PETITIONER:
R P KAPUR
Vs.
RESPONDENT:
UNION OF INDIA AND ORS.
DATE OF JUDGMENT: 09/08/1999
BENCH:
M. JAGANNADHA RAO, & N. SANTOSH HEGDE.
JUDGMENT
M. JAGANNADHA RAO,J. Leave granted.
This is an appeal by the appellant ( party-
in-person) against the judgment of the Central
Administrative Tribunal, Chandigarh Bench, in
O.A.No. 423/HR/94 dated 11.10.96. At the time of
the admission of the Special Leave Petition on
17.2.98, limited notice had been issued restricting
the dispute to the question whether pension and
retiral benefits are to be computed on the basis of
revised scales of pay. That order reads as
follows:
"The grievance of the petitioner appears to be
that though pension payment order has been made in
his favour but the pension has not been calculated
at the revised pay scales. It is submitted that
none of the retiral benefits have been calculated
at the revised scales. Issue notice to the
respondents limited to the said question".
At the outset, we may state that we are
concerned in this case with compulsory retirement
of a government servant as a matter of punishment
after a regular disciplinary inquiry. We are not
here concerned with a case where a public servant
is retired compulsorily in public interest.
The facts of the case, relevant to the
dispute, are as follows: The appellant joined
service on 19.11.1971 in the Indian Railway Service
of Signal Engineers (Class II). On the ground of
certain misconduct, he was suspended from service
on 21.1.1982, pending a disciplinary inquiry. At
the conclusion of the inquiry, he was compulsorily
retired under an order dated 17.11.1992, after due
consultation with the Union Public Service
Commission. The material part of that order which
became effective from the date of its service,
namely, 25.11.92, reads as follows:-
"The President has, therefore, decided to
impose on Sri R.P. Kapur, a penalty of compulsory
retirement from service with the condition that
while the payment during the entire period of
suspension from 21.1.1982 to the date of service of
this order, will be restricted to the subsistence
allowance drawn, this period may be allowed to
count as qualifying service for pension but for no
other purpose."
On 28.5.93, an order was passed by the
Railways (P.52 of the paper book) that "since the
appellant was paid only subsistence allowance
during the period of suspension upto the date of
compulsory retirement, the relevant period of 10
months for calculation of average emoluments for
pension would be the one relating to 10 months
period preceding 21.1.1982", i.e. the date on
which he had been initially placed under
suspension. In other words, instead of computing
the pension on the basis of the average emoluments
i.e. subsistence allowance drawn in the 10 months
before 25.11.92, the date of compulsory retirement,
it was proposed to compute the pension on the basis
of the average emoluments, namely the pay drawn
during the 10 months before the order of suspension
dated 21.1.1982. The result was that the appellant
became disentitled for computation on the basis of
75% of the pay as revised w.e.f. 1.1.1986.
On the basis of the above order dated
28.5.1993, the impugned order dated 25.6.1993
(see P. 39-40 of the paper book), was passed by
the respondents taking the 10 months ’pay’ before
suspension 21.1.1982 at Rs.1250/- p.m. They arrived
at a monthly average of Rs.1618.22 and computed the
pension at Rs.518, deducted Rs.171/- being 1/3 of
the pension commuted, and together with other
inputs arrived at a figure of Rs.1178/- p.m. w.e.f.
25.11.1992. Family pension and other retiral
benefits were also computed on that basis . It
appears from the counter filed on 9.3.99 by the
respondents, that pursuant to certain orders in
O.A.265 of 1994 dated 4.7.96 of the Central
Administrative Tribunal, Chandigarh Bench, the
above order was slightly modified by arriving at
Rs.1668.22 as the monthly average and pension was
fixed at Rs.529 and brought on par w.e.f. 1.1.86 at
Rs.1192/- p.m. plus variable Dearness allowance.
These figures were based on the average emoluments
ten months prior to 21.1.1982 and not the average
of the subsistence allowance paid during 10
months before 25.11.92.
The appellant has placed on record the orders
of the Chief Personnel Officer, N.E. Railway ( at
P.42 of the paper book) dated 4/5.10.1988 to show
that after 1.1.1986, initially his pay was computed
in the revised-scale of Rs.2200-4000 and fixed at
Rs.2650/- p.m. w.e.f. 1.1.86 and on that basis
his subsistence allowance at the rate of 75% of the
pay was fixed as above under sub rule (ii) of Rule
2043 (FR 53) R-II. That order reads as follows:
"In terms of Central Administrative Tribunal,
Guwahati’s Judgment in case NO.GC 171/87, the pay
of Shri R.P. Kapur, (ASTE, under suspension) in
the revised scale of Rs.2200-4000/- (RSRP) is fixed
@Rs.2650/- with effect from 1.1.86
This has been certified by the FA &
CAO/EGA/Maligeon vide his endorsement No.Nil dated
3.10.89.
Since Shri R.P. Kapur, is under suspension,
subsistence allowance at the rate of 75% of the pay
fixed as above may be drawn/adjusted accordingly in
terms of sub-rule (ii) of Rule 2043 (FR 53) R-II.
Sd/-(Illegible)
For Chief Personnel Officer
N F Railway
No.202E/2/60(O) Loose
Dated 4/5.10.1988"
(It may here be noted that while according to
the appellant, after 1.1.1986, the pay was re-fixed
at Rs.2650/- p.m., the counter affidavit of the
respondents in the Tribunal put the re-fixation
after 1.1.86 at Rs.3300/- p.m.).
The appellant, therefore, contends that when
the subsistence allowance is 75% of pay instead of
adopting the 75% of the average of 10 months pay
i.e. average of Rs.2650/- p.m. for 10 months (or
Rs.3300/- as stated in the counter) - being the
amount per month paid in the last 10 months before
the compulsory retirement on 25.11.1992,- the
respondents have wrongly computed the pension and
all other retiral benefits illegally on the basis
of Rs.1250/- p.m. the pay during the 10 months
preceding the order of suspension dated 21.1.82.
We shall now refer to the response of the
respondents in their initial counter affidavit
filed before the Tribunal which, on its face,
appears to be self contradictory. It is stated
there ( P.47 of the paper book) that the Railway
Board in consultation with the Department of
Pension and Pensioners’ Welfare have taken the view
that "since the petitioner was paid only
subsistence allowance during the period of
suspension, the relevant period of 10 months for
calculation of average emoluments for the pension
should be the one relating to 10 months period
preceding 21.1.82, i.e. the date on which the
petitioner had been kept under suspension". The
above contention in the counter is obviously based
on the order dated 28.5.93 referred to earlier. It
is then stated in the counter rather curiously that
even if the average emoluments are fixed as per the
pay revision w.e.f. 1.1.86, the pension will not
increase. This peculiar logic in the counter is
worth quoting:
"It is pertinent to mention here that even
though the pension was calculated on the basis of
pre-revised scale as on 1.1.86, the pension of the
petitioner has been fixed at Rs.1178.00 which is
equivalent to the revised pay scale as on 1.1.86
plus normal relief as admissible form time to time
to the pensioners. Therefore, it is implied that
the petitioner has been paid his due pension
equivalent to the revised pay scale as admissible
in such case. If his revised pay of Rs.3200/- were
taken into consideration for the purpose of
calculation of pension, he would be getting the
same pension i.e. Rs.1178.00. Therefore, the
prayer of the pensioner has got no merit and
deserves to be dismissed."
It is not clear, mathematically how the
pension computed on the pay drawn as per the pre-
revised scale (Rs.1178 or Rs.1192 p.m. as the case
may be), can be the same even if it computed on the
basis of the pay revised w.e.f. 1.1.86 i.e. Rs.
2650 (or Rs.3300 p.m.).
It was stated in another para ( para 4.11) of
the same counter filed in the Tribunal that "even
though the pay of the petitioner was fixed in
revised scale of pay Rs.3000-4500, he did not draw
the pay because of the fact that he was placed
under suspension w.e.f. 21.1.82 and he was paid
only the subsistence allowance during this period
from 21.1.82 to 25.11.92 and not ’pay’ as stated by
the petitioner". It was further stated ( para
4.12) " ......... the calculation of pension,
gratuity and commutation was correctly done and
there is no anomaly in calculation taking into
account the pay of the petitioner immediately
before his suspension w.e.f. 21.1.82". What the
respondent meant was that inasmuch as the appellant
did not drawn "full pay" as revised from 1.1.1986
but only "subsistence allowance" on such revised
pay, he could not claim any computation to be made
on the basis of the subsistence allowance between
1981 to 1992. The reason was that pension was to
be based on full pay. Full pay was drawn only
before the suspension in 1982.
The appellant filed a rejoinder before the
Tribunal and submitted that the above method of
computation was not correct.
The O.A. was dismissed by the Tribunal on
11.10.96 holding that the contention of the
respondents was correct and that the appellant’s
contention, if accepted would amount to treating
the period of suspension as on duty. It was stated
in that order of the Tribunal that the dismissal of
the O.A. would, however, be subject to the result
of O.A.267/HR/94 where the order of compulsory
retirement was under challenge. A review petition
filed by the appellant was dismissed on 17.12.1996
holding that the appellant’s "contention that the
period of suspension from 21.1.82 to 25.11.92
should be treated as period spent on duty" could
not be accepted in view of the terms of the order
of compulsory retirement.
Aggrieved by the judgment of the Tribunal
dated 11.10.96, this appeal has been filed. Before
us, the appellant has raised the same contentions
as he raised before the Tribunal.
A counter has been filed by the respondents in
this Court on 15.10.98 contending that in the
circumstances of the case, the appellant is to be
treated as one under suspension till 25.11.92, the
date of compulsory retirement. The period under
suspension "may count for any specific purpose e.g.
qualifying service/leave etc. provided the
competent authority passes a specific order to that
effect." The President has passed a specific order
that the period in question may count as qualifying
service for the purpose of pension and not for any
other purpose. "The special dispensation was made
by the Disciplinary Authority only to help the
petitioner for spending 10 years under suspension".
It is further stated that "under Rule 502 of
Railway Manual of Pension Rules, 1950, average
emoluments should be determined with reference to
emoluments drawn by a government servant during the
last 10 months of his service". The said rule, it
is said, has laid down that "if during the last 10
months of his service a government servant had been
under suspension, the period whereof does not count
as service, the aforesaid period of suspension
should be disregarded in the calculation of the
average emoluments and equal period before the 10
months shall be included".* Then it is stated:
"The petitioner had been under
suspension for more than 10 years before
----------------------------------------------
*We may here point out that Rule 502 of the
1950 Rules has been examined by us from the Manual.
It does not contain any such provision as quoted
above. The provisions quoted are obviously from
Rule 50 of the Railway Services ( Pension) Rules,
1993 which replaced the Manual of 1950. In fact,
in the additional counter filed on 9.3.99 the
respondents have relied upon and set out only Rule
50 of the 1993 Rules. his compulsory retirement
and, therefore, even an equal period of 10 months
preceding the 10 months of his retirement would
fall within the suspension period during which he
had drawn only subsistence allowance. Thus, if the
whole period of the suspension period is ignored
the relevant emoluments will be one relating to the
10 months period preceding 21.2.82 from which he
was placed under suspension".
In other words, it is accepted in the counter
that the "suspension period is ignored". Then it
is further stated that (see P.92 of the paper book)
there is a distinction between ‘subsistence
allowance’ and ‘pay’ and that pension can be only
on ’pay’ and that hence one has to go back to the
period 10 months before 21.1.82, the date of
suspension. Then comes an important plea that for
the peculiar contingency arising in the case of the
appellant, there is no provision in the Rules which
permits the computation of pension on subsistence
allowance, i.e. even though such subsistence
allowance has been computed at 75% of the pay as
revised w.e.f. 1.1.1986. That para in the counter
reads as follows:
"Under the existing rules, there is no
provision to take the average of the subsistence
allowance for calculating the average emoluments
for purposes of pension. Since the petitioner did
not draw regular pay and allowance in the revised
scales of pay w.e.f. 1.1.86 to 25.11.92, there is
no scope to calculate his average emoluments for
the purpose of pension and other pensionary dues as
per the revised pay scales".
After the appellant filed his rejoinder, this
Court directed the respondents to produce the
relevant Rules. Thereafter, a further additional
counter was filed on 9.3.99. Reference was made
there to Rule 50 of the Railway (Pension) Rules,
1993. That Rule is set out in the counter as
under:
"Rule 50 - Average Emoluments : Average
emoluments shall be determined with
reference to the emoluments drawn by a
railway servant during the last ten
months of his service.
NOTE 1:- If during the last ten months
of his service a railway servant had been
been absent from the duty on leave of
which leave salary is payable or having
been suspended had been reinstated
without forfeiture of service, the
emoluments which he would have drawn, had
he not been absent from duty or
suspended, shall be taken into account
for determining the average emoluments.
Provided that any increase in pay
(other than the increment referred to in
Note 3 ) which is not actually drawn
shall not form part of his emoluments.
NOTE 2:- If, during the last ten months
of his service, a railway servant had
been absent from duty on extraordinary
leave, or had been under suspension the
period whereof does not count as service,
the aforesaid period of leave or
suspension shall be disregarded in the
calculation of the average emoluments and
equal period before the ten months shall
be included". (This rule corresponds to
FR 34)".
It is stated in the counter-affidavit that "as
per rule, if an employee is awarded a major penalty
and the suspension period is treated as wholly
justified, in that case, such employee is not
entitled for any benefit of service and the period
of suspension cannot be treated as ’on duty’". It
is stated that the President, who is the
Disciplinary Authority, has passed a specific order
that while the payment during the entire period of
suspension will be restricted to ’subsistence
allowance only’, the said period may be allowed to
be counted as qualifying service for the purpose of
pension and not for any other purpose. Hence, the
petitioner is not entitled to get any other benefit
for the suspended period, i.e. 21.1.82 to
25.11.92. On the above reasoning, it is contended
that the "petitioner is not entitled for pension on
the revised pay-scale in the light of the aforesaid
rules".
These are the relevant orders and the relevant
contentions on both sides.
We have now to decide whether the above
contentions raised in the various counter-
affidavits are correct.
We shall first proceed to analyse Rule 50 of
the Railway Services ( Pension ) Rules, 1993. The
said Rule speaks of ’average emoluments drawn" by a
railway servant during the last ten months of his
service. Note 1 below the said rule, it will be
seen, deals with a case of ’reinstatement’ and
hence Note 1 cannot obviously apply. But it is
necessary to explain what it means. It states that
if the person suspended is reinstated without
forfeiture of service, the emoluments which he
"would have drawn" shall be taken into account.
There is a proviso to Note 1. It states that
increase in pay which is ’not actually drawn’ shall
not form part of his emoluments. Considerable
reliance has been placed on this proviso by the
respondents to contend that the appellant has not
drawn the full revised pay w.e.f. 1.1.1986 but he
has drawn only subsistence allowance. In our view,
this proviso cannot apply because Note 1 itself, as
seen above, does not apply. However, what the
proviso means is that increase in pay not actually
drawn i.e. which is only notionally fixed but
without a right for payment - as in E.
Gopalakrishna vs. Union of India ( 1995 Supple (4)
SCC 205) - cannot go into the computation.
We then come to Note 2 on which greater
reliance has been placed in the counter affidavits.
If one reads the Note 2 carefully, it is clear that
in cases where during the last ten months of one’s
service, the person has been under suspension, -
the period whereof does not count as service,- the
said period of suspension is to be disregarded
while computing pension.
Reading it carefully, it will be seen that
only if the suspension period is not to count as
service, the said period is to be disregarded. In
our opinion, the words ’the period whereof does not
count as service’ are important and have to be
given effect to. On the other hand, if the
suspension period is liable to be reckoned, then
obviously the said period cannot be disregarded.
In our view, the respondents have obviously ignored
the said word ‘not’, and clearly misinterpreted the
said Note II below Rule 50. In the case of the
appellant, - in terms of the very language of the
order of compulsory retirement passed by the
President of India, the period of suspension is to
count towards "qualifying service". If the
President, as the Disciplinary Authority, has
directed that the period of suspension shall count
as qualifying service - it is, in our opinion,
wholly impermissible for the Railways to omit the
said period from consideration on the specious
ground that before 25.11.92 appellant has drawn
only subsistence allowance and not pay. The very
purpose of the order of the President cannot thus
be allowed to be defeated.
We may also point out that under Rule 37 of
the Pension Rules 1993, it is stated that where "a
railway servant is kept under suspension pending
inquiry into his conduct, the period of such
suspension shall count as qualifying service only
where on conclusion of such inquiry, he has been
fully exonerated or the suspension is held to be
wholly unjustified and in other cases, the period
of such suspension shall not count unless the
authority competent to pass orders under the rule
governing such cases expressly declares that it
shall count to such extent as that authority may
declare...". In the present case, there is an
express direction by the President to count the
service, within this Rule. Therefore, once the
suspension period is directed to be counted for
computing the qualifying service, it is the
emoluments drawn at the end of the period just
before retirement that become relevant and not the
’pay’ drawn before the commencement of suspension,-
which in this case goes to a period ten years
before 1992. Further, it will be noticed that the
appellant has put in less than 20 years, by the
date of his suspension on 21.1.1982 he having been
recruited in 1971. From 1971, the service upto
21.1.82 will be less than 20 years, and if we
accept the respondent’s contention no pension can
in fact at all be paid. It is not the respondents’
contention that no pension need be paid. This is
again one more reason as to why the contention of
the respondent is to be rejected.
We shall next refer to the other contention
that the appellant has not drawn "emoluments" which
can amount to ’pay’ during suspension and that he
has only drawn ’subsistence allowance’ and that
that cannot be described as ‘pay’. It is the
respondent’s contention that unless ‘emoluments’
are drawn the ‘average emoluments’ cannot be
computed. The said contention, in our opinion, is
based upon a misapprehension that ’subsistence
allowance’ does not come within the definition
’emoluments’. The respondents in this context have
failed to notice Rule 49 which immediately precedes
Rule 50. As we shall presently show, a proper
interpretation of Rule 49 read with Rule 1303 of
the Railway Establishment Code ( Part II) will lead
to the conclusion that ‘suspension allowance’ also
comes within the definition of ‘emoluments’.
Rule 49 defines ’Emoluments’ as follows:-
"Rule 49: Emoluments:- The expression
(a) ’emoluments’ for the purpose of
calculating various retirement and death
benefits, means the basic pay as defined
in clause (i) of Rule 1303 of the Code
(i.e. the Railway Establishment Code)
which a railway servant was receiving
immediately before his retirement or on
the date of his death;
(b) ’pay’ in these rules means the pay
in the revised scales under the Railway
Services (Revised Pay) Rules, 1986."
Inasmuch as Rule 49 refers to Rule 1303 of the
Railway Establishment Manual ( Vol.2), we shall
refer to the said rule 1303, (which corresponds to
F.R.9(21)(a)). That Rule reads as follows:
"Rule 1303: Pay: Pay means the amount drawn
monthly by a government servant as:-
(i) the pay, other than special pay....
(ii) overseas pay, special pay and personal
pay; and
(iii) any other emoluments which may be
specifically classified as pay by the
resident.
Average pay - Average Pay means the
average monthly pay earned during the 12
complete months immediately preceding the
month in which the event occurs which
necessitate the calculation of average
pay"
Rule 49 refers to ’basic pay’ and Rule 1303
refers to ’amount drawn’. In our view, a combined
reading of Rule 49(1) and Rule 1303 above referred
to shows that if full basic pay is ‘emoluments’,
that being the monthly amount drawn, then the 75%
of the full basic pay will also be ‘emoluments’ in
the case of a person under suspension, it being the
amount drawn month by month by the government
servant. Thus the first condition is satisfied.
The other requirement of the definition of
‘emoluments’ for purpose of pension is that the
amount is to be computed on the basis of emoluments
drawn during the 10 months before retirement. This
condition cannot be disregarded by the respondents.
Thus both ingredients of the definition of
‘emoluments’ are satisfied. Further, it will be
noticed that Rule 49(2) specifically requires that
the scales as revised w.e.f. 1.1.1986 are to be
taken into account as per the Railway Services
(Revised Pay) Rules, 1986. This sub-rule cannot be
allowed to be disregarded by the respondents.
In view of the above rule position, the
contentions raised in the counter cannot be
accepted.
The Tribunal, in our opinion, is wrong in
thinking that if the subsistence allowance before
1992 is adopted, it will amount to treating period
of suspension as on ’duty’. We may point out that
the petitioner is not asking that his pension is to
be fixed on the basis of the full salary payable in
the 10 months before 25.11.92. The appellant’s
plea is that the pension is to be fixed on the
basis of the subsistence allowance fixed and drawn
by him in the 10 months preceding 25.11.92. That
has been fixed on the basis of the scales as
revised w.e.f. 1.1.1986. This plea, in our
opinion, is certainly permissible under the Rules.
On the other hand, if we have to go back to the
emoluments drawn before suspension i.e. average
during 10 months before 1982 - then that will
amount to going by the pre-1982 emoluments while
the rule requires that the emoluments during 10
months before retirement are to be taken into
account.
For all the reasons given above, we are of the
view that the appellant is entitled to have his
pension fixed on the basis of the revised
subsistence allowance fixed and drawn by him as per
the order of the Chief Personnel Officer dated
4/5/.10/1988, as per the pay revision w.e.f.
1.1.1986. We may add that it is not clear whether
the revised pay has been fixed at Rs.2650/- p.m.
w.e.f. 1.1.86 as per the order filed by the
appellant or if it has been fixed at Rs.3300/- p.m.
as admitted by the respondents in the counter filed
before the Administrative Tribunal. We, therefore,
declare and direct as follows. If the revised pay
is indeed Rs.2650/- p.m. and his subsistence
allowance is 75% thereof, the appellant will be
entitled to the 75% of Rs.2650/- to be treated as
the ’emoluments’ for the previous 10 months before
25.11.92 till which date he has been in service (
even if he was under suspension). Average
emoluments, for purposes of pension have to be
fixed on that basis. If the refixation of pay is
Rs.3300/- as stated in the respondents’ counter in
the Tribunal, the average emoluments have to be
worked out on the basis of 75% of Rs.3300/- during
10 months before 25.11.92. If on such fixation,
the appellant is entitled to other additions like
DA etc. and which are periodically revised, the
same shall also be computed w.e.f. 25.11.1992.
The pension and family pension shall,
therefore, be re-computed on the above basis and
paid to the appellant w.e.f. 25.11.1992. The other
retiral benefits will also be re-fixed on the
above basis w.e.f. 25.11.1992 and paid to him. The
computation of the family pension shall also be
done on that basis. On account of the long delay
and denial of pension and retiral benefits on a
wrong interpretation of the Rules, we deem it fit
to award 12% interest on all the arrears payable to
him on the above basis in respect of pension and
all benefits. Arrears have to be computed with
effect from the date of retirement on 25.11.1992.
The appeal is allowed as stated above but there
will be no order as to costs.