# D.S. NAKARA & OTHERS v. UNION OF INDIA - **Citation:** [1983] 2 S.C.R. 165 - **Court:** Supreme Court of India - **Decided:** 1982-12-17 - **Case number:** Writ Petition Nos. 5939-41 of 1980 - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/d-s-nakara-others-v-union-of-india-8810 - **Pages:** 46 ## Headnote 165 A D.S. NAKARA & OTHERS v. UNION OF INDIA December 17, 1982 {Y.V. CllANDllACHUD, C.J., V.D. TuLzApulll:AB. D.A. DESAI, 0. CHINNAPPA RBl>DY AND BAHARUL ISLAM, JI.) ConS/ltution of Indio, Art. U-Cntral Clril S1rvic., (P1n1/on) Rules, 1972 olld R1gulatlo1U gororit/ltg p11UI011 for ..trmod Porc11 P1rsonn1i-Llblral/1ation in computallon of p1/Ulon eff1cl/P1 from •P1Ciffed dati-Di.ld., pensl0111r1 •o .. lo co11f•f b1ntfit 01t some whil1 d1nyi,,g it to oth•r1-Cla11ificatlon arbitrary, devoid of ratio11,/ 111xus to o!J}1.:t of liberalisation aNI violative of A.rt. If.. co .. tltMllO• of India, ..trt. 14-Doctrl•• of llV1FObility-S1 .. ra11e• 11101 lum •if•ct of Mlar1in1 scope of /q/slallon . R11le1 Qlld Re111Iatlon1 f.J111rning tra11t of p1n1ion-P1nsion is a rifhtDe/ur.d prtio• of comPMJOlion for .tlfPice rtnder1d-Al10 a soclal~welfar• ,...,.,,. By a Memorandum datod M•y 25, 1979 (ll•bibit P-1) the Government of India liberalisod the formull for corupatalion. of pension in re•poct or employ ... aovetned by tbe Central Civil Suvicos (Pon1ion) Rule•. 1972 and made it applicable to employees retiring on or after Ma.rch 31, 197~. By anothdr Memorandum issued on September 23, 1979 (B•bibit P-2) it oxtendod the ••mo, subject to certain limitatiOll!, to tbe Arm"d Forces' personnel retiring on or after April t, 1979. Petitioners I and 2 who had retired in tho year 1972 from tho Central Civil Service and the Armed Forces' service respectively, and petitioner No. 3, a rogisterod society ~ousing the ca- of pensioners all over the country, challenaed tho validity of the above two memoranda 'in so far as tbo liberalisation in computation of pension bad boon made applicable only to those retiring on or after the date specified and tho bonefit of liberalisation had been denied to all those who bad retired earlier. Counsel for petitioners contended th1t all p~n~ioJ!rs entitled til re,;aiv~ pension under the relevant rules form a class irrespective of the dates of their retirement and there cannot be a mini-classification within this classi that the differential treatment accorded to those who had retired prior to th~ sp~cifi~d date is violative of Art. 14 as the choice of specified date is wholly arbitrary and tho classification hued on the fortuitous circumstance of retirement before or subaoquent to the specified date is invalid; and that the scheme of liberalisation in computation of pension must be uniformly enforced with regard to all pensioners. I c I G H A B c D E F G H 166 SUPREME COUB.T REPORTS (1983] 2 S.C.M. Counsei for resporidents contended that a classification based oa. the date of retirement is valid for the purpose of granting pensionary benefits; that the specified date is an integral part of the scheme of liberalisation and the Government would never have enforced the scheme devoid of the date; that the doctrine of severability cannot be invoked to sever the specified date from the scheme as it would have the effect or enlarging the class of pensioners covered by the scheme and when the legislature has expressly defined the class to which the legislation appJies it would be outside the judicial function to enlarge the class; that there is not a single case where the court bas included some category within the scope of provbioos of a law to maintain its consti· tutionality; that since the scheme of liberalisation has financial implications, the Court cannot make it retroactive; that if more persons divided the available cake the residue falling to the share of each, especially to the share of those who are not before the court would become far less and therefore no relief could be given to the petitioners. that pension ~s always correlated to the date of of retirement and the court Cannot change the date of retirement and impOse freSh commutation benefit Which may burden the exchequer to thC tune of Rs. 233 crores; and that the third petifioner has no locus standi in the cBse. Allowing the petitiolis, HELD: Article 14 strikes at a ## Text _Characters 0–39,498 of 119,199. This is a partial read: ask again with offset=39498 for what follows._ 165 A D.S. NAKARA & OTHERS v. UNION OF INDIA December 17, 1982 {Y.V. CllANDllACHUD, C.J., V.D. TuLzApulll:AB. D.A. DESAI, 0. CHINNAPPA RBl>DY AND BAHARUL ISLAM, JI.) ConS/ltution of Indio, Art. U-Cntral Clril S1rvic., (P1n1/on) Rules, 1972 olld R1gulatlo1U gororit/ltg p11UI011 for ..trmod Porc11 P1rsonn1i-Llblral/1ation in computallon of p1/Ulon eff1cl/P1 from •P1Ciffed dati-Di.ld., pensl0111r1 •o .. lo co11f•f b1ntfit 01t some whil1 d1nyi,,g it to oth•r1-Cla11ificatlon arbitrary, devoid of ratio11,/ 111xus to o!J}1.:t of liberalisation aNI violative of A.rt. If.. co .. tltMllO• of India, ..trt. 14-Doctrl•• of llV1FObility-S1 .. ra11e• 11101 lum •if•ct of Mlar1in1 scope of /q/slallon . R11le1 Qlld Re111Iatlon1 f.J111rning tra11t of p1n1ion-P1nsion is a rifhtDe/ur.d prtio• of comPMJOlion for .tlfPice rtnder1d-Al10 a soclal~welfar• ,...,.,,. By a Memorandum datod M•y 25, 1979 (ll•bibit P-1) the Government of India liberalisod the formull for corupatalion. of pension in re•poct or employ ... aovetned by tbe Central Civil Suvicos (Pon1ion) Rule•. 1972 and made it applicable to employees retiring on or after Ma.rch 31, 197~. By anothdr Memorandum issued on September 23, 1979 (B•bibit P-2) it oxtendod the ••mo, subject to certain limitatiOll!, to tbe Arm"d Forces' personnel retiring on or after April t, 1979. Petitioners I and 2 who had retired in tho year 1972 from tho Central Civil Service and the Armed Forces' service respectively, and petitioner No. 3, a rogisterod society ~ousing the ca- of pensioners all over the country, challenaed tho validity of the above two memoranda 'in so far as tbo liberalisation in computation of pension bad boon made applicable only to those retiring on or after the date specified and tho bonefit of liberalisation had been denied to all those who bad retired earlier. Counsel for petitioners contended th1t all p~n~ioJ!rs entitled til re,;aiv~ pension under the relevant rules form a class irrespective of the dates of their retirement and there cannot be a mini-classification within this classi that the differential treatment accorded to those who had retired prior to th~ sp~cifi~d date is violative of Art. 14 as the choice of specified date is wholly arbitrary and tho classification hued on the fortuitous circumstance of retirement before or subaoquent to the specified date is invalid; and that the scheme of liberalisation in computation of pension must be uniformly enforced with regard to all pensioners. I c I G H A B c D E F G H 166 SUPREME COUB.T REPORTS (1983] 2 S.C.M. Counsei for resporidents contended that a classification based oa. the date of retirement is valid for the purpose of granting pensionary benefits; that the specified date is an integral part of the scheme of liberalisation and the Government would never have enforced the scheme devoid of the date; that the doctrine of severability cannot be invoked to sever the specified date from the scheme as it would have the effect or enlarging the class of pensioners covered by the scheme and when the legislature has expressly defined the class to which the legislation appJies it would be outside the judicial function to enlarge the class; that there is not a single case where the court bas included some category within the scope of provbioos of a law to maintain its consti· tutionality; that since the scheme of liberalisation has financial implications, the Court cannot make it retroactive; that if more persons divided the available cake the residue falling to the share of each, especially to the share of those who are not before the court would become far less and therefore no relief could be given to the petitioners. that pension ~s always correlated to the date of of retirement and the court Cannot change the date of retirement and impOse freSh commutation benefit Which may burden the exchequer to thC tune of Rs. 233 crores; and that the third petifioner has no locus standi in the cBse. Allowing the petitiolis, HELD: Article 14 strikes at a-rbitrarinfss in State· action and ensures fairness and equality of treatment. It is attracted where equals are treated differently without any reasonable basis. The principle underlying the guarantee is that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would -have to ·be"'applied to atl in the same situation and there should be no discrimination between one person and a.t1other if as regards the subject-•matter of the legislation their position is substan~ially tbe same. Article 14 fo1bids class ~egislatio_n ·but permits reasonable classification for the _purpose of legislation. The classification must. be founded on an intelligible differentia which_ Qistinguishes persons or things that are grouped together from those that are left out of the group and thai differentia must have a rational nexus to the 9bject, sought to be achieved by the statute in question. Io other words, there ought to be causal connection between the basis of classification and the object of the statute. The doctrine of classification was evolved by the Court for the purpose of sustaining a legislation or State action designed to help weaker sections of the society, Legislative and executive action may accordingly be sustained by the court if the State satisfies the twin tests of reasoD;Bble classification and the rational principle correlated to the object sought to be achieved. A discriminatory action is liable to be struck down unless it can be shown by the Government that the departure was not arbitrary but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. [176B,178 D-E, 179 B-C, 177 C-D, 179 C-D, 176 E-F, 179 H, 180 A·C] Maneka Gandhi v. Union of India, [1978) 2 S.C.R. 621; Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar & Ors., [1959] S.C.R. 279; In re Special Courts Bil/, [1979] 2 S.C.R, 476; E.P. Royappa v. State of Tamil Nadu, [1974] 2 S.C.R. 348; Ajay Hasia etc. v. Khalid Mujib Sehravardi & Ors., [1981) 2 S.C.R. 79; Air India etc. v. Nargesh Mterza & Ors., [1982) 1S.C.R.438 and Ramana D11yaram Shetty v. International Airport Authority of India & Ors., [1979] 3 S.C.R. 1014, referred to. _, D.S. NAKARA \I, UNION 167 In the instarit case, Jooking to the goals for the attainment of wh ih pension is paid and the welfare State proposed to b: set up in the light of t(I: Directive Principles of State Policy and Preamble to the :constitution it isc indisputable that pensioners for payment of pension from a class. Wilen the State considered it necessary to liberalise the pension scheme in order to augcn~nt social security in old age to governnient servants it could not grant the b~oefits of liberalisation orily fo those who r:tire1S1J.,oeq_1 !!lt ta t1.~ i;J~~iFi!i date and deny the same to those who had retired prior to that date. The division which classified the pensioners into two classes on the basis of the specified date was devoid of any rational principle ao.J w1> bJttl arbitr,iry a'.li 1.11,rin.;ipl~d beiag unrelated to the object sought to be achi.,ved by grant of lib :i-i 1 is!1 P.!il 1io:i and the guarantee of equal treatment contained in Art. 14 was violated in1smuch as the pension rules which were statutory in character meted out differential and discriminatory treatment to equals in the m1tter of co n,·1t1tioJ Jof p.:nsio11 from the dates specified in the impugned m"n>ran1i. [!JO F-H, 194 A·C, 194 F-H) (ii) Prior to the liberalisation of the formula for computation of pension averagt emoluments of the last 36:months' service of the employee provided the measure of pension. By the liberalised scheme, it is now reduced to average emoluments of the last JO months' service. Pension would now be on the higher side on account of two fortuitous circumstances, namely, 1hat lbe pay scales permit annual incremerits and usually there are promotions in the last one or two years of the employee's service. Coupled with it a slab system for complltation has been introduced and the ceiling of pension has been raised. Pensioners who retired prior to the specified date would suffer triple jeopardy, viz., lower average emoluments, abseace of slab system and lower ceiling. [191 A·D] (lii) Both the impugned memoranda do not spell out the raison d'etre for liberalising the pension formula. In the affidavit in opposition it is stated that the liberalisation was decided by the government in view of the pefsistent demand of the employees represented in the sCheme of Joint Consultative Machinery. This would clearly imply that the pre· liberalised scheme did not provide adequate protection in old age. and that a further liberalisation was necessary as a measure of economic security. The government also took note of the fact that continuous upward movement of the cost of living index and diminishing purchasing power of rupee necessitated upward revision of p!D.iiOJ. When the government favourably responded to the demand it thereby ipso facto concedf:d that there was a larger available national cake, part of which could be utilised for providing higher security to retiring employees. With this underlying intendment of liberalisation, it cannot be asserted that it was good enough ooly for thOIC who would retire subsequent to the specified date but not for those who had already retired. [191 F-G, 192 A, 191 H, 192 Bl . 2. If removal of arbitrariness can be brought about by severing the mischievous portion, the discriminatory part ought to be removed retaining the beneficial portion. [198 F] .In th~ instant .case, the petitio~ers ~o not challenge, but seek the benefit of the hbcrahsed pension scheme. Their grievance is of the denial to th f th b b't · d · em o e same y ar 1 rary intro uct1on of words or limitation Th · h. · ere 1s not 1na i c D E G H -···~-- B c D E , G H 168 SUPREME COURT REPORTS I 1983) 2 S.C.R. immutable about the choosing of an eveb.t as air-eligibility criteria subsequent to a specified date. If the event is certain but its occurrence at a point of time is considered wholly irrelevant and arbitrarily selected having an undesirable effect of dividina: a homogeneous class and of introducing discrimination the same can be easily severed and set aside. It i1 therefore just and proper that the words introducing the arbitrary fortuitous circumstance which are vulnerable as denying equality be severed and struck down. In Exhibit P-1 the words: ,.That in respect of tho Government servants who were in service on the 31st March, 1979 and retiring from sel"fice on or after that date. and in Exhibit P-2, the words : ''the new rates of pension are effective from 1st April 1979 and will be applicable to all service officers who became/become noneffective on or after that date" are unconstitutional and are struck down with the specification that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative. Omitting the unconstitutional part it is declared that all pensioner!'I governed by the 1972 Rules and Army Pension Regulations sball be entitled to pension as computed under the liberalised pension scheme from the specified date, irrespective of the date of retirement. Arrears of pension prior to the specified date as per fresh computation is not admissible. [190A-C, 198 G, 198 E-F, 205 F-H, 209 F-H, 210 A-DJ D.R. Nim v. Union of India, [1967] 2 S.C.R. 325; and Jai/a Singh & Anr. v. Stai. of Rajasthan & Ors., [1975] Supp. S.C.R. 428, relied on. Union of India & Anr. v. M/s. Parameswaran Match Works etc., [1975] 2 S.C.R. 573; and D.C. Gou1< & Co. etc. v. State of Kera/a & Anr. etc'., (1980] 1 ,_ S.C.R. 804, explained and distinguished. ,,. Louin/II• Ga1 Co. v. Alabama Power Co., 240 U.S. 30 (1927], referred to. (ii) The reading down of tho impugned memoranda by sevorin1 the objectionable portion would not render the liberalised pension scheme vague, unenforceable or unworkable. The Court is not legislating in readina: down the memoranda; when the Court strikes down the basis of classification as violative of Art. 14 it merely sets at naught the unconstitutional portion retaining the constitution&l portion. There is no dlfficulty in implementing the scheme omitting the event happening after the specified date, retaining the more human formula for computation of pension. The pension will have to be recomputed in accordance with the provisions of the liberalised pension scheme as salaries were required to be recomputed in accordance with the recommendation of the Third Pay Commission but becoming operative from the specified date. The Court is satisfied that the additional financial liability that may be imposed by bringing -' • D.S. NAKARA V. UNION in pensioners who retired prior to April l, 1979 within the fold or the liberaliaad pension scheme is not too high to be unbearable or such as would have detracted the Government from covering the old pensioners under the scheme. The severance of the nefarious unconstituti6nal part does not a'flversely affect future pensiqners and their presence in these petitions is irrelevant. [204 G·H, 197 E·F, 206 B, 196 G, 208 G, 199 Bl (iii) To say that by its approach the Court is restructuring the liberaliaod I pension scheme is to ignore the constitutional mandate. The Court· is not conferring benefits by its approach; it is only removing the illegitimate classifica• tion and after its removal the law takes its own course. [206 0-E] (iv) It is not correct to say that if the unconstitutional part is struck down the Parliament would not have enacted the measure. The executive, with parliamentary mandate, liberalised the pension scheme. It is implicit in the scheme that the need to grant a little higher rate of pension to the pensioners was considered eminently just. One could have understood persons in the higher pay bracket being excluded from the benefit of the scheme because it w.ould have meant that those in the higher pay bracket could fend for tbemselver. Such is not ·the, ~xclusion. The exclusion is of a whole class of people who retired before a certain date. Parliament would not have hesitated to ex.tend c the benefit otherwise considered erriinenily just and this becomes clearly D discernible from p,35 of the 9th Report of the Committee on Petitions (6th Lok Sabha), April 1979. [206 H, 207 A·E] (v) Whenever classification is held to be impermissible and the measure can be retained by removing the unconstitutional portion of the classification, the resultant effec:t may be of enlarging the cla'Ss. In such a situation the court can strike down the words of limitation in an enactment. That is what is called reading down the measure. There is no principle tbat severance limits tbc scope of legislation but can never enlarge it. [205 B-C] Jaila Singh & Ors. v. State of Rajasthan & Ors., [1975] Supp. S.C.R. 428 and Randhlr Singh v. Union of India & Ors.. [1982) l S.C.C. 618, relied on. (vi) The absence of precedent does not deter the court. Every new norm of socio~economic justice, every new measure of socia1 justice commenced for the first iime at some point of time in history. If at that time it was-, rejected 88 being without a precedent, law as an instrument of social engineering would have long since been dead. [193 G, 193 C-D] · (vii) The court is not making the scheme of lib~ralisation retroactive by its approach. Retroactiveness is in'lplicit in the theory of wages. When revised pay.scales are introduced. from a certain date, all existing employees are brought on to the revised scales adopting a theory of fitments and increments ~or past service. The benefit of revised scales is not limited to those who enter service subsequent to the date fixed for introducing revised 'scales but is ex1en4ed _tO all those in service prior to that date. Even in the case of the new retiral benefit of gratuity under the the Payment of Gratuity Act, 1972, past service was taken into consideration. The sch~me of liberalisation is not a ne\V r~tir1l benefit; ir~ I ' B D ' 1 'f(J SUPREME 'COURT RBl'ORTS [1983) 2 S.C,R. an upward revision of an existing benefit. Pension has corrtlatioo to average emoluments and the length of qualifying service and any JiberaHsation:would pro tanto ber etroactive in the narrow sense of the term. AssumiDg the government bad not prescribed the specified date and thereby provided that those retiring, pre and past the specified date, would all be governed by the liberalised pension scheme it would be both prospective and retroactiVe. Only the pension will have to be recomputed in the light of the formula enacted in the liberalised pension scheme and effective from the date the revised scheme comes into force. A statute is not prOperly called retroactive because a part of the requisites for its action is drawn from a time antecedent to its passing. [195 H, 196 H, 196 G, 196 D, 196 B·DJ Craits on .Statute Law, Sixth Edition, p. 387 referred to. (viii) There is no question of pensioners dividing the pension fund which, if more persons are admitted to the scheme, would pro rata affect the share. The pension scheme, including the liberalised scheme, is non-contributory in character. The payment of pension is a statutory liability undertaken by the Government. Whatever becomes due and payable on account of pension is recognised as an item of expenditure and is budgeted for every year. At any given point of time there is no fixed or pre-determined pension fund which is divided amongst eligible pensioners. [195 C·G] (ix) The date of retiremei:tt of each employee remaining as it is. there is no question of fresh commutation of pension of the pens.i0ners who retired prior to 31st March 1979 and have already availed of the btncfit of commutation. It is not open to them .to get that benefit at this late date because commutation has to be availed of within the specified time li01it from the date or actual retirement. [206 C-D] 3. The discernible purpose underlying the pension scheme must inform the interpretative process and it should receive a liberal construction. [185 O~H] (i) Pension is a right; not a bounty or gratuitous payment. The payment or pension does not depend upon the discretion of the Government but is governed by the rules and a government servant coming within those rules is entitled to claim pension. [186 A·B) Deoki Nandan Prasad v. State of Bihar & Ors., (1971] Supp. S.C.R. 634 and State of Punjab & Anr. v. Iqbal Singh, (1976] 3 S.C.R. 360, referred to. (ii) 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 for service rendered. [185 F] (iii) Pension also has a broader significance in that it is -a social·welfare measure rendering socio.economic justice by providing economic security in old age to those who toiled ceaselessly in the bey-day of their life. [185 D·B, 186 B·CJ (iv) Pension as a retirement benefit is in consonance with and in furtherance of the goals of the <;onsti\utjon, Tbe goals for which pension is ' . / ,...,..._ ·-1 '"' D.S. NAKARA v. UNION (besai, J.) 171 paid themselves give a fillip and push to the policy of setting up a welfare state. The preamble to the Constitution envisages tbe establishment of a soci8.USt republic. The basic framework of socialism is to provide a decent standard of life to the working people and especially provide security from cradle to grave. Article 41 enjoins the State to secure public asSistance in oi<;t age, sickoess and disablement. Every state action whenever taken must be directed and must be so inierpreted as to take society one step towards the goal of establishing a socialist welfare society. While examining the constitutional validity of legislative/administrative action, the touchstone of Directive Principles of State Policy in the light of the Preamble provides a reliable yardstick to hold one way or the other. (190 E, 187 F, 189 A·B, 189 HJ Randhir Singh v. Union of India & Ors., [1982] 1 S.C.C. 618 and Minerva Mills Ltd. & Ors. v. Union of India & Ors., [1981] l S.C.R. 20!;, referred to. 4. Any member of the public having sufficient interest can maint'-in an action for judicial' redress tor public injury arising from breach of public duiy or from violation of some provision of the Constitution or the law and seCk enforcement of such public duty and observance of such constitutional or Ie!&l provision. The locus st~ndi of petitioner No. 3 whicb seeks to enforce righis that may be.available to a large number of old, infirm retirees is unquestionable as it is a non·political, non·profit, voJuntary organisation registered under the Societies Registration Act, 1860 and jts members consist of public spirited citizens who have taken up .the cause of ventilating legtimate public problems. [208 H, 209 A·C] S.P. Gupta v. Union of India, [1,981] Supp. S.C.C. 87, referred lb. ORIGINAL JURISDICTION : Writ Petition Nos. 5939-41 of 1980. Anil B. Divan, Mrs. Vineeta Sen Gupta and P.H. Parekh for the ·Petitioners L.N. Sinha, Attorney General, M.M. Abdul Khader, N. Nettar and Miss A. Subhashini for Union of India. G.L. Sanghi and Randhir Jain for the interveners. S.R. Srivastava for the Intervener. K.K. Gupta for the Intervener. The Judgment of the Court was delivered by DESAI, J. With a slight variation to suit the context Woolesey's prayer : "had I served my God as reverently as I did my_ king, I would not have fallen on these days of penury" is chanted by petitioners in this group of petitions in the Shellian tune : 'l fall on b I ' t SUPREME COURT REPORTS [I 983] 2 s.c.R. !be. thorns of life I bleed.' Old age, ebbing mental and physical ,prowess, atrophy of both muscle and brain powers permeating these petitions, the petitioners in the fall of life yearn for equality of treatment which is being meted out to those who are soon going to join and swell their own ranks, Do pensioners entitled to receive superannuation or retiring pension under Central Civil Services (Pension) Rules, 1972 ('1972 Rules' for short) form a class as a whole? Is the date of retirement a relevant consideration for eligibility when a revised formula t