New Delhi: The Supreme Court of India has upheld a rule allowing the deduction of pension from the salary of retired government employees appointed as Chairman or Members of the Uttarakhand Public Service Commission (UKPSC). The Court ruled that the pension is temporarily withheld during their new tenure, not permanently cancelled. It also clarified that the principle of equal pay for equal work does not apply to this situation.
Pay Minus Pension Rule: Supreme Court Sets Aside Uttarakhand High Court Judgment
A bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria set aside the Uttarakhand High Court’s 2010 judgment, which had declared Regulation 7(2) of the Uttarakhand Public Service Commission (Conditions of Service) Regulations, 2004, unconstitutional.
The High Court had earlier ruled that deducting the pension earned from previous government service from the salary of a new constitutional post violated Article 14 read with Article 39(d) of the Indian Constitution. However, the Supreme Court disagreed with this decision and upheld the validity of the regulation.
What Is The Pay Minus Pension Rule
Under Regulation 7(2), the salary of a retired government employee appointed as Chairman or Member of the Uttarakhand PSC can be calculated using the principle of “pay minus pension”.
This means the pension earned from previous government service is deducted from the salary payable for the new position.
However, the Supreme Court clarified that this deduction does not permanently take away the employee’s pension rights. The pension remains withheld during the tenure of the new appointment and becomes payable again after the person leaves the post.
Background Of The Case
The case involved two retired government employees who were appointed to the Uttarakhand Public Service Commission in 2006.
One of them was Lieutenant General (Retd.) M.C. Bhandari, who retired from the Indian Army in 2006 and was later appointed as Chairman of the Uttarakhand PSC.
The other person, Sohan Lal, was a retired Provincial Civil Service officer who joined the Commission as a Member.
Their salaries were fixed after deducting the pensions they had earned during their previous government service.
Both appointees challenged this deduction before the Uttarakhand High Court, arguing that the rule was unconstitutional and violated their rights.
The High Court accepted their arguments in 2010 and directed the authorities to remove the pension deduction and restore the amounts deducted from their salaries.
The State of Uttarakhand subsequently challenged the High Court’s decisions before the Supreme Court.
Equal Pay For Equal Work Principle Not Applicable
The Supreme Court rejected the argument that pension deduction violated the principle of equal pay for equal work under Article 14 read with Article 39(d) of the Constitution.
The Court explained that pension and salary were connected to two different periods of service.
The pension was earned through previous government employment, while the salary for the Chairman or Member position was governed by the service regulations applicable to the new appointment.
Therefore, the Court held that the principle of equal pay for equal work had no relevance to the question of temporarily withholding pension during the new tenure.
It also observed that the pension benefit was not being permanently withdrawn.
Government Employees Cannot Challenge Service Conditions After Accepting A Post
The Supreme Court also highlighted an important principle concerning government appointments.
It stated that an employee who accepts a post with knowledge of its applicable service conditions cannot later challenge those conditions simply because they become unfavourable.
The bench observed that the appointees knew about the Uttarakhand Public Service Commission Regulations when they accepted their respective positions.
The Court relied on the principle that a person who participates in a process cannot later challenge its established rules after accepting the outcome.
It further explained that allowing the pension to be added to the full salary could result in an unreasonable total payment that might exceed the actual salary fixed for the post.
Supreme Court Relies On Earlier Judgment In Gurmesh Prakash Bishnoi Case
The Supreme Court also referred to its earlier decision in Gurmesh Prakash Bishnoi v. State of Haryana.
In that case, the Court had considered a similar restriction on receiving pension during a subsequent appointment as Chairman of a Public Service Commission.
The earlier decision recognised that pension earned from previous government service could remain withheld during the tenure of the new constitutional office.
The entitlement to receive that pension would return after the person left the subsequent position. This reasoning supported the Supreme Court’s conclusion in the present case.
Pay Minus Pension Rule: Supreme Court Allows Uttarakhand Government’s Appeals
After examining the facts and applicable service regulations, the Supreme Court held that Regulation 7(2) was not unconstitutional.
The bench ruled that the Uttarakhand High Court had made an error in declaring the regulation invalid under Article 14 read with Article 39(d).
Accordingly, the Supreme Court allowed the appeals filed by the State of Uttarakhand and set aside the High Court’s judgments dated April 15, 2010.
The decision confirms that the pension of retired government employees appointed as Chairman or Members of the Uttarakhand PSC can be withheld during their tenure under the applicable regulation, with their pension entitlement restored after leaving the post.
Read also: Supreme Court Ends Long-Running Seniority Dispute of Uttarakhand Deputy Collectors
FAQs
No. The Supreme Court clarified that the pension is only kept in abeyance during the tenure of the new appointment. The pension entitlement is restored after the person leaves the post.
Yes. The Supreme Court upheld Regulation 7(2) of the Uttarakhand Public Service Commission Regulations, 2004, which permits the deduction of previous service pension from the salary of retired government employees appointed as Chairman or Members.
A bench comprising Justice S.V.N. Bhatti and Justice N.V. Anjaria delivered the judgment on November 4, 2026, in the case of State of Uttarakhand v. M.C. Bhandari and Another.
