Andhra Pradesh High Court Dismisses Challenge to 15-Year Pension Rule, Says “Petitioners Having Derived the Benefit ; Cannot Now Challenge the Very Scheme”
Safiya Malik
The High Court of Andhra Pradesh Division Bench of Chief Justice Dhiraj Singh Thakur and Justice Ravi Cheemalapati held that retired government employees who had voluntarily opted for pension commutation cannot legally challenge Rule 18 of the Andhra Pradesh Civil Pensions (Commutation) Rules, 1944, which mandates restoration of the commuted portion only after 15 years. The Court dismissed a batch of writ petitions filed by former government employees, holding that having accepted benefits under the pension scheme, the petitioners were barred from disputing the restoration terms.
The petitioners in this batch of writ petitions were all retired Government Employees of the State of Andhra Pradesh, having superannuated at the age of 58. The core issue in the case revolved around Rule 18 of the Andhra Pradesh Civil Pensions (Commutation) Rules, 1944, which stipulates that the commuted portion of the pension shall be restored after 15 years from the date of commutation.
The petitioners sought to challenge the validity of this rule, contending that the 15-year period was arbitrary, lacked mathematical justification, and resulted in the unjust enrichment of the State. They prayed for a writ of Mandamus declaring Rule 18 as illegal and directing restoration of full pension after 11 years and 3 months.
Under the 1944 Rules, a retiring employee who opted for commutation could receive a lump sum in lieu of up to 40% of their pension. The rule on restoration, as captured in Rule 18, states that for pensioners drawing pension in India, the commuted portion is to be restored after 15 years from the effective date of reduction, either from retirement or from the actual date of commutation.
The petitioners argued that since the commuted amount is effectively recovered by the State within 11 years and 3 months, continuing deductions until the 15th year constitutes undue retention. They highlighted that, previously, commuted amounts were not restored at all, and a change only occurred after the government adopted a judgment of the Supreme Court in Common Cause v. Union of India, followed by the issuance of G.O.Ms.No.44 on 19 February 1991.
The petitioners further pointed to changing conditions since the rule’s inception. They relied on WHO data suggesting that life expectancy among government employees is now 77 years, significantly higher than the national average and their retirement age. They submitted that longevity and falling interest rates together nullified the rationale behind the continued 15-year period.
Reliance was also placed on the decision of the Kerala High Court in Central Government Pensioners Association v. Union of India (WP No. 23282 of 2005), where the Union Government was directed to reconsider the 12-year restoration period in line with the 5th Central Pay Commission’s recommendations. The petitioners noted that though the Central Government did not accept this recommendation, the issue remained open for reconsideration.
On the respondents’ side, the State strongly defended the rule. Mr. E. Sambasiva Pratap, Additional Advocate General, submitted that the commutation of pension was a welfare measure fully funded by the public exchequer, with no employee contribution. He stated that commutation was entirely voluntary, with all terms made clear to the retiring employee.
The State pointed out that the 15-year rule is backed by the recommendations of the 6th and 7th Central Pay Commissions, and of successive State Pay Revision Commissions. The State also provided statistical data showing significant financial exposure due to premature deaths of pensioners. A total unrecovered amount of ₹1153 crores was stated as being forfeited due to deaths before restoration.
The mortality data, covering 2022–2024, showed that thousands of pensioners passed away before completing 15 years post-commutation. For example, 1,329 pensioners expired within 10 years, 1,474 within 11 years, and 1,838 within 14 years. Additionally, 262 pensioners passed away before even receiving the first commuted value payment.
The State also submitted a comparative financial analysis showing that pensioners who received the lump sum and invested it would gain better post-tax returns than those who did not commute, even assuming an 8% interest rate over 15 years.
This analysis demonstrated that opting for commutation could yield a maturity value of ₹3.22 lakhs (pre-tax) versus lesser gains via monthly recovery over the same period. Commuted amounts were also noted to be tax-exempt, unlike regular pension payments, adding further benefit to pensioners.
The respondents cited consistent policy and fiscal considerations supporting the 15-year period, asserting that policy decisions based on expert recommendations must not be lightly interfered with by the judiciary.
“The petitioners having derived the benefit of lump sum payment on commutation of pension cannot be permitted to now challenge the very Scheme under which they had obtained the said benefit.”
The Court held that the principle of qui approbat non reprobat squarely applied. Citing New Bihar Biri Leaves Co. v. State of Bihar, it recorded:
“A person of his own accord, accepts a contract on certain terms and works out the contract, he cannot be allowed to adhere to and abide by some of the terms of the contract which proved advantageous to him and repudiate the other terms of the same contract which might be disadvantageous.”
The Bench also quoted R.N. Gosain v. Yashpal Dhir: “Law does not permit a person to both approbate and reprobate... no party can accept and reject the same instrument.”
The Court cited the principle of estoppel by acceptance of benefits, observing: “One who knowingly accepts the benefits of a contract... is estopped to deny the validity or binding effect on him of such contract.”
Referring to Common Cause v. Union of India, the Court noted the Supreme Court’s holding: “The petitioners have contended that the commuted portion out of the pension is ordinarily recovered within about 12 years... We do not think we would be justified in disturbing the 15-year formula so far as civilian pensioners are concerned.”
Quoting from Forum of Retired IPS Officers v. Union of India, the Court stated: “Courts would hesitate... unless there is complete arbitrariness and discrimination that is ex-facie apparent.”
The Court acknowledged that increased life expectancy was raised by the petitioners but held: “Several factors, figures and the entire pension provisions on the whole including cost to the exchequer have to be taken into consideration.”
It further noted: “The amount foregone by the State on account of such premature mortality of the pensioners is stated to be Rs.1153 Crores.”
The Court reviewed economic policy jurisprudence, citing: “It is well settled that the courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitrariness or unfairness etc.”
Referring to BALCO Employees’ Union v. Union of India, it stated: “In the case of a policy decision on economic matters, the courts should be very circumspect… unless the court is satisfied that there is illegality in the decision itself.”
It reviewed the 11th Pay Revision Commission’s detailed recommendation, which reiterated that: “Opting for commutation is at present more advantageous to the employees.”
The Court concluded: “The fact that even after 15 years, receipt of a lump sum amount by a pensioner if invested rightly earns better returns... goes to show that the scheme framed by the Government... is not detrimental to the interest of the petitioner.”
Finally, the Bench stated: “All these factors persuade us to hold that the impugned rule does not suffer from any perversity or arbitrariness.”
The Court directed: “Be that as it may, we do not find any merit in the present set of writ petitions which are accordingly dismissed. No order as to costs. Pending miscellaneous applications if any, in these petitions, shall stand closed.”
Advocates Representing the Parties
For the Petitioners: Mr. Tagore Yadav Yaragorla, Advocate
For the Respondents: Mr. E. Sambasiva Pratap, Additional Advocate General
Case Title: Thupakula Venkateswar Rao and others vs. The State of Andhra Pradesh and others
Neutral Citation: APHC010480262024
Case Number: Writ Petition No. 24822 of 2024 & batch
Bench: Chief Justice Dhiraj Singh Thakur, Justice Ravi Cheemalapati
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