Supreme Court of India

V. KASTURIversusMANAGING DIRECTOR, STATE BANK OF INDIA, BOMBAY AND ANR.

Citation: 1998 INSC 392
Decided: 9 October 1998
Disposal: Dismissed
Bench: S B MAJMUDAR

Holding

A prospective amendment that creates a new class of pensioners cannot be applied to a former employee who was not a pensioner at the time of retirement; therefore the appellant is not entitled to the benefit.

Summary

V. Kasturi voluntarily retired from the State Bank of India in 1984 after more than 20 but less than 25 years of service and was ineligible for pension under Rule 22(1)(c) which then required 25 years. The Rules were amended in September 1986 reducing the qualifying service to 20 years. Kasturi claimed entitlement to pension prospectively from the amendment date, arguing that he formed the same class of employees as those retiring after the amendment. The Supreme Court examined whether a prospective amendment that creates a new class of pensioners can be applied to a former employee who was not a pensioner at the time of retirement. Relying on the distinction between Category I (eligible retirees) and Category II (non‑eligible retirees) cases, the Court held that only a retrospective amendment can benefit such former employees. Since the amendment was prospective, Kasturi was not entitled to any pension benefit. The appeal was dismissed.

Issues considered

Whether a former employee who was not eligible for pension at the time of retirement is entitled to benefit of a subsequently amended pension rule that is prospective in nature

Legislation cited

Constitution of Indias. Article 14

Subjects

pensionservice lawState Bank of IndiaRule 22eligibilityprospective amendmentretrospective amendmentArticle 14classificationpension fund

Judgment

V. KASTURI A
11.
MANAGING DIRECTOR,
STA TE BANK OF INDIA, BOMBAY AND ANR.

OCTOBER 9, 1998
B
[S.B. MAJMUDAR AND M. JAGANNADHA RAO, JJ.]

Service Law :

State Bank of India Employees' Pension Fund Rules, 1979: c
Rule 22(J)(c)-Pension-Additional benefit-Retired employee-
Entitlement to-Held: If a person is entitled to pension at the time of his
retirement, he is entitled to enhanced pension brought into force after his
retirement, since he is a member of the same class of pensioners when the
additional benefit is conferred on all of them-In such a situation, the D
additional benefit cannot be denied to him on the ground that he has retired
prior to the date of coming into force of the additional benefit-Constitution
of India, 1950, Art. 14--State Bank ofIndia Officers (Determination of Terms
and Conditions of Service) Order, 1979, Regn. 45--State Bank of India Act,
1950, S.50. E
Rule 22(/)(c)-Pension--Retired employees-Person drawing pension
and person not drawing pension-Classification between-Employee retired
after putting in more than 20 years but less than 25 years-Employee not
given pension since qualifying service was 25 years-Subsequently, qualifying
service reduced to 20 years prospectively-Entitlement-Held: If an employee F
is not eligible for pension at the time of his retirement, he is not entitled to
extension of pension scheme unless such extension is retrospective-In the
circumstances of the case, the said employee is not entitled to the benefit of
extended pension scheme since it is prospective-Such an employee will
remain outside its sweep.
G
The appellant voluntarily retired from the service of the respondent-
Bank after putting in a service of more than 20 years but less than 25 years.
The appellant was not given pension as the minimum qualifying service for
earning pension was 25 years under Rule 22(l)(c) of the State Bank of India
Employees' Pension Fund Rules, 1979. Subsequently, the Rules were amended H
269
270 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A w.e.f. 20-9-1986 whereby the minimum qualifying service for earning pension·
was reduced to 20 years.

The appellant made a representation before the respondent that as he
had already put in a service of more than 20 years he should get his pension
at least prospectively i.e. from the date on which the amended provision came
B into force, which was rejected. Single judge of the High Court allowed the
writ petition filed by the appellant. However, the Division Bench allowed the
Writ Appeal filed by the respondent. Hence this appeal, which raised the
following question :

C Whether the appellant was entitled to get the benefit of the amended
Rule 22(1)(c) of the Rules from 20-9-1986?

Dismissing the appeal, this Court

HELD: I. From the various decisions of this Court spread over years,
D the following legal position clearly gets projected: (293-B)

Category I

If the person retiring is eligible for pension at the time of his retirement
and if he survives till the time by subsequent amendment of the relevant
pension scheme, he would become eligible to get enhanced pension or would
E become eligible to get more pension as per the new formula of computation
of pension subsequently brought into force, he would be entitled to get the
benefit of the amended pension provision from the date of such order as he
would be a member of the very same class of pensioners when the additional
benefit if being conferred on all of them. In such a situation the additional
F benefit available to the same class of pensioners cannot to denied to him on
the ground that he had retired prior to the date on which the aforesaid
additional benefit was conferred on all the members of the same class of
pensioners who had survived by the time the scheme granting additional
benefit to these pensioners came into force. (293-C-D)

G D.S. Nakara v. Union of India, 11983) 1 SCC 305, followed.

Indian Ex-Services League v. Union of India, [1991) 2 SCC 104;
Krishena Kumar v. Union of India, [1990) 4 SCC 207; All India Reserve
Bank Retired Officers Association v. Union of India, [19921 Supp. 1 SCC
664; State of Punjab v. Justice S. S. Dewan (Retired Chief Justice), [1997)
H 4 SCC 569; Dhanraj v. State of J & K, (1998) 4 SCC 30; R. L. Marwaha
V. KASTURI v. MANAGING DIRECTOR, S.B.I. 271
v. Union of India, (1987] 4 SCC 31; T. S. Thiruvengadam v. Secretary to A
Government of India, Ministry of Finance, Department of Expenditure, New
Delhi, (1993] 2 SCC 174 and MC. Dhingra v. Union ofIndia, (1996) 7 SCC
564, relied on.

Category II
B
However, if an employee at the time of his retirement is not eligible for
earning pension and stands outside the class of pensioners, if subsequently
by amendment of relevant pension Rules any beneficial umbrella of pension
scheme is extended to cover a new class of pensioners and when such a
subsequent scheme comes into force the erstwhile non-pensioner might have C
survived, then only if such extension of pension scheme to erstwhile non-
pensioners is expressly made retrospective by the authorities promulgating
such scheme, the erstwhile non-pensioner who has retired prior to the
advent of such extended pension scheme can claim the benefit of such a new
extended pension scheme. If such new scheme is prospective only, old retiree
non-pensioners cannot get the benefit of such a scheme even if they survive D
such a new scheme. They will remain outside its sweep. (293-F-G)

Commander, Headquarter, Calcutta v. Capt. Biplabendra Chanda,
[1997] l SCC 208; Govt. ofT. N v. K. Jayaraman, [1997] 9 SCC 606 and
Union of India v. Lieut. (Mrs.) E. Jacats, [1997] 7 SCC 334, followed.
E
Indian Ex-Services League v. Union (JI India, (1991] 2 SCC 104;
Krishena Kumar v. Union of India, (1990) 4 SCC 207; All India Reserve
Bank Retired Officers Association v. Union of India, (1992) Supp. 1 SCC
664; State of Punjab v. Justice S. S. Dewan, (Retired Chief Justice, (1997)
4 SCC 569; Dhanraj v. State of J & K, (1998] 4 SCC 30; R. L. Marwaha
v. Union of India, (1987) 4 SCC 31; T. S. Thiruvengadam v. Secretary to F
Government of India, Ministry of Finance, Department of Expenditure, New
Delhi, [1993) 2 SCC 174 and MC. Dhingra v. Union ofIndia, (1996] 7 SCC
564, held inapplicable.

2. If the claimant for pension benefit satisfartorily brings his case G
within the first category of cases he would be entitled to get the additional
benefits of pension computation even if he might have retired prior to
enforcement of such additional beneficial provisions. But if on the other hand
the case of a retired employee falls in the second category, the fact that he
retired prior to the relevant date of coming into operation of the new scheme
would disentitle him from getting such a new benefit. In the instant case, the H
272 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A appellant falls in the second category of cases. Hence he is not entitled to
the benefit. [294-A-B]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5048 of
1998.

B From the Judgment and Order dated 12.08.97 of the Madras High Court
in W. A. No. 838of1993.

N.G.R. Prasad and S. R Setia for the Appellant.

Anil B. Divan, Rajiv Kapur, K. Mohandas and Sanjay Kapur for the
Respondents.
c The Judgment of the Court was delivered by

S.B. MAJMUDAR, J. Leave granted.

We have heard learned counsel for the parties finally in this appeal. The
short question involved in this appeal is: whether the appellant - original writ
D petitioner before the High Court was entitled to get the benefit of pension
scheme available to the State Bank employees under the State Bank of India
Employees Pension Fund Rules (for short the Rules). The learned Single
Judge of the High Court held that the appellant was so entitled. The Division
Bench set aside the said decision and rejected the claim of the appellant. In
E order to highlight the grievance of the appellant in this appeal, it is necessary
to note background skeletal facts.

BACKGROUND SKELETAL FACTS:

The appellant joined the respondent State Bank of India as an officer
on 22.10.1963. In the year 1979 the respondent Bank framed the pension
F scheme under Regulation 45 of the State Bank of India Officers (Determination
of Terms and Conditions of Service) Order of 1979. The State Bank of India
also had framed State Bank oflndia Employees Pension Fund Rules in exercise
of powers conferred by Section 50 of the State Bank of India Act. The
appellant became a member of the said Fund as required of him while joining
G the service of the Bank. He resigned from the Bank service on 3 lst July, 1984.
By that time he had completed 20 years and 9 months of pensionable service.
At the time of his resignation which was treated as voluntary retirement, he
was not entitled to get pension under the aforesaid Rules as the eligibility
requirement for earning pension as per Rule 22(1)(c) of the said Rules was to
the effect that the employee should have retired from Bank service after 25
H years of pensionable service. However, on account of various representations
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR, J.] 273

from the Bank employees the said eligibility condition was relaxed with effect A
from 20th September, 1986 whereby the original clause (c) Rule 22(1) was
replaced by another clause ( c) which provided that an employee retiring after
completion of 20 years of pensionable service irrespective of the age could
get benefit of the pension scheme by his request in writing. The appellant's
contention before the respondent authorities was that though he had resigned B
on 31st July, 1984 as he had already completed 20 years of pensionable
service by that time the benefit of the amended provision of Clause (c) of Rule
22(1) of the Rules could be available to him at least prospectively from 20th
September, 1986 i.e. from the date on which amended provision came into
force. The said request was rejected by the respondent Bank authorities on
the ground that the said amended provision which introduced a new pension C
scheme for covering the additional class of retiring employees on completion
of 20 years of pensionable service, instead of earlier requirement of 25 years
of pensionable service, could not retrospectively apply in the case of the
appellant who had resigned and ceased to be a Bank employee more than two
years prior to coming into force of this amended pension scheme. The appellant
thereafter carried the matter by way of a writ in the High Court of Judicature D
at Madras. The learned Single Judge who heard the writ petition, following
the Constitution Bench judgment of this Court in the case of D.S. Nakara and
Ors. v. Union ofIndia, [1983] 1 SCC 305; held that the appellant was entitled
to the benefit of amended provision of Rule 22( 1)(c) from the date of coming
into operation of the said provision as he was a member of the employees E
pension fund at the time when he ceased to be a Bank employee and he had
already completed the requisite 20 years of pensionable service by that time.
The Division Bench of the High Court in Writ Appeal moved by the respondent
Bank took a contrary view and came to the conclusion that the amended
provision of the rule introduced a new scheme for covering entirely a distinct
class of erstwhile employees who had retired from Bank service and the said F
provision coul.d not have any retrospective effect and could not cover the
case of the appellant who had retired more than two years prior to the coming
into force of the amended scheme of pension. That is how the appellant is
before us in these proceedings.
G
RIVAL CONTENTIONS:

Learned counsel for the appellant, Shri N.G.R. Prasad, placing reliance
on a number of decisions of this Court and especially the Constitution Bench
decision of this Court in Nakara's case (Supra) vehemently contended that
the appellant who had completed 20 years of pensionable service at the time H
274 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A he retired after his resignation, formed the very same class of Bank employees
who retired after completing 20 years pensionable service and hence they had
all to be treated uniformly; that pension was not a bounty but was a reward
for meritorious past service and once the eligibility for earning the said
pension after completion of 20 years of pensionable service became available
B to an employee, whether he retired at one .point of time or other would not
make any difference. All such employees formed the same class. Hence, it was
not open to the respondent authorities to deny the appellant pensionary
benefit only on the ground that when he retired in 1984 after his resignation,
even though he had completed 20 years of pensionable service by then, the
then existing pension rules did not render him eligible to earn pension, when
C subsequently the said rules were relaxed for this very class of employees with
effect from September, 1986. In this connection it was submitted that the
appellant was not claiming any pension for the period from !st August, 1984
till 19th September, 1986 but at least from the date on which the amended
provision came into force and as the appellant was alive by then he was
entitled to proportionate pension at least from that date onwards to the extent
D of the pensionable service put in by him. The denial of the said benefit to
the appellant was purely arbitrary and unreasonable and was not justified on
the touchstone of Article 14 of the Constitution of India. He made it clear that
he was not challenging the cut off date fixed by the respondent authorities
while amending sub-clause (c) of Rule 22(1) of the Pension Rules. All that he
E submitted was that as the appellant falls in the same class of other Bank
employees who had completed 20 years of pensionable service by the time
of retirement the appellant was entitled to earn pension from 20th September,
1986 as he had survived on that date, his earlier retirement notwithstanding.

Learned senior counsel Shri Anil B. Divan for the respondent Bank
F authorities on the other hand submitted placing reliance on a number of
decisions of this Court that the Constitution Bench Judgment of this Court
in Nakara's case (supra) did not apply to the facts of the present case as the
appellant was not a 'pensioner' within the scheme of the pension when he
resigned from Bank job on 3 lst July, 1984. Consequently subsequent
G amendment of the rule after his retirement which extended the net of coverage
of eligible pensioner could not apply to him as he was outside the said sweep
of the amended provision when it came into force in September, 1986. That
the appellant cannot be said to be forming the same class of eligible pensioners
who had completed 20 years of pensionable service on 20th September, 1986.
By his own volition he had opted out from the Bank service two years prior
H thereto. That the amended provision would apply only to those Bank employees
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR,J.] 275
who had completed 20 years of pensionable service by 20th September, 1986 A
when the amended provision applied. Consequently, the claim of the appellant
was rightly rejected by the Division Bench of the High Court.

Point for consideration:

In view of the aforesaid rival contentions, the following solitary point B
arise for our consideration:

(I) Whether the appellant was entitled to get the benefit of amended
Rule 22(1) (c) of the Rules from 20th September, 1986 onwards?

We shall examine this solitary point for determination in the light of the rival C
contentions placed before us by learned counsel for the respective parties
based on a number of decisions of this Court to which we will make reference
at an appropriate place in the later part of this judgment.

The Pension Scheme before 20.09.1986:
D
Before we proceed to examine the rival contentions centering round this
point, it will be necessary to note the salient features of the pension scheme
applicable to Bank employees at the relevant time when the appellant resigned
from Bank service on 31st July, 1984 and also the change brought about in
the said scheme with effect from 20th September, 1986.
E
The respondent Bank, as noted earlier, in exercise of its powers conferred
under Section 50 of the State Bank oflndia Act (23of1955), the Central Board
of the State Bank of India, after consultation with the Reserve Bank of India
and with the previous sanction of the Central Government, framed regulations
fo.r providing for establishment and maintenance of pension fund for the
benefit of its employees. The said pension fund was created in pursuance of
F
clause (o) of sub-section (2) of Section 50 of the State Bank of India Act, 1955.
The regulations so framed were styled as the 'State Bank oflndia Employees'
Pension Fund Rules" which are being referred to by us in this judgment as
"the Rules'. Rule I thereof provided for constitution of a fund called "THE
STATE BANK OF INDIA EMPLOYEES' PENSION FUND". The said fund was G
deemed to have come into.existence on !st July, 1955. It is not in dispute
between the parties that the appellant when he joined the Bank service
became a member of the said fund. The term "Member" is defined in Rule 2
to mean:

"any person in the service of the Bank who has been admitted to the H
276 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A membership of the fund".

Rule 7 of the Rules provide that:

" ..... every permanent employee in the service of the Bank who is
entitled to pension benefits under the terms and conditions of his
B service shall become a member of the Fund from (a) the date from
which he is confirmed in the service of the Bank or (b) the date from
which he may be required to become a member of the Fund under the
terms and conditions of his service."

It is not in dispute between the parties that the appellant being a confirmed
C permanent employee became a member of the said Fund and he continued to
be so till the date of his resignation from the Bank service. Rule 3 of the Rules
provide that:

"The trustees of the fund shall be the Director of the Bank for the time
being and at every meeting of such trustees the Chairman of the Bank
D shall be the Chairman of the meeting and in his absence one of the
Directors not being an executive officer shall be elected Chairman of
the meeting."

Rule 8 lays down the criteria for ruling out employees from membership of the
pension fund, the excluded categories of employees are mentioned in sub-
E clauses (a) to (d) of Rule 8 who were not eligible to become members of the
fund. The appellant did not fall in any of these excluded categories. He,
therefore, by the thrust of rule 7 became a member of the pension fund. Rule
9 sub-rule (I) lays down that:

"Subject as hereinafter provided every employee shall, as from the
F
date of his admission to the fund, contribute to the fund every month
an amount equal to five per cent of his salary subject to a maximum
provjded therein".

Sub-rule (2) thereof entitles the powers of the trustees at their discretion to
G suspend the operation of sub-rule(!) or reduce the percentage of the members'
contribution at any time in the case of any class or category of employees
and for such period as they shall think necessary and to re-impose the
contribution should they consider it necessary but without retrospective
effect. As per sub-rule (3) of rule 9:

H "Each employee's contributions to the fund under sub-rule (I) shall
V. KASTURI v. MANAGING DIRECTOR, S.B.l. [S.B. MAJMUDAR, J.] 277
be credited in the books of the fund to an account in his name and A
a statement of the account shall be supplied to him half-yearly".

- Sub-rule (5) of Rule 9 provided that:

"In the event of member retiring from the Bank's service, or in the
event of a member dying, in each case before such member has B
qualified for a pension there shall be payable to him or, in the event
of his death, to the persons and in the manner named in sub-rule (7)
hereof, the amount of such member's own contributions with interest
accrued thereon".

Amended Rule 10 lays down that: c
"The Bank will subscribe monthly to the fund a sum equal to ten per
cent of the salary payable by the Bank in respect of all employees who
are members of the fund. However, when an employee ceases to be
in pensionable service in terms of Rule 20, no subscription will be
made by the Bank for the period of such service. No amount subscribed D
by the Bank shall be credited to the individual account of any member".

By Rule 13 the trustees were given powers to invest the moneys of the fund
or any portion thereof in stock, funds and securities in which a trustee is
authorized to invest trust money by any law for the time being in force. Rule E
15 provided that:

" ... the retirement of all other employees of the Bank shall be subject
to the sanction of the Executive Committee or the Local Board
concerned with employment...".

It also lay down that F

" .... any officer or other employee who shall leave the service without
sanction as required by this rule shall forfeit all claims upon the funds
for pension".

Rule 17 lays down that: G
"Pensions shall begin to accrue on the first day succeeding that of
retirement and shall be payable monthly to the beneficiary personally
or to his order...".

As per rule 18: H
278 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A "Pensions shall in each case be debited to the member's account in
the fund until the balance thereof is exhausted and thereafter to the
general balance of the fund".

We may also in this connection refer to Rule 26 which provides that:
-
B "Every employee when joining the fund shall subscribe an agreement
in the following form:-

I hereby declare that I have read and understood the Rules of the State
Bank of India Employees, Pension Fund and I hereby subscribe and agree to
be bound by the said Rules.
c Name in full ........ .

Date of Birth ............. .

Nature of appointment. ................... .
D Date of joining service .................."

The next relevant rule is Rule 22 which is required to be extracted hereunder
in the form in which it existed at the time when the appellant ceased to be
a Bank employee on his resignation from Bank service on 31st July, 1984. Rule
E 22(1) sub-rules (a) to (c) read as follows:

"22 ( 1) A member shall be entitled to a pension under these Rules on
retiring from the Bank's service-

(a) after having completed twenty years' pensionable service
provided that he has attained the age of fifty years;
F
(b) after having completed twenty years' pensionable service,
irrespective of the age he shall have attained, if he shall satisfy
the authority competent to sanction his retirement by approved
medical certificate or otherwise that he is incapacitated for further
active service;
G
(c) after twenty-five years pensionable service."

CHANGES JN THE SCHEME AFTER 20.09.1986:

Sub-rule (2) of Rule 22 is not relevant for our present purpose. Rule 22
H sub-rule (J)(c) underwent a change and the revised form thereof with effect
V. KASTURI v. MANAGING DIRECTOR, S.B.l. [S.B. MAJMUDAR, J.] 279

from 20th September, 1986 read as under: A
"(c) After having completed twenty years pensionable service,
irrespective of the age, he shall have attained, at his request in
writing.

(d) After twenty five years pensionable service. B
22(3) A member who has been permitted to retire under clause l(c)
above shall be entitled to proportionate pension."
J
In other words, in clause (c), the period of twenty five years stood reduced
to twenty years w.e.f. 20th September, 1986. C
Now a mere look at the aforesaid relevant provisions of the rules shows
that even though the appellant was a member of the pension Fund, when he
ceased to be a Bank employee after 3 lst July, 1984 on his resignation from
the Bank service, he was not entitled to pension as none of the conditions
of Rule 22(1) sub-rules (a) to (c) then existing applied in his case. Even though D
he had completed 20 years of pensionable service at that time he had not
attained the age of50 years. He was only 44 years of age. Hence Rule 22(l)(a)
did not apply in his case. Rule 22(1 )(b) also was out of picture for him as he
had not retired because of any incapacity. He was in good health but for his
own personal reasons he walked out of the Bank service at the age of 44 E
years. Then remains only clause (c) of Rule 22( l) as then existing which laid
down that if a member of the fund who retired from bank service after 25 years
of pensionable service could get entitlement for full pension to be charged
on the said fund. Thus as Rule 22(1) stood in those days when the appellant
resigned from Bank service he was not eligible to earn any pension at all.
Once that happened, he could invoke the benefit of only Rule 9 sub-rule (5) F
and claim the amount of his own contributions remaining to the credit of his .
account in the fund with the interest accrued thereon. It is not in dispute that
he did receive the said amount of his personal contribution with interest
accrued thereon. As the situation then existed no further relief could have
been given or was available to the appellant and he could not have claimed G
any more amount from the fund. However, the appellant stakes his case for
pension under the said scheme only on the basis of the amended Rule 22( ! )
by insertion of a new sub-rule (c) with effect from 20th September, 1986. It
is also not in dispute between the parties that the said amended sub-clause
(c) became operative only from 20th September, 1986 and that it had no
retrospective effect. The short question is Whether the appellant could stake H
280 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A his claim for pension on the ground that he had completed 20 years of
pensionable service by the time he ceased to be a Bank employee in 1984,
when he had survived till the amended clause (c) Rule 22( 1) came into force.

For supporting the aforesaid claim of the appellant, learned counsel for
the appellant vehemently contended that all the Bank employees who had
B completed 20 years of meritorious pensionable service by the time ofretirement
or resignation from Bank service, would form one class and if that is so, the
moment Rule 22(l)(c) get amended the pension scheme which had already
applied in the case of appellant being a member of the said scheme from the
inception of his bank service can be said to be not a new scheme but it can
C be said to be conferment of an additional advantage available to all the
members of the very same scheme and if all such pensioners similarly situated
being members of the same class namely, employees retiring after having
completed 20 years pensionable service, were treated differently on the specious
(
plea that only those who retire after the cut-off date of 20th September, 1986
would get pension and not those who retired earlier though having completed
D 20 years of pensionable service, a clear case of hostile discrimination would
result. The employees like the appellant who had retired earlier can be said
to be arbitrarily being denied the benefit of the pension scheme which got
further amended for the benefit of the very same class of employees. This
action on the part of the Bank would therefore, remain violative of Article 14
E of the Constitution of India.

On a close look of the relevant provisions of the Rules it is not possible
to agree with this contention. The appellant, in order to earn pension under
Rule 22(1) sub-clause (c) as amended in 1986 has to satisfy the following twin
conditions:
F
(i) At the time when the amended sub-clause (c) applied i.e. from
22nd September, 1986, he should be a member of the pension
fund;
(iJ) He should have by then completed 20 years of pensionable
G service, and should have put forward his requisition in writing
for availing the benefit of the said provision.

Unless both these conditions are satisfied the amended clause (c) of Rule
22(1) cannot apply in his case. We have to note that the service bio-data of
the appellant contra indicates the applicability of those two conditions. He
H was not a member of the fund on 21st September, 1986. He had ceased to be
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR, J.) 281

a member of the fund on his retirement in 1984. As laid down in the definition A
of the term "member" the concerned employee should be in service of the
Bank and he should have been admitted to the membership of the fund. So
far as the admission into the membership of the fund is concerned, the
appellant has not satisfied the requirement inasmuch as he was a member of
the fund but the second requisition of the definition was not fulfilled by him B
in 1986 as he was not in service of the Bank on 20th September, 1986 when
clause 22(1)(c) as amended came into force. Consequently the first condition
for applicability of the amended clause (c) of Rule 22(1) did not apply to the
facts of the present case. Consequently, the question of compliance of the
second condition that he should have completed 20 years of pensionable
service would pale into insignificance as even though he had completed 20 C
years of pensionable service when he ceased to be a Bank employee in 1984
he did not come within the beneficial sweep of Rule 22( I) clause (c) as
amended, as he was not a member of the pension fund in 1986 as he had
ceased to be a member of the fund after 31st July, 1984. He was, therefore,
out of the sweep of the pension fund scheme on 20th September, 1986 when D
Rule 22(1 )(c) got amended. The very opening part of Rule 22(1) lay down that
a member should be entitled to pension under the Rules if he satisfies the
conditions laid down in the said Rule but if he is not a member on the relevant
date, the question of his being covered by any of the clauses of the said rule
would not survive at all. Thus on the very scheme of the Rules and the
amended provision of sub-rule (c) of Rule 22(1) the appellant's case would E
fail and consequently he would not be entitled to claim any benefit from the
aforesaid amended provision even prospectively from 20th September, 1986
as he was not at all covered by the said provision on that date.

We may also note that the second requirement for the applicability of
Rule 22(l)(c) as amended is that after having completed 20 years of pensionable F
service the concerned member of the fund irrespective of age i.e. even being
less than 50 years of age can invoke the benefit of the said provision by
making a request in writing for getting proportionate pension. Even if such
request is made it is in the hands of the Executive Committee of the Central
Board of the Bank to accept such a request or not as seen from Rule 15. Any G
officer who leaves the service without such sanction would forfeit all the
claims under the fund for pension. Consequently occasion for an employee
who is a member of the fund to make a request in writing to the Bank for
getting the benefit of pension scheme as per Rule 22(1)(c) as amended would
· arise provided such an employee has completed 20 years of pensionable
service and has obtained the right under the amended sub-clause (c) of Rule H
282 SUPREME COURT REPORTS [''.98] SUPP. 2 S.C.R.

A 22(1) to make his request in writing. Thus, even the second condition for
applicability of Rule 22(\) sub-clause (c) as amended would pre-suppose that
the concerned member of the fund having completed 20 years of service must
be in a position at the time of retirement to make his request in writing for
getting the benefit of the said provision and such an eventuality would arise
only on and from the date on which the said amended provision came into
B force. Meaning thereby those employees like the appellant who had ceased
to be members prior to the said date and who might have completed 20 years
of service jn past will not be able to invoke the amended clause (c) Rule 22(1)
at any time after their earlier retirement. Thus even the second condition of
giving a requisition in writing would not be available to such employees like
C the appellant. It is also axiomatic that when the appellant resigned on 31st
July, 1984 at the age of 44 years there was no occasion for him to give any
such written request for proportionate pension as in those days clause (c) in
amended form was not available for being invoked by him. The second
condition for applicability of the amended clause (c) of Rule 22(1) must of
necessity therefore, mean that only those employees who were even less than
D 50 years of age and who retired on and after 20th September, 1986 having then
completed 20 years of pensionable service could invoke the said amended
provision by requesting in writing. The appellant did not and could not
comply with this second condition for invoking amended clause (c) of Rule
22(1).
E We must also keep in view rule 26 of the pension Rules which clearly
shows that when a person enters the Bank service, he becomes a member of
the fund and agrees to be governed by the Rules of the scheme. He becomes
the beneficiary of the trust fund if he satisfies all the requisite conditions of
the pension fund. If he is not a beneficiary of the fund at the time when he
F retires, as it happened in the case of the appellant in 1984, no benefit under
the said scheme of the fund would be available to him subsequently as he
will be out of the class of beneficiaries. Consequently, no question of his
being given any discriminatory treatment vis-a-vis other existing beneficiaries
under the scheme of the fund that were already in Bank service as members
of the fund on 20th September, 1986 when the beneficial provisions of the
G amended Rule 22(l)(c) came into force, would at all survive for consideration.

For all these reasons, the solitary point for consideration has to be
answered against the appellant.

However, as learned counsel for the parties invited our attention to
H number of decisions of this Court in support of their respective cases, we
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR, J.] 283
deem it fit to refer to them and consider their sweep. A
Learned counsel for the appellant, at the outset, invited our attention
to the Constitution Bench decision of this Court in D.S. Nakara, (supra). The
Constitution Bench in the aforesaid case, speaking through D.A. Desai, J, had
to consider the question of a cut-off date found in the pension scheme which
was uniformly applicable to all the Central Government employees who had B
formed one class at the time of retirement and who were entitled to pension.
The question was whether amount of pension which was computed for them
in the light of available formula could have been further enhanced on the
basis of a subsequent more beneficial formula and whether it could be denied
only on the ground that they had retired prior to the date on which such C
enhanced computation of pension was made available to the pensioners. In
the light of the aforesaid fact situation it was observed that all employees
governed by the pension scheme and had become eligible to earn pension at
the time of their retirement formed one class. It was held that such a cut off
date for granting additional benefits to only some of the pensioners in the
same class of employees could not be countenanced on the touchstone of D
Article 14 of the Constitution of India. In para 8 of the report it was noted
that the:

"Primary contention is that the pensioners of the Central Government
form a class for the purpose of pensionary benefits and there could
not be mini classification within the class designated as pensioners ...." E
A question was posed in para 9 of the report that can this class of pensioners
further be divisible for the purpose of' entitlement' and 'payment' of pension
into those who retired by certain date and those who retired after that date.
The aforesaid decision cannot be of any assistance to teamed counsel for the
appellant on the facts of the present case. In Nakara 's case admittedly all the F
Central Government servants were governed by pension scheme and were
eligible to draw pension on retirement. They therefore, formed one class. In
the facts of the present case, it is difficult to appreciate how the appellant can
be said to be forming the same class of employees who crune to be later on
governed for the first time in 1986 by the pension scheme by being conferred G
the benefit of newly introduced pension eligibility as per amended clause (c)
of Rule 22(1). The new class of employees covered by it was consisting of
all the then existing members of the fund who had completed 20 years of
pensionable service and who could be below the age of 50 years at the time
of their retirement as the earlier restriction of age of 55 years as found in
clause (a) of Rule 22(1) was revised by re-enacting clause (c). It is also to be H
284 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A noted that earlier clause (a) gave retirees at the age of 50 years full pension.
And clause (c) sought to give retirees below 50 years only proportionate
pension for the first time after September, 1986. This new class of employees
were for the first time made eligible to get the benefit of pension scheme under
Rule 22(1). Such pensionary benefit was not available to them prior to the
B amendment of clause (c) of Rule 22( 1). Hence, it was certainly a new pension
scheme for them and not old wine in a new bottle. For such class of employees
there was no question of any mini classification as for the entire class of such
employees for the first time the benefit of pension scheme was made available
by the amendment. The decision of the Constitution Bench in Nakara 's case
therefore, cannot advance the case of learned counsel for the appellant. We
G may also mention that the ratio of Nakara 's case was distinguished by two
later Constitution Bench decisions of this Court. In the case of India Ex-
Services League and Ors. v. Union ofIndia and Ors., (1991] 2 SCC 104, a later
Constitution Bench, speaking through Verma, J, (as he then was) made the
following pertinent observations in para 12 of the report:

D "The liberalised pension scheme in the context of which the decision
was rendered in Nakara provided for computation of pension according
to a more liberal formula under which "average emoluments" were
determined with reference to the last ten months' salary instead of 36
months' salary provided earlier yielding a higher average, coupled
with a slab system and raising the ceiling limit for pension. This Court
E
held that where the mode of computation of pension is liberalised from
a specified date, its benefit must be given not merely to retirees
subsequent to that date but also to earlier existing retirees irrespective
of their date of retirement even though the earlier retirees would not
be entitled to any arrears prior to the specified date on the basis of
F the revised computation made according to the liberalised formula. For
the purpose of such a scheme all existing retirees irrespective of the
date of their retirement, were held to constitute one class, any further
division within that class being impermissible. According to that
decision, the pension of all earlier retirees was to be recomputed as
on the specified date in accordance with the liberalised formula of
G computation on the basis of the average emoluments of each retiree
payable on bis date of retirement. For this purpose there was no
revision of the .emoluments of the earlier retirees under the scheme.
It was clearly stated that if the pensioners form a class, their
computation cannot be by different formula affording unequal treatment
H solely on the ground that 'some retired earlier and some retired later'.
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR, J.] 285
This according to us is the decision in Nakara and no more". A
Jn yet another later Constitution Bench judgment of this Court in the case of
Krishena Kumar etc. etc. v. Union ofIndia and Ors., [1990] 4 SCC 207, K.N.
Saikia, J., speaking for the Constitution Bench distinguished Nakara 's case
by holding that:
B
"Jn Nakara the Court treated the pension retirees only as a
homogeneous class. It was never held that both the pension retirees
and the PF retirees formed a homogeneous class and that any further
classification among them would be violative of Article 14. On the
other hand the court clearly observed that it was not dealing with the C
problem of a "fund .....".

It has to be kept in view that in the present case we are concerned with the
pension fund and so far as the pension fund is concerned Nakara 's judgment
by itself would not apply as clearly mentioned in the very same judgment in
para 45 of the ruling in Nakara's case (supra). Jn para 45, it has been observed D
that:

"Let us clear one misconception. The pension scheme including the
liberalised scheme available to the government employees is non-
contributory in character. It was not pointed out that there is something
like a pension fund ...... The payment of pension is a statutory liability E
undertaken by the Government and whatever becomes due and payable
is budgeted for. One could have appreciated this line of reasoning
where there is a contributory scheme and a pension fund from which
alone pension is disbursed. That being not the case, there is no
question of pensioners dividing the pension fund which, if more
persons are admitted to the scheme, would pro rata affect the share ....". F
It becomes therefore, obvious that Nakara 's judgement cannot be
effectively pressed in service by learned counsel for the appellant on the facts
of the present case. It is to be kept in view that in the present case we are
also concerned with pension fund which as per Nakara 's observations is out G
of the sweep of that decision. Our attention was then invited by learned
counsel for the appellant to two later decisions of this Court. In the case of
All India reserve Bank retired Officers Association and Ors. v. Union of
India and Anr., [1992] Supp. 1 SCC 664, A.M. Ahmadi, J (as he then was),
spoke for the Division Bench of two learned Judges. The case before this
Court in the aforesaid decision was whether the cut-off date fixed for bringing H
286 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A into force the pension scheme which earlier did not exist for the Bank employees
could be said to be discriminatory from any angle. The Court while
distinguishing Nakara 's ratio held that:

"Employees of the Reserve Bank of India were, prior to the introduction
of the pension scheme, enjoying superannuation benefits comprising
B (i) CPF and (ii) gratuity .....".

The pension scheme was being introduced for the first time from the cut•off
date. In these circumstances, the employees who had retired earlier when
pension scheme was not available could not make effective grievance in
connection with those of a few other categories who retired. later when
C pension scheme had already come into force. Ahmadi, J., speaking for the
Court in the aforesaid decision highlighted the observations in Nakara 's case
found at page 333 para 46 to the following effect:

" .... the pension will have to be recomputed in the light of the formula
enacted in the liberalised pension scheme and effective from the date
D the revised scheme comes into force. And beware that it is not a new
scheme, it is only a revision of existing scheme. It is not a new retiral
benefit. It is an upward revision of an existing benefit. If it was a
wholly new concept, a new retiral benefit, one could have appreciated
an argument that those who had already retired could not expect it."
E
The portion mentioned in Nakara 's case clearly indicated that all the employees
in Nakara 's case were governed by the existing scheme and were the recipients
of retrial benefits. It was an upward revision of the existing benefit that would
in normal course be made available to all such beneficiaries of existing retiral
benefits. On the facts of the present case, as seen earlier, employees like the
F appellant who had retired prior to the amendment of clause ( c) of Rule 22( I)
were not recipients of any existing benefit of pension. They were in fact out
of the pension scheme whatsoever being employees who had not completed
50 years of age even though they had completed 20 years pensionable
service. For such employees there was no retiral benefit till appropriate
G amendment of clause (c) of Rule 22(1). Consequently, the amended clause (c)
must be held to be conferring a new retiral benefit and not enhancing the
existing benefit for such employees. The aforesaid decision of this Court in
the All India Reserve Bank Retired Officers Association, case (supra) therefore,
also could not be effectively distinguished by learned counsel for the appellant
on the ground that in that case there was no pension scheme while in this
H case there was an existing pension scheme. He then invited our attention to
V.KASTUR!v.MANAGINGDIRECTOR,S.B.I.[S.B.MAJMUDAR,J.) 287
a decision of this Court in State of Punjab v. Justice S.S Dewan (Retired A
Chief Justice) and Ors., [1997] 4 SCC 569. In that case a three Judge Bench
of this Court, speaking through Nanavati, J., had to examine the question
whether the pension scheme as amended on 22.2.1990 available to introduction
of a new retiral benefit or it only liberalised an existing retiral benefit. In that
case the question of computation of pension of judicial officers governed by B
pension scheme came up for consideration. Before an amendment of the said
scheme on 22.2.1990, the retiring judicial officer was not entitled for computation
of his pension to club the period of practice at the bar before joining the
judiciary with judicial service thereafter. But by the amendment dated 22.2.90
the period of practice at the bar up to 10 years was thereafter permitted to
be treated as part of qualifying service for computation of pension of judicial C
officers. This amendment was considered to be conferring a new retiral benefit
and was not held to be a liberalisation of an existing benefit. The ratio of
Nakara 's decision was distinguished for coming to the aforesaid conclusion.
It was held that:

"Conceptually, pension is a reward for past service. It is determined D
on the basis of length of service and last pay drawn. Length of
service is determinative of eligibility and the quantum of pension. The
Formula adopted for determining last average emoluments drawn has
an impact on the quantum of pension. D.S. Nakara case involved the
change of formula for determining average emoluments and it was E
treated as liberalisation or upward revision of the existing pension
scheme. On parity of reasoning it can be said that any modification
with respect to the other determinative factor, namely, qualifying service
made with a view to make it more beneficial in terms of quantum of
pension can also be regarded as liberalisation or upward revision of
the existing pension scheme. If, however, the change is not confined F
to the period of service but extends or relates to a period anterior to
the joining of service, then it would assume a different character. Then
it is not liberalisation of the existing scheme but introduction of a new
retiral benefit".
G
The aforesaid observations which were strongly relied upon by learned counsel
,, for the appellant cannot be of any real assistance to him. Reason is obvious.
If an employee is already covered by an existing scheme and the main
determinative factor for computation of his pension, at the time of his retirement,
undergoes any modification with respect to the other determinative factor,
namely, qualifying service then such a modification can be treated as elongation H
288 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A of the already accrued retiral benefit. On the facts of the present case, the said
observations cannot be of any avail to the learned counsel for the appellant
for the simple reason that when the appellant retired in 1984, no right had
accrued to him to get pension from the fund as per Rule 22(1 )( c) as existing
then. He was not a pensioner at all when he retired. Consequently, any
B subsequent amendment in the said pension scheme by which a new class of
pensioners was brought in cannot be said to be enhancement of a prior
existing r~tiral benefit already earned by the concerned employee. Effort made
by learned counsel for the appellant by submitting that in the present case
the question is of in service experience and hence observations in the aforesaid
case help him cannot be of any avail as apart from the question of the
C consideration of in service experience only or clubbing it with pre-service
experience, the first requirement for earning the said benefit of clubbing would
be to postulate that the concerned employee becomes a pensioner at the time
of his retirement. If he was not a pensioner then he is out of the arena of
contest for getting any enhanced rate of pension subsequently. For him there
is no retiring pension at all. Hence the further question of enhancing the said
D rates in future does not survive for him.

Learned counsel for the appellant then invited our attention to a decision
of this Court in Dhanraj and Ors. v. State of J & K and Ors., [ 1998] 4 SCC
30. In the said case the question for consideration before the Bench of two
E learned Judges of this Court was as to whether the employees of erstwhile
State of Jammu & Kashmir who were later on absorbed by Jammu & Kashmir
State Road Transport Corporation were entitled to pensionary benefits in
tem1s of GO dated 3.10.86 when they retired from the service of the Corporation
prior to 9.6.81. Relying on the strength of the said Govt. Order it was held
by this Court that all erstwhile State employees would form one class and
F were entitled to get the benefit of the Govt. Order dated 3.10.86 even though
they might have retired prior to 9.6.81 which was the date on which Article
177 of J & K Civil Services Regulations was amended by adding 3rd proviso
to it. The aforesaid decision is rendered in the peculiar circumstances of its
own case and is based on the clear wordings of the Govt. Order dated 3.10.86
G by which it was mandated to give uniform treatment to all the retirees from
C11rporation who were earlier State Govt. servants. They formed one and same
class. It is in tile light of the aforesaid fact situation examined by this Court
in that Judgment that we have to appreciate the reasoning found in para 14
of the report on which strong reliance was placed by learned counsel for the
appellant. It has been observed tl!erein that even otherwise tl!ere was no
H justifiable criteria for the State Government to draw the line between those
V.KASTURlv. MANAGING DIRECTOR, S.B.I. [S.B.MAJMUDAR,J.] 289
who retired earlier and those who retired after 9.6.81. Both such set of A
employees were equally placed in the same Undertaking/Corporation temporary
in character and all having served in the organisations for more than 20 years.
These observations are to be appreciated in the light of the facts examined
by this Court in this decision. The State of Jammu & Kashmir was dealing
with the very same class of employees who were all ex-employees of the State B
Govt. who had subsequently been absorbed by the Corporation and thereafter
had retired. As all of them formed the same class, the same treatment was
required to be given to them in connection with the pensionary benefits made
available by the State Govt. The said decision cannot be of any avail to
learned counsel for the appellant as in the present case the question is
whether any uniform treatment can be given to non-pensioners like the C
appellant as is given to the pensioners who retired after the amendment of
Rule 22{l)(c) which came into force from 20th September, 1986. The next
decision on which reliance was placed by learned counsel for the appellant
is in the case of R.L. Marwaha v. Union of India and Ors., [1987] 4 SCC 31.
In this case a Bench of two learned Judges of this Court speaking through
E.S. Venkataramaiah, J., (as he then was) had to consider the question whether D
the ex-government servants who were holding pensionable posts when
absorbed by autonomous bodies could be treated differently while granting
benefit of counting their period of government service as part of qualifying
service for computing pension when they retired from the autonomous body.
It was held on the facts of this case that the benefit of Govt. Order should E
be extended to all pensioners who had rendered service earlier in the Central
Government and extra benefits given to the pensioners from the date of the
OM could not be denied to those pensioners who had retired prior to the
coming into operation of the said OM. The aforesaid decision clearly indicates
that once all the ex-government servants who were pensioners formed the
same class, then if extra benefit has to be given to these pensioners by F
subsequent OM then all such pensioners who were alive and available to
receive the benefit of the OM prospectively could not be denied the same
only on the ground that some of them had retired earlier to the OM and others
retired thereafter. This decision also proceeds on the admitted factual position
that all the erstwhile government servants were pensioners and were forming G
the same class and hence they were entitled to equal treatment when at the
time of coming into operation of the Govt. Order they were available to receive
the benefit of the said Govt. Order. The ratio of the decision of the Constitution
Bench in Nakara 's case would squarely get attracted to the fact situation
examined by this court in the aforesaid case but it cannot be of any avail to
the appellant who was not included in the very same class of pensioners who H
290 SUPREME COURT REPORTS (1998] SUPP. 2 S.C.R.

, .A had retired from Bank service. In the case of T.S. Thiruvengadam v. Secretary
to Government of India, Ministry of Finance, Department of Expenditure,
New Delhi and Ors., [1993] 2 SCC 174, on which reliance was placed by
learned counsel for the appellant, the fact situation was almost similar to the
one which was examined by this Court in R.L. Marwaha case (supra). In that
B case also the ex-Central Govt. servants were already having pensionary benefits
and were subsequently absorbed into public undertakings. The question was
whether any restriction on the applicability of the revised pensionary benefits
to the very same class of employees from a given date could be sustained
as fair and reasonable. In this connection it was held by Kuldip Singh, J,
speaking for the Division Bench of two Judges of this Court that:
c "The object of bringing into existence the revised tenns and conditions
in the memorandum dated June 16, 1967 was to protect the pensionary
benefits which the Central Government servants had earned before
their absorption into the public undertakings. Restricting the
applicability of the revised memorandum only to those who are
D absorbed after the coming into force of the said memorandum, would
be defeating the very object and purpose of the revised memorandum
and contrary to fair play and justice".

Thus, the aforesaid decision shows that once all the ex-government servants
E were fonning the same class of pensioners having already earned pensionary
benefits, whenever additional pensionary benefits were to be made available
to the same class it should be made available to all the members fonning the
same class whether they had retired earlier to 16th June, 1967 or subsequent
thereto. This judgment also falls in line with the ratio of the decision in
Nakara 's case which on the facts of the present case, as noted earlier, cannot
F be pressed in service by the appellant. Learned counsel for the appellant then
invited our attention to a Judgment of two Judge Bench of this Court in MC.
Dhingra v. Union ofIndia and Ors., [1996) 7 SCC 564. This Court in the said
decision examined a similar fact situation as was found in T. S. Thiruvengadam
case (supra). In that case an employee who was serving in the State service
G was subsequently selected as an employee of the Ministry in the Central
Government service. The question was whether while computing the quantum
of pension to be payable to him his earlier service in the State could be
clubbed or not. The Circular issued by the Central Government conferring the
benefit of such State service to only retirees after the date of issuance of the
circular, and not to the appellant before this Court who had retired earlier to
H the issuance of this circular, was held to be discriminatory if so interpreted.
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR,J.] 291
It was held that as the appellant was already forming a part of the same class A
of pensioners additional benefit for computation of pension on the basis of
the subsequent circular could not be denied to him as such denial would be
7 arbitrary and fall foul on the touchstone of Article 14 of the Constitution of
India. The ratio of Nakara 's case (supra) was pressed in service for coming
to the said conclusion. It becomes at once clear that the decision in the
aforesaid case was rendered in the light of the fact situation wherein the B
appellant was already a pensioner who had retired from service and when he
had survived during the time the said beneficial circular came into force, he
had to be given the said benefit even though he had retired prior to the date
of the circular otherwise equals would be treated inequally. As already seen
earlier such is not the fact situation in the present case. c
We may now tum to two decisions of this Court which have a direct
bearing on the result of these proceedings. In the case of Commander, Head
Quarter, Calcutta and Ors. v. Capt. Biplabendra Chanda, [1997] lSCC 208,
a two Judge Bench of this Court had to examine the new/revised Rules which
had reduced the requisite minimum qualifying service for earning pension D
while considering the case of a person who had retired earlier and was
ineligible to get pension under the Rules in force then. This Court held that
he could not be given eligibility for pension by virtue of the amended Rule.
In the said case, the Bench examined the fact situation wherein the claimant
was a Commissioned Officer. He retired on 18.5.1982. On the date of his
retirement only 2/3rd of pre-commissioned service was allowed to be counted E
towards qualifying service for earning pensionary benefits. The pension
Rules were amended with effect from 1.1.1986 and the full commissioned
service was directed to be taken into account for working out the qualifying
service. While the High Court allowed the writ petition based on Nakara 's
case (supra) this Court held that Nakara 's case has no application as the F
claimant was ineligible for grant of pension because on the date of his
retirement he did not possess the qualifying service as per the Rules then
existing. It becomes obvious, therefore, that when the person earlier retiring
from service is not eligible to get pension a~ per the Rules, then if by
subsequent prospective amendment of the Rules such class of persons are
brought within the sweep of pension provisions, these provisions have to be G
treated as a new scheme of pension which cannot apply to those employees
who retired prior to the advent of such a new pension scheme. The fact
situation in the present case is almost parallel. We do not see any reason why
the ratio of the said decision cannot be applied to the present case.

Shri Divan, learned senior counsel for the respondent also invited our H
292 SUPREME COURT REPORTS [1998) SUPP. 2 S.C.R.

A attention to another decision of this Court in Govt. of T.N. and Anr. v. K.
Jayaraman, [1997) 9 SCC 606, wherein a Bench of two Judges of this Court·
presided over by K. Ramaswamy, J, had to examine a similar question. In that
case the respondent at the time of his retirement was not eligible to get the
benefit of pension scheme. The pension Rules were subsequently amended
B after his retirement and as he had survived after the amendment of these
pension Rules, he put forward his claim for pension at least from that date.
The Central Administrative Tribunal, Madras accepted this request of the
respondent. While up-turning the decision of the Tribunal, this Court held
that:

C "............. As per the pre-existing Rules, the government servant was
required to put in 30 years of qualifying service for pensionary benefits.
The Rules came to be amended by GOMs No. 1537 which came to be
effective from 13-11-1972. It was stated therein that the Government,
may by giving him notice of not less than three months in writing or
three months' pay and allowances in lieu of such notice, after he has
D attained the age of fifty years or after he has completed twenty-five
years of qualifying service retire any government servant. Any
government servant who has attained the age of 50 years or who has
completed 25 years of qualifying service may also likewise retire from
service by giving notice of not less than three months in writing to
E the appropriate authority. This rule has come into force, as stated
earlier, w.e.f. 13-11-1972...."

It was held that the respondent who had voluntarily retired prior thereto was
not entitled to the benefit of the said rule. The fact situation in the present
case also is parallel to the one examined by this Court in the aforesaid
F decision. We may also lastly refer to a decision of two Judge Bench of this
Court in Union of India and Ors. v. Lieut (Mrs.) E. /acts, [1997] 7 SCC 334.
Sujata V. Manohar, J, in that case examined liberalised pension scheme by
which the group of employees who were earlier not covered by the pension
scheme were conferred benefit from a given date. As the respondent before
G the Court had already retired prior to that date, he was held not entitled to
benefits of liberalised pension scheme. It was held that such a respondent
could not claim of discriminatory treatment in the grant of pension because
there was no provision for grant of pension in the terms and conditions of
her appointment which she had herself accepted. The appellant's case also
falls in the same category of cases which were examined in the aforesaid
H decision by this Court. This decision also, therefore, goes in favour of the
V. KASTURI v. MANAGING DIRECTOR, S.B.l. [S.B. MAJMUDAR, J.] 293
respondent and against the appellant. A
It is now time for us to take stock of the situation. From the aforesaid
resume of relevant decisions of this Court spread over years to which our
attention was invited by learned counsel for the respective parties, the following
legal position clearly get projected.
B
Category I

If the person retiring is eligible for pension at the time of his retirement
and if he survives till the time by subsequent amendment of the relevant
pension scheme, he would become eligible to get enhanced pension or would
become eligible to get more pension as per the new formula of computation C
of pension subsequently brought into force, he would be entitled to get the
benefit of the amended pension provision from the date of such order as he
would be a member of the very same class of pensioners when the additional
benefit is being conferred on all of them. In such a situation the additional
benefit available to the same class of pensioners cannot be denied to him on D
the ground that he had retired prior to the date on which the aforesaid
additional benefit was conferred on all the members of the same class of
pensioners who had survived by the time the scheme granting additional
benefit to these pensioners came into force. The line of decisions tracing their
roots to the ratio of Nakara 's case (supra) would cover this category of cases.
E
Category //:

However, if an employee at the time of his retirement is not eligible for
earning pension and stands outside the class of pensioners, if subsequently
by amendment of relevant pension Rules any beneficial umbrella of pension
scheme is extended to cover a new class of pensioners and when such a F
subsequent scheme comes into force the erstwhile non-pensioner might have
survived, then only if such extension of pension scheme to erstwhile non-
pensioners is expressly made retrospective by the authorities promulgating
such scheme; the erstwhile non-pensioner who has retired prior to the advent
of such extended pension scheme can claim benefit of such a new extended G
pension scheme. If such new scheme is prospective only, old retirees non-
pensioners cannot get the benefit of such a scheme even if they survive such
new scheme. They will remain outside its sweep. The decisions of this Court
covering such second category of cases are: Commander, Head Quarter,
Calcutta and Ors. v. Capt. Bip/abendra Chanda, [1997] 1 SCC 208 (supra)
and Govt. of Tamil Nadu and Anr. v. K. Jayaraman, 606 [1997] 9 sec 606 H
294 SUPREME COURT REPORTS (1998) SUPP. 2 S.C.R.

A (supra) and others to which we have made a reference earlier. If the claimant
for pension benefits satisfactorily brings his case within the first category of
cases he would be entitled to get the additional benefits of pension computation
even if he might have retired prior to enforcement of such additional beneficial
provisions. But if on the other hand the case of a retired employee falls in
the second category, the fact that he retired prior to the relevant date of.
B coming into operation of the new scheme, would disentitle him from getting
such a new benefit.

The appellant falls in the second category of cases. Consequently, no
fault can be found with the judgment of the Division Bench of the High Court
C non-suiting the appellant.

In the result, this appeal fails and is dismissed. In the facts and
circumstances of the case, there will be no order as to costs.

v.s.s. Appeal dismissed. -

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