Introduction

In All India Institute of Medical Sciences, Jodhpur & Anr. v. Dr. Mahendra Kumar Garg & Ors. [2025 LiveLaw (Raj) 203], a Division Bench of the Rajasthan High Court—comprising Justice Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali—addressed the contentious issue of applying the “pay minus pension” rule to retired medical professionals re-employed by AIIMS Jodhpur. The doctors, who had been appointed in 2018 without any mention of pension deductions in their employment terms, challenged the retrospective enforcement of this rule. While the Court held that the rule was legally mandated, it strongly criticized AIIMS Jodhpur’s negligent handling of its own statutory obligations and ruled that the deductions could only be applied prospectively.

Arguments of the Petitioners (Retired Doctors):

The retired doctors, re-employed by AIIMS Jodhpur in 2018, initially approached the Central Administrative Tribunal (CAT) and subsequently the High Court, contesting the decision to retrospectively deduct their pensions from salaries. Their key contentions were:

1. No mention in appointment orders: Their employment contracts did not reference any deduction under the “pay minus pension” rule.
2. Unilateral change of terms: Imposing this rule five years into service constituted an arbitrary and retroactive alteration of employment terms.
3. Violation of natural justice: The deductions, made without prior notice or consent, would cause financial hardship and were legally unjustified.
4. Good faith reliance: The doctors accepted their positions based on the terms originally stated and should not be penalized for institutional oversights.

Arguments of AIIMS Jodhpur:

AIIMS Jodhpur argued that:

1. Statutory compliance is mandatory: The doctors, as re-employed pensioners, were subject to the Central Civil Services (Fixation of Pay for Re-employed Pensioners) Orders, 1986, which require that pension be deducted from re-employment salary.
2. Omission doesn’t nullify the law: The absence of a deduction clause in appointment letters did not override the binding nature of the applicable statutory rules and Office Memoranda.
3. Uniform application across government institutions: Ministerial circulars and administrative guidelines required all government institutions to apply the “pay minus pension” principle uniformly.
4. CAT erred in exempting deductions: The Tribunal’s leniency undermined statutory mandates that must prevail over administrative lapses.

Court’s Analysis & Judgment:

The High Court agreed that:

The 1986 Order and relevant Office Memoranda are statutorily binding and apply automatically to re-employed pensioners.

• AIIMS’s own regulations (1999) classify re-employed retired persons as subject to “pay minus pension,” thus affirming the applicability of the rule.
• However, the Court came down heavily on AIIMS for: Negligent administration: Failing to include the deduction clause in appointment letters for over five years.
• Institutional fault: The error stemmed from AIIMS’s internal mismanagement, not any wrongdoing on the part of the doctors.
• Unfair retroactive enforcement: Retrospective application would be punitive, especially when the employees had no prior notice or reason to expect such deductions.

Final Order:

The Court ruled that the “pay minus pension” rule is valid and binding only from the date of the judgment onward. Any attempt to recover past payments was disallowed. The petitions were partly allowed—blocking retrospective recovery—and partly dismissed, affirming the rule’s future application.