Tuesday, 16 April 2013

Truth for Free - Part IV - One Mystery Solved?

If people had always understood the lessons of history, there would be no history.

- Talleyrand

F. No. B/25511/AKDP/AG/PS 3 a

Partial Reply dated 8 April 2013 to RTI of 26 March 2013

The SAI 1/S/87 provides inter-alia that after the existing emoluments viz. basic pay plus DA plus ADA plus IR plus 20% of basic pay have been worked out, an amount equivalent to Rank pay appropriate to the Rank held by the officer on 1-1-86 at the rates prescribed in the SAI will be deducted. Thereafter the officer’s pay will be fixed in the revised scale at the stage next above the amount thus computed. The pay of Major Dhanapalan was fixed under the said provisions and he was allowed Rank Pay of Rs 200 in addition. He had filed a petition in the High Court of Kerala stating that his pay be re-fixed in the rank of Captain as on 1.1.86 without deducting the amount of rank pay of Rs 200 from his emoluments and that rank pay appropriate to his rank should be paid to him over and above the pay so fixed.

            The Hon’ble High Court in its order dated 5-10-98 held that the respondents have completely misunderstood the scope of extending the benefit of rank pay to the Army Officer. Rank Pay is something which has been given to the officer in addition to his existing pay scale. That is not an amount which has to be deducted in order to arrive at the total emoluments. The Court directed the respondents to refix the pay of the petitioner from 1-1-86 without deducting the rank pay of Rs 200. An appeal was filed in the High Court against the judgment and as per the directions of the Court, an additional affidavit was also filed on 1-12-2000 with the approval of the then Defence Secretary. The Division Bench of the High Court of Kerala, Ernakulam in its judgment dated 4th July 2003 upheld the judgment of the Single Bench of the High Court and dismissed the appeal filed by the Union of India.

The issue of filing of SLP in the above matter has been considered vide Note 64-70 ante. The matter was placed before the Additional Solicitor General who ruled that this is not a fit case for filing SLP.

            Under the circumstances, it is proposed that the Court’s judgment dated 5-10-98 be implemented forthwith. Since the judgment may have wide ranging financial implications in terms of pay fixation of serving as well as retired officers whose pay was fixed as on 1-1-86 in terms of SAI 1?s/87 necessitating revision of their pension and other terminal benefits also, the matter may subsequently be taken up with Ministry of Finance appropriately.

            Submitted please.
JS (E)   
In light of the above, please seek views of Def (Fin). Quickly pl.


Director (AG) Sd/- 3/3

US (P/S) – on leave


                        Ref preceding notes.

            Min of Def (Fin) may kindly see for further n/a pl. Their earlier note 78 ante and the directions of JS (E) vide note 82 refer.



            Ref preceding notes.

2.                  The relevant file of the MoD dealing with the issuance of SAI 1/S/87 in respect of Army and the files dealing with issuance of similar instructions in respect of Navy and Air Force, may kindly be linked.     
Dir (Fin/Q/AG)
Dir (AG) MoD
Ministry of Finance
Department of Expenditure
EIII (A) Branch

            Reference: Notes of Ministry of Defence on p.10-13 ante.

            The matter has been examined in this Ministry. However, before for taking a final view, the case was referred to DOP&T for their views/comments/advice. However, DOP&T wants clarification/information on certain points as indicated in their UO No. C-57/04/Pay-I dated 08.04.04 (copy placed below).

2.         Ministry of defence may kindly clarify the above points to DOP&T alongwith the requisite information requested for by them at appropriate level for their specific views before the case is considered further for taking a decision.

Under Secretary (EIII-A)
       FA (DS), Ministry of Defence
MoF (Exp) U.O. No. C-67/E.IIIA/2004 dated 15.04.04
Deptt of Personnel & Trg
Estt. (Pay-I) Section

                        Reference preceding notes from D/Expenditure regarding the proposal from Ministry of Defence for implementation of an order of the Kerala High Court in a case regarding pay fixation of a retired army officer in pursuance of the IV CPC recommendations.

Before we consider the matter, D/O Expenditure may be requested to clarify whether the Rank Pay in pursuance of the 4th CPC recommendations was introduced in Ministry of Defence in consultation with Ministry of Finance and this Department. Further, it may also be clarified whether the criteria of pay fixation in revised scale, by deducting the equal amount from the ‘existing emoluments’ and the allowing Rank pay, was adopted in consultation with M/O Finance and this Department. Whether there was also any recommendation by the VI CPC regarding pay fixation when they recommended for Rank Pay. 
DS (Pay)

D/O Expenditure (EIIIA Branch)
DOP&T U.O. No. C-57/04/Pay-I dt 8/4/04


            Reference preceding notes.

2.                  The case has been examined in consultation with MOF/DOP & T. A copy of MoF’s U.O. Note No. C-67/E.III (A)/2004 dated (?) April 2004 and a copy of DOP & T’s U.O. Note No. C-57/04/Pay-I dated 8.4.2004 is placed alongside. MoD are requested to furnish the requisite clarifications expeditiously so as to facilitate further examination of the case in consultation with MoF/DOP & T.
(A.K. Gambhir)
US D (Pay/Ser)
Sd/------- 20/4/04

Ministry of Defence
D (Pay/Services)
            Reference note 85/ante and queries of MoF/DOP & T.
2.                  As per the recommendations of the IV-CPC, an integrated pay scale (Rs 2300-100-3900-150-4200-EB-150-5100) for officers upto the rank of Brig was introduced. In addition to the Basic pay, officers were also entitled to Rank Pay for holding a particular rank. The Rank Pay was in the range of Rs 200 to Rs 1200 for the officers of the level of Capt to Brigadier. Some illustrations were also provided by the CPC for guidance, in fixing the pay of the officers in the revised pay scale.

3.                  Following is sample of illustrations for fixing the pay of Major (sic):

            1. Rank                                               Captain                                   Major                                     
            2. Existing basic pay                                    Rs 1300/-                              Rs 1600/-
            (As per III CPC scale)                    

            3. DP/ADA on basic pay                  Rs 1650/-                              Rs 1740/-     
            At index average 608 and
            Interim Relief

            4. Existing emoluments                   Rs 2950/-                              Rs 3340/-

            5. Add 20% of basic pay                  Rs  260/-                               Rs  320/-
            (20% of item 2 above)
                                                Total               Rs 3210/-                              Rs 3400/-*

            6. Pay in the integrated                   Rs 3100/-*                            Rs 3400/*
Scale                                                                           (minimum pay for rank of Major
                                                                                    In integrated scale)

PLUS RANK PAY                             Rs 200/-                                Rs 400/-

* This was arrived at after deducting the equal amount of Rank Pay from the emoluments then fixing the pay in the integrated pay scale and further showing Rank Pay separately.

 4.        Further, it is seen from the notes portion in the file that the Finance Division were consulted, as usual, before the issue of Special Army Instructions in May, 1987. There is no indication on the file that the Ministry of Finance and/or DOP & T were also consulted at that time of issuing SAI, introducing integrated pay scale and also the element of Rank Pay while implementing the recommendations of IV CPC. There is a possibility that the Finance Division may have consulted the MoF/DOPT, on their own file.              

5.         The above facts may be submitted to our Finance Division, for further action at their part.


                                    Copy of relevant extracts of the Report of IV CPC are placed opposite.
                                                                                                            Sd/------------- 30/4/04

US D (Pay/Ser) Sd/----------

Def Fin (AG/PA) Recd 6/5
Department of Personnel & Training
Estt. (Pay-I) Section
                  Reference preceding notes.

2.               It is observed that the formula adopted in fixing pay in the revised scale w.e.f. 1.1.86 was that Rank Pay was deducted from the total emoluments admissible on 1.1.86 and then the pay was fixed in the revised scale and Rank Pay allowed in addition to the pay so fixed, though the Rank Pay was introduced w.e.f. 1.1.86. It may therefore be clarified:      

      a)         as to why the Rank Pay was being deducted from the pre-revised emoluments and if the same was not admissible on the pre-revised emoluments.

      b)        If it was deducted from the revised emoluments what was the purpose for the same because first deducting it and then adding it to the pay fixed in the revised scale as that would tantamount to the same.

c)         Whether the pay fixation formula was adopted in consultation with the Department of Personnel & Training/Ministry of Finance.

d)        As para 5 of Note 67/N of the Linked File, wherein it has been mentioned that Rank Pay was not to be deducted from the total emoluments while fixing the pay in the revised scale, is contradictory to para 3 of p.10/ante an also to the p.86/N of the Linked File, it is requested to indicate the exact formula adopted by the Ministry/recommended by the Pay Commission with an illustration of the method of
fixation of pay in the revised scale w.e.f. 1.1.86.

Rita Mathur
Deputy Secretary (Pay)
Dt: 31-5-05
M/Defence (Finance) (AG/PA)
DOP & T U.O. No. 1/22004-Estt (Pay – I) dt 31.5.04        


            Reference preceding note.

2.                  The proposal has been examined in consultation with DOP & T. A copy of DOP&T/Estt. Pay.I section note No. 1/2/2004-Estt (Pay. I) dated 31st May 2004 is placed opposite. M/O Defence are requested to furnish the clarifications asked for by DOP &T.
3.                  Dir (Fin/AG) has seen.
      Pl spk 
Sd/--- 2/6/04


Dir (Fin/AG)


Send to MoD IMM.

Ministry of Defence
D (Pay/Services)

      Reference observations/query of DOP&T.

2.                  The IV CPC in Para 26.13 of their report had recommended the Rank Pay in addition to the pay in the integrated pay scale for all officers upto the rank of Brig and equivalent in the three services. The CPC had recommended integrated pay scale of Rs 2300-100-4200-EB-100-5100, which was revised to Rs 2300-100-3900-150-4200-EB-5100 by the Government. The Commission further in Para 28.113 of their report had recommended that the method for fixation of pay in the proposed scales for civilian employees will be adopted for fixation of pay of Armed Forces officers. Since Rank Pay is a separate element for officers upto the rank of Brig and equivalent, the same may be taken into account while fixing pay in the integrated pay scale recommended by them. In the illustrations No.1 to 6 the Pay Commission has outlined the procedure to be adopted while fixing pay. It may be seen from the said illustrations that the Rank Pay has been treated as a separate element. Presumably for this reason the same has been deducted from the revised emoluments arrived after taking into account the existing pay, DP, ADA on basic pay, Interim Relief ad weightage of 20% of basic pay. Copies of relevant extracts from the report of the IV CPC are placed opposite for perusal.

3.                  Para 5 referred by DOP&T is from note 64 and NOT from note 67 in the linked file [No. BM/25511/AKDP/AG/PS-3(a)] as stated by them. This contains the views of Army HQ in the matter. The views expressed by the office of the CGDA vide para 3 of Note 10 in the PC No. B/25511/AKDP/AG/PS-3(a), reiterate the stand taken by the Govt. Hence there is contradiction in the views. The illustrations regarding method of pay fixation may seen on pages 662-3 of the Report of IV CPC, extracts of which are placed opposite.

4.                    The DOP&T/Ministry of Finance were not consulted while notifying the revised pay scales and Rank Pay etc.(underlined for emphasis by Aerial View).


Under Secretary (Pay/Services)

Defence (Finance)

                        Reference preceding notes,

2.                  The matter has been examined in consultation with the Ministry of Finance. A copy of that Department’s ID. Note No. 7 (16)/E.III/2004 dated 6.8.2004 containing their advice in the matter is placed opposite. MoD are advised to take necessary follow up action, immediately.

3.                  FA (DS) has seen and observed that early action will be needed in this matter.

(G.K. Padhay)
Director (Fin/AG)
Director (CP), MoD
Sd/---- 11/8

US (P/S)
            Sd/------ 12/8 


Pay Fixation of Captain in the running pay scale of Rs 2300-100-1900-150-4200-EB-150-5100 applicable for the rank from 2nd Lt to Brig

With deduction of Rank Pay                                               Without deduction of Rank Pay
Existing Basic Pay                       Rs 1300

DA/ADA on BP at
Index average 608 & IR             Rs 1650

Existing emoluments                    Rs 2950

Add 20% of BP                              Rs  260

Total                                               Rs 3210                    Total emoluments    Rs 3210

Less Rank Pay                              Rs  200

Pay fixed in the scale                 Rs 3100                    Pay fixed in the scale Rs 3300

Net Benefit Rs 3100+200 (RP) -2950                        Net benefit Rs 3300+200 -2950
                                                = Rs 350                                                       = Rs 550

Based on SAI 1/S/1987, Para 6                                         As decided by the Court
                                                                                                (High Court of Kerala)

Note: the above is part of the Note of MOD – D (Pay/Services)

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