The State of Tripura & Ors. vs Smt. Anjana Bhattacharjee & Ors.

The State of Tripura & Ors. vs Smt. Anjana Bhattacharjee & Ors.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.  5114 OF 2022
The State of Tripura & Ors.       …Appellant(s)
Versus
Smt. Anjana Bhattacharjee & Ors.    …Respondent(s)
J U D G M E N T
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 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
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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
under: ­
2.1 That the State of Tripura has enacted/framed the Tripura
State 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: ­
“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 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   6th  Central   Pay
Commission’s   recommendations,   the   State   of   Tripura
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issued   a   notification   dated   02.02.2010   and   introduced
revised pay structure with 2 Band Pay Rs. 15600­39100
and 37400­67000 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 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 time­to­time 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.
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, whichever is later.     
3
2.4 That   respondent   No.  1  herein  –   original   writ   petitioner
retired as Reader­cum­Vice Principal on 28.02.2007 upon
attaining   age   of   superannuation.   Her   pension   was
computed at Rs. 9,150/­ based on her 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 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   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. 
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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   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 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 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
5
from 01.01.2006 to 31.12.2008 and to grant the actual
benefit of the revised pension from 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 varying, modifying, or annulling it, based on
however   sound   and   good   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 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.
6
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 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 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 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
7
precluded   from   interfering   with   the   policy   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 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. 
3.3 It is further submitted that the financial burden on the
State can be a valid ground to fix a cut­off 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.   
8
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.
  
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 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
therefore,  the  State  formulated  a   policy   decision   to   the
effect   that   the   revised   pension   shall   be   paid   from
9
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 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   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 28­02­2007 so her revised
pension upto 31­ 12­2008 was computed notionally.
The claim of the petitioner is to allow her arrears of
pension as per revised rates for the period from 01­03­
2007   to   31­12­   2008.   It   is   a   fact   that   Financial
condition   of   the   State   has   been   passing   through
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 Non­Plan expenditure. The funding by the
Central Government is based on the recommendations
of   the   Finance   Commission.   Finance   Commission
under   estimated   State’s   projections   of   Non­plan
revenue expenditure which included salaries, pension
and   interest   payment   (Non­Flexible   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 assessed a cumulative expenditure of Rs.
2779.09 crores which was Rs. 1165.70 less than the
10
actual   assessment   by   the   State   Government.   12th
Finance Commission calculated pension at Rs. 342.01
crores during the year 2008­09 and Rs. 413.83 crores
during   the   year   2009­10.   This   is   an   increase   of
approximately 9% over 2007­08 and 21% over 2008­
09.   However,   as   per   actual   implication,   the
expenditure during 2008­09 and 2009­10 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 Non­Plan 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 01­01­2009. All other cases of retirement falling
within   01­01­2006   to   31­12­2008   were   allowed
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 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:
­ 
“[12]   We   have   thoroughly   scrutinized   the   foundation   as
projected by the state­respondents 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 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
11
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 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   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   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   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. 
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5.3 Whether the financial crunch/financial constraint due to
additional financial burden can be a valid ground to fix a
cut­off 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 cut­off date for grant of benefit of
increased quantum of death­cum­retirement 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 or die on or after 1­4­
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.
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 (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
13
a cut­off date. In our opinion, it cannot be said that
this cut­off date was fixed arbitrarily or without any
reason. The High Court was clearly in error in allowing
the writ petitions and substituting the date of 1­1­
1986 for 1­1­1990.” [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   (L&S)   717]   this   Court   observed   that,
financial   constraints   could   be   a   valid   ground   for
introducing   a   cut­off   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   1­7­1986,   and   those   who   were   in
employment on the said date. It was held that 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   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),   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
14
introducing   a   cut­off   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 cut­off
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.
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 cut­off
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. 
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, 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
15
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   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.            
………………………………….J.
[M.R. SHAH]
NEW DELHI; ………………………………….J.
August 24, 2022. [B.V. NAGARATHNA]
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