- (1.)This appeal assails the order of the learned Single Judge dated 4.2.2011 directing the Bangalore Water Supply & Sewerage Board (hereafter referred to as 'Board') to accord the members of the petitioner Association revised pensionary benefits with effect from 1.7.2003 onwards upto 1.7.2008 and thereafter in accordance with revision of pay scales wherever and whenever applicable. Secondly, the learned Single Judge has accepted and acted upon the undertaking of the petitioner Association to the effect that they shall not insist on payment of arrears prior to 1.7.2008, and has directed that these would not be payable consequent upon the revision of pension retrospectively. Thirdly the respondent - Board has also been called upon to consider the request of the petitioner Association vis-a-vis sanction of medical benefits to the pensioners and their spouses on such terms as the Board deems fit. Fourthly, the respondent - Board has been directed to implement the foregoing three directions within a period of three months from the date of receipt of a copy of the impugned order. The facts so far as they are germane for a decision of this appeal, succinctly stated, are thus. The Board has itself fixed and implemented pay scales for its employees since 1.7.1986. Revisions of pay scales have occurred on 1.7.1990, 1.7.1994, 1.7.1998, 1.7.2003 and 1.7.2008. It appears that pension was revised with regard to all employees on two previous occasions, that is, 1.7.1990 and 1.7.1994. In 1998 the Board devised a dichotomy within the pensioners, viz., the dividing date having retirements prior and post 1.7.1990. The petitioner Association espoused the cause of those pensioners, falling in the first category. Since several representations ended in futility, the Association had no alternative but to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India. Pensioners falling in the second category have received the benefit of the revised pension with regard to the increases on 1.7.1990 as well as 1.7.1994 and onwards. It appears that the State Government has revised pension with effect from 1.4.1998 on the general revision of pay scales, but the Board has, not extended these benefits to the petitioners with effect from. 1.4.1998 onwards.
(2.)The learned Single Judge has granted the relief mentioned above almost entirely on the decision of the Constitution Bench in D.S. Nakara v. Union of India, 1983 AIR(SC) 130. The petitioners before the Constitution Bench were retired pensioners of the Central Government, civil servants and members of the Armed Forces. Therefore the present petitioners - pensioners must inevitably swim or sink depending on whether they fall within or without the ratio of Nakara. The Constitution Bench in Nakara had referred to its previous Constitution Bench decision in Deoki Nandan Prasad v. State of Bihar, 1971 AIR(SC) 1409 and reiterated that it is indeed an antiquated notion that pension is a bounty or gratuitous payment flowing from the sweet will or grace of the employer and that it is not claimable as a right. The Constitution Bench in Nakara opined that pension is not only compensation for loyal services rendered but that it partakes of a measure of socio-economic justice. The Constitution Bench also noticed that "the continuous upward movement of the cost of living index has a sequel on inflationary input and diminishing purchasing power of rupee necessitated upward revision of pension". We can do no better than to reproduce extracts from this celebrated judgment for the reason that it is our understanding that this Appeal must perforce predicted completely and comprehensively on the ratio decidendi of Nakara.
42. If it appears to be undisputable, as it does to us that the pensioners for the purpose of pension benefits form a class, would its upward revision permit a homogeneous class to be divided by arbitrarily fixing an eligibility criteria unrelated to purpose of revision, and would such classification be founded on some rational principle? The classification has to be based, as is well settled, on some rational principle and the rational principle must have nexus to the objects sought to be achieved. We have set out the objects underlying the payment of pension. If the State considered it necessary to liberalise the pension scheme, we find no rational principle behind it for granting these benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior to that date. If the liberalisation was considered necessary for augmenting social security in old age to government servants then those who retired earlier cannot be worse off than those who retire later. Therefore, this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory. To illustrate, take two persons, one retired just a day prior and another a day just succeeding the specified date. Both were in the same pay bracket, the average emolument was the same and both had put in equal number of years of service. How does a fortuitous circumstance of retiring a day earlier or a day later will permit totally unequal treatment in the matter of pension? One retiring a day earlier will have to be subject to ceiling of Rs 8100 p.a. and average emolument to be worked out on 36 months' salary while the other will have a ceiling of Rs 12,000 p.a. and average emolument will be computed on the basis of last 10 months' average. The artificial division stares into face and is unrelated to any principle and whatever principle, if there be any, has absolutely no nexus to the objects sought to be achieved by liberalising the pension scheme. In fact this arbitrary division has not only no nexus to the liberalised pension scheme but it is counter-productive and runs counter to the whole gamut of pension scheme. The equal treatment guaranteed in Article 14 is wholly violated inasmuch as the pension rules being statutory in character, since the specified date, the rules accord differential and discriminatory treatment to equals in the matter of commutation of pension. A 48 hours' difference in matter of retirement would have a traumatic effect. Division is thus both arbitrary and unprincipled. Therefore, the classification does not stand the test of Article 14.

43. Further the classification is wholly arbitrary because we do not find a single acceptable or persuasive reason for this division. This arbitrary action violated the guarantee of Article 14. The next question is what is the way out?

49. But we make it abundantly clear that arrears are not required to be made because to that extent the scheme is prospective. All pensioners whenever they retired would be covered by the liberalised pension scheme, because the scheme is a scheme for payment of pension to a pensioner governed by 1972 Rules. The date of retirement is irrelevant. But the revised scheme would be operative from the date mentioned in the scheme and would bring under its umbrella all existing pensioners and those who retired subsequent to that date. In case of pensioners who retired prior to the specified date, their pension would be computed afresh and would be payable in future commencing from the specified date. No arrears would be payable. And that would take care of the grievance of retrospectivity. In our opinion, it would make a marginal difference in the case of past pensioners because the emoluments are not revised. The last revision of emoluments was as per the recommendation of the Third Pay Commission (Raghubar Dayal Commission). If the emoluments remain the same, the computation of average emoluments under amended Rule 34 may raise the average emoluments, the period for averaging being reduced from last 36 months to last 10 months. The slab will provide slightly higher pension and if someone reaches the maximum the old lower ceiling will not deny him what is Otherwise justly due on computation. The words "who were in service on March 31, 1979 and retiring from service on or after that date" excluding the date for commencement of revision are words of limitation introducing the mischief and are vulnerable as denying equality and introducing an arbitrary fortuitous circumstance can be served without impairing the formula. Therefore, there is absolutely no difficulty in removing the arbitrary and discriminatory portion of the scheme and it can be easily severed.

65. That is the end of the journey. With the expanding horizons of socio-economic justice, the Socialist Republic and welfare State which we endeavour to set up and largely influenced by the fact that the old men who retired when emoluments were comparatively low and are exposed to vagaries of continuously rising prices, the falling value of the rupee consequent upon inflationary inputs, we are satisfied that by introducing an arbitrary eligibility criteria: "being in service and retiring subsequent to the specified date" for being eligible for the liberalised pension scheme and thereby dividing a homogeneous class, the classification being not based on any discernible rational principle and having been found wholly unrelated to the objects sought to be achieved by grant of liberalised pension and the eligibility criteria devised being thoroughly arbitrary, we are of the view that the eligibility for liberalised pension scheme of "being in service on the specified date and retiring subsequent to that date" in impugned memoranda, Exs. P-1 & P-2, violates Article 14 and is unconstitutional and is struck down. Both the memoranda shall be enforced and implemented as read down as under: In other words, in Ext. P-1, the words:

that in respect of the government servants who were in service on March 31, 1979 and retiring from service on or after that date

and in Ex. P-2, the words:

the new rates of pension are effective from April 1, 1979 and will be applicable to all service officers who became/become non-effective on or after that date

are unconstitutional and are struck down with this specification that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative to all pensioners governed by 1972 Rules irrespective of the date of retirement. Omitting the unconstitutional part it is declared that all pensioners governed by the 1972 Rules and Army Pension Regulations shall 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. Let a writ to that effect be issued. But in the circumstances of the case, there will be no order as to costs.

(3.)On behalf of the appellant - Board it has been conceded that the ratio in Nakara applies on all fours to the facts of the present case. However reliance has been placed on the subsequent decisions of two Judge Benches in State of W.B. v. Monotosh Roy, 1999 2 SCC 71; State of W.B. v. W.B. Government Pensioners Association, 2002 2 SCC 179; State of Punjab v. Amar Nath Goyal, 2005 6 SCC 754 and Sudhir Kumar Consul v. Allahabad Bank, 2011 3 SCC 486. There can be no cavil that all these judgments run counter to the tenor and essence of Nakara; nay they are all inconsistent and irreconcilable with the binding opinion of the Constitution Bench. What option lies before us is the conundrum that stares us in the face. It becomes imperative to delve into the principle of stare decisis, that is, the parameters within which the later Bench of a High Court or the Supreme Court can move around with regard to a decision already rendered by a Bench of greater strength.