KRISHENA KUMAR AND ANR. ETC. ETC. v. UNION OF INDIA AND ORS

Citation: [1990] 3 S.C.R. 352

Court: Supreme Court of India

Bench: SABYASACHI MUKHERJI, B.C. RAY, M.H. KANIA, K.N. SAIKIA, S.C. AGRAWAL

Case summary

This analogous cluster of five writ petitions and one special leave petition involves a common question of law.

Judgment text

The Judgment of the Court was delivered by K. N. SAIKIA, J. This analogous cluster of five writ petitions and one special leave petition involves a common question of law. The petitioner in Writ Petition No. 352 of 1989 is the President of the All India Retired Railwaymen (P. F. Terms) Association and the petition has been filed in a representative capacity on behalf of all the members of the Association who retired with Provident Fund benefits. Writ Petition No. 361 of 1989 has been filed by three individual retired Railway employees who also retired with Provident Fund benefits. The petitioner in Writ Petition No. 1285 of 1986 retired as Block Inspector of Northern Railway on 7. 1. 1968, a non-pensionable post. All the petitioners except petitioner No. 5 in W. P. No. 1575 of 1986 retired from Railway service high posts. Petitioner No. 1 retired as • Additional Member, Railway Board on 5. 11. 1960 with Provident Fund benefits. Petitioner No.

2 was Member, Railway Board and similarly retired on 1. 3. 1968 opting for Provident Fund Scheme as at that time the maximum monthly pension was Rs. 675 only. Petitioner No. 3 similarly retired as General Manager on 5. 12. 1960. Petitioner No. 4 retired as Member (Staff) Railway Board and Ex-officio Secretary to the Government of India on 30. 6. 1977 opting for the Provident Fund Scheme. Petitioner No. 5 also retired on 19. 6. 1972 opting for the Provident Fund Scheme. Petitioner No. 6 retired on 28. 8. 1962 as Director KRISHENA KUMAR v. U. 0. I. (SAIKIA, J. ] 357 ~ Health, Railway Board opting for Provident Fund Scheme. Petitioner - No. 7 similarly retired on 17. 2. 1968 as Director, R3iiway Board. Petitioner No. 8 retired as General Manager, Indian Railways on 15. 10. 1966 with the Contributory Provident Fund Scheme. The petitioners in Writ Petition No. 1165 of 1989 are also similarly retired persons. The petitioner in Special Leave Petition (Civil) No.

8461 of 1986 retired as Assistant Auditor, with Provident Fund benefits. ~is claim to switch over to pension after retirement was rejected. The petitioners are thus retired railway employees who were covered by or had opted for the Railway Contributory Provident Fund Scheme. It is the petitioners' case that before 1957 the only scheme for retirement benefits in the Railways was the Provident Fund Scheme wherein each employee had to contribute till retirement a portion of his ·annual -income towards the Provident Fund and the Railways as the employer would make a matching contribution thereto. This provident Fund Scheme was replaced in the year 1957 by the Pension Scheme whereunder the Railways would give posterior to his retirement certain monthly pension to each retired employee instead . of making prior . contribution to his Provident Fund. It is stated that the employees who entered Railway service on or after 1. 4.

1957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme. In so far as the employees who were already in service on 1. 4. 1957, they were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits on condition that the matching Railway contribution already made to their Provident Fund accounts would revert to the Railway on exercise of the option. It is the petitioners' case that till 1. 4. 1957 or even sometime thereafter, the pensionary benefits and the alternative Contributory Provident Fund benefits were considered to be more or less equally -\. beneficial, wherefore, employees opted for either of them. That the benefits of the two were evenly balanced was evidenced by the Railway Board circular dated 17. 9. 1960 which gave an option to the employees covered by the Provident Fund Scheme to switch over to pension scheme and vice versa. Mr.

Shanti Bhushan, the learned counsel for the petitioners in Writ Petition Nos. 352 and 361of1989, submits that between 1957 and 1987 the pensionary benefits of Railway employees were enhanced on several occasions by different ways such as altering the formula for computing the pension, by including dearness allowance in the pay for computing pension, by removal of the ceiling on pension, and by intro- ducing or liberalising the Family Pension Scheme etc. The Railway, it ... is urged, had expressed no intention of extending the benefits of this' liberalised pension to those employees who had already retired. At the time when the option was given to choose between pension and Provident Fund, the employees had no idea that in future improvements would be made to either of them. However, it is stated, this Court in D. S. Nakara and Ors. v.

Union of India, [1983) 2 SCR 165 held that the benefit of any liberalisation in computation of pension would also have to be extended to those employees who had already retired as they were similarly situated with those who were yet to retire. It is submitted, that even though Nakara's case related to Central Government employees, the Railways also implemented the Judgment and extended the liberalised pension benefits even to those employees who had retired long before the liberalisations concerned were introduced. The decision to implement Nakara's Judgment to Railway employees is admittedly contained in G. O. No. Fl (3)-EV/83 dated 22. 10. 1983.

This has, according to the learned counsel, given rise to the "strange situation" namely, that while two alternative benefits of provident fund and pension were more or less equal at the time when the petitioners were to make their choice, the pensions have thereafter been liberalised manifold to the benefit of the pension retirees, whereas no similar benefits have been extended to those who retired opting for Provident Fund, hereinafter called 'the P. F. retirees'. It is asserted that due to successive liberalisations of pensions, the pension retirees derived manifold benefits while the P. F. retirees' benefits remained stagnant. It is submitted that had the petitioners, all of whom are P. F. retirees, known that pensionary benefits might subsequently be so increased, they would no doubt have opted for pension instead of Provident Fund. The following twelve notifications given such options are referred to: Date ofNotification Cut-off date chosen 1. 17. 09. 60 01. 07. 59 2. 26. 10.

62 01. 09. 62 3. 03. 03. 66 31. 12. 65 4. 13. 09. 68 01. 05. 68 5. 23. 07. 74 01. 01. 73 KRISHENA KUMAR v. U. 0. 1. [SAi. KIA, J. ] 359 6. 23. 08. 79 31. 03. 79 ·~ ' 7 Ol. 09. 80 23. 02. 80 8. 04. 10. 82 31. 08. 82 9. 09. 11. 82 31. 01. 82 -"'( ~ "( 10. 13. 05. 83 31. 01. 82 n rn. o6. s5 31. 03. 85 12. 08. 05. 87 01. 01. 86 It may be 11oted that in case of each option the cut-off date was anterior to the respective dates of. announcement, and as a result, employees who retir. ed after the cut-off date (specified date) and before the notification date were also m. ade eligible for exercising the option despite the fact that they already retired in the meantime. From . the above, the 'main legal point' that arises, submits Mr. Shanti Bhushan, is that the Railways issued the above notification giving option to certain P. F.

retirees after the respective cut-off dates to opt for the Pension Scheme even after their retirement, but the same options were not given to other similarly situated P. F. retirees beyond the respective cut-off dates. This, it is submitted, is clearly discriminatory and violative of Art. 14 of the Constitution and deserves to be struck down. It is·contended by the petitioners that each of the above notifications including the last one, dated 8. 5. 1987 had given a fresh option to some of the P. F. retirees while denying that option to other P. F. retirees who were identically placed but were separated from the rest by the arbitrary cut-off date. Each of the notifications specified a date and provided that the P. F. retirees who retired on or after that date would have fresh option of switching over to the pensionary benefits even though they had already retired, and also had already drawn the entire Provident Fund benefits due to thein. It is also contended that .

G the specified dates in these notifications having formed the basis of the discrimination between similarly placed P. F. retirees those were arbitrary and un-related to the objects sought to be achieved by giving of the option and were clearly violative of Art. 14 and also of the principle laid down in Nakara's case, which according to counsel, is that pension retirees could not be . divided by s. uch arbitrary cut-off dates for the purpose of giving benefits.. to some and not to other ~· similarly situated employees; and that by analogy the rule is equally applicable to the Provident Fund retirees as a class. Mr. Kapil Sibal, the learned Additional Solicitor General refuting the argument submits that each of the options was meant to give the P. F. retirees after the speCified dates option to switch over to Pension Scheme and that each specified date had nexus with the reason for granting the particular option. He relies on the following statements to substantiate his submssion.

STATEMENT SHOWING PENSION OPTIONS GIVEN TO RAILWAY EMPLOYEES - scheme. Extension F(P) 63. PN-1/ Extended upto 47 dated 4. 7. 64 30. 9. 64 .. 5. VOption F(P)65. PN1/4131. 12. 65to In pursuance dated 3. 3. 66 30. 6. 66 of deci- (For those in sion to service on literalise --· 31. 12. 65 the Family Pension Scheme by -_. t extending it to employees . who die while \ in service. - ). _ 6. VI Option F(E) III. 68. PN-1. 5. 68 to 31. 12. 68In pursuance l/2dated 13. 9. 88(Forthosein of decision service on to change the 1. 5. 68 definition of HPay" w. e. f. 1. 5. 68 for the purpose ·---... _, of pensionary benefits. Extensions F(E) III. 68 PN- Extended upto l/2dated31. 1. 69 31. 3. 69 --{' 7. VII Option F(E) III. 71. PN- 15. 7. 72 to As a result 1/3 dated 15. 7. 72 21. 10. 72 of demands (For those ir from organiservice on sedlabour. 15. 7. 72 'r 8. VIII Option PC-III. 73. PN/3 l. 1. 73to22. 1. 75Consequent )r dated23. 7. 74 (For those in to acceptance service on III Pay 1. 1.

73) Commissions' Recommendations. Extensions PC-III. 73. PN/3 Extended upto Extended dated 18. 1. 75 & 30. 6. 76& because by - -- effect that all Railway employees who were in service could opt for pension scheme within a period of 6 months. This option was extended upto 16. 9. 64: (v) Pension Option dated3. 3. 66 Family Pension Scheme was further liberalised for employees who die while in service. In view of this improvement in Pension Scheme, pension option under Railway Board's orders dated 3. 3. 66 was given to employees who were in service on 31. 12. 65. Since the liberalisation in Family Pension Scheme came· into effect from 1st January, 1966, the option was open for employees who were in service on 31. 12. 65 and was open upto 30. 6. 1966. (vi) Pension Option dated 13. 9. 68 ~ \_ The definition of 'Pay' for pensionary benefits was changed from 1. 5. 68, through Board's orders dated 13. 9. 68. In vie. w_ofthis, a further option was given on 13. 9.

68 to Railway employees who were in service on and after 1. 5. 68 to opt for the Pension Scheme. This option was open upto 31. 12. 68. This was further extended upto 31. 3. 69. (vii) Pension Option dt. 15. 7. 72 On representation from the recognised labour federations that many employees had not clearly understood the liberalisation introduced in the pension scheme, a fresh option was allowed on 15. 7. 72 to all serving employees. This was open till 21. 10. 72. (viii) Pension Option dated 23. 7. 74 This option was based on similar orders issued by Ministry of Finance. The rationale behind this option was that the recommenda· tions of the 3rd Pay Commission became effective from 1. 1. 73 but pay structure of all employees who were in service on 1. 1. 73 got altered thwugh orders issued piecemeal from time to time. There were liberalisations in the pension scheme also in the form of increase in the .

, amount of gratuity as also introduction of the concept of Dearness Relief made available to the pensioners. This option was made avail· able to all employees who were in service on 1. 1. 73. Employees who had retired earlier did not get affected in any way by the recommenda· tions of the 3rd Pay Commission and were accordingly not given this option to come over to Pension Scheme. This option was available upto 22. 1. 75, a period of 6 months. The option given vide letter of 23. 7. 74 was extended from time to time till 31. 12. 78. The reason why this extension had to be allowed was that the revised pay scales recommended by the Pay Commission for many of the categories could not be finalised and notified. Till such time, the revised pay scale admissible to each category was made known, it was impossible for the concerned staff to assess the benefit admissible for opting for the revised scale as also for the pension option.

The pension option had therefore to be extended from time to time in this manner. The letters authorising extension of the date of option were not very clearly worded with the result that the pension option during the periods of extension was granted even to those who had retired before such extension became admissibie but who were in service on 1. 1. 73. The clarification was accordingly issued to all the Railways stating that the subsequent orders extending the date of option were applicable to serving employees only, but the cases already decided otherwise may be treated as closed and need not be opened again. It was subsequently represented by the organised labour that the options actually exercised upto 31. 12. 78 should be treated valid even though such cases may not have been decided by that date. This was agreed to and orders issued accordingly. (ix) Pension Option dated 23. 8. 79 A liberalised formula and slab-system for calculation of pension KRISHENA KUMAR 14 li. 0. 1.

[SAJKIA, J. ] 361 effective from 31. 3. 79 was notified by Riilway Board on 1. 6. 79. ~ Accordingly, orders were issued on 23. 8. 798nowingpensio11 option to those Railway employees who were in service on 31. 3. 79. This option was initially open till 22. 2. 80 but was extended subsequently to enable wider participation upto 22. 2. 1981. (x) Pension Option dated 4. 10. 82 Orders were issued by Board on 30. 4. 82 ordering that a portion ~ of Dearness Allowance will be treated as pay for retirement benefits w. e. f. 31. 1. 82. Accordingly a fresh option was allowed on 4. 10. 82 which could be exercised by Railway employees who were ill service on 31. 1. 82. This option was available upto 31. 8. 83. (xi) Pension Option dated 18. 6. 85 Orders were issued by Railway Board on 17. 5. 85 merging Dearness Allowance to the price. index upto 568 with pay for the purpose of retirement benefits and raising the ceiling of DCRG from 36,000 to 50,000 w. e. f. 31. 3.

85: Accordingly, another option was granted to the Railway employees who were in service on 31. 3. 85. This option was available for a period of 6 months i. e. upto 17. 12. 1985. --~:»/ (xii) Pension Option dated 8. 5. 87 , Consequent upon acceptance of the recommendatiOns of the 4th Pay Commission the revised pr. y·scales were notified on 19. 9. 86 'and 14. 3. 87, effective from 1. 1. 1986. Accordingly another pension option was given to the Railway employees who were in service on 1. 1. 86 vide orders of 8. 5. 87. Under these orders those who did not specifically opt out ofpension scheme by 17. 12. 87,. ;.. ould he automatically deemed tci ~\.. have opted for the pension scheme. We may now examine these options. The Railway Board's letter No. F(E) 50-RTl/6 dated November 16, 1967 introduced the_pension scheme for railway servants. It said that . the President had been pleased to decide that the pension rules, as liberalised vide Railway Board's Memo No. E-48 OPC-208 dated 8. 7.

1950 as amended or clarified from time to time should apply "(a) to all railway servants who entered service on or after issue of that letter and (b) to all non-pensionable railway servants who were in service on 1. 4. 57 or have joined railway service between that date and the date of issue of the order. " The Railway servants referred to in para (b) were required to exercise an unconditional and unambiguous option on the prescribed form on or before 31. 3. 1958 electing for the pensionary benefits or retaining their existing retirement benefits under the State Railway Provident Fund Rules. It further said that any such employee from whom an option form prescribed for the employee's option was not received within the above time limit or whose option was incomplete or conditional or ambiguous shall be deemed to have opted for the ) pensionary benefits and if any such employee had died by that date or on or after 1. 4.

57 without exercising option for the pensionary scheme, his dues would be paid on the provident fund system. The period of validity of this option was first extended upto 30. 6. 58, 31. 12. 58, 31. 3. 59 and lastly upto 30. 9. 59. There could, therefore, be no doubt that those who did not opt for ·the pension scheme had ample opportunity to choose between the two. The second option was given by the Board's letter No. PC-60/ RB/2/2 dated 17. 9. 60 to elect the retirement benefits under the Provident Fund Rules or the Pension Rules. All Railway servants who were in non-pensionable service on 15. 11. 57 prior to the introduction of the pension scheme on the Railways and who were still in service including (IPR) on 1. 7. 59 were granted this option to have their retirement benefits regulated by the State Railway Provident Fund Rules or the Railway Pension Rules. Every eligible railway servant was given the option to change over from P. F. benefits to pensionary benefits or vice versa.

It clearly said that Railway servants who did not exercise the option would continue to be eligible for the P. F. benefits or pensionary benefits as the case might be for which he was already eligible. The option was subject to the special conditions stated therein. Where the Railway servants opted for pensionary benefits, the part of the Government contribution together with interest thereon and/or special contribution to the Railway servants' P. F. account had already been paid, the excess of the amount over the gratuity due under the Pension Rules should be refunded to the Government. It clearly said that: "the option once exercised shall, however, be final and inrevocable irrespective of the decision taken on that issue. " If a Railway servant opted for P. F. benefits and if the payment of pensionary benefits had already commenced, further payment would be stopped and his P. F. account would be reconstructed as if he had never opted for pensionary benefits.

The period of validity of option was extended upto 30. 6. 61, and then upto 31. 12. 61. This letter clearly indicated the reason for giving this option as "under the revised pay structure introduced from 1. 7. 59, the bulk or whole of the D. A. previously payable KRISHENA KUMAR v. U. 0. 1. [SAIKIA. J. ) 369 have been absorbed into pay and a number of changes are also being made in the rules regarding retirement benefits. " ~ In pursuance of the 3rd Pay Commission Report, Government decided to give opportunity to opt for liberalised Railway Pension Rules including benefits of Family Pension Scheme, 1964, to Railway employees, who had retained the contributory P. F. Rules and who -. ( were in service on 31. 3. 1979 and retired on or after that date provided they gave in writing their option within six months. Employees who ~ had retired under the said State Railway P. F.

(Contributory) Rules, '1 their option would be valid if they refunded the entire Government contribution and the excess, if any, of special contribution to P. F. received by them over D. C. R. G. due to them under Pension Rules. In ~ case of deceased employees request could be made for option by valid n;,minee and in the absence. qf him by legal guardian. Thereafter a number of representations were made and the Government extended > the time for giving Option for adopting Pension Scheme in place of contributory P. F. Scheme. As a result of treatment of a portion of ADA as pay for purpose of retirement bene_fits and consequently enhan~ment in pensionary benefits, the date for giving option was further extended by 28. 2. 1983 only for these employees who were in service on 31. 8. 1982 and who quitted/retired on or after that date. The date of option was further -~>-- extended from time to time. Keeping in..

view the treatment of entire DA upto the price index line of 568 as pay for retirement benefit with effect from 31. 3. 85, removal of ceiling limit of Rs. 1500 on pension and raising of ceiling of DCRG from Rs. 36,000 to Rs. 50,000 the date of option for employees who were in service on 31. 3. 85 and onwards and still governed by S. R. P. F. (Contributory) Rules, was further extended upto 17. 12. 1985 provided the amount of death-cum-retirement gratuity and the excess, if any, of special contribution over the D . C. R. G. , was refunded. The 12th option was as under. "Government of India/Bharat Sarkar Ministry of Railways/Rail Mantralaya (Railway Board) Machine No. PC-IV/87/13/881 I No. PC-IV/87/Imp. PW 1 • The General Managers, RBB/S. No. 116/87 All Indian Railways, New Delhi, dated 8th May, 1987 ~ Production Units etc. as per mailing list.

Subject:- Change over of Railway employees from the SRPF (Contributory Scheme) to Pension Scheme-Imple- ·;r mentation of the recommendation of the IV Central Pay Commission-regarding. ,.. The Railway employees who are covered by the SRPF (Contributory Scheme) CPF Scheme have been given repeated options in the past to come over the Pension Scheme. However, some Railway employees still continue under the CPF Scheme. The Fourth Central Pay Commission has now recommended that all CPF beneficiaries in ~ service on January 1, 1986, should be deemed to have come over to the Pension Scheme on that date, unless they specifically opt out to continue under the GPF Scheme. 2. After careful consideration the President is pleased to decide that the said recommendation shall be accepted and implemented in the manner hereinafter indicated. 3. 1. All CPF beneficiaries, who were in service on 1. 1.

86 ~ and who are still in service on the date of issue of these orders, will be deemed to have come over to the Pension Scheme. I i 3. 2. The employees of the category mentioned above will, however, have an option to continue under the CPF Scheme, if they so desire. The option will have to be exer- _jcised and conveyed to the concerned Head of Office by 30. 9. 87, in the form enclosed, if the employees wish to continue under the GPF Scheme. If no option is received by the Head of Office by the above date the employees will be deemed to have come over to the Pension Scheme. 3. 3. The CPF beneficiaries, ·who were in service on 1. 1. 1986, but have since retired and in whose cases retirement benefits have also been paid under the CPF Scheme, will have an option to have their retirement benefits calculated under the Pension Scheme provided they refund KRISHENA KUMAR '· U. 0. 1. lSAIKIA, J.

] 371 to the Government the Government contribution to the Contributory Provident Fund and the· interest thereon, drawn by them at the time of settlement of the CPF Account. Such option shall be exercised latest by 30. 9. 1987. 3. 4. CPF beneficiaries, who were in service on 1. 1. 1986 but were since retired, and in whose cases the CPF Account has not already been paid, will be allowed retirement benefits as if they were borne on pensionable establishments, unless they specifically opt. by 30. 9. 87, to have their retirement benefits settled under the CPF Scheme. 3. 5. Cases of CPF beneficiaries, who were in service on 1. 1. 86, but have since died, either before retirement or after retirement, will be settled in accordance with para 3. 3. or 3. 4 above, as the case may be. Options in such cases will be exercised, latest by 30. 9.

87, by the widow/widower and, in•the absence of widow/widower, by the eldest surviving member of the family, who would have otherwise been eligible to family pension under the Family Pension Scheme, ifsuch Scheme were applicable. 3. 6. The option, once exercised, shall be final. 3. 7. 4. 1. 4. 2 In the case of employees referred to above, who ccime over or are deemed to have come over to the Pension Scheme, the Government's contribution to the CPF together with the interest thereon, credited to the CPF Account of the employee, will be resumed by the Government. Special contribution to Provident Fund if already paid in these cases, will be adjusted against the death/ retirement Gratuity, payable under these orders. The employee's contribution, together with the interest thereon at his credit in the CPF account, will be transferred to the CRPF (Non-Contributory) Account, to be allotted to him, on his coming over to the Pension Scheme. 4. 3. . 5.

A proposal to grant ex-gratia payment to the CPF beneficiaries, who retired prior to 1. 1. 1986 and to the families of CPF beneficiaries who died prior to 1. 1. 1986, on the basis of the recommendations of the Fourth Central Pay Commission, is separately under consideration of the Government. The said ex-gratia payment, if and when sanctioned, will not be admissible to the employees or their families who opt to continue unner the CPF Scheme from 1. 1. 1986 onward. )r- 6. (G. Chatterjee) Executive Director, Pay Commission Railway Board. " The learned Additional Solicitor General stated that each option was given for stated reasons related to the options. On each occasion time was ~ven not only to the persons in service on the date of the Railway Board's letter but also to persons who were in service till the stated anterior date but had retired in the meantime. The period of validity of option was extended in all the options except Nos. 3rd, 4th, 5th and 7th.

We find the statements to have been substantiated by facts. The cut-off dates were not arbitrarily chosen but hacl ~exus with the purpose for which the option was given. Mr. Shanti Bhushan however submits that applying the law laid down in Nakara's case this Court should simply strike down or read down paragraph 8. 1 of the above 12th option dated 8. 5. 1987. That paragraph said that all C. P. F. beneficiaries who were in service on 1. 1. 86 and who were still in service on the date of issue of the order would be deemed to have come over to the pension scheme. It is submitted that once this limiting requirement is removed all the C. P. F. beneficiaries shall be eligible and will be deemed to have come over to the pension scheme. As the basis or justification for striking or reading down paragraph 3.

1 on Nakara's ratio, it is urged that all the Railway employees numbering about 22 Iakhs comprising 16,22,000 in service and about 6 lakhs pensioners constitute one family and must be treated as one class as the Government's obligation to look after the retired Railway employees both under the pension scheme and the provident fund scheme being the same, they could not be treated differently. Any differential treatment will be discriminatory and violative of Article 14 of the Constitution of India. In Nakara's case the date arbitrarily KRISHENA KUMAR v. U. 0. 1. [SAIKIA, J. ] 373 chosen was struck down and as a result the revised formula for computing pension was made applicable to all the retired pensioners. The same principle, it is urged, has to be extended to the provident fund retires also otherwise there would be discrimination. It is stated that though at the time of choosing between provident fund and pension _,. ,.

;cheme both the alternative appeared to be more or less equal and the retired provident funders took their lump sum yet subsequently stage Ly stage th "We have received a number of suggestions from indivi- t" duals, associations and other organisations in respect of the CPF scheme. It has been stated that the objective of both the schemes, viz. , pension scheme and the CPF scheme being the same, there should not be differences in the matter of retirement benefits between the pensioners and the beneficiaries of the CPF. It has been urged that the liberalisation in the pension scheme needs to be appropriately .. ( extended to the beneficiaries under the CPF scheme. Since the schemes are structurally different, equality of benefits under the two schemes is not feasible. We are, however, of the view that the CPF beneficiaries who have retired on low scales of pay deserve some measure ofrelief.

We according recommend that all the CPF beneficiaries who have retired prior to March 31, 1985 with a basic pay upto Rs. 500 per mensem may be given an ex gratia payment of Rs. 300 per mensem which will be in addition to the benefits already received by them under the CPF scheme. The ex gratia payments and the periodic increases already received by those who retired on pay upto Rs. 500 may be so adjusted that the total ex gratia amount is not less than Rs. 300. We further recommend that ex gratia amount of Rs. 300 per mensem may be reviewed as and when dearness relief is I sanctioned to pensioners. '' "9. 7. Railways have suggested grant of ex gratia payment to the widows and dependent children of deceased employees covered by CPF scheme at 50 per cent of the rate for ex gratia payment. We agree and recommend accordingly for those getting pay upto Rs. 500 per mensem.

The eligibility of widow and minor children for the purposes of this relief may be same as laid down under the pension rules. " "9. 8. In so far as the CPF beneficiaries still in service on KRISHENA KUMAR v. U. 0. 1. [SAIKIA, J. ] 387 January 1, 1986 are concerned, we recommend that they should be deemed to have come over to the pension scheme on that date unless they specifically opt out to continue under the CPF scheme. The CPF beneficiaries who decide to continue to remain under that scheme should not be eligible on retirement for ex gratia payment recommended by us for the CPF retirees. Government may, howeyer, extend the benefit of DCRG to CJ'F beneficiaries in pt):ier departments on the same lines as in railways. " "9. 9. Government may also consider the feasibility of giving an option to all other CPF retirees who are not _cov_ered under paragraph 9. 6 above to come over to the pension scheme with effect from January 1, 1986 subject to their f.!!!

'unding to government the entire amount of government contribution inclusive of interest thereon credite_d to their Provident Fund account at the time of their r~tirement. " We have no doubt about the above recommendations receiving due consideration by the Union of India. The 12th Option already . given has to be viewed in this context. _. ~ __y- The next question debated is that of financial implications. It is submitted that given the fact that the budget for the year 1990-91 for disbursement of pension is Rs. 900 crores (as per page llof the Budget of the Railway Revenue and Expenditure of the Central Government for 1990-91), the additional liability which would arise by giving relief to the Petitioners would be insignificant in comparison. According to the petitioners as per their affidavit dated 15. 9. 88, the additonal liability would come to Rs. 18 crores per annum and this figure would - \. steadily decrease as the number of P. F.

retirees diminishes every year due to the fact that this question arises only with respect to very old retirees, and a substantial number of them pass away every year. The Government in its affidavit dated 21. 9. 88 has stated that the additional liability as far as the Railway employees are concerned, would be Rs. 50 crores a year. This is based on the assumption that there are 79,000 surviving P. F. retirees. Apart from the fact that this number of 79,000 was based on calculations made in 1988, and wouId be greatly reduced by this time, the petitioners submit that the actual number of survivors would only be about 38,000. Thus, the actual burden ·would be less than half. Further, even assuming that the figure of 79,000 put forth by the Government is correct, the average annual expenditure per retiree for pension calculated by the Government is --f" incorrect as the calculation includes the non-recurring arrear payments for the year 1987-88.

Taking the correct figures of total pension outlay and total number of beneficiaries the per capita pension expenditure per annum works out to Rs. 4521. Multiplying this by 79,000 (assuming the figures of the Railways to be correct) the annual expenditure comes to Rs. 35. 71 crores. This compared to the current budget of • pensions of Rs. 900 crores, is quite insignificant and can be easily ,. _ awarded by this Court as was done in Nakara, it is urged. It is submitted in the alternative that if this Court feels that a positive direction cannot be made to the Government in this regard, it is prayed that at least an option should no given to the respondents either to withdraw the benefit of switching over to pension from every ..... ( one or to give it to the petitioners as well, so that the discrimination must go. We are not inclined to accept either of these submissions. The P. F. retirees and pension retirees having not belonged to a class, there is no discrimination.

Jn the matter of expenditure includible in the Annual Financial Statement, this Court has to be loath to pass any order to give any direction, because of the division of functions bet- --<. _ -~ ween the three co-equal organs of the Government under the Consitution. Lastly, the question of feasibility of converting all living P. F. retirees to Pension retirees was debated from the point of view of records and adjustments. Because of the view we have taken in the matter, we do not consider it necessary to express any opinion. . / - Mr. C. V. Francis in W. P. No. 1165 of 1989 argued the case more or less adopting the arguments of Mr. Shanti Bhushan. Mrs. Swaran Mahajan, in W. P. No. 1575 of 1986, submitted that the rule as to commuted portion of the pension reviving after 15 years should be applied to P. F.

retirees so that the corpus of Provident Fund dues received more than 15 years ago should be treated as committed portion of pension and be allowed to revive for adjustments against pension. In the view we have taken in this case it is not necessary to express any opinion on this question. KRISHENA KUMAR v. U. 0. l. ISAJKIA, J. ] 389 Mr. R. B. Datar for the respondent in W. P. No. 1575 of 1986 and A ~· W. P. No. 352 of 1989 more or less adopted the arguments of the learned Additional Solicitor General. In the result, all the Writ Petitions and the Special Leave Petition are dismissed, but the petitioners being retirees, we make no order as B to costs. °1. R. S. S. Petitions dismissed.