Case: N.N. Godfred and Ors Vs. Union of India (UOI) and Ors

1.1 The three Appellants had enrolled in the Indian Navy as Sailors, and subsequently joined the Submarine Arm. After being promoted through the ranks, all three Appellants superannuated from service on January 31, 1983. While Appellant No. 1 was holding the rank of Chief Petty Officer (ERA-II), Appellant Nos. 2 and 3 were holding the rank of Chief Engine Room Artificer in the Submarine Arm of the Indian Navy at the time of their superannuation.1.2 Initially, the Appellants were not granted pensionary benefits on account of the non-inclusion of their four-year training period, while computing their qualifying service. Aggrieved by the same, the Appellants filed a Writ Petition before the Delhi High Court which was allowed in terms of the decision of this Court in Anuj Kumar Dey v. Union of India [(1997) 1 SCC 366]  .1.3 Pursuant to the said judgment, the Appellants started getting pensionary benefits. The pension of the Appellants was computed on the basis of the pay of a Chief Petty Officer.1.4 On February 8, 2005, Appellant No. 3 made a representation to the Bureau of Sailors-Respondent No. 3 for a clarification whether Submarine Pay of Rs. 300 per month, which was being granted to them after joining the Submarine Arm, was included for computing the pension payable. It was submitted that Submarine Pay was a component of their pay, and not an allowance.1.5 On March 29, 2005 Respondent No. 3 rejected the representation stating that Submariners and Aviation Sailors were categorized under the group Other than A, which is lower than Group A, and that the pensionary benefits granted were in order.1.6 The three Appellants being aggrieved by the refusal of the Respondents to take into account Submarine Pay while calculating pension payable to them filed separate Writ Petition Nos. 19145-47 of 2006 before the Delhi High Court.1.7 During the pendency of the Writ Petitions, the Armed Forces Tribunal Act, 2007 came into force. The Writ Petition Nos. 19145-47 of 2006 were transferred to the Principal Bench, Armed Forces Tribunal, New Delhi and renumbered as Transfer Application No. 492 of 2010.1.8 The Armed Forces Tribunal disposed of the Transfer Application No. 492 of 2010 by a cryptic Order dated February 25, 2010 wherein it was merely mentioned that submarine pay/allowance cannot be counted for the purpose of determining pension.2. Aggrieved by the impugned order, the Appellants preferred the present Civil Appeal.

Court's reasoning:
The reliance on these instructions by the counsel for the Respondents is misplaced, as the case of the Appellants was governed by the instruction issued pursuant to the Third Pay Commission for computing the pensionary benefits i.e. Navy Instruction No. 2/S/74 dated August 17, 1974 and Letter No. PA/4102/NHO/504. S/D(PAY/SERVICES) dated May 31, 1967 as they retired on January 1, 1983.5.8 As per Letter No. PA/4102/NHO/504. S/D(PAY/SERVICES) dated May 31, 1967 Submarine Pay was to be treated as pay for all purposes, which would include computation of Service Pension.5.9 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term basic pay to denote the pay actually drawn in the scale prescribed for the rank and group. The Last Pay Drawn Certificate of the Appellants shows that Submarine Pay was actually being drawn as a separate head of pay.Navy Instruction No. 2/S/74 did not exclude Submarine Pay from the computation of pay for the purpose of calculating Service Pension.5.10 In contrast, it would be instructive to refer to the entries with respect to Aviation Sailors. Note (ii) below Appendix B of Navy Instruction No. 2/S/74 specifically excluded Flying Pay from being treated as pay for the computation of pension and gratuity.5.11 Appendix B of Navy Instruction No. 2/S/74 specifically mentions both Submarine Pay and Submarine Allowance separately at S. Nos. 14 and 15, respectively. The terms Submarine Pay and Submarine Allowance are not used interchangeably, as has been erroneously done in the impugned Order.5.12 The submission of the Respondents that Submarine Pay was excluded from the ambit of basic pay as per Special Navy Instruction No. 1/S/86, Special Navy Instruction No. 1/S/9W and Special Navy Instruction No. 1/S/08 cannot be accepted, since these notifications came into force subsequent to the date of superannuation of the Appellants. These would therefore have no application to the cases of the present Appellants, which were governed by the Navy Instruction No. 2/S/74 dated August 17, 1974 issued pursuant to the recommendations of the Third Pay Commission.6. In view of the aforesaid facts and legal position, Submarine Pay was includible in pay, for the purposes of computing the Service Pension of the Appellants.5.5 The pay scale and allowances of Officers and Sailors were revised with effect from January 1, 1973 pursuant to the Navy Instruction No. 2/S/74 dated August 17, 1974.Navy Instruction dated August 17, 1974 was issued to give effect to the recommendations of the Third Pay Commission, and remained in force till January 1, 1986.5.6 Clause 4(a) of Navy Instruction No. 2/S/74 defined the term basic pay to denote the pay actually drawn in the scale prescribed for the rank and group. Clause 2 provided that the revised rates of pay applicable to Sailors were specified in Appendix A. As per Clause 3, Artificer/Mechanician Sailors of the Submarine Arm were entitled to rates of pay specified under column titled Group A in Appendix A.The heads of Submarine Pay and Submarine Allowance were separately listed in Appendix B at S. Nos. 14 and 15, respectively.s per Navy Instruction No. 2/S/74, a Chief Petty Officer was entitled to Submarine Pay at the rate of Rs. 300/- per month, which was distinct from Submarine5.7 Pursuant to the recommendations of the Fourth Pay Commission the rates of pay and allowances of Officers and Sailors were revised by Special Navy Instruction No. 1/S/86 (with effect from January 1, 1986). Further revisions took place pursuant to the recommendations of the Fifth and Sixth Pay Commissions. The definition of basic pay was changed to exclude Submarine Pay.Section I of Chapter III of the Navy (Pension) Regulations, 1964 provides the framework for grant of pensionary benefits to Sailors in the Indian Navy. Sailors who have served for a period of fifteen years i.e. the minimum qualifying service for pension, or more, are eligible for grant of Service Pension.