Employer Setting Cut-Off Dates For Pension Schemes Not Violative Of Article 14: J&K High Court

The High Court of Jammu & Kashmir and Ladakh has ruled that employers are well within their rights to fix a cut-off date for introducing new pension or retirement schemes, and such decisions do not violate the equality clause under Article 14 of the Constitution.The court thus upheld the government's decision to grant pension benefits only to employees of the Sher-i-Kashmir International Conference Center (SKICC) who retired on or after January 1, 2014, while denying the same to those who retired before that date.Citing State of Punjab v. Amar Nath Goyal (2005) Justices Sanjeev Kumar and Puneet Gupta observed, “.. a policy decision to restrict the benefit to persons after a particular cut- off date on the basis of financial implications for implementation of such a decision ought not to be considered discriminatory”These observations came came in response to a Letters Patent Appeal (LPA) filed by the State of Jammu & Kashmir and SKICC against a writ court order that had earlier ruled in favor of a retired employee, Khurshid Ahmad Nageeb, who sought pension benefits despite retiring in 2010.Nageeb retired as Director of SKICC on May 31, 2010 but at the time of his retirement, SKICC was not a pensionable organization, and Nageeb was denied pension benefits. However, in 2014, the Jammu & Kashmir government issued Government Order No introducing the Defined Pension Rules of 2014, which extended pension benefits to SKICC employees retiring on or after January 1, 2014. Nageeb, who had retired before this cut-off date, challenged the order, arguing that the exclusion of pre-2014 retirees was arbitrary and violated Article 14 of the Constitution.The writ court had ruled in Nageeb's favor, declaring the cut-off date as arbitrary and directing the government to release his retiral benefits with 6% interest. The state and SKICC appealed this decision, leading to the instant LPA.Adjudicating the matter, the court emphasized that employers have the right to fix cut-off dates for introducing new pension schemes or discontinuing existing ones. The bench noted that simply because both sets of employees those who retired before January 1, 2014, and those who retired after are retired employees of SKICC, it does not mean they form a single homogeneous class. Therefore, Article 14, which guarantees equality before the law, does not apply in this case, the court explained. The court rejected the argument that the cut-off date was arbitrary or discriminatory. It cited D.S. Nakara vs. Union of India (1983) and Union of India vs. S.R. Dhingra (2008), to underline that fixing a cut-off date for pension benefits is not inherently discriminatory unless it is shown to be capricious or whimsical."What is discriminatory is the introduction of a benefit retrospectively or prospectively by fixing a cut-off date arbitrarily, thereby dividing a single homogeneous class of pensioners into two groups and subjecting them to different treatment," the court stated.The court clarified that while pension is a vested right for employees holding pensionable posts, it is not a fundamental right. The entitlement to pension depends on the rules governing the service conditions of the employee, the bench underscored. In this case, the court found that since SKICC was not a pensionable organization at the time of Nageeb's retirement, he had no vested right to pension benefits."Right to pension is not a fundamental right guaranteed by any Article of Part III of the Constitution of India. It is a mere condition of service," the court noted, citing its earlier judgment in State vs. Hamidullah Andrabi (2021).The court also considered the financial implications of extending pension benefits to all retirees, regardless of the cut-off date. The court stated, "The Government, which exercises administrative control over SKICC, took a policy decision to extend the benefit of pension to the employees of the Society who retired on or after 01.01.2014,". After a thorough examination of the facts and legal precedents, the Court allowed the appeal filed by the state and SKICC, setting aside the writ court's judgment. Case Title: State Of J&K Vs Khurshid Ahmad NaqeebCitation: 2025 LiveLaw (JKL) 111Click Here To Read/Download Judgment

Employer Setting Cut-Off Dates For Pension Schemes Not Violative Of Article 14: J&K High Court

LIVELAW NEWS NETWORK

Tags