Nabin Pokharel, an under-secretary at the Ministry of Forests and Environment, was found dead at his residence in Lokanthali, Bhaktapur, on May 24, 2024. Investigators later recovered a suicide note from the site. This tragic incident occurred just three days after the Special Court convicted Pokharel of corruption related to the procurement of equipment for the Security Printing Centre.

The high-profile procurement scandal also saw the conviction of Bikal Paudel, the former executive director of the Security Printing Centre. The court sentenced Pokharel to six months in prison, imposed a fine of Rs58.5 million alongside a recovery order of similar amounts. Following the judicial pronouncement, Pokharel was dismissed from public service, which resulted in the immediate termination of his pension benefits.

"He had only about a year and a half left before reaching his mandatory retirement age," said a member of Pokharel’s family, requesting anonymity. Because the conviction came while he was still technically in active service, he was removed from office, and his due pension was completely blocked under current regulations.

This case brings forward a critical issue within national anti-corruption discourses. Under current legal interpretations, state officials convicted of corruption while in active service forfeit their retirement benefits. In contrast, no clear statutory framework exists to halt the pension disbursement of officials convicted after retirement. As a result, those who retire before conviction continue to receive pension.

This legislative imbalance creates a double standard for individuals convicted of identical financial crimes. The structural division is evident across several major corruption cases prosecuted in recent years.

A primary example involves the Sudan procurement scandal, which centered on financial regularities in purchasing Armoured Personnel Carriers (APCs) for the Nepal Police unit deployed on a UN peacekeeping mission. On 17 May 2023, the Supreme Court upheld the convictions of three former inspectors general—Om Bikram Rana, Hem Bahadur Gurung, and Ramesh Chand Thakuri.

When the Commission for Investigation of Abuse of Authority (CIAA) filed the case, Rana and Gurung had already retired from public service. Meanwhile, Thakuri had been transferred from his post as police chief to serve as the prime minister's security adviser. Although the initial fraudulent procurement decisions began under Rana, the final monetary transactions were completed during Thakuri's term, which drew him into the litigation. Despite being convicted in the same case, Thakuri lost his pension because he was a serving official, while Rana and Gurung continue to receive theirs.

A similar pattern emerged in the Lalita Niwas land grab case, which involved the illegal transfer of government land in Baluwatar to private individuals. The CIAA filed charges against 175 individuals, and on 15 February 2024, the Special Court convicted 131 people, including multiple civil servants.

Among those convicted were high-ranking retired bureaucrats, including Deep Basnyat, a former chief commissioner of the CIAA; Chhabi Raj Pant, who served as a minister in the interim cabinet led by Khil Raj Regmi; and Tika Ram Ghimire. Because these individuals had already retired when the court ruled, their pensions remained unaffected. Conversely, active civil servants with over two decades of service, such as Mani Kumar Rana and Phanindra Prasad Dahal from the Ministry of Land Management, faced immediate dismissal and lost all retirement benefits.

Under current laws, civil servants receive lifetime pensions upon retirement. If a retired employee dies, the benefit transfers to their surviving spouse. In Pokharel’s case, his sudden dismissal meant his widow was left without any long-term state support.

"A pension is a benefit earned through decades of continuous public service," argued a Pokharel family member. "The punishment for a specific administrative decision should not retrospectively cancel decades of completed work. Applying one rule to retired staff and another to active staff creates an unfair system."

The civil service pension system is traditionally viewed as state recognition for long-term public service. It functions as a vital social security mechanism that protects families from sudden income loss and provides financial stability during old age.

However, anti-corruption advocates question why the state should use taxpayer funds to provide financial benefits to individuals judicially proven to have defrauded public resources.

The administration of these benefits is governed by the Civil Service Act for civilian bureaucrats and the Police Act and Regulations for security personnel. While these laws mandate the immediate dismissal and forfeiture of future benefits for active staff convicted of crimes, they remain silent on managing benefits for those already retired. Taking advantage of this provision, retired officials convicted of corruption continue to collect state pensions.

Efforts to reform this legislative gap have faced ongoing political disruptions. On March 4, 2024, the then minister for federal affairs and general administration Anita Devi introduced the Federal Civil Service Bill to the House of Representatives. The draft legislation aimed to stop pension payments for retired officials convicted of financial crimes.

Section 68 (1) of the bill stated that once enacted, any retired individual receiving a pension or a family pension would lose that entitlement if convicted by a court of corruption or other criminal offenses involving moral turpitude.

The bill was sent to the State Affairs and Good Governance Committee for detailed review after a preliminary discussion in Parliament. A parliamentary subcommittee later altered the clause to focus on preventing the receipt of dual state benefits instead of a total pension ban. However, before the bill could return to Parliament, the interim government formed after the Gen Z movement dissolved the House of Representatives.

The subsequent civil service ordinance introduced by the administration led by Prime Minister Balendra Shah omitted the pension suspension clause entirely.

Ram Hari Khatiwada, the former chair of the State Affairs and Good Governance Committee, confirmed that committee members broadly supported a unified approach to strip all convicted individuals of their pensions, regardless of retirement status.

"The committee agreed that the state should not provide financial benefits to anyone convicted of corruption," said Khatiwada. "However, following the dissolution of the House of Representatives on September 12, 2025, the bill stalled. The choice to revive these provisions now rests with the current government and parliament."

Legal experts suggest that any changes to pension benefits must be rooted in clear law rather than temporary administrative decrees. Senior advocate Srihari Aryal, a former president of Transparency International Nepal, said pensions represent a deferred right earned through past service.

"A pension is an economic benefit given to secure a retired worker's livelihood based on past service," said Aryal. "Even when an official is dismissed, standard procedures acknowledge their prior years of service. If an individual faces prosecution years after retirement, their prior decades of service cannot be legally erased."

This debate mirrors legal developments across South Asia, particularly in India, where the judiciary has addressed similar issues. The Supreme Court of India has ruled that pensions are an earned right rather than a discretionary grant from the state. However, Indian jurisprudence allows the state to withhold pensions from convicted individuals if explicit statutory laws govern the process.

In the landmark case, Deokinandan Prasad, a state education official of Bihar, was demoted and dismissed in 1960, and his pension was withheld by administrative order. In 1971, a constitutional bench declared the administrative removal of pension benefits illegal. The court ruled that while the state possessed the authority to withhold pensions from convicted individuals, it could only do so through formal legislation, not via executive orders. Following this ruling, the Indian government enacted the Central Civil Services (Pension) Rules, 1972, which provided explicit statutory powers to withhold or withdraw pensions from both serving and retired officials convicted of serious offenses.

In Nepal, the distinction between active and retired officials remains in place. Pokharel’s family is currently challenging the Special Court’s verdict in the Supreme Court.

Because Pokharel’s family inherited the financial obligations resulting from the conviction, they chose to continue the appeal process. "Though he had completed the required years of service to qualify for his pension, the Department of National Personnel Records declined to issue his retirement pension certificate. We are continuing this legal challenge to seek clarity,” said Pokharel’s family member.