Court case(1983) 1 SCC 305

By an office memorandum of 25 May 1979 the Central Government liberalised the pension formula for its employees, computing average emoluments over the last ten months of service instead of thirty-six and raising the slab, but confined the benefit to employees retiring on or after 31 March 1979. D.S. Nakara and other pensioners who had retired earlier, and a society of pensioners, petitioned under Article 32, contending that the date divided one homogeneous class of pensioners into two without any rational basis.

The Constitution Bench, through Desai J, allowed the petitions. All pensioners governed by the same rules form one class; the date of retirement bears no rational relation to the object of the liberalisation, which was to provide a better standard of living in old age; the classification therefore failed Article 14 and was arbitrary. The words "on or after 31 March 1979" were struck down so that the liberalised formula applied to all pensioners from the date of the memorandum. Pension, the Court held, is not a bounty but a deferred wage and a measure of social security, read in the light of the word "socialist" in the Preamble and Articles 38, 39 and 41.