Special pay drawn for three years is includible in basic pay for MACP and pensionary benefits.

The applicant was appointed as a Refrigeration Engineer in 1986

Due to a significant increase in workload and responsibilities following reorganization in 2005, a Cadre Review Committee recommended upgrading his post, which was initially rejected

Following extensive litigation (including O.P.(CAT) No. 1275/2012 and O.A. No. 987/2014), the Tribunal declared the applicant entitled to "Special Pay" under FR 9(25)

Consequently, an order was issued on 09.01.2018 granting him special pay equivalent to two increments effective from 25.05.2005

The applicant retired in 2012

He subsequently sought to have this special pay absorbed into his basic pay for the purpose of pay fixation under the Modified Assured Career Progression (MACP) Scheme (granted on 01.09.2008) and for the calculation of pensionary benefits

The respondents rejected the claim via order dated 30.07.2019, asserting that under Rule 33 of the CCS (Pension) Rules and FR 9(21)(a)(i), special pay cannot be counted for pensionary benefits

1. Whether the special pay granted under FR 9(25) is liable to be absorbed into basic pay for the purposes of pay fixation under the MACP Scheme

2. Whether the special pay so absorbed should be considered for the calculation of pension and other retiral benefits

3. Whether the claim was barred by limitation or delay given the applicant's retirement in 2012

Fundamental Rule (FR) 9(25), which defines special pay as an addition to emoluments for arduous duties or specific additions to responsibility

Sl. No. 19 of the Government of India's orders under Appendix 8 (attached to FR 9(25)), which mandates that special pay granted for specific additions to duty shall be protected and absorbed into basic pay for the purposes of fixation on promotion (or MACP) if the official had drawn such special pay for three years or more

Rule 33 of the CCS (Pension) Rules, 1972 and FR 9(21)(a)(i), noting that while they generally exclude special pay from "emoluments," they do not override the specific provision for absorption into basic pay prior to retirement

The Tribunal found that the applicant had been drawing special pay (notionally/retroactively) from 25.05.2005

Since his 3rd MACP fixation occurred on 01.09.2008, he had completed the requisite three-year period stipulated under Sl. No. 19 of the GOI orders under Appendix 8

Therefore, the special pay should have been absorbed into his basic pay at the time of MACP fixation

The Tribunal reasoned that the respondents erred by applying Rule 33 of the CCS (Pension) Rules in isolation; if the pay is correctly fixed under MACP by absorbing the special pay, the resulting higher basic pay automatically becomes the "emolument" for pension calculation

Regarding delay, the Tribunal held the O.A. was not belated because the right to claim refixation only crystallised after the respondents passed the rejection order in 2019, following the retroactive grant of special pay in 2018

The respondents were directed to include the special pay for the purposes of pay fixation under MACP w.e.f. 01.09.2008, carry out consequential refixation until the date of retirement, and revise the applicant’s pension and retiral benefits accordingly

The Tribunal ordered the payment of arrears within four months, failing which interest at 6% per annum would apply