Supreme Court of India

UNION OF INDIA AND ORS.versusB. RAMA MURTHY

Citation: 1995 INSC 79
Decided: 27 January 1995
Disposal: Appeal(s) allowed
Bench: K RAMASWAMYB L HANSARIA

Holding

The Office Memorandum is valid, does not infringe Article 14, and the classification of pensioners is not invidious; the appeal is allowed.

Summary

The Government of India issued Office Memorandum No. 18(4)-EV/79 on 25 May 1979, which stipulated that half of the dearness allowance should be treated as pensionable pay, changing the pension calculation from 3/10 to 5/10 of the ten‑month average salary. B. Rama Murthy challenged the memorandum before the Central Administrative Tribunal, alleging that it violated Article 14 of the Constitution by discriminating between pensioners who retired at different times. The Tribunal held the memorandum ultra vires and struck it down. On appeal, the Supreme Court examined precedents such as State of Rajasthan v. Seva Nivatra Karamchari Hitkari Samiti and held that the memorandum was not arbitrary, did not create invidious discrimination, and was actually more beneficial to retirees. Consequently, the Court set aside the Tribunal’s decision and allowed the appeal.

Issues considered

Whether the Office Memorandum treating half of dearness pay as pensionable pay violates Article 14 of the Constitution.
Whether the classification of pensioners based on their retirement dates amounts to invidious discrimination.
Whether the Office Memorandum is ultra vires the statutory framework governing pension computation.

Legislation cited

Constitution of Indias. Article 14

Subjects

Service lawPension computationDearness allowanceArticle 14Classification of pensionersInvidious discriminationCentral Administrative TribunalOffice Memorandum

Judgment

UNION OF INDIA AND ORS. A
v.
B. RAMA MURTHY

JANUARY 27, 1995

[K. RAMASWAMY AND B.L. HANSARIA, J.T.) B

Service Law-Compztt{ltion of half of the deamess pay for computation
of pension-No invidious discrimination in the classification of pen-
sioners-Office memorandum more beneficial to the retired employees.

Government of India's Office Memorandum which treated half of the
c
dearness pay as pay to compute retirement benefits was challenged by the
respondent. The Central Administrative Tribunal declared it to be ultra
vires as offending Article 14 of the Constitution.

> Before the O.M. 3/lOths of the 10 months average pay was computed D
-1 for pension but after the O.M. the computation was 5/lOths.

Allowing the appeal filed against the Tribunal's order, this Court

HELD : There is no invidious discrimination in the classification of
the pensioners who retired at different dates and in computation of the E
pension for different periods. O.M. is more beneficial to the retired
employees. [666-G·H]

~1 State of Rajasthan v. Seva Nivatra Karamc.hari Hitkari Samiti, (1995)
1 Scale 40, relied on. F
Krishan Kumar v. Union of India, [1994] 4 SCC 207; Indian Ex-Service
League v. Union of India, AIR (1991) SC 1182 and State of Rajasthan v.
Rajasthan Pensioner Samaj, AIR (1991) SC 1743, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2986 of G
1995.

From the Judgment and Order dated 9.8.89 of the Central Adminis-
tative Tribunal, Hyderabad in T.A. No. 45 of 1988.

K.N. Shukla, A.K. Srivastava and C.V.S. Rao for the Appeallants. H
665
666 SUPREME COURT REPORTS [1995) 1 S.C.R.

A Ms. Indira Sawhn"'y for the Respondent.

The following Order of the Court was delivered :

'
Leave granted.

B The Government of India in O.M. No. 18(4)-EV/79 dated May 25,
1979 introduced in paragraph 3(iii) that half of the dearn~ss pay was
treated as pay to compute retirement benefits. That came to be challenged +
by the. respondent in ·filing O.A. before the Central Administrative
Tribunal, Hyderabad. The Tribunal in the impugned order dated August
C 9, 1989 following a judgment of the Bangalore Tribunal declared it to be
ultra vires, offending Article 14 of the Constitution. Thus this appeal by r
special leave.

The benefit of the O.M. is to facilitate calculation of 10 months'
D average pay for the purpose of pension. Earlier, only 3/lOth of the 10
~i
months average pay was computed for pension. Utider the impugned order
in para 3(iii) of the O.M. dated May 25, 1979; the computation would be
5/lOth i.e. half of the dearness pay for the purpose of computation of
pension. In other words, the O.M. is more beneficial for the pensioner
rather than earlier computation. Whether the notification is justified and
E valid in law, was conside£ed by a Bench of this Court in State of Rajasthan
v. Seva Nivatra Karamchari Hitkari Samiti, (1995) 1 SCALE 40 wherein it
was held that the ratio in Nakara's case has no bearing in this matter and
the introduction of the rule is not arbitrary or capricious. It is permissible
to introduce different retiral benefit schemes for Government servants as 't-
....
F indicated in the dedsions held by this Court in Krishan Kumar v. Union of
India, (1994) 4 SCC 207, Indian· Ex-Service League v. Union of India, AIR
(1991) SC 1182, and State of Rajasthan v. Rajasthan Pensioner Samaj, AIR
(1991) SC 1743.

In view of the above ratio and practical effect of the O.M., we are of
G the opinion that there is no invidious discrimination in the classification of
the pensioners who retired at different dates and in computation of the
pension for different periods. The Government's O.M. makes discernible
difference between government employees retired at different dates for
entitlement to pension. In fact, the O.M. is more beneficial to the retired
H employees than was contended in the petition.
U.0.1.v. B.R.MURTHY 667

Und~r the cicrumstances,. the Tribunal was not right in follwing the A
earlier decision of the another Tribunal at Bangalore accepting the ratio
in Nakara's ~ase without testing the facts and circumstances of this case.
The appeal is accordingly allowed. No costs.

A.G. Appeal allowed.

.!.J

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