State of Uttarakhand vs M.C. Bhandari 2026: PSC Chairman Pension Rule

Case Details

Case number

Civil Appeal No. 1614 of 2011, heard with Civil Appeal No. 1615 of 2011Copy

Diary number

24785/2010

Date of judgment

4 November 2026

Neutral citation

2026 INSC 1194Copy

Bench

Justice S.V.N. Bhatti and Justice N.V. Anjaria

Judgment written by

Justice N.V. Anjaria

Court below

High Court of Uttarakhand, judgments dated 15 April 2010 in Writ Petition No. 182 (SB) of 2008 and Writ Petition No. 181 (SB) of 2008

Main laws

Articles 14, 39(d) and 318 of the Constitution; Uttarakhand Public Service Commission (Conditions of Service) Regulations, 2004

Status

Reportable

Case Journey: How It Reached the Supreme Court

1. 1Appointed to the CommissionThe State appoints Sohan Lal a Member on 20 July 2006 and Lt Gen (Retd.) M.C. Bhandari Chairman on 3 November 2006, and Bhandari takes charge on 24 November 2006. Basic pay is Rs 22,500 for the Member and Rs 26,000 for the Chairman.
2. 2Pension deducted from payOn 19 December 2006 the Finance Controller fixes the Chairman's salary after deducting Rs 17,627, his pension. A pension of Rs 11,025 is deducted for the Member.
3. 3Representation rejectedThe Chairman asks for a fresh pay fixation on 13 June 2007. The State rejects it on 30 June 2007.
4. 4Office Memorandum issuedOn 16 September 2008 the State issues an Office Memorandum that records the Governor's decision on deducting the pension.
5. 5High Court allows the petitionsOn 15 April 2010 the High Court of Uttarakhand holds Regulation 7(2) ultra vires Article 14 read with Article 39(d), sets aside the Office Memorandum and directs reimbursement.
6. 6Supreme Court: appeals allowedThe State appeals. On 4 November 2026 the Supreme Court allows both appeals and sets aside the High Court judgments.

What Was the Case About?

Lieutenant General (Retd.) M.C. Bhandari retired from the Indian Army on 30 August 2006. The State appointed him Chairman of the Uttarakhand Public Service Commission on 3 November 2006, and he took charge on 24 November 2006. His basic pay was fixed at Rs 26,000 plus allowances, with his army pension to be deducted. On 19 December 2006 the Finance Controller of the Commission fixed his salary after deducting Rs 17,627, the pension he drew.

On 13 June 2007 he asked for a fresh pay fixation. He argued that pension is a vested right with no link to the Chairman's office. The State rejected his request on 30 June 2007, and he challenged Regulation 7(2) and the deduction orders in the High Court. The second petitioner, Sohan Lal, retired as Additional Secretary to the Government of Uttarakhand on 20 July 2006 by voluntary retirement. The State appointed him a Member of the Commission the same day, and he took charge on 22 July 2006. His basic pay was Rs 22,500, and his pension of Rs 11,025 was deducted. He filed a similar petition.

On 16 September 2008 the State issued an Office Memorandum that records the Governor's decision. It says that the pension payable to a person immediately before he takes charge, except a disability or injury pension, is deducted from the basic pay of the Chairman or Member.

The High Court allowed both writ petitions on 15 April 2010. It held that Regulation 7(2) is ultra vires Article 14 read with Article 39(d) of the Constitution, because the deduction breached the principle of equal pay for equal work. In the Chairman's case it reasoned that the pension was earned for army service and had no link with the work of the Commission, and it noted that the petitioners did the full duties of the post. It relied on the decision of the Punjab and Haryana High Court in Ram Phal Singh vs State of Haryana, decided on 8 September 2004. It set aside the Office Memorandum of 16 September 2008 and directed reimbursement of the amounts deducted. The High Court did reject the argument that the deduction changed service conditions in breach of the Proviso to Article 318. The State then appealed to the Supreme Court by special leave.

Issues and What the Supreme Court Held

This table lists each question the Court dealt with, its answer in simple words, and the paragraph of the judgment where you can read it.

The Court's Reasoning in Simple Words

The question before the Court was whether the petitioners, after their appointment, could claim their full salary and also keep the pension for their earlier posts, and whether the State could fix their salary by withholding the pension under Regulation 7(1) read with Regulation 7(2).

The Court held that Regulation 7(2) keeps the pension in abeyance during the tenure. The pension is withheld, not withdrawn, and it revives when the tenure ends. So the rule does not change the conditions of service to the member's disadvantage under the Proviso to Article 318. The Court agreed with the High Court on this narrow point.

The Court held that the principle of equal pay for equal work has no relevance here, and that the High Court misdirected itself on it. It held that Regulation 7(2) is not ultra vires Article 14 and Article 39(d). It also said that Gurmesh Prakash Bishnoi vs State of Haryana, (1998) 5 SCC 260, is an answer to the issue on similar facts. That case dealt with pension for service as Member and then Chairman of the Haryana Public Service Commission. The Supreme Court judgment mentions Ram Phal Singh only to record that the High Court relied on it.

The Court rejected the argument that the Governor's determination came after the appointment and so could not apply. It held that Regulation 7 applied from the time of appointment, and that Regulation 7(2) does not require the Governor's decision at the same moment, so pay minus pension could be fixed in the meantime. The Court said the Office Memorandum reflected the Government's decision and described its operation as, at best, retroactive. The Court added that adding the pension to the salary would give an absurd result and could even go beyond the pay of the highest post. It also called for the file notings. It found that the decision was duly taken under Regulation 7(2) and held the argument about irregularity to be entirely without merit.

The Court also relied on estoppel and acquiescence. It held that both petitioners accepted their posts with knowledge of the Regulations, so they could not dispute them later, and that a person who accepts a post cannot later challenge its service regulations. They held their posts for over two years and raised the challenge only near the end of their tenure. The Court decided the validity of Regulation 7(2) and its use for cases like these petitioners'. It did not separately discuss refunds. The High Court's direction to reimburse the deducted amounts was part of the judgments that the Court set aside.

Final Order of the Supreme Court

1. Both Civil Appeals, No. 1614 of 2011 and No. 1615 of 2011, are allowed.
2. The High Court judgments and orders dated 15 April 2010 in Writ Petition No. 182 (SB) of 2008 and Writ Petition No. 181 (SB) of 2008 are set aside.
3. Any pending interlocutory application ceases to survive.
4. The judgment does not mention any order on costs.

Laws, Rules and Cases in This Judgment

Key Points From This Judgment

• Under Regulation 7(2), the Governor decides whether the pension is held in abeyance, wholly or in part, or the pay is reduced by an amount not exceeding the pension, while the person serves as Chairman or Member of the Commission.
• The pension is withheld during the tenure and revives when the tenure ends. It is not taken away.
• Holding the pension in abeyance does not change service conditions under the Proviso to Article 318.
• The equal pay for equal work principle did not apply to this dispute, and Regulation 7(2) is not ultra vires Article 14 and Article 39(d).
• The Governor's determination did not have to be made at the time of appointment.
• The Court also relied on estoppel (accepting the post knowing the Regulations) and acquiescence (challenging them late) against the petitioners.
• The Court agreed with the High Court that the deduction does not breach the Proviso to Article 318, but held that the High Court was wrong on equal pay for equal work.

Why This Judgment Matters

This judgment matters for retired officers who take up constitutional posts such as a Public Service Commission Chairman or Member. It explains that the Court upheld a rule that holds back the pension during the tenure. The Court decided the case on the Uttarakhand Regulations and the facts of these two petitioners. Rules in other states can differ, so check the regulations that apply to the post and read the full judgment.

This page is useful for retired government servants who are offered posts in constitutional bodies, members of Public Service Commissions, state governments and lawyers who work on service law.

Key Legal Terms Explained

Abeyance

Held back for the time being, not cancelled. A pension in abeyance is not paid during the tenure but is not lost.

Ultra vires

Beyond the power that the law gives. A rule declared ultra vires is invalid.

Office Memorandum

A written official communication issued by a government department.

Proviso to Article 318

A condition that protects a Public Service Commission member: the conditions of service cannot be changed to his disadvantage after appointment.

Equal pay for equal work

A principle that people who do the same work should get the same pay. The Court held that it had no relevance to this dispute.

Estoppel

A person cannot go against a position he accepted earlier. Here the petitioners accepted their posts knowing the Regulations.

Acquiescence

Accepting a situation by staying silent or carrying on for a long time. Here the petitioners challenged the Regulations only near the end of their tenure.

Special leave

Permission of the Supreme Court to hear an appeal against an order of a High Court.

Read the Full Judgment

This page explains the judgment in simple words. It is not legal advice. Please read the full judgment before you rely on it.

Frequently Asked Questions