THE STATE OF TRIPURA & ORSversusSMT. ANJANA BHATTACHARJEE & ORS.

14                      [2022]REPORTS
              SUPREME COURT    11 S.C.R. 14               [2022] 11 S.C.R.


A                    THE STATE OF TRIPURA & ORS.
                                       v.
                SMT. ANJANA BHATTACHARJEE & ORS.
                        (Civil Appeal No. 5114 of 2022)
B                             AUGUST 24, 2022
              [M. R. SHAH AND B. V. NAGARATHNA, JJ.]
            Tripura State Civil Services (Revised Pension) Rules, 2009 –
     rule 3(3) – Constitution of India – Art. 14 – Writ Petition was filed
     before the High Court challenging the Rule 3(3) of Pension Rules,
C
     2009 – Rule 3(3) provides “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…but financial computation will be
     admissible from 1st January 2009…” - It was the case on behalf of
D    the 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 – 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 – Before the High Court, it was the specific
     case on behalf of the State that because of heavy financial burden
E
     and there being financial constraints, the State is not in a position
     to bear the heavy burden of additional revised pension – On appeal,
     held: 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
F    doubt the same – Financial constraint can be a valid ground for
     fixation of cut-off date for grant of benefit of increased quantum of
     death-cum-retirement gratuity – Fixing of a cut-off 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 – In the instant case, the cut-off date has been fixed
G
     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.

H
                                      14
      THE STATE OF TRIPURA & ORS. v. SMT. ANJANA                          15
               BHATTACHARJEE & ORS.

      Allowing the appeal, the Court                                      A
       HELD: 1. 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               B
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 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    C
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.
However, without giving any cogent reasons, the High Court has
observed that the foundation i.e., the financial crunch has not           D
satisfied the Court at all 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           E
Government. From the affidavit filed before the High Court
reproduced hereinabove, this Court is 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           F
benefit of revision of pension actually from 01.01.2009, which was
based on their financial crunch/financial constraint. Whether the
financial crunch/financial constraint due to additional financial
burden can be a valid ground to fix a cut-off 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            G
Nath Goyal. In the aforesaid decision, it is observed and held by
this Court that financial constraint can be a valid ground for fixation
of cut-off date for grant of benefit of increased quantum of
death-cum-retirement gratuity. While applying the law laid down
by this Court in the aforesaid decisions to the facts of the case on      H
16             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A    hand, this Court is of the opinion that in the instant case, the
     cut-off 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.
     [Paras 5 & 6][20-D-F; 21-G-H; 22-E-H; 24-D]
B
             State of Punjab and Ors. v. Amar Nath Goyal and Ors.
             (2005) 6 SCC 754 : [2005] 2 Suppl. SCR 549 - relied
             on.
             State of Bihar and Ors. v. Bihar Pensioners Samaj (2006)
C            5 SCC 65 : [2006] 5 JT 131; State of Punjab v. Boota
             Singh (2000) 3 SCC 733; State of Punjab v. J.L. Gupta
             (2000) 3 SCC 736 : [2000] 1 SCR 903 - referred to.
                                 Case Law Reference
     [2005] 2 Suppl. SCR 549                relied on           Para 3.3
D
     [2000] 1 SCR 903                       referred to         Para 5.4
             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5114 of
     2022.
            From the Judgment and Order dated 31.10.2017 of the High Court
E    of Tripura, Agartala in Writ Petition (C) No. 494 of 2012.
             Shuvodeep Roy, Arnav Singh Deo, Advs. for the Appellants.
             Ravinder Agarwal, Lekh Raj Singh, Advs. for the Respondents.
             The Judgment of the Court was delivered by
F            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
G    Pension) Rules, 2009 (hereinafter referred to as the Pension Rules, 2009)
     and consequently has directed to pay the original writ petitioner the arrears
     of pension for the period from 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
H    under: -
       THE STATE OF TRIPURA & ORS. v. SMT. ANJANA                            17
         BHATTACHARJEE & ORS. [M. R. SHAH, J.]

       2.1 That the State of Tripura has enacted/framed the Tripura State    A
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: -
                                                                             B
      “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        C
      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 6 th Central Pay               D
Commission’s recommendations, the State of Tripura issued a notification
dated 02.02.2010 and introduced revised pay structure with 2 Band Pay
Rs. 15600-39100 and 37400-67000 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    E
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 time-to-time 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.                             F

       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,         G
whichever is later.
      2.4 That respondent No. 1 herein – original writ petitioner retired
as Reader-cum-Vice Principal on 28.02.2007 upon attaining age of
superannuation. Her pension was computed at Rs. 9,150/- based on her
                                                                             H
18             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A    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
B
     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
C    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.
            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
D    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
E    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
F    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 from 01.01.2006 to
     31.12.2008 and to grant the actual benefit of the revised pension from
G    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
H
       THE STATE OF TRIPURA & ORS. v. SMT. ANJANA                                 19
         BHATTACHARJEE & ORS. [M. R. SHAH, J.]

varying, modifying, or annulling it, based on however sound and good              A
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               B
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. 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             C
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           D
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             E
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 precluded from interfering with the policy              F
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      G
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.

                                                                                  H
20             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A           3.3 It is further submitted that the financial burden on the State
     can be a valid ground to fix a cut-off 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.
B
            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.
C
            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
D    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
E    therefore, the State formulated a policy decision to the effect that the
     revised pension shall be paid from 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
F    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
G          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 28-02-2007 so her
           revised pension upto 31- 12-2008 was computed notionally. The
           claim of the petitioner is to allow her arrears of pension as per
H          revised rates for the period from 01-03-2007 to 31-12- 2008. It is
       THE STATE OF TRIPURA & ORS. v. SMT. ANJANA                               21
         BHATTACHARJEE & ORS. [M. R. SHAH, J.]

      a fact that Financial condition of the State has been passing through     A
      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 Non-Plan
      expenditure. The funding by the Central Government is based on
      the recommendations of the Finance Commission. Finance
                                                                                B
      Commission under estimated State’s projections of Non-plan
      revenue expenditure which included salaries, pension and interest
      payment (Non-Flexible 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                C
      assessed a cumulative expenditure of Rs. 2779.09 crores which
      was Rs. 1165.70 less than the actual assessment by the State
      Government. 12th Finance Commission calculated pension at Rs.
      342.01 crores during the year 2008-09 and Rs. 413.83 crores during
      the year 2009-10. This is an increase of approximately 9% over
                                                                                D
      2007-08 and 21% over 2008-09. However, as per actual
      implication, the expenditure during 2008-09 and 2009-10 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 Non-Plan             E
      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 01-01-2009. All other cases of
      retirement falling within 01-01-2006 to 31-12-2008 were allowed
                                                                                F
      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        G
      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: -                                                         H
22             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A          “[12] We have thoroughly scrutinized the foundation as projected
           by the state-respondents 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
B
           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 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
C          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
D
           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
E    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
F    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.
G           5.3 Whether the financial crunch/financial constraint due to
     additional financial burden can be a valid ground to fix a cut-off 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
H
       THE STATE OF TRIPURA & ORS. v. SMT. ANJANA                               23
         BHATTACHARJEE & ORS. [M. R. SHAH, J.]

cut-off date for grant of benefit of increased quantum of death-cum-            A
retirement 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           B
      or die on or after 1-4-1995, 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.
                                                                                C
                 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             D
      (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 a cut-off date. In our opinion, it
      cannot be said that this cut-off date was fixed arbitrarily or without    E
      any reason. The High Court was clearly in error in allowing the
      writ 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 (emphasis
      supplied).]
      33. More recently, in Veerasamy [(1999) 3 SCC 414 : 1999 SCC              F
      (L&S) 717] this Court observed that, financial constraints could
      be a valid ground for introducing a cut-off 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 1-7-1986, and
      those who were in employment on the said date. It was held that           G
      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                   H
24              SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A    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),
B    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 introducing a cut-off 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 cut-off date for granting of benefits is well within
     the powers of the Government as long as the reasons therefor are not
C    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 cut-off date has been fixed as 01.01.2009
     on a very valid ground i.e., financial constraint. Therefore, the High
D    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,
E    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 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
F    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.


G    Ankit Gyan                                                     Appeal allowed.
     (Assisted by : Rahul Rathi, LCRA)




H