Page 1 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

1

Page 2 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 5

th

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 5

th

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

2

Page 3 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

3

Page 4 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 5

th

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

4

Page 5 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 Ser-

vice 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 ser -

vice benefits including retirement benefits as hitherto.

3.This issue with the approval of Ministry of Finance (Depart-

ment 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 IN -

DIA.”

(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

5

Page 6 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 re-

tirement/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 irre-

spective 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 qualify-

ing service and minimum pension shall continue to be operat-

ive. 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 con-

cerned, 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

6

Page 7 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 su-

perannuation/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

7

Page 8 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

8

Page 9 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

9

Page 10 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.

10

Page 11 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

11

Page 12 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

12

Page 13 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 al-

lowed. 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.

13

Page 14 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

14

Page 15 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%

15

Page 16 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.

16

Page 17 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

17

Page 18 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

18

Page 19 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:

19

Page 20 “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

20

Page 21 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 ob-

served 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 submis-

sions advanced by the Counsel for the petitioner that the peti-

tioner 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 re-

spondents 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

21

Page 22 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 judg-

ment of this Court in Col. B. J. Akkara’s case. The writ petitions filed by the ap-

pellants 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

22

Page 23 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 affi-

davit dated 24.5.2013. Thereafter, the counsel for the parties made further argu-

ments 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.

23

Page 24 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 dis-

missed 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 ap-

24

Page 25 peals 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 imple-

mented 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 de-

cision 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 Gen-

eral 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

25

Page 26 the benefits of the orders of the three High Courts because this Court had not in-

terpreted 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 re-

spondents. 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 or-

ders 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 ille-

gal 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

26

Page 27 Court in some matters on account of improper advice or negli-

gence 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 con-

sidered as individual cases or because they are considered as

cases not involving stakes which may adversely affect the in-

terest of the State. Therefore, the circumstance of the non-filing

of the appeals by the State in some similar matters or the rejec-

tion 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 mat-

ters, 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

27

Page 28 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 over-

looked.”

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 pen-

sion 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 re-

gard 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 re-

percussions 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 res-

isting subsequent writ petitions, even though judgment in a case in-

volving similar issue was allowed to reach finality in the case of oth-

ers. 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

28

Page 29 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 De-

fence Ministry circular dated 11-9-2001) has been upheld and that de-

cision has attained finality will not come in the way of the State de-

fending 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 connec-

ted matters by filing special leave petitions, which were converted into Civil Ap-

peal Nos.1972-1974/2003 and during the pendency of the appeals, a conscious de-

cision was taken by the Government of India not to pursue the appeals and imple-

ment 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 mat-

ter 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 de-

cisions 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 Govern-

29

Page 30 ment 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 pay-

able 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 vi-

olation of Article 14 of the Constitution.

30.The judgment in Col. B.J. Akkara’s case cannot be applied to the appel-

lants’ case because the circulars, which fell for interpretation in that case and

those under consideration in these appeals are different in material aspect. By cir-

cular dated 7.6.1999, the Ministry of Defence conveyed the decision of the Pres-

ident that “with effect from 1-1-1996, pension of all armed forces pensioners irre-

spective 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

30

Page 31 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 ser-

vice for full pension. [Vide clause 2.1 (a).]

(ii) Where the revised and consolidated pension of pre-1-1-1996 pen-

sioners are not beneficial to him/her under these orders and is either

equal to or less than existing consolidated pension under this Min-

istry’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 fol-

lowing 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….

31

Page 32 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 Pen-

sion and Pensioners’ Welfare and the Department of Expenditure and

it is clarified that NPA is not to be taken into consideration after refix-

ation 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 strik-

ing 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 con-

tained in circular dated 7.6.1999. Therefore, the clarification issued by the Min-

istry 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.

32

Page 33 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 con-

cerned authorities within a period of three months from today.

………………………… J.

(G.S.SINGHVI)

NEW DELHI; ………………………J.

NOVEMBER 27, 2013 (KURIAN JOSEPH)

.

33