Sunday, 6 October 2013

Concluding White Paper on Rank Pay Matter : CGDA and its statements

The Concluding White Paper on the Rank Pay Matter


1.                  The implementation orders issued by MoD on 27 Dec 12 in the Rank Pay matter, consequent to the Hon’ble Supreme Court’s order dated 04 Sep 12 had a few glaring anomalies. Chairman COSC & CAS had written a DO letter to Hon’ble Raksha Mantri on 18 Jan 2013 highlighting four of these anomalies. When no progress was visible, and with a lot of information available through the RTI Act 2005, the Chairman COSC & CAS wrote again to the Hon’ble Raksha Mantri on 27 May 13. Hon’ble Raksha Mantri then took a meeting RM with Service Chiefs and representatives of the Ministries of Defence, Finance, Law and CGDA on 14 Jun 2013 to resolve the anomalies in the Govt letter issued by MoD on 27 Dec 2012. Armed Forces Veterans, represented in the Hon’ble Supreme Court by different petitioners/respondents and RDOA as an intervener, were not participants in this meeting.   

2.                  Hon’ble RM directed MoD and the Services HQ to obtain the opinion of Ld Attorney General for India (Ld AGI) on their respective interpretations of the Court’s order. He also ordered the Service HQ to separately, and independently, project its case with Ld AGI.

3.         The Service HQ had earlier submitted a case explaining the four anomalies to MoD (on 02 Apr 2013). This case appears to have been forwarded by MoD to AG by MoD through LA (Def). A  second, and even more elaborate case with justification and case studies, was sent by Chairman COSC & CAS to the Ld AGI in prompt compliance of the Hon’ble Raksha Mantri’s order of 14 Jun 13. As events unfolded, it appears that MoD did not project its own interpretation to the Ld AGI even by 03 Sep 13.

4.         Ld AGI returned the second case of the Armed Forces advising that it should be routed through the Ministry of Law. This SOC was then forwarded by MoD - D (Pay/Services), on 13 Sep 2013, to LA (Def) after obtaining afresh comments from CGDA, MoD (Fin) and MoF. The SOC has since been withdrawn by MoD on 16 Sep 2013, reportedly on the directions of the JS (E).
5.         Prior to this, a meeting was taken by JS (E) in the first week of August where he reportedly assured Service HQ that he will ensure that Ld AGI gives his opinion on the issues raised only after the second SOC forwarded by Armed Forces is made available to Ld AGI alongwith the MoD’s statement.
Opinion of Ld AGI on Case dated 02 Apr 13
6.         However, the opinion of Ld AGI dated 03 Sep 13 has now been received after the Hon’ble Raksha Mantri told the Chairman COSC and CAS about the opinion (this was revealed at an Air Force Association meeting on 15 Sep 13). It appears to have been based on the letter that Chairman CoSC wrote to the Hon’ble RM on 18 Jan 13. This is evident from the facts stated by Ld AGI at Para 18 of his opinion.
7.         MoD had forwarded the opinion of Ld AGI dated 03 Sep 13 to MoF for their comments. MoD has reportedly withdrawn the first case, after Ld AGI has given his opinion, to send the both cases (MoD and Service HQ) together to Ld AGI for his opinion. Elsewhere, it had been commented that MoD appears to love farce and nothing else can explain sending the Ld AGI's legal opinion to the MoF for comments!
8.         Ld AGI’s opinion dated 03 Sep 2013 is on the first set of four anomalies raised by the Service HQ. Minor observations on the opinion are:-
(a)       LD AGI has addressed only four queries. Service HQ had raised six queries in their second and independent statement of case after the dispensation of the Hon’ble RM on 14 Jun 13. The latter must either be in the MoD or sent belatedly.
(b)       Out of four anomalies, two i.e. anomaly relating to “with effect from” and anomaly on extension of the ratio of the judgment to subsequent Pay Commissions have been accepted by Ld AGI i.e. the opinion is in favour of the interpretation of Service HQ.
(e)       Two other anomalies (minimum of pay of each rank and raising the ceiling of the integrated scale by the amount of Rank Pay) have not been accepted, based on the information provided by CGDA, supported by MoD (Fin) and MoF i.e. the opinion is not in favour of the interpretation of Service HQ but the opinion appears to be conditional.   
Spirit of the Hon’ble Supreme Court’s Order dated 04 Sep 12
10.             The spirit in which the Hon’ble Supreme Court order is to be interpreted is elucidated at para 21 of the Ld AGI’s opinion. It states: -
“Before I answer the queries raised, it is important to state that the Government must implement the Supreme Court’s order of granting the same benefit to similarly situated officers both in letter and in spirit. The Government cannot take a restrictive view of who is similarly situated, and must grant benefit on the basis of the underlying principle affirmed by the Supreme Court, i.e, wherever rank pay has been deducted at the time of fixation of pay, the deduction must be undone (emphasis supplied) and pay fixed accordingly. The approach that the benefit would only apply to those who are directly covered by orders of the court would force members of the armed forces to approach the Court for each individual claim when the same has already been granted to all similarly, situated officers by the Hon’ble Supreme Court. This would be unfortunate (emphasis supplied).

The Anomalies, the Opinion and the Consequences

10.       All issues are discussed in detail by Ld AGI. Comments on each issue are given in succeeding paragraphs.
With Effect from 1.1.1986 vis-à-vis As on 1.1.1986
11.       The Anomaly.   Services HQ had objected to the use of substitute words ‘as on 1.1.86’ in the MoD orders dated 27 Dec 12. Services HQ were of the opinion that the words ‘with effect from 1.1.86’ used in the judgments and orders of the respective Hon’ble Courts’ to give effect to the court order in letter and spirit must be used in the MoD’s implementation letter dated 27 Dec 12. It would imply that the benefit would have a continuous effect in the tenure of the 4th CPC.
12.       The Service HQ interpretation was objected to by CGDA, MoD (Def/Fin), and MoF.  The CGDA opined that in this case, the affected officers are those who were drawing pay in the rank of Captain to Brigadier and equivalents as per 3rd CPC on 31.12 85 and whose pay was fixed as per SAI 1/S/87 and corresponding Navy and Air Force instructions on 01.01.1986 after deducting rank pay. CGDA submitted that the wording “as on 1.1.1986” or “with effect from 1.1.1986” does not, in effect, make any difference (emphasis supplied). It was also stated by the CGDA that the pay of officers commissioned after 1.1.1986 and officers promoted after 1.1.1986 has been fixed with reference to rank and qualifying service, and that no rank pay has been deducted while carrying out such’ fixation, They have been admitted the rank pay of the rank held, in addition.
13.       Ld AGI's Opinion.         Ld AGI has opined, “The Government needs to implement the orders of the Supreme Court in letter and spirit. It cannot confine the benefit of the orders to those officers whose pay was fixed as on 1.1.1986 after deduction of rank pay in terms of para 6 (a) (ii). It must grant benefit to all those officers whose pay has been fixed after deducting rank pay whether as on 1.1.1986, or after 1.1.1986. This must be done after properly verifying the facts” (emphasis supplied).
14.       The views of the Service HQ on the issue stand vindicated by the Ld AGI who has struck down the interpretation of CGDA.
15.       It is a moot point whether the CGDA and MoF will continue to prevail on MoD, which appears to be unable to either check the CGDA’s misinformation for authenticity or search of existing documents that negate CGDA’s recalcitrance to scuttle benefits accruing after setting right this anomaly by going against the spirit of the court judgment and legal opinion again. The only way to give effect to this interpretation is to change minimum for each rank, the issue not expressly accepted by Ld AGI.
Change of Minimum of Pay for Each Rank
16.       The Anomaly.         The provision of deduction of rank pay was contained in para 6 (a) (ii) of the Special Army Instruction and corresponding instructions for the other two services. This Para also contains a table which specifies, within the integrated scale, the minimum pay for each rank. No such table was recommended by the 4th CPC or published in the Government resolution accepting the recommendations of the 4th CPC. These have been added in the SAI 1/S/87 by MoD. The minimum pay for each Rank had also been depressed due to deduction of rank pay. 
17.       The CGDA submitted to the Ld AGI that the minimum pay for each rank has NOT been arrived at after deduction of rank pay. CGDA has contended that it was in fact a recommendation of 4th CPC (emphasis supplied).
18.       Ld AGI's Opinion.         Based on this submission of CGDA, Ld AGI has conditionally rejected Armed Forces interpretation as brought out in the last sentence of his opinion which states, “There is no need to revise the minimum, if as stated by the CGDA, it has been fixed on another basis.
19.       The Ld AGI is clearly of the opinion that if the minimum has been fixed by not deducting the Rank Pay and is decided on some other basis then only the minimum will not be revised. If this contention of CGDA is proved wrong, which in fact it is, then the minimum pay for each rank will require revision. The contention of CGDA is proved wrong by the following facts: -
(c)               The  6th CPC,  has noted at Para 2.3.10 (iv) of its report that:-
“(iv) …. The element of rank pay was carved out of the pay scales so revised after giving the edge vis-à-vis civilian group A officers.”
(d)              The simple English of ‘rank pay was carved out of pay scales’ translates in mathematical terms to 'rank pay was deducted from the pay scales, at all stages, minimum and maximum included'.  
(e)              CGDA has submitted that it is a recommendation of the 4th CPC. A thorough reading of Chapter 28 of the 4th CPC’s Report on Armed Forces personnel, Chapter 30 on Fixation of Pay Scales, and the Resolution 9 E of GoI does not reveal any such table for minimum pay for each rank, let alone make such a recommendation. Obviosuly CGDA has twisted facts to suit its argument. The 4th CPC does not state anywhere in their report that a different method ("another basis" is the term that CGDA used)  was used to fix the pay scale of Armed Forces Officers. In the words of Chapter 30 the default pay scale enhancement formula has also been applied for Armed Forces Officers. The table is obviously a concoction of the drafters of the SAI No. 1/S/87 with the sole aim of removing the edge provided by the 4th CPC to the Armed Forces.
(f)                When the existing pay scales and revised pay scales of the 4th CPC for commissioned officers and other similarly placed civilian officers are compared, it becomes clear that rank pay has been deducted from the pay scale of commissioned officers and minimum for each rank has been arrived in this manner.
(g)              Before the rank pay case, the pay of all officers, whether promoted before or after 1.1.86, was fixed at same stage on their promotion i.e. Captains were fixed at Rs. 2800 in the integrated pay scale. But after the MoD order dated 27 Dec 12 has been implemented, the deduction only on 1.1.86 has been undone. Those officers who were in the rank of Captain & equivalent on 1.1.86 will now draw at least Rs 3000 in the integrated scale. This has resulted in lower pay of Rs 2800 in the integrated scale for post 1.1.86 promotees to the same rank. The only reason for this is that the Rank Pay of Rs 200 applicable to the rank continues to be deducted for post 1.1.86 promotees.
(h)              On promotion to any rank, if there was a parity in the pay of Commissioned Officer and Gp ‘A’ officer, e.g. Capt and STS, before 1.1.86, this parity has to be retained for post 1.1.86 officers, disregarding Rank Pay which is an additional element. In the current situation, this parity has been disturbed and the pay of post 1.1.86 promotees is decreased as shown below:-

Pay in
Jan 1973-Dec 1985
Minimum Pay in IV CPC for pre & Post 1.1.86 offrs
(Prior to Court verdict)
Revised Pay for Officers promoted before      01 Jan 86
Pay for Officers who joined/ promoted after
01 Jan 86
(i)                The rank pay for the rank of Capt was Rs 200. This clearly shows that the shortfall in the pay of Capt has crept in for post 1.1.86 promotees which is of the same quantum as the rank pay similar case exists for all other affected ranks. This is the proof of deduction of rank pay. Whereas the rank pay for pre 1.1.86 officers was deduct individually for each officer, for post 1.1.86 promotees it was deducted by prescribing lower minimum thus deducting it at source.
 Change of Top of  the Scale of Integrated Pay  Scale
20.      The Anomaly. The top of the IVth CPC integrated scale of Rs 5100 has not been amended in the MoD’s implementation order dated 27 Dec 12 to remove the effects of deduction of rank pay while formulating the pay scale. Top of the scale of a DIG Police was revised to Rs. 6150/- in 4th CPC as per table in Chapter 2.3 of the 6th CPC Report. In order to prescribe the top of the scale for Brigadier/equal, it is obvious that the Rank Pay of Rs. 1200/- was deducted from the top of the scale for DIG, and rounded off to Rs. 5,000/-(nearest Rs. 100/-) since there was no stage of Rs. 4,950/- (Rs 6,150/- minus Rs 1, 200/-) in the integrated pay scale recommended by 4th CPC. This is how the pay scale of Brig/equiv was depressed by MoD with the assistance of MoD (Fin).
21.       MoD (Finance) had recommended Personal Pay for affected officers but MoF did not agree even for grant of personal pay to these officers based on the observations of CGDA.

22.       6th CPC’s Report at Para 2.3.10 (vi) states “The edge in the Defence Forces pay scales for their officers is on account of the Special Disturbance Allowance. Otherwise, the established relativity of the posts of Major General and Brigadier is with SAG and DIG pay scales of civilians/police forces respectively.” Therefore, it is inescapable to conclude that the CGDA has wrongly stated (again!) that there is no relativity between DIG and Brigadier/equivalent.

23.       Further, neither CGDA, MoD (Def/Fin) nor MoF has mentioned Office Memorandum No. 1/2/86-Estt.( Pay-I) dated 10 Apr 87 issued by GoI, Ministry of Personnel, Public Grievances & Pensions, Deptt of Personnel and Training at Para 2 as follows: -
“2. In supersession of all the various existing orders, the President is pleased to decide that where a Government servant is promoted or appointed to another post carrying duties and responsibilities of greater importance than those attached to the post held by him, the provisions contained in FR. 22-C shall apply without pay limits” (emphasis supplied.)
24.       The Opinion.         The only issue decided by the Kerala High Court and consequently the Supreme Court is whether rank pay is not to be deducted at the time of fixing pay in the integrated scale in terms of Para 6(a)(ii). Ceiling fixed under Para 6(c) is not a subject matter of these judgments because as a Major, Dhanapalan could not have reached the top of the scale.
25.       The demand of the Service HQ is not personal pay. The demand is that the top of the scale, which like the minimum for each rank has been depressed, has to be enhanced keeping in view equivalent scales applicable to other services like the IPS.
26.       The CGDA has obfuscated the real issue by bringing in irrelevant factors like personal pay, and regrettably, contrary to facts, the MoF has agreed to this. All the arguments applicable to the minimum of pay for each rank are equally applicable to the top of the scale as well.

Application of Hon’ble Supreme Court’s Order to 5th and 6th CPC

27.       The Anomaly. Due to defective formulation of the integrated pay scale recommended  by 4th CPC, and owing to downwardly adjusting these scale by an amount equal to Rank Pay, the cascading effect thereof continued in the implementation of 5th CPC recommendations. Here also the pay scales of officers of the ranks of Captain to Brigadier (and equivalent) were depressed by an amount equal to revised Rank Pay. This further caused a consequential effect of continued lesser replacement pay and Grade Pay for defence officers in the 6th CPC.

28.      Despite the fact that the pay fixation formula and the treatment to ‘Rank Pay’, while carrying out the fixation of pay of affected officers in 5th CPC, was similar to that of 4th CPC. Therefore, this ought to have been modified in view of the Court orders. The implementation orders issued by MoD on 27 Dec 12 did not amend/delete the provisions relating to deduction of Rank Pay on fixation of pay of affected officers while transiting from 4th to 5th CPC on 01 Jan 96. Thus it violated the spirit of the Apex Court's order and denied the consequent effects of the said Order to the affected officers. There is therefore, a need to review the demand of Services seeking deletion of the provision relating to deduction of Rank Pay from the total emoluments for re-fixation in revised pay scales as on 1.1.96 (i.e. 5th CPC).
29.       The views of CGDA, MoD (Fin) and MoF were that the court order is applicable only to 4th CPC and the issue of subsequent pay commissions was not the subject matter of the case in the court.
30.      Ld AGI's Opinion.         In the opinion of Ld AGI, the Government needs to implement the underlying principle laid down in Major Dhanapalan’s case, i.e., rank pay cannot be deducted at the time of fixing pay in the revised scale. It is immaterial that in Major Dhanapalan's case, only the 4th CPC was involved. The principle of law laid down is that rank pay cannot be deducted by fixing pay in the integrated scale. Since rank pay has been deducted at the time of fixing pay in subsequent pay commissions, the same would definitely have to be corrected. The officers covered by 5th and 6th Pay Commissions cannot be expected to approach the Courts for orders in the same terms.
31.       The views of the Service HQ on the issue are upheld by the Ld AGI who has struck down the interpretation of CGDA. To give effect to this interpretation, even the most restrictive action by MoD will call for amendments to SAI No. 2/S/98 and corresponding Instructions for the Air Force and Navy governing 5th Pay Commission pay scales and extend the benefit to 6th CPC.
The Conclusion
32.       The undue haste of MoD, a trait that was never in evidence till 27 Dec 12, to obtain the Ld AGI’s opinion dated 03 Sep 13 has only strengthened the case of “Similarly situated officers.” A review by Ld AGI of the Service HQ statement of case, in the light of material facts that were not provided and/or concealed by CGDA, MoD (Fin) and MoF, may better meet the ends of justice and the intent of  the Apex Court’s order dated 04 Sep 12 in the Rank Pay matter.
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