Full Judgment Text
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CASE NO.:
Appeal (civil) 3174 of 2006
PETITIONER:
K.S. Krishnaswamy etc.
RESPONDENT:
Union of India & Anr.
DATE OF JUDGMENT: 23/11/2006
BENCH:
H.K.SEMA & P.K.BALASUBRAMANYAN
JUDGMENT:
J U D G M E N T
With Civil Appeal Nos. 3173, 3188, 3189 and 3190 of 2006
H.K. SEMA, J.
Civil Appeal Nos. 3174 and 3173 of 2006 are preferred by
the pensioners against the judgment and order of the High
Court of Madras dated 29.4.2005 in Writ Petition Nos. 24444-
24451/2001, 14913/2002 and 32527/2004. Civil appeal Nos.
3188, 3189 and 3190 of 2006 are preferred by the Union of
India against the judgments and orders of the Delhi High
Court dated 17.8.2005, 5.9.2005, 10.11.2005 and 3.8.2005
passed in W.P. Nos. 17745/2004, 16975/2005, 6831/2004,
4597/2003 respectively.
We have heard Mr. P.A. Kulkarni, Mr. T. Harish Kumar,
Mr. C.S. Rajan, Mr. Sanjeev Kumar Chaudhary and Mr.
Prashant Bhushan, learned counsel appearing for different
appellants/respondents.
In all these appeals, the controversy relates to the scale
of pay recommended by the 5th Pay Commission and
corresponding acceptance of the Government by a Policy
decision dated 30.9.1997 and Executive Instructions dated
17.12.1998 clarified by Executive Instructions dated
11.5.2001.
We may briefly notice the scale of pay enjoyed by the
employees at the time of retirement and corresponding
increase in the 4th and the 5th Pay Commission.
Civil Appeal No. 3174 of 2006
The appellants were holding the post of Superintending
Engineers in All India Radio. They retired from service on
attaining the age of superannuation between 1982 to 1985.
Undisputedly, at the time of retirement, they were holding the
scale of pay of Rs. 1500-2000. In the 4th Pay Commission,
their scale was revised to Rs. 3700-5000. In the 5th Pay
Commission Report, which was accepted w.e.f. 1.1.1996, their
scale was correspondingly revised to 12000-16500.
The employees, who had rendered 13 years of service,
were granted special grade in the pay scale of Rs. 2000-2250.
This special scale of pay was confined to 20 senior
incumbents. In the 4th Pay Commission, their scale was
correspondingly revised to 4500-5700. In the 5th Pay
Commission, this scale was correspondingly revised to 14300-
18300 w.e.f. 1.1.1996. It is undisputed that the appellants
never enjoyed the special scale of Rs. 2000-2250. They
claimed the pensionary benefits on the basis of scale of Rs.
14300-18300, which was rejected by the High Court.
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Civil Appeal No. 3173 of 2006
The appellant retired on 30.9.1993 as Member
(Personnel) Postal Services Board in the pay scale of Rs. 7300-
8000. In the 5th Pay Commission, the scale was revised to Rs.
22400-26000 w.e.f. 1.1.1996. The Ministry of Finance, by a
Memorandum dated 30.6.1999, revised scale of certain high
posts upwards and revised the scale of three posts of Members
as 24050-26000. The appellant claimed that he is entitled to
the same upward revision of pay. His claim was contested by
the Union of India that upward revision of Office Memorandum
dated 30.6.1999 is only prospective in nature and, therefore,
the same is not applicable to the case of the appellant, as he
was a Member only upto 30.9.1993.
Civil Appeal No. 3188 of 2006
The respondents were the General Managers in the
Indian Railways, retired prior to 1.1.1996. They were holding
the pay scale of Rs. 7300-8000/- at the time of their
retirement. In the 5th Pay Commission, their scale was
correspondingly revised to Rs. 24050-26000. Their claim was
rejected by the Tribunal. However, the High Court upset the
order of the Tribunal and, hence, the present appeal by the
Union of India.
Civil Appeal No. 3189 of 2006
The respondent was Technical Adviser in the Department
of Women and Child Development, Ministry of Human
Resource Development. He retired on 30.11.1995 in the pay
scale of Rs. 3700-5000. In the 5th Pay Commission, the scale
was correspondingly revised to Rs. 12000-16500. The
respondent claimed the scale of Rs. 14300-18300. His claim
was rejected by the Central Administrative Tribunal. The
Tribunal’s order was, however, upset by the High Court by the
impugned order.
Civil Appeal No. 3190 of 2006
The respondent retired as Director in the Central
Secretariat Official Language Service on 30.6.1989 in the scale
of Rs. 3700-5000. In the 5th Pay Commission, the scale was
correspondingly revised to Rs. 12000-16500. The respondent
claimed the benefit of pay scale of Rs. 14300-18300, which
was rejected by the Tribunal. However, the order of the
Tribunal was upset by the High Court by the impugned order
and, hence, this appeal by the Union of India.
At this stage, we may recite briefly the genesis leading to
the present controversy. The recommendations of the 5th Pay
Commission were considered by the Union of India and on
30.9.1997 a Policy Resolution was notified. In the said
Notification the scope and extent of the application of the 5th
Pay Commission recommendations accepted by the
Government of India was mentioned. The Policy Resolution
was notified under the Executive Business Rules of the
Government. As is usual, the implementation and acceptance
of 5th Pay Commission Report was followed by a large number
of representations from pensioners which led to confusion and
litigations, culminated the Government of India to issue
Executive instructions in the Office Memorandum dated
17.12.1998 thereby clarifying the import and intent of the
applications of Policy Resolution notified on 30.9.1997. It may
be pertinent to mention here that the substance of the Policy
Resolution notified on 30.9.1997 which led to the present
controversy was in the following terms:
"Accepted with modification that 40% of the basic
pension shall be added while consolidating the
pension as on 1.1.1976 but the consolidated as on
1.1.1996 shall not be raised to 50% of the minimum
of the revised pay of the post held by the pensioner
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at the time of retirement."
The aforesaid Policy Resolution was further clarified by
Executive Instructions in the form of Office Memorandum
dated 17.12.1998, the substance of which reads as under:
"The President is now pleased to decide that w.e.f.
1.1.1996, pension of all pensioners irrespective of
their date of retirement shall not be less than 50%
of the minimum pay in the revised scale of pay
introduced w.e.f. 1.1.1996 of the post last held by
the pensioner."
(emphasis supplied)
As the controversy/confusion still persisted and for the
smooth and efficient implementation of the Policy Resolution,
the Government of India issued further Executive Instructions
by way of Office Memorandum dated 11.5.2001 clarifying the
Executive Instructions issued on 17.12.1998. The substance
of the Executive Instructions dated 11.5.2001 (by which the
pensioners are aggrieved and the core question in these
appeals) reads as under:
"In the course of implementation of the above order,
clarifications have been sought by Ministries/
Departments of the "post last held" by the pensioner
at the time of his/ her superannuation. The second
sentence of O.M. dated 17.12.1998, i.e. "pension of
all pensioners irrespective of their date of retirement
shall not be less than 50% of the minimum pay in
the revised scale of pay w.e.f. 1.1.1996 of the post
last held by the pensioner", shall mean that pension
of all pensioners irrespective of their date of
retirement shall not be less than 50% of the
minimum of the corresponding scale as on 1.1.96,
of the scale of pay held by the pensioner at the time
of superannuation/retirement."
(emphasis supplied)
The clarification brought out in the O.M. dated
17.12.1998 and O.M. dated 11.5.2001 is clearly discernible.
Whereas O.M. dated 17.12.1998 speaks of the minimum pay
in the revised scale of pay w.e.f. 1.1.1996 of the post last held
by the pensioner, the O.M. dated 11.5.2001 clarifies it as
minimum of the corresponding scale as on 1.1.1996 of the
scale of pay held by the pensioner at the time of
superannuation/ retirement. The clarification brought about
in the O.M. dated 11.5.2001 is of the last post held by the
pensioner as the last scale of pay held by the pensioner at the
time of superannuation/ retirement.
It is common knowledge that the corresponding increase
in any Pay Commission is of the scale of pay and not of the
post.
The grievances raised in the two sets of appeals are the
same. The basic question that arises for consideration is as to
whether the Executive Instructions in the form of O.M. dated
11.5.2001 over-ride the O.M. dated 17.12.1998 and are null
and void. In other words, as to whether the O.M. dated
11.5.2001 over-rides the earlier O.M. dated 17.12.1998
clarifying the Policy Resolution of the Government dated
30.9.1997.
The main thrust of the submissions of learned counsel
for the appellants is that the O.M. dated 11.5.2001 over-rides
the original O.M. dated 17.12.1998 and creates two classes of
pensioners. We are unable to accept this contention. As
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noticed above, the recommendations of the 5th Pay
Commission were accepted to the extent of Policy Resolution
dated 30.9.1997. The aforesaid Policy Resolution was further
clarified by issuing instructions in O.M. dated 17.12.1998,
which were clarified by another Executive Instructions in O.M.
dated 11.5.2001. It is well settled principle of law that
recommendations of the Pay Commission are subject to the
acceptance/ rejection with modifications of the appropriate
Government. It is also well settled principle of law that a
policy decision of the Government can be reviewed/ altered/
modified by Executive Instructions. It is in these
circumstances that a policy decision cannot be challenged on
the ground of estoppel. In the present case, the
recommendations of the 5th Pay Commission were accepted by
a Policy Resolution dated 30.9.1997 that the ceiling on the
amount of pension will be 50% of the highest pay in the
Government. The pension of all pre 1.1.96 retires including
pre-86 retires shall be consolidated as on 1.1.1996, but the
consolidated pension shall not be brought on to the level of
50% of the minimum of the revised pay of the post held by the
pensioner at the time of retirement. The subsequent O.M.
dated 17.12.1998 clarified the Policy Resolution dated
30.9.1997 by Executive Instructions in O.M. dated 17.12.1998
and further clarified in the form of O.M. dated 11.5.2001
clarifying the contents of Policy Resolution of the Government
dated 30.9.1997. They are both complementary to each other.
Both clarify the Government Policy Resolution dated
30.9.1997. The appellants are not aggrieved by the
Executive Instructions in O.M. 17.12.1998. In our view,
therefore, the contention of the appellant that the O.M. dated
11.5.2001 over-rides the original O.M. dated 17.12.1998,
thereby creates two classes of pensioners is absolutely ill-
founded and untenable.
It is common knowledge that an increase in the pay scale
in any recommendation of a pay commission is a
corresponding increase in the pay scale. In our view,
therefore, Executive Instructions dated 11.5.2001 have been
validly made keeping in view the recommendations of the Pay
Commission accepted by the Policy Resolution of the
Government on 30.9.1997, clarified by Executive Instructions
dated 17.12.1998. The Executive Instructions dated
11.5.2001 neither over-ride the Policy Resolution dated
30.9.1997 nor Executive Instructions dated 17.12.1998
clarifying the Policy Resolution dated 30.9.1997. The
Executive Instructions dated 11.5.2001 were in the form of
further clarifying the Executive Instructions dated 17.12.1998
and do not over-ride the same.
Counsel for the appellants heavily relied on the
Constitution Bench decision of this Court in D.S. Nakara v.
Union of India (1983) 1 SCC 305 where this Court at Page
345 SCC observed that "liberalised pension scheme becomes
operative to all pensioners governed by 1972 Rules irrespective
of the date of retirement."
Nakara’s case (supra) has been distinguished by this
Court in State of Punjab & Ors. v. Boota Singh & Anr.
(2000) 3 SCC 733; State of Punjab & Anr. v. J.L. Gupta &
Ors. (2000) 3 SCC 736; State of West Bengal and Anr. v.
W.B. Govt. Pensioners’ Association & Ors. (2002) 2 SCC
179; and State of Punjab & Ors. v. Amar Nath Goyal &
Ors. (2005) 6 SCC 754.
Nakara’s case (supra) was a case of revision of
pensionary benefits and classification of pensioners into two
groups by drawing a cut off line and granting the revised
pensionary benefits to employees retiring on or after the cut-
off date. The criterion made applicable was "being in service
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and retiring subsequent to the specified date". This Court
held that for being eligible for liberalised pension scheme,
application of such a criterion is violative of Article 14 of the
Constitution, as it was both arbitrary and discriminatory in
nature. It was further held that the employees who retired
prior to a specified date, and those who retired thereafter
formed one class of pensioners. The attempt to classify them
into separate classes/groups for the purpose of pensionary
benefits was not founded on any intelligible differentia, which
had a rational nexus with the object sought to be achieved.
The facts of Nakara’s case (supra) are not available in the
facts of the present case. In other words, the facts in Nakara’s
case are clearly distinguishable.
In Indian Ex-Services League v. Union of India (1991)
2 SCC 104, this Court distinguished the decision in Nakara’s
case (supra) and held that the ambit of that decision cannot be
enlarged to cover all claim by retirees or a demand for an
identical amount of pension to every retiree, irrespective of the
date of retirement even though the emoluments for the
purpose of computation of pension be different.
In K.L. Rathee v. Union of India (1997) 6 SCC 7, this
Court, after referring to various judgments of this Court, has
held that Nakara case cannot be interpreted to mean that
emoluments of persons who retired after a notified date
holding the same status, must be treated to be the same.
In our view, therefore, the ratio in Nakara’s case (supra)
is not applicable in the facts of the present case.
Lastly, it is contended that against the decision of the
Delhi High Court, an SLP was dismissed by this Court on
8.7.2004 and, therefore, the doctrine of merger applies. It is
not disputed that the SLP was dismissed in limine without a
speaking order. This question has been set at rest by a three-
Judge Bench of this Court in Kunhayammed & Ors. v. State
of Kerala & Anr. (2000) 6 SCC 359, where this Court after
referring to a two-Judge Bench, of this Court in V.M.
Salgaokar & Bros. (P) Ltd. v. CIT (2000) 5 SCC 373 held at
page 375 (para 22) SCC as under:
"22. We may refer to a recent decision, by a two-
Judge Bench, of this Court in V.M. Salgaokar &
Bros. (P) Ltd. v. CIT (2000) 5 SCC 373 holding that
when a special leave petition is dismissed, this
Court does not comment on the correctness or
otherwise of the order from which leave to appeal is
sought. What the Court means is that it does not
consider it to be a fit case for exercising its
jurisdiction under Article 136 of the Constitution.
That certainly could not be so when appeal is
dismissed though by a non-speaking order. Here
the doctrine of merger applies. In that case the
Supreme Court upholds the decision of the High
Court or of the Tribunal. This doctrine of merger
does not apply in the case of dismissal of a special
leave petition under Article 136. When appeal is
dismissed, order of the High Court is merged with
that of the Supreme Court. We find ourselves in
entire agreement with the law so stated. We are
clear in our mind that an order dismissing a special
leave petition, more so when it is by a non-speaking
order, does not result in merger of the order
impugned into the order of the Supreme Court."
Therefore, when the special leave petition is dismissed
by the Supreme Court under Article 136 of the Constitution,
the doctrine of merger is not attracted.
For the reasons aforestated, the view taken by the
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Madras High Court that the clarificatory Executive
Instructions in O.M. dated 11.5.2001 are an integral part of
the O.M. dated 17.12.1998 clarifying the Policy Resolution of
the Government dated 30.9.1997 and do not over-ride the
original O.M. dated 17.12.1998 is correct law and it is,
accordingly, affirmed. The view taken by the Delhi High Court
that O.M. dated 11.5.2001 over-rides the original O.M. dated
17.12.1998 and creates two classes of pensioners does not lay
down the correct law and is, hereby, set aside.
The net result is that the Civil Appeal Nos. 3174 and
3173 of 2006, preferred by the pensioners, are dismissed and
the Civil Appeal Nos. 3188, 3189 and 3190 of 2006, preferred
by the employer \026 Union of India, are allowed. The Judgment
and order of the Madras High Court dated 29.4.2005 is
affirmed. The Judgment and Orders of the Delhi High Court
dated 17.8.2005, 5.9.2005, 10.11.2005 and 3.8.2005 are set
aside.
Parties are asked to bear their own costs.