Employment LawSNDT Women’s University Ordered to Implement 7th Pay Commission Benefits for Retirees

 The Hon’ble Bombay High Court in the case, Prachi P. Kulkarni & Others vs. State of Maharashtra and Others, 2024 SCC OnLine Bom 1351, decided on May 9, 2024 held that the Respondent university should not compromise employee welfare by withholding pension benefits from its retired employees, and that it had an obligation to start securing funds and establishing a corpus when the 7^th Pay Commission was implemented.  Consequently, an interim order was issued requiring the university to begin paying pensionary benefits, including the dearness allowance (hereinafter referred to as “DA”), according to the 7^th Pay Commission starting from July 1, 2024.

FACTS

The petitions in this case were filed by retired employees of Shreemati Nathibai Damodar Thackersey (hereinafter referred to as “SNDT”) Women’s University. The Petitioners claimed that they have not received retirement benefits as per the 7^th Pay Commission, which is applicable to the university, nor have they been paid the correct and admissible DA. This has led to financial difficulties for the Petitioners, many of whom are elderly and rely on these benefits for their livelihood.

Several writ petitions were filed, each by different employees such as:

• Writ Petition (L) No. 12161 of 2024 was filed by 16 retired employees collectively;
• Individual petitions include Writ Petition (L) No. 3980 of 2022 by Prachi P. Kulkarni, a Senior Head Clerk retired on September 30, 2015;
• Writ Petition (L) No. 4069 of 2022 by Suhas Narayan Gogage, a Peon retired on November 30, 2011;
• Writ Petition (L) No. 3987 of 2022 by Namrata V. Desai, a Junior Clerk retired in 2009;
• Writ Petition (L) No. 3991 of 2022 by Kalpana Ramesh Purohit, a Junior Clerk retired on July 31, 2010.

Two key undisputed facts in this case are that the 7^th Pay Commission applies to SNDT and that the university has not been paying the Petitioners their pensionary benefits as per the 7^th Pay Commission, only the outdated 6^th Pay Commission benefits. The Petitioners in these petitions argue that the lack of updated pensionary benefits has caused them severe hardship, as the difference between the 6^th and 7^th Pay Commissions are substantial. Additionally, they claimed that the DA paid to them is not equivalent to what current employees receive. While current employees receive DA at 164% of basic pay, the Petitioners receive it at only 142%.

During hearings on March 11, 2024, the Court was informed of the Petitioners’ roles and long-standing service in the university. The Petitioners cited prior orders and consent terms from a 1999 case, which established the university’s responsibility to provide pensionary benefits to all non-teaching employees, regardless of department funding. This precedent underscores the university’s responsibility to treat pension payments with urgency. Despite an affidavit submitted by the university in Writ Petition (L) No. 3987 of 2022, indicating an intention to comply with the 7^th Pay Commission recommendations, no specific action or timeframe for disbursement was confirmed.

The Court expressed disappointment at the university’s delay and failure to commit to a payment schedule. It reminded the university of its duty as a public educational institution to honour commitments to its retired employees and stressed that delaying pension payments is inconsistent with its role as a responsible public body. The Court allowed a four-week period for the university to begin disbursing benefits, warning that failure to comply could lead to penalties and require the registrar’s personal appearance to explain the delay.

ISSUES BEFORE THE HIGH COURT

1. Whether SNDT Women’s University is obligated to pay retirement benefits to Petitioners as per the 7^th Pay Commission?
2. Whether the non-payment of updated benefits and DA constitutes a breach of the university’s duty towards its employees?

CONTENTIONS OF THE PARTIES

The Petitioners argued that they, as retired employees and senior citizens, were enduring significant hardship due to the university’s persistent delays in disbursing pension benefits. The Petitioners highlighted that many of the Petitioners had passed away, with their heirs now seeking the benefits owed. It was further stressed that this was not an isolated incident; rather, SNDT University had a history of not paying its employees on time.

The Petitioners referenced a past order from October 25, 2005, relating to the applicability of the 6^th Pay Commission. This order was based on an agreement between the university and the union representing non-teaching employees. The order applied prospectively to all non-teaching employees, including those at autonomous, aided, and unaided institutions under the university’s administration. The Petitioners used this historical precedent to demonstrate that the university had previously failed to honour its commitments and had only implemented the benefits after prolonged negotiations and legal interventions.

The Respondents subsequently  acknowledged their obligation to pay the Petitioners according to the 7^th Pay Commission recommendations. However, they argued that the university was constrained by financial limitations and could not immediately fulfil the payment obligations. The Respondents explained that a corpus fund was being created to finance these payments, which they anticipated could be generated by June 2025. The Respondents indicated that due to the absence of specific instructions, the university could only assure the Court that it was attempting to gather the necessary funds.

The Respondent further clarified that payments to unaided, non-teaching pensionary staff and arrears as per the 7^th Pay Commission could only be implemented after June 1, 2025, assuming the corpus fund is established successfully. The Respondent further did not consider an instalment-based payment plan, and did not present a concrete or reasonable timeline, underscoring their financial limitations. The Respondents’ stance was that these constraints justified the delay, and they sought additional time to comply with the pension disbursement commitments.

DECISIONS AND FINDINGS

The Court observed that the university had been previously directed to make payments within a time-bound period. However, despite prior negotiations and settlements between the university and employees, it failed to fulfil these obligations. Consequently, retired employees were compelled to return to court due to non-compliance with updated pay scales under the 7^th Pay Commission, effective from January 1, 2016.

The Court observed that, as a statutory body governed by the Maharashtra Public Universities Act, 2016 (hereinafter referred to as “the Act”), SNDT Women’s University has a legal duty to support employee welfare. The Court emphasized that the Act was established to promote high educational standards and excellence, which cannot be achieved without the active participation and welfare of both teaching and non-teaching staff. The Court noted the existence of provisions in Chapter 13 of the Act for funding, accounting, and auditing specific to SNDT University, highlighting that over 300 colleges are affiliated with the institution. This statutory obligation, the Court indicated, extends to timely payment of dues as part of fostering academic excellence.

The Court further held that once the 7^th Pay Commission was implemented, the university should have proactively started securing funds and creating a corpus to meet payment obligations. Efforts to secure these funds should not have been triggered only by the petition. The Court expressed concern over the university’s failure to specify any attempts to gather funds or secure finances following the pay commission’s implementation.

The Court cited the case of Mahatma Gandhi Mission & Anr. vs. Bhartiya Kamgar Sena & Ors. (2017), and reinforced that institutions are required to find innovative ways to generate funds to meet their obligations under revised pay scales, even in the absence of grants. Since there was no debate over the Petitioners’ entitlement, the only question was how and when payments would be made. The Court found the university’s lack of a payment commitment unacceptable, noting the frequent adjournments and lack of action from university representatives despite the ongoing hearings.

Due to the university’s continued delays, the court established a specific timeline for payments, disapproving of the university’s suggestion to postpone payments until June 2025. It warned that allowing the university’s stance would encourage affiliated colleges to disregard their own employees’ dues. As a statutory institution, the university’s refusal to pay its retired employees’ entitlements was deemed unacceptable.

Moreover, the Court issued an interim order requiring the university to start paying pensionary benefits, including DA, under the 7^th Pay Commission guidelines, starting July 1, 2024. The Court directed that the arrears be paid in three instalments: First Instalment included 33% of arrears to be paid within three months, Second Instalment included next 33% of arrears to be paid within three months after the first instalment and Final Instalment where Remaining 34% of arrears to be paid within three more months. The Court stipulated that if the first instalment was not paid within three months, the remaining two instalments would be voided, and the entire arrears would become due within six months from the date of this order. Additionally, the Court granted the Petitioners the right to file an interim application if the university defaulted on any payment deadlines.

AMLEGALS REMARKS

This Hon’ble Bombay High Court judgment is an important landmark win for the cause of employee welfare rights, particularly in relation to retired public servants who survive on pension benefits. The Court’s stern stance on SNDT University’s lacklustre approach in implementing the 7^th  Pay Commission showcases that indifference to lower financial conditions cannot be allowed as a reason for unduly delaying statutory obligation towards retired workers. This order has resulted in setting a sharp timeline for disbursal and upholding the dismissal of the university’s proposal to disburse after June 2025 as the message that the institution needs to anticipate and act towards fulfilling financial obligations for the employees.

This judgment provides much-needed precedent across educational institutions in India wherein universities, as statutory bodies, need to balance employee welfare with excellence in academics. This decision further drives home the fact that public organizations cannot plead financial constraints as a reason for going back on their obligations under pay commission recommendations, mainly when these would impact the livelihood of retired employees who have devoted their professional lives to working in public service.

Team AMLEGALS