The State Of Tripura vs Anjana Bhattacharjee

The State of Tripura & Ors. …Appellant(s)

Versus

Smt. Anjana Bhattacharjee & Ors. …Respondent(s)

JUDGMENT

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned

judgment and order dated 31.10.2017 passed by the High

Court of Tripura at Agartala in Writ Petition (C) No. 494 of

2012, by which, the High Court has struck down Rule 3(3)

of the Tripura State Civil Services (Revised Pension) Rules,

2009 (hereinafter referred to as the Pension Rules, 2009)

and consequently has directed to pay the original writ Signature Not Verified Digitally signed by R Natarajan Date: 2022.08.24 17:14:55 IST Reason:

petitioner the arrears of pension for the period from

1 01.03.2007 to 31.12.2008, the State of Tripura has

preferred the present appeal.

2. The facts leading to the present appeal in a nutshell are as

under: ­

2.1 That the State of Tripura has enacted/framed the Tripura

State Civil Services (Revised Pension) Rules, 2009, issued

by the Governor under Article 309 of the Constitution of

India. Rule 3(3) of the Pension Rules, 2009 which was

under challenge before the High Court, which has been

struck down by the High Court by the impugned judgment

and order, is as under: ­ “3(3) The revised rate of pension within the above limits of minimum and maximum pension shall be computed notionally from 1st January 2006 or, as the case may be, from the date of superannuation/retirement whichever is later. But financial benefit according to this computation will be admissible from 1st January 2009 or from the date of superannuation/retirement whichever is later”

2.2 On the request made by the Government of India to

consider adoption and implementation of Revised Pay

Structure in UGC System for Teachers in Colleges w.e.f.

01.01.2006 following revision of pay scales of Central

Government employees as per 6th Central Pay

Commission’s recommendations, the State of Tripura

2 issued a notification dated 02.02.2010 and introduced

revised pay structure with 2 Band Pay Rs. 15600­39100

and 37400­67000 respectively with appropriate academic

Grade Pay and it was specified that arrears would be

payable subject to receipt of financial assistance of 80%

from Central Government and that all other allowances to

be admissible from 01.01.2009. The State’s notification

also provided that the pension would be admissible as per

Pension Rules for State as amended from time­to­time and

the upper ceiling of pension was raised from Rs. 25200 to

38500. The State amended Rule 3(2) of the Pension Rules,

2009 in the year 2010 and the maximum limit of pension

was fixed at Rs. 38500.

2.3 That vide letter/communication dated 23.12.2010, the

Finance Department clarified that as per Rule 3(3) of the

Pension Rules, 2009, pension will be computed notionally

and will take effect from date of retirement of a college

teacher who retired after 01.01.2006 but financial benefit

to be admissible only from 01.01.2009 or date of

retirement, whichever is later.

3 2.4 That respondent No. 1 herein – original writ petitioner

retired as Reader­cum­Vice Principal on 28.02.2007 upon

attaining age of superannuation. Her pension was

computed at Rs. 9,150/­ based on her last basic pay of Rs.

18,300/­. That thereafter on revision of pay, her pension

came to be revised to Rs. 26,850/­ on the basis of revised

basic pay of Rs. 53,700/­. However, the revised

pay/pension was made admissible and actually paid from

01.01.2009 and from the date of her retirement till

01.01.2009 it was computed notionally. Therefore, the

original writ petitioner preferred a writ petition before the

High Court initially praying for (i) arrears of salary for the

period from 01.01.2006 to 28.02.2007; (ii) arrears of

pension for the period from 01.03.2007 to 31.12.2008 on

the basis of revised pay scale. At this stage, it is required

to be noted that initially there was no challenge made to

the validity of Rule 3(3) of the Pension Rules, 2009.

However, subsequently, the writ petition came to be

amended and prayer for arrears of salary was deleted and

the prayer for quashing of Rule 3(3) of the Pension Rules,

2009 was made.

4 2.5 It was the case on behalf of the original writ petitioner that

there is no reasonable excuse to deny the actual benefit of

pension for the period from 01.01.2006 to 31.12.2008

inasmuch as 80% of the financial requirement for

implementation was to be borne by the Central

Government whereas the State Government was to bear

merely 20% of the entire requirement for making payment

of the arrears of pension for the said period. It was

submitted on behalf of the original writ petitioner that

such a policy decision being arbitrary and violative of

Article 14 of the Constitution of India should be struck

down. It was submitted that there must be a reasonable

nexus to the object which the policy seeks to achieve.

2.6 That the writ petition was vehemently opposed by the

State. A counter affidavit was filed opposing the writ

petition in which it was specifically submitted on behalf of

the State that due to the financial burden on the State,

which the State was not in a position to bear the additional

burden of revised pension, a policy decision has been

taken to grant the benefit of revised pension notionally

5 from 01.01.2006 to 31.12.2008 and to grant the actual

benefit of the revised pension from 01.01.2009 only. It was

vehemently submitted on behalf of the State before the

High Court that being a policy decision, the same may not

be interfered with in a writ petition under Article 226 of

the Constitution of India. It was submitted that it is not

normally within the domain of any court to weigh the pros

and cons of the policy or to scrutinize it and test the

degree of its beneficial or equitable disposition for the

purpose of varying, modifying, or annulling it, based on

however sound and good reasoning, 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

not accepted the plea of financial crunch raised by the

State and consequently the High Court has struck down

Rule 3(3) of the Pension Rules, 2009 being arbitrary and

violative of Article 14 of the Constitution of India.

Thereafter, the High Court has directed the State to pay

the original writ petitioner the arrears of pension (revised

pension) from the date of her retirement to 31.12.2008.

6 Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the High Court, by which

the High Court has struck down Rule 3(3) of the Pension

Rules, 2009 being arbitrary and violative of Article 14 of

the Constitution of India, the State of Tripura has

preferred the present appeal.

3. Shri Shuvodeep Roy, learned counsel appearing on behalf

of the State has vehemently submitted that due to the

financial crunch and considering the fact that there will be

heavy financial burden upon the State to pay the actual

revision pension from 01.01.2006, which may affect the

development of a small State like State of Tripura, a policy

decision was taken by the State to grant the benefit of

revision of pay scale from 01.01.2009 only and the benefit

of revision of pay to be made only notionally from

01.01.2006 to 31.12.2008, which the Hon’ble High Court

ought not to have interfered with in exercise of powers

under Article 226 of the Constitution of India.

3.1 It is submitted that unless it is found that such a policy

decision is arbitrary and/or violative of Constitution,

statute or any other provision of law, the High Court is

7 precluded from interfering with the policy decision in

exercise of powers of judicial review under Article 226 of

the Constitution of India.

3.2 It is further submitted by counsel appearing on behalf of

the State that a detailed affidavit was filed on behalf of the

State pointing out the financial constraint and/or the

financial burden on the State if the arrears of revision of

pension is paid from 01.01.2006. However, the High Court

has, without any further discussion and without giving

any cogent reasons observed that the rationale of financial

crunch on the State exchequer has not satisfied the Court

at all.

3.3 It is further submitted that the financial burden on the

State can be a valid ground to fix a cut­off date for the

purpose of payment of revision of pension. Heavy reliance

is placed on the decisions of this Court in the cases of

State of Punjab and Ors. Vs. Amar Nath Goyal and Ors.;

(2005) 6 SCC 754 and State of Bihar and Ors. Vs. Bihar

Pensioners Samaj; (2006) 5 SCC 65 in this regard. 8

4. Though served none has appeared on behalf of respondent

No. 1, may be because pursuant to the earlier interim

order passed by this Court, she has been paid the entire

arrears of pension from the date of her retirement. It is

required to be noted that the impugned judgment and

order passed by the High Court has been stayed by this

Court.

5. We have heard learned counsel appearing on behalf of the

State at length. We have gone through and considered the

impugned judgment and order passed by the High Court.

Before the High Court, Rule 3(3) of the Pension Rules, 2009

was under challenge, which is reproduced hereinabove.

Rule 3(3) of the Pension Rules, 2009 has been struck down

by the High Court by holding that the same is arbitrary

and violative 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 heavy financial burden and there

being financial constraints, the State is not in a position to

bear the heavy burden of additional revised pension and

therefore, the State formulated a policy decision to the

effect that the revised pension shall be paid from

9 01.01.2006 to 31.12.2008 notionally and actual revision of

pension shall be disbursed from 01.01.2009 only. A

detailed affidavit was filed on behalf of the State justifying

the above policy decision providing/granting the revision of

pay from 01.01.2009 only and to grant the benefit of

revised pension notionally from 01.01.2006 or from the

date of retirement till 31.12.2008. Before the High Court on

affidavit, it was stated, which is also reproduced by the

High Court in the impugned judgment and order, as under:

­ “However, vide Rule 3 (3) ibid Financial benefit was made admissible from 1st January, 2009 or from the date of superannuation/retirement which ever was later. For all other cases, the pension was computed notionally as per revised rates of scale of pay. Since the petitioner retired on 28­02­2007 so her revised pension upto 31­ 12­2008 was computed notionally. The claim of the petitioner is to allow her arrears of pension as per revised rates for the period from 01­03­ 2007 to 31­12­ 2008. It is a fact that Financial condition of the State has been passing through turbulent time since the recommendations of the Twelfth Finance Commission. State Government has to depend on Central Government funding for meeting up its Plan and Non­Plan expenditure. The funding by the Central Government is based on the recommendations of the Finance Commission. Finance Commission under estimated State’s projections of Non­plan revenue expenditure which included salaries, pension and interest payment (Non­Flexible and Committed Expenditure). For example, the State Government presented a realistic picture of Rs. 3944.79 crores towards meeting up expenditure towards pension as per revised pay scales. Contrary to it, the Finance Commission assessed a cumulative expenditure of Rs. 2779.09 crores which was Rs. 1165.70 less than the

10 actual assessment by the State Government. 12th Finance Commission calculated pension at Rs. 342.01 crores during the year 2008­09 and Rs. 413.83 crores during the year 2009­10. This is an increase of approximately 9% over 2007­08 and 21% over 2008­

09. However, as per actual implication, the expenditure during 2008­09 and 2009­10 has been Rs. 356.43 crores and Rs. 559.89 crores respectively which is 14% and 57% higher than that of previous years. Thus, due to under assessment of the state’s Financial position by the Finance Commission, there has been a shortfall in funding on Non­Plan revenue expenditure. It was now required to make payment of pension without compromising with the State’s Finances on development front. As such Financial benefit towards payment of pension was considered from 01­01­2009. All other cases of retirement falling within 01­01­2006 to 31­12­2008 were allowed pension fixed notionally. Further, payment of arrears of pension will have a huge impact on the State Finances as there are large numbers of retirees during that period. Considering, the constrained financial position of the State, it is not possible to consider further payment of arrears of pension to the similarly situated persons as it would give rise to huge financial burden on the State Exchequer which will disturb the financial equilibrium of the State.”

5.1 However, without giving any cogent reasons, the High

Court has observed that the foundation i.e., the financial

crunch has not satisfied the Court at all. Only reasoning or

actual findings are in paragraph 12 which reads as under:

­ “[12] We have thoroughly scrutinized the foundation as projected by the state­respondents by the passage from the additional counter affidavit, as reproduced above. We find from the condition laid down in the notification dated

02.02.2010 that out of the total financial requirement the Central Government shall bear 80% till 31.03.2010. The period mentioned in the Rule 3(3) of the said rules falls within the said coverage period and as such, what the State Government has projected that for the financial crunch they had been compelled to bring the said amendment in

11 the said pension rules is wholly unacceptable and in contrast to Article 14 of the Constitution of India. The foundation i.e. the financial crunch has not satisfied us at all. Hence, we are of the view that the said Rule 3(3) of the Pension Rules being absolutely arbitrary is liable to be struck down. Accordingly, we strike down the Rule 3(3) of the Tripura State Civil Services (Revised Pension) Rules, 2009. The respondents No. 2, 3 & 4 are directed to pay the arrear pension for the period from 01.03.2007 to 31.12.2008 to the petitioner within a period of 3(three) months from today, else the said amount shall carry interest @6% per annum from 01.04.2010.”

5.2 When specific statistics were provided before the High

Court justifying its policy decision and the financial

crunch/financial constraint was pleaded, there was no

reason for the High Court to doubt the same. As such the

findings recorded by the High Court in the impugned

judgment and order is contrary to the averments made in

affidavit filed on behalf of the State Government. From the

affidavit filed before the High Court reproduced

hereinabove, we are satisfied that a conscious policy

decision was taken by the State Government to grant the

benefit of revision of pension notionally from 01.01.2006 or

from the date of superannuation till 31.12.2008 and to

pay/grant the benefit of revision of pension actually from

01.01.2009, which was based on their financial

crunch/financial constraint.

12 5.3 Whether the financial crunch/financial constraint due to

additional financial burden can be a valid ground to fix a

cut­off date for the purpose of granting the actual benefit

of revision of pension/pay has been dealt with and/or

considered by this Court in the case of Amar Nath Goyal

(supra). In the aforesaid decision, it is observed and held

by this Court that financial constraint can be a valid

ground for fixation of cut­off date for grant of benefit of

increased quantum of death­cum­retirement gratuity. In

paragraphs 26, 32 and 33 of the said judgment, it is

observed and held as under: ­ “26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/State Governments to limit the benefits only to employees, who retire or die on or after 1­4­ 1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level.

xxx xxx xxx

32. The importance of considering financial

implications, while providing benefits for employees, has been noted by this Court in numerous judgments including the following two cases. In State of 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 to note that:

“Financial impact of making the Regulations retrospective can be the sole consideration while fixing

13 a cut­off date. In our opinion, it cannot be said that this cut­off date was fixed arbitrarily or without any reason. The High Court was clearly in error in allowing the writ petitions and substituting the date of 1­1­ 1986 for 1­1­1990.” [Ibid., at AIR p. 784, para 17 : SCC p. 348, para 17 (emphasis supplied).]

33. More recently, in Veerasamy [(1999) 3 SCC 414 :

1999 SCC (L&S) 717] this Court observed that, financial constraints could be a valid ground for introducing a cut­off date while implementing a pension scheme on a revised basis [ Supra fn 2 SCC at p. 421 (para 15).] . In that case, the pension scheme applied differently to persons who had retired from service before 1­7­1986, and those who were in employment on the said date. It was held that they could not be treated alike as they did not belong to one class and they formed separate classes.”

5.4 In the aforesaid decision this Court after considering the

earlier decisions 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 SCC 736, it is

specifically observed and held that for the grant of

additional benefit, which had financial implications, the

prescription of a specific future date for conferment of

additional benefit, could not be considered arbitrary.

5.5 In the subsequent decision in Bihar Pensioners Samaj

(supra), the decision in the case of Amar Nath Goyal

(supra) is followed and it is observed and held that

financial constraints could be a valid ground for 14 introducing a cut­off date while introducing a pension

scheme on revised basis. It is further observed and held by

this Court in the aforesaid decision that fixing of a cut­off

date for granting of benefits is well within the powers of the

Government as long as the reasons therefor are not

arbitrary and are based on some rational consideration.

6. While applying the law laid down by this Court in the

aforesaid decisions to the facts of the case on hand, we are

of the opinion that in the instant case before us, the cut­off

date has been fixed as 01.01.2009 on a very valid ground

i.e., financial constraint. Therefore, the High Court

manifestly erred in striking down the Rule 3(3) of the

Pension Rules, 2009 being arbitrary and violative of Article

14 of the Constitution.

7. In view of the above and for the reasons stated above, the

impugned judgment and order passed by the High Court

striking down Rule 3(3) of the Tripura State Civil Services

(Revised Pension) Rules, 2009 is unsustainable and the

same deserves to be quashed and set aside and is

accordingly quashed and set aside. However, it is observed

that as respondent No. 1 has already been paid the arrears

15 from the date of her retirement pursuant to the interim

order passed by this Court, the same shall not be recovered

from her. However, striking down of Rule 3(3) of the

Tripura State Civil Services (Revised Pension) Rules, 2009

by the impugned judgment and order is hereby quashed

and set aside. The present appeal is accordingly allowed. In

the facts and circumstances of the case there shall be no

order as to costs.

………………………………….J. [M.R. SHAH]

NEW DELHI; ………………………………….J. August 24, 2022. [B.V. NAGARATHNA]

16