Saturday, November 1, 2014



CENTRAL ADMINISTRATIVE TRIBUNAL  ERNAKULAM BENCH
Original Application No.962 of 2013             Tuesday, this the 21st day of October, 2014.
CORAM:
HON’BLE Mr. U.SARATHCHANDRAN, JUDICIAL MEMBER
AILRSA & 2 others.                                                                                         ......Applicant
Versus
Union of India & 4 others                                                                                 .......Respondents
            This Original Application having been heard on 23.09.2014, the Tribunal on 21.10.2014 delivered the following:-

O R D E R
            MA for joining together of the applicants with diary No.6402 is allowed.
2.         The short question involved in this OA is whether computation of DA for the purpose of calculating emoluments while fixing the gratuity payable to the running staff in the Railways on their retirement or death should be on the basic pay plus the pay element of 30% of basic pay as running allowance or on the basis of pay plus 55% of the pay element of the running staff.
3.         Applicants are aggrieved by the stand taken by the respondents Railway that DA is admissible on the sum of basic pay plus 30% of the basic pay reckoned as running allowance.  According to applicants as per the provisions of Rule 49 of the Railway Services (Pension) Rules, 1993 (in short Pension Rules), Running allowance rules and as per the extant Railway Board instructions, they are entitled to get dearness allowance calculated on the basic pay plus 50% of the basic pay, as they were running staff entitled to running allowance. 
4.         “Running Allowance” is defined in the Running allowance rules:
“902.2(i)…………………………(ii)……………………………(iii)…………………………… (iv)………………………………………………..
(v) “Running Allowance” means an allowance ordinarily granted to running staff in terms of and at the rates specified in these rules, and/or modified by the Central Government in the Ministry of Railways (Railway Board), for the performance of duties directly connected with charge of moving trains and includes a “Kilometrage Allowance” and “Allowance in lieu of kilometrage” but excludes special compensatory allowances.
(vi)……………………………
5.         The running allowance is a special allowance granted to ‘Running staff’ who includes Loco Drivers, Motor Man, Rail Motor Drivers, Shunters, Fireman, Electric Assistant, Electric Loco and Diesel Assistant/Drivers, Assistants on Diesel Locos, Guards and Assistant Guards.  This allowance is payable only to the aforesaid group of Railway employees who are generally known as running staff performing running duties i.e. duties directly connected with the movement of trains and performed by running staff while employed in moving trains or engines including shunting engines.  It is not in dispute that applicants Nos.2 & 3 belonged to the category of running staff entitled to get the prescribed running allowance.
6.         Entitlement to retirement gratuity or death gratuity is governed by Rule 70 of the Pension Rules.  The relevant portion of rule 70 of the Pension rules reads as follows:
            “70.  Retirement gratuity or death gratuity
(1)(a)   In the case of a railway servant, who has completed five years’ qualifying service and has become eligible of service gratuity or pension under rule 69, shall, on his retirement, be granted retirement gratuity equal to one-fourth of his emolument s for each completed six monthly period of qualifying service subject to a maximum of sixteen and one-half times the emoluments and there shall be no ceiling on reckonable emoluments for calculating the gratuity.
(b)       If a railway servant dies while in service, the amount of death gratuity shall be paid to the family in the manner indicated in the Table below:-
TABLE
Length of qualifying service
Rate of gratuity
(i)                Less than one year
2 times of emoluments
(ii)              One year or more but less than 5 years
6 times of emoluments
(iii)            5 years or more but less than 20 years
12 times of emoluments
(iv)             20 years or more
Half of emoluments for every completed six monthly period of qualifying service subject to maximum of thirty-three times emoluments provided that the amount of death gratuity shall in no case, exceed one lakh rupees.

Provided that the amount of retirement gratuity or death gratuity payable under this rule shall in no case, exceed rupees ten lakh (Authority: Railway Board’s letter No.2011/F(E)III/1(1)9 dated 23.09.13)
Provided further that the amount of retirement or death gratuity is finally calculated shall be rounded to the next higher rupees.
(2) ………………………..
(3)       The emoluments for the purpose of gratuity admissible under this rule shall be reckoned in accordance with rule 49;
Provided that if the emoluments of a railway servant have been reduced during the Last ten months of his service otherwise than as a penalty the average emoluments as referred to in the 50 shall be treated as emoluments.
Provided further that the dearness allowance admissible on the date of retirement or death, as the case may be, shall also be treated as emoluments for the purpose of this rule (Authority: Railway Board’s letter No.2011/F(E)III/1(1)9 dated 23.09.2013)
(4)………………………………
            (Italics supplied)
7.         It is clear from the afore-quoted provision relating to gratuity of the Railway servants that emoluments for the purpose of gratuity have to be reckoned in accordance with Rule 49 of the Pension Rules and that DA admissible also should be added to the emoluments.  The term emoluments is defined under Rule 49 of the Pension rules.  The provisions in Rule 49 relevant in the present OA are extracted below:-
“49.  Emoluments:   The expression – (a) “emoluments”, for the purpose of calculating various retirement and death benefits, means the basic pay as defined in clause (i) of rule 1303 of the Code which a railway servant was receiving immediately before his retirement or on the date of his death.
Provided that the stagnation increment shall be treated as emolument for calculation of retirement benefits;
(b) “pay” in these rules means the pay in the revised scales under the Railway Services (revised pay) Rules, 1986;
Provided that ‘pay element’ of Running Staff shall also include fifty-five per centum of the basic pay for reckoning emoluments.
…………………………………………….”
8.         For the purpose of Railway, pay of a Railway servant is defined in rule 1303 of IREC [FR 9(21)(a)].  It reads:-
“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 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.”

9.         We have seen that Rule 49 of the Pension Rules is the rule governing the quantum of emoluments for the purpose of various retirement and death benefits.  The gratuity also is a retirement/death benefit due to a Railway servant.  Therefore, for calculating the retirement/death gratuity under the provisions of Rule 70, ‘emoluments’ mean ‘basic pay’ as defined in Rule 1303 of IREC (quoted above) and in the case of running staff for reckoning emoluments the “pay element” shall also include 55% of basic pay.  Thus it can be seen that for running staff, emoluments to be calculated for fixing retirement/death gratuity takes in both basic pay as defined in rule 1303 of the IREC plus 55 percentum of such basic pay.  Railway Board letter No.2011/F(E) III/1 (1) 9 dated 23.09.2013 (quoted below the rule 70 of the Pension rules extracted in paragraph 6 of this order) authorities to treat the dearness allowance admissible on the date of retirement/death as emoluments.  Therefore, it goes without saying that the dearness allowance so payable shall have to be calculated on the basic pay which the Railway servant was receiving immediately before his retirement /on the date of his death.
10.        Paragraph 924 of the Indian Railway Establishment Manual, Volume-I (1989 edition) pertains to running allowance of running staff.  It reads:
“924.  Reckoning of Running Allowance as pay:
(i)                30% of the basic pay of running staff shall be reckoned as pay for the following purposes:-
(a)   Entitlement of Passes and P.T.Os.
(b)   Medical attendance and treatment.
(c)   Educational assistance.
(d)  Fixation of pay in stationary posts.
(e)   Compensatory (City) Allowance.
(f)    House Rent Allowance.
(g)   Entitlement to quarter
(h)  Recovery of rent for quarters.
(i)    Dearness Allowance/ Addl. Dearness Allowance.
(j)    Overtime Allowance.
(k)  Leave Salary.
(ii)              For the purpose of educational assistance, 30% of the basic pay shall be reckoned as pay for determining the eligibility for all the scheme of assistance given to Railway employees for the education of their children/ward viz. Reimbursement of tution fees, children’s educational assistance and subsidised hostels.
(iii)            For the purpose of retirement benefits, 55% of basic pay shall be taken into account in the case of running staff retired/retiring on or after 1-4-1979, 55% of the basic pay shall also be reckoned as pay for the purposes of recovery of subscription towards Provident Fund.
…………………………
………………………..
NOTE- (a)    While 30% of the basic pay of running staff will be taken into account for the purpose of determining entitlement of Passes and PTOs, the members of the running staff who were already entitled to a higher class of Passes/PTOs on regular basis as on 31-7-1981, shall continue to be eligible to such Passes/PTOs.
(b)   For the pupose of retirement benefits, 55% of basic pay shall count as pay for calculating pension and DCRG as well as for special contribution to PF Rules.
(c)     While determining the emoluments for the purpose of calculation of retirement benefits, Dearness Pay as admissible from time to time, shall be calculated on basis of pay plus 30% thereof in the case of running staff retired/retiring on or after 1-8-1981.”

11.        The afore quoted provisions relating to running allowance rules clearly show that for the purpose of retirement benefits 55% of basic pay is reckoned as running allowances shall be counted as pay for calculation of pension and DCRG.
12.        It appears that the contention of respondents that the dearness allowance is to be treated as emoluments for the purpose of gratuity (see the italicized portion of Rule 70 extracted above in paragraph 6 of this order) shall be calculated on the basis of pay plus 30% thereof, in the light of note (c) to Rule 924 of the running allowance rules quoted above.  This Tribunal is of the view that the respondents are taking such a view on an erroneous premise that the Dearness Pay mentioned in note (c) to Rule 924 of the Running Allowance rules is the same as Dearness Allowances applicable to the pay inclusive of running allowance.  The Railway Board letter No.2011/F(E) III/1(1)9 dated 23.9.2013 (quoted above in rule 70 of the Pension rules at paragraph 6 of this order) refers to the Dearness allowance admissible on the date of retirement/death of the running staff.  The emoluments as defined under Rule 49 of the Pension rules in the case of running staff includes 55% of the basic pay.
13.        Since the ‘emoluments’ of the Railway servant before his retirement/on the date of his death is the amount to be reckoned for the purpose of pensionary benefits, and as the emoluments takes in 55 percentage of the basic pay also, this Tribunal is of the view that the dearness allowance admissible to him as per the aforesaid Railway Board letter dated 23.9.2013 shall have to be paid on the emoluments calculated as per the provisions of Rule 49 of the Pension Rules.  In the case of running staff inclusion of 55% of basic pay in their pay as emoluments under Rule 49 being a fictional inclusion.  Since 55% basic pay for the retiring running staff is treated as a running allowance payable to them as part of their emoluments on the day prior to retirement, as per the note (b) to Rule 94 of Running Allowance Rules (see para. 10 above), this Tribunal does not see any reason to hold that they are not entitled to dearness allowance on the pay plus 55% of the basic pay while calculating their emoluments for the purpose of DCRG.
14.        In the result it is hereby declared that the action on the part of the respondents in arriving at the emoluments for calculating the retirement gratuity adopting the formula of basic pay plus 55% of the basic pay plus dearness relief admissible on basic pay plus 30% of the basic pay is arbitrary, discriminatory and against the law.  It is further declared that the applicants are entitled to have their retirement gratuity re-calculated by arriving at the emoluments by adding basic pay plus 55% of basic pay and dearness allowance admissible on the sum so arrived at.
15.        Respondent Railway shall pay interest @8.5% p.a. on the delayed payment on the difference in the retirement gratuity to be calculated as per the above declaration, from the respective date of retirement of applicants till actual payment.
16.        No order as to costs.
Sd/-
(U.SARATHCHANDRAN)
JUDICIAL MEMBER

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