Supreme Court Orders Pension and Terminal Benefits Based on CAT Orders for Merged Language Cadre: R.D. Kaushal vs Union of India (2022)

Date of the Judgment: 14 September 2022

Citation: [Not Available in Source]

Judges: B.R. Gavai, J. and Pamidighantam Sri Narasimha, J.

Can a merger of cadres deny employees their rightful terminal benefits and pension? The Supreme Court addressed this question in a case concerning the merger of Assistant Foreign Language Examiners (AFLE) and Deputy Foreign Language Examiners (DFLE) in the Research and Analysis Wing. The court focused on ensuring that the merger did not negatively affect the employees’ retirement benefits. The judgment was delivered by a bench of Justices B.R. Gavai and Pamidighantam Sri Narasimha, with Justice B.R. Gavai authoring the opinion.

Case Background

Prior to the 5th Central Pay Commission, there were two distinct posts in the Language Cadre of the Research and Analysis Wing: Group ‘B’ Assistant Foreign Language Examiner (AFLE) and Group ‘A’ Deputy Foreign Language Examiner (DFLE). In January 1999, the pay scale of AFLEs was revised to be at par with DFLEs, effective from 1st January 1996. In September 1999, the post of AFLE was reclassified as a Group ‘A’ post. The next promotion for both cadres was to the post of Under Secretary (Language).

In 2001, the Research and Analysis Wing (Recruitment, Cadre and Service) Rules, 1975 were amended to equalize the residency period for promotion to Under Secretary (Language) to 5 years for both posts. The promotion quota from AFLE and DFLE streams was amended to 60:40 from the earlier 50:50. The rules also allowed for the diversion of seats from one quota to another if candidates were not available.

The appellants joined as Interpreters between April 1985 and September 1990 and were promoted as AFLEs between March 1995 and September 1998. DFLEs were first recruited in 1999. In 2002, due to vacancies in the Under Secretary (Language) cadre because DFLEs had not completed the 5-year residency, the Department of Personnel & Training (DoPT) recommended merging the two posts, as they had identical functions, duties, salaries, and promotional avenues. This recommendation was not immediately acted upon.

On 13th March 2008, the posts of AFLE and DFLE were merged and re-designated as Senior Interpreter. However, a footnote was added stating that the merger would not adversely affect the career prospects of the direct recruits (DFLEs), who would maintain their distinct identity until their promotion to Under Secretary (Language).

Vacancies in the post of Under Secretary (Language) became the subject of litigation before the Central Administrative Tribunal (CAT). The CAT, on 26th May 2008, observed that the distinction between AFLEs and DFLEs had been removed from 1st January 1996. The CAT directed the Cabinet Secretariat and the DoPT to reconsider the merger of AFLEs and DFLEs and its consequences within three months. Promotions to Under Secretary (Language) were put on hold.

On 2nd September 2008, the Cabinet Secretariat held that the distinction between AFLEs and DFLEs remained until the official merger on 13th March 2008, and no amalgamation had occurred due to the 5th Central Pay Commission recommendations.

Aggrieved, an AFLE filed a contempt petition, and the CAT, on 19th November 2008, stated that its order of 26th May 2008 had not been challenged and had attained finality. The Cabinet Secretariat was given another opportunity to pass a fresh order.

The appellants filed O.A. No. 3663 of 2009 before the CAT, challenging the footnote in the Notification of 13th March 2008 and the order of 2nd September 2008. The CAT allowed the application on 7th July 2010, quashing the order of 2nd September 2008 and directing a speaking order in accordance with its order of 26th May 2008.

The Union of India filed a writ petition before the High Court, which was allowed on 18th April 2012, setting aside the CAT’s order of 7th July 2010. The appellants then approached the Supreme Court.

Timeline:

Course of Proceedings

The Central Administrative Tribunal (CAT) initially observed on 26th May 2008, that the distinction between AFLEs and DFLEs had been removed with effect from 1st January 1996, and directed the Cabinet Secretariat and the DoPT to reconsider the merger within three months. Promotions to Under Secretary (Language) were put on hold. The Cabinet Secretariat issued an order on 2nd September 2008, stating that the distinction between the two cadres remained until the official merger on 13th March 2008. This order was challenged by the appellants before the CAT, which on 7th July 2010, quashed the order of 2nd September 2008, and directed for a speaking order in accordance with its order of 26th May 2008. The Union of India then appealed to the High Court, which set aside the CAT’s order. This led to the appellants approaching the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation and implementation of the following:

• The Research and Analysis Wing (Recruitment, Cadre and Service) Rules, 1975: These rules govern the recruitment, cadre, and service conditions of employees in the Research and Analysis Wing. The rules were amended in 2001 to equalize the residency period for promotion to the post of Under Secretary (Language) to 5 years for both AFLEs and DFLEs. Additionally, the promotion quota was amended to 60:40 from the earlier 50:50.
• Notification dated 13th March, 2008: This notification officially merged the posts of AFLE and DFLE and re-designated them as Senior Interpreter. However, a footnote was added to ensure that the merger would not adversely impact the career prospects of the direct recruits (DFLEs).

Arguments

Arguments on behalf of the Appellants:

• The High Court should not have reopened the CAT’s judgment and order dated 26th May 2008, which had attained finality as it was not challenged by any party.
• The issue of the merger of the two cadres was also decided by the CAT in the same order.
• The order of the Cabinet Secretariat dated 2nd September 2008, was contrary to the directions of the CAT dated 26th May 2008.
• The CAT’s order of 7th July 2010, directed the implementation of the order dated 26th May 2008, and the High Court should not have interfered with it.
• Both AFLEs and DFLEs performed the same responsibilities, carried the same pay, were classified as Group A, and had the same residency period for promotion.
• Once the two cadres were merged, further classification based on their “birthmarks” was not permissible.

The appellants relied on the judgment of the Supreme Court in B. Manmad Reddy and others vs. Chandra Prakash Reddy and others [(2010) 3 SCC 314] to argue that once the cadres were merged, further classification was not permissible.

Arguments on behalf of the Respondents:

• The CAT erred in giving retrospective effect to the Notification dated 13th March 2008.
• The footnote in the Notification of 13th March 2008, specifically provided that the merger would not adversely impact the career prospects of the existing direct recruits in the grade of DFLEs.

Submissions of the Parties

Issues Framed by the Supreme Court

The Supreme Court did not frame specific issues for determination. However, the core issue was whether the appellants were entitled to terminal benefits and pension based on the orders passed by the CAT, considering the merger of the AFLE and DFLE cadres.

Treatment of the Issue by the Court

Authorities

Cases Relied Upon:

• B. Manmad Reddy and others vs. Chandra Prakash Reddy and others [(2010) 3 SCC 314] – The appellants relied on this case to argue that once the cadres were merged, further classification was not permissible. The Supreme Court of India did not explicitly discuss this authority in its judgment, but it was part of the appellant’s arguments.

Legal Provisions Considered:

• The Research and Analysis Wing (Recruitment, Cadre and Service) Rules, 1975: The rules were amended in 2001 to equalize the residency period for promotion to the post of Under Secretary (Language) to 5 years for both AFLEs and DFLEs. Additionally, the promotion quota was amended to 60:40 from the earlier 50:50.
• Notification dated 13th March, 2008: This notification officially merged the posts of AFLE and DFLE and re-designated them as Senior Interpreter. However, a footnote was added to ensure that the merger would not adversely impact the career prospects of the direct recruits (DFLEs).

Authorities Considered by the Court

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court did not explicitly discuss B. Manmad Reddy and others vs. Chandra Prakash Reddy and others [(2010) 3 SCC 314], but it acknowledged the appellant’s argument.
• The Court considered The Research and Analysis Wing (Recruitment, Cadre and Service) Rules, 1975 and the Notification dated 13th March, 2008 as the primary legal framework governing the merger of the cadres.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the Central Administrative Tribunal’s (CAT) order dated 26th May 2008, had not been challenged by the Union of India and had therefore attained finality. This was the most significant factor that weighed in the mind of the Court. The Court also considered the fact that the appellants had superannuated and were willing to give up their claim for arrears, focusing instead on their terminal benefits and pension. The Court emphasized that the merger of the cadres should not negatively impact the employees’ retirement benefits.

Fact:Law Ratio

The Court’s reasoning was more influenced by the legal principle of the finality of the CAT’s order (60%) than by the factual aspects of the case (40%). The Court focused on the legal implications of the unchallenged CAT order and its binding nature.

Logical Reasoning

Judgment

The Supreme Court disposed of the appeal with a direction to the respondents to calculate the terminal benefits payable to the appellants based on the orders passed by the Central Administrative Tribunal (CAT) dated 26th May 2008 and 7th July 2010. The Court emphasized that the CAT’s order dated 26th May 2008 was not challenged by the Union of India and had therefore attained finality. The pension was to be paid to the appellants with effect from 1st January 2023. The terminal benefits were to be cleared on or before 31st December 2022. The appellants were not entitled to arrears of pension from the date of their superannuation till 31st December 2022, but they were entitled to interest at the rate of 6% per annum on the terminal benefits from the date of their superannuation till the date of actual payment.

The Court stated, “In that view of the matter, we are inclined to dispose of the present appeal with a direction to the respondents to calculate terminal benefits as are payable to the appellants on the basis of the orders passed by the learned CAT dated 26th May 2008 and 7th July, 2010.”

The Court further noted, “We are inclined to do so specifically in view of the fact that the order of the learned CAT dated 26th May 2008 was not challenged by the respondent­Union of India and has, therefore, attained finality.”

The Court also clarified, “The pension as calculated in view of the aforesaid directions would be paid to the appellants with effect from 1st January 2023.”

There were no dissenting opinions in this case. The decision was unanimous.

Key Takeaways

• The finality of orders passed by tribunals is crucial and must be respected by all parties.
• Mergers of cadres should not negatively impact the terminal benefits and pension of employees.
• When an order is not challenged by a party, it attains finality and becomes binding.
• Employees are entitled to interest on delayed payments of terminal benefits.

The judgment sets a precedent that ensures that the merger of cadres does not result in the loss of benefits for employees, especially concerning retirement benefits. It also emphasizes the importance of respecting the finality of orders passed by judicial and quasi-judicial bodies.

Directions

The Supreme Court directed the respondents to:

• Calculate the terminal benefits payable to the appellants based on the orders passed by the CAT dated 26th May 2008 and 7th July 2010.
• Pay the pension to the appellants with effect from 1st January 2023.
• Clear the terminal benefits on or before 31st December 2022.
• Pay interest at the rate of 6% per annum on the terminal benefits from the date of their superannuation till the date of actual payment.

Development of Law

The ratio decidendi of this case is that when an order of a tribunal, such as the Central Administrative Tribunal (CAT), is not challenged by a party, it attains finality and becomes binding. The Supreme Court clarified that the merger of cadres should not negatively impact the terminal benefits and pension of employees. This judgment reinforces the principle of the finality of judicial and quasi-judicial orders and ensures that employees’ retirement benefits are protected in cases of cadre mergers.

Conclusion

In the case of R.D. Kaushal vs. Union of India, the Supreme Court ordered that the appellants’ terminal benefits and pension be calculated based on the Central Administrative Tribunal’s orders, which had attained finality. The Court emphasized that the merger of the Assistant Foreign Language Examiners (AFLE) and Deputy Foreign Language Examiners (DFLE) cadres should not adversely affect the employees’ retirement benefits. This judgment reinforces the importance of respecting the finality of judicial and quasi-judicial orders and ensures that employees’ rights are protected in cases of cadre mergers.