Supreme Court Holds Arrears of Disability Pension Cannot Be Restricted to Three Years, Grants Full Arrears with Interest

Summary: The batch of appeals arose from conflicting decisions of the Armed Forces Tribunal on whether arrears of disability pension, particularly broad banding benefits, could be restricted to three years prior to filing of original applications; the Union of India contended that claims were governed by limitation principles and Section 22 of the Armed Forces Tribunal Act, 2007, relying on precedents including Tarsem Singh, while ex-servicemen argued that the right crystallised upon the three-Judge Bench decision in Ram Avtar (2014), which held that personnel retiring with disability attributable to or aggravated by military service are entitled to broad banding; the Court traced the statutory and regulatory framework, government instructions dated 31.01.2001, 19.01.2010 and 18.04.2016, and noted that the Government itself had consciously decided to grant arrears from 01.01.1996 or 01.01.2006; holding that pension is neither a bounty nor a matter of grace but a vested right and property, the Court observed that once the State has recognised the entitlement and judicial determination has settled the issue in rem, it cannot acknowledge the right while denying its full monetary content by invoking limitation; the Court distinguished Tarsem Singh and held that the right to approach the Tribunal accrued only upon the decision in Ram Avtar, and therefore the bar of delay or laches had no application.

Decision: The appeals filed by the Union of India were dismissed; the Tribunal’s orders restricting arrears to three years preceding the filing of applications were quashed; the ex-servicemen were held entitled to disability pension including broad banding from 01.01.1996 or 01.01.2006, as applicable, along with interest at 6% per annum; pending applications were disposed of with no order as to costs.