Case Note & Summary
The appellant, a former Havildar in the Indian Army, completed his original tenure of 24 years on 27 December 2010 and was granted a two-year extension under the Army Headquarters' policy dated 21 September 1998. During the extended tenure, he suffered a stroke and was re-categorised as SHAPE-3 (Permanent) with 80% disability. The Release Medical Board found the disability not attributable to or aggravated by military service. He was discharged from service. The appellant sought disability pension, which was granted by the Armed Forces Tribunal (AFT) on 2 July 2014, and rounding off to 100% was allowed on review on 30 October 2014. In 2016, he moved the AFT for ex-gratia compensation of Rs 9,00,000 under a policy circular dated 26 December 2011. The AFT rejected the claim on grounds of Order II Rule 2 CPC, limitation, and merits, holding that the appellant was not invalidated out of service but discharged during extended tenure. The Supreme Court considered the appeal on merits. The Court examined Regulations 173 and 173-A of the Pension Regulations for the Army, 1961, and the policy circular dated 26 December 2011. Regulation 173-A creates a deeming fiction that individuals discharged during extended service due to low medical category are deemed invalidated for the purpose of entitlement rules for disability pension. However, the Court held that this deeming fiction is limited to disability pension and does not extend to ex-gratia compensation. The policy circular requires that the personnel be boarded out of service on account of disability attributable to or aggravated by military service. In this case, the appellant's discharge was under the conditions of the extension policy (Annexure B), which mandates discharge if a permanent low medical category arises during extended tenure. The Court found that the appellant did not fulfill the conditions for ex-gratia compensation as he was not boarded out due to disability attributable to military service. The appeal was dismissed, upholding the AFT's decision on merits.
Headnote
A) Army Law - Disability Pension - Ex-Gratia Compensation - Regulation 173-A, Pension Regulations for the Army, 1961 - Policy Circular dated 26 December 2011 - The appellant, a Havildar, was granted extension of service and later discharged due to permanent low medical category (SHAPE-3). He was granted disability pension under Regulation 173-A deeming him invalidated for pension purposes. However, the Supreme Court held that the deeming fiction is confined to disability pension and does not extend to ex-gratia compensation. The policy circular requires that the personnel be boarded out of service on account of disability attributable to military service, which was not satisfied as the discharge was under the conditions of the extension policy (Annexure B) and not due to invalidation. The appeal was dismissed. (Paras 1-10) B) Army Law - Extension of Service - Discharge During Extended Tenure - Annexure B to Policy Letter dated 21 September 1998 - The appellant was granted extension under the policy for Personnel Below Officer Rank (PBOR). Annexure B provides that if a PBOR is placed in permanent low medical category (except battle casualties) during extended tenure, the individual will be discharged under existing rules. The appellant's discharge was in accordance with this condition, and not due to invalidation out of service. Hence, the essential requirement for ex-gratia compensation under the policy circular dated 26 December 2011 was not fulfilled. (Paras 7-10)
Issue of Consideration
Whether an Army personnel discharged during extended tenure due to permanent low medical category is entitled to ex-gratia compensation under the policy circular dated 26 December 2011
Final Decision
The Supreme Court dismissed the appeal, holding that the appellant was not entitled to ex-gratia compensation as he was not boarded out of service on account of disability attributable to military service. The deeming fiction under Regulation 173-A is limited to disability pension and does not extend to ex-gratia compensation. The discharge was under the conditions of the extension policy (Annexure B), not due to invalidation.
Law Points
- Ex-gratia compensation requires boarding out of service due to disability attributable to military service
- Deeming fiction under Regulation 173-A limited to disability pension
- Policy circular dated 26 December 2011 not applicable to discharge during extended tenure under Annexure B conditions
