High Court · 2025

Teachers w.e.f. 01.07.2001. The Government Order which has been challenged by the petitioners is of 03.09.2001 which only gives the benefit of the revised pay scales at par with the Central Government Teachers on notional basis w.e.f.

01.01.1996 to only those Teachers who were in service on 01.07.2001. No prayer has been made even for grant of revised pay scales w.e.f. 01.01.1996. Thus, once no challenge has been raised to the Government Order dated 20.07.2001 as modified on 08.08.2001 and the subsequent Government Order dated 03.09.2001 only being in consequence to the earlier government orders and providing certain 10 benefits which have also not been claimed by the petitioners as such no benefit can be extended to the petitioners of the revised pay scales at par with the Central Government Teachers w.e.f. 01.01.1996 even on notional basis.

15. At this stage, learned counsel for the petitioners argues that the proforma fixation for the petitioners can be considered inasmuch as even by the subsequent government orders it is only the proforma fixation which has been extended to those Teachers who were in service on 01.07.2001 and thus, the said cut off date has been fixed arbitrarily by the respondents.

16. Responding to the said argument regarding fixing of the cut off date for grant of even proforma benefit Sri Vivek Shukla, learned Additional Chief Standing Counsel has referred to the averments made in paragraph 8 of the counter affidavit to contend that not only in the case of the petitioners but also in the cases of other departments many times decisions are taken as to from which date the benefit of any revised/upgraded pay structure should be given notionally and from which date actually and therefore if the petitioners are allowed the benefits as per their demand then it will have adverse effect on the exchequer and consequently the cut off date has correctly been fixed.

17. However, even though no case has been set forth in the entire writ petition pertaining to the said argument as raised by the learned counsel for the petitioners yet as to whether a particular cut off date can be fixed by the Government on the ground of financial constraints while extending financial benefits has been considered threadbare by this Court in the case of Om Prakash Saxena and another vs. State of U.P. and others in Writ Petition No.1743 (SB) of 2011 decided on 13.05.2019 wherein after considering various judgments of Hon'ble Supreme Court including the judgment of D.S. Nakara and others vs. Union of India – (1983) 1 SCC 305 it has been held as under:- “35. The argument raised by learned State Counsel that financial constraints would be a valid ground for fixation of a cut off date for grant of benefits as has been done with the issue of the Government Order dated 28.02.2007 with prospective effect. Though this ground has not been specifically taken by the respondents in the counter affidavit, as correctly pointed out by the learned counsel for the petitioners, yet the said ground has been taken during the course of argument and consequently can very well be considered by a Court of law while deciding the case keeping in view the law laid down by Hon'ble Supreme Court in the case of N. Subbarayudu (supra) wherein Hon'ble Supreme Court has held as under:- 11 "5. In a catena of decisions of this Court it has been held that the cut off date is fixed by the executive authority keeping in view the economic conditions, financial constraints and many other administrative and other attending circumstances. This Court is also of the view that fixing cut off dates is within the domain of the executive authority and the Court should not normally interfere with the fixation of cut off date by the executive authority unless such order appears to be on the face of it blatantly discriminatory and arbitrary. (See State of Punjab v. Amar Nath Goyal)

6. No doubt in D.S. Nakara v. Union of India this Court had struck down the cut off date in connection with the demand of pension. However, in subsequent decisions this Court has considerably watered down the rigid view taken in Nakara's Case, as observed in para 29 of the decision of this Court in State of Punjab v. Amar Nath Goyal.

7. There may be various considerations in the mind of the executive authorities due to which a particular cut off date has been fixed. These considerations can be financial, administrative or other considerations. The Court must exercise judicial restraint and must ordinarily leave it to the executive authorities to fix the cut off date. The Government must be left with some leeway and free play at the joints in this connection.

8. In fact several decisions of this Court have gone to the extent of saying that the choice of a cut off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter affidavit filed by the Government, (unless it is shown to be totally capricious or whimsical) vide State of Bihar v. Ramjee Prasad , Union of Indian v. Sudhir Kumar Jaiswal (Vide SCC Para 5), Ramrao v. All India Backward Class Bank Employees Welfare Assn. (Vide SCC Para 31), University Grants Commission v. Sadhana Chaudhary etc. It follows, therefore, that even if no reason has been given in the counter affidavit of the Government or the executive authority as to why a particular cut off date has been chosen, the Court must still not declare that date to be arbitrary and violative of Article 14 unless the said cut off date leads to some blatantly capricious or outrageous result."

36. The ground raised on behalf of the respondents that extending of the benefit of the Government Order dated 28.02.2007 to the petitioners who received end of session benefit in terms of the earlier Government Order would put a large financial burden on the State 12 inasmuch as all such teachers who were also given end of session benefit in terms of the earlier Government Orders would also stake their claim for extension of the benefit of the Government Order dated 28.02.2007 and thus consciously the Government Order dated 28.02.2007 has been given prospective effect is a valid ground. In this regard, the position of law is no longer res-integra keeping in view the various judgments of Hon'ble Supreme Court which are being discussed below which have clearly held that a cut off date can be introduced on the ground of financial implication.

37. Hon'ble the Supreme Court in the case of Amar Nath Goyal (supra) has upheld the cut off date which was introduced on the ground of financial implication. For the sake of convenience, relevant observations of Hon'ble Supreme Court are reproduced as under:- "26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/ State Governments to limit the benefits only to employees, who retire or die on or after 1.4.1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the center or at the State level.

27. Even by O.M. dated 19.10.1993, all that happened was that a portion of the dearness allowance linked to average Consumer Price Index of 729.91 obtaining as on 1.3.1988 (i.e. 20% of the basic pay) was treated as dearness pay. This would count only for reckoning the emoluments for the purpose of calculating retirement-cum-death gratuity under the applicable rules and for no other purpose. This change was brought into effect from 16.9.1993.

28. Even at that time, interestingly, the benefits were not made admissible from 1.3.1988, i.e. the date of the Average Consumer Price Index of 729.91, but from a much further date i.e. 16.9.1993. The Central Government adopted the same policy while issuing the O.M. dated 14.7.1995. Although, dearness allowance linked to the All India Average Consumer Price Index 1201.66 (as on 1.7.1993), was treated as reckonable part of dearness allowance for the purpose of calculating the death-cum-retirement gratuity, the benefit was actually made available to the employees who retired or died on or after 1.4.1995. Similarly, the increase in the ceiling of gratuity was a mere consequential step, which was also made applicable from 1.4.1995. As we have already noticed, 1.4.1995 was the date suggested by the Fifth Central Pay Commission ("Pay Commission") in its Interim Report. The Central Government took a conscious stand that the consequential financial burden would be unbearable. It 13 therefore, chose to taper down the financial burden by making the benefits available only from 1.4.1995. It is trite that, the final recommendations of the Pay Commission were not ipso facto binding on the Government as the Government had to accept and implement the recommendations of the Pay Commission consistent with its financial position. This is precisely what the Government did. Such an action on the part of the Government can neither be characterized as irrational, nor as arbitrary so as to infringe Article 14 of the Constitution.

29. D.S. Nakara (supra), which is the mainstay of the case of the employees, arose under special circumstances, quite different from the present case. It was a case of revision of pensionary benefits and classifications of pensioners into two groups by drawing a cut-off line and granting the revised pensionary benefits to employees retiring on or after the cut- off date. The criterion made applicable was "being in service and retiring subsequent to the specified date". This Court held that for being eligible for liberalised pension scheme, application of such a criterion is violative of Article 14 of the Constitution, as it was both arbitrary and discriminatory in nature. The reason given by the Court was that the employees who retired prior to a specified date, and those who retired thereafter formed one class of pensioners. The attempt to classify them into separate classes/ groups for the purpose of pensionary benefits was not founded on any intelligible differentia, which had a rational nexus with the object sought to be achieved. However, it must be noted that even in cases of pension, subsequent judgments of this Court have considerably watered down the rigid view taken in D.S. Nakara as we shall see later in T.N. Electricity Board v. R. Veerasamy ("Veerasamy"). In any event this is not a case of a continuing benefit like pension; it is a one-time benefit like gratuity.

30. In Union of India v. P.N. Menon, while implementing the recommendations of the Third Pay Commission with regard to dearness pay linked to average index level 272, which was to be counted as emoluments for pension and gratuity under Central Civil Services (Pension) Rules, 1972, the Central Government had fixed a certain cut-off date and directed that only officers retiring on or after the specified date were entitled to the benefits of the dearness pay being counted for the purpose of retirement benefits. This was challenged as arbitrary and violative of Article 14 of the Constitution. This Court turned down the challenge and observed: "Not only in matters of revising the pensionary benefits, but even in respect of revision of scales of pay, a cut-off date on 14 some rational or reasonable basis, has to be fixed for extending the benefits. This can be illustrated. The Government decides to revise the pay scale of its employees and fixes the 1st day of January of the next year for implementing the same or the 1st day of January of the last year. In either case, a big section of its employees are bound to miss the said revision of the scale of pay, having superannuated before that date. An employee, who has retired on 31st December of the year in question, will miss that pay scale only by a day, which may affect his pensionary benefits throughout his life. No scheme can be held to be foolproof, so as to cover and keep in view all persons who were at one time in active service. As such the concern of the court should only be, while examining any such grievance, to see, as to whether a particular date for extending a particular benefit or scheme, has been fixed, on objective and rational considerations."

31. In Action Committee South Eastern Railway Pensioners v. Union of India, it was held that, on merger of a part of dearness allowance as dearness pay on average price index level at 272 with reference to different pay ranges, fixing a cut- off date in such a manner was not arbitrary and the principle enunciated in D.S. Nakara was not applicable. In this connection, the ratios in Krishena Kumar v. Union of India, Indian Ex-Services League v. Union of India, State Government Pensioners' Assn. v. State of A.P., and All India Reserve Bank Retired Officers' Assn. v. Union of India, are apt. In all these cases, the prescription of a cut-off date for implementation of such benefits was held not to be arbitrary, irrational or violative of Article 14 of the Constitution.

32. The importance of considering financial implications, while providing benefits for employees, has been noted by this Court in numerous judgments including in the following two cases. In State of Rajasthan v. Amritlal Gandhi, this Court went so as far as to note that: "...Financial impact of making the Regulations retrospective can be the sole consideration while fixing a cut-off date. In our opinion, it cannot be said that this cut-off date was fixed arbitrarily or without any reason. The High Court was clearly in error in allowing the writ petitions and substituting the date of 1.1.1986 for 1.1.1990.

33. More recently, in Veerasamy, this Court observed that financial constraints could be a valid ground for introducing a cut-off date while implementing a pension scheme on a revised basis. In that case, the pension scheme applied differently to persons who had retired from service before 1.7.1986, and those who were in employment on the said date. It was held 15 that they could not be treated alike as they did not belong to one class and they formed separate classes.

34. In State of Punjab v. Boota Singh ("Boota Singh") after considering several judgments of this Court in D.S. Nakara to K.L. Rathee v. Union of India, it was held that D.S. Nakara should not be interpreted to mean that the emoluments of persons who retired after a notified date holding the same status, must be treated to be the same.

35. In State of Punjab v. J.L. Gupta where one of us was on the Bench (Sabharwal, J.), the views expressed in Boota Singh were reiterated, and it was held that for the grant of additional benefit, which had financial implications, the prescription of a specific future date for conferment of additional benefit, could not be considered arbitrary.

36. In Ramrao v. All India Backward Class Bank Employees Welfare Assn., a Division Bench of this Court said, even for the purpose of effecting promotion, the fixing of a cut-off date was neither arbitrary, unreasonable nor did it offend Article 14 of the Constitution. Moreover, the Court held that possible hardship to be endured by a person as a result did not make cut-off dates violative of Article 14.

37. In the instant case before us, the cut-off date has been fixed as 1.4.1995 on a very valid ground, namely, that of financial constraints. Consequently, we reject the contention that the fixing of the cut-off date was arbitrary, irrational or had no rational basis or that it offends Article 14."

38. Hon'ble Supreme Court in the case of Rajesh Chander Sood (supra) has held as under:- "75. Having given our thoughtful consideration to the issue canvassed, and having gone through the judgments cited, we are of the considered view, that this Court has repeatedly upheld a cut-off date, for extending better and higher pensionary benefits, based on the financial health of the employer. A cut-off date can therefore legitimately be prescribed for extending pensionary benefits, if the funds available cannot assuage the liability, to all the existing pensioners. We are therefore satisfied to conclude, that it is well within the authority of the State Government, in exercise of its administrative powers (which it exercised, by issuing the impugned repeal notification dated 2.12.2004) to fix a cut-off date, for continuing the right to receive pension in some, and depriving some others of the same. This right was unquestionably exercised by the State Government, as determined by this Court, in the R.R. Verma case, wherein this Court held, that the Government was vested with the inherent power to review. And that the Government was free to alter its 16 earlier administrative decisions and policy. Surely, this is what the State Government has done in the present controversy. But this Court in the above mentioned judgment, placed a rider on the exercise of such power by the Government. In that, the exercise of such power, should be in consonance with all legal and statutory obligations.

76. It is equally true, that the power of administrative review can only be exercised, for a good and valid justification. Such justification besides being founded on reasonable consideration, should also not be violative of any legal right - statutory or constitutional, vested in the affected employees. Insofar as the permissibility of the administrative action taken, in issuing the impugned repeal notification dated 2.12.2004 is concerned, whether the said power was exercised by the State Government for good and valid reasons, and/or whether the same violated any statutory or constitutional right vested in the respondent-employees, shall be examined by us in the succeeding paragraphs."

39. Hon'ble Supreme Court in the case of T.M. Sampath (supra) has held as under:- "40. We have carefully perused the judgment of the High Court of Jharkhand in P.N. Mishra v. Union of India against which SLP(C) No.19102 of 2012 has been filed and we concur with the view of the High Court. The cut-off date is a domain of the employer and so the introduction of new scheme of pension will be done considering all the relevant factors including financial viability of the same. No interference is warranted unless there is gross injustice is perpetrated. The Appellants have failed to prove any arbitrariness and discrimination with respect to the New Pension Scheme.

41. In the light of the discussion in the foregoing paragraphs, the writ petitions and the appeal are also dismissed. However, there shall be no order as to costs."

40. Likewise, Hon'ble Supreme Court in the case of Ratan Behari Dey (supra) has held as under:- "7. In our opinion, the principle of Nakara has no application to the facts of this case. The precise principle enunciate in Nakara has been duly explained in Krishena Kumar by a coordinate Bench. For reasons to be assigned hereinafter, it cannot be said that prescribing April 1, 1977 as the date from which the new Regulations were to come into force is either arbitrary or discriminatory. Now, it is open to the State or to the Corporation, as the case may be, to change the conditions of service unilaterally. Terminal benefits as well as pensionary benefits constitute conditions of service. The employer has the undoubted power to revise the salaries and/or the pay-scales 17 as also terminal benefits/pensioners benefits. The power to specify a date from which the revision of pay scales or terminal benefits/pensionary benefits, as the case may be, shall take effect is a concomitant of the said power. So long as such date is specified in a reasonable manner, i.e. without bringing about a discrimination between similarly situated persons, no interference is called for by the Court in that behalf. It appears that in the Calcutta Corporation, a pension scheme was in force prior to 1914. Later, that scheme appears to have been given up and the Provident Fund Scheme introduced Under the Provident Fund Scheme, a certain amount was deducted from the salary of the employees every month and credited to the Fund. An equal amount was contributed by the employer which too was credited to the Fund. The total amount to the credit of the employee in the Fund was paid to him on the date of his retirement. The employees, however, were demanding the introduction of a pension scheme. The demand fell on receptive years in the year 1977 may be because in that-year the Left Front Government came to power in that State, as suggested by the writ petitioners. The State government appointed a Commission to examine the said demand and to recommend the necessary measures in that behalf. The three members constituting the Commission differed with each other in certain particulars. The Government examined their recommendations and accepted them with certain modifications in the year 1981. After processing the matter through relevant departments, the Regulations were issued and published in the year 1982. In the above circumstances, the State Government thought that it would be appropriate to give effect to the said Regulations on and from April 1, 1977 i.e., the first day of the financial year in which the Pay Commission was appointed by the Government - a fact which could not have been unknown to the Corporation employees. We cannot say that the Government acted unreasonably in specifying the said date. It may also be said that, that was the year in which the Left Front came into power in that State, but that does not detract from the validity of the aforesaid reasons assigned by the State in its counter-affidavit filed before the Division Bench of the High Court. We are not in agreement with the opinion expressed by the High Court that the reasons assigned by the State Government are neither relevant not acceptable.

8. In this context, it may be remembered that the power of the State to specify a date with effect from which, the Regulations framed, or amended, as the case may be, shall come into force is unquestioned. A date can be specified both prospectively as well as retrospectively. The only question is whether the 18 prescription of the date in this case is neither arbitrary now unreasonable, the complaint of discrimination must fail.

9. Now coming to the argument of Sri P.P. Rao that the Regulations bring about an unreasonable classification between similarly placed employees in concerned, we must say that we are not impressed by it. It is not submitted that the Corporation had no power to give retrospective effect to the Regulations. It was within the power of the Corporation to enforce the Regulations either prospectively or with retrospective effect from such date as they might specify. Of course, as repeatedly held by this Court, in such cases the State cannot, as the expression goes, pick a date out of its hat. It has to prescribe the date in a reasonable manner, having regard to all the relevant facts and circumstances. Once this is done, question of discrimination does not arise. Reference in this behalf may also be had to the decision of this Court in Sushma Sharma v. State of Rajasthan , a decision of the Division Bench comprising E.S. Venkataramiah and Sabyasachi Mukherji, JJ. "

18. Thus, considering the law laid down by this Court in the case of Om Prakash Saxena (supra) the said argument of learned counsel for the petitioners is also rejected.

19. Keeping in view the aforesaid discussion, no case for interference is made out. The writ petition is accordingly dismissed. Order Date :- 7.8.2025 A. Katiyar (Abdul Moin, J.)

Teachers w.e.f. 01.07.2001. The Government Order which has been challenged by the petitioners is of 03.09.2001 which only gives the benefit of the revised pay scales at par with the Central Government Teachers on notional basis w.e.f.

01.01.1996 to only those Teachers who were in service on 01.07.2001. No prayer has been made even for grant of revised pay scales w.e.f. 01.01.1996. Thus, once no challenge has been raised to the Government Order dated 20.07.2001 as modified on 08.08.2001 and the subsequent Government Order dated 03.09.2001 only being in consequence to the earlier government orders and providing certain 10 benefits which have also not been claimed by the petitioners as such no benefit can be extended to the petitioners of the revised pay scales at par with the Central Government Teachers w.e.f. 01.01.1996 even on notional basis.

15. At this stage, learned counsel for the petitioners argues that the proforma fixation for the petitioners can be considered inasmuch as even by the subsequent government orders it is only the proforma fixation which has been extended to those Teachers who were in service on 01.07.2001 and thus, the said cut off date has been fixed arbitrarily by the respondents.

16. Responding to the said argument regarding fixing of the cut off date for grant of even proforma benefit Sri Vivek Shukla, learned Additional Chief Standing Counsel has referred to the averments made in paragraph 8 of the counter affidavit to contend that not only in the case of the petitioners but also in the cases of other departments many times decisions are taken as to from which date the benefit of any revised/upgraded pay structure should be given notionally and from which date actually and therefore if the petitioners are allowed the benefits as per their demand then it will have adverse effect on the exchequer and consequently the cut off date has correctly been fixed.

17. However, even though no case has been set forth in the entire writ petition pertaining to the said argument as raised by the learned counsel for the petitioners yet as to whether a particular cut off date can be fixed by the Government on the ground of financial constraints while extending financial benefits has been considered threadbare by this Court in the case of Om Prakash Saxena and another vs. State of U.P. and others in Writ Petition No.1743 (SB) of 2011 decided on 13.05.2019 wherein after considering various judgments of Hon'ble Supreme Court including the judgment of D.S. Nakara and others vs. Union of India – (1983) 1 SCC 305 it has been held as under:- “35. The argument raised by learned State Counsel that financial constraints would be a valid ground for fixation of a cut off date for grant of benefits as has been done with the issue of the Government Order dated 28.02.2007 with prospective effect. Though this ground has not been specifically taken by the respondents in the counter affidavit, as correctly pointed out by the learned counsel for the petitioners, yet the said ground has been taken during the course of argument and consequently can very well be considered by a Court of law while deciding the case keeping in view the law laid down by Hon'ble Supreme Court in the case of N. Subbarayudu (supra) wherein Hon'ble Supreme Court has held as under:- 11 "5. In a catena of decisions of this Court it has been held that the cut off date is fixed by the executive authority keeping in view the economic conditions, financial constraints and many other administrative and other attending circumstances. This Court is also of the view that fixing cut off dates is within the domain of the executive authority and the Court should not normally interfere with the fixation of cut off date by the executive authority unless such order appears to be on the face of it blatantly discriminatory and arbitrary. (See State of Punjab v. Amar Nath Goyal)

6. No doubt in D.S. Nakara v. Union of India this Court had struck down the cut off date in connection with the demand of pension. However, in subsequent decisions this Court has considerably watered down the rigid view taken in Nakara's Case, as observed in para 29 of the decision of this Court in State of Punjab v. Amar Nath Goyal.

7. There may be various considerations in the mind of the executive authorities due to which a particular cut off date has been fixed. These considerations can be financial, administrative or other considerations. The Court must exercise judicial restraint and must ordinarily leave it to the executive authorities to fix the cut off date. The Government must be left with some leeway and free play at the joints in this connection.

8. In fact several decisions of this Court have gone to the extent of saying that the choice of a cut off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter affidavit filed by the Government, (unless it is shown to be totally capricious or whimsical) vide State of Bihar v. Ramjee Prasad , Union of Indian v. Sudhir Kumar Jaiswal (Vide SCC Para 5), Ramrao v. All India Backward Class Bank Employees Welfare Assn. (Vide SCC Para 31), University Grants Commission v. Sadhana Chaudhary etc. It follows, therefore, that even if no reason has been given in the counter affidavit of the Government or the executive authority as to why a particular cut off date has been chosen, the Court must still not declare that date to be arbitrary and violative of Article 14 unless the said cut off date leads to some blatantly capricious or outrageous result."

36. The ground raised on behalf of the respondents that extending of the benefit of the Government Order dated 28.02.2007 to the petitioners who received end of session benefit in terms of the earlier Government Order would put a large financial burden on the State 12 inasmuch as all such teachers who were also given end of session benefit in terms of the earlier Government Orders would also stake their claim for extension of the benefit of the Government Order dated 28.02.2007 and thus consciously the Government Order dated 28.02.2007 has been given prospective effect is a valid ground. In this regard, the position of law is no longer res-integra keeping in view the various judgments of Hon'ble Supreme Court which are being discussed below which have clearly held that a cut off date can be introduced on the ground of financial implication.

37. Hon'ble the Supreme Court in the case of Amar Nath Goyal (supra) has upheld the cut off date which was introduced on the ground of financial implication. For the sake of convenience, relevant observations of Hon'ble Supreme Court are reproduced as under:- "26. It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/ State Governments to limit the benefits only to employees, who retire or die on or after 1.4.1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the center or at the State level.

27. Even by O.M. dated 19.10.1993, all that happened was that a portion of the dearness allowance linked to average Consumer Price Index of 729.91 obtaining as on 1.3.1988 (i.e. 20% of the basic pay) was treated as dearness pay. This would count only for reckoning the emoluments for the purpose of calculating retirement-cum-death gratuity under the applicable rules and for no other purpose. This change was brought into effect from 16.9.1993.

28. Even at that time, interestingly, the benefits were not made admissible from 1.3.1988, i.e. the date of the Average Consumer Price Index of 729.91, but from a much further date i.e. 16.9.1993. The Central Government adopted the same policy while issuing the O.M. dated 14.7.1995. Although, dearness allowance linked to the All India Average Consumer Price Index 1201.66 (as on 1.7.1993), was treated as reckonable part of dearness allowance for the purpose of calculating the death-cum-retirement gratuity, the benefit was actually made available to the employees who retired or died on or after 1.4.1995. Similarly, the increase in the ceiling of gratuity was a mere consequential step, which was also made applicable from 1.4.1995. As we have already noticed, 1.4.1995 was the date suggested by the Fifth Central Pay Commission ("Pay Commission") in its Interim Report. The Central Government took a conscious stand that the consequential financial burden would be unbearable. It 13 therefore, chose to taper down the financial burden by making the benefits available only from 1.4.1995. It is trite that, the final recommendations of the Pay Commission were not ipso facto binding on the Government as the Government had to accept and implement the recommendations of the Pay Commission consistent with its financial position. This is precisely what the Government did. Such an action on the part of the Government can neither be characterized as irrational, nor as arbitrary so as to infringe Article 14 of the Constitution.

29. D.S. Nakara (supra), which is the mainstay of the case of the employees, arose under special circumstances, quite different from the present case. It was a case of revision of pensionary benefits and classifications of pensioners into two groups by drawing a cut-off line and granting the revised pensionary benefits to employees retiring on or after the cut- off date. The criterion made applicable was "being in service and retiring subsequent to the specified date". This Court held that for being eligible for liberalised pension scheme, application of such a criterion is violative of Article 14 of the Constitution, as it was both arbitrary and discriminatory in nature. The reason given by the Court was that the employees who retired prior to a specified date, and those who retired thereafter formed one class of pensioners. The attempt to classify them into separate classes/ groups for the purpose of pensionary benefits was not founded on any intelligible differentia, which had a rational nexus with the object sought to be achieved. However, it must be noted that even in cases of pension, subsequent judgments of this Court have considerably watered down the rigid view taken in D.S. Nakara as we shall see later in T.N. Electricity Board v. R. Veerasamy ("Veerasamy"). In any event this is not a case of a continuing benefit like pension; it is a one-time benefit like gratuity.

30. In Union of India v. P.N. Menon, while implementing the recommendations of the Third Pay Commission with regard to dearness pay linked to average index level 272, which was to be counted as emoluments for pension and gratuity under Central Civil Services (Pension) Rules, 1972, the Central Government had fixed a certain cut-off date and directed that only officers retiring on or after the specified date were entitled to the benefits of the dearness pay being counted for the purpose of retirement benefits. This was challenged as arbitrary and violative of Article 14 of the Constitution. This Court turned down the challenge and observed: "Not only in matters of revising the pensionary benefits, but even in respect of revision of scales of pay, a cut-off date on 14 some rational or reasonable basis, has to be fixed for extending the benefits. This can be illustrated. The Government decides to revise the pay scale of its employees and fixes the 1st day of January of the next year for implementing the same or the 1st day of January of the last year. In either case, a big section of its employees are bound to miss the said revision of the scale of pay, having superannuated before that date. An employee, who has retired on 31st December of the year in question, will miss that pay scale only by a day, which may affect his pensionary benefits throughout his life. No scheme can be held to be foolproof, so as to cover and keep in view all persons who were at one time in active service. As such the concern of the court should only be, while examining any such grievance, to see, as to whether a particular date for extending a particular benefit or scheme, has been fixed, on objective and rational considerations."

31. In Action Committee South Eastern Railway Pensioners v. Union of India, it was held that, on merger of a part of dearness allowance as dearness pay on average price index level at 272 with reference to different pay ranges, fixing a cut- off date in such a manner was not arbitrary and the principle enunciated in D.S. Nakara was not applicable. In this connection, the ratios in Krishena Kumar v. Union of India, Indian Ex-Services League v. Union of India, State Government Pensioners' Assn. v. State of A.P., and All India Reserve Bank Retired Officers' Assn. v. Union of India, are apt. In all these cases, the prescription of a cut-off date for implementation of such benefits was held not to be arbitrary, irrational or violative of Article 14 of the Constitution.

32. The importance of considering financial implications, while providing benefits for employees, has been noted by this Court in numerous judgments including in the following two cases. In State of Rajasthan v. Amritlal Gandhi, this Court went so as far as to note that: "...Financial impact of making the Regulations retrospective can be the sole consideration while fixing a cut-off date. In our opinion, it cannot be said that this cut-off date was fixed arbitrarily or without any reason. The High Court was clearly in error in allowing the writ petitions and substituting the date of 1.1.1986 for 1.1.1990.

33. More recently, in Veerasamy, this Court observed that financial constraints could be a valid ground for introducing a cut-off date while implementing a pension scheme on a revised basis. In that case, the pension scheme applied differently to persons who had retired from service before 1.7.1986, and those who were in employment on the said date. It was held 15 that they could not be treated alike as they did not belong to one class and they formed separate classes.

34. In State of Punjab v. Boota Singh ("Boota Singh") after considering several judgments of this Court in D.S. Nakara to K.L. Rathee v. Union of India, it was held that D.S. Nakara should not be interpreted to mean that the emoluments of persons who retired after a notified date holding the same status, must be treated to be the same.

35. In State of Punjab v. J.L. Gupta where one of us was on the Bench (Sabharwal, J.), the views expressed in Boota Singh were reiterated, and it was held that for the grant of additional benefit, which had financial implications, the prescription of a specific future date for conferment of additional benefit, could not be considered arbitrary.

36. In Ramrao v. All India Backward Class Bank Employees Welfare Assn., a Division Bench of this Court said, even for the purpose of effecting promotion, the fixing of a cut-off date was neither arbitrary, unreasonable nor did it offend Article 14 of the Constitution. Moreover, the Court held that possible hardship to be endured by a person as a result did not make cut-off dates violative of Article 14.

37. In the instant case before us, the cut-off date has been fixed as 1.4.1995 on a very valid ground, namely, that of financial constraints. Consequently, we reject the contention that the fixing of the cut-off date was arbitrary, irrational or had no rational basis or that it offends Article 14."

38. Hon'ble Supreme Court in the case of Rajesh Chander Sood (supra) has held as under:- "75. Having given our thoughtful consideration to the issue canvassed, and having gone through the judgments cited, we are of the considered view, that this Court has repeatedly upheld a cut-off date, for extending better and higher pensionary benefits, based on the financial health of the employer. A cut-off date can therefore legitimately be prescribed for extending pensionary benefits, if the funds available cannot assuage the liability, to all the existing pensioners. We are therefore satisfied to conclude, that it is well within the authority of the State Government, in exercise of its administrative powers (which it exercised, by issuing the impugned repeal notification dated 2.12.2004) to fix a cut-off date, for continuing the right to receive pension in some, and depriving some others of the same. This right was unquestionably exercised by the State Government, as determined by this Court, in the R.R. Verma case, wherein this Court held, that the Government was vested with the inherent power to review. And that the Government was free to alter its 16 earlier administrative decisions and policy. Surely, this is what the State Government has done in the present controversy. But this Court in the above mentioned judgment, placed a rider on the exercise of such power by the Government. In that, the exercise of such power, should be in consonance with all legal and statutory obligations.

76. It is equally true, that the power of administrative review can only be exercised, for a good and valid justification. Such justification besides being founded on reasonable consideration, should also not be violative of any legal right - statutory or constitutional, vested in the affected employees. Insofar as the permissibility of the administrative action taken, in issuing the impugned repeal notification dated 2.12.2004 is concerned, whether the said power was exercised by the State Government for good and valid reasons, and/or whether the same violated any statutory or constitutional right vested in the respondent-employees, shall be examined by us in the succeeding paragraphs."

39. Hon'ble Supreme Court in the case of T.M. Sampath (supra) has held as under:- "40. We have carefully perused the judgment of the High Court of Jharkhand in P.N. Mishra v. Union of India against which SLP(C) No.19102 of 2012 has been filed and we concur with the view of the High Court. The cut-off date is a domain of the employer and so the introduction of new scheme of pension will be done considering all the relevant factors including financial viability of the same. No interference is warranted unless there is gross injustice is perpetrated. The Appellants have failed to prove any arbitrariness and discrimination with respect to the New Pension Scheme.

41. In the light of the discussion in the foregoing paragraphs, the writ petitions and the appeal are also dismissed. However, there shall be no order as to costs."

40. Likewise, Hon'ble Supreme Court in the case of Ratan Behari Dey (supra) has held as under:- "7. In our opinion, the principle of Nakara has no application to the facts of this case. The precise principle enunciate in Nakara has been duly explained in Krishena Kumar by a coordinate Bench. For reasons to be assigned hereinafter, it cannot be said that prescribing April 1, 1977 as the date from which the new Regulations were to come into force is either arbitrary or discriminatory. Now, it is open to the State or to the Corporation, as the case may be, to change the conditions of service unilaterally. Terminal benefits as well as pensionary benefits constitute conditions of service. The employer has the undoubted power to revise the salaries and/or the pay-scales 17 as also terminal benefits/pensioners benefits. The power to specify a date from which the revision of pay scales or terminal benefits/pensionary benefits, as the case may be, shall take effect is a concomitant of the said power. So long as such date is specified in a reasonable manner, i.e. without bringing about a discrimination between similarly situated persons, no interference is called for by the Court in that behalf. It appears that in the Calcutta Corporation, a pension scheme was in force prior to 1914. Later, that scheme appears to have been given up and the Provident Fund Scheme introduced Under the Provident Fund Scheme, a certain amount was deducted from the salary of the employees every month and credited to the Fund. An equal amount was contributed by the employer which too was credited to the Fund. The total amount to the credit of the employee in the Fund was paid to him on the date of his retirement. The employees, however, were demanding the introduction of a pension scheme. The demand fell on receptive years in the year 1977 may be because in that-year the Left Front Government came to power in that State, as suggested by the writ petitioners. The State government appointed a Commission to examine the said demand and to recommend the necessary measures in that behalf. The three members constituting the Commission differed with each other in certain particulars. The Government examined their recommendations and accepted them with certain modifications in the year 1981. After processing the matter through relevant departments, the Regulations were issued and published in the year 1982. In the above circumstances, the State Government thought that it would be appropriate to give effect to the said Regulations on and from April 1, 1977 i.e., the first day of the financial year in which the Pay Commission was appointed by the Government - a fact which could not have been unknown to the Corporation employees. We cannot say that the Government acted unreasonably in specifying the said date. It may also be said that, that was the year in which the Left Front came into power in that State, but that does not detract from the validity of the aforesaid reasons assigned by the State in its counter-affidavit filed before the Division Bench of the High Court. We are not in agreement with the opinion expressed by the High Court that the reasons assigned by the State Government are neither relevant not acceptable.

8. In this context, it may be remembered that the power of the State to specify a date with effect from which, the Regulations framed, or amended, as the case may be, shall come into force is unquestioned. A date can be specified both prospectively as well as retrospectively. The only question is whether the 18 prescription of the date in this case is neither arbitrary now unreasonable, the complaint of discrimination must fail.

9. Now coming to the argument of Sri P.P. Rao that the Regulations bring about an unreasonable classification between similarly placed employees in concerned, we must say that we are not impressed by it. It is not submitted that the Corporation had no power to give retrospective effect to the Regulations. It was within the power of the Corporation to enforce the Regulations either prospectively or with retrospective effect from such date as they might specify. Of course, as repeatedly held by this Court, in such cases the State cannot, as the expression goes, pick a date out of its hat. It has to prescribe the date in a reasonable manner, having regard to all the relevant facts and circumstances. Once this is done, question of discrimination does not arise. Reference in this behalf may also be had to the decision of this Court in Sushma Sharma v. State of Rajasthan , a decision of the Division Bench comprising E.S. Venkataramiah and Sabyasachi Mukherji, JJ. "

18. Thus, considering the law laid down by this Court in the case of Om Prakash Saxena (supra) the said argument of learned counsel for the petitioners is also rejected.

19. Keeping in view the aforesaid discussion, no case for interference is made out. The writ petition is accordingly dismissed. Order Date :- 7.8.2025 A. Katiyar (Abdul Moin, J.)