PENSION COMMUTATION

Two other important decisions relating to pensions were later secured by COMMON CAUSE from the Supreme Court. One related to pension commutation, and the other to family pensions. These too have benefited hundreds of thousands of persons all over the country and it is worthwhile stating basic facts relating to them. When a person retires from government service he is entitled to seek the benefit of commutation of a portion of his pension, thereby taking payment of a lumpsum amount, equivalent generally to about ten years' calculation of the commuted portion of the pension, based on actuarial calculation factor according to age of the pensioner. The pension correspondingly gets reduced by the commuted portion. The commutation rules, in operation for many decades, had decreed that pension will remain cut by the same commuted portion throughout life of the pensioner. This was felt to be grossly unfair for the pensioners who lived long. We sent out letters-to-the-editors and asked for information through newspapers from pensioners of long life to communicate information about the amounts received on commutation and the amounts that had got deducted out of their pensions in the long years. We got replies from a large number of very old pensioners. A retired Post Master of 94 years wrote to say that he had received the amount of Rs. 3600 on commutation of one-third of his meagre pension of Rs. 90 and the government had taken away from him over Rs. 14,000 during the years since his retirement at the age of 55 years. Many other similar hard cases were placed before the Supreme Court, praying that the operation of these rules led only to "unjust enrichment" of the government and the rules are of arbitrary nature, violative of the fundamental rights. The court eventually gave decision in favour of the pensioners, laying down that full pension in each case should be restored after fifteen years from the date of retirement; this was subsequently altered to fifteen years from the date of commutation because in some cases commutation takes place considerable time after retirement. The period of fifteen years was determined taking into account the fact that the commutation factor in the case of defence personnel superannuating at younger ages. This decision forthwith restored full pension to hundreds of thousands of central government civil and defence pensioners who had already completed 15 years; and it started being applied also to the pensioners of state governments and institutions etc. This case is cited as COMMON CAUSE vs Union of India based on writ petition no. 3959-61 of 1983; its judgement is quoted as AIR 1987 SC 210.(W.P. No. 3959-61 of 1983)