THE HON'BLE SRI JUSTICE GHULAM MOHAMMED and THE HON'BLE SRI JUSTICE G.BHAVANI PRASAD W.P.No.5489 of 2006 ORDER: (Per Sri Justice Ghulam Mohammed, J) This writ petition is filed assailing the order, dated 29.07.2005, passed in O.A.No.244 of 2004 by the Central Administrative Tribunal, Hyderabad (for short ‘the Tribunal’). 2. The respondents, who retired from service of the Indian Audit and Accounts Department on various dates prior to 01.01.1986, were collectively named as ‘Pre-1986’ pensioners and their pension was initially determined in the scales of pay of III Central Pay Commission (CPC), which was prevalent at the time of their retirement. Subsequently, their pension was revised and updated with effect from 01.01.1986 on the basis of the recommendations of IV CPC. They state that as per the instructions of the Government of India in para 2 of the Office Memorandum, dated 10.02.1998, the pension of all pre-1986 pensioners has to be updated by notional fixation of their pay as on 01.01.1986 by adopting the same formula as applicable to the serving employees and thereafter, for the purpose of consolidation of their pension as on 01.01.1986, they may be treated alike those who retired on or after 01.01.1986. The pay of all those Government servants, who retired prior to 01.01.1986 and received pension as on 01.01.1986, will be fixed on notional basis in the revised scales of pay (of the post held by the pensioner at the time of retirement of the Government employee) introduced subsequent to their retirement as a result of the recommendations of IV CPC and guidelines were also issued in Annexure II of the said Office Memorandum, according to which their pension has to be consolidated. They state that Rule 8 of the Central Civil Services (Revised Pay) Rules, 1986 (for short ‘the Rules’) provides grant of the benefit of stagnation increment. They further state that the Office Memorandum, dated 10.02.1998, was later rescinded by the Government of India and issued Office Memorandum, dated 19.12.2000, clarifying as under: “Insofar as employees, who retired prior to 01.01.1986, their pension is required to be updated by fixing their pay as on 01.01.1986 by adopting the same formula as for serving employees and as per the CCS (RP) Rules. Stagnation increment if any earned by pre-86 retirees should be taken into account for the purpose of notional fixation. Such of those pre-86 retirees, who retired after having drawn pay of the maximum of the scale of pay as per III CPC for a year or more will be entitled to draw an additional increment as per the IV CPC scales as on 01.01.1986 (Proviso 3 of the rule 8 ibid). Similarly for those who have received an ad hoc increment on their stagnation at the maximum for two years or more at the time of their retirement will also be entitled for an additional increment as on 01.01.1986 (Provision 4). This in effect will mean that pre-86 retirees will be treated as if they were in service on 01.01.1986 for the purpose of notional fixation of pay so as to ensure complete parity”. They further state that they are entitled to the benefit of two increments under provisos 3 and 4 of Rule 8 of the Rules and that in the Office of the Accountant General, Chennai, under similar circumstances, the pre-1986 pensioners were granted the benefit of said two increments. They made representations to petitioners 1 and 2, but in vain. Hence, they filed O.A.Nos.244, 285 and 337 of 2004 before the Tribunal. The Vice-Chairman and Member (A) of the Tribunal referred the matter to the Chairman of the Tribunal for appropriate orders, under Section 26 of the Administrative Tribunals Act, 1985, as there was difference of opinion on the point as to whether the respondents are entitled to count ‘one more increment’ under 4th proviso to Rule 8 of the Rules in addition to the increment given to them under 3rd proviso to the said Rules for the purpose of notional fixation of their pay in the revised scale as on 01.01.1986. On reference, again the matter was heard and the Tribunal vide common order, dated 29.07.2005, allowed the O.A. directing the petitioners to revise and update the pension/family pension of the respondents within a period of three months from the date of receipt of a copy of the order and the respondents shall be entitled to the arrears of pension only from 01.01.1996 but not prior to 01.01.1996. Aggrieved by the same, the petitioners filed the present writ petition. 3. Heard the learned Standing Counsel for the Central Government appearing on behalf of the petitioners and the learned counsel for the respondents. 4. Learned Standing Counsel for the petitioners - Central Government vehemently contended that the 4th proviso to Rule 8 of the Rules has no application to the respondents as it has got application only for the employees, who are in receipt of stagnation increment for two years or more as on 01.01.1986. He further contended that the concept of stagnation increment was introduced with effect from 01.07.1983 and that as the respondents have retried prior to 01.07.1983, they are not entitled to the benefit of stagnation increment and that the Tribunal had exceeded its jurisdiction in allowing the O.A. in favour of the respondents. He further contended that as per the instructions issued by the Comptroller and Auditor General of India on 24.09.2003, the benefit of stagnation increment for the purpose of notional fixation in the case of pre-1986 retirees has to be allowed only in those cases where such increments had already been earned and consequently no such benefit can be allowed to pre 01.07.1983 retirees as they could, in no case, have earned such stagnation increments and therefore, since the respondents have retired before 1983, they are not entitled to the benefit of the scheme of stagnation increment, which concept was introduced with effect from 01.07.1983. He further contended that the respondents have not challenged the Official Memo, dated 19.02.2000. He also contended that the Tribunal ought to have dismissed the O.A. on the ground of delay on the part of the respondents in making representation on 20.09.2003 i.e., after 20 years from 01.07.1983. He has drawn the attention of this Court to the judgment of the Apex Court in CITY AND INDUSTRIAL DEVELOPMENT CORPORATION v. DOSU AARDESHIR BHIWANDIWALA[1], wherein it was held as under: “We are constrained to confess that the case has left us perplexed. The stance adopted by the State of Maharashtra and the District Collector is stranger than fiction. It is difficult to discern as to why they remained silent spectators without effectively participating in the proceedings before the Court. No explanation is forthcoming as to why they have chosen not to file their replies to the writ petition in the High Court. However, in these appeals the State Government as well as the appellant have filed detailed affidavits disputing each and every statement and assertion of the writ petitioner made in the writ petition opposing grant of any relief whatsoever to the writ petitioner. But even in this Court, the State of Maharashtra having filed its affidavit did not participate in the proceedings and render an assistance in the matter. It will not be appropriate to dispose of the matter without one word about the conduct of the State Government reflecting a highly unsatisfactory state of affairs. We express our grave concern as to the manner in which the State has conducted in this case. It is the constitutional obligation and duty of the State to place true and relevant facts by filing proper affidavits enabling the Court to discharge its constitutional duties. The State and other authorities are bound to produce the complete records relating to the case once Rule is issued by the Court. It is needless to remind the Governments that they do not enjoy the same amount of discretion as that of a private party even in the matter of conduct of litigation. The Governments do not enjoy any unlimited discretion in this regard. No one needs to remind the State that they represent the collective will of the society. The State in the present case instead of filing its affidavit through higher officers of the Government utilized the lower ones to make oral statements and that too through its AGP in the High Court. This malady requires immediate remedy. We hope that the Government shall conduct itself in a responsible manner and assist the High Court by placing the true and relevant facts by filing a proper affidavit and documents that may be available with it. We also hope and trust that the legal advisors of the Government will display greater competence and attention in drafting affidavits. 5. On the other hand, the learned counsel for the respondents contended that as per the instructions contained in paragraph 2 of Office Memorandum, dated 10.02.1998, the pension of all pre-1986 pensioners has to be updated by notional fixation of their pay as on 01.01.1986 by adopting the same formula as applicable to the serving employees and thereafter for the purpose of consolidation of their pension as on 01.01.1986, they may be treated alike those retired on or after 01.01.1986. He further contended that though the respondents were extended the benefit of the 3rd proviso to Rule 8 of the Rules, they cannot be denied the benefit of the 4th proviso to the said Rule and that at the fag end of their service, the respondents are stagnated for more than two years at the maximum scale of pay, and therefore, they are entitled to the benefit of the second increment under 4th proviso to Rule 8 of the Rules and that the Tribunal has rightly passed the order impugned, which need not be interfered with by this Court. 6. There is no dispute that the respondents retired from service prior to 01.07.1983, from which date, the scheme of stagnation increment came into force. As per Office Memorandum, dated 10.02.1998, pre-1986 retirees are to be treated like those who retired on or after 01.01.1986 and therefore, they are deemed to be in service for the purpose of notional fixation of pay and consolidation of their pension/family pension as on 01.01.1986 in the revised scale and as such, they have given the benefit of next increment under 3rd proviso to Rule 8 of the Rules, but denied the benefit of stagnation increment under 4th proviso to Rule 8 of the Rules. Rule 8 of the Rules is extracted as under: “8. Date of next increment in the revised scale “The next increment of a Government servant whose pay has been fixed in the revised scale in accordance with sub-rule (1) of Rule 7 shall be granted on the date he would have drawn his increment, had he continued in the existing scale: Provided that in cases where the pay of a Government servant is stepped up in terms of Note 3 or Note 4 or Note 7 to sub-rule (1) of Rule 7, the next increment shall be granted on the completion of qualifying service of twelve months from the date of the stepping up of the pay in the revised scale: Provided further that in cases other than those covered by the preceding proviso, the next increment of a Government servant, whose pay is fixed on the 1st day of January, 1986, at the same stage as the one fixed for another Government servant junior to him in the same cadre and drawing pay at a lower stage than his in the existing scale, shall be granted on the same date as admissible to his junior, if the date of increment of the junior happens to be earlier: Provided also that in the case of persons who had been drawing maximum of the existing scale for a year or more as on the 1st day of January, 1986, next increment in the revised scale shall be allowed on the 1st day of January, 1986: Provided also that in the case of Government servants who were in receipt of an ad hoc increment on their stagnating for two years or more at the maximum of the existing scale of pay as on the 1st day of January, 1986, one more increment in the revised scale shall be allowed to them on the 1st day of January, 1986, in addition to the increment already allowed under the preceding proviso”. 7. Insofar as the entitlement of one more increment under 4th proviso to Rule 8 of the Rules is concerned, the Tribunal has observed that on the basis of statutory fiction alone, the respondents have been given the benefit of next increment under 3rd proviso to Rule 8 of the Rules by treating that they are in service for the purpose of notional fixation of pay in the revised pay scale as on 01.01.1986. The Official Memorandum dated 10.02.1998 does not show any difference between the employees, those who retired prior to 01.07.1983 and after 01.07.1983. The Tribunal also observed that the petitioners admitted in their counter reply that the respondents had stagnated for more than 6 years at the maximum time scale of pay of III CPC and that the 4th proviso to Rule 8 of the Rules requires stagnation for a period of 2 years or more at the maximum scale of pay as on 01.01.1986 and therefore, the respondents are entitled to stagnation increment under 4th proviso to Rule 8 of the Rules and accordingly, directed the petitioners to revise and update the pension/family pension of the respondents within a period of three months from the date of receipt of a copy of that order and the respondents shall be entitled to the arrears of pension only from 01.01.1996 but not prior to 01.01.1996. 8. In view of the above, it is clear that the Tribunal has looked into the matter elaborately, considered various judgments of the Apex Court with regard to the legal fiction, and passed the impugned order, which does not suffer from any apparent error warranting interference by this Court. 9. Accordingly, the Writ Petition is dismissed. No order as to costs. ____________________ GHULAM MOHAMMED ____________________ G.BHAVANI PRASAD, J Date:30.03.2010 sj [1] (2009) 1 SCC 168