{"id":298145,"date":"2023-07-31T17:00:05","date_gmt":"2023-07-31T11:30:05","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=298145"},"modified":"2023-08-02T08:36:50","modified_gmt":"2023-08-02T03:06:50","slug":"applying-reduced-commutation-factor-basic-pay-contrary-to-ccsrules-delhi-hc-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/07\/31\/applying-reduced-commutation-factor-basic-pay-contrary-to-ccsrules-delhi-hc-legal-news\/","title":{"rendered":"Applying reduced commutation factor without considering corresponding basic pay is contrary to CCS (Commutation of Pension) Rules, 1981: Delhi High Court"},"content":{"rendered":"
\n

Delhi High Court:<\/b> In a case wherein, the petitioner challenged the Central Administrative Tribunal’s (‘Tribunal’) order dated 27-08-2019, whereby, the petitioner’s grievances regarding the calculation of ‘commutation of pension’ were dismissed, the Division Bench of V. Kameswar Rao and Anoop Kumar Mendiratta*<\/b>, JJ., set aside the order passed by the Tribunal and directed the respondents to pass a fresh speaking order recalculating the commutation of pension after taking into consideration the Central Civil Services (Commutation of Pension) Rules, 1981 (‘Commutation Rules’)s.<\/p>\n

Background<\/b><\/p>\n

The petitioner superannuated from the post of Additional Controller (Admn.) from the respondent, National Technical Research Organisation on 30-06-2014, and provisional pension was sanctioned in view of three disciplinary proceedings pending against him at the time of superannuation. The petitioner became entitled for payment of DCRG, Commutation of Pension and Regular Pension on conclusion of disciplinary proceedings in 2018.<\/p>\n

The petitioner contended that respondent illegally deducted Rs. 6,03,190, from his commutation of pension, in violation of Rule 6(1)(b) of the Commutation Rules read with Rules 12 and 13 and no effective hearing was given to the petitioner in this regard. On the other hand, respondent contended that the deductions were made to avoid double benefit, as the petitioner had already received provisional pension after his superannuation.<\/p>\n

Analysis, Law, and Decision<\/b><\/p>\n

The Court observed that “commutation of pension under the Commutation Rules, was a payment of portion of the pension which was calculated based on the formula prescribed by the Commutation Rules. The employee was entitled to receive the value of commuted pension in lump sum up to 40% in one go and the employer was absolved from the payment of the pension to the extent commuted as determined in terms of the Commutation Rules after fifteen years. The full pension was thereafter restored”<\/i>.<\/p>\n

The Court observed that Rule 4 of the Commutation Rules placed restriction on commutation of pension and provided that no government servant against whom departmental or judicial proceedings, as referred to in Rule 9 of the Commutation Rules had been instituted before the date of his retirement or the pensioner against whom such proceedings were instituted after the date of his retirement, shall be eligible to commute a percentage of his provisional pension authorized under Rule 69 of the Commutation Rules or the pension, as the case might be during the pendency of such proceedings.<\/p>\n

The Court further opined that Rule 6 provided as to when the commutation of pension becomes ‘absolute’. The proviso (b) to Rule 6(1) provided that in case of an applicant, who had drawn pension from a branch of 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 the pension was credited by the bank to the applicant’s account. Further, Rule 8 provided that the lump sum commuted value of pension payable to the applicant shall be calculated in accordance with the table of values prescribed from time to time and applicable to the applicant on the date on which the commutation becomes ‘absolute’.<\/p>\n

The Court noted the fact that if on the date of superannuation, i.e., 30-06-2019, no disciplinary proceedings would have been pending, the petitioner would have received the commutation amount of Rs. 12,10,418 on the basic pay of Rs. 30,775 multiplied with 8.194 (i.e., commutation value expressed as number of years of purchase at the relevant time). However, due to pending disciplinary proceedings, the commuted value of pension could only be calculated on conclusion of the proceedings i.e., on 11-07-2018. The said amount was first calculated based on basic pay multiplied by the relevant commutation factor of 8.194 on 16-08-2018, but later, it was revised in view of the directions issued by the Tribunal. Thereafter, instead of applying the commutation factor of 8.194, the commutation factor of 7.731 had been applied taking the age on next birthday of the petitioner as 65 years.<\/p>\n

The Court opined that the Tribunal failed to appreciate that the calculations made by the respondents overlooked proviso (b) to Rule 6 as well as Rule 8 of the Commutation Rules and ‘commutation value expressed as number of years of purchase’ prejudicial to the petitioner could not be applied. The Court further opined that the calculation made by the respondents applying reduced commutation factor without keeping in perspective the corresponding basic pay was contrary to the Commutation Rules.<\/p>\n

Accordingly, the Court set aside the Tribunal’s order and directed the respondents to pass a fresh speaking order recalculating the commutation of pension after considering the relevant rules.<\/p>\n

[Suresh Sharma v. National Technical Research Organisation, 2023 SCC OnLine Del 4373<\/a>, decided on 27-7-2023<\/span>]<\/p>\n

*Judgment by- Justice Anoop Kumar Mendiratta<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case :<\/p>\n

For Petitioner: M.K. Bhardwaj, M.D. Jangra, Advocates;<\/p>\n

For Respondents: Vikram Jetly, CGSC; Shreya Jetly, Advocate; Mimansak Bhardwaj, GP; Kailash Nath Tiwari, Senior Account Officer.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“The Tribunal apparently failed to appreciate that the calculations made by the respondents overlooked proviso (b) to Rule 6 as well as Rule 8 of the Central Civil Services (Commutation of Pension) Rules, 1981 and commutation value expressed as number of years of purchase, prejudicial to the petitioner cannot be applied.”<\/i><\/p>\n","protected":false},"author":67011,"featured_media":293503,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[59872,32029,59871,38401,2543,9351,5271,6852],"class_list":["post-298145","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-ccs-commutation-of-pension-rules","tag-central-administrative-tribunal","tag-commutation-of-pension","tag-deductions","tag-Delhi_High_Court","tag-disciplinary-proceeding","tag-pension","tag-superannuation"],"yoast_head":"\nApplying reduced commutation factor without considering corresponding basic pay is contrary to CCS (Commutation of Pension) Rules, 1981; 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