I am sharing the details of Govt Petitions Regarding Pension dismissed by the Supreme Court of Pakistan (SCP). The Supreme Court of Pakistan upheld the FST Judgment thus dismissing the Government petition. The details are as under:

Govt Petitions Regarding Pension Dismissed by Supreme Court

1. Supreme Court [SC] of Pakistan dismissed on 5.8.2022 Constitutional Petitions for Leave to Appeal [CPLA] No.1243/2022 etc. submitted by the Government of Pakistan against the judgment orders dated 12.01.2022 of Federal Service Tribunal Islamabad in Appeal No.1327(R)/CS/2020 etc.  Copy of SC orders has been issued in Sep 2022, which is given at the end.

2. Pensioners who had retired before 2001 had appealed to the Federal Service Tribunal (FST) to direct the government to continue payment of pension increases on Gross Pension as per 1994 (pre-2001) pay scale orders. They held that the Government had illegally enforced upon them the 2001 scheme of pay scales and pension (which came into effect from 1 Dec 2001) denying an increase on surrendered/commuted part of pension, which was causing losses.  The Federal Service Tribunal held that the said pensioners had acquired the vested right of calculation of pension on the basis of 1994 pay scales; and directed the government for payment of pension dues on that very basis of gross pension.  The government then filed various CPLA against the FST orders.

SCP Hearing and FST Orders

3. Supreme Court heard the CPsLA on 5 Aug 2022 and upheld Federal Service Tribunal orders that pensioners had acquired a vested right to be treated under the same (pre-2001) rules as those under which they had qualified for a pension. The Supreme Court observed that the Tribunal is the highest forum for the purposes of determination of facts, and SC could take up the matter only if a substantial question of law of public importance is involved.  Since no such substantial question of law had been specified in the petitions, those were dismissed and leave was refused.

4. It will be recollected that increases in pension up to (and including) 1.7.1999 were given on the amount of (a) Gross Pension (before surrender/commutation) plus (b) all previous increases. This practice was discontinued from 1.12.2001, and instead increases in pension were allowed on (c) Net Pension (Gross pension less surrendered/commuted portion) plus (d) previous increases.  This practice was enforced through Para 16 (f) of Finance Division O.M. No. F.1 (5) Imp/2001 dated 4.9.2001 on those pensioners also who had retired in 1994 (and other pre-2001) pay scales and under corresponding pension rules/orders.  The said sub-para reads “In future the increase to the pensioners shall be allowed on Net Pension, instead of Gross Pension.”

Pre-2021 Pensioners

5. The pre-2001 pensioners held that they remained entitled to increases on Gross Pension plus previous increases. The change [from increases on Gross Pension to increases in Net Pension] is applicable to only those persons who:-

• either joined government service from 1.12.2001 onward; or
• opted for the 2001 pay scales cum pension scheme; or
• retired from 1.7.2001 onward but opted for the 2001 scheme.

6. The Finance Division did not accede to the repeated requests of pre-2001 pensioners to continue increases on Gross Pension plus previous increases. The aggrieved pensioners then appealed to the Federal Service Tribunal for suitable directions to the government.  FST accepted their appeals and directed the government to continue giving increases to the pre-2001 pensioners on Gross Pension.

7. Forcing the 2001 scheme on the pre-2001 pensioners led to the denial of increases from 1.12.2001 onward on the commuted part of pension till the date of restoration. Although the government subsequently allowed such increases on a Notional basis from the restoration date, the actual short payment of pension persisted from 1.12.2001 till the date of restoration.

8. A pensioner, Mr. X, explains how his pension was short-paid for the period from 1.12,2001 to 7.5.2012 due to wrongful calculation of increases on Net Pension (instead of on Gross Pension). He retired on 8.5.1997 with a gross pension of Rs.14,499 and had got 50% pension commuted which was restored on 8.5.2012. Table 1 below shows pension amounts payable if all the increases from 2001 to 2011 had been allowed on Gross Pension (both parts – Net as well as Commuted).

                                                            Table – 1

9. Due to illegal enforcement of the 2001 pay scales cum pension scheme on the 1994 and other pre-2001 pensioners, Mr. X was paid all increases from 2001 to 2011 on Net Pension only (denied / Not paid on the Commuted part of a pension). This led to a short payment of pension to Mr. X from 2001 to 2011, as detailed in Table 2 below.

                                                            Table – 2

10. The increase for 1999 in row 2 of the above table was given on Gross Pension (on both Net and Commuted parts). Increases totaling Rs.27,011.18 as per row 3 were given from 2001 onward also on Net Pension plus previous increases.  However, an increase of Rs.4,501,86 (as per row 3 only) was given on the 1999 increase of Rs.1,449.90 only.  It was not given on commuted Rs.7,249.50.  The short paid Rs.22,509.32 [27,011.18 less 4,501.86] on the commuted part was the cumulative effect of increases denied on the Commuted part, as follows:

11. Mr. X and several hundred equally placed pensioners now expect that increases on Commuted pension will be given actually (instead of on a notional/presumptive basis only) by the government.

12. Viewers are welcome to contact me on WhatsApp at 0300-9800246 and email [email protected] for their comments and questions. Agha Amir.