IV CPC RANK PAY CASE

LANDMARK DAY FOR DEFENCE OFFICERS

Subject : I.A. NO. 9 IN T.P. (Civil) 56 of 2007 – UOI & Others Versus N.K. Nair & Others.

•        The aforesaid matter along with connected matter came up for hearing before the Hon’ble Supreme Court of India before a Bench of Hon’ble Mr. Justice R.M. Lodha, Mr. Justice T.S. Thakur and Mr. Justice Anil R. Dave before Court No.7, Item No. 9 today i.e. 04.09.2012.

•        This was an application filed by UOI for modification/directions/recall of order dated 08.03.2010 passed by this Hon’ble Court in T.P. (Civil) No. 56 of 2007 and other writ petitions, by which the Hon’ble Supreme Court had agreed with the reasoning of the Kerala High Court in the case of Major Dhanapalan and directed proper fixation of rank pay from 01.01.1986 and interest @ 6% per annum.

•        The core issue in these petitions is with regard to the wrong fixation of rank pay awarded by the Fourth Pay Commission by the Union of India.

•        The background to the core issue is that in the fourth pay commission, the element of rank pay was introduced for all ranks from Captain to Brigadier @ Rs 200 to Rs 1200/- in the Army and their equivalent ranks in the Air Force and Navy, in addition to pay in the integrated scale (Rs 2300-100-3900-150-4200-EB-150-5100). The rationale of this was to make the Armed Forces an attractive career option and to continue the edge that was always provided to the defence officers vis-à-vis their civilian counterparts, owing to the difficult and challenging nature of job profile.

•        However, at the time of fixation, the rank pay was first deducted to arrive at the total emoluments and thereafter added after fixation in the integrated scale. This ensured that the final fixation of the total pay of the officer became at par with his civilian counterpart and the edge was neutralized during fixation.

•        The issue is particularly significant since the services have a longstanding grievance that they get a raw deal from the bureaucrats who have systematically worked on ensuring that the historic edge that the defence officers had with respect to their  civilian counterparts is first neutralized and eventually reversed. Interestingly, in this case also the Armed Forces (Army-Navy and Air Force) and the Chiefs of Staff Committee had recommended not to persue the litigation further, however, the Ministry of Defence chose to press the application for recall on several grounds including a total financial liability of about Rs. 1600 crores.

•        Major A.K. Dhanapalan was the first officer to challenge this erroneous fixation before the Hon’ble Kerala High Court in O.P. No. 2448/1996. The Hon’ble Single Judge, Kerala High Court vide order dated 05.10.1998 found no justification in deducting the rank pay and directed the UOI to re-fix the pay without deducting the rank pay. The Hon’ble Division Bench of the High Court also affirmed finding of the Ld. Single Judge and dismissed the Writ Appeal No. 518/1999 of UOI vide order dated 04.07.2003. The UOI challenged the dismissal before the Hon’ble Supreme Court which was also dismissed vide order dated 12.07.2005 in SLP (Civil) No. CC-5908/2005.

•        Thereafter, several petitions were filed by similarly placed officers before different High Courts and different benches of Armed Forces Tribunal. However, because of the pendency of the aforesaid I.A., the entire issue was in limbo and no benefit had been granted to the deserving officers, apart from the individual case of Major A.K. Dhanapalan.

•        Today, the Hon’ble Supreme Court dismissed the Application of Union of India finding no merits or grounds. While doing so, the Hon’ble Supreme Court has also directed the UOI to re-fix the pay of affected officers from 01.01.1986, without deducting the rank pay.

•        The Hon’ble Supreme Court has also directed the UOI to pay interest @ 6% p.a. from 01.01.2006 to all the officers, whether or not they have filed any petition before any of the High Courts or Benches of Armed Forces Tribunal, within 12 weeks from today. The Hon’ble Court has also directed that all pending petitions before any of the High Courts or Benches of Armed Forces Tribunal, by similarly placed officers will be governed by this order.

•        This order of the Hon’ble Supreme Court will benefit a large number of officers who were in the rank of Captain to Brigadier in the Army and equivalent ranks in the Air Force and Navy, between 01.01.1986 to 01.01.2006.

As per the affidavit filed by UOI in the Hon’ble Supreme Court the implementation of the order of the Court dated 08 Mar 2010 would involve the following:

 (a) Revision of pay of offrs on 1/1/1986, 1/1/1996, and 1/1/2006 with simultaneous revision of all pay linked allowances/benefits.
(b) Calculation of DA on slab basis from 1/1/1986 to 31/12/1995.
(c) Revision of retirement benefits (gratuity, leave encashment) of offrs retiring after 1/1/1986
(d) Revision of pension on 1/1/1986, 1/1/1996, 1/1/2006.
(e) Revision of family pension based on revision of pension of offr.
(f) Payments to be made to legal heirs of deceased offrs.
(g) Interest @ 6 % per annum from 01/01/2006 in each case.

•        The matter was argued by the Ld. Solicitor General for India and his team on behalf of UOI and defended by Mr. Mahabir Singh, Sr. Advocate, Gp Capt Karan Singh Bhati, Advocate-on-record and Ms Aishwarya Bhati, Advocate-on-record on behalf of a large number of individual officers and Retired Defence Officers Association.