SC dismisses challenge to Himachal’s withdrawal of 1999 corporate pension scheme

Shimla, Apr 16,

In a judgment delivered on April 16, 2025, a three-judge bench of the Supreme Court, comprising Justices Surya Kant, Dipankar Datta, and Ujjal Bhuyan, dismissed a writ petition challenging the State of Himachal Pradesh’s decision to quash the ” Himachal Pradesh Corporate Sector Employees 2 (Pension, Family Pension, Commutation of Pension and Gratuity) Scheme, 1999 “. The petition, filed under Article 32 of the Constitution, sought a review of a previous judgment by a two-judge bench in State of Himachal Pradesh vs. Rajesh Chander Sood, which had upheld the state government’s policy decision.

“ Thus, having regard to the discussions made above, we are of the unhesitant view that the present writ petition filed under Article 32 of the Constitution of India is wholly misconceived, stated the bench in a 41 paged order. Adding,” The decision of this Court in Rajesh Chander Sood (supra) is clearly binding on the petitioners. That being the position, there is no merit in the writ petition which is accordingly dismissed,” they directed.

The case centered on the Himachal Pradesh Corporate Sector Employees 2 (Pension, Family Pension, Commutation of Pension and Gratuity) Scheme, 1999 discontinued vide the notification dated 02.12.2004, which though carved out an exception for those who had opted for the scheme and had superannuated prior to 02.12.2004.

The Scheme,” was to provide enhanced pension benefits to employees of 68 corporations controlled by the Himachal Pradesh state government. Under this scheme, a corpus fund was to be created, primarily funded by the corporations, with minimal contributions from employees.

However in 2003, a high-powered committee reviewed the scheme and concluded that its continuation would lead to the financial collapse of the corporations due to pension liabilities. Consequently, the scheme was withdrawn in 2004. However, employees who had retired between 1999 and 2003 were allowed to remain under the scheme.

The petitioners, sought inclusion in the scheme and challenged the legality of its withdrawal. The Supreme Court, however, rejected their petition, deeming it “misconceived” and unwarranted for interference.

“ Therefore, it is crystal clear that the present writ petition is thoroughly misconceived and is liable to be dismissed,” noted the bench.

The State Government was represented by Senior Advocate Devadatt Kamat, assisted by Advocates Anubhav Sharma, Rajesh Imandar, and AOR Nishant Kumar.

Team Himachal Scape