GIAN CHAND Vs. STATE OF PUNJAB

JUDGEMENT

(1.) The petitioners who retired from the services of the Government of Punjab between July 31, 2003, and October 30, 2006, and had their pensions commuted, are aggrieved because of a classification made by a Circular dated July 29, 2003, which increased the discount rate from 4.75% to 8%. Further, a new Circular dated October 31, 2006, was issued revising the discount rate back to 4.75% however it was not done retroactively, creating a different class. Claiming this as arbitrary and discriminatory, they filed the present writ petition(s) in the nature of certiorari before this Court to quash the impugned Circular dated July 29, 2003.

(2.) In 1996, the Government of Punjab adopted the recommendations of the 4th Pay Commission and formulated the pension rules, which allowed retirees to commute 40% of their basic pension at a discount rate of 4.75% (the purchase amount equates to 10.46 years) to be recovered by the state within fifteen years.

(3.) On July 29, 2003, the State Government issued a Circular that prescribed a new table for calculating pension commutation, replacing the previous one. According to the new circular, employees retiring on or after July 31, 2003, could commute their pension at an increased discount rate of 8% (the number of years of purchase becomes 6.21).