SHIMLA: In a major relief for thousands of state government employees and pensioners, the Himachal Pradesh High Court has struck down provisions that allowed the government to withhold or stagger the payment of revised pay and retiral arrears.
A division bench comprising Justice Vivek Singh Thakur and Justice Ranjan Sharma delivered the landmark judgment on October 31, 2026, designating Madhu Deshta vs. State of Himachal Pradesh and Others (CWP No. 8504 of 2025) as the lead case among hundreds of connected matters.
Key Highlights of the Judgment
* Challenged Provisions Set Aside: The court read down Rule 13 of the H.P. Civil Services (Revised Pay) Rules, 2022, and quashed Para 10 of the Office Memorandum dated February 25, 2022, along with relevant clauses restricting commuted pension arrears. The bench ruled that leaving the release of earned monetary benefits to the unbridled discretion and mercy of the state violates Article 300-A of the Constitution regarding the right to property.
* Strict Timelines for Payment: The state authorities and associated public sector undertakings have been directed to clear all outstanding arrears of revised pay, pension, family pension, gratuity, leave encashment, and commuted pension to the petitioners in two equal installments:
* First Installment: On or before December 15, 2026.
* Second Installment: On or before February 28, 2027.
* Interest Awarded: Acknowledging that the delay caused financial prejudice to the retirees, the court ordered the payment of simple interest at 6% per annum starting from June 1, 2022 (the date payability crystallized) until the actual disbursement of the funds.
* Rejection of Financial Constraints Plea: Dismissing the state’s defense regarding financial stringency and the discontinuation of Revenue Deficit Grants by the Finance Commission, the court emphasized that statutory pensionary benefits and earned salaries cannot be denied on the grounds of paucity of funds.
* Relief for Fence-Sitters: The court clarified that while active petitioners will receive their dues along with 6% interest, retirees who did not approach the court prior to the judgment date (October 30, 2026) are entitled only to substantive benefits without interest.
