Sunday, 24 February 2013

White Paper III - The Additional Affidavit and the GoI/MoD letter dated 27.12.2012 vs the Truth



You can bend it, and twist it…..You can misuse it, and abuse it…
But even God cannot change the Truth
-    Michael Levy
---------
This a comparative analysis of the Union of India’s Additional Affidavit, GoI/MoD letter dated 27.12.2012 vs the Truth (as is available) in the 4th and 5th CPC Reports, Resolutions of the GoI approving the Recommendations of the CPCs, Judgments of the Hon’ble High Court of Kerala and the Hon’ble Supreme Court in IA No. 9 of 2010 in TP (C) 56 of 2007.

Petitioners and Respondents

1.         Who were the Petitioners and Respondents in IA No. 9 of 2010 in TP (C) 56 of 2007?  

2.         Title of the Additional Affidavit:  As per the title of the Additional Affidavit, it is in the matter of: Union of India & Ors, the Petitioners and N.K. Nair & Ors (and connected matters), the Respondents.

3.         The Truth: - It is not Union of India and Ors vs and Maj A.K. Dhanapalan, the respondent as referred to many times in the GoI Letter dated 27.12.2012. That the case of UoI vs Maj Dhanapalan was over should have been evident even to the least perceptive person in UoI because The Hon’ble Supreme Court’s order dated 8.3.2010 states 
 
“….Since the issue involved in the writ petitions pending before the various High Courts is the same as in Writ Petition(C) Nos. 96/2009 and 34/2009 pending before this   Court, this    transfer petition is allowed. Writ petition Nos. 11056/2006, 11128/2006, 10810/2006, 13508/2006, 13497/2006 and 18176/2006 pending before the High Court of Kerala, Writ Petition No. 13904/2006 pending before the High Court of Andhra Pradesh and Writ Petition Nos. 1935/2006, 1934/2006, 1957/2006 and 47909/2006 pending before the High Court of    Allahabad are directed to be transferred to this Court and taken on Board.
 
The prayer in these writ petitions under Article 32 of the Constitution is for grant of benefits awarded by a learned Single Judge of the Kerala High Court vide his judgment dated 5.10.1998 in O.P. 2448/1996 which has been affirmed by the Division Bench of the High Court in Writ Appeal No. 518/1999 by judgment dated 4.7.2003.”
 
We   have   carefully  perused  the judgment dated 5.10.1998 of the learned Single Judge as well as judgment dated 4.7.2003 of the Division Bench of the High Court of Kerala and we respectfully agree with the reasoning given therein for grant of rank pay   retrospectively from  1.1.1986. We also direct interest to be paid thereon at 6% p.a.   Accordingly, these writ petitions as well as the transferred writ petitions are allowed.


5.         And confirmation, if UoI needed it, is provided in the Hon’ble Supreme Court’s order dated 4.9.2012 as follows

3…………… on totality of the circumstances including the circumstance that Special Leave Petition arising from the judgment dated July 4, 2003 in the matter of Major A.K. Dhanapalan was dismissed by this Court in August, 2005……..

             
Analysis: Is UoI/MoD persistently in mentioning Maj Dhanapalan but never N.K.Nair & Ors so as to limit the extent of compliance of the orders of the Supreme Court in the latter cases?

Para 2 of the Additional Affidavit

6. The Deponent states “The substantive issue involved in the present case (please note it is not Maj Dhanapalan case) related to the methodology of pay fixation (bold font in original addl affidavit) for Armed Forces officers pursuant to the recommendations of the Fourth Central Pay Commission and particularly whether “rank pay” which was being paid as a separate component, had to be deducted from the total emoluments before fixing the pay in the integrated scale w.e.f. 01.01.1986 (please note the date in this solemnly affirmed and on declared on oath affidavit). The detailed facts and circumstances that led to the filing of the present Application (being I.A. No.9) seeking modification/directions/recall of the Order dated 08.03.2010 passed by this Hon’ble Court have been set out in detail in the said Application and are not being repeated herein for the sake of brevity.”   

Please Note: The date mentioned is w.e.f (or with effect from) 01.01.1986 and not as on 01.01.1986 in page 2, para 6 of the GoI/MoD letter dated 27.12.2012.

Para 6 of the Additional Affidavit:

7.         The deponent solemnly affirms and swears on oath “I state and submit that the present case does not actually relate to “grant of Rank Pay to Armed Forces officers” but the issue involved therein is “the methodology adopted for re-fixation of pay” (emphasis in original additional affidavit.) Since Rank Pay was being made available as an additional component for the first time by the fourth central pay commission, the methodology of its calculation was neatly illustrated in Para. 28.113 of its report which was accepted by the Central Government. It is further submitted that Rank Pay being a separate element besides pay in the integrated pay scale (Rs 2300-100-3900-150-4200-EB-150-5100) was recommended by the IV Central Pay Commission for the Armed Forces officers in the ranks of Captain upto the rank of Brigadier. Para 28.113 is quoted herewith for ready reference:   

28.113. In chapter 30 we have recommended the method of fixation of pay in proposed scales for civilian officers, we recommend that the same method may be adopted for fixation of pay of armed forces personnel also. Since rank pay is a separate element for officers up to the rank of Brigadier and equivalent, the same may be taken into account while fixing pay in the integrated scale of pay recommended by us. An illustration showing pay in the integrated scale of pay for army officers of different ranks is given in Annexure 28.1.”

The Truth: In para 4 of the GoI/MoD letter of 27.12.2012 it quoted the Hon’ble Supreme Court order of 8.3.2010 as “….directed as under….and we respectfully agree with the reasoning given therein for grant of Rank Pay retrospectively from 1.1.1986….” (emphasis by author).

Other Parts of Additional Affidavit

8.         Additional Affidavit Para 7 reads “I state and submit that prior to the recommendation of the fourth Central Pay Commission, there was no concept of Rank Pay. For the first time, the Central Pay Commission in order to differentiate between Ranks introduced the concept of Rank Pay.

9.         Additional Affidavit, Para 8 reads “I state and submit that IV Central Pay Commission recommended that sine Rank Pay was being paid as a separate element of pay, the same may be taken into account while fixing pay in the integrated pay scale…..in which Rank Pay was deducted from the revised emoluments and the pay was then fixed as the stage next above the amount thus computed in the integrated pay scale.”

10.       Additional Affidavit, Para 9 reads “……from the total emoluments before fixing pay in the integrated pay scale with effect from 1-1-1986 (emphasis mine). In other words, since Rank Pay was going to be paid as a separate element, it has to be deducted from the total emoluments drawn as on the date of the implementation of the recommendation of the fourth pay commission.

The Truth: This is reproduced from the judgment of the Kerala High Court in Writ Appeal No. 518 of 1999 filed by UoI & Ors: -

2. When the writ appeal came up for admission, a Division Bench of this Court, because of an apparent conflict between the body of the order and the illustration, directed the appellants to file an additional affidavit. Accordingly, an additional affidavit refers to the pay commission recommendation, the order accepting the recommendation by the Govt …...and the illustration regarding the fixation based on such order.  

3. It is an admitted case, even in the additional affidavit, that the Army officers are entitled to rank pay. Para 28.13 of the Pay Commission report, as quoted in the affidavit reads as follows: -

28.13 We also recommend that, in addition to pay in the above integrated scale, the following rank pays may be given to officers in the Army and their equivalent in the other services…..”

Thus rank pay, is in addition to the pay that was getting. This recommendation has been accepted, and the Government issued orders as quoted in additional affidavit as follows: - 

            (b) Rank Pay – In addition to pay in the integrated scale, the following rank pays may be given to officers of the Army and their equivalents in the other services….

Thus, the rank pay as per the order accepting pay revision is in addition to the existing pay.
  
4. While formulating the principles for pay fixation, in case of those who are enjoying special pay, that element also has been directed to be reckoned for the purpose of pay fixation. In case of Army officers, it was ordered as follows:

“In Chapter 30, we have recommended the method of fixation of pay in proposed scales for civilian employees. We recommend that the same method may be adopted for fixation of pay of armed forces personnel also. Since rank pay is a separate element for officers upto the rank of Brigadier and equivalent, the same may be taken into account, while fixing pay in the integrated scale of pay recommended by us. 
 
Thus it is clear that for Civilian officers, there is no rank pay. But for Army officers, there is rank pay admittedly as mentioned above. Necessarily, when the principles as mentioned above applies to Army Officers, the rank pay shall also be added to the substantive pay.

The Misuse of Truth?: The judgment of the High Court of Kerala, based on the additional affidavit filed by UoI & Ors in WA 518 of 1999, contradicts what is being stated as the truth with solemnity and under oath in the present additional affidavit. Where did the Report of the 4th CPC state that Rank Pay should be deducted from the amount computed in the integrated pay scale? Did the Resolution 9E dated 18.3.1987 or a separate Gazette of India Extraordinary (SRO 12 E dated 13.9.1986 was issued for civilian employees) state so? Then why were they not produced in the High Court of Kerala? Why did the UoI & Ors rely on Para 6 (a) (i) and (ii) of the SAI 1/S/1987?   

Para 14 of the Additional Affidavit

11.       The paragraph reads “The deponent respectfully submits that the aforesaid recommendations of the 5th Pay Commission were accepted and duly implemented by the Central Government. The pay fixation was carried out in accordance with principles contained in the illustrations to the 4th CPC….”

The Truth: This is what the Fifth Central Pay Commission has to state in its report (Please note that nowhere does the 4th CPC mention deductions or rank pay in the above extract provided by UoI): -

Part VII, Section II Para 145.6….. As regards officers, the Fourth CPC felt that the pay structure should be such that it made the armed forces attractive as a career and provided a reasonable pay progression to the officers of the services.

Part VII, Section II, Para 147.12 Present Position – ……To compensate for ranks attained, rank pay is also granted which attracts dearness allowance and is reckoned for pensionary benefits.

The Misuse of Truth: UoI has submitted that pay fixation of the 5th CPC was carried out in accordance with principles contained in illustrations to the 4th CPC.

Please Note: Therefore, if the interpretation by the UoI/(Concerned Ministries)of the 4th CPC also “granted Rank Pay” was found to be erroneous and ruled so by the High Court of Kerala (in OP 2448/1996 and WA 518/1999) and the Supreme Court in TP (C) 56 of 2007 on 8th March 2010 and in IA No. 9 of 2010 in TP (C)56 of 2007, what is the higher order that persuades Concerned Ministries to persist with deducting Rank pay for the 5th CPC and the consequent adverse effects on pay and allowances and pension benefits w.e.f 1.1.1996?

Paragraph 30 of Additional Affidavit

12.       The paragraph 30 which makes categorical statements reads “In these circumstances it is most respectfully submitted that Government of India is fully concerned with the grievances of the armed forces personnel however the order dated 8-3-2010 passed by this Hon’ble Court if implemented would lead to the following practical difficulties:

(a)               In the present matter, implementing the Hon’ble Court order dated 8-3-2010 would mean re-fixation of pay of not only the officers entitled to Rank Pay, but pay scales of other personnel above and below such officers would have to be revised w.e.f. 1.1.1986 firstly, and then from 1.1.1996 and 1.1.2006, i.e. at the time of subsequent pay revisions. Similar process would be carried out for revision of pension of the retired personnel. Any changes at one place will inevitably have impact on horizontal and vertical parities thereby changing the overall pay structure by the 4th CPC.
   
(b)               Grant of this unintended benefit would place a heavy burden on exchequer. Para 9 and 10 of the Report (emphasis by deponent) of the  High Powered Committee constituted to assess the financial impact is reproduced below for ready reference: -

“9. Apart from the enormous financial implications, actual implementation of the Hon’ble Court’s order would involve the following stages: -

§                     Revision of pay of officers on 1.1.1986, 1.1.1996 and 1.1.2006 with simultaneous revision of all pay linked allowances/benefits. Enormous efforts are required to extract data from all backed up resources, including information relating to promotion, annual increment, stagnation increment, details of forfeiture, admissibility, discontinuation of relevant allowances, calculation of Income tax and apportioning the same over the years;

§                     Calculation of DA on slab basis from 1.1.1986 to 31.12.1995 is time consuming;

§                     Revision of retirement benefits (gratuity, leave encashment) of officers retiring after 1.1.1986;

§                     Revision of pension on 1.1.1986, 1.1.1996 and 1.1.2006;

§                     In several cases, family pensions would have to be revised on the basis of revised pay/pension of the officer;

§                     In some cases, payments may have to be made to legal heirs of the deceased retired officers; and

§                     Interest at the rate of 6% per annum for upto 24 years in each case will have to be calculated and paid.

This would be a protracted exercise taking a lot of time and involving huge manpower as each case will have to be examined/calculated individually.

10. Financial implications of around 1623.71 crores arising out of implementation of the Hon’ble Supreme Court   order dated 8-3-2010 would create a substantial impact on the public exchequer. This impact in only one time. In addition, it would also lead to enhanced recurring expenditure from Consolidated Fund of India. It would further nullify the recommendation of the Pay Commission as well as the decision of the Government thereon. The Committee, therefore, is of the view that the financial implications and above facts and in the present matter may be submitted to the Hon’ble Supreme Court   for considerations.”

13.       Contrast this with Para 6, 7, and 8 of the GoI/MoD letter dated 27.12.2012: -

(a)      Para 6 – “……………and to re-fix the initial pay (emphasis is mine) of the concerned officers of the Army, Navy and Air Force in the revised scale (integrated scale) as on 1.1.1986 as per para 6 of those instructions without deducting of Rank Pay appropriate to the rank held by the officer on 1st January 1986….. 

The Truth: The Hon’ble Supreme Court order on 8.3.2010 states “with retrospective effect from 1.1.1986” and the Court’s order dated 4.9.2012 upholding its earlier order only changed the date of commencement of interest.

(b)       Para 7 – Except to the extent of modification of the provision contained in para 6 (a) (ii) of the aforesaid Army Instructions………….. which is in complete compliance of the aforesaid judicial pronouncement

The Truth: Complete compliance with judicial pronouncements of  the Hon’ble Supreme Court order on 8.3.2010 and 4.9.2012 will be meaningless unless the integrated pay scale is revised for the blatantly and wilful deduction of Rank Pay which lead to a lower pay scale for Armed Forces officers.

(c)        Para 8“As the aforesaid Order of the Hon’ble Supreme Court passed on 4.9.2012 read with their earlier order dt. 8.3.2010, has upheld the Order of the Hon’ble Kerala High Court passed on 5.10.1998 in case of Major A.K.Dhanapalan and as the said Order of the Hon’ble Kerala High Court dt. 5.10,1998 is for re-fixation of pay as on 1.1.1986, and as this sanction is in compliance with these judicial pronouncements, it is clarified there shall be no change in respect of Special Instructions of Army, Navy and Air Force issued on 19.12.1997 and 11.10.2008 (Army) and 18.10.2008 (Navy and Air Force) for implementation of the recommendations of the 5th and 6th Central Pay Commission respectively, except to the extent of the need for re-fixation of pay as on 1.1.1996 and 1.1.2006, necessitated due to re-fixation of pay as on 1.1.1986 in terms of these orders.

The Truth:

14.       Orders of the Hon’ble Supreme Court dated 8.3.2010 agreed the reasoning of the High Court of Kerala and did not uphold the order of the Kerala High Court passed on 5.10.1998. UOI’s Special Leave to Appeal was dismissed in August 2005 and the Hon’ble Supreme Court’s order (para 3) confirms this.

15.       MoD complied with and paid Maj Dhanapalan. Para 3 of GoI/MoD letter dated 27.12.2012 confirms that closure as it states “ Subsequently, after dismissal of SLP by the Hon’ble Supreme Court, the above direction of the Kerala High Court was implemented by this Ministry, re-fixing the pay of the petitioner w.e.f. 1.1.1986 …..”

16.       Division Bench of the Kerala High Court dismissed WA 518 of 1999 filed by UoI challenging the judgment of the Single Judge of the same Court in OP 2448 of 1996. The Single Judge’s judgment reads (on page 3) “Under these circumstances, the respondents 2 & 3 are directed to re-fix the pay of the petitioner with effect from 1-1-1986……”  and not as on 1.1.1986 as quoted in para 8 of the GoI/MoD letter dated 27.12.2012.     

Compliance or Defiance
17.       There has been no compliance with the judicial pronouncement as so piously (and sanctimoniously) stated. Consider the premeditation which is brought out in the next and final part.   

(a)        The Fifth Central Pay Commission Report states, in Part VII, Para 147.2 on page 1903, that the strength of the Armed Forces officers of the ranks from Captain to Brigadiers (and equivalents) were as follows: -

Rank
Army
Navy
Air Force
Brigadier
796

371
152
Colonel
3310
587
Lt Colonel
3794
1191
1791
Major
13889

3000#
3645
Captain
11000*
2300@
Total
32789
4562
8475

*interpolated from the combined figures of Capts and Subalterns
# interpolated from the figures for Lt Cmdrs and below
   @ interpolated from figures for Flt Lts and below           

18.       So, with due respect to abacus or computer wielding experts, the following is just one aspect of the pre-meditated (in the worst case scenario) or unintended (in the most compassionate scenario) disrespect for the judgments and orders of the Courts as GoI/MoD appears to have decided that Rank pay will be made applicable to appropriate rank as on 1.1.1986.

Average arrears (per officer as paid by PCDA (O)
Rs 1, 00, 000
1, 00, 000
1,00, 000
Arrears of Rank pay per Service (crores)
Rs 327.89
Say Rs 328 crores
Rs 45.62
Say Rs 46 crores
Rs 84.75
Say Rs 85 crores
Total arrears
Say Rs 459 crores
Interest @6% p.a. from 1986 to 2010
Rs 28 crores x 24 years
= Rs 673 crores
Subsequent enhancement of Pension for a like number of officers for 45600 officers
Rs 250 crores (at 50% of Basic Pay)
Therefore Public Exchequer will pay from 1.1.86 to 8.3.2010
Arrears Rs 459 crores + Interest Rs 673 crores
= Rs 1132 + crores for 24 years
+ Pension Rs 250 crores + Rs 150 crores interest
= Rs 400 crores
Or Rs 1532 crores

Add 6% for E & OE and tantalisingly it is Rs 1624 crores

The Abuse of Truth: So,why do I ask myself the following questions

(a)               Was it a pre-meditated intention of the Concerned Ministries before filing the IA No.9 that total outgo would be restricted to Rs 1623.71 crores if the Hon’ble Supreme Court upheld its Order of 8th March 2010?

(b)               Had they decided to do that by paying arrears only to officers holding ranks of Captain to Brigadiers as on 1.1.1986?

(c)                And only till 31.12.1995?

(d)               And not to officers promoted to Captain (and equivalent) after 1.1.1986?

In Conclusion

Effect of interest from 1.1.2006:

Arrears Rs 459 crores + Interest Rs 196 crores = Rs 655 crores + Pension Rs 250 + 90 crores = Rs 340 crores.

So total outgo = Rs 995 crores.

As my mathematics teacher used to write after solving a problem - Q. E. D

Jai Hind



3 comments:

  1. I wish MOD/CGDA had requested either INFOSYS or ACCENTURE or for that matter any IT co like TCS to assist MOD in sorting out the Arrears of Rank pay case, the calculations etc, they would have done it gladly( may be even without charging) a penny for the sake of veterans. And they would have done it in matter of weeks if not days. But then, the CATs will be out of the bag & veterans will get their rightful dues...Lt Col (RETD) JRF D`Souza.

    ReplyDelete
  2. Para 10 of the blog-post quotes the judgement of the Hon'ble Kerala High Court as follows, "“In Chapter 30, we have recommended the method of fixation of pay in proposed scales for civilian employees. We recommend that the same method may be adopted for fixation of pay of armed forces personnel also. Since rank pay is a separate element for officers upto the rank of Brigadier and equivalent, the same may be taken into account, while fixing pay in the integrated scale of pay recommended by us".

    It appears to be part of IV CPC Report as quoted in the GOI affidavit or in the judgement.

    Regardless, what does "taken into account" mean exactly? Does it imply rank pay as on 01 Jan 86 should also have been added to the sum of BP+DA+IR+20%BP as on 01 Jan 86 for fixation instead of which GOI subtracted it from the sum??

    If so, only the subtraction has now been rectified in the Govt. order following the judgement of the Hon'ble Supreme Court. What about the aspect of taking the RP into account by adding it to the emoluments as on 01 Jan 86? I had sought to point out this here.

    ReplyDelete
  3. Dear Sir ,It is indeed very enlightening to go through your analysis of the problem faced by the veterans of the services due to the manipulation by the MOD functionaries at different stages of the rank pay case ! God bless you !

    ReplyDelete