SUBRATA SEN AND ORS. versus UNION OF INDIA AND ORS.

Citation: [2001] SUPP. 3 S.C.R. 140 · Decided: 18-09-2001 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Disposed off

Judgment (excerpt)

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SUBRATA SEN AND ORS. 
v. 
UNION OF INDIA AND ORS. 
SEPTEMBER 18, 2001 
[M.B. SHAH AND R.P. SETHI, JJ.] 
Service Law: 
Pension-Assam Oil Sta.ff Pension Fund Rules-Bumzah Oil Company 
(Acquisition of Shares of Oil India Limited and of the Undertakings in India of 
Assam Oil Con~pany Limited and the Burmah Oil Company (India Trading 
Limited) Act, 1981-Section /I-Revised Pension Scheme providing applicability 
of the scheme to employees who retired after a particular date-Employees who 
retired before the cut off date-Held, entitled to revised pension-Constitution 
of India, 1950-Article 32 
Respondent-State issued notification providing for revision of pension 
formula in respect of officers of Indian Oil Corporation (Assam Oil 
Division). A specific cut off date for applicability of. the revision was 
provided in the notification. 
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Petitioners, employees of the Corporation who had retired prior to 
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cut off date, filed Writ Petition under Article 32 of the Constitution on the 
ground that the cut off date was discriminatory and contended that they 
were entitled to get the pension on the basis of revised formula. 
Respondents admitted that petitioners were part of the group which 
came from erstwhile Assam Oil Company and were getting pension on the 
basis on non-contributory pension scheme. However, they contended that 
petitioners were not covered under revised pension scheme since separate 
fund was allocated and trust was created and approved under Income Tax 
Act, 1961, for paying pension to the retired employees and any improvement 
in the pension scheme in an approved pension fund would benefit only the 
existing members in service. 
Disposing of the appeal, the Court 
HELD: 1.1 •. The employees who retired before the cut off date viz. 
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1.12.1994 are also entitled to revised pension. [143-D] 
140 
SUBRATA SEN v. U.0.1. 
141 
1.2. The payment of pension was the liability of the employer as per 
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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 (Acquisition of Shares of Oil India Limited and of the 
Undertakings· in India ()r Assam Oil Company Limited and the Burmah 
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Oil Company (India Trading) Limited Act, 1981. [149-C; DJ 
D.S. Nakara v. Union of India, [1983) 1 SCC 305 explained and 
distinguished. 
1.3. Pension is neither a bounty, nor a matter of grace depending 
upon the sweet will of the employer, nor an ex gratia payment. It is a 
payment for the past services rendered. It is a social welfare measure 
rendering socio-economic justice to those who in the hey-day of their life 
ceaselessly toiled for the employer on an assurance that in their old age 
they would not be left in lurch. In view of the admission by Respondent, it 
is clear that petitioners were not required to contribute any amount for 
getting pension. May be 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 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. [148~H; 149-A; Bl · 
2. Right to get pension is different from getting annuity on the basis 
of accumulated contribution. [151-B] 
Sasadhar Chakravarty and Anr. v. Union of India and Ors., [1996] 11 
sec 1, distinguished. 
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3. The rules for grant of pension in the present case provide that an 
employee mentioned in specified category shall automatically be member 
of pension fund and is entitled to get pension on the date of his retirement. 
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Amount of pension is to be determined as per the Rules. That Rule is 
modified and the petitioners seek relief on the basis of t:1e amended rule on 
the ground that there cannot be any discrimination between the employees 
who retired prior to or after a particular date. There is no question of 
pensioners (retired employees) dividing the pension fund and/or payment 
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142 
SUPREME COURT REPORTS 
[2001] SUPP. 3 S.C.R. 
of pension to be made only from the pension fund. The liability to pay 
pension arises because of provision made in the rules. [151

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