Reduction in pension to retired RBI staff stayed

Special Correspondent

CHENNAI: The Madras High Court has granted interim stay of operation of a Reserve Bank of India letter of October 2008 by which the pension of a retired employee was reduced.

In his order granting interim relief, Justice V.Ramasubramanian ordered notice to the RBI and posted the case for June 15.

In his petition filed by counsel K.N.Pandian, petitioner D.Balakrishna Gupta of Sowcarpet submitted that he joined the bank in Chennai as a clerk in 1951. He was later promoted Staff Officer. He maintained an unblemished record of service and retired on October 31, 1987.

He was getting pension with a basic pay of Rs.2,096 and gross amount of Rs.10,983. By an administration circular issued in 2003, the pension for his cadre was revised and enhanced to Rs.7,688 as basic and Rs.14,552 as gross amount of pension.

To his shock and surprise, on October 28 last year, the bank intimated him by a letter of order that the updation of pension was not permissible. The administration circular was withdrawn unilaterally with immediate effect.

As a result, his basic pension was reduced from Rs.7,688 to Rs.2,096. Mr.Gupta submitted that the bank, without applying its mind, had suddenly reduced pension.

Once updated and revised, the bank could not reduce it to its initial position.

Only after an elaborate and detailed consideration, the basic pension was increased.


Withdrawing the administration circular without giving him an opportunity amounted to violating the principles of natural justice. He was put to heavy financial loss at an advanced age.

The October 2008 order was illegal and liable to be set aside.

The petitioner prayed the court to call for records culminating in the impugned letter of order and to quash the same and to direct the bank to pay the revised pension to him as per the administration circular.

He also prayed the court to stay the operation of the impugned letter pending disposal of the petition.

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