Classification Of Pensioners By Providing Cut-Off Date For The Purpose Of Grant Of Revised Pension Unconstitutional: SC [Read Judgment]

The Supreme Court has held that the classification of pensioners into two categories by providing cut-off date for the purpose of grant of revised pension is unconstitutional.

In All Manipur Pensioners Association vs. State of Manipur, the bench comprising of Justice MR Shah and Justice AS Bopanna upheld and restored the judgment of the single bench of the Manipur High Court that had held that classification between those pensioners who retired prior to 1996 and those who retired after 1996 is arbitrary and violative of Article 14 of the Constitution of India. It also held that all the pensioners, irrespective of their date of retirement, viz. pre-1996 retirees shall be entitled to revision in pension at par with those pensioners who retired post-1996.

The bench observed that there is no valid justification to create two classes, viz., one who retired pre-1996 and another who retired post-1996, for the purpose of grant of revised pension. It said:

" In our view, such a classification has no nexus with the object and purpose of grant of benefit of revised pension. All the pensioners form a one class who are entitled to pension as per the pension rules. Article 14 of the Constitution of India ensures to all equality before law and equal protection of laws. At this juncture it is also necessary to examine the concept of valid classification. A valid classification is truly a valid discrimination. It is true that Article 16 of the Constitution of India permits a valid classification. However, a very classification must be based on a just objective. The result to be achieved by the just objective presupposes the choice of some for differential consideration/treatment over others

The bench also explained the twin tests to be satisfied for classification to be valid. It said:

"Firstly, the distinguishing rationale has to be based on a just objective and secondly, the choice of differentiating one set of persons from another, must have a reasonable nexus to the objective sought to be achieved. The test for a valid classification may be summarised as a distinction based on a classification founded on an intelligible differentia, which has a rational relationship with the object sought to be achieved."

….All the pensioners form a single class and therefore such a classification for the purpose of grant of revised pension is unreasonable, arbitrary, discriminatory and violative of Article 14 of the Constitution of India. The State cannot arbitrarily pick and choose from amongst similarly situated persons, a cut-off date for extension of benefits especially pensionary benefits. There has to be a classification founded on some rational principle when similarly situated class is differentiated for grant of any benefit."

The court also observed that increase in the cost of living would affect all the pensioners irrespective of whether they have retired pre-1996 or post-1996. Allowing the appeal, the bench stated:

Whenever a new benefit is granted and/or new scheme is introduced, it might be possible for the State to provide a cut-off date taking into consideration its financial resources. But the same shall not be applicable with respect to one and single class of persons, the benefit to be given to the one class of persons, who are already otherwise getting the benefits and the question is with respect to revision.

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