IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 23/04/2002
Coram
THE HONOURABLE MR. JUSTICE P. SHANMUGAM
and
THE HONOURABLE MR. JUSTICE F.M. IBRAHIM KALIFULLA
Writ Petition No.4956 of 1999 and WP.No. 12839 of 2001
and W.P.No. 12843 and 13717 of 2001
and connected W.M.Ps.
W.P. No.4956 of 1999
1. The Chairman,
Railway Board,
Rail Bhavan,
New Delhi.
2. Union of India owning
Southern Railway, rep.
by the General Manager,
Southern Railway,
Park, Madras-3. .. Petitioners
vs.
1. The Registrar,
Central Administrative Tribunal,
Chennai Bench, Chennai-104.
2. D. Satyanarayana Sharma
3. S. Shanmugasundaram
4. K.S. Gopalakrishnan
5. V.L. Kandasamy
6. C.G. Shankar
7. V. Jothilangam
8. K. Mayachandran
9. M. Jayaseelan
10. Jaganwadham Babu
11. A. Dhilshad Khan
12. M. Kannappan
13. T.R. Hembrom
14. S. Govindarajan
15. P. Ramaswamy
16. K. Gnanasekaran
17. A. William Anburaj
18. A. Aloysius
19. P. Gnanasekaran
20. A. Rasheed
21. S. Subbaroyan
22. T.G. Balasubramanian
23. A. Periyanayaga Doss
24. M. Selvaraju
25. V. Rajendran
26. E. Venkataramani
27. G. Arumugam
28. P. Thirupathi
29. S. Sekar
30. A. Albert Thangaraj
31. K. Balaraman
32. C. Babu
33. M.J. James
34. D. Sarat Chandar
35. R. Dhanapal
36. M. Gangadharan
37. D. Vallinayagan
38. P. Durairaj
39. M. Ramalingam
40. S. Md. Nazeer Sheriff
41. K. Veeramani
42. S. Banuprakash
43. V. Nagarajan
44. R. Thiagarajan
45. V. Santhanam
46. Md. Sulaiman
47. N. Chandrasekaran
48. P. Muthusamy
49. S. Idayathullah
50. J. Madhusudanan
51. S. Raja
52. S. Palani
53. S. Nasarudeen
54. J.C. Rice
55. S. Narayanamurthi
56. K.S. Murugaiyan
57. S. Ilangovan
58. T. Ashok Kumar,
All Working as Stock Verifiers
at the Office of FA & CAO/WST/
PER, Chennai. .. Respondents
PRAYER : Petitions under Article 226 of the Constitution of India praying to
issue a Writ of Certiorari as stated therein.
ORDER These Writ Petitions coming on for hearing, upon perusing the
petitions and the affidavits filed in support thereof, the order impugned
herein, counter and reply affidavits filed, after perusing the related
records, and upon hearing the argu ments of Mr. R. Thiagarajan, Senior
Counsel on behalf of M/s. V.R. Gopalan, Advocate for the petitioners, Ms.
G. Mirula Roshini, Advocate for petitioner in W.M.P. No.30373 of 2000 and of
Mr. K. Chandru, Senior Counsel on behalf of Mr. T. Dhanya Kumar fo r the
respondent-employees, the Court passed the following order:-
:O R D E R
P. SHANMUGAM, J.
The respondents before the Central Administrative Tribunal (
hereinafter referred to as the Tribunal) are the petitioners herein.
2. Original Application No.776 of 1996 was filed by the
respondentemployees of the Southern Railway to call for the records of the
Railway Board relating to Proceedings No.PCIV/87/Imp./7 New Delhi dated
8.5.1996 and to quash the same on the main plea t hat the additional
increments granted to them form part of their basic pay and consequently, the
same must also be taken into account for the purpose of calculating Dearness
Allowance, House Rent Allowance, etc. and that the disallowance is illegal.
Th e application was allowed. The writ petitions are against this order.
3. The brief facts of the case are stated hereunder :
The post of Stock Verifiers in the Railways is filled by selection
from the categories of Clerks-Grade I, Selection Grade Clerks and Sub-heads.
Appendix-4 dealing with “Promotion to and confirmation to the rank of Stock
Verifiers” states as follows :
“(1) Promotion of persons holding substantively posts of Clerks in the
offices of the Financial Adviser and Chief Accounts Officers to the rank of
Stock Verifiers will be on considerations of seniority and merit including
fitness for outdoor work. In t he case of Accounts Clerks promotion to the
rank of Stock Verifiers will not be made unless they have passed the
examination prescribed in Appendix 2. The condition of passing the
examination prescribed in Appendix 2 by Accounts Clerks before they can b e
promoted to the rank of Stock Verifiers, may be relaxed, in special cases,
under the sanction of the General Manager.
…..
(6) No increments will be allowed to a Stock Verifier until he has
passed the qualifying examination and failure at two consecutive examinations
will entail reversion to his substantive post.” (emphasis added)
4. The Fifth Pay Commission, in reference to Stock Verifiers in para
83:243, has recommended as follows :
” ….. It may not be possible to recommend pay scale higher than
that of Accounts Assistants (i.e. Rs.1600-2660) for Stock Verifiers. The
selection grade for Stock Verifiers which was available prior to IV C.P.C.
may be reviewed as a second grade for Stock Verifiers. This pay scale is
proposed to be Rs.1640-2900 in the present terms. This will motivate Stock
Verifiers to continue in their line and not tempted to Accounts/Section
Officers stream.”
In the course of the recommendation, the Fifth Pay Commission took note of the
demand made by the Stock Verifiers for higher pay scales than that of Accounts
Assistants and an incentive on acquiring graduate diploma. The Commission
also noted the fact t hat Stock Verifiers selected were given the benefit of
pay fixation under F.R. 22(C) and two additional increments for passing the
qualifying Appendix 4 IREM examination. After the Pay Commission’s
recommendation, the pay scales of the erstwhile sub-hea ds (now Accounts
Assistants) and Stock Verifiers became identical as Rs.1400-2600. It was also
noted that despite the incentives of three advance increments for Stock
Verifiers, Zonal Railways are facing difficulties in filling up these posts
and the Mi nistry had supported the demand for higher pay scales for Stock
Verifiers.
5. The Stock Verifiers were given incentives on passing the Appendix
4 examination for the first time by the Railway Board as per their
communication dated 3.3.1989. The communication reads as follows :
“Subject – Grant of incentives to Accounts Stock Verifiers on passing
Appendix 4 Examination.
The matter regarding grant of incentive to Stock Verifiers on
passing Appendix 4 examination was under examination and pending issue of
final orders, instructions were issued vide this Ministry’s letter of even
number dated 26.11.1987 for not passing a ny amount as incentive in the
revised pay scales of 1986.
2. It has now been decided with the sanction of the President
that Stock Verifiers in the grade Rs.1400-2600 shall be given three advance
increments after their passing Appendix 4 examination. This will be effective
from 1.1.1986 or the date from whic h the employee opts for the revised pay
scales. (emphasis added)
3. …..”
The Railway board, in their communication dated 25.7.1995, has specifically
ordered that the three advance increments granted as per the Board’s letter
dated 3.3.1989 to Stock Verifiers in the grade of Rs.14 00-2600 for passing
Appendix 4-A examination m ay be treated as additional increment not to be
absorbed in future increments. In this background, the impugned communication
dated 8.5.1 996 came to be issued wherein it was ordered that the additional
increments will not be treated as part of basic pay and not to be reckoned for
calculating D.A. etc. It is against this communication the O.A. was filed
by the respondent-employees, which was allowed by the Tribunal.
6. The learned senior counsel Mr. R. Thiagarajan argued in extenso
in reference to the relevant rules submitted that the definition of ‘ pay’
readwith Appendix 4 shall not take in the additional increments which were
granted as an incentive. According t o him, the increments were granted only
after passing the examination and on their failure to pass within the
prescribed attempts, they were reverted. Hence, it cannot be stated that the
increments can be reckoned as forming part of the scale of pay fo r the said
post. The granting of increment was initially thought of as an incentive to
attract personnel from lower categories to the post of Stock Verifiers.
According to him, the interpretation and the view of the Tribunal is clearly
illegal.
7. Mr. K. Chandru, learned senior counsel appearing on behalf of
the respondent-employees submitted that increment is always treated as part of
pay, whether it is advance increment or not. Dearness Allowance is paid to
offset the erosion in the purchas ing power of the salary paid. He submitted
that the post of Stock Verifiers requires a qualification and the increment is
granted to the post. He assailed the decision of the Railways taken without
notice to the respondent-employees. According to him, the Board cannot treat
persons who have already drawn the salary by including the increment in their
pay scale and the respondentemployees, who are yet to get the benefits,
differently. Any such treatment will be arbitrary and violative of Article 14
of the Constitution of India.
8. We have heard the counsel in extenso and considered the matter
carefully.
9. The Stock Verifiers were drawn from the category of Clerks on
promotion by selection. As there was a dearth of Stock Verifiers opting from
the lower category, the Board offered to grant incentive. In their
communication dated 3.3.1989, it has been clearly stated that they shall be
given three advance increments after their passing the Appendix 4 examination.
The communication further says that this was thought of as an incentive for
them. It was made clear that the increments, which are granted as an
incentive, shall be given only after their passing the examination.
10. The point that arises for consideration here is whether this
increment can be treated as pay for the purpose of calculating Dearness
Allowance, etc. ‘Pay’ has been defined under Fundamental Rule 9 and also
under Clause 1303 of the Indian Railways Establishment Code. The said rule is
extracted below :
“1303. (F.R.9)(21)(a) – Pay – Pay means the amount drawn monthly by a
Government servant as:-
(i) the pay other than special pay or pay granted in view of his
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; and
(ii) overseas pay, special pay and personal pay; and
(iii) any other emoluments which may be specifically classified as pay
by the President.”
As per the above definition, the pay granted in view of a Government servant’s
personal qualification does not form part of his basic pay. From the
communications of the Board referred to earlier, it is clear that the
additional increment was granted to the Stock Verifiers on their acquiring or
passing the examination prescribed. Therefore, there is no scope for treating
this increment as forming part of their pay which has been specifically
excluded from the definition ‘pay’. The Board, in their fur ther
communication made in the year 1995 dated 25.7.1995, has categorically stated
that the advance increment is not to be absorbed in future increments,
followed by the impugned communication that the increment cannot be treated as
part of basic pay for the purpose of calculating the D.A. The Fifth Pay
Commission has also taken note of this fact that the staff have to qualify in
the Appendix 4 examination in order to become Stock Verifiers and as it may
not be possible to recommend pay scales higher t han that of Accounts
Assistants for Stock Verifiers, they have proposed selection grade for Stock
Verifiers, which was available prior to the IV C.P.C., reviving as a second
grade for Stock Verifiers and proposing a scale of Rs.1640-2900.
11. Though in ordinary understanding of the term ‘increment’ which is
earned by a Government servant is a part of pay and his D.A. is calculated by
including that pay, considering the background in this case, we find that the
three advance increments w ere granted as an incentive to attract lower grade
staff to the post of Stock Verifiers and that these advance increments were
granted on their passing the examination. Therefore, the grant of increment
is not automatic, but is conditional on their acqu isition of a qualification.
‘Pay’ as defined under Clause 1303 really excludes the pay granted in view of
personal qualification. It cannot be stated that the increment is attached to
the post and the scale of pay. As seen from the subsequent decision s of the
Railway Board dated 31.5.2001 wherein the Board has decided to replace the
scheme of granting three advance increments to Stock Verifiers in the scale of
Rs.5000-8000 on their passing the Appendix 4 -A IREM examination, with a fixed
quantum of Rs .240/- per month with effect from 1.6.1996. They have further
stated that this special advance will not count for calculation of D.A.,
H.R.A., C.C.A. and other relevant purposes.
12. In ROSHAN LAL VS. UNION OF INDIA (A.I.R. 1967 S.C. 1889), the
Constitution Bench of the Supreme Court has held that the origin of Government
servant is contractual. But once appointed to a post, the Government servant
acquires a status and his righ ts and obligations are no longer determined by
consent of both parties, but by the statute or statutory rules which may be
framed or altered unilaterally by the Government. The emolument of a
Government servant and his terms of service are governed by t he terms of the
statute or statutory rules which may be altered unilaterally by the Government
without the consent of the employee. In this case, we do not find any
alteration of the terms and conditions of the emoluments. It was only on an
erroneous i nterpretation of the grant of increment in the form of incentive
as forming part of the pay that enabled the respondent-employees and other
such employees to get their D.A. fixed including the emoluments. The
authorities have failed to see that the incr ements were attached to the
person and subject to his acquiring the qualification and therefore, it could
not have been treated as pay. As early as on 27.10.1989, it was clearly
specified and clarified that these additional increments will not count as pay
for the purpose of calculating the allowances and treated as emoluments for
the purpose of pension and gratuity. The impugned communication of the year
1996 is nothing but a reiteration of the earlier stand of the Board which was
in consonance with the grant of incentive in the form of increment subject to
the acquisition of the qualification prescribed. This clarification, readwith
the definition of ‘pay’ and on consideration of other circumstances, we are
clear in our mind that the increments ca nnot be treated as part of the basic
pay, but only as a separate element which will not count for the purpose of
calculating the D.A., etc.
13. Learned senior counsel Mr. K. Chandru referred to the judgment
of a learned single Judge of the Andhra Pradesh High Court in GUNTUR DISTRICT
CO-OPERATIVE CENTRAL BANK EMPLOYEES’ ASSOCIATION VS. GENERAL MANAGER [1992
(1) S.L.R. 465], wherein it was held that increment has to be treated as
basic pay. In that case, the learned Judge found, by reading the various
Government Orders, that the intention of the Government is to treat the
increment given for family planning as part of the basic pay and is part of
the normal increment which may be given to an employee. Whereas, in the case
on hand, right from the beginning,t he Railway Administration did not treat,
as is evidenced by their communications, these increments as part of basic
pay.
14. The judgment of the Supreme Court in BHAGWAN SHUKLA VS. UNION OF
INDIA [1995 (2) L.L.J. 726] holding that reduction of pay and refixation
after twenty years to undo the earlier mistake cannot be done without an
opportunity. On facts, this judgment m ay not be of assistance to the
respondent-employees. That was a case where, by a specific order, the pay
scale of the appellant was refixed by reducing the basic pay with
retrospective effect and in those circumstances, that was held by the Supreme
Cou rt as illegal.
15. Learned senior counsel for the respondent-employees referred to
another judgment of the Constitution Bench of the Supreme Court in D.S.
NAKARA & OTHERS VS. UNION OF INDIA [1983 (1) L.L.J. 104] in support of his
argument of discrimination. The Sup reme Court, in that case, held that
pensioners form a class and their computation cannot be on a different formula
affording unequal treatment solely on the ground that some retired earlier and
some retired later. In that case, all pensioners, whenever they required,
were to be covered by a liberalised pension scheme which would be operative
from a specified date. This judgment also, in our view, will have no
application to the facts of the present case.
16. Recoveries were sought to be made only against the amount which
was over-paid prior to the communication dated 8.5.1996 which was questioned
before the Tribunal. Though the Stock Verifiers are ineligible to count the
increments for their basic pay, right from its inception, the Railway Board
has chosen to give effect to it strictly from 8.5.1996. Therefore, the
erroneous fixation, if any, made earlier and the amounts paid on that basis
were not sought to be recovered. Once we have found that the communication
dated 8.5.1996 is legal and in accordance with law, the Board is entitled to
enforce the same. The respondent-employees cannot insist that the wrong
interpretation and the erroneous orders should be applied and continued in
their favour f or ever.
17. For all these reasons, the order of the Tribunal is liable to be
set aside and is hereby set aside. Writ Petition 4956 of 1999 is, therefore,
allowed. However, there will be no order as to costs. Consequently, all
other connected writ petitions, n amely W.P. Nos.12839 to 12843 of 2001 and
W.P. No.13717 of 2001, challenging the order of the Tribunal quashing the
consequential letters and orders of the Railway Board are also allowed. All
the connected W.M.Ps. are closed.
Index : Yes (P.S.M.J.) (F.M.I.K.J.) Internet : Yes 23..04..2002 ab Sd/.. Assistant Registrar // TRUE COPY // Sub Assistant Registrar (C.S.) To 1. The Chairman, Railway Board, Rail Bhavan, New Delhi. 2. The General Manager, Southern Railway, Park Town, Madras-3. 3. The Financial Adviser & Chief Accounts Officer/ Furnishing ICF, Chennai-38. 4. The Senior Accounts Officer (WLS), Southern Railway, Golden Rock, Tiruchirappalli. 5. The Registrar, Central Administrative Tribunal, Chennai Bench, Chennai-104. P. SHANMUGAM, J. and F.M. IBRAHIM KALIFULLA, J. Order in W.P. Nos.4956 of 1999, 12839 to 12843 and 13717 of 2001.