When Pay Scale Is Revised Retrospectively, Entitled Pensioners Must Be Given Benefits Even If They Retired Before Revision Order: Kerala HC

“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 prior to the issuance of the pay revision order, provided he is entitled to get the revised pay.”

As per the facts, an order dated May 07, 2011 was issued by which the Government revised pay and allowance of college/University teachers in the State who receive UGC pay scale. It is stated that the order stipulated that persons who retired on or after January 01, 2006 would receive their pension based on revised pay scale effective from January 01, 2006 by applying the existing formulae/rules and the present system of computation of pension at 50% of ten months' average emoluments would continue.

Later, the Government issued a letter clarifying that UGC scheme does not contain provision for pension payments and the Government revised the pension of other state government employees only with effect from July 01, 2009 and those who are receiving UGC scale would also get the revised pension only effective from July 01, 2009.

The Kerala Administrative Tribunal set aside the letter of the government which had clarified that revised pension would be effective from 2009 and not as per government order revising pay effective from 2006. The Tribunal followed the law laid down by the Supreme Court in  U.P. Raghavendra Acharya and Others v. State of Karnataka and Others (2006). The question considered in this case was the eligibility of pay revision of teachers with UGC scale. The Supreme court had rejected the State's stand that the matter relating to the grant of pensionary benefits vis-a-vis the revision in the scales of pay stands on a different footing.

The Court was thus considering whether the pensioners who were retired from service on or after 2006 are entitled to get their pension fixed on the basis of their last pay effective from 2006, as per the revised pay scale of the government.

The Government Pleader submitted that pensionary benefits are to be decided on the basis of the scheme of the pension revision adopted by the State Government from 2009 and not because pay revision for UGC teachers was effective from January 01, 2006. It is stated that central government does not provide financial aid for pension and arrears of UGC pensioners and that date determined by the State as per their policy decision must be implemented.

The Court stated that pensioners are entitled to pension as provided under Rule 65 of Part III of the Kerala Service Rules (KSR), which reads thus, “Fifty percentage of last ten months' average emoluments subject to the maximum limit for pension prescribed by the Government from time to time.”

The Court thus stated that when government order provides that pension of persons retired on or after 2006 are entitled to revised pay scale, there was no reason for the government to postpone the pension benefits up to 2009.

The Court stated, “When the KSR makes it clear that every pensioner is entitled to get his pension fixed on the basis of 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.”

Finding no reason to interfere with the Tribunal's order the high Court set aside the clarification letter of the Government postponing the pension benefits and ordered that pensioners shall paid arrears based on the government order that revised pay retrospectively.

"The entire arrears shall be paid to the petitioners within a period of four weeks from today, considering the time elapsed after the issuance of Ext.P1," the court said. 

Case Number: OP(KAT) NO. 376 OF 2022 & Connected Matter

Case Title: State of Kerala v P V Mohan & Connected Matter

Citation: 2024 LiveLaw (Ker) 758