Wednesday, 20 August 2014

Air Force Association - Recommendations for 7th CPC



Courtesy Gp Capt (retd) J K Kaushik, Committee Member AFA and ESM Cell BJP

AIR FORCE ASSOCIATION
RECOMMENDATIONS FOR VIITH PAY COMMISSION


Retired Personnel

1.       The existing rate of pension fixation as 50% of emoluments last drawn be increased to 75%.

2.       Payment of Income Tax on pension be exempted.

3.       Period for restoration of commuted pension be reduced from existing 15 years to 12 years.

4.       Fixed Medical Allowance be granted to all pensioners.
          .
5.       Pension of regular commissioned officers holding the rank of Fg Offr and Flt Lt should be higher than Hony Rank officers holding the same rank. Due to an anomaly in VIth CPC, both the categories currently draw equal pension.

6.       A fixed percentage of retired WOs/MWOs are granted Hony Rank out of the retired list. Unlike the serving WOs/MWOs who become entitled to draw higher pay and allowances on grant of Hony Rank with consequential pensionery benefits, the retired personnel do not get any financial benefit whatsoever. This imbalance needs to be corrected.

7.       Creation of old age homes for military veterans.

 Serving Personnel

1.       Grant of Non-Functional Upgrade for Commissioned Officers.

2.       Introduction of Time Scale promotion to Warrant Rank personnel. The existing system of selective promotions to continue.

3.       Exemption of income tax on all types of pay and allowances other than Basic Pay, Rank/Grade Pay, MSP and DA.

4.       Introduction of separate and independent pay scales for each rank. The concept of integrated pay scale/pay band by clubbing a number of ranks together may be dispensed with.

Serving and Retired Personnel

1        DA merger with Basic Pay/Pension to be re-introduced on lines similar to those prevailing under Vth CPC.

2.       Revision of Monetary Allowance to Gallantry Medal Recipients.

3.       MSP be authorized at uniform rate for all ranks.

Sunday, 17 August 2014

MoD letter dated 24 Jul 14 - How MoD processed it.



You have read how MoF processed the DGL. Now here is the MoD file notings.
Please also refer to earlier post titled "Rank Pay Corrigenda - Update."
                              *     *     *     *     *                          

61069 On line Request dated 10.6.2014
 Reply dated 01.08.2014, Posted on 05.08.2014 & received on 16.8.2014


Online RTI Request Form Details
Public Authority Details :-
* Public Authority Department of Defence

Personal Details of RTI Applicant:-
* Name S Y Savur
Gender Male
* Address 141 Jal Vayu Towers , NGEF Layout, Indira Nagar PO, Bangalore
Pincode 560038
Country India
State Karnataka
Status Urban
Educational Status Literate
Phone Number +91-9449676278
Mobile Number +91-9688782227
Email-ID sysavur[at]gmail[dot]com

Request Details:-
Citizenship Indian
* Is the Requester Below Poverty Line? No

(Description of Information sought (upto 500 characters)
* Description of Information Sought

Sir,

MoD, vide No. 35(1)/2013/D (Pay/Services) dated 23rd May 2014 provided me a photocopy of a hand corrected Draft Government Letter (DGL) No.34(10)/2013-D(Pay/Services) with no date of March 2014 in reply to my online request no. MODEF/R/2014/60846ated 01 May 2014 and received by CPIO (D-Pay/Services) on 5th May 2014.

However, MoF/DoE vide No.7/1/2014-E.III(A)/224 dated 6th June 2014 in reply to my online RTI request DOEXP/R/2014/60225 dated 13th March 2014 has stated in Para 2 that the file No. 34(10)/2013-D(Pay/Services) was received from the Ministry of Defence on 24.4.2014. The file was withdrawn by Ministry of Defence on 7.5.2014 before any decision was taken by the Ministry of Finance.

It appears that the matter was known to CPIO that MoD had been withdrawn from Mof/DoE before the ibid reply dated 23rd May 2014.

Please provide me information in terms of Sec��on 2(f) of the RTI Act 2005 on the notings, discussions, deliberations, additional factors and related information based on which the file was withdrawn and the present status of the file.

*        *        *        *        *

Immediate
RTI matter
No. 35 (1)/2013/D (Pay/Services)
Government of India
Ministry of Defence

New Delhi, the 1st August, 2014

To

          Shri S Y Savur,
          141, Jal Vayu Towers,
          N G E F Layout,
          Indira Nagar (PO),
          Bangalore – 560038   

          Subject: Seeking information under RTI Act - 2005

Sir,

          This is with reference to MoD letter of even number dated 4.7.2014 on the above subject.

2.       MoD File No. 34 (10)/2013- D (Pay/Services) has since been received from Ministry of Finance (Deptt of Expenditure). The relevant notings/correspondence of file No. 34 (10)/2013-D (Pay/Services) are forwarded herewith. The corrigendum to MoD order dated 27.12.2012 has also been issued on 24.7.2014 to modify certain provisions as per advice of Ld. Attorney General, a copy of which is also forwarded herewith.   

Yours faithfully,
Sd/-----------------
(P.S. Walia)
Under Secretary & CPIO
Encl: as above (27 pages)

F No. 34 (10)/2013-D(Pay/Services)

Receipt                                                                                     Encl. 83-A
-84-
Ministry of Defence
D (Pay/Services)

          Reference Encl 83-A.

2.       The subject matter relates to examination of issues raised by the Services arising out of implementation of the Order dated 4.9.2012 of the Hon’ble Supreme Court in the Rank Pay case. Note 77 brings out the detail of the case. 

3.       On the two issues which were agreed to by the Ld Attorney General it was decided to amend MoD letter dated 27.12.2012 and the matter was placed before the Ministry of Finance. MoF raised certain issues vide their UO Note dated 19.3.2014 (Encl 74A). The issues/queries raised by Ministry of Finance have been examined in Note 77 (Para 5) wherein replies proposed to be given by MoD were also recorded. The matter was also brought to the notice of Defence (Finance). Their views are available in Note 79/ante. The matter being pursued in light of the opinion of Ld Attorney general has been shown to LA (Defence). He is of the view that the proposal may be forwarded to MoF for their comments as per their policy and past practice followed in the matters of like nature. In case any legal issue comes up, the same may be referred to him for his legal opinion.     

4.       Ministry of Finance has also sought financial implications of the proposed changes. The same has been sought from CGDA and vide their ID Note dated 24.4.2014 (Encl 83A), they have replied that for the Army and Navy, pay arrears amounting to Rs 5.75 crore would have to be paid while in case of Army certain recoveries amounting to Rs 43.35 lakhs would have to be made from concerned officers. Relevant information from Air Force has not been provided by their Pay office.         

5.       In light of the above, it is proposed to refer the matter to Ministry of Finance (Deptt of Expenditure) seeking their approval to the DGL placed at Encl – 77A.

Sd/----------------
P S Walia
24042014
Dir (AG-I)

-85-

          With reference to MoF UO note dated 19.3.2014 the response to their comments/observations is prepared and is available at note 77 ante. The financial implications due to proposed modifications in DGL obtained from CGDA and indicated above. In view of the above we may forward the file for consideration and approval of Min of Finance. 
          Submitted for kind approval pl.

Sd/----------------
24.04.2014
JS (E)                                       Sd/--------------
                                                          24.4.14

JS (Pers)/MoF                          Sd/-------------
                                                          25/4
DS /E.III-A                                      Sd/----------
                                                          25/4
SO E.III A

-86-
Deptt of Expenditure
E.III A

          The case was discussed with Dir (AG) MoD today.

2.                  Based on the discussions, MoD is requested to have a fresh look at the issue and may also like to have legal opinion on the methodology for fixation of pay w.e.f. 1.1.1996, especially whether it would be in accord with the legal opinion of the Ld AG. 
Sd/--------------
7/5/14
Dir (AG) MoD (in meeting)

US P/S                                    Sd/-------------- 8/5/2014

-87-
Ministry of Defence
D (Pay/Services)

          The matter under examination here relates to certain issues raised by the Services in the Rank Pay matter.


2.       The rank pay matter (also known as Dhanapalan case) was a long pending court case relating to methodology of pay fixation w.e.f. 1.1.1986. On the basis of 4th Pay Commission recommendations which were accepted by the Government rank pay was deducted for re-fixing pay in the revised scale for officers in the rank of Captain to Brig. Thereafter in addition to pay so fixed, rank pay was being paid in addition.   

3.       Initially it was only one officer, Major Dhanapalan who contended that there should not be any deduction of rank pay while fixing pay w.e.f. 1.1.1986. The Hon’ble Kerala High Court decided the case in favour of Major Dhanapalan. It was implemented for him, the sole petitioner. However, as many other officers had sought the same benefit, the issue – deduction of rank pay for fixation of pay w.e.f. 1.1.1986 – was placed before the Hon’ble Supreme Court. The Hon’ble court decided this long pending matter vide its order dated 4.9.2012 in favour of the service officers. In consultation with Ministry of Finance, Ministry of Law & Justice, CGDA and Def (Fin) orders were issued by MoD on 27.12.2012 for implementing the Supreme Court Order dated 4.9.2012. Arrears of pay/pension from 1.1.1986 with interest @ 6% p.a. w.e.f. 1.1.2006 are being paid to the relevant beneficiaries by the concerned authorities as ordered by the Hon’ble Court. However, the Services raised certain issues – as detailed hereunder – after the Supreme Court order was implemented: -      

I        (i)      Applicability of order with effect from 1 Jan.,1986 with consequential benefits 

                   (ii)      Refixation of pay on promotions subsequent to 1.1.1986

          II       Revision of minimum pay for each rank

          III     Adjustment of top of the pay scale in 4th CPC

IV      Applicability of provisions in 5th CPC and consequentially in 6th CPC, in the spirit of the judgment.  

4.       Hon’ble RM took a meeting in the Rank Pay case on 14.6.2013 and directed that the Services Statement of case dated 2.4.2013 in this matter along with the views of CGDA, Def (Fin) and Ministry of Finance thereupon may be placed before the Ld Attorney General for his legal opinion. Accordingly a brief was prepared in MoD. The following four issues as phrased by LA (Def) were referred to Ld Attorney general for his legal opinion: 

(a)      Whether the MoD orders dated 27 Dec 12, have modified the Special Army Instructions 1/S/87 and corresponding Special Navy and Air Force Instructions insofar as it relates to deduction of Rank Pay and direct to re-fix the initial pay of the concerned officers of the three services in the revised scale (integrated scale) as on 1.1.1986. Whether the term ‘with effect from 1.1.1986’ should be used as given in the Single Bench’s order dated 05.10.1998 passed by the High Court of Kerala, instead of using ‘as on 1.1.1986’? What consequences this change in the term will entail?   

(b)     Whether the minimum pay for each rank given in Para 6 (a) (ii) of SAI 1/S/87 needs to be re-fixed/changed?

(c)      Whether the Basic Pay ceiling of Integrated Scale in IV CPC for officers upto Brigadiers, which is Rs 5100/- also needs to be modified to give effect to the court’s orders?  

(d)     Since the treatment of Rank Pay while pay fixation carried out in 5th CPC was similar to that of the 4th CPC, whether orders of the Apex Court dated 4.9.2012 be applied to all subsequent Pay Commissions i.e. V & VI CPC under such circumstances. 

5.       The Learned Attorney General examined the matter and tendered his legal opinion dated 03.9.2013. The Ld AG held favourably the Services contentions on the two issues i.e. for implementation of court orders w.e.f. 01.01.1986 and application of legal principles of the case to subsequent Pay Commissions but did not agree with the remaining two issues, namely (ii) and (iii) that minimum and top of the Integrated Scale be also corrected. The Services wanted the matter again to be referred to the Ld Attorney General for reconsidering his advice on the latter two issues, but LA (Defence) having examined the matter again stated that the matter may not be referred again to the Ld Attorney General. JA & LA in M/o Law & Justice supported this move.  

6.       In light of the position stated above, Defence (Finance)’s comments were sought in this regard which are available in their note dated 04.03.2014 (Note 66). They supported that MoD stand that in light of the observations made by LA (Defence) the matter may not be referred back to the Ld Attorney general for his second opinion. They also agreed with MoD that the matter may be referred to MoF for their views so that the order of the Hon’ble Supreme Court dated 04.9.2012 may be implemented in accordance with the opinion of the Learned Attorney General which has been duly approved by Minister of Law & Justice. As such, the matter as emerging from the legal opinion dated 03.09.2013 tendered by the Learned Attorney General was submitted for approval of RM for referring the same to Ministry of Finance for their views.   

7.       MoF examined the matter and raised certain queries vide their ID Note dated 19.03.2014 (Encl 74/A). The matter was further examined in consultation with Defence (Finance) and CGDA and accordingly a further revised DGL was prepared in MoD and was referred to LA (Defence). He expressed the views that the proposal may be forwarded to MoF for their comments as per their policy and past practice followed in matters of like nature and in case any legal issue comes up, the same may be referred to him for his legal opinion. Accordingly the DGL and MoD response to their queries were again referred to the MoF on 25.04.2014 for their approval of the DGL.       

8.       The DGL was discussed with DS (E.IIIA)/MoF on 07.05.2014 afternoon. Director (AG.I), ACGDA, DFA (AG/PA) and the undersigned attended the meeting. DS (E.III A)/MoF pointed out that the required DGL should be limited in its application in the present matter strictly with reference to the legal opinion tendered by the Ld AG. As the said legal opinion favoured applicability of the orders dated 4.9.2012 of the Hon’ble court w.e.f. 1.1.1986 and not as on 1.1.1986 amendment proposed in the DGL on this counts seems appropriate. However on the issue of applicability of the same methodology of pay fixation (without deduction of Rank Pay) w.e.f 1.1.1996, the following views emerged from the discussion: -     

In the illustrative examples given in the file, the methodology proposed to be applied w.e.f 1.1.1996 does not appear to be similar as to the one adopted for pay fixation w.e.f. 1.1.1986 as much as the legal opinion of the Ld Attorney General only approves applicability of provisions as ordered by the Hon’ble Court. As such the only change which is required in the existing methodology of pay fixation w.e.f. 1.1.1996 is the removal of the step deducting rank pay there from. The existing rank pay and benefits thereupon (DA, IR etc) may thus, continue to remain in the revised methodology as well. In this context, another illustrative statement is placed in the file beside the existing one. This will, MoF suggests, that the Government has fully implemented the Hon’ble Court’s Order at the subsequent pay revision w.e.f. 1.1.1996 (i.e. 5th CPC) and as advised by the Ld Attorney General without any dilution of the intentions of the Hon’ble Court.      

MoF is also of the view that as rank pay has been taken as part of basic pay, as defined in the relevant SAI dated 19.12.1997 it is apt to include it in the proposed methodology. In subsequent Pay Commission (i.e. 6th CPC) rank pay plus basic pay were collectively multiplied by a factor of 1.86 to arrive at pay in the relevant pay band. As such, rank pay and benefits thereupon should continue to be included in the proposed methodology as well was the view of the MoF.   

A view similarly expressed by MoF that the proposed DGL should only be limited to amend the SAI dated 19.12.1997 and relevant special instructions of Air Force and Navy for only amending the methodology of pay fixation of the concerned officers when transiting from 4th CPC to 5th CPC regime as suggested above. No other changes like changing the formula/methodology of calculation of NPA should be included in the proposed amendment as such changes do not appear to flow from the Ld AG legal opinion. 

9.       In light of the above facts MoF expressed views that the proposed amendment to MoD letter dated 27.12.2012 should be strictly in line with the legal opinion dated 3.9.2013 tendered by the Ld Attorney General. It was also suggested by the concerned officer in MoF that it would be better if the draft amendment proposed by MoD incorporating the suggestions above may also be shown to the Ld AG to ensure that the proposed amendments are in line with the views expressed by him in his legal opinion dated 3.9.2013. MoF also desired that before the matter is referred back to them, MoD should also indicate the financial implications arising from the changes proposed above. This information has been asked from CGDA and would be placed in the file before the matter is referred back to MoF. 

10.     In light of the above position, a revised DGL has been prepared and is placed opposite for perusal of JS (E). However, it is felt that including the tehn existing rank pay and benefits thereupon in the revised methodology of pay fixation w.e.f. 1.1.1996 – as suggested by MoF – would amount to double benefit to the concerned officers as they are also being paid rank pay at the revised rates in addition to the basic pay. This approach would not be in conformity with Rule 7 (C) of the CCS (Revised Pay) Rules 2008. But not including rank pay and benefits thereupon in the revised methodology would require redefining rank pay. It is seen that the matter could be resolved by deducting pre-revised rank pay instead of revised rank pay. Therefore, it is proposed that this option should also be examined by Def (Fin) before the matter is placed before the Learned Attorney General, as desired by MoF.     

11.     It is therefore proposed that the DGL revised as per the suggestions/views of MoF may now be referred to Defence (Finance) for their approval/vetting of the same. They may also examine the option given in the preceding para. Thereafter the matter would be submitted to RM for his approval for making a reference to Ministry of Finance.

Sd/------------------
(P. S. Walia)
Under Secretary
08.05.2014
Director (AG.I)
                                      On next page pl

-88-

          Noting on pre-page regarding Rank Pay case (Major Dhanapalan case) may kindly be referred. 

2.       The above case was referred to Ministry of Finance (MoF) for their approval. The file was received with certain observations/comments of MoF, including reference to Rule 7 (b) of CCS (Pay Revision) Rules 1997. The case was again examined in this ministry and file was forwarded with reply to their comments. The DGL was revised, since it was found that Rule 7 (b) has relevance only to fixation of Pay with reference to Sixth CPC as Rank Pay was included for pay fixation as on 1.1.2006. However, it was felt that Rule 7 (c) of CCS (Pay Revision) Rules 1997 was more closer to Pay fixation under 5th CPC because Rank Pay was revised separately (Rs 200 to Rs 400 in case of Captain) and also included as part of basic pay while calculating fitment in new scale, thus resulting in double counting or revision. Thus, DGL was revised and forwarded to MoF along with reply to their observations.  

3.       As stated in para of the above note, during the above discussion in MoF on 6th May 2012 (2014?), it was observed that in case the proposed DGL, as was revised in MoD, is followed, then it would require affecting change in definition in ‘Basic Pay’ and also result in recovery in a number of cases. This might be termed as twisting, modification in basic definition in order to avoid benefit of Court Orders, therefore, it was felt that the DGL may be revised again and may be proposed without resulting change in definitions etc. The revised financial implications may be worked out and Legal opinion of may be obtained in order to confirm that the revised proposal shall meet the basic principle set by the Hon’ble court and is as per advice of Ld. AG.     

4.       Therefore, in view of the above, revised proposals & DGL is submitted for kind approval. The file also needs to be forwarded to Defence (Finance) for  their concurrence and Legal Advisor for their opinion on the proposal.

Submitted for kind consideration and approval.

Sd/-----------------------
Pradeep Kumar
09/05/14
Director (AG-I)
Joint Secretary (E)           Sd/------------ 9-5-14

AS (B)                            Sd/------------ 13/5

Defence Secretary           OK, Please follow it up closely Sd/---------
                                                                                                13/5
                                                                                      (R K Mathur)
                                                                                      Defence Secretary
AS (B)         Sd/-------   15/5

JS (E) Sd/---------- 15-5-14

Dir (AG-I) – in meeting

US P/S

-89-

-        Referring note on pre page and approval of Defence Secretary on pre-page

          -        Forwarded for necessary action as per approval pl

                                                                                      Sd/-------------
                                                                                                15/04/14
DFA – AG/PA, MoD (Finance)                  Sd/----- 15/5/14

AFA (AG/PA)

-90-

          Ref: Preceding mote nos. 87-89/ante recorded by MoD/D (Pay/services) on Air HQ file No. Air HQ /25450/1/Lgl.

2.       The case relating to issuance of a Corrigendum in respect of MoD letter dated 27.12.2012 (vide which Supreme Court order dated 04.09.2012 in the Rank Pay matter was implemented by MoD) has been examined in the light of views expressed by Ministry of Finance (MoF) (Department of Expenditure) during discussions held with representatives of MoD, MoD (Fin) and CGDA on 07.05.2014.

3.       This Division is of the opinion that the views expressed by MoF appear to be logical and in accordance with the legal opinion of Ld Attorney General. Therefore, this Division concurs in the revised draft Corrigendum/DGL (Encl 87-A), which is found to be in order. Accordingly, MoD/D (Pay/Services) may take further necessary action in this matter.

4.       This has the approval of FA (DS).

Sd/---------------
(K K Sinha)
AFA (AG/PA)
20.05.2014
Director (AG-I) MoD                                  Sd/-------- 20.5.14

US (P/S)                        Sd/-------------- 20/5/2014

-91-
Ministry of Defence
D (Pay/Services)
         
          Issues raised by the Services in the Rank Pay matter are being considered in the instant file.

2.       The rank pay matter (also known as Major Dhanapalan case) was along pending court case relating to the methodology of pay fixation w.e.f. 1.1.1986. On the basis of 4th Pay Commission recommendations which were accepted by the Government, rank pay was deducted for re-fixing pay in the revised scale for officers in the rank of Captain to Brig. Thereafter in addition to pay so fixed, rank pay was being paid in addition.    

3.       Initially it was only one officer in Army, Major Dhanapalan who contended that there should not be any deduction of rank pay while fixing pay w.e.f. 1.1.1986. The Hon’ble Kerala High Court where Major Dhanapalan had raised this issue decided the case in favour of the petitioner. Later it was implemented for him after the Division Bench of the Kerala High Court as well as the Supreme Court rejected department appeals. However, as many other officers had also sought the same benefit, the basic issue – deduction of rank pay as recommended by 4th CPC and accepted by the Government for fixation of pay w.e.f. 1.1.1986 – was placed before the Hon’ble Supreme Court. The Hon’ble Court decided this long pending matter vide its order dated 4.9.2012 in favour of the service officers. In consultation with Ministry of Finance, Ministry of Law & Justice, CGDA and Def (Fin) orders were issued by MoD on 27.12.2012 for implementing the Supreme Court Order dated 4.9.2012. Arrears of pay/pension from 1.1.1986 along with interest @ 6% p.a. w.e.f 1.1.2006 are being paid to the relevant beneficiaries by the concerned authorities as ordered by the Hon’ble court. However the Services raised certain issues – as detailed hereunder – even after the Supreme Court Order was implemented: -         

I        (i)      Applicability of order with effect from 1 Jan.,1986 with consequential benefits 

                   (ii)      Refixation of pay on promotions subsequent to 1.1.1986

          II       Revision of minimum pay for each rank

          III     Adjustment of top of the pay scale in 4th CPC

IV      Applicability of provisions in 5th CPC and consequentially in 6th CPC, in the spirit of the judgment. 

4.       Hon’ble RM took a meeting in the Rank Pay case on 14.6.2013 and directed that the Services Statement of case dated 2.4.2013 in this matter along with the views of CGDA, Def (Fin) and Ministry of Finance thereupon may be placed before the Ld Attorney General for his legal opinion. Accordingly a brief was prepared in MoD. The following four issues as phrased by LA (Def) were referred to Ld Attorney general for his legal opinion:  

(a)      Whether the MoD orders dated 27 Dec 12, have modified the Special Army Instructions 1/S/87 and corresponding Special Navy and Air Force Instructions insofar as it relates to deduction of Rank Pay and direct to re-fix the initial pay of the concerned officers of the three services in the revised scale (integrated scale) as on 1.1.1986. Whether the term ‘with effect from 1.1.1986’ should be used as given in the Single Bench’s order dated 05.10.1998 passed by the High Court of Kerala, instead of using ‘as on 1.1.1986’? What consequences this change in the term will entail?   

(b)     Whether the minimum pay for each rank given in Para 6 (a) (ii) of SAI 1/S/87 needs to be re-fixed/changed?

(c)      Whether the Basic Pay ceiling of Integrated Scale in IV CPC for officers upto Brigadiers, which is Rs 5100/- also needs to be modified to give effect to the court’s orders? 

(d)     Since the treatment of Rank Pay while pay fixation carried out in 5th CPC was similar to that of the 4th CPC, whether orders of the Apex Court dated 4.9.2012 be applied to all subsequent Pay Commissions i.e. V & VI CPC under such circumstances. 

5.       The Learned Attorney General examined the matter and tendered his legal opinion dated 03.9.2013. The Ld AG held favourably the Services contentions on the two issues (a) and (d) i.e. for implementation of court orders w.e.f. 01.01.1986 and application of legal principles of the case to subsequent Pay Commissions but did not agree with the remaining two issues, namely (b) and (c) that minimum and top of the Integrated Scale be also corrected. The Services wanted the matter again to be referred to the Ld Attorney General for reconsidering his advice on the latter two issues, but LA (Defence) having examined the matter again stated that the matter may not be referred again to the Ld Attorney General. JA & LA in M/o Law & Justice supported this move.  

6.       Defence (Finance) supported the MoD stand that in light of the observations made by LA (Defence) the matter may not be referred back to the Ld Attorney General for his second opinion. They also agreed with MoD that the matter may be referred to MoF for their views so that the order of the Hon’ble Supreme Court dated 04.09.2012 may be implemented in accordance with the opinion of the Learned Attorney General which has been duly approved by Minister of Law & Justice. As such, the matter emerging from the legal opinion dated 03.09.2013 tendered by the Learned Attorney General was submitted for approval of RM for referring the same to Ministry of Finance for their views. 

7.       MoF examined the matter and raised certain queries vide their ID Note dated 19.03.2014 (Encl 74/A). The matter was further examined in consultation with Defence (Finance) and CGDA and accordingly a further revised DGL was prepared in MoD and was referred to LA (Defence). He expressed the views that the proposal may be forwarded to MoF for their comments as per their policy and past practice followed in the matters of like nature and in case, any legal issue comes up, the same may be referred to him for his legal opinion. Accordingly the DGL  and MoD response to their queries were again referred to the MoF on 25.04.2014 for their approval of the DGL.   

8.       The DGL as prepared by MoD was discussed with DS (E.IIIA)/MoF on 07.05.2014 afternoon. Director (AG.I), ACGDA, DFA (AG/PA) and the undersigned attended the meeting. DS (E.IIIA)/MoF pointed out that the required DGL should be limited in its application in the present matter strictly with reference to the legal opinion tendered by the Ld AG. As the said legal opinion favoured applicability of the orders dated 4.9.2012 of the Hon’ble Court “w.e.f.1.1.1986” and not “as on 1.1.1986” amendment proposed was taken as appropriate. However on the issue of applicability of the same  methodology of pay fixation (without deduction of Rank Pay) w.e.f. 1.1.1996, the following views emerged from the discussion: -

In the illustrative examples given in the file, the methodology proposed to be applied w.e.f 1.1.1996 does not appear to be similar as to the one adopted for pay fixation w.e.f. 1.1.1986 as much as the legal opinion of the Ld Attorney General only approves applicability of provisions as ordered by the Hon’ble Court. As such the only change which is required in the existing methodology of pay fixation w.e.f. 1.1.1996 is the removal of the step deducting rank pay there from. The existing rank pay and benefits thereupon (DA, IR etc) may thus, continue to remain in the revised methodology as well. In this context, another illustrative statement is placed in the file beside the existing one. This will, MoF suggests, that the Government has fully implemented the Hon’ble Court’s Order at the subsequent pay revision w.e.f. 1.1.1996 (i.e. 5th CPC). This would be as advised by the Ld Attorney General without any dilution of the intentions of the Hon’ble Court.      

MoF is also of the view that as rank pay has been taken as part of basic pay, as defined in the relevant SAI dated 19.12.1997 it is apt to include it in the proposed methodology. In subsequent Pay Commission (i.e. 6th CPC) rank pay plus basic pay were collectively multiplied by a factor of 1.86 to arrive at pay in the relevant pay band. As such, rank pay and benefits thereupon should continue to be included in the proposed methodology as well was the view of the MoF.  

A view similarly expressed by MoF that the proposed DGL should only be limited to amend the SAI dated 19.12.1997 and relevant special instructions of Air Force and Navy for only amending the methodology of pay fixation of the concerned officers when transiting from 4th CPC to 5th CPC regime as suggested above. No other changes like changing the formula/methodology of calculation of NPA should be included in the proposed amendment as such changes do not appear to flow from the Ld AG legal opinion. 

9.       In light of the above facts MoF expressed views that the proposed amendment to MoD letter dated 27.12.2012 should be strictly in line with the legal opinion dated 3.9.2013 tendered by Ld Attorney General. It was also suggested by the concerned officer in MoF that it would be better if the draft amendment proposed by MoD incorporating the suggestions above may also be shown to the Ld AG to ensure that the proposed amendments are in line with the views expressed by him in his legal opinion dated 3.9.2013. MoF also desired that before the matter is referred back to them MoD should also indicate the financial implications arising out of the changes proposed above. The information is still awaited from CGDA and would be placed on file when the matter is referred back to MoF. 

10.     Taking cognisance of the views emerging from the meeting on 7.5.2014 in the MoF, the DGL was further revised by MoD.

11.     The position emerging above was brought to the notice of Defence Secretary and the matter was referred to Def (Fin). Def (Fin) has given their opinion (Note-90) in the matter expressing that MoF views appeared to be logical and in accordance with the legal opinion of the Ld Attorney General. DGL (Encl: 87) was also concurred to.

12.     In light of the position stated above it is proposed that the DGL prepared by MoD and approved by Def (Fin) which is in line with the MoF may now be referred to the Ld Attorney General for his approval through the office of LA (Def). This is as per line of action proposed by MoF in the meeting on 7.5.2014.

          Submitted for approval of JS (E)
Sd/------------------
(P S Walia)
Under Secretary
21.05.2014
Director (AG-I)
-92-

          The note 75 onwards may kindly be referred as has been mentioned above with regard to comments/observations of MoF, Defence (Finance) and their reply, along with the issues discussed during a meeting in MoF on 07.05.14.

-                     The DGL has now been revised and has been vetted by Defence (Fin) also. As desired by MoF and also approved by Defence (Secretary) we may send the file through LA (Defence) to Ld AG for his approval before forwarding to MoF for their approval.
Sd/-------------------
21.05.14
JS (E)                             Sd/-------------- 21/05/14

-93-

LA (Defence)
-94-

          May pl be discussed by Dir (AG-I)                                                                        
Sd/--------- 21-5-14

LA (Defence)                                              Sd/--------------- 28 5  14

Air HQ/25450/1/Lgl

-95-
Dy No. 1418/XIV/LA (Def)
Ministry of Law & Justice
Department of Legal Affairs

          The proposed draft corrigendum relating to the implementation of the Apex Court order dated 4th September 2012 in IA No. 9 of 2010 in Transfer Petition (C) No. 56 of 2007 Union of India and Others vs N K Nair & others has been perused and discussed with the concerned Director and Under Secretary. It has been observed that the formulation which is being inserted for the existing para 5 (a) (ii) is not giving an appropriate meaning. The same is required to be reformulated so as to reflect the proper intention of the Ministry of Defence. Further, the sentence at the end of para (iv), being inserted in place of the existing para 7 needs to be deleted as shown with pencil in the draft. 

2.       Para (v) related to the replacement of the existing Para 8, which provides that there shall be no change in respect of Special Instructions of Army, Navy and Air Force issued on 11.10.2008 (Army) and 18.10.2008 (Navy and Air Force) for implementation of the recommendations of the 6th Central Pay Commission, except to the extent of the need for re-fixation of pay w.e.f. 01.01.2006, necessitated due to re-fixation of pay w.e.f. 1.1.1986 and 1.1.1996 in terms of these orders. 

3.       Subject to the changes made above, the proposed draft corrigendum appears to be formally in order. In this regard, there appears to be no legal objection. However, the final concurrence of the Ministry of Finance, Department of Expenditure may be obtained before finalising and issuance of  the corrigendum.

3.                  In view of the above, there appears to be no legal requirement of showing the draft corrigendum to the Ld AG.

Sd/------------------
(M S Tariq)
Legal Adviser (Defence)
02.06.2014
JS (E)                             Sd/----------------- 2-6-14
                                      (Navin K Choudhary)

Dir (AG-I)
File No. 34(10)/2013. D (Pay/Services)
-96-

          The proposal in the file deals with the implementation of orders of the Hon’ble Court in the case of Major A K Dhanapalan, also referred as ‘Rank Pay Case.’ Noting on pre-pages may kindly be seen in this regard and for background and history of the case. 

2.       It may be mentioned here than on the four issues, as mentioned in para 3-5 of the note 91, legal opinion of the Ld Attorney General was obtained. Ld AG in his legal opinion held that two issues (a) and (d) i.e. replacement of  as on 1.1.1996’with ‘w.e.f. 1.1.1986’ and ‘applicability of legal principle of the case to subsequent Pay Commission’, but did not agree with the two remaining issues namely (b) and (c) that minimum and top of the Integrated Pay Scale be also corrected. 

3.       The matter was last referred to Department of Expenditure (DoE), Ministry of  Finance (MoF), vide note 84 ante, for approval of the DGL at their end. Approval of Hon’ble RM is also available vide note 69 for forwarding the case for approval of Ministry of Finance. The reply to comments/observations of DoE, MoF received vide UO Note dated 19.03.2014 has also been furnished vide note 77. The latest comments of DoE, MoF may kindly be seen at note 86-ante, wherein the case and the proposed DGL was discussed with them.     

4.       Based on discussion in DoE, MoF, as stated above, the DGL was revised and the same has been concurred by defence (Finance) vide Note 90-ante. Thereafter legal opinion on the same has also been obtained vide Note 95. In order to bring clarity the small correction as suggested by Legal Adviser has been incorporated in the proposed DGL (Encl 96 A).  

5.       It is also mentioned here that with the implementation of the orders of the Hon’ble Court and as opined by Ld AG, as stated above, the estimated financial implication would be around Rs 340 crore due to payment of arrears resulting from revision of pay, leave encashment, terminal gratuity etc and interest @ 6% p.a. as has been ordered by the Hon’ble Supreme Court.  

6.       Submitted for kind consideration and approval for forwarding the case to Department of Expenditure, Ministry of Finance for approval at their end.
Sd/-----------------
(Pradeep Kumar)
Director (AG-I)
JS (E)                    Sd/-------------- 4/6

JS (Pers), DoE, Ministry of Finance
                                                                   May please see in date(?) Sd/------------

DS/E III A                    Sd/-------------------- 5/6
JS (Pers)                Sd/----------------5.6.14

DS E III A

SO E III A                     Sd/------------ 5/6

-97-


Ministry of Finance
Department of Expenditure

          Reference:  Note 96 of Ministry of Defence recorded on their file No.
34 (10)/2013 – D (Pay/Services) LF No. 34 (2)/2013- D (Pay/Services)

          Ministry of Defence may please refer to the aforesaid note, proposing issue of a revised DGL amending the previous Order issued by Ministry of Defence on 27.12.2012, relating to implementation of the order of the Hon’ble Supreme Court dated 4.9.2012 in regard to the Rank Pay case.  
2.       The draft DGL of the Ministry of Defence proposes to amend the sanction letter dated 27.12.2012 in the following two respects based on the advice of the Ld. Attorney General as contained in his opinion dated 3/9/2013:

(i)      To substitute the words “as on 1.1.1986” as per para 1(i) of the draft revised DGL, by the words “with effect from 1.1.1986,” and

(ii)      To provide re-fixation of pay with effect from 1.1.1996 in the context of revised pay scales based on the 5th Central Pay Commission, without deduction of Rank Pay as earlier provided in the Special Army Instruction dated 19.12.1997 and the corresponding Instructions in case of Navy and Air Force.

3.       The matter has been considered in the light of the points brought out by the Ministry of Defence as well as the advice of LA (Defence) dated 2.6.2014 contained in Note 95 of the aforesaid file of Ministry of Defence.

4.       So far as the first issue, as mentioned in para 2 (i) above is concerned, Ministry of Defence has clarified that such a modification will have no additional financial liability so far as fixation of pay with effect from 1.1.1986 till 31.12.1995 is concerned. In other words, there would be no extra financial implications on this account other than the implications already incurred on issue of the order dated 27.12.2012 for re-fixation of pay with effect from 1.1.1986 on account of switch over from 3rd CPC to 4th CPC pay scales.  

5.       As regards the second issue contained in para 2 (ii) above, it is seen that the same is in accordance with advice of Ld. AG. The advice of LA (Defence) dated 2.6.2014 is also that there is no legal objection in this regard.

  6.     Accordingly, this Ministry concurs in the proposal of the Ministry of Defence and also in the revised DGL prepared by the Ministry of Defence.

7.                  This issues with the approval of Hon’ble Finance Minister.

Sd/--------------------------
09.07.14
(Manoj Kumar)
Under Secretary
Ministry of Defence (Joint Secretary (E) South Block, New Delhi
MoF, Doe, UO No. 94466/E.III(A)/2014 dated 09-07-2014

-98-

          The concurrence of MoF to our proposal in the case of Major Dhanapalan, also know as ‘Rank Pay Case’ may be seen on pre-page. This settles the long pending issue. DGL as concurred by LA (Defence) as well as MoF will be issued accordingly. 

                                                                             Sd/-----------9.7.14
                                                                             (Navin K Choudhary)

AS (B)         Sd/----------- 10/7

Defence Secretary
-99-
For kind approval. DGL shall be issued after vetting by MoD (Fin)
Sd/----------------
(R K Mathur)
Defence Secretary
10/7
R M             Sd/------------ 15/7

Def Secy      Sd/------- 15/7

AS (B)

JS (E)          Sd/--------- 16/7/14

Dir (AG-I)

-100-
          As approved by Hon’ble RM, the DGL is forwarded for vetting and countersignature pl. MoF has already concurred for the case.

Sd/----------------
16.07.14
Pradeep Kumar
Director (AG-I)
Def (Finance) – AG/PA

-101-
Ministry of Defence (Finance)
(AG/PA)

          Ref: preceding note nos. 91 -100/ante recorded on Air HQ File No. Air HQ/25450/1/Lgl. Another relevant file of MoD viz. No PC 34 (2)/2013 – D (Pay/Services) is also linked herewith. 

2.       The revised draft Corrigendum/DGL (Encl 96-A) in respect of MoD letter dated 27.12.2012 [vide which Hon’ble Supreme Court order dated 04.09.2012 in the Rank Pay matter was implemented by MoD], as concurred in by the Ministry of Finance (MoF) (Department of Expenditure) vide their UO Nre dated 09.07.2014 (Note 97/ante) has been perused/examined in this Division. The same is also concurred in by this Division and has accordingly been vetted.  

4.                  FA (DS) has seen and approved.
Sd/-----------------
( K K Sinha)
AFA (AG/PA)
23.07.2014
Director (AG-I) MoD

-102-
For n/a please
Sd/------------------
23.07.14
-103-
Issue                                                                               Encl 103/A

*        *        *        *        *

Please note: Encl 87 A is the same DGL as was published in

RTI Reply Received on 06 Jun 2014 to  MODEF/R/2014/60822 dated 29 Apr 2014 - Subject: Second SoC submitted by Service HQ and MODEF/R/2014/60846 dated 01 May 2014 – Subject: Draft of Corrigenda to MoD letter of 27.12.2012


Encl 96 A – is the present GoI/MoD order dated 24 Jul 2014