commuted benefit is not recoverable from the petitioner’s monthly pension. The pension had to be paid whole.

 

SUPREME COURT OF SRI LANKA - 

DETAILED CASE HEADNOTE SC (F/R) Application No. 282/2018 | Decided 14 January 2026 JUSTICE A.H.M. UPALY ABEYRATHNE v. DIRECTOR GENERAL OF PENSIONS AND OTHERS SC (F/R) Application No. 282/2018 

Decided on 14 January 2026 Court Supreme Court of Sri Lanka Bench S. Thurairaja, PC, J.; A.L. Shiran Gooneratne, J.; Mahinda Samayawardhena, J. (dissenting) 

Nature Fundamental rights application under Articles 17 and 126 of the Constitution Leave to proceed Granted under Article 12(1) on 4 November 2022 Argued 5 June 2024 and 25 July 2025 Decision Application allowed by majority (2:1); no order as to costs Principal provisions Articles 3, 4, 12(1), 108(1), 108(2), 125(1) and 126; Minutes on Pensions; P.A. Circulars Nos. 44/90, 32/96 and 32/96(1); Gazette Nos. 981 and 1190/18 

HEADNOTE by BLOGGER

Constitutional law - Judicial independence - Pension of Judges of the Supreme Court and Court of Appeal - Commuted pension/gratuity - Recovery by deductions from monthly pension - Whether a protected pension entitlement may be diminished by administrative action, Cabinet decision or parliamentary resolution - Article 108(2) - Equality and legality - Legitimate expectation - Majority and dissent. The petitioner, a retired Judge of the Supreme Court, complained that his monthly pension had first been withheld altogether and was later paid subject to deductions intended to recover the lump sum described in the administrative record as a “commuted pension” or “commuted gratuity”. Public Administration Circular No. 44/90 had conferred, upon qualifying public officers, an unrecoverable commuted benefit together with an unreduced pension calculated at 90 per cent of salary. Although that Circular was later cancelled, the Attorney-General advised in 1997 that the cancellation could not be applied to Judges of the Superior Courts where its effect would be to reduce an entitlement protected by Article 108(2). On that footing, the Department of Pensions paid retired Superior Court Judges the commuted lump sum and an unreduced monthly pension for many years. Following an Auditor-General’s query in 2015, administrative committees, the Cabinet, and later parliamentary processes sought to recover the commuted amount by deductions from monthly pensions. The petitioner maintained that the Constitution did not permit the State to grant a Judge a pension benefit and later diminish it, directly or indirectly, after appointment. 

The respondents contended, in substance, that the lump sum was an advance which ought to be recovered over 120 months and that such recovery did not reduce the pension entitlement itself. Held, by S. Thurairaja, PC, J., with A.L. Shiran Gooneratne, J. concurring (Mahinda Samayawardhena, J. dissenting) Article 108(2) is an express constitutional shield. It prohibits both open and disguised reductions of the salary and pension entitlement of a Judge of the Supreme Court or Court of Appeal after appointment. The protection exists not as a personal favour to Judges, but as a safeguard for judicial independence and, through that independence, for the sovereignty of the People and the rule of law. 

The benefit under Circular No. 44/90, as applied to Superior Court Judges and maintained pursuant to the AttorneyGeneral’s advice and the settled administrative practice, could not be withdrawn or converted into a recoverable liability by departmental action, an audit objection, a committee decision, a Cabinet decision, or a parliamentary resolution of the kind placed before the Court. The constitutional question turns on practical effect, not on the label attached to the transaction. 

A deduction from the monthly pension leaves the retired Judge with less pension in hand and is therefore a diminution. All decisions and steps taken to recover the commuted pension from retired Judges of the Superior Courts, including Cabinet decisions and parliamentary resolutions directed to that recovery, were ultra vires, illegal, irrational, unconstitutional, null and void. They violated Article 108(1) and (2), read with Articles 3 and 4, and infringed Article 12(1). The Director General of Pensions was directed to continue paying an unreduced monthly pension without deducting the commuted pension/gratuity. A reduction cannot be achieved by ordinary administrative machinery. According to the majority, an alteration that diminishes, or is capable in future of diminishing, those benefits would require constitutional change approved by a two-thirds majority in Parliament and by the People at a referendum. 

LEGITIMATE EXPECTATION

The petitioner also possessed a legitimate expectation founded upon the constitutional guarantee, the AttorneyGeneral’s opinions, official correspondence and the longstanding course of payment. The impugned recovery measures defeated that expectation and were unreasonable. Plain-language result Once a person becomes a Judge of the Supreme Court or Court of Appeal, the State may improve that Judge’s salary or pension. But it may not later take away part of what has been secured, whether by cutting the rate, changing the formula, replacing a percentage benefit with a fixed sum that loses value, or deducting an earlier gratuity from the monthly pension. A different name cannot alter the substance. If the Judge receives less because of the measure, the pension has been reduced. Accordingly, the lump sum paid as the commuted pension/gratuity cannot, under the scheme considered in this case, be taken back by monthly deductions from the Judge’s pension. The pension must be paid in full. A recovery may arise only in genuinely exceptional circumstances, such as fraud or an established clerical error, and then only through due process of law; that qualification appears expressly in the concurring judgment of Gooneratne, J. Material facts and procedural history 1. The petitioner was appointed to the Court of Appeal in 2008 and later served as a Judge of the Supreme Court. 2. When the application was filed on 7 August 2018, the petitioner alleged that no monthly pension was being paid. Leave to proceed under Article 12(1) was granted on 4 November 2022. 3. During the proceedings, pension payments commenced. The remaining controversy concerned deductions intended to recover the commuted lump sum. 4. Before 1990, the Minutes on Pensions contemplated commutation with recovery through a reduced pension for a specified period. 5. Public Administration Circular No. 44/90 dated 18 October 1990 introduced a 90 per cent pension with an unrecoverable commuted benefit and no monthly reduction for qualifying officers. 6. Circular No. 32/96 dated 12 November 1996 and Circular No. 32/96(1) dated 16 December 1996 cancelled Circular No. 44/90; Gazette No. 981 dated 19 June 1997 gave effect to the changed scheme. 7. The Attorney-General advised on 15 September 1997 that applying the reduction to Judges protected by Article 108(2) would be unconstitutional. The advice was first given in relation to Justice P. Ramanathan and was then applied to Superior Court Judges generally. 8. Gazette No. 1190/18 dated 28 June 2001 provided a pension of 90 per cent after prescribed judicial service, but did not expressly retain commuted and death gratuity provisions. The established payment practice nevertheless continued. SUPREME COURT OF SRI LANKA - DETAILED CASE HEADNOTE SC (F/R) Application No. 282/2018 | Decided 14 January 2026 9. An Audit Query dated 16 February 2015 questioned the non-recovery. Administrative action thereafter commenced deductions from retired Judges’ pensions from about 2017. 10. Further Attorney-General’s opinions, Cabinet memoranda, Cabinet decisions in 2019, 2020 and 2025, order papers and parliamentary resolutions followed. 11. The majority found that decisive legal material had not always been put before the Cabinet and that executive actors could not conclusively interpret the Constitution in place of the Supreme Court under Article 125(1). Issues between the parties 12. Whether withholding the petitioner’s pension and later paying it subject to deductions violated Article 12(1). 13. Whether the commuted pension/gratuity was an unrecoverable terminal benefit or a recoverable advance. 14. Whether deductions over 120 months amounted in substance to a reduction prohibited by Article 108(2). 15. Whether later circulars, Gazettes, audit directions, committee decisions, Cabinet decisions, order papers or parliamentary resolutions could lawfully alter the protected entitlement. 16. Whether Superior Court Judges form a constitutionally distinct class from ordinary public officers. 17. Whether the relevant decisions were made by competent authorities upon all material legal advice. 18. Whether the petitioner had a legitimate expectation that the unreduced pension and unrecovered commuted benefit would continue. 19. What constitutional procedure would be necessary to reduce the protected pension entitlement. 20. Whether relief should practically extend to other retired Judges of the Superior Courts. Majority reasoning 1. Article 108(2) protects substance, not merely form The provision prohibits any measure which in practical operation diminishes the salary or pension entitlement after appointment. It reaches both direct cuts and covert or delayed erosion. 2. The protection serves the public Financial security protects judicial independence. Judicial independence protects the People’s judicial power, constitutional government and the rule of law. 3. Judges are not ordinary employees Judges exercise sovereign judicial power and cannot bargain or resort to industrial action. Superior Court Judges bear distinctive constitutional and post-retirement restrictions and form a special constitutional class. 4. The benefit had become part of the protected arrangement The 1997 Attorney-General’s opinion, official correspondence and long practice treated the commuted sum as payable with an unreduced pension. Later administrative action could not turn that benefit into a debt recoverable from pension. 5. Substance prevails over terminology Calling the payment a gratuity, commuted pension, advance or loan did not decide the matter. The practical effect of monthly recovery was to leave the Judge with less pension. 6. Administrative and political measures were insufficient An audit query, internal committee, Director General, Cabinet decision or ordinary parliamentary resolution could not override Article 108(2). 7. Equality and rationality The recovery decisions were ultra vires, irrational and contrary to the constitutional scheme. The Court accepted that the history arose from administrative mistakes rather than mala fides. SUPREME COURT OF SRI LANKA - DETAILED CASE HEADNOTE SC (F/R) Application No. 282/2018 | Decided 14 January 2026 8. Legitimate expectation The constitutional promise, legal opinions, official assurances and settled practice created a legitimate expectation which the recovery measures unlawfully frustrated. Orders made · The application was allowed by majority. · All decisions and steps to recover the commuted pension from retired Superior Court Judges were declared ultra vires, illegal, irrational, unconstitutional, null and void. · The declaration included Cabinet decisions and parliamentary resolutions directed to recovery. · The recovery was declared to violate Article 12(1). · The Director General of Pensions was directed to continue paying the unreduced monthly pension without deducting the commuted pension/gratuity. · The Registrar was directed to forward the judgment to the Director General of Pensions and other relevant parties. · No order was made as to costs. Practical impact on Supreme Court and Court of Appeal Judges Principle Practical consequence Existing entitlement is locked in The arrangement protected after appointment cannot be reduced to the Judge’s disadvantage. Later improvements are also protected Once an increased benefit is granted, it cannot later be withdrawn if that withdrawal reduces the entitlement. No pension deductions for this gratuity The commuted pension/gratuity considered in this case cannot be recouped by withholding part of the monthly pension. No indirect erosion The State cannot evade Article 108(2) by changing labels, formulas, allowances or payment methods. Ordinary approval is inadequate A circular, Gazette under ordinary pension powers, audit decision, Cabinet decision or simple parliamentary resolution cannot authorise reduction. Procedure for a lawful reduction A diminishing change would require a constitutional law passed by a two-thirds majority and approved at a referendum. Exceptional recovery Fraud or established clerical error may be addressed only through due process, as stated in the concurring judgment. Dissent of Mahinda Samayawardhena, J. The dissent accepted the entitlement to a monthly pension of 90 per cent of the last drawn salary, but rejected the claim that the commuted lump sum must remain unrecoverable. Circular No. 44/90 was viewed as a temporary voluntary-retirement measure withdrawn in 1996, before the petitioner’s appointment in 2008. The 2001 Gazette did not provide for an unrecoverable commuted pension. The lump sum was an advance recoverable in instalments without interest, and recovery did not reduce the underlying pension entitlement. The dissent also rejected legitimate expectation because an expectation must rest upon a lawful basis. It would have dismissed the application without costs. SUPREME COURT OF SRI LANKA - DETAILED CASE HEADNOTE SC (F/R) Application No. 282/2018 | Decided 14 January 2026 Ratio decidendi Where a pension benefit has attached to the office of a Judge of the Supreme Court or Court of Appeal and is protected after appointment by Article 108(2), the State cannot diminish that benefit, directly or through a recovery mechanism which reduces the monthly pension actually received. Such diminution cannot be authorised by administrative action, Cabinet decision or ordinary parliamentary resolution. A valid reduction would require the entrenched constitutional procedure applicable to Articles 108, 3 and 4. Important observations · Judicial salary and pension protection exists for the public, not for the private enrichment of Judges. · The existence of governmental power to exert economic pressure upon Judges can damage both the appearance and reality of judicial independence. · A covert reduction includes replacing a percentage-linked benefit with a fixed sum that loses relative value over time. · Pension is an extension of compensation for past judicial service and for continuing post-retirement restrictions. · Decision-makers must receive all material legal advice; omission of decisive documents may render the decision irrational. Authorities and precedents referred to in the judgment The following references are reproduced in the form in which they appear in the judgment; apparent typographical features in the source have not been silently corrected. · Kaye v. Silver, No. 400763/08 (N.Y. App. Div.) · Williams v. United States, 48 F. Supp. 2d 52 (D.D.C. 1999) · Williams v. United States, 240 F.3d 1019 (Fed. Cir. 2001) · United States v. Will (1980) 449 US 200 · All India Judge’s Association v. Union of India And Others AIR (1993) SC 2493 · R.N. Mittal (Mr. Justice) (Retd.) & Anr v. Government of the Nct of Delhi, 1999 III AD (DELHI) 297, 78 (1999) DLT 849, 1999 (49) DRJ 532 · Van Rooyen and Others v The State and Others (General Council of the Bar of South Africa Intervening) 2002 (8) BCLR 810 (CC) · Hewamanne v. De Silvas and Another [1983] 1 Sri L.R. 1 · Re Inland Revenue (Amendment) Bill S.C. S.D. Nos 64/2022 to 71/2022 · Re Industrial Disputes (Special Provisions) Bill S.C.(S.D.) No. 30/2022 · Gilham (Appellant) v. Ministry of Justice (Respondent) [2019] UKSC 44 · Van Rooyen and Others v. The State and Others (General Council of the Bar of South Africa Intervening) 2002 (8) BCLR 810 (CC) · Re Australian Education Union & Australian Nursing Federation; ex parte Victoria (1995) 69 ALJR 451; [1995] HCA 71; 184 CLR 188; 128 ALR 610 · All India Judges’ Association v. Union of India & Ors. JT 1991 (4) SC 285 · Siriwardana v. Seneviratne and 4 Others [2011] 2 Sri L.R. 1 · Schmidt v. Secretary of State for Home Affairs [(1969) 1 All ER 904] · Breen v. Amalgamated Engineering Union [(1971) 1 All ER 1 148] · Union of lndia v Hindustan Development Corporation [(1933) 3 SCC 499] · Evans v. Gore, 253 U.S. 245 (1920) · The Constitutional Court of the Republic of Slovenia Decision No. U-I-772/21, dated 01 June 2023 (Official Gazette RS, No. 72/2023) · The Constitutional Court of the Republic of Slovenia Decision No. U-I-60/06, U-I-214/06, U-I-228/06, dated 7 December 2006 (Official Gazette RS, No. 1/07, and OdlUS XV, 84) SUPREME COURT OF SRI LANKA - DETAILED CASE HEADNOTE SC (F/R) Application No. 282/2018 | Decided 14 January 2026 · Constitutional Court of the Republic of Slovenia Decision No. U-I-159/08, dated 11 December 2008 (Official Gazette RS, No. 120/08, and OdlUS XVII, 71) Chronology Date Event 18 October 1990 P.A. Circular No. 44/90 introduced the unrecoverable commuted benefit with an unreduced 90 per cent pension. 12 November 1996 P.A. Circular No. 32/96 cancelled Circular No. 44/90. 16 December 1996 P.A. Circular No. 32/96(1) supplemented the cancellation. 19 June 1997 Gazette No. 981 altered the pension scheme. 15 September 1997 Attorney-General advised that the reduction could not apply to Superior Court Judges protected by Article 108(2). 28 June 2001 Gazette No. 1190/18 provided a 90 per cent pension after qualifying judicial service. 16 February 2015 Auditor-General’s query challenged non-recovery. 2017 onward Recovery deductions commenced against retired Superior Court Judges. 7 August 2018 Fundamental rights application filed. 19 July 2019 and 16 November 2020 Cabinet decisions supported recovery; related parliamentary steps followed. 4 November 2022 Leave to proceed granted under Article 12(1). 2023-2025 Further legal opinions, Cabinet memoranda and committee reports revisited the issue. 14 January 2026 Supreme Court delivered judgment; majority prohibited recovery by pension deduction. Editorial summary This judgment places the financial security of the highest judiciary within the architecture of popular sovereignty. Its central lesson is simple. The State may not hold a Judge’s livelihood on a string. What the Constitution secures after appointment cannot be reduced by a change of label, by an accountant’s deduction, or by an administrative decision made many years later. The commuted benefit in issue was therefore not recoverable from the petitioner’s monthly pension. The pension had to be paid whole. Prepared from the complete judgment in SC (F/R) Application No. 282/2018. Paragraph references and propositions should be checked against the official judgment when used in pleadings or publication.

READ THE SUPREME COURT JUDDGMENT HERE CLICK