WELFARE ASSOCIATION OF ABSORBED CENTRAL GOVERNMENT EMPLOYEES IN PUBLIC ENTERPRISES AND ORS. ETC versus UNION OF INDIA AND ANR.

Citation: [1995] SUPP. 6 S.C.R. 748 · Decided: 15-12-1995 · Supreme Court of India · Bench: KULDIP SINGH, S. SAGHIR AHMAD, K. VENKATASWAMI · Disposal: Case Allowed
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Judgment (excerpt)

A 
WELFARE ASSOCIATION OF ABSORBED CENTRAL 
B 
GOVERNMENT EMPLOYEES IN PUBLIC ENTERPRISES 
AND ORS. ETC. 
v. 
UNION OF INDIA AND ANR. 
DECEMBER 15, 1995 
[KULDIP SINGH, S. SAGHIR AHMAD AND 
K. VENKATASWAMI, JJ.] 
C 
Service Law: 
Central Civil Services (Pension) Rules, 1972 : Rules 37, 37-A-O.M. 
No. 3412/86P & PW dated 5.3.1987-Paragraph 4-Pension-Commutation 
of-Government officials allowed to retire and get absorbed in public 
enterprises-One-third commuted value restored-But restoration not allowed 
D in case of government pensioners who had commuted their entire pension -
Held : they are also entitled to such benefits. 
Constitution of India, 1950 : Articles 14, 16-Rule 37- A-0.M. No. 
3412186 P & PW dated 5.3.1987-Para 4-Pensiott-Restoration of-Govt. 
E pensioners absorbed in public enterprises-Allowed to commute entire pen-
sion-Not allowed benefits of restoration-Held violative of 
When the government of India decided to start public undertak-
ings/enterprises in the core sector or industries, it sent some or its officers 
to the public undertakings on deputation. Since it was felt that services of 
F officers having sufficient experience and skill were necessry for the public 
enterprises, the Government devised measures to induct those officers 
willing to continue in public enterprises. Those officers were allowed to be 
absorbed in public undertakings/enterprises. The Government also offered 
to deem their retirement as retirement in 'public interest', and such 
absorbed/retired Gvoernment servants were offence retiral benefits. They 
G were also offered the usual facility of communting one-third of their 
original pension and also an additional facility of commuting the balance 
two-third pension i.e. to commute the full pension. This facility created 
three categories of persons : (1) Persons who were not commuting their 
pension and, therfore, drawing full monthly pension; (2) Persons who were 
H 
commuting one-third of the pension and to drawing the balance as monthly 
748 
WELFARE ASSN. OF ABSORBED CENTRAL GOVT. F.MPLOYEES v. U.01. 749 
pension; (3) Persons who were commuting full pension and their pension A 
deemed to have been reduced to nil. 
The persons in the first category continued to derive all benefits and 
get all the interim relief, liberalisation and other reliefs as had been given 
by the Government to the pensioners. Persons in the second category are 
denied these benelits to the extent of one-third commutation. Persons in B 
the third category are totally denied of all the aforesaid benefits. 
The second category of the retired Government servants who got 
one-third of the pension commuted moved this Court for restoration of 
their one-third pension by filing a writ petition under Article 32 of the c 
Constitution, contending that their claim for restoration of one-third 
pension commuted gets adjusted by about 10 or 12 years and, therefore, 
the Government should be directed to restore the commuted portion of 
one-third pension. 
When the matter was heard, this Court gave a suggestion to the D 
Government to look into the matter. The Government accepted the sugges-
tion and came forward with a new formula which would be extended w.e.f. 
1.4.1986. However, this Court thought it would be equitable that the benefit 
agreed should be extended in respect of commuted portion, from 1.4.1985 
and ordered accordingly. Common Cause, Registered Society v. Union of 
India, (1987) 1 SCR 497. 
E 
While implementing the judgment In 'Common Casue', the Govern-
ment denied the benefit to the petitioners by inserting paragraph 4 in the 
impugned O.M. dated 5.3.1987 on the ground that they ceased to be 
Central Government pensioners since they have commuted their entire 
pension. 
In these writ petitions under Article 32 the petitioners prayed that 
the relief as was allowed in 'Common Cause' should be extended to them 
also. 
Allowing the Writ Petitions, this Court 
HELD : 1.1. The petitioners are entiiled to the benefits as given by 
this Court in 'Common Cause' so far as it relates to restoration of 
one-third of the commutation pension. Cousequeutly the impugned para-
F 
G 
graph 4 of the Office memo dated 5.3.1987 is quashed. [758-B) 
H 
750 
SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R. 
'•I 
A 
1.2. There is a clear cut distinction in Rule 37 A of the C.C.S. 
B 
(Pension) Rules, 1972, that one-third of the portion of pension to be 
commuted without any condition and two-third of pension to be rece
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