Judgment:
Shrikant Tripathi, Member (J):
1. Heard Mr.Ramesh C.R. for the applicant and the counsel for the respondents and perused the record. The applicant, Major General Vijai Pal Yadav, claims the benefit of the restoration of his full pension with effect from 22nd November 1999, being the date on which the period of 15 years for restoration of the commuted portion of the pension came to an end. The respondents have however allowed him the benefit of restoration of the pension to the extent of 43% only.
2. It may be mentioned that the applicant took premature retirement for joining the Hindustan Paper Corporation Limited, a public sector undertaking, as Managing Director, thereof. The applicant was allowed to retire with effect from 31st July 1984. As per order No.A/49738/VDY/AG/DS4(c)/2393/A/D(Pers) dated 23rd August, 1994 [Annexure R5(b)] issued by the Government of India, Ministry of Defence, the applicant was to exercise an option within six months either to receive prorata monthly pension and DCRG as admissible under the then existing Government of India rules or receive the prorata gratuity and lumpsum amount in lieu of pension worked out with reference to commutation table as obtaining from the date the commuted value became payable, after following the procedure for commutation of pension. Accordingly the applicant opted for receiving lumpsum amount in lieu of pension payable to him and was accordingly paid the due amount. According to the aforesaid letter dated 23rd August, 1994 commuted pension was not liable to be restored, but keeping in view the decision of the Apex Court in Common Cause and Others v. Union of India, (1987) 1 SCC 142, the respondents took a policy decision to restore the pension of the aforesaid persons to the extent of 43% and accordingly allowed the applicant to draw 43% of commuted portion of pension with effect from 22.11.1999, vide PPO No.M/Corr/2100/ 99 (Annexure A2). The Government decision to this effect was communicated to all concerned vide the Government of India, Ministry of Defence Letter No.1(4)/07/D (Pension/Policy) dated 21st August, 2009, para 1 thereof being relevant, is reproduced as follows:
âThe undersigned is directed to forward herewith a copy each of the Government of India, Ministry of Personnel, Public Grievances and Pensions (Department of Pension and Pensioners Welfare) OM No.4/38/2008-Pand PW (D) dated 15th September 2008, and dated 27th May 2009 on the above subject matter and to state that these orders will apply mutatis mutandis to Armed Forces Personnel absorbees who had drawn lump sum payment on payment on absorption in Public Sector Undertaking/Autonomous Bodies and have become entitled to restoration of 1/3rd commuted portion of pension. The percentage of commuted pension is to be restored will, however, be 45% in the case of PBOR and 43% in the case of Commissioned officers instead of 1/3rd mentioned in the above mentioned Office Memorandums.â
3. Mr.Ramesh C.R., appearing for the applicant submitted that whatever amount of pension had been taken into account for computing the commuted value of pension payable to the applicant was required to be restored and there was no justification for restoration of only 43% of the commuted portion. Learned counsel for the respondents on the other hand submitted that as the Government took a policy decision to restore only 43% of the commuted portion of pension, the applicant could not be permitted to take any stand contrary to the letter dated 23rd August 1994 [Annexure R5(b)].
4. In order to appreciate the controversy involved in the present matter, we have to see as to what is the true import of the decision of the Apex Court in the matter of Common Cause case (supra). In that case, it was not disputed that in the matter of civilians, the total amount of pension which could be commuted was upto 1/3rd while in the case of defence personnel, the commutation was admissible upto 43% in the case of Officers and upto 45% in the case of Other Ranks. The Apex Court observed in para 4 that as the position now stands, when a pensioner commutes any part of his pension up to the authorised limit, his pension is reduced for the remaining part of his life, by deducting the commuted portion from the monthly pension. In the middle of para 5, the Apex Court further observed that the commuting pensioner gets a lumpsum sum which ordinarily he would have received in course of a spread over period subject to his continuing to live. Thus, these two advantages were certainly forthcoming out of commutation - firstly, availability of a lump sum amount, and secondly, the risk factor. On the basis of these observations the Apex Court held in para 9 as follows:
â9. In dealing with a matter of this nature, it is not appropriate to be guided by the example of Life Insurance; equally unjust it would be to adopt the interest basis. On the other hand, the conclusion should be evolved by relating it to the 'years of purchase' basis. An addition of two years to the period necessary for the recovery on the basis of years of purchase justifies the adoption of the 15 year rule. That is more or less the basis which appears to be equitable. It may be that this would give rise to an additional burden on the exchequer but it would not be heavy and after all it would bring some relief to those who have served the cause of the Nation at great sacrifice. We are, therefore, of the view that no separate period need be fixed for the Armed Forces Personnel and they should also be entitled to restoration of the commuted portion of the pension on the expiry of 15 years as is conceded in the case of civil pensioners. And for them too, the effective date should be from April 1, 1985.â.
5. The Apex Court has thus laid down the principle regarding the restoration of the commuted portion of pension. According to the said principle, whatever amount is taken into account for calculating the commuted value of pension, must be restored on completion of 15 years period from the date of commutation. The Supreme Court has nowhere permitted restoration of only a portion of the commuted pension. Whenever restoration of the commuted portion of pension is to be made, the whole of the amount taken into account for commutation has to be restored. We fail to understand as to how the respondents propounded the principle of restoration of only 43% of the commuted portion of pension. As observed by the Apex Court in Common Cause case (supra), the officers of the Armed Forces were entitled to commutation to the extent of 43% of pension. So, in such matters, the restoration of 43% of the pension could be made. But, where full pension was to be commuted, the restoration thereof must be made to the same extent without any reduction. As such, we do not find any justification in reducing the applicant's pension to the extent of 43% on restoration with effect from 22.11.1999.
6. Learned counsel for the respondents contended that the applicant was not entitled to the restoration of pension in view of the terms and conditions laid down by the letter dated 23rd August 1994 [Annexure R4(b)], so, he was not entitled to the restoration of the commuted portion of the pension.
7. In our view, if the respondents had acted according to the terms and conditions of the said letter, there would have been no problem. But, when the respondents themselves waived the terms and conditions of the said letter and decided to provide the benefit of restoration of commuted portion of pension to the applicant, they cannot take shelter of the aforesaid letter. More so, in the Common Cause case (supra), the Apex Court has already upheld the principle of restoration of the commuted portion of the pension on expiry of the period of 15 years to be computed from the date of commutation. Therefore, any stand of the respondents contrary to the decision of the Apex Court cannot be upheld.
8. For the reasons stated above, full pension of the applicant which was taken into account for calculating the commuted value of the pension was liable to be restored with effect from 22.11.1999, being the date of expiry of 15 years from the date of commutation. He is further entitled to all consequential benefits of revision of pension as per the decisions of the Government taken from time to time in pursuance of the recommendations of the various Central Pay Commissions.
9. The Original Application is therefore, allowed. The respondents are directed to restore the applicant's full pension with effect from 22.11.1999 with the consequential benefits of revision of pension as per the decisions of the Government taken from time to time in pursuance of the recommendations of various Central Pay Commission. The respondents are further directed to pay the entire arrears to the applicant within four months failing which the unpaid amount will carry a simple interest @ 8% per annum payable by the respondents to the applicant.
10. There will be no order as to costs.
11. Issue free copy of this order to both side.