AHMED HUSSAIN KHAN versus STATE OF ANDHRA PRADESH

Citation: [1985] 1 S.C.R. 908 · Decided: 28-09-1984 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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908 
AHMED HUSSAIN KHAN 
v. 
STATE OF ANDHRA PRADESH 
September 28, 1984 
[Y. V. CHANDRACHUD, C. J., D. P. MADON AND RANGANATH 
MISRA, JJ.J 
Hyderabad Civil Services Rules-Rule 299(1)(b)-lnterpretation of-Maxi-
1num pension payable to a government servant is Rs. 1000 and not Rs. 857.15 per 
month in Government of India Currency. Government Notification dated February 
3, 1971 amending cl. (b) of sub-rule (I) of rule 299 not valid. 
States Reorganization Act, 1956-Proviso to sub·s. (7) of s. 115-When 
"applicable-Pension is a condition of service and any change made by Government 
in pension disadvantageous to government servant must comply with requi'rement1 
of proviso to sub-s. (7) of s. 115. 
Words and Phrases-'Pension'-Pension b a condition of service. 
The appellants in Civil Appeals No. 2627 & 2628 of 1977 joined superior 
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civil service of the erstwhile Indian State of Hyderabad in the year 1945 and 
1942 respectively. 
At that time their conditions of service were governed by the 
Hyderabad Civil Services Regulations promulgated in obedience to the Nizam's 
Firman. Regulation 6 of these Regulations inter alia provided that an officer's 
claim to pension was regulated by the rules in force at the time when the officer 
retired, Regulation 313(b) provided that the maximum pension ordinarily 
admissible would be Osmania Sikka (O.S.) Rs. 1000 a month. The erstwhile 
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Indian State of Hyderabad had its own currency known as the "Osmania Sikka" 
denominated in short as "O.S." and the phrase "O.S." Rs. 1000 a month" 
which occurred in clause (b) of Regulation 313 meant OsLnania Sikka Rs. 1000 
a month. The Government of India currency was known as "Indian Govern~ 
ment currency" and denominated in short as "J.G. currenc)'". The standard 
rate of exchange was 7 O.S. rupees for 6 I.G. rupees. 
Under clause (22) of section 2 of the Hyderabad General Clauses Act 
('Jo, III of 1308 F.), as it then stood, "rupee" meant a rupee in the O.S. 
Currency, 
On the coming into force of the Constitution of India on January 26, 
1950, Hyderabad became a part of the territory of India. Consequently the 
Hyderabad Currency was demonetized with effect from April l, 1953 and the 
Hyderabad Currency Demonetization (Consequential and Miscellaneous Provi-
sion ) Act, 1953 (I-lyderabad Act No. 1 of 1953) was enacted. Section 2 of the 
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Demonetization Act provided that references in any Hyderabad law, regulations 
"tc. which immediately before the commencement of this Act were in force ~o 
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AHMED HUSSAIN KHAN v .. ANDHRA PRADESH 
909 
the Hyderabad State shall be construed as if references therein to any amounts 
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in the O.S. Currency were references to the equivalent amounts in J.G .. Currency 
according to the standard rate of exchange. By the Demonetization Act, clause 
(22) of section 2 of the Hyderabad General Clauses Act was substituted by a 
new clause which provided that 'rupee' means a rupee in I.G. Currency and 
fractional denomination~ of a rupee shall be construed accordingly. 
In 1954, in exercise of the powers under Article 309 of the Constitution 
the Rajpramukh of the State of Hyderabad promulgated the Hyderabad Civil · 
Services Rules. Rule 4 of these Rules provides, inter alia, that Government 
servant's claim to pension would be regulated by the rules in force at tbe time 
when the Governn1ent servant retires. Rule 299 provides for pension. Clause 
(b) of Rule 299 provides that the maximum pension ordinarily admissible will 
be Rs. 1000 a month. Rule 299 was later renumbered as sub-rule (1) and a new 
sub-rule (2) was added which is not relevant. By a notification dated February 3, 
1971, the Governor of Andhra Pradesh amended clause (b) of sub-rule (I) of 
rule 299 of the Hyderabad Civil Services Rules and substituted Rs. 857 .15 for 
the expression Rs. 1000. 
After the passing of the States Reorganization Act, 1956 the services of 
the two appd!ants were transferred to 'the State of Andbra Pradesh under sec-
tion 115 of the States Reorganization Act. The two appellants retired in April 
1972 and April 1973 respectively. At the time of their retirement, the appellants' 
pension was fixed at Rs. 683.11 per month and Rs. 857.15 respectively on the 
bas!s that the amount of n1aximun1 pension anmissible under clause (b) of Rule 
~99(1) of the Hyderabad Civil Services Rules as amended by notification dated 
February 3, 1971 was Rs. 857.15. The appellants thereupon filed two writ peti-
tions under Article 2
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