THE STATE OF TRIPURA & ORS versus SMT. ANJANA BHATTACHARJEE & ORS. on 24 August 2022

Conclusion

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 31.10.2017 passed by the High Court of Tripura atAgartala in Writ Petition (C) No. 494 of 2012, by which, the High Courthas struck down Rule 3(3) of the Tripura State Civil Services (RevisedGPension) Rules, 2009 (hereinafter referred to as the Pension Rules, 2009)and consequently has directed to pay the original writ petitioner the arrearsof pension for the period from 01.03.2007 to 31.12.2008, the State ofTripura has preferred the present appeal.

2. The facts leading to the present appeal in a nutshell are asHunder: - 2.1 That the State of Tripura has enacted/framed the Tripura StateCivil Services (Revised Pension) Rules, 2009, issued by the Governorunder Article 309 of the Constitution of India. Rule 3(3) of the PensionRules, 2009 which was under challenge before the High Court, whichhas been struck down by the High Court by the impugned judgment andorder, is as under: - “3(3) The revised rate of pension within the above limits ofminimum and maximum pension shall be computed notionally from1[st] January 2006 or, as the case may be, from the date ofsuperannuation/retirement whichever is later. But financial benefitaccording to this computation will be admissible from 1[st] January2009 or from the date of superannuation/retirement whichever islater”

2.2 On the request made by the Government of India to consideradoption and implementation of Revised Pay Structure in UGC Systemfor Teachers in Colleges w.e.f. 01.01.2006 following revision of payscales of Central Government employees as per 6[th] Central PayCommission’s recommendations, the State of Tripura issued a notificationdated 02.02.2010 and introduced revised pay structure with 2 Band PayRs. 15600-39100 and 37400-67000 respectively with appropriateacademic Grade Pay and it was specified that arrears would be payablesubject to receipt of financial assistance of 80% from Central Governmentand that all other allowances to be admissible from 01.01.2009. TheState’s notification also provided that the pension would be admissibleas per Pension Rules for State as amended from time-to-time and theupper ceiling of pension was raised from Rs. 25200 to 38500. The Stateamended Rule 3(2) of the Pension Rules, 2009 in the year 2010 and themaximum limit of pension was fixed at Rs. 38500.

2.3 That vide letter/communication dated 23.12.2010, the FinanceDepartment clarified that as per Rule 3(3) of the Pension Rules, 2009,pension will be computed notionally and will take effect from date ofretirement of a college teacher who retired after 01.01.2006 but financialbenefit to be admissible only from 01.01.2009 or date of retirement,whichever is later.

2.4 That respondent No. 1 herein – original writ petitioner retiredas Reader-cum-Vice Principal on 28.02.2007 upon attaining age ofsuperannuation. Her pension was computed at Rs. 9,150/- based on her A

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Alast basic pay of Rs. 18,300/-. That thereafter on revision of pay, herpension came to be revised to Rs. 26,850/- on the basis of revised basicpay of Rs. 53,700/-. However, the revised pay/pension was madeadmissible and actually paid from 01.01.2009 and from the date of herretirement till 01.01.2009 it was computed notionally. Therefore, theoriginal writ petitioner preferred a writ petition before the High CourtBinitially praying for (i) arrears of salary for the period from 01.01.2006 to28.02.2007; (ii) arrears of pension for the period from 01.03.2007 to31.12.2008 on the basis of revised pay scale. At this stage, it is requiredto be noted that initially there was no challenge made to the validity ofRule 3(3) of the Pension Rules, 2009. However, subsequently, the writCpetition came to be amended and prayer for arrears of salary was deletedand the prayer for quashing of Rule 3(3) of the Pension Rules, 2009 wasmade.

2.5 It was the case on behalf of the original writ petitioner thatthere is no reasonable excuse to deny the actual benefit of pension forDthe period from 01.01.2006 to 31.12.2008 inasmuch as 80% of the financialrequirement for implementation was to be borne by the CentralGovernment whereas the State Government was to bear merely 20% ofthe entire requirement for making payment of the arrears of pension forthe said period. It was submitted on behalf of the original writ petitionerthat such a policy decision being arbitrary and violative of Article 14 ofEthe Constitution of India should be struck down. It was submitted thatthere must be a reasonable nexus to the object which the policy seeks toachieve.

2.6 That the writ petition was vehemently opposed by the State.A counter affidavit was filed opposing the writ petition in which it wasFspecifically submitted on behalf of the State that due to the financialburden on the State, which the State was not in a position to bear theadditional burden of revised pension, a policy decision has been taken togrant the benefit of revised pension notionally from 01.01.2006 to31.12.2008 and to grant the actual benefit of the revised pension fromG01.01.2009 only. It was vehemently submitted on behalf of the Statebefore the High Court that being a policy decision, the same may not beinterfered with in a writ petition under Article 226 of the Constitution ofIndia. It was submitted that it is not normally within the domain of anycourt to weigh the pros and cons of the policy or to scrutinize it and testthe degree of its beneficial or equitable disposition for the purpose ofH

varying, modifying, or annulling it, based on however sound and goodreasoning, except where it is arbitrary or violative of any constitutional,statutory or any other provision of law.

2.7 By the impugned judgment and order, the High Court has notaccepted the plea of financial crunch raised by the State and consequentlythe High Court has struck down Rule 3(3) of the Pension Rules, 2009being arbitrary and violative of Article 14 of the Constitution of India.Thereafter, the High Court has directed the State to pay the original writpetitioner the arrears of pension (revised pension) from the date of herretirement to 31.12.2008. Feeling aggrieved and dissatisfied with theimpugned judgment and order passed by the High Court, by which theHigh Court has struck down Rule 3(3) of the Pension Rules, 2009 beingarbitrary and violative of Article 14 of the Constitution of India, the Stateof Tripura has preferred the present appeal.

3. Shri Shuvodeep Roy, learned counsel appearing on behalf ofthe State has vehemently submitted that due to the financial crunch andconsidering the fact that there will be heavy financial burden upon theState to pay the actual revision pension from 01.01.2006, which mayaffect the development of a small State like State of Tripura, a policydecision was taken by the State to grant the benefit of revision of payscale from 01.01.2009 only and the benefit of revision of pay to be madeonly notionally from 01.01.2006 to 31.12.2008, which the Hon’ble HighCourt ought not to have interfered with in exercise of powers underArticle 226 of the Constitution of India.

3.1 It is submitted that unless it is found that such a policy decisionis arbitrary and/or violative of Constitution, statute or any other provisionof law, the High Court is precluded from interfering with the policydecision in exercise of powers of judicial review under Article 226 of theConstitution of India.

3.2 It is further submitted by counsel appearing on behalf of theState that a detailed affidavit was filed on behalf of the State pointingout the financial constraint and/or the financial burden on the State if thearrears of revision of pension is paid from 01.01.2006. However, theHigh Court has, without any further discussion and without giving anycogent reasons observed that the rationale of financial crunch on theState exchequer has not satisfied the Court at all.

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3.3 It is further submitted that the financial burden on the Statecan be a valid ground to fix a cut-off date for the purpose of payment ofrevision of pension. Heavy reliance is placed on the decisions of thisCourt in the cases of State of Punjab and Ors. Vs. Amar Nath Goyaland Ors.; (2005) 6 SCC 754 and State of Bihar and Ors. Vs. BiharPensioners Samaj; (2006) 5 SCC 65 in this regard.

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4. Though served none has appeared on behalf of respondent No.1, may be because pursuant to the earlier interim order passed by thisCourt, she has been paid the entire arrears of pension from the date ofher retirement. It is required to be noted that the impugned judgment andorder passed by the High Court has been stayed by this Court.

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5. We have heard learned counsel appearing on behalf of theState at length. We have gone through and considered the impugnedjudgment and order passed by the High Court. Before the High Court,Rule 3(3) of the Pension Rules, 2009 was under challenge, which isreproduced hereinabove. Rule 3(3) of the Pension Rules, 2009 has beenDstruck down by the High Court by holding that the same is arbitrary andviolative of Article 14 of the Constitution of India. Before the High Court,it was the specific case on behalf of the State that because of heavyfinancial burden and there being financial constraints, the State is not ina position to bear the heavy burden of additional revised pension andEtherefore, the State formulated a policy decision to the effect that therevised pension shall be paid from 01.01.2006 to 31.12.2008 notionallyand actual revision of pension shall be disbursed from 01.01.2009 only.A detailed affidavit was filed on behalf of the State justifying the abovepolicy decision providing/granting the revision of pay from 01.01.2009only and to grant the benefit of revised pension notionally from 01.01.2006For from the date of retirement till 31.12.2008. Before the High Court onaffidavit, it was stated, which is also reproduced by the High Court inthe impugned judgment and order, as under: - “However, vide Rule 3 (3) ibid Financial benefit was madeadmissible from 1st January, 2009 or from the date ofsuperannuation/retirement which ever was later. For all othercases, the pension was computed notionally as per revised ratesof scale of pay. Since the petitioner retired on 28-02-2007 so herrevised pension upto 31- 12-2008 was computed notionally. Theclaim of the petitioner is to allow her arrears of pension as perrevised rates for the period from 01-03-2007 to 31-12- 2008. It is G

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a fact that Financial condition of the State has been passing throughturbulent time since the recommendations of the Twelfth FinanceCommission. State Government has to depend on CentralGovernment funding for meeting up its Plan and Non-Planexpenditure. The funding by the Central Government is based onthe recommendations of the Finance Commission. FinanceCommission under estimated State’s projections of Non-planrevenue expenditure which included salaries, pension and interestpayment (Non-Flexible and Committed Expenditure). For example,the State Government presented a realistic picture of Rs. 3944.79crores towards meeting up expenditure towards pension as perrevised pay scales. Contrary to it, the Finance Commissionassessed a cumulative expenditure of Rs. 2779.09 crores whichwas Rs. 1165.70 less than the actual assessment by the StateGovernment. 12th Finance Commission calculated pension at Rs.342.01 crores during the year 2008-09 and Rs. 413.83 crores duringthe year 2009-10. This is an increase of approximately 9% over2007-08 and 21% over 2008-09. However, as per actualimplication, the expenditure during 2008-09 and 2009-10 has beenRs. 356.43 crores and Rs. 559.89 crores respectively which is14% and 57% higher than that of previous years. Thus, due tounder assessment of the state’s Financial position by the FinanceCommission, there has been a shortfall in funding on Non-Planrevenue expenditure. It was now required to make payment ofpension without compromising with the State’s Finances ondevelopment front. As such Financial benefit towards payment ofpension was considered from 01-01-2009. All other cases ofretirement falling within 01-01-2006 to 31-12-2008 were allowedpension fixed notionally. Further, payment of arrears of pensionwill have a huge impact on the State Finances as there are largenumbers of retirees during that period. Considering, the constrainedfinancial position of the State, it is not possible to consider furtherpayment of arrears of pension to the similarly situated persons asit would give rise to huge financial burden on the State Exchequerwhich will disturb the financial equilibrium of the State.”

5.1 However, without giving any cogent reasons, the High Courthas observed that the foundation i.e., the financial crunch has not satisfiedthe Court at all. Only reasoning or actual findings are in paragraph 12which reads as under: - ABC

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A“[12] We have thoroughly scrutinized the foundation as projectedby the state-respondents by the passage from the additional counteraffidavit, as reproduced above. We find from the condition laiddown in the notification dated 02.02.2010 that out of the totalfinancial requirement the Central Government shall bear 80% till31.03.2010. The period mentioned in the Rule 3(3) of the saidBrules falls within the said coverage period and as such, what theState Government has projected that for the financial crunch theyhad been compelled to bring the said amendment in the said pensionrules is wholly unacceptable and in contrast to Article 14 of theConstitution of India. The foundation i.e. the financial crunch hasCnot satisfied us at all. Hence, we are of the view that the saidRule 3(3) of the Pension Rules being absolutely arbitrary is liableto be struck down. Accordingly, we strike down the Rule 3(3) ofthe Tripura State Civil Services (Revised Pension) Rules, 2009.The respondents No. 2, 3 & 4 are directed to pay the arrearpension for the period from 01.03.2007 to 31.12.2008 to theDpetitioner within a period of 3(three) months from today, else thesaid amount shall carry interest @6% per annum from01.04.2010.”

5.2 When specific statistics were provided before the High Courtjustifying its policy decision and the financial crunch/financial constraintEwas pleaded, there was no reason for the High Court to doubt the same.As such the findings recorded by the High Court in the impugnedjudgment and order is contrary to the averments made in affidavit filedon behalf of the State Government. From the affidavit filed before theHigh Court reproduced hereinabove, we are satisfied that a consciousFpolicy decision was taken by the State Government to grant the benefitof revision of pension notionally from 01.01.2006 or from the date ofsuperannuation till 31.12.2008 and to pay/grant the benefit of revision ofpension actually from 01.01.2009, which was based on their financialcrunch/financial constraint.

G5.3 Whether the financial crunch/financial constraint due toadditional financial burden can be a valid ground to fix a cut-off date forthe purpose of granting the actual benefit of revision of pension/pay hasbeen dealt with and/or considered by this Court in the case of AmarNath Goyal (supra). In the aforesaid decision, it is observed and held bythis Court that financial constraint can be a valid ground for fixation ofH

cut-off date for grant of benefit of increased quantum of death-cum-retirement gratuity. In paragraphs 26, 32 and 33 of the said judgment, itis observed and held as under: - “26. It is difficult to accede to the argument on behalf of theemployees that a decision of the Central Government/StateGovernments to limit the benefits only to employees, who retireor die on or after 1-4-1995, after calculating the financialimplications thereon, was either irrational or arbitrary. Financialand economic implications are very relevant and germane for anypolicy decision touching the administration of the Government, atthe Centre or at the State level.

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32. The importance of considering financial implications, whileproviding benefits for employees, has been noted by this Court innumerous judgments including the following two cases. In Stateof Rajasthan v. Amrit Lal Gandhi [(1997) 2 SCC 342 : 1997 SCC(L&S) 512 : AIR 1997 SC 782] this Court went so as far as tonote that:

“Financial impact of making the Regulations retrospective can bethe sole consideration while fixing a cut-off date. In our opinion, itcannot be said that this cut-off date was fixed arbitrarily or withoutany reason. The High Court was clearly in error in allowing thewrit petitions and substituting the date of 1-1-1986 for 1-1-1990.”[Ibid., at AIR p. 784, para 17 : SCC p. 348, para 17 (emphasissupplied).]

33. More recently, in Veerasamy [(1999) 3 SCC 414 : 1999 SCC(L&S) 717] this Court observed that, financial constraints couldbe a valid ground for introducing a cut-off date while implementinga pension scheme on a revised basis [ Supra fn 2 SCC at p. 421(para 15).] . In that case, the pension scheme applied differentlyto persons who had retired from service before 1-7-1986, andthose who were in employment on the said date. It was held thatthey could not be treated alike as they did not belong to one classand they formed separate classes.”

5.4 In the aforesaid decision this Court after considering the earlierdecisions of this Court in the cases of State of Punjab Vs. Boota Singh;(2000) 3 SCC 733 and State of Punjab Vs. J.L. Gupta; (2000) 3

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ASCC 736, it is specifically observed and held that for the grant ofadditional benefit, which had financial implications, the prescription of aspecific future date for conferment of additional benefit, could not beconsidered arbitrary.

5.5 In the subsequent decision in Bihar Pensioners Samaj (supra),Bthe decision in the case of Amar Nath Goyal (supra) is followed and itis observed and held that financial constraints could be a valid groundfor introducing a cut-off date while introducing a pension scheme onrevised basis. It is further observed and held by this Court in the aforesaiddecision that fixing of a cut-off date for granting of benefits is well withinthe powers of the Government as long as the reasons therefor are notCarbitrary and are based on some rational consideration.

6. While applying the law laid down by this Court in the aforesaiddecisions to the facts of the case on hand, we are of the opinion that inthe instant case before us, the cut-off date has been fixed as 01.01.2009on a very valid ground i.e., financial constraint. Therefore, the HighDCourt manifestly erred in striking down the Rule 3(3) of the PensionRules, 2009 being arbitrary and violative of Article 14 of the Constitution.

7. In view of the above and for the reasons stated above, theimpugned judgment and order passed by the High Court striking downRule 3(3) of the Tripura State Civil Services (Revised Pension) Rules,E2009 is unsustainable and the same deserves to be quashed and setaside and is accordingly quashed and set aside. However, it is observedthat as respondent No. 1 has already been paid the arrears from thedate of her retirement pursuant to the interim order passed by this Court,the same shall not be recovered from her. However, striking down ofFRule 3(3) of the Tripura State Civil Services (Revised Pension) Rules,2009 by the impugned judgment and order is hereby quashed and setaside. The present appeal is accordingly allowed. In the facts andcircumstances of the case there shall be no order as to costs.

GAnkit Gyan

(Assisted by : Rahul Rathi, LCRA)

Appeal allowed.

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