Please note that the Ld AG refers to a letter of 18.1.2013 from Chairman, CoSC and a SoC was sent on 2.4.2013 (Paragraphs 17, 18 & 25 refer). Also, CGDA has provided clarifications on 23.5.2013 Paragraph 37 etc).
So is there a second letter/SoC after the RM's directions of 14.6.2013?
* * * * *
OFFICE OF MR GOOLAM E. VAHANVATI,
ATTORNEY GENERAL FOR
INDIA
MLJ No. AG
QW/2013-ADV. ‘C” DT. 1408.2013
AG Dy. No.
325/AG/OPIN DT 14.8.2013
Subject: Implementation of Supreme
Court order dated 4.9.2012 –
Rank Pay Case (Major
A. K. Dhanapalan, Retd. Reg
1. I have
perused the file. My opinion has been sought on the following issues:
(i) Whether
the MoD orders dated 27 Dec.12 have modified the Special Army Instructions
1/S/87 and corresponding Navy and Air Force Instructions in so far as it
relates to deduction of Rank Pay and direct to re-fix the initial pay of the
concerned officers of the three services in the revised scale (integrated
scale) as on 1.1.1986. Whether the term ‘with effect from 1.1.1986’ should be
used as given in the Single Bench’s order dated 05.10.98 passed in the High
Court of Kerala, instead of using ‘as on 01.01.1986’? What consequences this
change in term will entail?
(ii) Whether
the minimum pay for each rank given in Para 6 (a) (ii) of SAFI 1/S/87, needs to
be re-fixed/changed?
(iii) Whether
the Basic Pay ceiling of integrated Scale in IV CPC for officers up to
Brig/equivalent, which is Rs 5100/- also needs to be modified to give effect to
the Court orders?
(iv) Since
the treatment to Rank Pay while pay fixation carried out in 5th CPC
was similar to that of the 4th CPC, whether orders of the Apex Court
dated 04.09.2012 be applied to all subsequent Pay Commissions i.e. V and VI CPC
under such circumstances.
2. The above
queries have arise in the following factual background:
FACTUAL BACKGROUND
3. By resolutions dated 04.10.1986 and 18.03.1987, the Ministry
of Defence, Government of India decided to accept the recommendations of IVth
Pay Commission relating to the structure of emoluments and allowances of
Commissioned Officers. These included creating of an integrated pay scale for
officers upto the rank of Brigadier and equivalent in the Navy and Air Force,
and for provision of rank pay in addition to pay in the integrated scale. The
decision was to operate retrospectively with effect from 1.1.1986.
4. One A. K. Dhanapalan, a retired Commissioned Officer (Major)
in the Indian Army, filed O.P. No. 2448 of 1996 before the High Court of
Kerala, claiming that while revising his pay, instead of adding Ran Pay to his
emoluments, the Government had deducted the same.
5. The Government justified the action of deducting Rank Pay on
the basis of instructions dated 26.05.1987, which provided in para 6 (a) (ii)
that rank pay could be deducted in order to fix the revised scale of pay at the
stage next above the amount arrived at.
6. The learned Single Judge, in its judgments dated 05.10.1998,
found that the Government has totally misunderstood the nature of rank pay, and
it was not justified in deducting the same while fixing the total emoluments
payable to an officer.
7. Accordingly, it was directed that the writ petitioner’s pay
would be re-fixed with effect from 1.1.1986 without deducting the rank pay of
Rs 200/-.
8. The Writ Appeal filed by Government of India against the
judgment of the Single Judge was dismissed by the Division Bench vide its
judgment dated 04.07.2003.
9. The Special Leave Petition filed by the Government of India
against the Judgment of Division Bench was dismissed by the Hon’ble Supreme
Court on 12.07.2005 on the ground of delay.
10. Thereafter, the judgment of the Single Judge was implemented
by the Government qua Mr. Dhanapalan, and an amount of Rs 28,031 was ordered to
be releases to him.
11. Subsequently, several writ petitions came to be filed before
different High Courts as well as before the Supreme Court, seeking similar
benefits as granted in Dhanapalan’s case. The Union of India moved a Transfer
Petition for transfer of all these matters to the Supreme Court.
12. On 08.03.2010, the Transfer Petition was allowed, and the
Hon’ble Supreme Court vide the same order also disposed off the writ petitions
directing grant of rank pay retrospectively with effect from 1.1.1986. In
addition, the Hon’ble Court also directed payment of interest @ 6% per annum.
13. Thereafter, the Union of India filed an I.A. for modification
of the order dated 08.03.2010, citing the huge financial implications involved
in implementing the same. Vide its order dated 04.09.2012, the Supreme Court
modified its order dated 08.03.2010 with respect to the interest part, and
directed that instead of from 1.1.1986, interest would have to be paid from
1.1.2006.
14. Thereafter, the matter was referred to the learned Solicitor
General for opinion, indicating certain difficulties in implementing the
Supreme Court order. The then learned Solicitor General in his opinion dated
17.10.2012 opined that the Supreme Court order has to be compiled with, and all
consequential benefits granted to the concerned officers.
15. On
27.12.2012, the Ministry of Defence has issued instructions for implementation
of the Supreme Court’s order. It has declared that Para 6 (a) (ii) of the
Special Instructions dated 26.5.1987 which permitted deduction of rank pay at
the time of fixing initial pay in revised scale is modified and no deduction
of rank pay is to be made. The
instructions also provide for granting certain consequential benefits and
interest after re-fixation of pay.
16. It is stated
in the file that an amount of Rs 320.06 crores has been paid till 5.7.2013 to
2820 serving and 31, 125 retired beneficiaries.
17. On 18.01.2013, the Chairman, Chiefs of Staff Committee
addressed a letter to the Hon’ble Defence Minister, raising certain issues that
have arisen in implementation of the Supreme Court order.
18. The matter was examined in the Ministry and the Services were
asked to send a detailed Statement of case in the matter which would be
examined in consultation with Ministry of Finance, Ministry of Defence,
Ministry of Law and Controller General of Defence Accounts. Accordingly, the
Services submitted a Statement of Case dated 02.04.2013, raising four issues.
19. These issues
have been responded to by the Ministry of Finance, CGDA, and Ministry of
Defence.
20. The Hon’ble Minister of Defence, taking note of divergent
views of the various issues, decided that the matter may be referred to me for
opinion. It is in this regard that the above noted four queries have been
raised for my opinion.
21. Before I answer the queries raised, it is important to state
that the Government must implement the Supreme Court’s order of granting the
same benefit to similarly situated officers both in letter and in spirit. The
Government cannot take a restrictive view of who is similarly situated, and
must grant benefit on the basis of the underlying principle affirmed by the
Supreme Court i.e. wherever rank pay has been deducted at the time of fixation
of pay, the deducting must be undone and pay fixed accordingly. Members of the
armed forces should not be forced to approach the Court for each individual
claim when the same has already been granted to all similarly situated officers
by the Hon’ble Supreme Court. This would be unfortunate.
22. With these
observations in mind, I shall now answer the queries raised for my opinion.
Query (I) Whether
the MoD orders dated 27 Dec.12 have modified the Special Army Instructions
1/S/87 and corresponding Navy and Air Force Instructions in so far as it
relates to deduction of Rank Pay and direct to re-fix the initial pay of the
concerned officers of the three services in the revised scale (integrated
scale) as on 1.1.1986. Whether the term ‘with effect from 1.1.1986’ should be
used as given in the Single Bench’s order dated 05.10.98 passed in the High
Court of Kerala, instead of using ‘as on 01.01.1986’? What consequences this
change in term will entail?
23. In the judgment dated 05.10.1998 passed by the Learned Single
Judge, the direction issued was as follows:
Rest
of the paragraph missing
24. Part of paragraph missing …..scale (integrated scale as on
1.1.1986 as per para 6 of the above instructions without deduction of Rank Pay
appropriate to the rank held by the officer on 1st January 1986 from
the amount worked out under para 6 (a0 (ii) thereof.”
25. According to the armed forces as mentioned in letter dated 18
January 2013 written by Chairman, Chiefs of Staff Committee, the change of
wording from “with effect from 1.1.1986” to “as on 1.1.1986” has led to the
following anomalies: -
(i) Officers promoted to the rank of
Captain and equivalent after 1.1.1986 have not been granted the benefit of
Court’s order, even though rank pay in their case had also been deducted at the
time of fixation of their pay in the integrated scale.
(ii) Re-fixation of pay in case of certain
Colonels and Brigadiers, the ceiling fixed in pay scale in terms of Para 6 (c)
of the instructions would lead to a situation where either complete benefit is
not granted to these officers, or there would even be reduction of pay in some
cases.
(iii) The Government has not granted benefit of
the Court’s order to those officers whose rank pay was deducted at the time of
implementation of Vth and 6th Pay Commissions.
26. The CGDA has opined that in this case, the affected officers
are those who were drawing pay in the rank of Captain to Brigadier as per 3rd
CPC on 31.12.1985 and whose pay was re-fixed as per SAI 1/S/87 and
corresponding Navy and Air Force Instructions on 01.01.1986 after deducting
rank pay. They submit that the wording “as on 1.1.1986” or “with effect from
1.1.1986” does not, in effect, make any difference. It has also been stated by
CGDA that the pay of officers commissioned after 1.1.1986 and officers promoted
after 1.1.1986 has been fixed with reference to rank and qualifying service,
and that no rank pay has been deducted while carrying out such fixation. They
have been admitted rank pay of the rank held, in addition.
27. The Ministry of Finance has stated in para 16.1. and 16.2. of
the document marked as Annexure XVI in the file that Special Army Instructions
dated 26.05.1987 do not provide for deduction of rank pay as the stage of
promotion subsequent to 1.1.1986 and that on a matter of fact, fixation of pay
on promotion is the revised structure subsequent to 1.1.1986 was never after
deduction of rank pay.
28. For the sake
of clarity, I may indicate what has been decided by the Court:
(i) Section II of Special Army Instructions
No. 1/S/87 dated 26.05.1987, deals with fixation and regulation of pay of
officers commissioned prior to 01.01.1986.
(ii) Para 6 of Section II deals with Fixation
of initial pay in the revised scales.
(iii) Para 6 (a) (i) provides that an amount
representing 20 percent of the basic pay in the existing scale shall be added
to the existing emoluments of the officer.
(iv) Para 6 (a) (ii) provides that after
adding the aforesaid 20 percent, an amount equivalent to the rank pay, if any,
appropriate to the rank held by the officer on 1.1.1986 will be deducted.
Thereafter, the officer’s pay will be fixed in the scale at the stage next
above the amount thus computed.
29. The Kerala High Court deduction of rank pay, in terms of Para
6 (a) (ii) to be unlawful, and this view has been upheld by the Supreme Court.
30. Thus, the effect of decisions of the Kerala High Court and the
Supreme Court is that at the time of fixation of pay in the revised scale, rank
pay should not be deducted. The underlying principle is that rank pay is an
emolument, and therefore, cannot be deducted when revised pay is fixed with reference
to the pay being drawn earlier.
31. The Government needs to implement the orders of the Supreme
Court in this spirit. It cannot confine the benefit of the orders to those
officers whose pay was fixed as on 1.1.1986 after deduction of rank pay in terms
of Para 6 (a) (ii). It must grant benefit to all those officers whose pay has
been fixed after deducting rank pay, whether as on 1.1.1986 or after 1.1.1986.
This must be done after properly verifying the facts.
Query (II) Whether the minimum pay for each rank given
in Para 6 (a) (ii) of SAFI 1/S/87, needs to be re-fixed/changed?
32. Para 6 (a) (ii) of the Instructions dated 26.05.1987 refers to
officers in the ranks of Captain, Major, Lt Colonel, Colonel and Brigadier and
indicates minimum pay in the integrated scale against each rank.
33. According to the armed forces, the minimum pay for each rank
needs to be revised after taking into account the non-deduction of rank pay in
terms of the Court’s order.
34. The CGDA has indicated that the minimum pay for each rank has not
been arrived at after deduction of rank pay. It was in fact a recommendation of
4th CPC. Minimum pay has not been depressed due to deduction of rank
pay. Further, there is no court order directing change in minimum pay for the rank.
35. The Ministry of Finance has indicated its agreement with views
of CGDA.
36. The issue of revision of pay scale did not arise and was not
decided in Major Dhanapalan’s case. The issue of the minimum pay scale does not
pertain to the real issue dealt with above. When the officer’s pay is revised I
implementation of the Court’s order, the minimum of the pay scale does not come
in the way, because if the pay has to be fixed at a stage next higher than the
minimum, the same can be done. There is no need to revise the minimum, if as
stated by the CGDA, it has been fixed on another basis.
Query (III) Whether
the Basic Pay ceiling of integrated Scale in IV CPC for officers up to
Brig/equivalent, which is Rs 5100/- also needs to be modified to give effect to
the Court orders?
37. The differing
views on this issue are as under:
ISSUE 3:
REVISING THE TOP OF INTEGRATED SCALE.
Armed
Forces Views: The top of the
integrated scale as recommended by Pay Commission was Rs 5000. However the
issue was further examined by the Government and it was decided to change the
integrated scale to Rs 2300-100-3900-150-4200-EB-5100. The services now contend
that the top of the scale of Rs 5100 should also be increased to remove the
effects of deduction of rank pay. They have drawn equivalence between Brig (on armed forces side) and DIG
(Police) on civilian side to draw pay comparison. It is submitted that while
DIG (Police) got Rs 6150 basic pay, the Brigadier’s pay in the integrated scale
ws Rs 4950 with an additional amount of rank pay of Rs 1200.
The services
point out that now with no deduction of rank pay, senior Cols and Brig would
not be able to get full pay fixation benefit (20% of emoluments) as in their
case revised emoluments go beyond the top of integrated scale from day one. The
Services have proposed to adjust the top of the scale suitably to relate the
original span of the integrated scale of 29 years as recommended by Pay
Commission. Grant of stagnation increments or personal pay to the concerned
officers have not been favoured by the services as they are not considered for
purpose of determining corresponding replacement scale in subsequent CPCs.
Amendment
Sought by Armed Forces. The
Armed Forces have asked that the anomaly can be resolved by enhancing the upper
limit of Rs 5100 in the integrated pay scale of IVth CPC, which has been
arrived at after making allowance for the Rank, to ensure effective
implementation of the Govt orders.
CGDA’s
views. CGDA has pointed
out that in order to benefit such officers an element of personal pay was
projected in the instant case to MoF. But it was not agreed to by Ministry of
Finance. In view of para 6 (o) of SAI 1/S/87 (Annexure XX) which states as
under: -
‘If the amount
so computed as at sub-para a (ii) above is more than the maximum of the revised
scale, the pay will be fixed at the maximum of the revised scale.’
The relevant
Service Instructions provide for maximum three stagnation increments upto the
rank of Brig, after completion of every two years qualifying service once the
officer reaches the maximum of the scale. However, it is ensured that Basic Pay
plus Dearness Allowance plus stagnation increments do not exceed the maximum of
Basic Pay plus rank pay of the next higher rank i.e. Major General – Rs
5900-200-6700.
Further, there
is no court order directing changing of the integrated pay scale. In case the
demand is met, the pay scale of next senior officer s will get burst,
disturbing the horizontal and vertical relativity pay scales on Services side,
paramilitary forces and civilian side also.
MoF views. This Ministry agrees with the view of the
office of CGDA on this issue as contained in their note No. AT/1/1483/RB/X
(PC)/V dated 23.5.2013 (Annexure XVII).
However, it
has been mentioned in the said Note of the CGDA that in cases where emoluments
(revised pay) computed without deducting rank pay crosses the maximum of the
revised integrated scale, the Ministry of Defence has proposed that the
difference by which the revised pay of the integrated pay scale may be
protected by way of Personal Pay to be absorbed in stagnation increments or pay
on promotion, but the same was not agreed to by the Ministry of Finance. The
Ministry of Finance did not agree to the same for the following reasons: -
(i) At the outset, this issue was neither
prayed for by Major Dhanapalan in his petition nor was it considered by the
Hon’ble Kerala High Court nor is it covered in the order passed by the Hon’ble
Court dt 5.10.1998.
(ii) Para 6 (o) of Section II of the Special
Army Instructions dated 26.5.1987 (Annexure XX) already provided that if the
amount so computed as at pata 6 (a) (ii) is more than the maximum of the
revised scale, the pay shall be fixed at the maximum of the revised scale. In
other words, if the initial pay fixed in the revised integrated scale exceeds
the maximum thereof, pay cannot be more than the said maximum. Thus now that
the …. Pertaining to deduction of rank pay part at para 6 (a) (ii) from
existing emoluments (or revised emoluments) as on 1.1.1986 has been removed,
the amount computed without deduction for the fixation of initial pay/fitment
in the revised pay scale as on 1.1.1986 also cannot exceed the maximum of the
revised integrated scale effective from 1.1.1986 as the principle laid down in
said para 6 (c) is not part of judicial pronouncement based on which the order
of 27.12.2102 has been issued.
Thus the
demand of Service Headquarters does not flow from the judicial pronouncement in
this case. This being so, its implementation as part of the order dt 27.12.2012
does not arise.
Apart from the
above, the proposal of the Ministry of Defence for Personal Pay, in such a case
is not justified on merits also as brought out below: -
(i) A person drawing pay in a particular
scale of pay attached to the post held by him, cannot draw pay in excess of the
maximum of the connected scale of pay. This is the concept of a Specific pay
scale. Of course since the rank pay is a separate element, the total pay (Pay
in the integrated scale + rank pay) can very well exceed the maximum of the
integrated pay scale and that is exactly what is happening here. It is being ….
that Rank Pay is a separate element in addition in the pay in the integrated
scale and as such Pay + rank pay is not restricted to the maximum of the
integrated scale. It is only the pay in the integrated scale that is not to
exceed the maximum thereof.
(ii) A similar provision exists in proviso
(b) to Rule 7 (1) (A) of the CCS (RP) Rules 1968 relating to fixation/fitment
of initial pay of civilian Government servants in the revised pay scales as on
1.1.1986. A copy of the relevant extract from the said Rules is at Annexure
XXII. Therefore, no special dispensation can be allowed in this case now that
the pay to be fixed in the integrated pay scale as on and w.e.f 1.1.1986 exceeds the maximum of the
integrated scale.
(iii) In case a person stagnates at the maximum
of the scale, stagnation increments in the concerned pay scale as preapproved
Rules are applicable. Office of CGDA has confirmed that stagnation increments
are admissible to Armed Forces officers as per orders of 11.9.1987.
(iv) In fact the phenomenon of initial pay
fixed in a revised pay scale at the maximum from the very date of implementation
of the revised pay scales has been specially taken note of by the 6th
CPC. The 6th Central Pay Commission noted that many of the pay
scales recommended by the 5th Central Pay Commission got “burst” at
the time initial fixation where revised pay of some of the employees became
higher than the maximum of the revised pay scales and these employees,
therefore, had started to stagnate right from the time of implementation of the
5th Central Pay Commission pay scales. It is for this reason that
the 6th Central Pay Commission has recommended the concept of
running pay band instead of specific pay scales. The Commission noted that
since the individual pay scale has a limited span, it often leads to
stagnation. The Commission, therefore, recommended the concept of running pay
bands to address these issues. In this connection, the recommendations of the
Pay Commission contained in para 1.2.7, 1.2.8. and 2.2.4 are collectively
placed at Annexure XXIII.
(v) Thus the situation as it existed upto
1.1.2006 was that there were cases of the employees reaching at the maximum of
the individual pay scale and this did not by itself mean allowing them to draw
pay more than the maximum of the pay scale by way of Personal pay. They were
only allowed stagnation increments and that is admissible in case of Armed
Forces personnel also. Therefore, any benefit in the form of personal pay is
the instant matter is against the normal and general policy.
(vi) Also, the initial pay fixed in this as on
1.1.1986, which is of course w.e.f 1.1.1986 after the order dated 27.12.2012 in
implementation of the judicial pronouncement in this case, does not fall below
the initial pay earlier fixed in the integrated pay scale before issue of the
order dt 27.12.2012 and, therefore, this is no actual loss in the initial pay
and hence, there is no basis for grant of personal pay in such cases.”
38. Para 6 (a)
(c) of the Instructions dated 26.05.197 provides as follows: -
“If the amount so computed as at sub-para
(ii) above is more than the maximum of the revised scale, the pay will be fixed
at the maximum of the revised scale.”
39. It is clear from the above that ceiling on pay scales rises
out of Para 6 (a) (c), which did not arise nor was considered in Major
Dhanapalan’s case.
40. The only issue decided by the Kerala High Court and
consequently the Supreme Court is whether rank pay is to be deducted at the
time of fixing pay in the integrated scale in terms of Para 6 (a) (ii). Ceiling
fixed under Para 6 (c0 is not subject matter of these judgments.
Query (IV) Since the treatment to Rank Pay while pay
fixation carried out in 5th CPC was similar to that of the 4th
CPC, whether orders of the Apex Court dated 04.09.2012 be applied to all
subsequent Pay Commissions i.e. V and VI CPC under such circumstances.
41. The divergent views on this issue are as under:
ISSUE
– 4: APPLICATION OF COURT ORDERS TO SUBSEQUENT PAY COMMISSIONS
Armed
Forces views: The Services contend
that deduction of rank pay at the time of the 4th CPC implementation
which has been set aside should also be followed at the next pay revision i.e.
5th CPC. They have stated that deduction on rank pay in 1996 also
have led to lower pay scales granted to relevant army officers.
Armed Forces
have stated that the decision of the Apex Court having been agreed to and
implemented has now become law of the land which needs to be applied equally to
other similarly placed cases/situations. The ratio of this case has to be
applied to subsequent Pay Commissions in similar situations
Amendments
sought by Armed Forces: The
Armed Forces have maintained that to resolve the above issue corresponding
amendments to the relevant Special pay Instructions for the 5th and
6th CPCs are also required so as to give effect to the verdict of
Hon’ble Supreme Court/Kerala High Court in letter and spirit.
CGDA’s
views: CGDA has stated
that Major Dhanapalan sought revision of pay from 1.1.1986 citing court orders
in the present matter. He was informed that the Hon’ble Kerala High Court order
was for not deducting rank pay as on 1.1.1986 when Rank Pay was introduced for
the first time based on IV CPC recommendations ad not as on 1.1.1996. An
element of rank pay was already included in the pay at the time o pay fixation
as on 1.1.1986 and 40% fitment benefit was given thereon.
No further
communication from him or any court was received thereafter. The case was
before courts from 1998 to 2012 and it was never an issue. Neither the Kerala
High Court nor Supreme Court has issued any directives for revision of pay
fixation formula for Fifth Pay Commission or the Sixth Pay Commission.
Def (Fin)
views: The issue raised is
not covered under the Supreme Court order dated
4.9.2012. The change in pay due to this order would automatically be
accounted for in subsequent pay commissions revision with reference to orders
issued on such recommendations.
MoF views: The Ministry of Finance agrees with the
views of the office of CGDA on the issue contained in their Note No.
AT/I/1483-RB/X(PV)/V dated 23.5.2013 (Annexure XVII).
This issue
does not form part of the Order of the Hon’ble Kerala High Court dt 5.10.1998”
42. In my opinion, the Government needs to implement the
underlying principle laid down in Major Dhanapalan’s case i.e. rank pay cannot
be deducted at the time of fixing pay in the revised scale. It is immaterial
that in Major Dhanapalan’s case, only 4th Pay Commission was
involved. The principle of law laid down is that rank pay cannot be deducted by
fixing pay in the integrated scale. Since rank pay has been deducted at the
time of fixing pay in subsequent pay commissions, the same would definitely
have to be corrected. The officers covered by 5th and 6th
Pay Commissions cannot be expected to approach the Courts for orders in the
same terms.
43. I have
nothing further to add.
Sd/----------------------------------
(GOOLAM E. VAHANVATI)
Attorney General of
India
03.09.2013
New Delhi
//////TYPED TRUE
COPY/////
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