N.D.P. NAMBOODRIPADversusUNION OF INDIA AND ORS.

                                N.D.P. NAMBOODRIPAD                                   A
                                            V.

                             UNION OF INDIA AND ORS.

                                    APRIL 16, 2004

             [S. RAJENDRA BABU AND P. VENKATARAMA REDDI, JJ.]                         B


              High Court Judges (Conditions ofService) Act, 1954-Schedule 1; Part
        lIJ-Paras 2 (a) and (b)-Kerala Service Rules-Part lJI; Rule 62--Calculation
        ofpension on the basis ofsalary last drawn-Held, salary last drawn includes
        dearness allowance and special allowances-Figures under paras 2 (a) and
                                                                                      c
        (b) should not be added for the purpose of calculation of pension.

               Appellant was a member of the State Higher Judicial Services who
        retired with a pensionable service of 23 years including 8 years as a High
-
        Court Judge. Under Part III of Schedule I to High Court Judges D
    ~


        (Conditions of Service) Act, 1954 as amended by the Amending Acts, 1986
        and 1988, the basic pension for the appellant was fixed at Rs.17,300 per
        annum. The Central Government, by an order issued in April 1987
        rationalised the pension structure of employees who retired before
        1.1.1986. It also issued a separate order in December 1987 revising the
        ordinary pension admissible to High Court Judges under para 2 (a) of Part
                                                                                   E
        III of Schedule I to High Court/Supreme Court Judges (Condition of
        Service) Act, 1954/1958 with effect from 1.1.1986.

               The State Government issued an order in October 1989 extending
        the benefit of the Central Government order issued in April 1987 to retired   F
        High Court Judges with effect from 1.1.1986. Accordingly, the appellant's
        pension was revised to Rs.32,720 per annum with effect from 1.1.1986.
        The appellant's pension was further revised to Rs.37,200 per annum with
        effect from 1.11.1986 after amendment to Para 2(b) of Part III to Schedule
        I of the Act in 1986.
                                                                                      G
              The appellant filed an Original Petition before High Court
        challenging the calculation of pension without including the dearness
        allowance and special allowances in the last pay drawn. A learned Single
        Judge allowed the petitio'n of the appellant and directed the respondents
    ~
        to refix the appellant's pension at Rs. 35,000 per annum from l.l.1986
                                           349                                        H
    350                    SUPREME COURT REPORTS [2004] SUPP. 1 S.C.R.

A and at Rs.47,900 per annum from 1.11.1986; and that the appellant would
    be entitled to all consequential benefits after re-fixation. The Central
    Government filed a Writ Appeal. The Division Bench allowed the writ
    appeal. The review petition filed by the appellant was dismissed by the
    High Court

B         In appeal to this Court, the appellant contended that under Rule 62
    of Part III of the Kerala Service Rules, the pay last drawn shoo.Id include
    dearness allowance and special allowances for calculation of pension; and
    that Rule 62 is an inclusive provision which includes dearness allowance
    and other allowances; that the High Court was not correct in not adding
C   the figures under para 2 (a) and (b) of the Act for fixation of pension.

          The Central Government contended that under Rule 62 of Part III
    of the Kerala Service Rules, only dearness pay is considered for fixation
    of pension and not dearness allowance and special allowance.

D         Partly allowing the appeals with directions, the Court

          HELD:l. The phrase "and includes" in Rule 62 o( Kerala Service
    Rules cannot be taken to mean "and only includes". The first part of the
    definition cannot be taken away by the inclusive definitions contained in
    clauses (a) and (b) of Rule 62. Therefore, the respondents are not justified
E   in not taking intO account the dearness allowance and special allowance
    drawn by the appellant for the calculation of the appellant's pension. For
    the purpose of calculations, the emoluments received as last payment
    including dearness allowances be considered and .not merely the last salary.
                                                             [353-H; 354-A-C]
F         ML. Jain~ Union of India, (1985) 2 SCC 355 distinguished.

        2. Under the notification/order dated 18.12.1987 issued by
  Government of India, what is revised is ordinary pension under para 2
  (a) and not the special additional pension under para 2(b) of Part III ·of
G Schedule I to the High Court/Supreme Court Judges (Condition of Service)
  Act, 1954/1958. Each of them have different characteristics. Therefore,
  the view of the Division Bench that the figures under clauses (a) arid (b)
  of para 2 of Part III of the Schedule I to the Act cannot be added for the
  purposes of finding out the revised pension is correct. Paras 2 (a) and (b)
  of Part II of 1st Schedule of the Acts and Rules governing the service
H condition of the High Court Judges should not be taken into account in
            N.D.P. NAMBOODRIPAD v. U.0.1. [RAJENDRA BABU; J.]              351

order to find out the amount of revised pension. There should be no ceiling        A
imposed on the amount the appellant can receive under para 2 (b) of the
Act. (354-F-H; 355-E]

        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2327-2328 of
1999.
                                                                                   B
      From the Judgment and Order dated 10.11.97 of the Kerala High Court
in R.P. No. 299/97 in W.A. No. 804 of 1992.

        T.L.V. Iyer, Abhay Kumar and Subramonium Prasad for the Appellant ..

     N.N. Goswami, Ramesh Babu, M.R., Ms. Shashi Kiran, S.N.Terdol,                C
B.K. Prasad and P. Parmeswaran for the Respondents.

        The Judgment of the Court was delivered by

      RAJENDRA BABU, J. The appellant was a member of the Higher ,
Judicial Services of the State of Kerala and was elevated as a Judge of the , D
High Court of Kerala in 1972. He retired from service with 23 years of
pensionable service; 8 years of which he served as a High Court Judge.

      The Pension and other benefits of High Court Judges are determined on
the basis of Part III of the 1st Schedule of the High Court Judges (Conditions
of Service) Act, 1954, as amended by the Amending Acts, 1986 and 1988.             E
In accordance with these proyisions, the basic pension payable to the Appellant
was fixed at Rs. 17,300 p.a.

       The U.0.1. issued order O.M. dated 16.04.1987 rationalizing the pension
structure of employees who retired before 1.1.1986. It is also stated in the
said order that separate orders .vis-a-vis the Pension of the retired High Court   F
and Supreme Court Judges would be issued. Accordingly the Government of
India in a Notification dated 18.12.1987, ordered to revise the ordinary pension
admissible to High Court Judges under clause 2(a) of Part III of the Ist
Schedule of the Act with effect from 1.1.1986.

      In G.O. Ms. 228/89/GAD dated 19.10.1989 the Government of Kerala
                                                                                   G
                                                                                   1


issued orders extending the benefit of O.M. dated 16.04.1987 to the retired
Judges of the High Court with effect from 1.1.1986.

     Ac~ordingly, the appellant's pension was revised to Rs. 32,720 per
annum with effect from l. l .1986 to 3 l. l 0.1986. Considering the amendment      H
    352                     SUPREME COURT REPORTS [2004) SUPP. I S.C.R.

A to Para 2(b) of Part III to Schedule I of the Act by Act 38 of 1986, whereby
    the figures of Rs. 700 and Rs. 3500 were substituted with figures of Rs. 1600
    and Rs. 8000, there was a further increase in the appellant's pension to Rs.
    37,220 per annum with effect from 1.11.1986.

          Aggrieved by this order, the appellant filed O.P. No. 203 of 1990
B before the High Court of Kerala.
          A learned Single Judge vide judgment dated 12.03.1992 allowed the
    Original petition and directed the Respondents to refix appellant's pension at
    Rs. 35,000 per annum from l.l.1986 and at Rs. 47,900 per annum from
C   1.11.1986. He also held that the appellant would be entitled to all other
    consequential benefits according to this re-fixation of pension.·

          Aggrieved by this judgment, the Respondent No. 1 filed W.P./Appeal
    No. 804/1992 before the Division Bench of the High Court of Kerala. The
    Division Bench vide judgment dated 10.07.1997 allowed the appeal, inter
D   alia, holding that the method used by the U.0.1. in calculating the pension
    was quite correct and held that the method used by the learned Single Judge
    in calculating the pension by adding the figures under clauses (a) and (b) of
    para 2 of Part III of the lst Schedule of the Act in order to find out the
    amount of revised pension, was not correct.

E         Aggrieved, the appellant filed Review PJtition No. 299/1997 before the
    High Court. The High .Court vide Order dated 10.11.1997 dismissed the
    Review Petition, inter alia, holding that the appellant had no case that the
    order sanctioning pension to the appellant is illegal. Hence these appeals by
    special leave.

F         The two issues which arise for consideration are:

           (I)    Whether the High Court's fixation of the pension under clause
                  2(a) is correct?
           (II) Whether the High Court was correct in not adding the figures
                under para 2 els. (a) and {b) of Schedule I, Part III of the Act in
G
                order to find out the revised amount of pension and whether a
                ceiling was imposed under clause 2(b) ?

    ISSUE NO. I

                 The appellant claims that the decision of the Division Bench
H
          N.D.P. NAMBOODRIPAD v. U.O.I. [RAJENDRA BABU, J.)                 353

regarding the fixation of the pension due to the appellant under cl. 2(a) is       A
incorrect. The appellant claims that G.O. (P) No. 760/89/FW dated 26.12.1989
(Annexure P-7) states that pension has to be determined at 50% of the average
emoluments in all cases. Accordingly, he claims that Rs. 4237 was the last
emolument he received prior to his retirement and it is one half of this
amount and not the salary of Rs. 3500 that should be taken for fixation of
pension under cl. 2(a). The appellant arrives at this figure of Rs. 4237 by        B
including dearness allowance and special allowances.

      This issue was not addressed by the Division Bench in the Writ Petition
and in the Review Petition it rejected it on the ground that in the case of ML.
Jain v. Union of India, [1985] 2 SCC 355 Rs. 3500 was taken as the amount          C
for calculating the pension. Further, it states that the learned Single Judge in
O.P. No. 203 of 1990 had also taken the same amount for purposes of
calculation.

     The appellant, however, places reliance on Rule 62 of Part III of the
Kerala Service Rules, which reads as follows :-                                    D
        "Rule 62. The term emolument when used in this part means the
        emolument which the employee was receiving immediately before
        his retirement and includes :

       (a) pay as defined in Rule 12(23) in Part I of these rules and for pay      E
           of the appointed under rule 9 or rule 31 of the Kerala State and
           Subordinate Service Rules.
       (b) The dearness pay the employee was actually in receipt of."

       It is the respondents' contention that the appellant was getting dearness
allowance and special allowance and not dearness pay, to attract Rule 62. In       F
fact, the respondents rely on this very Rule to justify why dearness allowance
and other special allowance were not added to the last salary of Rs. 3500 for
the purposes of calculating the appellants pension.

      The appellant, however, contends that since the first part of the rule
means "emolument which the employee was receiving immediately before his           G
retirement" any such emolument cannot be taken away by the inclusive
definition contained in clause (b) of Rule 62.

      The appellant's contention seems to be correct in law. The phrase "and
includes" in Rule 62 cannot be taken to mean "and only includes". The first        H
    354                       SUPREME COURT REPORTS (2004) SUPP. I S.C.R.

A part of the definition cannot be taken away by the inclusive definitions
    contained in clauses (a) and (b) of Rule 62.

           Therefore, the respondents are not justified inasmuch as the dearness
    allowance and special allowance drawn by the appellant was not taken into
    account for the calculation of the appellant's pension. It is true that in the /st
B   ML. Jain case, [1985) 2 SCC 355, the calculations were adopted taking the
    last salary into consideration. However, the above point of whether the last
    received emoluments inclusive of dearness allowance and other special
    allowances should be taken for the purposes of calculating pension or the last
    salary drawn should be taken was not addressed in that case.
c         Accordingly, the calculations should adopt Rs. 4,237, which is inclusive
    of dearness allowance and special allowances and not Rs. 3,500 as the basic
    amount.

    ISSUE NO. II
D         With regard to the issue as to whether the two amounts covered by Cls.
    (a) and (b) of para 2 of Part III of the lst Schedule to the Act can be put
    together to find out the revised rate from the table attached to the order dated
    16.4.1987, which rationalised the pension structure of employees who retired
    before l. l .1986; the Division Bench held that such a course is not permissible.
E
          Clause. (a) of para 2 deals with the pension to which a Judge is entitled
    under the ordinary rules of his service. Clause. (b) refers to a special additional
    pension per annum in respect of each completed year of service to be paid
    to the retired High Court Judge.

F          The notification/order dated 18.12.1987 clearly states that the "ordinary
    pension admissible to High Court/Supreme Court Judges under para 2(a) of
    Part III of the l st Schedule to the High Court/Supreme Court Judges (Condition
    of Service) Act, 1954/1958 respectively may be revised with effect from
    1.1.1986 .."

G         Thus, it is evident that what is revised under the order is ordinary
    pension under para 2(a) and not the special additional pension under para
    2(b) and each of them have different characteristics.

          Therefore, the view of the Division Bench that the figures under clauses
    (a) and (b) of para 2 of Part III of the 1st Schedule of the Act cannot be
H
          N.D.P. NAMBOODRIPAD v. U.0.1. (RAJENDRA BABU, J.]               355

added for the pur1-1oses of finding out the revised pension is correct,          A
     The appellant further contends that the Division Bench in its calculation
of pension makes the error of restricting it to the ceiling of Rs. 8000 laid
down in clause (b ).

       The ceiling was categorically rejected by this Court in the third case    B
filed by Shri ML. Jain, [1991] l SCC 644. This contention of the appellant
is correct. However, even though the Division Bench makes an order while
imposing the ceiling, it can be seen that the respondents have however
authorised the appellant the amount of Rs.12,800. Therefore, despite the
High Court's judgment the respondents have actually not imposed the ceiling
of Rs.8,000. Hence there is no requirement to pass any specific direction in     C
this regard.

     Taking into consideration the above, these appeals are partially allowed
and order under appeal stands modified with the following directions :-

       (a) For the purpose of calculations the emoluments received as last       D
           payment including dearness allowance and other special
           allowances be considered and not merely the last salary of Rs.
           3500.
       (b) Clauses 2 (a) and (b) of Part II of lst Schedule of the Acts and
           Rules governing the service condition of the High Court Judges        E
           should not be taken into account in order to find out the amount
           of revised pension.
       (c) There should be no ceiling imposed on the amount the appellant
           can receive under cl. (b) of the Act.
                                                                                 F
       (d) The respondents shall recalculate the pension as indicated above
           within a period of three months and pay, if any, arrears are due
           within three months thereafter.

B.S.                                                 Appeals partly allowed.