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IR.B.E.No. I~oI~OO'1

GOVERNMENT OF INDIA (BHARAT SARKAR)MINISTRYOF RAILWAYS' (RAIL MANTRALAYA)

RAILWAY BOARD.

No.F(E)III/2005/PN1I23 New Delhi, dated ~o-9-2007

The GMs/FA&CAOs,All Indian Railways/Production Units.(As per Mailing List)

Sub: Restoration of 1/3rdcommuted portion of pension in respect ofGovernment servants who had drawn lumpsum payment onabsorption in public sector undertakings/autonomous bodies-implementation of Andhra Pradesh High Court judgementdated 24.12.03 in Writ Petition No. 8532 of 2003 followedby the Supreme Court judgement dated 29..11.06 in CivilAppeal No. 5269 of 2006 arising out ofSLP Nos. 21647-648of 2005 and the Supreme Court judgement dated 24.7.07 inReview Petition No. 643 of 07.

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A copy of Department of Pension & Pensioners' Welfare (DOP&PW)'s O.M.No. 4/79/2006-P&PW(D) dated 6thSeptember, 2007 on the above subject is forwardedherewith for information and compliance. These instructions will apply mutatismutandis on the Railways also.

2. A concordance of DOP&PW's instructions referred to in the enclosed O.M.and Railway Board's corresponding instructions is given below.

3. Please acknowledge receipt.

4. Hindi version will follow.

~)Joint. Director Finance (Establishment)

RailwayBoard.

S. DOP&PW's instructions Railway Board's corresponding instructionsNo.

1 a.M. No. 34/2/86-P&PW . Letter No. F(E)III/87/PNII7 dated 26.3.1987.dated 5.3.1987

2 O.M. No. 2/l/87-PIC Letter No.PC-IV/87/Imp/PN2 dated 20.4.1987.dated 16.4.1987

3 O.M.No.45/86/07-P&PW(A) Letter No F(E)III/97/PNl/23 dated 7.11.1997..Pt.II dated.27.10.1997

4 O.M. No. 4/59/97-P&PW(D) Letter No. F(E)III/96/PN1I9 dated 18.8.1998.dated. 14.7.1998

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'No.4/79/2006-P&PW (D)Government of India

Ministry of Personnel, Public Grievances & Pensions(Department of Pension & Penslonets'Welfare)

3rdFloor,Lok Nayak BhawanNew Delhi-110 003, Dated the 6th September, 2007

.. OFFICE MEMORANDUM

Subject:- Restoration of 1/3rdcommuted portion of pension in respect of Government servants who haddrawn lumpsum payment on absorption in public sector undertakings/autonomous bodies -implementation of Andhra Pradesh High Court judgement dated 24.12.03 in Writ Petition No.8532 of 2003 followed by the Supreme Court Judgement dated 29.11.06 in Civil Appeal No.5269 of 2006 arising out of SLP Nos. 21647-648 of 2005 and the Supreme Court Judgment dated24.7.07 in Review Petition No. 643 of 07. '

The undersigned is directed to say that the Government servants who had drawn lump sumpayment in respect of pro-rata pension (1/3rdas well as 2I3rd)on absorption in a PSU/Autonomous Bodyand have become entitled to restoration of 1/3rdcommuted portion of pension as per the provisions of thisDepartment's a.M. No. 3412186-P&PWdated 5thMarch 87atter 15 years from the date of commutation or1.4.85 whichever is later, are regulated vide this Department a.M. No. 4/59/97-P&PW(D)idated 14thJuly1998 as Clarifiedfrom time to time.

2. Andhra Pradesh High Court in its judgement dated 24.12.03 in Writ Petition No. 8532 of 2003followed by the Supreme Court Judgement dated 29.11.06 in Civil Appeal No. 5269 of 2006 arising out ofSLP Nos. 21647-648 of 2005 and the Supreme Court Judgment dated 24,7.07 in Review Petition No. 643of 07 has decided as under:-

" ...the public sector undertaking absorbees are also entitled for dearness relief etc. but not onentire pension commuted as on the date of retirement. Moreover they received lumpsum amountby way of terminal benefits on surrendering on md pension. In that way, they have already partedwith 2/3rdpension, it cannot be said to revive after 15 years. But, in case of Central governmentpensioners 2/3rdpension was continued to be received by them. Therefore. what is restored is 1/3'dpension which means full pe.nsion. But the same principle cannot be applied to say that theabsorbee will get full pension after15 years in case those who had commuted 1/3'dpension andreceived terminal benefits for 2/3rdpension had he not surrendered, he continue to receive ~pension, the same principle apply as. in case of Central Government employee. But havingreceived the cash compensationin respect of the surrender value of 2/3rd,he cannot be allowed tosay that he is also a pensioner as far as 2/3'dpension is concerned. Such absorbee stand on adifferent footing and they fall in a different class by themselves on this iSSUE/.Under thosecircumstances, the inescapable conclusion' is that 1/3'dpension has to be arrived at only on thebasis of the basic pension divided by three after completion of 15 years which becomes drawableas on the date of respective dates and not to be. arrived by dedw:;;tingRs. 403/- from the pension.Therefore, the petitioner willbe entitled to as folfows:- ..

, ,. Rs. 201/-

Rs. 538/- Dearness Relief.Rs. 125/- Additional Benefits:

_--: Total Rs. 864/-

~. (h" .rf) ~ '".av p".ndj : om 01.01.96onwards(5 Pay Commission).. ,J 3'dof Basic Pension(1,350/1/3'd) Rs. 450/-

t .'~111 'I

' Rs. 185/- Interim ReliefRs. 1,998/- Dearness Relief

, ,

~

Rs. 540/- Fitment

~ He... ..." ... Total Rs. 3,'n3/-

' this case the employee had commuted minimum permissible pension i.e. 1/.'? But, even if.1I-'M... ) ser portion is commuted, the pro-rata c.ommuted portion has to be deducted from the basic.

pbhsion to arrive at restorable pension, but however, he will get dearness relief, interim relief etc.on fullbasic pension"

Restorable Pension:From 28.06.87 to 31.12.1995Basic Pension (604/1/3rd)

#2#,~ :

3. The modalities of implementatiqnotabove jud~ement have been under active cOl"\siderationof theGovernment. The President ispleas~d~o.decide that in partial modification of this Department's O.M. No.

4/59/97-P&PW (D) dated 14thJU'Y1998, the Govemmentservantsw~()had'drawn lump sum payment Inrespect of pro-rata pension (1/3r as well as 2/3rd)on absorption ina'P$U/Autonomous Body and havebecome entitled to restoration 0(1/3rd commuted' portion of pension as per the provisions of thisDepartment's O.M. No. 34/2I86-P&PW dated 5th March 87 after 15 years from the date of commutation or1.4,85 whichever is later, shall be entitled to the benefit of revision of restored amount of 1I3rdcorllmutedportion of pension as explained hereunder:-

( I ) As on 01.01.1986

(a) The full pension of the absorbees'shall be notionally revised w.e.f. 1.1986 based on full pensionon absorption in accordance with the instructions for revision of pension, issued for implementingthe 41h Pay Commission Recommendations. '

(b) The restorable 1/3rdpension shall be the sum ofthe following:-

I. 1/3mof full pension as on 31.12.1985.II. Deamess Relief on full pension as on 31.12.1985.

III. Additional benefits on full pension as per this Department OM No. 2/1/87- PIC dated16.4.1987 relating to implementation of the 4th Pay Commission Recommendations.

( II ) As on 01.01.1996

(a) The full pension of the absorbees shall be notionally revised w.e.f. 1.1.1996 based on fullpension as on 31.12.95 in accordance with the instructions for revision of pension. issue(j forimplementing the 5th Pay Commission Recommendations

(b) The restorable 1I3rdpension shall be the sum of the following:-

I. 1/3rd of full pensionas on 31.12.1995.II. Dearness Relief on full pension as on 31.12.1995,III. IR-I and JR-IIIV, Fitment @ 40% of the full pension as on 31.12.1995*

(* in terms of this Deptt. OM No.45/86/07-P&PW(A)-pt,1I Dated 27.10.1997)

4. Payment of DR shall be on full pension and is subjact to the condition that the absorbed employeewas not re-employed/employed under the Central Government or State Government or aCorporation/Company/Body/Bank under them in, India or abroad, including permanent absorption in suchCorporation/Company/Body/Bank at the time of restoration., '

5. The benefit of revision of restored amount of 1/3rdcommuted portion of p~3nsionshall be admissiblefrom the date the commuted portion of pension is restored.

6. This issues with the concurrence of Ministry of Law vide their UO No. 11088/07-A dated 17.8.2007. and Ministryof Finance(Departmentof Expenditure)vide their UO No. C-47/E.V./2007dated27.8.2007.

7. Hindi version will follow. " j\,,-~

lYC,v ~1-~b\'l\t r

(Amitabh Dwivedi)Under Secretary to the government of India

To

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