UNION OF INDIA AND ANR. versus S.L. VERMA AND ORS

Citation: [2006] SUPP. 9 S.C.R. 770 · Decided: 28-11-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed
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Judgment (excerpt)

A 
UNION OF INDIA AND ANR. 
\I. 
S.L. VERMA AND ORS. 
NOVEMBER 28, 2006 
B 
[S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
Service Law: 
Pension Scheme-Extended to employees of Bureau of Indian Standards 
C with liberty to exercise option to continue with CPF Scheme-Option not 
exercised-Held, only when an employee consciously opted for to continue 
with CPF scheme he would not become a member of Pension Scheme-Jn 
view of legal fiction they become members of the Pension Scheme-Regulation 
I 6 ipso facto applicable in their case-Bureau of Indian Standards (Terms 
D and Conditions of Service of Employees) Regulations, I 988-Regzilation 
I 6-Interpretation of Statutes-Legal fiction. 
Respondents no. 1 to 13 were employees of respondent no. 14-Bureau 
oflndian Standards and were members of Contributory Fund Scheme (CPF). 
Government of India issued Office Memorandum dated 1.5.1987 to the effect 
E that aII th~ CPF beneficiaries who were in service on 1.1.1986 and were still 
in service would be deemed to have come over to Pension Scheme, if no option 
to continue under the CPF Scheme was exercised. To the same effect was the 
recommendations of the Fourth Central Pay Commission which was accepted 
by the Central Government and was made applicable to the employees of 
F respondent no. 14, Bureau of Indian Standards. Accordingly Bureau of Indian 
Standard (Terms and Conditions of Service of Employees) Regulations, 1988 
were framed and the said Pension Scheme was incorporated in Regulation 
16. However, respondents 1 to 13 continued to be treated as if they had still 
been continuing under the CPF Scheme assuming that it was obligatory on 
their part to give a positive option for that purpose. On 2.2.1999 respondent 
G no.· 14 requested the Union of India to grant another chance to these 
respondents to switch over to Pension Scheme, which request was not acceded 
to. Respondents no. 1 to 13 thereupon filed a writ petition before the High 
Court. Single Judge aIIowed the writ petition. In appeal the Division Bench 
modified the order of Single Judge to the extent that appeIIants would consider 
H 
770 
U.0.1. v. S.L. VERMA (S.B. SINHA, J.] 
771 
passing of a conditional approval (of the Pension Scheme) stipulating that they A 
would not incur any liability in the event of respondent no. 14 failing to satisfy 
the pension liability of respondents no. 1 to 13. Aggrieved, the Union of India 
filed the present appeal. 
Dismissing the appeal, the Court 
HELD: 1.1. The Central Government proceeded on a wrong premise that 
the ·Pension Scheme was not in existence and it was a new one. Two legal 
fictions were created, one by reason of the Office Memorandum dated 1.5.1987 
B 
and another by reason of the acceptance of the recommendations of the Fourth 
Central Pay Commission with effect from 1.1.1986. Only when an employee 
consciously opted for to continue with the CPF Scheme, he would not become C 
a member of the Pension Scheme. It is not disputed that respondents no. I to 
13 did not give their options by 30.9.1987. Thus, these respondents in view of 
the legal fiction created, became members of the Pension Scheme which a 
fortiori would mean that they no longer remained in CPF Scheme. Once they 
became the members of the Pension Scheme, Regulation 16 of the Bureau of D 
Indian Standards (Terms and Conditions of Service of Employees) 
Regulations, 1988 became ipso facto applicable in their case also. (774-C-DI 
1.2. The Single Judge of the High Court was correct in allowing the 
writ petition filed by the private respondents with a rider that thereby the Union 
<lflndia would not be liable to financial liability. (774-H; 775-Al 
E 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2723/2005. 
From the final Judgment and Order dated 16.9.2004 of the High Court 
of Delhi at New Delhi in W.A. No. 244/2004. 
Vikas Sharma, V.K. Verma and Shreekant N. Terdal for the Appellants. 
K.K. Rai, B.K. Sood, Bankey Bihar, S.K. Pandey, Abhishek Singh, C.S. 
Misbra, V.K. Singh and Ms. Indra Sawhney for the Respondents. 
The Judgment of the Court was delivered by 
S.B. SINHA, J. The respondent Nos. 1 to 13 were employees of Bureau 
F 
G 
of Indian Standards. The said authority was created under the Bureau of 
Indian Standards Act, 1986. Although a statutory authority, it is said to be 
under the administrative control of Ministry of Consumer Affairs. Respondent 
Nos. I to 13 were members of Contributory Provident Fund Scheme(CPF H 
772 
SUPREME COURT R
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