In a judgment reaffirming fairness in pension calculations, the Kerala High Court ruled that pensions must be calculated based on retrospectively revised pay scales, even for retirees who left service before the issuance of the pay revision order. The division bench comprising Justice A. Muhamed Mustaque and Justice P. Krishna Kumar delivered the verdict in OP(KAT) No. 376/2022 and WP(C) No. 38975/2022, dismissing the State Government’s petitions against retired UGC professors.
Background of the Case
The case arose from disputes over the computation of pensions for professors who retired under the UGC pay scale after January 1, 2006, but before the State Government’s subsequent decision to revise pension benefits. The key contention was whether the revised pay introduced retrospectively from January 1, 2006, could be used to calculate pensions for retirees who left service prior to the 2009 notification implementing the revision.
The retired professors, including P.V. Mohan, K. Nirmala, and others, contested the government’s stance, arguing that the delay in notifying pay revisions should not adversely affect their rightful pension entitlements. They relied on Part III of the Kerala Service Rules (KSR), which mandates pension calculation based on the average of the last ten months’ emoluments.
Legal Issues
The court examined several critical issues:
1. Entitlement to Pension Based on Revised Pay: Whether retirees who left service before the issuance of the pay revision order were entitled to pensions computed on retrospectively revised pay scales.
2. Validity of Government Policy Decisions: The State argued that its financial constraints justified implementing pension revisions only from July 1, 2009.
3. Precedents in Pension Disputes: The court referred to the Supreme Court’s ruling in U.P. Raghavendra Acharya v. State of Karnataka, which held that retrospective pay revisions must benefit retirees during the covered period.
Court’s Decision and Observations
Dismissing the State’s arguments, the court unequivocally ruled in favor of the retired professors. It noted that when pay is revised retrospectively, the revised emoluments must be used to calculate pensions, regardless of when the revision order is issued. Key excerpts from the judgment include:
“When the pay is retrospectively revised, the last ten months’ salary is to be reckoned as per the revised pay for calculating pension, even if the pensioner retired prior to the issuance of the pay revision order.”
The court further stated that postponing pension benefits to July 2009, as per government orders, would violate statutory provisions under the KSR and the principles laid down in Raghavendra Acharya. It emphasized:
“An employee is entitled to a pension based on the average emoluments he received in the last ten months. The mere delay in issuing the pay revision order cannot deprive a retiree of this vested right.”
The court upheld the Kerala Administrative Tribunal’s earlier decision, directing the State Government to calculate pensions for the petitioners based on the revised pay scales effective from January 1, 2006. The State was also ordered to disburse arrears within four weeks, considering the prolonged delay.
Legal Representation
The State of Kerala was represented by Special Government Pleader P.K. Babu, while the retired professors were represented by advocates C.P. Kunjhikannan, M.S. Radhakrishnan Nair, and Lakshmi Ramadas. Additional respondents included the University Grants Commission (UGC) and the Union of India.
