Case Note & Summary
The Supreme Court adjudicated review petitions filed by the National Ex-Servicemen Co-ordination Committee and others against the Controller General of Defence Accounts and others, along with connected appeals by Union of India. The review petitions arose from an earlier judgment of the Supreme Court reported as Union of India v. G. Vasudevan Pillay, (1995) 2 SCC 32, which had denied Dearness Relief on pension to ex-servicemen re-employed under Central or State Government. The review petitioners contended that the earlier judgment had relied on documents annexed with written submissions filed after the judgment was reserved, denying them an opportunity to respond. The core substantive dispute concerned denial of Dearness Relief on pension to re-employed ex-servicemen, allegedly discriminating against them compared to those re-employed in public sector undertakings or nationalized banks. The review petitioners argued that the Office Memorandum dated 1.8.1975, made applicable to Armed Forces pensioners by Ministry of Defence letter dated 28.10.1975, was discriminatory. They also invoked a subsequent Office Memorandum dated 8.2.1983 regarding pay fixation, arguing that pension was treated differently from pay and therefore Dearness Relief on pension should coexist with Dearness Relief after re-employment. Additionally, they contended that service conditions of armed forces personnel were unattractive, many posts lay vacant, and ex-servicemen deserved different treatment. Some re-employed personnel had retired and were facing recovery of Dearness Relief already disbursed, causing hardship. One counsel argued that the 1975 OM did not apply to naval, military and air forces based on Entry 2 of List I of the Seventh Schedule, and that instead of executive orders, the Ex-servicemen (Re-employment in Central Civil Services and Posts) Rules, 1979 should have been amended. The Court rejected the discrimination argument, holding that government employees form a distinct class from public sector undertaking or nationalized bank employees. It rejected the effect of the 1983 OM, stating that its subject matter was entirely different and did not affect the rationale that Dearness Relief after re-employment takes care of erosion in money value, and paying Dearness Relief on pension would amount to double relief. On the argument regarding unattractive service conditions, the Court acknowledged some force but left the matter to government policy, directing the Union of India to consider treating ex-servicemen differently keeping in view national perspective. On recovery of disbursed amounts, the Court found force in the hardship argument and directed appropriate authorities to consider not insisting on realisation. The Court rejected the Entry 2 argument, holding that the word "other" in "other armed forces of the Union" clearly shows naval, military and air forces are armed forces. It also rejected the need to amend the 1979 Rules, stating that executive instructions can alter service conditions where the field is not occupied by statutory rules. The review petitions were dismissed with the aforesaid directions. In the connected appeals by Union of India against V.P. Ayyappan and others, the Supreme Court allowed the appeals by setting aside the impugned judgment in view of the decision in Union of India v. G. Vasudevan Pillay and the dismissal of the review petitions, and applied the same observations regarding non-realisation of already disbursed amounts.
Headnote
A) Service Law - Dearness Relief on Pension - Re-employed Ex-Servicemen - Office Memorandum dated 1.8.1975 and Ministry of Defence Letter dated 28.10.1975 - Denial of Dearness Relief on pension to ex-servicemen re-employed under Central/State Government was upheld as reasonable; Government employees form a distinct class from public sector undertakings or nationalized banks employees; Held that no discrimination arises (Para 2). B) Service Law - Interpretation of Office Memoranda - Effect of OM dated 8.2.1983 - The 1983 OM on pay fixation ignoring pension did not alter the rationale for denying Dearness Relief on pension during re-employment; Held that Dearness Relief after re-employment takes care of erosion in money value, and paying Dearness Relief on pension would amount to double relief, which is not visualized (Para 3). C) Constitutional Law - Armed Forces Definition - Entry 2, List I, Seventh Schedule, Constitution of India - The term "other armed forces of the Union" includes naval, military and air forces; Held that the Ministry of Defence letter dated 28.10.1975 applied to Armed Forces pensioners, including naval, military and air forces personnel (Para 6). D) Administrative Law - Executive Instructions vs Statutory Rules - Ex-servicemen (Re-employment in Central Civil Services and Posts) Rules, 1979 - Service conditions can be altered by executive instructions where the field is not occupied by statutory rules; Held that non-amendment of the 1979 Rules was of no consequence when executive OM was validly issued (Para 6). E) Service Law - Policy and Recovery of Excess Payments - Dearness Relief already disbursed - The Court directed the Union of India to consider treating ex-servicemen differently due to unattractive service conditions and to sympathetically consider non-realisation of Dearness Relief amounts already disbursed to re-employed ex-servicemen; Held that recovery may cause hardship and appropriate authorities should consider not insisting on realisation (Paras 4-5, 7).
Issue of Consideration
Whether denial of Dearness Relief on pension to ex-servicemen re-employed under Central or State Government was discriminatory compared to those re-employed in public sector undertakings or nationalized banks; whether the Office Memorandum dated 8.2.1983 altered the applicability of the 1975 Office Memorandum; whether ex-servicemen deserved different treatment due to unattractive service conditions; whether recovery of already disbursed Dearness Relief should be insisted; whether the 1975 Office Memorandum applied to naval, military and air forces; whether executive instructions could alter service conditions without amending the Ex-servicemen (Re-employment in Central Civil Services and Posts) Rules, 1979.
Final Decision
The review petitions were dismissed. The Court directed the Union of India to apply its mind to the question whether ex-servicemen could be treated differently from others in view of their unattractive service conditions, and to sympathetically consider non-realisation of amounts already disbursed to re-employed ex-servicemen. In the connected appeals, Union of India v. V.P. Ayyappan and others, the appeals were allowed by setting aside the impugned judgment in view of Union of India v. G. Vasudevan Pillay and the dismissal of review petitions, with the same observations on non-realisation applying.
Law Points
- Government employees form a distinct class
- Dearness Relief after re-employment takes care of erosion and double relief not visualized
- executive instructions can alter service conditions where no statutory rules
- 'other armed forces' includes naval
- military and air forces
- policy matters for government
- recovery of disbursed amounts may be waived sympathetically
