1. Compulsory retirement as punishment — Dispute over whether pension and retiral benefits should be computed based on revised pay scales or pre-suspension emoluments. (Para 3 , 4 , 5 , 6 )
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1999 Supreme(SC) 817
1999(6) Supreme 506
Supreme Court of India
(From CAT Chandigarh)
Dr. A.S. Anand, CJI., M. Jagannadha Rao & N. Santosh Hegde, JJ.
R.P. Kapur -Appellant
versus
Union of India -Respondents
Civil Appeal No. 4323 of 1999
(Arising out of SLP (C) No. 1247/98)
Decided on 9-8-1999
Counsel for the Parties :
For the Appellant : In-person
For the Respondents : K.C. Kaushik, Ms. Sushma Suri, Advocates.
Important Points
Important points
1. Where Railway was suspended from service and ultimately retired Compulsorily with stipulation period of suspension may be counted for pension purpose alone, pensions in terms of rule 50 of Railway service pension Rule 1993 has to be calculated on basis of subsistence allowan he was drawing at the time of compulsory retirement.
2. Subsistence allowance would come withein meaning of emolument for purpose of calceelation of pension.
1. Where Railway was suspended from service and ultimately retired Compulsorily with stipulation period of suspension may be counted for pension purpose alone, pensions in terms of rule 50 of Railway service pension Rule 1993 has to be calculated on basis of subsistence allowan he was drawing at the time of compulsory retirement.
2. Subsistence allowance would come withein meaning of emolument for purpose of calceelation of pension.
Subject
Service Law - Pension and Retiral Benefits
Act Referred
RAILWAYS SERVICES PENSION RULES: R.49, R.50, R.37
SERVICE LAW: .
SERVICE LAW: .
Headnote
(i) Service Law - Pension -Railway Services (Pension) Rules, 1993-Rule 50-Appellant was placed under suspension 21-1-1982 and compulsorily retired on 25-11-1992 - Pay scale revised during suspension period w.e.f. 1.1.1986-Compulsory retirement order stated period of suspension to be counted as qualifying service for pension and pay for entire suspension period would be restricted to subsitence allowance-Department calculating pension on basis of pay received prior to suspension-Not correct-Pension has to be calculated on basis of revised pay ie on basis of revised subsistence allowance appellant was drawing - Subsistence allowance come within difinition of emoluments.
(ii) Words and phrases-Emoluments - Sabsistence allowance, whether come within definition of emolument. (Para 23)
Held : According to note 2 below Rule 50 of the Railway Service Pension Rules, 1993, 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. In our 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. (Para 21)
Further 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 emcluments 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 respondent’s 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. (Para 22)
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 allowancs’ doed not come within the definition `emoluments’. The respondents in this context have failed to notice Rule 49 which immediately precedes Rule 50. 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. The 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 respondents. Thus 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 the respondents. (Para 23)
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. The 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. (Para 24 & 26)
Legal Category Hierarchy
Table of Contents
2. Whether pension should be calculated using subsistence allowance drawn under revised pay scales or based on pay drawn prior to the date of suspension. (Para 8 , 9 , 11 , 15 )
3. Interpretation of Rule 50 and Rule 49 — Suspension period counting as qualifying service prevents its exclusion; subsistence allowance constitutes emoluments as monthly amounts drawn. (Para 18 , 19 , 20 , 21 , 22 , 23 , 24 )
4. When suspension period is expressly treated as qualifying service, the emoluments drawn during that period, including subsistence allowance, must be used for pension computation. (Para 21 , 23 )
5. Appeal allowed — Pension and retiral benefits to be re-computed based on revised subsistence allowance with interest awarded on arrears. (Para 25 , 26 )
6. Does a suspension period that counts as qualifying service get disregarded for the calculation of average emoluments?
No. Under Rule 50 Note 2, a suspension period is disregarded only if it does not count as service. If the competent authority expressly declares that the suspension period counts as qualifying service, it cannot be omitted from the calculation of average emoluments. (Para 20 , 21 , 22 )
7. Does subsistence allowance fall under the definition of emoluments for pension calculation purposes?
Yes. Rule 49 and Rule 1303 define emoluments as the amount drawn monthly by a government servant. Since subsistence allowance is the monthly amount drawn by a servant under suspension, it satisfies the definition of emoluments. (Para 23 )
8. Can pension be computed based on subsistence allowance fixed under revised pay scales?
Yes. If the subsistence allowance was fixed and drawn based on revised pay scales, the pension should be computed using those revised amounts drawn in the ten months preceding retirement, rather than reverting to pre-suspension pay. (Para 24 , 25 )
Judgment
M. Jagannadha Rao, J.-Leave granted.
2. This 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 :
“The 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.”
3. At the 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.
4. The 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.”
5. 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 become disentitled for computation on the basis of 75 of teh pay as revised w.e.f. 1.1.1986.
6. On the 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 ws slightly modified by arriving at Rs. 1668.22 as the monthly averge 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. These figures were based on the average emoluments ten months prior to 21.1.1982 and n
