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The Constitution Of India 1949
Article 309 in The Constitution Of India 1949
Section 71 in The Army Act, 1950
Article 148 in The Constitution Of India 1949
Workmen Employed By Indian Oxygen ... vs Indian Oxygen Ltd on 2 May, 1985

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Delhi High Court
National Ex-Servicemen ... vs Union Of India And Anr. on 23 February, 1993
Equivalent citations: 1993 (26) DRJ 2
Author: D Wadhwa
Bench: D Wadhwa, P Nag

JUDGMENT D.P. Wadhwa, J.

(1) The petitioner, as the name would suggest, is a confederation of associations of ex-servicemen. The associations in turn have various ex-servicemen as their members. The challenge in the writ petition is that a mandamus be issued directing respondents not to deduct lte dearness relief on military pension payable to members of the petitioner. Consequent to this it has also been prayed that the amount of dearness relief already deducted on the military, pension of the ex-servicemen be refunded to them. This deduction has been made by the respondents on account of the ex-servicemen having been re-employed in Central or State Governments or other Government undertakings. The respondents are Union of India through the Secretary, Ministry of Defense and the Controller of Defense Accounts, New Delhi.

(2) When we issued notice on this petition to show cause as to why rule nisi be not issued we also at the same time restrained the respondents from deducting dearness relief from the pension of the petitioners. Numerous writ petitions on similar point are pending in this Court and this judgment would cover all those petitions.

(3) Petitioners have contended that dearness relief is an integral part of the pension which is granted to them to take care of the erosion in the value of money from time to time and in fact it is a pension or part of the pension, and that withholding this dearness relief from the pension amount amounts to deduction or withholding the pension itself which is impermissible. They further .contend that there is no legislation enabling the respondents to withhold or deduct any part of the pension, though it may be termed as dearness relief, upon re-employment of ex-servicemen in the Central Government or other public sector undertakings, and that it is only by an executive order that a deduction or cut in the pension is being made. They also contend that pension is a property under Article 300A of the Constitution and the ex-servicemen could not be deprived of the same save by authority of law. They also contend that this deduction or cut in their pension is also arbitrary, discriminatory and unconstitutional violating their fundamental rights as no such deduction is ordered when an ex-serviceman gets re-employment in a private firm, or establishes his own industry, or has his own business.

(4) The respondents have denied the stand taken by the petitioners. An affidavit in opposition has been filed by Mr. M.M, Ahmed,Depuly Controller of Defense Accounts in the office of the Chief Controller of Defense Accounts (Pension), Allahabad. He has denied that dearness relief is a part of pension. He says relief on pension has been granted for meeting the .increased cost of living and is akin to dearness allowance which is paid with pay. He says dearness allowance which is payable with pay has never been treated as a part of pay and on the same analogy dearness relief admissible on pension cannot be treated as part of pension. According to respondents the pension and dearness relief are two separate elements, and that relief is not payable to re-employed pensioners and in this connection reference has been made to an order issued by the Union of India in the Ministry of Finance (O.M.No. F. 13( 1)/EV(A)/74) dated 6 April 1974 as amended. It is further contended by the respondents that military pensioners are required to intimate the fact of their it-employment to the pension disbursing agency and the employers who reemploy the ex-servicemen are also required to report the fact of their re-employment to the respondents and to the pension disbursing agency as well. It is said this position has been subsequently clarified in two office memoranda of 1975 and 1976. Earlier the amount of dearness relief payable to ex-servicemen on their re-employment was deducted by their new employers but then by another Government Order the pension disbursing agencies themselves started deducting dearness relief on their being intimated of the re-employment of those ex-servicemen. Respondents also contend that so long as ex-servicemen remain re-employed as aforesaid the dearness relief stands suspended. It is only the dearness relief which is suspended and not the pension payable to the ex-servicemen on their re-employment. Respondents deny that there is any discrimination on that account between the ex-servicemen employed by the Government or Government agencies and those re-employed in the private sector. Another memorandum was issued by the Ministry of Finance in the Central Government in 1990 whereby a pensioner was required to intimate the fact of his taking up or having taken up re-employment to the pension disbursing authority immediately on his doing so and the pensioners were also required to submit to the pension disbursing authority every year regarding his re-employment for the purpose of regulating the payment of dearness relief. Then the Government by notification dated 22 January 1991 inserted Rule 55-A in the Central Civil Services (Pension) Rule? framed under proviso to Article 309 of the Constitution. This Rule 55-A is as under:- "55-ADEARNESS Relief On PENSION/FAMILY Pension (i)Relief against price rise may be granted to the pensioners and family pensioners in the form of dearness relief at such rates and subject to such conditions as the Central Government may specify from time to time. (ii)If a pensioner is re-employed under the Central or State Government or a Corporation/Company/Body/Bank under them in India or abroad including permanant absorption in such Corporation/ Company/Body/Bank, he shall not be eligible to draw dearness relief on pension/family pension during the period of such re-employment. (iii)The Central Government employees who get permanently absorbed in terms of Rule 37 and opt for lump sum payment in lieu of pro rata monthly pension in terms of Rule 37, shall not be eligible for dearness relief. "

(5) Then the respondents have brought on record circular letter No. 1(4)/87-D (Pension) (Services) dated 12 May 1987 issued by the Ministry of Defense in the Government in regard to rationalisation of pension structure for pre 1986 armed forces pensioners, implementation of Government of India's decisions on the recommendations of the Fourth Central Pay Commission.

(6) The question is how Rule:55-A would apply to the case of ex-serviceman. The C.C.S. (Pension) Rules, as Rule 2 would show, apply to Government servants including civilian Government servants in the Defense Services. These rules will not, therefore, apply to ex-servicemen belonging to the Armed Forces of the country am) who are governed by Pension Regulations for the Army, 1961.

(7) Reference may also be made to definitions of "defense services", "gratuity", "pension" and "retirement benefits" as contained in clauses (d), (j), (o) and (r) of Rule 3 of Ccs (Pension) Rules. Rule 5 prescribes, that any claim to pension or family pension shall be regulated by the provisions of these Rules in force at the time when the Government servant retires. Rule 19 refers to counting of military service rendered before civil employment. This rule talks of military service and military pension, thus making a clear distinction between the military pension and the pension payable to acivilian. If Rule 55- for is inapplicable to ex-servicemen and there being no amendment to Pension Regulations for the Army inline of Rule 55-A it would be a moot question if dearness relief can be deducted on the authority of Rule 55-A.

(8) In Ex.Capt.N.D.Sharma v.Union of lndia and others, 1987(1) SLR443,a Bench of this Court noticed the Pension Regulations for the Army -Part I(1961). In that case relevant part of the Presidential order terminating the services of the petitioner was as under:- "ANDWHEREAS, having regard to the fact that the .services of Capt. Sharma were terminated, the President considers that his service cannot be treated as satisfactory and as such proposes to impose a cut of 5% in the retiring (service) gratuity and Dcrc, under the provisions of Regulations 3 and 22 ibid."

(9) Reference to Regulations 3 and 12 was to the aforesaid Pension Regulations for the Army. Regulation 22 provides as to when retiring pension and gratuity would be admissible. Regulation 3 had provided that full rate of pension and gratuity as per the regulations was not admissible unless service was satisfactory. The court also referred to section 22 of the Army Act under which any person subject to that Act may be retired, released or discharged from the service by such authority and in such manner as maybe prescribed. The court, however, said that in the case before il, it was not clear as to whether the termination under the pleasure doctrine could be said to be ë release, discharge or retirement. It found that only in case of Retirement Regulations 3 and 12 would perhaps be applicable.

(10) Pension Regulations for Army were also noticed in another Bench decision of this Court in Harbans Singh v. Union of India through the Secretary, Ministry of Defcnce, New Delhi, . Here the question was grant of disability pension under these Regulations to the petitioner.

(11) The aforesaid two judgments that the sare the Pension Regulations for the Army which would be applicable in the present case before us. Though Ccs (Pension) Roles are statutory in nature. Pension Regulations for the Army are based on administrative instructions. They are nevertheless applicable. Since the Army Regulations are based on administrative instructions,these can be varied by administrative instructions as well. All this would, however, show that pension payable to personnel of armed forces and any deductions there from can be authorised under the Army Regulations or other administrative instructions issued by competent authority. Under the Government of India (Allocation of Business) Rules, 1961, made by the President under clause (3) of Article 77 of the Constitution, Department of Pension and Pension Welfare is now under the Ministry of Personnel, Public Grievances and Pension. This department is concerned with the formulation of policy and coordination of matters relating to retirement benefits to Central Government employees (civil, defense and railway pensioners). It is also concerned that pension and relief to pensioners as well as matters relating to amendment to, or relaxation of pension rules or any other rule concerning retirement benefits.

(12) In 'Common Cause' a Registered Society and others v. Union of India, , the Supreme Court observed that "undoubtedly the Defense personnel are a class by themselves." Here again the court examined the grant of benefit of commutation of pension to personnel of armed forced vis-a-vis that granted to civil servants under the Central Civil Services(Commutation ofPension)Rules, 1981,and held that there could not be any disctinction. The court was, thus. of the view that no separate period need be fixed for the armed forces personnel and they should also be entitled to restoration of the commuted portion of the pension on the expiry of 15 years as was conceded in the case of civil pensioners.

(13) The case of Union of India and another v. Wing Commander, R.R. Hingorani (Retd), , deals with the Pensions Act, 1871, and provisions of that Act would perhaps be not applicable for consideration in the present case.

(14) In Jodh Singhv. Union of India and another. . the Supreme Court considered the grant of special family pension sanctioned to the widow of Air Force Officer under Regulation 74 of Pension Regulations for the Air Force. It also observed that a pension was a retirement benefit and it was admissible under the relevant rules on superannuation, and that it was payable on superannuation to the employee himself during his lifetime after retirement.

(15) Section 25 of the Army Act provides that the pay of every person subject to the Act due to him as such under any regulation for the time being in force shall be paid without any deduction other than the deductions authorised by or under this or any other Act. On this analogy it is said that there could be no deduction from the pension payable to a retired army personnel unless the Pension Regulations for the Army so prescribe. As to what could be deductions under the Act. reference could be made to sections 90 and 91 of the Act falling under Chapter Xiii (penal deductions). Army Rule 205 provides for authorised deductions. Under section 71 of the Act falling under Chapter Vii (Punishments), one of the punishments which could be inflicted in respect of offences committed by person subject to the Act and committed by court martial could be forfeiture of service for the purpose of increased pay, pension or any other prescribed purpose. We find, however, that Pension Regulations for Army are not relatable to either section 191 (power to make rules), or section 192 (power to make regulations) in view of section 193 (publication of rules and regulations in official gazette) and section 193A (provision for laying the rules and regulates before the Parliament) of the Army Act. These regulations are in the' nature of administrative instructions which, however, can be enforced.

(16) As to what is the scope and intent of pension, one can refer to the decision of the Supreme Court in D.S.Nakara and others v. Union of lndia, . In this the court said that pension to civil employees of the Government and the defense personnel as administered in India appear to be a compensation for service rendered in the past. Referring to its earlier decision in Deoki Nanden Prasad v. State of Bihar ,the court said that pension was not abounty, a gratuitous payment depending upon the sweet will or grace of the employer not claimable as a right, and the right to pension can be enforced through court. Pension is a right and the payment of which does not depend upon the discretion of the Government, but is governed by the rules and a Government servant coming within those rules is entitled to claim pension. Grant of pension does not depend upon anyone's discretion. It is only for the purpose of quantifying the amount having regard to service and other allied matters that it may be necessary for the authority to pass an order to that effect but the right to receive pension flows to the officer not because of any such order but by virtue of the rules. The case of State of Punjab v. Iqbal Singh was referred to. After examining certain view points on pension, the court said as under:- "FROM the discussion three things emerge: (i) that pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to 1972 Rotes which are statutory in character because they are enacted in exercise of powers conferred by the proviso to Article 309 and Clause (5) of Article 148 of the Constitution, (ii) that the pension is not an ex gratia payment but it is a payment for the past service rendered; and (iii) it is a social welfare measure rendering socio-economic justice to those who in the hey day of their life ceaselessly foiled for the employer on an assurance that in their old age they would not be left in lurch. It must also be noticed that the quantum of pension is a certain percentage correlated to the average emoluments drawn during last three years of service rendered to ten months under liberalised pension scheme. Its payment is dependent upon an additional condition of impeccable behavior even subsequent to retirement, that is, since the cessation of the contract of service and that it can be reduced or withdrawn as a disciplinary measure. "

(17) Government of India in the Ministry of Finance, Department of Expenditure, issued Office Memorandum No.M.23013/152/79/MF/CGA(Pt)/1118 dated 20 March 1984, subject being payment of relief on pension to the Central Government Pensioners (including family pensioners) during the period of their employment/re-employment (now statutory Rule 55A has been incorporated in the Ccs (Pension) Rules, as noted above). Under this it was directed that no dearness relief will be paid by the Pension Disbursing Authority to the re-employed pensioner during the period of his re-employment, and after the spell of re-employment ceases, payment of dearness relief will be reviewed by the same authority. This office memorandum was made applicable to the armed forces by a memorandum issued by the Ministry of Defense (No. F.4(3)/84/1872/C/D(Pension/ Services, dated 1 August 1984). On the basis of this the dearness relief is not being paid by the concerned pension disbursing authorities to the petitioner. The Department of Pension and Pensioners' Welfare also issued an Office Memorandum No.. 2/5/87-PIC dated 22 April 1987. This prescribed the dearness relief on pension/family pension and it is mentioned therein that on the recommendation of the Fourth Central Pay Commission the President was pleaded to decide that dearness relief shall be paid to the Central Government pensioners and family pensioners to compensate them for rise in cost of living beyond average Cpi 608 at the rates specified therein. Paras 1.3 and 3.1 of this memorandum are as under:-

"1.34Other provisions governing grant of dearness relief to pensioners such as regulation of dearness relief during employment/re-employment, regulation of dearness relief where more than one pension is drawn, etc.. will remain unchanged. "

"3.1These orders apply to all civil pensioners, Armed Forces pensioners, civilian pensioners paid out of the Defense Services Estimates, All India Service pensioners and Railway pensioners. "

(18) The impugned notifications issued in the form of O.Ms. directing suspension of dearness relief during the period of re-employment in the case of ex-servicemen have been issued by competent authority and are valid.

(19) It is not disputed that dearness allowance granted to an employee while in service is akin to dearness relief granted to a pensioner. Dearness relief does not become part of the salary unless so ordered by the appropriate authority. In Workmen Employed by M/s. Indian Oxygen Limited v. M/s Indian Oxygen Ltd. . a question which has been referred for adjudication under the Industrial Laws was whether the variable dearness allowance payable by the employers to their workmen should be revised. It was not in dispute that the basic wages of all workmen employed all over the country by the Company were occupation-wise uniform but the dearness allowance paid to workmen differed or varied from place to place. The court said this ought to be so. The court said that one could appreciate the implementation of the constitution aspiration of equal pay for equal work. It said in the matter of basic wages it was a consummation devoutly to be wished, but when it came to dearness allowance any attempt at uniformity between workmen in such metropolitan areas like Delhi, Bombay. Madras, Calcutta and in smaller centres would be destructive of the concept of dearness allowance. The court further observed as under:- "DEARNESS allowance is directly related to the erosion of real wages by constant upward spiralling of the prices of basic necessities and as equal to the inflationary input, the fall in purchasing power of the rupee. It is a notorious phenomenon hitherto unquestioned that price rise varies from centre to centre. Dearness allowance is inextricably inter twined with price rise. it being an attempt to compensate loss is real wages on account of price rise considered as a passing phenomenon by compensation. That is why it is called variable dearness allowance. Any uniformity in the matter of dearness allowance may confer a boon on persons employed in smeller centres and those in big metropolitan areas would be hard hit. Dearness allowance by its very form and name has an intimate relation to the prevailing price structure of basic necessities at the centre in which the workman is employed."

(20) A great deal of arguments of the petitioner were based on the Fourth Central Pay Commission Report (Part II) to contend that dearness relief is part of the pension. This part of the Fourth Central Pay Commission Report deals with pension structures for Pensioners both past and future-including death-cum-retirement benefits of Government employees. We have examined this report in detail, but we do not find that the Pay Commission even recommended that dearness relief is or should become, part of the pension. In fact in para 16.6 of the report be Pay Commission has observed that "as the retirement benefits of employees will imp Pvc with the revised scales of pay, we suggest that Government may review the interim question of fixation of pay on re-employment, including the amount of pension by benefits which should be ignored on such re-employment and issue supervised guidelines."

(21) The nature of dearness allowance and dearness relief is same Dearness allowance has never been part of it. It has always been a distinct element of remuneration. The amount of dearness allowance depends entirely on the policy decision of the Government taken from time to time in order to neutralise the rise in cost of living. The Fourth Pay Commission said that "this compensation may continue to be shown as a distinct element of remuneration". We are not here concerned with the rates of dearness allowance granted on the basis of recommendation of the Pay Commission. The Commission,also noted in its report that on certain other occasion the Government had decided to treat part of dearness allowance as dearness pay for certain purposes more particularly to provide relief in the matter of death-com-retirement benefits to retiring employees. The Four Pay Commission also noted that in the Department of Pension and Pensioners Welfare Officer Memorandum No. 42(4)-P&PW/86 dated March 3, 1986, that while granting graded relief to pensioners with reference to index average 608 with effect from 1 January 1986 it had been stipulated that the amount of pension plus graded relief shall not exceed a particular figure as per tables with that memorandum. The Commission also noted that for purpose of admissibility of graded relief the existing pensioners have been dievided into four categories particularly with reference to the date of retirement which, in turn, is based on the dates when the various mergers of dearness allowance with pay took place and that percentage of graded relief is also different for pensioners falling within these four categories. The Commission was of the view that any addition a relief to the existing pensioners should be based on these very tables with which the disbursing authorities were fully conversant. The Commission recommended that both civil and defense pensioners drawing up to Rs. 500.00 per month including family pensioners and persons in receipt of extraordinary pensions may be granted additional relief at rates recommended. The Commission also recommended that the relief now admissible and those recommended should be consolidated with the person in every case and the total amount so arrived at should be deemed as pension in the rationalised structure proposed w.e.f..l January 1986 and that the consolidated amount of pension should be the basis for grant of future relief. All this will clearly show that the additional reliever dearness relief, as one may like to call, was never considered as part of the pension ilself. It has been kept separate from pension but with the avowed purpose of naturalisation though not always wholly.

(22) It was contended by the petitioners that on earlier occasions, as would be seen from the Fourth Pay Commission Report, dearness allowance had been merged with the pay and later on the pension had been calculated on the revised pay. But that does not mean that pension and dearness relief are one and the same thing. We do not think that any question of applicability of Article 300A of the Constitution arises in the present case. This Article says that no person shall be deprived of his property saved by authority of law. Once we hold that dearness relief is not part of the pension, the question of depriving the petitioners of their property in any case does not arise. As a matter of fact, petitioners have not been deprived of the dearness relief as such. but since on their re-employment they are getting dearness allowance, the purpose of which is same as dearness relief, the dearness relief gets suspended during the period of their re-employment. The initial fixation of pay and other benefits on re-employment of ex-servicemen pensioners as also civilian pensioners are governed by the Central Civil Services (Fixation of Pay of Re-employed Pensioners) Orders, 1986. The pensioners who are re-employed ex-servicemen pensioners get dearness allowance on the pay so fixed under these Orders. We may also note that in order to provide further benefits to ex-servicemen various vacancies in civil services have been kept reserved for them to provide necessary facilities for their resettlement, and these are governed by the Ex-servicemen (Re-employment in Central Civil Post) Rules, 1979.

(23) The respondents have given a chart as to how dearness allowance/dearness relief is worked out when an ex-servicemen is re-employed. It must be noted as well that re- employed ex-servicemen pensioners form a distinct class inasmuch as (1) they are reemployed due to various schemes specially laid down for them as they retire much earlier than civil employees and the require a second career; (2) during re-employment they get pay in a post to which they are employed; and (3) they also get dearness allowance in the post in which are re-employed. The chart is as under:-

"(i) Case Of A Pensioner Who Was A NON-COMMISSIONED Officer Getting A Pension Of RS. 375:. When Not RE-EMPLOYED: Pension Rs. 375 Adhoc/dearness relief Rs. 312 Total: Rs. 687 When RE-EMPLOYED: Pension Rs. 375 Pay in the re-employed post Rs.1025 Dearness allowance in the re-employed post Rs. 831 Total: Rs.2231 (ii) Case Of A Pensioner Getting A Pension Of RS. 950 Per MONTH: When Not RE.EMPLOYED: Pension Rs. 950 Adhoc relief @ 83% Rs. 789 Total: Rs.1739 WHEN RE.EMPLOYED: Pension Rs. 950 Pay in the re-employed post Rs.1640 Dearness allowance in the re-employed post @ 83% Rs.1351 Total: Rs.3941 (iii) Case Of A Commissioned Officer Who Is A Pensioner Getting A Pension Of RS. 1,534:- When Not RE-EMPLOYED: Pension Rs. 1534 Adhoc/dearness relief Rs. 1243 Total:Rs. 2777 When RE-EMPLOYED: Pension Rs. 1534 Pay in the re-employed post Rs. 3541 Dearness allowance in the re-employed post Rs. 1877 Total: Rs. 6952 (24) Thus, a re-employed ex-serviceman gets more by way of his emoluments and he cannot enjoy both dearness relief and dearness allowance. That, if permitted, will be highly inequitable as well. It will also be seen that the classification of ex-servicemen who have been getting pensions and dearness relief and are re-employed form a distinct class in themselves. They are not entitled to dearness relief on their pensions. There is an intelligible differentia inasmuch as they are getting dearness allowance in the post to which they are re-employed. The impugned orders withdrawing dearness relief to the ex- servicemen pensioners during their re-employment are administrative orders validly made and are reasonable, just and fair.

(25) The challenge in the writ petitions that those ex-servicemen who are employed in private jobs or do their business are exempt from these administrative orders withholding dearness relief has no basis and on that ground the impugned orders cannot be struck down. Here this arguments in the context of the present case is not worth consideration and so even not argued during the course of hearing Private employment of a retired pensioner or his participating in business cannot be subject of control by the Government. Where the Government instructions apply regarding re-employed pensioners there in all cases public revenue is involved.

(26) These writ petitiones, therefore, fail and are dismissed. We make no order as to costs.

(27) By various interim orders we had directed that dearness relief payable to the ex-servicemen pensioners be not deducted. These orders would stand vacated and the authority shall be entitled to recover the amount of dearness relief so stayed from the future pension payable to the petitioners but only in equal Installments spread over a period of One year from 1 March 1993. Rule is discharged.