Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1096 OF 2010

[ARISING OUT OF SLP (CIVIL) NO.9071 OF 2009]

UNION OF INDIA … APPELLANT

VERSUS

R.K. CHOPRA … RESPONDENT

J U D G M E N T

K.S. Radhakrishnan, J.

Leave granted.

2.We are, in this case, concerned with a claim of a Government

servant for revision of subsistence allowance based on the pay

revision effected by the Central Civil Services (Revision Pay ) Rules,

1997, which came into force on the 1

st

day of January, 1996, while

he was under suspension from service.

3.The Respondent herein was working as a Desk Officer in the

Department of Industrial Policy and Promotion under the Ministry of

Commerce and Industries. While so, a case was registered against

1

him by Central Bureau of Investigation under the Prevention of

Corruption Act and he was placed under suspension by the

Department w.e.f. 06.06.1989 under rule 10 (2) of the CCS (CCA)

Rules 1965. Subsistence allowance due to him under Fundamental

Rules 53 (1) (ii) (a) was paid to him which was later enhanced to 50%

vide order No. 5/7/99, dated 30.05.1991. At the time of suspension

he was in the scale of pay of Rs. 2000-3500 and was drawing a

basic pay of Rs. 2,825/-. While undergoing suspension he made a

representation on 22.7.2002 for revision of subsistence allowance

based on the 5

th

Pay Commission Report. Request was rejected by

the Government of India, Ministry of Commerce and Industries vide

Memorandum dated 29.10.2002 stating that a person under

suspension is not entitled to draw either the increment during the

period of suspension or get his pay fixed in the revised scale. Later

he filed another representation on 05.07.2005 reiterating the same

request which was replied by Memorandum dated 18.08.2005 stating

that his earlier representation was already rejected. Respondent was

later dismissed from service on 04.08.2005 since he was convicted

by the Criminal Court vide its judgment dated 30.03.2002.

2

4. The Respondent after dismissal from service approached the

Central Administrative Tribunal (Principal Bench), New Delhi and filed

O.A. No.29/2006 challenging the above-mentioned orders dated

29.10.2002 and 18.08.2005 and sought a declaration that he was

entitled to get subsistence allowance on the revised pay-scale with

effect from 1.1.1996. Reliance was placed on a Full Bench order of

the Tribunal in J.S. Kharat Vs. Union of India [2002-2003 (CAT) Full

Bench Judgments 169]. The Department took up the stand that in

view of Note 3 to Rule 7 of Central Civil Services (Revised Pay)

Rules, 1997, (for short ‘Revised Pay Rules’) the Respondent would

not be entitled to get subsistence allowance on the revised pay-scale

with effect from 1.1.1996. Further, it was also contended that the Full

Bench of the Tribunal in the case of J.S. Kharat was not concerned

with the applicability of the above-mentioned Rules. Rejecting the

contention the Tribunal took the view that it would be unjust to deny

the subsistence allowance on the basis of revised pay to the persons

who stood suspended prior to 01.01.1996, especially when persons

who were suspended after that date would be entitled to get

subsistence allowance on the revised pay scale. This, according to

the Tribunal, would lead to an anomalous situation. The Tribunal,

3

however, held that since the respondent did not challenge the earlier

communication dated 29.10.2002, rejecting his claim, he would not

be entitled to any arrears on account of revised subsistence

allowance till the said date. Further, it was ordered that he would be

entitled to arrears of revision of subsistence allowance from

01.01.2002 till 04.08.2005 when he was dismissed from service.

5.Aggrieved by the order passed by the Tribunal, the Union of

India took up the matter before the Delhi High Court vide Writ Petition

(Civil) No.1899/2007. The High Court following its earlier judgment in

Commissioner of Police v. Randhir Singh [Writ Petition (Civil)

No.713/2008 decided on 29.01.2008] dismissed the appeal holding

that it did not find any infirmity in the order of the Full Bench of the

Tribunal in J.S. Kharat’s case (supra). Aggrieved by the said order

dated 04.08.2008, this appeal has been preferred by the Union of

India.

6.Shri Mohan Parasaran, Additional Solicitor General of India

submitted that the Tribunal as well as the Delhi High Court have not

properly appreciated the scope of Note 3 to Rule 7 of the Revised

Pay Rules. Learned counsel submitted that the Full Bench of the

4

Tribunal in J.S. Kharat’s case (supra) was primarily concerned with

the interpretation of Rule 6(1) the Railway Servants (Revised Pay)

Rules 1986 and the validity of Note 3 to Rule 7 of the Revised Pay

Rules, was not an issue before the Tribunal. Learned counsel also

submitted that the High Court and Tribunal have failed to appreciate

that the payment of subsistence allowance is based on leave salary

(not pay) admissible during half pay leave and leave salary linked to

pay drawn immediately before proceeding on leave. Learned counsel

submitted that the respondent is, therefore, not entitled to the benefit

of subsistence allowance linked to pay or revised pay which he would

have drawn but for being placed under suspension. Learned counsel

also submitted that the Government of India’s decisions 3 (e) below

FR 53 shows that the subsistence allowance cannot be revised with

retrospective effect and in the instant case the respondent was

dismissed from service and the question of revision of subsistence

allowance did not arise. Learned counsel also pointed out that

there was no challenge to the validity of Note -3 to Rule 7 of

Revised Pay Rules and the Tribunal committed an error in failing to

apply to the said note to rule 7 to the instant case. The

respondent appeared in person and submitted that there is no

5

illegality in the order passed by the Tribunal which was confirmed by

the High Court.

7.We notice both the High Court as well as the Tribunal has

placed heavy reliance on the order of Full Bench of the tribunal in

J.S. Kharat’s case (supra) and took the view that the delinquent

officer would be entitled to enhanced subsistence allowance on the

basis of the upward revision of pay based on the 5

th

Central Pay

Commission Report, implemented by the Revised Pay Rules.

Reference was also made to the decisions of this Court in State of

Maharashtra vs. Chandrabhan Tale [(1983) 3 SCC 387]; Khem

Chand vs. Union of India [ 1963 Supp. 1 SCR 229]; Jagdamba

Prasad Shukla Vs. State of U.P and others [(2000) 7 SCC 90]; P.L.

Shah vs. Union of India and Anr. [(1989) 1 SCC 546]; R.P. Kapur Vs.

Union of India & Ors. [(1999) 8 SCC 110]; and Umesh Chandra Misra

vs. Union of India [1993 Supp. (2) SCC 210]

8.We notice that in none of the aforesaid judgments the validity of

Note 3 to rule 7 of the Revised Pay Rules came up for consideration.

In Chandrabhan’s case (supra), this Court was examining the validity

of the second proviso to Rule 151 (1) (ii) (b) of the Bombay Civil

Service Rules, 1959 which prescribed payment of subsistence

6

allowance at the rate of Rs. 1 per month. Court struck down the

proviso as void and unreasonable and ordered that the Civil Servant

is entitled to the normal subsistence allowance. The above ruling is

of no assistance to the respondent.

9.In Khem Chand’s case this Court was examining the validity of

Rule 12(4) of the CCS (CC&A) Rules 1957 which has nothing do with

the question involved in the present case. This Court was generally

explaining the scope and effect of a suspension order stating that the

real effect of a suspension order is that though a Government

servant continues to be a member of the Service he is not permitted

to work during the period of suspension and he is entitled to

subsistence allowance which is normally less than the salary.

10.In Jagdamba Prasad Shukla’s case (supra) subsistence

allowance was denied to the Government Servant since he had

omitted to furnish the certificate as required under the U.P.

Fundamental Rules 53(2) indicating that he was not employed

elsewhere during the period of suspension. Non payment of

subsistence allowance, this Court held, has vitiated the departmental

enquiry and the consequent removal order.

7

11.In P.L. Shah’s case (supra) this Court was dealing with a case

of reduction of subsistence allowance from 50% to 25% of salary.

Order was challenged before the Tribunal which dismissed the

petition on the ground of delay. This Court set aside the orders of

the Tribunal and the matter was remanded for fresh consideration,

holding that the subsistence allowance should be sufficient for the

bare sustenance in this world in which prices of the necessaries of

life are increasing every day on account of conditions of inflation

obtaining in the country. It was held that since Government Servant

cannot engage himself in any other activity during the period of

suspension and the amount of subsistence allowance payable to the

Government Servant be reviewed from time to time when

proceedings drag on long time even though there may be no express

rule insisting of such review.

12.In R.P. Kapur’s case (supra), this Court was dealing with the

scope of Railway Services (Pension) Rules, 1993 and the effect of

Note 1 and proviso to Rule 50 and the Court took the view that the

above-mentioned proviso is not applicable to a case of compulsory

retirement. The scope of Note 3 to Rule 7 was not in issue in R.P.

Kapur’s case.

8

13.In Umesh Chandra Misra’s case (supra), this Court was

dealing with the case of a railway employee who was denied

subsistence allowance at the rate of 75% of the salary for the period

from May 20, 1976 to February 17, 1977 and this Court directed the

respondents to pay him the subsistence allowance from November

20, 1975 to May 19, 1976 at the rate of 50 per cent of the salary and

from May 20, 1976 to February 17, 1977 at the rate of 75 per cent of

the salary with interest on both the amounts with a further direction

that the subsistence allowance be paid on the basis of the revised

scale of pay. The legality of Note 3 to Rule 7 was never an issue in

that case.

14.The claim for payment of subsistence allowance of a

Government servant is dealt with in Chapter VIII of Fundamental

Rules. FR 53 which relevant for our purpose reads follows:-

“F.R.53.(1) A Government servant under

suspension or deemed to have been placed

under suspension by an order of the appointing

authority shall be entitled to the following

payments, namely:-

(i) xxxx xxxx xxxx xxxx

(ii)in the case of any other Government servant—

9

(a) a subsistence allowance at an amount equal to

the leave salary which the Government servant

would have drawn, if he had been on leave on

half average pay or on half-pay and in addition,

dearness allowance, if admissible on the basis of

such leave salary;

Provided that where the period of suspension

exceeds three months, the authority which made

or is deemed to have made the order of

suspension shall be competent to vary the

amount of subsistence allowance for any period

subsequent to the period of the first three months

as follows:-

(i) the amount of subsistence allowance may be

increased by a suitable amount, not exceeding

50 per cent of the subsistence allowance

admissible during the period of the first three

months, if, in the opinion of the said authority, the

period of suspension has been prolonged for

reasons to be recorded in writing, not directly

attributable to the Government servant;

(ii) the amount of subsistence allowance, may be

reduced by a suitable amount, not exceeding 50

per cent of the subsistence allowance admissible

during the period of the first three months, if, in

the opinion of the said authority, the period of

suspension has been prolonged due to reasons,

to be recorded in writing, directly attributable to

the Government servant;

(iii)the rate of dearness allowance will be based on

the increased or, as the case may be, the

decreased amount of subsistence allowance

admissible under sub-clauses (i) and (ii) above.

(b) Any other compensatory allowances admissible

from time to time on the basis of pay of which the

1

Government servant was in receipt on the date of

suspension subject to the fulfillment of other

conditions laid down for the drawal of such

allowances.

xxxx xxxx xxxx

15.The said Rule provides that the Government servant under

suspension shall be entitled to subsistence allowance at an amount

equal to the leave salary which the Government servant would have

drawn if he had been on leave on half average pay or on half pay and

in addition, dearness allowance if admissible on the basis of such

leave salary. The proviso to Rule 53 (1)(ii) (a) says that where the

period of suspension exceeds three months, the authority is

competent to vary the amount subject to some restrictions.

16.We may in this connection refer to a Government of India order

G.M.O.M. No. F-2(36)-Ests/-III/58 dated 27

th

August, 1958 given in

the Swamy’s compilation of Fundamental and supplementary Rules,

which deals with the revision of scale of pay while a Government

Servant is under suspension. The two categories of cases have been

dealt with in that Office Memorandum. One refers to cases in which

the revised scale of pay takes effect from a date prior to the date of

suspension and other cases in which the revised scales of pay takes

effect from a date falling within the period of suspension.

1

Office Memorandum reads as follows:-

“(2) Revision of scale of pay while under suspension

—A question having arisen as to whether a Government

servant under suspension might be given an option to

elect any revised scales of pay which might be introduced

in respect of the post held by him immediately prior to

suspension is revised, the Government of India have

decided as follows:-

1. Cases in which the revised scale of

pay takes effect from a date prior to

the date of suspension.

In such cases the Government servant should be

allowed to exercise the option under FR 23 even if the

period during which he is exercise the option falls within

the period of suspension. He will be entitled to the benefit

of increase in pay, if any, in respect of the duty period

before suspension, and also in the subsistence

allowance, for the period of suspension, as a result of

such option.

2. Cases in which the revised scale of

pay takes effect from a date falling

within the period of suspension.

(a)Under suspension a Government servant retains a

lien on his substantive post. As the expression

‘holder of a post’ occurring in FR 23 includes also a

person who holds a lien or a suspended lien on the

post even though he may not be actually holding the

post, such a Government servant should be allowed

the option under FR 23 even while under suspension.

The benefit of option will, however, practically accrue

to him in respect of the period of suspension, only

after his reinstatement depending on the fact whether

the period of suspension is treated as duty or not.

1

(b)A Government servant who does not retain a lien on a

post the pay of which is changed, is not entitled to

exercise the option under FR 23. If, however, he is

reinstated in the post and the period of suspension is

treated as duty, he may be allowed to exercise the

option after such reinstatement. In such cases, if

there is a time-limit prescribed for exercising the

option and such period had already expired during the

period of suspension, a relaxation may be made in

each individual case for extending the period during

which the option may be exercised.

17.The above mentioned Rules as well as the Memorandum

makes it clear that if there is a revision of scale of pay in respect of a

post held by a Government Servant, prior to the suspension period,

he is permitted to exercise option under FR 23, even if the period

during which he is to exercise the option falls within the period of

suspension and then, he will be entitled to the benefit of increase in

pay and also in subsistence allowance for the period of suspension,

as a result of such option. But if the revised scale of pay takes effect

from a date falling within the period of suspension then, the benefit of

option, for revised scale of pay will accrue to him in respect of the

period of suspension only after his reinstatement depending on the

fact whether the period of suspension is treated as duty or not. In the

present case, the Revised Pay Rules, came into force on 1

st

day of

1

January, 1996 when the respondent was under suspension.

Therefore, even if he had exercised his option under FR 23 for the

benefit of the above pay revision, the same would have accrued to

him only after his reinstatement depending on the fact whether the

period of suspension is treated as ‘on duty’ or not. So far as the

respondent is concerned, he was dismissed from service on

4.8.2005, therefore the question of the benefit of the revised pay and

the subsistence allowance thereon on the basis of Revised Pay

Rules did not accrue to him.

18.The Revised pay Rules, which came into force on 01.01.1996

in our view are in conformity with the FR 53 and the above-mentioned

Office Memorandum issued by the Government of India.

19.Rule 5 of Revised Pay Rules deals with drawal of pay in the

revised scales which reads as follows:-

“5. Drawal of pay in the revised scales.—

Save as otherwise provided in these rules, a

Government servant shall draw pay in the

revised scale applicable to the post to which he

is appointed:

Provided that a Government servant may elect

to continue to draw pay in the existing scale

until the date on which he earns his next or any

1

subsequent increment in the existing scale or

until he vacates his post or ceases to draw pay

in that scale.

xxxx xxxx xxxx

Rule 6 which deals exercise of option reads as follows:-

6. Exercise of Option.---- (1) The option under

the proviso to Rule 5 shall be exercised in

writing in the form appended to the Second

Schedule so as to reach the authority

mentioned in sub-rule (2) within three months of

the date of publication of these rules or where

an existing scale has been revised by any order

made subsequent to that date, within three

months of the date of such order.

Provided that.—

(i)in the case of a Government servant who

is, on the date of such publication or, as

the case may be, date of such order, out

of India on leave or deputation or foreign

service or active service, the said option

shall be exercised in writing so as to

reach the said authority within three

months of the date of his taking charge of

his post in India; and

(ii) where a Government servant is under

suspension on the 1

st

day of January,

1996, the option may be exercised within

three months of the date of his return to

his duty if that date is later than the date

prescribed in this sub-rule.

xxxx xxxx xxxxx

1

20.On a combined reading of Rules 5 and 6, it is clear that a

Government servant under suspension on the 1

st

day of January,

1996 is entitled to exercise his option within three months of the date

of his return to duty if that date is later than the date prescribed in the

sub rule and if the intimation is not received he is deemed to have

elected to be governed by the revised scale of pay with effect on and

from the 1

st

day of January, 1996 on his return to duty. Respondent

herein did not return to duty since he was dismissed from service and

hence there was no question either exercising the option or the

application of the deeming provision.

21.Rule 7 deals with the fixation of initial pay in the revised scale ,

which reads as follows:-

“7.Fixation of initial pay in the revised scale. – (1) The

initial pay of a Government servant who elects, or is

deemed to have elected under sub-rule (3) of the Rule 6

to be governed by the revised scale on and from the 1

st

day of January, 1996, shall, unless in any case the

President by special order otherwise directs, be fixed

separately in respect of his substantive pay in the

permanent post on which he holds a lien or would have

held a lien if it had not been suspended, and in respect of

his pay in the officiating post held by him, in the following

manner, namely:-

xxx xxx xxx

xxx xxx xxx

1

Note 3.Where a Government servant is on leave on

the 1

st

day of January, 1996, he shall become entitled to

pay in the revised scale of pay from the date he joins

duty. In case of Government servant under suspension,

he shall continue to draw subsistence allowance based

on existing scale of pay and his pay in the revised scale

of pay will be subject to final order on the pending

disciplinary proceedings.”

22.The word “Existing scale” has been defined under Rule 3 (2)

which reads as under:

“existing scale” in relation to a Government servant

means the present scale applicable to the post held

by the Government servant (or as the case may be,

personal scale applicable to him) as on the 1

st

day of

January, 1996 whether in a substantive or officiating

capacity.”

23.The word ‘Revised scale’ has been defined under Rule 3(5),

which reads as under:

“revised scale” in relation to any post specified in

column 2 of the First Schedule means the scale of

pay specified against that post in column 4, thereof

unless a different revised scale is notified separately

for that post;”.

24.Note 3 under Rule 7, therefore, indicates when a Government

servant was on leave on 1.1.1996, he would become entitled to pay

in the revised scale of pay from the date he joined the duty.

However, in the case of a Government servant under suspension, he

1

would continue to draw subsistence allowance based on the then

existing scale of pay and his pay in the revised scale of pay would be

subject to final order on the pending disciplinary proceedings.

25.The Revised Pay Rules were framed by the President of India

in exercise of the powers conferred by the proviso to Article 309 and

clause 5 of Article 148 of the Constitution. The proviso to Article 309

enables the President to make Rules to regulate the recruitment and

conditions of service of the persons mentioned therein. The Rules

framed by the President of India in exercise of the powers conferred

by the proviso to Article 309 have the force of law. Further, Note 3 to

Rule 7 of Revised Pay Rules, 1997 were not challenged.

26.On a combined reading of Note 3 to Rule 7 of the Revised Pay

Rules and FR 53(1)(ii)(a) with the clarification with Office

Memorandum dated 27

th

August, 1958 it is clear that if the revision of

pay takes effect from a date prior to the date of suspension of a

Government servant then he would be entitled to benefit of increment

in pay and in the subsistence allowance for the period of suspension,

but if the revision scale of pay takes effect from a date falling within

the period of suspension then the benefit of revision of pay and the

subsistence allowances will accrue to him, only after reinstatement

1

depending on the fact whether the period of suspension is treated as

duty or not. In view of the clear distinction drawn by the Rule making

authority between the cases in which the Revised scale of pay takes

effect from a date prior to the date of suspension and a date falling

within the period of suspension, the plea of discrimination raised

cannot be sustained especially when there is no challenge to the

Rules. The benefit of pay revision and the consequent revision of

subsistence allowance stand postponed till the conclusion of the

departmental proceedings, if the pay revision has come into effect

while the Government servant is under suspension. So far as the

present case is concerned, the Revised Pay Rules came into force

on 1

st

January, 1996 when the respondent was under suspension and

later he was dismissed from service on 04.08.2005 and hence the

benefit of pay revision or the revision of subsistence allowance did

not accrue to him. The Tribunal as well as the High Court have

committed an error in holding that the respondent is entitled to the

benefit of Revised Pay Rules. We, therefore, allow the appeal and

set aside those orders.

27.We are informed that the respondent herein has filed an appeal

against the order of conviction passed by the Criminal Court and the

1

same is pending consideration and if he is acquitted in appeal, the

disciplinary authority would take appropriate decision on the

respondent’s claim for revised pay scale and the subsistence

allowance in accordance with law.

…………………………….J.

(R.V. Raveendran)

…………………………….J.

(K.S. Radhakrishnan)

New Delhi;

February 01, 2010.

2