1. Dispute over whether employees retired prior to a specific date are entitled to include notional special pay in pension calculations. (Para 1 , 2 )
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1995 Supreme(SC) 1055
SUPREME COURT OF INDIA
E. GOPALAKRISHNAN
Vs.
UNION OF INDIA
Decided on October 31, 1995
Important Points
Pension must be computed based on the average pay actually drawn by the employee. Notional pay increases implemented to remove anomalies for employees in service cannot be used to step up pension calculations for those who retired before the effective date of such increases.
Subject
Employment Law - Pension and Retirement Benefits
Act Referred
Headnote
Constitution of India – Article 14 –Appellants, nine in number, admittedly had retired prior as either head clerks or chief clerks, the last being – It appears that a practice was vogue at one point of time that for the discharge of special duties, a sum of as special pay was granted to the upper division clerks working in certain special posts – Decision was taken that on promotion as head clerk or special clerk, they would not be entitled to carry with them the special pay of per month – Admittedly, the appellants had been promoted, as stated earlier, as head clerks or chief clerks and they were not given the special pay of per month from the date of their promotion as head clerk or special clerk, they would not be entitled to carry with them the special pay of per month from the date of their promotion till the date of their retirement prior –Held, Court find that there is no justification in the stand taken by the appellants. Admittedly, they have retired prior – Benefit that was given by Board as well as the order of the Tribunal and the respondent was to remove the anomaly in the pay structure and bring uniformity applying notional scale of pay of those promoted as head clerks/ chief clerks between but denied payment of arrears – In other words, no salary with as special pay was made to any one. that benefit was given only to those who continued in servicenotional pay is considered in that perspective only for the purpose of removing the anomaly – Pension is required to be computed on calculation of average of 10 months pay actually drawn by the employee – Since the appellants admittedly were not in Service as, the date on which the notional pay was given effect to, they had not actually drawn the pay including – Accordingly, the scale of pay including per month cannot be stepped up for computing the pension – Appeal dismissed.
Legal Category Hierarchy
Advocates:
A.D.N.Rao, A.N.JAYARAM, ARVIND SHARMA, C.V.SUBBA RAO, K.SWAMY, S.SUNDARAVARADAN
A.D.N.Rao, A.N.JAYARAM, ARVIND SHARMA, C.V.SUBBA RAO, K.SWAMY, S.SUNDARAVARADAN
Table of Contents
2. Appellants contend that denying notional special pay for pension calculation to retired employees who performed identical duties violates Article 14 of the Constitution. (Para 3 )
3. The court observed that the notional pay was intended to remove anomalies for employees in service after the effective date and was not actually drawn. (Para 3 )
4. Pension must be computed based on the average pay actually drawn by the employee; notional pay not drawn during service cannot be used for pension calculation. (Para 3 )
5. Appeal dismissed. (Para 3 )
6. Can notional pay be included in pension calculations if it was not actually drawn by the employee?
No. Pension is computed based on the average of the pay actually drawn by the employee. If the employee retired before the date the notional pay took effect, they did not actually draw that pay, and it cannot be used to step up the scale for pension computation. (Para 3 )
7. Does the grant of notional pay to current employees to remove pay anomalies create a right for retired employees to claim the same for pension?
No. Notional pay granted to remove anomalies is typically applicable only to those who continued in service after the effective date. Since retired employees did not draw this pay, it does not entitle them to a pension increase. (Para 3 )
8. Does the denial of notional pay for pension purposes to retired employees constitute discrimination under Article 14 if they performed the same duties as current employees?
No, provided the benefit was notional and intended for those in service to remove anomalies. Since the retired employees never actually drew the pay, there is no unjustified discrimination. (Para 3 )
( 1 ) THE appellants, nine in number, admittedly had retired prior to 1/09/1985 as either head clerks or chief clerks, the last being 30/06/1985. It appears that a practice was vogue at one point of time that for the discharge of special duties, a sum of Rs. 35. 00 p. m. as special pay was granted to the upper division clerks working in certain special posts. Decision was taken that on promotion as head clerk or special clerk, they would not be entitled to carry with them the special pay of Rs. 35. 00 per month. Admittedly, the appellants had been promoted, as stated earlier, as head clerks or chief clerks and they were not given the special pay of Rs. 35. 00 per month from the date of their promotion as head clerk or special clerk, they would not be entitled to carry with them the special pay of Rs. 35. 00 per month from the date of their promotion till the date of their retirement prior to 1/09/1985. It is also clear that in the memo dated 11/07/1979, it was expressly stated that the special pay would not be paid to the promoted head clerks or chief clerks. subsequently, it appears that there was an agitation and a reference to the Board of Arbitration was made which had decided that with a view to remove the anomaly in the pay structure, the special promoted head clerks/special clerks w. e. f. 1/09/1985 but without paying arrears. Challenging the non-availment thereof some of the employees had approached the C A T at Delhi which appears to have held that the persons who had not been paid from 11/07/1979 till 31/08/1985 and thereafter, would be entitled to the special pay of Rs. 35. 00 per month though promoted as head clerks/chief clerks but without arrears of salary. This was also the decision taken by the respondents.
( 2 ) THE question that emerges is whether the head clerks/chief clerks who retired prior to 1/09/1985 are also entitled to step up their pay by including Rs. 35. 00 per month for the purpose of calculating the pension. the Tribunal in this case held that they are not entitled.
( 3 ) SHRI Sundarvaradan, the learned senior counsel appearing for the appellants, contended that since the appellant had actually worked as head clerks/chief clerks on par with other persons to whom the benefit of the pay of Rs. 35. 00 per month had been granted by the Board of Arbitration and also the CAT, they have been unjustly discriminated violating Article 14 of the Constitution and that, therefore, the tribunal was not right in denying the benefit of stepping up of the scale of pay for computation of pension. Having considered the argument. we find that there is no justification in the stand taken by the appellants. Admittedly, they have retired prior to 1/09/1985. The benefit that was given by Board as well as the order of the Tribunal and the respondent was to remove the anomaly in the pay structure and bring uniformity applying notional scale of pay of those promoted as head clerks/ chief clerks between 11/07/197 9/08/1985 but denied payment of arrears. In other words, no salary with Rs. 35. 00 as special pay was made to any one. that benefit was given only to those who continued in service after 1/09/1985. The notional pay is considered in that perspective only for the purpose of removing the anomaly. The pension is required to be computed on calculation of average of 10 months pay actually drawn by the employee. Since the appellants admittedly were not in Service as on 1/09/1985, the date on which the notional pay was given effect to, they had not actually drawn the pay including Rs. 35. 00 per month. Accordingly, the scale of pay including Rs. 35. 00 per month cannot be stepped up for computing the pension. The appeal is accordingly dismissed but, in the circumstances, without costs. Appeal dismissed.
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