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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
PUBLIC INTEREST LITIGATION NO.188 OF 2015

Vihar Durve … Petitioner
Versus
The State of Maharashtra and Ors. … Respondents

Mr. Jalan Sandeep for the Petitioner.
Mr. Rohit Deo, Advocate General a/w Mr. A.B. Vagyani, Government Pleader and
Mr. Manish M. Pabale, AGP for the Respondent No.1.
Mr. Sanjay Udeshi i/by M/s. Sanjay Udeshi & Co. for the Respondent No.2.
Mr. Atul G. Damle, Senior Advocate i/by Mr. Jayesh Madhav Joshi for the Respondent No.3.

CORAM : A.S. OKA & A.K. MENON, JJ.

DATE ON WHICH SUBMISSIONS WERE HEARD : 5th MAY 2017
DATE ON WHICH JUDGMENT IS PRONOUNCED : 11th AUGUST 2017

JUDGMENT (PER A.S. OKA, J.):­

1 This Public Interest Litigation is preferred raising several issues regarding the Judiciary in the State of Maharashtra in general. A prayer is for setting up various additional Courts as set out in prayer clauses (a) to (j). In the first paragraph of order dated 12th February, 2016, a bench of this Court of which one of us (A.S.Oka, J.) is a party, passed the following order :­

“Amongst various issues which are raised in this petition, at present we are dealing with two issues. The first issue is regarding the discontinuation of the Pension Scheme to the judicial officers which was applicable in terms of the recommendations of the Shetty Commission. Now a Contributory Pension Scheme is made applicable with effect from the year 2010 even to the judicial officers who will have to contribute 10% of their salary to the said pension scheme. The recommendations of the Shetty Commission were accepted by the Apex Court. Even the recommendations of the committee headed by Justice Padmanabhan were accepted by the Apex Court. Based on the said recommendations, a Government Resolution dated 5th January 2011 was issued by the State Government. Apart from the binding recommendations of the Shetty Commission and the Padmanabhan Commission, the question is whether the judicial officers can be treated on par with the officers of the State as far as pension is concerned. Under the present Recruitment Rules, even a fresh law graduate who is not having any experience of practice can join the Judicial Service at the age of 25 years as a Civil Judge, Junior Division. If such a fresh law graduate after rendering service for 35 years retires, he will not be entitled to the benefit of the Pension Scheme which was available as per the recommendations of the Shetty Commission and Pension Scheme can be made applicable to the judicial officers in the face of the recommendations which were accepted by the Apex Court. The State Government will have to treat the Judicial Officers differently from any other officers on its establishment. This aspect was brought to the notice of the learned Government Pleader on the last occasion. Today, he states that the issue is being considered by the State Government.”

2 On the basis of a prayer made by the learned counsel appearing for the petitioner, a permission was granted on 9th August, 2016 to amend the petition for the purposes of incorporating a challenge to the Government Resolution dated 31st October, 2005 which introduces “Defined Contribution Pension Scheme (for short “the New Scheme”) for the Government Servants who are recruited on or after 1st November, 2005 in the Government service. The challenge to this Government Resolution (for short “the impugned Government Resolution”) is confined to its applicability to the Judicial Officers in the State.

3 As far as the other issues involved in this Writ Petition are concerned, several steps have been taken during the pendency of the Petition for appointing additional Judges and for creating additional Courts. By an order dated 27th October, 2016, a Bench of this Court directed that the issue regarding pensionery benefits admissible to the Judicial Officers deserves to be disposed of finally. Accordingly, the State Government was permitted to file a reply. There are two affidavits on record of Shri Neeraj Pradeep Dhote, Legal Advisor­cum­Joint Secretary of the Law and Judiciary Department which are dated 16th June, 2016 and 19th July, 2016. There is also a reply filed on behalf of the High Court Registry which does not deal with the issue of pension to the Judicial Officers.

4 Before we come to the submissions made on the issue of challenge to the impugned Government Resolution, we must make a reference to the provisions relating to payment of pension to the Judicial Officers in the State before the impugned communication came into force. For that purpose, it will be necessary to make a reference to the decision of the Apex Court in the case of All India Judges Association and Ors. Vs. Union of India and Ors.1 . The Apex Court, in its earlier order in the case of All India Judges Association and Ors. Vs. Union of India2 , issued certain directions. The first direction was that steps should be taken to bring about uniformity in the designations of the Judicial Officers by March 31, 1993. Another direction was that as and when Pay Commissions are set up in the Union Territories, the question of appropriate pay scales of the Judicial Officers be specifically referred and considered. 1 (2002)4 SCC 247 2 1992(1) SCC 119

5 Union of India filed a Petition for review of the directions issued by the Apex Court in the case of All India Judges’ Association and Ors. Vs. Union of India and Ors3 . The Judgment in Review contains a direction that an independent Commission should be set up for determining the service conditions of Judicial Officers. The Government of India, by a resolution dated 21st March, 1993 constituted the first National Judicial Pay Commission under the Chairmanship of the Hon’ble Shri Justice K.J. Shetty. The report was submitted by Justice Shetty on 11th November, 1999. Various recommendations were made by Shetty Commission regarding various cadres in the Judiciary. By the aforesaid decision in the case of All India Judges Association and Ors. Vs. Union of India and Ors., the Apex Court accepted the recommendations of the Shetty Commission except certain modifications made as set out in the judgment. Clause 22.18 of the report contains the recommendations of the Shetty Commission on the aspect of pension. Relevant part of clause 22.18 reads thus :­ “22.18

1. The Revised Pension of the Retired Judicial Officers should be 50% of the minimum pay of the post held at the time of retirement, as revised from time to time.

2. There should not be any ceiling limit on the maximum pension payable.

3. The Pensioners should be given the benefit of full 3 1993(4) SCC 288 neutralisation of the cost of living in the same scale as is being extended to the serving Judicial Officers.

4. A cash payment of Rs.1,250/­ per month as ‘Domestic Help Allowance’ to every retired Judicial Officer, which would be paid upon producing a certificate to that effect.

5. All retired Judicial Officers should be given a fixed monthly medical allowance of Rs.100/­ to meet day­to­day medical expenses.

6. All the medical facilities that we have recommended to serving Judicial Officers with regard to treatment and reimbursement of expenditure etc. be made applicable to retirees.”

6 The Apex Court accepted all the recommendations of the Shetty Commission subject to the amendments made by the same judgment of the Apex Court. Directions were issued under the said judgment to the State Government to report compliance. By further order dated 8th April 20043A passed in the same case, the Apex Court directed all the State Governments to adopt Karnataka model in regard to payment of pension to retired Judicial Officers.

7 There were directions issued by the Apex Court from time to time to various State Governments to make compliance with the recommendations of the Shetty Commission as approved by the Apex Court. By another decision in the case of All India Judges and Ors. Vs. Union of India and Ors.4 , the Apex Court directed that as the salary of 3A (2004)12 SCC 444 4 (2010) 4 SCC 730 the Judges of the High Court has been increased, it was necessary to appoint a Commission to go into the question of salary payable to the Judicial Officers. Accordingly, the following directions were issued by the Apex Court :­

“7. As salary of the High Court Judges had been increased, this Court appointed Justice E. Padmanabhan, a retired Judge of the High Court of Judicature at Madras, to go into the question as to what extent salary, allowances and perquisites of the judicial officers of the States can be increased. Justice Padmanabhan Committee has submitted Report suggesting various recommendations. Copy of the Report was furnished to all the State Governments and High Courts and opportunities were given to them to furnish their objections. Some of the States have filed their objections.

8. The main objection seems to be that some of the States have financial difficulties and it would not be possible for them to increase the salary of the Judges of the subordinate judiciary. It was argued by some of the States that they have implemented the Sixth Central Pay Commission and the scale of pay of the judicial officers had also been correspondingly increased. In these States, rules applicable shall have to be amended to give full effect to the Sixth Central Pay Commission, if any of the judicial officers are getting higher salary or perquisites, such State would be at liberty to give higher salary, allowances and perquisites than what has already been recommended by Justice Padmanabhan Committee.”

8 Accordingly, Justice Padmanabhan Committee submitted recommendations to the Apex Court. In the order dated 4th May, 2010 passed by the Apex Court in All India Judges Association and Ors. Vs. Union of India and Ors.5 passed in the same case, the Apex Court recorded that certain States including the State of Maharashtra and Goa agreed to implement the recommendations made by Justice Padmanabhan Committee Report. The Apex Court, while issuing directions to implement Justice Padmanabhan Committee Report with effect from 1st January, 2006 observed that if any 6th Pay Commission recommendations are more beneficial to the Judicial Officers, they will continue to be benefited to that effect.

9 The State Government issued Government Resolutions for giving effect to the directions of the Apex Court. The Government Resolution dated 28th September, 2005 was issued for giving effect to the aforesaid order dated 8th April 2004 of the Apex Court for granting benefits of pension to the Judicial Officers retired after 1st July, 1996 and the Judicial Officers retired prior to 1st July, 1996.

5 (2010) 14 SCC 720

10 The State Government issued a notification dated 5th January, 2011 (as amended on 30th March 2011) by which recommendations of Padmanabhan Committee were accepted. The said Government Resolution gives effect to the recommendations of Padmanabhan Committee regarding the pension payable to the Judicial Officers in the State. The said GR specifically deals with pension payable to Judicial Officers who retired on 1st January, 2006 or thereafter. By a Government Resolution dated 25th July 2011, the benefits of the Government Resolutions were extended to the judicial officers who retired prior to 1st January 2006. Clause 2 of the aforesaid Resolution dated 5th January 2011 provides that the pension shall be computed in accordance with the Pension Rules of the State Government. The said Rules are the Maharashtra Civil Services (Pension) Rules,1982 (for short “the Pension Rules”).

11 The impugned Government Resolution dated 31st October, 2005 reads thus :­

“INTRODUCTION

Government of India vide Notification, Ministry of Finance, Department of Economic Affairs, dated 22nd December 2003 introduced a new Contribution Pension Scheme i.e. “Defined Contribution Pension System” for the employees who are recruited on or after 1st January 2004 in Central Government Service. Government of India has also declared that the option of joining the aforesaid new Contribution Pension Scheme would also be available to the State Government. Besides, under this scheme Government of India have Constituted an independent “Pension Fund Regulatory and Development Authority (PFRDA)” for the management and regulation of the pension fund. The question of introduction of New Contribution Pension Scheme, on the lines of Government of India, for new recruits in State Government was under consideration of this Government.

RESOLUTIONS

2. (a) Government has now decided that a new “Defined Contribution Pension Scheme”, on the lines of Government of India, replacing the existing pension scheme, as detailed below, would be made applicable to the Government servants who are recruited on or after 1st November 2005 in State Government Service,

(b) Government is also pleased to decide that for the purpose of implementation of the above new Defined Contribution Pension Scheme, this State Government would join the aforesaid, new defined contribution pension system introduced by Government of India.

(c) The Government is also pleased to decide that the provisions of,

(i) the existing pension scheme (i.e. Maharashtra Civil Services (Pension) Rules, 1982 and Maharashtra Civil Services (Commutation of Pension) Rules, 1984 and

(ii) the existing General Provident Fund Scheme (GPF) would not be applicable to the Government servants who are recruited on or after 1st November 2005 in State Government service.

SALIENT FEATURES OF THE NEW PENSION SCHEME

3. The salient features of the new pension scheme are as under:­

(a) This scheme shall be called as “Defined Contribution Pension Scheme”.

(b) This scheme will come into force with effect from 1st November 2005.

(c) The New Contribution Pension Scheme will be mandatory for all the Government servants who are recruited on or after 1st November 2005 in State Government service.

(d) The new contribution pension Scheme will be based on defined contribution and will have two tiers, i.e. ­ Tier­I & Tier­II. Tier­I will be mandatory for all the Government servants who will be recruited on or after 1st November 2005 in State Government service whereas Tier­II will be optional for them and at their discretion.

(e) Under Tier­I, every Government servant will have to make a monthly contribution at 10% of his “Basic Pay plus Dearness Pay (if any) plus Dearness Allowance”, which will be deducted from his salary bill every month. The State Government will make an equal matching contribution. The contributions and the investment returns will be kept in a non- withdrawable “Pension Tier­I Account.”

(f) Under Tier­II, each Government servant, in addition to the above mentioned Pension Tier­I Account, will also have a “Voluntary Tier ­ II withdrawable Account” at his option. Contribution made by the Government servant will be kept in such separate account and that will be withdrawable at the option of the Government servant. However, Government will not make any contribution in this account.
(g) A Government servant can normally exit at or after attaining the age of superannuation (i.e. 58 years/60 years, as the case may be) from the Tier­I of the new pension scheme. However, at exit, it would be mandatory for him to invest 40% of the total accumulated pension wealth to purchase an annuity (from Life Insurance Company regulated by Pension Fund Regulatory and Development Authority). In the case of Government servant, the annuity should provide for pension for the life time of the Government servant and his dependent parents and his spouse at the time of retirement.

The Government servant would receive a lump- sum of the remaining pension wealth, which he would be free to utilise in any manner. A Government servant would have the flexibility to leave the pension scheme prior to age of superannuation (i.e. 58 years/60 years, as the case may be). However, in this case, the mandatory annuitisation would be 80% of the pension wealth.

APPLICABILITY OF THE SCHEME

4.(a) As mentioned above, new defined contribution pension scheme will be applicable to Government servants who are recruited on or after 1st November 2005 in State Government service.

(b) Government is also pleased to direct that the above decision should, mutatis­mutandis, apply to the employees, who are recruited on or after 1st November 2005, in the services of the Recognized and Aided Educational Institutions, Non­Agricultural Universities and affiliated Non­Government Colleges and Agricultural Universities etc., to whom the existing pension scheme and General Provident Fund Scheme is applicable.

(c) In exercise of the powers conferred by the proviso to Section 248 of the Maharashtra Zilla Parishads and Panchayat Samiti’s Act 1961 (Mah.V of 1962) and of all the other powers enabling it in that behalf, Government is further pleased to decide that the above decision shall apply to the employees, who are recruited on or after 1st November 2005 in the services of Zilla Parishads.

IMPORTANT INSTRUCTIONS TO ADMINISTRATIVE DEPARTMENTS/ APPOINTING AUTHORITIES
5. Consequent to the above decision,
a) Government is pleased to direct that General Administration Department and all concerned administrative departments in Mantralaya, should take immediate steps to notify appropriate amendments to all concerned “Recruitment Rules”.
b) Government is also pleased to direct that General Administration Department, all other concerned administrative departments in Mantralaya, all Selection Boards in the State, Maharashtra Public Service Commission and all appointing authorities should immediately bring in writing to the notice of all the candidates who are to be recruited on various Government establishments, on or after 1st November 2005 that,

“On their appointment to the Government Service on or after 1st November 2005, they would be covered under New “Defined Contribution Pension Scheme” and that the existing pension scheme (i.e. Maharashtra Civil Services (Pension)Rules, 1982 and Maharashtra Civil Services (Commutation of Pension) Rules, 1984) and General Provident Fund Scheme will not be applicable to them.”

6. Detailed instructions regarding the procedure to be adopted by Heads of Department/Offices/Drawing and Disbursing Officers in respect of drawal of bills, recovery of contribution from Government employees, payment of Government contribution, etc., as well as the instructions regarding the accounting procedure, arrangement regarding fund management and record keeping etc., will be issued shortly.

7. Formal amendment to the Maharashtra Civil Services (Pension) Rules, 1982 and Maharashtra Civil Services (Commutation) Rules, 1984 and General Provident Fund Rules, in terms of the decision contained in this order are being made separately.

8. This order will be available on the following Web Sites of Government :­
(i) finance.mah.nic.in
(ii) www.maharashtra.gov.in
By order and in the name of the Governor of Maharashtra,

NASIMA M. SHAIKH,
Deputy Secretary to Government”
(emphasis added)

12 The stand of the State Government as reflected from the affidavit of Shri Neeraj P. Dhote, Joint Secretary of Law and Judiciary Department is that the New Scheme is being made mandatory to all Government Servants who retire on or after 1st November, 2005. Reliance is placed on amendment to the Maharashtra Civil Services (Pension) Rules, 1992 by incorporating Sub­Rule (2) in Rule 2 which provides that these Rules shall not apply to the Government Servants who are recruited on or after 1st November, 2005. The stand taken in paragraph 9 is that in the appointment letters issued to the Judicial Officers after 1st November, 2005 it has been specifically mentioned that they will be governed by the New Scheme. By way of illustration, reliance is placed on a letter of appointment issued to a Judicial Officer on 7th June, 2016.

13 The learned Counsel for the Petitioner submitted that the Pensionary benefits payable to the Judicial Officers of the State are governed by the aforesaid directions issued from time to time and the Government Resolutions issued from time to time on the basis of the orders of the Apex Court. Therefore, the action of applying the New Scheme under the impugned Government Resolution without seeking modification of the orders of the Apex Court is illegal. The learned Advocate General defended the impugned Government Resolution. The learned senior counsel representing the Maharashtra State Judges Association supported the stand taken by the Petitioner. The learned counsel for the High Court administration has assisted the Court by pointing out various directions of the Apex Court.

14 We have considered the submissions. There is a fallacy in the stand taken by the State Government. In fact, the State Government accepted the recommendations of Padmanabhan Committee appointed under the orders of the Apex Court. The Apex Court by an order dated 26th July, 2010 directed that the benefits recommended by the Padmanabhan Committee should be applied with effect from 1st January, 2006. As per the orders of the Apex Court, service conditions of the Judicial Officers in the State including pensionary benefits shall be in terms of recommendations of Padmanabhan Committee which are accepted by the Supreme Court. As far as pensionary benefits to the Judicial Officers are concerned what operates is the Government Resolution dated 5th January, 2011 (as modified on 30th March 2011. Prior to acceptance of the report of the Padmanabhan Committee, the service conditions were governed by the Report of Justice Shetty Commission as modified by the Apex Court. The recommendations as amended by the order of the Apex Court were in operation. Therefore, when the impugned Government Resolution was issued, the order of the Apex Court directing that service conditions of the Judicial Officers shall be governed by the Shetty Commission Report was in force. Therefore, the action of applying the impugned Government Resolution to the Judicial Officers is completely contrary to the directions of the Apex Court. In fact, the impugned Government Resolution is not at all applicable to the Judicial Officers who are appointed from 1st November, 2005. The terms and conditions of service of Judicial Officers including the grant of pensionary benefits are governed by the directions of the Apex Court. Therefore, even if the letters of appointment issued to the Judicial Officers appointed after 1st January, 2005 contain a clause that the pension will be governed by the impugned Government Resolution, the same will not be binding on the Judicial Officers.

15 As per the New Scheme introduced by the impugned Government Resolution, a government servant is required to make contribution equivalent to 10% of his basic salary plus dearness pay and the said amount will be deducted from his salary. The salary payable to the Judicial Officers is determined firstly by recommendations of Shetty Commission and secondly by recommendations of Padmanabhan Committee as accepted by the Apex Court. The State Government cannot affect the quantum of salary of Judicial Officers in this fashion by providing for a deduction of 10% of basic salary plus dearness pay from the salary of a Judicial Officer. The orders of the Apex Court do not permit such a deduction to be made. Making of such deduction from the salary of a Judicial Officer will be a breach of the orders of the Apex Court.

16 Therefore, in our considered view, the impugned Government Resolution could not have been applied to the Judicial Officers appointed after 31st October 2005 and the action of Government of Maharashtra of applying the same to the Judicial Officers is completely in breach of the orders of the Apex Court.

17 Certain amounts have been deducted by way of contribution to the Pension Scheme from the salary payable to the Judicial Officers appointed on or after 1st November, 2005. It goes without saying that if some of the Judicial Officers who have been appointed after 31st October, 2005 have no objection for continuing with the New Scheme under the impugned Government Resolution, they will be entitled to continue under the New Scheme. The State Government will have to give time of two months from today to all the Judicial Officers appointed on or after 1st November 2005 to exercise option of continuing under the New Scheme. However, those who do not opt for the Scheme, will be entitled to refund. After deducting matching contribution made by the Government with interest/ return, if any, thereon, the entire amount in “Pension Tier – I” account of the Judicial Officers who do not opt to continue shall be transferred to “Pension Tier – II withdrawable account”.

18 Accordingly, we hold that :
(i) We hold that the impugned Government Resolution dated 31st October, 2015 is not applicable to the Judicial Officers in the State who were appointed on or after 1st November 2005. The said officers will be entitled to the same pensionary benefits which are available to the judicial officers appointed before 1st November 2005. However, the judicial officers who are appointed on or after 1st November 2005 will have an option to continue under the New Scheme;

(ii) The State Government shall give an option to the Judicial Officers appointed after cut­off date (31st October 2005) to continue under the New Scheme under the impugned Government Resolution. The option shall be exercised within a period of two months from today. The judicial officers who fail to exercise the option will be governed by Pension Scheme which is applicable to all Judicial Officers appointed before 1st November, 2005.

(iii) In case of those Judicial Officers who do not opt to continue with the New Scheme under the impugned Government Resolution, the entire contribution deducted from their salary along with the return/interest accrued thereon shall be transferred from their respective “Pension Tier­I account” to their “Voluntary Tier­II withdrawable Account” within a period of three months from today. We make it clear that the State Government’s Matching Contribution with interest/ return accrued thereon shall not be transferred as aforesaid and the State Government shall be entitled to withdraw the same from Tier – I account. The Judicial Officers will be entitled to withdraw the amounts as and when the same are transferred to “Voluntary Tier – II withdrawable Account”.

(iv) Now this Petition shall be placed before the appropriate Bench on 14th August 2017 for directions.
(A.K. MENON, J )

(A.S. OKA, J )

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