1994 ALLMR ONLINE 216

B.P. SARAF, J.

BOMBAY MUNICIPAL PENSIONERS ASSOCIATION Vs. MUNICIPAL CORPORATION OF GREATER BOMBAY

W. P. No. 2794 of 1990

24th February, 1994

Petitioner Counsel: Mrs. Neeta Karnik
Respondent Counsel: E. P. Bharucha, K. Setalwad, G. V. Murthi

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JUDGMENT

JUDGEMENT :- This writ petition has been filed by the Bombay Municipal Pensioners' Association, an association of the pensioners of the respondent Municipal Corporation of Greater Bombay ("the Corporation"). The other three petitioners are ex-employees of the Corporation who are in receipt of pension. Petitioner No. 2, G. R. Pradhan, retired as a Head Teacher from the Municipal School on 1 March 1977. The third petitioner Shri M. S. Chemburkar retired as an Assistant Accountant in the Chief Accounts Department of the Corporation on 1 November 1976. The fourth petitioner Shri S. D. Girkar also retired as Assistant Accountant from the very same department on 23rd April 1977. This petition has thus been filed in a representative capacity to represent the interest of all the pensioners of the Corporation. The petitioners are aggrieved by the cut-off dates fixed by the Corporation for giving effect to the rules framed by them regarding encashment of earned leave and encashment of half-pay leave. A new rule regarding encashment of earned leave was passed by the Standing Committee of the Corporation vide its resolution No. 2660 of 17 November 1978 which was approved by the Corporation vide its resolution No. 1735 of 25 January 1979. This rule provides for encashment of unutilised earned leave of the employees of the Corporation. This rule was modified by resolution of the Corporation bearing No. 313 dated 30 June 1980. It was numbered as rule No. 16. The petitioners are in no way aggrieved by this rule as such. Their grievance is confined to the cut-off dates specified therein. In case of employees dying while in service the rule was given retrospective effect from 1 October 1974. In case of Municipal employees retiring on account of superannuation, it was given effect from 1 March 1978. The petitioners are aggrieved by these cut-off dates. According to them, these dates are most arbitrary and discriminatory.

2. Similarly, in the year 1980 provision was made for the first time by the Corporation for encashment of half-pay leave. A resolution to that effect was passed by the Standing Committee of the Corporation which was numbered as 3208 of 5 January 1980. It was approved by the Corporation by resolution No. 2166 of 18 March 1980. In this case also two different cut-off dates were provided for two categories of pensioners viz. Family members of deceased employees and retired employees. The cut-off date in case of family members of deceased employees was specified as 1 October, 1974, in case of employees retiring from service, the cut-off date was 1 March 1978. Here also the grievance of the petitioners is only in regard to the cut-off dates. According to them, the employees of the Corporation were making agitation for these benefits ever since 1962. The Corporation took long eighteen years to take a decision in the matter and to accept their long standing demand. While doing so, the Corporation was not justified in fixing the cut-off date to restrict the benefit of these rules only to a section of the employees who happened to retire on or after the dates specified by the Corporation and depriving other similarly situated employees of the Corporation from the same benefit to which they were equally entitled to. According to the petitioners, this action of the corporation is most arbitrary and discriminatory and violative of article 14 of the Constitution. For a proper appreciation of the various contentions, in my opinion, it would be expedient to set-out the two impugned notifications. They are as follows :

Resolution No. 1735 dated 25 Ianuary 1979 of the Corporation :

"That (i) the Corporation hereby confirm under section 81(2) of the B.M.C. Act, the amendment made by the Standing Committee. Under section 81(1) of the Act, to the Appendix 'F' of the Municipal Service Regulations, so as to include therein New Rule (16) as shown in the statement, received with the letter, so as to give to the Municipal employees the benefit of cash payment in lieu of unutilised earned leave/leave on average pay on the date of retirement/death, while in service, etc., as proposed and (ii) in reply to his aforesaid letter, on the subject, Shri T. G. Solanki, Municipal Councillor, be informed to the effect of the Commissioner's aforesaid Report and of the orders passed."

New Rule (16) reads as follows :

"Notwithstanding anything contained in the above rules regarding encashment of Earned Leave.

(a) in case a Municipal employee dies while in service, the cast equivalent of the leave salary that the deceased employee would have got had he gone on Earned Leave/Leave on average pay that would have been due and admissible to him but for the death on the date immediately following the date of death and in any case not exceeding leave salary for 120 days/4 months shall be paid to his family. (Effect given from 1st October 1974).

(b) in case of a Municipal Employee retiring on account of superannuation after reaching the age of 58 years and having balance of unutilized Earned Leave/Leave on average pay to his credit on the date of superannuation, the cash equivalent of the leave salary for Earned Leave/Leave on average pay in any case not more than 120 days/4 months to his credit shall become payable and shall be paid to him in lump sum as a one time settlement after deducting an amount of pension equivalent and pension equivalent of death-cum-retirement gratuity for the period of Earned Leave/Leave on average pay for which case equivalent of leave salary is admissible. A Municipal employee can also avail of leave preparatory to retirement a part of earned leave/leave on average pay at his credit and he will be allowed payment of cash equivalent of leave salary for the balance of Earned Leave/Leave on average pay subject to above limits that remains at his credit on the date of superannuation (effect be given from 1st March 1978)".

Resolution No. 2166 dated 18 March 1980 of the Corporation :

"That the Corporation do hereby confirm under section 81(2) of the B.M.C. Act, the amendment made by the Standing Committee under section 81(a) of the Act, under their aforesaid Resolution, to the Municipal Service Regulations, so as to include therein New Rule (17) in Appendix 'F' thereto in respect of encashment of Half Pay Leave/Leave on Half Average Pay, as shown in the statement, received with the letter, as proposed."

New Rule (17) in Appendix 'F' reads as follows :

Notwithstanding anything contained in the above rules regarding Encashment of Earned Leave :-

(a) In case a Municipal employee dies while in service, leaving a balance of unutilised Half Pay Leave, his family shall be paid the cash equivalent of leave salary for the Half Pay Leave (converted into Commuted Leave) that would have been due and admissible to him, but for the death, on the date immediately following the date of death. (Effect given from 1-10-1974).

(b) In case, a Municipal employee retiring on account of superannuation after reaching the age of 58 years and having balance of unutilised half-pay leave to his credit on the date of superannuation the cash equivalent of leave-salary for Half-Pay leave (converted into Commuted leave) shall become payable and shall be paid to him in lump-sum as a one time settlement. (Effect given from 1-3-1978).

Note (1) - In the case of employees of the Fire Brigade Department on the operational side who are governed by Rules under Part IV, Chapter II of the Municipal Service Regulations the benefit of encashment of leave on half Average Pay will be given by converting half pay leave into Commuted Leave notionally at the rate of 20 days per year of service to be calculated as in the case of Half Pay Leave to employees governed by the Revised Leave Rules for New Entrants, deducting therefrom -

(I) the amount of leave on Half Average Pay actually taken; and

(II) double the amount of Leave on average Pay (after converting the same into days) taken on Medical Certificate out of one year from 2/11th of Leave on Average Pay. Leave on Medical Certificate not debitable to leave account will not however be so deducted.

3. The learned counsel for the petitioners submits that the case of the petitioners is clearly governed by the decision of the Supreme Court in D. S. Nakara vs. Union of India, AIR 1983 SC 130. The ratio of the said decision, according to the learned counsel, squarely applies to the present case and following the same, this Court should direct the respondents to give the benefit of the said newly incorporated rules (16) and (17) to all employees covered by these rules irrespective of the date of death or retirement.

4. The learned counsel for the respondent, on the other hand, submits that the ratio of the decision of the Supreme Court in Nakara's case (supra) has no application to the present case. According to him, the decision of the Supreme Court in Nakara's case has to be read now in the light of the later decisions of the Supreme Court in State of Gujarat vs. Raghunath V. Baxi, (1985)3 SCC 45 and State of W.B. vs. Ratan Behari Dey, (1993) 4 SCC 62. The submission of the learned counsel in brief is that the Supreme Court by the above decisions has made it clear that grant of pensionary or terminal benefits can be made operative from a cut-off date even retrospectively. It is further stated that the power of the Corporation or the State to specify a date with effect from which the regulations framed by it or any amendment made to such regulations shall come into force is unquestioned. A date can be specified in such cases both prospectively as well as retrospectively and the same cannot be challenged by relying on the decision of the Supreme Court in Nakara's case (supra). The learned counsel tried to distinguish between the ratio of the decision of the Supreme Court in Nakara 's case and the latter case by pointing out that the ratio of the Nakara's case will apply to cases where the pensionary or terminal benefits are introduced for the first time. It would not be applicable in cases where modifications are sought to be made in the existing rules on the subject. The counsel stated that in the instant case the Corporation had fixed a cut-off date and there is nothing to show that it is arbitrary or discriminatory. When I asked the learned counsel for the Corporation to tell this Court the basis and/or the material on the basis of which the cut-off dates had been fixed in the instant case. I was informed that no such material was available on record. It appeared from the submission of the learned counsel that these dates are the dates on which such benefits had been extended by the State Government to its employees.

5. I have carefully considered the rival submissions. I have given a serious thinking to the submissions of the learned counsel for the parties. There can be no controversy with regard to the proposition advanced by the learned counsel for the Corporation that the pensionary or terminal benefits can be made operative even retrospectively. The real question, as observed by the Supreme Court even in its latest decision in State of W.B. vs. Ratan Behari Dey (supra), on which heavy reliance is placed by the counsel for the Corporation, is whether the prescription of the date is unreasonable or discriminatory. The controversy is not whether the Corporation has the power to specify a date prospectively or retrospectively from which the newly inserted rules (16) and (17) could be given effect to. It is well-settled as observed by the Supreme Court in State of W.B. vs. Ratan Behari Dey (supra), that so long as such date is specified in a reasonable manner i.e. without bringing about a discrimination between similarly situated persons, no interference is called for by the Court in that behalf. Equally well-settled is, however, the proposition that the State cannot pick and choose a date out of its hat. It has to prescribe a date in a reasonable manner, having regard to all the relevant facts and circumstances. If and only if that is done, question of discrimination would not arise. In Nakara's case where an artificial date was prescribed classifying the retirees governed by the same rules and similarlysituated into two different classes depriving one such class of the benefit of liberalised pension rules, it was held by the Supreme Court that the specification of the date from which the liberalised rules were to come into force was arbitrary. In other words, though the State can prescribe a date, the date should not be drawn in such a manner as to bring about a discrimination between persons situated similarly i.e. in a manner violative of Article 14 of the Constitution. In the instant case, the petitioners contend that the prescription of the date is wholly unreasonable and discriminatory. The Corporation could not place before this Court the facts and circumstances on the basis of which the dates in question had been prescribed by it. The only contention in support of the date advanced on behalf of the Corporation is that it has a co-relation with the date with effect from which similar benefits extended by the State Government to its employees had been given effect to and that the cut-off date fixed by the State Government having not been challenged, the action of the Corporation cannot be held to be arbitrary and discriminatory.

6. I have carefully considered the above submissions. I find a fallacy in the above argument. Firstly, a similar benefits were extended by the State Government vide its notification dated 23rd October 1974 and they were given effect to from 1 October, 1974. The fixation of 1 October 1974 in such a case cannot be called arbitrary and no fault can be found with the above date fixed by the State Government as it appears that the date was fixed because the State thought it proper to give effect to the said rules from the first day of the month instead of the date on which the said notification was made. That is not the position here. The decision of the Corporation, is of 1980. Moreover, the fact that nobody had challenged the cut-off date fixed by the State Government cannot operate as a bar to the challenge of the action of the Corporation on the ground of arbitrariness or discrimination. The learned counsel was, however, fair enough to state that the Corporation neither follows the Government pay scales as such nor the modifications in the pay scales and emoluments made by the Government from time to time though, while considering the demands of their own employees, they sometimes do take into consideration the pay scales of the Government servants and/or various benefits available to them. In such a situation, the attempt to justify the cut-off date with reference to the date with effect from which the government had given benefit to its employees years back cannot be considered as a material reason for fixation of the cut-off date in the present case.

7. In the instant case, I find that the Corporation has totally failed to place before this Court any material worth the name in support of this decision to prescribe the particular cut-off dates for extending the benefits of encashment of earned leave and half-pay leave to its retired employees. In my opinion, such an action can only be termed as most arbitrary and discriminatory and violative of Article 14 of the Constitution, squarely governed by the decision of the Supreme Court not only in Nakara's case but also in the later cases relied upon by the counsel for the Corporation including the decision in State of W.B. vs. Ratan Behari Dey (supra). It may be pertinent to observe that in the above decision the Supreme Court has categorically held : When a complaint of discrimination is made in respect of cut-off dates for certain pensionary and/or terminal benefits, the only question to be asked is whether the prescription of the date is unreasonable and discriminatory and that this question has to be decided by the Courts having regard to the relevant facts and circumstances of each case. The Supreme Court in the above case, on a detailed examination of the facts and circumstances of the case, arrived at a finding that the prescription of the date was neither arbitrary nor discriminatory. It was only in the light of above finding that it was held that the complaint of discrimination must fail. Exactly reverse is the position in the case before me. Here the question of deciding whether the date has been specified in a reasonable manner or not does not arise because the Corporation has placed no material whatsoever before me in that regard except the above decision of the Supreme Court, which, to my mind, goes counter to the stand taken by it. It may be pertinent to observe here that what is binding is the ratio of a decision of the Supreme Court. A sentence picked up from the judgment of the Supreme Court here and there does not constitute the ratio thereof. The ratio of the latest decision of the Supreme Court, in my opinion, is in no way different from that in Nakara 's case. The Nakara 's case still holds the field. The later judgments have simply set out circumstances and the cases in which the principle of Nakara's case would not apply. These cases, in fact, lay down the exceptions to the rule laid down in Nakara's case. It is wrong to say that the later decisions have in any way diluted or modified the principle laid down in Nakara's case.

8. In view of the above, I am of the clear opinion that the specification of the cut-off dates by the Corporation in the instant case is most arbitrary, unreasonable and discriminatory and the same cannot be allowed to stand. I, therefore, direct that the pensioners of the Corporation shall be entitled to the benefits of the two notifications in question being notification dated 25 January 1979 and dated 18 March 1980 relating to encashment of earned leave and half-pay leave irrespective of the date of death or retirement. The Corporation is directed to give effect to this order within three months from today.

9. In the result, the cut-off dates specified in the two notifications are struck down as being violative of Article 14 of the Constitution and the Corporation is directed to give effect to the notification in respect of all eligible employees irrespective of the date of their death or retirement.

10. Under the facts and circumstances of the case, there shall be no order as to costs.

11. Certified copy expedited.

Order accordingly