TaxTMI 
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TaxTMI 
2006 (10) TMI 428
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....'pay' for all service matters, and will be taken into account for computing Dearness Allowance and other allowances as well as for calculation of retirement benefits. It also prescribed the rate of NPA for AMC and ADC Officers as Rs. 600/- for basic pay below Rs. 3000/-, Rs. 800/- for basic pay between Rs. 3000/- and Rs. 3700/- and Rs. 900/- for basic pay of Rs. 3700/- and above. The NPA was revised as 25% of basic pay and Rank pay, with effect from 1.1.1996 (subject to the condition that pay plus NPA does not exceed Rs. 29,500/-). G.O. No. 2/S/98, issued by the Ministry, which implemented the Fifth Central Pay Commission recommendations in regard to revision of pay scales, gave the benefit of the revised NPA to all AMC, ADC and RVC officers who were receiving NPA. 3. The recommendations of Fourth Central Pay Commission in regard to pensionary benefits for Armed Force Officers retiring on or after 1.1.1986 were implemented by Ministry Circular dated 30.10.1987. The said Circular provided that retiring pension of all commissioned officers of the three services, shall be calculated at 50 per cent of the reckonable emoluments, for a qualifying service of 33 years (to be reduc....
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....ersonnel but the full pension in no case shall be less than 50% of the minimum of the revised scale of pay introduced w.e.f. 1.1.96 for the rank last held by the Commissioned Officer at the time of his/her retirement. However, such pension shall be reduced pro rata, where the pensioner has less than the maximum required service for full pension. [vide clause 2.1 (a)] ii) Where the revised and consolidated pension of pre-1.1.96 pensioners are not beneficial to him/her under these orders and is either equal to or less than existing consolidated pension under this Ministry's letters dated 24.11.97, 27.5.98 and 14.7.98, as the case may be, his/her pension will not be revised to the disadvantage of the pensioner [vide clause 4]". The pension of the petitioners were stepped up, re-fixed and paid accordingly. 6. The implementing departments had some doubts in regard to interpretation of the circular dated 7.6.1999. They therefore, sought clarifications from the Ministry on the following two issues (i) whether NPA admissible as on 1.1.1986 is to be taken into consideration after refixation of pay on notional basis as on 1.1.1986; and (ii) whether NPA is to be added to the mini....
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..... [Note : The actual prayers in each case vary slightly in form. What is given above is the general purport of the prayers in these petitions]. The said writ petitions have been transferred to this Court, in pursuance of applications for transfer filed by the Union of India. 8. To understand the grievance of the petitioners, it is necessary to give an illustration : Lt. General R. K. Upadhyay - (Petitioner No. 2 in W.P. No. 1845/2002 on the file of Delhi High Court corresponding to T.P.(C) No. 833/2002) : Pension with effect from 1.7.1991 Original pension sanctioned as per PPO No.M/003476/91 (50 per cent of average reckonable emoluments, that is pay plus NPA) [Note : There was no Rank pay as it was admissible only to the Ranks from Captain to Brigadier] Rs. 4185 Pension with effect from 1.1.1996 Stage I : Pension as per Ministry's Circulars dated 24.11.1997 and 27.5.1998 i) Existing pension Rs. 4185 ii) Dearness Relief (96% of existing pension) Rs. 4018 iii) Int. Relief I Rs. 50 iv) Int. Relief II Rs.419 Fitment Weightage (40% of existing pension) Rs. 1674 Rs.10346 Stage III : Pension as per Ministry's circular dated 7.6.1999 , as clarified b....
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....y's Circular dated 7.6.1999. It is also opposed to the rule that in the case of Medical Officers, 'Pay' includes NPA, for all purposes. The Ministry had no authority to modify or dilute the President's Policy decision which is given effect by Circular dated 7.6.1999. 9.3) In the case of Medical Officers who retired on or after 1.1.1996, even after the clarificatory circular dated 11.9.2001, NPA is added to the basic pay in the revised pay-scale and 50% of the aggregate is being paid as 'retiring pension'. Adding NPA to the basic pay for arriving at the pension in the case of those who retired on or after 1.1.1996 and omitting to add NPA in the case of pre 1996 retirees amounts to hostile discrimination of pre 1996 retirees, violating Article 14 and the principles relating to pension laid down by this Court in D.S. Nakara vs. Union of India [1983 (1) SCC 305]. 9.4) The Delhi High Court had struck down a similar clarificatory Circular dated 19.10.1999 relating to Civilian Medical Officers (corresponding to Defence Ministry Circular dated 11.9.2001 under challenge in these petitions) by judgment dated 18.5.2002. That decision has attained finality and the Uni....
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....with proportionate reduction for retirees with lesser period of qualifying service. The basis for calculating the pension in respect of those who retired prior to 1.1.1996, and those retired on or after 1.1.1996 happens to be the same. The retiring pension is 50% of the average reckonable emoluments for retirees with 33 years of qualifying service, with proportionate reduction for those with lesser years of qualifying service. The President's decision given effect by Circular dated 7.6.1999 only extends to all pre 1996 retirees, who did not have the benefit of fixation of pension with reference to the revised pay scales which came into effect on 1.1.1996, the benefit of the said revised pay scales, albeit in a limited manner. In so doing, it also puts those who retired on or after 1.1.1986 and pre 1986 retirees on par and on a common platform, removing the disparity, if any, in their pensions. 12. When the Fifth Central Pay Commission recommendations were implemented, the pension of those who retired prior to 1.1.1996, was rationalized by directing that their pension shall be the aggregate of (a) existing pension; (b) dearness relief; (c) interim relief I; (d) interim relief I....
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....nd gets periodical increases (increments) and reaches the maximum or ceiling in the pay scale. Each stage in the pay scale starting from the initial pay and ending with the ceiling in the pay scale, when applied to an employee is referred to as 'basic pay' of the employee. Whenever the government revises the pay scales, a fitment exercise takes place as per the principle of fitment (formula) provided in the rules governing the revision of pay so that the 'basic pay' in the old scale is converted into a 'basic pay' in the revised pay scale. When the circular dated 7.6.1999 used the words '50% of the minimum pay in the revised scale of pay', it referred to 50% of the initial pay in the revised scale of pay. If the old scale of pay was Rs. 7300- 100-7600 and if the revised scale of pay was Rs. 22400-525-24500, the minimum pay in the revised scale of pay would be Rs. 22400 and 50% of the minimum pay in the revised scale of pay would be Rs. 11200/-. 14. It is no doubt true that the term 'pay', with reference to medical officers, includes the basic pay and NPA. But the term 'basic pay' does not include NPA. In the absence of any special de....
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....ension. 17. Another grievance of the petitioners is that prior to circular dated 7.6.1999, the pay and pension of medical officers was always more than the pay and pension of non-medical officers of the same rank, in view of NPA element, and by virtue of the clarificatory circular dated 11.9.2001, the pension of both categories, (Medical Officers and non-Medical Officers), who retired prior to 1996, became equal. The petitioners contend that even after stepping up under Circular dated 7.6.1999, the disparity which earlier existed between Medical Officers and Non-Medical Officers of the same rank, should be maintained. They point out that if the pension of medical officers and non-medical officers of the same rank should be the same, the purpose of giving NPA as part of pay to Medical Officers was defeated and NPA became illusory. We cannot agree. When the purpose of stepping up pension is to ensure that all retirees of the same rank get pension which is not less than the prescribed minimum, it would be unjust for a section to say that merely because they were earlier enjoying a higher pension than others of the same rank, such disparity should be continued, even after stepping up.....
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....retire with the same rank need not be given identical pension, where their average reckonable emoluments at the time of their retirement were different, in view of the difference in pay, or in view of different pay scales being in force. c) When two sets of employees of the same rank retire at different points of time, it is not discrimination if : (i) when one set retired, there was no pension scheme and when the other set retired, a pension scheme was in force. (ii) when one set retired, a voluntary retirement scheme was in force and when the other set retired, such a scheme was not in force; or (iii) when one set retired, a PF scheme was applicable and when the other set retired, a pension scheme was in place. One set cannot claim the benefit extended to the other set on the ground that they are similarly situated. Though they retired with the same rank, they are not of the 'same class' or 'homogeneous group'. The employer can validly fix a cut-off date for introducing any new pension/retirement scheme or for discontinuance of any existing scheme. What is discriminatory is introduction of a benefit retrospectively (or prospectively) fixing a cut ....
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....o pre- 1996 retirees by way of stepping up, amounts to discrimination. 22. The contention that NPA is taken into account in the case of post 1.1.1996 retirees but not pre 1996 retirees is untenable. NPA is taken as part of 'pay' in the case of both pre and post 1.1.1996 retirees. NPA is not taken into account in the case of any retiree for applying the stepping up benefit under circular dated 7.6.1999. It is a different matter that post 1.1.1996 retirees do not require the benefit under the circular dated 7.6.1999. As already noticed, while calculating pension of the pre 1996 retirees, NPA had already been taken into account as part of 'pay', and that pension which was determined after taking into account NPA, is found to be less than the minimum guaranteed under the circular dated 7.6.1999, their pension is being increased to the minimum provided in the circular dated 7.6.1999. NPA cannot again be added to the minimum to step up the pension. If that is done, it will amount to taking NPA into account twice for purposes of pension, which is impermissible. The contention of discrimination between pre 1.1.1996 retirees and post 1.1.1996 retirees is, therefore, imagina....
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....of this Court under Article 136 of the Constitution, for seeking redressal therefor. At other times, it is also possible for the State, not to file appeals before this Court in some matters on account of improper advice or negligence or improper conduct of officers concerned. It is further possible, that even where S.L.Ps are filed by the State against judgments of High Court, such S.L.Ps may not be entertained by this Court in exercise of its discretionary jurisdiction under Article 136 of the Constitution either because they are considered as individual cases or because they are considered as cases not involving stakes which may adversely affect the interest of the State. Therefore, the circumstance of the non-filing of the appeals by the State in some similar matters or the rejection of some S.L.Ps in limine by this Court in some other similar matters by itself, in our view, cannot be held as a bar against the State in filing an S.L.P. or S.L.Ps in other similar matters where it is considered on behalf of the State that non-filing of such S.L.P. or S.L.Ps and pursuing them is likely to seriously jeopardize the interest of the State or public interest." The said observations app....
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....ule/order, which is subsequently found to be erroneous. Such relief, restraining recovery back of excess payment, is granted by courts not because of any right in the employees, but in equity, in exercise of judicial discretion, to relieve the employees, from the hardship that will be caused if recovery is implemented. A Government servant, particularly one in the lower rungs of service would spend whatever emoluments he receives for the upkeep of his family. If he receives an excess payment for a long period, he would spend it genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship to him, relief is granted in that behalf. But where the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment, Courts will not grant relief against recovery. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery. 26. On the same principle, pensioners can also seek a direction that wrong payments should....
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....y the prayer for instalments. If any decision which upholds the refixation of pay/pension does not contain any consequential direction not to recover the excess payment already made or contains a consequential direction to recover the excess payment in instalments, it is not thereby laying down any proposition of law but is merely issuing consequential direction in exercise of judicial discretion, depending upon the prayer for consequential relief or absence of prayer for consequential relief as the case may be, and the facts and circumstances of the case. Many a time, the prayer for instalments or waiver of recovery of excess, is made not in the pleadings but during arguments or when the order is dictated upholding the order revising or re-fixating the pay/pension. Therefore, the decision in Sujatha Vedachalam (supra) will not come in the way of relief being granted to the pensioners in regard to the recovery of excess payments. 28. The learned Additional Solicitor General next submitted that in so far as refund of the excess pension relating to the period 11.9.2001 to date, the petitioners who have obtained interim orders of stay, should be made liable to pay interest, as the pe....