Supreme Court: Deciding the issue whether employees who had opted for voluntary retirement under the General Insurance Employee Special Voluntary Retirement Scheme, 2004, and subsequently retired, would be entitled to get the benefit of additional pension under the notification dated 21.12.2005 retrospectively, the division bench of Anil R. Dave and S.K. Singh JJ. held employees who had taken the benefit under the scheme and had already retired would not be entitled to additional pension due to retrospective increase in pay in pursuance to the aforesaid notification. The Court further explained that retrospective rise in salary is given to those who are in service at the relevant time or who had retired in normal circumstances and the petitioners had not retired as per normal conditions of service, therefore received some special additional benefits.
In the instant case, respondents were in financial difficulties and framed the aforesaid scheme to reduce their expenditure and made employees eligible for pension if they retire from service after 20 years of service. In this case the counsel for the respondents contended that employees who opted for voluntary retirement, the relationship between them and employer had come to an end, therefore employees were not entitled to any additional amount of pension on the other hand the counsel for the petitioner relied on National Insurance Co. Ltd v. Kirpal Singh (2014) 5 SCC 189 and submitted that employees are entitled to the benefit of subsequent upward pay revision and if a retired employee is not given the benefit, the action of the employer would be violative of Article 14 of the COI.
The Court finally held that in this, intention behind the scheme was to reduce the future expenditure of the employers and if benefits under the aforesaid notification are provided to the persons who had already retired under scheme, the real purpose of the scheme would be frustrated. On the issue that notification is discriminatory in nature, the Court held that employees who retired under the scheme form a separate class of employees and cannot be compared with employees who retire in normal course, and hence, there is no violation of Article 14 of the COI. Manojbhai N. Shah v. Union of India, 2015 SCC OnLine SC 13, decided on 7.01.2015