Court Rules Unilateral Reduction of Pension Benefits Violates Natural Justice, Upholding Retirees’ Rights
In a significant ruling, the Patna High Court has upheld the rights of retired non-teaching staff from L.N. Mithila University to receive full Assured Career Progression (ACP) benefits and proper pension adjustments. The judgment was delivered by Justice Harish Kumar, who criticized the university’s unilateral decision to reduce retirement benefits without any prior notice, declaring it a violation of natural justice and established pay equity standards. The court ordered the immediate restoration of original pension entitlements along with interest on any delayed payments.
Background of the Case
A group of retired non-teaching employees from L.N. Mithila University in Bihar filed petitions claiming that they were wrongfully denied the complete benefits of the ACP scheme. These employees, who served in various roles such as Office Assistants and Accountants, argued that despite being entitled to pay scales comparable to those of State Government employees, the university unilaterally reduced their retirement benefits.
Under the ACP scheme, employees who have limited promotional opportunities are eligible for pay upgrades at specific career milestones. The petitioners alleged that the university deviated from both Supreme Court and Patna High Court precedents by not honoring the full benefits of this scheme, thereby cutting their pay and implementing recoveries on already paid amounts. They also sought interest on delayed payments related to their insurance and dearness allowances.
Arguments Presented
The petitioners argued that non-teaching staff at the university had long been recognized as equivalent to State Secretariat employees. They contended that the university’s actions were unlawful and disregarded established pay scales and promotion rules. Citing the Supreme Court ruling in State of Bihar v. Sunny Prakash, they claimed that the university’s decision to cut ACP benefits contradicted previous court rulings and deprived them of their rightful entitlements.
Furthermore, the petitioners highlighted the procedural deficiencies in the university’s actions, noting that they were not given any formal notice or the opportunity to contest the recalculations of their pensions.
In defense, the State’s counsel argued that the petitioners had benefited from an outdated pay structure that allegedly exceeded their entitlements. They contended that the university acted correctly in revising pension amounts to align with current policies. The counsel also maintained that university employees were subject to unique statutes that differ from those governing State Government staff.
Court’s Reasoning
In his ruling, Justice Harish Kumar emphasized that the ACP scheme is designed to provide equitable benefits to employees facing limited promotional opportunities. Referring to the Sunny Prakash ruling, he affirmed that the petitioners were entitled to benefits equivalent to those received by State Government employees, stating, “Equity in service terms cannot be selectively withdrawn for university employees.”
The court found that the university’s decision to unilaterally reduce pensions without notice violated the principles of natural justice. The lack of notice or an opportunity for the petitioners to contest their entitlements represented a “manifest error undermining due process.” The court reiterated that any revisions to financial entitlements must adhere to procedural safeguards to avoid imposing arbitrary financial burdens on retirees.
Moreover, the court rejected the State’s argument that unique statutory provisions for universities justified the reductions. It stated that pay standards established by the State should apply uniformly across institutions.
Court Orders
The Patna High Court ordered L.N. Mithila University to immediately restore the original pension entitlements for the petitioners, including full ACP benefits due since their respective retirement dates. The court also directed the university to pay interest on any delayed insurance and dearness allowances, as established by previous judicial decisions.
This ruling reinforces the rights of retired employees, ensuring they receive fair and just treatment regarding their retirement benefits.
