SUPREME COURT OF INDIA
Accountant General of Orissa and Another
Vs
R. Ramamurty and Another
Appeal (Civil) 5269 of 2006 (Arising Out of Slp (C) Nos. 21647-648 of 2005)
(Arijit Pasayat and S. H. Kapadia, JJ)
29.11.2006
ARIJIT PASAYAT, J.
Leave granted.
Challenge in these appeals is to a judgment rendered by a Division Bench of the
Andhra Pradesh High Court in Writ Petition No.8532 of 2003. The said writ
petition had been filed by the appellants questioning correctness of the
decision rendered by the Central Administrative Tribunal, Hyderabad Bench (in
short the 'CAT') in O.A.No. 1345 of 2001. The basic issue which arose for
consideration in the writ petition was "what is the mode of calculating of
restoration of pension in respect of employees covered by Rule 37A of CCS
(Pension) Rules, 1972 (in short the 'Rules'). According to the appellants, a
conjoint reading of Rules 37 and 37A as operated upto 31.3.1995 has not been
kept in view. The High Court modified the order of the CAT and held that in a
case where an employee had commuted minimum permissible pension i.e. 1/3 and
even where lesser portion is commuted, the pro rata commuted portion has to be
deducted from the basic pension to arrive at restorable pension, but however,
he will get dearness relief, interim relief etc. on full basic pension.
The High Court arrived at the aforesaid conclusion after considering Rules 37
and 37A.
Challenge in these appeals is on the ground that the High Court was not correct
in calculating the commuted amount of pension to be restorable pension without
taking into consideration the relevant pension rules and the Office Memorandum
No.4/59/97-P&PW(D) dated 14.7.1998, Office Memorandum No.2/1/87-PIC-1 dated
16.4.1987 and Office Memorandum No.45/86/97-P&PW(A) Part II dated
27.10.1997.
According to the appellants, these Memoranda's laid down the tables according
to which the computation has to be arrived at as issued by the Department of
Pension.
Learned counsel for the respondents on the other hand supported the judgment in
question. Rules 37 and 37A read as follows:
"Rule 37: Pension on absorption in or under a corporation, company or
body:-
(1) A Government servant who has been permitted to be absorbed in a service or
post in or under a Corporation or Company wholly or substantially owned or
controlled by the Central Government or a State Government or in or under a
Body controlled or financed by the Central Government or a State Government
shall be deemed to have retired from service from the date of such absorption
and subject to sub-rule (3) he shall be eligible to receive retirement benefits
which he may have elected, or deemed to have elected, and from such date as may
be determined, in accordance with the orders of the Central Government
applicable to him.
EXPLANATION: Date of absorption shall be:
(i) in case of Government employee joins a Corporation or a company or body on
immediate absorption basis the date on which he actually joins that corporation
or company or body;
(ii) in case a Government employee initially joins a corporation or company or
body on foreign service terms by retaining a lien under the Government the date
from which his unqualified resignation is accepted by the Government.
(2) The provisions of sub-rule (1) shall also apply to Central Government
servants who are permitted to be absorbed in joint sector undertakings, wholly
under the joint control of Cenra1 Government and State Governments / Union
Territory Administrations or under the joint control of two or more State
Government/Union Territory Administration.
(3) Where there is a pension scheme in a body controlled or financed by the
Central Government in which a Government servant is absorbed, he shall be
entitled to exercise option either to count the service rendered under the
Central Government in that body for pension or to receive pro rata retirement
benefits for the service rendered under the Central Government in accordance
with the orders issued by the Central Government.
EXPLANATION: Body means autonomous body or statutory body:-
RULE 37-A:- Payment of lump sum, amount to persons on absorption in or under a
Corporation, company or body:
(1) Where a Government servant referred to in Rule 37 elects the alternative of
receiving the retirement gratuity and a lump sum amount in lieu of pension he
shall, in addition to the retirement gratuity be granted:
(a) On an application made in this behalf, a lump sum amount not exceeding the
computed value of one-third of his pension as may be admissible to him in
accordance with the provisions of the Civil Pensions (Commutation) Rules [now
Central Civil Services (Commutation of Pension) Rules, 1981]; and
(b) terminal benefits equal to the commuted value of the balance amount of pension
left after commuting one-third of pension to be worked out with reference to
the commutation tables obtaining on the date from which the commuted value
becomes payable subject to the condition that the Government servant surrenders
his right of drawing two-thirds of his pension."
The respective stand have to be considered in the light of this Court's
decision in P.V. Sundara Rajan v. Union of India . In para 11 it has been
noted as follows:
"The dearness relief on pension has been granted to pensioners to
compensate them for the erosion in the value of money due to rise in the cost
of living. It seems clear that the Government has permitted to the applicants
dearness relief calculated only on one-third part of the pension restored while
in case of other pensioners, the dearness relief is calculated on full pension
including the commuted part of pension. As already noticed, the applicants are
to be treated on the same footing as other Central Government employees insofar
as the question of restoration of one-third of commuted pension is concerned
and are entitled to the benefits as given in Common Cause case . In this
respect, it would also be useful to notice that "pension" as defined
in Central Civil Services (Pension) Rules, 1972 does not include dearness
relief. Rule 3(1)(o) reads as under:
"3(1)(o) 'pension' includes gratuity except when the term pension is used
in contradistinction to gratuity, but does not include dearness relief."
Further, in Paragraphs 12 and 13 it has been observed as follows:
12. We may also reproduce Rule 55-A:
"55-A Dearness 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 permanent
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) Deleted"
13. The government instructions also show that the dearness relief is granted
to compensate the pensioners for erosion in the value of money due to rise in
the cost of living. Anything which is not a part of pension has to be paid in
full insofar as those who have commuted one-third pension."
In view of what has been stated in the said case, more particularly in the
quoted paragraphs, there is no substance in the appeals which we accordingly
dismiss. No costs.