Col Jamshaid Akhtar (Retd.) vs General Manager (Hr) Engineering Projects (India) Atd. And Ors.

$~2 to 4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Date of decision: 8 May, 2026
+ W.P.(C) 7625/2019, CM APPL. 31753/2019
COL JAMSHAID AKHTAR (RETD.) .....Petitioner
Through: Mr. Indra Sen Singh, Mr. Nasir
Mohammad and Ms. Kaberi Sharma,
Advocates.

versus

GENERAL MANAGER (HR) ENGINEERING PROJECTS (INDIA)
ATD. AND ORS. .....Respondent
Through: Ms. Manisha Agrawal Narain, CGSC
with Mr. Nipun Jain, Advocate.
Mr. Debarshi Bhadra, Advocate for
R-2, 3.

+ CONT.CAS(C) 883/2022
COL JAMSHAID AKHTAR (RETD.) .....Petitioner
Through: Mr. Indra Sen Singh, Mr. Nasir
Mohammad and Ms. Kaberi Sharma,
Advocates.

versus

SRI P K SAHOO & ANR. .....Respondent
Through: Mr. Debarshi Bhadra, Advocate.

+ W.P.(C) 7598/2019, CM APPL. 31601/2019
WG CDR SANDEEP MALHOTRA (RETD.) .....Petitioner
Through: Mr. Indra Sen Singh, Mr. Nasir
Mohammad and Ms. Kaberi Sharma,
Advocates.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 1 of 27

versus

UNION OF INDIA AND ORS. .....Respondent
Through: Ms. Manisha Agrawal Narain, CGSC
with Mr. Nipun Jain, Advocate.
Mr. Debarshi Bhadra, Advocate for
R-2, 3.
Mr. Devvrat Yadav, SPC with Mr.
Kartik Sharma, GP.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
JUDGMENT

SANJEEV NARULA, J. (Oral):

1. These matters concern retired defence officers who, after leaving
1
military service, were selected by Engineering Projects (India) Ltd., a
2
Central Public Sector Enterprise, through a recruitment advertisement.
Their pay was fixed at the minimum of the applicable pay scales and no pay
protection with reference to their last drawn military pay was granted. Years
later, EPIL sought to deduct the defence pension drawn by the Petitioners
from the salary paid by EPIL and, for that purpose, directed them to furnish
pension particulars for refixation of pay. The Petitioners challenge that
course of action as arbitrary, unreasonable, contrary to the governing policy
framework, and irreconcilable with the pay fixation consciously made and
acted upon by EPIL itself.
th
2. Both writ petitions assail individual communications dated 27 May,
2019 issued to each of the Petitioners, as well as the common order dated

1
“EPIL”
2
“CPSE”
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 2 of 27

th th
12 June, 2019. The communications dated 27 May, 2019 required the
Petitioners to furnish pension details so that their pay could be refixed after
th
subtracting pension. Thereafter, by the communication dated 12 June,
2019, the Respondents directed withholding of the Petitioners’ salaries on
account of non-furnishing of documents. The legal foundation pleaded by
th
the Respondents is principally the Office Memorandum dated 14
3
December, 2012 issued by the Department of Public Enterprises, read with
th
DPE clarification dated 28 March, 2019.
3. The two writ petitions arise from substantially similar facts. Col.
Jamshaid Akhtar (Retd.) retired from the Indian Army in the rank of Colonel
and later joined EPIL as General Manager (Civil). Wg. Cdr. Sandeep
Malhotra (Retd.) retired from the Indian Air Force in the rank of Wing
Commander and later joined EPIL as Deputy General Manager (Finance).
While their ranks, dates of appointment, posts and pay scales differ, the
impugned action, the policy framework invoked by the Respondents, the
interim protection granted by this Court, and the central legal issue are
common. The matters have, therefore, been heard together and are being
decided by this common judgment. Separate factual features shall be noticed
where they have a bearing on the relief to be granted.
4. CONT.CAS(C) 883/2022 arises from the interim order passed in
W.P.(C) 7625/2019. Since the writ petitions themselves are being finally
decided, that contempt petition is also taken up and disposed of by the
present judgment.
Factual background in W.P.(C) 7625/2019
5. Col. Jamshaid Akhtar (Retd.), was commissioned in the Indian Army

3
“DPE”
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 3 of 27

nd
and retired voluntarily on 2 June, 2012 in the rank of Colonel. According
to him, at the time of retirement, he was drawing pay in Pay Band-4 with
grade pay and military service pay. Upon retirement, he became entitled to
defence pension.
6. In response to an advertisement issued by EPIL, the Petitioner applied
nd
for the post of General Manager (Civil) on 2 August, 2013. His case is
that, at the stage of application and interview, he disclosed his previous
military service, last pay drawn, and defence pension. He also states that he
had expected pay protection with reference to his last military pay, but EPIL
informed him that he would be appointed at the minimum of the applicable
pay scale.
nd
7. EPIL issued a communication dated 2 December, 2013, informing
the Petitioner that he had been selected as General Manager (Civil) in the
IDA pay scale of ₹43,200-66,000/-. The terms and conditions followed on
th
13 December, 2013. His basic pay was fixed at ₹43,200/- per month,
namely, the minimum of the E-7 scale.
8. The terms of appointment did not provide that the defence pension
drawn by the Petitioner would be deducted from his pay in EPIL. Nor was
there any stipulation that his salary would be liable to retrospective
refixation on that basis. One clause required him to declare that he was
joining EPIL on a straight appointment and was not holding lien on his
previous employment.
th
9. The Petitioner joined EPIL on 9 December, 2013. After completion
th
of probation, he was confirmed with effect from 9 December, 2014. EPIL
thereafter continued to treat him as a regular employee and paid salary on
the basis of the pay fixation made at the time of appointment.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 4 of 27

10. In December, 2017, EPIL addressed a communication to the
Petitioner, seeking proof that he was not drawing dearness allowance on his
defence pension. The Petitioner replied that he was aware that a re-
employed pensioner could not draw dearness allowance from two sources
and that the pension disbursing authority had been informed to discontinue
dearness relief on pension. He furnished a pension pay slip to show that
dearness relief on pension was not being drawn.
th
11. Thereafter, EPIL addressed communications dated 19 March, 2018
th
and 20 December, 2018, requiring the Petitioner to submit documents
showing pension received from the date of joining EPIL, so that his pay
could be refixed. In response, the Petitioner contended that his appointment
had been made through an open selection process; that his pay had been
fixed at the minimum of the entry level applicable to the post; and that
neither any advance increment nor any pay protection had been extended to
him. It was accordingly asserted that no deduction on account of pension
could be effected from the pay so fixed.
rd
12. EPIL issued communication dated 3 January, 2019 stating, in
substance, that since the Petitioner had neither been appointed on absorption
basis nor come from a PSU, CPSE or Government organisation, there was
no question of pay protection or advance increments. It was further stated
th
that, as per Paragraph No. 6 of the DPE Office Memorandum dated 14
December, 2012, his pension amount would be subtracted from his pay in
EPIL. EPIL also indicated that clarification would be sought from the DPE
on the Petitioner’s representation.
th
13. On 27 May, 2019, EPIL informed the Petitioner that DPE had
clarified that the total admissible pension amount of Government retired
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 5 of 27

personnel would be subtracted from the pay, and that pay fixation of re-
employed Government pensioners would be done accordingly in the CPSE.
The Petitioner was asked to submit proof of pension drawn from the date of
joining. The communication further stated that, if the documents were not
submitted within 15 days, his monthly salary would be held up.
th
14. On 12 June, 2019, EPIL addressed its Finance Division stating that,
since the Petitioner and another similarly situated officer had not furnished
pension documents, their monthly salary was to be withheld till further
communication.
15. These two communications are impugned in W.P.(C) 7625/2019.
Facts in W.P.(C) 7598/2019
16. Wg. Cdr. Sandeep Malhotra (Retd.), retired voluntarily from the
st
Indian Air Force on 31 October, 2013 in the rank of Wing Commander. He
was thereafter granted defence pension, which, according to the pleadings,
was approximately ₹32,490/- per month.
17. In November/December, 2015, the Petitioner applied for the post of
Deputy General Manager (Finance) in EPIL pursuant to an open recruitment
th
process. He was interviewed on 18 February, 2016. EPIL issued an offer of
th
appointment dated 8 March, 2016 appointing him as Deputy General
Manager (Finance) in E-5 grade in the IDA scale of ₹32,900-58,000/-.
18. The terms of appointment fixed his basic pay at ₹32,900/- per month,
i.e. , the minimum of the applicable E-5 scale. Like the Petitioner in W.P.(C)
7625/2019, he was also not given pay protection with reference to his last
military pay. The appointment terms did not state that his defence pension
would be deducted from his EPIL pay.
st
19. The Petitioner joined EPIL on 21 March, 2016. His appointment was
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 6 of 27

st
subsequently confirmed with effect from 21 March, 2017.
20. The Petitioner states that he had disclosed his status as a retired
defence officer and his pension particulars during the pre-interview and pre-
joining process. He also states that EPIL was fully aware that he was
drawing defence pension when it issued the appointment letter fixing his pay
at the minimum of the E-5 scale.
21. Upon joining EPIL, the Petitioner requested his pension disbursing
bank to stop dearness allowance on pension. Canara Bank, by letter dated
nd
22 January, 2018, informed him that dearness relief had been stopped from
st st
1 January, 2018 and excess dearness relief paid from 21 March, 2016 to
st
31 December, 2017 had been recovered.
th th
22. EPIL thereafter issued communications dated 8 March, 2018, 19
th
March, 2018 and 20 December, 2018, requiring the Petitioner to submit
pension particulars for refixation of pay. The Petitioner responded that the
requisite details had already been furnished at the time of appointment and,
in any event, no deduction towards pension could be made since his pay had
been fixed at the minimum entry level without pay protection and dearness
allowance was being drawn only on the pay received from EPIL.
th
23. EPIL then issued communication dated 27 May, 2019, followed by
th
office note dated 12 June, 2019, seeking to implement deduction of pension
from pay and to withhold salary in the absence of pension documents. These
communications are impugned in W.P.(C) 7598/2019.
Interim Orders and Subsequent Developments
th
24. In both writ petitions, this Court passed interim orders on 26 July,
2019 directing the Respondent to maintain status quo and restraining them
from giving effect to the impugned communications.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 7 of 27

25. By virtue of those interim orders, no deduction pursuant to the
impugned communications was effected from the salaries payable to the
Petitioners during the pendency of the writ petitions.
26. During pendency of the proceedings, both Petitioners resigned from
th
EPIL. Col. Jamshaid Akhtar stood relieved with effect from 15 July, 2021,
th
and Wg. Cdr. Sandeep Malhotra on 30 September, 2022. The controversy,
therefore, no longer concerns prospective monthly salary deduction. It now
concerns the legality of retrospective recovery and withholding of
consequential dues, including terminal benefits or arrears, on the basis of the
impugned decision.
27. The Petitioners submit that the Respondents continue to maintain that
substantial amounts are recoverable from them on account of defence
pension drawn during service with EPIL. The Respondents, on the other
hand, state that the amounts received by the Petitioners during service
cannot be finally settled unless pay is refixed in accordance with DPE
instructions.
Petitioners’ Case
28. Mr. Indra Sen Singh, counsel for the Petitioners, submits that the
impugned action proceeds on a fundamental misunderstanding of the
concept of re-employment and the pay fixation regime applicable to retired
defence officers. His submissions are summarised as follows:
28.1 The Petitioners were not absorbed into EPIL from the Armed Forces
or any Government department, nor were they appointed on deputation or
with continuation of any lien from their previous service. They responded to
public advertisements issued by EPIL, participated in an open selection
process, and were thereafter appointed as regular employees to civil posts
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 8 of 27

under EPIL.
28.2 EPIL was fully aware of the Petitioners’ status as retired defence
officers. Details regarding their previous service, last pay drawn, and
pension were duly disclosed during the recruitment process itself. In such
circumstances, the Respondents cannot now seek to treat facts which were
fully disclosed and within their knowledge as constituting suppression on
the part of the Petitioners.
28.3 The Petitioners were not granted any advantage on account of their
previous military service while fixing pay in EPIL. Their pay was
consciously fixed at the minimum of the applicable pay scale corresponding
to the post to which they were appointed. No advance increments were
granted, no higher stage fixation was allowed, and no element of military
pay or previous service benefit was protected or carried forward.
28.4 The entire rationale of deducting pension arises only where an
employee receives the benefit of past service by way of pay protection or
fixation at a higher stage. If pay is fixed after reckoning last pay drawn, the
non-ignorable portion of pension may be deducted so that the employee does
not receive double benefit. However, where the employee is treated as a
fresh recruit and fixed at the bare minimum of the scale, there is no occasion
to deduct pension once again. This approach is internally inconsistent and
arbitrary in law.
28.5 The terms and conditions governing appointment contained no
stipulation that defence pension would be deducted from the salary payable
by EPIL. The Petitioners accepted appointment on the basis of the terms
expressly offered to them. If the Respondents intended to apply pension
deduction even where pay had been fixed at the minimum entry level, such
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 9 of 27

condition ought to have been incorporated in the appointment terms at the
threshold. Having remained silent at the time of appointment and having
permitted the Petitioners to continue in service for several years, EPIL
cannot now reopen the issue to the serious financial prejudice of the
Petitioners.
28.6 The Petitioners place particular emphasis on the consequences of the
interpretation advanced by the Respondents. The basic pay of Wg. Cdr.
Sandeep Malhotra was fixed at ₹32,900/- per month, while his defence
pension was approximately ₹32,490/- per month. If EPIL’s interpretation is
accepted, his effective salary would stand reduced to approximately ₹410/-
per month. Similarly, in the case of Col. Jamshaid Akhtar, the effective pay
would be approximately ₹10,505/- per month. Such salaries are wholly
inconsistent with Grade-A posts such as General Manager and Deputy
General Manager, and an interpretation producing such anomalous results
cannot be regarded as reasonable unless the language admits of no other
construction.
28.7 The Respondents’ own conduct over the years militates against the
stand now sought to be taken. The Petitioners were appointed; continued in
service; and confirmed in their respective posts, without objection. The issue
regarding deduction of pension was sought to be reopened only after several
years. This is not a case involving immediate rectification of a clerical or
inadvertent error, and the allegation that the Petitioners were deriving an
impermissible double benefit is therefore overstated and unfair.
28.8 The Petitioners also place reliance upon various Office Memoranda
issued by the DoPT, governing re-employed pensioners, including Office
st
Memorandum dated 1 May, 2017 and earlier instructions issued in the
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 10 of 27

years 1999 and 2010. It is urged that these instructions show that the pay
minus pension principle must be understood as part of a structured pay
fixation exercise and not as a blunt deduction from minimum entry pay.
th
28.9 The Petitioners submit that DPE’s Office Memorandum dated 14
December, 2012 cannot be read in isolation. It must be harmonised with the
DoPT regime, particularly because the DPE instructions themselves refer to
pension being regulated as per DoPT orders.
28.10 Even if the Respondents’ interpretation is assumed to be correct,
retrospective recovery after years of service is barred by settled principles of
service law. Reliance is placed on the judgements of the Supreme Court in
4 5
State of Punjab v. Rafiq Masih and Thomas Daniel v. State of Kerala , to
submit that recovery of excess payment is impermissible where the
employee has not practised fraud or misrepresentation and the payment
resulted from the employer’s own interpretation of rules.
Respondents’ Case
29. Mr. Debarshi Bhadra, counsel for Respondent Nos. 2 and 3, defends
the impugned decision on the following grounds;
29.1 EPIL is a CPSE and is governed by instructions issued by the DPE.
The applicable instructions are contained in DPE Office Memorandum dated
th
14 December, 2012. Paragraph No. 6 of that Office Memorandum
expressly provides that re-employed Government pensioners in CPSEs shall
draw pay only in the prescribed scale of the post, that no protection of pay of
the previous post shall be given, that initial pay shall be fixed at the
minimum of the applicable CPSE scale, and that pension admissible to the

4
(2015) 4 SCC 334.
5
2022 SCC OnLine SC 536.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 11 of 27

retired employee shall be subtracted from admissible pay.
29.2 Paragraph No. 9 of the said Office Memorandum, extends the pay
fixation principles applicable to Board-level executives to below Board-
level executives and non-unionised supervisors. Since the Petitioners held
executive posts below Board level, Paragraph No. 9 brings them squarely
within the policy.
th
29.3 The DPE clarified the position on 28 March, 2019, stating that the
pay of re-employed Government pensioners in CPSEs is to be fixed at the
minimum of the applicable scale and that pension admissible to the retired
employee is to be subtracted from admissible pay. The language of the DPE
Office Memorandum is plain and binding, leaving no discretion with the
EPIL. It is contended that the Petitioners cannot rely upon Office
Memoranda issued by the DoPT governing Central Government civil posts
in preference to specific DPE instructions applicable to CPSEs.
29.4 The Petitioners continued to draw full defence pension while
simultaneously receiving salary from EPIL and that the object of the DPE
policy is to prevent such double financial benefit from public funds. It is
contended that despite repeated communications, the Petitioners failed to
furnish complete pension particulars, thereby preventing proper pay fixation
in accordance with the applicable policy.
29.5 The payments made contrary to applicable rules can be recovered. A
mistaken or erroneous pay fixation does not confer a vested right. Reliance
is placed on the judgement of the Supreme Court in Chandi Prasad Uniyal
6
v. State of Uttarakhand , to contend that excess payments of public money
made without authority of law are ordinarily recoverable.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 12 of 27

29.6 Preliminary objections have also been raised regarding
maintainability of the writ petitions. It is contended that EPIL itself has not
been impleaded despite the substantive reliefs being directed against it.
Respondent Nos. 2 and 3 are merely officers or employees of EPIL and
cannot be treated as representing the company in their individual capacity. It
is further submitted that the writ petitions suffer from misjoinder and non-
joinder of necessary parties and that the Petitioners ought to have first
pursued appropriate remedies within the organisation.
29.7 In the contempt proceedings, the Respondent contends that the interim
order merely restrained giving effect to the impugned communications. It
did not direct release of terminal benefits to the Petitioners after resignation.
7
Reliance is placed on Sudhir Vasudeva v. M. George Ravishekaran , to
submit that contempt jurisdiction cannot travel beyond the four corners of
the order alleged to have been breached. An objection regarding limitation
under Section 20 of the Contempt of Courts Act, 1971 has also been raised.
Questions for Determination
30. The following questions arise for determination:
(i) Whether the writ petitions are liable to be declined on the preliminary
objections of non-joinder, misjoinder, or availability of an internal remedy.
(ii) Whether, on a proper construction of the DPE Office Memorandum
th
dated 14 December, 2012 and the connected policy framework, the
Respondents were justified in seeking to deduct the defence pension drawn
by the Petitioners from the salary fixed and paid to them by EPIL, despite
their pay having been fixed at the minimum entry-level scale without pay

6
(2012) 8 SCC 417.
7
(2014) 3 SCC 373.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 13 of 27

protection.
(iii) Whether, assuming there was any error in the initial fixation, the
Respondents could reopen the fixation and effect retrospective recovery
after several years of service, in the absence of fraud or misrepresentation by
the Petitioners.
(iv) What consequential relief, if any, should follow in the writ petitions.
(v) Whether, in view of the final adjudication of the writ petitions, any
separate order is required in the connected contempt petition founded upon
the interim order passed therein.
Analysis and findings
Maintainability of the writ petition
31. This Court is unable to sustain the preliminary objections raised by
the Respondents regarding non-joinder, misjoinder, or availability of an
internal remedy. The concerned functionaries of EPIL are already before this
Court in substance and in representation, and the controversy has been fully
contested on merits without any demonstrated prejudice on account of the
manner of impleadment. The objections, therefore, remain technical in
nature and do not go to the root of the maintainability of the proceedings.
32. Equally, the existence of an internal administrative remedy cannot
operate as a bar in the facts of the present case, where the challenge is
directed against the legality of the impugned action itself, the controversy
turns upon interpretation of binding governmental instructions, and the
matter has remained pending before this Court for a considerable period
during which interim orders were operating. No useful purpose would now
be served by relegating the Petitioners to an internal mechanism after the
parties have exchanged pleadings in full and the matter has been heard
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 14 of 27

extensively on merits. The said objections are, accordingly, rejected.
The legal position on Pension, Pay Fixation and Recovery
33. Certain settled principles with respect to pensionary benefits must
first be noticed. Pension is not a bounty payable at the discretion of the
employer. It is well settled that the right to pension is a valuable right
8 9
vesting in a Government servant. In D.S. Nakara v. Union of India , the
Court explained that pension is earned by past service and is neither a
bounty nor a matter of grace. In State of Jharkhand v. Jitendra Kumar
10
Srivastava , the Supreme Court held that pension and gratuity cannot be
withheld except by authority of law, and that such benefits partake the
character of property.
34. These principles do not imply that a re-employed pensioner is
immune from the operation of a valid rule governing pay fixation which
takes pension into account. They do, however, underscore that pension
earned for past service cannot be subjected to unilateral adjustment or
deduction unless the governing rule clearly authorises such consequence and
is applied in a manner that is fair, consistent, and in conformity with the
object underlying the policy.
35. The principles governing recovery of excess payments also merit
consideration. In Chandi Prasad Uniyal , the Supreme Court held that
excess payments from public funds may ordinarily be recovered, especially
where payment was made without authority. The other side of the principle
is equally settled. In Rafiq Masih , the Supreme Court identified situations
where recovery would be inequitable and impermissible, particularly when

8
Deokinandan Prasad v. State of Bihar, (1971) 2 SCC 330.
9
(1983) 1 SCC 305.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 15 of 27

employees were not responsible for overpayment and recovery after long
delay would cause grave hardship. The Court identified, inter alia , cases
involving recovery from retired employees or employees nearing retirement,
cases where excess payment had continued for more than five years prior to
the recovery order, and situations where recovery would be unduly harsh or
arbitrary.
36. In Thomas Daniel , the Supreme Court reiterated the same principle
and restrained recovery where the excess payment had arisen on account of
the employer’s own erroneous interpretation of the applicable rules, and not
due to any fraud, concealment, or misrepresentation on the part of the
employee.
37. These decisions do not confer an unrestricted benefit upon employees
or prevent correction of every erroneous pay fixation. They instead
recognise that the State and its instrumentalities are required to act fairly and
equitably while seeking to rectify mistakes of their own making, particularly
where the employee neither induced the error nor contributed to it, and has
regulated his affairs over a long period on the basis of the salary paid.
38. The distinction assumes significance in the present case. Had the
Petitioners concealed the factum of pension or secured higher pay on the
basis of any false representation, the legal position may have been materially
different. Likewise, had EPIL applied the impugned interpretation
contemporaneously at the stage of appointment and pay fixation, the
controversy would have stood on a different footing. What is sought to be
undertaken, however, is a belated reopening of a pay fixation which was
consciously made, acted upon, and allowed to continue for several years.

10
(2013) 12 SCC 210.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 16 of 27

th
The DPE Office Memorandum dated 14 December, 2012
39. The Respondents’ case rests principally upon Paragraph No. 6 of the
th
DPE Office Memorandum dated 14 December, 2012. Since the controversy
substantially turns on the interpretation and application of the said Office
Memorandum, its relevant provisions require closer examination.
40. The Office Memorandum deals with finalisation of terms and
conditions, including pay fixation, in respect of Board-level executives of
CPSEs, and the revised procedure therefor. It records that almost all Board-
level appointees are placed on IDA pattern pay scales and are appointed on
fixed tenure basis. It further records that all appointments in CPSEs are
generally on permanent absorption basis, with deputation being confined to
rare and exceptional cases.
41. Paragraph No. 3 of the Office Memorandum states that where a
person from Government service, including defence service, joins a CPSE
on permanent absorption basis, there is need to protect his or her
emoluments, and that pension, if any, drawn on account of service rendered
in Government, is regulated as per DoPT orders.
42. Paragraph No. 6 deals with re-employed Government pensioners at
Board level, providing that such persons would draw pay only in the
prescribed scale of the post in which they are re-employed. It says that no
protection of pay of the post held prior to re-employment would be given. It
further states that initial pay shall be fixed at the minimum of the pay scale
applicable to the post in the CPSE. It then states that pension admissible to
the retired employee would be subtracted from admissible pay.
43. Paragraph No. 9 states that the pay fixation principles applicable to
Board-level executives would apply mutatis mutandis to below Board-level
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 17 of 27

executives and non-unionised supervisors.
44. The Respondents read Paragraph No. 6 as embodying a
straightforward formula, namely, minimum of the CPSE pay scale minus
pension. According to them, although the Petitioners’ pay was fixed at the
minimum of the prescribed scales under their appointment letters, the
amount of defence pension must thereafter stand deducted from such pay.
The Petitioners, however, contend that the provision cannot be construed in
such mechanical terms. Their submission is that where an employee has
been denied pay protection altogether and appointed at the minimum entry
stage as a fresh recruit, pension cannot once again be deducted so as to
reduce the effective salary to a nominal amount. According to them, the
“pay minus pension” principle forms part of a broader pay fixation exercise
in cases where previous service and emoluments are taken into account for
fixation of pay.
45. This Court finds considerable difficulty in accepting the Respondents’
interpretation. Paragraph No. 6 is fundamentally a pay fixation provision,
prescribing the manner in which initial pay is to be determined where a re-
employed pensioner joins a CPSE. If the Respondents considered the
provision applicable to the Petitioners, the same ought to have been applied
at the stage of appointment itself, or at least within a reasonable period after
obtaining the requisite particulars. In the absence of fraud, concealment, or
misrepresentation on the part of the Petitioners, the provision could not
remain unacted upon for years together and thereafter be invoked
retrospectively to unsettle service conditions which had been consciously
fixed and acted upon.
46. Secondly, the expression “admissible pay” cannot be read as a licence
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 18 of 27

to reduce the notified minimum pay of the post to a purely notional figure in
every case, irrespective of the mode of appointment, the terms offered, the
disclosures made, and the employer’s own treatment of the employee. The
instruction must operate coherently within the pay structure to which it
belongs. A construction that renders appointment to a prescribed scale
practically meaningless should not be preferred unless the text admits of no
other view.
47. Further, there is a material distinction between denying pay protection
and deducting pension from pay which has been protected or fixed with
reference to past service. Where last pay is protected, or where prior service
affects the stage of fixation, the rationale for subtracting the non-ignorable
portion of pension is apparent: the employee should not receive both
protected pay based on past service and full pension for that very past
service. However, where the employer has consciously declined to grant pay
protection or any corresponding advantage, the rationale for deducting
pension does not operate with the same force.
48. The interpretation canvassed by the Respondents effectively treats
two materially different situations alike: first, a re-employed pensioner
whose previous pay and service have been reckoned for pay fixation; and
second, a retired defence officer recruited afresh through open selection and
placed at the minimum of the CPSE scale without any protection of prior
emoluments. Such flattening of material distinctions is difficult to sustain.
49. The practical consequences flowing from the Respondents’
interpretation further demonstrate the anomaly in such construction. Wg.
Cdr. Sandeep Malhotra was appointed to an E-5 executive post with a basic
pay of ₹32,900/-, while his defence pension was approximately ₹32,490/-.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 19 of 27

On the Respondents’ interpretation, his effective basic pay would stand
reduced to approximately ₹410/- per month. Similarly, Col. Jamshaid
Akhtar was appointed as General Manager (Civil) in the E-7 scale with basic
pay fixed at ₹43,200/-, whereas his defence pension was approximately
₹32,695/-. Application of the same interpretation would reduce his effective
basic pay to approximately ₹10,505/- per month. This Court does not rest its
conclusion merely on the harshness of the outcome. However, where an
interpretation leads to a result so plainly disconnected from the ordinary
understanding of appointment to senior executive posts carrying prescribed
pay scales, the Court is required to examine whether such consequence is
indeed mandated by the governing instruction. In the considered opinion of
this Court, it is not.
th
50. The DPE clarification dated 28 March, 2019 does not improve the
Respondents’ case. It repeats the general formulation that pay of re-
employed Government pensioners in CPSEs is to be fixed at the minimum
of the scale and pension is to be subtracted from admissible pay. It does not
examine the peculiar position of employees already appointed years earlier
through open recruitment, fixed at minimum pay, confirmed, continued in
service, and then subjected to retrospective refixation.
51. Equally, the subsequent communication of the DoPT in November,
2023, which essentially advised the administrative Ministry to defend the
present proceedings and maintain a unified stand, cannot be construed as
adjudicating upon the legality of the impugned action or determining the
rights of the Petitioners.
Application to the present cases
52. The material facts may now be drawn together. Both Petitioners
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 20 of 27

entered EPIL through open selection. Their appointment letters fixed their
basic pay at the minimum of the applicable scale. The terms of appointment
did not state that the defence pension drawn by them would be subtracted
from the salary so fixed. No pay protection was granted. EPIL accepted and
acted upon these terms for several years, during which the Petitioners were
continued in service, confirmed in their respective posts, and granted annual
increments. The issue regarding deduction of pension was sought to be
reopened only thereafter.
rd
53. The Respondents’ own communication dated 3 January, 2019 in the
case of Col. Jamshaid Akhtar records that there was no question of pay
protection or advance increments since he had neither been appointed on
absorption basis nor come from a PSU, CPSE or Government organisation.
Having itself treated the Petitioner as disentitled to any benefit flowing from
past service because his appointment was through open selection, EPIL
could not subsequently seek to retrospectively apply only the adverse
consequence of the re-employed pensioner regime by deducting pension
from the minimum pay already fixed and paid.
54. The position of Wg. Cdr. Sandeep Malhotra stands on no different
footing. He too was appointed in the E-5 grade at the minimum of the
prescribed scale. Nothing in the appointment terms indicated that the salary
offered represented merely the balance after deducting defence pension. Nor
was it ever disclosed to him that the basic pay reflected in the appointment
letter was only provisional and liable to substantial reduction at a later stage
by adjustment of pension.
55. This Court also finds no merit in the allegation of concealment
levelled against the Petitioners. Their status as retired defence officers was
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 21 of 27

always within the knowledge of EPIL. The communications issued by EPIL
in the years 2017 and 2018 themselves addressed the Petitioners in that
capacity. The controversy did not arise because any hidden fact
subsequently came to light; it arose because EPIL, years later, adopted a
different understanding of the governing policy.
56. There is also substance in the Petitioners’ submission that the issue
regarding dearness allowance or dearness relief had already been addressed.
EPIL initially questioned whether the Petitioners were drawing dearness
allowance from two different sources. In response, the Petitioners stated that
dearness relief on pension had already been discontinued. In the case of Wg.
Cdr. Sandeep Malhotra, excess dearness relief was in fact recovered by the
bank. These circumstances are inconsistent with any deliberate attempt on
the part of the Petitioners to secure an undisclosed double benefit.
57. The Court is not persuaded that the Petitioners’ refusal to furnish
further pension documents can be treated as misconduct or suppression. The
Petitioner disputed EPIL’s authority to reopen pay fixation. Their refusal
was part of a legal objection to the proposed refixation. It may or may not
have been advisable from an administrative standpoint, but it does not
establish fraud.
58. Once fraud, concealment or misrepresentation is absent, the case must
be tested on the governing instructions, fairness in public employment, and
the permissible limits of retrospective correction.
59. The impugned communications were issued in 2019. Col. Jamshaid
Akhtar had joined EPIL in December, 2013. Wg. Cdr. Sandeep Malhotra
had joined in March, 2016. By then, both Petitioners had served for
substantial periods under pay fixation made by EPIL itself. In Col. Akhtar’s
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 22 of 27

case, the arrangement had continued for more than five years. In Wg. Cdr.
Malhotra’s case, it had continued for over three years. Both had completed
probation and stood confirmed. The impugned action was not a prospective
clarification of future pay. It sought to revisit payments made from the
respective dates of joining.
60. Such action, in the opinion of this Court, bears the vice of
arbitrariness. Undoubtedly, a public employer is not precluded from
correcting a legal or administrative error upon its discovery. However, the
power of correction is not unqualified. Where the employee has neither
induced the alleged error nor concealed material facts, and where the
employer itself framed the appointment terms, fixed the pay, and
consistently acted upon the same over a long period of time, retrospective
recovery or refixation must rest upon clear legal authority and compelling
justification. Neither is demonstrated in the present case.
61. The Respondent’ approach also blurs the distinction between pension
and salary. The pension drawn by the Petitioners represented deferred
compensation earned for past service rendered in the Armed Forces, whereas
the salary paid by EPIL constituted remuneration for services rendered to
EPIL in the posts held by them. A valid pay fixation regime may account for
both; however, the deduction must form part of the fixation at the proper
stage, with clarity and fairness. It cannot be imposed years later in a manner
that unsettles completed service and completed payments.
62. The Court therefore holds that, in the facts of these cases, EPIL was
not justified in seeking to deduct the defence pension drawn by the
Petitioners from the salary fixed and paid by EPIL after appointing them
through open selection at the minimum of the applicable scale without pay
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 23 of 27

th th
protection. The impugned communications dated 27 May, 2019 and 12
June, 2019 cannot be sustained.
Withholding of terminal dues and arrears
63. Both Petitioners are no longer in service with EPIL. Col. Jamshaid
th
Akhtar stood relieved on resignation with effect from 15 July, 2021 and
th
Wg. Cdr. Sandeep Malhotra from 30 September, 2022. The controversy
has, therefore, moved beyond the question of monthly salary, which stood
protected by the interim orders passed by this Court. What now survives is
the Respondents’ assertion that substantial amounts would arise if the
impugned decision is sustained, and the Petitioners’ grievance that their
retiral and terminal dues continue to remain withheld on account of the
present dispute.
64. Once this Court has held that the impugned refixation exercise cannot
be sustained, the Respondents cannot retain terminal dues, leave
encashment, gratuity, or other lawful payments merely to secure a possible
recovery founded upon that very exercise. A public employer cannot achieve
indirectly, by withholding accrued dues, what it is not legally entitled to
recover directly.
65. Terminal dues stand on a different footing from monthly salary. They
often represent accumulated statutory, contractual, or service benefits earned
over the course of employment. Gratuity, in particular, cannot be withheld
as a matter of administrative convenience. If an employer seeks to deny or
forfeit gratuity, it must establish clear authority in law and strict compliance
with the statutory conditions governing such denial or forfeiture. No such
foundation has been laid in the present cases.
66. The Respondents have submitted that pay revision arrears have not
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 24 of 27

yet been approved or released generally in respect of EPIL employees. This
Court is not, by the present judgment, creating any special entitlement in
favour of the Petitioners to amounts which have not otherwise become
payable in accordance with the applicable rules, policies, circulars, or
decisions governing EPIL employees as a class. The direction issued herein
is confined to amounts otherwise admissible to the Petitioners and withheld
only because of the impugned pension deduction dispute or the pendency of
these proceedings.
67. If any amount is withheld for a reason wholly independent of the
impugned communications, the Respondents must communicate the same
expressly. They cannot take shelter under vague references to “pay fixation”
or “pending litigation”, once the legality of the impugned refixation exercise
itself stands adjudicated by this Court.
68. The Respondents shall, therefore, undertake a fresh computation of
the Petitioners’ dues without deducting defence pension from the salaries
fixed and paid by EPIL. Any amount otherwise payable to either Petitioner
shall be released within twelve weeks from the date of this judgment. If the
Respondents decline to release any specific component, they shall
communicate a reasoned decision identifying the precise rule, policy,
circular, or order under which such withholding is claimed. Any delay
beyond the aforesaid period of twelve weeks shall entail payment of interest
at the rate of 8% per annum.
69. Both writ petitions are allowed in the above terms.
CONT.CAS(C) 883/2022
70. The contempt petition has been instituted by Col. Jamshaid Akhtar
th
alleging disobedience of the interim order dated 26 July, 2019 passed in
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 25 of 27

W.P.(C) 7625/2019. By that order, this Court had directed the parties to
maintain status quo and restrained the Respondents from giving effect to the
impugned communications. The contempt petition, therefore, is founded not
upon any final adjudication of rights, but upon the alleged breach of an
interim arrangement made to preserve the position of the parties during the
pendency of the writ petition.
71. During the pendency of the writ petition, the Petitioner resigned from
EPIL and stood relieved from service. The grievance in the contempt
petition is that, notwithstanding the interim protection, the Respondents
withheld certain dues payable upon cessation of employment. The
Respondents, however, contend that the interim order did not contain any
positive direction for release of terminal benefits after resignation and was
confined to restraining implementation of the two impugned
communications.
72. This Court does not consider it necessary to enter into that
controversy. In fact, the Petitioner, Col. Jamshaid Akhtar, also does not
press for any punitive action in view of the final adjudication of the writ
petition. Moreover, since the substantive writ petition is being decided by
the present judgment, the interim order, which operated only during its
pendency, must yield to the final determination.
73. In these circumstances, CONT.CAS(C) 883/2022 is disposed of
without recording any finding on wilful disobedience. If the directions
contained in this judgment are not complied with, it shall remain open to the
aggrieved party to pursue remedies available in law.
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 26 of 27

74. In view of the foregoing, all the petitions are disposed of, along with
all pending applications.

SANJEEV NARULA, J
MAY 8, 2026/ hc
Signature Not Verified
Digitally Signed
By:AKANSHA SINGH
Signing Date:12.05.2026
19:57:05
W.P.(C) 7625/2019 & connected matters Page 27 of 27