1. Withdrawal of pension regulations with retrospective effect — Challenge by retired employees — Entitlement under Pension Regulations, 1990. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 )
Back
Next 
2026 Supreme(Raj) 598
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
INDERJEET SINGH, RAVI CHIRANIA, JJ.
RFC Retired Officers And Employees Association - Petitioner
Versus
State of Rajasthan through Additional Chief Secretary, Department of Industries - Respondent
D.B. Civil Writ Petition No. 1791 OF 2024, D.B. Civil Writ Petition No. 18016 OF 2023
Decided On : 19-02-2026
Advocates Appeared:
For the Petitioner: Mr. Sandeep Saxena Mr. Ashwinee Kumar Jaiman Mr. Dharam Veer Jashmani
For the Respondent: Mr. B.S. Chhaba, AAG with Mr. Rahul Gupta, AAAG, Mr. Hardik Singh, AAAG Mr. Satyam Bhardwaj, Mr. Virendra Lodha, Sr. Adv. with Mr. Ankit Rathore Mr. Ramdhan, Asst. G.C. and Ms. Shruti Pareek, Asst. G.C.
For the Petitioner: Mr. Sandeep Saxena Mr. Ashwinee Kumar Jaiman Mr. Dharam Veer Jashmani
For the Respondent: Mr. B.S. Chhaba, AAG with Mr. Rahul Gupta, AAAG, Mr. Hardik Singh, AAAG Mr. Satyam Bhardwaj, Mr. Virendra Lodha, Sr. Adv. with Mr. Ankit Rathore Mr. Ramdhan, Asst. G.C. and Ms. Shruti Pareek, Asst. G.C.
Retrospective withdrawal of pension benefits that takes away vested or accrued rights is violative of Articles 14 and 16 of the Constitution of India. Financial constraints cannot justify such withdrawal, nor can administrative notifications nullify judicial mandates that have attained finality.
Headnote:(A) State Financial Corporation Act, 1951 - Section 48 - Constitution of India - Articles 14 and 16 - Retrospective withdrawal of pension benefits - Accrued and vested rights - Violation of fundamental rights - Financial constraints as a ground for withdrawal - Judicial mandates and finality of judgments - An amendment or notification having retrospective operation that results in the withdrawal of benefits already available to an employee under existing rules amounts to taking away vested or accrued rights, which is violative of Articles 14 and 16 of the Constitution of India (Paras 36 and 36.1).
(B) Non-availability of financial resources is not a valid defense to take away vested rights accrued to employees, especially when such rights pertain to socio-economic security in old age (Para 39).
(C) A binding judicial pronouncement between parties cannot be made ineffective by administrative power through a notification that in substance overrides the judgment without displacing the legal foundation of the decision (Paras 36 and 38).
Facts of the case:
Retired employees, who had opted for a pension scheme prior to retirement, challenged a notification that retrospectively withdrew the pension regulations from a date anterior to their retirement. This action followed previous litigation where the withdrawal of the same regulations had been quashed by a coordinate bench, a decision that had attained finality after the apex court refused to interfere. The authority issued the new notification claiming liberty granted in a separate matter involving employees still in service.
Findings of Court:
The impugned notification is illegal, arbitrary, and unreasonable. The court found that the rights of employees who retired under certain categories had attained finality. The liberty granted to the authority to proceed afresh in the case of employees still in service did not authorize the reopening of settled legal controversies regarding retired employees who had already secured their rights through judicial finality.
Issues: Whether retrospective withdrawal of pension regulations is permissible when it affects vested rights; whether financial instability justifies such retrospective action; and whether an administrative notification can nullify a judicial mandamus that has attained finality.
Ratio Decidendi: Pension rights, once accrued, are vested rights under service jurisprudence. Retrospectively depriving employees of these rights violates the principles of equality and non-arbitrariness under Articles 14 and 16. Financial hardship does not justify the removal of socio-economic security for retired employees. Furthermore, the principle of separation of powers and the rule of law prevent administrative authorities from nullifying specific court mandates through retrospective notifications.
Result: Impugned notification dated 09.06.2020 is declared illegal and bad in law and quashed and set aside. Writ petitions allowed.
Legal Category Hierarchy
Table of Contents
2. Petitioners argued withdrawal violates Articles 14 and 16 and nullifies judicial mandate; respondent claimed compliance with Section 48 and liberty granted. (Para 6 , 12 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 )
3. Impugned notification reopens settled controversy, lacks justification, and attempts to annul final judicial pronouncements; reply held frivolous. (Para 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 35 , 36 , 38 , 39 , 40 , 41 , 42 , 43 , 44 )
4. Retrospective withdrawal of accrued pension rights violates Articles 14 and 16; judicial mandate cannot be nullified by subsequent administrative action. (Para 36 , 37 , 39 , 42 , 46 )
5. Impugned notification quashed as illegal and violative of Articles 14 and 16; consequential actions also quashed. (Para 46 , 47 )
6. Can an authority withdraw pension regulations retrospectively affecting vested rights of already retired employees?
No. Retrospective withdrawal of accrued pension benefits is arbitrary, discriminatory, and violates Articles 14 and 16 of the Constitution. (Para 36 , 37 , 39 )
7. Can administrative action nullify a final judicial mandamus between parties?
No. A binding judicial pronouncement cannot be made ineffective by subsequent administrative action; such action violates separation of powers and rule of law. (Para 16 , 17 , 18 , 19 , 32 , 38 , 43 , 44 )
8. Is financial difficulty a valid defence for taking away vested pension rights retrospectively?
No. Non-availability of financial resources is not a defence; vested rights accrued for socio-economic security of employees cannot be withdrawn retrospectively. (Para 39 )
9. Does liberty granted to proceed afresh in law allow reopening settled issues for all employee categories?
No. Liberty extends only to the category for which the notification was quashed; it does not permit reopening issues already finalized by the court for other categories. (Para 30 , 31 , 38 , 42 )
JUDGMENT :
Ravi Chirania, J.
1. By this common Order, this Court is deciding the two connected writ petitions, D.B. Civil Writ Petition No.1719/2024 titled as RFC Retired Officers and Employees Association and Ors. Vs. State of Rajasthan and Ors., and D.B. Civil Writ Petition No.18016/2023, titled as Roor Mal Aswal vs. State of Rajasthan & Anr.
2. The issue involved in both the writ petitions is common, therefore, the facts are also common and the petitioners are aggrieved by the same controversy related to the issue of withdrawal of Pension Regulations in respect of Officers and Employees of the Rajasthan Financial Corporation.
3. For deciding the controversy, the facts of D.B. Civil Writ Petition No.18016/2023 are taken as lead case to decide the issue as involved.
4. The brief facts, as pointed out and noted from the pleadings of the case and as argued by learned counsel for the petitioner, Mr. Ashwinee Kumar Jaiman, are that the petitioner-Roor Mal Aswal was appointed as a Deputy Manager in the Rajasthan Financial Corporation (hereinafter referred to as ‘RFC’ for short) in the year 1980 and retired from service in the year 2014 on attaining the age of superannuation. The respondent-RFC promulgated the Pension Regulations for its employees named as The Rajasthan Financial Corporation Employees’ Pension Regulations, 1990 (hereinafter referred to as ‘Pension Regulations of 1990’ for short), which were made effective from 01.04.1987.
5. The grievance of the petitioner, as raised in the prayer of the writ petition is that the respondent - RFC by the impugned notification dated 09.06.2020 (Annexure-1) notified the decision to withdraw the Pension Regulations of 1990 with retrospective effect from 21.06.2004 and declared that the employees would be entitled for the benefit of Contributory Provident Fund (CPF) Scheme under the Rajasthan Financial Corporation Employees’ Provident Fund Regulations, 1958.
6. Learned counsel for the petitioner, Mr. Ashwinee Kumar Jaiman, submitted that the issue of entitlement of pension to the Officers and Employees of the respondent-RFC is into litigation since the year 2004. He further submitted that in the year 2004, the respondent-RFC issued an Office order dated 12.08.2004, whereby a decision was taken to withdraw the Pension Regulations of 1990. The said Office order dated 12.08.2004 was challenged before learned Single Judge of this Court by S.B. Civil Writ Petition No. 870/2005 However, the learned Single Judge dismissed the writ petition, against which special appeal was preferred before the Co-ordinate Bench of this Court. The Co-ordinate Bench examined the provisions of the Pension Regulations of 1990 in the light of Section 48 of the State Financial Corporation Act, 1951 (hereinafter referred to as ‘Act of 1951’ for short). For deciding the issue, the Co-ordinate Bench divided the Employees of RFC into three categories in the judgment dated 07.05.2018. The relevant paras of the judgment passed in D.B. Special Appeal Writ No.669/2017 titled as V.K. Gupta and Ors. Vs. State of Rajasthan and connected matters , D.B. Civil Writ Petition No.669/2017 dated 07.05.2018 along with the connected appeals, are reproduced here as under:-
“The question now comes that if the order dated 12.8.2004 is set aside then what would be the consequence? The argument raised by learned counsel for the petitioners that Pension Regulations of 1990 would remain in force. We are in agreement with the learned counsel for the petitioners because if order dated 12.8.2004 goes, the Pension Regulations of 1990 survive till its withdrawal by applying the procedure given under Section 48 of the Act of 1951. A further question would be as to how the employees would be governed, if the order dated 12.8.2004 goes. We have to take into consideration three sets of employees and, accordingly, the issue aforesaid has to be dealt with. We categorise the employees and officers of the RFC In three categories, as follows:-
Category-I
Those w
