Holding

The appellant is entitled to have his pension fixed on the basis of the subsistence allowance (75 % of the revised pay) drawn during the ten months preceding his compulsory retirement, with the revised 1986 pay scales applicable.

Summary

The appellant, a railway signal engineer, was suspended on 21‑January‑1982 and later compulsorily retired on 25‑November‑1992. During the suspension he received only a subsistence allowance equal to 75 % of his revised basic pay, which the President ordered to count as qualifying service for pension but for no other purpose. The dispute centered on whether his pension should be calculated on the basis of the average emoluments drawn in the ten months preceding his retirement – i.e., the subsistence allowance based on the 1986 revised pay scales – or on the pre‑suspension pay drawn before 1982. The Court examined Rule 50 of the Railway Services (Pension) Rules, 1993, its notes, and Rule 49 together with Rule 1303 of the Railway Establishment Code, concluding that the suspension period counted as service and that the subsistence allowance qualified as “emoluments”. Consequently, the pension must be fixed on the basis of the revised subsistence allowance for the ten months before retirement. The appeal was allowed, directing recomputation of pension and other benefits with interest.

Issues considered

Whether Rule 50 Note I or Note II applies to a railway servant compulsorily retired while under suspension.
Whether subsistence allowance paid during suspension qualifies as ‘emoluments’ for computing average emoluments under Rule 49/50.
Whether the revised pay scales (effective 1 January 1986) must be used to determine emoluments despite not being actually drawn.
Whether the period of suspension counts as qualifying service for pension under the President’s order and Rule 37.
Whether the pension should be calculated on the basis of the subsistence allowance drawn in the ten months preceding compulsory retirement.

Legislation cited

Railway Services (Pension) Rules, 1993s. Rule 37, s. Rule 49, s. Rule 50

Subjects

pensionrailway servicessubsistence allowancesuspensionaverage emolumentscompulsory retirementrevised pay scalesRule 50Rule 49qualifying service

Judgment

R.P. KAPUR A
v.
UNION OF INDIA AND ORS.

AUGUST 9, 1999

[DR. A.S. ANAND, C.J., M. JAGANNADHA RAO AND B
N. SANTOSH HEGDE, JJ.]

Service Law :

Railway Services (Pension) Rules, 1993: Rules 37, 49 and 50. C
Pension-Fixation of-Criteria-Average emoluments-During last JO
- months of service-Employee compulsorily retired while under suspension-
Subsistence allowance paid during suspension period-Suspension period
also counted towards qualifYing service for pension-During suspension
period basic pay was enhanced-But pension was fixed on the basis of D
average emoluments drawn by employee for JO months prior _Jo his
suspension-Correctness of -Held: Jn the circumstances of the case,
subsistence allowance drawn during the JO months preceding retirement is
to be taken as "average emoluments" and not that drawn prior to
suspension-Hence, subsistence allowance @ 75% of basic pay in the revised E
pay scale is to be taken as "emoluments" for fixation of pension-Railway

- Services (Revised Pay) Rules, 1986-Railway Establishment Code, R. J303.

Rule 50 Note I and proviso-Compulsory retirement-While under
suspension-Applicability of-Held: Note I is applicable when employee
under suspension is reinstated-It is not applicable when employee· is p
compulsorily retired while under suspension-Therefore, proviso to Note I
is also not applicable.

Words and Phrases:

"Emoluments "-Meaning of -Jn the context of R. 49 of the Railway G
Services (Pension) Rules, 1993.

"Average Emoluments "-Meaning of -Jn the context of R. 50 of the
Railway Services (Pension) Rules, 1993.

"Subsistence allowance "-Meaning of
121 H
.
122 SUPREME COURT REPORTS (1999) SUPP. I S.C.R.

A . The appellant-railway employee was placed under suspension on 21-1-
1982 and compulsorily retired from service w.e.f. 25-11-1992. However, the
President granted subsistence allowance to ·the appellant during the
suspension period and it was allowed to count as qualifying service for
pension but for no other purpose under Rule 37 of the Railway Services
B (Pension) Rules, 1993. The appellant's pension was fixed on the basis of the
average emoluments drawn by him during the 10 months preceding the date
of his suspension i.e. 21-1-1982.

The appellant filed a petition before the Central Administrative Tribunal
contending that there was notional revision of his pay w.e.f. 1-1-1986; that
C he was granted subsistence allowance at the rate of75% of the revised pay;
and , therefore, the subsistence allowance drawn by him during the 10
months preceding his compulsory retirement should be taken as his
emoluments for the purpose of fixing his pension. The petition was dismissed.
Hence this appeal.

D On behalf of the appellant it was contended that the appellant had not
actually drawn the pay in the revised scale and, therefore, the revised pay
could not be taken into consideration for the purpose of average emoluments
under Notes 1 and 2 of Rules 50 of the Rules.

Allowing the appeal, this Court
E
HELD: 1. The contention of the respondent that the appellant had not
actually drawn the revised pay but only subsistence allowance and, therefore,
the revised pay could not be taken into consideration for the purpose of
average emoluments under proviso to Note 1 of Rule 50 of the Railway
Services (Pension) Rules, i993 is not acceptable. Note 1 does not apply in
F this case. Note 1 is applicable to a railway servant when he is reinstated
whereas the appellant was not reinstated. Therefore, proviso to Note 1 is also.
not applicable in this case. However, the proviso to Note 1 means that increase
in pay not actually drawn i.e. which is. only notionally fixed but without a
right for payments, cannot go into the computation. (131-B-C)
G
E. Gopalakrishna v. Union of India, [1995) Supp. 4 SCC 205, referred
to.

2. Note 2 does not also apply in this case since the suspension period
is to be disregarded only if such period is not to count as service. The words
H 'the period whereof does not count as service' occurring in Note 2 are
R.P. KAPUR v. U.0.1 123
important and have to be given effect to. The respondents have obviously A
ignored the said word 'not' occurring in Note 2 and clearly misi_nterpreted
the said Note 2 below Rule 50. In the case of the appellant the President's

- order clearly states that the period of suspension is to count towards
"qualifying service". If the President, as the Disciplinary Authority, has
directed that the period of suspension shall count as qualifying service-it is B
wholly impermissible for the Railways to omit the said period from
consideration on the specious ground that before 25-11-1992 the appellant
has drawn only subsistence allowance and not pay. The very purpose of the
order of the President cannot thus be allowed to be defeated. [131-E-F-G]
3. There is an express direction by the President to count the service,
within Rule 37 of the Rules. Therefore, once the suspension period i~ C
directed to be counted for computing the qualifying service, it is the
emoluments drawn at the end of the periodjust before retirement that become
relevant and not the 'pay' drawn before the commencement of suspension-
which in this case goes to period of ten years before 1992. Further, the
appellant has put in less than 20 years' service by the date of his suspension D
on 21-1-1982. If the respondent's contention is accepted, no pension can in
fact at all be paid to him. It is not the respondent's contention that no pension
need be paid. This is again one more reason as to why the contention of the
· respondent is to be rejected. (132-A-B-C-D)
4. The respondent's contention that the appellant has drawn only E
subsistence allowance and not "emoluments" during his period of suspension
and, therefore, his pension could not be computed on the basis of the
subsistence allowance is not acceptable. Rule 49 of the Rules refers to 'basic
pay' and Rule 1303 of the Railway Establishment Code refers to 'amount
drawn'. A combined reading of these two provisions shows that iffull basic
pay is 'emoluments', that being the monthly amount drawn, then 75% of the F
full basic pay will also be 'emoluments' in the case of a person under
suspension, it being the amount drawn month by month by the railway
servant. Thus the first condition is satisfied. The other requirement of the
definition of 'emoluments' for purpose of pension is that the amount is to be
computed on the basis of emoluments drawn during the 10 months before G
retirement. This condition cannot be disregarded by the respondents. Thus
, .. both ingredients of the definition of 'emoluments' are satisfied. Further,
' Rule 49(2) specifically requires that the scales as revised w.e.f. 1-1-1986 are
to be taken into account as per the Railway Services (Revised Pay) Rules,
1986. This sub-rule cannot be allowed to be disregarded by the respondents.
(132-E; 133-D-E-F) H
•

124 SUPREME COURT REPORTS [1999) SUPP. 1 S.C.R.

A 5. The appellant is not asking that his pension is to be fixed on the
basis of the full salary payable in the 10 months before his compulsory
retirement on 25-11-1982. The appellant's plea is that the pension is to be
fixed on the basis of the subsistence allowance fixed and drawn by him in
the 10 months preceding the date of his compulsory retirement i.e. 25-11-
B 1982. That has been fixed on the basis of the scales revised w.e.f. 1-1-1986.
This plea is certainly permissible under the Rules. On the other hand, if the
emoluments drawn before suspension i.e. average during 10 months before
1982-then that will amount to going by the pre-1982 emoluments while the
Rule requires that the emoluments during 10 months before retirement are
to be taken into account. [133-G-H; 134-A]
c CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4323 of
1999.

From the Judgment and Order dated 11.10.96 of the Central Administrative
Tribunal, Chandigarh in O.A. No. 423/HR/1994.
D /
In-person for the Appellant.

I
K.C. Kaushik and Ms. Sushma Suri for the Respondents.

The Judgment of the Court was delivered by
E M. JAGANNADHA RAO, J. Leave granted.

This is an appeal by the appellant (party-in-person) against the judgment
of the Central Administrative Tribunal, Chandigarh Bench, in O.A.No. 423/
HR/94 dated 11.10.96. At the time of the admission of the Special Leave
Petition on 17.2.98, limited notice had been issued restricting the dispute to
F
the question whether pension and retiral benefits are to be computed on the
basis of revised scales of pay. That order reads as follows:

"The grievance of the petitioner appears to be that though pension
payment order has been made in his favour but the pension has not
G been calculated at the revised pay scales. It is submitted that none
of the retiral benefits have been calculated at the revised scales. Issue
,,
notice to the respondents limited to the said question".

At the outset, we may state that we are concerned in this case with
compulsory retirement of a government servant as a matter of punishment
H after a regular disciplinary inquiry. We are not here concerned with a case
R.P. KAPUR v. U.0.1. [M. JAGANNADHA RAO, J.] 125

where a public servant is retired compulsorily in public interest. A
The facts of the case, relevant to the dispute, are as follows: The
appellant joined service on 19 .11.1971 in the Indian Railway Service of Signal
Engineers (Class II). On the ground of certain misconduct, he was suspended
from service on 21.1.1982, pending a disciplinary inquiry. At the conclusion
of the inquiry, he was compulsorily retired under an order dated 17.11.1992, B
after due consultation with the Union Public Service Commission. The material
part of that order which became effective from the date of its service, namely,
25.11.92, reads as follows:-

"The President has, therefore, decided to impose on Sri R.P. Kapur, a
penalty of compulsory retirement from service with the condition that C
while the payment during the entire period of suspension from 21.1.1982
to the date of service of this order, will be restricted to the subsistence
allowance drawn, this period may be allowed to count as qualifying
service for pension but for no other purpose."

On 28.5.93, an order was passed by the Railways (P.52 of the paper D
book) that "since the appellant was paid only subsistence allowance during
the period of suspension upto the date of compulsory retirement, the relevant
period of I0 months for calculation of average emoluments for pension would
be the one relating to IO months period preceding 21.l.1982", i.e. the date on
which he had been initially placed under suspension. In other words, instead E
of computing the pension on the basis of the average emoluments i.e.
subsistence allowance drawn in the 10 months before 25.11.92, the date of
compulsory retirement, it was proposed to compute the pension on the basis
of the average emoluments, namely the pay drawn during the I 0 months
before the order of suspension dated 21.1.1982. The result was that the
appellant became disentitled for computation on the basis of 75% of the pay F
as revised w.e.f. l. l.1986.

On the basis of the above order dated 28 .5 .1993, the impugned order
dated 25.6. 1993 (see P. 39-40 of the paper book), was passed by the
respondents taking the 10 months 'pay' before suspension 21.1.1982 at G
Rs.1250 p.m. They arrived at a monthly average of Rs.1618.22 and computed
the pension at Rs.518, deducted Rs. l 71 being 1/3 of the pension commuted,
.and together with other inputs arrived at a figure of Rs.1178 p.m. w.e.f.
25.11.1992. Family pension and other retiral benefits were also computed on
that basis. It appears from the counter filed on 9.3.99 by the respondents, that
pursuant to certain orders in O.A.265 of 1994 dated 4.7.96 of the Central H
126 SUPREME COURT REPORTS [1999] SUPP. l S.C.R.

A Administrative Tribunal, Chandigarh Bench, the above order was slightly
modified by arriving at Rs.1668.22 as the monthly average and pension was
fixed at Rs.529 and brought on par w.e.f. l. l.86 at Rs.1192 p.m. plus variable

-
Dearness allowance. These figures were based on the average emoluments
ten months prior to 21.1.1982 and not the average of the subsistence allowance
B paid during 10 months before 25 .11.92.

The appellant has placed on record the orders of the Chief Personnel
Officer, N.E. Railway (at P.42 of the paper book) dated 4/5.10.1988 to show that
after 1.1.1986, initially his pay was computed in the revised-scale of Rs.2200-
4000 and fixed at Rs.2650 p.m. w.e.f. 1.1.86 and on that basis his subsistence
C allowance at the rate of 75% of the pay was fixed as above under sub rule
(ii) of Rule 2043 (FR 53) R-11. That order reads as follows:

"In terms of Central Administrative Tribunal, Guwahati's Judgment in
case NO.GC 171/87, the pay of Shri R.P. Kapur, (ASTE, under
-C
suspension) in the revised scale of Rs.2200-4000 (RSRP) is fixed @Rs.
2650 with effect from 1.1.86.
D
This.has been certified by the FA & CAO/EGA/Maligeon vide his
endorsement No.Nil dated 3.10.89.

Since Shri R.P. Kapur, is under suspension, subsistence allowance
at the rate of 75% of the pay fixed as above may be drawn/adjusted
E accordingly in terms of sub-rule (ii) of Rule 2043 (FR 53) R-ll.
Sd/-(Illegible)
For Chief Personnel Officer
N.F. Railway
No.202E/2/60(0) Loose
F Dated 4/5.10.1988"
(It may here be noted that while according to the appellant, after
1.1.1986, the pay was re-fixed at Rs.2650 p.m., the counter affidavit of the
respondents in the Tribunal put the re-fixation after l. l.86 at Rs.3300 p.m.).

G The appellant, therefore, contends that when the subsistence allowance
is 75% of pay instead of adopting the 75% of the average of 10 months pay
i.e. average of .Rs. 2650 p.m. for IO months (or Rs.3300 as stated in the
counter) - being the amount per month paid in the last 10 months before the
compulsory retirement on 25.11.1992. - the respondents have wrongly computed
the pension and all other retiral benefits illegally on the basis of Rs.1250 p.m.
H the pay during the 10 months preceding the order of suspension dated
R.P. KAPUR v. U.0.1. [M. JAGANNADHA RAO, J.] 127
21.l.82. A
We shall now refer to the response of the respondents in their initial
counter affidavit filed before the Tribunal which, on its face, appears to be
self contradictory. It is stated there ( P.47 of the paper book) that the Railway
Board in consultation with the Department of Pension and Pensioners' Welfare
have taken the view that "since the petitioner was paid only subsistence B
allowance during the period of suspension, the relevant period of I 0 months
for calculation of average emoluments for the pension should be the one
relating to I 0 months period preceding 2 I. I. 82, i.e. the date on which the
petitioner had been kept under suspension". The above contention in the
counter is obviously based on the order dated 28.5.93 referred to earlier. It is C
then stated in the counter rather curiously that even if the average emoluments
are fixed as per the pay revision w.e.f. l. l.86, the pension will not increase.
This peculiar logic in the counter is worth quoting:

"It is pertinent to mention here that even though the pension was
calculated on the basis of pre-revised scale as on l. l .86, the pension D
of the petitioner has been fixed at Rs.1178.00 which is equivalent to
the revised pay scale as on 1.1.86 plus normal relief as admissible from
time to time to the pensioners. Therefore, it is implied that the petitioner
has been paid his due pension equivalent to the revised pay scale as
admissible in such case. If his revised pay of Rs.3200 were taken into E
consideration for the purpose of calculation of pension, he would be
getting the same pension i.e. Rs.1178.00. Therefore, the prayer of the
pensioner has got no merit and deserves to be dismissed."

It is not clear, mathematically how the pension computed on the pay
drawn as per the pre-revised scale (Rs.1178 or Rs.1192 p.m. as the case may F
be), can be the same even ifit computed on the basis of the pay revised w.e.f.
l.l.86 i.e. Rs. 2650 (or Rs.3300 p.m.).

It was stated in another para ( para 4.11) of the same counter filed in
the Tribunal that "even though the pay of the petitioner was fixed in revised G
scale of pay Rs.3000-4500, he did not draw the pay because of the fact that
he was placed under suspension w.e.f. 21.1.82 and he was paid only the
subsistence allowance during this period from 2 l. l.82 to 25.11.92 and not
'pay' as stated by the petitioner". It was further stated (para 4.12)" ......... the
calculation of pension, gratuity and commutation was correctly done and
there is no anomaly in calculation taking into account the pay of the petitioner' H
128 SUPREME COURT REPORTS [1999] SUPP. I S.C.R.

A immediately before his suspension w.e.f. 21. l.82". What the respondent meant,,
was that inasmuch as the appellant did not draw "full pay" as revised from
1.1.1986 but only "subsistence allowance" on such revised pay, he co~ld not
claim any computation to be made on the basis of the subsistence allowance
between 1981 to 1992. The reason was that pension was to be based on full
B pay. Full pay was drawn only before the suspension in 1982.

The appellant filed a rejoinder before the Tribunal and submitted that
the above method of computation wa's not correct.
The O.A. was dismissed by the Tribunal on 11.10.96 holding that the
contention of the respondents was correct and that the appellant's contention,
C if accepted would amount to treating the period of suspension as on duty.
It was stated in that order of the Tribunal that the dismissal of the O.A. would,
however, be subject to the result of O.A.267/HR/94 where the order of
compulsory retirement was under challenge. A review petition filed by the
appellant was dismissed on 17.12.1996 holding that the appellant's "contention
D that the period of suspension from 21.1.82 to 25.11.92 should be treated as
period spent on duty" could not be accepted in view of the terms of the order
of compulsory retirement.
Aggrieved by the judgment of the Tribunal dated 11.10.96, this appeal
has been filed. Before us, the appellant has raised the same contentions as
E he raised before the Tribunal.
A counter has been filed by the respondents in this Court on 15. l 0. 98

-.
contending that in the circumstances of the case, the appellant is to be treated
as one under suspension till 25.11.92, the date of compulsory retirement. The
period under suspension "may count for any specific purpose e.g. qualifying
F service/leave etc. provided the competent authority passes a specific order
to that effect." The President has passed a specific order that the period in
question may count as qualifying service for the purpose of pension and not
for any other purpose. "The special dispensation was made by the
Disciplinary Authority only to help the petitioner for spending JO years
G under suspension". It is further stated that "under Rule 502 of Railway
Manual of Pension Rules, 1950, average emoluments should be determined
with reference to emoluments drawn by a government servant during the last
10 months of his service". The said rule, it is said, has laid down that "if
during the last l 0 months of his service a government servant had been under
suspension, the period whereof does not count as service, the aforesaid
H period of suspension should be disregarded in the calculation of the average
R.P. KAPUR v. U.0.1. [M. JAGANNADHA RAO, J.] 129

emoluments and equal period before the 10 months shall be included".* Then A·
it is stated:

"The petitioner had been under susptm.sion for more than 10 years
before his compulsory retirement and, therefore, even an equal period
of JO months preceding the JO months of his retirement would fall
within the suspension period during which he had drawn only B
subsistence allowance. Thus, if the whole period of the suspension
period is ignored the relevant emoluments will be one relating to the
IO months period preceding 21.2.82 from which he was placed under
suspension".

In other words, it is accepted in the counter that the "suspension period is C
ignored". Then it is further stated that (see P.92 of the paper book) there is
a distinction between 'subsistence allowance' and 'pay' and that pension can
be only on 'pay' and that hence one has to go back to the period IO months
before 21.1.82, the date of suspension. Then comes an important plea that for
the peculiar contingency arising in the case of the appellant, there is no D
provision in the Rules which permits the computation of pension on
subsistence allowance, i.e. even though such subsistence allowance has been
computed at 75% of the pay as revised w .e.f. 1.1.1986. That para in the counter
reads as follows:

"Under the existing rules, there is no provision to take the average E
of the subsistence allowance for calculating the average emoluments
for purposes of pension. Since the petitioner did not draw regular
pay and allowance in the revised scales of pay w.e.f. 1.1.86 to 25.11.92,
there is no scope to calculate his average emoluments for the purpose
of pension and other pensionary dues as per the revised pay scales".
F
After the appellant filed his rejoinder, this Court directed the respondents
to produce the relevant Rules. Thereafter, a further additional counter was
filed on 9.3.99. Reference was made there to Rule 50 of the Railway (Pension)
Rules, 1993. That Rule is set out in the counter as under:

"Rule 50 - Average Emoluments : Average emoluments shall be G

*We may here point out that Rule 502 of the 1950 Rules has been examined by
us from the Manual. It does not contain any such provision as quoted above. The
provisions quoted are obviously from Rule 50 of the Railway Services (Pension) Rules,
1993 which replaced the Manual of 1950. In fact, in the additional counter filed on
9.3.99 the respondents have relied upon and set out only Rule 50 of the 1993 Rules. H
I'
'
~

130 SUPREME COURT REPORTS [1999] SUPP. 1 S.C.R.
-

A determined with reference to the emoluments drawn by a railway '-

servant during the last ten months of his service.

NOTE I:- If during the last ten months of his service a railway
servant had been absent from the duty on leave of which leave salary
is payable or having been suspended had been reinstated without
B forfeiture of service, the emoluments which he would have drawn, had
he not been absent from duty or suspended, shall be taken into
L
account for determining the average emoluments. '
Provided that any increase in pay (other than the increment referred
to in Note 3 ) which is not actually drawn shall not form part of his
C emoluments.

NOTE 2:- If, during the last ten months of his service, a railway
servant had been absent from duty on extraordinary leave, or had
been under suspension the period whereof does not count as service, ..._
the aforesaid period of leave or suspension shall be disregarded in the
D calculation of the average emoluments and equal period before the ten
months shall be included". (This rule corresponds to FR 34).

It is stated in the counter-affidavit that "as per rule, if an empfoyee is
awarded a major P.enalty and the suspension period is treated as 'wholly
justified, in that case, such employee is not entitled for any benefit of service
E and the period of suspension cannot be treated as 'on duty"'. It is stated that
the President, who is the Disciplinary Authority, has passed a specific order
that while the payment during the entire period of suspension will be restricted
to 'subsistence allowance only', the said period may be allowed to be counted
as qualifying service for the purpose of pension and not for any other
p purpose. Hence, the petitioner is not entitled to get any other benefit for the
suspended period, i.e. 21.1.82 to 25.1 I .92. On the above reasoning, it is
contended that the "petitioner is not entitled for pension on the revised pay-
scale in the light of the aforesaid rules".

These are the relevant orders and the relevant contentions on both
G sides.
We have now to decide whether the above contentions raised in the
various counter-affidavits are correct.

We shall first proceed to analyse Rule 50 of the Railway Services
H (Pension) Rules, 1993. The said Rule speaks of "average emoluments drawn"
R.P. KAPUR v. U.0.1. [M. JAGANNADHA RAO, J.] 131
by a railway servant during the last ten months of his service. Note I below A
the said rule, it will be seen, deals with a case of 'reinstatement' and hence
Note l cannot obviously apply. But it is necessary to explain what it means.
It states that if the person suspended is reinstated without forfeiture of
service, the emoluments which .be "would have drawn" shall be taken into
account.
B
There is a proviso to Note l. It states that increase in pay which is 'not
actually drawn' shall not form part of his emoluments. Considerable reliance
has been placed on this proviso by the respondents to contend that the
appellant has not drawn the full revised pay w .e.f. l. l .1986 but he has drawn
only subsistence allowance. I~ our view, this proviso cannot apply because C
Note l itself, as seen above; dces not apply. However, what the proviso
means is that increase in pay not actually drawn i.e. which is only notionally
fixed but without a right for payment - as in E. Gopalakrishna v. Union of
India, [1995] Supp. 4 SCC 205 - cannot go into the computation.

We then come to Note 2 on which greater reliance has been placed in D
the counter affidavits. If one reads the Note 2 carefully, it is clear that in cases
where during the last ten months of one's service, the person has been under
suspension, - the period whereof does not count as service,- the said period
of suspension is to be disregarded while computing pension.

Reading it carefully, it will be seen that only if the suspension period E
is not to count as service, the said period is to be disregarded. In our opinion,
the words 'the period whereof does not count as service' are important and
have to be given effect to. On the other hand, if the suspension period is
liable to be reckoned, then obviously the said period cannot be disregarded.
In our view, the respondents have obviously ignored the said word 'not', and F
clearly misinterpreted the said Note II below Rule 50. In the case of the
appellant, - in tenns of the very language of the order of compulsory retirement
passed by the President of India, the period of suspension is to count
towards "qualifying service". If the President, as the Disciplinary Authority,
has directed that the period of suspension shall count as qualifying service
- it is, in our opinion, wholly impermissible for the Railways to omit the said G
period from consideration on the specious ground that before 25 .11. 92 appellant
has drawn only subsistence allowance and not pay. The very purpose of the
order of the President cannot thus be allowed to be defeated.

We m~y also point out that under Rule 37 of the Pension Rules 1993,
it is stated that where "a railway servant is kept under suspension pending H
132 SUPREME COURT REPORTS [1999) SUPP. I S.C.R. ,

A inquiry into his conduct, the period of such suspension shall count as
qualifying service only where on conclusion of such inquiry, he h~ been
fully exonerated or the suspension is held to be wholly unjustified and in ·
other cases, the period of such suspension shall not count unless the
authority competent to pass orders under the rule governing such cases
expressly declares that it shall count to such extent as that authority may
B declare ...". In the present case, there is an express direction by the President
to count the service, within this Rule. Therefore, once the suspension period
is directed to be counted for computing the qualifying service, it is the
emoluments drawn at the end ofthe period just before retirement that become
relevant and not the 'pay' drawn before the commencement of suspension,-
C which in this case goes to a period ten years before 1992. Further, it will be
noticed that the appellant has put in less than 20 years, by the date of his
suspension on 21.l.1982 he having been recruited in 1971. From 1971, the
service upto 21.1.82 will be less than 20 years, and if we accept the respondent's
contention no pension can in fact at all be paid. It is not the respondents'
contention that no pension need be paid. This is again one· more reason as
to why the contention of the respondent is to be rejected.

We shall next refer to the other contention that the appellant has not .
drawn "emoluments" which can amount to 'pay' during suspension '.and that
he has only drawn 'subsistence allowance' and that that cannot be described
E as 'pay'. It is the respondent's contention that unless ·emoluments' are drawn
the 'average emoluments' cannot be computed. The said contention, in our
opinion, is based upon a misapprehension that 'subsistence allowance' does
not come within the definition 'emoluments'. The respondents in this context
have failed to notice Rule 49 which immediately precedes Rule 50. As we shall
presently show, a proper interpretation of Rule 49 read with Rule 1303 of the
F Railway Establishment Code ( Part II) will lead to the conclusion that.
'suspension allowance' also comes within the definition of 'emoluments'.

Rule 49 defines 'Emoluments' as follows:-

"Rule 49: Emoluments:-The expression (a) 'emoluments' for the
G purpose of calculating various retirement and death benefits, means
the basic pay as defined in clause (i) of Rule 1303 of the Code (i.e.
the Railway Establishment Code) which a railway servant was receiving
immedi!ltely before his retirement or on the date of his death;
'
(b) 'P,ay' in these rules means the pay in the revised scales under the ·
H Railway Services (Revised Pay) Rules, 1986."
R.P. KAPUR v. U.0.1. [M. JAGANNADHA RAO, I.] 133 ·

Inasmuch as Rule 49 refers to Rule 1303 of the Railway Establishment A
Manual ( Vol.2), we shall refer to the said rule 1303, (which corresponds to
F.R.9(2 l)(a)). That Rule reads as follows:

"Rule 1303: Pay: Pay means the amount drawn monthly by a
government servant as:-
B
(i) the pay, other than special pay ....

(ii) overseas pay, special pay and personal pay; and

(iii) any other emoluments which may be specifically classified as pay
by the resident.
c
Average pay - Average Pay means the average monthly pay earned
during the 12 complete months immediately preceding the month in
which the event occurs which necessitate the calculation of average
pay".

Rule 49 refers to 'basic pay' and Rule 1303 refers to 'amount drawn'. D
In our view, a combined reading of Rule 49(1) and Rule 1303 above referred
to show that if full basic pay is 'emoluments', that being the monthly amount
drawn, then the 75% of the full basic pay will also be 'emoluments' in the case
of a person under suspension, it being the amount drawn month by month
by the government servant. Thus the first condition is satisfied. The other E
requirement of the definition of 'emoluments' for purpose of pension is that
the amount is to be computed on the basis of emoluments drawn during the
10 months before retirement. This condition cannot be disregarded by the
respondents. Thus both ingredients of the definition of 'emoluments' are
satisfied. Further, it will be noticed that Rule 49(2) specifically requires that
the scales as revised w.e.f. 1.1.1986 are to be taken into account as per the F
Railway Services (Revised Pay) Rules, 1986. This sub-rule cannot be allowed
to be disregarded by the respondents.

In view of the above rule position, the contentions raised in the counter
cannot be accepted. The Tribunal, in our opinion, is wrong in thinking that G
if the subsistence allowance before 1992 is adopted, it will amount to treating
period of suspension as on 'duty'. We may point out that the petitioner is
not asking that his pension is to be fixed on the basis of the full salary
payable in the 10 months before 25.11.92. The appellant's plea is that the
pension is to be fixed on the basis of the subsistence allowance fixed and
drawn by him in the l 0 months preceding 25.11.92. That has been fixed on H
134 SUPREME COURT REPORTS [1999) SUPP. 1 S.C.R.

A the basis of the scales as revised w .e.f.' 1.1.1986. This plea, in our opinion, is
certainly permissible under the Rules. On the other hand, if we have to go
back to the emoluments dr~wn before suspension i.e. average duriqg l 0
months before 1982 - then that will amount to going by the pre-1982 emoluments
while the rule requires that the emoluments during l 0 months before retirement
are to be taken into account.
B
For all the reasons given above, we are of the view that the appellant
is entitled to have his pension fixed on the basis of the revised subsistence
allowance fixed and drawn by him as per the order of the Chief Personnel
Officer dated 4/5/.10/1988, as per the pay revision w.e.f. 1.1.1986. We may add
C that it is not clear whether the revised pay has been fixed at Rs.2650 p.m. w.e.f.
1.1.86 as per the order filed by the appellant or if it has been fixed at Rs.3300/
- p.m. as admitted by the respondents in the counter filed before the
Administrative Tribunal. We, therefore, declare and direct as follows. If the
revised pay is indeed Rs.2650 p.m. and his subsistence allowance is 75%
thereof, the appellant will be entitled to the 75% ofRs.2650/- to be treated as
D the 'emoluments' for the previous 10 months before 25.11.92 till which date
he has been in service (even ifhe was under suspension). Average emoluments,
for purposes of pension have to be fixed on that basis. If the re- fixation of
pay is Rs.3300 as stated in the respondents' counter in the Tribunal, the
average emoluments have to be worked out on the basis of 75% of Rs.3300
E during 10 months before 25.11.92. If on such fixation, the appellant is entitled
to other additions like DA etc. and which are periodically revised, the same
shall also be computed w.e.f. 25.11.1992.

The pension and family pension shall, therefore, be re-computed on the
above basis and paid to the appellant w.e.f. 25.11.1992. The other retiral
F benefits will also be re-fixed on the above basis w.e.f. 25.11.1992 and paid to
him. The computation of the family pension shall also be done on that basis.
On account of the long delay and denial of pension and retiral benefits on
a wrong interpretation of the Rules, we deem it fit to award 12% interest on
all the arrears payable to him on the above basis in respect of pension and
all benefits. Arrears have to be computed with effect from the date of retirement
G on 25. l l .1992. The appeal is allowed as stated above but there will be no order
as to costs.

V.S.S. Appeal allowed.