LexCHAIRMAN, RAILWAY BOARD AND ORS. versus C.R. RANGADHAMAIAH AND ORS. ETC. ETC.
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CHAIRMAN, RAILWAY BOARD AND ORS. A v. C.R. RANGADHAMAIAH AND ORS. ETC. ETC. - JULY 25, 1997 [J.S. VERMA, C.J., M.M. PUNCHHI, S.C. AGRAWAL, B DR. AS. ANAND AND S.P. BHARUCHA, JJ.] Service Law: India11 Railway Establishmellf Code-Rule 2544--Computatio11 of pen- c sion-Railway Employees retired betwee11 1. 1. 73 and 5.12.88-Notifications amended Rule reducing percentage limit of nm11i11g allowance while calculat- ing average emolume11ts-Retrospective operatio1t-Adversely affecti11g employees who stood retired ther1-Held, not pe1111issible-E11titled to pensio11 on the basis of rules prevalant at the time of retirement. D Rule 157-Notifications and orders reducing pe11sion of previously :::.. retired employees-Whether Executive Instructio11s or Statutory Rules-Held, not a pure question of law, cannot be decided in absence of relevant f acts-Notificatio11 proceeds on the basis that previous orders were Executive Instructions-Se1vice Rules goveming future rights-Held, challe11ge not per- E missible on ground of retrospectivity or violation of A11icles 14 & 16 of Constitution-Rules reversing benefits given, from an ante1ior dat~eld, assailable as violative of A11icles 14 & 16 of the Constitutio11 to the extent of ", retrospectivity. Appointment-Nature, i11 case of Government employee-Held, F govemed by statutory mies a11d not contract--,..[Jnilateral alteration in service co11ditions by employer pennissible. Constitution of India : Articles 19(1) (f) & 31(1)-Retrospective reduction in pe11sion by G P- notificatio1t-Articles 19(1) (f) & 31(1) were not in existence (as suspended) on date of 11otification but existed when it came into effect retrospective- ly-Held, violative of Articles 19(1), 31(1), 14 & 16. Words and Phrases-''Acciued Right" and "Vested Right"-Meaning of H 63 64 SUPREME COURT REPORTS [1997] SUPP. 3 S.C.R. A The respondents were employees of the Railway Administration who had retired after 1.1.73 but before 5.1.88. Their pension was to be computed in accordance with Rule 2544 of the Indian Railway Establishment Code, which at that time prescribed that the running allowance be limited to a maximum of 75% of the other emoluments taken into account while cal- B culating average emoluments. The pay scales of railway employees were revised w.e.f. 1.1.73 under the Railway Services (Revised Pay) Rules 1973, but the Railway Board had intimated through a letter that the existing percentage limit of running allowance would continue to remain the same, although it was under C revision. This was later on reduced to 45% retrospectively, w.e.f. 1.4.76 by letters dated 22.4.76 and 23.6.76, which were quashed by the Tribunal and the said judgment was never challenged. Later on, the impugned notifications dated 5.12.88 reduced the max- imum limit of 75% to 45% retrospectively from the period between 1.1.73 D to 31.3.79 and to 55% from the period, 1.4.79 onwards. These notifications were challenged before the CAT and the same were quashed. The Full Bench of the Tribunal again affirmed this judgment in order to put at rest various conflicting views and decisions of its various benches on similar issues .. E Aggrieved the appellants appealed to this Court contending that the previous orders were not in the nature of executive instructions, but were statutory rules made by the Railway Board; that the relationship between the Government and its servants is not like an ordi~ary contract of service, but is something in nature of status and, therefore, the employee bas no F vested right in regard to the terms of service; that the rules made in exercise of power under Article 309 of the Constitution of India have the same effect as that of a legislative act and.can operate prospectively as well as retrospectively; and that the impugned amendments cannot be regarded as arbitrary, as due to the reduction in the percentage there bas been no G reduction in the total amount of pension payable. Dismissing the appeal, the Court HELD: 1. The plea that the previous orders dated 22.3.76 and 23.6.76 were not in the nature of executive instructions, but were statutory rules H has been raised for the first time in this Court. The question whether these CHAIRMAN,RAILWAYBOARD v. C.R.RANGADHAMAIAH 65 • orders were issued under exercise of power under Rule 157 of the Indian A ..... Railway Establishment Code, is not a pure question of law. It cannot be decided in the absence
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