Pension calculation must be based on actual last pay drawn, prohibiting unilateral post-retirement downgrading of grade pay.

The applicant, initially appointed as a Cleaner in 1982, was promoted to Semi-Skilled Tradesman in 1994

He received his 2nd financial upgradation under the ACP Scheme in 2006 and his 3rd financial upgradation under the MACP Scheme on July 1, 2013, which granted him a Grade Pay of ₹2400/-

Upon his retirement on March 31, 2014, the respondents unilaterally reduced his Grade Pay to ₹2000/- for pension calculation purposes, alleging an error in the original grant

Despite a prior direction from the Tribunal in O.A. No. 797/2017 to consider his representation, the Chief Postmaster General (CPMG), Bihar Circle, rejected his claim via an order dated July 18, 2019

1. Whether the respondents could legally downgrade the applicant's Grade Pay post-retirement for pension fixation without issuing a show-cause notice or providing a hearing

2. Whether the pension must be calculated based on the actual last pay drawn by the government servant in accordance with the pension rules

The court primarily applied the Central Civil Services (Pension) Rules, which mandate that pension must be calculated on the basis of the actual last pay drawn by the government servant

MACP Scheme guidelines, noting that financial upgradations under the previous ACP scheme are sometimes ignored to allow for subsequent MACP benefits

Principles of Natural Justice, specifically the right to be heard (Audi Alteram Partem), asserting that a benefit voluntarily granted by a competent committee cannot be withdrawn post-retirement without due process

The Tribunal observed that the applicant was explicitly granted the Grade Pay of ₹2400/- by a competent memorandum in 2013 and drew his salary accordingly until superannuation

The respondents' attempt to justify the reduction as a "correction of error" was found unsustainable because they failed to produce any definitive clarification or authorization from the Postal Directorate to downgrade the pay

The Tribunal reasoned that reducing pensionary benefits after retirement without a show-cause notice constitutes a "patent violation of the principles of natural justice"

Furthermore, because the upgradation was voluntarily granted by a competent screening committee, the respondents were legally bound to treat the salary drawn at that grade as the "last pay drawn" for pensionary calculations

It held that the action of artificially suppressing the pension base was an impermissible administrative lapse that caused severe financial prejudice

The respondents were directed to re-fix the applicant's pension and consequential retirement benefits based on the last pay drawn in the Grade Pay of ₹2400/- and to complete this exercise within three months

No order as to costs was made