Chandigarh, Jan 7: In a strong rebuke to the then Punjab government, the Punjab and Haryana High Court has said that retired employees were made to bear the cost of a “self-made” financial crisis through a short-lived change in pension rules.
A Division Bench of Justice Anoop Chitkara and Justice Sukhvinder Kaur ruled that a July 29, 2003, circular enhancing the pension commutation discount rate to 8 per cent could not be applied to the petitioners, who retired during the affected period. The State has been directed to refund the excess amount recovered by recalculating benefits at the earlier rate of 4.75 per cent.
The court was hearing multiple petitions filed by Punjab government employees who retired between July 31, 2003, and October 30, 2006. Under the revised commutation table, retirees received a significantly reduced lump sum at the time of retirement.
“It seems the entire responsibility for the so-called financial crisis was placed on retirees at the end of their careers, when they required financial support the most,” the Bench observed.
Calling commutation of pension a welfare measure, the court said retirees often resorted to it for pressing needs such as medical treatment, housing, education or marriage of children. “If not provided at reasonable rates, a retiree risks falling into the hands of unscrupulous moneylenders and loan sharks,” the judges said.
The Bench further noted that if Punjab was indeed facing fiscal distress, it could have curtailed expenditure elsewhere. “Cuts were imposed on employees who had completed their service, even though reducing unnecessary advertisements, billboards and vote-oriented schemes was an available option,” the court said.
While granting relief, the High Court clarified that it was not striking down the 2003 circular itself and that the benefit would remain limited to the petitioners alone, as reopening settled matters after nearly 19 years would not be just or practical.
