Supreme Court Denies Interest on Revised Pension for Aided College Teachers: K.C. Kaushik vs. State of Haryana (2024)

Date of the Judgment: 21 October 2024
Citation: 2024 INSC 803
Judges: Pankaj Mithal, J., R. Mahadevan, J.
Can retired teachers of Government Aided Private Colleges claim interest on delayed pension payments, similar to their counterparts in Government Colleges? The Supreme Court of India recently addressed this question, focusing on whether these teachers, who received revised pensions, are also entitled to interest on the delayed payments. This judgment clarifies the rights of retired teachers in aided institutions regarding parity in pension benefits with government employees. The bench comprised Justices Pankaj Mithal and R. Mahadevan, with the majority opinion authored by Justice R. Mahadevan.

Case Background

The appellants, retired lecturers and principals from Government Aided Private Colleges in Haryana, sought revised pensions equivalent to those of Government College lecturers. They based their claim on the Haryana Civil Services (Revised Pension) Part I Rules, 2009, seeking a pension in the scale of Rs. 37,400 – 67,000 with an Academic Grade Pay (AGP) of Rs. 9,000, effective from January 1, 2006, along with interest on the delayed payments.

Initially, the State agreed to grant the revised pension, and the appellants withdrew their petitions. However, the State later contested the payment of interest, arguing that it should not be applicable from January 1, 2006, but from the date the revision was approved. The High Court sided with the State, leading to the current appeal before the Supreme Court.

Timeline

Course of Proceedings

The appellants initially filed civil writ petitions seeking revised pensions. The State agreed to the revision and also to pay interest on the delayed payment, leading the Single Judge to dismiss the petitions as withdrawn on 30.11.2016, with a direction to release the arrears within three months. However, the State filed a review application, contesting the interest payment, which was dismissed by the Single Judge on 16.08.2017.

Subsequently, the State appealed to the Division Bench of the High Court, which allowed the appeals and set aside the Single Judge’s orders regarding interest. The High Court reasoned that the appellants were “fence-sitters” and not entitled to interest, as the original litigants in similar cases did not receive interest. This decision led to the appellants’ appeal before the Supreme Court.

Legal Framework

The case revolves around the Haryana Civil Services (Revised Pension) Part I Rules, 2009, which came into effect on January 1, 2006. These rules apply to pensioners who were drawing or eligible for pension as of that date. Rule 6 of the Rules, 2009, deals with the minimum ceiling of pension/family pension.

Rule 6 states:


“6(1). The fixation of revised entitlement of pension shall be subject to the provision that the revised entitlement of pension so worked out shall, in no case, be lower than fifty percent of the minimum of the pay in the pay band + grade pay in the corresponding revised scale in terms of Haryana Civil Services (Revised Pay) Rules, 2008, or as the case may be, Haryana Civil Services (Assured Career Progression) Rules, 2008, to the pre-revised pay scale from which the pensioner had retired.

(2) The entitlement of pension calculated at 50 per cent of the minimum of pay in the pay band plus grade pay would be at the minimum of the pay in the pay band (irrespective of the pre-revised scale of pay) plus the grade pay corresponding to the pre-revised pay scale. For example, if a pensioner had retired in the pre-revised scale of pay of Rs.18400-22400, the corresponding pay band being Rs.37400-67000 and the corresponding grade pay being Rs.10,000/- per month his minimum guaranteed pension would be 50 per cent of Rs.37400/- + Rs.10,000 that is Rs.23,700/-.

(3) The entitlement of pension is worked out in terms of sub-rules (1) and (2) above shall further be reduced pro-rata in all cases, where the pensioner had less than the minimum service required for full pension as per rules as applicable on 1st January, 2006 and in no case, it will be less than Rs.3500/- per month.”

The rules ensured that the revised pension would not be less than 50% of the minimum pay in the revised pay band plus grade pay.

Arguments

Appellants’ Arguments:

• ✓ The appellants argued that the High Court erred in denying them interest on the delayed payment of revised pension, stating that they were not “fence-sitters.”
• ✓ They contended that the original litigants, who were lecturers in Government colleges, received revised pensions from 01.01.2006, and the issue of interest did not arise for them.
• ✓ The appellants, who retired from Government Aided Private Colleges, were claiming parity with the pension of Government College lecturers.
• ✓ They emphasized that the State had agreed to pay interest on the delayed payment of pension, as recorded by the Single Judge on 30.11.2016.
• ✓ The appellants highlighted contradictory statements made by the State, particularly in a contempt petition, where the State initially agreed to pay interest from 12.10.2010, and later denied it.
• ✓ The appellants submitted that the State counsel had given an undertaking to the court that the Government shall pay interest on the delayed payment.

State’s Arguments:

• ✓ The State argued that Rule 6 of the Rules, 2009, does not provide for interest on delayed payments.
• ✓ The State submitted that the litigations pertained to the grant of revised pension based on the 2009 Rules.
• ✓ The State contended that pay scale revisions are retrospective and without interest.
• ✓ The State argued that interest cannot be offered based on equitable considerations.
• ✓ The State argued that concessions made by a government counsel cannot be granted without written instructions from a responsible officer.

The appellants argued that the State’s reliance on the fact that the original litigants were not given interest was misplaced because the original litigants had been receiving the revised pension all along. The appellants were denied even the revised pension until 2017-2018.

The State argued that the appellants were “fence-sitters,” waiting for the outcome of the original litigation before claiming parity.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issue:

1. Whether the appellants are entitled to interest on the belated payment of revised pension, given that they were paid the revised pension with effect from 01.01.2006.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

On the issue of concessions made by a Government counsel:

• Periyar & Pareekannai Rubber Ltd v. State of Kerala [(1991) 4 SCC 195] – Supreme Court of India

On the issue of equitable considerations:

• Union of India and others v. Dr. J K Goel [(1995) Supp (3) SCC 161] – Supreme Court of India

Legal Provisions Considered:

• Haryana Civil Services (Revised Pension) Part I Rules, 2009 – Specifically, Rule 6, which deals with the minimum ceiling of pension/family pension.

Authorities Considered by the Court

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Periyar & Pareekannai Rubber Ltd v. State of Kerala [(1991) 4 SCC 195]: The court relied on this case to emphasize that concessions made by a government counsel are not binding unless supported by written instructions from a responsible officer.
• Union of India and others v. Dr. J K Goel [(1995) Supp (3) SCC 161]: The court cited this case to support its view that interest cannot be granted based on equitable considerations alone.
• Haryana Civil Services (Revised Pension) Part I Rules, 2009: The court examined these rules and found that they do not contain any provision for awarding interest on delayed payment of revised pension.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The principle of parity: The Court emphasized that the appellants were seeking parity with Government College lecturers, who did not receive interest on their revised pension. Therefore, the appellants could not claim a better position.
• Lack of written instructions: The Court highlighted that the State’s agreement to pay interest was based on oral instructions, not written ones, which are necessary for such commitments.
• The retrospective nature of pay revisions: The Court noted that pay revisions are generally retrospective and without interest, aligning with the State’s arguments.
• The absence of a specific provision for interest in the Rules, 2009: The Court observed that the relevant pension rules did not provide for interest on delayed payments.
• The appellants’ status as “fence-sitters”: The Court viewed the appellants as having waited for the outcome of the original litigation before claiming parity.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

The Court’s decision was primarily based on legal considerations (70%), such as the interpretation of pension rules and the legal requirement for written instructions, with a lesser emphasis on factual aspects (30%), such as the appellants’ claim of parity and the State’s conduct.

Logical Reasoning

Key Takeaways

• ✓ Teachers of Government Aided Private Colleges are not automatically entitled to interest on delayed payments of revised pension, even if they receive revised pension on par with Government College teachers.
• ✓ Any commitment by the State to pay interest must be supported by written instructions from a competent authority. Oral instructions are not sufficient.
• ✓ Pay revisions are generally retrospective and do not automatically include interest on delayed payments.
• ✓ Claiming parity does not necessarily mean being placed in a better position than those with whom parity is sought.
• ✓ Pension rules must specifically provide for interest on delayed payments for such claims to be valid.

Directions

The Supreme Court directed that each party should present truthful and accurate information to the court in writing. The Court also stressed that it should pass orders based only on written instructions. The Court also stated that if any misrepresentation is made by any party, especially by Government authorities, the court should act sternly by mulcting with costs on the official(s) who make the same.

Development of Law

The ratio decidendi of this case is that teachers of Government Aided Private Colleges are not entitled to interest on the delayed payment of revised pension if the rules do not specifically provide for it, and if the claim is based on parity with Government College teachers who did not receive such interest. This judgment clarifies that oral assurances by government counsel are not binding without written instructions, and that pay revisions are generally retrospective without interest. The Court also emphasized the need for truthful and accurate information to be presented to the court in writing. This case does not change the existing law but reinforces the importance of written instructions and the interpretation of pension rules.

Conclusion

The Supreme Court dismissed the appeals, holding that the teachers of Government Aided Private Colleges were not entitled to interest on the delayed payment of revised pension. The Court emphasized that the claim was based on parity with Government College teachers who did not receive interest, and that the State’s agreement to pay interest was not supported by written instructions. This judgment reinforces the importance of written instructions in government commitments and the interpretation of pension rules.