Retired Uttarakhand PSC Appointees’ Pension Is Deferred, Not Lost, as Supreme Court Upholds Rule Cutting Pay by Pension

The respondents, both retired government servants, were appointed in 2006 as Chairman and Member, respectively, of the Uttarakhand Public Service Commission (PSC). Their pay was fixed under Regulation 7 of the Uttarakhand Public Service Commission (Conditions of Service) Regulations, 2004, with their prior service pensions deducted from the prescribed pay.

After their representations were rejected, they challenged Regulation 7(2) and the deduction orders before the High Court. The High Court held Regulation 7(2) unconstitutional under Articles 14 and 39(d), set aside the deduction order, and directed reimbursement of deductions. The State appealed.

Article 318 of the Constitution empowers the Governor to make regulations governing the conditions of service of State Public Service Commission members, subject to the proviso that those conditions must not be varied to a member’s disadvantage after appointment.

Regulation 7(1) prescribes the Chairman’s and Members’ pay; Regulation 7(2) permits the Governor to determine whether a retired appointee’s service pension is to be held in abeyance or the prescribed pay reduced by an amount not exceeding that pension.

A pension withheld during the tenure of a later appointment, but restored thereafter, is deferred rather than extinguished; the equal-pay-for-equal-work principle does not invalidate such a pension arrangement.

In Gurmesh Prakash Bishnoi v. State of Haryana, (1998) 5 SCC 260, the Court recognised that a pension entitlement may be suspended during a later public-service appointment and revive when that appointment ends.

The Court also applied the principles of acquiescence and estoppel where appointees accept posts with knowledge of the governing service rules.

Regulation 7(2) governed the respondents’ appointments and authorised the Governor to determine how their prior service pensions would be treated.

The deduction did not remove their pension entitlement; it postponed payment during their PSC tenure, with the withheld entitlement to revive afterwards. Accordingly, the High Court erred in treating the deduction as unequal pay for equal work or as a violation of Articles 14 and 39(d).

The Governor’s determination, reflected in the 2008 Office Memorandum, was made under Regulation 7(2); the Court found no requirement that the determination be made simultaneously with appointment and characterised its operation as retroactive, not retrospective.

The respondents had accepted their appointments while the Regulations were in force and could not later disavow their application; acquiescence also weighed against their challenge.

It allowed the State’s appeals, set aside the High Court’s judgments and orders, and left the deductions undisturbed.