M.P. Thakkar, J.
1. An employee of the Western Railway who retired on July 31, 1975 has been obliged to approach this Court by way of the present petition in view of the fact that some 2 years after the competent authority had sanctioned grant of superannuation pension of Rs. 379/- along with the amount payable by way of pension relief, it was modified to his detriment by impugned order at Annexure 'B' dated June 7, 1978 whereby the pension was reduced from Rs. 379/- to Rs. 320/- along with the pension relief admissible as per rules. In other words, the amount of pension was reduced by Rs. 59/- per month as per the impugned order. The petitioner has challenged the legality and validity of the impugned order and has contended that there was no legal justification for reducing the amount of pension determined earlier by the competent authority as per order Annexure 'A', dated December 15, 1975. The petitioner has also made a grievance in respect of leave and other benefits and two other grievances of a minor character. The main debate has centered round the question as regards the scaling down of the pension amount from Rs. 379/- per month to Rs. 320/- per month as per impugned order at Annexure 'B'. The order under challenge evidently has been passed without affording any opportunity to the petitioner and without hearing him. On this ground alone the order deserves to be quashed and set aside without anything more. It will, however, not serve any useful purpose since the Railway Administration seeks to justify the impugned order on merits and the controversy on merits will survive. Under the circumstances, the legality and validity of the impugned order deserves to be scrutinized on merits. It appears that the pay-scales applicable to the railway employees were revised upwards with effect from July 1, 1973. The controversy has arisen in the context of this upward revision of the pay-scales. According to the Railway Administration, initially, sanction w as accorded to payment of pension to the petitioner at the rate of Rs. 379/- as per Annexure 'A' dated December 15, 1975 on the basis of the pay last drawn by him inclusive of 75% of the running allowance drawn by him at the time of his retirement on 31st July 1975. Thereafter a downward revision was made by making the computation on the basis of the last pay actually drawn inclusive of 45% of the running allowance drawn by him at the date of his retirement. The downward revision has been made on account of diminution in the rate of running allowance. The question, therefore, is whether in making the computation as on the date of the petitioner's retirement on July 31, 1975. The factor regarding running allowance should be included on the basis of 75% as (sic) or at the reduced rate of 45% applicable subsequent to the date of his retirement. There is no doubt that computation has to be made on the basis of pay and allowance drawn by the employee on the date of his retirement. Rule 2301 contained in Chapter XXIII of the Indian Railway Establishment Code, Volume II, 1951 Edition, provides that a pensionable railway servant's claim to pension is regulated by the rules in force at the time when he resigns or is discharged from the service of Government. There is no rule which empowers the Railway Administration to fix the pension on the basis of the rules which come into force 'after' the retirement of a railway servant. The question therefore, is as to the correct formula for computation of pension having regard to the rules prevailing on the date of the retirement (31-7-75). A reference in this connection may be made to Manual of Railway Pension Rules, 1950 corrected upto September 1, 1969 which has been produced by the Railway Administration. Paragraph 104 (2) of the Pension Rules reads as under:
104. The quantum of ordinary gratuity/pension and death-cum-retirement gratuity depends mainly on the following three factors:
XX XX XX XX(2) Emoluments in the case of gratuity and death-cum-retirement gratuity and average emoluments for pension.
In respect of Railway servants quitting service on or after 15th June 1968, 'Emoluments' for pensionary benefits shall mean the 'pay' as defined in Rule 2003(21)-Rule II, which the Railway servant was receiving immediately before quitting service. The benefit of higher officiating pay for gratuity/death-cum-retirement gratuity will, however, be given only if such pay was/would have been drawn continuously for a period of not less than 22 days. In the case of running staff, emoluments for gratuity/death-cum-retirement gratuity will also include the monthly average of the running allowance drawn during the 365 days of running duty immediately preceding the date of quitting service limited to 45 per cent in Revised Scale of the emoluments as defined above.
For the purpose of calculation of average emoluments the actual amount of the running allowance drawn during the month limited to a maximum of 75 per cent of other emoluments as defined above shall be taken into account. The pay drawn in tenure appointments will also count as emoluments.
'Average emoluments' means the average of the emoluments calculated with reference to the position of the employee during the last 10 months of service.
The emoluments for gratuity/death-cum-retirement gratuity are subject to a maximum of Rs. 2500, per month.
In the aforesaid provision a reference has been made to the expression 'pay' as defined in Rule 2003(21) - Rule II. It will, therefore, be fruitful to reproduce the said provision in so far as material:
2003. (F.R. 9). Definitions.-Unless there be something repugnant in the subject or context, the terms defined below are used in the rules in this Chapter and the next in the sense here explained.
XX XX XX XX(21)(a) Pay means the amount drawn monthly by a railway servant as.
(i) the pay, other than special pay or pay granted in view of his personal qualifications, which has been sanctioned for a post held by him substantively or in an officiating capacity, or to which he is entitled by reason of his position in a cadre, and
(ii) overseas pay, special pay and personal pay, and
(iii) any other emoluments which may be specially classed as pay by the President.
It will, thus, be seen that the emoluments which are specified in Paragraph 104(2) are covered by the definition of 'pay'. In other words, the definition of 'pay' takes within its sweep the emoluments as specified in the aforesaid Paragraph. A glance at the aforesaid Paragraph will show that in so far as running allowance is concerned, emoluments to the extent of 75% are to be- included in the computation of pay. It is in pursuance to the aforesaid provision that computation of the pension payable to the petitioner will have to be made on the basis that (sic) allowance to the extent of 75% was to be included in working out the pay last drawn by the petitioner. There was no modification in the relevant rules contained in the Indian Railway Establishment Code or the rules contained in the Manual of Railway Pension, Rules, 1950 till the date on which the petitioner retired i.e. till July 31, 1975. Computation of the pension payable to the petitioner was in fact initially made by the competent authority as per Annexure 'A' dated December 15, 1975 in accordance with the aforesaid formula which is unexceptionable. It is the case of the Railway Administration that the aforesaid computation was not in accordance with law and that in determining the amount of pay the running allowance to the extent of only 45% should be included. The burden is, therefore, on the Railway Administration to show that there is some justification in law for including running allowance only to the extent of 45% and not to the extent of 75% on the date of the retirement of the petitioner, namely, on July 31, J975. Admittedly the aforesaid rules were not amended or repealed till July 31, 1975. The question, therefore, naturally arises, on what basis can the Railway Administration justify scaling down the running allowance from 75% to 45%. Reliance has been placed on Annexure II to the affidavit-in-reply sworn by the Divisional Superintendent of the Western Railway on June 17, 1978. There is something in Annexure II dated March 22, 1976 which according to the Railway Administration would support its contention that only 45% of the running allowance and not 75% should be included in working out the figure of 'pay' for the purpose of computation of pension. In so far as material the communication issued by the Railway Administration read as under:
Sub-Revision of rules regarding treatment or Running Allowance as pay for certain purposes consequent upon the introduction of revised pay Scales under RS BPJ Rules, 1973.
Reference Railway Ministry's letter No. PC III/75/RA Dated 21-1-1974 on the above subject.
The Question of rules regarding treatment of Running allowance as pay for certain purposes consequent upon the introduction of revised pay scales under Railway Services (Revised Pay) Rules, 1973 has been under consideration of this Ministry. It has now been decided that the existing Rules in this respect may be modified as follows in the case of Running Staff drawing pay in revised Pay Scales:
(i) Pay for the purpose of passes and PTOs shall be pay plus 40% of pay.
(ii) Pay for the purpose of Leave Salary Medical attendance and treatment,
Educational Asstt. and retirement benefits shall be pay plus actual amount of running allowance drawn subject to a maximum of 4C% of pay. O'ii) Pay for the purpose of fixation of pay in stationary posts, Compensatory (City) allowance, House Rent Allowance and Rent for Railway Quarters shall be pay plus 30% of pay.
2. ...This Orders take effect from 1-4-1976 (3) the payments already allowed on provisional basis in terms of para-2 of Railway Ministry's No. PCIII/73/PA dated 21-1-1974 for the period from 1-1-1973 to 31-3-1976 shall be treated as final.
4. ...The above has the sanction of the President.
A bare glance at the notification would show that it has been made effective from April 1, 1976 (see paragraph 2). Since the petitioner had retired on July 31, 1975, the aforesaid rules which become operative with effect from April 1, 1976 i.e. which came into force some nine months after his retirement cannot deprive him of the right to pension already earned by him. It is, however, contended by the Railway Administration that a communication issued on July 8, 1978 (Annexure 'III') embodying instructions issued by the Railway Board of June 23, 1976 has altered the situation to the prejudice of the petitioner. The said communication in so far as material deserves to be quoted:
A copy of Board's letter PCIII/75/RA/1 dated 23-6-1976 is reproduced below for information, guidance and necessary action. Board's letter of even No. dated 22-3-1976 referred to therein was circulated under this office letter No. BPC,'863/0 Volume 11 dated 29-3-1976.
End;: 1 Board's letter
with Hindi version.For General Manager
Copy of Board's letter (sic) PCIII/76/RA/1 dt. 23-6-76 addressed to the General Managers, All Indian Railways and others.
Sub :- Revision of Rules regarding treatment of Running allowance as pay for certain purposes consequent upon the introduction of revised pay-scales under RS(RP) Rules, 1973.
Reference Railway Ministry's letter of even number dated 22-3-1976 on the above subject.
2. ...In partial modification of the orders contained therein the Railway Ministry have decided, as a special case, that in the case of Running Staff retiring between 1-1-1973 to 31-3-1976, pay for the purpose of retirement benefits only shall be pay in the revised scales plus actual amount of running allowance drawn subject to a minimum of 45% of pay in revised Pay-Scales.
3. ...The above has the sanction of the President.
Reliance is placed on paragraph 2 of the aforesaid communication for contending that in case of Running Staff retiring between 1-1-73 to 31-3-1976 the right to pension would be governed by the aforesaid letter dated March 23, 1976 circulated on July 8, 1978. It is contended that the rule embodied in Annexure 'II' dated 22-3-76 has been modified within three months thereof as per Annexure 'III' dated June 23, 1976 and the right conferred on the petitioner to claim pension has been altered to his prejudice thereby. Now, so far as the petitioner is concerned, to his pension had to be fixed in accordance with the rules which were in existence on the date of his retirement on July 31, 1975. Admittedly as per the said rules the pension payable to the petitioner was fixed at Rs. 379/- as on July 31, 1975. Unless there is any provision of law which provides that the pension payable to the employee is to be determined by the rules which were to come into existence in future (there is no such provision) the pension has to be determined by the rules which governed the employee concerned on the date of his retirement. This is incapable of being disputed and has not been disputed. That being the position it is difficult to comprehend as to how the pension already earned by an employee as per the rules in existence when he was in employment, and on the date on which he retired, can be altered to his prejudice. By Annexure 'II' dated March 22, 1976 the existing rules were revised with effect from April I, 1976. These rules, therefore, obviously came into force some eight months after the retirement of the petitioner. The right to claim pension as per Annexure 'A' at Rs. 379/~ was, thereafter, re-affirmed as per Annexure 'II' dated March 22, 1976. When and how was this right taken away and under what authority of law? According to the Railway Administration it was provided by Annexure 'III' dated June 23, 1976 that for Running Staff retiring between January 1, 1973 to March 31, 1976 only 45% of the running allowance should be paid as per the decision of the Railway Ministry. Now, Annexure 'III' cannot retrospectively impair the legal effect of Paragraph 104(2) of the Railway Pension Rules. As is disclosed by the title on the top of the communication at Annexure 'III' the Railway Ministry was concerned with revision of rules regarding treatment of running allowance for certain purposes. It was not dealing with the question of amendment of Railway Pension Rules. Annexure 'III', therefore, does not operate as a retrospective amendment of Paragraph 104(2). The right to claim 75% of the running allowance has been conferred by Paragraph 104(2) which has been quoted in the earlier part of the judgment. The question of amendment or modification of this rule was not before the competent authority at all. It cannot, therefore, be said that the decision taken by the Railway Ministry as reflected in Annexure 'III' so operates as to retrospectively amend Paragraph 104(2). Under the circumstances, the arguments urged on behalf of the petitioner, in the alternative, challenging the constitutional validity of Annexure 'III' need not be considered. It would, however, be desirable to advert to these arguments. It is contended that the rule framed by the competent authority as per Annexure 'II' pertains to all railway employees including members of the Running Staff and confers on them the right to claim pension on the existing basis till March 31, 1976 (the new basis becomes operative on April 1, 1976) if Annexure 'III' is to be construed as retrospectively amending Annexure 'II' in so far as Running Staff is concerned, Annexure 'III' must be held to be unconstitutional and invalid as being violative of Articles 14 and 16 of the Constitution of India. There is no basis for discriminating only against the Running Staff in the matter of modification of the Pension Rules. The second argument which is advanced is that right to pension is property as laid down by the Supreme Court in Deckinandan Prasad v. The State of Bihar and Ors. : (1971)ILLJ557SC and Madan Mohan Pathak v. Union of India : (1978)ILLJ406SC , and that Annexure III if it is interpreted as bringing about retroactive amendment of pension Rule paragraph 104(2) would be unconstitutional inasmuch as it would amount to taking away the property of the petitioner without paying any compensation to him. It is not necessary to consider the validity of these two submissions in the view that I am taking. It must, however, be observed that in interpreting Annexure 'III' the interpretation canvassed by the petitioner viz. that it does not retro-actively amend the pension rule, must find favour if to construe it otherwise is to give a rise to a challenge on the constitutional ground of hostile discrimination.
2. With regard to the other reliefs claimed by the petitioner, the first grievance made by him is in connection with leave and other benefits. It appears that the service of the petitioner was extended for one year. The Railway Administration took the stand that if leave had not been enjoyed by the petitioner before his date of retirement, he would not be entitled to claim the amount in lieu of leave not enjoyed by him. The learned Counsel for the Railway Administration has made the statement that the stand taken is now abandoned and the petitioner will be paid compensation in regard to the leave not enjoyed by him. In view of this statement made by the learned Counsel for the Railway Administration, the petitioner has not pressed his claim. The learned Counsel for the Railway Administration has also stated that no deduction of Rs. 137/-will be made from his salary as was sought to be made before the institution of the petition (sic) view of this statement, learned Counsel for the petitioner does not press his petition in regard to this grievance. With regard to the other two grievances, counsel for the petitioner does not press the petition and hence it is not necessary to discuss the question pertaining to the validity of the respective contentions.
3. Under the circumstances, the petition must succeed. It is declared that the pension payable to the petitioner was rightly determined at Rs. 379/- plus pension relief admissible as per the prevailing rules as per Annexure 'A' and the petitioner is entitled to claim pension on that basis. It is declared that order at Annexure 'B' scaling down the pension payable to the petitioner is illegal and ultra vires. The respondents are directed to pay to the petitioner the difference in pension on the basis of computation as per Annexure 'A' along with pension relief as admissible according to the prevailing rules by October 15, 1979.
The petition is allowed. Rule is made absolute to the aforesaid extent. There will be no order regarding costs.