Madhu Deshta vs The State Of HP & Ors.

Sequel to the orders passed by this Court on 03.07.2025, Learned Counsel(s) for the respective parties jointly represent that since the issue involved in all these connected cases is pari-materia therefore, CWP No 8504 of 2025, Madhu Deshta versus State of Himachal Pradesh and others, may be treated as the ‘Lead Case’. As agreed, this Court proceeds to adjudicate the ‘Lead Case’ and other connected CWP’s/CWPOA’s/ LPA’s and CMP(M)’s in LPA’s by a common judgment.

Case, as set up, by Learned Counsel is that petitioner joined as Lecturer in Political Science in the School Cadre, in Directorate of School Education, under the Respondent/State on regular basis and she superannuated from service on attaining the age of 58 years on 31.01.2021. On her superannuation, she was granted retiral benefits i.e. Pension and Gratuity etc., at the unrevised rates in accordance with the Central Civil Services [Pension] Rules 1972 and Leave Encashment under the Central Civil Services [Leave] Rules 1972 and Commuted Pension under the Central Civil Services [Commutation of Pension] Rules, 1981, as applicable to the petitioner and other employees of the State Government, including the employees of various Boards, Corporations and Public Sector Undertakings owned and controlled by the State Government.

3(i). It is averred that the State Government notified the Himachal Pradesh Civil Services [Revised] Pay Rules 2022 [hereinafter referred to as ‘Revised Pay Rules 2022’] on 03.01.2022 [Annexure P-3] deciding to give the benefit of the Revised Pay Scale/ Pay Structure to its employees w.e.f. 01.01.2016. It is averred that on the basis of the Revised Pay Rules 2022, the petitioner, who stood retired from service on 31.01.2021 was deemed to have been covered under Revised Pay Rules 2022 [Annexure P-3] was entitled to be re-fixed in applicable revised Pay Structure and was to be given the arrears of Pay and Allowances for the period from 01.01.2016 till superannuation on 31.01.2021 but, State Authorities invoked provision of Rule 13 of the said Rules, by deciding to give the Revised Pay Arrears in such manner and at such time as may be approved by the Government and based on Rule 13, the State Government issued an Office Memorandum on 17.09.2022 [Annexure P-5], releasing revised pay arrears in a staggered form, by ordering the release of a meagre amount of Rs 50,000-60,000/- whereas, the petitioner was entitled to much higher amount of arrears under the Revised Rules during this period from 01.01.2016 till her superannuation on 31.01.2021.

3(ii). It is averred that after the issuance of the Revised Pay Rules on 03.01.2022 [Annexure P-3], the State Government issued another Office Memorandum dated 25.02.2022 [Annexure P-4], deciding to give the Revised Retiral benefits i.e. Revised Pension, Revised Gratuity, Revised Commuted Pension and Revised Family Pension [in case of death of employee] to its employees but while issuing this Office Memorandum on 25.02.2022 [Annexure P-4] the State Authorities inserted Para 10 in the said Office Memorandum, that the arrears of revised retiral benefits i.e. Revised Pension/Gratuity/Commuted Pension/Family Pension for the period from 01.01.2016 to 31.12.2021 shall be paid in such a manner as may be decided by the State Government in future. It is averred that after the issuance of the Office Memorandum dated 25.02.2022 [Annexure P-4], the State Authorities issued a communication on 17.09.2022 [Annexure P-6], releasing 20% of the arrear of Revised Pension/ Family Pension and Revised Gratuity to the retirees alike the petitioner. It is averred that on 13.03.2024 [Annexure P-7], the State Authorities issued another Office Memorandum, releasing part arrears of Revised Pension/Family Pension between 15% to 35% based on age criteria of the retirees. It is further averred that on 19.10.2024 [Annexure P-2], the State Authorities have issued another Office Memorandum, whereby, the retirees who had crossed the age of 75 years and above were released 100% arrears of Revised Pension /Family Pension, whereas, the petitioner was singled out, ignoring that all employees who retired from service on or after 01.01.2016 constituted one Homogeneous Class and the State Authorities cannot adopt a pick and choose method while releasing the revised retiral benefits in a staggered form, at its whims, by carving out an artificial discrimination amongst one homogenous class of retirees was discriminatory, illegal, arbitrary and unconstitutional.

3(iii). In above backdrop, it was averred that the action of the State Authorities in not releasing the revised pay arrears in lump sum but in withholding this benefit at the mercy of the State Authorities and in releasing the same in a staggered or deferred or in a piece meal manner by invoking Rule 13 of the Revised Pay Rules dated 03.01.2022 [Annexure P-3] and likewise, the action of the State Authorities in not releasing the benefits of revised retiral benefits in lump sum in terms of the Statutory Rules but in withholding the revised retiral benefits i.e. Revised Pension, Revised Gratuity, Revised Leave Encashment and the Revised Family Pension [wherever applicable] but in releasing the same in a staggered or deferred or in a piece meal manner by invoking Para 10 of the Office Memorandum dated 25.02.2022 [Annexure P-4] at the mercy of the State Authorities was illegal. It was averred that denial of rightful dues by way of an executive order by issuing an Office Memorandum on 17.09.2022 [Annexure P-6] and similar communications on 13.03.2024 and 19.10.2024 [Annexure P-7 and Annexure P-2 [releasing arrears of revised retiral benefits in a piecemeal manner or in a staggered-deferred form] was alleged to be violative of Article 300-A of the Constitution of India and the State action was unfair, unjust, illegal, arbitrary and unconstitutional.

In this backdrop, it was prayed that the offending Rule/Office Memorandum i.e. Rule 13 of the HPCS Revised Pay Rules of 2022 notified on 03.01.2022 [Annexure P-3] and Para 10 of the Office Memorandum dated 25.02.2022 [Annexure P-4] may be quashed and set-aside with the prayer to quash and set-aside the resultant OM’s or Communications releasing the benefits in a piece-meal manner with the prayer to release the arrears of revised pay from 01.01.2016 till her superannuation on 31.01.2021 and thereafter to release the arrears of revised retiral benefits from the date of her superannuation from 01.02.2021, which became due and payable after the issuance of the Revised Pay Rules on 03.01.2022 [Annexure P-3] and issuance of the Office Memorandum on 25.02.2022 [Annexure P-4], and to release all these benefits in lump-sum, alongwith interest @ 9% per annum till the date of actual release of benefits; and the action of the State Authorities in releasing these benefits in staggered or deferred form or in a piecemeal manner being contrary to the Statutory Rules may be declared unreasonable, illegal, arbitrary, discriminatory and unconstitutional.

Pursuant to the issuance of notice by this Court on 22.05.2025, the State Authorities have filed Reply-Affidavit dated 17.06.2025 of Special Secretary [Finance], Government of Himachal Pradesh.

4(i). Reply-Affidavit indicates that the employees who retired from service between 01.01.2016 to 31.01.2022 were released the pay and retiral benefits like Pension, Gratuity, Commuted Pension and Family Pension [wherever applicable] in accordance with the Revised Pay Rules 2009 as applicable in case of the petitioner.

4(ii). Reply-Affidavit indicates that on 03.01.2022 [Annexure P-3] the State Authorities notified the Himachal Pradesh Civil Services [Revised] Pay Rules under the proviso to Article 309 of the Constitution of India and these Rules deemed to have come into effect w.e.f. 01.01.2016. Reply-Affidavit indicates that after the issuance of Revised Pay Rules dated 03.01.2022, the State Authorities issued an Office Memorandum on 25.02.2022 [Annexure P-4], notifying amendments to the Central Civil Services [Pension] Rules, 1972. Reply-Affidavit indicates that despite the adverse financial constraint, the State Government has decided to revise the Pay Scales/Pension etc. from retrospective effect w.e.f. 01.01.2016 in the interests of Government Employees/ Pensioners.

4(iii). Para 7 of Reply-Affidavit indicates that as per Rule 13 of Revised Pay Rules dated 03.01.2022 [Annexure P-3], it was decided that arrears to the retired employees for the period from 01.01.2016 to 31.01.2022 shall be paid in such a manner and in such a time as may be approved by the State Government. Reply-Affidavit further indicates that so far as the revised retiral benefits, like Revised Pension, Gratuity, Commuted Pension and Family Pension [wherever applicable] are concerned, the State Authorities issued an Office Memorandum on 25.02.2022 [Annexure P-4] and Para 10 of said Memorandum provided that arrears, on account of revised retiral benefits for the period from 01.01.2016 to 31.12.2021 shall be paid in such a manner as may be decided by the Government in future. Based on this, Reply-Affidavit indicates that in terms of the Office Memorandums, the arrears of revised pay and the arrears of revised retiral benefits were released in instalments as per the Communications issued on 17.09.2022; 28.08.2024 and 19.10.2024.

4(iv). In Para 12 to 14 of Reply-Affidavit, State Authorities have placed reliance on the judgments passed by the Hon’ble Supreme Court in Civil Appeal No.7427 of 2011, titled as Punjab State Co-operative Milk Producers Federation Ltd. and another versus Balbir Kumar Walia and others; Civil Appeal No. 5114 of 2022, titled as The State of Tripura and others versus Smt. Anjana; State of Punjab and others versus Amar Nath Goyal and others, (2005) 6 SCC 754; State of Bihar and others versus Bihar Pensioners Samaj, (2006) 5 SCC 65; to assert that financial stringency is a valid ground for denying arrears and grant of higher pay and based on financial liability, the State has right to prescribe or fix the cut-off date for the purposes of releasing the Revised Pension to its employees. Based on aforesaid judgments it was averred that the financial crunch/ financial constrains is a valid factor and therefore, Rule 13 in the Revised Pay Rules dated 03.01.2022 [Annexure P-3] and Para 10 in Office Memorandum dated 25.02.2022 [Annexure P-4] was included by the State Authorities. Reply-Affidavit indicates that the employees who have retired between from 01.01.2016 to 31.12.2021 form Homogeneous Class and entire arrears cannot be released to the petitioners, ignoring other employees.

4(v). Reply-Affidavit further indicates in Para 12 (A) and 15 (A) to (D) that there is no specific provision under the Himachal Pradesh Civil Services [Revised] Pay Rules dated 03.01.2022 [Annexure P-3] or the Central Civil Services [Pension] Rules, 1972; the Central Civil Services [Leave] Rules, 1972; and the Central Civil Services Commutation of Pension Rules 1981 to allow interest on Gratuity, Arrears of Pay, Pension, Leave Encashment and Commutation and in absence of any specific provision for interest in the Rules, the claim of the petitioners for interest on delayed payments was denied by the Respondents.

4(vi). Reply-Affidavit further indicates that the State Government was committed to release arrears of Revised Pay and Arrears of Revised Retiral Benefits to the retirees, including the petitioners, who had retired between 01.01.2016 to 31.12.2021 and therefore, it was prayed that the writ petition may kindly be dismissed.

In Rejoinder, petitioner stated that Rule 13 of Revised Pay Rules dated 03.01.2022 [Annexure P-3] giving unbridled, unfettered and unrestricted discretion to the State to release the arrears of Revised Pay “in such a manner and at such a time”, as may be approved by the Government, was highly arbitrary, illegal and unconstitutional as the salary earned becomes the lawful entitlements and such an accrued benefit being the property under Article 300-A of the Constitution of India could not be withheld, staggered, deferred or released in piecemeal manner at the whims and discretion of the State Authorities indefinitely and that too without there being any law; merely on the basis of the Revised Pay Rules dated 03.01.2022 [Annexure P-3], cannot sustain.

5(i). Rejoinder further mentioned that the action of the State Authorities in incorporating Para 10 in Office Memorandum dated 25.05.2022 [Annexure P-4] decided to release the revised retiral benefits “in such manner as may be decided by the Government in future” amounted to carving out inter-se discrimination within the retirees who have attained the age of 70 years and above have been released the entire Revised Pension/Gratuity by the Respondents. It was further averred that the OM being a mere executive order cannot be made the basis for deferring the retiral benefits which had accrued under the Central Civil Services [Pension] Rules [in case of Pension and Gratuity] and Revised Leave Encashment under the Central Civil Services [Leave] Rules and Commuted Pension under the Central Civil Services [Commutation of Pension] Rules, upon the issuance of the Revised Pay Rules on 03.01.2022 [Annexure P-3] and Office Memorandum dated 25.02.2022 [Annexure P-4] to the petitioner and other like employees.

5(ii). The judgments mentioned in Para 12 and 14 of Reply-Affidavit were held to be not applicable, in fact-situation of instant case.

In this backdrop, averments and the claim spelt out in the writ petition was reiterated with the prayer for quashing the Impugned Rules/Orders and to direct the release retiral benefits in lump-sum alongwith interest.

State Authorities filed an Affidavit dated 14.10.2025, indicating that after the issuance of the Revised Pay Rules on 03.01.2022 [Annexure P-3] giving the revised pay scales w.e.f. 01.01.2016 and after the issuance of an Office Memorandum on 25.02.2022 [Annexure P-4] giving the revised retiral benefits w.e.f. 01.01.2016, an estimated arrears of Rs 16600/- Crores shall accrue, out of which, the State Government had already released/adjusted the arrears of Rs 8045/-Crores by disbursing the benefits to the retirees alike the petitioner, though in a deferred form. Affidavit further indicates that the balance arrears of Rs 8555/- Crores are required for meeting out the liability towards the arrears of revised pay and arrears of revised retiral benefits. Para 7 and 10 of the affidavit indicates that as per 15^th Finance Commission during the award period from 2021-22 to 2025-26, the State had received a total Revenue Deficit Grant [RDG] of Rs 37,199/- Crores and the State Government awaits the release of similar Revenue Deficit Grant from the 16^th Finance Commission w.e.f. 01.04.2026 onwards.

6(i). State Authorities through Principal Secretary Finance filed another Affidavit dated 28.02.2026, with the averments in Para 6 and 7 that 16^th Finance Commission has not recommended Revenue Deficit Grant [RDG] to the States, so that the States increase their revenue and rationalize their expenditure. It is averred that due to the non-recommendation of the Revenue Deficit Grant an adverse financial impact has been caused to the Respondent-State. Affidavit states that despite non-recommendation of Revenue Deficit Grant, the State Authorities have released arrears of Revised Pension to the retirees who are above 70 years of age on 27.01.2026 [Annexure R-1/I] and Class-IV who had retired/died during 01.01.2016 to 31.01.2022 have been released additional 50% Gratuity and 70% Leave Encashment Arrears besides releasing the Medical Reimbursement Claims of the employees-retirees.

6(ii). Principal Secretary [Finance] filed another Affidavit dated 15.05.2026, with the stand that 16^th Finance Commission has neither recommended any Revenue Deficit Grant for State of Himachal Pradesh for the period from 2026-2031 nor any Special Grant has been released to the State in lieu thereof. Affidavit further indicates in Para 6 that the Salaries, Pension and Gratuity attribute to about 78% of Budget besides other expenditures and on interest payments, repayment of loan, grant-in-aid etc., and 20% of budget is available for other developmental works for the year 2026-27. Para 7 of this Affidavit indicates that deferral of arrears is not selective or wilful but is a consequence of uniform fiscal austerity due to the discontinuation of the Revenue Deficit Grant. Para-9 of this Affidavit indicates that as per Office Memorandum dated 25.04.2026 [Annexure R-I/III Colly], entire benefits have been released to Class-IV employees who retired from service between 01.01.2016 and 31.01.2022. Affidavit indicates that State Government had been releasing arrears in a phased and prioritized manner giving precedence to age and vulnerability. Affidavit further indicates that constraints is entirely one of resources and therefore, the State Government has taken several measures for generating and improving its resources as detailed in Para 13 of this Affidavit.

6(iii). Besides the State, there are numerous Boards, PSUs or Corporations which are owned and controlled by the State. After issuance of Revised Pay Rules dated 03.01.2026 [Annexure P-3] and the Office Memorandum dated 25.02.2022 [Annexure P-4], almost majority of the Boards/Corporations and PSUs have by and large, in principle have adopted, followed and decided to give arrears of the Revised Pay to its employees between the period from 01.01.2016 to 31.12.2021 and based on revised emoluments, these Boards/Corporations have decided to give the Revised Retiral Benefits to employees who had retired from service on or after 01.01.2016 till 31.01.2022. Learned Counsel for the Respondent Boards/Corporations in present batch of cases, do not dispute these facts. Even Learned Counsel(s) for Respondent Board {HPSEBL} have furnished Instructions to this effect, which form part of the orders passed by this Court from time to time.

Heard, Mr. Prem P. Chauhan Learned Counsel in Lead Case and Mr. Sanjeev Bhushan, Senior Advocate with Mr. Rajesh Kumar Advocate, Mr. Onkar Jairath Senior Counsel with Mr. Anshul Jairath Mr. K.C. Chauhan, Mr. Manohar Lal Sharma, Mr. Rakesh Kumar Dogra, Mr. Bhupinder Kumar, Mr. Shiv Pal Manhans, Mr. Prashant Manhans, Mr. Rajesh Kumar, Mr. Sunny Dhatwalia, Mr. Ashok Chaudhary, Mr. Vikas Rathore, Mr. Yogesh Kumar Chandel, Mr. Mandeep Chandel, Mr. Kulbhushan Khajuria, Mr. Parkash Sharma, Mr. Mohan Singh, Advocate vice Mr. Sanjay Kumar Sharma, Mr. Shubham Sood, Mr. Mohit Thakur, Mr. Ashish Verma, Mr. Raj Kumar, Mr. Ashwani K. Sharma, Mr. Sanjay Bhardwaj, Mr. Atharv Sharma, Mr. Ashwani Chawla, Mr. Ramesh Kumar Kaundal, Mr. Pranav Kaushal and Mr. Sameer Miyan, Advocate, vice Mr. M.A. Safee, Mr. Sumit Sharma, Mr. Gopal Singh, Mr. Ashok Kumar, Mr. K.C. Sankhyan, Mr. S.P. Chatterjee, Mr. Shourya Sharma, Ms. Minakshi Sharma, Ms. Monika Sharma, Advocate vice Mr. Adarsh K. Vashista, Mr. Topender Kumar Verma, Mr. Aditya Kaushal, Mr. Sarthak Mehta, Mr. Narender Sharma, Ms. Shikha Chauhan, Mr. Vivek Thakur & Mr. Vijay Mokta Advocates vice Mr. Vijay Chaudhary, Mr. C.N. Singh, Mr. Anshul Gandhi & Dr. Nidhi Singh, Advocates, Mr. Sandeep K. Pandey, Ms. Babita Chauhan, Advocate vice Mr. A.K. Gupta, Mr. H.S. Rangra, Mr. Bhim Raj Sharma, Mr. H.R. Bhardwaj, Mr. Tarun Sharma, Ms. Sakshi Bhardwaj, Advocate vice Mr. Ajay Kumar Dhiman, Ms. Neha Negi and Ms. Sakshi Bhandari, Advocates, Mr. Tek Chand Sharma, Mr. Vishwa Bhushan, Mr. Chitranjan Kumar Sharma, Mr. B. Nandan Vasishta & Mr. S.S. Sood, Mr. Karan Singh Parmar, Ms. Rashmi Parmar, Mr. Piyush Dhanotia, Mr. Vaibhav Tanwar, Mr. Ajay Thakur, Mr. Devender K. Sharma, Mr. S.D. Gill, Mr. Adarsh K. Sharma, Mr. Vinod Chauhan, Mr. Aanchal Singh Mr. Ajeet Singh Saklani, Mr. Ajay Chauhan, Mr. Praveen Thakur, Mr. Kuldeep Chand, Mr. Amrick Singh, Mr. Gaurav Sharma, Mr. Surinder Saklani, Ms. Archna Dutt, Mr. Nishant Khidtta, Advocate vice Mr. V.D. Khidtta, Mr. Hemant Kumar Thakur, Mr. Aditya Chauhan, Mr. Mohit Dogra, Mr. Vinod Thakur, Mr. Chaman Lal, Mr. Rajat Thakur, Ms. Kamlesh Shandil, Advocate, Ms. Samridhi Rathour, Advocate vice Mr. Naresh K. Verma, Advocate, Mr. Bharat Bhushan, Mr. Gaurav Singh Damseth, Mr. Jagat Pal, Ms. Anita Devi, Advocates, for the petitioner(s)/applicant(s), in respective matters and Mr. Anup Rattan, Learned Advocate General with Mr. Ramakant Sharma, Additional Advocate General, Ms. Swati Draik, Deputy Advocate General and Mr. Shalabh Thakur, Assistant Advocate General, for respondents-State in respective petitions; and Mr. Kunal Mehta, Advocate, for respondents No.2 and 3 in CWPs No.11085 & 11086/2024; Mr. Ashok Kumar Tyagi, Advocate, for the respondent, in CWP No.1978 of 2024; Mr. Abhishek Nagta, Advocate, for respondents No.2 and 3 in CWP Nos. 11085 & 11086 of 2025; Dr. Lalit K. Sharma, Advocate, for respondent in CWP No.12067 of 2024; Mr. Abhishek Dulta, Advocate, for respondent No.3 in CWP No. 14210 of 2024; Mr. Himender Singh Chandel, Advocate for respondent-HPPCL; Ms. Shivani Gangotra, Advocate, vice Mr. Vikrant Thakur, Advocate, for respondent No.5-HPPSC in CWP Nos.176 of 2024 and 7376 of 2023; Ms. Shrutika Chauhan; Mr. Raman Jamalta; Mr. Vinod Kumar Gupta; Mr. Virender Singh Kanwar, Advocate; Mr. Deepak Sharma; and Ms. Shubh Mahajan, Advocates, for respondent-HRTC in respective petitions; Mr. Ravinder Thakur, Advocate, for the respondent-HPSEBL, in respective petitions; Mr. Uday Singh Banyal, Advocate for the respondent-Vidhan Sabha; Mr. Devender K. Sharma, Advocate, for the respondent-University; Mr. Shivank Singh Panta and Ms. Maheshwari Sharma, Advocates, for the HPTDC, in respective petitions; Mr. Devender Sharma, Advocate, for respondents No.2 and 3 in CWP No.8501 of 2023; Mr. Virender Singh Rathore, Advocate; for the respondent in CWP No. 6249 of 2024; Mr. Shashi Bhushan Singh, Advocate, for respondent in LPA No. 557 of 2025; Mr. Tara Chand Chauhan, Mr. Dikken Kumar Thakur; Mr. Rangil Singh; Mr. Abhishek Sharma; Mr. Rajesh Kosh; Ms.

Before proceeding to analyze the rival claims and contentions, it is necessary to have a recap of the Himachal Pradesh Civil Services [Revised Pay] Rules dated 03.01.2022 [Annexure P-3] giving revised pay scales/structure to its employees w.e.f. 01.01.2016 as under:

8(i). After the issuance of Revised Pay Rules on 03.01.2022 Annexure P-3], the State Government issued an Office Memorandum on 25.2.2022 [Annexure P-4] giving the Revised retiral benefits i.e. Revised Pension, Revised Gratuity, Revised Commutation of Pension and Revised Family Pension to Government Servants who retire or die in service in harness on or after age 01.01.2016. In terms of this OM, the claim of these retirees for Revised Pension is to be regulated in terms of Para 5 and claim for Revised Retirement / Death Gratuity/Death Gratuity is to be regulated in terms of Para 6 and the claim for Revised Family Pension is to be regulated in terms of Para 7 and the claim for Revised Commutation of Pension is to be governed by Para 8 of this OM. The operative part of the Office Memorandum dated 25.02.2022 [Annexure P-4] reads as under:

Now this Court proceeds to analyze the contentions of the Learned Counsels for the respective parties hereinbelow.

First contention of Learned Counsel for the petitioner is that Rule 13 of the Himachal Pradesh Civil Services [Revised] Pay Rules dated 03.01.2022 [Annexure P-3], which confers unguided and unfettered discretion on the State Authorities to release arrears of salary which had accrued on account of the Revised Pay from 01.01.2016 till her superannuation on 31.01.2021 [in Lead case and in other cases till 31.12.2021] but the action of the State Authorities in withholding and deferring the release for about four and a half years (4½ years) now and in releasing the arrears of salary in a piecemeal and staggered manner is illegal and unconstitutional.

The above contention has force, for the reason, that once the State Authorities has taken a conscious decision and notified the Himachal Pradesh Civil Services [Revised Pay] Rules on 03.01.2022 [Annexure P-3], giving the arrears of salary accruing on account of revised pay scales to all the persons appointed on regular basis to posts and services w.e.f. 01.01.2016 then, the State Authorities cannot escape its liability for releasing the arrears of salary which had accrued in favour of the petitioners and others similar employees by virtue of the aforesaid Rules; and the action of the State Authorities in incorporating Rule 13 in the Rules that the arrears of revised salary from 01.01.2016 to 31.12.2021 shall be paid in “such manner” and “at such time” as may be “approved by the Government”, cannot stand the test of judicial scrutiny for the reason, firstly, the expressions “in such manner” and “at such time” as “as may be approved by the Government” contained in Rule 13 of the Rules confer unbridled, unrestricted, unfettered, uncanalised and unguided discretion on the State Authorities to release the arrears of revised salary is unreasonable and arbitrary; and secondly, the provision of Rule 13 which makes the actual release of arrears of revised salary wholly at the whims and mercy and unfettered discretion of the State Authorities but without there being any guidelines for exercise of such discretion by State Authorities is unreasonable and arbitrary; and thirdly, the provision of Rule 13 enabling the State to release the arrears of revised salary at the discretion of the State Authorities but by giving a complete go-bye to the principles of fairness, non-arbitrariness and credibility and action of the State Authorities in embedding uncertainty in releasing earned/accrued salary at revised rates at its whims and discretion, but without spelling out the circumstances or eventualities or situations in clear and precise guidelines, where the aforesaid Rule was to be invoked; and in the absence of any guidelines, the fundamental and constitutional right to life, liberty and property cannot be permitted to be consigned to the limo of undefined premises and uncertain applications; and fourthly, the unfettered discretion vested in the State Authorities by virtue of Rule 13 cannot operate against the Rule of law embedded in Article 14 of the Constitution of India so as to divest the petitioner of legal entitlement of salary, indefinitely for almost four and a half years {4½ years now} when, the earned/accrued salary is a property, within the meaning of Article 300-A of the Constitution of India; and fifthly, once the State Authorities have not enacted any law, which permits the State Authorities to divest an employee of the earned and accrued salary, (property) in case of financial constraints, and therefore, in absence of any law, the action of State Authorities in depriving the petitioner of earned/accrued salary by invoking Rule 13 cannot sustain; and sixthly, even Rule 13 is not a substitute for an enacted law, qua the situation contemplated under Article 300-A of the Constitution of India; and seventhly, even otherwise, the provision of Rule 13 is an exploitative and unconscionable provision inserted by State Authorities due to the inequality of bargaining power of the petitioner and other similar incumbents; and eighthly, aforesaid Rule defeats the foundational concept of fair play in State Action by depriving the petitioner of the means of livelihood, violating the core object of social and economic justice embedded in Article 14 of the Constitution of India; and ninthly, the plea of the State Authorities, that the State has a discretion to release arrears of revised pay by fixing cut-off date for releasing arrears, cannot sustain, when, the State Authorities, by a conscious decision notified the HPCS Revised Pay Rules on 03.01.2022 [Annexure P-3] deciding to prescribe the cut-off date as 01.01.2016 for giving salary at revised rates then, the action of the State Authorities in carving out an artificial distinction at its whims and fancies for releasing the arrears of earned salary by treating it as a bounty, payable at the sweet will of the State Authorities is unreasonable, arbitrary and contrary to the State being a model employer; and tenthly, after the issuance of the Revised Pay Rules on 03.01.2022 [Annexure P-3] the petitioner and other similar incumbents were bound to exercise an option for fixation of pay in revised pay scale within one month from the date of issuance of these Rules i.e. before 28.02.2022 under Rule 6 and after taking into account processing time of three months upto 31.05.2022 “hereinafter referred to as the gestation period”, which may normally be required by respective Head of Institution /Drawing and Disbursing Officer and Treasury etc., and therefore, the arrears of revised salary became due and payable to the petitioner and other similarly placed incumbents w.e.f. 01.06.2022.

Based on this, once the arrears of revised salary became due and payable w.e.f. 01.06.2022 but the action of the State Authorities in withholding or in prolonging or deferring or in staggering or in releasing the revised pay arrears in a piece-meal manner by invoking its unfettered, unbridled, uncanalised, unrestricted and unguided discretion under Rule 13 has resulted in grave and undesirable consequences. Absence of an defined and certain application of this Rule and even the absence of clear and precise guidelines, spelling out the eventualities or situations or circumstances or occasion as to when and at what time the arrears of revised pay could be withheld or delayed or could be released in a staggered, deferred or in a piece meal manner and therefore, the action of the State Authorities amounts to withholding or delaying the “actual release of the earned and accrued right to salary at the revised rates” by virtue of Revised Pay Rules dated 03.01.2022 [Annexure P-3] and when, the “payability of entire arrears of revised pay became due w.e.f 01.06.2022” to petitioner and other similar incumbents. Moreover, nothing has been placed on record to establish that the State Authorities had any enacted law spelling out the eventualities or situations or circumstances or occasion for either withholding or delaying or in releasing the entire accrued arrears in a staggered or in a piece-meal manner and in the absence of any enacted law, the petitioner and other similar incumbents could not be deprived of her property i.e. earned salary including arrears by invoking the unbridled unfettered and unguided discretion so as to render the rights and benefits accruing under the Rules as redundant, otiose and nugatory. Further Rule 13 of the Rules cannot be made the basis for not releasing the entire arrears of earned/accrued salary at the revised rates, from the date of its payability w.e.f. 01.06.2022 for almost 4½ years till day is highly oppressive, unreasonable, capricious, arbitrary. Even, the mischief contained in aforesaid Rule, leaving the petitioner and other incumbents at the mercy of the State Authorities for receiving their legal entitlements needs to be eliminated so that the petitioner and other similar incumbents are not deprived of their earned and accrued benefits of revised pay arrears and are not kept waiting for their earned benefits indefinitely, and that too at the whims and fancies of State Authorities, due to the unfettered, unbridled, uncanalised and unguided discretion conferred on the State Authorities/ Government. Petitioners having rendered service and having earned the revised pay cannot left at the mercy of the Authorities for seeking release of their legal entitlements. The salary earned by the petitioner and other incumbents under the Revised Rules of 2022 w.e.f. 01.01.2016 is “neither a bounty nor a charity but salary earned is a legal entitlement” and its payability and release cannot contingent upon the absolute and unfettered discretion of the State Authorities. The fundamental and constitutional right to life, liberty and property [including the entire arrears of salary earned] cannot be permitted to be consigned to the limo of undefined premises and uncertain applications. Petitioner and other similar incumbents cannot be made to go with a begging bowl or to await the issuance of orders for release of the earned/accrued benefits at the mercy and discretion of the State Authorities [which in instant case has been delayed for 4 ½ years now] and that too by releasing the meagre amount in a staggered or in a piece-meal manner.

In these circumstances, in order to give effect to the Object and Scheme of the of the HPCS Revised Pay Rules dated 03.01.2022 [Annexure P-1], mischievous provision i.e. Rule 13 of the aforesaid Rules, is read down and is declared inoperative, so as to remedy the injustice caused to the petitioner and other similar incumbents. Resultantly, the petitioner and other similar incumbents are held entitled for release of “entire arrears of salary of revised pay” for the period from 01.01.2016 till her superannuation on 31.01.2021 [in Lead Case of Madhu Deshta and likewise in other cases], despite the fact that “payability of entire arrears-benefits became due w.e.f. 01.06.2022”. Even, the action of the State Authorities in releasing a meagre amount(s) in a staggered or in a piece-meal manner but in still not releasing entire amount of arrears of earned salary for more than 4 ½ years and therefore, the State Authorities cannot be permitted to perpetuate the injustice to the petitioner and to other similar incumbents anymore hereinafter. Ordered accordingly.

Second contention of Learned Counsel for the petitioner is that after the issuance of Revised Pay Rules on 03.01.2022 [Annexure P-3] once salary-revised pay arrears became due and payable but since State Authorities did not release entire arrears for more than 4½ years now, and therefore, the petitioner may be held entitled for interest on such deferred release.

The above plea has force, for the reason, that once monetary entitlement of revised salary and its entire arrears has accrued in favour of petitioner on issuance of the 03.01.2022 [Annexure P-3] but its payability had crystallized w.e.f. 01.06.2022 but payment of such monetary entitlement was withheld beyond the time and an employee was deprived of the right to use the said amount-lawful entitlement, then, deprivation of use of monetary lawful entitlement, entitles the petitioner to seek compensation or interest for loss occasioned by delay, in view of the mandate of the Hon’ble Supreme Court in the case of Bihar State Ardh Sarkari Arajpati Karamchari Maha Sangh and others versus State of Bihar and others [Writ Petition (Civil) No.932 of 2022] decided on 28.09.2026, underscoring the award of interest by compensating an employee who was deprived of the use of money, which had crystallized for payment but was withheld, delayed and was unduly prolonged by the State, entitling such employees for interest, in the following terms:-

Third contention of Learned Counsel is that once the State Authorities have issued an Office Memorandum dated 25.02.2022 [Annexure P-4], giving Revised Pension, Revised Gratuity and the Revised Commuted Pension to Government servants who retired from service on or after 01.01.2016 but Para 10 of the Office Memorandum provided that the arrears of Revised Retiral Benefits accruing from 01.01.2016 to 31.01.2022 leaving the release of arrears of retiral benefits at the mercy of State Authorities Government is illegal.

12(i). Before proceeding to analyze this contention, it is necessary to have a recap of the mandate of law regarding the legal recognition accorded to “concept of pension” is detailed hereinunder:

12(ii). While dealing with the right of an employee for pension, the Hon’ble Supreme Court has outlined that pension is not a bounty and right to pension is a valuable right in a Government Servant. Pension cannot be given by a State out of generosity. Pension is an earned benefit and right by virtue of long continuous available and unblemished service. Right to receive pension is covered under the right to property. Deprivation, delay or denying the right to receive pension fortifies the fundamental right of an employee. Antiquated notion of the State Authorities that since the pension is a bounty or a gratuitous payment depending upon the sweet will or the grace to the discretion of an employer and the same cannot be enforced by the Court has been held to be oppressive and has been deprecated. Right to pension and its payment does not depend upon the discretion of the Government being a social welfare means, so as to achieve and provide socio-economic justice to a retiree, in the case of Deokinandan Prasad vs The State of Bihar and others, 1971 (2) SCC 330, in following terms:-

12(iii). While dealing with a right of a retiree for pension, it has been outlined that pension is not only compensation for loyal service rendered in a post but pension has broader significance, to ensure socio-economic justice. Pension payable to Government Servant is earned by long efficient service and is a deferred portion of a compensation for service rendered. The object of pension is to ensure that a pensioner lives with decency, independency, self-respect and standard equivalent at pre-retirement level, in view of the broader principles outlined by the Constitutional Bench of the Hon’ble Supreme Court in D.S. Nakara versus Union of India, (1983) 2 SCC 305, in following terms:

12(iv). For appreciating the claim of the petitioner, it is necessary to have recap of Rule 3 (1) (j); Rule 3 (1) (o) & (1) (r), Rule 33, Rule 49 (2), Rule 74, Rule 83; and Rule 85 (i) and (ii) of CCS Pension Rules, 1972, as applicable to the employees of the State Government, read as under:-

Fourth contention of Learned Counsel is that once as per Rule 50 of the CCS (Pension) Rules, 1972, the Gratuity becomes payable in lump-sum under these Rules, then, the Para 10 of Office Memorandum dated 25.02.2022 [Annexure P-4], providing to give the arrears of Revised Gratuity to Government servants at mercy of the State Authorities Government is illegal.

13(i). For appreciating the claim of the petitioner at the sake of repetition, it is necessary to have a recap of Rule 3 (1) (j); Rule 50 and Rule 85 (i) and (ii) of CCS Pension Rules, 1972, as applicable to the employees of the State Government, read as under:-

Fifth contention of Learned Counsel is that as per Rule 54 of the CCS (Pension) Rules 1972 Death Cum Retirement Gratuity is a part of Gratuity, which becomes payable in lump-sum.

Para 10 of the Office Memorandum dated 25.02.2022 [Annexure P-4], providing for giving arrears of Revised DCRG at the mercy of the Government and thus, the resultant action of State Authorities in withholding or delaying the release of entire arrears of DCRG in lump sum, [to eligible family members in connected cases, wherever applicable] on the same analogy, on which, the Retirement /Service Gratuity is payable is capricious, arbitrary and illegal.

Sixth contention of the Learned Counsel is that Para 10 of Office Memorandum dated 25.02.2022 [Annexure P-4], providing that the arrears of Revised Family Pension shall be released in “such manner as may be decided by the Government in future”, is contrary to Rule 54 read with Rule 83 (2) of CCS (Pension) Rules 1972 and in terms of Para 7.1 and Para 7.2 of Office Memorandum dated 25.02.2022 [Annexure P-4], eligible family members are entitled for enhanced/revised Family Pension from the date, the Government Servant dies. Moreover, Para 10 confers unfettered and uncanalised discretion on the State to release the Revised Family Pension Arrears amounts to forcing the family members to lead to indigency and penury and deprives the family members to live with dignity. In these circumstances, the eligible family members of deceased government servants {in any of the connected cases herein, and all other similar family members} shall be entitled for release of entire arrears of Family Pension along with interest in terms of this judgement.

& ORS vs STATE]

Seventh contention of Learned Counsel is that Para 8.2, Para 8.3 and Para 10 of the Office Memorandum dated 25.02.2022 [Annexure P-4], providing that the deferential amount or arrears of Commuted Pension [wherever applicable in connected cases or in case of other retirees] is to be released in “a phased manner as may be notified by the Government”, is contrary to Statutory Rules, i.e. CCS [Commutation of Pension] Rules 1981 and therefore, aforesaid Paras are illegal.

RULES 1981:

16(i). For appreciating the contention, a recap of Rule 4 and 5 of the CCS [Commutation of Pension] Rules 1981, as is applicable to the employees of State Government and Boards and Corporations owned and controlled by the State [whichever is applicable], read as under:-

Eighth contention of Learned Counsel is that though the State Authorities have granted benefit of revised pay to petitioner by issuing the HPCS Revised Pay Rules 03.01.2022 [Annexure P-3] w.e.f. 01.01.2016 and on revision of pay retrospectively, petitioner was entitled for the benefit of Revised Leave Encashment on superannuation on 31.01.2021 [in the Lead Case and likewise to others from date of their respective retirements}, then, action of the Authorities in withholding or delaying the release of the entire arrears of Leave Encashment is illegal.

17(i). For the purpose of appreciating the claim for Leave Encashment, it is necessary to have a recap of Rule 39 of the CCS (Leave) Rules 1972, as applicable to employees-retirees of State Government and from service of Boards and Corporations, reads as under:

Ninth contention of Learned Counsel is that deprivation of retiral benefits, which constitutes the property and the legal entitlement of the petitioner and other similar incumbents has force. Action of Authorities in withholding, delaying, deferring or staggering the release of retiral benefits, including Revised Pension, Revised Gratuity, Revised Leave Encashment, Revised Commuted Pension and Revised Family Pension [wherever applicable], amounts to defeating the Government Servants-Retirees their property under Article 300-A of the Constitution of India and such action of the Authorities is punitive and unsustainable, in view of the mandate of the Hon’ble Supreme Court in the case of Dr. Hira Lal vs State of Bihar and others, (2020) 4 SCC 346, in the following terms:-

Tenth Contention of Learned Counsel is that the State Authorities have adopted a pick and choose criteria in releasing the benefits of arrears of revised pay and also arrears of revised retiral benefits amongst one Homogeneous Class of employees-retirees is discriminatory and unconstitutional.

19(i). For appreciating this contention, material on record indicates that after the issuance of HPCS Revised Pay Rules on 03.01.2022 w.e.f. 01.01.2016 [Annexure P-3], the State Authorities released part of arrears of revised pay on 17.09.2022 [Annexure P-5/R-1] in a staggered manner by releasing an instalment of Rs 50000 to Rs 60000/-.

19(ii). Likewise, after issuance of Office Memorandum dated 25.02.2022 [Annexure P-4], the State Authorities issued various other Office Memorandums i.e. an Office Memorandum on 17.09.2022 [Annexure P-6], then on 13.03.2024 [Annexure P-7]; then on 19.10.2024 [Annexure P-2], then on 27.01.2026 [Annexure R-1/III, at page 267 of the paper book]; then on 27.01.2026 [Annexure R-1/IV, at page 271 of the paper book] and on 25.04.2026 [Annexure R-1/II (colly), at page 276 of the paper book], releasing 100% of Revised Retiral Benefits to those retirees, who have crossed the age of 70 years and above, whereas, the petitioner in Lead Case and similar others who are below the age of 70 years were discriminated.

19(iii). Even in case of Class-IV Employees who stood retired between 01.01.2016 to 31.01.2022, the have been released majority of retiral benefits.

19(iv). State Authorities have admitted in Para 8 of Reply-Affidavit dated 17.06.2025 [at Page 78 of the paper book} that all the petitioners, including other similarly situated employees, retired between the period 01.01.2016 form one homogenous class.

ONE HOMOGENOUS CLASS OF RETIREES:

19(v). In above backdrop, the action of the State Authorities in extending the Revised Retiral Benefits by adopting a pick and choose criteria amongst one Homogeneous Class of retirees, amounts to treating “equals as unequals” and this action is violative of Article 14 of the Constitution of India in view of broader principles outlined by the Hon’ble Supreme Court in case of All Manipur Pensioners Association by its Secretary versus The State of Manipur and others, (2020) 10 SCC 625, in following terms:-

Last Contention is that in terms of HPCS Revised Pay Rules 03.01.2022 [Annexure P-3] and the Statutory Rules i.e. the CCS (Pension) Rules 1972 and CCS (Commutation of Pension) Rules 1981 and CCS (Leave) Rules 1972 and Office Memorandum issued on 25.02.2022 [Annexure P-4] giving revised retiral benefits, once the State Authorities have withheld or deferred and in not released entire arrears of revised pay and retiral benefits for about 4½ years now, therefore, the petitioner in Lead Case and others connected cases are entitled for interest on delayed payments.

20(i). While interdicting the inaction of releasing retiral dues promptly, the entitlement of interest on delayed release of benefits was approved by the Hon’ble Supreme Court in the case of State of Kerala and others vs M. Padmanabhan Nair, (1985) 1 SCC 429, in following terms:

20(ii). While dealing with similar eventuality, the admissibility of interest at the rate of 18% per annum on retiral benefits, which were withheld by about two years was approved by the Hon’ble Supreme Court in case of Vijay L. Mehrotra vs State of U.P. and others, (2001) 9 SCC 687, in following terms:

20(iii). Upholding the right to interest on delay in settlement and disbursement of retiral benefits, which were held not to be a “bounty”, Hon’ble Supreme Court in case of D.D. Tewari (Dead) Through Legal Representatives vs Uttar Haryana Bijli Vitran Nigam Limited and others, (2014) 8 SCC 894, has awarded interest at the rate of 9% on delayed Pension and Gratuity from the date of entitlement till payment, in following terms:-

20(iv). While dealing with the claim for interest on entitlement to salaries and pensions. which are legal entitlement and was not a charity, the interest on delayed release of benefits was awarded by the Hon’ble Supreme Court in case of State of Andhra Pradesh and another vs Dinavahi Lakshmi Kameswari, (2021) 11 SCC 543, in following terms:

20(v). Right of an employee and a retiree for interest on the delayed release of retiral benefits has been outlined by the Honble Supreme Court in case of Dr. A. Selvaraj vs C.B.M. College and others, (2022) 4 SCC 627, in following terms:-

20(vi). Similar reiteration of law has been approved for interest on delayed release of retiral benefits at the rate of 6% per annum, by the Hon’ble Supreme Court in case of Ashok Kumar Dabas (Dead through Legal Heirs) versus Delhi Transport Corporation, 2025 SCC OnLine SC 2744, in following terms:

20(vii). Reiterating the right for interest at the rate of 6% per annum on the delayed release of retiral benefits, like Pension and Gratuity, which were held back, despite having earned by an employee for unblemished service, the Hon’ble Supreme Court has outlined in case of Panchayat & Rural Development Department and ors vs Santosh Kumar Shrivastava, 2025 SCC OnLine SC 2042, in following terms:

20(viii). Recently, entire law on interest on delayed payment of salary and monetary legal entitlements has been recapitulated by the Hon’ble Supreme Court in the case of Bihar State Ardh Sarkari Arajpati Karamchari Maha Sangh and others vs State of Bihar and others decided on 28.099.2026, (supra), in following terms:-

(Emphasis supplied)

First Contention of Learned Advocate General is that due to financial constraints, and discontinuance of Revenue Deficit Grant by the Central Government, the State Authorities was forced to release the benefits by applying the provision Rule 13 the Revised Pay Rules and Para 10 of the OM granting the Revised Retiral benefits in terms of the Statutory Rules.

The above contention cannot sustain, for the reasons detailed hereinabove.

FINANCIAL CONSTRAINTS AND BURDEN NOT A GROUND TO DENY THE LEGITIMATE DUES-MONETARY ENTITLEMENTS:

21(i). Factual matrix, indisputably, establishes that State Authorities issued the Revised Pay Rules on 03.01.2022 [Annexure P-3] by giving effect to these Rules w.e.f. 01.01.2016. Likewise, the State Authorities also issued an Office Memorandum dated 25.02.2022 [Annexure P-4] under the Statutory Rules giving revised retiral benefits for the persons who retire between 01.01.2016 to 31.12.2021 under CCS (Pension) Rules 1972 and CCS (Commutation of Pension) Rules 1981. Reply-Affidavit filed by the State Authorities does not dispute the entitlements of Government Servants for Revised Pay Arrears and retirees for Revised Retiral Benefits. Stand in the Reply-Affidavit that due to financial burden or constraints, Rule 13 of Revised Pay Rules dated 03.01.2022 and Para 8.2 and Para 10 of the OM dated 25.02.2022 [Annexure P-4] was incorporated and invoked by State Authorities.

21(ii). Plea of financial burden cannot be invoked so as to defeat the legitimate dues or monetary benefits to the petitioner in Lead Case and other petitioners in connected cases, in view of the mandate of the Hon’ble Supreme Court in the case of State of Rajasthan and others vs Mahendra Nath Sharma, (2015) 9 SCC 540, in following terms:

21(iii). Similar plea of financial burden was negated mandating that the legitimate monetary entitlements flowing from Statutory Rules, constitute the property under Article 300-A of the Constitution of India and such valuable right cannot be defeated or negate by raising the plea of financial burden, by the Hon’ble Supreme Court in the case of Bhikhani Devi and etc. vs Union of India and Others, 2026 SCC OnLine SC 1055, in the following terms:-

21(iv). Considering the fact-situation of instant cases and the principles outlined by the Hon’ble Supreme Court in the case of Mahendra Nath Sharma and Bhikhani Devi [supra], the plea of financial stringency, cannot sustain, for the reason, that once the State Authorities have taken a conscious decision, leading to issuance of Revised Pay Rules on 03.01.2022 and Office Memorandum dated 25.02.2022 [Annexure P-4] by giving retrospective effect to the Rules and Office Memorandum from 01.01.2016, and once the State Authorities have prescribed cut-off date for admissibility of legal entitlement i.e. benefits of arrears of revised pay w.e.f. 01.01.2016 and benefit of arrears of revised retiral benefits from the date of respective retirement between 01.01.2016 till 31.12.2021 then, the State Authorities cannot be permitted to tinker with the cut-off date originally prescribed, by prescribing an artificial cut-off date in the years 2022 to 2026 on the plea of financial constraints, which was to taken into account at the time of notifying the Rules and the OM and not subsequently. Plea of financial constraints or stringency is not a ground to defeat the rights under the Statutory Rules, as in instant batch of cases. State Authorities cannot issue norms which are in conflict the extant Statutory Rules and thus Rule 13 and Para 8.2 and Para 10 of the OM as referred to above, cannot be permitted to operate hereinafter. Even the legitimate expectation acquired under Statutory Rules for revised/enhanced benefits can neither be negated or whittled down or taken away or withheld nor can their release be prolonged indefinitely, merely by invoking offensive provisions of Rules 13 and Para 8.2 and Para 10 of the OM, defeats the very idea of welfare state. Moreover, while answering Question No 10 (though in the context of Dearness Allowance, which was a right accruing under the Statutory Rules}, the Honble Supreme Court has outlined in the case of State of West Bengal and another vs Confederation of State Government Employees West Bengal and Others (2026) 6 SCC 641, that the payment of the “established right for salary, pension, gratuity, or other statutory benefits” cannot be refused or denied or delayed on the plea of paucity of funds or financial constraints and the State is bound to honor its commitments and obligations under the Statutory Rules for its employees.

Second contention of the Learned Advocate placing reliance on the Affidavit dated 15.05.2026 [at page 209 onwards of paper book] and Affidavit dated 28.02.2026 [at page 230 onwards of paper book], that 15^th Finance Commission had recommended Revenue Deficit Grant [RDG] for the award period from 2021 -2022 and 2025-26 amounting to Rs 37,199/- Crores but 16^th Finance Commission has not recommended any Revenue Deficit Grant for the Respondent-State for the award period 2026-2031 and even no other special grant has been released to the State and due to discontinuance of Revenue Deficit Grant, the State is facing financial hardships in releasing the arrears of pay and retiral benefits.

Above plea of the State Authorities does not impress this Court, for the reason, firstly, the material on record indicates that Himachal Pradesh Civil Services [Revised Pay] Rules were notified on 03.01.2022 [Annexure P-3] giving the revised pay to its employees w.e.f. 01.01.2016 and likewise, Office Memorandum dated 25.02.2022 [Annexure P-4] was notified giving Revised Retiral Benefits to Government Servants who retired on or after 01.01.2016 till 31.12.2021 and from the date of issuance of Rules/ Office Memorandum in January/February 2022 till the discontinuance of such RDG in the year 2026, State Government had received Revenue Deficit Grant of Rs 26950/- Crores [at page 165 of the paper book] for the award period from 2022-26, then, the plea of non-releasee of benefits, due to discontinuance of Revenue Deficit Grant cannot sustain; and secondly, the plea of discontinuance of RDG is an after-thought to cover up its inactions/ lethargy in depriving the petitioners and others retirees of their statutory legal entitlements; and thirdly, non-existent and farce plea of paucity of funds is untenable when, Rs 26950/- Crores [at page 165 of the paper book] for the award period from 2022-26, in addition to States own budgetary allocation yet, the paucity of funds cannot be permitted to be the basis for not released the accrued/earned and crystallized statutory benefits.

ON DELAYED PAYMENTS:

Third Contention of the Learned Advocate General is based on the stand taken in Para 12 (g) and 15 (a to d) of Reply-Affidavit dated 17.06.2025 that once there is no provision for payment of interest on arrears of pay/pension, then, the claim for interest is untenable.

Above stand of the State Authorities in the Reply-Affidavit cannot stand the test of judicial scrutiny, for the reason, that the admissibility of interest on delayed payments, even if, there are no specific Rules or Orders for providing for interest, has been approved by the Hon’ble Supreme Court in view of the Articles 14, 19 and 21 of the Constitution of India as retiral benefits are not bounty in S.K. Dua vs State of Haryana and another, (2008) 3 SCC 44, in the following terms:-

Fourth Contention of the Learned Advocate General is based on the judgments passed by the Hon’ble Supreme Court in State of Punjab and others versus Boota Singh and another, (2000) 3 SCC 733; State of Punjab and others versus Amar Nath Goyal and others, (2005) 6 SCC 754; Himachal Road Transport Corporation Retired Employees Union, (2021) 4 SCC 502; and State of Tripura and others versus Anjana Bhattacharjee and others, (2022) 19 SCC 705, to assert and establish that financial constraints is a valid ground for prescribing the cut-off date which cannot be questioned by the Court.

24(i). Above plea of Learned Advocate General and reliance placed in the case of Boota Singh [supra] is misconceived, for the reason, that factual matrix was entirely different, wherein, the employees had retired from service in 1982 and they were seeking benefit of Notification dated 09.07.1985, which provided that Dearness Allowance and ad hoc Dearness Allowance was to be treated as Dearness Pay in terms of those persons who retired on or after 31.03.1985. The employees in the case of Boota Singh [supra] who retired prior to the cut-off date on 31.03.1985 were held to be not covered for the said benefits.

24(ii). Reliance in the case of Amar Nath Goyal [supra] is also misplaced, for the reason, that issue in said case is entirely different and is distinguishable, for the reason, that State of Punjab had taken a decision prescribing the cut-off date as 01.04.1995 for giving benefit of increased Death-cum-Retirement Gratuity [DCRG] after merging Dearness Allowance and the claim by pre-01.4.1995 retirees, including Amar Nath Goyal [supra], was negated.

24(iii). Reliance placed in the case Himachal Road Transport Corporation Retired Employees Union [supra] is misplaced when, the fact-situation in the case was entirely different. Respondent-Corporation in the case had introduced Pension Scheme dated 06.10.1995 w.e.f. 05.06.1995 and the retired employees of Association who retired prior to the cut-off date i.e. 05.06.1995 had come up challenging the cut-off date and extension of benefits which were denied on the ground that prescription cut-off date in view of financial stringency was valid. The fact-situation in instant case is entirely different.

24(iv). Reliance placed in the case of Anjana Bhattacharjee [supra] cannot come to the aid of the State, for the reason, that in the said case, the State of Tripura had notified Tripura Revised Pension Rules in 2009 and the said Rules expressly mandated that benefits shall accrue “notionally from 01.01.2006 and financial benefits shall accrue from 01.01.2009 or the date of superannuation which is later.” In aforesaid case, the State Tripura had taken a conscious decision to give notional benefits from retrospective date and actual financial benefits from the issuance of said Rules, then, said judgment is distinguishable and not applicable on facts. Considering the aforesaid judgments, the same are not applicable and are distinguishable.

Last contention of Learned Advocate General is that in cases of economic legislation or formulation of economic policy, judicial Review is not permissible, as the policy decision of the Government, cannot be interfered by the Courts, by placing reliance on the judgments of the Hon’ble Supreme Court in the case of R.K. Garg vs Union of India and others, (1981) 4 SCC 675; Narmad Bachao Andolan vs Union of India and others, (2000) 10 SCC 664; and Vivek Narayan Sharma and others vs Union of India and others, (2023) 3 SCC 1.

25(i). Reliance placed by Learned Advocate General does not impress this Court as the ratio of the aforesaid judgments is not in dispute but the same are not applicable in the fact situation of the instant batch of cases.

25(ii). Reliance on the judgment in the case of R.K. Garg [supra] was with respect to the economic legislation with the findings that mere possibility of abuse or inequity or immorality will not constitute a ground for unconstitutionality. The said judgment is distinguishable on facts, for the reason, that right of the petitioners for Revised Arrears of pay and Revised Retiral Benefits flow from Statutory Rules. The legal entitlements for these benefits are not in dispute. It is the payability and mode of release of benefits by invocation of Rule 13 and Para 8.2 and Para 10 which is capricious, arbitrary, oppressive and defeats constitutional right of Article 300-A of the Constitution of India and teats “equals to unequals”, leads to grave violation of Article 14 of the Constitution of India and therefore, in the fact-situation of instant case, reliance on the judgment in the case of R.K. Garg [supra] is distinguishable.

25(iii). Reliance placed in the case Narmad Bachao Andolan [supra] cannot come to the aid of the State Authorities, as the issue was with respect to the policy decision for construction of a dam for ecological protection. Even, principle of law mandated in the said judgment stands against the State, for the reason, that broader principle outlined in said judgment is that once fundamental and constitutional rights are infringed or action is arbitrary or malafide, judicial review is permissible.

25(iv). Reliance on the judgment in the case of Vivek Narayan Sharma [supra] was in a different context, whereby, the decision of Reserve Bank of India, on demonetization being a policy decision was upheld, being a policy decision. In facts of instant case, once the financial capability and its payability, was to be examined, considered, decided and approved at the time of issuing the Revised Pay Rules dated 03.01.2022 and while notifying the Office Memorandum dated 25.02.2022 [Annexure P-4] and while giving retrospective applicability to these Rules and/or the Office Memoranda from 01.01.2016. After having notified the Rules/Office Memoranda, entitling the Government Servants/ Retirees for benefits from 01.01.2016, the State Authorities cannot take U-turn, to the extent of payability-release of arrears, which cannot come to the aid of the State Authorities in the facts of instant case. Consequently, the reliance on the judgment in case of Vivek Narayan Sharma [supra] cannot be accepted and is turned down.

25(v). Learned Advocate General has placed reliance on the judgment in case of State of Punjab and others vs Ramlubhaya Bagga and others, (1998) 4 SCC 117, to assert that the Government had right to change policy and no person has absolute right under the old policy. Above contention is misplaced, for the reason, that policy, in question, in the case of Ramlubhaya Bagga [supra] was with respect to the medical reimbursement and the policy in question in said case was a mere administrative decision, which was not based on any Statutory Rule, as in instant case.

25(vi). Learned Advocate General tried to impress this Court by placing reliance on the CCS (Pension) Rules 2021, but on query by this Court, nothing could be brought to our notice that the State Authorities have adopted these Rules for the State Govt Rules. Even CCS (Revised Pay) Rules dated 03.01.2022 and the OM dated 25.02.2022 confer benefits by applying the CCS (Pension) Rules, 1972.

Facts of instant case, establish that once a valuable right for arrears of revised salary, and arrears of revised retiral benefits i.e. Revised Pension, Revised Gratuity, Revised Commuted Value of pension, Revised Leave Encashment had accrued/crystallized, in accordance with Statutory Rules i.e. CCS [Pension] Rules 1972; and the CCS [Leave] Rules; and CCS [Computation of Pension] Rules, as applicable in the instant batch of cases, but despite accrual of rights under the Statutory Rules, State Authorities have made an attempt to incorporate Rule 13 and Para 8.2 and Para 10 of the OM, as referred to above, usurping the unfettered, unbridled, uncanalised and unrestricted in the State Authorities to exercise its discretion at its whims, fancies, mercy, so as to negate, curtail, deny, or withhold and thereafter and/or to release Arrears of Revised Pay and/or Arrears of Revised Retiral Benefits, in a staggered or piece-meal manner, in instalments and that too when release spills over to more than 4½ years now and the revised balance arrears of pay and Balance Revised Retiral Benefits are yet to be released to the petitioners and other retirees. Carving out artificial discrimination without any valid inclusion and rationale by releasing the benefits to some of the retirees who retired after 01.01.2016 [may be who have attained 70 years of age and above or to Group D/Class-IV] amounts to carving inter-se discrimination cannot sustain. Treating members of homogeneous Class being retirees differently speaks of volumes and arbitrariness, unfairness and legal malafides. Moreover, constitutional right of Article 300-A of Constitution of India have been patently violative due to the inclusion of oppressive Clauses in Revised Pay Rules and Office Memoranda giving the Revised Retiral Benefits, are contrary to the Statutory Rules, coupled with the fact that inter-se discrimination in release of benefits and the plea of stoppage of Revenue Deficit Grant, being an afterthought, negates the plea of the State. Once the fundamental and constitutional violations, including malafide and arbitrariness in State action is writ large, therefore, plea of the State Authorities and the contention of Learned Advocate General cannot pass the test of judicial scrutiny. Resultantly, the action of the State Authorities -Respondnets in withholding, or deferring, staggering or indefinitely delaying the release of the legal entitlements and monetary dues which have crystallized and accrued and vested in Government Servants/Retirees from 01.01.2016 onwards by virtue of Statutory Rules, cannot be negated by invoking offensive, capricious Rules/Office Memoranda conferring unfettered, unbridled, uncanalised and unrestricted discretion to release the benefits at the mercy of the State Authorities.

In these circumstances, contentions raised by Learned Counsel for respective petitioner(s) are accepted whereas the contentions of Learned Advocate General, which have been adopted by other Learned respondent Counsel {except in LPA} do not have any force and the same are accordingly turned down. Resultantly, offending part of the Rule and Paras of OM are quashed and set-aside in view of the directions contained hereinbelow.

No other points was argued/raised.

In view of the above discussion and for reasons recorded hereinabove, instant petition [Lead Case] and all connected petitions are allowed, in following terms:-

(i). Instant petition, Madhu Deshta versus State of Himachal Pradesh and others [CWP No: 8504 of 2025], is allowed;

(ii). Rule 13 of the Himachal Pradesh Civil Services [Revised Pay] Rules notified on 03.01.2022 [Annexure P-3], and the expressions in “such manner” and “at such time” as may be “approved by the Government”; which makes other provisions of the Rules unworkable and otiose and which deprives the petitioner of the right to receive the entire earned/accrued arrears of revised pay, due to the unfettered, unbridled, uncanalised, unguided discretion or dictates and fancies of the State Authorities, violates Constitutional right to property under Article 300-A and being oppressive and unreasonable and arbitrary, is read down and is declared inoperative,;

(iii). Para 10 of the Office Memorandum notified on 25.02.2022 [Annexure P-4] and the expressions in “such manner as may be “decided by the Government in future” and makes actual release of arrears of Revised Pension/ Family Pension and Revised Gratuity/DCRG from the due date of retirement {01.02.2021 in Lead Case} and the aforesaid provision depriving petitioner and other retirees of earned/accrued right-legal entitlement to receive entire arrears of revised retiral benefits due to unfettered, unbridled, uncanalised, unguided discretion of State Authorities, being violative of constitutional right to property under Article 300-A, and being offensive, and unreasonable and arbitrary, and the OM being contrary to the Statutory Rules i.e. the CCS [Pension] Rules 1972; is quashed and set-aside;

(iv). Para 8.2 of the Office Memorandum notified on 25.02.2022 [Annexure P-4] and expression “in a phased manner as to be notified by Finance Department,” restricting the right of the retirees to receive the entire arrears of Revised Commuted Pension “which is payable in lump sum” in CWP 11716 of 2024, titled as Dr Jagdev & Ors vs State, being contrary to Rule 5 and 10 of the CCS (Computation of Pension) Rules 1981, is quashed and set-aside;

(v). Action of State Authorities in withholding or delaying the release of entire arrears of Revised Leave Encashment; despite its payability in lump-sum under the Statutory Rule i.e. CCS (Leave) Rules ; is quashed and set-aside;

(vi). State Authorities shall release entire arrears of revised pay to petitioner in Lead Case in two equal instalments; by releasing first lump-sum instalment on or before 15^th December, 2026 and the second lump-sum instalment on or before 28^th February, 2027 ;

(vii). State Authorities shall release entire arrears of Revised Retiral Benefits i.e. the Revised Pension/Family Pension and Revised Gratuity/DCRG and Revised Leave Encashment and the Revised Commuted Pension and Revised Leave Encashment to the petitioner in Lead Case in two equal instalments; as in Direction no (vi) (supra);

(viii). Sequel to directions (vi) and (vii) above, State Authorities shall give interest at the rate of 6% per annum w.e.f. 01.06.2022 [i.e. date of payability] till release of benefits during the pendency of instant petition; and also on the unpaid amount, which is liable to be released in terms of this judgement before 15.12.2026 and 28.02.2027 as directed hereinabove;

(ix). Directions passed in Lead Case [CWP No. 8504 of 2025, titled as Madhu Deshta vs State of Himachal Pradesh and others] shall also mutatis mutandis apply in all connected writ petitions/ cases, with further directions to the State Authorities / Boards / Corporations to extend all admissible benefits as in Paras 28 (vi) to (viii) of this judgement; within the same time-frame mandated therein;

(x). In the light of the findings recorded in CWP No: 8504 of 2025 [in Lead Case]; LPA No: 557 of 2025, titled as State of Himachal Pradesh and others vs Mini Sharma, and CMP (M) No. 147 of 2025, State of Himachal Pradesh and others vs Balbir and anr, and CMP (M) No. 2123 of 2024, State of Himachal Pradesh and others vs Ravinder Chand & anr, shall accordingly stand dismissed;

(xi). Needless to say, that those employees-retirees, who had not filed any writ petition, on the date of this judgement, [30.10.2026] such incumbents shall be entitled to claim substantive benefits only;

(xii). Sequel to the direction no (xi) above, retirees, being fence-sitters, who have not taken legal recourse as on day, such incumbents shall be entitled to substantive benefits only; but without any interest, as has been awarded to petitioners in instant batch of cases;

(xiii). Executions Petitions, 53 of 2024 in CWP No. 7731 of 2023, Ex. Petition 70 of 2024 in CWP No. 7825 of 2023, Ex. Petition 71 of 2024 in CWP No.7927 of 2023 Ex. Petition 595 of 2024 in CWP No. 3336 of 2024, Ex. Petition 594 of 2024 in CWP No.3424 of 2024 & Ex. Petition 292 of 2024 in CWP No.2473 of 2023 listed with the present batch of cases, are de-tagged, with directions to Learned Registrar (Judicial), to list the same hereinafter, as per norms;

(xiv). Following cases i.e. CWP No. 7152 of 2023 alongwith CWP No. 7153 of 2023, 7158 of 2023, 7159 of 2023, 7160 of 2023, 7223 of 2023, 7244 of 2023, 7245 of 2023, 7246 of 2023, 7247 of 2023, 7248 of 2023, 7249 of 2023, 7251 of 2023, 7252 of 2023, 7253 of 2023, 7254 of 2023, 7255 of 2023, 8193 of 2023, 2820 of 2024 and CWP No. 9268 of 2024, were already disposed of, but were erroneously shown as connected with present batch of cases and therefore, the same are de-tagged and may be treated as already disposed of ;

(xv). Parties to bear respective costs;

In the aforesaid terms, the instant petitions and all pending miscellaneous application(s), if any, shall accordingly stand disposed of.