RTI (21.1.13) - One more Part

Lord Curzon was astonished by a system in which proposals circulated through the departments and returned to their starting point many months later, garnished with an array of minutes from Secretaries and Under-Secretaries who revelled in dialectics and had perfected the art of put-down.

‘The Ruling Caste’ by David Gilmour (page 214  

--------

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 11^th March 2013 received on 19^th 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 has been filed for being provided with the Enclosures as they have been paid for.
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)

-59-

            Lt. Col. Arun Kumar & some other Army officers filed Writ Petition (Civil) No. 268 of 2010 in the Hon’ble Supreme Court seeking the benefit of the Hon’ble Court order dated 8.3.2010 passed in the matter of Rank Pay. This order has been appealed against by Government as per legal advice and this appeal (I.A. No. 9/2010) has already been taken on board by the Hon’ble Court vide its order dated 10.5.2010. The instant case (W.P No. 268/2010) was initially taken up on 25.08.2010 when the Hon’ble Court sought the assistance of Learned Attorney General and Learned Solicitor General in the matter. On 8.9.2010 the Hon’ble Court heard this petition and taking serious note of the overall situation concerning Armed Forces personnel, the Hon’ble Court suggested that Government may set up an independent commission headed by a retired Supreme Court judge to look into all the grievances of the serving and retired members of the Armed Forces. A copy of the Court order dated 8.9.2010 is available. The Law Officers sought time for taking instructions from the Government in this matter. The Hon’ble Court agreed and granted time up to 18.10.2010. Instant case i.e. W.P (Civil) No. 268/2010 relates to Rank Pay but the instructions of the Court cover all the grievances of Armed Forces. Broadly, the issues may ne categorised as under.                       

Rank Pay – The matter that has been raised before the Hon’ble Court does not actually relate to ’grant of Rank Pay to Armed Forces officers.’ Rank pay as a separate element beside the pay in the integrated pay scale (Rs 2300-100-3900-150-4200-EB-5100) was recommended by the IV Central Pay Commission for Armed Forces officers in the ranks of Captain to Brigadier. This recommendation was followed by certain illustrative examples in which the Rank Pay was deducted from the revised emoluments and the pay was then fixed at the stage next above the amount thus computed in the integrated scale of pay. Revised pay having thus been fixed, Rank Pay appropriate to the rank of the officers was to be granted separately. These recommendations were accepted by the Government and going strictly with the decision of the Government pay revision of the Armed Forces personnel was ordered accordingly. The Government has acted strictly in accordance with the recommendations of the IV Central Pay Commission which were duly accepted and no dilution whatsoever of the IV Central Pay Commission recommendation has been made by the Government.           

            A court case was initiated in 1996 contesting the methodology of fixation of pay w.e.f. 1.1.1986, particularly the step of deduction of Rank Pay. The matter was decided against the Govt. in the High Court of Kerala and also dismissed by the Division Bench of the Kerala High Court. Now, vide order dated 8.3.2010, the Hon’ble Supreme Court has agreed with the decision of the Kerala High Court and imposed interest @ 6% p.a. to be paid on the arrears since 1.1.1986. The Government has filed an I.A. No. 9.2010 in the Hon’ble Court seeking modification/review/recall of the order dated 8.3.2010 which is sub-judice.  

Pay and allowances – The VI Central Pay Commission submitted its report to the Government in March 2008 recommending increased pay and allowances. The Services represented to the Government seeking a common pay scale to PBORs, re-fixing of Grade Pay, improvement in MSP, Assured Career Progression (ACP) to PBORs and other matters related to pension, gratuity and terms and conditions of service. The Government examined these matters and improved upon the recommendations of the Pay Commission before accepting them. The Government has continued to consider requests of the Services for further improvements in the pay, allowances, and other service conditions. In order to look into these issues, the Prime Minister appointed a Group of Ministers (GoM) headed by Sh. Pranab Mukherjee, the then Minister of External Affairs to look into these demands. On the basis of the report of the GoM (Encl 14/A) the Government agreed to grant Pay Band 4 status to Lt. Col./equivalent officers with a Grade Pay of Rs 8000/-. It was also decided that in future, pay revision of armed forces should be de-linked from that of civilians and a separate Board or Commission should be set up for pay revision of the Armed Forces.  

            Even thereafter, the Government has granted HAG+ Scale (Rs. 75, 500-80, 000) to 1/3^rd of total strength of such officers, revised HAG Scale (Rs 67,000 – 79, 000) to all Lt. Gens/equivalent officers and NC(E) allowance @ Rs 1000 p.m. to Non-Combatants (Enrolled) of the Indian Air Force.   

            While responding to a Parliament Question, Services have stated that the award of the VI Central Pay Commission has been largely well received by all ranks (Encls 8/D, E, F). However, certain anomalies were also stated to have been raised. These and some more demands of the Services are presently under active consideration of the Government. 

            Any grievances/anomalies can be addressed by taking up the issues with the administrative Ministry/Ministry of Finance. Armed Forces Tribunals set up exclusively to hear the grievances of service personnel also provides a forum to sort out any grievance related to pay, allowances and  pension matters.  

One Rank, One Pay (Pension?) – Out of the grievances pertaining to pension related issues, the most important being One Rank, One Pension (OROP for short). Apart from recommending liberalised pay scales, the VI Central Pay Commission made a big change in recommending Military Service Pay for all Armed Forces personnel – officers as well as PBORs. This has consequently resulted in increased pension and other retirement benefits. Higher rates of for all retirees and family pensioners on attaining the age of 80, 85, 90, 95 and 100 years have also immensely benefited the aged pensioners. Ministry of Law, when consulted on the issue of OROP, relying on the judgments of the Hon’ble Supreme Court in the cases of D.S. Nakara [1983 (2) SCR[65], K.L. Rathi [SLJ 1997 (3)/2007], All India Ex-Service League [AIR 1991 SC 1182] and S.C. Dhingra [2008) 2 SCC 299] did not recommend the demand. As the Armed Forces pensioners still continue to raise their demand for OROP and some related issues, the Government set up a Committee under the Chairmanship of Cabinet Secretary to look into these matters. The Committee, taking into consideration all the factors – financial, administrative and legal – did not find it feasible to recommend OROP as such. However, keeping in mind the spirit of the demand, the Committee made several other recommendations to substantially improve pensionary benefits of Armed Forces personnel, which have since been accepted by the Government.  

            With this background, the matter was examined in consultation with Ministry of Law. Ministry of Finance has opined that the Sixth Central Pay Commission was headed by a retired Judge and so were the earlier Pay Commissions. The Commission looks at all categories of employees in a holistic manner and makes its recommendations. Further, even after Pay Commission made its recommendations, the Government has improved the fitment formula, the pay scales of Lt. Cols., Colonels and Brigadiers, the MSP of PBORs etc. Also a decision has also been taken that next time the Defence Forces will have a separate Pay Commission. In these circumstances, there seems to be no need to set up an independent Commission to look into the grievances of serving and retired Defence personnel as suggested by the Hon’ble Court.        

            Even after a decision to this effect was communicated to the Ld. Solicitor General of India, the matter was also discussed with him on 17^th Oct, 2010 when he was apprised of the steps taken by the Government over the last 25 years for improving the pay, pensionary benefits and other service conditions of Armed Forces personnel.

            On 18.10.2010, inspite of Govt instructions, in order to see that no financial prejudice is caused to the Government by the dismissal of its appeal (against the order dated 8.3.2010), the Ld. Solicitor general requested and pleaded before the Court for some more time to carry forward the suggestion in its true spirit. Hon’ble Court granted time till 08-11-2010 and again insisted setting up of independent commission. A copy of the Hon’ble Supreme Court Order dated 18.10.2010 is available at Encl 46/A.   

Ld. Solicitor General of India has now written a letter dated 20.10.2010 to Raksha Mantriji. Giving details of the subject matter (Rank Pay issue), Ld. SG has apprised RM of suggestion of the Hon’ble Court on the issue of appointing a multi-member commission under a retired Supreme Court judge to look into the grievances of the serving as well as retired members of the Armed Forces.     

            Considering the urgency and importance of the matter, on the request of Defence Secretary, a meeting was held in the chamber of Secretary, Expenditure on 26.10.2010. Besides deliberating on the various aspects of issue, it was also agreed to request RM to have a formal meeting with FM in which Ld. Solicitor General will be requested to attend the meeting.

Submitted please,

Sd/-----------------------------

(Naveen Kumar)

Director (AG)

27.10.2010

JS (E)

-60-

            Reference Note 59. 

In reference to the letter of Defence Secretary (Encl 58/A) to Secretary, Expenditure, a meeting was held in her chamber on 26/X/10. The stand taken by the Ministry was reiterated on the suggestion of the Secretary, Expenditure and other officials present in the meeting, various options available were also discussed. Options available may be narrowed down as follows: -    

i) The stand taken by the Ministry in consultation with MoF may be reiterated with submission to the Hon’ble Court to decide our recall petition on the basis of its merit; or   

ii) We may agree for one member commission with single term of reference i.e. whether the policy decision_______________ (indecipherable) has properly been implemented or not.

            However before taking a final stand on the issue, in view of the importance of the matter which have huge financial & administrative implications (in the event of the rejection of the recall petition), it was decided to request RM to speak to Finance Minister for a meeting and Ld, SG will also be invited to attend the said meeting to take a final decision on the suggestion of the Hon’ble Court.

            Accordingly the file is submitted for the consideration of RM for the proposed meeting with FM. Since the next date of hearing is 8^th Nov 2010, the matter is urgent. 

Sd/----------------------------

                                                                                                                                    29/X/10

AS (M)

-61-

Notes 59 ante onwards refer. In his letter to RM, Ld SG has concluded by stating that the matter be examined at some considerable depth.

            Considering this and possible implications of this case, in the discussions between Defence Secretary and Secretary, Expenditure, it was decided to request RM and FM to hold discussions on then when Ld SG would be requested to be present. A brief is being prepared separately.

            RM may like to consider raising the matter with FM.

                                                                                                                        Sd/------------------

                                                                                                                                    27/X

Defence Secretary

-62-

RM has discussed the matter with FM. The meeting between FM and RM is likely to take place on 28.X.2010. Solicitor General, Secty Exp and I would be attending. The brief may please be prepared.

                                                                                                                        Sd/-----------

AS (M)                                                                                                             27/X

JS (E)

-63-

The matter was discussed with AS (M). The meeting was held in the chamber of FM on 28/X/10 which was attended by RM & SG.

It could be ascertained from AS (M) that a decision has been taken to file an affidavit in the court giving our consent for a Single member Commission with 2 TORs (Terms of Reference) i.e.: - i) whether rank pay as recommended by IV Pay Commission was properly implemented or not and ii) streamlining the pension payment procedure.

While we prepare the exact TOR on point (i), we may request ESW to prepare the TOR on (ii). Besides the procedure of formation of Commission logistics to be provided need to be ascertained. So please prepare the draft TOR & collect all other information.

A meeting will be held in the chamber of AS (M) on 1/11/10 at 11 AM to discuss the above issues. Pl invite ESW, Def (Fin), JS (Pers) MoF Shri Alok Saxena, Secretary Postal (?) Board to attend the meeting.

                                                                                                                        Sd/------------------

                                                                                                                        29/X/10

Dir (AG)

                        Sd/------------ 29/10

US (P/S)          Issue   Encl 64A

SO (P/S)

-65-

This is regarding consideration of the suggestion of the Hon’ble Supreme Court for setting up Commission headed by a former Supreme Court judge to look into the grievances of the members of the Armed Forces both serving as well as retired.

            Earlier view of the Government was that we may not agree to setting up a Commission for various stated reasons including the fact that such a course of action would amount to agreeing to the stand taken by the Court that Government has not taken adequate measures to solve the grievances of the Armed Forces personnel.

            In the meeting of RM with FM on 28.10.2010 which was also attended by Ld Solicitor General it was decided that an affidavit may be filed in the Court giving our consent for a single member Commission. The terms of reference of this Commission could be :

(i)                 To examine the correctness of the implementation of IV Central Pay Commission recommendations related to Rank Pay as given in Para 28.113

(ii)               To make recommendations for further improvements of the procedure for pension disbursement to retired Armed Forces personnel based on Government orders subsequent to VI Central Pay Commission’s recommendations. 

The Terms of Reference as stated above are put up for approval, please.

Sd/---------------------------

            Naveen Kumar

Director (AG)

01.11.2010

JS (E)

-66-

The TORs  at Para 3 (i) & (ii) were discussed in the chamber of AS (M) with the reps of MoF & Def (Finance) and they are in agreement with the proposed TORs.

May be appd for forwarding the same to MoF though Def (Finance) for their concurrence.

                                                                                    Sd/------------

1/11/10

AS (M) Sd/------------ 1/XI

JS (E) Sd/--------- 1/XI/10

Addl FA & JS (S) Sd/--------- 1/11/10

DFA (AG)

-67-

Ministry of Defence (Finance)

Fin/AG

            This is regarding the matter before the Hon’ble Supreme Court on setting (up) of a Commission headed by a former Supreme Court judge to look into the grievances of the Armed Forces personnel including ex-Servicemen. Notes 59/ante onwards may kindly be seen.

2.                  The case for setting (up) a Commission to look into the grievances of the Armed Forces personnel was seen earlier by Ministry of Finance. Photocopies of their notes at Encl 26A opposite (not provided) and Note 24/ante (not provided) are relevant.

3.                  As indicated in the preceding notes, the matter has since been discussed between the Hon’ble RM and the Hon’ble FM. In pursuance to the decision to file an affidavit, conveying consent of MoD for a single member Commission, draft terms of reference for the proposed Commission have been formulated as in preceding Note 65 ante. These were discussed in a meeting taken by AS (M) today (1.11.2010). Officers from the MoF were present in the meeting.

4.         The file is accordingly proposed to be referred to MoF for concurrence to the draft terms of reference. Secy (Def/Fin) may kindly like to see for approval before the file is referred to Ministry of Finance.

                                                                                                      Sd/-----------------------

                                                                                                      (A. K. Gambhir) 1/11/10

                                                                                                      DFA (AG)

JS & Addl FA (S)                     Sd/------------ 1 Nov 10

Secy (Def.Fin)                         Sd/---------------- 2/11

Addl FA (S)                             Sd/----------------- 2/11/10

DFA (AG)                                 Sd/------------------- 2/11/10

Joint Secretary (Pers) Deptt of Expenditure

MoD (Finance) ID No. 534/PA dated 2.11.2010

-68-

Ministry of Finance

Department of Expenditure

E.III-A Branch

*******

            Ministry of Defence may please refer to their notes on page 67/N in file No. 34/11/2010/D (Pay/Ser) whereby concurrence of Department of Expenditure has been sought on the draft Terms of Reference for the proposed Commission to be headed by a former Supreme Court Judge in pursuance of the directions of the Hon’ble Supreme Court.

2.         This Department concurs with the draft Terms of Reference for the said Commission as spelt out at page 65/N of the file in question.

   

3.         This issues with the approval of Secretary (Expenditure).

                                                                                                            Sd/- Renu Jain

                                                                                                            Director          

Sh. Arun Kumar Bahl, JS (Estt), Ministry of defence, Room No. 67, South Block, New Delhi

Ministry of Finance, Department of Expenditure, U.O No. 871832/JS(Pers)/10 dt 03.11.2010

-69-

Received …………..                                                                                          Encl 69A

-70-

           

            Reference Note 65/ante.

2.         On 8^th September 2010, the Hon’ble Supreme Court while hearing Writ Petition (C) No. 268 of 2010 – Lt. Col. Arun Kumar and others Vs Union of India suggested (Encl -7B) that Government set up an independent Commission headed by a retired Supreme Court Judge to look into the grievance of the Services and retired personnel of the Armed Forces. Ld. Attorney general and the Ld. Solicitor General appearing to assist the Court were asked to take instructions from the Government on the Court’s suggestion and convey it to the Court on 18^th October 2010 when the subject Writ Petition would be heard along with our recall petition IA No. 9 of 2010.  

3.         Briefly, the issue dates back to 1987 when the 4^th Central Pay Commission recommended introduction of rank pay in case of officers of the Armed Forces upto the rank of Brigadier. Going to the specific recommendation of the Pay Commission, it was decided in consultation with Ministry of Finance that while calculating revised pay of the officers, rank pay of the officer as on 1^st January 1986 would be deducted from the existing emoluments and after revised pay is fixed in the revised pay scale, rank pay as per the rank of the officer would be added. (Readers may note that it is not stated that this methodology was between MoD and MoF. It was not  as recommended by 4^th CPC, though all UoI affidavits state so!) In one case, involving an officer, Maj Dhanapalan, the Hon’ble Kerala High Court in its order dated 5^th October 1998 decided that no deduction of rank pay would be made while calculating revised pay. The appeal of the Government was also dismissed by the Division Bench on 4^th July 2003. Subsequent SLP filed in the Hon’ble Supreme Court was also dismissed on 12^th July 2005 on account of delay. In light of this, the decision of the Kerala High Court was implemented in favour of the officer vide Army HQrs letter dated 26^th August 2005.      

4.         In view of the favourable order to the applicant officer, a number of other officers started filing writ petition on this count in different High Courts. To meet the situation, on the advice of the then Ld Additional Solicitor General and in consultation with Ministry of Finance, transfer petition was filed in Hon’ble Supreme Court tagging two other writ petitions  which had also been filed. The Hon’ble Supreme Court after hearing both the sides, agreed with the recommendation (the Apex Court order states “agree with the reasoning”) given by the Kerala High Court and directed the Government to make the payment along with the interest at the rate of 6& per annum. Since the implementation of such an order involves huge financial implications on the advice of the Ld Solicitor General, Recall Petition IA No. 9 of 2010 has been filed.

5.         With this background, it may be mentioned here that Government is fully concerned with the grievances of the Services personnel. Their grievances may be categorised briefly as under: -

            i) Rank Pay

            ii) Grievances related to Pay and Allowances

            iii) One Rank One Pay (Pension) (OROP)

6.         Rank Pay

            The matter which has been raised before the Hon’ble Court 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.

The IV Central Pay Commission recommended that since rank pay is a separate element of pay the same may be taken into account while fixing pay in the integrated scale of pay. This recommendation was followed by certain illustrated examples (sic) in which Rank Pay was deducted from the revised emoluments and the pay was then fixed at the stage next above the amount thus computed in the integrated scale of pay. Revised pay having thus been fixed, Rank Pay appropriate to the rank of the officers was to be granted separately. The recommendations were accepted by the Government (some words are missing) has acted strictly in accordance with the recommendations and no dilution whatsoever has been made. 

6.2.      After implementation of the V Pay Commission recommendations, the demand of the Services to merge Rank Pay with Basic Pay was considered by a Committee formed under Defence Secretary followed by another Committee under the Chairmanship of Cabinet Secretary which did not agree to the demand. Moreover, the order of the Hon’ble Courts seem to have misinterpreted the directions of Para 28.113 of the IV Central Pay Commission which makes it clear that rank pay is to be deducted from the existing emoluments while calculating revised pay of officers upto the rank of Brigadier and has to be added to after revised pay is fixed.

6.3.      Besides, the acceptance of the Hon’ble Court order dated 8^th March 2010 would also lead to subsequent changes at other places. In the present manner, implementing the Hon’ble Court’s order re-fixation of pay of officers entitled to rank pay would lead to revision of pay scales of personnel above and below such officers with effect from 1-1-86 firstly and then from 1-1-96 and 1-1-2006 and at the time of subsequent pay revisions. Similarly, this would be carried out for pension of the retired personnel (underlined by the author of this blog for emphasis). As there is parity in the pay scales of armed forces and other civilian officers in certain ranks, the change over will eventually spill over to Civilian employees which was the intention of the IV Central Pay Commission. More so, the grant of this unintended benefit would place heavy burden on the exchequer. 

7.         PAY AND ALLOWANCES

            During the last 25 years, the recommendations of various Pay Commissions have been implemented as well as further improved upon by the Government greatly improving pay, allowances, retirement benefits including pension and other service conditions of all Central Government employees (emphasis by author of this blog) including in the Armed Forces.

7.2.      As an example, after the VI Central Pay Commission submitted its report to the Government in March 2008 recommending increased pay and allowances, the Services represented to the Government seeking common pay scales to PBORs, re-fixing of grade pay, improvement in MSP, Assured Career Progression (ACP) to PBORs and other matters related to pension, gratuity and terms and conditions of service. In order to look into these issues, the Prime Minister appointed a Group of Ministers (GoM) headed by Shri Pranab Mukherjee, the then Minister of External Affairs to look into these demands. On the basis of the report of the GoM, the Government agreed to grant Pay Band-4 status to Lt. Col/equivalent officers with a Grade pay of Rs 8000/-. It was also decided that in future, pay revision of armed forces should be de-linked from that of civilians and a separate Board or Commission should be set up for pay revision for the armed forces.    

7.3.      Even thereafter, the Government has granted HAG+ Scale (Rs 75000-80000) to 1/3^rd of total strength of such officers, revised HAG Scale (Rs 67000-79000) to all Lt Gen/equivalent officers and NCs(E) Allowance @ Rs 1000/-p.m. to Non-Combatants (Enrolled) of Indian Air Force.     

7.4.      While responding to a Parliamentary Question, Services have stated that the award of the VI Central Pay Commission had been largely well received by all ranks. However, certain anomalies were also stated to have been raised. These and some more demands of the Services are presently under active consideration of the Government.   

7.5.      Internal Redressal Mechanisms

            To look into the various pay and pensionary anomalies, the government has well structured mechanisms which are as follows: -

           

            i) (a) Anomalies are dealt with in MoD on a case by case basis. 

(b) In the Department of Ex-Servicemen Welfare, an anomaly Committee has been constituted under the Chairmanship of Secretary, Defence/Finance consisting of representatives of three Services, CGDA and ESW dept.          

            ii) Armed Forces tribunal (AFT): Armed Forces Tribunal has been set up exclusively to hear the grievances of Service personnel and provides a judicial forum to sort out any grievance related to pay, allowance and pension matters (Section 14 of AFT Act).

8.         ONE RANK, ONE PAY (PENSION?)

            Out of the grievances pertaining to pension related issues, the most important being One Rank, One Pension (OROP). (Note: finally MoD got that right – so much for the eulogy of its concerns for armed forces officers). Apart from recommending liberalised pay scales, the VI Central Pay Commission made a big change in recommending Military Service Pay for all Armed Forces personnel – officers as well as PBORs. This has consequently resulted in increased pension and other retirement benefits. Higher rates of pension for all retires and family pensioners of higher age groups have also immensely benefits the aged pensioners. Ministry of Law, when consulted on the issue of OROP, relying on the judgments of the Hon’ble Supreme Court in the cases of D.S. Nakara [1983 (2) SCR 165], K.L. Rathi and S.C. Dhingra [2008 (2) SCC 229] did not recommend the demand. As the Armed Forces pensioners still continue to raise their demand for OROP and some related issues, the Government set up a Committee under the Chairmanship of Cabinet Secretary to look into these matters. The Committee, taking into consideration all the factors – financial, administrative and legal – did not find it feasible to recommend OROP as such. However, keeping in mind the spirit of the demand, the Committee made several other recommendations to substantively improve pensionary benefits of the Armed Forces personnel, which have since been accepted by the Government.     

9.         With this background, the matter was examined in consultation with Ministry of Law and Ministry of Finance. The opinion of Ministry of Finance was that 6^th Central Pay Commission was headed by a retired Judge and so also the earlier pay commissions. The Commission looks at all categories of employees in a holistic manner and makes its recommendations. Further, even after the Pay Commission made its recommendations, the Govt has improved its fitment formula, the pay scales of officers and PBORs, etc. Also, a decision has been taken that next time, the Defence Forces will have a separate pay commission. In these circumstances, there seems to be no need to set up an independent commission as suggested by the Hon’ble Court.

      

10.       The views of the Govt. were conveyed to the Ld. Solicitor General through a brief (Encl 45A – not included in reply) followed by discussion with him on 17.10.2010 when he was apprised of the steps taken by the Government over last 25 years for improving the pay, pensionary benefits and other service conditions both for serving and retired Armed Forces personnel. But on 18.10.2010, considering the reaction of the Hon’ble Court and in order to see that no financial prejudice is caused to the Government by the dismissal of the recall petition, Ld Solicitor General requested the Hon’ble Court for some more time to carry forward the suggestion in its true spirit. Hon’ble Court has granted time till 8.11.2010 (Encl 46A – not included in reply) and again insisted for setting up multi-member independent Commission headed by a retired Supreme Court Judge. Ld. Solicitor General has now written (Encl 50A  - not included in reply) a letter dated 20.10.2010 to RM requesting the matter to be examined at ‘some considerable depth.’    

11.       The letter of the Ld Solicitor General clearly acknowledges and appreciates the steps taken by the Government to look into the grievances of the Armed Forces personnel both serving and retired. When grievances are being looked into on a regular basis through various internal mechanisms and at regular intervals through Pay Commissions mostly headed by retired Supreme Court Judges, setting up such a Commission is not going to serve any useful purpose nor bring any finality to the matter. It may also be pointed out here that if our recall petition I.A. No. 9 is not allowed, then the effect may follow in implementation of the matter would be enormous both financially and administratively.

12.       Further to that a meeting was held between Secretary, Expenditure and Defence Secretary on 26^th October 2010 which was also attended by officials of the Department of Expenditure and MoD. It was decided in the said meeting that before taking a final stand and in view of the importance of the matter, which have huge financial and administrative implications, Raksha Mantri will be requested to speak to Finance Minister for a meeting and the Ld Solicitor General will also be invited to attend the said meeting.  

13.       Subsequently, in the meeting of RM with FM on 28.10.10 which was attended by the Ld Solicitor General it was decided that an affidavit may be filed in the Court giving our consent for a single member Commission to examine two basic issues - 

            i) Whether recommendations of IV Pay Commission on Rank Pay was properly implemented or not; and

            ii) Fast tracking the pension disbursement process.

Accordingly, a meeting was held in the chamber of AS (M) on 1.1.2010 with representatives of Ministry of Finance, Defence (Finance) and ESW and following TORs were finalised.         

            i) To examine the correctness of the implementation of IV Central Pay Commission recommendation related to Rank Pay as given in Para 28.113.

            ii) To make recommendations for further improvements of the procedure for pension disbursement to retired Armed Forces personnel based on Government orders subsequent to VI Central Pay Commission recommendations.

14.       The proposed TOR was also forwarded to department of Expenditure through Defence (Finance) for their concurrence and we have received concurrence of the Department of Expenditure (Note 68 ante). The proposed TOR was also shown to the Ld Solicitor general who has approved the same making some minor changes (Encl 69A – not included in reply). Accordingly the final TORs as approved by the Ld SG are as follows: -

            (i) To examine the correctness of the implementation of IV CPC recommendation related to Rank Pay as given in Para 28.113.

            (ii) To make recommendations for further improvements to the procedure for disbursement of pension to retired Armed Forces personnel based on Govt orders subsequent to VI CPS’s recommendations.

15.       As there are no material changes, file may not be sent to Ministry of Finance again. However, Director, Ministry of Finance has been informed the same over telephone.

16.       Submitted for the kind approval of RM. If approved, the views of the Government will be intimated to the Ld Solicitor General for appropriately defending our case in the Hon’ble Supreme Court. The matter is urgent as the next date of hearing of the case is on 8^th November 2010.

                                                                                                            Sd/----------------------------------

                                                                                                            Naveen Kumar

                                                                                                            Director (AG)

                                                                                                            3.11.2010.

JS (E)

-71-

                                                Ref Note 70.

                                                Para 16 above may kindly be considered.

                                                                                                            Sd/-------------------

                                                                                                            3.11.10

AS(M)                          Sd/------------ 3/XI

Defence Secretary      Sd/--------------- 3/XI

RM                              Sd/------------------ 4/11

Def Secy

JS (E)

Dir (AG)

-72-

Draft letter addressed to Ld Solicitor general of India is placed opposite for approval/ sign pl.

                                                                                                            Sd/----------------

                                                                                                                        4/XI

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

                                                                                                                        4/11/10

Dir (AG)                                                                                               Sd/--------------

                                                                                                                        4/11/10

US (P/S)

-73-

Issue                                                                                                               Encl 73A

-74-

Supreme Court order dt 8.11.2010             Encl  74A

-75-   

Draft Affidavit                                                                                                            Encl 75A

Receipt letter dt 11^th Nov 2010 from Ld Solicitor General of India containing finalised

Draft                                                                                                                Encl 76A                    

-77-

Lt. Col Arun Kumar and some other Army Officers filed Writ Petition (Civil) No. 268 of 2010 in the Hon’ble Supreme Court seeking the benefit of the Hon’ble Order dated 8^th March 2010 passed in the matter of Rank Pay. While hearing the petition, the Hon’ble Supreme Court suggested for setting up of a Commission headed by a retired Supreme Court Judge to look into the grievances of the members of the Armed Forces both serving as well as retired. The details of the case are mentioned in Note 70/ante.  

2.         The case was heard again on 8^th November 2010 and the Court granted one week time (by 15^th November 2010) for filing of the affidavit. Accordingly, a draft affidavit as prepared (Encl 75A) and shown to the Ld Solicitor General of India. Ld SG has finalised the draft affidavit by incorporating certain changes. One of the material change is that “An Independent Commission headed by a Retired Judge of the Hon’ble Apex Court” has been used instead of “An Independent Single Member Commission” as mentioned in the draft affidavit of the Ministry. Ld SG has instructed to file the affidavit today itself. Next date of hearing is on 15^th November 2010.   

3.         Submitted for the kind approval of RM. If approved, the affidavit may be filed in the Hon’ble Supreme Court.

                                                                                                                        Sd/-----------------------------

                                                                                                                        (Naveen Kumar)

                                                                                                                        Director (AG)

                                                                                                                        11.11.10

JS (E)

-78-

            Ld SG has insisted that the affidavit must be filed by 2.30 pm today.

To obviate the problem as given above, it is proposed to change para 31 to indicate that the Commission shall be set up by the Govt. JS (E) has been sent to Supreme Court to get comment of Ld SG to this change.

I have spoken to Secretary (Expenditure) who has agreed to this. She has been informed also accordingly thru’ a letter. Defence Secretary has been consulted on phone and has agreed to this change.

For kind approval for filing of affidavit as revised 

                                                                                                                        Sd/-----------------

                                                                                                                        AS (M)

                                                                                                                        11/10

Defence Secretary - on leave

RM      Sd/-----------11/11

-79-

Reference Note 77.

The undersigned met the SG in his chamber and conveyed the stand taken by the Government. The amendment in the affidavit which we propose to make was also shown to him (Para 30 of Encl 76/A – not provided with reply.) He was in agreement with the amendment which we proposed. However he made some changes in the sentence which was basically in line with the amendment which we had proposed and the prerogative, as being affirmed, lies with the Govt to appoint the Commission. A copy of the changes he made is placed opposite for kind perusal.

                                                                                                            Sd/-----------------

                                                                                                            JS (E)

                                                                                                            11/11/10

AS (M)

-80-

Note 77 ante onwards refer for kind perusal. The affidavit has since been filed.

                                                            Sd/--------------

Defence Secretary

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

AS (M)                         Sd/--------------

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

Dir (AG)                       Sd/------------------- 15/11

US (P/S)

-CONCLUDED-

MoD Creates Two Classes of Officers Once Again

Note: 

1. Please read this carefully and realise the illegality of having Rank Pay only for those who were in the rank of Captain as on 1.1.1986  but not for those who were promoted/joined in the rank of Captain (like AMC officers) after 1.1.1986.

2. This Order of the Hon'ble Supreme Court is of year 2008 (Repeat) 2008. Therefore, as on 4.9.2012 this order must have been implemented. Therefore MoD cannot, though it has, create two categories of officers vide MoD No. 34 (6) 2012 - D (Pay/Services) dated 27.12. 2012  i.e. those who will receive Rank Pay because they were Captains or above as on 1.1.1986 and those who will NOT receive Rank Pay because they were promoted or joined after 1.1.1986 on the authority of the Govt of India/Ministry of Defence delegated to the Services HQ.        

-------------------------------------

Union of India and another v. SPS Vains (Retd.)

(Altamas Kabir and Markandey Katju, JJ.)

Union of India and another ------------- Appellant(s)

vs

SPS Vains (Retd.) and others ----------- Respondent(s)

Civil Appeal No. 5566 of 2008, decided on September 9, 2008

[Special Leave Petition (Civil) No. 12357 of 2006]

The judgment of the Court was delivered by Altamas Kabir, J.

1. Leave granted.

2. Interlocutory Application No.2 of 2006 filed by Major General S.C. Suri (Retd.) and 67 others similarly placed as the respondents is allowed.

3. Only a very limited issue falls for our consideration in this appeal which has been filed by the Union of India through the Secretary, Ministry of Defence and the Chief of Army Staff through the Adjutant General Army Headquarters, New Delhi, against the judgment and order of the Punjab and Haryana High Court allowing the writ petition filed by the respondents herein with the following directions: - "For the foregoing reasons, the writ petition is allowed and the respondents are directed to fix minimum pay scale of the Major General above that of the Brigadier and grant pay above that of a Brigadier as has been done in the case of post 1.1.1996 retirees and consequently fix the pension and family pension accordingly. There shall be no order as to costs."

4. As would be evident from the above, the primary question which falls for decision in this appeal is whether the High Court had in the exercise of its jurisdiction correctly directed that officers of the rank of Major General, who had retired prior to 1st January, 1996, when revision of pay scales took effect, be given the benefit of the provisions of the revised pay scale, notwithstanding the fact that in terms of the policy only those who retired after the said cut-off date would be entitled to such benefit. The larger issue involved is whether there could be a disparity in payment of pension to officers of the same rank, who had retired prior to the introduction of the revised pay scales, with those who retired thereafter.

5. The case which has been made out in the High Court in the writ petition filed by the respondent herein is that prior to revision of the pay scales from 1.1.1996 the running pay band from Lieutenant to Brigadier, irrespective of promotion, introduced on the basis of the Fourth Pay Commission's recommendations, was Rs.2300-100-3900-EB- 150-4500-EB- 5100. The rank pay that was fixed was Rs.200/-, 600/-, 800/-, 1000/- and 1200/- for the ranks of Captain, Major, Lieutenant Colonel, Colonel and Brigadier, respectively. While a Major General was given a starting salary of Rs.6700/- on the basis of the recommendations of the Fourth Pay Commission, a Brigadier could draw Rs.5,100/- and additional rank pay of Rs.1200/- making a total of Rs.6300/-. Consequently, a Major General always drew higher pay than a Brigadier and the pension payable to officers on the basis of the recommendations of the Fourth Pay Commission was calculated on the basis of salary drawn during the last 10 months prior to retirement. Even on such basis, a Major General always drew more pension and family pension than a Brigadier. It has to be kept in mind that the rank of Brigadier is a feeder post for the promotional rank of Major General.

6. The anomaly arose with the acceptance by the Government of the recommendations of the Fifth Pay Commission which has created a situation whereby Brigadiers began drawing more pay than Major Generals and were, therefore, receiving higher pension and family pension than Major Generals. In view of the recommendations of the Fifth Pay Commission, a Brigadier was given a pay scale of Rs.15350-450-17600 together with rank pay of Rs.2,400/- whereas a Major General was given a pay scale of Rs.18400- 500-22400. In other words, the maximum pay in the pay scale of Brigadier is 17,600/- and the minimum pay in the pay scale of Major General is Rs.18,400/-. Inasmuch as, no rank pay was provided for beyond the rank of Brigadier, the minimum pay provided for a Major General became less than that of a Brigadier who may had reached the maximum point in his scale. Consequently, on retirement, the pension of a Brigadier became more than that of a Major General, since rank pay is also taken into consideration for the purpose of calculating pension and family pension. The pension of a Major General thus became Rs.9,200/-, while that of a Brigadier was Rs.9,550/-.

7. It is this anomaly, when pointed out, which prompted the Government to step up the pension of Major Generals who had retired prior to 1.1.1996, from Rs.9,200/- to Rs.9,550/- giving them the same pension as was given to Brigadiers. Before the High Court it was urged on behalf of the writ petitioners, who at the time of their retirement had held the rank of Major General or Air Vice Marshal, that while the writ petitioners and others similarly placed officers who had retired prior to 1.1.1996 were given the same pension as that of a Brigadier, those officers of similar rank who had retired after 1.1.1996 were given pension according to clause 12(c) of Special Army Instructions 2/S/1998, as a result whereof they were getting much higher pension and family pension than the writ petitioners, despite being of the same rank.

It was pointed out that by virtue of the aforesaid Special Instruction the initial pay of an officer promoted to the rank of Major General would be fixed at the stage next above the pay notionally arrived at by increasing his pay, including rank pay of Brigadier, by one increment in the revised scale at the relevant stage. It is this classification within a class which led to the filing of the writ petition before the High Court. Before the High Court it was urged further that such differentiation between officers holding the same rank on the date of retirement was wholly erroneous and violative of the provisions of Article 14 of the Constitution.

8. Rejecting the submissions made on behalf of Government that there could be no fresh fixation of pay once an officer had retired and the only re-fixation possible would be that of pension, the High Court allowed the writ petition and disposed of the same with the directions indicated hereinabove.

9. The said decision of the High Court has been questioned in this appeal by the Union of India and the Chief of Army Staff.

10. Before us, the Union of India has taken a stand that the High Court misinterpreted the policy relating to fixation of pay of officers of the Defence Services and had also misunderstood the scope of the policy with regard to those officers who had retired prior to the revision of the pay scales and that their pay scales had already been revised at the time of their superannuation from service. In their case, therefore, the question of revision of pay scale could not arise and they could only claim that their pension, including family pension, should not be lower than that of a Brigadier which is a feeder post for the post of Major General having higher and more onerous responsibilities.

11. In this regard reference was made to a communication dated 7.6.1999 addressed to the Chiefs of the three wings of the Defence Services on behalf of the Ministry of Defence, Government of India, in which a differentiation appears to have been made between officers who had retired prior to 1.1.1996 and those who retired thereafter since a reference  was made to two of the Ministry's letters dated 3.2.1998 dealing with post 1.1.1996 and the other dated 24.11.1997 dealing with pre 1.1.1996 cases.

12. Reference was also made to Special Army Instruction dated 19.12.1997 indicating that in pursuance of the recommendations of the Fifth Central Pay Commission and the Government decision thereupon, the existing pay scales admissible to Army Officers would be revised with effect from January, 1996. The said Instruction also indicated that the said provisions would apply to all officers who were on the effective strength of the Army as on 1.1.1996 and those who joined thereafter, and also to trainee officers who were undergoing Pre-Commission training on 1.1.1996 and trainee officers who joined after the said date. Reference was also made from the said Instruction to paragraph 9 thereof dealing with the stepping up of pay of Major Generals on promotion from the rank of Brigadier prior to 1.1.1996. In the said paragraph it has been specifically indicated that pay of all officers promoted to the rank of Major General prior to 1.1.1996 would be stepped up to become equal to the pay fixed for Brigadiers in the revised pay scale as on 1.1.1996, subject to certain conditions.

13. Yet another communication to the three Chiefs of the Defence Services dated 3.2.1998 issued by the Ministry of Defence, Government of India relating to the implementation of the Government's decision on the recommendations of the Fifth Central Pay Commission regarding pensionary benefits for officers and personnel below officers rank belonging to the armed forces, retiring on or after 1.1.1996, which would, however, have no application to those who had superannuated prior to 1.1.1996.

14. Learned Additional Solicitor General submitted that the Ministry of Defence, Government of India, had taken a considered decision in fixing 1.1.1996 as a cut-off date since the pay scales were revised with effect from the said date, and the pay scales of officers who had retired prior to the said date had already been fixed and there was no question of re-fixation of their pay scales and all they were entitled to was pension which was not less than that received by Brigadiers who had been given the benefit of the revision of pay scales and, were, therefore, drawing a higher salary resulting in higher pension.

15. The learned Additional Solicitor General urged that the High Court had erred in directing that the pay of Major Generals who had retired prior to 1.1.1996 be re-fixed according to the revised pay scales so as to give them the benefit of higher pension than officers of the rank of Brigadier.

16. The case of the respondents however, was that in view of the Constitution Bench decision of this Court in D.S. Nakara and others vs. Union of India (1983) 1 SCC 305, the fixation of a cut-off date as a result of which equals were treated as unequals, was wholly arbitrary and had been rightly interfered with by the High Court. One of the questions posed in the aforesaid decision was whether a class of pensioners could be divided for the purpose of entitlement and payment of pension into those who retired by a certain date and those who retired thereafter. The question was answered by the Constitution Bench holding that such division being both arbitrary and unprincipled the classification did not stand the test of Article 14.

17. Several other decisions were also relied upon by the respondents, which, in fact, followed D.S. Nakara's case (supra) and there is, therefore, no need to deal with them separately.

18. It was also the respondents' case that though there was no dispute that Major Generals were entitled to higher pensionary benefits than that enjoyed by Brigadiers, the appellant erroneously insisted that the cut-off date had to be fixed in view of the limited financial resources available to cover the additional expenses to be incurred on account of revision of pay scales.

19. On behalf of the respondents reliance was also placed on two letters addressed by the Chairman, Chief of Staff Committee, dated 8.2.2006 and 21.2.2006, along with the recommendation made by the Air Chief Marshal on 17.2.2006, stating that it was necessary to correct the injustice and discrimination which had been aimed at denying those officers who had retired prior to 1.1.1996, the benefits of the pension enjoyed by officers who retired after the said date.

20. Mr. Nidhesh Gupta, learned Senior Counsel who appeared for the respondents, submitted that the judgment of the High Court did not call for any interference as the same had been rendered on the touchstone of Article 14 of the Constitution and in consonance with the principle of administrative fair play. He submitted that officers of the rank of Major General, who had retired prior to 1.1.1996 should not be made the target of the bureaucratic error committed by the Government in refixing the scale of pay of Brigadiers after 1.1.1996 in such a manner so that by adding the rank pay to their basic pay, their pay at the time of retirement was higher than that of a Major General which was a superior rank, thereby creating an anomaly in the pension entitlement of officers of the two aforesaid ranks.

21. Mr. P.N. Lekhi, learned senior counsel who appeared for the added respondents, while adopting Mr. Gupta's submissions referred to the decision of this Court in R.Viswan and others vs. Union of India and others, (1983) 3 SCC 401, on the question of morale and submitted that the arbitrary decision to discriminate between the two sets of officers belonging to the same rank in the matter of payment of pension was bound to adversely affect the morale of senior officers of the rank of Major General which was in fact the feeder post to the rank of Lieutenant General from amongst whom the Chief of Army Staff is ultimately chosen.

22. From the submissions made the dispute appears to be confined only to the question whether officers of the rank of Major General in the army and of equivalent rank in the two other wings of the Defence forces, who had retired prior to 1.1.1996, have been validly excluded from the benefit of the revision of pay scales in keeping with the recommendations of the Fifth Central Pay Commission by virtue of Special Army Instruction 2(S) 98.

23. On behalf of the appellant, Union of India, it has been sought to be contended that since the pay scale of those officers who had retired prior to 1.1.96 had already been fixed at the time of their retirement, the question of re-fixation of their pay scales on account of the revision could not be accepted as they would only be entitled to the benefits of higher pension on account of such revision. The learned Additional Solicitor General, Mr. Vikas Singh, had contended that since an anomaly had been created in the pension payable to officers of the rank of Major Generals, who on account of the revision of pay scales were receiving less pension than Brigadiers who were lower in rank, the Government had stepped up the pension of Major Generals who had retired prior to 1.1.1996, so that they did not receive pension less than what was given to officers of the rank of Brigadier.

24. The said decision of the Central Government does not address the problem of a disparity having created within the same class so that two officers both retiring as Major Generals, one prior to 1.1.1996 and the other after 1.1.1996, would get two different amounts of pension. While the officers who retired prior to 1.1.1996 would now get the same pension as payable to a Brigadier on account of the stepping up of pension in keeping with the Fundamental Rules, the other set of Major Generals who retired after 1.1.1996 will get a higher amount of pension since they would be entitled to the benefit of the revision of pay scales after 1.1.1996.

25. In our view, it would be arbitrary to allow such a situation to continue since the same also offends the provisions of Article 14 of the Constitution.

26. The question regarding creation of different classes within the same cadre on the basis of the doctrine of intelligible differentia having nexus with the object to be achieved, has fallen for consideration at various intervals for the High Courts as well as this Court, over the years. The said question was taken up by a Constitution Bench in the case of D.S. Nakara (supra) where in no uncertain terms throughout the judgment it has been repeatedly observed that the date of retirement of an employee cannot form a valid criterion for classification, for if that is the criterion those who retired by the end of the month will form a class by themselves.

In the context of that case, which is similar to that of the instant case, it was held that Article 14 of the Constitution had been wholly violated, inasmuch as, the Pension Rules being statutory in character, the amended Rules, specifying a cut off date resulted in differential and discriminatory treatment of equals in the matter of commutation of pension. It was further observed that it would have a traumatic effect on those who retired just before that date. The division which classified pensioners into two classes was held to be artificial and arbitrary and not based on any rational principle and whatever principle, if there was any, had not only no nexus to the objects sought to be achieved by amending the Pension Rules, but was counter productive and ran counter to the very object of the pension scheme. It was ultimately held that the classification did not satisfy the test of Article 14 of the Constitution.

27. The Constitution Bench has discussed in detail the objects of granting pension and we need not, therefore, dilate any further on the said subject, but the decision in the aforesaid case has been consistently referred to in various subsequent judgments of this Court, to which we need not refer.

28. In fact, all the relevant judgments delivered on the subject prior to the decision of the Constitution Bench have been considered and dealt with in detail in the aforesaid case.

29. The directions ultimately given by the Constitution Bench in the said case in order to resolve the dispute which had arisen, is of relevance to resolve the dispute in this case also.

30. However, before we give such directions we must also observe that the submissions advanced on behalf of the Union of India cannot be accepted in view of the decision in D.S. Nakara's case (supra). The object sought to be achieved was not to create a class within a class, but to ensure that the benefits of pension were made available to all persons of the same class equally. To hold otherwise would cause violence to the provisions of Article 14 of the Constitution. It could not also have been the intention of the authorities to equate the pension payable to officers of two different ranks by resorting to the step up principle envisaged in the Fundamental Rules in a manner where the other officers belonging to the same cadre would be receiving a higher pension.

31. We, accordingly, dismiss the appeal and modify the order of the High Court by directing that the pay of all pensioners in the rank of Major General and its equivalent rank in the two other Wings of the Defence Services be notionally fixed at the rate given to similar officers of the same rank after the revision of pay scales with effect from 1.1.1996, and, thereafter, to compute their pensionary benefits on such basis with prospective effect from the date of filing of the writ petition and to pay them the difference within three months from date with interest at 10% per annum. The respondents will not be entitled to payment on account of increased pension from prior to the date of filing of the writ petition.

32. The appeal is accordingly dismissed.

33. There will be no order as to costs.

                                                                                                            Altamas Kabir JJ