High Court
Legal Reasoning
WP 175 21.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO. 175 OF 2021 WITHCIVIL APPLICATION NO. 1982/2022 IN WP/175/20211)Adarsh Kumar Jain,Age 58 years, Occ. Service,r/o. Magnium Housing Society,H/No. 182E, Savarkar Nagar,Near Dharander Sambha School,Dakshin Mukhi Hanuman Mandir,CIDCO-N5 Aurangabad.2)Pavan Kumar SinghAge 44 years, Occ. Service,R/o. Flat No. 203, Tulsi AcradeConnaught Place, Aurangabad.3)Katakam Kondala Rao,Age 54 years, Occ. Service,R/o. Flat No. 4, Plot No. 25,Yashdeep Apartment, Ashoknagar,Garkheda, Aurangabad.…PetitionersVERSUS1)The Union of India,Through the Under Secretary toGovernment of India,Ministry of Finance,Department of Financial Services,New Delhi.2)The Joint Secretary,Department of Financial Services,Ministry of Finance, New Delhi.3)The Debts Recovery Tribunal,CIDCO, Aurangabad.…Respondents. …Advocate for Petitioners : Mr. Avinash S. Deshmukh a/w Mr. P.B. Chandel.Advocate for Respondent nos. 1 to 3 : Mr. S.S. Deve, Standing Counsel...1/8 WP 175 21.odtCORAM: MANGESH S. PATIL & PRAFULLA S. KHUBALKAR , JJ.RESERVED ONPRONOUNCED ON :: 10.12.2024 14.12.2024JUDGMENT : (PER : MANGESH S. PATIL, J.) Heard. Rule. Rule is made returnable forthwith. The learned advocateMr. Deve waives service for respondent nos. 1 to 3. At the joint request ofthe parties, the matter is heard finally at the stage of admission.2.The issue that is involved in the petition is as to whether thepetitioners who are employees of various nationalized banks, who have beensent on deputation to respondent no. 3, a Debts Recovery Tribunal,established under the Recovery of Debts and Bankruptcy Act, 1993, areentitled to claim fixation of their pay by including inter alia specialallowance.3.The petitioner no.1 joined as a clerk in the Punjab National Bank on06.11.2017. The petitioner no. 2 joined as a Law Officer with SyndicateBank (now Canara Bank) on 18.12.2006 and the petitioner no. 3 wasappointed as SSI Field Officer in Allahabad Bank (now Indian Bank) on23.03.1992. They were sent on deputation having opted therefor, on06.11.2017, 30.06.2020 and 19.08.2019, respectively. Before deputation,they were getting the salaries including the special allowance on whichdearness allowance was being assessed/calculated.4.By the impugned communication/circular issued by the UnderSecretary to the Government of India dated 01.10.2020 (Exh. D), byreferring to a clarificatory letter issued by the then Under Secretary to theGovernment of India in the Ministry of Finance dated 24.11.2009, and byreferring to DOPT’s office memorandum dated 17.06.2010, and particularlypara 4.1, it was directed that ‘special allowance’ was not ‘pay’ and was alsonot to be treated as ‘pay’ for the purpose of determining pension (including2/8 WP 175 21.odtNPS, PF and gratuity) as per the bipartite settlement dated 25.05.2015. It isthis communication, which is being challenged by the petitioners and theyare soliciting writ of prohibition not to make recoveries, seeking adeclaration that they are entitled to special allowance as a part of their pay.5.Mr. Deshmukh for the petitioners would take us through theaforementioned communications as well as the bipartite settlement dated25.05.2015. He would submit that it is pursuant to the communicationdated 24.11.2009 (Exh. B) that it was specifically directed by the Ministryof Finance that fixation of pay of the employees of various banks, who weredeputed to the Debts Recovery Tribunals (DRTs) or Debts RecoveryAppellate Tribunals (DRATs) shall be done by including the specialallowance. Since the basic pays were directed to be added with stagnationincrement, professional qualification pay, fixed personal pay etc., on whichthe dearness allowances were being paid were to be fixed as a basic pay,looking at the incentive only, the petitioners and similarly placed employeescould have opted for being sent on deputation to the DRTs and DRATs.6.He would submit that there should not have been any confusion. Thebipartite settlement being relied upon by the respondents also expresslystipulated that the banks’ employees would be entitled to have a dearnessallowance calculated on the basic pay, several other allowances/incrementsas well as special allowance. Without there being any reason, the impugnedcommunication was issued expressly mentioning that the special allowancewas not ‘pay’ and was not to be treated as such for the purpose ofdetermining pension and other pensionary benefits. In fact, the settlementof 2015 expressly laid down in the definition of “pay”, the componentswhich are to be considered for extending superannuation benefits, othercomponents which are to be considered for assessment of dearnessallowance and gain the components which shall be considered forassessment of house rent allowance. He would, therefore, submit thatthough the special allowance would not be a component to be added for3/8
Legal Reasoning
WP 175 21.odtextending superannuation benefits, for the purpose of dearness allowance itis agreed that the special allowance would be a component for assessing thepay. He would, therefore, submit that since the petitioners would begoverned by the regulations of the parents bank for the purpose ofpensionary benefits, at the most in tune with the bipartite settlement, theMinistry of Finance could have simply stipulated that such bank employees,who are sent on deputations to DRTs and DRATs would not be entitled toclaim inclusion of special allowance for the purpose of extendingsuperannuation monetary benefits. However, it apparently also mentionsthat special allowance is not pay. The direction is arbitrary.7.Mr. Deshmukh would submit that pursuant to the impugnedcommunication the petitioners have been put to loss in the aggregate salarythey are being paid while on deputation with the DRTs and DRATs, whichcould not have been the purport of the scheme/understanding whereby thebank employees were requisitioned to man the DRTs and DRATs.8.The learned advocate Mr. Deve referring to the affidavit in reply ofrespondent nos. 1 and 2 and surrejoinder filed by them submits that thepetitioners are confusing between ‘special pay’ and ‘special allowance’.Special allowance was never to be a part of ‘pay’. Even the bipartitesettlement deals with ‘special allowance’ separately and not as a ‘pay’ but asits component. It is an attempt to mislead the Court. However, he wouldnot dispute that the employees of the banks like the petitioners are entitledto have a special allowance as per the settlement. He would submit that theimpugned communication is mere reiteration or a clarification and does notseek to change the extant scenario when the petitioners were drawn forserving with the DRTs and DRATs. He would submit that special allowancewas never meant to be merged with basic salary and no fault can be foundwith the impugned communication. Mr. Deve would, lastly, submit that it isonly pursuant to the option exercised by the petitioners, on being showntheir readiness to be sent on deputation that their respective banks have4/8 WP 175 21.odtrelieved them and being on tenure posts they are not entitled to claimfixation of their pay by adding such special allowance to the basic pay.9.We have considered the rival submissions and perused the papers.10.Admittedly, pursuant to the vacancy circular dated 13.06.2017, issuedby the Ministry of Finance that the petitioners had opted and were sent ondeputation to the DRTs and DRATs. However, admittedly, while fixing theirpay the special allowance receivable by them has not been added to thebasic pay and the action is being justified by referring to the impugned letterdated 01.10.2020 (Exh. D).11.It is necessary to note that by a letter/communication dated24.11.2009, issued by the Ministry of Finance (Exh. B), all the PresidingOfficers of the DRTs and Registrars of DRATs were informed as under:“I am directed to say that the Bank Officers have beenappointed on deputation basis to the DRTs and DRATs andthey are being paid the salary as applicable to the Officersof the DRTs and DRATs on exercising their option for thesame. In the Public Sector Banks the basic pay, stagnationincrement, professional qualification pay, fixed personalpay etc. qualify for the purpose of DA, HRA andsuperannuation benefits. This Department has receivedsome references that certain pay components likeprofessional qualification pay, fixed personal pay etc. paidto bank officers by their parent offices are not beingconsidered for the purpose of pay fixation in DRTs/DRATs.Accordingly, the matter was taken up with IFU ofMinistry of Finance and it has been decided that whiledetermining pay in the bank, all pay on which DA wasbeing paid should be treated as basic pay for the purpose offixation of pay in the DRT. (For this purpose a Last Paycertificate giving breakup of pay and allowances drawn atthe time of deputation should be obtained from therespective bank and the bank should certify that DA wasbeing paid on the basic of pay, stagnation increment etc.)”5/8 WP 175 21.odt12.In our considered view, this communication/letter expressly directedhow the fixation of pay in the DRTs should be done in respect of bankofficers, who were appointed on deputation to the DRTs and DRATs,expressly mentioning that all the stagnation increments etc. which werebeing added to the basic pay for calculation of the dearness allowance in therespective banks were to be considered for fixation of pay. When, admittedly,the settlement expressly mentions that the special allowance inter aliawould be added to the basic pay for the purpose of calculation of dearnessallowance, one finds substance in the submission of the learned advocateMr. Deshmukh that the petitioners would not have opted/consented forbeing sent on deputation to the DRTs but for such incentive, which theywere promised, else, they would have been happy to continue with theirrespective banks.13.It seems that the impugned communication dated 01.10.2020 hasbeen issued under misconception of the facts and would be ratherinconsistent with the communication dated 24.11.2009. It seeks to changethe conditions of the employment adversely after the petitioners opted fordeputation and joined DRTs. The impugned communication/letter reads asunder :“3.A clarification was also issued vide this officeletter No.A-19014/11/2009-DRT dated 24th November2009 regarding admissibility of pay components likeprofessional qualification pay, fixed personal pay etc. paidto Bank Officers by their parent Banks. It was clarified thatall ‘Pay’ on which DA was being paid should be treated asBasic Pay for the purpose of fixation of pay.4.Instances have come to the notice of thisDepartment that some of the DRTs/DRATs are allowing thecomponent of “Special Allowance” drawn by Bank Officers6/8 WP 175 21.odtin their parent Banks for pay fixation purpose in DRT. Suchfixation where the component of “Special Allowance” hasbeen incorrectly taken into account while determining thepay in the Central Government pay structure in some of theDRTs has also come under the scrutiny of Audit. As such,“Special Allowance” is not “Pay” and is also not to betreated as “Pay” for the purpose of determining Pension(including NPS, PF, and Gratuity) in the parent Banks asper the Bipartite Settlement dated 25th May, 2015.”14.Obviously, to the extent that special allowance has to be excluded forthe purpose of determination of pension and other post retiral monetarybenefits, direction is in tune with the settlement between Indian BankAssociation and the union of the employees. Therefore, to this extent onecannot take exception, as has been rightly put forth by Mr. Deshmukh.However, to the extent it declares and directs that special allowance shallnot be a pay even for the purpose of fixation and that too by referring tocommunication dated 24.11.2009 clearly demonstrates arbitrariness or lackof understanding.15.In light of above, the impugned communication to the extent it directspay fixation to be done excluding the special allowance being received bythe employees of banks which are posted in the DRTs and DRATs ondeputation being arbitrary and inconsistent with the communication dated24.11.2009 (Exh. B), the former is liable to be struck down to that extent. 16.However, the prayer clause ‘B’ of the petition does not seem to bearticulated appropriately. It reads as under:“(b)By issuing appropriate writ or direction, thedirections in the letter dated 1.10.2020 which states that“Special Allowance” is not “Pay” and is not to be treated as“Pay” for the purpose of determining Pension (including7/8
Decision
WP 175 21.odtNPS, PF and Gratuity) in the parent Banks as per theBipartite Settlement dated 25.5.2015, be quashed and setaside, being contrary to the Bipartite Settlement.”The whole argument of Mr. Deshmukh on behalf of the petitionerswas merely directed against an attempt to exclude special allowance whilemaking pay fixation of the petitioners which the respondents are seeking tojustify in their affidavit in reply and the surrejoinder. As is mentioned hereinabove, exclusion of special allowance for the purpose of determination ofpension including NPS, PF and gratuity is a part of the bipartite settlementdated 25.05.2015, and even the subsequent settlements which fact even Mr.Deshmukh conceded.17.The writ petition is allowed partly.18.The directions in the letter dated 01.10.2020 to the extent it directsthe special allowance to be excluded for pay fixation is quashed and setaside. It is declared that the petitioners are entitled to fixation of their payon their respective post on deputation with respondent no.3-DRT, inaccordance with the communication dated 24.11.2009.19.Pending Civil Application is disposed of. ( PRAFULLA S. KHUBALKAR J.) (MANGESH S. PATIL, J.)mkd/-8/8