Justice at last for PSU absorbees who had opted for 1/3rd pro-rata pension: Government implements decision of the Madras High Court for payment of 100% pension, as affirmed by the Supreme Court, for all similarly placed employees

On dismissal of the SLP filed by the Central Government against the judgement of the Madras High Court, the Department of Pension and Pensioners’ Welfare of the Government of India has issued orders for all similarly placed employees finally undoing more than four decades of patent injustice.

In the 1970s, Government employees who opted to join Public Sector Undertakings (PSUs) or autonomous bodies were made entitled to a payment of lumpsum amount in lieu of pension that had accrued from their Government Service. In terms of Rule 37-A of the Central Civil Service (Pension) Rules, 1972 (added in 1973), an employee was entitled to a lump sum amount not exceeding the commuted value of one-third of the pension and terminal benefit equal to twice the aforesaid lump-sum amount, subject to the condition that the Government servant surrendered his right of drawing two-thirds of his pension.

Later, on the directions of the Supreme Court, orders were issued to restore 1/3^rd pension after the period of commutation culminated.

An employee however approached the Central Administrative Tribunal stating therein that even the rest of the 2/3^rd portion needed to be restored on culmination of the period of commutation since the undertaking taken under Rule 37-A was in contravention to provisions of Section 12 of the Pension Act, 1871, which provided that a person could not be made to wish away his right to pension by any authority. The petition filed by the employee was however dismissed by the Tribunal.

The order of the Tribunal was then challenged by the employee, K Ganesan, in the Madras High Court, which ruled in his favour and held  that the undertaking taken from the employee was repugnant of the Pensions Act and the 2/3^rd commuted amount also needed to be restored after expiry of the period of commutation. The Madras High Court directed the Government to do the needful and set aside the order of the Tribunal. The High Court also observed that the earlier decisions of the Supreme Court were not on this point and neither were the provisions of the Pensions Act brought to the knowledge of the Supreme Court. The High Court however refused to grant interest on the arrears in view of the major delay in challenging the provisions of the Rules by the employee.

The Central Government thereafter went into appeal to the Supreme Court but the SLP was dismissed in 2016. The Government thereafter filed a Review which was also dismissed in March 2017.

The Government has now issued orders implementing the decision for all similarly placed employees thereby directing the release of 100% pension from the date of culmination of the period of 15 years from commutation. As a result, all such PSU/Autonomous bodies absorbees shall be entitled to 100% restoration of pension on the date of completion of 15 years from the date of commutation. All such employees would now be entitled to full arrears from the 4^th, 5^th, 6^th and the 7^th Pay Commissions, as the case may be.

Again, this case shows as to how the above proactive approach of the Department of Pension & Pensioners’Welfare is in contrast with the approach of Department of Ex-Servicemen Welfare under the Ministry of Defence. While even single-liner judgements and orders of the High Courts and the Supreme Court are implemented across the board for all similarly placed employees/pensioners by the former, the latter does not even implement decisions for specific petitioners unless multiple litigation is indulged in, including contempt and execution applications.