The court upheld the validity of a 15-year restoration period for commuted pension in line with historical precedent and expert recommendations, negating claims of arbitrariness.

PER DHIRAJ SINGH THAKUR, CJ:

The petitioners in this batch of writ petitions are all retired Government Employees who formerly held various positions in the State of Andhra Pradesh. They retired from service on attaining the age of superannuation of 58 years. The present batch of writ petitions has been filed challenging the validity of Rule 18 of the Andhra Pradesh Civil Pensions (Commutation) Rules, 1944.

2. The petitioners contend that Rule 18 which stipulates a 15-year period for the restoration of the commuted portion of pension is arbitrary, unjust and leads to unjust enrichment of the state. The petitioners therefore pray for a writ of Mandamus to declare Rule 18 as illegal and to direct the respondents to restore the full pension after 11 years and 3 months.

3. As is commonly known and understood, employees who joined the government service before 1^st of September 2004 and have retired subsequently, are entitled to receive pension which is a welfare measure providing financial security and stability to employees post their retirement from service. Pension is payable to an employee post his retirement and after his death, the eligible members of their family get what is called family pension.

4. Employees do not contribute towards pension and the burden is borne by the public exchequer. This is in regard to all those employees who had joined the government service before 1^st of September 2004, whereafter the scheme stands modified. Another benefit which is provided to retiring employees is the benefit of commutation of pension.

5. The Andhra Pradesh Civil Pension (Commutation) Rules, 1944 prescribes the relevant provisions for commutation of pension. As per Rule 2(a), a government servant to whom the AP Civil Pension (Commutation) Rules, 1944 apply, would be allowed to commute, for a lump sum payment, any portion not exceeding 40 percent of the pension granted to him by the State Government which was enhanced from one third of the pension with effect from 01.04.1999.

6. Needless to say that the commutation of pension is a voluntary act whereby the option is exercised by a retiring employee who takes that decision depending upon the benefits or drawbacks which the commutation scheme envisages.

As per the scheme of the Rules, it is made clear to a retiring employee that upon receipt of the lump sum amount representing the commuted value of the pension calculated as per the prescribed mechanism, the full pension would be restored only after 15 years from the date of commutation of the pension.

7. In this regard, it is relevant to reproduce Rule 18, which reads as under:

“18. In the case of pensioners drawing pension in India, the commuted portion of pension was ordered to be restored to the petitioners on completion of 15 years from the date of retirement if the commutation was simultaneous with retirement. If there is any time gap between the date of retirement and the date of commutation, the commuted portion of pension shall be restored after expiry of 15 years from the date on which reduction in pension on account of commutation becomes effective.”

8. It is not out of place here to mention that according to the stand of the respondent State, initially there was no process of restoration of full pension till 1980 and the reduction in the monthly pension on account of commutation was a lifetime event and a petitioner would be entitled to draw only the reduced pension during his entire retired life.

However, subsequently the government ordered restoration of full pension on attaining the age of 70 years, with regard to employees who retired on superannuation at