Rajasthan High Court – Jaipur
Rfc Retired Officers And Employees … vs State Of Rajasthan on 19 February, 2026
[2026:RJ-JP:2305-DB] (1 of 37) [CW-1791/2024]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Civil Writ Petition No. 1791/2024
RFC Retired Officers And Employees Association, through its
President Shri Govind Singh S/o Late Shri B.R. Singh 630, Barkat
Nagar, Tonk Phatak, Jaipur.
----Petitioner
Versus
1. State of Rajasthan through Additional Chief Secretary,
Department of Industries, Government of Rajasthan,
Government Secretariat, Jaipur.
2. The Chairman, Rajasthan Financial Corporation, Udyog
Bhawan Tilak Marg, Jaipur.
3. The Managing Director, Rajasthan Financial Corporation,
Udhyog Bhawan, Tilak Marg, Jaipur.
4. The Small Industries Development Bank of India,
Swavalamban Bhawan, C-11 G-Block, Bandra-Kurla
Complex Bandra, Mumbai 4000051 Through Its General
Manager.
----Respondents
Connected With
D.B. Civil Writ Petition No. 18016/2023
Roor Mal Aswal S/o Late Shri M.R. Aswal, Aged About 69 Years,
Resident of A/347, Vaishali Nagar, Jaipur (Raj.)
—-Petitioner
Versus
1. State of Rajasthan through its Principal Secretary,
Industries Department, Government of Rajasthan,
Government Secretariat, Jaipur.
2. The Managing Director, Rajasthan Financial Corporation,
Udhyog Bhawan, Tilak Marg, Jaipur.
----Respondents
For Petitioner(s) : Mr. Sandeep Saxena
Mr. Ashwinee Kumar Jaiman
Mr. Dharam Veer Jashmani
For Respondent(s) : Mr. B.S. Chhaba, AAG with
Mr. Rahul Gupta, AAAG,
Mr. Hardik Singh, AAAG
Mr. Satyam Bhardwaj,
Mr. Virendra Lodha, Sr. Adv. with
Mr. Ankit Rathore
Mr. Ramdhan, Asst. G.C. and
Ms. Shruti Pareek, Asst. G.C.
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (2 of 37) [CW-1791/2024]
HON'BLE MR. JUSTICE INDERJEET SINGH
HON'BLE MR. JUSTICE RAVI CHIRANIA
Judgment
1. Date of conclusion of Arguments 19.01.2026
2. Date on which the judgment was reserved 19.01.2026
3. Whether the full judgment or only operative Full
part is pronounced
4. Date of pronouncement 19.02.2026
REPORTABLE
Per Hon'ble Ravi Chirania, J.
1. By this common Order, this Court is deciding the two
connected writ petitions, D.B. Civil Writ Petition No.1719/2024
titled as RFC Retired Officers and Employees Association and Ors.
Vs. State of Rajasthan and Ors., and D.B. Civil Writ Petition
No.18016/2023, titled as Roor Mal Aswal vs. State of Rajasthan &
Anr.
2. The issue involved in both the writ petitions is common,
therefore, the facts are also common and the petitioners are
aggrieved by the same controversy related to the issue of
withdrawal of Pension Regulations in respect of Officers and
Employees of the Rajasthan Financial Corporation.
3. For deciding the controversy, the facts of D.B. Civil Writ
Petition No.18016/2023 are taken as lead case to decide the issue
as involved.
4. The brief facts, as pointed out and noted from the pleadings
of the case and as argued by learned counsel for the petitioner,
Mr. Ashwinee Kumar Jaiman, are that the petitioner-Roor Mal
Aswal was appointed as a Deputy Manager in the Rajasthan
Financial Corporation (hereinafter referred to as ‘RFC’ for short) in
the year 1980 and retired from service in the year 2014 on
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (3 of 37) [CW-1791/2024]
attaining the age of superannuation. The respondent-RFC
promulgated the Pension Regulations for its employees named as
The Rajasthan Financial Corporation Employees’ Pension
Regulations, 1990 (hereinafter referred to as ‘Pension
Regulations of 1990’ for short), which were made effective from
01.04.1987.
5. The grievance of the petitioner, as raised in the prayer of the
writ petition is that the respondent – RFC by the impugned
notification dated 09.06.2020 (Annexure-1) notified the decision
to withdraw the Pension Regulations of 1990 with retrospective
effect from 21.06.2004 and declared that the employees would be
entitled for the benefit of Contributory Provident Fund (CPF)
Scheme under the Rajasthan Financial Corporation Employees’
Provident Fund Regulations, 1958.
6. Learned counsel for the petitioner, Mr. Ashwinee Kumar
Jaiman, submitted that the issue of entitlement of pension to the
Officers and Employees of the respondent-RFC is into litigation
since the year 2004. He further submitted that in the year 2004,
the respondent-RFC issued an Office order dated 12.08.2004,
whereby a decision was taken to withdraw the Pension Regulations
of 1990. The said Office order dated 12.08.2004 was challenged
before learned Single Judge of this Court by S.B. Civil Writ Petition
No. 870/2005 However, the learned Single Judge dismissed the
writ petition, against which special appeal was preferred before
the Co-ordinate Bench of this Court. The Co-ordinate Bench
examined the provisions of the Pension Regulations of 1990 in the
light of Section 48 of the State Financial Corporation Act, 1951
(hereinafter referred to as ‘Act of 1951’ for short). For deciding
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (4 of 37) [CW-1791/2024]
the issue, the Co-ordinate Bench divided the Employees of RFC
into three categories in the judgment dated 07.05.2018. The
relevant paras of the judgment passed in D.B. Special Appeal Writ
No.669/2017 titled as V.K. Gupta and Ors. Vs. State of
Rajasthan and connected matters1 along with the connected
appeals, are reproduced here as under:-
“The question now comes that if the order dated
12.8.2004 is set aside then what would be the
consequence? The argument raised by learned counsel
for the petitioners that Pension Regulations of 1990
would remain in force. We are in agreement with the
learned counsel for the petitioners because if order
dated 12.8.2004 goes, the Pension Regulations of 1990
survive till its withdrawal by applying the procedure
given under Section 48 of the Act of 1951. A further
question would be as to how the employees would be
governed, if the order dated 12.8.2004 goes. We have
to take into consideration three sets of employees and,
accordingly, the issue aforesaid has to be dealt with.
We categorise the employees and officers of the RFC In
three categories, as follows:-
Category-I
Those who retired prior to the order dated 12.8.2004
would be governed by the Pension unless the family or
the retired employee opted for CPF Scheme. It may be
under guidance or misguidance pursuant to the order
dated 12.8.2004. It is more so when such an employee
has accepted the benefits of CPF Scheme. Thus, so far
as first category of the employees are concerned, those
retired prior to 12.8.2004 would be governed by the
Pension Scheme under the Regulations of 1990 unless
accepted CPF Scheme with consequential benefits. It
has otherwise been provided by the Corporation in the
order dated 12.8.2004, thus even if the order aforesaid
is Interfered, the outcome would remain the same.
Category-II
The second category would be of those who retired
after 12.8.2004 but opted for Pension Scheme (prior to
1. D.B. Civil Writ Petition No.669/2017 dated 07.05.2018
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (5 of 37) [CW-1791/2024]retirement under the Pension Regulations of 1990. It is
by an option or by compulsory application of the
Pension Scheme as per Regulation 7 of the Regulations
of 1990. Since the order dated 12.8.2004 goes, they
would be governed by the Pension Regulations of 1990
unless they have opted for CPF Scheme. This would
take care of set of employees who did not withdraw
themselves from the Pension Scheme. The RFC has,
however, extended the benefit of CPF and accordingly
sent the cheques. If the amount was withdrawn by the
retired employees without a protest or returning the
cheque/amount with an objection before filing the writ
petitions, they would not be entitled to pensionary
benefits leaving those who returned the amount
immediately on receipt in protest to govern them by
the CPF Scheme. The direction aforesaid has been
given in the light of the provisions of the Pension
Regulations of 1990 itself which keeps even CPF
Scheme alive.
It was not necessary for all the employees to govern
themselves by the pensionary Scheme but could have
retained themselves under the CPF Scheme though by
giving option for it. Accordingly, while the Pension
Regulations of 1990 survive, the CPF Scheme also
remains alive. e. Accordingly, Accor the RFC is directed
to extend pensionary benefits under the Pension
Regulations of 1990 to those who retired after
12.8.2004 unless they opted for CPF Scheme or
accepted the amount towards CPF without protest and
accordingly it was not returned. It would be taken
towards acceptance of CPF Scheme and, therefore,
only writ petitions were filed after lapse of few years.
Category-III
The third category of the petitions are those who are
still in service. The question is as to whether they can
be governed by the Pension Regulations of 1990. Since
we have recorded finding that Pension Regulations of
1990 remain in effect In view of quashing of the order
dated 12.8.2004, thus whoever has opted for the
Pension Scheme, would continue unless the RFC
withdraws or amend the Pension Regulations of 1990
by applying the procedure given under Section 48 of
the Act of 1951. Thus, third set of employees would be
governed accordingly if they have not opted for CPF
Scheme. It is subject to the rider that the Pension
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (6 of 37) [CW-1791/2024]
Regulations of 1990 are not withdrawn by applying the
procedure given under Section 48 of the Act of 1951.
In view of the aforesaid, three categories of
employees/officers would be governed by the
directions and observation made above.
The RFC is accordingly directed to make scrutiny of
each case for extension of benefits, as are admissible
in pursuance to the discussion, observation and
directions given by this court in the paras above by
dividing the officials in three categories. In view of the
directions aforesaid, the order passed by learned
Single Judge is interfered and is accordingly set aside.
The parties would now be governed by the directions
given in this judgment.
All the appeals are disposed of accordingly.”
7. Learned counsel further submitted that the present
petitioners fall in the II category as mentioned in the
judgment passed by the co-ordinate Bench in the case of V.K.
Gupta (supra). More specifically, the petitioners are those
persons, who retired after 12.08.2004, however they opted for
the pension scheme under the Pension Regulations of 1990
prior to their retirement from the services of the
respondent RFC. He further submitted that the judgment passed
by the Co-ordinate Bench in the case of V.K. Gupta (supra) was
challenged by the respondents-State Government as well as RFC
before the Hon’ble Apex Court, but the Hon’ble Apex Court refused
to interfere with the said judgment and dismissed the Special
Leave Petitions.
8. Learned counsel further submitted that after failing to get
any relief before the Hon’ble Supreme Court, the respondent-RFC
filed a Review Petition No.190/2018 before the Co-ordinate Bench,
seeking review of the order dated 07.05.2018. The Co-ordinate
Bench after hearing learned counsel for the respective parties,
disposed of the Review Petition vide order dated 15.11.2018.
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (7 of 37) [CW-1791/2024]
9. By the said order dated 15.11.2018, the Co-ordinate
Bench refused to review its order in respect of Categories I
and II as mentioned in the judgment dated 07.05.2018,
however, since the respondent-RFC had issued a notification dated
21.07.2017 after complying with the provisions of Section 48 of
the Act of 1951 and was also under challenge before the learned
Single Judge of this Court, therefore, the Co-ordinate Bench
reviewed its order dated 07.05.2018 only in respect of the
Officers and Employees falling under III Category. The
relevant para of the judgment dated 15.11.2018, passed in review
petition filed by the respondent-RFC, titled as RFC Officers
Association & Anr. vs. State of Rajasthan & Anr. 2, as referred
by the counsel for the petitioners, is reproduced here as under:-
“The third category is of those employees, who were
in service. Since the order dated 12th August, 2004
was nullified by this court, the employees in service
were ordered to be governed by the Regulations of
1990 unless it is withdrawn by applying the procedure
given under Section 48 of the Act of 1951.
Learned counsel for RFC submits that a Notification for
withdrawal of the Regulations of 1990 was issued
subsequent to disposal of the writ petitions but during
pendency of the special appeals. The Notification
dated 21 July 2017 was issued after complying
Section 48 of the Act of 1951. The reference of the
said Notification has not been made in the judgment
sought to be reviewed with necessary finding. It is
moreso when withdrawal of the Regulations of 1990
vide Notification dated 21 July, 2017 has been made
w.e.f. 12th August, 2004.
We have considered the issue aforesaid but find
no ground for review of the order even in
reference to the Notification dated 21 July,
2017. This court, while dealing with the issue in
reference to the employees falling in third
2 D.B. Writ Review No 190/2018 dated 15.11.2018(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (8 of 37) [CW-1791/2024]category, made it clear to continue them under
the Regulations of 1990 unless withdrawn by
applying the procedure given under Section 48
of the Act of 1951. In view of the above, we do not
find any reason to review the order when it is clear in
its terms. It is, otherwise, informed that the
Notification dated 21 July, 2017 has been challenged
by maintaining a separate writ petition. The issue in
reference to the Notification would be determined in
the said writ petition.
The review petition is disposed of with the aforesaid.
It is, however, with the clarification that while dealing
with the issues pertaining to employees falling in
second category, the word “GPF” has been mentioned
as “CPF” at some places due to typographical error. It
has been corrected in a separate order passed today
on the misc. application preferred by the employees.
Accordingly, the order aforesaid would apply to the
present order also.”
10. Learned counsel further submitted that as the order was
reviewed only to the extent of the III category of Officers and
Employees and therefore, the issue in respect of petitioners
herein, who belong to II category attained finality as the issue was
no more res integra in terms of the judicial pronouncements of
this Court, which has attained finality after the challenge failed
before the Hon’ble Apex Court. He further submitted that even the
Notification dated 21.07.2017, as issued in respect of III category
of employees, challenged by D.B. Civil Writ Petition No.4375/2018
titled as Sudeep Kumar Pokharna & Anr. vs. Rajasthan
Financial Corporation & Anr.3, decided by judgment/order
dated 26.02.2020, was also quashed and set aside. The relevant
para of the order/judgment dated 26.02.2020 is reproduced as
under:-
3. D.B. Civil Writ Petition No.4375/2018 dated 26.02.2020
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (9 of 37) [CW-1791/2024]“Thus, as per the above provision, the Board has
power to make regulations. Admittedly, Pension
Regulations of 1990 were formulated by complying
with the procedure given under Section 48 of the Act,
after consultations with SIDBI and with previous
approval of the State Government. Thereafter
notification was published. It was observed by the
Division Bench while passing the order dated
07.05.2018 that to withdraw the Pension Regulations
of 1990, procedure given under Section 48 of the Act
had not been followed.
Review petition filed against the order or dated
07.05.2018 was dismissed vide order dated
15.11.2018. SLP filed by the Corporation was
dismissed vide order dated 28.01.2019. Review
petition against the said order was dismissed vide
order dated 03.04.2019. Since the order dated
12.08.2004 passed in pursuance to resolution dated
21.06.2004 has been set aside, the Impugned
notification issued in pursuance to the Board resolution
dated 21.06.2004 is also liable to be set aside because
the base of impugned notification has already been set
aside.
Accordingly, writ petition is allowed. Impugned
notification dated 21.07.2017 is quashed. However,
the respondent-Corporation would be at liberty to
proceed afresh in accordance with law.”
11. A perusal of the order dated 26.02.2020 shows that the co-
ordinate Bench in the case of III category of employees granted
liberty to the respondent-RFC to proceed afresh process in
accordance with law.
12. He further submitted that even after the controversy in
respect of employees of category I & II attained finality,
surprisingly, the respondent – RFC misinterpreting and by misusing
the liberty as granted by the Co-ordinate Bench of this Court in
case of Sudeep Kumar (supra), granted vide order dated
26.02.2020, where the issue of only III category of employees
was under challenge, issued the impugned notification dated
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (10 of 37) [CW-1791/2024]
09.06.2020, by which the respondents have again ordered for
withdrawal of the Pension Regulation of 1990 with effect from
21.06.2004 with retrospective for all the three categories. Learned
counsel for the petitioner submitted that the Notification dated
09.06.2020 was issued on the basis of Board Meeting of
respondent-RFC and the decision as was taken in the Meeting, by
the respondent-RFC, dated 18.03.2020, where the Board, after
discussing the previous litigation of III category of employees,
who were involved and after taking the legal opinion, took the
following decision, which is reproduced as under:-
“Litigation arose due to withdrawal of Pension
Scheme
i) On withdrawal of the pension scheme the RFC
Officers Association as well as RFC Employees
Federation and other employees of the Corporation
approached to the Hon’ble High Court during the year
2005 Onwards by way of filing of different writ
petitions challenging validity of withdrawal of the
pension scheme. All these writ petitions were dismissed
by the Hon’ble High Court on 02.03.2017 pronouncing
that Section 48 of the SFCs Act, 1951 empowers the
board to make such scheme with the approval of SIDBI
and the State Govt. and the withdrawal of pension
scheme is absolutely in accordance with law.
Therefore, the Corporation issued notification for
withdrawal of pension scheme on 21.07.2017.
ii) That being aggrieved against the said decision RFC
Officers Association filed special appeal before Hon’ble
Division Bench (SAW 659/2017). The Hon’ble Division
Bench decided the cases on 07 05.2018 by setting
aside the withdrawal of the Pension Regulations of
1990 on the ground that compliance of Sec. 48 of the
SFCs Act, 1951 have not been followed by the
Corporation while withdrawing the said Regulation and
also categorized the employees & officers of the
Corporation in following three categories regarding
their entitlement for the Pension Scheme.
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (11 of 37) [CW-1791/2024]
Category-I: Those who retired prior to the order
dated 12.08.2004 would be governed by the Pension
Regulations of 1990 unless the family of the retired
employee opted for CPF Scheme. It may be under
guidance or misguidance pursuant to the order dated
12.08.2004. It is more so when such an employee has
accepted the benefits of CPF Scheme. Thus, so far as
first category of the employees are concerned, those
retired prior to 12.08.2004 would be governed by the
Pension Scheme under the Regulations of 1990 unless
accepted CPF scheme with consequential benefits. It
has otherwise been provided by the Corporation in the
order dated 12.08.2004, thus even if the order
aforesaid is interfered; the outcome would remain the
same.
Category-II: The second category would be of those
who retired after 12.08.2004 but opted for Pension
Scheme prior to retirement under the Pension
Regulations of 1990. It is by an option or by
compulsory application of the Pension Scheme as per
Regulation 7 of the Regulations of 1990. Since the
order dated 12.08.2004 goes they would be governed
by the Pension Regulations of 1990 unless they have
opted for CPF Scheme. This would take care of set of
employees who did not withdraw themselves from the
Pension Scheme. The RFC has, however, extended the
benefit of CPF and accordingly sent the cheques. If the
amount was withdrawn by the retired employees
without a protest or returning the cheque/amount with
an objection before filing the writ petitions, they would
not be entitled to pensionary benefits leaving those
who returned the amount immediately on receipt in
protest to govern them by the CPF Scheme. The
direction aforesaid has been given in the light of the
provisions of the Pension Regulations of 1990 itself
which keeps even CPF Scheme alive.
It was not necessary for all the employees to govern
themselves by the pensionary Scheme but could have
retained themselves under the CPF Scheme though by
giving option for it. Accordingly, while the Pension
Regulations of 1990 survive, the CPF Scheme also
remains alive. Accordingly, the RFC is directed to
extend pensionary benefits under the Pension
Regulations of 1990 to those who retired after
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (12 of 37) [CW-1791/2024]
12.08.2004 unless they opted for CPF Scheme or
accepted the amount towards CPF without protest and
accordingly it was not returned. It would be taken
towards acceptance of CPF Scheme and, therefore,
only writ petitions were filed after lapse of few years.
Category-III: The third category of the petitions are
those who are still in service. The question is as to
whether they can be gove’ned by the Pension
Regulations of 1990. Since we have recorded finding
that Pension Regulations of 1990 remain in effect in
view of quashing of the order dated 12.08.2004, thus
whoever has opted for the Pension Scheme, would
continue unless the RFC withdraws or amend the
Pension Regulations of 1990 by applying the procedure
given under Section 48 of the Act of 1951. Thus, third
set of employees would be governed accordingly if they
have not opted for CPF Scheme. It is subject to the
rider that the Pension Regulations of 1990 are not
withdrawn by applying the procedure given under
section 48 of the Act of 1951.
iii) In compliance of the decision taken in the
Pre-Litigation Conimittee held on 27.07.2018
Corporation filed SLP against the decision of
Hon’ble Division Bench of Rajasthan High Court
but the Hon’ble Supreme Court upheld the said
decision on 28.01.2019 with the observation that
“we are not inclined to interfere with the
impugned judgment” and also dismissed our
review application on 03.04.2019.
iv) Meanwhile, the AAG of Rajasthan Dr. Manish Singhvi
also opined that the State Govt. can also file SLP if the
state has to also part with the resources. Accordingly,
the State Govt. also filed SLP bearing SLP (Civil) Diary
No. 11066/2019 against the order dated 07.05:2018
passed by the Hon’ble Division Bench. But the said SLP
was also dismissed on 16.04.2019 at the preliminary
stage i.e. without issuance of the notices. Again, as per
the decision of the Pre-Litigation Committee held on
08.07.2019 State Govt. fi’ed Review Petition before the
Hon’ble Apex Court but the same has also been
dismissed.
v) After dismissal of the SBCWP No. 5450/2009 filed by
the RFC Officers Association & Ors the Corporation
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (13 of 37) [CW-1791/2024]
during pendency of Special Appeal issued Notification
dated 21.07.2017 regarding withdrawal of the Pension
Regulations of 1990.
That being aggrieved against issuance of said
Notification, yet another writ petition came to be filed
by Shri Sudeep Kumar Pokharna & others against RFC
& State bearing DB Civil Writ Petition No. 4375/2018
challenging the Gazette Notification dated 21.07.2017
on the ground that the said notification has
retrospective effect, therefore, the same is not tenable
in the eye of law and therefore may be quashed.
The Hon’ble Division Bench of Rajasthan High Court
vide its Order 26.02.2020 (Annexure-A) allowed the
writ petition and quashed the impugned notification
dated 21.07.2017, which was issued and published by
the RFC withdrawing the pension scheme w.e.f.
21.06.2004, on the ground that the basic order of
withdrawal of the pension has already been set aside
as the Corporation has not followed the provisions as
prescribed under section 48 of the SFCs Act, 1951 and
the same was upheld by the Hon’ble Apex Court.
However, liberty has been granted to the Corporation
for withdrawing the pension regulation following the
due procedure as prescribed u/s 48 of the SFCs Act,
1951.
To apprise the Board of Directors about the verdict
given by the Hon’ble Division Bench of Rajasthan High
Court, Jaipur (as pronounced on 26.02.2020) in the
matter of Shri Sudeep Kumar Pokharna & others
against RFC & State bearing DB Civil Writ Petition No.
4375/2018, a Status Note on Pension matter was
placed before the Board of Directors in its meeting held
on 02.03.2020. The Board desired that after receipt of
the Judgment dated 26.02.2020, an Agenda Note will
be circulated through Circulation before the Board as
per court’s decision for withdrawal of the RFC
Employees Pension Regulations, 1990 and after
following the due procedure, as prescribed under,
Section 48 of the State Financial Corporations Act,
1951, a fresh Notification shall be issued and published
in the Rajasthan Gazette.
It was further submitted that the financial condition of
the Corporation is not healthy and in order to curb the
administrative expenses the management has already
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (14 of 37) [CW-1791/2024]
sent approx. 1/3 employees of the Corporation have
been sent on reverse deputation.
Not only this at present there are 22 units in which 317
employees are working whereas all Regional Offices
have been abolished due to Financial stringencies.
Keeping in view the above background, the
Corporation has sought legal opinion from the
Major R.P. Singh AAG of the State Govt. regarding
withdrawal of Pension Regulation and as per his
opinion the Corporation can take decision for
withdrawal of the pension regulation from
retrospective date as permitted vide Section
48(3) of SFCs Act, 1951. Regulation 3 of Pension
Scheme, 1990 will not be an impediment because
this regulation in any case is contrary to Section
48(3) the Act, 1951, and therefore, ultra vires.
He further opined that the Corporation should
now consult SIDBI, take express sanction of the
State Government to proceed and publish the
decision so taken in the gazette.
Similarly, Shri Virendra Lodha, Sr. Advocate has
given his opinion which is as under: –
“That RFC should now consult SIDBI and there
upon take an express sanction of the state
government to proceed and publish its decision
to withdraw the pension regulation with
retrospective effect in terms of section 48 of the
Act of 1951 precisely section 48(3) of the Act of
1951 and there upon publish the aforesaid
decision in the official gazette. In view of above,
RFC may proceed afresh in accordance with
section 48 of the Act of 1951.”
In view of the aforesaid facts and after taking
into consideration the financial implication on the
Corporation and also in light of legal opinion
tender by Major R P Singh. AAG and Shri Virendra
Lodha, “Senior Advocate, It is proposed that
Rajasthan Financial Corporation Regulation, 1990
be withdrawn with retrospectively effect i.e.
21.06.2004 as decided in the year 2004 itself.
That after due approval of the Board of Directors
of Rajasthan Financial Corporation in this regard
an Office Order shall be issued by the Corporation
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (15 of 37) [CW-1791/2024]
with consultation of SIDBI as well as prior
sanction of the State Government and same shall
be published in the official Gazette of the State
afresh.”
13. Learned counsel for petitioners further submitted that
despite the fact that the respondent-RFC lost all the litigations up
to the Hon’ble Apex Court in the cases belonging to all the
categories including the petitioners, who belong to second
category, the impugned decision dated 18.03.2020, was still taken
by the respondents – RFC in their Board Meeting, based on some
legal opinion.
14. Learned counsel further submitted that the co-ordinate
Bench vide judgment dated 07.05.2018 decided the complete
controversy and which attained finality in respect of Category I &
II persons (vide judgment dated 07.05.2018) and in the case of
Category III by the judgment dated 26.02.2020, still respondent-
RFC issued the impugned Notification dated 09.06.2020. He
further submitted that the Notification as issued, is clearly illegal
and bad in law as it was issued to water down or to annul the
mandamus as issued by the Court in case of V.K. Gupta (supra),
whereby the action of respondent-RFC for withdrawal of the
Pension Regulations of 1990 by order dated 12.08.2004 was held
to be illegal and bad in law. Now again, by restarting the cycle,
respondents have again withdrawn the Regulation of 1990 by the
impugned Notification dated 09.06.2020, with retrospective effect
from 21.06.2004. Counsel further submitted that the complete
action is in violation of Article 14 & 16 of the Constitution of India,
being palpably arbitrary, unreasonable, illegal and unjustified on
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (16 of 37) [CW-1791/2024]
the face of record and therefore, the impugned notification
deserves to be quashed and set aside.
15. In support of his arguments, learned counsel relied upon the
judgments passed by the Hon’ble Apex Court in the case of The
Punjab State Cooperative Agricultural Development Bank
Ltd. Vs. Registrar Cooperative Societies and Ors. 4 where the
Hon’ble Apex Court examined the issue of retrospective
amendments to the pension schemes and held the same being
violative of Article 14 & 16 of Constitution of India.
16. Learned counsel further cited the judgment passed by the
Hon’ble Apex Court in the case of Dr. Jaya Thakur Vs. Union Of
India5 where the Hon’ble Apex Court examined and decided that
while Parliament may amend laws to alter their general basis, it
cannot nullify a specific mandamus or judicial order issued in a
particular case, as doing so would violate the separation of
powers.
17. Learned counsel further placed reliance upon the judgment
passed by the Hon’ble Supreme Court in the case of S. R.
Bhagwat & Ors. & Vs. State of Mysore6.
18. Lastly, learned counsel relied upon the judgment passed by
the Hon’ble Supreme Court in the case of The Commissioner,
Karnataka Housing Board Vs. C Muddaiah 7, wherein the
Hon’ble Apex Court relied upon the previous judgment passed in
S.R. Bhagat (supra).
19. In view of the above submissions and the judgments, as
relied upon by learned counsel for the petitioner, it is prayed that
4. (2022) 3 SCC 559
5. 2023 (10) SCC 276
6. 1995 (6) SCC 16
7. 2007 (7) SCC 689
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (17 of 37) [CW-1791/2024]
the impugned notification order dated 09.06.2020 be declared
ultra-vires & quashed and the writ petition be allowed.
20. Per contra, Mr. Virendra Lodha, learned Senior Counsel for
the respondent-RFC vehemently opposed the submissions
advanced on behalf of petitioners and submitted that the
notification dated 09.06.2020 was issued by the respondent-RFC,
following the process as provided under Section 48 of the Act of
1951. He further submitted that though the issue had attained
finality in the case of V.K. Gupta (Supra), the coordinate Bench,
while deciding the D.B. Civil Review Petition No. 190/2018
reviewed its earlier order dated 07.05.2018, by order dated
15.11.2018. He further submitted that considering the said review
order and the notification dated 21.07.2017, the Coordinate
Bench, while deciding the writ petition in the case of Sudeep
Kumar (Supra), wherein, the challenge was made to the
notification dated 21.07.2017, though quashed the impugned
notification dated 21.07.2017, however, granted liberty to the
respondent-RFC to proceed afresh in accordance with law. Learned
counsel for the respondents-RFC further submitted that pursuant
to the liberty so granted by the Coordinate Bench vide its order
dated 26.02.2020, the respondent RFC, as per the mandate of the
Act of 1951, discussed the entire issue in its Board meeting dated
18.03.2020 and after taking legal opinion, took the final decision
to withdraw the Pension Regulations of 1990 with effect from
21.06.2004.
21. Learned Senior Counsel for the respondent-RFC, submitted
that since the liberty was granted by the Coordinate Bench vide
the order dated 26.02.2020, the respondent Corporation, after
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (18 of 37) [CW-1791/2024]
taking a decision in its Board meeting, issued the notification
dated 09.06.2020 and rightly gave it retrospective effect. He
further submitted that the said action was taken strictly in
accordance with law, therefore, the notification dated 09.06.2020
does not violate any provision of the Constitution of India or any
legal rights of the petitioners herein.
22. The issue involved in the present case pertains majorly to
respondent RFC, however, a formal reply has also been filed on
behalf of the state, wherein the submissions and arguments
advanced by the respondent RFC have been adopted.
23. In view of the above submissions, learned counsels for the
respondents prayed that the notification dated 09.06.2020 has
been rightly and lawfully issued and the judgments relied upon by
the petitioners are not applicable to the facts of the present case
and prayed that the writ petition deserves to be dismissed.
24. Heard learned counsel for the parties.
25. This Court, on the basis of the submissions advanced by
learned counsels for the parties and the previous judgments and
orders passed by the Coordinate Benches of this Court, noted that
the issue of relating to withdrawal of pension scheme, as provided
to the officers and employees of the respondent RFC under
Pension Regulations of 1990, and its withdrawal by office order
dated 12.08.2004, had already been examined in the past. The
Co-ordinate Bench, vide judgment dated 07.05.2018, categorized
the officers and employees into three distinct categories and held
them entitled to pensionary benefits in accordance with the said
categorization under Regulation of 1990 and quashed the order
dated 12.08.2004 passed by respondent-RFC.
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (19 of 37) [CW-1791/2024]
26. The order of the Coordinate Bench dated 07.05.2018, was
assailed by the respondent-RFC by filing Special Leave Petition
before the Hon’ble Supreme Court, which came to be dismissed
vide order dated 28.01.2019.
27. This Court further noted, from the documents as annexed by
the petitioners, that the State Government had also filed a Special
Leave Petition before the Hon’ble Apex Court challenging the order
dated 07.05.2018 passed by the Co-ordinate Bench. However, said
Special Leave Petition also came to be dismissed vide Order dated
16.04.2019.
28. Upon dismissal of the Special Leave Petitions by the Hon’ble
Apex Court and consequent quashing of the office order dated
12.08.2004, the officers and employees of the respondent-RFC,
falling under the three categories, became entitled to pensionary
benefits under the Pension Regulations of 1990. However, during
the pendency of the Review Petition No.190/2018 filed in the case
of V.K. Gupta (supra) and connected matters, the respondent-
RFC again issued a notification dated 21.07.2017, giving rise to
further litigation by repeating the same issue and grounds to
create further unnecessary litigation and to unsettle the settled
legal position in regard to the pension of the Employee of
respondent-RFC.
29. Since a fresh notification dated 21.07.2017 was issued by
the respondent-RFC seeking withdrawal of Pension Regulations of
1990, the Coordinate Bench, while hearing the review petition
filed by the respondent RFC bearing D.B. Civil Writ Review Petition
No.190/2018, reviewed its judgment dated 07.05.2018, vide
order dated 15.11.2018, in respect of employees falling
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (20 of 37) [CW-1791/2024]
only under the third category, to which admittedly, the
present petitioners do not belong.
30. As the Coordinate Bench vide its order dated 15.11.2018,
reviewed its order in respect of persons falling under the third
category, therefore, another Coordinate Bench, while deciding the
challenge to the notification dated 21.07.2017, in the case of
Sudeep Kumar (Supra), though quashed the notification dated
21.07.2017, however granted liberty to the respondent RFC to
proceed afresh in accordance with law. It is on account of this
liberty as granted by the Coordinate Bench while passing the
judgment in the case of Sudeep Kumar (Supra) that the
respondent RFC issued the notification dated 09.06.2020. By the
said impugned notification, the respondent RFC restarted the
same exercise of withdrawal of pensions scheme issued under the
Pension Regulations of 1990, retrospectively from 21.06.2004,
which was done earlier also by Office order dated 12.08.2004, and
same was held to be illegal and bad in law by the coordinate
bench vide its order dated 07.05.2018. The said order attained
finality, as no interference was made by the Hon’ble Apex
Court by dismissing the Special Leave Petitions filed by the
respondent-RFC as well as the State Government, both, and
including the review petition filed by the respondent RFC.
31. Despite the controversy having attained finality after the
judgment passed by the Coordinate Bench in V. K. Gupta (Supra)
as discussed above, the respondent-RFC, on the very same
grounds, once again took the decision in its Board meeting dated
18.03.2020 relying upon the reports of Chartered Accountant and
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (21 of 37) [CW-1791/2024]
financial experts, as well as legal opinions, as referred in the
preceding paragraphs, to revoke the Rajasthan Financial
Corporation Employees’ Pension Regulations, 1990 with
effect from 21.06.2004.
32. The entire action of the respondent RFC had already been
held to be illegal and bad in law twice by the above discussed
judicial pronouncements of this Court in the previous litigation on
the issue. The purpose of issuance of notification dated
09.06.2020 is only to annul the judicial pronouncements of this
Court, which were also affirmed by the Hon’ble Supreme Court.
The respondent-RFC issued the impugned notification dated
09.06.2020 without any justification or without any legal basis for
the same.
33. This Court fails to find any justified reason and ground
behind issuance of impugned notification after considering the
reply of respondent-RFC. The complete reply is frivolous and
baseless and have no basis to reopen the settled legal issue and
controversy. A perusal of the reply reveals that it merely
contains the repetition of the facts pertaining to the
previous litigation and no new facts have been brought on
record to justify the action of issuance of impugned
notification, which has been given retrospective effect from
21.06.2004.
34. The relevant paras of the reply, wherein reference has been
made to the decisions taken regarding the fresh withdrawal of the
pension scheme with retrospective effect and the reasons
assigned, being relevant, is reproduced as under:-
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (22 of 37) [CW-1791/2024]“Thus, the Hon’ble Division Bench granted liberty to
the answering Respondent to proceed afresh.
Consequently, in accordance with section 48 of the
State Financial Corporation Act, 1951, the Board of
Directors of the Corporation held meeting on
18.03.2020. After considering the entirety of the
judgment passed in various Writ Petitions, including
the Review Petition, as well as the financial conditions
of the answering Respondent Corporation, it was
decided to withdraw the Pension Regulation, 1990,
effective from 21.06.2004. this decision was made
following the prescribed procedure in Section 48 of
the State Financial Corporation Act, 1951, which
includes consultation with SIDBI and obtaining prior
approval from the State Government.
That in compliance with the decision of the Board of
Directors of the answering Respondent dated
18.03.2020, the answering Respondent Corporation
obtained approval of the State Government vide their
letter No. P.10 (3) Udyog/1/2020 dated 27.05.2020.
That simultaneously, consultation was conducted with
SIDBI also and the SIDBI vide its lette: dated
28.05.2020 observed as under:-
“In this connection, we convey permission to the
Corporation proposal for withdrawal of RFC
Employees Pension Regulation, 1990, subject to
Corporation complying with other provisions of
Section 48 and 48A of the SFC Act, 1951.
Please forward a copy of the relevant Gazette
Notification for record in due course.”
That on the basis of the aforementioned approval
from the State Government and the communication
from SIDBI, the answering Respondent Corporation
presented the matter once again before the Board of
Directors at its meeting held on 29.05.2020. The
Board finally decided to withdraw the REC Employees
Pension Regulations, 1990, effective.
That it is only after sequence of events that the
Gazette Notification has been issued and published,
dated 11.06.2020. ”
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (23 of 37) [CW-1791/2024]
35. Surprisingly, in a case where the challenge has been made to
the impugned notification which was given retrospective effect,
and where the issue has already attained finality up to the Hon’ble
Supreme Court, there is still no specific reason given in reply
to justify the impugned notification, nor does it counter the
grounds raised by the petitioners in the writ petition. The
reply filed by the respondents is completely silent, which is
highly casual, particularly in a matter, where the validity of
the impugned notification is under challenge before the
Division Bench of the High Court.
36. With such a casual reply, the contest made to the impugned
notification, in the considered opinion of this Court, is highly
frivolous and devoid of merits.
36. This Court has considered the judgments as cited by the
learned counsel for the petitioners. This Court shall now deal with
the judgments one by one:-
(i) In the case of The Punjab State Cooperative Agricultural
Development Bank Ltd. (Supra), the Hon’ble Apex Court, while
examining the issue of retrospective amendment seeking to take
away valuable rights, held that an amendment having
retrospective operation, results in the withdrawal of benefits
already available to an employee under existing rules, amounts to
taking away vested or accrued rights. Such retrospective
withdrawal of rights was held to be violative of Article 14 & 16 of
the Constitution of India.
In the said case, the Hon’ble Supreme Court further, in
Paragraph 50, explained and decided the issue in the said case by
way of illustration that “if a person, while entering into
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (24 of 37) [CW-1791/2024]
service, had the expectation that as per the existing
schemes or rules he would get certain rights in the future,
then those accrued/vested rights cannot be taken away by
giving retrospective effect to any scheme, as the same
would be violative of Articles 14 and 16 of the Constitution
of India”.
37. The relevant part of the judgment, is being reproduced as
under:-
“43. The concept of vested/accrued right in the service
jurisprudence and particularly in respect of pension has
been examined by the Constitution Bench of this Court
in Chairman, Railway Board and Ors. (supra) as follows:
“11. On the basis of the said decision of the Full
Bench of the Tribunal, other Benches of the
Tribunal at Bangalore, Hyderabad, Allahabad,
Jabalpur, Jaipur, Madras and Ernakulam have
passed orders giving relief on the same grounds.
These appeals and special leave petitions have
been filed against the decision of the Full Bench
and those other Benches of the Tribunal. Some of
these matters were placed before a Bench of
three learned Judges of this Court on 28-3-1995
on which date the following order was passed:
Two questions arise in the present case, viz., (i)
what is the concept of vested or accrued rights so
far as the government servant is concerned, and
(ii) whether vested or accrued rights can be taken
away with retrospective effect by Rules made
under the proviso to Article 309 or by an Act
made under that article, and which of them and
to what extent.
We find that the Constitution Bench decisions in
Roshan Lal Tandon v. Union of India (1968) 1 SCR
185; B.S. Vadera v. Union of India (1968) 3 SCR
575 and State of Gujarat v. Raman Lal Keshav Lal
Soni (1983) 2 SCC 33 have been sought to be
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (25 of 37) [CW-1791/2024]
explained by two three-Judge Bench decisions in
K.C. Arora v. State of Haryana (1984) 3 SCC 281
and K. Nagaraj v. State of A.P. (1985) 1 SCC 523
in addition to the two- Judge Bench decisions in
P.D. Aggarwal v. State of U.P. (1987) 3 SCC 622
and K. Narayanan v. State of Karnataka 1994
Supp (1) SCC 44. Prima facie, these explanations
go counter to the ratio of the said Constitution
Bench decisions. It is not possible for us sitting as
a three-Judge Bench to resolve the said conflict.
It has, therefore, become necessary to refer the
matter to a larger Bench. We accordingly refer
these appeals to a Bench of five learned Judges.”
44. This Court, after taking note of the earlier view on
the subject further held in Chairman, Railway Board and
Ors. (supra) as under:
“20. It can, therefore, be said that a Rule which
operates in futuro so as to govern future rights
of those already in service cannot be assailed on
the ground of retroactivity as being violative of
Articles 14 and 16 of the Constitution, but a Rule
which seeks to reverse from an anterior date a
benefit which has been granted or availed of,
e.g., promotion or pay scale, can be assailed as
being violative of Articles 14 and 16 of the
Constitution to the extent it operates
retrospectively.
24. In many of these decisions the expressions
“vested rights” or “accrued rights” have been
used while striking down the impugned
provisions which had been given retrospective
operation so as to have an adverse effect in the
matter of promotion, seniority, substantive
appointment, etc., of the employees. The said
expressions have been used in the context of a
right flowing under the relevant Rule which was
sought to be altered with effect from an anterior
date and thereby taking away the benefits
available under the Rule in force at that time. It
has been held that such an amendment having
retrospective operation which has the effect of
taking away a benefit already available to the(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (26 of 37) [CW-1791/2024]employee under the existing Rule is arbitrary,
discriminatory and violative of the rights
guaranteed Under Articles 14 and 16 of the
Constitution. We are unable to hold that these
decisions are not in consonance with the
decisions in Roshan Lal Tandon (1968) 1 SCR
185, B.S. Vedera (1968) 3 SCR 575 and Raman
Lal Keshav Lal Soni (1983) 2 SCC 33.
25. In these cases we are concerned with the
pension payable to the employees after their
retirement. The Respondents were no longer in
service on the date of issuance of the impugned
notifications. The amendments in the Rules are
not restricted in their application in futuro. The
amendments apply to employees who had
already retired and were no longer in service on
the date the impugned notifications were issued.
33. Apart from being violative of the rights then
available Under Articles 31(1) and 19(1)(f), the
impugned amendments, insofar as they have
been given retrospective operation, are also
violative of the rights guaranteed Under Articles
14 and 16 of the Constitution on the ground that
they are unreasonable and arbitrary since the
said amendments in Rule 2544 have the effect of
reducing the amount of pension that had
become payable to employees who had already
retired from service on the date of issuance of
the impugned notifications, as per the provisions
contained in Rule 2544 that were in force at the
time of their retirement.
47. The exposition of the legal principles culled out is
that an amendment having retrospective operation
which has the effect of taking away the benefit already
available to the employee under the existing Rule
indeed would divest the employee from his vested or
accrued rights and that being so, it would be held to be
violative of the rights guaranteed Under Articles 14 and
16 of the Constitution.
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (27 of 37) [CW-1791/2024]
48. In the instant case, the Bank pension scheme was
introduced from 1st April 1989 and options were called
from the employees and those who had given their
option became member of the pension scheme and
accordingly pension was continuously paid to them
without fail and only in the year 2010, when the Bank
failed in discharging its obligations, Respondent
employees approached the High Court by filing the writ
petitions. The Bank later on withdrawn the scheme of
pension by deleting Clause 15(ii) by an amendment
dated 11th March, 2014 which was introduced with
effect from 1st April, 1989 and the employees who
availed the benefit of pension under the scheme, indeed
their rights stood vested and accrued to them and any
amendment to the contrary, which has been made with
retrospective operation to take away the right accrued
to the retired employee under the existing Rule certainly
is not only violative of Article 14 but also of Article 21 of
the Constitution.”
(ii). In the case of Dr. Jaya Thakur (supra), the Hon’ble
Supreme Court examined the issue of nullifying the direction of
the Court by issuance of fresh legislation. The Hon’ble Supreme
Courts, held such an act to be bad in law. The relevant paras of
the said judgment is reproduced here as under:-
“103. As such, it is clear that this Court issued a specific
mandamus that no further extension shall be granted to
the second respondent. Undisputedly, the Union of India
as well as the respondent No.2- Sanjay Kumar Mishra in
Writ Petition (Civil) No. 456 of 2022 herein were parties
to the said proceedings.
104. A Constitution Bench of learned Seven Judges of
this Court in the case of Madan Mohan Pathak and
another v. Union of India and others (1978) 2 SCC 50
was considering the question of constitutional validity of
the Life Insurance Corporation (Modification of
Settlement) Act, 1976. In exercise of power vested
under Section 49 of the Life Insurance Corporation Act,
1956, right from 1959, various settlements were arrived
at between the Life Insurance Corporation (“LIC” for
short) and its employees from time to time in regard to
various matters relating to terms and conditions of(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (28 of 37) [CW-1791/2024]service of Class III and Class IV employees. The said
settlements were also approved by the Board of the LIC
as also by the Central Government. An Ordinance was
promulgated by the President of India on 25th
September 1975, called the Payment of Bonus
(Amendment) Ordinance 1975. Subsequently, the said
Ordinance was replaced by the Payment of Bonus
(Amendment) Act, 1976, which was brought into force
with retrospective effect from the date of the Ordinance,
ie., 25th September 1975. This amending law
considerably curtailed the rights of the employees to
bonus in industrial establishments. However, it had no
impact insofar as the employees of the LIC were
concerned. However, the employees of the LIC were
denied the benefits which they were entitled to. In
these circumstances, the All-India Insurance Employees’
Association and some others filed writ petition(s) before
the High Court of Calcutta for a writ of mandamus and
prohibition directing the LIC to act in accordance with
the terms of the Settlement dated 24th January 1974
read with the administrative instructions.
105. The learned Single Judge of the Calcutta High
Court allowed the writ petition and issued a writ of
mandamus and prohibition as prayed for in the said writ
petition. The LIC preferred a Letters Patent Appeal
(“LPA” for short). However, during the pendency of the
LPA, on 29th May, 1976, the Act impugned before this
Court was enacted. The effect of the enactment was to
annul the benefits which the employees of the LIC were
entitled to in view of the mandamus issued by the
Calcutta High Court.
106. Bhagwati, J (speaking for himself, Krishna lyer and
Desai, JJ.) observed thus:
“9….We are, therefore, of the view that, in any event,
irrespective of whether the impugned Act is
constitutionally valid or not, the Life Insurance
Corporation is bound to obey the writ of mandamus
issued by the Calcutta High Court and to pay annual
cash bonus for the year April 1, 1975 to March 31, 1976
to Class III and Class IV employees
107. Beg. C.J. in his concurring judgment observed
thus:
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (29 of 37) [CW-1791/2024]“32. I may, however, observe that even though the real
object of the Act may be to set aside the result of the,
mandamus issued by the Calcutta High Court, yet, the
section does not mention this object at all. Probably this
was so because the jurisdiction of a High Court and the
effectiveness of its orders derived their force from
Article 226 of the Constitution itself. These could not be
touched by an ordinary act of Parliament. Even if
Section 3 of the Act seeks to take away the basis of the
judgment of the Calcutta High Court, without
mentioning it, by enacting what may appear to be a
law, yet, I think that, where the rights of the citizen
against the State are concerned, we should adopt an
interpretation which upholds those rights. Therefore,
according to the interpretation I prefer to adopt the
rights which had passed into those embodied in a
judgment and became the basis of a mandamus from
the High Court could not be taken away in this indirect
fashion.
108. It could thus be clearly seen that the Constitution
Bench of learned Seven Judges of this Court clearly held
that by a subsequent enactment, the writ of mandamus
issued by the Calcutta High Court crystalizing the rights
and liabilities between the parties cannot be annulled.
114. It could, thus, clearly be seen that this Court has
held that the effect of the judgments of this court can
be nullified by a legislative aes removing the basis of
the judgment. It has further been held that such law
can be retrospective. It has, however, been held that
retrospective amendment should be reasonable and not
arbitrary and must not be violative of the fundamental
rights guaranteed under the Constitution. It has been
held that the defect pointed-out should have been cured
such that the basis of the judgment pointing out the
defect is removed. This Court has, however, clearly held
that nullification of mandamus by an enactment would
be impermissible legislative exercise. This Court has
further held that transgression of constitutional
limitations and intrusion into the judicial power by the
legislature is violative of the principle of separation of
powers, the rule of law and of Article 14 of the
Constitution of India.”
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (30 of 37) [CW-1791/2024]
(iii) In the case of S.R. Bhagwat (supra), the Hon’ble Supreme
Court held that judicial pronouncements rendered between the
parties cannot be made ineffective by exercising the legislative
power to enact new provision. The relevant paras, more
particularly Para Nos. 12, 19 & 20, are reproduced here as under:-
“12. It is now well settled by a catena of decisions of
this Court that a binding judicial pronouncement
between the parties cannot be made ineffective with
the aid of any legislative power by enacting a provision
which in substance over-rules such judgment and is
not in the realm of a legislative enactment which
displaces the basis or foundation of the judgment and
uniformly applies to a class of persons concerned with
the entire subject sought to be covered by such an
enactment having retrospective effect. We may only
refer to two of these judgments.
19. We, therefore, strike down Section 11 sub-section
(2) as unconstitutional, illegal and void. So far as the
underlined impugned portions of Section 4 sub-
sections (2), (3) and (8) are concerned, they clearly
conflict with the binding direction issued by the
Division Bench of the High Court against respondents-
State and in favour of the petitioners. Once
respondent-State had suffered the mandamus to give
consequential financial benefits to the allottees like the
petitioners on the basis of the deemed promotions
such binding direction about payment of consequential
monetary benefits cannot be nullified by the impugned
provisions of Section 4. Therefore, the underlined
portions of sub-sections (2), (3) and (8) of Section 4
will have to be read down in the light of orders of the
court which have become final against the respondent-
State and in so far as these provisions are inconsistent
with these final orders containing such directions of
judicial authorities and competent courts, these
impugned provision of Section 4 have to give way and
to the extent of such inconsistency must be treated to
be inoperative and ineffective. Accordingly the
aforesaid provisions are read down by observing that
the statutory provisions contained in sub-sections (2),
(3) and (8) of Section 4 providing that such persons
who have been given deemed promotions shall not be
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (31 of 37) [CW-1791/2024]
entitled to any arrears for the period prior to the date
of their actual promotion, shall not apply in cases
where directions to the contrary of competent courts
against the respondent-State have become final.
20. In the result, this writ petition succeeds. Section
11 sub-section (2) is struck down as ultra vires the
legislative powers of the State. Sub-sections (2), (3)
and (8) of section 4 are read down as aforesaid. The
respondent-State shall comply with the directions
contained in the binding decision of the High Court of
Karnataka dated 21.9.1971 in Writ Petition Nos. 2598,
3302-3304 and 4586 of 1970 and shall make available
all consequential financial benefits to the concerned
petitioners as directed by the High Court within a
period of eight weeks from the receipt of the orders of
this Court at its end. Rule issued in the Writ Petition is
accordingly made absolute with costs.”
(iv) In the case of C. Muddaiah (supra), the Hon’ble Apex
Court, while considering the earlier judgment in S.R. Bhagwat
(supra), held that a binding judicial pronouncement between the
parties cannot be made ineffective or inoperative with the aid of
legislative power by making a provision which, in substance and in
reality, overrides and overrules a decision rendered by a
competent court. Such process virtually renders a judicial decision
ineffective by indirectly exercising appellate power over a judicial
forum which is impermissible. The relevant paras of the of the
judgment are reproduced as under:-
“18. The Court stated:
It is now well settled by a catena of decisions of this Court
that a binding judicial pronouncement between the parties
cannot be made ineffective with the aid of any legislative
power by enacting a provision which in substance over-
rules such judgment and is not in the realm of a legislative
enactment which displaces the basis of foundation of the
judgment and uniformly applies to a class of persons
concerned with the entire subject sought to be covered by
such an enactment having retrospective effect.
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (32 of 37) [CW-1791/2024]
22. The Court stated:
We, therefore, strike down Section 11 Sub-section (2) as
unconstitutional, illegal and void. So far as the underlined
impugned portions of Section 4, Sub- sections (2), (3) and
(8) are concerned, they clearly conflict with the binding
direction issued by the Division Bench of the High Court
against the respondent-State and in favour of the
petitioners. Once respondent-State had suffered the
mandamus to give consequential financial benefits to the
allottees like the petitioners on the basis of the deemed
promotions such binding direction about payment of
consequential monetary benefits cannot be nullified by the
impugned provisions of Section 4. Therefore, the underlined
portions of Sub-sections (2), (3) and (8) of Section 4 will
have to be read down in the light of orders of the court
which have become final against the respondent-State and
in so far as these provisions are inconsistent with these
final orders containing such directions of judicial authorities
and competent courts, these impugned provisions of
Section 4 have to give way and to the extent of such
inconsistency must be treated to be inoperative and
ineffective. Accordingly the aforesaid provisions are read
down by observing that the statutory provisions contained
in Sub-sections (2), (3) and (8) of Section 4 providing that
such person who have been given deemed promotions shall
not be entitled to any arrears for the period prior to the
date of their actual promotion, shall not apply in cases
where directions to the contrary of competent courts
against the respondent-State have become final.”
38. This Court, after considering the previous mandamus issued
in the case of V. K. Gupta (supra), decision in the review petition
dated 15.11.2018 and the order passed in the case of Sudeep
Kumar (supra), noted the fact that the issue, which started in the
year 2004, had attained finality by the above judgments of this
Court, as well as on the dismissal of the special leave petitions
and the review petition by the Hon’ble Supreme Court but the
same has again been reopened by the respondent-RFC by issuing
the impugned notification dated 09.06.2020. Once the controversy
in respect of category I and II attained finality vide orders dated
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (33 of 37) [CW-1791/2024]
07.05.2018 read-with order dated 15.11.2018 and, admittedly the
petitioners belong to Category II, then there was no justification,
ground and reason available with the respondent RFC to issue the
impugned notification on the basis of the liberty as granted by the
co-ordinate Bench while quashing the impugned notification dated
21.07.2017, which was issued in respect of Category III
employees, as the respondent had no such authority or right
under the law.
39. This Court finds one of the reasons for issuance of the
impugned notification as mentioned in the decision of Board
meeting of respondent-RFC is that respondent-RFC is facing
certain financial difficulties in the implementation of the Pension
Scheme and therefore, by exercising its powers under Section 48
of the of the Act of 1951, they took a decision to withdraw the
Pension Scheme retrospectively with effect from 21.06.2004. This
Court noted that the Hon’ble Apex Court, in the case of Punjab
State Cooperative Agricultural Development Bank (supra),
specifically considered this issue and held that on the ground of
non availability of financial resources, vested rights accrued to an
employee cannot be taken away retrospectively. The relevant para
No. 50 of the said judgment reads as under:-
“55. In our view, non-availability of financial resources
would not be a defence available to the Appellant Bank
in taking away the vested rights accrued to the
employees that too when it is for their socio-economic
security. It is an assurance that in their old age, their
periodical payment towards pension shall remain
assured. The pension which is being paid to them is not
a bounty and it is for the appellant to divert the(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (34 of 37) [CW-1791/2024]resources from where the funds can be made available
to fulfil the rights of the employees in protecting the
vested rights accrued in their favour.”
40. This Court, while examining the validity of the impugned
notification dated 09.06.2020 in the light of the judgments as
cited before this Court by the learned counsel for the petitioners,
also considered the reply as filed to justify the validity of the said
impugned notification. However, as noted above, the reply is
baseless and evasive and further contains no valid and justified
ground to issue the impugned notification dated 09.06.2020, by
which the Pension Regulations of 1990 have been withdrawn by
giving retrospective effect from 21.06.2004.
41. This Court also noted that the co-ordinate Bench, while
deciding the Review Petition No.190/2018 vide order dated
15.11.2018, specifically observed that no ground was made out to
review the order dated 07.05.2018, even with reference to the
notification dated 21.07.2017. The Court further held that, while
dealing with the issue with reference to the employees falling in
third category, they would continue to be governed under the
Regulations of 1990 unless the same are withdrawn by applying
the procedure given under Section 48 of the Act of 1951.
42. This Court noted that the co-ordinate Bench while deciding
the review petition, the issue in respect of category I and II was
not touched, denied any kind of review of the order. Therefore,
any liberty, would not allow the respondent-RFC to reopen the
settled legal controversy again, even by following the procedure
under Section 48 of the Act of 1951. It is only in respect of
category III employees it was observed that respondent can
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (35 of 37) [CW-1791/2024]
withdraw the scheme by applying the procedure given under
Section 48 of the Act of 1951. Though the petitioners are not from
the III category, however, this Court noted even the notification
dated 21.07.2017 as issued also failed. Therefore, in the given
facts and circumstances, after losing the battle twice the
respondent-RFC cannot be permitted to act in a highly illegal,
arbitrary and unjustified manner. At that cost of repetition, the
relevant paras of review order dated 15.11.2018 is reproduced
here as under:-
“We have considered the issue aforesaid but find no
ground for review of the order even in reference to the
Notification dated 21.07.2017. This Court, while dealing
with the issue in reference to the employees falling in
third category, made it clear to continue them under the
Regulations of 19990 unless withdrawn by applying the
procedure given under Section 48 of the Act of 1951. In
view of the above, we do not find any reason to review
the order when it is clear in its terms. It is, otherwise,
informed that the Notification dated 21.07.2017 has
been challenged by maintaining a separate writ petition.
The issue in reference to the Notification would be
determined in the said writ petition.
The review petition is disposed of with the aforesaid. It
is, however, with the clarification that while dealing with
the issues pertaining to employees falling in second
category, the word “GPF” has been mentioned as “CPF”
at some places due to typographical error. It has been
corrected in a separate order passed today on the misc.
Application preferred by the employees. Accordingly, the
order aforesaid would apply to the present order also.”
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (36 of 37) [CW-1791/2024]
43. This Court has also minutely examined the decision of the
respondent-Board dated 18.03.2020 and noted that despite
discussion of the previous litigation and the orders passed by the
co-ordinate Bench of this Court as well as the Hon’ble Supreme
Court, the impugned notification dated 09.06.2020 was still issued
on the basis of certain legal opinion, which this Court finds
contrary to law.
44. This unnecessary/unwarranted and intentional exercise by
the respondent-RFC to unsettle the issue again by issuance of the
impugned notification dated 09.06.2020 cannot be taken lightly,
as again and again, the Courts have been burdened by
respondent-RFC for the same issue which is no longer res integra.
45. In view of the above discussion and after considering the
previous judgments as passed by co-ordinate Benches in respect
of the Pension Regulations of 1990 pertaining to the employees of
the respondent-RFC, it is observed that the State and its
instrumentalities are biggest litigants and their approach of
creating unnecessary litigation, which not only seriously affects
the litigants but also wastes the precious time of the judiciary,
cannot be allowed to go unnoticed.
46. We are satisfied with the grounds as raised by the learned
counsel for the petitioners by which they have challenged the
validity of the impugned notification dated 09.06.2020 on the
basis of the judgments of the Hon’ble Supreme Court and find that
the impugned notification is violative of Article 14 & 16 of the
Constitution of India and is per se illegal, arbitrary, unjustified and
unreasonable, with no basis and justification on record to sustain.
Therefore, the impugned notification dated 09.06.2020 is declared
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
[2026:RJ-JP:2305-DB] (37 of 37) [CW-1791/2024]
as illegal and bad in law and same is hereby quashed and set
aside. Any consequential action taken by the respondents in
pursuance of the impugned notification dated 09.06.2020, shall
also stands quashed.
48. Both the writ petitions are allowed.
49. Pending application(s), if any, also stand disposed of.
(RAVI CHIRANIA),J (INDERJEET SINGH),J
PAYAL DHAWAN /44-45
(Uploaded on 20/02/2026 at 06:57:36 PM)
(Downloaded on 20/02/2026 at 10:48:36 PM)
Powered by TCPDF (www.tcpdf.org)
