Dr. K.C. Garg And Ors. vs Union Of India (Uoi) And Ors.
2002 Latest Caselaw 821 Del

JUDGMENT

S.B. Sinha, C.J.

1. These writ petitions involving similar questions of fact and law were taken up for hearing together and are being disposed of by this common judgment.

FACTS:

1.1 Petitioners herein are retired Doctors. They were working in the Central Health Service. While working in various posts in Central Health Service, they used to get Non-Practicing Allowance (NPA). Such NPA was being paid to compensate the Doctors for loss of private practice, loss of promotional avenues and late entry into service. NPA was used to be granted in certain percentage of basic pay drawn by the petitioners while they were in service.

1.2 It is not in dispute that NPA used to be revised from time to time and it was treated to be a part of the pay towards service benefits including retrial benefits.

1.3 By Office Memos dated 22.09.1987 and 02.11.1989, it had been laid down that the NPA would be taken into account for computing dearness allowance, entitlement of T.A./D.A. for sanctioning advances under G.F.R.s, House Building Advance and other allowances as well as for calculation of retrial benefits.

1.4 The Third Central Pay Commission had also observed that the NPA granted to the Doctors was in lieu of private practice, which was a traditionally enjoyed privilege as well as lesser effective service and promotion prospects caused by late entry into the service. NPA in terms of the said recommendations were continued to be counted towards all service and pensionary benefits.

1.5 It is not in dispute that the petitioners were getting NPA even after their retirement.

1.6 The Fifth Central Pay Commission (in short, '5th CPC') laid down that NPA be granted at a uniform rate of 25% of basic pay. In terms of the said recommendations, pension of even pre 01-01-1986 retirees and also or pre - 01-01-1996 retirees inclusive of retirees up to 31.12.1995 was sought to be revised.

1.7 So far as pre-01-01-1986 retirees are concerned, it was laid down that their pay may be updated by notional fixation as on 01.01.1986 by adopting the same formula as for the serving employees. The said exercise was done so as to bring all the past pensioners to a common platform. In other words, they were to be granted the benefit of Fourth Central Pay Commission, which came into force w.e.f. 01.01.1986.

1.8 It was further laid down that all the pensioners, who had been brought on Fourth Central Pay Commission pay-scales upon notional fixation of their pay and those who retired on or after 01.01.1986 could be treated alike with regard to consideration of their pension as on 01.01.1996 by allowing the same fitment weightage as may be allowed to the serving employees.

1.9 It was directed that the consolidated pension shall not be less than 50% of the minimum pay of the post, as revised by the 5th CPC, held by the pensioner at the time of retirement. Thus the pensioners of pre-01-01-1986 were brought the fact that the pension would first be revised on the basis of the scales revised from 01-01-1986 on the basis of recommendations of the Fourth Central Pay Commission.

1.10 Further, the pension would be determined on the same basis on which the pension was to be determined of post-01-01-1986 retirees, i.e., in other words, if the post-01-01-1986 were to get their pension by including NPA at a particular rate of pay as recommended by Fourth Central Pay Commission, on the same basis the pension of pre-01-01-1986 retirees would be determined, but the same basis was to include the revised rate of NPA.

1.11 The said recommendations further laid down that the pension of all pre-01-01-1996 retires was to be further determined by taking into account the scale of pay as revised by 5th CPC but this was limited to 50% of the minimum pay in the scale revised by the 5th CPC in regard to the post held by the petitioner at the time of retirement and the said pension was to be determined in the same way as an employee normally gets the minimum revised pay of the post he holds. The pension so determined was to be the pension as on 01.01.1996.

1.12 On or about 27.10.1997, the criteria for determining the pension only for limited purpose, i.e., for immediate/interim relief was laid down for consolidation of pension for all pre-01-01-1996 pensioners, as prior thereto, the recommendations of the 5th CPC had not been accepted.

1.13 The Government of India laid down the criteria of revision of pension of pre-01-01-1986 pensioners/family pensioners in order to bring them at par with post-01-01-1986 retirees on or about 10.02.1998.

1.14 The recommendations of the 5th CPC were accepted in parts, as different recommendations were accepted at different times.

1.15 By a letter dated 07.04.1998, it was directed that NPA would be granted on a uniform rate of 25% of basic pay subject to the condition that the pay + NPA would not exceed Rs. 29,500/- per month. In the said letter, it was stated:-

"In supersession of this Ministry's letter of even numbers dated the 20th March, 1998 on the above subject, I am directed to say that the President is pleased to decide that Central Health Service Officers may be paid Non Practicing Allowance @ 25% of the Basic Pay subject to the condition that Pay plus Non Practicing Allowance does not exceed Rs. 29,500/- p.m."

1.16 Furthermore, NPA was directed to be counted as 'Pay' for service benefits including retiral benefits an Office Memorandum dated 27.10.1997 which is as under:-

"OFFICE MEMORANDUM

Implementation of Government's decision on the recommendations of the Fifth Central Pay Commission -- Revision of pension of pre-1996 pensioners/family pensioners. Etc.

The undersigned is directed to say that in pursuance of Government's decision on the recommendations of Fifth Central Pay Commission, sanction of the President is hereby accorded to the regulation, with effect from 1.1.1996, pension/family pension of all the pre-1996 pensioners/family pensioners in the manner indicated in the succeeding paragraphs.

2.1 These orders to all pensioners/family pensioners who were drawing pension/family pension on 1.1.1996 under the Central civil Services (Pension) Rules, CCS ((Extraordinary Pension) Rules and the corresponding rules applicable to Railway pensioners and pensioners of All India Services including officers of the Indian Civil Service, retired from service on or after 1.1.1973.

2.2 Separate orders will be issued by the Ministry of defense in regard to Armed Forces pensioners/family pensioners.

2.3 These orders do not also apply to retired High Court and Supreme Court Judges and other Constitutional/Statutory Authorities where pension etc. is governed by separate rules/orders.

3.1 In these orders:

(a) 'Existing pensioner' or 'Existing family pensioners' means a pensioner who drawing/entitled to pension/family pension on 31.12.1995.

(b) 'Existing pension' means the basic pension inclusive of commutated portion, if any, due on 31.12.1995. It covers all classes of pension under the CCS (Pension) Rules, 1972 as also Disability Pension under the CCS (Extraordinary Pension) Rules and he corresponding rules applicable to Railway employees and Members of All India Service.

(c) 'Existing family pension' means the basic family pension drawn on 31.12.1995 under the CCS (Pension) Rules and the corresponding rules applicable to Railway employees and Members of All India Service.

(d) 'Existing Dearness Relief' means the relief due to pensioners/family pensioners up to average CPI 1510

4.1 The pension family pension of existing pre-1996 pensioners/family pensioners will be consolidated with effect from 1.1.1996 by adding together:

(i) The existing pension family pension.

(ii) Dearness Relief up to CPI 1510 i.e. @ 148%, 11% and 96% of Basic Pension as admissible vide this Department's O.M. No. 42/8/96-P&PW(G) dated 20.3.1996.

(iii) Interim Relief I.

(iv) Interim Relief II.

(v) Fitment weightage @ 40% of the existing pension family pension.

The amount so arrived at will be regarded as consolidated pension/family with effect from 1.1.1996. The upper ceiling on pension/family pension laid down in the Department of Pension and Pensioners' Welfare Office Memorandum No. 2/1/87-PIC.11 dated 14.4.1987 has been increased from Rs. 4500/- and Rs. 1250/- to 50% and 30% respectively of the highest pay in the Government (The highest pay in the Government is Rs. 30,000 since 1.1.1996). Since the consolidated pension will be inclusive of commuted portion of pension, if any, the commuted portion will be deducted from the said amount while making monthly disbursement.

4.2. Some of the existing pensioners who retired between 31.3.1985 and 31.12.1985 are in receipt of personal pension. The said personal pension will continue to be granted as a separate element and will not be merged into the pension as consolidated above.

4.3. Since the consolidated pension family pension arrived at as per paragraph 4.1 includes dearness relief up to average index level 1510, dearness relief will be admissible thereon only beyond index average 1510 in accordance with the revised scheme of dearness relief for which orders are being issued separately. The two Installments of dearness relief sanctioned earlier from 1.7.1996 and 1.1.1997 in this Department's Office Memorandum No. 42(8)/P&PW(G)96 dated the 12th September, 1996 and Office Memorandum No. 42(2)P&PW(G)/97 dated the 3rd April, 1997 respectively shall be adjusted against revised Dearness Relief becoming due on the consolidated pension/family pension.

4.4. The amount already paid on account of Interim Relief III sanctioned vide this Department's office Memorandum No. 42/18/95-P&PW(G)-Vol. II dated 6.9.1996 will be recovered from the arrears becoming due on consolidated pension/family pension as in para 4.1, above and sanction of Dearness Relief on consolidated pension/family pension.

5.1. Where the consolidated pension/family pension in terms of paragraph 4 above works out to an amount less than Rs. 1275/- the same shall be stepped up to Rs. 1275/-. This will be regarded as pension/family pension with effect from 1.1.1996. In the case of pensioners who are in respect of more than one pension, the floor ceiling of Rs. 1275/- will apply to the total of all pensions taken together.

5.2. Where the disability pension under the CCS(EOP) Rules, is drawn in addition to invalid pension under the CCS(Pension) Rules, 1972, the minimum limit of Rs. 1275/- will apply to total of two pensions as indicated in paragraphs 5.1. Where the disability pension is drawn in isolation, the minimum limit of Rs. 1275/- will apply for 100% disability. For lesser degree of disability the minimum limit will be proportionately less.

6. The employed/re-employed pensioners/family pensioners are not getting dearness relief on pension at present under the executant orders. In their case the notional dearness relief which would have been admissible to them but for their employment/re-employment will be taken into account for consolidation of their pension in terms of paragraph 4.1 above as if they were drawing the dearness relief. Their pay will be re-fixed w.e.f. 1.1.1996 with reference to consolidated pension becoming admissible to them. Dearness relief beyond 1.1.1996 will however, not be admissible to them during the period of employment/re-employment.

7. The cases of Central Government employees who have been permanently absorbed in public sector undertakings/autonomous bodies will be regulated as follows:

(a) PENSION

Where the Government servants on permanent absorption in public sector undertakings/autonomous bodies continue to draw pension separately from the Government, the pension of such absorbees will be updated in terms of these orders. In case where the Government servants have drawn on time lumpsum terminal benefits equal to 100% of their pensions and have become entitled to the restoration of one-third commuted portion of pension as per Supreme Court judgment dated 15.12.1995, their cases will not be covered by these orders.

(b) FAMILY PENSION

In cases where, on permanent absorption in public sector undertakings/autonomous bodies, the terms of absorption permit grant of family pension under the CCS (Pension) Rules, 1972 or the corresponding rules applicable to Railway/employees/members of All India Services, the family pension being drawn by family pensioners will be updated in accordance with these orders.

7. All pension Disbursing Authorities including Public-Sector.

8. Banks handling disbursement of pension to the Central Government pensioners are hereby authorized to pay pension/family pension to existing pensioners/family pensioners at the consolidated rate without any further authorization from the concerned Accounts Officers/Head Office etc. A table indicating the existing pension, the consolidated pension and difference payable form 1.1.1996 is enclosed for ready reference (Annexure I). This table may be used where the pensioners is the receipt of a single pension only. Where a pensioner is in respect of more than one pension, consolidation may be done separately in terms of paragraph 4.1 and as indicated in paragraph 5 floor ceiling of Rs. 1275/- may be applied to total pension from the sources taken together. A suitable entry regarding the revised consolidated pension shall be recovered by the pension Disbursing Authorities in both halves of the Pension Payment Order. An intimation regarding disbursement of revised pension may be sent by the pension disbursing authorities to the Office of CPAO and Accounts Officer which had issued the PPO in the form given a Annexure-II so that he later can update the Pension Payment Order Register maintained by him. An acknowledgement shall be obtained by the Pension Disbursing Authorities from Office of CPAO and the respective Accounts Officers in this behalf.

9.1 The consolidated pension/family pension is worked out in accordance with provisions of Para 4.1 above shall be treated as "Basic Pension" with effect from 1.1.1996 and shall qualify for grant of Dearness Relief sanctioned thereafter in respect of following categories of pensioners/family pensioners.

(i) Pensioners, who retired between the period from 1.1.1996 to 31.12.1995.

(ii) Family pensioners, who became entitled for family pension during the period from 1.1.1986 to 31.12.1995 and were sanctioned family pension @ 30% of the last pay drawn by the deceased employed.

9.2 In case of other pensioners family pensioners, these orders provide for revision consolidation of pension with effect from 1.1.1996 as an interim measuring only so as to provide their immediate relief and shall be subject to various. Detailed instructions regarding fixation of their pay on notional basis revision consolidation of pension family pension and issue of authorization in this regard will be issued separately. Pending issue of detailed instructions as stated above, grant of pension/family pension to all these pensioners family pensioners may be continued to be regulated under these orders.

10. The arrears on account of consolidation of pension would be paid in case with the stipulation that where amount of arrears is less than Rs. 5,000/- it should be paid in one installment and where it is in excess of Rs. 5,000/- it should be paid in two Installments; in the first installment, payment should be restricted to Rs. 5,000/- plus fifty percent of their balance amount of arrears.

11. It is considered desirable that the benefit of these orders should reach the pensioners as expeditiously as possible. To achieve this object it is desired that all pension disbursing Authorities should ensure that the revised pension and the first installment of arrears due to the pensioners in terms of the above orders is paid to the pensioners or credited to their account by 30th November, 1997 or before positively. Instructions regarding release of second installment of arrears will be issued later.

12. In their application to the persons belongs to Indian Audit and Accounts Department these orders issue in consultation with Controller and Auditor General of India.

13. Ministry of Agriculture, etc. are requested to bring the contents of these Orders to the notice of Controller of Accounts and Accounts Officers and Attached and subordinate Officers under them on a top priority basis. All pension disbursing officers are also advised to prominently display these orders on their notice boards to the benefit of pensioners.

Sd/-

(S. LAKSHMINARAYANAN)

Additional Secretary (Pension)"

1.17 In earlier Office Memorandum dated 10.02.1998, it was stated"-

"OFFICE MEMORANDUM

Subject: Implementation of Government's decision on the recommendations of the Fifth Central Pay Commission -- Revision of pension of pre-1986 pensioner/family pensioners etc.

The undersigned is directed to say that in pursuance of Government's decision on the recommendations of Fifth Central Pay Commission announced in this Department's Resolution No. 45/86/97-P&PW(A) dated 30.9.97-P&PW(A)-Part II dated 27.10.1997, the president is now pleased to decide that the pension/family pension of all pre-1986 pensioners/family pensioners who were in receipt of the following types of pension as on 1.1.1996 under Liberalised Pension Rules, 1950, CCS(Pension) Rules, 1972 as amended from time to time or the corresponding rules applicable to Railway pensioners and pensioners of All India Services may be revised w.e.f. 1.1.1996 in the manner indicated in the succeeding paragraphs:

(i) Retiring Pension.

(ii) Superannuation Pension

(iii) Compensation Pension

(iv) Invalid Pension.

2. In accordance with the provisions contained in CCS (Pension) Rules, 1972 and the Government's order issued there under, at present pension of all pre-1986 pensioners is based on the average emoluments drawn by them during last completed 10 months immediately preceding the date of retirement and similarly family pension is based on the last pay drawn by the deceased Government servant/pensioner Government has, inter alia accepted the recommendation of Fifth Central Pay Commission to the effect that the pension of all the pre-1986 retirees may be updated by notional fixation of their pay as on 1.1.1986 by adopting the same formula as for the serving employees and thereafter for the purpose of consolidation of their pension/family pension as on 1.1.1986, they may be treated alike those who have retired on or after 1.1.1986.

(Emphasis supplied)

1.18 As regards grant of NPA in another Office Memorandum dated 07.04.1998, it was clarified as under:-

"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 Service 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 service benefits including retirement benefits as hitherto.

3. This issue with the approval of Ministry of Finance (Department of Expenditure) U.O. No. 7(25)E-III A-97 dated 7.4.1998.

Yours faithfully,

Sd/-

(H.N. YADAV)

UNDER SECRETARY TO THIS GOVERNMENT OF INDIA"

1.19 On or about 17.12.1998, the Government of India issued a circular dated 17.12.1998, the relevant portion of which is in the following term:-

"...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. However, the existing provisions in the rules governing qualifying service and minimum pension shall continue to be operative. Similarly w.e.f. 1.1.1996 family pension shall not be less than 30% of the minimum pay in the revised scale introduced w.e.f. 1.1.1996 of the post last held by the pensioner/deceased Government servant. Accordingly, so far as persons governed by CCS (Pension) Rules, 1972 are concerned, orders contained in the following Office Memoranda of this Department as amended from time to time shall be treated as modified as indicated below:

A. 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 up to 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 case shall be less 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 CCS (Pension) Rules 1972) applicable to the pensioner as on the date of his/her superannuation/retirement and in no case it will be less than Rs. 1275/- p.m."

B. O.M. No. 45/86/97-P&PW(A) Pt.II dated October, 27, 1997

3. The following may be inserted after the first sentence, "The amount so arrived at shall be ..... with effect from 1.1.1996," in the sub-para of paragraph 4.1:

"However, in cases where the pension consolidated in treated as the final full pension, it shall not be less 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 pensioner at the time of his retirement. 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 CCS (Pension) Rules 1972) applicable to the pensioner as on the date of his/her superannuation/retirement and in no case it will be less than Rs. 1275/- p.m. Similarly, in cases where the family pension so consolidated is treated a final, it shall not be less than 30 per cent of the minimum of the revised scale of pay introduced with effect from 1st January 1996 for the post last held by the concerned pensioner/deceased government servant."

C. O.M. No. 45/86/97-Pt.III dated February 10, 1998

4. (a) The last sentence of paragraph 2 may be substituted by the following:

"The pension so calculated shall be consolidated as on 1st January 1996 in accordance with the provisions contained in paragraph 4.1 of this Department's O.M. No. 45/86/97-P&PW(A) -- Pt. II dated 27th October, 1997. Such consolidated full pension shall not, however, be less than 50 per cent of the minimum of the revised scale of pay introduced with effect from 1st January 1996 for the post last held by the concerned pensioner. 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 CCS (Pension) Rules 1972) applicable to the pensioner as on the date of his/her superannuation/retirement and in no case it will be less than Rs. 1275/- p.m."

This pension shall be treated as the basic pension for the purpose of future grant of Dearness Relief on pension.

(b) The second sentence of paragraph 3 may be substituted by the following:

"This pension shall be consolidated as on 1st January 1996 in accordance with the provisions contained in paragraph 4.1 of this Department's O.M. No. 45/86/97-P&PW(A) - Pt.II dated 27th October 1997. Such consolidated family pension shall not, however, be less than 30 per cent of the minimum of the revised scale of pay introduced with effect from 1st January 1996 for the post last held by the concerned pensioner/deceased government servant."

(c) The following clause may be inserted after the fifth sentence in paragraph 4:

"The basic family pension so calculated shall not be less than 30 per cent of the minimum of the revised scale of pay introduced with effect from 1st January 1996 for the post last held by the concerned pensioner/deceased government servant....."

1.20 On 19.03.1999, another Office Memo was issued, which reads thus:-

"No. 45/86/97-P&PW(A) - Part - III

Government of India

Ministry of Personnel, Public Grievances & Pensions

Department of Pension & Pensioners Welfare

Third Floor, Lok Nayak Bhawan,

Khan Market, New Delhi - 110003.

Dated: 19th March, 1999.

OFFICE MEMORANDUM

Subject: Implementation of Government's decision on the recommendations of the Fifth Central Pay Commission-Revision of pension of pre-1986 pensioners/family pensioners - Clarification regarding.

The undersigned is directed to refer to this Department's Office Memorandum of even No. Dated 10th February, 1998 as amended from time to time and to say that a number of reference are being received in this Department for seeking clarification in regard to emoluments to be taken into account for fixation of pay on notional basis on 1.1.1986 in the case of pre-1986 retirees as also for the purpose of revision of their pension based on this notional pay. The matter has been considered in consultation with the Ministry of Finance, Department of Expenditure of Expenditure, who had promulgated Central Civil Services (Revised Pay) Rules, 1986. The position in regard to the various points raised is indicated as follows:-

Name of post

No. of posts

Classification

Scale ofpay

Whether selection or non-

selection post-

Age, limit for direct recruits.

Whether benefit of added years of service admissible under Rule 30 of the Central        Civil Services (Pension)  Rules, 1972.

Educational and other qualifications required for direct recruits.

1.

2.

4.

5.

6.

6(a).

Dy. Suptd. of Police

157* (1987)

General Central Service Group 'B' gazetted, non-ministerial

Rs.

650-30-40-35-810-EB-35-

880-40-1000-EB-40-1200 (pre-Revised)

Selection

The age limit shall be such as may be provided by the Govt. from time to time in the Rules Civil Services Examination.

No.

The educational qualifications, plan of exam., etc. shall be such as may be provided by the Government from time to time in the Rules of Civil Services Examination.

fixing notional pay as on 1.1.1986.

2.

Whether stagnation/increments are admissible in addition to notional pay fixed as on 1.1.1986.

No stagnation increment will be admissible over and above the pay fixed on notional basis as on 1.1.1986.

3.

Whether special pay, Deputation Allowance, Personal Pay, Desk Allowance etc. which have not been treated as emoluments for the purpose of fixation of notional pay under Central Civil Services (Revised Pay) Rules, 1986 should continue to be treated as emoluments for the purpose of computation of revised pension on the basis of pay fixed on notional basis.

Under Rule 33 of Central Civil Services (Pension) Rules, 1972 w.e.f. 1.1.1986 the expression 'Emoluments' means basic pay as defined in Rule 9(21)(a)(i) of the Fundamental Rules which a Government servant was receiving immediately before his retirement or on the date of his death and also includes non-practicing allowance granted to Medical Officers in lieu of private practice. FR 9(21)(a)(i) reads as follows:-

'Pay' means the amount drawn monthly by a Government servant as

(i) the pay, other than special pay or pay granted in view of his personal qualifications, which has been sanctioned for a post held by him substantively or in an officiating capacity, or in which he is entitled by reason of his position in a cadre.

2. It is impressed upon all the Ministries/Departments of the government of India to keep in view the above clarifications while disposing of the cases of revision of pension/family pension of pre-1986 pensioners/family pensioners. They are also advised to dispose the representations received by them from pensioners on the above issues without referring these to this Department."

1.21 However on or about 29.10.1999, the Government of India came out with a decision that NPA should not be taken into consideration after re-fixation of the pay on notional basis on 01.01.1986 and the same was directed not to be added to the minimum of the revised scale of pay as on 01.01.1996 in case where consolidated pension/family pension is to be stepped up to 50% and 30% respectively in terms of the aforementioned office memo dated 17.12.1998.

2.0 The representations filed thereagainst, however, having not been replied, the petitioners approached the Central Administrative Tribunal (hereinafter referred to as 'the Tribunal') claiming inter alia the following reliefs.

"(i) Quashing the impugned Office Memo. dated 29th October, 1999:

(ii) also quashing the pension slips issued to some of the applicants at reduced rates:

(iii) declaring the applicants entitled to get the pension at the rates made applicable to them on the basis of recommendations of Fifth Central Pay Commission and accepted by the Central Government and consequently no recovery of any alleged excess amount is liable to be made;

(iv) declaring that the applicants are entitled to have their pension determined as was already done on 1st January, 1996, inter alia, on the basis of pay in the scale revised by the Fifth Central Pay Commission and also by taking into account N.P.A. as per the rates revised by the Fifth Central Pay Commission with all consequential benefits;

(v) directing the respondents not to proceed to implement the impugned Office Memo. dated 29th October, 1999 against the applicants and treat their case like the post-1996 retirees so as to have maintained modified parity between pre-1st January, 1996 retirees and post-1st Jan., 1996 retirees as propounded by the Fifth Central Pay Commission".

By way of interim relief, the petitioners prayed for as under:-

"Pending final disposal of the Original Application of the applicants, it is most respectfully prayed that this Hon'ble Tribunal may graciously be pleased to stay the operation of the impugned Office Memo. dated 29th October, 1999 and, in the meantime, restraining the respondents from paying pension on reduced rates and stay the operation of the pension slips proposing to pay the pension at reduced rates, the implementation of the said pension slips has not taken place as the recoveries on the basis of the said reduced rates of pension is likely to take effect from the pension of the month of May, 2000 payable on 1st June, 2000 and, in the meantime, grant an ex-parte ad-interim injunction order to the same effect and pass such other an further order or orders as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case."

2.1 By reason of the impugned judgment dated 05.10.2001, the learned Tribunal dismissed the applications. Hence these writ petitions.

3.0 The leaned counsels appearing on behalf of the petitioners would submit that the learned Tribunal went wrong in passing the impugned judgment insofar as it wrongly held that in computing the pension, NPA was being calculated twice over.

3.1 It was submitted that the purported classification as contained in the office memo dated 29-10-1999, the Central Government not only failed to take into consideration the laudable object of the recommendations of the 5th CPC, which was revolutionary in nature but also misconstrued and misinterpreted various clauses thereof.

3.2 It was argued that a confusion was sought to be created in the impugned letter insofar as the expression 'pay scale' has been used in stead and place of 'pay'.

3.3 The learned counsel would contend that the learned Tribunal failed to consider the object and purport of the recommendations of the 5th CPC, which were to bring the pre-1986 and post-1996 retirees at par.

3.4 The learned counsel would urge that keeping in view the fact that pay is required to be revised in terms of the recommendations of the 5th CPC and the NPA being an integral part thereof, pensionary benefits must also be calculated for the said purpose.

4. The learned counsel appearing on behalf of the respondents, on the other hand, would submit that the recommendations of the 5th CPC must be given a prospective effect and so done, such benefit could not be extended to the pre-1986 retirees. It was submitted that pension is fixed at the time of superannuation. As at that time the computation of N.P.A. formed a basic part of emoluments for the purpose of fixation of pension, the same cannot be taken into consideration for calculation of revised pension.

4.1 The learned counsel would submit that the 5th CPC never intended that the doctor-pensioners should be conferred a benefit which the other pensioners would not derive in as much as in terms of the C.C.S. Pension Rules, all the pensioners, irrespective of the posts they held at the time of their superannuation, must be held to be forming the same class.

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 specially classed as pay by the President."

5.1 The instructions of the Government of India, the Ministry of Health and Family Welfare dated 02.09.1987 and 02.11.1989 must be considered not only in the light of the aforementioned Fundamental Rules, but also observations of the 5th CPC as contained in para 52.1.6.

"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 of Rs. 1000 at the highest. It has been represented 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 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 favor of permitting private practice in any form at this stage."

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 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 consolidation pension would not be less than 50% of the minimum pay of the post as revised by the 5th CPC.

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.

6.1 The intention of the Central Government in this behalf is evident from the Office Memorandum dated 10.02.1998 wherein inter alia it was laid down thus:--

"Firstly, the pay of pre-1st January, 1986 retirees will be re-determined on the basis of the scales revised with effect from 1st January, 1986 and then their pension will be re-determined on the basis of the same formula on which the pension was to be determined of post-1st January, 1986 retirees."

It was evidently done so as to bring a complete parity between pre-01-01-1986 retirees and post-01-01-1986 retirees.

6.2 In terms of paras 137.15, 137.19 and 137.20 of its Report, the 5th CPC ultimately recommended that the pension of pre-01-01-1986 retirees as well as post-01-01-1986 retirees should not get pension less than 50% of the minimum pay in the revised pay-scales of the pensioners concerned at the time of retirement. This was accepted by the Central Government without any demur whatsoever. It, thus, does not lie in its mouth to say to the contrary.

6.3 Be it recorded that in terms of the aforesaid recommendation, pension was not to be less than 50% of the minimum pay in the revised pay-scales of the 5th CPC on the one hand and on the other, the same was to be re-determined on the same formula, which factum was taken into consideration for determination of pre-01-01-1986 retirees. It was evidently done not only to bring parity but also to remove discrimination in the matter of payment of pension of pre-01-01-1986 retirees and post-01-01-1986 retirees.

6.4 The Office Memorandum dated 17.12.1998, however, was issued basically for the purpose grant of interim relief. In the light of the aforementioned, the Office Memorandum dated 29.10.1999, which was impugned before the learned Tribunal, must be viewed.

7.0 It is in dispute that by reason of the aforesaid Office Memorandum, the benefit granted to the retirees was sought to be taken back, but prior thereto the principles of natural justice had not been complied with. The principles of natural justice, in our opinion, even it would be assumed that a mistake had been committed, should have been complied with.

7.1 In Bhagwan Shukla v. Union of India and Ors., , the law has been laid down in the following terms:-

"3. .....He was not even put on notice before his pay was reduced by the department and the order came to be made behind his back without following any procedure known to law. There, has, thus, been a flagrant violation of the principles of natural justice and the appellant has been made to suffer huge financial loss without being heard. Fair play in action warrants that no such order, which has the effect of an employee suffering civil consequences, should be passed without putting the concerned to notice and giving him a hearing in the matter."

7.2 Yet again in Sayeedur Rehman v. The State of Bihar and Ors., 1973 (1) SLR 761, it was stated:-

"7. .....This unwritten right of hearing is fundamental to a just decision by any authority which decides a controversial issue affecting the rights of the rival contestants. This right has its roots in the notion of fair procedure. It draws the attention of the party concerned to the imperative necessity of not overlooking the other side of the case before coming to its decision, for nothing is more likely to conduce to just and right decision than the practice of giving hearing to the affected parties......"

8.0 The learned counsel for the respondents, in our opinion, is not correct in his contention that despite the provisions in the Fundamental Rules, N.P.A. should not be treated as part of pay.

8.1 The learned counsel for the respondents, in our opinion, is also not correct in his contention that by reason of grant of such N.P.A., the retirees would be getting double benefit. Having regard to the fact that N.P.A., which they had been getting merged in the scale of pay and the pension in terms of the recommendations of the 5th CPC was to be paid with perspective effect, the question of their getting double benefit of N.P.A. does not arise.

9.0 The Central Government in issuing the impugned Office Memorandum also overlooked the Office Memorandum dated 10.02.1998 wherein it was clearly stated that the same had been issued to implement the recommendations of the 5th CPC, which was accepted by the Government of India in terms of its resolution dated 30.09.1997. It was stated therein:-

"..... The notional pay so arrived as on 01.01.1986 shall be treated as average emoluments for the purpose of calculation of pension and accordingly the pension shall be calculated as on 01.01.1986 as per the pension formula then prescribed."

9.1 It is, therefore, evident that by reason thereof upon re-fixation of pay of pre-01-01-1986 retirees as per the revised pay-scale from 01.01.1996 is to be determined and consequently pensions have to be re-determined on the same formula as was in existence on post-01-01-1986 retirees. Such a re-fixation of pay was merely a step for re-determination of pension having regard to the formula applied therefore as was in operation after 01.01.1986, which included the element of N.P.A. as the revised rates from 01.01.1986.

10.0 At this juncture, we may notice that the bold stand taken by the respondent that a pensioner is a pensioner and no discrimination can be made between a Doctor pensioner and Engineer pensioner. The submission of the learned counsel cannot be accepted for more than one reason. The amount of pension to be determined as a retiral benefit depends upon various factors. It is one thing to say that the Central Government has adopted a decision to the effect that all retirees would be treated alike with reference to the economic condition of the State vis-a-vis the buying capacity of the pensioners, but it is another thing to say that all categories of the employees were not to be paid pension at different rates.

10.1 The learned counsel for the Central Government, on a querry made by this Court, very fairly stated that N.P.A. shall be taken to be a part of pay for post-01-01-1996 retirees. If N.P.A. is to be taken to be a part of pay for re-determining the benefit for Class I employees, we fail to see any reason as to why the said element despite recommendations of the 5th CPC and acceptance thereof by the Central Government has to be excluded for pre-01-01-1986 retirees. The Central Government, therefore, are prevaricating their stand from case to case.

10.2 For determining of the said question what is necessary is to find out the principle and object underlying such recommendations. Once it is found that the underlying principle and object of the said recommendations was to bring pre-01-01-1986 retirees and post-01-01-1986 retirees at par as well as on a common platform, the rule is required to be interpreted in that context.

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-of 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.

10.5 In Joint Action Council of Service Doctors' Organisations and Ors. v. Union of India and Anr., , the law has been laid down in the following terms:-

"14. .....It is, of course, correct that what Pay Commission would say would be recommendatory in nature, as distinguished from the decision of this Court; but, as is known, recommendations of a high-powered committee like Pay Commission are not rejected without cogent reasons......"

11.0 It is no longer res-integra that the pension is not a bounty. The amount of pension payable to a retired employee depends upon the policy decision of the State, but while laying down such policy decision, discrimination cannot be made. If N.P.A. is to be regarded as a part of pay for one set of employees, the same has to be done for the other set of employees also.

11.1 We may, in this connection, notice that emoluments has been defined in Rule 33 of CCS (Pension) Rules, 1972 in the following terms:-

"The expression 'emoluments' means basic pay as defined in Rule 9(21)(a)(1) 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 practicing Allowance granted to the Medical Office 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 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 then 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 bricket, 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 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.

The Apex Court held:-

"22. If the person retiring is eligible for pension at the time of his retirement and if he survives till the time of subsequent amendment of the relevant pension scheme, he would become eligible to get enhanced pension or would become eligible to get more pension as per the new formula of computation of pension subsequently brought into force, he would be entitled to get the benefit of the amended pension provision from the date of such order as he would be a member of the very same class of pensioners when the additional benefit is being conferred on all of them. In such a situation, the additional benefit available to the same class of pensioners cannot be denied to him on the ground that he had retired prior to the date on which the aforesaid additional benefit was conferred on all the members of the same class of pensioners who had survived by the time the scheme granting additional benefit to these pensioners came into force. The line of decisions tracing their roots to the ratio of Nakara case would cover this category of cases."

However in that decision, it has also been held that if an employee at the time of his retirement is not eligible to earn pension and stands outside the class of pensioners, if subsequently by amendment of the relevant pension rules any beneficial umbrella, of pension scheme is extended to cover a new class of pensioners and when such a subsequent scheme comes into force, the erstwhile non-pensioner might have survived, then only if such extension of pension scheme to erstwhile non-pensioners is expressly made retrospective by the authorities promulgating such scheme.

11.4 In Union of India v. Dr. Vijayapurapu Subbayamma, , the Apex Court upon consideration of its earlier decision laid down the conspectus of legal position in the following terms:-

"The conspectus of legal position that emerges are these:-

(a) Where an employee under the terms and conditions of service or under the relevant Rules relating to pension is not eligible to earn pension n his or her retirement, any amendment to the Rules covering a new class of pensioners would not confer pensionary benefits to the employee who has retired prior to coming into force of such amendment of Rules.

(b) However, the position would be different if such an amendment in the relevant pension Rules is with retrospective effect as to cover a new class of employees including those employees who, at the relevant time, were not entitled to earn pension under the then existing Rules or conditions of service.

(c) Where an employee at the time of retirement is entitled to pension under the relevant Rules, any subsequent amendment to the relevant Rules enhancing pension or conferring additional benefit would be also applicable to him."

The present case falls within the category mentioned at (b) & (c) aforesaid.

12. For the reasons aforementioned, the impugned order cannot be sustained, which is set aside accordingly. These writ petitions are allowed. However, in the facts and circumstances of the case, there shall be no orders as to cost.