Court upholds Circular validity dated 11.9.2001, dismisses petitions. Excess payments pre-11.9.2001 not recoverable.

The Court upheld the validity of the Circular dated 11.9.2001, dismissing the petitions. Excess payments made between 7.6.1999 and 11.9.2001 were not to be recovered, while excess payments after 11.9.2001 could be recovered in monthly instalments. Each party was to bear their respective costs.

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Issues Involved:
1. Validity of the Circular dated 11.9.2001.
2. Alleged unequal treatment of pre-1996 and post-1996 retirees.
3. Applicability of the Delhi High Court's decision to Defence Service Medical Officers.
4. Recovery of excess payments made to the petitioners.

Detailed Analysis:

Issue 1: Validity of the Circular dated 11.9.2001
The Circular dated 7.6.1999 extended the benefit of stepping up pensions to ensure that the pension of Armed Forces retirees, irrespective of their retirement date, was not less than 50% of the minimum pay in the revised scale of pay effective from 1.1.1996. However, a misinterpretation led to the inclusion of Non-Practising Allowance (NPA) in the minimum pay for calculating the pension, which necessitated the clarification issued in the Circular dated 11.9.2001. The Court held that the Circular dated 11.9.2001 was a clarification, not an amendment, correcting the misinterpretation of the Circular dated 7.6.1999. The term "minimum pay in the revised scale of pay" referred only to the initial pay in the revised scale, excluding NPA.

Issue 2: Alleged Unequal Treatment of Pre-1996 and Post-1996 Retirees
The petitioners argued that NPA was added to the basic pay for calculating pensions for post-1996 retirees but not for pre-1996 retirees, leading to discrimination. The Court found this contention misleading. For post-1996 retirees, NPA was included in the basic pay to determine pension, not for stepping up. For pre-1996 retirees, NPA was already included in their pension calculation, and the stepping up was only to ensure their pension met the minimum guaranteed under the Circular dated 7.6.1999. The Court held that there was no discrimination, as both sets of retirees were treated similarly, with the stepping up benefit applied only to pre-1996 retirees to ensure parity.

Issue 3: Applicability of the Delhi High Court's Decision to Defence Service Medical Officers
The petitioners contended that the Union of India implemented the Delhi High Court's decision, which struck down a similar circular for civilian medical officers, and thus should extend the same treatment to Defence Service Medical Officers. The Court noted that the State is not barred from challenging subsequent similar petitions even if it did not appeal a particular High Court decision due to various reasons like negligible financial repercussions or oversight. The principles of res judicata, estoppel, legitimate expectation, or fairness in action were not applicable in this case, allowing the State to defend its Circular dated 11.9.2001.

Issue 4: Recovery of Excess Payments Made to the Petitioners
The Court held that the respondents should not recover any excess payments made between 7.6.1999 and 11.9.2001 due to the wrong interpretation of the Circular dated 7.6.1999. However, excess payments made after 11.9.2001 could be recovered in appropriate monthly instalments. The Court emphasized that such relief against recovery is granted in equity to prevent undue hardship to pensioners who received excess payments without any misrepresentation or fraud on their part.

Conclusion:
The Court dismissed the petitions, upholding the validity of the Circular dated 11.9.2001. The respondents were directed not to recover excess payments made between 7.6.1999 and 11.9.2001 but allowed to recover excess payments made after 11.9.2001 in monthly instalments. Each party was ordered to bear their respective costs.

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