Case: Accountant General, Orissa  Vs. R. Rama Murthy

2. Challenge in these appeals is to a judgment rendered by a Division Bench of the Andhra Pradesh High Court in Writ Petition No.8532 of 2003. The said writ petition had been filed by the appellants questioning correctness of the decision rendered by the Central Administrative Tribunal, Hyderabad Bench (in short the CAT) in O.A.No. 1345 of 2001. The basic issue which arose for consideration in the writ petition was "what is the mode of calculating of restoration of pension in respect of employees covered by Rule 37A of CCS (Pension) Rules, 1972 (in short the Rules). According to the appellants, a conjoint reading of Rules 37 and 37A as operated upto 31.3.1995 has not been kept in view. The High Court modified the order of the CAT and held that in a case where an employee had commuted minimum permissible pension i.e. 1/3 and even where lesser portion is commuted, the pro rata commuted portion has to be deducted from the basic pension to arrive at restorable pension, but however, he will get dearness relief, interim relief etc. on full basic pension.3. The High Court arrived at the aforesaid conclusion after considering Rules 37 and 37A.

Court's reasoning:
6. The respective stand have to be considered in the light of this Courts decision in P.V. Sundara Rajan v. Union of India (2000 (4) SCC 469 ). In para 11 it has been noted asdearness relief on pension has been granted to pensioners to compensate them for the erosion in the value of money due to rise in the cost of living. It seems clear that the Government has permitted to the applicants dearness relief calculated only on one-third part of the pension restored while in case of other pensioners, the dearness relief is calculated on full pension including the commuted part of pension. As already noticed, the applicants are to be treated on the same footing as other Central Government employees insofar as the question of restoration of one-third of commuted pension is concerned and are entitled to the benefits as given in Common Cause case (1987 (1) SCC 142 ). In this respect, it would also be useful to notice that "pension" as defined in Central Civil Services (Pension) Rules, 1972 does not include dearness relief. Rule 3(1)(o) reads as under:"3(1)(o) pension includes gratuity except when the term pension is used in contradistinction to gratuity, but does not include dearnessin Paragraphs 12 and 13 it has been observed as follows:12. We may also reproduce RuleDearness relief on pension/ family pension.- (i) Relief against price rise may be granted to the pensioners and family pensioners in the form of dearness relief at such rates and subject to such conditions as the Central Government may specify from time to time.(ii) If a pensioner is re-employed under the Central or State Government or a corporation/company/body/bank under them in India or abroad including permanent absorption in such corporation/company/body/bank, he shall not be eligible to draw dearness relief on pension/family pension during the period of such re-employment.(iii)The government instructions also show that the dearness relief is granted to compensate the pensioners for erosion in the value of money due to rise in the cost of living. Anything which is not a part of pension has to be paid in full insofar as those who have commuted one-third