NEW DELHI: Assuaging a major grievance of officers upto Brigadier level, the Supreme Court on Tuesday directed the Centre to appropriately fix rank pay, introduced to pay them a little more than their civilian counterparts to attract youth to make a career in the Army, and disburse the arrears since January 1, 1986.

A bench of Justices R M Lodha, T S Thakur and A R Dave rejected the Union government's application for modification of the apex court's March 8, 2010, order agreeing with the reasoning of Kerala High Court in the case of Major Dhanapalan. The HC had directed proper fixation of rank pay from January 1, 1986, and payment of arrears with 6% interest.

In abiding by the court order, the exchequer could face a financial liability of close to Rs 1,600 crore as the SC asked the Centre to pay annual interest of 6% to be calculated from January 1, 2006.

This order would apply to all officers of the Army, the Navy and the Air Force, both serving and retired, irrespective of whether they filed petition in court or the Armed Forces Tribunal. The court asked the government to comply with the order in three months.

The grievance of the officers in the Army arose from the wrong fixation of rank pay as awarded by the 4th Pay Commission, in which the element of rank pay was introduced for ranks from Captain to Brigadier in the Army and their equivalent ranks in the Air Force and the Navy, in addition to pay in the integrated scale.

The rationale of this was to make the Armed Forces attractive career option and to continue the edge that was always provided to the defence officers compared to their civilian counterparts due to the difficult and challenging nature of their job profile.

However, at the time of fixation, the rank pay was first deducted to arrive at the total emoluments and thereafter added after fixation in the integrated scale. This ensured that the final fixation of the total pay of the officer became at par with his civilian counterpart and the edge was neutralized during fixation, officers had argued through advocate on record Aishwarya Bhati.

This SC order will benefit a large number of officers who were in the rank of Captain to Brigadier in the Army and equivalent ranks in the Air Force and the Navy, between January 1, 1986 and January 1, 2006.