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  • Rule 155 of the Pension Regulation
  • Section-162 of Indian Navy Act,
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  • Rule 155 of the Pension Regulation
  • Section-162 of Indian Navy Act,
Smart Summary

Factual and Procedural Background

This application was filed jointly by three ex-servicemen formerly enrolled in the Indian Navy seeking quashing of rejection orders (Annexures A7–A9), a declaration that they are entitled to reservist pension or, alternatively, special pension, sanction of the eligible pension with arrears from the date due with interest at 18% p.a., and costs.

The applicants were enrolled in boy service (joining dates: 16.6.1967 and 18.6.1967) and their engagement counted from 9.11.1968 for 10 years of active service and from 9.11.1978 for 10 years of fleet reserve service. They participated in the 1971 war and were discharged from regular service on 30.11.1978 on expiry of engagement. They produced Certificates of Service (Annexures A1–A3) which, they say, record engagement for 10 years active and 10 years fleet reserve service.

The applicants made representations (Annexures A4–A6) to the Defence Minister and respondents; the respondents rejected their claims for reservist pension in orders reproduced as Annexures A7–A9, stating that the applicants were not drafted to fleet reserve as per a Government policy letter dated 3.7.1976. The applicants thereby approached this Tribunal.

The respondents filed an affidavit in lieu of reply contending inter alia that drafting to fleet reserve was discontinued by the Government's policy of 3.7.1976, that the applicants were not drafted to fleet reserve and therefore not entitled to reservist pension or service pension (they had not completed 15 years), that special pension under Regulation 95 is discretionary and requires discharge in large numbers pursuant to Government policy, and that the applicants had not exhausted remedies under the Indian Navy Act (Section 162) and/or the Armed Forces Tribunal Act (Section 21). The respondents also relied on a Regional Bench, Kochi, dictum to support the drafting requirement.

Legal Issues Presented

  1. Whether the orders of rejection dated 27.6.2012 and 6.7.2012, made in Annexures A7 to A9 respectively against the applicants 1 to 3, are liable to be set aside?
  2. Whether the applicants are each entitled to the payment of reservist pension under Regulation-92 of the Pension Regulations for the Navy, 1964?
  3. Whether the applicants 1 to 3 are each entitled to special pension under Regulation-95 of Pension Regulations for the Navy, 1964?
  4. To what relief the applicants are entitled?

Arguments of the Parties

Applicants' Arguments

  • The applicants relied on their Certificates of Service (Annexures A1–A3) showing original engagement for 10 years active service and 10 years fleet reserve service and argued the respondents cannot unilaterally curtail that engagement.
  • They invoked the doctrine of promissory estoppel: the Government is bound by its original promise (engagement) and cannot withdraw benefits promised at recruitment; they relied on precedents of the Principal Bench of the Armed Forces Tribunal, New Delhi, and Regional Bench, Kochi, for this proposition.
  • They contended the policy letter dated 3.7.1976 that purportedly stopped drafting is not binding on them because of promissory estoppel and the letter has not been produced by the respondents.
  • As an alternative, if reservist pension is not payable because they were not drafted, they sought special pension under Regulation-95 on the ground that non-drafting occurred pursuant to a Government policy and amounted to discharge in large numbers or re-organisation.
  • They disputed the respondents' contention that reception of DCRG and service gratuity precludes reservist pension, asserting they were not given any real option to elect gratuity instead of reservist pension.
  • They sought arrears with interest at 18% p.a. and costs.

Respondents' Arguments

  • The application is not maintainable because the applicants did not exhaust remedies under the Indian Navy Act (Section 162) and therefore the Tribunal should not entertain the petition under Section 21 of the Armed Forces Tribunal Act.
  • Drafting to fleet reserve was discontinued by Government policy effective 3.7.1976; since the applicants were not drafted to fleet reserve they cannot claim reservist pension and did not accrue sufficient qualifying service for service pension (they did not complete 15 years).
  • Grant of special pension under Regulation-95 is discretionary and applies where sailors are discharged in large numbers pursuant to Government policy of reducing strength or re-organisation; mere non-drafting alone (done pursuant to the 3.7.1976 policy) does not automatically entitle the applicants to special pension absent evidence of large-number discharge or re-organisation.
  • Reception of DCRG and gratuity and long delay (laches) were also advanced as reasons to deny relief.
  • The respondents relied on a Regional Bench, Kochi, decision (O.A No.84/2010) for the proposition that drafting is necessary and not automatic.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Union of India v. Anglo (Indo) - Afghan Agencies Ltd. (AIR 1968 SC 178) Early foundational authority on the doctrine of promissory estoppel as applied by Indian Courts. The Court cited it as part of the lineage establishing the promissory estoppel principle binding the Government to its promises.
Motilal Padampat Sugar Mills v. State of Uttar Pradesh ((1979) 2 SCC 409 : AIR 1979 SC 621) Articulation and summary of equitable promissory estoppel by the Supreme Court (Bhagwati J.). The Court relied on the principle from this decision to hold that the Government cannot resile from promises made at time of engagement when it would be inequitable to do so.
Armed Forces Tribunal, Principal Bench, New Delhi — T.A No. 564/2010 Applied promissory estoppel in the context of military enlistment/engagement and pensions. The Tribunal followed this Principal Bench decision's exposition that equitable promissory estoppel binds the Government and used it to support finding applicants cannot be deprived of reservist pension when engagement showed fleet reserve service.
Regional Bench, Kochi — O.A No. 71/2011 (17.1.2013) Applied promissory estoppel to deny refusal of reservist benefit where engagement promised reserve service. The Court noted this decision and treated it as supportive of applying promissory estoppel to hold applicants entitled to benefits recorded in their engagement.
Regional Bench, Kochi — T.A No. 166/2010 Held that discharge after completing colour service where engagement promised reserve service cannot be used to deny reservist pension; promissory estoppel applied. The Court quoted this decision to reinforce the proposition that the Government cannot go back on its engagement promise and that denial of reservist pension on the ground of "no vacancy" is not sustainable where original engagement promised reserve service.
Regional Bench, Kochi — O.A No. 84/2010 (dated 16.5.2011) (cited by respondents) Principle that drafting to fleet reserve is required and is not automatic; drafting must follow Government policy. The respondents relied on this decision; the Tribunal observed the respondents' reliance but noted that the respondents had not produced particulars and treated the letter/policy contended by respondents as not displacing the promissory estoppel argument in this case.
Union of India v. Tarsem Singh ((2008) 8 SCC 648) Principles regarding delay, laches and limitation in service matters; exception for continuing wrongs and restriction on arrears. The Court applied Tarsem Singh to hold that pension claims are recurring; relief for arrears is confined to three years prior to filing. Applied to limit arrears to the period from 29.10.2009.

Court's Reasoning and Analysis

The Tribunal proceeded in a sequential factual and legal analysis:

  1. Fact-finding: The Tribunal accepted the undisputed factual matrix that the applicants were enrolled in boy service (dates 16.6.1967 and 18.6.1967), that their Certificates of Service (Annexures A1–A3) recorded engagement for 10 years active service from 9.11.1968 and 10 years fleet reserve from 9.11.1978, that they completed active service and were discharged on 30.11.1978 without being drafted to fleet reserve, and that the respondents' rejection orders relied on a Government policy dated 3.7.1976 discontinuing drafting to fleet reserve.
  2. Promissory estoppel: The Tribunal examined the doctrine of equitable promissory estoppel as expounded in Supreme Court authorities and in decisions of the Armed Forces Tribunal (Principal Bench) and Regional Benches. It extracted the essence that when the Government, by words or conduct, makes a clear promise intended to be acted upon and the other party acts upon it, the Government may be estopped from withdrawing the promise if it would be inequitable to do so.
  3. Application of promissory estoppel to the engagement terms: The Court found the original engagement terms (10 years active + 10 years reserve) recorded in the Certificates of Service to constitute a promise by the Government. The Government's later policy (3.7.1976) which curtailed drafting to fleet reserve could not lawfully be used to deprive the applicants of the right created by their engagement. The respondents had not produced the 3.7.1976 letter; even accepting the respondents' version, a letter cannot curtail rights created by an earlier engagement where equity and promissory estoppel apply.
  4. Gratuity/DCRG point: The Tribunal considered and rejected the respondents' contention that payment of DCRG and service gratuity constituted an election precluding reservist pension. It held the applicants were not offered a choice between reservist pension and gratuity and therefore receipt of gratuity did not bar their claim to reservist pension.
  5. Special pension alternative under Regulation 95: The Court examined Regulation 95 (special pension/gratuity to sailors not transferred to reserve and discharged in large numbers in pursuance of Government policy of reducing strength or re-organisation). The Tribunal accepted that if non-drafting was due to Government policy of 3.7.1976, Regulation 95 could be attracted; the respondents' admission that applicants were not drafted supported the application of Regulation 95. Nevertheless, the Tribunal noted that both pensions cannot be granted together and treatment of alternatives was required.
  6. Delay, laches and limitation: The Tribunal considered the respondents' plea of delay and laches and applied the Supreme Court's decision in Union of India v. Tarsem Singh. It accepted that pension claims are of a recurring nature and relief for arrears is generally confined to three years prior to filing. Accordingly, the Tribunal limited the arrears to three years prior to the date of filing (application filed 29.10.2012), i.e., from 29.10.2009.
  7. Relief selection: Although the Tribunal found that the applicants were entitled to both reservist pension (by applying promissory estoppel) and, alternatively, special pension (under Regulation 95), it recognized that both pensions cannot be granted simultaneously and proceeded to grant reservist pension in preference to special pension because that was the primary relief sought by the applicants.
  8. Consequential directions: The Tribunal directed preparation of Pension Payment Orders within three months and payment of arrears limited to the prior three-year period, with DCRG and gratuity already paid to be adjusted from those arrears. It provided that failure to comply would attract interest at 9% p.a. on arrears until payment, and made no order as to costs.

Holding and Implications

Holding:

Annexures A7 to A9 (the rejection orders) are set aside and the applicants are entitled to reservist pension.

Implications and direct consequences:

  • The Tribunal held that, on the facts and law (principally promissory estoppel), the applicants' original engagement terms (10 years colour service + 10 years fleet reserve) must be given effect to and the applicants' fleet reserve service is deemed to continue for reservist liability.
  • The applicants are entitled to reservist pension; the alternative entitlement to special pension under Regulation 95 was acknowledged but only one pension can be granted and the reservist pension was awarded.
  • Arrears of reservist pension are confined to three years prior to filing of the application (i.e., from 29.10.2009), applying Tarsem Singh.
  • DCRG and service gratuity already paid are to be adjusted from the arrears due to the applicants.
  • Pension Payment Orders are to be prepared and arrears paid within three months from the date of the order; failure to comply attracts interest at 9% p.a. on the arrears until payment.
  • No order as to costs was made by the Tribunal.

The Tribunal's decision does not purport to create novel law beyond applying established principles (promissory estoppel and the Tarsem Singh limitation approach) to the facts before it; the remedy granted was limited in time for arrears consistent with the cited apex authority.

    Soundirarajan Ramadas v. Union Of India

    V. Periya Karuppiah, Member-Judicial:— This application has been filed by the applicants jointly for the reliefs that Annexures A7 to A9 relating to the applicants respectively are liable to be quashed and to issue a declaration that the applicants are entitled to reservist pension or special pension and to sanction the eligible pension to the applicants and to direct the respondents to pay the same with arrears from the date it has become due with interest @ 18% p.a and for costs.

    2. The case of the applicants as stated in the application would be as follows:—

    Applicants are Ex-Servicemen discharged from Indian Navy. They were enrolled in the Indian Navy for an initial engagement of 10 years in regular service and 10 years in fleet reserve. As per the conditions of the enrollment, the applicants were to be in reserve for 10 years after their discharge from active service. The 1 applicant joined on 16.6.1967; the 2 applicant joined on 18.6.1967, and the 3 applicant joined on 18.6.1967 in the boy service, and for all the applicants the engagement counted from 9.11.1968 for 10 years of active service, and from 9.11.1978 to 8.11.1988 towards fleet reserve service. The applicants bravely participated in the war during 1971 and they were discharged from regular service on 30.11.1978 as per their engagement. The Certificate of service of the applicants have been produced as Annexures A1 to A3 respectively. According to Regulation 92 of Pension Regulations for the Navy, 1964, a sailor who has 10 years of active service and 10 years of fleet service is entitled to reservist pension. However the applicants were not granted reservist pension. Identically situated defence personnel have received the reservist pension after filing petition before Hon'ble Defence Minister as per the direction of Hon'ble High Courts and Tribunals, but the requests of the applicants were not considered for the grant of reservist pension. The representation of the 1 applicant dated 19.5.2012 (Annexure A4), the representation of the 2 applicant dated 18.5.2012 (Annexure A5) and the representation of the 3 applicant dated Nil April, 2012 (Annexure A6) were submitted to the Defence Minister endorsing copies to the 2 and 3 respondents. To their dismay, the applicants received orders from the 3 respondent rejecting their request for reservist pension which are produced as Annexures A7 to A9. In the said orders, it has been mentioned that the applicants were not drafted to fleet reserve service as per the policy of the Government and, therefore, they were not found entitled to reservist pension. The said reason given by the Government of India is not sustainable in view of the doctrine of promissory estoppel. The Government having engaged the services of the applicants, 10 years for active service and 10 years for fleet service, it cannot go back and unilaterally change the conditions of service to the detriment of the applicants' interest. The law is well settled by the Hon'ble Supreme Court of India and the Principal Bench of Armed Forces Tribunal, New Delhi, that the respondents are promissorily estopped from withdrawing the benefits entered at the time of engagement of service.

    3. Even otherwise, the applicants are entitled to special pension as per Regulation-95 of Pension Regulations for the Navy, 1964, since the Government had failed to transfer or draft the applicants to the reserve fleet service due to Government policy and in such circumstance, the applicants are entitled to special pension as per Regulation-95 of Pension Regulations for the Navy, 1964. The applicants are entitled to reservist pension and in case, no reservist pension is payable to them since the applicants were not transferred to fleet reserve as per Government policy, they would be entitled to special pension. Therefore, the rejection orders passed by the respondents against the claim of the applicants in Annexures A7 to A9 may be quashed and the applicants may be declared entitled to reservist pension or special pension as the case may be with a direction to the respondents to pay the arrears within time with interest @ 18% p.a and costs.

    4. The case of the respondents as stated in the Affidavit in lieu of Reply Statement, would be as follows:—

    The application filed by the applicants is neither maintainable on facts nor on law, especially under Section-21 of the Armed Forces Tribunal Act, as the applicants have not availed the remedies under the Indian Navy Act. They ought to have resorted to the remedies under Section-162 of the Navy Act, 1967, and thereafter to approach this Tribunal. The applicants 1 and 2 had joined the Navy respectively on 16.6.1967 and 18.6.1967 in boy service and were discharged on 30.11.1978 on expiry of engagement on completion of 11 years 168 days of service. Similarly, the 3 applicant joined naval service on 18.6.1967 and was discharged on 30.11.1978, after completion of 11 years 166 days of service. The applicants were not drafted to fleet reserve service, since drafting to fleets reserve was discontinued with effect from 3.7.1976 vide G.O.I letter AD/5374/2/78/2214/S/D/N-II) dated 3.7.1976 According to the said letter, drafting to fleet reserve service was dropped and there was no such policy in vogue in 1978. When the applicants were not drafted to reserve fleet service, they would not be considered in fleet reserve and, therefore, they would not get any pensionary benefit as the qualifying service period would not enure them to 15 years' service. The applicants were paid terminal benefits, namely DCRG and Service Gratuity as per their entitlement at that time. The applicants were discharged on expiry of initial engagement period of 10 years in 1978 without drafting them to fleet reserve and, therefore, they were not eligible for reservist pension. When the applicants were not drafted to fleet reserve, they cannot claim the reservist pension since no man can claim joining the fleet reserve as of right. The Regional Bench of Armed Forces Tribunal, Kochi, in O.A No. 84/2010 dated 16.5.2011 laid down a principle that a sailor, after his active service, should be drafted to fleet service and it is not an automatic re-enrolment into the service and the drafting of any sailor ought to have been done as per the policy of Government.

    5. Similarly the grant of special pension is at the discretion of the Central Government where the discharge of the sailors is in large numbers in pursuance of the Government's policy of reducing the strength. In the absence of showing that the applicants were discharged in large numbers in pursuance of Government's policy of reducing strength, the special pension cannot be granted. The applicants had completed the initial engagement of 10 years and, therefore, they will not fall under the category described in Regulation-95 of Pension Regulations for the Navy, 1964. The applicants did not complete 15 years of active service and, therefore, they are not eligible for the grant of service pension in accordance with Regulation-78 of the Pension Regulations for the Navy, 1964. Therefore, the applicants are not entitled to any relief sought for by them and the application may be dismissed.

    6. On the above pleadings, the following points are found emerged for consideration:—

    1) Whether the orders of rejection dated 27.6.2012 and 6.7.2012, made in Annexures A7 to A9 respectively against the applicants 1 to 3, are liable to be set aside?

    2) Whether the applicants are each entitled to the payment of reservist pension under Regulation-92 of the Pension Regulations for the Navy, 1964?

    3) Whether the applicants 1 to 3 are each entitled to special pension under Regulation-95 of Pension Regulations for the Navy, 1964?

    4) To what relief the applicants are entitled for?

    7. Heard Mr. V.K Sathyanathan, the Learned Counsel for the applicants and Mr. B. Shanthakumar, the Learned Senior Panel Counsel, assisted by Mr. Vaibhav Kumar, JAG Officer, appearing for the respondents.

    8. The Learned Counsel for the applicants would submit in his argument that the case of the applicants are similar and, therefore, they have opted to file a joint petition on the separate causes of action of the applicants. He would also submit that this Hon'ble Tribunal had permitted to join the causes of action and to file a single application. He would also submit that all the three applicants were enrolled in Indian Navy in boy service on 16.6.1967 and 18.6.1967 respectively and were engaged for 10 years active service commencing from 9.11.1968 and 10 years fleet reserve service commencing from 9.11.1978 and the Certificate of service of the applicants produced in Annexures A1 to A3 would establish the same and the respondents cannot unilaterally leave the applicants without drafting them to fleet reserve service as they are promissorily estopped by their original act. He would further submit that the Policy of the Government in its letter dated 3.7.1976 that the sailors in active service shall not herein after be drafted to fleet reserve service would not bind the applicants as per the doctrine of “promissory estoppel”. He would draw our attention to a Judgement of Armed Forces Tribunal, Principal Bench, New Delhi, in T.A No. 564/2010 for the applicability of the principle of promissory estoppel. He would also draw the attention of this Tribunal to another Judgement of Regional Bench, Kochi, made in T.A No. 166/2010 for the similar principle. Relying upon those decisions, he would insist in his arguments that the respondents cannot act in pursuance of any policy letter de-limiting the contract of engagement of service of the applicants entered with the Government at the time of their enrolment in the Indian Navy Service. He would rely upon the Certificate of service of the applicants produced at Annexures A1 to A3 in which the period of engagement has been clearly admitted by the respondents as 10 years for colour service and 10 years for reserve service. Therefore, the letter dated 3.7.1976 limiting the applicants fleet reserve service is not valid in law. He would also submit that the said letter dated 3.7.1976 quoting the policy of the Government to limit the fleet reserve service of the sailors, has not been produced by the respondents. He would also submit that the applicants are entitled to the benefit of reserve service even though they were not drafted by the Government to fleet reserve service. Therefore, he would argue that the provisions of Regulation-92 of Pension Regulations for the Navy, 1964, would apply to the applicants, being sailors, enabling them to get reservist pension. The claim of the applicants for payment of reservist pension were wrongly rejected by the respondents in Annexures A7 to A9 and the reasons mentioned in those orders are not sustainable in law and the applicants may, therefore, be granted with reservist pension.

    9. He would also submit that even if the policy of the Government to withdraw the drafting of the sailors to fleet reserve as per the letter dated 3.7.1976 is correct, the applicants should have been deemed as not transferred to fleet reserve and are discharged in large numbers in pursuance of the Government policy reducing the strength of establishment of the Indian Navy or towards its re-organisation. He would submit that the applicants would, therefore, be entitled to a special pension as contemplated under Regulation-95 of Pension Regulations for the Navy, 1964. In any way, the applicants are entitled to either reservist pension or special pension payable by the respondents for the service rendered by the applicants to the Indian Navy and the appropriate pension may be ordered to the applicants from the date of entitlement with 18% interest and costs.

    10. The Learned Senior Panel Counsel would submit in his argument that the application filed by the applicants is not maintainable since they did not exhaust the remedy available under Section-162 of the Navy Act and, therefore, the present application is not maintainable. He would also submit that even if the application is maintainable, the applicants are not entitled to reservist pension since they were not drafted to fleet reserve while they were discharged from active service as per the Policy letter of the Government dated 3.7.1976 It is the dictum of Kochi Regional Bench that a sailor ought to have been drafted to the fleet reserve while he was discharged from active service in order to count the service in reserve fleet. Therefore, he would submit that the applicants cannot be considered as continuing the fleet reserve service automatically without any drafting to the said service. He would also submit that Regulation-92 of Pension Regulations for the Navy, 1964 is, therefore, not applicable to the applicants and they are not eligible for the reservist pension. As far as the special pension under Regulation-95 of the Pension Regulations for the Navy, 1964 is concerned, he would argue that the applicants would not be attracted by Regulation-95 since the policy of the Government should have been made for discharge of sailors in order to reduce the strength of sailors or the reduction should have been for the purpose of re-organisaton of the fleet. He would, therefore, submit that the applicants are not entitled to special pension on the basis of their non-drafting into fleet reserve only, which was done in pursuance of 3.7.1976 policy letter. He would also submit that the said Policy letter was not intended to reduce the strength of the fleet nor to re-organise the fleet. Therefore, the applicants are not entitled to special pension also. He would also submit that the applicants have come forward with the present case after a long delay. The delay and laches on the part of the applicants would also disentitle them from the payment of any pension, even if they are deserved.

    11. We have given anxious thoughts to the arguments advanced on either side.

    12. Points No. 1 & 2: The indisputable facts are that the applicants 1 to 3 were enrolled in Indian Navy on 16.6.1967, 18.6.1967 and 18.6.1967 in boy service and were discharged on 30.11.1978 on the expiry of engagement after completion of 11 years 168 days for applicants 1 and 2, and 11 years 166 days for the 3 applicant. They were admittedly not drafted to fleet reserve as seen from the Certificate of service of the applicants. They were admittedly enrolled for 10 years from 9.11.1968 in active service and 10 years from 9.11.1978 in fleet reserve service. Annexures A1 to A3 produced in respect of the applicants 1 to 3 respectively would categorically go to show that the original engagement of service would contain 10 years active service and 10 years fleet reserve for all the three applicants. The only point raised by the respondents is that the applicants were not drafted to fleet reserve a per the Policy letter of the Government dated 3.7.1976 The rejection orders passed by the respondents in Annexures A7 to A9 would also quote that the applicants were not drafted to fleet reserve as no such claim existed at the time of their discharge. The respondents have now come forward with the support of a Judgement of Regional Bench, Kochi, for the principle that a person ought to have been drafted to fleet reserve service for the purpose of getting the benefit of reservist pension. However, it was argued by the Learned Counsel for the applicants that the respondents are promissorily estopped from raising such plea of not drafting to fleet reserve and from discharging the applicants from the service. While considering the submission of the Learned Counsel for the applicants, we could see from the Certificate of service of the applicants that the active service and fleet service were entered for 10 years each. Whether the said period of engagement can be curtailed by the respondents? Or, are the respondents estopped from doing so as contended.

    The Judgement of Armed Forces Tribunal, Principal Bench, New Delhi, made in T.A No. 564/2010 would lay down the following principle:—

    “The Principle of Promissory Estoppel which has been evolved by Indian Courts in passage of time have been crystalised in various decisions of the Supreme Court. The first case in line is that of Union of India v. Anglo (Indo) - Afghan Agencies Ltd. (AIR 1968 SC 178). Subsuequently the various decisions have come, but there is another landmark decision in the case of Motilal Padampat Sugar Mills v. State of Uttar Pradesh ((1979) 2 SCC 409 : AIR 1979 SC 621). The Lordship Bhagwati J. has summed up the principle which reads as under:

    “….where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to rise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to do back upon it, if it would be inequitable to allow him to do so having reagard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any pre-existing relationship between the parties or not.”

    The Lordship has further observed that:

    “It is elementary that in a republic governed by the rule of law, no one, howsoever high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual insofar as the obligation of the law is concerned: the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppels? Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of “honesty and good faith?”. Why should the Government not be held to a high “standard of rectilinear rectitude while dealing with its citizen?”

    Therefore, the principle of equitable promissory estoppel binds the government to stand by their promise and not to be unfair and act in the disadvantage of other party.

    13. In the aforesaid Judgement, the Principal Bench of New Delhi, had considered several land mark Judgements of Hon'ble Apex Court and had come to the conclusion that the principle of equitable promissory estoppel binds the Government to stand by their original promise and not to be unfair and act in the disadvantage of other party.

    The said Judgement of Principal Bench was followed by Regional Bench of Kochi in O.A No. 71/2011 dated 17.1.2013, which runs as follows:—

    “Had the discharge been due to any fault of the applicant, or any charge or misconduct levelled against him, he could not claim any type of pension including Reservist Pension. But, no such condition existed, therefore, according to the promises made by the respondents at the time of engagement, the applicant was made to understand that he was to serve the Army for 15 years in the aforesaid manner. Therefore, he cannot be denied the benefit of 15 years after a gap of more than 9 years on the ground that there was no vacancy in the reserve. In our considered view, the doctrine of promissory estoppel is fully attracted in the present matter.

    14. Yet another Judgement of Regional Bench, Kochi, made in T.A No. 166/2010 was relied upon by the applicants. The relevant passage would runs thus:—

    “Under such circumstances, the discharge of the applicant after he had completed the colour service of 10 years, 3 months and 20 days and after entering into a contract of engagement (Ext. R1) with the applicant for both 10 years colour service and 5 years reserve service does not open to the respondent to go back from its promise under Ext. R1 and that the discharge of the applicant on the ground that there is no vacancy in the reserve service cannot be a ground to deny reservist pension as laid down under Rule 155 of the Pension Regulation for the Army, 1961 (Part I). So, under such circumstances, we are of the considered view that the impugned order denying reservist pension is liable to be set aside and the same is hereby set aside and that the applicant is consequently held entitled to the reservist pension. The point is answered accordingly.”

    15. The aforesaid Judgements would categorically lay down that the Government cannot go back on its words or conduct so as to withdraw from its original promise, where such words conduct of the Government and the original promise give rise to or create legal relations. In this case, the applicants, in their original engagement of service, were enrolled as sailors 10 years active service and 10 years fleet reserve service. After completion of the active service, the Government cannot withdraw its promise for the applicants continuing in fleet reserve service, to the detriment and interests of the applicants in the original engagement. The letter dated 3.7.1976, under which the Government had come to the conclusion of not extending the fleet reserve of the sailors would tantamount to withdrawing the promise of the original engagement of service and the Government is, therefore, equitably and promissorily estopped from doing so, as it would, of permitted, violate the promise of the engagement of service entered with applicants. The said letter dated 3.7.1976, has not been produced by the respondents. Even the contents of the letter as stated by the respondents are taken to be true, such a letter curtailing the right created under the engagement of service in favour of the applicants cannot be taken back by the Government. Therefore, the Judgement of Kochi Regional Bench as quoted by the respondents, which has not been either produced or given particulars, cannot be helpful to the respondents. Therefore, we are of the considered view that the applicants, whose engagement of service were clearly referring to 10 years active service from 9.11.1968 and 10 years fleet service from 9.11.1978, cannot be taken away by the respondents since they were equitably and promissorily estopped from doing so. The applicants' fleet reserve service is deemed to be continuing for the reserve liability and they are entitled to count the service for getting the reservist pension. It was faintly argued by the Learned Senior Panel Counsel that the impugned orders would say that the applicants had received the DCRG and Service Gratuity and they had elected to receive the same and, therefore, they would not be entitled to reservist pension. It is no doubt true that the applicants were not offered the payment of reservist pension at the time of the grant of gratuity. The applicants were not given an option either to receive the reservist pension or to receive the gratuity as contended by the respondents. There was no occasion for the applicants to elect to receive the gratuity and, therefore, the argument of the Learned Senior Panel Counsel that the applicants since received gratuity are not entitled to reservist pension, cannot be sustained. The applicants are thus found entitled to reservist pension.

    16. In view of our finding that the applicants are entitled for reservist pension, the orders passed by the respondents denying the reservist pension in Annexures A7 to A9 are liable to be set aside. The reasons stated in the said orders were found not acceptable and, therefore, we do not hesitate to set aside the said orders as not sustainable. For the foregoing discussions, Points No. 1 and 2 are decided in favour of the applicants.

    17. Point No. 3: The applicants have come forward with an alternative prayer for payment of special pension, as the applicants were discharged by virtue of a Policy letter dated 3.7.1976 and, therefore, the provisions of Regulation-95 of the Pension Regulations for the Navy, 1964, would be squarely attracted. For the purpose of appreciating the contentions of the applicants, Regulation-95 has to be extracted as below:—

    “95. Special pension and gratuity to sailors - when admissible

    - A special pension or gratuity may be granted, at the discretion of the Central Government, to sailors who are not transferred to the reserve and are discharged in large numbers in pursuance of Government's policy—

    (i) of reducing the strength of establishment of the Indian Navy; or

    (ii) of re-organisation, which results in paying off of any ships or establishments.”

    18. According to the said Regulation, a special pension can be granted at the discretion of the Central Government to the sailors, who are not transferred to the fleet reserve and are discharged in large numbers in pursuance of Government's policy of reducing the strength of establishment or re-organising any ships or establishments which results in paying off. Whether the letter dated 3.7.1976 would act as a mass reduction of strength in the establishment or a ship or in the case of re-organising for want of necessity is the question. The respondents did not produce the letter dated 3.7.1976 for the purpose of appreciating this point. Therefore, we have to presume that the said Policy letter dated 3.7.1976, was for the purpose of reducing the strength of fleet reserve. When the non-drafting of the applicants to the fleet reserve is deemed or found to be valid and the applicants were not found entitled to the reservist pension, the claim that they are entitled to special pension cannot be considered. The admission of the respondents in their Affidavit that the applicants were not drafted to fleet reserve would go to show that the letter dated 3.7.1976 is squarely attracted under Regulation-95. Since the applicants were not admittededly drafted despite their original engagement of service for active service for 10 years and fleet reserve for 10 years, the applicants will be entitled to the grant of special pension as per Regulation-95 of Pension Regulations for the Navy, 1964. Accordingly, we are inclined to decide this point in favour of the applicants.

    19. Point No. 4: In points 1 and 2, we find that the applicants are entitled to reservist pension. In Point No. 3, the applicants are also found entitled to special pension under Regulation-95 of Pension Regulations for the Navy, 1964. However, the applicants are entitled to any one of the pensions since the grant of both the pensions are prohibited. The applicants have originally asked for the reservist pension or in the alternative, for special pension under Regulation-95. In the said circumstances, we are inclined to grant the reservist pension in favour of the applicants.

    20. The argument advanced by the Learned Senior Panel Counsel for the respondents would go to show that the applicants had not come to Court after exhausting all the remedies under Section-21 of the Armed Forces Tribunal, 2007. His argument would further go to show that the applicants ought to have approached the competent authorities under Section-162 of the Navy Act, 1967, to exhaust the remedies and thereafter to approach this Tribunal. Per contra, the Learned Counsel for the applicants would submit that there is no necessity for the applicants to approach the competent authority under Section-162 of the Indian Navy Act, since the said provisions are meant for the Court-martial proceedings. Section-162 runs thus:—

    “162. Petitions to the Central Government or Chief of the Naval Staff against findings of sentences.— Any person subject to naval law who considers himself aggrieved by finding or sentence of any court-martial may present a petition to the Central Government or to the Chief of the Naval Staff, and the Central Government or the Chief of the Naval Staff, as the case may be, may pass such order thereon as may be thought fit.”

    21. On a careful scrutiny of the said provision, we would find that the argument of the Learned Counsel for the applicants to approach the competent authority under Section-162 of Indian Navy Act, is not necessary since the said provision is pertinent to the Court-martial proceedings.

    22. The further argument of the Learned Senior Panel Counsel is that the application filed by the applicants is affected by delay and laches and the claim would therefore be barred by the law of limitation. The said argument of Learned Senior Panel Counsel cannot be sustained in view of the principles laid down by the Judgement of Hon'ble Apex Court reported in (2008) 8 SCC 648 between Union of India v. Tarsem Singh. It has been laid down as follows:—

    “To summarise, normally, a belated service related claim will be rejected on the ground of delay and laches (where remedy is sought by filing a writ petition) or limitation (where remedy is sought by an application to the Administrative Tribunal). One of the exceptions to the said rule is cases relating to a continuing wrong. Where a service related claim is based on a continuing wrong, relief can be granted even if there is a long delay in seeking remedy, with reference to the date on which the continuing wrong commenced, if such continuing wrong creates a continuing source of injury. But there is an exception to the exception. If the grievance is in respect of any order or administrative decision which related to or affected several others also, and if the re-opening of the issue would affect the settled rights of third parties, then the claim will not be entertained. For example, if the issue relates to payment or re-fixation of pay or pension, relief may be granted in spite of delay as it does not affect the rights of third parties. But if the claim involved issues relating to seniority or promotion etc., affecting others, delay would render the claim stale and doctrine of laches/limitation will be applied. In so far as the consequential relief of recovery of arrears for a past period, the principles relating to recurring/successive wrongs will apply. As a consequence, High Courts will restrict the consequential relief relating to arrears normally to a period of three years prior to the date of filing of the writ petition.”

    23. According to the principle laid down by the Hon'ble Apex Court, the claim for any pension has a recurring cause of action and, therefore, there could not be any delay or laches or any bar over such claim owing to law of limitation. The relief of entitlement to any pension is liable to be restricted only to a period of three years prior to the date of filing of such claim. When we apply the principle laid down by the Hon'ble Apex Court to the present case, we could see that the applicants are entitled to the reservist pension as sought for by them under the provisions of Regulation-92 of Pension Regulations for the Navy, 1964, from three years prior to the filing of the present application on 29.10.2012 Therefore, the applicants are entitled to the reservist pension on and from 29.10.2009

    24. For the discussion held above, we are of the considered view that the applicants are each entitled to the grant of reservist pension payable for a period of three years prior to the filing of this application i.e from 29.10.2009 The Service Gratuity and DCRG already paid to the applicants are liable to be adjusted from the arrears.

    25. Accordingly, the application is allowed in respect of reservist pension as observed earlier. Time for preparation of Pension Payment Orders to the applicants and the payment of arrears is three months from this date. Failure to comply with the said order, the applicants are entitled to 9% interest p.a on the arrears till the date of its payment. However, there is no order as to costs.

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    Soundirarajan Ramadas v. Union Of India
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