http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

CASE NO.: Appeal (civil)  2327-2328 of 1999

PETITIONER: N.D.P. Namboodripad                      

RESPONDENT: Union of India & Ors.                    

DATE OF JUDGMENT: 16/04/2004

BENCH: S. RAJENDRA BABU & P. VENKATARAMA REDDI

JUDGMENT: J U D G M E N T

RAJENDRA BABU, J. : The appellant was a member of the Higher  Judicial Services of the State of Kerala and was  elevated as a Judge of the High Court of Kerala in  1972.  He retired from service with 23 years of  pensionable service; 8 years of which he served as a  High Court Judge.          The Pension and other benefits of High Court  Judges are determined on the basis of Part III of the  1st Schedule of the High Court Judges (Conditions of  Service) Act, 1954, as amended by the Amending  Acts, 1986 and 1988.  In accordance with these  provisions, the basic pension payable to the  Appellant was fixed at Rs.17,300/- p.a.          The U.O.I. issued order O.M. dated 16.04.1987  rationalizing the pension structure of employees who  retired before 1.1.1986.  It is also stated in the said  order that separate orders vis-‘-vis the Pension of  the retired High Court and Supreme Court Judges  would be issued.  Accordingly the Government of  India in a Notification dated 18.12.1987, ordered to  revise the ordinary pension admissible to High Court  Judges under clause 2(a) of Part III of the 1st  Schedule of the Act with effect from 1.1.1986.          In G.O. Ms. 228/89/GAD dated 19.10.1989 the  Government of Kerala issued orders extending the  benefit of O.M. dated 16.04.1987 to the retired  Judges of the High Court with effect from 1.1.1986.          Accordingly, the appellant’s pension was revised  to Rs.32,720/- per annum with effect from 1.1.1986  to 31.10.1986.  Considering the amendment to Para  2(b) of Part III to Schedule I of the Act by Act 38 of  1986, whereby the figures of Rs. 700/- and Rs.  3500/- were substituted with figures of Rs. 1600/-  and Rs. 8000/-, there was a further increase in the  appellant’s pension to Rs. 37,220/- per annum with  effect from 1.11.1986.            Aggrieved by this order, the appellant filed O.P.  No.203 of 1990 before the High Court of Kerala.

       A learned Single Judge vide judgment dated  12.03.1992 allowed the Original petition and directed  the Respondents to refix appellant’s pension at

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

Rs.35,000/- per annum from 1.1.1986 and at Rs.  47,900/- per annum from 1.11.1986.  He also held  that the appellant would be entitled to all other  consequential benefits according to this re-fixation of  pension.

       Aggrieved by this judgment, the Respondent  No.1 filed W.P./Appeal No.804/1992 before the  Division Bench of the High Court of Kerala.  The  Division Bench vide judgment dated 10.07.1997  allowed the appeal, inter alia, holding that the  method used by the U.O.I. in calculating the pension  was quite correct and held that the method used by  the learned Single Judge in calculating the pension  by adding the figures under clauses (a) and (b) of  para 2 of Part III of the 1st Schedule of the Act in  order to find out the amount of revised pension, was  not correct.         Aggrieved, the appellant filed Review Petition  No. 299/1997 before the High Court.  The High Court  vide Order dated 10.11.1997 dismissed the Review  Petition, inter alia, holding that the appellant had no  case that the order sanctioning pension to the  appellant is illegal.  Hence these appeals by special  leave.                  The two issues which arise for consideration  are:  (I)     Whether the High Court’s fixation of the  pension under clause 2(a) is correct?  (II)    Whether the High Court was correct in not  adding the figures under para 2 cls. (a) and  (b) of Schedule I, Part III of the Act in order  to find out the revised amount of pension  and whether a ceiling was imposed under  clause 2(b) ?

ISSUE NO. I         The appellant claims that the decision of the  Division Bench regarding the fixation of the pension  due to the appellant under cl. 2(a)  is incorrect.  The  appellant claims that G.O. (P) No. 760/89/FW dated  26.12.1989 (Annexure P-7) states that pension has  to be determined at 50% of the average emoluments  in all cases.  Accordingly, he claims that Rs. 4237/-  was the last emolument he received prior to his  retirement and it is one half of this amount & not the  salary of Rs. 3500/- that should be taken for fixation  of pension under cl. 2(a).  The appellant arrives at  this figure of Rs. 4237/- by including dearness  allowance and special allowances.   

       This issue was not addressed by the Division  Bench in the Writ Petition and in the Review Petition  it rejected it on the ground that in the case of M.L.  Jain  vs.  Union of India,  1985 (2) SCC 355) Rs.  3500/- was taken as the amount for calculating the  pension.  Further, it states that the learned Single  Judge in O.P. No. 203 of 1990 had also taken the  same amount for purposes of calculation.

       The appellant, however, places reliance on Rule  62 of Part III of the Kerala Service Rules, which  reads as follows :- "Rule 62.  The term emolument when used in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

this part means the emolument which the  employee was receiving immediately before his  retirement and includes : (a)     pay as defined in Rule 12(23) in Part I of  these rules and for pay of the appointed  under rule 9 or rule 31 of the Kerala  State and Subordinate Service Rules. (b)     The dearness pay the employee was  actually in receipt of."

It is the respondents’ contention that  the appellant was getting dearness allowance  and special allowance and not dearness pay,  to attract Rule 62.  In fact, the respondents  rely on this very Rule to justify why dearness  allowance and other special allowance were  not added to the last salary of Rs. 3500/- for  the purposes of calculating the appellants  pension.

       The appellant, however, contends that  since the first part of the rule means   "emolument which the employee was  receiving immediately before his retirement"  any such emolument cannot be taken away  by the inclusive definition contained in clause  (b) of Rule 62.

       The appellant’s contention seems to be  correct in law.   The phrase "and includes" in  Rule 62 cannot be taken to mean  "and only  includes".     The first part of the definition  cannot be taken away by the inclusive  definitions contained in clause (a) and (b) of  Rule 62.

       Therefore, the respondents are not  justified inasmuch as the dearness allowance  and special allowance drawn by the appellant  was not taken into account for the calculation  of the appellant’s pension.  It is true that in  the Ist M.L. Jain case, 1985 (2) SCC 355, the  calculations were adopted taking the last  salary into consideration.  However, the  above point of whether the last received  emoluments inclusive of dearness allowance  and other special allowances should be taken  for the purposes of calculating pension or the  last salary drawn should be taken was not  addressed in that case.   

       Accordingly, the calculations should  adopt Rs.4,237/-, which is inclusive of  dearness allowance and special allowances  and not Rs.3,500/- as the basic amount.  

ISSUE NO. II         With regard to the issue as to whether  the two amounts covered by Cls. (a) & (b) of  para 2 of Part III of the 1st Schedule to the  Act can be put together to find out the  revised rate from the table attached to the  order dated 16.4.1987, which rationalised the  pension structure of employees who retired  before 1.1.1986; the Division Bench held that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

such a course is not permissible.  

       Cl. (a) of para 2 deals with the pension  to which a Judge is entitled under the  ordinary rules of his service.   Cl. (b) refers  to a special additional pension per annum in  respect of each completed year of service to  be paid to the retired High Court Judge.

       The notification/order dated 18.12.1987  clearly states that the "ordinary pension  admissible to High Court/Supreme Court  Judges under para 2(a) of Part III of the 1st  Schedule to the High Court/Supreme Court  Judges (Condition of Service) Act, 1954/1958  respectively may be revised with effect from  1.1.1986\005.."

       Thus, it is evident that what is revised  under the order is ordinary pension under  para 2(a) and not the special additional  pension under para 2(b) and each of them  have different characteristics.         Therefore, the view of the Division  Bench that the figures under clauses (a) and  (b) of para 2 of Part III of the 1st Schedule of  the Act cannot be added for the purposes of  finding out the revised pension is correct,

       The appellant further contends that the  Division Bench in its calculation of pension  makes the error of restricting it to the ceiling  of Rs. 8000/- laid down in clause (b).

       The ceiling was categorically rejected by  this Court in the third case filed by Shri M.L.  Jain, 1991 (1) SCC 644.  This contention of  the appellant is correct. However, even  though the Division Bench makes an order  while imposing the ceiling, it can be seen that  the respondents have however authorised  the appellant the amount of Rs.12,800/-.   Therefore, despite the High Court’s judgment  the respondents have actually not imposed  the ceiling of Rs.8,000.  Hence there is no  requirement to pass any specific direction in  this regard.

       Taking into consideration the above,  these appeals are partially allowed and order  under appeal stands modified with the  following directions :-  (a)     For the purpose of calculations  the  emoluments received as last payment  including dearness allowance and other  special allowances be considered and  not merely the last salary of Rs. 3500/- (b)     Clauses 2 (a) and (b) of Part II of 1st  Schedule of the Acts and Rules  governing the service condition of the  High Court Judges should not be taken  into account in order to find out the  amount of revised pension. (c)     There should be no ceiling imposed on  the amount the appellant can receive

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

under cl. (b) of the Act.  (d)     The respondents shall recalculate the  pension as indicated above within a  period of three months and pay, if any,  arrears are due within three months  thereafter.