N.N. GODFRED . vs. UNION OF INDIA AND ORS.( FOR RESPONDENT NO. 2

  REPORTABLE   IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION   CIVIL APPEAL NO. 10035 OF 2010   N.N. GODFRED & OTHERS       APPELLANTS       VERSUS UNION OF INDIA & OTHERS           RESPONDENTS   J U D G M E N T     INDU MALHOTRA, J.   1. The present Civil Appeal has been filed under Section 30 of the Armed Forces Tribunal Act, 2007 to challenge the judgment and order dated February 25, 2010 passed by the Principal Signature Not Verified Bench of the Armed Forces Tribunal, New Delhi in Transfer Digitally signed by R NATARAJAN Date: 2018.07.11 16:21:48 IST Reason: Application No. 492 of 2010. 1 1.1 The three appellants had enrolled in the Indian Navy as Sailors, and subsequently joined the Submarine Arm. After being   promoted   through   the   ranks,   all   three   appellants superannuated from service on January 31, 1983. While Appellant No. 1 was holding the rank of Chief Petty Officer (ERA­II), Appellant Nos. 2 and 3 were holding the rank of Chief Engine Room Artificer in the Submarine Arm of the Indian Navy at the time of their superannuation. 1.2 Initially,   the   appellants   were   not   granted   pensionary benefits on account of the non­inclusion of their four­year training   period,   while   computing   their   qualifying   service. Aggrieved by the same, the appellants filed a Writ Petition before the Delhi High Court which was allowed in terms of the decision of this Court in   Anuj Kumar Dey   v.   Union of India  [(1997) 1 SCC 366]. 1.3 Pursuant   to   the   said   judgment,   the   appellants   started getting pensionary benefits. The pension of the appellants was   computed   on   the   basis   of   the   pay   of   a   Chief   Petty Officer.  1.4 On   February   8,   2005,   Appellant   No.   3   made   a 2 representation to the Bureau of Sailors­Respondent No. 3 for a clarification whether Submarine Pay of Rs. 300 per month, which was being granted to them after joining the Submarine Arm, was included for computing the pension payable.   It   was   submitted   that   Submarine   Pay   was   a component of their “pay”, and not an “allowance”. 1.5 On   March   29,   2005   Respondent   No.   3   rejected   the representation   stating   that   Submariners   and   Aviation Sailors were categorized under the group “Other than A”, which   is   lower   than   Group   A,   and   that   the   pensionary benefits granted were “in order”.  1.6 The three appellants being aggrieved by the refusal of the respondents   to   take   into   account   Submarine   Pay   while calculating   pension   payable   to   them   filed   separate   Writ Petition Nos. 19145­47 of 2006 before the Delhi High Court. 1.7 During the pendency of the Writ Petitions, the Armed Forces Tribunal Act, 2007 came into force. The Writ Petition Nos. 19145­47 of 2006 were transferred to the Principal Bench, Armed   Forces   Tribunal,   New   Delhi   and   renumbered   as Transfer Application No. 492 of 2010. 3 1.8 The   Armed   Forces   Tribunal   disposed   of   the   Transfer Application   No.   492   of   2010   by   a   cryptic   Order   dated February 25, 2010 wherein it was merely mentioned that submarine   pay/allowance   cannot   be   counted   for   the purpose of determining pension. 2. Aggrieved by the impugned order, the appellants preferred the present Civil Appeal. 2.1 The appellants have submitted that Submarine Pay would form part of their basic pay, and hence ought to be included for computation of Service Pension. This was for the reason that Sailors working in the Submarine Arm of the Indian Navy were   granted   Submarine   Pay   on   account   of   the   highly dangerous nature of the work undertaken, and the arduous conditions in which they had to function. 2.2 It was further submitted that Submarine Pay was included in the Last Pay Drawn Certificate dated August 10, 1983. In contrast, Sailors who were not working in the Submarine Arm,   were   not   being   granted   this   additional   pay.   The appellants gave the illustration of one M.V. Kumaran who was not working in the Submarine Arm. He was not being 4 granted Submarine Pay, on account of the difference in the nature of duties performed. 2.3 The appellants further submitted that since they belonged to the group “Other than Group A” they were entitled to higher rates of pay as specified in Appendix A, Clause 3 of the Navy Instructions No. 2/S/74 dated August 17, 1974. 2.4 Reliance   was   placed   on   two   decisions   of   this   Court   in BALCO Captive Power Plant Mazdoor Sangh and another  v. National Thermal Power Corporation and others   [(2007) 14 SCC   234]   and   Paradeep   Phosphates   Limited   v.   State   of Orissa & ors.  [Civil Appeal Nos. 3997­3998 of 2018 decided on   April   19,   2018   to   contend   that   conditions   of   service cannot be altered to the detriment of employees. 3. Per contra , the case of the Respondents is that the amount received under the head of Submarine Pay is an “allowance”, and hence cannot be included for the purposes of computing Service Pension. 3.1 It was contended the head of Submarine Pay was listed as an allowance under Appendix B of the Navy Instruction No. 2/S/74 dated August 17, 1974. 5 3.2 It   was   further   submitted   that   any   allowance,   including Submarine Pay, were not treated as reckonable emoluments for the purposes of computing Service Pension. 3.3 The respondents submitted that pursuant to the Fifth Pay Commission, Special Pays like Flying Pay, Submarine Pay, Technical Pay etc. were re­designated as allowances   vide GoI/MoD   Letter   4(1)/2001/D(Pay/Services)   dated   March 01, 2004. 4. The issue which arises for consideration is whether Submarine Pay was to be included for computing the Service Pension of the appellants, who retired on 31.1.1983 in the rank of Chief Petty Officer and Chief Engine Room Artificer. INDINGS F 5. Section I of Chapter III of the Navy (Pension) Regulations, 1964 provides   the   framework   for   grant   of   pensionary   benefits   to Sailors   in   the   Indian   Navy.   Sailors   who   have   served   for   a period of fifteen years i.e. the minimum qualifying service for pension, or more, are eligible for grant of Service Pension. 5.1 Service Pension is fixed on the basis of the rank and group held by a person as per Regulation 84 of the Navy (Pension) 6 Regulations, 1964 which has been reproduced hereunder: “ 84. Rank and group for assessment of service pension.­ The service pension shall be assessed on the basis of the rank   actually   held   by   an   individually   continuously whether in a substantive or paid acting capacity and the lowest group for which he was paid during the last ten months of his service qualifying for pension. ” 5.2 Regulation   86   of   the   Navy   (Pension)   Regulations,   1964 provides the rates of Service Pension. The relevant extract of Regulation 86 is reproduced hereunder: “ 86. Rate of service pension.­ The following are the rates of service pension:­           RATES OF SERVICE PENSION­SAILORS

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reveals   that   Chief   Petty   Officers   and   Artificer   Class   III belonging to the group “Other than Group A”, which has higher rates of  Service Pension as compared to those in “Group A”. 5.4 The concept of Submarine Pay was introduced by the Union of   India   vide   Letter   No.   PA/4102/NHO/504.S/D (PAY/SERVICES) dated May 31, 1967. It was granted to Officers   and   Sailors   who   were   qualified   to   serve   in submarines, and were deputed to go to sea from time to time.   Submarine   Pay   was   to   be   treated   as   “ pay   for   all 8 purposes ”, as per the instructions issued by the Ministry of Defence   to   the   Chief   of   Naval   Staff     Letter   No. vide PA/4102/NHO/504.S/D(PAY/SERVICES)   dated   May   31, 1967. 5.5 The pay scale and allowances of Officers and Sailors were revised with effect from January 1, 1973 pursuant to the Navy Instruction No. 2/S/74 dated August 17, 1974. Navy Instruction dated August 17, 1974 was issued to give   effect   to   the   recommendations   of   the   Third   Pay Commission, and remained in force till January 1, 1986. 5.6 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term “basic pay” to denote the pay “actually drawn” in the scale prescribed for the rank and group. Clause 2 provided that the revised rates of pay applicable to Sailors were specified in   Appendix   A.   As   per   Clause   3,   Artificer/Mechanician Sailors of the Submarine Arm were entitled to rates of pay specified under column titled “Group A” in Appendix A. The heads of Submarine Pay and Submarine Allowance were separately listed in Appendix B at S. Nos. 14 and 15, 9 respectively. The   relevant   extract   of   Appendix   B   is   extracted hereinbelow for ready reference:         “ ALLOWANCES ­REVISED RATES

As   per   Navy   Instruction   No.   2/S/74,   a   Chief   Petty Officer was entitled to Submarine Pay at the rate of Rs. 300/­   per   month,   which   was   distinct   from   Submarine Allowance. 5.7 Pursuant   to   the   recommendations   of   the   Fourth   Pay Commission the rates of pay and allowances of Officers and Sailors were revised by Special Navy Instruction No. 1/S/86 (with effect from January 1, 1986). Further revisions took place pursuant to the recommendations of the Fifth and Sixth Pay Commissions. The definition of “basic pay” was 10 changed to exclude Submarine Pay.  The reliance on these instructions by the counsel for the Respondents is misplaced, as the case of the appellants was governed by the instruction issued pursuant to the Third Pay Commission for computing the pensionary benefits i.e. Navy Instruction No. 2/S/74 dated August 17, 1974 and Letter   No.   PA/4102/NHO/504.S/D(PAY/SERVICES)   dated May 31, 1967 as they retired on January 1, 1983. 5.8 As per Letter No. PA/4102/NHO/504.S/D(PAY/SERVICES) dated May 31, 1967 Submarine Pay was to be treated as “ pay for all purposes ”, which would include computation of Service Pension. 5.9 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term “basic pay” to denote the pay actually drawn in the scale prescribed for the  rank and  group. The Last  Pay  Drawn Certificate of the appellants shows that Submarine Pay was actually being drawn as a separate head of “pay”. Navy Instruction No. 2/S/74 did not exclude Submarine Pay   from   the   computation   of   “pay”   for   the   purpose   of calculating Service Pension. 5.10 In contrast, it would be instructive to refer to the entries 11 with respect to Aviation Sailors. Note (ii) below Appendix B of Navy Instruction No. 2/S/74 specifically excluded Flying Pay   from   being   treated   as   “pay”   for   the   computation   of pension and gratuity. 5.11 Appendix   B   of   Navy   Instruction   No.   2/S/74   specifically mentions both Submarine Pay and  Submarine Allowance separately at S. Nos. 14 and 15, respectively. The terms Submarine   Pay   and   Submarine   Allowance   are   not   used interchangeably,   as   has   been   erroneously   done   in   the impugned Order. 5.12 The submission of the respondents that Submarine Pay was excluded from the ambit of basic pay as per Special Navy Instruction   No.   1/S/86,   Special   Navy   Instruction   No. 1/S/9W and Special Navy Instruction No. 1/S/08 cannot be accepted,   since   these   notifications   came   into   force subsequent to the date of superannuation of the appellants. These would therefore have no application to the cases of the present appellants, which were governed by the Navy Instruction   No.   2/S/74   dated   August   17,   1974   issued pursuant   to   the   recommendations   of   the   Third   Pay Commission. 12 6. In view of the aforesaid facts and legal position, Submarine Pay was includible in “pay”, for the purposes of computing the Service Pension of the appellants. As a result, the Civil Appeal is allowed, and the judgment and order dated February 25, 2010 passed by the Principal Bench,   Armed   Forces   Tribunal,   New   Delhi   in   Transfer Application No. 492 of 2010, is hereby set aside, with no order as to costs. ..........................J. (S. ABDUL NAZEER) ..........................J. (INDU MALHOTRA) New Delhi July 11, 2018. 13