Lower DR for pensioners than DA arbitrary, violates Article 14: SC

The Supreme Court has ruled that since inflation affects both serving and retired persons equally, a State cannot give pensioners a lower increase in Dearness Relief (DR) than the Dearness Allowance (DA) paid to serving employees, adding that such a move is arbitrary and in violation of Article 14 of the Constitution.

Same purpose of DA and DR

Elaborating further, a bench of Justices Manoj Misra and Prasanna B Varale stated that both the DA for employees and DR for pensioners serve the same purpose of helping the beneficiaries to deal with increasing prices and cost of living.

The bench stated that there cannot be any valid reason behind giving pensioners a lower increase in DR.

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“Indisputably, inflation hits both serving and retired employees with equal force. Therefore, differentiating the two in the rate of increase of DA and DR has no rational nexus to the object sought to be achieved,” stated the Court as quoted by the Bar and Bench.

The ruling came during the hearing of a case regarding a Kerala government order, as per which employees of the Kerala State Road Transport Corporation (KSRTC) were given a 14 per cent increase in DA, while pensioners received only an 11 per cent increase in DR.

Kerala government’s challenge

The Kerala government moved the Supreme Court, challenging the order of the Kerala High Court division bench ruling in favour of the pensioners.

During the hearing, the Kerala government argued that serving employees and pensioners belong to two different classes and hence granting an increase in different rates of DA and DR was not in violation of Article 14 of the Constitution.

Financial constraints argument

Concurring with the State government, the KSRTC submitted that it was facing financial constraints and granting a lower increase in DR was a deliberate decision in view of the financial issue.

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However, the pensioners countered, stating that the DR and DA have the same objective of ensuring that serving and retired employees do not face hardship due to inflation. They further stated that since inflation affects both serving employees and pensioners, there can be no rationale behind the two different rates.

Court upholds pensioners’ stand

Agreeing with the pensioner’s argument, the Court stated that while employees and pensioners are different groups, the difference does not apply when it comes to inflation, adding that different DR and DA rate not only unjust but also fail the quality test.

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“Besides, equality is a dynamic concept with many aspects and dimensions, and it cannot be cribbed, cabined and confined within traditional and doctrinaire limits. From a positivistic point of view, equality is antithetic to arbitrariness,” stated the Court, clarifying that financial constraints may justify delaying benefits, but it cannot justify giving lower benefits to one group when both are affected equally.

The bench then dismissed the appeals filed by the State of Kerala and KSRTC and upheld the Kerala High Court order.