N.N. GODFRED & ORS. versus UNION OF INDIA & ORS. on 11 July 2018

[2018] 9 S.C.R. 281

N.N. GODFRED & ORS.

v.

UNION OF INDIA & ORS.

(Civil Appeal No. 10035 of 2010)

JULY 11, 2018

[S. ABDUL NAZEER AND INDU MALHOTRA, JJ.]

Service Law – Naval Service – Service Pension if includesSubmarine Pay – Appellants enrolled in the Indian Navy as Sailorsand subsequently joined its Submarine Arm – Appellants aggrievedwith the refusal of the respondents to take Submarine Pay intoaccount while calculating pension payable to them – Armed ForcesTribunal (AFT) held that submarine pay/allowance cannot be countedfor the purpose of determining pension – On appeal, held: Conceptof Submarine Pay was introduced by Union of India vide Letterdated May 31, 1967 – It was granted to Officers and Sailors whowere qualified to serve in submarines, and were deputed to go tosea from time to time – In terms thereof, Submarine Pay was to betreated as “pay for all purposes” which would include computationof Service Pension – Further, case of the appellants was governedby the Navy Instruction dated August 17, 1974, which were in forcewhen appellants retired on January 1, 1983, for computing thepensionary benefits and it did not exclude Submarine Pay from thecomputation of “pay” for the purpose of calculating Service Pension– It also mentioned Submarine Pay and Submarine Allowanceseparately – Thus, Submarine Pay and Submarine Allowance arenot used interchangeably, as erroneously done in the impugned Order– Submarine Pay was includible in “pay”, for the purposes ofcomputing the Service Pension of the appellants– Order passed byAFT set aside– Armed Forces Tribunal Act, 2007 – Navy(Pension)Regulations,1964 – Regulations 86 and 84.

Allowing the appeal, the Court

HELD: 1.1 Section I of Chapter III of the Navy (Pension)Regulations, 1964 provides the framework for grant of pensionarybenefits to Sailors in the Indian Navy. Sailors who have servedfor a period of fifteen years i.e. the minimum qualifying service

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Afor pension, or more, are eligible for grant of Service Pension.Service Pension is fixed on the basis of the rank and group heldby a person as per Regulation 84 of the 1964 Regulations.Regulation 86 of the 1964 Regulations provides the rates ofService Pension.[Paras 5-5.2] [286-E-F; 287-A]

B1.2 The concept of Submarine Pay was introduced by theUnion of India vide Letter dated May 31, 1967. It was granted toOfficers and Sailors who were qualified to serve in submarines,and were deputed to go to sea from time to time. Submarine Paywas to be treated as “pay for all purposes”, as per the instructionsissued by the Ministry of Defence to the Chief of Naval Staff videCLetter No. dated May 31, 1967. The pay scale and allowances ofOfficers and Sailors were revised with effect from January 1, 1973pursuant to the Navy Instruction No.2/S/74 dated August 17, 1974.Navy Instruction dated August 17, 1974 was issued to give effectto the recommendations of the Third Pay Commission, andDremained in force till January 1, 1986. [Paras 5.4 and 5.5][288-A-D]

1.3 Clause 4(a) of Navy Instruction No. 2/S/74 defined theterm “basic pay” to denote the pay “actually drawn” in the scaleprescribed for the rank and group. Clause 2 provided that theErevised rates of pay applicable to Sailors were specified inAppendix A. The heads of Submarine Pay and SubmarineAllowance were separately listed in Appendix B at S. Nos. 14and 15, respectively. The terms Submarine Pay and SubmarineAllowance are not used interchangeably, as has been erroneouslydone in the impugned Order. As per Navy Instruction No. 2/S/F74, a Chief Petty Officer was entitled to Submarine Pay at therate of Rs. 300/- per month, which was distinct from SubmarineAllowance. Pursuant to the recommendations of the Fourth PayCommission the rates of pay and allowances of Officers and Sailorswere revised by Special Navy Instruction No.1/S/86 (with effectGfrom January 1, 1986). Further revisions took place pursuant tothe recommendations of the Fifth and Sixth Pay Commissions.The definition of “basic pay” was changed to exclude SubmarinePay. The reliance on these instructions by the Respondents ismisplaced, as the case of the appellants was governed by theinstruction issued pursuant to the Third Pay Commission forH

computing the pensionary benefits i.e. Navy Instruction No. 2/S/74 dated August 17, 1974 and Letter No.PA/4102/NHO/504.S/D(PAY/ SERVICES) dated May 31, 1967 as they retired onJanuary 1, 1983. As per Letter No. PA/4102/NHO/504.S/D(PAY/SERVICES) dated May 31, 1967 Submarine Pay was to be treatedas “pay for all purposes”, which would include computation ofService Pension. [Paras 5.6-5.8 and 5.11] [289-A-E, G-H]

1.4 The Last Pay Drawn Certificate of the appellants showsthat Submarine Pay was actually being drawn as a separate headof “pay”. Navy Instruction No.2/S/74 did not exclude SubmarinePay from the computation of “pay” for the purpose of calculatingService Pension. In contrast, the entries with respect to AviationSailors, note (ii) below Appendix B of Navy Instruction No. 2/S/74 specifically excluded Flying Pay from being treated as “pay”for the computation of pension and gratuity. [Paras 5.9, 5.10][289-E-G]

1.5 Submarine Pay was includible in “pay”, for the purposesof computing the Service Pension of the appellants. [Para 6][290-C]

Anuj Kumar Dey v. Union of India (1997) 1 SCC 366 :

[1996] 9 Suppl. SCR 269 ; BALCO Captive Power PlantMazdoor Sangh and Another v. National Thermal PowerCorporation and Others (2007) 14 SCC 234 : [2007]10 SCR 1084 ; Paradeep Phosphates Limited v. Stateof Orissa & Ors. 2018 (6) SCALE 338 – referred to.

From the Judgment and Order dated 25.02.2010 of the ArmedForces Tribunal, Principal Bench, New Delhi in Transfer ApplicationNo. 492 of 2010.

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ASandeep Sethi, ASG, Vineet Bhagat, R. Balasubramanium, N. K.Karhail, Sachin Sharma, Pranay Ranjan, Mukesh Kumar Maroria, Advs.for the appearing parties.

The Judgment of the Court was delivered by INDU MALHOTRA, J. 1. The present Civil Appeal has beenBfiled under Section 30 of the Armed Forces Tribunal Act, 2007 tochallenge the judgment and order dated February 25, 2010 passed bythe Principal Bench of the Armed Forces Tribunal, New Delhi in TransferApplication No. 492 of 2010.

1.1The three appellants had enrolled in the Indian Navy as Sailors, andCsubsequently joined the Submarine Arm. After being promoted throughthe ranks, all three appellants superannuated from service onJanuary 31, 1983. While Appellant No.1 was holding the rank ofChief Petty Officer (ERA-II), Appellant Nos. 2 and 3 were holdingthe rank of Chief Engine Room Artificer in the Submarine Arm ofDthe Indian Navy at the time of their superannuation.

1.2 Initially, the appellants were not granted pensionary benefits onaccount of the non-inclusion of their four-year training period, whilecomputing their qualifying service. Aggrieved by the same, theappellants filed a Writ Petition before the Delhi High Court whichEwas allowed in terms of the decision of this Court in Anuj KumarDey v. Union of India [(1997) 1 SCC 366].

1.3 Pursuant to the said judgment, the appellants started gettingpensionary benefits. The pension of the appellants was computed onthe basis of the pay of a Chief Petty Officer.

F1.4 On February 8, 2005, Appellant No. 3 made a representation to theBureau of Sailors-Respondent No. 3 for a clarification whetherSubmarine Pay of Rs. 300 per month, which was being granted tothem after joining the Submarine Arm, was included for computingthe pension payable. It was submitted that Submarine Pay was aGcomponent of their “pay”, and not an “allowance”.

1.5 On March 29, 2005 Respondent No. 3 rejected the representationstating that Submariners and Aviation Sailors were categorizedunder the group “Other than A”, which is lower than Group A, andthat the pensionary benefits granted were “in order”.

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1.6 The three appellants being aggrieved by the refusal of therespondents to take into account Submarine Pay whilecalculating pension payable to them filed separate Writ Petition Nos.19145-47 of 2006 before the Delhi High Court.

1.7 During the pendency of the Writ Petitions, the Armed ForcesTribunal Act, 2007 came into force. The Writ Petition Nos. 19145-47 of 2006 were transferred to the Principal Bench, Armed ForcesTribunal, New Delhi and renumbered as Transfer ApplicationNo. 492 of 2010.

1.8 The Armed Forces Tribunal disposed of the Transfer ApplicationNo. 492 of 2010 by a cryptic Order dated February 25, 2010 whereinit was merely mentioned that submarine pay/allowance cannot becounted for the purpose of determining pension.

2. Aggrieved by the impugned order, the appellants preferred thepresent Civil Appeal.

2.1 The appellants have submitted that Submarine Pay would form partof their basic pay, and hence ought to be included forcomputation of Service Pension. This was for the reason thatSailors working in the Submarine Arm of the Indian Navy weregranted Submarine Pay on account of the highly dangerous natureof the work undertaken, and the arduous conditions in which theyhad to function.

2.2 It was further submitted that Submarine Pay was included in theLast Pay Drawn Certificate dated August 10, 1983. In contrast,Sailors who were not working in the Submarine Arm, were not beinggranted this additional pay. The appellants gave the illustration ofone M.V. Kumaran who was not working in the Submarine Arm.He was not being granted Submarine Pay, on account of thedifference in the nature of duties performed.

2.3 The appellants further submitted that since they belonged to thegroup “Other than Group A” they were entitled to higher rates ofpay as specified in Appendix A, Clause 3 of the Navy InstructionsNo. 2/S/74 dated August 17, 1974.

2.4 Reliance was placed on two decisions of this Court in BALCOCaptive Power Plant Mazdoor Sangh and another v. NationalThermal Power Corporation and others [(2007) 14 SCC 234]

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Aand Paradeep Phosphates Limited v. State of Orissa & ors.[Civil Appeal Nos. 3997-3998 of 2018 decided on April 19, 2018 tocontend that conditions of service cannot be altered to the detrimentof employees.

3. Per contra, the case of the Respondents is that the amountBreceived under the head of Submarine Pay is an “allowance”, and hencecannot be included for the purposes of computing Service Pension.

3.1 It was contended the head of Submarine Pay was listed as anallowance under Appendix B of the Navy Instruction No. 2/S/74dated August 17, 1974.

C3.2 It was further submitted that any allowance, including SubmarinePay, were not treated as reckonable emoluments for the purposes ofcomputing Service Pension.

3.3 The respondents submitted that pursuant to the Fifth PayCommission, Special Pays like Flying Pay, Submarine Pay,Technical Pay etc. were re-designated as allowances vide GoI/MoDDLetter 4(1)/2001/D(Pay/Services) dated March 01, 2004.

4. The issue which arises for consideration is whether Submarine Paywas to be included for computing the Service Pension of theappellants, who retired on 31.1.1983 in the rank of Chief PettyOfficer and Chief Engine Room Artificer.EFINDINGS

5. Section I of Chapter III of the Navy (Pension) Regulations, 1964provides the framework for grant of pensionary benefits to Sailors inthe Indian Navy. Sailors who have served for a period of fifteenyears i.e. the minimum qualifying service for pension, or more, areFeligible for grant of Service Pension.

5.1 Service Pension is fixed on the basis of the rank and group held by aperson as per Regulation 84 of the Navy (Pension) Regulations, 1964which has been reproduced hereunder:

“84. Rank and group for assessment of service pension.-GThe service pension shall be assessed on the basis of therank actually held by an individually continuously whetherin a substantive or paid acting capacity and the lowest groupfor which he was paid during the last ten months of hisservice qualifying for pension.”

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N.N. GODFRED & ORS. v. UNION OF INDIA & ORS.[INDU MALHOTRA, J.]

5.2 Regulation 86 of the Navy (Pension) Regulations, 1964 provides therates of Service Pension. The relevant extract of Regulation 86 isreproduced hereunder:

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“86. Rate of service pension.- The following are the ratesof service pension:- B

RATES OF SERVICE PENSION-SAILORS

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5.3 A perusal of Regulation 86, and the rates of Service Pension revealsthat Chief Petty Officers and Artificer Class III belonging to thegroup “Other than Group A”, which has higher rates of ServicePension as compared to those in “Group A”.

A5.4 The concept of Submarine Pay was introduced by the Union ofIndia vide Letter No. PA/4102/NHO/504.S/D (PAY/SERVICES)dated May 31, 1967. It was granted to Officers and Sailors whowere qualified to serve in submarines, and were deputed to go to seafrom time to time. Submarine Pay was to be treated as “pay for allpurposes”, as per the instructions issued by the Ministry ofBDefence to the Chief of Naval Staff vide Letter No. PA/4102/NHO/504.S/D(PAY/SERVICES) dated May 31, 1967.

5.5 The pay scale and allowances of Officers and Sailors were revisedwith effect from January 1, 1973 pursuant to the Navy InstructionNo. 2/S/74 dated August 17, 1974.C

Navy Instruction dated August 17, 1974 was issued to give effectto the recommendations of the Third Pay Commission, and remained inforce till January 1, 1986.

5.6 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term “basicDpay” to denote the pay “actually drawn” in the scale prescribed forthe rank and group. Clause 2 provided that the revised rates of payapplicable to Sailors were specified in Appendix A. As per Clause 3,Artificer/Mechanician Sailors of the Submarine Arm were entitledto rates of pay specified under column titled “Group A” in AppendixA.EThe heads of Submarine Pay and Submarine Allowance wereseparately listed in Appendix B at S. Nos. 14 and 15, respectively.

The relevant extract of Appendix B is extracted hereinbelow forready reference:

d.”

As per Navy Instruction No. 2/S/74, a Chief Petty Officer wasentitled to Submarine Pay at the rate of Rs. 300/- per month, which wasdistinct from Submarine Allowance.

5.7 Pursuant to the recommendations of the Fourth Pay Commission therates of pay and allowances of Officers and Sailors were revised bySpecial Navy Instruction No. 1/S/86 (with effect from January 1,1986). Further revisions took place pursuant to therecommendations of the Fifth and Sixth Pay Commissions. Thedefinition of “basic pay” was changed to exclude Submarine Pay.

The reliance on these instructions by the counsel for theRespondents is misplaced, as the case of the appellants was governedby the instruction issued pursuant to the Third Pay Commission forcomputing the pensionary benefits i.e. Navy Instruction No. 2/S/74 datedAugust 17, 1974 and Letter No. PA/4102/NHO/504.S/D(PAY/SERVICES) dated May 31, 1967 as they retired on January 1, 1983.

5.8 As per Letter No. PA/4102/NHO/504.S/D(PAY/SERVICES) datedMay 31, 1967 Submarine Pay was to be treated as “pay for allpurposes”, which would include computation of Service Pension.

5.9 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term “basicpay” to denote the pay actually drawn in the scale prescribed for therank and group. The Last Pay Drawn Certificate of the appellantsshows that Submarine Pay was actually being drawn as a separatehead of “pay”.

Navy Instruction No. 2/S/74 did not exclude Submarine Pay fromthe computation of “pay” for the purpose of calculating ServicePension.

5.10 In contrast, it would be instructive to refer to the entries withrespect to Aviation Sailors. Note (ii) below Appendix B of NavyInstruction No. 2/S/74 specifically excluded Flying Pay from beingtreated as “pay” for the computation of pension and gratuity.

5.11Appendix B of Navy Instruction No. 2/S/74 specificallymentions both Submarine Pay and Submarine Allowance separatelyat S. Nos. 14 and 15, respectively. The terms Submarine Pay andSubmarine Allowance are not used interchangeably, as has beenerroneously done in the impugned Order.

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A5.12 The submission of the respondents that Submarine Pay wasexcluded from the ambit of basic pay as per Special NavyInstruction No. 1/S/86, Special Navy Instruction No. 1/S/9W andSpecial Navy Instruction No. 1/S/08 cannot be accepted, since thesenotifications came into force subsequent to the date ofsuperannuation of the appellants. These would therefore have noBapplication to the cases of the present appellants, which weregoverned by the Navy Instruction No. 2/S/74 dated August 17, 1974issued pursuant to the recommendations of the Third PayCommission.

6. In view of the aforesaid facts and legal position, Submarine Pay wasCincludible in “pay”, for the purposes of computing the Service Pen-sion of the appellants.

As a result, the Civil Appeal is allowed, and the judgment andorder dated February 25, 2010 passed by the Principal Bench, ArmedForces Tribunal, New Delhi in Transfer Application No. 492 of 2010, isDhereby set aside, with no order as to costs.

Divya Pandey

Appeal allowed.

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