TaxTMI 
TaxTMI 
2005 (11) TMI 545
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....ners. The interveners, Shri K. Nagabhushanam and Ors., Shri A. Sudhakar and Ors. and K. Arpana and Ors., are also the retired employees of the State of Andhra Pradesh. 4. The fact of the matter is as under:- The State of A.P. constituted a Pay Revision Commission (for short "PRC") for the purpose of considering the question of revision of scale of pay of the employees working with it as also merger of D.A., etc. On or about 21.7.1999, PRC recommended revised scale of pay notionally from 1.7.1998 with financial benefits from 1.4.1999. The Chief Minister of the State held a meeting with the representatives of the employees on 24.7.1999 wherein it was agreed: "The cash benefit of the Revised Pay Scales will be allowed with the salary for the month of July, 1999 payable in August, 1999. The arrears of emoluments arising from the Revised Pay Scales for then months of April, May and June, 1999 will be credited to the General Provident Fund Accounts of the employees." 5. The State of Andhra Pradesh thereafter issued a Government Order dated 11.8.1999 being No. GO (P) No. 114 in terms whereof inter alia the mode and manner for implementing the recommendations of the....
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.... 30th June, 1999. He could also opt for remaining in the existing scale. Sub-rules (6) and (7) specifically lay down the modes of exercising option as regards an employee who retired on or after 1st July, 1998. Such option could also be exercised by the legal representative of a government employee who died while in service on or after the said date. Sub-rule (1) of Rule 9 contains a non-obstante clause saying that no rules made under the proviso to Article 309 of the Constitution of India shall, insofar as it is inconsistent with any of the provisions of these rules, have any effect. 9. The State also issued said GO(P) No. 156 on 16.9.1999 wherein it was categorically stated that the revised consolidated pension shall come into force with effect from 1.7.1998 with monetary benefits payable from 1.4.1999. Paragraph 5 of the said GO reads as under: "5. The employee retired between 01-07-1998 and 1-4-1999 are eligible to revision of their pay in the Revised Pay Scales, 1999 notionally as per the orders issued in G.O. 7th read above. As such, the pensions of these employees may be revised notionally as per the revised pay in Revised Pay Scales, 1999 and monetary benefit sh....
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....ules, 1944. 14. Both the State of Andhra Pradesh as also the Original Applicants preferred writ petitions before the High Court being aggrieved by and dissatisfied therewith. By reason of the impugned judgment dated 10.9.2003 the High Court dismissed the writ petition filed by the State whereas the writ petitions filed by the employees were allowed. Aggrieved the State is before us. 15. Mr. P.P. Rao and Mr. H.S. Guru Raja Rao, learned senior counsel appearing on behalf of the State of Andhra Pradesh, submitted that the reasonings of the High Court that the Government acted contrary to the agreement with the unions, and that paragraph 9 of GO No. 114 conferred a legal right on the employees, cannot be sustained. 16. Drawing our attention to the minutes of the meeting held between the Chief Minister of the State of Andhra Pradesh, it was submitted that from a perusal of clause (4) thereof it would be evident that the same relate to the persons who would be continuing in service even after 1.4.1999 and, not in regard to the persons who had retired and drawn their retiral benefits prior thereto. As regard the second reasoning of the High Court Mr. Rao would contend that paragr....
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....f the benefit of the higher pay scale as also other benefits contemplated thereby are to be computed with effect from 1.7.1998, only because the actual payment in terms of money is deferred, the same would not take away the right that had accrued there over , having regard to the fact that the pay is a condition of service. 20. Before adverting to the rival contentions of the parties, we may notice the findings of the Tribunal and the High Court respectively. Findings of the Tribunal are as under: (a) Paragraph Nos. 1 to 23 of GO No. 114 dated 11.8.1999 do not have any statutory force. (b) Rule 4 of the Statutory Rule does not confer any legal right upon the employees who retired between 1.7.1998 and 1.4.1999 to any monetary benefit, and in that view of the matter on their superannuation, they having not drawn their pay in the revised pay scales, were not entitled therefore in terms thereof. (c) As regards paragraph 9 of GO No. 114, the Tribunal opined that the same being an executive order, the original applicants did not become entitled to get the amount of gratuity fixed on notional pay contrary to statutory rules. (d) Paragraph 5 of GO ....
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.... have to be gathered in the backdrop of the facts stated in the preamble portion thereof, indisputably the legal right of the Respondents, if any, must be found out from the notification portion itself. The notification read as a whole does not suggest that the State of Andhra Pradesh thereby intended to pay before 1.4.1999 retirement gratuity reckoned on the basis of the revised scale of pay as recommended by the PRC. 25. Mr. Lalit may be right in his submissions that the revised scale of pay notionally was fixed from 1.7.1998, but, concededly, cash benefit therefore was payable from 1.4.1999. Pension and gratuity connote two different things. In given situations, they may be payable under different statutes. Admittedly, the matter relating to payment of pension and gratuity is governed by the A.P. Revised Pension Rules, 1980. Rule 31 of the said rules defines "emoluments" to mean 'pay' as defined in Rule 9(21)(a)(i) of the Fundamental Rules, which a Government servant had been receiving immediately before his retirement or on the date of his death. Rule 46 provides for retirement gratuity, clause (1)(a)(A) whereof reads as under: "46. Retirement Gratuity : - (....
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....eceased in the coparcenary property in terms of Section 6 of the Hindu Succession Act, 1956. In terms of the said provision a legal fiction was created for the purpose of reckoning the share of the deceased which would have been allotted to him if a partition of the property had taken place immediately before his death. Plaintiff therein had 1/6th interest in the share. Applying the principles laid down in the explanation appended to Section 6 of the Hindu Succession Act, it was held that the plaintiff was also entitled to 1/6th share from 1/4th share of the coparcenary property, i.e., to say 1/24th. As on the date of partition, the plaintiff was to have an independent 1/4th share, the Court held that the plaintiff's share would be 1/4th + 1/24th in the property. 28. The case at hand indeed poses a different problem. Although like Gurupad Khandappa Magdum (supra) a notional revision of pay was to be considered as if the same took effect from 1.7.1998, but the rule went further and stated that actual monetary benefit thereof shall be given with effect from 1.4.1999. The rule, therefore, not only creates a legal fiction but also provides the limitations in operation thereof. I....
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....egories of persons, who retired were governed by two different sets of rules. They cannot, therefore, be equated. Further, granting of additional benefits has financial implications also. Hence, specifying the date for the conferment of such additional benefits cannot be considered as arbitrary." 34. In State of Punjab and Ors. v. Amar Nath Goyal and Ors. (2005) IIILLJ 759 SC , upon consideration of a large number of decisions, this Court opined that the decision of a State to limit the benefits only to employees who retire or died on or after a particular date upon calculating the financial implications thereof was neither irrational nor arbitrary. It was observed: "28... It is trite that, the final recommendations of the Pay Commission were not ipso facto binding on the Government, as the Government had to accept and implement the recommendations of the Pay Commission consistent with its financial position. This is precisely what the Government did. Such an action on the part of the Government can neither be characterised as irrational, nor as arbitrary so as to infringe Article 14 of the Constitution." 35. Mr. Lalit placed strong reliance on D.S. Nakara and Ors. v....