/2022 INSC 0741/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.  5114 OF 2022
The State of Tripura & Ors.       …Appellant(s)
Versus
Smt. Anjana Bhattacharjee & Ors.    …Respondent(s)
J U D G M E N T
M.R. SHAH, J.
1. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment and order dated 31.10.2017 passed by the High
Court of Tripura at Agartala in Writ Petition (C) No. 494 of
2012, by which, the High Court has struck down Rule 3(3)
of the Tripura State Civil Services (Revised Pension) Rules,
2009   (hereinafter   referred   to   as   the   Pension   Rules,   2009)
and   consequently   has   directed   to   pay   the   original   writ
petitioner   the   arrears   of   pension   for   the   period   from
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01.03.2007   to   31.12.2008,   the   State   of   Tripura   has
preferred the present appeal.
2. The facts leading to the present appeal in a nutshell are as
under: ­
2.1 That the State of Tripura has enacted/framed the Tripura
State   Civil   Services   (Revised   Pension)   Rules,   2009,   issued
by   the   Governor   under   Article   309   of   the   Constitution   of
India.   Rule   3(3)   of   the   Pension   Rules,   2009   which   was
under   challenge   before   the   High   Court,   which   has   been
struck down by the High Court by the impugned judgment
and order, is as under: ­
“3(3)   The   revised   rate   of   pension   within   the   above
limits   of   minimum   and   maximum   pension   shall   be
computed  notionally   from  1 st
  January  2006  or,  as  the
case   may   be,   from   the   date   of
superannuation/retirement   whichever   is   later.   But
financial  benefit  according   to this computation  will be
admissible   from   1 st
  January   2009   or   from   the   date   of
superannuation/retirement whichever is later”
  
2.2 On   the   request   made   by   the   Government   of   India   to
consider   adoption   and   implementation   of   Revised   Pay
Structure   in   UGC   System   for   Teachers   in   Colleges   w.e.f.
01.01.2006   following   revision   of   pay   scales   of   Central
Government   employees   as   per   6 th
  Central   Pay
Commission’s   recommendations,   the   State   of   Tripura
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issued   a   notification   dated   02.02.2010   and   introduced
revised   pay   structure   with   2   Band   Pay   Rs.   15600­39100
and   37400­67000   respectively   with   appropriate   academic
Grade   Pay   and   it   was   specified   that   arrears   would   be
payable   subject   to   receipt   of   financial   assistance   of   80%
from Central Government and that all other allowances to
be   admissible   from   01.01.2009.   The   State’s   notification
also provided that the pension would be admissible as per
Pension Rules for State as amended from time­to­time and
the upper ceiling of pension was raised from Rs. 25200 to
38500. The State amended Rule 3(2) of the Pension Rules,
2009 in the year  2010 and the maximum  limit of pension
was fixed at Rs. 38500.
2.3 That   vide   letter/communication   dated   23.12.2010,   the
Finance   Department   clarified   that   as   per   Rule   3(3)   of   the
Pension Rules, 2009,  pension  will be computed notionally
and   will   take   effect   from   date   of   retirement   of   a   college
teacher   who   retired   after   01.01.2006   but   financial   benefit
to   be   admissible   only   from   01.01.2009   or   date   of
retirement, whichever is later.     
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2.4 That   respondent   No.   1   herein   –   original   writ   petitioner
retired   as   Reader­cum­Vice   Principal   on   28.02.2007   upon
attaining   age   of   superannuation.   Her   pension   was
computed at Rs. 9,150/­ based on her last basic pay of Rs.
18,300/­.   That   thereafter   on   revision   of   pay,   her   pension
came to be revised to Rs. 26,850/­ on the basis of revised
basic   pay   of   Rs.   53,700/­.   However,   the   revised
pay/pension  was  made admissible and actually  paid from
01.01.2009   and   from   the   date   of   her   retirement   till
01.01.2009   it   was   computed   notionally.   Therefore,   the
original   writ   petitioner   preferred   a   writ   petition   before   the
High Court initially praying for (i) arrears of salary for the
period   from   01.01.2006   to   28.02.2007;   (ii)   arrears   of
pension   for   the   period   from   01.03.2007   to   31.12.2008   on
the   basis  of  revised  pay  scale. At   this  stage,  it  is  required
to   be   noted   that   initially   there   was   no   challenge   made   to
the   validity   of   Rule   3(3)   of   the   Pension   Rules,   2009.
However,   subsequently,   the   writ   petition   came   to   be
amended and prayer for arrears of salary was deleted and
the  prayer  for  quashing  of Rule 3(3) of  the Pension  Rules,
2009 was made. 
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2.5 It was the case on behalf of the original writ petitioner that
there is no reasonable excuse to deny the actual benefit of
pension   for   the   period   from   01.01.2006   to   31.12.2008
inasmuch   as   80%   of   the   financial   requirement   for
implementation   was   to   be   borne   by   the   Central
Government   whereas   the   State   Government   was   to   bear
merely 20% of the entire requirement for making payment
of   the   arrears   of   pension   for   the   said   period.   It   was
submitted   on   behalf   of   the   original   writ   petitioner   that
such   a   policy   decision   being   arbitrary   and   violative   of
Article   14   of   the   Constitution   of   India   should   be   struck
down.   It   was   submitted   that   there   must   be   a   reasonable
nexus to the object which the policy seeks to achieve.
2.6 That   the   writ   petition   was   vehemently   opposed   by   the
State.   A   counter   affidavit   was   filed   opposing   the   writ
petition in which it was specifically submitted on behalf of
the   State   that   due   to   the   financial   burden   on   the   State,
which the State was not in a position to bear the additional
burden   of   revised   pension,   a   policy   decision   has   been
taken   to   grant   the   benefit   of   revised   pension   notionally
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from   01.01.2006   to   31.12.2008   and   to   grant   the   actual
benefit of the revised pension from 01.01.2009 only. It was
vehemently   submitted   on   behalf   of   the   State   before   the
High Court that being a policy decision, the same may not
be   interfered   with   in   a   writ   petition   under   Article   226   of
the   Constitution   of   India.   It   was   submitted   that   it   is   not
normally within the domain of any court to weigh the pros
and   cons   of   the   policy   or   to   scrutinize   it   and   test   the
degree   of   its   beneficial   or   equitable   disposition   for   the
purpose   of   varying,   modifying,   or   annulling   it,   based   on
however   sound   and   good   reasoning,   except   where   it   is
arbitrary or violative of any constitutional, statutory or any
other provision of law.
2.7 By the impugned judgment and order, the High Court has
not   accepted   the   plea   of   financial   crunch   raised   by   the
State   and   consequently   the   High   Court   has   struck   down
Rule   3(3)   of   the   Pension   Rules,   2009   being   arbitrary   and
violative   of   Article   14   of   the   Constitution   of   India.
Thereafter,   the   High   Court   has   directed   the   State   to   pay
the   original   writ   petitioner   the   arrears   of   pension   (revised
pension)   from   the   date   of   her   retirement   to   31.12.2008.
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Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment   and   order   passed   by   the   High   Court,   by   which
the   High   Court   has   struck   down   Rule   3(3)   of   the   Pension
Rules,   2009   being   arbitrary   and   violative   of   Article   14   of
the   Constitution   of   India,   the   State   of   Tripura   has
preferred the present appeal.   
3. Shri Shuvodeep Roy, learned counsel  appearing   on  behalf
of   the   State   has   vehemently   submitted   that   due   to   the
financial crunch and considering the fact that there will be
heavy   financial   burden   upon   the   State   to   pay   the   actual
revision   pension   from   01.01.2006,   which   may   affect   the
development of a small State like State of Tripura, a policy
decision   was   taken   by   the   State   to   grant   the   benefit   of
revision of pay scale from 01.01.2009 only and the benefit
of   revision   of   pay   to   be   made   only   notionally   from
01.01.2006   to   31.12.2008,   which   the   Hon’ble   High   Court
ought   not   to   have   interfered   with   in   exercise   of   powers
under Article 226 of the Constitution of India. 
3.1 It   is   submitted   that   unless   it   is   found   that   such   a   policy
decision   is   arbitrary   and/or   violative   of   Constitution,
statute   or   any   other   provision   of   law,   the   High   Court   is
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precluded   from   interfering   with   the   policy   decision   in
exercise   of   powers   of   judicial   review   under   Article   226   of
the Constitution of India. 
3.2 It   is   further   submitted   by   counsel   appearing   on   behalf   of
the State that a detailed affidavit was filed on behalf of the
State   pointing   out   the   financial   constraint   and/or   the
financial   burden   on   the   State   if   the   arrears   of   revision   of
pension is paid from 01.01.2006. However, the High Court
has,   without   any   further   discussion   and   without   giving
any cogent reasons observed that the rationale of financial
crunch on the State exchequer has not satisfied the Court
at all. 
3.3 It   is   further   submitted   that   the   financial   burden   on   the
State   can   be   a   valid   ground   to   fix   a   cut­off   date   for   the
purpose of  payment  of revision of  pension.  Heavy   reliance
is   placed   on   the   decisions   of   this   Court   in   the   cases   of
State of Punjab and Ors. Vs. Amar Nath Goyal and Ors.;
(2005) 6 SCC 754  and  State of Bihar and Ors. Vs. Bihar
Pensioners Samaj; (2006) 5 SCC 65  in this regard .    
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4. Though served none has appeared on behalf of respondent
No.   1,   may   be   because   pursuant   to   the   earlier   interim
order   passed   by   this   Court,   she   has   been   paid   the   entire
arrears   of   pension   from   the   date   of   her   retirement.   It   is
required   to   be   noted   that   the   impugned   judgment   and
order   passed   by   the   High   Court   has   been   stayed   by   this
Court.
  
5. We have heard learned counsel appearing on behalf of the
State at length. We have gone through and considered the
impugned   judgment   and   order   passed   by   the   High   Court.
Before the High Court, Rule 3(3) of the Pension Rules, 2009
was   under   challenge,   which   is   reproduced   hereinabove.
Rule 3(3) of the Pension Rules, 2009 has been struck down
by   the   High   Court   by   holding   that   the   same   is   arbitrary
and   violative   of   Article   14   of   the   Constitution   of   India.
Before the High Court, it was the specific case on behalf of
the State that because of heavy financial burden and there
being financial constraints, the State is not in a position to
bear   the   heavy   burden   of   additional   revised   pension   and
therefore,   the   State   formulated   a   policy   decision   to   the
effect   that   the   revised   pension   shall   be   paid   from
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01.01.2006 to 31.12.2008 notionally and actual revision of
pension   shall   be   disbursed   from   01.01.2009   only.   A
detailed affidavit was filed on behalf of the State justifying
the above policy decision providing/granting the revision of
pay   from   01.01.2009   only   and   to   grant   the   benefit   of
revised   pension   notionally   from   01.01.2006   or   from   the
date of retirement till 31.12.2008. Before the High Court on
affidavit,   it   was   stated,   which   is   also   reproduced   by   the
High Court in the impugned judgment and order, as under:
­  
“However,   vide   Rule   3   (3)   ibid   Financial   benefit   was
made   admissible   from   1st   January,   2009   or   from   the
date   of   superannuation/retirement   which   ever   was
later.   For   all   other   cases,   the   pension   was   computed
notionally   as   per   revised   rates   of   scale   of   pay.   Since
the   petitioner   retired   on   28­02­2007   so   her   revised
pension   upto   31­   12­2008   was   computed   notionally.
The   claim   of   the   petitioner   is   to   allow   her   arrears   of
pension as per revised rates for the period from 01­03­
2007   to   31­12­   2008.   It   is   a   fact   that   Financial
condition   of   the   State   has   been   passing   through
turbulent   time   since   the   recommendations   of   the
Twelfth Finance Commission. State Government has to
depend on Central Government funding for meeting up
its Plan and Non­Plan expenditure. The funding by the
Central Government is based on the recommendations
of   the   Finance   Commission.   Finance   Commission
under   estimated   State’s   projections   of   Non­plan
revenue   expenditure   which   included   salaries,   pension
and   interest   payment   (Non­Flexible   and   Committed
Expenditure).   For   example,   the   State   Government
presented   a   realistic   picture   of   Rs.   3944.79   crores
towards   meeting   up   expenditure   towards   pension   as
per   revised   pay   scales.   Contrary   to   it,   the   Finance
Commission assessed a cumulative expenditure of Rs.
2779.09   crores   which   was   Rs.   1165.70   less   than   the
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actual   assessment   by   the   State   Government.   12th
Finance Commission calculated pension at Rs. 342.01
crores during the year 2008­09 and Rs. 413.83 crores
during   the   year   2009­10.   This   is   an   increase   of
approximately   9%   over   2007­08   and   21%   over   2008­
09.   However,   as   per   actual   implication,   the
expenditure   during   2008­09   and   2009­10   has   been
Rs.   356.43   crores   and   Rs.   559.89   crores   respectively
which   is   14%   and   57%   higher   than   that   of   previous
years.   Thus,   due   to   under   assessment   of   the   state’s
Financial   position   by   the   Finance   Commission,   there
has   been   a   shortfall   in   funding   on   Non­Plan   revenue
expenditure.   It   was  now   required   to  make   payment   of
pension   without   compromising   with   the   State’s
Finances   on   development   front.   As   such   Financial
benefit   towards   payment   of   pension   was   considered
from   01­01­2009.   All   other   cases   of   retirement   falling
within   01­01­2006   to   31­12­2008   were   allowed
pension   fixed   notionally.   Further,   payment   of   arrears
of   pension   will   have   a   huge   impact   on   the   State
Finances as there are large numbers of retirees during
that   period.   Considering,   the   constrained   financial
position   of   the   State,   it   is   not   possible   to   consider
further   payment   of   arrears   of   pension   to  the   similarly
situated persons as it would give rise to huge financial
burden on the State Exchequer  which will disturb the
financial equilibrium of the State.”
5.1 However,   without   giving   any   cogent   reasons,   the   High
Court   has   observed   that   the   foundation   i.e.,   the   financial
crunch has not satisfied the Court at all. Only reasoning or
actual findings are in paragraph 12 which reads as under:
­ 
“[12]   We   have   thoroughly   scrutinized   the   foundation   as
projected by the state­respondents by the passage from the
additional   counter   affidavit,   as   reproduced   above.   We   find
from   the   condition   laid   down   in   the   notification   dated
02.02.2010   that   out   of   the   total   financial   requirement   the
Central   Government   shall   bear   80%   till   31.03.2010.   The
period   mentioned   in   the   Rule   3(3)   of   the   said   rules   falls
within the said coverage period and as such, what the State
Government   has   projected   that   for   the   financial   crunch
they   had   been   compelled   to   bring   the   said   amendment   in
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the   said   pension   rules   is   wholly   unacceptable   and   in
contrast   to   Article   14   of   the   Constitution   of   India.   The
foundation   i.e.   the  financial  crunch   has   not   satisfied   us  at
all. Hence, we are of the view that the said Rule 3(3) of the
Pension   Rules   being   absolutely   arbitrary   is   liable   to   be
struck   down.   Accordingly,   we   strike   down   the   Rule   3(3)   of
the   Tripura   State   Civil   Services   (Revised   Pension)   Rules,
2009. The respondents No. 2, 3 & 4 are directed to pay the
arrear   pension   for   the   period   from   01.03.2007   to
31.12.2008   to   the   petitioner   within   a   period   of   3(three)
months   from   today,   else   the   said   amount   shall   carry
interest @6% per annum from 01.04.2010.”
5.2 When   specific   statistics   were   provided   before   the   High
Court   justifying   its   policy   decision   and   the   financial
crunch/financial   constraint   was   pleaded,   there   was   no
reason for the High Court to doubt the same. As such the
findings   recorded   by   the   High   Court   in   the   impugned
judgment  and order  is contrary  to  the averments made in
affidavit filed on behalf of the State Government. From the
affidavit   filed   before   the   High   Court   reproduced
hereinabove,   we   are   satisfied   that   a   conscious   policy
decision   was   taken   by   the   State   Government   to   grant   the
benefit of revision of pension notionally from 01.01.2006 or
from   the   date   of   superannuation   till   31.12.2008   and   to
pay/grant   the   benefit   of   revision   of   pension   actually   from
01.01.2009,   which   was   based   on   their   financial
crunch/financial constraint. 
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5.3 Whether   the   financial   crunch/financial   constraint   due   to
additional   financial   burden   can   be   a   valid   ground   to   fix   a
cut­off   date   for   the   purpose   of   granting   the   actual   benefit
of   revision   of   pension/pay   has   been   dealt   with   and/or
considered by this Court in the case of   Amar Nath  Goyal
(supra).   In   the   aforesaid   decision,   it   is   observed   and   held
by   this   Court   that   financial   constraint   can   be   a   valid
ground   for   fixation   of   cut­off   date   for   grant   of   benefit   of
increased   quantum   of   death­cum­retirement   gratuity.   In
paragraphs   26,   32   and   33   of   the   said   judgment,   it   is
observed and held as under: ­
“26.   It  is difficult  to accede to  the   argument   on behalf
of   the   employees   that   a   decision   of   the   Central
Government/State   Governments   to   limit   the   benefits
only   to   employees,   who   retire   or   die   on   or   after   1­4­
1995,   after   calculating   the   financial   implications
thereon,   was   either   irrational   or   arbitrary.   Financial
and   economic   implications   are   very   relevant   and
germane   for   any   policy   decision   touching   the
administration of the Government, at the Centre or at
the State level.
xxx xxx xxx
32.   The   importance   of   considering   financial
implications,   while   providing   benefits   for   employees,
has been noted by this Court in numerous judgments
including   the   following   two   cases.   In   State   of
Rajasthan   v.   Amrit   Lal   Gandhi   [(1997)   2   SCC   342   :
1997   SCC   (L&S)   512   :   AIR   1997   SC   782]   this   Court
went so as far as to note that:
“Financial   impact   of   making   the   Regulations
retrospective can be the sole consideration while fixing
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a   cut­off   date.   In   our   opinion,   it   cannot   be   said   that
this   cut­off   date   was   fixed   arbitrarily   or   without   any
reason. The High Court was clearly in error in allowing
the   writ   petitions   and   substituting   the   date   of   1­1­
1986   for   1­1­1990.”   [Ibid.,   at   AIR   p.   784,   para   17   :
SCC p. 348, para 17 (emphasis supplied).]
33.   More   recently,   in   Veerasamy   [(1999)   3   SCC   414   :
1999   SCC   (L&S)   717]   this   Court   observed   that,
financial   constraints   could   be   a   valid   ground   for
introducing   a   cut­off   date   while   implementing   a
pension scheme on a revised basis [ Supra fn 2 SCC at
p.   421   (para   15).]   .   In   that   case,   the   pension   scheme
applied   differently   to   persons   who   had   retired   from
service   before   1­7­1986,   and   those   who   were   in
employment   on   the   said   date.   It   was   held   that   they
could not be treated alike as they did not belong to one
class and they formed separate classes.”
5.4 In   the   aforesaid   decision   this   Court   after   considering   the
earlier   decisions   of   this   Court   in   the   cases   of   State   of
Punjab Vs. Boota Singh; (2000) 3 SCC 733   and   State of
Punjab   Vs.   J.L.   Gupta;   (2000)   3   SCC   736 ,   it   is
specifically   observed   and   held   that   for   the   grant   of
additional   benefit,   which   had   financial   implications,   the
prescription   of   a   specific   future   date   for   conferment   of
additional benefit, could not be considered arbitrary. 
5.5 In   the   subsequent   decision   in   Bihar   Pensioners   Samaj
(supra),   the   decision   in   the   case   of   Amar   Nath   Goyal
(supra)   is   followed   and   it   is   observed   and   held   that
financial   constraints   could   be   a   valid   ground   for
14

introducing   a   cut­off   date   while   introducing   a   pension
scheme on revised basis. It is further observed and held by
this Court in the aforesaid decision that fixing of a cut­off
date for granting of benefits is well within the powers of the
Government   as   long   as   the   reasons   therefor   are   not
arbitrary and are based on some rational consideration.
6. While   applying   the   law   laid   down   by   this   Court   in   the
aforesaid decisions to the facts of the case on hand, we are
of the opinion that in the instant case before us, the cut­off
date   has   been   fixed  as   01.01.2009  on   a   very   valid  ground
i.e.,   financial   constraint.   Therefore,   the   High   Court
manifestly   erred   in   striking   down   the   Rule   3(3)   of   the
Pension Rules, 2009 being arbitrary and violative of Article
14 of the Constitution. 
7. In view of the above and for the reasons stated above, the
impugned   judgment   and   order   passed   by   the   High   Court
striking   down   Rule   3(3)   of   the   Tripura   State   Civil   Services
(Revised   Pension)   Rules,   2009   is   unsustainable   and   the
same   deserves   to   be   quashed   and   set   aside   and   is
accordingly quashed and set aside. However, it is observed
that as respondent No. 1 has already been paid the arrears
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from   the   date   of   her   retirement   pursuant   to   the   interim
order passed by this Court, the same shall not be recovered
from   her.   However,   striking   down   of   Rule   3(3)   of   the
Tripura   State   Civil   Services   (Revised   Pension)   Rules,   2009
by   the   impugned   judgment   and   order   is   hereby   quashed
and set aside. The present appeal is accordingly allowed. In
the   facts   and   circumstances   of   the   case   there   shall   be   no
order as to costs.            
………………………………….J.
[M.R. SHAH]
NEW DELHI; ………………………………….J.
August 24, 2022. [B.V. NAGARATHNA]
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