State-Owned Corporations Can't Cite Financial Constraints To Deny Pensionary Benefits: Himachal Pradesh High Court
The Himachal Pradesh High Court has held that State-owned corporations cannot cite financial constraints to deny pensionary benefits to eligible employees and their families, observing that such entities "are nothing but white elephants" if they continue to withhold dues despite settled legal rights. Allowing a writ petition filed by the legal heirs of a voluntarily retired employee, the...
The Himachal Pradesh High Court has held that State-owned corporations cannot cite financial constraints to deny pensionary benefits to eligible employees and their families, observing that such entities "are nothing but white elephants" if they continue to withhold dues despite settled legal rights.
Allowing a writ petition filed by the legal heirs of a voluntarily retired employee, the Court directed the Corporation to release arrears of pension and family pension within three months, holding that monetary crunch cannot defeat a vested statutory entitlement.
Justice Ajay Mohan Goel remarked that: "It is very, very saddening that the reason on account whereof the pensioners of the Corporation were being denied pension in the year 2009, has not changed even after almost two decades. The above demonstrates that either these Corporations are nothing but white elephants or they lack the intent to pay pensionary benefits to those who are entitled to the same."
Background:
The Court was dealing with a writ petition filed by Smt. Raj, the widow of late Jai Ram Dhiman, a Production Manager in the respondent-Corporation, who had taken voluntary retirement on September 24, 2001 during the operation of the Himachal Pradesh Corporate Sector Employees (Pension, Family Pension, Commutation of Pension and Gratuity) Scheme, 1999.
During the pendency of the proceedings, Smt. Raj passed away and was substituted by her children, who pursued the claim for pension arrears and family pension.
The petitioners contended that although the deceased employee was undisputedly entitled to pension under the applicable scheme, the Corporation had failed to release the pension and consequential family pension.
The Court noted that the respondent-Corporation itself had admitted the petitioners' entitlement and had justified the non-payment solely on the ground of financial difficulties.
Holding that the petitioners' rights had crystallised and stood admitted by the Corporation, the Court allowed the writ petition. It declared the respondents' failure to release pension and family pension as illegal and directed payment of all arrears within three months.
The Court further ordered that if the payment is not made within the stipulated period, it shall carry interest at 6% per annum from the date of filing of the writ petition.
Case Name: Smt. Raj (since deceased) through her legal representatives,
namely, Smt. Vandana and another v/s State of Himachal Pradesh and another
Case No.: CWP No.1170 of 2022
Date of Decision: 20.07.2026