PENSIONER CANNOT CLAIM ADDITIONAL COMMUTATION AFTER ELECTING TO RETAIN PRE-REVISED COMMUTATION UPON RETROSPECTIVE PAY REVISION

The petitioners, retired employees of the Military Engineer Services (MES), retired in 2016 (Omkar Bharti on 31.01.2016 and Ajit Singh on 31.07.2016).

Upon retirement, they commuted 40% of their pension based on the then-prevailing pay scales.

Following the retrospective implementation of the 7th Central Pay Commission (CPC) effective from 01.01.2016, their basic pensions were significantly revised upward.

Pursuant to an Office Memorandum (OM) dated 24.10.2016, the petitioners were given an option to either retain the original commutation or commute the additional portion of the revised pension; they chose to retain the original commutation.

Later, they sought the differential commuted value based on the revised pension under Rule 10 of the CCS (Commutation of Pension) Rules, 1981.

The Central Administrative Tribunal (CAT), Jodhpur Bench, dismissed their applications on 22.10.2024, leading to these writ petitions.

1. Whether a pensioner, having voluntarily opted to retain commutation based on pre-revised pay scales under a specific Government OM, can subsequently claim differential commutation benefits under Rule 10 of the CCS (Commutation of Pension) Rules, 1981.

2. Whether Rule 10 of the 1981 Rules creates an absolute statutory entitlement that overrides the doctrine of election and the specific option mechanism introduced by the OM dated 24.10.2016.

Rule 5 of the CCS (Commutation of Pension) Rules, 1981, which establishes that commutation is a matter of the pensioner's volition and election.

Rule 10 of the the CCS (Commutation of Pension) Rules, 1981, which provides for payment of differential commuted value upon retrospective revision of pension without requiring a fresh application.

Department of Pension and Pensioners' Welfare Office Memorandum dated 24.10.2016, which provided a special dispensation and option for those retiring between 01.01.2016 and 04.08.2016.

'Doctrine of Election' and the principle of 'Approbate and Reprobate' as established in R.N. Gosain v. Yashpal Dhir (1992), RIICO Ltd. v. Diamond & Gem Development Corp. Ltd. (2013), and State of Punjab v. Dhanjit Singh Sandhu (2014).

The Court reasoned that commutation is not an automatic right but is fundamentally grounded in the pensioner’s informed choice under Rule 5.

While Rule 10 facilitates the payment of differentials, it must be read harmoniously with the transitional OM of 24.10.2016, which was issued to address the specific volatility of the 7th CPC implementation.

The petitioners exercised a conscious choice to keep their original commutation, which resulted in a higher monthly take-home pension (because the monthly deduction remained low at Rs. 3,790 instead of increasing to Rs. 10,400).

The Court found that the petitioners were attempting to "cherry-pick" benefits: they wanted the lump-sum differential payment (approx. Rs. 6.5 lakhs) while avoiding the corresponding higher monthly pension deduction.

Under the doctrine of election, having accepted the benefit of a higher monthly pension by not opting for revised commutation, the petitioners are barred from reprobating that choice to claim a lump sum.

The High Court dismissed the writ petitions, holding that the petitioners are bound by the options they voluntarily exercised.

The impugned orders of the CAT and the speaking orders of the respondents were upheld, and no relief was granted as the petitioners suffered no pecuniary loss but rather enjoyed a higher residual monthly pension.