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A PPA is a contract between the parties and the terms of any contract are nothing but the agreed terms of the contracting parties. It is also a settled principle of the law of contracts that parties to a contract can alter the terms of the contract subsequent to the formation of the contract by mutual consent.= (i) whether the appellant is entitled to terminate the PPA and (ii) if so, on what terms and conditions are to be examined in the appeal.- whether the 2nd respondent be directed to pay the appellant compensatory tariff as indicated in its counter, we are of the opinion no direction can be given at this stage during the pendency of the appeal as the right of the appellant for such compensatory tariff appears to be one of the issues in the appeal. In so far as the question of permitting the 2nd respondent to pay the compensatory tariff as indicated in its counter, we are of the opinion that it requires no permission from this Court. It is upto the 2nd respondent to take a decision in accordance with law to the best of its understanding. We may make it clear that if the 2nd respondent chooses to make such payment, the same shall be subject to the result of the appeal.

                                                                  REPORTABLE

                                               IN THE SUPREME COURT OF INDIA

                                                CIVIL APPELLATE JURISDICTION

                                                CIVIL APPEAL NO.2904 OF 2011

                                                       Union of India & Anr.

                                                               ...Appellants

                                                                      Versus

                                                                Rajbir Singh

                                                               ...Respondent

                                                                        With

                                                CIVIL APPEAL NO.2905 OF 2011

                                                CIVIL APPEAL NO.3409 OF 2011

                                                CIVIL APPEAL NO.5144 OF 2011

                                                CIVIL APPEAL NO.2279 OF 2011

                                                CIVIL APPEAL NO.1498 OF 2011

                                                CIVIL APPEAL NO.5090 OF 2011

                                                CIVIL APPEAL NO.5414 OF 2011

                                                CIVIL APPEAL NO.5163 OF 2011

                                                CIVIL APPEAL NO.5840 OF 2011

                                                CIVIL APPEAL NO.7368 OF 2011

                                                CIVIL APPEAL NO.7479 OF 2011

                                                CIVIL APPEAL NO.7629 OF 2011

                                                CIVIL APPEAL NO.5469 OF 2011

                                               CIVIL APPEAL NO.10747 OF 2011

                                               CIVIL APPEAL NO.11398 OF 2011

                                                 CIVIL APPEAL NO.183 OF 2012

                                                 CIVIL APPEAL NO.167 OF 2012

                                              CIVIL APPEAL NO. 10105 OF 2011

                                               CIVIL APPEAL NO. 5819 OF 2012

                                               CIVIL APPEAL NO. 5260 OF 2012

                                               CIVILL APPEAL D.16394 OF 2013

                                                                           1

                                                CIVIL APPEAL NO.1856 OF 2015

                                   (Arising out of SLP (C) No.15768 of 2011)

                                                CIVIL APPEAL NO.1854 OF 2015

                                   (Arising out of SLP (C) No.14478 of 2011)

                                                CIVIL APPEAL NO.1855 OF 2015

                                     Arising out of SLP (C) No.26401 of 2010

                                               CIVILL APPEAL NO.1858 OF 2015

                                   (Arising out of SLP(C) No. 32190 of 2010)

                                               CIVILL APPEAL NO.1859 OF 2015

                                    (Arising out of SLP(C) No.27220 of 2012)

                                                                    JUDGMENT

                                                             T.S. THAKUR, J.

                                                           1. Leave granted.

                   2. These appeals arise out of separate but similar orders

                 passed by the Armed Forces Tribunal holding the respondents

             entitled to claim disability pension under the relevant Pension

               Regulations of the Army. The Tribunal has taken the view that

           the disability of each one of the respondents was attributable to

                  or aggravated by military service and the same having been

              assessed at more than 20% entitled them to disability pension.

                  The appellant-Union of India has assailed that finding and

           direction for payment of pension primarily on the ground that the

          Medical Boards concerned having clearly opined that the disability

                                                                           2

                had not arisen out of or aggravated by military service, the

                       Tribunal was not justified in taking a contrary view.

                                                                          3.

                  Relying upon the decisions of this Court in Union of India

                      and Ors. v. Keshar Singh (2007) 12 SCC 675; Om Prakash

                                                                       Singh

                                                                          v.

                                  Union of India and Ors. (2010) 12 SCC 667;

                   Secretary, Ministry of Defence and Ors. v. A.V. Damodaran

                                                (Dead) through LRs. and Ors.

                                                       (2009) 9 SCC 140; and

                                      Union of India and Ors. v. Ram Prakash

                                                               (2010) 11 SCC

               220, it was contended by Mr. Balasubramanian, learned counsel

           appearing for the appellant in these appeals, that the opinion of

               the Release Medical Board and in some cases Re-survey Medical

                    Board and Appellate Medical Authority must be respected,

             especially when the question whether the disability suffered by

               the respondents was attributable to or aggravated by military

           service was a technical question falling entirely in the realm of

                   medical science in which the opinion expressed by medical

                                 experts could not be lightly brushed aside.

                                                             Inasmuch as the

             Tribunal had failed to show any deference to the opinion of the

              experts who were better qualified to determine the question of

          attributability of a disease/disability to a military service, the

                    Tribunal had fallen in error argued the learned counsel.

                                                                           3

                                                                          4.

                     On behalf of the respondents it was, on the other hand,

             submitted that the decisions relied upon by learned counsel for

                    the appellant were of no assistance in view of the later

                  pronouncement of this Court in Dharamvir Singh v. Union of

                  India and Ors. (2013) 7 SCC 316 where a two-Judge Bench of

            this Court had, after a comprehensive review of the case law and

                                                                         the

                                                                    relevant

                                                                       rules

                                                                         and

                                                                regulations,

                                                               distinguished

                            decisions and stated the true legal position. It

                                                                         was

                                                                         the

                                                                        said

                                                                   contended

                  that the earlier decisions in the cases relied upon by the

            appellants were decided in the peculiar facts of those cases and

             did not constitute a binding precedent especially when the said

          decisions had not dealt with several aspects to which the decision

               of this Court in Dharamvir Singh’s case (supra) had adverted.

                Applying the principles enunciated in Dharamvir Singh’s case

             (supra) these appeals, according to the learned counsel for the

               respondents, deserve to be dismissed and indeed ought to meet

                                                                  that fate.

                                                                          5.

                  The material facts giving rise to the controversy in these

                                                 appeals are not in dispute.

                                               It is not in dispute that the

           respondents in all these appeals were invalided out of service on

           account of medical disability shown against each in the following

                                                                           4

                                                                      chart:

                                Case No. Name of the Nature of Percentage of

                                    Respondent Disease/Disability Disability

                                                                  determined

      C.A. No. 2904/2011 Ex. Hav. Rajbir Singh Generalized Seizors 20% for 2

                                                                      years.

         C.A. No. 5163/2011 Ex. Recruit Amit Kumar Manic Episode (F-30). 40%

                                                                 (Permanent)

            C.A. No. 5840/2011 Hony. Flt. Lt. P.S. Primary Hypertension. 30%

                                                                     Rohilla

         C.A. No. 7368/2011 Ex. Power Satyaveer Diabetes Mellitus (IDDM) 40%

                                              Singh ICD E 10.9. (Permanent).

                      C.A. No. 7479/2011 Ex. Gnr. Jagjeet Singh 20% each and

                                                                   composite

                                                              disability 40%

                                                                (Permanent).

    C.A. No. 7629/2011 Ex. Rect. Charanjit Ram 1. Non-Insulin Dependent C.A.
                                    No. 5469/2011 Jugti Ram (through LR) 80%

                                                          Diabetes Melllitus

                                                                    (NIDDM).

                                                         2. Fracture Lateral

                                                        Condyl of Tibia with

                                                     fracture neck of Fibula

                                                                       left.

                                                    Mal-descended Testis (R)

                                                       with Inguinal hernia.

  C.A. D. No. HavaldarSurjit Singh Schizophrenic Reaction C.A. No. 2905/2011
                                Ex. Naik Ram Phai Otosolerosis (Rt.) Ear 20%

                                                       16394/2013 (300) OPTD

                                                         Neurotic Depression

                                                                       V-67.

    C.A. No. 10747/2011 Sadhu Singh Schizophrenia C.A. No. 11398/2011 Rampal
                                              Singh Neurosis (300. 20% for 2


                                                                      years.


                                                                   20% for 2


                                                                      years.

                                   C.A. No. 183/2012 Raj Singh Neurosis 30%.

      C.A. No. 167/2012 Ranjit Singh C.A. No. 5819/2012 Ex. Sub. Ratan Singh
  Other Non-Organic C.A. No. 5260/2012 Ex. Sep. Tarlochan Epilepsy (345) 20%
                                                                       for 2


                                          Psychosis (298, V-67) Singh years.


                                      Primary Hypertension Harbans Singh 30%


                                                                 (Permanent)


                                                               Less than 20%

                                               1.Epilepsy (345) 20% each and

                                            2. High Hyper-metropia composite

                                         Rt. Eye with partial disability 40%

                                                     Amblyopia. for 2 years.

                                                    Personality Disorder 60%

                                                         C.A. No. 10105/2011

                                                          C.A.NO.....OF 2015

                                                                (@ SLP(C)No.

                                                                 27220/2012)

                                                                Balwan Singh

                                                                           5

                                                                         60%

                                                                (Permanent).

                                                                   40% for 2

                                                                      years.

                                                          C.A.NO.....OF 2015

                                                              (@ SLP (C) No.

                                                                 32190/2010)

                                                          C.A. No. 5090/2011

                      Sharanjit Singh Generalized Tonic Clonic Less than 20%

                                                          Seizure, 345 V-64.

                                       Abdulla Othyanagath Schizophrenia 30%

     C.A.NO........OF 2015 Sqn. Ldr. Manoj Rana 1. Non-Organic Psychosis 40%

                                           (@ SLP (C) No. 2. Stato-Hypatitis

                                                                 26401/2010)

 C.A. No. 2279/2011 Labh Singh Schizophrenia C.A. No. 5144/2011 Makhan Singh
                                               Neurosis (300-Deep) 30% for 2


                                                                      years.


                                                                         20%

                                          C.A. No. 14478/2011 Ajit Singh 20%

   C.A.NO.......OF 2015 ManoharLal Idiopathic Epilepsy IHD (Angina Pectoris)
                                                               Less than 20%

                                                   (@ SLP (C) No. (Grandmal)

                                          15768/2011) Renal Calculus (Right)

                                                          C.A. No. 3409/2011

                                                   1.Generalized Seizors 70%

                                         2. Inter-vertebral Disc (permanent)

                                                                    Prolapse

                                                   3.PIVD C-7-D, (Multi-Disc

                                                                   Prolapse)

                                                       Bipolar Mood Disorder

                                                         C.A. No. 1498/2011*

                                                          C.A. No. 5414/2011

                                                                          6.

                                                             Major Man Mohan

                                                                     Krishan

                                                       Ex. Sgt. Suresh Kumar

                                                                      Sharma

                                                         Rakesh Kumar Singla

                                                                         20%

                                                                   20% for 5

                                                                      years.

             It is also not in dispute that the extent of disability in each

                  one of the cases was assessed to be above 20% which is the

                      bare minimum in terms of Regulation 173 of the Pension

            Regulations for the Army, 1961. The only question that arises in

              the above backdrop is whether the disability which each one of

               the respondents suffered was attributable to or aggravated by

              military service. The Medical Board has rejected the claim for

           disability pension only on the ground that the disability was not

           attributable to or aggravated by military service. Whether or not

         that opinion is in itself sufficient to deny to the respondents the

         disability pension claimed by them is the only question falling for

                                                                           6

              our determination. Several decisions of this Court have in the

          past examined similar questions in almost similar fact situations.

                  But before we refer to those pronouncements we may briefly

                     refer to the Pension Regulations that govern the field.

                                                                          7.

               The claims of the respondents for payment of pension, it is a

                 common ground, are regulated by Pension Regulations for the

             Army, 1961. Regulation 173 of the said Regulations provides for

             grant of disability pension to persons who are invalided out of

              service on account of a disability which is attributable to or

                aggravated by military service in non-battle casualty and is

                             assessed at 20% or above. The regulation reads:

                        "173. Primary conditions for the grant of disability

                                                                    pension:

                                    Unless otherwise specifically provided a

                   disability pension may be granted to an individual who is

                  invalided from service on account of a disability which is

                    attributable to or aggravated by military service and is

                      assessed at 20 percent or over. The question whether a

                     disability is attributable to or aggravated by military

                 service shall be determined under the rule in Appendix II.”

                                                                          8.

                   The above makes it manifest that only two conditions have

             been specified for the grant of disability pension viz. (i) the

      disability is above 20%; and (ii) the disability is attributable to or

            aggravated by military service. Whether or not the disability is

        attributable to or aggravated by military service, is in turn, to be

                                                                           7

                  determined under Entitlement Rules for Casualty Pensionary

                Awards, 1982 forming Appendix-II to the Pension Regulations.

                 Significantly, Rule 5 of the Entitlement Rules for Casualty

                   Pensionary Awards, 1982 also lays down the approach to be

             adopted while determining the entitlement to disability pension

                                under the said Rules. Rule 5 reads as under:

                          “5. The approach to the question of entitlement to

                   casualty pensionary awards and evaluation of disabilities

                               shall be based on the following presumptions:

                                                 Prior to and during service

                              (a) A member is presumed to have been in sound

                                 physical and mental condition upon entering

                            service except as to physical disabilities noted

                                        or recorded at the time of entrance.

                                  (b) In the event of his subsequently being

                                  discharged from service on medical grounds

                                  any deterioration in his health, which has

                                            taken place, is due to service.”

                                                                          9.

                Equally important is Rule 9 of the Entitlement Rules (supra)

               which places the onus of proof upon the establishment. Rule 9

                                                                      reads:

                       “9. Onus of proof. – The claimant shall not be called

                   upon to prove the conditions of entitlements. He/She will

                   receive the benefit of any reasonable doubt. This benefit

               will be given more liberally to the claimants in field/afloat

                                                             service cases.”

                    10. As regards diseases Rule 14 of the Entitlement Rules

                stipulates that in the case of a disease which has led to an

                                                                           8

             individual’s discharge or death, the disease shall be deemed to

            have arisen in service, if no note of it was made at the time of

                individual’s acceptance for military service, subject to the

            condition that if medical opinion holds for reasons to be stated

                   that the “disease could not have been detected on medical

           examination prior to acceptance for service, the same will not be

                deemed to have so arisen”. Rule 14 may also be extracted for

                                                      facility of reference.

                  “14. Diseases.- In respect of diseases, the following rule

                                                          will be observed –

                        (a) Cases in which it is established that conditions

                                    of military service did not determine or

                                  contribute to the onset of the disease but

                                    influenced the subsequent courses of the

                            disease will fall for acceptance on the basis of

                                                                aggravation.

                              (b) A disease which has led to an individual’s

                                discharge or death will ordinarily be deemed

                             to have arisen in service, if no note of it was

                                        made at the time of the individual’s

                                acceptance for military service. However, if

                                    medical opinion holds, for reasons to be

                                stated, that the disease could not have been

                                    detected on medical examination prior to

                             acceptance for service, the disease will not be

                                       deemed to have arisen during service.

                            (c) If a disease is accepted as having arisen in

                               service, it must also be established that the

                                conditions of military service determined or

                                 contributed to the onset of the disease and

                                         that the conditions were due to the

                                 circumstances of duty in military service.”

                                                         (emphasis supplied)

                                                                           9

                11. From a conjoint and harmonious reading of Rules 5, 9 and

            14 of Entitlement Rules (supra) the following guiding principles

                                                                     emerge:

                                                                          i)

                         a member is presumed to have been in sound physical

                        and mental condition upon entering service except as

                   to physical disabilities noted or recorded at the time of

                                                                   entrance;

                                                                         ii)

                        in the event of his being discharged from service on

                          medical grounds at any subsequent stage it must be

                          presumed that any such deterioration in his health

                      which has taken place is due to such military service;

                                                                        iii)

                      the disease which has led to an individual’s discharge

                                                               or death will

                                      ordinarily be deemed to have arisen in

                       service, if no note of it was made at the time of the

                           individual’s acceptance for military service; and

                                                                         iv)

                       if medical opinion holds that the disease, because of

                         which the individual was discharged, could not have

                                                                        been

                                                                    detected

                                                                          on

                                                                     medical

                                                                 examination

                                                                       prior

                                                                          to

                        acceptance of service, reasons for the same shall be

                                                                     stated.

                                                                          10

              12. Reference may also be made at this stage to the guidelines

            set out in Chapter-II of the Guide to Medical Officers (Military

                                                                  Pensions),

                                                                        2002

                                                                       which

                                                                         set

                                                                         out

                                                                         the

                                                               “Entitlement:

                                                                     General

            Principles”, and the approach to be adopted in such cases. Paras

                           7, 8 and 9 of the said guidelines reads as under:

                        “7. Evidentiary value is attached to the record of a

                      member’s condition at the commencement of service, and

                       such record has, therefore, to be accepted unless any

                            different conclusion has been reached due to the

                 inaccuracy of the record in a particular case or otherwise.

                             Accordingly, if the disease leading to member’s

                  invalidation out of service or death while in service, was

                        not noted in a medical report at the commencement of

                      service, the inference would be that the disease arose

                   during the period of member’s military service. It may be

                  that the inaccuracy or incompleteness of service record on

                         entry in service was due to a non-disclosure of the

                    essential facts by the member e.g. pre-enrolment history

                of an injury or disease like epilepsy, mental disorder, etc.

                    It may also be that owing to latency or obscurity of the

                      symptoms, a disability escaped detection on enrolment.

                             Such lack of recognition may affect the medical

                      categorisation of the member on enrolment and/or cause

                      him to perform duties harmful to his condition. Again,

                            there may occasionally be direct evidence of the

              contraction of a disability, otherwise than by service. In all

                      such cases, though the disease cannot be considered to

                    have been caused by service, the question of aggravation

                     by subsequent service conditions will need examination.

                     The following are some of the diseases which ordinarily

                                              escape detection on enrolment:

                   (a) Certain congenital abnormalities which are latent and

                    only discoverable on full investigations e.g. Congenital

                               Defect of Spine, Spina bifida, Sacralisation,

                           (b) Certain familial and hereditary diseases e.g.

                        Haemophilia, Congential Syphilis, Haemoglobinopathy.

                    (c) Certain diseases of the heart and blood vessels e.g.

                                                                          11

                                  Coronary Atherosclerosis, Rheumatic Fever.

                          (d) Diseases which may be undetectable by physical

                        examination on enrolment, unless adequate history is

                            given at the time by the member e.g. Gastric and

                            Duodenal Ulcers, Epilepsy, Mental Disorders, HIV

                                                                 Infections.

                          (e) Relapsing forms of mental disorders which have

                                                     intervals of normality.

                     (f) Diseases which have periodic attacks e.g. Bronchial

                                                Asthma, Epilepsy, Csom, etc.

                      8. The question whether the invalidation or death of a

                      member has resulted from service conditions, has to be

                 judged in the light of the record of the member’s condition

                       on enrolment as noted in service documents and of all

                          other available evidence both direct and indirect.

                     In addition to any documentary evidence relative to the

                       member’s condition to entering the service and during

                           service, the member must be carefully and closely

                     questioned on the circumstances which led to the advent

                       of his disease, the duration, the family history, his

                pre-service history, etc. so that all evidence in support or

                      against the claim is elucidated. Presidents of Medical

                   Boards should make this their personal responsibility and

                     ensure that opinions on attributability, aggravation or

                    otherwise are supported by cogent reasons; the approving

                   authority should also be satisfied that this question has

                     been dealt with in such a way as to leave no reasonable

                                                                      doubt.

                     9. On the question whether any persisting deterioration

                      has occurred, it is to be remembered that invalidation

                   from service does not necessarily imply that the member’s

                  health has deteriorated during service. The disability may

                      have been discovered soon after joining and the member

                          discharged in his own interest in order to prevent

                    deterioration. In such cases, there may even have been a

                    temporary worsening during service, but if the treatment

                      given before discharge was on grounds of expediency to

                    prevent a recurrence, no lasting damage was inflicted by

                          service and there would be no ground for admitting

                         entitlement. Again a member may have been invalided

                   from service because he is found so weak mentally that it

                  is impossible to make him an efficient soldier. This would

                                                                          12

                    not mean that his condition has worsened during service,

                 but only that it is worse than was realised on enrolment in

                      the army. To sum up, in each case the question whether

                      any persisting deterioration on the available evidence

                which will vary according to the type of the disability, the

                     consensus of medical opinion relating to the particular

                                        condition and the clinical history.”

               13. In Dharamvir Singh’s case (supra) this Court took note of

           the provisions of the Pensions Regulations, Entitlement Rules and

             the General Rules of Guidance to Medical Officers to sum up the

               legal position emerging from the same in the following words:

                    “29.1. Disability pension to be granted to an individual

                    who is invalided from service on account of a disability

                  which is attributable to or aggravated by military service

                      in non-battle casualty and is assessed at 20% or over.

                     The question whether a disability is attributable to or

                   aggravated by military service to be determined under the

                   Entitlement Rules for Casualty Pensionary Awards, 1982 of

                                               Appendix II (Regulation 173).

                      29.2. A member is to be presumed in sound physical and

                  mental condition upon entering service if there is no note

                      or record at the time of entrance. In the event of his

                       subsequently being discharged from service on medical

                   grounds any deterioration in his health is to be presumed

                               due to service [Rule 5 read with Rule 14(b)].

                              29.3. The onus of proof is not on the claimant

                    (employee), the corollary is that onus of proof that the

                       condition for non-entitlement is with the employer. A

                    claimant has a right to derive benefit of any reasonable

                 doubt and is entitled for pensionary benefit more liberally

                                                                   (Rule 9).

                       29.4. If a disease is accepted to have been as having

                     arisen in service, it must also be established that the

                 conditions of military service determined or contributed to

                   the onset of the disease and that the conditions were due

                      to the circumstances of duty in military service [Rule

                                                                     14(c)].

                                                                          13

                   29.5. If no note of any disability or disease was made at

                 the time of individual’s acceptance for military service, a

                 disease which has led to an individual’s discharge or death

                      will be deemed to have arisen in service [Rule 14(b)].

                   29.6. If medical opinion holds that the disease could not

                      have been detected on medical examination prior to the

                         acceptance for service and that disease will not be

                     deemed to have arisen during service, the Medical Board

                          is required to state the reasons [Rule 14(b)]; and

                   29.7. It is mandatory for the Medical Board to follow the

                  guidelines laid down in Chapter II of the Guide to Medical

                  Officers (Military Pensions), 2002 — “Entitlement: General

                Principles”, including Paras 7, 8 and 9 as referred to above

                                                                 (para 27).”

                   14. Applying the above principles this Court in Dharamvir

             Singh’s case (supra) found that no note of any disease had been

          recorded at the time of his acceptance into military service. This

           Court also held that Union of India had failed to bring on record

                  any document to suggest that Dharamvir was under treatment

          for the disease at the time of his recruitment or that the disease

               was hereditary in nature. This Court, on that basis, declared

                 Dharamvir to be entitled to claim disability pension in the

                absence of any note in his service record at the time of his

                      acceptance into military service. This Court observed:

                      “33. In spite of the aforesaid provisions, the Pension

                     Sanctioning Authority failed to notice that the Medical

                   Board had not given any reason in support of its opinion,

                       particularly when there is no note of such disease or

                                                                          14

              disability available in the service record of the appellant at

                  the time of acceptance for military service. Without going

                         through the aforesaid facts the Pension Sanctioning

                         Authority mechanically passed the impugned order of

                  rejection based on the report of the Medical Board. As per

                         Rules 5 and 9 of the Entitlement Rules for Casualty

                      Pensionary Awards, 1982, the appellant is entitled for

                    presumption and benefit of presumption in his favour. In

                      the absence of any evidence on record to show that the

                           appellant was suffering from “generalised seizure

               (epilepsy)” at the time of acceptance of his service, it will

                    be presumed that the appellant was in sound physical and

                    mental condition at the time of entering the service and

                deterioration in his health has taken place due to service.”

                  15. The legal position as stated in Dharamvir Singh’s case

           (supra) is, in our opinion, in tune with the Pension Regulations,

              the Entitlement Rules and the Guidelines issued to the Medical

              Officers. The essence of the rules, as seen earlier, is that a

              member of the armed forces is presumed to be in sound physical

         and mental condition at the time of his entry into service if there

               is no note or record to the contrary made at the time of such

           entry. More importantly, in the event of his subsequent discharge

          from service on medical ground, any deterioration in his health is

            presumed to be due to military service. This necessarily implies

               that no sooner a member of the force is discharged on medical

        ground his entitlement to claim disability pension will arise unless

            of course the employer is in a position to rebut the presumption

           that the disability which he suffered was neither attributable to

                                                                          15

                  nor aggravated by military service. From Rule 14(b) of the

           Entitlement Rules it is further clear that if the medical opinion

                 were to hold that the disease suffered by the member of the

               armed forces could not have been detected prior to acceptance

            for service, the Medical Board must state the reasons for saying

                                                                         so.

                   Last but not the least is the fact that the provision for

               payment of disability pension is a beneficial provision which

           ought to be interpreted liberally so as to benefit those who have

                  been sent home with a disability at times even before they

                completed their tenure in the armed forces. There may indeed

                be cases, where the disease was wholly unrelated to military

             service, but, in order that denial of disability pension can be

          justified on that ground, it must be affirmatively proved that the

                                disease had nothing to do with such service.

                                                               The burden to

             establish such a disconnect would lie heavily upon the employer

          for otherwise the rules raise a presumption that the deterioration

                 in the health of the member of the service is on account of

          military service or aggravated by it. A soldier cannot be asked to

                  prove that the disease was contracted by him on account of

               military service or was aggravated by the same. The very fact

               that he was upon proper physical and other tests found fit to

                                                                          16

          serve in the army should rise as indeed the rules do provide for a

               presumption that he was disease-free at the time of his entry

           into service. That presumption continues till it is proved by the

                   employer that the disease was neither attributable to nor

             aggravated by military service. For the employer to say so, the

            least that is required is a statement of reasons supporting that

          view. That we feel is the true essence of the rules which ought to

         be kept in view all the time while dealing with cases of disability

                                                                    pension.

              16. Applying the above parameters to the cases at hand, we are

                    of the view that each one of the respondents having been

           discharged from service on account of medical disease/disability,

                  the disability must be presumed to have been arisen in the

                  course of service which must, in the absence of any reason

                     recorded by the Medical Board, be presumed to have been

                 attributable to or aggravated by military service. There is

                   admittedly neither any note in the service records of the

            respondents at the time of their entry into service nor have any

              reasons been recorded by the Medical Board to suggest that the

                disease which the member concerned was found to be suffering

             from could not have been detected at the time of his entry into

                                                                          17

              service. The initial presumption that the respondents were all

          physically fit and free from any disease and in sound physical and

               mental condition at the time of their entry into service thus

              remains unrebutted. Since the disability has in each case been

                assessed at more than 20%, their claim to disability pension

                           could not have been repudiated by the appellants.

               17. In the result these appeals fail and are hereby dismissed

                                              without any order as to costs.

                          ................................................J.

                                                               (T.S. THAKUR)

                          ................................................J.

                                                              (R. BANUMATHI)

                                                                   New Delhi

                                                           February 13, 2015

                                                                          18

                                                                  ITEM NO.1A

                                                              (For Judgment)

                                                                  COURT NO.2

                                                 S U P R E M E C O U R T O F

                                                       RECORD OF PROCEEDINGS

                                                                SECTION XVII

                                                                   I N D I A

                                                   Civil Appeal No.2904/2011

                                                       UNION OF INDIA & ANR.

                                                                Appellant(s)

                                                                      VERSUS

                                                                RAJBIR SINGH

                                                               Respondent(s)

                                                                        WITH

                              C.A.No............./2015 @SLP(C)No.26401/2010,

                              C.A.No............./2015 @SLP(C)No.32190/2010,

                                                           C.A.No.1498/2011,

                                                           C.A.No.2279/2011,

                                                           C.A.No.2905/2011,

                                                           C.A.No.3409/2011,

                                                           C.A.No.4409/2011,

                                                           C.A.No.5090/2011,

                                                           C.A.No.5144/2011,

                                                           C.A.No.5163/2011,

                                                           C.A.No.5414/2011,

                                                           C.A.No.5469/2011,

                                                           C.A.No.5840/2011,

                                                           C.A.No.7368/2011,

                                                           C.A.No.7479/2011,

                                                           C.A.No.7629/2011,

                                                          C.A.No.10105/2011,

                                                          C.A.No.10747/2011,

                                                          C.A.No.11398/2011,

                              C.A.No............./2015 @SLP(C)No.14478/2011,

                              C.A.No............./2015 @SLP(C)No.15768/2011,

                                                        SLP(C)No.22765/2011,

                                                            C.A.No.167/2012,

                                                            C.A.No.183/2012,

                                                           C.A.No.5260/2012,

                                                           C.A.No.5819/2012,

                             C.A.No............../2015 @ SLP(C)No.27220/2012

                                                           C.A. D 16394/2013

            Date : 13/02/2015 These appeals were called on for pronouncement

                                                          of judgment today.

                                                                          19

                                                            For Appellant(s)

                                                      Mrs. Anil Katiyar,Adv.

                                                      Mr. R.D. Upadhyay,Adv.

                                                      Mr. J.P. Tripathi,Adv.

                                               Mr. Awadhesh Kumar Singh,Adv.

                                                      Ms. Asha Upadhyay,Adv.

                                                       Mr. Anand Mishra,Adv.

                                               Mr. Amrendra Kumar Singh,Adv.

                                                      Mr. Abhijeet Shah,Adv.

                                             For Dr. (Mrs.) Vipin Gupta,Adv.

                                                   Mr. B.V. Balaram Das,Adv.

                                                           For Respondent(s)

                                                       Mr. R.C. Kaushik,Adv.

                                               Mr. Avijit Bhattacharjee,Adv.

                                                      Dr. Kailash Chand,Adv.

                                                      Mr. Sanchar Anand,Adv.

                                                    Mr. Apoorva Singhal,Adv.

                                                 For Mr. Devendra Singh,Adv.

                                                                         Mr.

                                                                         Mr.

                                                                         Ms.

                                                                         Mr.

                                                        Sanjay R. Hegde,Adv.

                                                          Bineesh Karat,Adv.

                                                           Usha Nandini,Adv.

                                                          Biju R. Raman,Adv.

                                                        Mr. Nikhil Jain,Adv.

                                                Mr. Prakash Kumar Singh,Adv.

                                                 Mr. Ranbir Singh Yadav,Adv.

                                                Mr. Bimlesh Kumar Singh,Adv.

                                                     Mr. Saurabh Mishra,Adv.

                                                       Mr. Dinesh Verma,Adv.

                                                       Mr. Rajat Sharma,Adv.

                                             For Mr. Subhasish Bhowmick,Adv.

                                                     Mr. Pawan Upadhyay,Adv.

                                               Mr. Sarvjit Pratap Singh,Adv.

                                              For Ms. Sharmila Upadhyay,Adv.

                                                        Mr. Mohan Kumar,Adv.

                                                                          20

                                                 Mr. Ghan Shyam Vasisht,Adv.

                                                                   In-person

                                                                   In-person

                       UPON hearing the counsel the Court made the following

                                                                   O R D E R

                        Civil Appeal No.2904/2011,C.A.No............./2015 @

                 SLP(C)No.26401/2010,C.A.No.........../2015 @SLP(C)No.32190/

                 2010, C.A.No.1498/2011, C.A.No.2279/2011, C.A.No.2905/2011,

                  C.A.No.3409/2011, C.A.No.5090/2011, C.A.No.5144/2011, C.A.

                  No. 5163/2011, C.A.No.5414/2011, C.A.No.5469/2011, C.A.No.

                      5840/2011, C.A.No.7368/2011, C.A.No.7479/2011, C.A.No.

                    7629/2011, C.A.No.10105/2011, C.A.No.10747/2011, C.A.No.

                                                                 11398/2011,

                                                    C.A.No............./2015

                                                    C.A.No............./2015

                                                       @SLP(C)No.14478/2011,

                                                       @SLP(C)No.15768/2011,

                                                                 C.A.No.167/

                  2012, C.A.No.183/2012, C.A.No.5260/2012, C.A.No.5819/2012,

                                                   C.A.No............../2015

                                                                           @

                                                         SLP(C)No.27220/2012

                                                                         and

                                      C.A.No........./2015 D No.16394/2013 :

                                                                     Hon'ble

                                                                         Mr.

                                                                     Justice

                                                                        T.S.

                                                                      Thakur

                                                                  pronounced

                                                                         the

                    reportable judgment of the Bench comprising His Lordship

                                      and Hon'ble Mrs. Justice R. Banumathi.

                                                                       Delay

                                                                          in

                                                       C.A.No........../2015

                                                             D.No.16394/2013

                                                                          is

                                                                   condoned.

                                                              Leave granted.

                            The appeals are dismissed in terms of the signed

                                                        reportable judgment.

                                  C.A.No.4409/2011 and SLP(C)No.22765/2011 :

                                                                      Delink

                                                                        from

                                                                         the

                                                                       batch

                                                                         and

                                                                        list

                                                                         the

                                                                     matters

                                                                 separately.

                                                            (Sarita Purohit)

                                                                Court Master

                                                               (Veena Khera)

                                                                Court Master

                          (Signed reportable judgment is placed on the file)

                                                                          21

                                                              NON REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                              I.A. NO.4 OF 2015
                                     IN
                       CIVIL APPEAL  NO. 11133 OF 2011

M/S. ADANI POWER LTD.  …     APPLICANT/APPELLANT

Versus

GUJARAT ELECTRICITY REGULATORY
COMMISSION & OTHERS          …    RESPONDENTS


                                  O R D E R
Chelameswar, J.


1.     This  application  is  filed  by  the  appellant  in   Civil   Appeal
No.11133/2011.  The prayer in the application is as follows:
“a)   to stay the operation of the  impugned  Judgment  dated  7.9.2011  and
suspend further supply of  electricity  in  terms  of  the  PPA  during  the
pendency of this Appeal.

b)    in the alternative to prayer (a) above, during  the  pendency  of  the
accompanying Civil Appeal the Hon’ble Court may direct the Respondent(s)  to
pay the tariff as per CERC norms for tariff on cost  plus  basis;  and  also
make the payment from the date of the supply of power under the PPA  of  the
differential amount between the PPA tariff and the tariff as per CERC  norms
for tariff on cost plus basis on  the  such  terms  and  condition  as  this
Hon’ble court deems fit as just and proper;”

However, prayer (a) was not  pressed  when  the  matter  was  taken  up  for
hearing.  A brief background  of  the  appeal  and  the  application  is  as
follows.

2.    The  appellant  company  is  a  power  generating  company.   The  2nd
respondent herein is a company owned by the State  of  Gujarat  carrying  on
business of purchasing power in bulk from power  generating  companies  such
as the appellant herein and supplying to various distributing  companies  in
the State of Gujarat.

3.    The appellant and the 2nd respondent entered  into  a  Power  Purchase
Agreement (hereinafter PPA, for  short).   Under  the  said  agreement,  the
appellant is obliged to sell 1000 megawatt of  power  from  the  appellant’s
power project.  For various reasons, the details of which are not  necessary
at  this  stage,  the  appellant  issued  a  notice  of  termination   dated
28.12.2009 of the above mentioned PPA w.e.f. 4.1.2010.

4.    After some correspondence, the 2nd respondent filed a petition  before
the Gujarat Electricity Regulatory Commission (the  1st  respondent  herein)
seeking adjudication of the dispute arising out of termination  of  the  PPA
by the appellant.

5.    The 1st respondent, by  its  order  dated  31.8.2010,  set  aside  the
termination notice sent by the  appellant  and  directed  the  appellant  to
supply power to the 2nd respondent as per the terms of the PPA.

6.    Aggrieved by the said order,  the  appellant  carried  the  matter  in
appeal  before  the  Appellate  Tribunal  for  Electricity   unsuccessfully.
Hence, the appeal No.11133/2011.  The appeal was admitted by an order  dated
13.8.2012 and since pending.  Hence the instant application  with  averments
as follows:
“7.   If the relief sought for by the Appellant is not granted, there  is  a
serious risk of  Mundra  Power  Project  becoming  a  Non  Performing  Asset
causing an irreparable harm to the consumers as well as the lenders  of  the
Mundra Power Project.  Since the main Civil Appeal is  pending  adjudication
for  final  hearing  and  the  Appellant  is  supplying  the  power  to  the
Respondent  No.2  –  GUVNL,  the  present  application  is  being  filed  to
compensate the Appellant upto the actual cost  of  generation  as  per  CERC
norms for determination of tariff.  The same is  in  order  to  sustain  the
generation and supply of  power  pending  the  hearing  of  the  main  Civil
Appeal.

            xxxx       xxxx       xxxx

9.    It is submitted that whereas the pendency of  the  present  appeal  is
piling huge losses upon the Appellant no prejudice would  be  occasioned  to
the Respondents if the present Application is allowed on an  undertaking  by
the Appellant to refund the amount over and above the PPA tariff  that  will
be paid, to the Respondent No.2 or such  other  condition  as  this  Hon’ble
Court may deem fit. Alternatively, in view  of  the  recurring  losses,  the
Appellant be permitted to suspend further supply of electricity in terms  of
the PPA during the pendency of this Appeal.  This shall  meet  the  ends  of
justice.”


7.    On behalf of the 2nd respondent,  an  affidavit  dated  23.11.2015  is
filed.  The said affidavit, while contesting the various assertions made  by
the appellant and its rights, stated:
15.   I submit that, without prejudice to the rights of the Respondent  No.2
to contest the present appeal, the answering Respondent  with  the  approval
of  Government  of  Gujarat  has  already  shown  its  willingness  to   pay
compensatory tariff prospectively (from next month of CERC order i.e.  March
2014) subject to paras 12 and 13  above  to  resolve  the  issue  by  making
suitable adjustments in tariff which till date is  not  implemented  because
of non acceptance by Appellant and other stakeholders.

16.   I say that without prejudice to its rights in the present appeals  the
Respondent No.2 is willing to implement the decisions  of  State  Govt.  for
paying compensatory tariff prospectively (from  next  month  of  CERC  order
i.e. March 2014) to resolve the  issue  by  making  suitable  adjustment  in
tariff on the directions of the Hon’ble Court. xxxxxx”



8.    Shri Prashant Bhushan, learned counsel appearing for  respondent  No.4
opposed the prayers of the applicant alleging that  the  2nd  respondent  is
colluding with the appellant as there is no occasion for the  respondent  to
make any concession such as the one made in the affidavit filed by  the  2nd
respondent (the relevant portion of  which  are  already  extracted  above).
More particularly, when the 2nd respondent succeeded before two fora  below,
the concession of the 2nd respondent  to  pay  compensatory  tariff  to  the
appellant though said to be subject to the contentions of the respondent  in
the appeal is nothing but largesse of the State to  the  appellant  and  not
consistent with public interest.  He further submitted that this  Court  may
not affix a stamp of approval for such a decision of the 2nd  respondent  by
passing any order accepting the concession  made  by  the  respondent.    He
also submitted that the payment of  compensatory  tariff  to  the  appellant
would ultimately result in compelling the consumers to pay higher price.

9.    On the other hand, Shri Harish Salve, learned senior counsel  for  the
appellant denied the allegations of collusion between the appellant and  the
2nd respondent.  He argued that  the  decision  of  the  2nd  respondent  is
supported by a decision of the State of Gujarat  on  an  assessment  of  the
subsequent developments.  He submitted  that  compelling  the  appellant  to
supply energy in terms of the  PPA  is  bound  to  financially  destroy  the
appellant company and therefore prayed that the 2nd respondent be  permitted
to make the payment in terms of his concession.

10.   A PPA is a contract between the parties and the terms of any  contract
are nothing but the agreed terms of the contracting parties.  It is  also  a
settled principle of the law of contracts that parties  to  a  contract  can
alter the terms of the contract subsequent to the formation of the  contract
by mutual consent.



11.    However,  the  rights  of   the   State   and   its   agencies    and
instrumentalities in  the  realm  of  contracts  are  circumscribed  by  the
considerations of public interest.  Apart from such general  principle,  the
rights and obligations of the parties  to  the  PPA  in  question  are  also
subject to certain statutory prescriptions.

12.   The questions (i) whether the appellant is entitled to  terminate  the
PPA and (ii) if so, on what terms and conditions are to be examined  in  the
appeal.

13.   Independent of such right, if any, of the appellant,  if  the  parties
to the PPA are agreeable to alter the terms of the PPA (as indicated in  the
counter) for whatever reasons, whether such a variation is  consistent  with
the requirements of the statutes applicable to the contract  is  a  separate
question.  Whether such a variation is consistent  with  the  larger  public
interest is altogether a different question.  An ancillary  question  arises
whether such an issue can be properly the  subject  matter  of  the  instant
appeal.  All these matters require a detailed examination as  and  when  the
appeal is taken up for hearing.

14.   Coming to the question whether the 2nd respondent be directed  to  pay
the appellant compensatory tariff as indicated in its  counter,  we  are  of
the opinion no direction can be given at this stage during the  pendency  of
the appeal as the right  of  the  appellant  for  such  compensatory  tariff
appears to be one of the issues in the appeal.

15.   In so far as the question of permitting the 2nd respondent to pay  the
compensatory tariff as indicated in its counter, we are of the opinion  that
it requires no permission from this Court.  It is upto  the  2nd  respondent
to take a decision in accordance with law to the best of its  understanding.
 We may make it clear that if  the  2nd  respondent  chooses  to  make  such
payment, the same shall be subject to the result of the appeal.

The I.A. is disposed of as indicated above.


                                                             ….………………………….J.
                                                      (J. Chelameswar)



                                                             …….……………………….J.
                                        (Abhay Manohar Sapre)

New Delhi;
December 3, 2015

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