Judgment :-

Jagdish Singh Khehar, J.

1. The Government of Tamil Nadu has been issuing executive order from time to time to determine the composition of allowances to be added to pay for quantifying wages for calculating pension. It is the case of the appellants, that the State Government followed a consistent practice of treating ‘dearness allowance’ as ‘dearness pay’ for the computation of pension and other retiral benefits. Illustratively, we are informed, that by a Government Order dated 11.3.1970 the State Government included ‘dearness allowance’ at the rate then prevalent, as a component of wages for calculating average emoluments for determining pension, for those who retired on or after 26.2.1970. The instant Government Order dated 11.3.1970 was applicable to employees who retired between 26.2.1970 and 1.10.1970.

2. One R. Narasimachar who had retired on 21.11.1969 was not extended the benefit of ‘dearness allowance’ drawn by him at the time of his retirement, while computing his pension. This denial was because the Government order dated 11.3.1970, extended the benefit referred to above only to such employees who had/would retire on or after 26.2.1970. Dissatisfied with the aforesaid denial, he filed Writ Petition no.1815 of 1986 contending, that his pension should have been calculated by taking into consideration ‘dearness allowance’ which was being drawn by him at the time of his retirement, as ‘dearness pay’. A learned Single Judge of the High Court of Judicature at Madras (hereinafter referred to as, the High Court) allowed the aforesaid writ petition on 15.3.1990 by holding, that the State Government was not right in restricting the applicability of the Government Order dated 11.3.1970 only to employees who retired between 26.2.1970 and 1.10.1970. The learned Single Judge directed, that ‘dearness allowance’ which the appellant was drawing, at the time of his retirement, be treated as ‘dearness pay’ for calculating his pension. On 26.2.1991, the writ appeal filed by the State Government against the order dated 15.3.1990 (passed by the learned Single Judge allowing Writ Petition no.1815 of 1986), was dismissed.

3. Based on the aforesaid judgment dated 15.3.1990, which the State Government accepted, a clarificatory Government Order dated 4.12.1991, was issued. Under the Government Order dated 4.12.1991, even for employees who had retired prior to 1.12.1966, ‘dearness allowance’ actually drawn by them, at the time of their retirement,would be taken as ‘dearness pay’ for purposes of calculating pension. For employees retiring between 1.12.1966 and 25.2.1970, ‘dearness allowance’ upto the level obtaining in December, 1966 would be taken into consideration as ‘dearness pay’ for determining pension (and gratuity). It is therefore submitted, that ‘dearness allowance’ became a component of pension, for all employees who had retired upto 25.2.1970.

4. In order to place the sequence of facts in the correct perspective, it was further brought to our notice that the Government order dated 11.3.1970 was clarified by a subsequent letter dated 4.12.1991. As per the aforesaid order and letter, Government servants retiring from service on or after 26.2.1970, and upto 1.10.1970, ‘dearness allowance’ up to the level obtaining in December, 1966, was to be reckoned as ‘dearness pay’ for purposes of pension (and gratuity). Thereupon, through a subsequent Government order dated 4.12.1991, directions were issued for extending the benefit contemplated by the Government order dated 11.3.1970 and the Government’s letter dated 4.2.1991, even to those who had retired prior to 26.2.1970.

5. A Government order dated 4.12.1991 was then brought to our notice. It provided, that notional revised pension payable from 1.6.1988 would be encashable only with effect from 1.12.1991. It also provided, that those Government servants who had retired prior to 26.2.1970 but had died before 1.12.1991, would be ineligible for the benefits contemplated for retirees prio