Case Note & Summary
The Supreme Court considered an appeal by special leave against an order of the Central Administrative Tribunal, Ernakulam Bench, dated September 29, 1995, in O.A. No. 686 of 1995. The respondent, a railway employee, had retired on attaining superannuation on April 21, 1972, as Chief Inspector of Communications. At the time of switching from the Provident Fund Scheme to the Pension Scheme, options were given to employees. The respondent was granted six opportunities to opt for the Pension Scheme but did not avail of any of them. On December 19, 1993, the respondent made an application requesting permission to opt for the Pension Scheme, which was rejected by the Government by order dated January 19, 1994. Aggrieved, the respondent filed an Original Application before the Central Administrative Tribunal, Ernakulam Bench, which allowed the petition by relying upon a decision of the Central Administrative Tribunal, Bombay Bench, against which a Special Leave Petition (SLP No. 5973 of 1988) had been dismissed in limine by the Supreme Court. The Union of India challenged this order before the Supreme Court. The core legal issue was whether a retired employee who had not exercised the pension option within the stipulated time despite repeated opportunities could later claim the benefit of the Pension Scheme. The Supreme Court observed that the controversy was no longer res integra. A Constitution Bench of the Supreme Court in Krishena Kumar v. Union of India [(1990) 3 SCR 352] had held that retirees under the Provident Fund Scheme and those under the Pension Scheme do not have the same pay-scales and there is no discrimination in extending the benefit of the Pension Scheme to those who did not exercise the option within the given time. The Constitution Bench had distinguished D.S. Nakara v. Union of India [(1983) 1 SCC 305] and held that such retirees are not entitled to the benefits. The Supreme Court also referred to V.K. Ramamurthy v. Union of India (Writ Petition No. 174 of 1996, decided on August 13, 1996), which surveyed the entire case law and concluded that a petitioner who retired in 1972 and did not exercise his option despite six opportunities was not entitled to opt for the Pension Scheme at that length of time. The respondent's counsel contended that the Krishena Kumar decision had upheld the Bombay Bench's view, but the Supreme Court rejected this argument. It clarified that the Constitution Bench had only distinguished that judgment on facts and had not approved the Bombay Bench's view. The ratio of Krishena Kumar was binding on the Tribunal under Article 141 of the Constitution. The Supreme Court further held that the dismissal of a Special Leave Petition in limine does not constitute law laid down by the Supreme Court and therefore could not be relied upon by the Tribunal. As to the argument that the respondent had died and legal representatives would be entitled to benefits based on an order in P. Lakshmana Rao v. Union of India, the Supreme Court noted that the order in that case was passed on a concession made by counsel for the Union and thus could not create a binding entitlement. In the result, the Supreme Court allowed the appeal, set aside the order of the Central Administrative Tribunal, and held that the respondent was not entitled to opt for the Pension Scheme. No order as to costs was made.
Headnote
A) Service Law - Pension Scheme Option - Article 14 of Constitution of India - A retired employee who did not opt for Pension Scheme despite repeated opportunities is not entitled to later switch; no discrimination between Provident Fund and Pension Scheme retirees - Held that Pension Scheme options must be exercised within stipulated time and failure to do so precludes later claim; Constitution Bench decision in Krishena Kumar binding under Article 141 (Paras 1-2). B) Precedent - Dismissal of Special Leave Petition - Article 141 of Constitution of India - Dismissal of SLP in limine does not constitute law laid down by Supreme Court - Held that Tribunal erred in relying on dismissal of SLP against Bombay Bench order; such dismissal cannot be treated as binding precedent (Paras 1-2). C) Precedent - Concession-Based Order - Entitlement Based on Concession - An order passed on concession by counsel does not create a binding precedent or entitlement for others - Held that order in P. Lakshmana Rao passed on concession did not entitle respondent to same benefit (Para 2). D) Procedural Law - Appeal Allowed - Tribunal Order Set Aside - Supreme Court allowed appeal and set aside CAT order without costs (Para 2).
Issue of Consideration
Whether a retired railway employee who failed to exercise pension scheme option within time despite six opportunities can opt later; whether dismissal of SLP against Tribunal order is binding; whether concession order creates entitlement
Final Decision
Appeal allowed; order of the Central Administrative Tribunal set aside; no costs.
Law Points
- Pension scheme option must be exercised within stipulated time
- failure to opt precludes later claim
- no discrimination under Article 14 between Provident Fund and Pension Scheme retirees
- dismissal of special leave petition in limine does not constitute binding precedent under Article 141
- Constitution Bench ratio binds tribunals
- concession-based orders do not create entitlement
