will be deemed to have come over to the Pension

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AScheme. These orders apply to all Civilian Central Governmentemployees who are subscribing to the Contributory Provident Fundunder the Contributory Provident Fund Rules (India), 1962. Further,D/o Financial Services vide O.M. dated 02.03.2019 has allowedthe employees of Public Sector Insurance Companies for a finaloption to those who joined service on or before 28.06.1995, to optBfor pension as a retirement benefit. This O.M. is not applicable toCentral Government as well as autonomous bodies employees.”

It was further stated:-

“4. At the very outset, it is informed that in case this Hon’bleCCourt decides the appeal against the University of Delhi and theUnion of India, the financial implications of the same would havea snowball effect, as the same would become applicable to all theCentral Universities throughout India, which would open a flood-gate of litigation.”

D10. The matter was thereafter extensively argued on behalf ofthe University. It was submitted:- a)The difference between CPF and GPF was always inexistence and as held by the Constitution Bench of this Courtin Krishena Kumar vs. Union of India and others[5], therules governing the Provident Fund and its contribution wouldEbe entirely different from the rules governing the PensionScheme.

b)Under the notification dated 01.05.1987, the choice wascompletely left to the employees and it was purely optional.An optional scheme involving financial decisions could notFbe converted into a compulsory scheme.

c)Comparison with employees of IITs, Department of AtomicEnergy and Insurance Companies was impermissible as theemployees of the University and these organizations didnot form a homogeneous class. Their terms and conditionsGof service, financing pattern and financing departments werecompletely different.

11. Number of learned senior counsel and other learned counselappeared on behalf the respondents-employees and submitted: - H5 (1990) 4 SCC 207

a)Though, notification dated 01.05.1987 was to the knowledgeof everyone, the subsequent extensions and chances toswitchover granted by the University were not brought tothe knowledge of all the employees and the respondentswere thus prejudiced.

b)If the mandate under the notification dated 01.05.1987 wasto be followed scrupulously, the University could not havegranted subsequent option of switchover. But 2469employees were allowed to ‘come over’to GPF after thecut-off date. Going by various communications placedbefore the Court, such employees were allowed full benefitsunder GPF. The case of the present respondents-employeeswas not, in any way, different from such 2469 employees.

c)The University being a Central University, its employeeswould rank on similar footing as that of the organisationslike IITs and AIIMS. If extensions were granted toemployees of the IITs, the employees of the University werealso entitled to similar benefit.

d)The Division Bench was, therefore, justified in setting asidethe view taken by the learned Single Judge of the HighCourt in Shashi Kiran batch of cases but affirming theview in other two batches.

12. The common thread which ran through the decisions of thelearned Single Judge pertaining to three batches of cases, was that thetext of the notification dated 01.05.1987 was clear that if no option wasexercised by the concerned employees before the cut-off date, theywould be deemed to have ‘come over’ to GPF. It was only a positiveoption exercised by the employees to continue to be under CPF whichcould have departed from such deeming provision. Once exercised, theoption was final and as such, there could be no switchover from thosewho had consciously opted to be under CPF. Further, relying on thedecision in S.L. Verma[4], it was observed that any exercise of optionafter the deadline or the cut-off would be inconsequential. It was on thispremise that the cases in R.N. Virmani batch of cases and N.K. Bakshibatch of cases were allowed by the learned Single Judge.

As regards Shashi Kiran batch of cases, the learned Single Judgeobserved, that once the conscious decision was taken and option was A

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Aexercised to continue to be under CPF, there was “no room for anycome back situation.” The cases in the third batch were therefore,rejected.

13. However, the learned Single Judge observed that 2469employees who were given facility of such switchover after the cut-offBdate, though they had also consciously opted to be under CPF, were notbefore the Court, and as such, their cases had to be left untouched. It isa matter of record and which aspect is clear from the communicationsreferred to in paragraph 8 hereinabove that most of those 2469 employees,at the time of retirement, were given all the benefits that were availableto those who had opted to be under GPF. Thus, those 2649 employeesCwere certainly allowed to avail the benefit of switchover which was notgranted in favour of the employees in the third batch of cases.

14. Affirming the view taken by the learned Single Judge in thefirst two batches of cases, the Division Bench set aside the view of thelearned Single Judge only in the third batch of cases i.e. in Shashi KiranDbatch of cases. As the observations made by the Division Bench indicate,the matter was placed on the ground of discrimination and principles ofequality.

15. According to the notification dated 01.05.1987 two situationswere contemplated. First, the deeming provision in terms of which theEconcerned employee was taken to have ‘come over’to GPF. The secondsituation being where a conscious option was exercised before the cut-off date to continue to be under CPF. R.N. Virmani batch of cases wastherefore rightly allowed by the learned Single Judge and the DivisionBench of the High Court, as no conscious option was exercised by theFcut-off date. Consequently, the concerned employees must be deemedto have ‘come over’ to GPF. Logically, it would be immaterial whetherthe concerned employee continued to make contribution assuming himselfto be covered under CPF, even though contributions were made by theconcerned authorities. The benefit was therefore rightly granted in favourof the employees and the entire contribution was directed to be refunded.GThe University has chosen not to appeal against that decision and thusthe matter has attained finality.

Theoretically, extension of the same principle would be that if nooption was exercised before the cut-off date, but an option was exercisedafter the cut-off date was extended; and if no switchover could be allowedHafter the cut-off date, the decisions rendered by the learned Single Judge and the Division Bench in the N.C. Bakshi batch of cases were alsoquite correct. Consequently, irrespective of the fact that the concernedemployees had exercised the option to continue to be under CPF, suchexercise of option would be non est in the eyes of law. That in fact is theratio of the decision in S.L. Verma’s[4 ]case. Thus, both these batches ofcases were rightly decided by the learned Single Judge and the DivisionBench. We, therefore, dismiss the appeal in N.C. Bakshi batch of cases.

16. We now turn to Shashi Kiran batch of cases.

17. As indicated by the University in its affidavit filed after theOrder dated 02.03.2020 was passed by this Court, 2611 employees hadopted to be under CPF Scheme by the cut-off date, i.e. by 30.09.1987.Additionally, 626 employees exercised the option to be under CPF afterthe original cut-off, but within initial two extensions granted by theUniversity. Thus, as against the entire body of employees of theUniversity, 3237 (2611+626) employees had exercised the option to beunder CPF. Out of these 3237 employees, by virtue of further extensionsgranted by the University, about 2469 employees exercised the reverseoption and opted to “come over” to GPF, leaving only 768 (3237-2469)employees to be under CPF. The answers to queries ‘d’ and ‘e’ given bythe University in its affidavit indicate that the number of employees inCPF Scheme was 86 while the petitioners in Shashi Kiran batch were75. We are, thus, concerned with 75 original petitioners in Shashi Kiranbatch of cases.

18. In Krishena Kumar[5], the distinction between the ProvidentFund Scheme and the Pension Scheme was considered by theConstitution Bench of this Court. In that case, the employees who hadjoined the service on or after 01.04.1957 were to get covered automaticallyby the Pension Scheme and insofar as employees who were already inservice on 01.04.1957, they were given an option either to retain theProvident Fund benefits or to switchover to the pensionary benefits.About 12 extensions were thereafter granted so that the options couldbe exercised by the employees within the extended time. Those whohad chosen not to exercise such option, were before this Court. Thebasic nature of the Scheme was discussed in paragraph 7 of the decisionas under:-

“7. We may now examine these options. The Railway Board’sletter No. F(E) 50-RTI/6 dated November 16, 1957 introducedthe pension scheme for railway servants. It said that the President AB

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Ahad been pleased to decide that the pension rules, as liberalisedvide Railway Board’s Memo No. E-48 OPC-208 dated July 8,1950 as amended or clarified from time to time should apply “(a)to all Railway servants who entered service on or after issue ofthat letter and (b) to all non-pensionable railway servants whowere in service on April 1, 1957 or have joined railway serviceBbetween that date and the date of issue of the order”. The Railwayservants referred to in para (b) were required to exercise anunconditional and unambiguous option on the prescribed form onor before March 31, 1958 electing for the pensionary benefits orretaining their existing retirement benefits under the State RailwayCProvident Fund Rules. It further said that any such employee fromwhom an option form prescribed for the employee’s option wasnot received within the above time limit or whose option wasincomplete or conditional or ambiguous shall be deemed to haveopted for the pensionary benefits and if any such employee haddied by that date or on or after April 1, 1957 without exercisingDoption for the pensionary scheme, his dues would be paid on theprovident fund system. The period of validity of this option wasfirst extended up to June 30, 1958, December 31, 1958, March31, 1959 and lastly up to September 30, 1959. There could,therefore, be no doubt that those who did not opt for the pensionEscheme had ample opportunity to choose between the two.”Reliance was placed by the petitioners before this Court on thedecision in D.S. Nakara vs. Union of India[6]. Paragraphs 16, 29 and 30of the decision in Krishena Kumar[5] dealt with the issue as under:- “16. As the basis or justification for striking or reading downFparagraph 3.1 on Nakara[6] ratio, it is urged that all the Railwayemployees numbering about 22 lakhs comprising 16,22,000 inservice and about 6 lakhs pensioners constitute one family andmust be treated as one class as the government’s obligation tolook after the retired Railway employees both under the pensionGscheme and the provident fund scheme being the same, they couldnot be treated differently. Any differential treatment will bediscriminatory and violative of Article 14 of the Constitution ofIndia. In Nakara cas[6] the date arbitrarily chosen was struck downand as a result the revised formula for computing pension was H6 (1983) 1 SCC 305

made applicable to all the retired pensioners. The same principle,it is urged, has to be extended to the Provident Fund retirees alsootherwise there would be discrimination. It is stated that thoughat the time of choosing between Provident Fund and PensionScheme both the alternatives appeared to be more or less equaland the retired provident funders took their lump sum yetsubsequently stage by stage the pensioners’ benefits wereincreased in such ways and to such extent that it became moreand more discriminatory against the provident funders old andnew. It was because of this discrimination that successive optionswere given by the Railway Board for the provident funders tobecome pensioners. Hence the submission that this limitation mustgo, and all the provident funders must be deemed to have becomepensioners subject to the condition that the government contributionreceived by them along with interest thereon is refunded oradjusted. Obviously this gives no importance to the condition inthe notifications that option once exercised shall be final and bindingand to the fact that in each option a cut-off date was there relatedto the purpose of giving that option.

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29. The court in Nakara[6] was not satisfied with the explanationthat the legislation had defined the class with clarity and precisionand it would not be the function of this Court to enlarge the class.The court held in paragraph 65 of the report : (SCC pp. 344-45,para 65)

“With the expanding horizons of socio-economic justice, theSocialist Republic and Welfare State which we endeavour toset up and largely influenced by the fact that the old men whoretired when emoluments were comparatively low and areexposed to vagaries of continuously rising prices, the fallingvalue of the rupee consequent upon inflationary inputs, we aresatisfied that by introducing an arbitrary eligibility criterion :‘being in service and retiring subsequent to the specified date’for being eligible for the liberalised pension scheme and therebydividing a homogeneous class, the classification being not basedon any discernible rational principle and having been foundwholly unrelated to the objects sought to be achieved by grantof liberalised pension and the eligibility criteria devised beingthoroughly arbitrary, we are of the view that the eligibility for A

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liberalised pension scheme of ‘being in service on the specifieddate and retiring subsequent to that date’ in impugnedmemoranda, Exs. P-1 and P-2, violates Article 14 and isunconstitutional and is struck down. Both the memoranda shallbe enforced and implemented as read down as under : In otherwords, Ex. P-1, the words : ‘that in respect of the governmentservants who were in service on March 31, 1979 and retiringfrom service on or after that date’; and in Ex. P-2, the words: ‘the new rates of pension are effective from April 1, 1979and will be applicable to all service officers who became/become non-effective on or after that date’ are unconstitutionaland are struck down with this specification that the datementioned therein will be relevant as being one from whichthe liberalised pension scheme becomes operative to allpensioners governed by 1972 Rules irrespective of the date ofretirement. Omitting the unconstitutional part it is declared thatall pensioners governed by the 1972 Rules and Army PensionRegulations shall be entitled to pension as computed under theliberalised pension scheme from the specified date, irrespectiveof the date of retirement. Arrears of pension prior to the A

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specified date as per fresh computation is not admissible.”

30. Thus the court treated the pension retirees only as ahomogeneous class. The PF retirees were not in mind. The courtalso clearly observed that while so reading down it was not dealingwith any fund and there was no question of the same cake beingdivided amongst larger number of the pensioners than would havebeen under the notification with respect to the specified date. Allthe pensioners governed by the 1972 Rules were treated as aclass because payment of pension was a continuing obligation onthe part of the State till the death of each of the pensioners and,unlike the case of Contributory Provident Fund, there was noquestion of a fund in liberalising pension.”

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The distinction between two Schemes was dealt with in ParagraphG32 of the decision as under:- “32. In Nakara[6] it was never held that both the pension retireesand the PF retirees formed a homogeneous class and that anyfurther classification among them would be violative of Article14. On the other hand the court clearly observed that it was notHdealing with the problem of a “fund”. The Railway Contributory

Provident Fund is by definition a fund. Besides, the government’sobligation towards an employee under CPF Scheme to give thematching contribution begins as soon as his account is openedand ends with his retirement when his rights qua the governmentin respect of the Provident Fund is finally crystallized and thereafterno statutory obligation continues. Whether there still remained amoral obligation is a different matter. On the other hand under thePension Scheme the government’s obligation does not begin untilthe employee retires when only it begins and it continues till thedeath of the employee. Thus, on the retirement of an employeegovernment’s legal obligation under the Provident Fund accountends while under the Pension Scheme it begins. The rules governingthe Provident Fund and its contribution are entirely different fromthe rules governing pension. It would not, therefore, be reasonableto argue that what is applicable to the pension retirees must alsoequally be applicable to PF retirees. This being the legal positionthe rights of each individual PF retiree finally crystallized on hisretirement whereafter no continuing obligation remained while,on the other hand, as regard Pension retirees, the obligationcontinued till their death. The continuing obligation of the State inrespect of pension retirees is adversely affected by fall in rupeevalue and rising prices which, considering the corpus alreadyreceived by the PF retirees they would not be so adversely affectedipso facto. It cannot, therefore, be said that it was the ratio decidendiin Nakara[6] that the State’s obligation towards its PF retirees mustbe the same as that towards the pension retirees. An imaginarydefinition of obligation to include all the government retirees in aclass was not decided and could not form the basis for anyclassification for the purpose of this case. Nakara[6] cannot,therefore, be an authority for this case.”

Having observed that the Pension Scheme and the Provident FundScheme were structurally different, it was then concluded that the retireesin both categories did not belong to the same class and that there was nodiscrimination. The challenge was, therefore, rejected.

19. At this stage we must also consider that in Rajasthan RajyaVidyut Vitran Nigam Limited vs. Dwarka Prasad Koolwal andothers[7], a Bench of two Judges of this Court found that an employee 7 (2015) 12 SCC 51

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Ahad no inherent right to demand extension for exercising the switchoveroption. It was observed:- “58. When the Pension Regulations and the GPF Scheme areread together, the necessary conclusion is that an employee mustgive his option for either continuing to be a member of the CPFBScheme or to switch over to the Pension and GPF Scheme. Thisoption had to be exercised within a period of 90 days from thecut-off date, that is, 28-11-1988. But RSEB, in its wisdom, choseto extend the time for exercising the switch-over option over aperiod of 8 years by giving several opportunities to the employeesthrough its notices. The right of an employee to switch over was,Ctherefore, limited in time by the Pension and GPF Scheme.However, administrative orders issued by RSEB from time to timeextended the period for exercising the option. No employee hadany inherent right to either demand an extension of the period forexercising the switch-over option or claim a right to exercise theDswitch-over option at any time prior to his retirement, and no suchright has been shown to us.”

20. Krishena Kumar[5 ]was a case where the retirees from twocategories namely Pension Fund and Provident Fund, were taken to bedistinct and different and as such the plea on the ground of discriminationEwas rejected. As the Judgment of the Division Bench discloses, thematter was considered by it from the standpoint of discrimination betweenthe same category of persons, that is to say, those who had opted to beunder CPF. The different groups in the same category were:- a)Those who had not exercised any option but continued toFmake payment of contribution towards CPF (R.K. Virmanibatch of cases).

b)Those who exercised the option to be under CPF but theoption was exercised after the cut-off. Since the option wasexercised after the cut-off, they were deemed to have ‘comeover’ to GPF and were granted benefit (N.C. Bakshi batchGof cases).

c)Those who consciously exercised the option to be underCPF; but taking advantage of further options granted through11 extensions to switchover, had been allowed to ‘comeover’ to GPF (2469 employees).H

21. It was against these three sub categories coming from thesame category of employees that the argument of discrimination wasconsidered by the Division Bench. Such was not the case in KrishenaKumar[5]or Rajasthan Rajya Vidyut Vitran[8].

The matter was further considered by the Division Bench in thecontext of the employees of educational institutions such as IITs, whoare directly under the Central Government, just as the employees of theUniversity, which is a Central University. If the option was allowed to beexercised by granting extension to the employees of the other educationalinstitutions, the Division Bench did not find any reason why similar choice/option could not be given to the employees in Shashi Kiran batch ofcases.

Additionally, the feature that has been presented through thedocuments which have subsequently come on record is that even withrespect to the employees of Insurance Corporations similar options andextensions were granted.

22. The differential treatment afforded to those 2469 employeesas against the employees in Shashi Kiran batch of cases, was notfounded on any rationale. No justifiable reason was coming forth. Ifthose 2469 employees could be afforded chance to exercise an option ofswitchover to GPF, even though they had consciously opted to be underCPF, on principle of parity or equality, the case was certainly made out.

23. We may now consider the matter from the perspective offinancial impact if the decision of the Division Bench is affirmed.

24. According to the notification dated 01.05.1987, the employeesjoining the service after 01.01.1986 would always be under GPF. Withrespect to those who were in service on 01.01.1986, said employeeswould be deemed to have “come over” to GPF unless an option to continueto be under CPF was consciously exercised before the cut-off date.Thus, when the Scheme was framed and was sought to be implemented,the concerned authorities must have taken into account the entiremagnitude such as, the number of employees and the likelihood of impacton the management of the fund, so that reasonable returns can be effectedby way of pension upon retirement of such persons. Going by the intentof the notification, those who were to opt for CPF, were an exceptionand the general rule was that everybody after 01.01.1986 would normallybe covered by GPF. It is in this context that the number of original A

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Apetitioners in Shashi Kiran batch of cases has to be seen. We areconcerned with only 75 persons. On the other hand, the bulk of peoplenamely 2469 employees were granted the choice of reverse switchoverand they were allowed all the benefits under GPF. It can reasonably besaid that when the notification dated 01.05.1987 was issued, the authoritieswere conscious of the possibility that all the employees may ‘come over’Bto GPF. With that possibility in mind, the fund was constituted and theaffairs were arranged. The shift of those 75 employees would not in anyway affect the strength and the character of the fund if a direction thatthe entire contribution made by the authorities be returned with reasonablerate of interest is issued. These 75 petitioners had approached the CourtCin the year 2010. At this length of time, it is not as if any floodgates aregoing to open and there will be drain on the resources of the State. Adirection can, therefore, be issued, as was done by the learned SingleJudge in paragraph 20 of his Judgment in R.N. Virmani batch of casesand which aspect was mentioned in the letter dated 23.01.2017 referred to in paragraph 8 hereinabove, for recouping the contribution under CPFDwith 8% simple interest per annum.

25. Considering the circumstances on record, in our view, thedecision rendered by the Division Bench of the High Court in ShashiKiran batch of cases does not call for any interference except to theextent of direction for recouping of the contribution under CPF with 8%Esimple interest per annum. It is possible that at this length of time, someof the employees in Shashi Kiran batch of cases may not be interestedin switchover to GPF. But an option must be afforded to them in suchmanner as the authorities deem appropriate.

26. All these appeals are therefore disposed of in aforestated terms,Fwith no order as to costs.

Nidhi Jain

Appeals disposed of.

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