Rs.17,627 out of a basic salary of Rs.26,000 was deducted from a retired Lieutenant General appointed Chairman of the Uttarakhand Public Service Commission, and the Supreme Court has now upheld the ‘Pay Minus Pension’ rule behind it. Allowing the State’s appeals, it held that withholding pension during the new tenure is not withdrawal of the pension and does not violate equal pay for equal work.
New Delhi: Pension held in abeyance while a retired officer serves on a Public Service Commission is not pension taken away, the Supreme Court has said while setting aside two Uttarakhand High Court judgments that had invalidated the State Commission’s “pay minus pension” arrangement for retired government servants appointed to it [State of Uttarakhand through Chief Secretary and others v. M.C. Bhandari and another].
A Bench of Justices S.V.N. Bhatti and N.V. Anjaria allowed Civil Appeal Nos. 1614 and 1615 of 2011 on November 4, 2026. Justice Anjaria authored the judgment, reported as 2026 INSC 1194.
Withholding, not withdrawal
On equal pay for equal work, the Supreme Court parted ways with the High Court. It treated the pension-related adjustment as operating during the officer’s subsequent tenure at the Commission, rather than as an extinguishment of the pension earned from earlier service.
In paragraph 7.2, the Court explained that the pension entitlement kept in abeyance would revive when the Chairman or Member left that office. It emphasised:
“In other words, there is no withdrawing of the pension, it is only the withholding during the period when the posts of the Chairman or, as the case may be, the Member of the Uttarakhand PSC is held.”
The Bench held in paragraph 7.3 that the equal-pay doctrine had no application to this issue and that the High Court had misdirected itself in using it to invalidate the regulation. It also agreed with the High Court’s separate conclusion that the adjustment did not amount to an impermissible variation in service conditions under the proviso to Article 318.
The Court relied on Gurmesh Prakash Bishnoi v. State of Haryana and others, (1998) 5 SCC 260, which addressed a pension restriction during a later tenure as Public Service Commission Chairman. It noted the distinction between an embargo operating during that tenure and the pension entitlement after it ended.
Regulation 7(2) and the two officers
The dispute concerned Regulation 7(2) of the Uttarakhand Public Service Commission (Conditions of Service) Regulations, 2004. For a Chairman or Member who is a retired government servant, it empowers the Governor to determine whether service pension should be held in abeyance, wholly or partly, or whether the prescribed pay should be reduced by an amount not exceeding that pension if the pension continues to be drawn in full.
Lieutenant General (Retired) M.C. Bhandari was appointed Chairman in 2006. His basic salary was fixed at Rs.26,000, with Rs.17,627 deducted by reference to his military pension. In the connected case, former State civil service officer Sohan Lal became a Member after voluntary retirement; his basic salary of Rs.22,500 was reduced by his pension amount of Rs.11,025. These were the pay figures applicable to the appointments in dispute.
The officers had sought salary fixation without those deductions. In April 2010, the High Court struck down Regulation 7(2) under Article 14 read with Article 39(d), set aside the September 16, 2008 Office Memorandum and directed reimbursement of deductions made under it.
The Governor’s later determination
The officers also argued that the Governor’s determination came after their appointments and that the 2008 Office Memorandum could not apply retrospectively.
Rejecting that contention, the Court noted that the 2004 Regulations were already in force when both officers accepted their posts. Paragraph 9.2 states that Regulation 7(2) did not require the Governor’s decision to precede, or coincide with, the appointment, nor did it prohibit pay-minus-pension fixation pending that decision.
The Bench examined the State’s file notings concerning the decision. It found that the proposal had been processed through the relevant authorities and had culminated in the determination reflected in the Office Memorandum. The determination was duly taken under the regulation and lawfully applied to these officers, it held.
Acceptance of the posts
The Court further held that both officers had accepted appointment knowing that the notified Regulations governed their service conditions. In paragraphs 11.1 to 12.1, it applied estoppel and acquiescence, noting their acceptance of the posts and subsequent challenge after enjoying their benefits.
These were additional grounds in the judgment. The Bench had independently considered and rejected the constitutional and regulatory objections to the pension adjustment.
What the Court finally ordered
In paragraphs 13 and 14, the Supreme Court set aside the High Court’s April 15, 2010 judgments in Writ Petition Nos. 182 (SB) and 181 (SB) of 2008 and allowed the State’s appeals. The decision is a final disposal of those appeals.
The ruling concerns pension-linked salary fixation under the Uttarakhand PSC Regulations for retired government servants appointed as Chairman or Members. The Office Memorandum reproduced in the judgment expressly excludes injury and disability pension from the deduction. The judgment should therefore be read with the governing regulations and the category of pension involved.
Case Title: State of Uttarakhand through Chief Secretary and others v. M.C. Bhandari and another
Case Numbers: Civil Appeal No. 1614 of 2011 with Civil Appeal No. 1615 of 2011
Court: Supreme Court of India
Bench: Justices S.V.N. Bhatti and N.V. Anjaria
Decision Date: November 4, 2026
Neutral Citation: 2026 INSC 1194
Outcome: State’s appeals allowed; High Court judgments invalidating Regulation 7(2) set aside.