Negatives in the 7th Central Pay Commission Report – a detailed analysis

1. OROP: A Myth?

Has one rank, one pension (OROP) been really introduced as claimed by the Chairman of the 7^th CPC on TV channels? The answer is no. The formulation recommended by the 7^th CPC is not OROP but it gives due weightage to the past increments. To that extent, it is welcome. It departs from the past practice of the CPCs where due weightage was never given to the past increments and bunching used to be done (for serving officers) to determine the revised pay. In the case of pre-CPC pensioners, there was absolutely no credit given to the past increments and all such retirees were fixed at the bottom of the revised pay. This practice unjustifiably equated those with a longer tenure in the last rank who had earned a higher number of increments with those who had earned less or none. The formulation recommended by the 7^th CPC is in line with judicial verdicts. It brings about parity between the current retirees and the past pensioners who had earned the same number of increments in the last pay scale at the time of retirement. But it will not truly mean OROP as it will still not bring equity by way of parity. Pensioners will still not get the same pension in the same rank which will be decided by the last pay drawn in case of the current retirees.

SOLUTION:

To make the system really OROP compliant, a radical change in the concept of pay scales is required. We must recognise the real culprit behind the disparity: the running pay scales. If all the ranks have fixed pay, at whatever level, the question of different pensions for same ranks will not arise. The half yearly revision of Dearness Allowance fully takes care of the inflation. If this formulation does not find favour with the Trade Unions, it can be adopted for All India Services, Central Services and other gazetted posts. It will be in line with the law settled by the Supreme Court in D.S.Nakra and SPS Vains cases (explained in later paras) as it will solve two perpetual problems faced by pensioners:-

i)      Fixed pay will mean the same pension for the same rank.

ii)     It will remove the legal challenge of seniors drawing less pension than juniors.

2. ILLOGICAL  NUMBER  OF  INCREMENTS

The number of increments has been increased for DGPs from 1 to 3 and for ADGs from 6 to 7, without offering any justification. For DGPs, the 4^th CPC had 4 increments, 5^th CPC reduced it to 3 and the 6^th CPC further reduced the number to 2 which was further brought down to 1 on re-fixation. The 7^th CPC has dragged us back by two decades to 3 increments. In respect of other ranks also, the Commission has proposed an unrealistic number of increments. For AIS/CS for the ranks equivalent to IG and below, the position is as under:-

Still lower ranks have 39 increments! The suggestion of 38 increments for an SP in the Sr. Time Scale exceeds the average length of total service of an Officer. It is meaningless and ridiculous when the normal tenure of an SP in the Senior Time Scale is only about 5 years. It is queer to note that the SP’s pay scale has been stretched so much that it overlaps the 4 higher ranks! Consequently, pre-CPC pensioners will continue to draw less pension than post-CPC retirees, as explained in para 5 ahead.

In the case of HAG+ scale of DGPs in 6^th CPC, though the applicable scale was Rs.75,500-80,000 containing 2 increments, it was revised to Rs.77,765-80,000, containing only 1 increment vide Office Memorandum F.No.38/37/08-P&PW(A) dated 28.1.13 of DoP&PW. This was necessitated by the anomaly that had arisen by merger of an inferior scale of Rs.22,400-600-26,000 (S-31) with the DGP’s superior scale of Rs.24,050-650-26,000 (S-32) to form a common HAG+ scale of Rs.75,500-80,000 after the 6^th CPC. Vide the referred OM, the entry level of the old scale holders of Rs.22,400-26,000 (S-31) was fixed at Rs.75,500 and that of the old scale holders of Rs.24,050-650-26,000 (S-32) (DGPs) was re-fixed at Rs.77,765. In effect, the pay scale of DGPs was recast as Rs.77,765 – Rs.80,000, with only one increment to reach the top of the scale. The 7^th CPC has given no reason to do away with this distinction between S-31 & S-32 scales. DGP is the last attainable rank in the IPS. It comes at the fag end of the career, generally leaving a short tenure before retirement which may not qualify for any increment for most of the officers.

SOLUTION:

Have only as many number of increments as the normal tenure of an officer at that stage is. If someone stagnates, stagnation increments can be sanctioned to him like it used to be done in the distant past. Such a step will solve the problem of overlapping of scales also, with consequential compliance of the Supreme Court ruling that seniors will not draw less pension than juniors.

3. PENSION FIXATION FLAWED

As mentioned earlier, DGPs, who retired between 1.1.06 and 31.12.15, had only 1 increment in the scale Rs.77,765 – 80,000. The 7^th CPC has recommended a replacement scale with 3 increments. This would create a problem in revision of pay/pension as the old 1 increment can not be related to the new 3 increments. This would create a problem for the serving officers also as they would require 3 years to reach the top of the scale. Similar problem will arise in the case of other ranks also where the number of existing and proposed increments differ.

SOLUTION:

The past increments may be applied to the revised scales in the reverse order, i.e. from top downwards for fixation of revised pay/pension. If not, the number of years one served/ stagnated in that rank may be treated as the virtual number of increments and given full weightage.

4. DGP’s PAY SCALE DOWNGRADED

Rank Singled Out

It is for the first time in the history of the Central Pay Commissions that DGP’s pay scale has been downgraded by the 7^th CPC. In the past, the top of the running scale of DGPs always touched the Apex Pay, e.g. Rs.7600-8000, Rs.24050-26000 and Rs.75500/77765-80000 all touched the Apex Pay of Rs.8000, Rs.26000 and Rs.80000 respectively in the 4^th, 5^th and 6^th CPCs. The 7^th CPC’s HAG+ pay scale of Rs.205400 – 224400 with 3 increments of 3% each ends Rs.600 below the Apex Pay of Rs.225000. Though only a minor difference of Rs.600, it downgrades the status of a DGP vis-à-vis the DGP(HoPF). Surprisingly, this step-motherly treatment has been given only to the DGP rank. All other pay scales overlap the higher ranks by a wide margin as shown in Sl. 2 above and Sl. 5 below. 

SOLUTION:

(i) Treat all DGPs as equal as per law settled by the Supreme Court. The class differentiation between the State DGPs started in 2008, with the relevant IPS (Pay) Rule amended on 27.9.2008 as under:-

The Apex Pay meant for the DGP(HoPF), is clearly and visibly a step higher than the other DGPs and they can not be termed as equal. The use of the word “upgradation” in the above amendment clearly shows that DGP(HoPF) is a promoted post. As such, rules of promotion have to be followed for selecting the DGP(HoPF) and no DGP can be superseded without departmental proceedings. Similarly, DGP(HoPF) can not be downgraded/demoted to the HAG+ scale without departmental proceedings. Under the current practice of selecting DGP(HoPF) from a panel of 3 names formulated by the UPSC, often times, a junior is appointed as DGP(HoPF). This is tantamount to supersession of one or two seniors without cause, unless they are also accorded the Apex pay. Whenever there is a change in the power structure in the State Government, very often, the incumbent DGP(HoPF) is removed to another post, reducing his scale from Apex to HAG+. This amounts to demotion which is not permissible without disciplinary proceedings. Such lateral movements confirm that, in reality, the Govt treats all the posts of DGP as equal. But they can not be treated as equal without equating their pay scales. This discrimination has already led to a plethora of court cases all over India. The only solution to this tangle is to equate the pay scales of all the DGPs, and that can not be done without granting Apex Scale to all the DGPs. This will save the Govt from unwanted litigation. As mentioned earlier, equalisation will hardly cast any financial burden on the exchequer.

(ii) The 7^th CPC has recommended that if a DGP(HoPF)  is removed from that post, his pay, i.e. the apex pay, should be protected. It is in line with judicial verdicts. On similar lines, as per NBR (Next Below Rule), if any junior DGP is made the HoPF, all his seniors are entitled to get the equivalent pay, i.e. the Apex Pay. All the more reason why the pay of all the DGPs should be equalised.

5. SENIORS DRAW LESS PENSION THAN JUNIORS

Illegality Perpetuated

The class discrimination has been aggravated by the 7^th CPC despite Supreme Court rulings to the contrary. The juniors retiring after 1.1.16 will continue to draw more pension than pre-1.1.16 retiree seniors because of overlapping of scales and an increase in the number of increments. Consequently, a pre-2016 retiree DGP, retiring at the entry level, will draw less pension than a post-2016 retiree senior DIG as shown in the table below:-

Stretching it further, the position in respect of SPs is as under:-

Although the grant of 38 increments to an SP in the Senior Time Scale is meaningless, in actuality, his promotional pay may get fixed high in the scale by virtue of his higher pay in the lower rank. Thus, theoretically speaking, a pre-2016 retiree DGP, retiring at the entry level, will draw less pension than a post-2016 retiree Senior SP. Similar will be the position in case of other ranks.

SOLUTION:

i)      As suggested earlier, cutting down the number of increments and ensuring that no pay scale overlaps the next higher scale.

ii)     Make a rule that a senior will not draw less pension than the highest pension admissible to a junior. This suggestion is in line with the Next Below Rule and the Supreme Court judgements in: (i) D.S. Nakara & Others Vs. Union of India and (ii) Union of India Vs. Major General (Rtd) SPS Vains. The legal position is explained in subsequent paras.

iii)   Also, ensure that revised pension will not be less than the equivalent of the last pay drawn. This rule already exists for the current retirees but not for the pre-CPC retirees.

6. PRE – 2006  RETIREE  DGPs

Apex Pay for DGPs(HoPF) was introduced w.e.f. 27.9.08. After this, the biggest injustice has been caused to the pre-27.9.08 retiree DGPs, both by the 6^th CPC and the 7^th CPC. They have been denied the Apex Pension even if they had served as Heads of Police Force. As per law, explained subsequently, all pre-27.9.08 retiree DGPs are entitled to Apex Pension which should be granted to them.

7. MULTIPLICATION INDEX

     Arbitrary & Discriminatory

Despite initially projecting to have a uniform multiplication index of 2.57, the 7^th CPC has changed it inexplicably and arbitrarily to 2.62, 2.67, 2.72, 2.78 and 2.81 for higher levels/ranks. This has introduced a wide disparity and discrimination in the scales. In the interest of equity, the index should be straightened to a uniform figure for all.

8. COMMUTATION OF PENSION

Inspite of all the arithmetics and legal points favouring reduction in the restoration period of commuted pension, the  7^th CPC has refused to tinker with the 15 year recovery period, without offering any explanation. The 5^th CPC had recommended reduction of the period to 12 years, giving solid reasons. The DoP&PW had also recommended reduction to 13 years. FORIPSO had also given a detailed and convincing Power Point Presentation before the Commission which has not even been discussed in the Report. The Govt should take a view now.

LEGAL ANALYSIS

1) Last Pay and Not Last Pay Scale Relevant for Pension Fixation:-

As per Rule 18 of the All India Services (DCRB) Rules, 1958, the pension of an officer is fixed on his retirement on the basis of the average of the pay drawn during the last 10 months or the last pay drawn, whichever is more beneficial to the retiree. The pension is thus fixed only on the basis of the last pay drawn and not on the basis of the last pay scale drawn.Obviously, the pay scale from which this pay is drawn has no relevance for fixation of pension. Pension once sanctioned can not be revised subsequently to the disadvantage of the pensioner except as a punishment or to correct a clerical error in calculation of the original pension.

2) Illegal Classification of Pensioners:-

Pensioners have been illegally divided into two classes: pre-2016 retirees and post-2016 retirees. This is contrary to the crystal clear Orders of the Supreme Court in: (i) D.S. Nakara & Others Vs. Union of India and (ii) Union of India Vs. Major General (Rtd) SPS Vains (these cases are being discussed in subsequent paras). To elaborate, if officer A retired from the pre-revised running HAG+ scale of Rs.75500/77765-80000 and his last pay drawn was Rs.80,000, then, as per rule, his pension was fixed at Rs.40,000 p.m. Likewise, if officer B retired from the pre-revised Apex Pay of Rs.80,000 (Fixed), then also his pension was fixed at an identical figure of Rs.40,000 p.m. This created perfect equality between the two types of pensioners, A and B. Thus, the pay scale was and is irrelevant for fixation of initial pension at the time of retirement and it is only the last pay drawn that matters. This clearly implies that retired officers receiving the same basic pension (say, for example, Rs.40,000 p.m.) belong to the same class and the principle of equality applies to them. Their pension revision to Rs.1,02,700 / 1,05,800 / 1,08,950 / 1,12,200 in the case of A and to Rs.1,12,500 p.m. in the case of B after the 7^th Pay Commission amounts to creation of two different classes of pensioners who were identical and belonged to the same class at the time of retirement. This contemptuously goes against the above cited SC Orders, leading to an unwarranted disadvantage to A, in clear and patent violation of the principle of natural justice and the fundamental rights guaranteed under Article 14 (equality before law). The pay revision notification certifies that its implementation would not adversely affect any pensioner but, in reality, it does. Resultantly, equals have been made unequals and vice versa. The Doctrine of Intelligible differentia having nexus with the object to be achieved, as required for a legally permissible classification under Article 14 of the Constitution fails here. A fundamental principle of law settled in several cases is that Article 14 of the Constitution forbids class legislation. “Pay Scale” may be relevant for the serving officers, but it is irrelevant for pensioners who have already retired and for whom the last “Pay” drawn is the only relevant issue and criterion to determine their pension. Keeping the maximum of HAG+ scale nominally below Apex pay will lead to violation of Article 14 when the pension of pre-2016 retirees at the maximum of the pre revised scales is to be fixed in the post-2016 scale. While pre-2016 retirees in Apex pay will get revised pension in the new Apex pay, DGPs drawing identical pre-revised pension will now draw less pension because the new HAG+ scale does not touch the new Apex pay. This will lead to a plethora of fresh litigation.

3) Violation of Rule 9(1) & (2) of the IPS (Pay) Rules, 1954:-

The ex-cadre post of DGP, from which a pensioner had retired, is required to be declared equivalent in status and responsibility to the cadre post of DGP under Rule 9(1) & (2) of IPS (Pay) Rules, 1954. This rule goes as under:-

Thus, there is an umbilical cord relationship between the retiree ex-cadre post and the cadre post of DGP. This clearly implies that all the pre-27.9.08 retiree DGPs are equal and are entitled to the same pay/pension benefits and privileges which the then DGP(HoPF) is entitled to. In turn, the then DGP(HoPF) is entitled to the same pay/pension benefits as today’s DGP(HoPF) by virtue of ‘legal fiction’ propounded by the SC in S.S.Chahal’s case (cited later). These are mandatory and statutory provisions which have an unbreachable sanctity. Clearly, the pension of all DGs w.e.f. 27.9.08 is linked to whatever is the entitlement of the DGP(HoPF), i.e. Rs.40,000 as per the Apex Pay of Rs.80,000 (pre-7^th CPC).

It is to be noted that the word “Status” in the above rule is defined solely by the Pay Scale. The following facts clearly point towards it:-

(i)    The ‘Order of Precedence’ is dictated by the Pay Scale and it defines the ‘Status’ of the person in the list;

(ii)   In respect of official residential accomodation, Apex Scale officers are entitled to the highest category C-1 type houses in Delhi as a matter of right on first priority basis. No such priority is given to the HAG+ officers who are placed in the general waiting list;

(iii)  During international official tours, Apex Scale officers are entitled to fly First Class while HAG+ holders can fly only Business class;

(iv)  CPOs like CRPF and BSF are headed by a DG in the Apex Scale. Under him are a number of DGs designated as special DGs to distinguish them from the chief DG. They are placed in the HAG+ scale. They are directly subordinate to the chief DG whose ‘Status’ is higher.

4) Retirement is from Post, not from Pay Scale:-

No one is ever appointed to a pay scale but to a post. Pension, having been linked to the post from which a person retired, has to change every time the pay scale of the post is revised. As explained in the previous para, in view of the mandatory provision of Rule 9(2) of IPS (Pay) Rules, 1954, all DGPs’ pension entitlement is for Rs.40,000 (pre-7^th CPC) because of its direct linkage to the post of the DGP(HoPF).

5) Prejudicially Affecting Retrospective Effect Not Permissible:-

Section 3(1A) of the All India Services Act, 1951 deals with the rule making power of the Government and requires that “…. no retrospective effect shall be given to any rule so as to prejudicially affect the interests of any person to whom such rule may be applicable.” The All India Services (DCRB) Rules, 1958 have been framed under the aforesaid rule-making power under the All India Services Act. Therefore, it is not permissible to prejudicially affect the interests of the old pensioners by a subsequent provision that came into effect after their retirement.

SUPREME  COURT  JUDGEMENTS  &  CONTEMPT  OF  COURT

1. D.S. Nakara & Others Vs. Union of India, (1983) 1 SCC 305 (p 323), AIR 1983 SC 130:-

In fixation of pension w.e.f. 1.1.16, pre-2016 retiree DGPs are being discriminated against vis-à-vis the later retirees who are similarly placed as explained earlier. They have been treated as belonging to an inferior class different from them. This classification blatantly goes against the Apex Court Order in this Case which amounts to contempt of court. The highlights of the SC Judgement are:-

2. Union of India Vs. Major General (Rtd) SPS Vains, (2008) 9 SCC 125:-

In this case, the issue was whether there could be a disparity in payment of pension between officers of the same rank who had retired prior to the introduction of the revised pay scales and those who retired thereafter. The dispute arose due to disparity in determination of pension of pre-1.1.96 and post-1.1.96 retirees who retired from Defence services as Major General or equivalent. The Pension of the pre-1.1.96 retiree Major Generals was fixed lower than the post-1.1.96 retiree Major Generals. The Court held that the date of retirement was immaterial. The principle laid down by the Supreme Court is squarely applicable to all services. The highlights of the SC Order are:-

By this judgement, a principle has been laid down and law settled that a senior shall not draw less pension than a junior.

3. S.S.Chahal’s Case: SLP (Civil) Nos. 27166-27168/2008:

State of Himachal Pradesh Vs. Swaran Singh Chahal IFS (Rtd) & Others [From the Judgement and Order dated 26/03/2008 in   CWP Nos. 109/2001, 110/2001 & 978/2000 of The High Court of H.P. at Shimla]. The concept of ‘Legal Fiction’ has been propounded/confirmed by the Supreme Court of India in this case in its order passed on 13.9.10. By legal fiction, an IPS officer retiring from an ex-cadre post in the rank of DGP, declared equivalent in status and responsibility to the post of DGP(HoPF) under Rule 9(1) & (2) of IPS (Pay) Rules, 1954, would be deemed to have retired from the post of DGP(HoPF). It has been clearly laid down that where designations and pay scales are improved without any change in responsibilities of the office held, pension has to be revised in the scale applicable. This rebuts GOI’s stand that pre-27.9.08 HoPF retirees can’t be treated on par with post-27.9.08 DGPs(HoPF). All pre-2016 retiree DGPs, for all intents and purposes by legal fiction, are deemed to have retired from the post of DGP(HoPF) and are entitled to be sanctioned Apex Pension accordingly.