Holding

The Court referred the questions concerning the applicability of G.O. No.87, 1998 to pre‑cut‑off pensioners and the need for amendment of the 1980 Rules to a larger Bench for resolution.

Summary

The petitioners, a group of Andhra Pradesh pensioners, sought to have their pensions re‑fixed under Government Order No.87 dated 25 May 1998, which changed the basis of pension calculation to the last drawn salary. They argued that the revision should apply retroactively to their dates of retirement, even though they retired before the order’s cut‑off date. The State Government contended that the new formula only applied to retirees on or after 25 May 1998 and that it could set a cut‑off date without judicial interference. The High Court upheld the Tribunal’s view that pensioners were entitled to re‑fixation but not to arrears prior to the order, and the State Government appealed. The Supreme Court noted conflicting precedents on whether post‑retirement pension enhancements apply to earlier retirees and whether the 1980 Rules required formal amendment, and therefore referred the matter to a larger Bench for clarification.

Issues considered

Whether pensioners who retired before 25 May 1998 are entitled to re‑fixation of pension under G.O. No.87, 1998.
Whether such re‑fixation can be made retroactive to the date of retirement, entitling them to arrears.
Whether the A.P. Revised Pension Rules, 1980 need a formal amendment to give effect to G.O. No.87, 1998.
Whether the State Government’s power to fix a cut‑off date is beyond judicial review.
Resolution of apparent conflict among precedents (D.S. Nakara, V. Kasturi, T.N. Electricity Board, State of West Bengal).

Subjects

pensionrevisioncut‑off dateretroactive benefitadministrative lawservice lawlarger benchgovernment orderpension enhancementstatutory interpretation

Judgment

·.)
!

~f-
THE PRINCIPAL SECRETARY TO GOVERNMENT FINANCE & A
PLANNING DEPARTMENT
v.
A.P. PENSIONERS SAMAJ AND ORS.

JANUARY 31, 2007
B
[S.B. SINHA AND MARKANDEY KA TJU, JJ.]

Service Law:

Pension-Revision of-Cut off date-Enhancement of pension from a c
specified date-Refixation of pension-Whether to be effective from the
specified date or from the earlier date from which the pensioner was getting
the pension-Whether any formal amendment to A.P. Revised Pension Rules,
1980 was necessary consequent to issuance of A.P. G.O.Ms. No. 87, Finance
dated 25.5.1998, if the retired employees wanted to get benefit of the said D
G.0.-There being conflict in decisions, matter referred to larger Bench-
A.P. Revised Pension Rules, I 980-G. 0. Ms: No. 87, Finance dated 2 5. 5. 1998.

D.S. Nakara v. Union ofIndia, (1983) 1SCC305; V. Kasturiv. Managing
Director, State Bank of India, Bombay and Anr., (1998) 8 SCC 30; T.N
Electricity Board v. R. Veerasamy and Ors., (1999) 3 SCC 414; and State of E
West Bengal and Anr. v. West Bengal Govt. Pensioners' Associations and Ors.,
(2002) 2 sec 179, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5367-5368 of
2005.
'( F
From the Final Common Judgment and Order dated 23.12.2003 of the
High Court of Judicature, Andhra Pradesh at Hyderabad in W.P. Nos.16719
and 18490/2003.

H.S. Guru Raja Rao, D. Bharathi Reddy, P. Vinay Kumar and Sneha
Bhaskaran for the Appellant. G

-· R. Sundaravaradan, R.N. Keshw!ll)i, Ramlal Roy, Chava Badri Nath Basu,
· C.M. Angadi, K.P. Singh and Bimal Roy Jad for the Respondents.

The Order of the Court was delivered by
37 H
38 SUPREME COURT REPORTS (2007] 2 S. C.R.

A These appeals have been filed .against the impugned judgment dated
23.12.2003 of the Andhra Pradesh High Court in Writ Petition Nos. 16719 and
18490of2003.

The respondents in this appeal had filed O.As before the Andhra
Pradesh Administrative Tribunal seeking a direction to the State Government
B to extend the benefits of G.O.Ms. No.87, Finance & Planning (FW.Pen. I)
Department, dated 25.5.1998 to all the pensioners irrespective of their date of
retirement and also to compensate the loss sustained by the applicants. It
was contended therein that the pension was calculated on the basis of ten
months average pay and the petitioners have been getting the said pension
C ever since the date of their retirement. However, the Government issued
G.0.Ms. No.87 dated 25.5.1998 revising the fixation of pension on the basis
of the last drawn pay treating it as emoluments for the purpose of pension.
Hence, it was contended that their pensions had to be re-fixed in terms of
G.0.Ms. No.87 dated 25.5.1998 and the same should be released from the date
of their respective retirements. The Tribunal by its order held that though
D the pensioners are entitled for re-fixation of their pension in terms of G.O.
Ms.No.87 dated 25.5 .1998 they were not eligible for any arrears that accrued
prior to 25.5.1998. The said order was challenged by the State Government
in the Writ Petitions.

The State Government contended that the revised fixation of pension
E on the basis of last drawn pay was applicable to those pensioners who retired
on or after 25.5.1998 and it cannot be made applicable to the persons who
retired prior to that date and that the Government has power to fix a cut off
date, which cannot be interfered with by the Court. Learned counsel for the
State Government referred to several decisions of this Court in support of his·
p contention.
'•
The High Court dismissed the writ petition of the State Government and
held that the pensioners who were already drawing the pensions cannot be
denied the revision of pension on the basis of the revised formula. Thus, the
High Court upheld the order of the Tribunal, including the direction that the
G pensioners cannot claim any arrears from a date anterior date to the G.O.
25.5.1998. Aggrieved, this appeal has been filed.

We have heard the learned counsel for the parties and perused the
various decisions cited before us.

H A Constitution Bench of this Court in D.S. Nakara v. Union of India,
PRINCIPAL SECRETARY TO GOVERNMENT FINANCE & PLANNING DEPARTMENT v. A.P. PENSIONERS SAMAJ 39

[1983) 1 sec 305 has held that the employees who retired before coming into A
operation of a pension scheme were also entitled to the benefit of the said
pension scheme.

However in V. Kasturi v. Managing Director, State Bank of India,
Bombay and Anr., [ 1998) 8 SCC 30, the aforesaid decision was distinguished,
and it was held (vide paragraphs 22 and 23) that if an employee was already B
getting some pension at the time of his retirement then he would become
eligible to get enhanced pension, if such enhancement in the pension is made
by an amendment to the pension scheme subsequent to his retirement.
However, if the retired employee was not getting any pension at all when he
retired, he would not be entitled to any pension if a pension scheme is C
introduced subsequent to his retirement.

Some subsequent decisions of this Court seem to have struck a different
note wherein it appears to have been held that even if a retired employee was
getting some pension at the time of his retirement, he will not get the benefit
of any enhancement in the pension subsequent to his retirement vide T.N. D
Electricity Board v. R. Veerasamy and Ors., [1999) 3 SCC 414, State of West
Bengal and Anr. v. West Bengal Govt. Pensioners' Associations and Ors.,
_,_ (200212 sec I79.

In view of apparent conflict in these decisions, we are of the opinion
that the matter requires consideration by a larger Bench of this Court. Another E
point which requires consideration by a ·larger Bench is whether any formal
amendment to the A.P. Revised Pension Rule, 1980 was necessary, consequent
to issue of the orders issued in G.O.Ms. No.87, Finance, dated 25.5.1998, if
the retired employees wanted to get the benefit of the latter.

Let the papers of this case be placed before the Chief Justice for the F
constitution of the larger Bench.

RP. Referred to the large Bench.

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