UNION OF INDIA AND ORS. versus L.V. VISHWANATHAN ETC.

Citation: [1997] SUPP. 5 S.C.R. 112 · Decided: 11-11-1997 · Supreme Court of India · Bench: SUJATA V. MANOHAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

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A 
UNION OF INDIA AND ORS. 
v. 
L.V. VISH}VANATHAN ETC. 
NOVEMBER 11, 1997 
B 
[SUJATA V. MANOHAR AND M. JAGANNADHA RAO, JJ.] 
Service law : 
Central Civil Services (Pension) Rules 1972/Fundamenta/' Rule-
C Rule33/Rule 9 (21) Office Memorandum dated. 14.4.1987-Retirement 
Benefits_:Audit Officers-On deputation-Retired from service-Pension 
calculated on the basis of basic pay excluding deputation allowance-
Retrospective effect given to the memorandum-Struck down by Tribunal-
Held, The Tribunal erred in striking down the office memorandum dated 
D 14.4. 1987, No prejudice is caused by the retrospective operation of office 
memorandum-Order of tribunal set aside. 
·The respondents were Audit Officers who were on deputation to the 
Secretariat before their ~eti,relnent. Both the respondents opted for retaining 
their pay in the parent office plus a deputation allowance. At the time of their 
E retirement, under Rule 33 of the Central Service (Pension) Rules 1972, 
emoluments for the purpose of calculation of pension were defined to mean 
pay as defined, in Fundamental Rule 9(21). Deputation allowance treated as 
special pay was included for the purpose of calculation of Pension. After the 
Fourth Pay Commission, by Office memorandum dt. 14.4.1987 modification 
F 
in the pension rules was made. As per the modification only sub-clause (i) 
of Fundamental Rule 9 (21) would constitute basic pay excluding sub-clause 
(ii) & (iii). Therefore, under 9(2l)(a~(l) the basic pay would be calculated by 
excluding deputation allowance. The modifications were given retrospective 
effect from 1.1.1986. The respondents challenged the retrospective 
modification of the pension rules before the Tribunal. The Tribunal struck 
G down the retrospective operation of office memorandum dt. 14.4.1987. 
Hence the present appeal. 
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The contention of the appellant-Union of lndJa was that the changes · 
consequent upon the Fourth Pay Commission Report have to be taken as a 
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package and they cannot reject a part of that package which was 
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U.0.1. v. L.V. V!SHWANATHAN 
113 
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disadvantageous to them. It was further contended that options were given to A 
respondents either to r_etain their revised pay scales and the old benefits or 
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to opt for their new pay scales and get benefits as per the new scheme. Thus 
if the retrospective operation of the Memorandum causes any prejudice, the 
employee can reject it and retain his old benefits. 
The contention of the respondent-employees was that by a retrospective B 
amendment in the pension rules, their right to include deputation allowance 
as a part of their emoluments has been taken away. They contended that such 
retrospective operation of the pension rules must be set aside as arbitrary 
and violative of Art. 14 and 16 of Constitution of India. 
Allowing the appeal, this Court 
HELD : 1.1. The retrospective operation of Office Memorandum cannot 
be considered as prejudicial as it has made an express provision to prevent 
any actual prejudice to the employees. The judgment of the Central 
Administrative Tribuna~ in so far as it strikes down the retrospective operation 
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of Office Memorandum of 14.4.1987 is, therefore, set aside. 1118-B-D] 
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1.2. There is Ii clear nexus between the upward revision in the pay 
scales and the new formula for calculating pension. Both are given 
retrospective effect from 1.1.1986. The Office Memorandum which changes 
the formula for pensfo·n also provides that those who retired after 1.1.1986 
but before the issuance of the office Memorandum would have the option to E 
get their pension determined under·the then existing rules on the basis of 
emoluments they were then getting. The effect is that (1) those who retired 
prior to 1.l.1986 got old emoluments and Pension as per the old formula (2) 
those whd retire after 30.6. 1987 get new pay scales and pension as per new 
form.;ila and (3) those who retire between 1.1.1986 and 30.6.1987 have the 
option to choose to be with either those in (1) or t~ose in (2) w·hichever is F 
more advantageous to them. (117-F-G) 
1.3. The respondents want that those who retire between 1.1.1986 and 
30.6.1987 should have the new pay scales and also the more liberal old 
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formula for calculating pension as applied to the new pay scales. If this is 
accepted, those who retire between I.l.1986!lnd 30.6.1987 will get higher G 
pension than all those who have.retired before 1.1.1986 as also those who 
retire after 30

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