CASE ANALYSIS OF

D. S. NAKARA v. UNION of INDIA

A case study

BY

ABHINAV MOHAN GOEL

INTERN

3RD YEAR

BHARATI VIDYAPEETH(DEEMED TO BE) UNIVERSITY, NEW LAW COLLEGE

PUNE

Mob – 9816301519

E mail – amg9998@gmail.com

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 BACKGROUND TO THE CASE

The First Central Pay Commission of 1946-47 recommended that the age of retirement in future should be
uniformly 58 years for all services and the scale of pension should be 1/80 of the remunerations for each
year of service, with a ceiling of Rs. 8,000 per year for 35 years of service, which the Government of India
while accepting the recommendation raised to Rs. 8,100 per year which would earn a monthly pension of
Rs. 675 at the maximum. The Second Central Pay Commission of 1957-58 retainedthe age of
superannuation to be 58 years for all classes of public servants but did not recommend any increase in the
supplementary retirement benefits and recommended that if in future any improvement is to be made, it was
the considered view of the Commission that these benefits should be on a contributory basis. The
Administrative Reforms Commission ('ARC' for short) set up by the Government of India in 1956 took note
of the fact that the cost of living has shot up and correspondingly the possibility of savings has gone down
and consequently the drop in wages on retirement is in reality much steeper than what the quantum of
pension would indicate, and accordingly the ARC recommended that the quantum of pension admissible
may be raised to 3/6 of the remunerations of the last three years of service and the ceiling should be raised
from Rs. 675 p.m. to Rs. 1000 p.m. Before the Government could take its decision on the recommendations
of the ARC, the Third Central Pay Commission was set up. One of the terms of reference of the Third Pay
Commission was 'death-cum- retirement benefits of Central Government employees'. The Third Pay
Commission did not examine the question of relief to pensioners because in its view unless the terms of
reference were suitably amended it would not be within their jurisdiction to examine this question and on a
reference by them, the Government of India decided not to amend the terms of reference. With regard to the
future pensioners the Third Pay Commission while reiterating that the age of superannuation should
continue to be 58 years further recommended that no change in the existing formula for computing pension
is considered necessary. The only important recommendation worth noticing is that the Commission
recommended that the existing ceiling of maximum pension should be raised from Rs. 675 to Rs. 1,000 p.m.
and the maximum of the gratuity should be raised from Rs. 24,000 to Rs. 30,000.

On May 25, 1979, Government of India, Ministry of Finance, issued Official Memorandum 1 whereby the
formula for computation of pension was liberalised but made it applicable to Government servants who were
in service on March 31, 1979 and retire from service on or after that date (specified date for short). The
formula introduced a slab system for computation of pension. This liberalised pension formula was
applicable to employees governed by the 1972 Rules retiring on or after the specified date. The pension for
the service personnel which will include Army, Navy and Air Force staff is governed by the relevant

1
Office Memorandum No. F-19(3)-EV-79
2
regulations. By another Memorandum2, the liberalised pension formula introduced for the government
servants governed by the 1972 rules was extended to the Armed Forces personnel subject to limitations set
out in the memorandum with a condition that the new rules of pension would be effective from April 1,
1979, and may be applicable to all service officers who become/became non-effective on or after that date.

The liberalised pension formula was applicable prospectively to those who retired on or after March 31,
1979 in case of government servants covered by 1972 Rules and in respect of defence personnel those who
became/become non-effective on or after April 1, 1979. Consequently those who retired prior to the
specified date were not entitled to the benefits of the liberalised pension formula. The constitutionality of
this policy was challenged in the petition filed in D. S. Nakara v. Union of India3

FACTS IN ISSUE

The petitioners in the case contended that the new the liberalised policy of pensioners is discriminatory and
violates article 14 of the Constitution of India. There is no reason specified by the Government as to why the
division is done on the basis of a specified date. They contended that if the purpose of pension is to provide
for the employees in their old age, post retirement when they are unable to pursue their work anymore, and
to provide for their socio-economic well-being as well as social welfare, then this differential treatment of
pensioners retiring prior or after a specified date, the choice of date being wholly arbitrary, would lead to a
class divide among the pensioners that retire before or after a specified date and is thus violation of article
14 of the Indian Constitution. The petitioners further contended that the liberalised pension scheme will lead
to a formation of a sub class within the category of pensioners. The expression ‘pensioners’ was said to be in
contradiction of employment. It refers to those government servants who are no longer in service and have
retired and are not getting any allowances or any salary. Thus by further sub dividing the pensioners based
upon their date of retirement would further lead to discriminatory division and sub classification of
‘pensioners’

PETITIONER’S ARGUMENTS

 The petitioners contended that there was no concrete reason given by the Government as to the
ascertainment of the date and payment of pensions. The petitioners claimed that if the pensions were
given to retirees for the services rendered in the past, and to avoid destitution in old age as well as to
maintain socio-economic justice, then in such circumstances the differentiation of pensioners based
on the fact that some retired prior to a given date and some after the date, the date in question being
totally arbitrary would be violative of article 14.

2
Memorandum of the Ministry of Defence bearing No. B/40725/AG/PS4-C/1816/AD (Pension)/Services dated September 28,
1979
3
D. S. Nakara v. Union of India, (1983) 1 SCC 305
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  The main contention raised by the petitioners was that pensioners of the Central Government form a
separate class in their entirety. A pensioner is different from an employee who is receiving grants
and salary for his services rendered. The term “pensioners” includes all those individuals that have
retired and are not in active service.
 The petitioners further submitted that if the date of retirement is to be accepted as a means of
differentiation among the pensioners then every pensioner will form a class of his own depending
upon his date of retirement. There is no valid reason as to why such a classification should be made
and is it permissible or voilative of article 14.

RESPONDENT’S ARGUMENTS

 The Attorney-General on behalf of the Government contended that the date and the scheme are
inseparable facets of the legislation and that the scheme cannot be enforceable without the date and
that the date is an integral part of the scheme. The respondent further contended that the Court has no
right to legislate but to interpret the laws made by the legislature and the executive. It would be
outside the function of the court to enlarge the case and by doing so the court would be legislating
rather than interpreting the laws.
 It was also further contended that when two smaller classes within a singular larger class are
covered, out of which one is unconstitutional, the court must examine as to whether the whole of the
legislation is to be severed or only the unconstitutional aspect faces the axe. It was also submitted
that severing legislation restricts the limit of the legislation and never widens its scope. In the present
case if the dates are severed from the legislation, this would lead to the inclusion of the older
pensioners thereby expanding the scope of legislation and not limiting it, which is in contradiction of
the doctrine of severability.
 The final submission made by the learned Attorney-General before the court was that there is no
precedent according to which the court has included a category to maintain the constitutionality of a
law.

NEED FOR PENSION

The Apex Court in the judgment makes a detailed study into the requirement of pension and the goals that
pension are striving to meet. The court observes that pension is neither a bounty nor a payment depending
upon the will of the employer. The court in Deokinandan Prasad v. State of Bihar4stated that pension is a
right payment of pension does not depend upon the discretion of the Government, but it is governed by the

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Deokinandan Prasad v. State of Bihar,(1971) 2 SCC 330
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rules and any government servant coming within the ambit of those rules shall be entitled to receive pension.
The same was re-affirmed in State of Punjab & Another v. Iqbal Singh5.

Pension is not a comparatively modern concept and was prevalent even during the alien rule. The colonisers
paid pensions to their employees with the object of retaining their loyalty even after the years of service
have perished. They did the same for their countrymen so as to ensure that their quality of life persists even
after their retirement. With the change in the society from a feudal one to one emphasising on social welfare
and justice, pension was prioritised and treated as not only as a payment made for previous employment but
as means of achieving social security in old age and avoiding destitution.

The methods of providing for the civil servants, who because of their old age were unable to continue
service was recognised even before the 19 th century. The Superannuation Act of 1834 was the first act that
exclusively dealt with the provisions available to employees or civil servants and provided with a uniform
scheme for all.

The main goal of pension is to see that the retiree or the pensioner lives with freedom, decency,
independence and self-respect and that the quality of life is maintained even after the days of service and
regular pay are over. Apart from this there is also a broader aspect to the payment to pension and that is to
ensure that the socio-economic justice prevails for people who are beyond their hey-day. Pensions are
provided for previous services rendered by the individual. As held in Douge v. Board of Education6
pensions are closely related to wages as they are paid to the employee for the services rendered by the
employee with the aim of providing the employee the means to meet the expenses of life. This also appears
to be precedent of pension as it ensures that the pensioner is able to maintain a stable life even after the
employment is over.

It should be the absolute duty of a socialist sovereign to ensure that socio-economic justice prevails across
the state and it can achieved only if all the age groups across the state are treated equally and provisions are
made for their well-being and social welfare. For the young and adolescents it can be achieved by providing
proper educational services, for the youth it can be achieved by providing employment opportunities. For
those who have rendered their services and their youth in the service of the nation and who need social
security and socio-economic stability more than anybody else, those who are the retirees and the pensioners,
the government must make proper post retirement superannuation and pension plans to ensure that their
socio-economic freedom is not curbed and they are living a stable and self-sustained life.

5
State of Punjab & Another v. Iqbal Singh AIR 1976 SC 667 (5)
6
Douge v. Board of Education of Chicago 302 US 74 (1937)
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 LEGAL ASPECT

Article 14 of the constitution ensures equality before law. Article 14 in India’s Constitution guarantees the
right to equality for every citizen of the country. It includes the general principles of equality before the law
and prohibits unreasonable and irrational discrimination between two persons. It incorporates the idea of
equality enunciated in the preamble.

It is declared in the article that ‘the State shall not deny to any person equality before the law or equal
protection of law within the territory of India.’ The expressions of equal protection of law and equality
before the law are enshrined in the constitution. They guarantee the fundamental rights and aim to establish
equality of status. The two expressions may seem identical, but they do not convey similar meanings.

The Rule of Law in England called by Dicey is an aspect of the guarantee of equality before the law. This
means that irrespective of the rank or status of a person, his condition would be subject to the jurisdiction of
ordinary courts as no man is above law. It is a requirement of the rule of law that no man should be
subjected to uncivilized, discriminatory and harsh treatment. This would be applicable even when the
objective is to secure a paramount need of law and order

A person irrespective of his rank or condition would be subject to the realm of the ordinary law. He would
be amenable at the jurisdiction of ordinary tribunals. Under Article 14, every person has equal protection
and is equal before law.

If the classification is made on a reasonable basis, the legislature can deal with two sets of individuals. A
reasonable classification must be based on smart differences. This means that collectively grouped persons
or things make a properly defined, distinct class and may be exceptional from those left out of the group.
Furthermore, this classification basis must have a rational nexus to the object that the legislation in question
seeks to achieve.

Article 13 of the Indian constitution forbids class legislation but it does not prohibit the reasonable
classification of objects, persons, and transactions for the purpose so as to achieve specific ends by the
parliament. Such classification should not be artificial, arbitrary or evasive and it must rest on substantial
distinction which is real. It must bear a reasonable and just relation to the sought object which is to be
achieved by the legislation. Classification of reasonable as laid by the Indian Supreme Court has two
conditions as in the case of Saurabh Chaudhari v Union of India7 , are-

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Saurabh Chaudhari v. Union of India (2004) 5 SCC 618
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(i)- The classification must be founded on intelligible differentia, distinguishing grouped together persons or
goods from the left out ones of the group.

(ii)- The differential must be in a rational relation with the sought object that is to be achieved by the act.
The object of the act and differential on the basis of classification are two separate things. It is essential that
there must be the presence of nexus between the object of the act and the basis of classification. When a
reasonable basis is not present for classification then such classification made by the legislature must be
declared discriminatory.

The age at which a person would be deemed competent between themselves can be fixed by the legislature
but competency cannot be claimed. A contract made dependent on the colour of hair cannot be made, and
such a classification would be arbitrary.

Article 14 guarantee equal protections of laws and they are:

 Neither means that the laws need to be general in character nor that it should be applicable to
everyone, which means; the same law applies to every person.
 It does not assess attainment or situations in the same position. Different classes have various needs
that require separate treatment.
 For safety and security different laws for varying places and legitimate control policies enacting laws
lie at the best interest of the state.
 Identical treatment in unequal situations, in fact, would amount as inequality.

Therefore for the society to progress a reasonable classification is not only permitted but also necessary.
Article 14 forbids class legislation but not reasonable classification. The article applies on the reasonable
basis, equals are treated differently. The article does not apply where unequal and equals are given different
treatments.

ON ARTICLE 14

The petitioners submitted that the specified date mentioned in the scheme was completely arbitrary. There
was no reason presented by the government for the selection of the specified date. Furthermore the group of
pensioners was further divided into two sub groups, one consisting of those pensioners who retired before
the specified date and the other consisting of those pensioners retiring after the specified date. In this way
the pensioners were being discriminated into those retiring after the specified date that were enjoying the
fruits of the liberalised pension scheme and into those who retired before the specified date and for whom
the liberalised scheme was meant to be were deprived of the benefits of the scheme. The petitioners were not
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against the scheme, but were in support of it. All they wanted was an inclusion into the scheme. Their
exclusion from the scheme based on an arbitrary date was called for as a violation of Article 14. The bench
referred to the precedent set in Manenka Gandhi v. Union of India8wherein it was laid down that article 14
strikes at the arbitrarinessin state actions and ensures equality of treatment. It also laid down that article 14
forbids class legislation but does not forbid reasonable classification for the purpose of legislation. The same
was observed by the Apex Court in EP. Royappa v. State of Tamil Nadu9 and Ajay Hasia v. Khalid
Mujib Sehravardi & others10.

The Apex Court agreed with the plea of the petitioners. The Apex court held that the selection of the date for
the scheme was arbitrary and without any rational nexus. The court agreed to the fact that pensioners did
indeed form a class of their own. The court held that inclusion of the date to differentiate between the two
set of pensioners was unconstitutional. Having said this, Apex court struck down the date clause from the
scheme.

ON ARTICLE 39, 41 AND 43

The Apex court observed that it is the duty of the Government to ensure under article 39(e), 41 and 43(3)
that people in their old age are not desolate and that they have a steady livelihood and economic security
even when their hey days are over. Article 39(e) of the constitution says that the state must ensure that the
health and strength of workers, men and women, and children of tender age is not abused and the citizens
are not forced by the economic necessity to enter occupations unsuited for their age. Article 41 says that the
state within its economical limitations must make effective provisions for education, right to work and
provide assistance in cases of old age, unemployment and disability. Article 43(3) obligates the state to
ensure among other things full enjoyment of leisure and social and cultural opportunities.

The word socialist was intentionally introduced in the Constitution 11so that it would usher in the socio-
economic revolution that was much needed in the country

ON DOCTRINE OF SEVERABILITY

The learned Attorney-General contended that the doctrine of severability was not applicable in this case. The
Attorney-General contended that the doctrine of severability was mean to limit the scope of the legislation
and not widen it. In the given case if the Apex court exercises the doctrine of severability it would broaden
the ambit of the legislation and not restrict it. The Attorney-General contended that there was no precedent
to support the fact that severing a clause would expand the limits of the legislation.
8
Manenka Gandhi v. Union of India, (1978) 1 SCC 248
9
EP.Royappa v. State of Tamil Nadu, (1974) 4 SCC 3
10
Ajay Hasia v. Khalid MujibSehravardi& others (1981) 1 SCC 722
11
42nd amendment, Constitution Act ,1976
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The Apex Court was held that even though there was no existing precedent as to the limitation of the
doctrine of severability this meant that the ambit of limitation of severability was open to interpretation and
also severability did not explicitly mean that the legislation had to be limited.

JUDGEMENT IN A GLANCE

1. The words “that in respect of the government servants who were in service on the 31 st March,
1979 and retiring from service on or after the date”, and
2. “The new rates of pension are effective from 1 st April 1979 and will be applicable to all
service officers who become/became non-effective on or after the date.”
3. Were considered to be unconstitutional and struck down’
4. With the specification that the liberalised pension scheme will be made available to all the
pensioners irrespective of the date of the retirement.

OVERVIEW OF THE JUDGEMENT

The judgement maintained and safeguardedthe right to equality before law. The Apex Courtrecognized the
“pensioners” as a class and struck down the clause that it found was in violation of article 14 of the
Constitution as it divided the homogenous class of ‘pensioners’ on the basis of the date of their retirement.
They also found the specified date to be completely arbitrary and in not based on any rational principle and
completely unrelated to the object to be sought after the liberalisation of the pension scheme. The court
observed that it is imperative for the state to take care of the old and desolate in order to maintain the
welfare approach of the state. The court said that in a Socialist Republic it is important to uphold the interest
of the pensioners, and safeguard their economic condition so that socio-economic justice prevails.

REFERENCES

 D. S. Nakara v. Union of India, (1983) 1 SCC 305

 Deokinandan Prasad v. State of Bihar,(1971) 2 SCC 330
 State of Punjab & Another v. Iqbal Singh AIR 1976 SC 667 (5)
 Douge v. Board of Education of Chicago 302 US 74 (1937)
 SaurabhChaudhari v. Union of India (2004) 5 SCC 618
 Manenka Gandhi v. Union of India, (1978) 1 SCC 248

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  EP. Royappa v. State of Tamil Nadu, (1974) 4 SCC 3
 Ajay Hasia v. Khalid MujibSehravardi& others (1981) 1 SCC 722

BREIF ABOUT THE AUTHOR

Abhinav Goel is pursuing his BBA LL.B from Bharati Vidyapeeth (Deemed to be) University, New Law
College, Pune, Maharasthra. He has previously published research papers and articles for journals. He is
interested in Constitutional and Criminal law. Currently he is student member of theNew Law College,
Moot Core Committee.

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