Pension payable to employees to be determined on rules existing at time of retirement: SC

Employee pension claim: The Supreme Court observed on December 2, 2021 that the pension payable to an employee upon retirement shall be determined based on the rules existing at the time of retirement. The court also stated that the law does allow the employer to apply the rules differently in relation to persons who are similarly situated.

The SC bench of judges comprising Justices MR Shah and BV Nagarathna gave the ruling while considering a civil appeal against an order dated August 29, 2019, which was passed by the Division Bench of the Kerala High Court wherein the High Court had dismissed an appeal.

What is the case appeal about?

The civil appeal was filed by Dr G Sadasivan Nair, who was appointed as a lecturer in the School of Legal Studies of Cochin University Of Science And Technology in September 1984. Before he was appointed as a lecturer, the appellant was a lawyer practicing in the District Court and Kerala Subordinate Courts Kerala between March 11, 1972 and February 2, 1980. 

He had then pursued his Ph.D. programme between March 1980-February 1984 and resumed practice as an advocate in the Kerala High Court and Subordinate Courts after getting his PhD up till the date of his appointment as a lecturer in the University. 

Dr G Sadasivan Nair made a representation before the Registrar of the University on November 10, 2004 to consider his practice of 8 years at the Bar to determine the pensionary benefits payable to him on his superannuation.

The Registrar of the University declined his request in January 2006. The appellant then approached the Chancellor of the University contending that the Registrar had rejected his request without following the relevant rules in their proper perspective. However, he received no response from the Chancellor.

He then submitted a writ before the Kerala High Court on the same grounds and the court on April 3, 2006 directed the Chancellor to decide within four months, as to whether the appellant was entitled to get the benefit under Rule 25(a), Part III, KSR.

As per Kerala HC's judgment dated April 3, 2006, the University Chancellor gave the appellant an opportunity of hearing on July 12, 2006, and subsequently dismissed his petition on October 7, 2006, by holding that the Government or any other statutory body had the right to modify the service conditions.

The appellant then submitted a writ petition before the High Court. The Single Judge of the High Court on January 25, 2012, dismissed the writ by ruling that the Government had the right to unilaterally alter the service conditions of employees during their service.

The bench had asserted then that what was applicable was the rule prevailing as on the date of retirement and not that which existed on the date of entering service. The appellant then approached the top court.