Case: Ex-Hav Ashok Kumar Vs. Union of India &amp; Ors

2. The appellant was a Havildar in the Indian Army. He completed his original tenure of twenty four years of service on 27 December 2010. He was granted an extension of service for two years until 26 December 2012. This extension was granted to the appellant in accordance with the procedure set out in a policy letter of the Army Headquarters dated 21 September 1998 which is titled:PROCEDURE AND CRITERIA FOR SCREENING OF PERSONNEL BELOW OFFICER RANK (PBOR)3. During the course of his extended tenure, the appellant suffered a stroke and was re-categorised into the category described as SHAPE-3 (Permanent) with an 80% disability. The Release Medical Board found that the disability was not attributable to or aggravated by military service. The appellant was discharged from service.4. Seeking the grant of disability pension, the appellant moved (O A No 321 of 2013) the Armed Forces Tribunal at its Principal Bench. On 2 July 2014, the AFT allowed the O A by holding that the appellant was entitled to disability pension. However, the claim of rounding off of the disability pension was kept open on the hypothesis that the issue was pending decision before this Court5. The appellant filed a Review Application before the AFT which was allowed on 30 October 2014. The AFT held that as a matter of fact, it was mistaken in its finding that the issue of rounding off was pending before this Court. Hence, the AFT held that the appellant was entitled to the benefit of rounding off from 80% to 100%.6. The appellant moved the AFT in 2016 seeking the payment of ex-gratia compensation of Rs 9,00,000 based on a policy circular dated 26 December 2011. The AFT rejected the claim on the following(i) Such a claim should have been made before the AFT in the earlier round of proceedings and not having been addressed either in the OA or in the review, such a relief was barred by Order II Rule 2 of the Code of Civil Procedure, 1908;(ii) The claim was barred by limitation since the appellant was discharged from service in 2012 and it was only in 2016 that the AFT was moved for such relief; and(iii) On merits, the essential requirement for claiming ex-gratia compensation was that the applicant should have been invalidated from service on the ground of disability. In the present case, the appellant, upon completing twenty four years of service, was granted an extension of two years and it was during the extended period that he was discharged upon being downgraded to a low medical category.7. The AFT relied on the note appended to Rule 2 of the Pension Regulations for the Army and came to the conclusion that for the purpose of disability pension, a person who is discharged from service during the extended tenure is deemed to have been invalidated for the purpose only of the Entitlement Rules laid down in Appendix 2 to the Regulations. Aggrieved by the decision of the AFT, this appeal has been filed.

Court's reasoning:
10. Though the AFT has rejected the claim of the appellant on the ground that the claim for ex-gratia compensation was not made in the earlier round and is therefore, barred by both Order II Rule 2 of the CPC and by limitation, we propose to decide the issues in this appeal on merits. Hence, we have not gone into these technicalities. We addressed ourselves to the merits of the claim since in all fairness that is the basis on which the claim has been opposed by the learned Additional Solicitor General12. Regulation 173 provides for the grant of disability pension to a person who is invalidated out of service on account of a disability which is attributable to or aggravated by military service in a non-battle casualty where the disability is assessed at 20 per cent or more. Regulation 173-A extends the provision for disability pension by a deeming fiction under which a person who is placed in a low medical category while on extended service and is consequently discharged will also stand covered by the grant of disability pension. A person, who is placed in a low medical category and is discharged, is also deemed to have been invalidated out of service for the purpose of the entitlement rules laid down in Appendix 2 to the Regulations. The deeming fiction is confined to the grant of a benefit to the extent specified in Regulation 173-A14. In order to be entitled to the grant of ex-gratia compensation, it is necessary that the applicant must fulfill the following(i) The applicant should have been disabled or incapacitated in the performance bona fide official duties; and(ii) The applicant should have been boarded out of service on account of disability/war injury attributable to or aggravated by military serviceIf the intent of the Policy was to grant an ex-gratia compensation to every person who is granted a disability pension, it would have provided so16. This indicates that a person who is placed in a permanent low medical category, except a battle casualty or a person wounded in action, and consequently placed in a permanent low medical category during the extended service will be discharged under the existing rules. Such a person who is discharged undoubtedly would be entitled to the benefit of the disability pension by virtue of the deeming fiction in Regulation 173-A of the Pension Regulations. However, it does not ipso facto entitle the individual to the grant of ex-gratia compensation. The case for ex-gratia compensation has to fall within the purview of the governing conditions which are contained in the policy circular dated 26 December 2011.17. The appellant evidently did not meet that requirement of the policy circular since he was not boarded out of service on account of disability/war injury attributable to or aggravated by military service. He was entitled to disability pension in view of the provisions contained in Regulation 173-A. Significantly, under Regulation 173-A, he is deemed to have been invalidated from service for the purpose of the entitlement rules laid down in Appendix 2 to the Regulations. The fiction under Regulation 173-A cannot be extended to the policy document dated 26 December 2011.18. Consequently, we are of the view, for the reasons we have indicated, that the claim for ex-gratia compensation could not have been entertained15. On 21 September 1998, the Army Headquarters provided the procedure and criteria for screening of personnel below the officer rank for extension in service. All PBORare to be screened for extension of two years by the Screening Board.