Wednesday 10 April 2013

Part III - Reply to RTI dated 3.4.13 - TRIPAS, CGDA and MoD (Fin)



Reply dated 3.4.2013 to RTI – TRIPAS, CGDA, Def (Fin)

Part III
********
Encl 62/A
MOST IMMEDIATE
MEETING NOTICE
Ministry of Defence
D (Pay/Services)

Subject: Implementation of Hon’ble Supreme Court order dated
4.9.2012 given in IA No. 9 of 2010 in Transfer Petition
No. 56 of 2007 filed by UoI v/s N.K. Nair & Ors: Rank Pay.
******

            Additional Secretary (A) will take a meeting on 4.12.2102 at 1000 hours in his Chamber (Room No. 199-B, South Block) to discuss the above subject.

2.                  The addressees are requested to kindly make it convenient to attend the meeting.


Sd/---------------------
(Praveen Kumar)
Director (AG.I)
2301 1593
1. Jt CGDA IAT.I) Shri Mohinder Singh
2. JS & Addl FA (M)
MoD ID No. PC. 34 (6)/2012-D(Pay/Services) dt. 3.12.2102

Copy to: PPS to AS (A)
               PPS to JS (E)
*****
Encl 66/A
Most Immediate
Court Case
Ministry of Defence
D (Pay/Services)

Sub: Implementation of Supreme Court order dated 4.9.2012 in the rank pay case.

            With reference to the discussions held in the office of the AS (A) on 4.12.2102 on the subject, it is requested that a revised DGL may be furnished regarding the modalities and methodology of payment in the Supreme Court Rank Pay Judgment dated 4.9.2012, which should address the following issues:

(i) Whether minimum of basic pay will not change consequent upon re-fixation of pay as Rank Pay is not part of Basic Pay. 

            (ii) Whether Integrated Pay Scale will also not change consequent upon re-fixation of pay.

(iii) Whether only pay related allowances (Dearness Allowance, Interim Relief, Dearness Pay) and also (Non-Practising Allowance in respect of AMC/ADC/RVC) will change consequent upon re-fixation of pay.

(iv) How the pay even over and above the maximum pay scale will be treated consequent upon re-fixation of pay and whether it is in consonance with the existing procedure being followed in such cases.

(v) Whether Grade Pay will also change consequent upon re-fixation of pay after 1.1.2006.

(vi) Whether the Affidavit filed by the Committee of Three Secretaries in the Supreme Court will have any impact on the re-fixation of pay in the Rank Pay case.

2.                  The revised DGL duly concurred by Def (Fin) should reach MoD by 6.12.2012 positively.

Sd/--------------------------
(Praveen Kumar)
Director (AG.I)
Jt CDGA (AT.I) Shri Mohinder Singh
MoD ID No. 34(6)2012-D (Pay/Services) dated 6.12.2012

Copy for necessary action to: Def (Fin)/AG-PA

*****
Encl 66/B
IV CPC
Integrated Pay Scale, Rank Pay & Minimum Pay in the Integrated Scale
Existing as well as proposed in the DGLs of TRIPAS and CGDA/Def (Fin)

Rank
Existing Integrated Pay Scale /(Rank Pay)
(Before Order)
Existing Minimum Pay in the Integrated Scale
(Before Order)
Integrated Pay scale/(Rank Pay) proposed by TRIPAS
(after order)
Minimum pay in the integrated scale proposed by TRIPAS
(after order)
Integrated pay scale/Rank pay/Minimum pay in the integrated scale proposed by CGDA in ther DGL and agreed by Def (Fin)
Lt
2300-100-3900-4200-150-5100
(-)
2500
2300-100-3900-150-5850-200-6450
(-)
2500

*
Capt
2300-100-3900-4200-150-5100
(200)
2800
2300-100-3900-150-5850-200-6450
(200)
3000

*
Major
2300-100-3900-4200-150-5100
(600)
3400
2300-100-3900-150-5850-200-6450
(600)
4050

Lt Col
2300-100-3900-4200-150-5100
(800)
3900
2300-100-3900-150-5850-200-6450
(800)
4800


*
Col
2300-100-3900-4200-150-5100
(1000)
4500
2300-100-3900-150-5850-200-6450
(1000)
5550

*
Brig
2300-100-3900-4200-150-5100
(1200)
4950
2300-100-3900-150-5850-200-6450
(1200)
6250


*

*CGDA’s Views:  (a) The Court judgment does not have any mention about revision of Integrated pay scale adding Rank Pay to it. Hence, revision of Integrated pay scale with change rate of increments is not covered. If it is done, the pay scale fixed for the rank of Major General and above may get burst.

(b) No change to minimum pay fixed for each rank is required because the Integrated pay scale has been devised considering the total service span of twenty three years from the rank of Lt to Brig.

V CPC
Pay scale & Rank Pay: Existing as well as proposed in the DGLs of TRIPAS and CGDA/Def (Fin)

Rank
Existing Pay Scale (Rank Pay) Before Orders
Pay Scale/(Rank Pay) proposed by TRIPAS After Orders
Pay Scale /(Rank Pay) proposed by CGDA in DGL and agreed by Def (Fin)
Capt
9600-300-11400
(400)
10000-325-11950
(400)

*
Major
11600-325-14850
(1200)
12800-375-16550
(1200)

*
Lt Col
13500-400-17100
(1600)
15100-400-18700
(1600)

*
Col
15100-450-17350
(2000)
17100-450-19350
(2000)

*
Brig
16700-450-18050
(2400)
19100-500-20600
(2400)

*

* CGDA views: -
(a) The pay of the affected officers as on 1.1.1996 will be revised considering the pay in the Integrated scale as on 31.12.1995 consequent upon the revision carried out as on 1.1.86 without deducting Rank Pay. Hence no amendment to SAI 2/S/98 issued after V CPC is required.
(b) The provisions of SAI 2/S/98 stand correct for officers in service as on 1.1.96 and commissioned thereafter. Therefore the revision of pay scales as proposed by TRIPAS becomes irrelevant.
(c) The Rank Pay element was introduced in IV Pay Commission which has very much gone into the pay fixation formula while implementing V CPC.   

Defence Finance views: -
            The Supreme Court order pertains specifically to amendment in the formula of pay fixation based on IV CPC recommendations for addition of Rank Pay, the implementation should be restricted to requisite amendment in the pay fixation formula of IV CPC only. The pay scales/pay bands recommended by V and VI CPC need not be altered. 

VI CPC
Pay Scale/(Pay band) & Grade Pay: Existing as well proposed in the DGLs of TRIPAS and CGDA/Def (Fin)

Rank
Existing Pay scale/(Pay Band)
Existing Grade Pay
Pay Scale/(Pay Band) proposed by TRIPAS 
Grade Pay proposed by TRIPAS
Pay Scale/(Pay Band) Grade Pay proposed by CGDA in the DGL and agreed by Def (Fin)
Capt
15600-39100
(PB-3)
6100
15600-39100
(PB-3)
6600
*
Major
15600-39100
(PB-3)
6600
15600-39100
(PB-3)
7600
*
Lt Col
37400-67000
(PB-4)
8000
37400-67000
(PB-4)
8700
*
Col
37400-67000
(PB-4)
8700
37400-67000
(PB-4)
9000
*
Brig
37400-67000
(PB-4)
8900
37400-67000
(PB-4)
10000
*

*CGDA’s views:  In case the pay being drawn by the officers as on 31.12.05 gets affected due to the revision carried out as on 1.1.86 as per Court order, the pay as on 1.1.2006 will be revised w.r.t. to the instructions laid down in SAI 2/S/08 issued after VI CPC. Hence the changes proposed in the pay band and grade pay are irrelevant.

*****
Encl 68/A
MOST IMMEDIATE
MEETING NOTICE
Ministry of Defence
D (Pay/Services)

Subject: Implementation of Hon’ble Supreme Court order dated
4.9.2012 given in IA No. 9 of 2010 in Transfer Petition
No. 56 of 2007 filed by UoI v/s N.K. Nair & Ors: Rank Pay.
******

            Additional Secretary (A) will take a meeting on 6.12.2102 at 1230 hours in his Chamber (Room No. 199-B, South Block) to discuss the above subject.

2.         The addressees are requested to kindly make it convenient to attend the meeting.


Sd/---------------------
(Praveen Kumar)
Director (AG.I)
2301 1593
1. JS & Addl FA (M)
2. LA (Defence)
3. JT CGDA (AT.I) (Shri Mohinder Singh)

MoD ID No. PC. 34 (6)/2012-D(Pay/Services) dt. 6.12.2102

Copy to: PPS to AS (A)
               PPS to JS (E)
*****

Encl 69/A
Most Immediate
Court case
Subject: Implementation of Hon’ble Supreme Court order dated
4.9.2012 in Rank Pay case


            With reference to the discussions held in the office of AS (A) on 6.12.2012 on the subject and in continuation of letter of even number dated 6.12.2012, it is requested that a revised DGL may be furnished regarding the modalities and methodology of payment in the Supreme Court Rank Pay Judgment dated 4.9.2012, which should also address the following issue:   

(i) The principle for re-fixation of pay without deduction of Rank Pay in case of the affected officers will be adopted for IV CPC and the same principle will be followed for the V CPC.

2.                  The revised DGL should be submitted to Def (Fin) and LA (Defence) for vetting and copy of the same should be endorsed to MoD on 6.12.2012 positively.

3.         CGDA should also make rank-wise calculations of the minimum and the maximum pay scales based on the proposed revised DGL and submit the same to MoD duly vetted by Defence Finance on 6.12.2012 positively
Sd/---------------------
(Praveen Kumar)
Director (AG.I)
2301 1593
Jt CGDA IAT.I) Shri Mohinder Singh
MoD ID No. PC. 34 (6)/2012-D(Pay/Services) dt. 6.12.2102

Copy for necessary action to: (i) Def (Fin)/AG-PA
                                                (ii) LA (Defence)
*****
Encl 70/A
MOST IMMEDIATE
MEETING NOTICE
Ministry of Defence
D (Pay/Services)

Subject: Implementation of Hon’ble Supreme Court order dated
4.9.2012 given in IA No. 9 of 2010 in Transfer Petition
No. 56 of 2007 filed by UoI v/s N.K. Nair & Ors: Rank Pay.
******

            Defence Secretary  will take a meeting on 7.12.2102 at 1530 hours in Room No. 203, South Block to discuss the above subject.

2.                  The addressees are requested to kindly make it convenient to attend the meeting.


Sd/---------------------
(Praveen Kumar)
Director (AG.I)
2301 1593
1. FA (DS)
2. JS & Addl FA (M)
3. CGDA
4. D/O Legal Affairs, Shri M.K. Sharma, Addl Secretary
5. D/O Expenditure, Mrs Sudha Krishnan JS (Pers)
6. LA (Defence)
7. JT CGDA (AT.I) (Shri Mohinder Singh)
8. D/o Expenditure (Shri A.N. Singh, Dy Secretary)
MoD ID No. PC. 34 (6)/2012-D(Pay/Services) dt. 6.12.2102

Copy to: SO to Defence Secretary  
PPS to AS (A)
                        PPS to JS (E)
                        US (Estt.2)/Genl. I
*****
Encl 71/A
Urgent/Court case

Office of the CGDA, Ulan Batar Road, Palam, Delhi Cantt-10

Subject: Implementation of Hon’ble Supreme Court order dated 4/9/2012
in IA No. 9 of 2010 in Transfer Petition No. 56 of 2007 filed by UoI v/s N.K. Nair & Ors on the matter of Rank Pay.

Reference: MoD, D (Pay/Services) two IDs both bearing No. 34 (6)/2012 – D(Pay/Services) dated 06/12/2012 addressed to this HQ office and copy to your office.
*****

            As desired in MoD Ids cited above, the revised DGL addressing the issues regarding minimum pay for each rank, integrated scale, method of fixation of pay from 01/01/1996 and admissibility of Grade Pay is forwarded herewith for consideration.

2.                  Regarding Dearness Allowance, Interim Relief and Dearness Pay and Non-Practising Allowance in r/o AMC/ADC/RVC there is already provision in Para 2 (e) of the DGL.
 
3.                  Following is submitted for consideration regarding method/procedures if the pay crosses the maximum of the pay scale after requisite fixation and whether the excess amount should be treated as personal pay or otherwise in Para 1(iv) of MoD ID dated 06/12/2012.

a)      Para 6 (c) of SAI 1/S/1987 stipulates that if the amount computed as per sub-para a(ii) of the ibid SAI is more than the maximum of the revised scale, the pay will be fixed at the maximum of the revised scale. There is no provision in this clause to allow the excess amount as personal pay to be absorbed in future increases in pay.
b)      However, as per para 6 (j) of the ibid SAI where the existing emoluments as calculated in accordance with sub-para (e) or (g) of the ibid SAI exceed the revised emoluments so fixed in the case of any officer, the difference shall be allowed as personal pay to be absorbed in future increases in pay. It may be stated that in this clause there is comparison between “existing emoluments” and “revised emoluments.” Therefore, this clause is not applicable for protecting the pay in subject cases.
c)      In view of the above, if any protection is to be given, suitable amendments in the provisions of para 6 (c) of SAI 1/S/1987 and corresponding provisions of SNI and SAFI would be required.    

4.                  The DGL has been prepared by this HQ office as per the Hon’ble Supreme Court order dated 04/09/2012. The DGL caters for the affidavit filed by the Committee of Three Secretaries in Supreme Court. However, Secretary Defence (Finance) being one of the signatories, views of MoD (Finance) may be obtained in this regard.

5.         The details of rank-wise calculations of the minimum and the maximum of the pay scales as per proposed revised DGL have been called for from the PCDA (O) Pune. The same will follow shortly. 

                                    Sd/-------------
(K L Mound)
ACGDA (AT-I)
Phone No.011-25665581
Sh. B. K. Mukhopadhyay
JS & Addl FA (M)
MoD (Finance) (AG/PA)
New Delhi
---------------------------
UO No. AT/I/1483-Army/X (PC) III dated 07/12/2012

Copy to:
Shri Praveen Kumar
Director (AG-I)
MoD, D (Pay/Services)
Sena Bhawan
New Delhi
            : For information. A copy of the revised DGL is enclosed herewith.
Sd/-------------
(K L Mound)
ACGDA (AT-I)
Phone No.011-25665581
**********

Encl 75/A
Telephone: 23011257

PC-C/7026/6th CPC/Vol-III                                                                                           04 Dec 2012

ADJUTANT GENERAL’S BRANCH
(Tri Service Pay Staff)

IMPLEMENTATION OF HON’BLE SUPREME COURT ORDER DATED 4.9.2012
IA No. 9 of 2010 in TRANSFER PETITION (C) No. 56/2007
UOI v/s N.K. NAIR & Ors ON THE RANK PAY CASE

1.                  Please refer MoD Note ID No. 34 (6)/2012-D(Pay/Services) dt 26 Nov 12.

2.                  In order to finalise and revise the DGL of the Armed Forces as directed by MoD note ibid, a meeting was scheduled in the office of Chairman PARC on 04 Dec 12 with representatives from CGDA and MoD (Finance).

3.                  CGDA vide their letter UO No. AT/I/1483-Army/X (PC) III dated 03 Dec 12 have informed that the DGL has already been revised and submitted to MoD and therefore have stated that attending the meeting for the purpose is not considered necessary at this stage.

4.                  In view of the above, it is requested that a copy of the DGL submitted by CGDA be forwarded to this office at the earliest to finalise consultative DGL in accordance with Para 2 of GoI, MoD letter No. 34 (6)/2012-D (Pay/Services) dt 26 Nov 12.

Sd/--------------------
(RS Chowdhury)
Captain (IN)
Director TRIPAS
MoD D(Pay/Services
Sena Bhawan

Copy to:

Office of the CGDA, Ulan Bator Road, Palam Delhi Cantt -10

SAPCS
Army HQs Sena Bhawan

PDPA
Naval HQ, Sena Bhawan

AFPIC
Air HQ RK Puram
*****

Encl 76/A
Telephone: 23011257

PC-C/7026/6th CPC/Vol-III                                                                                           06 Dec 2012

ADJUTANT GENERAL’S BRANCH
(Tri Service Pay Staff)

IMPLEMENTATION OF HON’BLE SUPREME COURT ORDER DATED 4.9.2012
IA No. 9 of 2010 in TRANSFER PETITION (C) No. 56/2007
UOI v/s N.K. NAIR & Ors ON THE RANK PAY CASE

1.         Refer to MoD Note ID No. 34(6)/2012-D (Pay/Services) dated 26 Nov 12.

2.                  The requisite clarifications/comments from the Armed Forces on the observations of the following correspondence are placed as Annexure as indicated below:

            (a)        CGDA UO No. AT/I/1483-Army/X (PC)/III dated 22 Nov 12 – Annexure 1

            (b)        MoD (Fin) ID No. 8 (13)/2012-AG/PA dated 20 Nov 12          - Annexure 2

            (c)        MoD (Fin) ID No. 8 (13)/2012-AG/PA dated 21 Nov 12          - Annexure 3
Sd/--------------------
(RS Chowdhury)
Captain (IN)
Director TRIPAS
Director (AG.I)
MoD D(Pay/Services
Sena Bhawan
Annexure 1

CGDA OBSERVATIONS ON IMPLEMENTATION OF HON’BLE SUPREME COURT ORDER
DATED 04/09/2012 IN IA No. 9 OF 2010 IN TRANSFER PETITION (C) 56 OF 2007 FILED
ON BEHALF OF UoI v/s N.K. NAIR & Ors ON THE MATTER OF RANK PAY:
VETTING OF DGL REGARDING

OBSERVATION BY CGDA
TRI-SERVICES COMMENTS
Para 2
The Hon’ble Supreme Court in its judgment dated 08/03/2010 have upheld the judgment dated 05/10/1998 of Kerala High Court. Upon further hearing the Hon’ble Apex Court in its final judgment dated 04/09/2012 has affirmed its earlier judgment dated 08/03/2010 that “…this order shall govern all similarly situated officers”… with modification of the interest part. As such, the Apex Court judgment dated 04/09/2012 may be implemented in the same way as was done in the case of Maj (retd) AK Dhanapalan. In this regard views of MoF, vide Para(b)(iv) of MoD, D (Pay/Services) ID dated 12/11/2012 on the subject also refer. If extended benefits are allowed, it may not stand in audit.    
The words “similarly situated officers” is being quoted out of context. The court ruling is not about paying arrears as was done in the case of Maj Dhanapalan which is partially quoted by CGDA. The entire line of the order reads “it is clarified that this order shall govern all similarly situated officers who have not approached the court and also those who have filed writ petitions which are pending before various High Courts/Armed Forces Tribunal.” Accordingly the order is to apply to all the officers who have not prayed to various courts and have been affected by no-inclusion of rank pay without quoting the precedence set in Dhanapalan’s case. The contention of CGDA that if extended benefits are allowed, may not stand in audit is also misplaced as audit is required to comply with Govt order issued in compliance of Court order.    
Para 3 (2)
High Court of Kerala and Hon’ble Supreme Court judgment have made no mention about admitting consequential benefits due to revision of pay during the service. Besides, the pay of the officers who joined the service after 01/01/1986 has been correctly fixed in the minimum of the Integrated Pay Scale as per the rank held. There was no deduction of rank Pay while fixing the Pay of such officers in the Integrated Pay Scale. Hence they may not be covered for revision of Pay as per Supreme Court order.
The Court order has laid down the guiding principle. The principle needs to be applied in the manner as directed by the Court. The RATIO has been settled and the Law is that Rank Pay, which was wrongly deducted has to be added back to the revised pay. The contention that no mention has been made for consequential benefits is not correct. If the pay of an officer is revised wef 01/01/1986 then all such benefits related to pay such as HRA during service and gratuity, commutation etc on retirement will automatically get revised.

The contention that officers who joined service after 01.01.86 have been correctly fixed is also incorrect. The edifice of Maj Dhanapalan case lies on the minimum pay of each rank as laid down in pay instruction, was incorrect as it was arrived at after deducting relevant Tank Pay to the particular rank. In 5th CPC Report at Para 147.12 it is clearly stated that “to compensate for ranks attained. Rank pay is also granted which attracts DA and is reckoned for pensionary benefits. The Integrated Pay Scale has a fixed minimum pay for each rank linked to number of years taken to achieve such rank. The resultant effect is that personnel belonging to a particular rank with equal number of years of service are remunerated equally.” The revised 4th CPC was based on pay drawn as per 3rd CPC scales on 01.01.86. To understand the issue the following example is relevant:
Rank
Pre-revised pay
Revised pay
Revised pay as per Supreme Court order
Capt/eqvt
1200
2800+200 (Rank Pay)
3000+200 (Rank Pay)
STS (Civ)
1200
3000
3000
** Pay to be fixed as per relevant Civilian scale and Rank Pay to be paid in addition.
The pay scale of all Captains in III CPC was starting at Rs 1200, the incorrect replacement was Rs 2800+200 which now stands corrected to Rs 3000+200. There is no instance of same rank officers having two different pay scales in the same commission. The Capt/eqvt replacement pay in the new minimum pay for a Capt/eqvt promoted any date after 01.01.86 will have to be based on the above principle at Rs 3000+200.
Section I Para 4
The justification given by Service HQ does not seem to be as per court order. The court judgment does not have any mention about revision of Integrated pay scale adding Rank Pay to it. Hence, revision of integrated pay scale with changed rates of increments is not covered as per Court order. If it is done, the Pay scale fixed for Maj Gen & above may get burst.
The justification given in the DGL is derived from the order of the Supreme Court. The moot issue is that Rank Pay was wrongly deducted at all ranks which is now to be added back. The Kerala High Court acknowledged in its judgment that RANK PAY was in addition to pay scales. Thus RANK PAY has to be added to the minimum of each rank worked out after applying the fixation formula of 4th CPC to the pre-revised minimum (3rd CPC) of the particular rank. Another example of Maj in support is shown below:
Rank
Pre-revised Pay
Revised Pay as per 4th CPC
Revised Pay as per SC Order
Maj/eqvt
1700
3400+600 (Rank Pay)
4000+600
JAG (Civ)
1700
3900
3900 as per GoI
Lt Col/eqvt
1950
3900+800
4400+800
NFSG
1900
4400
4400 (as per GoI)

The low fixation for the minimum pay of the rank in the case of Defence Officers vis-à-vis similarly placed civilian officers resulted in disparity which has now been rectified by the order of the Hon’ble Supreme Court. This inaccuracy is the bedrock of the judgment and if not corrected will be seen as disregard of court order. The pay scale of Maj Gen/eqvt getting burst may have to be tackled separately, if required and cannot form the reason for denying legitimate dues to other officers in the rank of Capt to Brig and equivalent. 
Para 5 (a) (iii)
No change is required to minimum pay fixed for each rank because integrated pay scale from Rs 2300-100-3900-150-4200-EB-150-5100 has been devised considering the total service span of 23 years from rank of Lt to Brig. Since there are no directives from Hon’ble Supreme Court for revision of the scale as per 4th CPC, the change in minimum pay for each rank has no relevance.
As explained above the minimum has to undergo a change for it was wrongly determined by deducting rank pay.

Rank
Pre-revised pay
Revised pay
Revised pay as per Supreme Court order
Capt/eqvt
1200
2800+200 (Rank Pay)
3000+200 (Rank Pay)
STS (Civ)
1200
3000
3000

The minimum as shown above for Capt/eqvt should have been Rs 3000, but by deducting Rs 200, the same has been reduced to Rs 2800. Hon’ble SC has stated it is to be restored to Rs 3000 and Rank Pay to be paid in addition.
Para 5 (c)

Since officers commissioned after 01/01/86 are not affected by the Court order, the provisions for revision of pay as per the order may not be made applicable to these officers.
This conclusion seems unilateral and may be misplaced. The fact is that two officers holding the same rank within currency of the same Pay Commission cannot have two different start of pay. The formula settled for 01.01.86 for Capt/eqvt and above has to be necessarily applied to all Capts/eqvt and above promoted any day after 01.01.86. In 5th CPC Report at Para 147.12 it is clearly stated “to compensate for ranks attained. Rank pay is also granted which attracts DA and is reckoned for pensionary benefits. The Integrated Pay Scale has a fixed minimum pay for each rank linked to number of years taken to achieve such rank. The resultant effect is that personnel belonging to a particular rank with equal number of years of service are remunerated equally.”
Para 5 (d) & (e)
On completion of qualifying service for the rank and on promotion, the officers will be entitled to get the minimum pay of the rank as per SAI 01/S/87, pay proposed in DGL vide para 5 (a) (iii) may not ben applicable in such cases. The comments against para 5 (a) (iii) may also be referred in this regard.
They are entitled to minimum pay which now stands revised in light of the SC Judgment. The view taken by CGDA is in complete disregard to pay fixation formula and there is contravention of all laid down rules of pay. The very fact that as per CGDA there have to be two types of pay scales i.e. one applicable to Capts to Brigs who held the rank as on 01.01.86 and another set of (lower) pay scales to those promoted after 01.01.86 is faulty and unimplementable. There is no such precedence and rule to support this view (of the CGDA).
Section II
Para 6 (a)
The pay of affected officers as on 01/01/1996 will be revised considering the pay in the integrated scale being drawn as on 31/12/1995 consequent upon the revision carried out as on 01/01/1986 without deducting rank pay in compliance of subject Apex Court order. Hence, no amendments to SAI 02/S/1998 are required for implementation of the court order.
Again the view of CGDA appears to disregard Fundamental Pay Rules. The pay scale of V CPC are a replacement of minimum Pay + Rank Pay of the rank as per 4th CPC. Now as per Court order the 4th CPC pay is revised to minimum shown in SAI/SNI/SAFI by adding the relevant Rank Pay. If this minimum undergoes a change, the replacement pay as per 5th CPC has to undergo change. To illustrate:
Rank
Min as per SAI
Revised start of the scale
Capt/eqvt
2800
9600
As per SC Order and in conformity with civil side
3000
10000

The pay has to be revised now, as the 5th CPC carried forward the wrong formula by taking a lower minimum as shown above. Therefore, the pay of 5th CPC has to be accordingly revised. It is pertinent to emphasise that HPC as well as the Affidavit/Additional Affidavit submitted by MoD has clearly given that pay as on 01.01.96 and 01.01.06 will have to be revised with simultaneous revision of all pay linked allowances/benefits.
Para 7

Since the provisions of SAI 02/S/98 stand correct for officers in service as on 01/01/1996 & commissioned thereafter, the pay scales as mentioned at Para 6 of DGL become irrelevant.
This view is not corroborated by facts. As per para 148.2 of 5th CPC it is stated that “For Service Officer upto the rank of Brigadier who are brought on to regular scales of pay from the existing integrated scale, we suggest that for fixation of pay, the existing Rank Pay may be taken into account but pay in revised scales be fixed after deducting the revised amount of Rank Pay.” As it is the SC order clearly states that Rank Pay is not to be deducted. It is evident from the para above, in the 5th CPC Report, rank pay was deducted in determining pay scales and pay fixation in 5th CPC as well. Thus, both the pay fixation and scales will necessarily have to be re-drawn.     
Para 8 (b): Fixation of Initial pay in the revised scale as on 01/01/96
Neither High Court of Kerala nor the Hon’ble Supreme Court has issued any directives for revision of pay fixation formula as per Fifth Pay Commission orders for not deducting the rank pay. In this regard it is worth noting that, while implementing the judgment in the case of Maj (retd) Dhanapalan his pay was revised in the rank of Capt on 01/01/86 by re-fixing it without deducting rank pay. This change in pay continued till 31/12/1995. After 5th CPC his pay was fixed as on 01/01/96 as per 5th CPC orders only. On representation from Maj (retd) Dhanapalan for revision of his pay as on 01/01/96 consequent on 5th CPC recommendations without deducting Rank Pay, he was informed by the PCDA (O) that High Court order was for “not deducting Rank Pay” as on 01/01/1986 and not on 01/01/1996. No further communications was received thereafter either from the officer or any directive from High Court to justify the above claim of the Officer.

It is further stated that as per 4th CPC orders, Rank Pay was introduced for the first time which was in addition to Integrated Pay Scale. But at the time of pay revision on 5th Pay Commission orders, officers were in receipt of Rank Pay which was treated as part of Basic Pay for all purposes including pension, retirement & Pensionary benefits. For revision of Pay as on 01/01/96, 40% fitment was allowed to be added to existing emoluments before deducting Rank Pay at pre-revised rates while fixing pay in the revised pay scale for that rank. It is also felt that 5th Pay Commission’s recommendation may be looked at as independent and distinct from 4th Pay Commission. Moreover, the Rank Pay element introduced in 4th Pay Commission has very much gone into Pay fixation while implementing 5th Pay Commission, as also mentioned above.

In view of the above, it is felt that the Apex Court order does not affect the method of pay fixation adopted while implementing the 5th Pay Commission recommendations. The estimated financial implications were also, in fact, worked out accordingly. However, the MoD may take a final view in this regard after obtaining legal advice, if needed.     
 The fact that 5th CPC also deducted new Rank Pay while arriving at the revised pay for different ranks is well documented at Para 148.2 of 5th CPC report as already stated above. CGDA/CDA(O) seem to have ignored this. The Govt decision accepting the recommended pay scales mean the wrong done in 4th CPC continued to be the rule even in 5th CPC. This needs to be corrected as per the orders of the Court.

It is also important to note that the Kerala High Court judgment on Maj AK Dhanapalan’s case  was delivered on 05 Oct 98. The Govt decisions on 5th CPC recommendations were promulgated vide SAI/SNI/SAFI in Dec 98. (blog author comment – the actual date is 19th December 1997. TRIPAS has been informed on 10/4/13). The Court could not have, therefore, included 5th CPC dispensation in its order dated 05 Oct 98. Nonetheless the RATIO of this judgment for all similar circumstances, irrespective of any pay commission has to be applied.    


It is correct that the Rank Pay has gone into pay fixation because it is part of Basic Pay. The CGDA comments are again only half truth. The Rank Pay (pre-revised) was added to Pay of the rank for fixation in the new scale but what does not find mention is that firstly, the new scale where fitment was done was depressed by an amount equal to the new Rank Pay (double the old Rank Pay) and secondly, the revised Rank Pay (at double the rate) was reduced from the total to fix in the relevant scale. The fixation example at Para 148.2 of 5th CPC Report is relevant.







No comments, since the details are not known to Services. The earlier interpretation and consequent financial outgo calculations were the sole view of the CGDA wherein the Services were not consulted. In fact in the total financial implications worked out by CGDA (Rs 1623.71 crore), it has been mentioned in the Report of the High Power Committee (submitted to Hon’ble SC) that the repercussions on similar situation in subsequent pay fixation will have additional financial implications. The current observations of CGDA is in contradiction of its earlier stand on the issue.     
Para 8 (e)
All the provisions of SAI 01/S/87 are applicable for pay revision to be carried out as on 01/01/1986 except the clause of “deducting Rank Pay” before fixation of pay in the integrated scale. Comments against Para 5 (a) (iii) of DGL also refer.

Comments at Para 5 (a) (iii) are reiterated.
Section III
Para 9
In case the pay being drawn by the officers as on 31/12/2005 gets affected due to pay revision carried out as on 01/01/1986 as per the Court Order, the pay as on 01/01/06 will be revised with reference to the instructions laid down in SAI 02/S/08. Hence, the changes proposed at Paras 9, 10, & 11 of the DGL are irrelevant.

The changed pay from the 4th CPC onwards will necessitate a change in the consequent pay fixations in 5th and 6th CPC. Further, the depressed pay has been used by CPC in 5th and 6th CPC as base figure. Once these figures undergo a change, as a consequence, all subsequent revisions will also have to be effected.
Para 13
The Court order is applicable only to those officers in the rank of Capt to Brig who were in Service as on 01/01/1986 and whose pay was fixed in the integrated pay scale after deducting Rank Pay. Hence, no revision may be carried out for officers commissioned thereafter.

Regarding payment of interest, the method of calculation need to be mentioned in the DGL i.e. whether it will be simple or compound interest. Interest on pension arrears also needs to be specified as Para 13 of the DGL is silent about the same.   


The main issue is that had the pay been correctly fixed in the 4th CPC, the consequent pay revisions in 5th and 6th CPC would have been higher which are presently artificially depressed due to incorrect 4th CPC pay being considered for revision in 5th CPC and subsequently this wrong pay having been used to deny benefits such as equal Grade Pay and correct fixation in the 6th CPC. The Services have been repeatedly apprising the MoD that SAI/SNI/SAFI 2/S/08 has been depressed artificially by granting lower Grade Pay.

Further, there is no instance of same Rank officers having two different pay scales in the same Pay Commission. As suggested by CGDA, the replacement pay of Capt/eqvt in the new minimum pay is higher for a Capt/eqvt promoted any date after 01.01.86. A contrary view to this is against all tenets of all Py Commissions. The pay of officers holding the same rank cannot be different for different dates of promotion. The insistence of making (applicable) the Supreme Court judgment only to those who were in Service as on 01.01.86 goes against the Pay Rules in vogue, is not only for the Armed Forces but also for civilians. There cannot be two pay scales for similar rank officers in the currency of the same Pay Commission (Para 147.12.of 5th CPC refers).      
Para 14, 15, & 16: Exercising Option
In this regard it has been specifically mentioned by PCDA (O) that deciding the most beneficial manner/option for fixation of pay in such cases is not feasible due to various reasons such as non-availability of date related to pay drawn and other elements affecting pay entitlements due to destruction of time expired records in huge number of cases, the time span involved in each case for scrutiny and analysis of pay data with reference of different dates (i.e. increment, promotion etc) as three occasions of pay commissions and subsequent multiple promotions. Therefore, pay revision based on such options is not feasible.    
Administrative reasons such as non-availability of records can be looked into and reconstructed, where required and cannot be reason to deny legitimate pay fixation mechanisms  following the directions given by the Court. The normal pay revision rules have to be given to the Armed Forces as part of natural justice. In any case the records of a case which were sub-judice if destroyed are in contravention of laid down Govt rules in such matters.
Para 18
Hon’ble Supreme Court decision has not mentioned about revision of all pay-linked allowances simultaneously.
Consequential benefits are a corollary and natural fallout, once pay is revised. Any element which is a percentage of the Basic Pay has ton necessarily be revised once the Basic Pay itself is changed. Any contrary view may not stand to any logic.
General Points for Consideration

(a)               Certain pay based allowances like HRA etc admissible to only eligible officers, subject to fulfilment of specific conditions for a particular period, are not revised even during pay commission orders from retrospective dates. Hence question of revision of such allowances from retrospective dates may not arise.
(b)                 The DGL does not have any mention about the procedure to be followed for revision of pay and calculations of arrears. Where pay details and other information affecting pay entitlements is not available due to destruction of records being time expired.

Pay is now being revised as per court order. Once pay is revised, HRA being a percentage of Basic Pay inevitably also has to be revised. This fact has been clearly brought out in the affidavit filed by MoD. Also the HPC setup for this purpose with Def Secy. Secy (Exp) and Secy (Def/Fin) as members also accepted this and recommended the same. In the recommendations of the Committee it has been clearly spelt out that effect of this fixation will have consequential effect on 5th and 6th CPC as well as consequential benefits related to pay and also pension. Any contrary view at this stage can be seen as a breach of trust and easy grounds for filing contempt proceedings.

Annexure 2
COMMENTS ON OBSERVATIONS BY MoD (FINANCE) ON IMPLEMENTATION OF RANK PAY CASE
BY AFA (AG/PA) VIDE MoD (Fin) ID No. 8(13)/2012-AG/PA DATED 20 NOV 12

S No.
OBSERVATION BY MoD (Fin)
TRI-SERVICES COMMENTS
1
Para 3 (a). It is apparent that implementation of Supreme Court order dated 04.09.2012 will have repercussions/impact of the formula adopted from 01.01.1996 based on the 5th CPC recommendations. However, since the ibid Supreme Court order dated 04.09.2012 is in respect of formula of pay fixation based on 4th CPC recommendations only, it is advisable that at this stage, its implementation may be restricted to pay fixation adopted in pursuance of 4th CPC recommendations only. As regards the query of MoF whether MoD have received any representations or notices for litigations in the context of 5th CPC recommendations, this issue needs to be clarified by MoD/D (Pay/Services).
The judgment by Hon’ble Supreme Court lays down the guiding principles. These principles are to be applied into all cases, wherever Rank Pay was drawn or affected and a similar principle/treatment of fixation of Rank Pay was accorded. As similar methodology of fixation of Pay Scales and Rank Pay was accorded in 5th CPC, the principle enshrined by the Hon’ble Supreme Court is required to be extended to 5th CPC as well. Also, the new pay so fixed while transiting to 6th CPC will have cascading effect for fixation in 6th CPC pay bands and so also for determination of Grade Pay as was done for similarly placed persons on the civil side.

This view was also endorsed by the Rep of LA (Defence) during the meeting chaired by Addl Secy (A)/MoD on 27 Nov 12  
2
Para 3 (b) (i): Exact financial implications will have to be worked out by office of CGDA in consultation with the three Services HQ.
No Comments.
3
Para 3 (b) (ii): One of the reasons for variation between the initial figure of Rs 1623.71 crore and figure now being projected by CGDA may be due to the fact that earlier the interest component was calculated by CGDA w.e.f. 01.01.1986 whereas now, as per ibid Supreme Court order dated 04.09.2012, the interest has to be calculated from 01.01.2006. However, as stated above, exact financial implications will have to be worked out by the office of CGDA in consultation with the three Service HQ. 
No comments

4
Para 3 (b) (iii): Financial Planning Dte of the three Service HQ may furnish comments on the suggestions of MoF for locating funds internally to meet the instant extra-ordinary requirement. MoD (Budget) may also be requested to locate savings.
This being the outcome of Supreme Court judgment, the expenditure would be incurred as Charged Expenditure.
5
Para 3 (b) (iv): Office of the CGDA may clarify the query made by MoF regarding variation of amount of arrears paid to Major Dhanapalan and the amount projected by CGDA for arrears to one Major on implementation of ibid Supreme Court order dated 04.09.2012. It could be due to payment of interest w.e.f. 01.01.2006 which was not applicable to Major Dhanapalan. 
No comments.

Annexure 3
COMMENTS ON OBSERVATIONS BY MoD (Finance) ON IMPLEMENTATION OF RANK PAY CASE
BY JS & Addl FA (M) vide MoD (Fin) ID No. 8 (13)/2012- AG/PA DATED 21 Nov 12

S No
OBSERVATION BY MoD (Fin)
TRI-SERVICES COMMENTS
1
Para 2 (i): The new integrated pay scale (Rs 2300-100-3900-150-5850-200-6450) proposed for the 4th CPC dispensation is not in conformity with the existing Government instructions in respect of 4th CPC since it seeks to raise the upper limit of the existing integrated pay scale substantially. Instead of raising upper limit, it will be appropriate that the amount above Rs 5100/- (existing upper (sic) ceiling may be treated as Personal Pay. It is also seen that the minimum pay in the new integrated pay scale for the various ranks has also been proposed to be (e.g. for Brigadier/equivalent, it is proposed to be enhanced from Rs 4950 to Rs 6250). This does not seem to be justified.
Para 2 of the High Court (of Kerala) judgment states
“Under these circumstances, I am of the view that respondents 2 and 3 had completely misunderstood the scope of extending the benefit of the payment of Rank Pay to the Army Officers in addition to the existing pay scales. That is not an amount which has to be deducted in order to arrive at total emoluments which an Army officer is entitled to get. It means that the rank pay is required to be paid in addition to the existing Pay scales.”
Hence, pay scales are required to be amended and appended with the amount of Rank Pay, which was so deducted. The Courts of law have contended that the rank pay has to be paid in addition to existing pay scales. Therefore, what has been granted legally and legitimately to a Service personnel by the Court of law, need not be tinkered /twisted further. Hence the question of personal pay does not arise. Also, if the pay scale under such circumstances is breached, it has been upheld by the Courts of Law.

e.g. if the rank pay is required to be paid (added?) to existing pay scales, the fixation of Brig/equivalent is required to be appended by the amount of the Rank Pay (Rs 1200/-) to the existing pay scale (Brig started at Rs 4950/-). Hence the amount would be Rs 4950+ Rs 1200 = Rs 6150, which breaches the Rs 5100 top end pay scale. Further there being no stage at Rs 6150, it would be rounded off to the next higher stage of Rs 6250/-.
2
Para 2 (ii): The new pay scales/grade pay proposed in the 5th CPC as well as 6th CPC dispensations, for different ranks (Lt/equivalent to Brigadier) also do not appear acceptable as the same will be over and above the recommendations made by the 4th CPC as well as the 5th CPC.
Para 10 of HPC (comprising def Secy, Secy (Exp) and Secy (Def/Fin) report filed by UoI as an additional affidavit in the Hon’ble Supreme Court has stated
“Financial implications of around Rs 1623.71 crore arising out of implementation of the Hon’ble Supreme Court order dated 08 Mar 10 would create a substantial impact on the public exchequer. This impact is only one time. In addition, it would also lead to the enhanced recurring expenditure from the Consolidated Fund of India. It would further nullify the recommendation of the Pay Commission as well as the decision of the Government thereon. The Committee, therefore, is of the view that the financial implications and the above facts in the present matter may be submitted to the Hon’ble Supreme Court for consideration.” Further, Para 9 of the aforesaid HPC report also states that “Apart from the enormous financial implications, actual implementation of the Hon’ble Court order would involve the following stages: -
“Revision of pay of officers on 01.01.1986, 01.01.1996, and 01.01.2006 with simultaneous revisions of all pay linked allowances/benefits…”

It can be seen that the above submissions have been made by the UoI to the Hon’ble Supreme Court as a sworn affidavit, which was duly considered by the Hon’ble Court and the Order followed thereafter. Hence, the contention of MoD (Fin) at this stage, wherein the senior-most officers from the same departments have been members of the HPC, is not in order.

Notwithstanding the above, at the stage of pay fixation in 4th CPC, there is bound to be cascading/ripple effect in the 5th and 6th CPCs, since the pay already being drawn cannot be reduced and have to be fixed appropriately.
3
Para 2 (iii): However in the 5th CPC dispensation, the formula of pay fixation may be amended in the same way; rank pay should not be deducted first for calculating the pay in the same way as done in the case of 4th CPC as per Supreme Court order dated 04.09.2012.
This will have to be done as per the Hon’ble Supreme Court order, as Rank Pay was also deducted in 5th CPC prior to fixing the pay and had the same fixation formula as 4th CPC.

*****
Encl 78/A
MoD (Finance)
Office of JS & Addl FA (M)
***
Sub: Implementation of Supreme Court order dated 04.09.2012 in
Rank Pay matter in IA No. 9 of 2010 in Transfer Petition (C) No. 56/2007
Filed on behalf of UoI v/s N. K. Nair & Ors on Rank Pay case – vetting of
DGL Reg
*****

                        MoD may please refer to the meeting taken by the Defence Secretary on 07.12.2012 (AN) and telecon with the undersigned by Director (AG) and JS (E) on 10.12.2012.

2.                  This Division agrees with the revised DGL, furnished by the Office of CGDA vide their UO No. AT/I/1483-Army/X (PC-III) dated 10.12.2012 and their comments on the applicability of the personal pay, as mentioned therein (copy enclosed).
Sd/--------------------------
10/12/2012
(B. K. Mukhopadhyay)
JS & Addl FA (M)
Joint Secretary (E), MoD

 MoD (Fin) ID No. 8(13)/2012-AG/PA dated 10th December 2012


Urgent/Court case

Office of the CGDA, Ulan Batar Road, Palam, Delhi Cantt-10

Sub: Implementation of Supreme Court order dated 04.09.2012 in
Rank Pay matter in IA No. 9 of 2010 in Transfer Petition (C) No. 56/2007
Filed on behalf of UoI v/s N. K. Nair & Ors on Rank Pay case – on the matter of Rank Pay

Reference: MoD (Finance) UO Note No. MoD (Fin) 8(13)/2012-AG/PA dated 10/12/2012

*****
It is mentioned that the term personal pay has been defined in the FR 9 (23) as under:

“Personal pay means additional pay granted to a Government servant (a) to save him from a loss of substantive pay in respect of a permanent post or other than a tenure post due to a revision of pay or to any reduction of such substantive pay otherwise than as a disciplinary measure; or (b) in exceptional circumstances, on other personal considerations.”

2.         Further, FR 37 stipulates that “Except when the authority sanctioning it orders otherwise, personal pay shall be reduced by any amounts by which the recipient’s pay may be increased, and shall cease as soon as his pay is increased by an amount equal to his personal pay.” The condition of future absorption of Personal pay also exists in Para 6 (j) of SAI 1/S/1987. 

3.                  Thus, usually, the personal pay is to be absorbed in future increases of pay unless it is decided otherwise by the competent authority.

4.                  Keeping in view the above aspects, this HQ office, vide Para 3 (c) of UO Note dated 07/12/2012 had suggested for consideration if any protection is to be given, suitable amendment in the provisions of Para 6 (c) of SAI 1/S/1987 and corresponding provisions of  SNI and SAFI would be required. However, as directed in the MoD (Fin) UO Note referred above ad MoD ID dated 10/12/2102 [copy of which has been endorsed to Defence (Finance)] a revised DGL incorporating element of ‘personal pay’ at Para 2 (c) is forwarded herewith for examination and consideration, please.

Addl CGDA (VS) has seen.                                                                               Sd/---------------------
J.P.Kukade
Sr Accounts Officer (AT-I)
Phone No. 011-25665580
Sh. B. K. Mukhopadhyay
JS & Addl FA (M)
MoD (Finance) (AG/PA)
New Delhi
______________
UO No. AT/I/1483-Army/X (PC)III dated 10/12/2012
(Concluded)

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