CENTRAL ADMINISTRATIVE TRIBUNAL
ERNAKULAM BENCH
Original Application No. 180/00704/2015
Tuesday, this the 19th day of July, 2016
CORAM:
HON'BLE MR. U. SARATHCHANDRAN, JUDICIAL MEMBER
P.J. Abraham, S/o. P.I. Joseph, aged 86 years,
Chief Mechanical Engineer (Retd.), Integral Coach Factory,
38, Vrindavanam, SCB Road, Cochin-682 019. . . . . Applicant
(By Advocate - Mr. C.S.G. Nair)
Versus
1. Financial Advisor & Chief Accounts Officer,
Integral Coach Factory, Perambur,
Chennai - 600 038.
2. Union of India, represented by the Secretary,
Ministry of Personnel, Public Grievances & Pension,
Department of Pension & Pensioner's Welfare,
Lok Nayak Bhawan, Khan Market, New Delhi - 110 003.
3. Branch Manager, Union Bank of India,
Panampilly Nagar, Cochin - 682 034. .... Respondents
[By Advocates : Ms. P.K. Radhika (R1),
Mr. K.C. Muraleedharan, ACGSC (R2) &
Mr. K.S. Ajayagosh (R3)]
This application having been heard on 29.06.2016, the Tribunal on
19.07.2016 delivered the following:
ORDER
Hon'ble Mr. U. Sarathchandran, Judicial Member -
The applicant is a retired Chief Mechanical Engineer, retired from the
Integral Coach Factory, Chennai under the Railways on 31.8.1983. He had
put in 31 years of service under the Railways. He was deputed to Balmer &
Lawrie Company Limited, a Central Public Undertaking (CPU) in 'public
interest'. As an incentive to attract all competent personnel from Government
Departments for deputation, he was offered the additional facility of
commuting 100% of his pension in the parent Department. Normally for a
pensioner 1/3rd pension is allowed to be commuted. But for those who opted
to deputation to Central Public Sector Undertakings the balance 2/3 rd of the
pension also was allowed to be commuted. On the basis of the decision of the
Apex Court in Common Cause, A Registered Society & Ors. v. Union of
India - (1987) 1 SCC 142, the 1/3rd pension was restored after a lapse of 15
years since 1999. The applicant states that on implementation of the VIth
Central Pay Commission (CPC) the Government ordered that revision of
Pension in no case shall be lower than 50% of the minimum of the pay in the
pay band plus Grade Pay corresponding to the pre-revised scale from which
the pensioner had retired. According to the applicant he is a similarly situated
and he seeks the relief as under:
'(i) To declare that the applicant is entitled for revision of pension as per
para 4.2 of OM dt. 1.9.2008 i.e. 50% of the minimum of the pay in the pay band
plus grade pay of Chief Mechanical Engineer i.e. 27,350/- w.e.f. 1.1.2006.
(ii) To direct the respondents to issue revised PPO to the applicant fixing the
monthly pension @ Rs. 27,350/- w.e.f. 1.1.2006 and also the corresponding
family pension and grant all consequential benefits including arrears of pension
with interest @ 12% p.a. within a stipulated period.
(iii) To direct the 1st respondent to pay the arrears of balance amount of
pension w.e.f. 1.5.1999 to 31.12.2005 @ rs. 5,762/- p.m. along with the
Dearness Relief applicable to it with interest @ 12% p.a. within a time frame.
(iv) To refund the recovered amount from the pension of the applicant with
interest.
(v) To Grant such other relief or reliefs that may be prayed for or that are
found to be just and proper in the nature and circumstances of the case.
(vi) To grant cost of this OA.'
2. The respondent No. 1 filed reply statement stating that at the time when
he was relieved from Integral Coach Factory on 1.8.1983 and was absorbed in
Balmer & Lawrie Company Limited, the settlement benefits were processed
as per the extant rules and gratuity and lumpsum amount in lieu of pension
were worked out with reference to commutation table. His date of
commutation was 1.5.1984 and the date of restoration was 1.5.1999. Due to
the implementation of the VIth CPC, the applicant's notional full pension was
revised from Rs. 8,643/- to Rs. 25,693/-. According to the respondents the
revision of pension at 50% of minimum of the pay band and Grade Pay as per
VIth CPC scales has not been extended to public sector undertakings
absorbees who are entitled to restoration of 1/3 rd pension. It is also contended
that the applicant is entitled to only pro-rata pension as he had less than the
maximum required service for full pension. Respondent No. 1 pray for
rejecting the OA.
3. The respondent No. 3 pension disbursing bank submitted that recovery
for overpayment of excess amount of Rs. 18,35,166/- was started from the
applicant's pension from the month of July, 2015 as per the letter received
from the Integral Coach Factory stating that there was such overpayment. As
per the interim order passed by this Tribunal and on the instructions of the
Integral Coach Factory, the Bank has stopped recovery from the pension of
the applicant.
4. Heard the learned counsel appearing for the applicant, respondent No.
1, respondent No. 2 and respondent No. 3.
5. Learned counsel for the applicant Shri C.S.G. Nair, besides the
Common Cause's case (supra), relied on the judgment dated 2.8.2007 in Writ
Petition No. 22207 of 2002 of the Madras High Court in K. Ganesan v.
Registrar & Ors. In the above case, the petitioner was originally employed as
Deputy Controller General of Accounts in the Department of Expenditure. He
opted to join a public sector undertaking i.e. Bharat Heavy Electricals
Limited. He opted for commutation of pension of 1/3 rd and 2/3rd part apart
from the pro-rata gratuity. His entire pension was thus commuted and the
same was paid to him in July, 1986. The Madras High Court relying on Rule
37-A of Pension Rules and Sections 10 & 12 of the Pension Act, 1871
directed the respondents (his original employer) to restore the pension
payable after the expiry of commutation of 2/3 rd pension and pay all the
arrears payable to him and to continue to pay the same for the future period.
6. Shri C.S.G. Nair learned counsel for the applicant submitted that the
facts and law laid down in the decision of the Madras High Court is squarely
applicable to the applicant in the present OA and that he is entitled to get his
full pension restored although he had commuted 100% of his pension at the
time when he left the job with the Integral Coach Factory and got absorbed in
a public sector undertaking Balmer & Lawrie Company Limited.
7. While discussing the legal aspects of the case in K. Ganesan's case
(supra) His Lordship Justice F.M. Ibrahim Kalifulla (as his Lordship then
was) held:
'11. .......................................Though we made our anxious consideration to
the decisions reported in 1991 (2) SCC 265 (Welfare Assn. Of Absorbed Central
Government Employees v. Union of India), 1996 (2) SCC 187 (Welfare
Association of Absorbed Central Government employees in Public Enterprises v.
Union of India), AIR 1998 SC 2862 (Welfare Associn. Of A.C.G.E. in P.E. v.
Arvind Verma) and AIR 2000 SC 3387 (P.V. Sundara Rajan v. Union of India),
is none of the decisions, the question as to the prohibition imposed under Section
12 of the Pensions Act to surrender once own right of a pensioner was never
considered. In paragraph-13 of the decision of the Honourable Supreme Court
reported in AIR 2000 SCC 3387, the Honourable Supreme Court while holding
that the absorbees who had commuted 100% pension, continue to remain non-
pensioners made clear, such position would be prevalent only till their pension is
restored. Therefore, when in the case on hand, when the petitioner who also
sought for 100% commutation of pension at the time of his absorption in BHEL
in the year 1986, in the light of the decision of the Honourable Supreme Court
reported in 1996 (2) SCC-187 (Welfare Association of Absorbed Central
Government Employees in Public Enterprises v. Union of India), he was fully
entitled for the benefits granted to the Government servants in the common cause
case in so far as it related to 1/3 rd pension commuted by him. By virtue of such a
declaration of law made by the Honourable Supreme Court which made it clear
that the petitioner was nevertheless a pensioner, it will have to be held that as a
pensioner, he would be entitled for the protection under Section 12 of the
Pension Act, 1871 in so far as it related to surrendering of his rights as provided
under Rule 37-A of the CCS Pension Rules................ '
Referring to the provisions of Sections 10 & 12 of Pension Act, 1871 it was
further held:
'12. Section 12 of the Pensions Act, 1871 reads as under:
'12. Assignments etc., in anticipation of pension to be void.
All assignments, agreements, sales and securities of very kind made by
the person entitled to any pension, pay or allowance mentioned in
Section 11 in respect of any money not payable at or before the making
thereof on account of such pension, pay or allowance or for giving or
assigning any future interest therein are null and void.'
13. Under Section 10 as stated by us earlier, while commutation of pension
for the whole or any part of it can be opted by a pensioner based on such terms
fixed under the Rules, it will have to be stated that such enabling provision
providing for commutation for either part or whole of the pension can only for
commutation purposes and that under the guise of commutation, it will not be
open for the Government to once and for all wipe of the very right to restoration
of such pension after the expiry of the period of commutation. In fact, Rule 37-A
clause (b) though uses the expression the commutation of balance amount of
pension namely the 2/3 rd of pension, the stipulations contained therein providing
for such commutation of 2/3rd pension would be subject to surrendering of the
right of Government servant, for drawing the 2/3 rd pension would run counter to
the very concept of commutation which will not be in consonance with Section
10 providing for commutation of pension alone and not the right to claim
pension after the period of commutation. '
Referring to the pensioners surrender of right for drawal of 2/3 rd of his
pension by agreeing for the terms contained in Rule 37-A of Pension Rules
which amounted to a wholesale surrender of his right to pension, the Court in
that case ruled:
'14. ....................................When under Section 12 of the Act, there is a
prohibition imposed on the pensioner himself to barter away his right under very
many circumstances except as provided under Section 12-A of the Pensions Act,
we are convinced that surrendering of the right for drawal of 2/3 rd of Pension
after its commutation as provided under Rule 37-A (b) is repugnant to Section 12
and is straight away hit by the prohibition imposed under Section 12.
Consequently any action based on Rule 37-A(b) is wholly illegal and therefore,
the surrendering of rights of the petitioner for drawing 2/3 rd pension at the time
of its commutation to that extent can not operate against his interest. We
therefore, declare that such surrendering rights by the petitioner at the time of his
absorption in the year 1986 while commuting 2/3 rd of his pension, was invalid
and consequently the petitioner was lawfully entitled for the restoration of his
pension after the expiry of the period of commutation of 2/3 rd pension.'
8. In the light of the law laid down by the Madras High Court which is
arising from a decision of the Co-ordinate Bench of this Tribunal, the same is
binding on this Tribunal also. Therefore, in the light of the aforecited decision
of the Madras High Court this Tribunal holds that the applicant is entitled to
get his full pension restored after the expiry of 15 years of his commutation as
laid down in Common Cause's case (supra). The pension to be so restored
shall necessarily be in accordance with the VIth CPC scale of revised pension
with effect from 1.1.2006 i.e. 50% of the minimum of pay in the pay band
plus Grade Pay corresponding to the post in which the applicant retired from
service i.e. Chief Mechanical Engineer.
9. Therefore, this Tribunal directs the respondents to issue revised
pension payment order to the applicant fixing his pension as 50% of the
minimum of the pay in the revised pay band plus Grade Pay of the post from
which he left the post (of Chief Mechanical Engineer). The applicant will be
entitled to get the pension at the rate mentioned above with effect from
1.1.2006. It is also made clear that the applicant is entitled to the full pension
at the rate prevailing in 1999 when his pension was restored and the same rate
will have to be paid to him from 1.5.1999 till 31.12.2005 along with the
dearness relief applicable to it and thereafter at the rate as stated above from
1.1.2006. Ordered accordingly. The respondents shall implement the order
within three months from the date of receipt of a copy of this order.
10. The Original Application is disposed of as above. No order as to costs.
(U. SARATHCHANDRAN)
JUDICIAL MEMBER
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