D.S. NAKARA & OTHERS v. UNION OF INDIA

"The choice of a date as a basis for classification cannot always be dubbed as arbitrary even if no particular reason is forthcoming for tli e choice unless it is shown to . be capricious or whimsical in the circumstances. When it is seen that a line or a point there must be and there is no ·mathematical or logi,~al way of fixing it precisely, the decision of the legislature or its delegate must be accepted unless we can say that it is very wide of the reasonable mark." In reaching this coJJclusion the Court relied on Louisville Gas Co. v. .Alabama Power Co. (1 ) This decision is not an autho- rity for the proposition that whenever a date is chosen, or an eligibility criteria which divides a class, the purpose of choice unrelated to the objects sought to be achieved must be accepted as valid. Io fact it is made clear in the decision itself that even if no particular reason is forthcoming for the choice unless it is shown to be capricious or whimsical, the choice Qf the e legislature may be accepted. Therefore, the choice of the date

(!) 240 US 30 al 32 [1927]

b.S. NAKARA v. UNION (Desai, J.)

cannot be wholly divorced from the objects sought to be achieved by the impugned action. In other words, if the choice is shown to be thoroughly arbitrary and introduces discrimination violative of Art. 14, the ·date can be struck down. What facts influenced the Court's decision in that case for upholding ·the choice of the date are worth-recalling. The Court held that the object of granting the concessional rate of duty was to protect tile smaller units in the industry from the competition by the larger ones. and that object would have been frustrated, if, by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of the bounty. This was the weighty consi- deration which prompted the court to uphold the date. c the learned Attorney General next referred to D.C. Gouse and Co. etc. v. State of Kera/a & Anr, etc. (') This Court while repelling the contention that the choice of April 1, 1973 as the date • > of imposition of the building tax is discriminatory with reference to Art. 14 of the Constitution, approved the ratio in the case of D Mjs .. Parameswaran Match Works etc. supra. Even while reaching this conclusion the Court observed that it is not shown bow it could be said that the date (April 1, 1973) for the levy of the tax was wide of the reasonable mark. What appealed to the Court was that earlier an attempt was made to impose tbe building tax with effect fro~Marcb 2, 1961 under the Kerala Building Tax Act, 1961 E but the Act was finally struck down as unconstitutional by this Court 11s per its decision dated August 13, 1968. While delivering the budget speech, at the time of introduction of the 1970-71 budget, the intention to introduce a fresh Bill for the levy of tax was made clear. The Bill was published in June 73 in which it was made clear that the Act would be brought into force from F April 1, 1970. After recalling the various stag es through which the Bill passed before being en3cted as Act, this Court held that the choice of date April I, 1973 was not wide of the reasonable • mark. The decision proceeds on the facts of the case. But the principle that when a certain date or el igibillty criteria is selected with reference to legislative or executive measure which has the G pernicious tendency of dividing an otherwise homogeneous class and the choice of beneficiaries of the legislative/executive action becomes selective, the division or classification made by.choice of date or eligibility criteria must have some relation to the objects sought H 11) [1980) I S.C.R, 804.

204 SUPRBMB COURT RBpORTS (1983) 2 S.C.R.

A to be achieved. And apart from the first test that the division must be referable to some rational principle, if the choice of the date or classification is wholly unrelated to the objects sought to be achieved, it cannot be upheld on the specious plea that that was the choice of the Legi$lature.

B Now if the choice of date is arbitrary, eligibility criteria is unrelated to the object sought to be achieved and has the pernicious tendency of dividing an otherwise hom9ge· neous class, the question is whether the liberalised pension scheme must wholly fail or that the pernicious part can be severed, cautioning itself that this Court does· not legislate but c merely interprets keeping i11 view the underlying intention and the object, the impugned measure seeks to subserve? Bven though it is not possible to oversimplify the issue, let us read the impugned memoranda deleting the unconstitutional part. Omitting it, the memoranda will read like this : D "At present, pen11ioo is calculated at the rate of J/80th of average emoluments for each completed year of service and is subject to a maximum of 33/80 of average emoluments and is further restricted to a monetary limit of Rs. 1,000/- per month. The President is, now, pleased to decide that with effect from 3 lst March, 1979 the amount B of pension shall be determined in accordance wtth the following slabs."

If from the impugned memoranda the eveol of being in service and retiring subsequent to specified date is severed, all pensioners wol\ld be governed by the liberalised pension scheme. 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. It does therefore appear that the reading down of impugned G memoranda by severing the objectionable portion would not render the liberalised pension scheme vague, unenforceable or unworkable.

In reading down the memoranda, ,, this Court legislating ? H Of course 'not'. When we delete basis of classification as violative of Art. 14, we merely set at naught the unconstitutional portion retaining the constitutional portion.

fi.s. NAJtAil.A li. UNION (Desai, J.) 205 We may hoW deal with the last submission of the iearned A Attorney General on the point. Said the learned Attorney-General that principle of severability cannot be applied to augment the tlass and io adopt his words 'severance always cuts down the scope, never enlarges it'. We are not sure whether there is any principle which inhibits the Court from striking down an uncons- titutional part of a legislative action which may have the tendency B to enlarge the width and coverage of the measure. Whenever classification is held to be impermissible and the measure can be retained by removing the unconstitutional portion of classification, by striking down words of limitation, the resultant effect may be of enlarging the class. In such a situation, the Court can strike down the words of limitation in an enactment. That is what is c called reading down the measure. We know of no principle that 'severance' limits the scope of legislation and can never enlarge it. To refer to the Jai/a Singh's case (supra), when for the benefit •• of allotment of land the artificial division between pre-1955 and post-1955 tenant was struck down by this Court, the class of bene- D ficiaries was ealarged and the eake in the form of available land was a fixed quantum and its distribution amongst the larger class would protanto reduce the quantum to each beneficiary-included in the class. Similarly when this Court in Randhir Singh' s case (supra) held that the principle of 'equal pay for equal work' may be properly applied to cases of unequal pay based on no E classification or irrational classification it enlarged the class of beneficiaries. Therefore, the principle of ·severance' for taking out the unconstitutional provision from an otherwise constitutional measure bas been well recognised. It would be just and proper ; that the provision in the memoranda while retaining the date for its implementation, but providing 'that in respect of Government (I servants who were in service on the 31st March, 1979 but retiring from service in or after that date' can be legally and validly severed and must be str.uck down. The date; is retained w1tbo•t qualifica- tion as the effective date for implementation of scheme, it being made abundantly clear that in respect of all pensioners governed by 1972 Rules, the pension of each may be recomputed as on G April I, 1979 and future payments be made in accordance with fresh computation under the liberalised pension scheme as enacted in the impugned memoranda. No arrears for the period prior to 31st March, 1979 in accordance with revised computation need be paid. H In this context the last submission of the learned Attorney General was that as the pension is always correl11te\I to the date of

206 StlPRilltfil COURT REPORTS [19831 2 s.c.ll. A retirement, the Court cannot change the date of retirement, and impose fresh commutation beMfit. W,e are doing nothing of this kind. The apprehension is wholly unfounded. The date of retirement of each employee remains as it is. The average emolu- ments have to be worked out keeping in view the emoluments drawn by him before retirement but in accordance with the principles B of the liberalised pension scheme. The two features which make the ·liberalised pension scheme more attractive is the redefining of average emoluments in Rule 34, and introduction of slab system simultaneously raising the ceiling. Within these parameters, the pension will have to be recomputed with effect from the date from which the liberalised pension s'cheme·came into force i.e. March 31, c 1979. There is no question of fresh commutation of pension of the pensioners who.retired prior to 31st March, 1979 and have already • availed of the benefit of commutation. It is not open to them to get that benefit at this late date because commutation bas to be availed of within specified time: limit from the date of actual retire- D ment. May be some marginal retirees may earn the benefit. That is inevitable. To.say.that by our approach we are [restructuring the liberalised pension scheme, is i:o ignore the constitutional mandate. Similarly, the court is not conferring benefits by this approach, the court only removes the ill.egitimate classification and after its removal the law takes its own course. E But in this context the learned Attorney submitted the. following quotation which appears to have been extracted from a decision of American Court, citation of which was not available. The quotation may be extracted from the written submission. It , reads as under : ' F "It remains to enquire whether this plea that Congress would have enacted the legislation and the Act being limited to employees engaged _in commerce within the district of Columbia and the Territory. If we are satisfied that it would not or that the matter is G in such doubt that we' are unable to say what Congress would have done omitting the unconstitutional features then the statute must fail."

We entertain no such apprehension. The Executive with -H parliamentary mandate liberalised the pension scheme. It ·is implicit in liberalising the scheme that the deed to grant little hij!her rate of pension to the pensioners was considered eminently

D.S. NAICAllA v. UNION (Desai, J.) 201

just. One could have understood persons in the higher pay bracket being excluded from the benefits of the scheme because it would. have meant that those in higher pay bracket could fend for themselves. Such is not the exclusion. The exclusion is of a whole class of people who retire before a certain date. Parliament would not have hesitated to extend the benefit otherwise considered eminently just, and this becomes clearly discernible from page 35 8 of 9th Report of Committee on Petitions (Sixth Lok Sabha) April, 1976. While examining their representation for . better pensionary benefit, the Committee concluded as under :

"The Committee are of t_he view that Government owe a moral responsibility to provide adequate relief to c its retired employees including pre 1.1.1973 pensioners, whose actual value of pensions has been eroded by the phenomenal rise in the prices of essential commodities. In view of the present economic conditions in India and .. , constant rise in the cost of living due to inflation, it is all the more important even from purely humanitarian considerations if not from the stand point of fairness and justice, to protect the actual value of their meagre pensions to enable the pensioners to live in their declining years with dignity and in reasonable comfort."

Therefore, we are not inclined to share the apprehension voiced by the learned Attorney that if we strike down the unconstitutional part, the parliament would not have enacted the measure. Our approach may have a parliamentary flavour to sensitive noses.

The financial implication in such matters has some relevance. However in this connection, \Ve want to steer clear of a misconcep- F tion. There is no pension fund as it is found either in contributory ' pension schemes administered in foreign countries or as in Insurance-linked pensions. Non-contributory pensions under 1972 rules is a State obligation. It is an item of expenditure voted year to pear depending upon the number of pensioners and the estimated expenditure. Now when the liberalised pension scheme was introduced, we would justifiably assume that the Government servants would retire from the next day of the coming into opera· -- tion of the scheme and the burden will have to be computed as imposed by the liberalised scheme. Further Government bas been granting since nearly a decade temporary increases from time to time to pensioners. Therefore, the difference will be marginal ..

208 SUPRi!MB COUllT RBPoRTS r1983I 2 s.c.ll. A Further, let it not be forgotten that the old pensioners are on the way out and their ininibet is fast decreasing. While examining ihe financial implication; this Court is only concerned with the additional liability that may be imposed by bringing in pdt!Slonsrs who.retired prior to April 1, 1979 within the fold of liberalised pension scheme but effective subseque:nt to the specified date. That B it is a dwindling number is indisputable. And again the large bulk . comprises pensioners from lower echelons of service such as Peons, .c L.D.C., U.D.C., Assistant etc. In a chart submitted to us, the Union of India has worked out the pension to the pensioners who have retired prior to the sp.ecified date and the comparative advantage, if they are brought within the purview of the liberalised c pension scheme. The difference upto the level of Asssitant or even Section Officer is marginal keeping in view that the old pensioners are getting temporary increases. Amongst the higher officers, there .will be some difference because the ceiling is raised and that would introduce the difference. It is however necessary to refer to one figure relied upon by respondents. It was said that . •· D if pensioners who retired prior to 31st March, 1979 are brought within the purview of the liberalised pension scheme, Rs. 233 crores would be required for fresh commutation. The apparent fallacy in the submission is that if the benefit of commutation is already availed of, it cannot and need not be reopened. And E availability of other benefits is hardly a relevant factor because pension is admissible to all retirees. The figures submitted are thus neither frightening nor the liability is supposed to ·be staggering which would deflect us from going to the logical end of constitu- tional mandate. Even according to the most liberal estimate, the average yearly increase is worked out to be Rs. ) I crores but that F assumes that every pensioner has survived till date and will continue to survive. Therefore, we are sati:;fied that the increased liability consequent upon this judgment is not too high to be unbearable or ' such as would have detracted the Government from covering the old pensioners under the scheme.

G Locus standi of third petitioner was questioned. Petitioner No. 3 is a Society registered under the Societies Registration Act of 1860. It is a non-political non-1lrofit and voluntary organisa- tion. Its members consist of public spirited citizens who have H taken up the cause of ventilating legitimate public problems. This Society received a large number of representations from old pensioners, individually unable to undertake the journey through

D.S. NAKARA V. UNION (Desai, J.) 209

labyrinths of legal judicial process, costly and protracted, and. A therefore, approached petitioner No. 3 which espoused their cause Objects for which the third petitioner-Society was formed were not questhmed. The majority decision of this Court in S.P. Gupta v. Union of India(') rules that any member of the public having sufficient interest can maintain an action for judicial redress for public injury arising from breach of public duty or from violation of some B provision of the Constitution or the law and seek enforcement of such public duty and observance of such constitutional or legal provision. Third petitioner seeks to enforce rights that may be ...,·,-/-.,' available to a large number of old infirm retirees. Therefore, its locus standi is unquestionable. But it is a point of academic i mpor- tant because locus standi of petitioners Nos. I and 2 was never c questioned,

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 0 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 liberali.•ed 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 io 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, Exhibits P-1 and P-2, violates Art. 14 and is unconstitutional and is strucK down. Both the memoranda shall be enforced and implemented as read down as nnder : In other words, in Exhibit P~l. the words: G

"that in respect of the Government servants who were in service on the 31st March, 1979 11n<! retiring from service on or after that date"

(1) [1981) Supp .. S.C.C. 87 at 218.

210 SUPREME COURT RllPORTS (1983) 2 S.C.R

A and in Exhibit P-2, the words :

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

B 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 unco:1stitutional 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. D

H.L.C. Petition allowed. •·