Right To Equality Would Apply To A Man Who Has No Choice But To Accept A Standard Form Contract However Unfair It May Be : Supreme Court

The Supreme Court has directed the grant of disability pension to a member of the Territorial Army by rejecting the reliance placed by the Union of India on a document signed by the appellant at the time of enrollment in the Territorial Army, whereby he had apparently waived his right to get enhanced pension.

The Court said that the Army cannot rely on the said document in view of the unequal bargaining power between the parties.

"Right to Equality guaranteed under Article 14 of the Constitution of India would also apply to a man who has no choice or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. We find that the said observations rightly apply to the facts of the present case. Can it be said that the mighty Union of India and an ordinary soldier, who having fought for the country and retired from Regular Army, seeking re­ employment in the Territorial Army, have an equal bargaining power", the Court observed in the judgment.

The bench of Justices LN Rao and BR Gavai was considering a civil appeal assailing the judgement dated October 10, 2018 passed by the Armed Forces Tribunal, Regional Bench, Lucknow by which it had dismissed the appellant's OA seeking grant of disability pension.

The appellant had also challenged the order dated October 31, 2018 by which the AFT although allowed leave to appeal but framed a different question of law.

While allowing the appeal in Pani Ram v. Union of India and Ors the Supreme Court observed,

Factual Background

After serving for about 25 years in the Infantry of the Regular Army, the appellant got re-enrolled in the Territorial Army as a full­time soldier on August 1, 2007. On April 5, 2009 the appellant was granted 10 days' part of annual leave from 15th April 2009 to 24th April 2009, to proceed to his home, which was at a distance of a few kilometers from the Unit where he was posted.

When he was coming back on his scooter to rejoin his duty on April 24, 2009 he met with a serious accident which resulted in amputation of his right leg upto the knee. After he was discharged from Artificial Limb Centre on September 14, 2009 he was granted 28 days sick leave with the instruction to report back to the ALC.

After the expiry of sick leave, he was re­ admitted to ALC on 11th October 2009. On 21st October 2009, the Medical Board was held at ALC which assessed the appellant's disability to be 80%. However, it could not give any opinion about the attributable aspect of the injury. On 07th November 2009, the appellant was discharged from ALC with instruction to report back to his Unit.

To investigate into the circumstances under which the appellant sustained injury, a Court of Inquiry ("CoI") was held from 13th November 2009 onwards. The CoI found that the injury sustained by the appellant was attributable to military service and it was not due to his own negligence which was duly approved by the Station Commander on January 11, 2010.

On 25th October 2010, a re-categorization Medical Board was held at ALC, which maintained appellant's disability at 80% and declared it as attributable to military service.

Subsequently, based on the Invaliding Medical Board's opinion, the appellant on January 1, 2012 was invalided out of service with 80% disability which was attributable to military service.

Proceedings Before Armed Forces Tribunal

In accordance with Regulation No 292 of the Pension Regulations for the Army, 1961 the appellant approached the AFT for grant of disability pension. His claim was resisted by the respondents on the ground that the appellant, after discharging from mechanized infantry as a pensioner, was re-enrolled in 130 Infantry Battalion (Territorial Army), Ecological Task Force, Kumaon, on 1st August 2007 as an Ex­Serviceman (ESM). The respondents further denied his claim stating that he was not entitled to any pensionary benefits in view of the letter of the Government of India, Ministry of Defence, dated 31st March 2008.

Although the AFT held that the injury sustained by the appellant which resulted into 80% disability was found by the competent authority to be aggravated and attributable to the military service, but it rejected his claim on the ground that a separate scheme and service conditions have been created for the Members of Ecological Task Force ('ETF'), which was accepted by the appellant and as such, he was not entitled to disability pension.

The appellant filed a MA for leave to appeal against order dated October 10, 2018 wherein he had framed the following question of law of general public importance:

"Whether the terms and conditions of service of a member of the Territorial Army (TA) during the period of his embodiment with the T.A. will be governed by the statutory rules which provide for grant of 'disability pension' or by the departmental orders which deny the grant of the disability pension to the members of a particular unit of the T.A. to which such individual belongs."

On October 31, 2018 the AFT allowed the application for grant of leave to appeal, but framed a different question of law, as under:

"Whether the members of the Ecological Task Force of Territorial Army are entitled to pensionary benefits at par with the members of regular Army in spite of the aforementioned MOD letter dated 31.03.2008 whereby pensionary benefits have been denied."

Aggrieved, the appellant approached the Supreme Court.

Submission of Counsels

Advocate Siddhartha Iyer, appeared on the appellant's behalf and ASG Vikramjit Banerjee appeared on behalf of the Union of India.

The Union of India had argued that it had provided separate terms and conditions were provided vide communication dated March 31, 2008 as per which members of the ETF would not be entitled for disability pension. Reliance was also placed on the document titled "Certificate" dated 30th August 2007, signed by the appellant wherein under condition (f), it is stated that, "(f) I will not be getting any enhanced pension for having been enrolled in this force."

Supreme Court's Analysis

The Supreme Court in the judgement authored by Justice BR Gavai by relying on Section 9(1) of the Territorial Army Act, 1948 which deals with Application of the Army Act, 1950, observed that,

"Every such officer or enrolled person in the Territorial Army when holding the rank, shall be subject to the provisions of Army Act, 1950 and the rules or regulations made thereunder, equivalent to the same rank in the Regular Army."

Referring to Chapter 5 of the Pension Regulations for the Army, 1961 which deals with Territorial Army, the bench said, "It could thus be seen that the grant of pensionary awards to the members of the Territorial Army shall be governed by the same rules and regulations as are applicable to the corresponding persons of the Army except where they are inconsistent with the provisions of regulations in the said chapter."

Relying on Chapter 3 of the Pension Regulations for the Army, 1961 which deals with Disability Pensionary Awards, the bench said that a perusal of the same revealed that an individual who was invalided out of service on account of disability, which was attributable or aggravated by Military Service in non­ battle casualty and was assessed 20% or more, would be entitled to disability pension.

The bench thus observed that the EFT was established as an additional company for 130 Infantry Battalion of Territorial Army and it was not in dispute that the other officers or enrolled persons working in the Territorial Army were entitled to disability pension under Regulation No. 173 read with Regulation No. 292 of Pension Regulations for the Army, 1961. It further observed that when the appellant was enrolled as a member of ETF which was a company for 130 Infantry Battalion (Territorial Army), it saw no reason as to why the appellant was denied the disability pension and specifically when the Medical Board and the COI found that the injury sustained by the appellant was attributable to the Military Service and was not due to his own negligence.

Thus while allowing the appeal, the bench said,

"In case of conflict between what is stated in internal communication between the two organs of the State and the Statutory Rules and Regulations, it is needless to state that the Statutory Rules and Regulations would prevail. In that view of the matter, we find that AFT was not justified in rejecting the claim of the appellant."

Case Title: Pani Ram v. Union of India and Ors|Civil Appeal No. 2275 OF 2019

Coram: Justices LN Rao and BR Gavai

Citation : LL 2021 SC 754

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