Bruhaspati Samal
General Secretary
Confederation of Central Govt Employees and Workers
Odisha State CoC, Bhubaneswar
Pension serves as a vital component of social security, ensuring that retirees and senior citizens maintain financial stability after years of dedicated service. In India, the right to pension is underpinned by various constitutional provisions and reinforced by landmark judicial pronouncements, affirming it as a protected entitlement rather than a discretionary benefit. However, the enactment of the Finance Act 2025 introduces amendments that potentially contravene these established rights, leading to concerns about discrimination among pensioners and the erosion of social security for senior citizens.
The Constitution of India enshrines several articles that safeguard the rights of individuals, including retirees and senior citizens. Article 14 guarantees equality before the law and equal protection of the laws, prohibiting arbitrary discrimination. In the landmark case of D.S. Nakara & Others v. Union of India, the Supreme Court held that classifying pensioners based on their date of retirement for the purpose of granting pension benefits violates Article 14, as it creates artificial distinctions within a homogeneous group without a rational basis. This judgment underscores that all pensioners form a single class and should be treated uniformly.
Article 41 directs the State to make effective provisions for securing the right to work, education, and public assistance in cases of unemployment, old age, sickness, and disablement within its economic capacity. This article emphasizes the State's responsibility to provide social security measures, including pensions, to support individuals in their old age. Furthermore, Article 300A asserts that no person shall be deprived of their property save by authority of law. The Supreme Court, in Deokinandan Prasad v. State of Bihar & Others, recognized that the right to receive pension is a property right under Article 31(1) (now Article 300A), and cannot be arbitrarily withheld. The Court stated that pension is not a bounty or a matter of grace but a right earned by an employee through years of service.
Judicial interpretations have consistently reinforced the view that pension is a vested right of employees. In Deokinandan Prasad v. State of Bihar & Others, the Supreme Court emphasized that the grant of pension does not depend upon the discretion of the State but is governed by rules, and a government servant coming within those rules is entitled to claim pension as a matter of right. Similarly, in Krishna Kumar v. Union of India, the Court distinguished between pension retirees and provident fund retirees, highlighting that pension is a continuing obligation of the State, whereas provident fund is a one-time settlement, thereby underscoring the unique nature of pension as a form of social security.
However, the Finance Bill 2025, passed in the Lok Sabha on March 25, 2025, threatens to dismantle this very foundation by enabling the government to make discriminatory distinctions among pensioners. As enacted now, Clause 149 and 150 (Part - IV , Chapter - 5 of Finance Act 2025 state as follows:-
149. (I) Without prejudice to the provisions of the pension rules, the Central Government shall have the authority to establish distinctions among pensioners as a general principle.
(2) Having regard to the recommendations of the Central Pay Commission, and subject to such norms, principles and method as may be determined by the as Central Government, distinction may be made or maintained amongst the pensioners, which may emanate from the accepted recommendations of the Central Pay Commissions. and in particular a distinction may be made on the basis of the date of retirement of a pensioner or the date of operationalisation of an accepted recommendation of a Central Pay Commission.
(3) The Central Government may from time to time lay down such norms, principles and method in regard to acceptance of the recommendations of the Central Pay Commissions including, among other things, distinction among pensioners that may arise out of the acceptance of such recommendation and in particular pension claims and liabilities.
(4) The norms, principles and method of pension revision, as per accepted recommendations of a particular Central Pay Commission, shall be effective from such date as may be determined by the Central Government and the benefit of such accepted recommendation shall not be given effect to from an earlier date.
150. Notwithstanding anything contrary contained in any judgment, decree or order of any court, tribunal authority and notwithstanding anything contained in or the pension rules,-
(a) it is hereby clarified that the Central Government has the authority and shall always deemed to have had the authority, to classify its pensioners, and may create or maintain distinction amongst pensioners as deemed expedient for implementing the recommendations of he Central Pay Commissions under this Part;
(b) it is also clarified that the date of retirement of pensioners shall be the basis of distinctions and for classification in regard to pension entitlement.
Thus, this legislation, under the guise of "Validation of the CCS (Pension) Rules and Principles for Expenditure on Pension Liabilities from the Consolidated Fund of India," introduces a dangerous precedent that will not only affect the financial stability of retired employees but also violate constitutional principles of equality and justice. The validation of the CCS (Pension) Rules effectively allows the government to distinguish among pensioners based on the date of retirement. This directly undermines the long-standing practice of applying the recommendations of successive Pay Commissions uniformly across all pensioners. By retrospectively making this legislation applicable from June 1, 1972, the government has sought to justify past disparities while setting the stage for future discrimination. The move will have severe financial and social consequences for millions of retired employees who rely on their pensions for survival. This retroactive application has led to a reduction or denial of pension benefits that retirees were rightfully entitled to, violating the principles laid out in Articles 14 and 16 of the Constitution, which guarantee equality before the law and prohibit discrimination. The Allahabad High Court, in a recent judgment, held that denial of pension by retrospectively applying amended rules is unconstitutional, as it infringes upon the fundamental rights of individuals.
Furthermore, the amendments have resulted in disparities among pensioners, with similarly situated individuals receiving varying benefits based on arbitrary cut-off dates. Such classification lacks a rational nexus to the objective sought to be achieved and is deemed arbitrary and discriminatory, contravening Article 14. The Supreme Court, in D.S. Nakara, ruled that classification based on retirement dates is artificial and violates the equality clause, emphasizing that all pensioners form a homogeneous class and should be treated equally.
By altering the pension structure unfavourably for retirees, the Finance Act 2025 undermines the social security framework intended to support senior citizens. Pension serves as a critical source of livelihood post-retirement, and any diminution adversely impacts the dignity and financial independence of the elderly, conflicting with the spirit of Article 21, which guarantees the right to life and personal liberty. The Bombay High Court has recognized that the right to livelihood is an integral part of the right to life, and by extension, pension is a fundamental right to livelihood.
In conclusion, the amendments introduced by the Finance Act 2025 to pension provisions appear to contravene established constitutional rights and judicial pronouncements that safeguard pension as a property right and a facet of the right to life and livelihood. The retrospective application of these amendments, resulting in discrimination among pensioners and undermining the social security of senior citizens, raises serious legal and ethical concerns. It is imperative for policymakers to revisit these provisions to ensure alignment with constitutional mandates and to uphold the rights and dignity of retirees and senior citizens.
(The author is a Service Union Representative and a Columnist. eMail: samalbruhaspati@gmail.com, Mobile: 9437022669)
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