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New Benefits Extended For Existing Employees, Retired Employees Can’t Seek Such Benefit Merely On The Ground of They Were Former Employees of The Corporation : SC

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The Supreme Court on 22nd February, 2021 held that retired employees cannot avail the benefits of a scheme merely on the fact that they were the former employees and thus, form a homogenous class. The already retired employees cannot be treated as a homogenous class.

The Himachal Road Transport Corporation is established under The Road Transport Corporations Act, 1950. The employees of the Corporation were governed by the Contributory Provident Fund Scheme (CPF). The appellant, Himachal Road Transport Corporation introduced a Pension Scheme in the year 1995 and adopted Central Civil Service (Pension) Rules, 1972. For the employees who retired from 05.06.1995, till the date of notification, i.e, 06.10.1995 and for the employees in service, an option was given either to opt for Pension Scheme, or to continue under the Contributory Provident Fund.

The respondent-Union, consisting of the employees who retired prior to 05.06.1995, approached the Administrative Tribunal claiming that this action of the respondents Corporation in denying pension to the applicants should be declared illegal, unjust, unreasonable, arbitrary and violative of Article 14, 16, 21 and that the cut-off date for grant of pension to those employees who were in service of the Corporation as on June 5, 1995 be quashed and set aside. The Himachal Pradesh Administrative Tribunal dismissed the Application filed by the respondent-Union, by holding that the appellants are entitled to fix the cut-off date for introducing the Pension Scheme for its employees and such fixation is not discriminatory. The respondent-Union, aggrieved by the judgment and Order of the Administrative Tribunal, approached the High Court of Himachal Pradesh. The High Court has allowed the Writ Petition, by quashing the cut-off date, on the ground that no reasons were forthcoming from the appellant- Corporation, for picking up the cut-off date, i.e, 05.06.1995, for implementation of Pension Scheme.

Further, High Court has declared that the Scheme shall apply to the members of the respondent-Union and other similarly situated persons, with a condition that they will have to deposit the amount received by them under the Contributory Provident Fund Scheme, within a reasonable time. The Road Transport Corporation was aggrieved by the judgment and filed a civil appeal.

The Bench comprising of Justice Ashok Bhushan, Justice R. Subhash Reddy and Justice M.R Shah held “it is clear that all the members of the respondent-Union, while in service, were governed by Contributory Provident Fund Scheme. All those employees who retired before 05.06.1995, were paid all retiral benefits, applicable to them. As the Pension Scheme was not in existence during the relevant time, it was not the case of violation of any service conditions either. The Pension Scheme is introduced by way of notification dated 06.10.1995, by giving effect from 05.06.1995, on which date the Cabinet has approved the Scheme.”

The court further held “The employees who were governed by the Contributory Provident Fund Scheme and retired prior to 05.06.1995 and the employees who were in service and continued after 05.06.1995, of the appellant- Corporation, cannot be treated as a homogeneous class. The retired employees, who were governed by the Contributory Provident Fund Scheme, on their retirement had already received the benefits of such Scheme, constitute different class than those employees who were in service as on 05.06.1995. There is a valid reason for giving effect to the Pension Scheme from 05.06.1995, though the notification was issued on 06.10.1995.”

The Supreme Court observed that the High Court did not look into the factual background and was clearly in error while allowing the writ petitions of the respondent. Therefore, the civil appeal was allowed and the judgment of the High Court was set aside.

Read Judgment:

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