{"id":153241,"date":"1996-03-27T00:00:00","date_gmt":"1996-03-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/o-k-udayasankaran-ors-vs-union-of-india-ors-on-27-march-1996"},"modified":"2018-07-27T18:14:14","modified_gmt":"2018-07-27T12:44:14","slug":"o-k-udayasankaran-ors-vs-union-of-india-ors-on-27-march-1996","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/o-k-udayasankaran-ors-vs-union-of-india-ors-on-27-march-1996","title":{"rendered":"O.K. Udayasankaran & Ors vs Union Of India & Ors on 27 March, 1996"},"content":{"rendered":"
Supreme Court of India<\/div>\n
O.K. Udayasankaran & Ors vs Union Of India & Ors on 27 March, 1996<\/div>\n
Equivalent citations: 1996 AIR 1901, \t\t JT 1996 (4)\t420<\/div>\n
Author: M S V.<\/div>\n
Bench: Manohar Sujata (J)<\/div>\n
           PETITIONER:\nO.K. UDAYASANKARAN & ORS.\n\n\tVs.\n\nRESPONDENT:\nUNION OF INDIA & ORS.\n\nDATE OF JUDGMENT:\t27\/03\/1996\n\nBENCH:\nMANOHAR SUJATA V. (J)\nBENCH:\nMANOHAR SUJATA V. (J)\nAHMADI A.M. (CJ)\nVENKATASWAMI K. (J)\n\nCITATION:\n 1996 AIR 1901\t\t  JT 1996 (4)\t420\n 1996 SCALE  (3)383\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t\t    WITH
\n\t   WRIT PETITION (CIVIL) NO. 437 OF 1993
\nEx-servicemen LIC Employees
\nAssociation and Ors.\n<\/p>\n
V.\n<\/p>\n
Life Insurance Corporation
\nof India & ors.\n<\/p>\n
\t\t      J U D G M E N T
\nMrs. Sujata V. Manohar, J.\n<\/p>\n
     Leave granted in S.L.P..(C) No.2158 of 1992.
\n     The appellants  are the employees of the Life Insurance
\nCorporation of\tIndia at  Kozhikode. They  are ex-servicemen
\nwho were  re-employed by  the Life  Insurance Corporation of
\nIndia after  their discharge from military service. There is
\na gap  of more than three years between their discharge from
\nmilitary service and their appointment in the Life Insurance
\nCorporation of\tIndia. The  dispute raised  in\tthis  appeal
\nrelates to  the fixation of salary of these ex-servicemen on
\ntheir re-employment  in the  Life Insurance  Corporation  of
\nIndia. Along with this appeal. Writ Petition No. 437 of 1993
\nhas also  been heard.  This petition  is filed\tby  the\t Ex-
\nservicemen Life\t Insurance Corporation Employees Association
\nand the\t issue raised in this petition is identical with the
\nissue raised  in the  appeal. The  dispute  relates  to\t ex-
\nservicemen who\thave been  appointed after  a gap  ‘of three
\nyears or  more from their discharge from military service to
\nthe life  insurance Corporation\t of India  and\tpertains  to
\nthose who have been so appointed after 1.1.1988.\n<\/p>\n
     The  dispute   pertains  to   the\t interpretation\t  of
\ninstructions dated  2nd of June. 1989  issued by the Central
\nOffice of  the Life  Insurance Corporation of India relating
\nto re-employment  of ex-servicemen  in\tthe  Life  Insurance
\nCorporation and\t their pay fixation. The relevant Paragraphs
\nof these Instructions are set out below::\n<\/p>\n
     ” 3. Pay Fixation on Re-employment:
\n     3.1: Basic\t Salary of a re-employed
\n     Ex-serviceman shall  be  fitted  at
\n     the minimum  of the  scale in which
\n     he is  appointed. However,\t if  the
\n     gross salary  as per  ‘Y’ below  at
\n     the minimum  of the  scale does not
\n     produce an\t amount equal to or more
\n     than the last drawn gross salary as
\n     per  ‘X’\tbelow  in   the\t Defence
\n     Services. additional increment\/s as
\n     may be  necessary, over  minimum of
\n     the scale\tshall be allowed to make
\n     up\t the   difference   and:   thus:
\n     provide  protection   to  the  last
\n     drawn gross salary.<\/p><\/blockquote>\n
     3.2:  If\tin  exceptional\t  cases,
\n     fitment, even at the ceiling of the
\n     entry grade  does not  provide full
\n     protection,   personal    allowance
\n     shall  be\t granted  which\t may  be
\n     absorbed against future increase in
\n     emoluments.<\/p><\/blockquote>\n
     3.3:  ‘X’\ti.e.  last  drawn  gross
\n     salary in\tthe Defence  Service  at
\n     the time  of release  shall be  the
\n     aggregate\t  of\tthe    following
\n     components:\n<\/p><\/blockquote>\n
     i) Pay as defined in sub-para 3(ix)
\n\t  of the  Dept. of  Personnel  &
\n\t  Training O.M.No.  3\/1 \/85-East
\n\t  ( P  II )  dated  31\t.7.1986.
\n\t  Relevant extracts  of the O.M.
\n\t  are given in the Appendix ‘A’;\n<\/p><\/blockquote>\n
     ii)  Dearness Allowances:\n<\/p><\/blockquote>\n
     iii) Additional Dearness Allowance;\n<\/p><\/blockquote>\n
     iv)  Interim Relief;\n<\/p><\/blockquote>\n
     v)\t  City Compensatory Allowance;\n<\/p><\/blockquote>\n
     vi)  Compensation\t in  lieu     of
\n\t  Quarters (  C .  I. L\t . o . )
\n\t  House Rent Allowance;\n<\/p><\/blockquote>\n
     vii) Ration Allowance .
\n     3.4:  ‘Y’\t i.e.  gross  salary  in
\n     L.I.C. shall  be the  aggregate  of
\n     the following
\n     i )  Basic salary\tin which the Ex-
\n\t  servicemen is re-employed;
\n     ii ) Dearness  Allowance;\n<\/p><\/blockquote>\n
     iii) House Rent Allowance:\n<\/p><\/blockquote>\n
     iv) City Compensatory Allowance:
\n     3.5:  Components\tof  last   drawn
\n     salary  in\t  the  Defence\tServices
\n     (‘X’) including  such allowances as
\n     are indicated at (3.3) above are to
\n     be taken  into account on the basis
\n     of discharge  certificate\/Last  Pay
\n     certificate   of\tthe   individual
\n     employees…………..
\n     3.6: The  component of pension will
\n     not be considered for pay fixation.
\n     3.7:  If\tthe  Ex-serviceman   was
\n     reemployed\t within\t  a  period  not
\n     exceeding 3  years from the date of
\n     discharge from the Defence services
\n     ‘X’ (Last\tDrawn Salary  in Defence
\n     Services} to  be compared\tshall be
\n     as drawn  on the date of release of
\n     the Ex-serviceman\twhereas\t the  Y’
\n     (starting salary  in L.I.C.)  to be
\n     compared shall be as on the date of
\n     re-employment in L.I.C.
\n     3.8:  If.\t however,  he\twas  re-
\n     employed  more   than  three  years
\n     after the\tdate of\t discharge  from
\n     Defence Services  ‘Y’ Salary  to be
\n     compared shall also be as obtaining
\n     on\t  the\t date\tof    discharge.
\n     Corresponding fitment  may then  be
\n     given in  the revised  scale, where
\n     necessary applicable at the time of
\n     re-employment of the Ex-servicemen.
\n     Example:………………………
\n\t  The  fitment\tis  to\tbe  done
\n     nationally and  actual benefit  may
\n     be given  from 1-1-1988 as shown in
\n     para 4 below.\n<\/p><\/blockquote>\n
\t  If the basic salary determined
\n     on such  comparison results  in the
\n     same or lower than the basic salary
\n     at which the employee was fitted on
\n     the  date\t of  re-employment   the
\n     existing\tsalary\t  fitment   will
\n     continue without any change.<\/p><\/blockquote>\n
     4. If  the basic  salary determined
\n     on such  comparison is  higher than
\n     the  basic\t  salary  at  which  the
\n     employee was  fitted on the date of
\n     re-employment\t     incremental
\n     difference that would emerge out of
\n     Such  fitment  would  be  added  to
\n     individual’s basic\t pay as\t on 1-1-\n<\/p><\/blockquote>\n
     1988    and     arrears\treleased
\n     accordingly from 1-1-1988 only.
\n     Example:…………………..\n<\/p><\/blockquote>\n
     5.\t  FITMENT    OF\t   EX-SERVICEMEN
\n     APPOINTED ON OR AFTER 1-1-19988
\n\t  Fitment in   these  cases will
\n     be as  per\t formula  given\t in  3.1
\n     above from\t 1-1-1988 or the date of
\n     appointment   in\t the\tindustry
\n     whichever is later.\n<\/p><\/blockquote>\n
     6.OPTION-CUM-CONSENT LETTER:
\n\t  An  option-cum-consent  letter
\n     in the  enclosed  format  (Appendix
\n     ‘B’) should  be obtained  from each
\n     existing\tEx-serviceman\temployee
\n     opting fitment  of\t salary\t as  per
\n     these instruction.\n<\/p><\/blockquote>\n
     7.\t FITMENT   OF  SALARY\tOF   NEW
\n     ENTRANTS:\n<\/p><\/blockquote>\n
\t  Fitment of  salary of\t all Ex-
\n     servicemen\t  appointed    in    the
\n     industry\thenceforth    shall   be
\n     governed by these instructions.”<\/p><\/blockquote>\n
     The dispute  relates to  the application  of Paragraphs
\n3.7 and\t 3.8 to\t ex-servicemen who have been employed by the
\nlife insurance\tCorporation after 1.1.1988. According to the
\nlife insurance Corporation the benefit of pay fixation under
\nParagraphs 3.7\tand 3.8\t was given only to ex-servicemen who
\nwere already  employed by  the\tlife  Insurance\t Corporation
\nprior to  1.1.1988. This  benefit is  not available to those
\nex-servicemen who  have\t been  employed\t in  Life  Insurance
\nCorporation after 1.1.1988.\n<\/p>\n
     To resolve\t the dispute  it is necessary to examine the
\nscheme framed  by the  Life Insurance  Corporation on 2nd of
\nJune. 1989.  for pay  fixation which  is in  supersession of
\nearlier existing  scheme. Paragraph 3 deals with fixation of
\npay on\tre-employment of  ex-servicemen\t in  Life  insurance
\nCorporation.   Since\tex-servicemen\tincluding   released
\nemergency commissioned\tofficers. short service commissioned
\nofficers and  retrenched commissioned  officers are relieved
\nfrom military  service at a comparatively young age, certain
\nfacilities have\t been given  to them  for  re-employment  in
\nvarious Government  and Public Sector Undertakings including
\nthe Life insurance Corporation.\n<\/p>\n
     Under Paragraph  3.5  when\t the  ex-serviceman  is\t re-
\nemployed by  the Life  Insurance Corporation  he is normally
\nfitted at the minimum  of the scale for the post to which he
\nis appointed.  However, if  his last  drawn gross  salary in
\nDefence Service\t as specified in Paragraph 3.3 was more than
\nthe   gross salary  which he  will  get\t in  Life  Insurance
\nCorporation as\tspecified in  paragraph 3.4 his salary to he
\npaid in\t Life Insurance\t Corporation is\t adjusted so that he
\ndoes not  get less  than his  last drawn  pay in the Defence
\nServices. This\tadjustment is  done  as\t per  Paragraph\t 3.1
\nadding to  his minimum of the scale additional increments as
\nmay be\tnecessary to make up the difference so that his last
\ndrawn gross  salary is protected, This adjustment is made so
\nas to  protect the last drawn salary of ex-servicemen in the
\ncase of\t all re-employed  ex-servicemen\t whether  they\twere
\nappointed prior to 1.1. 1988 or subsequent to 1.1.1988.\n<\/p>\n
     Paragraph\t3.7,   however,\t provides  that\t if  an\t ex-
\nservicemen was\tre-employed within three years from the date
\nof his\tdischarge from\tDefence Services then his last drawn
\nsalary in  the Defence\tServices will  be  compared  to\t his
\nstarting salary\t on the\t date of  his re-employment  in life
\nInsurance Corporation so as to adjust the salary first drawn
\nby him\ton the date of re-employment to equal the last drawn
\nsalary.\n<\/p>\n
     In other  words, he  is governed  by paragraphs  3.1 to
\n3.6. Paragraph 3.8 provides that if an ex-servicemen was re-
\nemployed  more\tthan  three  years  from  the  date  of\t his
\ndischarge from\tDefence Services  his last  drawn salary  in
\nDefence Services  shall be  compared with his salary that he
\nwould  have   Been  entitled   to  in\tthe  Life  Insurance
\nCorporation had\t he been  immediately re-employed. The basic
\nsalary\tthat   he  would   have\t drawn\t in  Life  Insurance
\nCorporation on\tthe date of his discharge is thus determined
\nand on\tthe basis of such a salary. the salary which the ex-
\nserviceman will\t get on the actual date of his re-employment
\nby Life\t Insurance Corporation is nationally worked out. The
\nfigure so  arrived at is the basic salary Which will be paid
\nto the\tex-serviceman on  his re-employment.  Paragraph\t 3.8
\nalso provides that if in the interregnum any revision of pay
\nscales takes  place in\tLife Insurance\tCorporation the\t ex-
\nserviceman will\t get the benefit of such revision in respect
\nof  the\t  pay  scale  so  nationally  worked  out.  However,
\nParagraph 3.8 clearly provides that such a fitment has to be
\nmade only  nationally and any actual benefit so arising will
\nbe given to the existing ex-servicemen only from 1.1.1988 as
\nshown  in  Paragraph  4.  Paragraph  4\tsets  out  that\t any
\nincremental difference that would emerge out of such fitment
\nwould be  added to  the ex-serviceman’s basic pay as on 1.1.
\n1988 and arrears would be released accordingly from 1.1.1988
\nonly.\n<\/p>\n
     A perusal\tof Paragraph  3.8 and  Paragraph  4  clearly
\nbrings out the fact that the fitment under Paragraph 3.8 has
\nto be  done only  in the  case\tof  ex-servicemen  who\twere
\nemployed prior\tto 1.1.1988.  Paragraph 3.8  itself  clearly
\nprovides that  the benefit  will be given to an existing ex-
\nserviceman.  The  existing  ex-serviceman.  though  employed
\nprior to 1988 will get actual benefit only from 1.1.1988 and
\nnot for\t any date  prior thereto. Such a provision would not
\nhave been  required had\t this concept  of  notional  fitment
\nunder  Paragraph  3.8  not  been  made\tapplicable  only  to
\nexisting  ex-servicemen.   Paragraph  also   says  that\t the
\nincremental difference\twill be\t added to  the\tindividual’s
\nbasic pay  as on  1.1. 1988  and arrears  will\tbe  released
\naccordingly.  The   entire  scheme   of\t Paragraph  3.8\t and
\nParagraph 4. therefore. deals with existing ex-servicemen or
\nex-servicemen who  had been employed prior to 1.1. 1988. The
\nexamples which\thave been  annexed to Paragraph 3.8 are also
\nall examples  of ex-servicemen\twho  joined  Life  Insurance
\nCorporation   prior to\t1.1.1988. thus\tclearly bringing out
\nthe intention  to cover\t under Paragraph  3.8  existing\t ex-
\nservicemen who\thad been in the employment of Life Insurance
\nCorporation prior  to 1.1.1988 The example which is appended
\nto Paragraph  4 also  deals with  a case  of  an  servicemen
\nemployed long prior to 1.1.1988.\n<\/p>\n
     Paragraph 5  makes this position amply clear by setting
\nout that  ex-servicemen who  are  appointed  after  1.1.1988
\nshall be  fitter from\tshall be fitted as per formula given
\nin Paragraph  3.1 above\t either from 1.1.1988 or the date of
\nappointment which ever is later. Paragraph 7 again clarifies
\nthis position  by saying  that the  fitment of salary of all
\nex-servicemen appointed\t in the industry henceforth shall be
\ngoverned by these instructions. The use of the past tense in
\nreferring  to\tthe  employment\t of  ex-servicemen  by\tLife
\nInsurance Corporation  in Paragraphs  3.7 and  3.8  is\talso
\nindicative of  the fact\t that it refers to ex-servicemen who
\nwere employed in the Life Insurance Corporation prior to the
\ncoming into force of the new scheme.\n<\/p>\n
     The reason\t for giving  the benefit of Paragraph 3.8 to
\nex-servicemen  who  were  employed  by\tthe  Life  Insurance
\nCorporation prior to 1.1.1988 is referred to in the counter-
\naffidavit filed on behalf of respondents 1 and 2 in the writ
\npetition as  also in  the affidavit  filed on  behalf of the
\nrespondents in\tthe appeal.  Normally, whenever\t a person is
\nre-employed in\tGovernment service  or public  service, when
\nthe process  of fixation  of  his  pay\tis  undertaken,\t the
\ncomponent of  pension which is received by the employee from
\nhis earlier  employer is always deducted and adjusted in the
\nsalary which  he gets  on re-employment. This was being done
\nin the case of ex-servicemen re-employment by Life Insurance
\nCorporation prior  prior at to the coming into operation  of
\nthe new\t  scheme.  The Life Insurance Corporation decided to
\ntreat  its   ex-servicemen  employees\tmore  liberally\t  by
\nproviding under\t the new  scheme in  Paragraph 3.6  that the
\ncomponent  of\tpension\t will  not  be\tconsidered  for\t pay
\nfixation. The  appellants herein  as also  all ex-servicemen
\nwho have been employed after 1.1.1988 have thus been allowed
\nto retain their pension from Defence Services. The pay which
\nthey are  getting in Life Insurance Corporation on the basis
\nof the\tFormula fixed  under Paragraph 3.1 is in addition to
\nthe pension  which they\t are vetting. This benefit. however.
\nwas  apparently\t  not  available   to  existing\t  reemployed
\nservicemen prior  to 1.1.1988.\tAs a  result of negotiations
\nwhich took  place between the Life Insurance Corporation and
\nthe employees. it was decided to compensate the existing re-
\nemployed ex-servicemen\twho had\t lost the benefit of service
\nin Life\t Insurance Corporation\tfor a period exceeding three
\nyears after  their  discharge  by  giving  them\t a  notional
\nfitment in the Life Insurance Corporation  pay scales in the
\nmanner set  out in  Paragraph 3.8.  There was no question of
\ngiving such  a benefit\tto ex-servicemen employed after 1.1.
\n19.88.\n<\/p>\n
     Dr. Dhawan,  learned  counsel  appearing  for  the\t ex-
\nservicemen has\temphasized  the\t fact  that  an\t option-cum-
\nconsent letter\tunder Paragraph\t 6 was\talso taken  from ex-
\nservicemen employed  after 1.1.1988. This is disputed by the
\nrespondents.  However.\tParagraph  6  itself  quite  clearly
\nprovides  that\t the  option-cumconsent\t letter\t has  to  be
\nobtained from  each existing  ex-serviceman employee  opting
\nfitment\t of   salary  as  per  those  instructions.  It\t is.
\ntherefore. quite  clear that  the option  is to be exercised
\nonly by\t existing ex-servicemen\t employees of Life Insurance
\nCorporation,  thus   reinforcing  the\tcontention  of\t the
\nrespondents  that  fitment  as\tper  Paragraph\t3.8  is\t not
\navailable to  ex-servicemen re-employed\t in  Life  Insurance
\nCorporation after  1.1.1988. The  respondents have  admitted
\ntheir mistake in asking for such consent letter if they have
\ndone so. They have also admitted that they made a mistake in
\ngranting to  the three\tappellants before  us the benefit of
\nParagraph 3.8  although they  were engaged  after  1.1.1988.
\nThey have  sought to correct this mistake by their letter of
\n16.1.1991 by  recalculating their salary from 1991. They are
\nentitled to reduce the pay of the appellants on the basis of
\nthe correct  fitment to\t be given  to the  appellants in the
\nlight of  the instructions  of 2nd  of June,  1989. The High
\nCourt was,  therefore right  in rejecting the contentions of
\nthe appellants.\t The High  Court has  also directed that for
\nrecovery of  excess amount  so paid  reasonable\t instalments
\nshould be  given to the appellants so that undue hardship is
\nnot caused to them.\n<\/p>\n
     In these  circumstances. we  see no reason to interfere
\nwith the findings given by the Kerala High Court. The appeal
\nand the\t petition are.\ttherefore, dismissed. However. there
\nwill be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India O.K. Udayasankaran & Ors vs Union Of India & Ors on 27 March, 1996 Equivalent citations: 1996 AIR 1901, JT 1996 (4) 420 Author: M S V. Bench: Manohar Sujata (J) PETITIONER: O.K. UDAYASANKARAN & ORS. Vs. RESPONDENT: UNION OF INDIA & ORS. DATE OF JUDGMENT: 27\/03\/1996 BENCH: MANOHAR SUJATA V. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-153241","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nO.K. 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