2008 (4) TMI 714 - SC - Indian Laws

Whether denial of Dearness Relief on pension in case of those retired employees of VSNL who have drawn pay on IDA pay scales with IDA Dearness Relief is legal and just? Whether any pensionary benefits have been given to respondents-retirees or to any similarly situated persons of VSNL at the time of mistaken calculation of the pensionary benefits or in compliance to the order of the High Court such benefits shall not be recovered from them?

Summary

Issues Involved:
1. Entitlement to retrial benefits under the Central Government Pension Scheme.
2. Calculation of pensionary benefits based on IDA or CDA pay scales.
3. Applicability of Dearness Relief (DR) on pension.
4. Validity of the High Court's judgment affirming the Single Judge's order.
5. Clarification and interpretation of various Office Memoranda and Circulars issued by the Government and VSNL.
6. Legal principles regarding vested rights and retrospective amendments.

Detailed Analysis:

1. Entitlement to Retrial Benefits under the Central Government Pension Scheme:
The respondents, former employees of the Overseas Communication Service (OCS), were transferred to Videsh Sanchar Nigam Limited (VSNL) and opted for the Central Government Pension Scheme. The High Court directed the appellants to provide retrial benefits as per the Central Government Pension Scheme within four weeks.

2. Calculation of Pensionary Benefits Based on IDA or CDA Pay Scales:
The dispute centered on whether pensionary benefits should be calculated based on Industrial Dearness Allowance (IDA) or Central Dearness Allowance (CDA) pay scales. The respondents argued for CDA benefits, while the appellants contended that IDA pay scales should apply since the employees were drawing IDA scales at the time of retirement.

3. Applicability of Dearness Relief (DR) on Pension:
The respondents sought DR on pension based on CDA scales. The appellants argued that DR should be based on IDA scales, as the respondents were drawing IDA pay scales at retirement. The Court clarified that DR on pension should align with the IDA pay scales, as per the Government Circular dated 24.12.1992.

4. Validity of the High Court's Judgment Affirming the Single Judge's Order:
The Supreme Court found that the High Court erred in granting relief based on an incorrect interpretation of DR as a vested right. The High Court's judgment was set aside, and the writ petition was dismissed.

5. Clarification and Interpretation of Various Office Memoranda and Circulars:
The Court examined several Office Memoranda and Circulars, including:
- O.M. dated 13.01.1986: Provided options for pensionary benefits under Government or PSU rules.
- O.M. dated 19.03.1986: Reiterated pensionary benefits as per the 13.01.1986 Circular.
- O.M. dated 07.02.1990: Clarified that emoluments drawn under PSU rules would be treated as emoluments for pension calculation under Central Government Rules.
- Circular dated 24.12.1992: Specified that IDA pay scales would apply for pension calculation, and DR would follow IDA patterns.

6. Legal Principles Regarding Vested Rights and Retrospective Amendments:
The Court held that the respondents did not have a vested right to receive DR based on CDA scales when their pension was calculated on IDA scales. The mistaken payment of DR on CDA scales did not confer any legal right. The Court distinguished this case from the precedent in Chairman, Railway Board v. C.R. Rangadhamaiah, where retrospective amendments reducing pension were invalidated.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's order. The respondents were entitled to pension calculated on IDA pay scales with corresponding IDA DR. Any benefits mistakenly given under CDA scales would not be recovered. The Court emphasized that DR is a matter of government discretion and not a vested right. There were no orders as to costs.