Saturday 23 March 2013

Reply to RTI dated 21.1.2013 - Part III (Concluded)



Part III – RTI

Please note:

  1. Flagging of enclosure and Dairy Numbers are shown in parenthesis as (Flag ‘A’)/ (Diary Number…..).
  2. Italics are used by this author to draw attention of readers to certain aspects and contradictions.
  3. Otherwise this is faithful re-production of reply to RTI application dated 21.1.2013 vide No. 35(1)/2013/D (Pay/Services) dated 11th March 2013 received on 19th March 2013 by ordinary parcel post.
  4. Figures provided by CGDA etc vide UO note and Annexures mentioned were posted on this blog earlier. Please co-relate and do not raise doubts/ ask questions.  
  5. None of the Enclosures mentioned were provided. An appeal is being filed in the next few days for being provided with the Enclosures.
  6. Lines underlined are by the officials of MoD and not by this author.
  7. This is the final part of the notes on MoD File No. 34 (6)/2012 – D (Pay/Services)

---------------------------------
-67-
Ministry of Defence
D (Pay/Services)

            Reference preceding notes.

2.                  Pursuant to the note 64, a meeting was held in the office of AS (A) on 6.12.2012 to discuss the finalisation of DGL regarding implementation of the Supreme Court Judgement dated 4.9.2012 in the Rank Pay case. The meeting was attended by JS (E), Director (AG-I), Officers from Defence Finance and CGDA and LA (Defence).

3.                  LA (Defence) was of the view that the principle of fixation of pay has been decided by the Supreme Court according to which pay of the affected officers has to be re-fixed with effect from 1.1.1986       without deducting the Rank Pay. This principle has to be followed for re-fixation of pay of the affected officer in IV CPC, as well as V CPC.

4.                  Based on the aforesaid opinion of LA (Defence) and deliberations held with reference to the issues raised in note 63, the following decisions were taken:

(i)                 Letter dated 6.12.2012 (Encl 66A) to be given by hand to the representative of CGDA which contains the observations of MoD with reference to the DGL submitted by CGDA (Encl 59A).
(ii)               CGDA to prepare a revised DGL keeping in view the observations of the MoD contained in letter dated 6.12.2012 and the legal opinion expressed by LA (Defence) as stated in Para 3. The revised DGL of CGDA must be submitted to Defence Finance and LA (Defence) for vetting and copy of the same must be endorsed to MoD for examination on 6.12.2012 itself positively.
(iii)             The proposed DGL of the CGDA duly vetted by Defence Finance and LA (Defence) will be put up for deliberations in the meeting to be taken by Defence Secretary on 7.12.2012 at 3.30 pm which will be attended by FADS, CGDA, AS (Law), LA (Defence), officers from MoF and MoD.
(iv)              CGDA should also make rank-wise calculations of the minimum and the maximum pay scales based on the proposed revised scale (written by hand) and submit the same to MoD duly vetted by Defence Finance on 6.12.2012 positively.

Submitted for kind perusal and approval of AS (A).

Sd/___________________
(Praveen Kumar)
Director (AG-I)
6.12.2012
JS (E)
                        Sd/---------------
                        6/12/12

AS (A)              Sd/-------------------- 6/XII

JS (E)               Sd/--------------------- 6/12/12

Dir (AG-I)         Sd/---------------------- 6/12/12

SO/P/S           Sd/---------------------- 6/12

-68-
Issue ------------------------------------------------ Encl 68/A-
-69-
Issue ------------------------------------------------Encl 69/A-
-70-
Issue---------------------------------------------Encl 70/A-
-71-
Receipt--------------------------------------------------Encl 71/A
-72-
Receipt--------------------------------------------------Encl 72/A
-73-
Receipt------------------------------------------------Encl 73/A
-74-
Receipt------------------------------------------------Encl 74/A
-75-
Receipt--------------------------------------------------Encl 75/A
-76-
Receipt--------------------------------------------Encl 76/A
-77-
Issue---------------------------------------------------Encl 77/A
-78-
Receipt                                                                         Encl 78A
-79-
Ministry of Defence
D (Pay/Services)

                        Reference preceding notes.

2.                  This case related to implementation of Supreme Court Order dated 04.09.2012 passed in I.A. No. 9/2010 [Flag – S.C. Order dated 04.09.2012 of LF No. 1] in Transfer Petition No. 56/2007 relating to Rank Pay case.

3.                  The case in brief is as under:

(a)               In 1996, one officer Major A.K. Dhanapalan (Retired) filed a Petition O.P. No. 2448/96 in the High Court of Kerala praying that his pay be fixed in the Rank of Captain as on 1.1.1986 without deducting the amount of Rank Pay of Rs 200/- from his emoluments and that the Rank Pay appropriate to his Rank should be paid to him over and above the pay so fixed.

(b)               The Single (Judge) Bench of Kerala High Court decided the case in favour of the Petitioner vide its Order dated 05.10.1998 [Flag – Kerala HC Single Bench Judgement dated 05.10.1998 of LF No.1]. The operative part of which reads as under:
Rank Pay is something which has been given to the Army officers in addition to the existing Pay Scales. That it is not an amount which has to be deducted in order to arrive at the total emoluments which an Army officer is entitled to get.

Under these circumstances, Respondents 2 and 3 are directed to refix the Pay of the Petitioner with effect from 1.1.1986 without deducting the Rank Pay of Rs 200/- as has been done by the Respondents 2 and 3.”

(c)                The above Order was challenged before the Division Bench of the Kerala High Court vide W.A. No. 518/1999 by the Department. The Division Bench of the Kerala High Court vide its Order dated 04.07.2004 [Flag – Kerala H.C. Division Bench Judgement dated 04.07.2003 of L.F. No. 1] decided against the Department and dismissed the Appeal. The operative part of the Order is as under:

“…… 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 the Army officers, the Rank Pay shall also be added to the Substantive Pay. That is what has been directed in the impugned Judgement. Therefore, there is no merit in the Appeal. The  Appeal fails, dismissed.”    

(d)               The Petition for a Special Leave to Appeal was filed by the Union of India before the Supreme Court of India vide CC 5908/2005. But the same was dismissed on 12.7.2005 [Flag – Supreme Court Order dated 12.07.2005 of LF No.1] by the Supreme Court on account of inordinate delay of 561 days. The Department then implemented the Kerala High Court Order dated 05.10.1998 in respect of major (Retd.) A. K. Dhanapalan.

(e)               Subsequently, a number of Writ Petitions were filed in various High Courts seeking similar relief as was given to Major (Retd.) A.K. Dhanapalan by the Kerala High Court. In the circumstances, the Department then filed Transfer Petition (C) No. 56/2007 titled UoI & Ors Vs. N.K. Nair & Ors before Supreme Court seeking transfer of all such Writ Petitions pending before various High Courts. During the pendency of the Transfer Petitions, more Petitions were filed directly in the Supreme Court, seeking the benefit granted to Major (Retd.) A. K. Dhanapalan and these were tagged together with the Transfer Petition for adjudication. Supreme Court disposed off these Petitions on merit vide order dated 08.03.2010 [Flag – Supreme Court Order dated o8.03.2010 in LF No.1] operative portion of which is as under:

“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.” 

(f)                 Union of India subsequently filed I.A. No.9/2010 before Supreme Court praying to recall its Order dated 08.03.2010 contending that financial implications are approximately Rs 1623.71 crore and that Pay was correctly fixed as per recommendations/implementation of IV CPC. The Supreme Court disposed off I.A. No. 9/2010 on 04.09.2012 [Flag – Supreme Court Order dated 04.09.2012 of LF No. 1] with the following order:

“On thoughtful considerations of the entire matter, we are satisfied that the Order dated March 8, 2010 does not require any modification or variation save and except the interest part……………… We direct that the interest shall be paid by Petitioners to the Respondents at the rate of 6% per annum from January 1. 2006 instead of January 1, 1986. It is clarified that this Order shall govern all similarly situated officers who have not approached the Court and also those who have filed Writ Petitions which are pending before various High Courts/Armed Forces Tribunal.”

(g)               On receipt of the Supreme Court order dated 04.09.2012, views of the Solicitor General was sought. Solicitor General rendered the legal opinion which can be seen at Flag ‘X’ – Opinion of SG]. He advised in brief that:

“5.1…….. Order dated 4.9.2012 has to be implemented by the Querist in respect of the persons referred to in the Order in the same manner as the Court’s order was implemented in the case of Major Dhanapalan (the Petitioner before the Kerala High Court).

“5.4……………….. Once the revised rats is determined, the legal consequences thereof vis-à-vis payment of arrears which are determined on the basis of pay including Rank Pay would naturally follow.”                                                                                  
(h)               With the approval of the Hon’ble RM on note 16, the file was endorsed to Ministry of Finance on 05.11.2012 for concurrence for implementation of the Order of Supreme Court dated 04.09.2012.

(i)                 The Ministry of Finance, while agreeing ‘in principle’ to implement the Order dated 04.09.2012 of the Supreme Court, has given certain observations and sought action/views of MoD on those observations. The views of MoD on each of the observations are placed opposite at Flag ‘Y.’

(j)                 The CGDA has submitted a DGL [See Flag ‘Z’] in the matter the salient provisions of which are as under:

1)                 The provisions of this letter will be applicable to all the officers who were in service as on 01.01.1986 in the rank of Captain to Brigadier and their equivalents in Air Force and Navy.
2)                   In partial modification of the regulation for fixation of initial pay in the revised scales stipulated in SAI/SNI/SAFI 1/S/87, with effect from 01 January 1986, the pay of the officers will be re-fixed in the Integrated scale as per the Orders already existing in the ibid SAI [Flag – SAI 1/S/87 of LF No.1]/SNI/SAFI without deducting Rank Pay. The relevant provisions of SAI/SNI/SAFI 1/S/87 stand amended to that extent.
3)                 If, after the re-fixation of pay, in case the pay so computed is more than the maximum of the revised scale, the difference shall be allowed as personal pay to be absorbed in future increases in the pay. The relevant provisions of Para 6 (c) of SAI 1/S/87 and corresponding provisions of SNI and SAFI stand amended to that extent.
4)                 Minimum pay in the Integrated Scale for each Rank after completion of prescribed years of service stipulated in Para 6 (a) (ii) and Integrated Pay Scale prescribed in Para 3 (a) (i) of SAI 1/S/87 and corresponding Para of SNI/SAFI will not undergo any change.
5)                 After the re-fixation of pay as above, the pay of the officers as on 01.01.1996 and as on 01.01.2006 will be revised, if there is a change in pay on 31.12.1995 and 31.12.2005 respectively, as per the existing provisions of SAI [Flag SAI 2/S/98 and SAI 2/S/08 of LF No. 1] /SNI/SAFI of 1998 and 2008 as amended from time to time.
6)                 Method of fixation of pay on 01.01.1996 will not undergo any change.
7)                 Grade Pay will also not undergo any change on re-fixation of pay after 01.01.2006.
8)                 Dearness  Allowance, Interim Relief, Dearness Pay and Non-Practising Allowance in respect of AMC/ADC/RVC officers will be revised.
9)                 Interest @ 6%  per annum on the arrears will be paid with effect from 01.01.2006.

4.         It is now proposed that we may endorse the file to the Ministry of Finance for concurrence of the DGL submitted by CGDA.    
                         
Sd/----------------------------------
(Praveen Kumar)
Director (AG-I)
10.12.2012

JS (E) Sd/______________ 10/12/12


AS (A)                                                                        -80-
Case in respect of V CPC be examined & put up separately.

                                                            Sd/________________
                                    10/XII
FA (DS)
-81-
Addl FA (M?) to also see. Is it as per decisions taken in the meeting
held by Defence Secretary on 7/12?

                                                            Sd/___________
                                                            11/12




-82-

Re kind posers from FA (DS) as at above

            I have gone through the observations and notings of MoD as at 79/N ante onwards . The proposed course of action are as per the discussions taken in the meeting, chaired by the Defence Secretary on 07/12/12.

2. Queries of MoF as at 18/N ante, have been attempted to be replied by MoD, as at F/Y, which seem to be in order.

3. The revised DGL, furnished by CGDA on 10/12/2012 as at F/Z seems to be in order and require approval of MoF for implementation of Supreme Court order dtd 04/9/2012 in all respects.

4. May kindly like to peruse, for soliciting approvals of Defence Secretary and Hon’ble R.M.

5. After approval of Hon’ble RM, the reference has to be sent in RF of Def (Finance)

                                                                                    Sd/--------------------
                                                                                                11/12/12
                                                                                    (JS & Addl FA (M)

FA (DS)            Sd/---------
                        11/12

Defence Secretary      Sd/--------------------

AS (A) Sd/-----------------

JS (E)   Urgent
            Sd/-----------

D(AG-I) As discussed

-83-

Reference preceding notes.

2.         This is regarding the judgment/order of the Supreme Court dated 4.9.2012 in the rank pay case of Union of India & others Vs. N.K. Nair & others.

3.         After the IV Central Pay Commission, fixation of initial pay in the revised scale was regulated as follows:           

            (i)         An amount representing 20% of the basic pay in the existing scale was added to the existing emoluments of the officer.

            (ii)        After the existing emoluments were so increased, an amount equivalent to rank pay, if any, appropriate to the rank held by the officer on 1.1.1986 at the rates prescribed by the Government was deducted. Thereafter the officer’s pay fixed in the revised scale at the stage net above the amount thus computed.   

4.         The fixation of pay deduction of rank pay as elucidated above was challenged in the various Courts by the officers from the Army, Air Force and the Navy. The Writ Petitions were transferred to the Supreme Court.

5.         The Supreme Court delivered a judgment in the matter on 4.9.2012 with the following directions:

(i) Order dated 8.3.2010 of the Supreme Court which upheld the legality of the judgment of the Kerala High Court for re-fixation of pay without deduction of rank pay does not require any modification save and except the interest part.

(ii) Interest shall be paid by the Petitioners to the Respondents @ 6% per annum from January 1, 2006 instead of January 1, 1986.

(iii) This order shall govern all similarly placed officers who have not approached the court also those who have filed writ petitions which are pending before various High Courts/Armed Force Tribunals.

(iv) Arrears of pay with interest as directed above shall be paid to the concerned officers expeditiously and positively within twelve weeks from the date of the order. 

6.         It has been decided by the Ministry of defence in consultation with the Ministry of Law and the Ministry of Finance to implement the aforesaid order of the Supreme Court by re-fixing the pay of the affected officers of the armed forces without deduction (of) the rank pay as directed by the Apex Court. The Solicitor General of India has also opined that the Supreme Court order has to be implemented within the stipulated time frame of 12 weeks from the date of the order by re-fixing the pay of the affected officers with effect from 1.1.1986 without deducting rank pay in terms of the orders passed by the Kerala High Court and the Supreme Court.

7.         Although the Ministry of Finance have agreed “in principle” for implementation of Supreme Court judgment, they have given certain observations and sought comments from MoD. MoD has prepared point-wise reply to those observations which can be seen at Flag ‘Y.’ Def (Fin) has found this reply to be in order as seen from Note 82 ante.

8.         With the approval of RM on Note 40, following actions have been taken:

            (i)         Govt. letter has been issued on 26.11.2012 conveying the decision of the Government of India to implement the judgment of the Supreme Court dated 4.9.2012.

            (ii)        Application has been filed in the Supreme Court on 27.11.2012 requesting for giving 12 weeks time for implementation of Supreme Court order dated 4.9.2012.

(iii) DGL has been obtained from CGDA (Flag ‘Z’) regarding modalities and methodology of payment to the affected officers of the armed forces and the same has been vetted by Def (Fin).


9.         It is now proposed that we may endorse the file to Ministry of Finance for concurrence of the DGL submitted by CGDA (Flag “Z”) and vetted by Def (Fin) with the approval of FA (DS). The salient features of DGL of CGDA are (i) re-fixation of pay in the integrated pay scale without deducting rank pay (ii) pay so computed if in excess of the maximum of revised scale to be allowed as personal pay (iii) minimum pay in integrated scale will not change (iv) integrated pay scale will not change (v) Grade pay will not change (vi) method for fixation of pay on 1.1.96 will not change (vii) interest @ 6% per annum on arrears will be paid from 1.1.2006 (viii) compliance of Supreme Court order dated 4.9.2012 is consequent to implementation of recommendations of IV CPC.

10.             Submitted for kind approval of RM.

Sd/-------------------------
11/XII
(Shankar Aggarwal)
Additional Secretary (A)
11.12.2012
Defence Secretary
                                                                                                Sd/-------------------------
                                                                                                            11/12/12
                                                                                                SHASHI KANT SHARMA
                                                                                                Defence Secretary

RM                                                                                          Sd/------------
                                                                                                            11/12

Def Secy                      Sd/---------------
                                    11/12

AS (A)                          Sd/---------------- 11/XII

JS (E)                           Sd/------------------- 11/12

JS (Pers) MoF             Sd/----------------- 11/12

Deptt of Exp               Sd/---------------11.12.12

DS (E.III A)                  Sd/--------11.12.12

US (III.A)
Received at 6.25 pm Pl put up today
                                    Sd/---------------------- 11/12

Note 84 Received

Note-85

Note 84A of MoF was received in MoD on 17/12/12/A/N and copy of the same was endorsed to MoD (Fin).

2) MoD (Fin) have given their views on the note of MoF which is flagged as BBB.

3) Views of LA (Def) are required urgently on the view furnished by MoD (Fin).
4) The file has to be endorsed to MoF on 18/12/12.

5) Hence LA (Def) may kindly give his legal opinion in the matter by 18/12/12/, 11 a.m. positively.

Sd/_________________
17/12/12
Dir (AG-I)
MoD
JS/E                Sd/--------------------- 17/12/12

LA (Def)
Urgent received at 6 pm. Pl diarise and put up to L.O. (RS)
                                                                                                Sd/----------------
                                                                                                17/12/12
LO (RS)

-86-
Dy. No. 2561/XII/LA (Def)
Ministry of Law & Justice
Department of Legal Affairs

            The matter relates to implementation of the Hon’ble Apex Court’s order dated 04.09-2012 in I.A. No. 9 of 2010 in Transfer Petition (C) No. 56 of 2007 titles UoI & Ors Vs. N.K.Nair & Ors.
           
2.         It may be relevant to mention here that the administrative Ministry had earlier felt some administrative difficulties in implementing the said order and sought opinion of Ld. Solicitor General (SG). The Ld. SG vide his opinion dated 17.10.2012 advised inter-alia that the order passed by the Hon’ble Supreme Court is final and binding. According to Ld. SG, the order of the Apex Court is to be implemented by the administrative Ministry in the same manner as the order has been implemented in the case of Major A.K. Dhanapalan.

3.         With regard to the implementation of the order, a number of meetings held in the administrative Ministry. Last such meeting was held on 07.12.2011 under the Chairmanship of the Defence Secretary in which the Addl. Secy. (Sh. M.K. Sharma) was also present amongst others.  

4.         A draft sanction letter (F/Z) proposing to implement the Apex Court’s order was forwarded vide note 83-84/ante with the approval of Hon’ble Raksha Mantri (RM) to the Department of Expenditure (Ministry of Finance) for their concurrence. The salient features of the draft sanction letter as per para 9 of the said note are: (i) re-fixation of pay in the integrated pay scale without deducting rank pay (ii) pay so computed if in excess of the maximum of revised scale to be allowed as personal pay (iii) minimum pay in integrated scale will not change (iv) integrated pay scale will not change (v) Grade pay will not change (vi) method for fixation of pay on 1.1.96 will not change (vii) interest @ 6% per annum on arrears will be paid from 1.1.2006 (viii) compliance of Supreme Court order dated 4.9.2012 is consequent to implementation of recommendations of IV CPC.

5.         The draft sanction letter forwarded by the administrative Ministry was considered in the Department of Expenditure (Ministry of Finance) vide MoF, DoE ID No. 187654/E-IIIA/2012 dated 17.12.2012 (F/ZZ). One of the significant observations of the Department of Expenditure relates to the inability of the Ministry of Defence to provide a copy of the Government sanction issued by them for implementation of the order in the case of Major A.K. Dhanapalan and the consequent inability of the Department of Expenditure to see as to how the sanction was constructed to implement the Court’s order in the case of Major A.K. Dhanapalan. Besides, the department of Expenditure has also expressed their reservation with regard to grant of personal pay as proposed by the Ministry of Defence. In addition, the Department of Expenditure has considered that the Government sanction has to ensure the pith and substance of the judicial pronouncement, hence it is necessary to clearly mention as also the action taken by the Government to follow the same completely in the draft sanction letter, so that there is no dispute or ambiguity as to the proper implementation of the Court’s order. Keeping this in view, they have suggested a fresh construction in place of para 1 to 2 (e) of the draft sanction letter proposed by Ministry of Defence which is placed at F/ZZZ. They have further suggested to consider the suggested modifications in consultation with CGDA, Defence (Finance) and also LA (Defence). The draft construction suggested by Department of Expenditure has also been forwarded to MoD (Finance) which in turn agreed vide their UO dated 17.12.2012 (F/BBB) with the same and suggested the administrative Ministry that after firming up the views as advised by Ministry of Finance, the matter may be sent to them for forwarding to Ministry of Finance again.   

6.         We have perused the matter. It is not clear from the referring note as to what extent the suggestions of the Department of Expenditure as contained in its ID note dated 17.12.2012 (F/ZZ) and the fresh construction provided by them to substitute para 1 to 2 (e) of the draft letter, are acceptable to the Ministry of Defence. Further, it is also for consideration as to how the interest of officers who became Captain subsequent to 01.01.1986 and their equivalents in Air Force and Navy, and thei pay fixed after deducting rank pay, is to be protected. (marked “‘A” by Addl Secy. Please see note 87 below)

7.         In view of the above, though in the absence of the sanction issued by the administrative Ministry to implement Kerala High Court’s order dated 05.10.1998 in the case of Major A.K. Dhanapalan, it may not be possible to ensure that the proposed implementation of the order dated 04.09.2012 is strictly in accordance with the principles adopted in implementation of the Court’s order in the case of Major A. K. Dhanapalan. However, taking into consideration the urgency involved in the matter particularly apprehension of probable contempt, we do not see any legal or constitutional objection in general to the observations/suggestions of the Department of Expenditure as also agreed to by Defence (Finance). Further, the said observations may also be independently considered by the administrative Ministry and if found acceptable, may be incorporated in the revised draft sanction letter. The draft sanction letter so revised may, thereafter, be forwarded to Defence (Finance) for onward submission to the Ministry of Finance. Before we conclude, it is considered necessary to suggest the administrative Ministry to ensure that the implementation of the Apex Court’s order dated 04.09.2012 in the matter is strictly in the same manner it was done in the case of Major A.K. Dhanapalan.

Sd/-----------------
(Col. Rajiv Sachan)
Legal Officer
18.12.2012
L.A. (Defence) sd/-----------------------
                              18/12/12

Addl. Secy. (Sh. M.K. Sharma)                           



-87-
                                                      I agree. ‘A’ above needs consideration.       
The M/O Defence must ensure that the manner applied in the case of Maj AK Dhanapalan is strictly followed in this instant case

                                                                                                                  Sd/---------------------------
18/12/12

LA (Def)           Sd/-----------------
                  18/12/12

LO (RS)           Sd/-----------------
                        18.12.2012
                        1400 hrs

-88-

            The matter under consideration in this file is regarding implementation of the Hon’ble Supreme Court order dated 04.09.2012 in the matter of Rank Pay. The matter was considered in MoD in consultation with Defence (Finance) and CGDA and a proposal alongwith a DGL duly concurred by FA (DS) and approved by RM was referred to MoF for their concurrence vide Note 83 ante.

2.         On examination of the aforesaid proposal and the DGL, the MoF, vide their ID Note dated 17.12.2012 (Encl/84A) have raised certain observations as under: -

            (a) Non-submission of Govt. sanction letter for implementation

            i.          MoD has not been able to provide a copy of the Govt sanction issued by them for implementation of the order dated 5.10.1998 of the Hon’ble Kerala High Court in the case of Major A.K. Dhanapalan.

            (b) DGL

            i.          The order of the Hon’ble Kerala High Court is for re-fixation of pay as on 1.1.1986 without deduction of rank pay as admissible to an officer as on 1.1.1986. This particular provision of the Special Army Instructions of 1987 which provides for such a deduction is contained in para 6 (a) (ii) thereof. Therefore, in essence, the judicial pronouncement is to modify this provision so as not to deduct the rank (word ‘pay’ is missing). Accordingly, the order to be issued by the Government in compliance of the Hon’ble Supreme Court order dated 4.9.2012 needs to provide for modification of the provision, in so far as fixation of pay as on 1.1.1986 is concerned.   

            ii.         The judgment is for fixation of pay in the revised scale (integrated scale of pay) as on 1.1.1986 without deduction of the rank pay and if after non-deduction of rank (word ‘Pay’ is missing), the pay exceeds the maximum of the integrated scale, no Personal Pay could be allowed because no such provision flows from the judgment of the Hon’ble Supreme Court dated 04.09.2012 read with their earlier dated 08.03.2010 and the order dated 5.10.1998 passed by the Hon’ble Kerala High Court. In fact, para 6 (c) of the Special Army Instructions of 1987 clearly provides that in such cases the pay will be fixed at the maximum of the revised scale. Therefore, no deviation from this provision, especially because the same does not follow the court order, may be allowed, lest there be repercussions for complete relaxation of the said para 6 (c) of the Special Army Instructions from other quarters.      

iii.                Considering that the Govt. sanction has to ensure the pith and substance of the judicial pronouncement, it is necessary to clearly mention as also the action taken by the Government to follow the same completely in the Draft Govt. letter so that there is no dispute or ambiguity as to the proper implementation of the court order.
    

MoF have advised MoD that in place of para 1 to 2 (e) of the draft proposed by MoD, a fresh construction has been suggested. MoD may like to consider the suggested modifications in consultation with CGDA, Defence (Finance) and also legal Adviser (Defence). The factual veracity of the highlighted portion of the para 3 of the suggested draft may be particularly ensured by the MoD as the MoD has not been able to provide a copy of the Govt. sanction issued by them to implement the court order in case of Major AK Dhanapalan. MoD may revise the draft based on their consultations and thereafter, they may send the same to MoF for putting up the matter before the Hon’ble FM.  

3.         It is clarified that MoD has not issued any Govt sanction for the implementation of the order of the Hon’ble Kerala High Court dated 5.10.1998 in case of Major AK Dhanapalan. The requisite sanction order was issued by AG Branch of AHQ vide their letter dated 26.8.2005 after the proposal of AHQ was approved by MoD and concurred by Defence (Finance). The relevant file in the matter is enclosed herewith [F. No. B/25511/AKD/PS-3(A)].  

4.         As advised by MoF, views of Defence (Finance), CGDA and LA (Defence) have been obtained on the observations of MoF and these are available at Encl 86/B, F/87A, and Note 86 ante respectively. Defence (Finance), CGDA and LA (Defence) have concurred with the views of MoF regarding the modifications in the DGL including that relating to Personal Pay.  

5.         Regarding the factual veracity of the highlighted portion of para 3 of the draft suggested by MoF, CGDA has confirmed vide UO dated 18.12.2012 (Encl 87/A) that payment was made by PCDA (O) Pune as per the sanction for the charged expenditure for Rs. 28,031/- issued by AHQ/AG Branch vide their letter No. B/25511/AKD/AG/DV-5/PS-3 (a) dated 26.8.2005 to implement the court order in case of Major AK Dhanapalan.

6.         Keeping in view the opinion of Defence (Finance), CGDA and LA (Defence) and the urgency involved in the matter particularly apprehension of probable contempt, it is proposed

            a.         The observations of MoF may be incorporated in the DGL now proposed by MoD to MoF. The revised DGL incorporating these observations is placed opposite.

            b.         The protection of pay by way of Personal pay beyond the maximum on the integrated scale of pay in respect of the affected officers, who will be senior Brigadiers and their equivalents in the Air Force and Navy, may be reconsidered by MoF separately to preclude any possibility of contempt in the matter.

  1. The proposals given in para 6 above are put up for kind approval of RM after which the matter would be referred back to MoF for their concurrence of the revised DGL (F/DRAFT DGL) (88/B).
Sd/-------------------------------
(Praveen Kumar)
Director (AG.I)
18.12.2012
JS (E)               Sd/----------------
                                    18/12/12


AS (A)              Sd/------------------------     
                        18/XII

Defence Secretary                              Sd/-----------------------
                                                                        18/12/12


RM                  Sd/------------------
                        18/12

-89-

May like to endorse to Min of Finance.

                        Sd/---------------------
                        JS (E)
                                                                                    18/12/12

JS & Addl FA (M)

                                    No comments/initials or signature

-90-
Ministry of Finance
Department of Expenditure

Subject:          Implementation of the Order of 4.9.2012 passed by the Hon’ble Supreme Court – IA No. 9 of 2010 – Union of India Vs N.K. Nair & Others – Rank Pay Case

            Ministry of Defence may please refer to their Notes 88/N recorded on their F. No. 34(6)/2012 – D (Pay/Services), seeking concurrence of this Ministry on the draft Government letter (sanction letter) for implementation of the aforesaid order of the Hon’ble Supreme Court.  

2.         The Note received from the Ministry of Defence (Finance) recorded on page 14 dated 18.12.2102 of their file n. 8 (13)/2012-AG/PA also refers.

3.         This Ministry concurs in the draft sanction as revised by the Ministry of Defence, based on the suggestion made by this Ministry, which has also been vetted by LA (Defence) vide Note 86 and 87 of the file of the Ministry of Defence ibid. However, LA )Defence) also made a point, as made by this Ministry, in regard to the non-availability of the sanction issued by the Ministry of Defence to implement the order dated 5.10.1998 in case of Mj. Dhanapalan. Therefore, Ministry of Defence may ensure the factual accuracy of para 3 of the proposed draft sanction, as advised by this Ministry earlier also as per the ID note of even no. dated 17.12.2012.    

4.         The estimated financial implications as worked by the Ministry of Defence are to the tune of Rs 861 crore. However, as advised by this Ministry in para 3 (b) (iii) of ID note of even no. dated 9.11.2012, the Ministry of Defence have not indicated as to how far they are in a position to meet the additional cost from their existing budget. Ministry of Defence is advised to make all efforts to locate savings from their existing budget to meet the coast to keep additionality as low as possible.

5.         This issues with the approval of the Finance Minister.

Sd/-----------------------------
                                                                                                            (Amar Nath Singh)
DS (E-IIIA)      


Ministry of Defence (Shri Sameer Kumar Khare, Joint Secretary)
MoF, DoE ID No. 187654/E-IIIA/2012 dated 24.12.2012

Copy to: Ministry of Defence (Finance) (JS & Addl FA (M)


Part III Concluded







































































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