'Pay Minus Pension' Principle Valid For Re-Employed PSC Members; Keeping Pension In Abeyance Doesn't Violate 'Equal Pay For Equal Work': Supreme Court

"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 concept of 'equal pay for equal work' has no pertinence or relevance to be applied on this score." Holding that deducting or keeping pension in abeyance from the admissible salary of retired government servants appointed to constitutional posts does not offend Article 14 or Article 39(d) of the Constitution of India, the Supreme Court on November 4, 2026, upheld Regulation 7(2) of the Uttarakhand Public Service Commission (Conditions of Service) Regulations, 2004, reinforcing the established administrative principle of "pay minus pension".

The dispute arose after Lieutenant General (Retd.) M.C. Bhandari and a retired Provincial Civil Service officer were appointed as Chairman and Member, respectively, of the Uttarakhand Public Service Commission in 2006. The State Government fixed their remuneration pursuant to Regulation 7(1) read with Regulation 7(2) of the 2004 Regulations and an Office Memorandum dated September 16, 2008, by deducting their monthly pension from their admissible pay. The Uttarakhand High Court quashed the deduction and declared Regulation 7(2) ultra vires Article 14 read with Article 39(d), holding that deducting pension earned from past service infringed the doctrine of equal pay for equal work.

Whether the fixation of salary for retired government servants appointed as Chairman or Members of a Public Service Commission on a "pay minus pension" basis under Regulation 7(2) of the 2004 Regulations violates the principle of "equal pay for equal work" under Article 14 and Article 39(d) of the Constitution of India?

Whether keeping pension in abeyance during the tenure on a constitutional post constitutes an impermissible variation of service conditions to the appointee's disadvantage under the Proviso to Article 318 of the Constitution of India?

Whether appointees who accepted constitutional posts with full knowledge of prevailing service regulations are estopped from subsequently challenging the salary fixation norms?

A Bench comprising Justice S.V.N. Bhatti and Justice N.V. Anjaria observed that the High Court fundamentally misdirected itself in applying the doctrine of equal pay for equal work to strike down the regulation governing remuneration.

Deduction of pension is merely a temporary deferment and not a permanent forfeiture of pensionary rights

The Bench clarified that Regulation 7(2) merely holds the previous service pension in abeyance during the tenure of the Chairman or Member of the Commission. Once the tenure on the constitutional post concludes, the entitlement to the pension earned from previous service stands revived in full.

The Court emphasized that there is no deprivation of pension, noting that at the end of the tenure of the Chairman or Member, the entitlement which was kept in abeyance would revive and the appointees would receive their admissible pension thereafter.

Equal pay for equal work has no application to post-retirement pay fixation norms

Addressing the constitutional challenge, the Court firmly rejected the High Court's view that deducting pension from the basic pay payable to Commission members amounts to invidious discrimination under Article 14 read with Article 39(d).

The Bench observed that the concept of equal pay for equal work had no relevance to the issue at hand and that the question of breach of the doctrine did not arise, rendering the High Court's declaration of unconstitutionality unsustainable.

Adding pension to admissible pay would lead to absurd consequences and excessive emoluments

The Supreme Court highlighted that accepting the respondents' plea to receive full salary atop their pension would distort administrative pay scales.

The Court noted that if the salary was determined by adding the pension receivable from previous service, the total amount would exceed the actual salary payable for the post and perhaps become higher than the salary of the highest administrative offices.

Article 318 Proviso is not violated when conditions were pre-notified and applicable at the time of appointment

The Court affirmed that applying the "pay minus pension" formula did not constitute a disadvantageous variation in service conditions under the Proviso to Article 318 of the Constitution, as the 2004 Regulations were already in force when the appointments were made.

The Bench held that subsequent executive clarification by way of an Office Memorandum did not introduce retrospective detriment, but merely formalized the statutory discretion already vested in the Governor under Regulation 7(2).

Doctrine of acquiescence bars appointees from challenging rules after accepting appointment

Invoking the settled principle that a candidate who enters a process cannot subsequently challenge the rules of the game, the Court held that the respondents were legally estopped from assailing the pay structure.

The Bench recorded that an employee who accepts an appointment with open eyes cannot afterwards be permitted to resile from or agitate against the service regulations attached to the post, especially after having served out a substantial part of their tenure.

The Supreme Court allowed the appeals preferred by the State of Uttarakhand, set aside the judgment and order of the High Court, and upheld the validity and application of Regulation 7(2) of the Uttarakhand Public Service Commission (Conditions of Service) Regulations, 2004.

Date of Decision: November 04, 2026