Holding

The Board cannot alter pension conditions covered by the 1960 Regulations without amending those regulations, but it may validly reduce the commutation percentage to the original statutory limit by a Board proceeding.

Summary

The case concerned whether the Tamil Nadu Electricity Board could alter pension benefits of its employees without formally amending the Tamil Nadu Electricity Board Liberalised Pension Regulations, 1960. The Board had relied on a settlement clause to bypass the 15‑day notice under Section 9A of the Industrial Disputes Act and on a saving clause in Regulation 9 to import state pension rules. The Supreme Court held that while the settlement merely exempted the Board from the notice requirement, any change to pension conditions that are covered by the 1960 Regulations must be made by amending those regulations; the Board’s resolution increasing qualifying service to 33 years and changing pension calculation was therefore illegal. However, the reduction of the maximum commutation percentage from 40% to the original one‑third, effected by a later Board resolution, was permissible as it merely restored the statutory limit. The Court declined to opine on constitutional challenges, finding the matter resolvable on statutory construction. The appeals were partly allowed, setting aside the Board’s adverse changes but upholding the commutation reduction.

Issues considered

Does Clause 15(iii) of the 1998 settlement exempt the Board from giving notice under Section 9A of the Industrial Disputes Act, 1947?
Can the Board modify pension conditions that are governed by the 1960 Regulations without formally amending those regulations?
Are the Board proceedings B.P.(Ch) No.64 (increase in qualifying service and change in pension calculation) valid without amendment to the Regulations?
Is the reduction of the maximum commutation percentage by B.P.(Ch) No.66 valid without amendment to the Regulations?
Do the Board's actions violate Article 14 of the Constitution or the ratio in D.S. Nakara?
What procedural steps are required for the Board to lawfully alter pension benefits?

Legislation cited

Electricity (Supply) Act, 1948s. 79(c)
Employees Provident Fund Act, 1952s. 17(1)(b)
Employees' Provident Funds and Miscellaneous Provisions Act, 1952s. 17(14)
Industrial Disputes Act, 1947s. 18, s. 9A

Subjects

pensionregulation amendmentIndustrial Disputes ActBoard proceedingsstatutory interpretationemployee rightsArticle 14Article 300Asaving clausesettlementTamil Nadu Electricity Board

Judgment

CENTRAL ORGANISATION OF TAMIL NADU ELECTRICITY A .
EMPLOYEES
v:
TAMIL NADU ELECTRICITY BOARD

OCTOBER 21, 2005
B
[B.N. SRIKRISHNA AND C.K. THAKKER, JJ.]

Labour Laws:

Industrial Disputes Act, 1947: Sections 9A and 18-Settlement between C
employer-Electricity Board and its employees that revised pension scheme of
State Government and any amendments thereon applicable to the pensioners
of the Board-Effect of-Held: Settlement merely operates to exempt employer
from giving notice under s. 9A-Board not barred from changing even those
conditions of service that were not subject matter of Regulations, fresh D
settlement or award-Conditions of service settled by a binding settlement/
award cannot be changed-Tamil Nadu Electricity Board Liberalised Pension
Regulations, 1960.

TN. Electricity Board Liberalised Pension Regulations, 1960:
E
Regulations 9 and 3-Amendment made to Regulation 9- 'Expression'
Civil Service Regulations in Regulation 9 replaced by Tamil Nadu Pension
Rules and Tamil Nadu Pension Rules, 1978-Permissibility of-Held: Decision
taken by Board to amend its own pension Rules and bring it in line with State
Government Rules, those applicable to Government servants was per se
unexceptionable-However, it could not have been done by mere amendment F
in Regulation 9 but by amending the Regulations in accordance with law-
Electricity (Supply) Act, 1948.

Regulation 7-Commutation of pension-Commutation percentage
increased to 40% by Board Proceedings, without amending the Regulations- G
Thereafter, another Board Proceeding reducing it to 33 113 'Yo-Permissibility
of-Held: Grant of benefit by mere Board Proceeding could be validly altered
by another Board Proceeding-Change in maximum permissible commutation
of pension from 40% to 33113% brought level of commutation to what was
originally given by 1960 Regulations-Thus, not liable to be interfered with-
407 II
408 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A Electricity (Supply) Act, 1948.
Regulation 3-Aspect with regard to qualifYing period of service for
pension and quantification of pension covered by 1960 Regulations-Board
Proceedings enhanced qualifving service for pension from thirty years to thirty
three years and made pension relatable to average emoluments draw_n during
B last ten month service instead of last drawn pay-Legality of-Held: Board
Proceedings could not have brought adverse changes in quantification of
pensions and the qualifYing period of service for pension without amendment
to 1960 Regulations-Hence, bad in law and illegal-Electricity (Supply) Act,
1948

c Judicial Process: If case can be decided on narrower grounding-statutory
construction, constitutional grounds should be avoided-Practice and
Procedure.

The question which arose for consideration in these appeals was
D whether an establishment can modify pensions (and connected benefits)
payable to employees without first changing the Regulations that govern
those pensions.

State Government constituted the Tamil Nadu Electricity Board in
1957. Thereafter, the Board brought into force "Tamil Nadu Electricity
E Board Liberalised Pension Regulations, 1960 which dealt with the
condition of service specifically pension and death-cum-retirement
gratuity. At that time the Board had in its employment the erstwhile Tamil
Nadu Government servants as well as employees directly recruited by it.
They were governed by the Civil Service Regulations inter a/ia with regard
to their pensionary benefits. Under Regulation 3 of the 1960 Regulations,
F the qualifying service for earning pension was thirty years. A Saving
Clause was incorporated in Regulation 9 that no provision in the Civil
Service Regulations to the extent of its inconsistency with any of the
provisions of the 1960 Regulations would have any effect and that the
provisions made in the Regulations would be in addition to and not in
G derogation of the provisions in the Civil Service Regulations as amended
from time to time.

The Board had its own Pension and Provident Fund Schemes. It
passed a resolution that all the Regular Work Establishment Workmen
retiring/expiring on or after l. 7.86 would be governed by the pension
H scheme of the Board. State Government replaced the then existent Civil
CENTRAL ORGANISATION OFT AMIL NADU ELEC EMP. , . TAMIL NADU ELECT. BOARD 409

Service Regulations with the Tamil Nadu Pension Rules and Tamil Nadu A
Pensio;i Rules, 1978. In 1995, the Board passed a resolution B.P. (FB) No.
7 which amended Regulation 9 of the 1960 Regulations and the expression
"Civil Service Regulations" in Regulation 9 was replaced by "Tamil Nadu
Pension Rules" and "Tamil Nadu Pension Rules, 1978" which were to take
effect retrospectively. On 8. 7.98, the Board and its workmen entered into B
a Settlement under section 18(1) of the Industrial Disputes Act, 1947.
Clause 14 of the settlement provided that the settlement would be secured
immediately on wage revision and on workload revision, after settlement
of revisions of work norms. By Clause 17, the settlement was to be in force
for a period of four years with effect from 1.12.96. Clause 15(iii) made
the revised pension scheme of the Government and any amendments there C
on from time to time applicable to the pensioners of the Electricity Board.
On 19.3.03, State Government issued G.O. No. 71 enhancing the maximum
qualifying service for full pension to thirty-three years from thirty years
and that pension would be determined on the basis of the average
emoluments drawn during the last ten months of service rendered. By D
another G.O. State Government directed that the maximum limit for
commutation of portion of pension by the pensioner would be 33 1/3% of
pension only. Following the amendments made by the State Government
to the Pension Rules, the Board passed Resolution B.P. (Ch) Nos. 64, 65
and 66 dated 31.3.03.
E
Different trade Unions of the employees of Tamil Nadu Electricity
Board filed Writ Petition challenging these Resolutions. High Court held
that the Settlement dated 8.7.98 provided for revised pension schemes of
the Government to be applied to the Board's pensioners and hence, no
prior notice under section 9A of the Industrial Disputes Act, 1947 was F
necessary; that Regulation 9 of the 1960 Regulations as amended provided
for the adoption of the Pension Rules of the Government as amended from
time to time; that the Board's Service Regulation No.17 did not provide
for payment of pension and hence the qualifying service of 30 years could
nnt be relied upon; that H.P. Nos. 64 and 66 are valid; and that B.P. No.
65 was illegal. G
Partly allowing the appeals, the Court

HELD: I. Clause 15(iii) of the Settlement dated 8.7.98 between the
Board and its employees merely operates to exempt the employer-Board
from giving a notice under Section 9A of the Industrial Disputes Act, 1947. H
410 SUPREME COURT REPORTS (2005] SUPP. 4 S.C.R.

A It cannot be said that the Board could not have changed, by executive
action, even those conditions of service that were not the subject matter
of.regulations, a settlement or an award. The submission that the
conditions of service once settled can never be changed except by being
substituted by a fresh settlement or award may be true with. regard to
conditions of service, which have been settled by a binding settlement/
B award. With regard to matters which are in the realm of virgin territory,
this may not be the rule. [423-C, A, Cl

2.1. The decision taken by the Board to amend its own pension rules
and bring it in line with those applicable to the Government servants was
C per se unexceptionable; however, this could not have been achieved by a
mere amendment in Regulation 9 of the Tamil Nadu Electricity Board
Liberalised Pension Regulations, 1960. [425-E]

2.2. The purpose and purport of Regulation 9 was to ensure, firstly,
that the State Government employees taken over in the service of the
D Board were not prejudiced with regard to their conditions of service,
particularly pension and death-cum-retirement gratuity. Secondly, .the
saving clause ensures that with regard to matters which were not covered
by the State Government rules but covered by the Board's Regulations,
the benefit covered under the Board Regulations would be in addition to
E and not in derogation of what was already available in the Civil Service
Regulations. (425-F, G]

2.3. It was open to the Board in exercise of its statutory powers under
Section 79(c) of the Electricity (Supply) Act, 1948 to amend its pension
regulations in such manner as to bring it precisely in line with the Tamil
F Nadu Government Rules with regard to pension and other benefits as
. applicable to the State Government employees, Instead of expressly
amending the Regulations, the Board appears to have fallen back on
Regulation 9, which was merely a saving clause intended to insulate the
employees against erosion of their benefits granted in the provisions. The
G Board could not have straightaway imported wholesale the provisions of
the pension rules applicable to the State Government employees via the
vehicle of the saving clause, Regulation 9. The conditions of service
pertaining to pension that were already the subject matter of the
Regulations could not have been changed by the Board without amending
the Regulations in accordance with law. [425-H; 426-A, B, CJ
H
3. By Board Proceedings B.P.(Ch) No. 64 dated 31.3.03 the maximum
CENTRAL ORGANISATION OF TAMIL NADU ELEC EMP. "·TAMIL NADU ELECT BOARD 4J j

qualifying service for pension was increased from thirty years to thirty A
three years and the pension was made relatable to the average emoluments
drawn during the last ten months service instead of the last drawn pay.
These two aspects were the subject matters of the 1960 Regulations and,
therefore, by a Board Proceeding, without amending the Regulations, they
could not have been modified to the prejudice of the employees. Therefore B
B.P.(Ch) No. 64 dated 31.3.03 is bad in law and illegal inasmuch as it
purports to bring about adverse changes in the quantification of pensions
and the qualifying period of service for pensions. 1426-E, F]

4. G.O. No. 74 dated 19.3.03 issued by the Government of Tamil
Nadu decreased the maximum permissible commutation of pension from C
40% to 33 l/3%. Regulation 7 as framed in 1960 permitted a maximum
commutation of one-third. By a Board Proceeding B.P.(Ch) No. 208 dated
18.8.98, the commutation percentage was increased to 40%. By another
Board Proceeding B.P. (Ch) No. 66 dated 31.3.03 this was reduced to 33
1/3%. What was granted by a Board Proceeding, without amending the
Regulations, is sought to be taken away by another Board Proceeding with D
a view to following G.O.Ms. No. 74 dated 19.3.03 issued by the State
Government in respect of its own employees. The change made by B.P.(Ch)
No. 66 dated 31.3.03 actually brings the level of commutation to what was
originally given by the 1960 Regulations. What was granted by a mere
Board Proceeding could be validly altered by another Board Proceeding. E
Therefore, the reduction in the maximum permissible commiltation of
pension from 40% to 33 1/3% brought about by B.P.(Ch) No. 66 dated
31.03.03, without amendment of the 1960 Regulations is not liable to be
interfered with without prejudice to the rights of the employees to raise
an industrial dispute. 1427-B, C, D, Fl
F
5.1. Supreme Court must be parsimonious on the grounds on which
it chooses to decide a particular case. If a case can be decided upon any
ground other than constitutional grounds, such as by statutory
construction or the like, this Court must do so. Despite the characteristic
acuity with which the constitutional grounds were argued, they are not
ripe for adjudication, as this court has been able to decide the matter on G
other narrower grounds. Therefore, on the issue of whether the Board can
adversely modify the pensions payable even after following the prescribed
procedure (i.e. after amending the applicable pension regulations) and
whether such change would be violative of Article 14 or the ratio in D.S
Nakara no opinion is expressed as it is not necessary. [428-F, G; 429-E] H
412 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A D. S. Nakara and Ors. v. Union of India, (1983} l SCC 305, referred
to.

The Judicial Process: An Introductory Analysis of the Courts of The
United States, England, and France by Henry J Abraham, (3d ed 1975) p.371,
referred to.
B
5.2. It cannot be said that if the matter is not decided on the broader
constitutional ground argued, there would be multiplicity of litigation on
the same issue. In fact, at the present stage the argument of multiplicity
of litigation is only speculative since it cannot predict what future course
C the Board or the employees will adopt. Further, even if multiple litigations
were a possibility that would not compel this Court to opine on every
ground argued before it, especially those involving constitutional issues.
(428-C]

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 6449-6450
D of 2005.

From. the Judgment and Order dated 23.10.2003 of the Madras High
Court in W.P. Nos. 11899 and 11900 of 2003.
WITH
E C.A. Nos. 6451-6452, 6453-6454, 6455-6456 and 6457-6458 of 2005.

Ms. Indra Jaising, Mrs. R. Vaigai, Ms. Anna Mathew and S.R. Setia for
the Appellant in C.A. Nos. 6449-6450/2005.

K.V. Vishwanathan, B. Raghunath, Abhijit Sengupta and K.V. Vijay
F Kumar for the Appellant in C.A. Nos. 6451-6452, 6453-6456 and 6457-58/
2005.

S. Guru Krishna Kumar and S.R. Setia for the Appellant in C.A. Nos.
6455-6456/2005.

K. Ramamoorthy, S. Vallinayagam and R. Ayyam Perumal for the
G Respondent.

The Judgment of the Court was delivered by

SRIKRISHNA, J. Leave granted in all the Special Leave Petitions.

H The issue of law to be decided in the present matter is: Whether an
CENTRAL ORGANISATION OFT AMIL NADU ELEC EMP v. TAMIL NADUELECT. BOARD [SRIKRISHNA,J] 4 13

establishment can modify pensions (and connected benefits) payable to A
employees without first changing the Regulations that govern those pensions?
In other words, can pensions be changed (particularly, when the change is to
the detriment of the employees concerned) without recourse to the proper
procedure prescribed for changing them?

This group of appeals by special leave raises the same issues of facts B
and law for a decision by this Court. Hence, they can all be dealt with by a
common judgment. For the sake of convenience, the facts shall be mentioned
from the appeal arising out of Special Leave Petition (Civil) Nos. 3759-3760/
04.

A Survey of the Facts
c
These appeals have been filed by a registered Trade Union, which
represents nearly 30,000 employees of the Tamil Nadu Electricity Board
("the Board"). Prior to l.7.57, the State of Tamil Nadu was departmentally
carrying on the work of distribution and supply of electric energy. On l.7.57, D
the Board was constituted by the State Government under Chapter III of the
Electricity (Supply) Act, 1948 ("the 1948 Act"). The employees of the Board
consisted of two different classes: (i) Employees who were already employed
by the State Government and were taken over into the service of the Board
upon its constitution; and (ii) Employees directly recruited by the Board after
its constitution. In exercise of its powers under Section 79(c) of the 1948 Act, E
the Board brought into force a set of regulations styled as the "Tamil Nadu
Electricity Board Liberalised Pension Regulations, 1960" (" 1960 Regulations")
with effect from 1.7.60. These Regulations dealt with the conditions of service
specifically pension and death-cum-retirement gratuity. Under Regulation 3
of the 1960 Regulations, the qualifying service for ·earning pension was a F
period of thirty years.

The 1960 Regulations also contained a Savings Clause incorporated in
Regulation 9, which reads as under:

9. SAVING
G
(i) No provision in the Civil Service Regulations shall, so far as it
is inconsistent with any of the provisions of these regulations
have any effect.
(ii) Save as otherwise provided in these regulations, the provisions
in these regulations, shall be in addition to and not in derogation H
414 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A of the provisions in the Civil Service Regulations as amended
. '· from time to time by the Government of Tamil Nadu."

The Board had its own Pension and Provident Fund Schemes, which,
in the opinion of the State of Tamil Nadu, gave to the employees benefits
which were on the whole not-less-favourable than the benefits provided under
B the Employees' Provident Fund Act, 1952 or the Employees Provident Fund
Scheme, 1952. Hence, the State Government by Government Order ("G.O.")
No. 988 (dated 13.7.70) exempted, under Section 17(l)(b) of the Employees'
Provident Fund Act, 1952, the establishment of the Board from the operation
of all the provisions of the Employees' Provident Fund Scheme, 1952 framed
C under the provisions of the Employees' Provident Fund Act, 1952. The
exemption was, however, subject to the conditions specified in the G.O.
itself.

Further; by Central Government notification dated 25 .6 .1986, exemption
under Section 17(14) of the Employees' Provident Funds and Miscellaneous
D Provisions Act, 1952, was granted from the operation of all the provisions of
the Employees' Family Pension Scheme, 1971 on the ground that the benefits
in the nature of Family Pension under the Tamil Nadu Electricity Board
Employees' Family Pension Regulations, 1964 ("Family Pension Regulations,
1964") were not-Jess-favourable than the benefits provided under the
Employees Family Pension Scheme, 1971. While granting this exemption, a
E specific condition was imposed by clause (4) enumerated to the Schedule to
the notification, which reads as under:

"(4) No amendment to the provision of the said regulations shall be
made without the prior approval of the Central Provident Fund
Commissioner and there (sic) any amendment is likely to affect
F adversely the interest of the employees of the Board the Central
Provident Fund Commissioner shall before giving his approval give
reasonable opportunity to the employees to explain their view-point."

Similar exemption was granted by the Central Government (by another
G notification dated 25.6.86) from the provisions of the Employees' Deposit
Linked Insurance Scheme, 1976, on the same ground (i.e. that the Board's
Family Benefits Subsidiary Scheme provided no-less-favourable benefits to
the employees), but again subject to a condition of a similar nature.

On 26,6.86, after the workers made representations, the Board passed
H a resolution (numbered B.P.Ms (F.B.) No. 5) by which it ordered that all the
CENTRAL ORGANISATION OFTAMIL NADU ELEC. EMP. •'. TAMIL NADU EL~CT. BOARD {SRIKRISHNA. J.] 4 J5

Regular Work Establishment Workmen retiring/ expiring on or after 1.7.86 A
would be governed by the pension scheme of the Board. On 17.2.95, the
Board passed a resolution (No. B.P. (F.B.) No. 7) which amended Regulation
9 of the 1960 Regulations. In the proceedings of the Board.it was pointed out
that, since the formation of the Board on 1.7.57 till the Board's 1960
Regulations came into force, the employees of the Board were governed only B
by the Civil Service Regulations with respect to quantum of pension, death-
cum-retirement gratuity etc. After the framing of the 1960 Regulations and
the Family Pension Regulations, 1964, the provisions.ofthe said Regulations'-
which were not incopsistent with the Civil Service Regulations were foil owed.
.. In addition, the provisions of the .Civil Service Regulations, with respect to
matters not specifically governed by the Board's regulations, were also C
applicable.

With a view to creating a complete Pension Code, the Tamil Nadu
Government framed the Tamil Nadu Pension Rules (brought into force with
effect from 18.7.76) and the Tamil Nadu Pension Rules; 1978 (brought into
force with effect from I. I. 79). These Rules replaced the Civil Service D
Regulations, Madras Liberalised Pension Rules, 1960 and the Tamil Nadu
Government Servants Family Pension Rules, 1964.

It has also been pointed out in the Board's Proceedings that the Board
having followed the Civil Service Regulations, in addition to the 1960
Regulations and the Family Pension Regulations, 1964, had.also been following E
the Tamil Nadu Pension Rules, and the Tamil Nadu Pension Rules; I 978 for
settling the terminal benefits of the retiring employees of the Board. It was
noted that the amendments made from time to time in the Tamil Nadu Pension
Rules and Tamil Nadu Pension Rules, 19'.8 were also being followed by the
Board in the· light of the saving provisions contained in Regulation 9 of the p
I960 Regulat.ions. The Board, "having considered the matter c~efully",
decided that it was necessary to amend Regulation 9·.Qflhe. 1960 ~gulations
"so as to follow the provisions of the Pension JWle~ ..of the' l)lfnil Nadu
Government" .. ·Towards this end, the Board decided'tO amend Rqulation 9
by exerdslng its powers under Section 79(c) ofthe.El~~tricity (~~p~ly) Act,
1948. Regulation 9 was amended by substituting a iiew. l'egulafioni:u under: G
"9 SAVING

(i) No provision in the Tamil Nadu Pension·Rules and.Tamil Nadu
Pension Rules, 1978, shall, so far as it is inconsistent with any
of the provisions of these regulations have any effect. H
416 SUPREME COURT REPORTS. [2005] SUPP. 4 S.C.R.

A (ii) Save as otherwise provided in these regulations, the provisions
in these regulations, shall be in addition to and not in derogation
of the provisions in the Tamil Nadu Pension Rules and Tamil
Nadu Pension Rules, 1978, as amended from time to time by the
Government of Tamil Nadu."

B These amendments were directed to take effect respectively from 18.7.76
and 1.1.79.

On 8.7.98, a Memorandum of Settlement under Section 18(1) of the
Industrial Disputes Act, 1947 was reached between the Board and its workmen.
Although the settlement pertained to several conditions of service, 1 we propose
C to examine only the most relevant clauses.

Clause 14 of the settlement provides that a settlement under Section
12(3) of the Industrial Disputes Act, 1947 would be secured immediately on
wage revision and on workload revision, after settlement of revisions of work
D norms. By Clause 17, the settlement was to be in force for a period of four
years with effect from 1.12.96. Despite this period having expired, we are
informed by the counsels on both sides that the settlement was not formally
terminated under Section 19(2) of the industrial Disputes Act, 1947. Clause
15 of the said settlement is of some importance and reads as under:

E "15. IT IS ALSO AGREED THAT:

(i) The contract Labourers in thermal stations will be paid wages
with effect from 1.4.1997 with reference to settlement dated
21.7.1997.-With effect from 16.4.1998 according to the orders of
the High Court in Writ Appeal No. 1373 of 19~3 will be
F implemented.
(ii) The contract labourers employed on daily wages in Distribution,
Generation and other Circles will be paid wages according to the
PWD schedule of rates with effect from 1.7 .1998.
(iii) The revised pension scheme of the Government of Tamil Nadu
G and any amendments there on from time to lime will be applied

'Clauses 1 to 13 in the Memorandum of Settlement covered the following topics: Revision of
Scales of Pay; Fixation of Pay in the Revised Scale; Minimum Benefit: Service Weightage
Dearness Allowance; House Rent Allowance; City Compensation Allowance; Allwoances and
Special Pays; Revised rates of House Rent Allowance; City Compensatory Allowance; Allowance
and special pays; Payment of Arre;rrs; Selection grade; Stagnation in promotion; Work norms
H and Staff Pattern etc.
CENTRAL ORGANISATION OFT AMIL NADU ELEC. EMP. '· TAMIL NADU ELECT. BOARD [SRJKRISHNA. J.j 4 J7

to the pensioners of the Tamil Nadu Electricity Board." A
(Emphasis supplied)

While the conditions of service of the employees of the Board remained
thus, G.O. No. 71 was issued by the Government of Tamil Nadu on 19.3.03,
which purported to revise downwards various benefits accorded to Government B
Servants. This was on the ground that pension payments and other benefits
had "reached a level far higher than any other State in India" and had,
therefore, become "fiscally unsustainable". Through the G.O., the State
Government directed that the maximum Qualifying service be enhanced to
thirty-three years from thirty years in order to become eligible for full pension
by Government Servants after retirement. It also directed through the said C
G.O. that pension would be determined on the basis of the average emoluments
drawn during the last ten months of service rendered only. TI:iese amendments
were directed to become operative in respect of Government servants retiring
on or after 1.4.03.

By another G.O. No. 74 dated 19.3.03, for identical reasons, the State D
Government directed that the maximum limit for commutation of portion of
pension by the pensioner would be 33 1/3% of pension only. This order also
took effect from 1.4.03.

Following the amendments made by the State Government to the Pension E
Rules, the Board by its Resolution B.P. (Ch) No. 64 (dated 31.3.03) brought
about corresponding changes in the rules of pension applicable to its
employees. This Board Proceeding is the crucial one and necessitates
reproduction in its entirety.

'Tamil Nadu Electricity Board F
Abstract

Pension-Qualifying Service for pension and calculation of pension
Revised orders-Issued.

SECRETARIAT BRANCH G
(Per.) B.P.(Ch) No. 64 Dated : 31st March, 2003
Chitrabanu, Panguni 17,
Thiruvalluvar Aandu 2034
Read.
H
418 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A (I) (Per) B.P.(CH) No. 253 (SB) dated 23.9.96.

(2) G.O. Ms. No. 71 Finance (Pension) Department,
dated 19.3.2003.

PROCEEDINGS:

B Jn the B.P. first cited orders have been issued reducing the
maximum qualifying service from 33 years to 30 years to become
. eligible for full pension by a Board employee after retkement. It has
·also been ordered therein that pension shall be detennined based on
50% of average emoluments drawn during the last 10 months service
c rendered or 50% of pay last drawn (sic) Board employee, whichever
is higher.

2. The Government have (sic) now issued orders in the Government
·order second cited enhancing the maximum qualifying service to 33
years from 30 years to become eligible for full pension by the
D Government Servants after retirement. The Government have (sic)
also ordered that Pension shall be determined based on the average
emoluments drawn during the last I0 months of service rendered
only.

3. The provisions in the Tamil Nadu Pension Rules 1978 have been
E made applicable to the employees of the Tamil Nadu Electrieity Board
also by an amendment to Regulation 9 of Tamil Nadu Electricity
Board Liberalised Pension Regulations 1960. It has, therefore, become
necessary to adopt the orders relating to Government Pensioners to
the pensioners of the Board. Adoption of Government orders in respect
of pensionery benefits does not attract the issue of notice under Section
F 9A of Industrial Dispute Act, 1947.

4. Based on the orders of the Governments mentioned in pani-2
above, the Tamil Nadu Electricity Board hereby directs that the
maximum qualifying service be enhanced to 33 years from 30 years
to become eligible for full pension by the Board employees after
G • retirement.

5. The Board also directs that pension shall be determined based on
the average emoluments drawn during the last 10 months of service
rendered only.

H 6. These orders. shall be applicable to Board employees retiring on or
..
CENTRAL ORGANISATION OF TAMlL NADU ELEC. EMP. '·TAMIL NADU ELECT. BOARD [SRIKRISHNA. J] 4 J9

after 1.4.2003. A
7. The receipt of the Board Proceedings may be acknowledged in slip
enclosed.

(By order of the Chairman)

· (G. Gnanaselvam)
B
Secretary.

To

c
. .
By a similar worded Board Resolutions B.P. (Ch) No. 65 (dated3 i.3.2003)
and B.P. (Ch) No. 66 (dated 31.3.2003), commutation level for pe!lSion was
substantially revised downwards.
D
The Proceedings in the High Court

The Appellant-Trade Union filed Writ Petition Nos. 11899, l 1900 and
11902/2003 before the High Court of Judicature at Madras challenging these
three orders (i.e. B.P. (Ch.) Nos.64-66) of the Board. It was contended by the
Trade Union that the Board being a Statutory Board was not required. to E
mechanically follow the G.O.s and, in any event, the action .of the Board
adversely affecting the pensions of employees was unfair, arbitrary and
unconstitutional.

Around the same time, similar writ petitions (W.P. No. l 122S/2003 .etc.)
were moved by Government servants (The Madras High Court Staff F
Association). These sought to impugn the changes brought about in their
pensionary conditions by G.O. Nos. 71 to 74. A Division Bench ofthe High
Court of Madras dismissed their Writ Petitions (through order dated 23.10.03).
A survey of th is judgment b.ecomes necessary because it is heavily relied
upon ·while
. . disposing
. off the present impugned
. judgment, :· G
·~ ,,. .

· The High Court in its order dated 23.i-0.03 held that the actionof the
Government in G.O. Nos. 71 to 74 was motiv.ated by financial constraints and
was, therefore, not arbitrary. It observed that the cut"off date of l.4:03 for the
revised pension package was not arbitrary since only the terminal benefits of
future retirees were being affected and that no accrued rights were affected. H
420 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A Moreover, the High Court held that the Government could alter the service
conditions of its employees in exercise of its powers under Article 309 of the
Constitution of India. However, the High Court set aside G.O. Nos. 72 and 73
by which the State Government increased the discount rate of commutation
of pension and curtailed the encashment of leave on retirement on the ground
that these were accrued rights which could not be prejudicially affected by
B the Government.

Now for the present impugned judgment. Following its own judgment
in W.P. No. 11228/2003 (dated 23.10.03) etc., the High Court of Madras decided
W.P. Nos. 11899, 11900 and 11902/2003 along with a batch of connected
C matters, 2 filed by a large number of employees through order dated 23. l 0,03
("the impugned judgment"). The impugned judgment held inter alia as under:

1. That the Settlement (dated 8.7.98) between the Board and its employees
provided for revised pension schemes of the Government to be applied to the
Board's pensioners and hence no prior notice under Section 9A of the Industrial
D Disputes Act, 194 7 was necessary.

2. Regulation 9 of the 1960 Regulations as amended by B.P. No. 7 (dated
17.12.95), provided for the adoption of the Pension Rules of the Government
as amended from time to time.

E 3. The Board's Service Regulation No.17 did not provide for payment
of pension and hence the qualifying service of 30 years mentioned therein
could not be relied upon.

4. Since G.0.Ms Nos. 71 and 74 have been upheld for Government
servants (vide Madras High Court order in W.P. No. 11228/2003 dated 23.10.03),
F B.P. Nos. 64 and 66, which rely upon them, are valid.

5. Since G.O. No. 73 enhancing the rate of commuted pension was set
aside (vide Madras High Court order in W.P. No. 11228/03 dated 23.10.03), B.P.
No. 65 based thereon was illegal.

G The Appellant-Trade Union is before this Court in appeal on behalf of
the employees of Tamil Nadu Electricity Board to challenge the impugned
judgment.

'The main matter being titled as: Bhaarathiya Electricity Employees Federation and Ors.
v. The Management Tamil Nadu Electricity Board and Ors., W.P.No. 10727/03 etc. (decided
H on 23.10.03).
CENTRAL ORGANISATION OF TAMIL NADU ELEC. EMP. \".TAMIL NADU ELECT. BOARD (SRJKRISHNA. J J 42}

The Facts in the Connected Special leave Petitions A
Civil Appeals arising out of S.L.P.(C) Nos. 4598-4599/04 are filed by the
Tamil Nadu Electricity Board Accounts and Executive Staff Union on behalf
of the Accounts and Executive staff who are aggrieved by the disposal of
their Writ Petitions Nos. 11565 and 11567 of 2003 by common order of the
High Court of Madras (dated 23.10.Q3 in W.P. 10727/03 etc). B
Civil Appeals arising out ofS.L.P.(C) Nos. 4750-4751/04 are filed by the
Trade Union representing the Tamil Nadu Electricity Board Stores Union
aggrieved by the dismissal of their Writ Petitions Nos. 11937 and 12372 of
2003 by common order of the High Court of Madras dated 23.10.03 in W.P. C
10727/03 etc.

Civil Appeals arising out of S.L.P.(C) Nos. 16305-16306/04 are filed by
the Tamil Nadu Electricity Workers Federation challenging the impugned
common judgment in dismissing their Writ Petitions Nos. 12349 and 12351 of
2003 by common order of the High Court of Madras dated 23.10.03 in W.P. D
10727/03 etc.

Civil Appeals arising out of S.L.P.(C) Nos. 8882-8883/04 are filed by the
Tamil Nadu Electricity Board Workers Progressive Union challenging the
impugned common judgment dated 23.10.03 in W.P. 10727/03 etc insofar as it
dismisses their Writ Petitions Nos. 11935 and 12370 of2003. E
The Contentions

Ms. Indira Jaising, learned Senior Counsel for the appellant-employees,
who le~ the arguments on behalf of the appellants, raised several contenti?ns,
arguing on construction of the regulations and the settlement, and on F
constitutional grounds.

Ms. Jaising's contention on the construction of the Regulation was that
the Board had reduced the pensionary benefits through executive orders
without amending 1960 Regulations, an action which Ms. Jaising contends is
ultra vires the powers of the Board. G
Turning to the Settlement (dated 8.7.98) between the Board and its
employees, she urged that Clause 15(iii) did not have the effect of rendering
the amendments to the pension scheme of the State Government employees
automatically applicable to the employees of the Board. Consequently, Ms.
H
422 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A Jaising contended that the only method by which the Board could have
adversely affected the pension regulations applicable to its employees was
by the process of formal amendment of its regulations, which admittedly has
not been done.

She further contended that Clause 15(iii) of the Settlement could not be
B treated as a waiver of the "fundamental rights" of the employees as there was
no conscious agreement discernible in the Settlement to reduce the pensionary
benefits. In her submission, the High Court erred in interpreting-Regulation
9(ii) of the 1960 Regulations as amended.

Ms. Jaising made two broad submissions on Constitutional grounds to
C question the action of the Board. Her first broad contention was with regard
to the legal nature of pensions. Relying on several authorities of this Court,
she contended that pension is an accrued right, which could not be taken
away, that too by a mere executive action such as a resolution of the
Respondent-Board. She also contended that pension is in the nature of
D property and it cannot be taken away except by procedure established by law
as provided under Article 300A consistent with Article 14 of the Constitution
of India.

Ms. Jaising's second broad contention was that the action of the Board
was "unreasonable" and hence violative of Article 14. Relying upon a judgment
E of this Court in D. S. Nakara and Ors. v. Union of India, 3 ("Nakara") she
contended that the revision of the formula of the rate of pension in the
existing scheme makes an invidious distinction between those retired before
or after the cut-off date resulting in unequal treatment being meted out to the
two groups.
F Mr. Ramamoorthy, learned Senior Counsel appearing for the Board
attempted to sustain the impugned judgment by advancing the reasoning of
the High Court.

Principle of Waiver and the Settlement

G In our view, Clause 15(iii) of the Settlement (dated 8.7.98) merely mollifies
the rigour of requirement of advance notice of 15 days under Section 9A of
the Industrial Disputes Act, 1947. Ms. Jaising contended that the conditions
of service once settled can never be changed except by being substituted by

H '[1983] I S.C.C. 305.
CENTRAL ORGANISATION OFT AMIL NADU ELEC. EMP. v. TAMIL NADU ELECT. BOARD (SRIKRJSHNA. J.j 423

a fresh settlement or award. This may be true with regard to conditions of A
service, which have been settled by a binding settlement/ award. With regard
to matters which are in the realm of virgin territory, we are afraid that this may
not be the rule. In fact, we called upon Ms. Jaising to show as to which
provision of the Industrial Disputes Act, other than Section 9A, prohibits the
change by an employer of a condition of service that it was not brought about B
by a settlement or award. No such provision was cited before us.

We are, hence, unable to accept the contention of Ms. Jaising that the
Board could not have changed, by executive action, even those conditions
of service that were not the subject matter of regulations, a settlement or an
award. In our judgment, Clause 15(iii) of the Settlement merely operates to C
exempt the employer (the Board) from giving a notice under Section 9A of the
Industrial Disputes Act, 194 7.

It was not pleaded by the Board before the High Court, nor was it so
held by the High Court in the impugned judgment, that there was any waiver
of rights generally by reason of the said clause in the said Settlement. Neither D
we are inclined to accept such an argument, nor did the learned counsel for
the Board advance any such argument before us. The argument with reference
to the principle of waiver is, therefore, wholly irrelevant and need not detain
us. This takes us to the interpretation of Regulation 9 of the 1960 Regulations
and its true import.
E
The 1960 Pension Regulations

This case really turns on the interpretation of the pension regulations,
particularly Regulation 9 of the 1960 Regulations. In considering the import
of Regulation 9 of the 1960 Regulations (amended on 17.2.95} a historical
overview is crucial. After the constitution of the Board in the year 1957, a set F
of employees, erstwhile State Government's servants were taken over in the
employment of the Board. They were governed by the Civil Service Regulations
inter a/ia with regard to their pensionary benefits.

Thus, when the 1960 Regulations were brought into force on 1.7.60, the G
Board had in its employment the erstwhile Tamil Nadu Government servants
as well as employees directly recruited by it A saving clause was necessary
in order to ensure that the erstwhile Tamil Nadu Government servants (who
were taken over into the service of the Board) were not adversely affected
by framing of the Regulations. Consequently, a Saving Clause was introduced,
vide Regulation 9. H
424 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.
_.
A This saving clause (as it stood before the amendment of 17.2.95) was
in two parts. Clause (i) ensured that no provision in the Civil Service Regulations
to the extent of its inconsistency with any of the provisions of the 1960
Regulations would have any effect. This was obviously intended to ensure
that whatever better benefits were available to the employees of the Board
would be protected even if the Civil Service Regulations were inconsistent
B with the Board's Regulations.

Clause (ii) specifically provided that the provisions made in the
Regulations would be in addition to and not in derogation of the provisions
in the Civil Service Regulations as amended from time to time by the
C Government of Tamil Nadu. The import of this clause was that, except as
otherwise provided in the 1960 Regulations, with regard to matters not covered
by the Civil Service Regulations, the 1960 Regulations would have to be read
additionally and not so as to derogate from the Civil Service Regulations. In
other words, the intention declared by clause (ii) is that the persons covered
by the Civil Service Regulations would be entitled to the benefits thereunder
D and also to the benefits flowing from the 1960 Regulations.

In 1995, however, the Board proposed to amend Regulation 9 as it
stood. The preambulatory portion in the Board Proceedings (B.P. (FB) No. 7
dated 17.2.95) clearly sets forth the reasons, which motivated the Board to
amend Regulation 9. This became necessary, because in the period after the
E 1960 regulations were first operative, the State Government had replaced the
then existent Civil Service Regulations with the Tamil Nadu Pension Rules and
Tamil Nadu Pension Rules, 1978. Correspondingly, by the 1995 amendment,
the expression "Civil Service Regulations" in Regulation 9 was replaced by
"Tamil Nadu Pension Rules" and "Tamil Nadu Pension Rules, 1978". Regulation
F 9(ii) was also amended on the same lines. However, there were no other
changes either formal or substantive in Regulation 9. The amended Regulation
9 took effect from the dates on which the Tamil Nadu Pension Rules and Tamil
Nadu Pension Rules, 1978 were brought into force (i.e. 18.7.76 and 1.1.79
respectively).

G In our view, the amended Regulation 9 only makes explicit with reference
to the Tamil Nadu Pension Rules and Tamil Nadu Pension Rules, 1978 what
was already provided for in the unamended Regulation 9, which referred to
the Civil Service Regulations. A reading of the Board Proceeding (B.P. (FB)
No. 7 dated 17.2.95) makes it clear that since the formation of the Board on
H I. 7.57 till the 1960 Regulations came into force, the employees of the Board
CENTRAL ORGANISATION OFT AMIL NADU ELK EMP. '·TAMIL NADU ELECT. BOARD [SRIKRISHNA.J.J 425

were governed only by the provisions of the Civil Service Regulations inter A
alia with respect to quantum of pension, death-cum-retirement gratuity. After
the Board framed its 1960 Regulations and the Family Pension Regulations,
1964, the provisions of these Regulations, which were not inconsistent with
the Civil Service Regulations, were followed "in addition to the provisions of
the Civil Service Regulations with respect to matters not specifically governed B
by the Board's Regulations."

The said Board Proceedings also make it clear that once the Civil
Service Regulations were replaced by the Tamil Nadu Pension Rules and Tamil
Nadu Pension Rules, 1978, those were followed for settling the terminal
benefits of retiring employees of the Board. Similarly, according to the Board C
Proceedings, the amendments made from time to time in the aforesaid Rules
of the State Government were also being applied to the retiring employees of
the Board "in the light of the saving provision contained in Regulation 9 of
the 1960 Regulations." As we have previously discussed, the Board
Proceedings indicate that the 1995 amendment to Regulation 9 was only
intended to take into account the State Government's action of replacing the D
Civil Service Regulations with the Tamil Nadu Pension Rules and Tamil Nadu
Pension Rules, 1978.

The real question before us is: whether the Board could have followed
the State Government's pension amendments by merely changing Regulation
9. It appears to us that the decision taken by the Board to amend its own E
pension rules and bring it in line with those applicable to the Government's
servants was per se unexceptionable; however, this could not have been
achieved by a mere amendment in Regulation 9 as seems to have prevailed
in the opinion of the Board.
F
Ms. Jaising is right in her contention that the purpose and purport of
Regulation 9 was to ensure, firstly, that the State Government employees
taken over in the service of the Board were not prejudiced with regard to their
conditions of service, particularly pension and death-cum-retirement gratuity.
Secondly, the saving clause ensures that with regard to matters which were
not covered by the State Government rules but covered by the Board's G
Regulations, the benefit covered under the Board Regulations would be in
addition to and not in derogation of what was already available in the Civil
Service Regulations. It was open to the Board in exercise of its statutory
powers under Section 79(c) of the Electricity (Supply) Act, 1948 to amend its
pension regulations in such manner as to bring it precisely in line with the H
426 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.~.

A Tamil Nadu Government Rules with regard to pension and other benefits as
applicable to the St~te Government employees. Instead of expressly amending
. the Regulations, the Board appears to have fallen back on Regulation 9, which
was merely a saving clause intended to insulate the employees against erosion
of their benefits granted in the provisions.

B Whether such an amendment could have been successfully challenged
on its substantive merits is not a question with which we are concerned. We
are only concerned with whether the Board could have straightaway imported
wholesale the provisions of the pension rules applicable to the State
Government employees via the vehicle of the saving clause, Regulation 9. Our
C answer to this issue is clearly in the negative because such a possibility is
evidently absent in the text of the said Regulation. For this reason, we are
of the view that.the conditions of service pertaining to pension that were
already the subject matter of the Regulations could not have been changed
by the Board without amending the Regulations_in accordance with law.

D Quantifying and Qualifying for Pensions
As under Regulation 3 of the 1960 Regulations, the qualifying service
for full pension was initially prescribed as thirty years. It was only by Board
Proceedings B.P.(Ch) No. 64 (dated 31.3.03) that the maximum qualifying
service for pension was increased from thirty years to thirty-three years. By
E the same Board's Proceedings, the pension was made relatable to the average
emoluments drawn during the last ten months service instead of the last
drawn pay. These two aspects were the subject matters of the 1960 Regulations
and, therefore, by a Board Proceeding, without amending the Regulations,
they could not have been modified to the prejudice of the employees. B.P.(Ch)
F No. 64 (dated "31.3.03) is, therefore, bad in law and illegal inasmuch as it
purports to bring about adverse changes in the quantification of pensions
and the qualifying period of service for pensions.

Commutation of Pension

G We need to, however, draw a distinction between two different situations
which have arisen, namely: (i) an attempt by the Board to withdraw certain
benefits granted by a decision of the Board (without amending the applicable
regulations) by another Board decision, (ii) the other situation is where a
benefit granted under the 1960 Regulations was sought to be taken away by
a Board's decision (without amending the applicable regulations). As have
H seen in the previous situations discussed, the latter is clearly impermissible.
CENTRAL ORGANISATION OF TAMIL NADU ELEC. EMP. '· TAMIL NADU ELECT. BOARD [SRJKRJSHNA,J.] 427

We, however, need to consider the fonner issue. A
A change brought about by the Board that has also been impugned is
with regard to the decrease in the maximum pennissible commutation of
pension from 40% to 33 1/3% by following G.O. No. 74 (dated 19.3.03) issued
by the Government of Tamil Nadu. As far as this change is concerned, it
would appear that Regulation 7 as framed in 1960 permitted a maximum B
commutation of one-third. By a Board Proceeding B.P.(Ch) No. 208 (dated
18.8.98), the commutation percentage was increased to 40%. This has now
been reduced to 33 1/3% by another Board Proceeding B.P. (Ch) No. 66 (dated
31.3.03). In other words, what was granted by a Board Proceeding, without
amending the Regulations, is sought to be taken away by another Board C
Proceeding with a view to following G.O.Ms. No. 74 (dated 19.3.03) issued by
the State Government in respect of its own employees. As far as this change
is concerned, the argument of not following the proper procedure (i.e. amending
the Regulations) does not apply. In fact, the change made by B.P.(Ch) No. 66
(dated 31.3.03) actually brings the level of commutation to what was originally
given by the 1960 Regulations. In our view, what was granted by a mere Board D
Proceeding could be validly altered by another Board Proceeding..Therefore,
the challenge to the change in the commutation percentage brought about by
B.P.(Ch) No. 66 fails by the same token.

Ms. Jaising further contended that, with regard to the reduction in the
percentage of maximum commutation of pension, the employees who were E
covered by the provisions of the Industrial Disputes Act, 194 7 would be
entitled to raise an industrial dispute, and have it adjudicated according to
law. She also submitted that, if this Court were to hold against the employees
on the point of commutation of pension, some ti!11e may be pennitted to the
employees to raise an industrial dispute with regard to the change. Considering p
that the change is likely to have an impact on a large number of employees
of the Board, we are inclined to give reasonable time to the employees to raise
an industrial dispute before the change impacts them.

The Constitutional Grounds
G
Turning to Ms. Jaising's first argument on constitutional grounds, it
appears to us that even if pension is "property", all that Article 300A provides
is that: "No person shall be deprived of his property save by authority of
law." Thus, if deprivation of the pensionary benefits was by "authority of
law" then nothing survives in this contention. We have already examined in
depth whether the Board has acted with the "authority of law" i.e. whether H
428 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A it has followed the prescribed procedure in bringing about the changes in the
pensionary benefits, and we have held accordingly. Thus, this contention
need not be examined any further.

As to Ms. Jaising's contention that the Board's actions violate Article
14 of the Constitution and the ratio in Nakara, we would have had to pursue
B this contention only if we had not been able to decide the case on narrow
interpretational grounds as we have already done. Ms. Jaising, however,
contended that if we did not decide on the broader constitutional ground
argued by her there would be multiplicity of litigation on the same issue. We
do not agree. In fact, at the present stage the argument of multiplicity of
C litigation is only speculative since we cannot predict what future course the
Board or the employees will adopt. Further, even if multiple litigations were
a possibility that should not compel us to opine on every ground argued
before us, especially those involving constitutional issues. In this context, we
are reminded of a famous exchange in the U.S. Supreme Court between Justice
Frankfurter and the Counsel:'
D
" ... Mr. Arnold pleaded with the Court that he would not like to win
the case on the narrow procedural, statutory ground to which a
majority of the members of the bench was evidently inclining.
Responded Mr. Justice Frankfurter: "The question is not whether you
want to win ihe case on that ground or not. This Court reaches
E constitutional issues last, not first." He might well have quoted Mr.
Justice Brandeis's famous assertion that the " ... most important thing
we do is not doing.""

This is precisely the principle, which we intend to adopt. This Court
F must be parsimonious on the grounds on which it chooses to decide a
particular case. If a case can be decided upon any ground other than
constitutional grounds, such as by statutory construction or the like, this
Court must do so. Despite the characteristic acuity with which Ms. Jaising
argued the constitutional grounds, in our opinion, they are not ripe for
adjudication, as we have been able to decide the matter on other narrower
G grounds. Where a paring knife suffices, a battle axe is precluded.

'See Henry J. Abraham, The Judicial Process: An Introductory Analysis of the Courts of the
United States, England. And France (3d ed. 1975) at pJ71 where this exchanges is mentioned
H in its enitrety.
CENTRAL ORGANISATION OFTAMIL"NADU ELEC. EMP." TAMIL NADU ELECT BOARD [SRIKRISHNA, J.] 429

The Final Conclusions A
In the result we hold as under:

I. The change brought about in the qualifying service for full pension
by increasing it from thirty years to thirty-three years by B.P.(Ch)
No. 64 (dated 31.3.03) is liable to be interfered with as it has been B
done without amendment to the 1960 Regulations.

2. The change brought about by B.P.(Ch) No. 64 (dated 31.3.03)
linking the pension to the average emoluments of the last ten
months before retirement without amendment of the 1960
Regulations is bad in law. C
The reduction in the maximum permissible commutation of pension
from 40% to 33 113% brought about by B.P.(Ch) No. 66 (dated
31.03.03), without amendment of the 1960 Regulations is not
liable to be interfered with.
D
4. On the issue of whether the Board can adversely modify the
pensions payable even after following the prescribed procedure
(i.e. after amending the applicable pension regulations) and
whether such change would be violative of Article 14 or the ratio
in Nakara we express no opinion whatsoever, as it is unnecessary E
in the light of our findings above.

We, therefore, partly allow the appeals and interfere with the impugned
judgment of the High Court insofar as issues one and two are concerned and
set aside the action of the Board on the aforesaid issues. This shall be
without prejudice to the powers of the Board to bring about the changes after F
proper amendment of the 1960 Regulations and also without prejudice to the
rights of the employees to challenge such amendments on any permissible
ground (including on the grounds we have chosen not to express our opinions
upon).

The impugned High Court judgment, insofar as it upholds the reduction G
of the maximum permissible commutation from 40% to 33 1/3% is not interfered
with without prejudice to the rights of the employees to raise an industrial
dispute.

We are informed that during the pendency of the writ petitions before
H
430 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A the High Court there was a stay operating in favour of the employees as a
re~ult of which service conditions that were under challenge were not pennitted
to be amended. There was also an interim stay of Board Proceedings Nos. 64
and 66 (dated 31.3.03) granted by this Court on 8.3.04 which has continued
till today. In the circumstances.. we extend the stay in respect of Board
Proceeding B.P.(Ch) No. 66 (dated 31.3.2003) for a period of eight weeks to
B enable the employees to raise an industrial dispute for adjudication, if so
advised.

The appeals are allowed in the aforesaid terms. No costs.

N.J. Appeals allowed.