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The Chairman v. The Registrar - Writ Petition No.4956 of 1999 and WP.No. 12839 of 2001 [2002] RD-TN 281 (23 April 2002)


Dated: 23/04/2002




THE HONOURABLE MR. JUSTICE F.M. IBRAHIM KALIFULLA Writ Petition No.4956 of 1999 and WP.No. 12839 of 2001 and W.P.No. 12843 and 13717 of 2001

and connected W.M.Ps.

W.P. No.4956 of 1999

1. The Chairman,

Railway Board,

Rail Bhavan,

New Delhi.

2. Union of India owning

Southern Railway, rep.

by the General Manager,

Southern Railway,

Park, Madras-3. .. Petitioners vs.

1. The Registrar,

Central Administrative Tribunal,

Chennai Bench, Chennai-104.

2. D. Satyanarayana Sharma

3. S. Shanmugasundaram

4. K.S. Gopalakrishnan

5. V.L. Kandasamy

6. C.G. Shankar

7. V. Jothilangam

8. K. Mayachandran

9. M. Jayaseelan

10. Jaganwadham Babu

11. A. Dhilshad Khan

12. M. Kannappan

13. T.R. Hembrom

14. S. Govindarajan

15. P. Ramaswamy

16. K. Gnanasekaran

17. A. William Anburaj

18. A. Aloysius

19. P. Gnanasekaran

20. A. Rasheed

21. S. Subbaroyan

22. T.G. Balasubramanian

23. A. Periyanayaga Doss

24. M. Selvaraju

25. V. Rajendran

26. E. Venkataramani

27. G. Arumugam

28. P. Thirupathi

29. S. Sekar

30. A. Albert Thangaraj

31. K. Balaraman

32. C. Babu

33. M.J. James

34. D. Sarat Chandar

35. R. Dhanapal

36. M. Gangadharan

37. D. Vallinayagan

38. P. Durairaj

39. M. Ramalingam

40. S. Md. Nazeer Sheriff

41. K. Veeramani

42. S. Banuprakash

43. V. Nagarajan

44. R. Thiagarajan

45. V. Santhanam

46. Md. Sulaiman

47. N. Chandrasekaran

48. P. Muthusamy

49. S. Idayathullah

50. J. Madhusudanan

51. S. Raja

52. S. Palani

53. S. Nasarudeen

54. J.C. Rice

55. S. Narayanamurthi

56. K.S. Murugaiyan

57. S. Ilangovan

58. T. Ashok Kumar,

All Working as Stock Verifiers

at the Office of FA & CAO/WST/

PER, Chennai. .. Respondents PRAYER : Petitions under Article 226 of the Constitution of India praying to issue a Writ of Certiorari as stated therein.

ORDER These Writ Petitions coming on for hearing, upon perusing the

petitions and the affidavits filed in support thereof, the order impugned herein, counter and reply affidavits filed, after perusing the related records, and upon hearing the argu ments of Mr. R. Thiagarajan, Senior Counsel on behalf of M/s. V.R. Gopalan, Advocate for the petitioners, Ms. G. Mirula Roshini, Advocate for petitioner in W.M.P. No.30373 of 2000 and of Mr. K. Chandru, Senior Counsel on behalf of Mr. T. Dhanya Kumar fo r the respondent-employees, the Court passed the following order:- :O R D E R


The respondents before the Central Administrative Tribunal ( hereinafter referred to as the Tribunal) are the petitioners herein.

2. Original Application No.776 of 1996 was filed by the respondentemployees of the Southern Railway to call for the records of the Railway Board relating to Proceedings No.PCIV/87/Imp./7 New Delhi dated 8.5.1996 and to quash the same on the main plea t hat the additional increments granted to them form part of their basic pay and consequently, the same must also be taken into account for the purpose of calculating Dearness Allowance, House Rent Allowance, etc. and that the disallowance is illegal. Th e application was allowed. The writ petitions are against this order.

3. The brief facts of the case are stated hereunder : The post of Stock Verifiers in the Railways is filled by selection from the categories of Clerks-Grade I, Selection Grade Clerks and Sub-heads. Appendix-4 dealing with "Promotion to and confirmation to the rank of Stock Verifiers" states as follows :

"(1) Promotion of persons holding substantively posts of Clerks in the offices of the Financial Adviser and Chief Accounts Officers to the rank of Stock Verifiers will be on considerations of seniority and merit including fitness for outdoor work. In t he case of Accounts Clerks promotion to the rank of Stock Verifiers will not be made unless they have passed the examination prescribed in Appendix 2. The condition of passing the examination prescribed in Appendix 2 by Accounts Clerks before they can b e promoted to the rank of Stock Verifiers, may be relaxed, in special cases, under the sanction of the General Manager.


(6) No increments will be allowed to a Stock Verifier until he has passed the qualifying examination and failure at two consecutive examinations will entail reversion to his substantive post." (emphasis added)

4. The Fifth Pay Commission, in reference to Stock Verifiers in para 83:243, has recommended as follows :

" ..... It may not be possible to recommend pay scale higher than that of Accounts Assistants (i.e. Rs.1600-2660) for Stock Verifiers. The selection grade for Stock Verifiers which was available prior to IV C.P.C. may be reviewed as a second grade for Stock Verifiers. This pay scale is proposed to be Rs.1640-2900 in the present terms. This will motivate Stock Verifiers to continue in their line and not tempted to Accounts/Section Officers stream."

In the course of the recommendation, the Fifth Pay Commission took note of the demand made by the Stock Verifiers for higher pay scales than that of Accounts Assistants and an incentive on acquiring graduate diploma. The Commission also noted the fact t hat Stock Verifiers selected were given the benefit of pay fixation under F.R. 22(C) and two additional increments for passing the qualifying Appendix 4 IREM examination. After the Pay Commission's recommendation, the pay scales of the erstwhile sub-hea ds (now Accounts Assistants) and Stock Verifiers became identical as Rs.1400-2600. It was also noted that despite the incentives of three advance increments for Stock Verifiers, Zonal Railways are facing difficulties in filling up these posts and the Mi nistry had supported the demand for higher pay scales for Stock Verifiers.

5. The Stock Verifiers were given incentives on passing the Appendix 4 examination for the first time by the Railway Board as per their communication dated 3.3.1989. The communication reads as follows : "Subject - Grant of incentives to Accounts Stock Verifiers on passing Appendix 4 Examination.

The matter regarding grant of incentive to Stock Verifiers on passing Appendix 4 examination was under examination and pending issue of final orders, instructions were issued vide this Ministry's letter of even number dated 26.11.1987 for not passing a ny amount as incentive in the revised pay scales of 1986.

2. It has now been decided with the sanction of the President that Stock Verifiers in the grade Rs.1400-2600 shall be given three advance increments after their passing Appendix 4 examination. This will be effective from 1.1.1986 or the date from whic h the employee opts for the revised pay scales. (emphasis added)

3. ....." The Railway board, in their communication dated 25.7.1995, has specifically ordered that the three advance increments granted as per the Board's letter dated 3.3.1989 to Stock Verifiers in the grade of Rs.14 00-2600 for passing Appendix 4-A examination m ay be treated as additional increment not to be absorbed in future increments. In this background, the impugned communication dated 8.5.1 996 came to be issued wherein it was ordered that the additional increments will not be treated as part of basic pay and not to be reckoned for calculating D.A. etc. It is against this communication the O.A. was filed by the respondent-employees, which was allowed by the Tribunal.

6. The learned senior counsel Mr. R. Thiagarajan argued in extenso in reference to the relevant rules submitted that the definition of ' pay' readwith Appendix 4 shall not take in the additional increments which were granted as an incentive. According t o him, the increments were granted only after passing the examination and on their failure to pass within the prescribed attempts, they were reverted. Hence, it cannot be stated that the increments can be reckoned as forming part of the scale of pay fo r the said post. The granting of increment was initially thought of as an incentive to attract personnel from lower categories to the post of Stock Verifiers. According to him, the interpretation and the view of the Tribunal is clearly illegal.

7. Mr. K. Chandru, learned senior counsel appearing on behalf of the respondent-employees submitted that increment is always treated as part of pay, whether it is advance increment or not. Dearness Allowance is paid to offset the erosion in the purchas ing power of the salary paid. He submitted that the post of Stock Verifiers requires a qualification and the increment is granted to the post. He assailed the decision of the Railways taken without notice to the respondent-employees. According to him, the Board cannot treat persons who have already drawn the salary by including the increment in their pay scale and the respondentemployees, who are yet to get the benefits, differently. Any such treatment will be arbitrary and violative of Article 14 of the Constitution of India.

8. We have heard the counsel in extenso and considered the matter carefully.

9. The Stock Verifiers were drawn from the category of Clerks on promotion by selection. As there was a dearth of Stock Verifiers opting from the lower category, the Board offered to grant incentive. In their communication dated 3.3.1989, it has been clearly stated that they shall be given three advance increments after their passing the Appendix 4 examination. The communication further says that this was thought of as an incentive for them. It was made clear that the increments, which are granted as an incentive, shall be given only after their passing the examination.

10. The point that arises for consideration here is whether this increment can be treated as pay for the purpose of calculating Dearness Allowance, etc. 'Pay' has been defined under Fundamental Rule 9 and also under Clause 1303 of the Indian Railways Establishment Code. The said rule is extracted below :

"1303. (F.R.9)(21)(a) - Pay - Pay means the amount drawn monthly by a Government servant 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 he is entitled by reason of his position in a cadre; and

(ii) overseas pay, special pay and personal pay; and (iii) any other emoluments which may be specifically classified as pay by the President."

As per the above definition, the pay granted in view of a Government servant's personal qualification does not form part of his basic pay. From the communications of the Board referred to earlier, it is clear that the additional increment was granted to the Stock Verifiers on their acquiring or passing the examination prescribed. Therefore, there is no scope for treating this increment as forming part of their pay which has been specifically excluded from the definition 'pay'. The Board, in their fur ther communication made in the year 1995 dated 25.7.1995, has categorically stated that the advance increment is not to be absorbed in future increments, followed by the impugned communication that the increment cannot be treated as part of basic pay for the purpose of calculating the D.A. The Fifth Pay Commission has also taken note of this fact that the staff have to qualify in the Appendix 4 examination in order to become Stock Verifiers and as it may not be possible to recommend pay scales higher t han that of Accounts Assistants for Stock Verifiers, they have proposed selection grade for Stock Verifiers, which was available prior to the IV C.P.C., reviving as a second grade for Stock Verifiers and proposing a scale of Rs.1640-2900.

11. Though in ordinary understanding of the term 'increment' which is earned by a Government servant is a part of pay and his D.A. is calculated by including that pay, considering the background in this case, we find that the three advance increments w ere granted as an incentive to attract lower grade staff to the post of Stock Verifiers and that these advance increments were granted on their passing the examination. Therefore, the grant of increment is not automatic, but is conditional on their acqu isition of a qualification. 'Pay' as defined under Clause 1303 really excludes the pay granted in view of personal qualification. It cannot be stated that the increment is attached to the post and the scale of pay. As seen from the subsequent decision s of the Railway Board dated 31.5.2001 wherein the Board has decided to replace the scheme of granting three advance increments to Stock Verifiers in the scale of Rs.5000-8000 on their passing the Appendix 4 -A IREM examination, with a fixed quantum of Rs .240/- per month with effect from 1.6.1996. They have further stated that this special advance will not count for calculation of D.A., H.R.A., C.C.A. and other relevant purposes.

12. In ROSHAN LAL VS. UNION OF INDIA (A.I.R. 1967 S.C. 1889), the Constitution Bench of the Supreme Court has held that the origin of Government servant is contractual. But once appointed to a post, the Government servant acquires a status and his righ ts and obligations are no longer determined by consent of both parties, but by the statute or statutory rules which may be framed or altered unilaterally by the Government. The emolument of a Government servant and his terms of service are governed by t he terms of the statute or statutory rules which may be altered unilaterally by the Government without the consent of the employee. In this case, we do not find any alteration of the terms and conditions of the emoluments. It was only on an erroneous i nterpretation of the grant of increment in the form of incentive as forming part of the pay that enabled the respondent-employees and other such employees to get their D.A. fixed including the emoluments. The authorities have failed to see that the incr ements were attached to the person and subject to his acquiring the qualification and therefore, it could not have been treated as pay. As early as on 27.10.1989, it was clearly specified and clarified that these additional increments will not count as pay for the purpose of calculating the allowances and treated as emoluments for the purpose of pension and gratuity. The impugned communication of the year 1996 is nothing but a reiteration of the earlier stand of the Board which was in consonance with the grant of incentive in the form of increment subject to the acquisition of the qualification prescribed. This clarification, readwith the definition of 'pay' and on consideration of other circumstances, we are clear in our mind that the increments ca nnot be treated as part of the basic pay, but only as a separate element which will not count for the purpose of calculating the D.A., etc.

13. Learned senior counsel Mr. K. Chandru referred to the judgment of a learned single Judge of the Andhra Pradesh High Court in GUNTUR DISTRICT CO-OPERATIVE CENTRAL BANK EMPLOYEES' ASSOCIATION VS. GENERAL MANAGER [1992 (1) S.L.R. 465], wherein it was held that increment has to be treated as basic pay. In that case, the learned Judge found, by reading the various Government Orders, that the intention of the Government is to treat the increment given for family planning as part of the basic pay and is part of the normal increment which may be given to an employee. Whereas, in the case on hand, right from the beginning,t he Railway Administration did not treat, as is evidenced by their communications, these increments as part of basic pay.

14. The judgment of the Supreme Court in BHAGWAN SHUKLA VS. UNION OF INDIA [1995 (2) L.L.J. 726] holding that reduction of pay and refixation after twenty years to undo the earlier mistake cannot be done without an opportunity. On facts, this judgment m ay not be of assistance to the respondent-employees. That was a case where, by a specific order, the pay scale of the appellant was refixed by reducing the basic pay with retrospective effect and in those circumstances, that was held by the Supreme Cou rt as illegal.

15. Learned senior counsel for the respondent-employees referred to another judgment of the Constitution Bench of the Supreme Court in D.S. NAKARA & OTHERS VS. UNION OF INDIA [1983 (1) L.L.J. 104] in support of his argument of discrimination. The Sup reme Court, in that case, held that pensioners form a class and their computation cannot be on a different formula affording unequal treatment solely on the ground that some retired earlier and some retired later. In that case, all pensioners, whenever they required, were to be covered by a liberalised pension scheme which would be operative from a specified date. This judgment also, in our view, will have no application to the facts of the present case.

16. Recoveries were sought to be made only against the amount which was over-paid prior to the communication dated 8.5.1996 which was questioned before the Tribunal. Though the Stock Verifiers are ineligible to count the increments for their basic pay, right from its inception, the Railway Board has chosen to give effect to it strictly from 8.5.1996. Therefore, the erroneous fixation, if any, made earlier and the amounts paid on that basis were not sought to be recovered. Once we have found that the communication dated 8.5.1996 is legal and in accordance with law, the Board is entitled to enforce the same. The respondent-employees cannot insist that the wrong interpretation and the erroneous orders should be applied and continued in their favour f or ever.

17. For all these reasons, the order of the Tribunal is liable to be set aside and is hereby set aside. Writ Petition 4956 of 1999 is, therefore, allowed. However, there will be no order as to costs. Consequently, all other connected writ petitions, n amely W.P. Nos.12839 to 12843 of 2001 and W.P. No.13717 of 2001, challenging the order of the Tribunal quashing the consequential letters and orders of the Railway Board are also allowed. All the connected W.M.Ps. are closed.

Index : Yes (P.S.M.J.) (F.M.I.K.J.) Internet : Yes 23..04..2002 ab


Assistant Registrar


Sub Assistant Registrar (C.S.)


1. The Chairman,

Railway Board,

Rail Bhavan,

New Delhi.

2. The General Manager,

Southern Railway,

Park Town, Madras-3.

3. The Financial Adviser &

Chief Accounts Officer/

Furnishing ICF, Chennai-38.

4. The Senior Accounts Officer (WLS),

Southern Railway, Golden Rock,


5. The Registrar,

Central Administrative Tribunal,

Chennai Bench, Chennai-104.




Order in

W.P. Nos.4956 of 1999,

12839 to 12843 and

13717 of 2001.


Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites


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