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Petitioner: FEDERATION OF PAKISTAN VS Respondent: I.A. SHERWANIHonorable Justice JUSTICE NAZIM HUSSAIN SIDDIQUI (CHAIRMAN)Makhdoom Ali Khan,Mehr Khan Malik
2005 P L C (C
2005 P L C (C.S.) 1029
[Shariat Appellate Jurisdiction]
Present: Justice Nazim Hussain Siddiqui, Ch airman, Justices Javed Iqbal, Tanvir Ahmed Khan, Dr. Allama Khalid Mehmood and Allama Rashid Ahmed Jullundhari, Members
FEDERATION OF PAKISTAN through Secretary, Ministry of Finance Government of Pakistan, Islamabad and others
Versus
I.A. SHERWANI and 3 others
Shariat Appeals Nos.4 to 7 of 1993, decided on 9th January, 2004.
(On appeal from the judgment, dated 14-10-1992 of Federal Shariat Court, passed in Shariat Petitions Nos. 63-1/1990, 67/1 of 1990, 18/I of 1991, 24/I of 1991).
(a) Civil Service---
----Pension---Import, object and scope---Right of pension depends upon statutory provisions regulating it, therefore, existence of such right or otherwise is determined primarily from the terms of the statute under which the right or privilege is granted---In general sense, the term `Pension' denotes to a grant after release from service---Pension is designed to assist the pensioner in providing for his daily wants and it presupposes the continued life after retirement.
New Encyclopaedia Britannica 15th Edn., Vol. 9, p.266 and Maaruful Qur'an by Hazrat Moulana Mufti Muhammad Shafi p.730 ref.
(a) Civil Servants Act (LXXI of 1973)---
----Ss.19 & 25(2)---Constitution of Pakistan (1973), Art. 203-F---Pension---Old and new pensioners---Classification---Un-Islamic and discriminatory---Doctrine of Adl and Ehsan---Applicability---Respondents being pensioners assailed classification of pensioners as `old pensioners' and `new pensioners' before Federal Shariat Court on the ground of its being against the injunctions of Islam---Petition was accepted by Federal Shariat Court and was declared the classification as discriminatory-Validity-While in service, the employees of any grade all the time did not get the same pay---Supreme Court quoted an example of an employee who entered into service earlier and got increments---Salary of such employee must be more than the employee who joined service in the same grade after a year of the earlier employee---While serving in same grade, when employees got different pays then how they could ask for computation of their pension in violation of Pension Rules in force on the retirement of civil servants---No contract existed between the pensioners and Government regarding terms/conditions relating to the change of rate of pension in future, as such the distinction between `old pensioner' and `new pensioner' could not be undone and each pensioner would get pay according to his entitlement under the law---Such distinction could not be termed as discriminatory---Pension was regarded as wealth and inequality in its distribution did not render it un-Islamic nor different rates could be termed as discriminatory---Quantum of pension was determined having taken into consideration; (i) the length of qualifying service (ii) emoluments drawn and (iii) as per rates prescribed in relevant rules---Rules of pension, as applicable to the retired civil servants of Pakistan were not contrary to the concept of `Adl' and `Ehsan' as enunciated in 'Islamic principles---Respondent had not assailed any specific provision of law and the judgment passed by Federal Shariat Court was simply of general nature highlighting the grievances of pensioners arising from inflation---Liberal interpretation of pension laws/rules rendering them totally ineffective was neither permissible nor possible---Ex facie, pension related laws were not inconsistent with or in derogation of fundamental rights---On the grounds of personal hardship, inconvenience, disliking and paucity of funds for decent living of a pensioner, the pension related laws, rules and regulations could not be altered, modified or struck down---Judgment passed by Federal Shariat Court, was set aside and the petition filed before Federal Shariat Court was dismissed---Appeal was allowed.
The Government of N.-W.F.P. through the Secretary to the Government of N.-W.F.P. Communications and Works Departments, Peshawar v. Muhammad Said Khan and another PLD 1973 SC 514; D.S. Nakara and other v. Union of India AIR 1983 SC 130; Pakistan v. Public-at-Large PLD 1986 SC 240; Government of N.-W.F.P. v. I.A. Sherwani and another PLD 1994 SC 72 and The Board of Trustees of the Federal Employees Benevolent and another v. Nazir Alam Shah 1996 SCMR 1073. ref.
(c) Civil Service---
----Pension---Revision of pay and scales---Effect---Pension of retired Government servants is not to be re-calculated on revision of pay and scale of serving employees---Benefit given to a person in employment cannot be claimed by pensioner as a matter of right.
Makhdoom Ali Khan, Attorney-General for Pakistan for Appellants.
Respondents in person with Mehr Khan Malik, Advocate-on-Record.
Dates of hearing: 1st and 2nd December, 2003.
JUDGMENT
JUSTICE NAZIM HUSSAIN SIDDIQUI (CHAIRMAN).-------This judgment will dispose of above titled Shariat Appeals in which common questions of facts and law are involved.
2. The appellants of these matters have impugned the judgment, dated 14-10-1992 of learned Federal Shariat Court, Islamabad delivered in Shariat Petitions Nos.63/I of 1990, 67/I of 1990, 18/I of 1991, 24/I of 1991, whereby the same were allowed in terms of the following observations:-
"35. We are of the considered opinion that the division of pensioners, into new and old pensioners is also discriminatory. Actually pensioner is a pensioner irrespective of the date on which he retired and whenever there is any revision of salary or pension each one of the pensioners is entitled to get pension equal to the other in the same grade or category. It transpires that section 19 of Civil Servants Act is being implemented by the Government in respect of different pensioners not keeping in view the principle of "Adl" and "Ihsan". We are of the opinion that the aforesaid impugned notifications of the years 1985 and 1986 are inconsistent with the Injunctions of Islam inasmuch as the principles of "Adl" and "Ihsan" have been overlooked. We will direct that Regulation 4 of the Civil Services Regulations be also brought in conformity with the Injunctions of Islam.
36. The judgment shall take effect after 6 months from today."
3. In above titled appeals, the respondents are I.A. Sherwani (in Shariat Appeal No.4 of 1993), Major, M. Yousuf Khan, Naib Subed. Jalil Khan, Dafedar Muhammad Sher, Naik Sher Hassan, Naik Moin Khan, Qazi Waheed-ud-Din and Ishaq Ahmed (in Shariat Appeal No.5 of 1993), Major General (Retd.) Shiren Dil Khan Niazi and Col. (Retd.) Amir Nawaz (in Appeal No.6 of 1993) and Fazal Illahi (in Shariat Appeal No.7 of 1993). All above named have retired from service on various dates and in different grades from their respective departments.
4. These matters related to grant of pension. In the notifications issued in the years 1985 and 1986 by the Government two terms namely "old pensioners" and "new pensioners" have been used. The respondents have been placed within the ambit of "old pensioners". They not only impugned the correctness, proprietary and legality of above terms but also pleaded that the difference between the rates of "new pensioners" and "old pensioners" is inconsistent with the Injunctions of Islam as laid down in Holy Qur'an and Sunnah.
5. The crucial point raised before Federal Shariat Court was whether the Government servants of the same grade, who retired on different dates, could claim the same amount as pension.
6. According to Civil Services Regulations (CSR), the Regulation No.4 empowers the Government to reserve the right of changing the rules of these Regulations regarding pay and acting allowances and leave and pension from time to time at its discretion, and of interpreting their meaning in case of dispute. The Government has exercised this power keeping in view the circumstances at different times. As per CSR by Messrs Hamid Ali and Zaka Ali, Advocates at page 134 of Revised Edition 2002, the pensions are divided in four classes namely:---
(a) Compensation pension, (b) Invalid pension, (c) Superannuation pension, (d) Retiring pension.
7. Presently, we are concerned with the Superannuation/retired pension, which is granted to a civil servant on reaching a particular age. As per Regulation 486, the term "emoluments" means the emoluments which the Officer was receiving immediately before his retirement and, shall including the:---
(a) Pay as defined in FR 9(21)(a)(1); (b) Senior Post Allowance; (c) Special Pay of all types and nature; (d) Personal Pay; (e) Technical Pay; (f) Dearness Allowance; (g) Increments accrued during leave preparatory to retirement; (h) Any other emoluments, which may be specially classed as Pay.
And the term, as per Regulations 487 "Average Emoluments" means the average calculated upon last three years of service.
8. Section 19 of the Civil Servants Act, 1973 speaks about pension and gratuity and section 25 empowers the President or any person authorized by him on this behalf to make such rules as appears to him necessary or expedient for carrying out the purposes of this Act. Pension is acquired after putting in satisfactory service for the prescribed minimum period. It could not be reduced or revised arbitrarily, except to the extent and in the manner provided in the relevant rules.
9. As a rule, the right of pension depends upon statutory provisions regulating it, therefore, the existence of such right or otherwise is determined primarily from the terms of the statute under which the right or privilege is granted. In general sense the term "Pension" denotes to a grant after release from service. It is designed to assist the petitioner in providing for his daily wants and it presupposes the continued life after retirement. In the New Encyclopaedia Britannica Vol.9, 15th Edition at page 266 the following is laid down for the term "pension":---
"Pension, series of periodic money payments to a person who retires from employment because of age, disability, or the completion of an agreed span of service. The payments usually continue for the rest of the natural life of the recipient, and sometimes to a widow or other survivor. Military pensions have existed for many centuries, private pension plans originated in Europe during the 19th century.
Eligibility for and amounts of benefits are based on a variety of factors, including length based on a variety of factors, including length of employment, age, earnings, and, in some cases, past contributions."
In Maaruful Qur'an by Hazrat Moulana Mufti Muhammad Shafi at page 730 regarding Islamic System of Distribution of Wealth, the following was observed:---
Urdu 1033
11. Mr. Makhdoom Ali Khan, Attorney-General for Pakistan assisted by Hafiz S.A. Rehman, Deputy attorney-General, appearing for the appellants submitted that respondent I.A. Sherwani had raised similar points before this Court in Constitutional Petition No.15(R) of 1989 and main demand therein was that the pensioners be allowed their pensions to be revised on Pay scales revised by Federal Government from time to time after their retirement. Above referred petition was heard along with two identical petitions and following verdict was recorded by this Court.
"33. We would, therefore, allow the above petitions to the extent of declaring that denial of additional benefits of 2% of pension for each year of service exceeding 30 years subject to maximum of 10% of pension sanctioned referred to hereinabove in para. 19(a)(xvii) to the pensioners who retired prior to 1-7-1986, and denial to the petitioner in C.P. No.5-R of 1990 of the benefit under P.O. No.5 of 1988 referred to hereinabove in para.19(b)(vi) on the ground that he retired prior to 1-7-1987 founded on above eligibility criteria as to the date of retirement, being discriminatory and violative of Article 25, they other entitled to the same (if not already granted) pensioners are paid."
Learned Attorney-General submitted that above judgment of this Court was implemented from 1-7-1986 and arrears from above date onward were paid. He also submitted that the civil servants are entitled to pension on retirement in terms of sections 19 and 25(2) of Civil Servants Act, 1973. He contended that CSR were in existence before the commencement of Civil Servants Act, 1973, therefore, CSR are to taken as rules under the said Act. He particularly referred to the terms pay as defined in FR-9/21 i.e. the amount drawn monthly by a civil servant. He strenuously argued that pensions of retired Government servants, as per rules, are not re-calculated on revision of pay scales of serving employees. He stated that the Government is conscious of welfare of the pensioners and has improved their retirement benefits from time to time in the following manner, in spite of the fact that there is no provision in the rules to allow increase in pension of the retired Government servant:---
(1) Upto 30-6-1966, pensions were calculated on 50% of average emoluments drawn during the last 36 months on completion of 30 years service qualifying for pension. From 1-7-1966 the percentage was raised from 50% to 60% of the average emoluments. Those who had retired prior to 1-7-1966 were allowed to get their pension re-calculated or to enjoy increase on their pension sanctioned from 1-4-1964.
(2) Under Liberalized Pension Rules for Civil Servants introduced in 1977, the Government servants retired on or after 1-3-1972 after a service of 30 years were allowed to get their pension re-calculated @ 70% of average emoluments or continue to draw Pension under the then existing formula of 60% of average emoluments with following increases already admissible as to them:
Rate of increase Date of effect
(i) (a) Gross pension not exceeding Rs.50/- 1-6-1973
ad hoc increase @ 20% subject to minimum of Rs.5
(b) 15% of gross pension subject to minimum of Rs.10 for pensions between Rs.51 to Rs.100
(c) 15% of gross pension subject to minimum of Rs.30 on pensions upto Rs.500 with marginal adjustment upto Rs.530.
(ii) 15% of gross pension not exceeding 1-8-1973 Rs.700 subject to maximum of Rs.35
(iii) 15% of gross pension subject to a 8-6-1974
maximum of Rs. 100
(iv) 10% of gross pension subject to a 7-4-1975
maximum of Rs.25 p.m.
Pensioners who had retired before 1-3-1972 were entitled to have their retirement pensions re-calculated in accordance with one of the following alternatives whichever was more favourable to them;
The amount of their pensions shall be calculated at the rate of 70% of average emoluments on completion of 30 years qualifying service without dearness increases sanctioned before 1st February, 1977. They may continue to receive existing pension and increase with following additional benefits:---
(1) An increase of 5% in the case of an employee who retired between 1st July, 1963 and 29th February, 1972 or 12-1/2 per cent in the case of an employee who retired upto 30th June, 1963 over his existing gross pension, plus dearness increases admissible thereon.
(2) From 1-7-1980 the Government servants retired upto 30-6-1980 were given the following gradewise increases:--
Grade 1 to 10
Rs.40 p.m.
Grade 11 to 16
Rs.70 p.m.
Grade 17 to 18
Rs.100 p.m.
Grade 19 to 20
Rs.150 p.m.
Grade 21 to 22
Rs.200 p.m.
(3) From 1-7-1981 an increase of 10% of gross pension subject to maximum of Rs.200 p.m. to those retired upto 31-12-1982.
(4) From 1-7-1982 an increase of 10% of gross pension subject to maximum of Rs.200 p.m. to those retired upto 30-6-1983.
(5) From 1-7-1983, the following benefits were given:---
(i) Dearness increase @ 10% of gross pension subject to maximum of Rs.200 to those retired up to 30-6-1983.
(ii) Family pension of widow was made for life. Previously it was admissible for five years upto 29-2-1972 and for 10 years thereafter. Also see sub-para. (6)(iv) below in case of widows whose pension ceased due to expiry of 5/10 years.
(iii) Prior to 1-7-1983 the concept of ordinary family pension did not exist for Armed Forces pensioners upto the rank of Junior Commissioned Officers. The families of such personnel retiring on or after 1-7-1983 were allowed family pension as admissible on civil side.
(6) From 1-7-1985 following benefits were allowed:---
(i) Pensioners retired upto 31-12-1985 were given indexation on pension @ 13-1/2% of gross pension upto Rs.1500 and 10% of gross pension above Rs. 1500 to those retired upto 31-12-1985.
(ii) Prior to 1-7-1985 pensions were subject to 50% reduction after Rs.600, 1000, 2000, 2500 during 1-7-1966 to 29-2-1972, 1-3-1972, 30-6-1985 respectively. The above cut-off points were removed from 1-7-1985. This benefit was also. allowed to all those retired prior to 1-7-1985 and widows whose husbands retired or died prior to 1-7-1985. No arrears were allowed prior to 1-7-1985.
(iii) There was no concept of restoration of pensions surrendered for commutation/gratuity if the pensioners concerned out-live the prescribed period.
From 1-7-1985 1/4th of gross pension surrendered for commutation was made restorable to the pensioners who out-live the period for which it was allowed but no arrears were allowed prior to 1-7-1985. Also see items 7(ii) and 12.
(iv) The family pension of widows which ceased prior to 1-7-1983 after expiry of prescribed period of 5/10 years and in cases where pension was not admissible as the retired/deceased Government servant had already availed pension- for 5/10 years were also allowed family pension for life or until remarriage.
(7) From 1-7-1986 following benefits were allowed:
(i) Those retired upto 31-12-1985 were given indexation @ 4-1/2% of gross pension upto 1500 and 3-1/2% of gross pension above Rs.1500. Those retired between 1-1-1986 and 30-6-1986 were given indexation @ 4% of gross pension upto Rs.1500,and 3% of gross pension above Rs.1500 or indexation on pension at the rate applicable had they retired on or before 1-1-1986.
(ii) 1/4th of the pension surrendered for gratuity i.e. where commutation was not availed was also made restorable from 1-7-1986 to the pensioners who outlive the period for which it was allowed.
(iii) Initially Government servants retired on or after 1-7-1986 were entitled to additional benefit @ 2% of pension for each year of service put in after 30 years service subject to maximum 10% of gross pension. This was subsequently extended to those retired prior to 1-7-1986.
(8) From 1-7-1987 following benefits were allowed to pensioners:---
(i) Indexation on pension @ 4% of gross pension to those retired upto 30-6-1987.
(ii) The widows of Government servants who died prior to introduction of pension-cum-gratuity scheme, 1954 were also allowed family pension from 1-7-1987 if the deceased had rendered pensionable service.
(iii) The widows of Armed Forces personnel upto the Rank of Junior Commissioned Officers who retired/died prior to 1-7-1983 were also allowed ordinary family pension for life or until remarriage.
Those retired and died after 1-7-1983 were already entitled to family pension (item 5(iii) above.
(9) From 1-7-1988 following benefits were given to the old pensioners:---
(i) Indexation on pension @ 7% of gross pension to those retired upto 30-6-1988.
(ii) The widows who were granted family pension from 1-7-1985 (item 6 above) were also allowed the dearness increases on their pensions.
(iii) From 1-7-1988 no gross pension of a retired Government servant would be less than Rs.300 p.m.
(10) From 1-7-1990 5% of pension to all retired upto 30-6-1991.
(11) Government servants retired prior to 1-7-1986 have been allowed the benefit to the extent of 2% of gross pension for each extra year of service beyond 30 years qualifying service subject to a maximum of 10% of gross pension (orders issued on 13-6-1991).
(12) From 1-7-1991, one fourth of gross pension surrendered in lieu of gratuity, in addition to commutation, has been allowed to be restored, after outliving the period for which gratuity was allowed.
(13) From 1-7-1991 Government servants retired prior to 1-5-1977 have been allowed dearness increases @ 12% and those retired from 1-5-1977 @ 12%.
3. In the light of above, present gross pension of an officer retired in March, 1977 after drawing maximum of B-20 for 3 years and after service of 35 years has risen from Rs. 1410 p.m. to Rs.3,997.69 p.m. as under:---
1.
Gross pension for 30 years service on 31-3-1977
Rs.1410
2.
Grade-wise increase from 1-7-1980
Rs.150
3.
10% of above 2 items from 1-7-1981
Rs.156
4.
10% of above 3 items from 1-7-1982
Rs.171/60
5.
From 1-7-1985 restoration of cut-off or 410 (imposed at the time of retirement)
Rs.410
6.
10% of above 5 items from 1-7-1985
Rs.229/76
7.
3-1/2% of first five items from 1-7-1986
Rs.80/41
8.
4% of first five items
Rs.91.90
9.
7% of first five items
Rs.160.83
10.
5% of first five items
Rs.114.88
11.
From 1-7-1986 benefit of 2% of items 1 and 5 above for each year of service put in after 30 years service subject to maximum of 10% with increases items 7 to 10 above.
R.217.49
12.
32% of first five items and items 11
Rs.804.32
Total
Rs.3,997.69
Grant of 5% additional benefit from 1-7-1990 in pension involves expenditure of Rs.570.65 million and benefit of Rs.200 p.m. from 1-7-1990 involves additional expenditure of Rs.2,581.46 million on 10,75,607 pensioners. For this additional expenditure Government will have to levy additional taxes, which will increase prices affecting entire population of the country.
He also submitted that the term pension though found mentioned in various statutes viz. Pension Act, 1871, C.P.C., Civil Servants Act etc. but it has not been defined in these laws. He stated that pension is payable to a civil servant on his retirement on the basis of (1) length of qualifying service (2) emoluments drawn and (3) as per rates prescribed in relevant rules. He also argued that the Government even has a right to withhold or reduce pension, as per rules.
12. During the course of arguments the following cases were referred:---
(1) The Government of N.-W.F.P. through the Secretary to the Government of N.-W.F.P. Communications and Works Departments, Peshawar v. Muhammad Said Khan and another PLD 1973 SC 514.
(2) D.S. Nakara and others v. Union of India AIR 1983 SC 130.
(3) Pakistan v. Public-at-Large PLD 1986 SC 240.
(4) Government of N.-W.F.P. v. LA. Sherwani and another PLD 1994 SC 72.
(5) The Board of Trustees of the Federal Employees Benevolent and another v. Nazir Alam Shah 1996 SCMR 1073.
In the case referred to at Serial No.1, it was held that pension is no longer a bounty but a right and it cannot be reduced arbitrarily.
In the case at Serial No.2, Article 14 of the Constitution of India was under discussion. It forbids class legislation but permits reasonable classification for the purpose of legislation, which classification must satisfy the twin tests of classification being founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the subject sought to be achieved by the statutes in question.
In the case at Serial No.3, a Shariat Appellate Bench of this Court, comprising five Hon'ble Judges interpreted the phrase. `Injunction of Islam' with reference to the Article 203(b)(d)(e) of the Constitution.: of Islamic Republic of Pakistan and the matter was remanded to Federal Shariat Court for fresh decision in accordance with the principles enunciated in said judgment.
In the case at Serial No.4, while interpreting Rules 53 of the Fundamental Rules, it was held that Rule 53 and rules mentioned at Serial No.106 and all the parallel rules of the Provinces were repugnant to Injunction of Islam to the extent that they deprived Government Servants of their full salary and other benefits during the period of suspension and that suspended Government Servant was entitled to full amount of his salary and all other benefits and facilities provided to him under the Contract of service.
In the case at Serial No.5 the following was held:---
"There can be two classes of civil servants, one who are in employment and the others who have retired. If a benefit is given to the persons in employment, which is not extended to the pensioners, then it will not amount to discrimination as both of them belong to different classes, and such classification is reasonable. Such classification will be based on intelligible differentia which distinguishes persons or things that are grouped together from those who have been left out. Such differentia has rational nexus to the object sought to be achieved by such classification."
13. It was contended on behalf of the respondents before learned Federal Shariat Court that pensioner is a pensioner' and there could be no classification as "old pensioner" and "new pensioner". This plea was accepted by…
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