THE GOVERNMENT OF ANDHRA PRADESH AND ORS. versus SYED YOUSUDDIN AHMED

Citation: [1997] SUPP. 3 S.C.R. 419 · Decided: 13-08-1997 · Supreme Court of India · Bench: SUJATA V. MANOHAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

> 
THE GOVERNMENT OF ANDHRA PRADESH AND ORS. 
A 
v. 
SYED YOUSUDDIN AHMED 
AUGUST 13, 1997 
[SUJATA V. MANOHAR AND G.B. PATTANAIK, JJ.] 
Service Law--Governmenc employee-Nature of relationship between 
the Government and its employee-Whether contractual-Held, origin of 
Government service is contractual but once appointed, the Government ser-
vant acquires a status, and rights and obligations are detennined by Statute. 
B 
c 
Constitution of India-Article 309, proviso-Power of Government to 
make /aw-Unilateral amendment without consent of Government 
employee-Determination of service condition-Retrospective amend-
ment........Pennissibilty of-Held, the Legislature under Article 309 and the 
Governor under proviso to Article 309 of the Constitution can make law D 
detennining the service conditions and such law can also be retrospectively 
made. 
A.P. Revised Pension Rules, 198o-:R.ule 31........Pension-Rule 
amended-Applicability of-Held, the amended Rule 31 became applicable 
to all the employees who were in service on the date the amended Rule came E 
into force for purpose of finding out the meaning of the expression 
'emoluments' on the basis of which the pension of the employee has to be 
calculated on superannuation. 
Fundamental Rules-Rr. 9(21)(a)(i), 9(23), 9(25)-Pay Incentive 
award-Whether can be treated as part of emoluments for detennining pen-
sion-Held, whether the 'incentive award' is held either a 'special pay' or 
'personal pay' the same would not from part of 'pay' and consequently would 
not f om1 part of emoluments under Rule 31 of the AP Revised Pension Rules, 
1980. 
The Respondent was an employee of the erstwhile Hyderabad State 
and after the merger of the said State and. on re· organisation, he became 
F 
G 
an employee of the State of Andhra Pradesh, While he w~s working as 
Deputy Executive Engineer in the Irrigation Department, he had been 
granted four advance increments as 'incentive award'. Since this amount 
was not taken into account while calculating his pension, he approached H 
419 
420 
SUPREME COURT REPORTS [1997] SUPP. 3 S.C.R. 
A 
the Administrative Tribunal. 
B 
The Tribunal directed that the incentive increments drawn by the 
Respondent on the date of his superannuation should be taken as part of 
his emoluments and therefore, should be taken into account for determina-
tion of his pension. Hence this appeal. 
Allowing the appeal, this court 
HELD : 1. The A.P. Revised Pension Rules were framed by the Gover-
nor in exercise of power under proviso to Article 309 of the Constitution. The 
C relationship between the Government and its servant is not like an ordinary 
contract of service between a master and servant but a legal relationship 
something in the nature of status. Origin of Government service is contrac-
tual. But once appointed to his post or office, the Government servant ac-
quires a status and his rights and obligations are no longer determined by 
consent of both parties but by statute or statutory rules which may be framed 
D and altered unilaterally by the Government. [ 423-F-G] 
E 
F 
2. The Legislature under Article 309 of the Constitution and the 
Governor under proviso to Article 309 of the Constitution can make law 
determining the service conditions of the Government employees and such 
law can also be retrospectively made. [ 423-A] 
3. In the present case question of retrospective application of the 
amended provisions of Rule 31 of the Revised Pension Rules really does not 
arise. It becomes applicable to all the employees who were in service on the 
date the amended rules came into force for the purpose of finding out the 
meaning of the expression 'emoluments' on the basis of which the pension of 
the employee has to be calculated on superannuation. [ 424-A] 
4. The incentive increment which is granted to a Government servant 
for arduous nature of duty discharged by a Government servant though 
wouIJ not come directly under the purview of the Medical and Health 
G Department Memorandum dated 5.5.78 relating grant of increment for un-
dergoing sterilization operation, yet in view of the Government letter dated 
25.5.84 issued by the General Administrative Department making term~ and 
conditions of go.verning the grant of family planning increment incentive 
applicable, the said incentive increment can be held to be a 'personal pay' of 
the Respondent. But neither the aforesaid Health Department Memoran-
H dum dated 5.5.78, nor the Government letter d

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