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Petitioner: FEDERATION OF PAKISTAN through Secretary VS Respondent: SULTAN AHMAD SHAMS and JUDGMENT
Court Name: Supreme Court of Pakistan Judge(s): Iftikhar Muhammad Chaudhry, Gulzar Ahmed, Sh. Azmat Saeed Title:FEDERATION OF PAKISTAN through Secretary vs SULTAN AHMAD SHAMS and
JUDGMENT
Reported As: 2014 SCMR 570 Result: Appeal allowed Judgment JUDGMENT ' GULZAR AHMED, J.---By these appeals, Federation of Pakistan has challenged common Judgment dated 22-2-2012 of the learned Federal Service Tribunal (FST), whereby appeals of the respondents were allowed. The respondents' claim for payment of pension by addition of Special Additional Allowance dated 23-7-1999, Special Relief Allowance dated 30-6-2003, Ad hoc Relief dated 1-7- 2004, Dearness Allowance dated 24-6-2006 and Additional Ad hoc Relief dated 21-7-2009 was allowed and the appellant was directed to recalculate the pension of the respondents by including these allowances. Leave to appeal was granted on 26-6-2012, inter alia, to consider as to whether Special Additional Allowance, Special Relief Allowance, Ad hoc Relief Allowance and Dearness Allowance etc. Are liable to be included in the pensionable emoluments and are reckonable towards calculation of pension under the law. 2. Mr. Dil Muhammad Alizai, learned DAG on behalf of the appellant has contended that the respondents are being paid pension on the basis of "emoluments" as laid down in CSR 486 and that the allowances which are claimed by the respondents for inclusion in their pension are not legally permissible and the Finance Division, Government of Pakistan Office Memorandum dated 4- 7-2011 also does not provide for making of such addition. The learned DAG has placed reliance on the case of Maqsud Ahmad v. The Accountant General, Pakistan Revenue, Islamabad and 2 others (1999 PLC (C.S.) 5. 3. On the other hand, Mr. Muhammad Munir Piracha, learned Senior Advocate Supreme Court appearing for respondents in Civil Appeals Nos.581, 582, 584, 589, 591, 594 and 598 of 2012, supported the impugned judgment and has contended that all the allowances which are claimed
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by the respondents for inclusion in their pension were merged into the salary vide Office Memorandum dated 4-7-2011 and benefit of which has rightly been extended to the respondents by the FST. Mr. Muhammad Ibrahim Satti, learned Senior Advocate Supreme Court for the respondents in Civil Appeals Nos.586 and 588 of 2012 has also supported the impugned judgment and has contended that the benefit of these allowances is liable to be extended to the respondents and that the Office Memorandum dated 4-7-2011 has to be read with retrospective effect. He has referred to CSR 486 and has contended that the word "include" in it will also include these allowances towards emoluments for calculation of pension of the respondents. In support of his submission, the learned counsel has relied upon the case of I.A. Sherwani and others v. Government of Pakistan through Secretary, Finance Division, Islamabad and others (1991 SCMR 1041). 4. The appellant Saeed Ahmed Zaidi in Civil Appeal No,583 of 2012 has appeared in person and supported the impugned judgment of the FST. One Muhammad Iqbal has also appeared and filed C.M.A. No,4451 of 2012 as an Intervener. He has not in.His application claimed any relief for himself rather has filed photocopies of certain documents relating to application of one Arif Khan, who retired as Deputy Director (Audit) and the calculation of his pension by inclusion of 5-Ad hoc allowances and subsequent preparation of PPO's etc. However, it may be noted that the learned DAG has submitted a letter dated 12-2-2013 of the Deputy Secretary (Legal) Finance Division (Regulation Wing), Islamabad, in which it is noted that Mr. Arif Khan has submitted an application to the Finance Division on 26-3-2012, which was examined in detail and applicant was informed on 22-6-2012 that the Finance Division expresses its inability to accede to his request. Copy of such letter dated 22-6-2012 has also been attached. 5. We have considered the submissions of the learned counsel and have gone through the record. 6. Admittedly, the respondents were employed in various departments of the Government of Pakistan and they all stood retired between the year 2003 to 2011. They have all claimed payment of pension by addition of Special Additional Allowance dated 23-7-1999, Special Relief Allowance dated 30-6-2003, Ad hoc Relief dated 1-7-2004, Dearness Allowance dated 24-6-2006 and Additional Ad hoc Relief dated 21-7-2009. The grievance has arisen on account of issuance of Office Memorandum (OM) dated 4-7-2011 by the Finance Division, Government of Pakistan, by which the President has sanctioned the revision of Basic Pay Scales, Allowances and Pension w,e,f, 1-7-2011 of the Civil Servants of Federal Government paid out of Civil estimates and out of Defence estimates, Part-I of which provides revision of Basic Pay Scale known as Basic Pay Scales 2011 replacing Pay Scales 2008 w,e,f, 1-7-2011. Part-II relates to allowances and it provides that Special Additional Allowance 1999, Special Relief Allowance 2003, Ad hoc Relief 2004, Dearness Allowance 2006 and Ad hoc Relief Allowance 2009 shall stand discontinued w,e,f, 1-7-2011 having been merged in Basic Pay Scale 2008 so as to introduce Basic Pay Scales 2011. Ad hoc Allowance 2010 was frozen at the level of its admissibility as on 30-6-2011. Similar was the case in respect of Ad hoc Relief Allowance 2011. It was specifically provided in clause (v) of Para 7 of this OM that the Ad hoc Relief Allowance will not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of House Rent. The learned FST has relied on the case where Personal Allowance/Secretariat Allowance was allowed to all the pensioners drawing the same at the time of their retirement and to the case of grant of Ad hoc Relief of Rs,300 and Rs,100 merged in the pay of serving employees but denied to the officials retiring earlier and has referred to its order dated 30-4-2005 in Appeals Nos.209 and 293 (L)CS/2004 extending the benefit of merger to all the employees who had retired earlier and that the Finance Division has implemented the order of the Tribunal vide its letter dated 16-3-2006. The Tribunal has also referred to a case of 7% Cost of Living Allowance included in the pay of serving employees w,e,f, 1-12-2001 and it was to be reckoned towards pension of employees retiring on or after the said date. The Tribunal in its Judgment dated
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2-12-2010, passed in Appeal No,486 (L)CS/2006 allowed this benefit in the pension to all the pensioners and a bench of this Court also upheld the Judgment of the Tribunal. The Tribunal has also relied upon the case of I.A. Sherwani, supra. 7. As noted above, the Tribunal through the impugned judgment has allowed the claim of the respondents and directed that their pension be recalculated by addition of allowances referred to above. The learned DAG has referred to the case of Maqsud Ahmad, supra, the Judgment of this Court. The facts of the matter were that the appellant had retired from service on 25-7-1990 as Audit Officer and his pension was calculated in accordance with the rules prevalent at the time of his retirement. Pursuant to the Judgment of this Court in the case of I.A. Sherwani the Finance Division issued a Memorandum dated 3-10-1991 providing formula for calculating the pension. Para 4 of the Memorandum provided that "pension shall be calculated for all pensioners from time to time increased with the latest rules". On the basis of this para, the appellant agitated before the department that his basic pension calculated on 25-7-1990 on the day of his retirement should be recalculated on the basis of the salary and other fringe benefits which a civil servant equally placed in the same position and holding same office would be getting after the issuance of the above memorandum. The department rejected the claim of the appellant and appeal before the Service Tribunal failed. On approaching this Court, the learned Bench by relying on the case of I.A. Sherwani (supra) came to the conclusion that it gives a complete answer to the appellants claim and the appeal was found to have no merit and was dismissed. In the case of I.A. Sherwani (supra), the facts of the matter were that the petitioner had joined civil service in 1940 and had retired from the rank of a Joint Secretary, Grade-20 w,e,f, 15-11-1996, whereas the other petitioner had joined civil service in 1958 but from 1966 till July 1974 he performed duties in the Judicial Branch of the Civil Service of Pakistan and was elevated as Additional Judge of the then Sindh and Balochistan High Court on 7-10-1974 where he worked upto 31-12-1976 whereupon the Sindh and Balochistan High Court was bifurcated from then he performed duties as Additional Judge of Balochistan High Court from 1-12-1976 to 6-10-1977 and thereafter its permanent Judge from 7-10-1977 till 7-4-1981 when he retired w,e,f, 25-3-1981 under the Provisional Constitution Order, 1981. The third petitioner was an Association of GHQ retired civil officers and the fourth petitioner was a registered Association for welfare of retired persons. The grievance of the petitioners was that the retired civil servants and the retired judges as pensioners are being discriminated in payment of enhanced pension in violation of Article 25 of the Constitution inasmuch as certain increase in the pension have been denied to them on the ground that they had retired prior to a specified date. The respondent- Government of Pakistan denied the allegation of discrimination and stated that pensioners are paid pension according to the rules applicable to them. The Court, after considering the case threadbare and while relying on plethora of case-law in para 28 of its Judgment, observed as follows:-- "28. The question which requires consideration is, as to whether in the instant cases classification is founded on an intelligible differentia which distinguishes one group of pensioners from others and whether the above differentia has rational nexus to the object or raison d'etre sought to be achieved. According to Mr. Sanidani, civil servants who have already retired and who will retire in future should be treated as a class and that there cannot be any sub-classification within the above class on the basis of date of retirement, as it would not fall within permissible reasonable classification. On the other hand, Mr. Aziz A. Munshi, learned Attorney-General, has urged that various groups of pensioners are to be classified on the basis of applicability of relevant pension rules. We are unable to subscribe to Mr. Samdani's above submission that civil servants who have already retired and who will retire in future, are to be treated as one class nor we are inclined to agree with the above submission of the learned Attorney-General. In our view, reasonable classification will be that all the pensioners as a group are to be treated as one class and all
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serving civil -servants as group are to be treated as a separate class. In this view of the matter, if the pay scales of serving civil servants are revised, the civil servants, who have by then already retired cannot have any legitimate grievance to agitate for notional revision of their pay scales for re-computing their pension amounts for any purpose as the pension amount is to be computed as above C.S.R.4 on the basis of the pension rules in force on the date of retirement of a civil servant. The pension rules contain formula as to the method of computation of pension amount with reference to the salary drawn by him till the date of retirement and, therefore, there cannot be uniformity in the amounts of pension among the civil servants despite of having equal rank and equal length of service, if they retire not on one date but on different dates and in-between such dates pay scales are revised. However, a pensioner may have a legitimate grievance if he is not treated alike with the other pensioners for example, if the Legislature/Government increases pension amount by 10%, say on 1-1-1991, but provides. That this benefit will be available to those pensioners who have retired on or after 1-1-1989. In other words, the pensioners who had retired prior to 1-1-1989 are deprived of the above benefit. This would be violative of Article 25 of the Constitution unless the Government can demonstrate that the above sub-classification within the class of pensioners is based on an intelligible differentia and that the latter has rational nexus to the object sought to be achieved by the relevant classification under the statute or statutory rule." ' In the case of Secretary to the Government of Pakistan, Ministry of Finance and others v. Muhammad Hussain Shah and others (2005 SCMR 675) the facts of the matter were that respondents served in Federal Secretariat in various capacities and retired prior to September 1993. During their service secretariat allowance which was being received by the respondents was converted into personal allowance vide OM dated 18-12-1989 and at the time of their retirement they were receiving said allowance and therefore, they claimed that the said allowance to be counted towards their pension. The FST allowed the claim of the respondents. This Court maintained the Judgment of the FST on the ground that the amended CSR 38 (c)(i) whereby personal allowance was deleted as reckonable emolument for calculation of pension came much later than the retirement of the respondents, therefore, the respondents could not be deprived of the said benefit which already stood, accrued to them. In the case of S.A.M. Wahidi v. Federation of Pakistan through Secretary Finance and another (1999 SCMR 1904), the facts of the matter were that the appellant retired as Solicitor to the Government of Pakistan, Ministry of Law and Justice w,e,f, 13-12-1987. He was allowed retiring benefits and pension then admissible. The Ministry of Finance (Regulation Wing) by Office Memorandum dated 19-8-1991 while replacing Basic Pay Scales of the Civil Servants from BPS-16 to BPS-22 allowed Special Pay of Rs,100 to senior officers for Advance Course in Management in NIPA. The appellant claimed this benefit by contending that since the above allowance is computable towards pension of civil servant who retired after enforcement of the above circular w,e,f, 1-6-1991, the appellant was also entitled to increase in pension by recomputing including the above allowance. The claim of the appellant was rejected by the department so also by the FST. This Court after relying upon the case of I.A. Sherwani came to the conclusion that since Rs,100 qualification allowance was computed as part of the salary and not as part of the pension and since the appellant had retired on 13-2-1987 i,e, about four years prior to the issuance of the above OM, he cannot mask for recalculation of the pension by including the above Rs,100 qualification pay. In the case of Khursheed Latif and others v. Federation of Pakistan and others (2010 SCMR 1081), the facts of the matter were that the petitioners after having remained unsuccessful in departmental forums for calculation of Cost of Living Allowance @ 7% of Basic Pay and Ad hoc Relief of Rs,100 towards pensionary benefits filed Constitution Petition in the High Court of Sindh praying to calculate the said two allowances as part of their pay which they were in receipt on the day of their retirement as pensionary benefits. The petition in the High Court was dismissed. On petition being filed in this Court, it was observed as follows:--
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"6. Keeping in view the above submissions of the learned counsel, we have carefully perused the material placed on record and noticed that, through the benefit of 7% of the basis pay as cost of living allowance and ad hoc relief of Rs,300 per month and Rs,100 per month were discontinued/withdrawn by the Government of Pakistan, vide same notification dated 4-9-2001, on introduction of revised pay scales with effect from 1-12-2001, but thereafter, admittedly, the claim for pensionary benefit was pursued by the petitioners, only in respect of sum of ad hoc reliefs and not in respect of 7% of the basic pay, as cost of living allowance. There is no plausible explanation in this regard, offered by the petitioner, except some correspondence, that too relating to the pensionary benefits, depending upon ad hoc relief of Rs,300 Rs,100. It seems that, at the time of introduction of revised pay scales with effect from 1-12-2001, said cost of living allowance @ 7% of the basic pay was absorbed in the new pay scales, and for this reason, the petitioners remained contended and satisfied, and did not pursue the matter in this regard. Even if the factual position is not so, the fact remains that after the notification dated 4-9-2001, and even after retirement of the petitioners, they remained mum for an indefinite long period till the filing of their petition before the High Court in the month on 13th March, 2007. For this inordinate delay, amounting to lathes, there is no satisfactory explanation offered by the petitioners. Moreover, on facts too, we ha not been impressed by the submissions of Mr. Abrar Hassan, about claim of the petitioners for grant of retirement/pensionary benefits, on the basis of cost of living allowance @ 7% of the basic pay as it was only possible in case there was no specific negation of such relief from the language of the said notification, which in this context, clearly provided as under:-- (c) The above allowance will not be treated as part of emoluments for the purpose of calculation of pension and recovery of house rent." 8. So far the submission of the learned Deputy Attorney-General is concerned, it will be appropriate that the definition of the term emoluments as contained in CSR 486 be reproduced, which is the benchmark for reckoning of pension. It is as follows:-- "Emoluments and ,Average Emoluments. 486.---The term "emoluments" means the emoluments which the officer was receiving immediately before his retirement and shall include:- (a) Pay as defined in FR*9(21)(a)(i); (b) Senior Post Allowance; (c) Special Pay of all types and nature; (d) Personal Pay; (e) Technical Pay; (f) Indexed Pay; (g) Increments accrued during leave preparatory to retirement; (h) Any other emoluments which may be specially classed as Pay." 9. On reading of the above definition of emoluments, it is clear that the terms emoluments are to be calculated upon what the officer was receiving immediately before his retirement i,e, Basic Pay, Senior Post Allowance, Special Pay of all types and nature, Personal Pay, Technical Pay, Indexed Pay, increments accrued during LPR, any other emoluments which may be specially classed as pay. The term "emoluments" as is defined by this CSR apparently seems to be all inclusive and though the word "include" has been used but it does not seem to enlarge the scope from the one that is enumerated in its items (a) to (h). The term "include" as appearing in this CSR will not include alien and extraneous elements for calculation of emoluments rather it will confine itself to the incidence attached to or connected with enumerated items (a) to (h). The learned Tribunal in its impugned judgment has altogether omitted to consider this CSR although the appellant in its para-wise comments has specifically raised the defence that the CSR 486 does not include the allowances claimed by the respondents in the emoluments reckonable towards calculation of pension. The
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appellant with the memo of appeal has filed copies of all the five OMs by which the allowances were granted i,e, Ad hoc Relief of Rs,100 per month vide OM dated 31-12-1999, Special Relief Allowance @ 15% of the basic pay per month vide OM dated 30-6-2003, Ad hoc Relief @ 15% of basic pay per month vide OM dated 1-7-2004, Dearness Allowance @ 15% basic pay per month vide OM dated 24-6-2006 and Ad hoc Relief Allowance-2009 vide OM dated 21-7-2009. In all these OMs, it is specifically noted that these allowances will not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of house rent. So on the date of their retirement, by virtue of the above referred OMs these allowances were not made part of their emoluments for reckoning of their pensions. They have been content in receiving their pensions without these allowances being made part of their emoluments and on issuance of OM dated 4-7- 2011, by which basic pay scales 2011 were. Introduced, the respondents filed appeals in the Tribunal claiming that these allowances be included in their emoluments for calculation of their pensions. 10. Mr. Muhammad Ibrahim Satti, learned Senior Advocate Supreme Court has made a submission in respect of the term "include" in CSR 486, but except for making a general statement the learned counsel did not support his submission by citing of any law. We may, however, refer to an Indian Supreme Court judgment in the case of N.P.D. Namboodripad v. Union of India (AIR 2007 SC 1782), which specifically dealt with a situation as is emerging in the present case. It is not necessary to go into the facts of the case rather the following quotations from the judgment will imply demonstrates the decision of the Court and clinches the issue in the present case:- (12) The State Government contended that the term 'emolument' (for ascertaining the 'average emolument' which is the basis for determination of ordinary pension) used in Rule 62 of Part III of Kerala Service Rules, included only basic pay and dearness pay, if any, and did not include dearness allowance or any other allowances. It is further contended that as the appellant was not receiving any dearness pay, his last drawn basic pay of Rs,3,500 per month alone constituted the 'emolument' for calculating the pension of the appellant. (13) On the other hand, it is contended on behalf of the appellant that the word "includes" in Rule 62 is not equivalent to "means" or only includes". According to the appellant, the word "includes" when used in definition of a word or phrase in a statute, enlarges the meaning of the word or phrase and such words or phrase must be construed as comprehending not only such things as they signify according to their natural meaning, but also those things which interpretation or definition clause declares that they shall include (vide The Regional Director, ESI Corporation v. High Land Cofee Works, AIR 1992 SC 192). The appellant contends the 'emolument' in its natural and ordinary that emolument' in its natural and ordinary sense, refers to the pay and all allowances; and the inclusive definition in Rule 62 is intended to further expend it by specifically including 'dearness pay. It is submitted that what is already included in the general meaning of the word emolument, that is dearness allowance and special allowances in addition to basic pay, could not be excluded because of the addition of some other item like 'dearness pay'. The appellant, therefore, contends that 'emolument' for purpose of pension, consists of basic pay, dearness allowance, other allowances and dearness pay. (14) As the entire argument of the appellant is based on Rule 62, it is useful to extract it. It reads thus: "62. The term emolument when used in this part means the emolument which the employee was receiving immediately before his retirement and includes; (a) Pay as defined in Rule 12(23) in Part I of these Rules and/or pay of the appointment under Rule 9 or Rule 31 of the Kerala State and Subordinate Service Rules. (b) The dearness pay the employee was actually in receipt of." Rule 12(23) in Part I of the Kerala Service Rules defines 'pay' thus: "Pay:- Means the amount drawn monthly by an officer as--
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(i) the pay, other than special pay or pay granted in view of his personal qualifications, which has been sanctioned for a post held by him substantively or in an officiating capacity. Or to which is entitled by reason of his position in a cadre, (ii) personal pay and special pay, and (iii) any other emolument which may be specially classed as pay by the Government. The appellant was not receiving any Dearness Pay. It is also not in dispute that dearness allowance and special allowance were not specially classed as 'pay' by the State Government under Rule 12(23). Therefore dearness allowance and special allowances, do not form part of pay. The word 'emolument' no doubt is a wider term than basic pay. It generally refers to the salary or profits from employment or office. But the word 'emolument' is not used in the general sense in the service rules related to pension. The word is defined for purposes of pension. In fact, all rules governing pension, define the word 'emolument' by giving a special or specific meaning, for purposes of pension calculation. Where a word is defined, there can be no…
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