Entitled Pensioners Are Eligible For Revised Pension If Pay Scale Is Revised Retrospectively: Kerala High Court

A recent judgment by the Kerala High Court clarified that a pensioner is entitled to receive a revised pension if the pay scale is revised with retrospective effect. Thus, the calculation of pension must consider the revised pay scale for a pensioner even if such a person has retired before the pay revision order has been passed, providing that the pension is eligible to receive a pension. According to a Financial Express report, Justice A. Muhamed Mustaque and Justice P. Krishna Kumar observed, “The law is settled that when the pay is revised retrospectively, that revised pay should be taken into account when calculating the pension, even if the pensioner retired before the issuance of the pay revision order, provided he is entitled to get the revised pay.”

The court upheld the earlier order of the Kerala Administrative Tribunal (KAT) and cancelled the government directive according to which the pension of university teachers under the UGC pay scale was tied to the 2009 pay scale instead of 2006.

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The KAT had earlier rejected the government clarification by referring to the Supreme Court ruling in the case ‘U.P. Raghavendra Acharya and Others v. State of Karnataka and Others (2006), in this regard.

The high court considered Rule 65 of Part III of the Kerala Service Rules (KSR) “Fifty per cent of last ten months’ average emoluments subject to the maximum limit for pension prescribed by the Government from time to time” to determine a person’s pension eligibility, and observed, “When the KSR makes it clear that every pensioner is entitled to get his pension fixed based on the average of the last ten months’ pay drawn by him, the Government is not justified in postponing the benefit to a later date for the mere reason that the pension of the other State Government employees was revised from that date.” 

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A Brief Background:

The case referred to the government order dated May 7, 2011. Under this order, the pay and allowance of the university and college teachers under the UGC pay scales were revised. As per the order, the teachers who retired on or before January 1, 2006, will receive a pension according to the revised pay scale from that date.

The pension calculation formula remained the same: 50 per cent of the average salary from the last ten months of service.

Until this point, things were clear. But later, the government issued a clarification regarding this order. It stated that the UGC scheme does not specifically define the pension provisions. Thus, the revised pension provision for UGC teachers would be applicable from July 1, 2009, so as to match the pension revision timelines of other state government employees. This meant that the rule applicable to other government employees ‘retired on or before January 1, 2006’ would not apply to university teachers under UGC from 2006.

In context with this, the Kerala High Court clarified that there is no reason for two years of delay to 2009, for extending benefits to eligible pensioners. It rejected the government’s clarification and directed it to pay arrears to eligible pensioners with retrospective effect.

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The Kerala High Court in the judgment clarified that pensioner benefits to UGC teachers should not be treated differently from other government employees.

This would benefit government employees, particularly the university teachers covered under the University Grant Commission (UGC) pay scale.