Delhi High Court

M.R.Tundwal vs Union Of India & Ors. on 12 May, 2015

*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                    Judgment delivered on: May 12, 2015.
+      W.P.(C) 13812/2006
       M.R.TUNDWAL                                         ..... Petitioner
                          Through       Dr. K.S. Chauhan, Mr. Ajit Kumar
                                        Ekka, Mr. Ravi Prakash, Mr.
                                        Murari Lal & Ms. Gyan Mitra,
                                        Advocates
                          versus

       UNION OF INDIA & ORS.                ..... Respondents
                     Through: Mr. M.K. Bhardwaj, Advocate
       CORAM:
       HON'BLE MR. JUSTICE KAILASH GAMBHIR
       HON'BLE MR. JUSTICE I.S.MEHTA

                               JUDGMENT

% KAILASH GAMBHIR, J.

1. The petitioner has preferred the present writ petition under Articles

226/227 of the Constitution of India against the impugned judgment and

order dated 31.03.2006 passed by the learned Central Administrative

Tribunal, Principal Bench, New Delhi (herein after referred as learned

Tribunal) in O.A. No. 1845 of 2005.

2. The brief facts stated in the present petition are that the petitioner

was initially appointed as L.D.C w.e.f. 16.09.1965 with the Central

Government Pay & Accounts Officer, Department of Supply, New Delhi.

The petitioner has worked in various Central Government

Departments/Offices during 16.09.1965 to 12.02.1987 including the lien

period of two years i.e. from his parent department- Central Government

to the Haryana State Public Sector Undertaking.

3. The petitioner was appointed as Incharge Training Officer,

Ministry of Textile, Office of the Development Commissioner

(Handicraft), Central Government, New Delhi from 25.01.1980, on which

post, he had worked till he was relieved on 12.02.1985 vide office order

no.1(4-12)/85- Textile, issued by the said department i.e. Ministry of

Textile. Thereafter, the petitioner was selected as District Manager in the

Haryana Harijan Kalyan Nigam Ltd., (now Haryana Schedule Caste

Finance and Development Corporation Ltd.) Chandigarh , through Direct

Recruitment selection process and was permanently absorbed in the same

w.e.f. 13.02.1987.

4. It is an admitted fact that the petitioner has served the respondent

No.1 for a total period of more than twenty one years which entitles him

to full pensionary benefits under the Central Civil Services (Pension)

Rules, 1972. The petitioner had preferred an O.A. No. 1726 of 1990

seeking the grant of pro-rata retirement benefits which were not released

in his favour after his retirement in the year 1987.

5. The petitioner had preferred another O.A. No. 1845 of 2005 for

restoration of his 1/3rd portion of Commuted Pension w.e.f. 13.02.2002

and full Dearness Allowance as provided under the Rules with all

consequential benefits. The learned Tribunal disposed of the

aforementioned application of the petitioner vide order dated 31.03.2006

with direction to the respondents to make payment of petitioner's

pensionary benefits for the period from 13.02.1987 to 18.03.1995.

Aggrieved by the said order dated 31.03.2006 the petitioner has preferred

the present Writ Petition.

6. Dr. K.S. Chauhan, learned counsel for the petitioner submitted that

the petitioner who had superannuated on 13.02.1987 was entitled to seek

commutation of the pension counting the period of 15 years from the date

of his retirement and not from the date when the pension was actually

released to him after his necessary medical examination. The learned

counsel also submits that the petitioner had filed an OA No.1726/1990

wherein the petitioner sought the grant of pro-rata retirement benefits

which were not released in his favour after his retirement in the year

1987.

7. The learned counsel further submitted that during the pendency of

the aforesaid OA, a decision was taken by the respondents to grant the

pro-rata retirement benefits to the petitioner and in the light of the said

decision taken by the respondents, the same was disposed of by the

learned Tribunal vide order dated 22.11.1994. The learned counsel also

submitted that in the aforesaid order dated 22.11.1994 passed by the

learned Tribunal, it was also observed that in any case if the

applicant/petitioner is dissatisfied by the grant of pro-rata retirement

benefits or if the same was not according to rules or according to the

decision conveyed by the Department of Pension and Pensioners'

Welfare, it shall be open to the applicant/petitioner to assail his grievance

according to law subject to the law of limitation.

8. The learned counsel for the petitioner further submitted that the

second OA No.1845/2005 was preferred by the petitioner for issuance of

necessary direction to the respondents to restore 1/3rd portion of his

commuted pension w.e.f. 13.02.2002 alongwith the grant of full Dearness

Allowance (in short 'DA') as per the applicable rules with all the

consequential benefits. The petitioner had also sought release of his pro-

rata retirement benefits for the period 13.02.1987 to 18.03.1995.

9. The learned counsel further submitted that under the applicable

rules, the pensioners are allowed an option of converting a portion of the

pension into a lump sum amount and to have the commuted portion of the

same restored on the expiry of 15 years from the date of retirement but

the respondents instead of calculating the period of 15 years from his

retirement had calculated the period of 15 years from the grant of

payment of the said pension, which in the case of the petitioner was made

in the year 1995. The learned counsel also submitted that the Office

Memorandum dated 08.03.2006 which was issued by the respondents

during the pendency of the said OA filed by the petitioner was based on a

wrong premise stating that the entitlement of the petitioner for restoration

of commutation of his pension could only be after the expiry of 15 years

i.e. from 18.03.1995, the date of actual payment.

10. Concerning the issue for grant of DA, the learned counsel for the

petitioner placed reliance on the judgment of the Apex Court in the case

of P.V. Sundara Rajan v. Union Of India 2000(4) SCC 469.

11. The petition is vehemently opposed by Mr. M.K. Bhardwaj, the

learned counsel for the respondents. The learned counsel argued that the

petitioner himself opted for 100% commutation of his pension on

23.08.1993, which was allowed and accordingly, the petitioner was paid

100% commutation of pension from 18.03.1995 onwards. The learned

counsel further submitted that the period of 15 years thus has to be

counted as per the applicable rules from the date when 100%

commutation was paid and not from the date of retirement of the

petitioner.

12. The learned counsel thus submitted that the learned Tribunal has

rightly placed reliance on the Office Memorandum No. 4/26/2004- P &

PW (D) (Voll. V) dated 08.03.2006, which is based on the OM

No.34/2/86-P & P.W.(G) dated 5th March, 1987 which clearly envisages

that unless the commutation is simultaneous with the date of retirement,

the period of 15 years shall be reckoned from the date of payment of

pension. On the DA, the learned counsel submitted that in the case of re-

employment of the petitioner, the employee is ineligible for DA, pension

or family pension in terms of Rule 55A of the Central Civil Services

(Classification, Conduct & Appeals) Rules, 1965.

13. We have heard the submissions made by learned counsel for the

parties and have given our thoughtful consideration to the arguments

advanced by them. We have also perused the material on record.

14. The petitioner, on being selected to Public Sector Undertaking, i.e.,

Office of the Development Commissioner (Handicraft), Ministry of

Textile, Government of India, New Delhi, was working on the post of

Incharge Training Officer, and retired from service w.e.f. February 13,

1987. The petitioner had filed an O.A. No. 1845/2005 before the learned

Central Administrative Tribunal, Principal Bench, New Delhi seeking

following reliefs:-

"a) Pass an appropriate order, direction or writ in the nature of mandamus or any other appropriate writ, directing the respondents to restore the 1/3 portion of Commuted Pension w.e.f. 13.2.2002 and full Dearness Allowance as provided under the Rules with all consequential benefits.

b) Pass an appropriate order, direction or writ in the nature of mandamus or any other appropriate writ, directing the respondents to pay the balance of commutation factor between 13.25 to 15.40 to the humble applicant with all consequential benefits and with interest at the rate of 24% per annum from the date of pro-rata retiral benefits i.e. 13.2.1987, till the day of realization and provide all consequential benefits.

c) Pass an appropriate order, direction or writ in the nature of mandamus or any other appropriate writ directing the respondents to grant interest at the rate of 24% per annum on the delayed payment of pensionary benefits/arrears of pensions with all consequential benefits.

d) Pass such other further order or orders as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of this case and in the interest of justice."

15. The grievance raised by the petitioner before the learned Tribunal

and before this Court is that he is entitled to restoration of one-third

commuted pension on completion of 15 years from the date of his

retirement and not from the date when 100% of commutation of pension

was done. If this period is reckoned from the date of his retirement, then

this period was completed on 13.02.2010. Another grievance which was

raised by the petitioner was apropos his entitlement of dearness allowance

on restoration of his full pension. The petitioner also claimed that his

pension ought to have been calculated taking into account commutation

factor of 15.40 which was available in the year 1987 when he retired from

service, instead of 13.25, applicable on the date when he was medically

examined.

16. During the pendency of the said Original Application i.e. OA No.

1845 of 2005, the respondents had passed an Office Memorandum dated

08.03.2006 wherein they had clarified that the petitioner will be entitled

to restoration of commutation of pension only after the expiry of 15 years

from 18.03.1995 which was the actual date of payment of pension, after

commutation. The Office Memorandum further clarified that the

petitioner would be entitled to full pensionary benefits for the period from

13.02.1987 to 18.03.1995 as the same, either in the form of pension or

commutation of pension from the date of retirement was one of the

benefits to which the petitioner was entitled.

17. Agreeing with the stand taken by the respondents, the learned

Tribunal also found that the entitlement of the petitioner for restoration of

his one-third pension is to be counted from the date of commutation of

his pension and not from the date of his retirement. In its reasoning the

learned Tribunal derived strength from the Office Memorandum dated

22.08.1990 issued by the Govt. of India, Department of Pension &

Pensioners' Welfare wherein, the clarification was made by the

Government that 15 years for restoration of pension is to be reckoned

from the date of retirement itself only in those cases where the

commutation of pension was/is 'simultaneous with retirement'.

18. In the background of the aforesaid reasoning, the learned Tribunal

found no justification to agree with the case set up by the petitioner

seeking restoration of commutation of pension on expiry of 15 years from

the date of his retirement. As regards the other relief concerning his

entitlement to full dearness allowance, the learned Tribunal held that the

dearness allowance as per instructions will not be admissible to an

employee on his re-employment on absorption in PSU/autonomous body.

The only relief to which the petitioner was held entitled to by the learned

Tribunal was that the respondent should make payment of the pensionary

benefits for the period from 13.02.1987 to 18.03.1995 and for

implementation of the same, a period of 45 days time was granted to the

respondent. Feeling aggrieved by the said decision of the learned

Tribunal, the petitioner preferred the present Writ Petition.

19. The petitioner after he was permanently absorbed in the said PSU,

had retired from service on February 13, 1987, and had opted for lump

sum amount on account of pro-rata pension in lieu of monthly pension on

23.08.1993. As per Rule 6(ii) G.D. (i) of CCS (Commutation of Pension)

Rules, 1981, the commutation of pension becomes absolute in the case of

absorption on the date on which the medical authorities sign the medical

report in prescribed proforma. The commuted value of pension is

calculated taking into consideration the date of medical examination and

the age on the next birth day after the date of his medical examination. In

this case the petitioner had appeared before the Medical Board on

21.10.1994 and his next birth day had fallen on 09.09.1995.

20. Taking into consideration the applicable commutation factor of

13.25, the petitioner was paid a sum of Rs.1, 03,986/- on account of pro-

rata pension in lieu of monthly pension and he became entitled to

restoration of one-third portion of pension on 17.3.2010. With regard to

this issue of reckoning of 15 years period either from the date of

retirement or from the date of payment of commutation of pension,

various clarifications were sought by the employees from

Ministries/Departments and such points were clarified by the Government

which form a part of the Appendix 1 of CCS (Commutation of Pension)

Rules, 1981, the same are reproduced as under:-

(4) Decisions/Clarifications regarding commutation of pension up to 40% and, reduction in pension and its restoration. - A number of communications have been received from various Ministries/Department/Pay & Accounts Offices seeking clarification regarding payment of commuted value of pension up to 40% in terms of this Department's OM No.45/86-97-P. & P.W. (A) - Part I, dated 27.10.1997 [Decision (4) below Rule 5]. The points raised are clarified below:

             Points                              Decision/Clarification

       1.    Whether a post 1-1-1996 retiree     Yes
             has to apply afresh for
             commutation of his pension up
             to 40%?

       2.    Whether 40% commutation             In case the retired Government
             should be allowed after medical     servant has availed of the benefit of

examination, if applied after one commutation of pension not year of retirement and what will exceeding 1/3rd of his pension be the commutation factor for within one year of retirement, he revised commutation? may be allowed the benefit of commutation of pension up to 40% with reference to age next birthday, as on date, without medical examination. In case the retired Government servant had not availed of the commutation up to

Points Decision/Clarification 1/3rd within one year of retirement, he may be allowed commutation up to 40% with reference to age next birthday, as on date, after medical examination. The pensioners who have already undergone medical examination in the latter case need not be medically examined against for this purpose.

3. Date from which reduction in Reduction in pension on account of pension will take effect? additional commutation of pension will be in two stages as per the provisions contained in Rule 6 of CCS (Commutation of Pension) Rules, 1981.

4. What will be the date of The commuted portion of pension restoration of additional shall be restored after 15 years commutation of pension? from the respective dates of commutation as provided in Government of India Decision No.1 under Rule 10 of CCS (Commutation of Pension) Rules, 1981. Necessary endorsement should be made in the PPO.

       5.    Whether pensioners retired on      Yes
             or after 1-1-1996 and had
             retained pre-revised scales will
             also be eligible for 40% of
             commutation of pension?

       6.    Whether the family can be          No.
             given the benefit of 40%
             commutation if a pensioner dies
             before exercising his Option.

2. This issues with the concurrence of Ministry of Finance, Department of Expenditure vide their U.O. No.351/EV/98, dated 29.6.1998.

[G.I., Dept. of Pension & P.W., O.M. No.45/7/95-P & PW, (G) dated the 4th September, 1998.]"

21. This petitioner had never applied for commutation of his pension

immediately after his retirement from the said PSU as no documentary

evidence to this effect has been placed on record by the petitioner. The

respondents in their communication dated 8th July, 2005 had called upon

the petitioner to provide documentary proof in support of filing any

application for commutation of his pension and the reasons, if any

communicated by the respondents for not agreeing to such a request made

by the petitioner. In response to this, the petitioner only wrote that he has

already made available whatever documents were in his possession.

Certainly the documents which were made available by the petitioner did

not contain any application for commutation of pension. In this

background, there is no difficulty in believing the stand taken by the

respondents that petitioner had opted for 100% commutation of pension

only on 23.08.1993 and accordingly he was paid the pension after

commutation on 18.03.1995. The period of 15 years as per applicable

Rules has to be counted not from the date of his retirement but from the

date when he was paid the pension on commutation after his medical

examination and also taking into account his date of birth after his

medical examination.

22. Reliance may be placed on the judgment of the Apex Court in the

case of Bharat Petroleum Corporation Ltd. Ex-employees Association

and Ors. v. Chairman & Managing Director Bharat Petroleum

Corporation Ltd., Bombay and Ors., AIR 1994 SC 1304, wherein, the

Hon'ble Supreme Court while placing reliance on the judgment in

Common Cause v. Union of India, AIR 1987 SC 210, held:

"In Common Cause v. Union of India (supra), this Court has observed that 15 years is a reasonable period after which the commuted portion of the pension could be restored. In arriving at this conclusion, this Court adopted the principle of years of purchase' and observed that and addition of two years to the period necessary for the recovery on the basis of years of purchase justifies the adoption of the 15 year rule and that appeared to be equitable. We find no reason why the same principle should not apply to the petitioners who were originally employed with Burmah Shell and subsequently became the employees of the respondent-Corporation which is an undertaking of the Government of India and "State" within the meaning of Article 12 of the Constitution (See : Som Prakash Rekhi v. Union of India and Anr. . The equitable principle underlying the rule for restoration of the commuted portion of the pension after the expiry of the 15 years from the date of retirement which is applicable to the Central Government can equally be applied to the employees of the respondent- Corporation."

23. Thereafter, the Apex Court in its subsequent decision rendered in

the case of R. Gandhi vs. Union of India and Anr., (1999) 8 SCC 106

made the observation that the words "15 years from the date of

retirement" in Common Cause (Supra) were construed as "15 years from

the date of commutation of pension" by the Supreme Court in the case

titled as Welfare Association of Absorbed Central Government

Employees in Public Enterprises v. Union of India and ors, (1991) 2

SCC 265. The relevant portion of judgment rendered in R. Gandhi's case

(Supra) is reproduced herein under:

"...From this observation it can be noticed that the judgment in Common Cause (supra) was neither modified nor clarified. What all can be inferred is that this Court in Welfare Association's case (supra) understood the words "on the expiry of 15 years from the period of retirement" in Common Cause (supra) as "15 years from the date of commutation....". The judgment in Welfare Association case (supra) was rendered on April 12, 1990. It is only pursuant to that judgment, the counter affidavit recites, the Government revised its earlier Office Memorandum dated March 5, 1987 and brought into force the impugned Office Memorandum dated August 22, 1990.

11. In Bharat Petroleum Corporation Ltd. Ex-Employees Association & Ors. vs Chairman & Managing Director Bharat Petroleum Corporation Ltd., Bombay & Ors. [1993 (3) Scale 424], this Court extended the benefit of the judgment in Common Cause (supra) to the clerical employees of Bharat Petroleum. There also the words "period of 15 years from the period of retirement" were understood as "15 years from the date of commutation".

24. Hence, in R. Gandhi v. Union of India, (Supra), the Hon'ble

Supreme Court observed that the restoration of the commutation of

pension after 15 years has to be counted from the date of the

commutation and not from the date of the retirement.

25. In the light of these admitted and indisputable facts, we are not

persuaded to take any view contrary to the view taken by the learned

Tribunal and we also find that the period of 15 years in the case of the

petitioner has to be reckoned from the date of payment of the pension on

commutation and not from the date of his retirement.

26. With regard to the entitlement of dearness allowance to the

petitioner on full pension no contention has been raised by learned

counsel representing the petitioner to rebut the reasoning given by the