The Supreme Court's division bench, presided over by Justices Aniruddha Bose and S. Ravindra Bhat, ruled that workers who left their jobs under the Voluntary Retirement Scheme (VRS) were not entitled to parity with those who left their jobs after reaching the retirement age for pay revision purposes.

The bench said that while maintaining that pay revision represents a greater public interest, "That on whether, and what should be the extent of pay revision, are undoubtedly matters falling within the domain of executive policy making".

The bench noted, while making clear that the court could not review the determination of the cut-off date for the grant of benefits, "what is within the domain of the court, is to examine the impact of such fixation and whether it results in discrimination." 

The bench further observed, "In the present case, too, there is no denial that the employees who retired prior to 29.03.2010 discharged the same duties as in the case of those who did thereafter. The quality and content of responsibilities assigned to them were the same. The respondents’ decision not to grant arrears prior to 01.01.2006 cannot be found fault with; however, not to grant any revision to those who were not in service when the order implementing the pay revision was issued and confining it to those, in employment is clearly discriminatory." 

"...there is no distinction between those who retired (or died in service) before 29.03.2010 and those who continued in service - and were given the pay revision. Those who worked during the period 01.01.2006 to 29.03.2010 and those who continued thereafter, fell in the same class, and a further distinction could not be made," the bench added. 

The court additionally ruled that it was against Article 14 of the Indian Constitution to exclude retired workers who took their retirement between January 1, 2006, and March 29, 2010, when they reached that date. 

The court did, however, establish an exception. It noticed, "However...employees who secured VRS benefits and left the service of MSFC voluntarily during this period, stand on a different footing. They cannot claim parity with those who worked continuously, discharged their functions, and thereafter superannuated. VRS employees chose to opt and leave the service of the corporation; they found the VRS offer beneficial to them...For the above reasons, it is held that VRS employees cannot claim parity with others who retired upon achieving the age of superannuation. Likewise, those who ceased to be in employment, for the reason of termination, or their dismissal, etc., would not be entitled to the benefit of pay revision."

Holding as such, the bench granted the appeal to the extent that those who left MSFC's employ between January 1, 2006, and March 29, 2010, as well as the legal heirs or representatives of those who passed away during that time, are entitled to arrears based on pay revisions that the Corporation has accepted. 

The decision of the Bombay High Court (Nagpur bench), which the Maharashtra State Financial Corporation Ex-Employees Association had challenged on the grounds that it was discriminatory and arbitrary, was the subject of the discussion before the court in this civil appeal.

Case Title: MAHARASHTRA STATE FINANCIAL CORPORATION EX-EMPLOYEES ASSOCIATION & ORS. VERSUS STATE OF MAHARASHTRA & ORS. 
Citation: CIVIL APPEAL NO(S). 778 OF 2023 @ SPECIAL LEAVE PETITION (CIVIL) NOS.1902 OF 2019

Appearance of the advocates:-

For Petitioner(s) 
Mr. Nitin S. Tambwekar, Adv.
Mr. Seshatalpa Sai Bandaru, AOR

For Respondent(s) 
Mr. Santosh Paul, Sr. Adv.
Mr. Sriharsh N. Bundela, Adv.
Mr. Akshay Kumar, Adv.
Mr. Maithreya Shetty, Adv.
Mr. M. J. Paul, AOR
Mr. Sachin Patil, Adv.
Mr. Siddharth Dharmadhikari, Adv.
Mr. Aaditya Aniruddha Pande, AOR
Mr. Bharat Bagla, Adv.
Ms. Kirti Dadheech, Adv.
Mr. Geo Joseph, Adv.
Mr. Risvi Muhammed, Adv.
Mr. Durgesh Gupta, Adv.