Supreme Court Upholds Government Appeal in Service Allowance Dispute; Directs Modification of Order and Bars Recovery of Prior Payments. Defence civilian employees in North-eastern region entitled to both Special Duty Allowance and Special Compensatory (Remote Locality) Allowance only up to 17 April 1995, and thereafter only one set of Special Duty Allowance, with double payment restricted to personnel in field areas facing hostilities, not to those in modified field area barracks.

Service law dispute concerning entitlement of defence civilian employees to Special Duty Allowance and Special Compensatory (Remote Locality) Allowance in the North-eastern region.

Union of India sought to set aside or modify the Central Administrative Tribunal's orders holding employees entitled to both allowances and to clarify prospective application of the modified order.

Government modified allowance policy on 17.04.1995, leading to conflicting interpretations and Tribunal orders requiring dual payment; Union of India challenged those orders.

Central Administrative Tribunal, Gauhati Bench, in main order dated 17.11.1995 in RA No. 4/95 in OA No. 49/89, held that defence civilian employees are entitled to both Special Duty Allowance and Special Compensatory (Remote Locality) Allowance.

Whether defence civilian employees in North-eastern region are entitled to both Special Duty Allowance and Special Compensatory (Remote Locality) Allowance before and after the modified order dated 17.04.1995. Whether the Government order requires modification to restrict double payment to personnel deployed in field areas facing hostilities, as opposed to those in modified field areas (barracks). Whether Union of India can recover payments made prior to 17.04.1995.

Mr. P.P. Malhotra, senior counsel for Union of India, argued that the Tribunal's view that employees are entitled to both allowances is incorrect and that they would be entitled to either of the allowances, not both. Shri P.P. Rao, senior counsel for some respondents, contended that civilian employees deployed earlier were given Special Duty Allowance to attract competent persons and are entitled to both, while amended concessions apply only to those transferred after 17.04.1995. Shri Arun Jaitely, senior counsel for some respondents, drew distinction between Field area and Modified Field area and submitted that denying double payment to those supporting field defence personnel facing hostilities while granting double benefit to those in barracks creates hostile discrimination and unjust results.

The Court interpreted the Government allowance orders prospectively: employees were entitled to benefits under orders in force until modification on 17.04.1995, after which only one allowance was payable. A classification based on operational risk between Field Area and Modified Field Area justified differential allowance, with double payment only for those facing hostilities. Past payments made under earlier orders cannot be recovered.

The Government of India have been issuing order from time to time payment of allowances and facilities for civilian employees of the Central Government servants working in the States and Union Territories of the The North-eastern region. It is not in dispute that special Duty Allowance was ordered by the Government @ 25% of the basic pay subject to ceiling of Rs. 400/- per month on posting on any station in the North-eastern region. irrespective of the fact whether or not they have been deployed earlier to that date, all are entitled to both the allowances only upto that date. Thereafter, all the personnel whether transferred earlier to that or transferred from on or after that date, shall be entitled to payment of only one set of Special Duty Allowance in terms of the above modified order. They alone require the double payment as ordered by the Government but they cannot be deprived of the same since they are facing imminent hostilities in hilly areas risking their lives as envisaged in the proceedings of the Army dated January 13, 1994, But the Modified Field Area, in other words, in the defence terminology, "barracks" in that area in a lesser risking area; hence they shall not be entitled to double payment. It is made clear that the Union of India is not entitled to recover any payments made of the period prior to April 17, 1995.

The matters originated from various orders passed by the Central Administrative Tribunal, Gauhati Bench in different matters. The main order was passed on 17.11.1995 in RA No. 4/95 in OA No. 49/89. The Union of India filed special leave petitions challenging those orders. Leave was granted, and the appeals were disposed of by the Supreme Court's order dated 17.02.1997.