Section 3 of The Comptroller and Auditor-Generals Duties Powers and Conditions of Service Act 1971

Section 3 of The Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971

Salary of the Comptroller and Auditor-General

Original Text

3. Salary.—There shall be paid to the Comptroller and Auditor-General a salary which is equal to the salary of the Judge of the Supreme Court:
Provided that if a person who, immediately before the date of assuming office as the Comptroller and Auditor-General, was in receipt of, or, being eligible so to do, had elected to draw, a pension (other than a disability or wound pension) in respect of any previous service under the Government of the Union or any of its predecessor Governments, or under the Government of a State or any of its predecessor Governments, his salary in respect of service as Comptroller and Auditor-General shall be reduced—

(a) by the amount of that pension; and

(b) if he had, before assuming office, received, in lieu of a portion of the pension due to him in respect of such previous service, the commuted value thereof, by the amount of that portion of the pension; ***

Visual Summary

Equivalent Salary

The CAG’s salary is pegged exactly to that of a Supreme Court Judge.

Pension Deduction

If receiving a government pension, the salary is reduced by that amount.

Commuted Value

Deductions include any portion of the pension that was taken as a lump sum.

Summary

Section 3 establishes the remuneration for the Comptroller and Auditor-General (CAG) of India. To ensure the dignity and independence of the office, the salary is legally fixed to match that of a Judge of the Supreme Court. However, since many CAGs are appointed from retired government service, the section includes a proviso to prevent “double benefits.” If the appointee is already entitled to a pension from previous government service, their new salary is reduced by the amount of that pension (including any commuted portion), ensuring their total compensation from the public exchequer remains balanced.

Key Takeaways

Status Parity: The CAG is treated on par with a Supreme Court Judge regarding salary.
Pension Adjustment: Any existing pension from Union or State service is deducted from the salary.
Exclusions: Disability or wound pensions are not deducted from the salary.

Key Analysis

✦
Constitutional Independence: By linking the salary to that of a Supreme Court Judge, the Act ensures that the CAG’s remuneration is not subject to the arbitrary whims of the Executive, thereby securing the independence of the audit institution.
✦
Fiscal Prudence: The proviso reflects a principle of financial propriety. Since the CAG is often a retired senior bureaucrat, the state should not pay for their services twice (once via full pension and again via full salary). The deduction mechanism balances this.
✦
Commuted Value Inclusion: The Act is thorough in including the “commuted value” of the pension. Even if an officer took a lump sum advance on their pension earlier, it is mathematically treated as if they are still receiving it for the purpose of salary deduction.

Key Ingredients

Appointment as Comptroller and Auditor-General.
Determination of current Supreme Court Judge salary.
Verification of previous service under Union or State Government.
Calculation of pension and commuted pension value (excluding disability pension).
Reduction of salary by the pension amount.

Related Provisions

Practical Illustrations

Example 1: Retired IAS Officer
Mr. A, a retired IAS officer, is appointed as CAG. The salary of a Supreme Court Judge is ₹2,50,000. Mr. A already draws a pension of ₹50,000 from his previous service. Under Section 3, his salary as CAG will be ₹2,50,000 minus ₹50,000 = ₹2,00,000 per month.

Example 2: Commuted Pension
Ms. B is appointed as CAG. She had commuted 40% of her pension earlier, taking a lump sum. Her full pension entitlement was ₹40,000 (so she currently receives ₹24,000 cash + ₹16,000 commuted value). The deduction from her CAG salary will be the full ₹40,000, not just the cash component she receives.

Process Flowchart

CAG Appointed

Previous Govt Pension?

Yes

Calculate Deduction: Pension + Commuted Value

Pay = SC Judge Salary – Deduction

Practice Questions

Q: The salary of the Comptroller and Auditor-General is equal to the salary of which of the following?

A. The President of India
B. The Cabinet Secretary
C. A Judge of the Supreme Court
D. The Chairman of UPSC

View Correct Answer

Correct Answer: C. A Judge of the Supreme Court
Reasoning: Section 3 explicitly states that the salary shall be equal to the salary of the Judge of the Supreme Court.

Q: Which type of pension is NOT deducted from the salary of the Comptroller and Auditor-General?

A. Superannuation pension
B. Disability or wound pension
C. Retiring pension
D. Commuted pension

View Correct Answer

Correct Answer: B. Disability or wound pension
Reasoning: The proviso in Section 3 specifically excludes “disability or wound pension” from the reduction calculation.

Q: If a CAG appointee had previously commuted a portion of their government pension, how is the salary reduction calculated?

A. Only the monthly pension actually received is deducted.
B. No deduction is made for commuted pension.
C. The salary is reduced by the full pension amount, including the commuted value.
D. The commuted value is deducted from the salary as a one-time payment.

View Correct Answer

Correct Answer: C. The salary is reduced by the full pension amount, including the commuted value.
Reasoning: Clause (b) of the proviso states that if a portion was commuted, the salary is reduced by the amount of that portion as well.

Frequently Asked Questions

Why is the CAG’s salary linked to a Supreme Court Judge?

This linkage is designed to ensure the independence and high constitutional status of the CAG. By equating the salary to a Supreme Court Judge, the Parliament ensures that the CAG is not financially dependent on the Executive (the very body they audit) and holds a rank commensurate with the importance of their duties.

What is “commuted value” of pension?

Commutation of pension allows a government servant to withdraw a lump sum amount from their future pension in advance. Section 3 ensures that even if a CAG appointee has taken this lump sum, their salary is reduced as if they were still drawing the full monthly pension, preventing them from gaining a financial advantage over those who did not commute their pension.

Does this section apply to pensions from State Governments as well?

Yes. The section explicitly mentions pensions in respect of previous service under the “Government of the Union” or “Government of a State.” A retired State Government officer appointed as CAG would also face the same salary deductions.

Conclusion

Section 3 is a critical provision that defines the financial standing of the Comptroller and Auditor-General. By equating the salary to that of a Supreme Court Judge, it reinforces the constitutional importance of the role. Simultaneously, the detailed provisions regarding pension deductions demonstrate a commitment to fiscal responsibility, ensuring that public funds are utilized efficiently without duplicating payments for public service.