' CH. MUHAMMAD ILYAS (MEMBER).--- These two appeals being identical and involving common facts and law with regard to the Special Additional Pension are being disposed of by this single judgment.
2. The appellant, Mr. Memon Abdul Aziz had, in fact raised the issue previously vide Appeal No,590(R)(C.S.) of 2002 instituted on 2-8-2002 which was heard along with 22 other appeals with a prayer to modify the Finance Division's letters dated 4-9-2001 and 3-11-2001 to allow appellants 15% increase as against 5% in their pension and allow benefits on the full pension i,e, gross pension rather than net pension i,e, half of the pension. Mr. Memon Abdul Aziz had, on the other hand, also prayed "to set aside the orders of Ministry of Finance to freeze Orderly Allowance after retirement vide their letter No,F1(2)-Reg.6/91-III, dated 11-8-1996 which is contrary to the judgment of the Honourable Supreme Court in case I.A. Sherwani v. Federation (Ministry of Finance) 1991 SCMR 1041 for additional relief for the grant of. Orderly Allowance with corresponding increase in the Orderly Allowance allowed to the civil servants from time to time". It was, however, observed by the Tribunal vide their judgment, dated 2-6-2003 as follows:-- "He has also prayed for additional relief for the grant of orderly allowance. But has given up that claim in the present appeal. He has prayed that he may be allowed to agitate it through a separate appeal or along with the appellants who have filed appeals for grant of orderly allowance. His request is allowed. He is permitted to file a fresh appeal for grant of orderly allowance or he can join in other appeals filed by other appellants for the same relief."
' Hence he has filed the instant appeal with a prayer to "direct the respondents to either bring the orderly allowance at par with the pay scales of 1999 or increase it as other pension as it has been re-named as Special Additional Pension."
3. Mr. Muhammad Ilyas Lodhi, the other appellant has also prayed vide his Appeal No,373(R)(C.S.) of 2004 "to direct the Ministry of Finance to extend the benefit of the prevailing rates of orderly allowance with retrospective effect". His grievance is that the Special Additional Pension allowed to him at the time of retirement based on the then admissible Orderly Allowance of Rs,1,000 has not been enhanced corresponding to the enhanced rate in the Orderly Allowance from time to time i,e,Rs,1,000 to Rs,1,600, Rs,1,900 and Rs,2,375. He cited S.A. M. Wahidi v. Federation of Pakistan dated 16-3-1999 reported in 1999 SCMR 1904 and argued that in accordance with the principle set in the above captioned judgment of the Honourable Supreme Court, he should also be allowed the increase in the Orderly Allowance from time to time retrospectively with effect from the date that the benefit at the enhanced rates accrued to other officers as per the dictum laid down in 1984 SCMR 286 and 1996 SCMR 1185 that in order to avoid unnecessary litigation the benefit of the judgment be given to other persons who are not party to the litigation. His appeal to the Ministry of Finance to allow latest Orderly Allowance allowed to the officers in B-21 with retrospective effect remained unresponded. He contended that denial of the benefit to be allowed is discriminatory and violative of the provision of Article 25 of the Constitution.
4. The respondent, Ministry of Finance argued that Special Additional Pension was admissible equal to pre-retirement Orderly Allowance with effect from 19-2-1991 and while the Government had increased Orderly Allowance from Rs,1,900 to Rs,2,375 per month vide their O.M. No,1(13)IMP/96 dated 6-10-2003 the rates of Special Additional Pension had not been increased. It was held that the privilege of Orderly Allowance had been sanctioned for the Government officers holding posts in B-20 and above in consideration of official duties and responsibilities of the incumbent of the posts who exercised the option to avail the benefit of Orderly Allowance in lieu of the privilege and the benefit of the allowance revised from time to time was specific to the serving employees and not to the retired officers and, as such, the revision in the rates of the Orderly Allowance did not have any bearing on the amount of Special Additional Pension drawn by a pensioner on the basis of pre-retirement rates at the time of his retirement. According to Finance Division's O.M. Dated 29- 9-1991, officers in BPS-20, 21 and 22 are allowed Special Additional Pension equal to the admissible pre-retirement Orderly Allowance instead of Orderly Allowance. Subsequent revision in the Orderly Allowance for the serving employees therefore, do not apply to them for the reason that they are not otherwise entitled for the Orderly. Allowance. It was also argued by the respondents that the judgment of the Honourable Supreme Court in case i,e, I.A. Sherwani v. Federation 1991 SCMR 1041 as well as in Civil Appeals Nos.422 and 423 of 1994 in case of S.A.M. Wahidi who retired prior to 29- 9-1991 were not attracted in this case. It was argued that the Government's action was lawful and no injustice had been done to the appellants.
5. The judgments cited by the appellants are landmark judgments wherein most of the issues agitating the minds of the petitioners such as:--
(1) amounts of pension originally sanctioned and generally considered inadequate kept constantly decreasing in value in the wake of inflationary pressures and resultant decline in the economic value of the money in terms of its purchasing power without being adequately made up by periodical revisions;
(2) non-grant of corresponding increases allowed to the serving employees;
(3) variations in the computation formulae with the consequential impact on the quantum of the gross pension, computation, gratuity and net pension in respect of civil servants retiring on different dates while living in the same set of circumstances etc. ' Have been addressed exhaustively and. Ruled upon.
6. The retired employees have consistently been aggrieved in the feeling that the State had failed in looking after their needs in their old-age as compared with the serving employees each time that an improved dispensation has been made for the latter and revised Pay and Pension Scales were introduced. These landmark judgments have settled these issues in terms of their philosophical background and framework and evolved guiding principles for examining any further issues arising out of this phenomenon and perception of neglect and hurt on the part of both, those in service and the retired.
7. It has been held in the said judgment that:--
(1) Pension is a right of a retired employee rather than a bounty that he has earned through meritorious or, at the least a satisfactory service rendered in the cause of the nation but the foremost responsibility of the Government is to ensure an adequate package for the serving employees who have got responsibilities and functions to perform whereas those who have retired constitute a liability of the Government and need to be looked after as a part of the social and moral responsibilities of the State. However, needs of both the classes i,e, serving employees and those having been retired have to be met within the resources available.
(2) The right and extent of the pension amount depends on the language of the relevant statute or the rules framed thereunder. In order to link revision of pension amount with the revision of pay scales, there should be a statutory provision to that effect: The Civil Servants Act does not contain any such provision..."
8. From the above discussion, it flows that grant of pay and allowances and pension essentially falls within the Government's exclusive domain. In Pakistan, there is a legal framework provided for that in section 19 of the Civil Servants Act, 1973, Civil Service Regulations Nos.4 and 486 which stipulate that:- "on retirement from service, a civil servant shall be entitled to receive such pension or gratuity as may be prescribed.
' The above entitlement has been prescribed in the form of the C.S.R.4, which inter alia lays down that an officer's claim to pay and allowances is regulated by the rules in force at the time 'in respect of which the pay and allowances are earned; to leave by the rules in force at the time the leave is applied for and granted; and to pension by the rules in force at the time when the officer resigns or is discharged from the service of Government."
' C.S.R. Section 486 deals with emoluments and computation of pension and gratuity.
9. At this juncture it appears worthwhile to recall some dicta pronounced in I.A. Sherwani v.
Government of Pakistan 1991 SCMR 1041 in the context of discrimination admissible or otherwise in the dispensations allowed in Pay and Pension by Government, with a bearing on the case in hand as following:--
(1) "Retired civil servants from a class by themselves in relation to those who are still in service in the absence of any special circumstances it will be discriminatory to grant a privilege or benefit to one sub-class of retired civil servants and withhold the same from another sub-class of retired civil servants by fixing a date with regard to its availability."
(2) "Constitution of Pakistan (1973), Article 25---Pension---Benefit of any improvement in pension which may be granted to a civil servant retiring in future must not invariably be extended to already retired civil servants who held the same or corresponding appointment at the time of their retirement---If the Government improves the pensionary privileges and benefits for its serving employees or future entrants it cannot be said that it is guilty of discriminatory treatment towards those who have already retired."
(3) "New ground or a new avenue can be explored on the basis of some legal principle and not merely on the ground what appears to be just and equitable."
(4) "However, a pensioner may have a legitimate grievance if he is not treated alike with the other pensioners, for example, if the Legislature/Government increases pension amount by 10%, say on 1- 1-1991, but provides that this benefit will be available to those pensioners who have retired on or after 1-1-1989. In other words, the pensioners who had retired prior to 1-1-1989 are deprived of the above benefit. This would be violative of Article 25 of the Constitution unless the Government can demonstrate that the above sub-classification within the class of pensioners is based On an intelligible differentia and that the latter has rational nexus to the object sought to be achieved by the relevant classification under the statute or statutory rule."
10. Some of the principles evolved by the apex Court in regard to justifiable distinction on the basis of a reasonable classification are the following:-- "(1) that equal protection of law does not envisage that every citizen is to be treated alike in all circumstances, but it contemplates that persons similarly situated or similarly placed are to be treated alike;
(2) that a law applying to one person or one class of persons may be constitutionally valid if there is sufficient basis or reason for it, but a classification which is arbitrary and is not founded on any rational basis is no classification as to warrant its exclusion from the mischief of Article 25;
(3) that reasonable classification is permissible but it must be founded on reasonable distinction or reasonable basis;
(4) that no standard of universal application to test reasonableness of a classification can be laid down as what may be reasonable classification in a particular set of circumstances may be unreasonable in the other set of circumstances;
(5) that in order to make a classification reasonable, it should be based;
(a) on an intelligible differentia which distinguishes persons or things that are grouped together from those who have been left out;
(b) that the differentia must have rational nexus to the object sought to be achieved by such classification.
11. It was in perspective of the foregoing that the respondent's counsel contended that Government was within its lawful authority not to allow the increase in the pension corresponding to that allowed to the serving Government servants. Neither could it be held to be in violation B of Article 25 of the Constitution when lesser increases were sanctioned for the pensioners as compared with the serving employees or a distinction was made in allowing increases to the pensioners at different rates with reference to their date of retirement which had been accepted by the Honourable Supreme Court to fall in the category of a reasonable classification. The grant of 2% additional pension for each year of service beyond 30 years only to those retiring on a particular date was, on the other hand, declared to be discriminatory by the apex Court and allowed retrospectively in the said judgment and was later the Special Additional Pension equivalent of Orderly Allowance in Mr. Wahidi's case for the same reasons of discrimination. In both the cases, the distinction was struck down because it did not qualify the criteria of a reasonable classification.
12. In the Wahidi's case the arguments for and against the retrospective application of the benefit and verdict thereon are reproduced below (emphasis ours) to highlight the relevance and bearing of the Honourable Supreme Court's dictum on the issue under consideration:-- "In support of the above C.A. No,422 of 1992 Mr. K.M.A. Samdani learned Senior Advocate Supreme Court appearing for the appellant, stated that since the above amount of qualification pay of Rs,100 is computed as a part of the salary of the civil servants who retired after 1-6-1991, the appellant cannot be discriminated against and, therefore, he is entitled to the recalculation of the pension amount by including the qualification allowance of Rs,100 though he had retired w,e,f, 13-2- 1987. He has relied upon the judgment, of this Court in the case of I.A. Sherwani and others v.
Government of Pakistan through Secretary, Finance Division, Islamabad and others 1991 SCMR 1041 particularly the following portion at page 1091: "32. However, we may again point out that with effect from 1-7-1986 an additional benefit of 2% pension for each year of service exceeding 30 years subject to a maximum of 10% of pension sanctioned was given to the pensioners who retired after 30-6-1986 and not to those pensioners who retired earlier and therefore; the above withholding of the benefit from the pensioners who had retired prior to 1-7-1986 without having any basis as to bring the case within reasonable classification, cannot be sustained in view of the ratio decidendi of the cases referred to hereinabove. According to the list of documents submitted by Mr. Samdani, the Punjab Government has already extended the above benefit to all the pensioners irrespective of the date of retirement. Similarly the withholding of the benefit of P.O. No,5 of 1988 from the petitioner in C.P.
No,5-R of 1990 was not warranted by law. In this regard, reference may be made to the case of M.A.
Rashid v. Pakistan through Finance Division, Government of Pakistan, Islamabad and 3 others PLD 1988 Quetta 70, in which the facts were that the petitioner in above C.P. No,5-R of 1990 happened to be the petitioner. He impugned Government action of withholding the benefit of P.O. No,5 of 1983 on the ground that he had retired earlier."
' Whereas in support of the above C.A. No,423 of 1994 his submission was that since the benefit was given as a special additional pension w,e,f, 19-2-1991, the appellant and other pensioners who have retired on or before 19-2-1991 cannot be discriminated against.
' On the other hand Mr. Yawar Ali Khan, Deputy Attorney-General has relied upon the following portion of the judgment in the case of I.A. Sherwani v. Government of Pakistan (supra):--- "28. The question which requires consideration is, as to whether in the instant cases classification is founded on an intelligible differentia which distinguishes one group of pensioners from others and whether the above differentia has rational nexus to the object or raison desert sought to be achieved. According to Mr. Samdani, civil servants who have already retired and who will retire in future should be treated as a class and that there cannot be any sub-classification within the above class on the basis of date of retirement, as it would not fall within permissible reasonable classification. On the other hand, Mr. Aziz A. Munshi, learned Attorney-General, has urged that various groups of pensioners are to be classified on the basis of applicability of relevant pension rules. We are unable to subscribe to Mr. Samdani's above submission that civil servants who have already retired and who will retire in future, are to be treated as one class nor we are inclined to agree with the above submission cf the learned Attorney-General. In our view, reasonable classification will be that all the pensioners as a group are to be treated as a separate class. In this view of the matter, if the pay scales of serving civil servants are revised, the civil servants who have by then already retired cannot have any legitimate grievance to agitate for notional revision of their pay scales for re-computing their pension amounts for any purpose as the pension amount is to be computed as above C.S.R.4 on the basis of the pension rules in force on the date of retirement of a civil servant. The pension rules contained formula as to the method of computation of pension amount with reference to the salary drawn by him till the date of retirement and, therefore, there cannot be uniformity in the amounts of pension among the civil servants despite of having equal rank and equal length of service, if they retire not on one date but on different dates and in between such dates pay scales are , revised. However, a pensioner may have a legitimate grievance if he is not treated alike with the other pensioners, for example, if the Legislature/Government increases pension amount by ,10% say on 1-1-1991, but provides that this benefit will be available to those pensioners who have retired on or after 1-1-1989. In other words, the pensioners who had retired prior to 1-1-1989 are deprived of the above benefits. This would be violative of Article 25 of the Constitution unless the Government can demonstrate that the above sub-classification within the class of pensioners is based on an intelligible differentia and that the latter has rational nexus to the object sought to be achieved by the relevant classification under the statute or statutory rule."
13. We would now make an appraisal of the arguments advanced by the parties on the specific issue of Special Additional Pension allowed at a rate equivalent to the amount of Orderly Allowance as admissible on the date of retirement of a pensioner with guidance from the above dicta and principles for a reasonable classification as laid down by the Honourable Supreme Court with the Article 25 of the Constitution in the background.
(1) The appellants have essentially based their case on discrimination in denying to them the enhancement in the Special Additional Pension with reference to the increases allowed in the Orderly Allowance. In this context, it is necessary that the nature of the operative elements involved in Special Additional Pension be examined which distinguish it from the pension in general and computed as required under the provisions of C.S.R. 4 and 486. The eligibility criteria in this case is only a set of employees falling in a category i,e, B-20, 21 and 22 put together and its uniform rate has been linked with the pre-retirement admissible Orderly Allowance. Contrary to that in pension in general, its computation does not involve elements such as length of service, emoluments reckonable towards pension, application of any formulae percentages or factors for computation of commutation, gratuity and determination of residual to be paid as net pension in view whereof the creation of sub-classes with reference to those varying factors including the actual date of retirement leading to differential in the amounts of the pension of individuals retiring between period for which increases with different percentages were allowed was held to be justified in the judicial forums including the apex Court as a reasonable classification based on intelligible and rational differentia. Conversely the amount of the Special Additional Pension is uniform and determined on the basis of the Orderly Allowance admissible on the date of retirement of an officer belonging to a sub-class comprising Grades-20, 21 and 22, regardless of the grade that he retires in Government and, on the other hand, sanctioned Special Additional Pension equal to the admissible pre-retirement Orderly Allowance with effect from 19-2-1991 which then stood at Rs,1,000 as revised from Rs,800 on 17-12-1990.
(2) The Orderly Allowance has been revised for three times since then as following:--
(i) From Rs,1,000 p.m. To Rs,1,600 p.m. With effect from 1-7-1995 vide Finance Division's O.M. No,F.1(3)- Imp.II/89, dated 3-7-1995. (first revision).
(ii) From Rs,1,600 p.m. To Rs,1,900 p.m. Vide Finance Division's 0. M. No, F. 1(17)-Imp/97-(I), dated 26- 3-1997 (second revision).
(iii) From Rs,1,900 p.m. To Rs,2,375 p.m. Vide Finance Division's O.M. No,F.1(13)-Imp/96 dated 6-10- 2003 (third revision).
(3) It has, however, remained frozen at Rs,1,000, Rs,1,600 and Rs,2,375 respectively for those retiring between 19-2-1991 to 30-6-1995, 1-7-1995 to 30-6-2003 and 1-7-2003 to date. This has created further sub-diversion in the sub-class of those entitled for Special Additional Pension in the overall class of the retired officers compared with the other class of the serving officials which does not pass the touchstone of a reasonable classification based on an intelligible criterion for differentiation on two counts. Firstly there were revisions allowed in the pension in consideration for off-setting to some extent, the inflationary pressure though at a rate lower than the corresponding revisions in the pay scales but the Special Additional Pension element of the pension remained frozen. Secondly there does not appear to be any rational basis to discriminate in terms of the rates made applicable for pensioners retiring in those 3 periods or, for that matter, for future whenever the Orderly Allowance happens to be revised upward while the nature of the incentive envisaged in the original dispensation of Special Additional Pension remains unchanged i,e, providing an apparently reasonable subsidy for hiring orderly services. In the face of the revision in Pay Scales and also in the pensions from time to time, the appellant. Mr. Memon has worked out the increase in pay and allowances at 62% as against 5 to 15% increase in pension in the last revision in 2003.
(4) Contention of freezing the Special Additional Pension at the pre-retirement Orderly Allowance for good as built in para.2 of the O.M. Of the Finance Division dated 29-9-1991 with the result that there would never be any subsequent increase in that special element of the pension called additional is, therefore, both illogical and discriminatory as much as it was held to be discriminatory to deny this privilege of the Special Additional Pension to those retired before 19-2- 1991 by the apex Court vide its judgment in C.A. 423 of 1994 S.A.M. Wahidi v. Federation of Pakistan reported as 1999 SCMR 1904. A similar relief was allowed in C.A. No,60 of 2001 to Rao Fazal Khan Akhtar who had retired on 6-3-1989 and claimed the benefit of para.2 of the Finance Division O.M.
Dated 29-9-1991 for the first time in the year 1998.
(5) With regaru to the nexus of the differentia with the objectives too, denial of the periodic increases in the Special Additional Pension is equally unintelligible. In his contribution to the judgment of the Honourable Supreme Court in the case titled I.A. Sherwani v. Federation of Pakistan cited as 1991 SCMR 1041, Mr. Justice Rustam S. Sidhwa observed that:-- "6. Whilst the different pensions serve different and varying purposes, the first two pensions, i,e, the superannuation pension and the retirement pension serve three main purposes. First, it provides economic and social security to the Government employee during his old age and protects him from financial want and social despair. Second, it enables the Government employee to maintain himself at some level commensurate with the dignity of the post or office last held by him and thus, indirectly preserve the honour of the State. Third, it serves to attract and induce competent persons to join Government service, as opposed to private service, where security of tenure and retirement benefits are not so attractive, though salary and other terms may be more favourable, and also provides incentive to serving government employees for more better and sustained work in the face of rising inflation."
(6) Special Additional Pension was apparently intended to assist the higher echelon of the official hierarchy in maintaining a certain level of dignity commensurate with their post and office last held and enabling them to hire domestic assistance as an integral part of the combined effect of the other two objectives identified as economic and social well-being and impact on the overall morale of the Government servants duly fortified by a positive perception of the Government's benevolence and concern for the welfare of its employees. Freezing the rates for all times to come for retirees during a spell between the existing and the revised rates with its obvious implication of neglect and hurt felt by one set of retired employees, compared with another and yet another militates with the objectives of the original sanction as much as it offends the good sense. Such an approach can hardly be justified even on the grounds of the financial constraints because the financial impact of allowing Orderly Allowance retrospectively for Special Additional Pension involving a very limited number of the beneficiaries amongst the otherwise a multitudinous class of pensioners should certainly be nominal and bearable in relation to the overall additional burden inherent in each increase allowed in pension. In this overall context and justification for other increases in pension at whatever rates, allowed periodically, whether comparable with the revision in pay scales or lesser otherwise justified on the grounds of reasonable classification, the exclusion of Special Additional Pension altogether from any increase to be allowed subsequent to retirement is itself so vividly discriminatory.
14. In view of the foregoing, the appeals are accepted. The respondents are directed to accordingly amend para.2 of their O.M.1(2)/Reg(6)/91 of 29-9-1991 to read "on retirement, a Government officer in B-20, 21 and 22 would be allowed a special additional pension equal to Orderly Allowance as sanctioned from time to time" and apply it retrospectively with effect from 19-2-1991 the date from which it was originally sanctioned to purge it of the violation of Article 25 of the Constitution that it currently entails.
15. No order as to costs. Parties be informed accordingly.