TaxTMI 
TaxTMI 
TaxTMI 
2006 (5) TMI 514
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.... have retired during the period 1.1.1996 to 31.3.1998. So far as the teachers of the University or Privates Aided Colleges are concerned, indisputably, they were being paid the same salary as was being paid to the teachers of the Government colleges. The appellants in Civil Appeal No.1391/2006, have retired from the Karnataka Regional Engineering College, Surathkal, Karnataka, which was established by the Government of India at the request of the Government of Karnataka. It is a centrally aided institution as envisaged under Entry 64 of List 1 of the Seventh Schedule to the Constitution of India. So far as the said institution is concerned, its expenditure used to be borne by the Government of India and the State of Karnataka. It, however, has been notified by the Government of India as a Deemed University with effect from 26.6.2002. 3. It is not in dispute that the revised scales of pay as recommended by the Pay Revision Committee became applicable to the appellants with effect from 1.1.1986. It is also not in dispute that the UGC scales of pay were applicable to them. The Government of Karnataka, by a letter dated 17.12.1993 directed that the matter relating to the fixation of p....
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....of India dated 17.8.98. 5. It is furthermore not in dispute that the Central Government pursuant to or in furtherance of the recommendations made by the Central Pay Commission, revised the scales of pay of its employees with effect from 1.1.1996. The revision of such pay scales was also accepted by the University Grants Commission. Grant of revision of such pay scales was also recommended for the posts held by the appellants herein. On or about 22.7.1999, the Government of India by a letter addressed to the Education Secretaries of all the States and Union Territories, stated in a categorical stand that the revision of pension structure for retired teachers shall be as is applicable to the employees working in Central Universities. It was stated: "Since the Central Govt. has already revised the pension structure of its employees and the same has been extended to the teachers in Central Universities, it is requested that appropriate orders in this regard may kindly be issued at an early date for the teachers in State Universities and Colleges. The AIFUCTO delegations further highlighted the problems faced by teachers in getting recognition of past service for pensionary benefit....
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....1996." 8. However, paragraph 27A was inserted thereto in respect of revision of pensionary benefits, which is to the following effect: "27-A: Revision of pensionary benefits: (i) UGC scales as revised from 1.1.96 have been linked to the index level of 1510 points inasmuch as the revised pay scale structured includes the DA admissible as on 1.1.96 to the extent of 138% of basic pay. As on 1`.1.96 the pensionary benefits under the State Government had not been revised. The revised pay scales of the State Government employees came into force from 1.4.98 by merging the DA as on 1.1.96. The pensionary benefits were also simultaneously revised w.e.f. 1.4.98. Therefore, the revised pay drawn in the UGC pay scales for the period from 1.1.96 upto 31.3.98 shall not be taken as emoluments for the purpose of pensionary benefits. Accordingly, (a) In respect of teachers drawing UGC pay scales who have retired during the period from 1.1.96 to 31.3.98 they shall be eligible for the benefit of the fixation of pay and arrears under the revised UGC scales of pay only. There shall not be any change in their pensionary benefits with reference to the revised UGC pay and the retirement benefits al....
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....ass by themselves and no discrimination could have been made between the employees who retired prior to 31.3.1998 and those retiring subsequent thereto. 11. The appeals preferred by the State of Karnataka against the said judgment were allowed by the Division Bench of the Karnataka High Court, holding as under: "It is not disputed that method of calculation of pension, 50% of last pay drawn is same to all and there is no change in the method of calculation. However, for the purpose of revised pension, cut off date is fixed as 1.4.1998. As stated, the pensionary benefits were uniformly revised in respect of all classes of teachers with effect from 1.4.1998 and in view of this, the cut off date fixed on 1.4.1998 by inserting clauses 27-A & 31-A by orders dated 29.7.2000, 7.8.2000 and 8.8.2000 in Government Order dated 15.11.1999 cannot be said to be bad. Therefore, the order of learned Single Judge quashing the orders dated 29.7.2000, 7.8.2000 and 8.8.2000 in setting aside the grant of pension from 1.4.1998 on the ground of discrimination vis-a-vis the Government employees, is not correct. Policy decision has been taken in fixing cut off date having regard to expenditure involved,....
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....after 33 years of service subject to overall age of superannuation; 17.2.0 Other conditions with respect of superannuation benefits may be given as per the Central/State Government Rules." In view of the rival contentions of the parties as noticed hereinbefore, the question which arises for consideration before this Court is as to whether the appellants having been given the benefit of the revised pay scales w.e.f. 1.1.1996, could have been deprived of the retiral benefits calculated with effect therefrom. 14. The fact that the appellants herein were treated to be at par with the holders of similar posts in Government Colleges is neither denied nor disputed. The appellants indisputably are governed by the UGC scales of pay. They are entitled to the pensionary benefits also. They had been given the benefits of the revision of scales of pay by 10th Pay Revision Committee w.e.f. 1.1.1986. The pensionary benefits payable to them on attaining the age of superannuation or death were also stated to be at par with the employees of the State Government. The State of Karnataka, as noticed hereinbefore, for all intent and purport, has treated the teachers of the Government Aided Colleges ....
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....prior to the cut-off date. 16. The State while implementing the new scheme for payment of grant of pensionary benefits to its employees, may deny the same to a class of retired employees who were governed by a different set of rules. The extension of the benefits can also be denied to a class of employees if the same is permissible in law. The case of the appellants, however, stands absolutely on a different footing. They had been enjoying the benefit of the revised scales of pay. Recommendations have been made by the Central Government as also the University Grant Commission to the State of Karnataka to extend the benefits of the Pay Revision Committee in their favour. The pay in their case had been revised in 1986 whereas the pay of the employees of the State of Karnataka was revised in 1993. The benefits of the recommendations of the Pay Revision Committee w.e.f. 1.1.1996, thus could not have been denied to the appellants. 17. The stand of the State of Karnataka that the pensionary benefits had been conferred on the appellants w.e.f. 1.4.1998 on the premise that the benefit of the revision of scales of pay to its own employees had been conferred from 1.1.1998, in our opinion, ....
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.... allowances in terms thereof, we fail to see any reason as to why the pensionary benefits would not be extended to them from the said date. In fact the status of the appellants that they were at par with teachers of the Government colleges was not disputed. A Division Bench of the Karnataka High Court in V.P. Babar & Ors. vs. State of Karnataka (W.P. Nos.32163-32208/1998) has clearly held so. It has not been disputed that the said judgment has become final as the State of Karnataka did not prefer any appeal thereagainst. The impugned orders furthermore is opposed to the basic principles of law inasmuch as by reason of executive instructions an employee cannot be deprived of a vested or accrued right. Such a right to draw pension to the extent of 50% of the emoluments, computed in terms of the rules, w.e.f. 1.1.1996, vested to the appellants in terms of Government notification read with Rule 296 of the Rules. As the amount calculated on the basis of the revised scales of pay on and from 1.1.1996 to 31.3.1998 have not been paid to the appellants by the State of Karnataka as ex gratia, and in fact was paid by way of emoluments to which the appellants became entitled to in terms of the....
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....essly toiled for the employer on an assurance that in their old age they would not be left in the lurch. Maybe that in the present case, the trust for Pension Fund is created for income tax purposes or for smooth payment of pension, but that would not affect the liability of the employer to pay monthly pension calculated as per the Rules on retirement from service and this retirement benefit is not based on availability of Pension Fund. There is no question of pensioners dividing the Pension Fund or affecting the pro rata share on addition of new members to the Scheme. As per Rule 1 quoted above, an employee would become a member of the Fund as soon as he enters into a specified category of service of the Company. Under Rule 8, trustees may withhold or discontinue a pension or annuity or any part thereof payable to a member or his dependants, and that pension amount is non-assignable. Further, the payment of pension was the liability of the employer as per the Rules and that liability is required to be discharged by the Union of India in lieu of its taking over of the Company. The rights of the employees (including retired) are protected under Section 11 of the Burmah Oil Company [....