TMI Blog1997 (7) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... of trains and are categorised as running staff . In addition to the pay the running staff entitled to payment of Running Allowance. Under the relevant rules com-putation of pension after retirement is made on the basis of average emoluments and a part of the Running Allowance is included in average emoluments. Provision in this regard is contained in clause (g) of Rule 2544 of the Indian Railway Establishment Code. Prior to its amendment by the impugned notifications Rule 2544 provided as follows : Rule 2544 (C.S.R. 486) - Emoluments and Average Emoluments : The term Emoluments , used in these Rules, means the emoluments which the Officer was receiving immediately before the retirement and includes : (a) pay other than that drawn in tenure post; (b) Personal allowance, which is granted (i) in lieu of loss of substantive pay in respect of a permanent post other than a tenure post, or (ii) with the specific sanction of the Government of India, for any other personal consideration. Note: Personal pay granted in lieu of loss of substantive pay in respect of a permanent post other than a tenure post shall be treated as personal allowance for the purpose of this article. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of certain allowances in conjunction with pay fixed under the 1973 Rules, the Railway Board by their letter dated January 21, 1974 intimated that the question of revision of rules for regularisation of various allowances consequent upon the introduction of the revised pay-scales under the 1973 Rules was under the consideration of the Board and pending final decision thereon, the Board had decided as under : (i) Treatment of Running' Allowance for various purposes in case of Running Staff. The existing quantum of Running allowance based on the prevailing percentages laid down for various purposes with reference to the pay of the Running Staff in Authorised Scales of pay may be allowed to continue. Through letter of the Railway Board dated March 22, 1976 it was intimated : 1. The question of revision of rules regarding treatment of Run-ning Allowance as pay for certain purposes consequent upon the introduction of revised pay scales under Railway Services (Revised Pay) Rules, 1973 has been under Consideration of this Ministry. It has now been decided that the existing rules in this respect may be modified as follows in the case of Running Staff drawing pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led the Writ Petition in a repre-sentative capacity through the General Secretary of All India Guards Council. In the said Writ Petition the petitioners challenged the validity of the order of the Railway Board as contained in the letter dated March 22, 1976 whereby the quantum of percentage of the Running Allowance for the purpose of retirement and other benefits was reduced from 75% as prescribed in Rule 2544 to 45% with effect from January 1, 1973. After the constitution of the Central Administrative Tribunal under the Administra-tive Tribunals Act, 1985, the said Writ Petition was transferred to the Principal Bench of the Central Administrative Tribunal (hereinafter referred to as 'the Tribunal') and was registered as No. T-310 of 1985. The said petition was allowed by the Tribunal by judgment dated August 6,1986 and the order of the Railway Board dated March 22, 1976 was quashed on the ground that under the Indian Railway Establishment Code which contains the statutory rules framed by the President under Article 309 of the Constitution Running Allowance up to a maximum of 75% of the pay has to be taken into account for the purpose of calculating pecuniary benefits and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued O.A. No. K-269 of 1988 filed by K.S. Srinivasan and others was pending before the Ernakulam Bench of the Tribunal. After the issuance of the said notifications the petitioners in that matter amended the petition to assail the validity of the said notifications in so far as they were given retrospective effect with effect from January 1, 1973 and April 1, 1979 respectively. O.A. No. K-269 of 1988 was allowed by the Ernakulam Bench of the Tribunal by judgment dated April 2, 1990 and the impugned notifications were quashed to the extent the amendments in Rule 2544 were given retrospective effect on the view that the said amendments in the rule in so far as the same were given retrospective effect were unjust, unreasonable and were violative of Article 14 of the Constitution. A review Application filed by the Union of India against the said judgment of the Ernakulam Bench of the Tribunal was dismissed by order dated July 25, 1990. Special Leave Petition No. 10373 of 1990 has been filed by the Union of India against the said judgment of the Ernakulam Bench of the Tribunal. It appears that the Principal Bench of the Tribunal by its judgment dated October 23, 1991 in O.A. No. 157 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 79 onwards. Those who retired from January 1,1973 to December 4,1988 were, in accord-ance with Rule 2544, as it then stood, entitled to take into account Running Allowance in the matter of computation of pension and retirement benefits upto the maximum of 75% of their pay and other allowances. As their pay was revised with effect from January 1, 1973 the limit of 75% had to be worked out with reference to the enhanced pay and other allowances that they became entitled to receive in accordance with the 1973 Rules which came into effect from January 1, 1973. (5) When the maximum was reduced from 75% to 45% upto April 1, 1979 or at the rate of 55% from April 1, 1979, the vested rights of all those who retired between January 1, 1973 and December 4, 1988 in the matter of receiving pension and retirement benefits were adversely affected. (6) Persons who retired between January 1, 1973 and December 4,1988 had earned a right to computation of pension in accordance with the statutory rules then in force. As by the time they retired, revision of pay had come into force, it is the revised pay and the Running Allowance subject to a maximum of 75% of the revised pay and allowances that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have come up before this Bench. Shri K.N. Bhat, the learned Additional Solicitor General, has, in the first place, urged that the orders dated March 22, 1976 and June 23, 1976 were not in the nature of executive instructions, but were statutory rules made by the Railway Board in the exercise of its power under Rule 157 of the Indian Railway Establishment Code and had the effect of amending Rule 2544. This plea has been raised on behalf of the Union of India for the first time in this Court. It was not put forward before the Tribunal in No. T-310 of 1985 and the judgment of the Tribunal dated August 6, 1976 in the said case proceeds on the basis that the order dated March, 22, 1976 is in the nature of executive instructions and on that basis the said order was struck down by the Tribunal for the reason that the executive instructions could not amend or dilute statutory rules. The said judgment of the Tribunal has become final. This plea was also not raised before the Full Bench of the Tribunal. The question whether the Railway Board, while issuing the orders dated March 22, 1976 and June 23, 1976, was exercising its power under Rule 157 of the Indian Railway Estab-lishment Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment and the government servant has no vested right in regard to the terms of his service. The learned Additional Solicitor General has further submitted that the rules made in exercise of the power conferred on the President under the proviso to Article 309 of the Con- stitution have the same effect as an act of the Legislature and that such rules can be made to operate prospectively as well as retrospectively. In support of the said submission reliance has been placed on the decision of the Constitution Bench in B.S. Vadera v. Union of India Ors., [1968] 3 SCR 575. The submission is that since a government servant has no vested right in the terms and conditions of his service and the said terms can be altered with retrospective effect by the rules made under the Proviso to Article 309, the retrospective operation of a rule cannot be assailed on the ground that it takes away a vested right of the government servant. It is no doubt true that once a person joins service under the Government the relationship between him and the Government is in the nature of status rather than contractual and the terms of his service while he is in employment are governed by statute or statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenged on the ground of retrospectivity by the Assistant Engineers who were in service on the date of making of these rules. Rejecting the said contention, this Court said : It is wrong to characterise the operation of a service rule as retrospective for the reason that it applies to existing employees. A rule which classifies such employees for promotional purposes, undoubtedly operates on those who entered service before the framing of the rule but it operates in futuro, in the sense that it governs the future right of promotion of those who are already in service. The judgment rules do not recall a promotion already made or reduce a pay scale already granted. They provide for a classification by prescribing a qualitative standard, the measure of that standard being educational attainment. Whether a classifica-tion founded on such a consideration suffers from a discriminatory vice is another matter which we will presently consider but surely, the rule cannot first be assumed to be retrospective and then be struck down for the reason that it violates the guarantee of equal opportunity by extending its arms over the past. If rules governing conditions of service cannot ever ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive nor retrospective laws can be made so as to contravene Fundamental Rights. The law must satisfy the requirements of the Constitution today taking into account the accrued or acquired rights of the parties today. The law cannot say, twenty years ago the parties had no rights, there-fore, the requirements of the Constitution will be satisfied if the law is dated back by twenty years. We are concerned with today's rights and not yesterday's. The legislature cannot legislate today with reference to a situation that obtained twenty years ago and ignore the march of events and the constitutional rights accrued in the course of the twenty years. That would be most arbitrary, unreasonable and a negation of history. (pp. 319-320) The said decision in Raman Lal Keshav Lal Soni Ors. (supra) of the Constitution Bench of this Court has been followed by various Division Benches of this Court. (See : Ex. Capt. K.C. Arora Anr. v. State of Haryana Ors., [1984] 3 SCR 623; T.R. Kapur Ors. v. State of Haryana Ors., [1987] 1 SCR 584; P.D. Aggarwal Ors. v. State of U.P. Ors., [1978] 3 SCR 427; K.R. Narayanan Ors. v. State of Kamataka Ors., [1994] Supp. 1 SCC 44; Union of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucation a pension is closely akin to wages in that it consists of payment provided by an employer, is paid in consideration of past service and serves the purpose of helping the recipient meet the expenses of living. Thus the pension payable to a Government employee is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation or for service rendered. (p. L85) It has also been laid down by this Court that the reckonable emolument which are the basis for computation of pension are to be taken on the basis of emoluments payable at the time of retirement. (See : Indian Ex-services League Ors. Etc. v. Union of India Ors. Etc., [1991] 1 SCR 158 at p. 173). Rule 2301 of the Indian Railway Establishment Code incorporates this principle. It lays down : A pensionable; railway servant's claim to pension is regulated by the rules in force at the time when he resigns or is discharged from the service of Government. The respondents in these cases are employees who had retired after January 1, 1973 and before December 5, 1988. As per Rule 2301 of the Indian Railway Establishment code they are entitled to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the rules in force on the date of his retirement accrued to the appellant when he retired from service, By making a retrospective amend-ment to the said Rule 299(1) (b) more than fifteen years after that right had accrued to him, what was done was to take away the appellant's right to receive pension according to the rules in force at the date of his retirement or in any event to curtail and abridge that right, To that extent, that said amendment was void, (pp. 938-939) It is no doubt true that on December 5, 1988 when the impugned notifications were issued, the rights guaranteed under Articles 31(1) and 19(l)(f) were not available since the said provisions in the Constitution stood omitted with effect from June 20, 1979 by virtue of the Constitution (Forty-fourth Amendment) Act, 1978. But the notifications G.S.R. 1143 (E) and G.S.R. 1144 (E) have been made operative with effect from January 1, 1973 and April 1, 1979 respectively on which dates the rights guaranteed under Articles 31(1) and 19(l)(f) were available. Both the notifications in so far as they have been given retrospective operation are, therefore, violative of the rights then guaranteed under Articles 19(1) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules and the average emoluments were required to be calculated on the basis of the maximum limit of Running Allowance at 75% of the other emoluments, including the pay as per the revised pay scales under the 1973 Rules. Merely because the respondents were not paid their pension on that basis in view of the orders of the Railway Board dated January 21, 1974, March 22, 1976 and June 23, 1976, would not mean that the pension payable to them was not required to be computed in accordance with Rule 2544 as it stood on the date of their retirement. Once it is held that pension payable to such employees had to be computed in accordance with Rule 2544 as it stood on the date of their retirement, it is obvious that as a result of the amendments which have been introduced in Rule 2544 by the impugned notifications dated December 5, 1988 the pension that would be payable would be less than the amount that would have been payable as per Rule 2544 as it stood on the date of retirement. The Full Bench of the Tribunal has, in our opinion, rightly taken the view that the amendments that were made in Rule 2544 by the impugned notifications dated december 5, 1988, to the extent the said amendments h ..... 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