As per case facts, retired government employees claimed full pension restoration before the 15-year period, arguing commuted pension plus interest was already recovered. They asserted reduced commutation factors, increased life ...
No Acts & Articles mentioned in this case
2026:HHC:39535
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No. 15995 of 2024
a/w CWP Nos. 8371, 8839, 8841, 8842, 8866,
8893, 8894, 8895, 8896, 8940, 9044, 10161,
10192, 10374, 10564, 10566, 10786, 10787,
10789, 10790, 10791, 10792, 10882, 10928,
11078, 11089, 11107, 11158, 11214, 11347,
11614, 11992, 12054, 12546, 12567, 13085,
13456, 14660, 14946, 15989, 15990, 15991,
15992, 15993, 15994, 15996, 16099, 16349,
16352, 16691, 16693, 16704, 16716, 16718,
16721, 16781, 16783 of 2024, CWP Nos.397,
1269, 1271, 1272, 1273, 1274, 1275, 1281, 1287,
1297, 1298, 1299, 1300, 1301, 1703, 3898, 3899,
3993, 4520, 4521, 4527, 5137, 6919, 8149, 11584
of 2025, LPA No.211 of 2025 and CWP Nos. 115,
3215 of 2026
Reserved on : 18.06.2026
Decided on : 16.09.2026
Uploaded on: 16.09.2026
__________________________________________________________
1.CWP No.15995 of 2024
Bal Dev.
…Petitioner.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
2.CWP No.8371 of 2024
Avinash Chand Gupta & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
2
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
3.CWP No.8839 of 2024
Panna Lal Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
4.CWP No.8841 of 2024
Jyoti Prakash Chaudhary.
…Petitioner.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
5.CWP No.8842 of 2024
Shambhu Dutt & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
6.CWP No.8866 of 2024
Vinod Kumar Moudgil.
…Petitioner.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
7.CWP No.8893 of 2024
Amita Bhatnagar & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
3
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
8.CWP No.8894 of 2024
Om Swaroop Sharma & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
9.CWP No.8895 of 2024
Parkash Chand & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
10.CWP No.8896 of 2024
Ajay Kumar & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
11.CWP No.8940 of 2024
Neelam Bala & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
12.CWP No.9044 of 2024
Prithi Raj & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
4
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
13.CWP No.10161 of 2024
Prem Lal Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
14.CWP No.10192 of 2024
Chet Ram Verma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors..
…Respondents.
15.CWP No.10374 of 2024
Virander Speiya & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
16.CWP No.10564 of 2024
Bansi Ram Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
17.CWP No.10566 of 2024
Umavati & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
5
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
18.CWP No.10786 of 2024
Om Prakash Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
19.CWP No.10787 of 2024
Karm Chand.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
20.CWP No.10789 of 2024
Daya Ram Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
21.CWP No.10790 of 2024
Ram Paul Moudgil.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
22.CWP No.10791 of 2024
Madan Gopal Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
6
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
23.CWP No.10792 of 2024
Suresh Kumar Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
24.CWP No.10882 of 2024
Hem Raj Mahajan.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
25.CWP No.10928 of 2024
Arjan Singh & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
26.CWP No.11078 of 2024
Madan Lal.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
27.CWP No.11089 of 2024
Geeta Kaundal & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
7
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
28.CWP No.11107 of 2024
Kirpa Ram.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
29.CWP No.11158 of 2024
Hari Ram.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
30.CWP No.11214 of 2024
L.R. Sharma & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
31.CWP No.11347 of 2024
Jugvir Singha.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
32.CWP No.11614 of 2024
Bimla Verma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
8
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
33.CWP No.11992 of 2024
Het Ram Pal.
…Petitioner.
Versus
HPSEBL & Ors.
…Respondents.
34.CWP No.12054 of 2024
Chander Kanta & Anr..
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
35.CWP No.12546 of 2024
Ramesh Kumar Kaundal.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
36.CWP No.12567 of 2024
Bali Ram Chandel.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
37.CWP No.13085 of 2024
Gaura Diwan.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
9
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
38.CWP No.13456 of 2024
Tulsi Ram.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
39.CWP No.14660 of 2024
Narinder Singh Thakyal.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
40.CWP No.14946 of 2024
Narender Pal & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
41.CWP No.15989 of 2024
Tilak Raj.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
42.CWP No.15990 of 2024
Sushil Awasthi.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
10
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
43.CWP No.15991 of 2024
Raman Kumar Chopra.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
44.CWP No.15992 of 2024
Satish Kumar.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
45.CWP No.15993 of 2024
Inder Raj Gupta.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
46.CWP No.15994 of 2024
Vidya Sagar Gupta.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
47.CWP No.15996 of 2024
Brajender Sheel.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
11
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
48.CWP No.16099 of 2024
Anil Chauhan.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
49.CWP No.16349 of 2024
Jagdish Chand.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
50.CWP No.16352 of 2024
Leela Dhar Kaushal.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
51.CWP No.16691 of 2024
Hem Raj.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
52.CWP No.16693 of 2024
Brij Lal.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
12
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
53.CWP No.16704 of 2024
Dina Nath Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
54.CWP No.16716 of 2024
Ashwani Kumar.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
55.CWP No.16718 of 2024
Ranjeet Singh Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
56.CWP No.16721 of 2024
Jagdish Chand Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
57.CWP No.16781 of 2024
Sher Singh.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
13
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
58.CWP No.16783 of 2024
Chiranji Lal.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
59.CWP No.397 of 2025
Rajinder Singh Chauhan.
…Petitioner.
Versus
State of Himachal Pradesh & Anr.
…Respondents.
60.CWP No.1269 of 2025
Ramesh Chand Chauhan.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
61.CWP No.1271 of 2025
Rakesh Kumar Chandel.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
62.CWP No.1272 of 2025
Baldev Singh Thakur.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
14
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
63.CWP No.1273 of 2025
Nawang Paldan.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
64.CWP No.1274 of 2025
Manjeet Kaur.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
65.CWP No.1275 of 2025
Roop Ram Bakshi.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
66.CWP No.1281 of 2025
Sharavan Kumar Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
67.CWP No.1287 of 2025
Vijay Kumar Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
15
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
68.CWP No.1297 of 2025
Nek Ram Pal.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
69.CWP No.1298 of 2025
Krishan Kumar.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
70.CWP No.1299 of 2025
Mayavati Thakur.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
71.CWP No.1300 of 2025
Hira Singh.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
72.CWP No.1301 of 2025
Dila Ram Thakur.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
16
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
73.CWP No.1703 of 2025
Mast Ram & Ors..
…Petitioners.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
74.CWP No.3898 of 2025
Paras Ram.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
75.CWP No.3899 of 2025
Dev Raj.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
76.CWP No.3993 of 2025
Chitar Bhanu.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
77.CWP No.4520 of 2025
Parkash Chand Chauhan.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
17
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
78.CWP No.4521 of 2025
Purender Sharma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
79.CWP No.4527 of 2025
Bal Dev Raj Awasthi.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
80.CWP No.5137 of 2025
Malkiat Raj.
…Petitioner.
Versus
Additional Chief Secretary (Finance) & Ors.
…Respondents.
81.CWP No.6919 of 2025
Dhani Ram Verma.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
82.CWP No.8149 of 2025
Thandi Ram.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
18
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
83.CWP No.11584 of 2025
Hem Raj Chaudhary.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
84.LPA No.211 of 2025
Rajinder Kumar Bhardwaj.
…Appellant.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
85.CWP No.115 of 2026
Pawan Kumar Goyal.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
86.CWP No.3215 of 2026
Joginder Singh.
…Petitioner.
Versus
State of Himachal Pradesh & Ors.
…Respondents.
__________________________________________________________
Coram
Hon’ble Mr. Justice Vivek Singh Thakur, Judge.
Hon’ble Mr. Justice Ranjan Sharma, Judge.
Whether approved for reporting?
1
Yes
__________________________________________________________
1
Whether the reporters of the local papers may be allowed to see the judgment?
19
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
For the Petitioner(s). Mr.Onkar Jairath, Senior Advocate, with Mr.
Anshul Jairath, Advocate, Mr. Naresh
Sharma, Mr. Mohamed Ahamed Safee, Mr.
Pranav Kumar Kaushal, Mr. Sameer Miyan,
Mr.Ajay Chandel, Mr. Vinod Chauhan,
Mr.Balwant Singh Ms. Aanchal Singh,
Ms.Abhilasha Kaundal, Ms. Reetika Singla,
Mr. Hamender Singh Chandel, Mr. Ashir
Kaith, Mr. George, Sandeep Kumar Pandey,
Mr. Mr. Ramesh Kumar Kaundal, Mr.Vinod
Kumar Soni, Mr.Ajay Sipahiya, Mr. Tarun
Mehta, Mr. Vinod Kumar Thakur, Mr. Sumesh
Raj, Mr. Mohar Singh, Mr. Ravinder Singh,
Ms.Pooja Thakur, Dr. Lalit Kumar Sharma,
Mr. Shubham Sood, Mr.Atharv Sharma, Mr.
Mandeep Chandel, Mr. Ashwani Gupta, Mr.
Ashok Kumar Verma, Mr. Balwant Singh
Thakur, Ms.Anchal Sharma, Ms. Shakshi
Bhardwaj, Mr.Ajay Kumar Dhiman, Ms.Neha
Negi, Ms.Shakshi Bhandari, Advocates, for
the petitioners in respective petitions.
Mr. Chitranjan Kumar Sharma & Mr. Gopal
Singh, Advocates, for the appellant in LPA
No.211 of 2025.
For the Respondents: Mr. Anup Rattan, Advocate General with
Mr.Ramakant Sharma, Additional Advocate
General and Mr.Shalabh Thakur, Assistant
Advocate General, for the respondent(s)-
State.
Mr. Vikrant Thakur, Senior Advocate, with
Ms. Shivani Priya, Advocate, for respondent
No.3- HPPSC in CWP No.12546 of 2024.
Ms. Sharadha Karol and Ms. Rupali Sharma,
Advocates, for respondent No.4 in CWP
No.12567 of 2024.
Mr. Nitin Thakur, Advocate, for respondent
No.4 in CWP No.11214 of 2024.
Mr. Rajinder Thakur, Central Government
Counsel, for respondent(s)-Union of India.
20
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
Mr. Rajesh Kashyap, Advocate and Mr.
Ravinder Thakur, Advocate, for respondent-
HPSEBL.
Ms. Shrutika Chauhan, Advocate, for
respondent-HRTC in CWP No.1703 of 2025.
Mr. Rajesh Kosh, Mr. Rangil Singh, Mr.
Dikken Kumar Thakur, Mr. Abhishek Sharma
and Mr. Tara Chand Chauhan, Advocates, for
the respondent(s)- Accountant General.
_________________________________________________ _________
Vivek Singh Thakur, Judge
All these petitions, for involvement of common question of
law and facts to be adjudicated in the matter, have been clubbed together
and are being decided by this common judgment.
2. Petitioners, in all petitions, are retired employees governed
by Service Rules framed and/or adopted by the State of Himachal
Pradesh.
3. Petitioners, on their retirement, on various dates, had opted
for commutation of pension. As a result of opting for commutation of
pension, they were paid lump sum commuted pension amount based on
calculations provided for that, and their pension was reduced to the extent
of commutation of pension opted by the petitioners, with further condition
that the full pension shall be restored after 15 years from the date of
payment of commuted value of pension to the petitioners.
21
2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
4. Now, petitioners have approached this Court on the ground
that commuted value of pension paid to the petitioners stands recovered
along with interest at the rate of 8% per annum within a lesser period, to
say 10 to 12 years, and therefore, the State is not entitled to continue
restriction on full payment of pension and to restore the same only on
completion of 15 years after recovery of commuted value of pension
along with interest.
5. Various other grounds have also been raised for objecting to
the condition and for setting aside the condition provided under Rule 10-A
of the Central Civil Services (Commutation of Pension) Rules, 1981 (in
short "Commutation of Pension Rules"), applicable to the employees of
the State of Himachal Pradesh.
6. The Himachal Pradesh Government Employees the
Fundamental Rules and Supplementary Rules (FR & SR), Central Civil
Services (Pension) Rules, 1972 (as applicable to Government employees
appointed prior to 15.05.2003), General Provident Fund (Central
Services) Rules, 1960, and Central Civil Services (Commutation of
Pension) Rules, 1981, have been made applicable by the Government of
Himachal Pradesh to its employees.
7. There was no specific procedure prescribed for
commutation of pension in Pension Rules 1972 and specific provisions
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2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
have been provided in commutation of Pension Rules, 1981 and as of
now, commutation of pension in Himachal Pradesh is governed by
Commutation of Pension Rules, read with Central Civil Services
(Pension) Rules, 1972.
8. Now, the CCS (Pension) Rules, 1972 have been replaced
by the Central Government by framing the Central Civil Services
(Pension) Rules, 2021, as evident from Rule 87 of the Pension Rules,
2021, the relevant portion whereof reads as under:-
“87. Repeal and Saving
(1) On the commencement of these rules, every rule [including Central
Civil Services (Pension) Rules, 1972], regulation or order including Office
Memorandum (hereinafter referred to in this rule as the old rule) in force
immediately before such commencement shall, in so far as it provides for
any of the matters contained in these rules, cease to operate.”
9. Now Pension Rules, 1972 has been ceased to operate with
regard to any matter contained in Pension Rules, 2021. In Pension Rule
2021, Rule 84 (2), provides as under:-
“84. Application of other rules
(1) …… …… …… ……
(2) The Central Civil Services (Commutation of Pension) Rules, 1981 shall
apply in regard to commutation of pension authorised under these rules,
payment of commuted value of pension and restoration of commuted
pension on expiry of the period of commutation.”
10. It is apt to record that Central Civil Services (Pension) Rules,
2021 have not been adopted by Government of Himachal Pradesh as yet.
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CWP No. 15995 of 2024 a/w connected matters
Therefore, the CCS (Pension) Rules, 1972 read with Commutation of
Pension Rules, 1981 are relevant to be referred and considered for
adjudication of the present petitions.
11. Following provisions of Commutation of Pension Rules,
1981 are also relevant to be referred:-
“2. Application
These rules shall apply to Government servants appointed on or before
31st day of December 2003 who may be entitled to or have been
authorised any class of pension referred to in Chapter V of the Central Civil
Services (Pension) Rules, 1972.
3. Definitions
(1) In these rules, unless the context otherwise requires : -
…… …… …… ……
j. "Pension" means any class of pension including compassionate
allowance referred to in Chapter V of the Pension Rules but does not
include extra pension and the amount, by whatever name called, granted
by the Government to a pensioner as a compensation for higher cost of
living ;
k. "Pension Rules" means the Central Civil Services (Pension) Rules, 1972 ;
CHAPTER II
General Conditions
4 …… …… …… ……
5. Limit on commutation of pension
(1) A Government servant shall be entitled to commute for a lump sum
payment of an amount not exceeding forty percent of his pension.
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CWP No. 15995 of 2024 a/w connected matters
(2) In an application for commutation in Form 1 or Form 1-A or Form 2, as
the case may be, an applicant shall indicate the fraction of pension which
he desires to commute and may either indicate the maximum limit of forty
percent of pension or such lower limit as he may desire to commute. (3)
If percentage of pension to be commuted results in fraction of a rupee,
such fraction of a rupee shall be ignored for the purpose of commutation.
6. Commutation of pension to become absolute
(1) The commutation of pension shall become absolute in the case of an
applicant referred to
(i) in sub-rule (1) of Rule 13, on the date on which the application in
Form 1 is received by the Head of Office ;
(i-a)in sub-rule (3) of Rule 13, on the date following the date of his
retirement ;
(ii) in Chapter IV, on the date on which the medical authority signs
the medical report in Part III of Form 4 ;
Provided that -
(a) in the case of an applicant who is drawing his pension from a treasury
or Accounts Officer, the reduction in the amount of pension on account of
commutation shall be operative from the date of receipt of the commuted
value of pension or at the end of three months after issue of authority by
the Accounts Officer for the payment of commuted value of pension,
whichever is earlier, and
(b) in the case of an applicant who is drawing pension from a branch of a
nationalized bank, the reduction in the amount of pension on account of
commutation shall be operative from the date on which the commuted
value of pension is credited by the bank to the applicant's account to which
pension is being credited.
(c) in the case of an applicant governed by sub-rule (3) of Rule 13 in
whose case the commuted value of pension becomes payable on the day
following the date of his retirement, the reduction in the amount of pension
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2026:HHC:39535
CWP No. 15995 of 2024 a/w connected matters
on account of commutation shall be operative from its inception. Where,
however, payment of commuted value of pension could not be made within
the first month after the date of retirement, the difference of monthly
pension for the period between the day following the date of retirement and
the date preceding the date on which the commuted value of pension is
deemed to have been paid in terms of Rule 49 of the Central Government
Accounts (Receipts and Payments) Rules, 1983, shall be authroized by the
Accounts Oficer.
(2) In the case of an applicant referred to in Rule 9 or Rule 10, the
commuted value is paid in two or more stages, the reduction in the amount
of pension shall be made from the respective dates of the payments as laid
down in Clause (a) or Clause (b) of the proviso to sub-rule (1).
(3) The date on which the payment of the commuted value of pension was
made to the applicant or the commuted value was credited to the
applicant's account shall be entered in both halves of the Pension Payment
Order by the disbursing authority under intimation to the Accounts Officer
who authorized the payment of commuted value of pension.
…… …… …… ……
8. Calculation of commuted value of pension
The lump sum payable to an applicant shall be calculated in accordance
with the Table of the values prescribed from time to time and applicable to
the applicant on the date on which the commutation becomes absolute.
…… …… …… ……
10 A. Restoration of Commuted Pension
The commuted amount of pension shall be restored on completion of
fifteen years from the date the reduction of pension on account of
commutation becomes operative in accordance with rule 6:
Provided that when the commutation amount was paid on more than one
occasion on account of upward revision of pension, the respective
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commuted amount of pension shall be restored on completion of fifteen
years from the respective date(s)
34. Repeal and Savings -
(1) On the commencement of these rules, every rule, regulation or order
including Office Memoranda (hereinafter referred to in this rule as the old
rule) in force immediately before such commencement shall, in so far as it
provides for any of the matters contained in these rules, cease to operate.
(2) Notwithstanding such cesser of operation -
(a) any application for commutation of pension which is pending
before the commencement of these rules shall be disposed of
in accordance with the provisions of old rules as if these rules
had not been made ; and
(b) subject to the provisions of Clause (a), anything done or any
action taken under the old rules shall be deemed to have been
done or taken under the corresponding provisions of these
rules.
TABLE
COMMUTATION VALUES FOR A PENSION OF 1 PER
₹
ANNUM
Effective from 1st January, 2006
[See Rules 3 (1) (m) 8, 26(7), 28(5), 29(1) and 29(2)]
Age
next
birth
day
Commutation
value expressed
as number of
year's purchase
Age
next
birth
day
Commutation
value expressed
as number of
year's purchase
Age
next
birth
day
Commutation
value expressed
as number of
year's purchase
20 9.188 41 9.075 62 8.093
21 9.187 42 9.059 63 7.982
22 9.186 43 9.040 64 7.862
23 9.185 44 9.019 65 7.731
24 9.184 45 8.996 66 7.591
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Age
next
birth
day
Commutation
value expressed
as number of
year's purchase
Age
next
birth
day
Commutation
value expressed
as number of
year's purchase
Age
next
birth
day
Commutation
value expressed
as number of
year's purchase
25 9.183 46 8.971 67 7.431
26 9.182 47 8.943 68 7.262
27 9.180 48 8.913 69 7.083
28 9.178 49 8.881 70 6.897
29 9.176 50 8.846 71 6.703
30 9.173 51 8.808 72 6.502
31 9.169 52 8.768 73 6.296
32 9.164 53 8.724 74 6.085
33 9.159 54 8.678 75 5.872
34 9.152 55 8.627 76 5.657
35 9.145 56 8.572 77 5.443
36 9.136 57 8.512 78 5.229
37 9.126 58 8.446 79 5.018
38 9.116 59 8.371 80 4.812
39 9.103 60 8.287 81 4.611
40 9.090 61 8.194
12. From above provisions, it is evident that on retirement, the
retiring employee has a right to opt for commutation of pension up to 40%
of pension payable to such employee on the date of retirement. Value of
commuted pension is determined by multiplying amount of percentage of
pension opted to be commuted from total pension payable on retirement
with commuted value/factor as per table and 12 months. For example, in
case an employee opts for commutation of 40% of pension at the age of
58 years, then commuted pension shall be 40% of pension payable on
retirement multiplied by factor applicable for next date of birth from the
date of retirement provided in table multiplied by 12.
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13. Earlier, the option for receiving commuted pension was
available on surrender of portion of pension by the retiree permanently.
Portion of the pension up to one-third thereof was permissible to be opted
for commuted pension, but there was no provision for restoration of full
pension at any point during lifetime.
14. By considering demands of pensioners, restoration of
commuted portion of pension was provided on attaining the age of 70
years with effect from 01.04.1982. Later on, the Union of India and State
Governments agreed to restore the commuted portion of the pension with
regard to all civilian employees, at the age of 70 years or after 15 years,
whichever is later. As on date, 15-year formula is in force and full pension
is restored after 15 years.
15. As per Rule 10A of CCS (Commutation of Pension) Rules,
on commutation of pension, amount/percentage of pension opted to be
commuted is deducted from monthly pension payable to the retiree till
completion of 15 years from the date of payment of commuted value of
the pension. In other words, as provided under Rule 10A of Commuted
Pension Rules, the commuted amount of pension shall be restored on
completion of 15 years from the date of reduction of pension on account
of commutation and, therefore, the retiree who opts for commutation of
pension shall receive full pension after restoration of it on completion of
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15 years from the payment of commuted value of the pension, and thus
for 180 months, retiree has to pay back, by way of deduction/reduction of
pension, in lieu of commuted value of pension received by him.
16. Following main points have been raised on behalf of
petitioners to substantiate their plea for restoration of full pension
immediately after recovery of commuted value of pension along with
interest thereon.
17. It has been submitted on behalf of the petitioners that
earlier, factor applicable for determining the commutation value of
pension at the age of 58 years, the superannuation age of the employees
in Himachal Pradesh, was 10.46, but it has now been reduced to 8.371,
and resultantly, the retiring employee is receiving lesser commuted value
of pension in comparison to the commuted value of pension prior to
01.01.2006 and, therefore, it has been submitted that in view of the
reduction in factor to be multiplied, the period of recovery of 15 years also
deserves to be reduced proportionately.
18. In all petitions, examples have been given with regard to the
commutation value of pension received by the petitioners in comparison
to and amount of commuted value of pension along with interest at the
rate of 8% to be recovered or recovered by the Government,
demonstrating that the entire amount along with interest at the rate of 8%
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is being recovered between 11 to 12 years' period, and therefore, it has
been submitted that continuation of recovery of the amount, by not paying
full pension immediately after recovery of the commuted value of pension
along with interest, is amounting to unjust enrichment of the State at the
cost of petitioners.
19. It has been further submitted that earlier rate of interest was
4.75%, but it has also been increased to 8% per annum, whereas in every
sector, including the rate of interest which was being paid on GPF etc.,
has been substantially reduced and, therefore, when rate of interest 6%
per annum was prevailing in the year 1971, being a welfare State,
Government had subsidized the rate of interest on amount to be
recovered of commuted value of pension at the rate of 4.75%. Now, when
prevailing rate of interest has decreased, the rate of interest, being
charged at the rate of 8%, is on higher side, which deserves to be
modified.
20. It has been further submitted that prior to 1981,
commutation value to be assessed was 10.46 of one-third of the pension,
but without restoration. However, subsequently policy decision was taken
on 08.12.1981 regarding restoration of pension at the age of 70 years or
after 12 years, i.e., 144 equal monthly installments, but now the recovery
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with higher rate of interest has been provided till 15 years, which is
without any reasonable cause.
21. It has been submitted that continuation of recovery for 2 to 4
years, after recovery with interest of commuted value of pension paid, is
not permissible for a welfare State, and therefore, impugned Rule 10-A of
the Commutation of Pension Rules deserves to be quashed and set
aside.
22. It has been further submitted on behalf of petitioners that,
though, there is a risk involved in making payment in lump sum of
commuted pension, but in view of increase of life expectancy of human
being to 70.42 years, which in case of Government employees, as per
WHO statistics, has been shown 77 years, there are lesser occasions of
death of the retirees before recovery who have received commuted value
of pension, and, therefore, reduction in the projected risk, reduction in the
factor to determine the amount to be paid as a commuted value of
pension, and resultantly, payment of lesser amount as a commuted
pension, are definitely serious and relevant points to be considered for
reduction in period of 15 years provided in Rule 10-A for recovery of the
amount so paid as commuted value of pension in lump sum.
23. It has been further submitted that Central Government
employees are retiring at the age of 60 years, whereas age of
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superannuation of State Government employees, except that of Class-IV
(Group-D) employees, is 58 years, which makes significant difference
between the risk factor for recovery of commutation value of pension
between Central and State Government employees, and that life
expectancy of Himachal Pradesh Government employee is much higher
as compared to national life expectancy of India. Therefore, it has been
submitted that continuation of recovery from the surviving retiree, under
the garb of amount to be spent by the Government by making full pension
to the family members of retirees on their death before recovery of the
commutation pension, in excess is arbitrary and irrational as the same is
being confirmed without carving out an intelligible differentia between two
classes, that of State Government employees retiring at the age of 58
years and Central Government employees retiring at the age of 60 years
and on this count also, it has been claimed that petitions deserve to be
allowed.
24. In response, it has been contended on behalf of respondent-
State of Himachal Pradesh that retirement benefits of Government
employees are processed and determined by the concerned Department
in accordance with the provisions of CCS (Pension) Rules, 1972, as
applicable at the relevant point of time, and as per CCS (Pension) Rules
and CCS (Commutation of Pension) Rules, 1981, a Government
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employee is entitled to commute a lump sum payment of pension not
exceeding 40%, but purely on an optional basis. There is no compulsion
to opt for commutation of pension.
25. It is further case of the respondent-State of Himachal
Pradesh that petitioners were well aware of the provisions regarding
commutation of pension and the recovery thereof for 15 years and
despite that, they opted for the same, and thus, now they are not entitled
to assail the provisions for which they opted voluntarily, as there was no
compulsion to opt for commutation of pension, and in such eventuality,
the petitioners would have received full pension from the very first day
throughout their lives.
26. It has been further submitted on behalf of respondent-State
of Himachal Pradesh that there is a risk factor involved in the Scheme, as
a pensioner receiving a lump sum amount of commuted value of pension
may die immediately after receiving the same or before the recovery of
entire amount along with up-to-date interest. In such eventuality, the
commuted value of pension paid to the retiree in lump sum is not
recoverable from his family members or out of family pension and
consequently, full family pension is paid to the eligible family members by
the State without deducting any single penny against the payment made
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on account of commutation of pension. Therefore, in such cases, the
Government has to bear the loss of unpaid balance commuted amount.
27. It has been submitted on behalf of respondent-State that
keeping in view the entire facts, including the risk factor like death of the
Government employee immediately after receiving the commuted
amount, the duration of 15 years for recovery of commutation value of
pension along with interest, as fixed by the respondent-State of Himachal
Pradesh, is fair and justified.
28. It has been further submitted on behalf of respondent-State
that the petitioners had retired long ago and they were not compelled to
opt for commutation of pension, but they opted the same and remained
silent at that time, raised no objection to the conditions, and now after a
lapse of 10 to 13 years, they are claiming quashing of the Rule under
which they had opted for commutation of pension. It has been stated that
if the said conditions were not acceptable to the petitioners, they would
have decided not to opt for commutation of pension. Now, after such a
long lapse of time, they are not entitled to agitate the issue and on this
ground as well, the petitions deserve to be dismissed.
29. In response affidavit filed on behalf of the Department of
Pensioners' Welfare of Union of India, it has been stated that CCS
(Pension) Rules, 2021 and CCS (Commutation of Pension) Rules, 1981
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are not ipso facto applicable to the State of Himachal Pradesh, but as
opted by the State Government, the accountability and responsibility of
their implementation lies entirely with the State Government, but not with
the Central Government. It has been further submitted that under the
Allocation of Business Rules, any amendment in Pension Rules or
Commutation of Pension Rules does not fall within the purview of the
Department of Pension and Pensioners' Welfare and it is outside the
purview of this Department. It has been further submitted that any policy
amendment, consultation with the Central Pay Commission and the
Department of Expenditure, Ministry of Finance, would be required.
30. It has been further submitted on behalf of Union of India that
in the judgment passed by the Apex Court in Common Cause, A
Registered Society and Others vs. Union of India, reported in (1987) 1
SCC 142, the Apex Court considered relevant factors like interest rate,
mortality rate, etc., and the commutation table existing in 1986, and
observed that the commutation period should be fixed at 15 years.
31. A decision of the Delhi High Court in judgment dated
17.01.2019 in W.P.(C) No. 1222/2015, titled Forum of Retired IPS
Officers (FORIPSO) vs. Union of India & another, has also been cited,
to refer that pension and commutation of pension are policy matters,
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which are examined and decided on the basis of recommendations of the
Pay Commission by the Authorities.
32. It has been further submitted on behalf of Union of India that
the judgment passed by the Delhi High Court in W.P.(C) No. 1222/2015
was upheld by the Apex Court vide order dated 15.04.2019 passed in
Special Leave Petition, SLP(C) No. 8852/2019, by dismissing the SLP
with observation that there was no reason to entertain the petition.
33. Union of India has also taken the stand that there is no
compulsion for a pensioner to opt for commutation of pension as well as
other terms and conditions including the restoration period, rather, such
conditions are agreed to by the pensioner at the time of exercising such
option. Further that commutation of pension is not based on a simple
calculation of just recovering the amount paid to the pensioner at the time
of retirement as commuted value of pension, rather the pensioner
receives a lump sum amount upfront, and in case the pensioner dies prior
to full recovery, the remaining amount is waived off and, therefore, the
commutation table devised after considering various factors, such as rate
of interest and mortality rate.
34. It has been further submitted on behalf of Union of India that
the commutation table applicable at present w.e.f. 01.01.2006 was
recommended by the Sixth Central Pay Commission, which was accepted
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by the Central Government, and Seventh Central Pay Commission did
not alter or revise the said Table and, therefore, no further revision of the
commutation Table has been carried out.
35. It has been further stated on behalf of Department of
Pension and Pension’s Welfare of Central Government that according to
information provided by the Department of Expenditure, Ministry of
Finance, the methodology for calculating the commuted value of pension
had been deliberated upon by the Central Pay Commissions. The Fifth
Central Pay Commission had proposed a revision of the commutation
table, which had last been updated in March 1971, on the basis of
prevailing mortality rates at that time and an interest rate of 4.75% per
annum, which was considered concessional even at that time.
Subsequently, the Sixth Central Pay Commission reviewed the matter in
greater detail and noted that the mortality rate among Government
pensioners had not changed drastically, whereas interest rates in the
economy had risen substantially. It was observed that since the
commuted portion of pension is restored after 15 years, any further
improvement in life expectancy beyond 15-year window will cease to
affect the actuarial basis for commutation. Based on these
considerations, Sixth Central Pay Commission concluded that there was
no justification for reducing the restoration period to 12 years.
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36. It has been submitted on behalf of Central Government that
the current provisions regarding the restoration period and commutation
value are based on the recommendations of Sixth Central Pay
Commission and the technical study commissioned by it, and this
restoration period of 15 years was also approved by the Apex Court in
Common Cause’s case.
37. It has been further submitted on behalf of Union of India that
Seventh Central Pay Commission has also considered the issue, but did
not recommend any change in the period of restoration and further that,
commutation of pension is not based on a simple calculation of just
recovering the amount paid to the pensioner at the time of retirement;
rather, pensioner gets a lump sum amount upfront, and in case he dies
prior in time, remaining amount is waived off and, therefore, the
commutation table devised after considering various factors such as rate
of interest, mortality rate, etc., is not liable to be interfered with.
38. Respondents have also placed reliance on the judgment
dated 17.12.2024, passed in CWP No. 11858 of 2024 by the Learned
Single Judge in Rajinder Kumar Bhardwaj vs. State of Himachal
Pradesh and Ors., whereby after taking into consideration judgment
passed by Delhi High Court in W.P.(C) No. 1222/2015, titled Forum of
Retired IPS Officers (FORIPSO) vs. Union of India & another, referred
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supra, judgment dated 27.11.2024, passed in CWP No. 9426 of 2023,
titled Shila Devi and Others vs. State of Punjab and others, similar
relief, prayed for restoration of full pension before 15 years from the date
of reduction of pension on account of commutation of pension, was
rejected.
39. Learned counsel for the petitioners have submitted that
judgment passed by learned Single Judge in Rajinder Kumar Bhardwaj’s
case has been assailed and is pending adjudication before this Court
along with this bunch bearing LPA No. 211 of 2025, titled Rajinder Kumar
Bhardwaj vs. State of H.P.
40. In Common Cause's case, dealing with provisions of
Commutation of Pension Rules regarding recovery of amount from
pension, i.e., for restoration of full pension after 15 years of payment of
commuted value of pension, the Apex Court has observed as under:-
“9. In dealing with a matter of this nature, it is not appropriate to be
guided by the example of Life Insurance; equally unjust it would be to
adopt the interest basis. On the other hand, the conclusion should be
evolved by relating it to the 'years of purchase' basis. An addition of two
years to the period necessary for the recovery on the basis of years of
purchase justifies the adoption of the 15 years rule. That is more or less
the basis which appears to be equitable. It may be that this would give rise
to an addi- tional burden on the exchequer but it would not be heavy and
after all it would bring some relief to those who have served the cause of
the Nation at great sacrifice. We are, therefore, of the view that no
separate period need be fixed for the Armed Forces personnel and they
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should also be entitled to restoration of the commuted portion of the
pension on the expiry of 15 years as is conceded in the case of civil
pensioners. And for them too the effective date should be from April 1,
1985.”
41. In case WP(C) No. 1222 of 2015 titled Forum of Retired
IPS Officers (FORIPSO) vs. Union of India & another, Delhi High Court
has observed as under:-
“16. Increase in life expectancy and its effect on commuted pension
cannot be viewed in isolation. Several factors, figures and the entire
pension provisions on the whole including cost to the exchequer have to
be taken into consideration. Commutation table can take into consideration
periodical increase in salary and better saving capacity during service
period due to increase and enhanced pay scales. Courts would hesitate
and not go by one formula and mathematical calculations on assumption
and precept that the formula would be more fair, just and appropriate.
There can be many formulas. Calculations are complex, convoluted and a
tricky task. Fixation of payment of pension or commutation of pension, etc.
are highly difficult and cumbersome exercise which the Court would not
like to step into, undertake and even interfere unless there is complete
arbitrariness and discrimination that is ex-facie apparent. Courts on
perceived wisdom would not declare the table as flawed, acting and
preforming the role of an actuarial. Every government, including the
Central Government, has to take into consideration their available
resources and funds, for any increase and enhancement in pension
requires money which may well have to be diverted from other schemes or
would result in reduction of funds available for poor, the marginalized and
needy.
17. Pension, commutation of pension, etc. are policy matters,
which are examined and decided on the basis of recommendations of the
Pay Commissions by the authorities. No doubt, an executive order or
policy decision is not beyond the scope of judicial review but the Courts do
not go into the nitty gritty of the policy to substitute the table by making
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various computations and calculations, which are possible by different
formulas or by applying a particular formula. Broadly, policy decisions can
be subjected to judicial review when they are unconstitutional being do
hors the provisions of the Act and the Regulations, if the delegatee has
acted beyond its power of delegation and if the executive policy is contrary
to the statutory or larger policy in matters of price fixation, pay fixation, etc.
Courts would not interfere unless formula or method adopted is per se and
ex facie irrational, arbitrary or can be struck down on the four grounds
mentioned above.”
42. As referred supra, aforesaid judgment passed in
FORIPSO’s case has been affirmed by the Apex Court vide order dated
15.04.2019 passed in Special Leave Petition, SLP(C) No. 8852/2019.
43. In Shila Devi's case also, though the plea raised on behalf of
pensioners was rejected by the Punjab and Haryana High Court,
however, the specific stand of the State was recorded regarding
constitution of an Expert Committee, but no direction was given to the
State for constituting such Expert Committee, much less any direction
fixing a time frame for such exercise to be undertaken. Relevant
paragraphs are as under:
“27. It is a matter of record that all the petitioners before us are
retired employees who have admittedly availed of the benefit of
commutation of pension. Admittedly, pension of some of the employees
also stands restored. All the petitioners were in service at the time of
issuance of notification dated 21.07.1998. They never raised any objection
to the stipulated period of 15 years for restoration of pension. Having
availed of a benefit which is clearly voluntary in nature, it is not open to the
petitioners to raise the grievances as noted above, at this stage, to seek a
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variation in the terms and conditions accepted by them with open eyes.
They are not entitled to seek recovery of the amount so deposited by them
in accordance with the accepted terms and conditions.
28. In this factual matrix, the argument that it is a continuing cause
of action as it pertains to pension, is clearly unacceptable. There is no
question of any direction to the State to restore pension on expiry of 11.5
years or 12 years as prayed for or to refund the amount so recovered. It is
necessarily for the State to take a considered decision thereon after
delving into the complex questions and underlying parameters which would
be involved for assessment of the issues. Admittedly, matters related to
commutation of pension are complex affairs involving vexed issues
traversing diverse field which calls for application of specialized expertise.
It is a settled position that in such matters the Court would venture only in
case of manifest and apparent arbitrariness. Learned counsel for
petitioners were unable to point out any material on record to indicate that
the formula adopted is per se and ex facie irrational or arbitrary which calls
for interference by this Court.
29. At this stage, we take note of the specific stand of the State as
projected before us that it would be ready to examine the scheme/period of
commutation while taking into consideration changes, if any, in underlying
parameters and that an Expert Committee would be constituted in this
respect which would be assisted by Recognized Expert Agency or
Institution(s) which possess requisite knowledge and competence in
assessing such matters. In this process the Committee would also invite
and consider submission and representations in the matter from
Associations of pensioners in the State.
30. Keeping in view the fair stand on the part of the State, we do
not find any ground for issuance of any particular direction in this regard
except to observe that in terms of the stand as projected before us, it is
expected that necessary steps in this regard would be taken expeditiously
by the State.
31. Keeping in view facts and circumstances as narrated and
discussed in foregoing paras, all the 808 writ petitions are dismissed with
no order as to cost. It is clarified that the State is entitled to effect
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recoveries which were stayed by way of interim orders in the writ petitions.
Such recovery however be made in a staggered manner to obviate any
hardship to the pensioners.”
44. The judgment passed by the Delhi High Court in W.P.(C)
No. 12781 of 2024 titled Union of India and Ors. vs. Sub Trilok Chand
Retd No. JC374073A and Anr along with connected matters, relied on
behalf of respondents, is also relevant to be referred, wherein after
considering relevant issues like Nature and Object of Pension
Commutation, Excess Recovery and Unjust Enrichment, Doctrine of
Proportionality, Challenge to the validity of the Impugned Rules,
Comparative State Practice and Discrimination, Violation of Supreme
Court Principles Governing Commutation, Absence of Actuarial
Transparency, Interim Judicial Protection and Ongoing Litigation,
Changed Economic Circumstances, Statutory Framework Governing
Commutation, Nature and Salient Features of the Commutation Scheme,
voluntary Acceptance and Binding Nature of the Option, Actuarial and
Financial Basis of the Scheme, Policy Nature of the Fifteen-Year
Restoration Period, Limited Scope of Judicial Review, Absence of Any
Excess Recovery or Constitutional Violation, Historical and Administrative
Context as well as judgments passed by various High Court, including
Shila Devi’s case, Forum of Retired IPS Officers (FORIPSO)’s case
Common Cause’s case, it has been observed as under:-
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“5. Notwithstanding certain factual variations relating to service
conditions or forum of origin and the mathematical calculation of the
amount of pension commuted being recovered by the respective employer,
the underlying controversy in all matters is common, namely, whether
continuation of recovery of the commuted portion of pension for a fixed
period of fifteen years remains legally sustainable despite successive
revisions to actuarial commutation factors, which, according to the
Pensioner-Petitioners, have altered the financial assumptions underlying
the original restoration framework. This contention principally arises from
successive revisions in commutation tables pursuant to CPCs
recommendations, which, according to the Pensioner-Petitioners, altered
actuarial assumptions underlying the original fifteen-year recovery period.
…… ……. ……. …….
27. A holistic reading of the CCS Commutation Rules, executive
instructions, and policy materials demonstrates that the commutation
scheme possesses the following essential characteristics:
i. The scheme is conceived as a social security and welfare
measure, intended to provide immediate financial liquidity at
the time of retirement when employees typically face major
financial obligations such as housing, medical needs, family
responsibilities or debt settlement.
ii. Participation in commutation is entirely voluntary. A retiree
may elect to draw full monthly pension without any
commutation whatsoever.
iii. Only a limited fraction of pension is permitted to be
commuted, ensuring continuity of assured monthly income and
preserving post-retirement financial security. A retiree can opt
for commutation of lower or lesser portion of their pension, i.e.,
any figure below 40% of the basic pension for Central
Government employees and upto 50% for Judicial Officers.
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iv. The commuted amount is paid as a lump sum, which is
treated as tax exempt, while the residual monthly pension
remains taxable.
v. Upon death of the pensioner, no recovery is effected from
legal heirs, and family pension becomes payable independent
of the commutation already received.
28. The modern framework of pension commutation traces its
origin to the decision of the Supreme Court in Common Cause (supra),
wherein the issue of restoration of commuted pension was examined upon
consideration of expert material, actuarial inputs, and governmental policy
evaluation.
29. A careful reading of the aforesaid extracts demonstrates that
the Supreme Court was directly confronted with the identical contention
urged before this Court, namely, that since the commuted portion of
pension is ordinarily recovered within approximately twelve years, fixation
of a fifteen-year restoration period was arbitrary. The Court examined the
nature of commutation, the advantages accruing to the pensioner, the
actuarial basis underlying the scheme and the financial implications for the
State.
30. The Supreme Court recognised two inherent advantages
flowing from commutation: first, the immediate availability of a lump-sum
amount which otherwise would have been received gradually over the life
span of the pensioner; and second, the embedded risk factor, namely, that
the State assumes the risk of premature death without recovery of the
commuted amount.
31. Rejecting the mathematical comparison suggested by the
Pensioner-Petitioners, the Supreme Court evolved the restoration period
on the "years-of-purchase" basis, holding that addition of two years beyond
the recovery period constituted an equitable balance between pensioner
welfare and fiscal responsibility. The Court thus consciously approved the
fifteen-year rule as a nationally uniform standard, extending the same even
to defence personnel.
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32. The "years-of-purchase" basis referred to in Common Cause
(supra) is an actuarial concept. Under this methodology, restoration is not
determined by simple arithmetical recovery of the lump sum but by
maintaining actuarial equilibrium within the pension system. The addition of
a marginal buffer period, accepted by the Supreme Court as equitable,
accounts for longevity risk, financial uncertainty and systemic
sustainability. The said reasoning clearly supports the stand of the Union
of India that fixation of fifteen years forms part of an integrated actuarial
policy rather than a recoverable loan transaction. It may also be noted that
the judgment in Common Cause (supra) has been reaffirmed by the
Supreme Court in R. Gandhi (supra).
…… ……. ……. …….
35. The judgment in FORIPSO (supra) clearly affirms the settled
legal position that the commutation of pension is purely voluntary, wherein
the pensioner retains absolute discretion regarding both the quantum and
the timing of such commutation. It is further observed that the formulation
and periodic revision of commutation tables are tasks predicated upon
complex actuarial evaluations and multifaceted economic variables.
Judicial intervention in such specialized fiscal domains is warranted only in
exceptional circumstances where the impugned action is found to be ex
facie arbitrary, discriminatory, or in manifest violation of constitutional
safeguards.
36. The Division Bench expressly relied upon the reasoning in
Common Cause (supra) while rejecting the argument that recovery within
twelve years invalidates the fifteen-year restoration period. It was further
emphasised that pension economics involves balancing competing public
interests and financial resources of the State.
37. It is also pertinent to note that the judgment in FORIPSO
(supra) was carried in challenge before the Supreme Court by way of SLP
(C) No.8852/2019, which came to be dismissed vide order dated
15.04.2019, thereby lending finality to the view taken by this Court.
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38. The judgment in FORIPSO (supra) was subsequently relied
upon by the Punjab and Haryana High Court in Shila Devi (supra) while
dismissing a large batch of 808 Writ Petitions raising identical grievances
regarding restoration of commuted pension.
39. From the aforesaid extracts, it becomes evident that the Punjab
and Haryana High Court noticed continued acceptance of the fifteen-year
period by successive CPCs and held that pensioners who voluntarily
exercised the option of commutation cannot subsequently seek alteration
of accepted terms. It rejected the plea of continuing cause of action and
emphasised that commutation policy involves specialised economic
assessment warranting limited judicial review.
40. At this stage, it becomes necessary to deal with the submission
advanced on behalf of the Pensioner-Petitioners that the judgments in
FORIPSO (supra) and Shila Devi (supra) did not constitute decisions on
merits and were allegedly rendered on account of absence of complete
factual material before the respective Courts.
41. The said contention cannot be accepted. A plain reading of
both judgments demonstrates that the constitutional challenge to the
fifteen-year restoration period was substantively examined in light of
actuarial principles, policy considerations governing pension schemes and
the binding precedent of Common Cause (supra). The observations
regarding availability of data or expert material were made only in the
context of emphasising judicial restraint in matters involving specialised
economic evaluation. The dismissal of challenges was, therefore, not
procedural or technical in nature but rested upon a conscious judicial
conclusion that fixation of the restoration period forms part of a policy
decision grounded in actuarial assessment and does not warrant
interference under Article 226 in the absence of manifest arbitrariness.
42. Indeed, both judgments reaffirm that courts cannot substitute
actuarial wisdom with isolated mathematical calculations suggested by
individual pensioners. The attempt to characterise the said precedents as
non-merits decisions is, therefore, misconceived.
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43. Furthermore, the Andhra Pradesh High Court in Thupakula
Venkateshwar Rao (supra) examined an analogous challenge to Rule 18
of the Andhra Pradesh Civil Pensions (Commutation) Rules, 1944, which
prescribed an identical fifteen-year period for restoration of pension. After
an exhaustive survey of precedent including Common Cause (supra) and
FORIPSO (supra), the Court rejected the challenge and upheld the validity
of the said rule.
44. A similar challenge was thereafter considered by the
Telangana High Court in M.V.S.N. Acharyulu (supra) concerning Rule 18
of the Telangana Civil Pensions (Commutation) Rules, 1944. The Court,
after detailed consideration of the nature of commutation, the fiscal
implications involved and the limits of judicial review in economic policy
matters, declined interference and upheld the statutory framework.
45. Recently, the Allahabad High Court in Ashok Kumar Agarwal
(supra), Dan Bahadur Yadav (supra), Kaushal Kishore Mishra (supra) and
Radheshyam Shukla (supra), after considering Common Cause (supra),
FORIPSO (supra) and Shila Devi (supra), has reiterated the same position
and upheld the fifteen-year restoration period, holding that pension
commutation rules represent an integrated economic policy and cannot be
invalidated merely on the basis of alternate financial calculations
suggested by pensioners.
46. Similarly, the Madhya Pradesh High Court in Trilokchand
Dhaneriya (supra), while examining Rule 10(1) of the Madhya Pradesh
Civil Services (Commutation of Pension) Rules, 1996 (as amended), held
that determination of commutation factors, rate assumptions and the
period for restoration of pension fall squarely within the policy domain of
the rule-making authority. Observing that such matters involve complex
fiscal considerations guided by expert bodies, the Court declined judicial
interference and dismissed a batch of writ petitions.
47. Further, the Pensioner-Petitioners have contended that
successive CPCs had recommended reconsideration of the restoration
period and that reduction thereof ought to have followed as a logical
consequence of revision of pensionary benefits. The record, however,
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indicates that although the 5th CPC examined the question of restoration
period, the Union of India, upon actuarial evaluation, consciously declined
alteration of the existing framework. Significantly, both the 6th and 7th
CPCs retained the fifteen-year restoration period. Such consistent
retention across multiple expert bodies over decades evidences continuity
of informed governmental policy rather than arbitrary fixation.
48. The revised commutation tables introduced in the year 2008
formed part of a comprehensive restructuring of pay and pension pursuant
to implementation of revised pay scales. The enhancement of salaries and
pensions, revision of longevity assumptions, recalibration of interest
benchmarks and updated actuarial parameters constituted an integrated
fiscal exercise. The commutation tables, therefore, cannot be examined in
isolation divorced from the broader pension reform framework.
Additionally, recommendations or observations made in departmental
consultations, including those of the Department of Pension & Pensioners'
Welfare and the Supplemental Report (March 2021) of the Second
National Judicial Pay Commission suggesting a shorter period, remain
advisory in nature. In the absence of their acceptance by the competent
rule-making authority, such proposals do not alter the binding statutory
framework presently in force.
49. A central misconception underlying the challenge lies in
treating pension commutation as analogous to a loan repayable through
instalments. The Court is unable to accept this foundational premise. The
commuted value of pension is not computed as recovery of principal
advanced to an individual pensioner but is determined through actuarial
tables taking into account multiple macro-economic and demographic
variables, including life expectancy trends, mortality distribution across
pension cohorts, discount rates, opportunity cost of public funds, long-term
pension liabilities of the State, and systemic risk arising from premature
death of pensioners.
50. The commutation scheme therefore does not operate as a
commercial borrowing transaction or lending arrangement. Rather, it
represents a statutorily structured redistribution of pension payments
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across time, founded upon actuarial balancing applicable to a large
pension population.
51. The aforesaid understanding of pension commutation stands
authoritatively affirmed in T.R. Singla (supra), wherein the Punjab and
Haryana High Court recognised that payment of the commuted portion of
pension does not partake the character of a loan or recoverable advance.
The commutation amount constitutes a one-time settlement based upon
actuarial evaluation, under which the Government assumes substantial
financial risk. In the event of death of the pensioner prior to expiry of the
restoration period, no recovery is effected from dependants and family
pension becomes payable notwithstanding the unrecovered commuted
value. The Court expressly acknowledged that, to account for such
mortality risk and systemic financial balancing, recovery during the
prescribed period may exceed a simplistic mathematical equivalence with
the lump-sum amount received. The judgment therefore negates the
foundational premise advanced by the Pensioner-Petitioners equating
commutation with repayment of a financial borrowing.
52. The fifteen-year restoration period must therefore be
understood as an actuarial equilibrium designed for the pension system as
a whole rather than a mathematical recovery period relatable to each
individual retiree. The contention that "recovery stands completed within
twelve years" proceeds on a simplified financial comparison ignoring
actuarial assumptions embedded in the statutory design and already
recognised in binding precedent.
…… ……. ……. …….
56. It is well settled that courts exercise institutional restraint in
matters involving economic or fiscal policy framed by the State, as
consistently recognised in the judicial precedents noticed hereinabove.
…… ……. ……. …….
58. The Supreme Court has repeatedly held that judicial review in
matters of economic policy is confined to examination of legislative
competence, violation of constitutional limitations, manifest arbitrariness, or
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patent irrationality. Courts do not substitute judicially preferred economic
models for those evolved by expert bodies possessing institutional
competence and access to specialised data.
59. Pension commutation policy, involving actuarial projections and
long-term fiscal planning affecting a vast class of retirees, squarely falls
within this domain of policy deference. The revised commutation tables
introduced with effect from 02.09.2008 operate prospectively within
statutory authority and do not create enforceable retrospective
entitlements.
60. The fifteen-year restoration rule applies uniformly to all
pensioners governed by the relevant statutory framework. The Pensioner-
Petitioners have not demonstrated existence of any hostile discrimination,
artificial classification, or unequal treatment among similarly situated
pensioners.
61. Comparisons sought to be drawn with pension regimes
adopted by certain State Governments are misconceived. Separate rule-
making authorities functioning under distinct fiscal conditions are
constitutionally competent to adopt different pension models. Variation
between Central and State schemes does not, by itself, attract Article 14
scrutiny.
62. There can be no dispute that pension constitutes a valuable
statutory right and forms an important component of social security
ensuring dignity in old age. However, regulation of pension through valid
statutory rules framed under Article 309 cannot be characterised as
deprivation of property.
63. Reduction in monthly pension during the commutation period
arises solely from voluntary exercise of a statutory option enabling receipt
of an immediate lump-sum benefit. The temporary reduction thus operates
strictly in accordance with law and cannot be equated with unconstitutional
deprivation.
…… ……. ……. …….
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68. When a retiree consciously elects to commute pension and
receive a substantial tax-free lump sum under clearly prescribed statutory
conditions, the legal consequences attached to that choice remain
operative so long as the underlying scheme is constitutionally valid. The
Pensioner-Petitioners cannot seek retention of the advantage while
selectively repudiating the accompanying statutory terms.
69. Fixation of commutation value and restoration period involves
specialised economic judgment dependent upon actuarial science and
macro-fiscal assessment. Courts have consistently recognised, including in
FORIPSO (supra), that judicial alteration of pension policy may generate
cascading fiscal consequences impacting millions of pensioners and
destabilising long-term budgetary planning.
70. The present challenge essentially invites the Court to replace
actuarial policy with individual financial calculations advanced by the
Pensioner-Petitioners. Such substitution lies beyond permissible judicial
review in absence of demonstrated constitutional infirmity.
…… ……. ……. …….
CONCLUSION:
75. For the reasons recorded in the preceding discussion, this
Court finds that the challenge to Rule 10-A of the CCS Commutation Rules
and analogous provisions governing other pension regimes is devoid of
merit. The prescription of a uniform fifteen-year period for restoration of the
commuted portion of pension represents a conscious policy determination
founded upon actuarial evaluation, expert recommendations and long-
standing statutory practice, and does not suffer from any constitutional
infirmity warranting interference in exercise of writ jurisdiction.”
45. Though it has been claimed by the petitioners that in Shila
Devi's case, direction has been given to the State to constitute an Expert
Committee to examine the scheme/period of commutation by taking into
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consideration changes and underlying parameters, however, as also
recorded herein-before, perusal of Shila Devi’s judgment unambiguously
depicts that the High Court of Punjab and Haryana has only recorded the
specific stand of the State as projected before the Court that the State
would be ready to examine the scheme/period of commutation by
constituting an Expert Committee and there is no direction by the Court to
the State to constitute such Expert Committee.
46. At the cost of repetition, para 30 of Shila Deiv’s case is
being reproduced here:-
"30. Keeping in view the fair stand on the part of the State, we do not find
any ground for issuance of any particular direction in this regard except to
observe that in terms of the stand as projected before us, it is expected
that necessary steps in this regard would be taken expeditiously by the
State."
47. Our understanding in this regard is also fortified from the
order dated 06.10.2025, brought to our notice, passed in SLP Diary No.
40468 of 2025, titled as Ravinder Nath Sharma and Ors. v. State of
Punjab and Ors. preferred against final judgment and order dated
27.11.2024 passed in Shila Devi and other connected matters, wherein
submission of counsel for the petitioner has been recorded as under:
“3. The submission of learned counsel for the petitioners is that the
State was ready to examine the period of commutation of pension through
an expert committee. Therefore, he submits that a simple direction be
issued to the State for constituting such a committee.
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4. Issue notice to the respondents for the limited purpose to
obtain instructions as to the timeframe within which the State is likely to
constitute the said committee so as to examine the period of commutation
of pension.”
48. We have been informed that after the aforesaid order dated
06.10.2025, the petitions are pending and till date, no positive direction
has been issued by the Apex Court to constitute a Committee as referred
to in Shila Devi’s case as well as in SLP Civil Diary No. 40468 of 2025.
49. In the aforesaid facts and circumstances, we are of the
considered opinion that the respondent-State of Himachal Pradesh or
Union of India, on its own, may constitute an Expert Committee to
examine the changed in circumstances, relevant factors, and parameters
relevant to be considered for any amendment in the policy of the State,
and thereafter to consider the recommendations of the Expert Committee,
if any.
50. With the aforesaid observations, we do not find any reason
to issue any mandamus to the State, as prayed for in the petitions or
otherwise requested by the petitioners.
51. For the same reason, we also do not find any reason to
interfere in judgment passed by learned Single Judge of this High Court
dated 17.12.2024 passed in CWP No.11858 of 2024 titled Rajinder
Kumar Bhardwaj vs. State of Himachal Pradesh and others which has
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been assailed by filing LPA No.211 of 2025 listed along these connected
petitions.
52. Before parting we feel it necessary to observe that much
water has flown after 1987 when judgment in Common Cause, A
Registered Society and Others vs. Union of India, reported in (1987) 1
SCC 142 was passed by the Apex Court and there are considerable
changes in relevant factors and circumstances governing the field. There
is reduction of factor to be multiplied for determining commuted value of
pension from 10.46 to 8.371 in case of age of superannuation 58 years
resulting into reduction of commuted value of pension to be paid by the
Government and received by the retiree, considerable reduction in rate of
return/interest, increase in life expectancy of Government employees in
Himachal Pradesh upto 77 years, resultantly decreasing risk of waiving
off paid commuted value of pension on account of death of retiree.
Therefore, State should not act as a private Sahookar (Money Lender) but
as a welfare State like Karta of the family consisting of people of the State
and it must keep balance in the interest of Government as well as retirees
who has to be paid the commuted value of pension and must examine the
matter dispassionately and rationally in order to balance the equities, in
consultation with all stakeholders including retirees, concerned Finance
Department, Pay Commission and other related departments of the State
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as well as Union of India. For this purpose, Expert Committee must be
constituted to submit its expert report/comments to the Government along
with necessary proposed changes, if any so required, in a time bound
manner whereupon State must take final call as expeditiously as possible.
53. Accordingly, all petitions as well as LPA No. 211 of 2025 are
disposed of in aforesaid terms.
Pending miscellaneous application(s), if any, also stand
disposed of.
(Vivek Singh Thakur),
Judge.
(Ranjan Sharma),
16
th
September, 2026 (susheel) Judge.
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