Chandigarh, Jan 7: The Punjab and Haryana High Court has held that the Punjab government unfairly transferred the burden of its financial difficulties onto retired employees instead of curbing avoidable expenditure, while granting relief to pensioners affected by a 2003 policy change.
Allowing a batch of about 25 writ petitions, a Bench of Justice Anoop Chitkara and Justice Sukhvinder Kaur ruled that the July 29, 2003, circular increasing the pension commutation discount rate from 4.75 per cent to 8 per cent would not apply to the petitioners. The court directed the State to recalculate their commutation benefits under the earlier formula and refund the excess amount by March 31.
The petitioners had retired between July 31, 2003, and October 30, 2006 — a period during which the revised rate substantially reduced the lump sum payable at retirement. Although the State restored the 4.75 per cent rate through a circular dated October 31, 2006, it declined to extend the benefit retrospectively, prompting the retirees to approach the High Court.
“Commutation of pension is a statutory welfare scheme and an integral part of post-retirement security,” the Bench observed, adding that employees who had devoted their working lives to the State were entitled to institutional support after retirement.
The court questioned the State’s justification of financial crisis, noting the absence of material to show what corrective steps were taken apart from reducing retirees’ benefits. “If the State of Punjab was in a financial crisis, it could have reduced spending on unnecessary advertisements, billboards and wasteful schemes which only appeal for votes,” the judges said.
The Bench also recorded that the State failed to explain any substantial improvement in finances in 2006 that warranted restoring the earlier rate. Relief, however, was confined to the petitioners, with the court clarifying that settled cases would not be reopened after nearly two decades.
