*THE HON’BLE SRI JUSTICE BILAL NAZKI THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE P.S.NARAYANA +Writ petition Nos.22042, 24191, 24308, 24324 and 24325 of 2003 % 27-01-2005 # Between: 1. The Principal Accountant General, Andhra Pradesh, Saifabad, Hyderabad and others. …Petitioners A N D C. Subba Rao, S/o. C. Tataiah, Retired Senior Audit Officer, O/o. Principal Accountant General, Andhra Pradesh. Hyderabad And others …Respondents ! COUNSEL FOR THE PETITIONERS: Mr.A.RAJASEKHARA REDDY, Senior Central Government Standing Counsel ^ COUNSEL FOR RESPONDENTS: Mr.G.VIDYA SAGAR representing Mr.P.V.P.Mrutyanjaya Rao, Advocate < Gist: > Head Note: ? CITATIONS: 1. 2002 (4) ALT 550 2. 1989 Supp. (2) SCC 486 = AIR 1990 SC 285 3. 2002 (1) CAT 365 (AIS) 4. AP FB Judgments (1997-2001) 50 5. AIR 1981 SC 1922 (para 17) 6. 2001(1) Administrative Total Judgments 151 7. Halsbury’s Laws of England Volume 45 (2) Fourth Edition (Reissue) 8. AIR 1998 SC 2102 (para 8) = (1998) 5 SCC 542 9. AIR 2000 SC 2163 (para 11) = (2000) 4 SCC 35 10. (2000) 3 SCC 736 11. (2000) 3 SCC 733 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY SEVENTH DAY OF JANUARY TWO THOUSAND AND FIVE PRESENT THE HON'BLE MR JUSTICE BILAL NAZKI THE HON'BLE MR JUSTICE V.V.S.RAO And THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NO : 22042 of 2003 Between: 1. The Principal Accountant General, Andhra Pradesh, Saifabad, Hyderabad. 2. The Comptroller and Auditor General of India, Bahadur Shah Zafar Marg, New Delhi. ….PETITIONERS AND C. Subba Rao, S/o. C. Tataiah, Retired Senior Audit Officer, O/o. Principal Accountant General, Andhra Pradesh. Hyderabad. .....RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of Certiorari or any other appropriate writ, order or direction, calling for the records, pertaining to OA No. 797 of 2002 dated 12.11.2002 on the file of the Hon'ble Administrative Tribunal, Hyderabad Bench, Hyderabad and quash the same as illegal, arbitrary, contrary to law and unconstitutional and declare the same as void ab inito, null and honest in the eye of law. WRIT PETITION NO : 24191 of 2003 Between: 1. The Prinicipal Accountant General, Andhra Pradesh, Saifabad, Hyderabad. 2. The Comptroller and Auditor General of India, Bahadur Shah Zafar Marg, New Delhi. ….PETITIONERS AND R. Dharmarajan, S/o. D. Rama Krishna Iyer, (Retd) Dy. Accountant General, Office of the Principal Accountant General (Audit), Andhra Pradesh, Hyderabad. S-2, Divya Durga Apts., Kavadiguda, Hyderabad. .....RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of Certiorari or any other appropriate writ, order or direction, calling for the records, pertaining to O.A. No. 714 of 2003 dated 23.07.2003 on the file of the Hon'ble Central Administrative Tribunal, Hyderabad Bench, Hyderabad and quash the same as illegal, arbitrary, contrary to law and unconstitutional and declare the same as void ab initio, null and void and nonest in the eye of law and pass such other and further order or orders as this Hon'ble Court may deem fit and proper. WRIT PETITION NO : 24308 of 2003 Between: 1. The Principal Accountant General, Andhra Pradesh, Saifabad, Hyderabad 2. The Comptroller and Auditor General of India, Bahadur Shah Zafar Marg, New Delhi ….PETITIONERS AND 1 M.N. Avadhanulu, S/o Subba Rao, 249/2, R.T. Saidabad Colony, Hyderabad - 500 059. 2 Smt. Rajee Sampath Kumaran W/o R. Sampath Kumaran, R/o 12-2-417/89, Saradanagar, Kulsumpura Post, Hyderabad ....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of Certiorari or any other appropriate writ, order or direction, calling for the records, pertaining to O.A.No. 354/2003 dated 10-9-2003 on the file of Hon'ble Central Administrative Tribunal, Hyderabad Bench, Hyderabad and quash the same as illegal, arbitrary, contrary to law and unconstitutional and declare the same as void ab initio, null and void and nonest in the eye of law. WRIT PETITION NO : 24324 of 2003 Between: 1. The Accountant General (A&E), Andhra Pradesh Saifabad, Hyderabad. 2. The Comptroller and Auditor General of India, Bahadur Shah Zafar Marg, New Delhi. ….PETITIONERS AND 1 Shri M.G. Krishna, S/o. M.S.Ramachary, R/o. 201, Krishna Residency H.No.7-1-414/45, Srinivasa Nagar (East.),S.R. Nagar, Hyderabad. 2 Shri K.Sri Ram, S/o. K.Narasimha Murthy, H.No.12-2-823, 13/43, Income Tax Colony, Mehdipatnam, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ of certiorari or any other appropriate writ, order or direction, calling for the records, pertaining to OA No.264 of 2003 Dated:19-6-2003 on the file of Hon'ble Central Administrative Tribunal, Hyderabad Bench, Hyderabad and quash the same as illegal, arbitrary, contrary to law and unconstitutional and declare the same as void ab initio, null and void and nonest in the eye of law. WRIT PETITION NO : 24325 of 2003 Between: 1. The Principal Accountant General, Andhra Pradesh, Saifabad, Hyderabad. 2. The Comptroller and Auditor General of India, Bahadur Shah Zafar Marg, New Delhi. ..... PETITIONERS AND Mohd. Alaf Khan, S/o. Mohd. Hazarat Khan, Senior Auditor, Office of the Principal Accountant General (Audit), Andhra Pradesh, Hyderabad, H.No. 9-4-62/86, Nizam Colony, Toli Chowki, Hyderabad - 08. .....RESPONDENTs Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of Certiorari or any other appropriate Writ, Order or direction, calling for the records, pertaining to O.A.No.711 of 2003, dated 23.07.2003 on the file of Hon'ble Central Administrative Tribunal, Hyderabad Bench, Hyderabad and quash the same as illegal, arbitrary, contrary to law and unconstitutional and declare the same as void ab initio, null and void and non est in the eye of law. Counsel for the Petitioners: MR.A.RAJASHEKAR REDDY (In all the writ petitions) Senior Central Government Standing Counsel Counsel for the Respondents: Mr.G.VIDYA SAGAR, Advocate (In all the writ petitions) for Mr.P.V.P.Mrutyunjaya Rao, Advocate The Court made the following : THE HON’BLE SRI JUSTICE BILAL NAZKI THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION Nos.22042, 24191, 24308, 24324 and 24325 of 2003 COMMON JUDGMENT: (per the Hon’ble Sri Justice V.V.S.Rao) Introduction These Writ Petitions are filed by the Principal Accountant General of Andhra Pradesh and the Comptroller and Auditor General of India, New Delhi, assailing the judgments and orders of the Central Administrative Tribunal, Hyderabad Bench in different Original Applications moved under Section 19 of the Administrative Tribunals Act, 1985. In all the judgments, the learned Tribunal followed its earlier judgment in O.A.No.401 of 1992, dt.2.12.1992 [P. Yellamanda v. Comptroller and Auditor General of India] (hereafter called, Yellamanda case), a Division Bench judgment of this Court in Union of India v. R.Malakondaiah (hereafter called, Malakondaiah case), which followed the Judgment of the Supreme Court in S.Banerjee v. Union of India (hereafter called, Banerjee case). These matters were initially placed before a Division Bench of this Court. It was submitted by the petitioners’ counsel before the said Bench that the decision of the Supreme Court in Banerjee case is not applicable and that the decision of this Court in Malakondaiah c a s e requires reconsideration. Therefore, it was felt that an authoritative pronouncement is required in the matter and accordingly, the Division Bench referred the matters to Full Bench. That is how the matters are placed before this Full Bench. This common judgment shall dispose of all these five Writ Petition. Background Facts To understand the controversy, it is necessary to refer to the fact of the matter in Writ Petition No.22042 of 2003. The sole respondent retired as Senior Audit Officer in the Office of the first petitioner on 31.12.2001 afternoon. He was paid death-cum- retirement gratuity (DCRG) on the basis of his last drawn pay of Rs.9,925/- plus D.A. at the rate of 45%. His increment was due on 1.1.2002. But, the same was not sanctioned and therefore, it was not reckoned for the purpose of calculating the pension, DCRG and other benefits. After accepting these benefits, the respondent made a representation on 11.3.2002 to the first petitioner – Principal Accountant General (Audit) requesting to sanction increment of Rs.275/- which fell due on 1.1.2002. By communication dt.2.4.2002, first petitioner rejected the claim of the respondent informing that the respondent is not eligible for increment with effect from 1.1.2002 as his pay was fixed under proviso to Note-I below of Rule 34 of Central Civil Services (Pension) Rules, 1972 (hereafter called, the Pension Rules). Assailing the communication dt.2.4.2002 of the first petitioner, the respondent filed O.A.No.797 of 2002 before the learned Tribunal. The respondent prayed to set aside the orders of first petitioner and for a consequential direction to revise pensionary benefits of the respondent by granting benefit of increment due on 1.1.2002 and the D.A. instalments sanctioned by the Government of India raising D.A. from 45% to 49%. The respondent mainly relied on the judgment of the Supreme Court in Banerjee case and earlier decision of learned Tribunal in Yellamanda case, the judgment of Division Bench of this Court in Malakondaiah case and the decision of the Principal Bench of the Central Administrative Tribunal, New Delhi in M/s.Kamala Gupta v. Commissioner, Kendriya Vidyalaya Sanghatan. The petitioners herein contested the claim of the respondent by filing reply statement. They urged that the decision of the learned Tribunal in Yellamanda case and the decision of the Division Bench of this Court in Malakondaiah case are judgments in personam and therefore they have no general applicability. They also contended that the respondent having retired on 31.12.2001 ceased to be in Government service with effect from that date, that the respondent was a pensioner with effect from 1.1.2002 and that he was not entitled for any emoluments with effect from 1.1.2002 by reason of which no increment need be paid to him. Commonality in all cases In all these matters, as in W.P.No.22042 of 2003, the respondent employees retired from the office of the Principal Accountant General on the last date of month. Their increment was due on the first day of the succeeding month after retirement. In all the matters, the respondents placed reliance on the earlier judgment of the learned Tribunal in Yellamanda case and Division Bench Judgment of this Court in Malakondaiah case. The following table gives date of retirement and date on which increment was due. Sl.No.Respondent/s in W.P.No. Retired on Incrementdue on 1. 22042 of 2003 31.12.2001 1.1.2002 2. 24191 of 2003 30.6.1994 1.7.1994 3. 24308 of 2003 -R.1 -R.2 31.5.199728.2.19901.6.19971.3.1990 4. 24324 of 2003 - R.1 - R.2 31.7.199531.7.19941.8.19951.8.1994 5. 24325 of 2003 30.6.1996 1.7.1996 The Impugned Order of the Tribunal The Central Administrative Tribunal considered the question whether a respondent employee is entitled to get increment that falls due on the next date of retirement when the respondent was in service till the last date of the preceding month. The learned Tribunal also considered the question whether the respondent is entitled to get D.A. installments at 49% of pay as claimed by the applicant. On first question, the learned Tribunal placed reliance on the Division Bench judgment of this Court in Malakondaiah case as well as the judgment of the learned Tribunal in Yellamanda case and held that the respondent by virtue of his service for a continuous period of one year had earned one increment and he has right for benefit of increment and that the respondent is entitled to get annual increment due to him that fell due on the first date of the month after retiring month. On the second question, the learned Tribunal relied on Rule 5(2) of the Pension Rules, the judgment of the Supreme Court in Banerjee case and recorded a finding that though the respondent retired on the last date of the month viz., 31.12.2001 as in W.P.No.22042 of 2003, his date of retirement has to be treated as 1.1.2002 by reason of which the respondent is entitled for enhanced D.A. at 49% of pay. Accordingly, the learned Tribunal allowed the Original Application filed by the respondent therein, and issued a direction to the petitioners to release annual increment due on 1.1.2002 and grant all consequential retiral benefits to the respondent along with D.A. as per the entitlement treating date of retirement as 1.1.2002. Submissions made on behalf of the petitioners Learned Senior Central Government Standing Counsel, Sri A.Rajasekhar Reddy, appearing for the petitioners, submits that ‘increment’ in a time-scale of pay is sanctioned to a Government servant on rendering qualifying a service of twelve months. Accepting the recommendations of Third Pay Commission, the Government of India simplified the procedure for sanctioning increment allowing the increment from the first month in which it falls due. As per Fundamental Rule (F.R.) 56 every Government servant shall retire from service on the last day of the month in which he attains the age of superannuation irrespective of the actual date of completing 60 years of age. Relying on Rule 5(2) of the Pension Rules, he contends that the day on which the Government servant retires shall be treated as his last working day. Thus, the Government servant, who is on the verge of retirement is allowed concessions in the matter of drawal of increment, and in the matter of date of increment. If a retired Government servant is allowed to draw another increment after retirement, it would be contrary to Pension Rules as well as Fundamental Rules. He would then urge that as per F.R.26, an increment can be drawn only when an employee is on duty and an employee who retires on the last working day of the month ceases to be Government employee and therefore no increment can be sanctioned to him. The Government servants were not on duty on first of the month succeeding the date of retirement and therefore sanction of increment is inadmissible. Lastly, he submits enhanced rate of D.A. came into effect on 1.1.2002 and the Government servant who retires prior to that date is not entitled for payment of enhanced rate of D.A. He would urge that the decision of the Supreme Court in Banerjee case has no application to the controversy in these cases. Submissions made on behalf of Respondents Learned counsel for respondents, Sri G.V.Vidya Sagar, submits that though a Government servant retires on the last working day of the month, such Government servant for the purpose of increment, pension, and gratuity and payment of revised rate of D.A. is deemed to be in service on the first of the succeeding month. Therefore, all the respondents are entitled for annual increment, which is due on the first of the succeeding the month in which the Government servant retired. He would place reliance on Rule 83 of the Pension Rules, besides placing strong reliance on the decision of the Supreme Court in Banerjee case and Division Bench judgment of this Court in Malakondaiah case. Learned counsel also placed reliance on a decision of the Full Bench of Central Administrative Tribunal, Mumbai Bench, in Venkatram Rajagopalan v. Union of India [in O.A.Nos.459 and 460 of 1997, dt.15.10.1999] in support of the contention that a Government servant who retires on last day of the preceding month is deemed to have effectively retired from service with effect from first day of succeeding month. Therefore, the learned counsel contends that all the respondents are entitled for increment, which falls due on next day after retirement. Points for consideration The two points that fall for consideration are, I. Whether a Government servant who retires on the last working day of the preceding month and whose annual increment falls due on the first of the succeeding month is entitled for sanction of annual increment for the purpose of pension and gratuity? II. Whether a retired Government servant is entitled for revised rate of D.A. which comes into force after such Government servant retires from service on attaining the age of superannuation? In Re Point No.(I) Whether a Government servant who retires on the last working day of the preceding month and whose annual increment falls due on the first of the succeeding month is entitled for sanction of annual increment for the purpose of pension and gratuity? Pension is invisible accumulated savings of a Government servant while in service. It is not paid as gratis or a bounty. A Government servant earns pension while discharging the functions as a Government servant. It is, however, not subject to whims and fancies of the Government nor arbitrary grant of monthly post retiral payment. Every Government servant who attains the age of superannuation - unless it is withheld as a measure of punishment; is entitled for pension after retirement at a rate prescribed by Rules and Regulations. Generally, the amount of pension is fixed taking into consideration the emoluments paid to a Government servant in the last year or part of last year of his service as such Government servant. The Government service is not a contract. It is a status recognised by Constitution of India and governed by the Rules made by the President under the proviso to Article 309 of the Constitution of India. These have force of law. Under these Service Rules, consideration for service rendered by a Government servant is the remuneration payable to him commonly known as ‘pay’ during the tenure of employment. Again, the Rules or administrative instructions govern the pay paid to a Government servant periodically; once in a calendar month. The pay of a Government servant may consists of substantial pay, special pay, additional pay, personal pay, and presumptive pay. The pay of a Government servant does not remain static and Government periodically gives an increase in pay after completion of one year of service, which in service parlance referred to as “increment”. The increments as we presently see are generally given annually in a routine manner to officers with good conduct unless such increments are withheld as a measure of punishment or linked with efficiency in which event after certain period of service the Government servant could not be given any increment on the ground of “efficiency bar”. The grant of increment depends on and is linked to the efficiency of a Government servant to be of utility in the continued service. Keeping in view some of the relevant service law principles mentioned herein above, a reference has to necessarily be made to the relevant Rules, which fall for consideration. First set of Rules is Fundamental Rules applicable to all Central Government Servants. Second set of Rules is Central Civil Services (Pension) Rules, and thirdly Civil Services Regulations. We propose to examine the issue with reference to Fundamental Rules and Pension Rules separately and view the controversy in juxta position of all these Rules. Fundamental Rules Fundamental Rules are core Rules governing all general conditions of service like pay, leave, deputation, retirement and dismissal, removal and suspension. All Central Government employees are governed by these Rules. If there are special Rules governing a particular “service” and in event conflict with Fundamental Rules, Special Rules would prevail, for generalia specialibus non derogant. F.R.9 contains definitions of the terms used in Fundamental Rules. F.R. 9(6), (21) and (31) define the terms ‘duty’, ‘pay’ and ‘time-scale of pay’, which read as under. 9(6). “Duty” – (a) Duty includes – i. service as a probationer or apprentice provided that such service is followed by confirmation; and ii. joining time. (b) A Government servant may be treated as on duty – i. during a course of instruction or training in India, or ii. in the case of a student, stipendiary or otherwise, who is entitled to be appointed to the service of Government on passing through a course of training at a University, College or School in India, during the interval between the satisfactory completion of the course and his assumption of duties. 9(21). “Pay” – (a) Pay means the amount drawn monthly by a Government servant as – i. the pay, other than special pay or pay granted in view of his personal qualifications, which has been sanctioned for a post held by him substantively or in an officiating capacity, or to which he is entitled by reason of his position in a cadre; and ii. overseas pay, special pay and personal pay; and iii. any other emoluments which may be specially classed as pay by the President. (b) Not printed. (c) Not printed. 9(31). “Time-scale of pay” – a. Time-scale of pay means pay which, subject to any condition prescribed in these rules, rises by periodical increments from a minimum to a maximum. It includes the class of pay hitherto known as progressive. b. Time-scales are to be identical if the minimum, the maximum, the period of increment and the rate of increment of the time-scales are identical. c. A post is said to be on the same time-scale as another post on a time-scale if the two time-scales are identical and the posts fall within a cadre, or a class in a cadre, such cadre or class having been created in order to fill all posts involving duties of approximately the same character or degree of responsibility, in a service or establishment or group of establishments, so that the pay of the holder of any particular post is determined by his position in the cadre or class and not by the fact that he holds that post. Chapter–III of the Fundamental Rules contains “General conditions of service”. Chapter–IV deals with “Pay” whereas Chapter–IX deals with “Retirement”. F.R.17. and F.R.56 insofar as they are relevant read as under: F.R.17. (1) Subject to any exceptions specifically made in these rules and to the provision of sub-rule (2), an officer shall begin to draw the pay and allowances attached to his tenure of a post with effect from the date when he assumes the duties of that post, and shall cease to draw them as soon as he ceases to discharge those duties: Provided that an officer who is absent from duty without any authority shall not be entitled to any pay and allowances during the period of such absence. (2) The date from which a person recruited overseas shall commence to draw pay on first appointment shall be determined by the general or special orders of the authority by whom he is appointed. F.R. 56. (a) Except as otherwise provided in this rule, every Government servant shall retire from service on the afternoon of the last day of the month in which he attains the age of sixty years: Provided that a Government servant whose date of birth is the first of a month shall retire from service on the afternoon of the last day of the preceding month on attaining the age of sixty years. Provided further that a Government servant who has attained the age of fifty-eight years on or before the first day of May, 1998 and is on extension in service, shall retire from the service on expiry of his extended period of service, or on the expiry of any further extension in service granted by the Central Government in public interest, provided that no such extension in service shall be granted beyond the age of 60 years. (b) A workman who is governed by these rules shall retire from service on the afternoon of the last day of the month in which he attains the age of sixty years. As per F.R.17, extracted hereinabove, a Government servant shall begin to draw the pay and allowances attached to his post with effect from the date when he assumes the duties of that post until he ceases to discharge those duties. “Pay” as defined in F.R.9(21)(a) means, the amount drawn monthly by a Government