Revised Pay Must Be Considered for Pension: Kerala High Court

The Kerala High Court has reaffirmed that when a pay scale is revised with retrospective effect, the revised pay scale must be considered while calculating pensions. This applies even to pensioners who retired before the issuance of the pay revision order, provided they are eligible for the revised pay scale.

In its judgment, the High Court upheld a Kerala Administrative Tribunal (KAT) order, which invalidated a government letter stating that revised pensions for university teachers under the UGC pay scale would be effective from 2009 instead of 2006.

High Court Ruling

A Division Bench comprising 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 prior to the issuance of the pay revision order, provided he is entitled to get the revised pay.”

Case Background

The case centered on a government order dated May 7, 2011, which revised the pay and allowances of college and university teachers receiving UGC pay scales. The order stipulated that those who retired on or after January 1, 2006, would receive their pensions based on the revised pay scale effective from the same date, in accordance with the prevailing formula. The method of calculating pensions as 50% of the average emoluments from the last ten months of service remained unchanged.

Subsequently, the government issued a clarification letter stating that since the UGC scheme does not explicitly include pension provisions, the revised pension for UGC teachers would only be applicable from July 1, 2009, aligning it with the pension revision timeline for other state government employees.

The Kerala Administrative Tribunal set aside this clarification, citing the Supreme Court’s ruling in U.P. Raghavendra Acharya and Others v. State of Karnataka and Others (2006). In that case, the apex court had dismissed the argument that pensionary benefits tied to pay revisions for UGC teachers were distinct from those of other employees.

Court’s Observations

The High Court deliberated on whether pensioners who retired on or after January 1, 2006, were entitled to have their pensions fixed based on the revised pay scale effective from that date. The Government Pleader argued that pension revisions were implemented from 2009 based on the state’s policy, and central financial assistance did not cover pensions or arrears for UGC pensioners.

However, the Court emphasized that pension eligibility is governed by Rule 65 of Part III of the Kerala Service Rules (KSR), which states:
“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 noted:
“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.”

Final Verdict

Concluding that there was no valid reason to delay the pensionary benefits to 2009, the High Court upheld the Tribunal’s order. It struck down the government’s clarification letter and directed that arrears be paid based on the retrospective pay revision.

The Court ordered:
“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.”

This judgment reinforces the principle that pension calculations must reflect pay revisions from the effective date, ensuring fairness for retirees.

View original order below: