Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1096 OF 2010 [ARISING OUT OF SLP (CIVIL) NO.9071 OF 2009]

UNION OF INDIA    … APPELLANT

VERSUS

R.K. CHOPRA … RESPONDENT

J U D G M E N T

K.S. Radhakrishnan, J.

Leave granted.

2. We are, in this case, concerned with a claim  of a Government  

servant  for  revision  of  subsistence  allowance  based  on  the  pay  

revision effected by the Central Civil Services (Revision Pay ) Rules,  

1997, which came into force  on the 1st day of January, 1996, while  

he was under suspension from service.

3. The Respondent herein was working as a Desk Officer in the  

Department of Industrial Policy and Promotion under the Ministry of  

Commerce and Industries.  While so, a case was registered against  

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him  by  Central  Bureau  of  Investigation  under  the  Prevention  of  

Corruption  Act  and  he  was  placed  under  suspension  by  the  

Department w.e.f.  06.06.1989 under rule 10 (2) of the CCS (CCA)  

Rules  1965. Subsistence allowance due to him under Fundamental  

Rules 53 (1) (ii) (a) was paid to him which was later enhanced to 50%  

vide order No. 5/7/99, dated 30.05.1991.  At the time of suspension  

he was in the scale of pay of Rs. 2000-3500 and was drawing  a  

basic pay of Rs. 2,825/-. While undergoing  suspension he made a  

representation  on  22.7.2002  for  revision  of  subsistence  allowance  

based on the 5th Pay Commission Report.  Request was rejected by  

the Government of India, Ministry of Commerce and Industries vide  

Memorandum  dated  29.10.2002  stating  that  a  person  under  

suspension is  not  entitled  to  draw either  the increment  during the  

period of suspension or get his pay fixed in the revised scale.  Later  

he filed another representation on 05.07.2005 reiterating the same  

request which was replied by Memorandum dated 18.08.2005 stating  

that his earlier representation was already rejected.  Respondent was  

later dismissed from service on 04.08.2005 since he was convicted  

by the Criminal Court vide its judgment dated 30.03.2002.

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4.  The Respondent after dismissal from service approached the  

Central Administrative Tribunal (Principal Bench), New Delhi and filed  

O.A.  No.29/2006  challenging  the  above-mentioned  orders  dated  

29.10.2002 and 18.08.2005 and sought  a declaration  that  he was  

entitled to get subsistence allowance on the revised pay-scale with  

effect from 1.1.1996.  Reliance was placed on a Full Bench order of  

the Tribunal in J.S. Kharat  Vs. Union of India [2002-2003 (CAT) Full  

Bench Judgments 169].  The Department took up the stand that in  

view of  Note  3  to  Rule  7 of  Central  Civil  Services (Revised Pay)  

Rules, 1997, (for short ‘Revised Pay Rules’) the Respondent would  

not be entitled to get subsistence allowance on the revised pay-scale  

with effect from 1.1.1996. Further, it was also contended that the Full  

Bench of the Tribunal in the case of  J.S. Kharat was not concerned  

with the applicability of  the above-mentioned Rules.  Rejecting the  

contention the Tribunal took the view that it would be unjust to deny  

the subsistence allowance on the basis of revised pay to the persons  

who stood suspended prior to  01.01.1996, especially when persons  

who  were  suspended  after  that  date  would  be  entitled  to  get  

subsistence allowance on the revised pay scale.  This, according to  

the Tribunal, would lead to an anomalous situation.  The Tribunal,  

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however, held that since the respondent did not challenge the earlier  

communication dated 29.10.2002, rejecting his claim, he would not  

be  entitled  to  any  arrears  on  account  of  revised  subsistence  

allowance till the said date.  Further, it was ordered that he would be  

entitled  to  arrears  of  revision  of  subsistence  allowance  from  

01.01.2002 till 04.08.2005 when he was dismissed from service.  

5. Aggrieved by the order passed by the Tribunal, the Union of  

India took up the matter before the Delhi High Court vide Writ Petition  

(Civil) No.1899/2007. The High Court following its earlier judgment in  

Commissioner  of  Police v.  Randhir  Singh [Writ  Petition  (Civil)  

No.713/2008 decided on 29.01.2008] dismissed the appeal holding  

that it did not find any infirmity in the order of the Full Bench of the  

Tribunal in  J.S. Kharat’s case (supra).  Aggrieved by the said order  

dated 04.08.2008, this appeal has been preferred by the Union of  

India.   

6. Shri  Mohan  Parasaran,  Additional  Solicitor  General  of  India  

submitted that the Tribunal as well as the Delhi High Court have not  

properly appreciated the scope of Note 3 to Rule 7 of the Revised  

Pay Rules.  Learned counsel submitted that the Full  Bench of the  

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Tribunal in  J.S. Kharat’s case (supra) was primarily concerned with  

the interpretation of Rule 6(1) the Railway Servants  (Revised Pay)  

Rules 1986 and  the validity of Note 3 to Rule 7 of the Revised Pay  

Rules, was not an issue before the Tribunal.  Learned counsel also  

submitted that the High Court and Tribunal have failed to appreciate  

that the payment of subsistence allowance is based on leave salary  

(not pay) admissible during half pay leave and leave salary linked to  

pay drawn immediately before proceeding on leave.  Learned counsel  

submitted that the respondent is, therefore, not entitled to the benefit  

of subsistence allowance linked to pay or revised pay which he would  

have drawn but for being placed under suspension.  Learned counsel  

also submitted that the Government of India’s decisions 3 (e) below  

FR 53 shows that the subsistence allowance cannot be revised with  

retrospective  effect  and  in  the  instant  case  the  respondent  was  

dismissed from service and the question of revision of subsistence  

allowance did not  arise.   Learned counsel  also pointed  out   that  

there  was  no  challenge  to  the  validity  of Note -3 to Rule 7 of  

Revised Pay Rules and the Tribunal committed  an  error  in  failing to  

apply   to  the   said  note  to  rule  7   to   the    instant   case.  The  

respondent  appeared in  person  and  submitted  that there  is  no  

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illegality in the order passed by the Tribunal which was confirmed by  

the High Court.  

7. We notice both the  High Court  as well  as the Tribunal  has  

placed heavy reliance on the order of Full  Bench of the tribunal in  

J.S. Kharat’s  case (supra)  and  took  the  view  that  the  delinquent  

officer would be entitled to enhanced subsistence allowance on the  

basis  of the upward revision of pay based on the 5th Central Pay  

Commission  Report,  implemented  by  the  Revised  Pay  Rules.  

Reference was also made to  the decisions of this Court in State of  

Maharashtra  vs.  Chandrabhan Tale  [(1983) 3 SCC 387];  Khem  

Chand  vs.   Union of  India [  1963 Supp.  1 SCR 229];  Jagdamba  

Prasad Shukla Vs. State of U.P and others [(2000) 7 SCC 90];  P.L.  

Shah vs. Union of India and Anr. [(1989) 1 SCC 546]; R.P. Kapur Vs.  

Union of India & Ors. [(1999) 8 SCC 110]; and Umesh Chandra Misra  

vs.   Union of India [1993 Supp. (2) SCC 210]  

8. We notice that in none of the aforesaid judgments the validity of  

Note 3 to rule 7 of the Revised Pay Rules came up for consideration.  

In Chandrabhan’s case (supra), this Court was examining the validity  

of the  second proviso to Rule 151 (1) (ii)  (b) of the Bombay Civil  

Service  Rules,  1959  which  prescribed  payment  of  subsistence  

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allowance at  the  rate  of  Rs.  1  per  month.  Court  struck  down the  

proviso as void and unreasonable and ordered that the Civil Servant  

is entitled to the normal subsistence allowance.  The above ruling is  

of no assistance to the respondent.

9. In Khem Chand’s case this Court was examining the validity of  

Rule 12(4) of the CCS (CC&A) Rules 1957 which has nothing do with  

the question involved in the present case.  This Court was generally  

explaining the scope and effect of a suspension order stating  that the  

real  effect  of  a  suspension  order  is  that  though  a   Government  

servant continues to be a member of the Service  he is not permitted  

to  work  during  the  period  of  suspension    and  he  is  entitled  to  

subsistence allowance which is normally less than the salary.

10. In  Jagdamba  Prasad  Shukla’s case  (supra)  subsistence  

allowance   was denied to  the Government  Servant  since he had  

omitted  to  furnish  the  certificate  as  required  under  the  U.P.  

Fundamental  Rules  53(2)  indicating  that  he  was  not  employed  

elsewhere  during  the  period  of  suspension.   Non  payment   of  

subsistence allowance, this Court  held, has vitiated the departmental  

enquiry and the consequent removal order.  

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11. In  P.L. Shah’s case (supra) this Court was dealing with a case  

of  reduction of  subsistence allowance from 50% to 25% of  salary.  

Order  was  challenged  before  the  Tribunal  which  dismissed  the  

petition on the ground of delay.  This Court  set aside the orders of  

the Tribunal and the matter was remanded for fresh consideration,  

holding that the subsistence allowance should be sufficient  for  the  

bare sustenance  in this world in which  prices  of the necessaries  of  

life are increasing every day on account  of  conditions of   inflation  

obtaining  in the country. It was held that since Government Servant  

cannot  engage  himself   in  any  other  activity  during  the  period  of  

suspension  and the amount of subsistence allowance payable to the  

Government  Servant  be  reviewed  from  time  to  time  when  

proceedings drag on  long time even though there may be no express  

rule insisting of such review.

12. In  R.P. Kapur’s   case (supra), this Court was dealing with the  

scope of Railway Services (Pension) Rules, 1993 and the effect of  

Note 1 and proviso to Rule 50 and the Court took the view that the  

above-mentioned proviso is not applicable to a case of compulsory  

retirement. The scope of Note 3 to Rule 7 was not in issue in  R.P.  

Kapur’s case.

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13. In Umesh  Chandra  Misra’s  case   (supra),  this  Court  was  

dealing  with  the  case  of  a  railway  employee  who  was  denied  

subsistence allowance at the rate of 75% of the salary for the period  

from May 20, 1976 to February 17, 1977 and this Court directed the  

respondents to pay  him the subsistence allowance from November  

20, 1975 to May 19, 1976 at the rate of 50 per cent of the salary and  

from May 20, 1976 to February 17, 1977 at the rate of 75 per cent of  

the salary with interest  on both the amounts with a further direction  

that the subsistence allowance be paid on the basis of the  revised  

scale of pay. The legality of Note 3 to  Rule 7 was never an issue in  

that case.

14. The  claim  for  payment  of  subsistence  allowance  of  a  

Government  servant  is  dealt  with  in  Chapter  VIII  of  Fundamental  

Rules.  FR 53 which relevant for our purpose reads follows:-

“F.R.53.(1)  A  Government  servant  under  suspension  or  deemed  to  have  been  placed  under suspension by an order of the appointing  authority  shall  be  entitled  to  the  following  payments, namely:-

 (i)     xxxx              xxxx           xxxx xxxx

(ii) in the case of any other Government servant—

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(a)   a subsistence allowance at an amount equal to  the leave salary which the Government servant  would have drawn, if he had been on leave on  half average pay or on half-pay and in addition,  dearness allowance, if admissible on the basis of  such leave salary;

Provided  that  where  the  period  of  suspension  exceeds three months, the authority which made  or  is  deemed  to  have  made  the  order  of  suspension  shall  be  competent  to  vary  the  amount of subsistence allowance for any period  subsequent to the period of the first three months  as follows:-

(i)    the amount of subsistence allowance may be  increased by a suitable amount,  not  exceeding  50  per  cent  of  the  subsistence  allowance  admissible  during  the  period  of  the  first  three  months, if, in the opinion of the said authority, the  period  of  suspension  has  been  prolonged  for  reasons  to  be  recorded  in  writing,  not  directly  attributable to the Government servant;

(ii)   the amount of subsistence allowance, may be  reduced by a suitable amount, not exceeding 50  per cent of the subsistence allowance admissible  during the period of the first three months, if, in  the  opinion  of  the  said  authority,  the  period  of  suspension has been prolonged due to reasons,  to be recorded in writing, directly attributable to  the Government servant;

 (iii) the rate of dearness allowance will be based on  the  increased  or,  as  the  case  may  be,  the  decreased  amount  of  subsistence  allowance  admissible under sub-clauses (i) and (ii) above.

(b)   Any other compensatory allowances admissible  from time to time on the basis of pay of which the  

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Government servant was in receipt on the date of  suspension  subject  to  the  fulfillment  of  other  conditions  laid  down  for  the  drawal  of  such  allowances. xxxx xxxx xxxx

15. The  said  Rule  provides  that  the  Government  servant  under  

suspension shall be entitled to subsistence allowance at  an amount  

equal to the leave salary  which the Government servant would have  

drawn if he had been on leave on half average pay or on half pay and  

in addition,  dearness allowance if  admissible on the basis of such  

leave salary.  The proviso to Rule 53 (1)(ii) (a) says that where the  

period  of  suspension  exceeds  three  months,  the  authority  is  

competent  to vary the amount subject to some restrictions.

16. We may in this connection refer to a Government of India order  

G.M.O.M. No. F-2(36)-Ests/-III/58 dated 27th August, 1958 given  in  

the Swamy’s compilation of Fundamental and supplementary Rules,  

which deals with the revision of  scale of  pay while a Government  

Servant is under suspension. The two categories of cases have been  

dealt with  in that Office Memorandum.  One refers to cases in which  

the revised scale of pay takes effect from a date prior to the date of  

suspension and other cases in which the revised scales of pay takes  

effect from a date falling within the period of suspension.

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Office Memorandum reads as follows:-

“(2)  Revision of scale of pay while under suspension —A question having arisen as to whether a Government  servant  under  suspension  might  be  given  an  option  to  elect any revised scales of pay which might be introduced  in respect  of  the post  held by him immediately  prior  to  suspension  is  revised,  the  Government  of  India  have  decided as follows:-

1. Cases in which the revised scale of  pay takes effect from a date prior to  the date of suspension.

       In such cases the Government servant should be  allowed to exercise the option under FR 23 even if  the  period during which he is exercise the option falls within  the period of suspension.  He will be entitled to the benefit  of increase  in  pay, if any, in respect of the duty period  before  suspension,  and  also  in  the  subsistence  allowance,  for  the period  of  suspension,  as  a  result  of  such option.

2. Cases in which the revised scale of  pay  takes  effect  from a  date  falling  within the period of suspension.

(a) Under  suspension  a  Government  servant  retains  a  lien  on  his  substantive  post.   As  the  expression  ‘holder of a post’ occurring in FR 23 includes also a  person who holds a lien or a suspended lien on the  post even though he may not be actually holding the  post,  such a Government servant should be allowed  the option under FR 23 even while under suspension.  The benefit of option will, however, practically accrue  to  him in respect  of  the  period of  suspension,  only  after his reinstatement depending on the fact whether  the period of suspension is treated as duty or not.

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(b) A Government servant who does not retain a lien on a  post  the pay of which is changed, is not  entitled to  exercise the option under FR 23.  If, however, he is  reinstated in the post and the period of suspension is  treated as duty,  he may be allowed to exercise the  option  after  such  reinstatement.   In  such  cases,  if  there  is  a  time-limit  prescribed  for  exercising  the  option and such period had already expired during the  period of  suspension,  a relaxation may be made in  each individual case for extending the period during  which the option may be exercised.

17. The  above  mentioned  Rules  as  well  as  the  Memorandum  

makes it clear that if there is a revision of scale of pay in  respect of a  

post held by a Government Servant,  prior to the suspension period,  

he is permitted to exercise option under FR 23, even if  the period  

during which he is to exercise the option falls within the period of  

suspension and then, he will be entitled to the benefit of increase in  

pay and also in subsistence  allowance for the period of suspension,  

as a result of such option.  But if the revised scale of pay takes effect  

from a date falling within the period of suspension then, the benefit of  

option, for revised scale of pay will  accrue to him in respect of the  

period of suspension only after his reinstatement depending on the  

fact  whether the period of suspension is treated as duty or not. In the  

present case, the Revised Pay Rules,  came into force on 1st day of  

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January,  1996  when  the  respondent  was  under  suspension.  

Therefore, even if he had exercised his option  under FR 23 for the  

benefit of the above pay revision,  the same would have accrued to  

him only after his reinstatement depending  on the fact whether the  

period of suspension is treated as ‘on duty’ or not.  So far as the  

respondent  is  concerned,  he  was  dismissed  from  service  on  

4.8.2005, therefore the question  of the benefit of the revised pay and  

the  subsistence  allowance  thereon  on  the  basis   of  Revised  Pay  

Rules did not accrue to him.

18. The Revised pay Rules, which came into force on 01.01.1996  

in our view are in conformity with the FR 53 and the above-mentioned  

Office Memorandum issued by the Government of India.

19. Rule 5 of Revised Pay Rules deals with drawal of pay in the  

revised scales which reads as follows:-

“5.  Drawal  of  pay  in  the  revised  scales.— Save as otherwise provided in  these rules,  a  Government  servant  shall  draw  pay  in  the  revised scale applicable to the post to which he  is appointed:

Provided that a Government servant may elect  to  continue  to  draw pay in  the  existing  scale  until the date on which he earns his next or any  

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subsequent  increment in the existing scale or  until he vacates his post or ceases to draw pay  in that scale.

xxxx xxxx                      xxxx

Rule 6 which deals exercise of option reads as follows:-

6. Exercise of Option.---- (1)  The option under  the  proviso  to  Rule  5  shall  be   exercised  in  writing  in  the  form  appended  to  the  Second  Schedule  so  as  to  reach  the  authority  mentioned in sub-rule (2) within three months of  the date of publication of these rules or where  an existing scale has been revised by any order  made  subsequent  to  that  date,  within  three  months of the date of such order.

Provided that.—

(i) in the case of a Government servant who  is, on the date of such publication or, as  the case may be, date of such order, out  of India on leave or deputation or foreign  service or active service, the said option  shall  be  exercised  in  writing  so  as  to  reach  the  said  authority  within  three  months of the date of his taking charge of  his post in India; and

(ii)   where  a  Government  servant  is  under  suspension  on  the  1  st   day  of  January,    1996, the option may be exercised within  three months of the date of his return to  his duty if that date is later than the date  prescribed  in this sub-rule.

     xxxx xxxx                      xxxxx

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20. On a  combined reading  of  Rules  5 and 6,  it  is  clear  that  a  

Government  servant  under  suspension  on the  1st day  of  January,  

1996 is entitled to exercise his option within three months of the date  

of his return to duty if that date is later than the date  prescribed in the  

sub rule and if the intimation is not received he is deemed to have  

elected to be governed by the revised scale of pay with effect on and  

from the 1st day of January, 1996 on his return to duty. Respondent  

herein did not return to duty since he was dismissed from service and  

hence  there  was  no  question  either  exercising  the  option  or  the  

application of the deeming provision.   

21. Rule 7 deals with the fixation of  initial pay in the revised scale ,  

which reads as follows:-

“7. Fixation of initial pay in the revised scale. – (1)  The  initial  pay  of  a  Government  servant  who  elects,  or  is  deemed to have elected under sub-rule (3) of the Rule 6  to be governed by the revised scale on and from the 1st  day  of  January,  1996,  shall,  unless  in  any  case  the  President  by  special  order  otherwise  directs,  be  fixed  separately  in  respect  of  his  substantive  pay  in  the  permanent post on which he holds a lien or would have  held a lien if it had not been suspended, and in respect of  his pay in the officiating post held by him, in the following  manner, namely:-

xxx           xxx            xxx

xxx          xxx          xxx

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Note 3. Where a Government servant is on leave on  the 1st day of January, 1996, he shall become entitled to  pay in  the revised scale of  pay from the date he joins  duty.  In case of Government servant under suspension,  he shall  continue to draw subsistence allowance based  on existing scale of pay and his pay in the revised scale  of  pay  will  be  subject  to  final  order  on  the  pending  disciplinary proceedings.”

22. The word “Existing scale” has been defined under Rule 3 (2)  

which reads as under:

“existing scale” in relation to a Government servant  means the present scale applicable to the post held  by the Government servant (or as the case may be,  personal scale applicable to him) as on the 1st day of  January, 1996 whether in a substantive or officiating  capacity.”

23. The word ‘Revised scale’  has been defined under Rule 3(5),  

which reads as under:

“revised  scale”  in  relation  to  any  post  specified  in  column 2 of the First  Schedule means the scale of  pay specified against that post in column 4, thereof  unless a different revised scale is notified separately  for that post;”.   

24. Note 3 under Rule 7, therefore, indicates when a Government  

servant was on leave on 1.1.1996, he would become entitled to pay  

in  the  revised  scale  of  pay  from  the  date  he  joined  the  duty.  

However, in the case of a Government servant under suspension, he  

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would  continue to  draw subsistence allowance based on the  then  

existing scale of pay and his pay in the revised scale of pay would be  

subject to final order on the pending disciplinary proceedings.   

25. The Revised Pay Rules were framed by the President of India  

in exercise of the powers conferred by the proviso to Article 309 and  

clause 5 of Article 148 of the Constitution.  The proviso to Article 309  

enables the President to make Rules to regulate the recruitment and  

conditions of service of the persons mentioned therein.  The Rules  

framed by the President of India in exercise of the powers conferred  

by the proviso to Article 309 have the force of law.  Further, Note 3 to  

Rule 7 of Revised Pay Rules, 1997 were not challenged.  

26. On a combined reading of Note 3 to Rule 7  of the Revised Pay  

Rules  and  FR  53(1)(ii)(a)  with  the  clarification  with  Office  

Memorandum dated 27th August, 1958 it is clear that if the revision of  

pay takes effect  from a date prior  to  the date of  suspension of  a  

Government servant then he would be entitled to benefit of increment  

in pay and in the subsistence allowance for the period of suspension,  

but  if the revision scale of pay takes effect from a date falling within  

the period of suspension then the benefit  of revision of pay and the  

subsistence allowances will  accrue to him, only after reinstatement  

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depending on the fact whether the period of suspension is treated as  

duty or not.   In view of the clear distinction drawn by the Rule making  

authority between the cases in which the Revised scale of pay takes  

effect from a date prior to the date of suspension and a date falling  

within  the  period  of  suspension,  the  plea  of  discrimination  raised  

cannot  be sustained especially  when there  is  no challenge to  the  

Rules.  The benefit of pay revision  and the consequent revision of  

subsistence  allowance stand  postponed till   the  conclusion  of  the  

departmental  proceedings,  if  the pay revision has come into effect  

while  the Government  servant  is  under  suspension.  So far  as the  

present case is concerned, the  Revised  Pay Rules  came into force  

on 1st January, 1996 when the respondent was under suspension and  

later he was dismissed from service on 04.08.2005 and  hence the  

benefit of pay revision or  the revision of subsistence allowance did  

not accrue to him.  The Tribunal as well  as the High Court   have  

committed an error  in holding that the respondent is entitled to the  

benefit of Revised Pay Rules.  We, therefore, allow the appeal and  

set aside those orders.

27. We are informed that the respondent herein has filed an appeal  

against the order of conviction passed by the Criminal Court and the  

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same is pending consideration and if he is acquitted in appeal, the  

disciplinary  authority  would  take  appropriate  decision  on  the  

respondent’s  claim  for  revised  pay  scale  and  the  subsistence  

allowance in accordance with law.

…………………………….J. (R.V. Raveendran)

…………………………….J. (K.S. Radhakrishnan)

New Delhi; February 01, 2010.   

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