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Petitioner: FEDERATION OF PAKISTAN through Secretary VS Respondent: SULTAN AHMAD SHAMSHonorable Justice Gulzar AhmedDil Muhammad Alizai,Muhammad Munir Piracha
2014 P L C (C.S.) 831
[Supreme Court of Pakistan]
Present: Iftikhar Muhammad Chaudhry, C.J.,
Gulzar Ahmed and Sh. Azmat Saeed, JJ
FEDERATION OF PAKISTAN through Secretary
Versus
SULTAN AHMAD SHAMS and 17 others
Civil Appeals Nos.581 to 598 of 2012, decided on 7th August, 2013.
(On appeal against a common Judgment dated 22-2-2012, passed by the Federal Service Tribunal, Islamabad, in Appeals Nos.1520(R)CS/2011, 1521(R)CS/2011, 1522-A(R)CS/2011, 1638(R)CS/2011, 1728(R)CS/2011, 1801(R)CS/2011, 1836(R)CS/2011, 1837(R)/CS/2011, 1838(R)CS/2011, 1990(R)CS/2011, 2026(R)CS/2011, 2031(R)CS/2011, 2041(R)CS/2011, 2042(R)CS/2011, 2054(R)CS/2011, 2055(R)CS/2011, 2071(R)CS/2011, 2072(R)CS/2011.)
(a) Service Tribunals Act (LXX of 1973)---
----S. 4---Civil Service Regulations, Regln. 486---Constitution of Pakistan, Art. 185(3)---Leave to appeal was granted by Supreme Court to consider, whether Special Additional Allowance, Special Relief Allowance, Ad hoc Relief Allowance and Dearness Allowance etc. were liable to be included in pensionable emoluments and were reckonable towards calculation of pension under the law.
(b) Service Tribunals Act (LXX of 1973)---
----S. 4---Civil Service Regulations, Regln. 486---Emoluments---Basis of pension---Respondents were retired civil servants who claimed payment of pension by addition of Special Additional Allowance, Special Relief Allowance and Additional Ad hoc Relief---Service Tribunal allowed appeals filed by retired civil servants and directed to include the same in calculation of their pensionary benefits---Validity---Term "emoluments" was 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 Leave Preparatory to Retirement and any other emoluments which might be specially classed as pay---Term "emoluments" as defined by Civil Service Regulations, Regln. 486, apparently seemed to be all inclusive and though word "include" had been used but it did not seem to enlarge the scope from the one that was enumerated in its items (a) to (h)---Term "include" as appearing in Civil Service Regulations, Regln.486, did not include alien and extraneous elements for calculation of emoluments rather it would confine itself to the incidence attached to or connected with enumerated items (a) to (h)---Service Tribunal in its judgment, omitted to consider Civil Service Regulations, Regln.486, although Federal Government in its para-wise comments had specifically raised defence that Civil Service Regulations, Regln.486 did not include allowances claimed by retired civil servants in emoluments reckonable towards calculation of pension---In Office Memorandums by which the allowances were granted, it was specifically noted that such allowances would not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of house rent---Judgment passed by Service Tribunal was not in accordance with law and suffered from legal infirmity and perversity and, therefore, was not sustainable---Supreme Court set aside the judgment passed by Service Tribunal---Appeal was allowed.
Maqsud Ahmad v. The Accountant-General, Pakistan Revenue Islamabad and 2 others 1999 PLC (C.S.) 5; I.A. Sherwani and others v. Government of Pakistan through Secretary, Finance Division, Islamabad and others 1991 SCMR 1041; Secretary to the Government of Pakistan, Ministry of Finance and others v. Muhammad Hussain Shah and others 2005 SCMR 675; S.A.M. Wahidi v. Federation of Pakistan through Secretary Finance and another 1999 SCMR 1904; Khursheed Latif and others v. Federation of Pakistan and others 2010 SCMR 1081 and N.P.D. Namboodripad v. Union of India AIR 2007 SC 1782 ref.
(c) Constitution of Pakistan---
----Art. 25---Civil servants on duty and retired---Classification---Discrimination---Pensioners have been classified as a separate group/class from the one, who are in service, the question of discrimination or violation of Art. 25 of the Constitution does not arise as the two groups are not to be dealt with in the same manner.
Dil Muhammad Alizai, D.A.-G. for Appellant.
Muhammad Munir Piracha, Senior Advocate Supreme Court for Respondents (in C.As. Nos. 581, 582, 584, 589, 591, 594 and 598 of 2012).
Muhammad Ibrahim Satti, Senior Advocate Supreme Court for Respondents (in C.As. Nos.586 and 588 of 2012).
Respondent in person (in C.A. No.583 of 2012).
Respondent in person (in C.M.A. No.4451 of 2012).
Nemo for Respondents (in other cases).
Date of hearing: 11th February, 2013.
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 D.A.-G. 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 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 D.A.-G. 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 years 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 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. Samdani, 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 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 re-computing 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 ask 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 Constitutional 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:---
"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 laches, there is no satisfactory explanation offered by the petitioners. Moreover, on facts too, we have 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 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…
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