R.V.RAVEENDRAN, J. - (1.) THE petitioners in all these petitions, served as Medical, Dental and Veterinary officers in the Army Medical Corps (AMC), 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 (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 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 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. 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, 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 10 months of his service. It defined the term 'pay' as basic pay in the revised pay scales. 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 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 the following: i) the existing pension; ii) dearness relief up to CPI 1510 (i.e. @148%, 111% and 96% as the case may be, of basic pension as admissible on 1.1.1996 vide DP and 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. 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 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.
(3.) 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 irrespective of their date of retirement shall not be less than 50% of the minimum pay in the revised scale of pay 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 1.1.1996 retirees): 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 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, such pension shall be reduced pro rata, where the pensioner has 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 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. 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 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 No.1(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. 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 clarified that NPA is not to be taken into consideration after re-fixation of pay on notional basis on 1.1.1986. It is also not to be added to the minimum of the revised scale of pay as on 1.1.1996 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, 1999." [Emphasis supplied] The Circular also directed the Controller General of Defence Accounts to recalculate the pension by excluding NPA from Basic Pay and await further 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.;