Minimum Pay and Parity with DIG? Chapter 2.3. Sixth Central Pay Commission Report

                    Chapter 2.3 of Sixth Central Pay Commission Report

Pay scales of Defence Forces Personnel

(Pages 72 to 75 reproduced below)

(Please note from the tables,  wherever there is Rank Pay an amount equal to rank pay has been deducted for officers in ranks from Captain to Brigadiers)

Introduction 2.3.1. The first two Pay Commissions did not consider the pay scales, allowances and other service conditions of Defence Forces personnel. At that time, the structure of emoluments of the Defence Forces personnel was looked into by the departmental committees which included the representatives of the three services.

Post-war Pay Committee

2.3.2. After the First Pay Commission, a Post War Pay Committee was constituted for the Defence Forces personnel. Their recommendations were implemented from 1/7/1947. The

Committee simplified the pay structure of the Defence Forces personnel considerably and abolished a number of allowances which had either relevance only to war conditions or which could be merged with the pay. The Committee established a broad relativity of officers of Defence Forces with the officers of Class-I central services and the Indian Police Service (IPS). Insofar as Personnel Below Officer Ranks (PBORs) were concerned, the fully trained infantry solider with 3 years service was equated with a semi-skilled worker. Pension related issues of the Defence Forces were considered subsequently by the Defence Forces Pension Revision Committee constituted in 1949 which gave its report in 1950.

Raghuramaiya Committee

2.3.3. Subsequent to the report of the Second Pay Commission, the consequential changes for Defence Forces personnel were effected as per the recommendations made by the Raghuramaiah Committee that gave its report in 1960. The revisions made by this Committee were consequential in nature and broadly followed the revisions made by the Second CPC on the civil side. The Committee did not modify any of the principles followed by the Post War Pay Committee. The Raghuramaiya Committee specifically mentioned that the accepted parallel between defence service officers and Class-I services of the Central Government, particularly the Indian Police Service should be continued.

Subsequent developments

2.3.4. Subsequently, the parity of officers’ pay scale in Defence Forces vis-à-vis that of the IPS got cemented further and modifications in the IPS scales became a trigger for corresponding changes in the analogous grade in the Defence Forces.

Chapter 2.3

Third Pay Commission

2.3.5. The Third Pay Commission was the first Commission whose terms of reference included examination of the structure of emoluments, the retirement benefits and terms and conditions of the Defence Forces personnel. The Commission noted that the relativity of the officers in Defence Forces vis-à-vis IPS was only a working method of devising scales of pay for the service officers* which did not mean that the functional role of the two services were similar. (* emphasis by Aerial View)

The Commission, however, qualified this statement by mentioning that the job profile of IPS officers was the closest civilian analogue vis-à-vis infantry officers and that a working relationship did exist between the two organizations. The Commission also specifically noted that the pay structure of the Indian Administrative Service with its long pay scales was particularly unsuitable for service officers.*

Disturbance Allowance and the edge in Defence Forces pay scales

2.3.6. The Defence Forces had demanded a higher rate of Special Disturbance Allowance from the Third Pay Commission. The Commission, however, noted that the Disturbance Allowance was granted in 1950 as a temporary measure to improve the earnings of service officers without interfering with the pay scales introduced as per the recommendations of the Post War Pay Committee which had brought down the pay scales of many Indian Commissioned Officers (ICOs). At such time, the grant of Disturbance Allowance offered some relief to them.* The Third Pay Commission noted that the extent of turbulence was off-set by the special facilities given to Defence Forces personnel and no justification existed for continuance of the Special Disturbance Allowance as a separate entity. The Commission, however, did not recommend total abolition of this allowance as it had existed for a long time and instead merged this allowance with the pay scales of Defence Forces officers. Hence, the Third CPC pay scales of Defence Forces officers also contained an element of Special Disturbance Allowance which had hitherto been given as a separate allowance. On account of this fact, post-Third CPC, the pay scales of Defence Forces officers had a slight edge vis-à-vis the analogous posts in the civilian side.

Fourth CPC

2.3.7. The Fourth CPC, while devising the revised pay scales of Defence Forces officers took into note the proposal seeking running pay bands put forth by the Defence Forces. The Defence Forces had desired a running pay band so as to ensure a smooth and improved career progression which otherwise was not possible especially as any large scale cadre review in the Defence Forces would have created unacceptable aberrations in their hierarchical structure.

The Fourth Pay Commission, accordingly, recommended an integrated pay scale for all officers upto the rank of Brigadier and equivalent in three services and separately gave a rank pay ranging from Rs.200 to Rs.1200 p.m. for posts from Captain/equivalent to Brigadier/equivalent. During such time, the Defence Forces had desired inclusion of the officers in the rank of Major General also in the proposed integrated pay scale. This was, however, not found acceptable by the Fourth CPC who, therefore, placed Major Generals

in the pay scale of Rs.5900-6700 being the senior administrative pay scale (SAG) for civilians.

Fifth CPC

 2.3.8. The Fifth CPC took note of the fact that the Special Disturbance Allowance had been incorporated by the Third CPC in the pay scales of Defence Forces officers. The Commission, accordingly, recommended a similar edge in the starting pay of Lieutenant (the rank of 2nd Lieutenant having been recommended to be abolished by the Commission) who was, therefore, given the starting pay of Rs.8250 as against Rs.8000 recommended for a civilian Group A officer. Before the Fifth CPC, the Defence Forces

had proposed two running pay bands for Defence Forces officers – (i) till the post of Colonel; and (ii) from Brigadier to Lt. General. The Fifth CPC, however, concluded that a separate dispensation for Defence Forces in the form of running pay bands would have repercussions on civilian employees and that the better method would be to provide explicit compensation in regular pay scales. The Commission, accordingly, recommended abolition of integrated pay scales by regular pay scales with progression in pay being provided by the mechanism of ACP Scheme. The Fifth CPC, however, retained the concept of rank pay for officers till the post of Brigadier. The pay scale of Major General/equivalent was recommended as Rs.18400-22400 on par with SAG scale of civilians.

Relativity between Defence Forces and civilian officers established by the earlier Pay Commissions

2.3.9. The relativity existing between pay scales of analogous posts in the Defence Forces and the civilians since the time of Third Central Pay Commission is tabulated as follows:

Third CPC recommendations (in Rs.)

Civilian	Defence Forces*
Grade                                Pay Scale	Grade                      Pay Scale
JTS                                      700-1300	2nd Lieut.                    750-790 Lieut.                             830-950
STS                                   1100-1600	Capt.                          1020-1450 Major                         1350-1750
JAG                                   1200-2000	Lt. Col. (Acting)        1500-1900 Lt. Col. (Subs.)          1700-1900 Lt. Col. (TS)               1800 (Fixed)
NFSG                               2000-2250	Colonel                        1950-75-2175
DIG                                  2250-2500	Brig.                           2200-100-2400
SAG I                               2500-2750	Major General              2500-2750
HAG                                 3000 Fixed	Lt. General                       3000 (Fixed)
Secretary                             3500	Fixed General                    3500 (Fixed)
	Service Chiefs                   4000 (Fixed)

*(The pay scales in Navy were slightly different.)

Fourth CPC recommendations

Civilian	Defence Forces
Grade                          Pay  Scale (Rs.)	Grade                                 Pay Scale (Rs.)
JTS                                       2200-4000 STS                                      3000-4500 JAG                                     3700-5000 NFSG                                 4500-5700 DIG                                      5100-5700                                              (Revised to                                              5100-6150) SAG                                  5900-6700 HAG                                7600 (fixed) Secretary                        8000 (fixed) Cab. Secy.                      9000 (fixed)	2nd Lieut. to Brig.      2300-100-4200-                                        EB-100-5000                            (Integrated pay scale)                                                (Revised to                                                   2300-5100) Rank                       Amount of rank pay                                                (p.m.) Capt. & equ.                 200 Major & equ.                400 Lt. Col. (Sel. & equ.)    600 Col. & equ.                    800 Brig. & equ.                 1200 Pay scales for higher levels Maj. Gen. & equ.           5900-200-6700 Lt. Gen.                          7600 (fixed) Army Comm.               8000 (fixed) Service Chiefs              9000 (fixed)

Fifth CPC recommendations

Civilian	Defence Forces
Grade                               Pay Scale (Rs.)	Grade                 Pay Scale        Rank pay                                    (Rs.)                  (p.m.)
JTS                                     8000-13500	Lieut.                  8250-10050 Capt.                    9600-11400                 400
STS                                     10000-15200	Maj.                     11600-14850              1200
JAG                                    12000-16500	Lt. Col.               13500-17100                1600
NFSG                                 14300-18300	Col.                       15100-17350             2000
DIG                               16400-20000	Brig.                     15350-17600              2400
SAG                                   18400-22400	Maj. Gen.            18400-22400
HAG                                  22400-24500	Lt. Gen. & equ. 22400-24500
Secretary                                26000 (fixed)	Vice Chiefs and Army Comm. Equivalent                      26000 (fixed)
Cab. Secy.                                 30000                                                    (fixed)	Service Chiefs               30000 (fixed)

Analysis

 2.3.10. The following facts emerge from the history of the rank structure of officers in the Defence Forces:-

(i) A broad parity has always existed between the pay scales of Defence Forces officers and civilian group A services in general and with IPS in particular.

(ii) Special Disturbance Allowance was given to the Defence Forces officers in 1950 as a temporary measure to improve their earnings without interfering with the pay scales introduced as per the recommendations of the Post War Pay Committee which had brought down the pay scales of many Indian Commissioned Officers (ICOs).

(iii) An edge was provided by the Third CPC in the Defence Forces officer’s pay scales because the Commission had converted the then existing Special Disturbance Allowance into an edge in starting pay vis-à-vis the civilian group A officers.

(iv) The Fourth CPC had continued this edge in devising the running pay band for Defence Forces officers up to the rank of Brigadier and had revised the integrated pay scale taking in account the time taken for promotion to different pay scales. 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.

(v) The Fifth CPC maintained this edge even though it reverted from running pay bands to individual pay scales for various officers’ ranks in the Defence Forces.

(vi) 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.

(vii) The Defence Forces had sought running pay band upto the post of Major General before the Fourth CPC. The Commission, however, conceded the running pay band only upto the post of Brigadier/equivalent.

(viii) The Fifth CPC had not recommended running pay in Defence Forces on account of the repercussions it would have had on civilian pay scales.

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Let CGDA Clear Our Doubts

BY SPEED POST

S Y Savur                                                                                            141, Jal Vayu Towers,

Cell: +91 9449676278                                                                      NGEF Layout,

            +91 9688782227                                                                  Indira Nagar (PO),

Email: sysavur@gmail.com                                                                Bangalore-560038

SYS/RTI/CGDA/2013                                                                        19^th September 2013

To,                                                                                          

(1) CPIO (Audit Wing),
Shri S Murali Krishnan IDAS

Senior ACGDA (IT), Office of the CGDA,                                                       

Ulan Batar Road, Palam, New Delhi – 110 010

REQUEST FOR INFORMATION

Sir,

1.         Please refer to the Opinion of the Attorney General of India letter No. MLJ No. AG 16/2013-ADV ‘C’ dated 14.8.2013 and AG DY No. 325/AG/OPIN dated 14.8.2013 on the subject of Implementation of Supreme Court order dated 4.9.2012 – Rank Pay Case (Major A. K. Dhanapalan Retd - reg and CGDA Note No. AT/I/1483/RB/X(PC)/V dated 23.5.2013.

2.         At Para 34 of the ibid Opinion letter of Ld Attorney General, states, inter alia: - “The CGDA has indicated that the minimum for each rank has not been arrived at after deduction of rank pay. It was in fact a recommendation of 4^th CPC….” (Photocopy of referred portion attached for ready reference)

3.         Further, the ibid opinion letter of the Ld Attorney General states as follows at Para 36, inter alia: - “…..There is no need to revise the minimum, if as stated by the CGDA it has been fixed on another basis.” (Photocopy of the referred portion is attached for ready reference).

4.         Please provide information by way of photocopies of documents that the CGDA relied on to make the above statements to the Ld Attorney General of India as neither any table nor a recommendation of minimum pay for each rank is in the 4^th Central Pay Commission’s Report, Part I, Chapter 28 – Armed Forces Personnel (Pages 283 to 306), including table at Annexe 28.1 which is an illustration showing the pay in the integrated scale of pay for army officers of different ranks in reference to Para 28.113 or in Chapter 30 – Fixation of Pay in Proposed Scales (pages 310 to 312).

5.         Since Rule 7 (1) (A) of CCS (RP) Rules 1986 has been quoted for not increasing the ceiling of the integrated scale of pay, please provide information by way of a photocopy of the same.

6.         Indian Postal Order No. 19F 707618 for Rs 10/- payable to CGDA at New Delhi is enclosed as application fee. It is requested that the undersigned may not be requested to visit the offices of CGDA to search for the information for reasons stated in earlier applications for information.

Yours truly,

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

Enclosures: as stated above

Clarifications by Ld Attorney General - Update

Please note that the Ld AG refers to a letter of 18.1.2013 from Chairman, CoSC and a SoC was sent on 2.4.2013 (Paragraphs 17, 18 & 25 refer). Also, CGDA has provided clarifications on 23.5.2013 Paragraph 37 etc).

So is there a second letter/SoC after the RM's directions of 14.6.2013?   

*         *           *            *            *
OFFICE OF MR GOOLAM E. VAHANVATI,

ATTORNEY GENERAL FOR INDIA

MLJ No. AG QW/2013-ADV. ‘C” DT. 1408.2013

AG Dy. No. 325/AG/OPIN DT 14.8.2013

Subject:                      Implementation of Supreme Court order dated 4.9.2012 –

Rank Pay Case (Major A. K. Dhanapalan, Retd. Reg

1.         I have perused the file. My opinion has been sought on the following issues:

(i)         Whether the MoD orders dated 27 Dec.12 have modified the Special Army Instructions 1/S/87 and corresponding Navy and Air Force Instructions in so far as it relates to deduction of Rank Pay and direct to re-fix the initial pay of the concerned officers of the three services in the revised scale (integrated scale) as on 1.1.1986. Whether the term ‘with effect from 1.1.1986’ should be used as given in the Single Bench’s order dated 05.10.98 passed in the High Court of Kerala, instead of using ‘as on 01.01.1986’? What consequences this change in term will entail?

(ii)        Whether the minimum pay for each rank given in Para 6 (a) (ii) of SAFI 1/S/87, needs to be re-fixed/changed?

(iii)       Whether the Basic Pay ceiling of integrated Scale in IV CPC for officers up to Brig/equivalent, which is Rs 5100/- also needs to be modified to give effect to the Court orders?  

(iv)       Since the treatment to Rank Pay while pay fixation carried out in 5^th CPC was similar to that of the 4^th CPC, whether orders of the Apex Court dated 04.09.2012 be applied to all subsequent Pay Commissions i.e. V and VI CPC under such circumstances.

2.         The above queries have arise in the following factual background:

FACTUAL BACKGROUND

3.         By resolutions dated 04.10.1986 and 18.03.1987, the Ministry of Defence, Government of India decided to accept the recommendations of IVth Pay Commission relating to the structure of emoluments and allowances of Commissioned Officers. These included creating of an integrated pay scale for officers upto the rank of Brigadier and equivalent in the Navy and Air Force, and for provision of rank pay in addition to pay in the integrated scale. The decision was to operate retrospectively with effect from 1.1.1986.

4.         One A. K. Dhanapalan, a retired Commissioned Officer (Major) in the Indian Army, filed O.P. No. 2448 of 1996 before the High Court of Kerala, claiming that while revising his pay, instead of adding Ran Pay to his emoluments, the Government had deducted the same.

5.         The Government justified the action of deducting Rank Pay on the basis of instructions dated 26.05.1987, which provided in para 6 (a) (ii) that rank pay could be deducted in order to fix the revised scale of pay at the stage next above the amount arrived at.

6.         The learned Single Judge, in its judgments dated 05.10.1998, found that the Government has totally misunderstood the nature of rank pay, and it was not justified in deducting the same while fixing the total emoluments payable to an officer.

7.         Accordingly, it was directed that the writ petitioner’s pay would be re-fixed with effect from 1.1.1986 without deducting the rank pay of Rs 200/-.

8.         The Writ Appeal filed by Government of India against the judgment of the Single Judge was dismissed by the Division Bench vide its judgment dated 04.07.2003.

9.         The Special Leave Petition filed by the Government of India against the Judgment of Division Bench was dismissed by the Hon’ble Supreme Court on 12.07.2005 on the ground of delay.

10.       Thereafter, the judgment of the Single Judge was implemented by the Government qua Mr. Dhanapalan, and an amount of Rs 28,031 was ordered to be releases to him.

11.       Subsequently, several writ petitions came to be filed before different High Courts as well as before the Supreme Court, seeking similar benefits as granted in Dhanapalan’s case. The Union of India moved a Transfer Petition for transfer of all these matters to the Supreme Court.

12.       On 08.03.2010, the Transfer Petition was allowed, and the Hon’ble Supreme Court vide the same order also disposed off the writ petitions directing grant of rank pay retrospectively with effect from 1.1.1986. In addition, the Hon’ble Court also directed payment of interest @ 6% per annum.

13.       Thereafter, the Union of India filed an I.A. for modification of the order dated 08.03.2010, citing the huge financial implications involved in implementing the same. Vide its order dated 04.09.2012, the Supreme Court modified its order dated 08.03.2010 with respect to the interest part, and directed that instead of from 1.1.1986, interest would have to be paid from 1.1.2006.

14.       Thereafter, the matter was referred to the learned Solicitor General for opinion, indicating certain difficulties in implementing the Supreme Court order. The then learned Solicitor General in his opinion dated 17.10.2012 opined that the Supreme Court order has to be compiled with, and all consequential benefits granted to the concerned officers.

15.       On 27.12.2012, the Ministry of Defence has issued instructions for implementation of the Supreme Court’s order. It has declared that Para 6 (a) (ii) of the Special Instructions dated 26.5.1987 which permitted deduction of rank pay at the time of fixing initial pay in revised scale is modified and no deduction of  rank pay is to be made. The instructions also provide for granting certain consequential benefits and interest after re-fixation of pay.  

16.       It is stated in the file that an amount of Rs 320.06 crores has been paid till 5.7.2013 to 2820 serving and 31, 125 retired beneficiaries.

17.       On 18.01.2013, the Chairman, Chiefs of Staff Committee addressed a letter to the Hon’ble Defence Minister, raising certain issues that have arisen in implementation of the Supreme Court order.

18.       The matter was examined in the Ministry and the Services were asked to send a detailed Statement of case in the matter which would be examined in consultation with Ministry of Finance, Ministry of Defence, Ministry of Law and Controller General of Defence Accounts. Accordingly, the Services submitted a Statement of Case dated 02.04.2013, raising four issues.

19.       These issues have been responded to by the Ministry of Finance, CGDA, and Ministry of Defence.

20.       The Hon’ble Minister of Defence, taking note of divergent views of the various issues, decided that the matter may be referred to me for opinion. It is in this regard that the above noted four queries have been raised for my opinion.

21.       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 deducting must be undone and pay fixed accordingly. Members of the armed forces should not be forced 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. 

22.       With these observations in mind, I shall now answer the queries raised for my opinion.

Query (I)        Whether the MoD orders dated 27 Dec.12 have modified the Special Army Instructions 1/S/87 and corresponding Navy and Air Force Instructions in so far as it relates to deduction of Rank Pay and direct to re-fix the initial pay of the concerned officers of the three services in the revised scale (integrated scale) as on 1.1.1986. Whether the term ‘with effect from 1.1.1986’ should be used as given in the Single Bench’s order dated 05.10.98 passed in the High Court of Kerala, instead of using ‘as on 01.01.1986’? What consequences this change in term will entail?

23.       In the judgment dated 05.10.1998 passed by the Learned Single Judge, the direction issued was as follows:

                                                Rest of the paragraph missing

24.       Part of paragraph missing …..scale (integrated scale as on 1.1.1986 as per para 6 of the above instructions without deduction of Rank Pay appropriate to the rank held by the officer on 1^st January 1986 from the amount worked out under para 6 (a0 (ii) thereof.”

25.       According to the armed forces as mentioned in letter dated 18 January 2013 written by Chairman, Chiefs of Staff Committee, the change of wording from “with effect from 1.1.1986” to “as on 1.1.1986” has led to the following anomalies: -

(i)         Officers promoted to the rank of Captain and equivalent after 1.1.1986 have not been granted the benefit of Court’s order, even though rank pay in their case had also been deducted at the time of fixation of their pay in the integrated scale. 

(ii)        Re-fixation of pay in case of certain Colonels and Brigadiers, the ceiling fixed in pay scale in terms of Para 6 (c) of the instructions would lead to a situation where either complete benefit is not granted to these officers, or there would even be reduction of pay in some cases. 

(iii)       The Government has not granted benefit of the Court’s order to those officers whose rank pay was deducted at the time of implementation of Vth and 6^th Pay Commissions.

26.       The CGDA has opined that in this case, the affected officers are those who were drawing pay in the rank of Captain to Brigadier as per 3^rd CPC on 31.12.1985 and whose pay was re-fixed as per SAI 1/S/87 and corresponding Navy and Air Force Instructions on 01.01.1986 after deducting rank pay. They submit that the wording “as on 1.1.1986” or “with effect from 1.1.1986” does not, in effect, make any difference. It has also been stated by 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 rank pay of the rank held, in addition.

27.       The Ministry of Finance has stated in para 16.1. and 16.2. of the document marked as Annexure XVI in the file that Special Army Instructions dated 26.05.1987 do not provide for deduction of rank pay as the stage of promotion subsequent to 1.1.1986 and that on a matter of fact, fixation of pay on promotion is the revised structure subsequent to 1.1.1986 was never after deduction of rank pay.

28.       For the sake of clarity, I may indicate what has been decided by the Court:

(i)         Section II of Special Army Instructions No. 1/S/87 dated 26.05.1987, deals with fixation and regulation of pay of officers commissioned prior to 01.01.1986.

            (ii)        Para 6 of Section II deals with Fixation of initial pay in the revised scales.

(iii)       Para 6 (a) (i) provides that an amount representing 20 percent of the basic pay in the existing scale shall be added to the existing emoluments of the officer.

(iv)       Para 6 (a) (ii) provides that after adding the aforesaid 20 percent, an amount equivalent to the rank pay, if any, appropriate to the rank held by the officer on 1.1.1986 will be deducted. Thereafter, the officer’s pay will be fixed in the scale at the stage next above the amount thus computed.         

29.       The Kerala High Court deduction of rank pay, in terms of Para 6 (a) (ii) to be unlawful, and this view has been upheld by the Supreme Court.

30.       Thus, the effect of decisions of the Kerala High Court and the Supreme Court is that at the time of fixation of pay in the revised scale, rank pay should not be deducted. The underlying principle is that rank pay is an emolument, and therefore, cannot be deducted when revised pay is fixed with reference to the pay being drawn earlier. 

31.       The Government needs to implement the orders of the Supreme Court in this 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.

Query (II)      Whether the minimum pay for each rank given in Para 6 (a) (ii) of SAFI 1/S/87, needs to be re-fixed/changed?

32.       Para 6 (a) (ii) of the Instructions dated 26.05.1987 refers to officers in the ranks of Captain, Major, Lt Colonel, Colonel and Brigadier and indicates minimum pay in the integrated scale against each rank.

33.       According to the armed forces, the minimum pay for each rank needs to be revised after taking into account the non-deduction of rank pay in terms of the Court’s order.

34.       The CGDA has indicated that the minimum pay for each rank has not been arrived at after deduction of rank pay. It was in fact a recommendation of 4^th CPC. Minimum pay has not been depressed due to deduction of rank pay. Further, there is no court order directing change in minimum pay for the rank.         

35.       The Ministry of Finance has indicated its agreement with views of CGDA.

36.       The issue of revision of pay scale did not arise and was not decided in Major Dhanapalan’s case. The issue of the minimum pay scale does not pertain to the real issue dealt with above. When the officer’s pay is revised I implementation of the Court’s order, the minimum of the pay scale does not come in the way, because if the pay has to be fixed at a stage next higher than the minimum, the same can be done. There is no need to revise the minimum, if as stated by the CGDA, it has been fixed on another basis.    

Query (III)    Whether the Basic Pay ceiling of integrated Scale in IV CPC for officers up to Brig/equivalent, which is Rs 5100/- also needs to be modified to give effect to the Court orders?  

37.       The differing views on this issue are as under:

            ISSUE 3: REVISING THE TOP OF INTEGRATED SCALE.

Armed Forces Views:  The top of the integrated scale as recommended by Pay Commission was Rs 5000. However the issue was further examined by the Government and it was decided to change the integrated scale to Rs 2300-100-3900-150-4200-EB-5100. The services now contend that the top of the scale of Rs 5100 should also be increased to remove the effects of deduction of rank pay. They have drawn equivalence  between Brig (on armed forces side) and DIG (Police) on civilian side to draw pay comparison. It is submitted that while DIG (Police) got Rs 6150 basic pay, the Brigadier’s pay in the integrated scale ws Rs 4950 with an additional amount of rank pay of Rs 1200.

The services point out that now with no deduction of rank pay, senior Cols and Brig would not be able to get full pay fixation benefit (20% of emoluments) as in their case revised emoluments go beyond the top of integrated scale from day one. The Services have proposed to adjust the top of the scale suitably to relate the original span of the integrated scale of 29 years as recommended by Pay Commission. Grant of stagnation increments or personal pay to the concerned officers have not been favoured by the services as they are not considered for purpose of determining corresponding replacement scale in subsequent CPCs.  

Amendment Sought by Armed Forces.         The Armed Forces have asked that the anomaly can be resolved by enhancing the upper limit of Rs 5100 in the integrated pay scale of IVth CPC, which has been arrived at after making allowance for the Rank, to ensure effective implementation of the Govt orders. 

CGDA’s views.             CGDA has pointed out that in order to benefit such officers an element of personal pay was projected in the instant case to MoF. But it was not agreed to by Ministry of Finance. In view of para 6 (o) of SAI 1/S/87 (Annexure XX) which states as under: -  

‘If the amount so computed as at sub-para a (ii) above is more than the maximum of the revised scale, the pay will be fixed at the maximum of the revised scale.’

The relevant Service Instructions provide for maximum three stagnation increments upto the rank of Brig, after completion of every two years qualifying service once the officer reaches the maximum of the scale. However, it is ensured that Basic Pay plus Dearness Allowance plus stagnation increments do not exceed the maximum of Basic Pay plus rank pay of the next higher rank i.e. Major General – Rs 5900-200-6700. 

Further, there is no court order directing changing of the integrated pay scale. In case the demand is met, the pay scale of next senior officer s will get burst, disturbing the horizontal and vertical relativity pay scales on Services side, paramilitary forces and civilian side also.

MoF views.      This Ministry agrees with the view of the office of CGDA on this issue as contained in their note No. AT/1/1483/RB/X (PC)/V dated 23.5.2013 (Annexure XVII).  

However, it has been mentioned in the said Note of the CGDA that in cases where emoluments (revised pay) computed without deducting rank pay crosses the maximum of the revised integrated scale, the Ministry of Defence has proposed that the difference by which the revised pay of the integrated pay scale may be protected by way of Personal Pay to be absorbed in stagnation increments or pay on promotion, but the same was not agreed to by the Ministry of Finance. The Ministry of Finance did not agree to the same for the following reasons: -  

(i)         At the outset, this issue was neither prayed for by Major Dhanapalan in his petition nor was it considered by the Hon’ble Kerala High Court nor is it covered in the order passed by the Hon’ble Court dt 5.10.1998.

(ii)        Para 6 (o) of Section II of the Special Army Instructions dated 26.5.1987 (Annexure XX) already provided that if the amount so computed as at pata 6 (a) (ii) is more than the maximum of the revised scale, the pay shall be fixed at the maximum of the revised scale. In other words, if the initial pay fixed in the revised integrated scale exceeds the maximum thereof, pay cannot be more than the said maximum. Thus now that the …. Pertaining to deduction of rank pay part at para 6 (a) (ii) from existing emoluments (or revised emoluments) as on 1.1.1986 has been removed, the amount computed without deduction for the fixation of initial pay/fitment in the revised pay scale as on 1.1.1986 also cannot exceed the maximum of the revised integrated scale effective from 1.1.1986 as the principle laid down in said para 6 (c) is not part of judicial pronouncement based on which the order of 27.12.2102 has been issued.        

Thus the demand of Service Headquarters does not flow from the judicial pronouncement in this case. This being so, its implementation as part of the order dt 27.12.2012 does not arise.  

Apart from the above, the proposal of the Ministry of Defence for Personal Pay, in such a case is not justified on merits also as brought out below: -

(i)         A person drawing pay in a particular scale of pay attached to the post held by him, cannot draw pay in excess of the maximum of the connected scale of pay. This is the concept of a Specific pay scale. Of course since the rank pay is a separate element, the total pay (Pay in the integrated scale + rank pay) can very well exceed the maximum of the integrated pay scale and that is exactly what is happening here. It is being …. that Rank Pay is a separate element in addition in the pay in the integrated scale and as such Pay + rank pay is not restricted to the maximum of the integrated scale. It is only the pay in the integrated scale that is not to exceed the maximum thereof.      

(ii)        A similar provision exists in proviso (b) to Rule 7 (1) (A) of the CCS (RP) Rules 1968 relating to fixation/fitment of initial pay of civilian Government servants in the revised pay scales as on 1.1.1986. A copy of the relevant extract from the said Rules is at Annexure XXII. Therefore, no special dispensation can be allowed in this case now that the pay to be fixed in the integrated pay scale as on and  w.e.f 1.1.1986 exceeds the maximum of the integrated scale.

(iii)       In case a person stagnates at the maximum of the scale, stagnation increments in the concerned pay scale as preapproved Rules are applicable. Office of CGDA has confirmed that stagnation increments are admissible to Armed Forces officers as per orders of 11.9.1987.   

(iv)       In fact the phenomenon of initial pay fixed in a revised pay scale at the maximum from the very date of implementation of the revised pay scales has been specially taken note of by the 6^th CPC. The 6^th Central Pay Commission noted that many of the pay scales recommended by the 5^th Central Pay Commission got “burst” at the time initial fixation where revised pay of some of the employees became higher than the maximum of the revised pay scales and these employees, therefore, had started to stagnate right from the time of implementation of the 5^th Central Pay Commission pay scales. It is for this reason that the 6^th Central Pay Commission has recommended the concept of running pay band instead of specific pay scales. The Commission noted that since the individual pay scale has a limited span, it often leads to stagnation. The Commission, therefore, recommended the concept of running pay bands to address these issues. In this connection, the recommendations of the Pay Commission contained in para 1.2.7, 1.2.8. and 2.2.4 are collectively placed at Annexure XXIII.     

(v)        Thus the situation as it existed upto 1.1.2006 was that there were cases of the employees reaching at the maximum of the individual pay scale and this did not by itself mean allowing them to draw pay more than the maximum of the pay scale by way of Personal pay. They were only allowed stagnation increments and that is admissible in case of Armed Forces personnel also. Therefore, any benefit in the form of personal pay is the instant matter is against the normal and general policy.

(vi)       Also, the initial pay fixed in this as on 1.1.1986, which is of course w.e.f 1.1.1986 after the order dated 27.12.2012 in implementation of the judicial pronouncement in this case, does not fall below the initial pay earlier fixed in the integrated pay scale before issue of the order dt 27.12.2012 and, therefore, this is no actual loss in the initial pay and hence, there is no basis for grant of personal pay in such cases.”     

38.       Para 6 (a) (c) of the Instructions dated 26.05.197 provides as follows: -

“If the amount so computed as at sub-para (ii) above is more than the maximum of the revised scale, the pay will be fixed at the maximum of the revised scale.” 

39.       It is clear from the above that ceiling on pay scales rises out of Para 6 (a) (c), which did not arise nor was considered in Major Dhanapalan’s case. 

40.       The only issue decided by the Kerala High Court and consequently the Supreme Court is whether rank pay is 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 (c0 is not subject matter of these judgments. 

Query (IV)     Since the treatment to Rank Pay while pay fixation carried out in 5^th CPC was similar to that of the 4^th CPC, whether orders of the Apex Court dated 04.09.2012 be applied to all subsequent Pay Commissions i.e. V and VI CPC under such circumstances.

41.       The divergent views on this issue are as under:

            ISSUE – 4: APPLICATION OF COURT ORDERS TO SUBSEQUENT PAY COMMISSIONS

Armed Forces views:  The Services contend that deduction of rank pay at the time of the 4^th CPC implementation which has been set aside should also be followed at the next pay revision i.e. 5^th CPC. They have stated that deduction on rank pay in 1996 also have led to lower pay scales granted to relevant army officers.

Armed Forces have stated that the decision of the Apex Court having been agreed to and implemented has now become law of the land which needs to be applied equally to other similarly placed cases/situations. The ratio of this case has to be applied to subsequent Pay Commissions in similar situations 

Amendments sought by Armed Forces:       The Armed Forces have maintained that to resolve the above issue corresponding amendments to the relevant Special pay Instructions for the 5^th and 6^th CPCs are also required so as to give effect to the verdict of Hon’ble Supreme Court/Kerala High Court in letter and spirit.

CGDA’s views:             CGDA has stated that Major Dhanapalan sought revision of pay from 1.1.1986 citing court orders in the present matter. He was informed that the Hon’ble Kerala High Court order was for not deducting rank pay as on 1.1.1986 when Rank Pay was introduced for the first time based on IV CPC recommendations ad not as on 1.1.1996. An element of rank pay was already included in the pay at the time o pay fixation as on 1.1.1986 and 40% fitment benefit was given thereon.

No further communication from him or any court was received thereafter. The case was before courts from 1998 to 2012 and it was never an issue. Neither the Kerala High Court nor Supreme Court has issued any directives for revision of pay fixation formula for Fifth Pay Commission or the Sixth Pay Commission. 

Def (Fin) views:          The issue raised is not covered under the Supreme Court order dated  4.9.2012. The change in pay due to this order would automatically be accounted for in subsequent pay commissions revision with reference to orders issued on such recommendations.

MoF views:      The Ministry of Finance agrees with the views of the office of CGDA on the issue contained in their Note No. AT/I/1483-RB/X(PV)/V dated 23.5.2013 (Annexure XVII). 

This issue does not form part of the Order of the Hon’ble Kerala High Court dt 5.10.1998”

42.       In my opinion, 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 4^th Pay Commission 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 5^th and 6^th Pay Commissions cannot be expected to approach the Courts for orders in the same terms. 

43.       I have nothing further to add.

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

(GOOLAM E. VAHANVATI)

Attorney General of India

03.09.2013       

New Delhi

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