Mrs. Sujata V. Manohar, J. - (1.) Leave granted in S. L. P. (C) No. 2158 of 1992.
(2.) The appellants are the employees of the Life Insurance Corporation of India at Kozhikode. They are ex-servicemen who were re-employed by the Life Insurance Corporation of India after their discharge from military service. There is a gap of more than three years between their discharge from military service and their appointment in the Life Insurance Corporation of India. The dispute raised in this appeal relates to the fixation of salary of these ex-servicemen on their re-employment in the Life Insurance Corporation of India. Along with this appeal, Writ Petition No. 437 of 1993 has also been heard. This petition is filed by the Ex-servicemen Life Insurance Corporation Employees Association and the issue raised in this petition is identical with the issue raised in the appeal. The dispute relates to ex-servicemen who have been appointed after a gap of three years or more from their discharge from military service to the Life Insurance Corporation of India and pertains to those who have been so appointed after 1-1-1988.
(3.) The dispute pertains to the interpretation of instructions dated 2nd of June, 1989 issued by the Central Office of the Life Insurance Corporation of India relating to re-employment of ex-servicemen in the Life Insurance Corporation and their pay fixation. The relevant Paragraphs of these Instructions are set out below:- "3. Pay Fixation on Re-employment: 3. 1:Basic Salary of a re-employed Ex-servicemen shall be fitted at the minimum of the scale in which he is appointed. However, if the gross salary as per 'Y' below at the minimum of the scale does not produce an amount equal to or more than the last drawn gross salary as per 'X' below in the Defence Services, additional increment/s as may be necessary, over minimum of the scale shall be allowed to make up the difference and; thus; provide protection to the last drawn gross salary. 3. 2:If in exceptional cases, fitment, even at the ceiling of the entry grade does not provide full protection, personal allowance shall be granted which may be absorbed against future increase in emoluments. 3. 3:'X' i.e. last drawn gross salary in the Defence Service at the time of release shall be the aggregate of the following components:- i) Pay as defined in sub-para 3(ix) of the Dept. of Personnel and Training O.M. No. 3/1/85-East (P II) dated 31-7-1986. Relevant extracts of the O.M. are given in the Appendix 'A'; ii) Dearness Allowances; iii) Additional Dearness Allowance; iv) Interim Relief; v) City Compensatory Allowance; vi) Compensation in lieu of Quarters (C.I.L.o.) House Rent Allowance; vii) Ration Allowance. 3. 4:'Y' i.e. gross salary in L.I.C. shall be the aggregate of the following: i) Basic Salary in which the Ex-serviceman is re-employed; ii) Dearness Allowance; iii) House Rent Allowance; iv) City Compensatory Allowance; 3. 5:Components of last drawn salary in the Defence Services ('X') including such allowances as are indicated at (3.3) above are to be taken into account on the basis of discharge certificate/Last Pay Certificate of the individual employees .......................................... 3. 6:The component of pension will not be considered for pay fixation. 3. 7:If the Ex-serviceman was re-employed within a period not exceeding 3 years from the date of discharge from the Defence Services 'X' (Last Drawn Salary in Defence Services) to be compared shall be as drawn on the date of release of the Ex-serviceman whereas the 'Y' (starting salary in L.I.C) to be compared shall be as on the date of re-employment in L.I.C. 3. 8:If, however, he was re-employed more than three years after the date of discharge from Defence Services 'Y' Salary to be compared shall also be as obtaining on the date of discharge. Corresponding fitment may then be given in the revised scale, where necessary applicable at the time of re-employment of the Ex-serviceman. Example:................ The fitment is to be done notionally and actual benefit may be given from 1-1-1988 as shown in para 4 below. If the basic salary determined on such comparison results in the same or lower than the basic salary at which the employee was fitted on the date of re-employment, the existing salary fitment will continue without any change. 4. If the basic salary determined on such comparison is higher than the basic salary at which the employee was fitted on the date of re-employment, incremental difference that would emerge out of such fitment would be added to individual's basic pay as on 1-1-1988 and arrears released accordingly from 4-1-1988 only. Example:................... 5. Fitment of Ex-servicemen Appointed on or After 1-1-1988: Fitment in these cases will be as per formula given in 3.1 above from 1-1-1988 or the date of appointment in the industry whichever is later. 6. Option-cum-Consent Letter: An option-cum-consent letter in the enclosed format (Appendix 'B') should be obtained from each existing Ex-serviceman employee opting fitment of salary as per these instructions. 7. Fitment of Salary on New Entrants: Fitment of salary of all Ex-servicemen appointed in the industry henceforth shall be governed by these instructions." ;