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Friday, November 29, 2013

Service matter - whether Non Practising Allowance (NPA) payable to the doctors employed in Central Health Services, the Railways and other Departments of the Government, who retired from service prior to 1.1.1996 is to be added to their basic pay for calculation of pension payable to them. = K.C. Bajaj and others …Appellants versus Union of India and others …Respondents = http://judis.nic.in/supremecourt/imgst.aspx?filename=41019

 whether Non Practising Allowance (NPA) payable to  the  doctors  employed
in Central Health Services,  the  Railways  and  other  Departments  of  the
Government, who retired from service prior to 1.1.1996 is  to  be  added  to
their basic pay for calculation of pension payable to them. =

whether NPA admissible as on 1.1.1986 is  to  be  taken  into  consideration
after re-fixation of pay on notional basis as on 1.1.1986 and  the  same  is
to be added to the minimum of  the  revised  scale  while  stepping  up  the
consolidated pension on 1.1.1996, the  Ministry  issued  clarification  vide
circular dated 11.9.2001 in the following terms:
      
“The undersigned is directed to refer to Ministry  of  Defence  Letter
      No. 1(1)/99/D(Pension/Services) dated 7-6-1999,  wherein  decision  of
      the Government that pension of all pensioners  irrespective  of  their
      date of retirement shall not be less than 50% of the  minimum  of  the
      revised scale of pay introduced with effect from 1-1-1996 of the  post
      last held by the pensioner was communicated….
      NPA granted to medical officers does not form part of  the  scales  of
      pay. It is a separate element, although it is taken into  account  for
      the purpose of computation of pension.


      This has been examined in consultation with the Department of  Pension
      and Pensioners’ Welfare and the Department of Expenditure  and  it  is
      clarified that NPA  is  not  to  be  taken  into  consideration  after
      refixation of pay on notional basis on 1-1-1986. It is also not to  be
      added to the minimum of the revised scale of pay  as  on  1-1-1996  in
      cases where consolidated pension is to be stepped up to 50%, in  terms
      of Ministry of Defence Letter No. 1(1)/99/D (Pension/Services) dated 7-
      6-1999.”



32.   This Court  treated  circular  dated  11.9.2001  as  clarificatory  in
nature  and  held  that  it  neither  amends  nor  modifies  circular  dated
7.6.1999.  
The most striking difference between O.M. dated  7.4.1998  issued
by Department of Pension and  Pensioners’  Welfare,  Ministry  of  Personnel
(Public Grievances and Pension)  and  circular  dated  7.6.1999
issued by the Defence  Ministry  is  that  the  decision  of  the  President
conveyed vide O.M. dated 7.4.1998 was that NPA shall count as  pay  for  all
service benefits including retirement benefits  but  no  such  decision  was
contained in circular dated 7.6.1999.  
Therefore, the  clarification  issued
by the Ministry of Defence vide circular dated 11.9.2001 cannot  be  equated
with O.M. dated 29.10.1999 which had the effect of  modifying  the  decision
of the President but was issued without  his  approval.  
Unfortunately,  the
Tribunal and the Division Bench of the  High  Court  overlooked  this  vital
distinction between O.M. dated 7.4.1998 issued by the Ministry of  Personnel
(Public  Grievances  and  Pension),  Department  of  Pension  and  Pensions’
Welfare and Circular dated 7.6.1999 issued by the Ministry  of  Defence  and
mechanically applied the ratio of Col. B. J. Akkara’s case for deciding  the
cases of the doctors, who served in Central Health  Services,  the  Railways
and other departments of the Government. Therefore, the  impugned  order  is
legally unsustainable.

33.   In the result, the appeals are allowed,  the  impugned  order  of  the
High Court as also the one passed by the Tribunal  are  set  aside  and  the
applications filed by the appellants before  the  Tribunal  are  allowed  in
terms of the prayer made.  The respondents shall  re-calculate  the  pension
payable to the appellants by adding  the  element  of  NPA.   This  exercise
shall be undertaken and completed by  the  concerned  authorities  within  a
period of three months from today.

                                                   REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                     CIVIL APPEAL NOS.10640-46   OF 2013
                (Arising out of SLP(C) Nos. 3358-64 of 2011)

K.C. Bajaj and others
…Appellants

                                   versus

Union of India and others                                     …Respondents

                                    WITH

                     CIVIL APPEAL NOS. 10647-48  OF 2013
                (Arising out of SLP(C) Nos. 3367-68 of 2011)

                       CIVIL APPEAL NO. 10649  OF 2013
                  (Arising out of SLP(C) Nos. 6596 of 2011)

                       CIVIL APPEAL NO. 10650  OF 2013
                  (Arising out of SLP(C) No. 6597 of 2011)

                     CIVIL APPEAL NOS.10652-56  OF 2013
        (Arising out of SLP(C).36318-22/13 CC Nos. 6086-6090 of 2012)


                               J U D G M E N T

G.S. SINGHVI, J.

1.    Leave granted.

2.    Whether final result of a case filed by a public servant  with  regard
to his service conditions is dependent on the arbitrary choice of the  State
and/or its agencies/instrumentalities to prosecute  the  matter  before  the
higher Courts is one of the questions which would require  consideration  in
these appeals filed against order dated 16.10.2010 of the Division Bench  of
the Delhi High Court whereby the writ  petitions  filed  by  the  appellants
questioning the correctness of order dated September 12, 2008 passed by  the
Central  Administrative  Tribunal,  Principal   Bench   (for   short,   ‘the
Tribunal’) were dismissed. The other question which calls for  determination
is whether Non Practising Allowance (NPA) payable to  the  doctors  employed
in Central Health Services,  the  Railways  and  other  Departments  of  the
Government, who retired from service prior to 1.1.1996 is  to  be  added  to
their basic pay for calculation of pension payable to them.

3.    The appellants are the doctors or the  legal  representatives  of  the
deceased  doctors,  who  were  employed  in  the  Central  Health  Services,
Government of India or the Railways and were  paid  NPA  as  part  of  their
monthly pay in lieu of private practice, availability  of  less  promotional
avenues and late entry in the service.
Initially, NPA was paid at  a  fixed
rate commensurate with the rank of the doctors  and  their  pay  scale.  
The
same  formula  was  adopted  by  successive  Pay  Commission.
The  5th  Pay
Commission revised the formula of calculating NPA and it  was  made  25%  of
the basic pay of a Government doctor.
The recommendations made by  the  5th
Pay Commission on this issue are contained in  para  52.16  of  its  report,
which is reproduced below:

      "52.16. Non-practicing allowance
      Non-practicing allowance is presently granted under a slab system with
      amounts ranging from Rs. 600 per month at the lowest level to Rs. 1000
      at the highest. It has been represented to us that prior to the  Third
      CPC, NPA was granted as a percentage of basic pay, ranging from 25  to
      40% at different levels, working out to an average of about 27%, which
      has, under the present arrangements dropped to as low as 12.5 to  16%.
      Doctors are also aggrieved that it does  not  count  forwards  Housing
      accommodation,  though  it  is  countable  for  all  other   purposes,
      including pension. There are also related demands for extension of NPA
      to other categories of professionals and Government servants who  have
      opportunities to earn in the open  market,  as  also  the  demand  for
      discontinuance of NPA by permitting private practice.  The  Third  CPC
      observed that NPA was granted to doctors in lieu of  private  practice
      on account of a traditionally enjoyed  privilege  as  well  as  lesser
      effective service and promotion prospects caused by  late  entry  into
      service. It did not favor private practice by doctors, and favored NPA
      as a separate element from pay-scales. It suggested a switchover to  a
      slab system instead of the existing rates with  monetary  limits.  The
      Fourth CPC enhanced the  rates  under  the  different  slabs,  besides
      granting it uniformly to  all  medical  officers.  The  administrative
      Ministry has suggested that  NPA  should  be  continued  and  also  be
      counted for purposes of  housing  accommodation  eligibility.  In  the
      matter of permitting limited private practice we have been advised  by
      expert opinion that it could be permitted in a limited  form  provided
      malpractices could be curbed. We also note that it is only doctors who
      are required to devote a lifetime to health care and  life  sustenance
      under oath as a part of their  qualifications.  We  do  not  recommend
      extension of NPA to any other category. We recommended that  the  slab
      system of granting NPA to doctors may be dispensed  with  and  NPA  be
      granted at a uniform rate of 25% of basic pay subject to the condition
      that pay plus NPA does  not  exceed  Rs.29,500,  i.e.  less  than  the
      maximum proposed for the Cabinet Secretary. It will continue to  count
      forwards all service and pensionary benefits as at present.  No  other
      change is called  for,  as  it  would  disturb  relatives  with  other
      services. We are also not in favour of permitting private practice  in
      any form at this stage."



4.    In paragraphs 137.15, 137.19 and 137.20 of its  report,  the  5th  Pay
Commission recommended that pension of pre 01.01.1986 retirees  as  well  as
the post 01.01.1986 retirees should not be less than 50% of the minimum  pay
in the revised pay- scales at the time of the retirement.

5.     In  furtherance  of  the  decision  taken  by  the  Government   vide
Resolution dated 30.9.1997 for implementation of the recommendations of  5th
Central Pay Commission and in continuation of the instructions contained  in
O.M. No.45/86/97-P&PW(A)-Part II dated  27.10.1997,  the  Government  issued
O.M. dated 10.2.1998 for grant of revised  pension  to  those  who  were  in
receipt of specified types of pensions  as  on  1.1.1996  under  Liberalised
Pension Rules, 1950,  Central  Civil  Services  (Pension)  Rules,  1972,  as
amended from time  to  time,  and  the  corresponding  rules  applicable  to
railway pensioners and pensioners of All India Services. As per  O.M.  dated
10.2.1998, pay of the employees who had retired prior to 1.1.1996 was to  be
fixed on notional basis at par with the serving employees and their  pension
was to be fixed at par with those who retired after 1.1.1996.   The  Railway
Board adopted the policy contained in O.M. dated 10.2.1998 and issued  order
dated 10.3.1998.

6.      Vide  O.M.  dated  7.4.1998,   the  Ministry  of  Personnel  (Public
Grievances and Pension),  Department  of  Pension  and  Pensioners’  Welfare
fixed the NPA ratio at 25% of the basic pay subject to  the  condition  that
pay plus NPA shall not exceed  Rs.29,500/-  for  the  doctors  belonging  to
Central Health Services. It was also mentioned that NPA shall count  as  pay
for all service  benefits  including  retiral  benefits.  For  the  sake  of
convenient reference, O.M. dated 7.4.1998 is reproduced below:
                        “Office Memorandum

                                             Dated 07.04.1998
      To
      All Participating Unit of
      Central Health Service

      Subject: Recommendation of the 5th Central Pay Commission -  Grant  of
      Non Practicing Allowance at revised rates to  Central  Health  Service
      Officers.


      S/Madam,

      In supersession of this Ministry's letter of  even  number  dated  the
      20th March, 1998 on the above subject I am directed to  say  that  the
      President is pleased to decide that Central  Health  Service  officers
      may be paid Non Practicing Allowance @ 25% of their Basic Pay  subject
      to the condition that Pay plus  Non  Practicing  Allowance,  does  not
      exceed Rs. 29,500/-.

   2. The Non Practicing Allowance shall count  as  'pay'  for  all  service
      benefits including retirement benefits as hitherto.

   3. This issue with the approval of Ministry  of  Finance  (Department  of
      Expenditure) U.O. No. 7(25)E-III A-97 dated 7.4.1998.


      Yours faithfully,
      Sd/-
      (H.N. YADAV)

      UNDER SECRETARY TO THE GOVERNMENT OF INDIA.”

                                                         (emphasis supplied)




7.    After eight months, the Ministry of Personnel (Public  Grievances  and
Pension) issued O.M. dated 17.12.1998 incorporating the  decision  taken  by
the President that w.e.f. 1.1.1996, pension of  pensioners  irrespective  of
the date of their retirement shall not be less than 50% of the  minimum  pay
in the revised scale of pay introduced from 1.1.1996 of the post  last  held
by the pensioner.
The same reads as under:

       "Department of Pen. & PW OM F.No. 45/10/98-P&PW (A) dated 17.12.1998.


      Minimum Pension and Minimum Family Pension to be 50% and  30%  of  the
      minimum pay of the post held at the time of retirement/death.


      The undersigned is directed to say that in the wake of a large  number
      of representations received by the  Government  from  the  Pensioners'
      Associations as well as individuals, the Government  has  reconsidered
      its  decision  on  the  recommendations  of  the  Fifth  Central   Pay
      Commission regarding revision of pension/family pension  as  contained
      in Paras 137.14 and 134.30 of the report. The President is now pleased
      to decide that with effect from 1.1.1996, pension  of  all  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 post last held by  the  pensioner.  However,  the
      existing provisions in  the  rule  governing  qualifying  service  and
      minimum pension shall continue to be operative. Similarly, with effect
      from 1.1.1996 family pension shall not be less than 30% of the minimum
      pay in the revised scale introduced with effect  from  1.1.96  of  the
      post  last  held  by  the   pensioner/deceased   Government   servant.
      Accordingly, so far as persons governed by CCS (Pension)  Rules,  1972
      are concerned, orders contained in the following Office  Memoranda  of
      this Department as amended from time  to  time  shall  be  treated  as
      modified as indicated below. O.M. No. 45/86/97-P & PW (A)-Pt. I, dated
      October 27, 1997.


      2. The first sentence of paragraph 5 of the Office Memorandum relating
      to "Pension" may be substituted by the following :-


      "Pension shall continue  to  be  calculated  at  50%  of  the  average
      emoluments in all cases and shall be, subject to a minimum of Rs.1,275
      per month and a maximum of upto 50% of the highest pay  applicable  in
      the Central  Government,  which  is  Rs.30,000  per  month  since  1st
      January, 1996, but the full pension in no case shall be les  than  50%
      of the minimum of the revised scale of pay introduced with effect from
      1st January, 1996 for the post last held by the employee at  the  time
      of his retirement However, such pension will be suitably  reduced  pro
      rata where the pensioner has less than the  maximum  required  service
      for full pension as per the rule (Rule 49 of CC (Pension) Rules, 1972)
      applicable  to   the   pensioner   as   on   the   date   of   his/her
      superannuation/retirement and in no case it will be less than Rs.1,275
      p.m."
                                                         (emphasis supplied)



8.    However, in the garb of answering the clarification sought by some  of
the Departments/Ministries, whether NPA admissible as on 1.1.1986 is  to  be
taken into consideration  after  fixation  of  pay  on  notional  basis  and
whether the same is to be added to the minimum of the revised   scale  while
stepping  up  consolidated  pension,  the  Ministry  of  Personnel,   Public
Grievances and Pensions issued O.M. dated 29.10.1999, which reads as  under:


                            “No. 45/3/99-P&PW(A)
                             Government of India
             Ministry of Personnel Public Grievances & Pensions
                 Department of Pension & Pensioners Welfare


                                      New Delhi, Dated  the 29 October, 1999


                              Office Memorandum


           Subject :  Implementation of Government of India decision on the
           recommendations of Vth CPC - Revision  of  Pension  of  Pre-1996
           pensioners.


                 The undersigned is directed to refer to this  Department’s
           O.M. No. 45/10/98-P  &PW(A)  dated  December  17,  1998  wherein
           decision of the  Government   that  pension  of  all  pensioners
           irrespective of their date of retirement shall not be less  than
           50% of the minimum of revised scale  of  pay  introduced  w.e.f.
           1.1.96 of the post last held by the pensioner  was  communicated
           clarifications have been sought by Departments/Ministries as  to
           whether Non-Practising Allowance (NPA) admissible as  on  1/1/86
           is to be taken into consideration after  refixation  of  pay  on
           notional basis as on 1/1/86 and whether NPA is to  be  added  to
           the minimum of the revised scale while considering  stepping  up
           consolidated pension on 1/1/96. NPA granted to medical  officers
           does not form part of the  scales  of  pay.  It  is  a  separate
           element although it is taken into account  for  the  purpose  of
           computation of pension. This has been examined  in  consultation
           with the Department of Expenditure and  it  is  clarified   that
           N.P.A. is not to be taken into consideration after refixation of
           pay on notional basis on 1/1/86. It is also not to be  added  to
           the minimum of the revised scale of pay as on 1.1.1996 in  cases
           where consolidated pension/family pension is to be stepped up to
           50% / 30% respectively, in terms of O.M. 45/10/98 -P&PW(A) dated
           17.12.98.


           2. This issues with the approval of Department  of  Expenditure,
           Ministry of Finance vide U.O. No. 806/EV/99 dated 29.9.1999.


           3. Hindi version will follow.
                                                        Sd/-
                                                              (GANGA MURTHY)
                                                              Director (PP)”



9.    Dr. K.C. Garg and others, who  had  retired  from  Railways  prior  to
1.1.1996, challenged O.M. dated  29.10.1999  by  filing  applications  under
Section 19 of the Administrative Tribunals Act, 1985 (for short, ‘the  Act’)
and prayed that the same may be quashed and the respondents be  directed  to
include the element of NPA for the purpose of computing the pension  payable
to them. Their applications were dismissed by the Tribunal vide order  dated
5.10.2001. That order was set aside by the Division Bench of the Delhi  High
Court in CWP No.7322/2001 – Dr. K.C. Garg and others v. Union of  India  and
others and connected matters. The High Court relied upon OM  dated  7.4.1998
in which it was categorically mentioned that NPA shall be  treated  as  part
of service benefits including retirement benefits and concluded  that  there
was no justification to exclude the  element  of  NPA  for  the  purpose  of
calculating the pension.  Paragraphs 5.0, 5.2  to  6.0,  10.3,  10.4,  11.1,
11.2, 11.3 and 12 of order dated 18.5.2002 passed by the High Court read  as
under:

      “5.0 History of grant of N.P.A. clearly shows that the same was  being
      granted in lieu of private practice. It was also granted having regard
      to availability of less promotional  avenue  and  late  entry  in  the
      service, N.P.A. was granted in terms of Fundamental  Rule  9(21)(a)(i)
      read with Fundamental Rule 9(21)(a)(ii), which read thus:-


      "F.R. 9: Unless there be something repugnant in the subject of context
      the terms defined in this Chapter are used in the Rules in  the  sense
      here explained:-


      xxx              xxx              xxx              xxx


      (21)(a) Pay means the amount drawn monthly by a Government servant as
      (i) the pay other than special pay or  pay  granted  in  view  of  the
      personal qualifications which has been sanctioned for a post  held  by
      him substantively or in an officiating capacity  or  to  which  he  is
      entitled by reason of his position in a cadre:
      (ii) overseas pay, special pay and personal pay; and
      (iii) any other emoluments which may be specially classed  as  pay  by
      the President."


      xxx              xxx              xxx              xxx


      5.2   It also appears that the Ministry of Health and  Family  Welfare
      in terms of  the  instructions,  as  contained  in  the  letter  dated
      07.04.1998, categorically stated that N.P.A. be treated to be a pay by
      way of service benefits including  retirement  benefits.  It  is  also
      beyond any cavil of doubt that 25% of the basic  pay  was  recommended
      towards payment of N.P.A. by the 5th CPC, which was  accepted  by  the
      Government of India in terms of its circular letter dated 07.04.1998.


      5.3   By reason of the aforementioned recommendations, an attempt  had
      been made to bring pre-01-01-1986 retirees and post-01-01-1986 at  par
      having regard to the  fact  that  the  rates  of  their  pension  were
      slightly different. By reason of the  said  recommendation,  the  slab
      system, which was prevailing thitherto having been given a go  by  and
      in place thereof payment of 25% of the  basic  pay  as  N.P.A.  w.e.f.
      01.01.1996 was recommended. In other words, a revolutionary  step  was
      taken by the 5th CPC by making recommendations  so  that  the  retiral
      benefits is enhanced not only for  pre-01-01-1986  retirees  but  also
      post-01-01-1986 retirees at par.


      5.4   In para 137.13 of its Report, the 5th CPC clearly stated that it
      was desirable  to  grant  complete  parity  in  pension  to  all  past
      pensioners irrespective of the date of their  retirement,  but  having
      regard to the fact that the same was not  found  to  be  feasible  and
      having regard to the considerable financial implications, a suggestion
      was made that the process of bridging the gap in the matter of payment
      of pension would  be  fulfillled  if  certain  additional  reliefs  be
      granted in addition to the recommendations of the Fourth  Central  Pay
      Commission (in short, '4th CPC’) in terms whereof the past  pensioners
      were granted additional relief in addition  to  the  consolidation  of
      their pension.


      5.5. Yet again in para 137.14 of its Report, the 5th  CPC  recommended
      that as a follow up of their basic objective of parity, the pension of
      all pre-01-01-1986 retirees should be updated by notional fixation  of
      their pay as on 01.01.1986 by adopting the same  formula  as  for  the
      service benefits. Pursuant whereto, all the past pensioners of pre-01-
      01-1986 were to be brought on a common platform so as  to  grant  them
      the benefit of the revision of pay scale as recommended by 4th CPC  as
      on 01.01.1986. It  was  further  laid  down  that  all  pre-01-01-1986
      pensioners, who had been  brought  on  to  the  4th  CPC  by  notional
      fixation of their pay  and  who  had  retired  after  01.01.1986,  the
      recommendation was that the consolidated pension  would  not  be  less
      than 50% of the minimum pay of the post as revised by the 5th CPC.


      6.0   It is, therefore, evident that the 5th CPC recommendations  were
      to bring all the pensioners whether pre-01-01-1986 retirees or post-01-
      01-1986 on a common platform.  The  recommendations  in  no  uncertain
      terms suggest that the payment of pension of  pre-01-01-1986  retirees
      and  post-01-01-1986  retirees  should  be  the  same.   The   Central
      Government  admittedly  acted   in   terms   of   the   aforementioned
      recommendations by determining the pension, which was  not  less  than
      50% of the minimum of their pay in the revised pay-scale of  the  post
      held by the pensioners at the time of  retirement  w.e.f.  01.01.1986.
      For the said purpose, the minimum of the pay revised in the 5th CPC of
      the post concerned was determined were with 25% of the pay  as  N.P.A.
      was added and 50% thereof had been taken as revised minimum pension as
      per the qualifying service.


      10.3  It is difficult for us to accept the contention that despite the
      fact that N.P.A. shall form part of  pay  so  far  as  post-01-01-1986
      retirees are concerned, the same would not form part  of  pay  despite
      provisions in the Fundamental Rules so far as pre-01-01-1986  retirees
      are concerned. The 5th CPC has taken into  consideration,  as  noticed
      hereinbefore, the history of grant  of  N.P.A.  and  wherefrom  it  is
      evident that N.P.A. became part of pay.


      10.4  It is not a case where cut-off date has been fixed. The  Central
      Government is entitled for the purpose  of  determination  of  pension
      pursuant to the policy decision to fix a cut-off date. It is also true
      that  such  a  cut-off  date  cannot  be  held  to  be  arbitrary  and
      irrational, as it was not picked out of a hat. However, in the instant
      case, we are not concerned with any cut-off date, but we are concerned
      with the question as to whether despite  recommendations  of  the  5th
      CPC, a discrimination can be made. The  very  fact  that  the  Central
      Government accepts that the emoluments would mean basic pay  +  N.P.A.
      in view of its definition as existing in the Rule 9(21)(a)(i)  of  the
      Fundamental Rules, there cannot be any reason  whatsoever  as  to  why
      N.P.A. shall be considered to be a part  of  pay  for  post-01-01-1986
      retirees and not for pre-01-01-1986 retirees.


      11.1  We may, in this connection,  notice  that  emoluments  has  been
      defined in Rule 33 of CCS  (Pension)  Rules,  1972  in  the  following
      terms:-


      "The expression 'emoluments'  means  basic  pay  as  defined  in  Rule
      9(21)(a)(i) of the Fundamental Rules which  a  Government  servant  is
      receiving immediately before his retirement or  on  the  date  of  his
      death and will also include Non Practising Allowance  granted  to  the
      Medical Officer in lieu of private practice."
      Thus, even in terms of the aforementioned definition, N.P.A. would  be
      part of pay.


      11.2 In D.S. Nakara and Ors. v. Union of India., it is stated:-
      "42. If it appears to be undisputable, as  it  does  to  us  that  the
      pensioners for the purpose of pension benefits form a class, would its
      upward  revision  permit  a  homogeneous  class  to  be   divided   by
      arbitrarily fixing an eligibility criteria  unrelated  to  purpose  of
      revision, and would such classification be founded  on  some  rational
      principle? The classification has to be based, as is well settled,  on
      some rational principle and the rational principle must have nexus  to
      the objects sought to  be  achieved.  We  have  set  out  the  objects
      underlying  the  payment  of  pension.  If  the  State  considered  it
      necessary to liberalise  the  pension  scheme,  we  find  no  rational
      principle behind it for granting these  benefits  only  to  those  who
      retired subsequent to that date simultaneously  denying  the  same  to
      those who retired prior  to  that  date.  If  the  liberalization  was
      considered necessary for augmenting social  security  in  old  age  to
      government servants then those who retired earlier cannot be worse off
      than  those  who  retired  later.  Therefore,  this   division   which
      classified pensioners into two classes is not based  on  any  rational
      principle and if  the  rational  principle  is  the  one  of  dividing
      pensioners with a view to giving something more to  persons  otherwise
      equally placed, it would be discriminatory. To  illustrate,  take  two
      persons, one  retired  just  a  day  prior  and  another  a  day  just
      succeeding the specified date. Both were in the same pay bracket,  the
      average emolument was the same and both had put  in  equal  number  of
      years of service."


      11.3  Yet again in V. Kasturi v.  Managing  Director,  State  Bank  of
      India, Bombay and Anr., the Apex Court pointed that in  D.S.  Nakara's
      case (supra) a distinction has been made between a new  scheme  and  a
      liberalized pension scheme. When a new scheme  come  into  force,  the
      same may not apply to the persons who had retired prior  thereto,  but
      when there is a revision in the  existing  scheme  by  way  of  upward
      revision, the scheme should be applied.

      12.   For the reasons aforementioned, the  impugned  order  cannot  be
      sustained, which is set aside accordingly. These  writ  petitions  are
      allowed. However, in the facts and circumstances of  the  case,  there
      shall be no orders as to cost.”



10.   The aforementioned order of the Delhi High  Court  was  challenged  by
the respondents by filing special  leave  petitions,  which  were  converted
into Civil Appeal Nos. 1972-1974/2003.  During the pendency of the  appeals,
other similarly situated doctors made representations for grant  of  benefit
in terms of the High Court’s order.   Thereupon,  the  Government  of  India
made a reference to the Attorney General  and  sought  his  opinion  on  the
question whether judgment of the Delhi High Court was correct and should  be
accepted. The Attorney General considered the  relevant  rules,  the  Office
Memorandums and gave detailed opinion, which reads thus:
                                  “OPINION


      Sub: Regarding the inclusion of  Non  Practising  Allowance  (NPA)  to
      Pensioners Doctors in the calculation of pension.


      1. Doctors in the Central Government who retired prior  to  01.01.1996
      are aggrieved by the Office Memorandum dated 29.10.1999 issued by  the
      Government of India, Ministry  of  Personnel,  Public  Grievances  and
      Pension, Department of Pensions and  Pensioners  Welfare  [hereinafter
      referred to as MoPP] which  inter-alia  provides  that  Non-Practising
      Allowance [NPA] is not to be taken into consideration after refixation
      of their pay and as a result NPA is not to be added to the minimum  of
      the revised scale of pay as on 01.01.1996 in cases where pension is to
      be stepped up to 50% in terms of the earlier O.M. dated 17.12.1998.


      2. As per the Rule 9(21)(a)(i) of the Fundamental Rules, NPA  forms  a
      part of the pay of a government doctor and is taken into  account  for
      computing dearness allowance,  entitlement  of  IADA  for  sanctioning
      advances under GFRs, House Building Advance and  other  allowances  as
      well as for calculation of retrial benefits.


      3. By an Office  Memorandum  dated  27.10.1997  issued  by  MoPP,  the
      Government  decided  to  accept  the  modified  parity  formula  while
      implementing the recommendations of the Vth Pay Commission  Government
      servants who retired before 01.01.1986 [i.e. before the implementation
      of the IVth Pay Commission] and those who  retire  before   01.01.1996
      [i.e.   before   implementation   of the   Vth  Pay  Commission]  were
      sought to be brought at par by the notional fixation  of  pay  of  the
      first category as of 01.01.1986 and thereafter consolidation of  their
      pension as on 01.01.1996.


      4. A number of representations were received by  the  Government  from
      Government servants who retired prior to 01.01.1996 and  they  claimed
      parity with government servants  who  retired  after  01.01.1996.   By
      Office Memorandum dated 17.12.1998, issued by MoPP, the Government  of
      India sought to achieve parity between  pre  01.01.1996  retirees  and
      post 01.01.1996 retirees. By the aforesaid O.M., it was provided  that
      pension/ family pension of pre 01.01.1996 retirees  would  be  stepped
      upto 50% / 30% of the minimum of the corresponding  revised  scale  of
      pay in respect of that  post  as  on  01.01.1996.  Thus,  all  retired
      government officers retiring from a particular post were to  be  given
      pension which was comparable to a large extent. This decision  of  the
      Government finds some support from the judgment of the  Supreme  Court
      in D.S. Nakara v. Union of India, AIR 1983 SC 130.


      5. Like all retired government servants,  government  doctors  of  the
      Central Health Scheme were also given benefit of stepping up of  their
      pension to 50% of the minimum revised scale of pay as on 01.01.1996 by
      including NPA being granted to the government doctors in that scale of
      pay and such stepped pension was in fact paid to them.


      6. However, subsequently on 29.10.1999, as mentioned herein above, the
      MoPP issued Office Memorandum making a technical  distinction  between
      pay and scale of pay and provided that since NPA cannot be given while
      stepping the pension up to 50%.


      7. The government  doctors  who  retire  after  01.01.1996  would  get
      benefit of NPA as it forms a part of their pay.  Hence,  just  on  the
      basis only of date  of  retirement,  there  would  be  wide  disparity
      between pension of government  doctors,  i.e.  who  retired  prior  to
      01.01.1996 would get much less pension then  those  who  retire  after
      01.01.1996.


      8. The distinction between 'pay' and 'scale of pay' made  out  in  the
      Office Memorandum dated 29.10.1999 to deny  benefit  of  NPA  for  the
      purpose of stepping up of the pension to 50%, is purely technical  and
      mechanical distinction and does not  take  into  account  the  special
      position of NPA qua a Government doctor.


      9. NPA is a matter of right of government doctor and  is  meant  as  a
      compensation  for denial  of private  practice.   The   scale  of  pay
      prescribed...... department of the Government of India  and  does  not
      account the special feature of  Central  Health  Service.  In  Central
      Health Service, NPA de jure and de facto is a part of the scale of pay
      as it is inevitably linked to the basic pay. Simply because NPA is not
      formally included in the scale of pay of the  government  doctors  and
      taken as a separate element, it cannot be said  that  NPA  has  to  be
      ignored altogether for stepping up  of  pension.  NPA  is  a  separate
      element only because scales of  pay  of  government  servants  are  of
      general application and not meant for individual services. However, if
      an element is inevitably a part of the pay, as NPA is,  in  effect  it
      has to be construed as a scale of pay.


      10. Since, NPA for government doctors is a part of their pay, it would
      be discriminatory if retired government doctors are denied benefit  of
      stepping up of their pension without reference to  the  NPA  presently
      given to serving doctors and those who  retire  after  01.01.1996.  In
      fact, denial of NPA to pre 01.01.1996 retired government doctors would
      fall foul of the  guarantee  of  equality  under  Article  14  of  the
      Constitution.


      11. The fixation of pension and stepping up of the same to 50% of  the
      revised scale of pay for pre 01.01.1996 retirees as  provided  by  the
      Government of India in its Official Memorandum  dated  17.12.1998  was
      meant to achieve  parity  amongst  all  retired  government  servants,
      including government doctors. The comparison of pension being paid  to
      the government doctors who retired prior to 01.01.1996 has to be  made
      with the pension to be paid to government doctors  who  retired  after
      01.01.1996. If the  latter  category  is  given  benefit  of  NPA  for
      calculation of their pension, the former category cannot be denied the
      same by reference to a general scale of pay governing  all  government
      servants  without  considering  the  special  feature  of   government
      doctors.


      12. The Delhi High Court in its order dated  18.05.2002  in  CWP  Nos.
      7322, 7826 and 7878 of 2001 has quashed the  Office  Memorandum  dated
      29.10.1999. In the said  order,  the  High  Court  has  quite  rightly
      observed that the benefit sought to be given by the earlier  OM  dated
      17.12.1998 was wrongly taken away by the OM dated 29.10.1999. The High
      Court has observed that in  view  of  the  stated  objectives  of  the
      Government to provide parity in pension  amongst  government  doctors,
      NPA would have to be necessarily taken into account for stepping up of
      pension to 50% of the revised scale of pay has been held to  be  ultra
      vires the Constitution.

      13. The Government of India has filed an SLP against the order of  the
      Delhi High Court dated 18.05.2002. The reason for grant  of  leave  in
      this case is the conflicting decisions of the Delhi High Court and the
      Chennai Bench of the Central Administrative Tribunal on one  hand  and
      the Principal Bench of the Central Administrative Tribunal, New  Delhi
      on the other. I have no hesitation in opining  that  the  judgment  of
      Justice S.B. Sinha, now a judge of the Supreme Court  is  correct  and
      should be accepted in preference to the view of the Principal Bench of
      the Central Administrative Tribunal, Delhi.  Consequently  steps  will
      have to be taken with regard to the pending Special Leave Petition.”



11.   After considering the opinion  of  the  Attorney  General,  the  Prime
Minister accorded his approval for acceptance of  the  order  of  the  Delhi
High Court in K. C. Garg’s case. As a sequel to this,  I.A.  Nos.16-18  were
filed for withdrawal of Civil Appeal Nos.  1972-1974/2003.   The  same  were
allowed by this Court vide  order  dated  13.5.2005  and  the  appeals  were
dismissed as withdrawn.

12.   On 22.6.2005, the  Department  of  Pension  and  Pensioners’  Welfare,
Ministry of Personnel (Public Grievances and  Pension)  issued  instructions
for implementation of the order passed  by  the  High  Court  in  K.C.Garg’s
case.  It was also proposed that O.M. dated  29.10.1999  may  be  withdrawn.
However, the Ministry of Finance did not agree with the latter part  of  the
proposal.  Thereafter, permission of the Prime Minster being the Minster-in-
charge of the Department of Pension and  Pensioners’  Welfare,  Ministry  of
Personnel (Public Grievances and Pension) was sought under Rule  12  of  the
Government of  India (Transaction of Business)  Rules, 1961.  On  29.7.2000,
the Prime Minister sanctioned the proposal  for  withdrawal  of  O.M.  dated
29.10.1999. However, before the decision taken by the Prime  Minister  could
be translated into an order, this Court delivered judgment  titled  Col.  B.
J. Akkara (Retd.) v. Government of India and others (2006)  11  SCC  709  in
the appeals and writ petitions filed by the doctors of defence services  and
in the light of that decision, the Prime Minister approved the  proposal  of
the Department that O. M. dated 29.10.1999 may not be withdrawn.

13.   Dr. G.  D.  Hoonka,  who  retired  as  Chief  Medical  Superintendent,
Central Railway, Jabalpur w.e.f. 30.4.1996 challenged the decision taken  by
the Railways in the light of O.M.  dated  12.11.1999  whereby  NPA  was  not
treated as part of basic pay for the  purpose  of  calculation  of  pension.
The Tribunal allowed the application filed by  Dr.  Hoonka.   Writ  Petition
No.2539/2003 filed by the Union of India and others  was  dismissed  by  the
Division Bench of the Madhya Pradesh High Court vide order dated  7.12.2004,
paragraph 8 of which reads as under:

      “The Circular dated 13.04.1998 makes it clear that NPA will be counted
      as 'pay' for all service benefits including retirement  benefits.  The
      Circular dated 15.01.1999 does not contain anything to  the  contrary.
      What is stated in the circulars dated 13.04.1999  (which  states  that
      NPA granted to Railway Medical Officers is not  to  be  added  to  the
      minimum of the revised scales of  pay,  while  giving  effect  to  the
      circular dated 15.01.1999) is merely a departmental clarification  and
      not a policy of the Government. The circular dated 12.11.1999  rightly
      states that "It (NPA) is a separate element although it is taken  into
      account for the purpose of computation of pension". This refers to the
      policy of the Government contained in the  Circular  dated  13.04.1998
      which states that NPA will count as 'Pay' for all service benefits and
      retirement benefits, which  includes  pension.  Having  said  so,  the
      circular dated 12.11.1999 proceeds to say that NPA is not to be  added
      to the minimum of the revised scale of pay as on  1.01.1996  in  cases
      where consolidated pension is to be stepped up to 1999. The policy  of
      the government (Decision of the President) as stated in  the  Circular
      dated 13.04.1998 that NPA will count as pay for all  service  benefits
      including pension, is not altered  or  superseded  by  any  subsequent
      policy of the Government. In fact it is  reiterated  in  the  Circular
      dated 12.11.1999. If that is so, the Circular dated 12.11.1999  cannot
      under the guise of clarification, delete the  benefit  of  the  policy
      decision contained in the circular dated  13.04.1998,  when  the  said
      policy continues to be in force. Once it is decided, as a policy, that
      NPA will count as 'Pay' for all service benefits including  retirement
      benefits, the same cannot be excluded by  way  of  clarification.  The
      position of course could have been different  if  the  circular  dated
      15.01.1999 containing the policy relating to  illegible  of  illegible
      earlier policy stated in the circular dated 13.04.1998. “The policy of
      the Government formulated  by  a  decision  of  the  President  cannot
      obviously be negated by a departmental clarification running  contrary
      to such policy. The effect of the clarification  dated  12.11.1999  is
      that in giving effect  to  the  policy  contained  in  the  Government
      circular dated 15.01.1999,  the  policy  dated  13.04.1998  is  to  be
      ignored. But so long as the
      policy contained in the President's  decision,  given  effect  by  the
      circular dated 13.04.1998 continues to  hold  the  field,  its  effect
      cannot  arbitrarily  be  directed  to  be  ignored  by   a   purported
      clarification, which admittedly is not a decision of the
      President.”
                                                         (emphasis supplied)

                                     (reproduced from the appeal paper book)



14.   SLP (C) No.14834/2006 filed against the order of  the  Madhya  Pradesh
High Court was dismissed by this Court on  28.8.2006.  Review  Petition  (C)
D.No.17280/2007 was also dismissed on 17.1.2008 as barred by limitation  and
also on merits.

15.   Dr. Naw Nath Prasad, who retired as  Medical  Director,  LNM,  Railway
Hospital, Gorakhpur, successfully invoked the jurisdiction  of  the  Central
Administrative Tribunal, Patna Bench for  adding  NPA  for  the  purpose  of
calculating pension.  O.A. No.215/2005 filed  by  him  was  allowed  by  the
Tribunal vide order dated 17.1.2006.  The  Union  of  India  challenged  the
order of the Tribunal in Civil Writ Jurisdiction  Case  No.11114/2006.   The
Division Bench of the High Court referred to order  dated  18.5.2002  passed
by the Delhi High Court  in  Civil  Writ  Petition  No.7826/2001  –  Retired
Railway Medical Officers Association v.  Union  of  India  and  others,  the
order passed by the Madhya Pradesh High Court in Dr. G.  D.  Hoonka’s  case,
the circulars issued by the Government of India for implementing  the  order
passed in the two cases and observed:

       “It is thus evident from a plain reading  of  the  decisions  of  the
       Courts deciding identical issues, and duly executed by  the  Ministry
       of Railways (Railway Board) by issuing  the  aforesaid  letter  dated
       25.8.2005, that non-practising allowance  availed  of  by  a  serving
       doctor of Indian Railway Service is entitled to the same to be  taken
       into account for  the  purpose  of  computation  of  post  retirement
       benefits.

       The decision of the authorities declining the  same  to  the  present
       respondent, the contest put up before the Tribunal  and  the  present
       writ petition at the instance of the  authorities,  is  beyond    our
       comprehension,     speaks    of    not  only  unreasonable  approach,
       seems  to be arbitrary  and  verging   on   administrative   tyranny,
       and burdening the Tribunal   and  this  Court  with  utmost  unwanted
       matters, and harassing the retired employee in  the  evening  of  his
       life.”



16.   SLP (C) No.15134/2010 filed against the order of the Patna High  Court
was dismissed by this Court on 4.10.2010 in the following terms:

      “We are not inclined to entertain the special  leave  petition,  since
      the subject matter thereof has been considered earlier.   However, the
      cost imposed by the High Court in the writ petition is  quashed.   The
      special leave petition is dismissed except to the above extent.”



17.   Dr. S.N. Srivastava, who  retired  from  the  post  of  Chief  Medical
Superintendent (nomenclature of the particular railway has  not  been  given
in the copy of order  filed  by  the  counsel  for  the  appellants)  w.e.f.
31.1.1996 filed Writ Petition No.1774(SB)/2004  before  the  Allahabad  High
Court for issue of a mandamus to the respondents to re-fix  his  pension  by
adding the element of NPA.  He relied upon the order passed  by  the  Madhya
Pradesh High Court in the case of Dr. G. D. Hoonka  and  pleaded  that  with
the dismissal of the special leave petition filed by  the  respondents,  the
order passed in that case has become final and the same is  binding  on  the
respondents.  On behalf of the  respondents,  reliance  was  placed  on  the
judgment of this Court in Col. B. J. Akkara (Retd.) v. Government  of  India
and others (supra) and it was  pleaded  that  the  writ  petitioner  is  not
entitled to any relief. The Division  Bench  of  the  Allahabad  High  Court
relied upon paragraphs 12 and 13 of the order passed by the Tribunal in  Dr.
G. D. Hoonka’s case, referred to the judgment in Col. B.  J.  Akkara’s  case
and allowed the writ petition by recording the following observations:

      “It is pertinent to point  out  at  this  juncture  that  against  the
      judgment and order dated 9.5.2003 passed by the Central Administrative
      Tribunal, Jabalpur in the matter of  Dr.  G.D.Hoonka,  the  Department
      questioned the validity of  the  aforesaid  judgment  by  filing  writ
      petition no. 2539 of 2003 and the Jabalpur High Court  by  a  detailed
      judgment refused to interfere with  the  order  of  the  Tribunal  and
      dismissed  the  writ  petition  vide  its  judgment  and  order  dated
      7.12.2004. While dismissing the writ petition, the Jabalpur High Court
      observed in paragraph 9 as under:-

      "9. In fact, we find that when the question as to whether NPA is to be
      taken as part of pay in regard to  those  who  had  retired  prior  to
      1.1.1996, came up for consideration before the Delhi High Court in Dr.
      K.C.Garg vs. Union  of  India  (CWP  7322/2001)  and  connected  cases
      decided on 18.5.2002, the Railway Administration through their counsel
      conceded in a reply to a query that NPA shall be taken to be a part of
      pay for post 1.1.1996. Be that as it may."

      Under these circumstances, it is very difficult for us to  accept  the
      contentions of the  Department  and  find  force  in  the  submissions
      advanced by the Counsel for the petitioner that the petitioner is also
      entitled for the benefit  of  the  judgment  rendered  in  Dr.  G  .D.
      Hoonka's case,  referred  to above.”


18.   Dr. K.C. Bajaj (one of the appellants in the appeals  arising  out  of
SLP (C) Nos.3358-64/2011) filed O.A. No.1275/2006 for issue of  a  direction
to the respondents to add NPA for the purpose of  calculating  the  pension.
The  same  was  disposed  of  by  the  Tribunal  with  a  direction  to  the
respondents to consider his case for  grant  of  pension  in  terms  of  the
judgment in Dr. K. C. Garg’s case and pass a speaking  and  reasoned  order.
However, by taking shelter of  the  judgment  in  B.J.  Akkara’s  case,  the
Railway Board rejected his representation.  O.A. No.1369/2007 filed  by  Dr.
K. C.  Bajaj  was  dismissed  by  the  Tribunal  along  with  other  similar
applications vide order dated 12.9.2008 by  relying  upon  the  judgment  of
this Court in Col. B. J. Akkara’s case.  The writ  petitions  filed  by  the
appellants questioning the order of the Tribunal were also dismissed by  the
High Court.

19.   These appeals were heard by different Benches  on  various  dates.  On
11.4.2013, the  learned  Additional  Solicitor  General  produced  the  file
containing different opinions recorded  by  the  learned  Attorney  General.
After perusing the file, the Court passed the following order:

      “Further arguments heard, which remained inconclusive.


      The file produced by the learned Additional Solicitor General contains
      different opinions recorded by the learned Attorney  General.  In  the
      last opinion recorded in 2007, the learned Attorney General noted that
      the files produced before him do not contain formal  notification  for
      withdrawal of O.M.  dated 29.10.1999.


      However, from the judgment of this Court in Col. B.J. Akkara (Retired)
      v. Government of India and others (2006) 11 SCC 709 which was  decided
      on 10.10.2006, it is borne out that an affidavit was filed  on  behalf
      of the respondents on 1.8.2006 stating  therein  that  Circular  dated
      29.10.1999 had been  withdrawn  in  regard  to  the  Civilian  Medical
      Officers who were petitioners in the writ petition filed by  Dr.  K.C.
      Garg and others. It is  also  borne  out  from  paragraph  23  of  the
      judgment that the Court deciding the matter had been informed that the
      order passed by the Delhi High Court in C.W.P.  Nos.  7322,  7826  and
      7378 of 2001 Dr. K.C. Garg and others v Union of India and others  had
      not been challenged by the Union of India and the directions contained
      in the High Court's order had been implemented.


      All this, prima facie, shows that the  parties  appearing  before  the
      Court had not placed the facts in a correct perspective and apparently
      misleading statement was made in the affidavit filed on behalf of  the
      respondents that O.M. dated 29.10.1999 had been withdrawn  in  respect
      of the petitioners in K.C. Garg's case.


      The   learned   Additional  Solicitor   General  should  instruct  his
      assisting counsel to ensure that an affidavit of a senior  officer  of
      the rank of Joint Secretary to the Government is filed clarifying  the
      stand of the Government. In  the   affidavit   it    should   also  be
      indicated  as   to  what  steps  were  taken  for  compliance  of  the
      direction given by the Prime Minister under Rule 12 of the  Government
      of India (Transaction of Business) Rules, 1961. The required affidavit
      be filed within two weeks.


      For further hearing, the cases be listed on 01.05.2013.”



20.   In compliance of the  direction  given  by  this  Court,  Ms.  Vandana
Sharma,  Joint  Secretary,  Ministry  of    Personnel,  Pension  and  Public
Grievances filed affidavit dated 24.5.2013.   Thereafter,  the  counsel  for
the parties made further arguments and judgment  was  reserved  on  7.5.2013
with liberty to the parties to file written submissions.


21.   While dictating  the  judgment,  the  Court  found  that  the  written
arguments filed on behalf of the  parties  contain  additional  facts  which
were not brought to the notice of the Court during the  course  of  hearing.
Therefore, by an order dated 2.7.2013, the case was  ordered  to  be  listed
for further arguments, which were heard on 24.9.2013 and judgment was  again
reserved.


22.   Shri Prashant Bhushan, learned counsel appearing  for  the  appellants
in the appeals arising out of  SLP  (C)  Nos.3358-64/2011  argued  that  the
judgments of the Delhi, Madhya Pradesh, Patna and Allahabad High Courts  are
binding  on  the  respondents  because  O.M.  dated  29.10.1999  which   was
challenged by Dr. K.C. Garg and others was quashed by the Division Bench  of
the Delhi High Court vide order dated 18.5.2002 and though  the  respondents
had challenged that order by filing special  leave  petitions,  a  conscious
decision was taken by the Government  to  withdraw  Civil  Appeal  Nos.1972-
1974/2003 and to implement  the  order  of  the  Delhi  High  Court.    Shri
Bhushan pointed out that the  special  leave  petitions  filed  against  the
orders passed by the Madhya Pradesh High Court and the Patna High  Court  in
the cases of Dr. G. D. Hoonka and Dr. Naw Nath Prasad  were  also  dismissed
by this Court and argued that having implemented  the  orders  of  the  High
Court in the cases of civilian doctors as well as doctors  employed  in  the
Railways  and  Post  and  Telegraph  Department,  it  is  not  open  to  the
respondents to rely upon  the  judgment  in  Col.  B.J.  Akkara’s  case  for
denying relief to the appellants. In support of this argument, Shri  Bhushan
relied upon the judgments  in  Amrit  Lal  Berry  v.  Collector  of  Central
Excise, New Delhi and others (1975) 4 SCC 714 and K. I. Shephard and  others
v. Union of India and others (1987)  4  SCC  431.   He  submitted  that  the
judgment in State of Maharashtra v. Digambar (1995)  4  SCC  683,  to  which
reference has been  made  in  paragraph  25  of  the  judgment  in  Col.B.J.
Akkara’s case, has no bearing on  these  appeals  because  a  conscious  and
considered decision was taken by the Government of  India  to  withdraw  the
appeals filed against the order passed in the case  of  Dr.  K.C.  Garg  and
others and the orders passed by the Madhya Pradesh  and  Patna  High  Courts
were implemented after dismissal  of  the  special  leave  petitions.   Shri
Bhushan also pointed out that question No.3 in Col. B.J. Akkara’s  case  was
decided by the two Judge Bench under a wholly erroneous impression that  the
order passed by the Division Bench of the High Court  in  K.C.  Garg’s  case
was not challenged by the Union of India.  Shri Bhushan  also  distinguished
the judgment in Col. B.J. Akkara’s case by pointing out that this Court  had
not considered the impact of O.M. dated 7.4.2008 issued  by  the  Government
in terms of the decision taken by the President that NPA shall count as  pay
for all service benefits including retirement benefits.

23.   Shri A. S. Chandhiok,  learned  Additional  Solicitor  General  argued
that the issue raised in these appeals is no longer re  integra  and  should
be deemed to have been decided against  the  appellants  by  virtue  of  the
judgment in Col. B. J. Akkara’s  case.   He  emphasized  that  clarification
dated 11.9.2001 was issued by the Ministry of Defence in the light  of  O.M.
dated 29.10.1999 and in view of decision of question  No.2  in  Col.  B.  J.
Akkara’s case, the appellants cannot fall back upon  O.  M.  dated  7.4.1998
and claim that NPA should be added to the  basic  pay  for  the  purpose  of
calculating the pension. The learned  Additional  Solicitor  General  argued
that dismissal of the special leave petitions filed in the cases of  Dr.  K.
C. Garg and others, Dr. G. D. Hoonka and Dr. Naw  Nath  does  not  have  the
effect of conclusively deciding the issue relating  to  entitlement  of  the
appellants to get the benefits of  the  orders  of  the  three  High  Courts
because this Court had not interpreted the  relevant  circulars  and  Office
Memorandums.

24.   We have considered the respective arguments/submissions and  carefully
scrutinized the record including the additional affidavits filed  on  behalf
of the respondents.  We have also gone through  the  orders  passed  by  the
Delhi, Madhya Pradesh, Patna and Allahabad High Courts.

25.   The first question which merits consideration is whether the  judgment
in State of Maharashtra v. Digambar (supra) can be relied upon for  ignoring
the  orders  passed  by  the  four  High  Courts,  which  have  since   been
implemented by the concerned departments/establishments.  A reading of  that
judgment shows that this Court  had  entertained  subsequent  special  leave
petitions filed by the  State  questioning  the  order  of  the  High  Court
against the grant of compensation for  illegal  utilisation  of  their  land
despite the fact that the  special  appeals  filed  against  similar  orders
passed by the High  Court  had  already  been  dismissed.  This  Court  took
cognizance of the fact that in some of the  matters,  the  State  Government
had not challenged the orders of  the  High  Court  and  the  special  leave
petition filed in some  other  matters  had  been  summarily  dismissed  and
proceeded to observe:

      “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 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 SLPs are  filed  by
      the State against judgments of the High Court, such SLPs  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
      SLPs 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
      SLP or SLPs in other similar matter/s where it is considered on behalf
      of the State that non-filing of such SLP or SLPs and pursuing them  is
      likely to seriously jeopardise the interest of  the  State  or  public
      interest.”


26.   This Court further observed that the special leave petition  filed  by
the State deserves to be decided  on  merits  because  the  High  Court  was
wholly wrong in granting relief of compensation to all the writ  petitioners
without considering their entitlement for such relief under Article  226  of
the Constitution. The Court noted that the award  of  compensation  in  such
matters would cast a burden of Rs.400 crores on the State and  proceeded  to
observe:

      “Therefore, the fact that the State has  failed  to  file  appeals  in
      similar matters or this Court has rejected SLPs  in  similar  matters,
      cannot be held to be a total  bar  or  a  fetter  for  this  Court  to
      entertain appeals  under  Article  136  of  the  Constitution  against
      similar judgments of the High  Court  where  need  to  entertain  such
      appeals is found necessary to meet the ends of justice, in  that,  the
      ambit of power invested in this Court under  Article  136  allows  its
      exercise, wherever and whenever, justice of the matter demands it  for
      redressal of manifest injustice. When by an order, already adverted to
      by us, a two-Judge Bench of this Court, has got referred the  SLP  out
      of which the present appeal  has  arisen  for  being  entertained  and
      decided  on  merits  by   a   three-Judge   Bench   of   this   Court,
      notwithstanding the rejection of SLPs by another  two-Judge  Bench  of
      this Court in similar matters, it has desired  the  exercise  of  this
      Court’s wide power under Article 136 of the Constitution to  meet  the
      ends of justice and remedy the manifest injustice caused to the  State
      by the judgment of the High Court under appeal, cannot be overlooked.”


27.    In Col. B. J. Akkara’s case (paragraph 23), a two Judge  Bench  noted
that order dated 18.5.2002 passed by the Division Bench of  the  High  Court
in Dr. K.C. Garg’s case and other connected matters had not been  challenged
by the Union of India and was implemented by adding NPA  to  basic  pay  for
stepping up the pension in the case of Civilian  Medical  Officers  who  had
retired prior  to  1.1.1996  and  the  submission  made  on  behalf  of  the
respondents  (paragraph  24)  that  circular  dated  29.10.1999   had   been
withdrawn only qua the Civilian Medical Officers  who  were  petitioners  in
the writ petitions filed before the High Court and not with  regard  to  all
Civilian  Medical  Officers,  referred  to  the  proposition  laid  down  in
Digambar’s case (paragraph 25), which has been extracted  herein  above  and
held:

      “The said observations apply to this case. A  particular  judgment  of
      the High Court may not be challenged by the State where the  financial
      repercussions  are  negligible  or  where  the  appeal  is  barred  by
      limitation. It may  also  not  be  challenged  due  to  negligence  or
      oversight of the dealing officers or on account of wrong legal advice,
      or on account of the non-comprehension of the seriousness or magnitude
      of the issue involved. However, when similar matters subsequently crop
      up and the magnitude of the financial implications  is  realised,  the
      State is not prevented  or  barred  from  challenging  the  subsequent
      decisions or resisting subsequent writ petitions, even though judgment
      in a case involving similar issue was allowed to reach finality in the
      case of others. Of course, the position would be  viewed  differently,
      if petitioners plead and prove that the State had adopted a “pick-and-
      choose” method only to exclude petitioners on account of mala fides or
      ulterior motives. Be that as it may. On the facts  and  circumstances,
      neither the principle of res judicata nor the principle of estoppel is
      attracted. The administrative law principles of legitimate expectation
      or fairness in action are also not attracted. Therefore, 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 the State defending or enforcing its circular  dated  11-9-
      2001.”



28.   However, the fact of the  matter  is  that  the  Union  of  India  did
challenge the order passed by the Delhi High Court in Dr. K. C. Garg’s  case
and other connected matters by filing special leave  petitions,  which  were
converted into Civil Appeal Nos.1972-1974/2003 and during  the  pendency  of
the appeals, a conscious decision was taken by the Government of  India  not
to pursue the appeals and implement the order of  the  High  Court.   It  is
neither the pleaded case of the respondents nor it has  been  argued  before
us that the Government of India had taken decision to withdraw  the  appeals
field in the cases of Dr. K.  C.  Garg  and  others  because  the  financial
implications were negligible or that the concerned officers were  misled  in
doing so on account of wrong legal advice. At the  cost  of  repetition,  we
consider it necessary to observe that during the pendency  of  the  appeals,
the matter was referred to the Attorney General for his opinion whether  the
judgment of the High Court is correct and the same  should  be  implemented.
The Attorney General examined the matter keeping in view the relevant  rules
and the policy decisions taken by the Government of India  and  opined  that
the judgment of the High  Court  was  correct  and  should  be  accepted  in
preference  to  the  view  taken  by  the  Tribunal.   The  issue  was  then
considered at the highest level of the Government  and  the  Prime  Minister
ordered implementation of the High Court’s order.  Thereafter,  the  appeals
were withdrawn. It is a different thing that the proposal for withdrawal  of
O.M. dated 29.10.1999 was shelved in view of the  judgment  in  Col.  B.  J.
Akkara’s case. In other words, the Government of  India  had  taken  a  well
considered decision not to pursue the appeals filed  against  the  order  of
the Delhi High Court  and  implement  the  same  on  the  premise  that  the
proposition laid down therein was correct.

29.   In view of the above  discussion,  we  hold  that  the  ratio  of  the
Digambar’s  case  cannot  be  invoked  to  justify  the  pick   and   choose
methodology adopted by  the  Union  of  India  in  resisting  the  claim  of
similarly situated doctors that NPA payable to  them  shall  be  taken  into
consideration for calculating the pension. Such an approach by the Union  of
India is ex-facie  arbitrary,  unjust  and  has  resulted  in  violation  of
Article 14 of the Constitution.

30.   The judgment in Col. B.J. Akkara’s  case  cannot  be  applied  to  the
appellants’ case because the circulars, which  fell  for  interpretation  in
that case and those under consideration in these appeals  are  different  in
material aspect.  By  circular  dated  7.6.1999,  the  Ministry  of  Defence
conveyed the decision of the President  that  “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  Rs.1275
      p.m. and a maximum of up to 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-
      1996 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-1-1-1996
      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 24-11-1997, 27-5-1998 and 14-7-1998,  as  the
      case may be, his/her pension will not be revised to  the  disadvantage
      of the pensioner (vide clause 4).”



31.   When the implementing departments sought clarification  on  the  issue
whether NPA admissible as on 1.1.1986 is  to  be  taken  into  consideration
after re-fixation of pay on notional basis as on 1.1.1986 and  the  same  is
to be added to the minimum of  the  revised  scale  while  stepping  up  the
consolidated pension on 1.1.1996, the  Ministry  issued  clarification  vide
circular dated 11.9.2001 in the following terms:
      “The undersigned is directed to refer to Ministry  of  Defence  Letter
      No. 1(1)/99/D(Pension/Services) dated 7-6-1999,  wherein  decision  of
      the Government that pension of all pensioners  irrespective  of  their
      date of retirement shall not be less than 50% of the  minimum  of  the
      revised scale of pay introduced with effect from 1-1-1996 of the  post
      last held by the pensioner was communicated….
      NPA granted to medical officers does not form part of  the  scales  of
      pay. It is a separate element, although it is taken into  account  for
      the purpose of computation of pension.


      This has been examined in consultation with the Department of  Pension
      and Pensioners’ Welfare and the Department of Expenditure  and  it  is
      clarified that NPA  is  not  to  be  taken  into  consideration  after
      refixation of pay on notional basis on 1-1-1986. It is also not to  be
      added to the minimum of the revised scale of pay  as  on  1-1-1996  in
      cases where consolidated pension is to be stepped up to 50%, in  terms
      of Ministry of Defence Letter No. 1(1)/99/D (Pension/Services) dated 7-
      6-1999.”



32.   This Court  treated  circular  dated  11.9.2001  as  clarificatory  in
nature  and  held  that  it  neither  amends  nor  modifies  circular  dated
7.6.1999.
The most striking difference between O.M. dated  7.4.1998  issued
by Department of Pension and  Pensioners’  Welfare,  Ministry  of  Personnel
(Public Grievances and Pension)  and  circular  dated  7.6.1999
issued by the Defence  Ministry  is  that  the  decision  of  the  President
conveyed vide O.M. dated 7.4.1998 was that NPA shall count as  pay  for  all
service benefits including retirement benefits  but  no  such  decision  was
contained in circular dated 7.6.1999.
Therefore, the  clarification  issued
by the Ministry of Defence vide circular dated 11.9.2001 cannot  be  equated
with O.M. dated 29.10.1999 which had the effect of  modifying  the  decision
of the President but was issued without  his  approval.
Unfortunately,  the
Tribunal and the Division Bench of the  High  Court  overlooked  this  vital
distinction between O.M. dated 7.4.1998 issued by the Ministry of  Personnel
(Public  Grievances  and  Pension),  Department  of  Pension  and  Pensions’
Welfare and Circular dated 7.6.1999 issued by the Ministry  of  Defence  and
mechanically applied the ratio of Col. B. J. Akkara’s case for deciding  the
cases of the doctors, who served in Central Health  Services,  the  Railways
and other departments of the Government. Therefore, the  impugned  order  is
legally unsustainable.

33.   In the result, the appeals are allowed,  the  impugned  order  of  the
High Court as also the one passed by the Tribunal  are  set  aside  and  the
applications filed by the appellants before  the  Tribunal  are  allowed  in
terms of the prayer made.  The respondents shall  re-calculate  the  pension
payable to the appellants by adding  the  element  of  NPA.   This  exercise
shall be undertaken and completed by  the  concerned  authorities  within  a
period of three months from today.
                                             …………………………J.
                                             (G.S.SINGHVI)






NEW DELHI;                                     ………………………J.
NOVEMBER 27, 2013                                              (KURIAN
JOSEPH)






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