New Delhi: The Supreme Court has upheld the validity of a regulation of the Uttarakhand Public Service Commission (Conditions of Service) Regulations 2004 that applies the ‘pay minus pension’ system to government servants who get appointed to constitutional offices after retirement.
In a judgement pronounced last week, a bench of Justices N.V. Anjaria and SVN Bhatti overturned a 16-year-old Uttarakhand High Court decision that quashed Regulation 7(2)of the Uttarakhand Public Service Commission (Conditions of Service) Regulations 2004.
Under this rule, the Governor of the state determines the appointee’s remuneration by deducting the service pension earned from their previous government employment from the fixed salary of the commission post.
This rule applies only to retired Group A civilian and commissioned defence officers taking post-retirement jobs in constitutional offices.
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The dispute
The dispute dates to 2006, when a retired lieutenant general of the Indian Army and a retired additional secretary of the Uttarakhand government were appointed as the chairman and member of the Uttarakhand Public Service Commission (UKPSC), respectively. Both challenged Regulation 7(2) of the state’s 2004 service regulations, which permits salary adjustments against pensions. They argued their pensions were vested rights that could not be legally docked.
The retired general argued that his military pension was a vested right earned through his previous service in the armed forces, and had nothing to do with his responsibilities as chairman of the public service commission. The retired additional secretary too challenged his deduction on similar grounds.
Both approached the Uttarakhand High Court, challenging Regulation 7(2) of the UKPSC. The high court delivered its ruling on 15 April, 2010, which declared Regulation 7(2) unconstitutional, holding that it violated Article 14 read with Article 39(d) of the Constitution, particularly the principle of equal pay for equal work. The high court further observed the Governor’s order under this rule was notified two years after the two got the post-retirement employment and rejected its retrospective application.
Article 14 (Right to Equality) states that the state shall not deny to any person ‘equality before the law’ or the ‘equal protection of the laws’ within the territory of India. It prohibits arbitrary discrimination and requires that likes should be treated alike.
Article 39(d) (Directive Principle of State Policy) directs the state to policy-making that secures ‘equal pay for equal work for both men and women’. Because directive principles (Part IV) are non-justiciable on their own (they cannot be directly enforced in court by themselves), courts bridge them with fundamental rights.
The Uttarakhand government subsequently approached the Supreme Court, challenging the high court’s decision.
What the Supreme Court ruled
The central question before the Supreme Court was this: Can a retired government employee appointed as chairman or member of a state public service commission receive the full salary attached to the new position in addition to the pension earned through previous government service?
The Supreme Court made the following legal findings. Firstly, pension is withheld, not permanently withdrawn. Secondly, the court ruled that equal pay for equal work does not apply in this situation. The court held that the high court had incorrectly applied Article 14 and Article 39(d). Consequently, Regulation 7(2) could not be declared unconstitutional on this ground.
The apex court noted the 1998 precedent involving Haryana. The question in that case was whether a retired person could receive pension for his earlier service as a member, while continuing to serve as chairman. The court had held that pension for the earlier service could not be drawn during the period in which he functioned as chairman. However, once he ceased to be chairman, the embargo would be lifted, and he would become entitled to the pension.
The court rejected the argument of the petitioners that the governor’s determination was issued in September 2008, two years after their appointment. The court pointed out that Regulation 7(2) was already in force when the two individuals accepted their appointments in 2006. The regulation itself empowered the governor to make the determination.
The judge made an interesting distinction between retrospective and retroactive operation. He observed: “The submission that the decision was retrospectively applied is misconceived in law. In these circumstances, it cannot be said that there is an element of retrospectivity, at the best, the office memorandum reflecting the decision operated retroactively.”
The court said: “Both of them accepted the post with knowledge about the currency and applicability of the said regulation,” adding: “One who participates in a game, cannot later challenge the rules of the game.”
Regarding the withheld pension, the judge said: “At the end of the tenure of the chairman or, as the case may be, the member, the entitlement to pension which was kept in abeyance would revive and the petitioners-respondent No. 1 herein would get the pension deducted during the tenure of their chairmanship or membership of the Uttarakhand PSC”.
Giridharan Velamore is an alum of ThePrint School of Journalism, and an intern with ThePrint.
(Edited by Nardeep Singh Dahiya)
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