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The Rajasthan High Court held that it is unlawful to withhold an employee’s pension or gratuity, especially if they are already enrolled in an outdated pension plan

Title: Ramesh Kumar v. State of Rajasthan & Ors.

Decided on: 19 October, 2023

+ Civil Writ Petition No. 20043/2017

CORAM: Hon’ble Justice Anoop Kumar Dhand

Introduction

A Municipal Corporation was recently ordered by the Rajasthan High Court to release an employee’s pension and gratuity payments, ruling that it was unlawful, unfair, and capricious to withhold such benefits. Given that the petitioner had previously been enrolled in the Old Pension Scheme, the court further stated that the Corporation’s request for him to select between the New Pension Scheme and the Old Pension Scheme was unlawful.

Facts of the Case

The petitioner’s employment as a driver was terminated in 1985 after it was first hired on November 14, 1982. He then filed an industrial dispute, which resulted in an award that reversed his dismissal and ordered his reinstatement with full-service continuity. The Corporation appealed the decision, but it was turned down. The Corporation then filed an appeal, which was only partially granted and restricted the amount of back pay to the petitioner’s appointment date. The petitioner received a regular pay scale on January 19, 2006, and was restored on February 8, 2001, with effect from April 13, 1994. Regretfully, on July 5, 2006, this decision was withdrawn, which led the petitioner to pursue a civil petition in 2006. On December 16, 2008, the court granted this petition. The Corporation then went ahead and reinstated the order from January 19, 2006, which indicated that the petitioner was now a regular employee. The petitioner reached superannuation age on December 31, 2016, and retired after serving the required number of years. But even after a significant length of time had passed, the Corporation still neglected to pay the petitioner’s retirement benefits, such as his pension and gratuity. The petitioner filed a court case under Article 226 of the Constitution.

Courts analysis and decision

The Corporation’s decision to withhold the petitioner’s pension and gratuity was deemed unlawful, arbitrary, and unreasonable by the court. Accordingly, it was decided that the petitioner was entitled to interest at the rate of nine percent annually under Rule 89 of the Rajasthan Civil Services (Pension) Rules, 1996, as well as gratuity and pension in compliance with the terms of the Old Pension Scheme. As a result, the court granted the writ petition and directed the Corporation to release the petitioner’s pension and gratuity as soon as possible, together with interest accruing at the rate of 9% annually from the date of due until the payment is actually made, which should happen within three months.

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Written by- Hargunn Kaur Makhija

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