HC tells Himachal to examine pension commutation afresh, says State should not act as ‘Sahukar’
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Shimla, Sept 16
The Himachal Pradesh High Court has called upon the State Government to revisit the issue of the 15-year period prescribed for restoration of commuted pension, observing that the State should not act as a private “Sahookar” (money lender) but as a welfare State.
A Division Bench comprising Justice Vivek Singh Thakur and Justice Ranjan Sharma, while disposing of a batch of petitions led by CWP No. 15995 of 2024, directed that an Expert Committee be constituted to examine the changed circumstances and parameters governing pension commutation. The committee has been asked to consult all stakeholders, including retirees, the Finance Department, Pay Commission, other concerned departments and the Union Government, and submit its recommendations in a time-bound manner.
The court was dealing with the grievance of retired employees that although the commuted portion of pension, together with interest, was being recovered within about 10 to 12 years, the State continued reducing their monthly pension for the full 15-year period. Under Rule 10-A of the CCS (Commutation of Pension) Rules, restoration of the commuted portion presently takes place after 15 years.
The petitioners argued that the actuarial circumstances had changed substantially. They pointed out that the commutation factor for employees retiring at 58 years had fallen from 10.46 to 8.371, while interest rates had also declined and life expectancy had increased. According to them, these changes warranted reconsideration of the 15-year restoration period.
The Bench, however, did not itself alter the 15-year rule or issue a mandamus directing immediate restoration of full pension. Instead, it stressed the need for an expert and rational examination of the issue.
The court observed that considerable changes had taken place since the Supreme Court examined the issue in 1987, including reduction in the commutation factor, lower rates of return and increased life expectancy. It said the State must balance the interests of the government and retirees and examine the matter “dispassionately and rationally.”
The court dismissed the petitions, while making clear that the Expert Committee route should be pursued expeditiously.
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