R V Raveendran, J.
These appeals by
special leave are filed against the judgment dated 10.7.1997 in Writ
Appeal No.804 of 1992 and the order dated 10.11.1997 in Review Petition
No.299/1997 passed by a Division Bench of the Kerala High Court.
2. The 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 in the
year 1972. He retired on 31.7.1980 with 23 years of pension able service
which included 8 years of service as a Judge of the High Court. At the
time of his retirement, the appellant was in receipt of a total
emolument of Rs.4,237/- comprising Basic Pay of Rs.3,500/-, Dearness
Allowance of Rs.437/- and Special Allowance of Rs.300/-.
3. The pension payable to High Court
Judges is governed by Chapter III of the High Court Judges (Conditions
of Service) Act, 1954 (for short 'the Act'). Clause (b) of sub-section
(1) of section 15 provides that every Judge who was not a member of the
Indian Civil Service but has held any other pensionable post under the
Union or a State, shall, on his retirement, be paid a pension in
accordance with the scale and provisions in Part III of the First
Schedule. The proviso thereto and sub-section (2) require such Judge to
exercise certain options. The appellant was governed by Part III of the
First Schedule to the Act as he did not opt for pension under Part I of
that Schedule. Part III of the First Schedule is extracted below :
"1. The provisions of this Part
apply to a Judge who has held any pensionable post under the Union or a
State (but is not a member of the Indian Civil Service) and who has not
elected to receive the pension payable under Part I.
2. The pension payable to such a
Judge shall be (a) the pension to which he is entitled under the
ordinary rules of his service if he had not been appointed a Judge, his
service as a Judge being treated as service therein for the purpose of
calculating that pension; and
(b) a special additional pension of
Rs.1,600 per annum in respect of each completed year of service for
pension but in no case such additional pension together with the
additional or special pension, if any, to which he is entitled under the
ordinary rules of his service, shall exceed Rs.8,000 per annum.
Provided that the pension under
clause (a) and the additional pension under clause (b) together shall in
no case exceed Rs.54,000 per annum in the case of a Chief Justice and
Rs.48,000 per annum in the case of any other Judge."
(Note : The special additional
pension was Rs.700/- per annum and the ceiling was Rs.3500/- per annum
under clause (b) and these were substituted as Rs.1600/- and Rs.8000/-
respectively with effect from 1.11.1986)
The pension payable to the appellant
was fixed at Rs.17,300/- per annum (comprised of Rs.13,800/- as ordinary
pension and Rs.3,500/- as special additional pension).
4. The Government of India vide
Official Memorandum dated 16.4.1987 rationalised the pension structure
of the employees who retired prior to 1.1.1986. Clause 4.1 thereof
provided for additional relief for 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 O. M. dated 16.4.1987. The said O. 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 III 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 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.
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 First Schedule to the
Act, was revised and consolidated from 1.1.1986 and 1.11.1986 as
(a) Pension (including additional pension) from 1.1.1986 : Rs.32,720
(b) Pension (including additional pension) from 1.11.1986 : Rs.37,220
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.
Revised ordinary pension (as per 50% formula) : 3500 x 23 = Rs.1342
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
1. 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 6.1(A) incase of pre
31.3.85 retirees (vide Col.2 of ready 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 +
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 1.11.1986. 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 month) instead of Rs.3500/-. He
also contended that the additional pension under para 2(b) of Part III
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 of the 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
M.L. Jain (I) [AIR 1985 SC 619] and M.L. Jain (II) [AIR 1989 SC 669].
It, however, observed that if any 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 support 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/-
as the monthly emolument instead of Rs.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 (III). The respondents were
directed to recalculate the pension within three months and pay the
arrears to the 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 a 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 III 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 a 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, ESI Corporation vs. High Land
Coffee Works - AIR 1992 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 of the addition of some 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
"62. The term emolument when used in this part means the emolument which
the employee was receiving immediately before his retirement and
(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,
(ii) personal pay and special pay, and
(iii) any other emoluments which may be specially classed as pay by the
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 Illustrated 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
16. Justice G. P. Singh in his
treatise 'Principles of Statutory 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 of Madhya Pradesh [AIR
1970 SC 1923], South Gujarat Roofing Tile Manufacturers Association vs.
State of Gujarat [AIR 1977 SC 90], Hindustan Aluminum Corporation vs.
State of Uttar Pradesh [AIR 1981 SC 1649], and Reserve Bank of India v.
Peerless General Finance and Investment Co. Ltd. [1987 (1) 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 calculating pension. The words 'and
includes' have been used in Rule 62, as meaning 'comprises' or 'consists
18. In the view we have taken, it is
unnecessary to consider the following two amendments to Rule 62 of Part
III of the Kerala Service Rules, made 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
(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 State 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 of pension. The 'emolument' of the 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) of Part III of first Schedule to the Act.
In M.L. Jain (III) - AIR 1991 SC 928, 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.1600x8)
instead of Rs.8,000/- from 1.11.1986. 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 of consolidated 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 III 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
(iii) Therefore, the total pension
was Rs.34,820/- p.a. from 1.1.1986 and Rs. 42,020/- per annum from
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 of the deceased appellant. Parties to bear their
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