Supreme Court grants revised pension benefits to retired college teachers from 1st April 2010: Dr. Y. Ibehaibi Devi vs. State of Manipur (2022)

Introduction

Date of the Judgment: March 31, 2022
Citation: 2022 INSC 276
Judges: Vineet Saran, J. and Aniruddha Bose, J.
Can an administrative order alter the vested rights of pensioners? The Supreme Court of India addressed this question in a recent case concerning retired college teachers in Manipur. The core issue was whether these teachers were entitled to revised pension benefits from 1st April 2010, the date applicable to other State Government employees, or from 1st November 2010, as the State Government contended. The Supreme Court, in this judgment, held that the retired college teachers were entitled to revised pension benefits from 1st April 2010. The judgment was delivered by a two-judge bench comprising Justice Vineet Saran and Justice Aniruddha Bose, with Justice Aniruddha Bose authoring the opinion.

Case Background

The case involves a group of retired Assistant Professors and a College Librarian from the State of Manipur, who had superannuated between 28th February 2006 and 31st July 2008. The dispute arose from the implementation of revised pay scales and pension benefits following the 6th Pay Commission recommendations. The Government of India had decided to revise the pay scales of teachers in central universities, which was communicated to the University Grants Commission on 31st December 2008. This revision was also to be implemented by State Governments. The State of Manipur framed the Manipur Services (Revised Pay) Rules, 2010, on 5th May 2010, under Article 309 of the Constitution of India. Concurrently, an Office Memorandum (O.M.) dated 5th May 2010, was issued, modifying the rules for pension and allied benefits for those covered under the civil services rules. This O.M. stipulated that the revised provisions would apply to government servants who retired on or after 1st January 2006, with actual benefits from 1st April 2010. Subsequently, on 3rd June 2011, an order was issued revising the pay scales of college teachers, effective from 1st June 2006. This was superseded by another order on 12th August 2011, which specified that the revised pay scales would be effective from 1st January 2006, with monetary benefits from 1st November 2010, and actual cash payment from 1st July 2011. A further Office Memorandum dated 24th December 2011, clarified that the pension benefits for college teachers who retired between 1st January 2006 and 30th June 2011, would be calculated based on notional pay from 1st January 2006, or the date of retirement, whichever is later, with actual benefits from 1st November 2010. The retired teachers contested this, claiming they were entitled to benefits from 1st April 2010, as per the O.M. of 5th May 2010.

Timeline:

Course of Proceedings

The retired teachers initially filed a writ petition before the High Court of Manipur, seeking revised pension benefits from 1st April 2010. The Single Judge of the High Court allowed the petition on 30th October 2015, holding that the Office Memorandum of 24th December 2011, could not take away the benefits granted under the Office Memorandum of 5th May 2010, which had statutory force. The Single Judge held that the O.M. dated 24th December 2011 was merely a clarification and could not override the earlier O.M. dated 5th May 2010. The State Government appealed this decision, and the Division Bench of the High Court reversed the Single Judge’s decision on 27th January 2017. The Division Bench held that the revised pay scales for college teachers were governed by the notification dated 12th August 2011, which stipulated monetary benefits from 1st November 2010. The Division Bench reasoned that granting benefits from 1st April 2010, to retired teachers would create an anomaly, as serving teachers would receive benefits from a later date. The retired teachers then appealed to the Supreme Court of India.

Legal Framework

The case primarily revolves around the interpretation and application of the following legal provisions and rules:

• Article 309 of the Constitution of India: This article empowers the legislature to regulate the recruitment and conditions of service of persons appointed to public services. The proviso to this article allows the Governor to make rules until the legislature enacts laws. The Manipur Services (Revised Pay) Rules, 2010, were framed under this proviso.
• Article 166 of the Constitution of India: This article deals with the conduct of business of the Government of a State, which includes issuance of executive orders.
• Manipur Services (Revised Pay) Rules, 2010: These rules were framed in exercise of power conferred under the proviso to Article 309 of the Constitution of India on 5th May 2010. These rules were to cover those appointed to Civil Services and posts in connection with the affairs of that State and which were under the rule making control of the Government of Manipur.
• Office Memorandum dated 5th May 2010: This memorandum introduced modifications in the rules regulating pension, retirement/death/service gratuity, family pension, and disability pension under the Manipur Civil Services (Pension) Rules, 1977, the Manipur Civil Services (Commutation of Pension) Rules, 2010, and the Manipur Services (Extraordinary Pension) Rules, 1995. Clause 3.1 of this O.M. stated: “3.1. Save as otherwise mentioned in these orders, the revised provisions as per these orders shall apply to Government servants who retire/die in harness on or after 01/01/2006, notionally with effect from 01/01/2006 or from the date of retirement whichever is later, as the case may be, with cash payment/actual benefit from 01/04/2010. Separate orders have been issued in respect of employees who retired/died before 01/01/2006.”
• Order dated 3rd June 2011: This order mandated revisions of the scales of pay of different categories of posts in Government Colleges under the Department of Higher Education and Technical Education in the State of Manipur. Clause 6 of this order stipulated: “6. Rules relating to pension, family pension, gratuity and encashment of leave, ex­gratia compensation, provident fund, etc. Shall be as applicable to other State Government employees.”
• Order dated 12th August 2011: This order superseded the order of 3rd June 2011 in relation to different categories of college teachers specifying the revised scale of pay. Clauses 3, 7 and 8 of this Order read: “3. These orders shall come into force nationally with effect from 01/01/2006 with monetary benefit from 01/11/2010 and actual case payment from 01/07/2011. The arrears for the period from 01/11/2010 to 30/06/2011 shall be deposited into their respective G.P.F Accounts of the employees. However, for those employees who subscribe contribution under the New Pension Scheme and retired/ expired. The arrears for the period from 01/11/2010. To 30/06/2011 shall be released in 2(two) equal instalments, first on 01/01/2012, and second on 01/07/2012. 7. Rules relating to pension, family pension, gratuity and encashment of Leave salary/Leave of any kind, Ex­gratia Compensation, Provident Fund and New Pension Scheme no­win force etc. shall be as applicable to other state Government employees. 8. For those College Teachers/Equivalent Grads who retired/superannuated between 01­01­2006 and 31­10­2010, Pension shall be calculated on the basis of notional pay and AGP in the revised pay.”
• Office Memorandum dated 24th December 2011: This memorandum clarified the applicability of revised pension benefits to college teachers who retired between 1st January 2006 and 30th June 2011. It stated that pension/family pension/retirement gratuity/death gratuity/commutation of pension/leave encashment would be calculated on the basis of notional pay w.e.f. 01.01.2006 or from the date of retirement or death, whichever is later, or on the basis of the actual emolument drawn in the pre-revised pay scales, whichever is more beneficial to the incumbent. The actual benefit of increased pension/family pension on account of revision shall be paid from 01.11.2010.

Arguments

Arguments of the Appellants:

• The appellants argued that their pension entitlements were governed by the rules made under the proviso to Article 309 of the Constitution of India, specifically the Office Memorandum of 5th May 2010. This O.M. stipulated that revised pension benefits would be applicable to those who retired on or after 1st January 2006, with actual benefits from 1st April 2010.
• They contended that the Office Memorandum of 24th December 2011, being an administrative order, could not alter the benefits they were entitled to under the statutory instrument of 5th May 2010.
• The appellants emphasized that Clause 7 of the Order dated 12th August 2011, stated that pension rules would be applicable as in the case of other State Government employees, thus entitling them to the benefits from 1st April 2010.
• The appellants argued that they had migrated to the pension regime created for State Government employees, and therefore, the benefits applicable to those employees should also apply to them.

Arguments of the Respondents (State of Manipur):

• The State argued that the revision of pay scales covered all superannuated persons from different services under the State Government, including those in the education department.
• They contended that even after migrating to the 2010 Rules, the appellants could not claim benefits different from or more than those enjoyed by the serving staff of their department.
• The State emphasized that the Order of 12th August 2011, which superseded the Order of 3rd June 2011, was not under challenge. This order stipulated that monetary benefits would be given from 1st November 2010.
• The State argued that the Office Memorandum of 24th December 2011, was only a clarificatory order and did not alter any existing rights.
• The State pointed out that the appellants, being employed in the Technical and Higher Education Department, enjoyed higher pay scales and pensions than other government employees and those in judicial services. Therefore, their benefits could not be equated with those of original employees appointed under the Manipur State Government Service Rules.
• The State argued that members from different services under the Government of Manipur were receiving revised pay from different dates.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the appellants, as retired staff from different colleges, are entitled to the benefits of revised pension from the date given in the Office Memorandum of 24th December 2011, or from 1st April 2010, the latter date being applicable to those retired from various state services?

Treatment of the Issue by the Court:

The following table demonstrates as to how the Court decided the issues

Authorities

The Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Manipur Services (Revised Pay) Rules, 2010 were considered as a valid statutory instrument.
• The Office Memorandum dated 5th May 2010 was considered as a key statutory instrument that granted the appellants the right to revised pension benefits from 1st April 2010.
• The Order dated 3rd June 2011 was acknowledged as an order revising pay scales for college teachers.
• The Order dated 12th August 2011 was considered as an order that did not exclude the appellants’ entitlement to revised pension from 1st April 2010.
• The Office Memorandum dated 24th December 2011 was considered as an administrative order that could not override the statutory benefits conferred by the O.M. of 5th May 2010.

The Supreme Court held that the Office Memorandum of 24th December 2011, could not take away the substantive right of the appellants to receive revised pension from 1st April 2010, as provided under the Office Memorandum of 5th May 2010. The Court emphasized that the appellants had migrated to the pension regime meant for State Government employees, and therefore, they were entitled to the same benefits. The Court stated, “In terms of Clause 3.1 of the O.M. of 5th May 2010, the appellants have acquired a vested right to get revised pension from a date which is applicable to the retired State Government employees.” The Court further observed, “The Office Memorandum of 24th December 2011 though projected as an instrument to clarify a subsisting anomaly to an Office Memorandum having statutory strength, in reality encroaches upon acquired or vested right of the retirees to get such benefit from 1st April 2010.” The Court also noted that Clause 7 of the Order of 12th August 2011, made the pension rules applicable to other State Government employees, further supporting the appellants’ claim. The Court concluded, “Such “clarificatory order” cannot be permitted to override an Order having statutory strength.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Statutory Rights: The Court emphasized that the Office Memorandum of 5th May 2010, had statutory force and conferred a vested right on the appellants to receive revised pension benefits from 1st April 2010.
• Migration to State Pension Regime: The Court noted that the appellants had migrated to the pension regime meant for State Government employees, as recognized by Clause 7 of the Order of 12th August 2011. This meant they were entitled to the same benefits as other State Government employees.
• Invalidity of Clarificatory Order: The Court held that the Office Memorandum of 24th December 2011, was merely a clarificatory order and could not override the substantive rights conferred by the earlier statutory order of 5th May 2010.
• Rejection of Anomaly Argument: The Court rejected the argument that granting benefits from 1st April 2010, to retired teachers would create an anomaly, as serving teachers would receive benefits from a later date. The Court reasoned that the State had consciously delinked retirees from the service conditions of serving staff.

Sentiment Analysis:

Fact:Law Ratio:

Logical Reasoning:

Key Takeaways

• An administrative order cannot override a statutory order that confers a vested right.
• When employees are migrated to a different pension regime, they are entitled to the same benefits as others in that regime.
• The date of implementation of revised pension benefits for retirees cannot be arbitrarily postponed by a clarificatory order.
• The court rejected the argument that granting benefits to retirees from an earlier date would create an anomaly with serving staff, as the State had consciously delinked the two.

Directions

The Supreme Court directed that the appellants shall be entitled to receive revised pension with effect from 1st April 2010, considering the provisions of Clause 7 of the Order of 12th August 2011. The Office Memorandum of 24th December 2011, would not have any binding effect so far as the entitlement of the appellants to receive revised pension from 1st April 2010, is concerned.

Development of Law

The ratio decidendi of this case is that a vested right conferred by a statutory order cannot be overridden by a subsequent administrative order. This case reinforces the principle that once employees are brought under a particular pension regime, they are entitled to the same benefits as others in that regime. The judgment clarifies that clarificatory orders cannot take away the substantive rights conferred by earlier statutory instruments. There is no change in the previous position of law, but the judgment clarifies the application of existing principles in the context of pension benefits for retired employees.

Conclusion

The Supreme Court’s judgment in Dr. Y. Ibehaibi Devi vs. State of Manipur, sets aside the Division Bench’s order of the High Court and affirms theSingle Judge’s order, granting revised pension benefits to retired college teachers from 1st April 2010. The Court’s decision underscores the importance of statutory rights and the limitations of administrative orders in altering those rights. This case serves as a significant precedent for protecting the pension rights of retired employees, emphasizing that once a vested right is conferred by a statutory instrument, it cannot be arbitrarily taken away by a subsequent administrative order. The Court’s ruling ensures that retired college teachers receive the same pension benefits as other State Government employees, thereby promoting equity and fairness in the application of pension rules.