Chandigarh order on commuted value of pension challenged in CAT

Ramkrishan Upadhyay

Chandigarh, June 6

An order of the Chandigarh Administration for recovery of commuted value of pension after 10 years has been challenged before the Chandigarh Bench of the Central Administrative Tribunal (CAT). The Bench consisting of Suresh Kumar Batra, Judicial Member, while issuing the notices for July 4 has sought a reply from Secretary, Ministry of Home Affairs, New Delhi, Finance Secretary of Chandigarh Administration and Principal Accountant General, UT Pension Branch, Chandigarh, on an application filed by more than 12 retired employees of the Administration.

In the application filed through advocate Harish Chandra, the employees said they worked as JEs, AAE and UDC in the Administration and had retired in the period starting from 2007 till 2009.

They said as per the policy prevailing at the time of their retirement, a government employee could commute a portion not exceeding 40% of their monthly pension at the time of retirement. The commuted portion of the pension gets restored after 15 years from the payment of the commuted value of pension.

Later, it has come to their notice that the amount of commuted value of pension could be recovered in 10 years and not in 15 years. They said the 15-year period is illegal and unjust. They said the fixation of 15 years period for restoration of full pension was not justified.

The applicants also relied upon a judgment of Kerala High Court of 2005 in Central Government Pensioners Association vs Union of India. In this judgment the high court observed that the fifth Central Pay Commission report had recommended that the restoration of pension should be after 12 years instead of 15 years.

They further said Punjab Government pensioners who had got commuted value of pension and the recovery was being made beyond 10 years had approached the high court. The latter in the order dated April 14, while issuing the notices to the state stayed further recovery from the pensioners.

Moreover, the life expectancy in Punjab is about 72 years, which is higher than that at the national level. So, the risk factor involved in the recovery of the commuted amount has become almost nil, it said.

In view of this, the applicants sought quashing of the action taken by the respondents.

with regard to recovery of commuted value of pension in excess of what was to be recovered. They termed it as illegal and arbitrary. They also sought directions to the respondents to refund the excess recovery with interest.

What the policy says

As per the policy prevailing at the time of the retirement of those filing the appeal, a government employee could commute a portion not exceeding 40% of their monthly pension at the time of retirement. The commuted portion of the pension gets restored after 15 years from the payment of the commuted value of pension.