Supreme Court of India
N.N. GODFRED & ORS.versusUNION OF INDIA & ORS.
- Citation
- 2018 INSC 599
- Decided
- 11 July 2018
- Disposal
- Appeal(s) allowed
- Bench
- S ABDUL NAZEER
Holding
Submarine Pay, as defined in the 1967 Government letter and the 1974 Navy Instruction applicable at the time of retirement, is part of basic pay and must be included in the calculation of service pension.
Summary
Three former Indian Navy sailors who served in the Submarine Arm retired in 1983 challenged the Armed Forces Tribunal's order that excluded Submarine Pay from pension calculations. They argued that Submarine Pay, introduced by a 1967 Government letter, was "pay for all purposes" and should be part of the basic pay used to compute service pension under the Navy (Pension) Regulations, 1964. The respondents contended that Submarine Pay was an allowance and, following later pay commission revisions, should not be reckoned for pension. The Supreme Court examined the 1967 letter, the Navy Instruction No. 2/S/74 of 1974 (effective at the time of retirement), and the distinction between Submarine Pay and Submarine Allowance, concluding that Submarine Pay was indeed part of basic pay for pension purposes. Consequently, the Court set aside the Tribunal's order and allowed the appeal, directing that Submarine Pay be included in the pension computation.
Issues considered
- Whether Submarine Pay granted to naval personnel is to be treated as "pay for all purposes" and thus included in the computation of service pension.
- Whether the definitions and revisions in later Navy Instructions and Pay Commission notifications affect the status of Submarine Pay for personnel who retired before those revisions.
Legislation cited
Subjects
service pensionsubmarine paynaval service lawArmed Forces TribunalNavy (Pension) Regulationsmilitary remunerationcivil appeal
Judgment
[2018] 9 S.C.R. 281 281
N.N. GODFRED & ORS. A
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 10035 of 2010)
JULY 11, 2018 B
[S. ABDUL NAZEER AND INDU MALHOTRA, JJ.]
Service Law – Naval Service – Service Pension if includes
Submarine Pay – Appellants enrolled in the Indian Navy as Sailors
and subsequently joined its Submarine Arm – Appellants aggrieved
C
with the refusal of the respondents to take Submarine Pay into
account while calculating pension payable to them – Armed Forces
Tribunal (AFT) held that submarine pay/allowance cannot be counted
for the purpose of determining pension – On appeal, held: Concept
of Submarine Pay was introduced by Union of India vide Letter
dated May 31, 1967 – It was granted to Officers and Sailors who D
were qualified to serve in submarines, and were deputed to go to
sea from time to time – In terms thereof, Submarine Pay was to be
treated as “pay for all purposes” which would include computation
of Service Pension – Further, case of the appellants was governed
by the Navy Instruction dated August 17, 1974, which were in force
E
when appellants retired on January 1, 1983, for computing the
pensionary benefits and it did not exclude Submarine Pay from the
computation of “pay” for the purpose of calculating Service Pension
– It also mentioned Submarine Pay and Submarine Allowance
separately – Thus, Submarine Pay and Submarine Allowance are
not used interchangeably, as erroneously done in the impugned Order F
– Submarine Pay was includible in “pay”, for the purposes of
computing the Service Pension of the appellants– Order passed by
AFT set aside– Armed Forces Tribunal Act, 2007 – Navy(Pension)
Regulations,1964 – Regulations 86 and 84.
Allowing the appeal, the Court G
HELD: 1.1 Section I of Chapter III of the Navy (Pension)
Regulations, 1964 provides the framework for grant of pensionary
benefits to Sailors in the Indian Navy. Sailors who have served
for a period of fifteen years i.e. the minimum qualifying service
H
281
282 SUPREME COURT REPORTS [2018] 9 S.C.R.
A for pension, or more, are eligible for grant of Service Pension.
Service Pension is fixed on the basis of the rank and group held
by a person as per Regulation 84 of the 1964 Regulations.
Regulation 86 of the 1964 Regulations provides the rates of
Service Pension.[Paras 5-5.2] [286-E-F; 287-A]
B 1.2 The concept of Submarine Pay was introduced by the
Union of India vide Letter dated May 31, 1967. It was granted to
Officers and Sailors who were qualified to serve in submarines,
and were deputed to go to sea from time to time. Submarine Pay
was to be treated as “pay for all purposes”, as per the instructions
issued by the Ministry of Defence to the Chief of Naval Staff vide
C Letter No. dated May 31, 1967. The pay scale and allowances of
Officers and Sailors were revised with effect from January 1, 1973
pursuant to the Navy Instruction No.2/S/74 dated August 17, 1974.
Navy Instruction dated August 17, 1974 was issued to give effect
to the recommendations of the Third Pay Commission, and
D remained in force till January 1, 1986. [Paras 5.4 and 5.5]
[288-A-D]
1.3 Clause 4(a) of Navy Instruction No. 2/S/74 defined the
term “basic pay” to denote the pay “actually drawn” in the scale
prescribed for the rank and group. Clause 2 provided that the
E revised rates of pay applicable to Sailors were specified in
Appendix A. The heads of Submarine Pay and Submarine
Allowance were separately listed in Appendix B at S. Nos. 14
and 15, respectively. The terms Submarine Pay and Submarine
Allowance are not used interchangeably, as has been erroneously
done in the impugned Order. As per Navy Instruction No. 2/S/
F 74, a Chief Petty Officer was entitled to Submarine Pay at the
rate of Rs. 300/- per month, which was distinct from Submarine
Allowance. Pursuant to the recommendations of the Fourth Pay
Commission the rates of pay and allowances of Officers and Sailors
were revised by Special Navy Instruction No.1/S/86 (with effect
G from January 1, 1986). Further revisions took place pursuant to
the recommendations of the Fifth and Sixth Pay Commissions.
The definition of “basic pay” was changed to exclude Submarine
Pay. The reliance on these instructions by the Respondents is
misplaced, as the case of the appellants was governed by the
instruction issued pursuant to the Third Pay Commission for
H
N.N. GODFRED & ORS. v. UNION OF INDIA & ORS. 283
computing the pensionary benefits i.e. Navy Instruction No. 2/S/ A
74 dated August 17, 1974 and Letter No.PA/4102/NHO/504.S/
D(PAY/ SERVICES) dated May 31, 1967 as they retired on
January 1, 1983. As per Letter No. PA/4102/NHO/504.S/D(PAY/
SERVICES) dated May 31, 1967 Submarine Pay was to be treated
as “pay for all purposes”, which would include computation of
B
Service Pension. [Paras 5.6-5.8 and 5.11] [289-A-E, G-H]
1.4 The Last Pay Drawn Certificate of the appellants shows
that Submarine Pay was actually being drawn as a separate head
of “pay”. Navy Instruction No.2/S/74 did not exclude Submarine
Pay from the computation of “pay” for the purpose of calculating
Service Pension. In contrast, the entries with respect to Aviation C
Sailors, note (ii) below Appendix B of Navy Instruction No. 2/S/
74 specifically excluded Flying Pay from being treated as “pay”
for the computation of pension and gratuity. [Paras 5.9, 5.10]
[289-E-G]
1.5 Submarine Pay was includible in “pay”, for the purposes D
of computing the Service Pension of the appellants. [Para 6]
[290-C]
Anuj Kumar Dey v. Union of India (1997) 1 SCC 366 :
[1996] 9 Suppl. SCR 269 ; BALCO Captive Power Plant
Mazdoor Sangh and Another v. National Thermal Power E
Corporation and Others (2007) 14 SCC 234 : [2007]
10 SCR 1084 ; Paradeep Phosphates Limited v. State
of Orissa & Ors. 2018 (6) SCALE 338 – referred to.
Case Law Reference
F
[1996] 9 Suppl. SCR 269 referred to Para 1.2
[2007] 10 SCR 1084 referred to Para 2.4
2018 (6) SCALE 338 referred to Para 2.4
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10035
of 2010. G
From the Judgment and Order dated 25.02.2010 of the Armed
Forces Tribunal, Principal Bench, New Delhi in Transfer Application
No. 492 of 2010.
H
284 SUPREME COURT REPORTS [2018] 9 S.C.R.
A Sandeep Sethi, ASG, Vineet Bhagat, R. Balasubramanium, N. K.
Karhail, Sachin Sharma, Pranay Ranjan, Mukesh Kumar Maroria, Advs.
for the appearing parties.
The Judgment of the Court was delivered by
INDU MALHOTRA, J. 1. The present Civil Appeal has been
B filed under Section 30 of the Armed Forces Tribunal Act, 2007 to
challenge the judgment and order dated February 25, 2010 passed by
the Principal Bench of the Armed Forces Tribunal, New Delhi in Transfer
Application No. 492 of 2010.
1.1The three appellants had enrolled in the Indian Navy as Sailors, and
C subsequently joined the Submarine Arm. After being promoted through
the ranks, all three appellants superannuated from service on
January 31, 1983. While Appellant No.1 was holding the rank of
Chief Petty Officer (ERA-II), Appellant Nos. 2 and 3 were holding
the rank of Chief Engine Room Artificer in the Submarine Arm of
D the Indian Navy at the time of their superannuation.
1.2 Initially, the appellants were not granted pensionary benefits on
account of the non-inclusion of their four-year training period, while
computing their qualifying service. Aggrieved by the same, the
appellants filed a Writ Petition before the Delhi High Court which
E was allowed in terms of the decision of this Court in Anuj Kumar
Dey v. Union of India [(1997) 1 SCC 366].
1.3 Pursuant to the said judgment, the appellants started getting
pensionary benefits. The pension of the appellants was computed on
the basis of the pay of a Chief Petty Officer.
F 1.4 On February 8, 2005, Appellant No. 3 made a representation to the
Bureau of Sailors-Respondent No. 3 for a clarification whether
Submarine Pay of Rs. 300 per month, which was being granted to
them after joining the Submarine Arm, was included for computing
the pension payable. It was submitted that Submarine Pay was a
G component of their “pay”, and not an “allowance”.
1.5 On March 29, 2005 Respondent No. 3 rejected the representation
stating that Submariners and Aviation Sailors were categorized
under the group “Other than A”, which is lower than Group A, and
that the pensionary benefits granted were “in order”.
H
N.N. GODFRED & ORS. v. UNION OF INDIA & ORS. 285
[INDU MALHOTRA, J.]
1.6 The three appellants being aggrieved by the refusal of the A
respondents to take into account Submarine Pay while
calculating pension payable to them filed separate Writ Petition Nos.
19145-47 of 2006 before the Delhi High Court.
1.7 During the pendency of the Writ Petitions, the Armed Forces
Tribunal Act, 2007 came into force. The Writ Petition Nos. 19145- B
47 of 2006 were transferred to the Principal Bench, Armed Forces
Tribunal, New Delhi and renumbered as Transfer Application
No. 492 of 2010.
1.8 The Armed Forces Tribunal disposed of the Transfer Application
No. 492 of 2010 by a cryptic Order dated February 25, 2010 wherein C
it was merely mentioned that submarine pay/allowance cannot be
counted for the purpose of determining pension.
2. Aggrieved by the impugned order, the appellants preferred the
present Civil Appeal.
2.1 The appellants have submitted that Submarine Pay would form part D
of their basic pay, and hence ought to be included for
computation of Service Pension. This was for the reason that
Sailors working in the Submarine Arm of the Indian Navy were
granted Submarine Pay on account of the highly dangerous nature
of the work undertaken, and the arduous conditions in which they E
had to function.
2.2 It was further submitted that Submarine Pay was included in the
Last Pay Drawn Certificate dated August 10, 1983. In contrast,
Sailors who were not working in the Submarine Arm, were not being
granted this additional pay. The appellants gave the illustration of F
one M.V. Kumaran who was not working in the Submarine Arm.
He was not being granted Submarine Pay, on account of the
difference in the nature of duties performed.
2.3 The appellants further submitted that since they belonged to the
group “Other than Group A” they were entitled to higher rates of
G
pay as specified in Appendix A, Clause 3 of the Navy Instructions
No. 2/S/74 dated August 17, 1974.
2.4 Reliance was placed on two decisions of this Court in BALCO
Captive Power Plant Mazdoor Sangh and another v. National
Thermal Power Corporation and others [(2007) 14 SCC 234]
H
286 SUPREME COURT REPORTS [2018] 9 S.C.R.
A and Paradeep Phosphates Limited v. State of Orissa & ors.
[Civil Appeal Nos. 3997-3998 of 2018 decided on April 19, 2018 to
contend that conditions of service cannot be altered to the detriment
of employees.
3. Per contra, the case of the Respondents is that the amount
B received under the head of Submarine Pay is an “allowance”, and hence
cannot be included for the purposes of computing Service Pension.
3.1 It was contended the head of Submarine Pay was listed as an
allowance under Appendix B of the Navy Instruction No. 2/S/74
dated August 17, 1974.
C 3.2 It was further submitted that any allowance, including Submarine
Pay, were not treated as reckonable emoluments for the purposes of
computing Service Pension.
3.3 The respondents submitted that pursuant to the Fifth Pay
Commission, Special Pays like Flying Pay, Submarine Pay,
Technical Pay etc. were re-designated as allowances vide GoI/MoD
D
Letter 4(1)/2001/D(Pay/Services) dated March 01, 2004.
4. The issue which arises for consideration is whether Submarine Pay
was to be included for computing the Service Pension of the
appellants, who retired on 31.1.1983 in the rank of Chief Petty
Officer and Chief Engine Room Artificer.
E
FINDINGS
5. Section I of Chapter III of the Navy (Pension) Regulations, 1964
provides the framework for grant of pensionary benefits to Sailors in 4
the Indian Navy. Sailors who have served for a period of fifteen
years i.e. the minimum qualifying service for pension, or more, are O
F eligible for grant of Service Pension. A
5.1 Service Pension is fixed on the basis of the rank and group held by a
II
person as per Regulation 84 of the Navy (Pension) Regulations, 1964
a
which has been reproduced hereunder:
C
“84. Rank and group for assessment of service pension.-
G The service pension shall be assessed on the basis of the
rank actually held by an individually continuously whether
in a substantive or paid acting capacity and the lowest group
for which he was paid during the last ten months of his
service qualifying for pension.”
H
N.N. GODFRED & ORS. v. UNION OF INDIA & ORS. 287
[INDU MALHOTRA, J.]
5.2 Regulation 86 of the Navy (Pension) Regulations, 1964 provides the A
rates of Service Pension. The relevant extract of Regulation 86 is
reproduced hereunder:
“86. Rate of service pension.- The following are the rates
of service pension:-
RATES OF SERVICE PENSION-SAILORS B
Completed years
Rank Rates of service pension
of service
Group Naval
‘A’ Aviation
Naval Sailors C
Aviation other
Sailors Group Group than
of ‘B’ ‘C’ those on
Group Group
‘A’ & ‘A’
rates of rates of D
pay pay
(1) (2) (3) (4) (5) (6)
Rs. p.m. Rs. Rs. Rs. p.m.
p.m. p.m. E
15 83 83 83 99
16 88 88 88 105
4. Chief 17 94 94 94 112
Petty 18 99 99 99 118
Officer/ 19 105 105 105 125
Artificer 20 110 110 110 131 F
Class 21 116 116 116 138
III/Mech 22 121 121 145
anician 23 127 127 151
Class III 24 132 132 158
25 138 138 164”
G
5.3 A perusal of Regulation 86, and the rates of Service Pension reveals
that Chief Petty Officers and Artificer Class III belonging to the
group “Other than Group A”, which has higher rates of Service
Pension as compared to those in “Group A”.
H
288 SUPREME COURT REPORTS [2018] 9 S.C.R.
A 5.4 The concept of Submarine Pay was introduced by the Union of
India vide Letter No. PA/4102/NHO/504.S/D (PAY/SERVICES)
dated May 31, 1967. It was granted to Officers and Sailors who
were qualified to serve in submarines, and were deputed to go to sea
from time to time. Submarine Pay was to be treated as “pay for all
purposes”, as per the instructions issued by the Ministry of
B
Defence to the Chief of Naval Staff vide Letter No. PA/4102/NHO/
504.S/D(PAY/SERVICES) dated May 31, 1967.
5.5 The pay scale and allowances of Officers and Sailors were revised
with effect from January 1, 1973 pursuant to the Navy Instruction
No. 2/S/74 dated August 17, 1974.
C
Navy Instruction dated August 17, 1974 was issued to give effect
to the recommendations of the Third Pay Commission, and remained in
force till January 1, 1986.
5.6 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term “basic
D pay” to denote the pay “actually drawn” in the scale prescribed for
the rank and group. Clause 2 provided that the revised rates of pay
applicable to Sailors were specified in Appendix A. As per Clause 3,
Artificer/Mechanician Sailors of the Submarine Arm were entitled
to rates of pay specified under column titled “Group A” in Appendix
A.
E
The heads of Submarine Pay and Submarine Allowance were
separately listed in Appendix B at S. Nos. 14 and 15, respectively.
The relevant extract of Appendix B is extracted hereinbelow for
ready reference:
F Sl No. Allowances Existing Rate(s) Revised Rates
GROUP ‘A’
14. Submarine MCPOs I & II 350 p.m. 170 p.m.
Pay CPO 300 150
PO 125
G Leadings 275 115
Sea I 265 100.00
Sea II 250
15. Submarine MCPO I & II Nil 2 p.d.”
Allowance
H
N.N. GODFRED & ORS. v. UNION OF INDIA & ORS. 289
[INDU MALHOTRA, J.]
As per Navy Instruction No. 2/S/74, a Chief Petty Officer was A
entitled to Submarine Pay at the rate of Rs. 300/- per month, which was
distinct from Submarine Allowance.
5.7 Pursuant to the recommendations of the Fourth Pay Commission the
rates of pay and allowances of Officers and Sailors were revised by
Special Navy Instruction No. 1/S/86 (with effect from January 1, B
1986). Further revisions took place pursuant to the
recommendations of the Fifth and Sixth Pay Commissions. The
definition of “basic pay” was changed to exclude Submarine Pay.
The reliance on these instructions by the counsel for the
Respondents is misplaced, as the case of the appellants was governed C
by the instruction issued pursuant to the Third Pay Commission for
computing the pensionary benefits i.e. Navy Instruction No. 2/S/74 dated
August 17, 1974 and Letter No. PA/4102/NHO/504.S/D(PAY/
SERVICES) dated May 31, 1967 as they retired on January 1, 1983.
5.8 As per Letter No. PA/4102/NHO/504.S/D(PAY/SERVICES) dated D
May 31, 1967 Submarine Pay was to be treated as “pay for all
purposes”, which would include computation of Service Pension.
5.9 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term “basic
pay” to denote the pay actually drawn in the scale prescribed for the
rank and group. The Last Pay Drawn Certificate of the appellants E
shows that Submarine Pay was actually being drawn as a separate
head of “pay”.
Navy Instruction No. 2/S/74 did not exclude Submarine Pay from
the computation of “pay” for the purpose of calculating Service
Pension. F
5.10 In contrast, it would be instructive to refer to the entries with
p.m. respect to Aviation Sailors. Note (ii) below Appendix B of Navy
Instruction No. 2/S/74 specifically excluded Flying Pay from being
treated as “pay” for the computation of pension and gratuity.
5.11Appendix B of Navy Instruction No. 2/S/74 specifically G
.00 mentions both Submarine Pay and Submarine Allowance separately
at S. Nos. 14 and 15, respectively. The terms Submarine Pay and
Submarine Allowance are not used interchangeably, as has been
d.” erroneously done in the impugned Order.
H
290 SUPREME COURT REPORTS [2018] 9 S.C.R.
A 5.12 The submission of the respondents that Submarine Pay was
excluded from the ambit of basic pay as per Special Navy
Instruction No. 1/S/86, Special Navy Instruction No. 1/S/9W and
Special Navy Instruction No. 1/S/08 cannot be accepted, since these
notifications came into force subsequent to the date of
superannuation of the appellants. These would therefore have no
B
application to the cases of the present appellants, which were
governed by the Navy Instruction No. 2/S/74 dated August 17, 1974
issued pursuant to the recommendations of the Third Pay
Commission.
6. In view of the aforesaid facts and legal position, Submarine Pay was
C includible in “pay”, for the purposes of computing the Service Pen-
sion of the appellants.
As a result, the Civil Appeal is allowed, and the judgment and
order dated February 25, 2010 passed by the Principal Bench, Armed
Forces Tribunal, New Delhi in Transfer Application No. 492 of 2010, is
D hereby set aside, with no order as to costs.
Divya Pandey Appeal allowed.
E
F
G
H
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