REPORTABLE    

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 10035 OF 2010    

N.N. GODFRED & OTHERS       APPELLANTS

     VERSUS

UNION OF INDIA & OTHERS           RESPONDENTS

J U D G M E N T    

INDU MALHOTRA, J.    

1. The present Civil Appeal has been filed under Section 30 of the

Armed Forces Tribunal Act, 2007 to challenge the judgment

and order dated February 25, 2010 passed by the Principal

Bench of the Armed Forces Tribunal,  New Delhi  in Transfer

Application No. 492 of 2010.

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1.1 The three  appellants  had enrolled in the Indian  Navy  as

Sailors, and subsequently joined the Submarine Arm. After

being promoted through the ranks, all three appellants

superannuated from service  on  January  31,  1983.  While

Appellant No. 1 was holding the rank of Chief Petty Officer

(ERA­II), Appellant Nos. 2 and 3 were holding the rank of

Chief Engine Room Artificer in the Submarine Arm of the

Indian Navy at the time of their superannuation.

1.2 Initially, the appellants were not granted pensionary

benefits on account of the non­inclusion of their four­year

training period,  while computing their qualifying service.

Aggrieved by the same, the appellants filed a Writ Petition

before the Delhi High Court which was allowed in terms of

the decision of this Court in  Anuj Kumar Dey  v.  Union of

India [(1997) 1 SCC 366].

1.3 Pursuant to the said judgment, the appellants started

getting pensionary benefits. The pension of the appellants

was computed on the basis of the pay of a  Chief Petty

Officer.  

1.4 On February 8, 2005, Appellant No. 3 made a

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representation to the Bureau of Sailors­Respondent No. 3

for  a clarification whether Submarine Pay of  Rs.  300 per

month, which was being granted to them after joining the

Submarine Arm, was  included for computing the pension

payable. It was submitted that Submarine Pay was a

component of their “pay”, and not an “allowance”.

1.5 On March 29, 2005 Respondent No. 3 rejected the

representation stating that Submariners and Aviation

Sailors were categorized under the group “Other than A”,

which is lower than  Group A, and that the pensionary

benefits granted were “in order”.  

1.6 The three appellants being aggrieved by the refusal of the

respondents to take into account Submarine Pay while

calculating pension payable to them filed separate  Writ

Petition Nos. 19145­47 of 2006 before the Delhi High Court.

1.7 During the pendency of the Writ Petitions, the Armed Forces

Tribunal Act, 2007 came into force. The Writ Petition Nos.

19145­47 of 2006 were transferred to the Principal Bench,

Armed Forces Tribunal, New Delhi and renumbered as

Transfer Application No. 492 of 2010.

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1.8 The Armed Forces Tribunal disposed of the Transfer

Application No. 492 of 2010 by a cryptic Order dated

February 25, 2010 wherein it  was merely mentioned that

submarine pay/allowance cannot be counted for the

purpose of determining pension.

2. Aggrieved by the impugned order, the appellants preferred the

present Civil Appeal.

2.1 The appellants have submitted that Submarine Pay would

form part of their basic pay, and hence ought to be included

for computation of Service Pension. This was for the reason

that Sailors working in the Submarine Arm of the Indian Navy

were granted Submarine Pay on account of the highly

dangerous nature of the work undertaken, and the arduous

conditions in which they had to function.

2.2 It was further submitted that Submarine Pay was included

in the Last Pay Drawn Certificate dated August 10, 1983. In

contrast, Sailors who were not working in the Submarine

Arm, were not being granted this additional pay. The

appellants gave the illustration of one M.V. Kumaran who

was not working in the Submarine Arm. He was not being

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granted Submarine Pay, on account of the difference in the

nature of duties performed.

2.3 The appellants further submitted that since they belonged

to  the  group “Other than Group A”  they were entitled  to

higher rates of pay as specified in Appendix A, Clause 3 of

the Navy Instructions No. 2/S/74 dated August 17, 1974.

2.4 Reliance was placed on two decisions of this Court in

BALCO Captive Power Plant Mazdoor Sangh and another  v.

National Thermal Power Corporation and others  [(2007) 14

SCC 234] and  Paradeep Phosphates Limited  v.  State of

Orissa & ors. [Civil Appeal Nos. 3997­3998 of 2018 decided

on  April 19, 2018 to contend that conditions of service

cannot be altered to the detriment of employees.

3. Per contra, the case of the Respondents  is that the amount

received under the head of Submarine Pay is an “allowance”,

and hence cannot be included for the purposes of computing

Service Pension.

3.1 It was contended the head of Submarine Pay was listed as

an allowance under Appendix B of the Navy Instruction No.

2/S/74 dated August 17, 1974.

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3.2 It was further submitted that any allowance, including

Submarine Pay, were not treated as reckonable emoluments

for the purposes of computing Service Pension.

3.3 The respondents submitted that pursuant to the Fifth Pay

Commission, Special Pays like Flying Pay, Submarine Pay,

Technical  Pay  etc.  were re­designated  as  allowances  vide

GoI/MoD Letter 4(1)/2001/D(Pay/Services) dated March

01, 2004.

4. The issue which arises for consideration is whether Submarine

Pay was to be included for computing the Service Pension of

the appellants, who retired on 31.1.1983 in the rank of Chief

Petty Officer and Chief Engine Room Artificer.

FINDINGS

5. Section I of Chapter III of the Navy (Pension) Regulations, 1964

provides the framework for grant of pensionary benefits to

Sailors in the Indian  Navy. Sailors  who have served for a

period of fifteen years i.e. the minimum qualifying service for

pension, or more, are eligible for grant of Service Pension.

5.1 Service Pension is fixed on the basis of the rank and group

held by a person as per Regulation 84 of the Navy (Pension)

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Regulations, 1964 which has been reproduced hereunder:

“84. Rank and group for assessment of service pension.­ The service pension shall be assessed on the basis of the rank actually held by an individually continuously whether in a substantive or paid acting capacity and the lowest group for which he was paid during the last ten months of his service qualifying for pension.”

5.2 Regulation 86 of the Navy (Pension) Regulations, 1964

provides the rates of Service Pension. The relevant extract of

Regulation 86 is reproduced hereunder:

“86. Rate of service pension.­ The following are the rates of service pension:­

         RATES OF SERVICE PENSION­SAILORS

Rank Completed years of service

Rates of service pension

Group ‘A’

Naval Aviatio

n Sailors

of Group ‘A’ &

rates of pay

Group ‘B’

Grou p ‘C’

Naval Aviatio

n Sailors other than those on

Group ‘A’

rates of pay

(1) (2) (3) (4) (5) (6)

Rs. Rs. Rs. Rs.

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p.m. p.m. p.m. p.m.

4. Chief Petty

Officer/ Artificer Class

III/Mech anician Class III

15

16

17

18

19

20

21

22

23

24

25

83

88

94

99

105

110

116

83

88

94

99

105

110

116

121

127

132

138

83

88

94

99

105

110

116

121

127

132

138

99

105

112

118

125

131

138

145

151

158

164” 5.3 A perusal of Regulation 86, and the rates of Service Pension

reveals that Chief Petty Officers and Artificer Class III

belonging to the group “Other than Group A”,  which has

higher rates  of  Service  Pension  as compared to those in

“Group A”.

5.4 The concept of Submarine Pay was introduced by the Union

of India  vide  Letter No. PA/4102/NHO/504.S/D

(PAY/SERVICES)  dated  May  31,  1967. It  was  granted to

Officers and Sailors who were qualified to serve in

submarines,  and were deputed to go to sea  from time to

time. Submarine Pay  was to be treated as “pay for all

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purposes”, as per the instructions issued by the Ministry of

Defence 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

revised with effect from January 1, 1973 pursuant to the

Navy Instruction No. 2/S/74 dated August 17, 1974.

Navy Instruction dated August 17, 1974 was issued to

give effect to the recommendations of the Third Pay

Commission, and remained in force till January 1, 1986.

5.6 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term

“basic pay” to denote the pay “actually drawn” in the scale

prescribed for the rank and group. Clause 2 provided that

the revised rates of pay applicable to Sailors were specified

in Appendix A. As per Clause 3, Artificer/Mechanician

Sailors of the Submarine Arm were entitled to rates of pay

specified under column titled “Group A” in Appendix A.

The heads of Submarine Pay and Submarine Allowance

were separately listed in Appendix B at S. Nos. 14 and 15,

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respectively.

The relevant extract of Appendix B is extracted

hereinbelow for ready reference:

       “ALLOWANCES ­REVISED RATES

Sl No. Allowances Existing Rate(s) Revised Rates GROUP ‘A’

14. Submarine  Pay

MCPOs I & II CPO PO Leadings Sea I Sea II

350 p.m. 300

275 265 250

170  p.m. 150 125 115 100.00

15. Submarine  Allowance

MCPO I & II Nil 2 p.d.”

As per Navy Instruction No. 2/S/74, a Chief Petty

Officer  was  entitled to  Submarine  Pay  at the rate  of  Rs.

300/­ per month, which was distinct from Submarine

Allowance.

5.7 Pursuant to the recommendations of the Fourth Pay

Commission the rates of pay and allowances of Officers and

Sailors were revised by Special Navy Instruction No. 1/S/86

(with effect from January 1, 1986). Further revisions took

place  pursuant to the recommendations  of the  Fifth  and

Sixth Pay Commissions. The definition of “basic pay” was

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changed to exclude Submarine Pay.  

The reliance on these instructions by the counsel for the

Respondents is misplaced, as the case of the appellants was

governed by the instruction issued pursuant to the Third

Pay Commission for 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 on January 1, 1983.

5.8 As per Letter No. PA/4102/NHO/504.S/D(PAY/SERVICES)

dated May 31, 1967 Submarine Pay was to be treated as

“pay for all purposes”, which would include computation of

Service Pension.

5.9 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term

“basic pay” to denote the pay actually drawn in the scale

prescribed for the rank  and  group.  The  Last  Pay  Drawn

Certificate of the appellants shows that Submarine Pay was

actually being drawn as a separate head of “pay”. Navy Instruction No. 2/S/74 did not exclude Submarine

Pay from the computation of “pay” for the purpose of

calculating Service Pension.

5.10 In contrast, it  would be instructive to refer to the entries

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with respect to Aviation Sailors. 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.

5.11 Appendix B of Navy Instruction No. 2/S/74 specifically

mentions  both  Submarine  Pay  and  Submarine  Allowance

separately  at  S.  Nos.  14  and 15, respectively.  The terms

Submarine Pay and Submarine Allowance are not used

interchangeably, as has been erroneously done in the

impugned Order.

5.12 The submission of the respondents that Submarine Pay was

excluded from the ambit of basic pay as per Special Navy

Instruction No. 1/S/86, Special Navy Instruction No.

1/S/9W and Special Navy Instruction No. 1/S/08 cannot be

accepted, since these notifications came into force

subsequent to the date of superannuation of the appellants.

These would therefore have no application to the cases of

the present appellants,  which were governed by the Navy

Instruction No. 2/S/74 dated August 17, 1974 issued

pursuant to the recommendations of the Third Pay

Commission.

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6. In view of  the aforesaid  facts and  legal  position, Submarine

Pay was includible in “pay”, for the purposes of computing the

Service Pension of the appellants.

As a result, the Civil Appeal is allowed, and the judgment

and order dated February 25, 2010 passed by the Principal

Bench, Armed Forces Tribunal, New Delhi in Transfer

Application No. 492 of 2010, is hereby set aside, with no order

as to costs.

..........................J. (S. ABDUL NAZEER)

..........................J. (INDU MALHOTRA)

New Delhi

July 11, 2018.

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