Holding

The Court held that the 11 September 2001 circular merely clarifies the 7 June 1999 circular, does not amend it, and that NPA must not be taken into account for stepping‑up pension, thereby upholding the circular’s validity and dismissing the petitions.

Summary

The petitioners, former Army Medical, Dental and Veterinary officers who retired before 1 January 1996, challenged the Ministry of Defence’s clarification circular dated 11 September 2001 which excluded the non‑practising allowance (NPA) from the "minimum pay" used to step‑up pensions under the earlier circular of 7 June 1999. The Court examined the language of the 1999 circular, held that it only guaranteed a minimum pension of 50 % of the initial pay in the 1996 revised pay scale and that NPA, already accounted for in the original pension calculation, could not be added again for the step‑up. The 2001 circular was therefore deemed a clarification, not an amendment, and its validity was upheld. Consequently, the petitions seeking to quash the clarification and to prevent recovery of excess pension paid after its issuance were dismissed, while the State was barred from recovering any excess paid between the two circulars.

Issues considered

Whether the 11 September 2001 circular is a clarification or an amendment of the 7 June 1999 circular.
Whether excluding NPA from the "minimum pay" for stepping up pension creates discriminatory treatment between pre‑1996 and post‑1996 retirees.
Whether the State can rely on the Delhi High Court’s decision in the civilian medical officers’ cases to extend the same benefit to defence medical officers.
Whether the State may recover excess pension paid to the petitioners before the clarification circular.

Subjects

pensionnon‑practising allowanceMinistry of Defence circularstepping up pensionArticle 14discriminationres judicataestoppeladministrative lawlegitimate expectationfamily pension

Judgment

A COL. (REID.) B.J. AKKARA

THE GOVT. OF INDIA AND ORS.
-
OCTOBER I0, 2006

B (G.P. MATHUR AND R.V. RA VEENDRAN, JJ.]

Service Law:

Pension-Stepping up of pension under Ministry of Defence Circular
C dated 7.9.99-Whether non-practising allowance should be taken into account
for stepping up of pension pre 1.1.96 ritirees-Claim regarding-Armed
Forces-Army-Medical, Dental and Veterinary Officers-Retired prior to
1.1.1996-Government ofIndia, Ministry ofDefence Circular dated 7.9.1999-
/nterpretation of-Clarification by circular dated 11.9.2001-Validity of-
D Held, Circular dated 7. 6.1999 merely stepped up the pension to 50% of the
minimum pay in the revised scale ofpay introduced w.e.f 1.1.1996 of the rank
held by such pensioner, where his pension was less-Since NPA had already
been taken into account at the time of calculating the pension of pre-1996
retirees, NPA is not to be taken into account again for stepping up of their
pension as per Circular dated 7.6.1999-Validity of circular dated I 1.9.2001
E is upheld-The two Circulars relate not only to pension but also family
pension and this decision will apply to family pension also-Constitution of
India, 1950-Article 14-Res judicata-Estoppel-Administrative Law-
Principles of legitimate expectation.

Words and Phrases:
F
Expression 'not less than 50% of the minimum pay in the revised scale
of pay' as occurring in Government of India, Ministry of Defence Circular
dated 7.6.1999-Meaning of

The petitioners served as Medical, Dental and Veterinary Officers in
G the Army under the Ministry of Defence and retired prior to 1.1.1996. The
non-practising allowance (NPA) granted to them while in service was taken
into account for calculating their pension. The Circular dated 7.6.1999
provided that w.e.f. 1.1.1996 pension of all Armed Forces Pensioners
irrespective of their date of retirement would not be less than 50% of the
H 58
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA 59

minimum pay in the revised scale of pay introduced w.e.f. t. l.1996 of the rank A
held by the pensioner. By Circular dated 1t.9.2001 it was clarified that NPA
was not to be taken into consideration after re-fixation of pay on notional basis
on t.l.1996 and that it was also not to be added to the minimum of the revised
scale of pay as on 1.1.1996 in cases where consolidated pension was to be
stepped upto 50% in terms of the Circular dated 7.6.1999. Consequently, B
pension of the petitioners was revised by excluding the NPA element, by issuing
corrigenda to their PPOs. The petitioners filed writ petitions in various High
Courts praying for quashing of the circular dated 11.9.2001 and the
"'· consequential corrigenda and for a direction to the respondents to take into
account the NPA at the rate of 25% of the basic pay including rank pay as
was being done till the issue of the Circular dated 11.9.2001. On the C
applications filed by the Union of India, all the writ petitions were transferred
to the Supreme Court.
..
It was contended for the pensioners that the words "minimum pay" used
in the Circular dated 7.6.1999, should, as regards the Medical Officers, be
interpreted as minimum pay in the revised scale plus NPA as in their case D
the term 'pay' means and includes basic pay plus NPA; that adding NPA to
"'}
the basic pay for arriving at the pension of those who retired on or after
1.1.1996 and not to add NPA in the case of pre-1996 retirees amounts to
hostile discrimination violating Article 14 of the Constitution and the
principles relating to pension laid down in the judgments of the Supreme
Court; and that the respondents having accepted and implemented the decision E
of the Delhi High Court on a similar issue are required to extend a similar
treatment to Defence Service Medical Officers also.

Dismissing the petitions, the Court

HELD: 1.1. The Circular dated 7.6.1999 neither prescribes the F
requirements/qualifications for entitlement to pension nor the method of
determination of pension. It only effectuates the President's decision that the
pension (which has already been determined in accordance with the applicable
rules/orders) irrespective of the date of retirement, shall not be less than
50% of the minimum pay in the revised scales of pay introduced with effect
from l.1.1996. The President's decision given effect by Circular dated 7.6.1999 G
· only extends to all pre 1996 retirees, who did not have the benefit of fixation
of pension with reference to the revised pay scales which came into effect on
1.1.1996, the benefit of the said revised pay scales, albeit in a limited manner.
In so doing, it also puts those who retired on or after 1.1.1986 and pre-1986
retirees on par and on a common platform, removing the disparity, if any, in H
60 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A their pensions. 170-B-El

1.2. The pension of those who retired prior to 1.1.1996, was rationalized
by directing that the1r pension shall be the aggregate of (a) existing pension;
(b) dearness relief; (c) interim relief I; (d) interim relief II, and (e) fitment
weightage of 40% of the existing pension. The 'existing pension' referred to
B therein was the pension which had been arrived at by calculating 50% of the
average pay, NPA and Rank Pay during the last 10 months of service. The
Circular dated 7.6.1999, merely stepped up the pension (for a qualifying
service of 33 years) to 50% of the minimum pay in the revised scale of pay
introduced with effect from l.l.1996 of the rank held by such pensioner, where
his pension was less. (70-F-G; 71-BI
c 1.3. The contention that pre-1996 retirees and post 1.1.1996 retirees
are being treated differently, is untenable. The basis for calculating the pension
in respect of those who retired prior to 1.1.1996, and those retired on or after
1.1.1996 happens to be the same. In the case of those retiring on or after
I. I.l 996, NPA is added to their basic pay to determine their pension and not
D for stepping up of their pension. Their basic pay in the revised scale of pay
plus NPA will certainly be more than the minimum pay in the revised scale of
pay, and therefore, in their cases, the question of stepping up will not aris,e.
On the other hand, as the pension of pre-1996 retirees was based on the basic
pay under the old pay scale plus NPA, and as the old pay scale was much less
E than the 1996 revised pay scale, their pension required to be stepped up. In
their case as NP A was already added while determining their pension, the
question of adding it up again for the purpose of stepping up the pension does
not arise. The extent to which the existing pension should be stepped up is
clearly specified in the Circular datd 7.9.1999 as "minimum pay in the revised
scale of pay". "Minimum pay in the revised scale of pay" refers only to the
F initial pay in the revised scale of pay and not anything more. The words used
do not give room for any confusion or doubt When the circular dated 7.6.1999
used the words "50% of the minimum pay in the revised scale of pay, it
referred to 50% of the initial pay in the revised scale of pay. In the Circular,
the words used are "not less than 50% of the minimum pay in the revised
G scale of pay", and not "not less than 50% of the minimum pay in the revised
scale of pay plus NPA". When the language used is clear and unambiguous
and the intention is also clear, it is not permissible to add words to the Circular
dated 7.6.1999. 170-D; 71-D; 72-E; G; 75-Fl
State of Maharashtra v. Digambar, (19951 4 SCC 683, relied on.

H D.S. Nakara v. Union of India, (1983) 1 SCC 305; Krishna Kumar v.
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA 61

Union of India, 119901 4 SCC 207; Indian Ex-Services League v. Union of A
India, 11991! 2SCC104; V Kasturiv. Managing Director, State Bank of India,
1199818 SCC 30 and Union of India v. Dr. Vijayapurapu Subbayamma, 120001
7 sec 662, referred to.

t.4. What the circular dated 7.6. l 999 intended to extend by way of
benefit to all pensioners was a minimum pension, that is, 50% of the minimum B
pay in the 1996 revised scale of pay. NPA has no part to play in the minimum
that is sought to be assured. NPA has relevance only for initial fixation of
pension and not for stepping up pension under Circular dated 7.6. l 999. Due
to a misinterpretation, NPA was included for the purpose of giving the benefit
of stepping up the pension in the case of retired medical officers. The fact C
that NPA had already been taken into account while calculating the "existing
pension" of the medical officers who retired before t.1.1996 was lost sight
of. The fact that NPA is part of 'pay' and not part of 'basic pay' was also
overlooked. Therefore, it became necessary to issue the clarification, which
was done by circular dated 1t.9.2001, clarifying that it was impermissible to
again add NPA to 'the minimum pay in the revised pay scale' for the purpose D
of stepping up the pension. Circular dated l 1.9.2001, is only a clarification
to correct the wrong interpretation of the circular dated 7.6.1999. It neither
amends nor modifies the circular dated 7.6.1999. [72-B, F-GI

2. A particular judgment of the High Court may not be challenged by
the State where the financial repercussions are negligible or where the appeal E
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 realized, the State is not prevented p
.> or barred from challenging the subsequent decisions or resisting subsequent
writ petitions, even though judgment in a case involving similar issue was
allowed to reach finality in the case of others. 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 G
of the circular dated 29.10.1999 (corresponding to the Defence Ministry
circular dated 1 t.9.2001) has been upheld and that decision has attained
finality will not come in the way of State defending or enforcing its circular
dated 11.9.2001. 177-E-G, 78-A]
H
62 SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R.

A 3. In the instant case, the petitioners are not guilty of any
misrepresentation or fraud in regard to the excess payment. NPA was added
-
to minimum pay, for purposes of stepping up, due to a wrong understanding
by the implementing departments. Therefore, respondents shall not recov1~r
any excess payments made towards pension in pursuance of circular dated
B 7.6.1999 till the issue of the clarificatory circular dated 11.9.2001. In so far
as any excess payment made after the circular dated 11.9.2001, obviously the
Union oflndia will be entitled to recover the excess as the validity of the said
circular has been upheld and as pensioners have been put on notice in regard
to the wrong calculations earlier made. But it is not proposed to award interest
on the amounts to be refunded. (79-A-B, 80-D(
c Sahib Ram v. State of Haryana, (1995( Suppl.I SCC 18, Shyam Babu
Verma v. Union of India, (1994( 2 SCC 521; Union of India v. M. Bhaskar,
(1996( 4 SCC 416 and V. Gangaram v. Regional Joint Director, AIR 1997 SC
2776, relied on.

D Union of India v. Sujatha Vedachalam, (2000( 9 SCC 187, distinguished.

Style (Dress Land) v. Union Territory, Chandigarh. (1999( 7 SCC 89,
Ouseph Mathai v. M. Abdul Khadir, (2002( I SCC 319; and Rajasthan
Housing Board v. Krishna Kumari, (2005) 13 SCC 151, cited.

E 4. In view of the above, the challenge to the validity of the circular dated
11.9.2001 is rejected. The Circulars dated 7.6.1999 and 11.9.2001 relate not
only to pension but also family pension, and this decision in respect of pension
will apply to family pension also. (80-F-G]

CIVIL ORIGINAL JURISDICTION : Transferred Case Civil No. 72 of
F 2004.
Under Article 226 of the Constitution of India.

WITH

G T.C. (Civil) Nos. 74/2004, 75-12812004, 129-140/2004, 141/2004, 212005, 141
2005, 1512005, 16/2005, 17/2005, 18/2005, 28/2005 and43/2005.

Dipak Kumar Jena, Minakshi Jena, Pabitra Kumar Biswal, J.M. Khanna,
Shefali Sethi, Ajay Bhalla, Abhinav Jain, Shikha Sapra, Abha R. Sharma, D.
Bharathi Reddy, S. Uday Kumar Sagar, Bina Madhavan, Pooja Gupta, Hari
H Kumar G., Lawyer's Knit & Co. Satyakam, Shiva Lakshmi, S. Wasim A. Qadri,
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA [RA VEENDRAN, .l.] 63

• Anil Katiyar, B.V. Balaram Das and Sushma Suri, Ghanshyam Joshi, A Raghunath A
and A.P. Mohanty for the appearing parties.

The Judgment of the Court was delivered by

RA VEENDRAN, J. The petitioners in all these petitions, served as
Medical, Dental and Veterinary officers in the Army Medical Corps (AMC), B
Army Dental Corps (ADC) and Veterinary Corps ('RVC') controlled by the
Ministry of Defence (for short, 'Ministry'). All of them retired prior to 1.1.1996.
These petitions involve a common question relating to calculation of their
pension.

2. Defence Ministry Circular dated 31.12.1965 barred private practice
c
(which was a traditionally enjoyed privilege) by AMC officers with effect from
1.1.1966 and conveyed the sanction of the President to the grant of a Non-
Practising Allowance ('NPA' for short) to all AMC officers irrespective of the
rank, with a stipulation that such NPA shall be treated as Pay for all purposes.
Ministry circular dated 2.11.1987 clarified that NPA will be treated as 'pay' for D
all service matters, and will be taken into account for computing Dearness
Allowance and other allowances as well as for calculation of retirement
benefits. It also prescribed the rate of NPA for AMC and ADC Officers as
Rs. 600/- for basic pay below Rs. 3000/-, Rs. 800/- for basic pay between Rs.
3000/- and Rs. 3700/- and Rs. 900/- for basic pay of Rs. 3700/- and above. The E
NPA was revised as 25% of basic pay and Rank pay, with effect from 1.1.1996
(subject to the condition that pay plus NPA does not exceed Rs. 29,500/-).
G.O. No. 2/S/98, issued by the Ministry, which implemented the Fifth Central
Pay Commission recommendations in regard to revision of pay scales, gave
the benefit of the revised NPA to all AMC, ADC and RVC officers who were
receiving NPA. F
>
3. The recommendations of Fourth Central Pay Commission in regard
to pensionary benefits for Armed Force Officers retiring on or after 1.1.1986
were implemented by Ministry Circular dated 30.10.1987. The said Circular
provided that retiring pension of all commissioned officers of the three services, G
shall be calculated at 50 per cent of the reckonable emoluments, for a qualifying
service of 33 years (to be reduced proportionately for lesser qualifying service).
: It defined 'reckonable emoluments' for purposes of retiring/service pension
as average of pay, NPA and rank pay, if any, drawn by the officer during the
last I0 months of his service. It defined the term 'pay' as basic pay in the
revised pay scales. H
64 SUPREME COURT REPORTS [2006) SUPP. 7 S.C.R.

A 4. The recommendations of the Fifth Central Pay Commission were •
accepted and accorded sanction by the President on 24.11.1997. Consequently,
the Ministry issued various circulars implementing the recommendations in
regard to pensioners.

Re : Pre 1996 Pensioners
B
The Ministry issued a Circular dated 27.5.1998 (read with earlier circular
dated 24.11.1997) rationalizing the pension of pre 1996 pensioners of the
Armed Forces, by providing that the consolidated pension of existing pre
1996 pensioners will be calculated with effect from 1.1.1996, by aggregating •.
C the following : i) the existing pension; ii) dearness relief up to CPI 1510 (i.e.
@148%, 1I1% and 96% as the case may be, of basic pension as admissible
on 1.1.J 996 vide DP & PWs OM dated 20.3.19996); iii) Interim relief I; iv)
Interim relief II; and v) Fitment weightage @ 40 per cent of the existing
pension.

D Re : Pensioners retiring on and after 1. 1.1996

The Ministry issued a circular dated 3.2.1998, providing that the retiring
pension of Armed Force Officer retiring on or after 1.1.1996 shall be calculated
at 50% of average of reckonable emoluments during the last 10 months of
E service, (reckonable emoluments being basic pay including rank pay, stagnation
increment and NPA) for a qualifying service of 33 years, to be reduced
proportionately for lesser period of qualifying service.

5. The Ministry by Circular dated 7.6.1999, conveyed the decision of the
President that 'with effect from 1.1.1996, pension of all Armed Forces pensioners
F irrespective of their date of retirement shall not be less than 50% of the
minimum pay in the revised scale ofpay introduced with effect from 1.1.1996
of the rank, held by the pensioner. ' The circular provided that the revision
of pension should be undertaken as follows in case of commissioned officers
(both post and pre I. 1.1996 retirees) :

G (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 upto 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
H of pay introduced w.e.f. 1.1.96 for the rank last held by the
Commissioned Officer at the time of his/her retirement. However,
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA [RA YEENDRAN, .1.] 65

such pension shall be reduced pro rata, where the pensioner has A
less than the maximum required service for full pension. [vide
clause 2.1 (a)]

(ii) Where the revised and consolidated pension of pre-1.1.96
pensioners are not beneficial to him/her under these orders and B
is either equal to or less than existing consolidated pension
under this Ministry's letters dated 24.11.97, 27.5.98 and 14.7.98,
as the case may be, his/her pension will not be revised to the
disadvantage of the pensioner [vide clause 4]".

The pension of the petitioners were stepped up, re-fixed and paid accordingly. C
6. The implementing departments had some doubts in regard to
interpretation of the circular dated 7.6.1999. They therefore, sought clarifications
from the Ministry on the following two issues-(i) whether NPA admissible as
on 1.1.1986 is to be taken into consideration after refixation of pay on notional D
basis as on 1.1.1986; and (ii) whether NPA is to be added to the minimum of
the revised scale while considering stepping up the consolidated pension on
1.1.1996. The Ministry issued the following clarification, vide Circular dated
11.9.2001, in regard to the Circular dated 7.6.1999:

"The undersigned is directed to refer to Ministry of Defence letter E
No. I(1 )/99/D(Pension/Services) dated 7th June, 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 1.1.96 of the post last
held by the pensioner was communicated......
F
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 Deptt. of Pension
and Pensioners' Welfare and the Department of Expenditure and it is G
clarified that NPA is not to be taken into consideration after re-fixation
of pay on notional basis 011 1.1.1986. It is also not to be added to the
minimum of the revised scale of pay as on I. I. 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 7th June, H
66 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A 1999."

[Emphasis supplied]

The Circular also din:cted the Controller General of Defence Accounts to
recalculate the pension by excluding NPA from Basic Pay and await further
B instructions regarding recovery of excess payments made with effect from
1.1.1996. In view of it, the pension of the petitioners have been revised by
excluding the NPA element, by issuing corrigenda to their PPOs.

7. The writ petitioners are aggrieved by the said clarification contained
in the Circular dated 11.9.200 I and the consequential corrigenda to their PPOs
C reducing their pension. The petitioners therefore filed writ petitions, in different
High Courts for the following reliefs :-

0) For quashing the circular dated 11.9.2001 and/or for a direction
to respondents not to give effect to the said circular.
(ii) For quashing the consequential corrigenda PPOs, issued to the
D
petitioners by the Controller of Defence Accounts.
(iii) For a direction to the respondents, to take into account, NPA at
the rate of25% of the basic pay, including Rank Pay as was being
done till the issue of circular dated 11.9.200 I, while calculating
their pension.
E
[Note : The actual prayers in each case vary slightly in form. What
is given above is the general purport of the prayers in these petitions].

The said writ petitions have been transferred to this Court, in pursuance of
applications for transfer filed by the Union of India.
F
8. To understand the grievance of the petitioners, it is necessary to give
an illustration :

Lt. General R. K. Upadhyay - (Petitioner No. 2 in W.P. No. 1845/2002
on the file of Delhi High Court corresponding to T.P.(C) No. 833/2002):
G Pension with effect from I. 7. I 99 I
Original pension sanctioned as per PPO No.M/003476/91
(50 per cent of average reckonable emoluments, that is
pay plus NPA) Rs. 4185
[Note : There was no Rank pay as it was admissible only to the Ranks
H
COL. (RETD.) B..I. AKKARA v. THE GOVT. OF INDIA [RA VEENDRAN, J.] 67

from Captain to Brigadier] A
Pension with effect from I. I. /996
Stage I : Pension as per Ministry's Circulars dated 24. //.1997
and 27.5.1998
Existing Pension Rs. 4185
B
Dearness Relief (96% of existing pension) Rs. 4018

Int. Relief I Rs. 50

Int. Relief II Rs. 419

Fitment Weightage (40% of existing pension) Rs. 1674
c
Rs. 10346

Stage II : Pension as per Ministry's circular dated 7. 6.1999

(vide corrigendum PPO No. M/MODP/030332/1999)
D
Pay scale of pensioner Rs. 7300-100-7600
} Corresponding revised scale of pay Rs. 22400-525-24500
Minimum pay in the revised pay scale Rs. 22400
Add NPA (25% of Rs. 22400) Rs. 5600

E
Total Rs. 28000

50% of the aggregate (Rs.28000) as pension Rs.14,000

Stage Ill : Pension as per Ministry's circular dated 7. 6.1999 , as p
clarified by circular dated 11.9.200/

(vide corrigendum PPO No. M/MODP/16129/ 2001)

Pay scale of Pensioner : Rs. 7300-100-7600
Revised scale of pay : Rs. 22400-525-24500
G
50% of minimum in the revised scale of pay (Rs. 22400)
as pension Rs.11,200

Thus, the pension which had been fixed at Rs. I0,346/- per month with effect
from 1.1.1996, was increased to Rs.14,000/- per month by reason of stepping
H
68 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A up as per Circular dated 7.6.1999 and later reduced to Rs.11,200/- in view of
the clarification dated 11.9.200 I.

CONTENTIONS OF PENSIONERS:

9. The petitioners have urged the following contentions :-
B
(9.1.) The Defence Service Medical Officers were earlier entitled to
private practice. The permission to private practice was withdrawn with effect
from 1.1.1966 and in lieu of it, the President sanctioned a non-practising.
allowance (NPA) with the stipulation that such NPA will be treated as 'Pay'
for all purposes. As a consequence, in respect of Medical Officers, NPA was
C always treated as part of 'pay' for purposes of pension. By Circular dated
7.6.1999, the benefit of stepping up was extended to all armed forces
pensioners, including medical officers, with effect from 1.1.1996. The benefit
extended was that irrespective of their date of retirement, their pension shall
not be less than the 50% of the minimum pay in the revised scale of pay
D introduced with effect from 1.1.1996 of the rank held by the respective
pensioner. The words "minimum pay" should be interpreted as minimum pay
in the revised pay-scale plus NPA, in so far as Medical Officers entitled to
NPA, as in their cases, the term 'Pay' wherever it occurs, means and includes
basic pay plus NPA.

E (9.2.) The Ministry had correctly understood the term "50% of the
minimum pay in the revised scale of pay," used in the circular dated 7.6.1999
as "50% of the minimum in the revised pay-scale plus NPA", and on that basis
issued modified PPOs., revising the pension. For example, in the case of Lt.
Generals, where the applicable revised pay scale was Rs.22,400-525-24,500, the
Ministry took the minimum in the revised scale of pay (Rs.22,400/-) and added
F 25% thereof (Rs.5,600/-) as NPA and arrived at the pension as Rs.14,000/-
being 50% of the aggregate sum of Rs. 28,000/-. The Circular dated 11.9.2001,
under the guise of a clarification, directed that NPA be omitted while calculating
the 50% of the minimum pay in the revised pay scales, for purposes of
stepping up. This amounted to unauthorized modification of the President's
G decision contained in the Ministry's Circular dated 7.6.1999. It is also opposed
to the rule that in the case of Medical Officers, 'Pay' includes NPA, for all
purposes. The Ministry had no authority to modify or dilute the President's
Policy decision which is given effect by Circular dated 7.6.1999.

(9.3.) In the case of Medical Officers who retired on or after 1.1.1996,
H even after the clarificatory circular dated 11.9.2001, NPA is added to the basic ;.. ~.
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA [RA VEENDRAN, J.]69

pay in the revised pay-scale and 50% of the aggregate is being paid as A
'retiring pension'. Adding NPA to the basic pay for arriving at the pension
in the case of those who retired on or after I. I. I996 and omitting to add NPA
in the case of pre I996 retirees amounts to hostile discrimination of pre 1996
retirees, violating Article 14 and the principles relating to pensior. laid down
by this Court in D.S. Nakara v. Union of India, [1983] I SCC 305.
B
(9.4.) The Delhi High Court had struck down a similar clarificatory
• Circular dated 19. I0.1999 relating to Civilian Medical Officers (corresponding
to Defence Ministry Circular dated 11.9.2001 under challenge in these petitions)
by judgment dated 18.5.2002. That decision has attained finality and the
Union of India has implemented it by reverting back to addition to NPA to C
minimum pay, for purposes of stepping up the pension in regard to pre 1996
civilian Medical Officers. Union of India has to extend to similar treatment,
even in the case of Defence Service Medical Officers, by ignoring the
clarification dated 11. 9.200 I.

(9.5.) At all events, irrespective of the validity of the clarification dated D
11. 9.200 I, even if any amount has been wrongly paid to petitioners, the
Respondents cannot recover such excess amount paid in pursuance of the
Circular dated 7.6.1999.

QUESTIONS ARISING FOR DECISION:
E
I 0. On the contentions urged, the following questions arise for
consideration :

(i) Whether the Circular dated 11.9.200 I, is only a clarification, or an
amendment, to the Circular dated 7.6.1999:
(ii) Whether the Circular dated 7.6.1999 as clarified by Circular dated F
11.9.200 I, leads to unequal treatment of those who retired prior
to 1.1.1996 and those who retired after 1.1.1996 solely with
reference to date of retirement.
(iii) Whether the respondents having accepted and implemented the
decision of the Delhi High Court (in Dr. K.C. Garg v. Union of G
lndia-C.M.P. No. 7322/2001 and connected cases decided on
18.5.2002) on a similar issue, are required to extend a similar
treatment to Defence Service Medical Officers also, by cancelling
the Circular dated 11.9.2001.
H
70 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A (iv) Even ifthe Circular dated 11.9.2001 is found to be valid, whether
Respondents are not entitled to recover the excess payments
made.

Re : Question No. (i) :

B 11. We may first refer to the intent and purport of the Circular dated
7.6.1999. The Circular dated 7.6.1999 neither prescribes the requirements/
qualifications for entitlement to pension nor the method of determination of
pension. It only effectuates the President's decision that the pension (Which
has already been determined in accordance with the applicable rules/orders)
irrespective of the date of retirement, shall not be less than 50% of the
C minimum pay in the revised scales of pay introduced with effect from 1.1.1996.
Pension is determined as per relevant rules/orders, by calculating the average
of reckonable emoluments (basic pay, Rank Pay and NPA) drawn during the
last I 0 months of service and then taking 50% thereof as the retiring pension
applicable to retirees with 33 years of qualifying service, with proportionate
D reduction for retirees with lesser period of qualifying service. The basis for
calculating the pension in respect of those who retired prior to 1.1.1996, and
those retired on or after 1.1.1996 happens to be the same. The retiring pension
is 50% of the average reckonable emoluments for retirees with 33 years of
qualifying service, with proportionate reduction for those with lesser years of
qualifying service. The President's decision given effect by Circular dated
E 7.6.1999 only extends to all pre 1996 retirees, who did not have the benefit
of fixation of pension with reference to the revised pay scales which came into
effect on 1.1.1996, the benefit of the said revised pay scales, albeit in a limited
manner. In so doing, it also puts those who retired on or after 1.1.1986 and
pre 1986 retirees on par and on a common platform, removing the disparity,
F if any, in their pensions.
...
12. When the Fifth Central Pay Commission recommendations were
implemented, the pension of those who retired prior to 1.1.1996, was rationalized
by directing that their pension shall be the aggregate of (a) existing pension;
(b) dearness relief; (c) interim relief I; (d) interim relief II, and (e) fitment
G weightage of 40% of the existing pension. The 'existing pension' referred to
therein was the pension which had been arrived at by calculating 50% of the
average pay, NPA and Rank Pay during the last IO months of service. The
Circular dated 7.6.1999 made it clear that pension of retirees shall continue to
be calculated at 50% of average of reckonable emoluments for the last I 0
months before retirement, but only stipulated that the 'full' pension (that is
H
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA [RA VEENDRAN, J.] 71

pension for 33 years service) shall not be less than the 50% of the minimum A
pay in the revised pay scale introduced with effect from 1.1.1996. The Circular
dated 7.6.1999 also made it clear that if the minimum prescribed therein was
not beneficial to the pensioner, that is, where it was either equal to or less
than the existing consolidated pension, his pension will not be reduced to his
disadvantage. In short, the Circular dated 7.6.1999, merely stepped up the B
pension (for a qualifying service of 33 years) to 50% of the minimum pay in
the revised scale of pay introduced with effect from 1.1.1996 of the rank held
by such pensioner, where his pension was less. We may here note that
whenever the reference is to stepping up pension to 50% of the minimum pay
in the revised scale of pay, it applies to those with 33 years of qualifying
service and gets proportionately reduced for lesser period of qualifying service. C

13. The emoluments of those who retired on or after 1.1.1996, calculated
with reference to the basic pay in the revised scale of pay plus NPA will
certainly be more than the minimum pay in the revised scale of pay and
therefore, in their cases, the question of stepping up will not arise. On the D
other hand, as the pension of pre-1996 retirees was based on the basic pay
under the old pay scale plus NPA, and as the old pay scale was much less
than the 1996 revised pay scale, their pension required to be stepped up. The
extent to which the existing pension should be stepped up is clearly specified
in the Circular as "minimum pay in the revised scale of pay". The words used
do not give room for any confusion or doubt. A 'pay scale' has basically E
three elements. The first is the minimum pay or initial pay in the pay scale.
The second is the periodical increment. The third is the maximum pay in the
pay scale. An employee starts with the initial pay in the pay scale and gets
periodical increases (increments) and reaches the maximum or ceiling in the
pay scale. Each stage in the pay scale starting from the initial pay and ending F
with the ceiling in the pay scale, when applied to an employee is referred to
as 'basic pay' of the employee. Whenever the government revises the pay
scales, a fitment exercise takes place as per the principle of fitment (formula)
provided in the rules governing the revision of pay so that the 'basic pay'
in the old scale is converted into a 'basic pay' in the revised pay scale. When G
the circular dated 7.6.1999 used the words '50% of the minimum pay in the
revised scale of pay', it referred to 50% of the initial pay in the revised scale
of pay. If the old scale of pay was Rs.7300-100-7600 and ifthe revised scale
of pay was Rs.22400-525-24500, the minimum pay in the revised scale of pay
would be Rs.22400 and 50% of the minimum pay in the revised scale of pay
would be Rs. I 1200/-. H
72 SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R.

A 14. It is no doubt true that the tenn 'pay', with reference to medical
officers, includes the basic pay and NPA. But the term 'basic pay' does not
include NPA. In the absence of any special definition, the term 'basic pay of
a government servant' refers to the applicable stage of pay in the pay scale
to which he is entitled, and does not include NPA even in the case of Medical
B Officers. What the circular dated 7.6.1999 intended to extend by way of
benefit to all pensioners, was a minimum pension, that is, 50% of the minimum
pay in the 1996 revised scale of pay. NPA has no part to play in the minimum
that is sought to be assured. NPA has relevance only for initial fixation of
pension and not for stepping up pension under Circular dated 7.6.1999.

C 15. As a result, if the pension of a retiree is detennined by taking into
account NPA as part of 'pay' and the pension so detennined is more than
50% of minimum pay in the revised scale of pay, he would continue to get
such higher pension. This would happen in the case of all those who retired
on or after 1.1.1996. If the pension detennined by taking into account NPA
D as part of pay, is less than 50% of the minimum pay in the revised scale of
pay, his pension would be stepped up to 50% of the minimum pay in the
revised scale of pay. This would happen in the case of pre 1996 retirees.

16. The petitioners want to read the words "not less than 50% of the
minimum pay in the revised scale of pay" in the Circular dated 7.6.1999, as
E "not less than 50% of the minimum pay in the revised scale of pay plus NPA".
When the language used is clear and unambiguous and the intention is also
clear, it is not pennissible to add words to the Circular dated 7.6.1999 to satisfy
what petitioners consider to be just and reasonable. "Minimum pay in the
revised scale of pay" refers only to the initial pay in the revised scale of pay
F and not anything more. Due to a misinterpretation, NPA was included for the
purpose of giving the benefit of stepping up the pension in the case of retired
medical officers. The fact that NPA had already been taken into account while
calculating the 'existing pension' of the medical officers who retired before
1.1.1996 was lost sight of. The fact that NPA is part of 'pay' and not part of
'basic pay' was also overlooked. Therefore, it became necessary to issue the
G clarification, which was done by circular dated 11.9.2001, clarifying that it was
impennissible to again add NPA to 'the minimum pay in the revised pay scale'
for the purpose of stepping up the pension.

17. Another grievance of the petitioners is that prior to circular dated
H 7.6.1999, the pay and pension of medical officers was always more than the
pay and pension of non-medical officers of the same rank, in view of NPA
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA [RA VEENDRAN, J.] 73
..I.
element, and by virtue of the clarificatory circular dated 11.9.200 I, the pension A
of both categories, (Medical Officers and non-Medical Officers), who retired
prior to 1996, became equal. The petitioners contend that even after stepping
up under Circular dated 7.6.1999, the disparity which earlier existed between
Medical Officers and Non-Medical Officers of the same rank, should be
maintained. They point out that if the pension of medical officers and non- B
medical officers of the same rank should be the same, the purpose of giving
NPA as part of pay to Medical Officers was defeated and NPA became
illusory. We cannot agree. When the purpose of stepping up pension is to
• ensure that all retirees of the same rank get pension which is not less than
the prescribed minimum, it would be unjust for a section to say that merely
because they were earlier enjoying a higher pension than others of the same C
rank, such disparity should be continued, even after stepping up. When the
object of stepping up of pension is to bring in parity and avoid disparity, the
claim of petitioners that disparity should be continued cannot be accepted.

18. We, therefore, hold that circular dated 11.9.2001, is only a clarification D
to correct the wrong interpretation of the circular dated 7.6.1999. It neither
amends nor modifies the circular dated 7.6.1999.

Re : Question No. (ii)

19. The petitioners next contend that in the case of Medical Officers E
who retired on or after I. I.I 996, even after the Circulars dated 7.6.1999 and
11.9.2001, NPA is added to basic pay for the purpose of calculating the
pension, whereas in the case of pre 1996 retirees, NPA is not being added and
that amounts to discrimination. This is a misleading contention. In the case
of those retiring on or after I. I.I 996, NPA is added to basic pay, to detennine
their pension, and not for stepping up the pension. In the case of pre I 996 F
retirees, as NPA was already added while detennining their pension, the
question of adding it again, for purposes of stepping up the pension, does
not arise.

20. The principles relating to pension relevant to the issue are well G
settled. They are :

(a) In regard to pensioners fonning a class, computation of pension
cannot be by different formula thereby applying an unequal
treatment solely on the ground that some retired earlier and some
retired later. If the retiree is eligible for pension at the time of his H
retirement and the relevant pension scheme is subsequently
74 SUPREME COURT REPORTS [2006) SUPP. 7 S.C.R.

A amended, he would become eligible to get enhanced pension as
per the new formula of computation of pension from the date
when the amendment takes effect. In such a situation, the additional
benefit under the amendment, made available to the same class
of pensioners cannot be denied to him on the ground that he had
retired prior to the date on which the aforesaid additional benefit
B
was conferred.
(b) But all retirees retiring with a particular rank do not form a single
class for all purposes. Where the reckonable emoluments as on
the date of retirement (for the purpose of computation of pension) •
c are different in respect of two groups of pensioners, who retired
with the same rank, the group getting lesser pension cannot
contend that their pension should be identical with or equal to
the pension received by the group whose reckonable emolument
was higher. In other words, pensioners who retire with the same
rank need not be given identical pension, where their average
D reckonable emoluments at the time of their retirement were different,
in view of the difference in pay, or in view of different pay scales
being in force.
(c) When two sets of employees of the same rank retire at different
points of time, it is not discrimination if:
E
(i) when one set retired, there was no pension scheme and when
the other set retired, a pension scheme was in force.
(ii) when one set retired, a voluntary retirement scheme was in
force and when the other set retired, such a scheme was not in
F force; or
(iii) when one set retired, a PF scheme was applicable and when
the other set retired, a pension scheme was in place.
One set cannot claim the benefit extended to the other set on the
ground that they are similarly situated. Though they retired with the
G same rank, they are not of the 'same· class' or 'homogeneous group'.
The employer can validly fix a cut-off date for introducing any new
pension/retirement scheme or for discontinuance of any existing
scheme. What is discriminatory is introduction of a benefit
retrospectively (or prospectively) fixing a cut off date arbitrarily thereby
H dividing a single homogeneous class of pensioners into two groups
and subjecting them to different treatment.
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA [RAVEENDRAN.J.] 75

[Vide D.S. Nakara v. Union of India, (1983) l SCC 305. Krishna Kumar A
v. Union of India, [ 1990) 4 SCC 207, Indian Ex-Services League v. Union of
India, [1991] 2 SCC 104, V Kasluri v. Managing Direcwr, Slate Bank of India,
[ 1998] 8 sec 30 and Union of India V. Dr. Vijayapurapu Subbayamma, [2000]
7 sec 662).

21. As noticed earlier, pension is detennined with reference to the B
applicable rules/orders governing pension. The Ministry's Circular dated
7.6.1999 comes in, only to step up the pension from 1.1.1996, if the pension
calculated in accordance with the rules/orders is less than 50% of the minimum
pay in the revised scale of pay introduced with effect from 1.1.1996. There is
no need to step up the pension of those who retired on or after 1.1.1996, as C
their pension will be more than or in no event less than the minimum provided
under the circular dated 7.6.1999. The stepping up is required only to those
who retired prior to 1.1.1996 as their pension was lower on account of the fact
that their reckonable emoluments for purpose of calculation of pension, was
based on the old scales of pay. Let us take the case of a Medical Officer of
the rank Lt. General, with 33 years of service, who retired in the year 1998 after D
getting two increments in the revised pay scale. As the applicable pay scale
is Rs.22400-525-24500, his basic pay would have been Rs.23,450/- at the time
ofretirement. 25% thereof namely Rs.5863/- would be the NPA. If the reckonable
emolument was Rs.29313/-, pension will be 50% thereof, namely Rs.14656/-.
As the pension under the Rules (Rs.14656/-) was more than 50% of the E
minimum of revised pay scale (Rs.11200/-) assured under the circular dated
7.6.1999, the benefit of stepping up is not required in his case. It is only those
whose pension was determined with reference to old scales of pay, and not
the revised higher scale of pay, who require the benefit of the stepping up.
Therefore, the contention that pre 1996 retirees and post I . I .1996 retirees are
being treated differently, is untenable. They are treated similarly. But the fact F
that post 1.1.1996 retirees do not require the benefit of stepping up, cannot
by any stretch of imagination, give rise to a contention that the benefit given
to pre-1996 retirees by way of stepping up, amounts to discrimination.

22. The contention that NPA is taken into account in the case of post G
1.1.1996 retirees but not pre 1996 retirees is untenable. NPA is taken as part
of 'pay' in the case of both pre and post 1.1.1996 retirees. NPA is not taken
into account in the case of any retiree for applying the stepping up benefit
under circular dated 7.6.1999. It is a different matter that post 1.1.1996 retirees
do not require the benefit under the circular dated 7.6.1999. As already
noticed, while calculating pension of the pre J996 retirees, NPA had already H
76 SUPREME COURT REPORTS [2006] SUPP. 7 S.CR.

A been taken into account as part of 'pay', and that pension which was determined
after taking into account NPA, is found to be less than the minimum guaranteed
under the circular dated 7.6.1999, their pension is being increased to the
minimum provided in the circular dated 7.6.1999. NPA cannot again be added
to the minimum to step up the pension. If that is done, it will amount to taking
B NPA into account twice for purposes of pension, which is impennissible. The
contention of discrimination between pre 1.1.1996 retirees and post 1.1.1996
retirees is, therefore, imaginary.

Re : Question No. (iii) .,.
C 23. It was alleged that in the case of civilian medical officers, the nodal
Ministry had issued circulars dated 17. I2. l 998 and 29.10.1999 (corresponding
to the Defence Ministry's Circulars dated 7.6.1999 and 11.9.2001); that some
civilian Medical Officer Retirees had challenged the said circular dated
29.10.1999 directing that NPA shall not be added to minimum pay in the
revised scale, before the Delhi High Court; that the High Court had allowed
D the said writ petitions (CWP No.7322/2001 and connected cases K. G. Garg
v. Union of India by order dated 18.5.2002; and that the said order was not
challenged by the Union of India, but on the other hand, was implemented
by adding NPA to basic pay while stepping up the pension in the case of
civilian Medical Doctors who had retired prior to 1.1.1996. It is contended that
E the Respondents having accepted and implemented the decision of the Delhi
High Court in the case of civilian medical officers, cannot discriminate against
the Defence service medical officers placed in identical position and therefore
the benefit given to the civilian medical officers in pursuance of the decision
of the Delhi High Court should also be extended to them. The petitioners rely
on the broad principles underlying estoppel by Judgment, legitimate
F expectation, and fairness in action in support of their contention.
24. Respondents have filed an affidavit dated 1.8.2006 admitting that in
pursuance of the decision of the Delhi High Court, the circular dated 29.10.999
had been withdrawn but clarified that it was withdrawn only in regard to the
G civilian medical officers who were petitioners in the said writ petititions and
not in regard to all civilian medical officers. It is contended that the fact that
a decision of the High Court had been accepted or implemented in the case
of some persons, will not come in the way of the Union of India resisting
similar petitions filed by others, in public interest.

H 25. A similar contention was considered by this Court in State of
Maharashtra v. Digambar, [1995] 4 SCC 683. This Court held:
.
COL. (RETD.) B..J. AKKARA v. THE GOVT. OF INDIA [RA VEENDRAN . .I.] 77

"Sometimes, as it was stated on behalf of the State, the State A
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 B
State, not to file appeals before this Court in some matters on account
of improper advice or negligence or improper conduct of officers
concerned. It is further possible, that even where S.L.Ps are filed by
the State against judgments of High Court, such S.L.Ps may not be
entertained by this Court in exercise of its discretionary jurisdiction
under Article 136 of the Constitution either because they are considered C
as individual cases or because they are considered as cases not
involving stakes which may adversely affect the interest of the State.
Therefore, the circumstance of the non-filing of the appeals by the
State in some similar matters or the rejection of some S.L.Ps 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 S.L.P. or S.L.Ps D
in other similar matters where it is considered on behalf of the State
that non-filing of such S.L.P. or S.L.Ps and pursuing them is likely to
seriously jeopardize the interest of the State or public interest."

The said observations apply to this case. A particular judgment of the High E
Court may not be challenged by the State where the financial repercussions
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 F
is realized, the State is not prevented or barred from challenging the subsequent
decisions or resisting subsequent writ petitions, even though judgment in a
case involving similar issue was allowed to reach finality in the case of others.
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 malafides or ulterior motives. Be that as it may. On G
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 Defence Ministry circular dated 11.9.2001) has been G
78 SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R.

A upheld and that decision has attained finality will not come in the way of State
defending or enforcing its circular dated 11.9.200 I.

Re : Question No. (iv)

25. The last question to be considered is whether relief should be
B granted against the recovery of the excess payments made on account of the
wrong interpretation/understanding of the circular dated 7.6.1999. This Court
has consistently granted relief against recovery of excess wrong payment of
emoluments/allowances from an employee, if the following conditions are
fulfilled [Vide Sahib Ram v. State ofHaryana, [1995] Suppl.I SCC 18, Shyam r

Babu Verma v. Union of India, [1994] 2 SCC 521, Union of India v. M.
C Bhaskar, [ 1996] 4 SCC 416 and V. Gangaram v. Regional Joint Director, AIR
( 1997) SC 2776] :

(a) The excess payment was not made on account of any
misrepresentation or fraud on the part of the employee.
D (b) Such excess payment was made by the employer by applying a
wrong principle for calculating the pay/allowance or on the basis
of a particular interpretation of rule/order, which is subsequently
found to be erroneous.

Such relief, restraining recovery back of excess payment, is granted by courts
E not because of any right in the employees, but in equity, in exercise of judicial
discretion, to relieve the employees, from the hardship that will be caused if
recovery is implemented. A Government servant, particularly one in the lower
rungs of service would spend whatever emoluments he receives for the
upkeep of his family. If he receives an excess payment for a long period, he
F would spend it genuinely believing that he is entitled to it. As any subsequent
action to recover the excess payment will cause undue hardship to him, relief
-
is granted in that behalf. But where the employee had knowledge that the
payment received was in excess of what was due or wrongly paid, or where
the error is detected or corrected within a short time of wrong payment,
Courts will not grant relief against recovery. The matter being in the realm of
G judicial discretion, courts may on the facts and circumstances of any particular
case refuse to grant such relief against recovery.

26. On the same principle, pensioners can also seek a direction that
wrong payments should not be recovered, as pensioners are in a more
disadvantageous position when compared to in-service employees. Any
H attempt to recover excess wrong payment would cause undue hardship to
COL. (RETD.) B.J. AKKARA v. THE GOVT. OF INDIA (RA VEENDRAN, J.] 79

.,,; them. The petitioners are not guilty of any misrepresentation or fraud in A
regard to the excess payment. NPA was added to minimum pay, for purposes
of stepping up, due to a wrong understanding by the implementing departments.
We are therefore of the view that Respondents shall not recover any excess
payments made towards pension in pursuance of circular dated 7.6.1999 till
the issue of the clarificatory circular dated 11.9.200 I. In so far as any excess
payment made after the circular dated 11.9.200 I, obviously the Union of India B
will be entitled to recover the excess as the validity of the said circular has
been upheld and as pensioners have been put on notice in regard to the
wrong calculations earlier made.

27. A faint attempt was made by the learned Addi. Solicitor General
appearing for Respondent to contend that all such wrong payments could be
c
recovered and at best the pensioners may be entitled to time or instalments
to avoid hardship. No doubt in Union of India v. Sujatha Vedachalam [2000]
9 SCC 187, this Court did not bar the recovery of excess pay, but directed
recovery in easy instalments. The said decision does not lay down a principle
that relief from recovery should not be granted in regard to emoluments D
wrongly paid in excess, or that only relief in such cases is grant of instalments.
A direction to recover the excess payment in instalments or a direction not
to recover excess payment, is made as a consequential direction, after the
main issue relating to the validity of the order refixing or reducing the pay/
allowance/pension is decided. In some cases, the petitioners may merely seek
E
quashing of the order refixing the pay and may not seek any consequential
relief. In some cases, the petitioners may make a supplementary prayer seeking
instalments in regard to refund of the excess payment if the validity of the
order refixing the pay is upheld. In some other cases, the petitioners may pray
that such excess payments should not be recovered. The grant of
consequential relief would, therefore, depend upon the consequential prayer F
made. If the consequential prayer was not for waiving the excess payment but
only for instalments, the court would obviously consider only the prayer for
instalments. If any decision which upholds the refixation of pay/pension does
not contain any consequential direction not to recover the excess payment
already made or contains a consequential direction to recover the excess
payment in instalments, it is not thereby laying down any proposition of law
G
but is merely issuing consequential direction in exercise of judicial discretion,
depending upon the prayer for consequential relief or absence of prayer for
consequential relief as the case may be, and the facts and circumstances of

_... the case. Many a time, the prayer for instalments or waiver of recovery of
excess, is made not in the pleadings but during arguments or when the order H
80 SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R.

A is dictated upholding the order revising or re-fixating the pay/pension.
Therefore, the decision in Sujatha Vedachalam (supra) will not come in the
way of relief being granted to the pensioners in regard to the recovery of
excess payments.

28. The learned Additional Solicitor General next submitted that in so
B far as refund of the excess pension relating to the period 11.9.2001 to date,
the petitioners who have obtained interim orders of stay, should be made
liable to pay interest, as the petitioners had the benefit of such excess
payment. Reliance is placed on the decisions of this Court in Style (Dress
Land) v. Union Territory, Chandigarh (1999] 7 SCC 89, Ouseph Mathai v. M
C Abdul Khadir, (2002] l SCC 319, Rajasthan Housing Board v. Krishna Kumari,
(2005] 13 SCC 151. It is no doubt true that the petitioners, who have obtained
orders of interim stay, have been receiving excess pension even after the
clarification contained in the Circular dated 11.9.2001 and that they are bound
to refund the excess received after 11.9.200 I. But there was some amount of
confusion on account of the earlier interpretation of the Circular dated 7.6.1999
D by the Department itself. Further, the petitioners are all pensioners, who have
prosecuted these petitions bonajide. In the circumstances, on the facts and
circumstances, we do not. propose to award of interest on the amounts to be
refunded.

Conclusion
E
29. The Circulars dated 7.6.1999 and 11.9.2001 relate not only to pension
but also family pension, the only difference being the percentage, that is, 30%
is mentione'd in respect of family pension instead of 50% in respect of
pension. What we have discussed and held in respect of pension will apply
F to family pension also.

30. In view of the above, the challenge to the validity of the circular
dated 11.9.2001 is rejected. These petitions (Transferred Cases) are dismissed.
The Respondents, however, shall not recover the excess, if any, paid to the
petitioners between 7.6.1999 and 11.9.2001. Respondents may recover the
G excess if any paid after 11.9.2001 in appropriate monthly instalments
approximately equal to the monthly excess payment. Parties to bear respective
costs.

RP. Transferred Cases dismissed.

..._