TMI Blog2006 (10) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;). All of them retired prior to 1.1.1996. These petitions involve a common question relating to calculation of their pension. 2. Defence Ministry Circular dated 31.12.1965 barred private practice (which was a traditionally enjoyed privilege) by AMC officers with effect from 1.1.1966 and conveyed the sanction of the President to the grant of a Non-Practising Allowance ('NPA' for short) to all AMC officers irrespective of the rank, with a stipulation that such NPA shall be treated as Pay for all purposes. Ministry circular dated 2.11.1987 clarified that NPA will be treated as '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 ₹ 600/- for basic pay below ₹ 3000/-, ₹ 800/- for basic pay between ₹ 3000/- and ₹ 3700/- and ₹ 900/- for basic pay of ₹ 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 ₹ 29,500/-). G.O. No. 2/S/98, issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;with effect from 1.1.1996, pension of all Armed Forces pensioners irrespective of their date of retirement shall not be less than 50% of the minimum pay in the revised scale of pay introduced with effect from 1.1.1996 of the rank, held by the pensioner.' The circular provided that the revision of pension should be undertaken as follows in case of commissioned officers (both post and pre 1.1.1996 retirees) : i) Pension shall continue to be calculated at 50% of the average emoluments in all cases and shall be subject to a minimum of ₹ 1275/- p.m. and a maximum of upto 50% of the highest pay applicable to Armed Forces personnel 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 pensio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 11.9.2001 and the consequential corrigenda to their PPOs reducing their pension. The petitioners therefore filed writ petitions, in different High Courts for the following reliefs :- i) For quashing the circular dated 11.9.2001 and/or for a direction to respondents not to give effect to the said circular. ii) For quashing the consequential corrigenda PPOs, issued to the petitioners by the Controller of Defence Accounts. iii) For a direction to the respondents, to take into account, NPA at the rate of 25% of the basic pay, including Rank Pay as was being done till the issue of circular dated 11.9.2001, while calculating their pension. [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 eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words minimum pay should be interpreted as minimum pay in the revised pay-scale plus NPA, in so far as Medical Officers entitled to NPA, as in their cases, the term 'Pay' wherever it occurs, means and includes basic pay plus NPA. 9.2) The Ministry had correctly understood the term 50% of the minimum pay in the revised scale of pay, used in the circular dated 7.6.1999 as 50% of the minimum in the revised pay-scale plus NPA , and on that basis issued modified PPOs., revising the pension. For example, in the case of Lt. Generals, where the applicable revised pay scale was ₹ 22,400-525-24,500, the Ministry took the minimum in the revised scale of pay (Rs.22,400/-) and added 25% thereof (Rs.5,600/-) as NPA and arrived at the pension as ₹ 14,000/- being 50% of the aggregate sum of ₹ 28,000/-. The Circular dated 11.9.2001, under the guise of a clarification, directed that NPA be omitted while calculating the 50% of the minimum pay in the revised pay scales, for purposes of stepping up. This amounted to unauthorized modification of the President's decision contained in the Ministry's Circular dated 7.6.1999. It is also opposed to the rule that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are required to extend a similar treatment to Defence Service Medical Officers also, by cancelling the Circular dated 11.9.2001. (iv) Even if the Circular dated 11.9.2001 is found to be valid, whether Respondents are not entitled to recover the excess payments made. Re : Question No. (i) : 11. We may first refer to the intent and purport of the Circular dated 7.6.1999. The Circular dated 7.6.1999 neither prescribes the requirements/qualifications for entitlement to pension nor the method of determination of pension. It only effectuates the President's decision that the pension (Which has already been determined in accordance with the applicable rules/orders) irrespective of the date of retirement, shall not be less than 50% of the minimum pay in the revised scales of pay introduced with effect from 1.1.1996. Pension is determined as per relevant rules/orders, by calculating the average of reckonable emoluments (basic pay, Rank Pay and NPA) drawn during the last 10 months of service and then taking 50% thereof as the retiring pension applicable to retirees with 33 years of qualifying service, with proportionate reduction for retirees with lesser period of qualifying s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cale of pay, it applies to those with 33 years of qualifying service and gets proportionately reduced for lesser period of qualifying service. 13. The emoluments of those who retired on or after 1.1.1996, calculated with reference to the basic pay in the revised scale of pay plus NPA will certainly be more than the minimum pay in the revised scale of pay and therefore, in their cases, the question of stepping up will not arise. On the other hand, as the pension of pre-1996 retirees was based on the basic pay under the old pay scale plus NPA, and as the old pay scale was much less than the 1996 revised pay scale, their pension required to be stepped up. The extent to which the existing pension should be stepped up is clearly specified in the Circular as minimum pay in the revised scale of pay . The words used do not give room for any confusion or doubt. A 'pay scale' has basically three elements. The first is the minimum pay or initial pay in the pay scale. The second is the periodical increment. The third is the maximum pay in the pay scale. An employee starts with the initial pay in the pay scale and gets periodical increases (increments) and reaches the maximum or cei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the revised scale of pay in the Circular dated 7.6.1999, as not less than 50% of the minimum pay in the revised scale of pay plus NPA . When the language used is clear and unambiguous and the intention is also clear, it is not permissible to add words to the Circular dated 7.6.1999 to satisfy what petitioners consider to be just and reasonable. Minimum pay in the revised scale of pay refers only to the initial pay in the revised scale of pay and not anything more. Due to a misinterpretation, NPA was included for the purpose of giving the benefit of stepping up the pension in the case of retired medical officers. The fact that NPA had already been taken into account while calculating the 'existing pension' of the medical officers who retired before 1.1.1996 was lost sight of. The fact that NPA is part of 'pay' and not part of 'basic pay' was also overlooked. Therefore, it became necessary to issue the clarification, which was done by circular dated 11.9.2001, clarifying that it was impermissible to again add NPA to 'the minimum pay in the revised pay scale' for the purpose of stepping up the pension. 17. Another grievance of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pension cannot be by different formula thereby applying an unequal treatment solely on the ground that some retired earlier and some retired later. If the retiree is eligible for pension at the time of his retirement and the relevant pension scheme is subsequently amended, he would become eligible to get enhanced pension as per the new formula of computation of pension from the date when the amendment takes effect. In such a situation, the additional benefit under the amendment, made available to the same class of pensioners cannot be denied to him on the ground that he had retired prior to the date on which the aforesaid additional benefit was conferred. b) But all retirees retiring with a particular rank do not form a single class for all purposes. Where the reckonable emoluments as on the date of retirement (for the purpose of computation of pension) are different in respect of two groups of pensioners, who retired with the same rank, the group getting lesser pension cannot contend that their pension should be identical with or equal to the pension received by the group whose reckonable emolument was higher. In other words, pensioners who retire with the same rank need not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the old scales of pay. Let us take the case of a Medical Officer of the rank Lt. General, with 33 years of service, who retired in the year 1998 after getting two increments in the revised pay scale. As the applicable pay scale is ₹ 22400-525-24500, his basic pay would have been ₹ 23,450/- at the time of retirement. 25% thereof namely ₹ 5863/- would be the NPA. If the reckonable emolument was ₹ 29313/-, pension will be 50% thereof, namely ₹ 14656/-. As the pension under the Rules (Rs.14656/-) was more than 50% of the minimum of revised pay scale (Rs.11200/-) assured under the circular dated 7.6.1999, the benefit of stepping up is not required in his case. It is only those whose pension was determined with reference to old scales of pay, and not the revised higher scale of pay, who require the benefit of the stepping up. Therefore, the contention that pre 1996 retirees and post 1.1.1996 retirees are being treated differently, is untenable. They are treated similarly. But the fact that post 1.1.1996 retirees do not require the benefit of stepping up, cannot by any stretch of imagination, give rise to a contention that the benefit given to pre- 1996 retir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be extended to them. The petitioners rely on the broad principles underlying estoppel by Judgment, legitimate expectation, and fairness in action in support of their contention. 24. Respondents have filed an affidavit dated 1.8.2006 admitting that in pursuance of the decision of the Delhi High Court, the circular dated 29.10.999 had been withdrawn but clarified that it was withdrawn only in regard to the civilian medical officers who were petitioners in the said writ petititions and not in regard to all civilian medical officers. It is contended that the fact that a decision of the High Court had been accepted or implemented in the case of some persons, will not come in the way of the Union of India resisting similar petitions filed by others, in public interest. 25. A similar contention was considered by this Court in State of Maharashtra vs. Digambar [1995 (4) SCC 683]. This Court held : Sometimes, as it was stated on behalf of the State, the State Government may not choose to file appeals against certain judgments of the High Court rendered in Writ petitions when they are considered as stray cases and not worthwhile invoking the discretionary jurisdiction of this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that in some cases the validity of the circular dated 29.10.1999 (corresponding to the Defence Ministry circular dated 11.9.2001) has been upheld and that decision has attained finality will not come in the way of State defending or enforcing its circular dated 11.9.2001. Re : Question No. (iv) 25. The last question to be considered is whether relief should be granted against the recovery of the excess payments made on account of the wrong interpretation/understanding of the circular dated 7.6.1999. This Court has consistently granted relief against recovery of excess wrong payment of emoluments/allowances from an employee, if the following conditions are fulfilled [Vide Sahib Ram vs. State of Haryana [1995 Suppl.1 SCC 18], Shyam Babu Verma vs. Union of India [1994 (2) SCC 521], Union of India vs. M. Bhaskar [1996 (4) SCC 416], and V. Gangaram vs. Regional Joint Director [AIR 1997 SC 2776] : a) The excess payment was not made on account of any misrepresentation or fraud on the part of the employee. b) Such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (9) SCC 187], this Court did not bar the recovery of excess pay, but directed recovery in easy instalments. The said decision does not lay down a principle that relief from recovery should not be granted in regard to emoluments wrongly paid in excess, or that only relief in such cases is grant of instalments. A direction to recover the excess payment in instalments or a direction not to recover excess payment, is made as a consequential direction, after the main issue relating to the validity of the order refixing or reducing the pay/allowance/pension is decided. In some cases, the petitioners may merely seek quashing of the order refixing the pay and may not seek any consequential relief. In some cases, the petitioners may make a supplementary prayer seeking instalments in regard to refund of the excess payment if the validity of the order refixing the pay is upheld. In some other cases, the petitioners may pray that such excess payments should not be recovered. The grant of consequential relief would, therefore, depend upon the consequential prayer made. If the consequential prayer was not for waiving the excess payment but only for instalments, the court would obviously conside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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