2004 (4) TMI 583 - SC - Indian Laws

Whether the High Court s fixation of the pension under clause 2(a) is correct? Whether the High Court was correct in not adding the figures under para 2 cls. (a) and (b) of Schedule I, Part III of the Act in order to find out the revised amount of pension and whether a ceiling was imposed under clause 2(b) ?

Summary

Issues involved:
I. Whether the High Court's fixation of the pension under clause 2(a) is correct?
II. Whether the High Court was correct in not adding the figures under para 2 clauses (a) and (b) of Schedule I, Part III of the Act in order to find out the revised amount of pension and whether a ceiling was imposed under clause 2(b)?

Issue No. I:
The appellant contested the Division Bench's decision on the pension fixation under clause 2(a), arguing that the pension should be 50% of the average emoluments, not just the last salary. The appellant relied on Rule 62 of the Kerala Service Rules, emphasizing that emoluments should include dearness allowance and special allowances. The respondents argued that dearness allowance and special allowance should not be included as they were not dearness pay. The Court agreed with the appellant, stating that the inclusive definition in Rule 62 does not take away from the emoluments immediately before retirement. The Court held that the calculation should consider the amount of Rs. 4,237, inclusive of dearness allowance and special allowances, not just the basic salary of Rs. 3,500.

Issue No. II:
Regarding the combination of amounts under clauses (a) and (b) of para 2 to find the revised pension, the Division Bench ruled against it. The Court agreed, noting that the order revised the ordinary pension under clause 2(a), not the special additional pension under clause 2(b). The appellant argued against the ceiling of Rs. 8,000 in clause 2(b, citing a previous case where the ceiling was rejected. The Court found that although the Division Bench imposed the ceiling, the respondents actually authorized Rs. 12,800 to the appellant. Therefore, the Court modified the order, directing the calculation to include emoluments received before retirement, excluding clauses 2(a) and (b), and removing the ceiling on the pension amount.

In conclusion, the Court partially allowed the appeals, modifying the order to recalculate the pension based on the above directions within three months, with any arrears to be paid within the subsequent three months.