Arbitrary pension cutoff dates violate equal treatment; the liberalised pension scheme may be applied uniformly after severing the exclusion.

Pension under the Central Civil Services (Pension) Rules, 1972 was treated as deferred remuneration and a measure of social security. A retirement-date cutoff that excluded otherwise similarly situated pensioners from liberalised pension lacked rational nexus with the object of pension liberalisation and failed the test of reasonable classification under Article 14. The unconstitutional date-based limitation was severable from the valid scheme, so the liberalised formula could be applied to all pensioners governed by the rules from the operative date. The revised benefit was preserved without granting arrears for the period before that date.

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Issues: (i) Whether pensioners governed by the Central Civil Services (Pension) Rules, 1972 constitute a single class for the purpose of liberalised pension and whether exclusion of those who retired before the specified date violates Article 14 of the Constitution of India; (ii) whether the impugned date-based limitation can be severed and the liberalised pension scheme read down so as to extend its benefit to all pensioners governed by the relevant rules.

Issue (i): Whether pensioners governed by the Central Civil Services (Pension) Rules, 1972 constitute a single class for the purpose of liberalised pension and whether exclusion of those who retired before the specified date violates Article 14 of the Constitution of India.

Analysis: Pension was treated as a deferred payment for past service and as a measure of socio-economic justice intended to secure dignity and economic security in old age. The classification created by the memoranda, which divided otherwise similarly situated pensioners solely on the basis of whether retirement occurred before or after the specified date, was held to be arbitrary. The date of retirement had no rational connection with the object of liberalising pension, namely, to improve old-age security by a more humane computation formula. The Court applied the settled test of reasonable classification and held that the impugned differentiation failed the requirement of intelligible differentia having a rational nexus with the object sought to be achieved.

Conclusion: The date-based exclusion of pre-specified-date pensioners was unconstitutional and struck down as violative of Article 14 of the Constitution of India.

Issue (ii): Whether the impugned date-based limitation can be severed and the liberalised pension scheme read down so as to extend its benefit to all pensioners governed by the relevant rules.

Analysis: The Court held that the unconstitutional words limiting the scheme to those in service on the specified date and retiring thereafter were severable from the otherwise valid liberalised pension scheme. Removing that limitation did not make the scheme unworkable, and the revised formula could operate prospectively from the specified date for all pensioners governed by the rules, without disturbing past arrears. The Court rejected the contention that such severance would amount to legislation, holding instead that the unconstitutional classification could be removed while preserving the beneficial scheme.

Conclusion: The restrictive date clause was severed and the liberalised pension scheme was made applicable to all pensioners governed by the relevant rules from the specified date, without arrears for the period earlier than that date.

Final Conclusion: The pension liberalisation measure was upheld in substance, but its arbitrary exclusion of pre-specified-date retirees was invalidated, so that all pensioners under the governing rules became entitled to recomputed pension from the operative date on a uniform basis.

Ratio Decidendi: A pension revision that divides a homogeneous class of pensioners solely by an arbitrary cutoff date, without a rational nexus to the object of the liberalisation, violates Article 14 and the unconstitutional limitation may be severed to preserve the valid benefit.

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