Without Comment – A Faithful Re-production in Word Format
Of Attachment with GoI/MoD Letter F. No. 35 (1) 2013 – D (Pay/Services) dated 13th February in response to RTI application
The text from the letter
Diary No 3534
Diary No 4246
Office of R.M
Dairy No. 3745
Dairy no. 4246
Date: 09 APR 2010
Dairy no. 1901-F
Office of Director (AG)
Dairy no. 1314
This is regarding order dated 8.3.2010 (please refer to margin) of the Hon’ble Supreme Court in Writ Petition (c) No. 96/2009, Writ Petition (c) No. 34/2009 both filed against Union of India and Transfer Petition (c) No. 56 of 2007 filed by Union of India in the Hon’ble Supreme Court on the issue of Rank Pay.
2. Briefly, the issue dates back to 1987 when the recommendations of the Fourth Central Pay Commission were implemented for all Central Government employees, including those in the Armed Forces. Going with the specific recommendations of the Pay Commission (Flag A), it was decided in consultation with Ministry of Finance that while calculating revised pay of the officer up to the rank of Brigadier, Rank Pay of the officer as on 1.1.1986 would be deducted from existing emoluments and after the revised pay is fixed in the revised pay scale, Rank Pay as per the rank of officer would be added. In one case involving an officers Major Dhanapalan, the Hon’ble Kerala High Court, vide its order dated 5.10.1998 (flag B), decided that no deduction of Rank Pay would be made while calculating revised pay. The appeal of the Government in the Hon’ble High Court was also dismissed vide Division Bench order dated 4.7.2003 (Flag C). Subsequent S.L.P filed in the Hon’ble Supreme Court against the decision of Kerala High Court was dismissed on 12.7.2005 (Flag D) on account of delay alone. In light of this, the decision of the Kerala High Court was implemented in favour of the officer vide AHQ letter dated 26.8.2005 (Flag E).
3. After the matter was decided by Kerala High Court in favour of the applicant officer, a number of officers started filing writ petitions on this count in different High Courts. Accordingly, the matter was discussed at the highest level in the Ministry in consultation with Ministry of Finance and it was decided to file a Transfer Petition in the Hon’ble Supreme Court. Therefore, TP (C) No. 56 of 2007 was filed in the Hon’ble Supreme Court seeking transfer of 11 cases from High Courts. The then Additional Solicitor General, Shri Gopal Subramanium had intervened and obtained stay order on 5.2.2007 (Flag F) from the Hon’ble Supreme Court. This Transfer Petition and two more Writ Petitions on the same subject filed by groups of officers directly in the Hon’ble Supreme Court were tagged together.
4. These matters were atekn up for hearing in the Hon’ble Supreme Court on 8.3.2010 (Encl 198A). Shri Mohan Jain, Additional Solicitor General appeared for Union of India, alongwith some other Advocates. The Hon’ble Supreme Court, after hearing the arguments from both sides agreed with the reasoning given by the Kerala High Court in the matter. Accordingly, the Hon’ble Supreme Court vide its order dated 8.3.2010 has allowed two Writ Petitions (filed in the Hon’ble Supreme Court) as well as Writ Petitions covered in the Transfer Petition filed by the Union of India. The Hon’ble Court also directed for payment of interest @ 6% p.a.
5. As stated above, Ministry of Finance have been consulted in the matter at the time of filing of Transfer Petition and also when counter affidavit was filed against Writ Petition in the Hon’ble Supreme Court. All grounds, reasons in support of Government stand were put forth before the Hon’ble Court. But having considered all these reasons, the Hon’ble Court has held that the decision of the Kerala High Court should be made applicable to the officers in all Writ Petitions which have been allowed on 8.3.2010, Additionally, interest @ 6% per annum has also been ordered to be paid. While preparing counter reply, MoD called for the financial implications in the matter from CGDA. As per their note dated 22.12. 2009 (Flag G) financial implications were estimated to be Rs 433 crores, without taking into account financial implications on pensionary benefits in respect of Army and Navy officers. Apart from the financial implications, pay and pensionary benefits would have to be re-calculated from 1.1.1986 itself. This gigantic exercise would also entail further revision of pay and pension from 1.1.1996 and 1.1.2006 i.e., after Fifth CPC and Sixth CPC with additional interest thereon. Further, after this specific issue has been finally decided by the Hon’ble Supreme Court, the benefit would have to be allowed to al similarly placed officers.
6. In light of the above, it is strongly recommended that the matter may be placed before Legal Adviser (Defence) for his advice for filing a review Petition in the Hon’ble Supreme Court against its order dated 8.3.2010. It is also requested that advice of Shri Gopal Subramanium, Solicitor General may also be obtained in the matter as he was associated with the case when Transfer Petition was filed in the Hon’ble Court in 2007.
Submitted please. Sd/--------------
(P. S. Walia)
JS (E) Para 6 may kindly be approved.
As proposed, Finance Ministry
shall be kept in the picture.
Defence Secretary Pl discuss early
Discussed. This case may have
wide ranging financial implications.
We may take action as indicated in para 6 above.
Def Secy 16/3
AS (M) sd/- 16/3
Notes 200-203 would recall the issue.
2. As approved by RM, Legal Advisee (Defence) is requested to take action as per para 6 of nore 200. A copy of the advice dated 12.9.2006 given by Shri Gopal Subramanium, the then Additional Solicitor general is also placed in file as F/X.
Legal Adviser (Defence)
Diary No. 0584/X/LA (Def)
Ministry of Law & Justice
Department of Legal Affairs
OFFICE of LA (DEF)
Refer preceding notes.
2. The reference under consideration is as o whether the Review Petition under Article 137 of the Constitution of India may be filed against order dated 08.03.2010 in WP (C) No.96/2009 between Sunil Kumar Chand & Ors Vs UoI & Ors passed by Hon’ble Supreme Court (Flag Y).
3. The brief facts of the case may be perused in the referring note. This is regarding implementation of the recommendations of the Furth Central Pay Commission. It was decided in consultation with the Ministry of Finance that while calculating revised pay of the officers upto the rank of Brigadier, rank pay of the officer as on 1.1.1986 would be deducted from 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. In case of major Dhanapalan, Single Judge of Kerala High Court vide order dated 05.10.1998 (Flag B) in OP 2448/1996 directed the Deptt to re-fix the pay w.e.f. 01.01.1098 without deducting the rank pay of Rs 200/-. Deptt challenged the order of Single Judge before Division Bench. The Division Bench of the Kerala High Court vide order dare 04.07-2003 (Flag C) dismissed the appeal. The SLP filed by the Deptt was dismissed on 12.07.2005 on the ground of delay.
4. After the Kerala High Court judgment, the number of officers started filing writ petitions in different High Courts. Later on, the cases pending before High Court were got transferred to Apex Court. Hon’ble Apex Court vide order dated 08.03.2010 held as under: -
“We have carefully perused the judgment dated 05.10.1998 of the
Learned Single Judge as well as judgment dated 04.07.2003 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 01.01.1986. We also direct interest to be paid thereon at 6% p.a.
Accordingly, these writ petitions as well as the transferred writ petitions
5. We have carefully examined the matter. The review under Article 137 of the Constitution of India before the Hon’ble Supreme Court of India is exercisable in accordance with the rules made under Article 145 of the Constitution of India. The rules permits the review on three grounds mentioned in Order 47 Rule 1 of CPC viz.
a. Discovery of new facts;
b. Mistake or error apparent on face of record, and
c. Any other sufficient reason.
In the note of reference for opinion, Deptt has stated that the financial implications were estimated to be Rs 433 crores, without taking into account financial implications on pensionary benefits in respect of the Armed Forces Officers. Apart from the financial implications, pay and pensionary benefits would have to be re-calculated from 01.01.1986 itself. This gigantic exercise would also entail further revision of pay and pension from 01.01.1996 and 01.01.2006 i.e. after Fifth CPC and Sixth CPC with additional interest thereon and the benefit would have to be allowed to all similarly placed officers. The matter is within limitation period of 30 days. Deptt has already obtained the approval of Hon’ble Raksha Mantri in the matter and suggested that the opinion of Ld. Solicitor General may be obtained.
6. However, we may request the Central Agency Section to place the matter before Ld. Solicitor General for seeking his considered opinion to file a Review Petition under Article 137 of the Constitution of India.
May kindly see.
(B. K. Kulshreshtha)
Asst Legal Adviser (Defence)
Legal Adviser (Defence)
(Shri Inder Kumar) Sd/- 22-3-10
(Shri R.L. Koli) Sd/- 23/3
May kindly give the opinion
regarding the feasibility of
filing the Review petition in
the instant case. Sd/-
T. N. Tiwari
JS & LA
Ld S G
(Sh Gopal Subramanium)
In view of the serious
Financial implications, a
high powered committee headed
by Defence Secretary may be
constituted to asses the financial
impact. Certified in public interest
as fit for Review/Recall.
Solicitor General of India
Shri T. N. Tiwari, JS & LA, CAS
Addl Secy (Shri R.L.Koli) Sd/- 1.4.10
LA (Def) sd/- 1-4-10
May kindly peruse Note 207 of learned Solicitor General of India with reference to approval of Raksha Mantri at Minute 203/ante.
2. Solicitor General has opined that in view of the serious financial implications, a High Powered Committee headed by Defence Secretary may be constituted to assess the financial impact. He has further certified in public interest that the case is fit for Review/Recall.
3. Hence, it is necessary to constitute a High Powered Committee to assess the financial implications which are involved in the implementation of the order of Hon’ble Supreme Court dated 8.3.10 (placed opposite – flag ‘Y’.)
4. In view of the huge financial implications and importance of the case, it is proposed that following High Powered Committee may be constituted: -
(i) Defence Secretary
(ii) Secretary, Department of Expenditure
(iii) Secretary (Defence Finance)
5. Defence Secretary may kindly approve. A draft O.O. is also placed opposite for approval.
Joint Secretary (E)
AS (M) -209-
View of MoF are at note 138 ante. Defence Secretary
and RM had seen this file with note 203 ante.
Para 4 of note above for kind approval
I have spoken to Secty Dept of Exp
and Secty Def. Finance, who have consented
to be part of this committee.
R.M. may kindly approve.
3 / 4
AS (M) Sd/- 5/4
JS (E) Sd/- 5/4
Issue ------------------------------------------------------ Encl 211/A
Receipt --------------------------------------------------- Encl 212/A
(certified copy of order
Issue -------------------------------------------- Encl 213/A
Receipt ----------------------------------------------- Encl 214/A
Receipt ------------------------------------------------- Encl 215/A
High Powered Committee met on 7/4/2010. Copy of Report of the Committee is placed o Encl 215/A. (Original Report has been left with Dir (AG) to kept in safe custody)
Sd/- P.S. Walia
Notes from 208-210/ante may kindly be perused. As approved by R.M (Note 210/ante), a High Powered Committee comprising of Defence Secretary, Secretary (Deptt. of Expenditure) and Secretary (Defence Finance) was constituted on 5.4.2010. The Committee met on 7.4.2010 and took note of the financial implications as worked out by Controller General of Defence Accounts (CGDA). The Report of the Committee is placed opposite at Flag ‘AA’. Arrears on account of pay and pension were assessed to be around Rs 426 crores and Rs 83 crores respectively. Interest @ 6% per annum on these arrears as ordered by the Hon’ble Supreme Court has been found to be Rs 1114.71 crores approximately. Thus total financial liability come to around Rs 1623.71 crores.
2. Taking note of the above mentioned one-time financial implications and enhanced recurring implications, the Committee has taken a view that these facts may be submitted to the Hon’ble Supreme Court for consideration.
3. Report of the High Powered Committee is submitted for perusal of RM.
(P. S. Walia)
May kindly be submitted to RM for perusal.
2. Further action in the matter will be taken in consultation with Solicitor General of India.
Sd/- A Misra
Def Secy sd/- 9/4
JS (E) sd/- 9/4
Dir (AG) sd/- 9/4/10
Under Secretary (P/S)