Shimla, September 11 — The Himachal Pradesh High Court has expressed sharp displeasure over the failure of government authorities to implement its earlier ruling on pension fixation, warning officials of contempt proceedings if they continue to disregard the prescribed formula.
In an order delivered on Tuesday, Justice Sandeep Sharma noted that Parliament had already laid down a clear formula for calculating pension under the Employees’ Pension Scheme (EPS), 1995: Pensionable Salary × Pensionable Service ÷ 70. The pensionable salary refers to the average wage drawn during the last 60 months of contribution, while pensionable service denotes the actual period of contributory service.
Despite this, the court observed, the Provident Fund Office had fixed the pension of the petitioners on a pro-rata basis. The Bench stressed that the petitioners fall under Category 3 employees, who had contributed at higher rates, and therefore could not be subjected to a reduced, proportional formula. “Application of pro-rata basis in their case is wholly unjustifiable,” Justice Sharma remarked.
While the court made it clear that senior officers of the Provident Fund Office were prima facie in contempt, it stopped short of issuing punitive directions after counsel for the Regional Provident Fund Commissioner sought more time. Granting a 10-day extension, the court directed strict compliance with its earlier judgment and warned that, failing this, the officers must appear in person to explain why they should not face punishment for wilful disobedience.
Legal experts said the order carries far-reaching implications for employees covered under the EPS, 1995, especially those who opted to contribute on higher wages. Across India, thousands of pensioners have been in dispute with authorities over whether their pensions should be calculated on their actual earnings or capped contributions, and whether the pro-rata method can be lawfully applied.
The High Court’s firm stance has renewed hopes among pensioners that the long-standing ambiguity will be resolved in line with the statutory formula. For many retired employees, the difference between capped and actual wage calculations determines the sustainability of their post-retirement income.
The matter has been listed for further hearing on September 23, with the court making it clear that non-compliance will invite personal accountability for officials concerned.
