Pension shall be determined on rules existing at the time of retirement

Factual Matrix:

The Hon’ble Supreme Court vide its judgment dated 01.12.2021 in the case of “Dr. G. Sadasivan Nair vs. Cochin University of Science & Technology represented by its Registrar & Ors.” had the occasion to consider whether pension of a serviceman shall be determined on rules existing at the time of his appointment or at the time of his retirement.

In the present matter, the Appellant was appointed as a Lecturer in the respondent No. 1 University w.e.f. 07.09.1984. Prior to the appointment, he was a practising lawyer from 11.03.1972 to 02.02.1980. On 10.11.2004, the appellant made a representation to the Registrar of the Respondent University placing reliance on Rule 25(a), part III, Kerala Service Rules (hereinafter referred to as Rules) seeking his practice of 8+ years as an advocate to be considered for the purpose of determining his pensionary benefits payable to him on his superannuation. Rule 25 (a) of the rules stipulated that experience at the bar could be reckoned as qualifying service for the purpose of determining superannuation pension subject to certain conditions that were satisfied by the Appellant.

The said representation was rejected by the Registrar citing a provisio to Rule 25 (a) of the rules which stated that benefit under Rule 25 (a) would be available only to such employees who are recruited when practising at the Bar, to those posts requiring a qualification in law and experience at the Bar. Experience at the Bar was not essential for appointment to teaching posts at the University and hence, the appellant was not entitled to get the benefit of Rule 25(a).

The Appellant filed an appeal petition before Chancellor of Respondent University contending that the proviso to Rule 25(1) of the rules would not be applicable to him as the said proviso was not in force on the date of his joining the service and was only introduced on 12.02.1985. The Chancellor dismissed the appeal petition.

Aggrieved by the order, the appellant filed a Writ Petition before the Kerala High Court which vide order dated 25.01.2012 dismissed the petition, holding that the Government could unilaterally alter the service conditions of employees during their service and therefore, what was applicable was the rule prevailing as on the date of retirement and not that which existed as on the date of entering service.

Aggrieved by the order of the High Court, the Appellant filed an Appeal before the Hon’ble Supreme Court which vide order dated 01.12.2021 allowed the appeal and set aside the judgment passed by the Kerala High Court.

Analysis of the Judgment:

The Appellant contended that he was treated unfairly by the Respondent University. One, Dr. P. Leela Krishnan who was similarly placed as the Appellant was granted the benefit of additional service as provided under Rule 25(a) of the rules. The time spent by him as a practising advocate was added to the tenure of his service at the Respondent University and based on that his pension was determined. The appellant contended that if the above-mentioned proviso was not applied in the case of Dr. P. Leela Krishnan, then it also should not be applied to his own case.

The Supreme Court relying on “Deoki Nandan Prasad v. State of Bihar – AIR 1971 SC 1409” held that it was the settled position of law that pension payable to an employee on retirement shall be determined on the rules existing at the time of retirement and not according to the rules that existed at the time of his appointment. Based on this settled position of law, the appellant was rightly not given the benefit under Rule 25(a) of the rules however, the law does not allow the employer to apply the rules differently in relation to persons who are similarly situated.

Thus, if the Respondent University sought to deny the benefit of Rule 25 (a), in light of the proviso which was subsequently inserted thereby limiting the benefit of the Rule, it ought to have done so uniformly. The action of the Respondent University of selectively applying the proviso to Rule 25(a) in relation to the appellant, while not applying the said proviso in relation to similarly situated persons, is arbitrary and therefore illegal.

In view of the aforesaid finding, the SC granted the relief to the appellant and directed the respondents to compute the appellants pension after adding 8 years during which he was an advocate.