Madras High Court Rules in Favor of Extending Option to Continue with Old Pension Scheme for Pre-2003 Selection Participants

LI Network

Published on: 31 July 2023 at 11:45 IST

The Madras High Court has declared that individuals appointed before April 1, 2003, during the recruitment process before the implementation of the Contributory Pension Scheme, should be given the opportunity to retain the old pension scheme.

The court’s ruling came after hearing a petition filed by B. Vallipavai, who was appointed as a BT Assistant and challenged the retrospective operation of the New Contributory Pension Scheme.

Justice GK Ilanthiraiyan emphasized that although the new pension scheme was introduced on January 1, 2004, the vacancy for the position of B.T. Assistant had arisen as early as November 9, 2002. The court also noted that Vallipavai had been called for an interview on April 10, 2003.

The court stated, “The contributory pension scheme was brought into force from 01.01.2004, whereas the vacancy arose for the post of B.T. Assistant as early as on 09.11.2002 itself.

Therefore, the option to continue with the old pension scheme must be extended to all those individuals who participated in the selection prior to the crucial date, even if they received their appointment letter after the crucial date.”

Vallipavai was appointed on April 17, 2003, and she argued that the terms and conditions of employment in effect at the time of the recruitment process should not be altered to the detriment of the employees.

She cited a judgment by the Apex Court in Union of India Vs. Tushar Ranjan Mohanty, wherein the court observed that rules under Article 309 of the Constitution cannot be made retrospective to nullify vested rights under a statute or the Constitution.

The court also took note of an Office Memorandum issued by the Government, which allowed a one-time option for Civil Government employees appointed after October 1, 2004, to continue under the Old Pension Scheme if they were hired against a post advertised or notified for recruitment before December 22, 2003.

The court further stated that since the New Pension Scheme was made operative retrospectively, employers and employees would not have anticipated that appointments made after April 2003 would be ineligible for the Old Pension Scheme.

Consequently, the court ruled in favor of Vallipavai and directed the first and second respondents to continue her under the Teacher’s Provident Fund (Family Pension Scheme) in TPF.No.339415.

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