Source: Supreme Court 

Why in News?   

A bench of Justice Hrishikesh Roy and Justice Prashant Kumar Mishra held that pension is a right not a bounty.      

• The Supreme Court held this in the case of U.P. Roadways Retired Officials And Officers Association v. State of U.P. and Anr.  

What is the Background of U.P. Roadways Retired Officials And Officers Association v. State of U.P. and Anr. Case? 

• The Uttar Pradesh Roadways was created as a temporary department of the State Government for transport facilities. 
• On 28th September 1960 a Government Order was issued which provided pension to the permanent employees of the erstwhile Roadways. The remaining non- gazetted employees of the Roadways would be entitled to benefits under the Employee Provident Fund Scheme.  
• On 1st June 1972 the Corporation was created under Section 3 of the Road Transport Corporation Act, 1950. All the employees of railways were treated as on deputation with the Corporation by virtue of Government order dated 5th July 1972. 
• Article 350 of U.P. Civil Service Regulations was amended with retrospective effect. However, there was no amendment made in Note 3 of Article 350 which provided that non- gazetted post in Government Technical Industrial Institution is not qualified for pension.  

What were the Court’s Observations? 

• The Supreme Court held that pension is a right and not a bounty. 
• The Court held that it is a constitutional right for which an employee is entitled to on his superannuation. A pension can only be claimed when it is permissible under relevant rules or a scheme. 
• If an employee is covered under the Scheme of Provident Fund and is not holding a pensionable post, he cannot claim, nor can the writ Court issue mandamus directing the employer to provide pension to an employee who is not covered under the Rules.  
• Thus, the Court refused to grant pension in this case. 

What is Article 350 of U.P. Civil Service Regulations? 

• Article 350 provides that all establishments, whether temporary or permanent, shall be deemed to be pensionable establishments. 
• Provided that it is open to the State Government to rule that the service in any establishment does not qualify for pension. 
• Note 3 provides that service in non-gazetted posts in Government Technical and industrial institutions in the Uttar Pradesh does not qualify in the case of persons appointed to such posts on or after November 16, 1938. 

What are the Constitutional Provisions Regarding Pension in India? 

• The Bombay High Court in the case of Shri Naini Gopal S/O Dhirendra Mohan Roy v. Union of India (2020) held that pension is payable to retired employees is a ‘property’ under Article 300 A of the Constitution. 
• Further, Article 41 of the Constitution puts responsibility on the government to arrange public assistance in case of old age, sickness, disablement, etc. 
• Article 46 of the Constitution requires the Government to take special care in promoting the economic interests of weaker sections of the people.  

What are the Legal Provisions and Schemes Governing Pension in India? 

• Post independence several provident fund schemes were set up to extend coverage of pension scheme in private sector. These include: 
  • Civil Service Schemes 
  • Employee’s Provident Fund Organization Schemes 
  • Occupational Pension Schemes 
  • Public Provident Funds 
  • National Old Age Pension Scheme 
  • National Pension Scheme 
• Pension Fund Regulatory and Development Authority (PFRDA) is a statutory body established by an enactment of Parliament, for the purpose of regulating, promoting and ensuring orderly growth of the National Pension System (NPS). 
• There are two schemes regulated by PFRDA: 
  • National Pension System 
  • Atal Pension Yojana 

What is the Right to Receive Pension? 

• Deoki Nandan Prasad v. State of Bihar (1971) 
  • Pension is a right and the payment of it does not depend on the discretion of the Government and would be governed by the rules. 
  • It was held that a Government servant falling within those rules was entitled to claim pension. 
  • It was also held that the grant of pension did not depend upon anyone's discretion. 
  • The Supreme Court further held that the pension is neither a bounty nor a matter of grace depending on the sweet will of the employer. 
  • It was held that it was a social welfare measure rendering socio-economic justice to those who in the hey-day of their life ceaselessly toiled for the employer for an assurance that in their old age they would not be left in lurch.  
  • It was held that it was not an incentive but a reward for past service. 
• State of Jharkhand and Ors v. Jitendra Kumar Srivastava & Anr. (2013) 
  • The Court in this case held that the right to property is not a fundamental right but it is a constitutional right. 
  • The right to receive pension has been recognized as a right to property. 
  • A person cannot be denied his right to pension without the authority of law which is a constitutional mandate enshrined in Article 300 A of the Constitution.  
• R. Sundaram v. The Tamil Nadu State Level Scrutiny Committee and Ors. (2023) 
  • The Court held in this case that right to pensionary benefit is a constitutional right and as such cannot be taken away without proper justification. 
• Dr. Uma Agarwal v. State of U.P. (1999) 
  • The Court held that grant of pensionary benefits is not a bounty but a right of employee and as such cannot be denied without proper justification.