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REPORTABLE   

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.10640-46   OF 2013 (Arising out of SLP(C) Nos. 3358-64 of 2011)

K.C. Bajaj and others                                 …Appellants

versus

Union of India and others                         …Respondents

WITH  

CIVIL APPEAL NOS. 10647-48  OF 2013 (Arising out of SLP(C) Nos. 3367-68 of 2011)

CIVIL APPEAL NO. 10649  OF 2013 (Arising out of SLP(C) Nos. 6596 of 2011)

CIVIL APPEAL NO. 10650  OF 2013 (Arising out of SLP(C) No. 6597 of 2011)

CIVIL APPEAL NOS.10652-56  OF 2013 (Arising out of SLP(C).36318-22/13 CC Nos. 6086-6090 of 2012)

J U D G M E N T

G.S. SINGHVI, J.

1. Leave granted.

2. Whether final result of a case filed by a public servant with regard to his  

service conditions  is  dependent  on the  arbitrary choice of  the  State  and/or  its  

agencies/instrumentalities to prosecute the matter before the higher Courts is one  

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of the questions which would require consideration in these appeals filed against  

order dated 16.10.2010 of the Division Bench of the Delhi High Court whereby  

the writ petitions filed by the appellants questioning the correctness of order dated  

September  12,  2008  passed  by  the  Central  Administrative  Tribunal,  Principal  

Bench (for short, ‘the Tribunal’) were dismissed. The other question which calls  

for  determination is  whether  Non Practising  Allowance (NPA) payable  to  the  

doctors employed in Central Health Services, the Railways and other Departments  

of the Government, who retired from service prior to 1.1.1996 is to be added to  

their basic pay for calculation of pension payable to them.

3. The appellants are the doctors or the legal representatives of the deceased  

doctors, who were employed in the Central Health Services, Government of India  

or the Railways and were paid NPA as part of their monthly pay in lieu of private  

practice, availability of less promotional avenues and late entry in the service.  

Initially, NPA was paid at a fixed rate commensurate with the rank of the doctors  

and  their  pay  scale.  The  same  formula  was  adopted  by  successive  Pay  

Commission. The 5th Pay Commission revised the formula of calculating NPA  

and  it  was  made  25%  of  the  basic  pay  of  a  Government  doctor.   The  

recommendations made by the 5th Pay Commission on this issue are contained in  

para 52.16 of its report, which is reproduced below:

"52.16. Non-practicing allowance Non-practicing  allowance  is  presently  granted  under  a  slab  system with amounts ranging from Rs.  600 per month at the  lowest level to Rs. 1000 at the highest. It has been represented  

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to  us  that  prior  to  the  Third  CPC,  NPA  was  granted  as  a  percentage of basic pay, ranging from 25 to 40% at different  levels,  working out  to  an average of  about  27%, which has,  under the present arrangements dropped to as low as 12.5 to  16%. Doctors are also aggrieved that it does not count forwards  Housing accommodation,  though it  is  countable  for  all  other  purposes, including pension. There are also related demands for  extension  of  NPA  to  other  categories  of  professionals  and  Government  servants  who  have  opportunities  to  earn  in  the  open market, as also the demand for discontinuance of NPA by  permitting private practice. The Third CPC observed that NPA  was granted to doctors in lieu of private practice on account of a  traditionally enjoyed privilege as well as lesser effective service  and promotion prospects caused by late entry into service. It did  not  favor private practice by doctors,  and favored NPA as a  separate element from pay-scales. It suggested a switchover to a  slab system instead of the existing rates with monetary limits.  The Fourth CPC enhanced the rates under the different slabs,  besides  granting  it  uniformly  to  all  medical  officers.  The  administrative  Ministry  has  suggested  that  NPA  should  be  continued  and  also  be  counted  for  purposes  of  housing  accommodation eligibility. In the matter of permitting limited  private practice we have been advised by expert opinion that it  could  be  permitted  in  a  limited  form  provided  malpractices  could be curbed. We also note that it is only doctors who are  required to devote a lifetime to health care and life sustenance  under  oath  as  a  part  of  their  qualifications.  We  do  not  recommend  extension  of  NPA  to  any  other  category.  We  recommended that the slab system of granting NPA to doctors  may be dispensed with and NPA be granted at a uniform rate of  25% of basic pay subject to the condition that pay plus NPA  does  not  exceed  Rs.29,500,  i.e.  less  than  the  maximum  proposed for  the Cabinet  Secretary.  It  will  continue to count  forwards all service and pensionary benefits as at present. No  other  change is  called  for,  as  it  would disturb relatives  with  other services. We are also not in favour of permitting private  practice in any form at this stage."

4. In  paragraphs  137.15,  137.19  and  137.20  of  its  report,  the  5th  Pay  

Commission recommended that pension of pre 01.01.1986 retirees as well as the  

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post 01.01.1986 retirees should not be less than 50% of the minimum pay in the  

revised pay- scales at the time of the retirement.

5. In furtherance of the decision taken by the Government vide Resolution  

dated 30.9.1997 for implementation of the recommendations of 5th Central Pay  

Commission  and  in  continuation  of  the  instructions  contained  in  O.M.  

No.45/86/97-P&PW(A)-Part  II  dated 27.10.1997, the Government issued O.M.  

dated 10.2.1998 for  grant  of  revised pension to  those  who were in  receipt  of  

specified types of pensions as on 1.1.1996 under Liberalised Pension Rules, 1950,  

Central Civil Services (Pension) Rules, 1972, as amended from time to time, and  

the corresponding rules applicable to railway pensioners and pensioners of All  

India  Services.  As per  O.M.  dated 10.2.1998,  pay of  the employees  who had  

retired prior to 1.1.1996 was to be fixed on notional basis at par with the serving  

employees and their pension was to be fixed at par with those who retired after  

1.1.1996.   The  Railway  Board  adopted  the  policy  contained  in  O.M.  dated  

10.2.1998 and issued order dated 10.3.1998.

6.  Vide O.M. dated 7.4.1998,  the Ministry of Personnel (Public Grievances  

and Pension),  Department of  Pension and Pensioners’  Welfare  fixed the NPA  

ratio at 25% of the basic pay subject to the condition that pay plus NPA shall not   

exceed Rs.29,500/- for the doctors belonging to Central Health Services. It was  

also mentioned that  NPA shall  count  as  pay for  all  service benefits  including  

retiral  benefits.  For  the  sake  of  convenient  reference,  O.M.  dated  7.4.1998 is  

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reproduced below:

“Office Memorandum

Dated 07.04.1998 To All Participating Unit of  Central Health Service

Subject: Recommendation of the 5th Central Pay Commission -  Grant of Non Practicing Allowance at revised rates to Central  Health Service Officers.

S/Madam,

In supersession of this Ministry's letter of even number dated  the 20th March, 1998 on the above subject I am directed to say  that the President is pleased to decide that Central Health Ser- vice officers may be paid Non Practicing Allowance @ 25% of  their  Basic  Pay subject  to  the  condition  that  Pay plus  Non  Practicing Allowance, does not exceed Rs. 29,500/-.

2.The Non Practicing Allowance shall count as 'pay' for all ser  -   vice benefits including retirement benefits as hitherto.

3.This issue with the approval of Ministry of Finance (Depart- ment of Expenditure) U.O. No. 7(25)E-III A-97 dated 7.4.1998.

Yours faithfully,  Sd/- (H.N. YADAV)

UNDER  SECRETARY  TO  THE  GOVERNMENT  OF  IN- DIA.”

(emphasis supplied)

7. After  eight  months,  the  Ministry  of  Personnel  (Public  Grievances  and  

Pension) issued O.M. dated 17.12.1998 incorporating the decision taken by the  

President that w.e.f. 1.1.1996, pension of pensioners irrespective of the date of  

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their retirement shall not be less than 50% of the minimum pay in the revised  

scale of pay introduced from 1.1.1996 of the post last held by the pensioner. The  

same reads as under:

"Department  of  Pen.  & PW OM F.No.  45/10/98-P&PW (A)  dated 17.12.1998.

Minimum Pension and Minimum Family Pension to be 50%  and 30% of the minimum pay of the post held at the time of re- tirement/death.

The undersigned is directed to say that in the wake of a large  number of representations received by the Government from the  Pensioners' Associations as well as individuals, the Government  has reconsidered its  decision  on the recommendations of  the  Fifth  Central  Pay  Commission  regarding  revision  of  pension/family  pension  as  contained  in  Paras  137.14  and  134.30 of the report.  The President is now pleased to decide  that with effect from 1.1.1996, pension of all pensioners irre- spective of their date of retirement shall not be less than 50%  of the minimum pay in the revised scale of pay introduced with  effect  from 1.1.1996 of the post last  held by the pensioner.  However, the existing provisions in the rule governing qualify- ing service and minimum pension shall continue to be operat- ive.  Similarly,  with effect  from 1.1.1996 family pension shall  not be less than 30% of the minimum pay in the revised scale  introduced with effect from 1.1.96 of the post last held by the  pensioner/deceased Government servant. Accordingly, so far  as persons governed by CCS (Pension) Rules, 1972 are con- cerned, orders contained in the following Office Memoranda of  this Department as amended from time to time shall be treated  as modified as indicated below. O.M. No. 45/86/97-P & PW  (A)-Pt. I, dated October 27, 1997.

2. The first sentence of paragraph 5 of the Office Memorandum  relating to "Pension" may be substituted by the following :-

"Pension shall continue to be calculated at 50% of the average  emoluments in all cases and shall be, subject to a minimum of  Rs.1,275 per month and a maximum of upto 50% of the highest  pay applicable in the Central Government, which is Rs.30,000  per month since 1st January, 1996, but the full pension in no  

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case shall be les than 50% of the minimum of the revised scale  of pay introduced with effect from 1st January, 1996 for the  post  last  held by the employee  at  the time of  his  retirement  However, such pension will be suitably reduced pro rata where  the pensioner has less than the maximum required service for  full  pension as per the rule (Rule 49 of CC (Pension) Rules,  1972) applicable to the pensioner as on the date of his/her su- perannuation/retirement  and  in  no  case  it  will  be  less  than  Rs.1,275 p.m."

(emphasis supplied)

8. However, in the garb of answering the clarification sought by some of the  

Departments/Ministries, whether NPA admissible as on 1.1.1986 is to be taken  

into consideration after fixation of pay on notional basis and whether the same is  

to be added to the minimum of the revised  scale while stepping up consolidated  

pension, the Ministry of Personnel, Public Grievances and Pensions issued O.M.  

dated 29.10.1999, which reads as under:  

“No. 45/3/99-P&PW(A) Government of India

Ministry of Personnel Public Grievances & Pensions Department of Pension & Pensioners Welfare

New Delhi, Dated  the 29 October, 1999  

Office Memorandum

Subject :  Implementation of Government of India decision on  the recommendations of Vth CPC - Revision of Pension of Pre- 1996 pensioners.    

The undersigned is directed to refer to this Department’s  O.M.  No.  45/10/98-P  &PW(A)  dated  December  17,  1998  wherein  decision  of  the  Government   that  pension  of  all  pensioners irrespective of their date of retirement shall not be  less  than  50%  of  the  minimum  of  revised  scale  of  pay  introduced w.e.f. 1.1.96 of the post last held by the pensioner  

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was  communicated  clarifications  have  been  sought  by  Departments/Ministries  as  to  whether  Non-Practising  Allowance (NPA) admissible as on 1/1/86 is to be taken into  consideration  after  refixation  of  pay  on notional  basis  as  on  1/1/86 and whether NPA is to be added to the minimum of the  revised  scale  while  considering  stepping  up  consolidated  pension on 1/1/96. NPA granted to medical officers does not  form part of the scales of pay. It is a separate element although  it  is  taken  into  account  for  the  purpose  of  computation  of  pension.  This  has  been  examined  in  consultation  with  the  Department of Expenditure and it is clarified  that N.P.A. is not  to be taken into consideration after refixation of pay on notional  basis on 1/1/86. It is also not to be added to the minimum of the  revised scale of pay as on 1.1.1996 in cases where consolidated  pension/family  pension  is  to  be  stepped  up  to  50%  /  30%  respectively,  in  terms  of  O.M.  45/10/98  -P&PW(A)  dated  17.12.98.   

2. This issues with the approval of Department of Expenditure,  Ministry of Finance vide U.O. No. 806/EV/99 dated 29.9.1999.  

3. Hindi version will follow.  Sd/-

(GANGA MURTHY)  Director (PP)”

9. Dr. K.C. Garg and others, who had retired from Railways prior to 1.1.1996,  

challenged O.M. dated 29.10.1999 by filing applications under Section 19 of the  

Administrative Tribunals Act, 1985 (for short, ‘the Act’) and prayed that the same  

may be quashed and the respondents be directed to include the element of NPA  

for the purpose of  computing the pension payable to them. Their  applications  

were dismissed by the Tribunal vide order dated 5.10.2001. That order was set  

aside by the Division Bench of the Delhi High Court in CWP No.7322/2001 – Dr.  

K.C. Garg and others v. Union of India and others and connected matters. The  

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High  Court  relied  upon  OM  dated  7.4.1998  in  which  it  was  categorically  

mentioned  that  NPA  shall  be  treated  as  part  of  service  benefits  including  

retirement benefits and concluded that there was no justification to exclude the  

element of NPA for the purpose of calculating the pension.  Paragraphs 5.0, 5.2  

to 6.0, 10.3, 10.4, 11.1, 11.2, 11.3 and 12 of order dated 18.5.2002 passed by  

the High Court read as under:   

“5.0 History of grant of N.P.A. clearly shows that the same was  being granted in lieu of  private practice.  It  was also granted  having regard  to  availability  of  less  promotional  avenue and  late  entry  in  the  service,  N.P.A.  was  granted  in  terms  of  Fundamental  Rule  9(21)(a)(i)  read  with  Fundamental  Rule  9(21)(a)(ii), which read thus:-

"F.R. 9: Unless there be something repugnant in the subject of  context the terms defined in this Chapter are used in the Rules  in the sense here explained:-

xxx xxx xxx xxx

(21)(a) Pay means the amount drawn monthly by a Government  servant as (i) the pay other than special pay or pay granted in view of the  personal  qualifications  which has  been sanctioned  for  a  post  held by him substantively  or  in  an officiating  capacity  or  to  which he is entitled by reason of his position in a cadre: (ii) overseas pay, special pay and personal pay; and (iii) any other emoluments which may be specially classed as  pay by the President."

xxx xxx xxx xxx

5.2 It  also appears that  the Ministry of  Health and Family  Welfare in terms of the instructions, as contained in the letter  dated 07.04.1998, categorically stated that N.P.A. be treated to  be  a  pay  by  way  of  service  benefits  including  retirement  benefits. It is also beyond any cavil of doubt that 25% of the  basic pay was recommended towards payment of N.P.A. by the  

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5th CPC, which was accepted by the Government of India in  terms of its circular letter dated 07.04.1998.

5.3 By reason of  the aforementioned recommendations,  an  attempt  had been made to  bring pre-01-01-1986 retirees  and  post-01-01-1986 at par having regard to the fact that the rates of  their  pension  were  slightly  different.  By  reason  of  the  said  recommendation,  the  slab  system,  which  was  prevailing  thitherto  having  been  given  a  go  by  and  in  place  thereof  payment of 25% of the basic pay as N.P.A. w.e.f. 01.01.1996  was recommended.  In  other  words,  a  revolutionary  step  was  taken by the 5th CPC by making recommendations so that the  retiral benefits is enhanced not only for pre-01-01-1986 retirees  but also post-01-01-1986 retirees at par.

5.4 In para 137.13 of its Report, the 5th CPC clearly stated  that it was desirable to grant complete parity in pension to all  past pensioners irrespective of the date of their retirement, but  having regard to the fact  that  the same was not  found to be  feasible  and  having  regard  to  the  considerable  financial  implications,  a  suggestion  was  made  that  the  process  of  bridging the gap in the matter of payment of pension would be  fulfillled if certain additional reliefs be granted in addition to  the recommendations of the Fourth Central Pay Commission (in  short,  '4th CPC’)  in  terms whereof  the  past  pensioners  were  granted additional relief in addition to the consolidation of their  pension.

5.5.  Yet  again  in  para  137.14  of  its  Report,  the  5th  CPC  recommended that  as  a follow up of  their  basic  objective of  parity,  the  pension  of  all  pre-01-01-1986  retirees  should  be  updated by notional fixation of their pay as on 01.01.1986 by  adopting the same formula as for the service benefits. Pursuant  whereto, all the past pensioners of pre-01-01-1986 were to be  brought on a common platform so as to grant them the benefit  of the revision of pay scale as recommended by 4th CPC as on  01.01.1986. It  was  further  laid down that  all  pre-01-01-1986  pensioners,  who  had  been  brought  on  to  the  4th  CPC  by  notional  fixation  of  their  pay  and  who  had  retired  after  01.01.1986,  the  recommendation  was  that  the  consolidated  pension would not be less than 50% of the minimum pay of the  post as revised by the 5th CPC.

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6.0 It  is,  therefore,  evident  that  the  5th  CPC  recommendations were to bring all the pensioners whether pre- 01-01-1986 retirees or post-01-01-1986 on a common platform.  The recommendations  in  no uncertain terms suggest  that  the  payment of pension of pre-01-01-1986 retirees and post-01-01- 1986  retirees  should  be  the  same.  The  Central  Government  admittedly  acted  in  terms  of  the  aforementioned  recommendations by determining the pension, which was not  less than 50% of the minimum of their pay in the revised pay- scale of the post held by the pensioners at the time of retirement  w.e.f.  01.01.1986. For the said purpose,  the minimum of the  pay  revised  in  the  5th  CPC  of  the  post  concerned  was  determined were with 25% of the pay as N.P.A. was added and  50% thereof had been taken as revised minimum pension as per  the qualifying service.

10.3 It is difficult for us to accept the contention that despite  the fact that N.P.A. shall form part of pay so far as post-01-01- 1986 retirees are concerned, the same would not form part of  pay despite provisions in the Fundamental Rules so far as pre- 01-01-1986 retirees are concerned. The 5th CPC has taken into  consideration, as noticed hereinbefore, the history of grant of  N.P.A. and wherefrom it is evident that N.P.A. became part of  pay.

10.4 It is not a case where cut-off date has been fixed. The  Central Government is entitled for the purpose of determination  of pension pursuant to the policy decision to fix a cut-off date.  It  is  also  true  that  such  a  cut-off  date  cannot  be  held  to  be  arbitrary  and  irrational,  as  it  was  not  picked  out  of  a  hat.  However, in the instant case,  we are not concerned with any  cut-off  date,  but  we  are  concerned  with  the  question  as  to  whether  despite  recommendations  of  the  5th  CPC,  a  discrimination  can  be  made.  The  very  fact  that  the  Central  Government  accepts  that  the  emoluments  would  mean  basic  pay + N.P.A. in view of its definition as existing in the Rule  9(21)(a)(i)  of  the  Fundamental  Rules,  there  cannot  be  any  reason whatsoever as to why N.P.A. shall be considered to be a  part of pay for post-01-01-1986 retirees and not for pre-01-01- 1986 retirees.

11.1 We may, in this connection, notice that emoluments has  been defined in Rule 33 of CCS (Pension) Rules, 1972 in the  

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following terms:-

"The expression 'emoluments'  means  basic  pay as defined in  Rule 9(21)(a)(i) of the Fundamental Rules which a Government  servant is receiving immediately before his retirement or on the  date  of  his  death  and  will  also  include  Non  Practising  Allowance  granted  to  the  Medical  Officer  in  lieu  of  private  practice." Thus, even in terms of the aforementioned definition, N.P.A.  would be part of pay.

11.2 In D.S. Nakara and Ors. v. Union of India., it is stated:- "42. If it appears to be undisputable, as it does to us that the  pensioners  for  the  purpose  of  pension benefits  form a  class,  would its upward revision permit a homogeneous class to be  divided by arbitrarily fixing an eligibility criteria unrelated to  purpose of revision, and would such classification be founded  on some rational principle? The classification has to be based,  as is well settled,  on some rational principle and the rational  principle must have nexus to the objects sought to be achieved.  We have set out the objects underlying the payment of pension.  If  the  State  considered  it  necessary  to  liberalise  the  pension  scheme,  we  find  no  rational  principle  behind  it  for  granting  these benefits only to those who retired subsequent to that date  simultaneously denying the same to those who retired prior to  that  date.  If  the  liberalization  was  considered  necessary  for  augmenting social security in old age to government servants  then those who retired earlier cannot be worse off than those  who  retired  later.  Therefore,  this  division  which  classified  pensioners  into  two  classes  is  not  based  on  any  rational  principle  and  if  the  rational  principle  is  the  one  of  dividing  pensioners with a view to giving something more to persons  otherwise  equally  placed,  it  would  be  discriminatory.  To  illustrate,  take  two persons,  one  retired  just  a  day prior  and  another a day just succeeding the specified date. Both were in  the same pay bracket, the average emolument was the same and  both had put in equal number of years of service."

11.3 Yet again in V. Kasturi v. Managing Director, State Bank  of India, Bombay and Anr., the Apex Court pointed that in D.S.  Nakara's case (supra)  a distinction has been made between a  new scheme and a  liberalized pension scheme.  When a  new  scheme come into force, the same may not apply to the persons  

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who had retired prior thereto, but when there is a revision in the  existing scheme by way of upward revision, the scheme should  be applied.

12. For the reasons aforementioned, the impugned order cannot be  sustained,  which  is  set  aside  accordingly.  These  writ  petitions  are  al- lowed. However, in the facts and circumstances of the case, there shall  be no orders as to cost.”

10. The aforementioned order of the Delhi High Court was challenged by the  

respondents  by filing special  leave  petitions,  which were converted into Civil  

Appeal  Nos.  1972-1974/2003.   During  the  pendency  of  the  appeals,  other  

similarly situated doctors made representations for grant of benefit in terms of the  

High Court’s order.  Thereupon, the Government of India made a reference to the  

Attorney General and sought his opinion on the question whether judgment of the  

Delhi  High Court  was  correct  and should  be  accepted.  The Attorney General  

considered  the  relevant  rules,  the  Office  Memorandums  and  gave  detailed  

opinion, which reads thus:

“OPINION

Sub:  Regarding  the  inclusion  of  Non  Practising  Allowance  (NPA) to Pensioners Doctors in the calculation of pension.

1.  Doctors  in  the  Central  Government  who  retired  prior  to  01.01.1996  are  aggrieved  by  the  Office  Memorandum  dated  29.10.1999  issued  by  the  Government  of  India,  Ministry  of  Personnel,  Public  Grievances  and  Pension,  Department  of  Pensions  and  Pensioners  Welfare  [hereinafter  referred  to  as  MoPP]  which  inter-alia  provides  that  Non-Practising  Allowance [NPA] is  not  to  be taken into consideration  after  refixation of their pay and as a result NPA is not to be added to  the minimum of the revised scale of pay as on 01.01.1996 in  cases where pension is to be stepped up to 50% in terms of the  earlier O.M. dated 17.12.1998.

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2. As per the Rule 9(21)(a)(i) of the Fundamental Rules, NPA  forms a part of the pay of a government doctor and is taken into  account  for  computing  dearness  allowance,  entitlement  of  IADA for sanctioning advances under GFRs, House Building  Advance  and  other  allowances  as  well  as  for  calculation  of  retrial benefits.

3.  By  an  Office  Memorandum  dated  27.10.1997  issued  by  MoPP, the Government decided to accept the modified parity  formula while implementing the recommendations of the Vth  Pay  Commission  Government  servants  who  retired  before  01.01.1986  [i.e.  before  the  implementation  of  the  IVth  Pay  Commission] and those who retire before  01.01.1996   [i.e.  before   implementation   of the  Vth Pay Commission] were  sought to be brought at par by the notional fixation of pay of the  first category as of 01.01.1986 and thereafter consolidation of  their pension as on 01.01.1996.

4.  A  number  of  representations  were  received  by  the  Government  from Government  servants  who  retired  prior  to  01.01.1996 and they claimed parity with government servants  who retired after 01.01.1996.  By Office Memorandum dated  17.12.1998, issued by MoPP, the Government of India sought  to  achieve  parity  between  pre  01.01.1996  retirees  and  post  01.01.1996 retirees. By the aforesaid O.M., it was provided that  pension/  family pension of  pre  01.01.1996 retirees  would be  stepped upto 50% / 30% of the minimum of the corresponding  revised scale of pay in respect of that post as on 01.01.1996.  Thus, all retired government officers retiring from a particular  post were to be given pension which was comparable to a large  extent.  This  decision  of  the  Government  finds  some support  from the  judgment  of  the  Supreme Court  in  D.S.  Nakara  v.  Union of India, AIR 1983 SC 130.

5. Like all retired government servants, government doctors of  the Central Health Scheme were also given benefit of stepping  up of their pension to 50% of the minimum revised scale of pay  as  on  01.01.1996  by  including  NPA  being  granted  to  the  government  doctors  in  that  scale  of  pay  and  such  stepped  pension was in fact paid to them.

6. However, subsequently on 29.10.1999, as mentioned herein  

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above,  the  MoPP  issued  Office  Memorandum  making  a  technical distinction between pay and scale of pay and provided  that since NPA cannot be given while stepping the pension up  to 50%.

7. The government doctors who retire after 01.01.1996 would  get benefit of NPA as it forms a part of their pay. Hence, just on  the  basis  only  of  date  of  retirement,  there  would  be  wide  disparity  between  pension  of  government  doctors,  i.e.  who  retired prior to 01.01.1996 would get much less pension then  those who retire after 01.01.1996.

8. The distinction between 'pay' and 'scale of pay' made out in  the Office Memorandum dated 29.10.1999 to deny benefit of  NPA for the purpose of stepping up of the pension to 50%, is  purely technical and mechanical distinction and does not take  into account  the  special  position  of  NPA qua a  Government  doctor.

9. NPA is a matter of right of government doctor and is meant  as a compensation  for denial  of private  practice.  The  scale of  pay prescribed...... department of the Government of India and  does not account the special feature of Central Health Service.  In Central Health Service, NPA de jure and de facto is a part of  the  scale  of  pay  as  it  is  inevitably  linked  to  the  basic  pay.  Simply because NPA is not formally included in the scale of  pay of the government doctors and taken as a separate element,  it  cannot  be  said  that  NPA has  to  be  ignored  altogether  for  stepping up of pension. NPA is a separate element only because  scales of pay of government servants are of general application  and not meant for individual services. However, if an element is  inevitably a part of the pay, as NPA is, in effect it has to be  construed as a scale of pay.  

10. Since, NPA for government doctors is a part of their pay, it  would  be  discriminatory  if  retired  government  doctors  are  denied benefit of stepping up of their pension without reference  to the NPA presently given to serving doctors and those who  retire after 01.01.1996. In fact, denial of NPA to pre 01.01.1996  retired government doctors would fall foul of the guarantee of  equality under Article 14 of the Constitution.  

11. The fixation of pension and stepping up of the same to 50%  

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of  the  revised  scale  of  pay  for  pre  01.01.1996  retirees  as  provided  by  the  Government  of  India  in  its  Official  Memorandum dated 17.12.1998 was meant  to  achieve  parity  amongst all retired government servants, including government  doctors.  The  comparison  of  pension  being  paid  to  the  government doctors who retired prior to 01.01.1996 has to be  made with the pension to be paid to government doctors who  retired after 01.01.1996. If the latter category is given benefit of  NPA  for  calculation  of  their  pension,  the  former  category  cannot be denied the same by reference to a general scale of pay  governing  all  government  servants  without  considering  the  special feature of government doctors.

12. The Delhi High Court in its order dated 18.05.2002 in CWP  Nos.  7322,  7826  and  7878  of  2001  has  quashed  the  Office  Memorandum dated  29.10.1999.  In  the  said  order,  the  High  Court has quite rightly observed that the benefit sought to be  given by the earlier OM dated 17.12.1998 was wrongly taken  away  by  the  OM  dated  29.10.1999.  The  High  Court  has  observed  that  in  view  of  the  stated  objectives  of  the  Government to provide parity in pension amongst government  doctors, NPA would have to be necessarily taken into account  for stepping up of pension to 50% of the revised scale of pay  has been held to be ultra vires the Constitution.  

13. The Government of India has filed an SLP against the order  of the Delhi High Court dated 18.05.2002. The reason for grant  of leave in this case is the conflicting decisions of the Delhi  High  Court  and  the  Chennai  Bench  of  the  Central  Administrative Tribunal on one hand and the Principal Bench  of the Central Administrative Tribunal, New Delhi on the other.  I have no hesitation in opining that the judgment of Justice S.B.  Sinha, now a judge of the Supreme Court is correct and should  be accepted in preference to the view of the Principal Bench of  the Central Administrative Tribunal, Delhi. Consequently steps  will have to be taken with regard to the pending Special Leave  Petition.”

11. After considering the opinion of the Attorney General, the Prime Minister  

accorded his approval for acceptance of the order of the Delhi High Court in K. C.  

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Garg’s case. As a sequel to this, I.A. Nos.16-18 were filed for withdrawal of Civil  

Appeal Nos. 1972-1974/2003.  The same were allowed by this Court vide order  

dated 13.5.2005 and the appeals were dismissed as withdrawn.

12. On  22.6.2005,  the  Department  of  Pension  and  Pensioners’  Welfare,  

Ministry  of  Personnel  (Public  Grievances  and Pension)  issued  instructions  for  

implementation of the order passed by the High Court in K.C.Garg’s case.  It was  

also  proposed  that  O.M.  dated  29.10.1999 may be  withdrawn.   However,  the  

Ministry of Finance did not agree with the latter part of the proposal.  Thereafter,  

permission of the Prime Minster being the Minster-in-charge of the Department of  

Pension and Pensioners’ Welfare, Ministry of Personnel (Public Grievances and  

Pension) was sought under Rule 12 of the Government of  India (Transaction of  

Business)   Rules,  1961.   On  29.7.2000,  the  Prime  Minister  sanctioned  the  

proposal for withdrawal of O.M. dated 29.10.1999. However, before the decision  

taken by the Prime Minister could be translated into an order, this Court delivered  

judgment  titled  Col.  B.  J.  Akkara  (Retd.)  v.  Government  of  India  and others  

(2006)  11 SCC 709 in  the  appeals  and writ  petitions  filed  by  the  doctors  of  

defence services and in the light of that decision, the Prime Minister approved the  

proposal of the Department that O. M. dated 29.10.1999 may not be withdrawn.   

13. Dr. G. D. Hoonka, who retired as Chief Medical Superintendent, Central  

Railway, Jabalpur w.e.f. 30.4.1996 challenged the decision taken by the Railways  

in the light of O.M. dated 12.11.1999 whereby NPA was not treated as part of  

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basic pay for the purpose of calculation of pension.  The Tribunal allowed the  

application filed by Dr. Hoonka.  Writ Petition No.2539/2003 filed by the Union  

of India and others was dismissed by the Division Bench of the Madhya Pradesh  

High Court vide order dated 7.12.2004, paragraph 8 of which reads as under:

“The Circular dated 13.04.1998 makes it clear that NPA will be  counted  as  'pay'  for  all  service  benefits  including  retirement  benefits.  The  Circular  dated  15.01.1999  does  not  contain  anything to the contrary. What is stated in the circulars dated  13.04.1999 (which states that NPA granted to Railway Medical  Officers is not to be added to the minimum of the revised scales  of pay, while giving effect to the circular dated 15.01.1999) is  merely  a  departmental  clarification  and  not  a  policy  of  the  Government. The circular dated 12.11.1999 rightly states that  "It (NPA) is a separate element although it is taken into account  for the purpose of computation of pension". This refers to the  policy  of  the  Government  contained  in  the  Circular  dated  13.04.1998 which states  that  NPA will  count as 'Pay'  for  all  service  benefits  and  retirement  benefits,  which  includes  pension. Having said so, the circular dated 12.11.1999 proceeds  to  say  that  NPA is  not  to  be  added to  the  minimum of  the  revised  scale  of  pay  as  on  1.01.1996  in  cases  where  consolidated pension is to be stepped up to 1999. The policy of  the  government  (Decision  of  the  President)  as  stated  in  the  Circular dated 13.04.1998 that NPA will count as pay for all  service benefits including pension, is not altered or superseded  by  any  subsequent  policy  of  the  Government.  In  fact  it  is  reiterated in  the Circular  dated 12.11.1999.  If  that  is  so,  the  Circular  dated  12.11.1999  cannot  under  the  guise  of  clarification, delete the benefit of the policy decision contained  in the circular dated 13.04.1998, when the said policy continues  to be in force. Once it is decided, as a policy, that NPA will  count  as  'Pay'  for  all  service  benefits  including  retirement  benefits, the same cannot be excluded by way of clarification.  The position of course could have been different if the circular  dated 15.01.1999 containing the policy relating to illegible of  illegible earlier policy stated in the circular dated 13.04.1998.  “The policy of the Government formulated by a decision of the  President  cannot  obviously  be  negated  by  a  departmental  

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clarification running contrary to such policy. The effect of the  clarification  dated  12.11.1999  is  that  in  giving  effect  to  the  policy contained in the Government circular dated 15.01.1999,  the policy dated 13.04.1998 is to be ignored. But so long as the policy contained in the President's decision, given effect by the  circular dated 13.04.1998 continues to hold the field, its effect  cannot  arbitrarily  be  directed  to  be  ignored  by  a  purported  clarification,  which  admittedly  is  not  a  decision  of  the President.”

(emphasis supplied)

(reproduced from the appeal paper book)

14. SLP (C)  No.14834/2006 filed  against  the  order  of  the Madhya  Pradesh  

High  Court  was  dismissed  by  this  Court  on  28.8.2006.  Review  Petition  (C)  

D.No.17280/2007 was also dismissed on 17.1.2008 as barred by limitation and  

also on merits.

15. Dr.  Naw Nath Prasad,  who retired as Medical  Director,  LNM, Railway  

Hospital,  Gorakhpur,  successfully  invoked  the  jurisdiction  of  the  Central  

Administrative  Tribunal,  Patna  Bench  for  adding  NPA  for  the  purpose  of  

calculating pension.  O.A. No.215/2005 filed by him was allowed by the Tribunal  

vide  order  dated  17.1.2006.   The  Union of  India  challenged the  order  of  the  

Tribunal in Civil Writ Jurisdiction Case No.11114/2006.  The Division Bench of  

the High Court referred to order dated 18.5.2002 passed by the Delhi High Court  

in  Civil  Writ  Petition  No.7826/2001  –  Retired  Railway  Medical  Officers  

Association v. Union of India and others, the order passed by the Madhya Pradesh  

High Court in Dr. G. D. Hoonka’s case, the circulars issued by the Government of  

India for implementing the order passed in the two cases and observed:

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“It is thus evident from a plain reading of the decisions of the  Courts  deciding  identical  issues,  and  duly  executed  by  the  Ministry of Railways (Railway Board) by issuing the aforesaid  letter dated 25.8.2005, that non-practising allowance availed of  by a serving doctor of Indian Railway Service is entitled to the  same to be taken into account for the purpose of computation  of post retirement benefits.

The  decision  of  the  authorities  declining  the  same  to  the  present respondent, the contest put up before the Tribunal and  the present writ petition at the instance of the authorities, is  beyond   our    comprehension,     speaks    of    not  only  unreasonable approach,   seems  to be arbitrary and verging  on  administrative  tyranny,   and burdening the Tribunal  and  this  Court  with utmost  unwanted matters,  and harassing the  retired employee in the evening of his life.”

16. SLP (C) No.15134/2010 filed against the order of the Patna High Court was  

dismissed by this Court on 4.10.2010 in the following terms:

“We are  not  inclined  to  entertain  the  special  leave  petition,  since  the  subject  matter  thereof  has  been  considered  earlier.  However,  the  cost  imposed  by  the  High  Court  in  the  writ  petition  is  quashed.   The  special  leave  petition  is  dismissed  except to the above extent.”

17. Dr.  S.N.  Srivastava,  who  retired  from  the  post  of  Chief  Medical  

Superintendent (nomenclature of the particular railway has not been given in the  

copy of order filed by the counsel for the appellants) w.e.f.  31.1.1996 filed Writ  

Petition  No.1774(SB)/2004  before  the  Allahabad  High  Court  for  issue  of  a  

mandamus to the respondents to re-fix his pension by adding the element of NPA.  

He relied upon the order passed by the Madhya Pradesh High Court in the case of  

Dr. G. D. Hoonka and pleaded that with the dismissal of the special leave petition  

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filed by the respondents, the order passed in that case has become final and the  

same is binding on the respondents.  On behalf of the respondents, reliance was  

placed on the judgment of this Court in Col. B. J. Akkara (Retd.) v. Government  

of  India  and  others  (supra)  and it  was  pleaded  that  the  writ  petitioner  is  not  

entitled to any relief.  The Division Bench of the Allahabad High Court relied  

upon paragraphs 12 and 13 of  the order  passed by the Tribunal  in Dr.  G.  D.  

Hoonka’s case, referred to the judgment in Col. B. J. Akkara’s case and allowed  

the writ petition by recording the following observations:

“It  is pertinent to point  out at this juncture that against  the judgment and order dated  9.5.2003 passed by the Central  Administrative Tribunal,  Jabalpur  in  the matter  of  Dr.  G.D.Hoonka, the Department questioned the validity of the aforesaid judgment by filing  writ petition no. 2539 of 2003 and the Jabalpur High Court by a detailed judgment refused  to interfere with the order of the Tribunal and dismissed the writ petition vide its judgment  and order dated 7.12.2004. While dismissing the writ petition, the Jabalpur High Court ob- served in paragraph 9 as under:-

"9. In fact, we find that when the question as to whether NPA is to be taken as part of pay  in regard to those who had retired prior to 1.1.1996, came up for consideration before the  Delhi High Court in Dr. K.C.Garg vs. Union of India (CWP 7322/2001) and connected  cases decided on 18.5.2002, the Railway Administration through their counsel conceded  in a reply to a query that NPA shall be taken to be a part of pay for post 1.1.1996. Be that  as it may."

Under these circumstances, it is very difficult for us to accept  the contentions of the Department and find force in the submis- sions advanced by the Counsel for the petitioner that the peti- tioner is also entitled for the benefit of the judgment rendered in  Dr. G .D.   Hoonka's case,  referred  to above.”

18. Dr. K.C. Bajaj (one of the appellants in the appeals arising out of SLP (C)  

Nos.3358-64/2011) filed O.A. No.1275/2006 for issue of a direction to the re-

spondents to add NPA for the purpose of calculating the pension. The same was  

disposed of by the Tribunal with a direction to the respondents to consider his  

case for grant of pension in terms of the judgment in Dr. K. C. Garg’s case and  

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pass a speaking and reasoned order.  However, by taking shelter of the judgment  

in  B.J.  Akkara’s  case,  the  Railway  Board  rejected  his  representation.   O.A.  

No.1369/2007 filed by Dr. K. C. Bajaj was dismissed by the Tribunal along with  

other similar applications vide order dated 12.9.2008 by relying upon the judg-

ment of this Court in Col. B. J. Akkara’s case.  The writ petitions filed by the ap-

pellants questioning the order of the Tribunal were also dismissed by the High  

Court.   

19. These  appeals  were  heard  by  different  Benches  on  various  dates.  On  

11.4.2013, the learned Additional Solicitor General produced the file containing  

different opinions recorded by the learned Attorney General.  After perusing the  

file, the Court passed the following order:

“Further arguments heard, which remained inconclusive.

The file produced by the learned Additional Solicitor General  contains  different  opinions  recorded by the  learned Attorney  General.  In  the  last  opinion  recorded  in  2007,  the  learned  Attorney General noted that the files produced before him do  not contain formal notification for withdrawal of O.M.  dated  29.10.1999.

However, from the judgment of this Court in Col. B.J. Akkara  (Retired) v. Government of India and others (2006) 11 SCC 709  which  was  decided  on  10.10.2006,  it  is  borne  out  that  an  affidavit  was  filed  on behalf  of  the respondents  on 1.8.2006  stating  therein  that  Circular  dated  29.10.1999  had  been  withdrawn in regard to the Civilian Medical Officers who were  petitioners  in  the  writ  petition  filed  by  Dr.  K.C.  Garg  and  others. It is also borne out from paragraph 23 of the judgment  that the Court deciding the matter had been informed that the  order passed by the Delhi  High Court  in C.W.P.  Nos.  7322,  7826 and 7378 of 2001 Dr. K.C. Garg and others v Union of  

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India and others had not been challenged by the Union of India  and the directions contained in the High Court's order had been  implemented.

All this, prima facie, shows that the parties appearing before the  Court  had  not  placed  the  facts  in  a  correct  perspective  and  apparently misleading statement was made in the affidavit filed  on behalf of the respondents that O.M. dated 29.10.1999 had  been  withdrawn  in  respect  of  the  petitioners  in  K.C.  Garg's  case.

The   learned   Additional  Solicitor   General should instruct  his  assisting  counsel  to  ensure  that  an  affidavit  of  a  senior  officer of the rank of Joint Secretary to the Government is filed  clarifying the stand of the Government. In  the   affidavit   it  should  also be indicated  as   to what steps were taken for  compliance of the direction given by the Prime Minister under  Rule 12 of the Government of India (Transaction of Business)  Rules, 1961. The required affidavit be filed within two weeks.

For further hearing, the cases be listed on 01.05.2013.”   

20. In compliance of the direction given by this Court, Ms. Vandana Sharma,  

Joint Secretary, Ministry of   Personnel, Pension and Public Grievances filed affi-

davit dated 24.5.2013.  Thereafter, the counsel for the parties made further argu-

ments and judgment was reserved on 7.5.2013 with liberty to the parties to file  

written submissions.

21. While dictating the judgment, the Court found that the written arguments  

filed on behalf of the parties contain additional facts which were not brought to  

the notice of the Court during the course of hearing.  Therefore, by an order dated  

2.7.2013, the case was ordered to be listed for further arguments,  which were  

heard on 24.9.2013 and judgment was again reserved.

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22. Shri Prashant Bhushan, learned counsel appearing for the appellants in the  

appeals arising out of SLP (C) Nos.3358-64/2011 argued that the judgments of  

the Delhi, Madhya Pradesh, Patna and Allahabad High Courts are binding on the  

respondents because O.M. dated 29.10.1999 which was challenged by Dr. K.C.  

Garg and others was quashed by the Division Bench of the Delhi High Court vide  

order dated 18.5.2002 and though the respondents had challenged that order by  

filing special leave petitions, a conscious decision was taken by the Government  

to withdraw Civil Appeal Nos.1972-1974/2003 and to implement the order of the  

Delhi High Court.   Shri Bhushan pointed out that the special leave petitions filed  

against the orders passed by the Madhya Pradesh High Court and the Patna High  

Court in the cases of Dr. G. D. Hoonka and Dr. Naw Nath Prasad were also dis-

missed by this Court and argued that having implemented the orders of the High  

Court in the cases of civilian doctors as well as doctors employed in the Railways  

and Post and Telegraph Department, it is not open to the respondents to rely upon  

the judgment in Col. B.J. Akkara’s case for denying relief to the appellants. In  

support of this argument, Shri Bhushan relied upon the judgments in Amrit Lal  

Berry v. Collector of Central Excise, New Delhi and others (1975) 4 SCC 714 and  

K. I. Shephard and others v. Union of India and others (1987) 4 SCC 431.  He  

submitted that the judgment in State of Maharashtra v. Digambar (1995) 4 SCC  

683,  to  which  reference  has  been  made  in  paragraph  25  of  the  judgment  in  

Col.B.J. Akkara’s case, has no bearing on these appeals because a conscious and  

considered decision was taken by the Government of India to withdraw the ap-

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peals filed against the order passed in the case of Dr. K.C. Garg and others and  

the orders passed by the Madhya Pradesh and Patna High Courts were imple-

mented after dismissal of the special leave petitions.  Shri Bhushan also pointed  

out that question No.3 in Col. B.J. Akkara’s case was decided by the two Judge  

Bench under a wholly erroneous impression that the order passed by the Division  

Bench of the High Court in K.C. Garg’s case was not challenged by the Union of  

India.  Shri Bhushan also distinguished the judgment in Col. B.J. Akkara’s case  

by pointing  out  that  this  Court  had not  considered the  impact  of  O.M.  dated  

7.4.2008 issued by the Government in terms of the decision taken by the President  

that NPA shall count as pay for all service benefits including retirement benefits.

23. Shri A. S. Chandhiok, learned Additional Solicitor General argued that the  

issue raised in these appeals is no longer re integra and should be deemed to have  

been  decided  against  the  appellants  by  virtue  of  the  judgment  in  Col.  B.  J.  

Akkara’s case.  He emphasized that clarification dated 11.9.2001 was issued by  

the Ministry of Defence in the light of O.M. dated 29.10.1999 and in view of de-

cision of question No.2 in Col. B. J. Akkara’s case, the appellants cannot fall back  

upon O. M. dated 7.4.1998 and claim that NPA should be added to the basic pay  

for the purpose of calculating the pension. The learned Additional Solicitor Gen-

eral argued that dismissal of the special leave petitions filed in the cases of Dr. K.  

C. Garg and others, Dr. G. D. Hoonka and Dr. Naw Nath does not have the effect  

of conclusively deciding the issue relating to entitlement of the appellants to get  

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the benefits of the orders of the three High Courts because this Court had not in-

terpreted the relevant circulars and Office Memorandums.

24. We have considered the  respective  arguments/submissions  and carefully  

scrutinized the record including the additional affidavits filed on behalf of the re-

spondents.  We have also gone through the orders passed by the Delhi, Madhya  

Pradesh, Patna and Allahabad High Courts.

25. The first question which merits consideration is whether the judgment in  

State of Maharashtra v. Digambar (supra) can be relied upon for ignoring the or-

ders passed by the four High Courts, which have since been implemented by the  

concerned departments/establishments.   A reading of that judgment shows that  

this Court had entertained subsequent special  leave petitions filed by the State  

questioning the order of the High Court against the grant of compensation for ille-

gal utilisation of their land despite the fact that the special appeals filed against  

similar orders passed by the High Court had already been dismissed. This Court  

took cognizance of the fact that in some of the matters, the State Government had  

not challenged the orders of the High Court and the special leave petition filed in  

some other matters had been summarily dismissed and proceeded to observe:  

“Sometimes, as it was stated on behalf of the State, the State  Government  may  not  choose  to  file  appeals  against  certain  judgments of the High Court rendered in writ petitions when  they are considered as stray cases and not worthwhile invoking  the discretionary jurisdiction of this Court under Article 136 of  the Constitution, for seeking redressal therefor. At other times,  it is also possible for the State, not to file appeals before this  

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Court in some matters on account of improper advice or negli- gence or improper conduct of officers concerned. It is further  possible, that even where SLPs are filed by the State against  judgments of the High Court, such SLPs may not be entertained  by this Court in exercise of its discretionary jurisdiction under  Article  136  of  the  Constitution  either  because  they  are  con- sidered as individual cases or because they are considered as  cases not involving stakes which may adversely affect the in- terest of the State. Therefore, the circumstance of the non-filing  of the appeals by the State in some similar matters or the rejec- tion of some SLPs in limine by this Court in some other similar  matters by itself, in our view, cannot be held as a bar against the  State in filing an SLP or SLPs in other similar matter/s where it  is considered on behalf of the State that non-filing of such SLP  or SLPs and pursuing them is likely to seriously jeopardise the  interest of the State or public interest.”

26. This Court further observed that the special leave petition filed by the State  

deserves to be decided on merits because the High Court was wholly wrong in  

granting relief of compensation to all the writ petitioners without considering their  

entitlement for such relief under Article 226 of the Constitution. The Court noted  

that the award of compensation in such matters would cast a burden of Rs.400  

crores on the State and proceeded to observe:

“Therefore, the fact that the State has failed to file appeals in  similar matters or this Court has rejected SLPs in similar mat- ters, cannot be held to be a total bar or a fetter for this Court to  entertain appeals under Article 136 of the Constitution against  similar judgments of the High Court where need to entertain  such appeals is found necessary to meet the ends of justice, in  that,  the ambit of power invested in this Court under Article  136 allows its exercise, wherever and whenever, justice of the  matter demands it for redressal of manifest injustice. When by  an order, already adverted to by us, a two-Judge Bench of this  Court, has got referred the SLP out of which the present appeal  has  arisen  for  being entertained and decided  on merits  by  a  three-Judge Bench of this Court, notwithstanding the rejection  

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of SLPs by another two-Judge Bench of this Court in similar  matters, it has desired the exercise of this Court’s wide power  under Article 136 of the Constitution to meet the ends of justice  and remedy the manifest  injustice caused to the State by the  judgment  of  the  High  Court  under  appeal,  cannot  be  over- looked.”

27.  In Col. B. J. Akkara’s case (paragraph 23), a two Judge Bench noted that  

order dated 18.5.2002 passed by the Division Bench of the High Court in Dr. K.C.  

Garg’s case and other connected matters had not been challenged by the Union of  

India and was implemented by adding NPA to basic pay for stepping up the pen-

sion in the case of Civilian Medical Officers who had retired prior to 1.1.1996 and  

the submission made on behalf of the respondents (paragraph 24) that circular  

dated 29.10.1999 had been withdrawn only qua the Civilian Medical Officers who  

were petitioners in the writ petitions filed before the High Court and not with re-

gard to all  Civilian Medical  Officers,  referred to the proposition laid down in  

Digambar’s case (paragraph 25), which has been extracted herein above and held:  

“The said observations apply to this case. A particular judgment of the  High Court may not be challenged by the State where the financial re- percussions are negligible or where the appeal is barred by limitation.  It may also not be challenged due to negligence or oversight of the  dealing officers or on account of wrong legal advice, or on account of  the non-comprehension of the seriousness or magnitude of the issue  involved. However, when similar matters subsequently crop up and  the magnitude of the financial implications is realised, the State is not  prevented or barred from challenging the subsequent decisions or res- isting subsequent writ petitions, even though judgment in a case in- volving similar issue was allowed to reach finality in the case of oth- ers. Of course, the position would be viewed differently, if petitioners  plead  and  prove  that  the  State  had  adopted  a  “pick-and-choose”  method only to exclude petitioners on account of mala fides or ulterior  

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motives. Be that as it may. On the facts and circumstances, neither the  principle of res judicata nor the principle of estoppel is attracted. The  administrative law principles of legitimate expectation or fairness in  action are also not attracted. Therefore, the fact that in some cases the  validity of the circular dated 29-10-1999 (corresponding to the De- fence Ministry circular dated 11-9-2001) has been upheld and that de- cision has attained finality will not come in the way of the State de- fending or enforcing its circular dated 11-9-2001.”

28. However, the fact of the matter is that the Union of India did challenge the  

order passed by the Delhi High Court in Dr. K. C. Garg’s case and other connec-

ted matters by filing special leave petitions, which were converted into Civil Ap-

peal Nos.1972-1974/2003 and during the pendency of the appeals, a conscious de-

cision was taken by the Government of India not to pursue the appeals and imple-

ment the order of the High Court.  It is neither the pleaded case of the respondents  

nor it has been argued before us that the Government of India had taken decision  

to withdraw the appeals field in the cases of Dr. K. C. Garg and others because  

the  financial  implications  were  negligible  or  that  the  concerned officers  were  

misled in doing so on account of wrong legal advice. At the cost of repetition, we  

consider it necessary to observe that during the pendency of the appeals, the mat-

ter was referred to the Attorney General for his opinion whether the judgment of  

the High Court is  correct and the same should be implemented.  The Attorney  

General examined the matter keeping in view the relevant rules and the policy de-

cisions taken by the Government of India and opined that the judgment of the  

High Court was correct and should be accepted in preference to the view taken by  

the Tribunal.  The issue was then considered at the highest level of the Govern-

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ment and the Prime Minister ordered implementation of the High Court’s order.  

Thereafter, the appeals were withdrawn. It is a different thing that the proposal for  

withdrawal of O.M. dated 29.10.1999 was shelved in view of the judgment in Col.  

B. J. Akkara’s case. In other words, the Government of India had taken a well  

considered decision not to pursue the appeals filed against the order of the Delhi  

High Court and implement the same on the premise that the proposition laid down  

therein was correct.

29. In view of the above discussion, we hold that the ratio of the Digambar’s  

case cannot be invoked to justify the pick and choose methodology adopted by the  

Union of India in resisting the claim of similarly situated doctors that NPA pay-

able to them shall be taken into consideration for calculating the pension. Such an  

approach by the Union of India is ex-facie arbitrary, unjust and has resulted in vi-

olation of Article 14 of the Constitution.

30. The judgment in Col. B.J. Akkara’s case cannot be applied to the appel-

lants’ case because the circulars,  which fell  for interpretation in that  case and  

those under consideration in these appeals are different in material aspect.  By cir-

cular dated 7.6.1999, the Ministry of Defence conveyed the decision of the Pres-

ident that “with effect from 1-1-1996, pension of all armed forces pensioners irre-

spective of their date of retirement shall not be less than 50% of the minimum pay  

in the revised scale of pay introduced with effect from 1-1-1996 of the rank, held  

by the pensioner”. The circular provided that the revision of pension should be  

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undertaken as follows in case of commissioned officers (both post-and pre-1-1-

1996 retirees):

“(i)  Pension shall  continue to  be calculated  at  50% of  the average  emoluments in all cases and shall be subject to a minimum of Rs.1275  p.m. and a maximum of up to 50% of the highest pay applicable to  armed forces personnel but the full pension in no case shall be less  than 50% of the minimum of the revised scale of pay introduced w.e.f.  1-1-1996 for  the rank last  held by the commissioned officer at the  time of his/her retirement. However, such pension shall  be reduced  pro rata, where the pensioner has less than the maximum required ser- vice for full pension. [Vide clause 2.1 (a).]

(ii) Where the revised and consolidated pension of pre-1-1-1996 pen- sioners are not beneficial to him/her under these orders and is either  equal to or less than existing consolidated pension under this Min- istry’s letters dated 24-11-1997, 27-5-1998 and 14-7-1998, as the case  may be, his/her pension will not be revised to the disadvantage of the  pensioner (vide clause 4).”

31. When  the  implementing  departments  sought  clarification  on  the  issue  

whether NPA admissible as on 1.1.1986 is to be taken into consideration after re-

fixation of pay on notional basis as on 1.1.1986 and the same is to be added to the  

minimum of  the  revised  scale  while  stepping  up the  consolidated  pension on  

1.1.1996, the Ministry issued clarification vide circular dated 11.9.2001 in the fol-

lowing terms:    

“The undersigned is directed to refer to Ministry of Defence Letter  No. 1(1)/99/D(Pension/Services) dated 7-6-1999, wherein decision of  the Government  that  pension of  all  pensioners irrespective  of  their  date of retirement shall not be less than 50% of the minimum of the  revised scale of pay introduced with effect from 1-1-1996 of the post  last held by the pensioner was communicated….

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NPA granted to medical officers does not form part of the scales of  pay. It is a separate element, although it is taken into account for the  purpose of computation of pension.

This has been examined in consultation with the Department of Pen- sion and Pensioners’ Welfare and the Department of Expenditure and  it is clarified that NPA is not to be taken into consideration after refix- ation of pay on notional basis on 1-1-1986. It is also not to be added to  the  minimum of  the  revised  scale  of  pay as  on  1-1-1996 in  cases  where consolidated pension is to be stepped up to 50%, in terms of  Ministry of Defence Letter No. 1(1)/99/D (Pension/Services) dated 7- 6-1999.”

32. This Court treated circular dated 11.9.2001 as clarificatory in nature and  

held that it neither amends nor modifies circular dated 7.6.1999.  The most strik-

ing difference between O.M. dated 7.4.1998 issued by Department of Pension and  

Pensioners’  Welfare,  Ministry  of  Personnel  (Public  Grievances  and  Pension)  

and circular dated 7.6.1999 issued by the Defence Ministry is that the decision of  

the President conveyed vide O.M. dated 7.4.1998 was that NPA shall count as pay  

for all service benefits including retirement benefits but no such decision was con-

tained in circular dated 7.6.1999.  Therefore, the clarification issued by the Min-

istry of Defence vide circular dated 11.9.2001 cannot be equated with O.M. dated  

29.10.1999 which had the effect of modifying the decision of the President but  

was issued without his approval.  Unfortunately,  the Tribunal and the Division  

Bench of the High Court overlooked this vital distinction between O.M. dated  

7.4.1998 issued by the Ministry of Personnel (Public Grievances and Pension),  

Department of Pension and Pensions’ Welfare and Circular dated 7.6.1999 issued  

by  the  Ministry  of  Defence  and  mechanically  applied  the  ratio  of  Col.  B.  J.  

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Akkara’s case for deciding the cases of the doctors, who served in Central Health  

Services, the Railways and other departments of the Government. Therefore, the  

impugned order is legally unsustainable.

33. In the result, the appeals are allowed, the impugned order of the High Court  

as also the one passed by the Tribunal are set aside and the applications filed by  

the appellants before the Tribunal are allowed in terms of the prayer made.  The  

respondents shall re-calculate the pension payable to the appellants by adding the  

element of NPA.  This exercise shall be undertaken and completed by the con-

cerned authorities within a period of three months from today.

…………………………J. (G.S.SINGHVI)  

NEW DELHI;              ………………………J. NOVEMBER 27, 2013                                              (KURIAN JOSEPH)

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