Retrospective pension reduction invalid without prior approval; pension ceiling under Hyderabad rules held payable in Indian currency.

Rule 299(1)(b) of the Hyderabad Civil Services Rules was construed to fix the maximum pension at Rs. 1,000 per month in Indian Government currency, not Osmania Sikka currency, because the later rules were framed in a different statutory setting and contemporaneous material confirmed the Indian currency basis. A retrospective 1971 amendment reducing the pension ceiling was held invalid against affected employees because pension was a condition of service and the State lacked previous Central Government approval required for adverse variation under the States Reorganisation Act. The pleas of waiver and estoppel also failed for want of any factual foundation.

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Issues: (i) Whether the maximum pension of Rs. 1,000 mentioned in Rule 299(1)(b) of the Hyderabad Civil Services Rules referred to Indian Government currency or Osmania Sikka currency; (ii) Whether the 1971 amendment reducing the maximum pension to Rs. 857.15 was invalid for want of previous approval of the Central Government under section 115(7) of the States Reorganization Act, 1956; (iii) Whether the appellants had waived their right to claim pension on the basis of Rs. 1,000 and were estopped from disputing the reduced figure.

Issue (i): Whether the maximum pension of Rs. 1,000 mentioned in Rule 299(1)(b) of the Hyderabad Civil Services Rules referred to Indian Government currency or Osmania Sikka currency.

Analysis: The earlier Hyderabad Regulations had used the expression O.S. Rs. 1,000, but the later Rules, framed after Hyderabad had become part of India and after demonetization, deliberately used the expression Rs. 1,000 without the O.S. prefix. The Rules were made in a different statutory setting, and the contemporaneous official manual stated that the figures in the Rules were in Indian Government currency. The prior determination in the earlier litigation had already settled that the amount in Rule 299 was not in Osmania Sikka.

Conclusion: The maximum pension under Rule 299(1)(b) was Rs. 1,000 per month in Indian Government currency.

Issue (ii): Whether the 1971 amendment reducing the maximum pension to Rs. 857.15 was invalid for want of previous approval of the Central Government under section 115(7) of the States Reorganization Act, 1956.

Analysis: Under the proviso to section 115(7), service conditions applicable immediately before the appointed day could not be varied to the disadvantage of the affected employees without previous Central Government approval. Pension was a condition of service, and the amendment retrospectively reduced the maximum pension payable to persons continuing in service from the erstwhile Hyderabad State. The correspondence relied upon by the State did not amount to prior approval, because the Central Government expressly stated that prior approval was not required and did not grant approval to the amendment.

Conclusion: The amendment was invalid and inoperative as against the affected employees for want of previous approval.

Issue (iii): Whether the appellants had waived their right to claim pension on the basis of Rs. 1,000 and were estopped from disputing the reduced figure.

Analysis: The plea of waiver and estoppel was not raised in the High Court, and there was no factual foundation for it. The pension had initially been fixed on the higher basis and was later reduced by the impugned order, followed promptly by legal challenge. A statutory right to pension could not be treated as waived on these facts.

Conclusion: The plea of waiver and estoppel failed.

Final Conclusion: The appellants were entitled to pension recalculated on the basis of a maximum pension of Rs. 1,000 per month in Indian Government currency, and the State was required to refix and pay the consequential arrears.

Ratio Decidendi: A service condition that retrospectively reduces pension to the disadvantage of employees transferred under section 115 of the States Reorganization Act, 1956 is invalid without previous approval of the Central Government, and pension payable under the rules cannot be denied on the basis of waiver or estoppel absent a clear and factual foundation.

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