Parity-based pension escalation upheld where similarly situated public sector pensioners received higher benefits and fund inadequacy was no defence.

Pension escalation for erstwhile Burmah Shell management staff was treated as a justified parity claim, with the Court recognising pension as a vested welfare entitlement and taking note of the erosion in the value of money. It held that the mere inadequacy of the existing funded corpus could not defeat enhancement where similarly situated pensioners in a comparable public sector arrangement had already received a higher pension. The claim for restoration of commuted pension was not pressed, so the issue was confined to escalation only. The petitioners were held entitled to a pension hike at the same rate as that granted by Hindustan Petroleum Corporation.

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Issues: Whether the pensioners of the erstwhile Burmah Shell management staff were entitled to an increase in pension at the same rate as that granted by Hindustan Petroleum Corporation.

Analysis: The petition was confined to escalation of pension, as the claim for restoration of commuted pension was not pressed. The pension scheme under the acquired undertaking was funded, but the Court held that the mere inadequacy of the existing fund could not defeat a justified claim for enhancement. It took judicial notice of the fall in the value of money and treated pension as a vested entitlement in a welfare State. The Court found that a similarly situated sister concern had granted a higher pension and there was no acceptable basis to deny comparable relief to the petitioners.

Conclusion: The petitioners were held entitled to a pension hike at the same rate as that granted by Hindustan Petroleum Corporation.

Ratio Decidendi: Where similarly situated pensioners under a comparable public sector arrangement receive enhanced pension, and the entitlement is otherwise justified, the absence of sufficient existing fund corpus does not by itself justify denial of parity-based pension escalation.

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