R P Kapur
Vs. Union of India & Ors  INSC 252 (9 August 1999)
JAGANNADHA RAO, & N. SANTOSH HEGDE. M. JAGANNADHA RAO,J.
is an appeal by the appellant ( party- in-person) against the judgment of the
Central Administrative Tribunal, Chandigarh Bench, in O.A.No. 423/HR/94 dated
11.10.96. At the time of the admission of the Special Leave Petition on
17.2.98, limited notice had been issued restricting the dispute to the question
whether pension and retiral benefits are to be computed on the basis of revised
scales of pay. That order reads as follows:
grievance of the petitioner appears to be that though pension payment order has
been made in his favour but the pension has not been calculated at the revised
pay scales. It is submitted that none of the retiral benefits have been
calculated at the revised scales. Issue notice to the respondents limited to
the said question".
outset, we may state that we are concerned in this case with compulsory
retirement of a government servant as a matter of punishment after a regular
disciplinary inquiry. We are not here concerned with a case where a public
servant is retired compulsorily in public interest.
facts of the case, relevant to the dispute, are as follows: The appellant
joined service on 19.11.1971 in the Indian Railway Service of Signal Engineers
(Class II). On the ground of certain misconduct, he was suspended from service
on 21.1.1982, pending a disciplinary inquiry. At the conclusion of the inquiry,
he was compulsorily retired under an order dated 17.11.1992, after due
consultation with the Union Public Service Commission. The material part of
that order which became effective from the date of its service, namely,
25.11.92, reads as follows:- "The President has, therefore, decided to
impose on Sri R.P. Kapur, a penalty of compulsory retirement from service with
the condition that while the payment during the entire period of suspension
from 21.1.1982 to the date of service of this order, will be restricted to the
subsistence allowance drawn, this period may be allowed to count as qualifying
service for pension but for no other purpose." On 28.5.93, an order was
passed by the Railways (P.52 of the paper book) that "since the appellant
was paid only subsistence allowance during the period of suspension upto the
date of compulsory retirement, the relevant period of 10 months for calculation
of average emoluments for pension would be the one relating to 10 months period
preceding 21.1.1982", i.e. the date on which he had been initially placed
under suspension. In other words, instead of computing the pension on the basis
of the average emoluments i.e. subsistence allowance drawn in the 10 months
before 25.11.92, the date of compulsory retirement, it was proposed to compute
the pension on the basis of the average emoluments, namely the pay drawn during
the 10 months before the order of suspension dated 21.1.1982. The result was
that the appellant became disentitled for computation on the basis of 75% of
the pay as revised w.e.f. 1.1.1986.
basis of the above order dated 28.5.1993, the impugned order dated 25.6.1993
(see P. 39-40 of the paper book), was passed by the respondents taking the 10
months 'pay' before suspension 21.1.1982 at Rs.1250/- p.m. They arrived at a
monthly average of Rs.1618.22 and computed the pension at Rs.518, deducted
Rs.171/- being 1/3 of the pension commuted, and together with other inputs
arrived at a figure of Rs.1178/- p.m. w.e.f. 25.11.1992. Family pension and
other retiral benefits were also computed on that basis . It appears from the
counter filed on 9.3.99 by the respondents, that pursuant to certain orders in
O.A.265 of 1994 dated 4.7.96 of the Central Administrative Tribunal, Chandigarh
Bench, the above order was slightly modified by arriving at Rs.1668.22 as the
monthly average and pension was fixed at Rs.529 and brought on par w.e.f.
1.1.86 at Rs.1192/- p.m. plus variable Dearness allowance.
figures were based on the average emoluments ten months prior to 21.1.1982 and
not the average of the subsistence allowance paid during 10 months before
appellant has placed on record the orders of the Chief Personnel Officer, N.E.
Railway ( at P.42 of the paper book) dated 4/5.10.1988 to show that after
1.1.1986, initially his pay was computed in the revised-scale of Rs.2200-4000
and fixed at Rs.2650/- p.m. w.e.f. 1.1.86 and on that basis his subsistence
allowance at the rate of 75% of the pay was fixed as above under sub rule (ii)
of Rule 2043 (FR 53) R-II. That order reads as follows:
terms of Central Administrative Tribunal, Guwahati's Judgment in case NO.GC
171/87, the pay of Shri R.P. Kapur, (ASTE, under suspension) in the revised
scale of Rs.2200-4000/- (RSRP) is fixed @Rs.2650/- with effect from 1.1.86 This
has been certified by the FA & CAO/EGA/Maligeon vide his endorsement No.Nil
R.P. Kapur, is under suspension, subsistence allowance at the rate of 75% of
the pay fixed as above may be drawn/adjusted accordingly in terms of sub-rule
(ii) of Rule 2043 (FR 53) R-II. Sd/-(Illegible) For Chief Personnel Officer N F
Railway No.202E/2/60(O) Loose Dated 4/5.10.1988" (It may here be noted
that while according to the appellant, after 1.1.1986, the pay was re-fixed at
Rs.2650/- p.m., the counter affidavit of the respondents in the Tribunal put
the re-fixation after 1.1.86 at Rs.3300/- p.m.).
appellant, therefore, contends that when the subsistence allowance is 75% of
pay instead of adopting the 75% of the average of 10 months pay i.e. average of
Rs.2650/- p.m. for 10 months (or Rs.3300/- as stated in the counter) - being
the amount per month paid in the last 10 months before the compulsory
retirement on 25.11.1992,- the respondents have wrongly computed the pension
and all other retiral benefits illegally on the basis of Rs.1250/- p.m. the pay
during the 10 months preceding the order of suspension dated 21.1.82.
shall now refer to the response of the respondents in their initial counter
affidavit filed before the Tribunal which, on its face, appears to be self contradictory.
It is stated there ( P.47 of the paper book) that the Railway Board in
consultation with the Department of Pension and Pensioners' Welfare have taken
the view that "since the petitioner was paid only subsistence allowance
during the period of suspension, the relevant period of 10 months for
calculation of average emoluments for the pension should be the one relating to
10 months period preceding 21.1.82, i.e. the date on which the petitioner had
been kept under suspension". The above contention in the counter is
obviously based on the order dated 28.5.93 referred to earlier. It is then
stated in the counter rather curiously that even if the average emoluments are
fixed as per the pay revision w.e.f. 1.1.86, the pension will not increase.
This peculiar logic in the counter is worth quoting:
is pertinent to mention here that even though the pension was calculated on the
basis of pre-revised scale as on 1.1.86, the pension of the petitioner has been
fixed at Rs.1178.00 which is equivalent to the revised pay scale as on 1.1.86
plus normal relief as admissible form time to time to the pensioners.
Therefore, it is implied that the petitioner has been paid his due pension
equivalent to the revised pay scale as admissible in such case. If his revised
pay of Rs.3200/- were taken into consideration for the purpose of calculation
of pension, he would be getting the same pension i.e. Rs.1178.00. Therefore,
the prayer of the pensioner has got no merit and deserves to be
dismissed." It is not clear, mathematically how the pension computed on
the pay drawn as per the pre- revised scale (Rs.1178 or Rs.1192 p.m. as the
case may be), can be the same even if it computed on the basis of the pay
revised w.e.f. 1.1.86 i.e. Rs. 2650 (or Rs.3300 p.m.).
stated in another para ( para 4.11) of the same counter filed in the Tribunal
that "even though the pay of the petitioner was fixed in revised scale of
pay Rs.3000-4500, he did not draw the pay because of the fact that he was
placed under suspension w.e.f. 21.1.82 and he was paid only the subsistence
allowance during this period from 21.1.82 to 25.11.92 and not 'pay' as stated
by the petitioner". It was further stated ( para 4.12) " .........
the calculation of pension, gratuity and commutation was correctly done and
there is no anomaly in calculation taking into account the pay of the
petitioner immediately before his suspension w.e.f. 21.1.82". What the
respondent meant was that inasmuch as the appellant did not drawn "full
pay" as revised from 1.1.1986 but only "subsistence allowance"
on such revised pay, he could not claim any computation to be made on the basis
of the subsistence allowance between 1981 to 1992. The reason was that pension
was to be based on full pay. Full pay was drawn only before the suspension in
appellant filed a rejoinder before the Tribunal and submitted that the above
method of computation was not correct.
O.A. was dismissed by the Tribunal on 11.10.96 holding that the contention of
the respondents was correct and that the appellant's contention, if accepted
would amount to treating the period of suspension as on duty. It was stated in
that order of the Tribunal that the dismissal of the O.A. would, however, be
subject to the result of O.A.267/HR/94 where the order of compulsory retirement
was under challenge. A review petition filed by the appellant was dismissed on
17.12.1996 holding that the appellant's "contention that the period of
suspension from 21.1.82 to 25.11.92 should be treated as period spent on
duty" could not be accepted in view of the terms of the order of
by the judgment of the Tribunal dated 11.10.96, this appeal has been filed.
Before us, the appellant has raised the same contentions as he raised before
counter has been filed by the respondents in this Court on 15.10.98 contending
that in the circumstances of the case, the appellant is to be treated as one
under suspension till 25.11.92, the date of compulsory retirement. The period
under suspension "may count for any specific purpose e.g.
service/leave etc. provided the competent authority passes a specific order to
that effect." The President has passed a specific order that the period in
question may count as qualifying service for the purpose of pension and not for
any other purpose. "The special dispensation was made by the Disciplinary
Authority only to help the petitioner for spending 10 years under
further stated that "under Rule 502 of Railway Manual of Pension Rules,
1950, average emoluments should be determined with reference to emoluments
drawn by a government servant during the last 10 months of his service".
The said rule, it is said, has laid down that "if during the last 10
months of his service a government servant had been under suspension, the
period whereof does not count as service, the aforesaid period of suspension
should be disregarded in the calculation of the average emoluments and equal
period before the 10 months shall be included".* Then it is stated:
petitioner had been under suspension for more than 10 years before
---------------------------------------------- *We may here point out that Rule
502 of the 1950 Rules has been examined by us from the Manual.
does not contain any such provision as quoted above. The provisions quoted are
obviously from Rule 50 of the Railway Services ( Pension) Rules, 1993 which
replaced the Manual of 1950. In fact, in the additional counter filed on 9.3.99
the respondents have relied upon and set out only Rule 50 of the 1993 Rules.
his compulsory retirement and, therefore, even an equal period of 10 months
preceding the 10 months of his retirement would fall within the suspension
period during which he had drawn only subsistence allowance. Thus, if the whole
period of the suspension period is ignored the relevant emoluments will be one
relating to the 10 months period preceding 21.2.82 from which he was placed
other words, it is accepted in the counter that the "suspension period is
ignored". Then it is further stated that (see P.92 of the paper book)
there is a distinction between `subsistence allowance' and `pay' and that
pension can be only on 'pay' and that hence one has to go back to the period 10
months before 21.1.82, the date of suspension. Then comes an important plea
that for the peculiar contingency arising in the case of the appellant, there
is no provision in the Rules which permits the computation of pension on
subsistence allowance, i.e. even though such subsistence allowance has been
computed at 75% of the pay as revised w.e.f. 1.1.1986. That para in the counter
reads as follows:
the existing rules, there is no provision to take the average of the
subsistence allowance for calculating the average emoluments for purposes of
pension. Since the petitioner did not draw regular pay and allowance in the
revised scales of pay w.e.f. 1.1.86 to 25.11.92, there is no scope to calculate
his average emoluments for the purpose of pension and other pensionary dues as
per the revised pay scales".
the appellant filed his rejoinder, this Court directed the respondents to
produce the relevant Rules. Thereafter, a further additional counter was filed
on 9.3.99. Reference was made there to Rule 50 of the Railway (Pension) Rules,
1993. That Rule is set out in the counter as under:
50 - Average Emoluments : Average emoluments shall be determined with reference
to the emoluments drawn by a railway servant during the last ten months of his
1:- If during the last ten months of his service a railway servant had been been
absent from the duty on leave of which leave salary is payable or having been
suspended had been reinstated without forfeiture of service, the emoluments
which he would have drawn, had he not been absent from duty or suspended, shall
be taken into account for determining the average emoluments.
that any increase in pay (other than the increment referred to in Note 3 )
which is not actually drawn shall not form part of his emoluments.
2:- If, during the last ten months of his service, a railway servant had been
absent from duty on extraordinary leave, or had been under suspension the
period whereof does not count as service, the aforesaid period of leave or
suspension shall be disregarded in the calculation of the average emoluments
and equal period before the ten months shall be included". (This rule
corresponds to FR 34)".
stated in the counter-affidavit that "as per rule, if an employee is
awarded a major penalty and the suspension period is treated as wholly
justified, in that case, such employee is not entitled for any benefit of
service and the period of suspension cannot be treated as 'on duty'". It
is stated that the President, who is the Disciplinary Authority, has passed a
specific order that while the payment during the entire period of suspension
will be restricted to 'subsistence allowance only', the said period may be
allowed to be counted as qualifying service for the purpose of pension and not
for any other purpose. Hence, the petitioner is not entitled to get any other
benefit for the suspended period, i.e. 21.1.82 to 25.11.92. On the above
reasoning, it is contended that the "petitioner is not entitled for
pension on the revised pay-scale in the light of the aforesaid rules".
are the relevant orders and the relevant contentions on both sides.
have now to decide whether the above contentions raised in the various counter-
affidavits are correct.
shall first proceed to analyse Rule 50 of the Railway Services ( Pension )
Rules, 1993. The said Rule speaks of 'average emoluments drawn" by a
railway servant during the last ten months of his service. Note 1 below the
said rule, it will be seen, deals with a case of 'reinstatement' and hence Note
1 cannot obviously apply. But it is necessary to explain what it means. It
states that if the person suspended is reinstated without forfeiture of
service, the emoluments which he "would have drawn" shall be taken
is a proviso to Note 1. It states that increase in pay which is 'not actually
drawn' shall not form part of his emoluments. Considerable reliance has been
placed on this proviso by the respondents to contend that the appellant has not
drawn the full revised pay w.e.f. 1.1.1986 but he has drawn only subsistence
allowance. In our view, this proviso cannot apply because Note 1 itself, as
seen above, does not apply. However, what the proviso means is that increase in
pay not actually drawn i.e. which is only notionally fixed but without a right
for payment - as in E. Gopalakrishna vs. Union of India ( 1995 Supple
(4) SCC 205) - cannot go into the computation.
then come to Note 2 on which greater reliance has been placed in the counter
reads the Note 2 carefully, it is clear that in cases where during the last ten
months of one's service, the person has been under suspension, - the period
whereof does not count as service,- the said period of suspension is to be
disregarded while computing pension.
it carefully, it will be seen that only if the suspension period is not to
count as service, the said period is to be disregarded. In our opinion, the
words 'the period whereof does not count as service' are important and have to
be given effect to. On the other hand, if the suspension period is liable to be
reckoned, then obviously the said period cannot be disregarded.
view, the respondents have obviously ignored the said word `not', and clearly
misinterpreted the said Note II below Rule 50. In the case of the appellant, -
in terms of the very language of the order of compulsory retirement passed by
the President of India, the period of suspension is to count towards
"qualifying service". If the President, as the Disciplinary
Authority, has directed that the period of suspension shall count as qualifying
service - it is, in our opinion, wholly impermissible for the Railways to omit
the said period from consideration on the specious ground that before 25.11.92
appellant has drawn only subsistence allowance and not pay. The very purpose of
the order of the President cannot thus be allowed to be defeated.
also point out that under Rule 37 of the Pension Rules 1993, it is stated that
where "a railway servant is kept under suspension pending inquiry into his
conduct, the period of such suspension shall count as qualifying service only
where on conclusion of such inquiry, he has been fully exonerated or the
suspension is held to be wholly unjustified and in other cases, the period of
such suspension shall not count unless the authority competent to pass orders
under the rule governing such cases expressly declares that it shall count to
such extent as that authority may declare...". In the present case, there
is an express direction by the President to count the service, within this
Rule. Therefore, once the suspension period is directed to be counted for
computing the qualifying service, it is the emoluments drawn at the end of the
period just before retirement that become relevant and not the 'pay' drawn
before the commencement of suspension,- which in this case goes to a period ten
years before 1992. Further, it will be noticed that the appellant has put in
less than 20 years, by the date of his suspension on 21.1.1982 he having been
recruited in 1971. From 1971, the service upto 21.1.82 will be less than 20
years, and if we accept the respondent's contention no pension can in fact at
all be paid. It is not the respondents' contention that no pension need be
paid. This is again one more reason as to why the contention of the respondent
is to be rejected.
shall next refer to the other contention that the appellant has not drawn
"emoluments" which can amount to 'pay' during suspension and that he
has only drawn 'subsistence allowance' and that that cannot be described as
`pay'. It is the respondent's contention that unless `emoluments' are drawn the
`average emoluments' cannot be computed. The said contention, in our opinion,
is based upon a misapprehension that 'subsistence allowance' does not come
within the definition 'emoluments'. The respondents in this context have failed
to notice Rule 49 which immediately precedes Rule 50. As we shall presently
show, a proper interpretation of Rule 49 read with Rule 1303 of the Railway
Establishment Code ( Part II) will lead to the conclusion that `suspension allowance'
also comes within the definition of `emoluments'.
49 defines 'Emoluments' as follows:- "Rule 49: Emoluments:- The expression
'emoluments' for the purpose of calculating various retirement and death
benefits, means the basic pay as defined in clause (i) of Rule 1303 of the Code
(i.e. the Railway Establishment Code) which a railway servant was receiving
immediately before his retirement or on the date of his death;
in these rules means the pay in the revised scales under the Railway Services
(Revised Pay) Rules, 1986." Inasmuch as Rule 49 refers to Rule 1303 of the
Railway Establishment Manual ( Vol.2), we shall refer to the said rule 1303,
(which corresponds to F.R.9(21)(a)). That Rule reads as follows:
1303: Pay: Pay means the amount drawn monthly by a government servant as:- (i)
the pay, other than special pay....
pay, special pay and personal pay; and (iii) any other emoluments which may be
specifically classified as pay by the resident.
pay - Average Pay means the average monthly pay earned during the 12 complete
months immediately preceding the month in which the event occurs which
necessitate the calculation of average pay" Rule 49 refers to 'basic pay'
and Rule 1303 refers to 'amount drawn'. In our view, a combined reading of Rule
49(1) and Rule 1303 above referred to shows that if full basic pay is
`emoluments', that being the monthly amount drawn, then the 75% of the full
basic pay will also be `emoluments' in the case of a person under suspension,
it being the amount drawn month by month by the government servant. Thus the
first condition is satisfied.
other requirement of the definition of `emoluments' for purpose of pension is
that the amount is to be computed on the basis of emoluments drawn during the
10 months before retirement. This condition cannot be disregarded by the
both ingredients of the definition of `emoluments' are satisfied. Further, it
will be noticed that Rule 49(2) specifically requires that the scales as revised
w.e.f. 1.1.1986 are to be taken into account as per the Railway Services
(Revised Pay) Rules, 1986. This sub-rule cannot be allowed to be disregarded by
view of the above rule position, the contentions raised in the counter cannot
Tribunal, in our opinion, is wrong in thinking that if the subsistence
allowance before 1992 is adopted, it will amount to treating period of
suspension as on 'duty'. We may point out that the petitioner is not asking
that his pension is to be fixed on the basis of the full salary payable in the
10 months before 25.11.92. The appellant's plea is that the pension is to be
fixed on the basis of the subsistence allowance fixed and drawn by him in the
10 months preceding 25.11.92. That has been fixed on the basis of the scales as
revised w.e.f. 1.1.1986. This plea, in our opinion, is certainly permissible
under the Rules.
other hand, if we have to go back to the emoluments drawn before suspension
i.e. average during 10 months before 1982 - then that will amount to going by
the pre-1982 emoluments while the rule requires that the emoluments during 10
months before retirement are to be taken into account.
all the reasons given above, we are of the view that the appellant is entitled
to have his pension fixed on the basis of the revised subsistence allowance
fixed and drawn by him as per the order of the Chief Personnel Officer dated
4/5/.10/1988, as per the pay revision w.e.f. 1.1.1986. We may add that it is
not clear whether the revised pay has been fixed at Rs.2650/- p.m.
1.1.86 as per the order filed by the appellant or if it has been fixed at
admitted by the respondents in the counter filed before the Administrative
Tribunal. We, therefore, declare and direct as follows. If the revised pay is
indeed Rs.2650/- p.m. and his subsistence allowance is 75% thereof, the
appellant will be entitled to the 75% of Rs.2650/- to be treated as the
'emoluments' for the previous 10 months before 25.11.92 till which date he has
been in service ( even if he was under suspension). Average emoluments, for
purposes of pension have to be fixed on that basis. If the re- fixation of pay
is Rs.3300/- as stated in the respondents' counter in the Tribunal, the average
emoluments have to be worked out on the basis of 75% of Rs.3300/- during 10
months before 25.11.92. If on such fixation, the appellant is entitled to other
additions like DA etc. and which are periodically revised, the same shall also
be computed w.e.f. 25.11.1992.
pension and family pension shall, therefore, be re-computed on the above basis
and paid to the appellant w.e.f. 25.11.1992. The other retiral benefits will
also be re-fixed on the above basis w.e.f. 25.11.1992 and paid to him. The
computation of the family pension shall also be done on that basis. On account
of the long delay and denial of pension and retiral benefits on a wrong
interpretation of the Rules, we deem it fit to award 12% interest on all the
arrears payable to him on the above basis in respect of pension and all
benefits. Arrears have to be computed with effect from the date of retirement
appeal is allowed as stated above but there will be no order as to costs.