Supreme Court of India
STATE OF MADHYA PRADESH & ORS.versusYOGENDRA SHRIVASTAVA
- Citation
- 2009 INSC 1172
- Decided
- 7 October 2009
- Bench
- R V RAVEENDRAN
Holding
Statutory recruitment rules mandating NPA at 25% of pay prevail over executive orders, retrospective amendment cannot affect accrued benefits, and arrears are recoverable only for the three years preceding the original application.
Summary
The case concerned the quantum of Non‑Practicing Allowance (NPA) payable to Medical Officers of the Madhya Pradesh Employees' State Insurance Service. While the 1981 Recruitment Rules stipulated NPA at 25% of basic pay, the officers' appointment letters fixed a lump‑sum amount approximating 25% of the initial pay, which did not rise with subsequent increments. The officers approached the Administrative Tribunal, which ordered payment of NPA at 25% of pay from their dates of joining; the High Court upheld this order. The State appealed, arguing that executive orders and the 2003 retrospective amendment to the Rules could override the original provision and that the claims were barred by limitation. The Supreme Court held that statutory rules prevail over executive orders, that retrospective amendment cannot deprive accrued benefits, and that arrears are recoverable only for the three years preceding the original application. Consequently, the appeal was partly allowed, confirming entitlement to 25% NPA up to 20 May 2003 and limiting arrears to three years.
Issues considered
- Whether the rates of NPA specified in appointment letters and executive orders can prevail over the provisions of the Recruitment Rules.
- Whether a retrospective amendment to the Rules can extinguish the benefit of NPA accrued under the unamended Rules.
- Whether the claim for arrears of NPA is barred by limitation or laches, and if not, what period of arrears is recoverable.
Legislation cited
- Constitution of Indias. Article 309
Subjects
Non‑Practicing AllowanceService RulesRetrospective amendmentLimitationArrearsAdministrative lawArticle 309Employee benefitsPay fixation
Judgment
[2009] 14 $.C.R. 1137
STATE OF MADHYA PRADESH & ORS. A
"
_.. v.
YOGENDRA SHRIVASTAVA
(Civil Appeal No. 3156 of 2007)
OCTOBER 7, 2009
~ B
-I [R. V. RAVEENDRAN AND B. SUDERSHAN
REDDY, JJ.]
~ ""
i
Service Law:
c
Madhya Pradesh Employees' State Insurance Service
(Gazetted) Recruitment Rules, 1981:
r. 5 - Medical Officers - Non-practicing allowance - Rule
providing for NPA @ 25% of basic pay - Appointment letters
specifying NPA as fixed lump sum approximately equal to
D
25% of the minimum pay in the pay scale - Amendment to
the rule by Notification dated 20.3.2003 with retrospective
effect from 14.10.1982 to the effect that NPA would be
payable at such rate as may be fixed by State Government -
HELD: Decision of Tribunal and High Court that the Medical E
Officers concerned were entitled to 25% of their pay as NPA
upheld - The Rules made under Article 309 of the
Constitution clearly provided that the medical officers were
.. •
/
entitled to NPA @ 25% of pay, in addition to the pay in the
pay scale - In fact, it formed part of the pay scale - F
Consequently, whatever was the basic pay, 25% thereof had
to be paid as NPA - Whenever the benefit of increments in
.. the pay-scale or revision in pay scale were extended, NPA
also got correspondingly increased so that NPA always
remained as one fourth of the basic pay - This is the G
.a, interpretation that has been put forth by the Tribunal and
upheld by the High. Court and there is no reason to interfere
with the same.
1137 H
1138 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.
A Fixation of salary and claim for arrears - Limitation -
HELD: Employees are entitled to recover the difference in
NPA only in regard to the salary which accrued due during
the three years prior to the dale of filing of the original
applications by them before the Tribunal and not from the
B date of their appointments - Where the issue relates to
payment or fixation of salary or any allowance, the challenge
is not barred by limitation or the doctrine of /aches, as the
denial of benefit occurs every month when the salary is paid,
thereby giving rise to a fresh cause of action, based on
c continuing wrong - Though the lesser payment may be a
consequence of the error that was committed at the time of
appointment, the claim for a higher allowance in accordance
with the Rules (prospectively from the date of application)
cannot be rejected merely because it arises from a wrong
0 fixation made several years prior to the claim for correct
payment - But in respect of grant of consequential relief of . ·•
recovery of arrears for the past period, the principle relating
to recurring and successive wrongs would apply - Therefore,
the consequential relief of payment of arrears will have to be
E a
restricted to period of three years prior to the date of the
original application - As a consequence, if the employers, in
pursuance of the orders of the Tribunal/High Court, had paid
the difference in NPA, for any period beyond three years
before the date of the respective original applications, they
will be at liberty to recover the same from the employees
F concerned - Madhya Pradesh Employees' State Insurance
Service (Gazetted) Recruitment Rules, 1981.
Administrative law - Statutory Rules and executive orders
- Conflict between HELD: The contention that the executive
G orders issued from time to time or the appointment letters
issued in accordance with such executive orders will prevail ...
over the Rules cannot be accepted - When there is conflict
between the Statutory Rules and executive orders, the
statutory Rules will prevail - Executive orders cannot be
H made or given effect to in ·violation of what is mandated by
STATE OF MADHYA PRADESH & ORS. v. 1139
YOGENDRA SHRIVASTAVA
~
•
I
,, the Rl!les - If appointment letters provides for payment of
NPA which is ndt in consonance with Rules, they can be
coffected or set right by Tribunals/courts - Madhya Pradesh
A
Employees' State Insurance Service (Gazetted) Recruitment
" Rules, 1981.
Administrative law - Amendment to rules with
8
retrospective effect - HELD: It is no doubt true that Rules
made under Article 309 can be made so as to operate with
retrospective effect - But it is well settled that rights and
benefits which have already been earned or acquired under
the existing rules cannot be taken away by amending the rules c
with retrospective effect - Therefore, the amendment, even if
it is to be considered as otherwise valid, cannot affect the
rights and benefits which had accrued to the employees under
the unamended rules - The right to non-practicing allowance
@ 25% of the pay, having accrued to the employees under D
.. the unamended Rules, they will be entitled to NPA @ 25%
of their pay upto 20. 5. 2003, i.e. th·e date of amendment to the
Rules - Madhya Pradesh Employees' State Insurance
Service (Gazetted) Recruitment Rules, 1981- Interpretation of
Statutes - Retrospective operation of Rules. · E
K. Dayananda Lal vs. State of Kera/a 1996 (9) SCC 728;
T. N. Housing Board vs. N. Balasubramaniun 2004 (6) SCC
85; State of Karnataka vs. K.G.S.D. Canteen Employees
Welfare Association 2006 (1) SCC S67 and Punjab National
F
""'
/
Bank vs. Astamija Dash 2008 (14) SCC 370; N.C. Singhal
vs. Director General, Armed Forces Medical Services 1972
(4) SCC 765; K. C. Arora vs. State of Haryana 1984 (3) SCC
281; T.R. Kapoor vs. State of Haryana 1986 Supp.sec 584;
-,
M.R. Gupta vs. Union oflndia 1995 (5) SCC 628 and Union
of India vs. Tarsem Singh 2008 (8) SCC 648, relied on . G
.Ji,
Case Law Reference:
1996 (9) sc.c 728 relied on para 10
H
1140 SUPREME COURT REPORTS [2009) 14 (ADDL.) S.C.R.
A 2004 (&) sec 85 relied on para 10 'v
2006 (1) sec 567 relied on para 10
~
2008 (14) sec 370 relied on para 10
B 1912 (4) sec 76!$ relied on para 12
1984 (3) sec ·291 relied on para 12
1986 supp. sec 584 relied on para 12
c 1995 (5) sec 628 relied on para 14
2008 (8) sec 648 relied on para 14
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3156 of 2007.
D -;
From the Judgment and Order dated 16.9.2003 of the High
Court of Madhya Pradesh at Jabalpur in Writ Petition No. 2423
of 2003.
WITH
E
Civil Appeal Nos.3157, 3158, 3159, 3160, 3161, 3162, 3163,
3164, 3165, 3166, 3167 of 2007.
t
Civil Appeal Nos.6043, 6044, 6045, 6046, 6047, 6076 of 2007.
F ,....-
Civil Appeal Nos. 6895, 6896 and 6897 of 2009. '-.
Vibha Datta Makhija, Neeraj Sharma and B.K. Satija for
the appearing parties.
G The Order of the Court was delivered by
JI.
ORDER
R.V. RAVEENDRAN, J. Delay condoned and leave
H
• STATE OF MADHYA PRADESH & ORS. v.
YOGENDRA SHRIVASTAVA [R.V. RAVEENDRAN, J.]
1141
• .. granted in the SLPs. A
The question involved in these appeals filed by the State
' of Madhya Pradesh, relates to the quantum of Non-Practicing
Allowance ('NPA' for short) payable to certain categories of
Medical Officers belonging to the State Insurance service. B
2. The Madhya Pradesh Employees State Insurance
Service (Gazetted) Recruitment Rules, 1981 (in short 'the
Rules') framed by the State Government came into force in the
year 1982. Rule (5) of the Rules provides that classification of
the service, the scales of pay attached thereto and the number c
of posts included in the service shall be in accordance with the
provisions contained in Schedule I thereto. The scales of pay
and NPA payable to different categories of Medical Officers,
other than the Director of the Service, are extracted below from
~· Schedule I to the Rules: D
SI. Name of the Posts included Scale of pay
No in the service
2. Dy Director Rs.680-40-800-50-
3. Superintendent, ESI Hospital 1000-EB-50-1150+NPA E
4. Specialist, ESI Hospital @25% of pay
5. Supervisory Insurance
Medical Officer ....
6. Insurance Medical Rs. 500-30-680-40-800-
Officer (Class I) EB-50-1150+NPA @
25% of pay
7. Insurance Medical/Assistant Rs. 425-35-500-30-680-
Surgeion EB-40-800-50-900+Rs.
100 pm as ESI Special G
-·'·
Allowance + NPA @
25% of pay
Non-Practising Allowance is paid to Medical Officers when
H
1142 SUPREME COURT REPORTS [2009) 14 (ADDL.) S.C.R.
A private practice by medical officers was prohibited and
abolished.
3. Even though the rules specified that the aforesaid
categories of Medical Officers were entitled to NPA linked to
their pay (that is 25% of the basic pay), the letters of
B appointment issued to them specified that the NPA payable to
them would be a fixed lump sum approximately equal to 25%
of the initial (minimum) pay in the pay scale applicable to them, .
(as contrasted from a variable linked to the quantum of their
pay provided under the Rules). As a result, whenever there were
C increases in their pay on account of annual increments, NPA
was not correspondingly increased so as to maintain it at 25%
of basic pay, but continued to be paid at the fixed lump sum
rate. The state Government was however revising the fixed
lump sum NPA, whenever there was revisions in the pay scales,
D by issuing executive orders. The respondents in these appeals
-
as also several other medical officers brought this anomaly to
the notice of the department and requested that the NPA should
be paid to them at 25% of the pay in accordance with the rules,
as was done in the case of Medical Officers working in the
E. Public Health and Medi~al Education departments.
4. As their request was not acceded, the respondents
approached the Madhya Pradesh Administrative Tribunal
seeking ·a direction for payment of NPA in accordance with the
Rules. They contended that whenever there was an increase
F in their basic pay, ejther on account of annual increments in the
pay scale or on account of revision of pay scales, there should
be corresponding automatic increase in the NPA in terms of
the Rules which required payment of "NPA@25% of the pay".
The Tribunal accepted the contention and allowed their
G applications and directed the appellant to calculate and pay
NPA at the rate of 25% of the pay from the respective dates of
their joining service. The State Government filed writ petitions
· challenging the orders of the Tribunal. The High Court dismissed
those petitions, upholding the orders of the Tribunal. The said
H
STATE OF MADHYA PRADESH & ORS. v. 1143
YOGENDRA SHRIVASTAVA [R. V. RAVEENDRAN, J.]
"' orders of the High Court are under challenge in these appeals A
"'~ by special leave.
5. It should be noted here that as there was no stay, the
" state government instructed the Director of Employees State
Insurance Services, to give effect to the orders of the Tribunal B
.. affirmed by the High Court and pay the respondents NPA@
25% of their salary from the respective dates of their
·"- appointment, subject to the final decision of this Court, with a
condition that if the matters were decided in favour of the
appellants, recovery of the excess payment would be made.
c
6. The appellant State also amended the Madhya Pradesh
Employees State Insurance Service (Gazetted) Rules 1981 (by
notification dated 20.3.2003) and substituted the words "NPA
at such rate as may be fixed by state government from time to
time by orders issued in this behalf in place of the words "NPA D
at 25% of pay" wherever they occurred in the Rules, with
retrospective effect from 14.10.1982.
...
7. In this background, on the contentions raised by the
parties, the following three questions arise for our consideration:
E
(i) Whether the rates of NPA specified in the letters of
appointment and the orders of the department, can prevail
over the provisions relating to NPA in the Rules?
~ (ii) Whether the retrospective amendment of the Rules by F
notification dated 20.5.2003, can deny the benefit which
had accrued under the unamended Rules?
(iii) Even if the respondents are held to be entitled to higher
NPA as contended by them and as found by the Tribunal
and the High Court, whether the financial benefit could be G
extended to them beyond three years prior to filing of the
original applications before the Tribunal.
H
1-144 SUPREME COURT REPORTS (2009) 14 (ADDL.) S.C.R.
A Re : Question (i) "
rl
8. The appellants contend that the Rules do not contain any
specific provision for payment of non-practising allowance. They
c<-
point out that schedule I to the Rules merely refers to "plus NPA
@ 25% of the pay" in the column relating to the pay scale,
B
without defining the term 'pay'. It is submitted that when the term
'pay' is not defined, it can refer to the minimum or initial pay in
the pay-scale, or to each stage in the pay-scale commencing ,.
from the initial pay and ending with the maximum pay in the pay-
scale. It is contended that the State Government had
c proceeded on the basis that "25% of the pay" referred to the
'25% of initial pay' and had fixed the NPA keeping the said
figure in view, by means of executive orders. It is submitted that
fixing of a lump sum as NPA, approximately equal to 25% of '·
the initial pay in the applicable pay-scale, by executive orders
D issued by the Government from time to time, was therefore in >---
., I
. '
consonance with the Rules. Alternatively, it was contended that l
incidental matters relating to number of posts, pay scales and
NPA referred to the Schedule to the Rules, were subject to
periodical revision/changes and it was common practice to
-
E make such revisions/changes, by executive orders instead of
adopting the process of amending the rules every time, and that
such executive orders were binding.on the employees and were ~
never challenged.
9. The Rules made under Article 309 of the Constitution
F
clearly provided that the concerned employees (medical .r'
officers) were entitled to NPA@ 25% of pay, in addition to the ...
pay in the pay scale. In fact, it formed part of the pay scale.
Consequently, whatever was the basic pay, 25% thereof had
to be paid as NPA Whenever the benefit of increments in the
G pay-scale, or revision in pay scale were extended, NPA also
....
got correspondingly increased so that NPA always remained
as one fourth of the basic pay. This is the interpretation that has
been put forth by the Tribunal and upheld by the High Court and
we find no reason to interfere with the same.
H
STATE OF MADHYA PRADESH & ORS. v. 1145
YOGENDRA SHRIVASTAVA [R.V. RAVEENDRAN, J.]
10. The contention that the executive orders issued from A
time to time or the appointment letters issued in accordance
with such executive orders will prevail over the Rules cannot be
accepted. When there is conflict between the Statutory Rules
and executive orders, the statutory Rules will prevail (See : K.
Dayananda Lal vs. State of Kera/a - 1996 (9) SCC 728, T. B
N. Housing Board vs. N. Balasubramaniun - 2004 (6) SCC
85, State of Karnataka vs. K.G.S.D. Canteen Employees
Welfare Association - 2006 (1) SCC 567 and Punjab
National Bank vs. Astamija Dash - 2008 (14) SCC 370).
Executive orders cannot be made or given effect in violation c
of what is mandated by the Rules. If appointment letters
provides for payment of NPA which is not in consonance with
Rules, they can be corrected or set right by Tribunals/courts.
Re : Question No.(ii)
D
11. The Rules were retrospectively amended on 20.5.2003
substituting the words "NPA at such rates as may be fixed by
the state government from time to time by order issued in this
behalr in place of "NPA@ 25% of pay" in the Rules. It was
contended that as the Rules were amended in the year 2003 E
with retrospective effect from 14.10.1982, it should be deemed
that the NPA payable was as notified by the government from
time to time and not '25% of the pay'.
12 . It is no doubt true that Rules under Article 309 can be
F
made so as to operate with retrospective effect. But it rs well
settled that rights and benefits which have already been earned
or acquired under the existing rules cannot be taken away by
amending the rules with retrospective effect. [See : N. C.
Singhal vs. Director General, Armed Forces Medical Services
-1972 (4) SCC 765; K. C. Arora vs. State of Haryana -1984 G
' (3) SCC 281; and T.R. Kapoor vs. State of Haryana - 1986
Supp. SCC 584]. Therefore, it has to be held that while the
amendment, even if it is to be considered as otherwise valid,
cannot affect the rights and benefits which had accrued to the
H
-
J146 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.
A employees under the unamended rules. The right to NPA@ "
25% of the pay, having accrued to the respondents under the
unamended Rules, it follows that respondents-employees will
~
be entitled to Non-Practising Allowance @ 25% of their pay
upto 20.5.2003.
B
Re : Question No.(iii)
13. The Tribunal directed payment of the difference in NPA ~
to respondents from their respective dates of appointment. The
)oo
respondents were appointed from 1982 onwards. The
c respondents had approached the Tribunal long after their
appointment, that is, in 1998 or thereafter.
14. The appellants contended that the claims were
therefore barred by limitation. It was pointed out that the ...
\
D respondents were paid NPA at a fixed rate as stipulated in the
appointment orders and NPA was increased only when it was
revised by Government orders from time to time; that
respondents accepted such NPA without protest; ahd that
therefore, they cannot, after periods varying from 5 to 15 years,
challenge the fixation of NPA or contend that they are entitled
E
to NPA at a higher rate, that is 25% of their pay. We cannot
agree. Where the issue relates to payment or fixation of salary
or any allowance, the challenge is not barred by limitation or
the doctrine of laches, as the denial of benefit occurs every ,_
month when the salary is paid, thereby giving rise to,.,,a fresh '
F cause of action, based on continuing wrong~ Though the lesser
payment may be a consequence of the error that was ~
committed at the time of appointment, the claim for a higher
allowance in accordance with the Rules (prospectively from the
date of application) cannot be rejected merely because it
G arises from a wrong fixation made several years prior to the
'I
claim for correct payment. But in respect of grant of
consequential relief of recovery of ar~ars for the past period,
the principle relating to recurring and successive wrongs would
apply. Therefore the consequential relief of payment of arrears ~
H will have to be restricted to a period of three years prior to the t
STATE OF MADHYA PRADESH & ORS. v. 1147
YOGENDRA SHRIVASTAVA [R.V. RAVEENDRAN, J.]
date of the original application. [See: M.R. Gupta vs. Union of A
India - 1995 (5) SCC 628, and Union of India vs. Tarsem
Singh 2008 (8) sec 648]
Conclusion :
15. The appeals are allowed in part as follows: 8
(i) We uphold the decision of the Tribunal, affirmed by the
High Court that respondents are entitled to 25% of their
pay, as NPA.
(ii) The respondents will be entitled to NPA @ '25% of pay'
c
only upto 20.5.2003. Thereafter, the amended Rules will
apply.
(iii) In so far as arrears, the respondents are entitled to
recover the difference in NPA only in regard to the salary D
which accrued due during the threeO years prior to the date
of filing of the original applications by the respondents
before the Tribunal and not from the date of their
appointments.
E
(iv) As a consequence, if the appellants, in pursuance of
the orders of the Tribunal/High Court, had paid the
difference in NPA, for any period beyond three years
before the date of the respective original applications, they
will be at liberty to recover the same from the respective
F
respondents in 24 monthly instalments. ·
R.P. Appeals partly allowed.
/
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