1

REPORTABLE

        IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

    Civil Appeal No(s).                 of  2019  Diary No 6278 of 2019

Ex-Hav Ashok Kumar               Appellant(s)

                               Versus

Union of India & Ors              Respondent(s)

JUDGDMENT

Dr Dhananajaya Y Chandrachud, J

Delay condoned.

The appellant was a Havildar in the Indian Army.  He completed his original

tenure of twenty four years of service on 27 December 2010.  He was granted an

extension of service for two years until 26 December 2012.   This extension was

granted to the appellant in accordance with the procedure set out in a policy letter

of the Army Headquarters dated 21 September 1998 which is titled:

“PROCEDURE  AND  CRITERIA  FOR  SCREENING  OF PERSONNEL BELOW OFFICER RANK (PBOR)”

2

During the course of his extended tenure, the appellant suffered a stroke and was

re-categorised into the category described as SHAPE-3 (Permanent) with an 80%

disability.  The Release Medical Board found that the disability was not attributable

to or aggravated by military service. The appellant was discharged from service.    

Seeking the grant of disability pension, the appellant moved1 the Armed

Forces Tribunal at its Principal Bench2.  On 2 July 2014, the AFT allowed the O A

by holding that the appellant was entitled to disability pension.  However,  the

claim of rounding off of the disability pension was kept open on the hypothesis

that the issue was pending decision before this Court.

The appellant filed a Review Application before the AFT which was allowed

on 30 October 2014. The AFT held that as a matter of fact, it was mistaken in its

finding that the issue of rounding off was pending before this Court.   Hence, the

AFT held that the appellant was entitled to the benefit of rounding off from 80% to

100%.   

The appellant moved the AFT in 2016 seeking the payment of ex-gratia

compensation of  Rs 9,00,000 based on a policy circular  dated 26 December

2011.  The AFT rejected the claim on the following counts:

(i) Such a claim should have been made before the AFT in the earlier round of

proceedings  and not  having  been addressed  either  in  the  OA or  in  the

review, such a relief was barred by Order II  Rule 2 of the Code of Civil

Procedure, 19083;   

(ii) The claim was barred by limitation since the appellant was discharged from

service in 2012 and it was only in 2016 that the AFT was moved for such

relief; and

1 O A No 321 of 2013 2 “AFT” 3 “CPC”

3

(iii) On merits,  the essential  requirement for claiming ex-gratia compensation

was that the applicant should have been invalidated from service on the

ground of disability.  In the present case, the appellant, upon completing

twenty four years of service, was granted an extension of two years and it

was  during  the  extended  period  that  he  was  discharged  upon  being

downgraded to a low medical category.

The AFT relied on the note appended to Rule 2 of the Pension Regulations for the

Army and came to the conclusion that  for  the purpose of  disability  pension,  a

person who is discharged from service during the extended tenure is deemed to

have been invalidated for the purpose only of the Entitlement Rules laid down in

Appendix 2 to the Regulations.  Aggrieved by the decision of the AFT, this appeal

has been filed.

Mr  V  S  Tomar,  learned  counsel  appearing  on  behalf  of  the  appellant

submitted that in Union of India vs Ram Avtar4 a three judge Bench of this Court

concluded on the issue as to whether an individual who has retired on attaining the

age of superannuation or on completion of the tenure of engagement is entitled to

the benefit of rounding off of disability pension upon being found to suffer from a

disability  which  is  attributable  to  or  aggravated  by  military  service.  The  Union

Ministry of Defence contended that this benefit of rounding off is available only to

Armed Forces personnel who are invalidated out of service and not to any other

category. This submission was rejected while dismissing the appeal filed by the

Union of India against the decision of the AFT. Hence, it was urged that in the

present case, for all intents and purposes, the appellant, who was on an extended

tenure  of  service,  was  prematurely  discontinued  and  it  must  be  treated  an

4 Civil Appeal No 418 of 2012 decided on 10 December 2014

4

invalidation out of service. On this basis, it was submitted that the appellant would

be  entitled  to  ex-gratia  compensation  in  terms  of  the  policy  circular  dated  26

December 2011.

Opposing the submissions which were urged on behalf of the appellant,

Mr. K.M. Nataraj, learned Additional Solicitor General submitted that in essence,

the  argument  of  the  appellant  is  that  every  person  who  is  granted  disability

pension must necessarily get an ex-gratia payment.  This, it was urged, is neither

the intent nor the purpose of the Policy Circular.  According to the submission, the

grant of ex-gratia compensation to Army personnel who die in the course of duties

while  in  service  as  stipulated  in  the  original  policy  dated  4  June  2010  was

subsequently extended on 26 December 2011. The essential requirement of the

Policy dated 26 December 2011 is that it applies to defence service personnel who

are disabled or incapacitated in the performance of their official duties and are

boarded  out  of  service  on  account  of  disability/war  injury  attributable  to  or

aggravated by military service.  It was urged that this condition is not fulfilled in the

case  of  the  appellant.  The  appellant,  it  was  urged,  was  granted  an  extended

tenure of two years of service in terms of the Army Headquarters’ Policy Instruction

dated 21 September 1998 under which retention during the extended tenure is

subject to certain conditions.  One of those conditions is that a person who is

placed  in  the  permanent  low  medical  category  (except  those  who  are  battle

casualties or wounded in action), would be discharged under the existing Rules.

Hence, it was submitted that as the appellant was discharged in accordance with

the conditions subject to which he was granted an extended tenure, he would not

be entitled to the benefit of ex-gratia compensation. It has been urged that if the

policy circular were to indicate that  every person who is entitled to a disability

5

pension would also be entitled to ex-gratia, a specific provision to that effect would

have been made.    

Though the AFT has rejected the claim of the appellant on the ground that

the claim for ex-gratia compensation was not made in the earlier  round and is

therefore, barred by both Order II Rule 2 of the CPC and by limitation, we propose

to decide the issues in this appeal on merits.  Hence, we have not gone into these

technicalities.  We  addressed  ourselves  to  the  merits  of  the  claim  since  in  all

fairness that is the basis on which the claim has been opposed by the learned

Additional Solicitor General.

At the outset, it  would be necessary to appreciate the circumstances in

which the appellant was granted disability pension under the Pension Regulations

for the Army,  1961. Regulations 173 and 173-A have a bearing on the matter.

They provide as follows:

  “Primary conditions for the grant of disability pension

173. Unless  otherwise  specifically  provided  a disability  pension  consisting  of  service  element  and disability element may be granted to an individual who is invalided out of service on account of a disability which is attributable  to  or  aggravated  by  military  service  in  non- battle casualty and is assessed at 20 per cent or over.

The question whether a disability is attributable to or aggravated by military service shall  be determined under the rule in Appendix II.

Individuals  discharged  on  account  of  their  being permanently in low medical category. 173-A. Individuals who are placed in a lower medical category  (other  than  'E')  permanently  and  who  are discharged  because  no  alternative  employment  in  their own trade/category suitable to their low medical category could  be  provided  or  who  are  unwilling  to  accept  the alternative  employment  or  who  having  retained  in alternative appointment are discharged before completion of  their  engagement,  shall  be  deemed  to  have  been invalided from service for  the purpose of the entitlement rules laid down in Appendix II to these Regulations.

6

Note.  The above provision shall also apply to individuals who are placed in a low medical category while on extended service and are discharged on that account before  the  completion  of  the  period  of  their extension.”

Regulation 173 provides for the grant of disability pension to a person who

is invalidated out of service on account of a disability which is attributable to or

aggravated  by  military  service  in  a  non-battle  casualty  where  the  disability  is

assessed at  20  per  cent  or  more.  Regulation  173-A extends the  provision  for

disability pension by a deeming fiction under which a person who is placed in a

low medical category while on extended service and is consequently discharged

will also stand covered by the grant of disability pension.  A person, who is placed

in  a  low  medical  category  and  is  discharged,  is  also  deemed  to  have  been

invalidated out of  service for  the purpose of the entitlement  rules laid down in

Appendix 2 to the Regulations. The deeming fiction is confined to the grant of a

benefit to the extent specified in Regulation 173-A.

That leads us to determine the basic issue of whether the appellant fulfilled

the  requirement  for  the  grant  of  ex-gratia  compensation.  Initially  by  a  policy

decision of the Government of India in the Ministry of Defence dated 4 June 2010,

ex-gratia compensation was provided to the next of kin in cases of death. This was

extended on 26 December 2011 to personnel who are disabled or incapacitated

on account of causes attributable to or aggravated by military service. However,

para  3  of  the  Policy  Circular  dated  26  December  2011 contains  the  following

stipulations:

“3. The President is pleased to decide that such Defence Service personnel, who are disabled, incapacitated in the performance, of their bonafide official duties under various circumstances and are boarded  out  from  service  on  account  of  disability/war  injury attributable to or aggravated by military service, shall be paid Ex- gratia lump sum compensation amounting to Rs.9 lakhs for 100%

7

disability.  For disability/war injury less than 100% but not less than  20%,  the  amount  of  Ex-gratia  compensation  shall  be proportionately  reduced.  No  Ex-gratia  compensation  shall  be payable for disability/war injury less than 20%. The proportionate compensation would be based on actual Percentage of disability as  certified  by  the  invaliding  Medical  Board,  without  applying -board  banding  provisions  as  contained  in  Para  7.2  of  this Ministry's above mentioned letter dated 31.01.2001.”

In order to be entitled to the grant of ex-gratia compensation, it is necessary that

the applicant must fulfill the following conditions:

(i) The  applicant  should  have  been  disabled  or  incapacitated  in  the

performance bona fide official duties; and

(ii) The  applicant  should  have  been  boarded  out  of  service  on  account  of

disability/war injury attributable to or aggravated by military service.

If the intent of the Policy was to grant an ex-gratia compensation to every person

who is granted a disability pension, it would have provided so.

On 21 September 1998, the Army Headquarters provided the procedure

and criteria  for  screening  of  personnel  below the  officer  rank  for  extension  in

service.  All PBOR5 are to be screened for extension of two years by the Screening

Board.   Para 5 of the letter provides:

“5. Retention of a PBOR during extended tenure. The retention of a PBOR during the extended tenure will be governed by the considerations as per Annexure 'B' to this letter.”

Annexure  B  to  the  Policy  Instruction  contains  specific  provisions  in  regard  to

retention during the extended tenure and includes the following stipulations:

“1. Retention of PBOR during the extended tenure will be governed by the followings consideration:-

(i) Medical Standard The individual must continue to remain medical category 'AYE' PBOR who are  temporary  low  medical  category  at  the time of Screening Board as well as during the

5 “Persons below officer’s Rank

8

currency of extension of service will continue to be in service.  If this temporary low medical category is made into permanent low medical category is made into permanent low medical category  except  those  who  are  battle causalities  wounded  in  action  and consequently  placed  in  LMC  (pt)  during enhanced  service,  the  individual  will  be discharged under the existing rules.”

This indicates that a person who is placed in a permanent low medical

category,  except  a  battle  casualty  or  a  person  wounded  in  action,  and

consequently placed in a permanent low medical category during the extended

service  will  be  discharged  under  the  existing  rules.   Such  a  person  who  is

discharged undoubtedly would be entitled to the benefit of the disability pension by

virtue  of  the  deeming  fiction  in  Regulation  173-A of  the  Pension  Regulations.

However,  it  does  not  ipso  facto  entitle  the  individual  to  the  grant  of  ex-gratia

compensation. The case for ex-gratia compensation has to fall within the purview

of the governing conditions which are contained in the policy circular dated 26

December 2011.    

The appellant evidently did not meet that requirement of the policy circular

since  he  was  not  boarded  out  of  service  on  account  of  disability/war  injury

attributable  to  or  aggravated  by  military  service.  He  was  entitled  to  disability

pension  in  view of  the  provisions  contained  in  Regulation  173-A.  Significantly,

under Regulation 173-A, he is deemed to have been invalidated from service for

the purpose of the entitlement rules laid down in Appendix 2 to the Regulations.

The fiction under Regulation 173-A cannot be extended to the policy document

dated 26 December 2011.   

Consequently, we are of the view, for the reasons we have indicated, that

the claim for ex-gratia compensation could not have been entertained.

9

The appeal is accordingly dismissed.

Pending application(s), if any, shall stand disposed of.

…..…………................................J.           (Dr. Dhananjaya Y. Chandrachud)

.…………………………...............J.             (Indira Banerjee)

New Delhi July 24, 2019

10

ITEM NO.5               COURT NO.11               SECTION XVII

              S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS

CIVIL APPEAL Diary No(s). 6278/2019

(Arising out of impugned final judgment and order dated  12-10-2018 in OA No. 1232/2016 passed by the Armed Forces Tribunal)

EX HAV ASHOK KUMAR                 Appellant(s)

                               VERSUS

UNION OF INDIA & ORS.                              Respondent(s)

(IA No. 35247/2019 - CONDONATION OF DELAY IN FILING)   Date : 24-07-2019 This matter was called on for hearing today.

CORAM :           HON'BLE DR. JUSTICE D.Y. CHANDRACHUD          HON'BLE MS. JUSTICE INDIRA BANERJEE

For Petitioner(s) Mr. V.S. Tomar, Adv.                     Mr. Ambreesh Kumar Aggarwal, AOR                     For Respondent(s) Mr. K.M. Nataraj, ASG

Mr. Amit Verma, Adv. Mr. Shailesh Madiyal, Adv. Mr. Debashis R., Adv. Mr. Sharath Narayan Nambiar, Adv. Mr. Amit Verma, Adv. Mr. Sudhanshu Prakash, Adv. Mr. Vinayak Sharma, Adv.

                   Mr. Arvind Kumar Sharma, AOR                    

         UPON hearing the counsel the Court made the following                              O R D E R

Delay condoned.

The  appeal  is  dismissed  in  terms  of  the  signed  reportable

judgment.

Pending application(s), if any, shall stand disposed of.

(MANISH SETHI)                                  (SAROJ KUMARI GAUR) COURT MASTER (SH)                                  BRANCH OFFICER

(Signed reportable judgment is placed on the file)