Pension deduction from re-employment salary doesn't violate equal pay for equal work; why SC ruled so
The Supreme Court has held that deducting the pension earned from previous government service from the salary of a post-retirement appointment does not violate the principle of equal pay for equal work.
A bench of Justices S V N Bhatti and N V Anjaria clarified that such a deduction does not mean the pension is withdrawn but only temporarily withheld for the duration of the new appointment, Deccan Herald reported.
Allowing appeals filed by the Uttarakhand government, the apex court set aside the High Court's April 15, 2010 judgement, which had declared Regulation 7(2) of the Uttarakhand Public Service Commission (Conditions of Service) Regulations, 2024, ultra vires Articles 14 and 39(d) of the Constitution.
In its judgement on November 4, 2026, Justice Anjaria for the bench emphasised that a person who accepts a post knowing the applicable service regulations and benefits cannot later challenge those rules or conditions of service.
Lieutenant General (Retired) M C Bhandari retired from the Indian Army on August 30, 2006 and was appointed Chairman of the Uttarakhand Public Service Commission on November 3, 2006.
However, his new salary was fixed after deducting his monthly pension of ₹17,627. Another commission member who had retired as Additional Secretary also faced a similar deduction.
Both officials challenged Regulation 7(2) before the Uttarakhand High Court, which ruled in their favour and struck down the provision.
Later, an office memorandum dated September 16, 2008 clarified that pension received from previous service could be deducted from the basic pay of re-employed Chairmen or members, except for disability or injury pension.
The Supreme Court noted that Article 318 of the Constitution empowers the Governor to frame rules governing the service conditions of Public Service Commission members. The 2004 Regulations were already in force when the two officials were appointed, it added.
The bench held that the two officials' salaries were calculated under the ‘pay minus pension’ rule provided in Regulation 7(2). It said the principle of equal pay for equal work was not relevant in this case.
It also rejected the officials' argument that the 2008 Office memorandum was being applied retrospectively. The court clarified that the 2004 regulations already governed their appointments.
The court also opined accepting the petitioners’ plea would lead to absurd consequences, with total emoluments exceeding the actual salary of the post and possibly surpassing that of the highest office. Both had accepted the posts with full knowledge of the regulations.
It also said that a government servant who accepts a post cannot afterwards challenge the attached service conditions, as per the news report.
Appointed in 2006, the petitioners served more than two years before raising the challenge when they were close to the end of their tenure. The principle of acquiescence barred them from doing so, the bench pointed out.
The court held the high court committed a manifest error in striking down Regulation 7(2). It set aside the high court's judgement as not sustainable in law.
The recent Supreme Court ruling means that receiving a pension from previous government service does not automatically entitle someone to receive that pension in addition to the full salary of a new government appointment.
Where applicable service rules provide for pension deductions, the government can fix the new salary after accounting for the pension.
However, it's important to note that the apex court has not said that all retired government employees will lose their pensions when they take up another job. The ruling concerns appointments governed by specific service regulations and one should check the service's terms and conditions before accepting it.
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