“No-Deduction Rule” for Retired High Court Judges Heading State Administrative Tribunals

1. Introduction

On 23 July 2025, the Himachal Pradesh High Court in Justice (Retd.) V.K. Sharma v. State of Himachal Pradesh (2025 HHC 23845) delivered a precedent-setting decision answering a seemingly narrow question with far-reaching consequences: Can the pension of a retired High Court Judge be deducted from the fixed salary he receives after being appointed Chairman of a State Administrative Tribunal (SAT) under the Administrative Tribunals Act, 1985?

The petitioner, Justice V.K. Sharma (retired Judge of the Himachal Pradesh High Court), was appointed Chairman of the re-established Himachal Pradesh Administrative Tribunal (HPAT) at a fixed salary of ₹80,000 (later revised to ₹2,25,000). State authorities, applying the usual “pay-minus-pension” formula for re-employed civil servants, subtracted his judicial pension from this salary. Justice Sharma challenged the deductions, contending that:

His appointment was not a civil-service re-employment.
Section 8(3) of the Administrative Tribunals Act mandates that the service conditions of a Tribunal Chairman must be identical to those of a sitting High Court Judge.
Proviso 1 to Section 10 of the Act and Article 221(2) of the Constitution prohibit any post-appointment variation in salary to the incumbent’s disadvantage.

The State defended its action by relying on the CCS (Fixation of Pay of Re-employed Pensioners) Orders, 1986, Rule 13 of the (repealed) 1986 HPAT Service Rules, and the generic principle that “no officer can draw more than the last pay drawn.”

Justice Sandeep Sharma, J., decisively sided with the petitioner, striking down all deduction orders and formulating a new “No-Deduction Rule”: A retired High Court Judge appointed as Chairman of a State Administrative Tribunal enjoys the full fixed salary of a sitting High Court Judge in addition to the pension earned from earlier judicial service; the State cannot apply the ‘pay minus pension’ formula because the appointment is a fresh constitutional/ statutory office, not a civil re-employment.

2. Summary of the Judgment

The Court quashed every State order that had reduced Justice Sharma’s salary by the quantum of his pension (Annexures P-7, P-10, P-12, P-15, P-17, etc.).
Directed the State to implement the original Presidential appointment order (fixed pay) and release full arrears with 9% interest within three months.
Declared that:
- Appointment of a retired High Court Judge as Chairman of an SAT is not “re-employment in civil service” but an independent judicial post.
- Section 8(3) (service parity with High Court Judges) and the first proviso to Section 10 (no adverse variation) override State rules and executive instructions.
- 1986 HPAT (Salaries & Allowances) Rules had stood repealed once the earlier Tribunal was abolished in 2008; resurrection of those rules in 2015 was ultra vires.
- Pension is a vested constitutional right; deduction would amount to an impermissible curtailment of that right.

3. Analysis

3.1 Precedents Cited and Their Influence

All India Judges’ Association v. Union of India, (1993) 4 SCC 288
Clarified that judges are not “employees” but constitutional office-holders, and complete financial independence is essential to judicial independence.
Union of India v. K.B. Khare, 1994 Supp (3) SCC 502
Held that service in the Administrative Tribunal is not civil re-employment; therefore normal re-employment pension rules do not apply.
D.S. Nakara v. Union of India, (1983) 1 SCC 305
Laid down that pension is neither bounty nor grace but a vested right earned for past service.
S.P. Sampath Kumar v. Union of India, (1987) 1 SCC 124
Equated CAT/SATs to High Courts for purposes of judicial review; thus, their members must enjoy equal independence and conditions.
State of H.P. v. Lt. Gen. (Retd.) B.S. Thakur, LPA 83/2013 (HP HC, 2023)
Already rejected “pay-minus-pension” for constitutional functionaries (Public Service Commission members).
Distinguished: State of H.P. v. Justice Arun Kumar Goel (Retd.), CWP 100/2010 (HP HC, 2014)
The Court explained that Consumer Forum Presidents are appointed under a State statute, not Article 323-A, and the rule there expressly provided “salary minus pension.” Hence not applicable to SAT Chairmen.

3.2 Legal Reasoning

The Court’s reasoning proceeds in concentric layers:

Statutory Parity (Section 8(3)). Both the Administrative Tribunals Act and the Central notification of 29-12-2014 expressly state that the Chairman’s service conditions “shall be the same as applicable to Judges of the High Court.” Sitting Judges draw a fixed salary in additio to the judicial pension (which begins only on retirement); there is no concept of deducting an earlier pension from a serving Judge’s pay.
Non-variation After Appointment (Proviso 1 to Section 10 and Article 221(2)). Once the President fixed Sharma J.’s pay at ₹80,000 (subsequently ₹2,25,000), the State could not alter it to his detriment.
Nature of the Office. Relying heavily on All India Judges’ Association and K.B. Khare, the Court distinguished a Tribunal Chairmanship from a post “in connection with the affairs of the Union/State.” It is an independent judicial post under the constitutional scheme of separation of powers.
Repeal of 1986 Rules. The 1986 HPAT Rules contained a “minus pension” clause, but those rules lapsed with the 2008 abolition of the Tribunal. The State never validly revived them, and DoP&T specifically directed that they need not be re-framed.
Pension as Vested Right. Deduction would dilute a constitutional property right (Article 300-A), violating the principle laid down in D.S. Nakara that pension is deferred pay earned by past service.

3.3 Likely Impact of the Judgment

This decision is the first to crystallise a clear “No-Deduction Rule” for retired High Court Judges who later hold statutory/constitutional judicial posts such as:

Chairman/Members of State Administrative Tribunals (under Section 6).
Judicial Members or Chairpersons of Central tribunals constituted under Part XIV of Finance Act 2017 or Tribunals Reforms Act 2021, if they are retired High Court Judges.
Chairpersons of State Human Rights Commissions, Lokayuktas, etc., wherever parity with sitting High Court Judges is legislatively stipulated.

Administratively, States will now have to:

Revisit pay-fixation policies for retired judges appointed to quasi-judicial bodies.
Budget for dual outgo (pension + full current pay) instead of applying CCS re-employment orders.
Avoid resurrecting defunct service rules without express legislative re-enactment.

Judicially, the ruling advances the larger constitutional objective of securing financial independence of post-retirement judicial office-holders, thereby addressing long-standing concerns over potential executive leverage through remuneration controls.

4. Complex Concepts Simplified

Administrative Tribunal (AT): A specialised body created under Article 323-A of the Constitution to decide service-matters disputes in place of High Courts. In Himachal Pradesh, it is called HPAT.
“Pay minus pension” principle: A standard formula in civil service re-employment: the basic pension drawn from previous service is deducted from the new salary so that total emoluments do not exceed last pay drawn.
Proviso 1 to Section 10 of the Administrative Tribunals Act: Guarantees that once appointed, a Tribunal Chairman’s salary/allowances cannot be reduced to his disadvantage.
Article 221(2) of the Constitution: Provides similar protection to High Court Judges: their allowances, leave and pension cannot be varied to their disadvantage after appointment.
Pension as “Deferred Pay”: Supreme Court jurisprudence treats pension not as charity but as a constitutional property right reflecting salary set aside for post-retirement sustenance.

5. Conclusion

The Himachal Pradesh High Court’s ruling does much more than restore the arrears of one retired judge. It affirms a vital constitutional message: Financial autonomy is a non-negotiable facet of judicial independence, and retired judges who accept subsequent statutory judicial offices cannot be subjected to civil-service re-employment formulas that erode that autonomy.

By declaring the deduction of pension from the fixed salary of an SAT Chairman unlawful, the Court has:

Harmonised statutory interpretation with constitutional protections (Article 221 & separation of powers).
Reinforced the idea that tribunals meant to substitute High Courts must mirror the latter’s independence in fact and appearance.
Provided a clear operational directive to governments across India: honour the fixed pay of retired-judge appointees in full, and treat pension as sacrosanct.

Future litigation on tribunal remuneration schemes, as well as upcoming rule-making under the Tribunals Reforms Act 2021, will inevitably invoke this “No-Deduction Rule”, positioning the judgment as a cornerstone authority in the law of post-retirement judicial appointments.