ND P NAMBOODRIPAD (DEAD) BY LRS. v. UNION OF INDIA AND ORS

Citation: [2007] 3 S.C.R. 769

Court: Supreme Court of India

Bench: H.K. SEMA, R.V. RAVEENDRAN

Case summary

ND P NAMBOODRIPAD (DEAD) BY LRS. v. UNION OF INDIA AND ORS.pdf

Judgment text

ND P NAMBOODRIPAD (DEAD) BY LRS. ~·· t v. UNION OF INDIA AND ORS. MARCH 8, 2007 [H. K. SEMA AND R. V. RAVEENDRAN, JJ. ) t Service Law: High Court Judges (Conditions ofService) Act, 1954; S. l 5(1)(b), Part 111 of First Schedule/Kera/a Service Rules; Rule 12(23) and 62: Pension-Appellant retired as Judge ofHigh Court in 1980-lssuance ofCircular by Government ofIndia rationalizing pension structure ofJudges w. e. f 1. 1.

1986-Fixation ofpension on revision-Challenged on the ground that ordinary pension not calculated by taking into consideration emoluments drawn at the time ofretirement and additional pension fIXed by following the ceiling limit in terms ofprovisions under Part Ill of First Schedule-Held: Dearness allowance and Special allowance were not specially classed as pay by State Government under the provisions ofRule 62-Jfpay, dearness allowance and other allowances already included in emoluments with reference to its general/normal meaning, there was no reason to again specify them in Rule 62-Ru/e 62 intended to clarify that only pay and dearness pay would be considered as emoluments for the purpose ofcalculating pension-Amendments made in provisions of1968 Act clarify that emoluments for the purpose of calculating pension comprise of only pay and dearness pay-Hence, the emoluments ofthe appellant rightly taken as Rs. 35001- p. m.

for the purpose of calculating pension- Since neither the ceiling of Rs. 8,0001- introduced by the State Government in terms ofthe Circular issued by the Government of India effective from 1. JI. 1986 nor the earlier ceiling of Rs. 3,5001- justified/valid, the additional pension could appropriately be fIXed at Rs. 5,6001- per annum w. e. f 1. 1. 1986 and Rs. 12,8001- per annum w. e. f 1. 11. 1986 in terms of instructions/Rules-Kerala Services Act, 1968. Words and Phrases: 'Emoluments' and 'pay'-Meaning ofin the context offIXation ofpension of a retired Judge in terms of Kera/a Service Rules. Appellant entered the Kerala Higher Judicial Service as a directly recruited District & Sessions Judge and was later elevated as a Judge of the ~ . Kerala High Court. He retired on 31. 7. 1980. The pension payable to High Court Judges is governed by Chapter III ofthe High Court Judges (Conditions of Service) Act, 1954.

The appellant was governed by Part Ill of the First Schedule to the Act as he did not opt for pension under Part I of that Schedule of the Act The Government oflndia, vide Circular dated 18. 12. 1987, notified the Accountant Generals of all States that the ordinary pension admissible to High Court Judges under Para 2(a) of Part Ill of the First Schedule to the High Court Judges (Conditions ofService) Act, 1954 may be revised with effect t from 1. 1. 1986. It permitted the respective State Governments to either adopt the said 0. M. dated 16. 4. 1987 or issue independent orders on similar lines, subject to the maximum ceiling as stipulated in Schedule Ill to the Act. By order dated 19. 10. 1989, the Government ofKerala directed that the pension ofthe Judges ofthe High Court, who have been promoted from the State Higher Judicial Service and falling under Part III of the First Schedule to the Act, shall be revised with effect from 1. 1.

1986 in accordance with the rates referred to in the O. M. dated 16. 4. 1987 issued by the Government of India. Accordingly, the pension of the appellant was revised. The appellant challenged the pension so fixed on the ground that the ~ ordinary pension ought to have been calculated, by taking the emoluments drawn at the time of retirement and that the additional pension under para 2(b) of Part III of First Schedule to the Act may be fixed without reference to any ceiling. A Single Judge of the High Court allowed the petition holding that the appellant was entitled to a pension of Rs. 35,100/- per annum from 1. 1. 1986 and Rs. 47,900/- per annum from 1. 11. 1986. Union oflndia challenged the order of the Single Judge of the High Court, which was allowed by the High Court. The Division Bench of the High Court set aside the order of the Single Judge and affirmed the pension as fixed.

A review petition filed by the I : Ill of the First Schedule to the Act without any ceiling, in view of the decision of this Court in the ca~e of M. L. Jain (III). The respondents were directed to recalculate the pension within three months and pay the arrears to the ND PNAMBOODRIPAD(DEAD) BY LRS. v. U. 0. 1. 771 - } appellant. Aggrieved by the first part of the judgment relating to calculation ofordinary pension based on the interpretation of Rule 62, the State of Kerala filed a review petition. The review petition was allowed by order dated 1. 4. 2005, the judgment dated 16. 4. 2004 was recalled and the civil appeals were restored for fresh hearing.

Appellant contended that the word "includes" when used in the definition along with a word or phrase in a Statute, it enlarges the meaning of the word or phrase; that 'emolument' in its natural and ordinary sense, refers to the pay and all allowances; and that the inclusive definition in Rule 62 is intended to further expand it by specifically including 'dearness pay'; 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 ofsome other item like 'dearness pay', therefore, 'emolument' for the purpose of pension, consists of basic pay, dearness allowance, other allowances and dearness pay.

The State contended that the term 'emolument' used in Rule 62 of Part III of Kerala Services Rules, included only basic pay and dearness pay, if any, and did not include dearness allowance or any other allowances; that as the ~ appellant was not receiving any dearness pay, his last drawn basic pay of Rs. 3500/- per month alone constituted the 'emolument' for calculating the pension. Partly allowing the appeals, the Court HELD: 1. 1. Dearness allowance and special allowance were not specially classed as 'pay' by the State Government under Rule 12(23) of the Kerala Service Rules. Therefore dearness allowance and special allowances, do not form part of pay. [Para 14) [779-D-E) "' 1. 2. 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 relating to pension, where it 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 reference or reliance on any general meaning. To bring in 'generality' instead of 'specificity' in defining the term 'emolument' will defeat the very purpose of defining 'emolument' for purposes of pension. Therefore, contextually the definition of'emolument' should be specific and not 'expansive' or general. ! Para 141 (779-D-FI { - 1. 3. The word 'includes' has different meanings in different contexts. It is no doubt true that generally when the word 'include' is used in a definition clause, it is used as a word of enlargement, that is to make the definition extensive and not restrictive. But the word 'includes' is also used to connote a specific meaning, that is, as 'means and includes' or 'comprises' or 'consists or.

The word 'includes' can be used in interpretation clauses either generally in order to enlarge the meaning of any word or phrase occurring in the body ofa Statute, or in the normal standard sense, to mean 'comprises' or 'consists or or 'means and includes', depending on the context. (Paras 15 and 16] The Municipal Council, Raipur v. State ofMadhya Pradesh, AIR (1970) SC 1923; South Gujarat Roofing Tile Manufacturers Association v. State of Gujarat, AIR (1977) SC 90; Hindustan Aluminium Corporation v. State of Uttar Pradesh, AIR (1981) SC 1649 and Reserve Bank ofIndia v. Peerless General Finance and Investment Co. Ltd. , (1987] 1 SCC 424, referred to. Webster's Dictionary; ///us/rated Oxford Dictionary and Collins Dictionary ofEnglish Language, referred to. I- ..... 1. 4.

Ifthe words 'and includes' were intended to rope in certain items which would not be part of the meaning, but for the definition, then Rule 62 would have specified only 'dearness pay' as the item to be included but not 'pay'. Ifpay, dearness allowance and other allowances were already included in 'emolument' with reference to its general or normal meaning, as contended by appellant, there was no reason to specifically again include 'pay' in Rule 62. Inclusion of 'pay' and 'dearness pay' and non-inclusion of 'dearness allowance or other allowances' in the definition of 'emolument' is significant. The definition in Rule 62 is intended to clarify that only pay and dearness ) 1. 1. 1986. Clause 4. 1 thereof provided for additional relieffor existing pensioners. Clause 5 provided for calculation of pension at 50% of average emoluments in the case of pensioners whose pension was calculated under the slab formula. Clause 6.

1 related to consolidation of pension and provided that the pension of existing pensioners will be consolidated with effect from 1. 1. 1986 by adding together (a) the existing pension, (b) the existing dearness relief and (c) the additional benefits accruing from Paras 4 and 5 of the said 0. M. dated 16. 4. 1987. The said 0. M. was not applicable to retired High Court Judges whose pension was governed by separate rules/orders and stated that necessary orders will be issued in their cases by the respective authorities. 5. By Circular dated 18. 12. 1987, the Government of India notified the Accountant Generals of all States that the ordinary pension admissible to High Court Judges under Para 2(a) of Part III of the First Schedule to the High Court Judges (Conditions of Service) Act, 1954 may be revised with effect from 1. 1. 1986 as in the case of the employees of the Central Government. It permitted the respective State Governments to either adopt the said O. M.

or issue independent orders on similar lines, subject to the maximum stipulated in Schedule Ill to the Act. By order dated 19. 10. 1989, the Government of Kerala directed that the pension of the Judges of the High Court, who have been promoted from the State Higher Judicial Service and falling under Part Ill of the First Schedule to the Act, shall be revised with effect from 1. 1. 1986 in accordance with the rates referred to in the O. M. dated 16. 4. 1987 issued by the Government of India. 6. By communication dated 26. 10. 1989, the office of the Accountant General, Kerala, informed the Central Government (with copy endorsed to appellant) that the pension of the appellant who had opted for Part III of the p First Schedule to the Act, was revised and consolidated from 1. 1. 1986 and I . 11. 1986 as follows : (a) Pension (including additional pension) from 1. 1. 1986 : Rs. 32,720 p. a. (b) Pension (including additional pension) from 1. 11. 1986: Rs. 37,220 p. a.

The annexure to the said letter showed the calculation of pension as follows, by treating the 'emolument' reckoned for pension as Rs. 3,500/- per month and qualifying service as 23 years : Existing ordinary pension : Rs. 1150/- p. m. ~ ~ Revised ordinary pension (as per 50% formula): 3500 x 23 =Rs. 1342 p. m. 2 30. Increase due to Revision : Rs. 192/- p. m. or Rs. 2304/- p. a. "Consolidation of Pension as per O. M. dt. 16. 4. 1987 Amount Per Annum I. Existing ordinary pension (1150 x 12) Rs. 13,800/- 2 Part consolidated ordinary pension as per Para 6. 1 of O. M. dt. 16. 4. 87 Rs. 26,916/- Additional relief as per para 6. l(A) in case of pre 3J. 3. 85 retirees (vide Col. 2 ofready reckoner) : (2243 x 12) 3. Increase due to recalculation at 50% of Pay Rs. 2,304/- 4. Total consolidated ordinary pension Rs. 29,220/from 1. 1. 1986 (2 + 3) 5. Additional pension admissible from 1. 1. 1986 Rs. 3,500/- (under para 2(b) of Schedule III to the Act) 6. Total pension admissible from 1. 1.

1986 (4 + 5) Rs. 32,720/- /( 7. Additional pension admissible from l. II. 1986. 1 Rs. 8,000/- (under para 2(b) of Schedule III to the Act) 8. Total pension admissible from 1. 11. 86 (4 + 7) Rs. 37,220/-" 7. The appellant challenged the said fixation of pension in O. P. No. 203/ 1990. According to him the ordinary pension ought to have been calculated, by taking the emoluments drawn at the time of retirement (Rs. 4237/- per ND PNAMBOODRIPAD (DEAD) BY LRS. "· U. 0. 1. [RAVEENDRAN. J. ) 777 ~ ) month) instead of Rs. 3500/-. He also contended that the additional pension under para 2(b) of Part Ill of First Schedule to the Act should be without reference to any ceiling. A learned Single Judge allowed the said petition by order dated 12. 3. 1992. He held that the appellant was entitled to a pension of Rs. 35,100/- per annum (that is Rs. 2,925x12) from 1. 1. 1986 and Rs. 47,900/- per annum (that is Rs. 35,100 + Rs. 12,800) from 1. 11. 1986. 8.

Union of India challenged the said order of the learned Single Judge in W. A. No. 804 of 1992. The said appeal was allowed by judgment dated 10. 7. 1997. The Division Bench set aside the order ofthe learned Single Judge and affirmed the pension as fixed under communication dated 26. 10. 1989 (extracted in para 6 above). The Division Bench purported to follow the decisions of this Court in ML. Jain(/) AIR (1985) SC 619 and ML. Jain(//) AIR (1989) SC 669. It, however, observed that ifany excess payment had been made to the appellant on account of any wrong calculation, such excess need not be refunded by the appellant. A review petition filed by the appellant was rejected by the Division Bench by Order dated 10. 11. 1997. 9. The said judgment of the Division Bench and the rejection of the review petition, are challenged in these appeals by special leave.

The appellant placed reliance on Rule 62 of Part III of the Kerala Service Rules, in suppor1 of his contention that average emolument of the appellant had to be taken as Rs. 4237/- instead of Rs. 3500/- per month for calculating the ordinary pension. In support of the contention that the special additional pension should be calculated without any ceiling, reliance was placed on M. L. Jain (III) AIR (1991) SC 928. 10. This Court, by judgment dated 16. 4. 2004 reported in [2004] 5 SCC 259 held that having regard to Rule 62, 'emolument' for calculating pension, would include dearness allowance and other special allowances. This Court further held that the ordinary pension of appellant should be calculated by taking Rs. 4237/- was the monthly emolument instead ofRs. 3,500/-. This Court also held that the special additional pension should be calculated under Clause 2(b) of Part III of the First Schedule to the Act without any ceiling, in view of the decision in M. L. Jain (Ill).

The respondents were directed to recalculate the pension within three months and pay the arrears to th~ appellant. 11. Aggrieved by the first part of the judgment relating to calculation of ordinary pension based on the interpretation of Rule 62, the State of Kerala filed review petition in R. P. (C) Nos. 1482-83/2004. The review petitions were ~ • allowed by order dated 1. 4. 2005, the judgment dated 16. 4. 2004 was recalled and the civil appeals were restored for fresh hearing. We have heard the learned counsel on both issues. Re : Ordinary Pension : 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 Ill of Kerala Services 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. 3500/- 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 the definition of 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 the interpretation or definition clause declares that they shall include (vide The Regional Director, ES! Corporation v. High Land Coffee Works, AIR (l992) SC 129).

The Appellant contends 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 expand 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 ofthe addition ofsome 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 : N DPNAMBOODRIPAD(DEAD) BY LRS. v. U. 0. 1. [RAVEENDRAN. J.

] 779 (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 - (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, and (ii) personal pay and special pay, and (iii) any other emoluments 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 relating 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 reference or reliance on any general meaning. To bring in 'generality' instead of 'specificity' in defining the term 'emolument' will defeat the very purpose of defining 'emolument' for purposes of pension. Therefore, contextually the definition of 'emolument' should be specific and not 'expansive' or general. 15. The word 'includes' has different meanings in different contexts. Standard Dictionaries assign more than one meaning to the word 'include'.

Webster's Dictionary defines the word 'include' as synonymous with 'comprise' or 'contain'. The 11/ustrated Oxford Dictionary defines the word 'include' as : (i) comprise or reckon in as a part of a whole; (ii) treat or regard as so included. The Collins Dictionary of English Language defines the word 'includes' as : (i) to have as contents or part of the contents; be made up of or contain; (ii) to add as part of something else; put in as part of a set, group or a category; (iii) to contain as a secondary or minor ingredient or element. ~ • It is no doubt true that generally when the word 'include' is used in a definition clause, it is used as a word of enlargement, that is to make the definition extensive and not restrictive. But the word 'includes' is also used to connote a specific meaning, that is, as 'means and includes' or 'comprises' or 'consists of. 16. Justice G. P.

Singh in his treatise 'Principles ofStatutory Interpretation', (Tenth Edition, 2006), has noticed that where a word defined is declared to 'include' such and such, the definition is prima facie extensive, but the word 'include' when used while defining a word or expression, may also be construed as equivalent to 'mean and include' in which event, it will afford an exhaustive explanation of the meaning which for the purposes of the Act must invariably be attached to the word or expression. [vide pages 173 and 175 referring to and relying on the decisions of this Court in The Municipal Council, Raipur v. State ofMadhya Pradesh, AIR (1970) SC 1923, South Gujarat Roofing Tile Manufacturers Association v. State ofGujarat, AIR (1977) SC 90, Hindustan Aluminum Corporation v. State of Uttar Pradesh, AIR (1981) SC 1649, and Reserve Bank ofIndia v. Peerless General Finance and Investment Co. Ltd. , [1987] I SCC 424.

It is, therefore, evident that the word 'includes' can be used in interpretation clauses either generally in order to enlarge the meaning of any word or phrase occurring in the body of a Statute, or in the normal standard sense, to mean 'comprises' or 'consists of or 'means and includes', depending on the context. 17. If the words 'and includes' were intended to rope in certain items which would not be part of the meaning, but for the definition, then Rule 62 would have specified only 'dearness pay' as the item to be included but not 'pay'. If pay, dearness allowance and other allowances were already included in 'emolument' with reference to its general or normal meaning, as contended by appellant, there was no reason to specifically again include 'pay' in Rule 62. Inclusion of 'pay' and 'dearness pay' and non-inclusion of 'dearness allowance or other allowances' in the definition of 'emolument' is significant.

The definition in Rule 62 is intended to clarify that only pay and dearness pay would be considered as 'emolument' for purposes of calculaiing pension. The words 'and includes' have been used in Rule 62, as meaning 'comprises' or 'consists of. 18. In the view we have taken, it is unnecessary to consider the following ND PNAMBOODRIPAD (DEAD) BY LRS. v. U. 0. 1. [RAVEENDRAN, J. ) 781 . two amendments to Rule 62 of Part III of the Kerala Service Rules, made _ l during the pendency of this appeal, in exercise of power conferred by section 2(1) of the Kerala Public Services Act, 1968 : (i) Substitution of the words 'comprises only' in place of 'includes' in Rule 62, by Kerala Service (Amendment) Rules 2004, with effect from 1. 3. 1997. (ii) Further substitution of the words 'comprises only the following' in place of the words 'comprises only' in Rule 62 of Part III of Kerala Service Rules by Kerala Service (Amendment) Rules, 2005, with effect from 14. 11. 1966.

The explanatory notes to the two amendments clarify that the Srate Government decided to amend the Service Rules to give more clarity and to avoid ambiguity in calculating pension and the term 'emolument' for the purpose of calculation of pension will comprise of only pay and dearness pay. We have already held accordingly while interpreting unamended Rule 62. The amendments merely reinforce our view. 19. We, therefore, accept the contention of the State Government that Rule 62 does not enable the addition of dearness allowance and special allowance to the pay for purposes ofpension. The 'emolument' ofthe appellant was rightly taken as Rs. 3500/- per month. We find no error in calculation of the consolidated ordinary pension at Rs. 29,220/-. Re : Special Additional Pension : 20. Special additional pension is provided for under Para 2(b) ofPart III offirst Schedule to the Act. In ML.

Jain (Ill) -AIR 1991SC928, the ceiling prescribed under para 2(b) was held to be unconstitutional being violative of Article 14 of Constitution of India. Therefore, neither the ceiling of Rs. 8,000/- introduced with effect from 1. 11. 1986, nor the earlier ceiling of Rs. 3500/- is valid. As a consequence, the special additional pension should be taken as Rs. 5,600/- per annum (that is Rs. 700x8) instead of Rs. 3500/- from 1. 1. 1986 and Rs. 12,800/- per annum (that is Rs. l600x8) instead of Rs. 8,000/- from I. 11. 1986. In fact, neither Union of India, nor State Government dispute this position. 21. We, therefore, allow these appeals in part and hold as follows : (i) that for the purpose of calculation of pension, the 'emolument' received by the appellant was Rs. 3,500/- per month and not Rs. 4,237/-. Consequently, determination ofconsolidated ordinary pension as Rs. 29,220/- per annum from 1. 1. 1986 is upheld.

(ii) As the ceiling on the amount to be added under clause 2(b) of Part Ill of First Schedule to the Act is invalid, the special additional pension per annum would be Rs. 5600/- per annum from 1. 1. 1986 and Rs. 12,800/- per annum from 1. 11. 1986 in the case of appellant. (iii) Therefore, the total pension was Rs. 34,820/- p. a. from 1. 1. 1986 and Rs. 42,020/- per annum from 1. 11. 1986. 22. We direct that the pension due be recalculated and settled accordingly. If any excess payment has been made to the appellant, it shall not, however, be recovered from the Legal Representatives ofthe deceased appellant. Parties to bear their respective costs. S. K. S. Appeals partly allowed.