Can’t deny medical reimbursement to retirees by citing financial distress: HC

A public corporation cannot evade its obligation to reimburse medical expenses to its retired staff by pleading financial distress, the Punjab and Haryana High Court has held, while striking down orders denying post-retirement medical benefits. The Bench made it clear that rejection of medical reimbursement claim under such circumstances was not only arbitrary, but also unreasonable.

“This Court cannot lose sight of the fact that a public body cannot shrug off its responsibility to extend the medical reimbursement benefits to its retired employees by simply citing financial difficulties. The corporation concerned availed the services of these employees during the prime and youthful years of their lives. After retirement, when age-related health problems begin, these employees need medical care and reimbursement the most. To deny medical reimbursement, at this stage, is wholly arbitrary and unreasonable,” Justice Harpreet Singh Brar asserted.

The ruling came in a case where retired employees were seeking directions to Haryana and other respondents to provide medical reimbursement. Among other things, the Bench was told that the Haryana Police Housing Corporation Ltd was extending medical facility to serving employees, while denying it to retired employees.

It was argued that distinction could not be made between retired and serving employees. A Division Bench of the High Court had already held medical facility could not be denied to retired employees while extending it to serving employees. The SLP filed against judgment stood dismissed.

“In the present case, the petitioners are admittedly retired employees of respondent-corporation. No material has been produced by the respondents to show that the benefit of medical reimbursement was lawfully withdrawn or altered prior to the petitioners’ retirement. The impugned orders dated June 27 and July 8, 2010, to the extent they deny medical reimbursement solely on the basis of financial incapacity of the respondent/Corporation, are unsustainable and contrary to the settled legal position.

Justice Brar asserted respondents had not been able to point out any rule, regulation or policy to show that “retired State government employees who form the benchmark for parity under the governing resolutions, are treated differently. In the absence of any such intelligible differentia, placing retired employees of the respondent/Corporation, in a disadvantaged class, is constitutionally impermissible”.

Allowing the petition, the court held that the claim of the retired employees deserved to be accepted. Quashing the impugned orders, Justice Brar directed the release of admissible medical reimbursement amount to the petitioners strictly in accordance with the applicable rules and the law. “If the payment is not made within the stipulated period, the amount shall thereafter carry interest at 6 per cent per annum from the date of default till the date of actual payment”.